Shri Sanjay Kumar Parmar, Rohtak V. ITO, Rohtak

ITA 4878/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0417 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 11-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONKAR
• Assessee Lawyers: BHARAT BHUSHAN JIAN
• Keywords: Gift; Opportunity of being heard; Additional evidence
• Section: 143(3); 234B; 68; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH G NEW DELHI, BENCH G NEW DELHI, BENCH G NEW DELHI, BENCH G BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUTANT MEMBER ITA NO. 4878/DEL/2010 (ASSESSMENT YEAR 2007-08) SHRI SANJAY KUMAR PARMAR VS. I.T.O., WARD 1, S/O SHRI NANAK CHAND PARMAR, ROHTAK 1589/21, CHUNIPURA, ROHTAK (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AFJPP7502C APPELLANT BY: SHRI GAUTAM JAIN CA & SHRI BHARAT BHUSHAN JIAN, ADV. RESPONDENT BY: SHRI PEEYUSH SONKAR, DR ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT Y EAR 2007-08 ARISES OUT OF ORDER OF LD. CIT(A) ROHTAK. THE GROU NDS OF APPEAL ARE REPRODUCED AS UNDER: 1) THAT THE LD .CIT(A) ROHTAK HAS ERRED BOTH IN L AW AND ON FACTS IN UPHOLDING THE ORDER OF ASSESSMENT MADE U/S 143(3) OF THE ACT DATED 18.12.2009 DETERMINING THE TOTAL INCOME OF THE APPELLANT AT ` 32,52,530/- DESP ITE THE FACT THE SAME WAS WITHOUT JURISDICTION AND, DES ERVED TO BE QUASHED AS SUCH. 1.1) THAT THE LD .CIT(A) HAS FAILED TO APPRECIATE T HAT SINCE THE NOTICE U/S 143(2) OF THE ACT HAD BEEN ISSUED BE YOND A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FURNISHED BY THE APPELLANT, THE INITIATION OF PROCEEDINGS WAS ILLEGAL AND, THUS UNSUSTAINABLE. 1.2) THAT THE FINDING OF THE LD. CIT(A) THAT IN VI EW OF THE AMENDMENT IN SECTION 143(2) W.E.F. 1.4.2008, IT IS HELD THAT THE NOTICE U/S 143(2) HAS BEEN ISSUED/SERVED W ITHIN PRESCRIBED TIME IS NOT BASED ON CORRECT APPRECIATI ON OF STATUTORY PROVISION OF LAW AND, HENCE UNTENABLE. 2) THAT THE LD .CIT(A) HAS FURTHER ERRED BOTH IN LA W AND ON FACTS IN UPHOLDING THE FOLLOWING ADDITION REPRESENT ING DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT U/S 6 8 OF THE ACT. I.T.A. NO. 4878/DEL/2010 2 S.N. PARTICULARS OF BANK AMOUNT I) ALLEGED UNEXPLAINED DEPOSIT IN ICICI BANK ACCOUN T NO.016815022608 13,52,059/- II) ALLEGED UNEXPLAINED DEPOSIT IN AXIS BANK ACCOUN T NO.0005511181 OR 204010100018692 70,041/- III) ALLEGED UNEXPLAINED DEPOSIT IN INDUSIND BANK A CCOUNT NO.0130-M-23999-001 11,59,924/- TOTAL 25,82,024/- 2.1) THAT WHILE SUSTAINING THE AFORESAID ADDITION, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE EXPLANATIO N TENDERED BY THE APPELLANT DULY SUPPORTED BY NECESSA RY EVIDENCE. IN FACT, ADDITION HAS BEEN CONFIRMED IN AN ARBITRARY, WHIMSICAL AND SUBJECTIVE MANNER, WHICH I S CONTRARY TO LAW. 3) THAT THE IMPUGNED ORDER MADE BY THE LD .CIT(A) I S WITHOUT GRANTING FAIR AND PROPER OPPORTUNITY TO THE APPELLANT WHICH IS CONTRARY TO THE PRINCIPLES OF NA TURAL JUSTICE. 4) THAT THE LD .CIT(A) HAS FURTHER ERRED IN BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY INTEREST UNDER SECTI ON 234B AND 234D OF THE ACT, WHICH IS NOT LEVIABLE AT ALL. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO THE ISSUE OF NOTICE U/S 143(2) BEYOND THE PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FURNISHED BY THE ASSESSEE . THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE RETURN OF INC OME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED ON 30.04.2007. T HE A.O. ISSUED NOTICE U/S 143(2) ON 25.07.2008. THEREFORE, IT HAS BEEN SUBMITTED THAT NOTICE U/S 143(2) HAS BEEN FILED AFTER EXPIRY OF 12 MONTHS. THOUGH THE AMENDED PROVISIONS OF SECTION 143(2) CAM E INTO EFFECT FROM 01.04.2008 BUT BILL GOT ASSENT OF THE PRESIDEN T OF INDIA ON 10.05.2008, THE SAME WILL NOT BE APPLICABLE TO THE CASE OF THE ASSESSEE, SINCE THE PERIOD OF 12 MONTHS EXPIRED ON 30.04.2007. THE A.O. WAS DEBARRED FROM ISSUE OF NOTICE U/S 143( 2) ON 25.07.2008. ON THE OTHER HAND LD. SR. DR SUBMITTED THAT AMENDED PROVISIONS CAME INTO EFFECT FROM 01.04.2008 AND THE REFORE, IT WOULD APPLY TO ALL RETURNS FILED FOR ASSESSMENT YEAR 2008 -09 AND, THEREFORE, THE A.O. WAS JUSTIFIED IN ISSUING NOTICE U/S 148 OF THE ACT ON 25.07.2008. I.T.A. NO. 4878/DEL/2010 3 3. WE HAVE HEARD BOTH THE PARTIES. THE FINANCE ACT 2008 AMENDED PROVISO TO SECTION 143(2) ACCORDING TO WHIC H NO NOTICE UNDER CLAUSE (II) SHOULD BE SERVED ON THE ASSESSEE AFTER EXPIRY OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN IS FURNISHED. THIS AMENDMENT IS EFFECTIVE FORM 01.04. 2008. THEREFORE, THE AMENDED PROVISIONS WILL BE APPLICABL E IN RESPECT OF THE RETURNS FILED BY THE ASSESSEES UP TO 31.03.2008 . IN THE INSTANT CASE, THE ASSESSEE FILED RETURN OF INCOME ON 30.04. 2007. THEREFORE, AS PER THE AMENDED PROVISIONS OF SECTION 143(2)(II) , THE A.O. WAS EMPOWERED TO ISSUE NOTICE U/S 148 UP TO 30.09.2008. THEREFORE, IN OUR CONSIDERED OPINION, LD. CIT(A) WAS JUSTIFIED I N UPHOLDING THE ACTION OF THE A.O. IN ISSUING THE NOTICE U/S 143(2) OF THE ACT. 4. THE NEXT ISSUE FOR CONSIDERATION RELATES TO THE ADDITION OF ` 25,82,024/- ON ACCOUNT OF DEPOSITS MADE IN ICICI BA NK, AXIS BANK AND INDUSIND BANK. THE A.O. IN THE COURSE OF ASSES SMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAD DEPOSITED M ONEY IN VARIOUS BANK ACCOUNTS AND THE SOURCE THEREOF COULD NOT BE EXPLAINED. THE A.O. THEREFORE, ADDED THE AMOUNT OF ` 31,31,444/- AFTER DISCUSSION ON DETAILS OF DEPOSITS AND EXPLANA TION OFFERED BY THE ASSESSEE. 5. ON APPEAL, IT WAS SUBMITTED THAT THE A.O. HAD ER RED IN MAKING THE ADDITION WITHOUT ISSUING ANY SPECIFIC NOTICE WH ICH IS ARBITRARY, EXCESSIVE, UNREASONABLE AND WITHOUT ANY BASIS. THE DEPOSIT IN ICICI BANK OF ` 2,12,799/- STOOD VERIFIED. LOAN FORM CHHAJU RAM OF ` 5 LACS ALSO STOOD VERIFIED. THE AS SESSEE RECEIVED GIFT OF ` 2.95 LACS FROM HIS MOTHER, THE SOURCE THE REOF WAS STATED FROM SALE OF PLOT. THE A.O. WAS REQUIRED BY THE LD . CIT(A) TO SUBMIT HIS COMMENTS ON THE EXPLANATION GIVEN BY THE ASSESS EE. IN RESPONSE THERETO, THE A.O. SUBMITTED THAT THE BALAN CE SHEET AND CAPITAL ACCOUNT SUBMITTED BY THE ASSESSEE IN ASSESS MENT/APPELLATE PROCEEDINGS DID NOT TALLY WITH THE BALANCE SHEET AN D CAPITAL ACCOUNT I.T.A. NO. 4878/DEL/2010 4 FURNISHED ALONG WITH THE RETURN OF INCOME. THE COP Y OF CASH BOOK SUBMITTED BY THE ASSESSEE WAS ALSO FABRICATED AND H AS BEEN GENERATED ACCORDING TO THE BANK ENTRIES WHICH WAS A N AFTERTHOUGHT I.E. IN CAPITAL ACCOUNT, ATTACHED WITH THE RETURN O F INCOME THE OPENING BALANCE WAS SHOWN AT ` 2,26,251/- WHILE IN CAPITAL ACCOUNT SUBMITTED ALONG WITH WRITTEN SUBMISSION, THE OPENIN G BALANCE WAS SHOWN AT ` 3,52,312/-. IN THE CAPITAL ACCOUNT INTE REST HAS BEEN SHOWN AT ` 1,313/- WHILE NO SUCH INTEREST INCOME WA S SHOWN IN THE RETURN OF INCOME. INCOME FROM MUTUAL FUND HAD BEEN SHOWN AT ` 8,444/- WHILE NO SUCH INCOME WAS REFLECTED IN THE R ETURN OF INCOME. IN THE BALANCE SHEET ENCLOSED WITH THE RETURN OF IN COME, FIXED ASSETS WERE SHOWN AMOUNTING TO ` 30,655/- WHILE IN THE BALANCE SHEET SUBMITTED ALONG WITH THE WRITTEN SUBMISSION F IXED ASSETS HAVE BEEN SHOWN AT ` 10,52,150/- INCLUDING CONSTRUCTION ACCOUNT OF ` 10,21,500/-. ACCORDINGLY, THE A.O. REPORTED THAT A SSESSEE HAD INVESTED IN CONSTRUCTION FROM THE INCOME FROM UNDIS CLOSED SOURCES. AS REGARDS THE SOURCES OF DEPOSIT IN VARIOUS BANK A CCOUNTS, THE ASSESSEE HAD NOT FURNISHED ANY INFORMATION. HOWEVE R, ADJOURNMENT WAS SOUGHT AGAIN. LD. CIT(A) AFTER CONSIDERING THE ABOVE SUBMISSIONS, CONFIRMED THE ADDITION BY OBSERVING AS UNDER: 15. I HAVE CAREFULLY CONSIDERED THE ISSUE AND THE SUBMISSIONS MADE BY THE AR. FROM THE FACTS OF THE CASE AS MENTIONED ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS NOT DISCLOSED THE TRUE AND COMPLETE STATE OF AFFAIRS IN THE RETURN OF IN COME. AS PER THE REMAND REPORT, THE BALANCE SHEET AND CAPITAL ACCOUNT FURNISHED DURING THE ASSESSMENT/APP EAL PROCEEDINGS DO NOT TALLY WITH THOSE FILED WITH THE RETURN OF INCOME. AS REGARDS THE CONSTRUCTION UNDERTAKEN, IT WAS STATED IN THE ASSESSMENT PROCEEDINGS BY THE ASSESSEE THAT HE CONTRIBUTED TO THE CONSTRUCTION ACCOUNT OF THE HOUS E, WHICH BELONGS TO HIS MOTHER WHEREAS IN THE BALANCE SHEET FILED, IT WAS SHOWN AS HIS CONSTRUCTION. IT WAS STATED THAT THE ASSESSEE NEEDED MONEY FOR CONSTRUCTION WORK FOR WHI CH SOME LOANS HAVE BEEN RAISED, WHICH HAS BEEN GIVEN AS ONE OF THE REASONS FOR FREQUENT CASH DEPOSITS AND WITHDRAWALS. 16. ALL THE ABOVE WOULD SHOW THAT THE STATE OF AFFA IRS OF THE ASSESSEE FURNISHED DIFFERENTLY AT DIFFERENT POINTS OF TIME I.T.A. NO. 4878/DEL/2010 5 CANNOT BE RELIED UPON. THEREFORE, THE ARGUMENT TAK EN BY THE AR THAT PEAK INVESTMENT COULD BE TAXED CANNOT BE AG REED UPON AS ALSO NOTED BY THE A.O. IN THE ASSESSMENT OR DER. IN VIEW OF THE CIRCUMSTANCES OF THE CASE AS MENTIONED ABOVE, THE METHODOLOGY ADOPTED BY THE A.O. IN BRINGING TO TAX THE UNEXPLAINED DEPOSITS IN THE BANK ACCOUNTS SEEMS REA SONABLE AND APPROPRIATE. HOWEVER, RELIEF TO THE EXTENT OF VERIFICATION CONDUCTED BY THE A.O. ON THE ADDITIONAL EVIDENCE PR ODUCED BY THE ASSESSEE NEEDS TO BE GIVEN. THEREFORE, RELIEF TO THE EXTENT OF ` 86,621/- (` 74,694/- + ` 11,927/-) FORM THE DEPOSITS IN AXIS BANK AND ` 4,62,799/- (` 2,12,799/- + LOAN OF ` 2.5 LACS FROM SH. CHHAJU RAM (OUT OF THE TOTAL LOAN OF ` 7.0 0 LACS, A.O. HAS ALREADY GIVEN CREDIT OF ` 4.5 LACS)) FROM THE D EPOSITS OF ICICI BANK IS GIVEN. THE GROUNDS OF APPEAL ARE THE REFORE DISPOSED OFF AS INDICATED ABOVE. 6. BEFORE US, LD. A.R. OF THE ASSESSEE SUBMITTED TH AT THE ASSESSEE HAD FILED DETAILED EXPLANATION OF CASH DEP OSITED IN VARIOUS BANK ACCOUNTS. HE HAS SUBMITTED THAT COPY OF CASH BOOK PLACED AT PAGES 54-78 EXPLAINS THE OPENING BALANCE FROM LAST YEAR. IT WAS ALSO SUBMITTED THAT ASSESSEE HAD EXPLAINED THE SOUR CE OF DEPOSIT WITH THE HELP OF CASH BOOK. THE ASSESSEE HAS WITHD RAWN AMOUNT FORM ONE BANK AND HAD DEPOSITED IN OTHER BANK AND T HEREFORE, ALL THE DEPOSITS IN THE BANK ACCOUNTS ARE EXPLAINABLE. ON THE OTHER HAND, LD. SR. DR SUBMITTED THAT IN EARLIER YEARS, N O BALANCE SHEET WAS FIELD WITH THE RETURN OF IN COME. THEREFORE, L D. CIT(A) IS JUSTIFIED IN CONFIRMING THE ACTION OF THE A.O. MOREOVER, THE ASSESSEE INSTEAD OF FURNISHING INFORMATION BEFORE THE A.O, TRIED TO AVOID AND SOUGHT ADJOURNMENTS FROM TIME TO TIME. SINCE THE ASSESSEE HAS NOT EXPLAINED THE SOURCE OF INVESTMENT IN THE BANK ACCO UNTS, LD. CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION. 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. FROM THE ASSESSMENT ORDER, WE FIND THAT THE A.O. HAS GIVEN VARIOUS OPPORTUNITIES TO THE ASSESSE E TO EXPLAIN THE DEPOSITS IN THE BANK ACCOUNTS. LD. CIT(A) HAS NOT EXAMINED THE CASH BOOK PREPARED BY THE ASSESSEE FOR VARIOUS TRAN SACTIONS. THE A.O. HAD ADDED THE ENTIRE AMOUNT DEPOSITED IN THE B ANK ACCOUNTS I.T.A. NO. 4878/DEL/2010 6 WITHOUT EXAMINING WHETHER ANY CASH WAS TRANSFERRED FORM ONE BANK TO ANOTHER BANK ACCOUNT. THEREFORE, IN OUR CONSIDE RED OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE ISSUE IS SET ASIDE TO THE FILE OF THE A.O. WITH THE DIRECTION TO CONSIDER THE EXPLANA TION OFFERED BY THE ASSESSEE WITH REFERENCE TO THE DEPOSITS IN VARI OUS BANK ACCOUNTS AND SOURCE THEREOF. THE A.O. WILL ALSO EX AMINE THE CASH BOOK PREPARED BY THE ASSESSEE AND ITS AUTHENTICITY. THE A.O. WILL DECIDE THE ISSUE ON MERITS AFTER AFFORDING THE ASSE SSEE REASONABLE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. PRONOUNCED IN THE OPEN COURT ON 18 TH FEB., 2011. SD./- SD/- (A. D. JAIN) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:18 TH FEB., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI