ITO, Ward-2, V. Jai Kumar Singh,

ITA 3010/DEL/2003

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53016 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-10-2011
• Assessment Year: 1991-1992
• Appeal Filed On: 02-06-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JAI KARAN SINGH
• Keywords: Unexplained expenditure; Source of fund; Tax effect
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `B : NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.3010/DEL./2003 (ASSESSMENT YEAR : 1991-92) ITO, WARD 2, VS. SHRI JAI KARAN SINGH, BULANDSHAHR. S/O SHRI HARI SINGH, PROP. M/S RAJDEEP RESTAURANT, BULANDSHAR. (PAN/GIR NO.J-66/INDL.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JAI KARAN SINGH, REVENUE BY : SHRI ROHIT GARG, SR.DR ORDER PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 11.3.2003 AND PERTAINS TO ASSESSMENT YEAR 1991-92. THE GROUND RAISED IS THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,75,000/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69 OF THE ACT. 2. BY THE COMBINED ORDER DATED 12.4.2004, THE ITAT HAS DISMISSED SEVERAL APPEALS INCLUDING THE IMPUGNED ONE ON ACCOUNT OF FACT THAT THE REVENUES EFFECT WAS LESS THAN RE.1 LAKH. 3. VIDE ORDER DATED 23.4.2008, THE HONBLE JURISDIC TIONAL HIGH COURT IN I.T.A. NO. 175 OF 2004 HAD OBSERVED THAT THE TAX EFFECT WAS MO RE THAN RE.1 LAKH AND HENCE IT WAS HELD THAT THE APPEAL OF THE DEPARTMENT WAS DISMISSE D BY THE ITAT ON WRONG ASSUMPTION OF FACTS. THEREFORE, THE HONBLE HIGH COURT REMITT ED THE MATTER TO THE ITAT FOR CONSIDERING THE APPEAL AFRESH. IN CONSEQUENCE OF T HE ABOVE ORDER OF THE HONBLE HIGH COURT, THE CASE WAS FIXED FOR HEARING AND WAS HEARD . 4. IN THIS CASE, ASSESSMENT WAS FRAMED ON 31.3.1997 IN WHICH AN ADDITION OF RS.2,35,000/- HAD BEEN MADE AS UNEXPLAINED INVESTME NT IN PURCHASE OF PLOT OF LAND U/S 69 I.T.A. NO.3010/DEL./2003 (A.Y. : 1991-92) 2 OF THE ACT. THE ASSESSING OFFICER HAD NOTED THAT T HE ASSESSEE HAD MADE INVESTMENT OF RS.3,61,000/- IN THE NAME OF HIS WIFE SMT. PREMWATI DEVI. ON BEING ASKED THE SOURCE OF INVESTMENT, IT WAS EXPLAINED THAT THE SAME WAS INV ESTED FROM THE FOLLOWING SOURCES: I) BY SALE PROCEED OF A PLOT DATED 24.8.90 RS.61, 000/- II. BY SALE PROCEED OF ANOTHER PLOT ON 24.8.90 RS .68,000/- III) BY CASH INHERITED FROM THE WILL OF GRAND FATHE R IN RS.60,000/- AUGUST, 1989 IV) BY CASH INHERITED FROM THE ORAL WILL OF HIS FAT HER AT THE RS.25,000/- TIME OF DEATH. V) BY CASH LOAN FROM THE GRAND MOTHER RS.50,000 /- VI) BY CASH LOAN FROM SHRI SANTOSH KUMAR RS.20,0 00/- VII) BY CASH LOAN FROM SHRI POORAN SINGH RS.40, 000/- VIII) BY LOAN FROM SHRI JUGAL KISHORE RS.20,000 /- IX) BY CASH LOAN FROM SHRI NIHAL SINGH RS.20,00 0/- RS.3,61,000/- 5. AS REGARDS THE SUM OF RS.61,000 AND RS.68,000, H AVING BECOME AVAILABLE FROM THE SALE OF PLOTS, THE ASSESSING OFFICER HAD ACCEPT ED THE AVAILABILITY OF FUNDS TO THIS EXTENT. AS REGARDS THE REMAINING AMOUNT OF RS.2,35 ,000, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD NOT BEEN ABLE TO PROVE THE ABILITY OF THE PERSONS TO PROVE THE LOAN DESPITE SEVERAL OPPORTUNITIES. ACCORDINGLY, HE HAD MADE TH E IMPUGNED ADDITION. 6. ON ASSESSEES APPEAL, THE CIT(A) GAVE A FINDING THAT THE ASSESSEE WAS NOT ASKED TO PRODUCE THE CREDITORS. THE CIT(A) FURTHER FOUND THAT THE ASSESSEE HAD MADE OWN OFFER TO PRODUCE ALL THE PERSONS ON 27.3.97, BUT THE ASS ESSING OFFICER HAD NOT CONSIDERED THE REQUEST ON THE GROUND THAT SUCH REQUEST WAS BEING M ADE TOWARDS FAG END OF THE YEAR. THE CIT(A) FURTHER FOUND THAT THE ADDITION WAS NOT JUST IFIED IN VIEW OF THE FACT THAT ALL THESE PERSONS HAD CONFIRMED TO HAVE ADVANCED THE LOAN BEF ORE ADIT(INV.), GHAZIABAD. THE CIT(A) FOUND THAT THE IDENTITY WAS PROVED AND THERE DID NOT APPEAR ANY ADVERSE COMMENTS ON THE CREDITWORTHINESS. AS REGARDS THE LOAN OF RS.50,000 FROM THE GRAND MOTHER, SMT. ANAR DAI, THE CIT(A) OBSERVED THAT ASS ESSING OFFICER HAD NOT ACCEPTED THE LOAN ONLY ON THE GROUND THAT NO MENTION WAS MADE IN THE WILL AND NOT ON THE BASIS OF THE CREDITWORTHINESS OF THE SOURCES OF INCOME. AS REGA RDS A SUM OF RS.25,000 INHERITED FROM SHRI HARI SINGH, THE CIT(A) FOUND THAT THE PERSON H AS SUBSTANTIAL AGRICULTURAL LAND AND I.T.A. NO.3010/DEL./2003 (A.Y. : 1991-92) 3 ASSESSEE WAS ONLY LEGAL HEIR. HENCE, THE AVAILABIL ITY OF CASH OF RS.25,000/- COULD NOT BE DOUBTED. ACCORDINGLY, CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS.1,75,000/-. 7. AGAINST THIS ORDER, THE REVENUE IS IN APPEAL BEF ORE US. 8. WE HAVE HEARD THE LD.DR. THE ASSESSEE HIMSELF A PPEARED IN PERSON AND WE HAVE HEARD HIM ALSO AND WE HAVE CAREFULLY PERUSED THE RE CORDS. IN OUR CONSIDERED OPINION, THE CIT(A) HAS MADE A REASONABLE ORDER WHICH DOES NOT N EED INTERFERENCE ON OUR PART. THE CIT(A) HAS GIVEN A FINDING THAT CONFIRMATION OF THE ADVANCES WAS GIVEN BEFORE ADIT(INV.), GHAZIABAD. THE CIT(A) HAS ALSO FOUND T HAT ASSESSEE WAS WILLING TO PRODUCE THE PERSONS, BUT THE ASSESSING OFFICER HAS NOT ACCE PTED THE PROPOSITION. THE CIT(A) HAS ALSO FOUND THE COGENCY OF OTHER ASPECTS IN THIS RE GARD. THUS, IN OUR CONSIDERED OPINION, THE ORDER OF CIT(A) DOES NOT SUFFER FROM ANY ILLEGA LITY AND WE CONFIRM THE SAME. 9. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21/10/2011. SD/- SD/- (I.P. BANSAL) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, OCT. 21 ,2011. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR/ITAT