ITO 24(2)(3), MUMBAI V. JITENDRA K SHARMA, MUMBAI

ITA 354/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79188 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 10-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: REEPAL TRALSHAWALA
• Keywords: Unexplained investment; Additional evidence
• Section: 143(3)

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI SANJAY GARG, JM ./I.T.A. NO.354/M/2013 ( / ASSESSMENT YEAR: 2009 - 2010 ) ITO - 24(2)(3), R.NO.603, 6 TH FLOOR, PRATYAKSHAKAR BHAVAN, B.K.C. BANDRA, MUMBAI - 400051. / VS. JITENDRA K SHARMA, PROP. MAYUR INDUSTRIES, MURRUMKHAN NAGAR, CHIKUWADI RD, MALWANI CHURCH, MALAD (W), MUMBAI - 400095. ./ PAN : AACPS0472N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MAURYA PRATAP / RESPONDENT BY : SHRI REEPAL TRALSHAWALA / DATE OF HEARING : 10.4.2014 / DATE OF PRONOUNCEMENT : 17 .6.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 11.1.2013 IS AGAINST THE ORDER OF THE CIT (A) - 34, MUMBAI DATED 23.1.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE CIT (A) ERRED IN DELETING THE ADDITION OF RS. 23,49,971/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT WHEN THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF INVESTMENT IN THE PURCHASE OF PROPERTY BY ADMITTING ADDITIONAL EVIDENCE IN CONTRAVENTION TO RULE 46A OF THE IT ACT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ACRYLIC GOODS. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 2,67,500/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. DURING THE ASSESSMENT, BASED ON THE AIR INFORMATION, AO NOTICED THAT THE ASSESSEE PURCHASED AN IMMOVABLE PROPERTY FOR RS. 34,62,768/ - AND CALLED FOR DETAILS. IN THIS REGARD ASSESSEE EXPLAINED THAT EVEN THOUGH THE MARKET VALUE OF THE 2 SAID PROPERTY WAS 34.62 LAKHS, THE COST OF PURCHASE WAS RS. 23,49,971/ - . BUT, BEFORE THE AO, ASSESSEE COULD NOT SUBSTANTIATE T HE SOURCES FOR PURCHASE. NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, AO MADE THE ADDITION AND BROUGHT THE TOTAL AMOUNT OF RS. 23,49,971/ - TO TAX AS UNEXPLAINED INVESTMENT. AGGRIEVED WITH THE SAID DECISION OF THE AO, ASSESSEE CARRIED THE MATTER I N APPEAL BEFORE THE FIRST APPELLATE AUTHORITIES. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE MADE A DETAILED SUBMISSION ALONG WITH PAPER BOOK. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) ALLOWED THE ASSESSEES AP PEAL. PARA 1.4 TO 1.6 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD. AGGRIEVED WITH THE RELIEF GRANTED BY THE CIT (A), REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, SHRI MAURYA PRATAP, LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE HIM. 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE AO. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE ORDER OF THE CIT (A) IN GENERAL, PARA 1.4 TO 1.6 IN PARTICULAR, WE FIND THAT THE SAME ARE RELEVANT WHICH READ AS UNDER: 1.4 . I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSIONS OF THE APPELLANT ALONG WITH THE MATERIAL AVAILABLE ON RECORD. IN SUPPORT OF THE CONTENTION THAT THE PROPERTY WAS PURCHASED FOR A SUM OF RS. 21 LACS, THE COPY OF THE DEED OF PURCHASE DATED 25/7/2008 WAS F URNISHED ALONG WITH THE SUBMISSION. THE PERUSAL OF CLAUSE (8) OF THE DEED CLEARLY INDICATES THAT THE PROPERTY ADMEASURING 54 GUNTAS WAS PURCHASED BY THE APPELLANT FOR A TOTAL CONSIDERATION OF RS. 21 LACS. AS PER THE DEED, THE APPELLANT HAD PAID THE ENTIR E CONSIDERATION BY WAY OF CHEQUE ON VARIOUS DATES STARTING FROM 25/7/2007 TO 6/3/3008. THE CHEQUE NUMBERS WERE ALSO MENTIONED IN THE DEED ITSELF. THE APPELLANT HAD FURNISHED THE DETAILS OF PAYMENTS MADE TO 38 VENDORS SUCH AS DATE, DOCUMENT NUMBER AND AMO UNT. IT WAS SUBMITTED BY THE APPELLANT THAT COPY OF THE REGISTERED DOCUMENT, LEDGER EXTRACT OF THE INVESTMENT WERE SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF. 1.5. (IN FACT, THE VERY SAME PROPERTY WAS SUBSEQU ENTLY SOLD BY THE APPELLANT ON 9.2.2010. COPY OF THE AGREEMENT OF SALE WAS FURNISHED BEFORE ME.) THE APPELLANT RECEIVED ADVANCE OF RS. 20 LACS ON VARIOUS DATES FROM KAMAL KISHORE SHARMA (HUF). 3 COPY OF THE LEDGER EXTRACT WAS FILED BEFORE ME IN SUPPORT OF THIS. THE PERUSAL INDICATE THE ADVANCE WERE RECEIVED ON THE FOLLOWING DATES. DATE CHEQUE NO. AMOUNT 16.12.2008 569320 RS. 10,00,000/ - 29.1.2009 569321 RS. 5,00,000/ - 29.1.2009 569322 RS. 5,00,000/ - 1.6. THE TOTAL AMOUNT AGREED WAS RS. 25 LAKHS. THE ASSESSING OFFICER WHILE ANALYZING THE BALANCE SHEET FOUND THAT ONLY RS. 3,49,971/ - WAS SHOWN AS INVESTMENT AND HENCE SOUGHT CLARIFICATION FROM THE APPELLANT DURING THE COURSE OF ASSESSMENT ITSELF. THE APPELLA NT HAD INFORMED THE AO THAT RS. 20 LAKHS WITHDRAWN FROM THE BANK ACCOUNT FOR THE PURCHASE FROM THE PROPRIETARY CONCERN WAS PAID BACK OUT OF THE ADVANCE RECEIVED TOWARDS SALE OF THE SAME PROPERTY. THE AO WAS NOT CONVINCED WITH THE ABOVE REPLY AND HENCE HE MADE THE ADDITION. COPY OF THE BANK ACCOUNT WAS CALLED FOR BY ME TO SUBSTANTIATE THAT FUNDS TO THE TUNE OF RS. 20 LAKHS WAS TRANSFERRED FROM THE BANK ACCOUNT OF RS. M/S. MAYUR INDUSTRIES, PROPRIETARY CONCERN OF THE APPELLANT , DURING THE APPELLATE PROCEEDI NGS. THE AR HAS FILED COPY OF THE STATEMENT OF ACCOUNT OF ORIENTAL BANK OF COMMERCE FOR THE PERIOD 1.4.2007 TO 31.3.2008 AND CLEARLY MARKED THE PAYMENTS TO THE TUNE OF RS. 20 LAKHS. I HAVE PERUSED THE ABOVE STATEMENT AND THE PURCHASE CONSIDERATION OF RS. 20 LAKHS WAS ENTIRELY PAID OUT OF THIS BANK ACCOUNT ONLY. SINCE, THE PAYMENT WAS MADE BY WAY OF CHEQUE BY THE APPELLANT, THE CONCLUSION DRAWN BY THE AO THAT THE SOURCES OF INVESTMENT HAS NOT BEEN EXPLAINED AND HENCE IT AMOUNTS TO UNEXPLAINED INVESTMENT CA NNOT BE ACCEPTED. SINCE, THE APPELLANT HAD OFFERED DETAILED EXPLANATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSING OFFICER HAS NO REASON TO DISBELIEVE THE SAME. THE GROUND OF APPEAL IS ALLOWED. 8. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY ADJUCIATED THE ISSUE UNDER CONSIDERATION AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL ANY INTERFERENCE. ACCORDINGLY, GROUND RAISE D BY THE REVENUE IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 1 7 T H JUNE, 2014. S D / - S D / - (SANJAY GARG) (D. KARUNAKARA RAO ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 7 .06.2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI