SMT. MALTI KHANDELWAL, JAIPUR V. INCOME TAX OFFICER, WARD-4-2, JAIPUR

ITA 1046/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6273 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANCHAL MEENA ADD
• Assessee Lawyers: DILEEP SHIVPURI
• Keywords: Unexplained investment; Income from undisclosed sources; Competent authority; Assessment record; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 142(1); 201; 143(2); 48; 73; 13; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1046/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2013-14 SMT. MALTI KHANDELWAL 8/175, VIDHYADHAR NAGAR, JAIPUR CUKE VS. INCOME TAX OFFICER WARD4(2), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AOBPK3921P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. DILEEP SHIVPURI (ADVOCATE) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (ADD. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 25/08/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 21/09/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)- 02, JAIPUR DATED 28.06.2019 WHEREIN THE ASSESSEE H AS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, LD. AO HAS GROSSLY ERRED IN NOT PROVIDING THE REASONS RECORDE D FOR REOPENING THE CASE OF THE ASSESSEE THUS THE CONSEQUENT REASSESSM ENT COMPLETED IS BAD IN LAW AND DESERVES TO BE DELETED. 2. THE LD. CIT(A) ERRED IN PARTLY UPHOLDING THE ORD ER OF THE AO, BY ADDING BACK RS. 7,14,556 IN THE INCOME CONSIDERING THE SAME AS UNEXPLAINED INVESTMENT. 3. THAT THE CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE LEVY OF INTEREST U/S 234B. ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 2 2. FURTHER, DURING THE COURSE OF HEARING, THE ASSES SEE HAS MOVED AN APPLICATION SEEKING PERMISSION TO RAISE THE FOLLOWI NG ADDITIONAL GROUNDS OF APPEAL: 4. THAT THE SANCTION FOR ISSUE OF NOTICE U/S 148 OF THE I.T. ACT GIVEN BY THE JOINT COMMISSIONER OF INCOME-TAX, RANGE-4, JAIPUR WAS WITHOUT APPLICATION OF MIND, AND GIVEN IN A MECHAN ICAL MANNER. HENCE, THE REASSESSMENT PROCEEDINGS INITIATED WITHOUT PRO PER AND VALID SANCTION ARE INVALID AND BAD IN THE EYES OF LAW. 5. THAT THE REOPENING OF THE ASSESSMENT BY ISSUE O F NOTICE U/S 147/148 WAS BAD IN LAW AS THERE WAS NO REASON TO B ELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. 3. IT WAS SUBMITTED THAT THESE TWO ADDITIONAL GROUN DS OF APPEAL GOES TO THE ROOT OF THE MATTER, AND QUESTION THE VERY ASSUM PTION OF JURISDICTION U/S 148 OF THE ACT AND ACCORDINGLY THE SAME MAY KINDLY BE ACCEPTED AND ADJUDICATED ON MERITS. THE LD DR IS HEARD WHO HAS O BJECTED TO ADMISSION OF THESE ADDITIONAL GROUNDS OF APPEAL AND SUBMITTED TH AT THE ASSESSEE HAS NOT TAKEN THESE GROUNDS OF APPEAL BEFORE THE LD CIT(A) AND THEREFORE, AT THIS STAGE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE SH OULD NOT BE PERMITTED TO RAISE THESE GROUNDS OF APPEAL. 4. HEARD BOTH THE PARTIES. WE FIND THAT THESE TWO G ROUNDS OF APPEAL THOUGH NOT TAKEN BEFORE THE LD CIT(A) ARE LEGAL GRO UNDS OF APPEAL AND THE SAME CAN BE TAKEN FOR THE FIRST TIME BEFORE THE TRI BUNAL. HENCE, THESE GROUNDS OF APPEAL ARE ADMITTED FOR ADJUDICATION ON MERITS. 5. IN GROUND NO. 1, THE ASSESSEE HAS CHALLENGED TH E ACTION OF THE ASSESSING OFFICER IN NON-SUPPLY OF REASONS RECORDED FOR ISSUA NCE OF NOTICE U/S 148 OF THE ACT. ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 3 6. DURING THE COURSE OF HEARING, THE LD AR SUBMITTE D THAT THIS ISSUE WAS BROUGHT TO THE NOTICE OF LD. CIT(A) WHICH FINDS MEN TION AT PARA 2.2 OF HIS ORDER. HOWEVER, THE LD. CIT(A) HAS NOT ADJUDICATED THE SAID ISSUE. IT WAS SUBMITTED THAT IT IS A TRITE LAW THAT NON-SUPPLY OF REASONS RECORDED FOR ISSUANCE OF NOTICE U/S 148 VITIATES THE SAID NOTICE AND RENDERS THE CONSEQUENTIAL PROCEEDINGS NULL AND VOID AND IN SUPP ORT, RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF PR. CIT VS. V. RAMAIAH [2019] 103 TAXMANN.COM 201 (KARNATAKA). IT WAS SUBMITTED THAT THE SLP FILED BY THE DEPARTMENT HAS SINCE BEEN DISM ISSED BY THE HONBLE SUPREME HIGH COURT AS REPORTED IN 262 TAXMAN 16 (SC ). IT WAS ACCORDINGLY SUBMITTED THAT IN VIEW OF THE SETTLED POSITION OF L AW THAT REASONS FOR REOPENING OF THE ASSESSMENT HAVE TO BE COMMUNICATED TO THE ASSESSEE, THE NON-COMMUNICATION THEREOF RENDERS THE ISSUE OF NOTI CE U/S 148 WITHOUT JURISDICTION, HENCE, LIABLE TO BE QUASHED. 7. PER CONTRA, THE LD. DR SUBMITTED THAT THE CONTEN TION OF THE ASSESSEE HAS NO MERITS AS DURING THE ENTIRE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSEE NEVER SOUGHT AND ASKED FOR COPY OF REASONS SO RECORDED. IT WAS SUBMITTED THAT THE ASSESSEE HAS ALSO NOT SOUGHT COP Y OF REASONS EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) AND HAS NOT RAISED THESE ISSUES BEFORE THE LD. CIT(A). IT WAS SUBMITTE D THAT THE ASSESSEE FOR THE FIRST TIME APPLIED FOR THE COPY OF THE REASONS ON 1 4.11.2019 I.E. AFTER PASSING OF APPELLATE ORDER BY LD. CIT(A), JAIPUR AND THE SA ME WAS DULY PROVIDED BY THE AO TO HER ON 18.12.2019. IT WAS SUBMITTED THAT THIS FACT IS EVIDENT FROM THE ASSESSMENT RECORDS AND IS ALSO ACCEPTED BY THE ASSESSEE IN HER SUBMISSIONS FILED BEFORE THE TRIBUNAL. IT WAS ACCOR DINGLY SUBMITTED THAT THE GROUND SO TAKEN HAS NO SUBSTANCE AND THE SAME SHOUL D BE REJECTED. IN SUPPORT, A COPY OF REPORT RECEIVED FROM ITO, WARD-4 (2), JAIPUR DATED 30.06.2020, ALREADY SHARED WITH THE LD AR OF THE AS SESSEE, WAS PLACED ON RECORD. ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 4 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, WE FIND THAT THE NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 22.03.2017 AND IN RESPONSE TO TH E SAID NOTICE, THE ASSESSEE FILED HER RETURN OF INCOME ON 17.04.2017. THEREAFTER, NOTICES UNDER SECTION 143(2) AND SECTION 142(1) WERE ISSUED AND T HE LD A/R ON BEHALF OF THE ASSESSEE ATTENDED TO THE PROCEEDINGS AND FILED WRITTEN SUBMISSIONS. THERE IS NOTHING ON RECORD AND WHICH HAS BEEN BROUG HT TO OUR NOTICE THAT IN THE ENTIRE ASSESSMENT PROCEEDINGS, THE ASSESSEE OBJ ECTED TO THE ISSUANCE OF NOTICE U/S 148 AND HAS SOUGHT COPY OF THE REASONS S O RECORDED FOR THE REOPENING THE ASSESSMENT PROCEEDINGS. THEREFORE, W E FIND THAT THERE IS NO PREJUDICE WHICH IS CAUSED TO THE ASSESSEE IN TERMS OF DENIAL OF ANY OPPORTUNITY TO THE ASSESSEE TO OBJECT TO THE REASSE SSMENT PROCEEDINGS BY NON-SUPPLY OF THE REASONS SO RECORDED BY THE AO WHE RE THE SAME WERE NEVER ASKED FOR BY THE ASSESSEE AT FIRST PLACE. TH ERE IS THUS NO VIOLATION OF THE DIRECTIVES OF HONBLE SUPREME COURT AS LAID DOW N IN THE CASE OF GKN DRIVESHAFT REPORTED IN 259 ITR 19 WHEREIN IT WAS HE LD THAT RECORDED REASONS MUST BE FURNISHED TO THE ASSESSEE WHEN THE ASSESSEE SOUGHT FOR THE SAID REASONS. THE DECISION OF THE HONBLE KARNATAKA HIG H COURT IN CASE OF CIT VS V. RAMAIAH (SUPRA) IS DISTINGUISHABLE ON FACTS AS I N THAT CASE, THE ASSESSEE HAD TWICE MADE A REQUEST TO THE AO, BUT DESPITE THE SPECIFIC REQUESTS, THE AO DID NOT COMPLY WITH THE SAID REQUEST AND SUPPLIE D THE REASONS TO THE ASSESSEE, AND THE REASONS WERE SUPPLIED FOR THE FIR ST TIME BEFORE THE TRIBUNAL. IN CONTEXT OF SAID FACTS, THE HONBLE KAR NATAKA HIGH COURT HELD THAT THE AO LACKED THE JURISDICTION IN INITIATING THE RE ASSESSMENT PROCEEDINGS AND THEREFORE, THE IMPUGNED REASSESSMENT ORDER WAS QUAS HED. IN THE INSTANT CASE, IT IS AN ADMITTED POSITION THAT THE ASSESSEE FOR THE FIRST TIME APPLIED FOR THE COPY OF THE REASONS ON 14.11.2019 I.E. AFTER PA SSING OF APPELLATE ORDER BY LD. CIT(A), JAIPUR AND THE SAME WAS PROVIDED BY THE AO TO HER ON 18.12.2019 AND THEREFORE, IT IS CRYSTAL CLEAR ON FA CTS THAT THE ASSESSEE NEVER ASKED FOR THE COPY OF THE REASONS DURING THE ENTIRE ASSESSMENT AND APPELLATE PROCEEDINGS, AND THEREFORE, THERE WAS NO OBLIGATION AS WELL AS OCCASION FOR ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 5 THE AO TO SUPPLY COPY OF THE REASONS TO THE ASSESSE E. IN THE RESULT, THE GROUND SO TAKEN BY THE ASSESSEE IS HEREBY DISMISSED . 9. NOW, WE WILL TAKE UP GROUNDS OF APPEAL NO. 4 AND 5 OF ASSESSEES APPEAL. 10. IN GROUND NO. 4, THE ASSESSEE HAS CHALLENGED TH E ACTION OF THE JCIT, RANGE-04, JAIPUR IN GIVING THE APPROVAL AND SANCTIO N BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT. IT WAS SUBMITTED BY THE LD AR THAT FROM THE PERUSAL OF THE REASONS RECORDED, IT SHOWS THAT THE APPROVAL GIVEN BY THE COMPETENT AUTHORITY, BEING THE JCIT, RANGE-04, JAIP UR IS MECHANICAL WITHOUT APPLICATION OF MIND. IT WAS SUBMITTED THAT JCIT, RA NGE-04, JAIPUR DID NOT CARRY OUT ANY VERIFICATION OR CHECKING AT HER END, HENCE, SHE DID NOT FORM AN INDEPENDENT OPINION AS REQUIRED BY LAW. IT WAS SUBM ITTED THAT IN THE PRESENT CASE, THE SANCTIONING AUTHORITY HAS ONLY SAID YES WHICH IS INDICATIVE OF THE TOTAL LACK OF APPLICATION OF MIND AND APPROVAL SO G IVEN MECHANICALLY DESERVES TO BE QUASHED. IN SUPPORT, RELIANCE WAS PLACED ON T HE HONBLE SUPREME COURT DECISION IN CASE OF CHHUGAMAL RAJPAL VS. S.P. CHALIHA [1971] 79 ITR 603 (SC) WHEREIN THE HONBLE SUPREME COURT HELD THA T SANCTIONING AUTHORITY CANNOT GRANT APPROVAL MECHANICALLY, IT HAS TO APPLY ITS MIND TO THE RELEVANT FACTS AND TO THE DOCUMENTS BEFORE IT ACCORDS SANCTI ON. FURTHER, RELIANCE WAS PLACED ON THE HONBLE MADHYA PRADESH HIGH COURT DEC ISION IN CASE OF CIT VS. S. GOYANKA LIME & CHEMICALS LTD. [2015] 231 TAXMAN 73 (MP). 11. PER CONTRA, THE LD. DR SUBMITTED THAT THE ASSES SING OFFICER HAS SUBMITTED A PROPOSAL FOR INITIATING ACTION U/S 147 TO THE JCIT, RANGE-04, JAIPUR ON 14.03.2017 AND AFTER EXAMINING THE PROPOS AL ALONG WITH REPORT OF THE ITO (I & CI)-II, JAIPUR ALONG WITH DETAILS/DOCU MENTS FURNISHED BY THE ASSESSEE BEFORE THE ITO (I & CI)-II, JAIPUR, SHE HA D RECORDED HER SATISFACTION AND ACCORDED HER APPROVAL ON 15.03.2017 WHICH IS EV IDENT FROM THE ASSESSMENT RECORDS. IT WAS ACCORDINGLY SUBMITTED TH AT THE GROUND SO TAKEN ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 6 BY THE ASSESSEE THAT THE SANCTION HAS BEEN GRANTED BY THE JCIT WITHOUT APPLICATION OF MIND AND IN A MECHANICAL MANNER IS N OT FACTUALLY CORRECT AND THEREFORE, THE SAME SHOULD BE DISMISSED. 12. IN GROUND NO. 5, THE ASSESSEE HAS CHALLENGED TH E ACTION OF THE ASSESSING OFFICER THAT THE REOPENING OF THE ASSESSM ENT BY ISSUANCE OF NOTICE U/S 147/148 WAS BAD IN LAW AS THERE WAS NO REASON T O BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. IT WAS SU BMITTED THAT THE REASONS SO RECORDED BY THE ASSESSING OFFICER ARE BA SED TOTALLY ON THE INFORMATION PASSED ON TO THE ASSESSING OFFICER BY T HE ITO ( I & CI)-II, JAIPUR AS APPARENT FROM THE REASONS SO RECORDED. IT WAS SU BMITTED THAT THE ASSESSING OFFICER HAS NOT SPECIFIED IN HIS REASONS AS TO HOW HE HAS CONCLUDED THAT THE ASSESSEE HAS FAILED TO SHOW VALID SOURCE O F INVESTMENT. THE REPLY FILED BY THE ASSESSEES CA BEFORE THE ITO (I &CI)-I I, JAIPUR HAS STATED CLEARLY THAT SHE IS A REGULAR INCOME TAX ASSESSEE FOR MORE THAN 10 YEARS AND THIS INVESTMENT WAS MADE BY THE ASSESSEE THROUGH HER SAV INGS AND PIN MONEY OF MORE THAN THIRTY YEARS. IT WAS SUBMITTED THAT NO FU RTHER QUERY WAS MADE, NO FURTHER VERIFICATION WAS MADE, AND NO ATTEMPT WAS M ADE TO COME TO THE CONCLUSION THAT THE SOURCE EXPLAINED WAS NOT SATISF ACTORY. IT WAS ACCORDINGLY SUBMITTED THAT THE CONCLUSION THAT INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT HAS NO BASIS, NO FOUNDATION, NO REASONAB LE LINK TO THE INFORMATION SO RECEIVED BY THE ASSESSING OFFICER. I T WAS SUBMITTED THAT IT IS A CLASSIC CASE OF BORROWED SATISFACTION WHERE THE A O HAS NOT CONDUCTED ANY INQUIRY TO FIND OUT WHETHER THE REPORT RECEIVED BY HIM FROM ITO ( I & CI)-II, JAIPUR WAS CORRECT OR NOT, AND TO VERIFY HOW HE HAD COME TO THE CONCLUSION THAT IT WAS A FIT CASE FOR ISSUANCE OF NOTICE U/S 1 48 OF THE ACT. IT WAS SUBMITTED THAT A CASE CANNOT BE REOPENED FOR THE PU RPOSE OF VERIFICATION OF THE FACTS AS STATED IN THE REPLY FILED BY THE ASSES SEE. THE ASSESSEE, THROUGH HER CA, HAD GIVEN A PARTICULAR SOURCE AND IT MAY BE TRUE THAT THE ITO ( I & CI)-II, JAIPUR AND/OR THE AO WOULD HAVE A DOUBT ABO UT THE CORRECTNESS OF THE SOURCE OF INVESTMENT, BUT AN ASSESSMENT CANNOT BE R EOPENED ON THE BASIS OF ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 7 A DOUBT. THERE IS NOTHING ON RECORD TO SHOW WHY THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND TO BE INCORRECT. IN SUPPORT, RELIANCE WAS PLACED ON VARIOUS COURT AND TRIBUNAL DECISIONS AND IT WAS ACC ORDINGLY SUBMITTED THAT THE ACTION OF THE ASSESSING OFFICER IN RELYING TOTA LLY ON THE REPORT ITO (I & CI)-II, JAIPUR WITHOUT INDEPENDENT VERIFICATION OF FACTS, VITIATES THE ISSUE OF NOTICE U/S 147/148 AND THE SUBSEQUENT ASSESSMENT OR DER PASSED BY THE AO AND ASSESSMENT ORDER MAY KINDLY BE QUASHED AND SET ASIDE. 13. PER CONTRA, THE LD. DR SUBMITTED THAT THE ASSES SING OFFICER HAD EXAMINED DOCUMENTS/EVIDENCES WHICH WERE FURNISHED B Y THE ASSESSEE BEFORE THE ITO (I & CI)-II, JAIPUR AND ALSO THE REP ORT OF THE ITO ( I & CI)-II, JAIPUR AND AFTER EXAMINING THE SAME, THE ASSESSING OFFICER HAD RECORDED REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSME NT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE KNEW THAT THE ASSESSING OFFICER HAD SUFFICIENT REASONS FOR INITIATING PROCEEDINGS U/S 147 WHICH IS WHY SHE HAD CHANGED HER STAND DURING THE ASSESSMENT PROCEEDINGS FROM THE ST AND TAKEN BEFORE THE ITO (I & CI)-II, JAIPUR. BEFORE THE ITO (I & CI)-II , JAIPUR, SHE HAD STATED THAT INVESTMENTS WERE MADE FROM HER SAVINGS AND PIN MONE Y OF MORE THAN THIRTY YEARS AND LATER ON, DURING THE ASSESSMENT PROCEEDIN GS, SHE STATED THAT THE INVESTMENTS WERE MADE OUT OF SAVINGS, PIN MONEY AND BORROWINGS. THEREFORE, THE ASSESSEES GROUND OF APPEAL THAT THE RE IS NO REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IS WITHOUT MERIT S AND SAME MAY KINDLY BE DISMISSED. SHE ACCORDINGLY SUPPORTED THE FINDING S OF THE LOWER AUTHORITIES. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, THE REASO NS RECORDED BY THE ASSESSING OFFICER BEFORE ISSUANCE OF NOTICE U/S 148 READ AS UNDER:- ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 8 THE ASSESSEE FILED HER RETURN OF INCOME DECLARING INCOME OF RS. 1,92,870/- ON 22.02.2014. THE CASE WAS PROCESSED/AS SESSED U/S 143(1). IN THIS CASE, THE ITO (I & CI)-II, JAIPUR HAS CARR IED OUT CERTAIN INVESTIGATION REGARDING INVESTMENT MADE BY THE ASSE SSEE IN PURCHASE OF IMMOVABLE PROPERTY. DURING THE INVESTIGATION, IT HAS BEEN FOUND THAT THE ASSESSEE HAS MADE INVESTMENT OF RS. 15,40, 892/- IN PURCHASE OF AGRICULTURAL LAND. DURING THE INVESTIGATION THE ASSESSEE COULD NOT SHOWN VALID SOURCE OF INVESTMENT OF RS. 15,40,892/- MADE BY HER. THUS, THE INVESTMENT OF RS. 15,40,892/- REMAINED UN EXPLAINED. THE ITO (I & CI)-II, JAIPUR HAS SEND THE REPORT AL ONG WITH DETAILS SUBMITTED BY THE ASSESSEE VIDE LETTER NO. 8 01 DATED 20.12.2016. ON GOING THROUGH THE REPORT, IT IS CLEA R THAT THE ASSESSEE HAS FAILED TO SHOW VALID SOURCE OF INVESTMENT OF RS . 15,40,892/- IN IMMOVABLE PROPERTY. THUS, I HAVE REASON TO BELIEVE THAT THE ASSESSEE H AS MADE INVESTMENT OF RS. 15,40,892/- IN PURCHASE OF PROPER TY OUT OF HER UNACCOUNTED INCOME AND SHE HAS FAILED TO DISCLOSE F ULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. LOOKING TO THE FACTS DISCUSSED ABOVE, I HAVE REASO NS TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 15,40,892/- HAS ES CAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT 1961. 15. ON PERUSAL OF THE REASONS SO RECORDED BY THE AO , WE FIND THAT THE AO IS IN RECEIPT OF REPORT FROM THE ITO(I&CI) ALONG WI TH SUBMISSION FILED BY THE ASSESSEE AS WELL AS CEASED OF THE FACT THAT THE ASS ESSEE HAD FILED HER RETURN OF INCOME AND ON EXAMINATION OF THE REPORT OF ITO(I &CI), SUBMISSION AS WELL AS RETURN FILED BY THE ASSESSEE WHERE SHE HAS REPOR TED INCOME TO THE TUNE OF RS 1,92,870/-, HE HAS STATED THAT HE HAS REASON TO BELIEVE THAT THE ASSESSEE HAS MADE INVESTMENT OF RS. 15,40,892/- IN PURCHASE OF PROPERTY OUT OF HER UNACCOUNTED INCOME AND SHE HAS FAILED TO DISCLOSE F ULLY AND TRULY ALL MATERIAL ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 9 FACTS NECESSARY FOR ASSESSMENT. WE THEREFORE FIND T HAT IT IS NOT MERELY BASIS THE RECEIPT OF THE REPORT OF ITO(I&CI) THAT HE HAS RECORDED THE REASONS RATHER AFTER RECEIPT OF THE SAID REPORT WHICH IS CL EARLY A TANGIBLE PIECE OF INFORMATION BROUGHT TO HIS NOTICE, HE HAS EXAMINED THE RETURN OF INCOME OF THE ASSESSEE AS WELL AS OTHER DOCUMENTS AND SUBMISS ION FILED BY THE ASSESSEE AND THEREAFTER, HAS ARRIVED AT HIS OWN IND EPENDENT VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT AND THEREFORE, IT CAN NOT BE HELD TO BE A CASE OF BORROWED SATISFACTION. WHERE THE INFORMATIO N IN THE POSSESSION OF THE AO SHOWS THAT THE ASSESSEE HAS MADE INVESTMENT IN A N IMMOVEABLE PROPERTY TO THE TUNE OF RS 15,40,892/-, A FACT WHIC H IS NOT DENIED BY THE ASSESSEE AND WHERE THE RESPONSE OF THE ASSESSEE IS GENERIC IN THE SENSE THAT SHE IS AN INCOME TAX ASSESSEE FOR MORE THAN TEN YEA RS (WITHOUT SPECIFYING THE QUANTUM OF INCOME SO DISCLOSED) AND HAS REPORTE D A MEAGER INCOME TO THE TUNE OF RS 1,92,870/- IN HER RETURN OF INCOME F OR THE IMPUGNED ASSESSMENT YEAR, AND INVESTMENT WAS MADE OUT OF HER PAST SAVINGS AND PIN MONEY INSTEAD OF SPECIFICALLY IDENTIFYING THE SOURC E OF SUCH INVESTMENT AND MORE SO, THE AVAILABILITY OF FUNDS AT THE RELEVANT POINT IN TIME OF MAKING THE INVESTMENT, WE FIND THAT THE SOURCE OF SUCH INVESTM ENT IS CLEARLY NOT SATISFACTORILY EXPLAINED TO THE SATISFACTION OF THE AO AND HE IS WELL WITHIN HIS RIGHT TO PRIMA FACIE HOLD THAT SOURCE OF SUCH INVES TMENT TO THE TUNE OF RS 15,40,892/- REMAIN UNEXPLAINED AND CONSEQUENTLY, THE INCOME TO THAT EXTENT HAS ESCAPED INVESTMENT. WE THEREFORE DONOT S EE ANY INFIRMITY IN THE ACTION OF THE AO IN ACQUIRING JURISDICTION U/S 147 BY ISSUANCE OF NOTICE U/S 148 OF THE ACT AS THE INITIAL SATISFACTION ABOUT TH E ESCAPEMENT OF INCOME, HAS BEEN RIGHTLY RECORDED BY THE AO. FURTHER, UNDER SE CTION 151, IT REQUIRES THE SATISFACTION OF THE JOINT COMMISSIONER OR THE COMMI SSIONER, AS THE CASE MAY BE, BEFORE ISSUANCE OF SUCH NOTICE, SUCH SATISFACTI ON MUST ALSO BE ONLY ON THE BASIS OF THE REASONS RECORDED BY THE ASSESSING OFFI CER AND NOT DE HORS IT. IN OTHER WORDS, THE SATISFACTION RECORDED BY THE ASSES SING OFFICER MUST BE ENDORSED BY THE HIGHER APPROVING AUTHORITY BEFORE T HE ASSESSING OFFICER ASSUMES THE JURISDICTION. IN THE INSTANT CASE, WE F IND THAT THE AO HAD MOVED ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 10 A PROPOSAL SEEKING SANCTION AND APPROVAL OF THE JCI T AND SUCH PROPOSAL HAS BEEN SENT ALONG WITH THE ASSESSMENT AND OTHER RECOR DS AS STATED BY THE AO IN HIS PROPOSAL LETTER DATED 10.03.2017. THEREAFTE R, ON REVIEW OF THE REASONS SO RECORDED BY THE AO AND PERUSAL OF THE ASSESSMENT AND OTHER RECORDS SO SUBMITTED BY THE AO, THE JCIT HAS RECORDED HIS SATI SFACTION AND ENDORSED THE SATISFACTION SO RECORDED BY THE AO AND HELD THA T IT IS A FIT CASE FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT. WE THEREFOR E FIND THAT THE LD JCIT HAS GONE THROUGH THE REASONING AND THE SATISFACTION SO RECORDED BY THE AO AND FINDING THE SAME TO BE IN CONFORMITY WITH THE PROVI SIONS OF LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE, HAS ACCORDED HIS SAN CTION. WE THEREFORE FIND THAT IT IS NOT A CASE WHERE THE APPROVAL HAS BEEN G RANTED MECHANICALLY OR WITHOUT APPLICATION OF MIND, RATHER HE HAS GONE THR OUGH THE AOS PROPOSAL, HIS REASONING SO RECORDED IN THE PROPOSAL, THE ASSE SSMENT AND OTHER RECORDS AND FINDING THE REASONS SO RECORDED TO BE IN CONFOR MITY WITH THE ASSESSMENT AND OTHER RECORDS HAS ACCORDED HIS APPROVAL. BEFORE PARTING, WE ALSO STATE THAT WE HAVE GONE THROUGH THE VARIOUS AUTHORITIES Q UOTED BY THE LD AR AT THE BAR AND FIND THAT EACH OF THESE AUTHORITIES HAVE BE EN RENDERED IN THE PECULIAR FACTS AND CIRCUMSTANCES OF A PARTICULAR CA SE AND THEREFORE, STAND DISTINGUISHABLE AND DOESNT SUPPORT THE CASE OF THE ASSESSEE. IN THE RESULT, WE ARE UNABLE TO ACCEDE TO THE CONTENTIONS ADVANCED BY THE LD AR AND THE GROUNDS OF APPEAL NO 4 AND 5 ARE HEREBY DISMISSED. 16. NOW, COMING TO GROUND NO. 2 OF THE ASSESSEES APPEAL, WHERE THE ASSESSEE HAS CHALLENGED THE SUSTENANCE OF ADDITION OF RS. 9,14,556/- BY THE LD. CIT(A). 17. IN THIS REGARD, THE LD. AR SUBMITTED THAT THE A SSESSEE HAD SOUGHT TO EXPLAIN CASH IN HAND OF RS. 9,41,556/- AS BEING THE OPENING BALANCE OF CASH IN HAND OF RS. 8,38,311/- AVAILABLE TO HER AS ON 01 .04.2012. ADDED TO THAT ARE BANK WITHDRAWALS OF RS. 1,84,000/- AND CASH ACC RUAL FROM BUSINESS OF RS. 92,170/-, LESS DRAWINGS OF RS. 95,000/-, AND T HE ASSESSEE HAD CASH AT ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 11 HAND OF RS. 10,19,481/-, ENOUGH TO EXPLAIN THE CASH PAID TOWARDS THE PURCHASE OF LAND. THE GENERATION OF CASH IN HAND HA S BEEN EXPLAINED IN DETAIL AT PAGE 6, 7 & 8 OF THE IMPUGNED APPELLATE O RDER. THE LD CIT(A) HAS INDEED ACCEPTED IN HER ORDER THAT THE ASSESSEE HAD CASH IN HAND WITH HER, BUT HAS RESTRICTED IT TO RS. 2,00,000/- OR RS. 20,0 00/- PER ANNUM, FOR A PERIOD OF 10 YEARS. THERE IS NOTHING IN THE ORDER TO BACK THE ESTIMATE MADE BY THE CIT(A) AND THE PERIOD CHOSEN BY HER. SHE HAS ALSO N OT REBUTTED THE CLAIM OF THE ASSESSEE THAT SHE IS KEEPING WITH HER, CASH GIV EN TO HER BY HER HUSBAND SHRI RAM SWAROOP KHANDELWAL, A RETD. GOVT. SERVANT, AND HER TWO SONS, AVINASH WHO IS A CA, AND RAVI WHO IS A BUSINESSMAN. THE ORDER OF THE LD CIT(A) IS BASED ON SURMISES AND ESTIMATES AND THERE FORE, NEEDS TO BE REJECTED. AT THE POINT OF REPETITION, IT MAY BE STA TED THAT THE ASSESSEE HAS GIVEN DETAILED ACCOUNT OF THE GENERATION OF CASH IN HAND WITH HER, AND, UNLESS THE DEPARTMENT IS ABLE TO DISPROVE IT WITH E VIDENCE, IT HAS TO BE ACCEPTED. IN ANY CASE, THE CIT(A) CANNOT REPLACE TH E EXACT FIGURES SUPPLIED BY THE ASSESSEE WITH AN ESTIMATE OF HER OWN WHICH H AS NO BASIS. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE DECISION OF THE LD CIT(A) MAY BE REVERSED AND THE CASH IN HAND AVAILABLE TO THE ASSESSEE AS P ER THE DETAILS SUBMITTED BEFORE THE CIT(A) MAY KINDLY BE ACCEPTED. 18. PER CONTRA, THE LD. DR REFERRED TO THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS LD. CIT(A) AND SUBMITTED THAT THE CLAIM OF OPENING CASH BALANCE IS NOT SUPPORTED BY PROPER EVIDENCES AND INSPITE OF TH AT, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS A LREADY GIVEN CREDIT OF OPENING CASH BALANCE TO THE EXTENT OF RS. 2,00,000/ - AND HAS ONLY SUSTAINED THE ADDITION OF RS. 7,14,556/- AS AGAINST RS. 9,14, 556/- MADE BY THE ASSESSING OFFICER. IT WAS ACCORDINGLY SUBMITTED THA T SUFFICIENT RELIEF HAS ALREADY BEEN PROVIDED TO THE ASSESSEE AND NO FURTHE R RELIEF MAY BE PROVIDED TO THE ASSESSEE IN THE GIVEN THE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE. ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 12 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD CIT(A) HAS RECORDED A F INDING THAT THE ASSESSEE HAD DECLARED INCOME TO THE TUNE OF RS 10,72,546/- O VER A PERIOD OF LAST 9 YEARS AND THE INCOME DECLARED THEREIN MAY HAVE BEEN SPENT IN HOUSEHOLD EXPENDITURE AND HAS THUS RESTRICTED THE AVAILABILIT Y OF OPENING CASH IN HAND TO THE EXTENT OF RS 2,00,000/- AS AGAINST RS 8,38,3 11/- CLAIMED BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS SUBMITTED A CASH FLOW STATEMENT FOR LAST 4 YEARS STARTING FINANCIAL YEAR 2009-10 ON WARDS AND THROUGH THAT, HAS TRIED TO DEMONSTRATE THE AVAILABILITY OF CASH I N HAND. IN THE SAID CASH FLOW STATEMENT, THERE ARE ENTRIES OF BANK WITHDRAWA LS, BANK DEPOSITS, DRAWINGS AND OTHER PAYMENTS AND CASH ACCRUAL FROM B USINESS. WE THEREFORE FIND THAT THE ASSESSEE HAS ALREADY CONSIDERED THE D RAWINGS IN HER CASH FLOW STATEMENT AND CONSIDERING THE DRAWINGS VIS--VIS IN COME DECLARED BY THE ASSESSEE, WE FIND THAT AVAILABILITY OF CASH IN HAND (NET OF DRAWINGS) VARIES FROM 52% IN A.Y 2012-13 TO 68.38% IN A.Y 2010-11 TO 70.09% IN A.Y 2011- 12. THEREFORE, AS FAR AS THE UNIFORM BASIS OF RS 2 0,000/- PER ANNUM APPLIED BY THE LD CIT(A), THE SAME IS NOT BORNE OUT OF THE RECORDS AND CANNOT BE ACCEPTED. FURTHER, ON PERUSAL OF CASH FLOW STATEME NT, WE FIND THAT THE ENTRIES RELATING TO BANK WITHDRAWALS AND BANK DEPOS ITS ARE CONCERNED, THE SAME ARE CLEARLY VERIFIABLE FROM THE BANK STATEMENT S. HOWEVER, WHERE THE ASSESSEE IS WORKING OUT THE AVAILABILITY OF CASH AT THE START AND CLOSE OF THE FINANCIAL YEAR, SUCH AVAILABILITY IS OF PHYSICAL CA SH IN HAND AND NOT THE CASH ACCRUAL FROM BUSINESS WHICH IS NOT YET REALIZED. T HEREFORE, AS FAR AS ENTRIES PERTAINING TO CASH ACCRUALS IN RESPECTIVE FINANCIAL YEARS ARE CONCERNED, THE SAME NEEDS TO BE EXCLUDED AS THE EFFECT OF THE SAME WOULD BE AUTOMATICALLY TAKEN IN SUBSEQUENT BANK/CASH DEPOSITS. SUBJECT TO SUCH EXCLUSION, WE FIND THAT THE CASH SUMMARY FOR THE LAST FOUR YEARS PROVI DES A REASONABLE BASIS FOR ARRIVING AT THE OPENING CASH IN HAND AT THE START O F THE FINANCIAL YEAR AND THE EXPLANATION OF THE ASSESSEE TO THAT EXTENT THEREFOR E FOUND IS SATISFACTORY. THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE AO FOR THE LIMITED PURPOSE OF DETERMINATION OF OPENING CASH IN HAND AF TER EXCLUSION OF ENTRIES ITA NO. 1046/JP/2019 SMT. MALTI KHANDELWAL, JAIPUR VS. ITO, JAIPUR 13 IN RESPECT OF CASH ACCRUALS IN THE RESPECTIVE FINAN CIAL YEARS AND THE AO IS HEREBY DIRECTED TO GRANT RELIEF TO THE ASSESSEE TO THE EXTENT OF OPENING CASH IN HAND SO WORKED OUT BY HIM AT THE START OF THE IM PUGNED FINANCIAL YEAR. IN THE RESULT, THE GROUND IS DISPOSED OFF IN LIGHT OF AFORESAID DIRECTIONS. 20. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED T HE LEVY OF INTEREST U/S 234B. NO CONTENTIONS WERE ADVANCED DURING THE COUR SE OF HEARING AND IN ANY CASE, THE LEVY OF INTEREST BEING CONSEQUENTIAL IN NATURE, DOESNT REQUIRE ANY SEPARATE ADJUDICATION. IN THE RESULT, THE SAME IS DISMISSED. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISPOSED O FF IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 21/09/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21/09/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. MALTI KHANDELWAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- INCOME TAX OFFICER, WARD-4(2), JAIP UR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1046/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR