ASHOK JAISWAL, MUMBAI V. ITO 26(2)(1), MUMBAI

ITA 2451/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8442 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 28-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SATENDRA PANDEY
• Keywords: Unexplained cash credit; Gift; Revised return
• Section: 143(3); 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND , SHRI RAJENDRA, ACCOUNTANT MEMBER I.TA. NO. 2451/MUM/2011 ASSESSMENT YEAR 2004-05 ASHOK JAISWAL, 202, SIDDHARTH CHS LTD., 13, NEW KHETWADI, OFF. 2 PERRY CROSS ROAD, BANDRA (WEST), MUMBAI 400 050. PAN: ACZPJ 0614 L VS. INCOME TAX OFFICER, RANGE 26(2)(1), MUMBAI. ( / APPELLANT ) ( ! / RESPONDENT ) ' / APPELLANT BY : SHRI K. GOPAL & SHRI SATENDRA PANDEY ! # ' /RESPONDENT BY : SHRI MANOJ KUMAR $ # %& / DATE OF HEARING : 09-10-2012 '() # %& / DATE OF PRONOUNCEMENT : 23-10-2012 * / O R D E R PER RAJENDRA, AM THE FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY TH E APPELLANT AGAINST THE ORDER DT. 15-02-2011 OF THE CIT(A)-28, MUMBAI: 1.THE CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.4,10,634/- BEING THE VARIOUS FIXED DEPOSITS AS THE INCOME OF THE APPELLA NT AS PER PARA 5 OF THE ASSESSMENT ORDER WITHOUT APPRECIATING THE FACTS AND CIRCUMSTAN CES OF THE CASE AND APPLICABLE LAWS. 2.THE CIT (A) HAS ERRED IN CONFIRMING RS.4,17,718/- (OUT OF ADDITION OF RS.5,54,366/-) AS UNEXPLAINED CREDIT U/S.68 BEING THE AMOUNT ON CR EDIT SIDE OF BANK ACCOUNTS OF MS. AAKANSHA JAISWAL MINOR DAUGHTER OF APPELLANT AS PER PARA 10 OF THE ASSESSMENT ORDER WITHOUT APPRECIATING THE FACTS AND CIRCUMSTAN CES OF THE CASE AND APPLICABLE LAWS. 3.(I)THE CIT (A) HAS ERRED IN ALLOWING ONLY RS.1,30 ,000/ OUT OF THE ADDITION OF AGRICULTURAL INCOME OF RS.1,81,853/- WITHOUT APPREC IATING FACTS AND CIRCUMSTANCES OF THE CASE AND APPLICABLE LAWS. I.TA. NO. 2451/MUM/2011 ASHOK JAISWAL 2 (II)THE CIT (A) HAS ERRED IN UPHOLDING RS.75,000/ B EING THE INCOME OF HUF AS THAT INCOME OF YOUR APPELLANT WITHOUT APPRECIATING FACTS AND CIRCUMSTANCES OF THE CASE AND APPLICABLE LAWS. 4.THE CIT (A) HAS ERRED IN NOT DISCUSSING AND THERE BY NOT ALLOWING VARIOUS DEDUCTIONS UNDER CHAPTER VIA OF THE ACT WITHOUT APP RECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AN APPLICABLE LAW. 5.THE APPELLANT RESERVES THE RIGHT TO ADD, TO ALTER , OR AMEND THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2. ASSESSEE, AN INDIVIDUAL, FILED HIS ORIGINAL RETURN OF INCOME ON 11-08-2004. LATER ON REVISED RETURN OF INCOME WAS FILED ON 01-1 2-2004 DECLARING TOTAL INCOME AT RS. 1,40,654/-.THE CASE WAS SELECTED FOR SCRUTINY U NDER CASS AND THE ASSESSMENT WAS FINALISED U/S. 143(3) OF THE INCOME-TAX ACT, 1961(A CT) BY THE ASSESSING OFFICER (AO) ON 04-12-2006 DETERMINING TOTAL INCOME AT RS. 20.99 LAKHS. DURING THE ASSESSMENT PROCEEDINGS, VARIOUS ADDITIONS/DISALLOWANCE WERE MA DE BY THE AO WHICH WERE CONTESTED BEFORE THE FIRST APPELLATE AUTHORITY (FAA ) BY THE ASSESSEE. IN THE APPELLATE PROCEEDINGS, ADDITIONS MADE BY THE AO WERE PARTLY U PHELD BY THE FAA. 3. FIRST GROUND OF APPEAL IS ABOUT THE ADDITION MADE/ UPHELD BY THE AO/FAA AMOUNTING TO RS.4.10LAKHS WITH REGARD TO THE MATURI TY AMOUNT OF VARIOUS FIXED DEPOSITS. DURING THE ASSESSMENT PROCEEDINGS, AO FO UND THAT ASSESSEE HAD SHOWN FIXED DEPOSIT RECEIPTS OF BANK OF MAHARASHTRA (DTD. 19-01-2004 FOR RS. 85,678/-), ADCC BANK (A/C NO. 5176 ON 16-10-2003 OF RS. 1,63, 233/-) AND STATE BANK OF INDIA (A/C NO.27662 OF RS. 1,61,723/-) TOTALING TO RS. 4, 10,634/- IN THE AY UNDER CONSIDERATION. HE HELD THAT THE ASSESSEE WAS NOT I N A POSITION TO MAKE FIXED DEPOSITS OF SUCH HUGE SUMS, THAT THE PROOF OF MAKING INVESTM ENTS IN FIXED DEPOSITS WERE NOT PRODUCED TO SUSTAIN HIS CLAIM. HE TREATED THE SAID AMOUNT AS CASH CREDIT U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE U NDER THE HEAD INCOME FROM OTHER SOURCES. IN THE APPELLATE PROCEEDINGS, AFTER CONS IDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE AO, FAA HELD THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE OF MAKING INVESTMENTS IN THE FIXED DEPOSITS AND SOURCES THEREOF IN SUPPORT OF HIS CLAIM, THAT THE AOS ACTI ON IN TREATING THE SAID AMOUNT AS CASH CREDIT HAD TO BE CONFIRMED. HE DISMISSED THE G ROUND OF APPEAL FILED BY THE ASSESSEE. 3.1. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT NO INVESTMENT WAS MADE IN FIXED DEPOSITS DURING THE YEAR UNDER CONSID ERATION, THAT INVESTMENT OF FIXED DEPOSITS WERE MADE IN EARLIER YEARS, THAT ASSESSEE HAD SUBMITTED BANK STATEMENT AND THE LEDGER COPY OF THE BANK ACCOUNTS, THAT INTEREST AMOUNT RECEIVED DURING THE YEAR WAS OFFERED FOR TAXATION, THAT IT WAS NOT THE CASE OF THE AO THAT THE AMOUNT REPRESENTED OTHER THAN THE FIXED DEPOSITS. AR REFER RED TO PG NOS. 74, 80, 81 -85 AND 86 OF PAPER BOOK. DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDERS OF THE AO AND FAA AND STATED THAT EVIDENCE ABOUT THE FIXED DEPOSITS WERE NOT PRODUCED DURING THE ASSESSMENT/APPELLATE PROCEEDINGS. 3.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. FROM THE DETA ILS AVAILABLE ON RECORD, IT IS FOUND THAT ASSESSEE HAD NOT MADE ANY INVESTMENT IN THE FIXED DEPOSIT RECEIPTS DURING THE RELEVANT ASSESSMENT YEAR(AY). SECONDLY, INTEREST EARNED DURING THE AY UNDER CONSIDERATION BY THE ASSESSEE HAD BEEN OFFERE D FOR TAXATION. IT IS FOUND THAT I.TA. NO. 2451/MUM/2011 ASHOK JAISWAL 3 INVESTMENT IN THE FDR OF BANK OF MAHARASHTRA WAS INITIALLY MADE IN 1997 AND ON MATURITY IT WAS RE-INVESTED IN 1999, 2002 AND 2004. AS THE INVESTMENT IN THE FIXED DEPOSIT OF BANK OF MAHARASHTRA WAS NOT MADE IN THE AY 2004-05 RATHER THAT THE INITIAL INVESTMENT WAS MADE IN 1997, WE ARE OF THE OPINION THAT NO ADDITION CAN BE MADE ON THIS ACCOUNT IN THE AY UNDER CONSIDERATION. IN THE CASE OF FDR OF ADCC, IT FOUND THAT INVESTMENT IN FDS WAS MADE IN OCTOBER 20 00 FOR THE FIRST TIME. THE FD MATURED IN OCTOBER 2003 AND INFORMATION WITH REGARD TO THE SAID FD WAS SUBMITTED TO THE AO. SIMILARLY, IN THE CASE OF FDR OF STATE BAN K OF INDIA, THE ORIGINAL INVESTMENT WAS MADE IN MAY 2000 AND THE FD MATURED IN JUNE 200 3.AS HELD EARLIER, ADDITION CANNOT BE MADE TO THE TOTAL INCOME OF THE ASSESSEE; FOR THE INVESTMENT MADE BY HIM IN THE EARLIER YEARS; WHILE DETERMINING INCOME OF THE AY UNDER CONSIDERATION. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT ADDITION MADE BY THE AO AND UPHELD BY THE FAA DESERVES TO BE DELETED. GROUND NO. 1 IS DECIDED IN FAVOUR OF THE ASSESSEE. 4. GROUND NO.2 IS RELATED TO ADDITION OF RS. 4.17 LAKH S MADE BY THE AO ON ACCOUNT OF AMOUNT APPEARING ON THE CREDIT SIDE OF T HE BANK A/CS. OF MINOR DAUGHTER, AAKANSHA JAISWAL, OF THE ASSESSEE. DURING THE ASSE SSMENT PROCEEDINGS, AO NOTED THAT BANK A/CS. OF HIS DAUGHTER SHOWED HUGE DEPOSITS MAD E BY THE ASSESSEE, IN THE SAID ACCOUNTS FOR THE PERIOD 10-04-2003 TO 31-03-2004. AO HELD THAT SOURCES OF SUCH DEPOSITS WERE NOT KNOWN. HE TREATED THE A SAID DEP OSITS AMOUNTING TO RS. 5,54,366/- UN-EXPLAINED CASH CREDIT U/S. 68 OF THE ACT. FAA A FTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE REMAND REPORT OF THE AO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. HE HELD THAT OUT OF THE ADDITION AMOUNTI NG TO RS. 5.54 LAKHS MADE BY THE AO U/S. 68 OF THE ACT ADDITION OF RS. 4.17 LAKHS WA S TO BE UPHELD. HE HELD THAT FOR THE BALANCE AMOUNT, EXPLANATION OFFERED BY THE ASSE SSEE WAS SATISFACTORY. 4.1. BEFORE US, AR SUBMITTED THAT EVIDENCES ABOUT BALANC E SUMS WERE SUBMITTED TO THE AO DURING ASSESSMENT PROCEEDINGS, THAT INCOME O F THE MINOR DAUGHTER WAS CLUBBED IN THE HANDS OF THE ASSESSEE, THAT OUT OF T HE ADDITION OF RS. 4.17 LAKHS UPHELD BY THE FAA TO RS.2.75 LAKHS WERE RECEIVED BACK BY T HE DAUGHTER OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION, THAT SOURCE OF THE SAID A MOUNT WAS IN EARLIER AYS. HE ALSO REFERRED TO PG. 68, 72 74 OF THE PAPER BOOK IN TH IS REGARD. DR RELIED ON THE ORDERS OF THE AO AND THE FAA. 4.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE AVAILABLE MATERIAL. THERE IS NO DOUBT THAT THE SUM OF RS. 2.75 LAKHS IS NOT THE INCOME OF THE RELEVANT AY. AS PER THE AVAILABLE RECORD, MINOR DAUGHTER OF THE ASSESSEE HAD RECEIVED GIFTS IN THE YEAR 2000 AND GIFT AMOUNT WAS ADVANCED AS LOAN. IN THE AY UNDER CONSIDERATION, LOAN AMOUNT WAS RECEIVED BACK. CONFIRMATION ACCOUNTS OF EARLIER YEARS FILED BEFORE THE AO CLEARLY PROVE THAT TRANSACTION-IN-QUESTION IS NO T RELATED CURRENT AY. SIMILARLY, FD INTEREST OFFERED FOR TAXATION CANNOT BE TREATED INC OME FROM UNDISCLOSED INCOME OF THE ASSESSEE-ESPECIALLY, WHEN AO HAS NOT DISCUSSED ANYT HING ABOUT THE FDS CONCERNED. BESIDES, INCOME FROM HUF SHARE OF THE MEMBER OF T HE FAMILY CANNOT BE TAXED U/S. 68 OF THE ACT-WHEN DETAILS OF THESE TRANSACTIONS WE RE MADE AVAILABLE TO THE AO AND HE HAD NOT POINTED OUT ANY DEFECT IN THE ENTRIES-IN-QU ESTION. LASTLY, MATURITY AMOUNT OF THE FD THAT WAS TAKEN IN 2002, CANNOT BE TAXED AS P ER THE PROVISIONS OF SEC. 68 OF THE ACT. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT ADDITIONS MADE BY THE AO AND I.TA. NO. 2451/MUM/2011 ASHOK JAISWAL 4 UPHELD BY THE FAA ARE NOT BASED ON EVIDENCE. CONVE RSELY, DOCUMENTS SUBMITTED TO AO, PROVE THAT ASSESSEE HAD DISCHARGED HIS BURDEN O F PROOF. GROUND NO. 2 FILED BY THE ASSESSEE IS ALLOWED. 5. NEXT GROUND IS ABOUT THE ADDITION MADE BY THE AO WI TH REGARD TO AGRICULTURAL INCOME. DURING THE ASSESSMENT PROCEEDINGS, AO FOUN D THAT ASSESSEE HAD SHOWN AGRICULTURAL INCOME AMOUNTING TO RS. 2,56,853/- AND SAME WAS DEPOSITED IN VARIOUS BANK ACCOUNTS. HE HELD THAT ASSESSEE HAD NOT SUBMI TTED ANY DOCUMENTARY EVIDENCE IN THIS REGARD. HENCE, HE TREATED THE AGRICULTURAL INC OME AS UN-EXPLAINED CREDIT U/S. 68 OF THE ACT. IN THE APPELLATE PROCEEDINGS AFTER CONSID ERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE AO, FAA THAT THE APPELLANT HAD PRODUCED EVIDENCES TO THE EXTENT OF RS. 1.58 LAKHS IN RESPEC T OF AGRICULTURAL INCOME. AS IN THE REMAND PROCEEDINGS AGRICULTURAL INCOME OF RS. 1.3 L AKHS WAS TO BE TREATED AS GENUINE BY THE AO, SO, FAA HELD THAT AGRICULTURAL INCOME TO THE TUNE OF RS. 51,853/- (1,81,853/- () 1,30,000/-) REMAINED UN-EXPLAINED. FINALLY, HE HELD THAT SAID AMOUNT SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM OTHE R SOURCES. 5.1. BEFORE US, AR SUBMITTED THAT WHILE CALCULATING THE AGRICULTURAL INCOME TWO BILLS AMOUNTING TO RS. 51,853/- (42,306 + 9,547/-) WERE NOT CONSIDERED BY THE AO. HE REFERRED TO PAGE NOS. 102 AND 103 OF THE PAPER B OOK. DR RELIED UPON THE ORDERS OF THE AO AND FAA. WE HAVE CONSIDERED THE RIVAL SU BMISSIONS AND HAVE PERUSED THE PAPER BOOK. IT IS EVIDENT THAT BILLS AMOUNTING TO RS. 51,853/-,AS SUBMITTED BY THE AR, WERE PRODUCED BEFORE THE AO DURING THE REMAND PROCE EDINGS AND THE SAME WERE NOT CONSIDERED BY THE AO/ FAA. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT ADDITION UPHELD BY THE FAA AMOUNTING TO RS. 51,853/ - DESERVES TO BE DELETED. GROUND NO.3 IS DECIDED IN FAVOUR OF THE ASSESSEE. 6. GROUND NO. 3(II) IS ABOUT UPHOLDING ADDITION AMOUNT ING TO RS. 75,000/- BEING THE INCOME OF THE HUF. THE AR ADMITTED BEFORE US T HAT FAA HAD RATHER DELETED THE ADDITION MADE BY THE AO AND THAT THE SAID GROUND WA S MIS-CONCEIVED. THEREFORE, PARA (II) OF GROUND NO.3 STANDS DISMISSED. 7. GROUND NO.4 : AR SUBMITTED THAT ASSESSEE DID NOT WA NT TO PRESS THE SAID GROUND OF APPEAL. AS THE ASSESSEE DOES NOT WANT TO PURSUE THE GROUND, SAME IS TREATED AS DISMISSED. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER, 2012. SD/- SD/- ( . . / I.P. BANSAL ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI, +$ DATE: 23 RD OCTOBER, 2012 I.TA. NO. 2451/MUM/2011 ASHOK JAISWAL 5 TNMM * * * * # ## # %, %, %, %, -,)% -,)% -,)% -,)% / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE !,% % //TRUE COPY// *$ *$ *$ *$ / BY ORDER, . .. . / / / / / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI