Sh. Naresh Kumar Verma, Rajpura V. ACIT Central Circle, Patiala

CO 34/CHANDI/2012

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4230 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Period of limitation; Tax effect; Retraction; Condonation of delay; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER CO 34/CHD/2012 IN ITA NO. 572/CHD/2012 ASSESSMENT YEAR: 2008-09 SHRI NARESH KUMAR VERMA, VS THE ACIT, # 94, GURU NANAK DEV COLONY, CENTRAL CIRCLE, RAJPURA. PATIALA. PAN: ACRPV0385Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGA L RESPONDENT BY : SHRI SUSHIL KUMAR DATE OF HEARING : 19.09.2016 DATE OF PRONOUNCEMENT : 22.09.2016 O R D E R THE PRESENT CROSS OBJECTION BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I LU DHIANA DATED 13.03.2012 FOR ASSESSMENT YEAR 2008-09. 2. THE CROSS OBJECTION WAS FILED ON FILING THE DEPARTMENTAL APPEAL IN ITA 572/2012. THE DEPARTMEN TAL APPEAL HAS BEEN DISMISSED VIDE SEPARATE ORDER DATED 28.12.2015 ON ACCOUNT OF LOW TAX EFFECT. THE CROSS OBJECTION IS, THEREFORE, HEARD SEPARATELY. 3. ACCORDING TO REPORT OF THE OFFICE, THE CROSS OBJ ECTION IS TIME BARRED BY 98 DAYS. THE ASSESSEE FILED APPL ICATION 2 FOR CONDONATION OF DELAY IN FILING THE CROSS OBJECT ION. IT WAS SUBMITTED THAT NUMBER OF APPEALS HAVE BEEN FILE D BY ASSESSEE FOR ASSESSMENT YEARS 2002-03 TO ASSESSMENT YEAR 2007-08 IN DIFFERENT APPEAL NUMBERS. ALL THESE APPE ALS WERE FILED WITHIN THE PERIOD OF LIMITATION. HOWEVE R, THE DEPARTMENT HAS FILED THE APPEAL IN ASSESSMENT YEAR 2008-09 UNDER REFERENCE IN WHICH APPEAL MEMO WAS RECEIVED ON 01.06.2012. THE ASSESSEE, THOUGH, FILE D APPEALS FOR DIFFERENT YEARS SEPARATELY BUT THE PAPE RS FOR ASSESSMENT YEAR 2008-09 UNDER REFERENCE WERE KEPT A ND GOT MISPLACED, THEREFORE, IT TOOK SOME TIME IN PREP ARATION OF THE CROSS OBJECTION. THE ASSESSEE IS NOT EDUCAT ED AND DUE TO ABOVE FACTS, THERE IS DELAY IN FILING THE CR OSS OBJECTION. 4. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW DELAY IN FILING THE CROSS OBJECTION SHOULD BE CONDO NED. THE EXPLANATION OF THE ASSESSEE IS SUPPORTED BY THE MATERIAL FACTS AS EXPLAINED IN THE APPLICATION WHIC H HAVE NOT BEEN CONTESTED BY THE REVENUE DEPARTMENT. I AM , THEREFORE, SATISFIED WITH THE EXPLANATION OF THE AS SESSEE THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT FILING CROSS OBJECTION WITHIN THE PERIOD OF LIMITAT ION. THE DELAY IN FILING THE CROSS OBJECTION IS CONDONED. 5. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. THE LD. COUNSE L FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 2, 3, 4 AND 7 OF THE 3 CROSS OBJECTION, SAME ARE, ACCORDINGLY DISMISSED BE ING NOT PRESSED. 6. ON GROUND NO. 1 OF THE CROSS OBJECTION, ASSESSEE CHALLENGED THE ADDITION OF RS. 72,000/- ON ACCOUNT OF INCOME FROM JOB WORK. THE ASSESSING OFFICER OBSERV ED THAT DURING THE COURSE OF SEARCH OPERATION, ASSESSEE STA TED ON OATH THAT HE WAS DOING JOB WORK AT HIS SHOP, HOWEV ER, NO INCOME RESULTING FROM SUCH JOB WORK HAS BEEN REFLEC TED IN THE INCOME TAX RETURN. THE ASSESSING OFFICER, THER EFORE, ESTIMATED INCOME FROM JOB WORK AND MADE ADDITION OF RS. 72,000/-. THE LD. CIT(APPEALS) CONFIRMED THE ADDIT ION AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 7. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT ASSESSEE PREFERRED SEVERAL APPEALS B EFORE ITAT CHANDIGARH BENCH IN ITAS 802 TO 806 AND 818/CHD/2012 FOR ASSESSMENT YEARS 2002-03 TO 2007-0 8. THE TRIBUNAL, VIDE ORDER DATED 27.11.2012 ON THIS I DENTICAL ISSUE DELETED THE ADDITION VIDE PARAS 5 TO 14. COP Y OF THE ORDER IS PLACED ON RECORD. HE HAS, THEREFORE, STAT ED THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. 8. AFTER HEARING RIVAL SUBMISSIONS, I AM OF THE VIE W THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT CHANDIGARH DIVISION BENCH IN THE CASE OF SAME ASSES SEE VIDE ORDER DATED 27.11.2012 IN WHICH IDENTICAL ISSU E HAVE BEEN CONSIDERED AND ENTIRE ADDITION HAVE BEEN DELET ED. FOLLOWING THE ORDER OF DIVISION BENCH IN THE CASE O F SAME 4 ASSESSEE, I SET ASIDE THE ORDERS OF AUTHORITIES BEL OW AND DELETE THE ADDITION OF RS. 72,000/-. GROUND NO. 1 OF CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 9. ON GROUND NO. 5, ASSESSEE CHALLENGED ADDITION OF RS. 2 LACS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE. THE ASSESSING OFFICER HAS O BSERVED IN THE ASSESSMENT ORDER THAT ASSESSEE HAD ADMITTED INVESTMENT OF RS. 18 LACS IN THE CONSTRUCTION OF TH E HOUSE BEFORE AVO AT THE TIME OF VALUATION BUT SAME WAS DE CLARED AT RS. 16 LACS DURING THE COURSE OF SEARCH OPERATIO N. DIFFERENCE OF RS. 2 LACS WAS EXPLAINED BY THE ASSES SEE AS BEING ATTRIBUTABLE TO WITHDRAWALS BY HIS WIFE TO TH E TUNE OF RS. 1 LAC OUT OF HER SURRENDERED INCOME AND RS. 1 L AC OUT OF ASSESSEE'S OWN WITHDRAWALS. THE ASSESSING OFFIC ER DID NOT ACCEPT CONTENTION OF THE ASSESSEE. THE ASSESSE E SUBMITTED BEFORE LD. CIT(APPEALS) THAT RS. 1 LAC WA S CONTRIBUTED BY SMT. USHA RANI, WIFE OF THE ASSESSEE AND RS. 1 LAC WAS CONTRIBUTED BY SMT. RAM DULARI, HIS M OTHER, OUT OF SURRENDERED INCOME. THE LD. CIT(APPEALS), H OWEVER, DID NOT ACCEPT EXPLANATION OF THE ASSESSEE AS THERE IS NO EVIDENCE TO SHOW THAT ASSESSEE OR HIS WIFE HAVE WIT HDRAWN ANY AMOUNT FROM THE BANK FOR THE PURPOSE OF MAKING CONSTRUCTION, THEREFORE, ADDITION WAS CONFIRMED. 10. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF TH E VIEW ADDITION OF RS. 1 LAC IS UNJUSTIFIED. THE ASSESSEE PLEADED BEFORE ASSESSING OFFICER THAT RS. 1 LAC WAS CONTRIB UTED BY HIS WIFE WHICH WAS OUT OF HER SURRENDERED INCOME. THE 5 EXPLANATION OF THE ASSESSEE IS SUPPORTED BY COMPUTA TION OF INCOME OF WIFE OF THE ASSESSEE FOR ASSESSMENT YEAR 2008-09 IN WHICH SHE HAS SURRENDERED MISCELLANEOUS INCOME O F RS. 2,50,000/- IN HER RETURN OF INCOME AND ACCEPTED BY THE REVENUE. THEREFORE, RS. 1 LAC CONTRIBUTED BY WIFE OF THE ASSESSEE IS ACCEPTABLE. THE LD. DR CONTENDED THAT ASSESSEE HAS BEEN RETRACTING FROM HIS STATEMENT. T HERE IS NO RETRACTION FROM THE SIDE OF THE ASSESSEE BECAUSE THE ASSESSEE HAS NOT ALLEGEDLY EXPLAINED THE DIFFERENCE OF RS. 2 LACS IN INVESTMENT IN CONSTRUCTION OF HOUSE BUT LAT ER ON EXPLAINED THAT RS. 1 LAC IS CONTRIBUTED BY HIS WIFE , THEREFORE, EXPLANATION OF THE ASSESSEE IS ACCEPTED THAT RS. 1 LAC IS CONTRIBUTED BY WIFE OF THE ASSESSEE FOR MA KING INVESTMENT IN CONSTRUCTION OF HOUSE. THEREFORE, AD DITION OF RS. 1 LAC IS DELETED. HOWEVER, FOR ADDITION OF OTH ER AMOUNT OF RS. 1 LAC, THE ASSESSEE EXPLAINED BEFORE ASSESSI NG OFFICER THAT IT IS WITHDRAWAL FROM HIS SAVING ACCOU NT BUT NO EVIDENCE FILED. THE ASSESSEE, HOWEVER, BEFORE L D. CIT(APPEALS), SUBMITTED THAT RS. 1 LAC HAVE BEEN CONTRIBUTED BY HIS MOTHER SMT. RAM DULARI. THERE I S A CLEAR DIFFERENCE IN THE STATEMENT OF THE ASSESSEE B EFORE ASSESSING OFFICER AS WELL AS BEFORE LD. CIT(APPEALS ). THEREFORE, SUCH EXPLANATION CANNOT BE ACCEPTED. TH E ADDITION OF RS. RS. 1 LAC IS, THEREFORE, CONFIRMED. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDERS OF AUTHO RITIES BELOW TO THE EXTENT OF RS. 1 LAC AND CONFIRM THE AD DITION OF RS. 1 LAC. 6 11. IN THE RESULT, THIS GROUND OF CROSS OBJECTION I S PARTLY ALLOWED. 12. ON GROUND NO. 6, ASSESSEE CHALLENGED ADDITION O F RS. 70,000/- OUT OF ADDITION OF RS. 1,20,000/- ON ACCOU NT OF CERTAIN UNEXPLAINED VALUABLE ARTICLES. THE ASSESSI NG OFFICER MADE ADDITION OF RS. 1,20,000/- BY OBSERVIN G THAT DURING THE COURSE OF SEARCH ON 07.08.2007 AT THE RE SIDENCE OF THE ASSESSEE, MANY VALUABLE ITEMS LIKE ACS, CD P LAYER, TVS, COMPUTER, SANTRO CAR AND BAJAJ SCOOTER WERE FO UND. THE ASSESSEE EXPLAINED THAT ACS, TVS AND CD PLAYER ARE OLD AND ONLY COMPUTER WAS PURCHASED, FUNDS FOR THE SAME WERE PROVIDED BY HIS MOTHER SMT. RAM DULARI. REPLY OF THE ASSESSEE WAS REJECTED AND ASSESSING OFFICER NOTED T HAT ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE TO SHOW THAT THESE ITEMS WERE OLD. THE ASSESSING OFFI CER, THEREFORE, FOR ACS, TVS, CD PLAYER AND COMPUTER, ES TIMATED THE COST OF INVESTMENT AT RS. 1,20,000/- AND MADE ADDITION. 13. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) EXPLAINING THAT MOST OF THE ITEMS WERE OLD. HOWEVER, LD. CIT(APPEALS) DID NOT ACCEPT CONTENTION OF THE ASSESSEE BECAUSE HOUSEHOLD WITHDRAWALS OF THE ASSES SEE HAVE ALREADY BEEN SUSPECTED AND THAT ASSESSEE DID N OT PROVIDE ANY EVIDENCE OF PURCHASE/ACQUISITION OF THE SE ITEMS IN EARLIER YEARS. THE ADDITION IN PRINCIPLE, WAS CONFIRMED, HOWEVER, CONSIDERING NATURE OF THE ITEM, LD. CIT(APPEALS) HELD THAT SOME ITEMS COULD BE PURCHASE D OVER 7 LONG PERIOD OF TIME AND ACCORDINGLY, REDUCED THE AD DITION TO RS. 70,000/-. 14. AFTER CONSIDERING RIVAL SUBMISSIONS, I DO NOT FIND ANY MERIT IN THE CROSS OBJECTION OF THE ASSESSEE. THE ASSESSEE PLEADED THAT THE ITEMS FOUND DURING THE COURSE OF S EARCH WERE OLD ONE, HOWEVER, NO EVIDENCE IN THIS REGARD H AVE BEEN FILED. THE LD. CIT(APPEALS), EVEN WITHOUT HAV ING ANY EVIDENCE OR MATERIAL, HAS ALREADY REDUCED THE ADDIT ION TO RS. 70,000/-. NO MATERIAL IS PRODUCED BEFORE ME AL SO TO SUPPORT THE CONTENTION, THEREFORE, THIS GROUND OF T HE CROSS OBJECTION HAS NO MERIT, SAME IS ACCORDINGLY DISMISS ED. 15. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 22 ND SEPTEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH