Shri Kiritkumar A.Patel, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

ITA 828/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1145 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

ITA NO . 828 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH , AHMEDABAD [CORAM: PRAMOD KUMAR AM AND KUL BHARAT JM ] ITA NO. 828 / AHD / 2 0 1 2 ASSESSMENT YEAR: 200 8 - 09 KIRITKUMAR A. PATEL, ....... .. . ..... APPELLANT C/O. SHIVAM ENTERPRISE, LOWER - 4, SH IVAM COMPLEX, BHUYANGDEV CROSS ROAD, SOLA ROAD, AHMEDABAD. [PAN A BUPP 1242 J ] VS. ASSTT. COMMISSIONER OF INCOME TAX, .... ........ .... .. .. .. .... .. RESPONDENT CIRCLE - 6, AHMEDABAD. APPEARANCES BY: SUNIL H. TALATI , FOR THE APPELLANT D.V. SINGH, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : AUG 11 TH , 201 5 DATE OF PRONOUNCING THE ORDER : AUGUST 31 ST , 2015 O R D E R PER PRAMOD KUMAR AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 13 TH FEBRUA RY, 2012 PASSED BY THE LD. CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 2008 - 09, ON THE FOLLOWING GROUND S : - 1. THE LEARNED CIT(APPEALS) HAS ERRED BOTH IN LAW AND ON FA CTS IN CONFIRMING THE DISALLOWANCE OF RS.6,46,061/ - MADE BY THE ASSESSING OFFICER IN RESPECT OF THE GENUINE AND ITA NO . 828 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 2 OF 4 BONA FIDE CLAIM OF THE APPELLANT IN RESPECT OF COST OF IMPROVEMENT OF THE LAND IN QUESTION. IN LIGHT OF THE FACTS A ND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) OUGHT TO HAVE DELETED THE SAID ADDITION . I T IS SUBMITTED THAT THE SAME BE HELD SO NOW A ND COST OF IMPROVEMENT ON LAND BE ALLOWED AS CLAIMED. 2. THE ORDER PASSED BY THE LEARNED CIT(APPEALS) IS BAD IN LAW AND CONTRARY TO THE PROV ISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 2. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPASS OF MATERIAL F ACTS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER NOTICED THAT THE ASSESSEE HAS SHO WN COST OF IMPROVEMENT OF AN ASSET, WHICH WAS SOLD DURING THE RELEVANT PREVIOUS YEAR, AT RS.6,46,061 / - . THIS AMOUNT WAS TAKEN INTO ACCOUNT IN COMPUTATION OF CAPITAL GAINS. THE PAYMENTS FOR THIS EXPENDITURE WERE MADE TO VEENA ENTERPRISES AND VASUDEV ENTER PRISES, AND ASSESSING OFFICER DULY NOTICED THIS FACT. HOWEVER, HE DECLINED THIS COST OF IMPROVEMENT BEING TAKEN INTO ACCOUNT IN COMPUTATION FOR CAPITAL GAINS. WHILE DOING SO, HE OBSERVED AS FOLLOWS : - SINCE THE ASSESSEE HAS NOT FURNISHED THE COMPLETE DE TAILS OF PAYMENTS SAID TO HAVE BEEN MADE TO THE ABOVE STATED PA R TIES I.E. ONE IS VEENA ENTERPRISE AND SECOND IS VASUDEV ENTERPRISE. THE ASSESSEE WAS ASKED TO PRODUCE THE PER S ONS/CORRECT ADDRESS OF THE SAID ENTITIES WITH PAN BUT TILL DATE THE ASSESSEE HAS NOT PRODUCED THE SAME. 3. AGGRIEVED BY THE STAND OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT ( A ) . THE SPECIFIC GROUND OF APPEAL TAKEN BEFORE THE LD. CIT ( A ) WAS AS FOLLOWS : - THE LEARNED ASSESSING OFFICER HAS E RRED IN MAKING AN ADDITION OF RS.6,46,061/ - ON THE GROUND THAT THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE OR DETAILS IN RESPECT OF IMPROVEMENT COST PAID TO TWO CONCERNS, NA M E L Y ; VEENA ENTERPRISE AND VASUDEV ENTERPRISE INSPITE OF GIVING OPPORTUNITY. IT IS SUBMITTED THAT THE APPELLANT HAS COMPLETE DETAILS, VOUCHER AND PROOF OF EXPENDITURE INCURRED FOR FILLING UP A ND LEVELLING THE LAND. SUCH EXPENDITURE ARE DIRECTLY RELATED TO THE IMPROVEMENT AND DEVELOPMENT OF THE LAND AND THE S AME HAS TO BE ALLOWED WHILE COMPUTING TO T AL INCOME AS ENVISAGED U/S. 45 TO 49 OF THE INCOME TAX ACT. IT IS SUBMITTED THAT CAPITAL GAIN WORKED OUT BY THE APPELLANT BE ACCEPTED AND THE ADDITION OF R.6 ,46,061/ - BE DELETED. 4. LEANED CIT(A) DID NOT YIELD TO THE SUBMISSION OF THE ASSESS EE. HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER, AND JUSTIFIED THE SAME AS FOLLOWS : - ITA NO . 828 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 3 OF 4 2.2 I HAVE CAR E FULLY CONSIDERED THE RIV A L SUBMISSIONS. I HAVE ALSO PERUSED VARIOUS EVIDENCES PLACED ON RECORD BY THE APPELLANT. IT IS SEEN THAT THE TWO CONCERNS NAMELY VEENA ENTERPRISES AND VASUDEV ENTERPRISES, IN WHOSE NAME COST O F IM PROVEMENT 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 NU MBER ETC. WERE NOT FURNISHED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS . THE A.O. HAD DULY OBSERVED PRINCIPLES OF NATURAL JUSTICE AND CONFRONTED THE RESULTS OF THE INQUIRY TO THE APPELLANT. THE APPELLANT HAS NOT FURNISHED ANY EVIDENCES DURING THE ASSESSMENT PROCEEDINGS TO CONTROVERT THE FINDINGS OF LD. A.O. DURING THE APPELLATE PROCEEDINGS THE APPELL ANT HAS FILED THE SAME SET OF EVIDENCES AS WAS FILED BEFORE THE AO. IN MY CONSIDERED VIEW, THE EV IDENCES FURNISHED BEFORE THE A . O . WERE INSUFFICIENT TO PROVE THE GENUINENESS 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 ASSESSMENT OR DER. HOWEVER, PERUSAL OF THE ASSESSMENT ORDER REVELS THAT THE A.O. HAD DULY CONFRONTED THE FINDINGS OF HIS INQUIRIES TO THE APPELLANT. THI S WAY THE APPELLANTS ARGUMENTS ARE FOUND TO BE WRONG. IN VIEW OF THE ABOVE FACTS AND IN VIEW OF THE FACTS THAT DUR ING 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 DISALLOWANCE MADE BY LD. A.O. OF RS.12,75,213/ - AGAINST COST OF IMPROVEMENT IS CONFIRMED. THESE GROUNDS OF APPEAL RE DISMISSED. 5. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 7. WE HAVE NOTED THAT THE AUTHORITIES BELOW HAVE DECLINED ASSESSEE S CLAIM, FOR COST T O IMPROVEMENT OF RS.6,46, 0 61 / - PRIMARILY 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 WERE MADE BY ACCOUNT PAYEE CHEQUES, AND THAT THE DETAILS OF EXPENSES WERE BEFORE THE AUTHORITIES BELOW. THE ASSESSEE HAS FILED AN AF FIDAVIT 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 THESE PAR TIES, IT IS, IN OUR CONSIDERED VIEW, UNREASONABLE TO DECLINE THE DEDUCTION 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 FACTOR EVEN POINTING TOWARDS LACK OF BONAFIDES. ITA NO . 828 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 4 OF 4 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 OFFICE R FOR ADJUDICATION DENOVO IN THE LIGHT OF EVIDENCES FILED BY THE ASSESSEE. LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT OPPOSE THIS REQUEST. IN THIS VIEW OF THE MAT T ER, AND HAVING REGARD 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 ASSESSING OFFICER, WE MAY MAKE IT CLEAR 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. 10. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 31 ST DAY OF AUGUST, 2015. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 31 ST DAY OF AUGUST, 201 5 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD