LAXMICHAND JAGSHI VORA vs. COMMISSIONER OF INCOME TAX 18

ORAL JUDGMENT (PER J.P.DEVADHAR,J) : 1 The petitioner is aggrieved by the order passed by the CIT on 28.02.2012 under Section 264 of the Income Tax Act, 1961 (for the short 'Act') SNC 1/9 wp 1399-12.doc CNR No : HCBM020106452012 Uploaded on - 21/08/2020 whereby   the   revision   application   filed   in connection with an addition made in the assessment order   under   Section   143(3)   dated   27.12.2010   has been rejected. 2 The   assessment   year   involved   herein   is A.Y. 2008­2009. 3 For the assessment year in question, the return   of   income   was   filed   by   the   assessee declaring total income of Rs.99,489/­ on which tax paid was Nil. 4 In the scrutiny assessment proceedings for the assessment year 2008­2009 pursuant to a query raised   by   the   Assessing   Officer   (A.O.),   the assessee   by   his   letter   dated   10.12.2010 specifically  informed  the  A.O.  that  no  immovable property   was   sold   or   purchased   during   the assessment year in question.  When confronted with the   information   received   from   the   office   of   the Sub­Registrar,   Thane,  the  assessee  by  its  letter SNC 2/9 wp 1399-12.doc Uploaded on - 21/08/2020 dated  23.12.2010   admitted  to   have  purchased  Flat No. A­46 by paying cash amount of Rs.9,74,775/­. By the said letter, the assessee offered to pay tax on the entire cash amount of Rs.9,74,775/­ paid to the developer and also agreed to pay tax on the amount   of   the   stamp   duty   and   the   registration charges paid thereon.  In accordance with the above statement,   the   assessment   order   was   passed   on 27.12.2010

and after

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penalty proceedings, penalty under Section 271(1)(c) of the Act was imposed by order dated 22.06.2011. 5 On   03.10.2011,   the   assessee   filed   an application under Section 264 of the Act by stating that   the   addition   of   Rs.9,74,775/­   was   not justified   as   that   amount   was   not   paid   to   the builder in the assessment year 2008­2009, but was paid   to   the   builder   during   the   period   from 22.05.1994 to 04.05.2008. Since, the documentary evidence to that effect could not be traced out at the relevant time and the same are now traced out, the   assessee   requested   the   CIT   to   reduce   the SNC 3/9 wp 1399-12.doc Uploaded on - 21/08/2020 addition of Rs.9,74,775/­ which was added in the assessment order for AY 2008­2009. 6 By   the   impugned   order,   the   CIT   has rejected the application.  Hence, the present writ petition. 7 The   grievance   of   the   assessee   is   that since   the   evidence   regarding   the   payment   of Rs.9,74,775/­ in the earlier years was not readily available, the assessee had erroneously stated that the said amount was paid in cash in the assessment year in question.  As the documents now traced out clearly establish that the statement made by the assessee in his letter addressed to the Assessing Officer   was   erroneous,   the   CIT   ought   to   have allowed   the   revision   application   filed   by   the assessee.   According to the petitioner, the flat no: A­46 was allotted to him in lieu of payments made by him during the period from 1994 to 2008 in respect of flat no:B­92 and therefore, the addition of the said amount AY 2008­2009 is unjustified. SNC 4/9 wp 1399-12.doc Uploaded on - 21/08/2020 We see no merits in the above contention. From the order of the CIT, it is seen that there is total inconsistency in the stand of the assessee at every stage.  Initially, when asked as to whether any immovable property was purchased or sold in the assessment year 2008­09, the assessee by his letter dated 10.12.2010 denied to have purchased or sold any immovable property in the assessment year in question.     When   confronted   with   a   copy   of   the agreement dated 07.03.2008 received from the office of the Sub­Registrar, Thane, the assesee came round and   by   its   letter   dated   23.12.2010   voluntarily offered to pay tax on the amount of Rs.9,74,775/­ paid in cash to the builder as also the stamp duty and   registration   charges  borne  by   the   assessee. Accordingly, the assessment order was passed. 9 The   contention   of   the   assessee   that   the payments in question were made to the builder not in   the   assessment   year   2008­2009,   but   in   the earlier years has been rightly rejected by the CIT because, firstly, the payments made in the earlier SNC 5/9 wp 1399-12.doc Uploaded on - 21/08/2020 years if any related to purchase of flat No. B­92 on the 9th floor and not in respect of flat No.A­46 on the 4th floor. If the amounts paid on 07.03.2008 were  infact paid  in the earlier years,  the  same would   have   found   place   in   the   agreement   dated 07.03.2008. It   is   relevant   to   note   that   on 04.03.2008 (page 62 of the Petition) the assessee claims that there was corrigendum letter issued by the builder to the effect that flat No. A­46 on the 4th floor is being alloted to the assessee, in lieu of   flat   no.   B­92   on   the   9th  floor   as   per   the earlier allotment letter dated 22.05.1994. If the corrigendum letter was issued on 04.03.2008, then the same would have found place in the agreement, which was executed on 07.03.2008. In the absence of any indication in the agreement dated 07.03.2008 to the effect that the payments made prior to the assessment year 2008­09 is the consideration paid for the flat No: A­46, it is impossible to accept oral contention of the assessee which is contrary to   the   document   on   record.     Moreover,   if   the corrigendum letter was infact issued by the builder SNC 6/9 wp 1399-12.doc Uploaded on - 21/08/2020 04.03.2008   to   the   effect   that   flat   No.A­46   was issued in lieu of flat No.B­92, the assessee would not have admitted by his letter dated 23.12.2010 that   the   consideration   for   flat   No:A­46   under agreement   dated   07.03.2008   was   paid   in   cash   and offer   that   amount   to   tax.   In   view   of   the categorical admission on the part of the assessee that the amount of Rs.9,74,775/­ were paid in cash, in our opinion, the entire case sought to be made out by  the  assessee is  only an  afterthought and therefore, no fault can be found in the order of the CIT in rejecting the revision application of the assessee. 10 Counsel   for   the   petitioner­assessee strongly relied upon the Judgment of the Gujarat High Court in the case of C. Parekh and co. v/s. CIT reported in 122 ITR 610. In our opinion, the said judgment has no relevance to the facts of the present   case. In   that   case,   admittedly   over assessment was made due to the assessee's mistake and accordingly it was held that the commissioner SNC 7/9 wp 1399-12.doc Uploaded on - 21/08/2020 was   empowered   to   grant   relief.    In   the   present case, facts on record suggest that the claim now made is contrary to the facts on record and clearly an   afterthought.     Hence,   the   decision   of   the Gujarat High Court in the case of C.Parekh & Co. (Supra) is distinguishable on facts. 11 Strong   reliance   was   also   placed   by Counsel for the assessee  on the decision  of the Kerala High Court, in the case of Parekh Bros. v/s CIT   reported   in   150   ITR   105. In   that   case, deduction   was   not   claimed   during   the   assessment proceeding or appeals therefrom. In such a case, when an application was made under Section 264 of the Act, it was held that the CIT ought to have considered   the   claim   of   the   assessee.     In   our opinion, the said decision has no bearing on the facts  of  the  present  case,  as  the  documents now sought to be produced before the CIT do not in any way   support   the   case   of   the   assessee   that   the agreement dated 07.03.2008 related to purchase of flat No:A­46 in lieu of Flat No: B­92 which the SNC 8/9 wp 1399-12.doc Uploaded on - 21/08/2020 assessee had agreed to purchase in the year 1994. Accordingly, the decision of the Kerala High Court is distinguishable on facts. 12 For   the   aforesaid   reasons,   we   see   no merits in the writ petition and the same is hereby dismissed. (M.S. SANKLECHA, J.) (J.P.DEVADHAR, J.) 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