CHEVELEY LAND DEVELOPERSN P. LTD, MUMBAI V. ITO 5(1)(3), MUMBAI

ITA 6122/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75303 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR P DANIEL
• Keywords: Unexplained investment
• Section: 69

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL C CC C BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.6122/MUM/2011 6122/MUM/2011 6122/MUM/2011 6122/MUM/2011 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2008-09) CHEVELEY LAND DEVELOPERS PRIVATE LIMITED, A-5, TARDEO ROAD, TARDEO, MUMBAI-400034 % % % % / VS. INCOME TAX OFFICER-5(1)(3), AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 #' ! ./ ( ./ PAN/GIR NO. :AAACC1869N ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) $% $%$% $% ,- ,- ,- ,- . / . / . / . / /ASSESSEE BY : DR. P. DANIEL # # # # . / . / . / . / / REVENUE BY : SHRI RAVI PRAKASH % % % % . .. . -! -! -! -! / DATE OF HEARING : 16 TH JANUARY 2014 01& 01& 01& 01& . .. .-! -! -! -! /DATE OF PRONOUNCEMENT: 24 TH JANUARY 2014 ' 2 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 5.7.2011 OF COMMISSIONER OF INCOME TAX(APPEALS) FOR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL HOWEVER, THE ONLY ISSUE ARISES FOR OUR CONSIDERATION AND ADJUDIC ATION IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ` 4,21,000/- AS UNEXPLAINED INVESTM ENT U/S 69 OF THE INCOME TAX ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O NOTED FROM THE DOCUMENT SUBMITTED BY THE ASSESSEE THAT THE ASS ESSEE HAS PURCHASED ITA NO.6122/M/2011 CHEVELEY LAND DEVELOPERS PVT. LTD. 2 LAND BEARING SURVEY NO. 26/5A/1(5R) FOR A SUM OF ` 20,00,000/-. THE A.O FOUND FROM THE ANNEXURE THAT APART FROM THE PURCHAS ED CONSIDERATION THE ASSESSEE HAS ALSO PAID A SUM OF ` 4,21,000/- IN CAS H. THUS, THE A.O OBSERVED THAT THE AMOUNT OF ` 20,00,000/- SHOWN IN THE DOCUMENT HAS BEEN PAID BY CHEQUE AND THE PAYMENT OF ` 4,21,000/- WAS NOT FOUND IN THE BOOKS. ACCORDINGLY, THE A.O MADE AN ADDITION OF ` 4,21,000/- AS AN UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT . ON APPEAL, THE ASSESSEE HAS SUBMITTED BEFORE THE CIT(A) THAT THE S AID PAYMENT OF ` 4,21,000/- WAS PAID FOR CONSTRUCTION OF COMPOUND WA LL, FENCING WORK, LEVELLING WORK ETC. IT WAS ALSO CONTENDED THAT THIS PAYMENT WAS MADE TO THE CONTRACTOR AND WAS DULY SUPPORTED BY VOUCHERS A ND BILLS AND ALSO RECORDED IN THE BOOKS OF ACCOUNT. THE CIT(A) DID NO T ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT THE PLOT IN QUESTION WAS PURCHASED FOR ` 24,21,000/- BUT THE PURCHASED PRICE SHOWN IN THE BO OKS IS ONLY 20,00,000/-. THE CIT(A) HAS ALSO TURNED DOWN THE EX PLANATION OF THE ASSESSEE THAT THE COMPOUND WALL WAS CONSTRUCTED AS PER THE MOU EXECUTED BETWEEN THE PARTIES. 4. BEFORE US THE LD. A.R OF THE ASSESSEE HAS NARRAT ED THE RELEVANT FACTS REGARDING THE MOU DATED 16.3.2007 WITH SHRI P. TULS IDAS WITH RESPECT TO THE ABOVE PROPERTY AND SUBMITTED THAT AS PER MOU TH E TOTAL CONSIDERATION WAS FIXED AT ` 24,21,000/- WHICH WAS PAYABLE AT ` 2 0,00,000/- FOR PLOT AND ` 4,21,000/- FOR COMPOUND WALL AND OTHER LEVELLING WORK. THE ASSESSEE MADE THE PAYMENT OF THE COMPOUND WALL AND OTHER WOR K TO THE TUNE OF ` 4,42,795/- TO THE CONTRACTOR. THE LD. A.R HAS FURTH ER SUBMITTED THAT THE ITA NO.6122/M/2011 CHEVELEY LAND DEVELOPERS PVT. LTD. 3 SAID EXPENDITURE HAS BEEN DULY RECORDED IN THE BOOK S OF ACCOUNT HOWEVER, THE A.O HAS DENIED THE SAME ON THE GROUND THAT THE EXPENSES DEBITED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT MAY BE IN RESP ECT OF SOME OTHER PLOT AS THE ASSESSEE OWNS A NUMBER OF PLOTS IN THE SAME AREA. THUS, THE ADDITION WAS MADE BY THE A.O ON THE BASIS OF PRESUM PTION AND SURMISES BY IGNORING THE RELEVANT EVIDENCE OF THE REGISTERED DOCUMENT BEING DEVELOPMENT AGREEMENT DATED 15.12.2007 AS WELL AS T HE MOU AND PAYMENT VOUCHERS/BILLS. THE LD. A.R HAS FURTHER SUB MITTED THAT THE ASSESSEE HAS DULY EXPLAINED WITH EVIDENTARY DOCUMEN TS THAT THE PAYMENT OF ` 4,21,000/- BEING MADE TOWARDS THE CONSTRUCTION OF BOUNDARY WALL THEREFORE, IN THE ABSENCE OF CONTRARY RECORD OR FIN DING, THE ADDITION IS NOT JUSTIFIED. 5. ON THE OTHER HAND, THE LD. D.R HAS SUBMITTED THA T THE BILL PRODUCED BY THE ASSESSEE IN RESPECT OF ERECTION OF COMPOUND WALL IS FOR THE LAND BEARING UNDRI 26 AS SUB-DIVIDED INTO SEVERAL PLOT A ND IT IS POSSIBLE THAT THESE EXPENSES DEBITED BY THE ASSESSEE MAY BE TOWAR DS THE COMPOUND WALL FOR SOME OTHER PLOT. FURTHER THE DOCUMENT DATE D 18.12.2007 FURNISHED BY THE ASSESSEE INDICATES GROSS VALUE OF LAND AT ` 24,21,000/- OUT OF WHICH ` 20,00,000/- WAS PAID BY CHEQUE AND B ALANCE WAS TO BE PAID IN CASH. THUS, IT IS CLEAR FROM THE DOCUMENT THAT T HE TOTAL PURCHASE CONSIDERATION OF THE LAND IN QUESTION WAS AGREED BE TWEEN THE PARTIES AT ` 24,21,000/-. HE HAS RELIED UPON THE ORDERS OF THE A UTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE CONTROVERSY REVOLVES AROUND THE DOCUMENT WHICH ITA NO.6122/M/2011 CHEVELEY LAND DEVELOPERS PVT. LTD. 4 IS ANNEXED TO THE AGREEMENT WHERE AS CALCULATION/WO RKING OF THE CONSIDERATION IS MADE WHICH COMES TO ` 24,21,000/-. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PAID ` 20,00,000/- THROUGH CH EQUE AND THE SAME HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT AS PURCHASED CONSIDERATION FOR THE PLOT OF LAND IN QUESTION. THE A.O RAISED QUESTI ON ABOUT THE PAYMENT OF ` 4,21,000/- IN CASH. THE ASSESSEE EXPLAINED BEFORE THE AUTHORITIES BELOW THAT THE SAID PAYMENT HAS BEEN MADE IN TERMS OF THE MOU DATED 16.3.2007 WHEREBY THE ASSESSEE HAS AGREED TO PAY ` 4,21,000/- TOWARDS CONSTRUCTION OF COMPOUND WALL. THE ASSESSEE PRODUCE D THE BILLS IN RESPECT OF CONSTRUCTION OF COMPOUND WALL AND ALSO EXPLAIN T HAT THE SAID EXPENDITURE HAS BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT. SINCE THE PURCHASE CONSIDERATION FOR THE PURCHASED OF PLOT HA S BEEN SHOWN AT ` 20,00,000/- IN THE REGISTERED AGREEMENT DATED 15.12 .2007 THEREFORE, THE A.O ASSUMED THAT THE PAYMENT OF ` 4,21,000/- IS PAR T OF THE PURCHASED CONSIDERATION OVER AND ABOVE ` 20,00,000/- AND NOT TOWARDS THE EXPENDITURE FOR CONSTRUCTION OF BOUNDARY WALL OF TH E PLOT IN QUESTION. THUS, THE ASSESSING OFFICER HAS SUSPECTED THE CORRE CTNESS OF THE EXPLANATION OF THE ASSESSEE THAT THE SAID PAYMENT O F ` 4,21,000/- IS FOR CONSTRUCTION OF BOUNDARY WALL BECAUSE THERE IS NO M ENTIONED ABOUT THE SAID PAYMENT IN THE AGREEMENT DATED 15.12.2007. 7. IT IS TO BE NOTED THAT THE AGREEMENT DATED 15.12 .2007 IS ONLY REGARDING THE PURCHASED TRANSACTION OF THE PLOT IN QUESTION WHEREAS THE MOU DATED 16.3.2007 HAS CLEARLY MENTIONED ABOUT THE CONSTRUCTION OF WALL. FURTHER THE ASSESSEE HAS PRODUCED THE BILLS O F THE EXPENDITURE AND ITA NO.6122/M/2011 CHEVELEY LAND DEVELOPERS PVT. LTD. 5 ALSO RECORDED THE EXPENDITURE IN THE BOOKS OF ACCOU NT WHICH WAS NOT DOUBTED BY THE A.O BUT THE A.O HAS SUSPECTED THAT T HE SAID EXPENDITURE MIGHT HAVE BEEN INCURRED IN RESPECT OF THE BOUNDARY WALL OF THE OTHER PLOT NOT THE PLOT IN QUESTION. THEREFORE, WE FIND THAT T HE EXPLANATION OF THE ASSESSEE HAS BEEN REJECTED BY THE A.O ON THE BASIS OF SUSPICION WITHOUT BRINGING ANY CONTRARY MATERIAL AND FINDING ON RECOR D. ONCE THE ASSESSEE HAS DISCHARGED ITS ONUS ABOUT THE PAYMENT OF ` 4,21 ,000/- BY PRODUCING MOU, BILLS AND VOUCHERS AS WELL AS THE BOOKS OF ACC OUNT REFLECTING THE SAID EXPENDITURE, IT WAS INCUMBENT UPON THE ASSESSING OF FICER TO CONDUCT A FURTHER INQUIRY IF THE SAID EXPLANATION AND EVIDENC E WAS NOT ACCEPTABLE. SINCE THE A.O HAS NOT CONDUCTED ANY INQUIRY TO PROV E THE EVIDENCE PRODUCED BY THE ASSESSEE AS FALSE OR BOGUS THEN IN THE ABSENCE OF ANY CONTRARY RECORD, MATERIAL OR FINDING THE ADDITION M ADE BY THE A.O ON THE BASIS OF PRESUMPTION AND SURMISES IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE ADDITION MADE U/S 69 OF THE INCOME TAX ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JANUARY 2014 SD/- SD/- ( . ) ! '# (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 24 TH JANUARY 2014 SUBODH ITA NO.6122/M/2011 CHEVELEY LAND DEVELOPERS PVT. LTD. 6 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI 1. DRAFT DICTATED ON 16 TH JANUARY 2014 DICT PAD PLACED IN THE ORG. FILE SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 17 TH JANUARY 2014 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.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 ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS