Shri Pukhraj Lalchand Bagrecha, Ahmedabad V. The ACIT.,Cent.Circle-2(4), Ahmedabad

ITSSA 100/AHD/2013

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7117 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure
• Section: 69C; 153A; 69B; 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER (SS) ./IT(SS)A NO.100/AHD/2013 ( / ASSESSMENT YEAR : 2006-07) PUKHRAJ LALCHAND BAGRECHA 1-23, NEW MADHUPURA MARKET SHAHIBAUG AHMEDABAD 380 016 / VS. THE ACIT CENTRAL CIRCLE-2(4) AHMEDABAD ./ ./ PAN/GIR NO. : ABTPB 4753 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BANDISH SOPARKAR, AR / RESPONDENT BY : SHRI SAMIR TEKRIWAL, CIT-DR / DATE OF HEARING 29/01/2020 !'# / DATE OF PRONOUNCEMENT 31/01/2020 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)III, AHMEDABAD [CIT(A) IN SHORT] VIDE APP EAL NO.CIT(A)- III/444/CC-2(4)/11-12 DATED 07/12/2012 ARISING I N THE ASSESSMENT ORDER PASSED UNDER S.153A R.W.S.143(3) OF THE INCOM E TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 3 0/12/2011 RELEVANT TO ASSESSMENT YEAR (AY) 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- IT(SS)A NO.100/AHD/2013 PUKHRAJ LALCHAND BAGRECHA VS. ACIT ASST .YEAR 2006-07 - 2 - 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE A PPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN TREAT ING THE FIRST GROUND OF APPEAL CHALLENGING THE VALIDITY OF ASSESS MENT ORDER PASSED UNDER SECTION 153A OF THE ACT AS GENERAL GRO UND AND FURTHER ERRED IN NOT ADJUDICATING THE SAID GROUND F OR WHICH DETAILED SUBMISSIONS WERE FILED IN STATEMENT OF FAC TS. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOL DING ADDITION UNDER SECTION 69B OF THE ACT ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT OF RS.25 LACS IN LAND BEARIN G SURVEY NO.175/2 AT PIPLAJ. HE OUGHT TO HAVE DELETED THE A DDITION MADE BY THE ASSESSING OFFICER. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOL DING ADDITION UNDER SECTION 69B OF THE ACT ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT OF RS.3,21,000 IN LAND BEARI NG SURVEY NO.2/2 AT PIPLAJ. HE OUGHT TO HAVE DELETED THE ADD ITION MADE BY THE ASSESSING OFFICER. 4. (A) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOL DING ADDITION UNDER SECTION 69C OF THE ACT ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE OF RS.51,000 FOR PURCHASE O F LAND AT SURVEY NO.17 AT PIPLAJ. HE OUGHT TO HAVE DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER. (B) WITHOUT PREJUDICE TO THE ABOVE, LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT LAND AT SURVEY NO.17 HAS NEVE R BEEN PURCHASED BY ASSESSEE WHICH IS EVIDENT FROM REVENUE RECORDS HENCE NO ADDITION WAS CALLED FOR. (C) WITHOUT PREJUDICE TO THE ABOVE, LEARNED CIT(A) OUGHT TO HAVE DIRECTED ASSESSING OFFICER TO ADJUST ALLEGED U NEXPLAINED PAYMENT OF RS.51,000 AGAINST ADDITION CONFIRMED BY HIM FOR RS.3,21,000 FOR SURVEY NOA.2/2 AT PIPLAJ AS BOTH TH E ADDITIONS IT(SS)A NO.100/AHD/2013 PUKHRAJ LALCHAND BAGRECHA VS. ACIT ASST .YEAR 2006-07 - 3 - HAVE BEEN MADE ON THE BASIS OF VERY SAME PAGE OF SE IZED MATERIAL. 5. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE A PPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED TREATING THE GROUND RELATING TO CHARGING OF INTEREST UNDER SECTION 234A , 234B, 234C AND 234D OF THE ACT, AS CONSEQUENTIAL IN NATUR E. THE APPELLANT DENIES ITS LIABILITY TO PAY SUCH INTEREST . 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AN D/OR WITHDRAW ANY GROUND OF GROUNDS OF APPEAL EITHER BEF ORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 2. OUT OF SIX ABOVE GROUNDS, LD.AR HAS VEHEMENTLY A RGUED ON GROUND NOS.2 AND 5 WITH REGARD TO INTEREST. 3. THE BRIEF FACTS ARE THAT THE ADDITION MADE UNDER SECTION 69B OF THE ACT WERE THAT DURING THE COURSE OF SEARCH A BANACHH ITTI DATED 21 ST DECEMBER, 2005 WAS SEIZED AT PAGE NOD.52 OF ANNEXUR E A/2 WHICH PERTAINS TO SALE OF LAND ADMEASURING 3 VIGHAS AT SU RVEY NO.175/2 AT VILLAGE PIPLEJ AND AS PER SAID BANACHHITTI, SALE RA TE WAS RS.9 LAKHS PER VIGHA, HENCE ASSESSING OFFICER CAME TO CONCLUSION T HAT APPELLANT HAS ACQUIRED THIS LAND AT RS.27 LAKHS (3 VIGHAS X 9 LAK HS). AS APPELLANT HAS SHOWN LAND PAYMENT OF RS.2 LAKHS THROUGH CHEQUES, W HICH IS AS PER REGISTERED SALE DEED, DIFFERENTIAL AMOUNT OF RS.25 LAKHS WAS ADDED TO THE TOTAL INCOME OF ASSESSEE AS UNEXPLAINED INVESTM ENT UNDER SECTION 69B OF THE ACT. THE ADDITION OF RS.25 LAKHS MADE BY ASSESSING OFFICER WAS CONFIRMED BY LEARNED CIT(A) MAINLY ON FOLLOWING REASONS: IT(SS)A NO.100/AHD/2013 PUKHRAJ LALCHAND BAGRECHA VS. ACIT ASST .YEAR 2006-07 - 4 - (A) AS PER SEIZED DOCUMENT, THE BANAKHAT FOR LAND WAS PREPARED ON 21ST DECEMBER, 2005 AND AS SUCH DOCUMENT WAS FOUND IN THE CUSTODY OF ASSESSEE DURING SEARCH, I.E. 6 TH AUGUST, 2009, BANAKHAT IS AUTHENTICATED BANAKHAT. (B) THE ARGUMENT OF APPELLANT THAT BANAKHAT WAS NOT SIG NED WAS REJECTED ON THE GROUND THAT SAME DOES NOT MAKE ANY DIFFERENCE. (C) AS PIECE OF LAND WAS SUBSEQUENTLY PURCHASED BY APPE LLANT, AND LAND WAS TRANSFERRED IN HIS NAME, THERE IS NO REASO N FOR REDUCTION OF PRICE FROM RS.27 LAKHS TO RS.2 LAKHS. 4. THE LD.ARS CONTENTION IS THAT A BANACHHITTI WHI CH WAS RECOVERED BY THE REVENUE AUTHORITY WAS NOT IN HANDWRITING OF THE APPELLANT AND SAID BANACHHTTI WAS NOT SIGNED BY THE APPELLANT AND HE H AS NOT GIVEN CONSENT TO SAID BANACHHITTI AND AS PER THE REGISTERED DOCUM ENT FOUND DURING THE COURSE OF SEARCH, THE SAID PLOT OF LAND WAS COVERED BY THE FOLLOWING TWO PARTIES: 1. SHRI JAGABHAI BHALABHAI BHARWAD 2. SHRI HINDUBHAI SHALABHAI BHARWAD WHEREAS THE ALLEGED THUMB IMPRESSION OF ONLY ONE PA RTY I.E. OF SHRI JAGABHAI BHALABHAI BHARWAD APPEARED ON THE SA ID BANACHHITTI RELIED UPON BY LOWER AUTHORITIES; MEANING THEREBY EVEN ONE OF THE SELLERS DID NOT GIVE HIS CONSENT FOR SALE OF THAT LAND AT THAT PRICE. THE STAMP VALUATION AUTHORITY HAS ALSO ACCEPTED THE VALUE OF RS.2 LAKHS PER BIGHA AS PER THE SALE DEED EXECUTED BETWEEN THE PARTIES TO C ONTRACT AND COLLECTED STAMP DUTY ON THE SAID PRICE. HERE, IT IS WORTHWHI LE TO REPRODUCE THE SECTION 69B OF THE INCOME TAX ACT, 1961. IT(SS)A NO.100/AHD/2013 PUKHRAJ LALCHAND BAGRECHA VS. ACIT ASST .YEAR 2006-07 - 5 - AMOUNT OF INVESTMENTS, ETC., NOT FULLY DISCLOSED IN BOOKS OF ACCOUNT. 69B. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE I NVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE ASSESSING OFFICER FINDS THAT THE AMOUNT EXP ENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWE LLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME , AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR T HE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 5. ON THE OTHER HAND, THE LD.DRS CONTENTION IS TH AT PAPER WAS FOUND HAVING SIGNATURE WHATEVER PROPERTY DETAILS WERE MEN TIONED ON SEIZED PAPER WAS PURCHASED BY THE SON OF THE APPELLANT AND IT HAS BEEN ADMITTED BY THE APPELLANT THAT THE SAID PIECE OF LAND WAS SU BSEQUENTLY PURCHASED BY HIM AND LAND WAS TRANSFERRED BY HIM AND THERE IS NO REASON AS TO WHY THE LAND PRICE WAS REDUCED FROM RS.27 LAKHS TO RS.2 LAKHS. 6. WE HAVE GONE THROUGH THE IMPUGNED ORDER AND RELE VANT RECORD. IN THIS CASE A SEARCH ACTION U/S.132 OF THE INCOME TAX ACT WAS CARRIED OUT IN THE GROUP OF KOMAL GROUP ON 06/08/2009 AND SEIZED I NCRIMINATING DOCUMENTS INCLUDING A DOCUMENT IN QUESTION PERTAINI NG TO PURCHASING OF THREE BIGHA LAND AT SURVEY NO.175/2 AT VILLAGE PIPL EJ WAS FOUND, WHEREIN ASSESSEES SON HAS SIGNED DOCUMENT WITH ONE OF THE SELLERS OUT OF TWO SELLERS WHO OWNED THE LAND AND IT WAS SO-CALLED DE CIDED TO SALE LAND AT IT(SS)A NO.100/AHD/2013 PUKHRAJ LALCHAND BAGRECHA VS. ACIT ASST .YEAR 2006-07 - 6 - THE RATE OF RS.9 LAKHS PER BIGHA AND IT IS CLAIMED TO HAVE BEEN BY THE REVENUE AUTHORITY THAT ON SAME DOCUMENT THUMB IMPRE SSION OF ONE OF THE SELLERS AND TWO WITNESSES ARE ALSO THERE AND APPE LLANTS SON HAS SIGNED ON BEHALF OF THE ASSESSEE. WE CANNOT BELIEVE THIS FACT OF THE REVENUE BECAUSE NO STATEMENT OF SELLERS WERE RECORDED BY TH E DEPARTMENT. IF THERE WAS SOME DOUBT, REVENUE OUGHT TO HAVE RECORDED STAT EMENT OF THE SELLER ALONG WITH STATEMENT OF WITNESSES. THE DEPARTMENT DOES NOT HAVE ANY OTHER EVIDENCE OTHER THAN THE SO-CALLED BANACHHITTI WHEREIN APPELLANTS SON HAS MADE AN AGREEMENT TO PURCHASE LAND AT THE RATE OF RS.27 LAKHS. IN THE MATTER OF JAWAHARBHAI ATMARAM HATHIWALA VS. ITO (2010 128 TTJ 36 (AHMEDABAD) CO-ORDINATE BENCH HAS HELD AS UNDER: SECTION 69 OF THE INCOME-TAX ACT, 1961 UNEXPLAIN ED INVESTMENTS ASSESSMENT YEAR 1999-2000 WHERE ASS ESSEE WAS ALLEGED TO HAVE PAID A SUM AS ON MONEY FOR PURCHA SE OF FLAT BUT NO EVIDENCE COULD BE BROUGHT ON RECORD BY REVENUE T O SHOW THAT IN FACT ASSESSEE HAD PAID ON-MONEY TO DEVELOPERS, AND NO DOCUMENT CONTAINING SIGNATURE OF ASSESSEE OR HANDWR ITING OF ASSESSEE TO CORROBORATE ABOVE MAKING OF PAYMENT BY ASSESSEE WAS FOUND DURING COURSE OF SEARCH, ADDITION ON ACCOUNT OF SUCH ALLEGED PAYMENT WAS NOT JUSTIFIED. 6.1. IN OUR CONSIDERED OPINION AND ON THE BASIS OF AFORESAID SO-CALLED BANACHHITTI, ADDITION CANNOT BE MADE. THE DEPARTME NT OUGHT TO HAVE COLLECTED MORE EVIDENCES AND SHOULD HAVE RECORDED T HE STATEMENT OF THE OTHER CONCERNED PARTIES. THUS, IN VIEW OF THE INAD EQUATE/INSUFFICIENT EVIDENCE AND ENQUIRY, WE DELETE THE ADDITION OF RS. 2,50,000/-. IT(SS)A NO.100/AHD/2013 PUKHRAJ LALCHAND BAGRECHA VS. ACIT ASST .YEAR 2006-07 - 7 - 7. SO FAR AS GROUND NO.5 RELATING TO INTEREST U/S. 234A, 234B, 234C AND 234D ARE CONCERNED, THE SAME ARE CONSEQUENTIAL . AS WE HAVE DELETED THE ADDITION OF RS.25 LAKHS, INTEREST SHALL NOT BE CHARGED AND ON REMAINING GROUNDS THE LD.AR HAS NOT ARGUED. WHEN THE BENCH SPECIFICALLY ASKED LD.AR TO MAKE STATEMENT THAT HE DOES NOT WANT TO PRESS REMAINING BUT HE DENIED BY SAYING THAT HE IS NOT ARGUING ANY GROUND EXCEPT RELATING TO ADDITION OF RS.25 LAKHS A ND INTEREST THEREON. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER IS DIRE CTED TO DELETE THE ADDITION OF RS.25 LAKHS AND INTEREST THEREOF. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 31/ 01/2020 SD/- SD/- ( WASEEM AHMED ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD; 31/01/2020 &.., .(.. / T.C. NAIR, SR. PS !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-III, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD