Shri Nirod Kumar Sahoo, Dhenkanal V. ITO, Dhenkanal Ward, Dhenkanal

ITA 31/CTK/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6268 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 18-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: D PATI
• Keywords: Unexplained investment; Business income; Salary income; Application of stay; Cost of acquisition

Judgement Text

, . . , , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH , CUTTACK , BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER STAY PETITION NO. 06 / CTK /20 1 9 (ARISING OUT OF ITA NO. 31 /CTK/2019) ( / ASSESSMENT YEAR : 20 1 2 - 20 1 3 ) SHRI NIROD KUMAR SAHOO, MEENA BAZAR, DHENKANAL - 759001 VS. ITO, DHENKANAL WARD, DHENKANAL ./ ./ PAN/GIR NO. : AHUPS 4395 K ( / APPELLANT ) .. ( / RESPONDENT ) AND ITA NO.31/CTK/2019 ( / ASSESSMENT YEAR :2012 - 2013 ) SHRI NIROD KUMAR SAHOO, MEENA BAZAR, DHENKANAL - 759001 VS. ITO, DHENKANAL WARD, DHENKANAL ./ ./ PAN/GIR NO. : A HUPS 4395 K ( / APPELLANT ) .. ( / RE SPONDENT ) /AS SESSEE BY : SHRI D.PATI , ADVOCATE /REVENUE BY : SHRI SUBHENDU DUTTA , DR / DATE OF HEARING : 1 3 / 0 6 /201 9 / DATE OF PRONOUNCEMENT 14 / 0 6 /201 9 / O R D E R THE STA Y PETITION FILED BY THE ASSESSEE SEEKING STAY OF DEMAND OF RS. 10,21,260/ - , WAS LISTED TODAY I.E. ON 13.06.2019, HOWEVER, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE APPEAL OF THE ASSESSEE MAY KINDLY BE HEARD ON MERITS, TO WHICH LD.DR HAS NO OBJECT ION . ACCORDINGLY, THE STAY PETITION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND WITH THE SP NO. 06/CTK/2019 & ITA NO.31/CTK/2019 2 CONSENT OF THE PARTIES, I PROCEED TO DECIDE THE APPEAL OF THE ASSESSEE ON MERITS. 2. THE ASSESSEE IN ITS APPEAL HAS RAISED THE SOLE GROUND WITH REGARD TO ADDITIO N CONFIRMED BY THE CIT(A), WHICH WAS MADE BY THE AO U/S.69 OF THE ACT. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM REPAIRING WORK SHOP OF GOLD AND SILVER ORNAMENTS AND SALARY FROM M/S KANCHAN JEWELLERY. THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y.201 2 - 2013 ON 16.11.2012 DISCLOSING TOTAL INCOME AT RS.2,28,743/ - AFTER DEDUCTING RS.1,00,000/ - UNDER CHAPTER VIA . SUBSEQUENTLY, THE AO NOTICED THAT THE ASSESSEE HAS ESCAPED ASSESSMENT AND FRAMED THE ASSESSMENT U/S.143(3)/147 O F THE ACT MAKING ADDITION OF RS.23,80,014/ - U/S.69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT. IN APPEAL BEFORE PREFERRED BY THE ASSESSEE, THE CIT(A) HAS ALSO IN AGREED TO THE OBSERVATIONS OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. LD. AR SUBMITTED THAT AS PER REPLY OF THE ASSESSEE DATED 14.12.2016 THE ASSESSEE PURCHASED LAND AND BUILDING AGAINST TOTAL CONSIDERATION PAID RS.23,61,867/ - INCLUDING COST OF LAND AND BUILDING AT RS.22 ,07,142/ - , STAMP DUTY OF RS.1,10,360/ - AND REGISTRATION FEES OF RS.44,365/ - OUT OF WHICH THE ASSESSEE PAID RS.6 LAKHS TO THE SELLER AT THE TIME OF ON OR BEFORE EXECUTION OF SALE DEED. LD.AR VEHEMENTLY POINTED OUT THAT OUT OF RS.6 LAKHS PAID TO THE SELLER, THE ASSESSEE PAID SP NO. 06/CTK/2019 & ITA NO.31/CTK/2019 3 RS.3,50,000/ - FROM BUSINESS INCOME DURING F.Y.2011 - 2012 PERTAINING TO A.Y.2012 - 2013 AND REMAINING RS.2,50,000/ - PAID OUT OF SAVINGS AND RESERVE AMOUNTS PROCURED BY THE ASSESSEE AND HIS FAMILY FOR PURCHASE OF HOUSE. 5. LD. AR VEHEMENTLY P OINTED OUT THAT THE ASSESSEE HAS PAID SALE CONSIDERATION OF RS.22,07,142/ - ALSO GETS SUPPORT FROM DECLARATION SUBMITTED BY THE ASSESSEE COPY AVAILABLE AT PAGE 6 OF THE ASSESSEES PAPER BOOK AND TOTAL COST OF ACQUISITION OF SAID LAND AND BUILDING COMES TO R S.23,61,867/ - , WHEREAS THE AUTHORITIES BELOW HAVE WRONGLY TAKEN TOTAL SALE CONSIDERATION AS RS.27,30,014/ - . LD.AR SUBMITTED THAT THE ADDITION BASED ON INCORRECT FACTS AND FIGURE MAY KINDLY BE DELETED. 6. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT ADDITIO N HAS BEEN MADE ON THE BASIS OF STATEMENT OF ASSESSEE RECORDED ON 05.03.2013 DURING THE COURSE OF SURVEY U/S.133A OF THE ACT, 1961 (FOR SHORT THE ACT) , WHEREIN REPLYING TO QUESTION NO.8 THE ASSESSEE SUBMITTED THAT HE HAS PAID RS.3,50,000/ - FROM HIS BUSIN ESS INCOME AND THERE IS NO MENTION OF FURTHER PAYMENT OF RS.2,50,000/ - OUT OF SAVINGS, THEREFORE, THE CONTENTION OF ASSESSEE MAY KINDLY BE DISMISSED. HOWEVER, HE COULD NOT CONTROVERT THE FIGURE AND FACT THAT AS PER REPLY OF ASSESSEE DATED 14.12.2016 THE TO TAL SALE CONSIDERATION, INCLUDING STAMP DUTY AND REGISTRATION WAS RS.23,61,867/ - AND, THUS, THE SALE CONSIDERATION TAKEN BY THE AUTHORITIES BELOW AS RS.27,30,014/ - IS INCORRECT. SP NO. 06/CTK/2019 & ITA NO.31/CTK/2019 4 7. PLACING REJOINDER TO THE ABOVE, LD.AR SUBMITTED THAT THE FINAL STATEMENT O F THE ASSESSEE WAS RECORDED IN A HASTY MANNER WITHOUT ALLOWING OPPORTUNITY TO GO THROUGH THE PARTNERS PAPERS AND OTHER FACTS RELEVANT TO THE PURCHASE OF LAND AND BUILDING, THEREFORE, PAYMENT OF RS.2,50,000/ - OUT OF SAVINGS AND OTHER FUNDS COULD NOT BE STA TED BUT THE ASSESSEE IS ATTAINING AT THE AGE OF 50 YEARS AND DOING BUSINESS OF JEWELLERY MAKING AS WELL AS SALARY INCOME. THEREFORE, DURING THIS LONG PERIOD OF EARNING OF RS.2,50,000/ - AS SAVINGS IS VERY MEAGRE WHICH CANNOT BE DISCARDED OR DISPUTED, THEREF ORE, PAYMENT OF RS.6 LAKHS MAY KINDLY BE ACCEPTED AGAINST PURCHASE OF LAND AND BUILDING. 8. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBMISSIONS, FIRST OF ALL, I AM OF THE VIEW THAT THE TOTAL SALE CONSIDERATION INCLUDING STAMP DUTY AND REGISTRATION FEE S IS RS.23,61,867/ - WHICH IS DISCERNIBLE FROM THE COPY OF THE SALE DEED DATED 27.03.2012. SO FAR AS PAYMENT AT THE TIME OF ON OR BEFORE EXECUTION OF SALE DEED IS CONCERNED, IN THE STATEMENT RECORDED DURING THE SURVEY THE ASSESSEE STATED TOO HAVE MADE PAYME NT OF RS.3,50,000/ - TO THE SELLER AND SINCE THE ASSESSEE EARNS INCOME FROM SALARY AS WELL AS BUSINESS OF JEWELLERY MAKING DISCLOSING TOTAL INCOME OF RS.2,28,743/ - FOR A.Y.2012 - 2013 AND HAS ATTAINED THE AGE OF APPROXIMATELY 50 YEARS OF AGE, THEREFORE, PAYME NT OF RS.2,50,000/ - OUT OF SAVINGS AND OTHER FUNDS CANNOT BE DISCARDED AND DISMISSED AT THE THRESHOLD AND, THUS, THE SAME IS ACCEPTED. FINALLY, I HOLD THAT THE ASSESSEE HAS PAID RS.6,00,000/ - ON OR BEFORE EXECUTION OF SALE DEED ON SP NO. 06/CTK/2019 & ITA NO.31/CTK/2019 5 27.03.2012 AND THE TOTAL COST OF LAND AND BUILDING PURCHASED WAS RS.23,61,867/ - . THEREFORE, AFTER REDUCTION OF RS.6 LAKHS, THERE IS NO EXPLANATION FROM THE ASSESSEE REGARDING REMAINING INVESTMENT OF RS.17,61,867/ - AND WHEN THERE IS NO SATISFACTORY EXPLANATION REGARDING SOURCE OF SAID INVESTMENT THEN THE SAME DESERVES TO BE TREATED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE U/S.69 OF THE ACT AND, THUS, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) IS RESTRICTED TO RS.17,61,867/ - OUT OF THE TOTAL ADDITION MADE BY THE AO AT RS. 23,80,014/ - . ACCORDINGLY, THE SOLE GROUND OF ASSESSEE IS PARTLY ALLOWED AND THE AO IS DIRECTED TO RECALCULATE THE ADDITION AS PER DIRECTION GIVEN HEREINABOVE. THUS, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. SINCE WE HAVE HEARD AND DECIDED THE APPEAL OF THE ASSESSEE IN THE EARLIER PART OF THIS ORDER, THEREFORE, THE STAY PETITION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 10 . IN THE RESULT, STAY PETITION OF THE ASSESSEE IS DISMISSED AND APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. O RDER PRONOUNCED IN THE OPEN COURT ON 14 / 0 6 / 201 9 . S D/ - ( CHANDRA MOHAN GARG ) / JUDICIAL MEMBER CUTTACK ; DATED 14 / 0 6 /201 9 . . / PKM , S R.P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - . SHRI NIROD KUMAR SAHOO, MEENA BAZAR, DHENKANAL - 759001 2. / THE RESPONDENT - ITO, DHENKANAL WARD, DHENKANAL 3. ( ) / THE CIT(A), SP NO. 06/CTK/2019 & ITA NO.31/CTK/2019 6 / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//