The Income Tax Officer, Pathankot V. Sh. Sakun Aggarwal S/O Sh.Anil Aggarwal, Pathankot

ITA 533/ASR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5551 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARAM SINGH LD
• Assessee Lawyers: ASHWANI KALIA LD
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBU NAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 533(ASR)/2016 ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER, WARD-6(3), PATHANKOT. PAN:AHPPA-7621P VS. SH. SAKUN AGGARWAL, S/O SH. ANIL AGGARWAL, GARDEN COLONY, PATHANKOT. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. DHARAM SINGH (LD. D R) RESPONDENT BY: SH. ASHWANI KALIA (LD. CA) DATE OF HEARING: 25.07.2017 DATE OF PRONOUNCEMENT:31.07. 2017 ORDER PER N. K. CHOUDHRY: THE INSTANT APPEAL FILED BY THE REVENUE DEPARTMENT, FEELING AGGRIEVED AGAINST THE ORDER DATED 26 TH JULY, 2016 PASSED BY THE LD. CIT(A)-2, AMRITSAR IN APPEAL NO.34/2014-15, U/S 250(6 ) OF THE I.T. ACT. 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: IN THE CASE OF SH. SAKUN AGGARWAL S/O SH. ANIL AGG ARWAL, GARDEN COLONY, PATHANKOT FOR ASSESSMENT YEAR 2011-12 AGAIN ST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME-TAX(APPEALS)-2, A MRITSAR IN APPEAL NO. 34/2014-15 DATED 26.07.2016. 1. WHETHER THE LD. CIT(A) IS RIGHT IN ALLOWING RELIEF TO THE ASSESSEE OF RS.1,56,87000/- WHICH HAS BEEN PAID BY THE ASSESSEE IN CASH ON ACCOUNT OF UNEXPLAINED INVESTME NT AND IN VIOLATION PROVISIONS OF SECTION 40A(3) OF THE INCOM E-TAX ACT, 1961. I TA NO.533(ASR)/2016 A SST. YEAR: 2011-12 2 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND TH E GROUNDS OF APPEAL OF APPEAL ON OR BEFORE THE APPEAL IS HEARD A ND DISPOSED OFF. 3. IT IS PRAYED THAT THE ORDER OF THE COMMISSI ONER OF INCOME -TAX (APPEALS) BE SET ASIDE AND THAT OF THE AO BE R ESTORED ON MERITS. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASST. YEAR:2011-12 ON 28.02.2012 DECLARING TOTAL INCOME OF RS.61,67,219/- AND THE SAID RETURN WAS PROCESSED U/S 143( 2) DATED 25.06.2012 AND THE ASSESSING OFFICER DETERMINED T HE LIABILITY OF THE ASSESSEE BY HOLDING AS UNDER: THE SECTION 40A(3) WAS ENACTED TO CURB THE PROLIFERATI ON OF BLACK MONEY. THE WHOLE OF THE SECTION WAS TO FORCE T HE USE OF BANKING CHANNEL WHERE TRANSACTION AND IDENTITIES COULD BE RECORDED. IN THIS CASE, HAD THE DOCUMENTS NOT BEEN DISCOVERED DURING THE SURVEY, NO TRACE OF TRANSACTIO N WOULD HAVE BEEN LEFT AT ALL. IT IS TO SPECIFICALLY DISSUA DE PEOPLE FROM MAKING LARGE TRANSACTIONS IN CASH THAT SECTION 40A(3) WAS ENACTED. THEREFORE, IN THE PRESENT CASE THIS SECTION IS SQUARELY APPLICABLE. ACCORDINGLY THE PROFIT FR OM THE SALE OF LAND IS COMPUTED AS UNDER: PROFIT AS DECLARED BY THE ASSESSEE 51,04,500/- ADD: DISALLOWANCE U/S 40A(3) 1,56,87,000/- ____________ ASSESSED PROFIT FROM SALE OF LAND AS PER 2,07,91,500/- PROVISIONS OF CHAPTER IV D OF I.T. ACT 1961 I TA NO.533(ASR)/2016 A SST. YEAR: 2011-12 3 4. FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE ASS ESSING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE ITAT, AMRITSAR BENCH IN ITA NO.478(ASR)/2014 IN THE ASSESSEES OW N CASE DELETED THE DISALLOWANCE OF RS.1,56,87,500/- BY HOLDIN G AS UNDER: WITH REGARD TO THE DISALLOWANCE OF RS.1,56,87,000/ - U/S 40A(3) OF THE I.T. ACT, THE HONBLE ITAT VIDE ITS ORDER IN IT A NO.478(ASR)/2014 VIDE ORDER DATED 27.05.2016 HAD DELETED THIS ADDITION FO R THE REASON THAT IN THE SALE DEED THERE IS NO MENTION OF THE NAME OF THE AS SESSEE AND THEREFORE, IT IS CLEAR THAT THE ASSESSEE WAS NOT A PARTY TO THE S ALE DEED AND THE PRESUMPTION MADE BY THE AUTHORITIES BELOW THAT THE LAND WAS SOLD BY THE ASSESSEE IS NOT BASED UPON THE FACTS AND MATERIAL O N RECORD. FURTHER THERE WAS NO EVIDENCE OF PURCHASE OF LAND BY THE ASSESSEE AND ALSO THERE IS NO EVIDENCE THAT THE ASSESSEE MADE PAYMENTS TO THE OWN ERS OF LAND AS HAS ALREADY BEEN ESTABLISHED BY THE FACT THAT THE OWNER S HAD RECEIVED THE PAYMENTS FROM ACTUAL BUYERS ONLY AND THEREFORE, THE RE CANNOT BE ANY QUESTION OF DISALLOWANCE U/S 40A(3). SINCE THE DISALLOWANCE OF PAYMENTS OF PURCHASE PRIC E OF LAND IN CASH U/S 40A(3) OF THE ACT HAD BEEN DELETED BY THE HONBLE ITAT, AMRITSAR VIDE ITS ORDER IN ITA NO.478(ASR)/2014 DATED 27-05- 2016 IN THE CASE OF THE APPELLANT OF A.Y. 2010-11 ON IDENTICAL FACTS AS IN THE YEAR UNDER CONSIDERATION, THEREFORE, THE DISALLOWANCE OF RS.1, 56,87,500/- U/S 40A(3) OF THE ACT IN THE YEAR UNDER CONSIDERATION IS DELET ED. 5. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AS IT IS CLEAR FROM THE FACTS OF THE CASE THAT THE ASSESSE E HAD NOT MADE ANY CASH PAYMENT TO THE LAND OWNERS DIRECTLY AND T HE SALE DEED HAVE BEEN EXECUTED BETWEEN THE LAND OWNERS AND THE PU RCHASERS DIRECTLY AS IT REFLECTS FROM THE CONVEYANCE DEEDS. FURTHER, THE ASSESSEE DID NOT MAKE ANY PURCHASE OF LAND IN THE CONTROVERSY AND EVEN OTHERWISE IN THE ASSESSEES CASE QUA A. Y.2010- 11 WAS DEALT WITH BY THE CO-ORDINATION BENCH OF ITAT, AMRITSAR, WHEREBY DELETED THE ADDITION AS DISALLOWED UNDER THE SAID PROVISION. I TA NO.533(ASR)/2016 A SST. YEAR: 2011-12 4 FINALLY, CONSIDERING THE OVER ALL FACTS, CONCLUSION AND E FFECTS OF THE ORDER PASSED BY THE CO-ORDINATION BENCH AS WELL AS INDE PENDENTLY APPLYING THE MIND, WE DO NOT FIND ANY INFIRMITY, IM PROPRIETY AND ILLEGALITY IN THE ORDER PASSED BY THE LD. CIT(A), THE REFORE, IT DOES NOT REQUIRE TO BE INTERFERED WITH. HENCE, THE APPEAL OF THE REVENUE STANDS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHR Y) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED:31.07.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER