Sh. Ram Kishan, New Delhi V. ITO, New Delhi

ITA 1826/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3944 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Unexplained investment; Salary income; Principle of natural justice; Additional evidence
• Section: 143(3); 234B; 68; 69; 54

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1826/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) RAM KISHAN, C/O. M/S. RRA TAXINDIA, D - 28, SOUTH EXTENSION PART - I, NEW DELHI PAN:AHKPK7868F VS. ITO, WARD - 68(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA, ADV REVENUE BY: SHRI ATIQ AHMAD, SR. DR DATE OF HEARING 01/11 /2017 DATE OF PRONOUNCEMENT 1 7 / 01 / 2018 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - 32, NEW DELHI DATED 24.01.2017 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD AO IN NOT ALLOWING THE BENEFIT OF DEDUCTION U/S 54 AMOUNTING TO RS.64,53,240/ - AS CLAIMED BY THE ASSESSEE AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDINGS AND WITHOUT GIVING ADEQUATE OPPORTUNITY OF HEARING AND BY DISREGARDING THE SUBMISSIONS OF THE ASSESSEE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) I N CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING THE BENEFIT OF DEDUCTION U/S 54 AMOUNTING TO RS.64,53,240/ - IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT( A) H AS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.3,41,000/ - ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT BY TREATING IT AS ALLEGED UNEXPLAINED CASH DEPOSITS U/S 68 AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDING S AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY LD. AO AMOUNTING TO RAM KISHAN VS.ITO, ITA NO. 1826/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) PAGE | 2 RS.3,41,000/ - ON ACCOUNT OF CASH DEPOSITS U/S 68, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.7,50,000/ - ON ACCOUNT OF AMOUNT GIVEN TO SH. SHI KHAR KAPOOR BY TREATING IT AS ALLEGED UNEXPLAINED INVESTMENT U/S 69 AND THAT TOO BY RECORDING INCORRECT FACTS AND 6. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.7,50,000/ - ON ACCOUNT OF AMOUNT GIVEN TO SH. SHIKHAR KAPOOR U/S 69, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSING THE ACT ION OF LD. AO IN CHARGING INTEREST U/S 234B OF INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE IS THAT ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM SALARY AND OTHER SOURCES. HE FILED HIS RETURN OF INCOME AT RS. 541950/ - ON 31.07.2012. DURING THE YEAR THE AS SESSEE HAS SOLD AN IMMOVABLE PROPERTY AND CLAIM ED DEDUCTION U/ S 54 OF THE ACT OF RS. 6453250/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS PURCHASED A COMMERCIAL PROPERTY AND THEREFORE DEDUCTION U/S 54 IS NOT AVAILABLE. THE ASSESSEE SUBMITTED THAT PROPERTY IS FOR RESIDENTIAL OCCUPATION AND HAS BEEN USED BY THE ASSESSEE UNTIL TO DATE FOR RESIDENTIAL PURPOSES. HE FURTHER STATED THAT MERELY BECAUSE THE HOUSE PURCHASED IS ME NTIONED AS GUESTHOUSE IN THE PURCHASE DEED, THE DEDUCTION U/S 54 CANNOT BE DENIED AS THE ASSESSEE IS USING IT FOR HIS RESIDENCE. THE LD ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND DISALLOWED THE CLAIM U/S 54 OF THE ACT. FURTHER , ADDITION OF RS. 448000/ - WAS ALSO MADE AS ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSIT IN HIS SAVING BANK ACCOUNT. FURTHER, ADDITION OF RS. 750000/ - WAS ALSO MADE AS THE PAYMENT GIVEN TO THE SELLER AS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF S UCH PAYMENT OF SELLER. CONSEQUENTLY , ASSESSMENT U/S 143(3) OF THE ACT WAS MADE ON 23.03.2015 AT RS. 8234120/ - . 4. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD CIT(A) WHO ALSO UPHELD THE DISALLOWANCE U/S 54 OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE ADDITION RAM KISHAN VS.ITO, ITA NO. 1826/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) PAGE | 3 OF RS. 341000/ - OUT OF RS,. 480000/ - AND RS. 750000/ - . THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 5. ON GROUND NO. 1 AND 2 THE LD AUTHORISED REPRESENTATIVE SUBMITTED THAT THE PROPERTY PURCHASED BY THE ASSESSEE IS A RESIDENTIAL HOUSE PROPERTY AS SAME IS USED FOR RESIDENCE OF THE ASSESSEE TIL TO DATE. THE DETAILS OF PROPERTY WERE ALSO SHOWN TO US FROM AGRA NAGAR NIGAM HOUSE TAX DETAILS WHERE IT IS SHOWN AS RESIDENTIAL PROPERTY. FURTHER AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE DATED 10.06.2017 W AS ALSO PLACED BEFORE US WHEREIN, THE ORDER DATED 15.12.2011 BY ADDL. DISTRICT MAGISTRATE AGRA IN CASE OF NO. 459/2010 U /S 47A(3) OF THE ACT IS ATTACHED . THE LD AUTHORISED REPRESENTATIVE STATED THAT THIS DOCUMENT CLEARLY SHOWS THAT THE PROPERTY USED BY TH E ASSESSEE IS A RESIDENTIAL PROPERTY. HE THEREFORE, SUBMITTED THAT THE ABOVE EVIDENCE GOES TO THE ROOT OF THE ASSESSEE, HENCE, MAY BE ADMITTED. 6. THE LD DR VEHEMENTLY CONTESTED ABOVE ADDITIONAL EVIDENCE AND STATED THAT LOWER AUTHORITIES HAVE PROVED WITH CON CLUSIVE EVIDENCE THAT PROPERTY IS GUEST HOUSE AND NOT RESIDENTIAL HOUSE. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE ONLY DISPUTE IS WHETHER PROPERTY PURCHASED BY THE ASSESSEE IS RESIDENTIAL OR COMMERCIAL. THE ASSESSEE HAS SUBMITTED THE COPY OF THE ORDER DATED 15.12.2011 WHEREIN, THE NATURE OF SUCH PROPERTY HAS BEEN DEALT WITH AND IS A JUDICIAL ORDER. AT THE TIME OF PASSING OF THE ORDER OF THE LD ASSESSING OFFICER THE ABOVE ORDER COULD NOT BE PRODUCED BEFORE HIM AS WELL AS BEFORE THE LD CIT(A). AS THE DISPUTE ALSO INVOLVED ABOUT THE NATURE OF THE PROPERTY, IN THE INTEREST OF JUSTICE , ABOVE ORDER IS ADMITTED AS ADDITIONAL EVIDENCE. DURING THE COU RSE OF HEARING THE LD AR ALSO SUBMITTED THAT ASSESSEE IS USING THIS HOUSE FOR THE PURPOSE OF HIS RESIDENCE. THE ABOVE STATEMENT WAS ALSO MADE BEFORE LOWER AUTHORITIES, HOWEVER, NO INQUIRY WAS MADE ABOUT THIS FACT. INSTEAD OF EXAMINING THE FACT, THE LOWER A UTHORITIES LOOKED INTO OTHER INDIRECT EVIDENCES INSTEAD OF THE DIRECT EVIDENCE OF USER OF THE PROPERTY. IN VIEW OF THIS AFTER ADMITTING THE ADDITIONAL EVIDENCE WE SET ASIDE THE ISSUE OF RAM KISHAN VS.ITO, ITA NO. 1826/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) PAGE | 4 CLAIM OF DEDUCTION U/S 54 OF THE ACT BACK TO THE FILE OF LD ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ADDITIONAL EVIDENCE SUBMITTED BEFORE US AS WELL AS TO EXAMINE THE FACT OF ABOVE PROPERTY BEING USED BY ASSESSEE FOR HIS RESIDENTIAL PURPOSES. AFTER SUCH EXAMINATION, THE AO MAY DECIDE THE CLAIM U/S 54 AFTER AFFORDIN G ASSESSEE AN OPPORTUNITY OF PROPER HEARING. IN VIEW OF THIS GROUND NO. 1 AND 2 OF THE APPEAL ARE ALLOWED ACCORDINGLY. 8. GROUND NO. 3 AND 4 ARE WITH RESPECT TO THE ADDITION ON ACCOUNT OF RS. 341000/ - AS CASH DEPOSITED IN THE BANK ACCOUNT. THE FACTS OF THE C ASE SHOWS THAT ASSESSEE HAS DEPOSITED RS. 448000/ - IN HIS BANK ACCOUNT WHICH WAS EXPLAINED BY THE ASSESSEE THAT RS. 107000/ - IS RECEIVED FROM THE BANK ACCOUNT OF THE WIFE OF THE ASSESSEE WHO WAS HAVING AN INDEPENDENT SOURCE OF INCOME AND REGULARLY ASSESSE D TO INCOME TAX. LD CIT(A) ACCEPTED THE ABOVE CONTENTION, HOWEVER, WITH RESPECT TO THE THREE DEPOSITS OF RS. 40000/ - , RS. 92000/ - AND RS. 209000/ - THE SOURCE OF WHICH WAS EXPLAINED BY THE ASSESSEE FROM EARLIER WITHDRAWALS WAS NOT BELIEVED AND ADDITION WAS CONFIRMED. BEFORE US, THE LD AR REFERRED TO PAGE NO. 4 OF THE ASSESSMENT ORDER WHEREIN, THE ABOVE AMOUNT WAS DEPOSITED ON ACCOUNT OF WITHDRAWAL FROM VARIOUS BANKS IN EARLIER YEARS. THE LD AR SUBMITTED THAT SUCH SUM WAS AVAILABLE WITH HIM OUT OF THE WITHDRA WAL FROM PUNJAB NATIONAL BANK . 9. THE LD DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AS WELL AS PERUSED THE CASH FLOW CHART SUBMITTED BEFORE US AT PAGE NO. 142. OUT OF THE CA SH WITHDRAWAL THE ASSESSEE COULD SHOW THAT TOTAL CASH IN HAND AVAILABLE IS RS. 398650/ - . THE REVENUE HAS NOT SHOWN ANY EVIDENCE THAT ABOVE CASH IN HAND HAS BEEN UTILIZED BY THE ASSESSEE FOR ANY OTHER PURPOSES. THEREFORE, THE EXPLANATION GIVEN BY THE ASSESS EE CANNOT BE REJECTED. WHEN THE ASSESSEE HAS ENOUGH SUM AVAILABLE AND WHERE THERE IS NO ADDITION ON ACCOUNT OF HOUSEHOLD EXPENDITURE THE ADDITION MADE BY THE LD ASSESSING OFFICER AND CONFIRMED BY THE LD CIT(A) OF RS. 341000/ - RAM KISHAN VS.ITO, ITA NO. 1826/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) PAGE | 5 DESERVES DELETION. HENCE, WE D IRECT THE LD ASSESSING OFFICER TO DELETE THE ABOVE ADDITION. IN THE RESULT GROUND NO. 3 AND 4 OF THE APPEAL ARE ALLOWED. 11. GROUND NO. 5 AND 6 ARE RELATED TO ADDITION OF RS. 750000/ - ON ACCOUNT OF AMOUNT GIVEN TO SHRI SHIKHAR KAPOOR U/S 69 OF THE ACT. 12. BRIEF FACT OF THIS ISSUE SHOWS THAT ASSESSEE HAS MADE PAYMENT OF RS. 97.50 LACS TO ABOVE PERSON FOR PURCHASE OF PROPERTY OUT OF WHICH RS. 7.50 LACS WAS GIVEN IN CASH. THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE ABOVE SUM BEFORE THE ASSESSING OFFICER. HOWEV ER, BEFORE THE LD CIT(A) IT WAS STATED THAT IT HAS COME FROM RELATIVES AND RS. 5 LACS HAS BEEN GIVEN AS CASH LOAN FROM THE SON OF THE ASSESSEE AS HIS CONTRIBUTION. THE SON OF THE ASSESSEE CONFIRMED THE ABOVE SUM; HOWEVER, THE ADDITION WAS CONFIRMED. 13. THE LD AR SUBMITTED BEFORE US THAT THE SON OF THE ASSESSEE HAS GIVEN A CONFIRMATION OF INTEREST FREE LOAN TO THE ASSESSEE. HE FURTHER SUBMITTED THAT FURTHER SUM HAS BEEN RECEIVED AS LOAN FROM PART WITHDRAWAL . HE REFERRED TO THE COMPLETE CASH STATEMENT OF THE P URCHASE OF PROPERTY AT PAGE NO. 169 - 175 OF THE PAPER BOOK. 14. THE LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSED THE ARGUMENTS OF THE LD AR AND SUBMITTED THAT THERE IS NO EVIDENCE OF ANY SUM AVAILABLE WITH THE ASSESSEES SON. HE IS NOT AN INCOME TAX PAYEE AS NO EVIDENCE HAS BEEN SUBMITTED. HIS NATURE OF INCOME AND SOURCE OF ABOVE FUNDS IS ALSO NOT AVAILABLE. FURTHER WITH RESPECT TO RS. 250000/ - THERE IS NO EXPLANATION BEFORE THE LOWER AUTHORITIES, HENCE, ABOVE ADDITION HAS BEEN CONFIRMED CORRECTLY. 15. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE ASSESSEE HAS EXPLAINED THE FACT THAT OUT OF RS. 7.50 LACS , RS. 5 LACS IS RECEIVED FROM THE SON OF THE ASSESSEE AND BALANCE WAS OUT OF EARLIER BANK WITHDRAWALS. IN CASE OF SUM RECEIVED FROM THE SON A BALD CONFIRMATION HAVE BEEN SUBMITTED WITHOUT SUPPORTING THE SOURCE AND NATURE OF HIS INCOME. FURTHER, WITH RESPECT TO RS. 2.50 LACS THE ASSESSEE HAS MERELY STATED THAT ABOVE SUM IS FROM PAST WITHDRAWALS. HOWEVER, NO CASH FLOW STATEMENT RAM KISHAN VS.ITO, ITA NO. 1826/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) PAGE | 6 JUSTIF YING THE ABOVE PA YMENTS WAS FILED. FURTHER, THE LD ASSESSING OFFICER HAS ALSO NOT MADE AN EFFORT TO VERIFY THE FACT OF THE CONFIRMATION GIVEN BY THE SON OF THE ASSESSEE. IN VIEW OF THIS WE SET ASIDE THE WHOLE ISSUE WITH RESPECT TO ABOVE ADDITION OF RS. 7.05 LACS BACK TO TH E FILE OF THE LD AO WITH A DIRECTION TO THE ASSESSEE TO SUBSTANTIATE THE FACT OF LOAN RECEIVED FROM THE SON AS WELL AS TO JUSTIFY THE AVAILABILITY OF CASH OUT OF PAST SAVING AS SOURCE OF BALANCE SUM OF RS. 2.50 LACS. IN THE RESULT GROUND NO. 6 AND 7 OF THE APPEAL OF THE ASSESSEE IS ALLOWED ACCORDINGLY. 16. THE IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 / 01 / 2018 - S D / - - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 7 / 01 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI