Sita Ram, Meerut V. ITO, War4d-1(5), Baraut

ITA 3924/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7346 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained cash credit; Principle of natural justice; Tangible material
• Section: 54F; 68; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3924/DEL/2018 ASSESSMENT YEAR: 2009-10 SITA RAM C/O MALIK & CO., 305/7, THAPAR NAGAR MEERUT UTTAR PRADESH (PAN: DIEPS1956Q) VS. ITO, WARD 1(5), BARAUT (APPELLANT) (RESPONDENT) ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 19.3.2018 PASSED BY THE LD. CIT(A), MEERUT RELATIN G TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THE ASSESSMENT MADE BY THE AO IS NULL AND VOID. NATURAL JUSTICE HAS BEEN VIOLATED. 2. THE INITIATION OF PROCEEDINGS U/S. 148 ARE VOID, ILLEGAL AND WITHOUT JURISDICTION. 3. A) THE LD. CIT(A) AFTER ADMITTING THE FACTS, HAS ADJUDICATED THAT THE PROPERTY IN QUESTION DOES NOT ASSESSEE BY SH. SANAY MALIK, ADV. DEPARTMENT BY SH. SL ANURAGI, SR. DR. 2 BELONG TO ASSESSEE, HE HAS ADMITTED THAT PROPERTY BELONG TO THE FAMILY OF SH. RAMBAKSH. HENCE ADDITION AMOUNTING TO RS. 4,05,893/- AS HALF SHARE OF CAPITAL GAIN IN THE HAND OF THE ASSESSEE IS BAD IN LAW AND NEED TO BE DELETED. (B) THE CALCULATION OF LONG TERM CAPITAL GAIN IS NOT AS PER LAW AND AGAINST THE FACTS OF THE CASE. THE ADDITION ON THAT PART NEED TO BE DELETED. 4. THE LD. CIT(A) FURTHER SPECIFIED THAT REOPENING OF THE CASE ON ACCOUNT OF CASH DEPOSIT AND NOT OF SALE OF PROPERTY. THUS ADDITION ON THE SCORE IS ALSO ILLEGAL AND IT IS PRAYED THAT THE ASSESSMENT MAY BE ANNULLED. 5. THE ADDITION OF RS. 1,00,000/- SUSTAINED BY THE LD. CIT(A) IS NOT TENABLE AND NEED TO BE QUASHED. THE CASH FLOW STATEMENT FILED WAS DULY EXPLAINED. 6. THE ASSESSEE HAS RESERVE THE RIGHT TO FILE ADDITIONAL GROUND DURING THE APPELLATE PROCEEDINGS. 2. THE BRIEF FACTS OF THE CASE ARE THAT AN INFORMA TION ON AIR HAS BEEN RECEIVED THAT THERE IS CASH DEPOSIT OF RS. 3,00,80, 000/- IN THE NAME OF THE ASSESSEE AND RS. 1,49,00,000/- IN THE BANK ACCO UNT OF ASSESSEES DAUGHTER KUMARI POONAM DURING THE FY 2008-09. ACCOR DINGLY, VERIFICATION 3 LETTER WERE ISSUED TO THE ASSESSEE. IN COMPLIANCE T O WHICH, ASSESSEE FILED COPY OF BANK STATEMENT AND SALE DEEDS. ON PERUSAL OF THE BANK STATEMENT, AO FOUND THAT THERE IS A MISTAKE OF ZE RO IN AIR REPORTING, I.E. THE AMOUNT OF RS. 3,00,80,000/- WAS INFACT IS RS. 30,80,000/- AND IN THE BANK ACCOUNT OF HIS DAUGHTER THE AMOUNT OF RS. 1,49,00,000/- WAS IN FACT RS. 14,90,000. ASSESSEE FURTHER SUBMITTED THAT THE CASH DEPOSIT OF RS. 30,08,000/- IN HIS ACCOUNT AND RS. 14,90,000/- IN THE ACCOUNT OF HIS DAUGHTER KUMARI POONAM, WAS MADE OUT OF SALE PROCE EDS OF AGRICULTURAL LAND AND PLOTS BY THE ASSESSEE. ALONGWITH THE SUBMI SSIONS, ASSESSEE FILED THE COPY OF SALE DEEDS FOR THE SALE OF AGRICULTURAL LANDS AND PLOTS. SINCE THE ASSESSEE HIMSELF ADMITTED THAT THE CASH DEPOSIT ED IN THE ACCOUNT OF HIS DAUGHTER, BELONG TO THE ASSESSEE, THE AIR PROCE EDING AGAINST HIS DAUGHTER WAS DROPPED, AND THE TOTAL AMOUNT DEPOSITE D IN BOTH THE ACCOUNTS WAS TAKEN FOR VERIFICATION IN THE HANDS OF THE ASSESSEE. AO ON PERUSAL OF THE SALE DEEDS SUBMITTED BY THE ASSESSE E, HAS OBSERVED THAT TOTAL CONSIDERATION RECEIVED AS PER THE SALE DEEDS IS RS. 23,50,000/-, BUT THE CASH ACTUALLY DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT AND THE BANK ACCOUNT OF HER DAUGHTER KUMARI POONAM WAS RS. 44,98,000/- I.E. RS. 30,80,000 PLUS RS. 14,90,000/-. THEREFORE, THE DIFFERENCE BETWEEN SALE CONSIDERATION AND THE TOTAL AMOUNT DEPOSITED R S. 21,48,000/- (RS. 44,98,000 LESS RS. 23,50,000) STANDS REMAIN UN EXPLAINED. ACCORDINGLY, THE AO HELD THAT THE TOTAL SALE CONSID ERATION RECEIVED BY THE ASSESSEE DURING THE FY 2008-09 IS RS. 25,50,000/- A LTHOUGH THE CASH DEPOSITED BY HIM IN HIS OWN ACCOUNT AND THE ACCOUNT OF HIS DAUGHTER IS 4 RS. 44,98,000/-. THEREFORE, THE BALANCE RS. 19,48,0 00/- (RS. 44,98,000 LESS RS. 25,50,000) REMAINS UNEXPLAINED AND ADDED T O THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT AS PER THE PROV ISION OF SECTION 68 OF THE I.T. ACT. AO FURTHER OBSERVED THAT ON PERUSAL OF THE PURCHASE DEED SUBMITTED BY THE ASSESSEE IT IS FOUND THAT THE ASSE SSEE HAD INVESTED THE AMOUNT OF CONSIDERATION SO RECEIVED IN THE PURCHASE OF THE SO CALLED RESIDENTIAL PLOTS AND NOT RESIDENTIAL HOUSE PROPERT Y AS MENTIONED UNDER SECTION 54F OF THE ACT. THEREFORE, THE EXEMPTION SO CLAIMED BY THE ASSESSEE IS NOT ALLOWED TO HIM. THEREFORE, THE AO DISALLOWED THE LONG TERM CAPITAL GAIN OF RS. 8,11,786/- AND ADDED THE S AME TO THE INCOME OF THE ASSESSEE AND ACCORDINGLY, ASSESSED THE INCOME O F THE ASSESSEE AT RS. 27,59,786/- VIDE ORDER DATED 30.12.2016 PASSED U/S . 144/147 OF THE ACT. AGAINST THE ASSESSMENT ORDER, ASSESSEE APPEALE D BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 19.3.2018 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE IM PUGNED ORDER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS STATED LD. CIT(A) HAS ADJUDICATED THAT THE PROPERTY IN QUESTIO N DOES NOT BELONG TO ASSESSEE, HE HAS ALSO ADMITTED THAT PROPERTY BELONG TO THE FAMILY OF SH. RAM BAKSH. HENCE, THE ADDITION AMOUNTING TO RS. 4,0 5,893/- AS HALF SHARE OF CAPITAL GAIN THE HAND OF THE ASSESSEE NEED S TO BE DELETED. HE FURTHER SUBMITTED THAT THE CALCULATION OF LONG TER M CAPITAL GAIN IS NOT AS PER LAW AND AGAINST THE FACTS OF THE CASE. HE FURT HER SUBMITTED THAT THE REOPENING OF THE CASE ON ACCOUNT OF CASH DEPOSIT AN D NOT OF SALE PROPERTY. 5 THUS ADDITION ON THE SCORE IS ALSO ILLEGAL AND PRAY ED THAT THE ASSESSMENT MAY BE ANNULLED. IT WAS FURTHER SUBMITTED THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) AMOUNTING TO RS. 1,00,000/- IS NOT T ENABLE, BECAUSE IN THE CASH FLOW STATEMENT FILED WAS DULY EXPLAINED. HE FURTHER SUBMITTED THAT AFTER SELLING OF THE POT THE ASSESSEE WAS ALSO PU RCHASED ANOTHER PLOT, ON THE BASIS OF THIS DEDUCTION U/S. 54F OUGHT TO BE AL LOWED BUT THE SAME WAS NOT ALLOWED BY THE AO. THE AO DOES NOT HAVE ANY TAN GIBLE MATERIAL AND INFORMATION WAS TOTALLY BASED ON AIR. NOTHING WAS S HOWN IN THE REASON REQUIRED TO BE RECORDED, HE DOES NOT HAVE ANY CONCR ETE MATERIAL IN HIS REASONS. IN SUPPORT OF HIS CONTENTION, HE RELIED U PON THE CASE LAWS:- - AMRIK SINGH VS. ITO (2016) 70 TAXMANN.COM 26 (A MRITSAR TRIB.) - KARNATKA BANK LTD. VS. SECRETARY, GOVT. OF INDIA (2002) 123 TAXMAN 219 (SC). - DBS FINANCIAL SERVICES (P) LTD. SMT. M. GEORGE (1994) 74 TAXMAN 640 (BOM) - BIR BAHADUR SINGH SIJWALI VS. ITO (2015) 53 TAXMA NN.COM (DELHI TRIB.) - TAJENDRA KUMAR GHAIV VS. ITO ITA NO. 970 & 971/20 17 DECIDED ON 7.6.2017 0 ITAT, DELHI BENCH. - CIT VS. KELVINATOR OF INDIA LTD. (2010) 187 T AXMANN 312 (SC). 6 - CIT, JABALPUR VS. S. GOYANKA LIME AND CHEMICALS L TD. (2015) 56 TAXMANN.COM (MP) HIGH COURT. - CIT, JABALPUR VS. S. GOYANKA LIME AND CHEMICALS L TD. (2015) 64 TAXMANN.COM (SC). - INDER SINGH VS. ITO ITA NO. 1931/DEL/2016. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS ESPECIALLY THE IMPUGNED ORDER. AS REGARDS INITIATION OF PROCEEDI NGS U/S. 148 OF THE ACT IS CONCERNED, I FIND THAT APPROVAL GIVEN BY THE LD . PR. CIT IN THIS CASE IS VERY MUCH ON THE RECORD AND THERE IS NO INFIRMITY. WITH REGARD TO TANGIBLE MATERIAL, IT IS NOTED THAT THE AO HAD ISSU ED QUERY LETTERS IN RESPONSE TO WHICH THE THEN AR HAD FILED SALE DEEDS AND BANK STATEMENTS FROM WHERE THE AO NOTED THE MISTAKE OF AN EXTRA Z ERO WHICH HE DISCUSSED IN THE BODY OF HIS ORDER. IT IS ONLY AF TER EXAMINING THE TANGIBLE MATERIAL THAT THE AO HAS DROPPED THE PROCEEDINGS AG AINST THE DAUGHTER OF THE ASSESSEE AND HAS TAKEN ACTION U/S. 147/148 AGA INST THE ASSESSEE. HENCE, LD. CIT(A) HAS RIGHTLY DISMISSED THIS GROUND , WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, THEREFORE, WE UPHOLD T HE SAME AND REJECT THE GROUND RAISED BY THE ASSESSEE. 7 5.1 AS REGARDS ADDITION OF RS. 4,05,893/- IS CONCER NED, I FIND THAT THE PLOT HAS BEEN REGISTERED IN THE NAME OF RAM BAKSH WHO IS FATHER OF THE ASSESSEE. SIMILARLY, THE SALE DEED HAS BEEN EXECUTE D BY RAM BAKH AND HIS SON SITA RAM. FROM THESE DOCUMENTS, IT IS CLE AR THAT THE OWNERSHIP IN THE PROPERTY WAS OF RAM BAKH AND IN THE SALE D EED ONLY THE NAME OF THE ASSESSEE IS THERE AS SECOND PARTY. IN THE AFF IDAVIT OF ASSESSEES FATHER HAS CLAIMED THAT IMPUGNED PROPERTY (PLOT) BE LONGED TO HUF AND GOT MUTATED IN THE NAMES OF ASSESSEE AND HIS FATH ER. HENCE, THE CLAIM OF 54F WHICH WAS MADE IN THE ASSESSMENT PROCEEDINGS CANNOT BE GIVEN TO THE ASSESSEE AS THE PROPERTY HAS BEEN PURCHASED BY RAM BAKSH THE FATHER OF THE ASSESSEE AND NOT THE ASSESSEE. ACCOR DINGLY, THE AO WAS RIGHTLY DIRECTED TO REWORK THE CAPITAL GAINS ACCORD INGLY, WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD T HE ACTION OF THE LD. CIT(A) AND REJECT THE GROUND RAISED BY THE ASSESSEE . 5.2 AS REGARDS SUSTAINING OF ADDITION OF RS. 1,00, 000/- IS CONCERNED, IT IS NOTED THAT THE ONLY ISSUE WHICH STANDS OUT IS TH E OPENING CASH IN HAND AS SEEN FROM THE CASH FLOW STATEMENT IS OF RS. 3,5 0,088/- OUT OF WHICH THE ASSESSEE HAS CLAIMED TO HAVE DEPOSITED INITIAL CASH IN BANK OF RS. 1,60,000/- AND ASSESSEE DID NOT HAVE ANY SATISFACTO RY EXPLANATION WITH REGARD TO SOURCE OF RS. 1,00,000/- OUT OF OPENING C ASH OF RS. 3,55,088/-. IT IS AN ADMITTED FACT THAT ASSESSEE IS A PURE AGRI CULTURIST AND NOT HAVING ANY OTHER INCOME. HENCE, THE AO WAS RIGHTLY DIRECTE D TO SUSTAIN THE ADDITION OF RS. 1,00,000/- AND DELETE THE BALANCE, WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE AC TION OF THE LD. CIT(A) 8 AND REJECT THE GROUND RAISED BY THE ASSESSEE. THE C ASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEES DO NOT SUPPORT THE CASE OF THE ASSESSEE BEING DISTINGUISHED ON FACTS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 14-01-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE:14/01/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, SSISTANT REGISTRAR, ITAT, DELHI BENCHES