Shri Hareshkumar Govindbhai Patel, Unjha V. The Income tax Officer,Ward-2, Patan

ITA 567/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72969 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 04-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PPE
• Section: 143(3); 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, A HMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 567 /AHD/2013 (ASSESSMENT YEAR: 2008-09) HARESHKUMAR GOVINDBHAI PATEL, PROP. MEMAGANBHAI MOTIRAM SONS, BAHAR MADH, KASHI NAGAR, UNJHA. V/S THE INCOME TAX OFFICER, WARD-2, PATAN. (APPELLANT) (RESPONDENT) PAN: ABYPP8824E. APPELLANT BY : NONE RESPONDENT BY : SHRI K.C. MATHEWS, SR. D.R. ( )/ ORDER DATE OF HEARING : 04-02-2014 DATE OF PRONOUNCEMENT : 14 -02-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), GANDINAGAR, AHMEDABAD DATED 27.12.2012 FOR A.Y. 2008-09. 2. IN THIS CASE ON DATE OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS MOVED ON BEHALF OF ASSE SSEE. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA ASSES SEE ON MERITS. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. ITA NO 567/A HD/2013 . A.Y. 2008 - 09 2 4. ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINES S OF TRADING IN CLOTHS. ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2008-09 ON 28.09.2008 DECLARING TOTAL INCOME OF RS. 3,07,360/- THE CASE WAS SELECTE D FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 24.12.2010 AND THE TOTAL INCOME WAS DETERMINED AT R S. 10,43,750/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 27.12.2012 DISMISSED THE AP PEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS N OW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING TWO EFFECTIVE GROUND:- 1. BOTH, THE LD. A.O. AND THE CIT(A) HAVE GRIEVOUSL Y ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN MAKING AND C ONFIRMING THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF IM MOVABLE PROPERTY OF RS. 7,16,394/- BEING 1/4 TH SHARE OF THE APPELLANT. 2. BOTH, THE LD. A.O. AND THE CIT(A) HAVE GRIEVOUSLY E RRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN MAKING AND C ONFIRMING THE LUMP SUM ADDITION OF RS. 20,000/- ON ACCOUNT OF LOW HOUS EHOLD WITHDRAWAL. 1 ST GROUND IS WITH RESPECT TO CONFIRMING THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF IMMOVA BLE PROPERTY. 5. ON THE BASIS OF AIR INFORMATION, A.O. NOTED THAT ASSESSEE HAD RECEIVED SALE CONSIDERATION OF RS. 47,70,000/- ON SALE OF IMMOVAB LE PROPERTY. ASSESSEE HAD NOT SHOWN CAPITAL GAIN ARISING FROM IT IN THE R ETURN OF INCOME. THE ASSESSEE WAS THEREFORE ASKED TO FURNISH THE DETAILS . ASSESSEE INTERALIA SUBMITTED THAT HIS SHARE OF CAPITAL GAIN WAS FULLY INVESTED IN PURCHASE OF ANOTHER AGRICULTURAL LAND AS PER PROVISIONS OF SECT ION 54B AND THEREFORE THERE WAS NO TAXABLE CAPITAL GAIN AND THEREFORE THE SAME WAS NOT DECLARED IN THE RETURN OF INCOME. THE SUBMISSION OF THE ASSESSEE W AS NOT FOUND ACCEPTABLE TO THE A.O. FOR THE REASON THAT THE CAPITAL GAIN AL ONG WITH ANY DECLARATION UNDER SECTION 54B OF THE ACT HAS TO BE MADE IN THE RETURN OF INCOME, BUT NO SUCH CLAIM WAS MADE IN THE RETURN OF INCOME AND THE REFORE THE ASSESSEE HAD ITA NO 567/A HD/2013 . A.Y. 2008 - 09 3 CONCEALED THE SALE TRANSACTION AND RESULTING CAPITA L GAIN THEREON. HE ALSO NOTED THAT THOUGH ASSESSEE HAD CLAIM DEDUCTION UNDE R SECTION 54B AMOUNTING TO RS. 6 LACS IN THE COMPUTATION FURNISHE D DURING ASSESSMENT PROCEEDINGS BUT HAD FURNISHED EVIDENCE FOR PURCHASE OF NEW ASSET FOR ONLY RS. 79,400/-. HE ALSO NOTED THAT SECTION 54B IS APP LICABLE TO SALE OF AGRICULTURAL LAND WHICH WAS USED FOR AGRICULTURE PU RPOSE AND THE ASSESSEE ALSO PURCHASES NEW ASSET BEING LAND TO BE USED FOR AGRICULTURE PURPOSES. A.O. NOTED THAT THE LAND WAS CONVERTED AS NON AGRIC ULTURE PRIOR TO SALE. HE ALSO NOTED THAT ASSESSEE HAD NOT PURCHASED NEW ASSE T WITHIN THE TIME STIPULATED UNDER SECTION 54B OF THE ACT AND THE SAL E CONSIDERATION WAS ALSO NOT DEPOSITED IN THE ACCOUNT AS PROVIDED IN THE SEC TION. HE ACCORDINGLY CALCULATED THE ASSESSEES SHARE OF LONG TERM CAPITA L GAIN AT RS. 07,16,394/- AND ADDED IT TO THE INCOME. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE PREFERRED APPEAL BEFORE CIT(A). BEFORE CIT(A) NONE APPEARED ON BEHALF OF ASSESSEE AND THEREFORE CIT(A) ON THE BASIS OF MATER IAL ON RECORD DISMISSED THE GROUND OF THE ASSESSEE BY HOLDING AS UNDER:- 3.2 I HAVE GONE THROUGH THE FACTS OF THE CASE. THE BASIC FACTS AS ENUNCIATED BY THE AO AND REPRODUCED IN BRIEF IN PARA.3.1.1, AB OVE HAVE NEVER BEEN REBUTTED BY THE APPELLANT. THE STATEMENT OF FACTS I S ALSO .SILENT ON THESE. IT IS CLEAR THAT THE LAND SOLD WAS NOT AN AGRICULTURAL LA ND, NOR WAS THE SUBSEQUENT LAND PURCHASED. THE VALUE OF THE LAND PURCHASED WAS ALSO LESS THAN REQUIRED FOR CLAIMING THE EXEMPTION. IT IS OBVIOUS THAT THE APPELLANT HAD AS AN AFTERTHOUGHT TRIED TO MAKE A TOTALLY INADMISSIBLE C LAIM AFTER BEING FOUND TO HAVE NEITHER SHOWN CAPITAL GAIN WITH RESPECT TO THE TRANSACTION NOR HAVING DISCLOSED ANY DETAILS OF THE TRANSACTION. THE CAPIT AL GAIN HAS BEEN RIGHTLY BROUGHT TO TAX BY THE AO AND THE ADDITION ON THIS A CCOUNT IS UPHELD. THE GROUND OF APPEAL IS THEREFORE, DISMISSED. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF A.O. AND CIT(A). ITA NO 567/A HD/2013 . A.Y. 2008 - 09 4 7. WE HAVE HEARD THE LD. D.R. CIT(A) WHILE DISMISSI NG THE APPEAL OF THE ASSESSEE HAS NOTED THAT THE FACTS NAMELY THAT AGAIN ST THE DEDUCTION OF RS. 6 LACS U/S. 54B, ASSESSEE HAD ONLY SHOWN NEW PURCHASE OF LAND OF RS. 79,400/- THE NEW ASSET PURCHASED WAS A RESIDENTIAL LAND AND NOT AN AGRICULTURAL LAND AND THE LAND THAT WAS SOLD WAS CONVERTED INTO LAND FOR NON AGRICULTURAL PURPOSE PRIOR TO ITS SALE HAVE NOT BEEN REBUTTED BY THE ASSESSEE. HE THEREFORE BASED ON THE MATERIAL ON RECORD HAS GIVEN A FINDING THAT THE LAND SOLD WAS NOT AN AGRICULTURE LAND NOR WAS THE SUBSEQ UENT LAND WHICH WAS PURCHASED AN AGRICULTURE LAND. HE HAS FURTHER NOTE D THAT THE VALUE OF LAND PURCHASED WERE ALSO LESS THAN REQUIRED FOR CLAIMING THE EXEMPTION. BEFORE US, NO MATERIAL HAS BEEN BROUGHT ON RECORD TO CONTR OVERT THE FINDINGS OF CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WI TH THE ORDER OF CIT(A) AND THUS THIS GROUND OF ASSESSEE IS DISMISSED. 2 ND GROUND IS WITH RESPECT TO CONFIRMING THE ADDITION MAKE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF FAMILY MEMBERS AND WITHDRAWA LS MADE TO MEET THE HOUSEHOLD EXPENSES, IN RESPONSE TO WHICH ASSESSEE S UBMITTED THAT HIS FAMILY MEMBERS CONSISTED OF 4 MEMBERS AND HAD WITHDRAWN 62 ,700/- TO MEET THE HOUSEHOLD EXPENSES. A.O. WAS OF THE VIEW THAT CONS IDERING THE SIZE OF FAMILY AND THE STANDARD OF LIVING, THE WITHDRAWALS BY THE ASSESSEE WAS FOUND TO BE MEAGER. HE THEREFORE MADE A LUMP SUM ADDITION OF RS . 20,000/- TO THE TOTAL INCOME. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CA RRIED THE MATTER BEFORE CIT(A). CIT(A) UPHELD THE ORDER OF A.O. AGGRIEVED B Y THE ORDER OF CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF A.O. AND CIT(A). 9. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. WE FIND THAT BEFORE A.O, ASSESSEE HAS SUBMITTED THAT HE HAD MADE A WITHDRAWAL OF ITA NO 567/A HD/2013 . A.Y. 2008 - 09 5 62,700/- FOR MEETING THE HOUSEHOLD EXPENSES. A.O. F OUND THE WITHDRAWALS NOT COMMENSURATE WITH THE REQUIREMENT OF THE FAMILY AND MADE AN ADDITION OF RS. 20,000/- ON ESTIMATED BASIS WHICH WAS ALSO CONFIRME D BY CIT(A). WE FIND THAT THE ESTIMATE MADE BY THE A.O. WAS NOT BASED ON ANY MATERIAL ON RECORD AND IS ALSO NOT SUPPORTED BY ANY EVIDENCE. FURTHER EVEN THE SUBMISSION OF ASSESSEE IS ALSO NOT SUPPORTED BY ANY EVIDENCE. IN SUCH A SITUATION IN THE INTEREST OF JUSTICE AND TO BE FAIR TO BOTH SIDES, W E FEEL THAT THE ENDS OF JUSTICE SHALL BE MET, IF ADDITION IS RESTRICTED TO 10,000/- AS AGAINST 20,000/- MADE BY THE A.O. WE THUS DIRECTLY ACCORDINGLY. IN THE RESUL T, THIS GROUND OF ASSESSEE IS PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 14 - 02 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD