ITO Ward-2 (3), New Delhi V. Dr. Shashank Tyagi, New Delhi

ITA 2789/DEL/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5771 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 29-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 27-08-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B K RAO
• Assessee Lawyers: V K GOEL
• Keywords: Unexplained investment; Charitable institution; Opportunity of being heard

Judgement Text

ITA NO. 2789/DEL/2008 A.Y. 2004-05 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 2789/DEL/2008 A.Y. : 2004-05 ITO, WARD 2(3), VS. DR. SHASHANK TYGAI, MEERUT (UP) A-34, CHANAKYA PURI, SHASTRI NAGAR, MEERUT (PAN: AAYPP8606K) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.K. GOEL, ADV. DEPARTMENT BY : SHRI B.K. RAO, SR. DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 27.6.2008 FOR THE ASSESSMENT YEAR 2004-05. 2. THE ISSUES RAISED READ AS UNDER:- WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 6,63,831/ - ON ACCOUNT OF UNPROVED INVESTMENT. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT DIFFERENT EXPLANATI ONS OF THE SOURCES OF ITA NO. 2789/DEL/2008 A.Y. 2004-05 2 INVESTMENT OF RS. 7,07,500/- WAS TENDERED BY THE AS SESSEE AT DIFFERENT TIMES WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN IGNORING THE EVIDENCE BROUGHT ON RECORD BY THE ITO TO NEGATE THE POSSIBILITY THAT THE SALE PROCEEDS OF LA ND SOLD BY THE ASSESSEE 5 YEARS AGO WERE HELD BY THE ASSESSEES COUSIN IN THE FORM OF IVPS. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AS THE LD. CIT(A) HAS ERRED IN HOLDING THAT AGRICULTURAL INCOME OF LA ST FIVE YEARS WAS RECEIVED IN CASH BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) IN HOLDING THAT THE ASSESSEE HAD PAID A SUM OF RS. 1,1 2,500/- TO THE UNIVERSITY OUT OF EXAMINATION FEES COLLECTED BY HIM , IGNORING THE FACT THAT NO EVIDENCE IN THIS RESPECT HAD BEEN FILED BEF ORE THE ITO. 3. IN THIS CASE THE ASSESSEE IS AN INDIVIDUAL. D URING THE RELEVANT PERIOD HE WAS LECTURER IN DR. SATAYA PRAKASH MEMORIAL CHAR ITABLE TRUST. THE CASE WAS REOPENED IN VIEW OF THE INFORMATION THAT HE HAD MAD E UNEXPLAINED INVESTMENT TO THE TUNE OF RS. 7,07,500/- IN DR. SATAYA PRAKASH ME MORIAL CHARITABLE TRUST. THE ASSESSEE EXPLAINED THAT SOURCE OF INVESTMENT WAS RS . 583800/- AS RENT RECEIVED FROM HIS BROTHER AND THE REST INVESTMENT OF RS. 69 420/- FROM CONTRIBUTION FROM HIS WIFE AND MOTHER. LATER ON IN THE ASSESSMENT PROCEEDINGS THE ASSESSEE ITA NO. 2789/DEL/2008 A.Y. 2004-05 3 SUBMITTED A LETTER EXPLAINING THAT ASSESSEE HAD SOL D AGRICULTURAL LAND FOR RS. 4,80,000/- ON 25.2.1999 AND THE SALES PROCEEDS WE RE GIVEN TO HIS BROTHER SHRI INDU TYAGI, WHO PURCHASED THE IVP FROM A NEEDY PERS ON HAVING MATURITY VALUE AT RS. 5,00,000/- . HENCE THE INVESTMENT OF RS. 7075 00/- IN THE SAID CHARITABLE TRUST WAS FROM IVP PAYMENT PLUS SALARY SAVINGS PLUS SAVIN GS ACCOUNT. AO DID NOT ACCEPT THE EXPLANATION REGARDING THE AMOUNT RECEIVED FROM ENCASHMENT OF IVP AND HELD THAT SHRI INDU TYAGI CONFIRMED THAT CASH AMOUNTS W ERE GIVEN BY SHRI INDU TYAGI TO THE ASSESSEE AS RENT OF AGRICULTURAL LAND. HENCE HE ADDED RS. 5.10 LACS. AO FURTHER ADDED THE BALANCE OF RS. 109280/- SHOWN BY THE ASSESSEE IN HIS CAPITAL ACCOUNT AS ON 31.3.2004 BEING AGRICULTURAL RENT D UE TO BE RECEIVED FROM SHRI INDU TYAGI. AO OBSERVED THAT ASSESSEE HIMSELF HAS SHOWN AGRICULTURAL INCOME FROM EARLIER YEARS. HENCE AO ADDED RS. 109280/. AO FURTHER OBSERVED THAT THERE WERE FURTHER CASH DEPOSITS IN ASSESSEES BAN K ACCOUNT, WHICH THE ASSESSEE EXPLAINED THAT HE HAS RECEIVED THE SAME ON ACCOU NT OF FEE PAID BY THE STUDENTS OR MBBS, BDS, BST IN CASH. AS ASSESSEE HAD BEEN AP POINTED CONTROLLER OF EXAMINATION AND HE HAD DEPOSITED THESE CASH DEPOSIT S IN BANK FOR SAFETY PURPOSE AND THEREAFTER ASSESSEE HAD REIMBURSED THESE AMOU NTS TO DIFFERENT EXAMINERS. AO HELD THAT ASSESSEE HAS RECEIVED TOTAL FEE OF RS. 1,49,000/- OUT OF WHICH THE ITA NO. 2789/DEL/2008 A.Y. 2004-05 4 ASSESSEE HAD PAID ONLY RS. 37,949/- AS REMUNERATION AND THUS RS. 1,11,051/- WAS UNEXPLAINED DEPOSITS AND WAS ADDED BACK. 4. UPON ASSESSEES APPEAL LD. CIT(A) HELD THAT OUT OF CASH DEPOSITS OF RS. 5.10 LACS, CASH DEPOSITS TO THE EXTENT OF RS. 4.80 LACS ARE EXPLAINED BASICALLY BY THE FACT OF SALE OF AGRICULTURAL LAND. HOWEVER, RS. 30,000/ - WAS HELD TO BE INTEREST EARNED ON INVESTMENT OF THIS SALE PROCEEDS, SO THIS WAS TO BE TAXED. 4.1 REGARDING THE ANOTHER ISSUE OF RS. 1,09,280/- T HE CIT(A) HELD THAT THE SAME WAS SATISFACTORILY EXPLAINED IN HIS VIEW. ASSESSE E HAD EARNED TOTAL AGRICULTURAL INCOME FOR THE A.Y. 1999-2000 TO 2003-04 TOTALING T O RS. 1,34,280/- AND THE ASSESSEE HAD EXPLAINED THAT OUT OF THE TOTAL AGRICU LTURAL INCOME THE BALANCE PENDING WITH SHRI INDU TYAGI AS ON 1.4.2003 WAS RS. 1,09,280/- AND THE SAME WAS RECEIVED DURING THE PREVIOUS YEAR AND UNDER CONSIDE RATION AND WAS DEPOSITED IN THE ASSESSEES BANK ACCOUNT. HENCE, LD. CTI(A) DE LETED THE ADDITION OF RS. 1,09,280/-. 4.2 AS REGARDS THE LAST ISSUE OF CASH DEPOSITS IN B ANK ACCOUNT IS CONCERNED, LD. CIT(A) HELD THAT THERE WAS A AUTHORITY LETTER OF S UBHARATI KKB CHARITABLE TRUST WHEREIN THE ASSESSEES ACTIVITY OF CONDUCTION OF EXAMINATION WAS THERE. LD. CIT(A) FURTHER REFERRED TO THE DOCUMENTARY EVIDENC E TO THE FACT THAT THE AMOUNTS ITA NO. 2789/DEL/2008 A.Y. 2004-05 5 WERE REMITTED TO THE UNIVERSITY AND TOTAL SUCH REMI TTANCE CAME TO OF RS. 1,12,500/-. LD. CIT(A) HELD THAT OUT OF THE T OTAL FEE OF RS. 1,49,000/- AS POINTED OUT BY THE AO ONLY RS. 112500/- WAS REMIT TED TO THE UNIVERSITY AND THE BALANCE OF RS. 36500/- WAS ADDED AS INCOME LIABLE TO TAX. HENCE HE DIRECTED THE ADDITION OF RS. 1,11,051/- ON ACCOUNT OF UNEXPL AINED DEPOSITS BE REPLACED BY THE ADDITION OF RS. 36500/-. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT THE ENTIRE ASSESSEES EXPLANATION ON SALE OF AGRIC ULTURAL LAND AND PAYMENT OF PROCEEDS TO HIS BROTHER SHRI INDU TYAGI; PURCHASE OF IVP BY SHRI INDU TYAGI; PAYMENT OF AGRICULTURAL LAND RENT BY SHRI INDU TYA GI RELATES TO HIS BROTHER SHRI INDU TUAGI. WE DO NOT FIND THE DETAIL OF T HE SUBMISSIONS, CONFIRMATIONS ETC. OBTAINED FROM SHRI INDU TYAGI IN THIS REGARD. MOR EOVER THERE IS NO EVIDENCE REGARDING THE SALE OF AGRICULTURAL LAND AND PURCHA SE/SALE OF IVP. FURTHER LD. CIT(A) HAS MENTIONED ABOUT THE EVIDENCE OF REMITTA NCES TO THE UNIVERSITY AMOUNTING TO RS. 112500/-. THIS ALSO NEEDS TO BE EXAMINED AS TO ITS VERACITY. ACCORDINGLY, IN THE INTEREST OF JUSTICE, IN OUR CONS IDERED OPINION, THIS MATTER NEEDS TO BE REMITTED TO THE FILES OF THE AO TO CONSIDER T HE SAME AFRESH. ACCORDINGLY, ITA NO. 2789/DEL/2008 A.Y. 2004-05 6 ISSUES RAISED STAND REMITTED TO THE FILES OF THE AO TO CONSIDER THE SAME AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN A DEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE REVENUES APPEAL IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/03/2010. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 29/03/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES