ACIT Vs Shri Punit J. Patel (ITAT Mumbai)
In application u/s.154 of the Act, the assessee has asked for rectifying the addition made of long term capital gains on sale of shares of Tripex overseas as undisclosed income. It is the assessee’s claim that the AO has made addition of Rs.3,86,192/- alleged to be bogus long term capital gain being value of shares of Tripex Ltd. in A.Y.2001-02 whereas the sale of Tripex Ltd shares was made in A.Y.2007-08 and not in A.Y.2001-02. It was contention of assessee that the AO should not have added 5% on the alleged sale of Tripex shares in the current assessment year. Deletion of such addition cannot be considered u/s.154 of the Act. Under the provisions of Section 154 of the Act, only mistake apparent from record can be rectified. The error pointed by the assessee is debatable in nature and requires long deliberation, which cannot be the subject of Section 154 of the Act. Accordingly, we do not find any infirmity in the order of CIT(A) confirming the rejection of application filed by the assessee u/s.154 of the Act.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
These are the cross appeals filed by assessee and Revenue as well as against the order of CIT(A) for the assessment years 2001-01 to 2007-08, in the matter of order passed under Section 143(3)/153A of the I.T.Act.
2. Common grounds are involved in all the appeals and they are related to the family members, where search was conducted, therefore, all the appeals are heard en masse and are now decided by this consolidated order.
3. Rival contentions have been heard and record perused. Facts in brief are that both the assessee are husband and wife and having income from business, capital gains, other sources and agricultural income. A search and seizure action u/s.132 of the Act was carried out on 10-1-2007 in the residence of Shri Jayant B. Patel, who is father of assessee Mr. Punit J. Patel and father-in-law of assessee Mrs.Cheryl J. Patel. Both the assessee being son and daughter-in-law of Mr. Jayant B. Patel, therefore, their case was selected for scrutiny. Both the assessee filed their respective return of income. Thereafter assessment u/s.143(3) r.w.s.153A of the Act was completed on 30-12-2008 determining taxable income at Rs.45,20,120/- in case of Mr. Punit J. Patel and Rs.10,25,070/- in case of Mrs. Cheryl J. Patel, respectively. Subsequently, the Tribunal in ITA No.4159/Mum/2009, vide order dated 30-9-2010 for A.Y.2003-04 set aside and restored the matter back to the file of AO for de novo assessment. Consequent to order of the Tribunal, notice u/s.143(2) and fresh opportunity letter dated 1-6-2011 were issued. The assessee was asked to produce relevant details such as copy of 7/12 statement for agricultural land, sale bills for the crop sold, documentary evidence with respect to the expenses incurred like fertilizers, pesticides, seeds, manure, labour, mode of payment and receipt of expenses etc. towards his/her claim of agricultural income. However, the AO did not accept the reply of the assessee and came to the conclusion that assessee did not have any genuine agricultural income and he/she was merely legalizing his/her unaccounted income earned from his/her business and added the agricultural income of Rs.1 lakhs in respect of Mr. Punit J. Patel and Rs.2 lakhs in case of Mrs. Cheryl J. Patel, respectively. The AO also made various addition in case of both the assessee.
4. By the impugned order the CIT(A) deleted the addition made by the AO on account of agricultural income, unexplained cash credit and sale of gold jewellery, against which the Revenue is in appeals, whereas the CIT(A) confirmed some of the additions made by the AO u/s.153A and 68 of the Act as well as the addition made on account of alleged bogus gift, against which both the assessees are in their respective appeals before us.
5. First, we shall take into consideration the appeals filed by the Revenue in case of assessee Shri Punit J. Patel (i.e. ITA Nos. 5449 to 5453/Mum/2012).
5.1 The first ground relates to deleting the addition of agricultural income on the basis of only self serving evidence which did not tantamount to carrying out agricultural operation. The AO did not accept the evidence of the assessee, according to the AO the assessee had failed to establish the performance or carrying out of agricultural operations and there was no third party evidence. Hence, the AO came to the conclusion that assessee did not have any genuine agricultural income and he was merely legalizing his/her unaccounted income earned from his business and added the agricultural income of Rs.1 lakh.
5.2 In appeal, the CIT(A) observed that there was no fault in the evidence filed by the assessee, which was very much placed before the AO and the net agricultural income shown by the assessee group is around Rs.30,000/- per acre per annum which is not very high. After relying on various case laws, the CIT(A) observed that the agricultural income claimed by the assessee for the year under consideration cannot be added in the hands of the assessee and deleted the same.
5.3 We have considered rival contentions, carefully gone through the orders of the authorities below and we do not find any mistake in the findings of the CIT(A), accordingly, we confirm the same.
6. The next ground relates to deletion of an amount of Rs.1,50,000/- out of Rs.11,91,225/- as unexplained cash credit u/s.68 of the Act.
6.1 The AO treated the gifts as unexplained cash credit. The CIT(A) by impugned order, deleted the addition after having the following observations :-
“2.9.4 I have perused the evidence filed before the Ld. AO and reiterated before me. During the year, the appellant has shown gfts of Rs.15,59,555/- received from various persons. Ld. AO has made the addition by stating that most of the parties were not produced. However, in respect of the donors who attended he has simply brushed aside their claim. Whereas I am convinced about the creditworthiness of the following persons who are either related to the appellant or are close friends and who appeared before the ld. AO, I am not inclined to accept the creditworthiness of the others as neither they are related nor connected with the appellant group and they appear to be mere name lenders in whose names the appellants of the group have laundered their money :-
