SHRI MANISH PARNAMI, Jaipur V. ITO, Jaipur

ITA 471/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82831 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEEPTH
• Keywords: Business income; Opportunity of being heard; Revised return
• Section: 80C; 142(1); 5(2); 133(6)

Judgement Text

ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 471/JP/2012 ASSESSMENT YEAR: 2008-09 PAN : ALHPP 0022 F SHRI MANISH PARNAMI VS. THE ITO B-400, HARI MARG WARD- 5 (2) MALVIYA NAGAR, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL DEPARTMENT BY: MRS. NEENA JEEPTH DATE OF HEARING: 13-10-2014 DATE OF PRONOUNCEMENT: 28 -11-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-II, JAIPUR, DATED 16-03-2012 WHEREIN FOLLOW ING GROUNDS ARE RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE ADDITION OF RS. 6,83,000/- BY ALLEGING THE DEPOSIT IN THE BANK ACCOUNT AS UNE XPLAINED WITHOUT CONSIDERING THE FACT AND SUBMISSION , THUS THE SAME DESERVE TO BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD.CIT(A) HAS GROSSLY ERRED IN NOT ALLOWING THE SET -OFF OF THE SHARE TRADING LOSS AMOUNTING-TO RS. 1,18,812/- WHEN THE A SSESSEE HAS PRODUCED THE EVIDENCE OF THE SAME BEFORE THE LD. CI T(A), WHO OUGHT ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 2 TO HAVE ADMIT THE SAME AND ALLOWED THE LOSS TO ASSE SSEE THUS THE SET- OFF OF THE SHARE TRADING LOSS BEING LEGITIMATE CLAI M DESERVES TO BE ALLOWED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD.CIT(A) HAS GROSSLY ERRED IN NOT ALLOWING THE DED UCTION U/S 24 OF INCOME TAX ACT, 1961 OF RS. 51,002/- WHEN THE AS SESSEE HAS PRODUCED THE EVIDENCE OF THE SAME BEFORE THE LD. CI T(A), WHO OUGHT TO HAVE ADMITTED THE SAME AND ALLOWED THE DEDUCTIO N U/S 24, THUS THE DEDUCTION U/S 24 BEING LEGITIMATE CLAIM DESERVES TO BE ALLOWED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN NOT ALLOWING THE DEDUC TION U/C VI-A OF RS. 1,00,000/- WHEN THE SAID INVESTMENT HAS BEEN L EGITIMATELY MADE BY THE APPELLANT AND THE EVIDENCES OF THE SAME HAS BEEN PRODUCED BEFORE THE LD. CIT(A), THUS THE DEDUCTION U/C VI-A DESERVES TO BE ALLOWED. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND ALSO DERIVES INCOME AS A PARTNER IN M/S. MEDI PHARMA. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS AO FOUND VARIOUS DEPOSITS IN BANK A/CS FOR WHICH INQUIRIES WERE MADE. AO WAS OF THE VIEW ASSESSEE FA ILED TO OFFER SATISFACTORY EXPLANATION, CONSEQUENTLY ADDITION OF RS. 11.13 LA CS WAS MADE BEING CASH DEPOSITS AND WITHDRAWAL IN ICICI BANK HELD IN JOINT NAME OF ASSESSEE AND HIS WIFE SMT. SHIKA PARNAMI WHO IS AN ADVOCATE. 2.2 IN FIRST APPEAL, THE LD. CIT(A) HELD THAT CASH FLOW STATEMENT GIVEN BY THE ASSESSEE CONTAINED DEPOSITS AND WITHDRAWALS FRO M THE A/C. IT WAS HELD ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 3 THAT THE PEAK OF THE CREDITS WAS TO BE ADDED AND RE STRICTED THE ADDITION TO RS. 6.83 LACS. 3.1 APROPOS GROUND NO. 2 WHEREIN THE ASSESSEE CLAIM ED SET OFF SHARE TRADING LOSS OF RS. 1,18,812/- WAS NOT ADMITTED BY LD. CIT(A) ON THE GROUND THAT THE CLAIM WAS NOT INCLUDED IN THE RETURN OF IN COME BUT WAS SUBSEQUENTLY FILED BEFORE THE AO DURING ASSESSMENT. 4.1 APROPOS GROUND NOS. 3 AND 4 ALSO LD. CIT(A) DID NOT ADMIT THE GROUNDS ON THE SAME REASONING THAT NO SUCH CLAIMS W ERE MADE IN THE RETURN OF INCOME AND WERE RAISED BEFORE THE AO. THEREFORE, THEY WERE DISMISSED AS NOT ADMITTED BY FOLLOWING OBSERVATIONS. 6. IN THE FOURTH, FIFTH AND SIXTH GROUNDS OF APPE AL, THE APPELLANT HAS SOUGHT DEDUCTION OF SHARE TRADING LOS S OF RS. 1,18,812/- AGAINST THE BUSINESS INCOME, DEDUCTION OF INTEREST ON HOUSING LOAN AMOUNTING TO RS. 51,002/- AND DEDUCTION U/S 80C AMO UNTING TO RS. 1,00,000/-. HOWEVER, I FIND THAT THESE DEDUCTIONS W ERE NOT SOUGHT BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM. FURTHER NO SUCH CLAIM WAS EVER MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO. IN VIEW OF ABOVE FACTS, THESE GROUND S OF APPEAL DO NOT EMANATE FROM THE ORIGINAL ASSESSMENT ORDER AND ARE NOT BEING ADMITTED. THESE GROUNDS OF APPEAL ARE ACCORDINGLY D ISMISSED IN LIMINE. 4.2 AGGRIEVED, THE ASSESSEE IS BEFORE US. 5.1 ADVERTING TO GROUND NO. 1, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ASSESSEE IS REGULARLY ASSESSED TO INCOME-T AX AND HAS BEEN FILING HIS BALANCE SHEET ALONG WITH RETURN OF INCOME EVERY YEA R. IN THE RETURN OF ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 4 INCOME OF ASSESSMENT YEAR 2007-08, THE CLOSING CRED IT BALANCE AS ON 31-03- 2007 AMOUNTING TO RS. 4,70,395/- WAS DISCLOSED TO T HE DEPARTMENT AND THE CASH BALANCE AS ON 31-03-2008 IS TO THE TUNE OF RS. 1,26,747/-. THUS THE BALANCE OF RS. 3,43,648/-WAS AVAILABLE MORE WITH TH E ASSESSEE WHICH OUGHT TO HAVE BEEN REDUCED FROM THE PEAK OF THE CASH CRED ITS AS WORKED OUT BY THE LD. CIT(A). SIMILARLY, THE LD. CIT(A) HAS REFUSED TO ADMIT THE GROUND NOS. 2, 3 AND 4 AS MENTIONED IN THE MEMO OF APPEAL WITH OUT APPRECIATING THE FACTS PROPERLY. THE LD. COUNSEL FOR THE ASSESSEE RE FERRED TO THE NARRATION OF FACTS AS MENTIONED IN AOS ORDER AS UNDER:- 3.1 THE ASSESSEE FILED ITS RETURN IN FORM ITR 3 O N 30- 03-2009 DECLARING TOTAL INCOME OF RS. 66,920/-. THE ASSESSEE HAS DECLARED INCOME FROM PARTNERSHIP FIRM ONLY IN T HE RETURN OF INCOME. SUBSEQUENTLY, LOSS FROM SHARES HAS ALSO BEE N DECLARED IN THE WRITTEN SUBMISSIONS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE FIRST QUESTIONNAIRE IN THIS CASE A LONGWITH NOTICE U/S 142(1) WAS ISSUED ON 15-01-2010. THE CAS E WAS FIXED FOR HEARING ON 29-01-2010. HOWEVER, NO COMPLIANCE W AS MADE BY THE ASSESSEE. MEANWHILE AS PER ITS DATA AVAILABL E IN THE CASE INFORMATION U/S 133(6) OF THE I.T. ACT, 1961 WAS CA LLED FROM THE ICICI BANK LTD. , MUMBAI. ON 04-08-2010, FURTHER NO TICE U/S 142(1) WAS ISSUED TO THE ASSESSEE ALONGWITH QUESTIO NNAIRE. THE A/R MR. R.P. AGARWAL, C.A. FILED WRITTEN REPLY ON T HE DATE OF HEARING. IN RESPECT OF NATURE OF THE BUSINESS, IT WAS SUBMITTED VIDE WRITTEN SUBMISSION DATED 11-08-2010 AS UNDER:- A PERUSAL OF THESE OBSERVATIONS BY THE AO REVEAL TH AT THE ASSESSEE HAS MADE THE REQUISITE CLAIMS DURING THE COURSE OF ASSESSME NT PROCEEDING. ONLY A ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 5 TECHNICAL FORMALITY OF FILING THE REVISED RETURN WA S NOT COMPLETED DUE TO INADVERTENCE. THE AO DID NOT ENTERTAIN THE CLAIM MA DE BY THE ASSESSEE ON THE TECHNICAL GROUND THAT NO REVISED RETURN WAS FIL ED WHICH WAS PERHAPS INSPIRED BY HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZE (INDIA ) LTD. VS. CIT, 284 ITR 323. 5.2 IT IS VEHEMENTLY ARGUED THAT RIGOR OF GOETZE (INDIA ) LTD. VS. CIT, (SUPRA) DECISION IS APPLICABLE TO THE AO AND NOT T HE APPELLATE AUTHORITIES INCLUDING CIT(A). THE HON'BLE SUPREME COURT HAS CL EARLY OBSERVED THAT APPELLATE AUTHORITY CAN ENTERTAIN SUCH CLAIM OF THE ASSESSEE IF IT IS NOT CONSIDERED BY THE AO FOR WANT OF REVISED RETURN. TO ENTERTAIN ANY OTHER GROUNDS TO ENSURE A FAIR AND PROPER ASSESSMENT, THE APPELLATE AUTHORITY HAS INHERENT POWERS. THE AO IS ALSO UNDER OBLIGATION T O MAKE THE ASSESSEE'S AWARE OF HIS TAX RIGHTS ABOUT THE PROPER TAXATION A ND LAWFUL CLAIM AVAILABLE TO THE ASSESSEE UNDER THE ACT. THE FINDINGS OF THE LD. CIT(A) THAT THESE GROUNDS DO NOT EMERGE FROM THE ORDER OF THE AO ARE UNJUSTIFIED INASMUCH AS THE AO HAS ACKNOWLEDGED THE MAKING OF THE CLAIM BUT HAS NOT CONSIDERED THEM FOR WANT OF REVISED RETURN. IN VIEW OF THESE F ACTS, THE FINDINGS OF THE LD. CIT(A) THAT THESE ISSUES DO NOT EMERGE FROM THE AO IS NOT BORNE OUT FROM THE RECORD. CONSEQUENTLY THE DISMISSAL OF ASSESSES GROUNDS AS UNADMITTED IS HARSH AND ARBITRARY. HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA ) ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 6 LTD. VS. CIT, (SUPRA) HAS DEALT WITH THIS INEVENTUA LITY AND VESTED THE APPELLATE AUTHORITIES WITH POWERS TO ENTERTAIN ASSE SSES CLAIMS FOR A FAIR AND PROPER ASSESSMENT. IT IS PLEADED THAT THE ASSESSEE' S CLAIM BEING LEGITIMATE MAY BE ALLOWED. 5.3 THE LD. DR IS HEARD. 5.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. APROPOS THE DIFFERENCE IN CASH IN HAND BETWEEN THE BALANCE SHEET OF YEAR ENDING 31-03-207 AND 31-03-20 08, THE FIGURES EMERGE AS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE. B ESIDES GROUND NO. 2, 3 AND 4 AS RAISED BY THE ASSESSEE APPEARS TO HAVE BEE N RAISED BEFORE THE AO ALBEIT WITHOUT A REVISED RETURN. THEY WERE NOT ALLO WED AS THE ASSESSEE HAD NOT FILED THE REVISED RETURN OF INCOME. THE LD. CIT (A) SUMMARY FINDINGS THAT GROUNDS ARE NOT ADMITTED ON OBSERVATION THAT THE IS SUES DO NOT EMANATE FROM THE ORDER OF THE ARE NOT CORRECT. WE FIND MERIT IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT CLAIMS OF THE ASSESSE E SHOULD HAVE BEEN ADJUDICATED. THE INCOME TAX PROCEEDINGS ARE NON ADV ERSARIAL IN NATURE AND GOETZE INDIA JUDGMENT VEST THE POWERS IN APPELLATE AUTHORITIES TO ADJUDICATE THE LAWFUL CLAIMS OF THE ASSESSEE. IN CONSIDERATION OF ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO SET A SIDE THE ISSUE BACK TO THE FILE OF THE AO TO DECIDE THE ISSUES AS RAISED BY AS SESSEE AFRESH INCLUDING THE ITA NO. 471/JP/2012 MANISH PARNAMI S ITO , WAR D- 5(2) JAIPUR 7 ASSESSEE'S CLAIMS IN RESPECT OF GROUND NOS. 2, 3 A ND 4 BY PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD. THUS THE APPEA L OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 -11-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 28 TH NOV 2014 *MISHRA COPY FORWARDED TO:- 1.SHRI MANISH PARNAMI, JAIPUR JAIPUR 2. THE ITO, WARD- 5 (2), JAIPUR 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 471/JP/2012) AR ITAT, JAIPUR