Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘A’
Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH
आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH ‘A’
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.327/Ahd/2016 �नधा�रण वष�/Asstt. Year: 2011-2012 DCIT, Cir.3(3) Vs. Shri Rakesh Hiralal Thakkar Ahmedabad. 1, Rukshmani Vallabh Society Satellite, Ahmedabad 380 015. PAN : AARPT 3338 B
अपीलाथ�/ (Appellant) �त् यथ�/ (Respondent)
Revenue by : Shri S.K. Dev, Sr.DR Assessee by : Shri Aseem L. Thakkar, AR
सुनवाई क� तार�ख/Date of Hearing : 28/11/2018 घोषणा क� तार�ख /Date of Pronouncement: 18 /01/2019 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:
Revenue is in appeal before the Tribunal against order of ld.CIT(A)-13, Ahmedabad dated 2.11.2015 for the Asstt.Year 2011-12.
Though the Revenue has taken six grounds of appeal, but grievance revolves around a single issue viz. the ld.CIT(A) has erred in deleting addition of Rs.79.00 lakhs made by the AO on account of disallowance of land development expenditure.
Brief facts of the case are that the assessee is an individual engaged in the business of building contractor, hotel business and trading in land. He has filed his return of income on 31.10.2011 declaring total income at Rs.25,14,080/-. The case of the assessee was
ITA No.327/Ahd/2016 2 selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the details, it revealed that the assessee had purchased agriculture land located at Ambali Village in Dascroi Taluka bearing Block No.111K. This land was sold by the assessee on 12.10.2010 for a consideration of Rs.1,06,20,000/-. It was purchased on 17.7.2008 at Rs.22.00 lakhs. The assessee has shown additional expenditure of Rs.80.58 lakhs and shown profit at Rs.3,62,000/-. One of the payments debited by the assessee was in the name of M/s.Tripada Infrastructure P.Ltd. (“TIPL” for short) amounting to Rs.79.10 lakhs. The AO verified veracity of these payments. He issued a show cause notice to “TIPL” which has been returned unserved. He deputed Inspector who reported that no one was available on the give address. Thereafter, he took fresh address of this concern from the office of the Registrar of Companies and issued notice to “TIPL” as well as its directors. One of the directors responded to the notice and confirmed the transaction. The ld.AO thereafter called for balance sheet of “TIPL” from the AO of that concern and observed that the concern has not shown credit of Rs.79.10 lakhs under the head “unsecured loans” qua the assessee. Hence, he doubted this payment and made addition. Dissatisfied with the addition, the assessee carried the matter in appeal before the ld.CIT(A). The ld.CIT(A) has deleted the addition by observing as under: “5. During the course of appellate proceedings, the appellant primarily argued that a payment of Rs.79.10 lakhs was made through an account payee cheque, which is admittedly been received by M/s.TIPL. The appellant also furnished copies of its bank statements indicating clearing of this cheque vide no. 598485 dated 23/10/2010. The copy of confirmation which was filed by M/s. TIPL before the A.O. was also furnished before me. The same is available on page-3 of the paper book so filed. In addition to that, the assessee argued that conclusive evidences and facts exists, which indicates that the money has travelled from appellant through M/s. TIPL, which is duly being acknowledged and reflected from the bank account, the confirmation and the affidavit so filed at the appellate stage. It was pointed out that if the sum so paid by the appellant is not
ITA No.327/Ahd/2016 3 accounted for by the third party, it may not be constituted as a fault of the appellant and an adverse inference drawn with respect to the evidences so filed. In short, the appellant submitted that the prevailing circumstances do not make the payments made, as non-genuine or bogus. I am, inclined to agree with the appellant that more than two evidences have been furnished before the A.O. and also before me, which conclusively indicate that the payments have been made to M/s. TIPL. There is no reason for the A.O. to draw a conclusion that such sum is bogus. Accordingly, the addition of Rs.79.10 lakhs is directed to be deleted. The ground raised by the appellant is allowed.
Before us, the ld.DR relied upon the order of the AO. On the other hand, the ld.counsel for the assessee relied upon order of the ld.CIT(A).
With the assistance of the ld.representatives, we have gone through the record carefully. A perusal of the assessment order would indicate that on the basis of certain circumstances, the ld.AO has raised suspicion and doubt about the nature of the expenditure incurred by the assessee in this land transaction. In a way, he disallowed this expenditure. The suspicion discussed by the AO in the assessment order are that (a) signature on the letter transmitted by the director in response to the notice under section 133(6) vis-à-vis confirmation filed by the assessee are different; (b) “TIPL” has not shown this amount under the head “unsecured loan” or under the head “current liabilities”; (c) at the first instance on the address given by the assessee, whereabouts of this “TIPL” were not known; (d) assessee failed to produce the directors of “TIPL” before the AO. These are certain peripheral circumstances given by the AO for doubting the claim made by the assessee. We have gone through these circumstances as well as other material available on record. Firstly, the assessee is engaged in the trading of land. He has shown profit on this transaction. It is not a loss claimed by the assessee. Thus, the AO cannot expect higher volume of profit required to be earned by an assessee. It is the assessee who has to arrange its affairs regarding a transaction. The
ITA No.327/Ahd/2016 4 payment was made through account payee cheque, and it has been cleared. Details of bank transactions were produced before the ld.CIT(A) and accepted by the first appellate authority. Allegations of the AO that it was not shown in the unsecured loans and current liabilities by the “TIPL” in its balance sheet is concerned, if it is being treated as income in land trading transaction, then how it will come under these two heads. The ld.AO failed to appreciate that aspect. It is also pertinent to note that the assessee has submitted complete details. Now, if “TIPL” failed to account a particular item in its accounts, then whether the assessee should be penalized. Considering all these aspects and the order of the ld.CIT(A), we are of the view that no interference is called for in the order of the ld.CIT(A). We find no merit in this appeal of the Revenue. It is dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the Court on 18th January, 2019 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 18/01/2019