Shri Jayendra K.Shukla, Baroda V. The Income tax Officer,Ward-2(1), Baroda

ITA 932/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6789 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-04-2011
• Assessment Year: 1994-1995
• Appeal Filed On: 12-03-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAWANSI
• Keywords: Unexplained investment; Source of fund; Cost of acquisition; Set aside
• Section: 143(3); 132

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MUKUL KR. SHRAWAT, JM AND D.C.AGRAWAL , AM JAYENDRA K. SHUKLA, 53/2, ARONODAY SOCIETY, ALKAPURI, BARODA. VS. INCOME-TAX OFFICER, WARD 291), BARODA. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SANJAY R. SHAH, AR RESPONDENT BY:- SHRI G. S. SOURYAWANSI, DR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUNDS :- 1(I) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CO NSIDERING AN AMOUNT OF RS.1,93,665/- OUT OF INVESTMENTS MADE IN FURNISH ING RESIDENTIAL BUNGALOW OF THE APPELLANT AT RS.18,38,125/- AS UNEX PLAINED AND CONFIRMING ADDITIONS MADE BY LEARNED AO U/S 69/69A TO THAT EXTENT. IT IS SUBMITTED THAT IT BE SO HELD NOW AND ADDITIONS OF RS.1,93,665/- CONFIRMED BY THE LD. CIT(A) BE DELETE D. (II) THE LD. CIT(A) ERRED IN CONFIRMING SUCH ADD ITIONS IN ASST. YEAR 1994-95 INSPITE OF THE FACT THAT ONLY RS.51,501/- O UT OF RS.1,93,665/- WHICH WERE HELD TO HAVE NOT BEEN EXPL AINED WAS PERTAINING TO THE ASST. YEAR 1994-95. IT IS SUBMITT ED THAT IT BE SO HELD NOW AND IF AT ALL IT IS HELD TO CONFIRM SUCH A DDITIONS THE SAME BE RESTRICTED TO RS.51,501/- FOR THE YEAR UNDER CON SIDERATION. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ADDITION OF RS.3,00,000/- PAID BY THE WIFE OF THE APPELLANT MRS . HANSA J. SHUKLA TOWARDS PURCHASE OF PROPERTY INSPITE OF THE APPELLANT HAVING ITA NO.932/AHD/2008 ASST. YEAR 1994-95 ITA NO.932/AHD/2008 ASST. YEAR 1994-95 2 PRODUCED ALL THE EVIDENCES REGARDING SUCH PAYMENT W HICH ARE MADE THROUGH NORMAL BANKING CHANNELS. IT IS SUBMITTED TH AT IT BE SO HELD NOW AND AN AMOUNT OF RS.3,00,000/- PAID BY WIFE OF THE APPELLANT MRS. HANSA J. SHUKLA BE TREATED AS EXPLAINED AND PA ID TOWARDS COST OF ACQUISITION OF THE RESIDENTIAL PROPERTY. 3. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIRE CTING THE LD. AO IN TAXING PERQUISITES VALUE OF THE FURNISHINGS MADE TO THE PROPERTY OF THE APPELLANT ON ACCOUNT OF FURNITURE ETC. OF THE V ALUE OF RS.16,40,490/-. IT IS SUBMITTED THAT IT BE SO HELD NOW AND ADDITIONS OF PERQUISITE VALUE BE DIRECTED TO BE DELETED. 2. THE FACTS OF THE CASE ARE THAT SEARCH U/S 132 WA S CARRIED OUT ON 19.7.1994. ASSESSMENT U/S 143(3) WAS COMPLETED ON 2 7.3.1997 IN WHICH AN ADDITION OF RS.56,49,889/- IN RESPECT OF UNEXPLA INED INVESTMENT IN HOUSE PROPERTY WAS MADE. IN APPEAL, LD. CIT(A) VIDE HIS ORDER DATED 23.3.1999 CONFIRMED AN ADDITION OF RS.22,88,778/- A ND ALLOWED THE RELIEF OF RS.33,66,111/- ON THE BASIS OF EVIDENCE FURNISHE D BY THE ASSESSEE BEFORE HIM. THE MATTER CAME UP BEFORE THE TRIBUNAL WHICH VIDE ITS ORDER DATED 25.4.2001 SET ASIDE THE MATTER TO THE FILE OF AO TO VERIFY THE SOURCE OF FUNDS IN RELATION TO PURCHASE/RENOVATION AND FUR NISHING OF THE HOUSE PROPERTY. IT ALSO DIRECTED TO ASCERTAIN WHETHER THE COMPANY M/S OJAS TECHNOCHEM PRODUCT LTD. HAD BORNE THE COST OF RENOV ATION AND FURNITURE ETC. DURING THE COURSE OF SET ASIDE PROCEEDINGS THE AO CARRIED OUT FURTHER ENQUIRIES, ASKED THE ASSESSEE TO FURNISH THE DETAIL S OF PURCHASE OF PROPERTY AND INVESTMENT MADE BY OJAS TECHNOCHEM PRODUCT LTD (OTPL) AND HOW THAT COMPANY HAS GIVEN TREATMENT OF THIS INVESTMENT IN ITS OWN BOOK. THE AO CARRIED OUT ENQUIRIES AND ACCEPTED THAT THERE IS A LOAN FROM OTPL FOR RS.30,10,805/- AND LOAN FROM GUJARAT CONCAST FOR A SUM OF RS.4 LACS, RESULTING IN EXPLAINED INVESTMENT OF RS.34,10,805/- AND UNEXPLAINED INVESTMENT OF RS.22,39,084/- OUT OF TOTAL INVESTMEN T IN THE PROPERTY AT RS.56,49,889/-. ITA NO.932/AHD/2008 ASST. YEAR 1994-95 3 3. THE LD. CIT(A) IN THE SECOND INNINGS EXAMINED TH E MATTER FURTHER AND FOUND THAT A SUM OF RS.18,34,155/- WAS INCURRED ON FURNISHING OF THE BUNGALOW. OUT OF SUM OF RS.18,34,155/- SPENT ON FUR NISHING, ONLY, A SUM OF RS.1,93,665/- COULD NOT BE VERIFIED WITH EITHER BANK STATEMENT OR CASH BOOK. THE ASSESSEE EXPRESSED INABILITY TO PRODUCE B ANK STATEMENT AFTER LAPSE OF 12 YEARS OR MORE. LD. CIT(A) ALSO FOUND TH AT ANOTHER SUM OF RS.3 LACS WAS NOT PROPERLY EXPLAINED. THIS SUM WAS CLAIMED TO HAVE BEEN PAID BY ONE SMT. HANSABEN J. SHUKLA TO THE VENDOR O F THE PROPERTY AND WAS GIVEN AFTER THE DATE OF SEARCH. THE CASE OF THE AO WAS THAT IF ANY PAYMENT IS MADE AFTER THE DATE OF THE SEARCH THEN I T WILL NOT EXPLAIN THE INVESTMENT AS POSSESSION OF THE PROPERTY HAS ALREAD Y BEEN GIVEN TO THE ASSESSEE. LD. CIT(A) SEEMS TO HAVE ACCEPTED THIS LO GIC AND CONFIRMED THE ADDITION OF RS. 3 LACS AS WELL AS OF RS.1,93,665/-. HE, HOWEVER, DIRECTED THAT OUT OF SUM OF RS.18,34,155/-, THE SUM OF RS.16 ,40,490/- TREATED AS EXPLAINED SHOULD BE TREATED AT PERQUISITE IN THE HA NDS OF THE ASSESSEE. BALANCE OF THE SUM WAS TREATED AS EXPLAINED BY THE LD. CIT(A). THE REVENUE SEEMS TO HAVE ACCEPTED HIS DECISION BY NOT FILING FURTHER APPEAL. 4. AGAINST THIS, THE LD. AR SUBMITTED THAT ONCE MAJ OR SUM OF RS.16,40,490/- IS ACCEPTED ON THE BASIS OF DOCUMENT S SUBMITTED BY THE ASSESSEE BEFORE LOWER AUTHORITIES, PARTICULARLY A C ERTIFICATE ISSUED BY OTPL THEN THERE IS NO REASON WHY THE REST OF THE SU M, BEING RS.1,93,665/-, SHOULD NOT BE ACCEPTED AS EXPLAINED. HE REFERRED TO THE CERTIFICATE ISSUED BY OTPL WHICH IS TO THE EFFECT T HAT IT HAS SPENT A SUM OF RS.18,34,125/- ON RENOVATION, REPAIR AND FURNISHING OF RESIDENCE OF SHRI JAYENDRA K. SHUKLA, THE CHAIRMAN AND MANAGING DIREC TOR OF THE COMPANY. IN THE SAME CERTIFICATE IT IS MENTIONED TH AT OTPL HAS PAID A SUM OF RS.30,10,805/- FOR PURCHASE OF THE PROPERTY, IN ADDITION ITA NO.932/AHD/2008 ASST. YEAR 1994-95 4 EXPENDITURE ON RENOVATION/REPAIR AND FURNISHING. TH E OLD RECORDS ARE MISSING AND THE AUTHORITIES HAVE RELIED ON THIS CER TIFICATE FOR ACCEPTING PART OF THE EXPLANATION. THEN THERE IS NO REASON WH Y OTHER SUM SHOULD NOT BE ACCEPTED. 5. THE LD. DR ON THE OTHER HAND, RELIED ON THE ORDE R OF LD. CIT(A). 6. IN RESPONSE, A SUM OF RS.3 LACS, LD. AR SUBMITTE D THAT PROPERTY IS STILL NOT REGISTERED IN THE NAME OF THE ASSESSEE DU E TO LITIGATION, EVEN THOUGH POSSESSION HAS BEEN TAKEN. THE SUM OF RS. 3 LACS WAS SUBSEQUENTLY PAID AFTER THE SEARCH AND MERELY BECAU SE IT WAS PAID AFTER THE SEARCH, THE EXPLANATION SHOULD NOT BE REJECTED. 7. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER S OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW ONCE THE AUTHORITIES HAVE ACCEPTED MAJOR PART OF INVESTMENT AS MADE BY OTPL EITHER BY WAY OF LOAN OR BY WAY OF RENOVATION/REPAIR AND FURNISHING ON THE BASIS OF CE RTIFICATE ISSUED BY IT THEN THERE IS NO REASON AS TO WHY SUM AT RS.1,93,66 5/- IS NOT ACCEPTED. IF NON-FURNISHING OF BANK STATEMENT CANNOT BECOME A BA SIS FOR REJECTING THE EXPLANATION IN RESPECT OF OTHER SUM OF RS.16,40,490 /- AND THEREBY ACCEPTING THE SAME THEN THERE IS NO REASON WHY THE SUM OF RS.1,93,665/- SHOULD ALSO NOT BE ACCEPTED. NON-AVAILABILITY OF BA NK STATEMENT SHOULD NOT BE TREATED AS REASON FOR REJECTING THIS PART OF THE SUM ALONE. AS A RESULT, EXPLANATION OF THE ASSESSEE IS ACCEPTED. HO WEVER, THIS SUM WILL ALSO BE TAKEN INTO ACCOUNT FOR CALCULATING PERQUISI TE. 9. REGARDING SUM OF RS.3 LACS, WE ARE OF THE VIEW T HAT MONEY HAS BEEN PAID BY ACCOUNT PAYEE CHEQUE WHICH IS NOT DOUB TED. THE PROPERTY IS ITA NO.932/AHD/2008 ASST. YEAR 1994-95 5 NOT REGISTERED IN THE NAME OF THE ASSESSEE.THEN PAY MENT FOR THE PROPERTY AFTER TAKING POSSESSION OR AFTER SEARCH CANNOT BE A GROUND FOR NOT ACCEPTING THE PAYMENT. WE ACCORDINGLY, HOLD THE EXP LANATION IN RESPECT OF SUM OF RS.3 LACS AS SATISFACTORY AND DELETE THIS ADDITION. 10. GROUND NO.3 IS NOT PRESSED BY THE LD. AR HENCE IT IS REJECTED. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 21/4/11. SD/- SD/- (MUKUL KR. SHRAWAT) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 21/4/11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NO.932/AHD/2008 ASST. YEAR 1994-95 6 1.DATE OF DICTATION 7/4/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 13/4/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..