Mr. N. Govindaraju, Bangalore v. ITO, Bangalore

ITA 970/BANG/2009 | misc
Pronouncement Date: 26-04-2010 | Result: Dismissed

Appeal Details

RSA Number 97021114 RSA 2009
Bench Bangalore
Appeal Number ITA 970/BANG/2009
Duration Of Justice 6 month(s) 7 day(s)
Appellant Mr. N. Govindaraju, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 26-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 26-04-2010
Date Of Final Hearing 30-03-2010
Next Hearing Date 30-03-2010
Assessment Year misc
Appeal Filed On 19-10-2009
Judgment Text
ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 1 IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE DR. O. K. NARAYANAN VICE PRESIDENT AND SHRI. GEORGE GEORGE K JUDICIAL MEMBER 1-4. I.T.A.NOS.475 476 477 478/BANG/2008 (ASSESSMENT YEARS : 2002-03 2003-04 2004-05 2006-07) ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE -1(2) BANGALORE .. APPELLANT V. SHRI. RAMAKRISHNA GUPTA PARTNER M/S. ARYA BHAVAN GANDHI BAZAAR BASAVANAGUDI BANGALORE .. RESPONDE NT 5-7. CROSS OBJECTION NOS.24 25 26/BANG/2009 (I.T.A.NOS.475 476 477/BANG/2009) (ASSESSMENT YEARS : 2002-03 2003-04 2 004-05) (BY THE ASSESSEE ) 8-9. I.T.A. NOS.673 & 258/BANG/2009 (ASSESSMENT YEARS : 2005-06 & 2006-07) (BY THE ASS ESSEE) ASSESSEE BY : SHRI. V. SRINIVASAN CHARTERED ACCOUN TANT REVENUE BY : SHRI. JASON P. BOAZ COMMISSIONER OF I NCOME-TAX O R D E R PER DR. O. K. NARAYANAN VICE PRESIDENT : THIS IS A BUNCH OF SIX APPEALS AND THREE CROSS OBJ ECTIONS FILED BY THE REVENUE AND THE ASSESSEE. THE RELEVANT ASSESSM ENT YEARS ARE 2002- 03 2003-04 2004-05 2005-06 AND 2006-07. THE AP PEALS AND CROSS OBJECTIONS ARE DIRECTED AGAINST THE COMMON AND CONS OLIDATED ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) VI AT BANGALORE ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 2 DATED.23.2.2009. THEY ARISE OUT OF THE ASSESSMENTS COMPLETED U/S.143(3) R.W.S.153A AS A CONSEQUENCE OF SEARCH OPERATIONS C ARRIED OUT AGAINST THE ASSESSEE. 2. REVENUE HAS FILED FOUR APPEALS IN ITA NOS.475 TO 478/BANG/2009 FOR THE FOUR ASSESSMENT YEARS 2003-04 2003-04 200 4-05 AND 2006-07. THE ASSESSEE ON HIS PART HAS FILED CROSS OBJECTION NOS.24 25 AND 26/BANG/2009 FOR THE ASSESSMENT YEARS 2002-03 200 3-04 AND 2004-05 AND HAS FILED APPEAL IN ITA NO.258/BANG/2009 FOR TH E ASSESSMENT YEAR 2006-07. THE APPEAL IN ITA NO.673/BANG/2009 IS THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 FOR WHICH THERE IS NO APPEAL OR CROSS OBJECTION BY THE REVENUE. 3. THE FACTS AND CIRCUMSTANCES SURROUNDING ALL THES E APPEALS ARE THE SAME AS THEY FLOW OUT OF THE SEARCH CARRIED OUT U/S .132 OF THE IT ACT 1961. THE DISPUTES MAINLY CENTER AROUND ADDITIONS SUSTAINED U/S.68 OF THE IT ACT FOR VARIOUS ASSESSMENT YEARS AND ALSO AD DITIONS MADE IN RESPECT OF CAPITAL GAINS ACCOUNTABLE IN THE HANDS O F THE ASSESSEE. THERE IS ALSO A DISPUTE REGARDING THE ADDITION MADE AGAINST CASH FOUND IN THE COURSE OF SEARCH. AS THE FACTS AND CIRCUMSTANCES O F THESE APPEALS ARE SAME AND SIMILAR AND THE GROUNDS RAISED HEREIN ARE ALL ESSENTIALLY COMMON THESE APPEALS ARE DISPOSED OFF THROUGH THIS COMMON ORDER. ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 3 4. AS FAR AS THE APPEALS FILED BY THE REVENUE FOR A SSESSMENT YEARS 2002-03 AND 2003-04 ARE CONCERNED THE GROUNDS ARE RAISED AGAINST DELETION MADE BY THE COMMISSIONER OF INCOME-TAX (AP PEALS) IN RESPECT OF ADDITIONS MADE U/S.68 OF THE INCOME-TAX ACT 196 1. BUT FOR DIFFERENCES IN THE AMOUNTS THE CHARACTER OF ALL TH ESE ADDITIONS IS THE SAME. THE ASSESSING AUTHORITY ASKED FOR DETAILS IN RESPECT OF CREDITS RECEIVED BY THE ASSESSEES TO WHICH THE ASSESSEE HAS FURNISHED DETAILS REGARDING CONFIRMATION LETTERS PAN ETC. THE ASSE SSING OFFICER HELD A VIEW THAT THE LOAN ACCOUNTS WERE NOT PROVED AND ACC ORDINGLY ADDITIONS WERE MADE U/S.68. IN FIRST APPEAL COMMISSIONER OF INCOME-TAX (APPEALS) HELD FOR BOTH ASSESSMENT YEARS 2003-04 A ND 2003-04 THAT THE ASSESSEE HAS DISCHARGED HIS PRIMARY RESPONSIBILITY OF PROVING THE GENUINENESS OF THE LOAN TRANSACTIONS. THIS FINDING IS AGITATED BY THE REVENUE. 5. WE CONSIDERED THIS ISSUE. THE COMMISSIONER OF I NCOME-TAX (APPEALS) HAS DISCUSSED THE MATTER IN A DETAILED W AY IN THE LIGHT OF SUBMISSIONS AND EXPLANATIONS REPEATED BY THE ASSESS EE BEFORE HIM. AS NOTICED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THE LOAN AMOUNTS WERE AVAILED THROUGH CROSSED CHEQUES. THE ASSESSEE HAS REPAID ALL THOSE LOANS AGAIN THROUGH CROSSED CHEQUES. BOTH THE INCO MING AND OUTGOING AMOUNTS ARE REFLECTED IN THE BANK ACCOUNTS. THE AD DRESS AND PARTICULARS ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 4 OF THE CREDITORS WERE FURNISHED. CONFIRMATION LETT ERS ALSO WERE FURNISHED. IN RESPECT OF INCOME-TAX ASSESSEES PERMANENT ACCOU NT NUMBERS WERE ALSO FURNISHED. WHEN ALL THESE MATERIALS ARE FURNI SHED BY AN ASSESSEE THE NORMAL PRESUMPTION IS THAT THE ASSESSEE HAS DISCHAR GED HIS PRIMARY ONUS OF PROVING THE GENUINENESS OF THE LOAN CREDITS. TH IS PRESUMPTION CAN BE OVERLOOKED IF THE ASSESSING OFFICER HAS BROUGHT ANY CONTRARY MATERIALS ON RECORD. IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT MADE ANY FURTHER ENQUIRY OR BROUGHT ANY MATERIAL ON RECORD T O DISCREDIT THE EXPLANATIONS OFFERED BY THE ASSESSEE. 6. THEREFORE IN THE FACTS AND CIRCUMSTANCES OF THE SE CASES WE FIND THAT THERE IS NO GROUND FOR US TO INTERFERE IN THE ORDERS PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN DELETING T HE ADDITIONS MADE U/S.68. THIS GROUNDS RAISED BY THE REVENUE FAIL. 7. THE APPEALS FILED BY THE REVENUE FOR THE ASSESSM ENT YEARS 2002-03 AND 2003-04 ARE LIABLE TO BE DISMISSED. 8. REGARDING THE APPEALS FILED BY THE REVENUE FOR A SSESSMENT YEARS 2004-05 AND 2006-07 THE DISPUTES RELATE TO THE QUA NTIFICATION OF LONG- TERM CAPITAL GAINS AND SHORT-TERM CAPITAL GAINS ASS ESSABLE IN THE HANDS OF THE ASSESSEE. WHILE COMPUTING THE LONG-TERM CAPITA L GAINS FOR THE ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 5 ASSESSMENT YEAR 2004-05 THE ASSESSING AUTHORITY HA S REDUCED THE COST OF ACQUISITION AND FURTHER DECLINED TO GIVE ANY BENEFI T TOWARDS IMPROVEMENT OF THE PROPERTY STATING THAT EVIDENCES WERE NOT PRO DUCED BY THE ASSESSEE. BUT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS R IGHTLY OPINED THAT EVEN THOUGH SPECIFIC PIECES OF DOCUMENTARY EVIDENCE S WERE NOT AVAILABLE JUSTIFYING THE NATURE OF EXPENDITURE THE ASSESSEE HAS RECORDED THE COST OF ACQUISITIONS AND EXPENDITURE ON IMPROVEMENT CONSIST ENTLY FROM YEAR TO YEAR IN HIS ACCOUNTS/BALANCE SHEET AND THEREFORE THIS DISCLOSURE SUPPORTS THE CONTENTION OF THE ASSESSEE. WE AGREE WITH THE FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ESPECIALLY IN THE LIGHT OF THE FACT THAT THESE ADDITIONS WERE ADMITTED IN THE LIGHT OF THE DETAILS COLLECTED IN THE COURSE OF SEARCH. IT MAY NOT BE POSSIBLE ALL T HE TIME TO PRODUCE FORMAL EVIDENCES IN RESPECT OF EXPENSES INCURRED IN MAKING IMPROVEMENT IN RESPECT OF IMMOVABLE PROPERTIES WAY BACK IN THE LONG PAST. BUT THE ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSEE SHOW THAT THE ASSESSEE IS ACCOUNTING FOR SUCH EXPENSES ON YEARLY BASIS AND TH OSE ARE REFLECTED IN THE BALANCE SHEET UNDER THE HEAD INVESTMENTS AND THESE WERE ALREADY BEFORE THE CONCERNED AUTHORITIES AT THE RELEVANT PO INT OF TIME. THEREFORE WE FIND THAT THE ORDER OF THE COMMISSIONER OF INCOM E-TAX (APPEALS) ON THIS POINT IS JUSTIFIED. ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 6 9. REGARDING THE LONG-TERM CAPITAL GAINS FOR ASSESS MENT YEAR 2006-07 THE ALLOCATION OF COMMISSION AND LEGAL FEES WAS JUS TIFIED AS IT HAS BEEN REASONABLY ESTABLISHED THAT THOSE EXPENSES WERE INC URRED FOR THE PURCHASE OF PROPERTY WHICH WERE THE SUBJECT MATTER OF CAPITA L GAINS COMPUTATION. REGARDING THE INTEREST EXPENDITURE THE LOAN ACCOUN T WITH KARNATAKA BANK IS ALSO ON RECORD. IN THIS CIRCUMSTANCES THE MODI FICATIONS GRANTED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) DO NOT CALL FO R ANY INTERFERENCE. 10. THE GROUNDS RAISED BY THE REVENUE FAIL AND ITS APPEALS FILED FOR THE ASSESSMENT YEARS 2004-05 AND 2006-07 ARE LIABLE TO BE DISMISSED. 11. NOW COMING TO THE CORRESPONDING CROSS OBJECTION S FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2002-03 2003-04 AND 2004-05 THE GROUNDS RELATED TO THE VALIDITY OF THE ASSESSMENT C OMPLETED U/S.143(3) R.W.S 153A AND THE LEVY OF INTEREST U/S.234A 234B AND 234C. ALL THESE GROUNDS ARE IN FACT ONLY PLEADING WITHOUT ANY SUPPO RT OF FACTS AND SUBSTANCE. THEY ARE LIABLE TO BE DISMISSED. 12. NEXT WE ARE CONSIDERING THE CROSS APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO.258/BANG/2009 . ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 7 13. THE FIRST GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST THE DETERMINATION OF ANNUAL VALUE OF DHARMASHALA AND GO DOWN BUILDINGS BELONGING TO THE ASSESSEE. WE DO NOT FIND MUCH FOR CE IN THE ARGUMENT. THE GROUND IS REJECTED. 14. THE SECOND GROUND RAISED BY THE ASSESSEE IS THA T THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MAKING AN ADDITION OF RS .6 65 000/- AS UNEXPLAINED CASH U/S.69A. WE CONSIDERED THIS ISSUE . THE ASSESSEE HAS EXPLAINED THAT THE CASH BELONGED TO HIS WIFE. THE ASSESSEES WIFE IS ASSESSED TO INCOME-TAX. SHE HAS HER OWN SOURCES OF INCOME AND THIS MUCH AMOUNT OF CASH IS REFLECTED IN HER ACCOUNTS AS WELL. IN THESE CIRCUMSTANCES THE EXPLANATION OFFERED BY THE ASSES SEE SHOULD HAVE BEEN ACCEPTED BY THE ASSESSING AUTHORITY. BUT THE ASSES SING AUTHORITY DECLINED TO ACCEPT THE ABOVE EXPLANATION FOR THE REASON THAT THE SAID EXPLANATION WAS NOT OFFERED BY THE ASSESSEE AT THE TIME OF SEAR CH. WE FIND THAT THE SAID OBSERVATION OF THE ASSESSING OFFICER IS TOO HA RSH. IF EVERY EXPLANATION AND PARTICULARS ARE TO COME OUT INSTANT LY AT THE TIME OF SEARCH ITSELF THEN THERE IS NO JUSTIFICATION OF LAW TO MA KE NECESSARY POST-SEARCH ENQUIRIES. SO THE LAW ITSELF DOES NOT EXPECT THAT EVERY DETAIL/INFORMATION WOULD BE SATISFACTORILY FURNISHED AT THE TIME OF SE ARCH ITSELF. THE STATEMENTS AND ADMISSIONS MADE IN THE COURSE OF A S EARCH ARE STILL REFUTABLE AFTER THE SEARCH PROVIDED THE DETAILS AN D PARTICULARS AND ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 8 EVIDENCES ARE AVAILABLE. LIKEWISE NON-FURNISHING OF ANY EXPLANATION AT THE TIME OF SEARCH DOES NOT PRECLUDE AN ASSESSEE FR OM PRODUCING EVIDENCES AFTER THE SEARCH IN RESPECT OF A PARTICUL AR ITEM OF DISPUTE. HAVING FOUND THAT THE AMOUNT IS ATTRIBUTABLE TO THE ASSESSEES WIFE WE FIND THAT THE ADDITION OF RS.6 65 000/- IS NOT JUST IFIED. ACCORDINGLY THE SAID ADDITION IS DELETED. 15. THE GROUNDS RELATING TO LEVY OF INTEREST IS CON SEQUENTIAL WHICH WOULD AUTOMATICALLY BE TAKEN CARE OF BY THE ASSESSI NG AUTHORITY WHILE PASSING THE MODIFIED ORDER. 16. THE ASSESSEE IS PARTLY SUCCESSFUL IN HIS APPEAL FOR ASSESSMENT YEAR 2006-07. 17. LASTLY WE WILL CONSIDER THE APPEAL FILED BY TH E ASSESSEE FOR ASSESSMENT YEAR 2005-06 IN ITA NO.673/BANG/2009 F OR WHICH YEAR THERE IS NO CROSS APPEAL OR CROSS OBJECTION BY THE REVENU E. 18. THE FIRST GROUND RAISED BY THE ASSESSEE IS REGA RDING THE VALIDITY OF ASSESSMENT U/S.143(3) R.W.S.153A. THIS GROUND IS R EJECTED DEVOID OF MERIT. ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 9 19. THE NEXT GROUND IS AGAINST THE ADDITION OF RS.5 LAKHS MADE BY THE LOWER AUTHORITIES FOR WHICH THE EXPLANATION OF THE ASSESSEE IS THAT THE EARLIER OFFER OF RS.3 LAKHS TOWARDS UNEXPLAINED INV ESTMENT ITSELF WAS ERRONEOUS AND ABSOLUTELY THERE IS NO REASON EVEN TO SUSTAIN SUCH AN ADDITION NOT TO SAY ANYTHING FURTHER ABOUT THE ADD ITION OF RS.2 LAKHS. ANYHOW WE DO NOT FIND MUCH SUBSTANCE IN THIS GROUND . IT IS REJECTED. 20. THE GROUND RELATING TO LEVY OF INTEREST U/S.234 A 234B AND 234C IS CONSEQUENTIAL IN NATURE AND TO BE ADJUDICATED AS SU CH. 21. APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEA R 2005-06 IS LIABLE TO BE DISMISSED. 22. IN RESULT : I) FOUR APPEALS FILED BY THE REVENUE ARE DISMISSED . II) CROSS OBJECTIONS FILED BY ASSESSEE AND THE APPE AL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2005-06 ARE ALSO DISMI SSED. III) THE CROSS APPEAL FILED BY THE ASSESSEE FOR ASS ESSMENT YEAR 2006-07 IS PARTLY ALLOWED. ORDER PRONOUNCED ON MONDAY THE 26TH APRIL 2010 A T BANGALORE. SD/- SD/- (GEORGE GEORGE K) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDEN T MCN* ITA NOS.475 TO 478 258 673 CO.24 TO 26/B/09 PAGE - 10 COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF ITAT NEW DELHI 7. GF ITAT BANGALORE BY ORDER ASST.REGISTRAR ITAT BANGALORE