ITO, Wd 2(2), Nashik, v. Patil Developers,

ITA 1537/PUN/2008 | 2004-2005
Pronouncement Date: 10-12-2010 | Result: Dismissed

Appeal Details

RSA Number 153724514 RSA 2008
Assessee PAN AAFFP6356B
Bench Pune
Appeal Number ITA 1537/PUN/2008
Duration Of Justice 2 year(s) 12 day(s)
Appellant ITO, Wd 2(2), Nashik,
Respondent Patil Developers,
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 10-12-2010
Date Of Final Hearing 06-12-2010
Next Hearing Date 06-12-2010
Assessment Year 2004-2005
Appeal Filed On 28-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 1537/PN/2008: A.Y. 2004-05 I.T.O. WARD 2(2) NASIK APPELLANT VS. PATIL DEVELOPERS S.NO. 138 SHIVAJINAGAR GANGAPUR DIST. NASIK PAN AAFFP 6356 B RESPONDENT APPELLANT BY: SHRI PANKAJ GARG RESPONDENT BY: SHRI SUNIL GANOO ORDER PER SHAIALENDRA KUMAR YADAV JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT (A)-II NASIK DATED 29-8-2008 FOR A.Y. 2004-05 ON THE POINT THAT THE CIT(A) HAS ERRED IN A LLOWING THE DEDUCTION U/S 80-IB(10) OF THE ACT. 2. THE ASSESSEE WAS ENGAGED IN LAND DEVELOPMENT AND BUILDING CONSTRUCTION. FOR THE YEAR UNDER CONSIDER ATION THE ASSESSEE CLAIMED DEDUCTION U/S 80-IB(10) OF THE ACT AMONG OTHER THINGS BUT DID NOT ENCLOSE THE PRESCRIB ED AUDIT REPORT IN FORM NO. 10CB ALONG WITH THE RETURN OF INCOME. THE ASSESSMENT WAS COMPLETED U/S 144 READ W ITH PAGE 2 OF 7 ITA NO. 1537/PN/2008 PATIL DEVELOPERS A.Y. 2004-05 SECTION 147 OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 16 25 552/- DENYING THE DEDUCTION U/S 80-IB(10) OF HE ACT AND MAKING THE ADDITION OF RS. 14 43 503/- TO THE T OTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDITS. NOT BEING SATISFIED WITH THE ADDITIONS SO MADE BY THE A SSESSING OFFICER THE MATTER WAS CARRIED IN APPEAL BEFORE TH E FIRST APPELLATE AUTHORITY. WITH REGARDS TO DEDUCTION U/S 80- IB(10) OF THE ACT THE CIT(A) OBSERVED THAT RELEVANT DETAILS WERE FURNISHED BEFORE HIM AT THE APPELLATE STAGE AN D THAT THE ASSESSING OFFICER HAD NO OBJECTION IN HIS REMAN D REPORT AS FAR AS MERITS IS CONCERNED WHEN SUCH DETAILS FOR WARDED TO THE ASSESSING OFFICER. 3. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFI CER TO ALLOW THE DEDUCTION U/S 80-IB(10) OF THE ACT PARTI CULARLY IN VIEW OF THE FACT THOUGH SUCH DETAILS WERE NOT FU RNISHED BEFORE THE ASSESSING OFFICER BUT THE SAME WERE FUR NISHED BEFORE THE CIT(A) IN APPELLATE PROCEEDINGS. THE CI T(A) FORWARDED SUCH DETAILS TO THE ASSESSING OFFICER AND IN THE ABSENCE OF ANY ADVERSE FINDING RECORDED BY THE ASSE SSING OFFICER IN HIS REMAND WITH REGARDS TO THE DETAILS F ILED BY THE ASSESSEE FOR CLAIMING THE DEDUCTION U/S 80-IB(1 0) THE PAGE 3 OF 7 ITA NO. 1537/PN/2008 PATIL DEVELOPERS A.Y. 2004-05 CI(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFI CER TO ALLOW THE DEDUCTION U/S 80-IB(10) OF THE ACT AS CLA IMED BY THE ASSESSEE IN ITS RETURN OF INCOME. THIS VIEW IS FORTIFIED BY THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CONTIMETERS ELECTRICAL (P) LTD. (2009) 178 TAXMAN 422 (DELHI) AS WELL AS THE DECISION OF INDORE BENCH OF THE TRIBUNAL IN THE CASE OF M.P. RAJYA VAN VIKAS NIGAM VS. DY. CIT (1997) 60 ITD 39 (INDORE). WE ACCORDINGLY UPHO LD THE ORDER OF THE CIT(A) AND REJECT THE GROUND TAKEN BY THE REVENUE IN THIS REGARD. 4. WITH REGARDS TO ADDITION U/S 68 OF THE ACT MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 7 53 928/- THE RELEVANT FACTS ARE THAT THE ASSESSEE SHOWED THE FOLLOWING CR EDITS IN THE CAPITAL ACCOUNT OF THE PARTNERS. (A) GIFT RECEIVED FROM SAMPAT M. MEGDE RS. 3 76 297/- (CAPITAL ACCOUNT OF DINKAR PATIL) (B) GIFT RECEIVED FROM PRAKASH M. MEGDE RS. 3 77 631/- (CAPITAL ACCOUNT OF VISHNU PATIL) 5. BEFORE THE CIT(A) THE STAND OF THE ASSESSEE WAS THAT SHRI SAMPAT AND SHRI PRAKASH WERE THE LAND OWNERS A ND ERSTWHILE PARTNERS AND THE SAID AMOUNTS WERE PAYABL E TO THEM. IT WAS ALSO STATED THAT THE ACCOUNTANT OF TH E FIRM TRANSFERRED THESE AMOUNTS TO THE CAPITAL ACCOUNTS O F THE PAGE 4 OF 7 ITA NO. 1537/PN/2008 PATIL DEVELOPERS A.Y. 2004-05 EXISTING PARTNERS AS GIFTS UNDER A WRONG IMPRESSION . IT WAS THEREFORE CLAIMED THAT THESE AMOUNTS WERE ACTUALLY TRANSFERRED FROM THE ACCOUNTS OF THE RESPECTIVE PER SONS TO THE CAPITAL ACCOUNTS OF THE PARTNERS. IT WAS ALSO THE STAND OF THE ASSESSEE THAT THE ASSESSING OFFICER WRONGLY ASSESSED THE CREDITS U/S 68 OF THE ACT. THE CIT(A) HOWEVER DELETED THE SAME AND DIRECTED THE ASSESSING OFFICER TO ALLO W THE RELIEF ACCORDINGLY. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A). IT IS EVIDENT THAT THE ASSESS EE FILED COMPLETE DETAILS IN RESPECT OF THE CREDITS IN THE C APITAL ACCOUNTS OF THE PARTNERS ALONG WITH THE SUPPORTING EVIDENCE AND EXTRACT OF THE ACCOUNT COPIES APPEARIN G IN THE BOOKS AND THE SAME WERE CORROBORATED WITH THE ASSES SING OFFICER. HOWEVER THE A.O IN HIS REMAND REPORT WAS SILENT ON THE DETAILS SO FILED BY THE ASSESSEE AND SIMPLY TRIED TO JUSTIFY THE ACTION TAKEN AT THE TIME OF RE-ASSESSME NT. THE CIT(A) HAS GONE THROUGH THE DETAILS AND THE ACCOUNT EXTRACTS FILED BY THE ASSESSEE AND RIGHTLY OBSERVED THAT THE CREDITS IN THE CAPITAL ACCOUNT OF THE PARTNERS ARE TRANSFER ENTRIES FROM CAPITAL AND CURRENT ACCOUNT BALANCES O F THE EX-PARTNERS BROUGHT FORWARD FROM EARLIER YEARS BAL ANCES AS PAGE 5 OF 7 ITA NO. 1537/PN/2008 PATIL DEVELOPERS A.Y. 2004-05 AT 31-3-2003 AND THE SAME STAND FULLY EXPLAINED. IN THIS VIEW OF THE MATTER THERE WAS NO JUSTIFICATION FOR MAKING ANY ADDITION U/S 68 OF THE ACT AND THE CIT(A) WAS J USTIFIED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE SA ME. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) AND REJE CT THE GROUND TAKEN BY THE REVENUE. 7. WITH REGARDS TO GROUND NO. 3 PERTAINING TO EXPEN SES AGAINST AGRICULTURAL INCOME SALE PATTIES EXPENSES VOUCHERS MODE OF PAYMENTS TO THE FIRM OUT OF SUCH AGRICULTURAL INCOME ETC. IN ABSENCE OF SUPPORTING DOCUMENTS/DETAILS THE ASSESSING OFFICER MADE AN ADD ITION OF RS. 6 89 575/-. ON APPEAL THE CIT(A) OBSERVED T HAT THE LOWEST ESTIMATE OF AGRICULTURAL INCOME IS RS. 5 84 500/- AND THE MAXIMUM IS RS. 11 10 000/-. ONE OF THE PAR TNERS OF ASSESSEE FIRM SHRI DINKAR PATIL SHOWED AN AMOUNT OF RS. 6 89 575/- AS AGRICULTURAL INCOME REGARDING THE CRE DIT IN HIS CAPITAL ACCOUNT. THEREFORE THE CIT(A) WAS OF THE OPINION THAT A MINIMUM AMOUNT OF RS. 5 84 500/- COU LD BE REASONABLY ESTIMATED AS OUT OF AGRICULTURAL INCOME TOWARDS THE CREDIT OF RS. 6 89 575/- IN THE CAPITAL ACCOUNT OF PARTNER SHRI DINKAR PATIL IN VIEW OF THE WORKINGS/D ETAILS FILED. IN THIS VIEW OF THE MATTER THE CIT(A) DIRE CTED THE PAGE 6 OF 7 ITA NO. 1537/PN/2008 PATIL DEVELOPERS A.Y. 2004-05 ASSESSING OFFICER TO RESTRICT THE ADDITION TO THE A MOUNT OF RS. 1 05 075/- (RS. 6 89 575/-S. 5 84 500/-. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD WE ARE OF THE OPINION THAT THER E IS NO INFIRMITY IN THE ORDER OF THE CIT(A). THE ASSESSEE FILED 7/12 EXTRACTS OF THE AGRICULTURAL LAND GIVING VARIOUS DE TAILS WHICH WAS NOT DOUBTED BY THE ASSESSING OFFICER DURI NG THE ASSESSMENT PROCEEDINGS. WHILE GIVING PARTIAL RELIEF TO THE ASSESSEE THE CIT(A) TOOK INTO CONSIDERATION VARIOU S DETAILS SUCH AS AREA OF LAND CROPS GROWN MINIMUM ESTIMATE D INCOME AND MAXIMUM ESTIMATED INCOME AND FINALLY CONCLUDED THAT MINIMUM AMOUNT OF RS. 5 84 500/- CO ULD BE REASONABLY ESTIMATED AS OUT OF AGRICULTURAL INCO ME TOWARDS THE CREDIT OF RS. 6 89 575/- IN THE CAPITAL ACCOUNT OF PARTNER SHRI DINKAR PATIL. UNDER THESE CIRCUMST ANCES WE UPHOLD THE ORDER OF THE CI(A) AND REJECT THE GRO UND RAISED BY THE REVENUE. 9. WITH REGARDS TO GROUND NO. 4 PERTAINING TO TAX E FFECT INVOLVED IN THE PRESENT APPEAL THE LEARNED DR DID NOT PRESS THIS GROUND AT THE TIME OF HEARING OF THIS AP PEAL. HENCE THIS GROUND STANDS DISMISSED AS NOT PRESSED. PAGE 7 OF 7 ITA NO. 1537/PN/2008 PATIL DEVELOPERS A.Y. 2004-05 10. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER 2010. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 10 TH DECEMBER 2010 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- II NASIK 4. THE CIT- II NASIK 5. THE D.R B BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE