More Janardan Mahadeorao, Satara V. Dy. CIT, Satara Circle, Satara

ITA 743/PUN/2013

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5823 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 28-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Corroborative evidences; Retraction; Set aside
• Section: 133A; 234B; 201

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE , BEFORE SHRI VIKAS AWASTHY, JM . / ITA NO . 743 /P U N/201 3 / ASSESSMENT YEAR : 20 08 - 09 MORE JANARDAN MAHADEORAO, PROP. M/S. NAVRANG STEEL TRADERS, A/P VADUJ, TAL. - KHATAV, DISTT. SATARA PAN : AJCPM1551F ....... / APPELLANT / V/S. DY. COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI SUDHENDU DAS / DATE OF HEARING : 17 - 09 - 201 8 / DATE OF PRONOUNCEMENT : 05 - 1 2 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - III, PUNE DATED 30 - 09 - 2011 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN BUILDING MATERIAL UNDER 2 ITA NO . 743/PUN/2013, A.Y. 2008 - 09 THE NAME AND STYLE M/S. NAVAR ANG STEEL TRADERS . THE ASSESSEE IS ALSO A PARTNER IN THE FIRM M/S. NAVRANG RELIANCE PETROLEUM ENGAGED IN THE BUSINESS OF RUNNING PETROL PUMP. THE ASSESSEE IS RECEIVING SALARY AND INTEREST INCOME FROM THE SAID FIRM. A SURVEY ACTION U/S. 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 21 - 02 - 2008. IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY THE ASSESSEE MADE A DECLARATION OF ADDITIONAL INCOME AMOUNTING TO RS.29,50,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT TOWARDS THE COST OF CONSTRUCTION OF A HOUSE AT VADUJ AND INVESTMENT IN LAND. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 30 - 09 - 2008 DECLARING TOTAL INCOME OF RS.10,40,720/ - AND AGRICULTURE INCOME OF RS.88,000/ - . IN THE RETURN OF INCO ME THE ASSESSEE DID NOT INCLUDE ADDITIONAL INCOME OF RS.29,50,000/ - DECLARED ON ACCOUNT OF INVESTMENT IN CONSTRUCTION OF HOUSE AND INVESTMENT IN LAND AS DISCLOSED IN THE STATEMENT RECORDED DURING SURVEY. IN ASSESSMENT PROCEEDINGS THE ASSESSEE CONTENDED TH AT THE ADDITIONAL INCOME WAS DECLARED BY THE ASSESSEE OUT OF IGNORANCE AND UNDER PRESSURE. THE LAND ON WHICH THE BUILDING WAS CONSTRUCTED WAS PURCHASED IN THE YEAR 2000. THE GRAM PANCHYAT VADUJ ISSUED COMPLETION CERTIFICATE IN RESPECT OF BUILDING CONSTRU CTED ON THE SAID LAND ON 15 - 12 - 2000. THE CONSTRUCTION OF BUILDING ON THE LAND WAS UNDERTAKEN BY THE PARTNERSHIP FIRM M/S. NAVRANG RELIANCE PETROLEUM AND THE ASSESSEE IS RECEIVING LEASE RENT @ RS.30,000/ - PER ANNUM FORM THE FIRM AND THE SAME HAS BEEN DISCL OSED IN THE RETURN OF INCOME. THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSIONS OF ASSESSEE AND HELD THE SAME TO BE AN AFTERTHOUGHT. THE ASSESSING OFFICER INTER ALIA MADE ADDITION OF RS.29,50,000/ - VIDE ASSESSMENT ORDER DATED 13 - 12 - 2010 PASSED U/S. 14 3(3) OF THE ACT. AGGRIEVED BY THE SAID ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CHALLENGING THE 3 ITA NO . 743/PUN/2013, A.Y. 2008 - 09 ADDITION S . THE FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSESSEE IN TOTO. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ADDITION S CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI M.K. KULKARNI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT T HE OUTSET THAT THE ASSESSEE HAS RAISED 10 GROUNDS IN THE APPEAL. HOWEVER, THE ASSESSEE IS NOT PRESS ING GROUND NOS. 5 TO 7 OF THE APPEAL. THE GROUND NOS. 1 TO 4 OF THE APPEAL ARE IN RESPECT OF SINGLE ISSUE I.E. THE ADDITION OF RS.29,50,000/ - CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 3.1 THE LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. THE LD. AR POINTED THAT THE ASSESSEE HAD PURCHASED VARIOUS PLOTS OF LAND ADJACENT TO THE LAND PURCHASED IN THE YEAR 2000 COMPRISING I N S. NO. 474/4. THE LD. AR REFERRED TO THE PURCHASE DEED OF VARIOUS PARCELS OF LAND PURCHASED BY THE ASSESSEE OVER THE PERIOD OF TIME STARTING FROM 16 - 11 - 2000 TO 14 - 12 - 2004. THE ASSESSEE FURNISHED COPY OF VARIOUS PURCHASE DEED S AT PAGES 19 TO 102 OF THE PAPER BOOK. THE LD. AR SUBMITTED THAT GRAM PANCHYAT VADUJ HAS PASS ED RESOLUTION ISSU ING COMPLETION CERTIFICATE IN RESPECT OF BUILDING CONSTRUCTED ON S. NO. 474/4. THE SAME IS AT PAGES 103 - 104 OF THE PAPER BOOK. THE LD. AR FURTHER SUBMITTED THAT EXCEPT F OR THE BALD STATEMENT ADMITTING ADDITION AL INCOME OF RS.29,50,000/ - IN THE STATEMENT U/S. 133A OF THE ACT , THERE IS NO CORROBORATIVE EVIDENCE. NO ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEMENT WITHOUT THERE BEING ANY SUPPORTING EVIDENCE. TO FURTHE R BUTTRESS HIS ARGUMENT THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. S. KHADER KHAN SON REPORTED AS 300 ITR 157 , FURTHER AFFIRMED BY HONBLE 4 ITA NO . 743/PUN/2013, A.Y. 2008 - 09 SUPREME COURT OF INDIA IN THE CASE OF COMM ISSIONER OF INCOME TAX VS. S. KHADER KHAN SON REPORTED AS 352 ITR 480. 4. ON THE OTHER HAND SHRI SUDHENDU DAS REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION. THE LD. DR SUBMIT TED THAT A PERUSAL OF STATEMENT RECORDED U/S. 133A WOULD SHOW THAT THE STATEMENT WAS MADE BY THE ASSESSEE VOLUNTARILY WITHOUT ANY UNDUE IN FLUENCE. THE SAID STATEMENT WAS NEVER WITHDRAWN OR RETRACTED BY THE ASSESSEE AT ANY POINT OF TIME. THE LD. DR FURTHER SUBMITTED THAT IT IS NOT A CASE WHERE THE ADDITION WAS MADE MERELY ON THE BASIS OF STATEMENT . D URING SURVEY VARIOUS DOCUMENTS WERE FOUND EVIDENCING INVESTMENT MADE BY THE ASSESSEE ON CONSTRUCTION O F BUILDING FROM THE FUNDS OUTSIDE THE BOOKS OF ACCOUNT. THE STATEMENT OF THE ASSESSEE IS DULY CORROBORATED WITH THE DOCUMENTS FOUND DURING SURVEY. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SUPPORT THAT THE INVESTMEN T ON CONSTRUCTION OF BUILDING WAS FINANCED BY THE PARTNERSHIP FIRM M/S. NAVRANG RELIANCE PETROLEUM. 5 . BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW AND THE DOCUMENTS FURNISHED BY THE ASSESSEE IN THE FORM OF PAPER BOOK EXAMINED. THE PRIMARY ISSUE AGITATED BY THE ASSESSEE IN APPEAL IS AGAINST THE ADDITION OF RS.29,50,000/ - CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IN STATEMENT RECORDED DURING SURVEY ACTION ON 21 - 02 - 2008 HAS DECLARED ADDITIONAL INCOME OF RS.29,50,000/ - ON ACCOUNT OF INVESTMENT MADE IN CONSTRUCTION OF BUILDING AND LANDS. HOWEVER, WHILE FILING RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 THE ASSESSEE DID NOT DISCLOSE THE AFORESAID DECLARED ADDITIONAL INCOME . THE GIST OF REAS ONS FOR NOT DECLARING ADDITIONAL INCOME IN THE RETURN OF INCOME IS AS UNDER : 5 ITA NO . 743/PUN/2013, A.Y. 2008 - 09 I . THE DECLARATION WAS MADE UNDER IGNORANCE AND UNDUE INFLUENCE . II . THE BUILDING WAS CONSTRUCTED IN THE YEAR 2000 FOR WHICH FUNDS WERE PROVIDED BY THE PARTNERSHIP FIRM M/S. M/S. NAVRANG RELIANCE PETROLEUM. THE COMPLETION CERTIFICATE IN RESPECT OF SAID BUILDING WAS ISSUED BY GRAM PANCHYAT VADUJ ON 15 - 12 - 2000. III . THE ASSESSEE HAD MADE INVESTMENT IN LAND DURING THE PERIOD STARTING FROM NOVEMBER, 2002 TO DECEMBER, 2004. NONE OF THE SAI D INVESTMENTS WERE MADE DURING IMPUGNED ASSESSMENT YEAR. IV . THE STATEMENT MADE BY THE ASSESSEE IS NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCE. THEREFORE, NO RELIANCE SHOULD BE PLACED ON THE SAID STATEMENT. 6. IN SO FAR AS THE FIRST REASON TAKEN BY THE ASSESSEE TO NEGATE THE DECLARATION MADE IS CONCERNED, IT IS WITHOUT MERIT . THE ASSESSEE NEVER RETRACTED THE DECLARATION MADE IN THE STATEMENT RECORDED U/S. 133A OF THE ACT. IF THE ASSESSEE WAS AGGRIEVED IN ANY MANNER ON THE ISSUE OF RECORDING OF THE STAT EMENT UNDER INFLUENCE , THE ASSESSEE WAS AT LIBERTY TO RETRACT THE SAME. HOWEVER, THERE WAS NO RETRACTION OR WITHDRAWAL OF THE STATEMENT BY THE ASSESSEE AT ANY POINT OF TIME. 7. AS REGARDS THE SECOND REASON OF THE ASSESSEE THAT THE BUILDING WAS CONSTRUC TED IN 2000 , T HE ASSESSEE HAS PLACED ON RECORD RESOLUTION OF THE GRAM PANCHYAT VADUJ CERTIFYING COMPLETION OF THE BUILDING. THE SAID COMPLETION CERTIFICATE IS DATED 15 - 12 - 2000. THE ASSESSEE HAS ALSO PLACED ON RECORD PURCHASE DEED OF LAND COMPRISING IN S. NO. 474/4 ON WHICH THE SAID BUILDING IS CONSTRUCTED. THE SAID PURCHASE DEED IS DATED 16 - 11 - 200 0 . THEREAFTER , THE ASSESSEE HA S PURCHASED DIFFERENT PARCELS OF ADJOINING PLOT OF LAND S COMPRISING IN S. NO. 474/5, 474/6. THE SAID PLOT OF LANDS WERE PURCHASE D BY THE ASSESSEE IN THE YEAR S 2002 TO 2004. THERE IS NO MATERIAL 6 ITA NO . 743/PUN/2013, A.Y. 2008 - 09 ON RECORD TO SHOW THAT ANY OTHER BUILDING OR STRUCTURE WAS CONSTRUCTED ON THE SAID PLOTS OF LAND OWNED BY THE ASSESSEE. FROM THE DOCUMENTS ON RECORD THE ONLY INFERENCE THAT CAN BE DRAWN IS THE EXISTENCE OF BUILDING ON THE PLOT OF LAND COMPRISING IN S. NO. 474/4 FOR WHICH COMPLETION CERTIFICATE WAS RECEIVED BY THE ASSESSEE IN THE YEAR 2000 ITSELF. THE DEPARTMENT HAS NOT FURNISHED ANY POSITIVE EVIDENCE TO SHOW THAT THERE IS ANOTHER BUILDING ON THE PLOT OF LAND S PURCHASED BY THE ASSESSEE SUBSEQUENT TO THE YEAR 2000. THUS, THERE IS NO CORROBORATIVE EVIDENCE TO SHOW THAT THE ASSESSEE HAS MADE INVESTMENT EITHER IN THE PURCHASE OF LAND OR CONSTRUCTION OF BUILDING DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. IT IS A WELL SETTLED LAW THAT ADDITION CANNOT BE MADE MERELY ON THE BASIS OF ADMISSION MADE IN STATEMENT RECORDED U/S. 133A OF THE ACT. TAKING INTO CONSIDERATION ENTIRETY OF FACTS I AM OF THE CONSIDERED VIEW THAT THE ADDITI ON OF RS.29,50,000/ - DESERVES TO BE SET ASIDE. I HOLD AND DIRECT ACCORDINGLY. THUS, THE GROUND NOS. 1 TO 4 OF THE APPEAL ARE ALLOWED. 8. THE LD. AR OF THE ASSESSEE STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NOS. 5, 6 AND 7 OF THE APPEAL. ACCORDI NGLY, THE SAME ARE DISMISSED AS NOT PRESSED. 9. IN GROUND NO. 8 OF THE APPEAL THE ASSESSEE HAS ASSAILED DELAY IN COMMUNICATING THE IMPUGNED ORDER. NO MEANINGFUL ARGUMENT WAS MADE BY THE LD. AR OF THE ASSESSEE ON THIS ISSUE. ACCORDINGLY, THE SAME IS DISMISSED. 10. IN GROUND NO. 9 OF THE APPEAL, THE ASSESSEE HAS ASSAILED CHARGING OF INTEREST U/S. 234A, 234B AND 234C OF THE ACT. CHARGING OF INTEREST U/S. U/S. 234A, 234B AND 234C IS CONSEQUENTIAL AND MANDATORY, HENCE, 7 ITA NO . 743/PUN/2013, A.Y. 2008 - 09 GROUND NO. 9 RAISED IN APPEAL BY THE ASSESSEE IS DISMISSED BEING DEVOID OF ANY MERIT. 11. THE GROUND NO. 10 IS GENERAL IN NATURE, HENCE, REQUIRES NO ADJUDICATION. 12. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. ORDER PRO NOUNCED ON WEDNESDAY, THE 05 TH DAY OF DECEMBER, 201 8 . SD/ - ( / VIKAS AWASTHY) / JUDICIAL MEMBER / PUNE; / DATED : 05 TH DECEMBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - III, PUNE 4. / THE CIT - III, PUNE 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE