Khushahmad Ismail Shaikh, Pune V. Income-tax Officer, Ward - 3(1), Pune

ITA 93/PUN/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9454 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 11-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHABANA PARVEEN
• Keywords: Business income; Additional evidence; Corroborative evidences; Capital Gains

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R. S. SYAL, VICE PRESIDENT AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NO.93/PUN/2018 / ASSESSMENT YEAR : 2010-11 KHUSHAHMAD ISMAIL SHAIKH, C/O PRAMOD P. KHANDEKAR, PRABHUKRUPA APARTMENTS, BEHIND S.B.I. KARVE ROAD, ERANDAVANE, PUNE-411004. PAN: ACEPS8282J .. /APPLICANT / V/S. ITO, WARD-3(1), PUNE. .. / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SMT. SHABANA PARVEEN / DATE OF HEARING : 17.08.2020 / DATE OF PRONOUNCEMENT : 19.08.2020 / ORDER PER S. S. VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27.10.2017 PASSED BY THE CIT(A)-1, PUNE FOR THE ASSESSMENT YEAR 2010-11. 2. WE FIND NO REPRESENTATION ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION FILED SEEKING ADJOURNMENT. THEREFORE, WE PROCEED TO HEAR THE LD. DR AND PASS ORDER BASING ON THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NO.1 IS RAISED CHALLENGING THE ACTION OF THE CIT(A) IN RESTRICTING THE ADDITION OF RS.10,11,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE 2 ITA NO.93/PUN/2018 CONTENTION OF THE ASSESSEE IS THAT HE PURCHASED A SHED WITH MATERIALS SCRAP ON 10.01.2009 FOR A CONSIDERATION OF RS.5,20,000/- OF WHICH PAID BY CROSS ACCOUNT PAYEE CHEQUE. THE SAID SHED WAS SHOWN IN THE BALANCE SHEET OF THE ASSESSEE. AGAIN ON 10.03.2010, HE SOLD THE SAID SHED IN PIECEMEAL TO MANY PURCHASERS FOR THE SAME CONSIDERATION WHICH WAS DEPOSITED IN HIS BANK ACCOUNT. WE NOTE THAT THE ASSESSEE CONTENDED THAT THE GENERATION OF SALE BILLS IN THE SCRAP BUSINESS IS A ROUTINE AND IN THE YEAR UNDER CONSIDERATION HE WAS NOT IN THE SAID BUSINESS. HE EXPLAINED TO THE ASSESSING OFFICER THAT ENTIRE CONSIDERATION OF RS.5,20,000/- WAS RECEIVED IN CASH FROM MANY PURCHASERS AND VERY DIFFICULT TO LOCATE THE SAID PURCHASERS AFTER A LAPSE OF TIME. 4. THE LD. DR, SMT. SHABANA PARVEEN CONTENDED THAT THE ASSESSEE HAS BEEN GIVEN AMPLE TIME IN THE ASSESSMENT PROCEEDINGS BUT HE COULD NOT PRODUCE ANY SUPPORTING EVIDENCE REGARDING HIS CLAIM. HE FILED ADDITIONAL EVIDENCE BEFORE THE CIT(A) AND THE SAME HAS BEEN FORWARDED TO THE ASSESSING OFFICER. IN THE REMAND PROCEEDINGS, THE ASSESSEE COULD NOT FILE ANY EVIDENCE. SHE SUBMITTED THAT THE CLAIM OF SELLING THE SCRAP SHED IN PIECEMEAL TO MANY PURCHASERS FOR THE SAME CONSIDERATION OF RS.5,20,000/- IN CASH CANNOT BE ACCEPTED AND THE CIT(A) RIGHTLY HELD THE SAME AS AN AFTERTHOUGHT. THE LD. DR SUPPORTED THE ORDER OF THE CIT(A). 5. ON PERUSAL OF THE ASSESSMENT ORDER AT PARA 3, WE NOTE THAT THE ASSESSEE HAVING LARGE HOLDING OF SMALL PLOTS OF LAND AND FLATS. THE PLOTTING HAS BEEN DONE OF A LARGER PLOT AND AFTER SELLING FROM YEAR TO YEAR THE ASSESSEE HAS SHOWN BALANCE STOCK OF A-1 TO 26, B-1 TO 7, C-1 TO 5 AS ON 31.03.2010. THE ASSESSEE WAS CLAIMED SHORT TERM AS WELL AS LONG TERM CAPITAL GAINS AND SET OFF AGAINST CARRY FORWARD SHORT TERM CAPITAL LOSS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER CONSIDERED THE TOTAL PROFIT OF RS.1,97,258/- AS BUSINESS INCOME BUT NO SET OFF WAS ALLOWED AGAINST THE SHORT TERM CAPITAL LOSS CARRY 3 ITA NO.93/PUN/2018 FORWARD BY THE ASSESSEE. THEREFORE, WE FIND THAT THE ASSESSEE WAS HOLDING OF SMALL PLOTS OF LAND AND FLATS REFLECTED IN THE BALANCE SHEET AND THERE IS NO DISPUTE BY THE ASSESSING OFFICER IN THIS REGARD. ADMITTEDLY, THE ASSESSEE PLEADED IN THE ASSESSMENT PROCEEDINGS TO TREAT AN ITEM DISPOSED OFF WHICH IS REFLECTED IN THE BALANCE SHEET. FURTHER, WE NOTE THAT THE ASSESSEE FILED CONFIRMATION LETTERS FROM REST OF THE SCRAP PURCHASERS BEFORE THE CIT(A) AND THERE WAS NO DENIAL IN THIS REGARD. THEREFORE, WE FIND FORCE IN THE SUBMISSIONS OF ASSESSEE MADE BEFORE THE AUTHORITIES TO TREAT THE CASH DEPOSITS INVOLVING RS.5,20,000/- ARE THE PROCEEDS OF AN ITEM REFLECTED IN THE BALANCE SHEET WERE DEPOSITED IN THE BANK. THUS, THE ADDITION OF RS.5,20,000/- DOES NOT STAND AND IS DELETED. THE ORDER OF CIT(A) IS NOT JUSTIFIED AND GROUND NO.1 RAISED BY ASSESSEE IS ALLOWED. 6. GROUND NO.2 RAISED BY THE ASSESSEE CHALLENGING THE ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION ON ACCOUNT OF SELLING OF CARS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WE NOTE THAT NO EVIDENCE WHATSOEVER FILED BEFORE THE ASSESSING OFFICER REGARDING THE CASH DEPOSIT AROSE ON THE SALE OF TWO CARS. THE ASSESSEE FILED CONFIRMATION LETTER AS WELL AS AGREEMENT BETWEEN HIS AGENT AND PURCHASER BEFORE THE CIT(A) BY WAY OF AN ADDITIONAL EVIDENCE, THE CIT(A) SOUGHT REMAND REPORT. THE CONTENTION OF THE ASSESSEE WAS THAT THE SKODA SUPERB CAR WAS AN ACCIDENT AFFECTED CAR PURCHASED FROM NEW INDIA ASSURANCE CO. LTD. CONFIRMING THE SAME A LETTER WAS FILED. ANOTHER CAR BY NAME TAVERA WAS PURCHASED THROUGH REFERENCE AND THE INTENTION TO PURCHASE THE SAID TWO CARS WAS TO OPEN A GARAGE AND TO SELL THE SAID CARS AFTER RECONDITIONING. THE IDEA OF OPENING GARAGE WAS NOT AFFECTED AND HE SOLD THE SAID TWO CARS THROUGH ONE AGENT BY NAME FEROZ KADAR JAMADAR AND IN TURN THE SAID AGENT SOLD TO SHRI SATISH CHANDRAKANT SHINDE. THE COPY OF THE AGREEMENT BETWEEN THE SAID AGENT AND 4 ITA NO.93/PUN/2018 THE PURCHASER DATED 08.10.2009 HAS BEEN EXAMINED BY THE CIT(A). ACCORDING TO THE CIT(A), THE SAID AGREEMENT DOES NOT SHOW SALE OF TAVERA CAR AND THE SALE AGREEMENT FOR RS.7,00,000/- IS IN RESPECT OF TWO CARS AFTER WHICH ONE SKODA SUPERB CAR BELONGING TO THE ASSESSEE AND ANOTHER CAR BELONG TO SAID AGENT. THE CIT(A) HELD THAT THERE WAS NO WHISPER IN THE AGREEMENT REGARDING THE OTHER TAVERA CAR AND ACCEPTED THE SALE IN RESPECT OF SKODA SUPERB CAR AND DISALLOWED RS.3,50,000/- (RS.7,00,000/- MINUS RS.3,50,000/-). THE FACT REMAINS ADMITTED THERE WAS NO EVIDENCE BEFORE THE LOWER AUTHORITIES INCLUDING THIS TRIBUNAL FOR SHOWING SALE CONSIDERATION RECEIVED IN CASH FOR THE SALE OF TAVERA CAR. THEREFORE, IN OUR OPINION, THE ORDER OF THE CIT(A) IS JUSTIFIED AND NO INTERFERENCE FROM THIS TRIBUNAL IS REQUIRED. THUS, THE GROUND NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 19 TH DAY OF AUGUST, 2020. SD/- SD/- ( R. S. SYAL ) ( S. S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 19 TH AUGUST, 2020 SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, PUNE; 4. THE PR. CIT-3, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.