Smt. Sunita Patni, Indore V. The ITO 5(1),

ITA 340/IND/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5635 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 23-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Income from undisclosed sources; Opportunity of being heard
• Section: 143(3); 54F; 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SMT. SUNITA PATNI, 552, KHATIWALA TANK, INDORE .. ./ PAN: AJEPP2317G VS. ITO, 5(1), INDORE. / APPELLANT / RESPONDENT / APPELLANT BY SHRI ANIL KAMAL GARG AND SHRI ARPIT GAUR, CAS / RESPONDENT BY SHRI MOHD.JAVED, SR. DR DATE OF HEARING 17.10.2016 DATE OF PRONOUNCEMENT 07.11.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-II, INDORE .. . / I.T.A. NO.340/IND/2013 %' ' / ASSESSMENT YEAR: 2004-05 SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 2 OF 9 [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 14.02 .2013 AND PERTAINS TO ASSESSMENT YEAR 2004-05 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER PASSED U/S 143(3) DATE D 28.12.2006 OF ITO WARD 5(1) INDORE [HEREINAFTER REF ERRED TO AS THE AO]. 2. THERE ARE AS MANY AS FOUR GROUNDS HAVE BEEN TAKEN B Y THE ASSESSEE. GROUND NO. 3 IS NOT PRESSED AS THE S AME IS DISMISSED. GROUNDS REMAINED FOR ADJUDICATION ARE AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING T HE ACTION OF THE LD. AO OF NOT ACCEPTING LONG-TERM CAP ITAL GAIN OF RS. 15,13,500/- SHOWN BY THE APPELLANT IN HER RETURN OF INCOME AND ALSO IN TREATING THE SAME AS INCOME OF THE APPELLANT FROM UNEXPLAINED SOURCES. 2. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A ) GROSSLY ERRED IN CONFIRMING THE ACTION OF THE LD. A O OF REJECTING THE CLAIM OF THE APPELLANT UNDER S. 54F O F THE INCOME-TAX ACT, 1961, IN RESPECT OF INVESTMENT SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 3 OF 9 SHOWN TO HAVE BEEN MADE BY HER IN PURCHASE OF A PLOT AND CONSTRUCTION OF A RESIDENTIAL UNIT THEREON . 4. THAT, THE LD. CIT(A) GROSSLY ERRED, BOTH ON FACTS A ND IN LAW, IN CONFIRMING THE ACTION OF THE LD. AO IN CHARGING INTEREST U/S 234B OF THE INCOME-TAX ACT, 1961, OF RS. 1,65,167/- 5. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD SHO WN LONG-TERM CAPITAL GAIN AGGREGATING TO RS. 14,85,376 /- ON SALE OF 10,000 EQUITY SHARES OF A COMPANY TITLED AS STE NLY CREDIT CAPITAL LIMITED. THE SHARES WERE SOLD BY THE ASSES SEE THROUGH A SEBI REGISTERED BROKER AND THROUGH STOCK EXCHANGE . THE DELIVERY OF THE SHARES WAS MADE THROUGH DEMAT ACCOUN T AND THE ENTIRE SALES CONSIDERATION WAS RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAD SOLD THE SHARES AT THE RATE OF RS. 151.35 PER SHARE I.E. FOR RS. 15,13,500/-. 6. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE GENUINENESS OF THE TRANSACTIONS WAS ESTABLISHED BY FURNISHING ALL DOCUMENTARY EVIDENCES . THE AO HAD CONDUCTED NECESSARY ENQUIRIES FROM BOTH THE BRO KERS AND SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 4 OF 9 AS PER THE AOS OWN FINDING AND BOTH THE BROKERS HAD CONFIRMED THE TRANSACTIONS OF PURCHASE AND SALES OF SHARES. THE TRANSACTIONS HAD TAKEN PLACE THROUGH SEBI REGIS TERED BROKERS AND THROUGH A RECOGNIZED STOCK EXCHANGE. TH E TRANSACTIONS HAD TAKEN PLACE THROUGH ACCOUNT PAYEE CHEQUES. THE AO HIMSELF AT PARA 3 OF HIS ORDER HAS CONFIRMED THIS FACT. THE DELIVERY OF THE SHARES AT THE TIME OF SALES WAS MADE THROUGH DEMAT ACCOUNT OF THE ASSESSEE. THE LD. AUTH ORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER CONTENDED TH AT HAD THE TRANSACTIONS OF PURCHASES OF SHARES BEEN NOT GENUIN E, THE SHARES IN DEMAT FORM COULD NOT HAVE GOT DEPOSITED I N THE ASSESSEES DEMAT ACCOUNT MAINTAINED WITH A DEPOSITOR Y OF REPUTE. THE ASSESSEE HAD ALSO SHOWN THE INVESTMENT IN PURCHASE OF SHARES IN HER STATEMENT OF AFFAIRS AS O N 31.03.2003 AS FILED ALONGWITH THE RETURN OF INCOME F OR ASSESSMENT YEAR 2003-04. THE SALE OF SHARES AT RS. 151.35 PER SHARE IS SUPPORTED BY THE PAPER CUTTING OF THE ECON OMIC TIMES NEWSPAPER, WHICH IS PLACED AT PAGE NO. 79 OF PAPER B OOK. SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 5 OF 9 7. IN APPELLATE PROCEEDINGS, THE LD. CIT(A) HAD CALLED A REMAND REPORT FROM THE THEN AO. THE ASSESSEE MADE A DETAILED REPLY, REBUTTING EACH AND EVERY OBSERVATIO N OF THE AO THROUGH COUNSEL. THE LD. CIT(A) ISSUED A NOTICE DAT ED 2.2.2012 U/S 251(1) R.W.S. 250(4) OF THE ACT. ALONGWITH THE NO TICE, THE LD. CIT(A) ALSO FURNISHED COPIES OF CERTAIN INFORMA TION DOWNLOADED AT HIS END FROM THE SEBI WEBSITE. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE ASSESSEE VIDE HER COUNSELS LETTER DATED 26.3.2012 MADE REPLY OF EACH AND EVERY QUERY RAISED BY THE LD. CIT(A). T HE LD. CIT(A) HELD THAT THE FINDINGS OF SEBI ALONGWITH CIRCUMSTANT IAL EVIDENCE LEAD TO ONE CONCLUSION THAT THE ASSESSEE P URCHASED ACCOMMODATION ENTRY OF LONG TERM CAPITAL GAIN OF RS . 15,13,500/-. THE FINDINGS OF AO TREATING THIS INCOM E AS INCOME FROM UNDISCLOSED SOURCES, WAS CONFIRMED. 8. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E ORDERS OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THIS MATTER SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 6 OF 9 REQUIRES REEXAMINATION. WE, THEREFORE, SET-ASIDE TH IS MATTER TO THE FILE OF AO FOR RE-EXAMINATION OF THE CASE WITH THE DIRECTION TO DECIDE THE MATTER AFRESH. HE SHALL PROVIDE THE O PPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL COOPERA TE TO THE ASSESSEE IN PROVIDING THE INFORMATION AS CALLED FOR BY THE AO. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 10. THE GROUND NO. 2 RELATES TO CONFIRMING THE ACTION O F THE AO OF REJECTING THE CLAIM OF THE ASSESSEE U/S 54F O F THE INCOME-TAX ACT, 1961, IN RESPECT OF INVESTMENT SHOW N TO HAVE BEEN MADE BY HER IN PURCHASE OF A PLOT AND CONSTRUC TION OF A RESIDENTIAL UNIT THEREON. 11. THE ASSESSEE HAS CONSTRUCTED A SMALL RESIDENTIAL HO USE CONSISTING OF ONE BATHROOM, ONE KITCHEN AND ONE TOI LET ON THE PLOT PURCHASED BY HER IN JOINT OWNERSHIP WITH HER HUS BAND. THE LD. CIT(A) FOUND THAT THE CONSTRUCTION OF THE H OUSE WAS NOT GOT COMPLETED BY THE ASSESSEE WITHIN A PERIOD OF 3 YEARS FROM THE DATE OF DRIVING THE LONG TERM CAPITAL GAIN . 12. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE FINDINGS OF THE LD. CIT(A) IS N OT FACTUALLY SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 7 OF 9 CORRECT AND THE FACT REMAINED THAT WITHIN THE PRESCR IBED TIME LIMIT OF 3 YEARS, THE ASSESSEE AFTER GETTING MUNICI PAL PLAN SANCTIONED , CONSTRUCTED A SMALL RESIDENTIAL UNIT O N THE PLOT PURCHASED BY HER. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT EVEN IF FOR A MOMENT, IT IS PRESUMED THAT THE CONSTRUCTION HAD NOT GOT COMPLETED WITHIN A PERIOD OF 3 YEARS, IN ALL RESPECTS, THEN THE DEDUCTION OF SEC TION 54F CANNOT BE DENIED TO THE ASSESSEE. THE LD. AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE PLACED RELIANCE ON T HE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SAMBANDAM UDAYKUMAR, (2012) 345 ITR 389 (KAR), WHICH WAS FOLLOWED BY THE I.T.A.T., BANGALORE BENCH IN THE C ASE OF ACIT VS. SHRI PRASHANT PRAKASH & ORS,(2015) 6 TMI 674 (I.T.A.T.BANGALORE). THE LD. AUTHORIZED REPRESENTAT IVE OF THE ASSESSEE CONCLUDED THAT ONCE THE ASSESSEE HAS BEEN FOUND TO HAVE MADE INVESTMENT FOR THE PURPOSE OF PURCHASE OF A PLOT AND CONSTRUCTION OF A RESIDENTIAL HOUSE THEREON, DE DUCTION U/S 54F FOR ANY PARTICULAR ASSESSMENT YEAR CANNOT B E DENIED SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 8 OF 9 TO SUCH AN ASSESSEE ON THE GROUND THAT SUCH CONSTRU CTION WAS NOT COMPLETED WITHIN A PERIOD OF THREE YEARS. 13. THE LD. SR. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THIS MATTER ALSO REQUIRES THE RE-EXAMINATION. WE, THEREFORE, SET-ASI DE THIS MATTER ALSO TO THE FILE OF THE AO WITH THE DIRECTIO N TO EXAMINE THE MATTER AND DECIDE THIS ISSUE AFRESH. HE SHALL A FFORD AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15. GROUND NO. 3 IS NOT PRESSED, HENCE THE SAME IS DISMISSED. 16. GROUND NO. 4 IS REGARDING CHARGING OF INTEREST U/S 234B OF THE INCOME-TAX ACT, 1961, WHICH IS OF CONSEQUENTI AL NATURE. SMT. SUNITA PATNI, INDORE. I.T.A.NO. 340/IND/2013 A.Y.2004-05 PAGE 9 OF 9 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 07 TH NOVEMBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 07 TH NOVEMBER, 2016. CPU*