Income Tax Appellate Tribunal - Chandigarh
Sh. Vijay Kumar Gupta,, Chandigarh vs Dcit, Cc-1, Chandigarh on 8 July, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "ए ", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH 'A' , CHANDIGARH
ीमती दवा संह, याय!क सद"य एवं ीमती अ नपण
ू ा% गु'ता, लेखा सद"य
BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER
AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.150/Chd/2019
नधा रण वष / Assessment Year : 2004-05
Shri Ashwani Kumar Gupta, बनाम The Dy.C.I.T.,
# 3007, Sector 19D, Central Circle-1,
Chandigarh. Chandigarh.
थायी लेखा सं./PAN NO: ABLPG9219P
अपीलाथ /Appellant यथ /Respondent
आयकर अपील सं./ ITA No.151/Chd/2019
नधा रण वष / Assessment Year : 2004-05
Shri Ajay Kumar Gupta, बनाम The Dy.C.I.T.,
# 3007, Sector 19D, Central Circle-1,
Chandigarh. Chandigarh.
थायी लेखा सं./PAN NO: ABGPG3698B
अपीलाथ /Appellant यथ /Respondent
आयकर अपील सं./ ITA No.152/Chd/2019
नधा रण वष / Assessment Year : 2004-05
Shri Vjay Kumar Gupta, बनाम The Dy.C.I.T.,
# 3007, Sector 19D, Central Circle-1,
Chandigarh. Chandigarh.
थायी लेखा सं./PAN NO: ABGPG3697Q
अपीलाथ /Appellant यथ /Respondent
2 ITA Nos.150 to 152/2019
A.Y.2004-05
नधा रती क ओर से/Assessee by: Shri Tej Mohan Singh, Adv.
राज व क ओर से/ Revenue by : Shri Amresh Singh, CIT (DR)
सन
ु वाई क तार$ख/Date of Hearing : 02.07.2019
उदघोषणा क तार$ख/Date of Pronouncement: 08.07.2019
आदे श/ORDER
PER BENCH:
Th e a b ove a pp e a ls ha v e b ee n fil e d b y t he di f fe re nt a sse sse e s a g a in st th e con sol i da te d o rde r of t he C om mis si on e r of I n come Ta x ( Ap p e a l s) -3 , G u rg a on [( i n s ho rt 'C I T( A) '] da t e d 30. 1 1 .2 0 18 , p a sse d u/s 2 5 0 (6 ) of the I n come Ta x Ac t, 1 96 1 ( h e re i na f te r re fe rr e d to a s ' Act '), r e l a ti n g to a sse ssme nt ye a r 2 0 0 4-0 5 .
2. I t w a s c ommon gr ou nd b e twee n th e pa rt ie s that the is sue in vol ve d wa s com mon a nd in te r l i nke d i n a l l th e th ree a pp e a ls , re la t ing to a d d i ti on ma de on a c cou nt of un e xp la ine d i nvest me nt in a co mmo n h ous e p r op e r ty b y t he thr e e a s se sse e s. I t w a s f ur t he r p oin te d out th is wa s t he se c ond r ou nd b e fore us w ith th e is sue or i gi na l l y h avi ng be e n re st ore d b ack b y the I TA T i n th e fi r st r ou nd to the Ass e ss i ng O ff ice r (A .O . ) fo r con si d e r a ti on a f re sh . Al l t he a pp e a ls we re , ther e f ore , ta ke n up toge t he r f or he a ri ng . 3 ITA Nos.150 to 152/2019
A.Y.2004-05 Ld .C oun se l f or th e a sse ssee sta t e d th a t f or t he sake of con ve n ie n ce he sh a ll be de a li ng w i th th e fa c ts in t he ca se of Sh r i V ij a y Ku ma r G u pt a i n I TA N o .1 5 2/C hd /2 01 9 . T a k i n g us through the facts of the case, as reproduced in the or der pa sse d by the I .T. A. T. i n the fir st round in I TA No.660-663/Chd/2008 dated 30-04-14, copy of which was placed before us at page Nos.24 to 68, the Ld.Counsel for the assessee drew our attention to para 76 of the order where the facts relating to the issue were discussed. The Ld.Counsel for the asssessee pointed out from the same that the assessee alongwith his brothers S/Shri Ashwani Kumar Gupta and Ajay Kumar Gupta(the other assesses/appellants) had purchased House No.164, Sector 27, Chandigarh during the impugned year vide sale deed registered for a consideration of Rs.48 lacs. That the said property was purchased from one Shri Shanti Lal Sethia. That during search & seizure operation at the premises of one Shri Mukesh Mittal a printout of agreement to sell from his computer, reflected a consideration of Rs.75 lacs for the said property. Th e A.O. further found that the seller had mortgaged this property for raising loan from bank of Rs.75 lacs. The A.O. further 4 ITA Nos.150 to 152/2019 A.Y.2004-05 noted that the assessee had declared investment of a sum of Rs.17 lacs only for purchase of said house during the year in his return of income filed. The assessee was asked to explain the source of investment of Rs.75 lacs in the property and since the assessee failed to furnish any evidence regarding the source of investment, the A.O. treated the entire amount as unexplained and added 1/3rd of the total investment made in the hands of each assessee, amounting to Rs.28 lacs, as deemed income u/s 69B of the Act. Para 76 of the I.T.A.T. order ,noting the above facts is reproduced hereunder:
"76. The brief facts relating to the issue are that the assessee alongwith his brothers S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta purchased House No.164, Sector 27, Chandigarh vide sale deed registered on 10.2.2004 for total consideration of Rs.48 lacs. The said property was purchased from Shri Shanti Lal Setia. During the course of search and seizure operation at the premises of Shri Mukesh Mittal a printout of agreement to sell from the computer of Shri Mukesh Mittal reflected the consideration of Rs.75 lacs as against sale consideration mentioned in the sale deed at Rs.48 lacs.
The Assessing Officer noted that as per the agreement to sell consideration was Rs.75 lacs, whereas as per sale deed the consideration was Rs.48 lacs and came to the conclusion that the concealment of income in this property transaction was to the tune of Rs.27 lacs. Reference was made to section 2(22AA) of the Act defining the documents and also to section 2(1)(f) of the Information Technology and also the information gathered from Chief Manager, Union Bank of India, 5 ITA Nos.150 to 152/2019 A.Y.2004-05 Sector 17B, Chandigarh. The Assessing Officer on investigation found that Shri Shanti Lal Setia has mortgaged the property for raising the loan and sum of Rs.75 lacs was paid to the bank out of which Rs.27 lacs was paid in cash on 27.1.2004. The agreement to sell was executed in the month of January and as per the Assessing Officer the same represented undisclosed portion of the consideration. The assessee was asked to explain the source of Rs.75 lacs in the purchase of property with evidence. The assessee, on the other hand, in the computation of income had declared that he had invested sum of Rs.17 lacs for purchase of residential House in Sector 27, Chandigarh jointly with S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta during the year but as the assessee had failed to furnish any evidence regarding the nature and source of this investment either in the return of income or in the course of proceedings, the Assessing Officer held that 1/5th share in the total income i.e. Rs.75 lacs plus other over head expenses of Rs.3 lacs equal to Rs.78 lacs was the share of the assessee and thus sum of Rs.28 lacs was added as deemed income under section 69B of the Act".
4. The Ld.Counsel for the asssessee thereafter sta ted tha t the CI T( A) de lete d the en tire addi tion on the basis that the consideration recorded in the sale deed stood disclosed in the return filed by the assessee and had been shown as paid from the bank accounts of the assessees and thus stood explained. Further that the undisclosed investment over and above Rs.48 lacs amounting to Rs.27 lacs had been denied both by the buyer and the seller to have been transacted and there was no evidence with the Revenue to hold that the impugned amount of money had passed for the purchase of the said property and, 6 ITA Nos.150 to 152/2019 A.Y.2004-05 therefore, no addition was warranted on account of the same also. Thu s both the registered sale consideration i.e. the disclosed consideration i.e. disclosed consideration and the undisclosed consideration relating to the impugned investment of Rs.75 lacs amounting to Rs.48 lacs and Rs.27 lacs re spectivel y w as de lete d by the Ld .CI T(A) L d. Counsel for the assessee took us through para 77 of the order of the I TA T noting the a fore sa id facts a s under:
"77. The CIT (Appeals) noted that the total investment worked out by the Assessing Officer was Rs.78 lacs and 1/3rd of the same comes to Rs.26 lcas, whereas addition of Rs.28 lacs had been made. The CIT (Appeals) further noted that the Assessing Officer himself had mentioned that Rs.48 lacs was declared as consideration in the property in question and the source of the said Rs.48 lacs plus Rs.3 lacs was that Rs.17 lacs have been paid by the assessee, S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta each. As the said amount was paid from the respective bank accounts of the said persons, the CIT (Appeals) was of the view that the said obviously was paid from the explained sources of the persons and duly reflected in the relevant documents. Thus as per the CIT (Appeals) there was no question of considering the investment of Rs.51 lacs to be unexplained investment. In respect of the balance sum of Rs.27 lacs, the CIT (Appeals) noted that both the assessee and the seller of the property had stated that no such amount was either paid or received on account of the said transaction. The CIT (Appeals) held that the addition for such on money could not be made on the basis of suspicion and on the basis that such on money does pass in similar manner. In the absence of any concrete evidence the CIT (Appeals) held that no addition was warranted on the basis of suspicion. The CIT (Appeals) further noted that Shri Shanti Lal Setia and his wife had 7 ITA Nos.150 to 152/2019 A.Y.2004-05 categorically refused to have received the amount from the assessee or his brothers and the sources of the cash deposited in the Union Bank of India was explained by him and hence there was no ground for taking adverse view against the assessee. Further in the hands of Shri Shanti Lal Setia and his wife the sale consideration of the property had been considered at Rs.48 lacs only and in view thereof, there was no justification for taking contrary stand in the hands of the assessee on the basis of the computer printout of agreement to sell found in the possession of Shri Mukesh Mittal. Thus addition of Rs.28 lacs was deleted."
5. Thereafter the Ld.Counsel for the asssessee sta ted that the I .T.A. T. re stored the a ddi ti on ma de on account of the registered sale consideration of Rs.48 lacs to the AO, holding that mere disclosure of the investment in the return of income filed did not discharge the onus upon the assessee to explain with evidence the source of the investment and that in the interest of justice the issue needed to be reconsidered by the A.O. Our attention was drawn to the findings of the I.T.A.T. at Para 79 of the order as under:
"79. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to the investment in House no.164, Sector 27, Chandigarh. The assessee alongwith his two brothers S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta had made investment in the purchase of the said property. The said deed was registered on 10.2.2004 and the total consideration in the sale deed was Rs.48 lacs. During the course of search and seizure operation at the premises of Shri Mukesh Mittal, a printout of 8 ITA Nos.150 to 152/2019 A.Y.2004-05 agreement to sell was taken in which the consideration was mentioned at Rs.75 lacs. As the assessee failed to explain the sources of investment both the declared and un-declared, before the Assessing Officer because of non filing of any information before the Assessing Officer, the Assessing Officer treated the investment of Rs.75 lacs plus over head expenses of Rs.3 lacs as unexplained and made addition of Rs.28 lacs each in the hands of three co-owners. The CIT (Appeals) in the first instance noted that 1/3rd share of Rs.78 lacs was Rs.27 lacs and not Rs.28 lacs. The CIT (Appeals) further observed that the sale consideration declared in the sale deed i.e. Rs.48 lacs was out of the declared sources of the assessee and addition to that effect was deleted by the CIT (Appeals). We find no merit in the said stand of the CIT (Appeals) where the assessee had failed to furnish basic evidence of the source of investment in House No.164, Sector 27, Chandigarh merely because assessee had declared that it had invested in the purchase of the said property in the computation of income filed alongwith the return of income, does not discharge the onus upon the assessee to explain with evidence the source of investment in the said property. We reverse the finding of the CIT (Appeals) in this regard. However, in the interest of justice, we deem it fit to send this issue back to the file of the Assessing Officer, who shall adjudicate the issue in accordance with law. The assessee is directed to discharge his onus with evidence of sources of investment in the said property. Reasonable opportunity of hearing shall be afforded to the assessee by the Assessing Officer and the issue be decided in accordance with law."
6. The Ld.Counsel for the asssessee thereafter took us through the order of the A.O. passed in the second round pointing out from para 4 thereof that the assessee during proceedings before the A.O. had stated that it had approached the I.T.A.T. to bring to its notice the defect in its order of having not considered the additional evidence filed before it. The 9 ITA Nos.150 to 152/2019 A.Y.2004-05 contents of the letter filed to the I .T. A. T. were submitted to the A.O. That thereafter the A.O. had written to the Registrar of the I.T.A.T. to confirm whether any such application was filed by the assessee and if so, to send the status of this ap pli cation. Th a t in response to the same , the A.O. was informed that no application was pending for disposal before the I .T.A. T. a nd furthe r the status of the application filed by the assessee to the I.T.A.T. had been sent to it. The A.O. after considering the reply was of the view that the assessee was merely avoiding representing his case on merits indulging in delay in the proceedings raising petty matters and since despite many notices and queries raised, no reply was field by the assessee. The A.O. confirmed the addition of Rs.28 lacs on account of unexplained investment in House No.164, Sector 27, Chandigarh. Para 6 of the A.O.'s order holding so, is reproduced hereunder:
"6. In view of the above state of affairs, it can clearly be observed that the assessee has avoided representing his case on merits and he has willfully indulged in delaying the proceedings while raising some other petty matters like making representation before Hon'ble ITAT with regard to alleged defects in the order of the Hon'ble ITAT. Considering 10 ITA Nos.150 to 152/2019 A.Y.2004-05 the delaying tactics and not responding to the queries raised vide notices issued u/s 142(1), penalty proceedings were initiated u/s 271(1)(b) and subsequently penalty for Rs.20,000/- was imposed on the assessee vide order dated 11.03.201 6. It may further be important to mention here that even during the course of original assessment proceedings, the assessee remained non-cooperative in finalizing the assessment. Despite many notices issued and queries raised, no concrete reply was filed by the assessee. Accordingly, the then Assessing Officer had to frame the assessment 153A on the basis of material available on record. Thus, I am of the opinion that the assessee has nothing to offer on the issue of addition of Rs. 28,00,000/- on account of unexplained investment in House No.164, Sector-27, Chandigarh. Accordingly, an addition of Rs.28,00,000/- is made to the returned income of the assessee."
7. The Ld.Counsel for the asssessee thereafter stated that the Ld.CI T(A) upheld the order of the A.O but based his findings on facts which were not related to the issue at hand. Ld.Counsel for the assessee took us through the order of the CI T( A) at para 6.5 as under:
"6.5 During the appellate proceedings, the appellant has neither made any request for admission of additional evidence nor any explanation with regard to the source of investment of Rs. 51 lacs (sale price of Rs. 48 lacs + Rs. 3 lacs of overhead expenses).
The Hon'ble ITAT has already adjudicated the issue with regard to the amount of Rs, 27 lakhs over and above the declared sales consideration of Rs. 48 lakhs at para 80 of the order by stating that no adverse inference can be drawn against the assessee on the basis of the alleged agreement to sale which is a computer printout and not even signed by any parties.
However, it is apparent that the appellant has failed to identify the creditor, prove the capacity of the creditor and 11 ITA Nos.150 to 152/2019 A.Y.2004-05 justify the genuineness of loan with regard to Rs. 51 lacs received through account payee cheque in the bank account of the appellants), Sh. Ajay Kr. Gupta, Sh, Vijay Kr. Gupra & Sh. Ashwini Kr. Gupta for the-year under consideration.
Further, the appellant (s) have also not given any fresh evidence with regard to the issue related to Rs. 51 lakhs received in case of all the three appellants which was restored back to the file of the AO, who as well as the undersigned have afforded reasonable opportunity to appellant(s).
In view of the above discussion, addition of Rs. 17 lakhs is confirmed in the hands of the appellant, Shri Ajay Kumar Gupta.
As similar issue is involved in the case of other appellants] of this common order as discussed above, similar addition of Rs. 17 lacs is also confirmed in the hands of Shri Vijay Kumar Gupta and Shri Ashwani Kumar Gupta also for the year under consideration."
8. The Ld.Counsel for the asssessee pointed out from the same that the Ld.CIT(A) while adjudicating the issue of investment in house property had gone on a totally different tangent, diverging from the issue at hand completely by making a reference to the fact that the assessee had failed to identify creditor, prove its capacity and justify the genuineness of the loan. Ld.Counsel for the assessee contended that the findings of fa ct thus recor ded b y the CI T(A) ,ba sed on which he had upheld the addition was clearly alien to the i ssue a t han d. Th e Ld.Counsel for the a ssse ssee contended, therefore, that the CI T(A) had upheld the 12 ITA Nos.150 to 152/2019 A.Y.2004-05 order of the A.O. without applying his mind to the issue at all.
9. The Ld. DR fairly conceded that the findings of fact recorded by the CIT(A) while confirming the addition made by the A.O. ,were not in relation to the issue at hand.
10. In view of the above, since undisputedly the order pa ssed by the CI T( A) is not ba se d on the f acts relatin g to the issue at hand, there is clearly no application of mind by the Ld.CIT(A). The order passed is perverse. In the interest of justice therefore, we consider it fit to restore the issue back to the CIT(A) to adjudicate the issue afresh after considering the relevant facts relating to the issue. Needless to add that the assessee be given due opportunity of hearing and is free to file all evidences which he considers necessary for the adjudication of the issue at hand. Th e Ld.Counsel for the asssessee has given an oral undertaking to us to participate in the proceedings and not take unnecessary adjournments, failing which the Ld .CI T( A) i s free to a djud icate the i ssue on the 13 ITA Nos.150 to 152/2019 A.Y.2004-05 basis of material in his possession and as he deems fit, in accordance with law.
11. S i n c e t h e i s s u e i s c o m m o n t o a l l t h e a p p e a l s , ou r de ci si on re n de red a b ove w il l mu ta ti s mut a nd i s t o a l l t he a pp e a ls .
12 . I n e f fe ct t he re fo re a l l the a p pe a l s fi le d by the a ss e ssee sta n d a l lo we d f or s ta ti sti ca l pu r p ose s .
O r de r p r o n o u n ce d i n t he O p e n C ou r t .
Sd/- Sd/-
दवा संह अ नपण
ू ा% ग'ु ता
(DIVA SINGH ) (ANNAPURNA GUPTA)
याय!क सद"य/Judicial Member लेखा सद"य/Accountant Member
दनांक /Dated: 08th July, 2019
*रती*
आदे श क त*ल+प अ,े+षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु-त/ CIT
4. आयकर आयु-त (अपील)/ The CIT(A)
5. +वभागीय त न0ध, आयकर अपील$य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar