ITO, Bulandshahr v. Smt. Arun Prabha,, Bulandshahr

ITA 3562/DEL/2009 | 2005-2006
Pronouncement Date: 23-07-2010 | Result: Dismissed

Appeal Details

RSA Number 356220114 RSA 2009
Assessee PAN AEVPP1548M
Bench Delhi
Appeal Number ITA 3562/DEL/2009
Duration Of Justice 11 month(s) 9 day(s)
Appellant ITO, Bulandshahr
Respondent Smt. Arun Prabha,, Bulandshahr
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-07-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2005-2006
Appeal Filed On 13-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER ITA NO.3562/DEL/2009 ASSESSMENT YEAR : 2005-06 ITO WARD 1 BULANDSHAHR. VS. ARUN PRABHA D/O K.C. GUPTA 896 CIVIL LINES CHAND PUR ROAD BULANDSHAHR PAN : AEVPP1548M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.D. YADAV ADVOCATE REVENUE BY : SHRI AMRENDRA KUMAR SR. DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 8 TH JUNE 2009 FOR ASSESSMENT YEAR 2005-06. GROUNDS O F APPEAL READ AS UNDER:- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 24 32 500/- MADE ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS WITHOUT APPRECIATING THE FACT THAT IDENTITY GENUINENESS AND CREDIT WORT HINESS OF THE CREDITORS (LOANS) REMAINED UNPROVED? 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.24 32 500/- MADE ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS WITHOUT APP RECIATING THE FACT THAT IN THE REMAND REPORT DATED 21.04.08 THE A SSESSING OFFICER HAD STRONGLY JUSTIFIED THE ADDITION? 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (APPEALS) HAS ERRED IN DELETING THE INTEREST OF RS. 37 500/- MADE ON ACCOUNT OF UNRECORDED TRANSACTIONS WITHOUT APPRECIA TING THE FACT THAT INTEREST OF RS.37 500/- WAS NOT RECORDED IN TH E BOOKS OF ACCOUNT? ITA NO.3562/DEL/2009 2 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (APPEALS) HAS ERRED IN HOLDING THAT LONG TERM CAPIT AL GAIN BE CALCULATED ON TRANSFER WITHOUT GIVING ANY FINDING OR CONCLUDING ON THE DATE OF ACQUISITION OF PROPERTY WHICH IS VITAL FOR CONSIDERING THE NATURE OF GAINS I.E. LONG TERM OR SHORT TERM? 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET AS IDE AND THAT OF THE A.O. RESTORED. 2. GROUND NO.1 2 AND 3 ARE RAISING COMMON ISSUE WH EREBY A SUM OF RS.24 32 500/- WAS ADDED TO THE INCOME OF THE ASSES SEE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AND FURTHER A SUM OF RS. 37 500/- WAS DISALLOWED ON ACCOUNT OF INTEREST PAID ON THOSE UNEXPLAINED LOANS . THE DETAILS OF CASH CREDITS ARE AS UNDER:- M/S UMESH CONSTRUCTION RS.21 17 500/- (FIRM OF ASSESSEES HUSBAND ELDER BROTHER) SMT. MUNNI GARG RS.1 20 000/- SMT. SANGEETA GARG RS.95 000/- SH. ARUN KUMAR GOEL RS.1 00 000/- 3. IT IS SEEN THAT CONSIDERING THE REMAND REPORT SU BMITTED BY THE ASSESSING OFFICER LD. CIT (A) HAS DELETED THIS ADDITION. FO R THE SAKE OF CONVENIENCE THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE REMAND REPORT ARE AS UNDER:- GROUND NO.2 ADDITION ON A/C OF UNSECURED LOANS. UNDER PROCEEDINGS U/S 250 (4) OF THE IT ACT 1961 TH E ASSESSEE WAS REQUIRED TO SUBMIT CONFIRMATION OF UNSECURED LOANS EVIDENCE TO PROVE GENUINENESS CREDIT WORTHINESS OF CREDITORS COPY OF ACCOUNTS AND ASSESSMENT PARTICULARS OF CREDITORS. IN COMPLI ANCE OF ABOVE NOTICE THE COUNSEL OF THE ASSESSEE SUBMITTED THE CO PY OF ACCOUNT WITH CONFIRMATION COPY OF BANK STATEMENT THROUGH W HICH WITHDRAWAL WERE MADE TO DEPOSIT UNSECURED LOANS AND ACKNOWLEDG E SLIP INCOME TAX RETURN. ON PERUSAL OF DETAILS FILED REG ARDING UNSECURED LOANS IN ALL CASES THE GENUINENESS & CRE DIT WORTHINESS OF UNSECURED LOANS OF RS.2432500/- HAS BEEN PROVED AND THE INTEREST AMOUNT OF RS.37 500/- PAID TO CREDITOR SHR I UMESH CHAND GOEL SEEMS TO BE GENUINE. 4. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND WE FOUND THAT THE ASSESSING OFFICER HIMSELF HAS SUBMITTED TO THE CIT (A) THAT THE CREDIT AS WELL AS ITA NO.3562/DEL/2009 3 INTEREST PAID THEREON IS GENUINE. THEREFORE WE FI ND NO INFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHICH SUCH ADDITIONS HAVE BEEN DE LETED. 5. WHEN THE ASSESSING OFFICER HIMSELF IS ACCEPTING THE CREDITS AS WELL AS INTEREST PAID THEREON AS GENUINE THERE WAS NO OCCA SION FOR THE DEPARTMENT TO FURTHER COME INTO APPEAL AND THESE GROUNDS UNDER TH E FACTS OF THIS CASE HAVE BEEN FRIVOLOUSLY TAKEN BY THE REVENUE. THESE GROUN DS ARE DISMISSED. 6. NOW COMING TO GROUND NO.4 THIS GROUND HAS BEEN ALLOWED BY THE CIT (A) ON THE BASIS THAT NO SUCH ADDITION WAS MADE IN THE YEAR UNDER CONSIDERATION AS THE ASSESSING OFFICER HIMSELF HAD OBSERVED THAT THE CAPITAL GAIN OF RS.64 61 705/- SHALL BE TAXED IN THE YEAR IN WHICH TRANSFER SHALL TAKE PLACE. IT WILL BE RELEVANT TO REPRODUCE THOSE OBSERVATIONS OF THE ASSESSING OFFICER FROM THE ASSESSMENT ORDER:- IN THE VARIOUS JUDICIAL PRONOUNCEMENTS IT IS HELD THAT IF ANY TRANSACTION WHICH INVOLVES THE SKILLS LABOUR AND S ERIES OF TRANSACTION IS NOTHING BUT THE ADVENTURE IN THE NAT URE OF TRADE. IN THE INSTANT CASE RESIDENTIAL PLOT WAS PURCHASED IN THE FINANCIAL YEAR 1996-97 AND WAS CAPITAL ASSET. ON 11.11.2003 WHEN MAP WAS SUBMITTED WITH GDA TO CONSTRUCT THE FLATS ON PLOT THIS MOVEMENT PLOT WAS CONVERTED INTO STOCK IN TRADE AS PER PROVI SIONS OF SECTION 45 (2) OF THE IT ACT. ON THE DATE OF CONVERSION FA IR MARKET VALUE SHALL BE THE VALUE FOR THE PURPOSE OF CAPITAL GAIN. NO DETAILS OF FMV/CIRCLE RATE WAS PROVIDED BY ASSESSEE HENCE VA LUE OF THE LAND AS ON THE DATE OF CONVERSION IS TAKEN AT RS.15 000/- PER SQ. MTRS I.E. RS.73 32 000/-/-. INDEXED COST OF CAPIT AL ASSET IS RS.8 70 295/-. SO CAPITAL GAIN OF RS.64 61 705/- S HALL BE TAXED IN THE YEAR IN WHICH TRANSFER SHALL TAKEN PLACE. FURTHER A FACT IS ALSO TO BE BROUGHT ON RECORD THAT IN PROPERTY TRANSACTION INVOLVEMENT OF BLACK MONEY CANNOT BE RU LED OUT. AS IS HELD IN VARIOUS SEARCH AND SEIZURE ACTION AND LATER ON PROVED IN APPELLATE PROCEEDINGS. IF ASSESSEE TRANSFERRED THI S PLOT DIRECTLY AS IT IS WITHOUT MAKING ANY CONSTRUCTION THEREON AND B LACK MONEY IS ALSO IGNORED THAN ASSESSEE WOULD HAVE BEEN EARNED A PROFIT OF RS.67 79 000/- (RS.73 32 000-5 53 000/-) WHILE AFT ER INVESTMENT ASSESSEE IS DISCLOSING ONLY PROFIT OF RS.9 82 611/- AS PER VALUATION REPORT (WHICH IS NOT CONSIDERED AND MADE FOR THE CA PITAL GAIN ITA NO.3562/DEL/2009 4 PURPOSE) WHICH ALSO PROVES THAT ASSESSEE IS NOT DI SCLOSING THE CORRECT FIGURE OF INVESTMENT. IN VIEW OF ABOVE IT IS CLEAR THAT ASSESSEE TRANSFER RED HER CAPITAL ASSET INTO STOCK IN TRADE TO RUN A BUSINESS VENTURE JOINTLY WITH CO-OWNER AND INVESTED THE MONEY THEREON. CORR ECT FIGURE OF CONSTRUCTION WAS NOT PROVIDED SO REFERENCE U/S 142 A WAS MADE TO DVO. AFTER GETTING REPORT FROM DVO CONSEQUENTIAL M EASURE SHALL BE TAKEN. FMV AS ON DATE OF CONVERSION IS TAKEN A T RS.73 32 000/- AS DISCUSSED ABOVE AND DIFFERENCE OF RS.64 61 705/- (50% SHARE OF ASSESSEE IS RS.32 30 853/-) SHALL BE TAXED IN TH E YEAR IN WHICH ACTUALLY TRANSFER WILL TAKE PLACE . LAND WAS NOT SHOWN IN THE BALANCE SHEET IT IS ALSO TO BE VERIFIED FROM TH E RELEVANT RECORD AND CONSEQUENTIAL ACTION SHALL BE TAKEN IN THE RELE VANT YEAR IF PERMISSIBLE UNDER THE ACT. 7. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. T HERE IS NO IMPACT OF THE ISSUE IN THE YEAR UNDER CONSIDERATION AS DATE OF AC QUISITION IN THE CASE OF UNSOLD PROPERTY HAS NO RELEVANCE IN THE YEAR UNDER CONSIDE RATION AS THE SAID QUESTION CAN BE DETERMINED IN THE YEAR WHEN THE PROPERTY WIL L BE SOLD AND IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT ANY IMPACT THERE OF SHALL BE DURING THE YEAR UNDER CONSIDERATION. THEREFORE FOR THE PRESENT YE AR THE ISSUE RAISED BY THE REVENUE HAS NO FINANCIAL IMPLICATION. THUS THIS G ROUND HAS RIGHTLY BEEN DISMISSED BY THE CIT (A) AND WE DECLINE TO INTERFER E. 4. IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMIS SED IN THE MANNER AFORESAID. . THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.07.20 10. SD/- SD/- [K.D. RANJAN] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 23.07.2010. DK ITA NO.3562/DEL/2009 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES