ITO, New Delhi V. Smt. Henrietta Deepti Sircar, New Delhi

ITA 1638/DEL/2013

• Counselvise Citation: 163820114 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VAGANTHAN
• Assessee Lawyers: SANJEEV BINDAL
• Keywords: Unexplained cash credit; Salary income; Opportunity of being heard; Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SMT. DIVA SINGH, JM AND SH. N. K. SAINI, AM ITA NO. 1638/DEL./2013 : ASSTT. YEAR : 2009-10 ITO WARD- 48(3) NEW DELHI VS HENRIETTA DEEPTI SIRCAR TYPE-V, QTR. NO. 31, BLOCK-5, LODHI ROAD COMPLEX, LODHI ROAD NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AYEPS1495H APPELLANT BY : SH. T. VAGANTHAN, SR. DR RESPONDENT BY : SH. SANJEE V BINDAL, C.A. DATE OF HEARING : 21.07.2015 DATE OF PRONOUNCEMEN T :02 .09.2015 ORDER PER N.K. SAINI, A.M. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 22/01/2013 OF THE LD. CIT(A)-XXX, NEW DELHI. 2. FOLLOWING GROUND HAVE BEEN RAISED IN THIS AP PEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN : (I) DELETING THE ADDITION OF RS. 38,13,500/- MADE BY TH E AO ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS WHICH REMINED UNEXPLAINED. (II) DELETING THE ADDITION OF RS. 7,53,800/- MADE ON ACC OUNT OF UNEXPLAINED CASH CREDIT FROM SUDHIR SINGHAL. (III) ERRED IN ACCEPTING THE CONTENTION OF THE ASSESSEE I N CONTRAVENTION OF RULE 46A THAT SHE WAS IN POSSESSIO N OF ITA NO.1638/DEL/2013 2 2.135KG JEWELLERY STATED TO HAVE BEEN PURCHASED AT THE TIME OF HER MARRIAGE IN THE YEAR 1996-97, EVEN THOUGH NO SUCH EVIDENCE WAS PRODUCED BY THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDING INSPITE OF SPECIFIC QUERRY TO THE ASSESSEE IN THE LETTER DATED 05.12.2011. (IV) ERRED IN ACCEPTING, ADDITIONAL EVIDENCES PRODUCED I N RESPECT OF SH. SUDHIR SINGHAL EVEN THOUGH THE ASSESSEE FAIL ED TO FILE CONFIRMATION, NATURE OF TRANSACTION AND PROVE CREDITWORTHINESS OF THE LOAN PROVIDER IN DISREGARD TO RULE 46A OF THE INCOME TAX RULES, 1962. 3. MAIN GRIEVANCE OF THE DEPARTMENT VIDE GROUN D NO. 3 AND 4 RELATES TO THE ACCEPTANCE OF THE NEW EVIDENCES IN VIOLATION OF THE PROVISIONS OF RULE 46A OF INCOME TAX RULES, 1962, THE ISSUE RAISED IN THESE G ROUNDS WAS ARGUED AT THE 1 ST INSTANCE. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SEE FILED THE RETURN OF INCOME ON 27.7.2009 DECLARING INCOME OF RS. 3,11,326/- WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT. LATER ON THE CASE WAS SELECTED FOR SCRU TINY. THE ASSESSEE FURNISHED THE COPIES OF THE BANK STATEMENT, FUND FLOW STATEM ENT AND EVIDENCES FOR SALE OF JEWELLERY. THE AO ASKED THE ASSESSEE TO EXPLAIN SOU RCE OF DEPOSITS/INVESTMENT OF RS. 19,31,000/- WITH ICICI BANK AND RS. 18,82,50 0/- WITH CITI BANK. THE AO OBSERVED THAT THE ASSESSEE DID NOT COMPLY WITH THE REQUIREMENTS OF THE NOTICES / LETTERS. HE THEREFORE FRAMED THE ASSESSMENT EX PART E U/S 144 OF THE ACT AND MADE THE ADDITION OF RS. 38,13,500/- (RS. 19,31,000 + 1 8,82,500) . THE AO DID NOT ACCEPT THIS EXPLANATION OF THE ASSESSEE THAT THE D EPOSITS OF RS. 23,00,975/- WAS OUT OF THE SALE OF JEWELLERY. HE ALSO MENTIONED THA T THE DATEWISE FUND FLOW STATEMENT REVEALED THAT THERE WAS NEGATIVE CASH BAL ANCE. THE AO ALSO MADE THE ADDITION OF RS. 7,53,800/- WHICH WAS CLAIMED TO BE TRANSFERRED TO THE BANK ACCOUNT OF THE ASSESSEE FROM THE ACCOUNT OF SRI SUD HIR SINGHAL. ITA NO.1638/DEL/2013 3 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MAT TER TO THE LD. CIT(A) WHO REPRODUCED THE SUBMISSIONS OF THE ASSESSEE IN THE IMPUGNED ORDER, THEREAFTER THE PART OF THE ASSESSMENT ORDER HAS BEEN REPRODUCE D. THE LD. CIT(A) IN MOST OF THE PART OF THE IMPUGNED ORDER REPRODUCED THE SUBMI SSIONS OF THE ASSESSEE AND THE OBSERVATION OF THE AO IN ASSESSMENT ORDER THEN SUSTAINED THE ADDITION OF RS. 1,00,000/- ON ESTIMATE BASIS AND ALSO WORKED OUT T HE LONG THE LONG TERM CAPITAL GAIN ON SALE OF JEWELLERY AT RS. 1,99,091/- BY OBS ERVING AS UNDER :- THE REPLY OF THE APPELLANT IS IN PARAGRAPH 2, 3, 4 & 5 OF HIS WRITTEN SUBMISSION REPRODUCED AS ABOVE. THE APPELLA NT SAYS THAT ACTUAL CASH DEPOSIT IS RS.36,30,500. WHEREAS THE A .O. HAD MADE EXCESS ADDITION OF TWO LAKH RUPEES. THE APPELLANTS OTHER PLEA IS THAT HE HAD INTRODUCED CASH OUT OF SALE OF JEWELLERY OF RS. 23,00,975/- MADE ON 04.01.2008; 25.05.2008; 27.10.2008 AND 14.0 1.2009 IN LOCAL MARKET OF MODI NAGAR TO SMALL JEWELERS WHICH THE A.O HAD NOT CONSIDERED AT ALL AS SUFFICIENT EXPLANATION. THE AP PELLANTS ARS PLEADED THAT THE JEWELLERY WAS 2.135 KG PURCHASED I N 1996-97 AT THE RATE OF 5,160/- PER 10 GRAM AT THE TIME, OF MARRIAG E OF APPELLANT. THEY ADMITTED THAT THERE WILL BE CAPITAL GAINS OF 1,99,0 91/- ON SUCH GOLD SALE AFTER FOLLOWING COSTS INFLATION INDEX OF 1996- 97 AND COST INFLATION INDEX AT 582 FOR F.Y. 2008-09. THUS, THERE WILL BE A CAPITAL GAIN TAX OF RS. 41,013/- WHICH THE APPELLANT HAS AGGRIEVED TO P AY. THE APPELLANTS FINANCIAL CONDITION AT PRESENT IS VERY BAD AS PER THE ARS. SHE IS NOT HAVING THE MONEY TO PAY TAX AT THIS MOME NT. HOWEVER, KEEPING IN VIEW OF PURCHASING GOLD OF 2 KG AT THE T IME OF HER MARRIAGE IN 1996-97 APPEARS TO BE EXCESSIVE. CONSID ERING THE FACTS AND THE CIRCUMSTANCES OF THE CASE, I DEEM IT PROPER TO ASSUME AN ADDITIONAL INCOME OF RUPEES ONE LAKH IN THE HANDS O F THE APPELLANT TO BE HER INCOME AS INCOME FROM OTHER SOURCES. BESIDES SHE WILL PAY CAPITAL GAIN TAX OF RS. 41,013/-. THUS, THE A.O. WI LL CHARGE TAX AND INTEREST ACCORDINGLY. (ADDITION OF RUPEES ONE LAKH) . THE APPELLANT SECOND GROUND OF ADDITION IS ON SECUR ED LOAN OF RS. 07,53,800/- TAKEN FROM HER COLLEAGUE SH. SUDHIR SIN GHAL THROUGH BANKING CHANNEL AND WHICH HAS BEEN REPAID BY THE AP PELLANT BY NEFT MODE FROM 30.04.2008 TO 03.01.2012 AND LOAN FROM CO MPANY COMPLETELY SECURED UP. THE ADDITION OF RS. 7,53,800 /- IS NOT AT ALL ITA NO.1638/DEL/2013 4 JUSTIFIED. HENCE, THE ADDITION OF RS. 7,53,800/- MA DE BY THE A.O. IS DELETED. THE TOTAL INCOME OF APPELLANT IS AS UNDER :- 3,11,326/- INCOME FROM SALARY ADD: ESTIMATED INCOME OF RS. 1,00,000/- FROM OTHER SOURCES AS DISCUSSED IN PARA 1,00,000/- 4,11,326/- LTCG ON SALE OF GOLD / JEWELLERY = 1,99,091/- TAX @ 20.6% PAYABLE = 41,013/- THE A.O. WILL COMPUTE TAX AND INTEREST ON TOTAL INC OME OF RS. 4,11,326/- SEPARATELY AND ALSO COLLECT LTCG OF 41,0 13/- FROM APPELLANT. NOW THE DEPARTMENT IS IN APPEAL. 6. THE LD. DR SUBMITTED THAT THE LD. CIT(A) ALLO WED THE RELIEF TO THE ASSESSEE WITHOUT ASSIGNING ANY COGENT REASON AND THAT HE HA S ACCEPTED THE ADDITIONAL EVIDENCES WITHOUT CONFRONTING THE SAME TO THE AO. IT WAS FURTHER STATED THAT THE LD. CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE WITHO UT ASKING ANY REPORT FROM THE AO OR CONFRONTING THE DOCUMENTS FURNISHED BY THE AS SESSEE FIRST TIME BEFORE HIM IN VIOLATION OF THE PROVISIONS OF RULE 46A OF THE I.T.RULES, 1962. 7. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND F URTHER SUBMITTED THAT THE AO FRAMED THE ASSESSMENT U/S 144 OF THE ACT AND DID NOT GIVE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THEREF ORE THE NEW EVIDENCES IN THE FORM OF BILLS AND JEWELLERY ETC. WERE FURNISHED BEF ORE THE LD. CIT(A) WHO ACCEPTED THE SAME AND AFTER PROPER EXAMINATION OF T HESE DOCUMENTS ALLOWED THE RELIEF TO THE ASSESSEE. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT C ASE, IT IS AN ADMITTED FACT THAT ITA NO.1638/DEL/2013 5 THE LD. CIT(A) ACCEPTED THE NEW EVIDENCES AND DID N OT CONFRONT THE SAME TO THE AO FOR HIS COMMENT. HE ALSO DID NOT ASK THE AO TO FURNISH THE REMAND REPORT ON THE ADDITIONAL EVIDENCE/ DOCUMENTS PRODUCED BY T HE ASSESSEE FIRST TIME BEFORE HIM. IN THE PRESENT CASE, IT IS ALSO NOTICED THAT T HE AO FRAMED THE ASSESSMENT EX PARTE AND MADE THE IMPUGNED ADDITIONS. WE THEREFORE CONSIDERING THE TOTALITY OF THE FACTS, DEEM IT APPROPRIATE TO SET ASIDE THIS CA SE BACK TO THE FILE OF THE AO TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW, AFTE R PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE AND NOT TO SEEK UNWARRANTED O R UNDUE ADJOURNMENTS. 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS ALL OWED FOR STATISTICAL PURPOSESE. (ORDER PRONOUNCED IN THE COURT ON 02/09/2015). SD/- SD/- (DIVA SINGH) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 02/ 0 9/2015 *BINITA* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT BY ORDE R ASSTT. REGISTE R ITA NO.1638/DEL/2013 6 DATE INITIAL 1. DRAFT DICTATED ON 28.08.2015 2. DRAFT PLACED BEFORE AUTHOR 28.08.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 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.