Mr Nasir Mohammadsaheb Shaukh, Latur V. ITO, Wd-3,[3] Latur, Latur

ITA 609/PUN/2011

• Counselvise Citation: 60924514 RSA 2011
• Duration Of Justice: 2 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 609 /PN/20 1 1 ASSESSMENT YEAR : 20 05 - 06 MR. NASIR MOHAMMADSAHEB SHAIKH, GAN DHI MARKET, LATUR VS. INCOME - TAX OFFICER, WARD - 3(3), LATUR (APPELLANT) (RESPONDENT) PAN NO. ADIPS7223G APPELLANT BY: SHR I M.K. KULKARNI RESPONDENT BY: SHRI S.P. WALIMBE DATE OF HEARING : 2 9 - 0 4 - 2014 DATE OF PRONOUNCEMENT : 30 - 0 4 - 2014 ORDE R P ER R.S. PADVEKAR , JM : - THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) , AURANGABAD DATED 31 - 03 - 2011 F OR THE A.Y. 20 05 - 06. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.4,21,000/ - OUT OF THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.7,21,000/ - . THE RETURN OF TEMPORARY LOAN ADVANCED TO SHRI DHONDIRAM GANPATRAM MANE WAS CONFIRMED BY HIM BY FILING AFFIDAVIT. THE ADDITION SUSTAINED IS UNWARRANTED AND IT BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LAW OBLIGES THAT ONCE THE AFFIDAVIT IS FILED BY THE DEPONENT CONFIRMING THE FACTUAL POSITION I T IS ACCEPTABLE AS THE AFFIDAVIT IS ON OATH. IN CASE THE AUTHORITIES WANT TO REJECT THE SAME, IT IS INCUMBENT ON THEM TO EXAMINE THE AFFIANT. IN CASE OF FAILURE TO EXAMINE THE AFFIANT IT IS LEGALLY PRESUMED THAT THE AUTHORITIES HAVE ACCEPTED THE CONTENTS O F THE SAID AFFIDAVIT. SINCE IN THIS CASE AFFIDAVIT WAS NOT CROSS - EXAMINED THERE WAS NO REASON TO REJECT THE SAME. THE ADDITION SUSTAINED BE QUASHED. 2 ITA NO. 609/PN/2011, MR. NASIR MOHAMMADSAHEB SHAIKH, LATUR 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS NOT JUSTIFIED IN CONFI RMING THE ADDITION OF RS.88,570/ - ESTIMATING THE COST OF IMPROVEMENT OF RS.3,43,385/ - AS AGAINST CLAIMED BY THE APPELLANT OF RS.3,80,000/ - ON THE BASIS OF REGISTERED VALUERS REPORT. THE ADDITION BEING UNWARRANTED BE DELETED. 4. ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE CLAIM OF EXEMPTION PUT FORTH UNDER S. 54 - F HOLDING THAT NO SUCH CLAIM WAS RAISED AT THE TIME OF ASSESSMENT PROCEEDINGS NOR CLAIMED IN THE RETURN. IT IS ACCEPTED LEGAL POSITION THAT EXEMPTION CLAIMS IF NOT MADE EARLIER CAN BE MADE DURING THE APPELLATE PROCEEDINGS. THE AUTHORITIES BE DIRECTED TO CONSIDER THE SAME IN ACCORDANCE WITH THE PROVISIONS OF LAW. 5. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE AS SESSEE DENIES HIS LIABILITY TO PAY INTEREST U/S. 234 - A, 234 - B AND 234 - C OF THE ACT AND THE SAME BE DELETED. 2. THE FIRST ISSUE IS IN RESPECT OF THE ADDITION SUSTAINED BY THE LD. CIT(A) IN RESPECT OF THE DEPOSITS IN THE BANK ACCOUNT AND THIS IS SUE ARISES FROM THE GROUND NOS. 1 AND 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF COMMISSION AGENT ON THE SALE OF BETEL LEAVES. AS PER THE INFORMATION RECEIVED BY THE ASSESSING OFFICER, IT WAS NOTICED THAT THE ASSESSEE HAS DEPOSITED THE FOLLOWING AMOUNTS IN HIS SAVING BANK ACCOUNT WITH SIDDHESHWAR SAHAKARI BANK LTD., GUNJ GOLAI BRANCH, LATUR. DATE AMOUNT 03 - 11 - 2004 RS.7,00,000/ - 17 - 01 - 2005 RS.7,21,000/ - 3. THE ASSESSING OFFICER MADE THE ADD ITION OF RS.14,21,000/ - ON THE REASON THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE EVEN THOUGH IT WAS 3 ITA NO. 609/PN/2011, MR. NASIR MOHAMMADSAHEB SHAIKH, LATUR CONTENDED THAT THE SAID DEPOSITS WERE MADE OUT OF FDRS MATURED IN EARLIER YEARS. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A)AND THE LD. CIT(A) CONSIDERED THE EXPLANATION OF THE ASSESSEE. THE ASSESSEE FILED THE DETAILS OF THE MATURED FDRS WHICH ARE REPRODUCED IN THE IMPUGNED ORDER ON PAGE NO. 3. IT WAS CONTENDED BY THE ASSESSEE THAT THE CASH DEPOSIT OF RS.7,00,000/ - IS SOURCED OUT OF CA SH WITHDRAWAL OF RS.1,00,000/ - ON 24 - 09 - 2004 AND RS.6,00,000/ - ON 02 - 11 - 2004 FROM THE SAME SAVING BANK ACCOUNT. THE ASSESSEE FURTHER CLAIMED THAT THE CASH WITHDRAWAL OF RS.6,00,000/ - IS OUT OF FDRS MATURED OF RS.7,56,305/ - WHICH AMOUNTS WERE CREDITED IN THE SAVING BANK ACCOUNT ON 02 - 11 - 2004. THE ASSESSEE FURTHER CONTENDED THAT THE AMOUNT OF RS.7,00,000/ - WAS DEPOSITED BACK IN THE SAVING BANK ACCOUNT ON 03 - 11 - 2004 AND HENCE, THERE IS A DIRECT NEXUS BETWEEN THE DEPOSIT AND WITHDRAWALS. 4. IN RESPECT OF T HE CASH DEPOSIT OF RS.7,21,000/ - ON 17 - 01 - 2005, THE ASSESSEE CONTENDED THAT HE HAS ADVANCED TEMPORARY LOAN OF RS.8,00,000/ - BY BANK CHEQUE ON 04 - 01 - 2005 TO SHRI DHONDIRAM GANPATRAM MANE, WHO HAVE TAKEN THE SAID LOAN FOR THE PURCHASE OF RESIDENTIAL HOUSE FO R HIS SON AND AS THE DEAL COULD NOT MATERIALIZE, THE SAID LOAN AMOUNT WAS RETURNED BY SHRI DHONDIRAM GANPATRAM MANE TO THE ASSESSEE IN CASH IN TWO INSTALLMENTS I.E. RS.5,00,000/ - ON 15 - 01 - 2005 AND RS.3,00,000/ - ON 24 - 01 - 2005. IT WAS CLAIMED BY THE ASSESSE E THAT THE CASH DEPOSIT OF RS.7,21,000/ - IS OUT OF THE LOAN AMOUNT RECEIVED FROM SHRI DHONDIRAM GANPATRAM MANE IN CASH OF RS.5,00,000/ - AND THE CASH WITHDRAWAL OF RS.3,00,000/ - FROM THE BANK ACCOUNT ON 03 - 01 - 2005 . THE ASSESSEE ALSO FILED THE AFFIDAVIT OF SHRI DHONDIRAM GANPATRAM MANE CONFIRMING THE FACT OF CHEQUE ISSUED TO HIM. 5. CONSIDERING THE EXPLANATION OF THE ASSESSEE THE LD. CIT(A) DELETED THE ADDITION IN RESPECT OF THE CASH DEPOSIT OF RS.7,00,000/ - ON 03 - 11 - 4 ITA NO. 609/PN/2011, MR. NASIR MOHAMMADSAHEB SHAIKH, LATUR 2004 AT ENTIRETY. IN RESPECT OF THE ADDI TION MADE TOWARDS THE CASH DEPOSIT OF RS.7,21,000/ - ON 17 - 01 - 2005 IN THE SBI ACCOUNT NO. 15960. THE LD. CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE TO THE EXTENT OF RS.3,00,000/ - AS THERE WAS A CASH WITHDRAWAL OF THE SAME AMOUNT FROM THE ASSESSEE SAVING BANK ACCOUNT ON 03 - 01 - 2005 AND IT WAS CLAIMED BY THE ASSESSEE THAT THE SAME CASH WAS RE - DEPOSITED ON 17 - 01 - 2005 . I N RESPECT OF THE BALANCE AMOUNT OF RS.4,21,000/ - , T HE CONTENTION OF THE ASSESSEE THAT THE SAID DEPOSIT WAS MADE OUT OF THE AMOUNT RECEIVED FROM S HRI DHONDIRAM GANPATRAM MANE TOWARDS THE REPAYMENT OF THE LOAN WAS REJECTED BY THE LD. CIT(A) BY OBSERVING THAT THE ASSESSEE HAS NOT PROVIDED ABOVE EXPLANATION AT THE TIME OF ASSESSMENT PROCEEDINGS. AS OBSERVED BY THE LD. CIT(A) THE ASSESSEE HAS NOT FILED THE COPY OF BANK STATEMENT OF SHRI DHONDIRAM GANPATRAM MANE SHOWING WITHDRAWAL OF RS.5,00,000/ - BEFORE 15 - 01 - 2005 TO PROVE THAT HE HAD RETURNED THE AMOUNT TO THE ASSESSEE. THE LD. CIT(A), THEREFORE, SUSTAINED THE ADDITION TO THE EXTENT OF RS.4,21,000/ - . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LD. COUNSEL ARGUES THAT THE ASSESSEE HAD FILED THE AFFIDAVIT OF SHRI DHONDIRAM GANPATRAM MANE AND THAT COULD NOT HAVE BEEN SUMMARILY DISCARDED. HE SUBMITS THAT THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO PROVE THAT HE RECEIVED THE AMOUNT OF RS.5,00,000/ - IN CASH FROM SHRI DHONDIRAM GANPATRAM MANE ON 15 - 01 - 2005 AND THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. WE HAVE ALSO HEARD THE LD. DR. 7. IN THIS CASE, THE ONLY LIMITED ISSUE IS PART OF THE CASH DEPOSIT OF RS.7,21,000/ - WHICH HAS BEEN SUSTAINED AT RS.4,21,000/ - BY THE LD. CIT(A). THE CONTENTION OF THE ASSESSEE IS THAT HE HAS GIVEN PERSONAL LOAN OF ONE SHRI DHONDIRAM GANPATRAM MANE, WHO RETURNED TH E SAID AMOUNT IN CASH. IN OUR OPINION, THE ASSESSEE CAN BE GIVEN AN OPPORTUNITY TO 5 ITA NO. 609/PN/2011, MR. NASIR MOHAMMADSAHEB SHAIKH, LATUR PROVE THAT SHRI DHONDIRAM GANPATRAM MANE HAS RETURNED RS.5,00,000/ - ON 15 - 01 - 2005 WHICH WAS IN THE NATURE OF REPAYMENT OF LOAN FROM THE ASSESSEE. WE, ACCORDINGLY, RESTORE THE ISSUE OF RS.4,21,000/ - TO THE FILE OF THE ASSESSING OFFICER FOR FRESH RECONSIDERATION. THE ASSESSEE IS DIRECTED TO PRODUCE THE RELEVANT DOCUMENTS. WE ARE NOT EXPRESSING ANYTHING ON MERIT. THE ASSESSING OFFICER HAS TO DECIDE THE ISSUE AFTER EXAMINING THE RELEVANT EVIDENCE. ACCORDINGLY, GROUND NOS. 1 AND 2 ARE ALLOWED FOR THE STATISTICAL PURPOSES. 8. THE NEXT ISSUE IS THE ADDITION SUSTAINED OF RS. 5,70,000/ - TOWARDS THE COST OF IMPROVEMENT. AS NOTED BY THE ASSESSING OFFICER THE ASSESSEE HAS SOLD FOU R PLOTS BEARING NOS.12, 13, 14 & 23 AT GUT NO. 77, SITUATED AT PAKHARSAWANGI, TALUQ & DIST. - LATUR TO ONE SHRI DNYANOBA GUNDAJI SHELKE FOR A TOTAL CONSIDERATION OF RS.4,50,000/ - VIDE REGISTERED SALE DEED IN OFFERED THE CAPITAL GAIN OF RS.51,166/ - . IT WAS C LAIMED BY THE ASSESSEE THAT HE HAS CONSTRUCTED THE BOUNDARY WALL ADMEASURING 430 RUNNING FTS., SURROUNDING TO THE PLOT AREA AND A LOAD - BEARING CONSTRUCTION OF THREE ROOMS OF AROUND 250 SQ. FTS. THE ASSESSEE CLAIMED EXPENSES TO THE EXTENT OF RS.3,80,000/ - ON THE SAID CONSTRUCTION INCURRED DURING THE YEAR 1990 - 91. THE ASSESSING OFFICER ASKED THE EVIDENCE FOR THE SAID EXPENDITURE AND THE ASSESSEE CONTENDED THAT THE SAME IS MENTIONED IN THE SALE DEED. THE ASSESSING OFFICER ESTIMATED THE EXPENSES INCURRED FOR CONSTRUCTION OF BOUNDARY WALL AT RS.100/ - PER RUNNING FT. AND RS.200/ - PER SQ. FT. FOR THE CONSTRUCTION OF THE STRUCTURE. HE, ACCORDINGLY, WORKED OUT THE TOTAL COST OF IMPROVEMENT AT RS.93,000/ - AS AGAINST RS.3,80,000/ - CLAIMED BY THE ASSESSEE. THE ASSE SSING OFFICER GAVE THE BENEFIT OF INDEXATION. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A) AND LD. CIT(A) HELD THAT CONSIDERING THE TOTALITY OF THE FACTS , T HE REASONABLE ESTIMATION WOULD BE 6 ITA NO. 609/PN/2011, MR. NASIR MOHAMMADSAHEB SHAIKH, LATUR 40% HIGHER THAN TH AT CONSIDE RATION BY THE ASSESSING OFFICER. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDER: 6.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ORDER OF THE A.O., SUBMISSIONS OF THE APPELLANT AND RELEVANT - EVIDENCE ON RECORD. THE APPELLANT HAS CLAIMED THAT T HE AREA OF CONSTRUCTION OF THE STRUCTURE IS 400 SQ. FT AS AGAINST 250 SQ. FT. CONSIDERED BY THE A.O. HOWEVER, THE APPELLANT HAS FAILED TO FURNISH ANY EVIDENCE IN SUPPORT OF ITS CLAIM. IN VIEW OF THE ABOVE FACT, THE AREA OF CONSTRUCTION OF THE STRUCTURE IS CORRECTLY CONSIDERED AT 250 SQ. FT. IT IS AN UNDISPUTED FACT THE CONSTRUCTION OF THE COMPOUND WALL AND THE STRUCTURE HAS BEEN CARRIED OUT BY THE APPELLANT. IT IS OBSERVED THAT THE APPELLANT HAS FAILED TO FURNISH ANY EVIDENCE IN SUPPORT OF THE COST OF IMPR OVEMENT CLAIMED DURING THE ASSESSMENT PROCEEDINGS. THE A.O. HAS CONSIDERED THE COST OF IMPROVEMENT AT RS.93,000/ - ESTIMATING THE CONSTRUCTION COST OF WALL COMPOUND AT RS.100/ - PER RUNNING SQ. FT. AND CONSTRUCTION COST OF THE STRUCTURE AT RS.200/ - PER SQ. F T. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS STATED THAT THE REGISTERED VALUER HAS ESTIMATED THE COST OF IMPROVEMENT AT RS.3,80,000/ - . IT IS OBSERVED THAT THE COST OF CONSTRUCTION CONSIDERED BY THE A.O. IS ON THE LOWER SIDE. CONSIDERING THE TOTAL ITY OF THE FACTS, IT IS REASONABLE TO CONSIDER THE COST OF IMPROVEMENT AT 40% HIGHER THAN THAT CONSIDERED BY THE A.O. ON APPLICATION OF THE SAME, THE INDEXED COST OF IMPROVEMENT CONIES TO RS.3,43,385/ - AS AGAINST RS.2,45,275/ - DETERMINED BY THE A.O. THE AD DITION OF RS.98,110/ - IS DELETED AND RS.88,570/ - IS CONFIRMED. GROUND NO. 2 OF THE APPEAL IS PARTLY ALLOWED. 9. WE HAVE HEARD THE PARTIES. ADMITTEDLY THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT AND NO OTHER EVIDENCE IS FILED. WE HAVE PERUSED THE FINDING GIVEN BY THE LD. CIT(A), IN OUR OPINION NO INTERFERENCE IS CALLED FOR. WE, ACCORDINGLY, SUSTAIN THE ADDITION. IN THE RESULT, THE GROUND NO. 3 IS DISMISSED. 10. GROUND NO. 4 IS IN RESPECT OF THE CLAIM OF EXEMPTION/DEDUCTION U/S. 54F. 11. WE H AVE HEARD THE PARTIES. IT APPEARS THAT IN THE ASSESSMENT PROCEEDINGS THE ASSESSEE DID NOT MAKE ANY CLAIM BUT IN THE APPELLATE PROCEEDINGS THE ASSESSEE MADE THE CLAIM THAT THE SALE PROCEEDS OF RS.4,50,000/ - ON SALE OF PLOTS ARE UTILIZED FOR THE CONSTRUCTIO N OF THE RESIDENTIAL HOUSE AND HENCE, THE BENEFIT OF SEC. 54F MAY BE GIVEN. THE 7 ITA NO. 609/PN/2011, MR. NASIR MOHAMMADSAHEB SHAIKH, LATUR LD. CIT(A) REJECTED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAS NOT MADE THE SAID CLAIM IN THE RETURN OF INCOME FOR THE A.Y. 2005 - 06 NOR EVEN AT THE TIME OF A SSESSMENT PROCEEDINGS. IN OUR OPINION, THE ASSESSEE CAN RAISE THE LEGAL CLAIM AT ANY STAGE OF THE APPELLATE PROCEEDINGS. THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LTD. VS. CIT, 284 ITR 323 (SC) IS ONLY APPLICABLE TO THE ASSES SMENT PROCEEDINGS. THE TRIBUNAL IS HAVING VERY MUCH POWER TO ADMIT THE CLAIM OF THE ASSESSEE AND DECIDE. WE, ACCORDINGLY, REMIT THE ISSUE OF EXEMPTION U/S. 54F TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION. ACCORDINGLY, GROUND NO. 4 IS ALLOWED F OR THE STATISTICAL PURPOSES. NEEDLESS TO SAY THE ASSESSING OFFICER SHOULD GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE PRINCIPLES OF NATURAL JUSTICE. GROUND NO. 5 IS ONLY CONSEQUENTIAL. 12. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 30 - 0 4 - 201 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 30 TH APRIL, 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) , AURANGABAD 4 THE CIT, AURANGABAD 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE