ITO, Ward - 29(2), Kolkata, Kolkata V. Alpa Mihir Shah, Kolkata

ITA 17/KOL/2010

• Counselvise Citation: 1723514 RSA 2010
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 04-01-2010
• Court: TRIBUNAL
• Department Lawyers: P C NAYAK
• Assessee Lawyers: A BANERJEE
• Keywords: Unexplained investment; Source of fund
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - C , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . , , SHRI C.D. RAO, ACCOUNTANT M EMBER . / I.T.A.NO. 17/KOL/2010 / ASSESSMENT YEAR 2005 - 06 INCOME - TAX OFFICER, WARD 29(29), KOLKATA. - - - VERSUS - . ALPA MIHIR SHAH, 1/26, RUP CHAND MUKHERJEE LANE, KOLKATA 25 \ PAN ALTPS 5865 P ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.C.NAYAK, DR / FOR THE RESPONDENT : / SHRI A.BANERJEE, AR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE REVENUE HAS FILED THIS APPEAL AGAINST ORDER DT.14.10.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEAR 2005 - 06. 2. GROUNDS OF THE APPEAL RAISED BY THE REVENUE READ AS UNDER : (I) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS NOT JU STIFIED IN DELETING THE ADDITION U/S.69 OF RS.28,.15,968 WHEN THE INVESTMENT WAS DISCLOSED NEITHER IN THE BALANCE SHEET OF ASSESSEE NOR IN ASSESSEES HUSBAND BALANCE SHEET. (II) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS NOT JUSTIFIED IN HIS OBSERVATION THAT PROFIT O F RS .1,21,351 ON REDEMPTION OF MFS IS INCLUDED IN THE SHARE DEALING PROFIT RS.2788993 OFFERED IN THE P & L A/C OF HUSBAND . (III) THAT IN THE FACTS AND CIRCUMSTANCES, AS WELL AS UNDER THE LAW LD. CIT(A) WAS NOT JUSTIFIED TO PLACE RELIANCE ON THE JOINT A/C. NO.15876 HELD WITH ABN AMRO BANK WHICH WAS NEITHER PRODUCED IN THE ASSESSMENT PROCEEDINGS NOR POST. ASSESSMENT PROCEEDINGS BEFORE A.O. 3. THE RELEVANT FACTS ARE THAT D URING THE COURSE OF ASSESSMENT, THE ASSESSING OFFIC ER FOUND THAT A TOTAL SUM OF RS.28,15,968 HAD BEEN INVESTED IN THE NAME OF THE ASSESSEE IN DIFFERENT MUTUAL FUNDS ( TABULATED IN SECOND PARAGRAPH OF THE / I.T.A.NO.17/KOL/2010 2 ASSESSMENT ORDER), DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE A SSESSING OFFICER OBSERVED THAT THOUGH THE SAID INVESTMENT S STOOD IN ASSESSEES NAME, THE FINANCE THEREOF WAS ACCOMMODATED BY HER HUSBAND FROM HIS BANK ACCOUNT. THE ASSESSING OFFICER FURTHER STATED THAT THE ASSESSEE COULD NOT PRODUCE THE BANK ACCOUNT OF HER HUSBAND. FURTHER THE ASSESSEE WAS NOT ABLE TO EXPLAIN WHY THE AFORESAID INVESTMENTS IN ASSESSEES NAME WAS NOT REFLECTED IN ASSESSEES BALANCE SHEET WHEN INVESTMENT WERE MADE BY DEBITING ASSESSEES BANK ACCOUNT. THEREFORE, THE ASSESSING OFFICER HELD THAT THE SOURCE OF THE AFORESAID INVESTMENT OF RS.28,15,968 REMAINED UNEXPLAINED. ACCORDINGLY, HE ADDED THE SAID AMOUNT OF RS.28,15,968 TO THE TOTAL INCOME OF THE ASSESSEE U/S.69 OF THE ACT AS UNEXPLAINED INVESTMENT. FURTHER ON THE GROUND THAT NO GAIN TOTALING TO RS.1,21,351 ON SWITCH IN/REDEMPTION OF THE MUTUAL FUNDS IN FRANKLIN TEMPLETON MF,HDFC MUTUAL FUND , AND HDFC CAPITAL BUILDERS FUND WERE OFFERED FOR TAXATION AND THE ASSESSING OFFICER ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LEARNED CIT(A) DELETED BOTH TH E SE ADDITION S . AGGRIEVED, THE REVENUE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 4. THE LEARNED DR SUBMITTED THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE COULD NOT CO - RELATE THE INVESTMENT IN THE MUTUAL FUND THAT IT WAS TRANSFERRED FROM HER HUSBAND ACCOUNT T O THE JOINT ACCOUNT OF THE ASSESSEE AND HER HUSBAND. HE SUBMITTED THAT THE LEARNED CIT(A) HAS NOT CONSIDER ED THIS ASPECT OF THE CASE. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT COPY OF THE JOINT ACCOUNT WAS SUBMITTED ALSO TO THE ASSES SING OFFICER AND REFERRED TO PAGE 21 OF THE PAPER BOOK WHICH IS A COPY OF THE LETTER DT.13.12.2007 ADDRESSING TO THE ASSESSING OFFICER. HE SUBMITTED THAT IN THE SAID LETTER IT IS SPECIFICALLY MENTIONED THAT COPY OF THE BANK STATEMENT FOR FY 2004 - 05 IN SB A CCOUNT NO.158976 IS ENCLOSED. HE SUBMITTED THAT THE SAID LETTER WAS FILED AT THE TIME OF ORIGINAL ASSESSMENT MADE BY THE ASSESSING OFFICER. THE LEARNED AR OF THE ASSESSEE FURTHER REFERRED TO PAGES 29 AND 30 OF THE PB AND SUBMITTED THAT THE SAID DETAILS WER E ALSO FILED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LEARNED CIT(A) IN RESPECT OF THE INVESTMENT IN MUTUAL FUND AND ALSO THE SOURCE OF THE INVESTMENT. THE LEARNED AR OF THE ASSESSEE FURTHER REFERRED TO PAGE 16 OF THE PB, WHICH IS A COPY OF THE L ETTER DT.15.9.2009 FILED IN CONNECTION WITH THE REMAND REPORT REQUISITIONED BY THE / I.T.A.NO.17/KOL/2010 3 LEARNED CIT(A) AND SUBMITTED THAT IN THE SAID LETTER THE ASSESSEE HAS SPECIFICALLY STATED THAT THE INVESTMENT MADE IN THE MUTUAL FUND HAS BEEN MADE FROM THE SAVINGS BANK ACC OUNT NO.158976 WITH ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA, WHICH IS IN THE JOINT NAMES O F THE ASSESSEE AND HER HUSBAND, AND THE EN TIRE FUND IN THE SAID JOINT ACCOUNT WAS TRANSFERRED FROM THE CURRENT ACCOUNT NO.109373 WITH THE ABOVE BANK HELD IN THE NA ME OF M/S.M.K.SHAH & CO., OF WHICH SRI MIHIR KUMAR KISHOREDAS SHAH, HUSBAND OF THE ASSESSEE IS THE SOLE PROPRIETOR. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER PREPARED THE REMAND REPORT ON THE BASIS OF INFORMATION GIVEN BY THE ASSE SSEE AND THE LEARNED CIT(A) CONSIDERING THE ABOVE FACTS HAS RIGHTLY DELETED THE ADDITION S . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND CAREFULLY GONE THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND ALSO THE MATERIALS PLACED ON R ECORD. WE FIND THAT THE LEARNED CIT(A) AFTER EXAMINING THE EVIDENCE PRODUCED BY THE ASSESSEE AND ALSO CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER HAS DELETED BOTH THE ADDITIONS FOR THE REASONS DISCUSSED IN PARAGRAPH 10 OF HIS ORDER. THE SAID PAR AGRAPH 10 OF THE ORDER OF THE LEARNED CIT(A) IS REPRODUCED AS UNDER : 10. AFTER CAREFUL CONSIDERATION OF THE DOCUMENTARY EVIDENCES AND THE A.OS REPORT, I AM OF THE OPINION THAT THE VIEW TAKEN BY THE A.O. IN THE ASSESSMENT PROCEEDINGS AS WELL AS REMAND P ROCEEDINGS CANNOT BE APPROVED. ON PERUSAL OF BANK STATEMENT OF M/S. M. K. SHAH & CO. FOR THE RELEVANT PERIOD, IT IS OBSERVED THAT THE APPELLANTS HUSBAND HAS TRANSFERRED THE FUNDS ON VARIOUS DATES TO THE JOINT SAVING ACCOUNT HELD IN THE NAME OF APPELLANT A ND HER HUSBAND. FURTHER, ON EXAMINATION OF COPY OF BANK STATEMENT OF JOINT SAVING ACCOUNT, IT IS OBSERVED THAT THE CHEQUES WERE ISSUED FOR THE PURPOSE OF INVESTMENT IN MUTUAL FUNDS IN THE NAME OF APPELLANT. IT IS ALSO OBSERVED THAT BOTH OF THESE BANK ACCOU NTS ARE THE DECLARED BANK ACCOUNTS OF THE APPELLANT AND HER HUSBAND. SINCE, THE SOURCE OF FUND FOR INVESTMENT IN MUTUAL FUND IN THE NAME OF APPELLANT WAS THE APPELLANTS HUSBANDS MONEY, HENCE THE INVESTMENT AS WELL AS THE INCOME THEREON WAS REFLECTED IN T HE RETURN OF INCOME OF SHRI MIHIR K. SHAH. / I.T.A.NO.17/KOL/2010 4 ON PERUSAL OF BALANCE SHEET OF SHRI MIHIR K. SHAH AS ON 31.03.2005, IT IS SEEN THAT THE INVESTMENT IN STOCKS AND SHARES HAS BEEN DISCLOSED AT RS.21,47,556/ - WHICH INCLUDES INVESTMENT IN MUTUAL FUNDS IN THE NAME OF APPELLANT I.E. SMT. ALPA M. SHAH AMOUNTING TO RS.14,39,113/ - HOLD BY HIM AS ON 31.03.2005. O N PERUSAL OF PROFIT & LOSS ACCOUNT OF SHRI MIHIR K. SHAH FOR THE YEAR ENDED ON 31.03.2005, IT IS SEEN THAT HE HAS CREDITED AN AMOUNT OF RS.2,78,993/ - ON ACCOUNT OF PROFIT FROM SHARE DEALING. THE CREDIT OF RS.2,78,993/ - CONSIST OF PROFIT FROM INVESTMENT IN MUTUAL FUNDS IN THE NAME OF SMT. ALPA M. SHAH AMOUNTING TO RS.1,21,351/ - , PROFIT FROM INVESTMENT IN MUTUAL FUNDS IN THE NAME OF SELF I.E. MIHIR K. SHAH AMOUNTING T O RS.48,023/ - AND PROFIT FROM SHARE DEALING AMOUNTING TO RS.1,09,019/ - . THE A.O. HAS MADE AN ADDITION OF RS.1,21,351/ - IN THE HANDS OF APPELLANT ON ACCOUNT OF REDEMPTION/SWITCH OVER OF THE MUTUAL FUND AND IT IS SEEN FROM THE RETURN OF INCOME OF APPELLANTS HUSBAND THAT THE SAID INCOME OF RS.1,21,351/ - HAS ALREADY BEEN DISCLOSED BY HIM IN HIS RETURN OF INCOME. IN THE ASSESSMENT ORDER THE A.O. HAS MADE ADDITION OF RS.28,15,968/ - U/S. 69 OF THE I. T. ACT ON ACCOUNT OF INVESTMENT IN MUTUAL FUNDS. ON PERUSAL OF BALANCE SHEET IN THE CASE OF APPELLANTS HUSBAND IT IS SEEN THAT HE HAS DECLARED INVESTMENT IN MUTUAL FUNDS IN THE NAME OF HIS WIFE ALPA MIHIR SHAH AMOUNTING TO RS.14,39,113/ - AS ON 31.03.2005 AND THE MUTUAL FUNDS AMOUNTING TO RS.13,76,855/ - WERE REDEEMED DURING THE RELEVANT PREVIOUS YEAR ONLY ON WHICH INCOME OF RS.1,21,351/ - WAS EARNED. THUS, FROM THE DOCUMENTS SUBMITTED BY THE APPELLANT, IT IS APPARENT THAT BOTH THE INVESTMENT IN MUTUAL FUNDS AMOUNTING TO RS.28,15,968/ - AS WELL AS THE INCOME OF RS.1,21,35 1/ - HAS BEEN DULY ACCOUNTED FOR IN THE HANDS OF APPELLANTS HUSBAND FOR A.Y. 2005 - 06 WHICH WAS ALSO ACCEPTED BY THE A.C.I.T., CIRCLE - 35, KOLKATA IN HIS ORDER U/S. 143(3) OF THE ACT DATED 30.11.2007. I DO NOT FIND SUBSTANCE IN THE OBSERVATION OF THE A.O. T HAT THE APPELLANT AND HER HUSBAND HAS NOT SHOWN THEMSELVES AS DEBTOR AND CREDITOR TO EACH / I.T.A.NO.17/KOL/2010 5 OTHER IN THEIR RESPECTIVE BALANCE SHEETS. WHEN THE ENTIRE INVESTMENT WAS MADE BY THE APPELLANTS HUSBAND, THOUGH PARTLY IN THE NAME OF APPELLANT, FROM HIS OWN SOURCES OF INCOME AND HE HIMSELF HAS DECLARED THE INVESTMENT AS WELL AS INCOME IN HIS OWN RETURN OF INCOME, THERE WAS NO REQUIREMENT FOR SHOWING THEMSELVES AS DEBTOR AND CREDITOR IN THEIR BALANCE SHEETS. IT IS NOT THE CASE OF THE A.O. THAT THE SOURCE OF INVESTMEN T HAS NOT BEEN PROVED OR THE BANK ACCOUNTS FROM WHERE INVESTMENT WAS MADE WERE NOT THE DISCLOSED BANK ACCOUNTS. IN VIEW OF ABOVE, IT IS HELD THAT THE APPELLANT HAS EXPLAINED THE SOURCE OF INVESTMENT IN THE MUTUAL FUNDS AND THE INVESTMENT AS WELL AS THE INC OME THEREON HAS BEEN DULY ACCOUNTED FOR AND DECLARED IN THE RETURN OF INCOME OF THE APPELLANTS HUSBAND. THE A.O., THEREFORE, WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.28,15,968/ - U/S. 69 OF THE 1. T. ACT. AND ADDITION OF RS.1,21,351/ - ON ACCOUNT OF SHORT TERM CAPITAL GAIN. THE A.O. IS DIRECTED TO DELETE THE BOTH THE ADDITIONS. THE GROUND NOS. 2 TO 6 ARE ALLOWED. WE FIND THAT THE ORDER OF THE LEARNED CIT(A) IS SELF - EXPLANATORY. THE ASSESSEE HAS CONCLUSIVELY PROVED BY PRODUCING NECESSARY EVIDENCE THAT INVESTMENT MADE IN THE MUTUAL FUND HAS BEEN MADE FROM THE SAVINGS BANK ACCOUNT NO.158976 WITH ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA, WHICH IS IN THE JOINT NAMES OF THE ASSESSEE AND HER HUSBAND, AND THE ENTIRE FUND IN THE SAID JOINT ACCOUNT WAS TRAN SFERRED FROM THE CURRENT ACCOUNT NO.109373 WITH THE ABOVE BANK HELD IN THE NAME OF M/S.M.K.SHAH & CO., OF WHICH SRI MIHIR KUMAR KISHOREDAS SHAH, HUSBAND OF THE ASSESSEE IS THE SOLE PROPRIETO R. THE AMOUNT OF INVESTMENT AND INCOME THERE FROM HAS DULY BEEN D ISCLOSED BY SHRI MIHIR KUMAR KISHOREDAS SHAH IN HIS ACCOUNTS AS WELL AS IN HIS RETURN. IN VIEW OF THIS, IN OUR CONSIDERED OPINION, THE LEARNED CIT(A) IS VERY MUCH JUSTIFIED IN HOLDING THAT WHEN THE ENTIRE INVESTMENT WAS MADE BY THE APPELLANTS HUSBAND, TH OUGH PARTLY IN THE NAME OF APPELLANT, FROM HIS OWN SOURCES OF INCOME AND HE HIMSELF HAS DECLARED THE INVESTMENT AS WELL AS INCOME IN HIS OWN RETURN OF INCOME, THERE WAS NO REQUIREMENT FOR SHOWING THEMSELVES AS DEBTOR AND CREDITOR IN THEIR BALANCE SHEETS. / I.T.A.NO.17/KOL/2010 6 T HUS THE SOURCE OF FUNDS INVESTED IN MUTUAL FUNDS IN THE NAME OF THE ASSESSEE HAVING BEEN WELL PROVED, THE ADDITION OF RS.28,15,968 AS UNEXPLAINED INVESTMENT U/S.69 IN THE HANDS OF THE ASSESSEE AND ALSO THE ADDITION OF RS.1,21,351 BEING THE GAIN ON SWITCH I N/REDEMPTION OF THE MUTUAL FUNDS IN FRANKLIN TEMPLETON MF,HDFC MUTUAL FUND , AND HDFC CAPITAL BUILDERS FUND, AS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE IS NOT AT ALL JUSTIFIED, WHICH THE LEARNED CIT(A) HAS RIGHTLY DELETED AFTER MAKIN G VERIFICATION FROM THE ACCOUNTS OF BOTH THE ASSESSEE AND HER HUSBAND AND ALSO CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL TAKEN BY THE REVENUE AND AS SUCH, WE UPHOLD THE IMPUGNED ORD ER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 11.06.2010 SD/ - SD/ - ( . . ) (C.D. RAO), ACCOUNTANT MEMBER ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE : 11.6.2010 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : INCOME - TAX OFFICER, WARD 29(29), KOLKATA. 2 / THE RESPONDENT - ALPA MIHI R SHAH, 1/26, RUP CHAND MUKHERJEE LANE, KOLKATA 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , ( / ) H.K.PADHEE / SNR.PRIVATE SECRETARY. / I.T.A.NO.17/KOL/2010 7 / DEPUTY REGISTRAR .