ITO, Sirsa V. Smt. Manju Walia, Mandi Dabwali

ITA 508/CHANDI/2015

• Counselvise Citation: 50821514 RSA 2015
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH WALIA
• Keywords: Unexplained investment; Opportunity of being heard; Source of fund; Assessment record; Onus to prove
• Section: 133(6); 147; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NOS. 508/CHD/2015 ASSESSMENT YEAR: 2008-09 THE ITO, WARD-3, VS. SMT. MANJU WALIA, SIRSA W/O SH. ASHOK KUMAR WALIA, MANDI DABWALI, PAN NO. ABAPW3859L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUNIL KUMAR RESPONDENT BY : SH. ASHISH WALIA DATE OF HEARING : 02.09.2015 DATE OF PRONOUNCEMENT : 14.09.2015 ORDER PER H.L.KARWA, VP THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), HISAR DATED 27.2.2015 RELATING TO ASSESSMEN T YEAR 2008-09. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 26,02,750 /- (MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF PLOTS) WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE HA S PURCHASED VARIOUS PLOTS AND MADE PAYMENT IN CASH AS MENTIONED IN THE SALE DEED, EXECUTED BY THE COMPETE NT 2 AUTHORITIES. MOREOVER, THE ASSESSEE FAILED TO PRODU CE CREDIBLE EVIDENCE TO PROVE THAT THE PROPERTY IN QUE STION WAS RECEIVED THROUGH FAMILY SETTLEMENT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE SUBMITTED HER RETURN OF INCOME ON 10.9.2009 DECLARING TOTAL INCOM E AT RS. 1,38,500/-. THE SAID RETURN WAS PROCESSED U/S 143(1) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). SUBSEQUENTLY, ON THE BASIS OF INFORMAT ION RECEIVED FORM ADIT, (INV). HISAR PROCEEDINGS U/S 147 OF THE ACT WERE IN ITIATED. AS PER THE ABOVE INFORMATION THE ASSESSEE HAD MADE TOTAL INVESTMENT OF RS. 26,02,750/- IN PURCHASING PLOTS AT DABWALI ON 30.4.2007 FOR RS. 1, 43,000/-, ON 1.5.2007 FOR RS. 1,41,750/-, ON 4.5.2007 FOR RS. 4,30,000/-, ON 7.5.2007 FOR RS. 70,000/- ON 11.5.2007 FOR RS. 12,70,000/- (AT SIRSA), ON 24. 6.2007 OF RS. 3,48,000/- AND ON 5.2.2008 AT RS. 2,00,000/- ALONGWITH STAMP D UTY EXPENSES OF RS. 1,46,235/-. THESE INVESTMENTS WERE NOT DISCLOSED IN THE RETURN OF INCOME AND THE ASSESSEE ALSO FAILED TO EXPLAIN THE SOURCE S OF AFORESAID INVESTMENTS. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 26,0 2,750/- HOLDING THE SAME AS UNEXPLAINED INVESTMENTS. 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE LD. CIT( A) DELETED THE ADDITION AND HENCE THE REVENUE IS IN APPEAL BEFORE THE TRIBU NAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. THE LD. CIT(A) HAS D ELETED THE IMPUGNED ADDITION OBSERVING AS UNDER:- 3 5.3 I HAVE GONE THROUGH THE FACTS OF THE CASE AND WRITTEN SUBMISSION FILED BY THE ASSESSEE. IT IS NOTED THAT THE AO ASKED THE ASSESSEE TO FURNISH THE SOURCE OF INVESTMENT OF RS.26,02,750/-- ON THE BASIS OF REGISTERED DEEDS FO R REGISTRATION OF PLOTS/LAND IN THE NAME OF THE APPEL LANT. ALTHOUGH, THE APPELLANT ADMITTED ABOUT REGISTRATION OF ASSETS BUT DID NOT EXPLAIN THE SOURCE OF INVESTMENTS MADE FOR PURCHASE OF THE PROPERTIES. IN THE ABSENCE OF ANY D OCUMENTARY EVIDENCE REGARDING THE SOURCE OF INVESTMENTS, THE A O TREATED THE INVESTMENT RECORDED IN SALE DEEDS OF RS.26,02,7 50/-- MADE FROM THE UNEXPLAINED SOURCES OF HER INCOME. ACCORDI NGLY, THE AMOUNT WAS ADDED TO THE TAXABLE INCOME. 5.4 ON THE OTHER HAND THE COUNSEL FOR THE APPELLA NT HAS SUBMITTED THAT SALE DEEDS WERE REGISTERED IN THE AP PELLANT'S NAME ONLY TO LEGALIZE THE PROPERTIES AFTER FAMILY S ETTLEMENT WHERE NO MONEY WAS INVOLVED. THE DOCUMENTS SUBMITTE D DURING APPELLATE PROCEEDINGS SHOWS THAT THE PROPERTIES REC EIVED BY SMT. KAMLA DEVI, MOTHER IN LAW OF APPELLANT AFTER T HE DEATH OF HER HUSBAND WAS SETTLED AMONG TWO SONS AND DAUGHTER , NAMELY, SH. ASHOK WALIA, SH. VIRENDER WALIA AND SMT. VEENA RANI THROUGH A FAMILY SETTLEMENT ON UNREGISTERED DOCUMEN T. TO LEGALIZE PROPERTIES, THE SALE DEEDS WERE REGISTERED BY , ASHOK WALIA, HUSBAND OF APPELLANT AND SH. VIRENDER WALIA, BROTHER IN LAW OF APPELLANT IN THE NAME OF SMT. MANJU WALIA , THE APPELLANT. SH. ASHOK WALIA UNDER GENERAL POWER OF A TTORNEY FROM HIS MOTHER FOR DEVOLUTION OF PROPERTIES TRANSF ERRED AND REGISTERED THE PROPERTIES IN THE NAME OF HIS WIFE, THE APPELLANT. IT HAS BEEN FURTHER SUBMITTED THAT TO FACILITATE TH E REGISTRATION OF PROPERTIES BEFORE SUB REGISTRAR, THE SALE DEEDS WERE PREPARED WHICH CONTAINED A VALUE OF CONSIDERATION F OR THE PROPERTY FOR THE STAMP DUTY PURPOSES AND REGISTRATI ON. IN THE ABSENCE OF THE SALE CONSIDERATION IN THE SALE DEED AND AS PER PREVAILING PROCEDURE IT WOULD HAVE NOT BEEN POSSIBL E TO REGISTER THE PROPERTY IN THE NAME OF THE APPELLANT. NO CASH TRANSACTIONS TOOK PLACE IN EXECUTION OF SALE DEEDS AND THERE WAS NO INVESTMENT MADE IN THE ACQUISITION EXCEPT FO R THE STAMP 4 PAPERS AND OTHER EXPENSES. THE EXPENSES ARE STATED TO BE SHOWN IN THE CAPITAL ACCOUNT. 5.5 AFTER CONSIDERING THE FACTS OF THE CASE, SUB MISSION AND COPIES OF DOCUMENTS, IT IS NOTED THAT THE PROPERTIE S BELONGED TO THE MOTHER IN LAW WHICH WAS TRANSFERRED TO THE DAUG HTER IN LAW. THE HUSBAND OF APPELLANT ACTED UNDER GENERAL P OWER OF ATTORNEY ON BEHALF OF HIS MOTHER FOR TRANSFER OF PR OPERTIES IN THE NAME OF HIS WIFE. IN EFFECT, THE VARIOUS PROPER TIES AFTER FAMILY SETTLEMENT WERE REGISTERED IN THE SAME FAMIL Y AND THE PROPERTIES BELONGING TO THE HUSBAND WERE REGISTERED IN THE NAME OF WIFE. THERE IS MENTION OF CONSIDERATION OF SALE IN ALL FOUR PROPERTIES ON THE BASIS OF WHICH STAMP DUTIES HAVE BEEN PAID AND REGISTRATION OF PROPERTIES HAVE BEEN DONE. IT HAS BEEN MENTIONED THAT THE SALE CONSIDERATION HAS BEEN GIVE N, AND RECEIVED IN CASH IN THE HOUSE AND THERE IS NOTHING TO GIVE OR RECEIVE. HOWEVER, EXCEPT FOR COPIES OF REGISTERED D EEDS THERE IS NO OTHER EVIDENCE SHOWING THAT THERE WAS TRANSFE R OF MONEY IN CASH FROM THE APPELLANT TO HER HUSBAND/MOTHER IN LAW. THE AO HAS NEITHER MADE ANY ATTEMPT TO INQUIRE FROM THI RD SOURCES U/S 133(6) NOR RECORDED THE STATEMENTS OF PURCHASER OR SELLER OR WITNESSES BY ISSUING ANY SUMMON U/S 131 OF THE A CT TO ASCERTAIN THE TRANSFER OF MONEY IN CASH. FURTHER, N O ATTEMPT HAS BEEN MADE TO EXAMINE THE BANK ACCOUNT STATEMENT S OR ANY INQUIRY FROM THE CONCERNED BANKS TO FIND OUT ANY WI THDRAWAL OR DEPOSIT IN CASH IN THE RESPECTIVE ACCOUNTS OF MO THER IN LAW OR THE HUSBAND. IN THE ABSENCE OF ANY FACT FINDING OR INQUIRY, WAS NOT JUSTIFIED IN TREATING THE SALE CONSIDERATIO N MENTIONED IN THE REGISTERED DEED AS APPELLANTS INCOME FROM THE UNDISCLOSED SOURCES WITHOUT CONSIDERING THE FACT TH AT THE TRANSFER OF PROPERTIES WERE AMONG THE FAMILY MEMBE RS. HOWEVER, IT IS APPARENT FROM THE REGISTERED DEEDS A BOUT THE EXPENSES INCURRED ON ACCOUNT OF STAMP DUTY AND REGI STRATION EXPENSES. ALTHOUGH, THE APPELLANT HAS STATED THAT T HE SAME IS FROM THE CAPITAL ACCOUNT BUT LOOKING AT THE SOURCES OF INCOME DECLARED BY THE APPELLANT AND NO EVIDENCE SHOWN TOR WITHDRAWAL OF SUCH EXPENSES FROM ANY KNOWN SOURCE, THE EXPENSES INCURRED ON ACCOUNT OF STAMP DUTIES AND RE GISTRATION 5 FEES ARE TREATED AS EXPENSES INCURRED FROM UNDISCLO SED SOURCES. THEREFORE, THE AO IS DIRECTED TO RESTRICT THE ADDITION ON ACCOUNT OF UNEXPLAINED EXPENSES TO THE EXTENT OF STAMP DUTIES AND REGISTRATION FEE AMOUNTS. THUS, THIS GRO UND OF APPEAL IS PARTLY ALLOWED. 6. SHRI SUNIL KUMAR, LD. DR SUBMITTED THAT WHILE A LLOWING THE RELIEF TO THE ASSESSEE, THE LD. CIT(A) HAS NOT APPRECIATED T HE FACT THAT THE PLOT / LAND UNDER CONSIDERATION HAS BEEN SOLD TO THE ASSES SEE AND POSSESSION OF THE SAME HAS BEEN GIVEN TO HER BEING PURCHASER. HE FUR THER SUBMITTED THAT THE AMOUNT OF SALE CONSIDERATION MENTIONED IN THE SALE DEED HAS BEEN RECEIVED BY THE SELLER FROM THE PURCHASER IN CASH. HE FURTHE R SUBMITTED THAT IT IS SPECIFICALLY MENTIONED IN THE SALE DEED THAT THE SE LLER IS IN NEED OF MONEY. ACCORDINGLY, SHRI SUNIL KUMAR, LD. DR SUBMITTED THA T IT IS CLEAR THAT THE PROPERTIES WERE TRANSFERRED IN THE NAME OF THE ASSE SSEE BY THE SELLER AFTER RECEIVING THE SALE CONSIDERATION IN CASH AS MENTION ED IN THE SALE DEED. HE FURTHER POINTED OUT THAT SO CALLED FAMILY SETTLEMEN T WAS EVEN NOT REGISTERED AS PER LAW AND, THEREFORE, THE CIT(A) HAS WRONGLY P LACED RELIANCE ON SUCH DOCUMENT. SHRI SUNIL KUMAR LD. DR VEHEMENTLY ARGUED THAT ON THE FACE OF REGISTERED SALE DEEDS MENTIONING CLEARLY RECEIPT OF CONSIDERATION IN CASH, ONUS TO PROVE THAT NO CASH PAYMENT WAS MADE WAS ON THE ASSESSEE WHICH SHE FAILED TO DISCHARGE AND AS SUCH THERE IS NO OCCASIO N TO DISBELIEVE THE FACT OF RECEIPT OF PAYMENT AS PER THE SALE DEEDS. THEREFORE , IT WAS SUBMITTED THAT CIT(A) WAS NOT CORRECT IN DELETING THE IMPUGNED ADD ITION. 7. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 6 8. IN THE INSTANT CASE, THE CONTENTION OF THE ASSES SEE IS THAT SHE GOT REGISTERED SOME SALE DEEDS IN HER NAME ONLY TO LEGA LIZE THE PROPERTY AND AFTER FAMILY SETTLEMENT IN WHICH NO MONEY WAS INVOL VED. IT IS STATED THAT SMT. KAMLA DEVI (MOTHER IN LAW OF THE ASSESSEE) GOT SOME PROPERTY DURING THE LIFE TIME OF HER HUSBAND, SHRI PRABHU DAYAL. TH E PROPERTY IN THE NAME OF SHRI PRABHU DAYAL WAS HIS SELF ACQUIRED PROPERTY. A FTER THE DEATH OF SHRI PRABHU DAYAL IN THE YEAR 2001, HIS WIDOW SMT. KAMLA DEVI WAS OWNER OF THE IMMOVABLE PROPERTIES. IT IS ALSO STATED THAT WR ITTEN AGREEMENT WAS ENTERED IN TO BETWEEN SMT. KAMLA DEVI AND HER TWO SONS NAMELY SHRI ASHOK WALIA AND SHRI VERINDER WALIA VIDE AGREEMENT DATED 4.9.2005 BY WHICH SOME PROPERTIES WERE DISTRIBUTED BETWEEN ASHO K WALIA AND VERINDER WALIA. LATER ON, ANOTHER DEED FOR FAMILY SETTLEMENT DATED 30.3.2007 WAS ENTERED INTO BETWEEN SMT. KAMLA DEVI AND HER TWO SO NS AND DAUGHTERS FOR SEPARATION OF THE PROPERTIES. IT IS CLAIMED THAT TO LEGALIZE PROPERTIES, THE SALE DEEDS GOT REGISTERED BY SHRI ASHOK WALIA (HUSBAND OF ASSESSEE) AND SHRI VERINDER WALIA (BROTHER IN LAW OF THE ASSESSEE) IN THE NAME OF THE ASSESSEE. THOUGH THE OWNERS OF THE SAID PROPERTIES WERE SHRI ASHOK WAILA AND VERINDER WALIA, AS PER FAMILY SETTLEMENT, THEY BOTH TRANSFERRED THE SAME IN THE NAME OF THE ASSESSEE AS POWER OF ATTORNEY OF SM T. KAMLA DEVI. THE CLAIM OF THE ASSESSEE IS THAT TO LEGALIZED THE IMMO VABLE PROPERTIES, SHE ACQUIRED THE PROPERTIES IN HER NAME. IT IS STATED THAT NO CASH TRANSACTION WAS TAKEN PLACE IN EXCLUDING THE SALE DEED IN HER NAME. THUS, THERE WAS NO INVESTMENT MADE IN THE ACQUISITION OF SAID PROPERTI ES EXCEPT FOR STAMP PAPER AND OTHER EXPENSES. 7 9. IT APPEARS THAT NO EXPLANATION OR REPLY REGARDIN G THE SOURCE OF INVESTMENT MADE FOR PURCHASE OF PLOTS / LAND WAS FU RNISHED BEFORE THE ASSESSING OFFICER AND, THEREFORE, HE MADE THE ADDIT ION. IT IS ALSO APPARENT FROM THE ASSESSMENT RECORD THAT THE ASSESSING OFFIC ER HAS NOT PROVIDED DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE BEFORE MAKING THE IMPUGNED ADDITION. HOWEVER, THE ASSESSEE EXPLAINED THE ISSUE BEFORE THE CIT(A) AND IT APPEARS THAT THE LD. CIT(A) HAS CORRE CTLY APPRECIATED THE FACTS OF THE CASE AND ALSO THE EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE. THERE IS NO MATERIAL ON RECORD TO CONTROVERT THE EX PLANATION GIVEN BY THE ASSESSEE BEFORE THE CIT(A). THE LD. CIT(A) HAS CA TEGORICALLY STATED THAT SMT. KAMLA DEVI (MOTHER IN LAW OF THE ASSESSEE) WAS THE OWNER OF THE IMMOVABLE PROPERTIES AFTER THE DEATH OF HER HUSBAND SHRI PRABHU DAYAL. A WRITTEN AGREEMENT WAS ENTERED INTO BETWEEN SMT. KAM LA DEVI AND HER TWO SONS NAMELY SHRI ASHOK WALIA AND VERINDER WALIA VID E WHICH SOME PROPERTIES WERE DISTRIBUTED BETWEEN SHRI ASHWANI WA LIA AND VERINDER WALIA. THEREAFTER, ANOTHER DEED FOR FAMILY SETTLEME NT DATED 30.3.2007 WAS ENTERED INTO BETWEEN SMT. KAMLA DEVI AND HER TWO S ONS AND DAUGHTER FOR SEPARATION OF PROPERTIES. TO LEGALIZE PROPERTIES THE SALE DEEDS WERE REGISTERED BY SHRI ASHOK WALIA (HUSBAND OF THE ASSE SSEE ) AND SHRI VERINDER WALIA (BROTHER IN LAW OF THE ASSESSEE) IN THE NAME OF THE ASSESSEE. SHRI ASHOK WALIA UNDER GENERAL POWER OF ATTORNEY OF SMT. KAMLA DEVI TRANSFERRED AND REGISTERED PROPERTIES IN THE NAME O F HIS WIFE SMT. MANJU WALIA. IT IS CLAIMED THAT TO FACILITATE THE REGIST RATION OF PROPERTIES BEFORE SUB REGISTRAR, THE SALE DEEDS WERE REGISTERED FOR T HE STAMP DUTY PURPOSE. NO CASH TRANSACTION TOOK PLACE FOR EXECUTION OF SALE D EEDS AND THERE WAS NO INVESTMENT MADE IN THE ACQUISITION EXCEPT FOR THE S TAMP PAPERS AND OTHERS 8 EXPENSES. CONSIDERING THE ENTIRE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE, THE ORDER PASSED BY CIT(A) IS PERFECTLY CORRE CT. AT THE SAME TIME, THE CONTENTION PUT FORTH BY THE ASSESSEE IN THIS CASE C ANNOT BE DOUBTED PARTICULARLY WHEN THERE IS NO EVIDENCE TO SHOW THAT THERE WAS TRANSFER OF MONEY IN CASH FROM THE ASSESSEE TO HER HUSBAND OR MOTHER IN LAW. THE LD. CIT(A) HAS CORRECTLY OBSERVED THAT ASSESSING OFFICE R HAD NOT MADE ANY ATTEMPT TO INQUIRE FROM THEIR SOURCES U/S 133(6) OF THE ACT. THE ASSESSING OFFICER HAS ALSO NOT RECORDED THE STATEMENT OF PURC HASER OR SELLER OR WITNESSES BY ISSUING ANY SUMMONS U/S 131 OF THE ACT TO ASCERTAIN THE TRANSFER OF MONEY IN CASH. LD. CIT(A) HAS CORRECTL Y OBSERVED THAT THE ASSESSING OFFICER HAS NOT MADE ANY ATTEMPT TO EXAMI NE THE BANK ACCOUNT STATEMENT OR ANY ENQUIRY FROM THE CONCERNED BANK TO FOUND OUT ANY WITHDRAWALS OR DEPOSITS IN CASH IN THE RESPECTIVE A CCOUNT OF SMT. KAMLA DEVI OR SHRI ASHOK WALIA. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 10. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.09.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 14 TH SEPTEMBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 9