ACIT, Circle - 5, Kolkata, Kolkata V. Shri Kailash Agarwal, Kolkata

ITA 974/KOL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3059 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 12-05-2010
• Court: TRIBUNAL
• Department Lawyers: AMIT KR MAITRA
• Assessee Lawyers: N O N E
• Keywords: Unexplained investment; Fair market value
• Section: 69; 148; 6

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE . . . . . . . . , ! /AND ' #!' , ) [BEFORE SHRI N. S. SAINI, AM & SHRI MAHAVIR SINGH, JM] !$ !$ !$ !$ / I.T.A NO. 974/KOL/2010 #% &' #% &' #% &' #% &'/ // / ASSESSMENT YEAR: 200 2- 0 3 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. SHRI KA ILASH AGARWAL CIRCLE-5, KOLKATA. (PAN: ADAPA5442P) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 23.04.2013 DATE OF PRONOUNCEMENT: 26.04.2013 FOR THE APPELLANT: SHRI AMIT KR. MAITRA, SR. DR FOR THE RESPONDENT: N O N E - / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-VI, KOLKATA IN APPEAL NO. 1031/CIT(A)-VI/09-10/KOL DATED 22.02.2010. ASSESSME NT WAS FRAMED BY ACIT, CIRCLE-5, KOLKATA U/S. 147/143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2002-03 VIDE HIS ORDER DATED 08.12. 2008. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO BY INVOKING THE PROVISIONS OF S ECTION 69 OF THE ACT AND ACCORDING TO AO, THE AMOUNT WAS NOT BROUGHT TO TAX AND NO CAPITAL GA IN TAX WAS PAID ON SALE PROCEEDS. THE GRIEVANCE OF REVENUE IS THAT THE CIT(A) HAS ADMITT ED NEW EVIDENCE IN VIOLATION OF RULE 46A OF I. T. RULES, 1962. FOR THIS, REVENUE HAS RAISED FO LLOWING THREE GROUNDS: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY DELETING THE ADDITION OF RS.21,85,415/- MADE BY THE ASSESSING OFFICER U/S. 6 9 ALTHOUGH THIS AMOUNT WAS NEVER BROUGHT TO TAXATION AND THE ASSESSEE HAD NOT PAID CAPITAL GAINS ON THE SALE PROCEEDS OF THE LAND. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY DELETING THE ADDITION OF RS.21,85,415/- MADE BY THE ASSESSING OFFICER U/S. 6 9 ALTHOUGH THE ASSESSEE WAS THE ONLY BENEFICIARIES OF THE SALE PROCEES AS PER THE AGREEM ENT SIGNED BY THE SHAREHOLDERS OF SALE PROCEEDS. EVEN THE ASSESSEE HAS UTILIZED THE SALE PROCEEDS FOR HIS OWN PERSONAL USE BY INVESTING IN THE COMPANY OF WHICH HE WAS DIRECTOR. 2 ITA NO.974/K/2010 SHRI KAILASH AGARWAL, AY: 2002-03 3. THAT THE LD. CIT(A HAS ERRED IN LAW AS WELL AS O N FACTS BY DELETING THE ADDITION OF RS.21,85,415/- MADE BY THE ASSESSING OFFICER U/S. 6 9 AND ACCEPTING THE NEW EVIDENCES SUBMITTED BY THE ASSESSEE AND NOT REFERRING IT TO T HE ASSESSING OFFICER FOR VERIFICATION AS PER THE PROVISIONS OF RULE 46A. 3. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE LAND IN DISPUTE WAY BACK 1929 BY WAY OF ARPANNAMA. SUBSEQUENTLY, LAND CHANGED SEVERAL HAND S AND IN 1947 LEASE RIGHTS WERE TRANSFERRED TO MITTAL FAMILY OF SEVEN BROTHERS. FU RTHER, IN 1957, THE LAND ACQUISITION CONTROLLER MADE ACQUISITION OF 17 COTTAHAS OUT OF T OTAL LAND. IN THE YEAR 2000, BHARAT SEVASRAM SANGHA APPROACHED THE LESSOR AND NEGOTIATED THE SA LE OF 45 COTTAHAS OF LAND FOR A CONSIDERATION OF RS.24,75,000/- AND SALE DEED WAS EXECUTED BY AG ARWAL FAMILY ALONG WITH LEGAL HEIRS AND SUCCESSORS. THE ASSIGNORS WERE REPRESENTED BY SIX FAMILY MEMBERS AND POWER OF ATTORNEY WAS GIVEN TO MR. KAILASH AGARWAL, THE ASSESSEE HEREIN, TO RECEIVE THE SAID CONSIDERATION MONEY AND HANDLE THE SAME TO PAY-OFF ALL RELATED EXPENSES LIK E TAXES AND STATUTORY DUES ETC. SHRI KAILASH AGARWAL, THE PRESENT ASSESSEE, AFTER MEETING OUT OF ABOVE EXPENSES MADE FIXED DEPOSITS WITH ICICI BANK AS UNDER: DATE FDR NO. AMOUNT 30.06.2000 000610025472 10,00,000 22.07.2000 0006100136 5,00,000 22.07.2000 000615013647 5,00,000 THE AMOUNT WAS RECEIVED ON 05.05.2000 FALLING IN AY 2001-02 BECAUSE LAND WAS SOLD ON 05.05.2000.SHRI KAILASH AGARWAL WAS HAVING 1/42 SHA RE OF THE PROPERTY. ACCORDING TO ASSESSEE, FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 WAS RS.6,75,000/- AND THE INDEXED COST COMES TO RS.27,40,500/- AND THEREBY THERE WAS A LOS S OF RS.2,65,500/- ON ACCOUNT OF LONG TERM CAPITAL LOSS.SHRI KAILASH AGARWAL MADE THESE F DRS AND THE SAME WAS THE SUBJECT MATTER OF ADDITION BEFORE THE AO. THE AO HIMSELF ADMITTED THIS FACT IN PARA 8, WHICH READS AS UNDER: 8. THE ASSESSEE HAS TAKEN ANOTHER PLEA THAT THE PR OPERTY WAS SOLD IN AY 2001-02 AND NOT AY 2002-03, FOR WHICH NOTICE U/S. 148 WAS ISSUE D. THIS CONTENTION IS ALSO NOT ACCEPTED BECAUSE THE PROPERTY WAS SOLD IN AY 2001-0 2 BUT THE FIXED DEPOSIT WITH ICICI BANK, MADE OUT OF THE SALE PROCEEDS, WHICH HAVE BEE N GIVEN TO THE ASSESSEE BY ALL CO- OWNERS IS LINKED TO AY 2002-03. THEREFORE, IT WOUL D BE BROUGHT UNDER TAXATION IN AY 2002-03 ONLY AND NOT UNDER CAPITAL GAINS AS CLAIM ED BY THE ASSESSEE BUT AS UNEXPLAINED INVESTMENTS U/S. 69. THE CIT(A) NOTED THE FACT THAT THESE INVESTMENTS IN FDRS ARE OUT OF SALE PROCEEDS OF LAND WHICH HAPPENED IN AY 2001-02 AND NOT IN 2002-03, TH E RELEVANT ASSESSMENT YEAR. THIS UNEXPLAINED INVESTMENTS ARE NOT UNEXPLAINED INVESTM ENTS RATHER THESE ARE EXPLAINED 3 ITA NO.974/K/2010 SHRI KAILASH AGARWAL, AY: 2002-03 INVESTMENTS BECAUSE THE SAME ARE OUT OF SALE PROCEE D OF THE ABOVE LAND. THE AO SHOULD HAVE ADDED ONLY INTEREST ELEMENT EARNED ON FDRS I.E. RS. 1,85,915/- AND BALANCE RS. 20 LAKH SHOULD NOT HAVE BEEN ADDED. 4. WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION TO THE EXTENT OF RS.20 LAKH AND THE BALANCE INTEREST, IF ANY, IS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. IT SEEMS THAT THE INTEREST ELEMENT IS RS.1,85,415/-. ACCORDINGLY, WE DIRECT THE AO TO VERIFY HOW MUCH INTEREST EARNED BY THE ASSESSEE AND QUA THAT ONLY THE ADDITI ON CAN BE MADE BY AO. WE DIRECT ACCORDINGLY. APPEAL OF REVENUE IS PARTLY ALLOWED. 5. IN THE RESULT, APPEAL OF REVENUE IS PARTLY ALLOW ED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 26.04.2013 SD/- SD/- . . . . . . . . , ' ' ' ' #!' #!' #!' #!' , (N. S. SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 26TH APRIL, 2013 /0 #12 #3 JD.(SR.P.S.) 4 ITA NO.974/K/2010 SHRI KAILASH AGARWAL, AY: 2002-03 - 4 +##5 65&7- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT ACIT, CIRCLE-5, KOLKATA . 2 +,)* / RESPONDENT SHRI KAILASH AGARWAL, 1A, CORNFIELD ROAD, KOLKATA-19 3 . #- ( )/ THE CIT(A), KOLKATA 4. 5. #- / CIT KOLKATA 5 <#= +# / DR, KOLKATA BENCHES, KOLKATA ,5 +#/ TRUE COPY, ->/ BY ORDER, ' !2 /ASSTT. REGISTRAR .