Subhas Sangramappa Rakshe, Bidar v. ITO, Bidar

ITA 633/BANG/2010 | 2005-2006
Pronouncement Date: 25-02-2011 | Result: Allowed

Appeal Details

RSA Number 63321114 RSA 2010
Bench Bangalore
Appeal Number ITA 633/BANG/2010
Duration Of Justice 9 month(s) 19 day(s)
Appellant Subhas Sangramappa Rakshe, Bidar
Respondent ITO, Bidar
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-02-2010
Date Of Final Hearing 21-02-2011
Next Hearing Date 21-02-2011
Assessment Year 2005-2006
Appeal Filed On 06-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE DR. O K NARAYANAN VICE PRESIDENT AND SHRI GEORGE GEORGE K. J.M. ITA NOS.632 & 633/BANG/2010 (ASST. YEARS 2004-05 & 2005-06) SUBHAS SANGRAMAPPA RAKSHE C/O VIJAYKUMAR GIRI BEHIND DISTRICT JAIL SARDAR VALLABHBHAI PATEL NAGAR BIDAR-585 401. - APPELLANT VS THE INCOME TAX OFFICER WARD-1 BIDAR. - RESPONDENT APPELLANT BY : SHRI H N KHINCHA C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL. C IT O R D E R PER GEORGE GEORGE K : THESE APPEALS PREFERRED BY THE ASSESSEE ARE DIRE CTED AGAINST TWO SEPARATE ORDERS OF CIT(A) HUBLI BOTH D ATED 25.02.2010. THE ASST. YEARS CONCERNED ARE 2004-05 AND 2005-06. 2. SINCE THESE APPEALS WERE HEARD TOGETHER AND PER TAIN TO THE SAME ASSESSEE THEY ARE DISPOSED OF BY THIS CON SOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. PAGE 2 OF 10 ITA NO.632 & 633/BANG/2010 2 ITA NO.632/BANG/2010 3. IN THIS APPEAL THE ASSESSEE HAS RAISED NINE GR OUNDS OF APPEAL. GROUND NOS.1 7 AND 9 ARE GENERAL IN NATUR E AND THEREFORE NO ADJUDICATION IS CALLED FOR. HENCE THE SAME ARE DISMISSED. 4. GROUND NO.8 RELATES TO LEVY OF INTEREST U/S 234 A AND 234B OF THE ACT. 4.1 LEVY OF INTEREST U/S 234A AND 234B ARE MANDATO RY AND CONSEQUENTIAL IN NATURE. THEREFORE THE SAME IS DI SMISSED. 5. GROUND NO.2 RELATES TO THE ISSUE OF VALIDITY OF NOTICE U/S 148 OF THE ACT. IT IS CLAIMED BY THE ASSESSEE THAT THE CONDITIONS PRECEDENT FOR THE ISSUANCE OF NOTICE U/S 148 IS ABS ENT AND HENCE THE NOTICE AND ALL CONSEQUENTIAL PROCEEDINGS ARE BAD IN LAW. 6. IN GROUND NO.3 THE ASSESSEE HAS CHALLENGED THE ASSESSMENT COMPLETED U/S 144 OF THE ACT. IT WAS SU BMITTED THAT THE EXPARTE ORDER IS IN VIOLATION OF PRINCIPLES OF NATU RAL JUSTICE AND WITHOUT COMPLYING WITH THE PROVISIONS OF LAW AND HE NCE THE SAME IS BAD IN LAW AND REQUIRES TO BE QUASHED. 7. IN GROUND NO.4 5 AND 6 THE ASSESSEE CHALLENGE S THE ADDITION OF A SUM OF RS.3 37 500/- U/S 69 OF THE AC T. 8. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- THE ASSESSEE IS AN INDIVIDUAL. HE WAS NOT ASSES SED TO INCOME TAX. BASED ON THE INFORMATION THAT THE ASSE SSEE HAD PAGE 3 OF 10 ITA NO.632 & 633/BANG/2010 3 PURCHASED LAND FOR A CONSIDERATION OF RS.3 37 000/- DURING THE FINANCIAL YEAR RELEVANT TO THE ASST. YEAR NOTICE U /S 148 WAS ISSUED ON 10/5/2007. THERE WAS NO RESPONSE TO THE NOTICE U/S 148. NOTICE U/S 142(1) WAS SERVED ON THE ASSESSEE AND IN RESPON SE TO THE SAME THE ASSESSEE VIDE LETTER DATED 12/10/2007 SUBMITT ED THAT HE DID NOT HAVE ANY SOURCE OF INCOME OTHER THAN AGRICULTURAL I NCOME AND THEREFORE DID NOT FILE ANY RETURN OF INCOME FOR TH E CONCERNED ASST. YEAR. 8.1 THE SUBSEQUENT LETTERS OF THE A.O. COULD NOT B E SERVED ON THE ASSESSEE. THEREFORE SUMMONS WAS ISSUED U/S 131 OF THE ACT. SINCE THERE WAS NO COMPLIANCE TO THE SUMMONS ISSUED AN INSPECTOR WAS DEPUTED TO THE RESIDENCE OF THE ASSESSEE WHERE HE WAS RESIDING AS A TENANT. THE LANDLORD OF THE PREMISES STATED T HAT THE ASSESSEE HAD VACATED THE HOUSE AND HAD GONE TO HIS NATIVE PL ACE. THE AO ISSUED SEVERAL NOTICES THROUGH RPAD ON THE ADDRESS THAT WAS FURNISHED BY THE LANDLORD. SINCE THERE WAS NO REPL Y TO THESE NOTICES ASSESSMENT U/S 144 RWS 147 OF THE ACT WAS COMPLETED VIDE ORDER DATED 11/12/2008. 8.2 THE AO MADE AN ADDITION OF RS.3 37 500/- BEING THE INVESTMENT IN LAND U/S 69 OF THE ACT. THE AO ALSO ADDED AN AMOUNT OF RS.60 000/- ON ACCOUNT OF ESTIMATED HOUSEHOLD EX PENSES. 9. THE ASSESSEE BEING AGGRIEVED FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. PAGE 4 OF 10 ITA NO.632 & 633/BANG/2010 4 10. BEFORE THE FIRST APPELLATE AUTHORITY THE ASSE SSEE FILED WRITTEN SUBMISSION ON 15/5/2009 AND ALSO FURNISHED THE FOLLOWING DETAILS:- 1. COPIES OF PAHANI PARTRIKA (8) IN PROOF OF LAND HOLDING IN ASSESSEES NAME AND OTHER MEMBERS OF HIS FAMILY. 2. DETAILS OF LEASE AGREEMENT COPIES. 3. COPY OF SALE DEED IN RESPECT OF LAND PURCHASED BY THE ASESSEE. 11. THE CIT(A) FOR HIS DETAILED REASONING IN PARA 5 OF HIS IMPUGNED ORDER DISMISSED THE APPEAL OF THE ASSESSE E IN RESPECT TO THE ADDITION OF RS.3 37 500/- MADE BY THE AO ON ACC OUNT OF UNEXPLAINED INVESTMENT ON LAND. HOWEVER THE ADDIT ION OF RS.60 000/- ON ACCOUNT OF ESTIMATED HOUSEHOLD EXPEN SES WAS DELETED BY THE CIT(A). THE CIT(A) HELD THAT THE AG RICULTURAL INCOME GENERATED FROM 4.86 ACRES OF LAND WAS SUFFIC IENT ONLY TO MEET THE HOUSEHOLD EXPENSES. HE CONCLUDED THAT THE ASSESSEE DOES NOT HAVE THE SOURCE TO MAKE INVESTMENT OF RS.3 37 5 00/-. THE CIT(A) NOTED THAT THE ASSESSEE HAD NOT FILED THE RE TURN OF INCOME AND HAS NOT COMPLIED WITH THE STATUTORY NOTICES IS SUED BY THE AO. EVEN FOR LAND TAKEN ON LEASE THE DETAILS OF CROP C ULTIVATED THEREIN AND THE EXPENDITURE INCURRED ARE NOT PROVIDED. FO R THESE REASONS THE CIT(A) CONFIRMED THE ADDITION OF RS.3 37 500/-. 12. THE ASSESSEE BEING AGGRIEVED IS IN APPEAL BE FORE US. 13. IT WAS SUBMITTED BY THE LEARNED AR THAT THE AS SESSEE IS HAVING NO OTHER SOURCE OF INCOME EXCEPT AGRICULTURA L INCOME. IT PAGE 5 OF 10 ITA NO.632 & 633/BANG/2010 5 WAS STATED THAT THE ASSESSEE APART FROM ENJOYING T HE AGRICULTURAL INCOME OF HIS OWN LAND WAS ALSO CULTIVATING AND HA VING THE INCOME OF THE AGRICULTURAL LAND BELONG TO OTHER FAMILY MEM BERS. IT WAS SUBMITTED THAT THE LAND BELONGING TO OTHERS WAS ALS O TAKEN ON LEASE AND THE LEASE AGREEMENT COPIES WERE FURNISHED TO TH E FIRST APPELLATE AUTHORITY. THEREFORE IT WAS CONTENDED THAT THE AS SESSEE WAS HAVING SUFFICIENT AGRICULTURAL INCOME FROM HIS OWN LAND AN D AS WELL AS LAND TAKEN ON LEASE FOR MAKING NECESSARY INVESTMENT OF R S.3 37 500/-. HENCE IT WAS PRAYED THAT THE ADDITION U/S 69 OF TH E ACT IS NOT WARRANTED AND THE SAME IS TO BE DELETED. 14. THE LEARNED DR ON THE OTHER HAND SUPPORTED T HE IMPUGNED ORDERS OF THE INCOME TAX AUTHORITIES. 15. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS CONTENDED THA T HE AND HIS FAMILY MEMBERS HOLD 30 ACRES OF ANCESTRAL AGRICULTU RAL LAND AT VILLAGE ISLAMPUR AND BACKCHAWADI. IT WAS ALSO SUBM ITTED THAT IN ADDITION TO THE OWN LAND THE LAND OF OTHERS WERE A LSO TAKEN ON LEASE. THUS IT WAS CONTENDED THAT THE INVESTMENT WA S MADE OUT OF PAST SAVINGS FROM AGRICULTURAL ACTIVITIES. THE CIT (A) IN HIS IMPUGNED ORDER HAS ADMITTED THAT THE ASSESSEE HOLDS ABOUT 4.86 ACRES OF LAND. IT IS AN ADMITTED FACT THAT THE ASS ESSEE IS AN AGRICULTURIST. THE DEPARTMENT HAS NOT BEEN ABLE T O PROVE THAT THE ASSESSEE HAS ANY OTHER SOURCE OF INCOME FOR MAKING THE INVESTMENT OF RS.3 37 500/-. PAGE 6 OF 10 ITA NO.632 & 633/BANG/2010 6 15.1 THE ASSESSEE DID NOT COOPERATE WITH THE DEPA RTMENT AND HAD NOT COMPLIED WITH THE STATUTORY NOTICES WH ICH HAD RESULTED IN A BEST JUDGEMENT ASSESSMENT. HOWEVER BEFORE THE FIRST APPELLATE AUTHORITY CERTAIN DOCUMENTS WITH REGARD TO THE LAN D HOLDINGS AS WELL AS THE LAND THAT WAS TAKEN ON LEASE WERE PROVI DED. THE ASSESSEE ALSO HAD FURNISHED THE LEASE AGREEMENTS TH AT WERE ENTERED WITH FOR OBTAINING LEASEHOLD RIGHTS. AS A LAST CHA NCE IN THE INTEREST OF JUSTICE THIS MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE AO SO THAT PROPER EXAMINATION IN THE MATTER CAN BE MAD E. THE ASSESSEE SHALL PROVIDE ALL THE DETAILS CALLED FOR AND FURNIS H THE DETAILS OF AGRICULTURAL INCOME THAT HE RECEIVED DURING THE YEA RS TO EXPLAIN THE SOURCE OF INVESTMENT IN THE AGRICULTURAL LAND AMOUN TING TO RS.3 37 500/-. THE ASSESSEE SHALL COOPERATE WITH T HE AO FOR A PROPER FRAMING OF THE ASSESSMENT ORDER. 15.2 SINCE THE ISSUE ON MERITS IS REMITTED BACK T HE OTHER ISSUES SUCH AS THE VALIDITY OF REOPENING U/S 148 A ND COMPLETION OF ASSESSMENT U/S 144 OF THE ACT IS NOT ADJUDICATED. 16. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ITA NO.633/BANG/2010 17. IN THIS APPEAL THE ASSESSEE HAS RAISED EIGHT GROUNDS OF APPEAL. GROUND NOS.1 AND 8 ARE GENERAL IN NATURE A ND THEREFORE NO ADJUDICATION IS CALLED FOR. HENCE THE SAME ARE DI SMISSED. PAGE 7 OF 10 ITA NO.632 & 633/BANG/2010 7 18. GROUND NO.7 RELATES TO LEVY OF INTEREST U/S 23 4 A AND 234B OF THE ACT. 18.1 LEVY OF INTEREST U/S 234A AND 234B ARE MANDAT ORY AND CONSEQUENTIAL IN NATURE. THEREFORE THE SAME IS DI SMISSED. 19. IN GROUND NO.2 THE ASSESSEE CHALLENGES THE IS SUANCE OF NOTICE U/S 148 OF THE ACT ON THE GROUND THAT CONDIT IONS PRECEDENT FOR THE ISSUANCE OF NOTICE U/S 148 IS ABSENT AND HE NCE THE NOTICE AND ALL CONSEQUENTIAL PROCEEDINGS ARE BAD IN LAW. 20. IN GROUND NO.3 THE ASSESSEE HAS CHALLENGED TH E ORDER PASSED U/S 144 OF THE ACT SINCE ACCORDING TO HIM; T HE EXPARTE ORDER PASSED IS IN VIOLATION OF PRINCIPLES OF NATURAL JUS TICE AND WITHOUT COMPLYING WITH THE PROVISIONS OF LAW. 21. GROUND NOS.4 5 AND 6 RELATE TO THE ISSUE OF A DDITION OF RS.10 44 000/- BEING THE SALE VALUE OF LAND AS INCO ME OF THE ASSESSEE. 22. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- IN THE CONCERNED ASSESSMENT YEAR IT WAS NOTICED THAT THE ASSESSEE HAD SOLD CERTAIN PLOTS OF LAND FOR A C ONSIDERATION OF RS.10 44 000/-. THE SAID LAND WAS PURCHASED IN THE PREVIOUS YEAR RELEVANT TO ASST. YEAR 2004-05 FOR A CONSIDERATION OF RS.3 37 500/-. THERE WAS NO RETURN FILED FOR THE ASST. YEAR 2005-0 6. NOTICES U/S 148 AND 142(1) WERE ISSUED ON SEVERAL OCCASIONS. T HE AO ISSUED A SHOW-CAUSE NOTICE AND PROPOSED TO CHARGE THE SALE C ONSIDERATION OF PAGE 8 OF 10 ITA NO.632 & 633/BANG/2010 8 RS.10 44 000/- AS SHORT TERM CAPITAL GAINS. IN RES PONSE TO SHOW- CAUSE NOTICE THE ASSESSEE APPEARED ON 26.11.2008 A ND FILED WRITTEN SUBMISSION. 22.1 IT WAS SUBMITTED THAT THE MATTER PERTAINING TO THE PURCHASE OF 0.27 ACRES OF LAND AT VILLAGE ALLIABAD HAS ENTERED INTO DISPUTE AND THE MATTER IS PENDING BEFORE CIVIL COUR T BIDAR AND REQUESTED THE AO TO KEEP THE PROCEEDINGS IN ABEYANC E TILL THE DECISION OF THE COURT. THE ASSESSEE HAS ALSO FILED A COPY OF THE STAY ORDER PASSED BY THE PRINCIPAL CIVIL JUDGE BIDAR IN HIS FAVOUR. THE AO HOWEVER NOTICED THAT THERE IS NO DISPUTE THAT TH E ASSESSEE HAD INDEED SOLD A PORTION OF LAND TO 4 DIFFERENT PERSON S FOR A TOTAL SUM OF RS.10 44 000/- DURING THE RELEVANT FINANCIAL YEA R AND HAS RECEIVED THE TOTAL AMOUNT OF SALE CONSIDERATION. TH E AO FURTHER NOTICED THAT THE CIVIL COURT HAS DIRECTED A STAY ON THE PURCHASERS NOT TO DIG AND FIX THE STONES ETC. AND HAS NOT PAS SED ANY ORDER NULLIFYING THE SALE DEEDS AND THUS THE COURT HAS O NLY RESTRAINED THE PURCHASER FROM USING THE LAND TILL FURTHER ORDERS. ACCORDINGLY THE AO COMPLETED THE ASSESSMENT BY BRINGING THE AMOUNT OF RS.10 44 000/- TO TAX UNDER STCG. 23. AGGRIEVED BY THE ORDER OF ASSESSMENT IN BRINGI NG TO TAX THE ENTIRE SALE CONSIDERATION OF RS.10 44 000/- AS SHORT TERM CAPITAL GAINS THE ASSESSEE CHALLENGED IN APPEAL BE FORE THE FIRST APPELLATE AUTHORITY. PAGE 9 OF 10 ITA NO.632 & 633/BANG/2010 9 24. THE CIT(A) AFFIRMED THE VIEW OF THE AO. HE HE LD THAT THE ENTIRE SALE CONSIDERATION OF RS.10 44 000/- IS TO BE CHARGED TO SHORT TERM CAPITAL GAINS HOWEVER HE DIRECTED THE AO TO ALLOW PROPORTIONATE DEDUCTION OF COST OF ACQUISITION OF T HE LAND PURCHASED OUT OF WHICH 4 PLOTS ARE SOLD. 25. THE ASSESSEE BEING AGGRIEVED IS IN APPEAL BE FORE US. 26. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. FOR THE IMMEDIATELY PRECEDING ASST. YEAR THE BEST JUDGEMENT ASSESSMENT COMPLETED U/S 144 OF THE ACT WAS REMITTED BACK TO THE AO FOR DENOVO CONSIDERATION. IN THIS CASE THE ASSESSEE HAS STATED THAT THE SALE EFFECTED BY HIM W AS STAYED BY THE CIVIL COURT. IT IS NOT CLEAR ABOUT THE FINALITY OF THE ORDER PASSED BY THE PRINCIPAL CIVIL JUDGE BIDAR. THE ASSESSMENT IN THIS YEAR WAS COMPLETED U/S 144 OF THE ACT AS THE ASSESSMENT WAS GETTING TIME BARRED. IN THE INTEREST OF JUSTICE FOR THIS A.Y. SINCE THE ASSESSMENT HAS BEEN COMPLETED ON BEST JUDGEMENT BASIS AND ALSO COUPLED WITH THE FACT THAT THERE IS NO CLARITY WITH REGARD TO FI NALITY OF THE STAY ORDER PASSED BY PRINCIPAL CIVIL JUDGE BIDAR THE M ATTER NEEDS TO BE RESTORED TO THE AO FOR FRESH CONSIDERATION. NEEDL ESS TO SAY THE ASSESSEE SHALL BE AT LIBERTY TO FURNISH ALL MATERIA L IN SUPPORT OF HIS CASE AND SHALL COOPERATE WITH THE AO FOR EXPEDITIOU S FINALIZATION OF ASSESSMENT. PAGE 10 OF 10 ITA NO.632 & 633/BANG/2010 10 27. IN THE RESULT THE APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED ON FRIDAY THE 25 TH DAY OF FEBRUARY 2011 AT BANGALORE. SD/- SD/- (DR. O K NARAYANAN) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER COPY TO : (1) THE ASSESSEE (2) THE REVENUE (3) THE CIT(A) CONCERNED. (4) THE CIT CONCERNED. (5) THE DR (6) GUARD FILE. MSP/23.2 BY ORDER ASST. REGISTRAR ITAT BANGALORE.