Murti Devi, Gurgaon V. ITO, New Delhi

ITA 357/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6712 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 10-11-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 25-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 357(DEL)/2010 ASSESSMENT YEAR: 2005-06 MURTI DEVI, INCOME-TAX OFFICER, HOUSE NO. 1470, PART-II, VS. WARD 1 6(4), NEW DELHI. SECTOR 15, GURGAON. PAN-AGHPD1677M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURJEET SINGH, C.A. RESPONDENT BY: SH RI N.K. CHAND, SR. DR ORDER PER K.G. BANSAL : AM THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORD ER OF CIT(APPEALS), PANCHKULA, PASSED ON 2.11.2009 IN APPEAL NO. 107/G GN/07-08 PERTAINING TO ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS TAKEN UP THREE GROUNDS IN THE APPEAL TO THE EFFECT THAT THE LD. CIT(A) ERR ED IN UPHOLDING THE ADDITIONS OF (I) ` 2,25,000/- REPRESENTING STRIDHAN AND PAST SAVINGS OF THE ASSESSEE; (II) ` 1,10,000/- RECEIVED BY THE ASSESSEE FROM THE J OINT ACCOUNT MAINTAINED BY HER WITH HER HUSBAND; AND (III) ` 5.00 LAKHS RECEIVED AS ADVANCE ON ACCOUNT OF AGREEMENT FOR SALE OF PROP ERTY. ITA NO. 357(DEL)/2010 2 2. IN REGARD TO THE AMOUNT OF ` 2,25,000/-, IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT IT WAS INTRODUCED IN THE BOOKS O N 01.06.2004, 10.07.2004 AND 10.08.2004 IN EQUAL INSTALLMENTS. THE MONE Y REPRESENTED STRIDHAN AND INCOME EARNED AND DECLARED IN PAST YEARS. IT WAS NECESSARY TO KEEP THE CASH AT HOME BECAUSE OF FAMILY NEEDS. TH E LD. CIT(A) HELD THAT THE CASE OF THE ASSESSEE IS DEVOID OF ANY MERIT . SHE IS MAINTAINING A BANK ACCOUNT AND IS ALSO CARRYING ON A BUSINESS. IN SUCH CIRCUMSTANCES, THERE IS NO REASON FOR HER TO KEEP THE MONEY ID LE AT HOME. THE AMOUNT WAS INTRODUCED ON 1.6.2004, 10.7.2004 AND 10.8.2 004. HOWEVER, ANOTHER SUM OF ` 10,000/- HAS BEEN INTRODUCED IN THE CAPITAL ACC OUNT AFTER WITHDRAWING THE MONEY FROM THE JOINT ACCOUNT, WHI CH SHOWS THAT NO SUCH CASH WAS AVAILABLE WITH THE ASSESSEE. IF THE C ASH WAS AVAILABLE, THERE WOULD HAVE BEEN NO NEED TO WITHDRAW A SUM OF ` 10,000/- FROM THE JOINT ACCOUNT. 2.1 BEFORE US, THE LD. COUNSEL REFERRED TO THE CO PIES OF RETURN OF INCOME FILED IN THE CASE OF THE ASSESSEE FOR ASSESSMEN T YEARS 2003-04 AND 2004- 05. THE FIRST RETURN SHOWS TOTAL INCOME OF ` 84,000/- FROM TUITION RECEIPTS. THE SECOND RETURN SHOW THE INCOME OF ` 85,000/- AS TUITION RECEIPTS. DEDUCTION OF ` 5,000/- IS CLAIMED U/S 88C. THE RETURN OF TH IS ITA NO. 357(DEL)/2010 3 YEAR SHOWS RENT OF ` 96,000/- AND PROFIT FROM BUSINESS AT ` 3,56,868/-. THEREFORE, HIS CASE IS THAT SUFFICIENT MONEY WAS AVAILABLE AS CASH-ON- HAND, BEING THE INCOMES EARNED IN EARLIER YEARS AND STRIDHAN. IN REPLY, THE LD. DR SUBMITTED THAT THERE IS NO SUPPORTING DOCU MENTS SUCH AS CASH FLOW STATEMENT TO SHOW THAT THE ASSESSEE WAS IN POSSE SSION OF CASH AMOUNTING ` 2,25,000/-. THE ASSESSEE HAS SHOWN RENTAL INCO ME FROM HOUSE PROPERTY FOR THE FIRST TIME IN ASSESSMENT YEAR 2005-06, WHI CH SHOWS THAT INVESTMENT WOULD HAVE BEEN MADE IN THE PROPERTY IN EARLIER YEARS, LEAVING NO CASH BALANCE WITH THE ASSESSEE WHATSOEVER. 2.2 WE HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BEFORE US. WE FIND THAT ALTHOUGH THE ASSESSEE SHOWS INCOMES OF ` 84,000/- AND ` 85,000/- IN THE IMMEDIATELY PRECEDING TWO YEAR S, THERE IS NO EVIDENCE BY WAY OF BOOKS OF ACCOUNT OR C ASH-FLOW STATEMENT TO SHOW THAT SHE WAS IN POSSESSION OF CASH AMOUNTING TO ` 2,25,000/-. THE LD. CIT(A) HAS REFERRED TO ANOTHER CREDIT OF ` 10,000/- IN THE CAPITAL ACCOUNT, WHICH REPRESENTS WITHDRAWAL OF MONEY FROM THE BAN K. THE ASSESSEE MAINTAINED A BANK ACCOUNT AND IS CARRYING ON A BUSINESS. SHE HAS ALSO INVESTED MONEY IN A HOUSE PROPERTY. THEREFORE, TH E CONDUCT OF THE ASSESSEE SHOWS THAT SHE COULD NOT HAVE BEEN IN POSSESSION OF THIS MONEY AND IT ITA NO. 357(DEL)/2010 4 REPRESENTS HER INCOME FROM UNDISCLOSED SOURCES. AC CORDINGLY, GROUND NO. 1 IS DISMISSED. 3. IN REGARD TO GROUND NO. 2, IT WAS SUBMITTED T HAT THE AMOUNT HAS BEEN WITHDRAWN FROM THE BANK ACCOUNT. HOWEVER, THE AO HAD SUBMITTED THAT IMMEDIATELY PRIOR TO THE WITHDRAWAL, THERE WERE TWO CREDIT ENTRIES BY WAY OF CASH IN THE ACCOUNT. THE ASSESSEE IS ONE O F THE JOINT HOLDERS, AND SHE HAS NOT EXPLAINED THE SOURCE OF DEPOSIT IN THE JO INT ACCOUNT. THE LD. CIT(A) CONCURRED WITH THE AO THAT THE CREDIT OF ` 1,10,000/- REMAINS UNEXPLAINED. 3.1 BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE AND HER HUSBAND ARE AGED ABOUT 48 YEARS AND 50 YEARS AND THEY HAVE MAINTAINED A JOINT ACCOUNT. IN SO FAR THE ASS ESSEE IS CONCERNED, THE CREDIT HAS COME FROM THE JOINT ACCOUNT AND, THEREFORE, THE SOURCE REMAINS PROVED. IN REPLY, THE LD. DR RELIED ON THE OR DER OF THE LD. CIT(A). 3.2 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS A MATTER OF FACT ON RECORD T HAT THE SOURCE OF THE CREDIT IS THE JOINT ACCOUNT OF THE ASSESSEE WITH HER HUSBAN D. THE IMPUGNED ORDER ITA NO. 357(DEL)/2010 5 DOES NOT SHOW WHETHER THE MONEY BELONGED TO THE ASSESSEE, HER HUSBAND OR BOTH. THE ONLY ARGUMENT FOR MAKING THE ADDITI ON IS THAT AS A JOINT ACCOUNT HOLDER, SHE WAS REQUIRED TO EXPLAIN THE DEPOSITS IN THIS ACCOUNT. SUCH AN ARGUMENT WOULD HAVE BEEN ACCEPTABLE IF TH E ACCOUNT BELONGED TO THE ASSESSEE. AS MENTIONED EARLIER, THE FACTS IN THIS REGARD ARE NOT CLEAR. THEREFORE, THE ONUS HAS BEEN SHIFTED TO THE ASSESS EE TO PROVE THE SOURCE OF THE SOURCE WITHOUT REASONABLE GROUND. ACCORDIN GLY, THIS ADDITION IS DELETED. 4. IN REGARD TO THE CREDIT OF ` 5.00 LAKHS, IT WAS SUBMITTED THAT THE MONEY WAS RECEIVED AS ADVANCE FROM SHRI JAI PR AKASH AGAINST SALE AGREEMENT. THE COPIES OF AGREEMENT AND THE PASS BOOK OF THE PURCHASER WERE FURNISHED TO THE AO BUT SHRI JAI PRAKASH WAS NOT PRODUCED BEFORE HIM FOR EXAMINATION. IN THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE WAS REQUESTED TO STATE ABOUT THE FATE OF AGREEMENT AS THE ASSESSEE WAS STILL RESIDING IN THAT HOUSE. NO EXPLANATIO N WAS FURNISHED IN THIS REGARD. THE LD. CIT(APPEALS) MENTIONED THAT THE AGREEMENT IS NOT A REGISTERED DOCUMENT AND EVEN AFTER CONSIDERAB LE LAPSE OF TIME, THE FATE OF AGREEMENT HAS NOT BEEN EXPLAINED. THE ASSE SSEE CONTINUES TO RESIDE IN ITA NO. 357(DEL)/2010 6 THE SAME HOUSE. THEREFORE, IT WAS HELD THAT IT I S ONLY A SELF-SERVING DOCUMENT AND THE ADDITION WAS CONFIRMED. 4.1 BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE MONEY WAS RECEIVED ON EXECUTION OF AGREEMENT TO SELL. A COPY OF THIS AGREEMENT IS PLACED IN THE PAPER BOOK ON PAGE NOS. 33 TO 35. IN REPLY, THE LD. DR SUBMITTED THAT THE BURDEN TO PRODUCE SHRI JAI PRAKASH FOR EXAMIN ATION IS ON THE ASSESSEE. SHE HAS ALSO NOT EXPLAINED AS TO WHAT HAS HAPP ENED TO THE AGREEMENT AND THE PROPERTY. SHE CONTINUES TO STAY IN THE H OUSE TILL THE IMPUGNED ORDER WAS PASSED. 4.2 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE HAVE ALSO PERUSED THE AGREEMENT. I T HAS BEEN EXECUTED ON A PLAIN PAPER ON WHICH STAMPS OF ` 4.00 HAVE BEEN AFFIXED. IT IS NOT WITNESSED, NOTARIZED OR REGISTERED. APPARENTLY, IT WAS EXECUTED ON 27.9.2004 AND THE ASSESSEE RECEIVED EARNEST MON EY OF ` 5.00 LAKHS ON THAT DATE. THE LD. COUNSEL HAS NOT MENTIONED EV EN BEFORE US AS TO WHAT HAS HAPPENED TO THE AGREEMENT AND THE PROPERTY BY NO W. THE OSTENSIBLE PURCHASER HAS NOT BEEN PRODUCED BEFORE THE LOWER AUTHORITIES FOR EXAMINATION. IT HAS ALSO NOT BEEN HELD OUT BEFOR E US THAT THE PURCHASER CAN ITA NO. 357(DEL)/2010 7 BE PRODUCED NOW FOR EXAMINATION OF THE AO. IN VIEW OF THIS PECULIAR POSITION, IT IS BUT NATURAL TO CONCLUDE THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE SALE-AGREEMENT. ACC ORDINGLY, IT IS HELD THAT SHE FAILED TO DISCHARGE THE ONUS REGARDING CREDIT OF ` 5.00 LAKH IN HER BOOKS OF ACCOUNT. THEREFORE, THE ADDITION IS UPH ELD. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 NOVEMBER, 2010. SD/- SD/- (I.P. BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 26 NOVEMBER, 2010. SP SATIA COPY OF THE ORDER FORWARDED TO: MURTI DEVI, GURGAON. ITO, WARD 16(4), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.