Shri Chatru Lal Soni S/o Sh. Govind Ram Soni, JODHPUR V. ITO, JODHPUR

ITA 536/JODH/2009

• Counselvise Citation: 53623314 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 18-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: U C JAIN
• Keywords: Capital asset; Income from undisclosed sources; Retraction
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ JODHPUR BENCH, JODHPUR ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RAN JAN, AM I. T. APPEAL NO. 536 (JODH.) OF 2009. ASSESSMENT YEAR : 200102. SHRI CHATRU LAL SONI, THE INCOME-TAX O FFICER, S/O. SHRI GOVIND RAM SONI, VS. W A R D : 2 (1), NEAR PARAMSUKH JI KA KUWA, J O D H P U R . CINEMA ROAD, PHALODI, DISTT. JODHPUR. P A N / G I R NO. AMU PS 5258 C. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI U. C. JAIN, A. R.; DEPARTMENT BY : SHRI G. R. KOKANI, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YE AR 2001-02 ARISES OUT OF THE ORDER OF THE LD. CIT (APPEALS), JODHPUR. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT (APPEALS) HAS ERRED IN:- I) SUSTAINING ADDITION OF RS.5,00,000/- MADE BY THE LD . AO IN THE TOTAL INCOME IN TOTAL DISREGARD TO THE FACT THAT ASSESSEE HAS NOT EARNED ANY SUCH INCOME NOR THERE IS ANY EVIDENCE WITH THE DEPARTMEN T THAT ASSESSEE HAS DERIVED SUCH INCOME DURING THIS YEAR; 2 I. T. APPEAL NO. 536 (JODH.) OF 2009. II) NOT ISSUING APPROPRIATE DIRECTIONS FOR LEVY OF INTE REST UNDER SECTION 234-B IN ACCORDANCE WITH PROVISION OF SUB-SEC. (3) OF THE SAID SECTION. 3. THE FIRST ISSUE FOR CONSIDERATION RELATES TO SUS TAINING THE ADDITION OF RS.5,00,000/- ON ACCOUNT OF SURRENDER MADE DURING THE COURSE OF SURV EY. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT SURVEY UNDER SECTION 133-A OF THE ACT WAS COND UCTED ON 14/12/2000 DURING WHICH SURRENDER OF RS.5,00,000/- WAS MADE AS UNACCOUNTED INCOME ON ACCOUNT OF LAND TRANSACTIONS WHICH WAS ADMITTED IN HIS STATEMENT DATED 14/12/2000. THE AS SESSMENT WAS ORIGINALLY COMPLETED ON 16/03/2005 AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT (APPEALS) WHO DELETED THE ADDITION OF RS.5,00,000/-. ON FURTHER APPEAL, ITAT SET ASIDE THE MATTER TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE ISSUE AFRESH. ITAT WH ILE SETTING ASIDE THE MATTER TO THE FILE TO AO, DIRECTED THAT IF THE ASSESSEE CONCLUSIVELY PROVED H IS CASE OF RETRACTION FROM SURRENDER MADE AT THE TIME OF SURVEY WITH CLINCHING EVIDENCE, HE WILL GET THE BENEFIT BY DELETION OF ADDITION. IF, HOWEVER, NON-COOPERATIVE ATTITUDE IS ADOPTED DURING FRESH PROCEEDINGS OR ASSESSEES CASE IS NOT FULLY PROVED, THE SURRENDERED AMOUNT WOULD BECOME T AXABLE. 4. DURING THE COURSE OF SET ASIDE ASSESSMENT PROCEE DINGS THE ASSESSING OFFICER ISSUED SEVERAL NOTICES. HOWEVER, THE ASSESSEE COULD NOT P RODUCE EVIDENCE TO SUPPORT HIS RETRACTION OF SURRENDER. IT WAS SUBMITTED BY THE ASSESSEE THAT D URING THE YEAR UNDER CONSIDERATION ONLY ONE PLOT OF RS.28,000/- WAS SOLD. THE ASSESSEE HAD EARNED ONLY COMMISSION INCOME DURING THE YEAR UNDER CONSIDERATION. AS REGARDS PRODUCTIO N OF BOOKS OF ACCOUNTS, IT WAS STATED THAT SINCE THE ASSESSEE HAD NOT MAINTAINED BOOKS OF ACCO UNTS, THE SAME COULD NOT BE PRODUCED. SINCE THE ASSESSEE COULD NOT PRODUCE ANY CLINCHING EVIDEN CE TO SUPPORT THE RETRACTION OF THE SURRENDER OF RS.5,00,000/-, THE ASSESSING OFFICER ADDED THE A MOUNT OF RS.5,00,000/- TOWARDS PURCHASE, SALE, DEVELOPMENT AND TRANSFER OF LAND. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED THAT THE ASSESSEE WAS ENGAGED IN THIS BUSINESS SINCE 1991 AN D FROM THIS SOURCE, INCOME OF RS.5,00,000/- APPROXIMATELY WAS EARNED. THE SURVEY TEAM GOT SURR ENDER OF THIS AMOUNT IN ONE YEAR. THE ASSESSEE PLACED RELIANCE ON THE LETTER ADDRESSED TO THE ASSESSING OFFICER, WARD : 5, JODHPUR WHICH WAS SUBMITTED ON 26/12/2000. IN RETRACTION L ETTER IT WAS ALSO SUBMITTED BY THE ASSESSEE 3 I. T. APPEAL NO. 536 (JODH.) OF 2009. THAT AT THE TIME OF RECORDING OF STATEMENT, THE ASS ESSEE WAS ADVISED THAT HE SHOULD SURRENDER THE WHOLE INCOME EARNED BY HIM AND PAY TAX THEREON AND IN THIS WAY HIS ENTIRE CAPITAL WOULD BECOME WHITE CAPITAL. THE ASSESSEE ACCORDINGLY ACT ED ON THE ADVICE OF OTHERS AND MADE SURRENDER OF RS.5,00,000/-. THIS CONTENTION OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT RETRACTION LETTER DATED 26/12/20 00 WAS SIGNED BY ONE, CHATURBHUJ SONI WHEREAS ASSESSEES NAME IS CHATRU LAL SONI. IT WA S ALSO OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE SURRENDERED THE AMOUNT VOLUNTARILY AND THERE WAS NO MENTION OF ANY PERSON WHO HAD GIVEN SUCH ADVICE AND THE CIRCUMSTANCES WHICH C OMPELLED THE ASSESSEE TO ACT AS PER SUCH ADVICE TO THE DETRIMENT OF HIS INTEREST. THE LD. CIT (APPEALS), HOWEVER, NOTED THAT THE ASSESSEE IN ANSWER TO QUESTION NO. 14 HAD SURRENDER ED THE AMOUNT OF RS 5,00,000/- WHICH IS INCLUDED IN TOTAL SURRENDER OF RS.8,02,100/- MADE V OLUNTARILY FOR FINANCIAL YEAR 2000-01. THE LD. CIT (APPEALS) FURTHER NOTED THAT ALTHOUGH IN HI S WRITTEN SUBMISSIONS DATED 3 RD MARCH, 2009 THE ASSESSEE HAD STATED THAT THAT AMOUNT OF INCOME WAS EARNED SINCE 1991 BUT COULD NOT PRODUCE ANY MATERIAL IN SUPPORT OF SUCH CONTENTION THAT INCOME OF RS.5,00,000/- WAS EARNED SINCE 1991. NO EVIDENCE OR MATERIAL WHATSOEVER COU LD BE FURNISHED TO ESTABLISH THAT THE STATEMENT MADE BY HIM ON 14/12/2000 DISCLOSING THE SUM OF RS.5,00,000/- AS UNACCOUNTED INCOME FOR ASSESSMENT YEAR 2000-01 WAS GIVEN UNDER MISCONCEPTION OR DURESS. THERE WAS NO MATERIAL ON RECORD TO ESTABLISH THAT THE STATEMENT DATED 14/12/2000 WAS NOT CREDIBLE FOR THE REASON THAT IT WAS NOT VOLUNTARILY GIVEN BY THE ASS ESSEE OR THE ASSESSEE WAS NOT IN PROPER SENSE TO STATE THE CORRECT FACTS. THE LD. CIT (APP EALS), THEREFORE, UPHELD THE ADDITION OF RS.5,00,000/- AS UNACCOUNTED INCOME FOR FINANCIAL Y EAR 2000-01 RELEVANT TO ASSESSMENT YEAR 2001-02. THE LD. CIT (APPEALS) FURTHER NOTED THAT THE ASSESSEE HAD ADOPTED A NON-COOPERATIVE ATTITUDE AS WAS APPARENT FROM THE DETAILS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ASSESSEE DESPITE ADEQUATE OPPORTUNITY G IVEN HAD NOT BEEN ABLE TO PROVE FULLY HIS CASE THAT SURRENDERED AMOUNT WAS NOT HIS UNACCOUNTED INC OME FOR THE CURRENT YEAR AS THE ASSESSEE HAD NOT BEEN ABLE TO REBUT THE IMPLICATION OF IKRAR NAMA THAT IT WAS NECESSARY FOR THE ASSESSEE TO ACQUIRE UNSOLD LAND FROM 1/04/2000. THE LD. CIT (APPEALS), THEREFORE, AS PER THE DIRECTION OF THE ITAT, HELD THAT SURRENDERED AMOUNT WAS TAXABLE. 4 I. T. APPEAL NO. 536 (JODH.) OF 2009. 5. BEFORE US IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT THE ASSESSEE PRIOR TO THE DATE OF SURVEY WAS NOT ASSESSED TO TAX. SURVEY UNDER SE CTION 133-A WAS CONDUCTED ON 14/12/2000. DURING THE COURSE OF SURVEY IT WAS STATED IN STATEM ENT RECORDED UNDER OATH THAT THE ASSESSEE PURCHASED 30 BIGHAS OF LAND UNDER POWER OF ATTORNEY . THE LAND WAS DEVELOPED AND WAS SOLD IN PLOTS. IT WAS ALSO STATED THAT HE HAD NOT KEPT ANY ACCOUNT FOR THE INCOME EARNED FROM PURCHASE, SALE AND DEVELOPMENT OF THE LAND. APART FROM INCOME FROM PURCHASE AND SALE OF PLOTS, THE ASSESSEE ALSO EARNED INCOME FROM GOLD-SMITH BUSINES S. IN RESPONSE TO QUESTION NO. 14 THE ASSESSEE SURRENDERED RS.5,00,000/- TOWARDS PURCHASE AND SALE OF PLOTS. IT WAS SUBMITTED BY THE ASSESSEE THAT DURING THE YEAR ONLY ONE PLOT WAS SOL D. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT FROM THE DETAILS OBTAINED BY THE AO FROM DY. REGISTRAR, PHALAUDI, IT IS CLEAR THAT THE ASSESSEE HAD SOLD LAND IN FINANCIAL YEARS 1995- 96, 1996-97, 1997-98, 1998-99 AND 2000-01 AND ONLY ONE PLOT WAS SOLD DURING THE YEAR UNDER CO NSIDERATION. THEREFORE, ENTIRE AMOUNT OF RS.5,00,000/- COULD NOT BE ASSESSED IN ONE YEAR. I T WAS ALSO SUBMITTED THAT THE ASSESSEE HAS OFFERED NET INCOME FROM COMMISSION ON SALE OF PLOTS IN ASSESSMENT YEAR 1996-97 TO 2000-01 TOTALING TO RS.2,93,161/-. THEREFORE, SURRENDER MA DE BY THE ASSESSEE, UNDER ADVICE OF OTHERS, COULD NOT BE TREATED AS VOLUNTARY SURRENDER AS THE SAME IS NOT SUPPORTED WITH THE EVIDENCE OF HAVING EARNED INCOME IN ONE YEAR. ON THE OTHER HAN D, THE LD. SR. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE ORDER OF THE LD. C IT (APPEALS). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE WAS ENGAGED IN REAL ESTATE BUSINESS BY PURCHASE OF LAND AND CONVERTING THE SAME INTO PLOTS. THE AO RE CEIVED REPORT FROM THE DY. REGISTRAR, PHALAUDI. AS PER THE LIST, SHRI CHATRU LAL SONI, T HE ASSESSEE SOLD LAND IN FINANCIAL YEAR 1995-96 TO FINANCIAL YEAR 2000-01 TO VARIOUS PARTIES. WE H AVE ALSO GONE THROUGH THE COPIES OF IKRARNAMA AND POWER OF ATTORNEY AUTHORIZING THE ASSESSEE FOR DEVELOPMENT OF THE PLOT OF LAND MEASURING 16,883.12 SQ. MTS. AND SELLING THEM BY WAY OF PLOTS . WE ALSO FIND THAT THE ASSESSEE WILL RETAIN 15 PER CENT OF THE AMOUNT AS HIS COMMISSION AND BALANC E 85 PER CENT WAS TO BE GIVEN TO THE PARTIES FROM WHOM LAND WAS TAKEN UNDER POWER OF ATTORNEY. FROM THESE FACTS IT IS EVIDENT THAT THE ASSESSEE HAS EARNED 15 PER CENT COMMISSION ON PLOTS SOLD BY HIM DURING ASSESSMENT YEAR 1996- 97 TO 2001-02. THEREFORE, IT IS NOT A CASE WHERE I NCOME HAS BEEN EARNED IN ONE YEAR I.E. 5 I. T. APPEAL NO. 536 (JODH.) OF 2009. ASSESSMENT YEAR 2001-02. THE ASSESSEE HAD ADMITTED INCOME FROM COMMISSION ON SALE OF PLOTS IN VARIOUS YEARS AMOUNTING TO RS.2,93,161/-. THERE FORE, THE SURRENDER MADE BY THE ASSESSEE IN ONE YEAR IS NOT BASED ON THE FACTS OR DOCUMENTS WHI CH CAME IN THE POSSESSION OF THE DEPARTMENT DURING THE COURSE OF SURVEY. THE ASSESSEE APPEARS TO HAVE SURRENDERED THE AMOUNT OF RS.5,00,000/- IN ONE YEAR AS ADVISED BY SOME PERSON . WHEN THE ASSESSEE HAD ADMITTED INCOME FROM PURCHASE AND SALE OF PLOTS ON COMMISSION BASIS , NO ADDITION CAN BE MADE IN ABSENCE OF ANY CORROBORATIVE EVIDENCE MERELY ON THE BASIS OF STATE MENT WHICH HAS BEEN SUBSEQUENTLY RETRACTED BY THE ASSESSEE. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAD NOT DISCLOSED CORRECT COMMISSION INCOME IN RELEVANT ASSESSMENT YEARS. TH E STATEMENT RECORDED ON OATH UNDER SECTION 131 CANNOT BE EQUATED WITH THE STATEMENT RECORDED U NDER SECTION 132(4) OF THE ACT. EVEN IN CASE OF STATEMENT RECORDED UNDER SECTION 132(4) THE PRES UMPTION IS A REBUTTABLE PRESUMPTION PROVIDED THE ASSESSEE FURNISHES EVIDENCE TO THAT EFFECT. SI NCE THE ASSESSEE HAD ADMITTED INCOME FROM PURCHASE AND SALE OF PLOTS ON COMMISSION BASIS IN A SSESSMENT YEAR 1996-97 TO 2000-01 BASED ON POWER OF ATTORNEY OBTAINED BY HIM FROM LAND OWNERS AND NO MATERIAL WAS FOUND DURING THE COURSE OF SURVEY OR SUBSEQUENTLY SUGGESTING THAT TH E INCOME OF RS. 5,00,000/- WAS EARNED DURING THE YEAR UNDER CONSIDERATION, NO ADDITION CAN BE MA DE IN ASSESSMENT YEAR 2001-02 PARTICULARLY WHEN THE ASSESSEE HAD SOLD ONLY ONE PLOT IN THE YEA R UNDER CONSIDERATION. THEREFORE, IN OUR CONSIDERED OPINION, THE LD. CIT (A) WAS NOT JUSTIFI ED TO UPHOLD THE ADDITION OF RS.5, 00,000/- ON ACCOUNT OF SURRENDER MADE BY THE ASSESSEE. 7. THE NEXT ISSUE FOR CONSIDERATION RELATES TO CHAR GING OF INTEREST UNDER SECTION 234-B OF THE ACT. IT HAS BEEN SUBMITTED THAT THE LD. CIT (APPEA LS) HAS ERRED IN NOT ISSUING APPROPRIATE DIRECTIONS FOR LEVY OF INTEREST UNDER SECTION 234-B IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234-B(3) OF THE ACT. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS SETTLED LAW IN VIEW OF THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF ANJUM M. H. GHASWALA 252 ITR 1 THAT CHARGING OF INTEREST UNDER SECTION 234-B OF THE ACT IS MANDATORY. THEREFORE, INTEREST UNDER SECTION 234-B HAS TO BE C HARGED. THE AO IS, THEREFORE, DIRECTED TO 6 I. T. APPEAL NO. 536 (JODH.) OF 2009. CHARGE INTEREST UNDER SECTION 234-B AFTER GIVING EF FECT TO THE ORDER OF THE LD. CIT (A) AS WELL AS THE ORDER OF THE ITAT. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 26 TH AUGUST, 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER AT NEW DELHI . DATED : 26 TH AUGUST, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.