SUSHIL SURESH RAUT, RAIGAD V. ITO WD 3 PANVEL, NAVI MUMBAI

ITA 3101/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3903 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 28-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Keywords: Business expenditure; Opportunity of being heard; Additional evidence; Corroborative evidences; Assessment record
• Section: 143(3); 2(14); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3101 /MUM/201 7 ASSESSMENT YEAR: 2012 - 13 MR. SUSHIL SURESH RAUT FLAT NO. 356, SHIV KRUPA NIWAS KALAMBUSRE, PLOT CHIRNER, TAL - URAN, RAIGAD - 410206 VS. ITO WARD 3, PANVEL RANGE TRIFED TOWER, OPP. KHANDA COLONY, NAVI MUMBAI - 410206. PAN NO. AIGPR1488M APPELLANT RESPONDENT ASSESSEE BY : MR. PRAKASH PANDIT , AR REVENUE BY : MR. CHAUDHARY ARUN KUMAR SINGH , DR DATE OF HEARING : 28/11 /2018 DATE OF PRONOUNCEMENT: 31/01/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2012 - 13. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 1, AURANGABAD [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE 1 ST & 2 ND GROUND OF APPEAL ADDRESS A COMMON ISSUE AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW CIT(A) ERRED IN CONFIRMING THE AOS ACTION IN TREATING THE LAND SITUATED AT VILLAGE JEETE, MR. SUSHIL SURESH ITA NO. 3101/MUM/2017 2 TALUKA PEN, DIST. RAIGAD AS A NON - AGRICULTURAL LAND WITHIN THE MEANING OF SEC. 2(14) AND THEREBY ERRED IN CONFIRMING ADDITION A SUM OF RS.36,74,738/ - AS A LONG TERM CAPITAL GAIN TO THE TOTAL INCOME DISCLOSED BY THE ASSESSEE. 2. REASONS GIVEN BY CIT(A) FOR CONFIRMING AOS ACTION IN TREATING THE LAND SITUATED AT VILLAGE JEETE, TALUKA PEN, DIS . RAIGAD AS A NON - AGRICULTURAL LAND WITHIN THE MEANING OF SEC. 2(14) AND THEREBY ERRED IN CONFIRMING ADDITION OF RS.36,74,738/ - AS A LONG TERM CAPITAL GAIN TO THE TOTAL INCOME DISCLOSED BY THE ASSESSEE, ARE WRONG , INSUFFICIENT AND CONTRARY TO THE FACTS AND EVIDENCE ON RECORDS. 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2012 - 13 ON 28.09.2012 DECLARING TOTAL INCOME OF RS.14,08,220/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER (AO) NOTICED THAT THE ASSESSEE HAD SOLD THE LAND AT S. NO. 22, H. NO. 18, AT VILLAGE JITE, RAIGAD FOR A CONSIDERATION OF RS.44,31,000/ - . IN RESPONSE TO A QUERY RAISED BY THE AO TO EXPLAIN AS TO WHY THE SAME SHOULD NOT BE BROUGHT TO TAX AS CAPITAL GAINS , THE ASSESSEE SUBMITTED THAT THE SAID LAND IS AGRICULTURAL AND THE SAME IS SITUATED OUTSIDE THE LIMIT OF MUNICIPAL AREA OF PEN. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THERE IS MENTION OF A HOTEL SIT UATED ON THE SAID LAND AND THE LAND IS SITUATED ON THE MUMBAI GOA HIGHWAY. HOLDING THAT IT IS NOT AN AGRICULTURAL LAND, THE AO BROUGHT TO TAX THE LONG TERM CAPITAL GAINS OF RS.36,74,738/ - . 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL B EFORE THE LD. CIT(A). IN THE ORDER DATED 16.03.2017 THE LD. CIT(A) OBSERVED THAT THERE WAS NO COMPLIANCE BY THE ASSESSEE TO THE NOTICE MR. SUSHIL SURESH ITA NO. 3101/MUM/2017 3 SENT BY HIS OFFICER FIXING THE CASE FOR HEARING ON 09.12.2016, 20.01.2017, 20.02.2017 AND 16.03.2017. THEREFORE, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE GROUND OF NON - COMPLIANCE. ALSO THE LD. CIT(A) AGREED WITH THE REASONS GIVEN BY THE AO AND CONFIRMED THE CAPITAL GAINS OF RS.36,74,738/ - . 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILES AN APPLICA TION UNDER RULE 29 OF THE TRIBUNAL RULES FOR ADMISSION OF ADDITIONAL EVIDENCE CONSISTING OF (I) CERTIFICATE FROM TALATHI STATING THAT ON THE SAID LAND, AGRICULTURAL ACTIVITIES ARE CARRIED OUT AND (II) CERTIFICATE FROM THE EXECUTIVE ENGINEER CERTIFYING THAT THE SAID LAND IS 10 KM FROM THE CITY. IT IS STATED BY HIM THAT THE ABOVE CERTIFICATES COULD NOT BE PRODUCED BEFORE THE LD. CIT(A) DUE TO WRONG COMMUNICATION OF DATE OF HEARING. 6. ON THE OTHER HAND, THE LD. DR SUBMITS THAT SUFFICIENT OPPORTUNITY WAS GI VEN BY THE LD. CIT(A) TO THE ASSESSEE TO REPRESENT HIS CASE DURING THE APPELLATE PROCEEDINGS AND AS THERE WAS REPEATED NON - COMPLIANCE BY THE ASSESSEE, THE APPEAL FILED AGAINST THE ORDER OF THE LD. CIT(A) BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORDS. IN THE INSTANT CASE, THE ADDITION MADE BY THE AO IS ON THE GROUND THAT IN THE SALE AGREEMENT, THERE IS MENTION OF A HOTEL SITUATED ON THE SAID LAND AND THE LAND IS SITUATED ON THE MUMBAI GOA HIGHWAY AND THEREFORE, IT IS NOT AN AGRICULTURAL LAND. WE FIND THAT THIS IS NOT A WAY TO CONCLUDE SUCH A FINDING. IN SUCH A SITUATION, WE FEEL THAT THE MR. SUSHIL SURESH ITA NO. 3101/MUM/2017 4 ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE US WOULD GO A LONG WAY IN CLARIFYING THE PRESENT ISSUE. THEREFORE, WE ADMIT THE ADDITIONAL EVIDENCE. WE ALSO ABIDE BY THE DECISION IN THE CASE OF SMT. URMILA RATILAL V. CIT , (1982) 136 ITR 797, 799 (GUJ); HIRALAL DEVDUTT JAGADHRI V. ADDL. CIT , (1980) 18 CTR (PUNJ ) 96, 98 THAT WHERE AN ADDITIONAL EVIDENCE HAS BEEN ALLOWED TO BE ADDUCED, THE INTERESTS OF JUSTICE DEMAND THAT THE OTHER SIDE MUST BE GIVEN AN OPPORTUNITY TO EXPLAIN OR REBUT SUCH ADDITIONAL EVIDENCE. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) A ND RESTORE THE MATTER TO THE FILE OF THE AO TO MAKE A DE NOVO ORDER, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. THUS THE 1 ST & 2 ND GROUNDS OF APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 8. THE 3 RD GROUND OF APPEAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. AO ERRED IN DISALLOWING SUM OF RS.93,045/ - AS NON - BUSINESS EXPENDITURE. 9. IN THE ASSESSMENT ORDER, THE AO HAS MADE AN AD - HOC DIS ALLOWANCE @ 25% ON EXPENSES OF RS.3,72,182/ - ON THE GROUND THAT MOST OF THE VOUCHERS WERE SELF - MADE WITHOUT ANY SUPPORTING EVIDENCE. THIS DISALLOWANCE HAS BEEN CONFIRMED BY THE LD. CIT(A). AS APPARENT FROM THE ASSESSMENT RECORD, IN RESPONSE TO THE QUESTIO NNAIRE ISSUED BY THE AO, THE ASSESSEE FILED THE REQUISITE DETAILS. WE MAY REFER HERE TO PARA 2 OF THE ASSESSMENT ORDER DATED 13.03.2015. IN SUCH A SITUATION, WITHOUT FINDING FAULT ON SPECIFIC BILLS/VOUCHERS, THE MR. SUSHIL SURESH ITA NO. 3101/MUM/2017 5 AO SHOULD HAVE REFRAINED FROM MAKING AD - HOC DISALLOWANCE. THEREFORE, THE AD - HOC DISALLOWANCE OF RS.95,045/ - MADE BY THE AO IS DELETED. 10. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2019. SD/ - SD/ - ( PAWAN SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 31/01/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI