Neeru Malhotra, Bhopal V. The DCIT, 1(1), Bhopal

ITA 343/IND/2012

• Counselvise Citation: 34322714 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM KUNWAR
• Assessee Lawyers: MANOJ AYACHIT
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.343/IND/2012 A.Y. 2008-09 NEERU MALHOTRA, BHOPAL PAN ABZPM 2376 H ... APPELLANT VS DCIT-1(1), BHOPAL ... RESPONDENT ASSESSEE BY SHRI MANOJ AYACHIT REVENUE BY SHRI BHIM KUNWAR DATE OF HEARING 30.10.2013 DATE OF PRONOUNCEMENT 30.10.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE O RDER DATED 22.3.2012 OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)-1, BHOPAL. THE SUM & SUBSTANCE OF THE GRO UNDS OF APPEAL IS THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, 2 THE LD. FIRST APPELLATE AUTHORITY ERRED IN CONFIRMI NG THE ADDITION OF RS.75,30,000/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF UNEXPLAINED INVESTMENT AND ALSO IN REJECTING THE AP PLICATION OF THE ASSESSEE FILED UNDER RULE 46A OF THE I.T. RULES, 19 62. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I MANOJ AYACHIT, LEARNED COUNSEL FOR THE ASSESSEE AND SHRI BHIM KUNWAR, LEARNED SR.DR. AT THE OUTSET, THE LEARNED COUNSEL F OR THE ASSESSEE CONTENDED THAT THE IMPUGNED ISSUE IS COVE RED BY THE DECISION OF TRIBUNAL IN THE CASE OF AJAY NARAN VS. DCIT VIDE ORDER IN ITA NO.226/IND/2012 (AY 2008-09) DATED 22.3.2013 . THIS ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY T HE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE, W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER DATED 22.3.2013: THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 23 RD MARCH, 2012 OF THE LEARNED FIRST APPELLATE AUTHORITY, BHOPAL, ON THE SOLE GROUND THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE 3 ADDITION OF RS. 75,30,000/- IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF SALE OF 15 PLOTS SITUATED AT GANESH NAGAR, BHOPAL, TREATING THE IMPUGNED AMOUNT AS INCOME FROM OTHER SOURCES. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I S.S. DESHPANDE, LEARNED COUNSEL FOR THE ASSESSEE, AND SHRI R.A. VERMA, LEARNED SENIOR DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE COU RT OF VIITH ADDL. DISTRICT JUDGE, BHOPAL, DECLARED THE SALE 15 PLOTS AS INEFFECTIVE DUE TO NON-RECEIPT OF SALE AMOUNT FROM THE PURCHASERS, WHICH WERE REGISTERED PURSUANT TO REGISTERED SALE DEED/AGREEMENTS EXECUTED BETWEEN THE PARTIES. THE LEARNED COUNSEL FILED THE PHOTOCOPY OF THE ORDER DATED 21 ST FEBRUARY, 2013. IT WAS ALSO PLEADED THAT SUIT WAS FILED IN T HE COURT OF ADDL. DISTRICT JUDGE BY THE ASSESSEE AGAIN ST SMT. NEERU MALHOTRA FOR WHICH OUR ATTENTION WAS INVITED TO PAGE 18 ONWARDS OF THE PAPER BOOK. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE CHEQUE ISSUED TO THE PURCHASER HAS NOT BEEN ENCASHED EVEN TILL TODAY, THEREFORE, THE CONSIDERAT ION HAS NOT PASSED. THE COLONY WHERE THESE PLOTS WERE SITUATED WAS ILLEGAL COLONY, THEREFORE, THE CONDITI ONS ENSHRINED IN THE SALE AGREEMENT COULD NOT BE FULFIL LED AS THE SELLER WAS TO GET THE MAP SANCTIONED FOR CONSTRUCTION FROM THE MUNICIPAL AUTHORITIES. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISIONS FROM HONBLE PATNA HIGH COURT IN THE CASE OF SMT. RAJ RANI DEVI RAMNA; 201 ITR 1032 (PAT.) AND CIT VS. VITHALBHAI P.PATEL; 236 ITR 1001 (GUJ.) AND CIT VS. SMT. THRESSIAMMA ABRAHAM; 227 ITR 802 (KER). ON THE OTHER HAND, THE ARGUMENT ON BEHAL F OF THE REVENUE IS TWOFOLD; FIRSTLY THE TRANSFER OF PLOTS HAS ALREADY HAS TAKEN PLACE SINCE POSSESSION HAS BEEN HANDED OVER TO THE PURCHASER AND SECONDLY THE ORDER DATED 21 ST FEBRUARY, 2013 WAS NEVER PRODUCED BEFORE ASSESSING OFFICER/CIT(A), BEING THE NEW DOCUMENT, FILED FOR THE FIRST TIME BEFORE THE TRIBU NAL. 4 IT WAS PLEADED THAT IF AT ALL THIS DOCUMENT IS ACCEPTED, IT MAY BE REMANDED BACK TO THE FILE OF TH E ASSESSING OFFICER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE BY A REGISTERED SAL E DEED SOLD 15 PLOTS OF LAND, SITUATED AT GANESH NAGAR, HOSHANGABAD ROAD, BHOPAL, TO MRS. NEERU MALHOTRA FOR A CONSIDERATION OF RS. 5,02,000/- EACH (TOTAL RS. 75,30,000/-). AS PER CLAUSE AGREED BETWE EN THE PARTIES ENSHRINED IN THE REGISTERED SALE DEED, THE SELLER WAS TO GET THE BUILDING PERMISSION SANCTIONE D FROM BHOPAL MUNICIPAL CORPORATION AND TILL THE TIME SUCH BUILDING PERMISSION IS OBTAINED, THE SELLER SH ALL NOT PRESENT THE CHEQUES FOR REALISATION FROM THE BA NK ACCOUNT OF THE PURCHASER I.E. NEERU MALHOTRA. AS PE R THE ASSESSEE, SUCH PERMISSION COULD NOT BE OBTAINED TILL TODAY, THEREFORE, THE DEED DID NOT MATERIALISE . IN THE ABSENCE OF NON-FULFILMENT OF THE CONDITION, THE MONEY COULD NOT PASS TO THE SELLER. THE CONTENTION OF THE ASSESSEE IS THAT SINCE THE AGREED AMOUNT NEVER EXCHANGED HANDS, THEREFORE, IT IS NOT A VALID TRANS FER OF THE PROPERTY, THEREFORE, THE SALE WAS INCOMPLETE WHEREAS THE STAND OF THE REVENUE IS THAT SINCE AGREEMENT TO SELL HAS ALREADY BEEN REGISTERED BETWEEN THE PARTIES AND POSSESSION HAS BEEN GIVEN, THEREFORE, IT IS A SALE/TRANSFER WITHIN THE AMBIT O F SECTION 2(47) OF THE ACT. WITHOUT ADVERTING FURTHER , THE FACT REMAINS THAT THE ORDER DATED 21.2.2013, AN EX- PARTE ORDER, THAT TOO, WAS NOT AVAILABLE EITHER BEF ORE THE ASSESSING OFFICER OR BEFORE THE LEARNED CIT(A) FOR THEIR PERUSAL AND CONSIDERATION. HOWEVER, IT IS AN ORDER FROM THE HONBLE COURT AND FILED FOR THE FIRS T TIME BEFORE THE TRIBUNAL. KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE AND THE FACTS NARRATED HEREINABOVE, WE REMAND THIS APPEAL TO THE FILE OF T HE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIG HT OF THE ORDER DATED 21 ST FEBRUARY, 2013 FROM THE COURT OF 5 LEARNED ADDITIONAL DISTRICT JUDGE. THE ASSESSING OFFICER IS TO EXAMINE THE CLAIM OF THE ASSESSEE AFT ER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE AS WELL A S TO THE PURCHASING PARTY/PARTIES. THE ASSESSING OFFICER IS ALSO TO EXAMINE WHETHER THE CHEQUE(S) WA S ENCASHED ?. THE ASSESSING OFFICER IS ALSO TO EXAMIN E THE POSITION OF EFFECTIVE/CONSTRUCTIVE POSSESSION O F THE PLOTS. NEEDLESS TO MENTION HERE THAT BEFORE ARRIVING TO A CONCLUSION, THE CONCERNED PARTIES, MO RE SPECIFICALLY THE SELLER AND THE PURCHASER, MAY BE GIVEN OPPORTUNITY OF BEING HEARD. THIS APPEAL IS ALLOWED FOR STATISTICAL PURPOSES ONLY. IN THE AFORESAID CASE OF SHRI AJAY NARANG, THE FACT S ARE THAT SHRI AJAY NARANG VIDE REGISTERED SALE DEED SOLD 15 PLOTS OF LAND, SITUATED AT GANESH NAGAR, HOSHANGABAD ROAD TO MRS. NEERU MALHOTRA FOR A TOTAL CONSIDERATION OF RS.75,30,000/ -. AS PER CLAUSE AGREED BETWEEN THE PARTIES MENTIONED IN THE REGISTE RED SALE DEED, THE SELLER WAS TO GET THE BUILDING PERMISSION SANCTION FROM MUNICIPAL CORPORATION AND TILL SUCH TIME, SUCH BUIL DING PERMISSION IS OBTAINED, THE SELLER WAS NOT TO PRESENT THE CHEQ UES FOR REALISATION FROM THE BANK ACCOUNT OF THE ASSESSEE. KEEPING IN VIEW THE TOTALITY FACTS, IN THE CASE OF AJAY NARANG , THE MATTER WAS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN 6 DIRECTIONS. SINCE THE ASSESSEE IS A PARTY TO IT, TH EREFORE, ON THE SAME REASONING, THIS APPEAL IS ALSO REMANDED BACK T O THE FILE OF THE LD. ASSESSING OFFICER TO DECIDE IN THE LIGHT OF THE DIRECTIONS CONTAINED IN AFORESAID ORDER DATED 22.3.2013. NEEDL ESS TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSESSEE WITH FURTHER LIBERTY TO FURNISH EVIDEN CE, IF ANY, IN SUPPORT OF HER CLAIM. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSI ON OF THE HEARING ON 30.10.2013. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.10.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYAS!