Income Tax Appellate Tribunal - Ahmedabad
Ramjibhai J.Sonani, Bhavnagar vs Income Tax Officer,Ward-1(1),, ... on 23 March, 2017
आयकर अपीलीय अिधकरण,
अिधकरण अहमदाबाद यायपीठ 'SMC/D' अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC/D" BENCH, AHMEDABAD
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER
AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.303/Ahd/2011
नधारण वष/Assessment Year: 2007-08
Shri Ramjibhai J. Sonani, Vs. The ITO,
S/9, Darshan Complex, Ward 1(1),
Opp. Madhav Complex, Bhavnagar
Nilambaug, Bhavnagar
PAN : AFXPS 0307 J
[
अपीलाथ / (Appellant) यथ / (Respondent)
Assessee by : Shri Ankit Talsania, AR
Revenue by : Shri Parveen Kumar, Sr DR
सु न वाई क ता र ख / Date
of Hearing : 15/03/2017
घोषणा क तार ख / Date of Pronouncement: 23/03/2017
आदे श/O R D E R
PER MANISH BORAD, ACCOUNTANT MEMBER:
This appeal of the assessee for Assessment Year 2007-08 is directed against the order of the Commissioner of Income-tax (Appeals)-XX, Ahmedabad dated 25.10.2010 vide appeal No. CIT(A)-XX/241/09-10, arising out of order u/s 143(3) dated 31.12.2009 framed by the ITO, Ward-1(1), Bhavnagar.
2. Assessee has raised following grounds of appeal:-
1. The Id. CIT(A) has erred in law and on facts of the case in confirming the action of ld. AO in making addition of Rs.42,51,524/- u/s 69 of the Act merely relying on the AIR information without appreciating the facts that the Appellant has not made investment in the impugned property.
2. Both the lower authorities have failed to appreciate that the impugned property is purchased by the father of the Appellant and therefore no addition can be made in the hands of the Appellant. The Id. CIT(A) has further erred in ITA No. 303/Ahd/2011 Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -2- law and on the facts of the case in not appreciating the evidences / supporting furnished to support the contention of the Appellant that the impugned property is purchased out of the funds remitted by the father of the Appellant.
3. Alternatively and without prejudicially, the source of investment in impugned property has been explained and under the circumstances, the Id.
CIT(A) has erred in law and hands of the Appellant, which is not taxable as per proviso to Section 56(1)(v) of the Act.
4. Alternatively and without prejudicially, the source of investment in impugned property has been explained and under the circumstances, the Id. CIT(A) has erred in law and on facts in confirming the action of Id.AO in making addition u/s 69 of the Act.
5. Alternatively and without prejudicially, both the lower authorities have failed to appreciate that the Appellant is only a joint-holder and therefore in any case entire amount of investment cannot be added in the hands of the Appellant.
6. Both the lower authorities have passed the orders without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order.
7. The Id. CIT(A) has erred in law and on facts in confirming the action of Id. AO in charging interest u/s 234B/C/D of the Act.
8. The ld. CIT(A) has erred in law and on facts in confirming the action of ld. AO in initiating penalty u/s 271(1)(c) of the Act.
3. While going through the above grounds, we observe that assessee has raised eight grounds, out of which first six grounds are against the single issue relating to addition of Rs.42,51,524/- confirmed by the ld. CIT(A) u/s 69 of the Act.
4. Briefly stated facts, as culled out from the assessment records, are that the assessee is an individual engaged in the business of diamond assorting and polishing job work. He filed his return of income on 01.02.2008 declaring total income of Rs.89,740/-. On the basis of AIR information showing that the assessee had purchased immovable property in Mumbai, assessee's case was ITA No. 303/Ahd/2011 Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -3- selected for scrutiny through CASS. Notice u/s 143(2) followed by 142(1) were issued and duly served upon the assessee. During the course of assessment proceedings, information was sought for in relation to source of investment in immovable property amounting to Rs.42,51,524/-. The assessee, even after being provided various opportunities, could not produce any details; however, he admitted that he has purchased a flat in Green Woods Scheme, Andheri, Mumbai for Rs.39,56,082/- (excluding stamp duty) during Financial Year 2006- 07, but by mistake the same could not be shown in the balance-sheet as on 31.03.2007. Copy of purchase deed was filed before the ld. Assessing Officer; but due to lack of any other information relating to source of investment, the ld. Assessing Officer completed the assessment by making addition of Rs.42,51,524/- u/s 69 of the Act and also minor addition of Rs.9,530/- for disallowance of depreciation and accordingly assessed the income at Rs.43,50,790/-.
5. Aggrieved, the assessee went in appeal before the ld. CIT(A), but could not succeed as both the impugned additions were confirmed by the ld. CIT(A).
6. Further aggrieved, the assessee is now in appeal before the Tribunal against the addition of Rs.42,51,524/- made u/s 69 of the Act.
7. At the time of hearing, ld. Authorized Representative for the assessee submitted that, during the course of the assessment proceedings, statement of the assessee was recorded u/s 131 of the Act by the ld. Assessing Officer on 14.12.2009, wherein on the basis of reply to question Nos. 8 and 9, the ld. Assessing Officer formed an opinion that the assessee has made investment of Rs.42,51,524/- in one flat in Mumbai, which was not recorded in the books of accounts of the assessee; and he, accordingly, made the impugned addition u/s 69 of the Act in the hands of the assessee. He further submitted that the ld. CIT(A) also confirmed the action of the ld. Assessing Officer mainly relying on ITA No. 303/Ahd/2011 Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -4- the answer to question nos. 8 and 9 of the statement recorded u/s 131 of the Act. Ld. AR contended that both the lower authorities have failed to appreciate that, in the very statement, vide question no.9, the assessee has stated that the investment in such immovable property (Flat) has been made in joint-name of him and his father and it was made out of the funds provided by the father of the assessee out of his agricultural income. It is also contended that both the lower authorities have not even whispered that the assessee, at the time of recording statement u/s 131 of the Act only, has stated that the impugned property purchased was in joint-name and it was made out of the funds provided by the father of the assessee. Thus, he argued that, in the present case, both the lower authorities have conveniently read the statement in a part to hold that the assessee has admitted that the impugned property was purchased by him, not recorded in the books of accounts and no source is explained without considering the second limb of answer to question no.9 wherein it has been stated that the impugned property was purchased in joint-name and was financed by the father of the assessee. In support thereof, affidavit of Shri Jerambhai D Sonani (father of the assessee) alongwith ledger account of flat in his books of accounts was also placed on record to show that an amount of Rs.38,50,024/- was paid by him for purchasing the impugned property.
7.1 Ld. AR further contended that, during the course of the appellate proceedings before ld. CIT(A), he called for the Bank Book/Pass Book/Books of Accounts of Shri Jerambhai D Sonani, which was also placed on record by the assessee alongwith break-up and mode of payment of Rs.38,50,024/-. He further submitted that the balance amount of Rs.4,00,000/- was paid by the assessee out of bank account of his HUF. He also added that the books of accounts of Shri Jerambhai Sonani have not been found to be incorrect or non- genuine by the any of the authorities below.
ITA No. 303/Ahd/2011Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -5- 7.2 Ld. Authorized Representative, in compliance with the direction of Hon'ble Bench dated 22.06.2016, placed on record a copy of share certificate issued by Greenwoods Co-operative Housing Society Ltd showing that the impugned property is registered in the name of Shri Jerambhai D. Sonani (father of the assessee and first holder of the impugned property) and in the name of the appellant (second holder of the impugned property). Ld. AR referred and relied on the decision of Co-ordinate Bench of this Tribunal in the case of Popatlal N. Vora vs. ITO, vide ITA No.2365/Ahd/2010, pronounced on 22.11.2013.
8. On the other hand, ld. Departmental Representative vehemently argued supporting the orders of the lower authorities and also submitted that assessee has failed to furnish any supporting documentary evidence, except the copy of purchase deed to prove the genuineness of the source of investment to purchase the residential house. He further added that, even when the property was jointly owned by assessee's father and assessee, most of the consideration came through brother of the assessee who has accepted to have received cash periodically from his father and in turn had made the cheques favouring the builder. Further, assessee has filed various documents in the paper-book which includes number of land ownership by father of the assessee, financial statements of father Shri Jerambhai D. Sonani and affidavit of assessee's brother Shri Gordhanbhai J. Sonani. None of these documents have been shown before the Assessing Authority, nor any remand report has been sought by the ld. CIT(A) to verify these documents.
9. We have heard the rival contentions and perused the record placed before us. The solitary grievance of the assessee is against the order of the CIT(A) confirming the action of ld. Assessing Officer making addition of Rs.42,51,524/- u/s 69 of the Act on the basis of AIR information showing that the assessee had purchased immovable property at 502, Green Woods ITA No. 303/Ahd/2011 Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -6- Residential Complex, Andheri, Mumbai. We find that assessee's case was selected for scrutiny under CASS on the basis of AIR information showing that the assessee had purchased the impugned immovable property during the Financial Year 2006-07 for a consideration of Rs.42,51,524/-. Financial statements of the assessee reveled that the impugned investment was not declared in the regular books. We further observe that during the course of assessment proceedings, even after providing several opportunities, assessee did not file any details of source of investment, except copy of purchase deed. A statement on oath was recorded u/s 131(1) by the Assessing Authority on 14.12.2009 in which while replying to question No.7, assessee admitted that he has purchased a flat in Green Woods Scheme, Andheri, Mumbai at Rs.39,56,000/-. Further, in reply to question No.8, in paragraph 5, he again confirmed that the impugned property was purchased but for some reasons he could not declare it in his income tax return. Further, in reply to question No.9, he agreed to provide the copy of purchase deed but was unable to provide the source of investment. However, he informed that the property is jointly purchased with his father and the source of investment came from the agricultural activities carried on by his father.
10. We further observe that apart from the statement on oath and copy of purchase deed, there was not an iota of evidence furnished before the Assessing Authority, due to which the ld. Assessing Officer had no option but to make addition u/s 69 of the Act for Rs.42,51,524/-. Thereafter, when assessee filed appeal before the ld. CIT(A), he submitted that the impugned property was actually purchased by his father only and his name was jointly added as joint owner, because father was not having PAN and also in common practice, when the aged person is a purchaser, it is always advisable to add the joint owner, because the heir and executor cannot deal with such property in the absence of probate from the Hon'ble High court in the event of unfortunate demise of the ITA No. 303/Ahd/2011 Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -7- concerned person. Ld. Counsel further placed on record before the ld. CIT(A) the affidavits and confirmations filed by Shri Jerambhai D. Sonani and Shri Gordhanbhai J. Sonani, wherein Shri Gordhanbhai Sonani accepted that he received cash from his father out of agricultural income and in turn he prepared demand draft/cheques totaling to Rs.30,39,524/- which were paid in parts out of which few fall in FY 2005-06 and the remaining in FY 2006-07. Assessee also submitted that remaining amount of consideration came from father at Rs.6,10,500/-; Rs. 2,00,000/- from Shri Ghanshyam T. Sonani and Rs.4,00,000/- from Ramjibhai Sonani HUF. However, ld. CIT(A), without taking cognizance of all these details filed before him, confirmed the action of the ld. Assessing Officer by following the judgment of Hon'ble Apex Court in the case of CIT vs. Durga Prasad More, 82 ITR 540 (SC), wherein it has been held that self-serving affidavits have no evidentiary value. Ld. CIT(A) also raised doubt on the genuineness of the source of funds coming from Shri Jerambhai D. Sonani, through his son Shri Gordhanbhai J. Sonani, as the bank account of Shri Jerambhai D. Somani was having a meager balance of Rs.200/- since last many years and there was a doubt about source of Rs.37,00,000/- which was kept in cash by Shri Jerambhai D. Somani.
11. In the backdrop of all above narrated facts, we find that before the Assessing Authority it was on record, as per the purchase deed, that property was jointly purchased by the appellant and his father, but no details regarding source was provided; however, in appellate proceedings before the ld. CIT(A), many new details were filed but it seems that ld. CIT(A) has not deemed it fit to get the details properly verified/investigated so that the genuineness and creditworthiness of the source of funds is proved. We also observe that assessee in his paper-book from page No.70 to page 195 has filed series of documents pertaining to Shri Jerambhai D. Sonani (father of assessee) showing balance-sheet, profit and loss account, cash book, ledger account of agricultural ITA No. 303/Ahd/2011 Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -8- income, sale bill of agricultural produce, proof of owner-ship of agricultural land and statement of bank, where mostly cash have been deposited just before the date of issuing the cheques to the builder. These details were not placed for examination before the assessing authorities. Similarly, we also observe from the confirmation letter given by Shri Gordhanbhai J. Sonani, placed at page 54- 56 of the paper-book giving a list of various cheques issued by him on behalf of his father for the purpose of purchasing impugned immovable property. This list contains payments which are falling in four financial years, starting from FY 2004-05 to FY 2007-08. This itself shows that there has not been a proper enquiry to verify the source of investment in all these years. It plainly looks like that assessee, in order to intentionally avoid deep investigation, did not furnish any evidence, payment details and source of agricultural income before the Assessing Authority, because there is a very low probability that assessee was not having these details under his hand even when the property was in his name and the assessment proceedings were undertaken to the end of December 2009.
12. We also observe that ld. CIT(A) somehow could not lay his hands on all these details, which clearly shows that source of investment in the immovable property was just not confined in the Financial Year 2006-07, but it stretched over four financial years, commencing from FY 2004-05 to FY 2007-08.
13 We are, therefore, of the view that there has not been sufficient/proper enquiry of various documents, payment details, affidavits furnished by various parties and genuineness of agricultural income, which all seems to have come afresh before the ld. CIT(A) and we, therefore, restore all the issues in this appeal to the file of the ld. CIT(A) to re-adjudicate them afresh in light of various documents and details filed by assessee and discussed above and, if necessary, ld. CIT(A) can call for a remand report from the Assessing Officer and to pass fresh appellate order.
ITA No. 303/Ahd/2011Shri Ramjibhai J. Sonani vs. ITO AY : 2007-08 -9-
14. Ground Nos. 7 & 8 are against the charging of interest u/s 234B/C/D and u/s 271(1)(c) of the Act. We hold that charging of interest is consequential and that of penalty is premature as the issues have been restored to ld. CIT(A) and accordingly dispose of these grounds of appeal of the assessee.
15. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 23rd March 2017 at Ahmedabad.
Sd/- Sd/-
(S.S. GODARA) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated, 23/03/2017
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं$धत आयकर आय&
ु त / Concerned CIT
4. आयकर आय&
ु त (अपील)/ The CIT(A)-
5. वभागीय त न$ध,आयकर अपील य अ$धकरण ,राजोकट/DR,ITAT, Ahmedabad,
6. गाड0 फाईल /Guard file.
आदे शानस
ु ार/ BY ORDER,
TRUE COPY
सहायक पंजीकार (Asstt.Registrar)
आयकर अपील य अ$धकरण
ITAT, Ahmedabad