The ITO-2(3), Indore V. Shri Ram Singh Patel, Indore

ITA 304/IND/2013

• Counselvise Citation: 30422714 RSA 2013
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHIM KUNWAR
• Assessee Lawyers: NITIN PARIKH
• Keywords: Capital asset; Additional evidence
• Section: 143(3); 54B; 68; 148

Judgement Text

PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ANZPP 6303 P I.T.A.NO. 304/IND/2013 A.Y. : 2008-09 THE INCOME TAX OFFICER WARD 2 (3) INDORE VS. SHRI RAM SINGH PATEL HOUSE NO.8/1, BICHOLI MARDANA, INDORE APPELLANT RESPONDENT APPELLANT BY : SHRI BHIM KUNWAR, SR. DR RESPONDENT BY : SHRI NITIN PARIKH, CA DATE OF HEARING : 28 .10.2013 DATE OF PRONOUNCEMENT : 19 . 11 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A), DATED 29-01-2013 FOR THE ASSE SSMENT YEAR 2008-09, IN THE MATTER OF ORDER PASSED U/S 14 3(3) OF THE INCOME-TAX ACT, 1961. RAM SINGH PATEL. A.Y. 2008-09 2 PAGE 2 OF 8 2.1 THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO D ELETING THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 54B OF THE IN COME TAX ACT, 1961, THEREBY DELETING THE ADDITION OF RS. 54, 89,332/-. 2.2 THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECOR DS PERUSED. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT THE ASSESSEE SOLD THE AGRICULTURAL LAND FOR A CONSIDERATION OF RS. 1.10 CRORES. THE AO FURTHER OB SERVED THAT THE ASSESSEE HAD NOT FURNISHED ANY PROOF OR SUPPORT ING EVIDENCE FOR HIS CLAIM OF EXEMPTION U/S 54B OF THE ACT EVEN AFTER REPEATED OPPORTUNITIES. ACCORDINGLY, THE AO M ADE AN ADDITION OF RS. 1,07,47,200/- BY DISALLOWING THE SA ME U/S 54B OF THE ACT. AN ADDITION OF RS. 54,89,232/- WAS ALSO MADE U/S 68 OF THE ACT. 2.3 BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED T HE ADDITION MADE BY THE AO BY ALLOWING THE ASSESSEES CLAIM AFTER HAVING FOLLOWING OBSERVATIONS. 4.3 SUBSEQUENT TO THAT THE A/R OF THE APPELLANT ALSO SUBMITTED VIDE HIS LETTER DATED 29- 01-2013 THAT THE ACIT-2(1) HAS ASSESSED THE LONG TERM CAPITAL GAIN IN THE HANDS OF THE APPELLANTS S ON SHRI JEEVAN PATEL CONSEQUENT TO NOTICE U/S 148 OF THE ACT FOR THE ASSESSMENT YEAR 2007-08 ON SALE OF RAM SINGH PATEL. A.Y. 2008-09 3 PAGE 3 OF 8 LAND AT BICHOLI MARDANA, WHICH WAS MISTAKENLY OFFERED BY THE APPELLANT IN HIS HAND. AS THE ACIT 2(1), INDORE HAS ASSESSED THE LONG TERM CAPITAL GAI N IN THE HANDS OF SHRI JEEVAN PATEL AS PER ORDER U/S 143(3) R.W.S. 148 OF THE ACT VIDE ORDER DATED 26-12 - 2012. HENCE IN THIS PERSPECTIVE OF THE APPELLANTS SUBMISSION, THE TAXING OF LONG TERM CAPITAL GAIN IN THE HANDS OF THE APPELLANT WILL AMOUNTS TO DOUBLE TAXATION OF THE SAME INCOME AS A RESULT OF TRANSFER OF LAND. HENCE, IN MY CONSIDERED VIEW THE SAME CANNOT BE ALLOWED TO BE ASSESSED IN THE HANDS OF TH E APPELLANT, AS IT WILL BE COMPLETELY UNJUSTIFIED. IN THIS BACKGROUND OF APPELLANTS SUBMISSIONS AND FACTS OF THE CASE, I FIND MERITS IN THE ARGUMENT OF THE APPELLANT. IT IS SEEN THAT SALE OF LAND, WHICH IS I N QUESTION RELATES TO APPELLANTS SON MR. JEEVAN PATE L. IT IS DUE TO INADVERTENT MISTAKE THE INCOME OF THE ABOVE MENTIONED PROPERTY WAS OFFERED IN THE HANDS OF THE APPELLANT. THE INCOME AROSE ON ACCOUNT OF SALE OF LAND HAS BEEN RECEIVED IN THE BANK ACCOUNT OF THE APPELLANTS SON I.E. SHRI JEEVAN PATEL. FURT HER, IT IS CLEARLY EVIDENT FROM THE ASSESSMENT ORDER PASSED IN THE CASE OF MR. JEEVAN PATEL, SON OF THE APPELLANT THAT THE LAND IN QUESTION RELATES TO MR. JEEVAN PAT4EL AND NOT IN THE NAME OF THE APPELLANT. HENCE, THE INCOME ARISES DUE TO SALE OF IS THE INCOME OF MR. JEEVAN PATEL, WHICH IS ALSO TAXED UNDER THE IT ACT, 1961. IN VIEW OF THE SAME, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE AOS ACTION WAS COMPLETELY UNJUSTIFIED AND INCORRECT, AS THE SAME WILL AMOUNTS TO DOUBLE TAXATION. THUS, THE APPELLANTS THIS GROUND OF APPE AL IS ALLOWED. 2.4 WITH REGARD TO THE ADDITION MADE U/S 68 OF THE ACT, THE OBSERVATION OF THE AO WAS AS UNDER:- RAM SINGH PATEL. A.Y. 2008-09 4 PAGE 4 OF 8 ON EXAMINATION OF STATEMENT OF AFFAIRS, IT IS FOUND THAT THE ASSESSEE SHOWN ADVANCES FOR LANDS AT RS. 16,00,000/- 15,00,000/- AND 23,89,232/- DURING THE RELEVANT PERIOD. VIDE THIS OFFICE LETTER DATED 20-07-2010 AND 08-11-2010 AND NOTE SHEET 01-10-2010 AND 25-10-2010 THE ASSESSEE SPECIALLY ASKED FOR SUBMITTING THE PROOF/ DOCUMENTS CONFIRMATION, HOWEVER, EVEN GIVEN HIM REPEATED OPPORTUNITIES HE DID NOT SUBMIT ANY DETAILS IN THIS REGARD. HENCE, IT IS ESTABLISHED TH AT THE ADVANCE OF RS. 54,89,232/- BOGUS AS THE ASSESSEE DID NOT SUBMIT ANY PROOF/ DOCUMENT CONFIRMATION IN THIS REGARD. THEREFORE, THE SAME IS HEREBY ADDED TO THE TOTASL INCOME OF THE ASSESSEE AND PENALTY PROCEEDINGS U/S 271(1) ALSO INITIATED ON THIS ISSUE AS THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME AND ALSO FURNISHED INACCURATE PARTICULARS. 2.5 BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED T HE SAME AFTER MAKING THE FOLLOWING OBSERVATION. 5.3 I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE APPELLLANTS SUBMISSION. HAVING CONSIDERED BOTH, I FIND MERITS IN THE ARGUMENTS OF THE APPELLANT. ON PERUSAL OF THE BALANCE SHEET FILED BY THE APPELLANT OF EARLIER YEARS I.E. 31-03- 07, IT IS EVIDENT THAT THE ADVANCES OF RS. 15,30,000/- AND RS. 23,89,232/- PERTAIN TO EARLIER YEARS. THE SAME WAS NOT TAKEN AS ADVANCE BY THE APPELLANT IN THE CURRENT ACCOUNTING YEAR, RELEVANT TO ASSESSMENT YEAR 2008-09. HENCE, THE SAME CANNOT BE HELD TO BE TAXED IN ASSESSMENT YEAR 2008-09. ACCORDINGLY, THE ADDITION SO MADE BY AO FOR BOTH AMOUNT I.E. RS. 15,30,000/- AND RS. 23,89,232/- U/S 68 OF THE ACT TO THIS EXTENT IS NOT RAM SINGH PATEL. A.Y. 2008-09 5 PAGE 5 OF 8 JUSTIFIED AND CORRECT. FURTHER, I FIND THAT THE APPELLANT DURING THE YEAR UNDER CONSIDERATION HAD RECEIVED A SUM OF RS. 16,00,000/- AS ADVANCE AGAINST SALE OF LAND, WHICH IS ALSO DULY REFLECTED IN THE BANK STATEMENT OF THE APPELLANT. IN THIS REGARD, THE APPELLANT ALSO FILED A COPY OF SALE DEE D AS PER ANNEXURE E IN SUPPORT OF ITS CONTENTION,. HENCE, THE ADDITION ON THIS ACCOUNT IS NOT SUSTAINABLE U/S 68 OF THE ACT, AS THE SOURCE OF THE SUM OF RS. 16,00,000/- IS COMPLETELY EXPLAINED. THE APPELLANT HAS FILED THE COPY OF SALE AGREEMENT AND BANK PASS BOOK OF APPELLANT, WHOM THE CHEQUE NO. MENTIONED IN SALE AGREEMENT IS MATCHING WITH THE CORRESPONDING ENTRY OF RS. 16,00,000/- WITH SAME CHEQUE WITH SALE AGREEMENT DETAILS. THUS, TAKING NOTE OF ALL THE FACTUAL POSITION OF THE CASE, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING THE AFORESAID ADDITION TO THE INCOME OF THE APPELLANT. ACCORDINGLY, THE ADDITION SO MADE BY THE AO IS DELETED. THUS, THIS GROUND OF APPEAL IS ALLOWED. 2.6 AGAINST THE ABOVE ORDER, THE LD. CIT(A), THE RE VENUE IS IN FURTHER APPEAL BEFORE US. 2.7 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FO UND FROM RECORD THAT CAPITAL GAINS AROSE ON SALE OF AGRICULT URAL LAND AT BICHOLI MARDANA WAS ASSESSED IN THE HANDS OF THE AS SESSEES SON IN THE ASSESSMENT YEAR 2007-08. THE SAME CAPITA L GAIN WAS INADVERTENTLY OFFERED BY THE ASSESSEE IN HIS HA ND DURING RAM SINGH PATEL. A.Y. 2008-09 6 PAGE 6 OF 8 THE ASSESSMENT YEAR 2008-09. THE LD. CIT(A) DELETED THE SAME BY OBSERVING THAT TAXING THE SAME CAPITAL GAIN IN T HE HANDS OF THE ASSESSEE WILL AMOUNT TO DOUBLE ADDITION. THE LD . CIT(A) DELETED THE SAME AFTER RECODING HIS FINDING AT PAR A 4.3 OF HIS ORDER AS REPRODUCED ABOVE. THE FINDING SO RECORDED BY THE LD. CIT(A) HAS NOT BEEN CONTROVERTED BY THE LD. DR, BY BRINGING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH HAS BEEN ASSESSED IN THE HANDS OF ASSESSEE'S SON IN THE ASSESSMENT YEAR 2007-08 ON THE SAME PLEA THAT LAND SO SOLD ACTUALLY PERTAINED TO SON. 2.8 WITH REGARD TO THE ADDITION MADE BY THE AO AMO UNTING TO RS. 54,89,232/-, WE FOUND THAT THE AO GAVE SO M ANY OPPORTUNITIES TO THE ASSESSEE TO SUBSTANTIATE THE CREDITS IN RESPECT OF THE AMOUNTS SO RECEIVED BUT THE ASSESSEE DID NOT FURNISH ANY EVIDENCE. THEREFORE, THE AO TREATED THE SAME AS BOGUS AND ADDED THE AMOUNT U/S 68 OF THE ACT. THE L D. CIT(A) HAS DELETED THE ADVANCES OF RS. 15.30 LACS AND RS. RAM SINGH PATEL. A.Y. 2008-09 7 PAGE 7 OF 8 23,89,232/- BY OBSERVING THAT THE ASSESSEE HAS FILE D THE BALANCE SHEET FOR THE YEAR ENDING ON 31-03-2007, WH EREIN THESE ADVANCES WERE REFLECTED. THE LD. CIT(A) ALSO OBSERVED THAT THESE AMOUNTS WERE NOT TAKEN AS ADVANCE DURING THE YEAR. THEREFORE, HE DELETED THE ADDITION. SIMILARLY , THE ADDITION OF RS. 16.00 LACS WERE DELETED BY THE LD. CIT(A) BY OBSERVING THAT THE ASSESSEE HAS FILED SALE AGREEMENT INDICATI NG RECEIPT OF RS. 16.00 LACS AS ADVANCE. BOTH THESE DOCUMENTS I.E . BALANCE SHEET AND THE SALE AGREEMENT, BY RELYING ON WHICH T HE LD. CIT(A) HAS DELETED THE ADDITIONS, WERE NOT PRODUCED BEFORE THE AO. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR D ECIDING IT AFRESH AFTER CONSIDERING THE DOCUMENTS FILED BEFORE THE LD. CIT(A). AS PER PROVISIONS OF RULE 46A, THE LD. CIT( A) IS REQUIRED TO GIVE OPPORTUNITY TO THE AO BEFORE RELYING ON ANY ADDITIONAL EVIDENCE FILED BEFORE HIM. IT IS CLEAR FROM THE ORD ER OF THE AO THAT NOTHING WAS FILED BEFORE HIM. WE FOUND THAT TH E LD. CIT(A) HAS NOT CALLED FOR ANY REMAND REPORT FROM THE AO. T HEREFORE, RAM SINGH PATEL. A.Y. 2008-09 8 PAGE 8 OF 8 WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO TO DECIDE IT AFRESH. 3.0 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS A LLOWED IN PART THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 19 TH NOVEMBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH NOVEMBER, 2013. RNM *