Sohan Lal, Dhuri V. ACIT, Ludhiana

ITA 441/CHANDI/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9797 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Salary income; Opportunity of being heard; Source of fund
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NOS. 422 TO 427/CHD/2014 (ASSESSMENT YEARS : 2001-02 TO 2006-07) AND ITA NO. 441/CHD/2014 (ASSESSMENT YEAR : 2007-08) SOHAN LAL, VS. THE A.C.I.T., S/O SH.DIWAN CHAND, CENTRAL CIRCLE 1, NEAR TELEPHONE EXCHANGE, LUDHIANA. DHURI. PAN: AFVPB6867P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAK AGGARWAL RESPONDENT BY : SMT.RAJINDER KAUR, DR DATE OF HEARING : 20.07.2015 DATE OF PRONOUNCEMENT : 22.07.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS ORDER SHALL DISPOSE OFF ALL THE APPEALS FIL ED BY THE ASSESSEE AGAINST DIFFERENT ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA AL L DATED 20.2.2014 FOR ASSESSMENT YEARS 2001-02, 2002- 03, 2 2003-04, 2004-05, 2005-06, 2006-07 AND 2007-08, IN WHICH IDENTICAL GROUNDS HAVE BEEN RAISED. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORI TIES BELOW. 3. IN ALL THE APPEALS, THE ASSESSEE CHALLENGED THE ADDITION OF RS.82,470, RS.82,110/-, RS.81,250/-, RS .81,880/-, RS.48,500/-, RS.69,930/- AND RS.90,000/- RESPECTIVE LY IN ALL THE ABOVE ASSESSMENT ORDERS. 4. BRIEFLY, THE FACTS OF THE CASE ARE THAT SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED ON 12.10.2006. THE ASSESSING OFFICER AFTER GIVING OPPORTUNITY OF BEING HEARD PASSED ASSESSMENT ORDERS UNDER SECTION 153A OF THE ACT AND MADE THE ABOVE ADDITIONS IN ALL THE ASSESSMENT YEAR S. THE ASSESSING OFFICER MADE ALL THESE ADDITIONS ON ACCOU NT OF INCOME EARNED BY SMT.DIMPLE BANSAL. THE ASSESSING OFFICER IN THIS REGARD, HAS OBSERVED THAT WHILE COMPLETING ASSESSMENT IN THE CASE OF SMT.DIMPLE BANSAL, WIFE OF THE ASSES SEE, IT WAS SEEN THAT THE SHARE TRADING INCOME FOR THE ASSESSME NT YEARS 2001-02 TO 2004-05 HAD BEEN DECLARED AND ASSESSEE O N BEING CONFRONTED WITH THE QUERY REGARDING TRANSACTION LEA DING TO SUCH PROFIT COULD NOT GIVE ANY EVIDENCE. THE ASS ESSING OFFICER, THEREFORE, PROCEEDED TO TREAT SUCH SHARE T RADING INCOME IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS AND MADE FOLLOWING ADDITIONS IN THE ASSESSMENT YEARS AS UNDER : 3 HEAD OF INCOME ASSTT. YEAR INCOME ASSESSABLE SHARES-TRADING /SPECULATIVE PROFITS 2001-02 82,470/- -DO- 2002-03 82,110/- -DO- 2003-04 81,250/- -DO- 2004-05 81,880/- INCOME FROM TUITION/BUSINESS INCOME 2005-06 72500-24000= 48500 -DO- 2006-07 69,930 -DO- 2007-08 90,000 5. THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT (APPEALS) THAT THE ASSESSING OFFICER HAS TREATED T HE INCOME EARNED BY THE ASSESSEES WIFE AS INCOME OF THE ASS ESSEE IGNORING THE FACT THAT THE INCOME EARNED WAS SPECUL ATIVE IN NATURE AND THE SAME HAS BEEN CREDITED TO THE BANK A CCOUNT OF THE WIFE OF ASSESSEE THROUGH BANKING CHANNEL, WHICH CLEARLY ESTABLISH THE GENUINENESS OF THE TRANSACTION IN THE NAME OF WIFE OF THE ASSESSEE, WHICH WAS NOT RELATED TO THE ASSESSEE IN ANY MANNER. NO POSITIVE EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER THAT THE INCOME IN QUESTION WAS IN FACT EARNED BY THE ASSESSEE. THE LEARNED CI T (APPEALS), HOWEVER, DISMISSED THE APPEALS OF THE AS SESSEE. IT IS STATED THAT THE FINDINGS OF THE LEARNED CIT (APP EALS) ARE ALMOST IDENTICAL IN ALL THE ASSESSMENT YEARS. THER EFORE, THE FINDINGS GIVEN IN ASSESSMENT YEAR 2001-02 WHICH ARE MAINLY ARGUED BY BOTH THE PARTIES ARE REPRODUCED AS UNDER : 9. I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE ASSESSING OFFICER AND THE ARGUMENTS OF THE AR ON TH E ISSUE IN THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS. I T IS SEEN THAT THE ASSESSEE DURING ASSESSMENT PROCEEDINGS COU LD NOT GIVE DETAILS REGARDING SHARE TRADING INCOME EARNED B Y HIS WIFE FROM TIME TO TIME OVER NUMBER OF YEARS STARTING FRO M ASSTT. 4 YEAR 2001-02 TO 2007-08. THE ASSESSEE ON BEING CONF RONTED WITH THE SAME COULD NOT PROVIDE THE DETAILS OF SHAR E TRADING AND PROFIT THEREOF FOR ASSTT. YEAR 2001-02 TO 2007-08 A ND MERELY STATED THAT THE SAID DETAILS WERE IN THE RETURN OF INCOME FILED FOR THE RELEVANT YEAR. THE ASSESSING OFFICER UNDER CIR CUMSTANCES CAME TO THE LOGICAL CONCLUSION THAT SAID SHARE TRAD ING PROFITS WERE A MERE NET ENTRY AS NO BACK GROUND DETAILS OF PURCHASES AND SALES, INVESTMENT IN SPECIFIC SHARE/SALES THERE OF ETC. COULD BE PLACED ON RECORD. IT MEANT THAT THE ASSESS EE HAD NO DETAILS OR RECORD TO SUBSTANTIATE CLAIM THAT SHE HA D EARNED INCOME FROM SHARE TRADING. SINCE HER HUSBAND IS EA RNING INCOME FROM BUSINESS OPERATION, THE ASSESSING OFFIC ER LOGICALLY CAME TO THE CONCLUSION THAT INCOME SHOULD BE SUBSTANTIALLY ASSESSED IN HIS HANDS AS WORKED OUT I N THE ASSESSMENT ORDER. THEREFORE, THE ADDITION SO MADE IS CONFIRMED. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ABOVE ADDITIO NS IN THE HANDS OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEES WIFE WAS FILING RETURN OF INCOME PRIOR TO SEARCH SHOWING THE AMOUNT IN QUESTION AS I NCOME EARNED BY HER AND SUCH INCOME WAS ALSO CREDITED IN THE BANKS THROUGH BANKING CHANNELS. THEREFORE, THERE WERE NO BASIS TO TREAT HER INCOME AS INCOME EARNED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER NOTED THA T THE ASSESSEE WHILE FILING THE RETURNS UNDER SECTION 153 A OF THE ACT HAS SHOWN INCOME FROM GROSS SALARY, GROSS RENT, BANK INTEREST AND INCOME FROM OTHER SOURCES. THE DETAI LS OF SAME ARE NOTED AT PAGE 2 OF THE ASSESSMENT ORDER, IN WHI CH THE ASSESSEE HAS DECLARED SALARY INCOME FROM ASSESSMENT YEAR 2001-02 TO ASSESSMENT YEAR 2004-05. THE GROSS RE NT WAS 5 SHOWN IN ALL THE ASSESSMENT YEARS UNDER APPEAL. T HE BANK INTEREST IS SHOWN IN ASSESSMENT YEAR 2007-08 AND IN COME FROM OTHER SOURCES WAS SHOWN IN ASSESSMENT YEAR 200 2-03, 2005-06 AND 2006-07. THUS, THE ASSESSEE HAS SHOWN NET DECLARED INCOME FROM THESE SOURCES IN THE RETURNS O F INCOME FILED IN RESPONSE TO THE NOTICES ISSUED UNDER SECTI ON 153A/142(1) OF THE ACT. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS ASSESSED THE INCOME OF THE ASS ESSEE FROM THESE SOURCES, MAY BE BY ADOPTING THE DIFFEREN T FIGURES. THUS, IT IS CLEAR THAT THE SOURCES OF INCOME OF THE ASSESSEE IN ALL THE ASSESSMENT YEARS WERE MAINLY FROM GROSS SAL ARY, GROSS RENT, BANK INTEREST AND OTHER SOURCES. THE CIT (A PPEALS) CONFIRMED THE ABOVE ADDITIONS IN THE HANDS OF THE A SSESSEE HOLDING THAT SINCE HER HUSBAND IS EARNING INCOME FR OM BUSINESS OPERATION, THE ASSESSING OFFICER HAS LOGIC ALLY AND CORRECTLY MADE SUBSTANTIVE ADDITIONS IN THE HANDS O F THE ASSESSEE. IN FACT, THE ABOVE SOURCE OF INCOME CLE ARLY SHOWS THAT THE ASSESSEE WAS NOT DOING ANY BUSINESS OPERAT ION. IT IS FURTHER SEEN THAT THE ASSESSING OFFICER MADE ABOVE ADDITIONS ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE B ECAUSE THE DETAILS OF SHARE TRADING COULD NOT BE FILED BEFORE THE ASSESSING OFFICER. THIS WAS A MERE INFERENCE DRAWN AGAINST THE ASSESSEE IN THE ABSENCE OF MATERIAL PRODUCED FOR TH E CASE OF SMT.DIMPLE BANSAL. THE ASSESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT IN FACT THE AS SESSEE HAD EARNED ABOVE INCOME. THEREFORE, CONSIDERING THE T OTALITY OF THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THA T THE ASSESSING OFFICER MADE ABOVE ADDITIONS MERELY ON TH E BASIS OF 6 PRESUMPTION OF CERTAIN FACTS WITHOUT BRINGING ANY M ATERIAL AGAINST THE ASSESSEE ON RECORD. THUS, THE ADDITIO NS CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. WE ACCORDIN GLY, SET ASIDE ALL THE IMPUGNED ORDERS AND DELETE ALL THE AD DITIONS MADE IN THE HANDS OF THE ASSESSEE. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND JULY, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH