Sri. Anand Kumar, Bangalore V. ACIT, Bangalore

ITA 438/BANG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0331 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 27-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN DR SIBICHEN K
• Section: 143(3); 153A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH C, BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K.GARODIA, ACCOUNTANT MEMBER ITA NO.438(BANG)/2014 (ASSESSMENT YEAR : 2004-05 SHRI ANAND KUMAR, NO.27, ELEPHANT ROCK ROAD, 3 RD BLOCK, JAYANAGAR, BANGALORE-560 011 PAN NO.AEMPK0797C APPELLANT VS THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-4(1), BANGALORE RESPONDENT AND ITA NO.409(BANG)/2014 (ASSESSMENT YEAR : 2004-05) (BY REVENUE) ASSESSEE BY : SHRI V. SRINIVASAN, ADVOCATE REVENUE BY : DR. SIBICHEN K MATHEW, CIT-III DATE OF HEARING : 30-05-2016 DATE OF PRONOUNCEMENT : 1 7-06-2016 O R D E R PER SHRI A. K. GARODIA, AM: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE WHICH ARE DIRECTED AGAINST THE ORDERS OF THE LEARNE D CIT(A)-II, BANGALORE DATED 23-12-2013 FOR THE ASSESSMENT YEARS : 2004-05 . ITA NO.438(B)/14 & 409(BANG)2014 2 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEA L ARE AS UNDER; 1 . T H E O R DE R S OF THE AUTHOR I T I ES BE L OW IN SO FAR AS TH EY A R E AGAINST THE APPELLA N T , AR E OPPOSED TO LAW , EQU I TY , WE I GHT OF EV I DE N CE , P R OB A BILIT I ES , FACTS A N D C I RC U MS T A N CES O F THE CASE 2. THE L E ARN ED CIT[A] I S NOT JU ST IFI ED IN S U STA IN I N G AN A DD ITI O N OF RS. 8 , 75 , 000 / - O U T O F TH E O R I G I NA L ADD I T I O N OF RS.77 , 50 , 000 /- MA DE A S TH E ALLEGED UNEXP L AI N ED MONEY RECE I VED BY THE APPE L LANT U / S 69A O F T HE ACT UNDE R THE FACTS AND I N THE C IR C U MSTANCES OF T H E A PPE LL A N T ' S CASE. 3 . W ITH O UT P R E JU D I CE TO TH E RI G HT T O SEE K W A I V E R W ITH TH E H O N' B L E CCIT / DG , T H E APPE LL A NT D EN I ES H I M SE L F LI AB L E T O BE C H A R GED T O IN T E R ES T U / S 234 - A , 234-B AND 234 - C OF THE ACT , WH I CH UNDE R THE FACTS AND I N THE CI R CU M STA N CES OF THE APPELLANT'S CASE AND THE LEVY DESERVES TO BE CANCELLED. 4. F O R TH E A BOVE A N D OTHE R G R O UN DS T H AT MAY B E U R GED AT T H E T I ME OF H EA RIN G O F TH E A PPE AL , Y O UR APPE LLA N T H UM B LY P R A Y S T H A T TH E A P PE A L MAY BE A LL OWED A N D J U S T I CE R E N DE R ED AN D TH E A PPE LL A N T MA Y BE AWA R DED COSTS IN PROSECUT I NG THE APPEA L A N D A L SO O R DER FOR T HE REFUND O F TH E I NSTITUT I ON FEES AS PART OF THE COSTS . 3. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER; 1. THE ORDER OF THE LD. CIT(A) IS CLEARLY OPPOSED TO LAW AS FAR AS THE FINDINGS ARE PERVERSE, ITA NO.438(B)/14 & 409(BANG)2014 3 CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND HENCE NOT SUSTAINABLE. 2. THE CIT(A) ERRED IN NOT CONSIDERING THE CASH PAYMENTS OF RS.34,37,500/- AND RS.77,50,000/-A AND RS.4.00 LAKHS RECEIVED BY THE ASSESSEE AS PER THE AGREEMENT DATED 17/02/2003, THE NOTINGS ON SEIZED PAPER BEARING PAGE NO.89 AND THE NOTINGS IN SEIZED PAPER BEARING PAGE NO.90 WHICH AGGREGATE TO RS.1,15,87,500/-WHILE GRANTING THE RELIEF OF RS.68,75,000/-. 3. THE CIT(A) OUGHT TO HAVE NOTED THAT THE CASH PAYMENTS RECEIVED BY THE ASSESSEE ON 04/12/2003 OF RS.77,50,000/- AND RS.4.00 LAKHS TOWARDS SALE OF LAND ARE AFTER THE INITIAL RECEIPT OF RS.34,37,500/ - ON 17/02/2003 ON SIGNING THE AGREEMENT BUT THE AMOUNT OFFERED TO TAX IN HIS INDIVIDUAL ASSESSMENT IS ONLY RS.68,75,000/-. IN THESE CIRCUMSTANCES, THE CI(A) OUGHT TO HAVE SUSTAINED ADDITION OF RS.38,37,500/-. 4. THE BRIEF FACTS, TILL THE STAGE OF PASSING OF THE PRESENT ASSESSMENT ORDER, ARE NOTED BY THE LD. CIT(A) IN PA RAS 3, 3.1 & 3.2 OF HIS ORDER AND THESE PARAS ARE RE-PRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE; 3. UNEXPLAINED MONEY BROUGHT TO TAX U/S 69A : RS.77,50,000/- . 3.1 CONSEQUENT TO THE SETTING ASIDE OF THE ASSESSM ENT ORDER DATED 31/12/20008 PASSED BY THE AO U/S 153A ITA NO.438(B)/14 & 409(BANG)2014 4 READ WITH SECTION 143(3) OF THE ACT BY THE CIT II VIDE HIS ORDER U/S 263 OF THE ACT DATED 29/03/2011, THE AO SOUGHT DETAILS FROM THE APPELLANT REGARDING THE AMO UNT OF RS.77,50,000/- FOUND TO HAVE BEEN RECEIVED BY HIM F ROM M/S PEOPLES EDUCATION SOCIETY ON AN EXAMINATION OF THE SEIZED MATERIAL MARKED A/PES/13 MENTIONED ABOVE. TH E APPELLANT IN HIS REPLY DATED 20/07/2011 STATED THA T, S A RESULT OF THE SEARCH OPERATION, A TOTAL AMOUNT OF R S.124 LAKHS HAD BEEN BROUGHT TO TAX IN HIS HANDS AND IN T HE HANDS OF M/S BANGALORE SITES AND ESTATES INASMUCH A S HE HAD OFFERED A SUM OF RS.68,75,000/- AT RS.34,37,500/- EACH FOR THE ASSESSMENT YEARS 2003-0 4 AND 2004-05 AND M/S BANGALORE SITES AND ESTATES HAD OFFERED A SUM OF RS.56,00,000/-FOR TAX. AS, IN TH E OPINION, THE AMOUNT OF RS.7,50,000/- FIGURING IN TH E SEIZED MATERIAL WAS NOT ADDRESSED BY THE APPELLANT, THE AO SOUGHT FURTHER CLARIFICATION FROM THE APPELLANT. THE APPELLANT VIDE HIS REPLY DATED 4/8/2011 THAT THE AO HAD MADE NOTINGS AT PAGES 89 AND 92 OF THE SAID SEIZED MATERIAL THAT THE GROSS AMOUNT INVOLVED IN THE TRAN SACTION WAS RS.1.24 LAKHS OUT OF WHICH AN AMOUNT OF RS.90.0 0 LAKHS WAS MENTIONED AS PAID FROM PES OFFICE AT PA GE 92 AGAINST THE APPELLANTS NAME CONSISTING OF CASH PAYMENT OF RS.77,50,000/- AND A PAYMENT OF RS.12.50 LAKHS BY POSTAL ORDER AND THAT, IF THE AMOUNT OF RS.12.50 LAKHS RECEIVED THROUGH THE POSTAL ORDER IS DEDUCTED FROM RS.90.00LAKHS THE AMOUNT OF RS.77.50 LAKHS STOOD ANSWERED AS HAVING BEEN RECEIVED BY HIM IN CASH. THEREFORE, ACCORDING TO THE APPELLANT, THE SUM OF RS.1.24 CRORES OFFERED TO TAX IN ALL INCLUDED THE S UM OF RS.77.50 LAKHS SOUGHT TO BE BROUGHT TO TAX IN THE ITA NO.438(B)/14 & 409(BANG)2014 5 REASSESSMENT ORDER FOLLOWING THE CITS ORDER U/S 26 3 OF THE ACT. 3.2 HOWEVER, ACCORDING TO THE AO, THE APPELLANTS EXPLANATION DID NOT ADDRESS THE QUESTION AS TO WHET HER THE SUM OF RS.77.50 LAKHS HAD SUFFERED TAX EITHER I N THE ASSESSMENTS OF THE FIRM (M/S BANGALORE SITS AND EST ATES) FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 OR IN THE ASSESSMENT OF THE APPELLANT FOR THE ASSESSMENT YEAR 2004-05. HOLDING THUS, THE AO BROUGHT TO TAX THE SUM OF RS.77.50 LAKHS AS THE APPELLANTS MONEY U/S 69A OF THE ACT. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD.CIT(A) AND THE LD.CIT(A) SUSTAINED PA RT OF ADDITION OF RS.8.75 LAKHS OUT OF TOTAL ADDITION MADE BY THE AO OF RS.77.50 LAKHS AND DELETED THE BALANCE ADDITION OF RS.68.75 LAKHS. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE US FOR THE PART ADDITION SUSTAINED BY THE LD. CIT(A) AND THE REVENUE IS IN A PPEAL FOR THE RELIEF GRANTED BY THE LD. CIT(A). 6.1 IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSE E THAT ON PAGES 24 & 25 OF THE PAPER BOOK ARE THE SEIZED PAPERS ON THE BASIS OF WHICH THE PRESENT ADDITION WAS MADE AND PARTLY CONFIRMED BY THE LD. CIT(A). AT THE OUTSET, HE HAS DRAWN OUR ATTENTION TO PAGE NO.2 4 OF THE PAPER BOOK, WHEREIN AGAINST THE NAME OF THE ASSESSEE, THE TOTAL AMOUNT MENTIONED IS RS.124.00 LAKHS COMPRISING OF RS.30.00 LAKHS BEING PAID TO THE BANGALORE SITES AND ESTATES RS.90.00 LAKHS BEING PA ID TO PES OFFICE ITA NO.438(B)/14 & 409(BANG)2014 6 AND RS.4.00 LAKHS PAID BY SECRETARY OFFICE. THEREA FTER, HE HAS DRAWN OUR ATTENTION TO PAGE NO.25 OF THE PAPER BOOK AND P OINTED OUT THAT ON THIS PAGE TWO AMOUNTS ARE MENTIONED AGAINST THE NAM E OF THE ASSESSEE BEING RS.77.50 LAKHS IN CASH AND RS.12.50 LAKHS BY PAY ORDER. THE TOTAL OF THESE TWO AMOUNTS COMES TO RS.90.00 LAKHS AND IT WAS THE SUBMISSION OF THE LD. AR OF THE ASSESSEE THAT TOTAL OF THESE TWO AMOUNTS IS ALREADY INCLUDED IN THE TOTAL AMOUNT OF RS.124 L AKHS NOTED IN PAGE NO.24 OF THE PAPER BOOK. FURTHER, HE HAS DRAWN OUR ATTENTION TO PAGE NO.38 TO 41 OF THE PAPER BOOK WHERE A REMAND REPORT SUBMITTED BY THE AO BEFORE THE LD. CIT(A) IS AVAILABLE. IT WAS POIN TED OUT THAT ON PAGE NO.2 OF THE REMAND REPORT, THE AO HAS NOTED THAT AS PER SEIZED MATERIAL THE TOTAL AMOUNT RECEIVED BY THE ASSESSEE IS RS.124 .00 LAKHS AND IF RS.77.50 LAKHS IS CONSIDERED SEPARATELY, THE INCOME OFFERED OF RS.68.75 LAKHS TOGETHER WITH RS.77.50 LAKHS WOULD EXCEED RS. 124.00 LAKHS AND ON THIS BASIS, IT WAS STATED BY THE DCIT, CENTRAL C IRCLE-4(1), BANGALORE, WHO HAS DONE THE ORIGINAL ASSESSMENT U/S 143(3) OF THE IT ACT, THAT THE ASSESSEES CONTENTION IS CORRECT. IT WAS THE SUBMI SSION OF THE LD. AR OF THE ASSESSEE THAT IN THE LIGHT OF THESE FACTS OF TH E PRESENT CASE, THE AMOUNT OF RS.77.50 LAKHS NOTED ON PAGE-25 OF THE PA PER BOOK WHICH IS ALREADY INCLUDED IN THE AMOUNT OF RS.124.00 LAKHS N OTED AT PAGE-25 OF THE PAPER BOOK AND THIS AMOUNT IS ALREADY OFFERED T O TAX BY THE ASSESSEE ALTHOUGH, IN TWO ASSESSMENT YEARS I.E PARTLY IN THE PRESENT ASSESSMENT YEAR AND PARTLY IN THE ASSESSMENT YEAR 2007-08. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH, THAT IT IS SETTLED LAW TH AT INCOME SHOULD BE ITA NO.438(B)/14 & 409(BANG)2014 7 TAXED IN CORRECT YEAR AND THEREFORE, WHEN THE REGIS TRY WAS AFFECTED IN THE PRESENT YEAR, HOW IT CAN BE ACCEPTED THAT PART AMOU NT WAS RECEIVED BY THE ASSESSEE IN THE LATER YEAR AND IT MAY BE THAT I T SHOULD BE OMITTED FROM THE TAXABLE INCOME OF THAT YEAR AND TAX PAID I N THAT YEAR AGAINST THAT INCOME MAY BE ADJUSTED AGAINST THE INCOME WHIC H IS BEING ADDED IN THE PRESENT YEAR. IN REPLY, LEARNED AR OF THE ASSE SSEE AGREED TO THIS PROPOSITION. 7. REGARDING THE PART ADDITION OF RS.8.75 LAKHS CO NFIRMED BY THE LD. CIT(A) HE SUBMITTED THAT IT IS NOTED BY THE AO AT PAGE 2 OF THE REMAND REPORT THAT AS PER PAGE NO.92 OF THE SEIZED MATERIAL AVAILABLE AT PAGE NO.24 OF THE PAPER BOOK, TOTAL PAYMENT RS.124. 00 LAKHS WAS RECEIVED BY THE ASSESSEE AGAINST SALE OF LAND AND T HE PAYMENT MADE THROUGH CHEQUE OF RS.2,25 LAKHS WAS TO THE FIRM AND THE SAME WAS OFFERED TO TAX BY THAT FIRM. IT WAS SUBMITTED THA T THE ASSESSEE BEING PARTNER HOLDING 25% IN THE FIRMS SHARE I.E 1/4 TH OF THE TOTAL AMOUNT OF RS.2,25 LAKHS IS RS.56.00 LAKHS APPROXIMATE WHICH W AS OFFERED IN THE HANDS OF THE FIRM AND THE BALANCE OF RS.68.75 LAKHS WAS OFFERED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2006-07 ON RECEIPT BASIS AND THEREFORE, NO FURTHER ADDITION IS JUSTIFIED IN THE PRESENT YEA R. 8. AS AGAINST THIS, THE LD. DR OF THE REVENUE SUPPO RTED THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT THE MATTE R MAY BE RESTORED TO THE FILE OF THE AO FOR A FRESH DECISION. ITA NO.438(B)/14 & 409(BANG)2014 8 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER PAGE NO.24 OF THE PAPER BOOK, OUT OF THE TOTAL SALE CONSIDERATION OF RS.4,57,50,000/-, THE AMOUNT STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE IS RS.124.00 LAKHS AND THIS AMOUNT OF RS.1 24.00 LAKHS INCLUDES THE AMOUNT OF RS.90.00 LAKHS BREAK-UP OF W HICH IS AVAILABLE ON PAGE 25 OF THE PAPER BOOK WHICH COMPRISES OF RS.77. 50 LAKHS IN CASH AND RS.12.50 LAKHS BY WAY OF PAY ORDER. UNDER THES E FACTS, IN OUR CONSIDERED OPINION, TOTAL AMOUNT THAT CAN BE TAXED IN THE HANDS OF THE ASSESSEE SHOULD NOT EXCEED THE AMOUNT OF CASH RECEI VED RS.77.50 LAKHS. OUT OF THIS AMOUNT OF RS.77.50 LAKHS, THE LD. CIT(A ) HAS CONFIRMED AN ADDITION OF RS.8.75 LAKHS AND IN THE FACTS OF THE P RESENT CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD.CI T(A) ON THIS ASPECT. THE BALANCE AMOUNT OF RS.68.75 LAKHS HAS BEEN OFFER ED TO TAX BY THE ASSESSEE TO THE EXTENT OF 50% IN THE PRESENT YEAR A ND THE BALANCE 50% FOR THE ASSESSMENT YEAR 2006-07. IN OUR CONSIDERED OPINION, WHEN THE SALE DEED WAS EXECUTED IN THE PRESENT YEAR, IT IS N OT ACCEPTABLE THAT THE BALANCE AMOUNT WAS RECEIVED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2006-07, PARTICULARLY WHEN NO COGENT EVIDENCE IN RE SPECT OF HIS CLAIM WAS PRODUCED BEFORE US OR BEFORE ANY OF THE AUTHORI TIES BELOW. THEREFORE, WE HOLD THAT THE AMOUNT OF RS.34,37,500/- SHOULD AL SO BE TAXED IN THE PRESENT YEAR IN ADDITION TO THE ADDITION UPHELD BY THE LD.CIT(A) OF RS.8.75 LAKHS. IN THIS MANNER, WE UPHOLD AN ADDITI ON OF ITA NO.438(B)/14 & 409(BANG)2014 9 RS.43,12,500/- OUT OF THE ADDITION MADE BY THE AO O F RS.77.50 LAKHS. THE REMAINING AMOUNT OF RS.34,37,500/- IS ALREADY O FFERED TO TAX BY THE ASSESSEE IN THE PRESENT YEAR. THEREFORE, TO THIS E XTENT, NO FURTHER ADDITION CAN BE MADE AND HENCE, THIS MUCH ADDITION IS BEING DELETED OUT OF THE TOTAL ADDITION MADE BY THE AO OF RS.77.50 LA KHS AND PARTLY DELETED BY THE LD. CIT(A). WE WOULD ALSO LIKE TO O BSERVE THAT IF THE ASSESSEE HAS DISCLOSED INCOME IN THE ASSESSMENT YEA R 2006-07 OF RS.34,37,500/- WHICH IS BEING TAXED IN THE PRESENT YEAR AND IF THE ASSESSEE CAN ESTABLISH THAT BOTH ARE SAME, THEN SUC H INCOME SHOULD NOT BE TAXED IN THE ASSESSMENT YEAR 2006-07 AND IF THE TAX HAS BEEN PAID BY THE ASSESSEE IN THAT YEAR, CREDIT FOR THE SAME BE A LLOWED IN THE PRESENT YEAR AGAINST THE ADDITION BEING UPHELD BY US OF RS. 34,37,500/- FROM THE DATE OF PAYMENT OF TAX FOR THE ASSESSMENT YEAR 2006 -07. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED, WHEREAS THE APPEAL OF THE REVENUE IS PARTLY ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (SUNIL KUMAR YADAV) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER BANGALORE: D A T E D : 17-06-2016 AM* ITA NO.438(B)/14 & 409(BANG)2014 10 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT U PLOADED, FURNISH THE REASON FOR DOING SO. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WH ICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER ITA NO.438(B)/14 & 409(BANG)2014 11