Shri.Mohammed Rafi Sayed, Trivandrum v. The Asstt.Director of Incometax(Inv), Trivandrum

ITA 173/COCH/2013 | 2005-2006
Pronouncement Date: 25-10-2013 | Result: Dismissed

Appeal Details

RSA Number 17321914 RSA 2013
Assessee PAN AWJPM2926L
Bench Cochin
Appeal Number ITA 173/COCH/2013
Duration Of Justice 6 month(s) 20 day(s)
Appellant Shri.Mohammed Rafi Sayed, Trivandrum
Respondent The Asstt.Director of Incometax(Inv), Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-10-2013
Date Of Final Hearing 05-09-2013
Next Hearing Date 05-09-2013
Assessment Year 2005-2006
Appeal Filed On 05-04-2013
Judgment Text
1 ITA NO. 172 & 173/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 172 & 173/COCH/2013 (ASSESSMENT YEARS 2004-05 & 2005-06) SHRI MOHAMMED RAFI SAYED VS ADIT (INV) TRIVANDRU M RAFI MANZIL KADAKKAL MATHIRA P.O. PIN 691 536 PAN : AWJPM2926L (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. LATHA K RESPONDENT BY : SMT. S VIJAYAPRABHA DATE OF HEARING : 05-09-2013 DATE OF PRONOUNCEMENT : 25-10-2013 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE COMMON ORDER PASSED BY THE CIT(A)-III KOCHI DATED 03 RD JANUARY 2013 FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06. SINCE COMMON ISSUE ARISES FOR CONSIDERATION WE HEARD BOTH THE APPEALS TOGETHER A ND ARE DISPOSED OF BY THIS COMMON ORDER. 2. SMT. LATHA K THE LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.10 LAKHS FOR THE ASSESSMENT YEAR 2 ITA NO. 172 & 173/COCH/2013 2004-05 AND RS.37 57 500 TOWARDS UNEXPLAINED INVEST MENT IN LANDED PROPERTY. ACCORDING TO THE LD.COUNSEL THE ASSESSE E ENTERED INTO AN AGREEMENT FOR PURCHASE ON 10-03-2004. THE ASSESSEE PAID RS.10 LAKHS AS ADVANCE AMOUNT BY CASH CHEQUE AND THE VENDOR ENC ASHED THE CASH CHEQUE ON 11-03-2004. ACCORDING TO THE LD.COUNSEL THE AGREEMENT WAS ENTERED INTO IN THE LATE HOURS OF 10-03-2004. THER EFORE THE VENDOR COULD NOT WITHDRAW THE AMOUNT ON THE SAME DAY. HOWEVER HE WITHDREW THE AMOUNT ON 11-03-2004. ACCORDING TO THE LD.COUNSEL THE AMOUNT WITHDRAWN ON 11-03-2004 IS ONLY FOR THE PURPOSE OF MAKING ADVANCE TOWARDS SALE CONSIDERATION FOR PURCHASE OF PROPERTY AS PER THE AGREEMENT DATED 10-03-2004. THEREFORE ACCORDING TO THE LD.C OUNSEL THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF RS.1 0 LAKHS IS NOT JUSTIFIED. 3. SIMILARLY FOR THE ASSESSMENT YEAR 2005-06 THE ENTIRE AMOUNT OF RS.37 57 500 WAS PAID BY CASH CHEQUE. AN AMOUNT WA S WITHDRAWN FROM NRI ACCOUNT. THEREFORE ACCORDING TO THE LD.COUNSE L MERELY BECAUSE THE PURCHASE PRICE WAS PAID BY CASH CHEQUE THERE CANNO T BE ANY ADDITION. ON A QUERY FROM THE BENCH WHETHER THERE IS ANY REF ERENCE ABOUT THE PAYMENT MADE BY CASH CHEQUE IN THE AGREEMENT FOR PU RCHASE OF PROPERTY THE LD.COUNSEL SUBMITTED THAT SINCE THE PAYMENT WAS MADE BY CASH CHEQUE NO REFERENCE WAS MADE IN THE AGREEMENT AS TO THE CHEQUE NUMBER AND THE AMOUNT. 3 ITA NO. 172 & 173/COCH/2013 4. ON THE CONTRARY SMT. S VIJAYAPRABHA THE LD.DR SUBMITTED THAT AFTER VERIFYING THE WITHDRAWALS FROM THE ACCOUNT MAINTAIN ED BY THE ASSESSEE IN STATE BANK OF TRAVANCORE (SBT HEREINAFTER) PANGOD E BRANCH IT WAS FOUND THAT THE ASSESSEE HAD WITHDRAWN RS. 10 LAKHS ON 11- 03-2004 BY FOUR CHEQUES. REFERRING TO THE ASSESSMENT ORDER MORE P ARTICULARLY PAGE 2 PARAGRAPH 2 THE LD.DR SUBMITTED THAT THE PURPOSE F OR WHICH THE AMOUNT WAS WITHDRAWN IS CLEARLY STATED IN THE ASSESSMENT O RDER WITH REFERENCE TO THE WITHDRAWAL MADE BY THE ASSESSEE. THEREFORE TH E AMOUNT SAID TO BE PAID ON 10-03-2004 AS ADVANCE AMOUNT DOES NOT REFLE CT IN THE STATEMENT OF ACCOUNT MAINTAINED BY SBT PANGODE. ACCORDING T O THE LD.DR THE PURPOSE FOR WHICH THE WITHDRAWALS ARE MADE WAS CLEA RLY STATED WITH REGARD TO EACH WITHDRAWAL. ACCORDING TO THE LD.DR THOUGH THE ASSESSEE CLAIMS THAT THE ADVANCE AMOUNT OF RS.10 LAKHS WAS PAID FRO M NRI FUNDS NO MATERIAL WAS PRODUCED EITHER BEFORE THE ASSESSING O FFICER OR BEFORE THE CIT(A). THEREFORE IT IS OBVIOUS THAT THE ASSESSEE MADE ADVANCE OF R.10 LAKHS THROUGH UNEXPLAINED SOURCES. HENCE ACCORDIN G TO THE LD.DR THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION. 5. SIMILARLY FOR THE ASSESSMENT YEAR 2005-06 THE ASSESSEE PURCHASED LAND TO THE EXTENT OF 53.95 CENTS AT ATTIPARA AND A KKULAM BY MEANS OF REGISTERED DOCUMENTS ON 13-05-2004 AND 01-11-2004. THE ASSESSEE 4 ITA NO. 172 & 173/COCH/2013 CLAIMED BEFORE THE ASSESSING OFFICER THAT THE TOTAL VALUE OF THE LAND WAS RS.25 24 000 AND THE PURCHASE PRICE DISCLOSED IN TH E SALE DEED IS RS. 12 15 150 INCLUDING STAMP DUTY AND REGISTRATION CHA RGES. THE ASSESSEE COULD NOT FILE ANY BREAK UP DETAILS WITH REGARD TO THE INVESTMENT MADE AT ATTIPARA AND AKKULAM PROPERTY. AFTER VERIFYING THE STATEMENT OF ACCOUNTS IN THE ACCOUNTS MAINTAINED IN SBT PANGODE AND KUMMIL THE ASSESSING OFFICER FOUND THAT THE TOTAL EXPENSES INCURRED BY T HE ASSESSEE FOR PURCHASE OF LAND COMES TO RS.22 84 000. HOWEVER THE ASSESS EE HAS SHOWN THE PURCHASE PRICE AT RS.25 24 000. THE WITHDRAWAL OF AMOUNT FROM THE BANK DOES NOT SUBSTANTIATE THE SOURCE OF INVESTMENT IN T HE PROPERTY AT ATTIPARA AND AKKULAM. ACCORDING TO THE LD.DR THE ASSESSEE C LAIMS THAT RS.12 15 150 WAS PAID ON 01-04-2004 AND 13-05-2004. HOWEVER NO MATERIAL WAS FILED EITHER BEFORE THE ASSESSING OFFI CER OR BEFORE THE CIT(A) TO EXPLAIN THE SOURCE FOR MAKING THE ADVANCE. HENC E ACCORDING TO THE LD.REPRESENTATIVE THE AMOUNT OF RS.12 15 150 PAID BY THE ASSESSEE ON 01- 03-2004 AND 13-05-2004 WAS TREATED AS UNEXPLAINED I NVESTMENT. SIMILARLY THE ASSESSEE HAS ALSO MADE INVESTMENT IN LAND AT KADAKAMPILLY. THE ASSESSEE PAID RS.10 LAKHS ON 04-11-2004 TOWARDS SALE CONSIDERATION. ACCORDING TO THE LD.DR THE TOTAL AGREED SALE CONSI DERATION WAS RS.58 LAKHS. THE PAYMENT TO THE EXTENT OF RS.20 LAKHS WA S REFLECTED IN THE RECEIPT AND PAYMENTS ACCOUNT AS ON 31-03-2005. HOW EVER NO EXPLANATION WAS FURNISHED BY THE ASSESSEE WITH REGA RD TO THE SOURCE OF 5 ITA NO. 172 & 173/COCH/2013 INVESTMENT TO THE EXTENT OF RS.20 LAKHS. SINCE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.20 LAKHS AC CORDING TO THE LD.DR THE ASSESSING OFFICER MADE THE ADDITION OF RS.20 LA KHS. THE LD.DR FURTHER SUBMITTED THAT THE ASSESSEE HAS SHOWN RS.2 40 000 I N THE RECEIPT AND PAYMENTS ACCOUNT AS OPENING CASH BALANCE AS ON 01-0 4-2004. ACCORDING TO THE LD.DR FOR THE ASSESSMENT YEAR 2004-05 THE ASSESSEE CLAIMED TO HAVE PAID RS.10 LAKHS AS ADVANCE FOR PURCHASE OF ON E ACRE OF LAND AT KADAKAMPILLY ON 10-03-2004. THIS AMOUNT WAS ASSESS ED AS UNEXPLAINED INVESTMENT. FURTHER AN AMOUNT OF RS.1 55 000 BEIN G THE DEPOSIT MADE IN KUMMIL BRANCH OF SBT WAS ALSO ASSESSED AS UNEXPLAIN ED DEPOSIT. THEREFORE THE ASSESSEES CLAIM OF HAVING OPENING B ALANCE OF RS.2 40 000 IS NOT SUBSTANTIATED BY ANY MATERIAL. THEREFORE A CCORDING TO THE LD.DR THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION WHICH IS CONFIRMED BY THE CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE CLAIMS THAT AN AMOUNT OF RS.10 LAKHS WAS PAID AS ADVANCE AT THE TI ME OF AGREEMENT ON 10-03-2004. THE EXPLANATION OF THE ASSESSEE IS THA T THE AGREEMENT WAS ENTERED INTO WITH THE PARTIES IN THE LATE HOURS OF 10-03-2004 THEREFORE THE CASH CHEQUE PAID BY THE ASSESSEE COULD NOT BE ENCAS HED ON THE DATE OF AGREEMENT. IF THE AMOUNT WAS PAID BY CHEQUE THIS TRIBUNAL IS OF THE 6 ITA NO. 172 & 173/COCH/2013 CONSIDERED OPINION THAT THERE SHOULD BE A REFERENCE ABOUT THE PAYMENT IN THE AGREEMENT. ATLEAST THE ASSESSEE COULD HAVE GO T AN ENDORSEMENT IN THE AGREEMENT ABOUT THE PAYMENT OF RS.10 LAKHS BY C ASH CHEQUE. IN THE ABSENCE OF ANY REFERENCE IN THE AGREEMENT SAID TO B E ENTERED INTO BETWEEN THE PARTIES ON 10-03-2004 THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CLAIM OF THE ASSESSEE THAT THE AGR EEMENT WAS ENTERED INTO WITH THE PARTIES IN THE LATE HOURS OF 10-03-2004 AN D THEREFORE ADVANCE PAID BY CASH CHEQUE COULD NOT BE WITHDRAWN IS AN A FTERTHOUGHT. WITHOUT ANY REFERENCE IN THE AGREEMENT SAID TO BE ENTERED I NTO BY THE PARTIES THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CASH CHEQUE DRAWN ON 11-03- 2004 CANNOT BE TREATED AS PAYMENT MADE FOR ADVANCE AS REFERRED TO IN THE AGREEMENT. MOREOVER THE ASSESSING OFFICER HAS CLE ARLY DEMONSTRATED WITH REFERENCE TO THE WITHDRAWALS AND UTILISATION OF THE AMOUNT IN THE ASSESSMENT ORDER. WHEN THE ASSESSING OFFICER DEMON STRATED THE PURPOSE FOR WHICH THE AMOUNT WAS WITHDRAWN AND THERE WAS NO WITHDRAWAL FROM THE BANK TO THE EXTENT OF RS.10 LAKHS ON 10-03-2004 TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE WAS NO AMOUNT AVAILAB LE WITH THE ASSESSEE FOR MAKING THE ADVANCE AS REFERRED TO IN THE AGREEM ENT AND THE ADVANCE COULD HAVE BEEN MADE ONLY THROUGH UNEXPLAINED SOURC ES. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT( A) HAS RIGHTLY CONFIRMED THE ADDITION TO THE EXTENT OF RS.10 LAKHS. 7 ITA NO. 172 & 173/COCH/2013 7. NOW COMING TO THE APPEAL FOR ASSESSMENT YEAR 200 5-06 THE PAYMENT OF RS.12 15 150 SAID TO BE PAID AS ADVANCE IS NOT CO-RELATED WITH ANY SOURCE OF INCOME. THE ASSESSEE CLAIMED THE TOT AL EXPENSES FOR PURCHASE OF LAND AT RS.25 24 000. HOWEVER THE ASS ESSING OFFICER WORKED OUT THE TOTAL EXPENDITURE AT RS.22 84 000. IN THE ABSENCE OF ANY MATERIAL TO EXPLAIN THE SOURCE OF ADVANCE MADE BY THE ASSESS EE TO THE EXTENT OF RS.12 15 150 ON 01-11-2004 AND 13-05-2004 THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONF IRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 8. NOW COMING TO THE INVESTMENT MADE IN KADAKAMPILL Y PROPERTY IT IS NOT IN DISPUTE THAT THE AGREED SALE CONSIDERATION I S RS.58 LAKHS. IT IS ALSO NOT IN DISPUTE THAT THE PAYMENT SAID TO BE AGREED F OR THE LAND AS PER AGREEMENT ENTERED INTO WAS NOT REFLECTED IN THE CAS H BOOK. IF IT WAS PAID BY CASH CHEQUE AS CLAIMED BY THE LD.COUNSEL FOR THE ASSESSEE THEN SUCH PAYMENT SHOULD ALSO FIND PLACE IN THE CASH BOOK MAI NTAINED BY THE ASSESSEE. THE VERY FACT THAT THE CASH FLOW STATEME NT FILED BY THE ASSESSEE AS ON 31-03-2005 DOES NOT REFLECT THE PAYMENT OF RS .20 LAKHS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT( A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 8 ITA NO. 172 & 173/COCH/2013 9. SIMILARLY FOR OPENING CASH BALANCE THE ASSESSE E HAS NOT FILED ANY MATERIAL TO SUBSTANTIATE THE AVAILABILITY OF OPENIN G CASH BALANCE TO THE EXTENT OF RS.2 40 000. THE ASSESSING OFFICER MADE ADDITION OF RS.1 55 000 BEING THE DEPOSIT MADE IN KUMMIL BRANCH OF SBI; BUT THIS ADDITION IS NOT CHALLENGED BY THE ASSESSEE BEFORE THIS TRIBUNAL. I N THE ABSENCE OF ANY SOURCE OF INCOME THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THE OPENING CASH BALANCE CLAIM OF RS.2 40 000 WAS ALSO RIGHTLY ADDED TO THE TOTAL INCOME. THIS TRIBUNAL DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRME D. 10. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH OCTOBER 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 25 TH OCTOBER 2013 PK/- COPY TO: 1. SHRI MOHAMMED RFI SYED RAFI MANZIL KADAKKAL M ATHIRA PO PIN 691 536 2. THE ADIUT (INV) TRIVANDRUM 3. THE COMMISSIONER OF INCOME-TAX CENTRAL KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-III KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH