DCIT 26(2), MUMBAI V. DR SONAL APOORVA SHAH, MUMBAI

ITA 5154/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2130 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 11-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund
• Section: 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , , , BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.5154/MUM/2014 ( / ASSESSMENT YEAR: 2010-11) DY. COMMISSIONER OF INCOME TAX 26(2) ROOM NO. 613, K.G.MITTAL AYURVED HOSP. , CHARNI ROAD (W), MUMBAI - 400002 / VS. DR. SONAL APOORVA SHAH 198/14, SHREE JAGDISH NIWAS, NEAR NUTAN RESTAURANT, OPP. GTB RAILWAY STATION, SION (E), MUMBAI - 400022 ./ ./ PAN/GIR NO. : AJTPS9936K ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 15.09.2016 /DATE OF PRONOUNCEMENT: 28.10.2016 / O R D E R PER AMARJIT SINGH, JM: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 23.05.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 28, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2010-11. REVENUE BY: SHRI VIKRAM BATRA ASSESSEE BY: SHRI SNEHAL R. SHAH ITA NO.5154/M/2014 A.Y. 2010-11 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND:- 1) (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON CASH DEPOSIT OF RS.4.10 LACS ON ACCOUNT OF SUFFICIENT CASH WITHDRAWAL WITHOUT APPRECIATING HIS OWN FINDING THAT CASH WITHDRAWAL WAS ONLY RS.81,000/- DURING THE YEAR. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS SUBMITTED THAT THE ORDER OF CIT(A) IS INCONSISTENT WITH THE FACTS. 2) (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.59,86,052/- HOLDING THAT THE AMOUNT IS TAXED AS CAPITAL GAIN WITHOUT APPRECIATING THAT THE AMOUNT OFFERED ON ACCOUNT OF CAPITAL GAIN WAS NIL. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN NOT GIVING OPPORTUNITY TO THE A.O. TO EXAMINE THE APPLICABILITY OF CAPITAL GAIN ON SALE OF FLAT. (C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN NOT EXAMINING THE APPLICABILITY OF PROVISION OF SECTION 2(22)(C) OF THE ACT. (D) ON THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS SUBMITTED THAT ISSUE MAY BE SET ASIDE DENOVO TO THE A.O. FOR EXAMINATION AFRESH. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME ON 29.07.2010 DECLARING TOTAL INCOME TO THE TUNE OF RS.1,08,43,010/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY PROCEEDINGS UNDER THE CASS. ACCORDINGLY, THE NOTICES U/S.143(2) AND 142(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WERE ISSUED AND SERVED UPON THE ASSESSEE BY THE ITO 11(3)(3), MUMBAI. ITA NO.5154/M/2014 A.Y. 2010-11 3 THEREAFTER, THE CASE WAS TRANSFERRED FROM ITO 11(3)(3) TO THE CHARGE. THEREAFTER, AN ANOTHER NOTICE U/S.142(1) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. THE SOURCES OF INCOME OF THE ASSESSEE CONSISTS INCOME FROM THE SALARY, HOUSE PROPERTY AND CAPITAL GAIN. THE ASSESSEE DEPOSITED THE CASH AMOUNTING TO RS.4,10,000/- IN HIS SAVINGS BANK ACCOUNT, THEREFORE THE NOTICE WAS ISSUED TO THE ASSESSEE AND FINDING NON-JUSTIFIABLE, THE ASSESSING OFFICER TREATED THE INCOME TO THE TUNE OF RS.4,10,000/- U/.S 68 OF THE ACT AND ACCORDINGLY TAXED. THE ASSESSING OFFICER ALSO EXAMINED THE SALE OF TWO FLATS TO THE TUNE OF RS.92,50,000/- AND RS.45,00,000/- WHICH WERE IN THE MORE RATES IN COMPARISON TO THE MARKET VALUE, THEREFORE, THE DIFFERENCE TO THE TUNE OF RS.59,86,052/- WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE THE REVENUE HAS FILED THE APPEAL BEFORE US. ISSUE NO.1:- 4. UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION TO THE TUNE OF RS.4,10,000/-. THE REPRESENTATIVE OF THE REVENUE HAS ARGUED THAT THERE IS NO PROPER EXPLANATION WITH REGARD TO THE DEPOSIT OF CASH OF RS.4,10,000/- IN THE ACCOUNT OF THE ASSESSEE BUT THE CIT(A) HAS WRONGLY ALLOWED THE CLAIM OF THE ASSESSEE, HENCE THE ORDER OF THE CIT(A) ON THIS POINT IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. HOWEVER, THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS STRONGLY RELIED UPON THE CIT(A) IN QUESTION. ON ITA NO.5154/M/2014 A.Y. 2010-11 4 APPRAISAL OF THE RECORD, IT CAME INTO THE NOTICE THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD DEPOSITED AN AMOUNT OF RS.4,10,000/- CASH IN HIS SAVINGS BANK ACCOUNT. UPON, ASKING OF THE ASSESSING OFFICER, THE ASSESSEE EXPLAINED THAT THE ASSESSEE DEPOSITED THIS AMOUNT OUT OF THE CASH IN HAND AT THE BEGINNING OF THE YEAR OF RS.3,50,000/- AND THE CASH WITHDRAWN OF RS.81,000/-. DURING THE YEAR THE ASSESSEE ALSO SHOWED THE CASH BOOK WHICH SHOWS AN AMOUNT OF RS.3,50,401/- CASH IN HAND AS ON 31.03.2009. THE ASSESSING OFFICER WAS OF THE VIEW THAT THERE WAS NO SUFFICIENT WITHDRAWAL DURING THE YEAR, THEREFORE, FINDING UNJUSTIFIABLE EXPLANATION, THE ASSESSING OFFICER ADDED THE SAID AMOUNT IN THE INCOME OF THE ASSESSEE U/S.68 OF THE ACT. BEFORE GOING FURTHER IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD:- IN RESPECT OF ADDITION OF RS.4,10,000/- FOR THE CASH DEPOSIT IN THE BANK ACCOUNT, IT IS SEEN THAT THE ASSESSEE HAD OPENING CASH BALANCE OF RS.3,50,401/- WHICH IS ALSO SHOWN BY HER IN THE WEALTH TAX RETURN FILED FOR IMMEDIATELY PRECEDING YEAR. JUST BECAUSE THERE ARE NOT EXCESSIVE WITHDRAWALS IN THE PRECEDING YEAR, THE CONCLUSION DRAWN BY THE ASSESSING OFFICER THAT THE ASSESSEE COULD NOT HAVE OPENING CASH BALANCE AT THE ASSESSING OFFICER BEGINNING OF THIS YEAR, IS ILL FOUNDED. THE OPENING CASH BALANCE AND THE WITHDRAWALS MADE BY THE ASSESSEE DURING THE YEAR ARE SUFFICIENTLY EVIDENCED AND CANNOT BE IGNORED. ACCORDINGLY THE CASH DEPOSIT MADE BY THE ASSESSEE IN THE BANK ITA NO.5154/M/2014 A.Y. 2010-11 5 DURING THE YEAR ARE FULLY EXPLAINED. THE ADDITION MADE IN THIS REGARD FOR RS.4,10,000/- DOES NOT DESERVE TO BE UPHELD. THE SAME IS DIRECTED TO BE DELETED. 5. IN VIEW OF THE ABOVE SAID ORDER, IT IS QUITE CLEAR THAT THE ASSESSEE HAS SHOWN THE OPENING CASH BALANCE OF RS.3,50,401/- WHICH WAS SHOWN IN HER WEALTH TAX RETURN FILED IMMEDIATELY IN THE PRECEDING YEAR. IT IS NOT A SUFFICIENT GROUND TO DECLINE THE CLAIM OF THE ASSESSEE THAT THERE WAS NO WITHDRAWAL IN THE SAID RELEVANT YEAR. THE OPENING CASH BALANCE AND WITHDRAWN MADE BY THE ASSESSEE WERE SUFFICIENT TO JUSTIFY THE CLAIM OF THE ASSESSEE WITH REGARD TO THE DEPOSIT OF AN AMOUNT OF RS.4,10,000/-. NO DOUBT, THEREFORE, IN THE SAID CIRCUMSTANCES THE FINDING OF THE CIT(A) IS QUITE JUSTIFIABLE WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO.2:- 6. UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.59,86,052/- WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF DIFFERENCE ON SALE VALUE AND THE MARKET VALUE OF THE SALE OF TWO FLATS BEARING FLAT NO.1806 LAKE LUCERNE AND FLAT NO.B-501 DHEERAJ REGENCY. IN BRIEF THE ASSESSEE HAS SHOWN THE SALE OF HER TWO FLATS FOR A SUM OF RS.92,50,000/- AND FOR A SUM OF ITA NO.5154/M/2014 A.Y. 2010-11 6 RS.45,00,000/- RESPECTIVELY. THE ASSESSING OFFICER ASSESSED THE VALUE OF THE SHARES ON THE BASIS OF STAMP DUTY AND ADDED THE DIFFERENCE TO THE TUNE OF RS.59,86,052/- IN THE INCOME OF THE ASSESSEE. BEFORE GOING FURTHER, IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD:- THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.59,86,052/- AS PERQUISITE VALUE FOR DIFFERENCE BETWEEN THE SALE PRICE OF TWO FLATS SOLD BY THE ASSESSEE TO HER EMPLOYER AND THE STAMP DUTY VALUATION OF THE TWO FLATS. THE CONCLUSION DRAWN BY THE ASSESSING OFFICER IS ILL FOUNDED AS FIRSTLY THE EMPLOYER HAS FURTHER SOLD THOSE FLATS AT EVEN HIGHER VALUE WHICH JUSTIFIES THE HIGH VALUE FOR WHICH THESE FLATS WERE SOLD BY THE ASSESSEE TO THE EMPLOYER. IT HAS ALSO BEEN CLAIMED BY THE AR THAT THE STAMP DUTY VALUATION DOES NOT REFLECT THE TRUE MARKET VALUE OF THESE TWO FLATS. SECONDLY, EVEN IF IT IS PRESUMED THAT THE FLATS WERE SOLD AT ABNORMAL HIGH PRICE BY THE ASSESSEE TO HER EMPLOYER, AND THE EMPLOYER HAS BENEFITED THE ASSESSEE IN THIS MANNER, THERE WAS NO NEED TO CONSIDER PERQUISITE VALUE IN THIS REGARD AS THE FULL AMOUNT RECEIVED BY THE ASSESSEE HAS ALREADY BEEN OFFERED BY HER TO TAX AS CAPITAL GAIN. FURTHER, MAKING AN ADDITION AS PERQUISITE VALUE IN THIS REGARD AS THE FULL AMOUNT RECEIVED BY THE ASSESSEE HAS ALREADY BEEN OFFERED BY HER TO TAX AS CAPITAL GAIN. FURTHER, MAKING AN ADDITION AS PERQUISITE AMOUNTS TO DOUBLE TAXATION. THE ADDITION MADE BY THE ITA NO.5154/M/2014 A.Y. 2010-11 7 ASSESSING OFFICER IS THEREFORE NOT JUSTIFIED. ACCORDINGLY, THE ADDITION OF RS.59,86,052/- MADE BY THE ASSESSING OFFICER IN THIS REGARD, IS DIRECTED TO BE DELETED. 7. ON APPRAISAL OF THE ABOVE SAID ORDER THE CIT(A) HAS CONSIDERED THIS FACT THAT THE EMPLOYER HAS FURTHER SOLD THE FLATS ON HIGHER VALUE WHICH JUSTIFY THE CLAIM OF THE ASSESSEE THAT THE FLATS WERE NOT SOLD IN LESS VALUE. FURTHER, THE CIT(A) IS ALSO OF THE VIEW THAT IF THE EMPLOYER BENEFITTED THE EMPLOYEE BY PURCHASING THE FLAT IN HIGHER VALUE, THEN IN THESE CIRCUMSTANCES ALSO THERE IS NO NEED TO CONSIDER THE PERQUISITE VALUE AS THE ASSESSEE HAD ALSO OFFERED THE TAX UPON THE CAPITAL GAIN. FURTHER, ADDITION OF THE SAID AMOUNT WOULD TANTAMOUNT THE DOUBLE TAXATION. NO DISTINGUISHABLE FACTS HAVE BEEN PLACED ON RECORD TO WHICH IT CAN BE ASSUMED THAT THE CIT(A) HAS ARRIVED AT WRONG CONCLUSION. IN VIEW OF THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER JUDICIOUSLY AND CORRECTLY WHICH IS NOT REQUIRED TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ITA NO.5154/M/2014 A.Y. 2010-11 8 ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 28 TH OCTOBER, 2016 MP / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI