The ACIT, (OSD), Circle-9, Ahmedabad V. Shri Rakesh Hiralal Thakkar, Ahmedabad

ITA 327/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7012 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Section: 133(6)

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.327/AHD/2016 / ASSTT. YEAR: 2011-2012 DCIT, CIR.3(3) AHMEDABAD. VS. SHRI RAKESH HIRALAL THAKKAR 1, RUKSHMANI VALLABH SOCIETY SATELLITE, AHMEDABAD 380 015. PAN : AARPT 3338 B / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI S.K. DEV, SR.DR ASSESSEE BY : SHRI ASEEM L. THAKKAR, AR ! / DATE OF HEARING : 28/11/2018 '#$ ! / DATE OF PRONOUNCEMENT: 18 /01/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A)-13, AHMEDABAD DATED 2.11.2015 FOR THE ASS TT.YEAR 2011-12. 2. THOUGH THE REVENUE HAS TAKEN SIX GROUNDS OF APPE AL, BUT GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.79.00 LAKHS MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF LAND DEVELOPMENT EXPENDITURE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF BUILDING CONTRACTOR, HOT EL BUSINESS AND TRADING IN LAND. HE HAS FILED HIS RETURN OF INCOME ON 31.10.2011 DECLARING TOTAL INCOME AT RS.25,14,080/-. THE CASE OF THE ASSESSEE WAS ITA NO.327/AHD/2016 2 SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER S ECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY O F THE DETAILS, IT REVEALED THAT THE ASSESSEE HAD PURCHASED AGRICULTUR E LAND LOCATED AT AMBALI VILLAGE IN DASCROI TALUKA BEARING BLOCK NO.1 11K. THIS LAND WAS SOLD BY THE ASSESSEE ON 12.10.2010 FOR A CONSIDERAT ION OF RS.1,06,20,000/-. IT WAS PURCHASED ON 17.7.2008 AT RS.22.00 LAKHS. THE ASSESSEE HAS SHOWN ADDITIONAL EXPENDITURE OF RS .80.58 LAKHS AND SHOWN PROFIT AT RS.3,62,000/-. ONE OF THE PAYMENTS DEBITED BY THE ASSESSEE WAS IN THE NAME OF M/S.TRIPADA INFRASTRUCT URE P.LTD. (TIPL FOR SHORT) AMOUNTING TO RS.79.10 LAKHS. THE AO VER IFIED VERACITY OF THESE PAYMENTS. HE ISSUED A SHOW CAUSE NOTICE TO TIPL WHICH HAS BEEN RETURNED UNSERVED. HE DEPUTED INSPECTOR WHO R EPORTED THAT NO ONE WAS AVAILABLE ON THE GIVE ADDRESS. THEREAFTER, HE TOOK FRESH ADDRESS OF THIS CONCERN FROM THE OFFICE OF THE REGI STRAR OF COMPANIES AND ISSUED NOTICE TO TIPL AS WELL AS ITS DIRECTOR S. ONE OF THE DIRECTORS RESPONDED TO THE NOTICE AND CONFIRMED THE TRANSACTI ON. THE LD.AO THEREAFTER CALLED FOR BALANCE SHEET OF TIPL FROM THE AO OF THAT CONCERN AND OBSERVED THAT THE CONCERN HAS NOT SHOWN CREDIT OF RS.79.10 LAKHS UNDER THE HEAD UNSECURED LOANS QUA THE ASSESSEE. HENCE, HE DOUBTED THIS PAYMENT AND MADE ADDITION. DISSATISFI ED WITH THE ADDITION, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER: 5. DURING THE COURSE OF APPELLATE PROCEEDINGS , THE APPELLANT PRIMARILY ARGUED THAT A PAYMENT OF RS.79.10 LAKHS W AS MADE THROUGH AN ACCOUNT PAYEE CHEQUE, WHICH IS ADMITTEDL Y BEEN RECEIVED BY M/S.TIPL. THE APPELLANT ALSO FURNISHED COPIES OF ITS BANK STATEMENTS INDICATING CLEARING OF THIS CHEQUE VIDE NO. 598485 DATED 23/10/2010. THE COPY OF CONFIRMATION W HICH WAS FILED BY M/S. TIPL BEFORE THE A.O. WAS ALSO FURNISH ED BEFORE ME. THE SAME IS AVAILABLE ON PAGE-3 OF THE PAPER BOOK S O FILED. IN ADDITION TO THAT, THE ASSESSEE ARGUED THAT CONCLUSI VE EVIDENCES AND FACTS EXISTS, WHICH INDICATES THAT THE MONEY HA S TRAVELLED FROM APPELLANT THROUGH M/S. TIPL, WHICH IS DULY BEI NG ACKNOWLEDGED AND REFLECTED FROM THE BANK ACCOUNT, T HE CONFIRMATION AND THE AFFIDAVIT SO FILED AT THE APPE LLATE STAGE. IT WAS POINTED OUT THAT IF THE SUM SO PAID BY THE APPE LLANT IS NOT ITA NO.327/AHD/2016 3 ACCOUNTED FOR BY THE THIRD PARTY, IT MAY NOT BE CON STITUTED AS A FAULT OF THE APPELLANT AND AN ADVERSE INFERENCE DRA WN WITH RESPECT TO THE EVIDENCES SO FILED. IN SHORT, THE APPELLANT SUBMITTED THAT THE PREVAILING CIRCUMSTANCES DO NOT MAKE THE PAYMEN TS MADE, AS NON-GENUINE OR BOGUS. I AM, INCLINED TO AGREE WITH THE APPELLANT THAT MORE THAN TWO EVIDENCES HAVE BEEN FURNISHED BE FORE THE A.O. AND ALSO BEFORE ME, WHICH CONCLUSIVELY INDICAT E THAT THE PAYMENTS HAVE BEEN MADE TO M/S. TIPL. THERE IS NO R EASON FOR THE A.O. TO DRAW A CONCLUSION THAT SUCH SUM IS BOGU S. ACCORDINGLY, THE ADDITION OF RS.79.10 LAKHS IS DIRE CTED TO BE DELETED. THE GROUND RAISED BY THE APPELLANT IS ALLO WED. 4. BEFORE US, THE LD.DR RELIED UPON THE ORDER OF TH E AO. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON ORDER OF THE LD.CIT(A). 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE ASS ESSMENT ORDER WOULD INDICATE THAT ON THE BASIS OF CERTAIN CIRCUMSTANCES , THE LD.AO HAS RAISED SUSPICION AND DOUBT ABOUT THE NATURE OF THE EXPENDI TURE INCURRED BY THE ASSESSEE IN THIS LAND TRANSACTION. IN A WAY, HE DI SALLOWED THIS EXPENDITURE. THE SUSPICION DISCUSSED BY THE AO IN THE ASSESSMENT ORDER ARE THAT (A) SIGNATURE ON THE LETTER TRANSMIT TED BY THE DIRECTOR IN RESPONSE TO THE NOTICE UNDER SECTION 133(6) VIS--V IS CONFIRMATION FILED BY THE ASSESSEE ARE DIFFERENT; (B) TIPL HAS NOT S HOWN THIS AMOUNT UNDER THE HEAD UNSECURED LOAN OR UNDER THE HEAD CURRENT LIABILITIES; (C) AT THE FIRST INSTANCE ON THE ADDRESS GIVEN BY T HE ASSESSEE, WHEREABOUTS OF THIS TIPL WERE NOT KNOWN; (D) ASSE SSEE FAILED TO PRODUCE THE DIRECTORS OF TIPL BEFORE THE AO. THE SE ARE CERTAIN PERIPHERAL CIRCUMSTANCES GIVEN BY THE AO FOR DOUBTI NG THE CLAIM MADE BY THE ASSESSEE. WE HAVE GONE THROUGH THESE CIRCUM STANCES AS WELL AS OTHER MATERIAL AVAILABLE ON RECORD. FIRSTLY, THE ASSESSEE IS ENGAGED IN THE TRADING OF LAND. HE HAS SHOWN PROFIT ON THIS T RANSACTION. IT IS NOT A LOSS CLAIMED BY THE ASSESSEE. THUS, THE AO CANNOT EXPECT HIGHER VOLUME OF PROFIT REQUIRED TO BE EARNED BY AN ASSESS EE. IT IS THE ASSESSEE WHO HAS TO ARRANGE ITS AFFAIRS REGARDING A TRANSACTION. THE ITA NO.327/AHD/2016 4 PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUE, AND IT HAS BEEN CLEARED. DETAILS OF BANK TRANSACTIONS WERE PRODUCE D BEFORE THE LD.CIT(A) AND ACCEPTED BY THE FIRST APPELLATE AUTHO RITY. ALLEGATIONS OF THE AO THAT IT WAS NOT SHOWN IN THE UNSECURED LOANS AND CURRENT LIABILITIES BY THE TIPL IN ITS BALANCE SHEET IS C ONCERNED, IF IT IS BEING TREATED AS INCOME IN LAND TRADING TRANSACTION, THEN HOW IT WILL COME UNDER THESE TWO HEADS. THE LD.AO FAILED TO APPRECI ATE THAT ASPECT. IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE HAS SUBMIT TED COMPLETE DETAILS. NOW, IF TIPL FAILED TO ACCOUNT A PARTICULAR ITEM IN ITS ACCOUNTS, THEN WHETHER THE ASSESSEE SHOULD BE PENALIZED. CONSIDER ING ALL THESE ASPECTS AND THE ORDER OF THE LD.CIT(A), WE ARE OF T HE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD.C IT(A). WE FIND NO MERIT IN THIS APPEAL OF THE REVENUE. IT IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 18 TH JANUARY, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 18/01/2019