M/s B R Krishna Murthy (HUF) , Tumkur V. Income TAx Officer Ward-2 , Tumkur

ITA 2475/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5635 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 22-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIMAL ANAND
• Assessee Lawyers: KUPENDRA SHETTY
• Keywords: Unexplained investment; Capital asset; Cost of acquisition; Corroborative evidences
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2475/ BANG/2017 ASSESSMENT YEAR : 2012 - 13 SHRI B.R. KRISHNAMURTHY, HUF, M/S. S.L.N. STEEL &JEWELLERS, NO. 370, B H ROAD, GUBBI TOWN, TUMKUR DIST. 572 216. PAN: AAGHB 1750E VS. THE INCOME TAX OFFICER, WARD 2, TUMKUR. APPELLANT RESPONDENT APPELLANT BY : SHRI KUPENDRA SHETTY, CA RESPONDENT BY : SHRI VIMAL ANAND, ADDL. CIT (DR) DATE OF HEARING : 1 8 .01.2018 DATE OF PRONOUNCEMENT : 24 .0 1 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A) 7, BANGALORE DATED 11.10.2017 FOR ASSESSME NT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) IS ERRONEOUS ON THE FACTS AND IN THE LAW. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE HE OUGHT NOT TO HAVE DISM ISSED THE APPEAL. 2. THE ORDER OF ASSESSMENT MADE U/S 143(3) R.W. SEC TION 147, IS WITHOUT JURISDICTION AND , THEREFORE, LIABLE TO BE ANNULLED. 3. THE AO AND CIT(A) ERRED ON FACTS AND IN LAW IN M AKING ADDITION OF RS.4,13,448/- , SINCE IT IS CLEARLY EXPLAINABLE AND THERE IS NO PROVISION UNDER THE LAW TO TAX THE SAME. 3. THE LEARNED AR OF THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE CIT (A). THE LD. DR OF REVENUE SUPPORTED THE ORDER OF C IT(A). I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS O F AUTHORITIES BELOW. ITA NO. 2475/BANG/2017 PAGE 2 OF 4 4. GROUND NOS. 1 AND 2 ARE IN RESPECT OF VALIDITY O F REOPENING, I FIND NO INFIRMITY IN THE ORDER OF CIT(A) ON THIS ASPECT. 5. REGARDING GROUND NO. 3, I FIND THAT THIS ISSUE H AS BEEN DECIDED BY CIT(A) BY MAKING FOLLOWING OBSERVATIONS ON PAGE NOS. 5 AND 6 OF HIS ORDER. THE RELEVANT PARA 6 OF THIS ORDER IS REPRODUCED HEREINBELOW. 6. AS REGARDS THE ADDITION OF RS 4,13,448 BY THE AO AS UNEXPLAINED INVESTMENT, THE APPELLANT SUBMITTED THAT THE SOURCE OF THIS CASH DEPOSIT IS OPENING CASH BALANCE OF RS 1,75,831 AS ON 01-04- 2011 AND SALE OF GOLD ORNAMENTS OF RS 3,31,500 IN MAY 2011. IT WAS S UBMITTED THAT THE APPELLANT HAS BEEN FILING RETURN OF INCOME REGULARL Y AND COPIES OF ACKNOWLEDGEMENTS OF RETURN FOR AY 2010-11 TO 2012-1 3 WERE FILED. THE APPELLANT ALSO FILED STATEMENT OF INCOME AND BA LANCE SHEET PREPARED IN SEPARATE SHEETS. THE ACKNOWLEDGEMENT OF RETURNS SHOW THAT THE APPELLANT HAS FILED RETURNS IN FORM ITR-4 ELECTRONICALLY. THIS RETURN FORM CONTAINS SCHEDULES FOR BALANCE SHEET, P ROFIT AND LOSS ACCOUNT AND COMPUTATION OF INCOME WHICH ARE REQUIRE D TO BE FILLED IN BY THE TAXPAYER. HENCE, A COPY OF THE RETURN FILED BY THE TAXPAYER WOULD SHOW THE ACTUAL DETAILS FILED IN THE RETURN W ITH THE INCOME TAX DEPARTMENT. BUT, THE ACKNOWLEDGEMENT(ITR-V) ONLY ME NTIONS ABOUT GROSS TOTAL INCOME, DEDUCTIONS U/C VI A, TOTAL INCO ME AND DETAILS OF TAX PAYMENT. VERACITY OF THE DOCUMENTS BALANCE SHEE T AND COMPUTATION OF INCOME PREPARED IN SEPARATE SHEETS ( NOT PART OF ITR-4 FILED ELECTRONICALLY) CANNOT BE ASCERTAINED. NO OTH ER SUPPORTING EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE APPELLAN T TO PROVE ITS CLAIM. THEREFORE, IT IS HELD THAT THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT OF RS 4,13,4 48. THEREFORE, ADDITION BY THE AO U/S 69 OF THE ACT IS UPHELD. CON SEQUENTLY, THIS GROUND OF APPEAL OF THE APPELLANT FAILS. 6. FROM THE ABOVE PARA REPRODUCED FROM THE ORDER OF CIT(A), IT IS SEEN THAT THE SOURCE OF CASH DEPOSIT IS EXPLAINED BY THE ASSESSEE BY STATING THAT THERE WAS OPENING CASH BALANCE OF RS. 1,75,831/- AS ON 01.04. 2011 AND THERE WAS SALE OF GOLD ORNAMENTS OF RS. 3,31,500/- IN MAY 2011. TOTA L OF BOTH THESE AMOUNTS IS MORE THAN THE AMOUNT OF ADDITION MADE BY THE AO OF RS. 4,13,448/-. THE RETURN OF INCOME FOR THE PRESENT YEAR WAS FILED BY THE ASSESSEE ON 15.07.2012, COPY OF WHICH IS AVAILABLE ON PAGE NO. 41 OF THE PA PER BOOK. AS PER THIS RETURN OF INCOME, THERE IS GROSS TOTAL INCOME SHOWN AT RS. 1,58,219/-. THE COMPUTATION OF INCOME FOR THIS ASSESSMENT YEAR IS A VAILABLE ON PAGES 39 & 40 OF THE PAPER BOOK AND AS PER THE SAME, THE ASSESSEE HAS DECLARED BUSINESS ITA NO. 2475/BANG/2017 PAGE 3 OF 4 INCOME OF RS. 1,06,367/- AND INCOME FROM OTHER SOUR CES OF RS. 680/-. THE DETAILS OF SHORT TERM CAPITAL GAIN IS ALSO GIVEN ON THE SAME PAGE AS PER WHICH, THERE IS SALE CONSIDERATION OF CAPITAL ASSET ON 23. 05.2011 OF RS. 3,31,500/- AND AFTER DEDUCTING COST OF ACQUISITION OF RS. 2,80,328 /-, SHORT TERM CAPITAL GAIN WAS WORKED OUT AT RS. 51,172/-. THE BALANCE SHEET FOR THE PRECEDING YEAR I.E. YEAR ENDING ON 31.03.2011 IS AVAILABLE ON PAGE NO. 45 OF THE PAPER BOOK AND AS PER THE SAME, THERE WAS CASH IN HAND AS ON 31.03.2011 O F RS. 1,75,831/- AND AS PER THE ORDER OF CIT(A) REPRODUCED ABOVE, IT IS NOT ED BY CIT(A) THAT ASSESSEE HAS FILED STATEMENT OF INCOME AND BALANCE SHEET PRE PARED IN SEPARATE SHEETS AND THE ACKNOWLEDGMENT OF RETURNS SHOW THAT THE ASS ESSEE HAS FILED RETURNS IN FORM ITR-4 ELECTRONICALLY. TO THIS EXTENT, THERE I S NO DIFFERENCE IN THE EXPLANATION OF ASSESSEE AND FINDING OF CIT(A). THE REAFTER THE CIT(A) SAYS THAT THIS RETURN FORM CONTAINS SCHEDULES FOR BALANCE SHE ET, PROFIT AND LOSS ACCOUNT AND COMPUTATION OF INCOME WHICHARE REQUIRED TO BE F ILLED IN BY THE TAXPAYER AND HENCE, A COPY OF THE RETURN FILED BY THE TAXPAYER W OULD SHOW THE ACTUAL DETAILS FILLED IN THE RETURN WITH THE INCOME TAX DEPARTMENT . BUT THE ACKNOWLEDGEMENT (ITR-V) FILED BEFORE HIM ONLY MENTIONS ABOUT GROSS TOTAL INCOME, DEDUCTIONS U/C VIA, TOTAL INCOME AND DETAILS OF TAX PAYMENT. HE H AS HELD THAT THE VERACITY OF THE DOCUMENTS I.E. BALANCE SHEET AND COMPUTATION OF INCOME PREPARED IN SEPARATE SHEETS NOT PART OF ITR-4 FILED ELECTRONICA LLY AND UNDER THESE FACTS, VERACITY CANNOT BE ASCERTAINED AND ON THIS BASIS, H E HAS REJECTED THE EXPLANATION OF THE ASSESSEE. 7. IN MY CONSIDERED OPINION, WHEN THE ASSESSEE HAS GIVEN COPY OF ITR-5, THE COPY OF RETURN FILED BY THE ASSESSEE COULD HAVE BEE N PROCURED BY THE CIT(A) FROM THE AO IF HE HAD ANY DOUBT ABOUT THE COMPUTATI ON, BALANCE SHEET ETC. FILED BY ASSESSEE BEFORE HIM. MOREOVER, AS PER THE BALAN CE SHEET & COMPUTATION AVAILABLE IN THE PAPER BOOK, IT IS SEEN THAT THERE WAS OPENING CASH BALANCE OF RS. 1,75,831/- AS PER THE BALANCE SHEET AS ON 31.03 .2011 AND AS PER THE COMPUTATION INCOME OR THE PRESENT YEAR, THERE IS SA LE CONSIDERATION OF GOLD ORNAMENTS OF RS. 3,31,500/- AND TOTAL OF BOTH THESE AMOUNTS OF RS. 3,31,500/- AND RS. 1,75,831/- IS MORE THAN THE AMOUNT OF CASH DEPOSIT BY ASSESSEE IN ITA NO. 2475/BANG/2017 PAGE 4 OF 4 BANK OF RS. 4,13,448/- AND UNDER THESE FACTS, THE A DDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) IS NOT JUSTIFIED. HENCE I DELETE THE SAME. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 24 TH JANUARY, 2018. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.