SMT. KIRAN KESWANI , AJMER V. INCOME TAX OFFICER, WARD-2-1, AJMER

ITA 246/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0419 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT A
• Keywords: Business income; Revised return; Reassessment proceedings
• Section: 44AD; 143(3); 147; 131; 148; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S A, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 246/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 SMT. KIRAN KESWANI B-456 PANCHSHEEL, MAKARWALI ROAD, AJMER (RAJ) - 305001 CUKE VS. THE ITO, WARD-2(1), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AMOPK 8406 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE (WRITTEN SUBMISSION) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J.C. KULHARI (JCIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 27/11/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), AJMER DATED 10.01.2018 FOR ASSESSMENT YEAR 2012-13 WHEREIN THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LD. CI T(A) IN SUSTAINING THE ORDER PASSED BY THE AO U/S 154 OF THE ACT. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE BUT IT W AS SUBMITTED VIDE LETTER DATED 16.08.2018 TO CONSIDER THE WRITTE N SUBMISSIONS FILED ON 13.06.2018. ITA NO. 246/JP/2018 SMT. KIRAN KESWANI VS. ITO 2 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSMENT WAS COMPLETED U/S 147 R.W.S. 143(3) OF THE ACT WHEREIN THE AO DISALLOWED DEDUCTION CLAIMED BY THE ASSESSEE U/S 24(A) AMOUNTI NG TO RS. 45,000/- AND U/S 24(B) AMOUNTING TO RS. 75,654/- IN RESPECT OF INCOME DECLARED UNDER THE HEAD INCOME FROM HOUSE PROPERTY FOR THE REASONS THAT THE RENTAL INCOME OF RS. 1,50,000/- SHOWN BY THE ASSESS EE FROM PARTLY LET OUT SELF-OCCUPIED PROPERTY IS UNDISCLOSED INCOME OF THE ASSESSEE AND ALSO ON ACCOUNT OF THE FACT THAT THE ASSESSEE HAS N OT SUBMITTED ANY CERTIFICATE FROM THE BANK SHOWING PAYMENT OF INTERE ST ON THE HOUSING LOAN TAKEN BY THE ASSESSEE. FURTHER, THE ADDITION O F RS. 2,30,000/- WAS MADE AS UNDISCLOSED INCOME OF THE ASSESSEE AS CASH DEPOSITED IN THE ASSESSEES BANK ACCOUNT WAS NOT DULY EXPLAINED BY T HE ASSESSEE DURING THE COURSE OF REASSESSMENT PROCEEDINGS. 4. AGAINST THE SAID ORDER, THE ASSESSEE MOVED AN A PPLICATION U/S 154 OF THE ACT WHICH WAS DISPOSED OFF BY THE ASSESS ING OFFICER VIDE HIS ORDER DATED 11.01.2017 WHEREIN THE ASSESSEE CLAIM O F INTEREST PAYMENT OF RS. 75,654/- WAS ALLOWED U/S 24(B) HOWEVER THE D EDUCTION CLAIMED U/S 24(A) OF THE ACT AMOUNTING TO RS. 45,000/- WAS NOT ALLOWED. FURTHER, RECTIFICATION SOUGHT IN RESPECT OF ADDITIO N OF RS. 2,30,000/- OF UNDISCLOSED INCOME WAS NOT ACCEPTED. AGAINST THE SA ID RECTIFICATION, THE ASSESSEE MOVED AN APPEAL BEFORE THE LD CIT(A) WHO H AS SINCE CONFIRMED THE ORDER OF THE AO STATING THAT THERE IS NO MISTAKE APPARENT FROM THE RECORD IN THE ORDER PASSED BY THE AO U/S 1 43(3) R/W SECTION 147 OF THE ACT. NOW THE ASSESSEE IN APPEAL BEFORE US AGAINST THE SAID ORDER OF THE LD. CIT(A). ITA NO. 246/JP/2018 SMT. KIRAN KESWANI VS. ITO 3 5. IN HER WRITTEN SUBMISSIONS, THE ASSESSEE HAS SUB MITTED IN RESPECT OF CLAIM U/S 24(A) OF THE ACT AS UNDER:- (1) THE ASSESSEE FILED REVISED RETURN IN RESPONSE T O NOTICE U/SEC. 148 & DISCLOSED ADDITIONAL RENTAL INCOME OF RS. 1,50,000. THE A.O. HAS NOT CONSIDERED THIS ADDITIONAL INCOME FROM HOUSE PROPE RTY AS INCOME FROM HOUSE PROPERTY BUT AS INCOME FROM OTHER SOUR CES WHILE COMPLETING THE ASSESSMENT AND DENIED TO GRANT THE B ENEFIT OF SECTION 24(A) BEING 30% RENTAL INCOME. HOWEVER CREDIT FOR I NTEREST ON HOME LOAN PAID RS. 75,654 WAS GRANTED U/SEC. 24(B) AGAIN ST SAME. THE AO HAS DENIED THIS DEDUCTION FOR THE REASON THAT HOUSE MAY BE SELF OCCUPIED HENCE CANNOT BE LET OUT. THUS WITHOUT THE FACTS VERIFIED/EXAMINED HAS MADE HER OWN SURMISES & CONJE CTURES. NO SPOT VERIFICATION OR INSPECTIONS REPORT CALLED FOR. (2) THUS WHEN ASSESSEE HAS DISCLOSED CERTAIN INCOME UNDER A SPECIFIC HEAD ALONG WITH PROOF. TILL THE A.O. DO NOT PROVE OTHERWISE, HE CANNOT DENY THE CLAIM OF ASSESSEE OR CHANGE THE HEAD OF IN COME. IT WAS REQUESTED TO A.O. TO GET THE FACTS VERIFIED BY WARD S INSPECTOR OR BY ANY INDEPENDENT ENQUIRY. SINCE NO RECEIPT ISSUED BY ASS ESSEE FOR SUCH RENTAL INCOME HENCE, SELF DECLARATION OR VERIFICATI ON BY INDEPENDENT BODY WAS ONLY METHOD TO ACCEPT/DENY THE CLAIM. IT IS REQUESTED TO KINDLY GRANT THE CREDIT OF SECTI ON 24(A) & CONSIDER THE INCOME DISCLOSED AS INCOME FROM HOUSE PROPERTY. THE PART OF HOUSE WAS GIVEN TO P.G. STUDENTS OF COLLEGE. THESE FACTS WERE EVEN STATED BEFORE ITO WARD 1(1) WHO HAD ISSUED SUMMONED U/SEC. 131 DATED 08.01.2015 TO ASSESSEE IN CASE OF SUNDER KESWANI PR OP. M/S MARINA ELECTRICAL & GENERAL STORE. ITA NO. 246/JP/2018 SMT. KIRAN KESWANI VS. ITO 4 6. IN RESPECT OF ADDITION OF RS. 2,30,000/-, THE AS SESSEE HAS SUBMITTED THAT THE AO WHILE CALCULATING THE UNDISC LOSED INCOME HAS NOT GRANTED THE CREDIT FOR FOLLOWING: (A) THAT THE ASSESSEE WAS RUNNING M/S PARTH CABLES AS PROP. THIS BUSINESS WAS CLOSED ONLY IN JULY, 2011 & PROFIT THE REOF WAS SHOWN AT RS. 62,790.00 IN RETURN. FURTHER THE STOCK & DEBTOR S REALIZATION THEREOF ALSO BECAME SOURCE OF CASH DEPOSIT IN BANK (AS PER ACCOUNTS A SUM OF RS. 3,48,000 ALSO WITHDRAWN DURING THE YEAR FROM M/ S PARTH CABLE AS PROPRIETOR. THE A.O. HAS DENIED SUCH CREDIT/CONSIDERING FOR CAS H FLOW OF SUCH PROFIT FOR THE REASON THAT NO EVIDENCE GRANTED FOR SUCH INCOME & THIS INCOME MUST HAVE EARNED AT FAG YEAR END & THUS NO C REDIT GRANTED. WHEREAS THE BUSINESS INCOME CONSIDERED FOR TAX PURP OSES, BUSINESS CLOSED IN JUNE 2011, INCOME SHOWN U/SEC. 44AD & PRO OF IN FORM OF SALES TAX REGISTRATION NO. (TIN 08564400407; CST NO . 08564400407 DATE OF REGISTRATION 16.08.2010) ALL PROOF WERE THE RE WITH A.O. & EVEN A.O. HAS DISCUSSED THE SAME IN HER ORDER ALSO BUT F OR HER OWN REASONS HAS NOT CONSIDERED THIS 'BUSINESS INCOME F OR CASH FLOW. (B) SIMILARLY, RS. 35,000.00 ON 12.03.2012 & RS. 50 ,000.00 ON 13.03.2012 IS IN PUNJAB NATIONAL BANK OVERDRAFT ACC OUNT HAVING OPENING DEBIT BALANCE OF RS. 3,58,386; NO CREDIT GR ANTED THEREOF RS. 35,000.00 & RS. 50,000.00 ARE THE CASH COLLECTE D FROM DEBTORS OF PARTH CABLES & DEPOSITED AGAINST LOAN ACCOUNT OF ANY CREDIT IS ITA NO. 246/JP/2018 SMT. KIRAN KESWANI VS. ITO 5 CONSIDERED FOR UNEXPLAINED ACCOUNT THAN DEBIT (LOAN ) IS ALSO BE TO CONSIDERED SIMULTANEOUSLY. COPY OF TRADING, PROFIT AND LOSS ACCOUNT OF M/S PARTH CABLES FOR LAST 3 YEARS ARE AS ENCLOSE D 7. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT SCOPE OF RECTIFICATI ON PROCEEDINGS U/S 154 IS LIMITED TO THE EXTENT OF RECTIFYING ANY MIST AKE APPARENT FROM THE RECORDS AND IN THE INSTANT CASE, WHAT THE ASSESSEE IS SEEKING IS A REVIEW OF THE ASSESSMENT ORDER WHICH IS BEYOND THE SCOPE O F SECTION 154 OF THE ACT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF ASSESSMENT ORDE R, IT IS NOTED THAT THE AO HAS CONSIDERED THE RENTAL INCOME OF RS 150,0 00 FROM PARTIAL LET OUT AND PARTIAL SELF OCCUPIED PROPERTY SITUATED AT PANCHEEL, AJMER AS UNDISCLOSED INCOME AND IN VIEW OF THE SAME, THE DED UCTION CLAIMED UNDER SECTION 24(A) WAS DENIED. THE ASSESSEE HAS CO NTENDED THAT A PART OF THE HOUSE WAS GIVEN TO P.G STUDENTS OF COLL EGE AND THESE FACTS WERE STATED BY THE ASSESSEE IN RESPONSE TO SUMMONS ISSUED UNDER SECTION 131 OF THE ACT. FROM THE ASSESSMENT ORDER, THE SAID CONTENTION OF THE LD AR IS NOT DISCERNABLE HOWEVER WHERE THE A SSESSMENT RECORDS SO CONTAIN THE STATEMENT OF THE ASSESSEE U/S 131, T HE AO SHOULD HAVE CONSIDERED THE SAME BEFORE FINALLY DECIDING THE MAT TER AND NON- CONSIDERATION THEREOF IS A MISTAKE APPARENT FROM RE CORD WHICH REQUIRE RECTIFICATION. 9. REGARDING DETERMINING UNDISCLOSED INCOME AT RS 230,000 AND NOT GIVING CREDIT OF CASH FLOWS ARISING OUT OF BUSINESS RUN IN THE NAME AND ITA NO. 246/JP/2018 SMT. KIRAN KESWANI VS. ITO 6 STYLE OF M/S PARTH CABLES, IT IS NOTED THAT THE ASS ESSEE HAS SHOWN IN HER RETURN OF INCOME PROFIT FROM SUCH BUSINESS AT RS. 6 2,790 AND THE SAME HAS BEEN BROUGHT TO TAX BY THE AO. IN LIGHT OF THE SAME, WHERE THE BUSINESS PROFITS ARE SUBJECT TO TAX, THE CONSEQUENT CASH FLOWS NEED TO BE CONSIDERED AND APPROPRIATE CREDIT GIVEN WHILE DE TERMINING THE UNDISCLOSED CASH FLOWS IN THE BANK ACCOUNT AND THE SAID MISTAKE OF NON-CONSIDERING THE CASH FLOWS FROM M/S PARTH CABLE S IS A MISTAKE WHICH IS APPARENT FROM RECORD WHICH REQUIRES RECTIF ICATION. THE AO IS THEREFORE DIRECTED TO VERIFY THE CASH FLOWS ARISING OUT OF BUSINESS TRANSACTIONS IN M/S PARTH CABLES INCLUDING CASH COL LECTED FROM DEBTORS AND GIVE APPROPRIATE CREDIT TO THE ASSESSEE WHILE D ETERMINING THE UNDISCLOSED INCOME. 10. IN THE RESULT, WE SET-ASIDE THE MATTER TO THE F ILE OF THE AO WITH ABOVE DIRECTIONS AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/11/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. KIRAN KESWANI, AJMER. ITA NO. 246/JP/2018 SMT. KIRAN KESWANI VS. ITO 7 2. IZR;FKHZ@ THE RESPONDENT- ITO. WARD- 2(1), AJMER. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 246/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR