Shri Jalendra Sahoo, Cuttack V. ITO, Ward-2(3), Bhubaneswar

ITA 9/CTK/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2212 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SATYAJIT MISHRA
• Keywords: Unexplained investment; Reassessment proceedings
• Section: 69C; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO. 9 /CTK/201 7 ( [ [ / ASSESSMENT YEAR : 20 1 3 - 20 1 4 ) ITO, WARD - 5(2), BHUBANESWAR VS. SHRI ALEKHA CHANDRA MISHRA, PLOT NO.902, BIDYUT MARG, SHASTRI NAGAR, MADHUSUDAN NAGAR, BHUBANESWAR - 751001 ./ ./ PAN/TAN NO. : BKMPM 1545 B ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI SUBHEN DU DUTTA, DR [ /AS SESSEE BY : SHRI SATYAJIT MISHRA , AR / DATE OF HEARING : 05 / 0 9 /201 8 / DATE OF PRONOUNCEMENT 6/ 9 /201 8 / O R D E R PER SHRI PAVAN KUMAR GADALE, J M : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A) - 2 , BHUBANESWAR , DATED 27.09.2017 IN I.T.APPEAL NO.0109/2016 - 17 FOR THE ASSESSMENT YEAR 2013 - 2014 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 44,80,000/ - MADE BY THE AO TOWARDS UNEXPLAINED INVESTMENT U/S 69C OF THE ACT, WHEN THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF INVESTMENT WITH SUPPORTIN G EVIDENCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS ON FACTS IN IGNORING THE REGISTERED SALE DEED CONFIRMING TH E TRANSACTION OF RS. 44,80,000/ - AND RELYING ON AN DECLARATION SUBMITTED BY A TH IRD PARTY I.E. M/S L.A DEVELOPERS, WHEN THE ASSESSEE COULD NOT PRODUCE DOCUMENTARY EVIDENCES SUBSTANTIATING THE TRANSFER /EXCHANGE OF THE HOUSE PROPERTY. ITA NO. 9 /1 7 2 3. THE APPELLANT CRAVES TO ALTER, AMEND OR ADD ANY OTHER GROUND THAT MAY BE CONSIDERED NECESSARY IN COURSE OF THE APPEAL PROCEEDING. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DISCLOSED INCOME FROM PENSION AND OTHER SOURCES AND HAS NOT FILE D THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. BASED O N INFORMATION OF PURCHASE OF IMMO VABLE PROPERTY BY THE ASSESSEE, THE AO INITIATED REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT WITH THE PRIOR APPROVAL OF JCIT, RANGE - 5, BHUBANESWAR AND ISSUED NOTICE U/S.148 OF THE ACT REQUESTING THE ASSESSEE TO FILE RETURN OF INCOME WITHIN 30 DAYS. HOWEVER, AS THE ASSESSEE DID NOT FILE THE RETURN OF INCOME, THE AO ISSUED NOTICE U/S.142(1) OF THE ACT ALONG WITH QUESTIONNAIRE . I N COMPLIANCE, THE ASSESSEE APPEARED AND THE CASE WAS DISCUSSED . SINCE THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE S OF INVESTMENT IN ACQUISITION O F THE PROPERTY , THE AO TREATED THE ENTIRE INVESTMENT AS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.48,88,280/ - AND PASSED ORDER U/S.144/147 OF THE ACT, DATED 31.10.2016. 4. AGGRIEVED BY THE ORD ER OF AO, THE ASSESSEE HAS FILED APPEAL BEFORE THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FINDINGS OF THE AO ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF THE CIT (A) THE REV ENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 7. LD. DR SUBMITTED THAT THE ORDER PASSED BY THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO TOWARDS UNEXPLAINED INVESTMENT ITA NO. 9 /1 7 3 U/S 69C OF THE ACT AS THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN ED THE SOURCE OF INVESTMENT AND RELIED ON THE ORDER OF AO AND PRAYED FOR ALLOWING THE APPEAL. 8. CONTRA, LD. AR SUPPORTED THE ORDER OF CIT(A) AND FILED THE PAPER BOOK AND SUBMITTED THAT THE CONSIDERATION WAS IN THE NATURE OF EXCHANGE OF ASSET AND ADDITION MADE BY THE AO UNDER THE PROVISIONS OF SECTION 69C OF THE ACT IS NOT TENABLE . T HE ASSESSEE ACQUIRED THE HOUSE PROPERTY AGAINST THE EXCHANGE OF HIS LAND TO THE DEVELOPERS WHICH IS NOT DISPUTED AND PRAYED FOR DISMISSAL OF REVENUE S APPEAL . 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON REC ORD. PRIMA FACIE, THE SOLE DISPUTED ISSUE IS WITH RESPECT TO DELETION OF ADDITION BY THE LD. CIT(A) MADE BY THE AO U/S.69C OF THE ACT. LD. DR EMPHASIZED THAT THE AO FOUND IN THE COURSE OF ASSESSMENT PROCEEDING THAT THE ASSESSEE HAS PURCHASED A PROPERTY BY REGISTERED SALE DEED AND THE SOURCE COULD NOT BE EXPLAINED, WHEREAS LD. AR SUBMITTED THAT THE PROPERTY WAS PURCHASED BY THE ASSESSEE BY REGISTERED SALE DEED DATED 29.01.2013 . LD. AR SUBMITTED THAT THE ASSESSEE WAS HAVING RESIDENTIAL PROPERTY AT ONE PL ACE AND POSSESSION WAS GIVEN TO DEVELOPER FOR CONSTRUCTION AND IN LIEU OF THE DELIVERY OF THE POSSESSION OF THE PROPERTY THE ASSESSEE ACQUIRED THE PRO PERTY THROUGH SALE DEED THROUGH THIRD PARTY AND THE DEVELOPER HAS CONFIRMED THAT TH E PAYMENT WAS MADE BY THEM TO THE THIRD PARTY THE LD. AR DEMONSTRATED THE DECLARATION IN PAPER BOOK AT ANNEXURE - 6 WHICH READS AS UNDER : - ITA NO. 9 /1 7 4 DECLARATION THE SALE DEED NO. 1081301812 DATED 29.01.2013 BETWEEN SMT. MAMATA PRADHAN AND SRI ALEKH CHANDRA MISHRA HAS B EEN EXECUTED ON BEHALF OF M/S. LA DEVELOPERS (P) LTD., ON A CONSIDERATION EXCHANGE OF PLOT NO.901(P) & 902(P), AREA : 45 DEC, KHATA NO.409, MOUZA : MADHUSUDAN NAGAR, UNIT - 14, UNDER BHUBANESWARTAHASIL LYING IN THE NAME OF SRI ALEKH CHANDRA MISHRA WITH PLOT NO. 904(P), KHATA NO. 38, AREA : 64 DEC, MOUZA : MADHUSUDAN NAGAR, UNIT - 14 UNDER BHUBANESWAR TAHASIL, ORIGINAL OWNER : SRI BALU BALABANTARAY, (GENERAL POWER OF ATTORNEY HOLDER OF SMT. KANAKLATA BALABANTARAY) SUBSEQUENTLY TRANSFERRED TO THE NAME OF SMT. MAM ATA PRADHAN AS PART OF OUR UPCOMING PROJECT. THE CONSIDERATION MENTIONED IN THE SALE DEED CITED ABOVE HAS BEEN PAID BY US ON A MUTUAL UNDERSTANDING THAT SRI MISHRA IS TO SELL HIS LAND MENTIONED ABOVE TO M/S. LA DEVELOPERS (P) LTD. WITHOUT ANY CONSIDERATIO N. THE DEED OF SALE/TRANSFER BY SRI MISHRA WILL BE EXECUTED AFTER MUTATION OF PLOT NO.904 IN HIS NAME OR IN THE NAME OF HIS NOMINEE AND APPROVAL OF THE BUILDING PLAN BY THE BHUBANESWAR DEVELOPMENT AUTHORITY BOTH OF WHICH ARE TO BE DONE BY M/S. LA DEVELOPER S (P) LTD. THIS DECLARATION IS MEANT FOR ALL OFFICIAL PURPOSES INCLUDING ALL TAXATION AND ALSO ALL LEGAL PURPOSES. FOR ANY FURTHER QUERIES, THE UNDERSIGNED MAY BE CONTACTED. DATED BHUBANESWAR THE 30 TH DAY OF OCTOBER 2016 FOR LA DEVELOPERS, (JASJEET SINGH) PARTNER THE MAIN CONTENTION OF LD. AR IS THAT AGAINST THE RESIDENTIAL PROPERTY OF THE ASSESSEE ACQUIRED BY THE BUILDER , THE ASSESSEE WAS ALLOTTED IN EXCHANGE THROUGH SALE DEED FROM ANOTHER PARTY WHICH DOES NO T FALL WITHIN THE PURVIEW OF PROVISIO NS OF SECTION 69 OF THE ACT . 10. FURTHER WE FOUND THAT THE CIT(A) HAS DEALT ON THE ISSUE AND OBSERVED AS UNDER : - 5. I HAVE CAREFULLY EXAMINED THE ASSESSMENT ORDER AND THE SUBMISSI ONS OF THE APPELLANT. AS PER THE SALE DEED DATED 29.01.2013 BETWEEN THE APPELLANT AND SMT. MAMTA PRADHAN, THE ITA NO. 9 /1 7 5 APPELLANT HAS PURCHASED NEW PROPERTY FROM SMT. MAMTA PRADHAN. ACCORDING TO THE DEED OF AGREEMENT DATED 29.12.2012 BETWEEN THE APPELLANT AND LA DEV ELOPERS, THE NEW PROPERTY AND THE OLD PROPERTY WILL BE EXCHANGED. AS PER THE AGREEMENT DATED 30.03.2013, BETWEEN RABINDRA PRADHAN (HUSBAND OF MAMTA PRADHAN) AND LA DEVELOPERS, SMT. MAMTA PRADHAN HAS OFFERED THE NEW PROPERTY TO THE APPELLANT AND SHE WILL GE T A FLAT BEING F/420, 4 FLOOR IN JYOSNA ENCLAVE NEAR MAY FAIR HOTEL FROM LA DEVELOPERS. THE REGISTRATION OF OLD PROPERTY IN THE NAME OF LA DEVELOPERS HAS NOT TAKEN PLACE AS THE TITLE OF NEW PROPERTY IS DEFECTIVE AND BUILDING PLAN HAS NOT BEEN APPROVED BY B HUBANESWAR DEVELOPMENT AUTHORITY. FURTHER, ACCORDING TO THE DECLARATION OF JASJEET SINGH, PARTNER OF LA DEVELOPERS, THE APPELLANT HAS NOT MADE ANY PAYMENT IN RESPECT OF THE SALE DEED BETWEEN MAMTA PRADHAN AND HIM. ALL OF THESE DOCUMENTS LEAD TO THE CONCLUS ION THAT THE APPELLANT HAS NOT MADE ANY PAYMENT FOR ACQUIRING NEW PROPERTY, BUT HE HAD EXCHANGED HIS OLD PROPERTY. CONSIDERING THESE ASPECTS, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 44,80,000/ - IS ORDERED TO BE DELETED. THE GROUNDS OF APPEAL ARE A LLOWED. 11. WE FOUND THAT THE ASSESSEE HAS DELIVERED THE POSSESSION OF THE PROPERTY AS ENVISAGED BY THE LD. AR TO THE BUILDER AND AGAINST THE POSSESSION THE ASSESSEE HAS PURCHASED ANOTHER RESIDENTIAL PROPERTY THROUGH SALE DEED MENTIONED IN THE DECLARATION AND THE CONSIDERATION WAS PAID BY THE DEVELOPER. WE ALSO OBSERVE FROM ANOTHER ANGLE THAT IF THE ASSESSEE HAS EXCHANGED THE PROPERTY AND CLAIMED EXEMPTION U/S.54F OF THE ACT, THE ADDITION CANNOT BE MADE UNDER THE PROVISIONS U/S.69C OF THE ACT . THE LD. AR FURTHER SUBMITTED THAT WITH COST INFLATION INDEXATION OF THE PROPERTY WHERE THE POSSESSION WAS GIVEN TO THE LAND DEVELOPERS AND COMPARING WITH THE VALUE OF THE NEW PROPERTY IN THE YEAR 2013, THE INDEXED VALUE OF OLD PROPERTY IS MORE THAN THE VALUE OF NEW PROPERTY AND IN FACT THERE SHALL BE LONG TERM CAPITAL LOSS TO THE ASSESSEE. WE CONSIDERING THE OBSERVATIONS OF CIT(A), FINDINGS OF AO, PROVISIONS OF LAW AND THE ARGUMENTS OF THE LD. AR, FOUND THAT THE CIT(A) HAS DEALT ON THE DISPUTED ISSUE AND ALSO CONSIDERED THE SUBMISSION OF THE ASSESSEE VIS - - ITA NO. 9 /1 7 6 VIS EXPLANATION AND DELETED THE ADDITION. ACCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF CI T(A) AND THE SAME IS UPHELD AND THE GROUNDS OF APPEAL OF REVENUE ARE DISMISSED. 1 2 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 6 / 09 /201 8 . S D/ - (N. S. SAINI) S D/ - ( PAVAN KUMAR GADALE ) / A CCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 6 / 09 /2018 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - ITO, WARD - 5(2), BHUBANESW AR 2. / THE RESPONDENT - SHRI ALEKHA CHANDRA MISHRA, PLOT NO.902, BIDYUT MARG, SHASTRI NAGAR, MADHUSUDAN NAGAR, BHUBANESWAR - 751001 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. [ / GUARD FILE. //TRUE COPY//