Shri Dharmesh C. Patel, Surat V. The ACIT.,Circle-3, Surat

ITA 484/AHD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2085 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.K. SRIVASTAVA, ACCOUNTANT MEMBER ./ I.T.A. NO.484/AHD/2013 ( / ASSESSMENT YEAR : 2003-04) SHRI DHARMESH C.PATEL B-1, MANIRATNA ROW HOUSE NEAR GUJARAT GAS CIRCLE ADAJAN, SURAT / VS. THE ACIT CIRCLE-3 SURAT ./ ./ PAN/GIR NO. : AFLPP 5441 A ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MS.URVASHI SHODHAN, AR / RESPONDENT BY : SHRI RAJESH KUMAR, SR.D.R. / DATE OF HEARING : 22/04/2013 !'# / DATE OF PRONOUNCEMENT : 10/5/2013 $% / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING F ROM THE ORDER OF LD.CIT(A)-III, SURAT DATED 21/05/2008 PASSED FO R A.Y. 2003-04 AND THE GROUNDS RAISED ARE AS FOLLOWS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING ADDITION OF RS.11 LAKHS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ITA NO.484/AHD/ 2013 SHRI DHARMESH C.PATEL VS. ACIT ASST.YEAR 2003-04 - 2 - CONFIRMING THE ACTION OF THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT WHICH WAS WITHOUT JURISDICTION. 2. AT THE OUTSET, WE HAVE BEEN INFORMED THAT THE R EVENUE AUTHORITIES HAVE MADE THE IMPUGNED ADDITION ON THE BASIS OF AN ACTION TAKEN AGAINST THE ASSESSEE FOR AY 2004-05. EVEN LD.CIT(A) HAS RE FERRED AY 2004-05 IN THE FOLLOWING MANNER:- DECISIONS : 7. SINCE THE SALE OF THE ENTIRE LAND WAS COMPLETED IN THE SUBSEQUENT FINANCIAL YEAR THE EARRINGS FROM THE SAM E WERE DISCLOSED BY THE ASSESSEE IN THE NEXT ASSESSMENT YE AR I.E. 2004-05. IN ASSESSMENT PROCEEDINGS FOR THE SAID ASSESSMENT Y EAR, THE EXISTENCE OF THE THIRD AGREEMENT DATED 06-03-2003 W AS DETECTED BY THE AO, AND WAS CLEARLY ESTABLISHED TO BE GENUINE A ND NOT MERELY A COPY OF THE PREVIOUS AGREEMENT DATED 15-10-2002. THE AOS FINDING HAS BEEN UPHELD IN APPEAL FOR THE SAID ASSE SSMENT YEAR. EVEN THOUGH THE AO MADE AN ADDITION ON ACCOUNT OF T HE UNDISCLOSED INCOME EARNED FROM THE SALE OF PLOTS BY VIRTUE OF THE SAID AGREEMENT, THE SOURCE OF THE PAYMENT OF RS.11 LAKH WHICH WAS MADE TO THE ACFL BY THE ASSESSEE AGAINST THE ACQUIS ITION OF THE DEVELOPMENTAL AND SELLING RIGHTS OF THE SAID LAND, WAS NOT CONSIDERED. THEREFORE, THERE WAS FULL JUSTIFICATIO N IN INITIATING PROCEEDING U/S.147 OF THE IT ACT. IN THE YEAR UNDE R CONSIDERATION, THE ONLY GROUND TAKEN BY THE AR IN CHALLENGING THE INITIATION OF THE RE-OPENING PROCEEDINGS IS THAT ALSO CALLED AGREEMEN T 06-03-2003 WAS ONLY A COPY OF THE AGREEMENT DATED 15-10-2002, AND THEREFORE, THERE WAS NO BASIS FOR INITIATING PROCEEDINGS U/S.1 47. HOWEVER, SINCE THE ASSESSEES POSITION AND ASSERTION WITH RE GARD TO THE SAID AGREEMENT HAS ALREADY BEEN DISCUSSED IN CONSIDERABL E DETAIL AND DISMISSED IN BOTH THE ASSESSMENT PROCEEDINGS AND TH E APPELLATE PROCEEDINGS FOR THE AY 2004-05, THERE REMAINS NO ME RIT IN THE CONTENTION OF THE AR. THE INITIATION OF PROCEEDING U/S.147 IS THEREFORE SUSTAINED. CONSEQUENTLY, THE ADDITION OF THE SUM OF RS.11 LAKHS, BEING THE PAYMENT MADE BY THE ASSESSEE TO ACFL AS ITA NO.484/AHD/ 2013 SHRI DHARMESH C.PATEL VS. ACIT ASST.YEAR 2003-04 - 3 - PER THE AGREEMENT, THE SOURCE OF WHICH HAS REMAINED UNEXPLAINED, IS ALSO CONFIRMED. 2.1. HOWEVER, FOR AY 2004-05 ITATD BENCH AHMEDABA D IN ASSESSEES OWN CASE IN ITA NO.803/AHD/2008 AND ITA NO.1224/AHD/2010 (APPEAL AGAINST LEVY OF PENALTY) V IDE ORDER DATED 28/12/2012 HAVE RESTORED THE MATTER BACK TO THE FIL E OF THE AO AS PER THE FOLLOWING DIRECTIONS, REPRODUCED BELOW:- 15. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE CON SIDERED OPINION THAT IN THE INTEREST OF NATURAL JUSTICE AND FAIR PL AY THE MATTER BE REMITTED TO THE FILE OF A.O. WE, THEREFORE, REMIT THE MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO HIM TO GIVE A CATEGORICAL FINDING AS TO WHETHER THE INCOME FROM SALE OF LAND IS BUSINESS INCOME OR CAPITAL GAIN. HE IS ALSO DIRECTED TO VERIFY THE SIZE OF PLOTS SOLD AND RECORD A CATEGORICAL FINDING ON THE SAME. FURTHER, THE A.O. IS ALSO DIRECTED TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE MR.MORAR WHOSE STATEMENT WAS RECORDED U/S.131 OF THE ACT. THE A.O. SHALL PASS ORDER AFTER CONSIDERI NG THE AFORESAID FACTS AND AFTER GIVING REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE. THUS, WE DO NOT ADJUDICATE ANY OF THE GR OUNDS ON MERIT AND REMIT ALL THE GROUNDS TO THE FILE OF THE A.O. F OR HIM TO DECIDE AFRESH. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. 3. SINCE THE RESPECTED COORDINATE BENCH HAS ALREADY TAKEN A VIEW IN ASSESSEES OWN CASE ON IDENTICAL FACTS, THEREFORE WE HAVE NO REASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE SAME. HENCE, FOR THE YEAR UNDER CONSIDERATION, AS WELL, WE HEREBY RESTORE THE ISSUE TO BE DECIDED AS PER LAW IN THE LIGHT OF THE DIRECTIONS; REPRODUCED HERE INABOVE. RESULTANTLY, THIS APPEAL IS HEREBY ALLOWED BUT FOR STATISTICAL P URPOSES. ITA NO.484/AHD/ 2013 SHRI DHARMESH C.PATEL VS. ACIT ASST.YEAR 2003-04 - 4 - 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES ONLY. SD/- SD/- ( D.K. SRIVASTAVA ) ( MUK UL KR.SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEM BER SIGNATURES OF THE NOMINATED MEMBERS -------------------------------- AHMEDABAD; DATED 10 / 5 /2013 SD/- SD/- (AKG) (MKS) &.., .(../ T.C. NAIR, SR. PS !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) *+ , / CONCERNED CIT 4. , () / THE CIT(A)-II, SURAT 5. /01 ((*+, *+#, 23$)$ / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. & ' / BY ORDER, / ( //TRUE COPY// (/& )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION DATED 22..4.13 (DICTATION-PAD 3 PAGES ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.4.13 OTHER MEMBER 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 D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S13.5.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.5.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER