SHRI PYARE LAL BAIRWA, ALWAR V. INCOME TAX OFFICER, WARD-2-2, ALWAR

ITA 1164/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4078 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Keywords: Reopening of assessment; Unexplained investment; Gift; Source of fund; Reason to believe; Reassessment proceedings
• Section: 80C; 143(3); 147; 148

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 JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA -@ ITA NO. 1164/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 PYARE LAL BAIRWA, VILLAGE- MALAVALI, POST-KHOHRA, LAXMANGARH, ALWAR. CUKE VS. I.T.O., WARD 2(2), ALWAR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: ACAPB 3325 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/05/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 07/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), ALWAR DATED 27/09/2018 FOR THE A.Y. 2010-11 IN THE MATTER OF ORDER PASSED U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR ADDITION OF RS. 2,90,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN LAND. THE ASSESSEE IS ALSO AGGRIEVED FOR RESTRICTING THE CLAIM OF DEDUCTION U/S 80C OF THE ACT TO RS. 65,115/- AS AGAINST RS. 1.00 LAC CLAIMED BY THE ASSESSEE. ITA 1164/JP/2018 PYARE LAL BAIRWA VS ITO 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A GOVERNMENT TEACHER. HE FILED HIS RETURN OF INCOME ON 21.07.2010 DECLARING TOTAL INCOME OF RS.1,86,390/-. DURING THE YEAR HE PURCHASED A RESIDENTIAL PLOT VIDE DEED DT. 01.12.2009 FOR R.S.8,40,0001- AND ALSO PAID REGISTRY EXPENSES THEREON OF RS.44,000/-. THE SOURCE OF SUCH INVESTMENT WAS EXPLAINED TO BE HOME LOAN OF RS.6,70,000/- AND CASH LOAN OF RS.2,90,000/-. 4. IN COURSE OF REASSESSMENT PROCEEDINGS ASSESSEE VIDE LETTER DATED 25.09.2017 PROVIDED LIST OF 5 PERSONS FROM WHOM HE HAS BORROWED LOAN OF RS.2,90,000/- FOR PURCHASE. OF PROPERTY AND VIDE LETTER DT. 06.10.2017 SUBMITTED THAT HIS FATHER HAS SOLD SOME LIVESTOCK AND RECEIVED MONEY WHICH WAS CREDITED IN HIS BANK ACCOUNT TO PURCHASE THE PROPERTY. THE AO OBSERVED THAT ASSESSEE HAS FURNISHED DIFFERENT REPLY EVERY TIME WHICH SHOWS THAT HE WAS TRYING TO MISGUIDE THE AO AND ACCORDINGLY MADE ADDITION OF RS.2,90,000/-. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) UPHELD THE VALIDITY OF REOPENING U/S 147 OF THE ACT AND ALSO CONFIRMED THE ADDITION OF RS. 2,90,000/- ON ACCOUNT OF UNEXPLAINED OF SOURCE OF INVESTMENT. 6. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE AO IN THE REASONS RECORDED U/S 148 HAS STATED IN THE LAST THIRD PARA THAT LOAN ITA 1164/JP/2018 PYARE LAL BAIRWA VS ITO 3 AMOUNTING TO S.2,90,000/- HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON PART OF THE ASSESSEE BY NOT FILING THE RETURN OF INCOME. HOWEVER, WHILE RECORDING THE REASONS HE HAS COMPLETELY IGNORED HIS OWN RECORDS AS THE RETURN WAS ALREADY AVAILABLE WITH HIM AS FILED BY THE ASSESSEE MANUALLY ON 01.07.2010. FURTHER, AO IN THE REASONS RECORDED STATED THAT ASSESSEE HAS PURCHASED AN IMMOVABLE PROPERTY VIDE REGISTERED DEED DT. 08.03.2010 WHEREAS THE PROPERTY WAS PURCHASED VIDE REGISTERED DEED DT. 01.12.2009. THUS, AT ALL STAGES AO EXHIBITED ABSOLUTE NON-APPLICATION OF MIND TO THE FACTS AND MATERIALS ON RECORD. THE NOTICE FOR REOPENING OF ASSESSMENT WAS BASED ON REASONS WHICH WERE THE PRODUCT OF SUCH NON-APPLICATION OF MIND. HENCE, THE NOTICE ISSUED IS ILLEGAL & BAD IN LAW AND THE SAME BE QUASHED. 7. WITH REGARD TO MERIT OF THE ADDITION, HE CONTENDED THAT THE ASSESSEE HAS FILED AN AFFIDAVIT OF HIS FATHER ALONGWITH EVIDENCE OF SOURCE OF AMOUNT GIVEN TO HIM, THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION WITHOUT GIVING ANY FINDING ON THE AFFIDAVIT SO FILED ALONGWITH SOURCE OF AMOUNT RECEIVED BY HIS FATHER FROM SALE OF LIVESTOCK. 8. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND CONTENDED THAT AFTER HAVING SUFFICIENT REASON TO BELIEVE IN TERMS OF INFORMATION THAT THE ASSESSEE HAS ACQUIRED IMMOVABLE PROPERTY AND THE TRANSACTION FOR THE SAME WAS NOT DISCLOSED IN THE RETURN ITA 1164/JP/2018 PYARE LAL BAIRWA VS ITO 4 FILED, THE A.O. HAS ISSUED NOTICE U/S 148. WITH REGARD TO MERIT OF UPHOLDING THE ADDITION OF RS. 2,90,000/-, THE LD DR CONTENDED THAT THE ASSESSEE KEEP ON SHIFTING HIS STAND WITH REGARD TO SOURCE OF FUNDS, ACCORDINGLY, THE A.O. WAS JUSTIFIED IN DISBELIEVING THE CONTENTION OF THE ASSESSEE. 9. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE REOPENING WAS DONE BY THE A.O. ON OBTAINING INFORMATION FROM THE ITO, ALWAR DATED 11/01/2017 WHICH SUGGESTED THAT THE ASSESSEE HAS PURCHASED IMMOVABLE PROPERTY VIDE REGISTERED SALE DEED DATED 08/03/2010 TO THE TUNE OF RS. 8,40,000/-. HOWEVER, THE SOURCE OF FUND WAS NOT DISCLOSED IN THE RETURN, ACCORDINGLY, HE REOPENED THE ASSESSMENT. AFTER GOING THROUGH THE REASONS RECORDED FOR REOPENING, I AM SATISFIED THAT THERE WAS SUFFICIENT REASON TO BELIEVE THAT THE INCOME OF ASSESSEE HAS ESCAPED ASSESSMENT, ACCORDINGLY, THE A.O. WAS JUSTIFIED IN REOPENING THE ASSESSMENT AND THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE SAME. 10. NOW COMING TO THE MERIT OF ADDITION OF RS. 2,90,000/-, IN THIS REGARD, I FOUND THAT THE ASSESSEE HAD FILED AN AFFIDAVIT BEFORE THE LD. CIT(A) ALONGWITH COPY OF RECEIPT OF RS. 2,31,500/- FROM SALE OF LIVESTOCK. IN THE AFFIDAVIT, THE FATHER OF THE ASSESSEE SHRI CHHOTE LAL BAIRWA HAS CLEARLY ACCEPTED ADVANCING OF RS. 2.30 LACS TO HIS SON FOR PURCHASE OF PLOT. IN THE ITA 1164/JP/2018 PYARE LAL BAIRWA VS ITO 5 AFFIDAVIT, FATHER OF THE ASSESSEE HAVE STATED THE SOURCE OF FUND AS OUT OF SALE OF LIVESTOCK. THE COPY OF SALE RECEIPT NO. 19766 DATED 17/11/2009 HAVE ALSO BEEN FILED. HOWEVER, WITHOUT ASKING ANY REMAND REPORT FROM THE A.O. AND GIVING HIS FINDING ON THE AFFIDAVIT AND SOURCE OF MONEY SO FILED BY THE ASSESSEE, THE LD. CIT(A) HAD CONFIRMED THE ADDITION. IN THE SUBSTANTIAL INTEREST OF JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF THE A.O. TO FIND OUT THE GENUINENESS OF THE SALE PROCEEDS OF LIVESTOCK IN THE HANDS OF ASSESSEES FATHER AS WELL AS AUTHENTICITY OF THE AFFIDAVIT SO FILED BY HIS FATHER WITH REGARD TO GIFTING OF RS. 2.30 LACS TO HIS SON FOR PURCHASE OF LIVESTOCK. 10.1 SO FAR AS RS. 60,000/- AS WAS ALLEGED TO BE SAVED BY THE ASSESSEE OUT OF HIS PAST EARNINGS, LOOKING TO HIS PAST EARNING, I DIRECT THE A.O. TO TREAT RS. 50,000/- AS HAVING BEEN SAVED AND AVAILABLE WITH THE ASSESSEE AS ON THE DATE OF PURCHASE OF PLOT. I DIRECT ACCORDINGLY. 11. THE A.O. HAS ALSO RESTRICTED DEDUCTION U/S 80C OF THE ACT AT RS. 65,115/- AS AGAINST RS. 1.00 LAC CLAIMED BY THE ASSESSEE. FROM THE RECORD, I OBSERVE THAT THE LOWER AUTHORITIES HAVE NOT ALLOWED THE CLAIM OF STATE INSURANCE OF RS.5,680/-, LIP OF RS.13,817/- AND HOUSE LOAN REPAYMENT OF RS.19,950/-. I OBSERVE THAT THE CLAIM OF STATE INSURANCE IS EVIDENT FROM FORM NO.16 GIVEN BY THE EMPLOYER (PB 2), LIP RECEIPT OF RS.16,466/- IS ITA 1164/JP/2018 PYARE LAL BAIRWA VS ITO 6 VERIFIABLE FROM PB 5 AND HOUSING LOAN REPAYMENT OF RS.19,950/- IS VERIFIABLE FROM THE BANK LOAN STATEMENT PLACED AT PB 3. IN THE SUBSTANTIAL INTEREST OF JUSTICE, THIS ISSUE IS ALSO RESTORED BACK TO THE FILE OF THE A.O. FOR DECIDING AFRESH AFTER VERIFYING THE PAYMENT RECEIPT AS STATED ABOVE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH MAY, 2019 SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07 TH MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI PYARE LAL BAIRWA, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 2(2), ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1164/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR