JAWANA RAM CHOUDHARY, Jaipur V. ITO, Jaipur

ITA 288/JPR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2998 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-07-2013
• 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; Income from undisclosed sources; Reassessment proceedings

Judgement Text

1 ITA 288-13 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR ( BEFORE SHRI B.R. JAIN, ACCOUNTANT MEMBER ) ITA NO. 288/JP/2013 ASSTT. YEAR : 2004-05. SHRI JAWANA RAM CHOUDHARY, VS. THE INCOME-TAX OFF ICER, JAIPUR. WARD 7(2), JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV SOGANI RESPONDENT BY : MS. ANITA RITESH DATE OF HEARING: 10-07-2013 DATE OF PRONOUNCEMENT: 11-07-2013 ORDER PER SHRI B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 11 TH DECEMBER, 2012 OF LD. CIT (A)-III, JAIPUR RAISES THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. AO HAS ERRED IN REOPENING THE ASSESSMENT AND LD. CIT (A) HAS ALS O 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 REASSESSMENT PROCEEDINGS BEING ILLEGAL AND VOID AB INITO. 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. AO IN MAK ING ADDITION OF RS. 2,29,950/- 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. 2,29,950/-. 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. AO IN MAK ING ADDITION OF RS. 1,44,658/- AS INCOME FROM OTHER SOURCES BY ESTIMATI NG THE AGRICULTURE INCOME AT RS. 35,482/- AGAINST THE DECLARED AGRICUL TURE INCOME OF RS. 1,80,140/-. THE ACTION OF THE LD. CIT (A) IS ILLEGA L, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS ON THE CASE. RELIEF MAY PLEA SE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 1,44,658/-. 2 2. GROUND NO. 1 HAS NOT BEEN PRESSED. THE SAME IS DISMISSED AS NOT PRESSED. 3. IN GROUND NOS. 2 & 3 THE SUBSTANTIVE CHALLENGE I S TO THE ADDITION OF RS. 3,74,608/- AS UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES ON A CCOUNT OF INVESTMENT MADE FOR RS. 4,00,000/- IN CASH INJ M/S. CHOUDHARY GUMS (P). LTD . 4. THE BRIEF FACTS ARE THAT THE ASSESSEE HAD MADE I NVESTMENT OF RS. 4,00,000/- FOR PURCHASE OF SHARES IN THE MONTH OF DECEMBER, 2003. THE COMPANY ALLOTTED 40,000 EQUITY SHARES OF RS. 10/- EACH WHEREBY ASSESSEE BECAME THE SHAREHOLDER AND MEMBER OF THE COMPANY M/S. CHOUDHARY GUMS (P). LTD. THE ASSESSIN G OFFICER IN ASSESSMENT PROCEEDINGS PROCEEDED TO EXAMINE THE SOURCE OF SAID INVESTMENT. THE ASSESSEE EXPLAINED THAT THE SAID INVESTMENT HAS BEEN MADE OUT OF BROKE RAGE INCOME, AGRICULTURAL INCOME OF THE YEAR UNDER CONSIDERATION AND SAVINGS FROM SUCH INCOME IN THE PAST. THE AO OBSERVED THAT THE ASSESSEE HAD DECLARED RS. 49,910/- INCOME FROM BROKERAGE DURING THE YEAR UNDER CONSIDERATION AND AGRICULTURAL INCOME OF RS. 1,80,1 40/-. IN THE ABSENCE OF LIMITED MATERIAL AVAIL ABLE ON RECORD, THE AO ACCEPTED INCO ME FROM AGRICULTURE AT RS. 35,482/-. AS A CONSEQUENCE OF THIS, HE PROCEEDED TO TREAT THE ADDITION OF RS. 3,74,608/- OUT OF THE TOTAL INVESTMENT OF RS. 4,00,000/- AS INVESTMENT MA DE OUT OF UNDISCLOSED SOURCES. 5. THE LD. CIT (A) BEING OF THE OPINION THAT ASSESS EE NOT BEING ABLE TO PROVE ANY PAST SAVINGS FOR WHICH ONUS LAY UPON HIM AS ALSO HE LD BY HON'BLE MADRAS HIGH COURT IN THE CASE OF SMT. VASANTHI VISWESWARAN, 257 ITR 94 A ND ITAT DELHI BENCH IN THE CASE OF MRS. ANISA BATOOL GILANI, 21 SOT 323 CONFIRMED THE ADDITION. 6. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. IN SO FAR AS THE ASSESSMENT OF AGRICULTURAL INCOME IS CONCERNED, THE APPELLANT HAD DECLARED AGRICULTURAL INCOME OF RS. 3 1,80,140/- FOR RATE PURPOSES. THIS INCOME HAS BEEN DECLARED ON ESTIMATE BASIS. NO BASIS HAVE BEEN LAID FOR WORKING OUT THE ESTIMATED INCOME AT RS. 1,80,140/-. IN THE ABSENCE OF ANY RELIABLE BASIS LAID ON RECORD, THE AO PROCEEDED TO ESTIMATE THE AGRICULTURAL INCOME AT RS. 35,482/-. SUCH ESTIMATES MADE BY THE ASSESSING AUTHORITY ARE NOT SHOWN TO BE ARBITRARY NOR THE ASSESSEE HAS BROUGHT ANY RELIABLE MATERIAL ON RECORD TO SHOW AS TO HOW THE ASSESSEES OWN ESTIMATE ARE CORRECT. IN THIS V IEW OF THE MATTER THE INCOME ESTIMATED BY THE ASSESSING AUTHORITY REQUIRES NO INDULGENCE. GROUND IN APPEAL IN THIS RESPECT STANDS REJECTED. 7. IN SO FAR AS THE ADDITION OF RS. 3,74,608/- ON A CCOUNT OF UNEXPLAINED INVESTMENT IN SHARES IS CONCERNED, ON THE CONSIDERATION OF ENTIRE MATERIAL ON RECORD INCLUDING THE STATEMENT OF THE APPELLANT RECORDED BY THE AO, IT I S REVEALED THAT THE ASSESSEE HAS OSTENSIBLE SOURCE OF INCOME BOTH FROM BROKERAGE AS WELL AS AGRICULTURAL ACTIVITIES. THESE INCOMES ARE EARNED FROM PAST SEVERAL YEARS. THE ONL Y INVESTMENT REPORTED ON RECORD IS IN THE SHARES OF M/S. CHOUDHARY GUMS (P). LTD. NO OTHE R INVESTMENT IS FOUND MADE BY THE ASSESSEE. UNDER THE PECULIAR FACTS, I AM SATISFIED THAT THE ASSESSEE HAS JUSTIFIABLY EXPLAINED THE SOURCE OF INVESTMENT FROM CURRENT YEA RS INCOME AND PAST YEARS SAVINGS. I, THEREFORE, DO NOT FIND ANY JUSTIFICATION IN SUSTENA NCE OF ADDITION OF RS. 3,74,608/- FOR UNEXPLAINED INVESTMENT IN SHARES AS ASSESSEES INCO ME FROM UNDISCLOSED SOURCE. THE ADDITION SO MADE IS, THEREFORE, DIRECTED TO BE DELE TED. 8. IN THE RESULT, APPEAL BY ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-7-2013 . SD/- ( B.R. JAIN ) ACCOUNTANT MEMBER JAIPUR, DATED 11/07/2013. 4 D/- COPY FORWARDED TO :- SHRI JAWANA RAM CHOUDHARY, JAIPUR. THE ITO WARD 7(2), JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 288/JP/2013) BY ORDER, A.R. ITAT JAIPUR