Kumad Gupta, Jammu V. The Income Tax Officer, Jammu

ITA 279/ASR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5591 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Deemed to accrue or arise in india; Additional evidence
• Section: 68; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER I.T.A NO.279(ASR)/2016 ASSESSMENT YEAR:2006-07 KUMUD GUPTA, 242, KANJI HOUSE, OPP. GURUDWAR, JAMMU. PAN: - VS. INCOME TAX OFFICER, WARD-2(2), JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE. RESPONDENT BY: SH. RAHUL DHAWAN (DR.) DATE OF HEARING: 20.04.2017 DATE OF PRONO UNCEMENT: 16 TH MAY 2017 ORDER PER DIVA SINGH,JM: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 22.01.2016 OF CIT(A)-JAMM U, PERTAINING TO 2006-07 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS. 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) AND THE ASSESSING OFFICER HAVE ERRED ON FACTS AND IN LAW IN PASSING THE IMPUG NED ORDER WHICH IS CONTRARY TO LAW, EQUITY AND JUSTICE AND FACTS & MATERIAL ON REC ORD, ARBITRARY, BASED ON CONJECTURES AND SURMISES. 2. THE APPELLANT DENIES HIS LIABILITY TO TAX AS DET ERMINED AND COMPUTED AND THE MANNER IN WHICH IT HAS BEEN SO DETERMINED OR COMPUT ED. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED ON FACT AND IN LAW IN UPHOLDING THE DECISION OF THE LEARNED ASSESS ING OFFICER FOR MAKING THE IMPUGNED ADDITION IN TOTAL INCOME OF THE ASSESSEE O N THE FOLLOWING: A) RS.2,75,000.00 BEING ADVANCE GIVEN TO MESSRS TRIKUT A BOTTLERS BY CONSIDERING THE SAME AS DEEMED INCOME IN TERMS OF SECTION 69 OF THE INCOME TAX ACT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED ON FACT AND IN LAW IN NOT DELETING THE ADDITION OF RS. 24,000.00 M ADE UNDER SECTION 68 OF THE INCOME TAX ACT, BEING THE TAX FREE AGRICULTURE INCO ME EARNED BY THE ASSESSEE. 5. THE APPELLANT CRAVES LEAVES TO AND PERMISSION TO ADD, TO ALTER OF DELETE ANY OF THE GROUNDS OF APPEAL AT ANY TIME UPTO THE FINAL DE CISION OF THE APPEAL. 6. THE APPELLANT CRAVES LEAVE AND SANCTION TO FI LE ADDITIONAL EVIDENCE, IF SO REQUIRED FOR PROPER PROSECUTION OF THE CASE, BASED ON FACTS AND CIRCUMSTANCES, WHICH HAS NOT BEEN OR COULD NOT BE EDUCED OR FILED BEFORE LOWER AUTHORITIES EITHER BECAUSE PROPER AND SUFFICIENT OPPORTUNITY / TIME WA S NOT PROVIDED OR BECAUSE IT WAS NOT SOLICITED OR ITS NEED WAS NOT PROVIDED OR B ECAUSE IT WAS NOT SOLICITED OR ITS NEED WAS APPRECIATED. 2. AT THE TIME OF HEARING AN ADJOURNMENT APPLICATION WAS PLACED ON BEHALF OF THE ASSESSEE. IN VIEW OF THE FACT THAT THE APPEA L COULD BE DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD IT WAS CONSIDERED ITA NO.279 (ASR)/2016 ASST. YEAR: 2006-07 2 APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX-PAR TE QUA THE ASSESSEE APPELLANT ON MERITS AFTER HEARING THE LD. SR. DR. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSE E DECLARED AN INCOME OF RS.98,251/- AS PER RETURN FILED ON 31.03.2007. SUB SEQUENTLY, THE ASSESSMENT WAS REOPENED IN VIEW OF THE FACT THAT T HE ASSESSEE WAS FOUND TO HAVE ADVANCED UNSECURED LOAN OF RS. 2,75,000/- T O M/S TRIKUTA BOTTLERS. ACCORDINGLY, AFTER ISSUANCE OF NOTICE UNDER SECTIO N 143(2) ETC., THE ASSESSMENT WAS CONCLUDED UNDER SECTION 144 AS THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER LEADING TO THE MAKIN G OF THE ADDITION UNDER CHALLENGE IN GROUND NOS. 3 AND 4 IN THE PRE SENT PROCEEDINGS. THE ASSESSEE WAS UNSUCCESSFUL IN ITS APPEA L BEFORE THE LD. CIT(APPEALS) ALSO. AGGRIEVED THE PRESENT APPEAL HAS BEEN FILED. 4. ADDRESSING THE REASONS FOR NON APPEARANCE BEFORE TH E ASSESSING OFFICER, THE ASSESSEE, IS FOUND TO HAVE MADE THE FOLLOWING SUB MISSIONS BEFORE THE LD. CIT(APPEALS) : 'THE ASSESSES LIVES IN HOUSE NO. 2 52 K ANJI HOUSE OPPOSITE GURUDWARA, JAMMU. THIS HOUSE IS ON THE FIRST FLOOR AN D THERE ARE SHOPS ON THE GROUND FLOOR. SINCE T HE ASSESSEE HAS GOT ANCESTRAL PROPERTY IN BHADARWAH (DIST . DODA), THE ASSESSEE GOES TO BHADARVAH IN SUMMER AND MA NY A TIMES ASSESSEE'S LETTERS ARE RECEIVED BY ME SHOP-KEEPE RS WITH AN INTENTION TO PASS IT ON TO THE ASSESSEE ON HIS R ETURN FROM BHADARWAH WHICH IS NORMALLY IN OCTOBER END. SUCH LETTERS MAY OR MAY NOT BE ACTUALLY DELIVERED TO THE ASSESSE E. IN THE YEAR UNDER REFERENCE ALSO THE ASSESSEE WAS IN BHADRWAH A ND RETURNED IN OCTOBER END AND AS SUCH THE NOTICES WER E NOT RECEIVED BY HIM. THE NOTICE FOR THE ASSESSMENT PROC EEDINGS HAVE BEEN SENT ON THIS ADDRESS ONLY.' 4.1 ACCORDINGLY, QUOTING THE ABOVE REASONS THE ASSESSE E AS PER RECORD MADE A PRAYER FOR ADMISSION OF FRESH EVIDENCE BEFORE THE C IT(A). RELYING ON THE SAME, IT WAS SUBMITTED THAT THE LOAN WAS ADVANCE D FROM OWN SAVINGS MADE IN HER SAVING BANK. THE SOURCE OF DEPOSITS A S PER RECORD IS CLAIMED TO BE FROM TUITION ETC. AND AGRICULTURAL INCOME FROM 11 KANALS OF LANDS IN BHADARWAH IN DODA DISTRICT STATED TO BE ANCESTRAL LAND. COPIES OF THE LAND DOCUMENTS REFLECTING THE OWNERSH IP OF THE LAND AND COPIES OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT FOR FINANCIAL YEAR 2004-05, 2005-06 & 2006-07 ARE FOUND TO HAVE BEEN RELIE D UPON. THESE ARGUMENTS ARE FOUND RECORDED AT PAGE 6 OF THE IMPUGNED ORDER. IT IS FURTHER SEEN THAT THE ASSESSEE HAS ALSO ARGUED T HAT SIMILAR INCOME HAS BEEN DISCLOSED IN THE EARLIER YEARS ALSO. THE FRESH EV IDENCE IT IS ITA NO.279 (ASR)/2016 ASST. YEAR: 2006-07 3 SEEN WAS REMANDED TO THE ASSESSING OFFICER BY THE LD. CIT(APPEALS). TH E ASSESSING OFFICER, ON GOING THROUGH THE EVIDENCES OBJECTED TO THE ALLOWABILITY OF ASSESSEES CLAIM HOLDING THAT THE ASSESSES HAS NOW TRIED TO DEMONSTRATE THAT THE APPARENT IS REAL BUT ACTUALLY THE FACT IS OTHERWISE. HENCE, THE STORY PUT FORTH NOW IS NOTHING BUT TO HOO DWINK WHAT HAS BEEN UPHELD BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT. SIMILARLY, THE CLAIM OF AGRICULTURAL INCOME WAS ALSO OBJECTED TO ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY PROOF OF SALE OF AGRICULTURAL PRODUCT TO ANY DEALER NOR HAS SHE PROV IDED THE PARTICULAR OF THE CROPS GROWN WHICH YIELDED HER AGRICULTURE IN COME. HE HAS SUBMITTED IN HIS REMAND REPORT THAT MERELY HOLDING OF LAND IS NOT SUFFICIENT TO PROVE THAT IT HAS YIELDED INCOME. 4.2 CONSIDERING THE REMAND REPORT THE ADDITION MADE BY T HE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT(APPEALS). AGGRIE VED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. THE LD. SR.DR PLACED RELIANCE ON THE IMPUGNED ORDER. 6. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE 36 PAGED ORDER HAS BEEN PASSED BY THE LD. CIT(A) RELYING UPON T HE REMAND REPORT QUOTED VERBATIM AND THEN CONSIDERING VARIOUS LEGAL PROPOS ITIONS. HOWEVER ON GOING THROUGH THE ENTIRE ORDER I FIND THAT T HE LD. CIT(A) HAS NOT CARED TO INDEPENDENTLY ADDRESS THE SPECIFIC FACTS O F THE PRESENT CASE. AS PER RECORD, THE ASSESSEE HAS BEEN A TAX PAYER IF NO T FOR MORE YEARS THAN AT LEAST IN THE IMMEDIATELY PRECEDING ASSESSMENT Y EAR AND RETURN OF INCOME FROM THE VERY SAME SOURCES IS STATED TO HAVE BE EN FILED AND RELIED UPON. THIS CLAIM THOUGH HAS NOT BEEN UPSET BY THE LD. C IT(APPEALS) HOWEVER HE HAS ALSO FAILED TO CONSIDER THE SAME. THE ASSE SSEE IT IS NOTED HAS EXPLAINED ADEQUATELY THE REASONS FOR NON-APPEARANC E BEFORE THE ASSESSING OFFICER. ALTHOUGH THE LD. CIT(APPEALS) DOES NOT CON CLUDE THAT THE FRESH EVIDENCES ARE ADMITTED DESPITE THE OBJECTIONS OF THE ASSESSING OFFICER. THE FACT THAT REFERENCE IS REPEATEDLY MADE TO THE OBJECTIONS OF THE ASSESSING OFFICER, ONE CAN SAFELY PRESUME THAT THE EVIDENC ES ARE ADMITTED. HOWEVER, AFTER ADMITTING THE EVIDENCES, THE LD. CI T(APPEALS) WAS NECESSARILY REQUIRED TO GIVE HIS OWN INDEPENDENT FINDIN GS ON THE FACTS ON RECORD AND NOT REPEAT THE OBJECTIONS OF THE A SSESSING OFFICER. IT IS SEEN THAT THE ASSESSEE, IN THE YEAR UNDER CONSIDERAT ION HAS RETURNED AN INCOME OF RS. 98,251/-. A PERUSAL OF THE ASSESSMENT O RDER FURTHER ITA NO.279 (ASR)/2016 ASST. YEAR: 2006-07 4 SHOWS THAT AS FOUND MENTIONED IN COLUMN NO. 9 ON THE FIRST PAGE OF THE ASSESSMENT ORDER ITSELF IN THE COLUMN OF NATURE OF BUSINE SS OF THE TAX PAYER, THE AO HAS NOTED RENTAL AND TUITION INCOME. AS PER RECORD, THE ASSESSEE HAS EXPLAINED THAT THE SOURCE OF ADVANCE IS A LSO FROM TUITION FEE EARNED BY HER. THUS, IN THESE PECULIAR FACTS AND CIRCUMS TANCES, THE FACT THAT THERE WERE CASH DEPOSITS IN THE SAVING BANK ACCOUNT FROM W HICH THE LOAN HAS BEEN GIVEN, CANNOT BE SAID TO BE A STORY PUT FORTH TO HOODWINK THE DEPARTMENT AND THAT APPARENT IS NOT REAL . IT IS ALSO SEEN THAT THE ASSESSEE HAS CLAIMED AGRICULTURAL INCOME FROM 11 KANALS OF A NCESTRAL LANDS. THE SAID CLAIM HAS BEEN DISMISSED BY THE ASSESSING OFFICER IN THE REMAND REPORT ON THE REASONING THAT THE OWNERSHIP OF T HE LAND BY ITSELF IS NOT SUFFICIENT TO CONCLUDE THAT AGRICULTURAL INCOME HAS B EEN EARNED. IT IS NOT THE CORRECTNESS OF THE SAID CONCLUSION WHICH BEC OMES QUESTIONABLE. WHAT IS PAINFUL TO NOTE IS THAT WHAT STOPPED THE TAX AUTHORITIES TO THEREAFTER APPRISE THE TAX PAYER AND DIRE CT THE PRODUCTION OF EVIDENCE, IF ANY TO SHOW WHETHER THE SAID LAND, AS PER L AND REVENUE RECORDS, WAS SUBJECTED TO ANY AGRICULTURE ACTIVITY IN THE SPECIFIC PERIOD. THE REQUIREMENT OF SUPPORTING FACTS AND LAW ARE PRESUME D TO BE WELL KNOWN TO THE TAX AUTHORITIES AND CANNOT BE SAID TO BE AT PAR WITH THE KNOWLEDGE AND EXPERIENCE OF THE TAX PAYER. IT WOULD HAVE BEEN JUST AND APPROPRIATE TO THEN DIRECT THE ASSESSEE TO FILE WHATEVER EVIDENCE IT HAD IN SUPPORT OF ITS CLAIM, SPECIALLY AS DURING THE ASSESSMENT P ROCEEDINGS, THE ASSESSEE COULD NOT PARTICIPATE IN THE PROCEEDINGS. 6.1 ACCORDINGLY, IN VIEW OF THE FACT THAT ADMITTEDLY JUSTICE HAS NOT BEEN DONE, THE SR.DR WAS REQUIRED TO ADDRESS WHICH FORUM, THE ISSUE SHOULD BE RESTORED TO. THE LD. SR.DR STATED THAT THOUGH HE OBJ ECTS TO THE REMAND, HOWEVER IN CASE IT IS STILL SO DIRECTED, THEN IT MAY BE RESTORED TO THE ASSESSING OFFICER AS FRESH EVIDENCES EVIDENTLY WILL NEED TO BE SEEN BY HIM. 6.2 I FIND ON CONSIDERING THE SUBMISSIONS THAT WHERE ON FACTS THE SOURCE OF RENTAL AND TUITION INCOME HAS NOT BEEN DOUBTED BY THE TAX AUTHORITIES THE ONLY ISSUE WHICH REMAINS FOR CONSIDERATION IS THE CLAIM OF AGRICULTURE INCOME. THUS PART OF THE SUM ADVANCED CAN BE SAID TO HAVE BEEN ADVANCED FROM TUITION AND RENTAL INCOME I.E; THE REG ULAR SOURCE OF INCOME OVER THE YEARS. IN REGARD TO THE AGRICULTURAL INCO ME THE TAX PAYER FIRST SHALL BE CALLED UPON TO DEMONSTRATE WHETHER THERE W AS ANY AGRICULTURE ACTIVITY ON THE SAID LAND AT THE RELEVANT POINT OF TIME. ITA NO.279 (ASR)/2016 ASST. YEAR: 2006-07 5 OPPORTUNITY TO DO SO SHALL BE PROVIDED BY THE AO ONLY T HEN APPLYING THE ACCEPTABLE JUDICIAL STANDARDS, JUST AND FAIR ESTIMATE OF AGR ICULTURE INCOME IF NEED BE, MAY BE RESORTED TO. SIGHT SHOULD NOT BE LOST OF THE FACT THAT AT TIMES THE MARGINAL TAX PAYER DRAWN IN THE TAX N ET FOR THE FIRST TIME, AT TIMES MAY NOT HAVE ADEQUATE EXPOSURE OF THE CO NSEQUENCES OF NOT MAKING FULL AND CORRECT FACTS AVAILABLE TO THE TAX AUTH ORITIES AT THE FIRST INSTANCE AND MAY ENTERTAIN A BONAFIDE BELIEF THAT THE ARGUMENT BASED ON CORRECT FACTS, KNOWN TO THE TAX PAYER, BY ITSE LF MAY BE SUFFICIENT COMPLIANCE. IT IS WELL UNDERSTOOD THAT THE ASSERTIONS HAVE TO BE SUPPORTED BY EVIDENCE BUT IN THE CASE OF A MARGINAL TAX PAYER, THE ROLE OF THE TAX AUTHORITIES CANNOT BE CONFINED TO MECHANICALLY ADJUDICATE UPON THE ISSUES AS ARGUED BUT IT IS ALSO ADVISABLE TO TAKE A P RO ACTIVE HUMANE APPROACH IN ORDER TO GUIDE, ADVISE AND COUNSEL THE TAX P AYER CONSIDERING THE SOCIO ECONOMIC AGRARIAN BACKGROUND HE COMES FROM BY TAKING SUCH STEPS A POSITIVE ENCOURAGEMENT AND HELP WOULD BE AVAILAB LE TO THE MAJORITY OF HONEST TAX PAYERS WHO WANT TO BE TAX COMP LIANT AND ARE IGNORANTLY PUSHED INADVERTENTLY TOWARDS THE DUBIOUS TA X DODGERS WHO PREYING ON THE LACK OF UNDERSTANDING AND FEARS INSTILLED B Y THE MECHANICAL ADMINISTRATIVE APPROACH OF AN OVERWORKED TAX A DJUDICATOR WHO IN HIS HASTE TO MEET HIS OWN TARGETS AND TIMELINES IN THE ACT OF COLLECTING JUST AND FAIR TAXES FOR THE STATE MAY ALSO NEED CLEAR DIRECTIONS TO INTERACT WITH THE LARGELY HONEST TAX PAYERS BY ALSO ASSISTING HIM IN BEING TAX COMPLIANT. THE MARGINAL TAX PAYERS IN THE ABSEN CE OF FAIRNESS AND GOOD ADVISE BY THE TAX ADJUDICATOR AT TIMES OFTEN FA LL PREY TO THE DUBIOUS TAX DODGERS WHO INSTILL FEAR AND OBDURATE CONTEM PT TOWARDS THE LAWS OF THE LAND. THUS THE DUTIES AND RESPONSIBILITIES OF THE TAX AUTHORITY WHO ARE THE FIRST LINE OF INTERVENTION AND INTERACTION FOR AN D ON BEHALF OF THE STATE WITH ITS POPULATION MUST BE ASSIGNED AFTER SCRU PULOUSLY ANALYZING NOT ONLY THE IQ BUT ALSO THE EQ AS IT DIRECTL Y IMPACTS THE TRUST AND FAITH OF THE CITIZEN TOWARDS THE STATE AND PROVIDES PRO-ACTIVE STEPS FROM ARRESTING ALIENATION FROM THE STATE THUS BECOMING AN AREA OF PARAMOUNT SOCIAL IMPORTANCE. 6.3 ACCORDINGLY, IN THE INTEREST OF SUBSTANTIAL JUSTICE THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE ASSESSING OFFICER. IT IS NOTED THAT THE ASSESSMENT IN THE FACTS OF THE PRESENT CASE HAS BE EN MADE UNDER SECTION 144 OF THE ACT, WHEREIN ADMITTEDLY SUPPORTING EVID ENCES COULD NOT BE FILED AND EVIDENCES FILED BEFORE THE LD. CIT(APPEALS) ALSO MAY NOT ITA NO.279 (ASR)/2016 ASST. YEAR: 2006-07 6 BE SUFFICIENT TO DISCHARGE THE ONUS PLACED UPON THE TAX PAYER. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE ASSESSING OFFICER. WHILE SO DIRECTING, IT IS MADE CLEAR THAT IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED TO THE ASSESSEE IN GO OD FAITH IS UTILIZED BY PARTICIPATING FULLY AND FAIRLY BEFORE THE ASSESSING OFFICER AND THE OPPORTUNITY SO PROVIDED IS NOT ABUSED. IN THE EVENTUALITY OF ABUSE, IT IS MADE CLEAR THAT THE ASSESSING OFFICER WOULD BE AT LIBERTY T O PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW ON THE BASIS OF MAT ERIAL AVAILABLE ON RECORD. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MAY 2017 SD/- (DIVA SINGH) JUDICIAL MEMBER /PK/PS./POONAM(CHD)/AG COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T.,