Smt. Sunita Sharma, Gwalior V. I.T.O.,Ward-3(2), Gwalior

ITA 469/AGR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0319 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Unexplained investment; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 469/AGRA/2012 ASSTT. YEAR : 2007-08 SMT. SUNITA SHARMA, VS. INCOME-TAX OFFICER, W/O SHRI HARISH SHARMA, WARD 3(2), GWALIOR. NEHRU COLONY, THATIPUR, GWALIOR. (PAN: APEPS 6371 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 08.03.2013 DATE OF PRONOUNCEMENT OF ORDER : 15.03.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A), GWALIOR DATED 13.08.2012 FOR THE ASSESSMENT YEAR 20 07-08, CHALLENGING THE ADDITION OF RS.11,36,160/- ON ACCOUNT OF UNEXPLAINE D INVESTMENT MADE IN THE HOUSE. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MA TERIAL AVAILABLE ON RECORD. ITA NO. 469/AGRA/2012 2 3. THE FACTS OF THE CASE ARE THAT WHILE MAKING ADDI TION OF RS.11,36,160/-, THE AO HAS MENTIONED IN THE ASSESSMENT ORDER AS UNDER : DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE P URCHASED ONE HOUSE PROPERTY SITUATED AT JIWAJI NAGAR, MAIN R OAD, GWALIOR FROM SMT. KAMALA DIXIT, D/O SHRI PREM BIHARI LAL DI XIT, R/O 374, JIWAJI NAGAR, GWALIOR ON 15.02.2007 FOR RS. 10 LAKH S AND INCURRED EXPENDITURE OF RS. 1,36,160/- ON REGISTRATION CHARG ES. VIDE LETTER DATED 26.10.2009 ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF INVESTMENT MADE IN PURCHASE OF THIS PROPERTY. IN CO MPLIANCE TO THIS QUERY THE ASSESSEE FILED WRITTEN REPLY DATED 03.07. 2009 IN WHICH SHE HAS STATED THAT THE SOURCE OF INVESTMENT MADE IN PU RCHASE OF THIS PROPERTY IS LOAN OF RS. 8 LACS TAKEN FROM SYNDICATE BANK AND SELF FINANCE. ON GOING THROUGH THE SALE DEED FILED BY TH E ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. IT IS SEEN THAT PAYMENT S HAVE BEEN MADE TO THE SELLER AS UNDER: (A) RS. 3,88,000/- ON 21.08.2006 AT THE TIME OF NO TARY. (B) RS. 4,12,000/- BANK LOAN PAID. (C) RS. 1,50,000/- ON 10.01.2007 (D) RS. 25,000/- ON 15.02.2007 THE ASSESSEE ALSO FURNISHED COPY OF LOAN ACCOUNT N O. 77807200000128 FOR THE PERIOD FROM 20.02.2007 TO 31 .01.2009. ON PERUSAL OF THIS BANK STATEMENT, IT IS SEEN THAT LOA N O F RS. 8 LACS HAS BEEN DISBURSED TO THE ASSESSEE ON 20.02.2007 WHEREA S THE ASSESSEE MADE ALL THE PAYMENTS TO THE SELLER OF THE PROPERTY PRIOR TO THE DISBURSEMENT OF THE LOAN. THUS, THE ASSESSEE HAS FA ILED TO EXPLAIN THE SOURCE OF INVESTMENT MADE IN PURCHASE OF ABOVE PROP ERTY SATISFACTORILY AND THE TOTAL INVESTMENT OF RS. 11,3 6,160/- MADE BY THE ASSESSEE IN THE PURCHASE OF THE ABOVE MENTIONED PRO PERTY IS TREATED AS UNEXPLAINED INVESTMENT MADE IN PURCHASE OF PROPERTY AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3.1 THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT( A) AND DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELLANT HAS SUBMITTED AS UNDER:- ITA NO. 469/AGRA/2012 3 DURING THE YEAR UNDER QUESTION THE APPELLANT PURCH ASED A RESIDENTIAL HOUSE AT JIWAJI NAGAR, GWALIOR AT A COS T OF RS. 11,36,160.22 THE DETAILS WERE AS UNDER:- DATE DESCRIPTION AMOUNT (RS.) REMARKS 21.08.2006 CASH PAID 388000.00 ADVANCE PAYMENT AGAI NST THE COST OF HOUSE 10.01.2007 CASH PAID 150000.00 -DO- 09.02.2007 CASH PAID 12000.00 -DO- 09.02.2007 AMOUNT PAID THROUGH APPELLANTS HUF 400000.00 -DO- 15.02.2007 PAID THROUGH BANKERS CHEQUE 25000.00 -DO- 15.02.2007 CASH PAID 152611.00 FOR COST OF STAMPS & REGN. FEE ETC 31.03.2007 INTEREST PAID 5849.00 HOUSE LOAN INTERES T CAPITALIZED TOTAL 1136160.22 IT IS TO BE NOTED HERE THAT THE ABOVE NAMED APPELLA NT APPLIED FOR A BANK LOAN OF RS. 8.00 LACS FOR THIS HOUSE. DU E TO DELAY IN SANCTIONING AND DISBURSEMENT BY THE BANK AND STATUT ORY OBLIGATION TO PURCHASE THE HOUSE ON OR BEFORE 15.02.2007, THE APP ELLANT HAD TO MADE ALTERNATE ARRANGEMENTS TO PURCHASE THE HOUSE. THIS WAS A FACT IF APPELLANT WAITS FOR DISBURSEMENT OF THE LOAN TO PUR CHASE THE HOUSE IT MAY CAUSED SOME LOSSES OF ADVANCE GIVEN FOR PURCHAS E OF HOUSE AND THE HOUSE MAY BE SOLD TO SOME ELSE. THE IMMEDIATE A RRANGEMENTS MADE BY THE APPELLANT WERE REPAID BY THE APPELLANT THROUGH ACCOUNT PAYEE CHEQUE IMMEDIATE AFTER THE REIMBURSEMENT OF T HE HOUSE LOAN OF RS. 8.00 LACS. IT IS RELEVANT TO SAY HERE THAT THE ALTERNATE ARRANGEMENTS MADE BY THE APPELLANT WERE DULY RECORDED IN THE BOO KS OF ACCOUNTS MAINTAINED BY THE APPELLANT WHICH WERE ALSO PRODUCE D BEFORE THE AO ITA NO. 469/AGRA/2012 4 DURING THE SCRUTINY PROCEEDINGS AND THE AO DID NOT POINTED OUT ANY DEFECT IN THE SAME AND ACCEPTED AS SUCH. DURING THE ASSESSMENT PROCEEDINGS THE AO ASKED TO PRODUCE THE SOURCES TO PURCHASE THE HOUSE. SINCE THE APPELL ANT PRODUCED THE BOOKS OF ACCOUNTS, CASH/BANK FLOW STATEMENTS IN WHI CH ALL THE TRANSACTIONS, IN THIS REGARDS, WERE ENTERED BUT THE LD. A.O. NEITHER REJECT THE BOOKS OF ACCOUNTS ETC. NOR ACCEPT THE TR ANSACTIONS WITH REGARD TO PURCHASE OF HOUSE AND ARBITRARILY ADDED T HE ENTIRE AMOUNT OF HOUSE IN THE TOTAL INCOME OF THE APPELLANT. THE BOOKS OF ACCOUNTS, CASH BOOK, CASH/BANK FLOW STATEMENT AND PROOF OF CR EDITWORTHINESS OF THE HUF WHICH POSSESSED ABOUT 250 BIGHAS OF AGRICUL TURAL LAND AT DISTT. SHEOPUR IS ENCLOSED. THE CONFIRMATION OF THE HUF IS ALSO FILED. 3.2 THE LD. CIT(A), HOWEVER, CONSIDERING THE FACTS OF THE CASE CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 2.2 AND 2.3 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 2.2 APPELLANTS SUBMISSIONS ALONGWITH ASSESSMENT O RDER HAVE BEEN CONSIDERED CAREFULLY. ASSESSMENT RECORDS HAVE ALSO BEEN PERUSED. AS PER QUESTIONNAIRE DTD. 30.01.2009 ISSUE D ALONGWITH NOTICE U/S 142(1), THE APPELLANT HAS BEEN ASKED TO GIVE DE TAILS OF FIXED ASSETS OF RS. 30,01,273/- SHOWN AS PER THE BALANCE SHEET A LONGWITH DATE & MODE OF ACQUISITION AND EXPLAIN THE SOURCE OF INVES TMENT WITH DOCUMENTARY EVIDENCE. VIDE LETTER DTD. 03.07.09, TH E APPELLANT HAS STATED THAT LAND & BUILDING BEARING MUNICIPAL NO. 1 7/1350, WARD NO.22, JIWAJI NAGAR HAS BEEN PURCHASED WITH THE FIN ANCIAL HELP TAKEN FROM SYNDICATE BANK, GWALIOR. THE APPELLANT HAS ALS O SUBMITTED COPY OF LAND DEED, BANK LOAN STATEMENTS & BANK CERTIFICA TES IN SUPPORT. AFTER PERUSAL OF THESE DETAILS, AO HAS INFORMED THE APPELLANT VIDE LETTER DTD. 26.10.09 THAT SALE DEED HAS BEEN EXECUT ED FOR RS. 10,00,000/- ON 21.02.2007 FOR WHICH HOUSING LOAN OF RS. 8,00,000/- HAS BEEN SANCTIONED BY THE BANK ON ITS SECURITY. TH EREFORE, SOURCE OF INVESTMENT WITH DOCUMENTARY EVIDENCE BE EXPLAINED O N DATE OF HEARING FIXED FOR 03.11.2009. IN RESPONSE, THE APPE LLANT HAS SUBMITTED AS UNDER VIDE LETTER DTD. 12.11.09: ITA NO. 469/AGRA/2012 5 THE MODE, ACQUISITION & PAYMENT OF THE BUILDING P URCHASED AT JIWAJI NAGAR- THE COPY OF ACCOUNT IN THE BOOKS OF H E ABOVE NAME ASSESSEE IS ENCLOSED HEREWITH FROM PAGE NO. 4 OF TH IS WRITTEN SUBMISSION. FURTHER TO SAY THAT THE BUILDING PURCHA SED AT RS. 10.00 LACS ONLY HOWEVER THE STAMP DUTY PAID ON THE AMOUNT OF 14.47 LACS ONLY HOWEVER THE STAMP DUTY PAID ON THE AMOUNT OF 1 4.47 LACS INSTEAD OF 19.47 LACS AS STATED IN QUERY LETTER AT 26.10.20 09. THE DIFFERENCE IN ACTUAL AMOUNT & MOUNT AS PER GOVT. GUIDE LINES WAS DUE TO THE INFERIOR FRONT AND LOCATION OF THE BUILDING. COPY OF BUILDING ACCOUNT AT JIWAJI NAGAR IN APPELL ANTS BOOKS HAS ALSO BEEN SUBMITTED AS UNDER: ................................................... ................................................... ................................................ DATE PARTICULARS VCH. TYPE VCH. NO. DEBIT CREDIT ................................................... ................................................... ................................................ 21.08.2006 TO CASH ADVANCE PAYMENT 13 3,88,000.00 10.01.2007 TO CASH PART PAYMENT PAYMENT 51 1,50,000.00 09.02.2007 TO CASH PART PAYMENT PAYMENT 54 12,000.00 TO HUF ACCOUNT RUNNING PAYMENT JOURNAL 2 4,00,000.00 15.02.2007 TO CASH FINAL PAYMENT PAYMENT 58 25,000.00 TO CASH PAID FOR STAMPS ETC PAYMENT 59 1,52,611.00 31.03.2007 TO SYNDICATE BANK CH.NO. INTT. ADJUSTED PAYMENT 70 8.549.22 11,36,160.22 BY CLOSING BALANCE 11,36,160.22 11,36,160.22 11,36,160.22 ITA NO. 469/AGRA/2012 6 2.3 NOW DURING THE COURSE OF APPEAL PROCEEDINGS, TH E APPELLANT HAS SUBMITTED THAT AMOUNT HAS BEEN ARRANGED BY HER FROM TEMPORARY LOAN FROM HER HUF WHICH WAS SETTLED IMMEDIATELY AND DIRECTLY OUT OF LOAN DISBURSEMENT BY THE BANK. IN SUPPORT, THE APPE LLANT HAS SUBMITTED STATEMENT BEARING BANK A/C NO. 7780220000 3649 OF SYNDICATE BANK STATING IT TO THE HUF A/C ALONGWITH AGRICULTURAL LAND HOLDINGS OF SAID HUF OWNING 250 BIGHAS OF AGRICULTU RAL LAND AND HAVING ANNUAL AGRL. INCOME OF APPROX RS. 10,00,000/ -. HOWEVER, ON PERUSAL OF THE SAID BANK STATEMENT, IT IS FOUND TO BE IN JOINT NAMES OF THE APPELLANT, MRS. SITA BAI & MR. HARISH CHANDRA S HARMA. IT IS NOT IN THE NAME OF ANY HUF. SIMILARLY, LAND HOLDING DET AILS SHOWN JOINT FAMILY PROPERTY & NOT ANY HUF PROPERTY. THE APPELLA NT HAS FAILED TO PRODUCE EVEN A SINGLE DOCUMENTARY EVIDENCE IN SUPPO RT OF ALLEGED HUF. THE SAID HUFS INDEPENDENT CREATION AND EXISTE NCE HAS NOT BEEN SHOWN BY THE APPELLANT DURING ANY STAGE OF THE ENTIRE COURSE OF PROCEEDINGS BOTH ASSESSMENT AS WELL AS APPEAL NO. PAN, PAN CARD, BANK STATEMENT, INCOME TAX RETURN, BOOKS OF ACCOUNT S ETC. BEEN FILED TO PROVE THE ALLEGED HUF FROM WHERE THE PAYMENT HAS BE EN MADE FOR PURCHASE OF PROPERTY PRIOR TO DISBURSEMENT OF LOAN BY THE BANK. KEEPING IN VIEW OF ABOVE FACTS AND ON APPELLANTS FAILURE TO EXPLAIN SATISFACTORILY THE SOURCE OF INVESTMENT IN PROPERTY AT JIWAJI NAGAR PURCHASED FOR RS.11,36,160/-, ADDITION OF THE SAID AMOUNT IS, HEREBY CONFIRMED. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE P RODUCED BOOKS OF ACCOUNT BEFORE THE AO AND IT WAS EXPLAINED THAT CASH PAYMEN TS HAVE BEEN MADE FOR PURCHASE OF PROPERTY OUT OF THE CASH AVAILABLE IN T HE BOOKS OF ACCOUNT. COPY OF CASH BOOK IS FILED AT PAGES 7 TO 12 OF THE PAPER BO OK AND ALSO SUBMITTED THAT RS.4,00,000/- WAS PAID BY THE HUF DIRECTLY TO THE S ELLER OUT OF THE BANK ACCOUNT COPY OF WHICH IS FILED AT PAGE 15 OF THE PAPER BOOK AND RS.4,00,000/- WAS RETURNED BY THE ASSESSEE TO THE HUF AFTER LOAN WAS SANCTIONE D BY THE BANK AGAINST THE ITA NO. 469/AGRA/2012 7 PROPERTY. INVESTMENT HAS BEEN SHOWN IN THE BALANCE SHEET AND CASH FLOW STATEMENT, COPIES OF WHICH ARE FILED AT PAGE 14 & 5 OF THE PAP ER BOOK. HE HAS, THEREFORE, SUBMITTED THAT THE ASSESSEE HAS EXPLAINED SOURCE OF INVESTMENT IN THE PROPERTY. THEREFORE, THE ADDITION IS HIGHLY UNJUSTIFIED. ON T HE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND SUBMITT ED THAT THE ONUS OF THE ASSESSEE TO EXPLAIN THE INVESTMENT IN THE PROPERTY HAS NOT B EEN DISCHARGED. THEREFORE, ADDITION IS CORRECTLY MADE AND RELIED UPON THE DECI SION OF SUPREME COURT IN THE CASE OF ROSHAN DI HATTI VS. CIT, 107 ITR 938. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE ATTENDED THE PROCEEDINGS BEFOR E THE AO AND FILED REQUIRED INFORMATION. THE ASSESSEE ALSO PRODUCED BOOKS OF AC COUNT, WHICH HAVE BEEN EXAMINED BY TEST CHECK. THE ASSESSEE CLAIMED THAT C ASH PAYMENTS MADE ON DIFFERENT DATES IN A SUM OF RS.3,88,000/-, RS.1,50, 000/-, RS.12,000/-, RS.25,000/- AND RS.1,52,611/- HAVE BEEN PAID TO THE SELLER AS W ELL AS FOR PURCHASE OF STAMPS AND REGISTRATION FEES ETC. OUT OF THE BOOKS OF ACCO UNT. THE COPY OF THE CASH BOOK IS FILED AT PAGES 7 TO 12 OF THE PAPER BOOK WHICH CLEA RLY SUPPORTS THE CASE OF THE ASSESSEE THAT SUFFICIENT CASH WAS AVAILABLE IN THE CASH BOOK OF ASSESSEE ON THE DATES MENTIONED ABOVE AND OUT OF THE CASH BOOK, THESE PAY MENTS HAVE BEEN MADE TO THE SELLER AND FOR PURCHASE OF STAMPS ETC. THE AO WHILE EXAMINING THE BOOKS OF ITA NO. 469/AGRA/2012 8 ACCOUNT DID NOT FIND ANYTHING WRONG WITH THE ENTRIE S IN THE BOOKS AND AVAILABILITY OF FUNDS WITH THE ASSESSEE. FURTHER RS.4,00,000/- W AS PAID BY HUF OUT OF HIS OWN SOURCES TO THE SELLER DIRECTLY. COPY OF THE BANK AC COUNT IS FILED AT PAGE 15 OF THE PAPER BOOK, WHICH SUPPORTS THE CASE OF THE ASSESSEE AND WHEN LOAN WAS SANCTIONED TO THE ASSESSEE AGAINST THE PROPERTY, THE ASSESSEE RETURNED THE AMOUNT OF RS.4,00,000/- TO THE HUF. COPY OF BANK ACCOUNT OF H UF IS ON PAGE 15 AND BANK ACCOUNT OF ASSESSEE IS ALSO FILED TO SUPPORT THE CO NTENTION OF THE ASSESSEE. HOUSE LOAN INTEREST WAS CAPITALIZED. THEREFORE, THE ASSES SEE SUITABLY EXPLAINED THE SOURCE OF INVESTMENT IN THE PURCHASE OF PROPERTY. THE AO M ERELY GOING THROUGH THE BANK ACCOUNT FOUND THAT WHEN LOAN WAS SANCTIONED LATER O N, THERE IS NO QUESTION OF MAKING PAYMENT. THEREFORE, IT WAS CONSIDERED AS UNE XPLAINED INVESTMENT IN PROPERTY. SIMILARLY, THE LD. CIT(A) CONFIRMED THE A DDITION BECAUSE THE ACCOUNT OF HUF BEARS THREE NAMES AND IT WAS NOT MENTIONED IN H UF. MAY BE IN THE BANK ACCOUNT, NAME OF THREE PERSONS HAVE BEEN MENTIONED WITHOUT MENTIONING HUF, MAY NOT BE GROUND FOR REJECTION OF CLAIM BECAUSE IN THE ACCOUNT OF THREE PERSONS FROM WHERE PAYMENTS WERE MADE DIRECTLY TO THE SELLE R, SUFFICIENT FUNDS WERE AVAILABLE. THE ASSESSEE ALSO FILED SEVERAL DOCUMENT S OF HOLDING THE PROPERTY BY HUF AT PAGE 16 TO 34 OF THE PAPER BOOK TO SAY THAT THEY HAVE AGRICULTURAL LAND HOLDING EARNING SUFFICIENT INCOME. THEREFORE, THE A SSESSEE SUITABLY PROVED THE SOURCE OF INVESTMENT IN PROPERTY THROUGH KNOWN SOUR CES, I.E., BOOKS OF ACCOUNT AND ITA NO. 469/AGRA/2012 9 AVAILABILITY OF CASH WITH THE ASSESSEE AND PART PAY MENT MADE BY THE HUF DIRECTLY TO THE SELLER. THEREFORE, THE ADDITION IS HIGHLY UN JUSTIFIED IN THE MATTER. FURTHER, THE ASSESSEE HAS DECLARED THE INVESTMENT IN PROPERTY IN BALANCE SHEET AND CASH FLOW STATEMENT, THEREFORE, IT CANNOT BE TREATED AS UNEXP LAINED INVESTMENT. CONSIDERING THE ABOVE EVIDENCES AND EXPLANATION ON RECORD, WE S ET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS.11,36,160/-. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY