Arvind Nagpal, New Delhi V. ITO, New Delhi

ITA 411/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53185 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SRUJANI MOHANTY
• Keywords: Opportunity of being heard

Judgement Text

ITA NO. 411/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 411/DEL/2011 A.Y. : 2007-08 ARVIND NAGPAL, 5233, BALLIMARAN, CHANDNI CHOWK, DELHI 110 006 (PAN : AAKPN0017G) VS. ITO, WARD28(2), C.R. BUILDING, I.P. ESTATE, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : TANVEER AHMED MIR, ADVOCATE WITH CA SANJESH JAWARANI DEPARTMENT BY : MRS. SRUJANI MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 25.11. 2010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN :- (I) IN UPHOLDING THE ASSESSMENT EVEN THOUGH THE SAME WAS FRAMED WITHOUT APPLICATION OF MIND BY THE ASSESSING OFFICER BY BASIC SOLE RELIANCE ON THE AI R (ANNUAL INFORMATION REPORT). ITA NO. 411/DEL/2011 2 (II) IN NOT APPRECIATING THAT AIR DATA SHEET HAS REFLECTED THE TRANSACTION AS JOINT AND THE WHOLE TRANSACTION OF CASH DEPOSIT OF ` 24 LACS BELONGED T O THE MOTHER OF THE ASSESSEE (WHO IS A JOINT HOLDER OF THE BANK ACCOUNT) AND SEPARATELY ASSESSED TO TAX. (III) IN DISREGARDING THE FACT, THAT IT IS THE ONUS OF T HE REVENUE TO PROVE THAT THE CASH DEPOSIT/ INVESTMENT / ACTUALLY BELONGS TO MR. ARVIND NAGPAL (THE ASSESSEE) WHEREAS, THE ASSESSING OFFICER HAS MERELY STATED THAT THE ASSESSEE IS AN MAIN OF MEANS AND THE CASH WHICH IS PART OF AIR INFORMATION HAS COME ON HIS PAN NUMBER DEPOSITED IN THE JOINT NAME BELONGS TO THE ASSESSEE. THE ASSESSING OFFICER HAS FAILED TO BRING ON RECORD ANY EVIDE NCE ON THE CONTRARY AND CHOSE TO ADD THE SAID SUM ON BASIS OF PURE ASSUMPTION. (IV) IN NOT APPRECIATING THE FACT THAT BROKERAGE WAS PAID FOR TRANSFER OF PROPERTY ALTHOUGH ADMITTING THAT IT WAS PAID BY ACCOUNT PAYEE CHEQUE AND NOT DISCHARGING OR REBUTTING THE ASSESSEES CLAIM MAKING FURTHER ENQUIRIES TO DISCOVER ANY ADVERSE INFERENCE AND HENCE DISALLOWING ` 42000/-. 3. IN THIS CASE ASSESSING OFFICER NOTED AS PER AIR INFORMATION RECEIVED, THERE WAS INFORMATION REGARDING CASH DEPO SITS IN THE JOINT ACCOUNT OF THE ASSESSEE WITH STANDARD CHARTERED BAN K. THE CASE WAS TAKEN FOR SCRUTINY AND ASSESSEE WAS ASKED TO EXPLAI N THE SOURCE OF CASH DEPOSIT. ASSESSEE EXPLAINED THAT SMT. URMILA D EVI NAGPAL WHO IS MOTHER OF THE ASSESSEE AND THE JOINT HOLDER OF THE A CCOUNT HAD THE ITA NO. 411/DEL/2011 3 OPENING BALANCE OF CASH IN HAND AS ON 1.4.2006 OF ` 40,80,819/- AND THE CASH DEPOSIT OF ` 2400000/- WAS MADE OUT OF THE CASH IN HAND. THE ASSESSEE ALSO EXPLAINED THAT THE CASH BALANCE W AS KEPT IN THE CASE OF SMT. URMILA DEVI NAGPAL FOR THE PURCHASE OF S OME PROPERTY BUT THE DEAL DID NOT MATERIALIZE. THE ASSESSING OFFIC ER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AS SATISFACTORY. HE N OTED THAT NO PRUDENT BUSINESSMAN WOULD KEEP SUCH A HUGE MONEY IN CASH IN H AND AS IDLE AND EVEN PRESUMING WITHOUT ACCEPTING THAT IF SUCH H UGE CASH WAS WITHDRAWN AND KEPT IN HAND THE SAME WAS INVESTED SOM EWHERE ELSE. ASSESSEE SUBMITTED THAT AVAILABILITY OF CASH BALANCE AVAILABLE WITH SMT. URMILA DEVI NAGPAL WAS NOTED BY THE ASSESSING OF FICER OF SMT. URMILA NAGPAL IN THE ASSESSMENTS FOR THE A.Y. 2005-06 & 2006-07 BUT THE ASSESSING OFFICER NOTED THAT THERE IS NO SUCH FINDING IN THE ORDER OF THE ASSESSING OFFICER OF SMT. URMILA DEVI NAGPAL. THE ASSESSING OFFICER FURTHER NOTED THAT THERE IS NO DOCUMENTARY EVIDENCE TO SHOW THAT THE CASH OF ` 2400000/- DEPOSITED IN THE JOINT ACCOUNT ACTUALLY BELONGS TO SMT. URMILA DEVI NAGPAL. THE ASSESSING OF FICER FURTHER NOTED THAT THERE IS EVIDENCE TO SUGGEST THAT THERE WAS A SALE OF PROPERTY BY THE ASSESSEE SHRI ARVIND NAGPAL AND THE CASH WAS DEPOSITED BY THE ASSESSEE HIMSELF USING HIS OWN PAN NUMBER AND THE CASH DEPOSIT BELONGS TO THE ASSESSEE AND THE SOURCE OF WHICH IS NOT EXPLAINED. THE ASSESSING OFFICER DID NOT ACCEPT T HE EXPLANATION OF THE ASSESSEE THAT THE CASH BELONGS TO SMT. URMILA DEVI N AGPAL. THE FINDING OF THE ASSESSING OFFICER IS THAT THE CASH HAS BEEN DEPOSITED BY THE ASSESSEE HIMSELF HIS OWN PAN WHICH HAS BEEN CAPT URED BY THE AIR INFORMATION. ACCORDINGLY, THE ASSESSING OFFICER H AS MADE THE ADDITION OF ` 24,00,000/- AS THE UNDISCLOSED INCOME OF THE A SSESSEE. ITA NO. 411/DEL/2011 4 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE SUBMISSIONS. HE NOTED THA T SMT. URMILA DEVI NAGPAL WAS A MOTHER OF THE ASSESSEE WAS MORE THAN 70 YEARS OLD, DID NOT HAVE ANY INDEPENDENT OR INDIVIDUAL BUSINESS. L D. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT ASSESSEE COULD NOT EXPLAIN THE REASON FOR KEEPING SUCH A HUGE CASH IN THE NAME OF SMT. URMI LA DEVI NAGPAL. THE ASSESSEE COULD ALSO NOT EXPLAIN THE REASONS FOR FREQUENT WITHDRAWALS OF CASH FROM THE BANK ACCOUNT EVEN THOUG H THERE HAD BEEN HUGE IDLE CASH IN HAND IN THE CASE OF SMT . URMILA DEVI NAGPAL. IF THERE HAD BEEN ACTUAL CASH BALANCE IN THE CASE O F SMT. URMILA DEVI NAGPAL, THERE WOULD HAVE BEEN NO NECESSITY OF MAKIN G SUCH FREQUENT CASH WITHDRAWAL THAT TOO FROM ATM. THE ASSESSEE HAS NOT BEEN ABLE TO BRING ANY MATERIAL TO CONTROVERT THE FINDING OF THE ASSESSING OFFICER THAT THE CASH DEPOSIT IN THE ACCOUNTS OF THE ASSESS EE IS NOT EXPLAINED. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE SOURCE OF CASH DEPOSIT OF ` 2400000/- IS NOT EXPLAI NED AND ACCORDINGLY, HE CONFIRMED THE ADDITION MADE BY THE A SSESSING OFFICER. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. 6.1 LD. COUNSEL OF THE ASSESSEE REPEATED THE SUBMISS IONS THAT WERE MADE BEFORE THE AUTHORITIES BELOW. HE CLAIMED THAT THE AMOUNT BELONGED TO THE JOINT ACCOUNT HOLDER SMT. URMILA DEVI NAGPAL. HE FURTHER SUBMITTED THAT HER ASSESSMENT FOR ASSESSMENT YEARS 2005-06 AND 2006-07 HAVE BEEN COMPLETED AND NO ADDITION IN THIS REGARD HAS BEEN MADE IN HER ASSESSMENT. ITA NO. 411/DEL/2011 5 6.2 WE HAVE CAREFULLY CONSIDERED THE SUBMISSION AND PERUSED THE RECORDS. IN OUR CONSIDERED OPINION, THE ISSUE NEED S TO BE EXAMINED BY THE ASSESSING OFFICER, IN LIGHT OF THE SUBMISSIONS MADE BY THE ASSESSEE. ACCORDINGLY, WE REMIT THE ISSUE TO THE F ILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE IN T HIS REGARD. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN A DEQUATE OPPORTUNITY OF BEING HEARD. 7. ANOTHER ISSUE RAISED IS RELATING TO THE DISALLOW ANCE OF ` 42000/- UNDER THE HEAD BROKERAGE. 8. THE ASSESSEE HAD SOLD A PROPERTY FOR ` 20,35,00 0/- AND HAD CLAIMED THE BROKERAGE OF ` 42000/-. THE ASSESSING OFFICER HAS DISALLOWED THE BROKERAGE ON THE GROUND THAT THE ASS ESSEE DID NOT FILE THE DETAILS AND ALSO ON THE GROUND THAT THE SOURCE OF THE BROKERAGE WAS NOT EXPLAINED. 9. THE ASSESSEE EXPLAINED BEFORE THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) THAT THE PAYMENTS WERE MADE BY CHEQUE IN THIS REGARD. ASSESSEE ALSO SUBMITTED THAT THE EXPENDITURE WERE I NCURRED REGARDING TRANSFER OF THE PROPERTY AND THE PAYMENT IS ALLOWA BLE U/S 48(I) FOR COMPUTING THE CAPITAL GAIN. LD. COMMISSIONER OF INCO ME TAX (APPEALS) CONSIDERED THE ISSUE AND HE HELD THAT IT WAS NOT PR OVED WHETHER THE EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVEL Y REGARDING THE SALE AND TRANSFER OF THE PROPERTY AS CLAIMED BY THE ASSESSEE. HENCE, HE CONFIRMED THE ADDITION MADE BY THE ASSESSING OF FICER. 10. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APP EAL BEFORE US. 11. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT ASSESSEE HAS SUBMITTED THE NECESSARY DETAI LS OF EXPENDITURE ITA NO. 411/DEL/2011 6 IN THIS REGARD. THE AMOUNTS HAVE BEEN PAID THROUG H CHEQUE AND THE RECIPIENTS HAVE BEEN IDENTIFIED. UNDER THE CIRC UMSTANCES, IN OUR CONSIDERED OPINION, THE CLAIM OF BROKERAGE OF ` 4200 0/- CANNOT BE DISALLOWED. ACCORDINGLY, WE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSE SSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/11/2011. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 18/11/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES