SMT SHANTI DEVI CHOUDHARY, Jaipur V. ITO, Jaipur

ITA 286/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5542 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Keywords: Unexplained investment; Earning of tax free income; Onus to prove

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 286/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SMT. SHANTI DEVI CHOUDHARY RAILWAY PHATAK, BALAJI KE PASS, REENGUS ROAD, KISHANGARH RENWAL, JAIPUR CUKE VS. THE ITO WARD- 7 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AEJPC 2119 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 287/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SMT. RUKMA DEVI CHOUDHARY RAILWAY PHATAK, BALAJI KE PASS, REENGUS ROAD, KISHANGARH RENWAL, JAIPUR CUKE VS. THE ITO WARD- 7 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AEJPC 2123 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 289/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SHRI HEERA LAL CHOUDHARY RAILWAY PHATAK, BALAJI KE PASS, REENGUS ROAD, KISHANGARH RENWAL, JAIPUR CUKE VS. THE ITO WARD- 7 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABSPC 5503 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 2 VK;DJ VIHY LA-@ ITA NO. 296/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SHRI BALDEV CHOUDHARY RAILWAY PHATAK, BALAJI KE PASS, REENGUS ROAD, KISHANGARH RENWAL, JAIPUR CUKE VS. THE ITO WARD- 7 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACZPC 0809 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/12/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 4 /02/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THE ABOVE MENTIONED ASSESSEES HAVE FILED RESPECTIV E APPEALS AGAINST SEPARATE ORDERS OF THE LD. CIT(A)-III, JAIP UR DATED 11-12-2012 FOR THE ASSESSMENT YEAR 2004-05. SINCE THESE APPEALS PE RTAIN TO THE SAME FAMILY MEMBERS ON COMMON ISSUES, THEREFORE, THESE A PPEALS ARE BEING DECIDED THOUGH A COMMON ORDER FOR THE SAKE OF CONVE NIENCE. 2.1 THE GROUND NO. 1 IN ALL THESE APPEALS IS IN RES PECT OF REOPENING OF THE ASSESSMENT WHICH HAS NOT BEEN PRESSED BY THE LD . AR OF THE ASSESSEE DURING HEARING OF THE APPEALS. HENCE, GROUND NO. 1 OF THE ASSESSEE IN ALL THE APPEALS IS DISMISSED BEING NOT PRESSED. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 3 2.2 THE COMMON GROUND NO. 2 IN RESPECTIVE APPEALS P ERTAINS TO ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT AS UN DER: SMT. SHANTI DEVI CHOUDHARY RS. 4,20,940/- SMT. RUKMA DEVI CHOUDHARY RS. 8,00,000/- SHRI HIRA LAL CHOUDHARY RS. 1,89,855/- SHRI BALDEV CHOUDHARY RS. 5,11,765/- 2.3 THE GROUND NO. 3 IS ONLY IN RESPECT OF SMT. S HANTI DEVI TREATING IT AS UNDISCLOSED INCOME FROM DAIRY INCOME AMOUNTI NG TO RS. 65,930/- 2.4 THE LAST COMMON GROUND CHALLENGES THE ADDITION BY TREATING THE EXEMPT AGRICULTURAL INCOME AS INCOME FROM OTHER SOU RCES: SMT. SHANTI DEVI CHOUDHARY RS. 1,20,130/- SMT. RUKMA DEVI CHOUDHARY RS. 37,786/- SHRI HIRA LAL CHOUDHARY RS. 1,44,663/- SHRI BALDEV CHOUDHARY RS. 1,54,868/- 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE'S IN QUESTION CAME IN THE NET OF INCOME TAX PROBLEMS WERE SHARE APPLICANTS IN A COMPANY, ONE M/S. CHOUDHARY GUMS (P) LTD. WHEREIN ADDITION OF RS. 50. 00 LACS WAS MADE ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 4 ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS BY SHARE C APITAL INTRODUCED IN THE NAME OF 12 PERSONS. 3.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THE A DDITION OF SHARE CAPITAL IN THE HANDS OF THE COMPANY WAS DELETED BY ITAT DIRECTING TO BE EXAMINED IN THE HANDS OF APPLICANTS. THEREAFTER, AS SESSMENTS OF THE SHARE APPLICANTS WERE TAKEN U/S 147/148 OF THE ACT WHERE THE AO DID NOT ACCEPT CREDITWORTHINESS OF THE ASSESSEE'S FOR SHARE APPLIC ATIONS AND CLAIM OF AGRICULTURAL INCOME AND DAIRY INCOME IN THE CASE OF SMT. SHANTI DEVI THUS ADDITIONS IN THESE RESPECTS WERE MADE. 3.3 IN FIRST APPEAL, THE LD. CIT(A) CONFIRMED THE O RDERS OF THE AO AND DISMISSED THE APPEALS. 3.4 AGGRIEVED, THESE ASSESSEE'S ARE BEFORE ITAT. 3.5 DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE CONTENDS THAT MEMBERS OF ALL THE ASSESSEES FAMILY REGULARLY CULTIVATED THE LAND AND EARNED AGRICULTURAL INCOME THEREON WHI CH WAS SHOWN AS EXEMPT INCOME IN THE RESPECTIVE RETURNS FILED BY TH EM IN RESPONSE TO NOTICE 148 OF THE ACT. SIMILARLY SMT. SHANTI DEVI H AD DAIRY INCOME. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 5 3.6 APROPOS AMOUNT INVESTED BY THE ASSESSEES IN M/ S. CHOUDHARY GUMS (P) LTD. WAS HELD TO BE EXPLAINED FOR SAMPLE P URPOSE, CASE OF SMT. MANJU DEVI CHUDHARY VS. ITO (ITA NO. 285/JP/2013 DA TED 27-06-2013 FOR THE ASSESSMENT YEAR 2004-05 IS REFERRED IN WHIC H THE ADDITION ON ACCOUNT OF AGRICULTURAL INCOME IS UPHELD BY ITAT J AIPUR BENCH BY FOLLOWING OBSERVATION. 6. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RE CORD. THE APPELLANT HAD NOT MAINTAINED ANY ACCOUNTS OR DOCUMENTS FOR CARRYING OUT AGRICULTURAL ACTIVITIES OR RECEIPT OF INCOME AND PAYMENT OF EXPENSES ON SUCH ACTIVITIE S. THE APPELLANT IS SHOWN TO HAVE DECLARED AGRICULTURAL IN COME AT RS. 90,230/- ON ESTIMATE BASIS. WHEN REQUIRED TO SH OW 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 REALISTIC AND CORRECT. THE ASSESSIN G AUTHORITY HAS ALSO ESTIMATED THE AGRICULTURAL INCOME AT RS. 6 6,738/-. THE BURDEN LAY UPON ASSESSEE TO SHOW THAT THE ESTIM ATED INCOME DECLARED BY HER IS ON REASONABLE BASIS. HOWE VER, THIS HAS NOT BEEN DONE. I, THEREFORE, DO NOT FIND A NY REASON TO INTERFERE WITH THE WELL REASONED DECISION OF LD. CI T(A) IN ACCEPTING THE REASONABLE ESTIMATE MADE BY THE ASSES SING AUTHORITY. I THEREFORE, REJECT GROUND NO. 3 IN APPE AL RAISED BY THE ASSESSEE. THE ADDITION ON ACCOUNT OF INVESTMENT IN SHARE APPL ICATION MONEY WAS DELETED BY ITAT FOLLOWING OBSERVATION. 10. I HAVE HEARD PARTIES WITH REFERENCE TO MATERI AL ON RECORD. IT IS AN ADMITTED FACT THAT THE APPELLAN T HAD ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 6 OSTENSIBLE SOURCE OF INCOME. SHE DERIVES INCOME FRO M DAIRY BUSINESS AS WELL AS FROM AGRICULTURAL ACTIVITIES. S IMILAR IS THE POSITION IN EARLIER YEARS AS WELL. THE ASSESSING AU THORITY HAS NOT BROUGHT ON RECORD AS TO HOW SUCH EARNING STOOD EXHAUSTED AND WERE NOT AVAILABLE FOR ACCUMULATING S AVINGS WITH THE APPELLANT AND MAKING THEM AVAILABLE FOR IN VESTMENT IN SHARE CAPITAL OF M/S. CHOUDHARY GUMS (P) LTD. TH E ASSESSEE HAS CLAIMED REASONABLE ACCUMULATION OF HER EARNINGS AND SAVINGS. THERE BEING NO OTHER INVESTME NT SHOWN TO HAVE BEEN MADE IN APPELLANTS NAME, THE INVESTMENT IN SHARES DURING THE YEAR UNDER CONSIDER ATION HAS TO BE TAKEN AS EXPLAINED. I THEREFORE, DO NOT FIND ANY JUSTIFICATION IN TREATING THE SAME AS UNEXPLAINED. THE ADDITION SO MADE IS THEREFORE, DIRECTED TO BE DELET ED. GROUND NO. 2 IN APPEAL STANDS ALLOWED. 3.7 SIMILARLY IN CONSOLIDATED ORDER DATED 17-07-201 3 IN THE CASE OF SMT. KAMLA DEVI CHOUDHARY (ITA NO. 290/JP/2013, A.Y . 2004-05) AND SMT. CHUKI DEVI CHOUDHARY (ITA NO. 292/JP/2013, A.Y . 2004-05) APROPOS DAIRY INCOME IN PARA 8, ITAT GAVE FINDING T HAT THE ASSESSEE HAD NOT LAID ANY COGENT MATERIAL OR EVIDENCE TO SUBSTANTIATE THE INCOME RETURNED FROM DAIRY BUSINESS AS WELL AS AGRICULTURAL INCOME FOR THE YEAR UNDER CONSIDERATION. HOWEVER, IN THESE CASES ALSO, THE ADDITIONS IN RESPECT OF SHARE APPLICATION MONEY WER E DELETED BY FOLLOWING OBSERVATIONS. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 7 8.. THE APPELLANT HAD PUT FORTH THEIR CASES BEFORE THE ASSESSING AUTHORITY BUT NO ADVERSE MATER IAL CONTRARY TO CLAIM OF THE APPELLANTS HAS BEEN BROUGHT ON RECORD. MERELY BECAUSE THERE WAS NO INCOME FROM DAIRY AND AGRICULT URE DURING THE YEAR UNDER CONSIDERATION, HAT THE FACT ALONE DOES N OT LEAD TO THE PRESUMPTION THAT THE SAVINGS WERE NOT AVAILABLE. NO OTHER INVESTMENTS ARE REPORTED NOR FOUND TO HAVE BEEN MAD E BY THESE APPELLANTS IN THE PAST NOR IN THE YEAR UNDER CONSID ERATION EXCEPT THE INVESTMENT OF RS. 4,00,000/- EACH IN THE SHARES OF M/S. CHOUDHARY GUMS (P) LTD. SINCE THE APPELLANT HAD LOD GED PLAUSIBLE EXPLANATION , THEY CAN BE SAID TO HAVE DISCHARGED T HE BURDEN THAT LAY UPON THEM WITH REGARD TO PAST YEARS SAVING AVAI LABLE TO EXPLAIN THE INVESTMENT UNDER CONSIDERATION. ADDITION ON THA T ACCOUNT BEING UNWARRANTED, IS DIRECTED TO BE DELETED IN BOTH THES E CASES FOR RS. 4,00,000/- EACH. IN VIEW OF THESE ORDERS, THE LD. COUNSEL FOR THE AS SESSEE CONTENDS THAT FACTS OF ABOVE CASES BEING SIMILAR, THE SAME COURS E OF ACTION I.E. DELETION OF ADDITIONS MAY BE FOLLOWED IN IMPUGNED APPEALS. 3.8 THE LD. DR ON THE OTHER HAND VEHEMENTLY ARGUED THAT:- (I) THE CLAIMS OF THE ASSESSEE ABOUT AGRICULTURAL I NCOME AND DAIRY INCOME HAVE BEEN FOUND TO BE NOT PROPER AND A DDITION MADE AS BY THE LOWER AUTHORITIES HAVE BEEN UPHELD BY ITA T. (II) APROPOS SHARE APPLICATION MONEY, ITAT INSTEAD OF TAKING INDIVIDUAL CASES HAD TAKEN A GENERALIZED VIEW WHICH IS NOT IN ACCORDANCE WITH LAW. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 8 (III) IT IS TRITE LAW THAT ONUS TO EXPLAIN THE CRED ITWORTHINESS ABOUT AVAILABILITY OF FUNDS AND SOURCE OF MONEY IS SQUARE LY ON THE ASSESSEES AND IS TO BE DISCHARGED BY THEM IN EFFECT IVE MANNER. NONE OF THE COURT HAS HELD THAT THIS BURDEN LIES ON THE DEPARTMENT. (IV) IF THE CONSOLIDATED ORDER OF ITAT IN THE CASES OF SMT. KAMLA DEVI CHOUDHARY (ITA NO. 290/JP/2013) AND SMT. CHUKI DEVI CHOUDHARY (ITA NO. 292/JP /2013) IS PERUSED THEN IT WILL BE FOUND THAT ITAT HELD AS UNDER:- (A) NO ADVERSE MATERIAL CONTRARY TO THE CLAIM OF TH E ASSESSEE HAS BEEN BROUGHT ON RECORD. (B) IT HAS BEEN ACCEPTED THAT THERE WAS NO DAIRY I NCOME AND AGRICULTURAL INCOME BUT ITAT HAS DRAWN UNTENABL E INFERENCE THAT THESE FACTS ALONE DOES NOT LEAD TO T HE PRESUMPTION THAT THE SAVINGS WERE NOT AVAILABLE. ITAT HELD THAT NO OTHER INVESTMENTS ARE REPORTED NOR FOUND TO HAVE BEEN MADE BY THESE APPELLANT IN THE P AST NOR IN THE YEAR UNDER CONSIDERATION EXCEPT THE INVESTMENT OF RS. 4,00,000/- EACH IN THE SHARES OF M/S. CHOUDHARY GUM S (P) LTD. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 9 IT IS FURTHER CONTENDED THAT THE ASSESSEES HAVE NO T FILED ANY AFFIDAVIT OR ADDUCED ANY EVIDENCE DEMONSTRATING PAST SAVINGS OR TO ESTABLISHED THE FACTS THAT NO INVESTMENT WHATSOEVER WAS MADE BY THE M IN PAST AS NO STATEMENT OF ASSETS IN ANY CASE HAS BEEN FILED. BES IDES WHEN THERE WAS NO AGRICULTURAL INCOME THEN THE QUESTION OF PAST SAVIN GS OR ACCUMULATION OF CREDIT DOES NOT ARISE. THE LD. DR CONTENDS THAT FIN DINGS OF THE ITAT ARE CONTRARY TO THE RECORD AND BY SUMMARY ASSUMPTION IT HAS BEEN HELD THAT THE ASSESSEES HAD LODGED PLAUSIBLE EXPLANATION , THEY CAN BE SAID TO HAVE DISCHARGED THE BURDEN THAT LAY UPON THEM WITH REGAR D TO PAST YEARS SAVING AVAILABLE TO EXPLAIN THE INVESTMENT UNDER CONSIDERA TION. THE LD. DR CONTENDS THAT THESE FINDINGS ARE TOTALLY UNTENABLE AND OUTLANDISH INASMUCH AS THE ASSESSEES HAVING NOT GIVEN ANY REA SONABLE EXPLANATION AT ALL AND IT CANNOT BE ASSUMED THAT THEY HAVE GIVE N ANY PLAUSIBLE EXPLANATION HAVING PROPENSITY TO DELETE THE ADDITIO NS. IT IS ERRONEOUS TO ASSUME THAT THE ASSESSEES HAVE DISCHARGED THEIR BU RDEN ABOUT AVAILABILITY OF CASH. THE LD. DR FURTHER CONTENDS THAT IN THIS C ASE ALSO, THE FACT REMAINS THAT THESE ASSESSEE'S DID NOT HAVE ANY JUST IFIABLE OR PLAUSIBLE EXPLANATION CLAIM TO SUPPORT EARNING FROM AGRICULTU RAL INCOME AND DAIRY INCOME. NO EVIDENCE HAS BEEN PRODUCED REGARDING ANY PAST SAVINGS. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 10 SIMILARLY, THERE IS NEITHER ANY AFFIDAVIT NOR ENTER TENABLE EXPLANATION THAT THERE WAS ANY AGRICULTURAL INCOME OR DAIRY INCOME I N THE PAST AND THERE WERE ANY SAVINGS SO AS TO ENABLE THE ASSESSEE TO IN VEST THE CASH IN SHARE APPLICATION MONEY. IN THESE CASES, IT IS HELD THAT THERE IS NO DISCHARGE OF BURDEN BY THE ASSESSEE ABOUT THE AVAILABILITY OF CA SH. THUS IN VIEW THEREOF, THE ADDITIONS SUSTAINED BY THE LOWER AUTHO RITIES ARE PROPER. THE ASSESSEE'S CASES ARE NOT COVERED BY ITAT JUDGMENTS (SUPRA) AS PLEADED. 3.9 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS THE FACTS EMERGE FROM RECO RD THAT THE ASSESSEE'S HAVE FAILED TO PRODUCE ANY EVIDENCE AS TO AGRICULTU RAL INCOME AND DAIRY INCOME IN THE YEAR IN QUESTION AND ALSO ACCUMULATIO N OF SAVINGS FROM PAST. THE ASSESSEES HAVE FAILED TO DISCHARGE THEIR BURDEN TO PROVE THE ONUS CAST BY LAW ON THEM TO ESTABLISH THEIR CREDITW ORTHINESS AND AVAILABILITY OF CASH TO INVEST THE MONEY AS SHARE C APITAL IN M/S. CHOUDHARY GUMS (P) LTD. SINCE THE ASSESSEE'S HAVE FAILED TO DISCHARGE THEIR ONUS, THE ADDITIONS AS RETAILED BY THE LOWER AUTHORITIES QUA AGRICULTURAL INCOME, DAIRY INCOME WHEREVER APPLICAB LE AND SHARE APPLICATION MONEY ARE CONFIRMED. THUS THE APPEALS O F THE ASSESSEE'S ARE DISMISSED. ITA NO. 286/JP/2013 SMT. SHANTI DEVI CHOUDHARY VS. ITO WARD- 7(2), JAIP UR . 11 4.0 IN THE RESULT, THE APPEALS OF THE ASSESSEES AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 /02/ 2016 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 4 /02/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- (1) SMT. SHANTI DEVI CHOUDHARY , (2) SMT. RUKMAN DEVI CHOUDHARY , (3) SHRI HEERA LAL CHOUDHAR Y AND (4) SHRI BALDEV CHOUDHARY, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 7 (2), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 286/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR