ITO, SRIGANGANAGAR V. Shri Parmod Saluja, SRIGANGANAGAR

ITA 121/JODH/2014

• Counselvise Citation: 12123314 RSA 2014
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: NEERAJ CHAWALA
• Keywords: Unexplained investment; Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 121/JU/2014 ASSESSMENT YEAR: 2009-10 THE INCOME-TAX OFFICER VS. SHRI PRAMOD SALUJA WARD - 2 25, BANK COLONY SRIGANGANAGAR SRIGANGANAGAR PAN NO. AYDPS 2412 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NEERAJ CHAWALA DEPARTMENT BY : SHRI N.A. JOSHI, DR DATE OF HEARING : 09.06.2014 DATE OF PRONOUNCEMENT : 12.06.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), BIKANER DATED 31.12.2013 PERTAINING TO A.Y 2009-2010. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 2 I) DELETING ADDITION OF RS. 9,00,000/- MADE ON ACCO UNT OF DEPOSITS IN FDRS II) DELETING ADDITION OF RS. 1,00,000/- MADE ON ACC OUNT OF UNEXPLAINED DEPOSITS WITH SALUJA CONSTRUCTION. III) DELETING ADDITION OF RS. 4,25,000/- MADE ON AC COUNT OF STUDENT FEES SHOWN AS LIABILITY IN BALANCE SHEET 3. BRIEFLY STATED, THE FACTS OF THE CASE RELATING T O GROUND NO. 1 ARE THAT THE ASSESSEE, AS INDIVIDUAL, FILED HIS RETURN OF INCOME [ROI] FOR A.Y. 2009-10 ON 31.3.2010 DECLARING TOTAL INCOME OF RS. 2,06,900/- AS AGAINST WHICH ASSESSMENT WAS MADE ON 27.9.2011 AT A TOTAL INCOME OF RS. 16,31,900 AS THE A.O. MADE THE FOLLOWING ADDITI ONS: 1. OF RS. 9 LAKHS ON ACCOUNT OF DEPOSIT IN VARIOUS BANKS. 2. OF RS. 1 LAKH DEPOSIT WITH SALUJA CONSULTANCY 3. OF RS. 4.25 LAKHS ON ACCOUNT OF DISALLOWANCE OF CLAIM ON STUDENT FEES IN THE BALANCE SHEET THE ASSESSEE RUNS CONSULTANCY BUSINESS IN RESPECT O F VISA WHICH THE CUSTOMERS WANT TO GET AND ALSO HELPS IN PREPARATION OF FORMS ETC. THIS BUSINESS OF CONSULTANCY IS BEING DONE IN THE NAME A ND STYLE OF SALUJA CONSULTANCIES. DURING THE YEAR, IT WAS NOTICED BY THE A.O. THAT THE 3 ASSESSEE HAS MADE VARIOUS DEPOSITS TOTALING TO RS. 9 LAKHS IN THE BANKS IN THE FORM OF FDRS. THE A.O. HAS EXPLAINED THE SO URCE OF THESE FDRS. THE A.O. HAS FOUND THE EXPLANATION INSUFFICIENT. W HEN THIS ISSUE WAS RAKED UP BEFORE THE LD. CIT(A), IT WAS CLAIMED THAT HE HAD GIVEN FULL DETAILS REGARDING SOURCE[S] OF THESE FDRS ALONGWITH RELEVANT DOCUMENTARY PROOF, IT WAS STATED THAT THESE FDRS AR E DULY DISCLOSED IN THE PERSONAL BALANCE SHEET OF THE ASSESSEE. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, THE LD. CIT(A) HAS DELETED THE ENTIRE ADDITION OF RS. 9 LAKHS. 3.1 BEFORE US, BOTH THE PARTIES HAVE REITERATED THE IR EARLIER STAND. 4. AFTER GOING THROUGH THE ENTIRE RECORD, INCLUDING THE WRITTEN SUBMISSIONS FILED, WE HAVE FOUND THAT THE FINDING G IVEN BY THE LD. CIT(A) IS CORRECT. WE HAVE NOTICED THAT THE ASSESS EE MADE FOUR FDRS DURING THE RELEVANT YEAR TOTALING TO RS. 9 LAKHS. THE A.O. HAS MENTIONED IN HIS ORDER THAT THE ASSESSEE DID NOT EX PLAIN ANYTHING ABOUT THESE FDRS AGAINST WHICH THE CONTENTION OF TH E LD. A.R. IS THAT THE ASSESSEE FILED COMPLETE DETAILS REGARDING THE S OURCE OF PURCHASING THESE FDRS WITH DOCUMENTARY PROOF. THE LD. A.R. IN VITED OUR ATTENTION TOWARDS PERSONAL BALANCE SHEET AND ITR FILED BY THE ASSESSEE WHICH ARE 4 ANNEXED IN PAPER BOOK AT PAGES 3 TO 11, SOURCE OF W HICH IS SAID TO BE OUT OF MONEY RECEIVED FROM HIS MOTHER AFTER SHE RET IRED FROM GOVERNMENT SERVICE AND ALSO PART OF INVESTMENT BEIN G FROM THE FEES RECEIVED FROM STUDENTS WHOSE VISA REQUIREMENTS ETC WERE PREPARED TOWARDS CONSULTANCY ETC. ANY STUDENT WHO WANTS TO GO FOR STUDY IN FOREIGN COUNTRIES REQUIRES SPECIFIC VISA AND OTHER DOCUMENTS AND THIS PROCESS TAKES 3 TO 5 MONTHS AND DURING THAT PERIOD, AS A MEASURE OF SECURITY, THE ASSESSEE TAKES AND DEPOSITS THE AMOUN TS RECEIVED FROM THEM IN THE FORM OF FDRS AGAINST WHICH CREDIT CARD LIMIT HAS BEEN OBTAINED FROM THE BANK. THE INTEREST RECEIVED ON T HESE FDRS ARE DISCLOSED IN THE RETURN OF INCOME [ROI] FILED. THE DOCUMENTS RELEVANT TO THE RETIREMENT OF HIS PARENT ALONGWITH GIFT DOCU MENTS, ARE FOUND ENCLOSED IN THE PAPER BOOK AT PAGES 12 TO 15. THUS INVESTMENTS IN FDRS HAS BEEN FOUND TO BE DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE. IN THESE CIRCUMSTANCES, WE ARE OF THE CO NSIDERED OPINION THAT THE LD. CIT(A) HAS DONE CORRECT THING IN DELET ING THE IMPUGNED ADDITION. ACCORDINGLY, WE DISMISS GROUND NO. 1 OF REVENUES APPEAL. 5. GROUND NO. 2 RELATES TO DELETION OF ADDITION OF RS. 1 LAKHS ADDED BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN M/S SALUJA CONSULTANCY, SRIGANGANAGAR. THE ASSESSEE IS PARTNE R IN THIS 5 CONSULTANCY FIRM. THE ASSESSEE EARNED RS. 1.20 LAK HS FROM PERSONAL CONSULTANCY WORK AND INVESTED RS. 1 LAKH OUT OF THI S INCOME IN THE FIRM. THE ASSESSEE WITHDREW RS. 65,000/- FROM THE FIRM DURING THE YEAR, THE A.O. HAS ADDED THIS AMOUNT BECAUSE HE HA S OBSERVED THAT NO EXPLANATION WAS FILED BY THE ASSESSEE EXPLAINING TH E SOURCE OF THIS INVESTMENT. HOWEVER, IT WAS CLARIFIED AND EXPLAINE D BEFORE THE LD. CIT(A) THAT EVEN BEFORE THE A.O. ENTIRE PROOF OF TH IS INVESTMENT WERE PRODUCED. AFTER CONSIDERING THE SAME, THE LD. CIT( A) HAS DELETED THIS ADDITION. 6. BEFORE US, SIMILAR ARGUMENTS WERE REITERATED AS MADE BEFORE THE LOWER AUTHORITIES. 7. AFTER GOING THROUGH THE ENTIRE RECORD, WE DO NOT HAVE ANY HESITATION IN CONFIRMING THE IMPUGNED DELETION WHIC H IS FOUND EXPLAINED FROM THE FACT THAT THE ASSESSEE EARNED RS . 1.20 LAKHS FROM PERSONAL CONSULTANCY WORK AND OUT OF THAT HE MADE I NVESTMENT OF RS. 1 LAKH. ACCORDINGLY, WE CONFIRM THE DELETION AND DIS MISS GROUND NO. 2 OF REVENUES APPEAL. 6 8. GROUND NO. 3 RELATES TO DELETION OF ADDITION OF RS. 4.25 LAKHS ADDED ON ACCOUNT OF UNEXPLAINED ADVANCE RECEIVED FR OM STUDENTS TOWARDS FEES. 9. THE A.O. SEEMS TO HAVE IGNORED AND MISDIRECTED H IMSELF IN UNDERSTANDING THE NATURE OF THIS CLAIM. IN FACT, T H STAID FEES IS AN ADVANCE RECEIVED FROM STUDENTS TO BE ADJUSTED TOWAR DS THEIR UNIVERSITY FEES AND CONSULTANCY CHARGES. THE ASSESSEE HAS ENC LOSED LIST OF STUDENTS ALONGWITH RESPECTIVE ALLOTMENT LETTERS WHI CH IS ENCLOSED AT PAGE 19 OF PAPER BOOK. IT WAS ASCERTAINED THAT THI S DOCUMENT WAS AVAILABLE BEFORE THE CO. THUS THE SOURCE OF THIS D EPOSIT OF RS. 4.25 LAKHS IS CLEARLY EXPLAINED. THEREFORE, WE DO NOT F IND ANY FALLACY IN THIS FINDING OF THE LD. CIT(A). 10. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 12 TH JUNE, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12 TH JUNE, 2014 7 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR