SRI MUNEER M.K.H V. THE INCOME TAX OFFICER

ITA/1032/2017

AI Insights

The case involves an appeal by Sri. Muneer M.K.H against the order of the Income Tax Appellate Tribunal (ITAT) which upheld the disallowance of Rs.41,59,990 by the Assessing Officer. The disallowance was related to the source of funds used for purchasing land, which the appellant claimed was from an advance received from M/s.K.K.Educational & Charitable Trust. The ITAT did not consider additional documents provided by the appellant, which were intended to substantiate the source of income. The High Court of Karnataka decided to remit the matter back to the CIT(A) for a fresh consideration, allowing the appellant to submit the additional documents.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753948 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 26-09-2022
• Assessment Year: misc
• Other Referred Cases: Smt.S.Padmavati vs. ITO in ITA No.414/2009
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: JINITA CHATERJEE
• Keywords: Assessment Year 2006-07; Cash payment; Income source; Income tax appeal; Land purchase; Substantial questions of law
• Section: 260-A

Judgement Text

"1 ITA No. 1032/2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF SEPTEMBER, 2022 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE UMESH M ADIGA INCOME TAX APPEAL NO. 1032 OF 2017 BETWEEN: SRI. MUNEER M.K.H S O SRI. M.K. HUSSAIN KHAN AGED ABOUT 63 YEARS NO.832, 10TH A MAIN I STAGE, INDIRANAGAR BANGALORE 560 038 …APPELLANT (BY SMT. JINITA CHATERJEE, ADVOCATE FOR SHRI. S. PARTHASARATHI, ADVOCATE) AND: THE INCOME-TAX OFFICER WARD 7(1), BANGALORE PRESENTLY THE INCOME-TAX OFFICER WARD 1(2)(1), BMTC BUILIDNG 80 FEET ROAD ,KORAMANGALA BANGALORE-560 095 …RESPONDENT (BY SHRI. M. DILIP, ADVOCATE FOR SHRI. K.V. ARAVIND, ADVOCATE) THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 11.08.2017 PASSED IN ITA NO. 754/BANG/2014, FOR THE ASSESSMENT YEAR 2006-07, PRAYING TO FORMULATE THE Digitally signed by YASHODHA N Location: HIGH COURT OF KARNATAKA 2 ITA No. 1032/2017 SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 11.08.2017 BEARING ITA NO. 754/BANG/2014 FOR THE ASSESSMENT YEAR 2006-07 AND ETC., THIS INCOME TAX APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the assessee challenging the order dated 11.08.2017 in ITA No.754/Bang/2014 for the Assessment Year 2006-07 has been admitted to consider following questions of law: \"2. Whether the order of the Tribunal is bad in law in upholding the orders of the lower authorities in as much as the AO had not discharged his onus of disaproving by investigation and evidence the claim of the Appellant that the source for purchase of land was the advance received from M/s.K.K.Educational & Charitable Trust? 3. When the Appellant contended that the source for purchase of land was the advance from M/s.K.K.Educational & Charitable Trust and the said advance was received through the bank account of the Appellant and the contrary having not been proved, whether the Tribunal was justified in upholding the addition? 3 ITA No. 1032/2017 4. Whether the order of the Tribunal is good in law in as much as the Tribunal has not applied the ratio of the judgment of this Hon'ble Court in the case of Smt.S.Padmavati vs. ITO in ITA No.414/2009 dated 06.10.2010?\" 2. Heard Smt.Jinitha Chaterjee, learned advocate for the appellant and Shri M.Dilip, learned Standing Counsel for the Revenue. 3. Assessee's case is, he purchased 1 Acre 1 Guntas of land in Sy.No.111 (old No.53) in Hennur Village, Kasaba Hobli, Bengaluru North Taluk, Bengaluru, under a registered Sale Deed dated 08.03.2006. He had received the sale consideration from M/s.K.K.Educational & Charitable Trust. The Assessing Officer has held in Para 5 of his order that Assessee had claimed that he had paid a sum of Rs.27,70,000/- as consideration and Rs.13,89,990/- as Stamp duty and Registration fee. The Assessing Officer has held that the Assessee has not explained the source of income and the payment was made in cash. 4 ITA No. 1032/2017 On appeal, CIT(A)1 and ITAT2 have upheld the Assessing Officer's view. 4. Smt.Jinitha Chaterjee submitted that Assessee has produced additional documents before the ITAT to substantiate the source of income. With regard to the amount paid to the Sub-registrar, she relied upon the Statement of Accounts issued by the Andhra Bank and pointed out that on 07.03.2006, Assessee had obtained a pay order of sum of Rs.13,79,522/-. 5. She also pointed out that there are several withdrawals and the same has been used to pay the land owners. She submitted that ITAT has not considered these material facts. 6. Shri Dilip opposing the appeal submitted that it is clearly mentioned in Para 5 of the appeal memorandum that entire consideration amount of Rs.27,70,000/- was paid in cash in full and final settlement. He argued that withdrawal of money is not reflecting in the bank 1 Commissioner of Income Tax (Appeals) 2 Income Tax Appellate Tribunal 5 ITA No. 1032/2017 pass book. Therefore, the Assessing Officer has correctly held that assessee has not proved the source of income. 7. We have carefully considered rival contentions and perused the records. 8. The Assessing Officer has recorded in Para 5 of his order and disallowed Rs.41,59,000/-. The consideration amount is mentioned in the Sale Deed (Annexure-B) as Rs.27,70,000/-. The Assessing Officer has also recorded that a sum of Rs.13,89,990/- has been paid towards Stamp duty and Registration charges. Pass sheet of Andhra Bank (Annexure-C) shows that a pay order for Rs.13,79,522/- was obtained on 07.03.2006. Further, there are withdrawals on 07.01.2006, 08.01.2006, 27.01.2006 and 02.02.2006, which are proximate to the date of registration namely, 08.03.2006. In any event, assessee has shown the source of income for Rs.13,79,522/- spent towards Stamp Duty and Registration charges which is inclusive of 6 ITA No. 1032/2017 Rs.41,59,990/- disallowed by the Assessing Officer. The ITAT has not considered additional documents on the ground that assessee has not produced them before the Assessing Officer and CIT(A). Smt.Jinitha Chaterjee submitted that the matter has been remanded to CIT(A) for consideration of two other issues raised before the ITAT. In the normal circumstances, we would have remitted the matter to the ITAT for reconsideration. Since the matter has been remitted to the CIT(A) with regard to two other issues, we deem it appropriate to remit this issue also to CIT(A) with liberty to the assessee to submit the documents which he claims to have produced before the ITAT. Hence, the following; ORDER (i) Appeal is allowed. Order dated 11.08.2017 in ITA No.754/Bang/2014 upholding the Assessing Officer's order so far as disallowing Rs.41,59,990/- is set-aside; 7 ITA No. 1032/2017 (ii) The matter is remitted to the CIT(A) with liberty to the assessee to produce documents; and (iii) CIT(A) shall reconsider the matter in accordance with law and pass appropriate orders. Since the matter is remanded, we have not answered the substantial questions of law raised in this appeal. No costs. Sd/- JUDGE Sd/- JUDGE AV List No.: 1 Sl No.: 31 "