D.R. Rekha Rani, Bangalore V. ITO, Kolar

ITA 385/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1591 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-02-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 19-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NOS.38 4 & 385/BANG/2010 (ASST. YEAR 2005-06) 1. SHRI D.K RAJASEKHAR SETTY (ITA NO.384), 2. SMT. D.R REKHA RANI (ITA NO.385), NO.924, 7 TH CROSS, 2 ND BLOCK, 1 ST STAGE, BANASHANKARI, BANGALORE-560 050. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-1, KOLAR. . RESPONDENT APPELLANT BY : SHRI P.C CHADAGA, INCOME-TAX PRA CTIONER RESPONDENT BY : SMT. JACINTA VASHAI ZIMIK, ADDL. COMMISSIONER OF INCOME-TAX O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THESE TWO APPEALS ARE FILED BY THE ASSESSEES, WHO A RE HUSBAND AND WIFE. THE RELEVANT ASSESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST THE ORDERS OF THE CIT(A) II AT B ANGALORE DATED 8.1.2010. THE APPEALS ARISE OUT OF THE ASSESSMENTS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961. ITA NOS.384 & 385/B/10 2 2. IN THE APPEAL FILED BY THE HUSBAND, SHRI D.K RAJ ASHEKAR SETTY, THE ONLY GROUND RAISED IS AGAINST THE ADDITION OF R S.8 LAKHS MADE BY THE ASSESSING AUTHORITY AND CONFIRMED BY THE CIT(A) . IT IS ARGUED BY THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE THAT THIS AMOUNT WAS A LOAN TRANSACTION WITH ASSESSEES HUF HAVING REGULAR LY ASSESSED TO TAX BEFORE THE SAME ASSESSING AUTHORITY AND THE TRANSAC TION HAS BEEN REFLECTED IN THE ACCOUNTS OF THE HUF. 3. THE LEARNED COUNSEL FURTHER ARGUED THAT THE ASSE SSING OFFICER HAS GONE WRONG IN ACCEPTING AN OFFER OF RS.8 LAKHS MADE BY THE ASSESSEE WITHOUT GOING INTO THE FACTS OF THE CASE A ND THE ASSESSING OFFICER OUGHT TO HAVE VERIFIED THE RECORDS AVAILABL E BEFORE HIM TO SEE THAT THE ADDITION WAS NOT AT ALL JUSTIFIED. 4. A SUM OF RS.8 LAKHS REFLECTED IN THE BALANCE SHE ET OF THE ASSESSEE WAS ASKED TO EXPLAIN. AT THAT POINT OF TIM E, THE ASSESSEE THROUGH ITS LETTER DATED 30.8.2006, ADMITTED THAT T HE ENTIRE SUM OF RS.8 LAKHS AS INCOME AND OFFERED FOR TAXATION. IT IS ON THE BASIS OF THAT OFFER, THE SAID INCOME WAS ASSESSED TO TAX BY THE A SSESSING OFFICER. THE CIT(A) UPHELD THE ADDITION ON THE BASIS OF THE FINDING THAT THE SAID AMOUNT OF RS.8 LAKHS WAS OFFERED BY THE ASSESS EE FOR ASSESSMENT. ITA NOS.384 & 385/B/10 3 THE GROUNDS OF APPEAL FILED BEFORE THE TRIBUNAL ALS O, IN GROUND NO.3 ADMITS THAT HE HAD OFFERED RS.8 LAKHS FOR TAXATION, EVEN THOUGH, HIS CONTENTION IS THAT SUCH A EMPTY ADMISSION BY ITSELF IS NOT A REASON TO MAKE AN ADDITION WITHOUT VERIFICATION OF THE FACTS. 5. WE CONSIDERED THE MATTER. IT IS A FACT BEYOND D OUBT THAT THE ASSESSEE HAD SUBMITTED IN WRITING BEFORE THE ASSESS ING OFFICER THAT THE SAID AMOUNT OF RS.8 LAKHS COULD BE ADDED TO THE INC OME OF THE ASSESSEE. THIS OFFER OF THE ASSESSEE WAS MADE WHE N THE ASSESSING AUTHORITY ASKED FOR THE DETAILS OF THE SUM OF RS.8 LAKHS REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE. THE ASSESSEE HAS AD MITTED THE INCOME IN THE CONTEXT OF PROPOSED ENQUIRY. SO MUCH SO, TH E SINCE THE ENQUIRY WAS RAISED BY THE ASSESSING AUTHORITY WAS PREEMPTED FROM MAKING FURTHER ENQUIRY REGARDING THE GENUINENESS OF THE SA ID AMOUNT. IF THE ASSESSEE HAD NOT ADMITTED THE AMOUNT AS INCOME, THE RE IS A CHANCE THAT THE ASSESSING OFFICER WOULD HAVE MADE THOROUGH ENQU IRY AND ESTABLISHED THAT THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN THE BONAFIDES OF THE LIABILITY OF RS.8 LAKHS. THEREFOR E, WE FIND THAT THE ASSESSEE HAS PREEMPTED THE ASSESSING OFFICER FROM MAKING FURTHER ENQUIRIES BY OFFERING THE DISPUTED AMOUNT FOR TAXAT ION. NOW AT THIS STAGE, IT IS NOT PERMISSIBLE FOR THE ASSESSEE TO AR GUE OTHERWISE AND ITA NOS.384 & 385/B/10 4 CONTENDED THAT THE OFFERING WAS ONLY TECHNICAL AND THE ADDITION SHOULD NOT HAVE BEEN MADE. IT IS TOO LATE FOR THE ASSESSE E TO TAKE SUCH A SOMERSAULT. THE ADDITION OF RS.8 LAKHS IS CONFIRME D. 6. AS FAR AS THE APPEAL FILED BY WIFE MRS. REKHA RA NI IS CONCERNED, THE ONLY DISPUTE IS AGAINST THE ADDITION OF RS.84,000/- MADE BY THE ASSESSING AUTHORITY ON THE BASIS OF UNE XPLAINED PORTION OF THE LIC MATURITY AMOUNT. SHE ALSO HAD EQUALLY AGREE D BEFORE THE ASSESSING OFFICER TO ADD THE AMOUNT, THUS PRE-EMPTI NG THE REVENUE FROM MAKING FURTHER ENQUIRIES. 7. IN RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY THE 7TH DAY OF FEBRUARY, 2011, AT BANGALORE. SD/- SD/- (P MADHAVI DEVI) (DR. O.K NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT VMS. ITA NOS.384 & 385/B/10 5 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.