The ITO, Ward-3(3)(6), Ahmedabad V. M/s. Dhara Jagdishchandra Patel, Ahmedabad

ITA 3406/AHD/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6056 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 16-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers; Set aside
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 3406/AHD/2016 & C.O. NO. 36/AHD/2018 (ASSESSMENT YEAR: 2009-10) INCOME-TAX OFFICER WARD- 3(3)(6), AHMEDABAD MS. DHARA JAGDISHCHANDRA PATEL 11, MANICHANDRA SOCIETY, NR. SURDHARA CIRCLE, THALTEJ, AHMEDABAD-380014 V/S V/S MS. DHARA JAGDISHCHANDRA PATEL 11, MANICHANDRA SOCIETY, NR. SURDHARA CIRCLE, THALTEJ, AHMEDABAD-380014 INCOME-TAX OFFICER WARD- 3(3)(6), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AHKPP8698M APPELLANT BY : SHRI MUDIT NAGPAL, SR.D.R . RESPONDENT BY : SHRI DHIREN SHAH, A.R. ( )/ ORDER DATE OF HEARING : 16 -10-201 8 DATE OF PRONOUNCEMENT : 11 -01-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO. 3406/A HD/16 & C.O. 36/AHD/18 . A.Y. 2009-1 0 2 1. THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-3, AHMEDABAD DA TED 13.10.2016 PERTAINING TO A.Y. 2009-10 AND REVENUE HAS TAKEN FOLLOWING GRO UNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,81,58,0137- MADE ON ACCOUNT OF TRANSFER EXPENS ES ON SALE OF LAND WHICH HAS BEEN DENIED TO HAVE RECEIVED BY SHRI VIJAY SHAH, MA NAGING DIRECTOR OF PRERNA INFRA BUILD LTD. L.L THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN NOT APPRECIATING THAT THERE WAS NO GENUINE DEVELOPMENT AGREEMENT, CANCELLATION OF DEVELOPMENT AGREEMENT, CORRESPONDENCE FOR APPOINTING OF ARBITRA TOR AND ARBITRATION AWARD BY SHRI JASHBHAI D. PATEL, ADVOCATE, ETC. ON THE BASIS OF WHICH ASSESSEE CLAIMED THE EXPENDITURE OF RS.3.81 CRORE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT APPRECIATING THAT THE FINDING OF THE A.O. AND HAS ACCEPTED THE VERSION OF THE ASSESSEE WITHOUT EXAMINING THE ACTUAL FACTS ON RECORD. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSES SING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) MAY BE SET-ASIDE AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 2. BRIEFLY STATED THE FACTS OF THE CASE THAT THE RETUR N OF INCOME WAS FILED BY THE APPELLANT ON 08/03/2010 DECLARING TOTAL INCOME OF R S. 1,03,79,640/-. SUBSEQUENTLY, SHOW CAUSE NOTICE U/S. 263 OF THE ACT DATED 18/07/2013 WAS ISSUED BY THE LD. CIT CALLING UPON THE APPELLANT TO SHOW CAUSE AS TO WHY REVISIONARY PROCEEDING U/S.263 OF THE INCOME TAX AC T SHOULD NOT BE INITIATED FOR MODIFYING OR CANCELLING THE SAID ASSESSMENT ORD ER, AS THE FACTS SO WARRANT. IN RESPONSE TO THE SAME, APPELLANT ATTENDED FROM TI ME TO TIME AND DETAILED REPLY WAS SUBMITTED BY THE APPELLANT. HOWEVER, THE LD.CIT WAS NOT AGREED WITH THE CONTENTION AND DIRECTING THE ASSESSING OFFICER TO PASS APPROPRIATE ORDER AND IN VIEW OF THE DIRECTION ISSUED BY THE LD. CIT. LD. A.O. ISSUED NOTICE TO THE APPELLANT AND APPELLANT SUBMITTED THE DETAILED REPL Y BEFORE THE A.O. HOWEVER, LD.A.O. WITHOUT TAKEN INTO CONSIDERATION THE SAID S UBMISSION ORDER U/S. 143(3) ITA NO. 3406/A HD/16 & C.O. 36/AHD/18 . A.Y. 2009-1 0 3 READ WITH SECTION 263 OF THE INCOME TAX ACT MADE AN ADDITION OF RS. 3,81,58,013/- BEING CLAIM MADE UNDER ARBITRATION AG REEMENT. 3. NOW DEPARTMENT HAS COME BEFORE US STATING THAT DELE TING THE ADDITION OF RS. 3,81,58,013/- WHICH WAS MADE ON ACCOUNT OF TRANSFER EXPENSES ON SALE OF LAND SHRI VIJAY SHAH, MANAGING DIRECTOR OF PRERNA I NFRA BUILD LTD. 4. AT THE OUTSET, LD. A.R. FILED A COPY OF ASSESSEES OWN CASE IN WHICH ONE OF THE BENEFICIARY MATTER WAS DECIDED IN HER FAVOUR WITH T HE SAME SUBJECT MATTER AND FACTS OF THE CITED CASE WERE: 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. SHE FILED HER RETURN OF INCOME FOR A.Y. 2009-10 ON 08/03/2010, DECLARING TOTAL INCOME AT RS.1,03,79,640/-.CASE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND NOTICE U/S.143 (2) OF THE ACT FOLLOW ED BY NOTICE U/S.142(1) OF THE ACT WAS ISSUED, CALLING FOR NECESSARY DETAILS WHICH WERE DULY FILED BY THE AUTHORIZED REPRESENTATIVE ON BEHALF OF THE ASSESSEE . ORDER U/S.143(3) OF THE ACT WAS FRAMED ON 30/08/2011 ACCEPTING RETURN OF INCOME AS ASSESSED INCOME AT RS.1,03,79,640/-. THEREAFTER SURVEY U/S.133A OF THE ACT WAS CONDUCTED ON 27/08/2008 AT THE PREMISES OF MR.BHALUBHAI A PATEL, WHEREIN CERTAIN LOOSE PAPERS (A-1/13 A-1/11) WERE FOUND AND IMPOUNDED CON TAINING SOME INFORMATION ABOUT LAND AT SURVEY NOS.334,335 & 344 AT SARKHEJ A HMEDABAD. THESE DOCUMENTS ALSO INCLUDED THE DETAILS OF LAND AT SURV EY NO.335 & 334 WHICH WAS JOINTLY OWNED BY ASSESSEE AND TWO OTHER PERSONS. FU RTHER THIS INFORMATION WAS HAVING LINK WITH INCOME TAX RETURN FILED BY THE ASS ESSEE SHOWING SHORT TERM CAPITAL GAIN OF RS.95,06,960/- EARNED FROM SELLING ONE THIRD SHARE IN THE LAND AT SARKHEJ, AHMEDABAD, BEARING SURVEY NO.335 AND 344. LD.CIT ACCORDINGLY INITIATED PROCEEDINGS U/S.263 OF THE ACT AND OBSERVED THAT AS SESSEE HAS CLAIMED DEDUCTION OF RS.3,81,58,013/- ON ACCOUNT OF TRANSFER EXPENSES . 4.LD.CIT ALSO NOTICED THAT LD.ASSESSING OFFICER (IN SHORT LD.AO) HAS ONLY CALLED FOR PRIMARY DETAILS WITH RESPECT TO THE CLAIM OF TRANSF ER EXPENSES RELATING TO DETAILS OF PAYMENTS, BANK ACCOUNT EXTRACT AND ACCOUNTS COPI ES OF M/S PRERNA INFRABUILD LTD. TO WHOM TRANSFER EXPENSES OF RS.3,81,58,013/- WERE PAID AS COMPENSATION CONSEQUENT TO ARBITRATION AWARD FOR TERMINATION OF DEVELOPMENT AGREEMENT. ITA NO. 3406/A HD/16 & C.O. 36/AHD/18 . A.Y. 2009-1 0 4 5. AND RELEVANT PARA FOR GRANTING RELIEF IS REPRODUCED HEREIN: 19. WE ARE ALSO OF THE OPINION THAT LD.CIT CAN INIT IATE PROCEEDINGS U/S.263 OF THE ACT ONLY IF NO ENQUIRIES HAS BEEN CONDUCTED BY ASSE SSING OFFICER. LD.CIT CANNOT GIVE SPECIFIC INSTRUCTION TO THE ASSESSING OFFICER TO CHANGE THE MODE OF ENQUIRY OR INTENSIFY ENQUIRY. IF THE ASSESSING OFFICER HAS CAR RIED OUT THE PROCESS USUALLY TAKEN UP IN THE ASSESSMENT PROCEEDINGS AND ASSESSE HAS FILED COMPLETE DETAILS TO THE SATISFACTION OF ASSESSING OFFICER AND LD.AO HAS TAKEN THE PERMISSIBLE VIEW WHICH FINDS IT PLACE IN THE BODY OF ASSESSMENT ORDE R ALSO THAN IT CANNOT BE SAID THAT NO ENQUIRY OR INADEQUATE ENQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER. THAT THE VIEW TAKEN BY LD.AO ACCEPTING THE RETURNED INCOME OF ASSESSEE U/S.143(3) OF THE ACT AFTER ENTERTAINING THE DETAIL ED REPLY OF ASSESSEE, AND IT GETS DUE SUPPORT FROM THE FACT THAT SIMILAR TYPE OF HAS BEEN TAKEN BY LD.CIT(A) IN THE CASE OF ASSESSEE'S FATHER ADJUDICATING SIMILAR FACT S DELETING THE ADDITION MADE BY LD.AO AND HOLDING THE TRANSFER EXPENSES PAID ITA NO .1116/AHD/2014 ASSTT. YEAR 2009-10 TO M/S.PRERNA INFRABUILD LTD. AS GENUINE. T HERE IS NOTHING ON RECORD TO SUGGEST THAT THE VIEW TAKEN BY THE LD.AO IS UNSUSTA INABLE IN LAW. 20. CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF JUDICIAL DECISIONS DISCUSSED ABOVE AND IN OUR UNDERSTANDING OF LAW, WE FIND THAT ASSESSMENT ORDER U/S.143(3) OF THE ACT FRAMED ON 30/08/2011 IS NEITHER ERRONEOU S NOT PREJUDICIAL TO THE INTEREST OF REVENUE. WE THEREFORE SET ASIDE THE IMP UGNED ORDER PASSED BY THE LD.CIT U/S.263 OF THE ACT AND RESTORE THAT OF THE A SSESSING OFFICER DATED 30/08/2011 PASSED U/S.143(3) OF THE ACT. 6. SINCE RELIEF HAS ALREADY BEEN GRANTED BY THE ITAT A S AFORESAID IN FAVOUR OF ASSESSEE. NOW NOTHING REMAINS AGAINST THE ASSESSEE. AS ALREADY MATTER DECIDED IN FAVOUR OF ASSESSEE. THEREFORE APPEAL OF THE REVE NUE IS DISMISSED. ITA NO. 3406/A HD/16 & C.O. 36/AHD/18 . A.Y. 2009-1 0 5 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. C.O. NO. 36/AHD/2018 8. AS WE CAN SEE, RELIEF HAS ALREADY BEEN GRANTED BY U S AND C.O. IS SUPPORTIVE. THEREFORE, SAME IS DISMISSED AS SUPPORTIVE. ORDER PRONOUNCED IN OPEN COURT ON 11- 01- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPYS JUDICIAL MEMBER AHMEDABAD: DATED 11/01/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD