Vivek Shreeratan Daga, Nagpur V. Assistant Commissioner of Income-Tax Circle-5, Nagpur

ITA 36/NAG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1400 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 29-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS
• Keywords: Income from undisclosed sources; Opportunity of being heard; Cost of acquisition
• Section: 143(3); 153A; 133(6); 263

Judgement Text

1 ITA NO. 36/NAG/2013. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 36 /NAG/2013. ASSESSMENT YEAR : 2005 - 06. VIVEK SHREERATAN DAGA, ASSTT. COMMISSIONER OF INCOME - TAX, NAGPUR. VS. CIRCLE - 5, NAGPUR. PAN ABHPD8381P. APPELLANT. RESPONDENT. APPELLANT BY : SHRI K.P. DEWANI. RESPONDENT BY : SMT. AGNES P. THOMAS. DATE OF HEARING : 09 - 08 - 2016 DATE OF PRONOUNCEMENT : 10 TH AUGUST, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 01 - 11 - 2012 AND PERTAINS TO ASSESSMENT YEAR 2005 - 06. GROUNDS OF APPEAL READ AS UNDER : 1. THE INCOME ASSESSED AT RS.19,90,000/ - UNDER THE HEAD INCOME FROM OTHER SOURCES IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), NAGPUR OUGHT TO HAVE ADMITTED THE ADDITIONAL GROUNDS AS RAISED IN APPELLATE PROCEEDINGS AS REV ENUE HAS ASSESSED ENTIRE CAPITAL GAIN AT THE HANDS OF SHRI SHREERATAN DAGA (HUF) IN RESPECT OF BIKANER PROPERTY. 3. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), NAGPUR ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER AT RS.19,90,000/ - UND ER THE HEAD INCOME FROM OTHER SOURCES AND ASSESSMENT OF CAPITAL GAIN AT RS. NIL. 2 ITA NO. 36/NAG/2013. 4. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), NAGPUR ERRED IN HOLDING THAT BANK DEPOSIT IN THE CASE OF APPELLANT REMAINS UNEXPLAINED AND IS LIABLE TO BE ASSESSED TO TAX. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : IN THIS CASE THE AO TO VERIFY THE DEPOSIT OF RS. 22 LACS IN THE BANK CALLED FOR INFORMATION UNDER SECTION 133(6) FROM THE BANK. THE UNION BANK OF INDIA, CIVIL LINES , BR. NAGPUR DTD. 27 - 12 - 2007 HAS FURNISHED THE DE POSIT SLIPS PERTAINING TO THE TRANSACTIONS OF VARIOUS DATES MADE BY THE ASSESSEE DURING THE RELEVANT PERIOD. FROM THE SCRUTINY OF THE DEPOSIT SLIPS IT IS REVEALED THAT ALL THE AMOUNTS ARE TRANSFERRED FROM DIFFERENT LOCAL BANKS AND MOSTLY FROM THE CO - OP BAN KS IN AND AROUND AT NAGPUR. 3. CONSIDERING THE ABOVE FACTS, IT IS INFERRED BY THE AO THAT NO GENUINE TRANSACTION AS STATED BY THE ASSESSEE HAS TAKEN PLACE AND CONSIDERATION RECEIVED ARE MANIPULATED BY THE ASSESSEE FROM HIS UNACCOUNTED MONEY AS IS EVIDENT FROM THE DEPOSITS MADE IN THE UNION BANK OF INDIA, CIVIL LINES, NAGPUR. THEREFORE, THE AO HELD THAT THE PROPERTY IN QUESTION WAS SOLD FOR A CONSIDERATION OF RS.21,00,000/ - AS ADMITTED BY THE AGENT JATANLAL SEVAG IN WHOSE FAVOUR POWER OF ATTORNEY WAS EXECUT ED BY THE ASSESSEE. IN VIEW OF THE ABOVE, THE AO STATED THAT IT IS REASONABLE TO BELIEVE THAT THE ASSESSEE COULD NOT HAVE RECEIVED RS.22,00,000/ - , AS SHARE IN THE PROPERTY AS CLAIMED BY HIM, WHEN THE ENTIRE PROPERTY IS SOLD FOR RS.21,00,000/ - . THUS THE AO HELD THAT THE ASSESSEES ONE - TENTH SHARE FROM THE ABOVE TRANSACTION COMES TO RS.21,00,000/ - AND THE REMAINING AMOUNT OF RS.19,90,000/ - IS TREATED AS INCOME FROM UNEXPLAINED SOURCES. 4. BEFORE THE LEARNED CIT(APPEALS) THE ASSESSEE, INTER ALIA, SUBMITTED TH AT THE ACTION U/S 263 HAD BEEN TAKEN IN THE CASE OF SHRI SHREERATAN JAMNADAS DAGA, HUF AND IN THE CONSEQUENT PROCEEDINGS THE SALE PROCEEDS OF RS.66 LAKHS WAS 3 ITA NO. 36/NAG/2013. ASSESSED IN THE HANDS OF THE SAID HUF AND THE SAID HUF HAD AGREED AND CONSENTED FOR THE SAME. HENC E THE ASSESSEE PLEADED THAT THE ADDITION IN THE HANDS OF THE ASSESSEE BE DELETED. 5. CONSIDERING THE ABOVE, THE LEARNED CIT(APPEALS) HELD S UNDER : FROM THE ORDER, IT IS SEEN THAT THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN IS ONLY RS.2,10,000/ - AN D THE INDEX COST OF ACQUISITION IS TAKEN AFTER CONSIDERING THE VALUE OF PROPERTY AT RS.1 LAKHS. THE AO HAS ADOPTED THIS AFTER ENQUIRY AS MENTIONED IN THE ASSESSMENT ORDER. THE APPELLANT AT THE TIME OF APPELLATE PROCEEDINGS, APART FROM STATING THAT THE AMOU NT RECEIVED ON SALE OF PROPERTY IS ADDED IN THE CASE OF SHREERATAN J. DAGA (HUF) AND THEREFORE, NO ADDITION IS CALLED FOR IN THE HANDS OF THE ASSESSEE. FROM THE ASSESSMENT ORDER IT IS SEEN, THAT ONLY AMOUNT OF RS.2,10,000/ - HAS BEEN CONSIDERED AS SALE PROC EEDS OF PROPERTY. THUS, THE DELETION OF ADDITION IS ONLY OF ACADEMIC VALUE AND NO INTERFERENCE ON THIS ACCOUNT AS IT HAS NO REVENUE IMPLICATION IS CALLED FOR. THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE TO CONTROVERT THE FINDING OF THE AO THAT ADDITION OF RS.19,90,000/ - IS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES AS PER FINDING OF THE AO. IN VIEW OF THIS, THE CLAIM OF THE APPELLANT IS DISMISSED. 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE HAD MADE THE FOLLOWING SUBMISSIONS : A) REGULAR ASSESSMENT U/S 143(3) IS COMPLETED ON 22/12/2007. U/S 143(3) DETERMINING TOTAL INCOME AT R S .24,05,799/ - BY ACIT, CIRCLE - 5, NAGPUR. B) PROPERTY AT BIKANER BELONGING TO FAMILY WAS TRANSFERRED THROUGH SHRI JATANLAL SEWAG FOR WHICH TOTAL CONSIDERATION WAS RECEIVED AT RS.66 LACS AND SAME WAS SHARED BY ASSESSEE AT R S .22 LACS AND BY BROTHER SHRI ADARSH OAGA AND SHREERATAN OAGA '(HUF) AT RS. 22 LACS EACH. C) THE SUM OF R S .22 LACS RECEIVED BY ASSESSEE WAS SUBJECTED TO TAX 4 ITA NO. 36/NAG/2013. AS RS.2,1 0,000/ - UNDER THE HEAD CAPITAL GAIN AND R S .19.90 LACS AS INCOME FROM OTHER SOURCES. D) IN THE CASE OF SHREERATAN D AGA (HUF) ASSESSMENT WAS FRAMED ON 31/12/2007 ON SAME TINES AS IN THE CASE OF ASSESSEE ON 22/12/2007. THE ORDERS PASSED U/S 143(3) ARE SIMILARLY WORDED. E) CIT - I U / S 263 OF I T. ACT 1961 IN THE CASE OF SHREERATAN D AGA (HUF) ISSUED NOTICE ON 25/08/2009 . PROPOSED TO SET ASIDE THE ASSESSME NT TO VERIFY THE TRANSACTION OF SALE OF BIKANER PROPERTY. F) ORDER U / S 263 OF I T. A CT 1961 HAS BEEN PASSED ON 24/09/2009 IN THE CASE OF SHREERATAN D AGA (HUF) AND ASSESSMENT WAS RESTORED TO FILE OF A O . FOR EXAMIN IN G THE TRANSACTION OF RS.66 LACS OF WHICH ASSESSEE WAS BENEFICIARY AT RS.22 LACS. G) REGULAR ASSESSMENT FRAMED U / S 143(3) IN THE CASE OF SHREERATAN D AGA (HUF) COMPLETED ON 30/12/2010 AND ENTIRE SALE CONSIDERATION OF RS.66 LAC S CONSIDERED FOR CAPITAL GAIN AT THE HANDS OF SHREERATAN D AGA (HUF). OUT OF WHICH ASSESSEE WAS IN RECEIPT OF RS.22 LACS. H) THE SUM OF RS.22 LAC S RECEIVED BY ASSESSEE ALREADY HAVING BEEN CONSIDERED AS INCOME AT THE HANDS OF SHREERATAN D AGA (HUF) SAME CANNOT BE SUBJECT TO TAX AT THE HANDS OF ASSESSEE. IT IS ELEM ENTARY PRINCIPLE OF LAW THAT SAME AMOUNT CANNOT BE ASSESSED TO TAX TWICE. I) IN THE CASE OF ASSESSEE ASSESSMENT IS FRAMED U / S 153A /1 43(3) ON 23 / 12/2011 WHEREIN NO ADDITION WAS MADE BY A O AS MADE IN REGULAR ASSESSMENT PROCEEDINGS. IN OUR HUMBLE UNDERSTANDING TRANSACTION OF RS.66 LACS WAS ACCEPTED BY A O . IS SUBSEQUENT 5 ITA NO. 36/NAG/2013. SEARCH PROCEEDINGS AND THUS ADDITION MADE AT THE HANDS OF ASSESSEE IS UNJUSTIFIED AND UNSUSTAINABLE. 8. PER CONTRA LEARNED D.R. RE LIED UPON THE ORDERS OF THE LEARNED CIT(APPEALS). HE PLEADED THAT THE AO HAS FOUND DEPOSITS IN ASSESSEES BANK ACCOUNTS LOCALLY AT NAGPUR FROM VARIOUS PLACES. THE AO HAS ONLY CONSIDERED RS.2,10,000/ - AS SHARE OF THE RECEIPT FROM SALE OF PROPERTY WHICH HAS NOW BEEN ADDED BY THE AO IN THE HANDS OF THE HUF. HENCE THE LEARNED D.R. PLEADED THAT THERE IS NO JUSTIFICATION FOR DELETION OF THE ADDITION OF RS.19,90,000/ - WHICH THE AO HAS FOUND TO BE DEPOSITED IN ASSESSEES BANK ACCOUNT FROM UNDISCLOSED SOURCES. 9. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. I FIND THAT THE ORDER OF THE AO IN THE CASE OF THE HUF H AS ASSESSED THE ENTIRE GAIN ON THE SALE OF THE PROPERTY IN THE HANDS OF SHRI SHREERATAN J. DAGA , HUF . THIS IS ON AGREEMENT AND CONSENT OF THE ASSESSEES COUNSEL BASIS. OUT OF THE UNDISCLOSED AND UNEXPLAINED BANK DEPOSITS ADDED IN THE HANDS OF THE ASSESSEE ONLY RS.2,10,000/ - HAS BEEN ADDED BY THE AO IN THIS CASE ON THAT ACCOUNT . THE ASSESSEE HAS NOT BEEN ABLE TO DISCLOSE THE SOURC E OF OTHER BANK DEPOSITS. BEFORE THE ITAT ALSO THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY EXPLANATION FOR THE DEPOSITS IN THE BANK EXCEPT CLAIMING THAT THE GAIN FOR THE SALE OF PROPERTY IS TO BE ADDED IN THE HANDS OF HUF AND NOT THE ASSESSEE. I FIND THAT T AXING THE CAPITAL GAIN AND EXPLAINING DEPOSITS IN BANK ACCOUNT ARE TWO SEPARATE ISSUES. NEVERTHELESS SINCE THE AO IN THE ASSESSMENT HAS TREATED A PART OF DEPOSIT AS ARISING OUT OF SALE OF THE SAID PROPERTY, INTEREST OF JUSTICE DEMANDS THAT THE ASSESSEE BE GIVEN A CHANCE TO SUBSTANTIATE ITS CASE BEFORE THE AO, AFTER THE AFORESAID ORDER IN THE CASE OF HUF. ACCORDINGLY THE ISSUE IS REMITTED TO THE FILE OF THE AO TO CONSIDER THE CASE AFRESH AFTER GIVING THE ASSESSEE FURTHER OPPORTUNITY OF BEING HEARD. 6 ITA NO. 36/NAG/2013. 11. IN THE RESULT, THIS APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF AUGUST,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 10 TH AUGUST, 2016. COPY FORWARDED TO : 1. VIVEK SHREERATAN DAGA, C/O M/S AGARWAL CHHALLANI & CO., 51/A, GROUND FLOOR, NEW COLONY, BEHIND CHHAONI NPOLICE CHOWKY, NAGPUR - 440 001. 2. A.C.I.T., CIRCLE - 5 , NAGPUR. 3. C.I.T. - I I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.