VIVEK VENUGOPAL, CHENNAI V. ASST CIT CEN CIR 13, MUMBAI

ITA 5432/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3193 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 23-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S SENT H IL KUMARAN
• Assessee Lawyers: M SUBRAMANIAN
• Section: 143(3); 54F; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 5432/MUM/2012 (ASSESSMENT YEAR : 2009-10) MR.VIVEK VENUGOPAL, NBLOCK, 15 TH MAIN ROAD, ANNA NAGAR, CHENNAI 600040 PAN:AEBT3112P ... APPELLANT VS. THE ACIT, CEN. CIR.13, PRATHISHTHA BHAVAN, OLD CGO BLDG., MK ROAD, MUMBAI 400 020 .... RESPONDENT APPELLANT BY : SHRI M. SUBRAMANIAN RESPONDENT BY : SHRI S. SENTHIL KUMARAN DATE OF HEARING : 07/06/2016 DATE OF PRONOUNCEMENT : 15/06/2016 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST AN OR DER PASSED BY CIT(A)-37, MUMBAI DATED 27/06/2012, WHICH IN TURN A RISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 20 /12/2011. 2 ITA NO. 5432/MUM/2012 (ASSESSMENT YEAR : 2009-10) 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWI NG TWO GROUNDS OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(A)-37, MUMBAI [CIT(A)]- 1. ERRED IN RESTRICTING THE RELIEF U/S.54F TO THE EXTE ND OF RS.25,00,000/- AS AGAINST CLAIMED BY THE ASSESSEE O F RS.28,85,426/-. 2. ERRED IN CONFIRMING THE ADDITION OF RS.12,51,000/- ON ACCOUNT OF DEPOSIT OF CASH IN BANK U/S 88 OF THE I.T. ACT, 196 1. 3. THE APPELLANT BEFORE US IS AN INDIVIDUAL WHO WAS SUBJECT TO A SURVEY ACTION UNDER SECTION133A OF THE ACT ON 23/04 /2010. IN THE ASSESSMENT FINALIZED UNDER SECTION 143(3) OF THE AC T DATED 20/12/2011, ASSESSEE WAS FOUND TO HAVE EARNED A LONG TERM CAPI TAL GAIN OF RS.1,32,77,264/- ON ACCOUNT OF SALE OF SHARES OF M/ S. HASCO INFRASTRURE LIMITED. THE ASSESSEE HAD CLAIMED EXEMPTION UNDER SECTION 54F OF THE ACT AGAINST SUCH LONG TERM CAPITAL GAIN ON ACCOUNT OF ACQUISITION OF A RESIDENTIAL HOUSE. IN THE RETURN OF INCOME, SUCH E XEMPTION WAS CLAIMED AT RS.32,86,123/-, WHICH WAS DENIED TO THE ASSESSEE ON THE GROUND THAT WHAT WAS PURCHASED BY THE ASSESSEE WAS NOT A RESID ENTIAL HOUSE BUT LAND. THE CIT(APPEALS) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE, INASMUCH AS, ACCORDING TO HIM ASSESSEE IS ENTITLED TO THE CLAIM OF EXEMPTION UNDER SECTION 54F AS ASSESSEE HAD INDEE D PURCHASED A HOUSE ALONGWITH A PIECE OF LAND APPURTENANT THERET O. SO HOWEVER, THE AFORESAID DECISION OF THE CIT(APPEALS) IS NOT IN D ISPUTE BEFORE US. THE ISSUE CHALLENGED BY THE ASSESSEE BEFORE US IS THAT THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT HAS BEEN AL LOWED BY THE CIT(APPEALS) TO THE EXTENT OF RS.25.00 LACS ONLY, WHEREAS AS PER THE APPELLANT THE ENTITLED CLAIM IS TO THE EXTENT OF RS.28,85,426/-. 3 ITA NO. 5432/MUM/2012 (ASSESSMENT YEAR : 2009-10) 4. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE ASSESSEE EXPLAINED THAT THE TOTAL CONSIDERATION PAID TO THE SELLER FOR ACQUISITION OF THE PROPERTY WAS RS.25.00 LACS AND FURTHER ASSES SEE HAD INCURRED AN EXPENDITURE OF RS.3,97,611/- BY WAY OF STAMP DUTY AND REGISTRATION, THEREBY RESULTING IN A TOTAL COST OF RS.28,97,611/- . ON THIS BASIS, IT IS SOUGHT TO BE POINTED OUT THAT THE CLAIM OF EXEMPTIO N UNDER SECTION 54F OF THE ACT WOULD WORK OUT TO RS.28,85,426/-, WHERE AS THE CIT(APPEALS) HAS ALLOWED THE CLAIM ONLY TO THE EXTENT OF RS.25. 00 LACS, WHICH IS THE AMOUNT OF BASIC CONSIDERATION PAID TO THE SELLER. THE CLAIM SET UP BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IS THAT THE CIT(APPEALS) HAS NOTICED THAT BEFORE THE ASSESSING OFFICER ASSESSEE HAS MADE A REVISED CLAIM OF RS.25.00 LACS, AND THUS HE ALLOWED THE CLAIM TO THAT EXTENT. 5. HAVING CONSIDERED THE RIVAL STANDS, WE FIND THAT IN THE PRESENT CASE, THE NEW RESIDENTIAL HOUSE ENTITLED FOR EXE MPTION UNDER SECTION 54F HAS BEEN PURCHASED BY THE ASSESSEE FOR RS.25.00 LACS AS EVIDENCED BY THE DEED OF REGISTRATION, A COPY OF WHICH HAS BE EN PLACED ON OUR RECORD. BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAS CONSISTENTLY EXPLAINED THAT IT HAS INCURRED A FURTHER EXPENDITUR E OF RS.3,97,611/- BY WAY OF STAMP DUTY AND REGISTRATION CHARGES, WHICH IS NOT DISPUTED. IN THIS VIEW OF THE MATTER, IT WAS INCUMBENT UPON THE CIT(APPEALS) TO ALLOW APPROPRIATE AMOUNT OF EXEMPTION AFTER CONSIDE RING THE COST OF NEW RESIDENTIAL HOUSE, WHICH IS REQUIRED TO BE CALC ULATED BY INCLUDING THE COST INCURRED BY WAY OF STAMP DUTY AND REGISTR ATION CHARGES ALSO. THEREFORE, THE CALCULATION OF EXEMPTION UNDER SECTI ON 54F MADE BY THE ASSESSEE, AND WHICH HAS BEEN DETAILED BY THE CIT(AP PEALS) IN PARA 2.6.3 4 ITA NO. 5432/MUM/2012 (ASSESSMENT YEAR : 2009-10) OF HIS ORDER, AMOUNTING TO RS.28,85,426/- IS IN ORD ER. ACCORDINGLY, WE SET-ASIDE THE ORDER OF CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 54F OF RS.28,85,426/- INSTEAD OF RS.25.00 LACS ALLOWED BY THE CIT(APPEALS). THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 6. THE OTHER ISSUE RAISED IN THIS APPEAL IS AN ADDI TION OF RS.12,51,000/- MADE BY THE LOWER AUTHORITIES BY INV OKING THE PROVISIONS OF SECTION 68 OF THE ACT. IN BRIEF, THE RELEVANT F ACTS ARE THAT ASSESSEE WAS FOUND TO HAVE MADE CASH DEPOSITS IN THE BANK AC COUNT ON VARIOUS DATES DURING THE YEAR WITH KOTAK MAHINDRA BANK LTD. , TOTALLING TO RS.12,51,000/-. THE FAILURE OF THE ASSESSEE TO EX PLAIN THE SOURCE OF DEPOSITS PREVAILED WITH THE ASSESSING OFFICER TO TR EAT THE SAME AS UNEXPLAINED CASH-CREDIT WITHIN THE MEANING OF SECTI ON 68 OF THE ACT. HOWEVER, BEFORE THE CIT(APPEALS) ASSESSEE SOUGHT TO CANVASS THAT HE HAD WITHDRAWN CASH FROM KOTAK MAHINDRA BANK LTD. AN D DBS BANK TO THE EXTENT OF RS.12,50,000/- AND RS. 4,77,000/- RE SPECTIVELY, WHICH WAS MORE THAN ADEQUATE TO COVER THE DEPOSITS MADE IN TH E BANK ACCOUNT DURING THE YEAR. THE AFORESAID EXPLANATION WAS NOT ACCEPTED BY THE CIT(APPEALS) IN TERMS OF THE DISCUSSION CONTAINED I N PARA 2.7.1 OF HIS ORDER. AS PER THE CIT(APPEALS) ASSESSEE COULD NOT FURNISH THE CO- RELATION BETWEEN THE WITHDRAWALS MADE FROM TIME TO TIME AND THE DEPOSITS THEREOF. IN THIS MANNER, AN ADDITION OF RS.12,51,000/- UNDER SECTION 68 OF THE ACT HAS BEEN SUSTAINED. 7. BEFORE US, LD. REPRESENTATIVE FOR THE ASSESSEE V EHEMENTLY POINTED OUT THAT ASSESSEE HAD FURNISHED A STATEMENT OF CASH DEPOSITS AND WITHDRAWALS, COPY OF WHICH HAS BEEN PLACED IN T HE PAPER BOOK AT 5 ITA NO. 5432/MUM/2012 (ASSESSMENT YEAR : 2009-10) PAGES 35-36, IN TERMS OF WHICH CASH WITHDRAWALS WER E TO THE TUNE OF RS.15,20,000/-, WHICH WAS ADEQUATE TO MEET THE DEPO SITS OF RS.12,51,000/-. FURTHER, HE HAS ALSO REFERRED TO THE FACT THAT ASSESSEE HAD PLEADED BEFORE THE LOWER AUTHORITIES THAT ASSES SEE HAD RECEIVED A SUM OF RS.4.00 LACS IN CASH FROM ONE MR. HAMEED, WH ICH WAS ALSO UTILIZED FOR THE DEPOSITS AND A CONFIRMATION FROM T HE SAID PERSON HAS ALSO BEEN PLACED IN THE PAPER BOOK AT PAGE 59. LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE AFORESAID MATERIA L SUPPORTS THE EXPLANATION FURNISHED BY THE ASSESSEE AND IN ANY CA SE, PRESENTLY ASSESSEE WAS WILLING TO APPEAR BEFORE THE ASSESSING OFFICER AGAIN AND PROVIDE THE DETAILS OF CO-RELATION BETWEEN THE WITH DRAWALS AND SUBSEQUENT DEPOSITS. 8. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE FOR THE REVENUE REITERATED THE STAND OF THE LOWER AUTHORITI ES, WHICH WE HAVE ALREADY ADVERTED TO IN THE EARLIER PART OF THE ORDE R AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 9. HAVING CONSIDERED THE RIVAL SUBMISSION, IN OUR V IEW, FROM A PRIMA-FACIE APPRAISAL OF THE EXPLANATION FURNISHED BY THE ASSESSEE, COPIES OF WHICH ARE PLACED IN THE PAPER BOOK AT PAG ES 35-36 AND 59, IT IS EVIDENT THAT THE ENTIRE AMOUNT OF CASH DEPOSIT MADE IN THE BANK ACCOUNT AMOUNTING TO RS.12,51,000/- CANNOT BE CONSI DERED AS UNEXPLAINED. THE EXPLANATION FURNISHED BY THE ASSE SSEE HAS BEEN MECHANICALLY BRUSH-ASIDE BY THE LOWER AUTHORITIES W ITHOUT EXAMINING THE SAME APPROPRIATELY. THE DETAILS FURNISHED BY T HE ASSESSEE, NAMELY DATE-WISE CASH DEPOSITS AND CASH WITHDRAWALS AS WEL L AS CONFIRMATION FROM MR. HAMEED REQUIRES TO BE EXAMINED IN SOME DET AIL AND, 6 ITA NO. 5432/MUM/2012 (ASSESSMENT YEAR : 2009-10) THEREFORE, WE ARE INCLINED TO UPHOLD THE PLEA OF TH E ASSESSEE THAT THE MATTER BE REMANDED BACK TO THE FILE OF ASSESSING OF FICER FOR AN APPRAISAL AFRESH. THE ASSESSEE SHALL SATISFY THE A SSESSING OFFICER THE SOURCE OF THE CASH DEPOSITS IN THE BANK ACCOUNT ON THE BASIS OF APPROPRIATE MATERIAL AND THE ASSESSING OFFICER SHAL L CONSIDER THE EXPLANATION FURNISHED BY THE ASSESSEE IN ACCORDANCE WITH LAW. THUS, WE SET-ASIDE THE ORDER OF THE CIT(APPEALS) AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE AFRESH AS P ER LAW. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/06/2016 SD/- SD/- (SANJAY GARG) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 15/06/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI