ACIT 19(1), MUMBAI V. KAVITA ARJUN MALKANI, MUMBAI

ITA 3103/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1752 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MORYA PRATAP
• Assessee Lawyers: HARI DUDANI
• Keywords: Unexplained investment; Additional evidence
• Section: 143(3); 69

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.3103 /MUM/2013 ( / ASSESSMENT YEAR : 2009-10) ACIT - 19(1), R. NO. 322, PIRAMAL CHAMBERS, 3 RD FLOOR, PAREL, MUMBAI 400 012. / V. SMT. KAVITA ARJUN MALKANI, FLAT NO. 501, GOLDEN TOWER, 12 TH ROAD, KHAR (W), MUMBAI 400 052. ./ PAN : AEWPM8120M ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI MORYA PRATAP ASSESSEE BY : SHRI HARI DUDANI / DATE OF HEARING : 16-12-2015 / DATE OF PRONOUNCEMENT : 30-12-2015 !' / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 31 03/MUM/2013, IS DIRECTED AGAINST THE ORDER DATED 19-02-2013 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 30, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE ARISE IN THIS APPEAL IS REGARDING THE ADDITION OF RS. 1,82,01,000/- MADE U/S 69 OF THE INCOME TAX ACT, 19 61(HEREINAFTER CALLED THE ACT) BY THE LEARNED ASSESSING OFFICER (HEREI NAFTER CALLED THE AO) AS UNEXPLAINED INVESTMENT VIDE ASSESSMENT ORDERS PASSE D U/S 143(3) OF THE ACT ITA 3103/M/13 2 VIDE ORDERS DATED 27-12-2011, WHICH ADDITION WAS D ELETED BY THE CIT(A) VIDE ORDERS DATED 19-02-2013 AFTER ADMITTING THE NEW AND ADDITIONAL EVIDENCES WHICH WERE FILED BY THE ASSESSEE BEFORE THE CIT(A) FOR THE FIRST TIME AND WHICH WERE NOT FILED BY THE ASSESSEE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL DERIVING INCOME FROM HOUSE PROPERTY, BUSINESS, CAPI TAL GAINS AND INCOME FROM OTHER SOURCES. THE CASE WAS SELECTED FOR SCRU TINY FOR FRAMING ASSESSMENT U/S 143(3) READ WITH SECTION 143(2) OF THE ACT . THE ASSESSEE WAS ASKED TO FILE DETAILS WITH RESPECT TO AIR INFOR MATION HIGHLIGHTING THE BANK STATEMENT BUT NO REPLY WAS FILED BY THE ASSESSEE DU RING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT READ WITH SECTION 143(2) OF THE ACT. THE ASSESSEE WAS AGAIN ASKED TO FILE RECONCILIATION STA TEMENT OF AIR AND ULTIMATELY THE ASSESSEE FILED RECONCILIATION IN SUP PORT OF THE TRANSACTIONS REFLECTED WHICH IS REPRODUCED BY THE A.O. IN HIS AS SESSMENT ORDER VIDE PAGE 3. FROM THE PERUSAL OF THE STATEMENT, THE A.O. NOTED T HAT THE ASSESSEE COULD NOT FURNISH THE DETAILS AND SOURCES WITH REGARD TO THE FOLLOWING TRANSACTIONS:- S NO. DATE NAME OF MUTUAL FUND AMOUNT TAXATION MODE ASSESSEES COMMENT 1 31-12-2008 BIRLA SUN LIFE M. FUND 2000000 CHEQUE NO DETAIL AVAILABLE 2 06-01-2009 BIRLA SUN LIFE M. FUND 1000000 CHEQUE NO DETAIL AVAILABLE 3 11-04-2008 ICICI PRUD M. FUND 1500000 CHEQUE NO D ETAIL AVAILABLE 4 31-12-2008 ICICI PRUD M. FUND 3100000 CHEQUE NO D ETAIL AVAILABLE 5 15-10-2008 HDFC MUTUAL FUND 6800000 CHEQUE NO DET AIL AVAILABLE 6 25-04-2008 DSP BLACKROCK F 1000000 CHEQUE NO DETA IL AVAILABLE 7 01-01-2009 IDFC MUTUAL FUND 1000000 CHEQUE NO DET AIL AVAILABLE 8 12-09-2008 LIC MUTUAL FUND 250000 CHEQUE NO DETAI L AVAILABLE 9 19-09-2008 LIC MUTUAL FUND 550000 CHEQUE NO DETAI L AVAILABLE 10 06-01-2009 IDFC MUTUAL FUND 1001000 CHEQUE NO DE TAIL AVAILABLE TOTAL 18201000 ITA 3103/M/13 3 HENCE, THE A.O. MADE THE ADDITION OF RS. 1,82,01,00 0/- U/S 69 OF THE ACT FOR THE ASSESSMENT YEAR 2009-10 VIDE ASSESSMENT ORDERS DATED 27-12-2011 PASSED U/S 143(3) OF THE ACT. 4.AGGRIEVED BY THE ASSESSMENT ORDER DATED 27-12-201 1 OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND SUBMITTED ALL THE DETAILS WHICH WERE IN THE FORM OF NEW AND ADDITIONAL EVIDEN CES. THE ASSESSEE SUBMITTED THAT THE A.O. DID NOT PROVIDE SUFFICIENT DETAILS BY WHICH IT CAN BE ESTABLISHED WHETHER OR NOT THE INVESTMENT WAS MADE BY THE ASSESSEE. THE ASSESSEE FURTHER SUBMITTED THAT AFTER DETAILED VERI FICATION, IT HAS COME TO THE NOTICE OF THE ASSESSEE THAT NONE OF THE INVESTMENTS HAVE BEEN MADE BY THE ASSESSEE WHEREAS ALL THE INVESTMENTS ARE MADE BY CL OSE RELATIVES OF THE ASSESSEE AND THE ASSESSEE NAME APPEARS AS THE SECON D/JOINT NAME ALONG WITH HER CLOSE RELATIVES AND THE PROCEEDINGS WERE INITIA TED BY THE REVENUE IN THE NAME OF THE ASSESSEE WHO IS MERELY AS JOINT/SECOND NAME HOLDER ALONG WITH HER CLOSE RELATIVES. THE ASSESSEE ALSO FILED AN AF FIDAVIT DATED 18-02-2013 TO STATE THAT THE CORRECT POSITION OF REQUIREMENTS OF A.O. WAS NEVER COMMUNICATED BY THEIR COUNSEL MR. ANIL JOSHI AND IF THEY HAD ANY KNOWLEDGE OF WHAT THE A.O. REQUIRED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, ALL DETAILS WOULD HAVE BEEN PROVIDED BY THE ASSESSEE AN D ALL THE INVESTMENTS SO ADDED BY THE AO IN THE HANDS OF THE ASSESSEE U/S 69 OF THE ACT ARE MADE BY THE CLOSE RELATIVES. THE CIT(A) FORWARDED THE DETA ILS PROVIDED BY THE ASSESSEE IN THE COURSE OF APPELLATE PROCEEDINGS TO THE A.O. CALLING FOR THE REMAND REPORT. THE A.O. FILED THE REMAND REPORT WHEREIN T HE A.O. AGAIN STRESSED THAT IN THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS ITSE LF COMMITTED THAT NO DETAILS WERE AVAILABLE IN RESPECT OF MUTUAL FUND IN VESTMENT AND REQUESTED THE AO TO DECIDE THE CASE ON MERIT. THE CIT(A) AFTER C ONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE REMAND REPORT FROM A.O. HEL D THAT ALL THE INVESTMENTS WHICH HAVE BEEN CONSIDERED BY THE A.O. FOR ADDITION TO INCOME OF THE ASSESSEE CONTAINED THE NAME OF THE ASSESSEE AS JOINT/SECON D ACCOUNT HOLDER ALONG ITA 3103/M/13 4 WITH HER CLOSE RELATIVES. THE FIRST NAME IS INVARI ABLY OF SOME OF THE CLOSE RELATIVES OF THE ASSESSEE OR SOME CLOSE ASSOCIATE A ND THE ENTIRE INVESTMENT UNDER CONSIDERATION ARE BY CHEQUE. HE HELD THAT THE RE IS NO CASE FOR ADDITION OF INCOME IN THE HANDS OF THE ASSESSEE SINCE THERE IS NO INVESTMENT IN THE NAME OF THE ASSESSEE AND ACCORDINGLY THE CIT(A) VID E ORDERS DATED 19-02- 2013 DELETED THE ADDITION OF RS.1,82,01,000/- MADE BY THE AO U/S 69 OF THE ACT VIDE ASSESSMENT ORDERS DATED 27-12-2011 PASSED U/S 143(3) OF THE ACT. 5.AGGRIEVED BY THE ORDERS DATED 19-02-2013 OF THE C IT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE ADMISSIO N OF THE NEW AND ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND DELET ION OF THE ADDITION OF RS.1,82,01,000/- MADE BY THE AO U/S 69 OF THE ACT I N THE ASSESSMENT ORDERS U/S 143(3) OF THE ACT DATED 27-12-2011. 6. THE LD. D.R. SUPPORTED THE ORDER OF THE A.O. AND SUBMITTED THAT THE ADDITION MADE U/S 69 OF THE ACT AS UNEXPLAINED INVE STMENT WAS DELETED BY THE CIT(A) ERRONEOUSLY BY ADMITTING NEW AND ADDITIO NAL EVIDENCES WHICH WERE NOT FILED DURING THE ASSESSMENT PROCEEDINGS. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUBMITTED THAT THE ASSESSEE WAS ADDED MERELY AS SIGNATORY TO THE BANK ACCOUNT AND THE INVESTMENTS ARE OWNED BY THE CLOSE RELATIVES OF THE ASSESSEE AND THESE INVESTMENTS AND BANK ACCOUNT ARE OWNED BY THE CLOSE RELATIVES OF THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT THE ASSES SEE WAS NOT AWARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THESE D ETAILS ARE REQUIRED BY THE A.O. WHICH WAS NOT COMMUNICATED BY THE COUNSEL OF T HE ASSESSEE . THE LD. COUNSEL SUBMITTED THAT AN AFFIDAVIT DATED 18-02-201 3 TO THIS EFFECT WAS ALSO SUBMITTED BEFORE THE CIT(A), COPY OF WHICH IS ALSO PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE , THAT THE ASSESSEE WAS NOT AWARE OF THE DETAILS DESIRED BY THE AO. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE ITA 3103/M/13 5 ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN SUBMI TTING THE EVIDENCES BEFORE THE AO BEING NOT AWARE OF THE REQUIREMENTS OF THE A O AS THE COUNSEL OF THE ASSESSEE HAS NOT COMMUNICATED THE SAME TO THE ASSES SEE AND IN THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) ALL THE DETAILS WERE SUBMITTED AFTER COMING TO KNOW OF THE DETAILS REQUIRED BY THE REVENUE AND PO WER OF THE CIT(A) BEING CO-TERMINUS WITH THE POWERS OF THE AO. THE LD. COUN SEL HAS ALSO MADE STATEMENT BEFORE US THAT ALL THESE INVESTMENTS ARE MADE BY THE RELATIVES OF THE ASSESSEE AND THE ASSESSEES NAME IS ONLY THERE AS A SECOND AUTHORISED PERSON ALONG WITH HER RELATIVES AND THESE INVESTMEN TS ARE OWNED BY THE CLOSE RELATIVES AND THE ASSESSEE HAS NO OWNERSHIP INTERES T IN THESE INVESTMENTS EXCEPT THAT THE NAME OF THE ASSESSEE IS INCLUDED AS JOINT/SECOND ACCOUNT HOLDER ALONG WITH THE CLOSE RELATIVES.THE LD. COUNS EL OF THE ASSESSEE SUBMITTED THAT CLOSE RELATIVES OF THE ASSESSEE HAS MADE THESE INVESTMENTS DIRECTLY FROM THEIR BANK ACCOUNTS AND PAYMENTS ARE ALL MADE BY CHEQUES. THE EVIDENCES FILED BEFORE THE CIT(A) SUCH AS BANK STAT EMENTS OF THE CLOSE RELATIVES, STATEMENT OF THE MUTUAL FUND INVESTMENTS HELD BY THE CLOSE RELATIVES OF THE ASSESSEE WHERE THE ASSESSEE NAME I S APPEARING AS JOINT/SECOND ACCOUNT HOLDER ARE ALSO PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PER USED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSE SSEE WAS PREVENTED BY SUFFICIENT CAUSE BEING NOT AWARE OF THE REQUIREMENT S OF THE AO AS THE SAME WAS NOT COMMUNICATED BY THE LD COUNSEL OF THE ASSES SEE TO THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , A S IS EVIDENT FROM THE AFFIDAVIT DATED 19-02-2013 SUBMITTED BY THE ASSESSE E BEFORE THE CIT(A) AND COPY OF WHICH IS PLACED IN THE PAPER BOOK. THE A SSESSEE HAS SUBMITTED ALL THE DETAILS AND EVIDENCES BEFORE THE CIT(A) TO SUP PORT ITS CONTENTIONS THAT THE INVESTMENTS ARE MADE BY THE CLOSE RELATIVES OF THE ASSESSEE DIRECTLY FROM THEIR BANK ACCOUNTS BY CHEQUE AND THE ASSESSEE NAME IS AP PEARING AS ITA 3103/M/13 6 SECOND/JOINT HOLDER ALONG WITH HER CLOSE RELATIVES, WHICH WAS FORWARDED BY THE CIT(A) TO THE A.O. FOR HIS COMMENTS/REMAND REPO RT. THE A.O. SUBMITTED HIS REMAND REPORT WHEREBY HE CHALLENGED THE SUBMISS ION OF ADDITIONAL EVIDENCES BY THE ASSESSEE BEFORE THE CIT(A) AS NOT IN ACCORDANCE WITH RULE 46A OF THE INCOME TAX RULES, 1962. THE CIT(A) AFT ER CONSIDERING THE FACTS OF THE CASE ON MERITS , DELETED THE ADDITION MADE BY T HE AO AFTER ADMITTING ADDITIONAL EVIDENCES AS PER RULE 46A OF INCOME TAX RULES, 1962, WHICH IN OUR OPINION, IS QUITE JUSTIFIED. THE INVESTMENTS OF RS .1,82,01,000/- WHICH HAVE BEEN CONSIDERED BY THE A.O. FOR ADDITION TO INCOME CONTAIN THE NAME OF THE ASSESSEE AS JOINT/SECOND ACCOUNT HOLDER. THE FIRST NAME IS INVARIABLY OF SOME OF THE RELATIVES OF THE ASSESSEE AND THE ENTIRE PAY MENTS ARE MADE THROUGH CHEQUES. THESE EVIDENCES WHICH WERE SUBMITTED BEFOR E THE CIT(A) ARE ALSO PLACED BEFORE THE TRIBUNAL WHICH ARE PLACED IN PAPE R BOOK FILED BEFORE THE TRIBUNAL. IN OUR CONSIDERED OPINION, THE CIT(A) RIG HTLY ADMITTED THE ADDITIONAL EVIDENCES UNDER RULE 46A OF INCOME TAX RULES, 1962 AS THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE AS PER REASONS AS DET AILED ABOVE AND WE FIND NO INFIRMITY IN THE ORDERS DATED 19-02-2013 OF THE CIT (A) DELETING THE ADDITIONS OF RS.1,82,01,000/- MADE BY THE A.O. VIDE ASSESSME NT ORDERS DATED 27-11- 2011 PASSED U/S 143(3) OF THE ACT, WHICH ORDERS OF THE CIT(A) WE UPHOLD. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2015. !' # $% &! ' 30-12-2015 ( ) SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 8 MUMBAI ; &! DATED 30-12-2015 [ ITA 3103/M/13 7 .9../ R.K. R.K. R.K. R.K. , EX. SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ 8 / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. ' / BY ORDER, = 9 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 8 / ITAT, MUMBAI