Smt. Hiraben Pragjibhai Tala, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(1), RAJKOT-GUJARAT

ITA 326/RJT/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8774 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 15-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NAMITA KHURANA
• Assessee Lawyers: AAKASH VODA
• Keywords: Additional evidence; Corroborative evidences; Onus to prove; Revised return
• Section: 143(3); 201; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SMT. HIRABEN PRAGJIBHAI TALA MARUTI, HARIHARNAGAR, UNIV ROAD, RAJKOT PAN: ABJPT4267C (APPELLANT) VS THE ITO, WARD - 1(1), RAJKOT (RES PONDENT) REVENUE BY : MRS. NAMITA KHURANA , SR. D . R. ASSESSEE BY: S H RI AAKASH VODA , A.R. DATE OF HEARING : 16 - 07 - 2 019 DATE OF PRONOUNCEMENT : 13 - 09 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2006 - 07 , AR ISES FROM ORDER OF THE CIT(A) - II, RAJKOT DATED 18 - 03 - 2014 , I N PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSE SSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - II, RAJKOT [HEREINAFTER REFERRED TO AS THE 'CIT(A)'] ERRED ON FACTS AS ALS O IN LAW IN RETAINING DISALLOWANCE OF RENOVATION EXPENSES OF RS. 3,14,052/ - CLAIMED BY THE APPELLANT FROM THE CAPITAL GAIN ON THE ALLEGED GROUND THAT NO PROOF OF THE SAME WAS FURNISHED. THE AO BE DIRECTED TO ALLOW THE CLAIM OF THE APPELLANT. I T A NO . 326 / RJT /20 14 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 2 3. THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN RETAINING THE ADDITION OF RS.8,55,000/ - U/S 68 OF THE ACT BY ALLEGING THAT THE APPELLANT FAILED TO DISCHARGE INITIAL BURDEN TO PROVE THE TRANSACTION AS GENUINE. THE ADDITION MADE IS IN TOTAL DISREGARD TO THE SUBMISS ION OF THE APPELLANT AND IS TOTALLY UNJUSTIFIED AND THE SAME MAY KINDLYBE DELETED. 4. THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF RS. 10,66,331/ - MADE U/S 68 OF THE ACT ON ACCOUNT OF ALLEGED DIFFERENCES IN OPENING BALANC ES OF CAPITAL ACCOUNTS AS PER THE ORIGINAL RETURN OF INCOME AND THAT REVISED ONE. THE ADDITION MADE IS TOTALLY UNJUSTIFIED AND MAY KINDLY BE DELETED. 5. THE LEARNED CIT(A) ERRED IN ON FACT AS ALSO IN LAW IN CONFIRMING THE ACTION OF THE AO IN NOT ACCEPTING THE REVISED ACCOUNTS FURNISHED ALONG WITH THE REVISED RETURN OF INCOME. THE AO BE DIRECTED TO ACCEPT THE REVISED ACCOUNTS. 6. THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN RETAINING ADDITION OF RS. 2,14,600/ - MADE U/S 68 OF THE ACT BY HOLDING T HAT THE APPELLANT FAILED TO DISCHARGE BASIC INGREDIENTS AS REQUIRED U/S 68 OF THE ACT. THE ADDITION MADE BEING TOTALLY UNJUSTIFIED, MAY KINDLY BE DIRECTED TO BE DELETED. 7. THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF RS. 4,38, 803/ - MADE U/S 68 OF THE ACT BY ALLEGING THAT APPELLANT FAILED TO DISCHARGE ITS ONUS OF PROVING DIFFERENCE TO THE SATISFACTION OF THE AO. THE ADDITION MADE IS IN TOTAL DISREGARDS TO THE FACTS OF THE CASE AND DESERVES TO BE DELETED, MAY KINDLY DE LETED. 8. THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN NOT ALLOWING TELESCOPING OF FUNDS INTER SE IN RESPECT OF ADDITIONS 7 DISALLOWANCES MADE BY THE AO. THE AO BE DIRECTED TO ALLOW THE SET OFF OF FUNDS AS REQUESTED. 3. THE ASSESSMENT U/S. 14 3(3) OF THE ACT WAS FINALIZED ON 8 TH DECEMBER, 2008 BY DETERMINING TOTAL INCOME AT RS. 30 , 01 , 806/ - AS AGAINST TOTAL INCOME OF RS. 1 , 13 , 020/ - . THE ASSESSING OFFICER HAS MADE VARIOUS ADDITIONS IN THE ASSESSMENT COMPLETED U/S. 14 3(3). THE RELEVANT FACTS P ERTAINING TO THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER ARE DISCUSSED WHILE ADJUDICATING THE VARIOUS GROUNDS OF APPEAL AS UNDER: - 4. GROUND NO. 1 IS GENERAL WHICH DOES NOT REQUIRE ANY ADJUDICATION T H E REFORE THE SAME STANDS DISMISSED. GROUND NO. 2 (DISALLOWANCE OF RENOVATION OF EXPENSES OF RS. 3 , 14 , 052/ - ) 5. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED ON VERIFICATION ON LEDG E R OF HOUSE BUILDING SALES ACCOUNT THAT EXPENSES TOWARDS REPAIRING AND RENOVATION WERE SHOWN ONLY AFTER THE DATE OF I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 3 SALE OF PROPERTY. THE PROPERTY WAS SOLD ON 16 - 08 - 2005 BUT THE RENOV ATI ON EXPENSES WAS MADE AFTER AUGUST, 2005. THE ASSESSED EXPLAINED THAT RENOVATION WAS COMPLETED BEFORE SALE OF PROPERTY BUT ITS PAYMENT WAS MADE AFTER THE SALE OF THE PROPERTY. THE ASSESSING OFFICER HAS NOT ACCEPTED THE REP LY OF THE ASSESSEE STATING THAT ASSESSEE HAD MAINTAINED BOOKS OF ACCOUNT AS PER MERCANTILE S YSTEM AND THE ASSESSEE FAILED TO SUBSTANTIATE HER CLAIM WITH RELEVANT SUPPORTING EVIDENCES . 6. ON APPEAL, THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 7 . WE HAVE HEARD THE RIVAL CONTENTIONS AND NOTICED THAT ASSESSE E HAS FAILED TO SUBSTANTIATE WITH RELEVANT EVIDENCES THE CLAIM OF RENOVATION EXPENSES AFTER THE SALE OF PROPERTY . THE ASSES SEE ALSO COULD NOT CONTROVERT THE FINDING OF THE LD. CIT(A) THAT SHE HAS MAINTAINED BOOKS OF ACCOUNT ON MERCANTILE BASIS. THEREFORE, WE DO NOT FIND ANY SUBSTANCE IN THE GROUND OF APPEAL OF THE ASSESSE AND THE SAME IS DISMISSED. GROUND NO. 3 (ADDITION OF RS. 8,55,000/ - U/S. 68 OF THE ACT) 8. DURING THE COURSE OF AS SESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CREDITED AN AGGREGATE AMOUNT OF RS. 8,55,000/ - ON VARIOUS DATES. THE ASSESSEE EXPLAINED THAT SHE HAD ADVANCED A SUM OF RS. 8,55,000/ - IN CONTEMPLATION OF SATAKHAT TO SHRI PRAFULBHAI RANCHHODBHAI MATALIVA ON ACCOUNT OF SALE OF PLOT OF LAND. IT IS FURTHER STATED THAT S A TA KHAT WAS SUBSEQUENTLY CANCELLED BY HER OWN ON 15 TH MAY, 2005 AND 17 TH JUNE, 2008 AND RECEIVED TOTAL CONSIDERATION OF R S . 8 ,55,000/ - WHICH WAS CREDITED IN LEDGER OF PLOT OF LAND. THE ASSESSING OFFICER HAS ISSUED SUMMON TO SHRI I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 4 PRAFULBHAI RANCHHODBHAI MATALIVA TO VERIFY GENUINENESS OF TRANSACTION BUT THE SAID PERSON HAS NOT MADE ANY COMPLIANCE TO THE SUMMON ISSUED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO ASKED THE ASSESSEE TO PRODUCE THE SAID PERSON BUT NO - ONE HAS ATTENDED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS FURTHER NOTICED THAT SAID SATAKHAT WERE NEITHER REGISTERED NOR NOTARIZED A N D S TAMP PAPE R WAS PURCHASED BY SHRI S.M. PATEL. CONSEQUENTLY, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 8,55,000/ - U/S . 68 OF THE ACT. THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. GROUND NO. 4 (ADDITION OF RS. 10,66,331/ - U/S. 68 OF THE A CT 9. DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER NOTI CED THAT ASSESSEE HAS FILED HER REVISED RETURN OF INCOME ON 28 TH MARCH, 2007. ON VERIFICATION OF CAPITAL ACCOUNT ENCLOSED WITH THE REVISED RETURN , THE ASSESSING OFFICER NOTICED THAT ASSESSE E HAS SHOWN OPENING CAPITAL AT RS. 17 , 84 , 936/ - AS AGAINST THE CLOSING BALANCE OF RS. 7 , 18 , 605/ - SHOWN IN THE ASSESSMENT YEAR 2005 - 06. IN THIS R EGARD, THE ASSESSING OFFICER OBSERVED THAT INCOME CAN BE REVISED ONLY WHEN THERE IS MISTAKE OR OMISSION IN CALCU LATION OF INCOME , HOWEVER , THE ASSESSEE HAS ALTERED HIS B OOKS OF ACCOUNT AND SHOWN INCOME OUT OF UNDISCLOSED INCOME IN HER REVISED CAPITAL ACCO UNT. THEREFORE, AN ADDITION OF R S. 10 , 66 , 331/ - WAS MADE U/S. 68 OF THE ACT TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE HAS FILED APP EAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. GROUND NOS . 5 & 6 ( ADDITION OF R S. 2 , 14 , 600/ - U/S. 68 OF THE ACT) 10. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS ACCEPTED LOAN/DEPOSIT I N AGGREGATE OF RS. 2 , 14 , 600/ - FROM SHRI ARVINDBHAI HANSRAJBHAI SHINGALA, I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 5 SHRI HANSRAJBHAI PUNJABHAI SHINGALA, SHRI JENTIBHAI HANSRAJBHAI SHINGALA AND SHRI RAMESHBHAI HANSRAJBHAI SHINGALA O N VARIOUS DATES AND THE AMOUNT OF SUCH DEPOSITS WERE JUST BELOW RS . 20 , 00 0 / - . THE ASSESSING OFFICER WAS OF THE VIEW THAT THESE CASH CREDIT WERE NOTHING BUT ASSESSEE S OWN MONEY BROUGHT IN BUSINESS AS AND WHEN REQUIRED AND SUBSEQUENTLY IT CAN BE BROUGHT BACK IN THE BUSINESS AT THE TIME OF NECESSITY. THEREFORE , THE ASSES SING OFFICER HAS MADE ADDITION OF RS. 2 , 14 , 600/ - U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. GROUND NO. 7 ( ADDITION OF RS. 4 , 38 , 803/ - U/S. 68 OF THE ACT) 11. THE ASSESSING OFF ICER NOTICED THAT ASSESSEE HAD SHOWN CLOSING BANK BALANCE OF RS. 700/ - IN HER BALANCE SHEET. HOWEVER, ON VERIFICATION OF THE REVISED BALANCE SHEET FILED WITH THE REVISED RETURN OF INCOME THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN CLOSING BALANC E AT R S. 4 , 39 , 503/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSES S EE HAD FILED RETURN OF INCOME ON THE BASIS OF ALTERATION MADE IN HER BOOKS OF ACCOUNTS . T HEREFORE, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 4 , 38 , 803/ - U/S. 68 OF THE ACT. THE AS SESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSSESSEE. 12. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS FILED ADDITIONAL EVIDENCES ON 13 TH JUNE, 2009 CONTAINING THE FOLLOWING SR. NO. DESCRIPTION OF DOCUMENTS PAGE NO I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 6 1 COPIES OF AFFIDAVIT MADE BY BOTH PARTIES I.E. APPELLANT & PRAFULBHAI MATAVIYA , WHO WERE ENTERED INTO SATAKHAT TOWARDS PURCHASE OF PROPERTY - SURVEY NO 140, PLOT NO 39/1 CONFIRMING THE TRANSACTION OF SATAKHA T MADE AND THEN CANCELLED AS WELL AS ADVANCE GIVEN AND RETURNED BACK 1 TO 7 2 COPIES OF AFFIDAVIT MADE BY BOTH PARTIES I.E. APPELLANT & PRAFULBHAI MATAVIYA , WHO WERE ENTERED INTO SATAKHAT TOWARDS PURCHASE OF PROPERTY - SURVEY NO 140, PLOT NO 8 CONFIRM ING THE TRANSACTION OF SATAKHAT MADE AND THEN CANCELLED AS WELL AS ADVANCE GIVEN AND RETURNED BACK. 8 TO 13 3 COPIES OF AFFIDAVIT MADE BY BOTH PARTIES I.E. APPELLANT & ARVIND H. SINGHALA WITH THREE OTHER PARTIES , WHO WERE ENTERED INTO SATAKHAT TOWARDS SALE OF PROPERTY - SURVEY NO 140, PLOT NO 39/1 CONFIRMING THE TRANSACTION OF SATAKHAT MADE AND THEN CANCELLED AS WELL AS ADVANCE RECEIVED AND RETURNED BACK TO THEM. 14 TO 21 IT WAS CONTENDED THAT ASSESSEE COULD NOT FILE THESE EVIDENCES BEFORE LOWER AUTHORITIES DUE TO IMPROPER AND INAPPROPRIATE ADVICE BY EARLIER CONSULTANT. THE LD. COUNSEL HAS ALSO FILED PAPER BOOK CONTAINING DETAIL AND DOCUMENT FILED BEFORE THE ASSESSING OFFICER AND LD. CIT(A) DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDIN GS. IT WAS ALSO CONTENDED THAT ASSESSING OFFICER HAS MADE VARIOUS DISALLOWANCES U/S. 68 OF THE ACT ON SELF ANALYSIS I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 7 BASIS WITHOUT GIVING ANY SHOW CAUSE NO TICE AND OBTAINING ANY EXPLANATION OF THE ASSESSEE. THEREFORE, IT WAS CONTENDED THAT NECESSARY OPPOR TUNITY HAS NOT BEEN PROVIDED TO THE ASSESSEE BEFORE MAKING AFORESAID ADDITIONS U/S. 68 OF THE ACT. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 13. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURS E OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER HAS MADE FOUR ADDITIONS U/S. 68 OF THE ACT AS REFERRED ABOVE IN THIS ORDER. WE HAVE PERUSED THE FINDING OF THE ASSESSING OFFICER AND LD. CIT(A) AND IT IS NOTICED THAT MOST OF THE ADDITIONS WERE MADE ON THE BASIS OF SELF ANALYSIS MADE BY TH E ASSESSING OFFICER THAT ASSESSEE HAS FAILED TO SUBSTANTIATE HER CLAIM WITH SUPPORTING EVIDENCES AND THE ASSESSEE HAD FILED REVISED RETURN OF INCOME ON ALTERNATION OF HER BOOKS OF ACCOUNT ETC . HOWEVER, WE HAVE NOTICED THAT ASSESSING OFFICER HAS NOT REFERRED ANY SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE BEFORE MAKING VARIOUS ADDITIONS U/S. 68 OF THE ACT. THEREFORE, WE OBSERVED THAT ASSESSEE COULD NOT GET PROPER OPPORTUNITY TO FURNISH HER EXPLA NATION AND SUPPORTING MATERIAL BEFORE THE ASSESSING OFFICER. WE HAVE ALSO NOTICED THAT ASSESSEE HAS FILED ADDITIONAL EVIDENCES AS REPORTED ABOVE IN THIS ORDER WHICH ARE RELEVANT TO THE VARIOUS ADDITIONS MADE U/S. 68 OF THE ACT. CONSIDERING THE ABOVE FACT S, WE ARE OF THE VIEW THAT IT WILL BE APPROPRIATE TO RESTORE THE GROUNDS OF APPEAL 3 TO 7 OF THE ASSESSEE TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING TH E ADDITIONAL EVIDENCES FILED AND PROVIDING ADEQUATE OPPORTUNITIES TO THE ASSE SSEE . ACCORDINGLY, THE GROUND S OF APPEAL NO. 1 AND 2 OF THE ASSESSEE ARE DISMISSED AND REMAINING GROUND NO. 3 TO 7 ARE RESTORED TO THE FILE OF ASSESSING OFFICER AS DIRECTED I.T.A NO. 326 /RJT /20 14 A.Y. 2006 - 07 PAGE NO SMT. HIRABEN PRAGJIBHAI TALA VS . ITO 8 ABOVE FOR FRESH ADJUDICATION. GROUND NOS. 8 AND 9 ARE GENERAL WHICH DO NOT REQUIR E ANY ADJUDICATION AT THIS STAGE, THEREFORE, THE SAME STAND DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 13 - 09 - 201 9 SD SD/ - (RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 13/09 /201 9 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT