The Income Tax Officer, Bathinda V. Sh. Narinder Pal Bansal, Bathinda

ITA 240/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7864 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 28-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER I.T.A NO. 240/(ASR)/2016 ASSESSMENT YEAR: 2012-13 PAN: AGFPB5284Q INCOME TAX OFFICER WARD- 2(1), BHATINDA. VS. SH. NARINDER PAL BANSAL S/O BABU RAM, BHUCHO MANDI, BHATINDA. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAHUL DHAWAN (D. R.) RESPONDENT BY: SH. P. N. ARORA (ADV.) DATE OF HEARING: 07.08.2017 DATE OF PRONOUNCEMENT: 25.08.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORDE R OF LD. CIT(A), BHATINDA DATED 25.02.2016 FOR ASST. YEAR: 2012-13. 2. THE GROUNDS OF APPEAL TAKEN BY REVENUE ARE REPRO DUCED BELOW: 1. THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADD ITION OF RS. 73,09,609/- MADE BY THE AO ON ACCOUNTS OF UNEXPLAIN ED CAPITAL INTRODUCED DURING THE YEAR TO RS. 6,33,280/ - BY RELYING UPON THE RESTRUCTURED ACCOUNTS FROM THE FIN ANCIAL YEARS 2007-08 TO 2011-12,6760 THOUGH SUCH ACCOUNTS NEVER FORMED PART OF ITRS FILED BY THE ASSESSEE FOR SUCH YEARS. 2. THE LD. CIT(A) HAS ERRED IN ACCEPTING THE CLOSIN G CAPITAL BALANCE OF RS. 61,13,593/- AS ON 31.03.2008 CLAIMED BY THE ASSESSEE ON THE BASIS OF RECONSTRUCTED ACCOUNTS, IG NORING THAT NO SUCH CAPITAL BALANCE WAS SHOWN BY THE ASSES SEE IN THE RETURN OF INCOME AND THE FIGURE OF CAPITAL BALA NCE HAS ITA NO. 240(ASR)/2016 ASSESSMENT YEAR: 2012-13 2 BEEN CREATED ONLY TO JUSTIFY THE UNEXPLAINED CAPITA L INTRODUCED DURING THE A.Y. 2012-13. 3. THE LD.CIT(A) HAS ERRED IN IGNORING THE FACT THA T RETURNED INCOME OF THE ASSESSEE FOR THE A.Y. 2008-09 WAS RS. 2.67.250/- AND WITH SUCH MEAGRE INCOME, THE ASSESSE E COULD NOT HAVE ACCUMULATED CAPITAL OF RS. 61,13,593 /- AS ON 31.03.200, EVEN AS NO LOAN HAS BEEN SHOWN AS PAYABL E. 4. THE LD. CIT(A) HAS ERRED IN INVOKING THE PROVISI ONS OF RULE(46A(4)J)F THE RULES AS THE SUB RULE (4) AUTHOR IZES THE LD. CIT(A) TO DIRECT THE PRODUCTION OF ADDITIONAL DOCUM ENTS TO ENABLE HIM TO DISPOSE OF THE APPEAL WHEREAS IN THIS CASE .ADDITIONAL DOCUMENTS/EVIDENCE HAVE BEEN PRODUCED B Y THE ASSESSEE AND HENCE,, SUB RULE (I), (2), AND (3) OF RULE 46A WERE APPLICABLE IN THIS CASE, THE CONDITIONS OF WHI CH THE ASSESSEE DID NOT FULFILL. 5. THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF TO T HE ASSESSEE ON THE BASIS OF REMAND REPORT OF THE AO BY CONSIDERING ONLY ONE PART OF THE REMAND REPORT AND TOTALLY IGNORING THE OBSERVATIONS OF THE ASSESSING OFFICER M THE REMAND REPORT THAT THE ADDITIONAL DOCUMENTARY EVIDENCE PRODUCED B Y THE ASSESSEE WERE NEVER SUBJECTED TO VERIFICATION AND W ERE LIABLE TO HE REJECTED. 6. THE LD. CIT(A) HAS ERRED IN ACCEPTING THE CAPITA L BALANCE OF THE ASSESSEE AS ON 31.03.2008 AT RS. 61,1 (,593/ ON THE BASIS OF RESTRUCTURED ACCOUNTS PRODUCED BY THE ASSE SSEE IN SUPPORT OF HIS CONTENTION THAT ALL VALUE OF ASSETS AND INVESTMENTS MADE BY HIM BEFORE THAT DATE HE HEATED AS CAPITAL OF THE ASSESSEE IGNORING THE FACT THAT SUCH ASSETS. INVEST INVESTMENTS AND CAPITAL NEVER FORMED PART OF RETURN FILED BY THE ASSESSEE AND AS SUCH, THE SOURCE OF CA PITAL AS ON 3 1.03.2008 COULD NOT BE TREATED AS EXPLAINED. 3. AT THE OUTSET, THE LD. DR SUBMITTED THAT LD. CI T(A) HAS PASSED UNDER U/R 46A(4) OF THE ACT FOR ENABLE HIMSELF TO D ISPOSE OFF APPEAL WHEREAS IN THIS CASE, THE ADDITIONAL EVIDENCES WERE FILED BY ASSESSEE AND THEREFORE SUB- RULE 1, 2 AND 3 OF RULE 46A WERE APP LICABLE AND FOR WHICH ASSESSEE WAS NOT ELIGIBLE. 4. AS REGARDS MERITS OF THE CASE, THE LD. DR SUBMI TTED THAT THE LD. CIT(A) HAS ACCEPTED THE OPENING BALANCE IN THE CAPI TAL ACCOUNT OF ITA NO. 240(ASR)/2016 ASSESSMENT YEAR: 2012-13 3 ASSESSEE BY RELYING ON THE RESTRUCTURED ACCOUNT WHE REAS THE ASSESSEE HAS BEEN FILING THE RETURNS ON NO ACCOUNT BASIS. TH E LD. DR FURTHER ARGUED THAT THE LD. CIT(A) HAS NOT FULLY TAKEN INTO ACCOUNT THE REMAND REPORT OF THE ASSESSING OFFICER AND HAS IGNORED HIS OBSERVATIONS THAT ASSESSEE HAD KEPT AWAY THE BALANCE SHEET AND CAPITA L IN HAND FROM THE SIGHT OF THE DEPARTMENT AND THESE WERE NEVER SUBJEC TED TO VERIFICATION. IN VIEW OF THE ABOVE HE ARGUED THAT THE ORDER OF LD. C IT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE UPHELD. 5. THE LD. AR ON THE OTHER HAND SUBMITTED THAT ASSE SSEE HAD BEEN CLAIMING BEFORE THE ASSESSING OFFICER THAT HE WAS F ILING RETURN FOR THE LAST 8 YEARS AND OVER A PERIOD OF 8 YEARS, HE HAD ACCUMU LATED THE CAPITAL. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD SHOWN OPENIN G CAPITAL AT RS.73,09,609 WHICH WAS ACCUMULATED OVER A PERIOD OF TIME AND THE SAME WAS VERIFIED BY ASSESSING OFFICER DURING REMAND PRO CEEDINGS AND THIS RESPECT OUR ATTENTION WAS INVITED TO THE CONTENTS O F THE REMAND REPORT WHICH THE LD. CIT(A) HAS REPRODUCED AT PAGE 5 OF HI S ORDER. 6. THE LD. AR SUBMITTED THAT OPENING CAPITAL BALANC E CONSISTED OF PROPERTIES, LOANS AND ADVANCES WHICH THE ASSESSING OFFICER HAD VERIFIED FROM THE COPY OF SALE DEED AS WELL AS FROM THE CONF IRMED COPY OF ACCOUNT OF LOANS AND ADVANCES. AS REGARDS THE NON VERIFICAT ION OF CASH IN HAND, THE LD. CIT(A) HAS ALREADY ALLOWED 50% OF THE CLAIM AND FURTHER LD. CIT(A) HAS NOT ALLOWED RELIEF FOR AN AMOUNT OF RS.5 ,00,000/- WHICH WAS CLAIMED TO HAVE BEEN INTRODUCED IN THE F.Y. 2010-11 . THEREFORE IT WAS ITA NO. 240(ASR)/2016 ASSESSMENT YEAR: 2012-13 4 ARGUED THAT LD. CIT(A) HAS PASSED A SPEAKING AND RE ASONED ORDER KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THE COMMENTS OF ASSESSING OFFICER IN REMAND RE PORT. HE SUBMITTED THAT WHERE THE ASSESSING OFFICER MADE NEGATIVE REMA RKS, THE LD. CIT(A) HAS NOT GIVEN ANY RELIEF. 7. AS REGARDS THE ARGUMENT OF LD. DR THAT LD. CIT(A ) HAD PASSED ORDER U/S 46A(4) FOR EXAMINATION THE VERACITY OF TH E DOCUMENTARY EVIDENCES, IT WAS SUBMITTED THAT LD. CIT(A)S POWER ARE CO TERMINUS WITH THE POWERS OF ASSESSING OFFICER AND HE AT HIS OWN C AN CALL ANY FURTHER DOCUMENTS WHICH HE CONSIDERS NECESSARY FOR ADJUDICA TION OF AN APPEAL. [[ 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THOUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT DURING ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER MADE AN ADDITION OF RS.73,09,609/ - WHICH THE ASSESSEE HAD CLAIMED AS OPENING CAPITAL OF THE ASSESSEE. THE LD. CIT(A) ON REMAND REPORT FROM THE ASSESSING OFFICER OBSERVED THAT THE OPENING BALANCE OF CAPITAL AS ON 31.03.2008 CONSISTED OF THE FOLLOWING ITEMS:- PROPERTIES RS.25,39,751/- CLOSING STOCK RS.54,200/- LOAN AND ADVANCES RS.31,96,628/ CASH IN HAND RS.2,66,560/- BANK ACCOUNTS RS.56,454/- TOTAL RS.61,13,525/- THE ASSESSING OFFICER DURING REMAND PROCEEDINGS HA D VERIFIED THE VALUE OF PROPERTY FROM THE SALE DEEDS WHICH HE HAS MENTIONED IN HIS ITA NO. 240(ASR)/2016 ASSESSMENT YEAR: 2012-13 5 REMAND REPORT. FURTHER AS REGARDS LOANS AND ADVANCE S THE ASSESSING OFFICER DURING REMAND PROCEEDINGS HAD VERIFIED THE SAME FROM THE CONFIRMED COPY OF ACCOUNTS TO WHOM THE ADVANCES WER E MADE. AS REGARDS CASH IN HAND OF RS.2,66,560/-, THE ASSE SSING OFFICER DID NOT FIND ANY DOCUMENTARY EVIDENCE EXCEPT CASH B OOK. THE LD. CIT(A) THEREFORE ACCEPTED THE FIGURES OF CAPITAL AS ON 31. 03.2008 WHICH WAS VERIFIED BY ASSESSING OFFICER HOWEVER, IN RESPECT O F CASH IN HAND, THE LD. CIT(A) ALLOWED RELIEF ONLY TO THE EXTENT RS. 50% OF SUCH CASH AS THE ASSESSING OFFICER HAD STATED THAT CASH WAS NOT VERI FIABLE. AFTER 31.03.2008, THE ASSESSEE HAS BEEN FILING REGULAR IN COME TAX RETURNS AND THE RESULTS DECLARED BY ASSESSEE DURING THESE YEARS HAS BEEN INCORPORATED IN THE ORDER OF LD. CIT(A) AT PAGE 6 O F HIS ORDER. 9. THE LD. CIT(A) HAS TAKEN A REASONED AND JUSTIFIA BLE VIEW AND HAD ACCEPTED THE OPENING BALANCE OF CAPITAL AFTER REJEC TING THE CLAIM TO THE EXTENT OF RS.6,33,280/- WHICH CONSISTED OF 50% OF C ASH IN HAND AND AN AMOUNT OF RS.5,00,000/- WHICH THE ASSESSEE HAD CLAI MED TO HAVE INTRODUCED DURING FINANCIAL YEAR 2010-11. WE FURTHE R FIND THAT IN REMAND REPORT THE ASSESSING OFFICER HAS FURTHER STA TED THAT EVEN IF IT IS ASSUMED THAT ASSESSEE HAD ACQUIRED THESE PROPERTIES OUT OF HIS UNDISCLOSED INCOME, THE DEPARTMENT CANNOT TAKE ACTI ON BEING OUT OF TIME LIMIT WHICH HAS BEEN PRESCRIBED UNDER THE INCOME TA X ACT. WE FURTHER FIND THAT THE ADDITION WAS MADE BY ASSESSING OFFICE R ON ACCOUNT OF OPENING BALANCE OF CAPITAL WHICH THE ASSESSEE HAD E ARNED DURING EARLIER YEARS AND FOR WHICH ADDITION WAS NOT WARRANTED DURI NG THE YEAR UNDER ITA NO. 240(ASR)/2016 ASSESSMENT YEAR: 2012-13 6 CONSIDERATION. THE ADDITION IF ANY WAS ONLY POSSIBL E IN THE EARLIER YEARS FOR WHICH ASSESSING OFFICER SHOULD HAVE REOPENED TH E EARLIER YEARS WHICH HE DID NOT DO DUE TO WHATEVER REASON. 10. AS REGARDS THE ARGUMENT OF LD. DR REGARDING THE ACTION OF LD. CIT(A) IN INVOKING THE PROVISIONS OF RULE 46A(4), W E FIND THAT RULE 46A(4) AUTHORIZES LD. CIT(A) TO DIRECT THE PRODUCTION OF A DDITIONAL DOCUMENT TO ENABLE HIM TO DISPOSE OFF THE APPEAL AND THE POWERS OF LD. CIT(A) ARE CO TERMINUS WITH THE POWERS OF ASSESSING OFFICER, THER EFORE, EVEN IF THE ASSESSEE HAD FILED ADDITIONAL EVIDENCES, THERE IS N O BAR ON THE PART OF LD. CIT(A) TO INVOKE THE PROVISIONS OF RULE 46A(4). AS REGARDS THE OBJECTION OF LD. DR THAT LD. CIT(A) HAD IGNORED THE PART OF REMAND OF REPORT WHEREIN THE ASSESSING OFFI CER HAD MENTIONED THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF CASH ENTRIES, WE FIND THAT LD. CIT(A) HAS NOT ACCEPTED THE CLAIM OF ASSES SEE WITH REGARD TO RS. 5,00,000/- AND HAD ALSO NOT ACDEPTED THE CLAIM OF C ASH TO THE EXTENT OF 50% AND IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCE S, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). 12. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE R EVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.08.2017 SD/- SD/- (N. K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25.08.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: ITA NO. 240(ASR)/2016 ASSESSMENT YEAR: 2012-13 7 (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER