Smt. Anjanaben H.Shah, Ahmedabad V. The Income tax Officer,(OSD)Range-10, Ahmedabad

ITA 2858/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80302 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.2858/AHD/2011 A.Y.2008-09 SMT. ANJANABEN H. SHAH, 2, PARASKUNJ, OPP. MUNICIPAL SCHOOL, NAVRANGPURA, AHMEDABAD. PAN: BDIPS1519L VS ITO (OSD) RANGE 10, AHMEDABAD, 1 ST FLOOR, NARAYAN CHAMBERS, NEHRU BRIDGE CORNER, ASHRAM ROAD, AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B.L. YADAV, SR.D.R., ASSESSEE(S) BY : URVASHI SHODHAN, AR / // / DATE OF HEARING : 12/08/2014 / DATE OF PRONOUNCEMENT: 28/08/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LD. CIT(APPEALS)-XVI, AHMEDABAD, DATED 18/10/2011. NUMB ERS OF GROUND HAVE BEEN RAISED HOWEVER THE IMPUGNED ISSUE REVOLVE S AROUND THE FOLLOWING TWO GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XV I, AHMEDABAD HAS ERRED IN CONFIRMING THE ADDITION OF RS.19,89,225/- MADE BY THE ASSESSING OFFICER ON THE GROUND OF UNEXPLAINED CASH DEPOSITED IN THE BANK ACCOUNT. 2. THE LD. CIT(A) HAS FURTHER ERRED IN CONFIRMING T HE ADDITION OF RS.19,89,225/- ON SUBSTANTIVE BASIS THOUGH THE ASSE SSING OFFICER HAS MADE THE SAID ADDITION ON PROTECTIVE BASIS. 1.1 SIDE BY SIDE THE APPELLANT HAS ALSO RAISED AN A DDITIONAL GROUND OF APPEAL AS UNDER: ITA NO.2858/AHD/2011 SMT. ANJANABEN H. SHAH VS. ITO (OSD) RANGE 10, AHME DABAD FOR A.Y. 2008-09 - 2 - 1. ALTERNATIVELY AND WITHOUT PREJUDICE TO OTHER GR OUNDS LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT TH AT ASSESSMENT ORDER FRAMED ON PROTECTIVE BASIS IN ABSENCE OF SUBSTANTIVE ASSES SMENT FRAMED AT ALL IS ILLEGAL, VOID AB INITIO AND AGAINST THE PRINCIPLES OF LAW THAT DESERVES TO BE QUASHED. IT BE SO HELD NOW. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) R.W.S. 144 OF IT ACT DATED 23.12. 2010 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY HAS DECLARED AN INC OME OF RS.1,49,872/-. HOWEVER AN ADDITION OF RS.19,89,225/- WAS MADE; HEN CE, TOTAL INCOME WAS ASSESSED AT RS.21,39,097/-. IT WAS FOUND BY THE AO THAT IN SAVING BANK ACCOUNT WITH CORPORATION BANK AN AMOUNT OF RS. 9,89,225/- WAS DEPOSITED. AS PER AO, THE SAID ACCOUNT WAS OPENED I N THE NAME OF THE ASSESSEE AS HER NAME APPEARED AS FIRST NAME IN TH E SAID SAVING BANK ACCOUNT. THE ASSESSEES CONTENTION WAS THAT THE SAI D ACCOUNT WAS OPERATED BY HER SON, VIZ., SRI RAHUL H. SHAH. THE A SSESSEE HAS ALSO CONTESTED BEFORE AO THAT THE SAID TRANSACTION WAS M ADE BY HIS SON SRI RAHUL H. SHAH WHO HAS SEPARATELY FILED THE RETURN A ND ALSO SUBMITTED A DECLARATION IN THIS REGARD BEFORE THE AO. HIS PERMA NENT ACCOUNT HAS ALSO BEEN INFORMED. HOWEVER, THE AO WAS NOT CONVINCED AN D ASSESSED THE IMPUGNED AMOUNT ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, LEARNED CIT(A) HAS NOT ONLY CONFIRMED THE ADDITION BUT ALSO HELD THAT THE AMOUNT IN QUESTION WAS TO BE TAXED ON SUBSTANTIVE B ASIS IN THE HANDS OF THE ASSESSEE. THE FINDINGS OF LEARNED CIT(A) WERE A S UNDER: 2.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND THE FACTS OF THE CASE. ON CONSIDERATION OF THE FACTS AN D THE SUBMISSION OF THE LD. COUNSEL, I AM OF THE VIEW THAT THE ACCOUNT WAS MAIN TAINED JOINTLY BY THE ASSESSEE AND HER SON SHRI RAHUL SHAH. THE FIRST NAM E IN THE ACCOUNT IS THAT OF THE ASSESSEE AND IF ANY DEPOSITS ARE MADE IN THE AC COUNT, THE FIRST NAME IS TO BE HELD RESPONSIBLE TO EXPLAIN THE DEPOSITS. THE CA SH DEPOSITS IN BANK CANNOT BE TREATED AS EXPLAINED AS THE SAME WERE STATE TO B E RECORDED IN THE BOOKS OF ITA NO.2858/AHD/2011 SMT. ANJANABEN H. SHAH VS. ITO (OSD) RANGE 10, AHME DABAD FOR A.Y. 2008-09 - 3 - ACCOUNTS OF APPELLANT'S SON. THE EVIDENCE SHOULD BE PRODUCED FOR THIS BY THE APPELLANT. NO ANY EVIDENCE TO THIS FACT WAS FILED T O JUSTIFY THE CLAIM BY THE LD. COUNSEL. IN VIEW THEREOF, THE CASH DEPOSIT OF RS.19 ,89,225/- ARE TREATED AS UNEXPLAINED AND THE ADDITION SO MADE IS CONFIRMED. SINCE THE ASSESSING OFFICER HAS MADE THE ADDITION IN HANDS OF THE ASSES SEE ON PROTECTIVE BASIS, THE SAME ARE CONSIDERED AS SUBSTANTIVE BASIS IN THE HAN DS OF THE ASSESSEE. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 4. BEFORE US, LEARNED AR, URVASHI SHODHAN HAS FIRST ARGUED THE ADDITIONAL GROUND PRIMARILY ON THE BASIS THAT IN TH E ABSENCE OF SUBSTANTIVE ASSESSMENT THERE WAS NO QUESTION OF PROTECTIVE ASSE SSMENT IN THE HANDS OF THE ASSESSEE. AT THIS JUNCTURE, IT IS WORTH TO M ENTION THAT THE BENCH HAS ASKED THE REVENUE DEPARTMENT TO PLACE ON RECORD THE EXACT POSITION THAT WHETHER ANY SUBSTANTIVE ADDITION HAS BEEN MADE SPEC IALLY IN THE HANDS OF RAHUL H. SHAH AND IN REPLY VIDE A LETTER DATED 17 TH APRIL, 2014 THE REVENUE DEPARTMENT HAS INFORMED AS UNDER: 2. THE ASSESSMENT PROCEEDINGS IN THE CASE OF ANJAN ABEN H SHAH HAVE BEEN COMPLETED FOR A.Y. 2008-09 BY THE ITO WARD 10(2) WI TH THE ADDITION OF RS. 19,89,225/- ON ACCOUNT OF UNEXPLAINED CASH BANK DEP OSIT. THE SAID BANK ACCOUNT WAS JOINTLY HELD BY THE ANJANABEN H SHAH AN D HER SON SHRI RAHUL H SHAH. THE SAID ADDITION WAS MADE ON THE PROTECTIVE BASIS BY THE A.O. BECAUSE THE SAME ACCOUNT WAS OPERATED BY HER SON SHRI RAHUL H SHAH FOR HIS BUSINESS PURPOSE. 3. AGGRIEVED BY THE SAID ASSESSMENT ORDER ASSESSEE (ANJANABEN H. SHAH) PREFERRED AN APPEAL BEFORE LD. CIT (A). LD. CIT (A) DECIDED THE APPEAL AND SUSTAINED THE ADDITION MADE BY THE A.O. MOREOVER, L D. CIT(A) CONVERTED THE ADDITION FROM PROTECTIVE TO SUBSTANTIVE BASIS IN TH E HANDS OF ANJANABEN H SHAH WHO WAS THE FIRST ACCOUNT HOLDER. THEREFORE, A S PER MY OPINION NO NEED TO REOPENED THE ASSESSMENT IN THE CASE OF RAHUL H S HAH FOR A.Y. 2008-09. THUS THIS OFFICE HAS NOT INITIATED ANY RE-ASSESSMEN T PROCEEDINGS OR ANY ADDITION MADE ON THE PROTECTIVE OR SUBSTANTIVE BASI S IN THE CASE OF RAHUL H SHAH FOR A.Y. 2008-09. 4.1 LEARNED AR HAS PLACED RELIANCE ON AN ORDER OF H ONBLE SUPREME COURT PRONOUNCED IN THE CASE OF LALJI HARIDAS VS. I TO, 43 ITR 387 (SC). 5. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., SRI B.L. YADAV HAS VEHEMENTLY ARGUED THAT THERE IS NO BAR THAT ONLY WHEN ITA NO.2858/AHD/2011 SMT. ANJANABEN H. SHAH VS. ITO (OSD) RANGE 10, AHME DABAD FOR A.Y. 2008-09 - 4 - A SUBSTANTIVE ADDITION HAS BEEN MADE THEREAFTER A P ROTECTIVE ASSESSMENT COULD BE MADE. LEARNED SR.D.R. HAS ALSO OBJECTED TH E RAISING OF THE ADDITIONAL GROUND AT THIS STAGE OF APPEAL. IN RESPE CT OF THIS OBJECTION RELIANCE WAS PLACED ON BATLIOI & CO. LTD. VS. DEPUT Y COMMISSIONER OF INCOME TAX, (1998) 67 ITD 397 (MUM.). ON THE ISSUE OF SUBSTANTIVE ASSESSMENT TO BE MADE, HE HAS PLACED RELIANCE UPON THE DECISION OF HONBLE ITAT MUMBAI BENCH IN THE CASE OF SURESH K. JAJOO VS. ACIT, CIRCLE 4(2) MUMBAI, (2010) 39 SOT 514 (MUM.). 6. AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT INSTEAD OF FIRST DECIDING THE ADDITIONAL GROUN D IT IS MORE PRACTICAL TO FIRST EXAMINE THE MERITS OF THE ADDITION. THEREFORE , WE HAVE EXAMINED THE EVIDENCES PERTAINING TO THE DEPOSITS MADE IN THE IM PUGNED SAVING BANK ACCOUNT. OUR ATTENTION HAS BEEN DRAWN ON A LETTER A DDRESSED TO AO DATED 10 TH OF DECEMBER, 2010 WHEREIN IT WAS INTIMATED THAT TH E SON HAS DULY DISCLOSED THE SAID BANK ACCOUNT, RELEVANT PORTIONS REPRODUCED BELOW: 1. DETAILS OF BANK ACCOUNT : THE DETAILS OF BANK A CCOUNT AS CALLED FOR VIDE ABOVE SAID NOTICE AND AS MENTIONED IN AIR INFORMATION, THE SAME BANK ACCOUNT IS IN JOINT NAME WITH MY SON - RAHUL H . SHAH AND THE SAME HAS BEEN SHOWN IN THE HIS BOOKS OF ACCOUNTS. HENCE ALL THE TRANSACTION HAVE BEEN RECORDED ON THE BOOKS OF ACCOUNTS OF MY SON. NO BAN K ACCOUNT HAS BEEN SHOWN AND RECORDED IN MY BOOKS OF ACCOUNTS. HENCE, I HEREBY SUBMIT BANK BOOK OF CORPORATION BANK A/C. NO. 15986 AND CASH BO OK ON THE BOOKS OF ACCOUNTS OF MY SON - RAHUL SHAH ALONG WITH HIS DECL ARATION. 6.1 FURTHER, OUR ATTENTION HAS ALSO BEEN DRAWN ON T HE INCOME TAX RETURN FILED BY APPELLANTS SON, NAMELY, RAHUL H. SHAH FOR A.Y. 2008-09. LEARNED AR HAS POINTED OUT THAT THE SAID RETURN WAS FILED IN DUE COURSE. ALONG WITH THE RETURN THE STATEMENT OF ACCOUNTS AND THE SAID BANK ACCOUNT WAS DULY DISCLOSED. A TAX AUDITOR HAS EXAMI NED THE BOOKS OF ACCOUNT OF RAHUL H. SHAH. AS PER THE BALANCE SHEET DRAWN AS ON 31 ST ITA NO.2858/AHD/2011 SMT. ANJANABEN H. SHAH VS. ITO (OSD) RANGE 10, AHME DABAD FOR A.Y. 2008-09 - 5 - MARCH, 2008 A CORPORATION BANK SB ACCOUNT NO.15986 WAS DULY DISCLOSED. THE DEPOSITS WERE IN THE REGULAR COURSE OF BUSINESS ON SEVERAL DATES AND SOME OF THE ENTRIES WERE CONTRA ENTRIES I N THE BANK ACCOUNT. LEARNED AR HAS PLEADED ON THE BASIS OF THOSE EVIDEN CES THAT ALTHOUGH THE SAID BANK ACCOUNT STOOD IN THE NAME OF THE ASSESSEE AS WELL AS IN THE NAME OF HER SON BUT FOR ALL PURPOSES THAT WAS OPERA TED BY SON AND NOT BY THE ASSESSEE. SRI RAHUL H. SHAH HAS ALSO MADE A DEC LARATION BEFORE THE AO THAT THE TRANSACTIONS IN THE CORPORATION BANK AC COUNT WERE DULY RECORDED IN HIS BOOKS OF ACCOUNT. 6.2 IN A SITUATION WHEN A TAX PAYER, I.E., A SON IS DULY DISCLOSING THE SAID TRANSACTION IN THE REGULAR COURSE IN HIS BOOKS OF ACCOUNT AND THOSE ENTRIES WERE DULY DISCLOSED IN THE INCOME TAX RETUR N THEN THOSE VERY ENTRIES ARE NOT REQUIRED TO BE AGAIN ASSESSED, IF R EVENUE IS NOT SATISFIED, IN THE HANDS OF THAT PERSON WHO IS ONE OF THE ACCOU NT HOLDER. ALTHOUGH, THE NAME OF THE ASSESSEE APPEARED AS FIRST NAME IN THE SAID BANK ACCOUNT BUT FOR ALL PRACTICAL PURPOSES THE SON WAS OPERATIN G THAT ACCOUNT AS IS EVIDENT FROM SEVERAL EVIDENCES WHICH WERE IN THE NO TICE OF THE REVENUE DEPARTMENT. THEREFORE ON MERITS, WE ARE OF THE VIEW THAT THE ENTRIES BEING EXPLAINED IN THE CASE OF THE SON AND THE REVE NUE DEPARTMENT HAS NOT TAKEN ANY ACTION IN THE CASE OF THE SON, THEREF ORE, THERE WAS NO JUSTIFICATION TO ADD THOSE VERY ENTRIES IN THE HAND S OF HER MOTHER, I.E., THE APPELLANT BEFORE US. 6.3 ONCE, WE HAVE TAKEN A DECISION ON MERITS AND DI RECTED TO DELETE THE ADDITION, THEREFORE, THE LEGAL ISSUE RAISED AS PER THE ADDITIONAL GROUND NEED NOT TO BE ADDRESSED BY US. RATHER, THIS ADDITI ONAL GROUND HAS BECOME INFRUCTUOUS. ITA NO.2858/AHD/2011 SMT. ANJANABEN H. SHAH VS. ITO (OSD) RANGE 10, AHME DABAD FOR A.Y. 2008-09 - 6 - 6.4 IN THE RESULT, THE GROUND RAISED BY THE ASSESSE E IS ALLOWED AND THE ADDITIONAL GROUND IS DISMISSED BEING REDUNDANT. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 28/08/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD