ITO, New Delhi V. Sh. Ramesh Kr. Bhagchandka, New Delhi

ITA 667/DEL/2012

• Counselvise Citation: 66720114 RSA 2012
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 16-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 08-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M B REDDY
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.667/DEL/2012 ASSESSMENT YEAR : 2005-06 ITO, RAMESH K. BHAGCHANDKA, WARD-31 (2), 5, IIND FLOOR, SAGAR APARTMENT, NEW DELHI. V. 6-TILAK MARG, NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAGPB AAGPB AAGPB AAGPB- -- -5062 5062 5062 5062- -- -R RR R APPELLANT BY : SHRI M.B. REDDY, CIT-DR. RESPONDENT BY : SHRI SANTOSH PATHAK, C.A. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE OR DER OF LD CIT(A) DATED 30.12.2011. THE GROUNDS OF APPEALS TAKEN BY THE REVENUE AS UNDER:- 1. WHETHER THE LD CIT(A) HAS ERRED IN DELETING THE ADDI TION OF ` .9,00,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME RECEIVED ON ALLEGED SALE OF FLAT. 2. WHETHER THE LD CIT(A) HAS ERRED IN DELETING THE ADDI TION OF ` .1,00,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT , 1961 . 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND AN Y/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEAR ING OF THE APPEAL. ITA NO667/DEL/2012 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THAT ASSESSEE HAD RECEIVED AN AMOUNT OF ` .9,51,000/- FROM ONE MR. AK VIDYASARIA OF CALCUTTA. DURING ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED TO BE AMOUNT REC EIVED ON ACCOUNT OF SALE OF FLAT OWNED BY THE ASSESSEE AT CALCUTT A. THE ASSESSEE WAS REQUIRED TO FURNISH COPY OF AGREEMENT TO SELL OR OTHER EVIDENCE TO PROVE THAT THE AMOUNT RECEIVED WAS ONLY TOWARDS SALE OF FLAT AND NOT OTHERWISE. THE ASSESSEE EXPLAINED THAT CONV EYANCE DEED WAS NOT YET EXECUTED BUT PHYSICAL POSSESSION OF THE FLAT HAS BEEN HANDED OVER. THE ASSESSING OFFICER HELD THAT THOUGH ASSESSE E IN WRITTEN SUBMISSIONS CLAIMED THAT ADDRESS & PAN NUMBERS WER E ENCLOSED BUT IN FACT, IT WAS NOT ENCLOSED. THEREFORE, IN THE ABSENCE OF DOCUMENTARY EVIDENCE THE ASSESSING OFFICER TREATED THE AMOUNT AS UNEXPLAINED CASH CREDIT U/S 68 AND MADE THE ADDITION THEREOF. THE ASSESSING OFFICER FURTHER MADE AN ADDITION OF ` ..1 LAKH WHICH WAS OUTSTANDING AS PART OF LOAN FROM M/S VIBGYOR MERCANTIL E (P) LTD.. THE ASSESSING OFFICER HELD THAT SINCE NO CONFIRMATION WAS FUR NISHED AND ASSESSEE WAS UNABLE TO JUSTIFY THE CREDITWORTHINESS OF LEND ER THEREFORE THE SAME WAS TREATED AS UNEXPLAINED CREDIT U/S 68 OF TH E ACT. 3. AGGRIEVED WITH THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE LD CIT(A) AND FURNISHED CERTAIN ADDITIONAL E VIDENCES WHICH THE LD CIT(A) ADMITTED AFTER OBTAINING REMAND REPORT FR OM THE ASSESSING OFFICER AND THEN DELETED THE ADDITIONS MADE BY THE A SSESSING OFFICER BY HOLDING AS UNDER:- A) REGARDING ADDITION OF A) REGARDING ADDITION OF A) REGARDING ADDITION OF A) REGARDING ADDITION OF ` ` ` ` .9,51,000/ .9,51,000/ .9,51,000/ .9,51,000/- -- -.: .:.: .: 3.3.1 ON MERITS, IT IS SEEN THAT THE APPELLANT HAD SUB MITTED ALL THE RELEVANT DETAILS REGARDING THE SALE OF THE FLAT D URING THE ASSESSMENT PROCEEDINGS LIKE THE NAME AND ADDRESS OF THE BU YER AND HIS PAN, THE DETAILS OF CHEQUES THROUGH WHICH THE AMOUNT ITA NO667/DEL/2012 3 WAS RECEIVED AND THE AMOUNTS THEREOF WITH DATES ETC. REGARDING THE SALE DEED, THE APPELLANT HAD EXPLAINED THAT THE BUYER HAD NOT GOT THE DEED REGISTERED BUT SINCE THE PHYSICAL POSSE SSION HAS BEEN HANDED OVER BY THE APPELLANT AND THE FULL VALU E OF CONSIDERATION HAD BEEN RECEIVED, THE TRANSACTION WAS TREATED AS SALE AND CAPITAL GAINS WAS CALCULATED ON THE SAME. DURI NG THE APPELLATE PROCEEDINGS FURTHER EVIDENCE IN THE FORM O F RECEIPT - CUM - AGREEMENT AND RECEIPT OF THE FINAL INSTALLMENT OF THE CONSIDERATION HAS BEEN FILED WHICH WAS SENT TO THE AO F OR VERIFICATION AND REPORT. THE AO HAS NOT MADE ANY ADV ERSE COMMENTS ABOUT THE VERACITY OF THESE DOCUMENTS BUT HAS ONLY MADE GENERAL OBSERVATIONS THAT ADDITIONAL EVIDENCE MA Y NOT BE ACCEPTED. SINCE THE APPELLANT HAD GIVEN THE DETAILS AS TO THE BUYER'S PAN, HIS BANK AND CHEQUE NUMBERS ETC., THE AO COULD HAVE MADE FURTHER INQUIRIES TO SATISFY HIMSELF ABOUT T HE GENUINENESS OF THE TRANSACTION, BUT THE SAME WAS NOT DON E. SINCE THE SALE DEED WAS NOT REGISTERED AS HAS ALSO BEEN REITERATED BY THE BUYER IN HIS AFFIDAVIT, THE APPELL ANT COULD NOT SUBMIT THE SAME FOR THE AO'S VERIFICATION. HOWEVER, TH E APPELLANT HAD SUBMITTED BEFORE THE AO THAT IN THE CASE OF HIS WI FE, WHO INCIDENTALLY WAS ALSO ASSESSED BY THE SAME AO, SHE ALSO WAS HAVING A FLAT IN THE SAME BUILDING IN KOLKATA AND SOL D THE SAME FOR RS.9.11 LAKH, A COPY OF THE SALE DEED DULY REGIST ERED WAS SUBMITTED IN HER CASE BEFORE THE SAME AO WHICH MAY BE CONSIDERED AS A COMPARABLE CASE FOR THE PURPOSES OF VERI FICATION OF THE SALE CONSIDERATION. THIS SUBMISSION OF THE APPELL ANT HAS REMAINED UN-CONTROVERTED BY THE AO. EVEN DURING THE REMAND PROCEEDINGS, THE AO HAS NOT BEEN ABLE TO USE THE DETAI LS FILED BY THE APPELLANT TO VERIFY THESE FACTS AND HAS STATED THA T THE ADDITION MADE U/S 68 WAS JUSTIFIED. THIS POSITION CANNOT BE ITA NO667/DEL/2012 4 APPROVED IN VIEW OF THE FACT THAT APPELLANT HAD ALR EADY OFFERED VERIFIABLE DETAILS OF THE TRANSACTION DURING THE ASSESS MENT PROCEEDINGS AND THE AO HAS NOT BROUGHT ABOUT ANY POSIT IVE MATERIAL ON RECORD TO DISLODGE THE EVIDENCE AS SUBMIT TED BY APPELLANT. AS SUCH, IT IS HELD THAT THE ADDITION MADE U/S 68 OF THE ACT BY DISBELIEVING THE SALE TRANSACTION IN RESPECT OF FLAT NO.7/1 C, J M AVENUE, KOLKATA WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD IS NOT SUSTAINABLE AND THE SAME IS THEREFORE DEL ETED. THE APPELLANT HAS, HOWEVER, NOT BEEN ABLE TO GIVE VERIFI ABLE DETAILS AND EVIDENCES ABOUT THE BUYER OF PARKING SPACE AND TH EREFORE THE ADDITION IN RELATION OF THE SAME IS UPHELD. (PART IAL RELIEF OF RS.9,00,000/--) B) REGARDING ADDITION OF B) REGARDING ADDITION OF B) REGARDING ADDITION OF B) REGARDING ADDITION OF ` ` ` ` .1,00,000/ .1,00,000/ .1,00,000/ .1,00,000/- -- -. .. . 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE POSITION OF LAW. IT IS NOT DISPUTED THAT THE APPELLANT HAD FILED CONFIRMATION FROM THE LENDER GIVING ALL VERIFIABLE DETAILS INCLUDING PAN AND BANK AND CHEQUE DETAILS. HOWEVER, THE AO DID NOT CONSIDER THE SAME AND MADE ADDITION U/S 68. EVEN DURIN G THE REMAND PROCEEDINGS, THE AO HAS NOT BEEN ABLE TO USE T HE DETAILS FILED BY THE APPELLANT TO VERIFY THE LOANS AND HAS IN STEAD REPORTED THAT IN ABSENCE OF COPY OF INCOME TAX RETUR N AND BALANCE SHEET ETC., THE LOAN IS JUSTIFIABLY ADDED U/S 68 OF THE ACT. THIS POSITION CANNOT BE APPROVED IN VIEW OF THE FACT THAT APPELLANT HAD ALREADY OFFERED VERIFIABLE DETAILS OF THE LOAN DURING THE ASSESSMENT PROCEEDINGS AND THUS DISCHARGED HIS ONUS. THE ADDITION MADE WITHOUT BRINGING ON RECORD ANY ADVERSE MATERIAL TO DISLODGE THE EVIDENCE PRODUCED BY THE APPELLANT A ND THEREAFTER GIVING PROPER OPPORTUNITY TO THE APPELLA NT TO EXPLAIN THE SAME CANNOT, THEREFORE, BE SUSTAINED. THE ADDITIO N OF ITA NO667/DEL/2012 5 RS.1,OO,OOO/- MADE U/S 68 IS THEREFORE DELETED. (DELE TED ADDITION OF RS.1 ,00,000/.) 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, THE LD DR WITH RESPECT TO GROUND NO .1 HEAVILY RELIED UPON THE ASSESSMENT ORDER AND WITH RESPECT TO GRO UND NO. 2, THE LD DR INVITED OUR ATTENTION TO PAPER BOOK PAGE 3 AN D SUBMITTED THAT THE AMOUNT IN FACT RECEIVED WAS ` .3.50,000/- AND ADDITION SHOULD HAVE BEEN MADE FOR ` .3,50,000/- INSTEAD OF ` .1 LAKH AND THEREFORE HE ARGUED THAT THIS GROUND BE SET ASIDE TO ASSESSING OFFICER FOR RE- ADJUDICATION. 6. THE LD AR, ON THE OTHER HAND, INVITED OUR ATTENT ION TO PAPER BOOK PAGE 4 WHERE A COPY OF ACCOUNT SHOWING RECEIPT AGAIN ST SALE OF FLAT WAS PLACED. OUR ATTENTION WAS ALSO INVITED TO PAPER BO OK PAGE 5 WHEREBY VIDE PARA 3, THE ASSESSEE HAD EXPLAINED THE ENT IRE FACTS TO ASSESSING OFFICER AND WE WERE ALSO TAKEN TO PAGE 9 WHERE AGAIN A LETTER WAS PLACED WHEREIN THE ASSESSEE HAD EXPLAINED THE FACTS TO ASSESSING OFFICER. OUR ATTENTION WAS ALSO INVITED TO PAPE R BOOK PAGE 11 WHERE A COPY OF POSSESSION LETTER WAS PLACED. IN VIEW OF ALL THESE DOCUMENTS IT WAS SUBMITTED THAT THE AMOUNT WAS RECEIVE D ON ACCOUNT OF SALE OF FLAT AND COMPLETE INFORMATION ABOUT THE B UYER ALONG WITH HIS CONFIRMATION, PAN NUMBER, AFFIDAVIT ETC. WERE FILED . THEREFORE, THE LD CIT(A) AFTER GOING THROUGH ALL FACTS AND CIRCUMSTAN CES HAS RIGHTLY DELETED THE ADDITION. 7. REGARDING GROUND NO.2, OUR ATTENTION WAS INVITED TO PAPER BOOK PAGE 12 WHERE A COPY OF CERTIFICATE ISSUED BY LENDER WAS PLACED WHEREIN COMPLETE ADDRESS AND PAN NUMBER WAS MENTIONED AND LENDER HAD CONFIRMED TO HAVE MADE PAYMENTS ON BEHALF OF ASSE SSEE. WE WERE ALSO TAKEN TO PAPER BOOK PAGE 3 WHEREIN COPY OF ACCOUNT OF ITA NO667/DEL/2012 6 LENDER FOR TWO YEARS WAS PLACED. IN VIEW OF THE ABO VE DOCUMENTS, IT WAS SUBMITTED THAT ORIGINALLY ` .3,50,000/- WAS PAID BY THE LENDER TO FERTILIZER & CHEMICALS TRAVANCORE LTD., AND AGAINST WHICH THE ASSESSEE HAD REPAID ` .2.50,000/- IN THE SAME YEAR WHEREAS THE BALANCE AMOU NT OF ` .1 LAKH WAS REPAID ON 30.4.2005. THEREFORE, IT WAS SU BMITTED THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WITH RESPECT TO GROUND NO.1, WE FIND THAT ASSESSEE HAD SUBMITTED SUFFICIE NT EVIDENCES OF HAVING RECEIVED THE AMOUNT ON ACCOUNT OF SALE OF FLAT AT CALCUTTA. THE ASSESSING OFFICER MADE THE ADDITION ONLY BECAUSE NO FORMAL SALE AGREEMENT WAS ENTERED INTO. HOWEVER, THE IDENTITY OF BUYER ALONGWITH HIS PAN NUMBER, CONFIRMATION, AFFIDAVIT AND POSSESSION L ETTER WAS FILED BEFORE ASSESSING OFFICER AND THESE ARE SUFFICIENT EVIDENC ES TO PROVE THE CONTENTIONS OF ASSESSEE. LD CIT(A) HAS VERY ELABORATE LY DEALT WITH THE ISSUE AND WE DO NOT FIND ANY INFIRMITY IN THE SAME . 9. REGARDING SECOND ISSUE OF ADDITION OF ` .1 LAKH WE FIND THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION AFTER VERIFY ING COMPLETE FACTS AND DETAILS AND WE DO NOT FIND ANY INFIRMITY IN THE SAME. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE R EVENUE IS DISMISSED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH DAY OF FEBRUARY, 2014. SD/- SD/- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 14.02.2014. HMS ITA NO667/DEL/2012 7 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 16.12.2013 DATE OF DICTATION 13.2.2014 DATE OF TYPING 13.2.2014 DATE OF ORDER SIGNED BY 14.2.2014 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.