Shri Bhagwansahay K. Yogi, Ahmedabad V. The Income Tax Officer, Ward-12(4), Ahmedabad

ITA 3391/AHD/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4455 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 17-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: NIRMALSHRISHRIMAL
• Keywords: Unexplained investment; Set aside
• Section: 271(1)(c); 143(3); 147; 148

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER &SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NOS. 3390 & 3391/AHD/2014 ( / ASSESSMENT YEAR:2006-07) BHAGWANSAHAY K. YOGI 9, NIRAV SHOPPING CENTRE NEAR RAILWAY CROSSING, MANINAGAR AHMEDABAD- 380008 / VS. ITO, WARD-12(4), AHMEDABAD ./ ./PAN/GIR NO. : AAM PY3 644 C ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : NIRMALSHRISHRIMAL, AR / RESPONDENTBY: MUDIT NAGPAL, SR. DR !' /DATE OFHEARING 26/04/2019 #$!' / DATE OF PRONOUNCEMENT 21/05/2019 %& /O R D E R PER AMARJIT SINGH - AM: THESETWO APPEALS HAVE BEEN FILED BY THE ASSESSEE FO R A.Y. 2006-07, ARISE FROM ORDER OF THE CIT(A)-XXAHMEDABAD DATED 02.09.20 14, IN PROCEEDINGS UNDER SECTION 143(3)R.W.S 147OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 3390/AHD/2014 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPE AL:- 1. THE LD. CIT(A) XX AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN PASSING APPELLATE ORDER DATED 02.09.2014 FOR A.Y. 2006-07 I N THE CASE OF APPELLANT BY CONFIRMING ADDITIONS MADE BY THE ASSESSING OFFICER. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ACTION OF A.O. FOR INVOKING PROVISION OF SECTION 147. ITA NOS. 3390 & 3391/AHD/2014 A.Y. 2006-07 2 3. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING THE ADDITION OF RS. 8,14,920/- MADE BY A.O. ON ACCOUNT OF ALLEGED UNACC OUNTED INVESTMENT IN FLATS THOUGH THE SAME WERE SHOWN IN AUDITED FINANCI AL STATEMENT. 4. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ADDITION OF NOTIONAL RENTAL INCOME TO THE EXTENT OF RS. 33,600/- 3. DURING THE COURSE OF APPELLATE PROCEEDING THE AS SESSEE HAS NOT PRESSED THE GROUND NO. 1 AND 2 PERTAINING TO INVOKING THE PROVI SION OF SEC. 147 OF THE ACT. THEREFORE, THESE GROUNDS OF APPEAL ARE DISMISSED AS NOT PRESSED. THE REMAINING TWO GROUNDS OF APPEAL OF THE ASSESSEE ARE FILED AGA INST THE DECISION OF CIT(A)-XX, AHMEDABAD IN CONFIRMING THE ADDITION OF RS. 8,14,92 0/- ON ACCOUNT OF COMMON UNACCOUNTED INVESTMENT IN FLATS AND IN CONFIRMING A DDITION OF NOTIONAL RENTAL INCOME TO THE EXTENT OF RS. 33,600/-. THE FACT IN B RIEF IS THAT ASSESSEE HAS FILED RETURN OF INCOME ON 27.12.2006 DECLARING TOTAL INCO ME AT RS. 3,07,540/-. SUBSEQUENTLY, THE CASE WAS REOPENED BY ISSUING OF N OTICE U/S. 148 OF THE ACT ON 29.08.2012. DURING THE COURSE OF ASSESSMENT PROCEE DING REGARDING PURCHASE OF TWO FLATS THE ASSESSEE HAS STATED THAT HE HAS SUBMI TTED BEFORE THE PREDECESSOR OF THE AO THAT THOSE FLATS WERE PURCHASED OUT OF HIS INCOM E AND SAVINGS.REGARDING ESTIMATION OF RENT FROM FLATS THE ASSESSEE HAS SUBM ITTED THAT HE HAD NOT EARNED ANY RENTAL INCOME AND THE FLATS WERE USED FOR BUSINESS PURPOSES. THE AO HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND SIMPLY STATED THAT THE SOURCE OF INVESTMENT IN FLATS WERE NOT DISCLOSED. THEREFORE, THE AO HAS MADE ADDITION OF RS. 8,14,920/- (RS. 3,52,510 + RS. 4,62,410) IN RESPECT OF THESE PROPERTIES AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE A.O. HAS OBSE RVED THAT THE ASSESSEE WAS HAVING OWNERSHIP OF TWO FLATS AND ASSESSEE HAS ALSO NOT SHOWN ANNUAL VALUE OF ONE OF THE FLAT FOR RENT PURPOSE, THEREFORE, HE HAS MAD E ADDITION ON ACCOUNT OF NOTIONAL RENT TO THE AMOUNT OF RS. 50,400/-. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD . CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE REITERATIN G THE SAME REASON CITED BY THE AO. ITA NOS. 3390 & 3391/AHD/2014 A.Y. 2006-07 3 5. DURING THE COURSE OF APPELLATE PROCEEDING BEFORE US THE LD. COUNSEL HAS SUBMITTED PAPER BOOK CONTAINING 89 PAGES PERTAINING TO THE DETAIL AND INFORMATION IN SUPPORT OF INVESTMENT IN THE FLATS. THE LD. COUN SEL ALSO CONTENDED THAT AO HAS NOT CONSIDERED AND DISPROVED THE SUBMISSION OF THE ASSESSEE WITH ANY SPECIFIC FINDINGS. 6. ON THE OTHER HAND THE LD. DR HAS PLACED RELIANCE ON THE ORDER OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD. THE AO HAS MADE ADDITION VIDE ORDER U/S. 143(3) R.W.S 147 DATED. 22.03.2013 IN RESPECT OF INVESTMENT IN FLATS TO THE AMOUNT OF RS. 8,14,920/- AND DEEMED RENTAL INCOME ON THESE FLATS TO THE AMOUNT OF RS. 50,400/-. WE FIND THAT IN THE ASSESSMENT ORDER THE AO HAS ONLY STATED THAT THE ASSESSEE HAS NOT DISCLO SED ANY SOURCE OF INVESTMENT IN FLAT. HOWEVER, AFTER GOING THROUGH THE PAPER BOOK FILED BY THE LD. COUNSEL IT IS NOTICED THAT THE ASSESSEE HAS FILED VARIOUS DOCUMEN T AND INFORMATION I.E. COPY OF REGISTER DOCUMENT FOR PURCHASE OF FLAT, COPY OF RET URN ALONG WITH AUDITED FINANCIAL STATEMENT, COPY OF BANK STATEMENT, COPY/DETAILS OF FLATS PURCHASED AS PER BOOKS OF ACCOUNT AND DETAIL OF SUBMISSION MADE BEFORE AO ETC . IT IS ALSO NOTICED THAT THE INVESTMENT IN THE FLATS HAS BEEN REFLECTED IN THE B ALANCE SHEET AS ON 31.03.2006 WHICH WAS DULY AUDITED BY THE AUDITOR ALONG WITH AU DIT REPORT U/S. 44AB OF THE ACT WHICH WAS FILED WITH THE RETURN OF INCOME. THE ASSE SSEE HAS ALSO FILED COPY OF BANK STATEMENT LEDGER ACCOUNT OF TRANSACTION WITH T HE PARTIES AND COPIES OF AGREEMENTS OF PURCHASE OF FLATS ETC. IN VIEW OF TH E ABOVE WE CONSIDER THAT THE AFORESAID PROOF MATERIAL AND OTHER DETAIL PLACED IN THE PAPER BOOK DEMONSTRATE THAT AO HAS NOT VERIFIED AND EXAMINED THE SUBMISSION OF THE ASSESSEE BEFORE ARRIVING TO THE CONCLUSION THAT ASSESSEE HAS MADE UNEXPLAINED I NVESTMENT IN THE FLATS AND DETERMINING OF NOTIONAL INCOME IN RESPECT OF THE AF ORESAID FLATS. LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES WE RESTORE THIS CASE TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER EXAMINATION VERIFICATION OF T HE DETAIL/INFORMATION AS CITED ITA NOS. 3390 & 3391/AHD/2014 A.Y. 2006-07 4 ABOVE AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE A SSESSEE. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICA L PURPOSES. 8. IN THE RESULT, THEAPPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ITA NO. 3391/AHD/2014 9. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THE LD. CIT(A) XX AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN PASSING APPELLATE ORDER DATED 09.09.2014 FOR A.Y. 2006-07 I N THE CASE OF APPELLANT BY CONFIRMING PENALTY LEVIED BY THE ASSESSING OFFICER. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING PENALTY U/S. 271(1)(C) OF RS. 2,74,302/- LEVIED BY A.O. 10. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE DECISION OF LD. CIT(A)-XX IN CONFIRMING PENALTY OF RS. 2,74,302/- LE VIED BY THE AO U/S. 271(1)(C) OF THE ACT. SINCE, THE QUANTUM ADDITION ON THE BASIS OF WHICH THIS IMPUGNED PENALTY OF RS. 2,74,302/- WAS LEVIED BY TH E AO HAS BEEN SET ASIDE TO THE FILE OF AO FOR DECIDING THE ISSUE AFRESH. THEREFOR E, THE PENALTY LEVIED IN THE CASE OF THE ASSESSEE HAS BECOME INFRUCTUOUS AS THE SAME HAS TO BE DECIDED BY THE AO ON THE OUTCOME OF SET ASIDE ASSESSMENT TO BE FRAMED IN THIS CASE. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (KUL BHARAT) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 21/05/2019 TANMAY TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. % / ASSESSEE THIS ORDER PRONOUNCED IN OPEN COURT ON 21/05/2019 ITA NOS. 3390 & 3391/AHD/2014 A.Y. 2006-07 5 3. '( ! )! / CONCERNED CIT 4. )! - / CIT (A) 5. *+, ! ( , ' ( , -.%'% / DR, ITAT, AHMEDABAD 6. ,/ 0 / GUARD FILE. BY ORDER / %& , 1 / - ' ( , -.%'% 2 1.DATE OF DICTATION ON 01.05.2019 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 02.05.2019 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 02.05.2019 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 21.05.2019 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 21.05.2019 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21 .05.2019 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER