Smt. Padma Devi Malik, Gurgaon V. ITO, Gurgaon

ITA 2482/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2836 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 04-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHARI
• Assessee Lawyers: ANANYA KAPOOR CAS
• Keywords: Gift; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 2482 /DEL/2016 : ASSTT. YEAR : 2011 - 1 2 PADMA DEVI MALIK, C - 4C, 123, CARLTO N ESTATE, PHASE - V, GURGAON VS INCOME TAX OFFICER, WARD - II(1) , GURGAON (APPELLANT) (RESPONDENT) PAN NO. A AKPM7458G ASSESSEE BY : SH. SALIL KAPOOR & MS. ANANYA KAPOOR, CAS REVENUE BY : SH. BEDOBANI CHAUDHARI , SR. DR DATE OF HEARING : 16 .0 3 .201 7 DATE OF PRONOUNCEMENT : 15 .06 .201 7 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 17.02.2016 OF LD. CIT(A) - 2 , GURGAON . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE ADDITIO NS MADE BY THE ASSESSING OFFICER ('AO')IN ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT'), ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION AND THE COMMISSIONER OF INCOME TAX (APPEALS) ('CIT(A)') ERRED IN SUSTAINING THE ADDITION OF RS.17,65,000/ - . 2. THE ORDER PASSED BY THE AO AND THE ADDITIONS MADE ARE ILLEGAL AND BAD IN LAW A. THAT, ADMITTEDLY, THE ADDITIONS HAVE BEEN MADE ON THE DIRECTIONS OF THE JOINT COMMISSIONER U/S 144A AND THE SAME ARE ILLEGAL, BAD IN LAW AND ARE LIABLE TO BE DELETED. ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 2 B. THAT, ADMITTEDLY, THE DIRECTIONS GIVEN U/S 144A ARE WITHOUT PROVIDING AN OPPORTUNITY TO THE APPELLANT, HENCE, THE SAME ARE ILLEGAL AND BAD IN LAW AND THE ADDITIONS MADE ON THE BASIS OF THE SAID DIRECTIONS ARE ALSO ILLEGAL AND BAD IN LAW. OPPORTUNITY OF BEING HEARD, BEING A FOUNDATIONAL AND A JURISDICTIONAL REQUIREMENT, THE ADDITIONS MADE ARE LIABLE TO BE DELETED. C. THAT THE DIRECTIONS ISSUED BY THE JOINT COMMISSIONER, WITHOUT PROVIDING ANY OPPORTUNITY TO THE APPELLANT, ARE PREJUDICIAL T O THE INTEREST OF THE APPELLANT, HENCE THE SAME ARE COVERED BY THE PROVISO TO SECTION 144A AND EXPLANATION TO SECTION 144A IS NOT APPLICABLE. 3. THE AO/CIT(A) ERRED IN NOT PROVIDING THE APPELLANT A COPY OF THE DRAFT ASSESSMENT ORDER A. THAT, THE AO/CIT( A) HAS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ERRED ON FACTS AND IN LAW, IN NOT PROVIDING THE APPELLANT WITH A COPY OF THE DRAFT ASSESSMENT ORDER. ADMITTEDLY, THE ADDITIONS WERE MADE IN FURTHERANCE OF DIRECTIONS OF THE JOINT COMMISSIONER U/S 144A AND AFTER THE DRAFT ASSESSMENT ORDER HAD BEEN PREPARED, WHEREIN NO ADDITION WAS MADE. 4. THE ADDITION MADE, CANNOT SUSTAIN ON THE FACTS OF THE PRESENT CASE. A. THAT, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO/CIT(A) ERRED IN NOT CON SIDERING THE EVIDENCE PLACED ON RECORD AND THE EXPLANATION PROVIDED BY THE APPELLANT. THE APPELLANT HAS PLACED ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 3 ON RECORD EVIDENCE/ SUBMISSIONS/ DOCUMENTS TO PROVE THE SOURCE OF THE SAID CASH DEPOSITS AND HAS PROVIDED SUFFICIENT EXPLANATION IN RESPECT OF TH E SAID CASH DEPOSITS. THE CIT(A) HAS ILLEGALLY SUSTAINE D THE ADDITION OF RS. 17,65,000/ - . B. THAT THE AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE APPELLANT HAS DISCHARGED THE ONUS WITH RESPECT TO PROVIDING THE EXPLANATION OF THE SOURCE OF THE CASH. HENCE , THE ORDERS PASSED ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 5. THE OBSERVATIONS MADE BY THE AO/CIT(A) ARE UNJUST, UNLAWFUL AND BASED ON MERE SURMISES AND CONJUNCTURES. 6. THE EXPLANATION GIVEN IN THE EVIDENCE/SUBMISSIONS PRODUCED, MATERIAL PLAC ED AND MATERIAL AVAILABLE ON RECORD HAS NOT BEEN PROPERLY CONSIDERED AND HAS NOT BEEN JUDICIALLY INTERPRETED. THE ADDITION MADE BY THE AO/CIT(A) IS ILLEGAL, UNJUST AND HIGHLY EXCESSIVE. 7. THE AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) O F THE ACT. 3 . FROM THE ABOVE GROUND, IT IS GATHERED THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF ADDITION OF RS.17,65,000/ - . 4. FACTS OF THE CASE RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME O N 25.07.2011 DECLARING AN INCOME OF RS.3,60,180/ - . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED FROM THE AIR ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 4 DOWNLOADED FROM SYSTEM THAT THE ASSESSEE HAD DEPOSITE D CERTAIN CASH DEPOSITS IN HER S A VING BANK ACCOUNTS AMOUNTING TO RS.30,65,000/ - ON VARIOUS DATES RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AO ASKED THE ASSESSEE TO FURNISH COPIES OF ALL BANK ACCOUNTS WITH NARRATION OF EACH ENTRY ALONGWITH SOURCE OF DEPOSITS WITH DOCUMENTARY EVIDENCE AND COPIES OF ALL FDRS ALONGWTIH SOURCE OF INVESTMENT. IN RESPONSE, THE ASSESSEE FURNISHED THE WRITTEN SUBMISSION WHICH HAS BEEN INCORPORATED BY THE AO IN THE ASSESSMENT ORDER DATED 12.03.2014 AT PAGE NOS. 3 TO 7 AND 10 & 11, FOR THE COST OF REPE TITION, THE SAME IS NOT REPRODUCED HEREIN. 5. THE AO WAS NOT SATISFIED FROM THE REPLY OF THE ASSESSEE AND MADE THE ADDITION OF RS.30,65,000/ - FOR THE FOLLOWING REASONS: THE CONTENTION OF THE ASSESSEE REGARDING RECEIPT OF REPAYMENT OF LOAN OF RS. 25,50,0 00 / - IN CASH FROM SHRI VIJAY KUMAR KHANNA IS NOTHING BUT AFTERTHOUGHT OF THE ASSESSEE. NEITHER THE DATE OF GIVING SUCH LOAN HAS BEEN MENTIONED NOR THE MODE OF GIVING SUCH A HUGE LOAN WITHOUT INTEREST HAS BEEN FURNISHED. SECONDLY, IT IS NOT BELIEVABLE THAT IF THE AMOUNT WAS RECEIVED FROM SHRI VIJAY KUMAR KHANNA, WHY SUCH A HUGE AMOUNT OF RS. 25,50,000 / - WAS NOT DEPOSITED IN BANK WHEN IT WAS STATED TO BE RECEIVED ON 22.11.2002 AND WHY IT WAS KEPT AT HOME. FURTHERMORE, NO RECEIPT OF HAVING RECEIVED SUCH A HUGE LOAN HAS BEEN OBTAINED FROM SHRI VIJAY KUMAR KHANNA AT THE TIME OF GIVING LOAN. KEEPING IN VIEW THE ABOVE FACTS, THE GENUINENESS OF TRANSACTION COULD NOT BE PROVE D WITH DOCUMENTARY EVIDENCE. ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 5 II) IT HAS BEEN STATED VIDE PARA 1 (A) OF REPLY DATED 07.10.2013 THAT LATE SHRI THAKUR DASS MALIK PREVIOUSLY WAS PARTNER IN A PARTNERSHIP FIRM NAMELY NEEDO RESTAURANT, 1936, FOUNTAIN CHOWK, DELHI. THIS BUSINESS WAS RUNNING WELL AND ALL THE PARTNERS WHO WERE 4 IN NUMBERS WERE HAVING EQUAL SHARE IN THE BUSINESS. SHRI THA KUR DASS MALIK EXPIRED IN 1988 AND AFTER THIS, HIS SHARE WAS INHERITED TO HIS WIFE SMT. SHANTI DEVI MALIK WHO REMAINED IN PARTNERSHIP TILL THE BUSINESS OF THE FIRM WAS CLOSED. ON THE CLOSURE OF BUSINESS, THE CAPITAL INVOLVED IN THE FIRM BY THE PARTNERS WAS WITHDRAWN BY EACH OF THEM. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE HAS NOT SUBMITTED COPIES OF RETURNS OF M/S NEEDO RESTAURANT ALONGWITH COPIES OF CAPITAL ACCOUNTS OF THE PARTNERS. FURTHERMORE, COPIES OF PARTNERSHIP DEED SUBMITTED ALONGWITH REPLY DATED 27.08.2013 IS NOT SIGNED BY ALL THE FOUR PARTNERS, IT IS SIGNED BY TWO PARTNERS NAMELY SH . THAKUR DAS MALIK AND SMT. PADMA DEVI MALIK. IT IS NOT SIGNED BY THE WITNESS(ES) ALSO. THEREFORE, IT IS NOT A VALID PARTNERSHIP DEED. KEEPING IN VIEW THE ABOVE FACTS , THE GENUINENESS OF RECEIPT OF RS. 9 LACS FROM SMT. SHANTI DEVI THROUGH WILL IS NOT PROVED. III) AS REGARDS, GIFTS RECEIVED TO THE TUNE OF RS. 6,93,633 / - ON THE OCCASION OF MARRIAGE OF HER SON SHRI VINEET MALIK, THE PLEA TAKEN BY THE ASSESSEE IS NOT ACCE PTABLE AS HIS MARRIAGE WAS HELD ON 14.04.2007 AND IT IS NOT BELIEVABLE THAT WHY THIS AMOUNT WAS NOT BEEN DEPOSITED IN BANK AT THAT TIME AND WHY THIS WAS KEPT AT HOME. SIMILARLY, THE ASSESSEE HAS ALSO FAILED TO FURNISH EVIDENCE OF PAST SAVINGS OF RS. 3,25,0 00 / - . IV) IT IS WELL ESTABLISHED BY THE DECISIONS OF THE SUPREME COURT AND HIGH COURTS THAT THE BURDEN OF PROVING THAT CASH CREDIT ENTRY APPEARING IN THE ASSESSEE'S ACCOUNT BOOKS DOES NOT REPRESENT THE INCOME OF THE ASSESSEE IS ON THE ASSESSEE. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 6 ASSESSEE, THE INITIAL ONUS IS ON THE ASSESSEE TO OFFER AN EXPLANATION OF THE NATURE AND SOURCE OF THE CASH CREDIT. IF THE EXPLANATION IS NOT FOUND SATISFACTORY OR REASONABLE, THE ASSESSING OFFICER CAN TREAT SUCH MO NEY AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. SECTION 68 OF THE I.T. ACT, 1961 GIVES STATUTORY RECOGNITION TO THE PRINCIPLE OF CASH CREDITS, WHICH ARE NOT SATISFACTORILY EXPLAINED, MAY BE ASSESSED AS INCOME. THE PROVISIONS OF SECTION 68 OF TH E I.T. ACT, 1 961 APPLIES WHEN THE ASSESSEE'S EXPLANATION REGARDING CASH CREDIT IS REJECTED AS BEING UNSATISFACTORY OR WHEN THE ASSESSEE DOES NOT RENDER ANY EXPLANATION. V) IN THE PRESENT CASE, THE ASSESSEE MADE CASH DE POSITS AGGREGATING RS. 30,65,000 / - WIT H ICICI BANK HAS FAILED TO RENDER EXPLANATION WITH DOCUMENTARY EVIDENCE. KEEPING IN VIEW THE FACTS OF THE CASE AS WELL AS WRITTEN SUBMISSIONS, THE EXPLANATION RENDERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY AS THE ASSESSEE HAS FAILED TO SUBSTANTIATE HER CLAIM WITH SUPPORTING EVIDENCE. THEREFORE, THE AMOUNT OF CASH DEPOSITS OF RS. 30,65,000/ - IS TREATED AS UNEXPLAINED CASH DEPOSITS IN SAVING BANK ACCOUNT NO. 017701014510 & 017701525384 WITH ICICI BANK, AND ADDED TO THE INCOME OF THE ASSESSEE. 6 . BEING A GGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO RESTRICTED THE ADDITION TO THE EXTENT OF RS.17,65,000/ - AND ACCEPTED THE CASH DEPOSITS TO THE EXTENT OF RS.13,00,000/ - . HE ALSO OBSERVED THAT THE DIRECTIONS GIVEN BY THE LD. JCIT PERTAINED ONLY TO THE LINE OF INVESTMENT. 7 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE MONITORING OF SCRUTINY ASSESSMENT THE LD. JCIT ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 7 GAVE THE DIRECTIONS VIDE LETTER DATED 10.03.2014 TO THE AO (COPY OF WHICH IS PLACED AT PAGE NOS. 106 & 107 OF THE ASSESSEE S PAPER BOOK). HE AGAIN GAVE CERTAIN DIRECTIONS AFTER CONSIDERING THE DRAFT ASSESSMENT ORDER PASSED BY THE AO VIDE LETTER DATED 10.02.2014 (COPY OF WHICH IS PLACED AT PAGE NOS. 109 & 110 OF THE ASSESSEE S PAPER BOOK). IT WAS STATED THAT THE AFORESAID DIRECTION S WERE GIVEN BY THE JCIT ON 10.03.2014 AND THE AO PASSED THE ASSESSMENT ORDER ON 12.03.2014 WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO WITHOUT GIVING THE OPP ORTUNITY OF BEING HEARD WAS NOT JUSTIFIED AND THAT THE LD. CIT(A) WITHOUT CONSIDERING THE FACTS IN RIGHT PERSPECTIVE WRONGLY CONFIRMED THE ADDITION MADE BY THE AO. IT WAS STATED THAT THE ADDITION HAS BEEN MADE BY THE AO ONLY ON THE DIRECTIONS GIVEN BY THE JCIT U/S 144A OF THE ACT BUT THE SAID ADDITIONS WERE MADE WITHOUT GIVING THE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, THE ADDITION SUSTAINED BY THE LD. CIT(A) DESERVES TO BE DELETED. 8 . THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: SUD HIR SAREEN VS ITO (1981) 128 ITR 445 (DEL) CIT VS DHANALAKSHMI MILLS LTD. (2001) 246 ITR 549 (MAD) 9 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 8 10 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFUL LY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. JCIT GAVE THE DIRECTION TO THE AO U/S 144 A OF THE ACT WHICH IS EVIDENT FROM PAGE NOS. 106 & 107 AND 109 & 110 OF THE ASSESSEE S PAPER BOOK. THE PROVISIONS CONTAINED IN SECTION 144A OF THE ACT READ AS UNDER: A JOINT COMMISSIONER MAY, ON HIS OWN MOTION OR ON A REFE RENCE BEING MADE TO HIM BY THE ASSESSING OFFICER OR ON THE APPLICATION OF AN ASSESSEE, CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING IN WHICH AN ASSESSMENT IS PENDING AND, IF HE CONSIDERS THAT, HAVING REGARD TO THE NATURE OF THE CASE OR THE AMOUNT INVOLVED OR FOR ANY OTHER REASON, IT IS NECESSARY OR EXPEDIENT SO TO DO, HE MAY ISSUE SUCH DIRECTIONS AS HE THIN KS FIT FOR THE GUIDANCE OF THE ASSESS ING OFFICER TO ENABLE HIM TO COMPLETE THE ASSESSMENT AND SUCH DIRE CTIONS SHALL BE BINDING ON THE ASSESSING OFFICER. PROVIDED THAT NO DIRECTIONS, WHICH ARE PREJUDICIAL TO THE ASSESSEE SHALL BE ISSUED BEFORE AN OPPORTUNITY IS GIVEN TO THE ASSESSEE TO BE HE ARD. EXPLANATION: FOR THE PURPOSES OF THIS SECTION, NO DIRECTION AS TO THE LINES ON WHICH AN INVESTIGATION CONNECTED WITH THE ASSESSMENT SHOULD BE MADE, SHALL BE DEEMED TO BE DIRECTION PREJUDICIAL TO THE ASSESSEE. 1 1 . FROM THE ABOVE PROVISIONS CONTAINE D IN PROVISO TO SECTION 144A OF THE ACT, IT IS CLEAR THAT AN OPPORTUNITY OF BEING HEARD IS TO BE GIVEN TO THE ASSESSEE BEFORE ISSUING THE DIRECTION , HOWEVER, IN THE PRESENT CASE NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE OPPORTUNITY OF BEING ITA NO . 2482 /DEL /201 6 PADMA DEVI MALIK 9 HEA RD WAS GIVEN TO THE ASSESSEE BEFORE ISSUING THE DIRECTIONS U/S 144A OF THE ACT. I, THEREFORE, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE LD. JCIT/AO TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVING A DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 1 2 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (O RDE R PRONOUNCED IN THE COURT ON 15 /06 /2017 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 15 /06 /2017 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR