BALJIT KAUR CHANDOK, MUMBAI V. I.T.O.WD.NO.25(1)(4),

ITA 5936/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7229 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 29-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA; S S RANE
• Assessee Lawyers: DINESH RASIKLAL SHAH
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.K.GUPTA, JM AND SHRI R.S.SYAL, AM ITA NO.5936/MUM/2008 : ASST.YEAR 2004-2005 SMT.BALJIT KAUR CHANDOK GORAI SHREE DARSHAN CHS LIMITED PLOT NO.21, RSC.4, GORAI BORIWALI (WEST), MUMBAI 400 092. PA NO.ACIPC2421M. VS. THE INCOME TAX OFFICER WARD 25(1)(4) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DINESH RASIKLAL SHAH RESPONDENT BY : S/SHRI VIRENDRA OJHA & S.S.RANE O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 23.7.2008 I N RELATION TO THE ASSESSMENT YEAR 2004-2005. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN OF RS.3,44,825 IN THE RETURN OF INCOME ON SALE OF FLAT AT KALINA GEETA APARTMENT FOR SALE CONSIDERATION OF RS.14,00,000. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REQUIRED THE ASSE SSEE TO SUBMIT EVIDENCE ABOUT PURCHASE AND SALE AGREEMENT IN RESPECT OF OLD FLAT, PROOF OF REGISTRATION FOR PURCHASE OF NEW FLAT ETC. THE ASSESSEE SUBMITTED TH E DETAIL WITH REGARD TO PURCHASE OF OLD FLAT. THE ASSESSING OFFICER EXAMINED THE BAL ANCE SHEETS OF THE ASSESSEE FOR THE PRECEDING TWO YEARS AND OBSERVED THAT NO SUCH F LAT WAS REFLECTED THEREIN. IN THE ABSENCE OF ANY EVIDENCE THAT THE ASSESSEE OWNED A F LAT WHICH WAS SOLD IN THE YEAR UNDER CONSIDERATION, THE A.O. MADE ADDITION OF RS.1 4 LAKHS BY TREATING IT AS INCOME FROM UNDISCLOSED SOURCES AND ALSO SIMULTANEOUSLY DI SALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.54F. DURING THE FIRST AP PELLATE PROCEEDINGS THE ASSESSEE ITA NO.5936/MUM/2008 SMT.BALJIT KAUR CHANDOK. 2 FILED VARIOUS DOCUMENTS RELATING TO SALE OF OLD FLA T AND PURCHASE OF NEW FLATS ETC. THE LEARNED CIT(A) REQUIRED THE ASSESSEE TO SUBMIT REGISTRATION DEED AND PROOF OF PURCHASE OF OLD FLAT. IT WAS CONTENDED THAT SINCE T HE SAID FLAT WAS SOLD, THE ASSESSEE DID NOT HAVE THE COPY OF THE DEED. HOWEVER A LETTER FROM AMAR GEETA (KALINA) CO- OP. HOUSING SOCIETY LIMITED WAS FILED MENTIONING TH AT THE ASSESSEE WAS A MEMBER OF THE SOCIETY SINCE 1977. THE LEARNED CIT(A) UPHEL D THE ACTION OF THE A.O. ON THE GROUND THAT THE FLAT WHICH WAS SOLD BY THE ASSESSEE WAS NOT REFLECTED IN THE EARLIER BALANCE SHEETS. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED FROM THE COPY OF LETTER ISSUE D BY AMAR GEETA (KALINA) CO-OP. HOUSING SOCIETY LIMITED THAT THE ASSESSEE WAS A ME MBER OF THE SOCIETY SINCE 1977 HAVING THE FLAT, WHICH BECAME SUBJECT MATTER OF SAL E IN THE YEAR IN QUESTION. NO CONTRARY FINDING HAS BEEN RECORDED AGAINST THE LETT ER ISSUED BY AMAR GEETA (KALINA) CO-OP. HOUSING SOCIETY LIMITED. IT CANNOT BE EXPECT ED FROM AN INDIVIDUAL TO REFLECT THE ASSETS MEANT FOR PERSONAL USE. WHEN TH E DRAWINGS ARE RECORDED IN THE CAPITAL ACCOUNT, WHICH IS PART OF BALANCE SHEET, T HAT IS IN ITSELF A SGIN OF HAVING WITHDRAWN THE MONEY. SIMPLY BECAUSE A RESIDENTIAL H OUSE IS NOT REFLECTED IN THE BALANCE SHEET, THAT WILL NOT MAKE IT AS AN UNDISCLO SED INVESTMENT OF THE ASSESSEE. HERE IS A CASE IN WHICH THE ASSESSEE HAD PURCHASED THIS FLAT IN 1977 AS PER THE LETTER ISSUED BY THE SOCIETY, THE SALE OF WHICH WAS APPROP RIATELY REFLECTED IN THE RETURN OF INCOME. UNDER NO CIRCUMSTANCES CAN IT BE HELD THA T THE ASSESSEE HAD PURCHASED THIS FLAT OUT OF UNDISCLOSED INCOME ONLY FOR THE RE ASON THAT IT WAS NOT SHOWN IN THE BALANCE SHEET, WHEN IT IS VIEWED IN THE LIGHT OF TH E FACT THAT THE PURCHASE WAS MADE MORE THAN TWENTY FIVE YEARS AGO. WE, THEREFORE, DO NOT FIND ANY FORCE IN THE VIEW TAKEN BY THE AUTHORITIES BELOW ON THIS ISSUE. THE I MPUGNED ORDER IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF A.O. FOR COMP UTING CAPITAL GAIN AS PER THE PROVISIONS OF ACT BY CONSIDERING THE FLAT AT KALINA GEETA APARTMENT AS A DISCLOSED ASSETS. ITA NO.5936/MUM/2008 SMT.BALJIT KAUR CHANDOK. 3 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 23 RD DAY OF MARCH 2010. SD/- SD/- ( R.K.GUPTA ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 23 RD MARCH, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXV, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI. ITA NO.5936/MUM/2008 SMT.BALJIT KAUR CHANDOK. 4 DATE INITIAL 1. DRAFT DICTATED ON 22.03.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23.03.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.