Sh. Jai Bhagwan, Sonepat V. ITO, Sonepat

ITA 4333/DEL/2014

• Counselvise Citation: 433320114 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 11-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAN KANT GARG
• Assessee Lawyers: SURESH K GUPTA
• Keywords: Opportunity of being heard; Corroborative evidences; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC - I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 4333 /DEL/201 4 (ASSESSMENT YEAR - 20 1 0 - 11 ) JAI BHAGWAN, S/O - SH.KANSHI RAM, VPO FAZILPUR, SONEPAT PAN - AFSPJ3528D ( APPELLANT) VS ITO, WARD - 2, SONEPAT (RESPONDENT ) APPELLANT BY SH. SURESH K.GUPTA, CA RESPONDENT BY SH.RAMAN KANT GARG, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 26.05.2014 OF CIT(A), ROHTAK PERTAINING TO 2010 - 11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THE LD.CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE A DDITION OF RS.10,48,172/ - OF THE CAPITAL RECEIPTS IN THE FORM OF COMPROMISE MONEY ARISING OUT OF LEGAL SUIT U/S 138 OF THE NEGOTIABLE INSTRUMENTS ACT AGAINST THE PAYER FOR DISHONOR OF CHEQUES. 2. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY/AMEND THE ABOVE GROUNDS OF APPEAL WITH THE PERMISSION OF THE HON BLE APPELLATE AUTHORITY. 2. LD. AR INVITING ATTENTION TO THE ASSESSMENT ORDER SUBMITTED THAT A CHEQUE ISSUED BY M/S SIDDHARTH CO - OPERATIVE HOUSING BUILDING SOCIETY LTD. HAD BOUNCED AND THE ASSESSEE HAD FILED A LEGAL SUIT U/S 138 OF THE NEGOTIABLE INSTRUMENTS ACT BY THE ASSESSEE. T HE ISSUE IN THE PRESENT APPEAL PERTAINS TO THE MONEY RECEIVED AS A RESULT OF MUTUAL SETTLEMENT ON THE FILING OF THE SAID SUIT. P ARA 4 OF THE ASSESSMENT ORDER IT WAS SUBMI TTED REFERS TO THESE FACTS. FOR READY - REFERENCE, THE SAME IS REPRODUCED HEREUNDER: - 4. AS REGARD TO CASH DEPOSITS OF RS.1,75,000/ - AND RS.6,18,672/ - + 3,00,000/ - THE ASSESSEE STATED THAT THESE ARE RECEIVED ON SALE OF AGRICULTURAL LAND. T HE ASSESSEE SOLD ANCESTRAL AGRICULTURE LAND TO M/S SIDDHARTH CO - OPERATIVE HOUSING BUILDING SOCIETY LTD. ON 15.06.2007. HE HAS RECEIVED TWO CHEQUES OF RS.619250/ - AND RS.1001250/ - . THESE DATE OF HEARING 11 .0 9 .2015 DATE OF PRONOUNCEMENT 28. 1 0 .2015 I.T.A .NO. - 4333/ DEL/2014 PAGE 2 OF 3 CHEQUES WERE BOUNCED WITH THE REMARKS FUND INSUFFICIENT . HE FILED A LEGAL SUIT AGA INST THE PURCHASER SOCIETY UNDER NEGOTIABLE INSTRUMENT ACT BUT THERE WAS MUTUAL SETTLEMENT FOR PAYMENT AND CASE WAS WITHDRAWN BY THE ASSESSEE. HE RECEIVED PAYMENT IN CASH. HE RECEIVED COMPROMISING MONEY OF RS.10,48,172/ - CALCULATION OF WHICH IS GIVEN AS UNDER: - MONEY RECEIVED IN CASH ON SETTLEMENT 1750000/ - + 918672/ - = 2668672/ - MONEY AS PER BOUNCED CHEQUES 1001250/ - +619250/ - = 1620500/ - COMPROMISING MONEY 1048172/ - SINCE THE COMPROMISING MONEY HAS BEEN RECEIVED DURING THE YEAR UNDER CON SIDERATION THEREFORE THE SAME IS THE INCOME OF THE ASSESSEE WHICH IS NOT DISCLOSED IN THE RETURN OF INCOME. HENCE AN ADDITION OF RS.1048172/ - IS MADE TO THE RETURNED INCOME. 3. INVITING ATTENTION TO THE IMPUGNED ORDER IT WAS SUBMITTED THAT THESE FACTS W ERE NOT DISPUTED BY THE CIT(A) OR THE AO. THE DISPUTE REVO LV ES AROUND THE FACT THAT SINCE THE RECEIPT WAS ON ACCOUNT OF AGRICULTURAL LAND SOLD TO THE M/S SIDDHARTH CO - OPERATIVE HOUSING BUILDING SOCIETY LTD. WHICH WAS ANCESTRAL LAND IN THE HANDS OF THE ASSESSEE AND THE RECEIPT THEREOF WAS EXEMPT. THUS THE RECEIPTS EMANATING FROM THE BOUNCING OF THE CHEQUE ISSUED FOR THE SAID TRANSACTION WOULD ALSO BE EXEMPT. IT WAS HIS CLAIM THAT WHEN THE CHEQUE ISSUED BY THE SOCIETY BOUNCED THE ASSESSEE HAD TWO OPTIONS AVAILABLE TO IT EITHER TO CANCEL THE ENTIRE SALE OR TO PURSUE LITIGATION FOR THE BOUNCED CHEQUE BY WAY OF FILING A LAW SUIT. IN THE FACTS OF THE PRESENT CASE IT WAS SUBMITTED THE ASSESSEE CHOSE THE SECOND OPTION AND SUCCEEDED IN RECOVERING THE AMOUNT DUE TO IT . T HUS SINCE THE RECEIPT WAS FROM SALE OF AGRICULTURAL LAND THE CLAIM DESERVES TO BE ALLOWED. THE LD.AR WAS REQUIRED TO SHOW THE COPY OF THE SALE DEED TO SUPPORT THE ARGUMENTS MADE. IN RESPONSE THERETO IT WAS STATED TH AT IT WAS NOT READILY AVAILAB LE HOWEVER THE ASSESSEE IT WAS STATED W OULD BE ABLE TO PRODUCE IT BEFORE THE AUTHORITIES IF SO REQUIRED. 4 . THE LD. SR. DR STATED THAT EVIDENCE TO THIS EFFECT HAS NOT BEEN PLACED BY THE ASSESSEE ON RECORD AND THE ASSESSEE SEEM S TO HAVE PROCEEDED ON TH E FOOTING THAT THESE FACTS NECESSARILY WOULD BE KNOWN TO THE AO. 5 . THE SUBMISSIONS OF THE PARTIES HAVE BEEN HEARD AND THE MATERIAL AVAILABLE ON RECORD HAS BEEN PERUSED . IT IS SEEN THAT IN THE FACTS OF THE PRESENT CASE THE ASSESSEE WAS REQUIRED TO EXPLAIN VARIOUS ENTRIES IN ITS BANK ACCOUNTS . THE ASSESSEE STATED THAT THESE WERE RESULTING OUT OF THE SALE OF AGRICULTURAL LAND AND IN THE SAID CIRCUMSTANCES THE BELIEF OF THE ASSESSEE THAT THESE FACTS WERE IN I.T.A .NO. - 4333/ DEL/2014 PAGE 3 OF 3 THE KNOWLEDGE OF THE AO MAY NOT BE MISPLACED. HOW EVER, IN THE INTERESTS OF SUBSTANTIAL JUSTICE, IT IS CONSIDERED APPROPRIATE TO RESTORE THE ISSUE BACK TO THE AO SO AS TO ENABLE THE ASSESSEE TO BRING THE NECESSARY FACTS AND EVIDENCE S ON RECORD. THE ASSESSEE IS DIRECTED TO PRODUCE THE SA LE DEED IN RESPECT OF THE SPECIFIC ANCESTRAL AGRICULTURAL LAND STATED TO HAVE BEEN SOLD TO THE M/S SIDDHARTH CO - OPERATIVE HOUSING BUILDING SOCIETY LTD. WHEREIN REFERENCE TO THIS SPECIFIC CHEQUE NO. MAY HAVE BEEN MADE. THE CLAIM IT IS STATED IS ALSO SUPPORTED BY THE LEGAL SUIT FILED BY THE ASSESSEE U/S 138 OF THE NEGOTIABLE INSTRUMENTS ACT SO AS TO DEMONSTRATE THAT THE SETTLEMENT WAS QUA THE SALE OF ANCESTRAL AGRICULTURAL LAND ON 15.06.2007 WHICH WAS EXEMPT. SUPPORTING EVIDENCES IN SUPPORT OF THE SAID CLAIM TO BE MADE A VAILABLE BY THE ASSESSEE. THUS SINCE NECESSARY FACTS AND EVIDENCE S HAVE NOT BEEN PLACED ON RECORD THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE AO WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING THE ASSES SEE A REASONABLE OPPORTUNITY OF BEING HEARD. LIBERTY IS GIVEN TO THE ASSESSEE TO PLACE NECESSARY FACTS AND EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE AO . 6 . IN THE RESULT, THE APPE AL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 8 T H OF OCTOBER, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 2 8 / 10 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI