Sh. Swapan Bansal, Solan V. ITO, Parwanoo

ITA 526/CHANDI/2012

• Counselvise Citation: 52621514 RSA 2012
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital receipt; Bonafide mistake
• Section: 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 526 & 527/CHD/2012 A.Y. 2005-06 & 2006-07 SHRI SWAPAN BANSAL, V ITO, PLOT NO. 22-24, PARWANOO. SECTOR 1, PARWANOO, (H.P.). DISTT. SOLAN (HP). PAN: AAOPB-8412B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURINDER BABBAR RESPONDENT : SHRI N.K.SAINI DATE OF HEARING : 08.11.2012 DATE OF PRONOUNCEMENT : 23.11.2012 ORDER PER MEHAR SINGH, AM THESE TWO APPEALS OF THE APPELLANT ARE DIRECTED AGA INST THE CONSOLIDATED ORDER DATED 12.03.2012 PASSED BY C IT(A) FOR THE ASSESSMENT YEAR 2005-06 AND 2006-07 U/S 250 (6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). 2. IN THESE TWO APPEALS, THE GROUNDS OF APPEAL ARE IDENTICAL IN NATURE. THEREFORE, FOR THE SAKE OF BR EVITY AND CONVENIENCE, THE SAME ARE CONSIDERED AND DISPOSED O F TOGETHER BY THE CONSOLIDATED ORDER. HOWEVER, GROUN DS OF APPEAL IN RESPECT OF ITA NO. 526/CHD/2012 FOR THE ASSESSMENT YEAR 2005-06 ARE REPRODUCED HEREUNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS GROSSLY ERRED IN CONCURRING WITH THE LD. A.O. IN NOT ACCEPTING THE ASSESSEE'S CLAIM OF CAPITAL RE CEIPT 2 AND UPHOLDING THE ADDITION OF RS. 4,58,000/- WITHOU T PROPERLY APPRECIATING THE PROVISIONS OF SECTION 51 OF THE INCOME-TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS WHOLLY UNJUSTIFIED IN HOLDING IN CO NCURRENCE WITH THE LD. A.O. THAT IN THE ABSENCE OF WRITTEN AG REEMENT THE EARNEST/TOKEN MONEY RECEIVED BY THE ASSESSEE CA NNOT BE TREATED AS CAPITAL RECEIPT AGAINST THE PROPOSED SALE OF PROPERTY. 3. THAT THE LD. CIT(A) IS WHOLLY UNJUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,620/- AS AGAINST TH E ADDITION OF RS.5,000/- MADE BY LD. A.O. IN RESPECT OF AGRICULTURAL INCOME SHOWN AT RS. 6,600/- 4 APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUND OF APPEAL BEFORE THE DISPOSAL OF THE APPEAL. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' CONTENDED THAT THE RECEIPTS OF RS.4,58,000/- AND RS.5,52,000/- FOR THE ASSESSMENT YEAR 2005-06 AND 2 006-07 RESPECTIVELY, WERE WRONGLY SHOWN AS INCOME FROM PR OPERTY CONSULTANCY. IN FACT, SUCH SUMS PERTAIN TO AN AD VANCE RECEIVED FROM SHRI KETAN MEHTA, AGAINST ORAL AGREEM ENT TO SELL HIS PART OF THE LAND/PROPERTY. SUCH SUMS WERE FORFEITED BY THE SAID PERSON, AS HE WAS NOT INTERESTED IN THE SAID LAND OF PROPERTY. IT WAS, FURTHER, CONTENDED THAT ASSES SEE HAD ERRONEOUSLY TAKEN SAID ADVANCE, AS INCOME FROM OTH ER SOURCES'. LD. 'AR' WAS OF THE OPINION THAT SUCH ADV ANCES RECEIVED FROM SHRI KETAN MEHTA OF M/S SUPREME PROPE RTY, SASAULI ROAD, YAMUNA NAGAR, ARE DULY SUPPORTED BY T HE AFFIDAVIT FILED BY THE APPELLANT. LD. 'AR' WAS OF THE OPINION THAT THE ISSUE MAY BE RESTORED TO THE FILE OF THE A O, FOR 3 GATHERING FRESH EVIDENCES. LD. 'AR' ALSO JUSTIFIED THE CLAIM OF DEDUCTION ON ACCOUNT OF BANK INTEREST AND BANK C HARGES, AGAINST SUCH INCOME. LD. 'DR' PLACED RELIANCE ON TH E ORDER OF THE LOWER AUTHORITIES. 4. BOTH THE AO, AS WELL AS CIT(APPEALS), REJECTED S UCH CONTENTIONS OF THE ASSESSEE. LD. CIT(APPEALS) HAS PASSED VERY DETAILED AND WELL REASONED ORDER AND HIS FINDI NGS REMAINED UNREBUTTED BY THE ASSESSEE APPELLANT, IN R ESPECT OF BOTH THE ASSESSMENT YEARS. HOWEVER, FOR THE SAK E OF READY REFERENCE AND APPRECIATION OF THE SAME, FINDI NGS OF THE CIT(APPEALS) ON THIS ISSUE, ARE REPRODUCED HEREUNDE R : 3.3 THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CON SIDERED WITH REFERENCE TO THE FACTS OF THE CASE AND THE CASE LAWS RELIED UPON. IT IS NOTED THAT THE APPELLANT HAD SHOWN THE INCOME OF RS.4,58,000/- AS INCOME FROM 'P ROPERTY CONSULTANCY', AGAINST WHICH HE HAD ALSO SET OFF AN AMOUNT OF RS. 9,33,826 /-ON ACCOUNT OF BANK INTEREST AND BANK CHARGES. A SIMILAR CLAIM WAS MADE BY THE A PPELLANT IN THE NEXT ASSESSMENT YEAR ALSO IN WHICH HE HAD SHOWN INCOME F ROM 'PROPERTY CONSULTANCY' AT RS.5,52,000/-AGAINST WHICH HE HAD AGAIN SET OFF THE BANK INTEREST AND BANK CHARGES. IT WAS ONLY AFTER THE APPELLANT'S CASE WAS SELECTED FOR SCRUTINY ASSESSMENT, AND QUERIES WERE RAISED REGARDING THE DETAILS OF TH E GIVEN PROPERTY INCOME AND QUERIES WERE ALSO RAISED IN RESPECT OF THE ADMISSIB ILITY OF BANK INTEREST AGAINST THE SAID INCOME, THAT THE APPELLANT SEEMS TO HAVE TAKEN THE PLEA THAT THE AMOUNT OF RS.4,58,000/- (AND RS.5,52,000/- IN THE A.Y. 2006-0 7)WAS IN THE NATURE OF ADVANCE AGAINST THE PROPOSED DEAL OF A PROPERTY. WHEN THE I D. A.O. DESIRED THE DOCUMENTARY EVIDENCE IN SUPPORT OF THIS CLAIM, THE APPELLANT FAILED TO FURNISH ANY. HE INSTEAD SUBMITTED THAT THERE WAS NO WRITTEN AGRE EMENT AND THAT THE ADVANCE WAS IN THE SHAPE OF TOKEN MONEY. THE APPELLANT ALSO CLA IMED THAT HE HAD ERRONEOUSLY REFLECTED THE SAID ADVANCE UNDER THE HEAD 'INCOME F ROM PROPERTY CONSULTANCY'. HOWEVER, THE SAID PLEA OF THE APPELLANT DOES NOT AP PEAR TO BE VERY CONVINCING. AS ALREADY MENTIONED, IN THE NEXT ASSESSMENT YEAR ALSO , THE APPELLANT HAD CLAIMED INCOME OF RS.5,52,000/- FROM 'PROPERTY CONSULTANCY' . THUS, IT DOES NOT APPEAL TO LOGIC THAT THE APPELLANT HAS ERRONEOUSLY TAKEN THE SAID INCOME AS INCOME FROM PROPERTY CONSULTANCY IN THE NEXT YEAR AS WELL. IT A LSO DOES NOT APPEAL TO LOGIC THAT THE APPELLANT WAS RECEIVING THE 'TOKEN MONEY' IN IN STALLMENTS IN DIFFERENT YEARS WITHOUT ANY WRITTEN AGREEMENT WHATSOEVER. EVEN AS P ER THE PREVALENT TRADE PRACTICE, THE ADVANCE TOKEN MONEY IS GIVEN ONLY ONC E, AND THAT TOO AFTER MAKING AN AGREEMENT IN WRITING REGARDING THE SALE/PURCHASE OF PROPERTY IN QUESTION. BUT HERE IS A CASE WHERE THE APPELLANT IS CLAIMING THE RECEIPT OF ADVANCE MONEY AMOUNTING TO RS.10 LACS IN TWO DIFFERENT YEARS THROUGH TWO INST ALLMENTS, BUT WITHOUT ANY WRITTEN INSTRUMENT. IT IS ALSO NOT IN ACCORDANCE WITH THE PREVALENT AND ACCEPTED TRADE PRACTICE THAT A PROPOSED DEAL FOR TR ANSFER OF PROPERTY CAN REMAIN UNMATERIALIZED FOR TWO LONG YEARS. A HUGE ONUS OF E STABLISHING THE GENUINENESS OF HIS CLAIM LAY UPON THE APPELLANT ONCE THE ID. A.O. HAD REQUIRED HIM TO FURNISH THE COMPLETE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLA IM. THE APPELLANT CANNOT 4 CLAIM THAT HE FULLY DISCHARGED HIS ONUS BY FURNISHI NG THE NAME AND ADDRESS OF THE PROPERTY DEALER FROM WHOM HE HAD RECEIVED THE ADVAN CE MONEY. THE APPELLANT DID NOT, AT ANY STAGE OF THE ASSESSMENT PROCEEDINGS , SUGGEST OR OFFER THAT THE SAID PROPERTY DEALER SHOULD BE EXAMINED BY THE ID. A.O. IT WAS CATEGORICALLY COMMUNICATED BY THE ID. A.O. ON 24/8/2007 TO THE AP PELLANT THAT IN CASE HE FAILED TO FURNISH THE COPY OF THE AGREEMENT EXECUTED IN CO NNECTION WITH THE PROPOSED DEAL, IT SHALL BE PRESUMED THAT NO DEAL WAS EVER MA DE. DESPITE THIS, THE APPELLANT DOES NOT SEEM TO HAVE MADE ANY WORTHWHILE EFFORTS T O ESTABLISH THE AUTHENTICITY OF HIS CLAIM. THE APPELLANT APPEARS TO HAVE COMPLETELY OVERLOOKED THE FACT, THAT IF, A CLAIM OF INCOME ON A PARTICULAR HEAD IS MADE, IT IS FOR HIM TO PROVE THE GENUINENESS OF THAT HEAD OF INCOME AND THE ONUS CANNOT BE SHIFT ED AT THE DOOR STEP OF THE ASSESSING AUTHORITY EXPECTING HIM TO GO OUT AND HUN T FOR THE SOURCE CLAIMED BY THE ASSESSES. 3.4 THE TOTAL FACTS AND CIRCUMSTANCES OF THE APPELL ANT'S CASE FOR THE A.Y. 2005-06 AND 206-07 GIVE AMPLE REASON TO BELIEV E THAT THE APPELLANT HAD CORRECTLY SHOWN THE INCOME FROM ''PROPERTY CONS ULTANCY' ORIGINALLY IN HIS RETURNS OF INCOME. THE EXPRESSION 'PROPERTY CONSULT ANCY' CAN NOT BE USED FOR ANY MONEY RECEIVED IN ADVANCE FOR A PROPOSED DEAL OF PR OPERTY, EVEN BY MISTAKE. ON THE GIVEN FACTS, IT APPEARS THAT THE APPELLANT MUST HAVE EARNED INCOME ON ACCOUNT OF PROPERTY CONSULTANCY SERVICES WHICH HE D ULY REFLECTED IN HIS RETURNS OF INCOME, BUT HE TRIED TO AVOID THE PAYMENT OF TAX ON THE GIVEN INCOME BY CLAIMING A DEDUCTION ON ACCOUNT OF BANK INTEREST AND BANK CHAR GES. WHEN HIS CLAIM IN THIS REGARD WAS DISCOVERED TO BE FALSE AND NOT SUSTAINAB LE, HE TRIED TO AVOID THE PAYMENT OF TAX ON THE GIVEN INCOME FROM PROPERTY CO NSULTANCY BY CONCOCTING A STORY REGARDING HAVING THE MONEY RECEI VED AS AN ADVANCE AGAINST A PROPOSED TRANSFER OF PROPERTY. THE PROVISIONS OF SECTION 51 OF THE I. T. ACT CAME HANDY TO THE APPELLANT AND HE THOUGHT OF MAKING FUL L USE OF THE SAME IN ORDER TO CONVENIENTLY DEFER AND REDUCE HIS TAX LIABILITY ON THE INCOME HE HAD ACTUALLY EARNED. THE FACTS AND CIRCUMSTANCES OF THE CASE THU S CLEARLY INDICATE THAT THE APPELLANT, SIMPLY AS AN AFTERTHOUGHT, HAS TAKEN THE ALIBI OF ADVANCE MONEY. IN THE ABSENCE OF ANY INDEPENDENT AND COGENT EVIDENCE, THE SAID PLEA OF THE APPELLANT CANNOT BE ACCEPTED AT ITS FACE VALUE. THE AFFIDAVIT FURNISHED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS IS ONLY A SELF- SERVING EVIDENCE WHICH CARRIES NO VALUE. LIKEWISE THE -FACT THAT A PROPERTY OF THE APPELLANT SITUATED AT YAMUNA NAGAR WAS SOLD IN THE YEAR 2011-12, I. E. SIX YEARS AFTER THE RECEIPT OF THE SO- CALLED ADVANCE MONEY, ALSO DOES NOT IN ANY WAY PROV E THAT THE AMOUNT OF RS.4,58,000/- IN THE YEAR 2004-05 AND OF RS.5,52,00 0/- IN THE YEAR 2005-06 WAS ON ACCOUNT OF SOME ADVANCE MONEY AGAINST THE SAME PRO PERTY. ACCORDINGLY THE INCOME OF RS.4,58,000/- HAS BEEN CORRECTLY BROUG HT TO TAX BY THE ID. A.O. AS PER THE APPELLANT'S OWN RETURN OF INCOME. NO INTERFEREN CE IS CALLED FOR WITH THE SAID ACTION OF THE ID. A.O. THEREFORE, THE APPELLANT FAI LS ON THIS GROUND OF APPEAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, FACTS OF TH E CASE AND THE RELEVANT RECORDS. IT IS A CASE, WHERE THE A SSESSEE HAS FAILED TO FILE ANY CORROBORATIVE EVIDENCE, TO T HE CONTENTIONS MADE BY HIM IN RESPECT OF ERRONEOUS DEC LARATION OF INCOME, UNDER A WRONG HEAD IN THE RETURN OF INCO ME. THE ASSESSEE COULD HAVE TAKEN SHELTER U/S 139(5) OF THE ACT, FOR 5 THE PURPOSE OF RECTIFYING SUCH BONAFIDE MISTAKE. H OWEVER, IT APPEARS FROM THE FACTS OF THE CASE THAT ASSESSEE HA S RAISED SUCH CONTENTIONS, WITH A VIEW TO REDUCE THE TAX LIA BILITY, WITHOUT PRODUCING ANY RELEVANT, COGENT AND CORROBOR ATIVE EVIDENCE. THE ASSESSEE HAS FAILED EVEN TO FILE A C OPY OF THE AGREEMENT, BETWEEN SAID PROPERTY DEALER AND THE ASS ESSEE AND THE RECEIPT OF SUCH ADVANCE FROM SUCH PROPERTY DEALER. THE DEDUCTION CLAIMED BY THE ASSESSEE, IS NOT IN CO NSONANCE WITH PROVISIONS OF THE ACT. THEREFORE, WE ARE IN C OMPLETE AGREEMENT WITH THE FINDINGS OF THE CIT(APPEALS) IN RESPECT OF INTEREST AND BANK CHARGES FROM SUCH SELF-DECLARED I NCOME. THUS, GROUND NOS. 1 & 2 OF THE ASSESSEE APPELLANT, FOR BOTH THE ASSESSMENT YEARS, STAND DISPOSED OFF. 6. IN GROUND NO.3, APPELLANT CONTENDED THAT CIT(APP EALS) IS WHOLLY UNJUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,620/-, AS AGAINST ADDITION OF RS.5,000/- MADE BY THE AO, IN RESPECT OF INCOME OF RS.6,600/-. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, FACTS OF TH E CASE AND THE RELEVANT RECORDS AND FOUND THAT THE FINDING OF THE CIT(APPEALS), IN THE MATTER DOES NOT SUFFER FROM AN Y INFIRMITY, AS THE ASSESSEE HAS FAILED TO FILE ANY E VIDENCE TO SUPPORT HIS CONTENTION. HOWEVER, FOR THE SAKE OF R EADY REFERENCE, FINDINGS OF THE CIT(APPEALS), ARE REPROD UCED HEREUNDER : 10.1 IT IS NOTED THAT IN THE A. Y. 2006-07, THE APPELLANT COUL D NOT SUBMIT ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM THAT T HE LAND WAS GIVEN FOR CULTIVATION ON CONTRACT BASIS. HE SIMPLY CLAIMED TH E AGRICULTURAL INCOME OF RS.5,500/- EARNED IN CASH. IN VIEW OF THE APPELLANT 'S FAILURE TO ESTABLISH THE AUTHENTICITY OF HIS CLAIM OF AGRICULTURAL INCOME, T HE ADDITION MADE BY THE LD.AO IS FOUND TO BE IN ORDER AND IS UPHELD 6 8. ACCORDINGLY, GROUND OF APPEAL NO.3, RAISED BY TH E ASSESSEE FOR BOTH ASSESSMENT YEARS, IS DISMISSED. 9. GROUND NO. 4, RAISED BY THE ASSESSEE, IN BOTH TH E APPEALS IS GENERAL IN NATURE AND NEED NO SEPARATE ADJUDICATION. ACCORDINGLY, THE SAME IS DISMISSED. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE (ITA 526 & 527/CHD/2012), FOR THE ASSESSMENT YEARS 2005-06 & 2006-07, ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD NOV.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 RD NOV.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH