Income Tax Officer-3(4), Kanpur V. Shri Ram Gopal, Kanpur

ITA 32/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87771 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 16-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRADEEP MEHROTRA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.32/LKW/2014 ASSESSMENT YEAR:2005 - 06 SHRI RAM GOPAL, 133/38, O BLOCK, KIDWAI NAGAR, KANPUR. PAN:ACJPG4578N VS INCOME TAX OFFICER - 3(4), KANPUR. (RESPONDENT) (APPELLANT) SHRI PUNEET KUMAR, D. R. APPELLANT BY SHRI PRADEEP MEHROTRA, ADVOCATE RESPONDENT BY 05/02/2015 DATE OF HEARING 26 /02/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 14/10/2013 FOR THE ASSESSMENT YEAR 2005 - 2006. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.18,50,000/ - MADE BY THE ASSESSING OFFICER BY ACCEPTING THE RECEIPT OF RS.17,50,000/ - RECEIVED BY THE ASSESSEE FROM VARIOUS PERSONS AS SECURITY DEPOSITS AGAINST RENTED PROPER TIES WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE HAD NEITHER DISCLOSED SUCH RECEIPTS/DEPOSITS IN HIS RETURN OF INCOME, BALANCE SHEET NOR DISCLOSED THE SAME TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THAT THE LD. CIT (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ADMITTING THE ADDITIONAL EVIDENCES IN RESPECT OF RECEIPT OF RS.17,50,000/ - WHICH WERE NEVER PRODUCED 2 BEFORE THE ASSESSING OFFICER IN CONTRAVENTION OF PROVISION OF SUB RULE 2 OF RULE 46 OF INCOME TAX RULES,1962. 3. THAT THE LD. CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT GENUINENESS OF DEPOSITS ARE PROVED THOUGH THE BOOKS OF ACCOUNT OF CONCERNS FROM WHERE THE SUM OF RS.17,50,000/ - WAS SAID TO HAVE BEEN WITHDRAWN WERE NOT PRODUCED BEFORE THE ASS ESSING OFFICER FOR VERIFICATION. 4. THAT THE LD. CIT (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT GENUINENESS OF DEPOSITS WAS ENDORSED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. 5. THAT THE LD. CIT (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE INCOME OF RS.1,00,000/ - FROM AGRICULTURE TO PROVE PART DEPOSIT OF RS.20,00,000/ - THOUGH NO SUCH INCOME HAS BEEN DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME FOR THE A.Y. UNDER REFERENCE OR ANY EARLIER A.Y. OR EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. 6. THAT THE LD. CIT (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE AGRICULTURAL INCOME OF RS.1,00,000/ - MERELY ON THE BASIS OF THE HOLDING OF THE LAND WHEREAS MERELY HOLDING OF THE LAND DOES NOT NECESSARILY LEADS TO GENERATING OF AGRICULTURAL INCOME. 7. THAT THE ORDER OF LD. CIT (A) - II, KANPUR DATED 14.10.2013 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 04.10.2007 TO BE RESTORED. 3. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). AT THIS JUNCTURE, A QUERY WAS RAISED BY THE BENCH AS TO HOW MUCH IS THE RENTAL INCOME OF THE ASSESSEE BECAUSE THIS IS THE EXPLANATION OF THE ASSESSEE THAT SECURITY DEPOSIT OF RS.17.50 LAC WAS RECEIVED BY THE ASSESSEE FROM TENANTS. IN REPLY, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE COMPUTATION OF INCOME OF THE ASSESSEE IS AVAILABLE ON PAGE NO. 13 TO 15 OF THE PAPER BOOK . AFTER GOING THROUGH THIS COMPUTATION OF INCOME, IT 3 WAS AGAIN POINTED OUT BY THE BENCH THAT AS PER THE COMPUTATION OF INCOME, THE ASSESSEE HAS DISCLOSED RENTAL INCOME OF ONLY RS.24,600/ - . THE BENCH ALSO WANTED TO KNOW WHETHER THE PROPERTY IN QUESTION WA S LET OUT IN THE PRESENT YEAR OR THE SAME WAS LET OUT PRIOR TO THAT BECAUSE SECURITY DEPOSIT FROM TENANTS IS GENERALLY RECEIVED ONLY WHEN THE PROPERTY IS LET OUT FIRST TIME AND NOT SUBSEQUENTLY. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THESE DETAILS ARE NOT AVAILABLE ON RECORD AND NO QUERY WAS RAISED BY THE AUTHORITIES BELOW ON THIS POINT AND THEREFORE, THE MATTER MAY BE RESTORED TO ASSESSING OFFICER FOR FRESH DECISION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT WHILE MAKING T HE ADDITION, THIS WAS THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT REGARDING THE AMOUNT OF RS.14 LAC, INTRODUCED BY THE ASSESSEE IN THE CASE OF UMESH CHANDRA & ASSOCIATES, THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION. ON THIS BASIS, THE ASSESSING OFFICER MADE THIS ADDITION U/S 69 OF THE ACT. BEFORE CIT(A), THIS WAS THE EXPLANATION OF THE ASSESSEE THAT THIS INVESTMENT WAS MADE OUT OF SECURITY DEPOSIT OF RS.17.50 LAC. BUT THERE IS NO FINDING GIVEN BY ANY OF THE AUTHORITIES BELOW AS T O WHEN THE PROPERTY WAS LET OUT TO THESE TENANTS AND HOW MUCH IS THE RENTAL INCOME FOR WHICH HUGE AMOUNT OF DEPOSIT OF RS.17.50 WAS GIVEN BY THESE NINE TENANTS AS NOTED BY CIT(A) ON PAGES 10 TO 12 OF THE PAPER BOOK. AS PER THE COMPUTATION OF INCOME OF THE ASSESSEE, AVAILABLE I N PAPER BOOK, THE ASSESSEE HAS SHOWN ANNUAL RENTAL VALUE OF ONLY RS.24,600/ - . SINCE NO QUERY WAS RAISED BY THE AUTHORITIES BELOW AND NO MATERIAL IS AVAILABLE ON RECORD IN THIS REGARD AS TO WHEN THE PROPERTY WAS LET OUT AND HOW MUCH IS RENTAL INCOME IN THE PRESENT YEAR OR IN THE IMMEDIATELY SUCCEEDING YEAR, THIS CANNOT BE ACCEPTED THAT HUGE DEPOSIT WAS RECEIVED BY THE ASSESSEE FROM THESE NINE TENANTS. HENCE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO ASSE SSING OFFICER FOR FRESH DECISION AFTER OBTAINING THESE DETAILS FROM THE ASSESSEE AND AFTER EXAMINING THE TENANTS IN THIS REGARD ALONG WITH 4 THE CREDITWORTHINESS OF THE TENANTS. THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF AB OVE DISCUSSION AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 /02/2015. *C.L.SINGH COPY OF THE ORDER F ORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR