Shri Bankimbhai D.Patel , Anand v. The Income tax Officer,Ward-1,, Anand

ITA 906/AHD/2018 | 2003-2004
Pronouncement Date: 19-05-2021 | Result: Allowed

Appeal Details

RSA Number 90620514 RSA 2018
Assessee PAN ADUPP5276G
Bench Ahmedabad
Appeal Number ITA 906/AHD/2018
Duration Of Justice 3 year(s) 1 month(s) 7 day(s)
Appellant Shri Bankimbhai D.Patel , Anand
Respondent The Income tax Officer,Ward-1,, Anand
Appeal Type Income Tax Appeal
Pronouncement Date 19-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 19-05-2021
Last Hearing Date 31-12-2020
First Hearing Date 18-01-2021
Assessment Year 2003-2004
Appeal Filed On 11-04-2018
Judgment Text
A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT) BEFORE SHRI RAJPAL YADAV VICE-PRESIDENT AND SHRI AMARJIT SINH ACCOUNTANT MEMBER ITA NO.906 AND 907/AHD/2018 / ASSTT.YEAR : 2003-2004 AND 2004-05 BANKIMBHAI D. PATEL PROP. VIRAL CONSTRUCTION 49 KRISHNA HOUSING SOCIETY STATION ROAD ANAND. PAN : ADUPP 5276 G VS. ITO WARD - 1 ANAND. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI MUKUND BAKSHI AR REVENUE BY : SHRI S.S. SHUKLA SR.DR / DATE OF HEARING : 23/03/2021 / DATE OF PRONOUNCEMENT: 19/05/2021 !'/ O R D E R PER RAJPAL YADAV VICE-PRESIDENT: PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST COMMON ORDER OF THE LD.CIT(A)-4 BARODA DAT ED 17.12.2015 PASSED FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 . 2. IN BOTH THE ASSESSMENT YEARS THE ASSESSEE HAS T AKEN THREE GROUNDS OF APPEALS WHICH ARE VERBATIM SAME EXCEPT V ARIATION IN THE QUANTUM. IN BRIEF THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.29 39 52 4/- AND RS.50 45 333/- IN THE ASSTT.YEAR 2003-04 AND 2004-0 5 RESPECTIVELY ON ITA NO.906 AND 907/AHD/2018 2 THE GROUND THAT THE ASSESSEE HAS RECEIVED THE ABOVE AMOUNT AS ON- MONEY ON SALE OF LAND. 3. THE FACTS ON ALL VITAL POINTS ARE VERBATIM SAME MORE SO THE DISCUSSIONS IN BOTH THE ASSESSMENT ORDERS ARE ALSO IDENTICAL. THEREFORE FOR THE FACILITY OF REFERENCE WE TAKE THE FACTS FR OM THE ASSTT.YEAR 2003-04. 4. BRIEF FACTS OF THE CASE ARE THAT IN BOTH THE ASS ESSMENT YEARS ORIGINALLY THE ASSESSMENT ORDERS WERE PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT 1961 O N 28.12.2007 WHEREBY THE INCOME OF THE ASSESSEE WAS DETERMINED A T RS.29 86 640/- AND RS.50 93 470/- AS AGAINST RETURNED INCOME OF RS .47 120/- AND RS.48 140/- IN THE ASSTT.YEARS 2003-04 AND 2004-05 RESPECTIVELY. A SURVEY UNDER SECTION 133A WAS CONDUCTED AT THE PREM ISES OF M/S.VASTU CONSTRUCTION & M/S.VIRAL CONSTRUCTION ON 23.9.2003. BOTH THESE CONCERNS ARE PROPRIETOR-SHIP OF THE ASSESSEE. IN VASTU CONSTRUCTION 23 RESIDENTIAL HOUSES IN DIFFERENT AR EAS UNDER NAME AND STYLE OF MARUTI PRAVESH-II WERE CONSTRUCTED. IN BRIEF THE CASE OF THE AO IS THAT THE ASSESSEE WAS THE POWER OF ATTORNEY H OLDER ON CERTAIN PIECES OF LAND ON WHICH CONSTRUCTION WAS MADE AND THESE WERE SOLD. HE HAS RECEIVED ON-MONEY AND THAT THE ON-MONEY HAS NOT BEEN ACCOUNTED FOR BY THE ASSESSEE. THE LD.AO HAS MADE REFERENCE TO THE STATEMENT OF SHRI RASIKBHAI C. PATEL WHICH WAS RECO RDED ON 20.1.2006. ACCORDING TO THE AO HE CONFESSED THAT HE HAD PAID RS.8 71 695/- BUT THE DOCUMENTS WERE EXECUTED FOR A SUM OF RS.1 32 500/- ON THE BASIS OF THIS STATEMENT THE L D.AO HARBOURED A BELIEF THAT DIFFERENCE OF THIS AMOUNT AMOUNTING TO RS.7 39 195/- WAS ITA NO.906 AND 907/AHD/2018 3 COLLECTED BY WAY OF ON-MONEY. HE APPLIED THIS RATE TO ALL THE PLOTS SOLD DURING THE YEAR AND TREATED THAT THE ASSESSEE HAS RETAINED ON- MONEY WHICH DESERVES TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. SIMILAR EXERCISE HAS BEEN MADE IN THE ASSTT.YEAR 20 04-05. 6. DISPUTE TRAVELLED TO THE TRIBUNAL WHICH WAS AGI TATED IN ITA NO.1291-1292/AHD/2009 401-402/AHD/2009 & 1260-1261 /AHD/2012. THE TRIBUNAL HAS RECORDED THE FOLLOWING FINDING AND REMITTED THE ISSUE BACK TO THE FILE OF AO. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIE S BELOW. WE FIND THAT THIS ADDITION WAS CONFIRMED BY LD. CIT(A) ON THIS B ASIS THAT THE MATTER IS PENDING FINALIZATION AT THE ASSESSMENT STAGE ITSELF IN THE CASE OF LAND OWNERS. THIS ADDITION IN THE HANDS OF THE PRESENT A SSESSEE IS CONFIRMED ON A PROTECTIVE BASIS AS PER ORDER OF LD. CIT(A) DA TED 14-12-2007. HENCE WE FEEL THAT BY NOW THE ISSUE FIRST HAVE BE EN FINALIZED IN THE HANDS OF THE LAND OWNERS BUT THE SAME IS NOT MADE A VAILABLE BEFORE US. HENCE IN THE FACTS OF THE PRESENT CASE WE FEEL THA T THE MATTER SHOULD GO BACK TO THE FILE OF AO FOR FRESH DECISION AND HENCE WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE M ATTER BACK TO THE FILE OF AO FOR FRESH DECISION. THE AO SHOULD FIND OUT AS TO WHAT ARRANGEMENT WAS BETWEEN THE LAND OWNERS AND THE POWER OF ATTORN EY HOLDER AND WHO HAS RECEIVED THE SALE CONSIDERATION AND WHETHER THE RECIPIENT OF SALE CONSIDERATION HAS OFFERED CAPITAL GAINS AND AFTER E XAMINING ALL THESE ASPECTS AND AFTER ALSO FINDING OUT AS TO WHAT HAPPE NED IN THE HANDS OF LAND OWNERS THE AO SHOULD DECIDE THE ISSUE AFRESH AND PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. GROUND NO.1 IS ALLOWED FOR STATISTICA L PURPOSES. 7. IN THE VERY ASSESSMENT PROCEEDINGS THE LD.AO HA S MADE REFERENCE TO THE EVIDENCE COLLECTED IN THE FIRST RO UND OF ASSESSMENT PROCEEDINGS AND THEREAFTER ISSUED A SHOW CAUSE NOT ICE TO THE ASSESSEE. THE REPLY OF THE ASSESSEE ALONG WITH FINDING OF THE AO IN THE ASSTT.YEAR 2003-04 READS AS UNDER: 5. ACCORDINGLY VIDE NOTICE U/S. 142(1} R.W.S. 254 OF THE INCOME TAX ACT 1961 DTD. 01.10.2013 THE ASSESSEE WAS REQUESTED TO EXPLAIN AS TO WHY THE ADDITION OF RS. 29 86 644/- ON ACCOUNT OF UNACCOUN TED/UNRECORDED ON- ITA NO.906 AND 907/AHD/2018 4 MONEY RECEIPT IN RESPECT OF LAND SHOULD NOT BE ADD ED IN ASSESEE'S HANDS. THE ASSESSEE WAS ALSO REQUESTED TO BRING ALL SUPPOR TING MATERIAL/EVIDENCES WITH REGARD TO WHAT ARRANGEMENT WAS MADE BETWEEN TH E LAND OWNERS AND THE POWER OF ATTORNEY HOLDERS WHO ARE THE RECIPIEN T OF SALE CONSIDERATION AND WHETHER THE RECIPIENT HAS OFFERED CAPITAL GAIN ON SUCH SALE CONSIDERATION OR NOT. 6. IN RESPONSE TO THE SAID NOTICE SHRI PANKAJ MORD ANI CA FROM K.G. PATE! & CO. CHARTERED ACCOUNTANTS ATTENDED AND MADE WRITTE N SUBMISSIONS. SOME OF THE MAIN/RELEVANT CONTENTIONS ARE REPRODUCED AS UNDER; 'YOUR ASSESSEE WAS A PA HOLDER OF THE LAND HOLDERS AND THERE WAS HAVING NO DIRECT OR INDIRECT BENEFIT TO HIM - ALL T HE OWNERS OF THE LAND HAS BEEN IDENTIFIED AND FROM THE WORKING OF THE CAP ITAL GAINS IT REVEALS THAT THERE IS NO TAX LIABILITIES TO 12 NOS. OF LAND HOLDERS. YOUR HONOUR CAN VERY WELL VERIFY THAT SHRI BANKIMBH AI D. PATEL WAS ONLY ACTED AS POA OF ALL THE CO-OWNERS OF THE LAND AND THE SALE CONSIDERATION WERE RECEIVED BY THE OWNER OF THE LAN D. AIL THE LAND OWNERS HAVE BEEN IDENTIFIED AND FROM T HE WORKING OF THE CAPITAL GAINS IT REVEALS THAT THERE IS NO TAX LIAB ILITY TO 12 NOS. OF LAND HOLDERS. IN THE CASE OF MR. BANKIN D. PATEL ADDITION HAS BE EN MADE INSPITE OF THE FACT ALL 12 CO-OWNERS HAS FULLY EXPLAINED THAT THE CONVEYING DEED HAS BEEN OKEYED AND THERE IS NO QUESTION OF MAKING ADDITION ON PROTECTIVE BASIS.' 7. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF TH E ASSESSEE. IN THIS REGARD IT IS TO STATE THAT THE FACTS EMERGED FROM THE ASSESSEE'S SUBMISSIONS ARE THAT THE 12 CO-OWNERS BEING LAND HOLDERS HAVE N OT FILED ITS RETURN OF INCOME FOR A.Y. 2003-04 AS THERE IS NO TAX LIABILI TIES FROM THE WORKING OF THE CAPITAL GAIN IN THEIR RESPECTIVE HANDS ON ACCOUNT O F LAND VALUE AS PER AGREEMENT RECEIVED BY THEM. HERE IT IS PERTINENT TO MENTION THAT THE HON. ITAT HAS NOT DISPUTED THE RECEIPT OF 'ON MONEY' AMO UNTING TO RS. 36 74 405/~ IN RESPECT OF THE PROJECT MARUTI PRAVES H~LL DURING THE F.Y. 2002- 03 RELEVANT TO A.Y. 2003-04. FURTHER THE LAND OWNE RS ALSO HAVE NOT ADMITTED ON ''MONEY RECEIPT' BY THEM. IN THESE CIRC UMSTANCES THE LIABILITY FOR TAX ON ACCOUNT OF LI ON MONEY' 1 RECEIPT CANNOT BE SHIFTED TO THEIR HANDS FROM ASSESSEE'S HAND AT THIS STAGE ESPECIALLY BECAUSE TH E 12 CO-OWNER HAVE NOT FILED THEIR RETURN OF INCOME FOR A.Y. 2003-04. HENC E THE ADDITION OF RS.29 86 644/- ON ACCOUNT OF UNRECORDED AND UNDISCL OSED INCOME ON ACCOUNT OF 'ON MONEY' RECEIPT IS MADE IN THE HANDS OF THE ASSESSES ON SUBSTANTIVE BASIS AS WAS DIRECTED BY THE LD.CIT(A) . PENALTY PROCEEDINGS U/S. 271(1)(C) IS SEPARATELY INITIATED FOR CONCEALING THE PARTICUL ARS OF INCOME. 8. SUBJECT TO ABOVE REMARKS AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORDS THE TOTAL INCOME OF THE ASSESSEE FOR A.Y 2003-04 IS COMPUTED AS UNDER: TOTAL INCOME AS PER RETURN OF INCOME : RS. 47 120 ITA NO.906 AND 907/AHD/2018 5 ADD: ADDITION ON ACCOUNT OF UNRECORDED AND UNDISCLOSED INCOME AS DISCUSSED ABOVE ; RS. 29 39 524 TOTAL INCOME : RS. 29 86 644 ROUNDED OFF TO : RS. 29 86 640 8. FINDINGS IN THE ASSTT.YEAR 2004-05 ARE ALSO IDEN TICAL. ON THE STRENGTH OF THE ABOVE REASONING THE LD.AO HAS MADE ADDITION WHICH STANDS CONFIRMED AT THE END OF THE LD.CIT(A). 9. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES W E HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE FIN DING OF THE LD.REVENUE AUTHORITIES BELOW WOULD REVEAL THAT BOTH THE AUTHORITIES HAVE FAILED TO ANALYTICALLY EXAMINE THE ISSUE AS PE R THE DIRECTION OF THE ITAT IN THE FIRST ROUND. FROM THE VERY BEGINNING THE STAND OF THE ASSESSEE IS THAT HE WAS A POWER OF ATTORNEY HOLDER OF THE LAND-OWNERS. WHATEVER ACT HAS BEEN DONE THEY WERE DONE IN THE C APACITY AS REPRESENTATIVE OF THE ORIGINAL OWNER. IF CHEQUE AM OUNT IS BEING TAKEN BY THE OWNER THEN IT IS TO BE ASSUMED THAT ON-MONE Y IS ALSO TO BE TAKEN BY THE OWNERS UNLESS THERE IS EVIDENCE TO PR OVE OTHERWISE. FACED WITH THIS SITUATION IN THE FIRST ROUND THE TRIBUNAL HAS SPECIFICALLY DIRECTED THE AO TO EXAMINE UNDERSTANDI NG BETWEEN THE LAND-OWNERS AND THE ASSESSEE; WHETHER IT HAS BEEN A GREED UPON THAT LAND-OWNERS WOULD ONLY RECEIVE THE AMOUNT MENTIONED IN THE SALE DEED. THE AO HAS NOT RECORDED STATEMENT OF ANY OF THE LAND OWNERS. HE WAS GIVEN ALL THE DETAILS. HE HAS RECORDED THE STATEMENT OF ONE OF THE PURCHASERS IN THE FIRST ROUND; BUT THAT IS NOT A RELEVANT EVIDENCE; THAT EVIDENCE CAN BE TAKEN FOR THE DETERMINATION OF QUANTUM BUT WHO HAS RECEIVED THAT QUANTUM THAT EVIDENCE CANNOT BE USED. A PERUSAL OF THE ASSESSMENT ORDER WOULD INDICATE THAT THE LD.AO BEHAVED IN A VERY ILLOGICAL MANNER BY OBSERVING THAT IF THE LAND OWNE RS ARE NOT PAID THE ITA NO.906 AND 907/AHD/2018 6 CAPITAL GAIN ON-MONEY THEN THE ASSESSEE SHOULD PAY . THE LAW CONTEMPLATES THAT THE AO HAS TO FIRST DETERMINE IN WHOSE HAND INCOME HAS TO BE ASSESSED; WHO ARE THE RIGHTFUL OWNER. TH E ASSESSEE BEING A POWER OF ATTORNEY HOLDER CANNOT BE TREATED AS RIGH TFUL OWNER OF THE INCOME WHICH HAS ARISEN ON SALE OF A PARTICULAR PR OPERTY. HIS ACTION WAS ONLY IN THE REPRESENTATIVE CAPACITY. WE COULD APPRECIATE THE STAND OF THE AO IF HE WAS ABLE TO BRING ON RECORD THE TER MS OF AGREEMENT BETWEEN THE ASSESSEE AS WELL AS LAND OWNERS SPECIFY ING THE DISTRIBUTION OF AMOUNT BETWEEN THE ASSESSEE IN THE CAPACITY AS POWER ATTORNEY HOLDER VIS--VIS THE ACTUAL OWNER. NO SUC H STEPS WERE TAKEN BY THE AO; MORE SO WHEN SPECIFICALLY DIRECTED BY TH E TRIBUNAL IN THE FIRST ROUND OF LITIGATION. TAKING INTO CONSIDERATI ON ALL THESE ASPECTS WE ARE OF THE VIEW THAT THERE IS NO JUSTIFICATION F OR SUSTAINING ADDITION IN BOTH THE ASSESSMENT YEARS IN THE HANDS OF THE AS SESSEE. THEREFORE WE ALLOW BOTH THE APPEALS AND DELETE IMPUGNED ADDIT ION OF RS.29 39 524/- FOR THE ASSTT.YEAR 2003-04 AND RS.5 0 45 333/- FOR THE ASSTT.YEAR 2004-05. 10. IN THE RESULT BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 19 TH MAY 2021 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 19/05/2021