M/s Jiji Bhattacharji, New Delhi V. ITO, New Delhi

CO 328/DEL/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6734 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 21-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D DELHI) BEFORE SHRI G.D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NOS. 3705 & 3706 (DEL)2011 ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER, M S. JIJI BHATTACHARJI, WARD 48(2), NEW DELHI-110001. V. G-15, HANS BHAWAN, 1, BAHADURSHAH ZAFAR MARG, NEW DELHI. C.O. NO. 328(DEL)2011 (IN ITA 3705(DEL)2011) ASSESSMENT YEAR: 2006-07 MS. JIJI BHATTACHARJI, INCOME TAX OF FICER, G-15, HANS BHAWAN, V. WA RD 48(2), NEW DELHI-110001. 1, BAHADURSHAH ZAFAR MARG, NEW DELHI. (APPELLANT) (RESPONDENT) DEPARTMENT BY: MS. Y. KAKKAR, DR ASSESSEE BY: SHRI ANIL JAIN, CA ORDER PER BENCH ITA NO. 3705 & C.O. NO. 328(DEL)2011: ITA NO. 3705(DEL)2011 HAS BEEN FILED BY THE DEPARTM ENT FOR ASSESSMENT YEAR 2006-07 AND C.O. NO. 328(DEL)2011 IS THE CORRESPONDING CROSS OBJECTION FILED BY THE ASSESSEE. ITA NOS. 3705&3706(DEL)2011 & CO NO. 328(DEL)2011 2 2. IN ITA NO. 3705(DEL)2011, THE DEPARTMENT HAS TAK EN THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 15,14,990/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT AND INVESTMENT IN MUTUAL FU NDS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE TO PRODUCE ANY E VIDENCE BEFORE HIM WHICH IS IN VIOLATION OF RULE 46A(1) OF THE I.T. RU LES, 1962. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN ADMITTING THE EVIDENCES PRODUCED BY TH E ASSESSEE WITHOUT RECORDING THE REASONS IN WRITING FOR DOING SO WHICH IS IN VIOLATION OF RULE 46A(2) OF THE I.T. RULES, 1962. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE AO A REASONABLE OPPOR TUNITY TO EXAMINE AND REBUT THE SAID EVIDENCES PRODUCED BY THE ASSESS EE, WHICH IS IN VIOLATION OF RULE 46A(3) OF THE I.T. RULES, 1962. 3. THE ASSESSEE HAS RAISED THE FOLLOWING CROSS OBJE CTIONS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN NOT QUASHING THE ASSESSMENT ORDER PASSED B Y THE AO DESPITE THE FACT THAT NO NOTICE U/S 143(2) WAS SERVED ON TH E ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE A SSESSMENT SO PASSED IS ILLEGAL AS THE SAME WAS PASSED WITHOUT JU RISDICTION. 3. WITHOUT PREJUDICE TO THE ABOVE AND IN ALTERNATI VE THE AO ISSUED NOTICE AT A WRONG ADDRESS. ITA NOS. 3705&3706(DEL)2011 & CO NO. 328(DEL)2011 3 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE AO ERRED IN ADDING A SUM OF ` 9434/- IN THE ASSESSABLE INCOME OF THE ASSESSEE DES PITE THE FACT THAT THE SAME BELONG TO MOTHER OF THE ASSESSEE . 5. APPELLANT CRAVES FOR GRANT OF PERMISSION TO ADD , ALTER OR DELETE ANY GROUND OF APPEAL AT OR ANY TIME BEFORE THE HEARING OF APPEAL. 4. IN ITS GROUND NOS. 2 TO 4, THE DEPARTMENT HAS CH ALLENGED THE ACTION OF THE LD.CIT(A) IN ADMITTING ADDITIONAL EVIDENCE WITH OUT RECORDING REASONS IN WRITING AND WITHOUT ALLOWING THE AO A REASONABLE OP PORTUNITY TO EXAMINE AND REBUT THE SAME. 5. IN THIS REGARD, AS CONTENDED BY THE LD. DR AND N OT DISPUTED BY THE LEARNED COUNSEL FOR THE ASSESSEE, IT IS SEEN THAT T HE ASSESSMENT ORDER WAS PASSED U/S 144 OF THE I.T. ACT. BEFORE THE LD. C IT(A), THE ASSESSEE FILED EVIDENCE FOR THE FIRST TIME, AS FOLLOWS:- 4. THE INVESTMENTS AS STATED IN 1 AND 3 ABOVE HAD BEEN MADE FROM THE CANARA BANK ACCOUNT NUMBER 4623 OF THE ASSESSEE . WE ARE ENCLOSING A PHOTOCOPY OF THE RELEVANT STATEMENT OF THE ASSESSEE WHICH SHOWS THESE TWO INVESTMENTS. THE ASSESSEE HAD INV ESTED IN TAX FREE RBI BONDS DURING 2000 WHICH HAD MATURED AND AN AMOU NT OF ` 9,27,775/- WAS RECEIVED AGAINST THE MATURITY VALUE OF THESE RBI BONDS. WE ARE ENCLOSING THE STATEMENT OF ACCOUNT FROM THE RESPECTIVE MUTUAL FUNDS TO SHOW THAT THESE INVESTMENTS WERE MADE FROM HER ACCOUNT. THE INVESTMENT IN SL.NO. 2 WAS MADE BY ENCASHING TH E INVESTMENT IN SL. NO. 1 ON 8.2.2006. WE ARE ENCLOSING THE ACCOU NT STATEMENT OF HDFC MUTUAL FUND FOR THE SWITCHOVER FROM ONE MUTUAL FUND TO ANOTHER MUTUAL FUND. THE SHORT TERM CAPITAL GAIN IN THIS SWITCH OVER AMOUNTS TO ` 6014/- ONLY. THE ADDITION TO BE MADE TO THE INCOM E OF ITA NOS. 3705&3706(DEL)2011 & CO NO. 328(DEL)2011 4 THE ASSESSEE WOULD ONLY BE ` 6014/- AND NOT THE ENTIRE AMOUNT OF ` 15,14,990/-. AND THE ASSESSEE HAD DEPOSITED VARIOUS CHEQUES RECEIVE D FROM RESERVE BANK OF INDIA AGAINST THE ENCASHMENT OF TAX FREE RB I RELIEF BONDS AND ALSO SOME CHEQUES FOR INTEREST ON THESE BONDS PAID BY RESERVE BANK OF INDIA. WE ARE ENCLOSING A DULY CERTIFIED PAY IN S LIP FOR THE TOTAL AMOUNT OF ` 9,27,775/- DEPOSITED INTO THE CANARA BANK ACCOUNT O F THE ASSESSEE ON 29.10.2005 BEING ENCASHMENT OF TAX RBI RELIEF BONDS AND INTEREST THEREON. THE ABOVE AMOUNT HAS BEEN C REDITED TO ASSESSEES BANK ACCOUNT NO. 4623 WITH CANARA BANK, RAISINA ROAD BRANCH. FROM THESE PROCEEDS ONLY THE INVESTMENTS OF ` 5,00,000/- EACH INTO FRANKLIN TEMPLETON MIP AND HDFC MIP LONG TERM WERE MADE BY THE ASSESSEE. 6. THE LD. CIT(A) DISPOSED OF THE MATTER AS FOLLOWS :- I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT LAND THE ORDER OF THE AO. THE APPELLANT PURCHASED TAX FREE RBI RELI EF BONDS AFTER THE DEATH OF HER HUSBAND IN F.Y. 2001-02. THE AR PROD UCED BEFORE ME THE BANK EVIDENCE OF ` 9,27,775/- OF TAX FREE RBI RELIEF BOND DEPOSITED BY HER AFTER HUSBANDS DEATH IN 2001. THE MIDDLE DEPOSIT IS REINVESTMENT OF TOP HDFC DEPOSIT OF ` 5 LAKHS. HENCE ALL DEPOSITS STANDS EXPLAINED. CONSIDERING THE SAME THE ADDITI ON MADE BY THE AO AMOUNTING TO ` 15,14,990/- IS DELETED. HOWEVER, BANK INTEREST OF ` 6014/- & 11,198/- IS TO BE ADDED TO ASSESSEES INC OME AS INCOME FROM OTHER SOURCES, AS PER ARS ABOVE REPORT. 7. FROM THE ABOVE, IT IS EVIDENT THAT BEFORE ENTERT AINING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, THE LD. CIT(A) DID , IN VIOLATION OF RULE 46 A OF THE I.T. RULES, ADMIT ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WITHOUT ITA NOS. 3705&3706(DEL)2011 & CO NO. 328(DEL)2011 5 AFFORDING ANY OPPORTUNITY TO THE AO TO EXAMINE AND REBUT THE SAME. THEREFORE, THE DEPARTMENT IS JUSTIFIED IN ITS GRIEV ANCE IN THIS REGARD. 8. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEE N ABLE TO DISPUTE THIS POSITION. 9. ACCORDINGLY, AS AGREED TO BY BOTH THE PARTIES, T HIS MATTER IS REMITTED TO THE FILE OF THE AO, TO BE EXAMINED AND DECIDED AFRE SH IN ACCORDANCE WITH LAW, ON CONSIDERING THE ADDITIONAL EVIDENCE FILED B Y THE ASSESSEE BEFORE THE LD. CIT(A). THE ASSESSEE SHALL BE AFFORDED ADEQUA TE OPPORTUNITY TO SUPPORT HER CASE. ITA NO. 3706 (DEL)2011: 10. THIS APPEAL FILED BY THE DEPARTMENT FOR THE ASS ESSMENT YEAR 2006-07, IS CONSEQUENTIAL TO THE QUANTUM APPEAL ITA NO. 3705 (SUPRA) AND C.O. NO. 328(SUPRA), CHALLENGING THE ACTION OF THE LD. CIT(A ) IN CANCELLING THE PENALTY AMOUNTING TO ` 5,12,463/- IMPOSED BY THE AO U/S 271(1)(C) OF THE I .T. ACT. 11. AS A SEQUEL TO THE REMAND OF THE QUANTUM APPEAL AND CROSS OBJECTION (SUPRA) TO THE AO, ITA NO. 3706 (DEL)2011 IS ALSO REMITTED TO THE AOS FILE, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, IN THE LIGHT OF THE FINDINGS ITA NOS. 3705&3706(DEL)2011 & CO NO. 328(DEL)2011 6 TO BE ARRIVED AT QUA THE MATTER PERTAINING TO ITA N O. 3705 & C.O. NO. 328(DEL)2011, AS AGREED TO BY BOTH THE PARTIES. 12. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH T HE APPEALS FILED BY THE DEPARTMENT AND THE CROSS OBJECTION PREFERRED BY THE ASSESSEE ARE TREATED AS ALLOWED, FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7.12.2011. SD/- SD/- (G.D. AGARWAL) (A.D. JAIN) VICE PRESIDENT J UDICIAL MEMBER DATED: 7.12.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR