Smt. Usha Balasaheb Tekale, Pune V. Income tax Officer, Pune

ITA 533/PUN/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7267 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 06-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Capital asset; Benefit of exemption

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE SHRI VIKAS AWASTHY, JM . / ITA NO. 533/PUN/2017 ! '! / ASSESSMENT YEAR : 2011-12 SMT. USHA BALASAHEB TEKALE, FLAT NO. 5, BUILDING NO.21, DAULAT HOUSING SOCIETY, TALEGAON, DABHADE, PUNE-410 506 PAN : ADIPT1530B ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 8(4), PUNE. / RESPONDENT APPELLANT BY : SHRI PRAMOD SHINGTE RESPONDENT BY : SHRI SUDHENDU DAS / DATE OF HEARING : 19.09.2018 / DATE OF PRONOUNCEMENT : 28.09.2018 $ / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-6, PUNE DATED 19.12.2 016 FOR THE ASSESSMENT YEAR 2011-12. 2 ITA NO. 533/PUN/2017 A.Y.2011-12 2. THE ASSESSEE IN APPEAL HAS ASSAILED THE ADDITION OF RS.3 ,00,000/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT AND ADDITION O F RS.1,80,500/- MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 30.03.2012 DECLARING TOTAL INCOME OF RS.1,84,740/-. THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS. ACCORDINGLY, STATUTORY NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) WAS ISSUED TO THE ASSESSEE ON 01.08.2012. DURING SCRUTINY ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER MADE FOLLOWING ADDITIONS: I) UNDISCLOSED LONG TERM CAPITAL GAIN RS.2,20,511/- II) UNEXPLAINED CASH DEPOSIT IN THE BANK RS.4,36,500/- III) UNDISCLOSED INTEREST INCOME RS.2,608/- 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 17.02.2014, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). I N FIRST APPELLATE PROCEEDINGS, THE COMMISSIONER OF INCOME TAX (APPE ALS) ENHANCED THE ASSESSMENT BY MAKING ADDITION OF RS.3,00,000/- ON ACCO UNT OF UNEXPLAINED INVESTMENT. HOWEVER, THE COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCO UNT OF LONG TERM CAPITAL GAIN OF RS.2,20,511/-. IN RESPECT OF ADDITION OF RS.4,36 ,500/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS, THE COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE SAME TO RS.1,80,500/-. NOW, AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION S, THE ASSESSEE IS IN SECOND APPEAL BEFORE TRIBUNAL BY RAISING FOLLOWING GROUND S: 3 ITA NO. 533/PUN/2017 A.Y.2011-12 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED ASSESSING OFFICER EARNED IN PROPOSING THE A DDITION OF RS.3,00,000/- AS UNEXPLAINED INVESTMENT BY DISREGAR DING APPELLANT CONTENTION AND WITHOUT OFFERING AN OPPORTUNITY FOR EXPLANATION, THEREBY ALSO ERRED IN ENHANCING THE INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADDITION OF R S.1,80,500/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT BY DISREGARDING APPELLANT CONTENTION. 5. SHRI PRAMOD SHINGTE APPEARING ON BEHALF OF ASSESSEE SU BMITTED THAT THE ASSESSEE HAD SHARE IN IMMOVABLE PROPERTY SITUATED A T GAT NO.61, GAON MAUJE KATVAI, TAL. MAVAL, PUNE. THE ASSESSEE ALONG WITH OTH ER CO-OWNERS SOLD THE AFORESAID PROPERTY FOR A CONSIDERATION OF RS.51,00,0 00/-. THE ASSESSEE RECEIVED RS.3,00,000/- AS HER SHARE FROM THE SA ID PROPERTY. HOWEVER, THE ASSESSEE DID NOT DISCLOSE THE GAIN FROM SALE OF THE PROPERTY IN THE RETURN OF INCOME. THE ASSESSEE GAVE MONEY RECEIVED FROM SALE PROCEEDS OF THE PROPERTY TO ONE MR. DESHMUKH. THE ASSESSEE AFTER RECEIVING MONEY BACK FROM MR. DESHMUKH, INVESTED THE SAME FOR PURCHASE O F FLAT. THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT THE MONEY UTILIZED FOR PURCHASING FLAT IS THE SAME WHICH THE ASSESSEE HAS R ECEIVED AS HER SHARE FROM THE SALE OF PROPERTY IN GAT NO. 61. IN FACT, THE ASSES SEE IS ENTITLED TO CLAIM BENEFIT OF EXEMPTION U/S.54F IN RESPECT OF CAPITAL GAIN A RISING FROM SALE OF CAPITAL ASSET AS THE CONSIDERATION RECEIVED HAS BE EN INVESTED BY THE ASSESSEE FOR PURCHASING A RESIDENTIAL FLAT. THE LD. AR FURTHE R SUBMITTED THAT THE ASSESSING OFFICER HAS ERRED IN MAKING ADDITION ON ACCO UNT OF LONG TERM CAPITAL GAIN. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS A LSO ERRED IN MAKING ADDITION OF RS.3 LAKHS ON ACCOUNT OF UNEXPLAINED INVESTMENT. 5.1 IN RESPECT OF ADDITION OF RS.1,80,500/- ON ACCOUNT OF UN EXPLAINED CASH DEPOSITS IN BANK, THE LD. AR SUBMITTED THAT THE ASSESSEE HAS MADE CASH DEPOSITS ON ACCOUNT OF AGRICULTURAL INCOME. THE AUTHORITIES BELOW D ISBELIEVED 4 ITA NO. 533/PUN/2017 A.Y.2011-12 THE EXPLANATION FURNISHED BY THE ASSESSEE. THE ASSESSEE HAD FURNISHED THE COPIES OF 7/12 EXTRACT INDICATING THE LAND HOLDING OF THE AS SESSEE AND CULTIVATION OF SOYBEAN AND COTTON ON THE LAND. THE LD. AR R EFERRED TO THE COPIES OF 7/12 EXTRACTS PRODUCED BEFORE THE AUTHORITIES BELOW AT PAGE 33 TO 37 AD 39 TO 44 OF THE PAPER BOOK. 6. SHRI SUDHENDU DAS REPRESENTING THE DEPARTMENT VEHE MENTLY DEFENDING THE IMPUGNED ORDER SUBMITTED THAT THE ASSESSE E HAS FAILED TO SUBSTANTIATE THAT RS.3,00,000/- RECEIVED BY THE ASSESSEE FROM MR. DESHMUKH IS THE SAME AMOUNT WHICH HE HAS RECEIVED FROM SALE OF JOINT PROPERTY. THE ASSESSEE HAS NOT FURNISHED ANY CONFIRMATIO N FROM MR. DESHMUKH. 6.1 IN RESPECT OF ADDITION CONFIRMED BY THE COMMISSIONER O F INCOME TAX (APPEALS) ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE BA NK, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE CASH DEPOSITS ARE ON ACCOUN T OF AGRICULTURAL INCOME. NO DOCUMENT WHATSOEVER HAS BEEN FILED BY THE ASS ESSEE BEFORE THE AUTHORITIES BELOW TO SHOW THAT THE CASH DEPOSITS IN THE BANK ARE FROM AGRICULTURAL OPERATION. IN FACT, THE ASSESSEE IN ITS RETURN OF INCOME OFFERED ONLY RS.86,500/- ON ACCOUNT OF AGRICULTURAL INCOME. THE LD. D R PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE AND CONFIRMING THE FIND INGS OF THE COMMISSIONER OF INCOME TAX (APPEALS). 7. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERU SED. THE FIRST GROUND RAISED IN THE APPEAL IS IN RESPECT OF ADDITION OF RS .3,00,000/-. IT IS OBSERVED THAT THE ASSESSING OFFICER DURING SCRUTINY ASSES SMENT PROCEEDINGS MADE ADDITION OF RS.2,20,511/- ON ACCOUNT OF LONG TERM CAP ITAL GAINS. 5 ITA NO. 533/PUN/2017 A.Y.2011-12 HOWEVER, IN THE FIRST APPELLATE PROCEEDINGS, THE COMMISSIONE R OF INCOME TAX(APPEALS) DELETED THE ADDITION AND MADE OF RS.3,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT FOR PURCHASE OF RESIDENTIAL FLAT. THE CONTENTION OF THE ASSESSEE IS THAT RS.3,00,000/- IS THE SAME AMOUNT WH ICH THE ASSESSEE HAS RECEIVED AS HER SHARE IN CONSIDERATION FROM SALE OF C APITAL ASSET JOINTLY OWNED BY OTHER TWO PERSONS. THE LD. AR POINTED THAT AS SESSEE HAD GIVEN RS.3,93,000/- AS ADVANCE TO MR. DESHMUKH FROM HER BANK A CCOUNT DURING 2010-11 AND RECEIVED BACK RS.3,00,000/- IN CASH BEFORE 0 4.11.2011 FROM MR. DESHMUKH. IT IS AN UNDISPUTED FACT THAT APART FROM AG RICULTURAL INCOME AND SOME MISCELLANEOUS INCOME, THERE IS NO OTHER SOURCE O F INCOME OF THE ASSESSEE. ONCE HAVING ACCEPTED THAT THE ASSESSEE HAS RECEIVED RS.3,00,000/- AS HER SHARE FROM SALE OF CAPITAL ASSET, THE ONLY PRESUMPTION IS THAT