Virendra Singh Shekahwat, ANOOPGARH V. ITO, SURATGARH

ITA 266/JODH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7815 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AND OTHER
• Assessee Lawyers: A Y ARE DIRECTED AGAINST
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence
• Section: 68; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA , JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 2 66 / JU/ 20 1 4 ASSESSMENT YEAR: 200 9 - 10 SHRI VIRENDRA SINGH SHEKAWAT VS. THE INCOME - TA X OFFICER WARD NO. 10, ANOOPGARH. SURATGARH PAN NO. A PNPS 3623 M (APPELLANT) (RESPONDENT) ITA NO. 3 52 / JU/20 1 4 ASSESSMENT YEAR: 200 8 - 0 9 THE INCOME - TAX OFFICER VS. SHRI VIRENDRA SINGH SHEKAWAT SURATGARH WARD NO. 10, ANOOPGARH. PAN NO. APNPS 3623 M (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI SURESH OJHA DEPARTMENT B Y : SHRI JAI SINGH , DR DATE OF H EARING : 26 . 0 8 .201 4 DATE OF PRONOUNCEMENT : 03 . 0 9 . 201 4 2 ORDER PER HARI OM MARATHA , J .M. TH E ABOVE CAPTIONED CROSS APPEAL S - ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE FOR A.Y. 2009 - 10 ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 12.3.2014 AND ARE BEING DECIDED BY THIS COMMON ORDER AS , APART FROM THE ASSESSEE BEING THE SAME IN BOTH THE APPEALS, THE ISSUES INVOLVED ARE ALSO IDENTICAL. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROFESSIONAL ADVOCATE, BEING INCOME - TAX CONSULTANT AND STUDY VISA CONSULTANT PRACTICING AT ANOOPGARH. DURING THE YEAR, THE ASSESSEE FILED RETURN OF INCOME DECLAR ING INCOME AT RS. 2,82,180/ - APART FROM DISCLOSING AGRICULTURAL INCOME OF RS. 3 LAKHS, AS AGAINST WHICH ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS. 24,25,728/ - VIDE ORDER DATED 23.12.2011 MADE U/S 144 OF THE INCOME - TAX ACT, 1961 ['THE ACT' FOR SHORT]. THE A.O ADDED PROFESSIONAL ACCOUNT INCOME OF RS. 2,51,0 4 3/ - AND SIMILARLY, IN THE ACCOUNT OF VISA CONSULTANCY AN AMOUNT OF RS. 3,05,670/ - . BOTH THESE ADDITIONS ARE ESTIMATED ONES. FURTHER, A SUM OF RS. 8,34,585/ - HAS BEEN ADDED O N 3 ACCOUNT OF UNEXPLAINED DEPOSITS AND RS. 4,52,300/ - HAS BEEN ADDED U/S 68 OF THE ACT. FURTHER ADDITION OF RS. 90,000/ - HAS BEEN MADE ON ACCOUNT OF LOW HOUSE HOLD EXPENSES. AGGRIEVED, THE ASSESSEE FILED APPEAL AND THE LD. CIT(A) HAS DELETED SOME OF THE A DDITIONS AND THEREFORE, BOTH THE PARTIES ARE NOW IN APPEAL BEFORE THE TRIBUNAL. 2.1 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE, LD. CIT(A) HAS ERRED IN : - (I) D ELETING ADDITION OF RS. 2,01,043/ - MADE ON ACCOUNT OF PROFESSIONAL RECEIPT. (II) DELETING ADDITION OF RS. 3,05,617/ - MADE ON ACCOUNT OF CONSULTANCY RECEIPT. (III) DELETING ADDITION OF RS. 8,34,585/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT. (IV) DELETING ADDITION OF RS. 4,82,300/ - MAD E ON ACCOUNT OF UNEXPLAINED CASH CREDIT. (V) D ELETING ADDITION OF RS. 2,00,000/ - MADE ON ACCOUNT OF AGRICULTURE EXPENDITURE. 4 (VI) DELETING ADDITION OF RS. 1,65,000/ - MADE ON ACCOUNT OF PROFESSIONAL RECEIPT. 2.2 THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS: 1. THAT THE ORDER PASSED BY THE COMMISSIONER OF INCOME - TAX (A ) IS ILLEGAL AND AGAINST THE LAW IN RESPECT OF SUSTAINING THE ADDITION. 2. THAT THE COM MISSIONER OF INCOME - TAX (A ) SHOULD NOT HAVE SUSTAINED A SUM OF RS. 50000.00 UNDER THE HEAD OF PRO FESSIONAL RECEIPT IN ABSENCE OF ANY CONTRARY EVIDENCE. 3. THAT THE ADDITION SUSTAINED BY THE COM MISSIONER OF INCOME - TAX (A ) BIKANER IS ARBITRARY AND AGAINST THE LAW. 4. THAT THE COM MISSIONER OF INCOME - TAX (A ) SHOULD NOT HAVE SUSTAINED A SUM OF RS. 25000. 00 UNDER THE HEAD OF HOUSE HOLD EXPENSES BECAUSE THE HOUSE HOLD EXPENSES IS QUITE REASONABLE LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT THE COM MISSIONER OF INCOME - TAX (A ) SHOULD HAVE FOLLOWED THE ORDER OF THE HON'BLE TRIBUNAL REFER R ED BEF ORE THE HIM. 6. WITHOUT PREJUDICE TO ABOVE THE ADDITION OF THE RS. 50000.00 SUSTAINED UNDER THE HEAD PROFESSIONAL RECEIPT AND RS. 25000.00 SUSTAINED UNDER THE HEAD HOUSE HOLD EXPENSES IS EXCESSIVE AND HIGH. 7. THAT THE CHARGING OF INTEREST IS ILLEGAL AND AGAINST THE LAW. 5 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. AFTER CONSIDERING THE RIVAL SUBMI SSIONS WE ARE CONVINCED THAT THE DELETIONS MADE BY THE LD. CIT(A) AND WHICH ARE THE SUBJECT MATTER OF THE REVENUES APPEAL ARE PERFECTLY IN ORDER. WE HAVE FOUND THAT THE ASSESSMENT WAS MADE U/S 144 OF THE ACT BECAUSE THE ASSESSEE MET WITH AN ACCIDENT AND WAS HOSPITALIZED IN KOTHARI HOSPITAL, WHICH FACT HAS NOT BEEN DENIED BY THE REVENUE. BEFORE THE LD. CIT( A), WRITTEN SUBMISSIONS WAS FILED WHICH WAS SENT TO THE A.O AND AFTER CONSIDERING THE REMAND REPORT OF THE A.O AND AFTER ADMITTING ADDITIONAL EVIDENCE AS PER RULES, THE LD. CIT(A) HAS CONSIDERED THE FOLLOWING ADDITIONS: 1. ENHANCEMENT OF PROFESSIONAL RECEIPT S RS.2,51,043 2. ENHANCEMENT OF STUDY CONSULTANCY RS.3,05,617 3. UNEXPLAINED INVESTMENT RS.8,34,585 4. UNEXPLAINED CASH DEPOSIT RS.4,82,300 5. ADDITION AGAINST AGRICULTURE EXPENSES RS.2,00,000 6. ENHANCEMENT IN HOUSEHOLD EXPENSES RS. 90,000 6 4. WE HAVE FOUND THAT THE ASSESSEE DID MAINTAIN HIS BOOKS OF ACCOUNT BUT COULD NOT PRODUCE THE SAME BEFORE THE A.O DUE TO THE UNFORTUNATE INCIDENT OF ACCIDENT WHICH HE MET. THE OBSERVATION OF THE A.O THAT HE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT IS FOUND TO BE NOT CORRECT. THE BALANCE SHEET AND RETURN OF INCOME TALLY IN RESPECT OF FIGURES MENTIONED IN THE BALANCE SHEET AND RETURN OF INCOME FILED. ON 6.11.2013, THE ASSESSEE APPEARED BEFORE THE A.O AND FILED HIS REPLY. THE A.O DIRECTED HIM TO PRODUCE THE BOOKS OF ACCOUNT WHICH COULD NOT BE PRODUCED DUE TO THE AFOREMENTIONED REASONS. BEFORE THE LD. CIT(A), THE BOOKS OF ACCOUNT WERE PRODUCED ALONGWITH SWORN AND DULY ATTESTED AFFIDAVIT CERTIFYING ASSESSEES ADMISSION IN HOSPITAL. IN THIS BACKGROUND, THE LD. CIT(A ) HAS ADMITTED THE ADDITIONAL EVIDENCE. FOR ANOTHER PERIOD DURING WHICH THE ASSESSEE WAS HOSPITALIZED IN SHARDA NURSING HOME FROM 6.11.2013 TO 18.11.2013, A MEDICAL CERTIFICATE HAS BEEN PRODUCED. 5. THE A.O HAS ENHANCED PROFESSIONAL RECEIPTS BY RS. 2,51, 043/ - BY ESTIMATING TOTAL SUCH RECEIPTS AT RS. 5 LAKHS AND SINCE THE ASSESSEE HAS DISCLOSED RECEIPTS FROM HIS 7 PROFESSION AT RS. 2,48,957/ - , REMAINING AMOUNT OF RS. 2,51,043/ - HAS BEEN ADDED. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT T HE ESTIMATION MADE BY THE A.O IS UNFOUNDED AND BASED ON NO REASON. THE SIMPLE REASON THAT THE ASSESSEE IS A REPUTED ADVOCATE, PRACTICING AT ANOOPGARH CANNOT BE ANY REASON FOR MAKING SUCH WILD ESTIMATIONS. ACCORDINGLY, THE ENHANCED ESTIMATED PROFESSIONAL RECEIPTS TO THE EXTENT OF RS. 2,51,043/ - HAS BEEN CORRECTLY DELETED. SIMILARLY, IN CASE ANY ADDITION IS MADE IN RESPECT OF STUDY VISA CONSULTANCY. THE ASSESSEE HAS TAKEN A FRANCHISEE OF A COMPANY HAVING AGENCY FOR ADMISSION ABROAD. AS PER AGREEMENT, 10% OF TUITION FEES IS PAYABLE TO THIS ASSESSEE. NO CHARGES FOR VISA FEES, E - VISA, ETC . IS CHARGEABLE BY THE ASSESSEE. THE A.O HAS ADDED TOTAL AMOUNT RECEIVED AND DEPOSITED IN HIS BANK ACCOUNT TO BE FURTHER FORWARDED TO THE INSTITUTIONS ABROAD THROUGH HIS P RINCIPAL COMPANY FROM WHOM HE HA S TAKEN FRANCHISEE. THE A.O AHS ESTIMATED ASSESSEES INCOME IN THIS ACCOUNT WITHOUT ANY BASIS WHICH HAS BEEN DEL E TED BY THE LD. CIT(A). WE ARE ALSO IN AGREEMENT WITH THE FINDING OF THE LD. CIT(A) AND HO L D 8 THAT THE IMPUGNED ADDITION IS BASED ON ADHOC ESTIMATION BASED ON NO LOGIC. 7. THE FACTS OF THE THIRD GROUND OF REVENUES APPEAL ARE THA T FROM THE DEBIT AND CREDIT ENTRIES FOUND IN ASSESSEES BANK ACCOUNT ON 28.8.2008, THE A.O HAS ADDED RS. 8,34,585/ . BEFORE THE LD. CIT(A) , COPY OF BANK ACCOUNT IN SBBJ WAS PRODUCED AND IN THIS BANK ACCOUNT, AMOUNT RECEIVED BY THE ASSESSEE FROM STUDENTS FOR THE PURPOSE OF REMITTANCE TO THE FOREIGN INSTIT UT IONS WHERE STUDENTS WANT TO GET ADMISSION ARE FOUND DEPOSITED. THE REMITTANCE OF THE A MOUNT TO FOREIGN INSTITUTIONS WAS ALSO ESTABLISHED AND THE ENTRIES IN THIS PASS BOOK HAS BEEN FULLY EXPLAINED. THE ASSESSEE RECEIVED ONLY COMMISSION ON SUCH RECEIPT OF FEES AND NOT THE ENTIRE AMOUNT GOES TO HIS POCKET. ACCORDINGLY, DELETION OF RS. 8,34,5 85/ - IS ALSO FOUND TO BE CORRECTLY DELETED. 8. GROUND NO. 4 OF REVENUES APPEAL IN RESPECT OF DELETION OF ADDITION OF RS. 4,82,300/ - MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN ASSESSEES ACCOUNTS IN SBBJ AND ICICI, 9 ANOOPGARH CERTAIN DEPOSITS WERE FOUND , DETAILS OF WHICH IS AS UNDER: SBBJ 23.05.2008 25000 SBBJ 20.03.2009 89000 ICICI 21.04.2008 38300 ICICI 24.08.2008 330000 482300 9. BEFORE THE LD. CIT(A), THE ASSESSEE EXPLAINED EACH DEPOSIT AFTER MENTIONING NAME OF THE STUDENT A LONGWITH COPY OF PASSPORT AND PROOF OF REMITTANCE OF FEES BELONGING TO THAT STUDENT REMITTED TO FOREIGN INSTITUTION. THUS THE AMOUNT CREDITED IN THESE BANKS STAND FULLY EXPLAINED. MOREOVER, SUCH ADDITION CANNOT BE MADE U/S 68 OR U/S 69 OF THE ACT BECAUSE A BANK PASS BOOK IS NOT A BOOKS OF ACCOUNT. ACCORDINGLY, THE IMPUGNED ADDITION IS ALSO QUITE IN ORDER. 10. NEXT GROUND IS REGARDING DELETION OF ADDITION OF RS. 2 LAKHS MADE ON ACCOUNT OF AGRICULTURE EXPENDITURE AND REASON FOR THIS ADDITION IS THAT THE A SSESSEE HAS SHOWN NET INCOME OF RS. 3 LAKHS FROM HIS AGRICULTURAL ACTIVITIES BUT HAS NOT DISCLOSED THE RELATED EXPENSES. ACCORDINGLY, ON ESTIMATION 10 BASIS, THIS AMOUNT HAS BEEN ADDED WHICH HAS BEEN DELETED BY THE LD. CIT(A) BY HOLDING TO BE A SHEER BASELES S ESTIMATION. 11. AFTER HEARING BOTH THE SIDES, WE FALL IN LINE WITH THE FINDING OF THE LD. CIT(A) AND CONFIRM THE IMPUGNED DELETION. 12. LAST GROUND OF THIS APPEAL IS REGARDING DELETION OF RS. 1,65,000/ - MADE ON ACCOUNT OF PROFESSIONAL RECEIPTS. 13. T HIS GROUND HAS BEEN DISPOSED OF IN LINE WITH GROUND NO. 1 OF THIS APPEAL. ACCORDINGLY, GROUND RAISED BY THE REVENUE IN THIS APPEAL STANDS DISMISSED. 14. IN ASSESSEES APPEAL, ONLY TWO EFFECTIVE GROUNDS HAVE BEEN RAISED ONE IN RELATION TO SUSTENANCE OF ADDITION OF RS. 50,000/ - IN THE ACCOUNT OF PROFESSIONAL RECEIPT AND THE OTHER ONE IN THE ACCOUNT OF HOUSE HOLD WITHDRAWALS OF RS. 25,000/ - . BOTH THESE SUSTAINED ADDITIONS ARE FOUND TO BE BASELESS AS WE HAVE FOUND THE OTHER ADDITIONS MADE IN ASSESSEES HAN DS. ACCORDINGLY, WE CANNOT UPHOLD THE IMPUGNED ADDITIONS AND DELETE THEM BEING BASELESS AND WITHOUT ANY REASON. 11 15. TO SUM UP, THE APPEAL OF THE ASSESSEE IN ITA NO. 266 /JU/201 4 FOR A.Y. 200 9 - 1 0 STANDS ALLOWED AND THE APPEAL OF THE REVENUE IN ITA NO. 352 /J U/201 4 FOR A.Y. 2009 - 10 STANDS DISMISSED. ORDER PRON OUNCED IN THE COURT ON 03 RD SEPTEMBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEM B ER DATED : 03 RD SEPTEMBER, 201 4 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR