Vijay Mohan Gupta, New Delhi V. ITO, New Delhi

ITA 5754/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3941 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 08-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MANOJ PATAWARI
• Keywords: Unexplained investment; Capital asset; Income from undisclosed sources; Source of fund
• Section: 143(3); 195; 147; 148

Judgement Text

PAGE 1 OF 14 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: G: NEW DELHI) BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 5754/DEL/2016 ( ASSESSMENT YEAR: 2007-08) SHRI VIJAY MOHAN GUPTA, NEW DELHI. VS. INCOME TAX OFFICER, WARD- 32(3), NEW DELHI. PAN NO: AANPG6772G APPELLANT RESPONDENT ASSESSEE BY : SHRI MANOJ PATAWARI, CA REVENUE BY : SHRI N.K. BANSAL, SR. DR ORDER PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY ASSESSEE IS FILED AGAINST THE IMPUG NED APPELLATE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-18, NEW DELHI, [LD. CIT(A), FOR SHORT], DATED 16.08.2016 FOR ASSESSMENT YEAR 2007-08. THE GROUND S OF APPEAL ARE AS UNDER: THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS: 1. IN SUSTAINING THE ADDITION OF RS. 7,00,000/- AS UNE XPLAINED INVESTMENT IN PURCHASE LAND RELYING ON THE STATEMENT OF SOME OF T HE SELLERS OF LAND TO THE ASSESSEE. 2. IN SUSTAINING ADDITION OF RS. 4,08,000/- BEING C ASH DEPOSITED IN THE BANK ACCOUNT OF LENDER, OUT OF TOTAL OF RS. 12,93,200/- BORROWED BY ASSESSEE THROUGH BANK TRANSACTION. PAGE 2 OF 14 3. IN SUSTAINING THE ADDITION OF RS. 3,24,000/- ON ACCOUNT OF LOW DRAWINGS WITHOUT ANY SUBSTANTIAL EVIDENCE IN HANDS. ASSESSEE CRAVES LEAVE OF THIS HONBLE TRIBUNAL TO A DD OR AMEND THE AFORESAID GROUNDS AT THE TIME OF HEARING OR BEFORE DISPOSAL OF APPEAL . (B) ORIGINAL RETURN WAS FILED ON 01/08/2007 DECLARING INCOME OF RS. 2,13,240/-. PROCEEDINGS U/S 147 READ WITH SECTION 148 OF INCOME TAX ACT, 1961 (I.T. ACT, FOR SHORT) WERE INITIATED BY THE ASSESSING OFFICER (AO, FOR SHORT), BY ISSUE OF NOTICE DATED 07/03/2013 U/S 148 OF I.T. ACT ON THE BASIS OF ONE IKRARNAMA (AGREEMENT) BETWEEN TWO CO-OWNERS OF THE LAND (VENDORS) AND ONE MR. BHUPIND ER SINGH; FOUND DURING A SEARCH AT THE PREMISES OF A THIRD PARTY. IN THE AFORESAID IK RARNAMA (AGREEMENT) THE AGREED CONSIDERATION FOR PIECE OF LAND WAS SHOWN AT A FIGU RE HIGHER THAN THE CONSIDERATION FOR WHICH SUBSEQUENTLY THE PIECE OF LAND WAS TRANSFERRE D TO THE ASSESSEE. ALTHOUGH, THE AFORESAID IKRARNAMA (AGREEMENT TO SELL) WAS ABANDON ED AND DID NOT RESULT IN TRANSFER OF LAND BETWEEN THE TWO CO-OWNERS AND THE AFORESAID MR . BHUPINDER SINGH; THE AO TOOK NOTE OF THE AFORESAID IKRARNAMA (AGREEMENT TO SELL) WHIL E COMPLETING THE ASSESSMENT VIDE ASSESSMENT ORDER U/S 147 READ WITH SECTION 143(3) O F I.T. ACT PASSED ON 31/03/2014 WHEREIN THE FOLLOWING ADDITIONS WERE MADE: A. ADDITION OF RS. 65,67,000/- ON ACCOUNT OF ASSESSEE 1/3 RD SHARE IN THE PAYMENT OF RS. 1,97,00,000/- MADE FOR THE PURCH ASE OF LAND AT TIPRA, KALKA, PANCHKULA, HARYANA TREATING THE SAME AS UNEX PLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE AND ADDED AS INCOME FROM UNDISCLOSED SOURCES TO THE DECLARED INCOME OF THE ASSESSEE. PAGE 3 OF 14 B. ADDITION OF RS. 12,93,200/- ON ACCOUNT OF UNEXPLAIN ED CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED AS INCOME FROM UNDI SCLOSED SOURCES TO THE DECLARED INCOME OF THE ASSESSEE. C. ADDITION OF RS. 3,24,000/-, ON ACCOUNT OF INCOME FR OM UNDISCLOSED SOURCES IS MADE TO THE DECLARED INCOME OF THE ASSES SEE, FOR PERSONAL AND FOR CONTRIBUTION TO HOUSEHOLD EXPENSES. (B.1) AGGRIEVED BY THE ABOVE STATED ADDITIONS, THE ASSES SEE FILED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-18 , NEW DELHI. VIDE THE AFORESAID IMPUGNED APPELLATE ORDER DATED 16.08.2016 OF THE LD. CIT(A); ASSESSEE WAS ALLOWED PARTIAL RELIEF. HOWEVER, OUT OF TOTAL OF RS. 65,67,000/- AND ADDITION OF RS. 7,00,000/-; AN ADDITION OF RS. 4,08,000/- OUT O F THE AFORESAID ADDITION OF RS. 12,93,200/-; AND THE ENTIRE AFORESAID ADDITIONS OF RS. 3,24,000/- WERE SUSTAINED BY THE LD. CIT(A). STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS PRESENT APPEAL. (C) IN THE COURSE OF APPELLATE PROCEEDINGS IN INCOME T AX APPELLATE TRIBUNAL (ITAT, FOR SHORT), THE FOLLOWING PARTICULARS I.E, PAPER BOOK, CASE LAW BOOK AND SYNOPISIS, WERE FILED FROM THE ASSESSEES SIDE: CONTENTS OF PAPER BOOK: 1. COPY OF ITR ACKNOWLEDGEMENT FILED ON 01.08.2007 ALO NG WITH COMPUTATION OF INCOME FOR THE A.Y. 2007-08. 2. COPY OF THE WRITTEN SUBMISSIONS FILED BEFORE LD. CIT(A)-18. 3. COPY OF THE PURCHASE DEED DATED 07.04.2006 IN FA VOUR OF THE APPELLANT & OTHERS DULY FILED BEFORE LD. CIT(A)-18. PAGE 4 OF 14 4. COPY OF THE SALE DEED DATED 21.05.2007 BY APPELL ANT & OTHERS DULY FILED BEFORE LD. CIT(A)-18. 5. COPY OF IKRARNAMA DATED 31.10.2005 DULY FILED BE FORE LD. CIT(A)-18. 6. COPY OF STATEMENTS RECORDED BY ADIT, CHANDIGARH. 7. COPY OF REASONS RECORDED FOR RE-OPENING THE ASSE SSMENT. 8. COPY OF ITR ACKNOWLEDGMENT ALONGWITH PAN CARD AN D LOAN CONFIRMATION CERTIFICATE FOR THE A.Y. 2007-08 OF SH RI RAHUL KALSI. CONTENTS OF CASE LAW BOOK: 1. ORDER OF HONBLE SUPREME COURT IN CIT VS. P.V. KALA YANSUNDRARAM (2007) 294 ITR 49/164 TAXMAN 78 CONFIRMING THE DECI SION OF MADRAS HIGH COURT IN CIT VS. P.V. KALYANSUNDARAM (2006) 28 2 ITR 259/155. 2. ORDER IN THE CASE OF PARAMJIT SINGH VS. ITO (201 0), 323 ITR 588 OF PUNJAB AND HARYANA COURT FOLLOWED IN SUNITA DHADDA VS. DY. CIT, 2013(JAIPUR-TRIBUNAL) BY ITAT JAIPUR. 3. ORDER OF RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SUNITA DHADDA, SHRI PADAM CHAND DHADDA AND SMT. VIJAY LAXMI DHADDA , D.B. INCOME TAX APPEAL NO. 197/2012, D.B. INCOME TAX APPEAL NO. 199/2012 AND D.B. INCOME TAX APPEAL NO. 198/2012, DATED:- 31 JUL Y 2017. 4. ORDER IN THE CASE OF M/S KAMAKSHI HOSPITALITY PV T. LTD. VERSUS THE DCIT CENTRAL CIRCLE-1, JAIPUR ITA NO. 481/JP/2016 2018. 5. ORDER IN THE CASE OF SHETH AKSHAY PUSHPAVADAN VE RSUS DCIT ITA NO. 3178/AHD/2009; 2010 ITAT, AHEMDABAD. 6. ORDER IN THE CASE OF CIT V. LOVELY EXPORTS (P) LT D [2008] 216 CTR 195 (SC) 7. ORDER IN THE CASE OF CIT V. GAGANDEEP INFRASTRUC TURE (P) LTD (2017) 394 ITR 680 (BOMBAY HC) 8. ORDER IN THE CASE OF CIT V. ORCHID INDUSTRIES (P ) LTD (2017) 397 ITR 136 (BOMBAY HC) 9. ORDER IN THE CASE OF PCIT V. APEAK INFO TECH (2 017) 397 ITR 148 (BOMBAY HC) 10. ORDER IN THE CASE OF CIT VS. DIAMOND PRODUCTS LIMITED (2009) (DELHI) ITA NO. 1004/2008 PAGE 5 OF 14 CONTENTS OF SYNOPSIS PAGE 6 OF 14 PAGE 7 OF 14 PAGE 8 OF 14 PAGE 9 OF 14 (C.1) FURTHER, A COPY OF THE ORDER OF INCOME TAX APPELLA TE TRIBUNAL, LUCKNOW BENCHES DATED 28.04.2016 IN THE CASE OF SHRI RAJEN DRA KUMAR SOMANI VS. DCIT IN PAGE 10 OF 14 ITA NO.- 35,36 & 37/LKW/2016 FOR ASSESSMENT YEARS 2 004-05, 2005-06 & 2006-07; ORDER DATED 24/08/2016 IN THE CASE OF A.C.I.T. CENT RAL CIRCLE-2, NEW DELHI VERSUS PUNIT BERIWALA 2016 (10) TMI 254-ITAT DELHI IN ITA NO. 964/DEL/2012 AND ORDER DATED 23.07.2012 OF INCOME TAX APPELLATE TRIBUNAL, B BENCH, CHENNAI, IN THE CASE OF THE JT. COMMISSIONER OF INCOME TAX VS. SHRI V. S AMPATH IN ITA NO. 710, 711, 712, 713, 714, 715 AND 716/MDS/2012 AND C.O. NOS. 73, 74 ,75,76,77, 78 AND 79/MDS/2012 FOR A.YS. 2002-03, 03-04, 04-05, 05-06 , 06-07, 07-08 AND 08-09 WERE ALSO FILED FROM ASSESSEES SIDE DURING THE COURSE O F APPELLATE PROCEEDINGS IN ITAT. (D) AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL F OR ASSESSEE REITERATED THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFORE T HE LD. CIT(A) WHICH HAVE BEEN DULY INCORPORATED IN THE AFORESAID IMPUGNED ORDER D ATED 16.08.2016 OF LD. CIT(A). THE LD. COUNSEL FOR ASSESSEE PLACED FURTHER RELIANC E ON THE PARTICULARS FILED DURING THE APPELLATE PROCEEDINGS IN ITAT, WHICH HAVE BEEN LISTED ALREADY IN FOREGOING PARAGRAPH NO. (C). ON THE OTHER HAND, THE LD. DEPA RTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) RELIED ON THE ASSESSMENT ORDER AND T HE ORDER OF THE LD. CIT(A). HE READ OUT THE RELEVANT PORTIONS FROM THE ORDERS OF T HE LD. CIT(A) AND THE AO TO DRAW OUR ATTENTION TO THE FACTS OF THE CASE. (E) WE HAVE HEARD BOTH SIDES PATIENTLY. WE HAVE PERUS ED THE MATERIALS AVAILABLE ON RECORDS. WE HAVE REFERRED TO THE JUDICIAL PRECEDEN TS MENTIONED IN OUR RECORDS AND ALSO THE JUDICIAL PRECEDENTS TOWARDS WHICH OUR ATTE NTION HAS BEEN DRAWN IN THE COURSE OF APPELLATE PROCEEDINGS IN ITAT. PAGE 11 OF 14 (E.1) AS FAR AS THE FIRST GROUND OF APPEAL IS CONCERNED. WE FIND THAT THE LD. CIT(A) HAS SUSTAINED THE ADDITION OF RS. 7,00,000/- AS AN UNEXPLAINED INVESTMENT IN PURCHASE OF LAND ON ACCOUNT OF ON-MONEY PAYMENT. H OWEVER, BOTH THE LOWER AUTHORITIES NAMELY, THE LD. CIT(A) AS WELL AS THE A O HAVE FAILED TO BRING ANYTHING ON RECORD TO PROVE CONCLUSIVELY, THAT THE ALLEGATION O F PAYMENT OF ON-MONEY IS IN CONSONANCE WITH CIRCLE RATE OR WITH VALUATION OF TH E LAND BY STAMP DUTY AUTHORITY. THE ADDITION IS ALSO NOT BASED ON VALUATION OF LAND BY ANY REGISTERED VALUER. MOREOVER, THE ADDITION IS ALSO NOT BASED ON ANY REP ORT OF VALUATION OFFICER. THE LOWER AUTHORITIES HAVE ALSO FAILED TO BRING ANY MAT ERIAL ON RECORD TO SHOW THAT THE ADDITION IS JUSTIFIED ON THE BASIS OF FAIR MARKET V ALUE OF THE LAND. IN FACT, FROM THE PERUSAL OF THE ORDERS OF THE LD. CIT(A) AND THE AO; WE FIND NO MATERIAL TO EVEN INDICATE THAT THE TRUE VALUE OF LAND COMMANDED A FI GURE HIGHER THAN WHAT IS REPORTED BY THE ASSESSEE. THERE IS ALSO NO MATERIAL ON RECOR D TO SHOW THAT ANY ON-MONEY PAYMENT MIGHT HAVE BEEN REQUIRED TO BE PAID BY THE ASSESSEE HAVING REGARD TO TRUE MARKET VALUE OF THE LAND IN THE MARKET OR HAVING RE GARD TO CIRCLE RATE / VALUATION BY STAMP DUTY AUTHORITY / VALUATION BY REGISTERED VALU ER / VALUATION BY VALUATION OFFICER. HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE MATERIALS ON RECORD, AND IN VIEW OF AFORESAID DISCUSSION, WE DEL ETE THE AFORESAID ADDITION OF RS. 7,00,000/- WHICH WAS CONFIRMED BY THE LD. CIT(A). (F) THE SECOND GROUND OF APPEAL PERTAINS TO ADDITION OF RS. 4,08,000/- B EING CASH DEPOSITED IN BANK ACCOUNT OF THE LENDER. FROM PERU SAL OF RECORD, WE FIND THAT THIS AMOUNT IS PART OF THE AMOUNT BORROWED BY THE ASSESS EE FOR PURCHASE OF THE AFORESAID PAGE 12 OF 14 PIECE OF LAND. THE ASSESSEE HAD BORROWED THE TOTAL AMOUNT OF RS. 12,93,200/- OUT OF WHICH THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS. 4,08,000/-. MR. RAHUL KALSI, THE LOAN CREDITOR HAS SUBMITTED LOAN CONFIRMATION C ERTIFICATE, WHICH WAS FILED BY THE ASSESSEE BEFORE THE AO DURING THE ASSESSMENT PROCEE DINGS. THE RELEVANT PORTION OF THE LOAN CONFIRMATION CERTIFICATE OF MR. RAHUL KALS I IS REPRODUCED AS UNDER: LOAN CONFIRMATION CERTIFICATE I, RAHUL KALSI, S/O RAVI KALSI, RESIDENT OF 117, AR JUN MARG, DLF PHASE-1, GURGAON, HARYANA- 122002, HAS GIVEN LOAN TO THE TUNE OF RS. 12,93,200/- DURING THE MONTH OF APRIL, 2006 TO SH. VIJAY MOHAN GUPTA, S/O B.M. G UPTA, RESIDENT OF E-211, LAJPAT NAGAR-1, NEW DELHI-24. THE SAME LOAN HAS BEEN GIVE N FROM MY HDFC ACCOUNT NO. 0921000026260, BY MAKING DIRECT PAYMENT TO SELL ER FROM WHOM SH. VIJAY MOHAN GUPTA HAS PURCHASED AGRICULTURAL LAND. THE S AME PAYMENT HAS BEEN MADE BASED ON INSTRUCTION RECEIVED FROM SH. VIJAY M OHAN GUPTA. THAT I AM ASSESSED TO INCOME TAX AND MY PAN. ABMPK0 274H. SD/- (RAHUL KALSI) (F.1) FROM PERUSAL OF RECORDS, WE FIND THAT THE ASSESSEE HAS CONCLUSIVELY PROVED THAT THE ASSESSEE TOOK LOAN FROM MR. RAHUL KALSI, T HE LOAN CREDITOR, FOR THE PURPOSE OF PURCHASING THE AFORESAID PIECE OF LAND AND HAS EXPL AINED THE SOURCE OF FUNDS FOR PURCHASE OF THE AFORESAID PIECE OF LAND, THE LOAN C REDITOR HAS ALSO SUBMITTED LOAN CONFIRMATION CERTIFICATE, WHICH IS PART OF RECORD. FROM THE PERUSAL OF RECORD WE FIND THAT THE ASSESSEE HAS PROVED THE IDENTITY OF THE LO AN CREDITOR, THE CAPACITY OF THE LOAN CREDITOR AND THE GENUINENESS OF THE LOAN TRANS ACTION. THE LD. CIT(A) HAS EXPRESSED DOUBT ABOUT THE AFORESAID AMOUNT OF RS. 4 ,08,000/-, ON THE GROUND THAT SUCH HUGE AMOUNT WAS PAID BY THE LOAN CREDITOR DIRE CTLY TO THE SELLER OF LAND AND ON THIS BASIS, THE LD. CIT(A) HAS CONFIRMED THE ADDITI ON. HOWEVER IN DOING SO, THE LD. PAGE 13 OF 14 CIT(A) HAS CONTRADICTED HIMSELF BECAUSE HE HAS ACCE PTED THE GENUINENESS OF THE REST OF THE LOAN AMOUNT OF RS. 8,13,200/- (I.E. 12,93,2 00 MINUS RS. 4,08,000/-), IN IDENTICAL FACTS AND CIRCUMSTANCES. MOREOVER, THERE IS NO PROVISION UNDER LAW PROHIBITING THE LOAN CREDITOR TO MAKE DIRECT PAYMEN T TO THE SELLER OF LAND. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE MATERIALS ON RECORD, AND THE FOREGOING DISCUSSION, WE DELETE THE AFORESAID ADDI TION OF RS. 4,08,000/-, WHICH WAS SUSTAINED BY THE LD. CIT(A). (G) THE THIRD GROUND OF APPEAL IS REGARDING ADDITION OF RS. 3,24,000/- ON ACCOUNT OF LOW DRAWINGS FOR HOUSEHOLD EXPENSES. TH IS ADDITION IS BASED ON ESTIMATED MONTHLY HOUSEHOLD EXPENSES OF RS. 30,000/ - PER MONTH. ON PERUSAL OF RECORDS, AND HAVING REGARD TO FACTS AND CIRCUMSTANC ES OF THE CASE, WE ARE OF THE VIEW THAT THIS ESTIMATE MADE BY AO CANNOT BE SAID T O BE EXCESSIVE, UNREASONABLE OR HIGH PITCHED. THEREFORE, THIS ADDITION MADE BY THE AO, AND SUSTAINED BY THE LD. CIT(A) IS HEREBY CONFIRMED. (H) IN THE RESULT, APPEAL IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF AUGUST, 2019. SD/- SD/- (BHAVNESH SAINI) (ANADEE NATH MISS HRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 22.08.2019 POOJA/- PAGE 14 OF 14 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER