Bhausaheb Sheshrao Kachakure, Aurangabad V. Income-tax Officer,

ITA 45/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1956 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B; HEMANT KUMAR C LEUVA JAIN
• Assessee Lawyers: RAMESH N THETE
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 44AD; 2(14)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.45/PN/2016 #& & / ASSESSMENT YEAR : 2009-10 BHAUSAHEB SHESHRAO KACHAKURE, C/O. RAMESH N. THETE, PLOT NO.91, MAULI SAMARTHNAGAR, BEHIND UCO BANK, AURANGABAD -431001 PAN NO. BUZPK1542D . / APPELLANT V/S ITO, WARD-2(3), AURANGABAD . / RESPONDENT / APPELLANT BY : SHRI RAMESH N. THETE / RESPONDENT BY : SHRI HEMANT KUMAR C. LEUVA JAIN & B / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 06-11-2015 OF THE CIT(A)-II, AURANGABAD RELATING T O ASSESSMENT YEAR 2009-10. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN TAKEN BY TH E ASSESSEE THEY ALL RELATE TO THE ORDER OF THE CIT(A) IN CON FIRMING THE ADDITION OF RS.6,55,685/- MADE BY THE AO U/S.69A OF THE I.T. ACT. / DATE OF HEARING :12.04.2016 / DATE OF PRONOUNCEMENT: 15.04.2016 2 ITA NO.45/PN/2016 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AIR INFORMATI ON OBTAINED BY THE DEPARTMENT SHOWED THAT THE ASSESSEE HAS DEPOSITED RS.9,12,537/- IN HIS SAVINGS ACCOUNT MAINTAINED WITH BANK OF MAHARASHTRA. A NOTICE U/S.133(6) WAS ISSUED TO THE ASSE SSEE ON 30- 01-2012. IN RESPONSE TO THE SAME IT WAS STATED THAT THE CASH DEPOSITED WAS ATTRIBUTABLE TO SALE OF AGRICULTURAL LAND FOR T OTAL CONSIDERATION OF RS.25 LAKHS OUT OF WHICH THE SHARE OF TH E ASSESSEE WAS RS.15 LAKHS. VERIFICATION OF THE BANK STATEMENT SHOWED THAT THE ASSESSEE HAD DEPOSITED 15 LAKHS ON 19-02-2008. SINCE THE LAND SOLD WAS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) AND THE ASSESSEE HAD CLAIMED INVESTMENT IN RESIDENTIAL HOUSE, THE AO NOTED THAT NO PROOF OF INVESTMENT WAS PRODUCED BY THE ASSESS EE TO THIS EFFECT. FURTHER, THE ASSESSEE HAS SHOWN AGRICULTURAL INCOM E OF RS.6,80,000/- DETAILS OF WHICH WERE ALSO NOT PRODUCED. ON T HE BASIS OF THE ABOVE FACTS, THE AO ISSUED A NOTICE U/S.148 OF THE ACT AFTER RECORDING REASONS. 3.1 AFTER SEVERAL REMINDERS THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO. AFTER VERIFYING THE RE QUISITE DETAILS FILED BEFORE HIM THE AO ALLOWED THE CLAIM OF DEDUCTION OF RS.21,63,300/- U/S.54F TOWARDS PURCHASE OF RESIDENTIAL HOUSE. 3.2 AS REGARDS THE AGRICULTURAL INCOME IS CONCERNED, THE A SSESSEE SUBMITTED RECEIPT OF SALE OF SANTRA, MOSAMBI ETC. TO MD . SALEEM AND COMPANY BY ISSUE OF NET BILL OF RS.6,55,685/-. THE AO VERIFIED 7/12 EXTRACTS FOR THE F.Y. 2008-09 AND NOTED THAT AGAINST TH E NAME OF THE ASSESSEE BHAUSAHEB SHESHRAO KACHAKURE THE CROPS COT TON AND GOBI ARE APPEARING. FOR A.Y. 2007-08 ALSO CROPS COTTON AND M AIZE ARE APPEARING. IN VIEW OF THE ABOVE, THE AO OBSERVED THAT P RIMA-FACIE 3 ITA NO.45/PN/2016 THE CROPS SHOWN BY THE ASSESSEE TO HAVE BEEN SOLD TO MD. SALEEM AND COMPANY WERE NOT PRODUCED AT ALL. 4. THE AO, IN ORDER TO VERIFY THE GENUINENESS OF TRANSAC TIONS, SUMMONED MD. SALEEM AND CO. OF KACHKURE BY ISSUING SUMMO NS U/S.131. IN RESPONSE TO THE SUMMONS ISSUED BY THE AO, MR. SAYEED FAHIRUDDIN, MANAGER AND MR. MOHD. SAJED KHAN, SON OF THE A SSESSEE APPEARED BEFORE THE AO AND DENIED TO HAVE ISSUED ANY S UCH BILL TO THE ASSESSEE. THE AO OBSERVED FROM A CANCELLED BILL BEARING NO.2702 FROM THE BILL BOOK PRODUCED BEFORE HIM WHICH BEARS THE DE SCRIPTION OF RATE, HAMALI, COMMISSION, WASTAGE, SAFAYI, FREIGHT, ADVANCE ET C. WHICH WAS NOT THERE IN THE ONE PRODUCED BY THE ASSESS EE. IT WAS FURTHER STATED THAT IT WAS THE LETTER HEAD OF THE FIRM W HICH WAS MISUSED BY SOMEBODY FOR ISSUE OF FAKE BILL IN THE NAME OF THE IR FIRM. IN VIEW OF THE ABOVE, THE AO CONFRONTED THE ASSESSEE AN D ASKED HIM TO FURNISH HIS EXPLANATION OVER THE ABOVE DISCREPANCY. HO WEVER, THERE WAS NO SATISFACTORY EXPLANATION FROM THE SIDE OF THE ASSESSEE. IT WAS STATED THAT THE ASSESSEE WAS PRODUCING MOSAMBI AND HE NCE HE MAY BE GIVEN TIME TILL 16-01-2014 TO PRODUCE THE SUPPORT ING DOCUMENTS FROM THE TALATI. THE AO SUMMONED THE CONCERN ED TALATI TO ATTEND BEFORE HIM ALONG WITH LAND RECORDS MAINTAINED BY HIS OFFICE. THE TALATI SHRI P.N. BIRARI ATTENDED AND HIS STATEMENT WAS RECORDED ON OATH U/S.131(1)(B) OF THE ACT WHEREIN HE STATED THAT T HE CROP MOSAMBI IS NOT APPEARING IN THE NAME OF THE ASSESSEE NOR ANY OTHER NAME APPEARING IN GUT NO.117 FOR F.Y. 2008-09. IN VIEW OF THE STATEMENT OF TALATI AS WELL AS THE AUTHORIZED PERSONS OF M D. SALEEM AND COMPANY THE AO AGAIN ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING HIM TO SHOW CAUSE AS TO WHY THE INCOME SHOWN AGAINST SALE OF MOSAMBI AT RS.6,55,685/- SHOULD NOT BE TREA TED AS HIS UNEXPLAINED MONEY U/S.69A OF THE ACT. 4 ITA NO.45/PN/2016 5. IT WAS SUBMITTED THAT MOSAMBI MUST HAVE BEEN REMAIN ED TO BE INCLUDED IN THE LAND RECORD MAINTAINED AT TALATI OFFICE FOR THE F.Y. 2008-09 AS THESE WERE APPEARING IN 2006-07. HOWEVER T HE AO ON VERIFICATION OF LAND RECORDS SHOWN BY TALATI AND PLACED ON R ECORD NOTED THAT SUCH CROP IS NOT APPEARING IN F.Y. 2007-08 A ND 2009-10 ALSO. IN VIEW OF THE ABOVE AND CONSIDERING THE FACT THAT EVEN THE SALE PATTIS PRODUCED BY THE ASSESSEE WAS ALSO FOUND TO BE N ON-GENUINE, THE AO MADE ADDITION OF RS.6,55,685/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED MONEY U/S.69A OF THE I.T. ACT. W HILE DOING SO, HE RELIED ON THE DECISIONS OF HONBLE SUPREME COURT IN TH E CASE OF CIT VS. RAMAKRISHNA DEO REPORTED IN 35 ITR 312 AND THE DECISION IN THE CASE OF UDHAVDAS VS. CIT REPORTED IN 66 ITR 462. 6. BEFORE CIT(A) THE ASSESSEE PRODUCED A LETTER ISSUED B Y TALATI TO THE TAHSILDAR, AURANGABAD ON 09-06-2014 IN WHICH IT WAS STATED THAT THE LAND RECORD FROM F.YRS. 2004-05 TO 2011-12 SHOW THE NAME OF MOSAMBI FOR F.YRS. 2006-07 TO 2011-12. IT WAS FURTHER A RGUED THAT THE AO HAS NOT ALLOWED CROSS EXAMINATION OF THE CONCERN ED PERSONS WHOSE STATEMENTS WERE USED AGAINST THE ASSESSEE. IT WAS ARGUED THAT THE PROVISIONS OF SECTION 69A APPLIED BY THE AO IS ALS O NOT TENABLE SINCE THERE IS NO FINDING BY THE AO WITH RESPECT T O THE OWNERSHIP OF MONEY BY THE ASSESSEE. THE ASSESSEE ALSO A RGUED THAT PROVISIONS OF SECTION 44AD WILL BE APPLICABLE ON THE ASSESSEE. 7. HOWEVER, THE CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE AO. WHILE DOING SO, HE NOTED THAT THE TALATI IS AN INDEPENDENT GOVERNMENT OFFICIAL AND IS NOT AN INTERESTED PARTY AND THEREFORE HE SHOULD NOT HAVE MADE UNSUBSTANTIATED STATEMENT. THE FRUIT SELLER TO WHOM THE ASSESSEE HAS SOLD THE PRODUCTS HAS ALSO DENIED TO HAVE ISSUED AN Y SUCH BILLS. 5 ITA NO.45/PN/2016 DESPITE HAVING AMPLE OPPORTUNITY DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS NEVER DEMANDED FOR CROSS EXAMINATION. IT IS NOT THE CASE OF THE ASSESSEE THAT TH E EVIDENCES COLLECTED BY THE AO WERE NOT SHOWN TO HIM FOR HIS PERUSA L AND COMMENTS. 8. FURTHER, THE LETTER ISSUED BY THE TALATI FILED BY HIM WHIC H SHOWS ENTRY OF MOSAMBI ONLY DURING F.Y. 2006-07 AND 201 1-12 IS INCONCEIVABLE. ACCORDING TO HIM, MOSAMBI TREE IS NOT SEASON AL CROP OR AN ANNUAL CROP AND IS A PERENNIAL CROP. THEREFORE, IT IS IMPOSSIBLE THAT ONLY THE RECORDS FOR F.Y.2006-07 AND 2011-12 CAN SHOW MOSAMBI CROPS AND FOR REMAINING YEARS IT WILL NOT BE SHOWN. ACCORDING TO HIM, THE MOSAMBI TREE CONTINUES TO BEAR FRUIT S FOR 10 TO 12 YEARS BEFORE IT REQUIRES TO BE REMOVED. THEREFORE, IT IS IMPOSSIBLE FOR A TALATI OR AN OFFICIAL OR ANY PERSON NOT TO NOTICE MOSA MBI PLANTATION IN A GIVEN TRACT OF LAND. HE ACCORDINGLY HELD TH AT THE LETTER NOW PRODUCED BEFORE HIM IS OF NO CONSEQUENCE AND UNRELIA BLE BECAUSE IT GOES AGAINST THE NATURAL FACT OF DISCOVERY OF S OMETHING WHICH IS SO APPARENT THAT NO ONE CAN MISS. THEREFORE, T HE ORIGINAL 7/12 EXTRACTS PRODUCED AT THE TIME OF ASSESSMENT PRO CEEDING HAVE MORE EVIDENTIARY VALUE THAN THE LETTER NOW BEING RELIED ON BY THE ASSESSEE. HE FURTHER OBSERVED THAT THE ASSESSEE HAD N OT REQUESTED FOR ADMISSION OF THE SAID LETTER AS A NEW EVIDENCE UNDER R ULE 46A OF THE I.T. RULES. 9. THE CIT(A) FURTHER NOTED THAT THE ASSESSEE HAS ALSO CHALLENGED THE VALIDITY OF THE NOTICE ISSUED U/S.147/148. THE CIT(A) REJECTED TH E SAID GROUND HOLDING THAT THE SAID NOTICE WAS ISSUED ON TH E BASIS OF STATEMENT GIVEN BY THE ASSESSEE HIMSELF. THE AO HAD ISS UED THE SAID NOTICE AFTER RECORDING REASONS. THE VARIOUS DECISIONS RELIE D ON BY THE 6 ITA NO.45/PN/2016 ASSESSEE BEFORE HIM WERE DISTINGUISHABLE AND NOT APPLICABL E TO THE FACTS OF THE CASE. 10. AS REGARDS THE VALIDITY OF ADDITION U/S.69A IS CONCERN ED, HE HELD THAT THE SAID AMOUNTS WERE FOUND TO BE CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE. THEREFORE, HE WAS THE OWNER OF THE AMOUNTS BY VIRTUE OF POSSESSION AND BEING IN CONTROL OF THE MONEY . SINCE THE ASSESSEE IS A NON-FILER AND IS THE OWNER OF THE MONEY DE POSITED IN HIS BANK ACCOUNT AND NO BOOKS OF ACCOUNT WERE MAINTAINED, T HEREFORE, THE AO WAS FULLY JUSTIFIED IN MAKING THE ADDITION U/S.69A OF THE I.T. ACT. 11. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 12. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY CHALLENG ED THE ORDER OF THE CIT(A). HE SUBMITTED THAT DUE TO LACK OF P ROPER GUIDANCE, THE ADDITION HAS BEEN MADE BY THE AO U/S.69A T O THE TUNE OF RS.6,55,685/- ON ACCOUNT OF SALE OF MOSAMBI. HE SUBMITTED THAT THE LAND HELD BY THE ASSESSEE CONTAINED MOSAMBI TREES AND THE ASSESSEE HAS ALSO SOLD THE SAME. SINCE THE AO HAD NOT ALLOWED CROSS EXAMINATION OF THE PERSONS WHOSE STATEMENTS WERE RECOR DED AND USED AGAINST THE ASSESSEE, THEREFORE, THERE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HE SUBMITTED THAT IN THE INTEREST OF JUS TICE ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO SUBSTAN TIATE HIS CASE TO THE SATISFACTION OF THE AO. HE ALSO RELIED ON VARIOUS DECISION FILED IN THE PAPER BOOK. 13. THE LD. DEPARTMENTAL REPRESENTATION ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE AO AND THE CIT(A). HE SUBMITTED THAT DESPITE GIVEN REASONABLE OPPORTUNITY BY THE AO THE ASSESSEE WAS NON COOPERATIVE. FURTHER, HE HAS FILED DOCUMENTS WHICH HE COULD NOT 7 ITA NO.45/PN/2016 SUBSTANTIATE. THEREFORE, UNDER THE FACTS AND CIRCUMSTANC ES OF THE CASE THE ORDER OF THE CIT(A) SHOULD BE UPHELD. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE AO HAD ISSUED NOTICE U/S.133(6) ON THE GROUND THAT ASSESSEE HAS DEPOSITED RS .9,12,537/- IN HIS SAVINGS ACCOUNT MAINTAINED WITH BANK OF MAHARASHTRA . ON THE BASIS OF VARIOUS DETAILS FURNISHED BY THE ASSESSEE THE AO ACCEPTED THE CLAIM OF DEDUCTION U/S.54F FOR RS.21,63,300/-. HOWEVER, THE CLAIM OF THE ASSESSEE REGARDING AGRICULTURAL INCOME OF RS.6,55,685/- WAS DENIED BY THE AO ON THE GROUND THAT THE ASSESSE E COULD NOT SUBSTANTIATE THE AGRICULTURAL INCOME. WE FIND T HE AO REJECTED THE CLAIM OF AGRICULTURAL INCOME MAINLY ON THE GR OUND THAT THE 7/12 EXTRACTS FOR THE F.Y. 2008-09 SHOW COTTON AND GOBI BEING PRODUCED FROM THE LAND HELD BY THE ASSESSEE. THE MANAG ER OF MD. SALEEM AND COMPANY AND THE SON OF MD. SALEEM KHAN, PROPR IETOR OF THE FIRM M/S. SALEEM AND COMPANY APPEARED BEFORE THE A O AND DENIED TO HAVE ISSUED ANY SUCH BILL TO THE ASSESSEE. FUR THER, THE TALATI WHO WAS SUMMONED BY THE AO AND WHOSE STATEMENT WAS RECORDED HAD ALSO STATED THAT THE CROP MOSAMBI IS NOT APPEARING IN THE 7/12 EXTRACTS OF THE LAND HELD IN THE NAME OF THE AS SESSEE NOR IN THE NAME OF OTHER PERSONS APPEARING IN GUT NO.117. IN V IEW OF THE ABOVE AND IN ABSENCE OF ANY SATISFACTORY EXPLANATION GIVEN BY THE ASSESSEE THE AO REJECTED THE CLAIM OF AGRICULTURAL INCOME OF RS.6,55,685/- WHICH HAS BEEN UPHELD BY THE CIT(A). 8 ITA NO.45/PN/2016 15. FROM THE RECORD, WE FIND THE ASSESSEE DURING THE CO URSE OF APPEAL PROCEEDINGS, HAS FILED ANOTHER LETTER FROM TALATI WHICH SHOWS MOSAMBI TREES APPEARING IN THE 7/12 EXTRACTS FOR F.Y. 200 6-07 AND 2011-12. HOWEVER, THE AUTHENTICITY OF THE LETTER WAS NOT VERIFIED BY THE CIT(A) ON THE GROUND THAT THERE WAS NO REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE. THE EXTENT OF AGRICULTURAL LAND HELD BY THE ASSESSEE IS NOT DOUBTED BY THE AO. THEREAFTER, WHAT IS THE EXTENT OF OTHER AGRICULTURAL INCOME OUT OF SUCH LAND HAS NOT BEEN C ONSIDERED BY THE AO. THE RECORDS ALSO SHOW THAT THE ASSESSEE IS NOT DOING ANY BUSINESS AS THERE IS NO DISCUSSION BY THE AO IN THE BOD Y OF THE ASSESSMENT ORDER ON THIS ISSUE. UNDER THESE CIRCUMSTAN CES WHEN IT IS THE CLAIM OF THE ASSESSEE THAT ONLY SOURCE OF INCOME IS AGRICULTURE, THEREFORE, IN OUR OPINION, THE MATTER REQUIRES A RE-VISIT T O THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE WITH NECESSARY EVIDENCE TO HIS SATISFACTION. NEEDLESS TO SAY THE AO SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER LAW. WE HOLD A ND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE A CCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15-04-2016 SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 15 TH APRIL 2016 9 ITA NO.45/PN/2016 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) , / THE CIT(A)-II, AURANGABAD 4. % / THE CIT-II, AURANGABAD 5 . 6. ( ++,, ,, / DR, ITAT, B PUNE; 0 / GUARD FILE. / BY ORDER , ( + //TRUE COPY // ( + //TRUE COPY// 23 + , / SR. PRIVATE SECRETARY ,, / ITAT, PUNE