Shri Ajay Kumar, New Delhi V. ITO, New Delhi

ITA 2242/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3611 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C RAI SH T VASANTHAN
• Assessee Lawyers: COPIES OF BANK
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 2242/DEL/2017 ASSESSMENT YEAR: 2008-09 AJAY KUMAR H. NO. 361 VPO-BIJWASAN NEW DELHI PAN : AOVPK0827L VS. ITO WARD-65(1) NEW DELHI (APPELLANT) (RESPONDENT) O R D E R PER DIVA SINGH, J.M. : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 31.01.2017 OF CIT(A) -32 KARNAL PERTAIN ING TO 2008-09 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS IN THE LAW THE LD. COMMISSIONER OF INCOME TAX APPEALS GROSSLY ERRED IN UPHOLDING THE ADDITIONS OF RS. 13,16,950/- U/S 68 OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN THE LAW THE LD. COMMISSIONER OF INCOME TAX APPEALS GROSSLY ERRED IN SUSTAINING THE DISALLOWANCE OF DEDUCTION OF RS. 1,42,357/- AS INTEREST PAID ON REP AYMENT OF HOUSING LOAN U/S 24(B) OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN THE LAW THE LD. COMMISSIONER OF INCOME TAX APPEALS GROSSLY ERRED IN UPHOLDING THE ADDITION OF RS. 143/- AS INTEREST ON SAVINGS BANK ACCOUNT IN THE RETURNED INCOME OF THE APPELLANT. 4. THE APPELLANT CRAVE LEAVE TO ADD/DELETE/ALTER OR M ODIFY ANY OR ALL GROUNDS OF APPEAL. 2. THE LEARNED AR INVITING ATTENTION TO THE RECORD SUBMITTED THAT NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE IN VIEW OF T HE FACT THAT AN AMOUNT OF RS. 13,16,950/- ODD WAS FOUND DEPOSITED IN HIS SAVING B ANK ACCOUNT NO. 022501002509 WITH ICICI BANK. INVITING ATTENTION TO PARA 3 OF TH E ASSESSMENT ORDER, IT WAS SUBMITTED, THAT IT HAD BEEN CLAIMED THAT THE AMOUNT WAS CONTRI BUTION FROM HIS VARIOUS FAMILY MEMBERS CONSISTING OF THEIR ACCUMULATED SAVINGS AND WITHDRAWALS FROM THEIR RESPECTIVE BANKS ETC. IN SUPPORT OF THE SAID CLAIM CONFIRMATIO NS, ITRS AND COPIES OF BANK APPELLANT BY SH. R.C. RAI, ADVOCATE RESPONDENT BY SH. T. VASANTHAN, SR. D.R. DATE OF HEARING 22-08-2017 DATE OF PRONOUNCEMENT 0500500500 17.11.2017 2 ITA NO.2242 /DEL/2017 STATEMENTS OF THE FAMILY MEMBERS WERE PLACED ON REC ORD. THE ASSESSING OFFICER DISCARDED THE SAME AND MADE THE ADDITIONS HOLDING T HAT THE CREDITWORTHINESS OF THE PARTIES WAS NOT PROVED FROM THE ITRS FILED. IT WAS HIS SUBMISSION REFERRING TO PARA 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE LIVED IN A J OINT FAMILY ALONGWITH HIS BROTHERS, FATHER AND THESE ARGUMENTS HAVE BEEN REPRODUCED IN THE ORDER ITSELF. DUE TO THE MEDICAL PROBLEMS OF THE ASSESSEE WHERE REPAIR OF THE HOUSE ALSO BECOME AN URGENCY, THE FAMILY MEMBERS ARRANGED LOANS RANGING FROM RS. 1 LAKH TO R S. 2 LAKH DIRECTLY DEPOSITED IN HIS BANK ACCOUNT FUNDS FROM THEIR SAVINGS/EARNING ETC. ONLY THE AMOUNT ADVANCED BY HIS REAL SISTER WAS AN AMOUNT OF RS. 5,00,000/- WHICH T OO HAD BEEN RETURNED BACK THROUGH THE BANKING CHANNELS. THE DEPOSITS FROM THE FAMILY PERSONS NOTED IN PARA 5 OF THE ASSESSMENT ORDER ITSELF ARE FROM THE FOLLOWING : I. SH. GYAN CHAND BHARDWAJ (FATHER) - RS. 1,00,000/ - II. SH. AJAY KUMAR (WIFE) - RS. 1,53,500/- III. SMT. DIMPLE (WIFE) - RS. 1,46,300/- IV. SH. ARUN KUMAR (BROTHER) - RS. 2,00,000/- V. SMT. KAMAL KANTI (SISTER) - RS. 5,00,000/- VI. SMT. SAROJINI (BHABHI) - RS. 2,16,950/- 2.1. MERELY BECAUSE THE FAMILY MEMBERS OF THE ASSES SEE DID NOT HAVE TAXABLE INCOME, SAVING FROM WORKING AT EITHER IN PRIVATE EM PLOYMENT OR AS ADHOC GOVERNMENT OUT SOURCED EMPLOYEES OR SELF EMPLOYED, PRESUMPTION HAS BEEN DRAWN THAT THEY CANNOT MAKE SAVINGS. 3. THE LEARNED SR. DR RELYING UPON THE ORDERS OF TH E TAX AUTHORITIES SUBMITTED THAT NO DOUBT THE ASSESSEE HAS BEEN CLAIMING THAT ON ACC OUNT OF A FINANCIAL CRISIS IN THE CASE OF THE ASSESSEE WHO HAD HEALTH PROBLEMS THE FAMILY MEMBERS HAVE CONTRIBUTED AND THEY HAVE ALSO ACCEPTED THIS FACT BUT THE ASSESSEE HAS F AILED TO DEMONSTRATE THE SPECIFIC BANK ACCOUNT WHERE FROM THE MONEY HAS BEEN ADVANCED OR T HE SAVINGS AND FLOW OF MONEY TO THE ASSESSEE. 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. I FIND THAT IN THE FACTS OF THE PRESENT CASE, I AM UNABLE TO CONCUR WITH THE REASONING AND THE FINDING OF THE CIT(A). THE REASONS FOR THE SAME ARE SET OUT HEREIN AFTER. A PERUSAL OF THE RECORD SHOWS THAT IT IS AN ADMITTED FACT, THAT THE SPECIFIC FUNDS HAVE BEEN ADVANCED TO THE ASSESSEE BY CLOSE FAMILY MEMBERS LIKE HIS FATHE R WHO IS STATED TO BE A RETIRED GOVERNMENT EMPLOYEE; BY HIS WIFE WHO IS STATED TO B E ENGAGED IN PERFORMING ODD JOBS; BY HIS BROTHER SH. ARUN KUMAR AND HIS SISTER-IN-LAW SMT. SAROJINI. THE PERSONS ARE STATED TO BE SELF-EMPLOYED AND ONLY SMT., KAMAL KAN TI I.E. THE SISTER OF THE ASSESSEE WHO HAS ADVANCED A MAJOR SUM OF RS. 5 LAKH IS STATE D TO BE AN AD HOC GOVERNMENT EMPLOYEE AND EVEN SHE IS STATED TO HAVE BEEN EARNIN G A SALARY WHICH IS NOT TAXABLE. THE ADMITTED FACT ON RECORD IS THAT THESE PERSONS HAVE FILED THEIR CONFIRMATIONS AFFIRMING THAT THEY HAVE ADVANCED THE SPECIFIED FUNDS FROM TH EIR SAVINGS AND HAVE ALSO SUPPORTED 3 ITA NO.2242 /DEL/2017 THE SAID CLAIM BY WAY OF FILING OF AFFIDAVITS. IT I S SEEN THAT THE TAX AUTHORITIES HAVE NOT CARED TO DISCUSS THE CONTENTS OF THE AFFIDAVITS LET ALONE REBUT THE SAME. IT IS NOT A CASE THAT ASTRONOMICALLY HUGE SUMS HAVE BEEN ADVANCED FR OM THEIR SAVINGS TO THE ASSESSEE. THE ADVANCES OF RS. 1 TO 2 LAKHS CANNOT BE CONSIDER ED TO BE IMPOSSIBLE AMOUNT CONSIDERING THE STRATA TO WHICH THE FAMILY BELONGS. THE FAMILY MEMBERS HAVE CONSISTENTLY SUPPORTED THE CLAIM OF THE ASSESSEE TH AT THE FUNDS WERE ADVANCED IN ORDER TO MEET THE URGENT FINANCIAL REQUIREMENTS OF REPAIRS T O THE HOUSE IN WHICH THE ASSESSEE ALONGWITH HIS FAMILY CONSISTING OF THESE VERY FAMIL Y MEMBERS EXCEPT THE MARRIED SISTER ALL STAYED AT THE SAME PREMISES AS PER RECORD. DURI NG THIS PERIOD WHEN THE FUNDS WERE REQUIRED FOR REPAIR IT HAS BEEN CONSISTENTLY CLAIME D THAT THE ASSESSEE WAS HAVING HEART PROBLEMS AND HAD ALSO UNDERGONE ANGIOPLASTY. IN FAC T IN THE CASE OF THE 5 LACS ADVANCED BY THE SISTER, IT HAS BEEN STATED THAT IT WAS SPECI FICALLY FOR A SURGERY WHICH ULTIMATELY WAS NOT NECESSARY AND ON ACCOUNT OF THIS FACT THE FUNDS WERE PAID BACK TO THE SISTER BY USING THE BANKING CHANNELS. THE EVIDENCE REMAINS UN -REBUTTED ON RECORD. THE INSISTENCE OF THE TAX AUTHORITIES TO DEMONSTRATE THE FLOW OF M ONEY FROM THE BANKING CHANNELS TO THE ASSESSEE OF THESE SMALL MEAGRE AMOUNTS IN THE C IRCUMSTANCES IS CASTING AN UNNECESSARY BURDEN ON THE ASSESSEE. IT IS NOT A SIN TO BE BELOW THE TAXABLE LIMITS. THE EFFORTS OF THE MARGINALIZED SECTIONS TO BETTER THEI R LIFESTYLE SHOULD BE APPLAUDED AND THEIR TRANSITION FROM BELOW TAXABLE LIMIT TO BECOMI NG POTENTIAL TAX PAYERS SHOULD BE ENCOURAGED AND WATCHED OUT FOR EVENT FOR THE ECONOM Y. THE PROCESS AND TRANSITION SHOULD NOT BE MADE PAINFUL. IT CANNOT BE OVER EMPH ASIZED THAT THE ADJUDICATING AUTHORITY NECESSARILY NEEDS TO ALWAYS BEAR IN MIND THE FACTS AND REALITIES OF THE POPULATION WHICH COMES BEFORE IT. SIMPLY BECAUSE TH E TAX PAYER BELONGS TO THE STRATA WHO HAS NEVER HAD TAXABLE INCOME AND ALL HIS FAMILY MEMBERS ALSO FALL IN THE SAME STRATA ON THIS GROUND ALONE THE CLAIM CANNOT BE THR OWN OUT. THE CLAIM BEING THAT THESE SPECIFIC FAMILY MEMBERS HAD SAVINGS OF THE STATED A MOUNT WHICH WERE ADVANCED TO THE ASSESSEE IN HIS TIME OF FINANCIAL AND MEDICAL EMERG ENCY. THE PRESUMPTION THAT ONLY A TAXPAYER CAN SAVE AND NON-TAX PAYING CITIZENS CANNO T BE PRESUMED TO SAVE IS A PRESUMPTION BASED ON NO DATA AND HAS TO BE CONSIGNE D AS BEING A CONJECTURE . SUSPICIONS AND SURMISES HOWEVER STRONG CANNOT TAKE THE PLACE OF FACTS AND EVIDENCES. IN THE CASE AT HAND CONFIRMATIONS AND AFFIDAVITS ARE C ONSISTENTLY IN SUPPORT OF THE CLAIM. THE STANDARDS OF PROOF WHICH WOULD HAVE BEEN ORDINA RILY APPLIED TO THE TAXPAYERS WHO WORK IN THE ORGANIZED SECTOR CANNOT BE INSISTED UPO N IN THE FACTS OF THE PRESENT CASE. MARGIN HAS TO BE KEPT IN MIND ABOUT THE HANDICAP WI TH WHICH A FINANCIALLY LITERATE PERSON LIVES. DUE TO LACK OF ADEQUATE AND APPROPRIA TE ADVICE, THE FINANCIALLY ILLITERATE PERSON SUFFERS FROM THE HANDICAP OF NOT EVEN KNOWIN G THAT SUPPORTING FACTS AND UNIMPEACHABLE EVIDENCE COULD HAVE BEEN RETAINED FRO M THE RAW DATA OF EVERYDAY ECONOMIC ACTIVITY CARRIED OUT BY HIM AND HIS FAMILY MEMBERS. 4 ITA NO.2242 /DEL/2017 5 . CONSIDERING THE SPECIFIC SOCIO ECONOMIC STRATA WHER EFROM THE FAMILY MEMBERS OF THE ASSESSEE COME FROM AND CONSIDERING T HE AMOUNTS ADVANCED, I AM OF THE VIEW THAT IN THESE PECULIAR FACTS AND CIRCUMSTA NCES, THE INSISTENCE OF THE TAX AUTHORITIES TO INSIST UPON ADHERING TO THE STRICT P ROOF OF EVIDENCES WHICH A TAX PAYER EMPLOYED IN ORGANIZED SECTOR CAN DEMONSTRATE WOULD NOT SERVE THE ENDS OF JUSTICE. THE STANDARDS OF PROOF AND EVIDENCE WHICH ARE ORDIN ARILY APPLIED TO THE TAX PAYERS WHO COME FROM A RELATIVELY COMFORTABLE SOCIO ECONOM IC ORGANIZED STRATA WOULD BE AN UNFAIR AND IMPRACTICAL INSISTENCE IN THE PECULIA R FACTS OF THE PRESENT CASE. THE GRASSROOT REALITY OF EXISTENTIAL REALITY CANNOT BE IGNORED AND IF IT IS IGNORED IT IS IGNORED AT ITS PERIL NAMELY THAT THE VAST POPULATION IN NOT HAVING ANCESTRAL WEALTH TO LOOK FORWARD NECESSARILY EITHER SURVIVES ON ITS OWN EFFO RTS OR ON EFFORTS AND ENDEAVOURS OF THE STATE. IN ORDER TO ENSURE THAT MORE AND MORE P OPULATION LIVES A MEANINGFUL LIFE BY CREATING ITS OWN MEANS OF LIVELIHOOD AND LEADS ON T O CREATION OF ITS WEALTH, THE RELIANCE ON THE CRUTCHES PROVIDED BY THE STATE IN THE INTERE STS OF THE STATE ITSELF SHOULD BE ENCOURAGED AND FACILITATED. THE REALITY OF THE LOW EST SOCIO-ECONOMIC STRATA IS THAT EACH FAMILY MEMBER IRRESPECTIVE OF HIS/HER AGE, HEALTH, GENDER OR EDUCATION PERFORCE ENDEAVOURS TO BE A FINANCIALLY AND VIABLE CONTRIBUT ING MEMBER BY CARRYING OUT SMALL, FULL OR PART-TIME ACTIVITY OR PROCURING/CREATING SM ALL JOBS AT TIMES AT THE COST OF THE FORMAL EDUCATION OF THE YOUNG CHILDREN. LOOKING AT THE AMOUNTS INVOLVED IN THE HANDS OF THE 5 MEMBERS EXCEPT THE SISTER WHO IS CLAIMED T O BE WORKING IN SOME AD HOC LEVEL OF GOVERNMENT EMPLOYMENT BUT STILL NOT HAVING TAXABLE INCOME I AM OF THE VIEW THAT THE FAMILY MEMBERS IN THE FACTS OF THE PRESENT CASE HAV E SUCCESSFULLY DEMONSTRATED THAT THEY HAD ADVANCED THEIR SAVING TO THE ASSESSEE WHO ADMITTEDLY HAS UTILISED THE FUNDS FOR REPAIR ETC AND THE FUNDS HAVE BEEN ADVANCED DURING THE TIME THAT THE ASSESSEE PERCEIVED TO BE HAVING LIFE-THREATENING HEALTH PROBLEMS THE C LAIM DESERVES TO BE ALLOWED. AT THE COST OF REPETITION IN THE CASE OF THE SISTER IT IS A FACT THAT THE AMOUNT HAS ALSO BEEN RETURNED BACK AGAIN BY USING BANKING CHANNELS. IN T HESE PECULIAR FACTS AND CIRCUMSTANCES I FIND THAT THE ADDITION HAS WRONGLY BEEN MADE AND SUSTAINED IN THE HANDS OF THE ASSESSEE WHILE SO HOLDING IT IS DEEMED APPRO PRIATE TO RECORD THAT THE SAID ORDER SHALL NOT BE A PRECEDENT IN THE CASE OF THE ASSESSE E IN FUTURE AS THE CONCLUSIONS AND FINDINGS HAVE BEEN ARRIVED AT ON THE BASIS OF PECUL IAR FACTS WHEREIN IT IS A ONE-TIME EVENT IN THE HANDS OF THE ASSESSEE AND CONSIDERING THE SM ALLNESS OF THE AMOUNTS INVOLVED. 6. REGARDING THE SECOND ADDITIONS MADE BY THE ASSES SING OFFICER WHEREIN THE AO HAS DISALLOWED THE CLAIM OF INTEREST OF RS. 1,43,35 7/- SUPPORTED BY FORM NO. 16 HAS PAYMENT FOR AVAILING HOUSING LOAN FROM ICICI BANK S UPPORTED BY THE CERTIFICATE ONLY ON THE GROUNDS THAT SALE DEED WAS EXECUTED IN FAVOUR O F THE ASSESSEES WIFE SMT. DIMPLE WHO WAS EARNING MONEY THROUGH ODD JOBS AFFIRMED BY HER. IN THESE PECULIAR FACTS, I FIND 5 ITA NO.2242 /DEL/2017 THAT THE INTEREST PAID ON HOUSING LOAN COULD NOT HA VE BEEN DISALLOWED. ACCORDINGLY THE SAID ADDITION IS DIRECTED TO BE DELETED. THE LEARNE D AR AT THE TIME OF HEARING ARGUED ONLY GROUND NOS. 1AND 2 WHICH ACCORDINGLY STAND ALL OWED. THE SAID ORDER IS PRONOUNCED AT THE TIME OF HEARING ITSELF . 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH NOVEMBER2017. SD/- (DIVA SINGH) JUDICIAL MEMBER HRA) FIT FOR PUBLICATION (DIVA SINGH) JUDICIAL MEMBER