SHAH ALAM KHAN, MUMBAI V. ITO 19(1)(4), MUMBAI

ITA 3996/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0080 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR A K NAYAK LD
• Assessee Lawyers: SUBODH RATNAPARAKHI LD
• Keywords: Additional evidence; Onus to prove
• Section: 69C; 143(3); 2(14); 133(6); 69

Judgement Text

ITA NO. 3996/MUM/2014 SHAH ALAM KHAN ASSESSMENT YEAR 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.3996/MUM/2014 ( / ASSESSMENT YEAR:2008-09) SHAH ALAM KHAN MAHARASHTRA METAL INDUSTRIES, 175/05 BEHIND MITCO CST ROAD, KALINA, SANTACRUZ (E) MUMBAI-400 098 / VS. INCOME TAX OFFICER 19(1)(4) ROAD NO. 308, 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL MUMBAI 400 012 ! ./ ./ PAN/GIR NO. AABPK-3284-H ( !# /APPELLANT ) : ( $!# / RESPONDENT ) !# / APPELLANT BY : SUBODH RATNAPARAKHI, LD. AR $!# / RESPONDENT BY : DR. A.K. NAYAK, LD. DR / DATE OF HEARING : 06/06/2017 / DATE OF PRONOUNCEMENT : 21/06/2017 2 ITA NO. 3996/MUM/2014 SHAH ALAM KHAN ASSESSMENT YEAR 2008-09 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF CAPTIONED APPEAL FOR ASSESSMENT YEAR [ AY] 2008-09, THE ASSESSEE HAS CONTESTED THE ADDITION OF RS.20 LACS U /S 69C SUSTAINED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-18 [CIT(A) ], MUMBAI VIDE ORDER DATED 10/01/2014. 2. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURING OF ALUMINUM INGOTS UNDER PROPRIETORSHIP CONCERN MAHARASHTRA METAL INDUSTRIES , WAS ASSESSED U/S 143(3) FOR IMPUGNED AY AT RS.29,41,735/- AFTER CERTAIN DISALLOWANCES / ADJUST MENTS AS AGAINST RETURNED INCOME OF RS.5,19,250/- FILED BY THE ASSES SEE ON 08/10/2010. ONE OF THE ADDITIONS WAS U/S 69C FOR RS.20.00 LACS MADE PURSUANT TO AIR DATA , BEING INVESTMENT MADE BY ASSESSEE IN RECL BONDS. UPON BEING ASKED TO PROVE THE SOURCE THEREOF, THE ASSESSEE EXPLAINED TH AT THE SAID AMOUNT WAS RECEIVED AGAINST GIVING UP RIGHT IN A PIECE OF LAND WHICH WAS IN ASSESSEES POSSESSION SINCE PAST MANY YEARS WHICH RESULTED INT O LONG TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. AGAINST THE SAME, TH E ASSESSEE MADE THE SAID INVESTMENT TO AVAIL DEDUCTION U/S 54EC. HO WEVER, LD. AO NOTED THAT THE SAID PIECE OF LAND WAS NOT SHOWN IN ASSESS EES BALANCE SHEET WHICH LED HIM TO MAKE THE IMPUGNED ADDITIONS U/S 69 C. 3 ITA NO. 3996/MUM/2014 SHAH ALAM KHAN ASSESSMENT YEAR 2008-09 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) AND RAISED SIMILAR CONTENTIONS. T HE ASSESSEE SUBMITTED ADDITIONAL EVIDENCES TO PROVE THE SOURCE OF INVESTM ENT, AGAINST WHICH THE REMAND REPORT WAS CALLED FROM LD. AO. THE LD. AO, DURING REMAND PROCEEDINGS ISSUED NOTICE U/S 133(6) TO CONFIRM THE TRANSACTION FROM HDIL, THE PURCHASER OF THE TENANCY RIGHT. THE PURCHASER HDIL CONFIRMED HAVING PURCHASED THE TENANCY RIGHTS FROM THE ASSESSEE AND PROVIDED LEDGER EXTRACT AND DETAILS OF PAYMENT BUT FAILED TO PROVID E COPY OF PURCHASE AGREEMENT SINCE THERE RECORDS WERE DESTROYED IN THE FIRE. NOTICES U/S 133(6) WAS ISSUED TO JOINT SUB-REGISTRAR, ANDHERI-1, BKL COMPLEX BANDRA (E), MUMBAI TO PROCURE THE COPY OF AGREEMENT BUT AS PER THE RE CORDS, NO SUCH AGREEMENT WAS REGISTERED WITH THE AUTHORITY WH ICH LED THE LD. CIT(A) TO CONFIRM THE IMPUGNED ADDITION. AGGRIEVED, THE AS SESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR], DREW OUR ATTE NTION TO THE DOCUMENTS PLACED IN THE PAPER BOOK AND RAISED SIMILAR CONTENTIONS THAT THE ASSESSEE WAS HAVING CERTAIN RIGHT OVER A PIECE OF L AND SITUATED AT BHARAT NAGAR, KALINA BY WAY OF OCCUPATION OF MORE THAN 25 YEARS. THE SA ID OCCUPATION / TENANCY RIGHT WAS PURCHASED BY HDIL, A LISTED PUBLIC COMPANY, TO CLEAR THE LAND FOR THE AIRPORT. SINCE, NO COST W AS INCURRED BY THE ASSESSEE TO ACQUIRE THE SAID RIGHT AND THE RIGHT AC CRUED TO THE ASSESSEE BY WAY OF OCCUPATION ONLY, THE VALUE / COST OF THE SAM E WAS NIL AND THEREFORE, 4 ITA NO. 3996/MUM/2014 SHAH ALAM KHAN ASSESSMENT YEAR 2008-09 THE SAME COULD NOT BE REFLECTED IN THE BALANCE SHEE T OF THE ASSESSEE. THE PURCHASER, HDIL HAS DULY CONFIRMED THE TRANSACTION AND PROVIDED DET AILS OF PAYMENT WHICH IN ITSELF SUBSTANTIATE THE STAND OF T HE ASSESSEE. OUR ATTENTION WAS FURTHER DRAWN TO THE FACT THAT THE NO WRITTEN DOCUMENTATION WAS EXECUTED AGAINST THE SAME BUT THE CONSIDERATION WAS RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE, WHICH WAS DULY DISCLO SED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. 5. PER CONTRA , LD. DR PLACED RELIANCE ON THE FINDINGS OF LOWER A UTHORITIES AND CONTENDED THAT THE ONUS TO PROVE THE SOURCE OF INVESTMENT SQUARELY LIED ON ASSESSEE AND SINCE HE FAILED TO DISCHARGE T HE SAME, THE IMPUGNED ADDITION IS JUSTIFIED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE CONFIRMATION LETTER ISSUED BY HDIL AS PLACED ON PAGE NO. 10 OF THE PAPER BOOK REVEALS THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.20 LACS BY CHEQUE NO. 754730 ON 26/10/2007. THE SAID PAYMENT HAS BEEN ISSUED AGAINST TENANCY RIGHTS PURCHASE-BHARAT NGR ON 16/01/2008. THE SAID AMOUNT OF RS.20.00 LACS APPEARS ON DEPOSIT S SIDE OF DENA BANK ACCOUNT NO.CA GEN 13143 ON 26/10/2007 HELD BY MAHARASHTRA METAL INDUSTRIES , BEING PROPRIETORSHIP CONCERN OF THE ASSESSEE, AS PER BANK STATEMENT PLACED ON PAGE NO. 11 OF THE PAPER BOOK. THE SAME AMOUNT HAS BEEN DEBITED ON 29/03/2008 FROM THE SAME BANK ACCOU NT, APPARENTLY ON ACCOUNT OF INVESTMENT IN REC BONDS. THE DATE OF ALLOTMENT OF REC BONDS 5 ITA NO. 3996/MUM/2014 SHAH ALAM KHAN ASSESSMENT YEAR 2008-09 AS PER CERTIFICATE NO. 0722644 IS 31/03/2008. THE A SSESSEE HAS PRODUCED TRANSLATED COPY OF PROPRIETORS CAPITAL ACCOUNT, HD IL ACCOUNT AND REC BONDS ACCOUNT AS IT STOOD IN HIS BOOKS OF ACCOUNTS WHERE THE SAID AMOUNTS / TRANSACTIONS ARE DULY REFLECTED IN RESPECTIVE LED GERS. THE BOOKS OF ACCOUNTS ARE AUDITED AND THE BANK BALANCE OF ABOVE DENA BANK ACCOUNT AS ON 31/03/2008 IS DULY REFLECTED IN THE BALANCE SHEE T OF MAHARASHTRA METAL INDUSTRIES . THE ASSESSEE HAS REFLECTED CAPITAL GAIN IN COMPUT ATION OF INCOME FOR IMPUGNED AY AND CLAIMED DEDUCTION FOR IN VESTMENT IN RECL BONDS. ALL THESE FACTORS, GIVE STRENGTH TO LD. ARS VARIO US SUBMISSIONS / CONTENTIONS. 7. PROCEEDING FURTHER, WE FIND THAT THE CAPITAL ASS ETS AS DEFINED IN SECTION 2(14) OF THE INCOME TAX ACT, 1961 INCLUDES PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, AND THE SAID TERM, IN OUR OPINION, IS WIDE ENOUGH T O COVER TENANCY / OCCUPANCY RIGHT ACQUIRED BY THE ASSESSEE. 8. THEREFORE, TO CONCLUDE, ON THE BASIS OF ABOVE OB SERVATIONS, FACTUAL MATRIX AND CIRCUMSTANTIAL EVIDENCES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS SUCCESSFUL IN DEMONSTRATING THE SOURCE OF INVESTMENT MADE IN REC BONDS AND THEREFORE, THE IMPUGNED ADDITIONS STANDS DELET ED. 6 ITA NO. 3996/MUM/2014 SHAH ALAM KHAN ASSESSMENT YEAR 2008-09 9. IN NUTSHELL, THE ASSESSEES APPEAL STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE, 2017. SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21 .06.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. '. , . , / DR, ITAT, MUMBAI 6. /0 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI