Dr. Yogesh Chand Sharma, Agra V. I.T.O., Ward-4(4), Agra

ITA 131/AGR/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7026 (ITAT-AGRA)
• Duration Of Justice: 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-05-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: MAHESH AGARWAL
• Keywords: Valuation report
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA(SMC) BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 131/AGRA/2011 ASSTT. YEAR : 1998-99 DR. YOGESH CHAND SHARMA, VS. INCOME-TAX OFFICER, MEDINOVA TESTING CLINIC, WARD 4(4), AGRA. KAVERI CENTRE, SANJAY PLACE, AGRA (PAN ALWPS 5358 J) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI MAHESH AGARWAL, C.A. FOR RESPONDENT : SHRI A.K. SHARMA, JR. D.R. ORDER THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 01.03.2011 PASSED BY CIT(A)-II, DEHRADUN (CAM P AGRA) ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED BOTH ON F ACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS.2,12,166/- MADE BY THE AO AS INCOME FROM OTHER SOURCES TREATING THE SALE PROCEEDS OF JEWELL ARY AS BOGUS AND UNPROVED. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED BOTH ON F ACTS AND IN LAW IN CONFIRMING THE ASSESSMENT OF PROFESSIONAL INCOME AT RS.2,00,000/- AS AGAINST RS.1,47,378/- DECLARED BY THE ASSESSEE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER ISSUED NOTICE TO THE ASSESSEE U/S. 148 DATED 21.03.2005 WHICH WAS SERVED UPON THE ASSESSEE ON 24.03.2005 ON THE BASIS OF INFORMATION RECEIVED FROM DCIT, CENTRAL CIRCL-3, NEW DELHI THROUGH ADDL. COMMISSION ER OF INCOME-TAX RANGE-4, AGRA THAT ONE M/S. BISHAN CHAND MUKESH KU MAR, WITH ADDRESS AS 1166/202, KUCHA MAHAJN, CHANDNI CHOWK, DELHI HAS PROVIDED BOGUS ACCOMMODATION ENTRY ON THE SALE PROCEEDS OF JEWELLE RY TO THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED WRITTEN REPLY DATED 20.04.2005 STATING THEREIN THAT THE RETURN FILED U/S. 139(1) M AY BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE U/S. 148 OF THE INCOME-TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE ASSESSEE ALSO REQUESTE D TO SUPPLY THE COPY OF REASONS RECORDED U/S. 147 OF THE ACT AND THE SAME W AS GIVEN TO SHRI S.K. GARG, C.A., WHO IS AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AND THE CASE WAS ADJOURNED VARIOUS TIMES ON THE REQUEST OF THE A SSESSEE, BUT THE ASSESSEE DID NOT CO-OPERATE IN THE ASSESSMENT PROCEEDINGS. T HE ASSESSING OFFICER ALSO ISSUED NOTICE U/S. 143(2), 142(1) AS WELL AS A SUMMON U/S. 131 DATED 09.01.2006 TO THE ASSESSEE REQUIRING HIM TO PRODUCE THE BOOKS OF ACCOUNT AND ALSO TO PRODUCE THE PARTNER OF M/S. BISHAN CHAN D MUKESH KUMAR. LASTLY, THE ASSESSING OFFICER ON 03.02.2006 ISSUED NOTICE U/S. 142(1) BY SPEED POST FIXING THE CASE FOR 20.02.2006 ALONGWITH QUERY LETTER DATED 03.02.2006. THE SAID NOTICE RECEIVED BACK ON 10.02. 2006 WITH THE POSTAL REMARKS REFUSED. AFTER ALLOWING THE OPPORTUNITY T O THE ASSESSEE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EXPARTE U/S. 144 OF THE ACT, AS THE LIMITATION WAS GOING TO EXPIRE ON 31.03.2006. T HE ASSESSING OFFICER ASSESSED THE INCOME FROM BUSINESS AT RS.2,00,000/- AND INCOME FROM OTHER SOURCES AT RS.2,27,085/- AND AFTER ALLOWING DEDUCTI ON U/S. 80L OF RS.14,455/- AS CLAIMED BY ASSESSEE, DETERMINED TOTA L INCOME OF ASSESSEE AT RS.4,12,635/- VIDE ORDER DATED 01.03.2006 PASSED U/ S. 144/147 OF THE ACT. AGGRIEVED BY THE SAME, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 01.03.2011 DISMISSED THE APPEAL OF THE ASSESSEE BY UPHOLDING THE ORDER O F THE ASSESSING OFFICER. NOW, THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAI NST THE IMPUGNED ORDER. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE FILED A WRITTEN SUBMISSION ALONGWITH COPY OF JUDGMENTS CITED THEREI N AS WELL AS A COPY OF PAPER BOOK CONTAINED 60 PAGES IN WHICH HE HAS INCLU DED COPY OF ACKNOWLEDGEMENT FOR RETURN FILED FOR A.Y 1998-99, C OPY OF DOCUMENTS FILED WITH THE ORIGINAL RETURN, COPY OF REPLY IN RE SPONSE TO NOTICE U/S. 148, COPY OF LETTER FROM M/S. BISHAN CHAND MUKESH KUMAR ALONG WITH AFFIDAVIT AND OTHER DOCUMENTS SENT BY HIM TO THE ASSESSING OF FICER, COPY OF SUBMISSION DATED 05.09.06 BEFORE THE CIT(A), COPY O F REMAND REPORT OF THE AO SUBMITTED TO CIT(A), COPY OF SUBMISSION DATED 23 .11.2006 BEFORE THE CIT(A), COPY OF SUBMISSION DATED 09.01.2007 BEFORE THE CIT(A) AND THE COPY OF SUBMISSION DATED 09.11.2010 BEFORE THE CIT( A). THE WRITTEN SUBMISSION SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE ME IS REPRODUCED AS UNDER : 1. THE APPELLANT ENJOYS INCOME FROM MEDICAL PROFES SION. DURING THE YEAR UNDER APPEAL HE HAD ALSO SOLD SOME SILVER UTEN SILS DECLARED UNDER THE VDIS 1997 2. HE FILED HIS RETURN OF INCOME FOR THE AY 98-99 O N 31-10-1998 IN WHICH HE DECLARED PROFESSIONAL INCOME AT (RS.147,37 8/- AND ALSO DECLARED SALE OF SILVER UTENSILS UNDER THE HEAD 'CA PITAL GAINS' 3. AS REGARDS SALE OF SILVER UTENSILS, APPELLANT HA D FILED ALONG WITH THE RETURN FOLLOWING DETAILS- (A). COPY OF COMPUTATION OF INCOME PB/14 (B). COPY OF BILL FROM BISHAN CHAND MUKESH KUMAR FO R PURCHASE OF SILVER UTENSILS CONTAINING DETAILS OF ITEMS PURC HASED PB/22 (C). COPY OF DO RECEIVED TOWARDS THE SALE CONSIDERA TION PB/23 (D). COPY OF CERTIFICATE ISSUED U/S 68(2) OF VDIS, 1997 PB/29 (E). COPY OF VALUATION REPORT RELATING TO THE SILVE R UTENSILS DECLARED UNDER VDIS. PB/30 (F). PERSONAL BALANCE SHEET SHOWING PROFIT FROM SAL E OF SILVER PB/27 4. ON THE BASIS OF CERTAIN INFORMATION RELATING TO M/S BISHAN CHAND MUKESH KUMAR, TO WHOM THE SILVER UTENSILS WERE SOLD , ITO, WARD 4(4), AGRA FRAMED AN OPINION THAT INCOME TO THE EXT ENT OF SUCH SALE IE. (RS.2,12,166/- HAD ESCAPED ASSESSMENT AND THERE FORE ISSUED A NOTICE U/S 148 OF THE ACT CALLING THE APPELLANT TO FILE RETURN OF INCOME FOR THE PURPOSE OF MAKING A REASSESSMENT. 5. IN RESPONSE, APPELLANT INFORMED THE AO THAT HE H AD ALREADY FILED HIS RETURN OF INCOME AND THE SAME MAY BE TREATED AS FIL ED IN COMPLIANCE TO NOTICE U/S 148. 6. LD AO FRAMED THE ASSESSMENT U/S 144/147 WHEREIN HE ADDED (RS.2,12,166/- BEING SALE CONSIDERATION OF SILVER U TENSILS TREATING THE SALE AS BOGUS AND ALSO ESTIMATED PROFESSIONAL INCOM E AT (RS.2,00,000/- AGAINST (RS.147,378/-. 7. AGAINST THE SAID ASSESSMENT APPELLANT WENT IN AP PEAL AND MADE DETAILED ARGUMENTS. HOWEVER, LD. C1T(A) DISMISSED T HE APPEAL. HE CONFIRMED THE ADDITION ON ACCOUNT OF ALLEGED BOG US SALE OF SILVER UTENSILS FOR THE FOLLOWING REASONS - (REF: PARA 8 OF CIT(A)'S ORDER) (A). THE JEWELLERY ITEMS CLAIMED TO BE SOLD WERE NO T SPECIFIED TO THE AO (B). NO EVIDENCE REGARDING VDIS WAS PLACED BEFORE THE AO, AND (C). EVEN IN APPEAL NO CORROBORATIVE EVIDENCE WAS FILED. 8. THE OBSERVATIONS OF THE LD CIT(A) ARE INCORRECT, BASELESS AND AGAINST THE FACTS ON RECORD IN AS MUCH AS ALL SUCH DETAILS WERE ALREADY FILED BEFORE THE AO AS WELL AS THE C1T(A). 9. LD. CIT(A) ALSO CALLED A REMAND REPORT ULS 250(4 ) FROM THE AO. IN THE REMAND REPORT LD AO NEITHER DENIED THE DOCUMENT S FILED BEFORE HIM NOR COULD BRING ANY MATERIAL TO ESTABLISH THAT THE ASSESSEE FIRST PAID CASH EQUIVALENT TO THE DRAFT RECEIVED TOWARDS SALE CONSIDERATION OF SILVER UTENSILS. 10. DURING THE APPELLATE STAGE, MIS BISHAN CHAND MU KESH KUMAR, TO WHOM THE UTENSILS WERE SOLD, ALSO FILED THEIR AFFID AVIT, DIRECTLY TO THE AO, CONFIRMING THE PURCHASE OF SILVER UTENSILS FROM THE APPELLANT. 11. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE DID NOT POSSESS THE JEWELLARY. THE POSSESSION OF SUCH ITEMS IS FULLY PR OVED FROM THE DECLARATION UNDER VDIS AND THE VALUATION REPORT FIL ED THEREWITH. ITEMS SOLD ARE FULLY DESCRIBED IN THE PURCHASE BILL OF MIS BISHAN CHAND MUKESH KUMAR AND ALSO TALLY WITH THE VALUATIO N REPORT. THE PURCHASER HAS ALSO CONFIRMED THE SAID PURCHASE THRO UGH HIS AFFIDAVIT WHICH IS NOT CHALLENGED BY THE LOWER AUTHORITIES. U NDER THESE CIRCUMSTANCES, TREATING THE SALE AS BOGUS, IS PUREL Y BASED ON SUSPICION. IT IS TRITE THAT SUSPICION, HOW SO EVER STRONG, CAN NOT TAKE THE PLACE OF PROOF . (REF. UMA CHARAN SHAW (37 ITR 271 SC). 12. THE LD AO HAS NOT DISCARDED ANY OF THE EVIDENCE FILED BY THE APPELLANT IN SUPPORT OF SUCH SALE. THAT APART, THE AO HAS ALSO NOT BROUGHT ON RECORD ANY MATERIAL WHICH MAY SUGGEST TH AT THE APPELLANT FIRST PAID CASH TO MIS BISHAN CHAND MUKESH KUMAR AN D THEN OBTAINED THE DRAFT AS SALE CONSIDERATION WHICH HE W AS BOUND TO DO - REF. KISHAN CHAND CHELARAM (127 ITR 713 SC) 13. UNDER SIMILAR CIRCUMSTANCES, HON'BLE ITAT, AGRA BENCH IN THE CASE OF MUKESH KUMAR AGARWAL (ITA NO. 560/AG/2008) HAS H ELD THE SALE OF JEWELLARY AS GENUINE. - (COPY OF ORDER FILED P AGE 1-7) 14. THE APPELLANT ALSO RELY ON THE FOLLOWING DECISI ONS: 85 ITD 366 (HYD) - HARISH KUMARPGS 8-9 92 TTJ 1236 (MUM) - MANOHARLAL R DAGA PGS. 10-11 320 ITR 554 (MUM) - UTTAM CHAND JAIN PGS. 12-13 21 SOT 204 (HYD)-SHASHIKANT SHAH HUF PGS. 14-15 REG:GROUND NO. 2: 15. WHILE MAKING REASSESSMENT, THE LD AO ENHANCED P ROFESSIONAL INCOME FROM RS..147,378/- TO RS.2,00,0001/-. 16. THE APPELLANT WAS MAINTAINING REGULAR BOOKS OF ACCOUNTS AND HAD FILED PROFIT & LOSS A/C FOR HIS PROFESSIONAL ACTIVITIES A LONG WITH THE RETURN OF INCOME. 17. LD AO HAS NEITHER DISCARDED THE SAID P/L ACCOUN T NOR HAS COMMENTED ON ANY OF THE INCOME OR EXPENDITURE HEAD. 18. WITHOUT DOING SO HE HAS SIMPLY TAKEN THE INCOME AT RS.2,00,000/- WITHOUT ANY BASIS. HE HAS NOT GIVEN EVEN BASIS FOR ADOPTING THE INCOME AT THIS FIGURE. 19. THE ESTIMATION OF INCOME IS PURELY GUESS WORK. EVEN U/S 144 THE AO IS BOUND TO BASE HIS ESTIMATION ON SOME MATERIAL. IN T HIS CASE NO SUCH MATERIAL IS SPELT BY THE AO WHILE THE PROFIT & LOSS ACCOUNT WAS FILED BY THE ASSESSEE. REFERENCE IN THIS RESPECT IS MADE TO (A). 127 ITR 27 (MP) - GANGA PRASAD SHARMA (B). 115 ITR 524 (SC) - BRIJ BHUSHAN LAL PRADUMAN K UMAR 20. IN APPEAL LD. CIT(A) HAS ALSO CONFIRMED THE EST IMATION WITHOUT ANY LOGIC OR REASON. 21. IT IS HUMBLY SUBMITTED THAT THE PROFESSIONAL IN COME ESTIMATED BY THE AO BE DISCARDED AND THE INCOME RETURNED BY THE APPELLANT MAY KINDLY BE ALLOWED TO BE ASSESSED. 4. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORD ER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY. 7 5. I HAVE HEARD THE BOTH PARTIES AND PERUSED THE IM PUGNED ORDER PASSED BY THE REVENUE AUTHORITIES, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY ALONG WITH THE ARGUMENTS ADVANC ED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS WELL AS THE WRITTEN SUBMISSIONS ALO NG WITH PAPER BOOK AS WELL AS THE CITATIONS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE. I AM OF THE CONSIDERED OPINION THAT THE ISSUE INVOLVED IN GROUND NO. 1 REL ATING TO ADDITION OF RS.2,12,166/- MADE BY THE ASSESSING OFFICER AS INCO ME FROM OTHER SOURCES BY TREATING THE SALE PROCEEDS OF JEWELLERY AS BOGUS, A S UNPROVED. THIS ISSUE HAS BEEN DEALT BY ITAT, AGRA BENCH IN THE CASE OF INCOME-TAX OFFICER 4(2) AGRA VS. SHRI MUKESH KUMAR AGARWAL AND OTHERS IN ITA NO. 560/AGRA /2008 FOR A.Y. 1998-99 DATED 15.07.2009, IN WHICH THIS BENCH HAS DECLARED THE SALE OF JEWELLERY CLAIMED TO BE MADE BY THE ASSESSEE TO M/S. BISHAN CHAND MUKESH KUMAR AS GENUINE AND CONSEQUENTLY, DELETED THE ADDITION MADE BY THE ASSE SSING OFFICER AS INCOME FROM OTHER SOURCES TREATING THE SALE PROCEEDS OF JEWELLE RY AS BOGUS AND UNPROVED. THIS BENCH HAS DECLARED THE PURCHASER, M/S. BISHAN CHAND MUKESH KUMAR AS GENUINE. THE DECISION IN THE SAID CASE IN ITA NO. 560/AGRA/2 008 (SUPRA) HAS BEEN PASSED AND ADDITION HAS BEEN DELETED BY RESPECTFULLY FOLLO WING THE DECISION OF SPECIAL BENCH OF ITAT, DELHI IN THE CASE OF TEJINDER SINGH, HUF. THE LD. COUNSEL FOR THE ASSESSEE ALSO FILED COPIES OF VARIOUS OTHER OTHERS ON THE ISSUE IN DISPUTE DECIDED IN FAVOUR OF ASSESSEE DELETING THE SIMILAR ADDITIONS, WHICH I HAVE REPRODUCED IN PARA - 8 14 OF THE WRITTEN SUBMISSIONS OF THE ASSESSEE. I HA VE THOROUGHLY GONE THROUGH THE AFORESAID CITATIONS AND OF THE CONSIDERED OPINION T HAT THE ISSUE INVOLVED IN GROUND NO. 1 HAS ALREADY BEEN ADJUDICATED BY VARIOUS BENCH ES OF TRIBUNAL AND HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOL LOWING THE ORDER OF ITAT IN THE CASE OF INCOME-TAX OFFICER 4(2) AGRA VS. SHRI MUKES H KUMAR AGARWAL AND OTHERS IN ITA NO. 560/AGRA/2008 FOR A.Y. 1998-99 DATED 15. 07.2009 (SUPRA) WHICH HAS BEEN DECIDED ON THE BASIS OF DECISION OF SPECIAL BE NCH, I DELETE THE ADDITION OF RS.2,12,166/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LEARNED FIRST APPELLATE AUTHORITY. AS A RESULT, THE ISSUE INVOLVE D IN GROUND NO. 1 IS ALLOWED. 6. AS REGARDS TO THE ESTIMATION OF PROFESSIONAL INC OME AT RS.2,00,000/- AGAINST RS.1,47,378/- DECLARED BY THE ASSESSEE, AFTER HEARI NG BOTH THE PARTIES, I AM OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER AS WE LL AS THE LEARNED FIRST APPELLATE AUTHORITY HAS NOT EVEN PERUSED THE DOCUMENTARY EVID ENCE PRODUCED BY THE ASSESSEE BEFORE THEM AND HAS WRONGLY ESTIMATED THE INCOME SH OWN FROM MEDICAL PROFESSION AT RS.2,00,000/- AGAINST RS.1,47,378/- DECLARED BY THE ASSESSEE. THIS IS NOT PERMISSIBLE UNDER LAW. NO DOUBT, THE ASSESSING OFFI CER HAS COMPLETED THE ASSESSMENT U/S. 144/147 OF THE ACT AND THE LEARNED FIRST APPELLATE AUTHORITY HAS CONFIRMED THE SAME, BUT BOTH THE AUTHORITIES HAVE N OT EVEN SEEN THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE WITH THE ORIGINAL RE TURN AS WELL AS THE WRITTEN 9 SUBMISSION FILED BY THE ASSESSEE BEFORE THE LEARNED FIRST APPELLATE AUTHORITY. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, I AM NOT CONVINCED WITH THE IMPUGNED ORDER IN WHICH THE ASSE SSMENT ORDER HAS BEEN CONFIRMED AND THE ESTIMATE MADE BY THE ASSESSING OF FICER HAS BEEN CONFIRMED. THERE IS NO MATERIAL AND NO PLAUSIBLE REASONS MENTI ONED BY THE LEARNED FIRST APPELLATE AUTHORITY FOR UPHOLDING THE ESTIMATION OF RS.2,00,000/- AS AGAINST RS.1,47,378/- DECLARED BY THE ASSESSEE IN THE ORIGI NAL RETURN. I, THEREFORE, DELETE THE ADDITION OF RS.52,622/-, BEING THE DIFFERENCE BETWE EN THE INCOME ESTIMATED BY ASSESSING OFFICER AND THAT DECLARED BY THE ASSESSEE . THEREFORE, THE ADDITION INVOLVED IN GROUND NO. 2 IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.05.2011. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 27 TH MAY, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR