Smt. Kanak Tyagi, Meerut V. ITO, Meerut

ITA 1174/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3460 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU MUKHERJEE
• Assessee Lawyers: P K DUBLISH
• Keywords: Gift; Opportunity of being heard
• Section: 68

Judgement Text

1 ITA NO. 1174/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER ITA NO. 1174 /DEL/201 7 ( A.Y 2009-10) KANAK TYAGI C/O. VINOD KUMAR GOEL, 282, BOUNDARY ROAD, CIVIL LINES MEERUT AAFTP8855R (APPELLANT) VS ITO WARD-1(3) MEERUT (RESPONDENT) APPELLANT BY SH. P. K. DUBLISH, ADV RESPONDENT BY MS. RANU MUKHERJEE, SR. DR ORDER PER R. K. PANDA , AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 16 TH DECEMBER, 2016 OF THE CIT(A)-ALIGARH( MEERUT) RELAT ING TO ASSESSMENT YEAR 2009-10. 2. THIS IS THE SECOND ROUND OF LITIGATION BEFORE TH E TRIBUNAL. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUA L AND HAD FILED HER RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,57,890/-. IN THE SAID RETURN, THE ASSESSEE HAD DECLARED INCOME FROM HOUSE PROPERTY AT RS.1,51,200/- AFTER DEDUCTING AN AMOUNT OF RS.64,800/- U/S 24 OF THE IN COME TAX ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O ASKED THE ASSESSEE TO SUBSTANTIATE THE RENTAL INCOME, THE OWNERSHIP OF THE PROPERTY AS WELL AS THE DETAILS OF RENT RECEIPT. IT WAS EXPLAINED BY THE ASSESSEE THAT THE PROPERTY WAS GIFTED BY HER MOTHER IN LAW M/S SAROJ TYAGI WHICH WAS PURCHASED B Y HER FOR RS.75,000/- . DATE OF HEARING 02.01.2018 DATE OF PRONOUNCEMENT 09.02.2018 2 ITA NO. 1174/DEL/2017 FURTHER, THE PROPERTY HAS BEEN LET OUT TO COLLEGE S TUDENTS FOR WHICH NO RECORDS ARE AVAILABLE. THE A.O REJECTED THE EXPLANATION OF THE ASSESSEE IN ABSENCE OF ANY GIFT DEED PRODUCED BEFORE HIM TO SUBSTANTIATE T HE SAID GIFT. HE ALSO REJECTED THE EXPLANATION OF THE ASSESSEE THAT THE P ROPERTY IS INHERITED SINCE MRS. SAROJ TYAGI WAS ALIVE. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE THE A.O TREATED THE INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES AND MADE ADDITION OF RS.64,800/- TO THE TOT AL INCOME OF THE ASSESSEE WHICH WAS CLAIMED BY HER AS DEDUCTION U/S 24 OF THE I.T ACT. 4. THE A.O FURTHER NOTICED THAT THE ASSESSEE HAS DE POSITED AN AMOUNT OF RS.12,20,000/- IN THE SAVING BANK ACCOUNT MAINTAINE D WITH AXIS BANK LTD. WHICH HAS BEEN JOINTLY HELD BY HER WITH HER HUSBAND SHRI DUSHYANT TYAGI. ON BEING QUESTIONED BY THE A.O TO EXPLAIN THE SOURC ES OF SUCH DEPOSIT, SHRI DUSHYANT TYAGI WHO APPEARED BEFORE THE A.O, SUBMITT ED THAT IT WAS THE INCOME OF MR. TYAGI. ACCORDING TO THE A.O SINCE, THE INCO ME OF MR. DUSHYANT TYAGI WAS ABOUT 7 LAKHS ONLY, THEREFORE, THE SAME WAS NOT SUFFICIENT TO DEPOSIT CASH OF RS.12,20,000/- IN THE BANK ACCOUNT. SINCE, THE ACCOUNT WAS JOINTLY HELD THE A.O HELD THAT ON AMOUNT OF RS.6,10,000/- DEPOSITED IN THE SAID BANK ACCOUNT BELONGS TO THE ASSESSEE. AFTER CONSIDERING THE HOU SE HOLD EXPENSES AT RS.5,000/- PER MONTH I.E. RS.60,000/- PER ANNUM, T HE A.O ACCEPTED AN AMOUNT OF RS.1,50,000/-AS EXPLAINED TOWARDS SUCH DE POSIT AND MADE ADDITION OF RS.4,60,000/- TO THE TOTAL INCOME OF THE ASSESSE E. 4.1. THE A.O SIMILARLY MADE ADDITION OF RS.70,000/- BEING LOAN RECEIVED FROM SHRI GAUTAM TYAGI IN ABSENCE OF FURNISHING OF ANY E VIDENCE IN SUPPORT OF THE LOAN. 4.2. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CI T(A), BUT WITHOUT ANY SUCCESS. THEREAFTER THE ASSESSEE PREFERRED AN APPEA L BEFORE THE TRIBUNAL WHO VIDE ORDER DATED 9 TH JULY 2015 RESTORED THE MATTER TO THE FILE OF THE A .O WITH A 3 ITA NO. 1174/DEL/2017 DIRECTION TO DECIDE THE ISSUE AFRESH. THE RELEVANT OBSERVATION OF THE TRIBUNAL AT PARA 4 TO 4.1 READS AS UNDER:- 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH RELEVANT RECORDS AVAI LABLE WITH ME, ESPECIALLY THE IMPUGNED ORDER. I AM OF THE VIEW THAT THE AO HAS PA SSED THE IMPUGNED ORDER WITHOUT AFFORDING SUFFICIENT OPPORTUNITY TO THE ASS ESSEEAND WITHOUT CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE BEFORE HIM. LD. COUNSEL OF THE ASSESSEE HAS ALSO FILED THE PAPER BOOK CONTAINING PAGES 1 TO 17 HAVING THE WRITTEN SUBMISSION, PHOTOCOPY OF RECOVERY LETTER FROM AXIS BANK AND NOTICE U/S 226(3); PHOTOCOPY OF WRITTEN SUBMISSION BEFORE AO; PHOTOCOP Y OF RETURN RECEIPT AND COMPUTATION OF INCOME OF SH. DUSHYANT TYAGI FOR THE AY 2009-10; PHOTOCOPY OF WRITTEN SUBMISSION BEFORE AO; PHOTOCOPY OF CONFIRMA TION OF SH. GAUTAM TYAGI ALONGWITH ID AND BANK STATEMENT AND COPY OF BANK ST ATEMENT OF SH. DUSHYANT TYAGI. 4.1. KEEPING IN VIEW OF THE AFORESAID EVIDENCES PR ODUCED BY THE ASSESSEE, I AM OF THE VIEW THAT INTEREST OF JUSTICE WOULD BE SE RVED, IF THE ISSUES IN DISPUTE REMITTED BACK TO THE FILE OF THE AO TO DECIDE THE S AME AFRESH, UNDER THE LAW. ACCORDINGLY, I SET ASIDE THE ISSUES TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE SAME AFRESH UNDER THE LAW, AFTER CONSIDE RING THE EVIDENCES FILED BEFORE ME. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 5. THE A.O THEREAFTER PASSED THE ORDER ON 8 TH DECEMBER, 2015 WHEREIN, HE RETAINED THE ADDITION OF RS. 64,800/- BEING DISALLO WANCE U/S 24 AND RS.4,60,000/- BEING UNEXPLAINED CASH DEPOSITED. TH E LD.CIT(A) DISMISSED THE 4 ITA NO. 1174/DEL/2017 APPEAL FILED BY THE ASSESSEE. AGGRIEVED WITH SUCH ORDER OF THE LD.CIT(A) , THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISIN G THE FOLLOWING GROUNDS:- 1. THAT THE A.O. AS WELL AS CIT(A) HAS NOT FOLLOWED T HE DIRECTION GIVEN BY HONBLE I.T.A.T., HENCE ASSESSMENT WAS MADE AGAINST THE DIRECTION OF HONBLE I.T.A.T.. 2. THAT THE A.O. HAS NOT ALLOWED THE REBATE U/S 24 ON @ 30% OF STANDARD DEDUCTION AND CIT(A) CONFIRM THE SAME, WHICH IS AGA INST THE FACTS AND LAW. 3. THAT THE ASSESSEE HAS RIGHT TO ADD/DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 6. AT THE TIME OF HEARING, THE LD. COUNSEL OF THE A SSESSEE FILED THE FOLLOWING AMENDED GROUND OF APPEAL NO.3. 3. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED LOWER AUTHORITIES ERRED IN LAW IN CONSIDERING, TREATING, ASSESSING AND CONFIRMING THE CASH DEPOSITS OF RS. 4,60,000/- IN S AVING BANK ACCOUNT NO. 177010100002325 WITH AXIS BANK LTD., IN THE NAM E OF THE SHRI DUSHYANT TYAGI, IN THE HANDS OF APPELLANT/ ASSESSEE AS UNEXPLAINED INCOME U/S 68 OF L.T. ACT. AFTER HEARING BOTH SIDE, THE AMENDED GROUND IS ADMI TTED. 7. THE LD. COUNSEL OF THE ASSESSEE STRONGLY CHALLEN GED THE ORDER OF THE LD.CIT(A) HE SUBMITTED THAT THE ADDITION OF RS. 64 ,800/- MADE BY THE A.O U/S 24 IS UNCALLED FOR, SINCE THE A.O HAS NOT FOLLOWED THE DIRECTION OF THE TRIBUNAL. HE SUBMITTED THAT THERE IS NO DISPUTE TO THE FACT T HAT THE ASSESSEE RECEIVED THE 5 ITA NO. 1174/DEL/2017 HOUSE PROPERTY IN QUESTION AS GIFT FROM HER MOTHER- IN-LAW WHICH HAS BEEN LET OUT TO DIFFERENT COLLEGE STUDENTS. THE SAID INCOME HAS TO BE TREATED AS INCOME FROM HOUSE PROPERTY AND DEDUCTION U/S 24 CANNOT BE DISALLOWED. WITHOUT PREJUDICE TO THE ABOVE, HE SUBMITTED THAT IF THE GI FT IS INVALID THEN THE RENTAL INCOME DECLARED BY THE ASSESSEE CANNOT BE TAXED IN HER HANDS AND HAS TO BE TAXED IN THE HANDS OF MRS. SAROJ TYAGI, THE OWNER O F THE PROPERTY AND THE RENTAL INCOME DECLARED BY THE ASSESSEE CAN AT BEST BE TRE ATED AS EITHER GIFT RECEIVED BY HER OR LOAN RECEIVED BY HER BUT CANNOT UNDER ANY CIRCUMSTANCES BE TREATED AS INCOME OF THE ASSESSEE. 8. SO FAR AS THE ADDITION OF RS.4,60,000/- IS CONCE RNED, HE SUBMITTED THAT THE SAVINGS BANK ACCOUNT WAS A JOINT BANK ACCOUNT O PERATED BY HER HUSBAND, SH. DUSHYANT TYAGI. THE SAVING BANK ACCOUNT WAS DE CLARED BY SHRI DUSHYANT TYAGI IN HIS INCOME TAX RETURN FOR THE IMPUGNED ASS ESSMENT ORDER. ALTHOUGH, THE COPY OF THE INCOME TAX RETURN, STATEMENT OF THE BANK ACCOUNT AND BALANCE- SHEET COPY WERE FILED BEFORE THE A.O, DURING THE CO URSE OF ASSESSMENT PROCEEDINGS TO PROVE THAT THE ACCOUNT DOES NOT BELO NG TO THE ASSESSEE, HOWEVER, THE A.O IGNORING ALL THE EVIDENCES FILED B EFORE HIM HAS REPEATED THE ADDITION IN THE HANDS OF THE ASSESSEE WHICH HAS BEE N UPHELD BY THE LD.CIT(A). HE SUBMITTED THAT SINCE THE ASSESSEE IS NOT MAINTAI NING ANY BOOKS OF ACCOUNTS, THEREFORE, THE PROVISIONS OF SECTION 68 C OULD NOT BE INVOKED. RELYING ON VARIOUS DECISIONS, HE SUBMITTED THAT BANK PASS B OOK/BANK STATEMENT IS NOT COVERED IN THE DEFINITION OF BOOKS OF ACCOUNTS AS P ER SECTION 2(12A) OF THE INCOME TAX ACT. THEREFORE, ADDITION U/S 68 CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. FOR THE ABOVE PROPORTION, HE RELIED ON THE FOLLOWING DECISIONS;_ 1. C.I. T. VS. BHAICHAND H. GANDHI (1983) 141ITR 67 (BOM) 2. SMT. SHANTA DEVI VS. C.I.T. (1988) 171 ITR K532 (P&H) 3. AMAND KRAM RAITANI (1997) 223 ITR 544 6 ITA NO. 1174/DEL/2017 (GAUHATI) 4. C.I.T. VS. TAJ BORE WELLS (2007) 291 ITR 232 (MAD). 9. FURTHER, THE NAME OF SHRI DUSHYANT TYAGI WAS MEN TIONED IN THE PASS BOOK AS THE FIRST ACCOUNT HOLDER. EVEN ON THE STATE MENT ALSO, THE NAME OF HER HUSBAND SHRI DUSHYANT TYAGI APPEARS FIRST. THEREFO RE, FOR ALL PRACTICAL PURPOSES IT HAS TO BE HELD THAT THE SAID ACCOUNT BE LONGS TO HIM. HE SUBMITTED THAT DESPITE ALL THESE DETAILS GIVEN TO THE A.O AND THE LD.CIT(A) THEY HAVE NOT FOLLOWED THE DUE PROCESS OF LAW AND HAVE MADE THE A DDITION. THEREFORE, THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE BE ALLOWED. 10. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE A.O AND THE LD.CIT(A). HE SUBMITTED THAT DESPITE OPPORTUNI TIES GIVEN BY THE A.O. THE ASSESSEE COULD NOT SUBSTANTIATE WITH EVIDENCE TO TH E SATISFACTION OF THE A.O REGARDING THE OWNERSHIP OF THE HOUSE PROPERTY AND T HE SOURCE OF DEPOSIT IN THE BANK ACCOUNT. THEREFORE, THE ORDER OF THE LD.CIT(A ) SHOULD BE SUSTAINED. 11. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE A.O AND THE LD.CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS D ECISIONS CITED BEFORE ME. SO FAR AS THE ADDITION OF RS.64,800/- IS CONCERNED, I FIND THE A.O MADE THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CL AIMED U/S 24 FROM THE RENTAL INCOME OF RS.2,10,000/- DECLARED BY THE ASSE SSEE. WHILE DOING SO, THE A.O REJECTED THE CLAIM OF OWNERSHIP OF THE PROPERTY ON THE GROUND THAT THE GIFT DEED WAS EXECUTED ON STAMP PAPER OF RS.10 WHICH IS NEITHER REGISTERED WITH ANY AUTHORITY NOR CONTAINS THE DATE OF GIFT. THERE FORE, ACCORDING TO THE A.O THE SO CALLED GIFT DEED WAS ONLY A MERE PIECE OF PAPER. FURTHER, THE ASSESSEE HAS 7 ITA NO. 1174/DEL/2017 NOT FOLLOWED THE PROVISIONS OF TRANSFER OF PROPERTY ACT, 1882 AND REGISTRATION ACT, 1908 PROPERLY. IT IS THE SUBMISSION OF THE LD . COUNSEL OF THE ASSESSEE THAT IF THE GIFT DEED IS DISBELIEVED THEN IN THAT CASES, THE INCOME CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE AND HAS TO BE TAXED IN TH E HANDS OF THE OWNER OF THE PROPERTY MRS. SAROJ TYAGI. THE AMOUNT RECEIVED BY T HE ASSESSEE FROM HOUSE PROPERTY CAN BE TREATED AS GIFT FROM SMT. SAROJ TYA GI OR LOAN FROM HER BUT CANNOT BE TAXED AS INCOME IN THE HANDS OF THE ASSES SEE. I FIND SOME FORCE IN THE ABOVE ARGUMENTS OF THE LD. COUNSEL OF THE ASSES SEE. THIS ASPECT WHICH IS BEING ARGUED BEFORE ME FOR THE FIRST TIME WAS NEVER ARGUED BEFORE THE A.O OR THE LD.CIT(A). I, THEREFORE, DEEM IT PROPER TO RES TORE THE ISSUE TO THE FILE OF THE A.O WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE FIRST ISSUE RAISED IN THE GROUNDS OF APPEAL IS ACCORDINGLY ALLOWED FOR S TATISTICAL PURPOSES. 12. SO FAR AS THE SECOND ISSUE IS CONCERNED I.E. AD DITION OF RS.4,60,000/-TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE I.T ACT IS CONCERNED, I FIND THE A.O MADE THE ADDITION IN THE HANDS OF THE ASSESSEE ON THE GROUND THAT 50% OF THE DEPOSIT OF RS.12, 20,000/- IN THE JOINT BANK AC COUNT BELONGS TO THE ASSESSEE. AFTER GIVING BENEFIT OF RS.1,50,000/- AS EXPLAINED FROM THE RENTAL INCOME DECLARED BY THE ASSESSEE, THE A.O TREATED TH E BALANCE AMOUNT OF RS.4,60,000/- AS INCOME FROM UNEXPLAINED SOURCES. IT IS THE SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE THAT THE BANK ACCOU NT HAS BEEN DECLARED IN THE BALANCE-SHEET OF HER HUSBAND SHRI GAUTAM TYAGI AND HIS NAME APPEARED AS THE FIRST HOLDER IN THE BANK PASS BOOK AS WELL AS B ANK STATEMENT AND THE ENTIRE DEPOSIT IN THE SAID BANK ACCOUNT HAS BEEN EXPLAINED BY SHRI GAUTAM TYAGI IN HIS RETURN OF INCOME. ACCORDING TO THE ASSESSEE SI NCE ALL THESE PAPERS WERE PRODUCED BEFORE THE A.O WHO HAD OVER LOOKED THE SAM E AND THE LD.CIT(A) ALSO HAS NOT GONE THROUGH THE SAME PROPERLY, THEREFORE, I IN THE INTEREST OF JUSTICE, DEEM IT PROPER TO RESTORE THIS ISSUE ALSO TO THE FI LE OF THE A.O WITH A DIRECTION TO GIVE HIS FINDING ON THIS ASPECT. IF THE BANK ACCOU NT HAS BEEN DECLARED IN THE BALANCE-SHEET OF SHRI DUSHYANT TYAGI, THE DEPOSITS IN THE SAID BANK ACCOUNT 8 ITA NO. 1174/DEL/2017 CANNOT BE PARTLY ATTRIBUTED TO THE ASSESSEE. SINCE , THE ORDER OF THE A.O IS SILENT ON THIS ISSUE, THEREFORE, I DEEM IT PROPER TO REST ORE THIS ISSUE ALSO TO THE FILE OF THE A.O FOR FRESH ADJUDICATION OF THE ISSUE IN ACC ORDANCE WITH LAW AND AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. I HOLD AND DIRECT ACCORDINGLY. 13. THE APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED ON 9/2/ 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 09/02/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 9 ITA NO. 1174/DEL/2017 DATE 1. DRAFT DICTATED ON 23/01/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 24/01/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 09.02. 2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 09.02.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.