The ACIT,GNR Circle, Gandhinagar V. Shri Sameer Shashikant Parekh, Mumbai

ITA 3221/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6498 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JANGID SRDR
• Keywords: Unexplained investment
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI D.K.TYAGI, HONBLE JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, HONBLE ACCOUNTANT MEMBER ITA NO.3221/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING: 24.5.11 DRAFTED: 25.5.11 ASSTT. COMMISSIONER OF INCOME-TAX, GANDHINAGAR, CIRCLE, BLOCK NO.14, 4 TH FLOOR, UDHYOG BHAVAN, SECTOR-11, GNDHINAGAR V/S . SHRI SAMEEER SHASHIKANT PAREKH, 32, MAKER CHAMBER- VI, NAIRMAN POINT, MUMBAI 400 021 PAN NO.AADPP4414G (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI J.P.JANGID, SR-DR RESPONDENT BY:- NONE O R D E R PER D.K.TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME-TAX(APPEALS)-GANDHINAGAR IN APPEAL NO. CIT(A )GNG/131/2008- 09 FOR THE ASSESSMENT YEAR 2006-07. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE FACT THAT NOTICE WAS SENT TO THE ASSESSEE SO WE PROCEEDED TO DECIDE THE APPEAL AFTER HEARING LD. DR. ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 2 3. THE ONLY EFFECTIVE GROUND OF APPEAL IS AGAINST T HE ADDITION OF RS.8 LAKH MADE BY ASSESSING OFFICER U/S 69 OF THE ACT WH ICH HAS BEEN DELETED BY LD. CIT(A). 4. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY ASSESSING OFFICER TH AT AS PER ITS INFORMATION AVAILABLE ON ITD SYSTEM THE ASSESSEE HA S MADE INVESTMENT AMOUNTING TO RS.36 LAKH IN MUTUAL FUNDS DETAILED AS UNDER:- S.NO. DATE MODE NAME OF THE FUND AMOUNT 1 24/10/2005 CHEQUE FRANKLIN TEMPLETON MUTUAL FUND 5,00,000 2 24/10/2005 CHEQUE FRANKLINI TEMPLETION MUTUAL FUND 5,00,000 3 19/08/2005 CHEQUE FRANKLIN TEMPLETION MUTUAL FUND 5,00,000 4 19/08/2005 CHEQUE FRANKLIN TEMPLETION MUTUAL FUND 5,00,000 5 19/08/2005 CHEQUE FIDELITY MUTUAL FUND 4,00,000 6 19/08/2005 CHEQUE FIDELITY MUTUAL FUND 4,00,000 7 19/08/2005 CHEQUE FIDELITY MUTUAL FUND 4,00,000 8. 19/08/2005 CHEQUE FIDELITY MUTUAL FUND 4,00,000 THEREFORE THE ASSESSEE WAS REQUESTED TO FURNISH THE DETAILS THEREOF AND ALSO TO EXPLAIN SOURCE OF INVESTMENT OF RS.36 LAKH IN MUTUAL FUNDS AS DETAILED ABOVE. THE ASSESSEE AFFIRMED TO HAVE MADE INVESTMENT IN MUTUAL FUNDS AMOUNTING TO RS.28 LAKH ONLY. FOR REST OF THE AMOUNT OF RS.8 LAKH, THE ASSESSEE DENIED TO HAVE MADE INVESTM ENT IN RESPECT OF FIDELITY MUTUAL FUND AS SHOWN AT SL. NO. 7 & 8 IN T HE ABOVE TABLE. THE ASSESSING OFFICER THEREFORE INFERRED THAT ASSESSEE HAS MADE INVESTMENT IN FIDELITY MUTUAL FUND AMOUNTING TO RS.8 LAKH AND SAME HAS NOT BEEN RECORDED IN HIS BOOKS OF ACCOUNT. THEREFORE RS.8 LA KH WAS DEEMED TO BE HIS INCOME AND ADDITION FOR THIS ALSO WAS MADE TO T HE ASSESSEES INCOME U/S 69 OF THE ACT BY HIM. ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 3 5. BEFORE LD. CIT(APPEALS) ASSESSEE MADE FOLLOWING SUBMISSIONS:- REBUTTALS & EXPLANATIONS: THE LEARNED ASSESSING OFFICER HAS ERRONEOUSLY MADE ADDITION OF RS.8,00,000/- AND WHILE MAKING SAID ADDITION IGNORI NG THE FOLLOWING FACTS: [A] IN CASE OF THE APPELLANT AS INDIVIDUAL MR SAMEE R S PAREKH IT IS BEEN CONFIRMED BY THE ASSESSEE THAT NO INVESTMENT HAS BEEN MADE IN MUTUAL FUNDS BY HIM DURING THE YEAR IN REFERENCE I.E. F.Y. 2005-06 [ASST. YEAR 2006-07] AS AN INDIVI DUAL. DETAILS OF BANK ACCOUNT HAVE BEEN FILED IN THE COUR SE OF ASSESSMENT. COPY IS AGAIN ENCLOSED AND MARKET HAS A NNEXURE 3 FOR READY REFERENCE. FURTHER AN AFFIDAVIT OF THE APPELLANT, CONFIRMING T HIS STATEMENT IS ALSO ENCLOSED HERE WITH AS ANNEXURE 4 [B] INVESTMENT MADE BY & IN THE NAME OF MINOR DAUGH TER MISS KAHINI SAMEER PAREKH DATE OF DEBIT IN BANK A/C AMOUNT RS. MUTUAL FUND 2.8.05 5,00,000 FRANKLIN INDIA PRIMA FUND 22.8.05 4,00,000 FIDELITY EQUITY FUND 9,00,000 THE ABOVE INVESTMENTS ARE MADE FROM HER SAVING ACCO UNT A/C SB 19060 WITH UNION BANK OF INDIA, NARIMAN POINT BRANC H, AND MUMBAI 400021. COPY OF BANK ACCOUNT, COPIES OF BANK STATEMENTS & S UPPORTING FOR INVESTMENTS HAS BEEN FILED IN THE COURSE OF ASS ESSMENT. THE SAME ARE AGAIN ENCLOSED & MARKED AS ANNEXURE 5 FOR READY REFERENCE. [D] INVESTMENT MADE BY & IN THE NAME OF MINOR DAUGH TER MISS SANJANA SAMEER PAREKH DATE OF DEBIT IN BANK A/C AMOUNT RS. MUTUAL FUND 22.8.05 5,00,000 FRANKLIN INDIA PRIMA FUND 22.8.05 4,00,000 FIDELITY EQUITY FUND 9,00,000 ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 4 THE ABOVE INVESTMENTS ARE MADE FROM HER SAVINGS ACC OUNT (A/C NO.SB 16551) WITH UNION BANK OF INDIA, NARIMAN POIN T BRANCH MUMBAI-400021 COPY OF BANK ACCOUNTS, COPIES OF BANK STATEMENT & S UPPORTING FOR INVESTMENTS HAS BEEN FILED IN THE COURSE OF ASS ESSMENT. THE SAME ARE AGAIN ENCLOSED & MARKED AS ANNEXURE 6 FOR READY REFERENCE. NOW AS STATED BY THE LEARNED A.O THAT INCOME TAX RE CORDS SHOW TOTAL INVESTMENT MADE BY THE APPELLANT IS OF RS.36, 00,000/- OUT OF WHICH A.O HAS ACCEPTED THE SUBMISSION MADE BY THE A PPELLANT THAT RS.28,00,000 WORTH OF INVESTMENT MADE IN EARLI ER YEAR BY THE APPELLANT. SO NOW THE QUESTION IS OF BALANCE INVESTMENT OF RS. 8,00,.000/-? AS PER THE RECORDS AND SUBMISSIONS MADE BY THE APPE LLANT, IT IS VERY CLEAR THAT THE INVESTMENT OF RS.8,00,000/- [RS .4,00,000/- EACH I MADE BY & IN THE NAME OF THE APPELLANTS TWO MINO R DAUGHTERS ARE BEING BY MISTAKE CONSIDER BY THE I. TAX DEPARTM ENT AS INVESTMENT MADE BY THE APPELLANT IN HIS INDIVIDUAL CAPACITY. IT IS TO BE NOTED HERE THAT BEING MINOR GIRLS, AS A PARENTS AND REPRESENTATIVE, APPELLANT NAME IS APPEARING IN THE INVESTMENT RECORDS, BUT INVESTMENT IN THE SAID MUTUAL FUNDS AR E MADE BY BOTH THESE MINOR DAUGHTERS FROM THEIR OWN FUNDS AND FROM THEIR BANK A/C ONLY AS WELL AS INCOME FROM SUCH INVESTMENT D IVIDEND ETC. ARE BEING CREDITED IN THEIR BANK A/C. EVEN THE APPELLANTS WORKING OF INCOME IN THE FORM STATEMENT OF INCOME FILED WITH I. TAX DEPARTMENT, SHOWS DIVIDEND FROM SUCH INVESTMENT AS RECEIVED IN THE NAME OF MINOR AND SAM E IS BEING ACCEPTED BY THE LEARNED A.O. THUS IT IS VERY CLEAR THAT IN THE I TAX RECORDS INV ESTMENT OF RS.4,00,000 EACH IN FIDELITY EQUITY FUND BY KAHINI & SANJANA ARE REFLECTED TWICE IN THE NAME OF SAMEER S PAREKH AS WELL AS IN THE NAMES OF KAHINI & SANJANA. SAME WAS EXPLAINED IN THE COURSE OF ASSESSMENT PROC EEDINGS. HOWEVER THE SAME WAS IGNORED. ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 5 FURTHER IN ORDER TO SUPPORT THE APPELLANTS CONTENT IONS AS TO THE FACTUAL POSITION, THE FOLLOWING IS ENCLOSED: A) CONFIRMATION FROM FIDELITY MUTUAL FUND [ANNEXURE 7] B) AFFIDAVITS BY MR. SAMER S PAREKH CONFIRMING HIS INVESTMENT OF RS.28,00,000/- AND HIS DAUGHTERS INVESTMENTS IN MUTUAL FUNDS [ANNEXURE 4] C) CA CERTIFICATE [AFTER CHECKING RECORDS OF THE AP PELLANT AND ALL FAMILY MEMBERS] CONFIRMING INVESTMENTS MADE BY & STANDING IN WHOSE NAME [ANNEXURE 8] THUS ALL AVAILABLE FACTS INDICATES THAT THERE IS A GROSS MISTAKE EITHER IN THE INCOME TAX DEPARTMENT RECORDS OR IN B ASIC UNDERSTANDING OF FACTS THAT RS.8,00,000/- INVESTMEN TS ARE NOT BEING MADE BY THE APPELLANT AS INDIVIDUAL BUT BY HI S TOW MINOR DAUGHTERS AND SAME IS SHOWN IN THE RECORDS OF THE I TAX DEPARTMENT TWICE! 2. FURTHER WITH REFERENCE TO THE OBSERVATION MADE I N PARA 5 OF THE SAID ASST. ORDER, WE RESPECTFULLY SUBMIT TO THAT IF ONE REFERS TO THE SECTION 69 OF THE I. TAX ACT [EXTRACT OF SECTION 69 OF THE ACT IS REPRODUCED HEREUNDER FOR READY REFERENCE] UNEXPLAINED INVESTMENTS WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENT WH ICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT IF ANY, MA INTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE MATURE AND SOURCE OF INVESTME NT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINI ON OF THE ASSESSING OFFICER, SATISFACTORY THE VALUE OF THE IN VESTMENT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF S UCH FINANCIAL YEAR. THAT FROM THE ABOVE IT IS VERY CLEAR THAT THE SECTI ON 69 OF THE ACT CAN BE INVOKED ONLY IF THERE IS ANY INVESTMENT MADE BY AN ASSESSEE. IN SUPPORT OF OUR SUBMISSION WE PRODUCE HERE UNDER A RECENT CASE JUDGMENT DELIVERED BY NEW DELHI ITAT TDI MARKETING (PJ LTD. V. ASST CIT (ITA NO.1069/DEL HI/2007, DATED 3-10-2008) (NEW DELHI ITAT] ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 6 AN ADDITION UNDER SECTION 69 IS POSSIBLE PROVIDED THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF MAINTAINED AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF INVESTMENT; HOWEVER, WHEN THE ASSESSEE DENIES THE FACT OF HAVING MADE ANY INVESTMENT AND THERE IS NO OTHER MATERIAL EXCEPT THE STATEMENT OF ASSESSEE THAT ANY INVESTMENT HAS BEEN MADE, NO ADDITION CAN BE MADE UNDER SECTION 69 WITHOUT ACTUA LLY FINDING THAT INVESTMENT ARE MADE. UNDER THE FACTS OF THE APPELLANTS CASE, AS EXPLAINE D IN THE COURSE OF ASSESSMENT PROCEEDINGS WITH DOCUMENTARY EVIDENCE & AS STATED ABOVE, NO INVESTMENT OF 8,00,0 00 IS MADE BY APPELLANT AS ALLEGEDLY, STATED BY ACIT IN T HE ASSESSMENT ORDER. HENCE THERE IS NO BASIS WHATSOEVE R, FOR INVOCATION OF SECTION 69 OF THE I. ACT. THIS SUBMISSION OF THE ASSESSEE WAS SENT TO THE ASS ESSING OFFICER FOR HIS COMMENTS. INSPITE OF REMINDER BY THE LD. CIT(A) , THE ASSESSING OFFICER DID NOT GIVE ANY COMMENTS ON THE ISSUE AND THEREFORE LD. CIT(A) PROCEEDED TO DISPOSE OF THE MATTER BY OBSERVING AS UNDER:- WHILE IT IS TRUE THAT THE ASSESSING OFFICER HAD I NFORMATION OF INVESTMENTS BY THE APPELLANT TO THE EXTENT OF RS.36 5,000/-, YET THIS INFORMATION NEEDED TO BE COMPLETE AND TRUE FOR MAKI NG AN ADDITION TO THE DECLARED INCOME OF THE APPELLANT. ON BEING C ONFRONTED WITH THE LIST OF INVESTMENT, THE APPELLANT HAS ACCEPTED PART OF IT WHILE HE DID NOT ACCEPT THE OTHER. AT THIS STAGE THE ONUS WA S STILL ON THE ASSESSING OFFICER TO BRING FORTH EACH AND EVERY DET AIL OF THE INVESTMENT WHICH HE CLAIMS TO HAVE BEEN MADE BY THE ASSESSEE BEFORE HOLDING THAT IT HAS NOT BEEN DISCLOSED OR RE CORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE HAS GIVEN HIS VERSIO N AND HE COULD NOT BE ASKED TO PROVE THE NEGATIVE. NOT ONLY IN THE ASSESSMENT ORDER WE HAVE COMPLETE LACK OF DETAILS O F THE INVESTMENTS FOR WHICH THE ADDITION IS BEING MADE, E VEN WHEN THE MATTER WAS REFERRED BACK, NO FURTHER INFORMATION CA ME FORTH FROM THE ASSESSING OFFICER. MERELY SAYING THAT AN INFORM ATION HAS BEEN RECEIVED REGARDING THE INVESTMENTS, WOULD NOT BE A COMPLETE CONFRONTATION TO THE ASSESSEE BUT IT HAD TO BE IN T ERMS OF THE CHEQUE NUMBER, THE DATE OF DEPOSIT, EXACT DETAIL OF UNITS OF THE ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 7 FUNDS ETC. ETC. THEREFORE, IT IS CLEAR THAT ON THE BASIS OF INFORMATION THAT HAS BEEN BROUGHT ON RECORD AND PART OF WHICH H AS BEEN DENIED BY THE APPELLANT, THE ADDITION OF RS.8,00,00 /- U/S.69 WAS ERRONEOUSLY MADE. AGGRIEVED BY THIS ORDER NOW REVENUE IS IN APPEAL BE FORE US. 6. AT THE TIME OF HEARING LD. DR SUBMITTED THAT ADD ITION OF RS.8 LAKH WAS MADE BY ASSESSING OFFICER IN THE ABSENCE OF DET AILS. BEFORE LD. CIT(APPEALS) ASSESSEE HAS FILED NECESSARY DETAILS A ND LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE ON THE BASIS OF THOSE DETAILS. HE THEREFORE PRAYED THAT MATTER MAY KINDLY BE RESTORED BACK TO T HE FILE OF ASSESSING OFFICER FOR VERIFICATION OF DETAILS FILED BEFORE LD . CIT(A). WE FIND NO MERIT IN THIS ARGUMENT OF LD. DR AS THE SUBMISSION OF THE ASSESSEE WERE DULY SENT TO AO BY LD. CIT(A) FOR VERIFICATION AT HIS EN D. DESPITE THE REMINDER AO DID NOT GIVE ANY COMMENTS ON THE SUBMISSION OF T HE ASSESSEE. WE FURTHER FIND THAT NO GROUND FOR VIOLATION OF RULE 4 6A OF THE INCOME-TAX RULE, 1962 HAS BEEN TAKEN BY REVENUE IN THIS APPEAL . THEREFORE WE FEEL NO NEED TO SEND THE MATTER BACK TO THE FILE OF AO. THE FINDING OF FACT MADE BY LD. CIT(A) WHILE GIVING RELIEF TO THE ASSES SEE HAS NOT BEEN DISPUTED BY LD. DR AT THE TIME OF HEARING AND THERE FORE WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AN D THE SAME IS HEREBY UPHELD. THIS GROUND OF REVENUES APPEAL IS DISMISSE D. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 27/05/2011 SD/- SD/- (D.C.AGRAWAL) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 27/05/2011 *DKP ITA NO.3221/AHD/2009 A.Y. 2006-07 ACIT GNG V. SH SAMEER S PAREKH PAGE 8 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-GNS 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD