ITO 22(1)-1, NAVI MUMBAI V. DINESH NARAYAN RAI, MUMBAI

ITA 3482/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7708 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 28-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained investment; Capital Gains
• Section: 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI A.L.GEHLOT, AM & SMT. P.MADHAVI DEVI, JM I.T.A.NO.3482/MUM/2009 - A.Y 2005-06 INCOME TAX OFFICER 22(1)-1 MUMBAI SHRI DINESH NARAYAN RAI, F 18, BANSHI, AMRUTNAGAR CO-OP. HSG. SOC. AMRUTNAGAR, GHATKOPAR (W), MUMBAI 400 086 PAN NO.ADMPR 3863 P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI DURGESH SUMROTT. SR.DR ASSESSEE BY : SHRI M. SUBRAMANIAN. O R D E R PER P.MADHAVI DEVI, JM: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST CIT (A)S ORDER DATED 9-3-2009. 2. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE LD. CIT[A] HAS ERRED IN DELETING THE ADDITION OF RS.8 LAKHS MADE BY THE AO U/S.69C OF THE INCOME TAX ACT ON ACCOUNT OF UNEX PLAINED INVESTMENT IN IMMOVABLE PROPERTY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME ON 20-10-2006 DECLAR ING INCOME OF RS.89,690/-. IN RESPONSE TO NOTICES U/S.142(1) AND 143(2) OF THE ACT, ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS. THER EFORE, AO MADE THE ASSESSMENT EXPARTE U/S.144 OF THE ACT ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD. DURING THE SAID PROCEEDINGS, A O OBSERVED THAT DURING THE YEAR ASSESSEE HAS PURCHASED AN IMMOVABLE PROPERTY FOR A 2 CONSIDERATION OF RS.8,00,000/- AS PER THE DOCUMENT REGISTERED WITH THE JOINT SUB-REGISTRAR, KURLA ON 1-6-2004 AND AS DETAI LS OF THE SOURCE OF THE SAID INVESTMENT AND THE NATURE OF POSSESSION ET C., HAVING NOT BEEN FURNISHED, HE TREATED THE SAME AS UNEXPLAINED INVES TMENT AND BROUGHT IT TO TAX WITHIN THE MEANING OF PROVISIONS OF SEC.6 9C OF THE ACT. 4. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE C IT[A] WHO CALLED FOR THE REMAND REPORT FROM THE AO. IN THE RE MAND REPORT, AO OBSERVED THAT THE ASSESSEE HAS TAKEN A HOUSING LOAN OF RS.5 LAKHS ON 24-7-2004 FROM VIJAY BANK, CHEMBUR BRANCH, MUMBAI A ND RS.3 LAKHS FROM ONE MOHAN SHETTY. HE ALSO OBSERVED THAT THE BA NK LOAN STATEMENT IS NOT DULY SIGNED BY THE ACCOUNTANT/MANA GER AND ALSO THAT THE LOAN OF RS.3 LAKHS THOUGH CONFIRMED BY MOHAN SH ETTY, THE ASSESSEE HAS NOT SHOWN THAT THE LOAN HAS BEEN UTILI ZED FOR THE PURCHASE OF THE PROPERTY. THE CIT[A] AFTER CONSIDE RING THE REMAND REPORT AS WELL AS THE ASSESSEES CONTENTION AND THE DOCUMENTS FILED BY HIM OBSERVED AT PARA 2.4 AS UNDER 2.4 I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A SSESSING OFFICER , REMAND REPORT OF THE ASSESSING OFFICER AND THE SUB MISSION OF THE APPELLANT ALONG WITH THE DOCUMENTS SUBMITTED. REGAR DING THE GROUNDS OF APPEAL RAISED BY THE APPELLANT IN HIS APPEAL FIL ED, I FIND THAT THE APPELLANTS CONTENTION EXPLAINING THE INVESTMENT IN THE FLAT AT RS.8 LAKHS ACCEPTABLE. AS REPRODUCED EARLIER IN THE ORDE R, IT IS SEEN THAT THE APPELLANT HAS SOLD HIS OLD FLAT IN A.Y 2004-05 FOR A CONSIDERATION OF RS.8 LAKHS. THIS OLD FLAT HAD BEEN PURCHASED THROUG H A LOAN TAKEN FROM S.B.I AND BEFORE THE SALE OF THE SAME, THE APP ELLANT WAS REQUIRED TO PAY OFF THE LOAN FOR THIS PURPOSE. HE HAD TAKEN A LOAN FROM ONE, MR. MOHAN SHETTY WHO IS HIS RELATIVE AMOUNTING TO RS.3 LAKHS. AFTER PAYING OFF THE LOAN, THE APPELLANT SOLD THE SAID FL AT FOR RS.8 LAKHS, A COPY OF STATEMENT OF TOTAL INCOME FILED WITH THE RE TURN OF INCOME FOR A.Y 2004-05 HAS BEEN SUBMITTED BEFORE ME. THE SAID SALE HAS BEEN DECLARED ALONG WITH CAPITAL GAINS ARISING ON ACCOUN T OF THE SAME. IN THE SAME STATEMENT OF TOTAL INCOME, DEDUCTION U/S.5 4 OF THE I.T.ACT HAS ALSO BEEN CLAIMED ON PURCHASE OF NEW RESIDENTIA L FLAT AT RS.8 3 LAKHS ON 1.6.2004, I.E. IN THE A.Y 2005-06. IN THE COPY OF THE BANK ACCOUNT SUBMITTED, I FIND THE NECESSARY TRANSACTION S HAVE BEEN RECORDED I.E. RECEIPT OF LOAN OF RS.3 LAKHS, FROM S HRI MOHAN SHETTY REPAYMENT OF S.B.I. LOAN OF RS.2,50,553/- AND CONSE QUENT RECEIPT OF RS.8 LAKHS AS A RESULT OF SALE OF FLAT ON 27.10.200 3. THE COPY OF BANK PASS BOOK AS SUBMITTED CANNOT BE DOUBTED AND THEREF ORE, IS BEING ACCEPTED. AS A CONSEQUENCE, THE LOAN TAKEN FROM MR. MOHAN SHETTY THAT HAVE BEEN DOUBTED BY THE ASSESSING OFFICER AL SO STANDS CONFIRMED AND THE ASSESSING OFFICER S MISGIVING TH AT THIS LOAN HAS BEEN UTILIZED FOR SOME OTHER PURPOSE AND NOT FOR TH E PRESENT INVESTMENT OF FLAT WHICH IS UNDER REFERENCE CLARIFI ED. HERE IT IS ALSO MENTIONED THAT THE APPELLANT HAS SUBMITTED A COPY O F THE SALE DEED OF HIS OLD FLAT SOLD IN A.Y 2004-05 TO FURTHER PROVE H IS CONTENTION. REGARDING THE SOURCE OF PRESENT INVESTMENT IN THE N EW FLAT PURCHASED IN A.Y 2005-06, I FURTHER FIND THAT FOR THE BALANCE AMOUNT OF RS.5 LAKHS, THE APPELLANT HAS FILED A CONFIRMATION FROM VIJAYA BANK CHEMBUR BRANCH CONFIRMING THE SAID LOAN TO THE APPE LLANT. THOUGH INITIALLY THIS CONFIRMATION BEFORE THE ASSESSING OF FICER WAS FILED WITHOUT THE COPY OF THE AUTHORISED SIGNATORY/MANAGER, BUT L ATER THE APPELLANT HAS FILED THE CERTIFIED COPY DULY SIGNED BY THE CHI EF MANAGER WHICH CONFIRMS THAT THE LOAN HAS BEEN AVAILED BY THE APPE LLANT IN A.Y 2005- 06. IN VIEW OF THE ABOVE, I FIND THAT THE APPELLANT HAS BEEN ABLE TO PROVE THE SOURCE FROM WHICH HE HAS PURCHASED THE IM MOVABLE PROPERTY. THEREFORE, UNEXPLAINED INVESTMENT OF THE SAME U/S.69C OF THE I.T.ACT AS CONSIDERED BY THE ASSESSING OFFICER DOES NOT HOLD. THE ADDITION MADE ON THIS ACCOUNT IS THEREFORE DELETED, AND THE GROUND OF APPEAL ALLOWED. AGGRIEVED BY THE RELIEF GIVEN BY THE CIT[A] , THE R EVENUE IS IN APPEAL BEFORE US. 5. WHILE THE LD. DR SUPPORTED THE ORDER OF THE AO T HE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE ORDER OF THE CIT[A] AND ALSO PLACED BEFORE US A COPY OF THE REMAND REPORT. 6. HAVING HEARD BOTH THE PARTIES AND HAVING GONE TH ROUGH THE MATERIAL ON RECORD, WE ARE SATISFIED THAT THE ASSES SEE HAS SATISFACTORILY EXPLAINED THE SOURCE OF HIS INVESTMENT AND THE CIT[ A] HAS DELETED THE ADDITION ONLY AFTER VERIFYING THE DETAILS FILED BY THE ASSESSEE AND ALSO AFTER CALLING FOR THE REMAND REPORT OF THE AO. IN V IEW OF THE SAME, WE 4 DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER O F THE CIT[A] AND THE REVENUES GROUND OF APPEAL IS ACCORDINGLY DISMI SSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 12 TH DAY OF FEBRUARY, 2010. SD/- SD/- (A.L.GEHLOT) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI:12 TH FEBRUARY, 2010. P/-* COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI. 5 SR.NO. PARTICULARS DATE INITIALS 1 DRAFT DICTATED ON 9-2-10 P 2 DRAFT PLACED BEFORE AUTHOR 10-2-10 P 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO SR.PS/PS 6 ORDER KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER