DCIT-WARDHA-CIRCLE, Wardha V. LATE SHRI ANWAR LAMBA, THROUGH L. R. SHRI SHAHNAWAZ ANWAR LAMBA, Wardha

ITA 307/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1599 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALLIK
• Assessee Lawyers: S C THAKKAR
• Keywords: Unexplained investment; Cost of acquisition
• Section: 133A; 147; 131; 69; 148; 144

Judgement Text

1 I TA NO. 3 07 /NA G/2014 IN TH E INCOME TAX APPELLATE TRIBUNAL: NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I .T.A. NO. 3 07 /NAG/2014 ASSESSMENT YEAR: 2009 - 10 THE DY. COMMISSIONER OF INCOME TAX, WARDHA CIRCLE, WARDH A 442001 VS LATE SHRI ANWAR KADAR LAMBA, THROUGH : LEGAL HEIR - SHRI SHAHNAWAZ ANWAR LAMBA, PATEL CHOWK, WARDHA 442001 PAN:AALPL3857D (APPELLANT) (RESPONDENT) APPELLANT BY SMT. SUMAN MALLIK, (JCIT) RESPONDENT BY SHRI S. C. THAKKAR, ADVOCATE DATE OF HEARING: 17 - 11 - 2015 DATE OF PRONOUNCEMENT: 24 - 11 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE BY THE REVENUE ARISING F ROM THE ORDER OF THE LEARNED CIT (A) - I, NAGPUR DATED 26 - 03 - 2014 FOR ASSESSMENT YEAR 2009 - 10. 2. GROUND NO.1 RAISED BY THE REVENUE IS REPRODUCED HEREIN BELOW: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) - I, NAGPUR HAS ERRED IN DELETING THE ADDITION OF RS. 4,55,022 / - IN RESPECT OF SHORT TERM CAPITAL GAIN . 3 . THE F ACTS IN BRIEF , AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 144 READ WITH SECTION 147 OF THE IT ACT DATED 29 - 12 - 2011 WERE THAT THE ASSESSEE IS IN THE BUSINESS OF GRAIN BROKER AND WAS ALSO DERIVING INCOME FROM OTHER SOURCES . SINCE, NO RETU RN WAS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10; PENALTY PROCEEDINGS U/S 271 F OF THE IT ACT WAS INITIATED. A 2 I TA NO. 3 07 /NA G/2014 NOTICE U/S 148 OF THE IT ACT WAS ISSUED AFTER RECORDING OF REASONS AND IN RESPONSE THERETO THE ASSESSEE FILED RETURN OF INCOME ON 29 - 12 - 2 011. THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY. ACCORDINGLY, NOTICES U/S 142(2) AND 1423(1) OF THE IT ACT WERE ISSUED AND SERVED ON THE ASSESSEE REPEATEDLY. ULTIMATELY, THE LEARNED COUNSEL OF THE ASSESSEE APPEARED BEFORE THE AO AND EXPLAINED THE CASE BEFORE HIM BY FILING VARIOUS DETAILS WHICH ARE PLACED ON RECORD. THESE DOCUMENTS WERE TEST - CHECKED WITH THE HELP OF BOOKS IMPOUNDED DURING THE COURSE OF SURVEY U/S. 133A OF THE IT ACT CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF SURVEY, THE ASSESSEE HAS OFFERED ADDITIONAL INCOME OF RS.5,00,000/ - FOR THE A. Y. 2009 - 10 AND PAID TAXES OF RS.2,50,000/ - THEREON. IN RESPECT OF THE ABOVE GROUND, THE OBSERVATION OF THE AO WAS AS UNDER: - I. ADDITION ON ACC OUNT OF SHORT TERM CAPITAL GAIN: 3. 0 ON PERUSAL OF STATEMENT OF THE DECEASED ASSESSEE RECORDED U/S 131 OF THE I. T. ACT, 196, ON 26.03.2009, IT IS NOTICED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.5,93,950 [RS.5,01,725/ - (A - 39, PAGE NO.41) + RS.92,225/ - ] AS A SALE CONSIDERATI ON IN C ASH FOR TWO PLOTS AT SALOO KATE DURING THE YEAR AND THAT PLOT WAS PURCHASED IN F. Y. 2006 - 07 FOR RS.1,38,928/ - (A - 39, PAGE NO.41) WHICH IS THE COST OF ACQUISITION AS PER THE PROVISION OF THE INCOME TAX ACT, 1961. ON VERIFICATION OF THE RECORDS, IT IS SEEN THAT THE ASSESSEE HAS NOT OFFERED CAPITAL GAIN DURING THE YEAR; THEREFORE, THE AR WAS ASKED AS TO WHY SHOULD NOT BE ADDED AS CAPITAL GAIN OF U/S 45 OF THE I. T. ACT, 1961 FOR A. Y. 2009 - 10. THE AR APPEARED AND DISCUSSED THE CASE AND AGREED FOR AD DITION OF SHORT TERM CAPITAL GAIN OF RS.4,55,022/ - TO THE TOTAL INCOME VIDE ORDER SHEET NOTING DTD. 19.11.2011. THEREFORE, I ADD AN ADDITIONAL INCOME OF RS.4,55,022/ - AS A SHORT TERM CAPITAL GAIN AS PER THE PROVISIONS OF THE ACT TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S. 271 (1) (C) OF THE I. T. ACT, 1961 READ WITH EXPLANATION 1 INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT. (RS.4,55,022). 4 . WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY, THE LEARNED CIT (A) HAS GRANTED RELIEF BY OBSERVING AS FOLLOWS: - 3 I TA NO. 3 07 /NA G/2014 5 .2 ON CAREFUL CONSIDERATION OF THE FACTS, IT IS SEEN THAT TOTAL CONSIDERATION OF RS.1,38,928/ - , INCLUDED THE STAMP DUTY AND REGISTRATION CHARGES. THE ASSESSEE ENTERED INTO AN AGREE MENT DATED 01.11.2008 WITH MR. NARAYAN PARMANAND ADVANI FOR THE SALE OF SAID PLOT BUT THE TRANSACTION COULD NOT BE MATERIALISED. SUBSEQUENTLY, THE SAID PLOT WAS SOLD TO SMT. NEETADEVI AGARWAL FOR RS.2,42,750/ - VIDE REGISTERED SALE DEED DATED 02.03.2009. IT IS THUS SEEN THAT THE PLOT WAS SOLD ON 02.03.2009 FOR RS.2,42,750/ - ON WHICH CAPITAL GAIN CHARGEABLE TO TAX COMES TO RS.1,03,822/ - AS AGAINST RS.4,55,022/ - WORKED OUT BY THE AO. THE APPELLANT HAS PROVIDED THE WORKING OF SUCH CAPITAL GAINS CHARGEABLE TO TA X. THEREFORE, THE CONTENTIONS RAISED BY THE AR ARE ACCEPTABLE AND THE ADDITION IS RESTRICTED TO RS.1,03,822/ - AND BALANCE ADDITION OF RS.3,51,200/ - IS DIRECTED TO BE DELETED . 5 . WE HAVE HEA RD BOTH THE SIDES. ON THIS ISSUE, WE HAVE NOTED THAT THE AO HAS NO T TAKEN INTO CONSIDER ATION THE FACT THAT THE AGREEMENT ENTERED INTO BY THE ASSESSEE ON 01.11.2008 WITH MR. NARAYAN PARMANAND ADVANI FOR SALE OF THE PLOT OF LAND IN QUESTION DID NOT MATERIALISE AND SUBSEQUENTLY, THE ASSESSEE SOLD THE SAID PLOT TO ONE SMT. N EETADEVI AGARWAL FOR A CONSIDERATION OF RS.2,42,750/ - VIDE REGISTERED SALE DEED DATED 02 - 03 - 2009 ON WHICH CAPITAL GAIN CHARGEABLE TO TAX COMES TO RS.1,03,822/ - ONLY. THE AO HAS MADE THE ADDITION JUST BECAUSE OF THE FACT THAT THE LEARNED COUNSEL OF THE ASSE SSEE AGREED TO T HE SAME WITHOUT MENTIONING ANY I N SCRIMINATING MATERIALS FOUND AT THE TIME O F SURVEY IN RESPECT OF THE PLOT OF LAND IN QUESTION. ON THE OTHER HAND, THE LEARNED CIT (A) HAS GIVEN A FINDING THAT ALL THE RELEVANT DETAILS IN RESPECT OF THE PLOT OF LAND IN QUESTION HAVE BEEN FURNISHED BY THE ASSESSEE INCLUDING THE SALE DEED DATED 02 - 03 - 2009 . IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT (A). ACCORDINGLY, WE HEREBY CONFIRM HIS FINDINGS. AS A RESULT, THIS GROUND OF A PPEAL OF THE REVENUE IS DISMISSED . 6. GROUND NO.2 OF THE APPEAL READS AS FOLLOWS: - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) - I, NAGPUR HAS ERRED IN DELETING THE ADDITION OF RS.1 0,4 1 ,6 5 3 / - AS UNEXPLAINED INVESTMENT IN PROPERTIES U/S. 69 OF THE I. T. ACT, 1961 AS THE INVESTMENT IS MADE BY THE ASSESSEE IN THE NAME OF OTHERS . 4 I TA NO. 3 07 /NA G/2014 7 . IN RESPECT OF THE ABOVE GROUND, THE AO HAS MADE THE ADDITION IN THE FOLLOWING MANNER: - II . ADDITION ON A CCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTIES IN NAME OF THE ASSESSEE AND FAMILY MEMBERS 4. 0 IT IS ALSO FROM THE STATEMENT THAT ASSESSEE HAS INVESTED AMOUNT OF RS.1,37,160/ - AS ADVANCE AGAINST AT WIAGAON IN THE NAME OF SMT. FEMIDA ANWAR K. LAMBA DURING TH E YEAR. IT IS ALSO NOTICED THAT AMOUNT OF RS.1,53,293, HAS BEEN REFLECTED IN A - 39 PAGE NO.41 AGAINST THE PLOT PURCHASE IN INZAPUR WHICH WAS ALSO ADDED IN THE HAND OF THIS ASSESSEE DURING THE YEAR. IT IS ALSO NOTICED FROM STATEMENT THAT ASSESSEE HAS INVES TED AMOUNT OF RS.9,61,200/ - AS ADVANCE AGAINST AT WIAGON IN THE NAME OF SMT. FEMIDA ANWAR K. LAMBA DURING THE PRECEDING YEAR BUT THE ASSESSEE HAS SHOWN WITHDRAWAL FROM BANK OF FE MIDA OF RS,2,10,000/ - , THE DIFFERENCE OF RS.7,51,200/ - WHICH IS TO BE ADDED AS UNEXPLAINED INVESTMENT IN THE NAME OF THE ASSESSEE. THE COUNSEL WAS ASKED TO EXPLAIN THE SOURCE OF INCOME BUT HE FAILED TO EXPLAIN THE ENTRIES. IN INTEREST OF REVENUE, AMOUNT OF UNEXPLAINED INVESTMENT FOR PRECEDING YEAR IS BEING ADDED IN CURRENT YEAR. I N ALL QUERIES, THE AR WAS ASKED AS TO WHY SHOULD NOT BE ADDED AS UNEXPLAINED INVESTMENT IN ABSENCE OF ANY PROOF. THE AR OF THE ASSESSEE FAILED TO FURNISH ANY PROOF IN RESPECT OF. WHEN THE COUNSEL WAS CONFRONTED AND HE AGREED ON SAID ADDITION TO THE TOTAL I NCOME. THEREFORE, I, ADD AN AMOUNT OF RS.10,41,653/ - TO THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISION OF THE I. T. ACT, 1961. PENALTY PROCEEDINGS U/S. 271 (1) (C) OF THE I. T. ACT, 1961 READ WITH EXPLANATION 1 INITIATED SEPARATELY FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME AND CONCEALMENT. (RS.10,41,653/ - ) 8 . THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE FIRS T APPELLATE AUTHORITY. T HE LEARNED CIT (A) HAS GRANTED RELIEF AS UNDER: - 6.2 IT IS NOT DISPUTED THAT THE ASSESSEE HAS VOLUNTARILY OFF ERED RS.7,50,000/ - FOR TAXATION, RS.12,68,927/ - . IT IS ALSO UNDISPUTED THAT AO HAS ACCEPTED THE RETURNED INCOME OF RS.12,68,927/ - OFFERED BY THE APPELLANT WHICH WAS INCLUSIVE OF RS.7,50,000/ - . THEREFORE, FURTHER ADDITION OF RS.10,41,653/ - OVER AND ABOVE TH E RETURNED INCOME IS NOT JUSTIFIED. THE CONTENTION OF THE AR THAT THE SUM OF RS.1,37,160/ - AND RS.7,51,200/ - ARE THE INVESTMENTS MADE BY SMT. FEMIDA ANWAR AND NOT BY THE ASSESSEE IS ALSO FOUND CORRECT. ON PERUSAL OF THE ASSESSMENT ORDER, IT IS NOTICED THAT REASONS ASSIGNED BY THE AO FOR MAKING THE ADDITIONS ON ACCOUNT OF INVESTMENTS ARE QUITE VAGUE AND FAR BEYOND SATISFACTION. THE AO HAS MERELY STATED THAT THE COUNSEL OF THE ASSESSEE HAS AGREED TO THE ADDITION WITHOUT BRINGING OUT THE MATERIAL FACTS ON RECO RD. THE 5 I TA NO. 3 07 /NA G/2014 ADDITIONS MADE BY THE AO NOT ONLY AMOUNTS TO DOUBLE ADDITION BUT THE SAME ARE MADE ON UNJUSTIFIABLE GROUNDS AND HENCE DIRECTED TO BE DELETED . 9 . HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES AND ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE ARE OF THE VIEW THAT THE LEARNED CIT (A) HAS GIVEN A CLEAR FINDING THAT THERE WAS NO COGENT REASON FOR THE AO TO MAKE THE ADDITION ONLY ON THE BASIS OF ADMISSION BY THE ASSESSEE , WITHOUT CONSIDERING THE FACT THAT THE AMOUNT OF RS.1,37,160/ - AND RS.7,51, 200/ - WERE THE INVESTMENTS MADE BY SMT. FEMIDA ANWAR AND NOT BY THE ASSESSEE. ON THE OTHER HAND, ADMITTEDLY, THE AO HAS ACCEPTED THE RETURNED INCOME OF THE ASSESSEE BEING RS. 12,68,927/ - WHICH IS INCLUSIVE OF THE AMOUNT OF RS.7,50,000/ - INVESTED BY SMT . FEMIDA ANWAR. AS A RESULT, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT (A). THE SAME ARE HEREBY CONFIRMED AND THE GROUND OF REVENUES APPEAL IS REJECTED. 10 . IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF NOVEMBER, 2015. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 24 TH NOV., 2015. LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. 6 I TA NO. 3 07 /NA G/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 7 . 11.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 19 .11.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. DATE OF PRONOUNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK