The ACIT,(OSD)Circle-9, Ahmedabad V. Shri Vijay Hathising Shah, Ahmedabad

ITA 477/AHD/2012

• Counselvise Citation: 47720514 RSA 2012
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D P GUPTA
• Keywords: Gift; Charitable institution
• Section: 143(3); 68

Judgement Text

1 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 I N THE INCOME TAX APPELLATE TRIBUNALD BENCH,AHMEDABAD (BEFORE SRI A.K. GARODIA, A.M. AND SRI KUL BHARAT J.M.) I.T.A. NO. 226/AHD/2012 & ITA NO. 477/AHD/2012 (ASSESSMENT YEAR: 2008-09) SRI VIJAYBHAI H. SHAH AHMEDABAD (APPELLANT) VS. THE A.C.I.T (OSD) AHMEDABAD (RESPONDENT) ON BEHALF OF THE APPELLANT SRI M.G. PATEL WITH MRS . ARTI N. SHAH, ARS ON BEHALF OF THE RESPONDENT SRI D.P. GUPTA, D.R. DATE OF HEARING : 09-05-20 12 DATE OF PRONOUNCEMENT : 06-07-2012 ( )/ ORDER PER: SRI KUL BHARAT, JUDICIAL MEMBER THESE CROSS APPEALS BY THE ASSESSEE AND BY THE REVEN UE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(APPEAL)-XV, AHMEDABAD DATED 23ND DECEMBER, 2011 . FIRST WE TAKE UP THE ITA NO. 226/AHM/2012 OF THE AS SESSEE 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 2 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 1.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING ADDITION OF RS. 1,41,00,000/- IN RESPECT OF GIFTS OF IMMOVABLE PROPERTIES MADE THROUGH REGISTERED DEEDS BY THE APPELLANT DURING THE YEAR, IN RESPECT OF WHICH THROUGH MISTAK E OF THE ACCOUNTANT, JOURNAL ENTRIES WERE WRONGLY MADE TO TH E CREDIT SIDE OF THE CAPITAL ACCOUNT OF THE APPELLANT AND CORRESPON DING DEBIT SIDE OF BHIKHUBHAI CHAMBERS PROPERTY ACCOUNT INSTEAD OF DEB IT TO THE CAPITAL ACCOUNT OF THE APPELLANT AND CREDIT TO THE BHIKHUBHAI CHAMBERS PROPERTY ACCOUNT WHICH ERROR WERE RECTIFIE D BY REVERSING THE SAID ENTRIES IN THE BOOKS OF THE APPELLANT ON 0 1/04/2010, HOLDING THAT THE SAME WAS AN ATTEMPT TO INTRODUCE ON-MONEY OF RS. 1,41,00,000/- IN THE CAPITAL ACCOUNT. 2.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING ADDITION U/S 68 OF THE INCOME TAX ACT, 1961, IN RESPECT OF LOAN FROM SHRI RAHUL N. SHAH OF RS. 51,00,000/- MAD E BY THE ASSESSING OFFICER. 3.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING ADDITION OF RS. 3,60,00,000/- MADE BY T HE ASSESSING OFFICER IN RESPECT OF ON-MONEY ON SALE OF AGRICULTU RAL LAND AT VILLAGE GODHAVI BY THE APPELLANT. 4.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- XV, HAS ERRED IN LAW AND ON FACTS OF THE CASE IN RE JECTING CONTENTION OF THE APPELLANT THAT AGRICULTURAL LAND AT VILLAGE GO DHAVI SOLD BY THE APPELLANT WAS NOT WITHIN 8 KM OF LIMIT OF THE AHMED ABAD MUNICIPAL CORPORATION AND, THEREFORE, THE SAME NOT BEING CAPI TAL ASSET, NO CAPITAL GAIN TAX WAS CHARGEABLE. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ADDING WHOLE AMOUNT OF SO CALLED ON- MONEY OF RS. 3,60,00,000/- INVOLVED IN THE SALE OF LAND AT VILLAGE 3 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 GODHAVI AS INCOME OF THE APPELLANT THOUGH THE APPEL LANT HAD ONLY ONE-HALF SHARE IN THE SAID LAND AS CLEARLY PROINTED OUT IN THE STATEMENT OF INCOME. 6. YOUR APPELLANT RESERVES THE RIGHT TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE FACTS IN BRIEF ARE THAT THE CASE WAS SELECTE D FOR SCRUTINY AND PROCEEDINGS UNDER SECTION 143(3) OF THE ACT WERE CO NCLUDED VIDE ASSESSMENT ORDER DATED 22-12-2010. WHILE FINALIZIN G THE ASSESSMENT THE ASSESSING OFFICER MADE ADDITIONS OF 1,41,00,000 /- ON ACCOUNT OF CAPITAL INTRODUCED RS. 64,90,0000/- ON ACCOUNT OF UN EXPLAINED UNSECURED LOAN OF RS. 1,54,00,000/- ON ACCOUNT OF A N MONEY RECEIPT OF SALE OF GODHIV LAND AND RS. 3,500/- ON ACCOUNT OF DI SALLOWANCE OF AGRICULTURE INCOME. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER OF ASSESSING OFFICER FILED AN APPEAL BEFORE THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) WHO AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL. 4. GROUND NO. 1 AND 3 ARE INTERCONNECTED, SAME ARE TAKEN TOGETHER AND ARE BEING DISPOSED OF TOGETHER LD. AU THORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THAT THE LAND AS SOLD WAS JOINTLY OWNED AND SOLD BY THE ASSESSEE WITH HIS WIFE SMT. KAMLABE N SHAH. THEREFORE, THE AO ERRED IN ADDING ENTIRE SALE CONS IDERATION IN THE INCOME OF THE APPELLANT ASSESSEE. HE SUBMITTED THA T THE AO MADE ADDITIONS ON THE BASIS OF CONJECTURES AND SURMISES WITHOUT MAKING PROPER ENQUIRY. HE SUBMITTED THAT THE SALE DEED WA S EXECUTED AS PER THE PREVAILING RATES, THERE WAS NO MATERIAL BEFORE THE AO TO HOLD CONTRARY TO SALE CONSIDERATION REFLECTED INTO THE S ALE DEED. HE CONTENDED THAT DUE TO MISTAKE OF THE ACCOUNTANT CRE DITED THE CAPITAL ACCOUNT AGAINST GIFT MADE INSTEAD OF DEBITING CAPIT AL ACCOUNT OF FOR AMOUNT OF GIFT. HE CONTENDED SUBSEQUENTLY A REVISE D BALANCE-SHEET WAS FILED, BUT THE REVISED BALANCE SHEET WAS NOT CO NSIDERED BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE ENTIRE AD DITION IS BASED UPON CONJECTURES AS THERE WAS NO OCCASION TO DRAW A N ADVERSE 4 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 INFERENCE FROM THE MISTAKE. HE FURTHER SUBMITTED T HAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO EXPLAIN HIS CAS E. ON THE CONTRARY, LD. D.R. SUBMITTED THAT THE FINDINGS OF TH E AUTHORITIES BELOW AE BASED UPON MATERIAL EVIDENCES COLLECTED IN THE FORM OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT DISPUTED THAT THE LAND IN QUESTION WAS SOLD JOINTLY BY THE APPELLANT WITH HIS WIFE, HOWEVE R ENTIRE ADDITION IS MADE INTO THE INCOME OF THE ASSESSEE. FURTHER THE C ONTENTION OF THE LD. A.R. IS THAT THE SALE CONSIDERATION HAS BEEN DUL Y ACCEPTED BY THE REVENUE AUTHORITIES. SO FAR THE ISSUE OF MAKING WRO NG ENTRY INTO THE BOOKS OF ACCOUNTS IN RESPECT OF GIFT MADE TO BHIKUB HAI CHARITABLE TRUST, KAMLIBEN V. SHAH, ADITIBEN V. SHAH AND RESHMA BEN V. SHAH IS CONCERNED THE CONTENTION OF THE LD. A.R. IS THAT REVISED BALANCE SHEET HAS BEEN FILED WHICH IS NOT CONSIDERED BY THE AUTHORITIES. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDING ON THE BAS IS OF REMAND REPORT OF THE A.O THAT NO REVISED BALANCE SHEET WA S PRODUCED BEFORE ASSESSING OFFICER AND ALSO THE BALANCE SHEET OF EAR LIER YEARS. IN VIEW OF THE FACT THAT THE CONTENTION OF THE ASSESSEE IS THAT HE WAS NOT GIVEN OPPORTUNITY TO EXPLAIN THE REVISED BALANCE SHEET. CONSIDERING ALL ASPECTS OF THE MATTER IN THE INTEREST OF JUSTICE TH IS MATTER IS REMITTED BACK TO THE FILE OF AO TO ADJUDICATE AFRESH AFTER G IVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE SHALL PR ODUCE ALL THE INFORMATION AND EVIDENCE AS CALLED FOR BY THE AO TO SUBSTANTIATE HIS CLAIM. 6. GROUND NO. 2 IS AGAINST THE CONFIRMATION OF ADDI TION MADE UNDER SECTION 68 OF THE INCOME TAX ACT. THE LD. AUT HORIZED REPRESENTATIVE HAS SUBMITTED THAT ENTIRE TRANSACTION WAS EFFECTED THROUGH BANKING CHANNEL. HE SUBMITTED THAT THE ONL Y REASON GIVEN FOR MAKING ADDITION WAS THAT THE CONFIRMATION OF LO AN WAS MADE BY THE APPELLANT HIMSELF AS A POWER OF ATTORNEY OF SL. RAHUL N SHAH AND SHRI NARESH N SHAH. ON THE CONTRARY LD. D.R. SUBMIT TED THAT IT WAS NO INCUMBENT UPON THE ASSESSEE TO PROVE THE GENUINE FEES OF TRANSACTION AND CREDITWORTHINEES OF THE PERSONS WHO GAVE INTEREST 5 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 FREE LOAN TO THE ASSESSEE. IN REJOINDER LD. A.R. SU BMITTED THAT IF HE IS AFFORDED OPPORTUNITY HE WILL FURNISH CONFIRMATION F ROM SH. RAHUL V SHAH AND SHRI NARESH V. SHAH AND PLACE GENUINENESS AND CREDIT WORTHINESS OF THE TRANSACTION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AFTER CONSIDERING ALL ASPECTS OF THE MATTER, THIS ISSUE IS REMITTED BACK TO THE FILE OF AO FOR FRESH DECISION. THE ASSESSEE IS DIRECTED TO PROVE GENUINENESS OF INTERE ST FREE LOAN BY FURNISHING CONFIRMATION LETTER FROM THE CONCERNED P ERSONS AS PER LAW AND CREDIT WORTHINESS OF THE PERSONS. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 8. GROUND NO. 4 IS AGAINST THE REJECTION OF THE CON TENTION THE ASSESSEE THAT THE LAND IN QUESTION SOLD BY APPELLAN T WAS NOT WITHIN 8 KM. OF LIMIT OF AHMEDABAD MUNICIPAL CORPORATION. L D. A.R. SUBMITTED THAT THE LAND DOES NOT FALL WITHIN 8 KM. OF THE AHMEDABAD MUNICIPAL CORPORATION. HE SUBMITTED THAT THE DISTA NCE HAS TO MEASURED IN THE MANNER AS PRESCRIBED BY THE HONBLE HIGH COURT OF PANJAB & HARYANA IN THE CASE OF CIT VS. SATINDER PA L SINGH (2010) 33 DTR 281. ON THE OTHER HAND, LD. DR SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. WE HAVE HEARD THE RIVAL SUBMISS IONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FORCE IN TO THE CONTENTION OF LD. A.R. IF IT IS PROVED THAT LAND WAS AGRICULTURE L AND, THEREFORE, WOULD NOT BE SUBJECT TO CAPITAL GAIN TAX LIABILITY. THEREFORE, AFTER CONSIDERING TOTALITY OF FACTS, THIS ISSUE IS ALSO R EMITTED BACK TO THE FILE OF AO FRESH DECISION. THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE THAT THE LAND SOLD BY HIM WAS AGRICULTURE LAND AS DEFINED UNDER THE ACT. 9. NEXT GROUND IS AGAINST CONFIRMATION OF ADDITION OF ENTIRE ALLEGED ON MONEY INVOLVED IN THE SALE OF LAND AT VI LLAGE GODHAVI AS THE INCOME OF THE ASSESSEE. LD. A.R. SUBMITTED THAT AUTHORITIES FAILED TO APPRECIATE THE FACT THAT THE LAND IN QUESTION WA S OWNED AND SOLD JOINTLY BY THE APPELLANT WITH HIS WIFE. HE DREW OU R ATTENTION TO THE 6 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 SALE DEED OF THE LAND IN QUESTION. ON THE OTHER HA ND, LD.DR RELIED ON THE ORDERS PASSED BY THE AUTHORITIES BELOW. 10. WE HAVE HEARD RIVAL SUBMISSIONS PERUSED MATERIA L AVAILABLE ON RECORD. AFTER CONSIDERING ALL ASPECTS OF MATTER IN THE INTEREST OF JUSTICE THIS ISSUE IS ALSO RESTORED TO THE FILE OF AO FOR FRESH ADJUDICATION. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE. THIS GROUND OF APPEAL IS ALLOWED FO R STATISTICAL PURPOSE. 11. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE. NOW, WE TAKE UP THE ITA NO. 477/AHD/2012 OF THE REV ENUE THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1.THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICT ING THE DISALLOWANCE TO RS. 51,00,000/- OUT OF RS. 64,90,00 0/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOANS . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMED ABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 3.IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. 2. THE FIRST GROUND AGAINST RESTRICTING THE DISALLO WANCE TO RS. 51,00,000/- OUT OF RS. 64,90,000/-MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF UNSECURED LOANS. SINCE THE ISSUE OF UN SECURED LOANS HAS 7 ITA N O. 226 & 477 OF 2012 AS SESSMENT YEAR:-2008-09 BEEN REMITTED BACK IN ASSESSEES APPEAL IN ITA NO. 226/A/2012, THIS GROUND OF REVENUES APPEAL IS ALSO REMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH DECISION. 3. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES AS INDICATED A BOVE. SD/- SD /- ( A.K. GARODIA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL ME MBER A.KUMAR COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDED 3. THE CIT(APPEALS)-II, BARODA 4. THE CIT CONCERNED. 5. THE DR, ITAT, AHEMEDABAD 6. GUARD FILE BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 22/06/2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER.OTHER MEMBER 25/06/2012 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER.. NOTE: ORIGINAL DICTATION NOTE BOOK OF THE SAID ORDE R IS PLACED ON RECORD .