DCIT, Bangalore v. Smt. Rajyalakshmi, Bangalore

ITA 985/BANG/2011 | 2005-2006
Pronouncement Date: 27-07-2012 | Result: Dismissed

Appeal Details

RSA Number 98521114 RSA 2011
Assessee PAN ADRPR0508C
Bench Bangalore
Appeal Number ITA 985/BANG/2011
Duration Of Justice 8 month(s) 23 day(s)
Appellant DCIT, Bangalore
Respondent Smt. Rajyalakshmi, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 27-07-2012
Assessment Year 2005-2006
Appeal Filed On 03-11-2011
Judgment Text
PAGE 1 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI N BARATHVAJA SANKAR VICE PRESIDENT AND SHRI GEORGE GEORGE K JUDICIAL MEMBER ITA NO.985/BANG/2011 (ASSESSMENT YEAR 2005-06) THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(3) BANGALORE. VS SMT. RAJYALAKSHMI G-1 BRIGADE LAVELLE 11/12 7 TH CROSS LAVELLE ROAD BANGALORE. PA NO.ADRPR0508C (APPELLANT) (RESPONDENT) C.O.NO.6/BANG/2012 (BY ASSESSEE) DATE OF HEARING : 25.07.2012 DATE OF PRONOUNCEMENT : 27.07.2012 REVENUE BY : SHRI SARAVANAN B JCIT ASSESSEE BY : SMT. SHEETAL ADVOCATE ORD ER PER GEORGE GEORGE K : THE DEPARTMENTS APPEAL AND ASSESSEES CROSS OBJE CTION ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI BANGAL ORE DATED 26.8.2011. THE RELEVANT ASSESSMENT YEAR IS 2005-06. THE ORDER OF THE CIT(A) ARISE OUT OF ASSESSMENT COMPLETED UNDER SECTION 143(3) RW S 153C OF THE ACT. 2. THE REVENUE IN HIS GROUNDS OF APPEAL HAS RAISED AS MANY AS SEVEN GROUNDS; HOWEVER ALL THE GROUNDS RELATE TO THE SOL ITARY ISSUE NAMELY PAGE 2 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 2 WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE ADD ITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN A FLAT TO THE EXTENT OF R S.13 57 890/-. 3. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- THE ASSESSEE IS AN INDIVIDUAL. SHE DERIVES INCOM E FROM HOUSE PROPERTY CAPITAL GAINS AND OTHER SOURCES. SHE IS T HE MANAGING TRUSTEE OF M/S NRK TRUST. SHE IS ALSO A DIRECTOR IN M/S EQUA CONSULTING INDIA PVT. LTD. M/S EQUA PROPERTIES PVT. LTD. AND M/S OLIVIYA APPARELS PVT. LTD. THE ASSESSEE HAD FILED RETURN UNDER SECTION 139 OF THE ACT ON 1/8/2005 DECLARING TOTAL INCOME OF RS.1 70 160/- AND AGRICUL TURE INCOME OF RS.1 50 000/-. 3.1 AN ACTION UNDER SECTION 132 OF THE ACT WAS CON DUCTED IN THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI NM KRISHN A ON 26/8/2008. SUBSEQUENTLY NOTICE UNDER SECTION 153C OF THE ACT W AS ISSUED ON THE ASSESSEE. IN RESPONSE TO NOTICE UNDER SECTION 153C OF THE ACT RETURN WAS FILED ON 17/3/2010 DECLARING SAME INCOME AS DISCLOS ED IN THE RETURN OF INCOME FILED ON 1/8/2005. THE ASSESSMENT WAS COMPL ETED UNDER SECTION 143(3) RWS 153C OF THE ACT VIDE ORDER DATED 30/12/2 010 FIXING A TOTAL INCOME AT RS.17 71 156/-. THE ASSESSING OFFICER MA DE A SOLITARY ADDITION OF RS.16 01 550/- BEING UNDISCLOSED INVESTMENT IN PURC HASE OF AN APARTMENT BEARING NO.B-001 GROUND FLOOR SPRING FIELD VARTH UR HOBLI BANGALORE. 3.2 BRIEF FACTS IN RELATION TO THE ADDITION OF RS. 16 01 550/- ARE AS FOLLOWS:- PAGE 3 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 3 THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT NOTED THAT FOR THE SUBSEQUENT ASSESSMENT YEAR NAMELY ASSESSMENT YEAR 2006-07 THE ASSESSEE HAD DISCLOSED SHORT TERM CAPITAL GAINS AMO UNTING TO RS.17 48 450/-. THE DETAILS OF COMPUTATION OF SHORT TERM CAPITAL GA INS ARE AS FOLLOWS:- SHORT TERM CAPITAL GAIN ASSET: HOUSE PROPERTY SITUATED AT APTS. NO.B-001 GROUND FLOOR SPRING FIELD VARTHUS HOBLI BANGALOR E DATE OF TRANSFER 26-APR-05 SALE CONSIDERATION 33 50 000 LESS DEDUCTIONS COST OF ACQUISITION : (AS PER AGREEMENT DT.21.4.200 4 & 15.6.2004 16 01 550 SHORT TERM CAPITAL GAIN 17 48 450 THE ASSESSING OFFICER HELD THAT THE ABOVE SAID P ROPERTY WAS PURCHASED IN THE FINANCIAL YEAR RELEVANT TO THE ASSE SSMENT YEAR 2005-06 AND THE ASSESSEE HAD NOT DISCLOSED THE INVESTMENT AS PE R THE DETAILS OF INVESTMENT FILED BY THE ASSESSEE ON 3/9/2010. THERE FORE THE SOURCE FOR INVESTMENT IN THE SAID PROPERTY WAS UNEXPLAINED AND ADDED A SUM OF RS.16 01 550/-. THE RELEVANT FINDING OF THE ASSESSI NG OFFICER READS AS FOLLOWS:- THE ASSESSEE HAS ONLY DISCLOSED THE AMOUNT OF CAPIT AL GAINS DERIVED BY HER FROM SALE OF THE PROPERTY BUT HA S NOT GIVEN ANY DETAILS OF THE SOURCES FOR INVESTMENT IN THE SAID PROPERTY. FURTHER THE ASSESSEE HAS NOT FILED HER STATEMENT OF AFFAIRS FOR THE YEAR ENDING 31/3/2005. THEREFORE THE SOURCES FOR THE INVESTMENT IN THE SA ID PROPERTY REMAIN UNEXPLAINED. MERE DISCLOSURE OF THE CAPITAL GAINS IN THE YEAR OF SALE OF THE PROPERTY CAN NOT PAGE 4 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 4 ABSOLVE THE ASSESSEE FROM PAYING TAX ON THE AMOUNT INVESTED BY HER FROM UNDISCLOSED INCOME EARNED DURIN G THE YEAR OF INVESTMENT. AS SEEN FROM THE SCHEDULE-2 FILED WITH THE RETURN FOR ASSESSMENT YEAR 2005-06 THE PROPERTY WAS PURCHASED BY THE ASSESSEE ON 26/4/2005 FOR RS.16 01 550/-. SINCE THE ASSESSEE HAS NOT GIVEN A NY SOURCES FOR THE INVESTMENT IN THE SAID PROPERTY TH E SOURCES FOR THE SAME REMAIN UNEXPLAINED. THE SAME IS THEREFORE TREATED TO BE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. SINCE TH E INVESTMENT HAS BEEN MADE DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2005-06 THE SAME HAS BEEN ASSESSED AS UNDISCLOSED INCOME FOR THIS ASSESSMENT YEAR. THE S HORT TERM CAPITAL GAINS RELATES TO ASSESSMENT YEAR 2006-0 7; THE SAME IS CHARGED TO TAX FOR THAT ASSESSMENT YEAR AS DISCLOSED BY THE ASSESSEE IN THE RETURN FOR THAT ASSESSMENT YEAR. (ADD : 16 01 550/-). 4. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. BEFORE THE FIRST APPELLATE AUT HORITY IT WAS SUBMITTED THAT THE AGREED CONSIDERATION OF RS.16 01 550/- WAS NOT PAID TO THE BUILDER AND WAS OUTSTANDING AS ON 31/3/2005. IT WAS SUBMIT TED THAT THE BUILDER HAS ALSO CONFIRMED THAT THE ASSESSEE HAD PAID ONLY THE T OKEN ADVANCE. AS THERE WAS NO CASH FLOW DURING THE YEAR AND HAS ONLY ASSIGNE D/TRANSFERRED THE RIGHTS OF THE FLAT UNDER CONSTRUCTION IN THE SUBSEQ UENT YEAR THE SHORT TERM GAINS WERE OFFERED FOR TAXATION WHICH THE ASSESSIN G OFFICER HAD ACCEPTED IN THE ASSESSMENT YEAR 2006-07. THE ASSESSEE ALSO S UBMITTED A COPY OF THE AGREEMENT FOR SALE WITH M/S INDISING DEVELOPERS (P) LTD. AND COPY OF THE CONSTRUCTION AGREEMENT DATED 21/4/2004. PAGE 5 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 5 5. THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSE SSEE. THE CIT(A) CONFIRMED THE ADDITION OF RS.1 21 830/- INST EAD OF RS.16 01 550/- MADE BY THE ASSESSING OFFICER. THE CIT(A) HELD THA T THE ASSESSEE HAD ONLY MADE A PAYMENT OF RS.1 21 830/- TO THE BUILDER F OR THE PURCHASE OF THE FLAT DURING THE FINANCIAL YEAR RELEVANT TO THE CONCE RNED ASSESSMENT YEAR; HENCE THIS AMOUNT (RS.1 21 830/-) WHICH IS NOT RE FLECTED IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE AS ON 31/3/2005 ALONE NE ED TO BE ADDED AS UNEXPLAINED INVESTMENT. 6. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 7. THE LEARNED DR SUBMITTED THAT THE CIT(A) FAILED TO CONSIDER THE INVESTMENT IN FLAT MADE BY THE ASSESSEE IN THE L IST OF IMMOVABLE PROPERTIES PURCHASED DURING THE YEAR AND ALSO FAILED TO GET THE EXPLANATION FROM THE ASSESSEE THE SOURCES FOR INVESTMENT OF RS. 16 01 550/-. HE SUBMITTED THAT THE CIT(A) ERRED IN DELETING THE ADD ITION ON THE REASONING THAT THE AMOUNT WAS NOT PAID TO THE BUILDER. THE L EARNED DR FURTHER SUBMITTED THAT THE CIT(A) FAILED TO CONSIDER THE FA CT THAT THE ASSESSEE HERSELF IN COMPUTATION OF CAPITAL GAIN FOR ASSESSME NT YEAR 2006-07 HAS STATED IN HER RETURN THAT THE COST OF ACQUISITION O F THE FLAT IS RS.16 01 550. HE FURTHER STATED THAT THE CIT(A) FAILED TO APPRECI ATE THE FACT THAT THE ASSESSEE CANNOT TAKE CONTRADICTORY STAND ON THE SAME ISSUE WHEN IT COMES TO EXPLAINING THE INVESTMENT IN FLAT THE ASSESSEE CLAIMED BEFORE THE CIT(A) THAT THE AMOUNT FOR FLAT INVESTMENT WAS NOT PAID TO BUILDER WHEREAS WHILE WORKING OUT THE CAPITAL GAIN FOR ASSESSMENT YEAR 200 6-07 SHE CLAIMED IN PAGE 6 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 6 INCOME TAX RETURN THE BENEFIT OF COST OF ACQUISITI ON OF RS.16 01 550/- FOR ASSESSMENT YEAR 2005-06. 8. THE LEARNED AR SUPPORTED THE FINDING OF THE CIT (A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE SOLITARY ISSUE THAT ARISES FOR OUR C ONSIDERATION IS AS TO WHAT IS THE UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE I N THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-06 IN PURCHASE OF THE IMPUGNED FLAT BEARING NO.B-001 GROUND FLOOR SPRING FIELD VARTH UR HOBLI BANGALORE. THE ASSESSEE DURING THE FINANCIAL YEAR RELEVANT TO THE A SSESSMENT YEAR 2005-06 HAD ENTERED INTO AN AGREEMENT WITH M/S INDISING DEV ELOPERS PVT. LTD. TO PURCHASE THE ABOVE MENTIONED APARTMENT. THE ASSESS EE HAD ONLY MADE A TOKEN ADVANCE OF RS.1 21 830/- FOR THE PURCHASE OF THE ABOVE MENTIONED RESIDENTIAL APARTMENT. THE AGREED CONSIDERATION OF RS.16 01 550/- (AS ON THE DATE OF ASSIGNMENT) AS MENTIONED IN THE AGREEME NT WAS NOT PAID TO THE BUILDER AND WAS OUTSTANDING AS ON 31/3/2005. THIS FACT HAS BEEN CONFIRMED BY THE BUILDER. THE CIT(A) AFTER PERUSING THE AGRE EMENT FOR SALE AND ALSO THE CONSTRUCTION AGREEMENT NOTICED THAT APART FROM PAYMENT OF RS.1 21 830/- THE ASSESSEE HAD NOT PAID ANY AMOUNT DURING THE ACCOUNTING YEAR ENDING 31/3/2005. THIS FINDING OF THE CIT(A) W AS NOT DISPELLED BY THE DEPARTMENT. THE FLAT WAS SOLD/ASSIGNED ON 26/4/200 5 NAMELY IN THE SUBSEQUENT ASSESSMENT YEAR AND THE SAME WAS OFFERED FOR TAXATION BY DECLARING SHORT TERM CAPITAL GAIN WHICH THE ASSESSI NG OFFICER HAD ACCEPTED. THE LIABILITY AT THE TIME OF ASSIGNMENT AMOUNTING TO RS.16 01 550/- BEING WORK DONE TILL THEN BECAME PAYABLE TO THE DEVELOPER M/S INDSING PAGE 7 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 7 DEVELOPERS PVT. LTD. ON THAT DATE AND THE SAID COMP ANY SETTLED THE AMOUNT OF EXPENDITURE OF RS.16 01 550/- FROM THE PERSON TO WHOM THE PROPERTY HAS BEEN ASSIGNED ON BEHALF OF THE ASSESSEE. THE ASSI GNMENT RIGHT IN INVESTMENT OF A PROPERTY IS AN ACTIONABLE CLAIM WHIC H CANNOT BE SUBJECT MATTER OF TAX. THE GAIN ALONE HAS BEEN RIGHTLY BROU GHT TO TAX AS SHORT TERM GAINS IN THE SUBSEQUENT YEAR. AS STATED EARLIER FO R THE CONCERNED ASSESSMENT YEAR THE INVESTMENT MADE BY THE ASSESSEE TO THE TUNE OF RS.1 21 830/- ALONE STANDS UNEXPLAINED AND HAS BEEN RIGHTLY ADDED BY THE CIT(A) TO THE TOTAL INCOME DISCLOSED BY THE ASSESSEE . THEREFORE THE ORDER OF THE CIT(A) ON THIS COUNT IS CORRECT AND IN ACCOR DANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDIN GLY. 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. 11. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ON LY SUPPORTING THE ORDER OF THE FIRST APPELLATE AUTHORITY. SINCE WE HA VE ALREADY DISMISSED THE APPEAL FILED BY THE REVENUE THE CROSS OBJECTION FIL ED BY THE ASSESSEE HAS BECOME REDUNDANT AND INFRUCTUOUS. HENCE THE SAME IS DISMISSED. 12. IN THE RESULT THE CROSS OBJECTION FILED BY T HE ASSESSEE IS DISMISSED. THE ORDER PRONOUNCED ON THE 27 TH DAY OF JULY 2012 AT BANGALORE. SD/- SD/- (N BARATHVAJA SANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER PAGE 8 OF 8 ITA NO.985/BAN G/2011 & C.O.N O.6/BANG/2012 8 COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNE D. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER SENIOR PRIVATE SECRETARY ITAT BA NGALORE.