Gujarat High Court
Principal Commissioner Of Income Tax ... vs Kanubhai Maganlal ... on 22 February, 2017
Bench: M.R. Shah, B.N. Karia
O/TAXAP/75/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT
AHMEDABAD
TAX APPEAL No. 75 of 2017
With
TAX APPEAL No. 92 of 2017
With
TAX APPEAL No. 93 of 2017
With
TAX APPEAL No. 94 of 2017
FOR APPROVAL AND SIGNATURE :
HONOURABLE Mr. JUSTICE M.R. SHAH
and
HONOURABLE Mr. JUSTICE B.N. KARIA
=============================================================
1 Whether Reporters of Local Papers may be allowed to see No the judgment ?
2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of the No judgment ?
4 Whether this case involves a substantial question of law No as to the interpretation of the Constitution of India or any order made thereunder ?
============================================================== PRINCIPAL COMMISSIONER OF INCOME TAX AHMEDABAD
3....Appellant(s) Versus KANUBHAI MAGANLAL PATEL....Opponent(s) ============================================================== Appearance :
Mr. VARUN K.PATEL, ADVOCATE for the Appellant(s) No. 1 ============================================================== CORAM: HONOURABLE Mr. JUSTICE M.R. SHAH and HONOURABLE Mr. JUSTICE B.N. KARIA 22nd February 2017 Page 1 of 12 HC-NIC Page 1 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT COMMON JUDGMENT (PER : HONOURABLE Mr. JUSTICE M.R. SHAH)
1. Leave to amend Tax Appeal No. 94 of 2017.
Amendment shall be carried out forthwith.
2. As common question of law and facts arise in all these Tax Appeals and as such arising out of the common judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad [hereinafter referred to as, "the Tribunal"] and with respect to the same assessee, but with respect to different assessment years, all these Appeals are decided and disposed of by this common judgment and order.
3. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal dated 17th March 2016 in I.T.A No. 1864/Ahd/2012 for Assessment Year 2007-2008, by which the learned Tribunal has dismissed the appeal preferred by the Revenue, the appellant-Revenue has preferred Tax Appeal No. 75 of 2017 with the following proposed question of law :
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HC-NIC Page 2 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT "Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal has erred in law and on facts in confirming deletion of addition made by the Assessing Officer u/s. 69B of the Income-tax Act,1961 on account of unexplained investment in land ?"
4. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal dated 17th March 2016 in I.T.A No. 1866/Ahd/2012 for Assessment Year 2009-2010, by which also, the learned Tribunal has dismissed the appeal preferred by the Revenue, the appellant- Revenue has preferred Tax Appeal No. 92 of 2017 with the following proposed question of law :
"Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal has erred in law and on facts in confirming deletion of addition made by the Assessing Officer u/s.
69B of the Income-tax Act,1961 on
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account of unexplained investment in land ?"
5. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal dated 17th March 2016 in I.T.A No. 1865/Ahd/2012 for Assessment Year 2008-2009, by which the learned Tribunal has dismissed the appeal preferred by the Revenue, the appellant-Revenue has preferred Tax Appeal No. 93 of 2017 with the following proposed question of law :
"Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal has erred in law and on facts in confirming deletion of addition made by the Assessing Officer u/s. 69B of the Income-tax Act,1961 on account of unexplained investment in land ?"
6. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal dated 17th March 2016 in ITA No. Page 4 of 12 HC-NIC Page 4 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT 1885/Ahd/2012 for Assessment Year 2007-2008, by which the learned Tribunal has allowed the appeal preferred by the assessee and has ordered to delete the entire addition of Rs. 28,37,245/= made by the Assessing Officer as unexplained investment under Section 69B of the Act and also directed to delete addition of Rs. 41,56,282/-, the Revenue has preferred Tax Appeal No. 94 of 2017 with the following proposed question of law :
"Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 41,56,282/= merely on the basis that the addition has been made in the case of the firm viz., M/s. Sopan Industrial Infrastructural Park without considering the merits of the case ?"
7. For the sake of convenience, the facts in Tax Appeal No. 75 of 2017 are narrated and the Tax Appeal No. 75 of 2017 be treated and considered as a lead Page 5 of 12 HC-NIC Page 5 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT matter.
7.1 That, during the Assessment Year 2007-2008 to Assessment Year 2009-2010, the assessee alongwith six others purchased land at village Bavla and Kerala. It was claimed by the assessee that the said land was purchased by the firm-M/s. Advance Warehouse Project, where all the seven members were partners. That, on the basis of statements of two farmers viz., Shri Budhaji M. Thakore and Shri Bhagaji M. Thakore, who had sold their land and who, according to the Assessing Officer, admitted having received on-money from them, the Assessing Officer made addition of Rs. 28,37,245/= in Assessment Year 2007-2008; Rs. 4,75,788/= in Assessment Year 2008-2009; and Rs. 11,49,698/= in Assessment Year 2009-2010, in the case of present assessee-Shri Kanubhai M. Patel under Section 69B of the Income-tax Act for the purpose of land at village Bavla and Kerala.
7.2 The Assessing Officer also made addition of Rs. 41,56,282/= in A.Y 2007-2008 in the case of the Page 6 of 12 HC-NIC Page 6 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT respondent-assessee Shri Kanubhai M. Patel; Rs. 20,78,141/= on account of purchase of land at village Moti Bhoyan on the basis of papers seized [page nos. 72 & 73] from Shri Paresh B.Patel.
8. Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer in making the addition of Rs. 28,37,245/= as unexplained income under Section 69B of the Act for the purpose of land at village Bavla and Kerala and making addition of Rs. 41,56,282/= in A.Y 2007-2008, the assessee preferred Appeal before the learned Commissioner of Income-tax [Appeals]. The learned CIT [A] partly allowed the appeal preferred by the assessee and restricted the addition with respect to the two farmers viz., Shri Budhaji M. Thakore and Shri Bhagaji M. Thakore and directed to delete the remaining addition. The learned CIT [A] also confirmed the addition of Rs. 41,56,282/=.
9. Feeling aggrieved and dissatisfied with the order passed by the learned CIT [A] in deleting the addition with respect to the other farmers [other than Shri Page 7 of 12 HC-NIC Page 7 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT Budhaji M. Thakore and Shri Bhagaji M. Thakore], the Revenue preferred Appeal before the learned Tribunal, being I.T.A No. 1864 to 1866/Ahd/2012 for A.Y 2007- 2008 to 2009-2010 and I.T.A No. 1867 to 1869/Ahd/2012 for A.Y 2007-2008 to 2009-2010. The assessee also preferred cross Appeal being I.T.A No. 1885/Ahd/2012 for A.Y 2007-2008.
9.1 Similar additions were made under Section 69B of the Act for A.Y 2008-2009 and 2009-2010, relying upon the statements of the aforesaid two farmers viz., Shri Budhaji M. Thakore and Shri Bhagaji M. Thakore.
10. By the impugned judgment and order, the learned Tribunal has directed to delete entire additions made under Section 69B of the Act for all the years viz., A.Y 2007-2008 to 2009-2010 mainly on the ground that the statement of the aforesaid two farmers viz., Shri Budhaji M. Thakore and Shri Bhagaji M. Thakore were not furnished to the assessee and also on the ground that without a specific prayer/request so made to permit the assessee to cross examine those two Page 8 of 12 HC-NIC Page 8 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT farmers, whose statements were relied upon by the Department while making additions under Section 69B of the Act, and therefore, no additions could have been made by the Assessing Officer, relying upon the statements of the aforesaid two farmers. While allowing the appeal preferred by the assessee, being I.T.A No. 1885/Ahd/2012, the learned Tribunal has also ordered to delete the additions made by the Assessing Officer of Rs. 41,56,272/= by observing that similar additions were made in the case of the partnership firm, and therefore, if similar additions are made in the case of individual partners, the same can be said to be double taxation.
11. Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 17th March 2016 passed by the learned Tribunal, by which the learned Tribunal has directed to delete the additions made under Section 69B of the Act as well as the addition of Rs. 28,37,245/= made for A.Y 2007- 2008, the Revenue has preferred the present Appeals Page 9 of 12 HC-NIC Page 9 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT with the aforestated proposed question of law.
13. We have heard Shri Varun K Patel, learned counsel appearing on behalf of the Revenue at length. It emerges from the impugned orders and even the order passed by the Assessing Officer that the Assessing Officer made additions under Section 69B of the Act, relying upon the statements of two farmers [ie., two sellers of the land] in which, according to the Department, they admitted of having received on- money in cash. However, it is required to be noted and it is an admitted position that the statements of those two farmers upon which reliance was placed by the Department were not furnished/given to the assessee to controvert the same. Not only that when a specific request was made before the Assessing Officer to permit them to cross examine the aforesaid two farmers, the same was rejected by the Assessing Officer. Under the circumstances, as rightly observed by the learned Tribunal, the Assessing Officer was not Page 10 of 12 HC-NIC Page 10 of 12 Created On Sun Aug 13 11:31:42 IST 2017 O/TAXAP/75/2017 JUDGMENT justified in making addition under Section 69B of the Act solely relying upon the statements of those two farmers.
14. We see no reason to interfere with the findings recorded by the learned Tribunal. We are in complete agreement with the view taken by the learned Tribunal while deleting the addition made by the Assessing Officer made under Section 69B of the Act. No substantial question of law arises.
15. Now so far as deletion made by the Assessing Officer of the amount of Rs. 41,56,282/= is concerned, it is required to be noted that a similar addition was made by the Assessing Officer in the case of partnership firm also. If that be so, again to make an addition in the case of individual partners would be double taxation, as observed by the learned Tribunal. Under the circumstances, the learned Tribunal has rightly deleted the additions made in the case of the partners when a similar addition was made in the case of partnership firm also.
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16. Under the circumstances, no error of law has been committed by the learned Tribunal in deleting the additions made by the Assessing Officer of Rs. 41,56,282/=. We are in complete agreement with the view taken by the learned Tribunal. No substantial question of law arises even in the Tax Appeal No. 94 of 2017 arising out of the appeal preferred by the assessee.
17. In view of the above and for the reasons aforestated, all these Tax Appeals deserve to be dismissed and are accordingly dismissed.
Sd/= {M.R Shah, J.} Sd/= {B.N Karia, J.} Prakash Page 12 of 12 HC-NIC Page 12 of 12 Created On Sun Aug 13 11:31:42 IST 2017