ACIT, Ernakulam V. S.Sundaresa Pai By Legal heir Rajeshwari S. Pai, Ernakulam

ITSSA 13/COCH/2007

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9492 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-03-2010
• Assessment Year: misc
• Appeal Filed On: 15-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K THATTAI SHRI R LOKANATHA
• Keywords: Gift; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.(S&S)A.NO.13/COCH/2007 BLOCK PERIOD: 1 - 4 - 1996 TO 18 - 4 - 2002 THE ASSIST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-I,ERNAKULAM. VS. S. SUNDARESAPAI (LATE) BY L/H.RAJESHWARI S. PAI, ERNAKULAM. PA NO.ABGPP 9049 P (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI A.K. THATTAI CIT,DR RESPONDENT BY SHRI R. LOKANATHAN O R D E R PER N.VIJAYAKUMARAN,J.M: THIS IS AN APPEAL BY THE REVENUE IN THE CASE OF LA TE SHRI S. SUNDARESAPAI, REPRESENTED BY HIS WIFE SMT. RAJESHWARI S. PAI. THIS APPEAL IS DIRECTED AGAINS T THE ORDER OF THE CIT(APPEALS)-I, KOCHI, DATED 20-11-2006. 2. THE FIRST ISSUE RELATES TO THE DELETION OF ADDIT ION OF RS.4,01,300/- BEING UNACCOUNTED SALE PROCEEDS OF GR OUND AND FIRST FLOOR OF THE BUILDING SITUATED AT MATHER BAZAR, ERNAKULAM. IT(SS)A NO. 13/COCH/2007 2 3. THE ASSESSING OFFICER MADE THE ADDITION ON THE G ROUND THAT AS PER THE LOOSE SHEETS, SHEET NO.3 AND 4 ARE THE PHOTOSTATS OF THE FIRST SHEETS OF TWO SALE AGREEMEN TS EXECUTED BY ASSESSEES WIFE SMT. RAJESHWARI S. PAI, AND SON SHRI VISWESARA PAI JOINTLY TO SHRI C.M. NIGAM IN RE SPECT OF SALE OF GROUND AND FIRST FLOOR OF THE BUILDING AT M ATHER BAZAR, ERNAKULAM. IN ASSESSEES OWN SWORN STATEMENT IN A NSWER TO QUESTION NO.19, ASSESSEE HAS ADMITTED TO HAVE RE CEIVED A TOTAL AMOUNT OF RS.8,50,000/- FROM SHRI NIGAM AS N OTED IN THE BACK PORTION OF THE TWO SHEETS. MR. NIGAM IN HI S SWORN STATEMENT U/S.131 HAS ADMITTED THAT FOR THE GROUND SHOP PREMISES OF 198 SQ.FT. HE HAD ACTUALLY PAID A TOTAL SUM OF RS.4,75,000/- AND THE SALE DEED DATED 30-5-2001 WAS REGISTERED ON 31-5-2001 AND THE DOCUMENTED PRICE WA S ONLY RS.73,700/-. THIS PROPERTY WAS ACQUIRED BY THE AS SESSEE IN THE NAMES OF HIS WIFE AND SON. ASSESSING OFFICER V IDE HIS LETTER DATED 20-9-2005 INFORMED THE ASSESSEE THAT T HE UNACCOUNTED SALE PROCEEDS OF RS.4,01,300/-(4,75,000 /- MINUS 73,700/-) IS TREATED AS UNDISCLOSED INCOME FO R THE ASSESSMENT YEAR 2002-03 COMPRISED IN THE BLOCK PERI OD. THE ASSESSEES LEGAL HEIR GAVE REPLY VIDE LETTER DA TED 20-4- 2006, WHICH READS AS UNDER: IT(SS)A NO. 13/COCH/2007 3 REGARDING SALE OF PROPERTY TO MR. NIGAM, I MAY ADM IT THAT THOUGH SHRI S. SUNDARESH PAI OWNED THE LANDED PROPERTY SOLD, THE BUILDING (GROUND FLOOR) WAS OWNE D BY HIS WIFE AND THE SALE DEED WAS REGISTERED JOINTLY. IF YOU CONSIDER TO ASSESS THE GROSS VALUE IN THE HANDS OF SRI S. SUNDARESA PAI, YOU MAY KINDLY GRANT DEDUCTION ON ACCOUNT OF INDEXED COST OF LAND AND CONSTRUCTION CO STS OF THE SHOP (2198 SQ.FT.) ON A REASONABLE ESTIMATE BAS IS. THE FATHER OF SHRI S. SUNDARESH PAI ORIGINALLY OWNE D THE LAND AND ACCORDINGLY THE VALUE AS ON 1-4-1981 IS TO BE ESTIMATED. THE BUILDING WAS CONSTRUCTED BY HIS WI FE AND OUT OF HER OWN SOURCES IN 1987-88 (APPROX.). THE DETAILS OF COST ARE NOT EXACTLY AVAILABLE. INSTEA D OF ASSESSING THE ENTIRE DIFFERENCE IN THE ACTUAL SALE VALUE, YOU MAY BE KIND ENOUGH TO RE-COMPUTE THE LONG TERM CAPITAL GAIN AS PER LAW. THE ASSESSING OFFICER WAS OF THE VIEW THAT IT WAS N OT DISCLOSED IN THE REGULAR RETURN. THEREFORE, THE D IFFERENCE OF RS.4,01,300/- WAS TREATED AS UNDISCLOSED INCOME. 4. ON APPEAL, THE CIT(APPEALS) FOUND THAT THE PROPE RTY WAS TWO IN NUMBER AND BELONGS TO RAJESHWARI S. PAI, AND HER SON SHRI VISWESWARA PAI. THE SALE DEED IN RESPECT OF THE TRANSFER OF THE PROPERTY WAS ALSO AFFECTED BY THESE TWO PERSONS, WHICH IS NOT DISPUTED BY THE ASSESSING OFF ICER. THESE TWO PERSONS ARE ASSESSED TO INCOME TAX AND HA VING ADEQUATE INCOME, WHICH IS ALSO NOT DISPUTED. GOIN G TO THE IT(SS)A NO. 13/COCH/2007 4 INGREDIENTS OF SECTION 69, THE CIT(APPEALS) FOUND T HAT IF ANY PROPERTY IS FOUND IN THE NAME OF A PERSON AND IF TH AT PERSON HAS NO EXPLANATION ABOUT THE SOURCE THEREOF THEN IT CAN BE ASSESSED IN THE HANDS OF THAT PERSON ONLY. IN THE PRESENT CASE, THE LD. CIT(APPEALS) FOUND THAT SMT. RAJESHWA RI S. PAI, AND SHRI VISWESWARA PAI ARE REGULARLY ASSESSED AND ARE HAVING INCOME AND THEY ARE HAVING MEANS AND THEY EF FECTED CONSTRUCTION OF THE BUILDING IN 1987-88. THE EXPL ANATION DATED 24-2-2006 WAS ALSO ELABORATELY EXPLAINED ABOU T THE NATURE AND SOURCE OF INVESTMENTS. THE ASSESSING O FFICER PROCEEDED WITH BEST JUDGMENT ASSESSMENT U/S.144. BUT UNDER THE BEST JUDGMENT ASSESSMENT, IT IS THE BOUND EN DUTY OF THE ASSESSING OFFICER TO APPRECIATE ALL THE MATE RIALS AND THE ASSESSING OFFICER AFTER TAKING INTO ALL THE REL EVANT MATERIALS WHICH ARE GATHERED AND AFTER AFFORDING AN OPPORTUNITY TO THE ASSESSEE OF HAVING HEARD, MAKE T HE ASSESSMENT TO THE BEST OF HIS JUDGMENT AND DETERMIN E THE SUM PAYABLE BY THE ASSESSEE ON THE BASIS OF SUCH ASSESSMENT. THEREFORE, THERE IS NO IMPEDIMENT ON THE PART OF THE ASSESSING OFFICER TO INVESTIGATE THE NATURE AND SOURCE OF THE INVESTMENT BEFORE MAKING THE ADDITION U/S.69 PARTICULARLY THE CASE IS THAT THE LD., CIT(APPEALS) FOUND THAT BOTH SMT. RAJESHWARI S. PAI, AND SHRI VISWESWARA P AI WHO IT(SS)A NO. 13/COCH/2007 5 EFFECTED THE SALE DEEDS WERE REGULARLY ASSESSED AND WERE HAVING INCOME AND SUFFICIENT MEANS FOR THE CONSTRUC TION OF THE BUILDING. UNDER THE ABOVE CIRCUMSTANCES, WE S EE THAT THERE IS NO JUSTIFICATION IN MAKING THE ABOVE ADDIT ION AS THE ADDITION WAS MADE ONLY ON THE BASIS OF SWORN STATEM ENT RECORDED AND THE MATERIALS SEIZED WILL NOT SUGGEST ANY ADDITION. HENCE, WE ARE IN AGREEMENT WITH THE FIN DINGS OF THE LD. CIT(APPEALS). ACCORDINGLY, WE REJECT GROU ND NO.2 OF THE DEPARTMENTAL APPEAL. 5. COMING TO THE GROUND NO.3, WHICH IS ANOTHER DELE TION OF ADDITION OF RS.5,46,090/- WHICH WAS THE ALLEGED INV ESTMENT MADE IN THE NAMES OF SMT. DEEPA MATHEW AND HER TWO DAUGHTERS. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND THE PRECEDENTS. THE EXPLANATION LETTER FURNISHED BY SHRI SUNDARESA PAI TO THE ASSIST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- I KOCHI, WITH REFERENCE TO THE LETTER NO.ACIT/C-3/BLOCK-3/03 -04 DATED 12-3-2004 OF ASSIST. COMMISSIONER OF INCOME-T AX AND SHRI S. SUNDARESA PAIS LETTER DATED 19-3-2004 REQU ESTING FOR TIME FOR SENDING REPLY AND THE FINAL REPLY DATE D 1-4-2003 IT(SS)A NO. 13/COCH/2007 6 WHEREIN HE HAS CATEGORICALLY DENIED THAT HE NEVER P AID ANY AMOUNT FOR MAINTENANCE OF DEEPA MATHEW AND SHE WAS PARTNER IN FOREIGN LIQUOR BUSINESS UNER THE NAME SUNDEEP WINES DURING THE YEARS 1991 AND 1992. FURTHER DE NIAL BY SHRI S. SUNDARESA PAI WAS THAT HE HAS GIVEN NEITHER GIFT NOR GOLD ORNAMENTS. THERE WAS A TOTAL DENIAL BY SHRI S. SUNDARESA PAI AND IN THE ABSENCE OF ANY OTHER EVIDE NCE PARTICULARLY IN THIS BLOCK ASSESSMENT SUGGESTING TH AT THE ASSESSEE HAS GIVEN SUFFICIENT VALUE OF MONEY, BULLI ON, ETC. TO THE SAID DEEP MATHEW, THIS ADDITION IN THE HANDS OF THE ASSESSEE PARTICULARLY REPRESENTED BY THE LEGAL HEIR S IS UNTENABLE AND WE AGREE WITH THE FINDINGS OF THE LD. CIT(APPEALS) THAT THIS KIND OF ADDITIONS REQUIRES T O BE DELETED. UNDER THE ABOVE CIRCUMSTANCES, WE FIND N O JUSTIFICATION IN INTERFERING WITH THE ORDER OF THE CIT(APPEALS). 7. IN THE RESULT, THIS APPEAL BY THE REVENUE IS DIS MISSED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EM BER ERNAKULAM, DATED THE 04 TH MARCH,2010. PM. IT(SS)A NO. 13/COCH/2007 7 COPY FORWARDED TO: 1. THE ACIT., CENTRAL CIRCLE-I,ERNAKULAM. 2. SHRI S. SUNDARESA PAI (LATE,BY L/H. SMT. RAJESHWARI S. P AI, SUDHINDRA, PH EXTENSION ROAD, ERNAKULAM-682 018 . 3. CIT(A)-I, KOCHI 4. CIT, CENTRAL, KOCHI 5. D.R. BY ORDER SD/- ASSISTANT REGISTRAR