Smt. Dharmishthaben Madhusudanbhai Patel, Ahmedabad V. The ITO, SK Ward-1, Himatnagar

ITA 608/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7015 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 09-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANJAN KUMAR SINGH
• Assessee Lawyers: T P HEMANI
• Keywords: Unexplained investment
• Section: 148

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.608/AHD/2016 / ASSTT. YEAR: 2007-2008 SMT.DHARMISHTHABEN MADHUSUDANBHAI PATEL B-103, HIMALAYA ZICRON IN FRONT OF IIT ENG. COLLEGE AHMEDABAD. PAN : AACCC 2531 M VS. ITO, S.K. WARD-1 HIMATNAGAR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI T.P. HEMANI, AR REVENUE BY : SHRI RANJAN KUMAR, SINGH, SR.DR ! / DATE OF HEARING : 09/01/2019 '#$ ! / DATE OF PRONOUNCEMENT: 10/01/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-2, AHMEDABAD DATED 22.1.2016 PASSED FOR T HE ASTT.YEAR 2007-08. 2. IN THE FIRST GROUND OF APPEAL, THE ASSESSEE HAS CHALLENGED REOPENING OF THE ASSESSMENT BY ISSUANCE OF NOTICE U NDER SECTION 148 OF THE INCOME TAX ACT. ITA NO.608/AHD/2016 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DI D NOT FILE RETURN OF INCOME FOR THE ASSTT.YEAR 2007-08. THE AO CAME TO KNOW FROM VERIFICATION OF DATA THAT THE ASSESSEE HAD PURCHASE D FIVE PROPERTIES DURING THE YEAR. HE TOOK NOTE OF THESE DETAILS IN REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. HE, THEREAFTER, OBSER VED THAT SINCE THE ASSESSEE HAS NOT FILED DETAILS, THEREFORE, IT IS NO T ASCERTAINABLE WHAT ARE THE SOURCE FOR PURCHASES OF SUCH PROPERTIES, HENCE, IN ORDER TO VERIFY THESE TRANSACTIONS, HE RECORDED REASONS AND REOPENE D THE ASSESSMENT. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT IN T HE REASONS, THE AO HAS NO WHERE OBSERVED THAT INCOME HAS ESCAPED ASSES SMENT. THE INVESTMENT IN PROPERTY CANNOT BE CONSTRUED AS ESCAP EMENT OF INCOME, AND THEREFORE, REOPENING CANNOT BE MADE. 4. ON DUE CONSIDERATION OF THE ABOVE SUBMISSIONS AN D THE REASONS RECORDED BY THE AO, WE ARE OF THE VIEW THAT SINCE T HE ASSESSEE HAS NOT FILED RETURN OF INCOME, IT WAS NOT POSSIBLE FOR THE AO TO FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT UNLESS DETAILS A RE CROSS-VERIFIED. HAD THE ASSESSEE HAS FILED COPY OF BALANCE SHEET, A ND OTHER DOCUMENTS, HE COULD HAVE MAKE OUT FUNDS AVAILABLE WITH THE ASS ESSEE AT THE OPENING OF THE YEAR VIS--VIS AT THE CLOSING OF THE YEAR. IN THE ABSENCE OF THESE DETAILS, HE HAS TO MAKE A MENTION THAT VER IFICATION OF THESE INVESTMENTS IS REQUIRED, WHICH COULD BE DONE BY REO PENING OF THE ASSESSMENT. THEREFORE, WE DO NOT FIND ANY ERROR IN THE REOPENING OF THE ASSESSMENT. THIS GROUND OF APPEAL IS REJECTED. 5. IN THE NEXT GROUND OF APPEAL, GRIEVANCE OF THE A SSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF R S.21,19,500/- WHICH WAS ADDED BY THE AO ON ACCOUNT OF ALLEGED UNEXPLAIN ED INVESTMENT. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD. THERE IS NO DISPUTE WITH REGAR D TO THE FACT THAT FIVE PROPERTIES HAVE BEEN PURCHASED BY THE ASSESSEE ALON G WITH CO-OWNERS. INVESTMENT IN THE PROPERTY IS ALSO NOT IN DISPUTE. THE LD.COUNSEL FOR THE ITA NO.608/AHD/2016 3 ASSESSEE AT VERY OUTSET SUBMITTED THAT SHARE OF THE ASSESSEE WAS ONE- FOURTH, AND THE AO SHOULD HAVE INQUIRED SOURCE OF T HIS ONE-FOURTH AMOUNT OF THE TOTAL INVESTMENT. HE FURTHER DREW OU R ATTENTION TOWARDS COPY OF THE ASSESSMENT ORDER PASSED IN THE CASE OF KAPILABEN V. OAD WHO IS STATED TO BE OTHER CO-OWNER. IN HER CASE AL SO TOTAL OF THIS INVESTMENT HAS BEEN ADDED AS UNEXPLAINED INVESTMENT . THE LD.DR, ON THE OTHER HAND POINTED OUT THAT ASSESSEE NEITHER PR ODUCED COPY OF THE SALE DEED NOR PRODUCED SOURCE OF INVESTMENT I.E. HO W MUCH FUND WAS CONTRIBUTED BY HER. 7. ON DUE CONSIDERATION OF THE ABOVE FACTS, WE ARE OF THE VIEW THAT LD.AO HAS NOT CARRIED OUT INVESTIGATION. HE SHOULD HAVE CALLED FOR COPIES OF SALE DEED FROM THE REGISTRARS OFFICE WHE RE SALE DEEDS WERE REGISTERED. HE COULD FIND OUT WHO ARE THE VENDEES AND TO WHAT EXTENT THEY HAVE THE SHARES. ONCE THE ASSESSEE HAS RAISED A SPECIFIC PLEA, AND ON SUCH PLEA A REMAND REPORT WAS CALLED FOR BY THE LD.CIT(A), THEN BY EXERCISING OF STATUTORY POWER, THE LD.AO SHOULD HAV E ASCERTAINED COMPLETE FACTS. THE LD.CIT(A) HAS ALSO COMMITTED A N ERROR BY SIMPLY OBSERVING THAT THE ASSESSEE SHOULD HAVE SUBMITTED C OPIES OF SALE DEED. THIS FACT CAN BE VERIFIED FROM THE OFFICE OF REGIST RAR ONLY. THE QUASI JUDICIAL AUTHORITIES ARE BEING RESPECTED NOT ON ACC OUNT OF THEIR POWER TO LEGALISE THE INJUSTICE ON TECHNICAL GROUND BUT BECA USE, THEY ARE CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. IT IS THE AO WHO HAS ALLEGED A CHARGE AGAINST THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT. HE HAS TO WORK OUT EXACT AMOUNT. HE C OULD NOT EXPECT THE ASSESSEE TO PROVE HOW MUCH INVESTMENT SHE HAS MADE. ONCE SHE HAS ALLEGED THAT HER SHARE WAS ONLY ONE-FOURTH, THEN IT WAS FOR THE REVENUE TO PROVE THAT SHE HAS MADE INVESTMENT OF MORE THAN ONE-FOURTH. HIGH- HANDEDNESS AND LACKADAISICAL ATTITUDE AT THE END OF THE REVENUE ARE APPEARING FROM THE FACT THAT SAME AMOUNT HAS BEEN A DDED IN THE HANDS OF OTHER CO-OWNERS ALSO. COPY OF THE ASSESSMENT OF ORDER OF SMT. KAPILABEN V. OAD IS PLACED AT PAGE NOS.18 TO 26 OF THE PAPER BOOK. ITA NO.608/AHD/2016 4 SUCH TYPE OF THINGS WOULD GIVE RISE UNNECESSARY LIT IGATION. THE LD.CI(A) OUGHT TO HAVE LOOKED INTO THIS ASPECT BEFORE CONFIR MING THE ADDITION. CONSIDERING ALL THESE ASPECTS, WE SET ASIDE BOTH OR DERS OF THE LD.CIT(A) AS WELL AS AO AND REMIT THIS ISSUE TO THE FILE OF A O. THE LD.AO SHALL CALL FOR THE COPIES OF THE SALE DEED FROM THE OFFICE OF SUB-REGISTRAR WHERE THESE SALE DEEDS WERE REGISTERED, AND THEN IDENTIFY EXACT SHARE OF THE ASSESSEE AND THEREAFTER CONFRONT THE ASSESSEE TO EX PLAIN THE SOURCE OF A PARTICULAR AMOUNT. HE COULD NOT EXPECT THAT THE AS SESSEE SHOULD PROVE NEGATIVE. THIS EXERCISE BE CARRIED OUT AFTER GIVIN G DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 10 TH JANUARY, 2019 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER