ITO, New Delhi V. Shri Subhash Kalra, New Delhi

ITA 2932/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65844 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 21-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUUJANI MOHANTY
• Assessee Lawyers: B K MANJANI
• Section: 69C; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G: NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 2932/DEL/2012 ASSESSMENT YEAR: 2008- 2009 ITO VS. SUBHASH KALRA WARD-11(2), ROOM NO. 321, D 1 93, LAJPAT NAGAR-1, C.R. BUILDING, NEW DELHI 110 024. NEW DELHI. (PAN AAAPK1577E) (APPELLANT) (RESPO NDENT) APPELLANT BY : SMT. SUUJANI MOHANTY, SR. DR RESPONDENT BY : SHR I B.K. MANJANI, ADVOCATE DATE OF HEARING : 21-08-2012 DATE OF PRONOUNCEMENT : ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLATE O RDER ON THE FOLLOWING GROUNDS :- 1. THE LEARNED CIT (A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN ADMITTING FRESH EVIDENCES UN DER RULE 46A OF THE I.T. RULES. 2. THE LEARNED CIT(A) HAS ERRED ON THE FACTS A ND CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION OF RS. 2,78,471/- U/S 69C OF THE I.T. ACT ON ACCOUNT OF CREDIT CARD EXPENSES. 3. THE LEARNED CIT(A) HAS ERRED ON FACTS AND C IRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION OF RS. 16, 19,882/- U/S 69 ON ACCOUNT OF INVESTMENT MADE IN MUTUAL FUND. ITA NO. 2932/DEL/2012 2 2. THE RELEVANT FACTS ARE THAT ON THE BASI S OF ANNUAL INFORMATION REPORT (AIR) OF THE BANKS THE AO FRAMED ASSESSMENT MAKING ADDITIONS INCLUDING ADDITION OF RS. 2,78,471/- U/S 69 OF THE I.T. ACT ON ACCOUNT OF CREDIT CARD EXPENSES AND OF RS. 16,19,882/- U/S 69 (C) OF THE I .T. ACT ON ACCOUNT OF INVESTMENT MADE IN MUTUAL FUNDS. BEFORE THE LD. CIT (A) THE ASSESSEE MOVED APPLICATION UNDER RULE 46A OF THE I.T. RULES 1962 F OR PERMISSION TO SUBMIT THE EVIDENCES TO PROVE THAT THE ASSESSEE HAD NOT PAID A NY AMOUNT TOWARDS CREDIT CARD AND ALSO NO INVESTMENT IN THE MUTUAL FUND AS M ENTIONED IN THE ASSESSMENT ORDER WERE MADE BY THE ASSESSEE. THE LD. CIT(A) CAL LED FOR REMAND REPORT AND SUBMISSION OF ASSESSEE THEREON AND BEING SATISFIED WITH THE SUBMISSION OF THE ASSESSEE HE HAS DELETED THE ABOVE ADDITIONS IN QUES TION. 3. IN SUPPORT OF THE GROUNDS LD. DR SUBMI TTED THAT THE LD. CIT(A) HAS GIVEN RELIEF WITHOUT COMMENTING UPON THE REMAND REP ORT FURNISHED BY THE AO AND IN ABSENCE OF REBUTTAL THEREOF. HE POINTED OUT THAT COPY OF AIR WAS SUPPLIED BY THE AO TO THE ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS. THUS ASSESSEE WAS NOT RIGHT IN CONTENDING BEFORE THE LD. CIT(A) THAT THE SAME WAS NOT SUPPLIED TO THE ASSESSEE. 4. LD. AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLANT ORDER. HE SUBMITTED THAT IN THE FIRST REMAND REPORT THE AO HA D SIMPLY SUPPORTED THE ADDITIONS IN QUESTION MADE IN THE ASSESSMENT ORDER. ITA NO. 2932/DEL/2012 3 5. CONSIDERING THE ABOVE SUBMISSIONS WE F IND THAT BEING SATISFIED WITH THE REASONS THE LD. CIT(A) HAS RIGHTLY ALLOWED APPLICAT ION U/S 46A OF I.T. RULES 1962. THE REASONS SHOWN WAS THAT COPY OF THE AIR WAS NOT ATTACHED WITH THE NOTICE U/S 142(1) AS ALLEGED BY THE AO AND THUS THERE WAS NO OCCASION WITH THE ASSESSEE TO FURNISH EVIDENCES IN RESPECT OF CREDIT CARD AND MUTUAL FUND ALONGWITH WRITTEN SUBMISSIONS BEFORE THE AO. THE LD . CIT(A) WAS ALSO FAIR ENOUGH IN AFFORDING OPPORTUNITY TO AO TO FURNISH IT S REPORT ON THOSE EVIDENCES AND SUBMISSIONS FILED BEFORE HIM. SINCE THE AO IN H IS REMAND REPORT HAD JUSTIFIED THE ADDITIONS IN QUESTION MET WITH THE ASSESSMENT O RDER AND THE LD. CIT(A) WHILE DELETING THE ADDITIONS HAS MADE THAT THOSE OB JECTIONS RAISED IN THE ASSESSMENT ORDER, WE ARE OF THE VIEW THAT ORDER PA SSED BY THE LD. CIT(A) ON THE ISSUES IS REASONED ONE. FOR A READY REFERENCE P ARA NOS. 5.3 AND 6.3 OF THE FIRST APPELLATE ORDER ARE BEING REPRODUCED :- 5.3 I HAVE CONSIDERED THE SUBMISSION OF THE APPE LLANT, OBSERVATION OF THE ASSESSING OFFICER AND REMAND REPORT OF THE ASSE SSING OFFICER SUBMITTED BY THE ASSESSING OFFICER VIDE HIS LETTER DATED 02.0 4.2012 ON THE ISSUE. IT IS SEEN THAT AN AMOUNT OF RS. 2,78,471/- WAS PAID BY T HE APPELLANT THROUGH HIS CITI BANK CREDIT CARD. THE APPELLANT HAS CLAIME D THAT THESE PAYMENTS HAVE BEEN MADE FROM THE BANK ACCOUNT OF M/S. ESSON F URNISHING PVT. LTD. FORMERLY KNOWN AS ESSON CHEMICALS INDUSTRIES PVT. LT D., IN WHICH APPELLANT IS A DIRECTOR. THE APPELLANT CLAIMS THAT CITI BANK CARD IS A CORPORATE CARD AND SAME IS USED ONLY FOR BUSINESS PURPOSES OF THE COMPANY. THE APPELLANT HAS FILED COPY OF THE CITI B ANK CREDIT CARD STATEMENTS AND COPY OF THE BANK ACCOUNT MAINTAINED WITH JAMMU & KASHMIR BANK LTD. AND HDFC BANK LTD. BY THE ESSON CH EMICAL INDUSTRIES. THE APPELLANT HAS ALSO FILED COPY OF THE CITI BANK CREDIT CARD ACCOUNT FROM THE BOOKS OF M/S. ESSON CHEMICAL INDUSTRIES PVT. LTD . WHEREIN THE CREDIT CARD PAYMENTS MADE BY THE APPELLANT ARE REFLECTED. THE APPELLANT HAS ALSO FILED CONFIRMATION FROM ESSON FURNISHING PVT. L TD. HAVING PAYMENT MADE OF THE CREDIT CARD OF THE APPELLANT, COPY OF T HE RETURN OF INCOME OF ITA NO. 2932/DEL/2012 4 ESSON CHEMICAL INDUSTRIES LTD. ETC. IN SUPPORT OF IT S CLAIM. IT IS SEEN THAT PAYMENTS OF THE CREDIT CARDS HAVE BEEN DEBITED IN H DFC BANK AND J & K BANK ON FOLLOWING DATES:- S.NO. DATE AMOUNT NAME OF BANK WHERE AMOUNT DEBITED 1. 25.05.07 17,761/- HDFC BANK, LAJPAT NAGAR 2. 30.06.07 2,015/- HDFC BANK, LAJPAT NAGAR 3. 03.08.07 2,080/- HDFC BANK LAJPAT NAGAR 4. 29.08.07 47,167/- JAMMU & KASHMIR BANK LTD. 5. 28.09.07 19,439/- JAMMU & KASHMIR BANK LTD. 6. 14.10.07 11,735/- JAMMU & KASHMIR BANK LTD. 7. 30.10.07 21,353/- JAMMU & KASHMIR BANK LTD. 8. 30.11.07 17,159/- JAMMU & KASHMIR BANK LTD. 9. 29.12.07 35,384/- JAMMU & KASHMIR BANK LTD. 10. 02.02.08 82,783/- HDFC BANK, LAJPAT NAGAR 11. 23.02.08 23,045/- HDFC BANK, LAJPAT NAGAR 12. 27.03.08 12,534/- HDFC BANK, LAJPAT NAGAR SINCE, THE EXPENDITURE INCURRED THROUGH CREDIT CARD HAS BEEN DONE ON BEHALF OF ESSON CHEMICAL INDUSTRIES PVT. LT D. THE SAME IS REFLECTED IN THE BANK ACCOUNT OF ESSON CHEMICAL INDUSTRI ES PVT. LTD. AND ITS BOOKS OF ACCOUNTS. THEREFORE, THE EXPENDITURE INCURR ED THROUGH CREDIT CARD STANDS FULLY EXPLAINED. HENCE, THE ADDITION MADE B Y THE ASSESSING OFFICER IN THE HANDS OF THE APPELLANT IS DELETED. ITA NO. 2932/DEL/2012 5 6.3 I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANT, OBSERVATION OF THE ASSESSING OFFICER AND REMAND REPORT OF THE ASSESSIN G OFFICER SUBMITTED BY THE ASSESSING OFFICER VIDE HIS LETTER DATED 2.4.201 2. IT IS SEEN THAT ASSESSING OFFICER HAS MADE ADDITION OF RS. 16.19,88 2/- ON ACCOUNT OF INVESTMENT MADE IN MUTUAL FUNDS. THE ASSESSING OFFI CER HAS MENTIONED THAT INITIAL INVESTMENT OF RS. 2,00,000/- WAS MADE ON 1/2/2007 DRAWN ON HDFC BANK ACCOUNT NO. 1341000078170. THIS INVESTMEN T WAS MADE BY SHRI SUVIT KALRA, SON OF THE APPELLANT. THE INITIAL INVESTMENT WAS MADE IN SUDARAM BNP PARIBAS MUTUAL FUND, THEREAFTER THERE W AS SWITCH IN AND SWITCH OUT AND NO FRESH INVESTMENT WAS MADE. IN SUP PORT OF ITS CONTENTION THE APPELLANT HAS FILED STATEMENT OF SUN DARAM MUTUAL FUNDS AND COPY OF HDFC BANK ACCOUNT IN THE NAME OF SUVIT KALRA WHEREIN RS. 2,00,000/- WAS DEBITED ON 2/2/2007. THE APPELLANT H AS FILED COPIES OF MUTUAL FUNDS STATEMENT ISSUED BY SUNDARAM BNP PARIB AS AND HDFC MUTUAL FUNDS. THE SAME AMOUNT WAS ROTATED IN SWITCH IN AND SWITCH OUT TRANSACTION OF THE MUTUAL FUNDS. THESE EVIDENCES WE RE ALSO PRODUCED BEFORE THE ASSESSING OFFICER BY THE APPELLANT AND A SSESSING OFFICER WAS SATISFIED WITH EXPLANATION AND OTHER DOCUMENTARY PR OOFS FILED BY THE APPELLANT. AS REGARDS THE INVESTMENT OF RS. 4,68,821/-, IT IS SUBMITTED BY THE APPELLANT THAT AN AMOUNT OF RS. 2,50,000/- WAS INVE STED ON 27.12.2006 FROM THE BANK ACCOUNT OF SUBHASH KALRA AND SONS IN HDFC MUTUAL FUND. IN SUPPORT OF ITS CONTENTION, THE APPELLANT HAS FIL ED COPIES OF HDFC MUTUAL FUNDS ACCOUNTS WHEREIN SWITCH IN AND SWITCH OUT ARE REFLECTED. THE APPELLANT HAS ALSO FILED COPY OF BANK STATEMENT OF SHRI SUBHASH KALRA AND SONS WHEREIN RS. 2,50,000/- WAS DEBITED ON 28.1 2.2006. THE ASSESSING OFFICER HAS ALSO EXAMINED THE SOURCE OF T HE SAID INVESTMENT. HENCE, THE INVESTMENT MADE IN HDFC MUTUAL FUND STAN DS FULLY EXPLAINED. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 16,19,882 /- IS DELETED. SINCE, THE EXPENDITURE INCURRED THROUGH CREDIT C ARD HAS BEEN DONE ON BEHALF OF ESSON. CHEMICAL INDUSTRIES PVT. LTD. THE SAME IS REFLECTED IN THE BANK ACCOUNT OF ESSON CHEMICAL INDUSTRIE S PVT. LTD. AND ITS BOOKS OF ACCOUNTS. THEREFORE, THE EXPENDITURE INCU RRED THROUGH CREDIT CARD STANDS FULLY EXPLAINED. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE APPELLANT IS DELETED. ITA NO. 2932/DEL/2012 6 6. THE LD. CIT(A) HAS DEALT WITH THE ISSUES IN DETAIL AND HAS PASSED A REASONED ORDER, WE ARE NOT INCLINED TO INTERFERE TH EREWITH. THE SAME IS UPHELD. THE GROUNDS ARE THUS REJECTED . IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20. 11.2012. SD/- SD/- ( T.S. KAPOOR) ( I.C . SUDHIR ) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATE *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT