Ramesh Gordhan Hirani, JAMNAGAR V. The Income Tax Officer, Ward-2(3), RAJKOT-GUJARAT

ITA 64/RJT/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8864 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K L SOLANKI
• Keywords: Retraction

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT , !'# $,%!& BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER #./ I.T.A. NO.64/RJT/2017 ( / ASSESSMENT YEAR : 2007-08) RAMESH GORDHAN HIRANI MATRU CHHAYA 10-BHAGIRATH SOCIETY NR.MARKETING YARD, RAJKOT / VS. THE INCOME TAX OFFICER WARD-2(3) RAJKOT !* # ./ # ./ PAN/GIR NO. : ABQPH 7476 N ( *, / APPELLANT ) .. ( -*, / RESPONDENT ) *,. / APPELLANT BY : SHRI CHETAN AGARWAL, AR -*,/. / RESPONDENT BY : SHRI K.L. SOLANKI, DR 01/2 / DATE OF HEARING 16/03/2018 34 /2 / DATE OF PRONOUNCEMENT 20/ 03/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANC E OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISS IONER OF INCOME TAX(APPEALS)-2, RAJKOT [CIT(A) IN SHORT] DATED 20/ 01/2017 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 ITA NO.64 /RJT/ 2017 RAMESH GORDHAN HIRANI VS. ITO ASST.YEAR 2007-08 - 2 - (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 20/01 /2017 RELEVANT TO ASSESSMENT YEAR (AY) 2007-08. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE REA DS AS UNDER:- HON.CIT(A) ERRED IN LAW AS WELL AS ON FACT IN CONFI RMING THE ADDITION OF RS.1,41,84,500/- BEING AMOUNT COLLECTED FROM THE PROSPECTIVE BUYERS ON BEHALF OF THE OWNERS AS A COM MISSION AGENT/BROKER THOUGH THE SIMILAR ADDITION WAS DELETE D BY HON.ITAT, RAJKOT BENCH IN EARLIER ASSESSMENT YEAR. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LD.A R FOR THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF TRIBUNAL IN ASS ESSEES OWN CASE IN ITA NO.582/RJT/2012 & ORS. RELEVANT TO AY 2006-07, ORDER DATED 10/01/2014. THE LD.AR ACCORDINGLY SUBMITTED THAT THE ISSUE BEING COVERED DOES NOT REQUIRE ANY SEPARATE DELIBERATION. 4. THE LD.DR RELIED UPON THE ORDER OF THE CIT(A). 5. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND SUBMISSIONS MADE IN THIS REGARD. AS POINTED OUT ON BEHALF OF THE ASSESSEE, THE CIT(A) BIFURCATED THE ADDITIONS ON AC COUNT OF OWN-MONEY FROM VARIOUS PROSPECTIVE BUYERS ON SALE OF LAND. T HE CIT(A) BIFURCATED THE RECEIPT BETWEEN AY 2006-07 & 2007-08 AT RS.73,2 7,500/- AND RS.1,41,84,500/- RESPECTIVELY. WE FIND THAT THAT B ASED ON THE IDENTICAL ITA NO.64 /RJT/ 2017 RAMESH GORDHAN HIRANI VS. ITO ASST.YEAR 2007-08 - 3 - FACTS AND BASED ON THE SAME MATERIAL, THE COORDINAT E BENCH HAS TAKEN A VIEW IN FAVOUR OF ASSESSEE WITH REFERENCE TO AY 200 6-07. THE RELEVANT OPERATIVE PARA CONCERNING AY 2006-07 READS AS UNDER :- 6. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERI AL ON RECORD. THE LD.CIT(A) FOUND THAT THE ASSESSEE WAS PROVIDED WITH COPY OF STATEMENT ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE REFORE, HE HAD NO EARLIER OPPORTUNITY TO RETRACT HIS STATEMENT TAKEN DURING THE SURVEY AND HE DID NOT KNOW AS TO HOW THE STATEMENT WAS TO BE USED AGAINST HIM ON ANY EARLIER OCCASION. HE, THEREFORE, FOUND NO FAULT IN THE TIMI NG OF RETRACTION OF STATEMENT BY THE ASSESSEE. THE ISSUE OF RETRACTION OF STATEME NT HAS NOT BEEN ASSAILED BY THE REVENUE IN APPEAL. THE LD. CIT(A) HAS FOUND THA T THE DIARY SHOWS THAT THE ASSESSEE HAS COLLECTED SALE PROCEEDS FROM THE PROSP ECTIVE BUYERS OF THE PLOTS OF LAND AND THEREAFTER SUBSEQUENTLY PASSED ON PART OF COLLECTIONS TO THE OWNERS OF THE LAND, THIS FINDING OF FACT HAS BEEN ADMITTED BY THE REVENUE AND NO CONTRARY MATERIAL IN THIS REGARD HAS BEEN LAID ON R ECORD NOR BROUGHT TO OUR NOTICE. THE POCKET DIARY FOUND DURING THE COURSE O F SURVEY AND IMPOUNDED BY THE INCOME TAX DEPARTMENT IS NOT A SYSTEMATIC CASH ACCOUNT OF THE ASSESSEE. THERE IS NO PLEA BY REVENUE THAT THE POCKET DIARY F OUND DURING SURVEY IS A CASH BOOK MAINTAINED BY ASSESSEE IN REGULAR COURSE OF BU SINESS NOR THAT IT GIVES A CORRECT AND RELIABLE CASH ACCOUNT OF BUSINESS OF AS SESSEE. THE LD. CIT(A) HIMSELF HAS ALSO FOUND THAT THE RECEIPTS AND PAYMEN TS PERTAIN TO TWO DIFFERENT YEARS I.E. F.Y. 2005-06 RELEVANT TO A.Y. 2006-07 UN DER APPEAL AND F.Y 2006-07 RELEVANT TO A.Y 2007-08, WHICH IS NOT THE YEAR UNDE R APPEAL. OUT OF THE TOTAL RECEIPTS, AN AMOUNT OF RS.1,41,84,500/- IS FOUND ATTRIBUTABLE TO THE SUBSEQUENT YEAR. THE LD. CIT(A) FOUND THAT ONLY AN AMOUNT OF RS. 73,27,500/- IS THE EXCESS OF THE RECEIPTS OVER PAYMENTS MADE BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AND THEREAFTER HE WORKED OUT TH E SURPLUS OF SALE OVER PURCHASE ON THE BASIS OF THESE TWO YEARS SURPLUS ON PROPORTIONATE BASIS AND TREATED RS. 51,04,080/- AS INCOME FOR THE YEAR UNDE R CONSIDERATION. SUCH A BASIS ADOPTED BY THE LD. CIT(A) DO NOT HAVE ANY RAT IONAL NOR IS ACTUAL EARNING OF INCOME BY THE ASSESSEE. EVEN THE PLOT-WISE CALCU LATIONS OF RECEIPTS AND PAYMENTS HAS NOT BEEN MADE BY HIM. IT HAS NOT BEEN BROUGHT ON RECORD AS TO HOW THE SURPLUS ARISING ON OTHERS LAND COULD BE TRE ATED AS INCOME AS THE TRANSACTION IN THE POCKET DIARY WERE BY ITSELF NOT A SYSTEMATIC CASH ACCOUNT OF ITA NO.64 /RJT/ 2017 RAMESH GORDHAN HIRANI VS. ITO ASST.YEAR 2007-08 - 4 - RECEIPT AND PAYMENT OF THE APPELLANT. SUCH SURPLUS WORKED OUT, THEREFORE, DID NOT CONSTITUTE INCOME OF THE ASSESSEE, MORE PARTICU LARLY WHEN THE LD. CIT(A) NOR THE REVENUE AUTHORITIES BROUGHT ON RECORD ANY M ATERIAL TO SHOW THAT THE TRANSACTION OF SALE AND PURCHASE STAND CONCLUDED DU RING THE YEAR UNDER CONSIDERATION. ADMITTEDLY WHEN THE ADVANCES ONLY HA VE BEEN RECEIVED AGAINST SALES, THE SAME DO NOT CONSTITUTE INCOME OF THE ASS ESSEE AS HAS ALSO BEEN HELD BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. VINAY PRATAP SINGH (2012) 346 ITR 83 (RAJ.). ON THE OTHER HAND , THE ASSESSEE 'HAS DEPOSED IN HIS AFFIDAVIT THAT HE WAS ACTING ONLY AS A BROKE R AND CLAIMED TO HAVE EARNED BROKERAGE INCOME THEREFROM. THIS AFFIDAVIT HAS NOT. BEEN REJECTED NOR ASSESSEE WAS CALLED UPON TO SUPPORT THIS CLAIM. REAL INCOME ON SALE AND PURCHASE OF PLOTS AS HAS ALSO BEEN STATED BY THE ASSESSEE-APPEL LANT, BELONGS TO SOME OTHER SONS. THIS FACT, THEREFORE, SHALL BE FOUND FOR BRIN GING THE REAL INCOME TO IX IN THE HANDS OF THE PERSONS TO WHOM IT REALLY BELONGS AS THE APPELLANT IN HIS AFFIDAVIT HAS IDENTIFIED THE OWNER AND NAMES OF THE BUYERS, ARE BORNE OUT IN THE IMPOUNDED DIARY. IN THE PECULIAR FACTS AND WHEN THE TRANSACTION OF SALE AND PURCHASE OF PLOTS IS ALSO NOT FOUND CONCLUDED DURIN G THE YEAR UNDER CONSIDERATION, NO PROFIT THEREON CAN BE SAID TO HAV E ACCRUED OR ARISEN TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE D EPARTMENT SHALL BE AT LIBERTY TO BRING TO TAX ANY PROFIT OR INCOME ON ACC OUNT OF SUCH TRANSACTIONS ONLY WHEN THEY ARE FOUND CONCLUDED. THE ADDITION SU STAINED ON IRRELEVANT CONSIDERATION FOR RS.51,04,080/-, IS THEREFORE, DIR ECTED TO BE DELETED AND AS A CONSEQUENCE, THE GROUND RAISED IN APPEAL BY REVENUE BEING DEVOID OF ANY MERIT, STANDS REJECTED AND ASSESSEE'S GROUND NO. 2 IN APPEAL STANDS ALLOWED. 6. IN PARITY OF FACTS IN THE TWO ASSESSMENT YEARS E XCEPT FOR BIFURCATION OF MONEY, WE RESPECTFULLY FOLLOW THE DECISION ARRIV ED AT BY THE COORDINATE BENCH FOR THE AY 2006-07 AND ACCORDINGLY FIND MERIT IN THE GRIEVANCE RAISED BY THE ASSESSEE. ITA NO.64 /RJT/ 2017 RAMESH GORDHAN HIRANI VS. ITO ASST.YEAR 2007-08 - 5 - 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 20 / 0 3/ /201 8 SD/- SD/- ($) ( ) %! ! ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/ 03 /2018 ..0,.%0../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -*, / THE RESPONDENT. 3. #8# 2 92 / CONCERNED CIT 4. 92 ( ) / THE CIT(A)-2, RAJKOT 5. ;<=%2%0 , , /DR,ITAT,RAJKOT 6. =H1 / GUARD FILE. / BY ORDER, -;2%2 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %&, / ITAT, RAJKOT 1. DATE OF DICTATION .. 19.3.18 (DICTATION-PAD 5- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 20.3.18 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 20.3.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.3.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER