SANGEETABEN M. MARDIA, MUMBAI V. ITO 18(3)(2), MUMBAI

ITA 693/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0757 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 08-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2017
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: N M PORWAL
• Keywords: Reason to believe
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 693 / MUM/20 1 7 ( ASSESSMENT YEAR : 2007 - 08 ) SMT. SANGEET H ABEN M. MARDIA, 701/A - WING, MUTHALIYA RESIDENCY, KALACHOWKI, D.I MARG, MUMBAI 400 033 VS. ITO WARD 18(3)(2), MUMBAI PAN/GIR NO. AAEPM3314P APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI N.M.PORWAL REVENUE BY SHRI A.K.KARDAM DATE OF HEARING 09 / 05 /201 7 DATE OF PRONOUNCEME NT 15 / 05 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 29, MUMBAI DATED 22/11/2016 FOR THE A.Y.2007 - 08 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. FACTS IN BRIEF ARE THAT T HE ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF INCOME FOR AY 2007 - 08 ON 31/07/2007 ADMITTING AN INCOME OF RS. 2,46,617/ - . SUBSEQUENTLY, THE AO RECEIVED INFORMATION FROM THE DDIT (INVESTIGATION), UNIT - III(2), MUMBAI WHICH IS AS UNDER: 'THE ASSESSEE SMT. SANGEETABEN M. MARDIA, HAS BOOKED A FLAT IN THE PROJECT DEVELOPED BY M/S. ESQUE FINMARK PRIVATE LTD. AT KALA CHOWKIE, MUMBAI. UPON ENQUIRY AND INVESTIGATION IT IS OBSERVED THAT DURING FY 2006 - 07 THE ASSE SSEE HAS ITA NO. 693/MUM/2017 SMT. SANGEETHABEN M.MARDIA 2 MADE INVESTMENT IN THE SAID PROJECT TOWARDS WHICH PAYMENT OF RS. 42,25,000/ - WAS MADE IN CASH. THE ASSESSEE COULD NOT PRODUCE THE PROOF OF SOURCE OF PAYMENT OF RS. 42,25,000/ - MADE IN CASH TO THE DEVELOPER.' BASED ON THIS INFORMATION THE AO, UPON FORMATION OF REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, ISSUED NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED COPY OF ALLOTMENT LETTER FROM M/S. ESQUE FINMARK PRIV ATE LTD. AND COPY OF RECEIPTS ISSUED BY THEM ALONG WITH HER BANK STATEMENT. THE AO NOTICED THAT THE PAYMENTS OF RS. 30 LAKHS WERE MADE TO M/S. ESQUE FINMARK BY CHEQUE. HE ASKED THE ASSESSEE TO FURNISH CONFIRMATION FROM M/ S. ESQUE FIN M ARK PRIVATE LTD. FOR T HE TOTAL PAYMENTS MADE' TO THEM. THE ASSESSEE STATED THAT AS THE BUILDING WAS INCOMPLETE, THE BALANCE PAYMENT OF RS. 12,25,000/ - HAS NOT BEEN MADE. THE AO REFUSED TO ACEPT THE ARGUM ENT OF THE ASSESSEE STATING THAT THE ASSESSEE FAILED TO FURNISH LEDGER CONF IRMATION OF PAYMENT MADE TO M/S. ESQUE FINMARK PRIVATE LTD., PAYMENT OF 'ON MONEY' IS NOT UNCOMMON IN THIS LINE OF BUSINESS AND PLACING HIS RELIANCE ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT, MADE AN ADDITION OF RS.1 2,25,000/ - TO THE TOTAL INCOME OF THE ASSESSEE. 4. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO. 693/MUM/2017 SMT. SANGEETHABEN M.MARDIA 3 5. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 6. WITH REGARD TO VALIDITY OF REOPENING, I FOUND THAT AS PER REASONS RECORDED BY AO, THERE WAS SUFFICIENT REASON TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME. A CCORDINGLY, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF AO FOR REOPENING THE ASSESSMENT . 7 . F ROM THE RECORDS I FOUND THAT ASSESSEE HAD BOOKED A FLAT WITH ESQUE FINMARK PVT L T D FOR TOTA L CONSIDERATION OF RS. 2,25,000/ - VIDE ALLOTMENT LETTER DATED IS JAN,200 7 . AT THE TIM E OF BOOKING A SUM OF RS.5,00,000/ - W AS PAID AND THERE AFTER FURTHER SUM O F RS. 25,00,000/ - WAS PAID ON DIFFERENT DATES I .E TOTAL AMOUNT PAID WAS RS.30, 00,000/ - . ASSESSEE HAD NOT MADE ANY FURTHER P AYMENT TO THE BUILDER AS THE CONSTRUCTION OF BUILDING WAS NOT COMPLETED. A FTERWARDS THE SAID PROJECT WAS TAKEN OVER BY A NEW PARTY AND A FRESH ALLOTMENT LE TTER WAS ISSUED ON 15TH OCT, 2010. T ILL TODAY , THE SAID BUILDING IS NOT COMPLETED BY THE BUILDER NOR THE POSSESSION OF THE SAID FLAT WAS GIVEN TO THE ASSESSEE, HENCE NO FURTHER AMOUNT WAS PAID TO THE BUILDER. NOTHING POSITIVE WAS BROUG HT ON RECORD BY THE AO OR THE CIT(A) TO THE EFFECT THAT ASSESSEE HAD PAID RS.12,25,000/ - IN CASH TO M/S. ESQUE FINMARK PRIVATE LTD., . IT IS ALSO NOT A CASE OF THE AO THAT ASSESSEE HAS TAKEN POSSESSION AND LIVING IN THE FLAT WITHOUT PAYING THE BALANCE AMOUNT OF RS.12,25,000/ - TO M/S. ESQUE FINMARK PRIVATE LTD. IT WAS THE CONTENTION OF LEARNED AR THAT SINCE FLAT WAS NOT COMPLETED, ITS POSSESSION WAS NOT GIVEN TO THE ASSESSEE, THEREFORE, BALANCE AMOUNT OF ITA NO. 693/MUM/2017 SMT. SANGEETHABEN M.MARDIA 4 RS.12,25,000/ - WAS YET TO BE PAID BY THE ASSESSEE TO M/S. ESQUE FINMARK PRIVATE LTD., UNDER THESE FACTS AND CIRCUMSTANCES AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.12,25,000/ - . I DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 05 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 05 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. C IT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//