Yogendra Giri, Lucknow V. Inocme Tax Officer-V(3), Lucknow

ITA 264/LKW/2015

• Counselvise Citation: 26423714 RSA 2015
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-09-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 01-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Valuation report; Reassessment proceedings
• Section: 69C; 147; 69; 148; 54

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.264/LKW/2015 ASSESSMENT YEAR:1997-98 INCOME TAX OFFICER-V(3), LUCKNOW. VS SHRI YOGENDRA GIRI, B-4/4, VISHESH KHAND, GOMTI NAGAR, LUCKNOW. PAN:AGVPG2451J (RESPONDENT) (APPELLANT) SHRI DHARMENDRA KUMAR, C.A. APPELLANT BY SHRI AMIT NIGAM, D.R. RESPONDENT BY 07/09/2015 DATE OF HEARING 29 /10/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-I, LUCKNOW DATED 06/02/2015 FOR THE ASSESSME NT YEAR 1997-98. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS: 1. THAT LD. COMMISSIONER (APPEALS) FAILED TO CONSI DER THE FACTS AND SUBMISSION OF APPELLANT AND TAILED TO FOL LOW THE DIRECTION OF HON'BLE ITAT. 2. THAT APPELLANT PROVED IDENTITY AND CREDITWORTHIN ESS OF CONTRACTOR AND GENUINENESS OF TRANSACTION IN RESPEC T OF ADVANCES OF RS.273,250/- MADE TO HIM DURING ASSESSMENT YEAR 1996-97 BY FURNISHING VARIOUS DOCUMENTARY EVIDENCES INCLUDING PRODUCING THE CONTRACTOR IN PERSON BEFORE LD. ASSESSING OFFICER, HENCE, SUSTAINING THE ADDITION OF RS.273,250/- BY LD. LOWE R AUTHORITY IS ILLEGAL, AGAINST THE FACTS, AGAINST TH E DIRECTION OF HON'BLE ITAT AND WITHOUT JURISDICTION. 2 3. THAT LD. LOWER AUTHORITY FAILED TO CONSIDER VARI OUS EVIDENCES FURNISHED BY APPELLANT AND SUSTAINED THE ADDITION MADE BY LD. ASSESSING OFFICER FOR THE SOLE REASON THAT APPELLANT WAS UNABLE TO PRODUCE NEW EVIDENCE TO SUBSTANTIATE HIS CLAIM. 4. THAT IN INSTANT CASE, NOTICE U/S 148 WAS ISSUED BY AO WHO WAS NOT VESTED WITH JURISDICTION OVER THE APPEL LANT, SAME WAS PATENTLY ILLEGAL AND VOID AND, THUS, REASSESSMENT PROCEEDINGS INITIATED IN PURSUANCE OF SAID NOTICE WERE LIABLE TO BE SET ASIDE. 5. THAT IN AN ASSESSMENT COMPLETED U/S 143(3), R.W. S. 254, THE ASSESSING OFFICER SHOULD CONFINED HIMSELF TO TH E DIRECTIONS ISSUED BY THE TRIBUNAL. HE DOES NOT HAVE JURISDICTION TO GO BEYOND THE DIRECTIONS GIVEN BY T HE TRIBUNAL, SINCE, IN INSTANT CASE, LD. LOWER AUTHORI TY MADE ADDITION FOR THE SOLE REASON THAT APPELLANT WAS UNA BLE TO PRODUCE NEW EVIDENCE TO SUBSTANTIATE HIS CLAIM, WHI CH WAS AGAINST THE DIRECTION OF HON'BLE ITAT, HENCE TH E ASSESSMENT IS ILLEGAL AND WITHOUT JURISDICTION. 6. THAT LD. LOWER AUTHORITY ARBITRARILY AND WRONGLY UPHELD THE ADDITION OF RS.187,325.00 IN THE INCOME OF APPE LLANT, WHICH WAS THE AMOUNT OF EXPENSES AND INVESTMENTS INCURRED BY MRS. INDU GIRI, WITHOUT APPRECIATING TH E DOCUMENTARY EVIDENCES PRODUCED BEFORE THEM AND WITHOUT FOLLOWING THE DIRECTION OF HON'BLE I.T.A.T. 7. THAT LD. LOWER AUTHORITY ERRED TO UPHELD THE ADD ITIONS MADE BY LD. AO IN RESPECT OF INVESTMENTS INCURRED B Y MRS. INDU GIRI AND MR. SHIV MURTI GIRI IN THE HANDS OF APPELLANT, PARTICULARLY, WHEN THE SAME WAS NOT SUBJ ECT MATTER OF THE REASONS RECORDED FOR INITIATION OF ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF INCOME TAX ACT, 1961 IN CASE OF APPELLANT. 8. THAT SINCE LD ASSESSING OFFICER FAILED TO DISPOS E OF THE OBJECTION RAISED BY APPELLANT, HENCE, ASSESSMENT OR DER PASSED BY LD ASSESSING OFFICER IS ILLEGAL, AGAINST THE LAW OF NATURAL JUSTICE AND WITHOUT JURISDICTION. 3 3. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESS EE THAT THE TRIBUNAL ORDER IN THE FIRST ROUND IN ASSESSEES OWN CASE IS AVAILABLE ON PAGES 51 TO 71 OF THE PAPER BOOK. HE DRAWN OUR ATTENTION TO PARA 14 OF THIS TRIBUNAL ORDER AVAILABLE ON PAGE NO. 68 OF THE PAPER BOOK AND IT W AS SUBMITTED BY HIM THAT AS PER THIS PARA, THE TRIBUNAL HAS RESTORED TH E MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AFTER CONS IDERING ALL THE EVIDENCES FURNISHED BY THE ASSESSEE BEFORE HIM DURING ASSESSM ENT PROCEEDINGS OR BEFORE CIT(A). HE SUBMITTED THAT IN THE PRESENT AS SESSMENT ORDER, THE ASSESSING OFFICER HAS REPEATED THE SAME ADDITION ON SAME BASIS, WHICH WAS MADE BY THE ASSESSING OFFICER IN THE ORIGINAL ASSES SMENT WITHOUT CONSIDERING AND GIVING EFFECT TO THE TRIBUNAL DIREC TION. THEREAFTER, HE SUBMITTED THAT ON PAGE NO. 17 TO 21 OF THE PAPER BO OK IS THE COPY OF STATEMENT OF SHRI SHAILENDRA KUMAR TRIPATHI, PROPRI ETOR OF M/S LUCKY CONSTRUCTION IN WHICH HE HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT ADVANCE OF RS.2.74 LAC WAS RECEIVED BY HIM FROM THE PRESENT ASSESSEE DURING FEBRUARY AND MARCH 96 AND THEREFORE, SUCH AD VANCE GIVEN IN FINANCIAL YEAR 95-96 CANNOT BE CONSIDERED FOR ADDIT ION IN THE PRESENT YEAR. REGARDING SECOND ADDITION OF RS.1,87,325/-, HE DRAW N OUR ATTENTION TO PARA 22 OF THE TRIBUNAL ORDER IN FIRST ROUND AVAILABLE O N PAGES 70 AND 71 OF THE PAPER BOOK. THEREAFTER, HE DRAWN OUR ATTENTION TO PAGES 50 TO 54 OF THE SECOND PAPER BOOK CONTAINING THE ORDER OF LEARNED C IT(A) IN THE CASE OF SMT. INDU GIRI AND IN PARTICULAR OUR ATTENTION WAS DRAWN TO PARA 3.4 OF THIS ORDER OF CIT(A). 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ISSUE REGARDING FIRST ADDITION OF RS.2,73,250/- AS WELL A S THE SECOND ISSUE REGARDING ADDITION OF RS.1,87,325/- WERE DECIDED BY LEARNED CIT(A) AS PER 4 PARA 5 & 5.1 OF HIS ORDER, WHICH ARE REPRODUCED BEL OW FOR THE SAKE OF READY REFERENCE: 5. I HAVE CONSIDERED THE MATTER. ON PERUSAL OF PA GE NO. 9 OF THE ORIGINAL ASSESSMENT ORDER, I FIND THAT THE APPE LLANT AND HIS WIFE, MRS. INDU GIRI HAS MADE INVESTMENT OF RS.5,92 ,080/- FOR PURCHASE OF LAND AT AGRA AND BALIA DURING FY 1995-9 6. THEY HAVE ALSO CLAIMED TO HAVE GIVEN ADVANCES OF RS.4,23 ,250/- FOR PURCHASE OF PLOT AT VARANASI AND HOUSE AT AGRA DURI NG FY 1995- 96 WHICH WAS NOT ACCEPTED BY THE AO FOR A NUMBER OF REASONS AS DISCUSSED ABOVE. I FIND THAT THE APPELLANT HIS WIFE, MRS. INDU GIRI AND HIS FATHER, MR. SHIV MURTI GIRI HAVE NEVER FILED ANY RETURN EXCEPT IN RESPONSE TO NOTICES ISSUED U/S 147 OF THE ACT. APART FROM HIS WIFE AND FATHER THE APPELLANT HAS TH REE CHILDREN IN HIS FAMILY. SMT. INDU GIRI AND SH. SHIV MURTI GI RI DO NOT HAVE ANY INDEPENDENT SOURCE OF INCOME. FURTHER GROSS SALARY OF RS.62,970/-RECEIVED BY THE APPELLANT IS BARELY SUFF ICIENT TO MEET THE HOUSEHOLD EXPENSES. I ALSO FIND THAT THE AO ON THE BASIS OF CASH FLOW AT PAGE NO. 10 OF THE ASSESSMENT ORDER CO RRECTLY WORKED OUT THE SHORTFALL OF RS.4,60,545/- AS INCOME OF THE APPELLANT FROM THE UNDISCLOSED SOURCES. I FURTHER FIND THAT VIDE APPELLATE ORDER DATED 24.02.2006 IN THE CASE OF SMT . INDU GIRI FOR AY 1997-98 THE CIT(A) ON BASIS OF DETAILED DIS CUSSION HAS UPHELD THE FINDING OF THE AO THAT SMT. INDU GIRI HA S NO BUSINESS INCOME AND PROTECTIVE ASSESSMENT MADE IN H ER HAND WAS CANCELLED. THE APPELLANT HAS NOT FILED ANY AP PEAL AGAINST THE SAID ORDER AND THE APPELLATE ORDER PASSED BY TH E CIT(A) HAS BECOME FINAL. UNDER THE CIRCUMSTANCES, I FIND THAT AGITATING THE SAME ISSUE AGAIN THAT THE PAYMENTS OF RS.1,50,000/- , RS.34,200/- AND RS.3,125/- FOR PURCHASE OF PLOT AT VARANASI AND OTHER EXPENSES WERE MADE BY SMT. INDU GIRI OUT OF H ER INDEPENDENT SOURCE OF INCOME AND FUND HAS ABSOLUTEL Y NO BASIS. HENCE THIS ARGUMENT OF THE APPELLANT IS DISM ISSED. ON PERUSAL OF THE SAID DEED DATED 21.06.2016, I ALSO F IND THAT THE TOTAL COST OF THE PLOT AT VARANASI IS RS.1,84,200/- , OUT OF WHICH RS.1,60,000/- IS SALE CONSIDERATION AND THE BALANCE IS STAMP DUTY AND OTHER EXPENSES. ON PERUSAL OF BACK SIDE OF PAGE NO. 1 OF SALE DEED IT IS NOTED THAT THE PAYMENT OF RS.1,6 0,000/- WAS MADE TO SH. NAKHRU ON THE DATE OF REGISTRATION OF S ALE DEED I.E. 21.06.1996. CONSIDERING THE FACT THAT THE SALE D EED IS A REGISTERED DOCUMENTARY EVIDENCE, THE SUBMISSION MAD E BY THE APPELLANT THAT THE AMOUNT OF RS.1,50,000/- WAS PAID FOR 5 PURCHASE OF PLOT AT VARANASI ON 24.02.1996 HAS NO B ASIS. UNDER THE CIRCUMSTANCES IT IS HELD THAT WHILE COMPUTING T HE SHORTAGE OF CASH THE AMOUNTS OF RS.1,50,000/-, RS.34,200/- A ND RS.3,125/- HAVE BEEN CORRECTLY CONSIDERED AS INVEST MENT MADE BY THE APPELLANT DURING FY 1996-97. 5.1 AS REGARDS THE AMOUNT OF RS.2,73,250/- CLAIMED TO BE GIVEN AS ADVANCE TO MR. TRIPATHI, PROPRIETOR M/S. L UCKY CONSTRUCTIONS IN THE MONTHS OF FEBRUARY AND MARCH, 1996, I FIND THAT IN THE BILL DATED 27.08.1996 OF RS.3,18,0 66/- ISSUED BY M/S. LUCKY CONSTRUCTIONS THE PERIOD OF CONSTRUCTION IS MENTIONED AS 15.02.1996 TO 25.08.1996. IN THE VALUA TION REPORT DATED 23.11.2003 OF THE REGISTERED VALUER SUBMITTED BY THE APPELLANT IT IS MENTIONED THAT THE WORK OF GROUND F LOOR OF THE SAID HOUSE WAS COMPLETED IN THE YEAR 1996-97. IN TH E VALUATION REPORT IT IS ALSO MENTIONED THAT THE CONSTRUCTION W AS DONE DIRECTLY BY EMPLOYING LABOUR MEANING THEREBY THAT N O CONTRACTOR WAS HIRED FOR CONSTRUCTION OF THE PROPER TY. IN THE VALUATION REPORT THE REGISTERED VALUER HAS ALLOWED DEDUCTION OF 7.5% FOR PERSONAL SUPERVISION MEANING THEREBY AGAIN THAT NO CONTRACTOR WAS HIRED. I ALSO FIND THAT THE STATEMEN T OF SH. SHAILENDRA KUMAR TRIPATHI, PROPRIETOR M/S. LUCKY CO NSTRUCTIONS WAS RECORDED BY THE AO ON 24.01.2006. MR. TRIPATHI IS NOT MAINTAINING ANY BOOKS OF ACCOUNT WHICH COULD BE PRO DUCED AS EVIDENCE THAT THE AMOUNT OF RS.2,73,250/- WAS RECEI VED IN THE MONTHS OF FEBRUARY AND MARCH, 1996 IN CASH. IN THE STATEMENT RECORDED SH. SHAILENDRA TRIPATHI COULD NOT GIVE THE DETAILS OF DATES ON WHICH THE ADVANCES WERE RECEIVED BY HIM. I T IS ALSO NOTED THAT SH. SHAILENDRA TRIPATHI IS STAYING AT KA NPUR AND HO HAS NOT GIVEN ANY ADDRESS OF AGRA WHERE HE HAD STAY ED WHILE CONSTRUCTION OF THE RESIDENCE OF THE APPELLANT WAS CARRIED OUT. IT IS NOT PRACTICALLY POSSIBLE TO CONSTRUCT THE HOU SE AT AGRA WHILE RESIDING AT KANPUR. AS PER BILL OF M/S. LUCKY CONST RUCTION THE MATERIAL FOR CONSTRUCTION OF HOUSE WAS SUPPLIED BY THE CONTRACTOR BUT NO SUCH PURCHASE BILL WAS FURNISHED BY MR. TRIPATHI DURING HIS EXAMINATION. THE FACT OF GIVI NG ADVANCE DURING FINANCIAL YEAR 1995-96 WAS ALSO NOT DISCLOSE D BY THE APPELLANT BEFORE THE ADI(INV.), LUCKNOW DURING ENQU IRY MADE BY HIM. THE CERTIFICATE/RECEIPT ISSUED BY THE CONTR ACTOR IS DATED 26.09.2003 WHEREAS THE ADVANCES WERE GIVEN IN THE M ONTHS OF FEBRUARY AND MARCH, 1996. IT IS ALSO AGAINST HUMA N PROBABILITY THAT TOTAL INVESTMENT IN BUILDING CONSTRUCTION WHIC H WAS CARRIED OUT BY THE CONTRACTOR DURING FY 1996-97 WOULD BE GI VEN IN 6 ADVANCE TO HIM EVEN BEFORE STARTING THE WORK. IT IS ALSO NOTED THAT THE APPELLANT HAS NO CASH AVAILABILITY EVEN DU RING FY 1995- 96. THE CLAIM FOR INVESTMENTS OF RS.1,50,000, AND R S.2,73,250 HAVING BEEN MADE IN FY 1995-96 WAS MADE ONLY TO ESC APE TAXATION BY TAKING SHELTER OF LEGAL PROVISIONS. IT IS ALSO NOTED THAT THE CONSTRUCTION HAS BEEN CARRIED OUT BY THE A PPELLANT IN FY 1996-97 AND THERE IS NO PROPER EVIDENCE AND BONA FIDE EXPLANATION IN SUPPORT OF SOURCE OF INVESTMENT/ EXP ENDITURE. HENCE, AS PER PROVISIONS OF SECTION 69 AND 69C OF T HE ACT SUCH INVESTMENT/ EXPENDITURE IS DEEMED TO BE INCOME OF F Y 1996- 97. IT IS, THEREFORE, HELD THAT THE EXPLANATION FUR NISHED BY THE APPELLANT IS NOTHING BUT AN AFTERTHOUGHT. THE EVI DENCES HAVE BEEN CREATED WITH A VIEW TO EVADE THE TAXES, UNDER THE CIRCUMSTANCES AND CONSIDERING THE FACT THAT THE PLO T WAS PURCHASED IN THE MONTH OF JANUARY, 1996 AND CONSTRU CTION WAS CARRIED OUT DURING THE PERIOD 1996-97 ADDITION OF R S.4,60,575/- MADE BY THE AO IS CONFIRMED. 5.1 FROM THE ABOVE PARAS FROM THE ORDER OF LEARNED CIT(A), WE FIND THAT IT IS NOTED BY CIT(A) THAT THE FACT OF GIVING ADVAN CE DURING FINANCIAL YEAR 1995-96 WAS NOT DISCLOSED BY THE ASSESSEE BEFORE AD I(INV.), LUCKNOW DURING ENQUIRY MADE BY HIM. HE HAS ALSO NOTED THAT THE CERTIFICATE/RECEIPT ISSUED BY THE CONTRACTOR IS DATED 26.09.2003 WHEREA S THE ADVANCE IS SAID TO HAVE BEEN GIVEN IN THE MONTHS OF FEBRUARY AND MARCH , 1996. THEREAFTER, HE HAS NOTED THAT THIS IS AGAINST HUMAN PROBABILITY THAT TOTAL INVESTMENT IN BUILDING CONSTRUCTION WHICH WAS CARRIED OUT BY THE CONTRACTOR DURING FINANCIAL YEAR 1996-97 WOULD BE GIVEN IN ADVANCE TO HIM EVEN BEFORE STARTING THE WORK. WE FIND FORCE IN THIS OBSERVATI ON OF CIT(A) BECAUSE WE ARE ALSO OF THE VIEW THAT GIVING ALMOST ENTIRE AMOU NT IN ADVANCE TO A CONTRACTOR IS BEYOND HUMAN PROBABILITY AND UNDER TH ESE FACTS THAT THERE IS NO PROPER EVIDENCE AND BONAFIDE EXPLANATION IN SUPP ORT OF THE SOURCE OF INVESTMENT/EXPENDITURE, AS NOTED BY CIT(A), WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. REGARDING TH E SECOND ADDITION OF RS.1,87,325/- ALSO, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A). IN THE CASE OF WIFE OF THE ASSESSEE SMT. INDU GIRI, SA ME ADDITION WAS MADE ON 7 PROTECTIVE BASIS, WHICH WAS DELETED BY CIT(A) ON TH E BASIS THAT THE ADDITION IN THE HANDS OF THE PRESENT ASSESSEE I.E. SHRI YOGE NDRA GIRI HAS BEEN CONFIRMED BY HIM. HENCE, THE ORDER OF LEARNED CIT( A) IN THE CASE OF SMT. INDU GIRI IS NOT RENDERING ANY HELP TO THE PRESENT ASSESSEE. ON PAGE NO. 4 OF THE PAPER BOOK IS THE COPY OF CASH RECEIPT, SAID TO HAVE BEEN ISSUED BY SHRI NAKHROO TO THE EFFECT THAT THE AMOUNT OF RS.1. 50 LAC WAS RECEIVED BY HIM ON 24/02/96 FROM SMT. INDU GIRI. THE COPY OF S ALE DEED EXECUTED BY SHRI NAKHROO IS AVAILABLE ON PAGES 5 TO 13 OF THE P APER BOOK AND THE SIGNATURE OF SHRI NAKHROO IN THE CASH RECEIPT DATED 24/02/96 IS TOTALLY DIFFERENT WITH HIS SIGNATURE ON THE SALE DEED. THE SALE DEED IS DULY REGISTERED AND THEREFORE, THE CONFIRMATION/CASH REC EIPT ON PAGE NO. 4 OF THE PAPER BOOK IS NOT CONSIDERED AS A VALID EVIDENCE IN SUPPORT OF THIS CLAIM THAT THE AMOUNT WAS RECEIVED BY SHRI NAKHROO IN FEBRUARY 96 AND NOT IN THE PRESENT YEAR AT THE TIME OF EXECUTION OF SALE DEED IN JUNE 96. CONSIDERING THESE FACTS, WE FIND NO INFIRMITY IN THE ORDER OF C IT(A) ON ANY OF THE ISSUES RAISED BY THE ASSESSEE. HENCE, WE DECLINE TO INTER FERE IN HIS ORDER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED:29/10/2015 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR