Mrs. Kaushalya Gupta, New Delhi V. ITO, New Delhi

ITA 2235/DEL/2013

• Counselvise Citation: 223520114 RSA 2013
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-11-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 16-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS KUMAR
• Keywords: Gift; Period of limitation; Tangible material; Accommodation entries; Time period of passing order
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I : NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI D.K. SRIVASTAVA, AC COUNTANT MEMBER ITA NO. 2235/DEL/2013 ASSESSMENT YEAR: 2002-03 MRS. KAUSHALYA GUPTA, VS. ITO, 4/2, JAIDEV PARK WARD NO. 25(3) PUNJABI BAGH NEW DELHI. NEW DELHI 110 026 (PAN NO. AAIPG1239R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SALIL AGGARWAL, ADVOCATE, SHRI SHAILESH GUPTA, CA RESPONDENT BY : SHRI B. SRINIVAS KUMAR, SR. DR ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE ACTION OF THE ASSESSING AUTHORITY U/S 147/148 OF TH E IT ACT 1961 IS AGAINST THE LAW AND THE FACTS OF THE CASE AND BEYOND LIMITATION PERIOD AND THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING AUTHORITY ; 2) THE ASSESSING AUTHORITY HAS ERRED IN MAKING ADDITION OF RS. 2 LAC IN RESPECT OF LOAN RECEIVED FROM SMT. SITA DEVI U/S 68 OF THE ACT INSPITE OF TH E FACT THAT RELEVANT DOCUMENTS AND PROOF WERE FILED AND LD. CIT(A) HAS ERRED IN CO NFIRMING THE ADDITION; AND 3) THE ASSESSING AUTHORITY HAS ERRED IN MAKING AN ADDI TION OF RS. 2 LAC U/S 68 OF THE ACT IN RESPECT OF GIFTS RECEIVED FROM SMT. SARASWAT I DEVI. ITA NO. 2235/DEL/2013 2 2. IN SUPPORT OF GROUND NO. 1 THE LD. AR SUBMITTE D THAT MERELY ON THE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WIN G OF THE DEPARTMENT THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRY OF RS. 2 LAC EACH FROM SMT. SARASWATI DEVI, AND SMT. SITA DEVI WITHOUT SUPPORTED BY ANY T ANGIBLE MATERIAL, THE AO HAD INITIATED THE REOPENING PROCEEDINGS. HE SUBMITTED THAT THE INFORMATION WAS NEITHER SUPPORTED BY ANY STATEMENT NOR ANY ANNEXUR E HAD BEEN ATTACHED IN SUPPORT OF THE INFORMATION. LD. AR REFERRED PAGE NU MBERS 1 & 2 OF THE PAPER BOOK I.E. COPY OF REASONS RECORDED FOR INITIATION P ROCEEDINGS U/S 148 OF THE ACT. HE CONTENDED THAT IN ABSENCE OF ANY TANGIBLE MATERI AL IN SUPPORT OR ANY STATEMENT OR ANY ANNEXURE IN SUPPORT OF THE INFORMA TION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT ON THE BASIS O F WHICH REASON HAVE BEEN RECORDED, THE INITIATION OF REOPENING PROCEEDINGS U /S 148 OF THE ACT IS INVALID AND THE ASSESSMENT MADE IN FURTHERANCE THERETO IS VOID. IN THIS REGARD HE CITED FOLLOWING DECISIONS :- COMMISSIONER OF INCOME-TAX V. PRADEEP KUMAR GUPTA [2008] 303 ITR 95 (DEL) [2007] SIGNATURE HOTELS PVT .LTD. VS ITO AND ANOTHER, (2001) 338 ITR 51 (DELHI) CIT VS. SMT. KUSUM GUPTA ITA NO. 831/2010 (DELHI HIGH COURT) SMT. JASWINDER KAUR VS. ITO ITA N O. 1511/D/2011 (ASSTT. YEAR 2002-03) ORDER DATED 7.10.2004 SMT. NEERAJ GOEL VS. ITO ITA NO. 1258 /D/2010 (ASSTT. YEAR 2004- 05) ORDER DATED 11.10.2013 ITA NO. 2235/DEL/2013 3 ITO VS. SHRI KAMAL KUMAR MISHRA ( 2013) 143 ITD 686 (LUCKNOW) 3. LD. AR SUBMITTED FURTHER THAT IN THE PRESENT CASE IT IS AN UNDISPUTED POSITION THAT THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACC OUNTS. HENCE NO AMOUNT WAS CREDITED IN ANY ACCOUNT. HE SUBMITTED THAT ACCOUNT S MAINTAINED BY THE BANK OF THE ASSESSEE CAN NOT BE TREATED AS BOOKS OF ACCOUN TS OF THE ASSESSEE. IN SUPPORT HE PLACED RELIANCE ON THE FOLLOWING DECISIO NS : ITO VS. KAMAL KUMAR MISHRA 143 ITD 686 (LUCKNOW) ANAND RAM RAITANI. V. COMMISSIONER OF INCOME TAX. 223 ITR 544 (GAWAHATI) SMT. SHANTA DEVI. V. COMMISSIONER OF I NCOME TAX. 171 ITR 532 (P & H) 4. IN SUPPORT OF GROUND NO. 2 & 3 ON MERITS OF TH E ADDITIONS, THE LD. AR SUBMITTED THAT THE AO HAD MADE THE ADDITION U/S 68 OF RS. 2 LAC RECEIVED AS A LOAN FROM SMT. SITA DEVI AND RS. 2 LAC RECEIVED AS A GIFT FROM SMT. SARASWATI DEVI TREATING THEM AS ACCOMMODATION ENTRIES WITHOUT VERIFYING THE CORRECTNESS OF THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT O F THE GENUINENESS OF THESE CLAIMS. HE SUBMITTED THAT THE ASSESSEE HAD FURNISHE D FOLLOWING DOCUMENTS BEFORE THE AO AND LD. CIT(A) AND NOW MADE AVAILABLE AT PAGE NOS. 1 TO 7 OF THE PAPER BOOK :- 1) AFFIDAVIT EXECUTED DONOR (SMT. SARASWATI D EVI) IN FAVOUR OF THE ASSESSEE 2) MEMORANDUM OF GIFT EXECUTED BY SMT. SARASW ATI DEVI 3) BANK STATEMENT OF SMT. SARASWATI DEVI ITA NO. 2235/DEL/2013 4 4) BANK STATEMENT OF ASSESSEE 5) CONFIRMATION OF LENDER SMT. SITA DEVI 5. LD. AR SUBMITTED FURTHER THAT THE ASSES SEE HAD RECEIVED LOAN OF RS. 2 LAC FROM SMT. SITA DEVI VIDE CHEQUE NO. 147190 DRAW N ON JAI LUXMI CO-OPERATIVE BANK LTD. AND LOAN AMOUNT WAS SQUARED UP DURING THE YEAR ONLY. ABOUT THE SOURCE OF THE AMOUNT OF RS. 2 LAC GIVEN AS GIFT BY SMT. SARASWATI DEVI, HE SUBMITTED THAT SHE HAS DEPOSITED TO RS. 2 LAC WITH AMIT TRADING COMPANY 2246, GALI RAGHUNANDAN, NAYA BAZAR, DELHI 6. SHE HAD RE CEIVED RS. 2 LAC FROM SAID FIRM BY CHEQUE NO. 295461 DATED 27.2.2002 DRAWN ON JAI LAXMI COOP. BANK LTD. , FATEH PURI, DELHI AND OUT OF THE SAID AMOUNT SHE HAD GIVEN A GIFT TO RS. 2 LAC TO THE ASSESSEE VIDE CHEQUE NO. 149804 DATED 28.2.2002 DRAWN ON JAI LAXMI COOP. BANK . THIS AMOUNT HAS BEEN CREDITED IN THE BANK OF THE ASSESSEE WITH INDIAN OVERSEAS BANK, PUNJABI BAGH, DELHI. HE SUBMITTED FU RTHER THAT REPLY EXPLAINING THE CLAIMS WERE ALSO FILED BEFORE THE AUTHORITIES B ELOW. BEFORE THE AO REPLIES DATED 9.9.2009, 8.10.2009 WERE FILED, WHEREAS BEFOR E THE LD. CIT(A) WRITTEN SUBMISSIONS WERE ALSO FILED EXPLAINING THE GENUINEN ESS OF THE CLAIM. THE COPIES OF THESE REPLIES HAD BEEN MADE AVAILABLE AT PAGE NO . 8 TO 24 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE LD. AR SUBMITT ED FURTHER THAT THE DONOR SMT. SARASWATI DEVI IS ASSESSED TO TAX. UNDER THESE CIRC UMSTANCES THE AO WITHOUT EXAMINING THE AUTHENTICITY OF THE DOCUMENTS FILED B Y THE ASSESSEE BEFORE HIM HAS WRONGLY MADE ADDITION OF RS. 4 LACS U/S 68 OF T HE ACT MERELY ON THE SURMISES ITA NO. 2235/DEL/2013 5 THAT THE CLAIMED LOAN AND GIFT ARE ACCOMMODATION EN TRIES. IN SUPPORT HE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- NATHU RAM PREM CHAND. V. CIT. 49 ITR 561 CIT VS. ORISSA CORPORATION PVT. LTD. 159 ITR 78 (SC ) SMT. JASWINDER KAUR VS. ITO (SUPRA) SMT. NEERAJ GOYAL VS. ITO (SUPRA) 6. IN OPPOSITION TO THE ABOVE SUBMISSION OF THE LD. AR IN SUPPORT OF GROUND NO. 1, THE LD. SR. DR SUBMITTED THAT THERE WERE SUF FICIENT INFORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT THAT THE ASSES SEE HAD PROCURED ACCOMMODATION ENTRIES OF RS. 2 LAC FROM M/S. SARASW ATI DEVI AND A SIMILAR AMOUNT FROM M/S. SITA DEVI HENCE THERE WAS REASON T O BELIEVE ON THE PART OF THE AO TO DRAW AN INFERENCE THAT THE SAID AMOUNT OF RS. 4 LAC HAD ESCAPED ASSESSMENT. THE AO WAS THUS JUSTIFIED IN INITIATING REOPENING PROCEEDINGS BASED ON THOSE INFORMATION WHICH IS MATERIAL TO BE RELIED UPON. 7. CONSIDERING THE ABOVE SUBMISSION SPECIALLY T HE UNDISPUTED FACT THAT REASONS RECORDED, A COPY THEREOF HAS BEEN MADE AVAI LABLE AT PAGE NO. 1 & 2 OF THE PAPER BOOK, WAS BASED ON THE INFORMATION RECEIV ED FROM INVESTIGATION WING OF THE DEPARTMENT THAT THE ASSESSEE HAD RECEIVED RS . 2 LAC FROM MRS. SARASWATI DEVI RS. 2 LAC FROM MRS. SITA DEVI, WERE ACCOMMODA TION ENTRIES IS NOT SUPPORTED BY ANY TANGIBLE MATERIAL OR ANY STATEMENT OR ANY AN NEXURE, WE ARE OF THE VIEW THAT THE INITIATION OF REOPENING PROCEEDINGS AS PER THE RATIO LAID DOWN IN THE ITA NO. 2235/DEL/2013 6 ABOVE CITED DECISIONS OF HONBLE DELHI WAS NOT JUST IFIED. THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. VIJAY GUPTA (SUPRA) AND SIGNATURE HOTELS PVT .LTD. VS ITO AND ANOTHER, (SUP RA) HAS BEEN PLEASED TO HOLD THAT INFORMATION OF THE INVESTIGATION WING OF THE D EPARTMENT IN ABSENCE OF SUPPORT OF ANY TANGIBLE MATERIAL OR STATEMENT OR AN NEXURE CANNOT BE A VALID REASON FOR THE AO TO INITIATE REOPENING PROCEEDINGS U/S 148 OF THE ACT. THE AO IN THE PRESENT CASE HAS INITIATED THE REOPENING PROCEE DINGS SOLELY BASED UPON THE INFORMATION RECEIVED FROM DIT (INVESTIGATION) THAT THE ASSESSEE HAS TAKEN AN ENTRY OF RS. 2 LAC FROM MRS. SARASWATI DEVI THROUGH A CHEQUE DATED 4.3.2002 DRAWN ON JAI LUXMI CO-OPERATIVE BANK LTD. DELHI 1 10 006 AND RS. 2,00,00/- FROM MRS. SITA DEVI THROUGH A CHEQUE DATED 7.2.2002 DRAWN ON JAI LUXMI CO- OPERATIVE BANK LTD., FATEHPURI DELHI 110 006 AFTER PAYING CASH OF RS. 4,08,000/- (INCLUDING COMMISSION OF RS. 8000/-) AND THE SAID C HEQUES WERE FOUND CREDITED IN HER BANK ACCOUNT WITH INDIAN OVERSEAS BANK, PUNJ ABI BAGH. THE AO DID NOT BOTHER HIMSELF TO INQUIRE THIS INFORMATION TO FORM A BELIEF THAT SOME TAXABLE INCOME HAS ESCAPED ASSESSMENT TO JUSTIFY THE INITIA TION OF REOPENING PROCEEDINGS U/S 148 OF THE ACT. WE THUS RESPECTFULLY FOLLOWING THE ABOVE CITED DECISIONS OF THE HONBLE DELHI HIGH COURT HOLD THAT THE ACTION OF THE AO IN INITIATION OF REOPENING PROCEEDINGS BASED ON THE ABOVE STATED REA SONS RECORDED MERELY RELYING ON THE INFORMATION RECEIVED FROM THE INVEST IGATION WING OF THE DEPARTMENT WAS NOT JUSTIFIED, HENCE IT IS HELD AS I NVALID AND IN CONSEQUENCE THE ITA NO. 2235/DEL/2013 7 ASSESSMENT MADE IN FURTHERANCE TO THE NOTICE ISSUED U/S 148 OF THE ACT IS ALSO HELD VOID AB INITIO. THE GROUND NO. 1 IS ACCORDINGL Y ALLOWED. 8. ON THE MERITS OF THE ADDITIONS QUESTIONED IN GROUND NO. 2 & 3 LD. DR HAS TRIED TO JUSTIFY ORDERS OF THE AUTHORITIES BELOW. W E HOWEVER FIND THAT THESE GROUNDS HAVE BECOME INFRUCTUOUS IN VIEW OF OUR DECI SION ON THE ISSUE RAISED IN GROUND NO. 1 HEREINABOVE WHEREBY THE VALIDITY OF NO TICE ISSUED U/S 148 OF THE ACT AND ASSESSMENT MADE IN FURTHERANCE TO HAS BEEN HELD VOID. THESE GROUNDS ARE DISPOSED OFF ACCORDINGLY. 9. IN THE RESULT APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2013. SD/- SD/- (D.K. SRIVASTAVA) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 29 TH NOVEMBER, 2013 VEENA COPY OF ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES