SMT MANJU DEVI CHOUDHARY, Jaipur V. ITO, Jaipur

ITA 285/JPR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3009 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANITA RI TESH
• Keywords: Unexplained investment

Judgement Text

1 ITA 285-13 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI B.R. JAIN, ACCOUNTANT MEMBER ITA NO. 285/JP/2013 ASSTT. YEAR : 2004-05. SMT. MANJU DEVI CHOUDHARY, VS. THE INCOME-TAX OFF ICER, RAILWAY PHATAK, BALAJI KE PASS WARD 7(2), REENGUS ROAD, KISHANGARH-RENWAL, JAIPUR. JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV SOGANI RESPONDENT BY : SMT. ANITA RITESH DATE OF HEARING : 27.06.2013. DATE OF PRONOUNCEMENT : 27.06.2013. ORDER PER B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 11 .12.2012 OF LD. CIT (APPEALS)- III, JAIPUR RAISES THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. A.O. HAS ERRED IN REOPENING THE ASSESSMENT AND LD. CIT (A) H AS ALSO ERRED IN NOT EXAMINING THE MATTER INSPITE OF THE SAME BEING CONT RARY TO LAW AND FACTS. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFI ED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE RE- ASSESSMENT PROCEEDINGS BEING ILLEGAL AND VOID ABINI TIO. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. IN M AKING ADDITION OF RS. 2,76,508/- AS UNEXPLAINED INVESTMENT. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 2,76,508/-. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. IN M AKING ADDITION OF RS. 23,492/- AS INCOME FROM OTHER SOURCES BY ESTIMATING THE AGRICULTURE 2 INCOME AT RS. 66,738/- AGAINST THE DECLARED AGRICUL TURE INCOME OF RS. 90,230/-. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 23,492/-. 2. GROUND NO. 1 IN APPEAL HAS NOT BEEN PRESSED ON T HE REASONING THAT THE ASSESSEE HAD NOT RAISED SUCH A GROUND IN APPEAL BEFORE LD. C IT (A). SINCE THE ASSESSEES COUNSEL HAS NOT PRESSED THE GROUND NO. 1 IN APPEAL, THE SAM E STANDS REJECTED. 3. IN GROUND NO. 3 THE SHORT FACTS ARE THAT THE ASS ESSEE RETURNED INCOME FROM DAIRY BUSINESS DECLARING INCOME OF RS. 48,810/- AND AGRIC ULTURAL INCOME OF RS. 90,230/- FOR RATE PURPOSES. THE ASSESSING OFFICER ON THE BASIS OF AN AFFIDAVIT OF AGRICULTURAL LAND OWNER ADMITTED THE FACT THAT THE ASSESSEE IS DOING AGRICU LTURAL ACTIVITIES ON BATAI BASIS. HE REQUIRED THE APPELLANT TO PRODUCE THE LAND OWNER IN ASSESSMENT PROCEEDINGS BEFORE HIM FOR VERIFICATION OF THE QUANTUM OF AGRICULTURAL INC OME THAT HAS COME TO THE SHARE OF THE APPELLANT. THE LAND OWNER, HOWEVER, WAS NOT PRODUC ED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREFORE, ON THE BASIS OF GENER AL INFORMATION ON WEBSITE, PROCEEDED TO ESTIMATE AGRICULTURAL INCOME AT RS. 66,738/- AS AGA INST THE AGRICULTURAL INCOME OF RS. 90,230/- DECLARED BY THE APPELLANT. THE LD. CIT (A ) CONFIRMED THIS ACTION OF THE ASSESSING AUTHORITY AS THE ASSESSEE DID NOT PRODUCE ANY RELIABLE EVIDENCE TO SUBSTANTIATE THE MAGNITUDE OF AGRICULTURAL INCOME DECLARED IN TH E RETURN FILED BY HER EVEN IN APPEAL BEFORE HIM. 4. THE LD. COUNSEL FOR ASSESSEE CONTENDS THAT THE A UTHORITIES BELOW HAVE ACTED ARBITRARILY IN ESTIMATING THE AGRICULTURAL INCOME A T RS. 66,738/- AS AGAINST THE AGRICULTURAL INCOME OF RS. 90,230/- FALLEN TO THE SHARE OF ASSES SEE ON BATAI BASIS. THE ASSESSING OFFICER MADE NO LOCAL ENQUIRY ABOUT THE INCOME FROM SIMILAR LANDS IN THE ADJOINING AREA 3 BUT RESTED HIS DECISION ON EXTRANEOUS MATERIAL. HE ADOPTED THE YIELD OF AGRICULTURAL LAND SITUATED IN SIKAR DISTRICT AND MADE NO EFFORT TO FI ND OUT THE YIELD PER ACRE IN THE AREA IN WHICH THE LAND UNDER CONSIDERATION WAS LOCATED. IT HAS THUS BEEN CONTENDED THAT THERE IS NO JUSTIFICATION IN NOT ACCEPTING THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AT RS. 90,230/-. 5. ON THE OTHER HAND, THE D/R PLACED STRONG RELIANC E ON THE FINDINGS AND CONCLUSION REACHED BY AUTHORITIES BELOW. 6. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. THE APPELLANT HAD NOT MAINTAINED ANY ACCOUNTS OR DOCUMENTS FOR CARRYING O UT AGRICULTURAL ACTIVITIES OR RECEIPT OF INCOME AND PAYMENT OF EXPENSES ON SUCH ACTIVITIES. THE APPELLANT IS SHOWN TO HAVE DECLARED AGRICULTURAL INCOME AT RS. 90,230/- ON EST IMATE BASIS. WHEN REQUIRED TO SHOW THE BASIS OF SUCH ESTIMATE, THE LD. COUNSEL FOR THE ASS ESSEE COULD NOT ASSIST THIS TRIBUNAL TO FIND OUT AS TO WHETHER SUCH ESTIMATIONS ARE REALIST IC AND CORRECT. THE ASSESSING AUTHORITY HAS ALSO ESTIMATED THE AGRICULTURAL INCOME AT RS. 6 6,738/-. THE BURDEN LAY UPON ASSESSEE TO SHOW THAT THE ESTIMATED INCOME DECLARED BY HER I S ON REASONABLE BASIS. HOWEVER, THIS HAS NOT BEEN DONE. I, THEREFORE, DO NOT FIND ANY RE ASON TO INTERFERE WITH THE WELL REASONED DECISION OF LD. CIT (A) IN ACCEPTING THE REASONABLE ESTIMATE MADE BY THE ASSESSING AUTHORITY. I, THEREFORE, REJECT GROUND NO. 3 IN APPEAL RAISED BY THE ASSESSEE. 7. IN REGARD TO GROUND NO. 2, BRIEFLY THE FACTS ARE THAT THE APPELLANT HAD MADE AN INVESTMENT OF RS. 3,00,000/- IN CASH FOR PURCHASE O F SHARES IN THE COMPANY BY NAME M/S. CHOUDHARY GUMS PVT. LTD. OF WHICH ASSESSEES FATHER IS A DIRECTOR AND IS CONTROLLING THE AFFAIRS. THE APPELLANT IN ASSESSMENT PROCEEDINGS B EFORE THE ASSESSING AUTHORITY CLAIMED THAT THE SAID INVESTMENT OF RS. 3,00,000/- HAS BEEN MADE BY HER OUT OF HER EARNINGS, 4 SAVINGS AND PIN MONEY. THE ASSESSING OFFICER, HOWE VER, BEING OF THE OPINION THAT THE EARNINGS MADE BY THE ASSESSEE ARE NOT SUFFICIENT FO R MAKING INVESTMENT AS SUCH, TREATED THE SAID INVESTMENT OF RS. 3,00,000/- AS UNEXPLAINE D AND ADDED THE SAME TO THE RETURNED INCOME OF THE ASSESSEE. THE LD. CIT (A) CONFIRMED THE DECISION. 8. THE LD. COUNSEL SHRI RAJEEV SOGANI CONTENDS THAT THE AUTHORITIES BELOW HAVE ADMITTED THAT THERE IS AN OSTENSIBLE SOURCE OF INCO ME AVAILABLE WITH THE ASSESSEE. THE APPELLANT DERIVES INCOME FROM DAIRY BUSINESS. THIS STANDS ADMITTED BY THE ASSESSING OFFICER IN FRAMING THE ASSESSMENT ITSELF. THE APPE LLANT HAD ALSO AGRICULTURAL INCOME FROM AGRICULTURAL ACTIVITIES. THESE ARE THE ACTIVITIES C ARRIED OUT BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE DOCUMENT ON RECORD ALSO RE VEALS THAT SHE HAS BEEN REGULARLY ASSESSED TO TAX. SUCH INCOME ARE DERIVED IN THE EAR LIER YEARS AS WELL. THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT BUT HAD CLAIMED TO HAVE ACCUMULATED THE SAVINGS WHICH IS QUITE NATURAL. THIS POSITION OUGHT TO HAVE BEEN ADMITTED BY THE AUTHORITIES BELOW AS HAS ALSO BEEN ACCEPTED BY THE MUMBAI TRIBUNAL IN THE CASE OF S.N. ANDHRUTKAR VS. FIFTH INCOME TAX OFFICER, 6 TTJ 1165 (BOM.) IN THE FOLLOWING TERMS :- CERTAIN ALLEGED GAPS IN THE EVIDENCE PRODUCED BE FORE THE DEPARTMENTAL AUTHORITIES BY THE ASSESSEE ARE NOT OF ANY GREAT SI GNIFICANCE. FOR EXAMPLE, IT IS TRUE THAT THE ASSESSEE DOES NOT HAVE ACCOUNTS FOR THE AGRICULTURAL INCOME AND THAT EVEN SOME OF THE OLD DIARIES IN WHI CH THERE ARE RELEVANT ENTRIES WHICH WERE PRODUCED ARE FOR ONLY CERTAIN PE RIODS AND DO NOT COVER THE ENTIRE PERIOD OF ABOUT 20 YEARS, IN THE COURSE OF WHICH THE ASSESSEE CLAIMS TO HAVE ACCUMULATED THE SAVINGS. IN OUR OPIN ION THIS IS QUITE NATURAL. THERE IS NO VALID REASON WHY THE ASSESSEE SHOULD HAVE KEPT SYSTEMATIC ACCOUNTS FROM 1950. IT IS ALSO QUITE NAT URAL THAT IN1970, THE ASSESSEE DID NOT HAVE ALL THE OLD DIARIES, AND ALL THE OLD DOCUMENTS. IN THIS VIEW OF THE MATTER, IT HAS BEEN CONTENDED T HAT THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ADDITION WITHOUT ANY JUSTIFIABLE REA SONS. 5 9. ON THE OTHER HAND, THE LD. D/R CONTENDS THAT THE APPELLANT HAD ADMITTED OF MAKING THE INVESTMENT IN A FAMILY COMPANY. THE SAID INVESTMENT IS FOUND TO HAVE BEEN MADE IN CASH. THE ASSESSEE DOES NOT HAVE SUFFICIENT SOURCE TO EXPLAIN THE INVESTMENT. BURDEN LAY UPON THE ASSESSEE TO PROVE WITH DOCUMENT ARY EVIDENCE THAT FUNDS WERE AVAILABLE WITH HER FOR MAKING SUCH INVESTMENT IN SH ARE CAPITAL OF THE COMPANY. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE ADDITION N EEDS TO BE UPHELD. 10. I HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD. IT IS AN ADMITTED FACT THAT THE APPELLANT HAD OSTENSIBLE SOURCE OF INCOME. SHE DERIVES INCOME FROM DAIRY BUSINESS AS WELL AS FROM AGRICULTURAL ACTIVITIES. SIMILAR IS THE POSITION IN EARLIER YEARS AS WELL. THE ASSESSING AUTHORITY HAS NOT BROUGHT ON RECORD AS TO HOW SUCH EARNINGS STOOD EXHAUSTED AND WERE NOT AVAILABLE FOR ACCUMULATING SAVINGS WIT H THE APPELLANT AND MAKING THEM AVAILABLE FOR INVESTMENT IN SHARE CAPITAL OF M/S. C HOUDHARY GUMS PVT. LTD. THE ASSESSEE HAS CLAIMED REASONABLE ACCUMULATION OF HER EARNINGS AND SAVINGS. THERE BEING NO OTHER INVESTMENT SHOWN TO HAVE BEEN MADE IN APPELLANTS N AME, THE INVESTMENT IN SHARES DURING THE YEAR UNDER CONSIDERATION HAS TO BE TAKEN AS EXPLAINED. I, THEREFORE, DO NOT FIND ANY JUSTIFICATION IN TREATING THE SAME AS UNEXPLAIN ED. THE ADDITION SO MADE IS, THEREFORE, DIRECTED TO BE DELETED. GROUND NO. 2 IN APPEAL STAN DS ALLOWED. 11. IN THE RESULT, ASSESSEES APPEAL STANDS PARTLY ALLOWED AS ANNOUNCED IN THE OPEN COURT IN PRESENCE OF PARTIES ON 27.06.2013. SD/- ( B.R. JAIN ) ACCOUNTANT MEMBER JAIPUR, DATED : 27/06/2013. D/- 6 COPY FORWARDED TO :- SMT. MANJU DEVI CHOUDHARY, JAIPUR. THE ITO WARD 7(2), JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 285/JP/2013) BY ORDER, AR ITAT JAIPUR.