ITO 25(3)(3), MUMBAI V. PURSHOTTAM MAVJII BHATIA, MUMBAI

ITA 6625/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2529 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENADR
• Keywords: Capital asset
• Section: 143(3); 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.6625/MUM/2012 ASSESSMENT YEAR- 2009-10 INCOME TAX OFFICER-25(3)(3), ROOM NO.304, 3 RD FLOOR, BLDG. NO. C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 / VS. SHRI PURSHOTTAM MAVJI BHATIA, B-831, GOVARDHAN NAGAR, OPP. POISAR GYMKHANA, NEAR RAGHULILA MALL, KANDIVALI (WEST), MUMBAI-400067 ( / REVENUE) ( ! /ASSESSEE) PAN. NO. AHZPB0996J / REVENUE BY SHRI O.P. MEENA-DR ! / ASSESSEE BY SHRI VIMAL PUNMIYA ' # $ ! % / DATE OF HEARING : 17/11/2015 $ ! % / DATE OF ORDER: 23/11/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 28/08/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. GROUNDS NO.1 & 3 RAISED BY THE DEPARTMENT IS THAT T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW A ND ON FACTS BY CONCLUDING THAT THE SAID FIRM HAS NOT FILE D ANY VALID SHRI PURSHOTTAM MAVJI BHATIA ITA NO.6625/MUM/2012 2 RETURN OF INCOME AND ALSO NOT DISCLOSED THE SALE OF PROPERTY AND FURTHER THE ASSESSEE HAS NOT SOUGHT ANY SHARE I NCOME FROM THE FIRM IN HIS RETURN OF INCOME AND CONSEQUEN T DELETING THE ADDITION OF SHORT TERM CAPITAL GAIN ON SALE OF CAPITAL ASSET. THE LD. DR ADVANCED ARGUMENTS WHICH IS IDENT ICAL TO THE GROUND RAISED, WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY CONTENDING THAT THE FIRM PAID THE TAXES FOR WHICH O UR ATTENTION WAS INVITED TO PAGE 195 OF THE PAPER BOOK . OUR ATTENTION WAS FURTHER INVITED TO PAGE 196 OF THE PA PER BOOK AND COPY OF THE AGREEMENT (PAGES 169 TO 190) OF THE PAPER BOOK BY EXPLAINING THAT THE PREMISES WAS IN THE NAM E OF THE FIRM AND THE ASSESSEE IS MERELY A PARTNER IN THE SA ID FIRM. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL DECLARED INC OME OF RS.75,110/- IN HIS RETURN WHICH WAS PROCESSED U/S 1 43(1) OF THE ACT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS.1,20,5 0,350/-. 2.1. THE AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , WHEREIN THE SUBMISSION DATED 10/05/2012 (REPRODUCED AT PAGE 3 ONWARDS OF THE IMPUGNED ORDER) WERE CONSIDERED AND FOUND THAT THE ASSESSEE WAS A PARTNER IN A PARTNERSHIP FI RM NAMELY M/S LAXMI IRON & STEEL MANUFACTURING COMPANY. THE F IRM SOLD ONE OF ITS ASSET (OFFICE PREMISES) WHICH WAS H ELD AS SHRI PURSHOTTAM MAVJI BHATIA ITA NO.6625/MUM/2012 3 INVESTMENT. OUT OF THE SALE PROCEEDS, THE ASSESSEE FIRM PAID RS.22 LAKH TO THE ASSESSEE WHO IS THE ONE OF THE PA RTNERS OF THE FIRM. OUT OF RS.22 LAKH, RS.13,37,600/- WAS US ED TOWARDS PAYMENT FOR PURCHASE OF NEW FLAT AND OTHER CHARGES, SUCH AS STAMP DUTY AND REGISTRATION. IN THE CONSOLI DATED BALANCE SHEET, THE TOTAL COST OF FLAT WAS SHOWN AT RS.33,27,040/-. THE LD. ASSESSING OFFICER MADE ADD ITION OF RS.15,68,040/- ON ACCOUNT OF PURCHASE OF FLAT (RS.3 1 LAKH + STAMP DUTY OF RS.1,37,600/- + REGISTRATION CHARGES OF RS.30,400/- AND HOUSING LOAN OF RS.17 LAKH). THE SA RSWAT BANK MADE PAYMENT OF RS.19 LAKH DIRECTLY TO THE VEN DOR (I.E. RS.17 LAKH OUT OF HOUSING LOAN AND RS.2 LAKH TAKEN FROM ASSESSEE WHICH WAS PAID FROM THE BUSINESS ACCOUNT). THE BALANCE AMOUNT OF RS.12 LAKH WAS PAID ON 30/05/2008 TO THE VENDOR FROM THE PERSONAL ACCOUNT WITH SARSWAT B ANK ACCOUNT. THE TOTALITY OF FACTS CLEARLY INDICATES, A S IS OOZING OUT FROM THE IMPUGNED ORDER THAT THE ASSESSEE PURCH ASED A FLAT FOR CONSIDERATION OF RS.33,37,040/- AFTER TAKI NG LOAN FROM SARSWAT BANK AND THE DETAILS OF PAYMENT WHICH FORM PART OF PURCHASE AGREEMENT ALONG WITH CHEQUE NO. 197258 DAT ED 30/05/2008 WERE FURNISHED BEFORE THE ASSESSING OFFI CER. THE FACTUM OF OBTAINING HOUSING LOAN WAS ALSO ACCEPTED BY THE ASSESSING OFFICER. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SOUGHT REMAND REPORT FROM THE ASSESSING O FFICER, WHO SUBMITTED THE REPORT ON 18/07/2012. THE REMAND REPORT WAS PROVIDED TO THE ASSESSEE TO WHOM THE ASSESSEE F ILED WRITTEN SUBMISSIONS. THE STAND OF THE ASSESSEE IS T HAT SARSWAT BANK MADE PAYMENT OF RS.19 LAKH DIRECTLY TO THE SHRI PURSHOTTAM MAVJI BHATIA ITA NO.6625/MUM/2012 4 VENDOR, MEANING THEREBY, THE PAYMENTS ARE THROUGH B ANKING CHANNEL. IT CAN BE CONCLUDED THAT PARTNERSHIP FIRM IS A SEPARATE ENTITY THAT OF ITS PARTNERS UNDER THE ACT . SINCE, THE FIRM PAID THE CAPITAL GAIN TAX AROSE FROM THE SALE OF SUCH LAND AND ALREADY SUFFERED TAX, IT CANNOT BE ADDED AGAIN, THUS, WE FIND NO INFIRMITY IN THE CONCLUSION ARRIVED AT IN T HE IMPUGNED ORDER, MORE SPECIFICALLY WHEN THE ASSESSEE FURNISHE D THE PAYMENT RECEIPT, THEREFORE, THE PARTNERS ARE NOT LI ABLE FOR THE TAX LIABILITY OF THE FIRM. 3 THE NEXT GROUND RAISED IN THIS APPEAL PERTAINS TO DELETING THE ADDITION MADE U/S 68 OF THE INCOME TAX ACT, 196 1 (HEREINAFTER THE ACT) AS THE ASSESSEE FAILED TO PRO VE THE IDENTITY OF THE CREDITORS, AND THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTIONS AS THE ASSESSE E COULD NOT PRODUCE THE CREDITORS FOR VERIFICATION. 3.1 DURING HEARING OF THIS APPEAL, THE LD. DR, SHR I O. P. MEENA, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL T O THE GROUND RAISED. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIMAL PUNMIYA, DEFENDED THE CONCLUSI ON ARRIVED AT IN THE IMPUGNED ORDER. 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. ASSESSING OFFICER MADE ADDITION OF RS.6,30,000/- ON ACCOUNT O F CASH LOANS ON THE GROUND THAT THE ASSESSEE DID NOT DISCL OSE SUCH CASH LOAN TO THE DEPARTMENT. HOWEVER, THE ASSESSEE FURNISHED THE LOAN CONFIRMATION IN RESPECT OF LOANS AND SHRI PURSHOTTAM MAVJI BHATIA ITA NO.6625/MUM/2012 5 REPAYMENT OF THESE LOANS TOTALING RS.6,30,000/-. IT WAS NOT DISPUTED BY THE REVENUE THAT DETAILS OF PARTIES, TH EIR ADDRESSES, ACCOUNTS CONFIRMATION, PAN NUMBERS, SOUR CE OF LOAN AND PROOF OF PAYMENT OF THE SAME WERE FURNISHE D, THUS, WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 17/11/2015. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ' # MUMBAI; ' DATED : 23/11/2015 F| P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / ' 0! ( )* ) / THE CIT, MUMBAI. 4. / / ' 0! / CIT(A)- , MUMBAI 5. 23 -! , / )*% ) 4 , ' # / DR, ITAT, MUMBAI 6. 5 6# / GUARD FILE. / BY ORDER, .2*! -! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ' # / ITAT, MUMBAI.