ACIT, Patiala V. Sh. Vishal Jain, Ambala City

ITA 486/CHANDI/2012

• Counselvise Citation: 48621514 RSA 2012
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 486/CHD/2012 ASSESSMENT YEAR: 2006-07 ACIT, CENTRAL CIRCLE, V SHRI VISHAL JAIN, PATIALA. # 37/1, HUDA, AMBALA CITY. PAN: ABLPJ-2609J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT : NONE DATE OF HEARING : 17.07.2012 DATE OF PRONOUNCEMENT : 24.08.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27.02.2012 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FAC TS IN ADMITTING ADDITIONAL EVIDENCES, FILED BEFORE HIM WITHOUT APPR ECIATING THE FACTS ON RECORD AND DETAILED ON THE BODY OF THE ASSESSMEN T ORDER ITSELF REGARDING OPPORTUNITIES PROVIDED TO THE ASSESSEE, I N THIS REGARD. 2. THE-LD CIT(A) HAS ERRED BOTH IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.7,65,100/- MADE ON ACCOUNT OF UN EXPLAINED CREDIT IN JOINT PROPERTY A/C. 3. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.1,02,163/- ON ACCOUNT OF INTERES T ON LOAN ON HOUSE 2 PROPERTY BY NOT PROPERLY APPRECIATING THE BASIS ON WHICH THIS ADDITION WAS MADE. 4. THE LD. C!T(A) HAS ERRED BOTH IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,30,000/- MADE ON ACCOUNT OF LO W HOUSEHOLD EXPENSES BY NOT PROPERLY GIVING WEIGHTAGE TO THE FA CTS BROUGHT OUT BY THE ASSESSING OFFICER IN THE COURSE OF ASSESSMEN T PROCEEDINGS. 5. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GRO UNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 6. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE AO BE RESTOR ED. 3. IN THIS CASE, NONE ATTENDED ON BEHALF OF THE ASS ESSEE. HOWEVER, LD. 'DR' SUPPORTED THE FINDINGS OF THE AO. 4. WE HAVE CAREFULLY HEARD THE SUBMISSION MADE BY T HE LD. 'DR' AND THE FINDINGS RECORDED BY THE AO, IN AS SESSMENT ORDER AS WELL AS THE FINDINGS OF THE CIT(A), RECORD ED IN THE APPELLATE ORDER. 5. IN GROUND NO.1, REVENUE CONTENDED THAT CIT(A) ER RED IN LAW AND ON FACTS IN ADMITTING ADDITIONAL EVIDENCE F ILED BEFORE HIM, WITHOUT APPRECIATING THE FACTS ON RECOR D. GROUND NO.2 IS INTER-LINKED WITH GROUND NO.1, WHERE IN REVENUE CONTENDED THAT CIT(A) ERRED IN DELETING THE ADDITION OF RS.7,65,000/-, MADE ON ACCOUNT OF UNEXPLAINED CR EDIT IN JOINT PROPERTY ACCOUNT. THE APPELLANT, AND HIS BRO THER VIKAS JAIN, DECIDED TO PURCHASE PROPERTY JOINTLY. F OR THE PURCHASE OF THE PROPERTY JOINTLY, A BANK ACCOUNT HA D BEEN OPENED. PROPERTY HAD BEEN PURCHASED IN THE JOINT N AMES, BY CONTRIBUTING AMOUNT FROM THE RESPECTIVE CAPITAL ACCOUNTS OF SHRI VIKAS JAIN AND SHRI VISHAL JAIN. THE APPEL LANT FILED CERTAIN COPY OF ACCOUNTS AND BANK STATEMENTS, BEFOR E THE 3 CIT(A). THE EVIDENCES FILED BEFORE THE CIT(A) WERE FORWARDED TO THE AO FOR HIS COMMENTS. THE AO, VIDE HER REPOR T DATED 15.10.2010, SUBMITTED THAT THE ASSESSEE WAS GIVEN OPPORTUNITY TO FURNISH INFORMATION VIDE NOTICE U/S 142(1) OF THE ACT, DATED 23.06.2008, 25.07.2007 AND 16.09.200 8, BUT THE EVIDENCES SOUGHT TO BE FILED, HAD NOT BEEN SUBM ITTED. THE AO, THEREFORE, OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE. LD. CIT(A), ADMITTED SUCH EVI DENCES BY RECORDING CLEAR EVIDENCE. LD. CIT(A), ALSO DELETED THE IMPUGNED ADDITION, ON THE BASIS OF EVIDENCE AND REM AND REPORT FILED BY THE AO. THE CIT(A), HAS RECORDED A CLEAR FINDING THAT ENTRIES IN THE JOINT ACCOUNTS ARE CLEA RLY EXPLAINED ON THE BASIS OF CONTRIBUTION BY THE TWO B ROTHERS, FROM THEIR RESPECTIVE BANK ACCOUNTS WHICH HAVE BEEN INDEPENDENTLY SUBJECTED TO TAXATION. CONSEQUENTLY, SUCH ADDITION WAS DELETED. HOWEVER, FOR THE SAKE OF PRO PER APPRECIATION, FINDING IN PARA 10 OF THE ORDER OF TH E CIT(A), IS REPRODUCED HEREUNDER : 10. I HAVE CONSIDERED THE APPELLANT'S REQUEST FOR ADMIS SION OF 'ADDITIONAL EVIDENCE AND ALSO PERUSED THE DOCUMENTS PROPOSED TO BE FILED. FIRST OF ALL IT HAS TO BE SEEN WHETHER THE AO'S CHARGE TH AT THE ASSESSEE HAD BEEN DELIBERATELY AVOIDING TO FILE THE DOCUMENTS IS SUST AINABLE OR NOT. IT IS A FACT THAT THE ASSESSEE IS A SALARIED EMPLOYEE IN THE PRI VATE SECTOR AND HAD BEEN WORKING AS PROJECT ENGINEER AT DIFFERENT STATIONS W HERE HE HAD TO OPEN BANK ACCOUNTS TO FACILITATE HIS JOB PERFORMANCE. IN THE CIRCUMSTANCES IT IS NORMALLY NOT EXPECTED THAT HE WOULD KEEP COPIES OF HIS BANK STATEMENTS FOR THE LAST SEVEN YEARS AND ON BEING ASKED TO FILE SUC H INFORMATION BY THE AO IT WOULD DEFINITELY TAKE LOT OF TIME AND ENERGY ESPECIALLY WHILE LOOKING AFTER HIS JOB RESPONSIBILITIES AT THE SAME TIME. IT IS ALSO A COMMON KNOWLEDGE THAT IT IS NOT VERY EASY TO GET OLD BANK STATEMENTS ESPECIALLY OF CLOSED BANK ACCOUNTS. GIVEN THE NUMBER OF BANK ACCO UNTS TO BE FOLLOWED AND 4 THE LIMITED TIME AVAILABLE DURING THE ASSESSMENT PR OCEEDINGS, THE FAILURE ON THE PART OF THE ASSESSEE CAN NOT BE TERMED AS A DELIBERATE ATTEMPT TO AVOID INVESTIGATION. FURTHER THE EVIDENCE SOUGHT TO BE FI LED NOW IS NOT IN THE FORM OF ANY THING THAT HAS BEEN CREATED AFRESH. THE CONS IDERATION OF THE IMPUGNED ADDITIONAL EVIDENCE IS ABSOLUTELY NECESSAR Y TO GET TO THE ROOT OF THE MATTER AND ADJUDICATE THE ISSUE UNDER APPEAL . THE HON'BLE PUNJAB &. HARYANA HIGH COURT IN THE CASE OF ARJAN DASS VS. CIT 112 ITR 480 HAS HELD AS UNDER:- 'BOTH THE EXTREME VIEWS THAT THE AAC, IN DEALING WI TH AN APPEAL AGAINST AN ASSESSMENT UNDER S. 144, HAS NO POWER OR HAS UNLIMITED POWER TO RECEIVE ADDITIONAL EVIDENCE ARE UNTENABLE. THE ASSESSEE, NO DOUBT, CANNOT INSIST ON ADDUCING ADDITIONAL EVIDENC E BUT THERE IS NO BAR ON THE RECEPTION OF ADDITIONAL EVIDENCE BY T HE AAC IF HE CONSIDERS SUCH EVIDENCE NECESSARY FOR DISPOSING OF THE APPEAL BEFORE HIM. HE MAY DO SO IF HE THINKS THAT THE ITO HAD ACTED WITHOUT MATERIAL OR THAT HE HAD ACTED ARBITRARILY O R CAPRICIOUSLY. HE MAY DO SO IF HE CONCLUDES THAT THE JUDGEMENT OF THE ITO WAS NOT PROPERLY EXERCISED OR THAT THE QUANTUM WAS NOT PROP ERLY AND FAIRLY ARRIVED AT. HE MAY DO SO FOR THE PURPOSE OF CLARIFI CATION OF POINTS ARISING OUT OF THE VERY ORDER OFASSESSMENT M ADE BY THE ITO. HE MAY DO SO FOR A VARIETY OF REASONS DEPENDIN G UPON THE FACTS AND CIRCUMSTANCES OF DIFFERENT CASES. BUT THIS HE C AN DO ONLY IF HE CONSIDER IT NECESSARY FOR DISPOSING OF THE APPEAL.- GIRDHER JAVER & CO. VS. CIT (1953) 24 ITR 540 (BOM): TC7R.273 AND SUNDERMULL & CO. VS. CIT (1978) 112 ITR 512 (AP): T C7R.256 CONCURED WITH.' IN VIEW OF THE PECULIAR FACTS OF THE CASE THE ADDIT IONAL EVIDENCE SOUGHT TO BE FILED IS ALLOWED. NOW COMING TO THE MERITS OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, THE AO IN HER REMAN D REPORT HAS NOT CONTROVERTED ANY OF THE EVIDENTIARY VALUE OF DOCUME NTS FILED BY THE APPELLANT... THE ENTRIES IN JOINT PROPERTY ACCOUNT ARE CLEARLY EXPLAINED ON THE BASIS OF CONTRIBUTION BY THE TWO B ROTHERS FROM THEIR RESPECTIVE BANK ACCOUNTS WHICH HAVE BEEN INDEPENDEN TLY SUBJECTED TO TAXATION. IN THE CIRCUMSTANCES, THERE IS NO CASE FOR TREATING THE CONTRIBUTIONS TO THE JOINT PROPERTY ACCOU NT AS UNEXPLAINED AN THEREFORE THE ADDITION MADE BY THE AO IS DIRECTED T O BE DELETED. 6. IN VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE CIT(A), AND THE SAM E ARE UPHELD. THUS, GROUND NOS. 1 & 2, RAISED BY THE REV ENUE, ARE DISMISSED. 7. IN GROUND NO.3, REVENUE CONTENDED THAT CIT(A) ER RED IN DELETING ADDITION OF RS.1,02,163/-, ON ACCOUNT OF I NTEREST ON 5 LOAN ON HOUSE PROPERTY, BY NOT PROPERLY APPRECIATIN G THE BASIS ON WHICH THIS ADDITION WAS MADE. THE AO, MAD E AN ADDITION OF RS.1,02,1763/- ON THE GROUND THAT ASSES SEE ONLY UTILIZED AN AMOUNT OF RS.24,80,200/-, OUT OF THE TO TAL LOAN RAISED FROM ICICI BANK IN PATIALA, TO THE TUNE OF R S.30 LACS, FOR PURCHASE AND RENOVATION OF THE HOUSE AND THEREF ORE, ONLY AN INTEREST OF RS.47,837/- IS ALLOWABLE. THE CIT(A ), ON CONSIDERATION OF THE SUBMISSION, FILED BEFORE HIM A ND ALSO FORWARDING THE ADDITIONAL EVIDENCE, FILED BY THE AS SESSEE TO THE CIT(A), ADJUDICATED THE ISSUE ON MERIT, HAVING REGARD TO THE REMAND REPORT AND THE AVAILABLE MATERIAL ON REC ORD. THE RELEVANT FINDINGS OF THE CIT(A), AS CONTAINED IN PA RA 13, ARE REPRODUCED HEREUNDER : 13. I HAVE CONSIDERED THE APPELLANTS REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE AND ALSO PERUSED THE DOCUMENTS PROPOSED TO BE FILED. FIRST OF ALL IT HAS TO BE SEEN WHETHER THE A O'S CHARGE THAT THE ASSESSEE HAD BEEN DELIBERATELY AVOIDING TO FILE THE DOCUMENTS IS SUSTAINABLE OR NOT. IT IS A FACT THAT THE ASSESSEE IS A SALARIED EMPLOYEE IN THE PRIVATE SECTOR AND HAD BEEN WORKING AS PROJECT ENGINEER AT DIFFERENT STATIONS WHERE HE HAD TO OPEN BANK ACCOUNTS TO FACILITATE HIS JOB PERFORMANCE. IN THE CIRCUMSTANCE S IT IS NORMALLY NOT EXPECTED THAT HE WOULD KEEP COPIES OF HIS BANK STATEMENTS FOR THE LAST SEVEN YEARS AND ON BEING ASKED TO FILE SUCH IN FORMATION BY THE AO IT WOULD DEFINITELY TAKE LOT OF TIME AND ENERGY ESPECIALLY WHILE LOOKING AFTER HIS JOB RESPONSIBILITIES AT THE SAME TIME. IT IS ALSO A COMMON KNOWLEDGE THAT IT IS NOT VERY EASY TO GET OL D BANK STATEMENTS ESPECIALLY OF CLOSED BANK ACCOUNTS. GIVEN THE NUMBE R OF BANK ACCOUNTS TO BE FOLLOWED AND THE LIMITED TIME AVAILA BLE DURING THE ASSESSMENT PROCEEDINGS, THE FAILURE ON THE PART OF THE ASSESSEE CAN NOT BE TERMED AS A DELIBERATE ATTEMPT TO AVOID INVE STIGATION. FURTHER THE EVIDENCE SOUGHT TO BE FILED NOW IS NOT IN THE F ORM OF ANY THING THAT HAS BEEN CREATED AFRESH. THE CONSIDERATION OF THE IMPUGNED ADDITIONAL EVIDENCE IS ABSOLUTELY NECESSARY TO GET TO THE ROUTE OF THE 6 MATTER AND ADJUDICATE THE ISSUE UNDER APPEAL. THE H ON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ARJAN DASS VS. CI T 112 ITR 480 HAS HELD AS UNDER:- 'BOTH THE EXTREME VIEWS THAT THE AAC, IN DEALING WI TH AN APPEAL AGAINST AN ASSESSMENT UNDER S. 144, HAS NO P OWER OR HAS UNLIMITED POWER TO RECEIVE ADDITIONAL EVIDENCE ARE UNTENABLE. THE ASSESSEE, NO DOUBT, CANNOT INSIST ON ADDUCING ADDITIONAL EVIDENCE BUT THERE IS NO BAR ON THE RECE PTION OF ADDITIONAL EVIDENCE BY THE AAC IF HE CONSIDERS SUCH EVIDENCE NECESSARY FOR DISPOSING OF THE APPEAL BEFORE HIM. H E DO SO IF HE THINKS THAT THE ITO HAD ACTED WITHOUT MATERIAL O R THAT HAD ACTED ARBITRARILY OR CAPRICIOUSLY. HE MAY DO SO IF HE CONCLUDES THE JUDGEMENT OF THE ITO WAS NOT PROPERLY EXERCISED OR THAT THE [TURN WAS NOT PROPERLY AND FA IRLY ARRIVED AT. HE MAY DO SO FOR THE SE OF CLARIFICATIO N OF POINTS ARISING OUT OF THE VERY ORDER OF ASSESSMENT MADE BY THE ITO. HE MAY DO SO FOR A VARIETY OF REASONS ENDING UPON T HE FACTS AND CIRCUMSTANCES OF DIFFERENT CASES. BUT HE CAN DO ONLY IF HE CONSIDER IT NECESSARY FOR DISPOSING OF THE APPEAL.- GIRDHER JAVER &. CO. VS. CIT (1953) 24 ITR 540 (BOM): TC7R. 273 AND SUNDERMULL & CO. VS. CIT (1978) 112 ITR 512 (AP ): TC7R.256 CONCURED WITH.' IN VIEW OF THE PECULIAR FACTS OF THE CASE THE ADDIT IONAL EVIDENCE SOUGHT TO BE FILED IS ALLOWED. THE AO ALSO EXAMINED THE MERITS OF THE ADDITIONAL EVIDENCE FILED AND VERIFIED THAT THE ASSESSEE HAD SHOWN INVESTMENT OF RS. 24,80,200/- FROM JOINT PROP ERTY ACCOUNT AND RS.4,70,200/- FROM CASH BOOK OF JOINT P ROPERTY ACCOUNT AS ON 31.3.2005. IT, THEREFORE, BECOMES APP ARENT THAT THE CONTENTION OF THE APPELLANT ON THIS ISSUE IS CO RRECT AND THEREFORE THERE IS NO CASE FOR DISALLOWANCE OF INTE REST ON HOME LOAN ON THE GROUND THAT IT HAD NOT BEEN USED FOR TH E SAID PURPOSE. THE ADDITION MADE IS, THEREFORE, DELETED. 8. THE FINDINGS, RECORDED BY THE CIT(A), ARE BASED ON PROPER APPRECIATION OF THE FACT-SITUATION OF THE CA SE AND IS WELL-REASONED, THEREFORE, WE DO NOT FIND ANY GROUND TO 7 INTERFERE SUCH FINDINGS. HENCE, THE SAME ARE UPHELD . GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. IN GROUND NO.4, REVENUE CONTENDED THAT CIT(A) ER RED IN DELETING THE ADDITION OF RS.1,30,000/-, ON ACCOUNT OF LOW HOUSEHOLD EXPENSES, IGNORING THE FINDINGS OF THE AO . THE AO, MADE AN ADDITION OF RS.1,30,000/- ON ACCOUNT OF INSUFFICIENT HOUSEHOLD WITHDRAWALS. HE, FOUND THAT ASSESSEE'S FAMILY COMPRISED OF SELF, WIFE AND ONE C HILD, AND TO MAINTAIN SUCH FAMILY, WITHDRAWAL OF RS.1,20,000/ - HAS BEEN MADE. THE AO, REJECTED EXPLANATION OF THE ASS ESSEE ON THE GROUND THAT THE ASSESSEE BELONG TO A REPUTED GR OUP OF AMBALA CITY, THOUGH SERVING IN BANGALORE DURING THE YEAR UNDER CONSIDERATION. THE AO, FURTHER OBSERVED THAT ASSESSEE HAD PAID SECURITY OF RS.50,000/- TO THE LA NDLADY, FOR TAKING HOUSE ON RENT AND, THEREFORE, HOUSE RENT , PER MONTH WOULD BE RS.9500/-, WHICH MEANS, AN AMOUNT OF RS.1,12,000/- WAS SPENT ON HOUSE RENT, DURING THE P ERIOD UNDER REFERENCE. ACCORDINGLY, AO, ESTIMATED HOUSEH OLD EXPENSES AT RS.3,50,000/- AND MADE AN ADDITION OF RS.1,30,000/-. 10. WE HAVE PERUSED THE FINDINGS OF THE AO, AS WELL AS THAT OF THE CIT(A) AND FIND THAT THE FINDINGS OF THE CIT (A) ARE RATIONAL AND REASONABLE ON THE ISSUE IN QUESTION, A ND, HENCE THE SAME ARE UPHELD. HOWEVER, THE RELEVANT FINDINGS OF THE CIT(A), AS CONTAINED IN PARA 16 ARE REPRODUCED HERE UNDER : 16. THE AO, DURING APPELLATE PROCEEDINGS, VERIFIED THE CLAIM OF THE APPELLANT REGARDING THE MONTHLY RENT BEING RS. 4500/- PER MONTH 8 AS AGAINST RS. 95,00 PER MONTH ESTIMATED BY THE AO AS THE PAYMENTS FOR RENT HAD BEEN MADE FROM THE BANK ACCOUNT OF THE ASSESSEE WHICH HAD BEEN FILED DURING THE APPELLATE PROCEEDINGS. TH E ESTIMATION OF THE AO IN WORKING OUT THE HOUSE RENT AT RS. 1,12,00 0/- PER YEAR IS WITHOUT ANY BASIS AS THERE IS NO SUCH PRACTICE OF T HE SECURITY DEPOSIT BEING EQUIVALENT TO FIVE MONTHS RENT. FURTHER THE A CTUAL RENT PAID BY THE ASSESSEE HAS BEEN VERIFIED FROM HIS BANK ACCOUN T. APART FROM THIS THE REST OF THE ESTIMATION OF HOUSE HOLD EXPEN SES IS NOT BASED UPON ANY SPECIFIC ITEM OF EXPENDITURE AND THE TOTAL WITHDRAWAL OF RS.2,20,000/- CONSIDERING THE SMALL FAMILY OF THE A SSESSEE IS QUITE REASONABLE. THE ADDITION MADE IS THEREFORE DIRECTE D TO BE DELETED. 11. IN VIEW OF THE ABOVE LEGAL AND FACTUAL POSITION , THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 12. GROUND NOS. 5 & 6 ARE GENERAL IN NATURE AND NEE D NO SEPARATE ADJUDICATION. ACCORDINGLY, SAME ARE DISMIS SED. 13. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH AUG.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24 TH AUG.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH