Smt. Bhoj Bharti, Ghaziabad V. ITO, Ghaziabad

ITA 338/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7833 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Assessment Year: 2011-2012
• Appeal Filed On: 22-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: APPLICATION REJECTED
• Keywords: Unexplained investment; Salary income; Cost of acquisition; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A .NO.-338/DEL /2016 (ASSESSMENT YEAR-2011-12) BHOJ BHARTI, 8/105, SECTOR-3, RAJENDER NAGAR, SAHIBABAD, GHAZIABAD-201005. PAN-AFTPB5703M (APPELLANT) VS ITO, WARD-1(2), NEW DELHI (RESPONDENT) A SSESSEE BY APPLICATION REJECTED R EVENUE BY SH. K.K.JAISWAL, DR ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 09.10.2015 OF CIT(A), GHAZIABAD PE RTAINING TO 2011 12 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE HONBLE CIT(APPEALS)-GHAZIABAD ERRED ON FACTS AS WELL AS IN LAW IN PASSING THE IMPUGNED ORDER U/S 250 OF THE INCOME TAX ACT, 1961. 2. FOR THAT THE HONBLE CIT(APPEALS)-GHAZIABAD ERRED O N FACTS AS WELL AS IN LAW IN UPHOLDING THE ADDITION OF RS.9,21,100/- O N ACCOUNT OF CASH PAYMENT TOWARDS THE PURCHASE OF THE PROPERTY. 3. FOR THAT THE HONBLE CIT(APPEALS)-GHAZIABAD ERRED O N FACTS AS WELL AS IN LAW IN ENHANCING THE ASSESSEES INCOME BY RS.5,0 0,000/- AS UNACCOUNTED INVESTMENT. 4. FOR THAT THE HONBLE CIT(APPEALS)-GHAZIABAD ERRED O N FACTS AS WELL AS IN LAW IN UPHOLDING THE PENALTY PROCEEDINGS AGAINST THE ASSESSEE U/S 271(1)(C) DESPITE THAT NO CASE OF CONCEALMENT/SUBMI SSION OF INACCURATE PARTICULARS OF INCOME HAS BEEN MADE OUT AGAINST THE ASSESSEE. 5. THE ASSESSEE CRAVES LEAVE TO PUT, ALTER AND/OR AMEN D THE GROUND(S) AT THE TIME OF HEARING. DATE OF HEARING 16.03.2016 DATE OF PRONOUNCEMENT 05.05.2016 I.T.A .NO.-338/DEL /2016 2 OF 6 2. AT THE TIME OF HEARING, AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE REQUESTING FOR TIME. IN VIEW OF THE FACT T HAT THE MATERIAL AVAILABLE ON RECORD FOR DECIDING THE APPEAL NEEDS TO BE BROUGHT ON RECO RD, THE SAID REQUEST WAS REJECTED. THE RELEVANT FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL DERIVING SALARY INCOME. THE ASSESSEE WAS REQUIRED T O EXPLAIN SOURCE OF CASH OF RS.9,21,100/- UTILIZED TOWARDS PURCHASE COST, STAMP DUTY AND REGISTRATION CHARGES OF A PROPERTY FOR RS. 32 LAKH FOR WHICH PAYMENT OF RS.1,85,000/- HAD BEEN MADE IN CASH AND FURTHER CASH PAYMENT OF RS.7,36,100/- WERE FOUND TO HAVE BEEN MADE TOWARDS PURCHASE OF STAMP DUTY AND REGISTRATION CHA RGES. IN RESPONSE TO THE QUERY THE ASSESSEE IS FOUND TO HAVE SURRENDERED THE SAID AMOUNT RESULTING IN AN ADDITION OF RS.9,21,100/-. 3. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE FILED A STATEMENT OF FACTS. RELYING ON THE SAME IT WAS SUBMITTED THA T THE ASSESSEES HUSBAND IS ONE OF THE MEMBERS OF THE SHRI VARSHNEY BHAWAN TRUST, G HAZIABAD. DUE TO CERTAIN TEMPORARY FINANCIAL HARDSHIPS FACED BY THE SAID TRU ST THE ASSESSEE WAS REQUESTED TO ARRANGE THE REQUIRED FUNDS TO BUY THE SAID PROPERTY IN HER NAME WITH THE CLEAR UNDERSTANDING THAT ONCE THE TRUST IS ABLE TO ARRANG E THE REQUIRED FUNDS, THE PROPERTY WOULD BE TRANSFERRED BY HER TO THE TRUST. ACCORDINGLY THE PROPERTY WAS REGISTERED IN THE NAME OF THE ASSESSEE. INTENTION OF THE PARTIES TO THIS EXTENT WERE PUT IN WRITING AND RELIED UPON BEFORE THE CIT(A). IT WAS SUBMITTED THAT THE ASSESSEE AT THE TIME OF HEARING MISTAKENLY SUBMITTED THAT TH E FUNDS WERE FROM WITHDRAWAL OF RS.11,75,000/- FROM ACCOUNT OF M/S PRAVEEN ENTERPRI SES PROP. MR. PRAVEEN GUPTA [SON OF THE ASSESSEE]. THE AO DURING THE ASSESSMEN T PROCEEDINGS CONSIDERING THE I.T.A .NO.-338/DEL /2016 3 OF 6 ASSESSEES SUBMISSIONS CONFRONTED THE ASSESSEE THAT THIS WOULD BE A VIOLATION OF SECTION 269SS OF THE INCOME TAX ACT, 1961. IN VIEW OF THIS CONFUSION, THE ASSESSEE HAD SURRENDERED THE AMOUNT. SIMILARLY THE AO WAS ALSO FAULTED FOR RELYING ON THE DOCUMENT DEMONSTRATING THE INTENTION OF THE PARTY T O TRANSFER THE SAID PROPERTY TO THE VARSHNEY BHAWAN TRUST FOR CONCLUDING THAT IT WA S WORTH RS.37 LAKHS AND THE CLAIM THAT IT WAS PURCHASED FOR RS. 32 LAKHS WAS NO T ACCEPTED LEADING TO THE ADDITION OF RS.5 LAKHS. THE ARGUMENT THAT THE ASSE SSEE WAS ABLE TO BARGAIN AND CONVINCE TO PURCHASE AT A LESSER PRICE WAS NOT ACCE PTED BY THE CIT(A). 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL. 5. AT THE TIME OF HEARING, AN ADJOURNMENT WAS MOVED BY THE LD.AR STATING LACK OF PREPARATION SINCE THE CONCERNED LADY DUE TO ADVA NCED AGE WAS NOT KEEPING GOOD HEALTH. THE SAID REQUEST FOR ADJOURNMENT WAS REJEC TED AS IT WAS FOUND THAT MERE GRANT OF TIME AT THIS STAGE WOULD NOT SERVE ANY PUR POSE SINCE THE MATERIAL AVAILABLE ON RECORD WAS INSUFFICIENT TO DECIDE THE APPEAL. T HE LD. SR. DR HAS BEEN HEARD. ON A CONSIDERATION OF THE ENTIRETY OF THE FACTS AND CI RCUMSTANCES, WE ARE OF THE VIEW THAT NO DOUBT IT IS THE DUTY OF THE AO TO DECIDE ON FACTS WHETHER CORRECT AND DUE TAXES UNDER THE ACT HAVE BEEN PAID OR NOT. TOWARDS THIS END, DETERMINATION OF THE CORRECT TAXABLE INCOME OF AN INCOME IS HIS ONEROUS DUTY AND RESPONSIBILITY. HOWEVER, WE ARE EQUALLY CLEAR THAT IN THE PERFORMAN CE OF THIS DUTY, HE IS TO ENSURE THAT WHAT IS TO BE TAXED UNDER THE INCOME TAX IS TH E TAXABLE INCOME OF THE ASSESSEE AND NOT THE MISTAKES COMMITTED BY THE ASSESSEE IN E XPLAINING ITS INCOME. 5.1. IN THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ASSESSEE MADE THE PLEA BEFORE THE CIT(A) THAT THE SURRENDER MADE BY THE AS SESSEE BEFORE THE AO WAS NOT I.T.A .NO.-338/DEL /2016 4 OF 6 ONLY ON INCORRECT FACTS BUT WAS ALSO ON ACCOUNT OF THE FACT THAT THE AO INFORMED THE ASSESSEE THAT THE ACCEPTANCE OF A LOAN FROM HER SON WOULD LAY HER OPEN TO VIOLATION OF SECTION 269SS AND ALSO EXPOSE HER SON TO VIOLATI ONS UNDER THE ACT. THE SAID ADVISE WAS BASED ON INCORRECT FACTS IS A PLEA WHICH HAS BEEN RAISED AND HAS NOT BEEN EXAMINED. THE PLEA SO MADE BEFORE THE LD. CIT (A) SHOULD HAVE BEEN CONSIDERED. WE FIND THAT THE PLEA ULTIMATELY MADE THAT THE SAID AMOUNT WAS NOT A LOAN FROM HER SON TO HER BUT INFACT WAS AN AMOUNT T RANSFERRED BY WAY OF AN ACCOUNT PAYEE CHEQUE BY THE VARSHNEY BHAWAN TRUST H AS NOT BEEN EXAMINED. WE ALSO FIND THAT AS PER THE SUBMISSIONS MADE BEFORE T HE CIT(A) FOUND EXTRACTED IN THE ORDER AT PAGE 5 PARA 7, MR. ANAND KUMAR THE SELLER WAS PERSUADED BY THE TRUSTEES TO AGREE TO SELL THE PLOT AT RS.32 LACS AS THE TRUS T COULD NOT AFFORD RS.37 LACS. THUS MERELY BECAUSE AN EVIDENCE IN SUPPORT OF THE INTENT ION EXPRESSED TO ULTIMATELY TRANSFER THE PROPERTY IN FAVOUR OF THE TRUST AS AND WHEN THE TRUST WAS ABLE TO MEET THE COSTS DOES NOT IPSI DIXIT LEAD TO THE CONCLUSION THAT THE PROPERTY WAS ACTUA LLY PURCHASED AT THE PRICE OF RS.37 LACS AS EARLIER CON TEMPLATED. THE EVIDENCE THAT THE TRANSACTION ULTIMATELY TOOK PLACE AT THE PRICE OF R S. 32 LACS NEEDS TO BE EXAMINED ON THE BASIS OF SUPPORTING EVIDENCE ON RECORD. THE CLAIM CANNOT BE OUTRIGHTLY REJECTED WITHOUT ASSAILING THE VERACITY OF THE EVID ENCES RELIED UPON. IT IS SEEN THAT THE ASSESSEE IN SUPPORT OF ITS CLAIM SUBMITTED A SW ORN AFFIDAVIT OF MR. ANAND KUMAR, THE SELLER, CONFIRMING THAT THERE WAS NO CA SH TRANSACTION AT ALL IN HIS CASE. APART FROM THAT, RELIANCE WAS ALSO PLACED ON THE AF FIDAVIT OF THE GENERAL SECRETARY OF SRI VARSHNEY BHAWAN TRUST, GHAZIABAD TO SUPPORT THE CLAIM THAT THE SAID PLOT WAS PURCHASED AT A PRICE OF RS.32 LACS WHICH CLAIM TOO NEEDS TO BE EXAMINED. I.T.A .NO.-338/DEL /2016 5 OF 6 ACCORDINGLY IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT IN THE FACTS OF THE PRESENT CASE JUSTICE HAS N OT BEEN DONE. THE DUTY OF THE ASSESSING OFFICER/ THE TAX ADMINISTRATION IS NOT ON LY TO ENSURE COLLECTION OF MAXIMUM REVENUE FOR THE STATE BUT IT IS ALSO THE ON EROUS RESPONSIBILITY AND THE DUTY TO ENSURE THAT THE TAX SO COLLECTED IS ACTUAL LY DUE TO THE STATE. THE TAX COLLECTIONS BASED ON THE MISTAKES AND IGNORANCES OF THE TAXPAYER CANNOT BE UPHELD AS A SUBSTANTIVE LEGAL PRINCIPLE. SUCH AN EXERCISE STRIKES AT THE VERY ROOT OF THE TAX COLLECTION ADMINISTRATION WHICH IS PRESUMED TO BE JUST AND FAIR. THE TAX ADMINISTRATION IS PRESUMED TO ENFORCE THEIR POWERS APPLYING THE RULE OF LAW ALONGWITH ITS EVER GROWING CONCRETE CONNOTATIONS AN D NOT JUST APPLYING THESE IN A PRE-FUNCTORY MANNER BY PAYING LIP SERVICE TO THESE AS ABSTRACT PRINCIPLES OF REGULAR POWER. THE POWER COMES MARRIED TO DUTY AND RESPONS IBILITY PRESUMING THAT TAX DETERMINATION IS DONE AS PER LAW, FACTS AND EVIDENC ES THROUGH THOUGHTFUL RULINGS WHILE DETERMINING AND DECIDING EVERY TAX ISSUE BEIN G LITIGATED IN A JUST AND FAIR MANNER AT ALL TIMES. 5.2. ACCORDINGLY IN THE PECULIAR FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ISSUE SHOULD BE RESTORED BACK. SINCE THE EVIDENCES ARE FRESH EVIDENCES AFTER HEARING THE LD. SR.DR WHO STATES TH AT THE CORRECT AUTHORITY IN THE CIRCUMSTANCES WOULD BE THE AO AND NOT THE CIT(A), W E REMAND THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUN ITY OF BEING HEARD. THE ASSESSEE IS GIVEN LIBERTY TO PLACE NECESSARY EVIDENCES IN SU PPORT OF ITS CLAIM NAMELY EVIDENCE BY WAY OF WHICH THE CLAIM THAT THE SAID AMOUNT OF R S. 11 LACS ODD WAS RECEIVED BY I.T.A .NO.-338/DEL /2016 6 OF 6 WAY OF AN ACCOUNT PAYEE CHEQUE HANDED OVER TO VARSH NEY BHAVAN TRUST, GHAZIABAD FOR ARRANGING THE EXECUTION OF THE DEED. SIMILARLY CONFIRMATION OF MR. ANAND KUMAR FROM WHOM THE SAID PLOT WAS PURCHASED IS ALSO RELEV ANT EVIDENCE WHICH CAN BE RELIED UPON OR ANY OTHER EVIDENCE WHICH THE AO CONS IDERS IT FIT AND APPROPRIATE. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 OF MAY, 2016. SD/- SD/- (PRASHANT MAHARISHI) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/05/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSIS TANT REGISTRAR ITAT NEW DELHI