Harish Kumar Baheti, Bhilwara V. ACIT, Circle, Bhilwara

ITA 56/JODH/2018

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9985 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S YADAV LD
• Assessee Lawyers: RAJENDRA JAIN LD ARS
• Keywords: Salary income; Cost of acquisition; Corroborative evidences; Capital Gains
• Section: 143(3); 133(6); 69A

Judgement Text

1 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.56/JODH/2018 ( / ASSESSMENT YEAR: 2014-15) HARISH KUMAR BAHETI C/O M/S. R.K. BHANDARI & ASSOCIATES (CA) CITY TOWER, GANDHI BAZAR BHILWARA, RAJASTHAN. / VS. A CIT CIRCLE BHILWARA RAJASTHAN ./ ./PAN/GIR NO. ADLPB-1795-K ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : MS. RAKSHA BIRLA (CA) & SHRI RAJENDRA JAIN (ADVOCATE) LD.ARS. REVENUE BY : SHRI A.S. YADAV- LD. SR.DR / DATE OF HEARING : 05/11/2020 / DATE OF PRONOUNCEMENT : 21/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX-(APPEALS), AJMER, [IN SHORT REFERRED TO AS CIT(A)], 2 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 APPEAL NO.408/2016-17 DATED 09/11/2017 ON FOLLOWING EFFECTIVE GROUNDS:- 1. THE A.O, WAS NOT JUSTIFIED IN MAKING ADDITIONS MADE ON ACCOUNT OF UNDISCLOSED CREDITS U/S 69A OF RS. 7,10,000/- WHICH IN FACT HAS BEEN DEPOSITED INTO SB A/C OUT OF SAVINGS OF THE ASSESSE E. 2. THE A.O. WAS NOT JUSTIFIED IN MAKING ADD ITIONS ON ACCOUNT OF DISALLOWANCE OF INVESTMENTS MADE FOR CONSTRUCTION O F BUILDING OF RS.23,49,833/- WHICH WERE BEING BORROWED FROM BANKS . 3. THE A.O. WAS NOT JUSTIFIED IN CONSIDERING THE IN VESTMENT MADE FOR PURCHASE OF RESIDENTIAL OF RS.30,00,000/- WHICH I N FACT NOT SHOWN IN ORIGINAL INCOME TAX RETURN BECAUSE THERE WAS LOSS IN THE HEA D LONG TERM CAPITAL GAIN. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING WRITTEN SUBMI SSIONS AND DOCUMENTS PLACED IN THE PAPER BOOK. THE JUDICIAL PR ECEDENTS AS RELIED UPON DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASS ESSED U/S 143(3) ON 24/11/2016 WHEREIN RETURNED INCOME OF RS. 18.87 LACS WAS ASSESSED AT RS.49.80 LACS AFTER CERTAIN ADDITIO NS / ADJUSTMENTS. THE ADDITIONS OF RS.23.49 LACS UNDER T HE HEAD CAPITAL GAINS AND ANOTHER ADDITION OF RS.7.10 BEING CASH DEPOSIT IN CERTAIN BANK ACCOUNT IS THE SUBJECT MATTER OF PRESENT APPEA L BEFORE US. THE FACTS LEADING TO THE ADDITIONS WERE AS FOLLOWS. 3.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT ASSESSEE SOLD CERTAIN RESIDENTIAL HOUSE FOR RS.65 LACS. AFTE R REDUCING INDEXED COST AS WELL AS INDEXED COST OF IMPROVEMENT , THE ASSESSEE ARRIVED AT LONG-TERM CAPITAL LOSS OF RS.7.42 LACS. THE DISPUTE IS 3 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 RELATED WITH QUANTUM OF COST OF IMPROVEMENT INCURRE D BY THE ASSESSEE STARTING FROM FINANCIAL YEARS (FY) 2001-02 TO 2012-13. AS PER ASSESSEES SUBMISSIONS, IT INCURRED PURCHASE & CONSTRUCTION COST IN THE FOLLOWING MANNER:- NO. PARTICULARS DATE AMOUNT (RS.) 1. PURCHASE & CONSTRUCTION 21/08/2001 RS.9 LACS 2. IMPROVEMENT 31/03/2003 RS.6.50 LACS 3. IMPROVEMENT 31/03/2005 RS.9 LACS 4. IMPROVEMENT 31/03/2007 RS.5 LACS 5. IMPROVEMENT 31/12/2011 RS.7.50 LACS 6. IMPROVEMENT 31/03/2013 RS.3 LACS TOTAL RS.40 LACS ACCORDINGLY, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF COST AND COST OF IMPROVEMENT. IN REPLY, IT WAS SUBMITTED THAT CONSTRUCTION WAS MADE ON THE PLOT FROM TIME TO TIME AS PER ASSESSEES FINANCIAL POSITION. THE SAME WAS STATED TO BE SOURCED FROM FINANCIAL INSTITUTIONS LIKE ICICI BANK LIMITED & LIC HOUSING FINANCE LTD. (LIC HFL). IN SUPPORT OF THE SAME, LOA N DISBURSEMENT CERTIFICATES ISSUED BY THE FINANCIAL INSTITUTIONS W ERE FURNISHED. 3.3 NOTICES U/S 133(6) WAS ISSUED TO BOTH THE LENDE RS FOR CONFIRMATION OF ACCOUNT. THE INFORMATION RECEIVED F ROM ICICI BANK LTD REVEALED THAT LOAN OF RS.5 LACS SANCTIONED IN F Y 2006-07 WAS PERSONAL LOAN WHEREAS LOAN OF RS.14.50 LACS TAKEN F ROM LIC HFL WAS HOME ENTITY LOAN WHICH COULD BE USED FOR OTHER PURPOSES LIKE CHILDREN EDUCATION / MARRIAGE / TRAVEL ETC. FURTHER , YEAR OF IMPROVEMENT DID NOT MATCH WITH THE DATE OF LOAN SAN CTIONED. ACCORDINGLY, THE ASSESSEE WAS SHOW-CAUSED AS TO WHY THE COST OF IMPROVEMENT BE NOT DENIED. 4 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 3.4 ALTHOUGH THE ASSESSEE REITERATED ITS STAND, HOW EVER, IT WAS NOTED THAT THE THOUGH PROPERTY WAS PURCHASED DURING FINANCIAL YEAR 2001-02 BUT THE LOAN WAS SANCTIONED ON 29/12/2002 W HICH WAS CLAIMED TO BE UTILIZED IN FY 2001-02. THE LEASE DEE D DATED 13/09/2002 SHOWED THAT THE LAND WAS PURCHASED IN FY 2002-03 AND THEREAFTER THE BUILDING WAS CONSTRUCTED. ACCORDINGL Y, THE PURCHASE DATE AND INITIAL CONSTRUCTION PERIOD SHOULD BE FY 2 002-03 AND NOT 2001-02 TO COMPUTE INDEXATION BENEFIT. 3.5 THE ASSESSEE CLAIMED COST OF IMPROVEMENT OF RS. 6.50 LACS IN FY 2002-03. HOWEVER, FROM THE DETAILS SUBMITTED REG ARDING SOURCE OF INVESTMENT, NO IMPROVEMENT WAS SHOWN TO HAVE BEE N DONE IN FY 2002-03 AND THEREFORE, THE SAID IMPROVEMENT WAS DIS ALLOWED. OUT OF LOAN OF RS.9 LACS SANCTIONED IN FY 2004-05, AN ADHOC DISALLOWANCE OF 10% WAS MADE SINCE THE ASSESSEE DID NOT GIVE DETAILS OF IMPROVEMENT AND ACTUAL EXPENSES INCURRED . THE COST OF IMPROVEMENT OF RS.5 LACS STATED TO BE I NCURRED IN FY 2006-07 WAS DISALLOWED SINCE THE LOAN OF ICICI BANK WAS A PERSONAL LOAN. OUT OF IMPROVEMENT OF RS.7.50 LACS STATED TO BE INC URRED IN FY 2011-12, AN ADHOC DISALLOWANCE OF 10% WAS MADE. FUR THER SINCE COST OF IMPROVEMENT WAS MADE DURING FY 2011-12 AND THE PROPERTY WAS SOLD ON 27/09/2013, BENEFIT OF INDEXATION WAS N OT TO BE ALLOWED. THE COST OF IMPROVEMENT OF RS.3 LACS WAS CLAIMED F OR FY 2012- 13. HOWEVER, DURING ASSESSMENT PROCEEDINGS, THE ASS ESSEE REVISED THE SAME TO RS.9.50 LACS WHICH WAS DENIED S INCE THE LOAN 5 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 OBTAINED FROM LIC HFL COULD BE USED FOR OTHER PURPO SES AND FURTHER THE LOAN AMOUNT OF RS.14.50 LACS DID NOT MA TCH WITH COST OF IMPROVEMENT OF RS.9.50 LACS IN NUTSHELL, THE COST OF ACQUISITION WAS WELL AS IM PROVEMENT WAS RESTRICTED IN ALL TO RS.23.85 LACS. THE SAME RESULT ED INTO LONG- TERM CAPITAL GAIN OF RS.23.49 LACS IN THE HANDS OF THE ASSESSEE. 3.6 ANOTHER ADDITION WAS ON ACCOUNT OF CASH DEPOSI T OF RS.13.50 LACS IN ONE OF THE SAVING ACCOUNT MAINTAINED BY THE ASSESSEE WITH AXIS BANK, BHILWARA. THE ASSESSEE SUBMITTED THAT TH E DEPOSITS WERE SOURCED OUT OF SALARY INCOME. VIDE ANOTHER SUB MISSION DATED 19/09/2016, THE ASSESSEE SUBMITTED THAT IT WITHDREW RS.28.55 LACS ON VARIOUS DATES AND ADVANCED THE SAME TO FRIENDS A ND RELATIVES AS WELL AS USED FOR PERSONAL PURPOSES. THE SUM SO ADVA NCED WAS DEPOSITED INTO THE BANK AS AND WHEN COLLECTED FROM THE PARTIES. HOWEVER, IN THE ABSENCE OF ANY SUPPORTING EVIDENCES THE SAID PLEA WAS REJECTED. 3.7 UPON PERUSAL OF BANK ACCOUNT, IT WAS NOTED THAT THERE WAS NO SUCH CASH WITHDRAWALS AS CLAIMED BY THE ASSESSEE. F URTHER, THE ASSESSEE HAD DEPOSITED A SUM OF RS.3.10 LACS IN APR IL 2013 FOR WHICH NO DETAILS WERE FURNISHED. FINALLY, AFTER COR RELATING THE CASH WITHDRAWALS AND DEPOSITS, LD. AO MADE AN ADDITION O F RS.7.10 LACS IN THE HANDS OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE ASSAILED BOTH THE ADDITI ONS BEFORE LD. CIT(A) BY WAY OF ELABORATE WRITTEN SUBMISSIONS, WHICH HAVE ALREADY BEEN EXTRACTED IN THE IMPUGNED ORDER. DRAWI NG ATTENTION TO THE LOANS TAKEN BY ASSESSEE, IT WAS SUBMITTED THAT LD. AO WAS NOT 6 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 JUSTIFIED IN IGNORING THE LOAN AVAILED AND UTILIZED FOR HOUSE CONSTRUCTION. HOWEVER, WITHOUT SPECIFICALLY DEALING WITH THE SAME, LD. CIT(A), AT PARA 4.3, CHOSE TO CONFIRM THE ACTIO N OF LD.AO IN DETERMINING CAPITAL GAINS OF RS.23.49 LACS. SIMILAR LY THE ADDITION OF RS.7.10 LACS WAS CONFIRMED IN A MECHANICAL MANNER W ITHOUT GOING INTO THE FACTUAL MATRIX OF THE CASE. THE ASSESSEE HAD RAISED ANOTHER GROUND BY CONTENDIN G THAT LD. AO ERRED IN NOT CONSIDERING THE INVESTMENT IN NEW RESI DENTIAL PROPERTY PURCHASED FOR RS.30 LACS STATED TO BE PURCHASED ON 22/01/2014. HOWEVER, THE SAME WAS REJECTED BY OBSERVING THAT TH E ASSESSEE DID NOT FURNISH ANY EVIDENCE TO SHOW THAT ANY SUCH CLAIM WAS MADE BEFORE LD. AO. AGGRIEVED AS AFORESAID, THE ASSESSEE IS UNDER APPEA L BEFORE US. 5. UPON CAREFUL PERUSAL OF FACTUAL MATRIX AS ENUMER ATED IN THE PRECEDING PARAGRAPHS, IT IS QUITE DISCERNIBLE THAT LD. AO RENDERED SPECIFIC FINDINGS AS TO WHY THE COST OF IMPROVEMENT INCURRED BY THE ASSESSEE OVER VARIOUS FINANCIAL YEARS WAS TO BE DIS ALLOWED. UPON FURTHER APPEAL, IT WAS INCUMBENT UPON LD. CIT(A) TO MEET OUT THE SPECIFIC OBJECTIONS RAISED BY THE ASSESSEE DURING A PPELLATE PROCEEDINGS AND DEAL WITH THE SAME. HOWEVER, WE FIN D THAT NO INDEPENDENT FINDINGS HAVE BEEN RENDERED BY FIRST AP PELLATE AUTHORITY ON ANY OF THE ISSUE AND HE HAS MERELY CHO SEN TO CONFIRM THE STAND OF LD. AO. FURTHER, NO FACTS HAVE BEEN RE NDERED BY ANY OF THE LOWER AUTHORITIES WITH RESPECT TO BENEFIT ARISI NG OUT OF FRESH INVESTMENT IN NEW RESIDENTIAL PROPERTY FOR RS.30 LA CS STATED TO BE MADE BY THE ASSESSEE ON 22/01/2014. 7 ITA NO.56/JODH/2018 SHRI HARISH KUMAR BAHETI ASSESSMENT YEAR: 2014-15 THEREFORE, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, WE DEEM IT FIT TO RESTORE ALL THE ISSUES BACK TO THE FILE OF L D. CIT(A) FOR DE-NOVO ADJUDICATION. THE LD. CIT(A) IS DIRECTED TO RECONSI DER THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ADDITIONS SO MAD E AND DEAL WITH THE ISSUES BY WAY OF SPEAKING ORDER. 6. THE APPEAL STANDS ALLOWED FOR STATISTICAL PURPOS ES. ORDER PRONOUNCED U/R 34(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SANDEEP GOSAIN) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/12/2020 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &'#( ) , ) , / DR, ITAT, JODHPUR 6. '+,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, JODHPUR.