ITO, CHITTORGARH V. Smt. Vijay Saruparia, UDAIPUR

ITA 388/JODH/2013

• Counselvise Citation: 38823314 RSA 2013
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Unexplained investment; Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 388/JU/2013 ASSESSMENT YEAR: 2008-09 THE INCOME-TAX OFFICER VS. SMT. VIJAYA S ARUPARIYA CIRCLE 42, SARVRITU VILAS NAGAUR NEAR GULAB BAGH UDAIPUR PAN NO. BKVPS 7251 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANDEEP JHANWAR DEPARTMENT BY : SHRI N.A. JOSHI, DR DATE OF HEARING : 10.06.2014 DATE OF PRONOUNCEMENT : 13.06.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), UDAIPUR DATED 28.03.2012 PERTAINING TO A.Y 2008-09. 2 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE RE VENUE IN THIS APPEAL: ON THE FACTS, AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN 1. DELETING THE TRADING ADDITION OF RS. 92,560/- 2. REDUCING THE ADDITION FROM RS. 14,51,278 TO RS. 3,93,650/- IN RESPECT OF UNACCOUNTED INVESTMENT IN PURCHASE OF HOUSE AND UNEXPLAINED CASH DEPOSI T IN BANK ACCOUNT AMOUNTING TO RS. 8,71,278 AND RS. 5,8 0,000/- RESPECTIVELY (TOTALING TO RS. 14,51,278/-) DESPITE THE FACT THAT ONE BANK ACCOUNT NAMELY WITH THE OBC WAS NOT A T ALL DISCLOSED & WAS FOUND OUT BY THE AO AND DESPITE THE FACT THAT NO BOOKS OF ACCOUNT ARE MAINTAINED AND EVEN OTHERWISE THE SOURCE OF INVESTMENT/DEPOSIT IS NOT EXPLAINED. 3. DELETING THE ADDITION OF RS. 2,50,000/- MADE ON ACCOUNT OF UNEXPLAINED DEPOSIT IN CENTRAL BANK OF INDIA ON 26.06.2007 DESPITE THE FACT THAT CLAIM OF AMOUNT RE CEIVED AS SALE OF PLOT WAS FOUND TO BE TOTALLY INCORRECT O N ENQUIRY MADE BY THE AO FROM THE CLAIMED PURCHASER OF THE PROPERTY. 3 3. FACTS APROPOS GROUND NO. 1 AND 3 WHICH ARE CO-RE LATED ARE THAT IN THE RETURN OF INCOME [ROI] FILED FOR A.Y. 2008-0 9, BY THE ASSESSEE ON 10.12.2008, FROM THE BUSINESS OF SALE OF HANDICRAFT ITEMS, PROPERTY DEALING BUSINESS AT RS. 2,07,440/-, THE A.O. HAS AS SESSED TOTAL INCOME U/S 143(3) OF THE ACT AT RS. 19,88,413/-. THE ASSE SSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. THEREFORE, THE A.O. DID NOT ACCEPT THE ESTIMATED INCOME DISCLOSED BY THE ASSESSEE AND, IN TURN, HAS MADE HIS OWN ESTIMATION AT RS. 3 LAKHS WHICH HAS RESULTED IN TO AN ADDITION OF RS. 92,560/-. THE ASSESSEE DEPOSITED A CHEQUE RECEIVED OF AMOUNT OF RS. 2.5 LAKHS AS AGAINST SALE OF PLOT IN THE CENTRAL BA NK OF INDIA ON 26.6.2007. THE A.O. WAS NOT SATISFIED ABOUT THIS R ECEIPT AND ALSO MADE ADDITION OF THIS AMOUNT IN THE ASSESSEES HAND S. AGGRIEVED, THE ASSESSEE WENT BEFORE THE LD. CIT(A) AND CONVINCED T HE LD. CIT(A) THAT THE ASSESSEE HAS FILED HIS RETURN UNDER THE PROVISI ONS OF SECTION 44AF OF THE INCOME-TAX ACT, 1961 ['THE ACT', FOR SHORT], TH EREFORE, HE IS NOT SUPPOSED TO MAINTAIN ANY BOOKS OF ACCOUNT. HE HAS ACCEPTED THAT FROM THE HANDICRAFT BUSINESS INCOME CANNOT BE MORE THAN 5% OF THE GROSS SALES. SINCE THE ASSESSEE HAS DECLARED INCOM E HIGHER THAN 5%, THE LD. CIT(A) DELETED THE ADDITION OF RS. 92,560/- AND HE HAS DELETED THE ADDITION OF RS. 2.5 LAKHS BY ACCEPTING THE CONT ENTION OF THE ASSESSEE THAT INCOME FROM HANDICRAFT HAS BEEN SHOWN AT RS. 35,000/- 4 AND OF RS. 1,72,440/- ON ACCOUNT OF PROFIT FROM SAL E OF PLOT. THEREFORE, THE ADDITION OF RS. 2.5 LAKHS HAS ALSO B EEN DELETED. NOW THE REVENUE IS AGGRIEVED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. BOTH THE PAR TIES HAVE REITERATED THEIR EARLIER ARGUMENTS. AFTER CONSIDERI NG THE RIVAL SUBMISSIONS IN THE LIGHT OF OBTAINING FACTS, WE DO NOT FIND ANY MERIT IN GROUND NO. 1 AND 3 OF THE REVENUES APPEAL . SINCE THE ASSESSEE HAS FILED ROI IN TERMS OF SECTION 44AF OF THE ACT AND HAS DECLARED MORE THAN 5% GROSS SALES AS HIS IN COME, IN OUR CONSIDERED OPINION, THIS ADDITION IS NOT CALLED FOR. LIKEWISE, THE SOURCE OF RS. 2.5 LAKHS CLEARLY STAND S EXPLAINED FROM RECORD. THEREFORE, THIS ADDITION IS ALSO NOT JUSTIFIED. DELETION OF BOTH THESE ADDITIONS BY THE LD. CIT(A) ARE IN ORDER. ACCORDINGLY, WE DISMISS GROUND NOS 1 AND 3 OF REVENUES APPEAL. 5. FACTS APROPOS GROUND NO. 2 WHICH IS REGARDING AD DITION OF RS. 14,51,278/- MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASE OF HOUSE AND UNEXPLAINED CAS H 5 DEPOSIT IN BANK ACCOUNT TOTALING TO RS. 14,51,278 A RE THAT THE ASSESSEE PURCHASED A PROPERTY SARVRITU VILAS FOR A CONSIDERATION OF RS. 61,37,260/-. WHEN THE ASSESSE E WAS REQUIRED TO FURNISH DETAILS OF PURCHASE OF THIS PRO PERTY ALONGWITH SOURCE THEREOF, IT WAS EXPLAINED BY HER T HAT SHE HAS PURCHASED THIS RESIDENTIAL HOUSE IN SARVRITU VI LAS, UDAIPUR FOR A TOTAL CONSIDERATION OF RS. 60 LAKHS + EXPENSES OF RS. 1,37,260/- TOTALING TO RS. 61,37,260/-. SHE FURNISHED COPY OF REGISTERED PURCHASE DEED IN PROOF THEREOF. SHE ALSO STATED THAT NO BOOKS OF ACCOUNT WERE BEING MAINTAIN ED BY HER BUT SHE FILED CONFIRMATION REGARDING CASH CREDI T AND BALANCE SHEET AS ON 31.3.2008 AS UNDER: CAPITAL ACCOUNT 7,05,841.60 HOUSE [RESIDENTIAL ] COST 60,00,000/- REGISTRY EXPENSES. 1,37,260/- CREDITORS ARVIND SARUPARIYA 45,00,000 CLOSING STOCK 9 00/- NITIN HINGER 10,00,000 CASH BANK BALANCE 55,00,000 62,05,841.60 BANK BALANCE 27,928/- CASH IN HAND 39,733/- 62,05,841.60 6 ALONGWITH THE ABOVE DETAILS SHE ALSO FILED CONFIRMA TION FROM SHRI NITIN HINGER ALONGWITH COPY OF BANK ACCOUNT SH OWING ISSUANCE OF CHEQUES. SHE ALSO FILED COPY OF BANK A CCOUNT OF SHRI ARVIND SARUPARIYA, HER HUSBAND SHOWING ISSUANC E OF CHEQUE FOR A SUM OF RS. 59 LAKHS IN FAVOUR OF THE A SSESSEE. THE CONFIRMATION FROM SHRI ARVIND SARUPARIYA WAS NO T FILED. BUT LATER ON, CONFIRMATION WAS FILED FROM HIM. 6. THE ASSESSEE ALSO FURNISHED FOLLOWING DETAILS: I) BALANCE SHEET FROM A.Y. 2005-06 TO 2008-09 II) CAPITAL ACCOUNT FOR A.Y. 2006-07 TO 2008-09 III) COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME F OR A.Y. 2005-06 AND 2007-08 (IV) COPY OF ACCOUNT OF ASSESSEE IN THE BOOKS OF S HRI ARVIND SARUPARIYA [THOUGH AS PER COMPUTATION AND RETURN FILED, NO BOOKS ARE KEPT BY ARVIND SARUPARIYA]. 7. AFTER CONSIDERING THE SAME, THE A.O. WAS NOT AGR EEABLE AND TREATED ALL EVIDENCE AS SELF-SERVING EVIDENCE N OT BEING SUPPORTED BY ANY PROOF. ACCORDINGLY, HE MADE THE I MPUGNED ADDITION. IN APPEAL, THE LD. CIT(A) CONSIDERED SIM ILAR 7 ARGUMENTS AND DIRECTED THE ASSESSEE TO FILE CASH FL OW STATEMENT WHICH THE ASSESSEE FILED AND AFTER CONSID ERING THE SAME, HE HAS GIVEN THE FOLLOWING FINDING: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO. AND IT IS NOTICED TH AT THE APPELLANT HAS PURCHASED HOUSE PROPERTY AT RS. 60,00 ,000/- + EXPENSES OF RS. 4,42,360/- = 64,42,360/- WHEREAS THE LD. AO HAS TAKEN COST OF THE PROPERTY AT RS. 65,72,060/ - SO THERE IS DIFFERENCE IN THE COST OF RS. 1,29,700/- O N EXAMINATION OF THE SUBMISSIONS AND FINDINGS OF THE LD. AO IT IS NOTICED THAT THIS DIFFERENCE OF COST IS DUE T O FOLLOWING REASONS:- DATE OF DEED STAMP DUTY EXPENSES AS PER DEED STAMP DUTY EXPENSES MENTION BY LD. AO EXCESS SHORTAGE TAKEN BY AO 13.12.2007 2,05,100 3,92,060 1,86,960 13.03.2008 2,37,260 1,80,000 ( - ) 57,260 TOTAL 1,29,700 I HAVE CONSIDERED THE FACTS & CIRCUMSTANCES OF THE CASE AND SUBMISSIONS OF THE LD. AR AND FINDING OF THE LD. AO IT IS SEEN THAT THE CONTENTION OF THE LD. AR HAS FORCED. I INCLINE TO AGREE WITH THE CONTENTION OF THE APPELLANT THAT THE AO IS NOT JUSTIFIED IN MAKING ADDITION OF RS. 8,71,278 /- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF HO USE 8 PROPERTY AND RS. 5,80,000/- ON ACCOUNT OF UNEXPLAIN ED CASH DEPOSITS IN BANK. ON PERUSAL OF THE DETAILS, SUBMIS SIONS AND CASH FLOW MENTIONED ABOVE ONLY UNEXPLAINED AMOU NT IN THE INVESTMENT OF PROPERTY REMAINS OF RS. 3,93,6 50/- ONLY AND THE SAME IS CONFIRMED AND THE BALANCE ADDI TION OF RS. 10,57,628/- IS DELETED . THE ABOVE GROUNDS OF A PPEAL ARE PARTLY ALLOWED. THUS THE LD. CIT(A) REDUCED THE ADDITION TO RS. 3,9 3,650/-. AGAINST THIS SUSTAINED ADDITION, THE ASSESSEE HAS N OT FILE ANY APPEAL. 8. BEFORE US, SIMILAR ARGUMENTS WERE REITERATED. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND MERIT IN THE FINDING OF THE LD. CIT(A). THE CASH FLOW STATE MENT ALONGWITH OTHER FACTS AND FIGURES HAVE BEEN EXTRACT ED BY THE LD. CIT(A) IN HIS ORDER WHICH WE WOULD LIKE TO INCO RPORATE IN THIS ORDER AS WELL. THE RELEVANT PORTION GIVEN AT PAGES 5 TO 7 OF THE LD. CIT(A)S ORDER IS AS UNDER: MOREOVER THE LEARNED A.O. HAS ALSO GROSSLY ERRED I N NOT CONSIDERING THE SOURCE OF INVESTMENT OF HOUSE PROPE RTY. IT IS TRUE THAT THE ASSESSEE HAS NOT MAINTAINED ANY BO OKS OF 9 ACCOUNTS BUT THE SOURCE AVAILABLE WITH THE ASSESSEE AND EXPLAINED BEFORE THE LEARNED A.O. HAVE NOT BEEN CONSIDERED FULLY AND PROPERLY BY THE LEARNED A.O. W HICH IS EVIDENT FROM THE FOLLOWING DETAILS OF CASH FLOW DUR ING OF THE YEAR. CASH IN FLOW 1 LOAN RECEIVED FROM HUSBAND ARVIND SARUPARIYA VIDE CH. NO. 128401 DTD. 5900000 12.03. 2008 2 LOAN RECEIVED FROM NITIN HINGER CH. NO. 265861 DATED 20.9.2007 CH. NO. 265862 DATED 20.9.2007 500000 500000 3 SURPLUS FROM INCOME FROM INCOME DECLARED BY ASSESSEE AFTER DEDUCTING 228710 L I P OR HOUSEHOLD EXP. AND OLD BALANCE (FROM A.Y. 2005-06 TO A.Y. 2007- 08) AS ASSESSED BY THE A.O. VIDE PAGE 8 OF THE ASSESSMENT ORDER. TOTAL INFLOW - 7128710 CASH OUT FLOW 1 PURCHASE OF HOUSE PROPERTY 6442360 2 REPAYMENT TO ARVIND SARUPARIYA (THE LEARNED A,0. HAS WRONGLY 1080000 TREATED THE OPENING BALANCE OF ARVIND SARUPARIYA OR PAYMENT MADE DURING THE YEAR WHILE THE COPY OF ALE AND CONFIRMATION FURNISHED BY ARVIND SARUPARIYA DULY SHOWN THE OPENING BALANCE OF RS. 320000/-) TOTAL CASH OUT FLOW 7522360 CASH SHORT FALL 393650 THUS THE TOTAL CASH SHORT FALL IS OF RS. 393650/- O NLY, EVEN 10 IF THE CONTENTION OF THE A.O. IS ACCEPTED. THE ASSE SSEE HEREBY BEGS TO EXPLAIN THAT THIS SHORTFALL OF RS. 3 93650/- IS NOT IN FACT A SHORTFALL BUT IT IS A SAVING OUT OF E ARLIER YEARS WHICH THE LEARNED A.O. HAS WRONGLY REJECTED ON THE BASIS OF WRONG ASSUMPTION. HOWEVER THE LEARNED A.O. HAS M ADE ADDITION OF RS. 871278/- AGAINST UNEXPLAINED INVEST MENT IN PURCHASES OF PROPERTY WHICH IS BASED ON WRONG AND ERRONEOUS CALCULATION AND ASSUMPTION. THIS ADDITION IS THEREFORE QUITE UNJUSTIFIED. THE LEARNED A.O. FURTH ER MADE ANOTHER ADDITION OF RS. 580000/- ON ACCOUNT OUT OF UNEXPLAINED CASH DEPOSITS. WHILE MAKING THE ADDITIO N OF RS. 580000/- THE LEARNED A.O. HAS GROSSLY ERRED IN NOT CONSIDERING THE TOTAL CASH INFLOW AVAILABLE WITH TH E ASSESSEE AND CASH WITHDRAWALS FROM THE BANK ON THE DATES EARLIER TO THE DATE OF DEPOSITS. FROM THE COPY OF B ANK ACCOUNT ATTACHED HEREWITH THE DETAILS OF CASH WITHD RAWAL AND DEPOSITS ARE GIVEN HEREWITH. OPENING BALANCE-96380 DATE CASH WITHDRAWALS CASH DEPOSIT CASH SURPLUS DEFICIT 26.06.07 50000 50000 29.06.07 250000 300000 20.08.07 49000 251000 07.09.07 1000 250000 21.09.07 400000 650000 22.09.07 250000 400000 05.10.07 250000 150000 16.11.07 100000 50000 11 FROM THE ABOVE DETAILS IT IS EVIDENT THAT THERE WAS NO CASH DEFICIT AND THE CASH DEPOSITED IN BANK WAS DEPOSITE D OUT OF THE CASH ALREADY WITHDRAW FROM THE BANK. BESIDE ABO VE THE ASSESSEE HAD ACCUMULATED SURPLUS OF RS. 228710/- AS ASSESSED BY A.O. ON PAGE 8 OF ASSESSMENT ORDER. THE LEARNED A.O. IS THEREFORE QUITE UNJUSTIFIED IN MAKI NG ADDITION OF RS. 580000/- ON ACCOUNT OF CASH DEPOSIT S IN THE BANK ACCOUNT. IN VIEW OF FOREGOING ARGUMENTS, EXPLANATION AND DIS CUSSION IT IS EVIDENT THAT THE ADDITION MADE BY A.O, OF RS. 92560/- TO THE BUSINESS INCOME, RS. 871278/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF HOUSE PROPERT Y AND RS. 580000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT S IN BANK AND OF RS. 250000/- AGAINST UNEXPLAINED INCOME RECEIVED BY CHEQUE DEPOSITED IN BANK IS QUITE UNLAW FUL AND UNJUSTIFIED. THE LEARNED A.O. IS ALSO UNJUSTIFIED I N MAKING DOUBLE/MULTIPLE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT ON ONE SIDE AND ON ACCOUNT OF UNEXPLAINE D CASH DEPOSIT ON OTHER SIDE WHILE THE ASSESSEE HAD MADE T HE PAYMENT FOR PURCHASE OF HOUSE PROPERTY BY WAY OF BA NK CHEQUES ONLY. IT IS THEREFORE PRAYED THAT ALL THE A DDITION MADE BY LEARNED A.O. MAY KINDLY BE DELETED.' 10. THE LD.SR. D.R. COULD NOT DEVIATE US FROM THE F ACTS AND FINDINGS OF THE LD. CIT(A). WE ARE ALSO CONVINCED AND FIND THE CASH FLOW STATEMENT ETC, WHICH HAS NOT BEEN DIS PUTED 12 OTHERWISE, AS SATISFYING EVIDENCE AND, ACCORDINGLY, WE CONFIRM THE IMPUGNED DELETION. 11. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 13 TH JUNE, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH JUNE, 2014 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR