ITO, Faridabad V. Sh. Sanjay Kumar, Faridabad

ITA 4632/DEL/2011

• Counselvise Citation: 463220114 RSA 2011
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 15-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 20-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIDDI SRIVASTAVA
• Assessee Lawyers: VIMAL GOEL
• Keywords: Unexplained investment; Income from undisclosed sources; Opportunity of being heard; Additional evidence
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.4632/DEL/2011 ASSESSMENT YEAR : 2008-09 ITO, SHRI SANJAY KUMAR, WARD-1 (5), L/H OF LATE SMT. TEJI BAI, NEW DELHI. V. R/O H.NO.286, WARD NO.1, SIHI GATE, BALLABHGARH, FARIDABAD. CROSS OBJECTION NO.386/DEL/2011 IN I.T.A. NO.4632/DEL/2011 ASSESSMENT YEAR : 2008-09 SHRI SANJAY KUMAR, ITO, L/H OF LATE SMT. TEJI BAI, WARD-1 (5), R/O H.NO.286, WARD NOI.1, NEW DELHI. SIHI GATE, BALLABHGARH, FARIDABAD. V. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NIDDI SRIVASTAVA, SR. DR. RESPONDENT BY : SHRI VIMAL GOEL, ADVOCATE. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF LD CIT(A) DATED 29.7.2011. THE ASSESSEE HAS ALSO FILED CROSS O BJECTION TO THE APPEAL. THE REVENUE HAS TAKEN FIVE GROUNDS OF AP PEALS. HOWEVER, THE CRUX OF GROUND OF APPEALS IS THE GRIEVANCE OF REV ENUE AGAINST DELETION OF ADDITION OF ` .37,90,000/- MADE BY LD CIT(A) WHICH THE ASSESSING OFFICER HAD MADE VIDE ASSESSMENT ORDER DATED 7.7. 2010. ITA NO4632 &386/DEL/2011 2 THE REVENUE HAS ALSO TAKEN GROUND IN WHICH IT HAS RAISE D THE ISSUE OF CONTRAVENTION OF RULE 46A(3). THE REVENUES GRIEVANC E IS THAT LD CIT(A) HAD ACCEPTED CASH FLOW STATEMENT WHICH WAS NOT CONFRO NTED TO ASSESSING OFFICER AND THUS THERE WAS A VIOLATION OF RULE 46A(3). 2. THE GROUNDS TAKEN IN THE CROSS OBJECTION RAISED BY T HE ASSESSEE ARE AS UNDER:- 1. THAT THE CIT(A) WAS CORRECT IN LAW, UNDER THE FAC TS AND CIRCUMSTANCES OF THE CASE, IN ACCEPTING THE ADDITIONAL EVIDENCES AS SUBMITTED BY THE ASSESSEE UNDER RULE 46A OF THE IT RUL ES, 1962. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF ` .37,90,000/- MADE ON ACCOUNT OF DEPOSITS IN TWO BANK ACCOUNTS BELONGING TO THE ASSESSEE BY THE ASSESSING OFFICER SPECIFICALLY WHEN THE ASSESSING OFFICE R HAS NOT CONSIDERED THE CASH WITHDRAWN OUT OF THESE BANK AC COUNTS AND THE OPENING BALANCE OF CASH LYING WITH THE ASSESSEE AS ON 1.4.2006 AND 1.4.2007. 3. THAT THE CIT(A) HAS ACTED IN ACCORDANCE WITH LAW IN ACCEPTING THE OPENING BALANCE OF CASH IN HAND SPECIFICALLY WH EN THE ASSESSEE IS UNDER NO OBLIGATION TO MAINTAIN DAY TODAY BO OKS OF ACCOUNTS AND CANNOT FILE THE COPY OF BALANCE SHEET OR CAPITAL ACCOUNT ALONG WITH RETURN OF INCOME WITH THE DEPART MENT AS PER THE PREVAILING SYSTEM OF FILING THE INCOME TAX RETURN . 4. ANY OTHER GROUND OF CROSS OBJECTION AS MAY BE TAK EN AT THE TIME OF HEARING. ITA NO4632 &386/DEL/2011 3 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED HER RETURN OF INCOME ON 31.10.2008 DECLARING INCOME OF ` .1,60,590/-. THE INCOME WAS DECLARED UNDER THE HEAD INCOME FROM OTHER SOURCES. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT A SSESSEE WAS HAVING A NUMBER OF FDRS WITH UNION BANK OF INDIA. THEREFORE INFORMATION WAS ASKED FROM UNION BANK OF INDIA WHERE THE ASSESSEE WAS HAVING HER FIXED DEPOSITS ACCOUNTS. THE ASSESSING OFF ICER CAME TO KNOW THAT ASSESSEE WAS HAVING TWO SAVINGS BANK ACCOUNT WI TH UNION BANK OF INDIA WHEREIN SUBSTANTIAL CASH DEPOSITS WERE MAD E DURING THE YEAR. WHEN THE ASSESSEE WAS CONFRONTED WITH THE SOURCE O F THESE DEPOSITS, THE ASSESSEE SURRENDERED THE SAID AMOUNT OF CASH D EPOSITS AMOUNTING TO ` .37,90,000/-. THERE WERE OTHER ADDITIONS OF ` .3,26,000/- AND ` ..3148/- ALSO WHICH ARE NOT IN APPEAL BEFORE US. HOWE VER, AFTER THE COMPLETION OF ASSESSMENT, THE ASSESSEE FILED APPEAL BE FORE LD CIT(A) THOROUGH L/H OF THE ASSESSEE NAMELY SHRI SANJAY KUMAR AND SUBMITTED THAT THE SURRENDER MADE BY LD AR OF THE ASSE SSEE WAS WITHOUT THE CONSENT OF THE ASSESSEE AND ALSO FILED ADDITI ONAL EVIDENCE CONTENDING THAT THE ASSESSEE WAS HAVING CASH FLOW OF ` .38,73,000/- OUT OF WHICH ` .37,90,000/- WAS DEPOSITED IN BOTH ACCOUNTS. THE LD CI T(A) OBTAINED REMAND REPORT FROM ASSESSING OFFICER AND DELET ED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF AD DITIONAL EVIDENCE. 4. AT THE OUTSET, THE LD DR SUBMITTED THAT LD CIT(A) WITHOUT CONFRONTING THE ADDITIONAL EVIDENCE HAD DELETED THE ADDITION AND FURTHER ARGUED THAT CASH BALANCE AS ON 1.4.2006 AND A S ON 1.4.2007 WAS ACCEPTED BY LD CIT(A) WITHOUT ANY PROOF OF CAPIT AL ACCOUNT OR BALANCE SHEET AS NO BOOKS OF ACCOUNTS WERE MAINTAINED B Y THE ASSESSEE AND NO SUCH BALANCE SHEET OR CAPITAL ACCOUNT WAS FILED WITH THE RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT T HE ASSESSEE HAD ITA NO4632 &386/DEL/2011 4 SURRENDERED THE SAID DEPOSIT AS UNEXPLAINED DEPOSITS AN D HER L/H AFTER HER DEATH HAD COOKED A STORY THAT SURRENDER WAS MADE W ITHOUT CONSENT FROM THE APPELLANT. FURTHER ARGUING HE SUBMIT TED THAT ASSESSEES COUNSEL WAS GIVEN SUFFICIENT OPPORTUNITY TO PROV E THE SOURCE OF DEPOSIT IN TWO BANK ACCOUNTS. SPECIFICALLY A RGUING ON GROUND NO.4, HE SUBMITTED THAT COPY OF CASH FLOW STATEMENT EX PLAINING THE SOURCE OF CASH WAS FILED WITH LD CIT(A). HOWEVER, THE SAME WAS NOT DEALT BY ASSESSING OFFICER ON MERITS. THEREFORE, IN VIEW OF THE ABOVE, IT WAS ARGUED THAT APPEAL OF THE REVENUE NEEDS TO BE REM ITTED BACK TO ASSESSING OFFICER FOR HIS VERIFICATION AND FRESH ADJUDICA TION. 5. THE LD AR, ON THE OTHER HAND, ARGUED THAT REMAND REPORT WAS OBTAINED FROM ASSESSING OFFICER AND INVITED OUR ATTENTI ON TO PAGE 47 OF PAPER BOOK WHERE A COPY OF REMAND REPORT WAS PLACED. THEREFORE, HE SUBMITTED THAT THERE WAS NO VIOLATION OF RULE 46A. H E FURTHER TOOK US TO PAGE 18 WHERE A COPY OF LETTER DATED 29.6.2010 W RITTEN TO ITO, WARD-1(5) WAS PLACED. OUR SPECIFIC ATTENTION WAS INVIT ED TO PARA 4 OF THE LETTER WHEREIN THE LD AR OF THE ASSESSEE HAD SUBMITT ED THAT ASSESSEE WAS IN THE UN-CONSCIOUS STATE OF MIND AND WAS UNA BLE TO RENDER ANY EXPLANATION WHICH OTHERWISE WAS EXPLAINABL E WITH EVIDENCES AND SOURCES. IN VIEW OF THE ABOVE IT WAS ARGU ED THAT ASSESSEE HAD ALL EXPLANATIONS ABOUT SOURCES OF CASH DEPOSITS BUT DUE TO UN-CONSCIOUS STATE OF MIND WAS UNABLE TO RENDER THE SAME. REGARDING MERITS OUR ATTENTION WAS ALSO INVITED TO PAG E 33 WHERE A CASH FLOW STATEMENT WAS PLACED WHICH HAD ALL ENTRIES OF CASH WITHDRAWALS AND CASH DEPOSITS. IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT ASSESSEE HAD EXPLAINED THE SOURCES OF CASH DEPOSITS AN D THEREFORE LD CIT(A) HAD RIGHTLY DELETED THE ADDITIO N. ITA NO4632 &386/DEL/2011 5 6. ARGUING UPON CROSS OBJECTION FILED BY THE ASSESSEE, T HE LD AR INVITED OUR ATTENTION TO APPLICATION FILED UNDER RU LE 11 FOR RAISING ADDITIONAL CROSS OBJECTION IN WHICH THE LD AR HAD RAI SED THE FOLLOWING ADDITIONAL GROUND:- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D ASSESSING OFFICER HAS ACTED AGAINST LAW BY MAKING THE AD DITION U/S 68 OF THE INCOME TAX ACT, 1961 OF ` .37,90,000/- AS BANK STATEMENT IS NO BOOKS OF ACCOUNTS MAINTAINED BY THE ASSE SSEE. 7. THE ASSESSEE SUBMITTED THAT THIS BEING A LEGAL ISSUE AND THUS CAN BE TAKEN AT ANY FORUM AS HELD BY THE HON'BLE SUP REME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION V. CIT 22 9 ITR 383. THE ASSESSEE HAS FURTHER RELIED UPON A NUMBER OF CASE LAWS IN SUPPORT OF THIS ADDITIONAL GROUND OF APPEAL. 8. THE LD DR, ON THE OTHER HAND, SUBMITTED THAT ADDI TION WAS NOT MADE UNDER SECTION 68 AS ALLEGED BY THE LD AR AND RAT HER IT WAS MADE AS UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES AND IN THI S RESPECT OUR ATTENTION WAS INVITED TO PARA 7.1. OF THE ASSESSMENT ORDER. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT ASSESSEE DURING ASSESSMENT PROCEEDINGS HAD SURRENDERED THE C ASH DEPOSITS MADE IN THE BANK ACCOUNTS. HOWEVER, DURING AP PELLATE PROCEEDINGS THE L/H OF ASSESSEE PREPARED A CASH FLOW STATE MENT AND SUBMITTED THE SAME TO LD CIT(A). THE REMAND REPORT OB TAINED BY LD CIT(A) IS PLACED AT PAPER BOOK PAGE 47. THE ASSESSING O FFICER HAS NOT COMMENTED UPON THE MERITS OF CASH FLOW STATEMENT SUBM ITTED BY THE ASSESSEE AND RATHER REITERATED THAT DURING APPEAL PROCE EDINGS, THE LD ITA NO4632 &386/DEL/2011 6 AR HAS MADE A STORY WHICH WAS NOT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD CIT(A) WITHOUT GET TING MERITS OF THE CASE VERIFIED FROM ASSESSING OFFICER ACCEPTED THE ADDITI ONAL EVIDENCE WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS RULE 46 A(3) WHICH STATES AS UNDER:- 46A(3). THE DEPUTY COMMISSIONER (APPEALS OR AS THE CASE MAY BE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB RULE (1) UNLESS THE ASSESSING OFFICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY:- A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS EXAMI NE THE WITNESS PRODUCED BY THE APPLICANT OR B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLAN T. THUS THE REQUIREMENT OF RULE 46A(3) IS THAT AFTER ADM ISSION OF ADDITIONAL EVIDENCE CIT(A) HAS TO GIVE ANOTHER OPPOR TUNITY TO ASSESSING OFFICER TO COMMENT ON MERITS OF SUCH EVIDENCE. HON'BL E DELHI HIGH COURT IN THE CASE OF CIT V. MANISH BUILD WELL (P) LTD . 204 TAXMAN 106 HAS VERY ELABORATELY DISCUSSED THIS ISSUE AND HAS HELD THAT ASSESSING OFFICER NEEDS TO BE GIVEN OPPORTUNITY OF COMMENTING ON MERITS ONCE THE ADDITIONAL EVIDENCE IS ADMITTED. HERE IN THE PRE SENT CASE, NO SUCH EXERCISE HAS BEEN UNDERTAKEN. THEREFORE, IN OUR CONSID ERED OPINION, THE CASE OF THE ASSESSEE IS REQUIRED TO BE RE-ADJUDICATE D BY ASSESSING OFFICER. THEREFORE, WE SET ASIDE THE ORDER OF LD CIT (A) FOR RE- ADJUDICATION BY ASSESSING OFFICER. NEEDLESS TO SAY THAT A SSESSEE WILL BE GIVEN A PROPER OPPORTUNITY OF BEING HEARD. 10. AS REGARDS CROSS OBJECTIONS FILED BY THE ASSESSEE IN THE ORIGINAL GROUNDS OF APPEAL, THE ASSESSEE HAS RELIED UPON THE ORDER OF LD CIT(A) ITA NO4632 &386/DEL/2011 7 WHICH ARE NOT MAINTAINABLE AS THE ASSESSEE WAS NOT AGGR IEVED WITH THE ORDER OF LD CIT(A). THEREFORE ORIGINAL CROSS OBJECTIO NS VIDE GROUND 1 TO 3 ARE DISMISSED. 11. AS REGARDS ADDITIONAL GROUND OF CROSS OBJECTION TA KEN BY THE ASSESSEE, THOUGH WE ADMIT THE SAME BUT WE DO NOT FIND IT TO BE MAINTAINABLE AS THE ADDITION WAS NOT MADE U/S 68. THE ASSESSING OFFICER HAS NOT MENTIONED ANY PARTICULAR SECTION UNDE R WHICH THE ADDITION WAS MADE. THE ADDITION WAS MADE ON THE BASIS O F UNEXPLAINED INVESTMENTS WHICH ARE COVERED BY SECTION 69 OF THE INC OME TAX ACT, 1961. THE ASSESSING OFFICER NO WHERE HAS MENTIONED SECTIO N 68. THEREFORE, ADDITIONAL GROUND OF APPEAL IS ALSO DISMISSED . 12. IN VIEW OF THE ABOVE, THE CROSS OBJECTION FILED B Y THE ASSESSEE IS DISMISSED WHEREAS THE APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. SD/- SD/- (RAJPAL YADAV ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 31.10.2013. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO4632 &386/DEL/2011 8 DATE OF HEARING 15.10.2013 DATE OF DICTATION 28.10.2013 DATE OF TYPING 28.10.2013 DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.