Smt. Shakuntla Rani, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 179/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8873 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GHANSHAM SHARMA
• Assessee Lawyers: PADAM BAHL
• Keywords: Unexplained investment; Gift; Business income; Revised return
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.179(ASR)/2015 ASSESSMENT YEAR:2008-09 PAN: AAMPR6060R SMT. SHAKUNTALA RANI VS. INCOME TAX OFFICER, H/NO.262, GALI NO.8, WARD 4(4), HUSSAINPURA, AMRITSAR. AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL, CA RESPONDENT BY:SH. GHAN SHAM SHARMA DATE OF HEARING: 17/11/2015 DATE OF PRONOUNCEMENT: 09/02/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2008-09 AGAINST THE ORDER DATED 27.02.2015, PASSED BY THE L D. CIT(A), AMRITSAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THAT THE LD. CIT(A), AMRITSAR HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.2,50,000/- MADE BY THE AO AT RS. 4 LAC U/S 69 OF THE ACT. 2. THAT BOTH LD. CIT(A) AND ITO WARD 4(4), HAVE FA ILED TO APPRECIATE THAT ASSESSEE HAD BEEN FILING INCOME TAX RETURNS FOR THE PAST MORE THAN 8 TO 10 YEARS AND HAD SUFFIC IENT FUND TO MAKE INVESTMENT OF RS. 4 LACS. 3. THAT BOTH LD. CIT(A) AND ITO WARD 4(4), HAVE FA ILED TO APPRECIATE THAT THE HUSBAND OF THE ASSESSEE WAS AL SO INCOME TAX ASSESSEE AND HAD FILED INCOME TAX RETURN S FOR A/Y 2007-08 & 2008-09 AT RS.2,03,594/- AND 2,58,626 /-. ITA NO.179(ASR)/2015 A.Y. 2008-09 2 4. THAT BOTH LD. CIT(A) AND ITO WARD 4(4), HAVE GR OSSLY ERRED AND NOT A ALLOWING U/S 80DD IN RESPECT OF DISABLE C HILDREN OF THE ASSESSEE. 2. GROUND NOS. 1 TO 3 PERTAIN TO ONE AND THE SAME I SSUE, I.E., THE ASSESSEES CHALLENGE TO THE CONFIRMATION OF ADDITIO N OF RS.2,50,000/- MADE U/S 69 OF THE I.T. ACT, 1961 ( IN SHORT, THE ACT). THE ASSESSEE DERIVED INCOME FROM RENT, TAILORING, INTEREST ON FD R AND INCOME FROM OTHER SOURCES. SHE WAS NOT MAINTAINING ACCOUNTS O F PROFESSIONAL INCOME AND INCOME WAS RETURNED ON ESTIMATE BASIS. D URING THE YEAR SHE HAD PURCHASED A PLOT MEASURING 200 SQ. YDS. AT GUM TALA, AMRITSAR. ON BEING CONFRONTED, SHE SUBMITTED HER PERSONAL BALANC E SHEET AND STATEMENT OF TAXABLE INCOME FOR THE ASSESSMENT YEA RS 2005-06 TO 2008- 09 BEFORE THE AO AND STATED THAT SHE HAD ADVANCED R S.2,50,000/- TO THE SELLER OF THE LAND IN A.Y. 2007-08 AND THE BALANCE AMOUNT WAS PAID IN 2008-09 AT THE TIME OF REGISTRATION; THAT THE REGIS TRATION EXPENSE OF RS.37,500/- WAS INCURRED IN A.Y. 2008-09. THE SOU RCES OF THE INVESTMENTS WERE CLAIMED BY THE ASSESSEE TO BE INCO ME OFFERED BY HER DURING THE A.YS. 2005-06 TO 2008-09 AND GIFT OF RS. 47,000/- RECEIVED FROM HER DAUGHTER-IN-LAW IN A.Y. 2008-09. THE AO RE QUIRED THE ASSESSEE TO SUBMIT EVIDENCE OF CASH IN HAND, SHOWN AT RS.63, 991/- AS ON 31.03.2005 IN THE BALANCE SHEET FOR THE YEAR ENDING ON 31.03.2005, THE SUNDRY DEBTORS OF RS.1,37,650/- APPEARING FOR THE F IRST TIME ON 31.03.2006 IN THE BALANCE SHEET. IN RESPONSE, THE A SSESSEE SUBMITTED THAT THE OLD FILE OF THE ASSESSEE, WHICH WAS RETURN ED BY HER COUNSEL, WAS ITA NO.179(ASR)/2015 A.Y. 2008-09 3 NOT TRACEABLE AND HENCE THE OLD RECORD, STATEMENT O F INCOME AND STATEMENT OF ACCOUNTS WERE NOT AVAILABLE. 3. THE AO HELD THAT THE BALANCE SHEET AND CAPITAL A CCOUNTS OF DIFFERENT YEARS WERE AN AFTER-THOUGHT AND AN ATTEMP T TO GIVE A COLOUR OF GENUINENESS TO THE UNEXPLAINED INVESTMENT OF RS.4,0 0,000/- IN PURCHASE OF LAND. THE AO MADE ADDITION U/S 69 OF THE ACT. 4. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED TH AT SHE HAD BEEN FILING HER RETURN OF INCOME REGULARLY FROM AY 2000- 01 ONWARDS, AND SOUGHT BENEFIT OF PAST SAVINGS. THE ASSESSEE SUBMI TTED COPY OF COMPUTATION OF INCOME AND BALANCE SHEET AND CAPITAL ACCOUNT FOR THE ASSESSMENT YEAR 2008-09, 2007-08, 2006-07 AND 2005- 06 AND COPIES OF INTIMATION U/S 143(1) OF THE ACT FOR THE ASSESSMENT YEARS 2004-05, 2003- 04 AND 2002-03. THE LD. CIT(A) SAW THAT IN THE COMP UTATION OF INCOME FOR THE AY 2005-06 TO 2008-09, THE ASSESSEE HAD INCOME UNDER THE HEADS OF HOUSE PROPERTY, INCOME FROM BUSINESS FROM TAILORI NG, INCOME FROM OTHER SOURCES, NAMELY, FDR INTEREST, BANK AND PPF INTEREST AND THAT THE INCOME AVAILABLE WITH THE ASSESSEE FOR MAKING EXPEN DITURE/INVESTMENT WERE AS FOLLOWS: AY INCOME FROM HOUSE PROPERTY TAILORING INCOME INCOME FROM OTHER SOURCES OTHER THAN BANK INTEREST, INTEREST ON TOTAL ITA NO.179(ASR)/2015 A.Y. 2008-09 4 FDR AND PPF INTEREST 2005-06 31,500.00 82,200.00 NIL 113,700.00 2006-07 31,500.00 108,000.00 35,000.00 174,500.00 2007-08 33,600.00 108,000.00 12,000.00 153,600.00 2008-09 33,600.00 118,000.00 10,000.00 161,600.00 5. THE LD. CIT(A) OBSERVED THAT INTEREST CREDITED O N FDRS, PPF AND THE SAVINGS BANK INTEREST HAD NOT BEEN SHOWN TO BE WITHDRAWN BY THE ASSESSEE FOR MAKING INVESTMENT/EXPENDITURE, DUE TO WHICH, NO BENEFIT COULD BE ALLOWED TO THE ASSESSEE IN THIS REGARD. IT WAS OBSERVED THAT SINCE THE PROPERTY HAD BEEN PURCHASED BY THE ASSES SEE ON 06.06.2007, THE INCOME CLAIMED IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 FOR APRIL AND MAY, 2007-08, I.E., RS.161,6 00 12 X 2 = RS.26,933/- AT BEST COULD BE CONSIDERED FOR INVESTM ENT. IT WAS OBSERVED THAT THE AVERAGE MONTHLY INCOME OF THE ASSESSEE AVA ILABLE FOR INVESTMENT/EXPENDITURE IN ASSESSMENT YEARS 2005-06, 2006-07, 2007-08 AND 2008-09 WAS RS. 9,475/-, RS.14,542/-, RS.12,800 /- AND RS.13,467/-, RESPECTIVELY. THE ASSESSEE HAD ALSO S UBMITTED A COPY OF COMPUTATION OF INCOME OF HER HUSBAND SH. RAJPAL CHO HAN FOR THE ASSESSMENT YEARS 2008-09 AND 2007-08. HE DERIVED IN COME FROM BUSINESS AND PROFESSION OF JEWELLERY BUSINESS OF R S.2,58,626/- AND RS.2,03,594/- IN AYS 2008-08 & 2007-08, RESPECTIVEL Y. THE AVERAGE ITA NO.179(ASR)/2015 A.Y. 2008-09 5 MONTHLY BUSINESS INCOME OF SH. RAJ PAL CHOHAN WAS A T RS.21,552/- AND RS.16,966/- IN AYS 2008-09 & 2007-08, RESPECTIVELY . 6. THE LD. CIT(A) OBSERVED THAT THE FAMILY OF THE A SSESSEE CONSISTED OF HERSELF, HER HUSBAND AND THREE PHYSICALLY HANDICAPP ED CHILDREN. CONSIDERING THE FAMILY SIZE OF THE ASSESSEE AND TAK ING INTO ACCOUNT THE INCOME OF THE ASSESSEE AND HER HUSBAND, IT WAS OPIN ED THAT THEIR COMBINED INCOME WAS SUFFICIENT TO MEET THEIR FAMILY EXPENSES. THEY COULD MAKE SMALL SAVINGS. THE LD. CIT(A) OBSERVED T HAT IN RESPONSE TO THE AOS QUERY REGARDING EVIDENCE OF CASH IN HAND, SUND RY DEBTORS AND MATERIAL (STOCK) OF RS.1,87,828/- APPEARING FOR T HE FIRST TIME IN THE BALANCE SHEET PREPARED FOR THE YEAR ENDING 31.03.20 06, THE ASSESSEE HAD STATED THAT HER OLD FILE, WHICH HAD BEEN RETURNED BY HER COUNSEL, WAS NOT TRACEABLE AND HENCE, THE OLD RECORD, STATEMENT OF INCOME AND STATEMENT OF ACCOUNTS, WERE NOT AVAILABLE. THE LD. CIT(A) HELD, AS SUCH, THAT THE AO HAD RIGHTLY HELD THAT THE BALANCE SHEET AND CAPITAL ACCOUNTS OF DIFFERENT YEARS WERE AN AFTER-THOUGHT AND AN ATT EMPT TO GIVE A COLOUR OF GENUINENESS TO UNEXPLAINED INVESTMENT IN PURCHASE O F PLOT OF LAND. IT WAS OBSERVED THAT SINCE THE ASSESSEE HAD NOT EXPLAI NED WITH ANY EVIDENCE THE CASH IN HAND SHOWN AT RS.63,911/-, AS ON 31.03.2005 BEFORE THE AO AND SHE DID NOT PRODUCE HER OLD RECOR D, STATEMENT OF INCOME AND STATEMENT OF ACCOUNTS, NO BENEFIT OF THE CAPITAL SHOWN IN THE BALANCE SHEETS FOR THE ASSESSMENT YEARS 2005-06 TO 2008-09 COULD BE ALLOWED TO THE ASSESSEE. THE LD. CIT(A) CONCLUDED T HAT THE ASSESSEE COULD ITA NO.179(ASR)/2015 A.Y. 2008-09 6 AT BEST HAVE SAVED RS.1,50,000/- FROM THE PAST INCO ME WHICH WAS AVAILABLE FOR PURCHASE OF LAND. IN THIS MANNER, TH E ADDITION MADE BY THE AO WAS REDUCED FROM RS.4,00,000/- TO RS.1,50,000/- . 7. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF R S.2,50,000/-; THAT WHILE DOING SO, THE LD. CIT(A) HAS FAILED TO APPREC IATE THAT THE ASSESSEE HAD BEEN FILING RETURNS OF INCOME FOR THE PAST MORE THAN 8 TO 10 YEARS AND SHE HAD SUFFICIENT FUNDS TO MAKE INVESTMENT OF RS. 4 LACS IN THE PURCHASE OF THE LAND; AND THAT THE LD. CIT(A) HAS A LSO FAILED TO APPRECIATE THAT THE HUSBAND OF THE ASSESSEE, SH. RAJ PAL CHOHA N WAS ALSO AN INCOME TAX ASSESSEE AND HE HAD FILED INCOME TAX RE TURNS FOR THE ASSESSMENT YEARS 2007-08 & 2008-09 AT RS.2,03,594/- AND RS.2,58,626/-. IT HAS BEEN CONTENDED THAT THE AUTH ORITIES BELOW HAVE FAILED TO CONSIDER THAT THE ASSESSEE WAS A PETTY TA ILOR AND HER HUSBAND WAS A SMALL-TIME JEWELER. THE LD. COUNSEL FOR THE A SSESSEE HAS FILED THE DETAILS OF RETURNS FILED BY THE ASSESSEE, WHICH ARE AS FOLLOWS: AY DT. OF FILING RECEIPT NO. TOTAL INCOME 2002-03 10.06.2002 815 135720.00 2003-04 23.06.2003 2457 129280.00 2004-05 18.06.2004 2842 130372.00 ITA NO.179(ASR)/2015 A.Y. 2008-09 7 2005-06 03.06.2005 1641 137730.00 2006-07 30.07.2006 19132 137040.00 2007-08 19.07.2007 4030144 138140.00 2008-09 16.07.2008 4015040 153480.00 IT HAS ALTERNATIVELY CONTENDED THAT IN THE FACTS A ND CIRCUMSTANCES OF THE CASE, THE ADDITION SUSTAINED BY THE LD. CIT(A) IS T OO MUCH ON THE HIGHER SIDE. 8. ON THE OTHER HAND, THE LD. DR STRONGLY RELIED UP ON THE IMPUGNED ORDER, CONTENDING THAT THE ASSESSEE HAD MISERABLY F AILED TO PROVE THE SOURCE OF INVESTMENT IN PURCHASE OF LAND AND SO, TH E ADDITION WAS MADE BY THE AO; AND THAT THE LD. CIT(A) HAS BEEN MORE TH AN REASONABLE IN RESTRICTING THE ADDITION OF RS.4,00,000/- TO RS.2,5 0,000/-, THEREBY ALLOWING RELIEF OF RS.1,50,000/- TO THE ASSESSEE. 9. IT IS SEEN THAT THE ESTIMATE WAS MADE TAKING INT O CONSIDERATION THE ASSESSEES CONTENTION THAT HER OLD FILE WAS NOT TRA CEABLE, DUE TO WHICH, THE OLD RECORD, STATEMENT OF INCOME AND STATEMENT O F ACCOUNTS WERE NOT AVAILABLE. IT WAS, AS SUCH, THAT THE LD. CIT(A), ON THE BASIS OF THE MATERIAL ON RECORD, HELD THAT THE ASSESSEE COULD AT BEST HAV E SAVED RS.1,50,000/- FROM HER PAST SAVINGS, WHICH WAS AVAILABLE FOR INV ESTMENT FOR PURCHASE OF LAND. HOWEVER, IT HAS BEEN MAINTAINED BY THE ASS ESSEE THAT SHE HAS BEEN FILING RETURNS OF INCOME FOR THE ASSESSMENT YE AR 2000-01 ONWARDS ITA NO.179(ASR)/2015 A.Y. 2008-09 8 AND DETAILS OF THE INCOME WERE FILED FOR THESE YEA RS. THE ASSESSEE HAS GIVEN, INTER-ALIA, THE DATE OF FILING OF EACH RETUR N AND THE RECEIPT NO. THEREOF. THIS MATERIAL WAS NOT MADE AVAILABLE TO TH E AUTHORITIES BELOW. HOWEVER, SINCE THE SAME IS NOT AVAILABLE, I REMIT T HIS MATTER TO THE FILE OF THE AO TO BE DECIDED AFRESH, ON OBTAINING THE ASSE SSEES RETURNS OF INCOME FROM THE DEPARTMENT ON THE BASIS OF THIS INF ORMATION AND REDECIDE THE ISSUE ON THE BASIS THEREOF ALONGWITH THE OTHER MATERIAL CONSIDERED BY THE LD. CIT(A) AND THEREAFTER REDECID E THE MATTER. ORDERED ACCORDINGLY. GROUND NOS. 1 TO 3 ARE, THEREFORE, TR EATED AS ACCEPTED FOR STATISTICAL PURPOSES. 10. COMING TO GROUND NO.4, THE LD. CIT(A) DISALLO WED DEDUCTION TO THE ASSESSEE U/S 80DD OF THE ACT IN RESPECT OF DISA BLED CHILDREN OF THE ASSESSEE, HOLDING THAT THE AO HAD RIGHTLY DONE SO, SINCE THE CLAIM IN THIS REGARD HAD NOT BEEN MADE BY THE ASSESSEE IN TH E RETURN OF INCOME AND THAT AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) , 284 ITR 383, IT HAS BEEN HELD TH AT THE AO COULD NOT ENTERTAIN THE CLAIM FOR DEDUCTION OTHERWISE THAN WH ERE A REVISED RETURN WAS FILED. 11. THIS ISSUE IS ALSO REMITTED TO THE FILE OF THE AO, TO BE DECIDED AFRESH ON MERITS, IN ACCORDANCE WITH LAW, ON CONSID ERING THE CLAIM OF THE ITA NO.179(ASR)/2015 A.Y. 2008-09 9 ASSESSEE IF IT IS OTHERWISE MAINTAINABLE, THOUGH TH E SAME HAS NOT BEEN RAISED IN THE ORIGINAL RETURN OF INCOME. 12. IN VIEW OF THE ABOVE, GROUND NO.4 IS ALSO TREAT ED AS ACCEPTED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/02/2016 . SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 09/02/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE: SMT. SHAKUNTALA RANI, AMRITSAR. 2. THE ITO, WARD 4(4), ASR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.