DEEPAK KUNDANMAL RATHI, PUNE V. DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE -5 ,PUNE, Pune

ITA 525/PUN/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6672 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-01-2021
• Assessment Year: 2004-2005
• Appeal Filed On: 03-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Reassessment proceedings; Set aside
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.525/PUN/2020 / ASSESSMENT YEAR : 2004-05 DEEPAK KUNDANMAL RATHI, C/O. RATHI RATHI AND CO., CHARTERED ACCOUNTANTS, 202, KAMAL KIRTI, ABOVE SBI, OPP. PU LA DESHPANDE GARDEN, SINHAGAD ROAD, PUNE 411 030 PAN : ACVPR2109J VS. DCIT, CIRCLE-5, PUNE (APPELLANT) (RESPONDENT) / ORDER PER R.S. SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-1, AURANGABAD ON 24-03-2017 IN R ELATION TO THE ASSESSMENT YEAR 2004-05. 2. THIS APPEAL IS TIME BARRED BY 1168 DAYS. THE ASSESS EE HAS FILED A CONDONATION PETITION GIVING REASONS FOR THE DELAY. T HE SAID REASONS HAVE BEEN PERUSED AND FOUND TO BE SATISF ACTORY. THE DELAY IS, THEREFORE, CONDONED AND THE APPEAL IS ADMITTE D FOR HEARING. APPELLANT BY SHRI PARAG RATHI RESPONDENT BY SHRI S. P. WALIMBE DATE OF HEARING 29-01-2021 DATE OF PRONOUNCEMENT 29-01-2021 ITA NO. 525/PUN/2020 DEEPAK KUNDANMAL RATHI 2 3. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF ADDITION TO THE EXTENT OF RS.10,50,000/- AND ITS FURTHER ENHANCEMENT TO RS.23,21,000/- BY THE LD. CIT(A). 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE DID NOT FILE HIS RETURN FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER (AO) ISSUED NOTICE U/S.148 BY OBSERVING THAT THERE WAS SOME LAND TRANSACTION DATED 25-07-206 UNDER WH ICH THE ASSESSEE AND MR. SHIVRATAN MOTILAL RATHI PURCHASED A PIE CE OF LAND AT SURVEY NO.4076, MUNICIPAL PROPERTY NO.1-28-76, MANTHA ROAD, JALNA FROM RASHESHAM RAMNARAYAN RATHI (GPA HOLDER). THE AO FURTHER OBSERVED IN THE REASONS THAT TOTAL PAYMENT OF RS.21.00 LAKH WAS MADE TOWARDS THE AFORESAID LAND PURCHASE, WITH THE ASSESSEES SHARE AT RS.10,50,000/-, WHICH WAS NOT DISCLOSED. THE ASSESSEE DID NOT ATTEND THE ASSES SMENT PROCEEDINGS WHICH LED TO THE PASSING OF THE ASSESSMENT ORDE R U/S.144 R.W.S.147 OF THE INCOME-TAX ACT, 1961 (HEREINAF TER ALSO CALLED THE ACT) MAKING ADDITION OF RS.10,50,000/-. THE LD. CIT(A) DISMISSED THE ASSESSEES APPEAL AND MADE FURTHER ENHANCEMENT BY NOTICING THAT THERE WAS CERTAIN OTHER CASH DEPOSITS TOTALING UP TO RS.23,21,200/- IN THE ASSESSEES BAN K ACCOUNT MAINTAINED WITH JALNA MERCHANTS COOPERATIVE BANK. ITA NO. 525/PUN/2020 DEEPAK KUNDANMAL RATHI 3 5. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO INITIATED REASSESSMENT PROCEEDINGS ON THE BASIS OF THE PROPERTY ALLEGEDLY PURCHASED BY THE ASSESSEE AND MR. SHIVRATAN MOTILAL RATHI. HE TOOK ME THROUGH THE ORDER PASSED BY THE TRIBUNAL ON 11-03-2019 IN THE CASE OF MR. SHIVRATAN MOTILAL RATHI VS. ITO IN ITA NOS. 730 TO 733/PUN/2016 IN WHICH THE MATTER HAS BEEN RESTORED. IT WAS PRAYED THAT A SIMILAR DIRECTION BE GIVEN. 6. I HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS AN ADMITTE D POSITION THAT THE AO STARTED THE PROCEEDINGS U/S.148 BY OBSERVING THAT THE ASSESSEE ALONG WITH MR. SHIVRATAN MOTILAL RATHI MADE INVESTMENT TO THE TUNE OF RS.21.00LAKH WHICH WAS NOT DISCLOSED BY THEM. THE TRIBUNAL IN THE AFORESAID ORDER IN THE CASE OF MR. SHIVRATAN MOTILAL RATHI HAS EXAMINED THIS ISSUE IN PARA 9 AND OBSERVED AS UNDER : 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. THE ASSESSMENT FOR ASSESSMENT YEAR 2004-05 WAS REOP ENED UNDER SECTION 147 OF THE ACT BY THE ASSESSING OFFICER AFT ER RECORDING REASONS FOR REOPENING THE ASSESSMENT, THAT THE ASSE SSEE IN HIS INDIVIDUAL CAPACITY HAD MADE INVESTMENT IN PURCHASE OF PROPERTY TO THE EXTENT OF 50%. THE BASIS FOR RECORDING THE A FORESAID REASONS WAS THE DOCUMENT EXECUTED IN THE NAME OF ASSESSEE, WHEREIN HE ALONG WITH ONE SHRI DEEPAK KUNDANMAL RATHI HAD PURC HASED THE PROPERTY AT JALNA, FOR WHICH TOTAL CONSIDERATION OF 21 LAKHS WAS PAID. THE SAID CONSIDERATION OF 21 LAKHS WAS PAID OUT OF BANK ACCOUNT OF SHRI DEEPAK KUNDANMAL RATHI. THE ASSESSE E HAS TIME AND AGAIN STRESSED THAT THE SAID PROPERTY DOES NOT BELONG TO HIM ITA NO. 525/PUN/2020 DEEPAK KUNDANMAL RATHI 4 BUT IS THE ASSET OF HUF AND OTHER 50% IS OWNED BY J UGALKISHORE KUNDANMAL RATHI (HUF). THE ASSESSEE HAS FILED ON RE CORD SUFFICIENT EVIDENCE TO ESTABLISH ITS CASE IN THIS R EGARD. MERELY BECAUSE THE DOCUMENT WAS RECORDED IN THE INDIVIDUAL NAMES DOES NOT CHANGE THE STATUS OF ITS HOLDING BY HUF. WE ARE OF THE VIEW THAT THIS ASPECT OF ACQUISITION OF LAND BY HUF AND THEREAFTER ON COMPLETION OF CONSTRUCTION ON THE AFORESAID LAND, T HE PROFITS BEING OFFERED BY RESPECTIVE HUFS NEEDS DELIBERATION BY TH E ASSESSING OFFICER. ACCORDINGLY, WE REMIT THIS ISSUE BACK TO T HE FILE OF ASSESSING OFFICER, WHO SHALL DECIDE THE ISSUE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. EVEN THE ASSESSEE IS DIRECTED TO CO-OPERATE AND FURNISH THE COMPLETE INFORMATION BEFORE THE ASSESSING OFFICER WITH SUPPO RTING EVIDENCE IN ORDER TO ESTABLISH ITS CASE. THE ASSESSING OFFIC ER SHALL DECIDE THE ISSUE IN ACCORDANCE WITH LAW. HENCE, THE GROUND S OF APPEAL RAISED BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURP OSES. 7. SINCE THE FACTS AND CIRCUMSTANCES OF THE INSTANT APPEAL ARE ADMITTEDLY MUTATIS MUTANDIS SIMILAR TO THOSE IN THE CASE OF MR. SHIVRATAN MOTILAL RATHI, RESPECTFULLY FOLLOWING THE PRECEDENT, I SET ASIDE THE IMPUGNED ORDER AND SEND THIS MATTER BACK TO THE FILE OF AO FOR DECIDING THIS ISSUE IN CONFORMITY WITH THE VIEW TAKEN BY HIM IN THE CASE OF MR. SHIVRATAN MOTILAL RATHI PURSUANT TO THE TRIBUNAL ORDER. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2021. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 29 TH JANUARY, 2021 SATISH ITA NO. 525/PUN/2020 DEEPAK KUNDANMAL RATHI 5 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-1, AURANGABAD 4. THE PR. CIT-1, AURANGABAD 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 29-01-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29-01-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -- JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -- JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *