Smt. Rukmanbai Chaudhary L/H of Late Shri Madanlal Chaudhary, Mandsaur V. The ITO, Mandsaur

ITA 253/IND/2011

• Counselvise Citation: 25322714 RSA 2011
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 21-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S S MUNDRA
• Keywords: Reopening of assessment
• Section: 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE SMC BENCH, INDORE BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.253/IND/2011 A.Y. 2000-01 LATE SHRI MADANLAL CHAUDHARY THROUGH L/H SMT. RUKMAN BAI, GAROTH PAN ADLPC 2022 Q . APPELLANT VS. ITO-MANDSAUR . RESPONDENT APPELLANT BY : SHRI S.S. MUNDRA, CA RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 27.10.2011 DATE OF PRONOUNCEMENT : 27.10.2011 ORDER THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -UJJAIN, DATED 11.7.2011 FOR THE AY 2000-01 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN: (A) NOT CONSIDERING, APPRECIATING AND DECIDING THE ISSUE RAISED BEFORE HIM THAT THE MATERIAL TAKEN INTO CONSIDERATION BY AO TO RECORD SATISFACTION FOR INITIATION OF PROCEEDINGS U/S 148 BEING NOT VALID AND NOT RELEVANT FOR SUCH SATISFACTION, ACTION TAKE N U/S 148 IS ILLEGAL AND UNWARRANTED. APPROVAL 2 ACCORDED BY ADDL. CIT, RATLAM ON SUCH SATISFACTION RECORDED BY AO IS PURELY MECHANICAL AND WITHOUT APPLICATION OF MIND AND HENCE NOT IN ACCORDANCE WITH LAW. (B) SUSTAINING ADDITION TO THE EXTENT OF RS.50,000/- AS ALLEGED INVESTMENT FROM UNDISCLOSED SOURCES. 2. GROUND NO.1(A) PERTAINS TO INITIATION OF PROCEED INGS U/S 148. FROM THE RECORD, I FOUND THAT THERE WAS SURVEY AT THE PREMISES OF ASSESSEE ON 27.5.2003. DURING SURVEY, V ARIOUS INCRIMINATING DOCUMENTS PERTAINING TO VARIOUS YEARS WERE FOUND. THESE DOCUMENTS ALSO INCLUDE DOCUMENTS PERTA INING TO AY 2000-01 UNDER CONSIDERATION, WHICH INDICATED CER TAIN AMOUNT ADVANCED BY THE ASSESSEE. ON THE BASIS OF TH ESE DOCUMENTS, THE AO FORMED AN OPINION THAT THERE IS E SCAPEMENT OF INCOME FOR AY 2001-02, ACCORDINGLY, NOTICE U/S 1 48 WAS GIVEN. AS PER MY CONSIDERED VIEW, THE AO HAS SUFFIC IENT MATERIAL TO BELIEVE THAT INCOME FOR AY 2000-01 HAS ESCAPED ASSESSMENT. ACCORDINGLY, REOPENING OF ASSESSMENT WA S JUSTIFIED. THEREFORE, GROUND NO.1(A) IS DISMISSED. 3. GROUND NO.1(B) PERTAINS TO THE ADDITION OF RS.50 ,000/- RETAINED BY LD. CIT(A) ON ACCOUNT OF SHORTFALL IN A VAILABILITY OF CASH IN RESPECT OF LOANS AND ADVANCES GIVEN BY THE ASSESSEE. FROM THE RECORD, I FOUND THAT AO HAS NOT ACCEPTED A SSESSEES INCOME OUT OF AGRICULTURE. HOWEVER IN AN APPEAL FIL ED, THE LD. CIT(A) HAS ACCEPTED AGRICULTURAL INCOME OF RS.1,40, 000/-, WHICH WAS DISALLOWED BY THE AO. AGAINST THE DECISIO N OF LD. CIT(A), THE REVENUE IS NOT IN FURTHER APPEAL BEFORE ME. THUS, THE INCOME OF RS.1,40,000/- OFFERED BY THE ASSESSEE ON ACCOUNT 3 OF AGRICULTURE HAS BEEN FINAL. HOWEVER, WHILE CONSI DERING THE AMOUNT AVAILABLE WITH THE ASSESSEE, THE AGRICULTURA L INCOME OF RS.1,40,000/- WAS NOT CONSIDERED BY LOWER AUTHORITI ES. ONCE THE AGRICULTURAL INCOME OF RS.1,40,000/- HAS BEEN A CCEPTED, THE SAME IS VERY MUCH AVAILABLE WITH THE ASSESSEE F OR ADVANCING OUT OF IT. THE LD. CIT(A) HAS NOT ACCEPTE D ASSESSEES CLAIM ON THE PLEA OF NON-MAINTENANCE OF BOOKS OF AC COUNTS BY THE ASSESSEE. ONCE THE INFLOW OF FUNDS IS ACCEPTED ON ACCOUNT OF AGRICULTURAL INCOME, THERE DOES NOT APPEAR TO BE ANY REASON TO DISREGARD THE SAME IN CASH FLOW STATEMENT. I, TH EREFORE, DO NOT FIND ANY MERIT FOR SUSTAINING ADDITION OF RS.50 ,000/- OUT OF SHORT AVAILABILITY OF CASH IN RESPECT OF LOANS & AD VANCES GIVEN BY THE ASSESSEE. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE SAME. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART TERMS INDICATED HEREINABOVE. SD/- (R.C. SHARMA) ACCOUNTANT MEMBER DATED: 27.10.2011 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR !VYAS!