The ITO-3(2), Indore V. Smt. Kadambari C. Mansata, Indore

ITA 306/IND/2013

• Counselvise Citation: 30622714 RSA 2013
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: H P VERMA; SAKSHI VERMA

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 306/IND/2013 A.Y. 2008-09 INCOME TAX OFFICER 3(2), INDORE :: APPELLANT VS SMT. KADAMBARI C. MANSATA INDORE PAN ACRPC 6284F :: RESPONDENT APPELLANT BY SHRI G.S. GAUTAM RESPONDENT BY SHRI H.P. VERMA AND MISS SAKSHI VERMA DATE OF HEARING 19.8.2013 DATE OF PRONOUNCEMENT 19.8.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS IN APPEAL AGAINST THE IMPUGNED ORD ER DATED 23 RD JANUARY, PASSED BY THE LEARNED FIRST APPELLATE AUT HORITY. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO G RANTING RELIEF OF RS. 15 LACS BY THE CIT(A) ON ACCOUNT OF UNEXPLAI NED INVESTMENT IN MUTUAL FUND WITHOUT OBTAINING REMAND REPORT FROM 2 THE ASSESSING OFFICER BY ADMITTING ADDITIONAL DOCUM ENTARY EVIDENCE. 2. DURING HEARING, WE HAVE HEARD SHRI G.S. GAUTAM, LEARNED SENIOR DR AND SHRI H.P.VERMA, ALONG WITH MISS SAKSH I VERMA, LEARNED COUNSEL FOR THE ASSESSEE. MR. GAUTAM DEFEND ED THE ASSESSMENT ORDER WHEREAS THE LEARNED COUNSEL FOR TH E ASSESSEE SUPPORTED THE IMPUGNED ORDER BY SUBMITTING THAT THE IMPUGNED AMOUNT WAS PROPERLY EXPLAINED BY INVITING OUR ATTEN TION TO PAGE 32 OF THE PAPER BOOK. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION A ND THE CONCLUSION DRAWN BY THE LEARNED CIT(A) :- 4.3 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE APPELLANTS SUBMISSION. HAVING CONSIDERED BOTH , I FIND THAT THE A.O. VIDE HEARING ON 03.05.2010 HAS SPECIFICALLY ASKED THE APPELLANT TO FURNISH THE DET AILS OF INVESTMENT IN PRINCIPAL MUTUAL FUND OF RS. 15,00,00 0/-. HOWEVER DURING ASSESSMENT PROCEEDINGS, THE APPELLANTS AR SUBMITTED THAT THE APPELLANT HAS NOT 3 MADE ANY INVESTMENT IN MUTUAL FUNDS. CONSIDERING TH E SAME, THE A.O. ENQUIRED TO THE PRINCIPAL OFFICER OF THE PRINCIPAL ASSET MANAGEMENT COMPANY PVT. LTD. AND FOUND THAT THERE WAS AN INVESTMENT OF RS. 15,00,000 /- IN THE NAME OF SMT. KADAMBARI C MANSATA. ACCORDINGLY AS THE APPELLANT HAS DENIED THE SAID INVESTMENT, THE A.O. TREATED THAT SAID INVESTMENT A S UNEXPLAINED AND ADDED THE SAME TO THE INCOME OF THE APPELLANT. 4.4 BEFORE THE UNDERSIGNED, THE A/R OF THE APPELLAN T SUBMITTED THAT THE APPELLANT WAS NOT AWARE ABOUT SUCH INVESTMENT AS THE APPELLANT WAS OUT OF INDIA A T THAT INSTANCE. FURTHER IT IS ALSO SUBMITTED THAT TH E APPELLANT HAS ENTERED WITH AN AGREEMENT WITH M/S IL & FS LTD. BY WHICH THE APPELLANT HAS GIVEN FULL RIG HTS TO THE IL & FS LTD. BY WHICH THE APPELLANT HAS GIVE N FULL RIGHTS TO THE IL & FS FOR MAKING INVESTMENT IN MUTUAL FUND & OTHER INVESTMENT AS PER AGREEMENT ENTERED BY THE APPELLANT. A COPY OF THE SAID AGREE MENT IS ALSO ANNEXED AT PAGE 9 TO 22 WITH THE PAPER BOOK FILED DURING THE APPELLANT PROCEEDINGS. I FIND THAT THE 4 APPELLANT HAS GIVEN POWER OF ATTORNEY TO THE SERVIC E PROVIDER I.E. IL & FS FOR INVESTING AND OPERATING I N SHARE AND MUTUAL FUNDS. IT IS ALSO EVIDENT THAT THE AGENCY TO WHOM THE APPELLANT HAS AUTHORISED FOR MAKING THE INVESTMENT FROM THE APPELLANTS OWN FUND , HAS INVESTED THE AFORESAID SUM OF RS. 15 LACS OUT O F SALE PROCEEDS OF THE APPELLANT COMPANY AS EVIDENT FROM THE COPY OF ACCOUNTS FILED BY THE APPELLANT. I FIND THAT THE APPELLANT WAS NOT AWARE OF SUCH INVESTMENT AS THE APPELLANT WAS ABROAD DURING THAT PERIOD AND ACCORDINGLY THE COUNSEL AFTER ENQUIRING FROM THE ACCOUNTANT OF THE APPELLANT ADMITTED BEFORE THE A.O . THAT NO SUCH INVESTMENT HAS BEEN MADE BY THE APPELLANT UNDER WRONG NOTION. SINCE THE INVESTMENT HAS BEEN MADE DIRECTLY THROUGH PMS PROVIDER I.E. IL AND FS LTD., THE APPELLANT COULD NOT ASCERTAIN THE CORRECT POSITION OF THE INVESTMENT IN SUCH A SHORT SPAN. IT IS MAINLY DUE TO LACK OF INFORMATION FROM PMS PROVIDER, THE APPELLANT COULD NOT ESTABLISH THE CORRECTNESS OF THE INVESTMENT. I AGREE WITH THE APPELLANT THAT IF THE APPELLANT WOULD HAVE AFFORDED 5 REASONABLE TIME, IT WOULD HAVE ENQUIRED FROM THE PM S PROVIDER IN RESPECT OF SUCH INVESTMENT AND WOULD HA VE GIVEN THE CORRECT POSITION OF THE INVESTMENT. IT IS ALSO SEEN FROM THE BOOKS OF IL & FS LTD. THAT IN THE NAM E OF THE APPELLANT, THE TRANSACTION HAS TAKEN PLACE. EVE N THE LEDGER ACCOUNTS OF THE APPELLANT ALSO SHOW THE SAID INVESTMENT IN MUTUAL FUND FROM APPELLANTS SOURCE O F INCOME. FURTHER IT IS ALSO EVIDENT THAT THE APPELLA NT HAS MADE THE INVESTMENT OUT OF ITS OWN FUND AND NO BORROWED FUND IS UTILISED FOR MAKING SUCH INVESTMEN T. THUS, TAKING NOTE OF THESE FACTS, I CONSIDER IT PRO PER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTI FIED IN MAKING THE AFORESAID ADDITION TO THE INCOME OF T HE APPELLANT. HENCE, THE ADDITION SO MADE BY THE A.O. IS DELETED. ACCORDINGLY, THE APPELLANTS APPEAL IS ALL OWED. 5. IN THE RESULT, THE APPEAL OF THE APPELLANT IS ALLOWED. 2.2 IF THE TOTALITY OF FACTS AVAILABLE ON RECORD, O BSERVATION MADE IN THE ASSESSMENT ORDER, CONCLUSION DRAWN IN THE IM PUGNED ORDER AND THE ASSERTIONS MADE BY THE LEARNED RESPEC TIVE COUNSEL, ARE KEPT IN JUXTAPOSITION AND ANALYSED, WE FIND THA T THE LEARNED 6 CIT(A) EXAMINED THE DETAILS OF INVESTMENT IN PRINCI PAL MUTUAL FUND AND FOUND THAT THE ASSESSEE ENTERED INTO AN AG REEMENT WITH M/S IL & FS LIMITED BY WHICH THE ASSESSEE GAVE FULL RIGHTS TO IT FOR MAKING INVESTMENT IN MUTUAL FUND AND OTHER INVE STMENT AS PER THE AGREEMENT. THE COPY OF THE SAID AGREEMENT W AS MADE AVAILABLE IN THE PAPER BOOK. POWER OF ATTORNEY WAS GIVEN TO THE SERVICE PROVIDER FOR MAKING THE INVESTMENT IN MUTUA L FUNDS/SHARES. THE INVESTMENT OF THE IMPUGNED AMOUN T WAS MADE OUT OF SALE PROCEEDS OF THE APPELLANT COMPANY AND SUCH INVESTMENT WAS DIRECTLY MADE THROUGH PMS PROVIDER A ND THE ASSESSEE WAS NOT AWARE ABOUT THE CORRECT POSITION W HEN THE ASSESSMENT WAS FRAMED AND DUE TO LACK OF INFORMATIO N, THE ASSESSEE COULD NOT PROVIDE THE NECESSARY DETAILS OF SUCH INVESTMENT. THE INVESTMENT WAS FOUND TO BE MADE OU T OF OWN FUNDS AND NO BORROWED FUNDS WERE UTILISED FOR MAKIN G SUCH INVESTMENT. DURING HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE LEDGER ACCOUNT FOR THE PERIOD FROM IST APRIL, 2007 TO 31 ST MARCH, 2008 (PAGE 32 OF THE PAPER BOOK) WHEREIN THE OPENING BALANCE WAS AVAILABLE TO THE TU NE OF RS.15,40,168/- OUT OF WHICH RS.15 LACS WAS INVESTED IN MUTUAL FUND VIDE CHEQUE NO. 605960, DIRECT TO BROKER. THU S, IT IS DULY 7 EXPLAINED. THE ASSESSEE ENTERED INTO AN AGREEMENT (PAGES 11 TO 25 OF THE PAPER BOOK), THE TRANSACTION WAS REFLECTE D IN THE LEDGER ACCOUNT OF IL & FS LIMITED IN THE BOOKS OF THE ASSE SSEE (PAGES 32 AND 27 OF THE PAPER BOOK) AND AGAINST THIS INVESTME NT A SUM OF RS. 15,80,000/- WAS RECEIVED WHICH WAS CREDITED TO ASSESSEES ACCOUNT IN HSBC BY IL & FS LIMITED (PAGE 34 OF THE PAPER BOOK), MEANING THEREBY IT IS A RECORDED TRANSACTION. IN VI EW OF THESE FACTS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 19.8.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 19.8.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-1919 8