Shri Ashik Dhirajlal Sanghvi, Ahmedabad V. The Dy.CIT, Central Circle-2(4), Ahmedabad

ITSSA 186/AHD/2015

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7521 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN DATES OF HEARING OF
• Assessee Lawyers: P M MEHTA
• Keywords: Unexplained investment
• Section: 153A; 69

Judgement Text

ASHIK DHIRAJLAL SANGHVI IT (SS) 186/AHD/2015 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD C BENCH, AHMEDABAD [ CORAM : HON BLE JUSTICE P . P BHAT T , PRESIDENT AND PRAMOD KUMAR, VP ] IT ( SS ) 186 / AHD / 2015 ASSESSMENT YEAR : 2010 - 11 ASHIK DHIRAJLAL SANGHVI ............. APPELLANT A - 14, TIRTHBHUMI APARTMENT, OPP . LAW GARDEN, ELLISBRIDGE, AHMEDABAD 380006 ( PAN NO . ATJPS9279F ) VS DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 ( 4 ) ....... RESPONDENT AHMEDABAD APPEARANCES BY P . M . MEHTA FOR THE APPELLANT L . P JAIN FOR THE RESPONDENT DATES OF HEARING OF THE APPEAL : DECEMBER 20 TH , 2019 DATE OF PRONOUNCING THIS ORDER : MARCH 12 TH , 2020 O R D E R PER BENCH : 1 . BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF LEARNED CIT ( A ) S ORDER DATED 26 TH MARCH 2015, IN THE MATTER OF ASSESSMENT UNDER SECTION 153A R . W . S . 143 ( 3 ) THE INCOME TAX ACT 1961, FOR THE ASSESSMENT YEAR 2010 - 11 . 2 . GRIEVANCES OF THE ASSESSEE, IN SUBSTA NCE, IS THAT THE LEARNED CIT ( A ) ERRED IN CONFIRMING THE ADDITION OF RS 4,10,000 /- AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT . ASHIK DHIRAJLAL SANGHVI IT (SS) 186/AHD/2015 PAGE 2 OF 3 3 . THE ISSUE IN APPEAL IS IN A VERY NARROW COMPASS OF MATERIAL FACTS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT MADE FULL PAYMENT TOWARDS PURCHASE OF FLAT AND YET HE IS SHOWING RENTAL INCOME FROM THE SAID FLAT . WHEN THE PROBED IN THE MATTER, IT WAS EXPLAINED THAT THE ASSESSEE, ALONGWITH HIS FAMILY MEMBERS, HAD PURC HASED FLATS FOR A TOTAL CONSIDERATION OF RS . 88 . 55 LAKHS, OUT OF WHICH RS . 12 . 15 LAKHS REMAINED UNPAID AS THERE WERE UNRESOLVED ISSUES BETWEEN THE ASSESSEE AND BUILDER, AND OUT OF GROUP THIS RS . 12 . 15 LAKHS, THE AMOUNT PERTAINING TO THE ASSESSEE WAS RS . 4 . 10 LAKHS . REJECTING THIS EXPLANATION, THE ASSESSING OFFICER ADDED RS . 4 . 10 LAKHS AS UNEXPLAINED INVESTMENT AND OBSERVED AS FOLLOWS :- THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED BUT SAME IS NOT FOUND ACCEPTABLE FOR THE REASON THAT THE ASSESSEE HAS TAKEN POSSESSION OF THE FLAT AND THE SAME HAS BEEN RENTED TO IIT GANDHINAGAR, THERE IS NO POSSIBILITY THAT THE SELLER WOULD KEEP THE AMOUNT PENDING AND GIVE POSSESSION OF THE FLAT TO THE ASSESSEE . THE CONTENTION OF THE ASSESSEE THAT THERE WAS A DISPUTE AND FOR THIS PURPOSE THE PAYMENTS WERE KEPT OUTSTANDING IS A CONTRADICTORY SINCE THE SELLER WOULD NOT GIVE THE POSSESSION WHEN THERE IS A DISPUTE WITH THE ASSESSEE AND ITS GROUP . HENCE CREDENCE FOR THE CONTENTION OF THE ASSESSE CANNOT BE GIVEN SINCE THE ASSESSEE H AS COMPLETE RIGHTS ON THE PROPERTY AS HE IS RECEIVING RENTAL INCOME SINCE 2009 . THUS, IT IS EVIDENT THAT THE HAS MADE INVESTMENT IN THE SAID PROPERTY VALUED AT RS . 4,10,000 /- HENCE ADDITION OF RS . 4,10,000 /- IS MADE U / S . 69 OF THE I . T ACT , 1961 AS UNEXPLAI NED INVESTMENT IN PROPERTY . SINCE THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME, PENALTY PROCEEDINGS U / S . 271 ( 1 )( C ) OF THE ACT ARE INITIATED SEPARATELY . 4 . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT ( A ) BUT WITHOUT ANY SUCCESS . THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE ME . 5 . I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITIONS . 6 . I HAVE NOTICED THAT THE ASSESSEE HAS COMPLETE DETAILS OF 11 FAMILY MEMBERS IN WHOSE NAMES THE FLATS WERE PURCHASES, AND, IN ANY CASE, THAT IS NOT EVEN DISPUTED . IN SUCH CIRCUMSTANCES, THERE IS NO GOOD REASON TO REJECT THE EXPLANATION OF THE ASSESSEE THAT A PART OF TOTAL CONSI DERATION REMAINED UNPAID, ON ACCOUNT OF SOME UNRESOLVED ISSUES, AND OUT OF THIS UNPAID ASHIK DHIRAJLAL SANGHVI IT (SS) 186/AHD/2015 PAGE 3 OF 3 AMOUNT, SHARE OF THE ASSESSEE WAS RS . 4 . 10 LAKHS . WE HAVE PERUSED THE COMPLETE DETAILS FURNISHED BEFORE US IN THE PAPER BOOK AND WE SEE NO REASONS TO REJECT THE EXPLANAT ION OF THE ASSESSEE . THE OUTSTANDING HAS BEEN IN ANY CASE, SUBSEQUENTLY PAID BY THE ASSESSEE . IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, I UPHOLD THE PLEA OF THE ASSESSEE . THE DISALLOWANCE OF RS . 4,10,000 /- IS THUS DELETED . 7 . IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED UNDER, RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD. SD/ - SD/ - JUSTICE P . P BHATT PRAMOD KUMAR ( PRESIDENT ) ( VICE PRESIDENT ) AHMEDABAD, DATED THE 12 TH DAY OF MARCH , 2020 COPIES TO : ( 1 ) THE APPELLANT ( 2 ) THE RESPONDENT ( 3 ) CIT ( 4 ) CIT ( A ) ( 5 ) DR ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD