Sh. Jasvir Singh Mamta, Meerut V. ITO, Meerut

ITA 925/DEL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97319 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 12-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Capital asset; Business income; Source of fund; Valuation report
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 92 5 /DEL/201 5 AY: 200 9 - 10 SH. JASW EER SINGH MAMTA VS. ITO, WARD 1 (3) C/O SH. VK GOEL, ADVOCATE MEERUT 282, BOUNDARY ROAD CIVIL LINES MEERUT PAN: ARC P J 1042 L (APPELLANT) (RESPONDENT) APPELLANT BY : NONE . RESPONDENT BY : S MT. RAKHI VIMAL, JCIT ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LD.CIT(A) , MEERUT DATED 03.02. 201 5 PERTAINING TO THE ASSESSMENT YEAR (A.Y.) 200 9 - 10 . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THE APPLICATION FOR ADJOURNMENT IS REJECTED AND THE CASE DISPOSED OF EX PARTE QUA THE ASSESSEE ON MERITS. 3. HEARD SMT.RAKHI VIMAL, LD.JCIT, D.R. ON BEHALF OF THE REVENUE. 4. THE LD.CIT(A) AT PARA S 3.1 AND 3.2 HELD AS FOLLOWS. 3.1. THE RELEVANT FACTS ARE LIKE THIS. DURING THE COURSE OF APPEAL PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN CASH DEPOSIT OF RS.12,99,500/ - IN HIS SAVINGS BANK ACCOUNT. THE ASSESSEE REPLIED THAT HE HAS SOLD A PIECE OF AGRICULTURAL LAND SITUATED IN RURAL AREAS FOR A SALE CONSIDERATION OF RS.19,45,000/ - JOINTLY WITH HIS THREE BROTHERS. THE BROTHERS OF THE ASSESSEE HAD GIVEN THEIR SHARE OF SALE CONSIDERATION OF AGRICULTURAL LAND TO THE ASSESSEE FOR DEP OSITING IN HIS SAVINGS BANK ACCOUNT. COPY OF THE SALE ITA 925/DEL/2015 A.Y. 2009 - 10 SH.JASVIR SINGH MAMTA 2 DEED WAS ALSO ENCLOSED ALONG WITH ASSESSEE S SUBMISSIONS BEFORE THE A.O. THE AO HOWEVER CONSIDERED ONLY THE SHARE OF THE ASSESSEE IN THE SALE OF PROPERTY TO BE EXPLAINED SOURCE OF CASH. HE FURTHER C ONSIDERED DEPOSITS TOTALLING UPTO RS.3,20,500/ - AS EXPLAINED AS BUSINESS RECEIPTS AND THEREAFTER HE ADDED THE BALANCE AMOUNT OF RS.4,92,750/ - AS UNEXPLAINED DEPOSIT. 3.2. DURING THE COURSE OF APPEAL PROCEEDINGS, NO WRITTEN SUBMISSION WAS MADE BY THE AR OF THE ASSESSEE. THE DECISION ON GROUNDS OF APPEAL IS THEREFORE MADE ON THE BASIS OF STATEMENT OF FACT AND GROUNDS OF APPEAL. FROM THE FACTS OF THE CASE, IT DOES NOT APPEAR THAT THE ASSESSEE HAS SUBMITTED ANY PROOF WHICH WOULD SUBSTANTIATE THAT HIS THREE BROTHERS HAVE HANDED OVER THEIR SHARE OF SALE PROCEEDS TO THE ASSESSEE FOR DEPOSIT IN HIS BANK ACCOUNT. IT IS FURTHER SEEN THAT THE AO HAS NOT ADDED THE ENTIRE DEPOSIT IN T HE COMPUTATION OF INCOME RATHER HE HAS CONSIDERED A PART OF THE DEPOSITS AS EXPLAINED. IN THIS SITUATION THERE IS NO REASON FOR THE UNDERSIGNED TO INTERFERE WITH THE AO S OBSERVATIONS ON THIS POINT. THE GROUNDS OF APPEAL NOS. 5, 8, 10 AND 12 ARE ACCORDIN GLY DISMISSED AND ADDITION OF RS.4,92,750/ - IS CONFIRMED. 5. IN MY VIEW , THE SOURCE OF FUNDS CANNOT BE DISPUTED , AS IT IS FROM THE SALE OF PROPERTY. THE PROPERTY IN QUESTION WAS SOLD JOINTLY BY THE BROTHERS . T HE THREE BROTHERS NAMELY MR. BRAHAM SINGH, MR.YASHVEER SINGH AND MR.TEJVEER SINGH S/O SH.RAJ SINGH, IN THEIR STATEMENT HAVE SAID THAT THEY HAVE KEPT THEIR MONEY WITH THE ASSESSEE MR.JASVEER SINGH . THIS IN MY VIEW CANNOT BE DISBELIEVED. BROTHERS ARE NOT STRANGERS. THE ASSESSEE FI LD CONFIRMATION LETTERS FROM THE THREE BROTHERS , THAT THE AMOUNT WAS KEPT WITH THE ASSESSEE. UNDER THESE CIRCUMSTANCES THE ADDITION IN QUESTION IS DELETED AS THE SOURCE OF FUNDS HAVE BEEN EXPLAINED. 6. THE SECOND GROUND OF APPEAL RELATES TO THE ADDITI ON OF RS.1,82,090/ - . THE LD.CIT(A) AT PARA 5 HELD AS FOLLOWS. 5.1. THE RELEVANT FACTS ARE LIKE THIS. THE ASSESSEE HAD MADE INVESTMENTS IN PURCHASE OF PLOTS/IMMOVABLE PROPERTY. THE AO CAME TO A CONCLUSION THAT THE ASSESSEE DID NOT HAVE SUFFICIENT FUND T O EXPLAIN THE INVESTMENT IN PURCHASE OF IMMOVABLE PROPERTY. SINCE THE ONLY SOURCE OF FUND OF THE ASSESSEE WAS COMING FROM SALE OF LAND AND THE ASSESSEE S SHARE IN THE SALE PROCEEDS WAS ONLY 25%, THE ASSESSEE WAS HAVING A SHORTAGE OF CASH AMOUNTING TO RS.1 ,82,950/ - . THE AO THEREFORE ADDED THIS AMOUNT AS UNEXPLAINED INVESTMENT. ITA 925/DEL/2015 A.Y. 2009 - 10 SH.JASVIR SINGH MAMTA 3 5.2. IN THE GROUNDS OF APPEAL, THE ASSESSEE TOOK A PLEA THAT THE ENTIRE SALE PROCEEDS WAS AVAILABLE WITH HIM AND THEREFORE HE HAD SUFFICIENT FUND. HOWEVER, AS MENTIONED ABOVE IN PA RA 3.2, THE ASSESSEE HAS NO EVIDENCE TO SUBSTANTIATE THAT THE SHARES OF HIS BROTHERS HAVE BEEN GIVEN TO HIM FOR HIS OWN USE AND IT DOES NOT SEEM LOGICAL ALSO. THE GROUNDS OF APPEAL NOS. 7 AND 11 ARE THEREFORE DISMISSED AND ADDITION OF RS.1,82,950/ - IS CON FIRMED. 6.1 . IN VIEW OF THE REASONS GIVEN BY ME WHILE ALLOWING GROUND NO.1, THIS GROUND OF THE ASSESSEE IS ALSO ALLOWED. 7 . THE THIRD GROUND IS THE CLAIM OF DEDUCTION U/S 54F. THE LD.CIT(A) DISMISSED TH IS CLAIM OF THE ASSESSEE , FOR THE REASON THAT THE ASSESSEE HIMSELF HAS OFFERED THE GAIN ON SALE OF AGRICULTURAL LAND TO TAX , UNDER THE HEAD CAPITAL GAINS . IT WAS ONLY LATER THAT, W HEN EXEMPTION U/S 54 WAS DENIED TO THE ASSESSEE, THE CLAIM THAT THE AGRICULTURAL LAND IN QUE STION , WAS NOT A CAPITAL ASSET, WAS MADE ON THE GROUND THAT THE LANDS WERE LOCATED BEYOND 8 KMS FROM THE LIMITS OF MEERUT. 7.1 . BE IT AS IT MAY, I FIND THAT THE A.O. AT PARAS 11 AND 11.2 HELD AS FOLLOWS WHILE DISALLOWING DEDUCTIONS CLAIMED U/S 54F OF TH E INCOME TAX ACT, 1961 THAT : 11. NO DEDUCTION U/S 54 OR 54F IS ADMISSIBLE AGAINST THE PURCHASE OF PLOT OF LAND. AS REGARDS INVESTMENT IN CONSTRUCTION OF RESIDENCE THE ASSESSEE HAS FILED A CERTIFICATE FROM M/S GAURAV & ASSOCIATES GOVERNMENT REGISTERED VALUER 101 E, ADITYA PALACE, GARH ROAD, MEERUT DT. 27.2.2009 WHICH READS AS UNDER: THIS IS CERTIFY THAT THE CONSTRUCTION OF ONE ROOM ALONG WITH VERANDAH AT FIRST FLOOR BELONGING TO SHRI JASVEER SINGH S/O SHRI RAJ SINGH, SITUATED AT VILLAGE RAJPURA MAWANA ROAD, MEERUT HAS BEEN COMPLETED INCLUDING ALL FINISHING WORKS. THE AMOUNT UTILISED FOR THE ABOVE CONSTRUCTION WORKS DURING THIS FINANCIAL YEAR (2008 - 09) IS RS.2,52,000/ - (APX.) (RS.TWO LAC FIFTY TWO THOUSAND ONLY) 11.2. THE ASSESSEE WAS ASKED VIDE ORDER SHEET ENTRY DT. 7.12.2012 TO FILE VALUATION REPORT IN THE PRESCRIBED PROFORMA. HOWEVER, THE SAME HAS NOT BEEN FURNISHED TILL THE CLOSE OF HEARING THEREFORE, IT IS NOT APPARENT ON WHICH LAND CONSTRUCTION HAS BEEN MADE AND WHAT WAS THE AREA OF CONSTRUCTION AND THE ITA 925/DEL/2015 A.Y. 2009 - 10 SH.JASVIR SINGH MAMTA 4 BASIS OF ARRIVING AT THE INVESTMENT OF RS.25,200/ - . CONSEQUENTLY THE DEDUCTION U/S 54F OF THE IT ACT, 1961 IS NOT ADMISSIBLE. 7.2. I AM OF THE VIEW THAT THE DEDUCTION IN QUESTION CANNOT BE DENIED FOR THE REASON THAT , THE VALUATION REPORT IS NOT IN THE PRESCRIBED PROFORMA, WHEN THE ASSESSEE HAS FILED A CERTIFICATE FROM THE REGISTERED VALUER AND WHEN THE AUTHENTICITY OF THE CERTIFICATE IS NOT DISPUTED BY THE A.O. AND WHEN NO CONTRARY EVIDENCE IS BROUGHT ON RECORD BY THE A.O., TO DISCREDIT THE CLAIM OF THE ASSESSEE . THUS, I ALLOW GROUND NO.3 OF THE ASSESSEE. 8. IN THE RESULT THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH S EPTEMBER, 2015. SD/ - ( J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 11 TH SEPTEMBER, 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST.REGISTRAR, ITAT