Income Tax Appellate Tribunal - Chandigarh
Smt. Manju Walia, Sirsa vs Department Of Income Tax on 14 September, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, CHANDIGARH
BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT &
MS. RANO JAIN, ACCOUNTANT MEMBER
ITA Nos. 508/Chd/2015
Assessment Year: 2008-09
The ITO, Ward-3, Vs. Smt. Manju Walia,
Sirsa W/o Sh. Ashok Kumar Walia,
Mandi Dabwali,
PAN No. ABAPW3859L
(Appellant) (Respondent)
Appellant By : Sh. Sunil Kumar
Respondent By : Sh. Ashish Walia
Date of hearing : 02.09.2015
Date of Pronouncement : 14.09.2015
ORDER
PER H.L.KARWA, VP The appeal filed by the assessee is directed against the order of CIT(A), Hisar dated 27.2.2015 relating to assessment year 2008-09.
2. The only effective ground raised by the Revenue is as under:-
On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 26,02,750/- (made on account of unexplained investment in purchase of plots) without appreciating the facts that the assessee has purchased various plots and made payment in cash as mentioned in the sale deed, executed by the Competent 2 Authorities. Moreover, the assessee failed to produce credible evidence to prove that the property in question was received through family settlement.
3. Briefly stated the facts of the case are that the assessee submitted her return of income on 10.9.2009 declaring total income at Rs. 1,38,500/-. The said return was processed u/s 143(1) of the Income-tax Act, 1961 (in short 'the Act'). Subsequently, on the basis of information received form ADIT, (Inv). Hisar proceedings u/s 147 of the Act were initiated. As per the above information the assessee had made total investment of Rs. 26,02,750/- in purchasing plots at Dabwali on 30.4.2007 for Rs. 1,43,000/-, on 1.5.2007 for Rs. 1,41,750/-, on 4.5.2007 for Rs. 4,30,000/-, on 7.5.2007 for Rs. 70,000/- on 11.5.2007 for Rs. 12,70,000/- (at Sirsa), on 24.6.2007 of Rs. 3,48,000/- and on 5.2.2008 at Rs. 2,00,000/- alongwith stamp duty expenses of Rs. 1,46,235/-. These investments were not disclosed in the return of income and the assessee also failed to explain the sources of aforesaid investments. The Assessing officer made the addition of Rs. 26,02,750/- holding the same as unexplained investments.
4. Aggrieved by the order of Assessing officer the assessee carried the matter in appeal before the CIT(A) and the Ld. CIT(A) deleted the addition and hence the Revenue is in appeal before the Tribunal.
5. We have heard the rival submissions and have also perused the materials available on record. The Ld. CIT(A) has deleted the impugned addition observing as under:-
3
"5.3 I have gone through the facts of the case and written submission filed by the assessee. It is noted that the AO asked the assessee to furnish the source of investment of Rs.26,02,750/-- on the basis of registered deeds for registration of plots/land in the name of the appellant. Although, the appellant admitted about registration of assets but did not explain the source of investments made for purchase of the properties. In the absence of any documentary evidence regarding the source of investments, the AO treated the investment recorded in sale deeds of Rs.26,02,750/-- made from the unexplained sources of her income. Accordingly, the amount was added to the taxable income.
5.4 On the other hand the counsel for the appellant has submitted that sale deeds were registered in the appellant's name only to legalize the properties after family settlement where no money was involved. The documents submitted during appellate proceedings shows that the properties received by Smt. Kamla Devi, mother in law of appellant after the death of her husband was settled among two sons and daughter, namely, Sh. Ashok Walia, Sh. Virender Walia and Smt. Veena Rani through a family settlement on unregistered document. To legalize properties, the sale deeds were registered by , Ashok Walia, husband of appellant and Sh. Virender Walia, brother in law of appellant in the name of Smt. Manju Walia, the appellant. Sh. Ashok Walia under General Power of Attorney from his mother for devolution of properties transferred and registered the properties in the name of his wife, the appellant. It has been further submitted that to facilitate the registration of properties before Sub Registrar, the sale deeds were prepared which contained a value of consideration for the property for the stamp duty purposes and registration. In the absence of the sale consideration in the sale deed and as per prevailing procedure it would have not been possible to register the property in the name of the appellant. No cash transactions took place in execution of sale deeds and there was no investment made in the acquisition except for the stamp 4 papers and other expenses. The expenses are stated to be shown in the capital account.
5.5 After considering the facts of the case, submission and copies of documents, it is noted that the properties belonged to the mother in law which was transferred to the daughter in law. The husband of appellant acted under General Power of Attorney on behalf of his mother for transfer of properties in the name of his wife. In effect, the various properties after family settlement were registered in the same family and the properties belonging to the husband were registered in the name of wife. There is mention of consideration of sale in all four properties on the basis of which stamp duties have been paid and registration of properties have been done. It has been mentioned that the sale consideration has been given, and received in cash in the house and there is nothing to give or receive. However, except for copies of registered deeds there is no other evidence showing that there was transfer of money in cash from the appellant to her husband/mother in law. The AO has neither made any attempt to inquire from third sources u/s 133(6) nor recorded the statements of purchaser or seller or witnesses by issuing any summon u/s 131 of the Act to ascertain the transfer of money in cash. Further, no attempt has been made to examine the bank account statements or any inquiry from the concerned banks to find out any withdrawal or deposit in cash in the respective accounts of mother in law or the husband. In the absence of any fact finding or inquiry, was not justified in treating the sale consideration mentioned in the registered deed as appellant's income from the undisclosed sources without considering the fact that the transfer of properties were among the family members. However, it is apparent from the registered deeds about the expenses incurred on account of stamp duty and registration expenses. Although, the appellant has stated that the same is from the capital account but looking at the sources of income declared by the appellant and no evidence shown tor withdrawal of such expenses from any known source, the expenses incurred on account of stamp duties and registration 5 fees are treated as expenses incurred from undisclosed sources. Therefore, the AO is directed to restrict the addition on account of unexplained expenses to the extent of stamp duties and registration fee amounts. Thus, this ground of appeal is partly allowed."
6. Shri Sunil Kumar, Ld. DR submitted that while allowing the relief to the assessee, the Ld. CIT(A) has not appreciated the fact that the plot / land under consideration has been sold to the assessee and possession of the same has been given to her being purchaser. He further submitted that the amount of sale consideration mentioned in the sale deed has been received by the seller from the purchaser in cash. He further submitted that it is specifically mentioned in the sale deed that the seller is in need of money. Accordingly, Shri Sunil Kumar, Ld. DR submitted that it is clear that the properties were transferred in the name of the assessee by the seller after receiving the sale consideration in cash as mentioned in the sale deed. He further pointed out that so called family settlement was even not registered as per law and, therefore, the CIT(A) has wrongly placed reliance on such document. Shri Sunil Kumar Ld. DR vehemently argued that on the face of registered sale deeds mentioning clearly receipt of consideration in cash, onus to prove that no cash payment was made was on the assessee which she failed to discharge and as such there is no occasion to disbelieve the fact of receipt of payment as per the sale deeds. Therefore, it was submitted that CIT(A) was not correct in deleting the impugned addition.
7. On the other hand, Ld. Counsel for the assessee reiterated the submissions made before the lower authorities.
6
8. In the instant case, the contention of the assessee is that she got registered some sale deeds in her name only to legalize the property and after family settlement in which no money was involved. It is stated that Smt. Kamla Devi (mother in law of the assessee) got some property during the life time of her husband, Shri Prabhu Dayal. The property in the name of Shri Prabhu Dayal was his self acquired property. After the death of Shri Prabhu Dayal in the year 2001, his widow Smt. Kamla Devi was owner of the immovable properties. It is also stated that written agreement was entered in to between Smt. Kamla Devi and her two sons namely Shri Ashok Walia and Shri Verinder Walia vide agreement dated 4.9.2005 by which some properties were distributed between Ashok Walia and Verinder Walia. Later on, another deed for family settlement dated 30.3.2007 was entered into between Smt. Kamla Devi and her two sons and daughters for separation of the properties. It is claimed that to legalize properties, the sale deeds got registered by Shri Ashok Walia (husband of assessee) and Shri Verinder Walia (brother in law of the assessee) in the name of the assessee. Though the owners of the said properties were Shri Ashok Waila and Verinder Walia, as per family settlement, they both transferred the same in the name of the assessee as power of attorney of Smt. Kamla Devi. The claim of the assessee is that to legalized the immovable properties, she acquired the properties in her name. It is stated that no cash transaction was taken place in excluding the sale deed in her name. Thus, there was no investment made in the acquisition of said properties except for stamp paper and other expenses.
7
9. It appears that no explanation or reply regarding the source of investment made for purchase of plots / land was furnished before the Assessing officer and, therefore, he made the addition. It is also apparent from the assessment record that the Assessing officer has not provided due and reasonable opportunity of being heard to the assessee before making the impugned addition. However, the assessee explained the issue before the CIT(A) and it appears that the Ld. CIT(A) has correctly appreciated the facts of the case and also the evidence brought on record by the assessee. There is no material on record to controvert the explanation given by the assessee before the CIT(A). The Ld. CIT(A) has categorically stated that Smt. Kamla Devi (mother in law of the assessee) was the owner of the immovable properties after the death of her husband Shri Prabhu Dayal. A written agreement was entered into between Smt. Kamla Devi and her two sons namely Shri Ashok Walia and Verinder Walia vide which some properties were distributed between Shri Ashwani Walia and Verinder Walia. Thereafter, another deed for family settlement dated 30.3.2007 was entered into between Smt. Kamla Devi and her two sons and daughter for separation of properties. To legalize properties the sale deeds were registered by Shri Ashok Walia (husband of the assessee ) and Shri Verinder Walia (brother in law of the assessee) in the name of the assessee. Shri Ashok Walia under General Power of Attorney of Smt. Kamla Devi transferred and registered properties in the name of his wife Smt. Manju Walia. It is claimed that to facilitate the registration of properties before Sub registrar, the sale deeds were registered for the stamp duty purpose. No cash transaction took place for execution of sale deeds and there was no investment made in the acquisition except for the stamp papers and others 8 expenses. Considering the entire facts and circumstances of the present case, the order passed by CIT(A) is perfectly correct. At the same time, the contention put forth by the assessee in this case cannot be doubted particularly when there is no evidence to show that there was transfer of money in cash from the assessee to her husband or mother in law. The Ld. CIT(A) has correctly observed that Assessing officer had not made any attempt to inquire from their sources u/s 133(6) of the Act. The Assessing officer has also not recorded the statement of purchaser or seller or witnesses by issuing any summons u/s 131 of the Act to ascertain the transfer of money in cash. Ld. CIT(A) has correctly observed that the Assessing officer has not made any attempt to examine the bank account statement or any enquiry from the concerned bank to found out any withdrawals or deposits in cash in the respective account of Smt. Kamla Devi or Shri Ashok Walia. In view of the above, we uphold the order of Ld. CIT(A) and dismiss the appeal of the Revenue.
10. In the result, appeal is dismissed.
Order pronounced in the Open Court on 14.09.2015
Sd/- Sd/-
(RANO JAIN) (H.L.KARWA)
ACCOUNTANT MEMBER VICE PRESIDENT
Dated : 14 t h September, 2015
Rkk
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR
9