Shri Mahendra Kumar Pandey Indore, Indore V. ITO 2 (1), Indore, Indore

ITA 441/Ind/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8330 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA; R P MOURYA
• Assessee Lawyers: KAPIL RATHI
• Keywords: Unexplained investment; Source of fund
• Section: 143(3); 69; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.441/IND/2017 ASSESSMENT YEAR: 2007-08 MR. MAHENDRA KUMAR PANDEY 8/5, NIHALPURA JAWAHAR MARG, INDORE / VS. ITO-2(1) INDORE ( APPELLANT ) ( RE VENUE ) PAN: AGQPP2969M APPELLANT BY SHRI KAPIL RATHI , CA RE VENUE BY SMT. ASHIMA GUPTA CIT - DR & SHRI R.P. MOURYA SR. DR DATE OF HEARING: 26.06.2019 DATE OF PRONOUNCEMENT: 05.07.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL BY ASSESSEE PERTAINING TO A.Y. 2007-08 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, INDORE, (IN SHORT CIT(A)), DATED 16.03.2016 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(HER EINAFTER CALLED AS THE ACT) FRAMED ON 30.11.2011 BY ITO-2(1), IND ORE. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: MAHENDRA KUMAR PANDEY ITANO.601/IND/2018 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN MAINTAINING AN ADDITION OF RS.5,08,100/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY. THAT THE ADDITION BEING WRO NG, REQUIRED TO BE DELETED. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, AME ND, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR AN Y OF THE GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING IF NECESSITY SO ARISES. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM SALAR Y AND SHARE OF PROFIT FROM FIRM. INCOME OF RS.71,510/- WAS DECLARE D IN THE E-RETURN FILED ON 17.11.2007. SUBSEQUENTLY, NOTICE U/S 148 O F THE ACT WAS ISSUED FOR REOPENING OF THE ASSESSMENT FOR THE ALLE GED ESCAPEMENT OF UNACCOUNTED OR INVESTMENT OF RS.5,06,100/- TOWAR DS PURCHASE OF PROPERTY. DURING THE COURSE OF REASSESSMENT PROCEED INGS ASSESSEE GAVE VARIOUS DETAILS ABOUT THE SOURCE OF INVESTMENT FOR THE PURCHASE OF PROPERTY VALUING AT RS.17,06,100/-. LEA RNED ASSESSING OFFICER (IN SHORT LD. AO) WAS NOT CONVINCED WITH TH E SOURCE OF INVESTMENT TOTALLING TO RS.5,08,100/- AND ADDED IT TO THE INCOME DISCLOSED BY THE ASSESSEE AT RS.1,40,873/- IN THE R ETURN OF INCOME FILED IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT. I NCOME ASSESSED AT RS.6,48,973/-. 4. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) BUT FAILED TO GET ANY RELIEF, AS THE LD. CIT(A) CON SIDERED THE DATE OF PURCHASE OF PROPERTY AS 31.03.2006 ON THE BASIS OF STAMP PURCHASED BUT THE REGISTRATION FORMALITIES WERE COM PLETED ON 13.04.2006. LD. CIT(A) ONLY ACCEPTED THE LOAN AMOUN T RECEIVED FROM MAHENDRA KUMAR PANDEY ITANO.601/IND/2018 3 HSBC, BANK AT RS.11,98,000/- AND CONFIRMED THE ADDI TION OF RS.5,08,100/- MADE BY THE LD. AO. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 6. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE ST ATEMENT OF FACTS FURNISHED BEFORE THE LD. CIT(A) SUBMITTED THAT THE COMPLETE DETAILS OF SOURCES OF PAYMENT OF RS.17,06,100/- FOR PURCHAS E OF PROPERTY WERE FILED WHICH INCLUDED THE LOAN FROM HSBC BANK, ADVANCE RENT DEPOSIT, RECEIPT FROM SALE OF PROPERTY, LOAN FROM W IFE AND CASH WITHDRAWALS FROM BANKS. HE PRAYED THAT THE IMPUGNED ADDITION MAY BE DELETED, AS THE SOURCE STANDS EXPLAINED. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF THE BOTH LOWER AUTHO RITIES. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. SOLE GRIEVANCE OF THE ASSESSEE IS AGAINS T THE FINDING OF THE LD. CIT(A) CONFIRMING THE ADDITION FOR UNEXPLAINED INVESTMENT OF RS.5,08,100/- MADE BY THE LD. AO. WE OBSERVE THAT T HE ASSESSEE HAD PURCHASED PROPERTY SITUATED AT MOTI TAVELA INDO RE FOR A CONSIDERATION OF RS.15,51,000/- AND INCURRED STAMP DUTY AND REGISTRATION CHARGES OF RS.1,55,100/- THEREBY MAKIN G TOTAL INVESTMENT OF RS.17,06,100/-. THE SALE DEED OF THE ABOVE STATED PROPERTY WERE PREPARED ON THE STAMP PAPER DATED 31. 03.2006 AND IT WAS FINALLY REGISTERED ON 13 TH APRIL 2006. IN THE INSTANT CASE THE DISPUTE IS ONLY WITH REGARD TO THE SOURCE OF INVEST MENT OF RS.5,08,100/- WHICH IS CLAIMED BY THE ASSESSEE TO H AVE BEEN PAID ON VARIOUS DATES AFTER 31.03.2006. FOR SAKE OF CLAR IFICATION WE NEED TO STATE THAT IN THE PRESENT CASE WE ARE NOT ADJUDI CATING THE ISSUE MAHENDRA KUMAR PANDEY ITANO.601/IND/2018 4 RELATING TO TRANSFER OF PROPERTY AND ALSO NOT DECID ING THE ISSUE AS TO WHETHER THE PURCHASE OF PROPERTY FALLS UNDER F.Y. 2 005-06 OR F.Y. 2006-07. WE ARE ONLY CONFINED TO THE ADJUDICATION O F THE ISSUE ABOUT THE SOURCE OF INVESTMENT ALLEGED TO BE MADE B Y THE ASSESSEE FOR PURCHASE OF PROPERTY. 9. THE SOURCE OF THE INVESTMENT OF RS.17,06,100/- A S STATED BY THE LD. COUNSEL FOR THE ASSESSEE IS REPRODUCED AS FOLLO WS: PARTICULAR CLEARING DATE AMOUNT PAYMENT OUT OF RECEIPT FROM SALE OF PROPERTY 10/04/2006 TO 16/04/2006 2,50,000 REN T DEPOSIT (IN CASH) SECOND WEEK OF APRIL 2006 48,000 CURRENT AND ADVANCE RENT APRIL - MAY 2006 40,000 HSBC PAY ORDER NO.002840 09/05/2006 8,25,000 HSBC PAY ORDER NO. 002839 09/05/2006 3,73,000 SAPNA SAHU CHQ. NO.114738 16/05/2006 1,21,000 CASH PAID OUT OF BANK WITHDRAWALS (SAVI NGS) ATM CASH 07/04/2006 10,000 CASH WITHDRAWAL CHQ. NO.114740 22/04/2006 15,000 CASH WITHDRAWAL CHQ. NO.526621 10/05/20 0 6 10,000 MISC . CASH PAYMENT TILL 16/05/2006 14,100 TOTAL PAYMENT MADE FOR REGISTERED PROPERTY 17,06,100 10. FROM PERUSAL OF THE ABOVE CHART WHICH WAS ALSO FURNISHED BY THE ASSESSEE BEFORE FIRST APPELLATE AUTHORITY, SOUR CE OF FUNDS HAVE BEEN EXPLAINED WITH RESPECTIVE DATES. AS REGARDS TH E HSBC BANK LOAN OF RS.11,98,000/-, THERE IS NO DISPUTE AT THE END OF BOTH THE MAHENDRA KUMAR PANDEY ITANO.601/IND/2018 5 LOWER AUTHORITIES. THE DISPUTE IS ONLY WITH REGARD THE SOURCE OF RS.5,08,100/-. 11. THE ASSESSEES CLAIM OF INVESTMENT OF RS.2,50,0 00/- OUT OF THE RECEIVED FROM SALE OF OTHER HOUSE PROPERTY HAVE MER IT AS THE ASSESSEE HAS SHOWN THE GROSS CONSIDERATION IN ITS I NCOME TAX RETURN ALONG WITH PLACING PROOF OF HAVING RECEIVED SALE CO NSIDERATION IN CASH DURING THE FIRST TWO WEEKS OF APRIL 2006. THE GENUINENESS OF THE TRANSACTIONS OF RECEIVING SALE CONSIDERATION IN CASH FROM SALE OF PROPERTY IS NOT DISPUTED. WE, THEREFORE, ALLOW THE ASSESSEES CLAIM OF SOURCE OF FUNDS OF RS.2,50,000/- USED TO INVESTING IN THE PURCHASE OF PROPERTY. 12. AS REGARDS THE ADVANCE RENT DEPOSIT AND ADVANCE RENT OF RS.88,000/- IS CONCERNED, WE OBSERVE THAT THE ASSES SEE IS REGULARLY SHOWING INCOME FROM HOUSE PROPERTY. NECESSARY EXPLA NATION WERE GIVEN BEFORE THE LD. AO WHICH SEEMS TO HAVE BEEN MI SINTERPRETED BY THE LD. AO AND THEREFORE, THE SOURCE OF RS.88,000/- USED IN PURCHASE OF PROPERTY IS ALSO EXPLAINED. 13.THE ASSESSEE ALSO DESERVES RELIEF FOR THE CASH W ITHDRAWAL OF RS.10,000/- MADE THROUGH ATM ON 7 TH APRIL 2006, MISC. CASH PAYMENT OF RS.14,100/- HAVING ITS SOURCE FROM ACCUM ULATED PAST SAVINGS. 14. HOWEVER, WE FIND NO MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE FOR THE SOURCE OF INVESTMENT CLAIM ED TO HAVE BEEN RECEIVED FROM LOAN TAKEN FROM WIFE AT RS.1,21,000/- VIDE CHEQUE DATED 16.05.2006 AND WITHDRAWAL FROM BANK POST 13.0 4.2006 AT RS.15,000/- AND RS.10,000/- AS ALL THESE TRANSACTIO NS HAVE TAKEN MAHENDRA KUMAR PANDEY ITANO.601/IND/2018 6 PLACE AFTER 13 TH APRIL 2006. SINCE THE SALE DEED HAS BEEN REGISTERE D ON 13.04.2006 WHEREIN THE SELLER HAS ACCEPTED TO HA VE RECEIVED THE TOTAL SALE CONSIDERATION, THEIR HARDLY REMAINS ANY POSSIBILITY TO ACCEPT THE CONTENTION THAT SOME PART OF THE SALE CO NSIDERATION WAS PAID IN CASH TO THE SELLER AFTER 13.04.2006 AND THE REFORE, THE ALLEGED INVESTMENT OF RS.1,21,000/- HAVING ITS NEXUS FROM L OAN TAKEN FROM WIFE AND CASH OF RS.25,000/- PAID OUT OF THE WITHDR AWALS FROM BANK AFTER 13.04.2006 CANNOT BE TREATED AS PAYMENT MADE FOR PURCHASE OF THE PROPERTY IN QUESTION AND THEREFORE THE SUM O F RS.1,46,000/- (RS.1,21,000+15,000+10,000) HAS BEEN RIGHTLY ADDED AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 15. TO SUMMARIZE, WE ARE OF THE CONSIDERED VIEW THA T OUT OF THE TOTAL ADDITION FOR UNEXPLAINED INVESTMENT OF RS.5,0 8,100/- ASSESSEE DESERVES RELIEF OF RS.3,62,100/- AS THE SOURCE OF T HE SAID AMOUNT IS EXPLAINED FROM GENUINE SOURCES. WE, ACCORDINGLY PAR TLY ALLOW THE ASSESSEES APPEAL AND SUSTAIN THE ADDITION U/S 69 F OR UNEXPLAINED INVESTMENT OF RS.1,46,000/-. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 05.07.201 9. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 05/07/2019 CTX? P.S/. . . MAHENDRA KUMAR PANDEY ITANO.601/IND/2018 7 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR