SMT. POONAM AGARWAL, Jaipur V. ITO, Jaipur

ITA 1001/JPR/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5343 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-07-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 16-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RAJ MEHRA J DHK
• Keywords: Gift; Retraction
• Section: 143(3); 142(1); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 1001/JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1998-99 SMT. POONAM AGARWAL PROP. M/S. NEHA MARKETING B-34, BASEMENT KISHORI MARKETING, TILAK MARG, JAIPUR CUKE VS. THE ITO WARD- 6 (1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACFN 7483 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI MANISH AGARWAL FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJ MEHRA, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25/02/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 22 /04/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-II, JAIPUR; DATED 08-09-2011 FOR THE ASSESSM ENT YEAR 1998-99 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS GROSSLY ERRED IN PLACING RELIANCE ON SEC TION 292B OF THE ACT,1961 TREATING THE DEFECTS IN THE NOTICES IS SUED U/S 142(1) AND 143(3) OF THE ACT AS MERELY TECHNICAL WHEN THE DEFECT IN NOTICES CANNOT BE CURED U/S 292B OF THE ACT AS HELD IN CATENA OF CASE. ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 2 1.1 THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE A CT ON THE BASIS OF DEFECTIVE NOTICES ISSUED UU142(1) AND 143(3) OUGHT TO HAVE BEEN CANCELLED BUT THE LD. CIT(A) HELD THE DEF ECTS IN THE NOTICES AS MERELY TECHNICAL WHICH IS NOT JUSTIFIED AND THEREFORE, THE ORDER DESERVES TO BE CANCELLED/ ANNULLED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS FURTHER ERRED IN SUSTAINING ADDITION OF RS. 21,000/- AND RS. 25,000/- IN THE NAMES OF SMT. ARCHANA CHAUR ASIA AND SMT. SEEMA AGARWAL RESPECTIVELY ON ACCOUNT OF GIFTS GIV EN BY THEM SIMPLY FOR THE REASON THAT THEY WERE NOT INCOME TAX ASSESSEE, ALTHOUGH SUFFICIENT EVIDENCES WERE SUBMITTED ABOUT THEIR SOURCE OF INCOME 2.1 THE LD. CIT(A) FURTHER ERRED IN CONFIRMING THE LOAN OF RS. 2,29,000/- OUT OF RS. 2,85,000/- RECEIVED FROM VARIOUS PERSONS MAINLY ON THE GROUND THAT THEY ARE NOT INCOME TAX A SSESSEES OR THEIR INCOME IS NOT SUBSTANTIAL WHEN EVIDENCES OF T HEIR CREDITWORTHINESS WERE FILED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN CONFIRMING RS. 5,000/- ON ACCOU NT OF TRAVELING EXPENSES WHEN COMPLETE VOUCHERS BEARING THE SIGNATU RE OF THE RECIPIENT WERE SUBMITTED DURING THE ASSESSMENT PROC EEDINGS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN CONFIRMING RS. 19,000/- PAID TO SHRI GOVIND KUMAR CHHARYAL AS COMMISSION WHO WORKED AS SALE REP RESENTATIVE AND PLAYED AS IMPORTANT ROLE IN BOOSTING THE SALES OF THE APPELLANT. 2.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, NOTICES U /S 142(1) AND 143(2) OF THE ACT WERE ISSUED BY THE AO ON THE SAME DATE I.E. 12-02-01. IN PROCEEDINGS U/S 143(2) OF THE ACT THE ASSESSMENT YEAR I.E. 1998-88 WAS DULY MENTIONED. HOWEVER BY AN INADVERTENT MISTAKE / OMISSION IN THE NOTICE U/S 142(1) THE ASSESSMENT YEAR REMAINS TO BE MENTIONED. IN ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 3 CONSEQUENT TO THESE NOTICES, THE ASSESSEE FILED THE RETURN OF INCOME AND OTHER INFORMATION BESIDES REGULARLY APPEARED IN THE PROCEEDINGS. THUS THE ASSESSEE WAS FULLY AWARE OF THE CONTENTS OF THE NOT ICE AND LEGAL OBLIGATION ARISING FROM THESE NOTICES. THE ASSESSEE HAS CHALLE NGED THE VALIDITY OF NOTICE ON THE GROUND THAT ASSESSMENT YEAR IS NOT ME NTIONED IN THE NOTICE U/S 142(1) OF THE ACT AND IN NOTICE IT HAS BEEN WRO NGLY MENTIONED THAT THE ASSESSEE HAS FILED THE RETURN ON 13-10-198 WHEREAS THE RETURN IS FILED ON 30-10-1998. THE ASSESSEE CLAIMS THESE MISTAKE TO BE UNRELIABLE AND FETTER TO THE PROCEEDING AND PRAYS THAT THE PROCEEDINGS MA Y BE QUASHED. THE ASSESSEE PLACED FOLLOWING CASE LAWS:- (I) P.N. SASI KUMAR VS. CIT, 170 ITR 80 (KER.) (II) NAGAR CHAND MALAK CHAND VS. CIT, 62 ITR 102 (GUJ) (III) B.K. GOYEE VS. CIT , 62 ITR 109 (CAL.) 2.2 THE LD. DR CONTENDS THAT THERE IS NO FATALITY I N THE MISTAKES AS BOTH THE NOTICES WERE ON THE SAME DATE FOR THE SAME PROC EEDINGS AND IN ONE OF THEM ASSESSMENT YEAR IS CLEARLY MENTIONED. A WRONG MENTIONING OF 13- 10-1998 IN PLACE OF 30-10-1998 IS INADVERTENT MISTA KE OF OVERRIDING. THE LEGISLATURE HAS ENACTED SECTION 292B TO THE EFFECT THAT MINOR MISTAKES CANNOT MAKE THE NOTICE INVALID IN LAW. RELIANCE IS PLACE IN THE CASE OF CIT VS. JAGAT NOVEL EXHIBITORS (P) LTD. (2012) 18 TAXMA NN. COM 138 (DELHI) ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 4 WHICH ARE AFTER CONSIDERING THE CATENA OF JUDGMENTS HAS HELD THAT SUCH MINOR MISTAKES ARE CURABLE U/S 292B OF THE ACT AND ARE NOT FETTERED TO THE PROCEEDINGS. THERE IS NO MERIT IN ASSESSEE'S GROUND . 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE CONTENTION S OF THE LD. DR. BOTH THE NOTICES WERE ON THE SAME DATE AND ON OF THEM CLEARL Y MENTIONED THE ASSESSMENT YEAR AND NOTICES SERVED. THE INTENT AND PURPOSE OF THE ACT IS TO INFORM THE ASSESSEE ABOUT THE NATURE OF THE PROC EEDINGS BEING IN CONNECTION WITH ASSESSMENT YEAR 1998-99. RESPECTFUL LY FOLLOWING THE JUDGEMENT OF HON'BLE DELHI HIGH COURT IN THE CASE O F CIT VS. JAGAT NOVEL EXHIBITORS (P) LTD. (SUPRA), THE ASSESSEE'S G ROUND NO. 1 IS DISMISSED. 3.1 APROPOS ASSESSEE'S GROUND NO. 2 AND 2.1, THE AS SESSEE CONTENDS THAT HAD DISCHARGED THE ONUS IN TERMS OF SECTION 68 OF T HE ACT IN RESPECT OF GIFTS RECEIVED FROM SMT. SEEMA AGARWAL AMOUNTING TO RS. 25,000/- AND FROM SMT. ARCHANA AGARWAL AMOUNTING TO RS. 21,000/- . THEREFORE, NO ADDITION CAN BE MADE U/S 68 OF THE ACT IN THIS BEHA LF. SIMILARLY GROUND NO. 2.1 AS TO CONFIRMING THE LOAN OF RS. 2,85,000/- FROM VARIOUS PERSONS. 3.2 THE LD. COUNSEL FOR THE ASSESSEE APROPOS GROU ND NO. 1 IN RESPECT OF SMT. SEEMA AGARWAL AMOUNTING TO RS. 25,000/-AND IN RESPECT OF SMT. ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 5 ARCHANA CHAURASIA AMOUNTING TO RS. 21,000/- I.E. TO TALING TO RS. 46,000/-. THE ASSESSEE HAS DISCHARGED ITS ONUS IN RESPECT OF UNSECURED LOAN OF RS. 2.29 LACS. NAME OF PERSON AMOUNT (RS.) SHRI PANKAJ SHARMA RS. 19,000 SHRI BHARTI SINGH RS. 18,000 SHRI KISHORE KAPOOR RS. 18,000 SHRI VIKAS MISHRA RS. 19,000 SHRI A.K. KHAN RS. 17,500 SHRI PRAKASH SHARMA RS. 17,500 SMT. SEEMA AGARWAL RS. 19,000 ATUAL AGARWAL RS. 80,523 3.4 BY WRITTEN SUBMISSION THE ASSESSEE HAS PUT FORT H HER CASE THAT IDENTITY AND CREDITWORTHINESS OF THESE PARTIES HAVE BEEN ESTABLISHED BY THE ASSESSEE. 3.5 THE LD. DR ON THE OTHER HAND VEHEMENTLY CONTEND S THAT ASSESSEE HAS FAILED TO ESTABLISH ANY INGREDIENTS ABOUT THE C REDITWORTHINESS OF THESE CASH CREDITORS WHICH IS CLEARLY EMERGING FROM THE O RDER OF THE LD. CIT(A). 4.2 AND 4.3 ACCORDINGLY ON APPRECIATION OF THE MATERIAL ON RECORD, THE AUTHORITIES BELOW CONCURREN TLY FOUND THAT THE ASSESSEE HAD NOT BEEN ABLE TO SATISFY ABOUT THE CREDITWORTHINESS OF THE CREDITORS AND CONSEQUENTLY THE GENUINENESS O F THE TRANSACTION. RESPECTFULLY FOLLOWING THE ABOVE DECIS ION AND FACTS OF THE PRESENT CASE, OUT OF CASH LOAN OF RS. 2,85,000/ - TREATED AS UNEXPLAINED BY THE AO, THE ADDITION OF RS. 2,29,000 /- IS CONFIRMED. THE ADDITION OF RS. 56,000/- ON ACCOUNT OF LOANS R ECEIVED FROM SHRI SURESH CHAND AGARWAL, SHRI UDAI SINGH AND SMT. LATA AGARWAL IS DELETED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 6 3.6 IN THIS CASE, THE SURVEY PROCEEDINGS WERE CONDU CTED IN THE PREMISES OF THE ASSESSEE ON 12-01-2000. DURING THE COURSE OF SURVEY, INCRIMINATING MATERIALS WAS FOUND. HOWEVER, THE ASSESSEE DURING S URVEY EXPRESSED HER IGNORANCE AND NO KNOWLEDGE ABOUT THE BUSINESS WHICH IS CLAIMED BY HER AS PROPRIETORSHIP BUSINESS. SHE ALSO STATED THAT EN TIRE BUSINESS IS LOOKED AFTER BY HER HUSBAND SHRI ATUL AGARWAL AND HIS ELDE R BROTHER SHRI RAJIV AGARWAL. ON ASSESSEE'S INFORMATION, THE STATEMENT O F HER HUSBAND SHRI ATUAL AGARWAL WAS RECORDED ON 12-01-2001 WHO CONTEN DED THAT COMPLETE INFORMATION IS WITH SHRI RAJIV AGARWAL. IN ANSWER T O QUESTION NO. 26, SHRI RAJIV AGARWAL OFFERED THE INFORMATION FOR OWNING TH E AMOUNT OF RS. 2.02 LACS FOR TAXATION. THIS FACT HAS NOT BEEN DISPUTED. NOW THE ASSESSEE IS CHALLENGING THAT HER HUSBAND AND HIS BROTHER CANNOT BE USED AGAINST THE ASSESSEE. THUS THE ASSESSEE HAS BEEN PLAYING THE GA ME OF HIDE AND SEEKS WITH THE DEPARTMENT. THIS IS THE BURDEN ON THE ASSE SSEE. ON INFORMATION DURING THE COURSE OF SURVEY, THE ASSESSEE HERSELF C ONTENDED THAT HAS NO IDEA ABOUT THE BUSINESS WHICH IS CARRIED ON BY HER HUSBAND AND HIS BROTHER. THEREFORE, THE DENIAL OF RETRACTION AND CH ALLENGE TO THE LEGALITY OF THE ASSESSMENT OF THE HUSBAND AND HIS BROTHER HAS N O FORCE. TECHNICAL ROUTES OF THE EVIDENCE ARE NOT APPLICABLE TO TAX PR OCEEDINGS. ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 7 3.7 THE LD. CIT(A) NOT ONLY CONSIDERED THE ASSESSME NT RECORD BUT ALSO BROUGHT FOR REMAND REPORT AND AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES AND ASSESSEE'S CONTENTION GAVE PART R ELIEF AND SUSTAINED THESE ADDITIONS. 4.1 IN RESPECT OF GROUND NO. 2 AND 4 THE ORDER OF T HE LD. CIT(A) WAS RELIED ON BY THE LD. DR. IN RESPECT OF TRAVELING EX PENSES, THE LD. DR RELIED ON THE ORDER OF THE LD. CIT(A) AND CONTENDS THAT TH E ASSESSEE COULD NOT FURNISH VOUCHES OF TRAVELING EXPENSES. SIMILARLY TH E GROUND NO. 4, I.E. COMMISSION OF RS. 19,000/-, THE ASSESSEE FAILED TO GIVE ANY EVIDENCE TO SUGGEST THAT SAME WAS PAID TO SHRI GOVIND KUMAR AGA RWAL FOR RENDERING SERVICE WHICH LED TO INCREASE THE SALES. IN THE ABS ENCE OF ANY EVIDENCE,, THE LD. CIT(A) RELYING ON THE DECISION OF HON'BLE D ELHI HIGH COURT IN THE CASE OF SCHNEIDER ELECTRIC INDIA LTD. 304 ITR 360 D ISALLOWED THE COMMISSION. 4.2 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE CONTENTION S OF THE LD. DR . APROPOS GROUND NO. 2.1 AND 2.2, THE MATERIAL AVAILA BLE ON RECORD INDICATES THAT ASSESSEE COULD NOT DISCHARGE HER ONU S IN TERMS OF SECTION 68 DESPITE GIVING A CHANCE IN REMAND PROCEEDING. SI NCE THE ASSESSEE ITA NO.1001/JP/2011 SMT. POONAM AGARWAL VS. ITO,WARD- 6(1), J AIPUR . 8 FAILED TO DISCHARGE THE ONUS, THE ADDITIONS RETAINE D BY THE LD. CIT(A) U/S 68 ARE UPHELD. 5.1 APROPOS GROUND NO. 3 AND 4, THE ASSESSEE FAILED TO SUBMIT THE VOUCHERS AND NECESSARY DOCUMENTS IN RESPECT OF TRAV ELING AND COMMISSION EXPENSES, THE SAME HAVE RIGHTLY BEEN DIS ALLOWED BY THE LD. CIT(A). THUS GROUND NO. 3 AND 4 OF THE ASSESSEE ARE DISMISSED. 6.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED ORDER PRONOUNCED IN THE OPEN COURT ON 22 /04/20 16. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22/04/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO:- 1. VIHYKFKHZ@ THE APPELLANT- SMT. POONAM AGARWAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 6(1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 1001/JP/2011) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR