The Asstt. Commr. of Income Tax, Cen.Circle-2, RAJKOT-GUJARAT V. M/s Shree Rang Developers, Kheda

ITA 447/RJT/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7752 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-03-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT , ! '# $ , % ! & ' BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER #./ I.T.A. NO.447/RJT/2016 ( / ASSESSMENT YEAR : 2007-08) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIR 2, RAJKOT. / VS. M/S. SHREE RANG DEVELOPERS C/O. NITINBHAI MANIBHAI PATEL, 47, VAISHNAV TOWNSHIP, AT. POST: BAKROL, TAL: ANAND, DIST: KHEDA. !* # ./ + # ./ PAN/GIR NO. : AAGFS 6320 P ( *, / APPELLANT ) .. ( -*, / RESPONDENT ) *, . / APPELLANT BY : SHRI USHA SHROTE, D.R. -*, / . / RESPONDENT BY : SHRI D. M. RINDANI, A.R. 0 1 / 2 / DATE OF HEARING 14 /03/2018 34 / 2 / DATE OF PRONOUNCEMENT 09/04/2018 5 / O R D E R PER MAHAVIR PRASAD JUDICIAL MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE REVENUE AGAINST THE APPELLATE ORDER OF THE COMMISSI ONER OF INCOME TAX(APPEALS)-11, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-11/243-R/CC-2-RJT/2015-16 DATED 30/09/201 6 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) R.W .S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE ACT') DATED 16/03/2015 RELEVANT TO ASSESSMENT YEAR (AY) 2007-08 . ITA NO.447/RJT/ 2016 ACIT VS. M/S. SHREE RANG DEVELOPERS A.Y. 2007-08 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER:- (1). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION OF UNEXPLAINED RECEIPTS TO THE TUNE OF RS. 1,11,00,000/-. (2). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO . (3). IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO TH E ABOVE EXTENT. 3. BRIEF FACTS OF THE CASE ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED U/S.147 OF THE ACT. THE ASSESSEE FURNISHED RETURN OF INCOME OF RS.NIL ON 18/02/2014. DURING THE COURSE O F SEARCH ON 27/05/2013 IN THE CASE OF SHRI VINODRAI BHAICHAND P AREKH AT HIS RESIDENTIAL PREMISES IN RAJKOT, AN AGREEMENT TO SAL E OF LAND BEARING SEVERAL RS NUMBERS OF VILLAGE RAVAL, TAL WAGHODIA, DIST. BARODA WAS FOUND AND SEIZED AND INVENTORISED. AS PER THE SATAK AT KARAR, SHRI PIYUSH VINODRAI PAREKH HAD MADE AN ADVANCE PAYMENT OF RS.1,11,00,000/- TO THE ASSESSEE FOR PURCHASE OF TH E SAID LAND. DURING THE COURSE OF RECORDING STATEMENT OF SHRI PIYUSH VI NODRAI PAREKH, STATED THAT AN ADVANCE OF RS.1,11,00,000/- IN CASH WAS PAID TO M/S. SHREE RANG DEVELOPERS IN F.Y. 2006-07 FOR THE PURCH ASE OF THE SAID LAND. AS PER TERMS OF THE AGREEMENT THE ENTIRE AMOU NT WAS TO BE PAID WITHIN ONE YEAR OF THE DATE OF AGREEMENT. 4. THE AO MADE AN ADDITION ON THE GROUND THAT SHRI PIYUSH PAREKH CONFIRMED IN HIS STATEMENT RECORDED U/S.132( 4) OF THE ACT THAT THE ADVANCE PAID TO THE ASSESSEE WAS RECEIVED BACK BY HIM BUT HE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS S TATEMENT. SIMILARLY, STATEMENT OF SHRI NILESH M. DESAI, ONE O F THE PARTNERS OF THE ASSESSEE FIRM WAS RECORDED BY THE DDIT (III) BARODA , WHEREIN, IT WAS STATED BY SHRI NILESH M. DESAI THAT THE ADVANCE REC EIVED FROM PIYUSH PARIKH WAS RETURNED BACK TO HIM. THE DDIT (III) IN HIS REPORT ITA NO.447/RJT/ 2016 ACIT VS. M/S. SHREE RANG DEVELOPERS A.Y. 2007-08 - 3 - MENTIONED THAT THE STATEMENT OF SHRI NILESH M. DESA I WAS NOT SUPPORTED BY ANY EVIDENCE. MOREOVER, THE AMOUNT WAS NOT REFLECTED IN THE BOOKS OF THE ASSESSEE OR HIS PARTNERS OR IN THE BOOKS OF ANY ACTUAL LAND OWNERS. IT WAS ALSO MENTIONED BY THE AO THAT THE SATAKHAT WAS REGISTERED WITH PUBLIC NOTARY WHEREIN THE RECEIPT OF CASH ADVANCE WAS ALSO MENTIONED, HOWEVER, THE ASSES SEE DID NOT FURNISH ANY DOCUMENT REGARDING RETURNING BACK THE M ONEY TO THE BUYER. THEREFORE, THE AO HELD THAT THE ADVANCE RECE IVED IN CASH AND NOT SHOWN IN THE BOOKS OF ACCOUNT WAS INCOME OF THE ASSESSEE AND THE SAME WAS ADDED ACCORDINGLY. 5. AGAINST THE SAID ADDITION, ASSESSEE PREFERRED FI RST STATUTORY APPEAL, LD. CIT (A) PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. 6. NOW DEPARTMENT IS BEFORE US. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. THE ASSESSEE CASE WAS RE-OPENED ON THE BASIS OF AGREEMENT TO SALE FOUND AND SEIZED IN PURSUANCE TO SEARCH CONDUC TED U/S.132 OF THE ACT AT PREMISES OF SHRI PIYUSH V. PAREKH AT RAJ KOT ON 27/05/2013. AS PER THE AGREEMENT, ASSESSEE FIRM HAS MADE AN AGREEMENT FOR SALE OF AGRICULTURAL LAND FOR TOTAL C ONSIDERATION OF RS.10,51,00,000/- AND OUT OF WHICH RECEIVED AN ADVA NCE OF RS.1,11,00,000/- FROM SHRI PIYUSH V. PAREKH OF RAJK OT. 8. LATER ON, SAID AMOUNT WAS RETURNED BACK BY THE A SSESSEE. SAME IS MENTIONED IN THE ASSESSMENT ORDER IN PARA 5(B) A ND BUYER HAS ALSO CONFIRMED THE SAME IN HIS STATEMENT RECORDED U/S.13 2(4). 9. IN SUPPORT OF ITS CONTENTION ASSESSEE CITED A JU DGMENT OF DELHI HIGH COURT IN THE MATTER OF CIT VS. DELHI APARTMENT S PVT. LTD. (2013) 32 TAXMAN 381(DELHI), WHEREIN, IT IS OBSERVED THAT: ITA NO.447/RJT/ 2016 ACIT VS. M/S. SHREE RANG DEVELOPERS A.Y. 2007-08 - 4 - WHERE ASSESSEE RECEIVED ADVANCE IN YEAR UNDER CONS IDERATION FOR SALE OF LAND AND CONDITIONS OF EXECUTION OF WRITTEN AGREEMENT AND HANDING OVER OF POSSESSION HAD NOT TAKEN PLACE IN T HAT YEAR, THERE WAS NO TRANSFER AND, THUS, NOTHING COULD BE BROUGHT TO TAX IN ASSESSMENT YEAR UNDER CONSIDERATION. 10. LD. CIT(A) HAS ALSO RELIED UPON THE SAME JUDGME NT, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT ORDER OF THE CIT(A) DOES NOT REQUIRE ANY KIND OF INTERFERENCE AT OUR END, HENCE, APPEAL IS DISMISSED. 11. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 09 / 0 4 /201 8 SD/- SD/- ( ) ($ ) ! % ! ( PRADIP KUMAR KEDIA ) ( MAHAVIR PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 09/ 04 /2018 PRITI YADAV, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -*, / THE RESPONDENT. 3. #8# 2 92 / CONCERNED CIT 4. 92 () / THE CIT(A)- 11, AHMEDABAD. 5. :; < %2%0 , , /DR,ITAT, RAJKOT 6. < = 1 / GUARD FILE. / BY ORDER, - :2 %2 //TRUE COPY// / ! '#$ ( DY./ASSTT.REGISTRAR) ! $%! &, / ITAT, RAJKOT