Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 1178 (ITAT-PATNA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-09-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2006-2007
Appeal Filed On
09-04-2014
Judgement Text
1 ITA NO. 44/PAT/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 44/PAT/2014. ASSESSMENT YEAR : 2006 - 07. SMT. PRAMILA KUMARI, THE INCOME - TAX OFFICER, PATNA. VS. WARD - 5(4), PATNA. APPELLANT. RESPONDENT. APPELLANT BY : S/SHRI S.K. RASTOGI, RAKESH KUMAR . RESPONDENT BY : SHRI R.K. MISHRA. DATE OF HEARING : 03 - 08 - 2016 DATE OF PRONOUNCEMENT : 27 TH SEPT., 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 26 - 02 - 2014 AND PERTAINS TO ASSESSMENT YEAR 20 06 - 07 . THE GROUNDS OF APPEAL READ AS UNDER : 1. FOR THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING ADDITION OF RS.15,10,300/ - ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PREMIUM AGAINST LIFE INSURANCE POLICY. 2. FOR THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE INVESTMENT OF RS.15,10,300/ - WAS OUT OF EXPLAINED SOURCES AND COVERED BY THE DECLARED SOURCES. 3. FOR THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE INVESTMENT OF RS.15,10,300/ - WAS NOT INTENDED TO BE DISCLO SED. 4. FOR THAT THE LD. CIT(A) HAS ERRED IN DOUBTING GENUINENESS OF TRANSACTION OF GIFT & LOAN AND THE CREDITWORTHINESS SOF THE DONOR/LENDER. 5. FOR THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE APPELLANT HAS FILED CONFIRMATORY LETTERS FROM THE DONORS A ND LENDERS AND HAS THUS DISCHARGED THE ONUS SADDLED UPON HIM AND THE ASSESSING OFFICER WAS 2 ITA NO. 44/PAT/2014. REQUIRED TO ISSUE SUMMON U/S 131 BEFORE DRAWING ANY ADVERSE INFERENCE IN RESPECT OF GIFT/LOAN RECEIVED. 6. FOR THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION OF R S.12,965/ - ON ACCOUNT OF UNDISCLOSED BANK INTEREST. 7. FOR THAT THE ADDITIONS MADE ARE WRONG, ILLEGAL AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT CASE. 2. IN THIS CASE THE AO NOTED THAT THE DEPARTMENT HAS RECEIVED INFORMATION OF A SSESSEES HUGE INVESTMENT IN LIFE INSURANCE PREMIUM THROUGH ACCOUNT PAYEE CHEQUES AND CASH. THE AO ACCEPTED THE CHEQUE PAYMENT. HOWEVER, THE SOURCE OF CASH PREMIUM PAID OF RS.15,10,300/ - WERE FOUND BY THE AO TO BE NOT SATISFACTORY. THE AOS FINDINGS IN TH IS REGARD INTER ALIA ARE AS UNDER : ALSO THE ASSESSEE WAS REQUESTED TO FURNISH THE DETAILS AND PROOF OF THE SOURCE OF SUCH CASH PURCHASES OF RS.1510300.00 AS PREMIUM TO BAJAJ ALLINZ COMPANY. TO THIS THE ASSESSEE REPLIED THAT THE ASSESSEE HAD RECEIVED CA SH GIFT OF RS.5,00,000/ - FROM HER MOTHER SMT. MUNNA DEVI AND SISTER SMT. SUNITA KUAMRI ON 05.08.2004. ALSO HE SUBMITTED THAT SHE HAS AN OPENING BALANCE AS ON 10.04.2005 OF RS.42,02,477.00 AS PER CAPITAL ACCOUNT WHICH CONSISTS OF ALL THESE AND CASH BALAN C E TAKEN FOR RS.6,50,000/ - IN MAY, 2003 FROM 30 PERSONS AS ADVANCE FOR GIVING THE SHOPS ON RENT TO THEM. FURTHER, SHE STATED THAT THE ASSESSEE HAD TAKEN CASH LOAN OF RS.2,00,000/ - FROM 11 PERSONS EACH GIVING LOAN BELOW RS. 20,000/ - IN 1996. FURTHER, SHE SUB MITTED THAT THE ASSESSEE HAS TAKEN A TOTAL CASH LOAN OF RS.80,000/ - FROM PERSONS DURING APRIL AND MAY, 2005. THE ASSESSEE WAS REQUESTED TO PRODUCE ALL THESE CASH CREDITORS AND DONOR SMT. MUNNA DEVI, SMT. SUNITA KUMAR, SH. MAHESH KUMAR SINGH AND THE TENANTS WHO MADE ADVANCES VIDE ORDER SHEET DATED 08.12.2013 SIGNED BY THE A.R. OF THE ASSESSEE. THE DATE FOR COMPLIANCE BY THE ASSESSEE WAS 08.12.2008 BUT THE ASSESSEE FAILED TO PRODUCE ANYONE OF THEM. DURING THE HEARING ON 18.12.2008 THE ASSESSEE WAS AGAIN REQUE STED TO PRODUCE THESE PERSONS ON 22.12.2008. BUT THE A.R. AGAIN FAILED TO PRODUCE THEM ON 22.12.2008. VIDE ORDER SHEET DATED 22.12.2008 SIGNED BY THE A.R. OF THE ASSESSEE. SO THE GIFT AND CREDITWORTHINESS OF THE DONORS, CASH CREDITORS IS NOT VERIFIED. ALSO THE GENUINENESS OF THE TRANSACTION IS NOT PROVIDED AS ALL THE TRANSACTIONS WERE SAID TO HAVE OCCURRED IN CASH. ALSO, DESPITE GETTING SUFFICIENT OPPORTUNITIES THE ASSESSEE FAILED TON PRODUCE ANYONE OF THEM. ALSO THE IDENTITY OF THE DONORS AND CREDITORS AND TENANTS REMAIN VAGUE. IN SUCH A SITUATION, THE CLAIMED CASH GIFTS, LOANS AND CASH ADVANCES MADE BY PERSONS ARE BEING TREATED AS FA K E. THE EVIDENCE PRODUCED BY THE ASSESSEE 3 ITA NO. 44/PAT/2014. ARE JUST SELF - SERVING AND CONCOCTED. ALSO, THE IDENTITY OF THESE PERSONS ARE VAGUE AS THE ASSESSEE COULD NOT PRODUCE BEFORE ME THOUGH SHE WAS GIVEN ENOUGH OPPORTUNITY TO DO SO. 3. THE AO FURTHER CONCLUDED AS UNDER : THE CAPITAL ACCOUNT AND BALANCE SHEET FILED BY THE ASSESSEE DURING THE COURSE OF SCRUTINY IS AN AFTERTHOUGHT. AND FIN ALLY IT IS CLEAR THAT THE ASSESSEE HAS PAID PREMIUM IN CASH TO THE TUNE OF RS.15,10,300/ - FROM AN UNDISCLOSED INCOME. THERE IS NO CORRESPONDING WITHDRAWAL FROM BANK ACCOUNT DURING THIS PERIOD FOR SUCH PAYMENT. SO THIS IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. UPON ASSESSEE APPEAL LEARNED CIT(APPEALS) CONFIRMED THE ADDITION HOLDING AS UNDER : I HAVE CONSIDERED THE FACTS OF THE CASE. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE APPELLANT HAS MADE A TOTAL INVESTMENT OF RS.31,87,985/ - WI TH M/S BAJAJ ALLIANZ. WHEREAS, INVESTMENT OF RS.1677,685/ - HAS BEEN MADE THROUGH THE BANKING CHANNELS, THE OTHER INVESTMENT OF RS.15,10,300/ - HAS BEEN MADE IN CASH. NO BALANCE SHEET WAS SUBMITTED WITH THE RETURN OF INCOME THOUGH UP TO ASSESSMENT YEAR 2006 - 07, SUCH DOCUMENTS COULD BE FURNISHED WITH THE RETURNS OF INCOME ITSELF. IN THE RETURNS FOR ASSESSMENT YEARS 2001 - 02, 2002 - 03 AND 2003 - 04 CAPITAL ACCOUNTS AND BALANCE SHEETS HAVE BEEN FILED WITH SUCH RETURNS. WHEN INFORMATION WAS RECEIVED BY THE AO ABOUT THE INVESTMENT MADE MBY THE ASSESSEE AND QUERY WAS RAISED ABOUT IT DURING THE AS SESSMENT PROCEEDINGS, ATTEMPT WAS MADE TO EXPLAIN THE SAME THROUGH THE MODE OF HUGE CASH GIFTS AND ADVANCES. THE PERSONS FROM WHOM SUCH GIFTS AND ADVANCES WERE SHOWN WERE NOT PRODUCED BEFORE THE AO INSPITE OF DIRECTIONS FOR THE SAME. NO INCOME TAX ASSESSM ENT DETAILS OF SUCH PERSONS HAVE BEEN FILED. IN THE WRITTEN SUBMISSIONS, IT HAS BEEN CLAIMED THAT EXPLANATION OF THE ASSESSEE WAS NOT EXAMINED WHEREAS, FACT IS THAT THE AO DULY ASKED THE ASSESSEE TO PRODUCE SUCH PERSONS WHICH WAS NOT DONE. NO APPARENT SOUR CE OF HUGE CASH IN THE HANDS SOF THE DONORS HAS BEEN GIVEN. WHY AND FOR WHAT OCCASION GIFTS WERE GIVEN HAS NOT BEEN MENTIONED. THE DONORS HAVE NOT BEEN PRODUCED FOR EXAMINATION. THEREFORE, EVEN THE INITIAL ONUS CAST UPON THE ASSESSEE TO SHOW CREDITWORTHINE SS AND GENUINENESS OF THE TRANSACTIONS WAS NOT DISCHARGED. THE GIFTS AND ADVANCES HAVE BEEN SHOWN IN CASH FOR WHICH THERE IS NO APPARENT REASON. THE APPELLANT IS HAVING SEVERAL BANK ACCOUNTS. IT IS QUITE OBVIOUS THAT THE INVESTMENT OF RS.15,10,300/ - WAS NO T INTENDED TO BE 4 ITA NO. 44/PAT/2014. DISCLOSED. HOWEVER, WHEN THE DEPARTMENT RECEIVED SPECIFIC INFORMATION AND EXPLANATION OF THE ASSESSEE WAS SOUGHT, ALIBI OF GIFTS AND ADVANCES WAS TRIED TO BE CREATED FOR EXPLAINING THE SAME. ACCORDINGLY, THE ADDITION MADE BY THE AO IS QUIT E IN ORDER AND THE SAME IS CONFIRMED. THE SECOND ADDITION OF RS.12965/ - WAS ADMITTED TO BE CORRECT. HENCE, THE SAME IS ALSO CONFIRMED. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE IN THIS REGARD HAS MADE THE FOLLOWING SUBMISSIONS: THE ASSESSING OFFICER HAS ADDED THE INSURANCE PREMIUM PAID BY THE APPELLANT TO THE EXTENT OF RS.15,10,300/ - . THE ASSESSING OFFICE HAS TREATED THE CAPITAL ACC OUNT AND BALANCE SHEET FILED IN COURSE OF ASSESSMENT PROCEEDINGS AS AN AFTER THOUGHT AND IS OF THE VIEW THAT THERE IS NO WITHDRAWAL FROM THE BANK ACCOUNT FOR THE INVESTMENT OF RS.15,10,300/ - , THE SAME HAS BEEN ADDED AS UNDISCLOSED INVESTMENT. IT WAS EXPLA INED TO THE ASSESSING OFFICER THAT THE INSURANCE PREMIUM TO THE EXTENT OF RS.15,10,300/ - WERE PAID OUT OF CASH IN HAND AVAILABLE WITH THE APPELLANT WHICH IS SUPPORTED BY CAPITAL ACCOUNT AND BALANCE SHEET SUBMITTED IN COURSE OF ASSESSMENT PROCEEDINGS OF AS SESSMENT YEARS 2005 - 06 AND 2006 - 07 VIDE REPLIES DATED 04 - 12 - 2008. THE CIT(APPEALS) VIDE ORDER DATED 26 - 02 - 2014 HAS AFFIRMED THE ADDITION ON THE GROUND THAT THE PAYMENT WAS MADE IN CASH AND THAT THE INVESTMENT OF RS.15,10,300/ - WAS NOT INTENDED TO BE DISCL OSED. IT IS RESPECTFULLY SUBMITTED THAT IDENTICAL MATTER CAME BEFORE THE DIVISION BENCH OF HONBLE TRIBUNAL IN THE CASE OF THE APPELLANT FOR IMMEDIATELY PRECEDING YEAR AND THE HONBLE TRIBUNAL VIDE ORDER DATED 24 - 02 - 2012 HAS BEEN PLEADED TO DELETE THE PAY MENT OF RS.4,65,701/ - MADE IN CASH BY WAY 5 ITA NO. 44/PAT/2014. OF INSURANCE PREMIUM FOR THE ASSESSMENT YEAR 2005 - 06 AS THE SAME WAS FOUND TO BE COVERED OUT OF CASH IN HAND OF RS.6,35,529/ - (PARA 3 & 4 OF THE TRIBUNALS ORDER. THE PREMIUM OF RS.15,10,300/ - HAS BEEN PAID IN THE YEAR UNDER CONSIDERATION AND THE SOURCES ARE CASH IN HAND OF ASSESSMENT YEAR 2005 - 06 AMOUNTING TO RS.15,75,366/ - . SINCE THE SOURCES OF PAYMENT ARE OUT OF OPENING CASH BALANCE AND SIMILAR ADDITION MADE BY ASSIGNING SIMILAR REASONS HAVE BEEN DELETED BY A D IVISION BENCH OF HONBLE TRIBUNAL, IT IS PRAYED THAT THE ADDITION OF RS.15,10,300/ - SUSTAINED BY CIT(APPEALS) ON FLIMSY GROUND MAY KINDLY BE ORDERED TO BE DELETED. 8. ON CAREFUL CONSIDERATION I FIND THAT THE ASSESSEES CLAIM OF CASH RESOURCES AVAILABLE FOR MAKING INVESTMENT HAS BEEN DISPUTED BY THE AO ON THE GROUND THAT PERSONS WHO HAVE BEEN CLAIMED TO HAVE GIVEN LOANS AND GIFTS WERE NOT PRODUCED BEFORE THE AO. IN THIS REGARD THE ASSESS EES ARGUMENT IS THAT IT WAS INCUMBENT UPON THE AO TO GIVE N OTICES TO THE CONCERNED PARTIES, I F HE INSISTED UPON THEIR PRESENCE . I T IS NOT THE CASE THAT NAMES AND ADDRESSES WERE NOT GIVEN TO THE AO. IN THIS REGARD IT IS THE FURTHER SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT IN THE CASE OF THE SAME ASSESSEE THE ITAT IN EARLIER YEAR HAS ACCEPTED RS.4,65,701/ - AS INVESTMENT IN INSURANCE PREMIUM OUT OF CASH BALANCES AVAILABLE. I FIND THAT IN THIS DECISION THE ITAT HAS REFERRED TO A REMAND REPORT FROM THE AO WHICH HAS CONFIRMED T HE FACT THAT THE ASSESSEE HAS FILED A COPY OF THE BALANCE SHEET WITH THE RETURN AND STATED T HAT THE ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE OUT OF THE PAST SAVINGS. I FIND THAT IN THE PRESENT CASE THE ISSUE RELATES TO GIFT AND CASH LOANS THE VERACITY O F WHICH HAS BEEN DISPUTED BY THE REVENUE ON THE GROUND THAT THE CONCERNED PERSONS WERE NOT PRODUCED BEFORE THE AO. IT IS NOT THE CASE THAT THEIR NAMES AND ADDRESSES ARE NOT GIVEN TO THE AO. IN THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE MATTER NEEDS TO BE REMITTED TO THE FILE OF THE AO. THE AO IS DIRECTED TO EXAMINE THE ISSUE AFRESH AFTER NECESSARY VERIFICATION . 6 ITA NO. 44/PAT/2014. 9. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF SEPT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. DATED: 27 TH SEPT., 2016. COPY FORWARDED TO : 1. SMT. PRAMILA KUMARI, W /O RABINDRA CHARAN YADAV, H/O A.K. SINGH, E - 117, S.K. PURI, PATNA. 2. I.T.O., WARD - 5(4), PATNA. 3. C.I.T. - PATNA. 4. CIT(APPEALS) - , PATNA. 5. D.R., ITAT, PATNA. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR, INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. WAKODE.
