RAM SWAROOP LAMDA, Jaipur V. ACIT, Jaipur

ITA 22/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4944 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Unexplained investment; Corroborative evidences
• Section: 69; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 22/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 SHRI RAM SWAROOP LAMDA B-20, JAI AMBEY NAGAR, TONK ROAD, JAIPUR CUKE VS. THE ACIT CIRCLE- 6, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACLPL 4881 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.L. PODDAR, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY:SHRI R.A. VERMA, ADDL.CIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/09/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28/10/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A)-2, JAIPUR DATED 28-11-2014 FOR THE ASSESS MENT YEAR 2006-07 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. THE NOTICE ISSUE U/S 148 IS ILLEGAL, UNLAWFUL AND ABINITIO VOID. THE ASSESSMENT FRAMED IN PURSUANCE O F THIS NOTICE IS THEREFORE INVALID. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADD ITION OF RS. 15.01 LACS OUT OF RS. 21.01 LACS U/S 69 OF THE I.T. ACT O N ACCOUNT OF UNEXPLAINED INVESTMENT. ITA NO. 22/JP/2015 SHRI RAM SWAROOP LAMDA VS. ACIT CIRCLE- 6, JAIPUR . 2 2.1 THE GROUND NO. 1 OF THE ASSESSEE IS REGARDING I SSUANCE OF NOTICE U/S 148 OF THE ACT BY THE AO WHICH HAD BEEN DISPOSE D OFF BY THE LD. CIT(A) TAKING INTO CONSIDERATION ALL THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING THE SUBMISSIONS OF THE ASSESSEE. I F IND NO MERIT IN THE ARGUMENTS ADVANCED BY THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING BEFORE THE BENCH. HENCE, THE SAME IS DISMISSED. 2.2 APROPOS GROUND NO. 2 OF THE ASSESSEE AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS REPRODUCED AS UNDER:- 3.3.1 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. DURING ASSESSMENT AND APPEAL PROCEEDINGS, THE ASSESSEE HAS TRIED TO EXPLAIN THE SOURCE OF CAS H DEPOSITS OF RS. 21,01,000/- TO BE OUT OF AGRICULTURAL INCOME AND INTEREST INCOM E. THE ASSESSEE HAS STATED THAT HE OWNS 41 BIGHAS OF IRRIGATED AGRICULTURAL LA ND ON WHICH HE GROWS CROPS LIKE GROUNDNUT, TIL, GWAR, BAAJRA ETC. IN SUPPORT T HEREOF, THE ASSESSEE HAS SUBMITTED A COPY OF KHASRA GIRDARI FOR THE PERIOD S AMVAT 2055 TO 2062 ISSUED BY THE TEHSHILDAAR. THE APPELLANT HAS STATED THAT T HE ASSESSING OFFICER HAS NOT DOUBTED THE OWNERSHIP OF AGRICULTURAL LAND AS WELL AS THE FACT THAT THE ASSESSEE EARNED AGRICULTURAL INCOME FROM THIS LAND. ALSO, TH E ASSESSING OFFICER HAS ACCEPTED AGRICULTURAL INCOME OF RS. 2,09,243/- AND INTEREST INCOME OF RS. 1,60,220/- (WHICH INCLUDES INTEREST INCOME FROM OTH ERS AMOUNTING TO RS. 73,491/-) DURING ASSESSMENT PROCEEDINGS, IN THIS YE AR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED A CH ART SHOWING SALES FROM AGRICULTURE FROM THE YEAR 1993-94 (RANGING FROM RS. 1,40,000/- IN THE YEAR 1993-94 TO RS. 2,50,000/- IN THE YEAR 2004-05), EXP ENSES FROM AGRICULTURAL RECEIPTS @25%, INTEREST INCOME AND ANNUAL HOUSEHOLD EXPENSES (RANGING FROM RS. 12,000/- IN THE YEAR 1993-94 TO RS. 33,000/- IN THE YEAR 2004-05). THE ASSESSEE ALSO FURNISHED SOME EVIDENCES OF SALES OF AGRICULTURAL INCOME, DURING ASSESSMENT PROCEEDINGS. WHILE THE ASSESSING OFFICER HAS ACCEPTED THAT THE ASSESSEE HAD EARNED AGRICULTURAL INCOME, IT WAS THE QUANTUM OF THIS INCOME WHICH HAS NOT ASCERTAINED BY THE ASSESSING OFFICER, IN TH E ABSENCE OF SUPPORTING EVIDENCES. 3.3.2 FROM THE ABOVE FACTS, IT IS CLEAR THAT THE AS SESSEE OWNS IRRIGATED AGRICULTURAL LAND MEASURING 41 BIGHAS AND HAS BEEN CARRYING OUT AGRICULTURAL ITA NO. 22/JP/2015 SHRI RAM SWAROOP LAMDA VS. ACIT CIRCLE- 6, JAIPUR . 3 ACTIVITY ON THIS LAND. ALSO, THE ASSESSEE HAS BEEN EARNING INTEREST INCOME. A PART OF THE CASH DEPOSITS, OF RS. 21,01,000/- COULD BE OUT OF THE SAVINGS FROM THIS INCOME. SINCE THE ASSESSEE HAS NOT BEEN FILING RETURN OF INCOME OR MAINTAINING BOOKS OF ACCOUNTS OR BANK ACCOUNT PRIOR TO THIS YEAR, THERE IS NO READY REFERENCE TO DETERMINE THE SAVINGS FROM THIS ANNUAL INCOME. THEREFORE, THERE IS NO OPTION OTHER THAN TO ESTIMATE THE SAVIN GS MADE BY THE ASSESSEE FROM AGRICULTURAL INCOME AND THE INTEREST INCOME. T HE KHASRA GIRDARI ISSUED BY THE TEHSHILDAAR IS FROM F.Y. 1999- 2000 ONWARDS. DU RING THIS PERIOD, THE ASSESSEE HAS SHOWN SALES FROM AGRICULTURAL INCOME T O BE RANGING FROM RS. 1,95,000/- IN F.Y. 2000-01 TO RS. 2,50,000/- IN F.Y . 2004-05. THE ASSESSEE HAS SUBMITTED EVIDENCES OF SALE OF AGRICULTURAL GOO DS FOR A PART OF THIS AMOUNT. HE HAS ESTIMATED AGRICULTURAL EXPENSES TO BE 25% OF THE SALES, WHICH IS IN MY VIEW, IS VERY LOW AND NOT CORRECT. THE ASSESSEE HAS ALSO ESTIMATED HOUSEHOLD EXPENSES AT RS. 21,600/- IN F.Y. 1999-2000 WHICH HA S SLOWLY INCREASED TO RS. 33,000/- IN F.Y. 2004-05. THIS, IN MY VIEW IS EXTRE MELY LOW. IN ADDITION TO THIS, THE ASSESSEE HAS ESTIMATED THE INTEREST INCOM E RANGING FROM RS. 36,000/- IN F.Y. 1999-2000 TO RS. 66,000/- IN F.Y. 2004-05. SINCE THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE ABOUT AGRICULTURAL INCOME PR IOR TO F.Y. 1999- 2000 AS ALSO THAT THE PERIOD PRIOR TO F.Y. 1999-2000 IS FAR TOO REMOTE FOR THE ASSESSEE TO BE PHYSICALLY CARRYING SAVINGS IN CASH FOR SUCH A LONG TIME; SAVINGS ARE BEING DETERMINED FROM F.Y. 1999-2000 ONWARDS. ALSO, THE HOUSEHOLD WITHDRAWAL CANNOT BE IN THE RANGE OF LESS THAN RS. 2,000/- TO LESS THAN RS. 3,000/- PER MONTH. IN MY VIEW, IT CANNOT BE LESS TH AN RS. 10,000/- PER MONTH. LOOKING TO THE ABOVE FACTS, IN MY VIEW THE SAVINGS FROM AGRICULTURAL INCOME (NET OF ACTUAL EXPENSES) AND INTEREST INCOME AFTER HOUSEHOLD WITHDRAWALS CANNOT BE MORE THAN RS. 1 LAKH IN ANY YEAR. TAKING ALL THE ABOVE FACTORS INTO CONSIDERATION, THE SAVINGS FROM AGRICULTURAL INCOME AND INTEREST INCOME, AFTER ACCOUNTING FOR HOUSEHOLD WITHDRAWALS CANNOT BE ESTI MATED TO BE MORE THAN RS. 6 LAKHS. THEREFORE, THE CASH DEPOSITS OF RS. 21 ,01,000/- CAN BE EXPLAINED TO BE FROM PAST SAVINGS ONLY TO THE EXTENT OF RS. 6 ,00,000/-. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER OF UNEXPLAIN ED INVESTMENT OF RS. 21,01,000/- U/S. 69 OF THE IT. ACT. IS RESTRICTED T O RS. 15,01,000/-. THE BALANCE ADDITION IS DIRECTED TO BE DELETED. THIS GROUND IS PARTLY ALLOWED. 2.3 THE LD. CIT(A) CONCLUSIVELY RESTRICTED THE ADDI TION TO THE EXTENT OF RS.6.00 LACS OUT OF TOTAL ADDITION OF RS. 21.01 LAC S. 2.4 BEING AGGRIEVED, THE ASSESSEE IS IN APEAL BEFOR E THIS BENCH PRAYING THAT THE LD. CIT(A) HAD ERRED IN SUSTAINING THE ADD ITION OF RS.15.01 LACS OUT OF TOTAL ADDITON OF RS.21.01 LACS U/S 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT AND THE SAME SHOULD BE DELET ED. ITA NO. 22/JP/2015 SHRI RAM SWAROOP LAMDA VS. ACIT CIRCLE- 6, JAIPUR . 4 2.5 DURING THE COURSE OF HEARING THE LD. DR RELIED ON THE ORDER OF THE LD. CIT(A). 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED FROM THE RECORD THAT THE AO HAD MADE THE ADDITON OF RS.21.01 LACS TAKING INTO CONSIDERAT ION THE CASH DEPOSITS OF RS.21.01 IN ASSESSEES BANKING ACCOUNT/ POST OFICE MIS ACCOUNT. THE AO OBSERVED THAT WHATEVER THE EXPLANATION IN THIS R EGARD THE ASSESSEE HAD SUBMITTED COULD NOT BE RELIED UPON AND THE SAME WERE NOT SUPPORTED WITH THE CONCRETE EVIDENCE AND REASONED BASE. THE A O FURTHER OBSERVED THAT IT IS EVIDENT THAT THE ASSESSEE HAD CREATED T HE SAID EXPLANATION IN SUPPORT OF HIS CONTENTION AS PER HIS OWN REQUIREMEN TS. ACCORDINGLY, SUCH CASH DEPOSITS MADE BY THE ASSESSEE REMAINED UNEXPL AINED AS PER OBSERVATION OF THE AO AND THE AO TREATED THIS CASH DEPOSIT OF RS.21.01 LACS AS UNEXPLAINED INVESTMENT OF THE ASSESSEE U/S 69 OF THE ACT. HOWEVER, IN FIRST APEAL, THE LD. CIT(A) REDUCED THE ADDITION TO RS.6.00 LACS BUT CONFIRMED THE ADDITION OF RS.15.01 LACS OU T OF TOTAL ADDITION OF RS.21.01 LACS MADE BY THE AO. THE LD. CIT(A) NOTED THAT THE ASSESSEE HAD SUBMITED EVIDENCE OF SALE OF AGICULTURAL GOODS FOR A PART OF THIS AMOUNT AND ESTIMATED AGRICULTURAL EXPENSES TO THE T UNE OF 25% WHICH AS PER LD. CIT(A) WAS VERY LOW AND NOT CORRECT. THE L D. CIT(A) NOTED THAT ITA NO. 22/JP/2015 SHRI RAM SWAROOP LAMDA VS. ACIT CIRCLE- 6, JAIPUR . 5 THE ASSESEE HAD CLAIMED HOUSEHOLD EXPENSES AT RS.21 ,600/- IN F.Y. 1999- 2000 WHICH HAD SLOWLY INCREASED TO RS.33,000/- IN F .Y. 2004-05. THE LD. CIT(A) OBSERVED THAT THE HOUSEHOLD WITHDRAWAL COULD NOT IN THE RANGE OF LESS THAN RS.2,000/- TO LESS THAN RS.3,000/- PER MO NTH. THE LD. CIT(A) VIEW WAS THAT IT CANNOT BE LESS THAN RS.10,000/- PE R MONTH AND HENCE LOOKING TO THE FACTS THE SAVINGS FROM AGRICULTURAL INCOME (NET OF ACTUAL EXPENSES) AND INTEREST INCOME AFTER HOUSEHOLD WITHD RAWAL COULD NOT BE MORE THAN RS.1.00 LAC IN ANY YEAR. ON THAT BASIS, T HE LD. CIT(A) CAME TO A CONCLUSION THAT THE PAST SAVINGS OF THE ASSESSEE COULD BE AROUND RS.6.00 LACS ONLY. IT IS A FACT THAT THE ASSESSEE I S A OWNER OF IRRIGATED LAND MEASURING 42 BIGHAS AND HE HAD BEEN CARRYING OUT AG RICULTURAL ACTIVITY ON THIS LAND SINCE LONG. THE ASSESSEE WAS ALSO EARNIN G INTEREST INCOME ON THE PAST SAVINGS. IT IS NOTICED THAT THE ASSESSEE W AS NOT FILING THE RETURN OF INCOME BEING FARMER. IT IS NOTICED THAT THE ASSESSE E HAD DECLARED THE AGRICULTURAL INCOME AT RS 1.95 LACS FROM SALES OF AGRICULTURAL PRODUCE IN F.Y. 2000-01 AND RS.2.50 LACS IN F.Y. 2004-05. ASSE SSEE WAS IN AGRICULTURAL ACTIVITY ON THIS LAND OWND BY HIM SINC E LONG I.E. MUCH PRIOR TO A.Y. 2000-01. THEREFORE, THERE MUST BE SAVINGS F ROM EARLIER YEARS BY SELLING AGRICULTURAL PRODUCES. HOWEVER, LOOKING TO THE AGRICULTURAL HOLDINGS OF THE ASSESSEE REGARDING CROPS GROWN THER EUPON AND IN VIEW OF ITA NO. 22/JP/2015 SHRI RAM SWAROOP LAMDA VS. ACIT CIRCLE- 6, JAIPUR . 6 THESE FACTUAL MATRIX, I FEEL THAT THE LD. CIT(A) HA D ESTIAMTED THE PAST SAVINGS OF THE ASSESSEE ON LOWER SIDE. THEREFORE, I N VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I ESTIMATE THE SAVINGS OF THE ASSESSEE TO THE EXTENT OF RS. 16.00 LACS IN ALL AND DIRECT TO DELETE THE ADDITION TO THE EXTENT OF RS.10.00 LACS OUT OF THE TOTAL ADDITI ON SUSTAINED BY THE LD. CIT(A) AT RS 15.01 LACS U/S 69 OF THE I.T. ACT ON A CCOUNT UNEXPLAINED INVESTMENT. THUS THE ASSESSEE WILL GET THE PARTIAL RELIEF OF RS.10.00 LACS ONLY. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 /1 0/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 /10/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAM SWAROOP LAMDA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE- 6 JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 22/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR