GITA KASTURI, MUMBAI V. ITO 12(2)(2), MUMBAI

ITA 3915/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8234 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Source of fund
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER I.T.A. NO. 3915/M/2011 ASSESSMENT YEAR 2006-2007 MS. GITA KASTURI, 105, DOSTI CARNATION, I.H.P. COMPOUND, WADALA-EAST, MUMBAI 400 037. PAN:AGGPK2858N VS. ITO-12(2)(2), AAYAKAR BHAVAN, CHURCHGATE, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. SUBRAMANIAN RESPONDENT BY : SHRI PAVAN VED, DR DATE OF HEARING: 13.07.2012 DATE OF ORDER: 03.08.2012 O R D E R PER VIJAY PAL RAO, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25.3.2011 OF CIT PASSED U/S 263 OF THE INCOME TAX ACT FOR THE AS SESSMENT YEAR 2006-2007. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT ERRED IN PASSING AN ORDER FOR RE-ASSESSMENT. 2. THE LD. CIT FAILED TO APPRECIATE THE FACT THAT: (I) THE ASSESSING OFFICER HAD FULL MATERIAL IN HIS POSSESSION AND HAD NOT APPLIED HIS MIND WHILE PASSING THE ASSESSIN G ORDER. (II) THE RE-OPENING OF ASSESSMENT WILL CAUSE UNDUE DISCOMFORT TO THE ASSESSEE. III) THE ASSESSEE AND HER HUSBAND ARE SENIOR CITIZE N AND THIS WAS THE ONLY ASSET CREATED BY THEM WITH THEIR LIFE SAVI NG. 2 I.T.A. NO. 3915/M/2011 3. THE ASSESSEE IS AN INDIVIDUAL MAINLY SHOWING PRO FESSIONAL INCOME IN THE FIELD OF YOGA, MEDITATION, NATURE CURE, BHARATANATYAM ETC . THE ASSESSEE FILED HER RETURN OF INCOME ON 18.10.2006 DECLARING TOTAL INCOME OF R S. 1,52,500/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 29.09.200 8 ACCEPTING THE TOTAL INCOME OF RS. 1,52,500/-. THEREAFTER, THE CIT EXAMINED THE A SSESSMENT RECORD AND FOUND THAT THE ASSESSEE PURCHASED A RESIDENTIAL HOUSE JOINTLY WITH HER SON SHRI NITIN KASTURI FOR A TOTAL CONSIDERATION OF RS. 60 LAKHS. HOWEVER, NO EVIDENCE INCLUDING BANK ACCOUNT STATEMENTS AND NARRATION OF SOURCE HAVE BEEN SUBMIT TED IN SUPPORT OF THE SOURCE OF PURCHASE CONSIDERATION. THE COMMISSIONER FURTHER O BSERVED THAT THE SOURCE OF PAYMENT OF STAMP DUTY OF RS. 2,83,750/- ALSO HAS NO T BEEN EXPLAINED. SINCE, THE ASSESSING OFFICER HAD ACCEPTED THE CLAIM OF THE ASS ESSEE WITHOUT VERIFICATION AND OBTAINING THE DOCUMENTARY EVIDENCE IN SUPPORT OF TH E SAME, THE CIT WAS OF THE OPINION THAT THE ORDER MADE BY THE ASSESSING OFFICE R WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, SHOW CAUS E NOTICE DATED 02.03.2011 WAS ISSUED PROPOSING TO REVISE THE ASSESSMENT ORDER. A FTER CONSIDERING THE REPLY OF THE ASSESSEE THE CIT (A) SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO EXAMINE THE ISSUE IN DETAIL IN VIEW OF THE OBSERVATION MADE INC LUDING THE SOURCE OF INVESTMENT. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ALL RELEVANT DETAILS WERE FILED WITH THE RETURN OF INCO ME REGARDING THE INVESTMENT. THE AO AFTER EXAMINING THE DETAILS AND EXPLANATION OF T HE ASSESSEE ACCEPTED THE SOURCE OF FUNDS FOR INVESTMENT IN THE HOUSE PROPERTY. HE HAS FURTHER CONTENDED THAT THE ASSESSMENT WAS COMPLETED BASED ON THE DETAILS FILED AS PER QUESTIONNAIRE. THE 3 I.T.A. NO. 3915/M/2011 LEARNED AR HAS POINTED OUT THAT A NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE WHICH WAS DULY RESPONDED BY FURNISHING THE DETAILS AND DOCUMENTS. THE AO EXAMINED ALL THE DETAILS AND DOCUMENTS PLACED ON RE CORD AND ACCORDINGLY PASSED THE ASSESSMENT ORDER. WHEN THE ASSESSING OFFICER HAS A CCEPTED THE EXPLANATION OF THE ASSESSEE THEN THE CIT CANNOT TAKE A DIFFERENT VIEW IN THE PROCEEDINGS U/S 263. HE HAS FURTHER SUBMITTED THAT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED U/S 263 OF THE INCOME TAX ACT, THE ASSESSEE HAS FURNISHED ALL THE DETAILS REGARDING SOURCE AND APPLICATION OF FUNDS. HE HAS POINTED OUT THAT THE ASSESSEE OBTAINED A LOAN OF RS. 34 LAKHS FROM ICICI BANK AND BALANCE CONTRIBUTION WAS FRO M HUSBAND AND SON OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION HE HAS RELIE D UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JEWEL OF IN DIA VS. CIT 325 ITR 92, IN THE CASE OF CIT VS. GABRIEL INDIA LTD. 203 ITR 108 (BOM) AS W ELL AS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. VS. CIT 243 ITR 83 (SC) AND SUBMITTED THAT THE ORDER OF ASSESSING OFFICER CANNO T BE HELD AS ERRONEOUS SIMPLY BECAUSE THERE IS NO ELABORATE DISCUSSION WHEN THE A SSESSMENT HAS BEEN COMPLETED AFTER CONSIDERING THE EXPLANATION AND DETAILS FILED BY THE ASSESSEE. THE LEARNED AR HAS ALSO RELIED UPON THE SERIES OF DECISIONS ON THE JURISDICTION OF THE CIT U/S 263. 5. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE SOURCE OF INVESTMENT IN THE HO USE PROPERTY PURCHASED FOR A CONSIDERATION OF RS. 60 LAKHS. THERE IS NO DISCUSS ION IN THE ASSESSMENT ORDER ABOUT ANY ENQUIRY OR ADJUDICATION OF THE ISSUE IN QUESTIO N. THEREFORE, THE AO HAS PASSED THE ASSESSMENT ORDER WITHOUT APPLICATION OF MIND WH ICH IS ERRONEOUS SO FAR AS 4 I.T.A. NO. 3915/M/2011 PREJUDICIAL TO THE INTEREST OF REVENUE. HE HAS REL IED UPON THE REVISION ORDER PASSED U/S 263. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSMENT ORDER DOES NOT EXHIBIT ANY THOUGHT PROCESS ON THE PART OF THE ASSESSING OFFICER ON THE ISSUE OF SOURCE OF INV ESTMENT. THE ASSESSMENT ORDER DOES NOT REFLECT ANY ENQUIRY OR EXAMINATION MADE BY THE AO ON THIS ISSUE OR ANY ATTEMPT TO ADDRESS OR ADJUDICATE THE ISSUE IN QUEST ION. THUS, IT IS CLEAR THAT THE AO HAS NOT APPLIED HIS MIND WHILE COMPLETING THE ASSES SMENT PARTICULARLY ON THE POINT OF SOURCE OF INVESTMENT OF RS. 60 LAKHS. THE NOTIC E ISSUED U/S 143(2) OF THE INCOME TAX ACT DOES NOT SUGGEST THAT ANY QUERY WAS RAISED WITH RESPECT TO THE SOURCE OF INVESTMENT. EVEN BEFORE THE COMMISSIONER THE ASSES SEE SUBMITTED THE DETAILS AND SOURCE OF RS. 34 LAKHS AS LOAN OBTAINED FROM ICICI BAN K BUT NO RECORD WAS PRODUCED TO SHOW THE SOURCE OF THE REMAINING AMOUNT OF RS. 2 9,13,750/- EXCEPT THE CLAIM OF THE ASSESSEE THAT THE SAME IS FROM FAMILY SAVINGS A ND INTERNAL ACCRUALS. EVEN BEFORE US, THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTS LIK E BANK STATEMENT OR OTHER MATERIAL TO SHOW THE SOURCE OF REMAINING AMOUNT OF RS. 29,13,750/-. THE COMMISSIONER HAS DISCUSSED ALL THESE FACTS IN PARA 5 AND 6 OF THE IMPUGNED ORDER AS UNDER: 5. THE ASSESSEES CONTENTION HAS BEEN EXAMINED ALO NG WITH THE FACTS OF THE CASE AND THE DETAILS FILED INCLUDING ON THE ISS UE OF JURISDICTION U/S 263. IT IS SEEN FROM THE FACTS OF THE CASE THAT THE ASSESSEE H AS MADE INVESTMENT OF RS. 63,13,750/- FOR PURCHASE OF PROPERTY AT 105, DOSTI CARNATION, WADALA, MUMBAI 400 037 WHICH INCLUDED AN AMOUNT OF RS. 2,83,750/- AS STAMP DUTY AND RS. 30,000/- AS REGISTRATION CHARGES. HOWEVER, DURING THE PRESENT PROCEEDINGS THE 5 I.T.A. NO. 3915/M/2011 ASSESSEE HAS FILED SUPPORTING ONLY WITH RESPECT TO AN AMOUNT OF RS. 34 LAKHS OBTAINED AS LOAN FROM ICICI BANK. HOWEVER, AS REGA RD AN AMOUNT OF RS. 29,13,750/-, THE ASSESSEE HAS STATED THAT THE SAME IS FROM FAMILY SAVINGS AND INTERNAL ACCRUALS. HOWEVER, NO SUPPORTING WHATSOEV ER HAS BEEN FILED TO SUBSTANTIATE THE SAME. EVEN DURING THE PRESENT PRO CEEDINGS THE ASSESSEES REPRESENTATIVE HAD CONTENDED THAT A PART OF THE MON EY HAS BEEN PAID BY NITIN KASTURI, SON OF THE ASSESSEE AND THE BALANCE BY HER HUSBAND FROM HIS RETIREMENT BENEFITS. THE ASSESSEES BANK STATEMENT FOR THE PE RIOD FROM 01 ST OCTOBER, 2005 TO 31 ST DECEMBER, 2005 INDICATES CASH DEPOSITS ON VARIOUS DATES WHICH SUBSEQUENTLY FORMED PART OF THE PAYMENT MADE TO THE DOSTI CARNATION. HOWEVER, THE SOURCE THEREOF HAS NOT BEEN EXPLAINED. 6. THE FACTS OF THE CASE CLEARLY INDICATES THAT THE ASSESSING OFFICER HAS CONSIDERED THE INVESTMENT AS MADE FROM DISCLOSED SO URCES WITHOUT PROPER VERIFICATION OF THE SOURCE OF INVESTMENT. EVEN DUR ING THE PRESENT PROCEEDINGS THE ASSESSEE HAS NOT SUBMITTED ALL THE RELEVANT DET AILS TO PROVE THAT THE INVESTMENT HAS BEEN MADE FROM DISCLOSED SOURCES. I N VIEW OF THE SAME, IT IS CLEAR THAT THE ASSESSMENT ORDER MADE BY THE ASSESSI NG OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 6.1. THUS IT IS CLEAR FROM THE FACTS AS WELL AS THE RECORD FILED BEFORE US THAT NO EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE IN SUPPO RT OF THE SOURCE OF RS. 29,13,750/-. 7. IT IS A SETTLED PROPOSITION OF LAW THAT WHEN AN O RDER IS PASSED WITHOUT APPLICATION OF MIND THEN THE SAME IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES CO (SUPRA). IT IS NOT A CASE WHERE THERE CAN BE A POSS IBILITY OF TWO VIEWS AND THE AO HAS TAKEN ONE OF THE POSSIBLE VIEWS AND THEREFORE, THE CIT IS PRECLUDED FROM TAKING A DIFFERENT VIEW. THE ISSUE INVOLVED IN THIS CASE IS PURELY BASED ON FACTS AND, 6 I.T.A. NO. 3915/M/2011 THEREFORE, THERE IS NO QUESTION OF MORE THAN ONE VI EW. THE NATURE OF ISSUE IS NOT DEBATABLE ONE WHERE THE ASSESSING OFFICER COULD HAV E TAKEN ONE OF THE POSSIBLE VIEWS AND THE CIT CANNOT TAKE A DIFFERENT VIEW. AC CORDINGLY, THE DECISIONS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE ARE NOT APPL ICABLE TO THE FACTS OF THE CASE WHERE THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE DU RING THE ASSESSMENT PROCEEDINGS TO SHOW AND ESTABLISH THAT THE SOURCE O F INVESTMENT TO THE EXTENT OF RS. 29,13,758/- CLAIMED TO BE ARRANGED FROM INTERNAL SO URCE AND FAMILY SAVINGS AND PARTICULARLY FROM HUSBAND AND SON OF THE ASSESSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE ABOVE DISC USSION, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE REVISION ORDER PASSED BY THE C IT WHEREBY THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE SOURCE OF INVESTMENT. ACCO RDINGLY, WE DISMISS THE APPEAL OF THE ASSESSEE AND UPHOLD THE IMPUGNED REVISION ORDER OF THE CIT. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF AUGUST, 2012. SD/- SD/- (RAJENDRA) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE : 3.8.2012 AT :MUMBAI OKK COPY TO : 1. MS. GITA KASTURI, MUMBAI. 2. ITO 12(2)(2), MUMBAI. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR G, BENCH, ITAT, MUMBAI. 6. GUARD FILE. 7 I.T.A. NO. 3915/M/2011 // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI