The ITO, Ward-1(4), RAJKOT-GUJARAT V. Smt. Shalinidevi J, Parmar, RAJKOT-GUJARAT

ITA 374/RJT/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85421 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMARSR
• Assessee Lawyers: RD LALCHANDANI
• Keywords: Unexplained investment
• Section: 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT , !' # $ , # % BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER &./ I.T.A. NO.374/RJT/2014 ( / ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER WARD-1(4) RAJKOT / VS. SMT.SHALINIDEVI J.PARMAR 32, PRAYAG-D NR. MOHIT HOTEL BEHIND BAHUMALI BHAVAN RAJKOT #) !' & ./ * & ./ PAN/GIR NO. : ABOPJ 1963 A ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY : SHRI AVINASH KUMAR,SR.D.R. ,-)+ / . ! / RESPONDENT BY : SHRI R.D.LALCHANDANI, ADV. 0 / ' / DATE OF HEARING 04/12/2014 12 / ' / DATE OF PRONOUNCEMENT 04/12/2014 !3 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-JAMNAGAR (CIT(A) IN SHORT) DATED 11/03/2014 PERTAINING TO ASSESSMENT YEAR (AY) 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD.CIT(A), JAMNAGAR HAS ERRED IN LAW AND ON FA CT IN DELETED THE ADDITION OF RS.48,25,000/- MADE ON ACCOUNT OF U NRECORDED INVESTMENT MADE IN THE IMMOVABLE PROPERTY U/S.69 OF THE I.T.ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. ITA NO.374/RJT/ 2014 ITO VS. SMT.SHALINIDEVI J.PARMAR ASST.YEAR 2009-10 - 2 - 3. IT IS, THEREFORE PRAYED THAT THE ORDER OF THE LD.CI T(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 19/12/2011, THEREBY THE ASSESSING OFFICER (AO IN SHORT) ADDITIO N OF RS.48,25,000/- BY INVOKING THE PROVISIONS OF SEC TION 69 OF THE ACT. THE ASSESSEE FEELING AGGRIEVED, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE ALLOWED THE APPEAL BY DELETING THE ADDITION MADE BY THE AO. NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. THIS REVENUES APPEAL WAS FIRSTLY FIXED FOR HEAR ING ON 02/12/2014. THE ONLY EFFECTIVE GROUND IN REVENUES APPEAL IS AG AINST THE DELETION OF ADDITION OF RS.48,25,000/- MADE ON ACCOUNT OF UNREC ORDED INVESTMENT MADE IN THE IMMOVABLE PROPERTY U/S.69 OF THE ACT. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH E LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 3.1. HOWEVER, THE LD.COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE LD.CIT(A) HAS GIVEN A FINDING ON FACT THAT THE MONE Y WAS PAID BY THE MOTHER OF THE ASSESSEE FOR PURCHASE OF THE PROPERTY OUT OF HER BANK ACCOUNT AND HELD AT DELHI. HE SUBMITTED THAT EVEN OTHERWISE THE AO HAD MADE ADDITION BY INVOKING SECTION 69 OF THE ACT AND THE UNDISPUTED FACT IS THAT THE INVESTMENT WAS MADE IN THE EARLIER YEAR AND NOT RELEVANT TO THE ITA NO.374/RJT/ 2014 ITO VS. SMT.SHALINIDEVI J.PARMAR ASST.YEAR 2009-10 - 3 - ASSESSMENT YEAR IN QUESTION. THEREFORE, THE ADDITI ON MADE IN THE ASSESSMENT YEAR EVEN OTHERWISE IS NOT SUSTAINABLE. 3.2. IN REJOINDER, THE LD.SR.DR SUBMITTED THAT HE W ISHES TO VERIFY THE FACT WHETHER THE INVESTMENT WAS MADE DURING THE FIN ANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. THE APPEAL WAS FURTHER ADJOURNED FOR TODAY (04.12.2014). 4. DURING THE COURSE OF HEARING BEFORE US, THE LD.S R.DR INTIMATED THAT THE INVESTMENTS WERE MADE IN EARLIER YEAR. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LD.CIT(A). WE FIND THAT THE AO HAD MADE THE ADDITION OF RS.48,25, 000/- BY OBSERVING AS UNDER:- 4.12. THEREFORE, CONSIDERING ALL THE ABOVE ENUMER ATED FACTS THE INVESTMENT MADE IN THE IMMOVABLE PROPERTY OF RS.48, 25,000/- IS HEREBY ADDED TO THE TOTAL INCOME BY TREATING IT AS UNRECORDED INVESTMENTS U/S.69 OF THE ACT. THEREFORE, RS.48,25 ,000/- IS HEREBY DISALLOWED BY TREATING IT AS UNRECORDED INVESTMENTS U/S.69 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE F OR THE YEAR UNDER CONSIDERATION. PENALTY PROCEEDINGS U/S.271(1 )(C) R.W.S. 274 OF THE ACT IS INITIATED SEPARATELY. THE ADDITION M ADE IN THIS CASE IS SUBSTANTIVE. FURTHER, TO PROTECT INTEREST OF REVEN UE, THE SAID AMOUNT IS TO BE TAXED IN THE HANDS OF MRS. MANHER K UMAR PAN AHHPK 4391 G ON PROTECTIVE BASIS FOR THE RELEVANT P ERIOD. NECESSARY INTIMATION IS BEING GIVEN TO THE CONCERNE D I.T.O. FOR TAKING APPROPRIATE ACTION FOR TAXING THE SAME ON PR OTECTIVE BASIS. ITA NO.374/RJT/ 2014 ITO VS. SMT.SHALINIDEVI J.PARMAR ASST.YEAR 2009-10 - 4 - 5.1. HOWEVER, THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- 6.1. EVEN AFTER LAPSE OF SO MUCH TIME THE AO HAS NOT BEEN ABLE TO CONFIRM WHETHER THE SAID ADDITION HAS BEEN MADE ON PROTECTIVE BASIS IN THE HANDS OF MS.MANHAR KUMAR OR NOT. HENC E I HAVE NO OPTION BUT TO FINALISE THE ISSUE ON THE BASIS OF MA TERIAL AVAILABLE ON RECORD. IT HAS BEEN CONFIRMED BY THE A.O. IN HIS R EMAND REPORT DATED 05-08-2013 THAT THE PAYMENTS INDEED WERE MADE FROM MS.MANHAR KUMARIS BANK ACCOUNT FOR THE PURCHASE OF PROPERTY. THIS IS ENOUGH PROOF THAT MS.MANHAR KUMARI INDEED H AD PAID AS CLAIMED BY THE APPELLANT. HENCE, THE SOURCE OF PAY MENT STANDS EXPLAINED. ACCORDINGLY THE ADDITION MADE IS DELETE D AND THE GROUND OF APPEAL IS ALLOWED. 6. THE UNREBUTTED FACTS EMERGE FROM THE RECORDS ARE THAT THE PAYMENT IN RESPECT OF THE PURCHASE OF THE PROPERTY WAS MADE BY THE MOTHER OF THE ASSESSEE OUT OF HER BANK ACCOUNT. FURTHER, THE LD. SR.DR HAS INTIMATED THAT THE PAYMENT WAS MADE FROM THE ACCOUNT OF THE M OTHER OF THE ASSESSEE IN EARLIER YEAR. WE FIND THAT THE AO HAS INVOKED THE SECTION 69 OF THE ACT, THAT READS AS UNDER:- UNEXPLAINED INVESTMENTS. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECO RDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND S OURCE OF THE INVESTMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING OFFICER], SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINAN CIAL YEAR. 6.1. FROM THE PLAIN READING OF THE ABOVE SECTION, T HE ADDITION CAN BE MADE IF THE INVESTMENT HAS BEEN MADE IN THE FINANCI AL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR UNDER CONSIDERATION. IN VIEW OF THE SUBMISSION MADE BY THE LD.SR.DR THAT THE INVESTMENT WAS NOT MADE ITA NO.374/RJT/ 2014 ITO VS. SMT.SHALINIDEVI J.PARMAR ASST.YEAR 2009-10 - 5 - DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YE AR UNDER CONSIDERATION AND THE SAME WAS MADE IN THE EARLIER FINANCIAL YEAR , THEREFORE, IN OUR CONSIDERED VIEW, THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION BY INVOKING THE SECTION 69 OF THE ACT. UNDER THESE FA CTS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) , SAME IS HEREBY UPHELD. THUS, THE GROUND RAISED IN THE REVENUES A PPEAL IS DISMISSED. THE OTHER GROUNDS ARE GENERAL IN NATURE REQUIRE NO INDEPENDENT ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF HEARI NG ON THURSDAY, THE 04 TH DAY OF DECEMBER, 2014 AT RAJKOT. SD/- SD/- ( ) ( $ ) !' # # ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT; DATED 04/ 12 /2014 .. , .../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. &6& 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-JAMNAGAR 5. 9$ : , , , /DR,ITAT, RAJKOT 6. : EF G 0 / GUARD FILE. / BY ORDER, - 9 , //TRUE COPY// !/ '# $% ( DY./ASSTT.REGISTRAR) # %&# ' , / ITAT, RAJKOT