Income Tax Appellate Tribunal - Rajkot
Ramesh Gordhan Hirani,, Jamnagar vs The Income Tax Officer, Ward-2(3),, ... on 20 March, 2018
आयकर अपील य अ धकरण, राजकोट यायपीठ, राजकोट ।
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT सव ी द प कुमार के डया, लेखा सद!य एवं महावीर साद, या%यक सद!य के सम& । BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No.64/Rjt/2017 ( नधा रण वष / Assessment Year : 2007-08) Ramesh Gordhan Hirani बनाम/ The Income Tax "Matru Chhaya" Vs. Officer 10-Bhagirath Society Ward-2(3) Nr.Marketing Yard, Rajkot Rajkot !थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : ABQPH 7476 N (अपीलाथ, /Appellant) .. ( -यथ, / Respondent) अपीलाथ, ओर से /Appellant by : Shri Chetan Agarwal, AR
-यथ, क/ ओर से/Respondent by : Shri K.L. Solanki, DR ु वाई क/ तार ख / सन Date of Hearing 16/03/2018 घोषणा क/ तार ख /Date of Pronounce ment 20/ 03/2018 आदे श / O R D E R PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the Assessee against the appellate order of the Commissioner of Income Tax(Appeals)-2, Rajkot [CIT(A) in short] dated 20/01/2017 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961 ITA No.64 /RJT/2017 Ramesh Gordhan Hirani vs. ITO Asst.Year - 2007-08 -2- (hereinafter referred to as "the Act") dated 20/01/2017 relevant to Assessment Year (AY) 2007-08.
2. The ground of appeal raised by the Assessee reads as under:-
Hon.CIT(A) erred in law as well as on fact in confirming the addition of Rs.1,41,84,500/- being amount collected from the prospective buyers on behalf of the owners as a commission agent/broker though the similar addition was deleted by hon.ITAT, Rajkot Bench in earlier assessment year.
3. When the matter was called for hearing, the Ld.AR for the assessee submitted at the outset that the issue is squarely covered by the decision of the Coordinate Bench of Tribunal in assessee's own case in ITA No.582/Rjt/2012 & Ors. relevant to AY 2006-07, order dated 10/01/2014. The Ld.AR accordingly submitted that the issue being covered does not require any separate deliberation.
4. The Ld.DR relied upon the order of the CIT(A).
5. We have perused the orders of the authorities below and submissions made in this regard. As pointed out on behalf of the assessee, the CIT(A) bifurcated the additions on account of own-money from various prospective buyers on sale of land. The CIT(A) bifurcated the receipt between AY 2006-07 & 2007-08 at Rs.73,27,500/- and Rs.1,41,84,500/- respectively. We find that that based on the identical ITA No.64 /RJT/2017 Ramesh Gordhan Hirani vs. ITO Asst.Year - 2007-08 -3- facts and based on the same material, the Coordinate Bench has taken a view in favour of assessee with reference to AY 2006-07. The relevant operative para concerning AY 2006-07 reads as under:-
"6. We have heard parties with reference to material on record. The Ld.CIT(A) found that the assessee was provided with copy of statement only during the course of assessment proceedings and therefore, he had no earlier opportunity to retract his statement taken during the survey and he did not know as to how the statement was to be used against him on any earlier occasion. He, therefore, found no fault in the timing of retraction of statement by the assessee. The issue of retraction of statement has not been assailed by the Revenue in appeal. The Ld. CIT(A) has found that the diary shows that the assessee has collected sale proceeds from the prospective buyers of the plots of land and thereafter subsequently passed on part of collections to the owners of the land, This finding of fact has been admitted by the Revenue and no contrary material in this regard has been laid on record nor brought to our notice. The pocket diary found during the course of survey and impounded by the Income Tax Department is not a systematic cash account of the assessee. There is no plea by revenue that the pocket diary found during survey is a cash book maintained by assessee in regular course of business nor that it gives a correct and reliable cash account of business of assessee. The Ld. CIT(A) himself has also found that the receipts and payments pertain to two different years i.e. F.Y. 2005-06 relevant to A.Y. 2006-07 under appeal and F.Y 2006-07 relevant to A.Y 2007-08, which is not the year under appeal. Out of the total receipts, an amount of Rs.1,41,84,500/- is found attributable to the subsequent year. The Ld. CIT(A) found that only an amount of Rs. 73,27,500/- is the excess of the receipts over payments made by the assessee in the year under consideration and thereafter he worked out the surplus of sale over purchase on the basis of these two years surplus on proportionate basis and treated Rs. 51,04,080/- as income for the year under consideration. Such a basis adopted by the Ld. CIT(A) do not have any rational nor is actual earning of income by the assessee. Even the plot-wise calculations of receipts and payments has not been made by him. It has not been brought on record as to how the surplus arising on others land could be treated as income as the transaction in the pocket diary were by itself not a systematic cash account of ITA No.64 /RJT/2017 Ramesh Gordhan Hirani vs. ITO Asst.Year - 2007-08 -4- receipt and payment of the appellant. Such surplus worked out, therefore, did not constitute income of the assessee, more particularly when the Ld. CIT(A) nor the revenue authorities brought on record any material to show that the transaction of sale and purchase stand concluded during the year under consideration. Admittedly when the advances only have been received against sales, the same do not constitute income of the assessee as has also been held by the Hon'ble Rajasthan High Court in the case of CIT Vs. Vinay Pratap Singh (2012) 346 ITR 83 (Raj.). On the other hand, the assessee "has deposed in his affidavit that he was acting only as a broker and claimed to have earned brokerage income therefrom. This affidavit has not. been rejected nor assessee was called upon to support this claim. Real income on sale and purchase of plots as has also been stated by the assessee-appellant, belongs to some other sons. This fact, therefore, shall be found for bringing the real income to ix in the hands of the persons to whom it really belongs as the appellant in his affidavit has identified the owner and names of the buyers, are borne out in the impounded diary. In the peculiar facts and when the transaction of sale and purchase of plots is also not found concluded during the year under consideration, no profit thereon can be said to have accrued or arisen to the assessee during the year under consideration. The department shall be at liberty to bring to tax any profit or income on account of such transactions only when they are found concluded. The addition sustained on irrelevant consideration for Rs.51,04,080/-, is therefore, directed to be deleted and as a consequence, the ground raised in appeal by revenue being devoid of any merit, stands rejected and assessee's ground No. 2 in appeal stands allowed."
6. In parity of facts in the two assessment years except for bifurcation of money, we respectfully follow the decision arrived at by the Coordinate Bench for the AY 2006-07 and accordingly find merit in the grievance raised by the assessee.
ITA No.64 /RJT/2017Ramesh Gordhan Hirani vs. ITO Asst.Year - 2007-08 -5-
7. In the result, appeal of the assessee is allowed.
This Order pronounced in Open Court on 20/ 03//2018
Sd/- Sd/-
(महावीर साद) ( द प कुमार के डया)
या%यक सद!य ले खा सद!य
( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 20/ 03 /2018
ट .सी.नायर, व.%न.स./T.C. NAIR, Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ, / The Appellant
2. -यथ, / The Respondent.
3. संबं धत आयकर आयु9त / Concerned CIT
4. आयकर आयु9त(अपील) / The CIT(A)-2, Rajkot
5. ;वभागीय %त%न ध, आयकर अपील य अ धकरण,राजोकट/DR,ITAT, Rajkot
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स-या;पत %त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील%य अ&धकरण, राजोकट / ITAT, Rajkot
1. Date of dictation .. 19.3.18 (dictation-pad 5-pages attached at the end of this File)
2. Date on which the typed draft is placed before the Dictating Member .. 20.3.18
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S....... 20.3.18
7. Date on which the file goes to the Bench Clerk.....................20.3.18
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................