VEENA M DALAL, MUMBAI V. DCIT (OSD II) CR 7, MUMBAI

ITA 7785/MUM/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3546 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Keywords: Additional evidence
• Section: 143(3); 148; 54; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBAI BENCH F , MUMBAI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7785/MUM/2012 ASSESSMENT YEAR: 2007-08 SMT. VEENA M. DALAL, 42, CHITRAKOOT, ALTAMOUNT ROAD, MUMBAI-400026. PAN: ACBPD4089R VS. DCIT(OSD II), CENTRAL RANGE-7, AAYAKAR BHAVAN, 4 TH FLOOR, 101 M.K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIPUL JOSHI REVENUE BY : SHRI PAWAN KUMAR B EERLA (DR) DATE OF HEARING : 10.12.2015 DATE OF PRONOUNCEMENT : 13.01.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-40, MUMBAI DATED 22.10.2012 IN RESPECT OF ASSESSMENT YEAR (AY) 2007-08 ON THE FOLLOWING GROUNDS OF APPEAL: 1 A. ON FACTS AND IN LAW, THE COMMISSIONER OF INCOM E TAX (APPEALS)-40 [CIT(A)] FAILED TO APPRECIATE THAT REASSESSMENT ORD ER PASSED BY THE ASSESSING OFFICER (AO) WAS BAD IN LAW AND THEREBY ERRED IN NO T DIRECTING THE AO TO CANCEL THE REASSESSMENT COMPLETED. B. ON FACTS AND IN LAW, THE CIT (A) FAILED TO APPRE CIATE THAT NO INCOME COULD HAVE BEEN SAID TO HAVE ESCAPED ASSESSMENT AND THERE BY ERRED IN NOT DIRECTING THE AO TO CANCEL THE REASSESSMENT COMPLETED. 2. ON FACTS AND IN LAW, THE CIT (A) ERRED IN CONFIR MING THE ACTION OF THE AO IN NOT ALLOWING EXEMPTION UNDER SECTION 54 F OF THE IN COME TAX ACT 1961, (THE ACT). 3. ON FACTS AND IN LAW, THE CIT (A) FAILED TO APPRE CIATE THAT THE GOA PROPERTY WAS NOT TRANSFERRED DURING THE YEAR AND THEREBY ERR ED IN CONFIRMING ACTION OF AO IN TREATING THAT THE GOA PROPERTY WAS TRANSFERRE D DURING THE YEAR AND THEREBY TAXING CAPITAL GAINS ON SALE OF GOA PROPERT Y. 2 ITA NO. 7785/M/2012 SMT. VEENA M. DALAL 4. A. ON FACTS AND IN LAW, THE CIT (A) FAILED TO CO NSIDER EXPLANATION FILED BEFORE HIM AND THEREBY ERRED IN CONFIRMING ADDITION OF RS. 5,00,000/- MADE BY THE AO IN RESPECT OF UNDISCLOSED INCOME ON FOREIGN VISITS. B. ON FACTS AND IN LAW, THE CIT (A) ERRED IN NOT AD MITTING ADDITIONAL EVIDENCE FILED BEFORE HIM AND THEREBY ERRED IN CONFIRMING AD DITION MADE OF RS. 5,00,000/- AS UNDISCLOSED INCOME IN RESPECT OF FORE IGN VISITS. 5. THE CIT (A) FAILED TO APPRECIATE THAT IN THE FAC TS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, INTEREST OF RS.11,72,525/- LEVIED UNDER SECTION 234A OF THE ACT, RS. 1,84,754/- LEVIED UNDER SECTION 234 A OF THE AC T AND OF RS 23,500/- LEVIED UNDER SECTION 234 C OF THE ACT IS ILLEGAL AND UNLAW FUL AND/OR EXCESSIVE. 6. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND, ALTE R, DELETE AND/OR MODIFY THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE FINAL DATE OF HEARING 2. THE BRIEF FACT OF THE CASE ARE THAT THE ASSESSEE, W HO IS AN INDIVIDUAL FILED HER RETURN OF INCOME FOR AY- 2007-08 , ON 30.05.2008, DECLARING T OTAL INCOME OF RS. 57,96,793/-. A SEARCH WAS CONDUCTED ON 31.05.2008, AT THE PREMISE S OF SHRI VINOD FARIA AND MILAN DALAL U/S. 132 OF THE ACT, AND THEREAFTER THE ASSES SMENT WAS RE-OPENED BY SERVING A ISSUING NOTICE U/S 148 ON 06.12.2010, VIDE NOTICE D ATED 11.11.2011 REASONS RECORDED FOR ISSUING NOTICE U/S 148 AND ALSO NOTICE U/S 142( 1) FOR CALLING THE ASSESSEE TO FILE THE RETURN OF INCOME WAS SERVED, BUT NO RETURN WAS FILE D, HENCE EX-PARTE ASSESSMENT U/S 144 OF THE ACT WAS MADE ON THE BASIS OF MATERIAL AV AILABLE ON RECORD. 3. THE ASSESSMENT ORDER FURTHER REVEALED THAT ON 26.12 .2011, THE REPRESENTATIVE OF ASSESSEE ATTENDED THE OFFICE OF ASSESSING OFFICER ( AO) AND FILED REPLY. WHILE MAKING THE ADDITION/ DISALLOWANCE IN THE ASSESSMENT ORDER, THE AO OBSERVED THAT ON 30.05.2008 I.E. DURING THE SEARCH PROCEEDING, IT W AS NOTICED THAT THE ASSESSEE RECEIVED RS. 30 LAKHS IN CONNECTION WITH TRANSFER OF PROPERT Y IN GOA IN FINANCIAL YEAR (FY)- 2006-07, AND THE AMOUNT WAS NOT OFFERED FOR TAX AND FURTHER ADDED/ DISALLOWED A SUM OF RS. 5 LAKH ON ACCOUNT OF UNDISCLOSED INCOME FOR FOREIGN VISIT IN THE ASSESSMENT ORDER DATED 28.12.2011 PASSED U/S 143(3) R.W.S. 147 OF THE ACT. 4. AGAINST ORDER DATED 28.12.2011 PASSED U/S 143(3) R. W.S. 147, AN APPEAL WAS FILED BEFORE THE CIT(A) AND THE LD. CIT(A) WHILE DISPOSIN G OF THE APPEAL OF THE ASSESSEE CONFIRMED ALL THE ADDITION/DISALLOWANCE MADE BY THE AO AND DISMISSED THE APPEAL VIDE ORDER DATED 16.01.2012 AGAINST WHICH THE PRESE NT APPEAL IS FILED ON THE GROUNDS AS MENTIONED ABOVE BEFORE US. 5. WE HAVE HEARD THE AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE, AT THE OPENING OF ARGUMENT THE AR OF THE ASSESSEE MADE THE STATEMENT THAT THE ASSESSEE IS NOT PRESSIN G GROUND NO. 1 AND 2 OF THE APPEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED, KEEPI NG IN VIEW OF THE SUBMISSION THE GROUND NO. 1 AND 2 ARE DISMISSED. 3 ITA NO. 7785/M/2012 SMT. VEENA M. DALAL 6. GROUND NO.3, IS IN RESPECT OF TAXING CAPITAL GAIN I N RESPECT OF GOA PROPERTY. THE AO WHILE MAKING THE ASSESSMENT HAS OBSERVED THAT ASSES SEE RECEIVED RS. 30 LAKHS IN CONNECTION WITH THE TRANSFER OF PROPERTY IN GOA AND AMOUNT WAS NOT OFFERED FOR TAX, THE ASSESSEE REPLIED THAT ONLY ADVANCE OF RS. 30 LA KHS WAS RECEIVED BY THE ASSESSEE IN THE ACCOUNTING YEAR ENDED ON 31.03.2007 AND NO FORM AL AGREEMENT WAS ENTERED FOR SALE AND CONVEYANCE DEED WAS EXECUTED IN MARCH 200 9, WHEN THE BALANCE AMOUNT OF RS. 1 LAKHS WAS RECEIVED AND THUS NO INCOME HAD ARI SEN DURING THE YEAR ENDED ON MARCH 2007, HOWEVER, THE AO OBSERVED THAT THE ASSES SEE HAS NOT DECLARED THE CAPITAL GAIN IN HER RETURN FOR AY-2009-10 IN SPITE OF THE F ACT THAT TRANSACTION IS STATED TO HAVE BEEN COMPLETED IN FY-2008-09 ONLY AND COMPUTED IT T O BE TAXABLE IN AY-2007-08. 7. THE CIT(A) IN ITS ORDER WHILE DEALING THIS GROUND H AS HELD THAT THE SALE-DEED HAS BEEN PREPARED ON A SUBSEQUENT DATE TO THE DATE OF SEARC H AND HENCE NOT RELIABLE AND THAT IN THE MEMO OF UNDERSTANDING/ AGREEMENT, THE POSSESSIO N TO THE PURCHASER WAS ALREADY GRANTED ON RECEIPT OF ADVANCE OF RS. 30 LAKH. THE LD. CIT (A) FURTHER CONCLUDED THAT THE PROVISION OF SECTION 53A OF THE TRANSFER OF PRO PERTY ACT THE POSSESSION WAS HANDED OVER IN PART PERFORMANCE. 8. THE LD AR OF THE ASSESSEE WHILE ARGUING HAS DRAWN O UR ATTENTION IN RESPECT OF THE AGREEMENT, COPY OF WHICH PLACED ON RECORD ON PAGE N O. 9 TO 23 OF PAPER BOOK. WE HAVE PERUSED THE AGREEMENT/MOU WHICH CONTAINED THE SIGNA TURE OF ASSESSEE ONLY IN EACH AND EVERY PAGE AND THERE IS NO SIGNATURE OF PURCHASER, THIS AGREEMENT BEARS THE DATE OF 31.03.2007, AND WAS ALLEGEDLY SIGNED THROUGH ATTORN EY/HUSBAND OF ASSESSEE SHRI MILAL B. DALAL IN FAVOUR OF SHRI JAGDIP SHARMA S/O RAJENDRA PAL SHARMA OF NAGPUR BUT, INTERESTINGLY THE AGREEMENT IS NOT SIGNED BY THE PU RCHASER, THOUGH IT WAS TYPED / WRITTEN ON A NON-JUDICIAL STAMP PAPER OF RS. 62,000/-. THE NON-JUDICIAL STAMP PAPER WERE PURCHASED IN THE NAME OF RAHUL SHARMA/RAJENDRA PAL SHARMA OF NAGPUR, ON CAREFUL SCRUTINY OF THE DOCUMENT, WE FOUND THAT THE MOU/AGR EEMENT TO SALE IS NOT A CONCLUDED CONTRACT BETWEEN THE ASSESSEE AND THE PURCHASER. TH OUGH, THE ASSESSEE HAS ADMITTED TO HAVE RECEIVED A SUM OF RS. 30 LAKH ON 31.03.2007. 9. THE AO CONCLUDED THAT ASSESSEE ALLOWED THE POSSESSI ON OF PROPERTY IN GOA TO THE PURCHASER, INFACT THERE IS NO EVIDENCE TO ESTAB LISH THAT POSSESSION OF THE PROPERTY WAS TRANSFERRED TO THE SO-CALLED PURCHASER. 10. INFACT, THE SALE-DEED WAS EXECUTED ON 25.03.2009, A ND AS PER SECTION 54 OF TRANSFER OF PROPERTY ACT, THE TITLE OF PROPERTIES CONSIDERED TO BE TRANSFERRED ONLY ON THE EXECUTION OF REGISTERED SALE-DEED. AND AS PER THE CONTENTS OF T HE SALE-DEED, THE POSSESSION WAS HANDED 4 ITA NO. 7785/M/2012 SMT. VEENA M. DALAL OVER TO THE PURCHASER ONLY ON 25.03.2009. THE CIT(A ) WRONGLY CONCLUDED, THAT THE SALE- DEED HAS BEEN PREPARED ON A SUBSEQUENT DATE OF SEAR CH AND NOT RELIABLE. 11. THE CIT(A) HAS NOT CONSIDERED THE CONTENTS OF THE REGISTERED DOCUMENT RATHER GAVE MORE RELIANCE TO THE MEMORANDUM OF UNDERSTANDING WHICH WAS INFACT NOT A CONCLUDED CONTRACT AND CANNOT BE CONSIDERED AS PROPERLY EXECUTED DOCUM ENT AS PER THE PROVISIONS OF TRANSFER OF PROPERTY ACT, FURTHER, THE FINDING OF AO AS WELL AS CIT(A) THAT AS PER SECTION 53A OF TRANSFER OF PROPERTY ACT, THIS WAS AMOUNTS TO TRANS FER ARE WRONG. 12. SECTION 53A OF TRANSFER OF PROPERTY ACT DEALS WITH THE PRINCIPAL OF PART PERFORMANCE IN RESPECT OF TRANSFER OF PROPERTY, WHICH A PLEA OF DE FENCE BY A PURCHASER IN THE EVENT THE PURCHASER IS BEING DISPOSSESSED BY THE SELLER AND T HUS THE PRINCIPLE ENVISAGED U/S 53A IS NOT APPLICABLE AGAINST THE ASSESSEE, HENCE THIS GRO UNDS OF APPEAL IS ACCEPTED AND THE FINDING OF AO AND CIT(A) ARE SET-ASIDE. 13. SINCE THE TRANSFER OF PROPERTY IN GOA TOOK PLACE ON 25.03.2009 AND THE REVENUE MAY TAKE APPROPRIATE LEGAL STEP TO INCLUDE THE TRANSACTION I N THE RELEVANT ASSESSMENT YEAR BY CONSIDERING THE TRANSFER OF PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF I.T. ACT. 14. NEXT GROUND IS IN RESPECT OF ADDITION OF EXPENDITUR E OF RS. 5,00,000/- ON FOREIGN VISITS. THE AO WHILE MAKING THE ADDITION HAS OBSERVED THAT THE ASSESSEE UNDERTAKEN FOREIGN VISITS ALONG WITH HER HUSBAND SHRI MILAN DALAL AND TWO CHILDREN TO UK, USA, GERMANY, DUBAI (5 TIMES) & THAILAND DURING THE YEAR, FOR WHI CH NO DETAILS HAS BEEN FILED NOR COPY OF THE PASSPORT WAS PRODUCED. THE ORDER OF AO FURTH ER DISCLOSE THAT ASSESSEE EXPLAINED THAT SHE TRAVELLED ALONG WITH HER HUSBAND ONLY AND THAT HER HUSBAND MADE WITHDRAWAL OF RS. 36,00,000/- DURING THE YEAR WHICH HAS BEEN ACCE PTED BY THE DEPARTMENT IN ITS ASSESSMENT AND NO ADDITION ON THIS ACCOUNT OF FOREI GN TRAVELS HAS BEEN MADE IN ANY OF THE BLOCK PERIOD. 15. THE AO WAS NOT SATISFIED AND ADDED A SUM OF RS. 5,0 0,000/- ON ACCOUNT OF FOREIGN VISITS. THE CIT(A) WHILE DEALING WITH THIS GROUND CONCLUDED THAT THE ASSESSEE HAS GIVEN DETAILS OF TOTAL EXPENSES OF RS. 3,70,592/- AND THAT THE FI GURE IS NOT RELIABLE AS THE COMPLETE DETAILS OF THE TRIPS UNDERTAKEN BY HER HAS NOT BEEN PROVIDED AND UPHELD THE ADDITION. 16. THE AR OF THE ASSESSEE HAS ARGUED THAT ON 23.12.201 1, THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS ABOUT THE FOREIGN TRIP, THE ASS ESSEE FILED A REPLY/APPLICATION BEFORE THE AO ON 24.12.2011 FOR SEEKING TIME AND PERMISSION TO FILE ADDITIONAL DOCUMENT/EVIDENCE, HOWEVER, NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE A ND THE ASSESSMENT ORDER WAS PASSED ON 28.12.2011, AND FURTHER ARGUED THAT NO PROPER AN D SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO EXPLAIN THE EXPENSES. THE LD. AR FO R THE ASSESSEE FURTHER ARGUED THAT THE EVEN THE ASSESSEE MADE A SUBMISSION TO THE LD CIT( A) THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN BY THE AO TO FURNISH THE DETAIL ABOUT THE EXPENSES OF FOREIGN TRIP. 17. THE LD. AR OF THE ASSESSEE FILED CERTAIN DOCUMENTS IN THE FORM OF PAPER BOOK CERTIFYING THAT DOCUMENTS CONTAINED IN THE PAPER BOOK WERE FI LED BEFORE THE AUTHORITIES BELOW. 18. WE HAVE GONE THROUGH THE CONTENTS OF PAGE NO. 44 OF THE PAPER BOOK WHICH CONTAINS THE DETAILS OF FOREIGN VISITS OF THE ASSESSEE DURING TH E YEAR 2006-07, WHICH SHOWS THAT THE ASSESSEE VISITED UK AND USA, AND ON 2 ND MAY 2006 THE ASSESSEE PAID RS. 57,022/- ON ACCOUNT OF AIR FAIR AND RS. 2,27,500/- ON ACCOUNT O F FOREIGN EXCHANGE AND ALL EXPENSES WERE BORNE BY HER HUSBAND FOR WHICH THE COPY OF STA TEMENT OF ACCOUNT OF EXPENSES PAID BY HER HUSBAND IS FILED (AT PAGE 53 OF PB), FURTHER , THE ASSESSEE VISITED THAILAND ON 7 TH 5 ITA NO. 7785/M/2012 SMT. VEENA M. DALAL OCTOBER 2006, UAE ON 01.12.2006 AND THE AIR FAIR OF RS. 8095/- AND FOREIGN EXCHANGE OF RS. 47,350/- WAS PAID THROUGH CHEQUES OF ICICI BANK /SOUTH INDIAN BANK, DETAILS OF WHICH HAS BEEN FURNISHED ALONG WITH THE COPY OF PAS SPORT. 19. WE HAVE GONE THROUGH THE RECORDS FILED BY THE ASSES SEE AND SUBMISSION MADE BY THE AR ON BEHALF OF THE ASSESSEE AND FIND THAT ALL NECESSA RY DETAILS WERE PROVIDED BY THE ASSESSEE TO THE CIT (A) AND THE ADDITION MADE BY AO WAS CONF IRM BY IGNORING THE DOCUMENTARY EVIDENCE, HENCE WE DELETE THE ADDITION OF RS. 5,00, 000/- MADE BY AO IN THE ASSESSMENT ORDER AND ACCEPT THE APPEAL ON THIS GROUND. 20. GROUND NO. 5 & 6 ARE CONSEQUENTIAL IN NATURE WHICH ARE IN RESPECT OF LEVY OF INTEREST U/S 234A AND 234C AND DOES NOT REQUIRE ANY ADJUDICATIO N AT OUR END. 21. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH JANUARY 2016. SD/- SD/- (N.K.BILLAIYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 13/01/2016 S.K.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. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/