Sh. Jatinder Singh Luthra, Chandigarh V. ITO, Chandigarh

ITA 206/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77153 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-05-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 25-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Gift
• Section: 143(3); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 206 TO 208/CHD/2011 ASSESSMENT YEARS : 2000-01,2001-02 & 2003-04 SH.JATINDER SINGH LUTHRA, VS. THE INCOME TAX OF FICER, # 125, SECTOR 21B, WARD 3(2), CHANDIGARH. CHANDIGARH. PAN: AAVPL7848Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 29.05.2014 DATE OF PRONOUNCEMENT : 19.06.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THESE THREE APPEALS FILED BY THE ASSESSEE ARE AGAIN ST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH EACH DATED 19.10.2010 AGAINST THE ORDERS PASSED UNDER SE CTION 144 OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE IN ITA NO.206/CHD/2011 HAS RAISED F OLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDERS OF LEARNED CIT(A) IS BAD, AGAINS T THE FACTS & LAW. 2. THAT THE LEARNED CIT(A) HAS WRONGLY MADE AN ADDI TION OF RS.2,58,328/- ON ACCOUNT OF RENT FROM SHED NO.1 D-84 A, MOHALI. 2 3. THAT THE LEARNED CIT(A) HAS WRONGLY MADE AN ADDI TION OF RS.2,00,000/- ON ACCOUNT OF UNDISCLOSED INCOME. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 3. THE ASSESSEE IN ITA NO.207/CHD/2011 HAS RAISED F OLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDERS OF LEARNED CIT(A) IS BAD, AGAINS T THE FACTS & LAW. 2. THAT THE LEARNED CIT(A) HAS WRONGLY MADE AN ADDI TION OF RS.4,72,035/- ON ACCOUNT OF RENT FROM D-84 A, MO HALI. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 4. THE ASSESSEE IN ITA NO.208/CHD/2011 HAS RAISED F OLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDERS OF LEARNED CIT(A) IS BAD, AGAINS T THE FACTS & LAW. 2. THAT THE LEARNED CIT(A) HAS WRONGLY MADE AN ADDI TION OF RS.1,52,776/- ON ACCOUNT OF RENT FROM SHED NO.1 AT D- 84 A, MOHALI. 3. THAT THE LEARNED CIT(A) HAS WRONGLY MADE AN ADDI TION OF RS.2,72,160/- ON ACCOUNT OF RENT FROM SHED NO.2 AT D- 84A, MOHALI. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 5. THIS BUNCH OF THREE APPEALS FILED BY THE ASSESSE E RELATING TO THE SAME ISSUE WERE HEARD TOGETHER AND ARE BEING DI SPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 6. THE GROUNDS OF APPEAL NO. 1 RAISED IN ITA NO. 20 6/CHD/2011 IS GENERAL AND HENCE DISMISSED. 3 7. THE ISSUE IN GROUND NO.2 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION ON ACCOUNT OF RENT RECEIVED FROM INDUSTRIA L SHED AT MOHALI. 8. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,13, 008/- WHICH WAS REVISED TWICE. THEREAFTER NOTICE UNDER SECTION 14 8 OF THE ACT WAS ISSUED TO THE ASSESSEE AFTER RECORDING REASONS FOR REOPENING OF ASSESSMENT. THE ASSESSEE IN RESPONSE SUBMITTED THA T THE RETURN ORIGINALLY FILED BY HIM SHOULD BE TREATED AS FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSMEN T WAS THEREAFTER COMPLETED UNDER SECTION 143(3) OF THE ACT AT TOTAL INCOME OF RS.6,74,630/-. 9. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER, AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL AND THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSI NG OFFICER DIRECTING THE ASSESSEE TO FURNISH EVIDENCE RELATING TO THE INVESTMENT MADE BY THE WIFE OF THE ASSESSEE. THE ASSESSING OFFICER ISSUED VARIOUS NOTICES OF HEARING TO THE AS SESSEE ON WHICH DATE THE ASSESSEE APPEARED AND REPEATEDLY REQUESTED FOR ADJOURNMENT BUT DID NOT FURNISH ANY INFORMATION BEF ORE THE ASSESSING OFFICER. THEREAFTER SHOW CAUSE NOTICE W AS ISSUED TO THE ASSESSEE TO EXPLAIN AS TO WHY TOTAL RENTAL INCOME S HOULD NOT BE ASSESSED IN HIS HANDS AS THE INVESTMENT WAS MADE BY HIM AND ALSO BECAUSE HE WAS THE ALLOTTEE OF THE SAID PLOT AND HA D ALSO DECLARED THE FULL VALUE OF THE SAID PROPERTY IN HIS RETURN O F WEALTH. THE ASSESSING OFFICER FURTHER NOTED THAT ANOTHER SHED W AS CONSTRUCTED ON THE SAID PLOT AND THE RENTAL OF RS.30,000/- WAS RECEIVED WHICH WAS NOT SHOWN BY THE ASSESSEE. THE REPLY OF THE AS SESSEE IN THIS 4 REGARD WAS THAT IT HAD RENTED THE SAID SHED AT RS. 1000/- PER MONTH TO HIS HUF, WHO IN TURN RENTED THE SAME AT MONTHLY RENT OF RS.30,000/-. FURTHER THE ASSESSING OFFICER IN THE FIRST ROUND HAD MADE AN ADDITION OF RS.2 LACS AS INCOME FROM UNDISC LOSED SOURCES ON ACCOUNT OF ASSESSEES GIFTING THE SAID AMOUNT TO HIS HUF ALONGWITH HIS WIFE, WHO IN TURN HAD GIFTED ANOTHER RS.2 LACS. 10. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSES SING OFFICER AS THE ASSESSEE HAD FAILED TO BRING ON RECORD ANY E VIDENCE TO PROVE THE SOURCE OF INVESTMENT OF THE SAID PLOT BY HIS WI FE. THE CIT (APPEALS) ALSO NOTED THAT THE ASSESSEE WAS HOLDING EXCLUSIVE RIGHT OF THE SAID PLOT OF LAND AND BIFURCATION OF THE REN TAL INCOME WAS ONLY TO AVOID HIGHER TAX. AS THE ASSESSEE HAD FAIL ED TO DISCHARGE THE BURDEN CAST UPON HIM, THE ADDITION OF THE FULL INCOME IN THE HANDS OF THE ASSESSEE WAS UPHELD. IN RESPECT OF T HE RENTAL INCOME OF RS.2,40,000/- FROM THE SECOND SHED THE SAME WAS CLAIMED TO BE EARNED BY HUF OF THE ASSESSEE. THE CIT (APPEALS) NOTED THAT NO EVIDENCE HAD BEEN ADDUCED EITHER AT THE ASSESSMENT STAGE OR THE APPELLATE STAGE REGARDING THE EXISTENCE OF THE HUF, ITS FUND OR INCOME IF ANY AND IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT THAT THE FUNDS WERE TRANSFERRED TO HUF OR T HE AMOUNT WAS INVESTED THEREIN, IT WAS HELD THAT THE ASSESSEE HAD DIVERTED ITS RENTAL INCOME TO REDUCE THE LIABILITY OF INCOME TAX . THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS REGARD WAS UP HELD. 11. IN RESPECT OF SECOND ADDITION OF RS.2 LACS THE CLAIM OF THE ASSESSEE THAT IT HAD WITHDRAWN CASH FROM ITS BANK O N VARIOUS DATES AND INVESTED THEREIN WAS NOT ACCEPTED. THE CIT (AP PEALS) UPHELD THE SAID ADDITION IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE 5 SUPREME COURT AND VARIOUS COURTS AS MENTIONED IN TH E PARAS 24 TO 28 OF THE APPELLATE ORDER. 12. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT THE INVESTMENT IN THE SAID PROPERTY WAS MADE OUT OF JOI NT ACCOUNT OF THE ASSESSEE AND HIS WIFE. HOWEVER, NO EXPLANATION WAS FILED BY THE ASSESSEE VIS--VIS THE SOURCE OF INVESTMENT BY THE WIFE OF THE ASSESSEE. THE LD. DR PLACED RELIANCE ON THE ORDER O F CIT(APPEALS). 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY THE BANK ACCOUNT IS IN JOINT NAMES OF TH E ASSESSEE AND HIS WIFE BUT IN THE ABSENCE OF ANY PROOF THAT THE W IFE OF THE ASSESSEE HAD CONTRIBUTED ANY AMOUNT WHICH IN TURN W AS UTILIZED FOR THE PURCHASE OF THE SAID PROPERTY, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE. ADMITTEDLY THE SAID PROPERTY WAS AL LOTTED IN THE NAME OF THE ASSESSEE. THE ASSESSING OFFICER HAD A LSO GIVEN A FINDING THAT THE ASSESSEE HAD HIMSELF FILED THE WEA LTH TAX RETURN FOR ASSESSMENT YEAR 1994-95 IN WHICH FULL VALUE OF THE SAID PROPERTY WAS DECLARED IN HIS HANDS AND WEALTH TAX WAS PAID T HEREON. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES THE TOTAL RENT RECEIPTS FROM THE SAID PROPERTY IS INCLUDIBLE IN TH E HANDS OF THE ASSESSEE. 14. THE NEXT ASPECT OF THE ISSUE RAISED VIDE THIS G ROUND OF APPEAL ITSELF IS IN RESPECT OF THE PORTION WHICH THE ASSES SEE CLAIMED TO HAVE LEASED OUT TO HIS HUF AT MONTHLY RENT OF RS.10 00/-, WHO IN TURN HAD CONSTRUCTED THE SHED THEREON AND RENTED OU T THE SAME TO M/S NEW AGE METAL FORGINGS (P) LTD. AT MONTHLY RENT AL OF RS.30,000/-. THE ASSESSEE HAD NOT FILED ANY EVIDE NCE TO ESTABLISH ITS CLAIM OF HIS HUF HAVING CONSTRUCTED THE SAID PR OPERTY OR HAVING 6 DECLARED THE SAID RENTAL INCOME IN HIS HANDS. THE ASSESSEE WAS INDIVIDUAL ALLOTTEE OF THE SAID PLOT OF LAND AND PE RMISSION WAS NEEDED IN CASE IT WAS LEASING OUT THE SAID PLOT TO ANY PERSON. IN THE ABSENCE OF THE ABOVE SAID EVIDENCE, WE FIND NO MERIT IN THE STAND OF THE ASSESSEE AND RENTAL INCOME RECEIVED BY THE ASSESSEE FROM THE SAID PORTION IS INCLUDIBLE AS INCOME OF TH E ASSESSEE. WE UPHOLD THE ORDER OF THE CIT (APPEALS) IN THIS REGAR D AND DISMISS THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE. THOUGH THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS.4,15,6 40/- WHICH HAS BEEN CONFIRMED BY THE CIT (APPEALS) BUT THE ASSESSE E HAD ONLY RAISED GROUND OF APPEAL AGAINST ADDITION OF RS.2,58 ,328/- AND HAD NOT FURNISHED ANY BIFURCATION OF THE DETAILS. IN T HE ABSENCE OF THE SAME WE UPHOLD THE ORDER OF THE ASSESSING OFFICER A ND DISMISS THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE. 15. THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY TH E ASSESSEE IS AGAINST ADDITION OF RS.2 LACS. THE ASSESSEE ALONG WITH HIS WIFE CLAIMED TO HAVE GIVEN GIFT OF RS.4 LACS TO J.S.LUTH RA. HOWEVER, NO SOURCE OF THE SAID AMOUNT OF RS.2 LACS WAS GIVEN BY THE ASSESSEE. THE ASSESSING OFFICER ACCEPTED THE CONTENTION OF TH E ASSESSEE AND CONCLUDED THAT BOTH THE ASSESSEE AND HIS WIFE HAD M ADE THE SAID GIFT OUT OF THEIR INCOME FROM UNDISCLOSED SOURCE. THE SAID ADDITION WAS MADE IN THE FIRST ROUND OF ASSESSMENT AND WAS U PHELD IN THE SECOND ROUND. THE LEARNED A.R. FOR THE ASSESSEE HA S FAILED TO FURNISH ANY EVIDENCE TO EXPLAIN THE SOURCE OF THE S AID AMOUNT OF RS.2 LACS AND IN THE ABSENCE OF THE SAME, WE UPHOLD THE ORDER OF THE CIT (APPEALS) AND DISMISS THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE. 7 16. IN ITA NO.207/CHD/2011 THE ONLY ISSUE VIDE GROU ND NO.2 RAISED BY THE ASSESSEE IS IN RESPECT OF THE RENTAL INCOME ASSESSED IN HIS HANDS. IN ITA NO.208/CHD/2011 SIMILAR ISSUE H AS BEEN RAISED BY THE ASSESSEE VIDE GROUND NOS.2 AND 3. THE FACTS AND ISSUE RAISED BY THE ASSESSEE IN ITA NOS.207 & 208/CHD/201 1 ARE IDENTICAL TO THE FACTS AND ISSUE RAISED VIDE GROUND NO.2 IN ITA NO.206/CHD/2011 AND OUR DECISION IN ITA NO.206/CHD/ 2011 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS.207 & 208/CHD/201 1. 17. IN THE RESULT, ALL THE THREE APPEALS FILED BY T HE ASSESSEE ARE THUS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JUNE, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH JUNE, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH