The ITO, 3(2), V. Smt. Viraj Jaiswal,

ITA 177/IND/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0043 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 04-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S S DESH
• Keywords: Gift; Additional evidence
• Section: 133A; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI M.L.GUSIA,A.M. PAN NO. : ADAPJ6222A I.T.A.NO.177/IND/2008. A.Y. : 2003-04 INCOME-TAX OFFICER, SMT.VIRAJ JAISWAL, 3(2), VS P/O M/S. MAYO HOSPITAL, BHOPAL. SULTANIA ROAD, BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SMT.APARNA KARAN, ADDL. CIT DR RESPONDENT BY : SHRI S.S.DESHPANDE, C. A. O R D E R PER GUSIA, A.M. THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A)-II, BHOPAL, ON 22.1.2008 FOR THE ASSESSM ENT YEAR 2003-04. 2. THE FIRST AND THIRD GROUNDS OF APPEAL READ AS UNDER :- -: 2 :- 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN :- 1. DELETING THE ADDITION OF RS. 2,10,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INCOME IN THE FORM OF GIFT RECEIVED FROM SHRI O.P.SHARMA. 3. ADMITTING THE FRESH EVIDENCES PRODUCED BY THE ASSESSEE AT THE APPELLATE STAGE IN CONTRAVENTION OF RULE 46A(1)(B) THOUGH THE ASSESSEE WAS NOT PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER. 3. FACTS OF THE CASE ARE THAT THE AO FOUND THAT IN THE CAPITAL ACCOUNT OF THE ASSESSEE WITH THE FIRM M/S. MAYO HOS PITAL, THERE ARE CREDITS FOR TWO GIFTS FROM HER FATHER. THE CREDITS SHOWN IN THE CAPITAL ACCOUNT ARE AS UNDER :- -: 3 :- 3 GIFT FROM SHRI O.P.SHARMA ( FATHER) 1) FDR BABY ASHLESHA ( DAUGHTER OF THE ASSESSEE) RS. 1,10,000/- 2) NSC DR.VIRAJ JAISWAL (ASSESSEE) RS. 1,00,000 /- RS. 2,10,000/- 4. ACCORDING TO THE AO, THE ASSESSEE WAS ASKED TO PROV E THE CAPACITY, GENUINENESS AND IDENTITY OF THE DONOR, HI S COPY OF BANK ACCOUNT. HOWEVER, THE ASSESSEE COULD SUPPLY ONLY TH E ADDRESS OF THE FATHER STATING THAT HE IS A RETIRED ENGINEER, BUT H AS NOT FURNISHED THE PAN OF THE DONOR, THE BANK PASS BOOK AND CONFIRMATI ON OF THE DONOR. THUS, THE ADDITION OF RS. 2,10,000/- WAS MADE BY TH E ASSESSING OFFICER. DURING THE COURSE OF HEARING BEFORE CIT(A) , THE ASSESSEE MADE AN APPLICATION UNDER RULE 46-A DATED 15.6.2007 FOR FURNISHING ADDITIONAL EVIDENCE FOR THE FIRST TIME. THE REASON FOR NOT FURNISHING THOSE EVIDENCES BEFORE THE AO WAS THAT THE SURVEY U /S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE FIRM M/ S. MAYO HOSPITALS ON 11.12.2002 AND THE ASSESSMENT PROCEEDINGS OF FIRM M /S. MAYO HOSPITAL -: 4 :- 4 AND TWO PARTNERS I.E. ASSESSEE AND HER HUSBAND WERE TAKEN UP BY THE ASSESSING OFFICER SIMULTANEOUSLY. THEREFORE, THE MA IN CASE WAS OF THE FIRM AND WHOLE CONCENTRATION OF THE AO AND THE ASSE SSEES CONCERN WAS ON THE FIRMS CASE. THE AO HAS NOT COMMUNICATED DEF ICIENCY IN ASSESSEES EXPLANATION TILL THE END OF THE ASSESSME NT PROCEEDINGS AND SHE COULD COME TO KNOW ON RECEIPT OF THE ASSESSMENT ORDER. THEREFORE, THE BANK ACCOUNT OF THE FATHER AND HIS CONFIRMATION LETTER AND DETAILS OF PERMANENT ACCOUNT NUMBER WERE REQUIRED TO BE FURNIS HED AT THE APPELLATE STAGE. WE NOTED THAT THE CIT(A) FORWARDED ALL THESE ADDITIONAL DOCUMENTS TO THE AO FOR HIS COMMENTS THR OUGH THE ADDL. CIT, RANGE III. THE AO VIDE LETTER DATED 11.1.2008 REPORTED TO THE CIT(A) THAT DURING COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE WAS SPECIFICALLY ASKED TO PROVE CAPACITY, GENUINENESS A ND IDENTITY OF THE DONOR ALONGWITH BANK ACCOUNT OF THE DONOR, BUT THE ASSESSEE COULD FURNISH ONLY THE ADDRESS OF THE DONOR AND THE REMAI NING INFORMATION/EVIDENCE WERE NOT FURNISHED BEFORE THE AO, HENCE, HE OBJECTED ADMISSION OF ADDITIONAL INFORMATION FILED DURING THE COURSE OF -: 5 :- 5 APPELLATE PROCEEDINGS IN VIOLATION OF PROVISIONS OF RULE 46A OF THE INCOME TAX RULES. HOWEVER, THE CIT(A) ON THE BASIS OF THESE ADDITIONAL EVIDENCES OBSERVED THAT THE CAPITAL ACCO UNT OF THE ASSESSEE IN THE BOOKS OF THE FIRM M/S. MAYO HOSPITAL, BHOPAL, I N WHICH CREDIT ENTRY AGGREGATING TO RS. 2.10 LAKHS ARE APPEARING, WHICH ARE VERIFIABLE WITH THE CORRESPONDING ENTRIES IN THE BANK ACCOUNT OF ASSESSEES FATHER, RS. 60,000/- ON 4.4.2002 AND RS. 50,000/- ON 25.10. 2002 ARE THE TRANSFERS BY CHEQUES FROM HER FATHERS BANK ACCOUNT . THE OTHER AMOUNT OF RS. 1 LAKH APPEARING IN THE CAPITAL ACCOUNT OF T HE ASSESSEE IN THE BOOKS OF MAYO HOSPITAL IS ALSO VERY MUCH VERIFIABLE FROM THE CORRESPONDING BANK ENTRIES IN THE DENA BANK ACCOUNT OF THE ASSESSEES FATHER. THE EXPLANATION OF THE ASSESSEE THAT HER FA THER ISSUED A CHEQUE TO O.P.KHURANA, NSC AGENT FOR PURCHASE OF NSCS WAS ALSO FOUND CORRECT FORM THE FACT THAT THE PHOTOCOPIES OF THE N SCS AS FURNISHED BEFORE HIM CARRIES SIGNATURE OF O.P.KHURANA AS AUTH ORIZED AGENT AND THIS FACT IS ALSO REFLECTED IN THE CAPITAL ACCOUNT OF THE ASSESSEE WITH THE FIRM MAYO HOSPITAL. FURTHER, THE CONFIRMATION LETTE R OF HER FATHER -: 6 :- 6 REVEALS ALL THE CHEQUE NUMBERS AND THE FACTUM OF PU RCHASE OF NSCS IN THE NAME OF ASSESSEE, THE PERMANENT ACCOUNT NUMBER OF THE FATHER OF THE ASSESSEE HAS BEEN GIVEN AND EXPLAINED THE SOURC E OF INCOME. THE CIT(A) HELD THAT THE PRECISE PURPOSE OF RULE 46A IS TO GIVE AN OPPORTUNITY TO THE AO TO MAKE COMMENTS ON THE EVIDE NCE SO PRODUCED AFTER COMPLETION OF ASSESSMENT PROCEEDINGS. HE FURT HER HELD THAT THE ASSESSEE CANNOT BE STOPPED FROM PRODUCING EVIDENCE AT ANY STAGE OF ASSESSMENT/APPELLATE PROCEEDINGS, AS IT IS HIS OR H ER RIGHT TO DO SO TO DERIVE HOME THAT A PARTICULAR CLAIM IS ALLOWABLE. T HEREFORE, THE EVIDENCES SO PRODUCED CANNOT BE BRUSHED ASIDE. IT I S FURTHER HELD THAT THE AO IS EXPECTED TO EXAMINE THE EVIDENCE SO PRODU CED AND TO CALL FOR FURTHER INFORMATION, IF DEEMED NECESSARY TO COME TO A PROPER CONCLUSION AND OFFER COMMENTS ACCORDINGLY. ACCORDIN G TO THE CIT(A), THE AO IN THE REMAND REPORT HARPED UPON THE OLD FAC T THAT EVEN THOUGH THERE WAS MORE THAN ONE MONTHS TIME, THE ASSESSEE COULD NOT PRODUCE THE OTHER EVIDENCES, WHICH WAS HIS STAND TAKEN ALRE ADY IN THE ABSENCE OF MATERIALS SOUGHT BY HIM. IN SUCH A SITUATION, TH E EXPLANATION OF THE -: 7 :- 7 ASSESSEE SUPPORTED BY DOCUMENTARY EVIDENCE WAS ACCE PTED BY THE LD. CIT(A) AND HE DELETED THE ADDITION OF RS. 2.10 LAKH S. 5. DURING THE COURSE OF HEARING BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED THAT NO INFORMAT ION EXCEPT ADDRESS OF THE DONOR WAS SUPPLIED TO THE AO, THOUGH THE AO SPECIFICALLY ASKED TO PRODUCE CAPACITY OF THE DONOR, GENUINENESS OF TH E TRANSACTION AND CREDITWORTHINESS OF THE DONOR. SHE FURTHER ARGUED T HAT THE LD.CIT(A) DID NOT PASS THE ORDER UNDER RULE 46A OF THE INCOME TAX RULES, WHICH IS MANDATORY. IN SUCH CIRCUMSTANCES, TO ACCEPT ADDITIO NAL EVIDENCE IN VIOLATION OF RULE 46A AND ON THE BASIS OF SUCH ADDI TIONAL EVIDENCE ERRONEOUSLY DELETED ADDITION MADE BY THE ASSESSING OFFICER. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE ARGUED THAT THE AO IN PARA 2 OF THE ASSESSMENT ORDER HIMSE LF HAS MENTIONED THAT SURVEY PROCEEDINGS U/S 133A WERE CONDUCTED AT THE PREMISES OF THE FIRM M/S. MAYO HOSPITAL, THEREFORE, THE CASE OF THE FIRM AS WELL AS PARTNERS, ONE OF THEM BEING THE ASSESSEE HERSELF WE RE TAKEN SIMULTANEOUSLY. IT IS FURTHER MENTIONED IN PARA 3 O F THE ASSESSMENT -: 8 :- 8 ORDER THAT QUESTIONNAIRE WERE ISSUED COLLECTIVELY I N THE FIRM AND ITS TWO PARTNERS AND THE CASE WAS FIXED FOR HEARING ON 29.9 .2005. THE ABOVE ADMITTANCE BY THE ASSESSING OFFICER IN THE ASSESSME NT ORDER PROVES THE FACT MENTIONED IN THE APPLICATION UNDER RULE 46A DA TED 15.6.2007 THAT THE WHOLE CONCENTRATION OF THE AO AND THE ASSESSEE WAS ON THE FIRMS CASE. THE AO HAS NOT ASKED SPECIFICALLY TO PROVE TH E EVIDENCE, WHICH INTENDED TO PRODUCE THROUGH APPLICATION UNDER RULE 46A. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND ORDERS OF THE AUTHORITIES BELOW AND ALSO THE PAPER BOOK FI LED BY THE LEARNED AUTHORIZED REPRESENTATIVE TOTALING PAGES 31. WE HAV E NOTED THAT COMPLETE DETAILS ABOUT THE GIFT GIVEN BY THE FATHER OF THE ASSESSEE SHRI O.P.SHARMA WAS DISCLOSED IN THE RETURN OF INCOME AN D DURING COUR4SE OF ASSESSMENT PROCEEDINGS, ADDRESS OF THE FATHER OF THE ASSESSEE I.E. THE DONOR WAS SUPPLIED TO THE AO. THEREFORE, THE AO SHO ULD HAVE MADE ENQUIRIES DIRECTLY WITH SHRI O.P.SHARMA, BUT NO AC TION HAS BEEN TAKEN ON THE PART OF THE AO. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. KULDEEP INDUSTRIAL CORPORATION, 209 CTR 400 HAS -: 9 :- 9 HELD THAT THE AO, WHO WAS PRESENT AT THE TIME OF FU RNISHING OF ADDITIONAL EVIDENCE BEFORE THE CIT(A) HAVING RAISED NO OBJECTION, THE OPPORTUNITY ENVISAGE UNDER RULE 46A STOOD SATISFIED . IN THIS CASE, PROPER OPPORTUNITY WAS PROVIDED TO THE ASSESSING OF FICER BY CALLING FOR THE REMAND REPORT. HOWEVER, THE LD. AO WITHOUT ANY INQUIRY/INVESTIGATION OBJECTED ONLY ADMITTANCE OF T HE ADDITIONAL EVIDENCES. THE CIT(A) AFTER DISCUSSING ALL THESE FA CTS ACCEPTED THE ADDITIONAL EVIDENCE. THEREFORE, THERE IS NO SUBSTAN CE IN THE ARGUMENT OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT NO SPE CIFIC ORDER HAS BEEN PASSED AS REQUIRED UNDER RULE 46A OF THE INCOME TAX RULES. WE NOTED THAT SUFFICIENT OPPORTUNITY WAS PROVIDED BY THE LD. CIT(A) TO THE AO TO OFFER HIS COMMENTS, BUT NO SUCH COMMENTS WAS OFFERE D EXCEPT OBJECTING ADDITIONAL EVIDENCES PRODUCED BEFORE THE CIT(A). FURTHER, WE NOTED THAT THE ASSESSEE HAS PROVED WITH CONFIRMATIO N LETTER OF THE DONOR, PHOTOCOPY OF THE INCOME TAX RETURN OF THE DONOR WIT H HIS PAN NUMBER AND THE BANK ACCOUNT AND ALSO THE NSC TAKEN BY THE FATHER OF THE ASSESSEE HAD BEEN PROVED. THEREFORE, THE LD.CIT(A) HAS RIGHTLY DELETED -: 10 :- 10 THE ADDITION OF RS. 2,10,000/-. HENCE, GROUND NOS. 1 & 3 OF THE REVENUE ARE DISMISSED. 8. THE SECOND GROUND OF THE APPEAL IS THAT THE LD. C IT(A) ERRED IN DELETING THE ADDITION OF RS. 10,55,000/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS/DEPOSITS U/ S 69A. 9. FACTS OF THE CASE ARE THAT THE FIRM M/S. MAYO HOSPI TAL, BHOPAL, HAS CARRIED ITS BUSINESS THROUGH THE SAVING BANK AC COUNT NO.339 IN DENA BANK, KOH-E-FIZA BRANCH, BHOPAL IN THE NAME OF THE PARTNER, I.E. THE ASSESSEE. THERE ARE TWO PARTNERS IN THE PARTNER SHIP FIRM, NAMELY, DR. ASHOK JAISWAL, HUSBAND OF THE ASSESSEE AND THE ASSE SSEE DR.(SMT.) VIJAYA JAISWAL. THE ABOVE SAVING BANK ACCOUNT OF TH E FIRM IS IN THE NAME OF THE ASSESSEE AND ALL THE TRANSACTIONS OF TH E FIRM ROUTED THROUGH THE SAID SAVING BANK ACCOUNT AND THE SAME WERE REFL ECTED IN THE BOOKS OF ACCOUNT OF THE FIRM. THE BALANCE IN THE SAID ACC OUNT AT THE CLOSE OF THE ACCOUNTING YEAR IS ALSO REFLECTED IN THE AUDITE D BALANCE SHEET OF THE FIRM FILED WITH THE RETURN OF INCOME OF THE FIRM. I N THE SAID BALANCE SHEET UNDER THE SCHEDULE CASH AND BANK BALANCES, THE AFORESAID BANK -: 11 :- 11 ACCOUNT NO. 339 AND ITS BALANCES ARE REFLECTED. IT WAS EXPLAINED THAT ALL THE CASH DEPOSITS IN THE AFORESAID BANK ACCOUNT ARE FULLY VERIFIABLE FROM THE CORRESPONDING ENTRIES APPEARING IN THE CASH BOO K OF THE FIRM. THE AO ALSO MADE THE ASSESSMENT OF THE FIRM AND NO ADDI TION HAD BEEN MADE FOR THE SAID BANK DEPOSITS IN THE CASE OF THE FIRM. IT IS ALSO EXPLAINED THAT THE DEPOSITS IN THE BANK ACCOUNTS WE RE ADDED U/S 69A OF THE INCOME-TAX ACT, 1961, ERRONEOUSLY, BECAUSE THE ASSESSEE HAS NOT FOUND TO BE THE OWNER OF THE MONEY NOR RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME. HOWEVER, THE AO HAS MENTIONED IN THE ASSESSMENT ORD ER THAT THE ASSESSEE VIDE SUBMISSION DATED 28.2.2006 FURNISHED LEDGER ACCOUNT OF THE BANK TRANSACTION. BUT, NO EXPLANATION WAS OFFER ED IN RESPECT OF CASH ENTRIES APPEARING IN THE SAVING BANK ACCOUNT. THERE FORE, HE ASSERTED THAT THOSE CASH ENTRIES REMAINED UNVERIFIABLE AND A DDED IN THE HANDS OF THE ASSESSEE. 10. DURING THE COURSE OF HEARING BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE AO S PECIFICALLY ASKED -: 12 :- 12 TO EXPLAIN THE CASH CREDIT ENTRIES APPEARING IN THE ABOVE SAVING BANK ACCOUNT, BUT NO DETAILS WERE FURNISHED BEFORE THE A O. HENCE, THE ADDITION HAS RIGHTLY BEEN MADE BY HIM. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE INVITED OUR ATTENTION TO PARA 7 OF THE ASSESSMENT ORDER WHEREIN THE AO HIMSELF HAS MENTION ED DENA BANK, COH-E-FIZA, BHOPAL ACCOUNT NO. 339 IN THE NAME OF V IRAJ SHARMA JAISWAL, P/O MAYO HOSPITAL, BHOPAL. IN SECOND PARA OF PARA 7.2 OF THE ASSESSMENT ORDER, THE AO HAS FURTHER MENTIONED THAT ALTHOUGH THE SAID ACCOUNT HAS ALSO BEEN REFLECTED IN THE AUDIT REPORT OF M/S. MAYO HOSPITAL, BHOPAL, IN WHICH THE ASSESSEE IS A PARTNE R, THE CASH DEPOSIT MADE IN THE SAID ACCOUNT, BEING IN THE NAME OF THE ASSESSEE AND FOR WHICH NO EXPLANATION HAS BEEN OFFERED, THESE RECEIP TS ARE TREATED AS CONCEALED INCOME OF THE ASSESSEE U/S 69A OF THE I.T . ACT, 1961. IT IS FURTHER ARGUED BY THE LEARNED AUTHORIZED REPRESENTA TIVE THAT SIMULTANEOUS ASSESSMENT PROCEEDINGS WERE TAKEN UP I N THE CASE OF THE ASSESSEE AS WELL AS IN THE CASE OF THE FIRM M/S. M AYO HOSPITAL, BHOPAL, THE LEDGER ACCOUNT OF THE ABOVE SAID BANK ACCOUNT A PPEARED IN THE -: 13 :- 13 BOOKS OF THE FIRM AND TALLIES WITH THE SAVING BANK ACCOUNT NO. 339 IN THE NAME OF THE ASSESSEE. IT PROVES THAT THE AO WAS AWARE THAT THE FIRM WAS DOING ITS BUSINESS THROUGH THE ABOVE SAID SAVIN G BANK ACCOUNT IN THE NAME OF THE ASSESSEE, WHO IS PARTNER IN THE FIR M. HENCE, THE CIT(A) HAS RIGHTLY HELD THAT THE BANK ACCOUNT ENTRIES ARE REFLECTED IN THE FIRMS REGULAR BOOKS OF ACCOUNT AND SUCH ENTRIES ARE VERIF IABLE FROM THE FIRMS CASH BOOK AND THE BANK ACCOUNT ALSO REFLECTED IN TH E AUDITED BALANCE SHEET OF THE FIRM, THEREFORE, DELETED THE ADDITION. THE LD.CIT(A) HAS FURTHER HELD THAT THE FIRM HAS OPENED SAVING BANK A CCOUNT IN THE NAME OF THE ASSESSEE AND LAW DOES NOT PREVENT THE FIRM F ROM OPENING BANK ACCOUNT IN THE NAME OF THE PARTNER. MOREOVER, THE A SSESSEE BEING NOT THE OWNER OF THE BANK ACCOUNT, THEREFORE, THERE IS NO SCOPE FOR ADDITION. 11. AFTER HEARING RIVAL CONTENTIONS, WE NOTED THAT THE BALANCE SHEET OF THE FIRM AS ON 31.3.2003, REFLECTS CASH AND BAN K BALANCES AS PER SCHEDULE K AND THE SAID SCHEDULE K REFLECTS DE NA BANK ACCOUNT NO. 339. THE AO HIMSELF IN THE ASSESSMENT ORDER HA S MENTIONED ABOVE THAT THE SAID ACCOUNT HAS ALSO BEEN REFLECTED IN THE AUDITED REPORT -: 14 :- 14 OF M/S. MAYO HOSPITAL, BHOPAL. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS RIGHTL Y DELETED THE ADDITION OF RS. 10,55,000/-. HENCE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED ON 11 TH AUGUST, 2009. SD/- SD/- (BHAVNESH SAINI) (M.L.GUSIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11 TH AUGUST, 2009. CPU* 3075.6D8