Shri Naranbhai B.Patel, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

ITSSA 53/AHD/2008

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7899 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-11-2011
• Assessment Year: misc
• Appeal Filed On: 19-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI CITD R
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained expenditure; Block assessment
• Section: 143(3)

Judgement Text

, , . .. . . .. . , , , , ! ! ! ! ' '' '# ## # ' ' ' '. .. .$ #$ $ #$ $ #$ $ #$ , %& ' %& ' %& ' %& ' % ! % ! % ! % ! IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD BEFORE HONBLE SHRI G.C.GUPTA, V.P. & HONBLE SHRI A.MOHAN ALANKAMONY, A.M.) # # # #.( .(.( .(' '' '. .. .' '' '.) .).) .) IT(SS)A NO. 53 / AHD./2008 *+- BLOCK PERIOD 01.04.1986 TO 11.02.1997 NARANBHAI B. PATEL, AHMEDABAD -VS- ACIT, CIRCLE-6, AHMEDABAD (-. /APPELLANT) ( /0-. /RESPONDENT ) PAN : ADQPP 3847B -. 1 2 % / APPELLANT BY : SHRI S.N. DIVATIA, A.R. /0-. 1 2 % / RESPONDENT BY : SHRI ALOK JOHRI, CIT(D.R.) 3 1 45& / DATE OF HEARING : 15/11/2011 6$* 1 45& / DATE OF PRONOUNCEMENT : 29/12/2011 %7 %7 %7 %7 / ORDER PER SHRI A.MOHAN ALANKAMONY, A.M. : THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XI, AHMEDABAD I N APPEAL NO. CIT(A)- XI/458/07-08 DATED 16.04.2008 FOR THE BLOCK PERIOD 01.04.1986 TO 11.02.1997 PASSED UNDER SECTION 250 R.W.S. 158BC, 143(3) & 254 OF THE I.T. ACT, 1961. 3. THOUGH THE ASSESSEE HAS RAISED FOUR GROUNDS IN AN ILLUSTRATIVE AND NARRATIVE MANNER, THE SUBSTANCE OF HIS GRIEVANCE IS CONFINED TO A SOLITARY ISSUE, WHICH IS REPRODUCED AS UNDER: THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ADDITIO N OF RS.8,37,500/- MADE BY THE AO AS UNEXPLAINED EXPENDITURE. 4. THE ASSESSEE, AN INDIVIDUAL, FURNISHED HIS RETUR N OF INCOME FOR THE BLOCK PERIOD 01.04.1986 TO 11.02.1997 ON 07.06.2001, DECLARING A TOTAL INCOME OF RS.NIL WHICH WAS COMPLETED U/S 158BC R.W.S. 143(3) OF THE ACT ON 25. 6.2001 AT AN UNDISCLOSED INCOME IT(SS)A NO. 53-AHD-08 2 OF RS.24.98 LAKHS. AGGRIEVED, THE ASSESSEE TOOK UP THE ISSUE WITH THE CIT (A) WHO, HOWEVER, UPHELD THE STAND OF THE AO VIDE HIS ORDER DATED 24.3.2003. ON AN APPEAL, THE HONBLE TRIBUNAL IN ITS ORDER DATED 13.10.2006 HAD RESTORED THE APPEAL TO THE FILE OF THE AO FOR FRESH CONSIDERATION AFTER AFFORDING AN O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LD. AO, AFTER AFFORDING AN OPPORTUNI TY TO THE ASSESSEE AND CONSIDERING HIS LENGTHY SUBMISSIONS AND ALSO FOR THE DETAILED R EASONS RECORDED THEREIN, HAD DETERMINED THE ASSESSEES UNDISCLOSED INCOME AT RS. 24.98 LAKHS WHICH INCLUDED UNACCOUNTED EXPENDITURE OF RS.8,37,500/-. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) FOR RELIEF. WITH REGARD TO THE ASSESSEES CLAIM OF DELETION OF ADDITION OF RS. 8,37,500/- MADE BY THE AO, THE LD. CIT (A), AFTER CONSIDERING THE ASSESSEES CONTENTIO NS AS RECORDED IN HIS IMPUGNED ORDER, OBSERVED AS UNDER: 4.1.2. AS IT COULD BE SEEN FROM THE ABOVE WRITTEN S UBMISSIONS OF THE APPELLANT THAT THERE IS NO CLEAR EXPLANATION FROM THE APPELLA NT ABOUT THE ADDITION MADE AT RS.8,37,500/-. IT IS CLAIMED THAT THE APPELLANT HA D FURNISHED SEVERAL INFORMATION AT DIFFERENT STAGES OF ASSESSMENT IN PI ECE MEAL. CERTAIN INFORMATION ARE FURNISHED DURING APPEAL PROCEEDING WHICH ARE IN GUJARATI LANGUAGE AND THEY ARE NOT SELF EXPLANATORY TO SUBST ANTIATE THE APPELLANTS CLAIM. IT APPEARS THAT EVEN DURING THE ASSESSMENT PROCEEDINGS ALSO THE EXPENDITURE OF RS.8,37,500/- WAS NOT EXPLAINED PROP ERLY BY PRODUCING RELEVANT DETAILS, THEREFORE, THE AO HAS ADDED THE SAME AS UN EXPLAINED. NOW DURING APPEAL PROCEEDINGS ALSO THE SITUATION IS THE SAME A ND THE DETAILS SUBMITTED ARE NOT SELF-EXPLANATORY AND THEY ARE NOT CLEARLY POINT ED OUT BY THE A.R. HENCE, I AM INCLINED TO CONFIRM THE ADDITION MADE BY THE AO RS.8,37,500/- 6. DURING THE COURSE OF HEARING, THE LD. A R SUBMIT TED THAT IN THE STATEMENT FILED ALONG THE BLOCK RETURN, IT WAS MENTIONED THAT THE P AYMENT FOR PROPERTY WAS MADE OUT OF LOANS FROM RELATIVES AND SUB-PARTNERS AND OUT OF HIS INCOME AND ALSO INCOME AGRICULTURAL ACTIVITIES; AND THAT HIS SHARE WAS O NLY 15% AND THE REMAINING SHARE OF 10% WAS THAT OF TWO SUB-PARTNERS. IT WAS, FURTHER, EMPHASIZED THAT CONFIRMATION OF DEPOSITORS WERE ALSO FURNISHED BEFORE THE AO ALONG WITH NECESSARY EVIDENCES IN THE ORIGINAL BLOCK ASSESSMENT PROCEEDINGS. THE ASSESSEE , IN HIS SUBMISSION DATED 7.2.2008, HAD GIVEN COMPLETE DETAILS OF DOCUMENTS ALONG WITH THE EVIDENCES FURNISHED IN THE PREVIOUS BLOCK ASSESSMENT ALONG WITH THE AFFIDAVITS OF THE PARTIES CONCERNED. IT(SS)A NO. 53-AHD-08 3 HOWEVER, THE AO HAD NOT LOOKED INTO THE DOCUMENTS F URNISHED DURING THE BLOCK ASSESSMENT PROCEEDINGS AND ALSO MADE NO ENQUIRIES T O ASCERTAIN THE VERACITY OF SUCH DEPOSITS. FURTHER, TWO SUB-PARTNERS, SHRI PRAHALAD BHAI HATHIBHAI PATEL AND SHRI RANCHODBHAI MANGABHAI INVESTED RS.1,67,500/- EACH. IT WAS CONTENDED THAT THE SUB- PARTNERS, IN THEIR STATEMENTS ON OATH, HAVE ALSO VO UCHED FOR HAVING INVESTED RS.1,67,500/ EACH AND ALSO FURNISHED NECESSARY PROO F OF HAVING AGRICULTURAL LANDS BEING SOURCE OF INCOME TO INVEST THE SAID MONIES. IT WAS EXPLAINED BY THE LD. A R THAT THE LOWER AUTHORITIES HAVE FAILED TO REASON THAT TH E ASSESSEE HAD NOT INCURRED ANY UNEXPLAINED EXPENDITURE, BUT, PAYMENTS MADE TOWARDS PURCHASE OF RIGHTS IN THE AFORESAID LAND WHICH WERE MADE OUT OF THE CONTRIBUT IONS MADE BY TWO SUB-PARTNERS IN RESPECT OF WHOM NECESSARY DOCUMENTARY EVIDENCES WER E ADVANCED DURING THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS. IT WA S, THEREFORE, PLEADED THAT THE ADDITION OF RS.8,37,500/- MADE BY THE AO WHICH WAS UPHELD BY THE LD. CIT (A) ON A WRONG NOTION REQUIRES TO BE DELETED. 7. ON THE OTHER HAND, THE LD. D R SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND PLEADED THAT THE FINDINGS OF THE LD. CIT (A) REQUIR E TO BE SUSTAINED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND THE PAPER BOOK SUBMITTED BY THE ASSESSEE . IT IS SIGNIFICANT TO MENTION HERE THAT THE ASSESSEE HAS ALL ALONG BEEN CONSISTENTLY M AINTAINING THAT HE HAD NOT INCURRED ANY UNEXPLAINED EXPENDITURE, BUT, PAYMENTS MADE TOW ARDS PURCHASE OF RIGHTS IN THE SAID LAND WHICH WERE OUT OF THE CONTRIBUTIONS BY TW O SUB-PARTNERS. AS NO PROOF WAS FORTHCOMING AT THE ASSESSMENT PROCEEDINGS LEVEL WHI CH, PERHAPS, LED THE AO TO PRESUME THAT 4THE ASSESSEE HAS NOT BROUGHT ANYTHING SPECIFIC ON RECORD TO PROVE OTHERWISE EXCEPT CERTAIN VOUCHERS IN THIS REGARD. IN VIEW OF THE ABOVE, I AM LEFT WITH NO OPTION BUT TO TREAT THE SAME AS UNEXPLAINED EXPE NDITURE OF THE ASSESSEE AS HELD IN THE ORIGINAL ASSESSMENT ORDER. ON HIS PART THE LD. CIT (A) OBSERVED THAT CERTAIN INFORMATION ARE (IS) FURNISHED DURING THE APPEAL PR OCEEDINGS WHICH ARE IN GUJARATI LANGUAGE AND THEY ARE NOT SELF EXPLANATORY TO SUBST ANTIATE THE APPELLANTS CLAIM. THIS OBSERVATION OF THE LD. CIT (A), IN OUR CONSIDERED V IEW, LEADS TO AN INEVITABLE INFERENCE IT(SS)A NO. 53-AHD-08 4 THAT THE LD. CIT (A) HAD NOT APPLIED HIS MIND IN A BETTER PERSPECTIVE. HAD THERE BEEN ANY SHORTCOMING IN THE SUBMISSION OF THE ASSESSEE, THE LD. CIT (A) WAS WITHIN HIS SPHERE TO SEEK FURTHER CLARIFICATION ON THE ISSUE. IT COULD BE SEEN FROM THE DOCUMENTARY EVIDENCES ADVANCED BY THE ASSESSEE IN THE FORM OF C ONFIRMATION LETTERS/AFFIDAVITS/COPIES OF EXTRACT OF LAND HOLDIN GS FROM THE PERSONS FROM WHOM THE ASSESSEE HAD AVAILED LOANS, MENTIONED AT PAGES 131 157 OF THE PAPER BOOK SUBMITTED BY THE A.R., TOWARDS THE PAYMENT OF PURCHASES RIGHT S IN THE SAID LAND. THE SUB- PARTNER, SHRI PRAHLADBHAI HATHIDAS PATEL, IN HIS CO NFIRMATION LETTER AS WELL AS IN AN AFFIDAVIT, AFFIRMED THAT HE HAD PAID RS.1,67,500/- AFTER HAVING ENTERED INTO PARTNERSHIP WITH THE ASSESSEE HAVING 5 PAISE SHARE IN THE SAID LAND REFERRED TO IN PAGE NOS. 158 TO 167 OF THE PAPER BOOK. LIKEWISE, ANOTHER SUB-PARTN ER, SHRI RANCHODLAL MAGANLAL PATEL, IN HIS CONFIRMATION AS WELL AS IN THE AFFID AVIT, AVOWED THAT HE HAD ALSO LENT RS.1,67,500/- TO THE ASSESSEE IN JOINING AS A PARTN ER HAVING 5% SHARE IN THE SAID LAND REFERRED TO IN PAGES 168 TO 188 OF THE PAPER BOOK. WHEN A PERSON FURNISHED AN AFFIDAVIT (EXECUTED BEFORE AN EXECUTIVE MAGISTRATE) , THE SANCTITY OF WHICH CANNOT BE PLACED UNDER A SCANNER. . 8.1. TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCE S OF THE ISSUE AND ALSO THE DOCUMENTARY EVIDENCES ADDUCED BY THE ASSESSEE, WE A RE OF THE CONSIDERED VIEW THAT THE PAYMENT MADE TOWARDS PURCHASE OF RIGHTS IN THE SAID LAND HAS BEEN FULLY EXPLAINED AND THAT THE LD CIT (A) WAS NOT JUSTIFIED IN CONFIR MING THE ADDITION MADE BY THE AO ON FLIMSY GROUND. IT IS ORDERED ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8 %7 1 6$* 9#+ 29 / 12 /2011 $ : 1 3 ; SD/- SD/- (G.C.GUPTA) (A.MOHAN ALANKAMONY) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 29/12/2011 IT(SS)A NO. 53-AHD-08 5 %7 %7 %7 %7 1 11 1 /4< /4< /4< /4< =%<*4+ =%<*4+ =%<*4+ =%<*4+- -- - 1. -. 2. /0-. 3. ## 4 A 4. A- - 5.