Sh. Jaspal Talwar, Ludhiana V. DCIT, Ludhiana

ITA 158/CHANDI/2011

• Counselvise Citation: 15821514 RSA 2011
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-01-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIKAS MAR WAH; GIRISH BHALLA
• Keywords: Unexplained investment; Depreciation; Set aside
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: A BENCH: CH ANDIGARH BEFORE SHRI H L KARWA, VP AND SHRI D K SRIVASTAVA, AM ITA NO. 158/CHD/2011 ASSESSMENT YEAR 2008-09 JASPAL TALWAR V. D.C.I.T. CENTRAL CIRCLE-II 996, URBAN ESTATE LUDHIANA FOCAL POINT, LUDHIANA APPELLANT BY : S/SHRI GIRISH BHALLA AND VIKAS MAR WAH RESPONDENT BY: SHRI AKHILESH GUPTA, DR DATE OF HEARING: 16.1.2012 DATE OF PRONOUNCEMENT: 23.01.2012 ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 16.12.2010, O N THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE A DDITION OF RS. 1,73,419/- OUT OF CAR EXPENSES, CAR INSURANCE AND C AR DEPRECIATION MADE BY THE AO. 2. THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE AD DITION OF RS. 29,50,000/- ON ACCOUNT OF:- A) ALLEGED UNEXPLAINED INVESTMENT IN PURCHASE OF JE WELLERY (RS. 23,60,000/-). B) PURCHASE OF HOUSEHOLD GOODS (RS. 3,40,000/-) AND C) RENOVATION OF RESIDENCE (RS. 2,50,000/-). 3. THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED AN ADD ITION OF RS. 4,39,410/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVEST MENT IN ACQUISITION OF JEWELLERY. 4. THAT THE LD. CIT(A) HAS WRONGLY FAILED TO DIRECT THE AO TO RECTIFY THE AMOUNT OF INTEREST CHARGED U/S 234B. 5. THAT THE LD. CIT(A) HAS WRONGLY FAILED TO PROPER LY CONSIDER AND APPRECIATE THE SUBMISSIONS MADE BY THE APPELLAN T DURING THE COURSE OF ASSESSMENT AS WELL AS THE APPELLANT PROCE EDINGS. 6. THAT THE ORDER PASSED BY THE LD. CIT(A) IS BAD I N LAW AS WELL AS ON FACTS. ITA NO. 158/CHANDI/2011 JASPAL TALWAR V. DCIT 2 7. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND BEFORE THE APPEAL IS FINALLY HEARD AND DISPOSED OFF . 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT S EARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT THE RESIDENTIAL PREM ISES OF THE ASSESSEE IN JULY 2011 PURSUANT TO WHICH INCRIMINATING MATERI ALS AND DOCUMENTS WERE RECOVERED. CASH AMOUNTING TO RS. 55.00 LAKHS AND JEWELLERY VALUED AT RS. 25,33,870/- WERE SEIZED. STATEMENT O F THE ASSESSEE WAS ALSO RECORDED. NOTICE U/S 142(1) OF THE INCOME-TAX ACT, 1961 WAS ISSUED ON 6.3.2009 PURSUANT TO WHICH THE ASSESSEE F ILED HIS RETURN OF INCOME ON 24.3.2009 RETURNING TAXABLE INCOME AT RS. 4,02,47,430/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE C LAIMED TO BE ENGAGED IN THE BUSINESS OF EARNING COMMISSION FROM DEALINGS IN PROPERTY. HE DECLARED TOTAL RECEIPT AT RS. 6,32,36 ,208/- AND NET PROFIT AT RS. 3,99,17,741/-. 3. APROPOS GROUND NO. 1, THE ASSESSEE WAS FOUND TO HAVE CLAIMED EXPENSES BEING CAR INSURANCE, CAR DEPRECIATION AND OTHER EXPENSES ON TWO CARS. IT IS NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAD CARRIED OUT ONLY ONE DEAL IN THE PURCHASE AND SALE OF PROPERTY IN THE WHOLE YEAR. ACCORDING TO THE AO TWO VEHICLES COULD NOT HAVE BEEN USED THROUGHOUT THE YEAR FOR CARRYING OUT ONLY ONE DEAL IN PROPERTY. HE THEREFORE DISALLOWED 50% OF THE EXPENSES ON CAR. O N APPEAL, THE LD. CIT(A) HAS CONFIRMED THE IMPUGNED DISALLOWANCE. LOO KING INTO THE NATURE OF BUSINESS OF THE ASSESSEE, QUANTUM OF INCO ME OFFERED BY HIM AND OTHER FACTS, IT IS CONSIDERED APPROPRIATE TO RE STRICT THE DISALLOWANCE TO 25% OF THE EXPENSES INCLUDING DEPRECIATION. WE ORDER ACCORDINGLY. 4. APROPOS GROUND NO. 2 AND 3, THE ASSESSEE WAS FOU ND TO HAVE SPENT A SUM OF RS. 29,50,000/- ON PURCHASE OF JEWELLERY, HOUSEHOLD GOODS AND RENOVATION OF RESIDENCE IN ADDITION TO FURTHER SUM OF RS. 4,39,410/- ON ACQUISITION OF JEWELLERY. THE ASSESSEE COULD NOT E XPLAIN THE DATE(S) ON WHICH THE AFORESAID EXPENSES WERE INCURRED SO AS TO LINK THEM WITH AVAILABILITY OF MONEY LATER SURRENDERED BY HIM. IN THIS VIEW OF THE MATTER, THE AO TREATED THE AFORESAID EXPENSES AS UN EXPLAINED AND CONSEQUENTLY TAXED THE SAME. ON APPEAL, THE LD. CI T(A) HAS CONFIRMED THE ADDITION. 5. IN SUPPORT OF APPEAL, THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE AMOUNT SURRENDERED BY THE ASSESSEE WAS DEP OSITED IN BANK ACCOUNT. THE IMPUGNED EXPENSES/INVESTMENTS WERE MAD E OUT OF WITHDRAWALS FROM THE SAID BANK ACCOUNT. ACCORDING TO HIM THE ASSESSEE ITA NO. 158/CHANDI/2011 JASPAL TALWAR V. DCIT 3 WAS IN A POSITION TO ESTABLISH THAT THE IMPUGNED EX PENSES WERE LINKED WITH THE CORRESPONDING WITHDRAWALS MADE FROM THE BA NK. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD. CIT(A ) AND THE AO IN THIS BEHALF AND RESTORE THE MATTER TO THE FILE OF AO FOR FRESH DECISION IN CONFORMITY WITH LAW AFTER GIVING REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE. IT IS CLARIFIED THAT THE BURDEN TO SATIS FACTORILY EXPLAIN THE NATURE AND SOURCE OF THE IMPUGNED EXPENSES/INVESTME NTS SHALL BE SQUARELY ON THE ASSESSEE AND IT WOULD BE FOR THE AS SESSEE TO ESTABLISH THAT THE IMPUGNED EXPENSES/INVESTMENT WERE MET OUT OF WITHDRAWALS. GROUND NOS. 2 AND 3 ARE TREATED AS ALLOWED FOR STAT ISTICAL PURPOSES. 6. APROPOS GROUND NO. 4, THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE LEVY OF INTEREST WAS CONSEQUENTIAL UPON AS SESSMENT. IN THIS VIEW OF THE MATTER, GROUND NO. 4 IS DISMISSED. 7. GROUND NOS. 5 AND 6 TAKEN BY THE ASSESSEE ARE GE NERAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 8. APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23.01.2012 SD/- SD/- (H L KARWA) (D K SRIVAS TAVA) VICE PRESIDENT ACCOU NANT MEMBER CHANDIGARH, 23.01.2012 SURESH COPY TO: 1. THE APPELLANT, SHRI JASPAL TALWAR 2. THE RESPONDENT, D.C.I.T. 3. THE CIT, LUDHIANA 4. THE CIT(A), LUDHIANA 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH ITA NO. 158/CHANDI/2011 JASPAL TALWAR V. DCIT 4