ITO, Hubli V. Smt. Fatima N Bagwan, Hubli

ITA 745/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8469 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER SL. NO. ITA NOS. & ASSESSMENT YEAR APPELLANT RESPONDENT 1. ITA NO. 739/BANG/2016 AY: 2008-09 ITA NO. 740/BANG/2016 AY: 2009-10 ITA NO. 741/BANG/2016 AY: 2010-11 INCOME TAX OFFICER, WARD-1(1), HUBBALLI. SHRI. NASIRUDDIN P. BAGWAN BAGWAN BUILDING, BEHIND MANIKBAG AUTOMOBILES, VIDYA NAGAR, HUBBALLI-31. PAN : AIQPB9226M 2. ITA NO. 742/BANG/2016 AY: 2008-09 ITA NO. 743/BANG/2016 AY: 2009-10 ITA NO. 744/BANG/2016 AY: 2010-11 INCOME TAX OFFICER, WARD-1(1), HUBBALLI. SHRI. RAHEESAHMED N BAGWAN, BAGWAN BUILDING, BEHIND MANIKBAG AUTOMOBILES, VIDYA NAGAR, HUBBALLI-31. PAN : AJEPB0321L ITA NO. 745/BANG/2016 AY: 2008-09 ITA NO. 746/BANG/2016 AY: 2009-10 ITA NO. 747/BANG/2016 AY: 2010-11 INCOME TAX OFFICER, WARD-1(1), HUBBALLI. SMT. FATIMA N BAGWAN, BAGWAN BUILDING, BEHIND MANIKBAG AUTOMOBILES, VIDYA NAGAR, HUBBALLI-31. PAN : AGNPB2986M APPELLANT BY : SHRI. G. KAMALADAR, STANDING COUNSEL RESPONDENT BY : SHRI. RAVISHANKAR , ADVOCATE DATE OF HEARING : 23.03.2017 DATE OF PRONOUNCEMENT : 24.03.2017 ITA NOS. 739-747/BANG/2016 PAGE 2 OF 4 O R D E R PER BENCH THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDER OF THE CIT(A) ON COMMON GROUNDS. WE, HOWEVER , FOR THE SAKE OF REFERENCE, EXTRACT THE GROUNDS RAISED IN ITA NO.739 /2016. 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FA CTS OF THE CASE. 2. THE CIT(A) ERRED IN DELETING THE ADDITION MADE O F RS. 13,78,845/- IN THE HANDS OF THE INDIVIDUAL BEING BANK CREDITS DURING T HE YEAR AND 1/3 RD OF THE CASH RECEIPTS. 3. THE CIT(A) ERRED IN DELETING THE ADDITIONS MADE OF RS. 13,78,845/- UNDER THE HEAD 'PROFITS AND GAINS FROM BUSINESS' WH ICH CONFIRMING THE SAME ON PAGE 13 OF THE SAME ORDER. 4. THE CIT(A) ERRED IN NOT CONSIDERING THE FACT THA T THE ASSESSEE IS IN THE REAL ESTATE BUSINESS AND HAS ENTERED INTO A JOINT D EVELOPMENT AGREEMENT WITH THE DEVELOPERS FOR DEVELOPMENT OF LAND AT MAVANUR VILLAGE, HUBBALLI INTO RESIDENTIAL LAYOUT AND FOR THE DEVELO PMENT OF ITS LAND AT KARWAR ROAD, HUBBALLI INTO COMMERCIAL AND RESIDENTI AL COMPLEX. 5. THE CIT(A) ERRED IN CONSIDERING THE FACT THAT TH E ASSESSMENT ORDER WAS PASSED EX-PARTE U/S 144 OF THE I T ACT, 1961 FOR TH E REASON THAT THE ASSESSEE FAILED TO FILE ANY EVIDENCES DESPITE AMPLE OPPORTUN ITIES AFFORDED DURING THE ASSESSMENT PROCEEDINGS. 6. I. THE CIT(A) ERRED IN DELETING THE ADDITIONS OF RS. 13,78,845/- MADE ON ACCOUNT OF RECEIPTS DEPOSITED IN THE BANK A CCOUNT OF THE FAMILY MEMBERS OF SRI NASIRUDDIN BAGWAN AS NET INCO ME IN LIEU OF THE JOINT VENTURE AGREEMENT ENTERED INTO WI TH THE DEVELOPER II. AS SUCH, THE CIT(A) ERRED IN NOT APPRECIATING THE F ACT THAT THE RECEIPTS IN THE BANK ACCOUNT REPRESENTS THE NET INC OME OF THE ASSESSEE AS PER THE JOINT VENTURE AGREEMENT. III. THE CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT A S PER THE JOINT DEVELOPMENT AGREEMENTS, THE ENTIRE EXPEND ITURE FOR THE DEVELOPMENT OF THESE PROJECTS IS TO BE BORNE BY THE DEVELOPERS AND AS SUCH, THE ENTIRE RECEIPTS RECEIVE D BY THE ASSESSEE REPRESENTS THE NET INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR IN QUESTION AND IS RIGHTY BROUGHT T O TAX IN THE HANDS OF THE ASSESSEE INDIVIDUAL. ITA NOS. 739-747/BANG/2016 PAGE 3 OF 4 IV. THE CIT(A) GROSSLY ERRED IN NOT APPRECIATING THE IS SUES DEALT WITH BY HIM IN THE APPELLATE ORDER FOR DELETION AS SUCH ARE NOT EMANATING FROM THE ASSESSMENT ORDER OF TE AO AND TH E LD. CIT(A) HAS DECIDED THE ISSUES ON DIFFERENT FOOTING AFTER C ONSIDERING THE FRESH EVIDENCES IN CONTRAVENTION TO RULE 46A(3) OF THE I T RULES. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT IN THE HANDS OF THE ASSE SSEE, THE ASSESSMENT WAS FRAMED ON PROTECTIVE BASIS. THE SUBSTANTIVE ASSESS MENT WAS FRAMED IN THE HANDS OF AOP I.E., N. P BAGWAN & OTHERS. APPEALS FILED BY THE REVENUE IN THE CASE OF N. P. BAGWAN & OTHERS WERE TAKEN UP BY THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 30.06.2016 SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE MATTER TO THE AO WITH THE DIRECTIO NS TO READJUDICATE THE ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEIN G HEARD TO THE ASSESSSEES IN TERMS INDICATED IN THE ORDER. NOW WHEN THE ENTIRE ISSUE IS OPEN FOR THE AO, THE ASSESSMENT FRAMED IN PROTECTIVE BASIS CANNOT BE SUBSTANTIATED. IN THE LIGHT OF THESE FACTS, THIS MATTER IN THE PRESENT AP PEALS SHOULD ALSO GO BACK TO THE AO TO PASS APPROPRIATE ORDER IN THE LIGHT OF TH E ASSESSMENT ORDER FRAMED IN THE HANDS OF AOP I.E., N. P. BAGWAN AND OTHERS. 3. THE LEARNED DR SIMPLY PLACED THE RELIANCE UPON T HE ASSESSMENT ORDER. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTH ORITIES BELOW AND THE ORDERS PASSED IN THE CASE OF AOP BY THE TRIBUNAL (C OPIES PLACED ON RECORDS), WE FIND THAT ONCE ENTIRE ISSUE ON ADDITIONS MADE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE, ARE OPEN BEFORE THE AO IN SE T ASIDE PROCEEDINGS IN THE CASE OF AOP, THE ASSESSMENT ON PROTECTIVE BASIS ARE NOT SUSTAINABLE. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND RES TORE THE MATTER TO THE AO TO TAKE APPROPRIATE VIEW IN THE ASSESSEES CASE WHI LE COMPUTING THE ITA NOS. 739-747/BANG/2016 PAGE 4 OF 4 ASSESSMENT IN THE HANDS OF AOP. ACCORDINGLY, THE A PPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF MARCH, 2017. SD/- SD/- (INTURI RAMA RAO) (SUNIL KUM AR YADAV) ACCOUNTANT MEMBER J UDICIAL MEMBER BANGALORE. DATED: 24 TH MARCH, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.