Malti Devi Sharma, New Delhi V. ITO, New Delhi

ITA 2955/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97381 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 20-08-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 13-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: V RAJA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH E NEW DELHI BEFORE : SHRI I.C. SUDHIR, JUDICIAL MEMBER & SHRI L.P. SAHU , ACCOUNTANT MEMBER ITA NO. 2955 & 2956/DEL./2012 ASSTT. YEAR : 1998 - 99 & 1999 - 2000 MALTI DEVI SHARMA, VS. INCOME - TAX OFFICER, 500, SAINIK VIHAR, PRITAMPURA, WARD 25(1), NEW DELHI. NEW DELHI(PAN: AATPS 5271N] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. K. SAMPATH & SH. V. RAJA, ADV. RESPONDENT BY : SH. P. DAM KANUNJN A, SR. DR DATE OF HEARING : 20.08.2015 DATE OF PRONOUNCEMENT : 22.09 .2015 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS DATED 19.03.2012 OF THE LEARNED CIT(A) - XVIII, NEW DE LHI FOR THE ASSESSMENT YEARS 1998 - 99 AND 1999 - 2000. ITA NO. 2955/DEL./2012 (A.Y. 1998 - 99): 2. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE ADDITION OF RS.5,52,285/ - ON ACCOUNT OF UNEXPLAINED BANK DEPOSITS/LOAN INCLUDING INTEREST. ITA NO. 2955 & 2956/DEL./2012 2 2. THE OBSERVATION OF THE LD. CIT(A) IN THE ORDER THAT OVER THESE YEARS THE APPELLANT HAS NOT PRODUCED THE VDIS DECLARATION CERTIFICATE FOR EXPLAINING THE SOURCE OF DEPOSIT S IN ITS BANK ACCOUNT. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT DID NOT SUPPORT ITS CLAIM WITH A VDIS DECLARATION CERTIFICATE , ARE PERVERSE AND MISLEADING. 3. THE LD. CIT(A) HAS ERRED IN OVERLOOKING AND IN SUMMARILY REJECTING THE DETAILED S UBMISSION GIVEN ALONG WITH THE VARIOUS DOCUMENTS AND EVIDENCES PLACED IN PAPER BOOK DURING THE APPELLATE PROCEEDINGS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 147 ON 22.03.2006 AT AN INCOME OF RS.6,55,515/ - B Y MAKING AN ADDITION ON ACCOUNT OF UNEXPLAINED BANK DEPOSITS . THIS ASSESSMENT WAS CONFIRMED BY THE LD. CIT(A) VIDE ORDER DATED 15.12.2006. THE ASSESSEE THEN PREFERRED APPEAL BEFORE THE ITAT, WHO SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE REVENUE TO DE CIDE THE ISSUE AFRESH AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN PURSUANCE TO THE DIRECTIONS OF THE ITAT, THE ASSESSEE WAS AGAIN REQUIRED TO EXPLAIN THE SOURCE OF BANK DEPOSITS AMOUNTING TO RS.5,52,285/ - . IN RESPONSE, THE ASS ESSEE CLAIMED THAT THE SHE HAD DEPOSITED RS.2,75,000/ - OUT OF AGRICULTURAL INCOME AND CASH OF RS.6,00,000/ - WAS CLAIMED TO BE OUT OF VDIS DECLARATION. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CONTENTION OF ASSESSEE OBSERVING THAT THERE IS NO REAS ON WHY SAME WAS NOT CLAIMED AT THE TIME OF ORIGINAL ASSESSMENT AND IT IS VIRTUALLY IMPOSSIBLE TO VERIFY THE CORRECTNESS OF SUCH CLAIM AND ACCORDINGLY, THE SAME WAS REJECTED. THE MATTER AGAIN TRAVELLED BEFORE THE LD. CIT(A) IN APPEAL BY THE ASSESSEE WHERE T HE ASSESSEE REITERATED ITS CLAIM OF ITA NO. 2955 & 2956/DEL./2012 3 DECLARATION UNDER VDIS AND FILED COPY OF CERTIFI CATE ISSUED FROM THE OFFICE OF COMMISSIONER OF INCOME TAX, DELHI - X, NEW DELHI, BEARING RECEIPT NO. AD 451010 DT. 26.12.1997 IN WHICH A CASH OF RS.6,00,000/ - WAS DECLARED BY THE ASSESSEE. TH E LD. CIT(A), HOWEVER, REJECTED THE CLAIM OF ASSESSEE OBSERVING THAT THE CASE OF ASSESSEE HAS BEEN GOING ON FOR THE LAST 12 YEARS AT VARIOUS STAGES IN ASSESSMENT/APPELLATE PROCEEDINGS AND OVER THESE YEARS, THE ASSESSEE HAS NOT PRODUCED VDI S DECLARATION CERTIFICATE FOR EXPLAINING THE SOURCE OF DEPOSIT IN ITS BANK ACCOUNT. IT WAS ALSO OBSERVED THAT EVEN DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT DID NOT SUPPORT ITS CLAIM WITH A VDIS DECLARATION CERTIFICATE. SHE ALSO OBSERVED THAT IN THE VDIS DECLARATION, THE ASSESSEE HAS PAID TAX OF RS.6,00,000/ - AND AS SUCH THE CASH DECLARED BY THE ASSESSEE UNDER VDIS WOULD HAVE BEEN UTILIZED FOR PAYMENT OF TAX THEREON AND WOULD NOT HAVE BEEN AVAILABLE FOR DEPOSIT IN THE BANK ACCOUNT. 4. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT THE FINDING OF THE FIRST APPELLATE AUTHORITY THAT THE ASSESSEE HAD NOT PRODUCED VDIS DECLARATION CERTIFICATE FOR EXPLAINING THE SOURCE OF DEPOSITS IN BANK ACCOUNT IS PERVERSE AND MISLEADING FOR THE REASON TH E ASSESSEE HAD FURNISHED VDIS DECLARATION CERTIFICATE ALONGWITH ITS DETAILED REPLY DATED 30.11.2009, WHICH HAS NOT BEEN CONSIDERED. IT WAS SUBMITTED THAT CASH OF RS.600000/ - HAS ALREADY BEEN DECLARED UNDER VDIS 1997 AND DUE TAX ON IT HAD ALREADY BEEN PAID AND THEREFORE, IT CANNOT BE PUT TO TAX AGAIN AS IT WILL ITA NO. 2955 & 2956/DEL./2012 4 LEAD TO DOUBLE TAXATION. THEREFORE, THE ORDERS OF THE AUTHORITIES BELOW ARE LIABLE TO BE REVERSED. 5. ON THE OTHER HAND , THE LD. DR CONTENDED THAT DURING THE FIRST ROUND OF PROCEEDINGS, THE ASSESSEE DID NOT PRODUCE THE SAID VDIS DECLARATION CERTIFICATE AT ANY STAGE. IT WAS FOR THE FIRST TIME THAT THE ASSESSEE FILED COPY OF SUCH CERTIFICATE BEFORE THE FIRST APPELLATE AUTHORITY IN THE SECOND ROUND OF PROCEEDINGS AFTER 12 YEARS OF INITIATION OF PROCEEDI NGS, THAT TOO WITHOUT ANY APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE U/R. 46A. THEREFORE, THE SOURCE OF DEPOSIT IN THE BANK CANNOT BE SAID TO BE EXPLAINED ON THE BASIS OF THIS DECLARATION CERTIFICATE . 6. WE HAVE HEARD AND CONSIDERED THE RIVAL SUBMIS SIONS OF BOTH THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF REPLY OF ASSESSEE DATED 30.11.2009 FILED BEFORE THE ASSESSING OFFICER SHOWS THAT THE ASSESSEE HAD ENCLOSED VDIS DECLARATION CERTIFICATE WITH THIS REPLY. HOWEVER, THERE IS NO MENTION IN THE ASSESSMENT ORDER THAT THE SAID CERTIFICATE WAS AVAILABLE BEFORE AND CONSIDERED BY THE AO. THE LEARNED CIT(A) IN THE IMPUGNED ORDER HAS CATEGORICALLY MENTIONED THAT EVEN DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT SUP PORT ITS CLAIM WITH A VDIS DECLARATION CERTIFICATE. THE FACT, HOWEVER, REMAINS THAT THIS DECLARATION CERTIFICATE WAS AVAILABLE WITH THE LD. CIT(A), PHOTOCOPY LAID BEFORE US, AND CLAIM OF DEPOSIT IN THE BANK ACCOUNT OUT OF CASH DECLARED UNDER VDIS, 1997 ITA NO. 2955 & 2956/DEL./2012 5 ALS O STOOD MADE BEFORE THE ASSESSING OFFICER IN THE SECOND ROUND OF PROCEEDINGS. IN OUR OPINION, THE CLAIM OF THE ASSESSEE CANNOT BE SUMMARILY REJECTED WITHOUT VERIFYING THE IMPUGNED DECLARATION MADE UNDER VDIS. THEREFORE, THE MATTER REQUIRES RE - CONSIDERATION AT THE STAGE OF ASSESSING OFFICER WHO SHALL EXAMINE THE CLAIM OF ASSESSEE AFRESH AFTER VERIFYING THE CORRECTNESS AND AUTHENTICITY OF VDIS DECLARATION CERTIFICATE , PARTICULARLY BECAUSE SUCH DECLARATION WAS FURNISHED BEFORE THE REVENUE AUTHORITY AFTER A LAP SE OF ABOUT 12 YEARS OF INITIATION OF ASSESSMENT PROCEEDINGS. IN CASE THE IMPUGNED DECLARATION IS FOUND AUTHENTIC AND CORRECT, CREDIT SHOULD BE GIVEN TO THE ASSESSEE. THE ASSESSEE SHALL BE AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD BEFORE COMPLETING TH E ASSESSMENT. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF AO FOR ADJUDICATION AFRESH IN THE LIGHT OF OBSERVATIONS GIVEN ABOVE . AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO . 2956/DEL./2012 (1999 - 2000): 7. IN THIS APPEAL, THE ASSESSING OFFICER WHILE PASSING FRESH ASSESSMENT ORDER IN PURSUANCE TO DIRECTIONS OF ITAT, MADE AN ADDITION OF RS.4,36,346/ - ON ACCOUNT OF DEPOSIT IN BANK ACCOUNT OUT OF UNEXPLAINED SOURCES. THE AO FOUND THAT SOURCE OF RS.15,00,000/ - STOOD EXPLAINED FROM THE ACCOUNT OF ONE SHRI M.L. SHARMA, BUT REJECTED THE CONTENTION OF ASSESSEE THAT REMAINING SUM OF RS.4,36,346/ - WAS DEPOSITED BY ASSESSEE OUT OF SALE PROCEEDS OF AGRICULTURAL PRODUCE, I.E., CUT FLOWERS, ITA NO. 2955 & 2956/DEL./2012 6 GROWN BY ASSESSEE IN HER AGRICULTURAL LAND. THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE AO HOLDING THAT THE CASE OF THE APPELLANT WAS GOING ON FOR THE LAST 12 YEARS AT VARIOUS STAGES BUT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR EXPLAINING THE SOUR CE OF DEPOSITS IN ITS BANK ACCOUNT AND EVEN DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT SUPPORT ITS CLAIM OF AGRICULTURAL INCOME WITH THE CONFIRMATION. SHE ALSO OBSERVED THAT THE ASSESSEE HAS ALSO NOT MOVED ANY APPLICATION U/R. 46A. 8. WE HAV E HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT THE ASSESSEE HAS BEEN SHOWING AGRICULTURAL INCOME RIGHT FROM ASSESSMENT YEAR 1996 - 97 AND THE SAME IS BEING ACC EPTED BY THE REVENUE AUTHORITIES. THE ASSESSEE HA S ALSO FURNISHED A DETAILED CHART BEFORE THE LD.CIT(A) , WHICH SHOWS THE AGRICULTURAL INCOME RETURNED BY ASSESSEE IN VARIOUS YEARS AS UNDER : A.Y. AGRICULTURE INCOME DISALLOWANCE ASSESSED U/S. SHOWN ------- ------------------------- ------------------ ------------------ 1996 - 97 RS.3,33,110/ - 40,000/ - 143(3) 1997 - 98 RS.414707/ - NIL 158BC 1998 - 99 RS.303705 NIL 143(3)/147 2003 - 04 RS.296900/ - NIL 144 2004 - 05 RS.1,38,600/ - NIL 143(3) 2005 - 06 RS.1,56,100/ - NIL 143(1) 2006 - 07 RS.2,30,000/ - NIL 143(1) ITA NO. 2955 & 2956/DEL./2012 7 9. THE ASSESSEE HAS ALSO SUBMITTED COPY OF KHASRA GIRDAWARI ISSUED FROM THE CONCERNED TEHSIL ON 26.02.99, WHICH ALSO SHOWS THE CULTIVATION OF FLOWERS IN THE AGRICULTURAL LAND OF THE ASSESSEE. IN VIEW OF THESE FACTS, IN OUR CONSIDERED OPINION, THE CLAIM OF THE ASSESSEE THAT THE BANK DEPOSITS WERE MADE OUT OF SALE PROCEEDS OF AGRICULTURAL PRODUCE ACCUMULATED OVER THE YEARS, CANNOT BE REJECTED SUMMARILY. WE, THEREFORE, ACCEPT THE EXPLANA TION OF THE ASSESSEE IN THIS REGARD. ACCORDINGLY, THE IMPUGNED ORDER IS NOT LIABLE TO BE SUSTAINED AND THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 1998 - 99 IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL FOR ASSESSMENT YEAR 1999 - 2000 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.09.2015 . SD/ - SD/ - ( I.C. SUDHIR ) ( L.P. SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES , NEW DELHI