ITO, WARD- 1(1), RAIPUR (CG) V. SHRI MANOJ SINGH RAJPUT, RAIPUR (CG)

ITA 43/BIL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1424 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 12-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEETAL VERMA
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Principle of natural justice; Additional evidence; Reasonable cause; Tax effect
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BEFORE SHRI SHAMIM YAHYA (AM) & SHRI PARTHA SARATHI CHAUDHURY (JM) I.T.A. NO.43 /RPR /201 3 ASSESSMENT YEAR : 2008 - 09 ITO, WARD 1(1), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR V S MANOJ SINGH RAJPUT , Q.NO.380, STREET NO.27, SUNDER NAGAR, RAIPUR PAN/GIR NO. : AGMPR 1567 K (APPELLANT ) .. RESPONDENT APPELLANT BY : SMT. SHEETAL VERMA RESPONDENT BY : NONE DATE OF HEARING : 21 - 04 - 2016 DATE OF PRONOUNCEMENT : 22 - 4 - 2016 O R D E R PER PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM TH E ORDER OF THE LD CIT(A), RAIPUR , DATED 25.3.2013 ON THE FOLLOWING GROUND: WHETHER IN LAW AND FACTS & CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERR ED IN DELETING THE ADDITION OF R S.46,15,500/ - MADE BY THE AO U/S.68 OF THE I.T.ACT, 1961 ON ACCOUNT OF UNEXPLAINED INVESTMENT 2. THE FACTS IN BRIEF IN THIS CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL . HE FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.139(1) DECLARING TOTAL INCOME AT RS.1,08,477/ - . , SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED U/S.144(1) R.W.S.14 OF THE ACT ON 26.12.2011, DETERMINING THE TOTAL INCOME AT RS.47 ,23,977/ - .. 3. ON THE BASIS OF AIR INFORMATION, THE ASSESSING OFFICER ISSUED N OTICE UNDER SECTION 148 OF THE A CT TO THE ASSESSEE, OBSERVING THAT THE ASSESSEE HAD PURCHASED 2 I.T.A. NO.43 /RPR/2013 ASSESSMENT YEAR : 2008 - 09 AN IMMOVABLE PROPERTY VALUING RS.46,15,500/ - ON 28.7.2007 AND THE SAME WAS REGISTER ED AT THE OFFICE OF SUB - REGISTRAR, COLLECTORAT E, PARISAR, CHARI CHOWK, RAIPUR; THE AO ISSUED NOTICE U/S.148, WHEREIN, T HE ASSESSEE WAS ASKED TO EXPLAIN SUCH TRANSACTION. DESPITE SUFFICIENT OPPORTUNITY BEING GIVEN TO THE ASSESSEE, THE ASSESSEE FAILED TO E XPLAIN THE NATURE AND SOURCE OF INVESTMENT MADE FOR THE PURCHASE OF PROPERTY VALUING RS.46,15,500/ - , THEREFORE, THE AO TREATED THE ENTIRE INVESTMENT AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. . ACCORDINGLY, THE AO DETERMINED TOTAL INCOME OF THE ASSESSEE AT RS.47,23,977/ - (I.E. RS.INCOME SHOWN BY THE ASSESSEE AT RS.1,08,477/ - + RS.46,15,500/ - ). THE ASSESSING O FFICER HAS BROADLY DISPUTED THE ACTION OF THE ASSESSEE ON THREE COUNTS: I) THE ASSESSEE DID NOT RESPOND TO THE NOTICE U/S.148 OF THE ACT. II) THE TOTAL CONSIDERATION FOR PURCHASE OF PROPERTY III) THE AMOUNT OF INVESTMENT AND ITS SOURCE. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. WHEN THE MATTER WAS TRAVELED TO LD CIT(A), HE CALLED FOR AN REMAND R EPORT FROM THE ASSESSING OFFICER. IN THE REMAND REPORT, THE AO HAS STATED AS UNDER: I) THE ASSESSEE HAS PURCHASED THE PROPERTY ALONGWITH CO - OWNER SHRI VIJAY KUMAR SAHU BEING 50% SHARE. II) PART OF INVESTMENT WAS MADE BY THE LATE RAM SINGH RAJPUT, FATHER OF THE ASSESSEE. III) THE NOTICES WERE SERVED AT THE ADDRESS GIVEN BY THE ASSESSEE. IV ) THE ASSESSEE CLAIMED TO HAVE INVESTED THE AMOUNT IN PROPERTY OUT OF GIFT RECEIVED FROM HIS FATHER. 3 I.T.A. NO.43 /RPR/2013 ASSESSMENT YEAR : 2008 - 09 V) THE FATHER OF THE ASSESSEE IS NOT ALIVE, HOWEVER, HIS PENSION CALC ULATION SHEET, BANK STATEMENT AND CAPITAL ACCOUNT SINCE 2000 - 2001 WERE SUBMITTED. V I ) A GIFT DEED NOTORISED AND EXECUTED WAS SUBMITTED, HOWEVER, SINCE THE DONOR IS NOT ALIVE, THE VERACITY OF THE SAME IS NOT VERIFIED. VI I ) THE CAPITAL ACCOUNT OF THE ASSESSEES FATHER SHOWS OPENING CASH BALANCE OF RS.15,99,799/ - . 5. BEFORE THE LD CIT (A), IT WAS SUB MITTED BY THE ASSESSEE THAT THE IMMOVABLE PROPERTY WAS PURCHASED BY HIM JOINTLY WITH SHRI VIJAY KUMAR SAHU OF BHILAI. THE AO HAS ASSESSED THE ENTIRE AMOUNT IN THE HANDS OF THE ASSESSEE. THE COMPLETE ADDRESS OF THE JOINT HOLDER IS MENTIONED IN PURCHASE DEED. THE NOTICE OF HEARING WAS SERVED ON THE YOUNG ER BROTHER OF THE ASSESSEE SHRI MANISH SINGH RAJPOOT, WITH WHOM THE ASSESSEE HAD SOME PERSONAL DISPUTE AND , THEREFORE, NOTICE RECEIVED BY HIM WAS NEVER PASSED ON TO THE ASSESSEE AND THE ASSESSMENT ORDER HAS BEEN PASSED WITHOUT AFFORDING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT INVESTMENT IN PROPERTY WAS RS.51,08,394/ - (INCLUD ING STAMP DUTY, REGISTRATION CHARGES, ETC), I.E. RS.25,54,197/ - BEING 50% OF THE TOTAL INVESTMENT AND ANOTHER 50% BEING RS.,25,54,197/ - INVESTED BY SHRI VIJAY KUMAR SAHU. THE ASSESSEE SUBMITTED THE SOURCE OF INVESTMENT IN THE PROPERTY AS UNDER: I) OWN INVESTMENT : RS. 3,54,197/ - II) AMOUNT RECEIVED FROM ASSESSEES FATHER RS.22,00,000/ - TOTAL : RS.25,54,197/ - 6. WITH REGARD TO AMOUNT RECEIVED FROM ASSESSEES FATHER, THE ASSESSEE HAS FILED DEATH CERTIFICATE OF LATE FATHER, CALCULATION OF PENSION, BANK STATEMENT, CAPITAL 4 I.T.A. NO.43 /RPR/2013 ASSESSMENT YEAR : 2008 - 09 ACCOUNT I.E. 2000 - 2001 TO 2008 - 09, COPY OF GIFT DEED. THE ASSESSEE FURTHER SUBMITTED THE BANK STATEMENT CONTAINS CREDIT ENTRY OF THE AMOUNT RECEIVED BY HIS FATHE R FROM THE STATE GOVERNMENT AFTER HIS RETIREMENT AND THAT ALL LEGAL AND COGENT DOCUMENTS HAVE NOT BEEN DISPUTED BY THE DEPARTMENT. 7. LD CIT(A) OBSERVED TH A T THE ASSESSEE MADE AN APPLICATION UNDER RULE 46A FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE FO RM OF PURCHASE DEED, OF THE IMMOVABLE PROPERTY, ACCEPTANCE LETTER OF THE CO - OWNER NAMELY MR VIJAY KUMAR SAHU, GIFT DEED, CAPITAL ACCOUNT AND BALANCE SHEET OF ASSESSEES FATHER LATE SHRI RAM SINGH RAJPUT(DONOR), DOCUMENTS PERTAINING TO EMPLOYMENT OF FA THER AND BANK STATEMENT. THE LD CIT(A) ALSO OBSERVED THAT THE NOTICE ISSUED BY THE ASSESSEE WAS NOT RECEIVED BY HIM AS THE SAME WAS RECEIVED BY HIS BROTHER. AFTER CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESSEE, LD CIT (A) HELD THAT THE ASSESSEE WAS CONSTR AINED BY REASONABLE CAUSE IN HIS FAILURE TO SUBMIT REQUISITE DOCUMENTS TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER, THE AFORESAID DOCUMENTS HAVE GOT DEFINITE BEARING AT ASSESSMENT OF INCOME AND DISPOSAL OF THE PRESENT APPEAL. THEREFORE , SAID ADDITIONAL EVIDENCES CANNOT BE IGNORED IN THE INTEREST OF NATURAL JUSTICE IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIRGIN SECURITIES AND CREDITS PVT LTD., 332 ITR 396 (DELHI), WHEREIN, IT HAS BEEN HELD THAT RULE 4 6A OF I.T.RULES PERMITS THE CIT (A) TO ADMIT THE ADDITIONAL EVIDENCES, IF HE FINDS THAT THE SAME IS CRUCIAL FOR DISPOSAL OF THE APPEAL.. IN VIEW OF ABOVE, LD CIT (A) ADMITTED THE ADDITIONAL EVIDENCES AND THE SAME WERE FURNISHED BEFORE THE AO FOR HIS COMMENT S. LD CIT(A) OBSERVED FROM THE PERUSAL OF PURCHASE DEED AND AS ACCEPTED BY THE AO IN THE REMAND REPORT , IT IS CLEAR THAT THE PROPERTY IS CO - OWNED BY SHRI VIJAY KUMAR SAHU AND HAS INVESTED 50% OF THE TOTAL AMOUNT IN THE PROPERTY IN 5 I.T.A. NO.43 /RPR/2013 ASSESSMENT YEAR : 2008 - 09 QUESTION. THE AO AT NO POINT OF TIME HAS DISPUTED THE CO - OWNER IN THE PROPERTY. WITH REGARD TO GIFT RECEIVED FROM HIS FATHER, THE LD CIT(A) OBSERVED THAT THE AMOUNT GIFTED BY THE FATHER OF THE ASSESSEE IS NOT DISPUTED CONSIDERING THE BANK STATEMENT AND CAPITAL ACCOUNT OF DECEAS ED FATHER, WHO HAD GIFTED THE ENTIRE AMOUNT OF RS.22,00,000/ - TO THE ASSESSEE OUT OF RETIREMENT BENEFITS. WITH REGARD TO SERVICE OF NOTICE, LD CIT(A) HAS ALSO HELD THAT THERE IS REASONABLE CAUSE FOR NOT APPEARING BEFORE THE AO AT THE ASSESSMENT STAGE, FOR WHICH, THE AO HAS MADE THE ASSESSMENT UNDER SECTION 1 44 AND THAT IN THE INTEREST OF JUSTICE AS PER DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF VIRGIN SECURITIES (SUPRA), THEREFORE, ADDITIONAL EVIDENCES WERE ALSO ACCEPTED. IN VIEW OF ABOVE DISCUSS ION, LD CIT(A) DELETED THE ADDITION OF RS.46,15,500/ - MADE BY THE AO. HEN C E, THE REVENUE HAS FILED APPEAL BEFORE US. 8. LD D.R. RELIED ON THE ORDER OF THE AO AND STATED THAT DESPITE VARIOUS OPPORTUNITY GIVEN TO THE ASSESSEE BY WAY OF NOTICES, WHICH WERE SERVED AT THE GIVEN ADDRESS, THE ASSESSEE FAILED TO APPEAR BEFORE THE AO, HENCE, THERE WAS NO ALTERNATIVE BUT TO PASS THE ASSESSMENT EXPARTE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. HE SUBMITTED TH AT FROM THE REMAND REPORT OF THE AO, IT IS NOT FULLY VERIFIABLE AS TO THE INVESTMENTS MADE BY THE ASSESSEE IN THE PURCHASE OF PROPERTY. 9. ON THE OTHER HAND, LD A.R. SUPPORTED THE ORDER OF THE LD CIT(A). . 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD OF THE CASE. DURING THE COURSE OF HEARING, LD D.R. WAS ASKED TO PRODUCE THE REMAND REPORT, WHICH WAS SUBMITTED. FROM THE REMAND REPORT, IT IS CLEAR THAT THE PROPERTY IN QUESTION HAS BEE N PURCHASED WITH THE CO - OWNER SHRI VIJAY KUMAR SAHU, BEING 50% OF THE S HARE 6 I.T.A. NO.43 /RPR/2013 ASSESSMENT YEAR : 2008 - 09 SINCE SHRI VIJAY KUMAR SAH U HAS GIVEN CONSENT LETTER REGARDING THE CO - OWNER SHIP OF THE PROPERTY. FROM THE SALE DEED, IT IS ALSO REVEALED THAT SHRI VIJAY KUMAR SAHU IS THE CO - OWNER OF THE PROPERTY. 10.1 AS REGARDS TO SERVICE OF NOTICE , IT IS OBSERVED THAT THE ASSESSEE IS ADMITTING THE SERVICE OF NOTICE IN THE GIVEN ADDRESS BUT TO HIS YOUNGER BROTHER, WHO IS NOT IN GOOD RELATIONSHIP WITH THE ASSESSEE AND BECAUSE OF THIS, THE NOTICE WAS NOT KNOWN TO THE ASSESSEE. THIS FACT HAS NOT BEEN EXAMINED BY THE AO WHETHER THE CONTENTION OF THE ASSESSEE IS CORRECT OR NOT. HENCE, WE FIND FORCE IN THE FINDINGS OF LD CIT(A) AS TO THIS CONTENTION OF THE ASSESSEE. 10.2 AS REGARDS TO SOURCE OF INVESTMENT MADE IN THE SHARE OF THE ASSESSEE TO THE P ROPERTY, THE ASSESSEE HAS FURNISHED THAT HE HIMSELF INVESTED R S.3,54,197 / - AND BALANCE RS.22,00,000/ - HAS BEEN INVESTED OUT OF GIFT RECEIVED FROM HIS DECEASED FATHER, LATE RAM, SINGH RAJPUT. AS TO THE GENUINENESS OF GIFT, THE ASSESSEE HAS SUBMITTED GIFT DEED DULY EXECUTED AND NOTARIZED, BANK STATEMENT, CAPITAL ACCOUNT, SERVICE CERTIFICATE OF HIS FATHER, PENSION CALCULATION SHEET. IT IS ALSO PERTINENT TO MENTION THAT ASSESSEES FATHER WAS WORKING IN STATE GOVERNMENT IN PWD. IT IS ALSO NOTED IN THE REMAND REPORT THAT OPENING CASH BAL A NCE OF RS.15,99,799/ - WAS SHOWN SINCE 2000 - 2001. THAT ALSO THE DECEASED FATHER OF THE ASSESSEE HAS RECEIVED RETIREMENT BENEFITS. FROM THE ABOVE, WE OBSERVE THAT THE ASSESSEE HAS SUBSTANTIATED WITH DOCUMENTARY EVIDENCE TO PRO VE THE GENUINENESS OF THE TRANSACTION AND SOURCE OF HIS INVESTMENT. EVEN OTHERWISE, THE ASSESSEE HAS EXPLAINED HIS SOURCE OF SOURCE. THE ABOVE FACTS HAVE NOT BEEN DISPUTED BY THE DEPARTMENT.. 7 I.T.A. NO.43 /RPR/2013 ASSESSMENT YEAR : 2008 - 09 10.3 IN VIEW OF ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OP INION THAT THE ASSESSEE HAS FURNISHED COGENT MATERIALS/DOCUMENTS IN SUPPORT OF HIS 50% SHARE IN THE PROPERTY. OUT OF TOTAL INVESTMENT, THE DEPARTMENT HAS ACCEPTED 50% AS PER REMAND REPORT. EVEN OTHERWISE FOR BALANCE 50% OF INVESTMENT I.E. RS.25,54,197/ - , THE TAX EFFECT WILL BE LESS THAN THE LIMIT PRESCRIBED BY CBDT. ON THIS COUNT ALSO, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. 11. LOOKING TO THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO AND WE DO NOT FIND ANY INFIRMITY IN HIS FINDINGS TO INTERFERE. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 /4/2016 . SD/ - SD/ - (SHAMIM YAHYA) (PARTHASARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER R AIPUR, DATED 22 / 0 4 /2016 ` PARIDA , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : ITO, WARD 1(1), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR 2. THE RESPONDENT: MANOJ SINGH RAJPUT, Q.NO.380, STREET NO.27, SUNDER NAGAR, RAIPUR 3. THE CIT(A) - RAIPUR 4. CIT , RAIPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. BY ORDER, //TRUE COPY// ASST.REGISTRAR, ITAT, RAIPUR