Waman Vitthal Dabetwar, Latur V. Income-tax Officer,

ITA 644/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1640 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Unexplained investment
• Section: 144

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO.644/PN/2016 ' ' / ASSESSMENT YEAR : 2006-07 SHRI WAMAN VITTHAL DABETWAR, MAULI NIWAS, SHRI NAGAR, MIDC ROAD, LATUR, TALUQ LATUR, DIST.LATUR-413531 . / APPELLANT PAN: AAWPD9989G VS. THE INCOME TAX OFFICER, WARD 3(3), LATUR . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI HITENDRA NINAWE DATE OF HEARING : 30.06.2016 / DATE OF PRONOUNCEMENT: 30.06.2016 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-, AURANGABAD, DATED 4.01.2016 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST ORDER PASSED UNDER SECTION 144 OF THE INCOME-TAX AC T, 1961 (IN SHORT THE ACT). 2. DESPITE SERVICE OF NOTICE ON TWO OCCASIONS, NONE APPEARED ON BEHALF OF THE ASSESSEE AND I PROCEEDED TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. ITA NO.644/PN/2016 WAMAN VITTHAL DABETWAR 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST ADDITION OF RS.4,17,760/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.69 OF THE INCOME TAX ACT. 4. BRIEFLY, THE FACTS OF THE CASE, ARE THE ASSESSEE WAS A GOVERNMENT EMPLOYEE WORKING WITH DEPARTMENT OF ANIMAL HUSBANDR Y, LATUR. THE PROCEEDINGS IN THE CASE OF ASSESSEE WERE INITIATED BY THE AO BY ISSUE OF NOTICE U/S.148 OF THE ACT. HOWEVER, THE ASSESSEE FAILED T O FURNISH THE RETURN OF INCOME. VARIOUS NOTICES WERE ISSUED TO THE ASSESSE E TO FURNISH THE INFORMATION AND THE COPY OF THE BANK STATEMENT ETC. ON THE BASI S OF INFORMATION ON RECORD, THE STATEMENT RECORDED U/S.131 BY THE ADIT(INVESTIG ATION), AURANGABAD ON 27-06-2011 AND INFORMATION FILED BY THE ASSESSEE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH AS PER THE AO WERE NO T COMPLETE, THE ASSESSMENT WAS COMPLETED U/S.144 OF THE ACT. THE A SSESSEE HAD PURCHASED PLOT OF LAND IN 2005 AND HAD CONSTRUCTED THE RESIDE NTIAL HOUSE AND THE SOURCE OF CONSTRUCTION WAS A HOUSING LOAN FROM STATE BANK OF INDIA, LATUR OF RS.7,50,000/- VIDE LETTER DATED 28-09-2012 FILED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS HE HAD INTIMATED T HE DETAILS OF INVESTMENT AS PURCHASE OF PLOT IN JUNE 2005 FOR RS.1,80,000/- OUT OF GPF WITHDRAWAL/SALARY AND HOUSE BUILDING CONSTRUCTION I N OCTOBER 2005 OF RS.9,25,000/- FROM LOAN OF RS.7 LAKHS AND RS.2,25,0 00/- OWN FUNDS. THE AO NOTED THAT THE ASSESSEE HAD PURCHASED THE SAID PLOT FOR RS.1,92,760/- INCLUDING STAMP DUTY AND REGISTRATION FEE ON WHICH HE HAD CON STRUCTED A RESIDENTIAL HOUSE TOWARDS WHICH THE TOTAL INVESTMENT OF CONSTRU CTION WAS RS.9,25,000/-. HENCE, THE TOTAL INVESTMENT IN IMMOVABLE PROPERTY W AS RS.11,17,760/-. 5. THE CLAIM OF THE ASSESSEE THAT HE HAD PURCHASED THE PLOT OUT OF THE GPF WITHDRAWAL WAS NOT ACCEPTED AS NO WITHDRAWAL WAS MA DE DURING F.Y. 2005-06. FURTHER, THE TOTAL INCOME OF THE ASSESSEE AFTER DED UCTION WAS RS.81,624/- FOR ITA NO.644/PN/2016 WAMAN VITTHAL DABETWAR 3 A.Y. 2006-07 AS PER THE COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FOR A.Y. 2006-07 AND THE SAME WAS HELD TO BE NOT SUFFICIENT TO SHOW THE INVESTMENT IN PLOT AFTER HOUSEHOLD EXPENSES. 6. WITH REGARD TO THE INVESTMENT OF RS.9,50,000/- I N CONSTRUCTION OF THE SAID BUILDING, SOURCE WAS EXPLAINED THAT LOAN OF RS.7 LA KHS WAS TAKEN BY THE ASSESSEE AND THE BALANCE WAS OUT OF HIS SAVINGS. A S PER THE LOAN SANCTION LETTER OF STATE BANK OF INDIA DATED 29-08-2005 A SU M OF RS.7 LAKHS WAS SANCTIONED TO THE ASSESSEE WHICH WAS ACCEPTED BY TH E AO. HOWEVER, THE BALANCE INVESTMENT OF RS.2,25,000/- OUT OF PERSONAL SAVINGS WAS NOT ACCEPTED AND AN ADDITION OF RS.4,17,760/-, I.E. RS.1,92,760 + RS.2,25,000/- WAS MADE IN THE HANDS OF THE ASSESSEE. 7. BEFORE THE CIT(A) THE ASSESSEE REITERATED ITS ST AND. THE CIT(A) HAS TIME AND AGAIN POINTED OUT THAT THE ASSESSEE HAS NO T FURNISHED THE RETURN OF INCOME EVEN IN RESPONSE TO NOTICE U/S.148 OF THE AC T AND THE ASSESSMENT WAS COMPLETED U/S.144 OF THE ACT. THE ASSESSEE FURNISH ED THE COPIES OF STATEMENT OF GPF, THE DETAILS OF WHICH ARE NOTED IN PARA 8 OF THE APPELLATE ORDER BUT THE SUBMISSIONS OF THE ASSESSEE WERE NOT ACCEPTED SINCE THE ASSESSEE HAD FAILED TO FURNISH ANY CASH FLOW AND ALSO THE GPF WITHDRAWA LS WERE IN THE MONTH OF MARCH 2002 AND 2003 WHEREAS THE PURCHASE WAS MADE I N THE FINANCIAL YEAR 2005-06. THE CONTENTION OF THE ASSESSEE THAT THE C ONSTRUCTION ACTIVITY WAS SPREAD OVER TILL THE YEAR 2009-10 ALSO WAS NOT ACCE PTED AND THE ADDITION OF RS.4,17,760/- WAS UPHELD IN THE CASE OF THE ASSESSE E. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE POINTED OUT THAT WHERE THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF INVESTMENT, THEN THE ADDITION IN THE HANDS OF THE ASSESSEE IS WARRANTED. ITA NO.644/PN/2016 WAMAN VITTHAL DABETWAR 4 9. ON THE PERUSAL OF THE RECORD, I.E. ASSESSMENT OR DER, THE SUBMISSIONS OF THE ASSESSEE AND THE APPELLATE ORDER PASSED BY THE CIT(A), THE ISSUE WHICH ARISE IN THE PRESENT APPEAL IS IN RELATION TO THE I NVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF A RESIDENTIAL HOUSE . THE YEAR UNDER APPEAL IS A.Y. 2005-06 FOR WHICH CERTAIN INFORMATION WAS RECE IVED AND THE AO REOPENED THE ASSESSMENT U/S.148 OF THE ACT. IN THE INITIAL PARAS OF THE ASSESSMENT ORDER THE AO HAS TIME AND AGAIN POINTED OUT THAT THE ASSE SSEE HAD NOT COOPERATED AND HAD NOT FURNISHED THE RETURN OF INCOME. HOWEVE R, ON PAGE 2 OF THE ASSESSMENT ORDER WHILE COMMENTING UPON THE INVESTME NT TOWARDS PURCHASE OF PLOT AT RS.1,92,760/- THE AO REFERS TO THE COPY OF ACKNOWLEDGEMENT OF RETURN FOR A.Y. 2006-07 WHEREIN THE NET INCOME AFTER DEDUC TION WAS SHOWN AT RS.81,624/-. THE AO IN THIS REGARD COMMENTS THAT T HE SAME WAS NOT SUFFICIENT INCOME TO BE INVESTED IN THE PLOT AFTER HOUSEHOLD E XPENSES. THEREFORE, THE SOURCE OF INVESTMENT IN THE SAID PLOT WAS NOT ACCEP TED BY THE AO. THUS, IT IMPLIES THAT THE ASSESSEE HAD COOPERATED AND HAD FU RNISHED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND HIS TOT AL INCOME AFTER DEDUCTION WAS RS.81,624/-. 10. THE FIRST INVESTMENT MADE BY THE ASSESSEE WAS I N THE PLOT OF LAND FOR A SUM OF RS.1,80,000/- AND FURTHER STAMP DUTY AND OTH ER CHARGES TO THE EXTENT OF RS.12,760/-. THE ASSESSEE EXPLAINED IN THIS REGARD THAT HE HAS WITHDRAWN THE AMOUNT FROM HIS GPF ACCOUNT FOR MAKING INVESTMENT I N THE AFORESAID INVESTMENT. THE ASSESSEE BEFORE ME IS A SALARIED G OVT. EMPLOYEE AND HAS MADE AN INVESTMENT TO THE TUNE OF ONLY RS.1,80,000/ - FOR PURCHASE OF A PLOT OF LAND ON WHICH LATER HE HAS CONSTRUCTED THE BUILDING BY TAKING A LOAN FROM STATE BANK OF INDIA, LATUR AND FROM HIS SAVINGS. THE FIRS T ASPECT OF THE INVESTMENT IN PLOT OF LAND IS CLAIMED TO BE OUT OF THE GPF WITHDR AWALS WHEREIN THOUGH THE WITHDRAWALS WERE MADE IN THE MONTH OF MARCH 2002 AN D SEPTEMBER 2002, IT COULD NOT BE SAID THAT THE SAID FUNDS WERE NOT AVAI LABLE WITH HIM IN THE ABSENCE ITA NO.644/PN/2016 WAMAN VITTHAL DABETWAR 5 OF ANY INVESTMENT BEING MADE BY HIM IN ANY OTHER AS SET. THE ASSESSEE BEING A SMALL TIME SALARIED EMPLOYEE WOULD TAKE ARE OF AL L HIS FINANCES AND IT CANNOT BE SAID THAT THE SAID AMOUNT WITHDRAWN FROM HIS GPF ACCOUNT HAS BEEN SPENT ON THE HOUSEHOLD EXPENSES, IN THE ABSENCE OF ANY EV IDENCE TO THE CONTRARY. ACCORDINGLY, THE CONTENTION OF THE ASSESSEE THAT TH E AMOUNT WITHDRAWN FROM HIS GPF ACCOUNT, I.E. RS. 1 LAKH IN MARCH 2002 AND RS.5 8,750/- IN SEPTEMBER 2002 WAS AVAILABLE FOR MAKING THE INVESTMENT ALONGWITH O THER SAVINGS IN THE PLOT OF LAND IN JUNE 2005, MERITS TO BE ACCEPTED. 11. FURTHER, THE TOTAL INVESTMENT IN THE CONSTRUCTI ON OF THE BUILDING ON THE SAID PLOT OF LAND IS RS.9,25,000/-, WHICH IS SOURCE D OUT OF LOAN RECEIVED FROM STATE BANK OF INDIA, LATUR WHICH HAS BEEN ACCEPTED BY THE AO. THE ONLY OBJECTION IS THE BALANCE INVESTMENT OF RS.2,25,000/ - WHICH THE ASSESSEE CLAIMED TO BE FROM HIS OWN SAVINGS. THE ASSESSEE H AS MADE INVESTMENT FOR PURCHASE OF ONE RESIDENTIAL HOUSE FOR HIS FAMILY AN D IT IS AN ACCEPTED FACT THAT ALL THE SAVINGS AVAILABLE WITH PERSON ARE UTILISED FOR SUCH INVESTMENTS. LOOKING AT THE SMALLNESS OF THE ISSUE AND THE TOTALITY OF T HE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ASSESSEE BEING A GOVERNMENT SERVAN T, THERE IS NO MERIT IN REJECTING THE CLAIM OF THE ASSESSEE THAT HE HAD MAD E THE BALANCE INVESTMENT OUT OF HIS SAVINGS. ACCORDINGLY, I DIRECT THE AO T O DELETE THE ADDITION OF RS.4,17,760/-. GROUNDS OF APPEAL RAISED BY THE ASS ESSEE ARE ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-06-2016. S SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE, 2016 . SATISH ITA NO.644/PN/2016 WAMAN VITTHAL DABETWAR 6 $ %'( )( / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ' () THE CIT(A)- 2, AURANGABAD ' THE CIT- 2, AURANGABAD % ((), ), , - / DR SMC, ITAT, PUNE; 0 / GUARD FILE. / BY ORDER % ( // TRUE COPY // 23 ( ) / SR. PRIVATE SECRETARY ) , ITAT, PUNE