ITO, CHITTORGARH V. Smt. Lalita Devi Vijayvargiya, CHITTORGARH

ITA 196/JODH/2013

• Counselvise Citation: 19623314 RSA 2013
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-02-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: S K GANGWANI
• Keywords: Gift; Additional evidence; Reassessment proceedings
• Section: 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR ( BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAINI ) ITA NO.196/JODH/2013 ASSESSMENT YEAR: 2006-07 PAN: ADAPV 1253 H THE ITO VS SMT. LALITA DEVI VIJAYVARGIYA WARD -3 54, KABIR COLONY KILA ROAD, CHITTORGARH CHITTORGARH (APPELLANT) (RESPONDENT) ITA NO.197/JODH/2013 ASSESSMENT YEAR: 2006-07 PAN: AEBPY0777N THE ITO VS SHRI JASVANT VIJAYVARGIYA WARD -3 54, KABIR COLONY KILA ROAD, CHITTORGARH CHITTORGARH (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.A. JOSHI ASSESSEE BY : SHRI S.K. GANGWANI DATE OF HEARING : 17.02.2014. DATE OF PRONOUNCEMENT : 21.02.2014 ORDER PER HARI OM MARATHA, J.M. THE ABOVE CAPTIONED APPEALS FILED BY THE REVENUE A GAINST DIFFERENT ASSESSEES PERTAINING TO A.Y. 2006-07 ARE DIRECTED AGAINST SEP ARATE ORDERS OF THE LD CIT(A), UDAIPUR DATED 21-01-2013 AND 22-01-2013, RESPECTIVELY AND A RE BEING DISPOSED OFF BY THIS COMMON ORDER AS IN BOTH THESE APPEALS ALMOST IDENTI CAL ISSUES ARE INVOLVED. 2.1 TO START WITH, WE WOULD LIKE TO NARRATE THE FA CTS ARISING IN THE CASE OF SHRI JASVANT VIJAYVARGIYA PERTAINING TO ITA NO.197/JODH/2013 FOR THE A.Y. 2006-07. AS PER THE 2 ASSESSMENT ORDER DATED 27-12-2010, ON THE BASIS OF THE COMPLAINT RECEIVED IN RESPECT OF PERSONS BELONGING TO SHRI GOVIND LAL VIJAYVARGIYA GROUP, THE INVESTIGATION WING GOT THE ENQUIRIES CONDUCTED. A STATEMENT OF SHRI GOVIND LAL VIJAYVARGIYA WAS RECORDED ON TWO DATES I.E. ON 28-05-2009 AND 29-06-2009. ON THE BAS IS OF THE STATEMENT OF SHRI GOVIND LAL VIJAYVARGIYA, IT WAS NOTICED THAT HIS SON SHRI JASVANT VIJAYVARGIYA HAD MADE ADVANCES TO HIS FATHER AND MOTHER FOR PURCHASING SO ME PROPERTY. ON VERIFICATION OF THE FACTS FROM THE RETURN OF INCOME [ROI] FILED BY SHRI JASVANT VIJAYVARGIYA FOR THE A.Y. 2006-07 ON 25-05-2007 DISCLOSING INCOME OF RS. 98,0 07/-, BEING THE FIRST RETURN OF INCOME FILED BY HIM, IT WAS NOTICED THAT IN THE BAL ANCE SHEET FILED ALONGWITH RETURN OF INCOME, THE ASSESSEE HAS SHOWN OPENING CAPITAL BALA NCE OF RS. 13,45,750/-. SINCE THE ASSESSEE HAD NOT DISCLOSED THIS AMOUNT IN ANY EARLI ER YEAR, THE A.O. HAS CONCLUDED THAT THIS OPENING BALANCE DID NOT PERTAIN TO EARLIER YEA RS BUT IT IS HIS INCOME RELATING TO THE A.Y. 2006-07 IN WHICH YEAR THIS OPENING STOCK HAS BEEN DISCLOSED BY HIM. RESULTANTLY, THE A.O. AFTER RECORDING THE REASONS, ISSUED A NOTI CE U/S 148 OF THE ACT ON 29-092009. IN COMPLIANCE TO THE NOTICE ISSUED U/S 148 OF THE ACT, A LETTER STATING THAT HIS ORIGINAL RETURN OF INCOME FILED ON 25-05-2007 MAY BE TREATED AS RET URN FILED IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT, WAS FILED. THE ASSESSEE OBJECTED TO THE INITIATION OF REASSESSMENT PROCEEDINGS BUT THE OBJECTIONS RAISED BY HIM WERE D ISPOSED OFF BY THE A.O. BY PASSING A SPEAKING ORDER. IN FURTHER PROCEEDINGS, THE ASSESSE E FILED A CHART ON 3-09-2010 CLAIMING THE IMPUGNED OPENING CAPITAL AS UNDER:- 2003-04 2004-05 2005-06 OPENING BALANCE 1283195 1301970 1345750 INCOME OF THE YEAR 48775 53780 98007 TOTAL 1331970 1355750 1443757 DRAWINGS 30000 10000 18000 CLOSING BALANCE 1301970 1345750 1425757 3 FURTHER ON 2-12-2010, THE ASSESSEE O FILED A LIST O F PERSONS TO WHOM HE HAD ADVANCED MONIES. THE ASSESSEE EXPLAINED THAT THE OPENING CAP ITAL WAS RECEIVED BY HIM FROM HIS GRANDFATHER AND GRANDMOTHER AS GIFT AND THAT AMOUNT S WERE ADVANCED TO VARIOUS PERSONS WITHOUT INTEREST BECAUSE THERE WAS NO BANK FACILITY IN THE VILLAGE, SO HE WANTED TO KEEP HIS CAPITAL SAFE. AT THE SAME TIME, IN ORDER TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION SOME PORTION OUT OF THIS CAPITAL WAS SUR RENDERED. HOWEVER, AFTER OBSERVING THAT, THE ASSESSEE DID NOT FILE A COPY OF BANK ACCOUNT, C OPY OF ACCOUNT OF PERSONS TO WHOM MONEY HAD BEEN ADVANCED, DETAILS OF LOAN/ ADVANCES GIVEN, THE A.O. HAS REJECTED THE ABOVE SUBMISSIONS OF THE ASSESSEE. THE A.O. HAS ALS O MENTIONED THAT THE ASSESSEE BECAME MAJOR ON 6-12-2005 IN THIS YEAR ITSELF. THEREFORE, THE INCOME OF THIS ASSESSEE SHOULD HAVE BEEN CLUBBED IN THE INCOME OF HIS FATHER IN EARLIER YEARS. IN THE DETAILS, THE ASSESSEE HAS SHOWN OPENING BALANCE IN A.Y. 2004-05 AT RS. 12,83, 195/- BUT NO BASIS FOR ARRIVING AT THIS FIGURE HAS BEEN PROVIDED. WITH THESE OBSERVATI ONS, THE A.O. HAS DISBELIEVED THE EXISTENCE OF OPENING CAPITAL BALANCE TO THE EXTENT OF RS. 13,45,750/- AFTER ACCEPTING RS. 2,25,400/- AS EXPLAINED WITH THE HELP OF GOLD AND S ILVER JEWELLERY BY TREATING IT AS NORMAL TO HAVE BEEN RECEIVED AS GIFTS GIVEN IN THE INDIAN TRADITION. THEREFORE, THE A.O. HAS MADE AN ADDITION OF RS. 10,70,350/- IN ASSESSEE'S HANDS. FURTHER, THE A.O. HAS ALSO ADDED SOME PART OF THE EXPENSES OF RS. 35,907/- AND HAS ALSO A DDED BACK TO THE INCOME OF THE ASSESSEE. AS A RESULT, THE A.O. HAS COMPUTED THE TO TAL INCOME OF THE ASSESSEE AT RS. 12,04,264/-. 2.2 AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A) WHO HAS DELETED THE ADDITION OF RS. 10,70,350/-. 4 2.3 AGAINST THIS DELETION OF THE IMPUGNED ADDITION , THE REVENUE HAS COME IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD CIT(A) HAS ERRED IN:- 1. IGNORING THE FACT THAT IN REPLY TO SHOW CAUSE NOTICE DATED 16-12- 2010 THE ASSESSEE INTER ALIA ADMITTED PART OF THE OPENING CAPITAL, HER UNDISCLOSED INCOME AND THEREFORE, ASSESSEE HAS NO LOCUS STAND DIE TO AGITATE THE ISSUE IN APPEAL. 2(A) ACCEPTING THE ADDITIONAL EVIDENCE WITHOUT GI VING ANY OPPORTUNITY TO THE A.O. WHICH IS NOT PERMISSIBLE AS PER RULE 46A OF THE I.T. RULES,1962. 2(B) IGNORING THE FACT THAT THE ASSESSEE HAS HERS ELF ADMITTED THAT THE FIRST RETURN HAS BEEN FILED FOR A.Y. 2006-07 AND FOR EA RLIER YEARS NO RETURN WAS FILED, THEREBY THE CONTENDED BALANCE SHEET SO FIL ED BEFORE THE LD CIT(A) FOR THE F.Y. 2003-04 TO 2005-06 IS OF NO MERIT. 3. DELETING THE ADDITION RS. 10,70,350/- ON ACCOU NT OF UNDISCLOSED SOURCES MADE BY THE A.O. WITHOUT APPRECIATING THE FULL FACTS OF THE CASE. 2.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. BOTH THE PARTIES HAVE REITERATE D THEIR EARLIER STANDS FOR AND AGAINST THEIR CASES. AFTER CONSIDERING THE RIVAL SUBMISSIO NS, WE HAVE FOUND THAT NO ADDITIONAL EVIDENCE, IN FACT, WERE PRODUCED BEFORE THE LD CIT( A) AND WHATEVER EVIDENCE HAS BEEN REFERRED TO BEFORE HIM WAS ALREADY AVAILABLE BEFORE THE A.O.. WHEN ANY ASSESSEE DOES NOT HAVE TAXABLE INCOME THEN HE OR SHE IS NOT BOUND TO FILE THE RETURN OF INCOME . HOWEVER, WHILE JUSTIFYING THE OPENING BALANCE, THE ASSESSEE CAN PREPARE THE PAPERS RELEVANT TO EARLIER ASSESSMENT YEARS WHICH ARE IN REGARD TO F.Y . 2003-04 TO 2005-06. IN THIS CASE, AFTER CONSIDERING THE SUBMISSIONS OF THE LD DR IN T HE LIGHT OF THE ASSESSMENT ORDER VERSION, IT IS FOUND THAT THE A.O. HIMSELF HAS TREA TED SOME PART OF THE OPENING BALANCE AS EXPLAINED WHEREAS WITHOUT ANY CONTRARY REASONS, HE HAS TREATED A PART THEREOF I.E. TO THE 5 EXTENT OF RS. 10,70,350/- AS UNEXPLAINED. IN FACT, THE ASSESSEE DID NOT RECEIVE ANY INCOME AS HAS BEEN ALLEGED BUT IT WAS ONLY THE GIFTS WHICH WERE RECEIVED BY HIM. IT CANNOT BE SAID THAT THE RETURN HAS BEEN FILED BY THE ASSESSEE IN ORDER TO CREATE EVIDENCE TO PROVE THE ADVANCES GIVEN BY HIM BECAUSE ADIT (INV.) , UDAIPUR CONDUCTED ENQUIRY MUCH AFTER FILING OF THESE RETURNS WHICH ARE VERIFIABLE FROM T HE A.O.S RECORDS. AS PER THE A.O.S RECORDS, THE ASSESSEE HIMSELF IS AN ASSESSEE OF THE DEPARTMENT FROM THE A.Y. 2003-04 ONWARDS. THEREFORE, THE OPENING BALANCE CANNOT BE C ONSIDERED AS INCOME OF THE ASSESSMENT YEAR UNDER CONSIDERATION. THE CHART FILE D BY THE ASSESSEE REGARDING THE OPENING BALANCE CAPITAL IN TWO PREVIOUS YEARS ALONG WITH COPY OF THE BALANCE SHEET FOR THE YEAR ENDED ON 31-03-2003, 31-03-2004 AND 31-03-2006 CLEARLY EXPLAIN THE ASSESSEE'S CASE. THE EVIDENCE FILED REGARDING THE LIST OF DEBT ORS, DETAILS OF AMOUNT ADVANCED TO THEM ETC IN ORDER TO EXPLAIN THE ACCRETION OF THE OPENIN G BALANCE ARE SUFFICIENT ENOUGH TO SUPPORT THE ASSESSEE'S CLAIM. THEREFORE, IN OUR CO NSIDERED OPINION, THE IMPUGNED DELETION OF ADDITION OF RS. 10,70,350/- IS QUITE IN ORDER AN D NO INFERENCE IS WARRANTED. ACCORDINGLY, WE DISMISS THE APPEAL OF THE ASSESSEE. ITA NO.196/JODH/2013 SMT LALITA DEVI VIJAYVARGI YA 3.1 IN THE CASE OF SMT. LALITA DEVI VIJAYVARGIYA, T HE FACTS OF THIS ASSESSEE ARE CONCOMITANTLY SAME AND SIMILAR. THE MAIN FACTS OF T HIS ASSESSEE SUPPORT HER CASE MORE THAN HER BROTHER IS THAT SHE HAD ATTAINED MAJORITY LONG BACK. THE POSITION OF OPENING BALANCE IN HER CASE IS AS UNDER:- 2003-04 2004-05 2005-06 OPENING BALANCE 21,37,137 21,36,902 22,22,052 INCOME OF THE YEAR 00,49,765 01,09,150 01,31,195 TOTAL 21,86,902 22,46,052 23,53,247 DRAWINGS 00,50,000 00,24,000 00,30,000 CLOSING BALANCE 21,36,902 22,22,052 23,23,247 6 SHE HAS ALSO EXPLAINED THIS OPENING BALANCE WITH TH E HELP OF THE GIFTS RECEIVED FROM NEAR AND DEAR RELATIVES, EXCEPT FOR THE AMOUNT ADVANCED BY HER AS INVOLVED WITH OTHER FACTS, DEFENCE OF THE ASSESSEE, REASONS FOR ADDITION GIVEN BY THE A.O. AND THE REASONS GIVEN BY THE LD CIT(A) TO DELETE THE ADDITION OF RS. 15,75,7 74/-ARE EXACTLY SIMILAR IN THIS CASE ALSO. THE ARGUMENTS OF BOTH THE SIDES ARE ALSO IDENTICAL TO THAT OF THE CASE OF SHRI JASVANT VIJAYVERGIYA AS DISCUSSED ABOVE. THEREFORE, WITH TH E SIMILAR REASONING, WE COME TO THE SAME CONCLUSION THAT NO INTERFERENCE IS CALLED FOR AS WE HAVE FOUND THAT THE FINDINGS OF THE LD CIT(A) FOR DELETION OF ADDITION AS CORRECT. ACCORDINGLY, WE ALLOW THIS APPEAL OF THE ASSESSEE. 4.0 IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21-0 2-2014. SD/-/- SD/- ( N.K. SAINI ) (HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR *MISHRA COPY FORWARDED TO :- 1. THE ITO, WARD-3, CHITTORGARH 2. SMT LALITA DEVI VIJAYVERGIYA, CHITTORGARH 3. SHRI JASVANT VIJAYVERGIYA, CHITTORGARH 4. THE LD. CIT (A) 5. THE LD. CIT 6. THE D/R 7. GUARD FILE (ITA NO. 196 & 197/JODH/2013) BY ORDER, AR ITAT, JODHPUR 7