Appeal details
Counselvise Citation
[2010] 124 COUNSELVISE.COM (IT) 9206 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 2 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
23-07-2010
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
D
Next Hearing Date
06-07-2010
Assessment Year
misc
Appeal Filed On
12-05-2005
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER IT(SS)A NO.167/AHD/2005 [BLOCK PERIOD FROM 1-4-90 TO 28-1-00] SMT. KAMLABEN CHHOTABHAI PATEL -VS- ASSTT. COMMR.OF INCOME-TAX, AT & POST, GHUTELI, TAL. PETLAD, CIRCLE-3, BARODA DIST. KHEDA PAN NO.ALFPP9736D IT(SS)A NO.168/AHD/2005 [BLOCK PERIOD FROM 1-4-90 TO 28-1-00] SHRI MUKESH ISSHARBHAI PATEL -VS- ASSTT. COMMR.OF I NCOME-TAX, L/H. LT. SHRI ISHWARBHAI B PATEL CIRCLE-3, BARODA AT & POST, GHUTELI, TAL. PETLAD, DIST. KHEDA PAN NO.ALFPP9738P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GAURAV BATHAAM, DR ASSESSEE BY: SHRI DHIREN SHA H, AR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THESE TWO APPEALS BY ASSESSEE ARE ARISING OUT OF T HE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-I, BARODA IN APPEAL NO.CAB/I -59 & 58/2004-05 DATED 28-02- 2005. THE BLOCK ASSESSMENTS WERE FRAMED BY ACIT, C IRCLE-3, BARODA U/S.158BD OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE HIS ORDER DATED 23-07-2004 FOR THE BLOCK PERIOD FROM 01-04-1990 TO 28-01-2000. IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 2 2. THE ONLY COMMON ISSUE IN BOTH THE APPEALS OF THE ASSESSEE IS AS REGARDS TO THE ORDER OF CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING THE CONSIDERATION RECEIVED ON ACCOUNT OF SALE OF LA ND AS UNDISCLOSED INCOME TO BE TAXED FOR THE BLOCK PERIOD. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND NO.1-3 WHICH ARE EXACTLY IDENTICAL IN BOTH THE ASSESSEES APPEALS, HENCE, WE WILL TAKE THE GROUNDS FROM IT(SS)A NO.167/AHD/20 05:- 1. THE LD. CIT(APPEALS)-I, BARODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE FINDINGS OF THE LD. A.O THAT THE CON SIDERATION OF RS.16,05,000/- RECEIVED BY THE APPELLANT ON SALE OF LAND REPRESENT ED UNDISCLOSED SALE TRANSACTION AND WAS TO BE TAXED AS UNDISCLOSED INCO ME OF THE BLOCK PERIOD, IN DISREGARD OF THE FACT THAT THE APPELLANT HAD PAID A DVANCE TAX IN RELATION TO THE INCOME CHARGEABLE TO TAX IN RESPECT OF SUCH TRANSAC TION. THE TRANSACTION THEREFORE OUGHT TO HAVE BEEN HELD AS DISCLOSED AND REQUIRES TO BE HELD SO.. 3. THE BRIEF FACTS LEADING TO ABOVE COMMON ISSUE AR E THAT SEARCH U/S.132 OF THE ACT WAS CARRIED OUT ON THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI NATHUBHJAI H PATEL AT PRAMUKH PALACE, NANA BAZAAR, V. NAGAR, ANA ND ON 28-01-2000. DURING THE COURSE OF SEARCH, CERTAIN BOOKS OF ACCOUNT AND DOCU MENTS WERE FOUND AND SEIZED PAGE NO.12 OF ANNEXUE-A/15 OF PANCHNAMA DATED 28-01 -2000 EVIDENCES INCOMING AND OUTGOING OF RS.32,10,000/- IN THE HEADING OF P LOT FOR MANISH AND IN HIS STATEMENT U/S.131 RECORDED ON 14-02-2000, SHRI NATH UBHAI H PATEL HAS EXPLAINED THAT LAND BELONGING TO ISHWARBHAI B PATEL OF VILLAG E GHUTELI AND OTHER WAS SOLD FOR CONSIDERATION OF RS.32.10 LAKH. IN THIS CONNECTION, A STATEMENT ON OATH OF MUKESH I PATEL ON BEHALF OF SHRI ISHWARBHAI B PATEL AND SMT. KAMLABEN C PATEL WAS RECORDED ON 24-02-2000 U/S. 131 OF THE ACT, WHEREIN, IT WAS STATED THAT THE ENTIRE AMOUNT OF RS.32.10 LAKH WAS RECEIVED BY THEM AS CONSIDERATION FOR SALE OF LAND MEASURING 427.12 SQ. MT. AND 417.97 SQ. MT. RESPECTIVELY OF S URVEY NO.1814 AND 1815 OF V.V. NAGASR, ANAND BELONGING TO SHRI ISHWARBHAI B PATEL AND SMT. KAMLABEN C PATEL. THE AO FROM THE TRANSACTION APPEARING ON PAGE-12 OF ANNEXURE-A/15 OF PANCHNAMA DATED 28-01-2000 AT THE RESIDENCE OF SHRI NATHUBHAI H PATEL. SHRI MUKESH I PATEL HAS STATED THAT THE ENTIRE AMOUNT OF RS.32.10 LAKH APPEARING ON THESE PAGES WAS RECEIVED ON BEHALF OF SHRI ISHWARBHAI B PATEL AND S MT. KAMLABEN C PATEL AS CONSIDERATION FOR THE SALE OF LAND MEASURING 427.12 SQ. MT. AND 417.93 SQ. MT. RESPECTIVELY OF SURVEY NO.1814-1815 OF V.V NAGAR, A NAND. THESE FACTS ARE IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 3 UNDISPUTED. THE ASSESSING OFFICER TREATED THE ENTIR E CONSIDERATION AS UNDISCLOSED INCOME IN THE HANDS OF THESE TWO ASSESSEES, NAMELY SHRI ISHWARBHAI B PATEL AND SMT. KAMLABEN C PATEL. AGGRIEVED, ASSESSEE PREFERRE D APPEAL BEFORE CIT(A). THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING O FFICER. AGGRIEVED, ASSESSEE CAME IN SECOND APPEAL BEFORE US. 4. BEFORE US LD. COUNSEL FOR THE ASSESSEE, SHRI DHI REN SHAH NARRATED THE FACTS THAT SEARCH TOOK PLACE ON 28-01-2000 IN THE CASE OF NATHUBHAI M PATEL FROM WHOSE RESIDENCE ONE PAPER WAS SEIZED AS ANNEXURE/A-15 OF PANCHNAMA DATED 28-01-2000 PAGE NO.12, WHICH EVIDENCES THE PAYMENT OF RS.32.10 LAKH AS SALE CONSIDERATION FOR SALE OF LAND BY SHRI ISHWARBHAI B PATEL AND SMT. KA MLABEN C PATEL. BOTH THE ASSESSEES WERE HAVING SHARES IN THE ABOVE SAID LA ND. HE FURTHER NARRATED THAT SHRI MUKESH I PATEL LEGAL HEIRS OF SHRI ISHWARBHAI B PATEL, ON OATH, ADMITTED THE ENTIRE CONSIDERATION RECEIVED BY THESE CO-SHARERS, THE DETAILS OF WHICH HAS BEEN RECORDED BY THE ASSESSING OFFICER ON PAGE-2 OF THE BLOCK ASSESSMENT ORDER AND THE PAYMENT WAS RECEIVED BETWEEN THE PERIOD 06-08-1999 TO 15-10-1999 (FOR FINANCIAL YEAR 1999-00 I.E. ASSESSMENT YEAR 2000-01). ACCORDI NG TO THE LD. COUNSEL THE ASSESSEE WAS AWARE OF THE TAX LIABILITY WHICH ARISE ON TRANSFER OF THE IMMOVABLE PROPERTY AND THEREFORE PAID AN ADVANCE TAX ON 15-03 -2000 AMOUNTING TO RS.1,60,500/- AS COMPUTED ON ESTIMATE AT THAT AMOUN T AS STATED ABOVE. THE PROPERTY IN QUESTION WAS SOLD TO SHRI MANISH PATEL ON 25-10-1999 AND CONSIDERATION OF WHICH WAS RECEIVED AS PER THE AGREED TERMS. AS THE ASSESSEE HAS EARNED INCOME WHICH WAS LIABLE TO TAX AS PER THE PROVISION S OF THE ACT, WERE ALSO LIABLE TO PAY ADVANCE TAX AS PER THE PROVISIONS CONTAINED IN CHAPTER-XVII-C WHICH INTER ALIA PROVIDE FOR PAYMENT OF ADVANCE TAX FOR THE YEAR ON CURRENT INCOME IN INSTALLMENTS AND LAST BEING ON 15 TH MARCH OF EACH YEAR SUBJECT TO CREDIT FOR TAX, WHIC H IS ALREADY PAID BEFORE THAT DATE. REFER TO SECTION 211(1)(B), FOLLOWING THE PROVISIONS OF LAW, THE ASSESSEE DURING THE YEAR PAID DUE ADVANCE TAX BY TH E INSTALLMENT, WHICH WAS FALLING DUE ON 15-03-2000 AS PER THE PROVISIONS OF SECTION 211 OF THE ACT AMOUNTING TO RS.1,60,500/- EACH. THE ASSESSING OFFICER WHILE IG NORING THE FACT THAT THE ASSESSEE HAD PAID THE ADVANCE TAX IN RESPECT OF THE CURRENT INCOME AS PER THE PROVISIONS OF LAW HELD THAT THE ASSESSEE HAD