The ITO, Ward-3(3)(4), Surat V. Shri Sumit Rameshbhai Bodra, Surat

ITA 3006/AHD/2015

• Counselvise Citation: [2018] 111 COUNSELVISE.COM (IT) 1921 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Set aside
• Section: 142(1); 143(2); 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL,SURAT BENCH,SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.3006/AHD/2015/SRT [ [ / ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER, WARD-3(3)(4), SURAT. VS. SHRISUMITRAMESHBHAIBODRA, SHOP NO.7, BUILDING NO.7, RUBY TRADE CENTRE, VARACHHA ROAD, SURAT 395 006. [PAN: AOAPB 3085J] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI SURESH K KABRA, C.A /RESPONDENT BY : MRS. R.KAVITHA, SR. DR /DATE OF HEARING : 05-03-2018 /DATE OF PRONOUNCEMENT : 19-03-2018 / ORDER PERC.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-3, SURAT (CIT(A) FOR SHORT) DATED 07.08.2015 FOR THE ASSESSMENT YEAR (AY) 2011-12 PASSED IN THE FIRST APPEAL NO.CAS/3/TRFD/V/177/2014-15. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOWS: 2 ITA NO.3006/AHD/2015/SRT (A.Y: 2011-12) SHRISUMITRAMESHBHAIBODRA 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO U/S. 69 OF THE ACT AMOUNTING TO RS. 39,35,000/-. 2. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF INVESTMENT MADE BY HIM. 3. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) SURAT MAY BE SET ASIDE AND THAT THE AOS MAY BE RESTORED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DELETED THE ADDITION MADE BY THE AO U/S. 69 OF THE ACT AN AMOUNTING TO RS. 39,35,000/- AS HE FAILED TO APPRECIATE THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF INVESTMENT MADE BY HIM. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER (AO) WAS QUITE CORRECT IN MAKING ADDITION BECAUSE THE NATURE AND SOURCE OF THE SAID INVESTMENT HAS NOT BEEN EXPLAINED SATISFACTORILY ALONG WITH REQUISITE SUPPORTING EXPLANATION AND EVIDENCE THEREFORE, THE AO WAS RIGHT IN MAKING ADDITION IN THIS REGARD. THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY JUSTIFIED REASON AND BASIS THEREFORE,IMPUGNED ORDER MAY KINDLY BE SET ASIDE BY THAT OF THE AO. 4. REPLYING TO THE ABOVE, THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT AT THE TIME OF REGISTRATION OF SALE DEED ONLY HANDING OVER OF CHEQUES AS PAYMENT WAS RECORDED AND CLEARING OF CHEQUES WAS NOT MADE AT THAT POINT OF TIME. THE LD. AR SUBMITTED THAT AT THE YEAR ENDING ACCOUNTS OF 3 ITA NO.3006/AHD/2015/SRT (A.Y: 2011-12) SHRISUMITRAMESHBHAIBODRA SELLER AND PURCHASER CLEARLY REFLECTS THAT THE CHEQUES HAVE NOT BEEN CLEARED AND HOWEVER, THE TRANSACTION WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS AND THE SAME WERE REFLECTED CLEARLY THEREIN. THE LD. AR VEHEMENTLY POINTED OUT THAT IN VIEW OF OUR FACTS IT CANNOT BE SAID THAT THE INVESTMENT AND PROPERTY WAS UNRECORDED OR UNEXPLAINED AND HENCE, ADDITION U/S. 69 OF THE ACT IS NOT CALLED FOR. THE LD. AR LASTLY SUBMITTED THAT FIRST APPELLATE ORDER IS QUITE CORRECT HENCE, THE SAME MAY KINDLY BE UPHELD. 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, WE MAY POINT OUT THAT THE AO MADE ADDITION U/S. 69 OF THE ACT BY OBSERVING THAT THE AMOUNT OF CHEQUES ISSUED AGAINST PURCHASE OF PROPERTY AS MENTIONED IN REGISTERED SALE DEED WERE NOT PRESENTED BY THE SELLER TO THE BANK FOR CLEARING. BEFORE THE AUTHORITIES BELOW, IT WAS EXPLAINED BY THE ASSESSEE THAT THE ARRANGEMENT OF NON-PRESENTATION OF CHEQUES WAS A MUTUAL AGREEMENT AND EQUIVALENT PAYMENT AND IN CASH HAVE BEEN MADE SUBSEQUENTLY DURING THE PERIOD FROM MAY, 2013 TO FEBRUARY, 2014AND THIS MUTUAL AGREEMENT WAS TO FACILITATE REGISTRATION OF SALE DEED. 6. THE TRANSACTION ON PURCHASE OF PROPERTY WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS AND WAS REFLECTED THEREIN. HOWEVER, AS PER SUBMISSIONS OF THE ASSESSEE BEFORE LD. CIT(A) DATED 17.04.2015 PLACED AT ASSESSEES PAPER BOOK PG. 1 & 2 STATES THAT THE SELLER SHOWN THE CHEQUE IN HAND DURING F.Y 2011-12, 2012-13 AND 2013-14 AND PAYMENT WAS MADE IN CASH DURING F.Y 2013-14 PERTAINING TO A.Y 2014-15. FROM PG. NO.6 OF ASSESSEES PAPER BOOK IT REVEALS THAT THE ASSESSEE MADE PAYMENT OF IMPUGNED CHEQUES 4 ITA NO.3006/AHD/2015/SRT (A.Y: 2011-12) SHRISUMITRAMESHBHAIBODRA BETWEEN 20.05.2013 TO 10.02.2014 ALL IN CASH AND SCRUTINY PROCEEDINGS WERE STARTED ON 01.07.2013 I.E., AFTER THE DATE ON WHICH NOTICE U/S. 143(2) DATED 27.09.2012 WAS ISSUED AND SERVED ON THE ASSESSEE AND SUBSEQUENTLY ANOTHER NOTICE U/S. 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE AND SERVED ON 03.09.2013. IN THIS BACKDROP WE SAFELY PRESUME THAT THE ASSESSEE AWAKENED ABOUT NON CLEARING OF CHEQUES AND PAYMENT WAS SHOWN TO BE MADE TO THE SELLER THEREAFTER IN CASH. 7. AS PER DECISION OF HONBLE SUPREME COURT IN THE CASE OF ROSHAN DI HATTI VS. CIT 107 ITR 938 (SC) ONUS OF PROVING SOURCE OF INVESTMENT IS ON THE ASSESSEE. 8. AT THIS JUNCTURE IT IS PERTINENT TO NOTE THAT THE SALE DEED WAS REGISTEREDON 04.02.2011 SHOWING PAYMENT THOROUGH CHEQUES AND OUT OF WHICH RS. 39,35,000/- CHEQUES WERE NOT PRESENTED FOR PAYMENT. WE ARE AGREEING WITH THE CONTENTION OF THE ASSESSEE THAT THIS ARRANGEMENT WAS MADE BETWEEN PURCHASER ASSESSEE AND SELLER TO FACILITATE THE EXECUTION OF SALE DEED PRIOR TO 31.03.2011 TO AVOID ANY ADVERSE SITUATION. HOWEVER, IT IS NOT BELIEVABLE EVEN BY A MAN OF ORDINARY PRUDENT THAT THE ENTIRE TRANSACTION OF TRANSFER OF PROPERTY IS COMPLETED ON 04.02.2011 BY EXECUTION OF SALE DEED AND THE SELLER WOULD WAIT FOR PAYMENT UP TO MORE THAN TWO YEARS AND WILL ACCEPT PAYMENT IN CASH IN FOUR INSTALLMENT DURING 20.05.2013 TO 10.02.2014 AND KEEPING ASIDE THE CHEQUES WHICH HAS BEEN RECORDED IN THE SALE DEED. THATS TOO WITHOUT CHARGING ANY INTEREST FOR BELATED PERIOD OF MORE THAN TWO YEARS. 5 ITA NO.3006/AHD/2015/SRT (A.Y: 2011-12) SHRISUMITRAMESHBHAIBODRA 9. IN THIS SITUATION, THE AO WAS RIGHT HOLDING THAT THE NATURE AND THE SOURCE OF THE SAID INVESTMENT HAS NOT BEEN EXPLAINED SATISFACTORILY WITH THE REQUISITE SUPPORTING EVIDENCE AND IN THESE CIRCUMSTANCES WE SAFELY PRESUME THAT THE ASSESSEE MADE PAYMENT PERTAINING TO THESE UNPAID CHEQUESTO THE SELLER AT THE TIME OF EXECUTION OF SALE DEED FROM THE UNEXPLAINED SOURCES AND HENCE ADDITION U/S. 69 OF THE ACT IS TO BE MADE. WE FURTHER NOTE THAT THIS EXPLANATION OF CASH PAYMENT DURING F.Y 2013-14 WAS NOT SUBMITTED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS WHICH WAS CONCLUDED ON 20.03.2014 WHEREAS AS PER ASSESSEE THE PAYMENT WAS MADE IN PRIOR PERIOD DURING 20.05.2013 TO 10.02.2014 WHICH AGAIN DESTROY THE STAND OF ASSESSEE BEING AFTER THOUGHT. THE LD. CIT(A) HAS IGNORED THESE VERY RELEVANT FACTS AND WHILE ALLOWING APPEAL OF ASSESSEE. THUS, WE HAVE NO HESITATION TO HOLD THAT THE FIRST APPELLATE AUTHORITY HAS GRANTED RELIEF TO THE ASSESSEE ON INCORRECT APPRECIATION OF FACTS AND BY IGNORING THE RELEVANT GLAIRING FACTS FAVOURING THE CONCLUSION DRAWN BY THE AO IN ACCORDANCE WITH THE PROVISION OF SECTION 69 OF THE ACT. HENCE, IMPUGNED ORDER IS SET ASIDE BY RESTORING THAT OF THE AO. ACCORDINGLY, GROUND NOS.1, 2, 3 OF THE REVENUE ARE ALLOWED AND THE ASSESSMENT ORDER IS RESTORED. 10. IN THE RESULT,APPEAL OF THE REVENUE IS ALLOWED. 6 ITA NO.3006/AHD/2015/SRT (A.Y: 2011-12) SHRISUMITRAMESHBHAIBODRA ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 19 TH MARCH, 2018. / SURAT ; DATED :19 TH MARCH, 2018 EDN / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A)-3, SURAT; 4 . , , / DR, ITAT, SURAT; 5 [ / GUARD FILE. / BY ORDER, // TRUE COPY // / ASSISTANT REGISTRAR , / ITAT, SURAT SD/ - SD/ - ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) / JUDICIAL MEMBER