THE ASSESSEE HAS INVESTED THE SAME AMOUNT FOR P URCHASING RESIDENTIAL FLAT. ADVANCING RS.3,00,000/- TO MR. DESHMUKH AND RECEIVING B ACK THE SAME AMOUNT IN CASH WOULD NOT RESULT IN GENERATING ANY OTHER SOURCE O F INCOME. DEHORS ABOVE FINDINGS, IT IS OBSERVED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS TAXED RS.3,00,000/- BY IDENTIFYING FRESH S OURCE OF INCOME. SUCH ADDITIONS BY THE COMMISSIONER OF INCOME TAX(APPEALS) A RE NOT PERMISSIBLE. IT IS A WELL SETTLED LAW THAT THE COMMISSIONER OF INCOME TAX(APPEALS) IN FIRST APPELLATE PROCEEDINGS CANNOT BRING INTO TAXNET ANY FRESH SOURCE OF INCOME. THEREFORE, IN MY CONSIDERED VIEW, THE ADDITION OF RS.3,00,000/-IS UNSUSTAINABLE AND HENCE, THE SAME IS DELETED . ACCORDINGLY, GROUND NO.1 RAISED IN APPEAL BY THE ASSESSEE IS ALL OWED. 8. IN GROUND NO. 2 OF THE APPEAL, THE ASSESSEE HAS ASSAILED THE ADDIT ION OF RS.1,80,500/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BA NK. IT IS OBSERVED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.4,36 ,500/- ON 6 ITA NO. 533/PUN/2017 A.Y.2011-12 ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN IDBI BANK ACCOU NT OF THE ASSESSEE. THE ASSESSEE SUCCESSFULLY DEMONSTRATED THE SOURCE OF D EPOSITS IN RESPECT OF PART DEPOSITS BEFORE THE COMMISSIONER OF INCOME TAX (APPE ALS). HENCE, THE COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE ADDITION TO RS.1,80,500/- AS UNEXPLAINED CASH DEPOSITS. THE LD. AR HAS S UBMITTED THAT THE SOURCE OF CASH DEPOSITS IS AGRICULTURAL INCOME. THE CO MMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER HAS RECORDED THAT IN RETURN OF INCOME, THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME OF R S.86,500/-. THE AUTHORITIES BELOW WHILE MAKING ADDITION HAS OBSERVED THAT T HE ASSESSEE HAS FAILED TO SUBSTANTIATE AGRICULTURAL INCOME. THE ASSESSEE HAS FILED PAPER BOOK INTERALIA CONTAINING COPIES OF BANK STATEMENT, 7/12 EXTRACT S ETC. THE LD. AR OF ASSESSEE HAS CERTIFIED THAT ALL THESE DOCUMENTS WERE SUBMITTED BEFORE THE LOWER AUTHORITIES. A PERUSAL OF THE 7/12 EXTRACT AT PAGE 39 AND 40 SHOWS THAT ASSESSEE HAS SOME SHARE IN AGRICULTURAL LAND WHERE IN SOYBEAN AND COTTON IS CULTIVATED. THUS, A PERUSAL OF THE REVENUE RECO RDS INDICATE THAT SOME LAND HOLDING EXISTS IN THE NAME OF ASSESSEE AND THE SAID LAND WAS UNDER CULTIVATION. THE AGRICULTURAL INCOME OFFERED BY THE ASSESSEE IN THE RETURN HAS GENESIS TO THE LAND HOLDING OF THE ASSESSEE A ND THE AGRICULTURAL OPERATIONS ON THE SAID LAND. THUS, GENERATION OF CASH CAN BE LINKED TO THE SALE OF AGRICULTURAL PROCEEDS. HENCE, I AM OF CONSIDERED VIEW THAT CASH DEPOSITS TO THE EXTENT OF AGRICULTURAL INCOME DISCLOSED BY ASSESSEE IN RETURN OF INCOME HAVE STANDS EXPLAINED. ACCORDINGLY, AFTER GIVING T HE BENEFIT OF AGRICULTURAL INCOME, I RESTRICT THE ADDITION TO RS.94,000/- ( UNEXPLAINED CASH DEPOSITS IN THE BANK RS.1,80,500/- - AGRICULTURAL INCOME DISC LOSED IN RETURN RS.86,500/-). ACCORDINGLY, GROUND NO. 2 RAISED IN THE APPEAL BY A SSESSEE IS PARTLY ALLOWED. 7 ITA NO. 533/PUN/2017 A.Y.2011-12 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D IN THE TERMS AFORESAID. ORDER PRONOUNCED ON FRIDAY, THE 28TH OF SEPTEMBER, 2018. SD/- ( /VIKAS AWASTHY) / JUDICIAL MEMBER / PUNE; ! ' / DATED : 28 TH SEPTEMBER, 2018. SB $%&'()'' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-6, PUNE. 4. THE PR. CIT-5, PUNE. 5. %&' () , * () , - +,- , / DR, ITAT, SMC BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // * 2 / BY ORDER, 3 (- /PRIVATE SECRETARY * () , / ITAT, PUNE.