NO INTENTION OF DISC LOSING THE TRANSACTION AS THE ENTIRE AMOUNT ARE RECEIVED BY BEARER CHEQUES OR CASH AND T HAT THE ADVANCE TAX ITSELF IS IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 4 PAID IN MARCH, WHICH WAS OTHERWISE DUE IN THE MONTH OF DECEMBER 15TH,1999. THE AO ALSO DID NOT ACCEPT THE DECISIONS RELIED UPON BY THE ASSESSEE TO THE EFFECT THAT INCOME WHICH IS DISCLOSED BY ADVANCE TAX CANNOT BE TREATED AS UNDISCLOSED INCOME AS ACCORDING TO HIM, THEY WERE NOT OF THE JURISDICT IONAL TRIBUNAL/COURT AND THAT THE FACTS REFERRED TO IN THOSE DECISIONS ARE NOT APPLIC ABLE TO THE ASSESSEES CASE. THE ASSESSEE STATED BEFORE AO THAT ACTION OF AO IS ENTI RELY UNJUSTIFIED AND ILLEGAL AS PER PROVISION OF COMPUTATION OF UNDISCLOSED INCOME ARE PROVIDED IN CHAPTER XIVB OF THE ACT AND THAT THE UNDISCLOSED INCOME IS DEFINED IN S ECTION 158B(B) OF THE ACT. AS REGARDS TO FILLING OF RETURNS OF INCOME, THE LD. CO UNSEL FOR THE ASSESSEE STATED THAT SHRI ISHWARBHAI B PATEL FILED HIS RETURN OF INCOME ON 11-03-2002, WHICH IS A BELATED RETURN SMT. KAMLABEN C PATEL COULD FILE HER RETURN OF INCOME ONLY ON 31-08-2004. LD. COUNSEL FOR ASSESSEE RELIED ON THE CASE LAW OF DR. MRS. ALAKA GOSWAMI ; DR. ANIL KUMAR GOSWAMI V. CIT (2004) 268 ITR 178 (GAU) ; ACIT V. A.R. ENTERPRISES (2005) 274 ITR 110 (MAD); CIT V. N VELLAIYAN (2006) 287 ITR 520 (MAD) ; CIT V. SUBRAMANIAN (LATE) (2008) 305 ITR 289 (MAD). 5. ON THE OTHER HAND, LD. SR-DR STATED THAT THERE I S NO DISPUTE THAT THE ASSESSEE HAS EARED INCOME ON SALE OF THE PROPERTY AND BASIC POINT OF DISPUTE IS THAT THE ASSESSEE CLAIMS TO HAVE FILED THE RETURN OF INC OME DISCLOSING THESE TRANSACTIONS AND ADVANCE AX FOR THE SAME WAS PAID ON 15-03-2000. ACCORDING TO HIM THE ASSESSEE HAS RECEIVED ENTIRE CONSIDERATION BETWEEN THE PERIOD 06-08-1999 TO 15- 10-1999 AND WAS LIABLE TO PAY THE ADVANCE TAX INSTA LLMENT ON 15-12-1999 WHICH WAS NOT PAID BY THAT DATE. SUBSEQUENTLY, THE SEARCH ON 28-01-2000 AND THE STATEMENTS DATED 14-02-2000 OF SHRI NATHUBHAI S PATEL AND ON 2 4-02-2000 OF SHRI MUKESH I PATEL ON BEHALF OF THE ASSESSEE HAS BROUGHT OUT THE SE TRANSACTIONS IN CASH INTO THE KNOWLEDGE OF DEPARTMENT. SUBSEQUENTLY, TO THESE PRO CEEDINGS, THE ASSESSEE HAS DEPOSITED ADVANCE TAX ON THESE TRANSACTIONS ON 15-0 3-2000 WHICH IS AFTER THOUGHT. ACCORDING TO HIM, IT IS A FACT THAT THE ACTION OF T HE ASSESSEE TO DEPOSIT ADVANCE TAX IN MAR.00 WHEN IT WAS DUE ON DEC.99 WAS AN AFTER THO UGHT AS THE UNRECORDED TRANSACTIONS GOT EXPOSED DURING POST SEARCH PROCEED INGS. THE WHOLE TRANSACTION HAS BEEN COMPLETED IN CASH EXCEPT AN AMOUNT OF RS.4 LAK H BY BEARER CHEQUE AND THE FACT THAT MOST OF THE MONEY IN CASH HAS BEEN RECEIV ED MUCH BEFORE SIGNING OF FINAL AGREEMENT ON 12-10-1999, ITSELF RAISES DOUBT ABOUT THE INTENTION OF THE ASSESSEE TO IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 5 DISCLOSE THESE TRANSACTIONS. ACCORDINGLY, LD. SR-DR STATED THAT THE LOWER AUTHORITIES HAVE RIGHTLY ASSESSED THE SALE TRANSACTIONS AS UNDI SCLOSED INCOME FOR THE BLOCK PERIOD IN THE HANDS OF THESE TWO ASSESSEES AND THE SAME MAY BE UPHELD. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. NOW THE QUESTION ARISES , IN VIEW OF THE ABOVE GIVEN FACTS, THAT, WHETHER THE ADVANCE TAX PAID IN LIEU O F SALE CONSIDERATION OF LAND IN MARCH, 00, WHEN THE SAME WAS DUE ON 15-12-1999, AN D THE SEARCH TOOK PLACE ON 28-01-2000 AND ALSO STATEMENTS DATED 14-02-2000 OF SHRI NATHUBHAI S PATEL AND DATED 24-02-2000 OF SHRI MUKESH I PATEL ON BEHALF O F THE ASSESSEE HAS BROUGHT OUT THESE TRANSACTIONS IN CASH INTO THE KNOWLEDGE OF DE PARTMENT, THE SALE CONSIDERATION IS UNDISCLOSED INCOME OR DISCLOSED INCOME IN TERMS OF PROVISIONS OF SECTION 158B(B) OF CHAPTER-XIVB OF THE ACT. WE FIND FROM THE FACTS OF THE CASE THAT THE PROPERTY IN QUESTION WAS SOLD TO SHRI MANISH PATEL BY THESE TWO ASSESSEES ON 25-10-1999. AS PER THE PROVISIONS OF THE ACT ASSESSEE HAS EARNED I NCOME IN THE SHAPE OF CAPITAL GAINS, WHICH WAS LIABLE TO TAX AS PER THE PROVISION OF ACT AND WERE LIABLE TO PAY ADVANCE TAX AS PER THE PROVISIONS CONTAINED IN CHAP TER-XVII-C, WHICH INTER ALIA PROVIDES FOR PAYMENT OF ADVANCE TAX FOR THE YEAR ON THE CURRENT INCOME IN INSTALLMENTS AS PROVIDED IN SECTION 211 OF THE ACT. IN THE PRESENT CASE, THE CAPITAL GAIN AROSE, WHEN THE ASSESSEE SOLD THE PROPERTY ON 25-10-1999 AND THE ADVANCE TAX ON THIS CAPITAL GAIN WAS TO BE PAID ON 15-12-1999, WHEN IT BECAME DUE. BOTH THE ASSESSEES CHOOSE TO PAY ADVANCE TAX AFTER THE DATE OF SEARCH I.E. 28-01-2000 AND EVEN AFTER STATEMENTS DATED 14-02-2000 OF SHRI NATH UBHAI S PATEL AND DATED 24-02- 2000 OF SHRI MUKESH I PATEL ON BEHALF OF THE ASSESS EE HAS BROUGHT OUT THESE TRANSACTIONS IN CASH INTO THE KNOWLEDGE OF DEPARTME NT I.E. AS ON 15-03-2000. ONE MORE FACT IS TO BE DISCUSSED IS THAT EVEN BOTH THE ASSESSEES HAVE FAILED TO FILE THE RETURNS OF INCOME ON THE DUE DATES OF FILING OF RET URN FOR THE ASSESSMENT YEAR 2000- 01 AND SHRI ISHWARBHAI B PATEL FILED HIS RETURN OF INCOME ON 11-03-2002, WHICH IS A BELATED RETURN WHEREAS SMT. KAMLABEN C PATEL COULD FILE HER RETURN OF INCOME ONLY ON 31-08-2004 AGAIN A BELATED RETURN. THESE BELATED RETURNS ARE NO RETURNS IN THE EYES OF LAW. WE HAVE GONE THROUGH THE CASE LAWS CIT ED BY THE LD. COUNSEL FOR ASSESSEE OF HONBLE GAUHWATI HIGH COURT IN THE CASE OF DR. MRS. ALKA GOSWAMI (SUPRA) HELD THAT UNLESS THE PROVISIONS OF BLOCK AS SESSMENT SPECIFICALLY BAR THE IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 6 ASSESSING OFFICER FROM TAKING INTO CONSIDERATION TH E INCOME DISCLOSED BY THE ASSESSEE ON PAYMENT OF ADVANCE TAX TO BE TAKEN INTO CONSIDERATION, THE INCOME SO DISCLOSED ON PAYMENT OF ADVANCE TAX WILL BE AN INCO ME DISCLOSED TO REVENUE AND CANNOT BE TREATED AS AN INCOME UNDISCLOSED FOR THE BLOCK PERIOD UNDER CHAPTER-XIV- B OF THE ACT. WE FURTHER FIND FROM THE DECISION OF HONBLE MADRA HIGH COURT IN THE CASE OF A.R. ENTERPRISES (SUPRA), WHEREIN HONBLE HIGH COURT HAS CONSIDERED THAT THERE CANNOT BE ANY MANNER OF DOUBT THAT WHEN THE A SSESSEE PAYS ADVANCE TAX, THE ADVANCE TAX PAYMENT IS ASSESSED BY THE ASSESSEE ON THE BASIS OF SELF-ASSESSED INCOME SO THE ADVANCE TAX REFLECTS THE INCOME ADMIT TED BY THE ASSESSEE. WHEN THE ASSESSEE PAYS THE ADVANCE TAX HE DISCLOSES HIS INCO ME AT THE PARTICULAR POINT OF TIME, WHICH MAY OR MAY NOT BE TAXABLE ON A SUBSEQUE NT DATE ON THE RETURN SUBMITTED BY HIM UNDER SECTION 139 OR UNDER SUB-SECTION (1) O F SECTION 142 BECAUSE OF THE ASSESSEES TAX PLANNING OR HE MAY CLAIM EXEMPTION A ND REFUND OF THE TAX PAID, BUT FOR DOING SO HE WILL HAVE TO SHOW THE INCOME ON WHI CH THE ADVANCE TAX IS PAID AND THEN CLAIM REFUND OR COMPLETE EXEMPTION, AS THE CAS E MAY BE, AS PERMISSIBLE UNDER THE RELEVANT STATUTE. FURTHER THE HONBLE HIGH COUR T ELABORATED THAT THE DISCLOSURE OF THE SELF-ASSESSED INCOME BY THE ASSESSEE WOULD ONLY ENTITLE THE ASSESSEE TO CLAIM REFUND OR EXEMPTION FROM TAX AS THE ASSESSEE IS REQ UIRED TO SHOW THE INCOME ON THE BASIS OF WHICH THE ADVANCE TAX IS PAID OR ULTIMATE CLAIM IS MADE. MOMENT THE ADVANCE TAX IS PAID THE TAXABLE INCOME AT THAT POIN T OF TIME IS DISCLOSED TO THE REVENUE BY THE ASSESSEE AND IT CANNOT BE SAID BY TH E REVENUE THAT THE ADVANCE TAX PAID WOULD OR MAY NOT BE THE TAX PAYABLE ON THE BASIS OF THE ULTIMATE ASSESSMENT MADE AND, THEREFORE IT CANNOT BE TAKEN T O BE A REPRESENTATION OF THE INCOME ON WHICH THE ADVANCE TAX WAS PAID. HONBLE H IGH COURT POSED A QUESTION THAT WHETHER THE INCOME, WHICH REPRESENTS THE PAYME NT OF ADVANCE TAX, WOULD BE SAID TO BE AN UNDISCLOSED INCOME WHEN THE PAYMENT O F ADVANCE TAX ITSELF NECESSARILY IMPLIES DISCLOSURE OF THE INCOME ON WHI CH THE ADVANCE TAX IS PAID BY THE ASSESSEE TO THE REVENUE. HONBLE HIGH COURT DISCUSS ED CLAUSE (D) OF SUB-SECTION (1) OF SECTION 158BB AND NOTED THAT WHILE ASSESSING THE AGGREGATE OF THE TOTAL INCOME, THE INCOME RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEFORE THE DA TE OF THE SEARCH OR REQUISITION RELATING TO SUCH PREVIOUS YEAR SHALL BE TAKEN INTO CONSIDERATION WHETHER THE PREVIOUS YEAR HAS NOT ENDED OR THE DATE OF FILING THE RETURN OF THE INCOME UNDER SUB-SECTION (1) OF SECTION 139 HAS NOT EXPIRED. ACCORDINGLY, WH EN THE ASSESSEE IS REQUIRED TO FILE IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 7 THE SELF-ASSESSMENT FOR PAYMENT OF THE ADVANCE TAX BEFORE THE INCOME-TAX AUTHORITIES THE RETURN OF ASSESSMENT WOULD FALL WIT HIN THE DOCUMENTS MAINTAINED IN THE NORMAL COURSE BY THE ASSESSEE AND AS SUCH THE I NCOME DISCLOSED ON PAYMENT OF THE ADVANCE TAX WOULD FALL WITHIN CLAUSE (D) OF SUB -SECTION (1) OF SECTION 158BB. FINALLY, IT WAS CONCLUDED THAT IN ANY CASE ALTHOUGH THERE IS A DIFFERENCE BETWEEN THE REGULAR ASSESSMENT AND THE BLOCK ASSESSMENT, AS SPE CIFICALLY BAR THE ASSESSING AUTHORITY FROM TAKING INTO CONSIDERATION THE INCOME DISCLOSED BY THE ASSESSEE ON PAYMENT OF THE ADVANCE TAX TO BE TAKEN INTO CONSIDE RATION, THE INCOME DISCLOSED BY THE ASSESSEE ON PAYMENT OF ADVANCE TAX WOULD BE AN INCOME DISCLOSED TO THE REVENUE AND CANNOT BE TREATED AS AN INCOME DISCLOSE D TO THE RELEVANT ASSESSMENT YEAR. 7. BEFORE US THE LD. DR POINT OUT THAT ON THE BASI S OF FACTS AVAILABLE BEFORE US, WE CANNOT TAKE THE ADVANCE TAX PAYMENT BY THESE TWO ASSESSEES AS PAID ON OR BEFORE THE DATE OF SEARCH AND NOT EVEN ON DUE DATE OF ADVANCE TAX I.E. 15-12-1999. WE HAVE GONE THROUGH THE PROVISIONS OF THE ACT AND NOTED THE DEFINITION OF UNDISCLOSED INCOME U/S.158B(B) AS UNDER:- 158B. IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUI RES,- (A) (B) UNDISCLOSED INCOME INCLUDES ANY MONEY, BULLIO N, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME BASED ON AN Y ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHERE S UCH MONEY, BULLION, JEWELLERY, VALUABLE ARTICLE, THING, ENTRY IN THE BO OKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSACTION REPRESENTS WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR T HE PURPOSES OF THIS ACT. WE FIND THAT HONBLE APEX COURT IN THE CASE OF CIT V. SHELLY PRODUCTS & ANR. (2003) 261 ITR 367 (SC) HELD THAT SUB-SECTION(2) OF SECTIO N-4 OF THE ACT PROVIDES FOR PAYMENT OF TAX IN ADVANCE AND DEDUCTION TAX AT SOUR CE AS PROVIDED UNDER THE ACT. FOR THE DEDUCTION OF TAX AT SOURCE AND PAYMENT OF T AX IN ADVANCE, THE RELEVANT PROVISION PROVIDES THAT NOTWITHSTANDING THE REGULAR ASSESSMENT IN RESPECT OF ANY INCOME IS TO BE MADE IN A LATER ASSESSMENT YEAR, TH E TAX ON SUCH INCOME SHALL BE PAYABLE BY DEDUCTION AT SOURCE OR BY ADVANCE TAX AS THE CASE MAY BE, IN IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 8 ACCORDANCE WITH THE PROVISION OF CHAPTER-XVII OF TH E ACT. THE ADVANCE TAX IS PAYABLE DURING THE FINANCIAL YEAR IN ACCORDANCE WITH THE PR OVISION OF SECTION 208, 209 AND 210, WHICH PROVIDE FOR COMPUTATION OF ADVANCE TAX A ND PAYMENT OF ADVANCE TAX BY THE ASSESSEE. SECTION 211 PRESCRIBES THE INSTALLMEN TS OF ADVANCE TAX AND THE DUE DATES. THE PROVISION OF THE ACT, THEREFORE CAST AN OBLIGATION ON THE ASSESSEE TO PAY ADVANCE TAX BY MAKING THE DEPOSITS IN INSTALLMENTS AS REQUIRED BY THE PROVISIONS OF SECTION-211 OF THE ACT. WE FIND FROM THE ABOVE DEFI NITION OF UNDISCLOSED INCOME AS PROVIDED U/S.158B(B) OF THE ACT AND AS PER THIS DEF INITION THE UNDISCLOSED INCOME WOULD BE WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSES OF THE ACT. IN THE PRESENT CASE, NO DOUBT, THE ASSESSE E HAS PAID ADVANCE TAX AFTER THE DATE OF SEARCH AND EVEN AFTER THE DUE DATE OF INSTA LLMENT OF ADVANCE TAX AND ACCORDINGLY IN NO WAY IT CAN BE HELD THAT THE INCOM E ON ACCOUNT OF CAPITAL GAIN AROSE OUT OF SALE TRANSACTION OF LAND IS DISCLOSED INCOME . ACCORDINGLY, WE UPHELD THE ORDER OF CIT(A) CONFIRMING THE ADDITION. THIS ISSUE OF A SSESSEES APPEALS IS DISMISSED. 8. AS REGARDS TO THE NEXT CLAIM OF THE ASSESSEE THA T THE ASSESSING OFFICER HAS NOT ALLOWED THE DEDUCTION OF FAIR MARKET VALUE AS O N 01-04-1981, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.2 :- 2. THE LD. CIT(APPEALS) I, BARODA HAS ERRED IN LA W AND IN FACTS IN CONFIRMING THE ACTION OF THE LD. A.O IN DISALLOWING DEDUCTION OF FAIR MARKET VALUE OF PROPERTY AS ON 1.4.1981 DETERMINED BY THE APPELLANT AT RS.16,000/- AS REQUIRED DIN TERMS OF PROVISIONS OF SECTION 48 O F THE I.T. ACT. THE LD. CIT(APPEALS)-I, BARODA OUGHT TO HAVE HELD THAT WHIL E COMPUTING THE CAPITAL GAINS, THE DEDUCTION OF COST (FAIR MARKET VALUE AS ON 1.4.1981) AS CLAIMED BY THE APPELLANT HAS TO BE ALLOWED. 9. BOTH THE SIDES, AFTER MAKING ARGUMENTS AGREED TH AT THE ISSUE CAN BE SET ASIDE TO THE FILE OF ASSESSING OFFICER TO RECONSIDER THE CLAIM OF FAIR MARKET VALUE OF PROPERTY AS ON 1-4-1981 AS CLAIMED BY THE ASSESSEE AT RS.16, 000/-. AS BOTH THE PARTIES AGREED, WE HAVE NO HESITATION IN SETTING ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER. AO IS DIRECTED TO RE-COMPUTE THE DEDUCTION AFTER TAKING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01-04-1981 ON THE BASIS OF EV IDENCES TO BE PRODUCED BY THE IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 9 ASSESSEE AND ALSO AFTER PROVIDING REASONABLE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. 10. THE NEXT ALTERNATIVE CLAIM MADE BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF CLAIM U/S.54F OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.3 :- 3. THE LD. CIT(APPEALS)-I, BARODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE LD. A.O. IN DISALLOWING THE CLAIM MADE UNDER SECTION 54F IN COMPUTING THE INCOME DERIVED FROM SALE OF CAPITAL A SSET. THE DEDUCTION BEING RIGHTFULLY CLAIMED OUGHT TO BE ALLOWED. 11. THE BRIEF FACTS ON THIS ISSUE ARE THAT THE ASSE SSEE CLAIMED TO HAVE INVESTED THE SALE CONSIDERATION OF RS.6.20 LAKHS IN THE PURC HASE OF RESIDENTIAL FLAT AT S-3 AND S-4 AT SHYANA APARTMENT., SHARTI MARAG, NANA BAZAR, V.V. NAGAR, ANAND. THE ASSESSEE FILED COPY OF AGREEMENT FOR CONSTRUCTION, THE RECEIPT AND CONFIRMATION OF RECEIPT OF PAYMENT BY THE BUILDER WAS ALSO ENCLOSED . THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE BY DISCUSSING THE FACTS AND BY GIVING FOLLOWING FINDING IN HIS ASSESSMENT ORDER:- IN THIS CASE, THE ASSESSEE HAS INVESTED THE CONSID ERATION OUT OF SALE OF PLOT OF LAND TO AN EXTENT OF RS.6,20,000/- IN THE PURCHA SE OF RESIDENTIAL FLATS AT SHAYANA APARTMENTS, SHASTRI MARG, NANA BAZAR, V.V.N AGAR, ANAND. THE ASSESSEE HAS ENTERED INTO TWO SEPARATE AGREEMENTS W ITH THE BUILDER FOR TWO FLATS I.E. FLAT NO.S-3 & S-4 WHICH WILL BE CONSTRUCTED IN DUE COURSE. THUS, THE ASSESSEE HAS SUBMITTED ONLY TWO AGREEMENTS FOR CONS TRUCTION WITH THE BUILDER WHEREIN THE PAYMENTS AS MENTIONED IN THE SUBMISSION OF THE ASSESSEE WILL BE MADE. THERE IS NO EVIDENCE ON RECORD TO PROVE THE P AYMENT OF ANY MONEY TO THE BUILDER. FURTHER THE ASSESSEE HAS NOT GIVEN ANY DETAILS ABOUT PAYMENTS AND SUBSEQUENT POSSESSION OF SAID FLATS. ON PERUSAL OF THESE AGREEMENTS, IT IS OBSERVED THAT THE BUILDER FIRM IS A PROPRIETARY FIRM WHICH IS OWNED BY SHRI PANKAJBHBAI NATUBHAI PATEL, WHO APPEARS TO BE RELAT IVE OF SHRI NATUBHAI PATEL (SEARCH & SEIZURE ACTION WAS TAKEN ON HIM ON 28.01.2000). THUS, IT IS VERY CLEAR THAT THE ASSESSEE HAD PURCHASED TWO RESI DENTIAL FLATS AT SHAYANA APARTMENTS. THIS IS IN CONTRAVENTION TO PROVISO TO SEC. 54F AND THIS VERY FACT DISQUALIFIES THE ASSESSEE OF ANY CLAIM FOR EXEMPTIO N U/S.54F. FURTHER THE TRANSACTION ITSELF APPEARS TO BE DOUBTFUL IN THE AB SENCE OF ANY DOCUMENTARY EVIDENCE EXCEPT AGREEMENT FOR CONSTRUCTION WHICH HA S GOT NO EVIDENTIAL VALUE. THERE ARE NO DETAILS ABOUT THE INVESTMENT WI THIN THE PRESCRIBED PERIOD OR THE POSSESSION TAKEN EVIDENCING THE OWNERSHIP OF THESE FLATS IN THE PRESCRIBED PERIOD. IN THESE CIRCUMSTANCES, THE ASSE SSEE IS NOT ELIGIBLE FOR EXEMPTION U/S.54F OF THE I.T. ACT, 1961. IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 10 THE CIT(A) ALSO CONFIRMED THE ACTION OF ASSESSING O FFICER EXACTLY ON SIMILAR FACTS. AGGRIEVED, BOTH THE ASSESSEES CAME IN SECOND APPEAL BEFORE US. 12. BEFORE US LD. COUNSEL FOR ASSESSEE STATED THAT THE FLATS IN QUESTION IS PURCHASED FROM M/S. VISHWAKARMA BUILDERS AND M/S. A KSHAR BUILDERS AND THAT THE ENTIRE PAYMENT WAS MADE BEFORE 31-03-2000 AS CONFIR MED BY THEM. THE ASSESSEE HAS ALSO GATHERED THE CONFIRMATION OF HAVING SOLD T HE FLAT TO THE ASSESSEE FROM M/S. VISHWAKARMA BUILDERS AND M/S. AKSHAR BUILDERS ON TH E BASIS OF THE INFORMATION FURNISHED TO ITO, CIB, ANAND, WHEREIN THEY HAVE INF ORMED THE PARTICULARS OF SALE INCLUDING THE SALE MADE TO THE ASSESSEE, A COPY OF WHICH IS ENCLOSED AND STATED THAT THE FLATS TO THE ASSESSEE IS SOLD DURING THE FINANC IAL YEAR 1999-00 AND THE POSSESSION OF THE FLATS ARE ALSO WITH THE ASSESSEE. IT IS SUBMITTED BY LD. COUNSEL THAT SECTION 54F IS ALLOWABLE TO AN ASSESSEE WHO IN VESTS WITHIN THE PRESCRIBED PERIOD, THE CAPITAL GAIN IN THE PURCHASE OF A RESI DENTIAL HOUSE. ACCORDINGLY, THE LD. COUNSEL STATED THAT THESE TWO ASSESSEES PURCHASED E ACH OF THEM, TWO ADJOINING FLATS TO MEET THEIR NEEDS OUT OF SALE PROCEEDS OF L AND AND SO ASSESSEES CANNOT BE DENIED EXEMPTION U/S.54F OF THE ACT. LD. COUNSEL F URTHER STATED THAT IF THE INTENTION OF THE LEGISLATURE WAS TO ALLOW EXEMPTION IN RESPEC T OF ONE RESIDENTIAL HOUSE, THEN INSTEAD OF USING THE EXPRESSION A RESIDENTIAL HOUS E THE EXPRESSION ONE RESIDENTIAL HOUSE WOULD HAVE BEEN USED. A RESIDENTIAL HOUSE CA N CONTAIN MORE THAN ONE RESIDENTIAL UNITS AND STILL CAN BE CONSIDERED A RE SIDENTIAL HOUSE ONLY. UNDER THE GENERAL CLAUSES ACT, 1987 SINGULAR INCLUDES PLURAL AND VICE VERSA AND THEREFORE THE DEDUCTION BEING AN INCENTIVE PROVISION HAS TO BE RE SOLVED IN FAVOUR OF THE ASSESSEE AND HE RELIED ON CASE LAW OF THE TRIBUNAL IN THE CA SE OF D. ANAND BASAPPA V. ITO (2005) 92 TTJ 597 (BANG) AND IN THE CASE OF K.G. VYAS V. 7 TH ITO (1986) 16 ITD 195 (BOM). IN THE ABOVE REFERRED CASE LAWS THE AUTHORIT IES HAVE HELD THAT WHERE THE ASSESSEE HAS PURCHASED TWO HOUSES, WHICH ARE FOR TH E NEEDS OF THE ASSESSEE, THE DEDUCTION CANNOT BE DENIED. IN THE PRESENT CASE OF ASSESSEE, THE RESIDENTIAL FLATS BEING ADJOINING ARE USED AS ONE HOUSE AND, THEREFOR E, THE DEDUCTION CLAIMED U/S54 OF THE ACT IS TO BE ALLOWED. 13. ON THE OTHER HAND, LD. SR-DR STATED THAT THE BA SIC DETAILS AS PRODUCED BEFORE TRIBUNAL NOW ARE NOT AVAILABLE TO THE ASSESS ING OFFICER AND EVEN THE IT(SS)A NO.167-68/AHD/2005 B.P.1/4/99 TO 28/1/00 SMT. KAMLAABEN C & MUKESH I PATEL V. ACIT, CIR-3 BRD PAGE 11 AUTHORITIES CITED BY THE LD. COUNSEL AS NOTED ABOVE ARE ALSO TO BE CONSIDERED. ACCORDINGLY, HE REQUESTED FOR REMITTING THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE ABOVE F ACTS THAT THE COMPLETE DETAILS WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER AS REGARDS TO PURCHASE OF RESIDENTIAL FLATS BY THESE ASSESSEES. THE ASSESSEE IS DIRECTED TO PRODUCE THESE DETAILS BEFORE THE ASSESSING OFFICER AND LET THE ASSESSING OFFICER EXAMINED THESE DETAILS IN VIEW OF THE FACT THAT WHETHER THESE FLATS ARE USED BY THE A SSESSEE AS SINGLE UNIT I.E. A RESIDENTIAL HOUSE AND EVEN THE INTENTION OF THE ASS ESSEE IS TO BE DETERMINED FROM THE CIRCUMSTANTIAL EVIDENCES AND FROM THE FACTS OF THE CASE. THE ASSESSING OFFICER ALSO TO CONSIDER THE CASE LAWS RELIED ON BY THE ASS ESSEE AS NOTED ABOVE. ACCORDINGLY, THIS ISSUE OF BOTH THE APPEALS OF THE ASSESSEE IS SET ASIDE TO THE FILE OF ASSESSING OFFICER. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 23 RD JULY,2010 SD/- SD/- ( G.D.AGARWAL ) ( MAHAVIR SINGH ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 23/07/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE RESVENUE. 3. THE CIT(APPEALS)-I, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD
