The ACIT, Circle-6, Surat V. Shri Ilyas Chhota Badat L/h of Late Chhota M.Badat, Surat

ITA 939/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9687 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Additional evidence; Cost of acquisition
• Section: 131; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I R. P. TOLANI , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CIRCLE - 6, SURAT (APPELLANT) VS LATE SHRI CHHOTA MOHMMAD BODAT, LEGAL HEIR SHRI ILYAS CHHOTA BADAT, JADAVAT FALIA, MOTA VARACHHA, SURAT - 394101 (RESPONDENT) REVENUE BY : S H RI JAMES KURIAN , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 29 - 11 - 2 016 DATE OF PRONOUNCEMENT : 23 - 12 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2009 - 10 , AR I SES FROM ORDER OF THE CIT(A) - I, SURAT DATED 18 - 01 - 2013 IN APPEAL NO. CAS - I/ TFR/6.56.195 /12 - 13 , IN PROCEEDINGS UNDER SEC TION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 939 / A HD/20 13 A SSESS MENT YEAR 200 9 - 10 I.T.A NO. 939 /AHD/20 13 A.Y. 2009 - 10 PAGE NO ACIT VS. LATE SHRI CHHOTA MOHMMAD BODAT 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS O F APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION FROM RS.92,00,000/ - TO RS.21,17,500/ - MADE ON ACCOUNT OF UNACCOUNTED SALE CON SIDERATION OF IAND NOT OFFERED TO TAX. 2. THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE A.O. IN CONTRAVENTION OF RULE 46A. HE HAS ADMITTED ADDITIONAL EVIDENCE IN THE FORM OF LETTER DATED 04 - 11 - 2011 ALLEGED TO HAVE BEEN FILED BEFORE THE A.O. AND ALSO 'COPY OF SALE DEED OF THE LAND TO ARRIVE AT HIS CONCLUSION THAT THE LAND WAS OWNED BY FOUR CO - OWNERS WITH THE ASSESSEE'S SHARE BEING ONLY 25%. 3. THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE IN RESPEC T OF COST OF ACQUISITION OF RS.7,30,000/ - OF LAND WITHOUT ANY CONCRETE EVIDENCE OF THE SAME BY THE ASSESSEE AND IN ABSENCE OF ANY CLAIM BY HIM BEFORE THE A.O. AND ALSO WITHOUT ANY OPPORTUNITY TO THE A.O. UNDER RULE 46A OF THE I.T. RULES. 4. ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A), SURAT MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER'S ORDER MAY BE RESTORED. 5. WITHOUT PREJUDICE TO GROUNDS TAKEN ABOVE, IT IS PRAYED THAT, HON'BLE ITAT DIRECT THE A.O. TO TAKE ACTION TO BRING TAX INCOME ESCAPING ASSESSMENT IN THE HANDS OF CO - OWNERS WHICH HAS BEEN DUE TO THE WILLFUL NON - COMPLIANCE OF THE ASSESSEE IN S UBMITTING THE COPY OF THE SALE DEED BEFORE THE A.O. ALL THE GROUNDS OF APPEAL ARE CONNECTED TO THE COMMON ISSUE SO WE ARE DECIDING THESE GROUNDS OF APPEAL TOGETHER. 3. T HIS CASE WAS REOPENED BY THE ASSESSING OFFICER AFTER RECEIVING A REPORT FROM THE ITO ( INVESTIGATION) , SURAT STATING THAT THE ASSESSEE HAD RECEIVED UNACCOUNTED INCOME OF RS.92 L A C FROM SALE OF AGRICULTURAL LAND DURING THE FINANCIAL YEAR 2003 04 RELEVANT TO I.T.A NO. 939 /AHD/20 13 A.Y. 2009 - 10 PAGE NO ACIT VS. LATE SHRI CHHOTA MOHMMAD BODAT 3 ASSESSMENT YEAR 2004 05 WHICH HAD NOT BEEN OFFERED TO TAX. THEREAFTER T HE ASS ESSING OFFICER VERIFIED THE RECORD AND FOUND THAT THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004 - 05 .HE ALSO MENTIONED THAT ASSESSEE WAS NOT HAVING THE PAN. THE ASSESSING OFFICER WAS OF THE OPINION THAT I NCOME TO THE EXTENT OF RS.92 L A C HA D ESCAPED ASSESSMENT WITHIN THE MEANING OF THE PROVISIONS OF SECTION 147 OF THE ACT . THEREFORE, , THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE U/S 148 OF THE ACT BY THE ASSESSING OFFICER . THE ASSESS ING OFFICER STSTED THAT T HE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME IN SPITE OF ISSUING OF NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSEE HAD ALSO NOT FILED THE VARIOUS DETAILS/INFORMATION AS REQUIRED BY THE ASS ESSING OFFICER BY ISSUING OF VARIOUS NOTICES AND LETTERS. DURING THE COURSE OF VERIFICATION BY THE ITO (INVESTI GATION) U/S 131 OF THE ACT SHRI ILYAS CHHOTA BADAT S/O S HRI CHHOTA MOHAMMAD BADAT ATTENDED BEFORE THE ITO (INVESTI GATION) AND EXPLAINED THAT HIS FATHER WAS EXPIRED ON 01.02.2008 AND PRODUCED THE DEAT H CERTIFICATE . HE ALSO STATED THAT HIS FATHER HAD SOLD TWO PIECE S OF AGRICULTURAL LAND. HE FURT HER EXPLAINED THAT THE PROCEEDS OF THE SALE CONSIDERATION WAS TO BE DISTRIBUTED AMONG THE SIX CHILDREN (2 SONS AND 4 DAUGHTERS) OF LATE S H RI CHHOTA MOHAMMAD BADAT. T HE ASSESSING OFFICER ASSESSED THE INCOME U/S144 OF THE ACT B ECAUSE OF NON - COMPLIANCE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS . T HE ASSESSING OFFICER ASS ESSED THE RECEIPT OF RS.92 LAKH IN THE HAND OF LATE S HRI CHHOTA MOHAMMAD BADAT ON SUBSTANTIVE BASIS AND STATED I.T.A NO. 939 /AHD/20 13 A.Y. 2009 - 10 PAGE NO ACIT VS. LATE SHRI CHHOTA MOHMMAD BODAT 4 THAT 1/ 6TH SHARE OF SALE CONSIDERATION ALSO TO BE TAXED IN THE HANDS OF SIX CHILDREN OF LATE SHRI CHHOTA MOHAMMAD BADAT ON PROTECTIVE BASIS. 4. AGGRIEVED AGAI NST THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE HAD FILED APPEAL BEFOR E THE LEARNED CIT(A). WHILE DECIDING THE APPEAL, LEA RNED COMMISSIONER OF INCOME TAX( APPEAL ) STATED THAT ASSESSEE VIDE LETTER DATED 04.10.2011 CLAIMED BEFORE THE ASSESSING OFFICER THAT HE HAD ONLY 20% OWNER SHIP OF THE LAND. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) , HE FURTHER STATED THAT BECAUSE OF THE DEATH OF ONE OF THE CO - OWNER AMINA MOHD BADAT WHO WAS NOT HAVING ANY HEIR, THE SHARE OF EACH CORE OWNER BEC A ME 25%.THE LD. CIT(A) STATED THAT THE ASSESSEE SUBMITTED THAT AT THE TIME OF EXECUTION OF SALE DEED THE REMAINING THREE CO - OWNER WERE ALSO DIED AND NAME OF THEIR LEGAL HEIRS WERE ENTERED IN THE REVENUE RECORD. THE LD. CIT (A) HELD THAT THERE WERE FOUR CO - OWNERS OF THE LAND WHOSE INDIVIDUAL SHARE COULD NOT BE ASCERTAINED, THEREFORE, IN THE INTERE ST OF EQUITY, SHARE OF EACH CO - OWNER WAS TAKEN AT 25% AND LONG TERM CAPITAL GAIN MADE TAX ABLE IN THE HAND OF THE ASSESSEE AT RS.21,17,500 AGAINST RS.92 LAC. TAKEN BY THE ASSESSING OFFICER. THE DECISION OF THE LEARNED CIT ( APPEAL ) IS REPRODUCED AS UNDER : - 6.8 FROM A PERUSAL OF THE STATEMENT OF SHRI LLYAS CHHOTA BADAT , IT IS NOTICED THAT IT IS NOT A CASE WHERE HE SIMPLY ADMITTED SALE CONSIDERATION OF RS 92,00,000/ - UNDER SOME MISUNDERSTANDING/PRESSURE. HE NOT ONLY ADMITTED THE SALE CONSIDERATION BUT ALSO GAVE A DETAILED ACCOUNT OF ITS DISTRIBUTION ,AMONGST' LEGAL HEIRS OF APPELLANT. HE COULD NOT HAVE IMAGINED THE I.T.A NO. 939 /AHD/20 13 A.Y. 2009 - 10 PAGE NO ACIT VS. LATE SHRI CHHOTA MOHMMAD BODAT 5 FACT OF DISTRIBUTION IN CASH OF RS. 20 LAK HS EACH TO SIX LEGAL HEIRS. THEREFORE, THE APPELLANT S CONTENTION IS REJECTED AND THE SALE CONSIDERATION OF THE LAND IS TAKEN AT RS 92,00,000/ - AGAINST THE AGREEMENT VALUE OF RS 4,05,000/ - . 5. DURING THE COURSE OF APPELLANT PROCEEDING BEFORE US THE LEARN ED DEPARTMENT REPRESENTATIVE CONTENDED THAT LEARNED CIT ( APPEAL ) HAS ERRED IN RESTRIC TING THE ADDITION FROM RS.92 LA C TO RS.21,17,500 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED SALE CONSIDERATION OF LAND NOT OFFERED TO TAX . THE LD . DR SUPPOR TED THE ORDER OF THE ASSESSING OFFICER. ON THE OTHER HAND THE LD. COUNSEL SUPPORTED THE ORDER OF THE LEARNED CIT ( APPEAL ) . 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSING OFFICER HAD ASSESSED THE ENTIRE INCO ME CASH RECEIPT OF RS.92 L A C S IN THE HAND OF LATE SHIR CHHOTA MOHAMMAD BADA T ON SUBSTANTIAL BASIS WITHOUT TAKING INTO CONSIDERATION THAT BECAUSE OF THE DEATH OF ONE OF THE CO - OWNER AMINA MOHD BADAT , THE SHARE OF EACH CO OWNER HAS BECOME 25% WE HAVE CON SIDERED THE FINDING OF THE LEARNED CIT (A) STATING THAT THERE WERE FOUR CO - OWNERS OF THE LAND WHOSE INDIVIDUAL SHARE COULD NOT BE ASCERTAINED AND IN THE INTEREST OF EQUITY SHARE OF EACH CO OWNER WAS TAKEN AT 25%, THEREFORE, LONG TERM CAPITAL GAIN TAX AB LE IN THE HAND OF THE ASSESSEE WAS TAKEN AT RS.21,17,500 AGAINST RS.92 LACS TAKEN BY THE ASSESSING OFFICER. WE FIND THAT FACTS AND FINDINGS REPORTED BY THE LD. CIT(A) JUSTIFY HIS DECISION, THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDI NG OF LD. CIT(A). I.T.A NO. 939 /AHD/20 13 A.Y. 2009 - 10 PAGE NO ACIT VS. LATE SHRI CHHOTA MOHMMAD BODAT 6 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 23 - 12 - 201 6 SD/ - SD/ - ( R. P. TOLANI ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTA NT MEMBER AHMEDABAD : DATED 23 /12 /2016 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,