Shri Rajesh Pravinkant Joshi, RAJKOT-GUJARAT V. The Income Tax Officer, Ward 4 (2), RAJKOT-GUJARAT

ITA 458/RJT/2008

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0220 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-12-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 19-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DR ADHIA
• Keywords: Unexplained investment; Search and seizure; Principle of natural justice; Corroborative evidences
• Section: 143(3); 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . , . . , BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO . 458/RJT/200 8 ASSESSMENT YEAR - 2000 - 01 AND ITA NO.79 7 / RJT/20 10 ASSESSMENT YEAR 2000 - 01 SHREE RAJESH PRAVINKANT JOSHI, DINESH NIVAS, 4,JUNCTION PLOT, HOUSING SOCIETY, RAJKOT, PAN: ABKPJ8344B ( / APPELLANT) VS. THE I NCOME TAX OFFICER WARD - 4(2), RAJKOT / RESPONDENT / ASSESSEE BY SHRI D.R.ADHIA / REVENUE BY SHRI. AVINASH KUMAR / DATE OF HEARING 1 9 .12.2012 / DATE OF PRONOUNCEMENT 14 . 12. 20 12 / ORDER . . , / T. K. SHARMA, J. M. THESE APPEALS BY THE ASSESSEE ARE AGAINST THE TWO SEPARATE ORDERS DATED 1.5.2008 AND 15.12.2009 OF CIT(A), RAJKOT FOR THE ASSESSMENT YEAR 2000 - 01. BOTH THESE APPEALS WERE HEARD TOGE THER ON THE SAME DATE AND ARGUED BY THE COMMON REPRESENTATIVE, THEREFORE, THESE APPEALS ARE BEING DECIDED BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN EMPLOYEE OF BSNL, RAJKOT. THE AO RECEIVED INF ORMATION FROM THE DDI WING OF THE ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 2 DEPARTMENT WHEREIN IT IS STATED THAT THE ASSESSEE AND HIS FAMILY MEMBERS HAD MADE INVESTMENTS OF RS. 9,75,000 0/ - IN THE NAME OF HIS MOTHER JAYANTABEN B.JOSHI I N BARODA TELEGRAPH ENGG. CO. - OPERATIVE CREDIT S OCIETY . TH E AFORESAID INVESTMENTS WERE MADE THROUGH HIS BROTHER - IN - LAW, SHRI R . T . SHARMA. APART FROM TH E ABOVE, T HE ASSESSEE ALSO EARNED INTEREST OF RS. 34,350 / - ON INVESTMENTS . THE AO FRAMED ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT FOR THE ASSESSMENT YEAR 2000 - 01 WHEREIN HE TREATED THE INVESTMENT OF RS. 9,75,000 / - INVEST ED IN THE NAME OF HIS MOTHER JAYANTABEN B JOSHI AS UNEXPLAINED INVESTMENT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 69 OF THE ACT. IN THIS ASSESSMENT YEAR, THE AO COMPUTED ALL THE INCOME AT RS. 10,92,154 / - . 3. ON APPEAL, BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THAT ADDITION OF RS .9,75,000/ - MADE BY THE AO BE DELETED AS IT IS ALREADY ADDED IN THE NAME OF SHRI R . T . SHARMA OF BARODA AND THE SAME CANNOT BE ADDED IN THE C A SE OF THE ASSESSEE OTHERWISE IT AMOUNT TO DOUBLE TAXATION OF THE SAME AMOUNT. ALTERNATIVELY, IT WAS ALSO CONTENDED THAT THE AO BE DIRECTED TO AD D THE AMOUNT IN THE RESPECTIVE NAME OF EACH DEPOSITOR AND IN EACH RELEVANT ASSESSMENT YEAR. AFTER CONSIDERING THE AFORESAID SUBMISSIONS IN THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED THE ADDITION FOR THE DETAILED REASONS GIVEN IN PARAGRAPHS 3.3 AND 3.4 WHICH READS AS UNDER : 3.3 I HAVE CAREFULLY CONSIDERED THE FINDING GIVEN BY THE AO AND THE SUBMISSION OF THE AR OF THE APPELLANT. IT IS A FACT THAT THE OWNERSHIP OF DEPOSITS OF RS. 9,75,000 / - MADE WITH VADODARA TELEGRAPH ENGG. CO - OP CREDIT SOCIETY, BARODA AND BARODA TELECOM CO - OP SOCIETY, BARODA HAS BEEN ACCEPTED BY ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 3 APPELLANT AND HIS FAMILY MEMBERS IN HIS HAN DS . ONCE THE OWNERSHIP OF T HE CASH HAS BEEN ACCEPTED, THE PRIMARY ONUS LIES ON THE APPELLANT TO PROVE THE SOURCE SATISFACTORILY . IT IS NOTICED THAT A COOK UP STORY WAS MADE BY THE APPELLANT TO EXPLAIN THE SOURCE OF CASH OF RS. 9,75 ,0 0 0/ - WHICH WAS CLAI MED TO HAVE BEEN RECEIVED THROUGH A WILL OF THEIR AUNTY, SMT.HIRABEN MANISHANKAR JOSHI. AS DISCUSSED, THE AO THOROUGHLY EXAMINED THE SOURCE OF INCOME IN THE HANDS OF AUNTY, SMT.HIRABEN MANISHANKAR JOSHI AND FOUND THAT SHE WAS WORKING AS A MATRON AT SAJUBA HOSPITAL, JAMNAGAR AND RETIRED 36 YEAR S BACK AND THEREFORE, IT WAS UNBELIEVABLE THAT SHE WAS HAVING SUCH HUGE AMOUNT. THE W ILL WAS ALSO PREPARED AT THE AGE OF 98 YEARS ON 6.6.2 0 01. THESE ARE ALL DOUBTFUL EVIDENCES AND SAME ARE NOT CORROBORATED BY A NY DOCUMENT OR WITNESSES WHICH PROVE THE EXISTENCE OF SUCH HAPPENINGS AND THEREFORE, THE AO HAS RIGHTLY DISBELIEVED THAT STORY. IN THIS REGARD, I CONFIRM THE FINDING OF THE AO AND HELD THAT APPELLANT HAS FAILED TO SATISFACTORY EXPLAIN THE CASH DEPOSITS OF RS. 9,75 ,000/ - MADE IN THE NAME OF APPELLANT AND FAMILY MEMBERS WITH THE SOCIETIES, NAMELY, VADODARA TELEGRAPH ENGG. CO - OP CREDIT SOCIETY, BARODA A ND BARO DA TELE C OM CO - OP.SOCIETY, BARODA AND THEREFORE , THE AO S ACTION IN ADDITION THE SAME U/S 69 OF THE I T ACT IS HEREBY CONFIRMED AND ALSO THE ADDITION OF RS. 34,350 / - MADE ON ACCOUNT OF INTEREST ACCRUED ON ABOVE DEP OSITS OF RS. 975000/ - IS CONFIRMED. THESE GROUNDS OF APPEAL ARE DISMISSED. 3.4 THE ALTERNATIVE PLEAS OF THE APPELLANT IS ALSO NOT TENABLE THAT IT SHOULD NOT BE ADDED IN THE HANDS OF THE APPELLANT AS THE SAME HAS BEEN ADDED IN THE HANDS OF SHRI R . T . SHARMA, HIS BROTHER - IN - LAW. FROM THE FACTS , IT IS CLEAR THAT SHRI R . T . SHARMA HAS NOT ACCEPTED THE OWNERSHIP OF THESE DEP OSITS , ON OTHER HANDS, HE IS CONTESTING THE ADDITION IN APPEALS. APPELLANT S CLAIM THAT IT SHOULD BE PROTECTIVELY ASSESSED IN HIS HANDS IS ALSO NOT TENABLE AS THE APPELLANT AND HIS FAMILY MEMBERS HAS MADE DECLARATION AND HAS ACCEPTED THE OWNERSHIP OF THE S E DEP OSITS . ONCE TH E OWNERSHIP HAS BEEN CLAIMED AND DECLARE D , ON THIS SUBSTANTIVE ADDITION IS REQUIRED TO BE MADE FOR THE MONEY CLAIMED TO BE OWNED BY THE APPELLANT AND THERE ARISES NO Q UESTION OF ANY PROTECTIVE ASSESSMENT IN THE HANDS OF THE APPELLANT . THEREFORE, THIS GR OUND OF APPEAL IS ALSO DISMISSED. 4. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUND S : 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFORMING ADDITION OF RS. 9,75 ,000/ - AND RS. 34,350 / - MADE BY THE LD. AO. THE SAME NEEDS DELETION ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 4 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT FOLLOWING THE BASIC PRINCIPLES OF THE INCOME TAX LAW THAT NO INCOME CAN BE TAXE D TWICE AND THEREBY ENDORSING THE ADDITION MADE AMOUNTING TO RS. 9,75,000 / - AND RS. 34,350/ - . THE SAME NEEDS DELETION 3. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT FOLLOWING THE SETTLED LAW AS ENUMERATED BY THE HON. SUPREME COURT AND POSITION THAT THE RIGHT PERSON HAS TO BE TAXED AND NO PERSON CAN BE ASSESSED ON THE I NCOME WHICH HAS NOT BEEN EARNED BY HIM. 4. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DISBELIEVING THE EXPLANATION SUBMITTED BY THE AS S ES S EE WITHOUT VERIFYING THE DETAILS WITH CORROBORATIVE EVIDENCES . 5. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT ACCEPTING THE POSITION THAT NO PROPER OPPORTUNITY WAS GIVEN AND STATUTORY AS WELL AS PRINCIPLES OF NATURAL JUSTICE WERE VIOLATED 6. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT ACCEPTING THE POSITION THAT THE ASSESSMENT IS BAD IN LAW AND VOI D - ABINITIO 7. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS NOT ACCEPTING THE POSITION THAT THE TOTAL AMOUNT INVOLVED WAS IN FACT ASSESSABLE IN THE HANDS OF RESPECTIVE MEMBERS OF THE FAMILY IN WHOSE NAME THE AMOUNT IS LYING AS DEPOSITE D. 8. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TREATING THE AMOUNT OF ADDITION MADE AS PROTECTIVE SINCE THE SAME AMOUNT WAS ALREADY TAXED ON SUBSTANTIVE BASIS IN THE CASE OF SHRI R T SHARMA AT BARODA BY THE IT DEPARTMENT. 9. W ITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THE AVAILINGLY OF PEAK POSITION . 5 . AT THE TIME OF HEARING, BEFORE US ON BEHALF OF THE ASSESSEE SHRI D . R . ADHIA, APPEARED AND FILED THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE OF RAJESH PRAVINKANT JOSHI V/S ITO IN ITA NO.90/RJT/2009 (AY - 2001 - 02) DATED 25.10.2010 AND ALSO SUBMITTED THAT : 1. THE ASSESSEE IS WORKING IN BSNL, RAJKOT IN LOWER CLERICAL CATEGORY., HIS BROTHER IN LAW SHRI RAMESHCH ANDRA T SHARMA WAS WORKING BSNL, BARODA, HE STA R TED SOME SCANDAL AT ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 5 BARODA IN 1997 IN AS MUCH AS HE STARTED TO PROV IDE ISD FACILITY (PHONE ABROAD) TO THE PUBLIC BY MISUSING THE BSNL MACHINERY. HE OCCUPIED AN OFFICE AND ALSO ENGAGED SALARIED PERSON AN D USED TO PROV IDE SUCH SERVICES MOSTLY DURING NIGHT TIME. 2. WHATEVER AMOUNT HE RECEIVED HE USED TO INVEST WITH BARODA ENG. TELEGRAPH CREDIT SOCIETY AND VAD ENGG.TELEGRAPH CREDIT SOCIETY IN SMALL PIECES IN VARIOUS NAMES OF IS RELATING AND USED TO RE NEW IT EVERY YEAR. THIS INCLUDE THE NAME OF ASSESSEE AND HIS FAMILY MEMBERS. 3. THE SCANDAL CONTINUED UP TO MAY 201. IN M AY 2001 POLICE DEPARTMENT RAIDED THE PREMISES AND COUGH THE PERSONS. FIR WERE FILED AND ULTIMATELY SHRI RAMESH SHARMA WAS SENT TO JAIL. 4. THE INCOME TAX DEPARTMENT ALSO STARTED ACTION AGAINST SHRI R T SHARMA. COPY OF ASSESSMENT ORDER FOR AY 2001 - 02 IS FURNISHED HERE WITH SHOWS AT LAST PAGE ANNEXURE - 2 HOW AN AMOUNT OF RS.14,80,000/ - DEPOSITED WITH CREDIT SOCIETY HAS BEEN A DDED IN HIS CASE. 5. SINCE THE NAME OF THE ASSESSEE AND HIS WI F E ARE ALSO APPEARING IN THE ORDER ANNEX IN THE CASE OF SHRI R.T.SHARMA, THE SAME AMOUNT IS ALSO ADDED IN THE CA S E OF ASSESSEE. THIS HAS RESULTED IN DOUBT TAXATION OF THE SAME AMOUNT, 1 IN THE HAND OF SHRI R.T.SHARMA AND ALSO IN THE CASE OF THE ASSESSEE. 6. SINCE THE AMOUNT IS ALREADY TAXED IN THE CASE OF R . T . SHARMA THE ADDITION OF RS. 975000/ - MADE IN THE CASE OF ASSESSEE OUGHT NOT TO HAVE BEEN MADE. 7. THIS ISSUE HAS NOT BEEN CON SIDERED BY THE LD.AO AND ALSO NO PROPER INQUIRY HAS BEEN MADE, THE ASSESSMENT MADE NEEDS TO BE RESTORED BACK TO THE AO WITH A DIRECTION TO THE CONSIDER THE FOLLOWING : 1. THE AMOUNT ALREADY ASSESSED IN THE HANDS OF SHRI R T SHARMA MAY B E DELETED SINCE NO DOUBLE TAXATION IS PERMISSIBLE UNDER THE ACT. 2. THE FIXED DEPOSITS MADE BY SHRI R T SHARMA IN THE NAME OF THE ASSESSEE AND HIS FAMILY MEMBER , THE INITIAL YEAR O F DEPOSIT MAY BE DETERMINED. 3. THE AMOUNT STANDING IN THE NAME OF FAMILY MEMBERS OF THE ASSESSEE CANNOT BE ADDED IN THE CASE OF THE ASSESSEE SINCE LAW DOES NOT PROVIDE SUCH ACCUMULATION. ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 6 4. THE MATTER MAY BE DECIDED BY CALLING RELEVANT RECORDS FROM ACIT CIRCLE - 6 BARODA UNDER WHOM SHRI R T SHARMA WAS ASSESSED 5. THE HON.ITAT RAJKOT IN THE C ASE OF ASSESSEE FOR AY 2001 - 02 (COPY ENCLOSED) HAS ALSO BEEN PLEASED TO RESTORE THE MATTER BACK TO THE AO WITH APPROPRIATE DIRECTION IN RESPECT OF A BOVE ISSUES. 6 . ON THE OTHER HAND, SHRI AVINASH KUMAR, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. THE LD. DR POINTED OUT THAT IN THE ASSESSMENT YEAR 2000 - 01, THE ADDITION OF RS.1,30,000/ - WAS MADE WHERE AS IN THE ASSESSMENT YEAR UNDER APPEAL, IT IS RS. 9,75,000 / - . NEITHER BEFORE THE AO NOR BEFORE THE FIRST APPELLATE AUTHORITY, TH E ASSESSEE IS ABLE TO EXPLAIN THE SAME , THEREFORE, THE ADDITION HAS RIGHTLY BEEN MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). THEREFORE , THE VIEW TAKEN BY THE LD. CIT(A) BE UPHELD . AS AGAINST THIS , THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE MATTER BE RESTORED TO THE FILE OF THE AO WITH A DIRECTION THAT TO THE EXTENT OF AMOUNT IS DOUBLING THE TAX IN THE HANDS OF SHRI R . T . SHARMA AND THE ASSESSEE TO THE EXTENT OF SHRI R T SHARMA, ACCEPTED THE ADDITION, THE ADDITION IN THE HANDS OF THE ASS ESSEE BE DELETED. 7 . HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE TRIBUNAL IN ASSESSEE S OWN CASE IN RAJ ESH PR A VINKANT JOSHI V/S ITO (SUPRA) RESTORE D THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION THAT IF THE ADDITION IS MADE IN THE HANDS OF SHRI R . T . SHARMA NO ADDITION SHOULD BE MADE OF THE SAME AMOUNT IN THE HANDS OF T HE ASSESSEE . BEFORE US , THE LD. COUNSEL OF THE ASSESSEE FAIRLY ACCEPTED TH A T ONLY THOSE ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 7 ADDITION S HOULD BE DELETED WHICH HAS ATTAINED FINALITY IN THE HANDS OF SHRI R . T . SHARMA. WE, THEREFORE , SET A S IDE THE ADDITION OF RS. 9,75,000/ - - AND RS. 34,350/ - TO THE FILE OF THE AO WITH A DIRECTION THAT THE UNEXPLAINED INCOME WHICH IS DOUBLING TO TAX AND SHRI R . T . SHARMA ACCEPTED THE SAME, THE ADDITION MADE IN THE HANDS OF THE ASSESSEE BE DELETED . FOR THIS PURPOSE THE ASSESSEE SHALL FURNISH ALL THE DETAILS AVAILABLE WITH HIM. THE AO IS ALSO FREE TO MAKE NECESSARY INQUIRY AND CROSS - VERIFICATION FROM THE ACI T , CIRCLE - 6 , BARODA UNDER WHOSE JURISDICTION THE SHRI R . T . .SHARMA IS ASSESSED TO TAX. 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ITA NO.797/RJT/2010 9. THIS APPEAL IS AGAINST THE ORDER DATED 15.12.2 009 OF LD. CIT(A), RAJKOT IN CONFIRMING THE PENALTY OF RS. 3,25,331/ - LEVIED U/S 271(1)( C ) OF THE ACT. 10. WE HAVE HEARD BOTH THE SIDES. THIS PENALTY HAS BEEN LEVIED ON THE ADDITION OF RS. 9,75,000/ - ON ACCOUNT OF INVESTMENTS IN FIX DEPOSITS WITH BAROD A TELEGRAPH ENGG.CO - OP CREDIT SOCIETY, BARODA AND BARODA TELECOME CO.OP SOCIETY BARODA AND RS. 34,350/ - ON ACCOUNT OF NET ACCRUED INTEREST EARNED ON THE SAID DEPOSIT. IN QUANTUM APPEAL VIDE PARAGRAPH 7 OF THIS ORDER , WE HAVE RESTORED THIS ISSUE TO THE FILE OF THE AO TO THE EXTENT OF THE ADDITION WHICH IS MADE IN THE HANDS OF SHRI R.T.SHARMA IS DELETED, THE AO IS DIRECTED TO REDUCE THE PENALTY ACCORDINGLY. ITA NO.458/RJT/200 8 ITA NO.797/RJT/2010 8 11. RESULTANTLY, THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, BOTH THE APPEALS FOR STATISTICAL PURPOSES ARE ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD SD ( . . / D. K. SRIVASTAVA) ( . . / T. K. SHARMA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ORDER DATE : 21. 12. 2012 /RAJKOT SRL / C OPY OF ORDER FORWARDED TO: - 1. / APPELLANT - . 2. / RESPONDENT - 3. / CONCERNED CIT . 4. - / CIT (A) . 5. , , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT. :