Shri Prashant Nivrutti Khedkar, Nashik V. ITO, Ward 1(3), Nashik

ITA 971/PUN/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9317 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY DHOKE
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 971/PUN/2013 / ASSESSMENT YEAR : 2009-10 SHRI PRASHANT NIVRUTTI KHEDKAR, RADHANATH KRUPA, VRUNDAVAN COLONY, VAIDYA NAGAR, DWARKA, NASHIK. PAN :AGYPK2251R . / APPELLANT V/S ITO, WARD - 1( 3), NASHIK . / RESPONDENT . / ITA NO. 1265/PUN/2013 / ASSESSMENT YEAR : 2009-10 ITO, WARD - 1(3), NASHIK . / APPELLANT V/S SHRI PRASHANT NIVRUTTI KHEDKAR, RADHANATH KRUPA,VRUNDAVAN COLONY, VAIDYA NAGAR, DWARKA, NASHIK. PAN :AGYPK2251R . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI AJAY DHOKE / ORDER PER D. KARUNAKARA RAO, AM : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS WE LL AS THE REVENUE AGAINST THE ORDER OF CIT(A)-I, NASHIK DATED 08-03 -2013 FOR THE ASSESSMENT YEAR 2009-10. / DATE OF HEARING :14.06.2017 / DATE OF PRONOUNCEMENT: 16.06.2017 2 ITA NOS.971 AND 1265/PUN/2013 2. IN THE REVENUES APPEAL, THE ISSUES RELATING TO RELIEF BY CIT(A) ON ACCOUNT OF UNEXPLAINED ADVANCES AS WELL AS SUNDRY C REDITORS GRANTED BY THE CIT(A) WAS RAISE. FURTHER, IN THE ASSESSEES APPEA L, CONFIRMING OF THE ADDITIONS BY CIT(A) ON ACCOUNT OF THE SAID UNEXPLAI NED ADVANCES RECEIVED FROM THE CUSTOMERS WAS RAISED VIDE GROUND NOS. 3 TO 10 OF THE APPEAL. OTHERWISE, GROUND NOS.1, 2 AND 11 OF THE ASSESSEE S APPEAL ARE NOT PRESSED. ACCORDINGLY, GROUND NOS. 1, 2 AND 11 ARE DISMISSED AS NOT PRESSED. 3. IT IS ALSO PERTINENT TO MENTION HERE THAT GROUND NOS. 3 TO 10 OF THE ASSESSEES APPEAL ARE CONNECTED TO GROUND NO.2 OF T HE REVENUES APPEAL. OTHERWISE, GROUND NOS. 1, 4 AND 5 OF THE REVENUES APPEAL ARE GENERAL IN NATURE AND THEREFORE THE SAME ARE DISMISSED AS GENE RAL. 4. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS A BUILDER AND DEVELOPER AND THE ASSESSMENT WAS COMPLETED IN AN EX PARTE MANNER U/S.144 R.W.S. 143(3) OF THE ACT. ASSESSEE FILED THE RETUR N OF INCOME DECLARING TOTAL INCOME OF RS.4,49,780/- AND THE ASSESSED INCOME IS DETERMINED AT RS.1,01,91,550/- AFTER MAKING ADDITIONS ON ACCOUNT OF UNEXPLAINED ADVANCES, SUNDRY CREDITORS ETC. 5. THE FACTS RELATING TO THE UNEXPLAINED ADVANCES A ND THE RELEVANT ADDITION OF RS.80,66,000/- INCLUDE THAT THE ASSESSE E BEING A BUILDER RECEIVED VARIOUS ADVANCES FROM VARIOUS CUSTOMERS. IN THE AS SESSMENT FOR WANT OF DETAILS VIDE DISCUSSION GIVEN IN PARA NO.7, AO PRO CEEDED TO MAKE ADDITION OF RS.80,66,000/- INVOLVING DR. VILAS LOKHANDE, MR. KH ETAN, MR. PAPNEJA RAJIV, MR. PATEL B.L., MR. PAWAN CHAVALA, MR. VIKRAM KHARE , MRS. VANDANA SHEKDE, MR. PHAD RAVI, MRS. YOGITA AVHAD AND MR. AMBADAS KH EDKAR. THESE PEOPLE ARE THE BUYERS OF THE FLATS FROM THE ASSESSEES PRO JECT. 3 ITA NOS.971 AND 1265/PUN/2013 6. DURING THE FIRST APPELLATE PROCEEDINGS, AS DISCU SSED IN PARA NO.11.2 OF THE ORDER OF THE CIT(A) CIT(A) GRANTED THE PART RELIEF IN RESPECT OF CUSTOMERS NAMED DR. VILAS LOKHANDE, MR. VIJAY KHETA N, MR. PAPNEJA RAJIV, MR. PATEL L.B., MRS. PAWAN CHAWLA AND DR. VIKRAM KH ARE. CIT(A) ACCEPTED THEM AS GENUINE ADVANCES RELYING ON THE COPIES OF T HE REGISTERED DEEDS EVIDENCING THE BUYER OF THE PROPERTY/FLATS FROM THE ASSESSEE. FURTHER, THE CIT(A) ALSO CONSIDERED THE FACT THAT WHEREVER THERE IS CANCELLATION OF FLATS BOOKED, THE AMOUNTS WERE FOUND REPAID IN THE NEXT Y EAR. 7. ON HEARING BOTH THE PARTIES ON THE SAID RELIEF G RANTED BY THE CIT(A) AMOUNTING TO RS.52,41,000/-, WE ARE OF THE OPINION THAT THE DECISION OF THE CIT(A) IS FAIR AND REASONABLE. IT DOES NOT CALL FO R ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 RAISED BY THE REVENUE IS R EQUIRED TO BE DISMISSED ON FACTS. IT IS RELEVANT TO MENTION HERE THAT THE REVENUE HAS NOT BROUGHT ANY ADVERSE/INCRIMINATING DOCUMENTS AGAINST THE ASS ESSEE THAT THE REGISTERED DOCUMENTS FILED BY THE ASSESSEE, THE DET AILS OF REPAYMENT MADE BY THE ASSESSEE, ARE NOT GENUINE. 8. REGARDING THE BALANCE AMOUNT OF ADVANCES CONFIRM ED BY THE CIT(A), THE DETAILS OF WHICH ARE DISCUSSED IN A TABULAR FOR M ON PAGES 9/10 OF THE ORDER OF CIT(A), WE FIND THE CIT(A) CONFIRMED THE A DVANCES SAID TO HAVE BEEN RECEIVED BY MR. PHAD RAVI, MR. SATISH S. SHEKA DE & MRS. VANDANA SHEKADE, , MRS. YOGITA AVHAD & MR. N.G. AVHAD AND M R. AMBADAS KHEDKAR & MR. SURESH CHORDIYA. CIT(A) HAS GIVEN THE REASONS FOR CONFIRMING THE ADDITIONS STATING THAT THERE IS NO AGREEMENT IN SUP PORT OF THE BOOKINGS, AND THE AMOUNTS ARE PAID BY THE CUSTOMERS TO THE ASSESS EE IN CASH FORM, ALTHOUGH THE IDENTITY WAS PROVED AND IN THESE CASES THE CIT(A) HELD THAT CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO NS WERE NOT SUBSTANTIATED 4 ITA NOS.971 AND 1265/PUN/2013 AS REMARKED BY THE CIT(A) IN HIS ORDER. ON THIS IS SUE, LD. COUNSEL FOR THE ASSESSEE FAIRLY MENTIONED THAT THESE ISSUES MAY BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 9. ON HEARING BOTH THE SIDES, WE FIND, ALTHOUGH THE PAYMENTS ARE RECEIVED BY THE ASSESSEE IN CASH, THERE IS NO CLARI TY WITH REGARD TO THE EXISTENCE OF WRITTEN AGREEMENTS IN SUPPORT OF THE P URCHASING OF THE FLATS, OR EVEN IF IT EXISTS, THE DOCUMENT IS UNREGISTERED. W E ARE OF THE OPINION THAT THE AO HAS NOT UNDERTAKEN ANY INVESTIGATION TO THE SAID PARTIES AND THE ADVANCES GIVEN BY THEM. AS DISCUSSED IN THE OPEN C OURT, THE AO MAY INITIATE ENQUIRIES WITH REGARD TO THE GENUINENESS, CREDIT WORTHINESS OF THE TRANSACTIONS INVOLVING THE SAID FLAT BUYERS AND BY INVOKING RELEVANT PROVISIONS. AO SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRINCIPLES OF N ATURAL JUSTICE. ACCORDINGLY, GROUND NOS. 3 TO 10 OF THE ASSESSEES APPEAL ARE AL LOWED FOR STATISTICAL PURPOSES. 10. THAT LEAVES, IN REVENUES APPEAL, THE ISSUE REL ATING TO ADDITION ON ACCOUNT OF SUNDRY CREDITORS AMOUNTING TO RS.12,75,7 73/-. RELEVANT FACTS INCLUDE THAT THE AO IN THE BEST JUDGMENT ASSESSMENT MADE THE SAID ADDITION AS PER THE DISCUSSION GIVEN IN PARA 8 OF HIS ORDER. ASSESSEES FAILURE TO FURNISH THE DETAILS OF THESE CREDITS, LACK OF ADDRE SSES ARE THE REASONS FOR MAKING THE ADDITION. ALTHOUGH THE AO HAS HELD THAT THESE LIABILITIES ARE INCURRED IN CONNECTION WITH THE CONSTRUCTION OF BUN GALOW AND THE PAYMENTS ARE DUE TO THE LABOURS, ELECTRICIANS, WORKERS ETC., THERE IS NO INVESTIGATION UNDERTAKEN BY THE AO ON THIS ASPECT. 5 ITA NOS.971 AND 1265/PUN/2013 11. DURING THE FIRST APPELLATE PROCEEDINGS, CIT(A), AS PER THE DISCUSSION GIVEN IN PARA NO.12 OF HIS ORDER GRANTED RELIEF STA TING THAT THE SAID EXPENDITURE WAS PAID TO THE PARTIES THROUGH BANKING TRANSACTIONS WITH THE EXCEPTION OF SUM OF RS.59,444/- PAYABLE TO MR. GUJR AL AGENCIES. OTHERWISE, ASSESSEE FURNISHED EVIDENCES IN SUPPORT OF INCURRIN G OF THE EXPENSES AS WELL AS PAYMENT OF THE SAME IN LATER TIMES. ON ACCEPTIN G THE SAID EVIDENCES, THE CIT(A) GRANTED RELIEF WITH THE EXCEPTION OF RS.59,4 44/-. IN OUR VIEW, THE FINDINGS OF CIT(A) GIVEN IN PARA NO.12 IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE. FOR THE SAKE OF COMPLET ENESS OF THE ORDER, WE PROCEED TO IMPORT RELEVANT LINES FROM PARA NOS. 12 TO 12.2 AS FOLLOWS : 12.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE RIVAL CONTENTIONS. MOST OF THE CREDITORS ARE PAID SUBSEQ UENTLY THROUGH BANKING CHANNEL. PURCHASES OF MATERIAL AND SERVICES FROM T HESE SUPPLIERS ARE NOT IN DOUBT. THERE IS NO EVIDENCE BROUGHT ON RECORD BY T HE A.O. TO SUPPORT THE ALLEGATION OF PAYMENT OF THESE CREDITORS BY USE OF UNACCOUNTED FUNDS BY THE ASSESSEE. IN FACT MOST OF THE SUBSEQUENT PAYMENTS ARE FOUND BY CHEQUES. UNDER THE CIRCUMSTANCES, EXCEPT THE SUM OF RS.59,44 4/- CLAIMED AS PAYABLE TO M/S. GUJRAL AGENCIES, FOR WHICH ASSESSEE HAS FAI LED TO PRODUCE ANY CONFIRMATION LETTER, THERE IS NO REASON FOR DISALLO WING AMOUNTS PAYABLE TO OTHER CREDITORS. ACCORDINGLY, ADDITION ON ACCOUNT OF CREDITORS FOR BUNGALOW CONSTRUCTION IS RESTRICTED TO RS.59,444/-. THUS, A SSESSEE GETS RELIEF AND RS.12,16,329/-. HENCE, GROUND NO.6 IS PARTLY ALLOW ED. 11.1 THE ABOVE FINDINGS OF THE CIT(A) ARE REASONABL E AND REFLECTS ONE POSSIBLE VIEW ON THE DISPUTE. ACCORDINGLY, GROUND NO.3 RAISED BY THE REVENUE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF JUNE, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; DATED : 16 TH JUNE, 2017. 6 ITA NOS.971 AND 1265/PUN/2013 / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE //TRUE COPY// /ASSISTANT REGISTRAR , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - I, NASHIK 4. THE CIT - I, NASHIK 5. DR, ITAT, B BENCH PUNE; 6. / GUARD FILE.