Sri. Saibabu, Chikkanayakanahalli v. DCIT, Tumkur

ITA 938/BANG/2012 | 2005-2006
Pronouncement Date: 31-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 93821114 RSA 2012
Assessee PAN AYFPS5733N
Bench Bangalore
Appeal Number ITA 938/BANG/2012
Duration Of Justice 1 year(s) 3 month(s) 1 day(s)
Appellant Sri. Saibabu, Chikkanayakanahalli
Respondent DCIT, Tumkur
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 31-10-2013
Date Of Final Hearing 24-10-2013
Next Hearing Date 24-10-2013
Assessment Year 2005-2006
Appeal Filed On 30-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN JUDICIAL MEMBER AND SHRI JASON P. BOAZ ACCOUNTANT MEMBER ITA NO.938/BANG/2012 ASSESSMENT YEAR : 2005-06 SRI SAIBABU PROP. SRI ENTERPRISES NEAR ADI ANJANEYA TEMPLE JOGIHALLI ROAD C.N. HALLY. PAN : AYFPS 5733N VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1 TUMKUR. APPELLANT RESPONDENT APPELLANT BY : SHRI H. GURUSWAMY ITP RESPONDENT BY : SHRI BIJOY KUMAR PANDA ADDL. CIT(DR) DATE OF HEARING : 24.10.2013 DATE OF PRONOUNCEMENT : 31.10.2013 O R D E R PER N.V. VASUDEVAN JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 23.04.2012 OF THE CIT(APPEALS)-II BANGALORE RELATI NG TO ASSESSMENT YEAR 2005-06. ITA NO. 938/BANG/2012 PAGE 2 OF 9 2. THE GROUNDS RAISED BY THE ASSESSEE IN HIS APPEA L READS AS FOLLOWS:- 1. THE APPELLATE ORDER DATED 23-04-2012 IS OPPOSED TO LAW FACTS AND EVIDENCE OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-II BANGALORE HAS ERRED IN UP-HOLDING THE ADDITION OF R S. 12 50 000/- BEING THE ALLEGED INVESTMENT MADE IN THE PROPERTY F OR THE ASST YEAR 2005-06 AS AGAINST THE ASST YEAR 2002-03. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-II BANGALORE HAS ERRED IN HOLDING THAT THE DOCUMENTARY EVIDENCE PRODUCED BY THE APPELLANT WAS UNSUBSTANTIATED AND U NRELIABLE WITHOUT GETTING THE SAID DOCUMENTS VERIFIED FROM AN Y COMPETENT AUTHORITY. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-II BANGALORE HAS ERRED IN HOLDING THAT A SUM OF RS. 12 50 000/- WAS ASSESSABLE TO TAX FOR THE ASST YEAR 2005-06 BASED O N THE APPELLANTS STATEMENT RECORDED ON 04-02-2010 WHICH WAS RETRACTED FOR GOOD REASONS BASED ON THE DOCUMENTARY EVIDENCE WHICH WAS NEITHER APPRECIATED BY THE LEARNED AO NOR BY THE LEARNED CIT(A)-II BANGALORE. 5. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND AND DELETE ANY OF THE GROUNDS AT THE TIME OF HEARING. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING THE APPELLANT RESPECTFULLY PRAYS THAT Y OUR HONBLE AUTHORITY BE PLEASED TO SET ASIDE THE APPELLATE ORD ER DATED 23- 04-2012 PASSED BY THE LEARNED CIT(A)-II BANGALORE AND DELETE THE ADDITIONS OF RS. 12 50 000/- AND FURTHER BE PLE ASED TO PASS SUCH OTHER ORDERS GRANTING SUCH OTHER RELIEF THAT Y OUR HONBLE AUTHORITY MAY DEEM FIT IN THE INTEREST OF EQUITY AN D JUSTICE. 3. THE ASSESSEE HAS ALSO FILED AN APPLICATION FOR A DMITTING ADDITIONAL GROUNDS OF APPEAL. THE ADDITIONAL GROUNDS SOUGHT T O BE RAISED ARE AS UNDER:- ITA NO. 938/BANG/2012 PAGE 3 OF 9 1. THE LD. CIT(A)-II BANGALORE HAS ERRED IN CONFI RMING THE ADDITION OF RS. 12 50 000/- BEING THE ALLEGED INVES TMENT IN CONSTRUCTION OF A RESIDENTIAL HOUSE WITHOUT APPRECI ATING THE FACT THAT THE ADDITION WAS BASED ON A MERE STATEMENT REC ORD ON 04-02- 2010. 2. THE LD. CIT(A)-II BANGALORE HAS ERRED IN CONFI RMING THE ADDITION OF RS. 12 50 000/- BASED ON A STATEMENT RE CORDED U/S.131 OF THE ACT FROM THE APPELLANT BY ISSUE OF SUMMONS W ITHOUT APPRECIATING THE FACT THAT THE SUMMONS SO ISSUED U/ S. 131 OF THE ACT WERE UNLAWFUL IN THE ABSENCE OF ANY PENDING PRO CEEDINGS. 3. THE LD. CIT(A)-II BANGALORE OUGHT TO HAVE APPR ECIATED THE FACT THAT THE LD. AO WAS NOT HAVING ANY AUTHORI TY OF LAW TO ISSUE THE SUMMON FOR RECORDING THE STATEMENT FROM T HE APPELLANT WITHOUT THE PENDENCY OF ANY PROCEEDINGS BEFORE ISSU E OF SUMMONS. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING THE APPELLANT RESPECTFULLY PRAYS THAT TH E ADDITION OF RS. 12 50 000/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A)-II BANGALORE BE DELETED AND THE INCOME DECL ARED IN THE RETURN OF INCOME BE RESTORED IN THE INTEREST OF EQU ITY AND JUSTICE. 4. THE ASSESSEE IS AN INDIVIDUAL. HE IS A MINING C ONTRACTOR. THERE WAS A SURVEY CONDUCTED IN HIS BUSINESS PREMISES BY THE REVENUE ON 12.01.2010 U/S. 133A OF THE ACT. CONSEQUENT TO THE SURVEY THE ASSESSEE WAS SUMMONED ON 04.02.2010 BY THE AO AND THE ASSESS EES STATEMENT WAS RECORDED. IN THE STATEMENT SO RECORDED THE AS SESSEE SUBMITTED THAT HE HAD PURCHASED A PLOT MEASURING 60 X 27 FT. AT C. N. HALLY OPP. TO ADI ANJANEYA TEMPLE JOGIHALLI ROAD ON 27.07.2001. IN ANSWER TO ANOTHER QUESTION HE SUBMITTED THAT HE HAD PUT UP CONSTRUCT IONS OVER THE SITES PURCHASED DURING 2004 AT A COST OF RS.12 50 000. H E ALSO SUBMITTED THAT ITA NO. 938/BANG/2012 PAGE 4 OF 9 THE SOURCE FOR FUNDS FOR PUTTING UP CONSTRUCTION WA S OUT OF PERSONAL BORROWINGS FROM FAMILY FRIENDS AND RELATIVES. IT W AS SUBMITTED THAT THE ASSESSEE WAS NOT IN A POSITION TO GET CONFIRMATION FROM THEM AND THEREFORE WAS VOLUNTARILY OFFERING THE SUM OF RS.12 50 000 AS ADDITIONAL INCOME FOR THE A.Y. 2005-06. THE ASSESSING OFFICER ISSUED NOT ICE U/S. 148 OF THE ACT ON 20.05.2010 FOR THE A.Y. 2005-06. 5. IN THE RETURN FILED IN RESPONSE TO THE SAID NOTI CE THE ASSESSEE DID NOT DECLARE A SUM OF RS.12 50 000 AS OFFERED IN THE STATEMENT RECORDED ON 04.02.2010. WHEN THE AO CALLED UPON THE ASSESSEE T O EXPLAIN AS TO WHY THE AFORESAID SUM WAS NOT OFFERED TO TAX THE ASSES SEE TOOK A STAND THAT THE CONSTRUCTION OF THE HOUSE HAD BEEN COMPLETED IN THE YEAR 2002-03 AND THEREFORE NO INCOME WAS OFFERED IN THE A.Y. 2005-06 . IF AT ALL ANY INCOME IS TO BE BROUGHT TO TAX IT CAN BE DONE ONLY IN AY 02- 03 AS THE INVESTMENT IN CONSTRUCTION WAS MADE DURING THE PREVIOUS YEAR TO A Y 02-03 AND NOT IN AY 05-06. THE AO HELD THAT THE SUBMISSION MADE BY TH E ASSESSEE WAS NOT SUPPORTED BY ANY MATERIAL EVIDENCE AND THEREFORE TH E SAME WAS BEING REJECTED. THE AO ACCORDING PROCEEDED TO MAKE AN AD DITION OF RS.12 50 000 TO THE TOTAL INCOME OF THE ASSESSEE. 6. BEFORE THE CIT(APPEALS) THE ASSESSEE FILED EVID ENCE TO SHOW THAT THE CONSTRUCTION HAD BEEN CARRIED OUT BY HIM IN THE PERIOD 2002-03. A COPY OF THE BUILDING LICENCE DATED 31.01.02 GRANTED BY T HE C.N. HALLY TOWN MUNICIPAL OFFICE WAS FILED BEFORE THE CIT(A). A CO PY OF THE LETTER DATED ITA NO. 938/BANG/2012 PAGE 5 OF 9 16.05.02 OF THE CHIEF OFFICER TOWN MUNICIPALITY C .N. HALLY CONFIRMING THAT THERE ARE NO ARREARS OF TAX AND ELECTRICITY SUPPLY CAN BE GIVEN WAS ALSO FILED. FINALLY EXTRACT OF PROPERTY TAX REGISTER S HOWING THAT THE PROPERTY WAS ASSESSED TO TAX FOR THE PERIOD 2003-04 TO 2004-05 W AS ALSO FILED. APART FROM THE ABOVE A REPORT OF APPROVED VALUER WAS ALS O FILED. IN THIS REPORT THE VALUER HAD REPORTED THAT THERE ARE GROUND AND F IRST FLOORS MEASURING 800 SQ.FT. AND COST OF CONSTRUCTION OF THE GROUND FLOOR WAS ESTIMATED AT RS.6 86 320. THE REPORT IS FOR ESTIMATING THE COST OF GROUND FLOOR BUILDING FOR THE YEAR 2002. BASED ON THE AFORESAID EVIDENCE IT WAS SUBMITTED THAT THERE WAS NO INVESTMENT IN CONSTRUCTION DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06 AND THEREFORE ADDITION MADE BY THE AO SHOULD BE DELETED. 7. THE CIT(APPEALS) CALLED FOR A REMAND REPORT FROM THE AO ON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE TH E CIT(A). IN THE REMAND REPORT DATED 12.01.12 THE AO SUBMITTED THAT THE RE PORT OF THE REGISTERED VALUER GIVES COST OF CONSTRUCTION OF THE GROUND FLO OR AS ON 2002 AT RS.6 86 320. THE AO POINTED OUT THAT THERE WAS FIR ST AND SECOND FLOORS IN THE BUILDING ABOUT WHICH THE APPROVED VALUER HAS NO T GIVEN ANY COMMENTS. THE AO THEREFORE TOOK A STAND THAT THE INVESTMENT O F RS.12.5 LAKHS WAS FOR THE FIRST AND SECOND FLOORS AND THAT INVESTMENT HAD BEEN MADE DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06. THE AO ALS O SUBMITTED THAT HE HAD WRITTEN TO TOWN MUNICIPAL COUNCIL C.N. HALLY ABOUT THE YEAR OF CONSTRUCTION AND EXTENT OF AREA CONSTRUCTED BY THE ASSESSEE. IN RESPONSE THE ITA NO. 938/BANG/2012 PAGE 6 OF 9 MUNICIPAL COUNCIL HAD INFORMED THE AO THAT THEIR RE CORDS SHOW CONSTRUCTION OF GROUND FLOOR ONLY AND NOTHING REGARDING FIRST AN D SECOND FLOORS. 8. ON A CONSIDERATION OF THE ADDITIONAL EVIDENCE AN D THE REMAND REPORT OF THE AO THE CIT(APPEALS) HELD THAT THE ADDITIONA L EVIDENCE FILED BY THE ASSESSEE DID NOT CONCLUSIVELY ESTABLISH THAT THE CO NSTRUCTION OF FIRST AND SECOND FLOORS HAPPENED DURING THE PERIOD 2002-03. THE CIT(A) ALSO HELD THAT EVIDENCE FURNISHED BY THE ASSESSEE CANNOT BE R ELIED UPON. ACCORDING TO CIT(A) STATEMENT GIVEN AT THE TIME OF SURVEY CA NNOT BE RETRACTED IN THE ABSENCE OF ANY CONCRETE EVIDENCE. THE CIT(A) ALSO HELD AS FOLLOWS:- 3.6 IT IS ALSO SIGNIFICANT TO NOTE THAT THE APPEL LANTS CONDUCT IN GOING BACK ON HIS STATEMENT AND TRYING TO PROVE THA T THE CONSTRUCTION OF THE HOUSE WAS COMPLETED DURING 2002 -03 WAS ONLY TO AVOID THE REOPENING OF THE ASSESSMENT U/S 1 47 OF THE ACT AS THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 C OULD NOT BE REOPENED AT THAT TIME ON ACCOUNT OF LAPSE OF TIME. SIMILARLY THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT ONLY A SUM OF RS.6 50 000/- WAS INV ESTED IN THE CONSTRUCTION OF THE HOUSE INSTEAD OF HIS ORIGINAL S TATEMENT OF HAVING INVESTED RS.12 50 000/- EXCEPT THE VALUERS REPORT 9 YEARS LATER WHICH TALKS OF ONLY ONE FLOOR AND NOT GROUND FLOOR FIRST FLOOR AND PART OF THE SECOND FLOOR AS PER ACTUAL CO NSTRUCTION. IN VIEW OF THE DISCUSSIONS MADE ABOVE THE ACTION OF T HE AO IN BRINGING TO TAX THE SUM OF RS.12 50 000/- REPRESENT ING INVESTMENT IN THE CONSTRUCTION OF THE SAID HOUSE AS ADMITTED B Y THE APPELLANT WHILE RECORDING HIS STATEMENT ON 4/2/2010 IS UPHELD . 9. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. ITA NO. 938/BANG/2012 PAGE 7 OF 9 10. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSE L FOR THE ASSESSEE WHO REITERATED THE STAND OF THE ASSESSEE AS PUT FOR TH BEFORE THE CIT(A). THE LD. DR RELIED ON THE ORDER OF THE CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT T HE OUTSET WE DO NOT AGREE WITH THE CONCLUSIONS OF THE CIT(APPEALS) THAT EVIDENCE PRODUCED BY THE ASSESSEE WAS NOT CONCRETE. IN OUR VIEW THE BU ILDING LICENCE DATED 31.01.2002 AND THE CONFIRMATION LETTER BY THE TOWN MUNICIPALITY FOR GIVING ELECTRICITY SUPPLY CONNECTION IN ITS LETTER DATED 1 6.05.02 ARE CONCRETE EVIDENCE TO SHOW THAT A HOUSE WAS ALREADY IN EXISTE NCE PRIOR TO 16.05.02. BESIDES THE ABOVE THE PROPERTY TAX REGISTER ALSO S HOWS THAT THE PROPERTY TAX HAS BEEN ASSESSED FOR THE PERIOD 2003-04 AND 20 04-05. IN THE ABSENCE OF EXISTENCE OF A BUILT HOUSE WE DO NOT TH ING THAT ANY ASSESSMENT CAN BE MADE ON PROPERTY TAX. THE ABOVE EVIDENCE CO NCLUSIVELY SHOWS THAT THE CONSTRUCTION HAS BEEN PUT UP BY THE ASSESSEE PR IOR TO 2003-04. 12. HAVING COME TO THE ABOVE CONCLUSION WE NOW HAV E TO SEE AS TO WHAT WAS THE INVESTMENT MADE BY THE ASSESSEE PRIOR TO THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06. IN THIS REGARD WE FIND THAT THE APPROVED VALUER WHOSE REPORT WAS FILED BY THE ASSESSEE BEFORE THE C IT(A) CERTIFIES THAT THE COST OF GROUND FLOOR BUILDING IN THE YEAR 2002 INCU RRED BY THE ASSESSEE WAS RS.6 86 320 OR RS.6.86 LAKHS. THIS EVIDENCE SUGGES TS THAT IN THE YEAR 2002 THE ASSESSEE HAD CONSTRUCTED THE GROUND FLOOR MEASURING 800 SQ.FT. ITA NO. 938/BANG/2012 PAGE 8 OF 9 AT A COST OF RS.6.86 LAKHS. THE OTHER EVIDENCE FIL ED BY THE ASSESSEE IN THE FORM OF PROPERTY TAX REGISTER DOES NOT SHOW THE EXT ENT OF THE BUILT-UP AREA. IN THESE CIRCUMSTANCES IN OUR VIEW IT WOULD BE AP PROPRIATE TO CONSIDER THAT THE ASSESSEE HAD INVESTED A SUM OF RS.6.86 LAKHS DU RING THE PERIOD PRIOR TO THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06. THE ADDITION MADE BY THE AO TO THE EXTENT OF RS.6.86 LAKHS IN THE A.Y. 2005- 06 CANNOT THEREFORE BE SUSTAINED. IT IS ALSO NOT DISPUTED THAT THE TOTAL VALUE OF INVESTMENT IN THE CONSTRUCTION IN THE GROUND FIRST AND PORTION OF SE COND FLOOR IS NOT MORE THAN RS.12.5 LAKHS. 13. WITH REGARD TO THE DIFFERENCE BETWEEN RS.12.5 L AKHS AND RS.6.86 LAKHS WE DO NOT FIND ANY EVIDENCE FILED BY THE ASS ESSEE TO SHOW THAT COST OF CONSTRUCTION WAS NOT INCURRED DURING THE PREVIOU S YEAR RELEVANT TO A.Y. 2005-06. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT IT WOULD BE JUST AND FAIR TO RESTRICT THE ADDITION MADE BY THE AO AN D SUSTAINED BY THE CIT(A) TO RS.5.64 LAKHS I.E. THE DIFFERENCE BETWEEN RS.12 .5 LAKHS AND RS.6.86 LAKHS. WE ORDER ACCORDINGLY. 14. WE HAVE NOT GONE INTO THE ADDITIONAL GROUNDS AS WELL AS ADMISSIBILITY OF THE ADDITIONAL GROUNDS AS THE FACT S AND CIRCUMSTANCES OF THE PRESENT CASE DO NOT JUSTIFY CONSIDERING THE PLEA RA ISED IN THE ADDITIONAL GROUND. ITA NO. 938/BANG/2012 PAGE 9 OF 9 15. IN THE RESULT THE APPEAL BY THE ASSESSEE IS PARTLY ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF OCTOBER 2013. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE DATED THE 31 ST OCTOBER 2013. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.