ITO, Muzaffarnagar V. Sh. Pushpendra Kumar, Muzaffarnagar

ITA 3894/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58553 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 06-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Keywords: Business income; Additional evidence
• Section: 54F; 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER ITA NO.3894/DEL./2011 (ASSESSMENT YEAR : 2007-08) ITO, WARD 1, VS. SH. PUSHPENDRA KUMAR, MUZAFFARNAGAR. 160, SOUTH CIVIL LINES, MUZAFFARNAGAR. (PAN/GIR NO.ADJPK2426N) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. RENUKA JAIN GUPTA, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY CIT(A), MUZAFFARNAGAR DATED 16.05.2011 RELEVANT TO ASSESSM ENT YEAR 2007-08 WHEREBY FOLLOWING TWO EFFECTIVE GROUNDS HAVE BEEN RAISED: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.4,18,231/- ON AC COUNT OF LONG TERM CAPITAL GAIN AS THE ASSESSEE IS NOT ENTITLED FOR DE DUCTION U/S 54F OF THE I.T. ACT, 1961 BY IGNORING THE DECISION OF HONBLE APEX COURT IN THE CASE OF RAJA J. RAMESHWAR RAO VS. CIT, 42 I.T.R. 179 (SC) A ND INDERMANI BAI & ANOTHER VS. ADDL.CIT, 200 I.T.R. 594 (SC) WITHOUT A PPRECIATING THE FULL FACTS OF THE CASE. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS6,00,000 /- MADE BY THE ASSESSING OFFICER U/S I.T. ACT, 1961 AS UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT BY IGNORING THE DECISION OF HONBLE APEX CO URT IN THE CASE OF SUMATI DAYAL VS. CIT, 214 I.T.R. 801 AND HONBLE HI GH COURT OF CHATTISGARH IN THE CASE OF KUSHAL PRASAD MANHAR VS. CIT, (2010) 236 CTR 192, WITHOUT APPRECIATING THE FULL FACTS OF THE CAS E. I.T.A. NO.3894/DEL./2011 (A.Y. : 2007-08) 2 2. AS REGARDS FIRST ISSUE, ASSESSING OFFICER DISALL OWED THE CAPITAL GAIN REBATE U/S 54F OF THE I.T. ACT, 1961 ON THE GROUND THAT RETURN WAS FILED U/S 139(4) OF THE I.T. ACT, 1961 AND THUS THE CLAIM OF THE REBATE/DEDUCTION U/S 54F WAS DENIED. THE ASSESSING OFFICER HAS ALSO DENIED THE BENEFIT OF SECTION 54F ON THE GROUN D THAT SALE OF PLOTS TO BE TREATED AS BUSINESS INCOME. 3. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE ON THI S ISSUE AS PER PARA.3.1 OF HIS ORDER AS SUNDER: 3.1 GROUND OF APPEAL NOS.1 & 2 ARE AGAINST ACTION OF THE ASSESSING OFFICER IN DISALLOWING EXEMPTION CLAIMED U/S 54F OF THE ACT ON THE GROUND THAT RETURN WAS FILED U/S 139(4) OF THE ACT. THE FACTS OF THE CASE AS WELL AS SUBMISSIONS MADE B Y THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. IT IS OBSERVED THAT THE IMPUGNED ISSUE HAS BEEN DISCUSSED IN THE PRECEDING PARA. AND IT IS OBSERVED THAT FOR AVAILING EXEMPTION U/S 54F(4) THERE IS NO BAR IN FILING RETURN U/S 139(4) OR 139(1). THE IMPORTANT THING IS THAT THE SALE PROCEEDS MUST BE UTILIZED BEFORE FILI NG OF RETURN U/S 139 OF THE ACT. THE APPELLANT BEFORE FILING OF RETURN U/S 139(4) OF THE ACT ON 28.03.2008 HAD UTILIZED THE SALE PROCEEDS FROM SALE OF PLOTS AND A S SUCH THE APPELLANT WAS ENTITLED FOR EXEMPTION U/S 54F(4) OF THE ACT AGAINST LONG TE RM CAPITAL GAINS EARNED ON SALE OF PLOTS OF LAND. THUS IT IS HELD THAT THE ASSESSI NG OFFICER WAS NOT JUSTIFIED IN ASSESSING SALE PROCEEDS FROM PLOTS UNDER THE HEAD BUSINESS INCOME AND THEREBY MAKING ADDITION OF RS.4,18,231. THE SAME IS DIRECT ED TO BE DELETED. THE ASSESSING OFFICER IS DIRECTED TO GIVE CONSEQUENTIAL EFFECT TO THIS ORDER AND ALLOW CLAIM OF EXEMPTION MADE U/S 54F(4) OF THE ACT AGAIN ST LONG TERM CAPITAL GAIN FROM SALE OF PLOTS AFTER MAKING NECESSARY VERIFICAT ION FROM RECORD. GROUND NOS.1 & 2 ARE ALLOWED. 4. AGGRIEVED BY THIS ORDER OF THE CIT(A), DEPARTMEN T HAS COME UP IN APPEAL AND IT WAS STRONGLY PLEADED THAT DELETION OF IMPUGNED ADDI TION ON ACCOUNT OF LONG TERM CAPITAL GAIN, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U /S 54F OF THE I.T. ACT, 1961 BY IGNORING THE DECISIONS OF HONBLE APEX COURT IN THE CASE OF RAJA J. RAMESHWAR RAO VS. CIT, 42 I.T.R. 179(SC) AND INDERMANI BAI & ANOTHER VS. ADDL .CIT, 200 I.T.R. 594 (SC) WITHOUT I.T.A. NO.3894/DEL./2011 (A.Y. : 2007-08) 3 APPRECIATING THE FULL FACTS OF THE CASE. IT WAS AL SO STRONGLY PLEADED THAT THE ORDER OF THE ASSESSING OFFICER WAS ON DIFFERENT COUNTS SO FAR AS DEDUCTION U/S 54F IS CONCERNED, BUT CIT(A) HAS JUST ALLOWED THE APPEAL BY DELETING THE IMPUGNED ADDITION WITH THE DIRECTION TO THE ASSESSING OFFICER TO GIVE CONSEQUENTIAL EFFE CT TO THIS ORDER AND ALLOWED CLAIM OF EXEMPTION MADE U/S 54F(4) OF THE ACT AGAINST LONG T ERM CAPITAL GAIN FROM SALE OF PLOTS AFTER MAKING NECESSARY VERIFICATION FROM THE RECORD . BUT, HE HAS NOT CONSIDERED THE OTHER ASPECT OF THE ISSUE, WHICH RELATES TREATING THE VAR IOUS TRANSACTION IN SALE OF PLOTS IN THE NATURE OF ADVENTURE IN TRADE BY ASSESSING OFFICER. THEREFORE, SINCE ISSUE IN HAND HAS NOT APPROPRIATELY BEEN DEALT WITH BY CIT(A). THEREFORE , IN ALL FAIRNESS, MATTER SHOULD GO BACK TO THE FIRST APPELLATE AUTHORITY AFTER SETTING ASIDE HIS ORDER WITH THE DIRECTION TO DECIDE ALL THE ASPECTS AND POINTS RAISED WITH REGAR D TO THIS ISSUE. 5. DESPITE SERVICE OF NOTICE (AD ON RECORD), ASSESS EE DID NOT APPEAR NOR ANY REQUEST FOR ADJOURNMENT HAS BEEN RECEIVED. THEREFORE, WE P ROCEED TO DECIDE THE APPEAL EX-PARTE AFTER C CONSIDERING THE ARGUMENTS OF THE LD.DR. 6. AFTER HEARING LD.DR AND CONSIDERING THE MATERIAL ON RECORD, WE FIND THAT BESIDES NOT ALLOWING DEDUCTION U/S 54F ON SALE OF PLOTS, AS SESSING OFFICER HAS TREATED SUCH TRANSACTIONS TO BE IN THE NATURE OF ADVENTURE IN TR ADE WHICH ASPECT HAS NOT BEEN DEALT WITH BY CIT(A). AS SUCH CONSIDERING THE ENTIRELY OF FAC TS, CIRCUMSTANCES AND MATERIAL ON RECORD AND RELEVANT PROVISIONS OF LAW, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK ON HIS FILE WITH THE DIRECTION TO DECID E THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AS WELL AS ASSESSING OF FICER. WE HOLD AND DIRECT ACCORDINGLY. 7. AS REGARDS SECOND ISSUE, ASSESSING OFFICER MADE ADDITION OF RS.6 LAKHS BY TREATING DEPOSIT WITH SHRI UMESH KUMAR GARG U/S 68 OF THE I.T. ACT, 1961 AND IN APPEAL IT I.T.A. NO.3894/DEL./2011 (A.Y. : 2007-08) 4 WAS SUBMITTED THAT CONFIRMED COPY OF ACCOUNT OF SHR I UMESH KUMAR GARG WAS FILED AT THE TIME OF ASSESSMENT. THUS, THE ADDITION MADE I S AGAINST LAW AND FACTS OF THE CASE WHICH MAY BE DELETED. 8. BEFORE CIT(A) CERTAIN FURTHER DOCUMENTS WERE FUR NISHED, AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER, REPLY OF THE ASS ESSEE, HAS CONCLUDED TO DELETE THE IMPUGNED ADDITION AS PER SECOND PARA. ON PAGE 23 OF HIS ORDER. 9. AGGRIEVED BY THIS ORDER OF CIT(A), DEPARTMENT HA S COME UP IN APPEAL AND IT WAS SUBMITTED THAT CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.6 LAKHS MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT BECAUSE THE DEP OSITS REMAIN UNEXPLAINED AND CIT(A) HAS ALSO IGNORED THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF SUMATI DAYAL VS. CIT, 214 I.T.R. 801 AND HONBLE HIGH COURT OF CHATT ISGARH IN THE CASE OF KUSHL PRASAD MANHAR VS. CIT (2010) 236 CTR 192 WITHOUT APPRECIAT ING THE FULL FACTS. SO, IT WAS PLEADED FOR SETTING ASIDE THE ORDER OF CIT(A) AND R ESTORING THAT OF THE ASSESSING OFFICER IN THIS REGARD. 10. THERE WAS NO APPEARANCE ON BEHALF OF THE ASSESS EE AND AFTER HEARING LD.DR. AND CONSIDERING THE MATERIAL ON RECORD, WE FIND THAT CI T(A) HAS DELETED THE IMPUGNED ADDITION AFTER DRAWING HIS CONCLUSION AS PER LAST PORTION OF PARA.3.3.3 ON PAGE 23 OF HIS ORDER AS UNDER: THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE APP ELLANT, REMAND REPORT OF THE ASSESSING OFFICER AND REJOINDER OF THE APPELLANT HA VE BEEN CAREFULLY CONSIDERED. IT IS OBSERVED THAT THE APPELLANT HAS FURNISHED HIS COPY OF BANK ACCOUNT S.B. ACCOUNT NO.0100104484 WITH PUNJAB NATIONAL BANK WHI CH REVEALS THAT CHEQUE NO.235063 DATED 17.01.2007 AMOUNTING TO RS.6,00,000 /- WAS ISSUED IN FAVOUR OF SH. UMESH KUMAR GARG WHICH WAS CREDITED IN HOUSING LOAN ACCOUNT NO.20050024. THE APPELLANT HAS ALSO FILED COPY OF AFORESAID BANK ACCOUNT OF SH. UMESH KUMAR GARG WHICH REFLECTS THE TRANSACTION. S H. UMESH KUAMR GARG FROM HIS S.B. ACCOUNT NO.0139513 WITH PUNJAB NATIONAL BA NK, NEW DELHI VIDE CHEQUE NO.652348 DATED 01.02.2007 REPAID THE DEPOSI T OF RS.6 LAKH TO THE I.T.A. NO.3894/DEL./2011 (A.Y. : 2007-08) 5 APPELLANT WHICH WAS CREDITED IN THE BANK ACCOUNT NO .0100104484 WITH PUNJAB NATIONAL BANK, NEW DELHI. THE APPELLANT HAS FURNIS HED COPY OF AFORESAID BANK ACCOUNTS WHICH REFLECTS THE TRANSACTIONS. REGARDIN G THE CHEQUE NO.139755 DATED 15.01.2007 AMOUNTING TO RS.6 LAKHS ISSUED IN FAVOUR OF SH. UMESH KUMAR GARG WHICH BOUNCED DUE TO INADEQUATE FUNDS, IT IS OBSERV ED THAT THE DEED OF PLOT NO.31, BLOCK FE, MEASURING 70 SQ. MTS. SITUATED AT SHIVAJI ENCLAVE, NAJAFGARH ROAD, NEW DELHI. THE APPELLANT HAS FURNISHED COPY OF REG ISTERED LEASE DEED WHICH REVEALS THAT THE AFORESAID PERSON HAD ISSUED CHEQUE NO.13975 DATED 15.01.207 DRAWN ON LORD KRISHNA BANK, RAJOURI GARDEN, NEW DEL HI AND THE SAME HAS BEEN MENTIONED IN THE AFORESAID LEASE DEED. THUS THE AS SESSING OFFICER IS FACTUALLY INCORRECT IN HOLDING THAT ADVANCE OF RS.6 LAKHS TO SH. UMESH KUAMR GARG REMAINED UNPAID TILL 31.03.2007. AS DISCUSSED ABOV E THE APPELLANT HAD GIVEN THE IMPUGNED SUM DURING THE YEAR ON 17.01.2007 WHICH WA S SUBSEQUENTLY REPAID BY SH. UMESH KUMAR GARG ON 01.02.2007. THUS IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.6 LAKHS. THE SAME IS DIRECTED TO BE DELETED. GROUND NO.4 IS ALLOWED. 11. AFTER GOING THROUGH THE CONCLUSION AS DRAWN BY CIT(A), IN VIEW OF FACTS, CIRCUMSTANCES AND MATERIAL ON RECORD, WE ARE CONVIN CED THAT THE CIT(A) PASSED A VERY REASONED AND APPROPRIATE ORDER. LD.DR. COULD NOT P LACE ANY ADDITIONAL EVIDENCE OR MATERIAL ON RECORD TO CONVINCE US TO TAKE A DIFFERE NT VIEW THAN TAKEN BY THE CIT(A) IN THIS REGARD. AS SUCH WHILE CONCURRING WITH THE FINDING OF CIT(A), WE UPHOLD HIS ORDER WITH REGARD TO SECOND ISSUE AND DISMISS THIS GROUND OF A PPEAL OF THE REVENUE. 12. AS A RESULT, THE APPEAL OF THE DEPARTMENT IS PARTLY ACCEPTED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT SOON AFTER THE CONCL USION OF THE HEARING ON 06.02.2012. SD/- SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : FEBRUARY 06, 2012 SKB I.T.A. NO.3894/DEL./2011 (A.Y. : 2007-08) 6 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A), MUZAFFARNAGAR. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT