Shri Narendrakumar S.Patel, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

ITA 827/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9550 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SUTARIA
• Keywords: Principle of natural justice; Cost of acquisition; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV , JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO. 827/AHD/2012 ASSESSMENT YEAR :2008-09 SHRI NARENDRAKUMAR S. PATEL 4, PRASHTHAN-1 BUNGALOWS, NR. NIRMAN COMPLEX, R. C. TECHNICAL ROAD, GHATLODIYA, AHMEDABAD V/S . ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6, AHMEDABAD PAN NO. ACDPP6122H (APPELLANT) .. (RESPONDENT) ' /BY ASSESSEE SHRI SUNIL TALATI, A.R. $ ' / BY REVENUE SHRI DEEPAK SUTARIA, SR. D.R. % ' /DATE OF HEARING 13.01.2016 &'() ' /DATE OF PRONOUNCEMENT 12.02.2016 O R D E R PER : SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF CIT(A)-XI, AHMEDABAD, DATED 14.02.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVIN G INCOME FROM PARTNERSHIP FIRM, CAPITAL GAINS AND OTHER SOURCES. ASSESSEE ELECTRONICALLY FILED HIS RETURN OF INCOME FOR A.Y. 2008-09 ON 07.10.2008 DECLARING TOTAL INCOME OF RS.2,64,780/-. ASSESSEE SUBSEQUENTLY ON 08.01.2010 REVISED THE RETURN OF INCOME SHOWING THE INCOME OF RS.24,66,100/-. THE C ASE WAS SELECTED FOR ITA NO. 827/AHD/2012 A.Y. 08-09 [SHRI NARENDRAKUMAR S. PATEL VS. ACIT] PAGE 2 SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.1 43(3) VIDE ORDER DATED28.12.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS.37,41,310/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESS EE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED14.02.201 2 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A) , ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING EFFECTIVE GROUND: 1. THE LEARNED CIT(APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.12,75,213/- MADE BY THE ASSESSIN G OFFICER IN RESPECT OF THE GENUINE AND BONA FIDE CLAIM OF THE APPELLANT IN RESPECT OF COST OF IMPROVEMENT OF THE LAND IN QUESTION. IN LIGHT OF T HE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) OUGHT TO HAVE DELETED THE SAID ADDITION. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW AND CO ST OF IMPROVEMENT ON LAND BE ALLOWED AS CLAIMED. 4. DURING COURSE OF ASSESSMENT PROCEEDINGS, ASSESSI NG OFFICER NOTICED THAT ASSESSEE HAD TRANSFERRED LAND ADMEASURING 3743 SQ.MTR. SITUATED AT CHANDKHEDA VIDE SALE DEED NO. 5672/2008 REGISTERED ON 23.03.2008 ALONG WITH 8 OTHER CO-OWNERS AND CONSIDERATION MENTIONED IN THE REGISTERED SALE DEED WAS RS.98,76,000/-. ASSESSEE BEING 15% OWNER OF THE LAND, HIS SHARE OF CONSIDERATION OF RS.14,81,400/- WAS REFLECTED IN THE ORIGINAL RETURN OF INCOME. ASSESSEE HAD SHOWN PURCHASE COST OF RS.97, 650/- AND HAD CONSIDERED THE IMPROVEMENT COST OF RS.12,75,213/- W HICH WAS STATED TO HAVE BEEN PAID TO VEENA ENTERPRISES AND VASUDEV ENTERPRI SE AND AFTER REDUCING THE COST OF IMPROVEMENT AND PURCHASE COT AGGREGATIN G TO RS.13,72,863/-HAD ARRIVED AT SHORT TERM CAPITAL GAIN OF RS.1,08,537/- . IN THE REVISED RETURN OF INCOME, ASSESSEE ADOPTED SALE VALUE OF LAND AT RS.3 6,82,710/- AND AFTER REDUCING THE COST OF RS.13,72,863/- ARRIVED AT SHOR T TERM CAPITAL GAIN OF RS.23,09,847/-. ASSESSING OFFICER ON CONDUCTING TH E ENQUIRY NOTICED THAT THE AFORESAID TWO ENTITIES NAMELY VEENA ENTERPRISES AND VASUDEV ENTERPRISE TO WHOM ASSESSEE HAD STATED TO HAVE PAID IMPROVEMENT C OST DID NOT EXIST. THE ASSESSEE WAS THEREFORE ASKED TO PRODUCE THE PERSONS TO WHOM HE HAD STATED TO HAVE BEEN PAID THE IMPROVEMENT COST AND TO SUPPO RT HIS CLAIM TOWARDS IMPROVEMENT COST. ASSESSING OFFICER NOTED THAT DES PITE VARIOUS OPPORTUNITIES ASSESSEE FAILED TO PRODUCE THE PERSONS. HE, THEREF ORE, DISALLOWED THE IMPROVEMENT COST OF RS.12,75,213/-. ITA NO. 827/AHD/2012 A.Y. 08-09 [SHRI NARENDRAKUMAR S. PATEL VS. ACIT] PAGE 3 5. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, AS SESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER O F ASSESSING OFFICER BY HOLDING AS UNDER: 2.2 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. I HAVE ALSO PERUSED VARIOUS EVIDENCES PLACED ON RECORD BY THE APPELLANT . IT IS SEEN THAT THE TWO CONCERNS NAMELY VEENA ENTERPRISES AND VASUDEV ENTER PRISES, IN WHOSE NAME COST OF IMPROVEMENT EXPENSES HAD BEEN INCURRED , WERE FOUND TO BE NON-EXISTENT. THE A.O. HAD CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT THE INCOME-TAX PARTICULARS LIKE PERMANENT ACCOUNT N UMBER ETC. WERE NOT FURNISHED BY THE APPELLANT DURING THE ASSESSMENT PR OCEEDINGS. THE A.O. HAD DULY OBSERVED PRINCIPLES OF NATURAL JUSTICE AND CON FRONTED THE RESULTS OF THE INQUIRY TO THE APPELLANT. THE APPELLANT HAS NOT FUR NISHED ANY EVIDENCES DURING THE ASSESSMENT PROCEEDINGS TO CONTROVERT THE FINDIN GS OF LD. A.O. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS FILED THE S AME SET OF EVIDENCES AS WAS FILED BEFORE THE A.O. IN MY CONSIDERED VIEW, TH E EVIDENCES FURNISHED BEFORE THE A.O. WERE INSUFFICIENT TO PROVE THE GENU INENESS OF THESE PARTIES IN THE LIGHT OF INQUIRIES CONDUCTED BY THE A.O. DURING THE APPELLATE PROCEEDINGS, IT WAS ALSO SUBMITTED BY THE APPELLANT THAT THE A.O . HAS NOT OBSERVED PRINCIPLES OF NATURAL JUSTICE WHILE PASSING THE ASS ESSMENT ORDER. HOWEVER, PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE A. O. HAD DULY CONFRONTED THE FINDINGS OF HIS INQUIRIES TO THE APPELLANT. THIS WA Y THE APPELLANTS ARGUMENTS ARE FOUND TO BE WRONG. IN VIEW OF THE ABOVE FACTS A ND IN VIEW OF THE FACT THAT DURING THE APPELLATE PROCEEDINGS ALSO THE APPELLANT HAS FAILED TO FILE COGENT EVIDENCES TO CONTROVERT THE FINDING OF THE LD. A.O. , I AM INCLINED TO AGREE WITH THE DISALLOWANCE MADE BY THE LD. A.O. THE DISALLOWA NCE MADE BY LD. A.O. OF RS.12,75,213/- AGAINST COST OF IMPROVEMENT IS CONFI RMED. THESE GROUNDS OF APPEAL ARE DISMISSED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE I S NOW IN APPEAL BEFORE US. 6.1 BEFORE US, AT THE OUTSET LD. A.R. SUBMITTED THA T THE ISSUE IS COVERED IN ASSESSEES FAVOUR BY THE DECISION OF THE CO-ORDINAT E BENCH IN CASE OF OTHER CO-OWNERS IN ITA NO.828/AHD/2012, ORDER DATED AUGUS T 31 ST , 2015 IN CASE OF KIRITKUMAR A. PATEL VS. ACIT. HE ALSO PLACED ON RE CORD THE COPY OF THE AFORESAID ORDER. HE FURTHER SUBMITTED THAT THE FAC TS OF THE CASE IN THE PRESENT APPEAL ARE IDENTICAL TO THAT OF KIRITKUMAR A. PATEL AND SINCE IN THAT CASE, THE CO-ORDINATE BENCH OF TRIBUNAL HAS RESTORED THE ISSU E TO THE FILE OF ASSESSING OFFICER, THE MATTER IN THE PRESENT APPEAL MAY ALSO BE RESTORED TO ASSESSING OFFICER. BEFORE US, LD. D.R. DID NOT CONTROVERT TH E SUBMISSIONS MADE BY LD. A.R. ITA NO. 827/AHD/2012 A.Y. 08-09 [SHRI NARENDRAKUMAR S. PATEL VS. ACIT] PAGE 4 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ABOUT DI SALLOWANCE OF IMPROVEMENT EXPENSES. BEFORE US, LD. A.R. SUBMITTED THAT IN TH E CASE OF KIRITKUMAR A. PATEL, ONE OF THE CO-OWNERS, THE MATTER WAS RESTORE D TO THE FILE OF ASSESSING OFFICER BY THE CO-ORDINATE BENCH OF THE TRIBUNAL. THE AFORESAID SUBMISSIONS OF LD. A.R. HAS NOT BEEN CONTROVERTED BY THE REVENU E. WE FIND THAT THE CO- ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.828/AHD/20 12 (SUPRA) HAS RESTORED THE ISSUE TO THE FILE OF ASSESSING OFFICER BY HOLDI NG AS UNDER: 7. WE HAVE NOTED THAT THE AUTHORITIES BELOW HAVE D ECLINED ASSESSEE'S CLAIM, FOR COST TO IMPROVEMENT OF RS.6,46,061/- PRI MARILY ON THE GROUND THAT RELATED EVIDENCES WERE NOT PRODUCED BEFORE THEM AND ON THE GROUND THAT VEENA ENTERPRISES AND VASUDEV ENTERPRISES FOUND TO BE NON-EXISTENT. HOWEVER, WE FIND THAT PAYMENT TO THESE CONCERNS WER E MADE BY ACCOUNT PAYEE CHEQUES, AND THAT THE DETAILS OF EXPENSES WER E BEFORE THE AUTHORITIES BELOW. THE ASSESSEE HAS FILED AN AFFIDAVIT TO THAT EFFECT, WHICH HAS NOT BEEN CONTROVERTED. THE DETAILS OF THE EXPENSES HAVE ALSO BEEN FILED BEFORE US, DULY SUPPORTED BY COPIES OF BILLS AND VOUCHERS, AT PAGES 37 TO 66 OF THE PAPER BOOK. AS FOR FILING OF PAN DETAILS AND PRODUCING TH ESE PARTIES, IT IS, IN OUR CONSIDERED VIEW, UNREASONABLE TO DECLINE THE DEDUCT ION ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE THE RECIPIENT OR PAN DETAILS OF RECIPIENT YEARS AFTER THE TRANSACTIONS TOOK PLACE - PARTICULARLY WHEN PAYMENTS HAVE BEEN MADE BY CHEQUE AND THERE IS NO OTHER FACT OR EVEN POINTING TOWARDS LACK OF BONAFIDES. 8. LEARNED COUNSEL FOR THE ASSESSEE HAS, HOWEVER, BEEN FAIR ENOUGH TO STATE THAT HE HAS NO OBJECTION TO THE MATTER BEING REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DENOVO IN THE LI GHT OF EVIDENCES FILED BY THE ASSESSEE. LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT OPPOSE THIS REQUEST. IN THIS VIEW OF THE MATTER, AND HAVING REG ARD TO ENTIRETY OF THE CASE, WE HEREBY REMIT THE MATTER TO THE FILE OF THE A.O. FOR ADJUDICATION DENOVO IN THE LIGHT OF OUR ABOVE OBSERVATIONS, IN ACCORDANCE WITH THE LAW AND IN A FAIR AND OBJECTIVE MANNER. 9. AS WE REMIT THE MATTER TO THE FILE OF THE ASSESS ING OFFICER, WE MAY MAKE IT DEAR THAT THE ASSESSEE'S INABILITY TO FILE PAN DETAILS OR TO PRODUCE THE RECIPIENT OF PAYMENTS, ON THESE FACTS, WILL NOT BE CONCLUSIVE ON THE QUESTIONS OF BONAFIDES OF PAYMENTS. SINCE BEFORE US, IT IS ADMITTED BY BOTH THE PARTIES THAT FACTS OF THE PRESENT CASE ARE IDENTICAL TO THAT OF KIRITKUMAR A. PATEL, WE, THEREFORE, FOR SIMILAR REASONS AND SIMILAR DIRECTIONS RESTORE THE ISSUE TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLE SS TO STATE THAT ASSESSING ITA NO. 827/AHD/2012 A.Y. 08-09 [SHRI NARENDRAKUMAR S. PATEL VS. ACIT] PAGE 5 OFFICER SHALL PROVIDE ADEQUATE OPPORTUNITY OF HEARI NG TO THE ASSESSEE. THUS, THE GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 12/02/2016 SD/- SD/- ( SHAILENDRA KUMAR YADAV ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBE R TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- *+ , -. / APPELLANT /+ 01-. / RESPONDENT 2+ 345 6 / CONCERNED CIT 4+ 6- , / CIT (A) 9+ :; < 045 , 45) = 3 / DR, ITAT, AHMEDABAD >+ < ?@ A B / GUARD FILE. BY ORDER/ ,/= ,$ , 45) = 3