KAUSHALYA SAMPAT, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 5147/MUM/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8748 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 11-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: NEHA PARANJAPE
• Keywords: Loose papers
• Section: 143(3); 143(1); 68

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE HONBLE SH. B R. BASKARAN , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 5147 /MUM/201 4 ( / ASSESSMENT YEAR: 2005 - 06 ) KAUSHALYA SAMPAT, FLAT NO. 1A, HILL TIP SOCIETY, PALI HILL ROAD, BANDRA(W), MUMBAI - 400060 / VS. ITO - 9(3 ) (2) PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 4000 12 ./ ./ PAN NO. AA QPS0609F ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI K. GOPAL & MS. NEHA PARANJAPE, AR / RESPONDENTBY : SHRI ANOOP HIWASE , DR / DATE OF HEARING : 10.10 .2018 / DATE OF PRONOUNCEMENT : 11/12/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 30, MUMBAI DATED 09.06.14 F OR AY 20 05 - 06 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE ASSESSMENT ORDER PASSED U/S 143 (3) R.W.S 147 OF THE I.T. ACT, WHICH IS INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) ERRED IN UPHOLDING THE ADDITION OF UNDISCLOSED INCOME OF RS. 1,15,25,000 / - . 3. THE APPELLANT RESERVES THE RIGHT TO ADD, TO ALTER, OR AMEND THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2 . THE BRIEF FACT S OF THE CASE ARE THAT THE R ETURN OF INCOME DECLARING TOTAL COME OF RS.5,26,702/ - WAS FILED ON 31.10.2005 AND THE SAME WAS PROCESSED U/S. 143(1) OF THE I.T.ACT, 1961 ON 06 - 03 - 2006. SURVEY ACTION U/S.13 3A OF THE I.T. ACT WAS CONDUCTED BY THE ITO ON 12 - 09 - 20 07 IN THE CASE OF M/S. DECCAN ENTERPRISES, WHERE THE ASSESSEE IS A PARTNER. D URING THE COURSE OF SURVEY ACTION, INCRIMINATING DOCUMENTS AND LOOSE PAPERS WERE FOUND IN THE CASES OF THE PARTNERS OF THE FIRM INCLUDING THE ASSESSEE . DURING THE COURSE OF SURVEY ACTION, STATEMENT OF SHRI R.C. SAMPAT, HUSBAND OF THE ASSESSEE AND HOLDER OF POWER OF ATTORNEY ON BEHALF OF THE ASSESSEE, WAS RECORDED ON OATH AND IN 3 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT THE SAID STATEMENT, SHRI R.C. SAMPAT HAS ADMITTED THAT HE AND HIS WIFE HAD SOL D TWO FLATS DURING FINANCIAL YEAR 2004 - 05 W ITH VALUE EXCEEDING RS.30,00,000 / - EACH AND HAD EARNED SHORT TERM CAPITAL GAIN ON SALE OF THESE FLATS. ON THE BASIS OF THIS INFORMATION, THE ASSESSMENT WAS REOPENED U/S 147 OF THE I.T. ACT AND CONSEQUENTLY ORDER U /S 143(3) R.W.S. 147 OF THE I.T. ACT WAS PASSED THEREBY MAKING ADDITION OF ENTIRE RECEIPT OF RS. 1,15,25,000/ - ON SALE OF THESE PROPERTIES, WAS TREATED AS INCOME OF ASSESSEE FOR THE YEAR UNDER CONSIDERATION UNDER THE PROVISION OF SECTION 68 OF THE I.T. ACT . AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES, DISMISSED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1 & 2 . 3 . THESE GROUND S RAISED BY THE ASSESSEE ARE INTER CONNECTED AND INTER RELATED AND RELATES TO CHALLENGING THE ORDER OF LD. 4 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT CIT(A) IN UPHOLDING THE ASSESSMENT ORDER PASSED U/S 143 (3) R.W.S 147 OF THE I.T. ACT, WHEREIN ADDITION ON ACCOUNT OF UNDISCLOSED INCOME OF RS. 1,15,25,000/ - WAS MADE, THEREFORE WE THOUGHT IT FIT TO DISPOSE OF THE SAME BY THIS COMMON ORDER. 4 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERU SED THE MATERIAL PLACED ON RECORD, JUDGMENT CITED BY BOTH THE PARTIES AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUNDS RAISED BY THE ASSESEE IN PARA NO. 5 (5.1 TO 5.2) OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 5.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT, VIDE ORDER SHEET ENTRY DATED 05.06.2014, HAS STATED THAT ADDITION O F RS. 63 LAC, AS UNDISCLOSED INCOME IS ACCEPTABLE TO THE APPELLANT, AS PER THE ASSESSMENT ORDER. HOWEVER, IN RESPECT OF AMOUNT OF RS. 52.25 LAC BEING ON ACCOUNT OF SALE OF SPENCER COURT IN BANGALORE, THE APPELLANT'S SUBMISSION IS THAT THE SAID PROPERTY BEL ONGS TO HER 5 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT HUSBAND, SHRI R. C. SAMPAT, WHO IS NO MORE, HENCE, THE SAID AMOUNT IS NOT TAXABLE IN HER HANDS. 5.2 I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT. IN VIEW OF ADMISSION OF THE APPELLANT AS HER UNDISCLOSED INCOME, ADDITION OF RS. 52.25 LAC ON A/C OF SALE PROCEEDS OF SPENCER COURT IN CONFIRMED. IN SO FAR AS THE APPELLANT'S SUBMISSION REGARDING THE SALE PROCEEDS OF RS. 63 LAC FROM THE OTHER PROPERTY IS CONCERNED, AS PER THE FACTS MENTIONED IN THE APPELLANT'S LETTER DATED 18.12.2004, REPROD UCED BY THE AO IN PARA 5.3 OF THE ORDER, I FIND THAT IN THE NAMES OF THE SELLERS, NAME OF MRS. KAUSHALYA SAMPAT, THAT IS, THE APPELLANT IS ALSO APPEARING IN THE CASE OF SALE OF SPENCER COURT AS WELL AS BELVEDERE COURT, THEREFORE, AS FAR AS NAME OF THE APPE LLANT IN CONCERNED, IT IS APPEARING BOTH FOR THE PURCHASE OF SALE OF THE ABOVE PROPERTIES. THE FACTS RELATING TO PURCHASE AND SALE OF SPENCER COURT AND BELVEDERE ARE, THEREFORE, IDENTICAL. IN RESPECT OF BELVEDERE COURT, AR OF THE APPELLANT HAS HIMSELF ON B EHALF OF THE APPELLANT VIDE ORDER SHEET DATED 05.06.2014 ACCEPTED THE ADDITION OF RS. 63 LAC IN HER CASE. THEREFORE, THE ARGUMENT GIVEN BY THE APPELLANT THAT IN RESPECT OF SPENCER COURT, AMOUNT OF RS. 63 LAC IS NOT TAXABLE IN HER HANDS SINCE THE FLAT BELON GED TO LATE SHRI R.C. SAMPAT IS NOT FOUND VALID. I, THEREFORE, REJECT THE ABOVE SUBMISSIONS OF THE APPELLANT 6 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT AND UPHOLD THE ADDITION OF RS. 63 LAC ALSO IN THE HANDS OF THE APPELLANT. ADDITION OF RS. 1,15,25,000/ - , AS DISCLOSED INCOME IN THE HANDS OF THE AP PELLANT, IS, THEREFORE, CONFIRMED AND GROUNDS OF APPEAL IS DISMISSED. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS ORDERS PASSED BY REVENUE AUTHORITIES, WE FIND FROM THE RECORDS THAT THE AO WHILE PASSING ORDER OF ASSESSMENT U/S 143(3 ) R.W.S 147 OF THE I.T. ACT, HAD HELD THAT IT IS AN UNDISPUTED FACT THAT CHEQUE/DD OF THE SALE TRANSACTIONS IN RESPECT OF FLATS WERE ISSUED IN THE NAME OF SHRI. R. C. SAMPAT , SO THERE WAS POSSIBILITY THAT THE CHEQUE /DRAFT MUST HAVE BEEN RECEIVED BY SHRI R . C. SAMPAT IN HIS NAME, ON BEHALF OF ASSESSEE. THEREFORE, AO WAS OF THE VIEW THAT IT CANNOT BE SAID THAT THE ASSESSEE HAD NOT RECEIVED ANY MONEY ON SALE OF THE PROPERTIES AND THEIR SALE PROCEEDS WERE FOUND TO BE TAXABLE IN THE HANDS OF THE ASSESSEE. 5. O N APPEAL BEFORE LD. CIT(A), LD. AR HAD TAKEN A PLEA THAT THE RECIPIENT OF THE SALE CONSIDERATION WAS SHRI R. C. SAMPAT AND ASSESSEE WAS NEVER THE OWNER OF THE PREMISES SOLD DURING THE FINANCIAL YEAR UNDER CONSIDERATION, THEREFORE SHE WAS NEITHER THE 7 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT CONTRI BUTORY PURCHASER NOR RECIPIENT OF ANY CONSIDERATION, THEREFORE NO AMOUNT COULD BE ADDED TO HER INCOME. APART FROM THAT, LD. AR HAD ALSO TAKEN AN ALTERNATIVE STAND THAT IN THE CASE OF SPENCER COURT, THERE IS SHORT TERM CAPITAL LOSS OF RS. 9.45 LAKHS AND IN THE CASE OF BELVEDERE COURT, SHORT TERM CAPITAL GAIN IS OF RS. 7.44 LAKHS, THAT IS, NET SHORT TERM CAPITAL LO SS OF RS. 2.01 LAKHS BUT THE SAID CONTENTIONS OF THE ASSESSEE WERE REJECTED. 6. NOW THE MOOT QUESTION BEFORE US FOR CONSIDERATION IS THAT AS TO WHAT CAN BE TAXED IN THE HANDS OF THE ASSESSEE. AS PER THE PROVISION OF INCOME TAX, ONLY THE PROFIT OF THE ASSESSEE CAN BE TAXED IN THIS YEAR. ALTHOUGH IN PAR 5.1 OF THE ORDER OF LD. CIT(A), I T HAS BEEN MENTIONED THAT THE AR OF THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 05.06.14 HAD STATED T HAT ADDITION OF RS. 63 LAKHS, AS UNDISCLOSED INCOME IS ACCEPTABLE TO THE ASSESSEE, BUT AT THE SAME TIME, WE HAVE TO SCRUTINIZE THE PROVISION OF INCOME TAX AN D AS PER THE SAID PROVISION, ONLY THE PROFIT OF THE ASSESSEE CAN BE TAXED AND THAT PERIOD WHICH HAD ACCRUED DURING THE YEAR UNDER CONSIDERATION. 8 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT 7. THEREFORE, KEEPING IN VIEW OUR ABOVE DISCUSSION, WE DIRECT THE AO TO CALCULATE THE PROFIT, IF ANY, RECEIVED BY THE ASSESSEE FROM THE SALE OF PROPERTIES I.E. SPENCER COURT AT RS. 52.25 LAKHS AND BELVEDERE COURT AT RS. 63 LAKHS, THEN THE SAME CAN BE TAXED AS CAPITAL GAIN. IN VIEW OF THE SAME, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE F ILE OF AO ACCORDINGLY. WITH THESE DIRECTIONS, THESE GROUND OF APPEAL FILED BY THE ASSESSEE ARE PARTLY A LLOWED FOR STATISTICAL PURPOSES. GROUND NO. 3 8 . THIS GROUND IS GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 9 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DEC , 2018 . SD/ - SD/ - ( B. R. BASKARAN ) (SANDEEP GOSAIN) / A COUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 11 . 1 2 .201 8 SR.PS . DHANANJAY 9 I.T.A. NO. 5147 /MUM/201 4 KAUSHALYA SAMPAT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI