DR. VIDHYA LAHIRI, Nagda V. THE ACIT 1(1), Ujjain

ITA 500/IND/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5707 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 03-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE
• Keywords: Revised return
• Section: 2(14)

Judgement Text

ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE BEFORE SHRI D.T. GARASIA, HON'BLE JUDICIAL MEMBER ITA NO. 499/IND/2015 A.Y.2011-12 DR. VINOD LAHIRI NAGDA PAN ABOPL 4810A ::: APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX 1(1), UJJAIN ::: RESPONDENT ITA NO. 500/IND/2015 A.Y.2011-12 DR. VIDYA LAHIRI NAGDA PAN ABOPL 4810A ::: APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX 1(1), UJJAIN ::: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 18.7.2016 DATE OF PRONOUNCEMENT 2 6 .7.2016 ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 2 O R D E R THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DOCTOR BY PROFESSION. THE ASSESSING OFFICER VERIFIE D THE HOUSEHOLD EXPENSES AND THE ASSESSEE HAS SHOWN RS.30,000/- AS HOUSEHOLD WITHDRAWAL. LOOKING TO THE SIZE AND LIVING STANDARD OF THE ASSESSEE IT WAS TOO LOW. MOREOVER, LOOKING TO THE STATUS OF THE ASSESSEE AND FO UR FAMILY MEMBERS, THE ASSESSING OFFICER ESTIMATED THE HOUSEHOLD EXPENSES AT RS.1,50,000/-. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE ADDITION. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE GROUND THAT RS. 30,000/- TOWARDS HOUSEHOLD EXPENSES ARE VERY LOW BECAUSE THERE ARE FOUR MEMBERS IN THE FAMILY OF THE ASSESSEE. THE WIFE OF THE ASSESSEE HAS SHOWN THE HOUSEHOLD EXPENSES OF ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 3 RS.65,000/-. MOREOVER, HIS SON IS ALSO INCOME TAX ASS ESSEE. SHRI ABHISHEK LAHRI, SON OF THE ASSESSEE, HAS SHOWN RS.50,000/- AS HOUSEHOLD EXPENSES AND DAUGHTER VINI LAHIRI HAS ALSO SHOWN RS. 45,000/- AS HOUSEHOLD EXPENSES. THEREFORE, THE ADDITION OF RS. 1,50,000/- IS VERY HIGH. THEREFORE, IT MAY BE REDUCED. 3. I HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE I FI ND THAT IN THE ASSESSEES FAMILY THERE ARE FOUR MEMBERS AND ALL THE FOUR MEMBERS ARE INCOME TAX PAYEES. THE ASSESS EES WIFE HAS SHOWN RS. 65,000/- AS HOUSEHOLD EXPENSES AND SON HAS SHOWN HOUSEHOLD EXPENSES OF RS. 50,000/- AND DAUGHTER HAS SHOWN RS. 45,000/-. THUS, IN MY OPINION , THE ADDITION OF RS.1,50,000/- IS ON HIGHER SIDE. I, THEREFORE, ESTIMATE THE HOUSEHOLD EXPENSES AT RS.60,000/- INSTEAD OF RS. 1,50,000/- MADE BY THE ASSESSING OFFICER. ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 4 4. I HAVE ALSO ESTIMATED RS. 60,000/- IN CASE OF THE HUSBAND AND THE ASSESSING OFFICER HAS ALSO MADE THE ADDITION IN RESPECT OF WIFE AND HE HAS ALSO MADE THE ADDITION OF RS.1,50,000/-. AS I HAVE MADE THE ADDITION IN CASE OF THE ASSESSEE, NO ADDITION IS CALLED FOR IN THE CASE OF WIFE. THEREFORE, THE APPEAL OF WIFE OF THE ASSESSEE I. E. ITA NO. 500/IND/2015 ON GROUND NO. 1 IS ALLOWED. 5. IN ITA NO. 499/IND/2015 SO FAR AS GROUND NO. 2 IS CONCERNED, THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.3,19,116/- ON THE GROUND THAT THE ASSESSEE IS A DOC TOR AND DERIVES INCOME FROM MEDICAL PRACTICE. IN THE ORIG INAL RETURN OF INCOME THE ASSESSEE HAS DECLARED TOTAL INCOME AT RS.16,81,450/-. THE ASSESSEE HAS FILED REVISED RETURN DECLARING TOTAL INCOME AT RS.17,78,921/- ON 19.2.2014. THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF DIFFERENCE IN OPENING BALANCE AT RS.3,19,116/-. THE MAT TER ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 5 WAS CARRIED TO THE LEARNED CIT(A) AND THE LEARNED CIT( A) HAS CONFIRMED THE ADDITION. 7. BEFORE ME THE ASSESSEE HAS EXPLAINED THE DIFFERENCE BY SUBMITTING AS UNDER :- AS HAS BEEN SUBMITTED THE SUM OF RS.13,58,241/- COMPRISING OF OPENING BALANCE DIFFERENCE OF RS.8,64,751/- WHICH IS RELATED TO FINANCIAL YEAR 20 06-07 AND FINANCIAL YEAR 2007-08 AND BALANCE AMOUNT OF RS.4,93,490/- IS THE PROFIT ON SALE OF LAND AND HOU SE AT NAGDA IN RESPECT OF WHICH LONG TERM CAPITAL GAIN OF RS. 6,57,799/- AND RS.3,81,326/- TOTALING TO RS.10,39,125/- HAS BEEN OFFERED IN CURRENT YEAR IN REVISED COMPUTATION OF INCOME AND TAXES HAS BEEN PA ID ACCORDINGLY SUE MOTTO BY THE ASSESSEE HIMSELF. ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 6 THE OPENING BALANCE DIFFERENCE OF RS.8,64,751/- COMPRISES OF THREE ENTRIES I. RS.1,75,000/- THE PART OF CAR VALUE OF SWIFT AND TATA 207 WAS DEBITED TO CAPITAL A/LEARNED CIT(A) AND AS A RESULT BOTH CAPITAL AND VALUE OF THESE VEHICLES HAVE BEEN SHOWN AT REDUCED VALUE IN BALANCE SHEET, HENCE IN REVISED BALANCE SHEET THE CAPITAL HAS BEEN INCREASED BY INCREASING THE VALUE OF CAR. THIS CAN BE VERIFIED FROM THE BALANCE SHEET ITSELF AS IN EARLIER YEAR THIS VALUE WAS STATED AT CORRECT PRICE. NO NEW VEHICLE HAS BEEN PURCHASED DURING THE YEAR BUT THE ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 7 ACCOUNTANT HAS WRONGLY DEBITED A SUM OF RS.1,75,000/- TO CAPITAL A/C BY CREDITING VEHICLE A/LEARNED CIT(A) BY CREDITING VEHICLE A/LEARNED CIT(A) RESULTING IN ABOVE CHANGED. II. RS.1,19,975/- THE LAND AT GRAM GURADIYA 1 & 2 WAS STATED IN ORIGINAL BALANCE SHEET AT RS.2,05,005/-. THIS LAND WAS SOLD DURING THE FINANCIAL YEAR 2007-08 FOR A SUM OF RS.7,00,000/-. HOWEVER, THE ACCOUNTANT HAS TOTALLY OMITTED THIS AMOUNT IN THE ORIGINAL BALANCE SHEET. THE RELEVANT COST OF THE LAND WAS RS.1,19,975/- AND ACCORDINGLY A PROFIT OF ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 8 RS.5,80,025/- AROSE ON THE SALE OF RURAL AGRICULTURAL LAND WHICH IS EXEMPT U/S 2(14) OF THE INCOME TAX. SINCE THIS AMOUNT OF RS.7,00,000/- HAS NOT BEEN SHOWN AND HENCE THE CAPITAL HAS BEEN INCREASED BY RS.5,80,025/- BY INCREASING THE AMOUNT LOAN & ADVANCE BY SUM OF RS.7,00,000/- WHICH WERE RECEIVABLES FROM VARIOUS PERSONS AND REDUCING THE COST OF LAND BY SUM OF RS.1,19,975/-. III. RS.1,09,726/- THE LAND AT GRAM PADLIYAKALA 1 & 2 WHICH COSTED AT RS.1,11,510/- + RS.29,363/- TOTALING TO RS.1,40,873/- WAS SOLD DURING THE ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 9 FINANCIAL YEAR 2006-07 AND THE SALE CONSIDERATION WAS REDUCED FROM THE COST OF LAND WHICH WAS SOLD IN PART AND NOT IN FULL AND A REDUCED VALUE OF RS.55,493/- HAS BEEN SHOWN IN THE ORIGINAL BALANCE SHEET IN PLACE OF RS.1,40,873/- AND AS A RESULT A GAP OF RS.85,380/- OCCURRED IN THE BALANCE SHEET OF FINANCIAL YEAR 2006-07 AND THE PROFIT OF RS.24,346/- AROSE ON THE SALE OF RURAL AGRICULTURAL LAND AND THIS RESULTED IN DIFFERENCE OF RS.85,380/- + RS.24,346/- TOTALING TO RS.1,09,726/-. ACCORDINGLY THE ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 10 BALANCE SHEET OF FINANCIAL YEAR 2006-07 AND FINANCIAL YEAR 2007- 08 BY INCREASING THE CAPITAL OF RS.1,.09,726/- AND THE COST OF AGRICULTURAL LAND AT GRAM PADLIYAKALA 1 & 2 HAS BEEN INCREASED BY LIKE AMOUNT. RS.8,64,751/- TOTAL (I+II+III) THE COPIES OF RELEVANT BALANCE SHEETS, CAPITAL A/C AND THE SALE DEEDS WERE SUBMITTED WHICH WERE THE CAUSE OF DIFFERENCE BUT THE LEARNED ASSESSING OFFICER DID NOT LOOKED THEM AT ALL AND WORKED OUT HIS OWN CALCULATIONS AND ADDED THE SUM OF RS.3,19,116/- WHICH IS MOST ARBITRARY, UNWARRANTED AND NOT BACKED BY THE FACTS OF THE CASE. ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 11 THE LEARNED ASSESSING OFFICER HAD REOPENED THE APPELLANTS CASE FOR THE ASSESSMENT YEAR 2007-08 RELEVANT TO THE FINANCIAL YEAR 2006-07 TO WHICH THIS DIFFERENCE IN OPENING BALANCE RELATES. IN RE- ASSESSMENT PROCEEDINGS ALL THESE DOCUMENTS WERE AGAIN SUBMITTED BEFORE HIM AND GOT THEM VERIFIED AND THE DIFFERENCE IN OPENING BALANCE WAS FOUND TO BE GENUINE AND ACCEPTED IN THE RE- ASSESSMENT ORDER OF ASSESSMENT YEAR 2007-08. SINCE THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THE GENUINENESS OF THIS DIFFERENCE IN OPENING BALANCE IN RE-ASSESSMENT PROCEEDINGS AND HENCE THE QUESTION OF ADDING THE SAME IN THE RETURNED INCOME OF ASSESSMENT YEAR 2011-12 IS TOTALLY WRONG, UNJUSTIFIED AND OTHERWISE BAD IN LAW. ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 12 IT IS, THEREFORE, PRAYED YOUR HONOUR THAT THE DISALLOWANCE OF RS.4,55,523/- MADE MAY KINDLY BE DELETED AND OBLIGED. 8. I FIND THAT THE LEARNED CIT(A) AND THE ASSESSING OFFICER HAVE NOT VERIFIED THE SUBMISSIONS OF THE ASSESSEE AND WHEN THE ASSESSEE HAS FILED ALL THE DOCUMENTARY EVIDENCE BEF ORE THE ASSESSING OFFICER AND THE LEARNED CIT(A), IN MY O PINION, IT REQUIRES VERIFICATION AT THE END OF THE ASSESSING OFFICER. THEREFORE, I RESTORE THE MATTER TO THE FILE OF THE A SSESSING OFFICER TO DECIDE THE SAME. 9. IN ITA NO. 500/IND/2015 THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.1,09,726/- ON ACCOUNT OF OPENI NG BALANCE. THE ASSESSING OFFICER HAS WORKED OUT THE GROS S RECEIPT OF RS.2,68,900/- BEING THE AMOUNT OF SOYABEAN SALES WHEREAS THE AGRICULTURAL INCOME IS SHOWN AT RS.1,89,970/-. THE ASSESSING OFFICER HAS FAILED TO CO NSIDER ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 13 THE SECOND CROP WHICH WAS TAKEN BY THE ASSESSEE. THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME. THEREAFT ER, THE ASSESSEE HAS FILED REVISED RETURN AND THERE WAS A DIFFER ENCE OF RS.24,35,244/- IN THE REVISED CAPITAL ACCOUNT AND EAR LIER CAPITAL ACCOUNT. THE ASSESSEE HAS FILED RECONCILIATION OF CAPITAL ACCOUNT BEFORE THE ASSESSING OFFICER BUT THE ASSESSEE DID NOT RECONCILE RS.1.09,726/-. THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION. THE LEARNED CIT( A) HAS CONFIRMED THE SAME. 10. I HAVE HEARD THE RIVAL SUBMISSIONS. LOOKING TO TH E FACTS AND CIRCUMSTANCES, THE ASSESSEE HAS FILED THE WRIT TEN SUBMISSIONS BEFORE THE ASSESSING OFFICER AND THE LE ARNED CIT(A) WHICH READS AS UNDER :- C. THE DIFFERENCE IN OPENING CAPITAL WAS MAINLY DU E TO SALE OF RURAL AGRICULTURAL LAND IN FINANCIAL YEAR 2 006- 2007 AND FINANCIAL YEAR 2007-2008 WHICH WAS NOT ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 14 CORRECTLY ACCOUNTED FOR IN THOSE YEARS AND THE COPI ES OF SALE DEEDS AS WELL AS OLD AND NEW CAPITAL A/C FOR FINANCIAL YEAR 2006-2007 AND FINANCIAL YEAR 2007-20 08 WAS ALSO SUBMITTED ALONGWITH THE WRITTEN SUBMISSION TO EXPLAIN THE DIFFERENCE. ANOTHER DIFFERENCE RELATED TO THE VALUE OF CAR WRONGLY BEEN REDUCED BY SUM OF RS.1,75,000/- AS COMPARED TO LAST YEAR BY DEBITING THE SAME TO THE CAPITAL A/C. ALL THESE WERE DULY EXPLAI NED ALONGWITH NECESSARY EVIDENCES AND THIS WERE EXPLAIN ED AS UNDER:- 'AS HAS BEEN SUBMITTED THE SUM OF RS.13,58,241/- COMPRISING OF OPENING BALANCE DIFFERENCE OF RS.8,64,751/- WHICH IS RELATED TO FINANCIAL YEAR 2006-2007 AND FINANCIAL YEAR 2007-2008 AND BALANCE AMOUNT OF RS.4,93,490/- IS THE PROFIT ON SA LE OF LAND AND HOUSE AT NAGDA IN RESPECT OF WHICH LONG TERM CAPITAL GAIN OF RS.6,57,799/- AND RS.3,81,326/- TOTALING TO RS.10,39,125/- HAS BEEN OFFERED IN CURRENT YEAR IN REVISED COMPUTATION OF ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 15 INCOME AND TAXES HAS BEEN PAID ACCORDINGLY SUE- MOTTO BY THE ASSESSEE HIMSELF. THE OPENING BALANCE DIFFERENCE OF RS.1,09,726/- IS BECAUSE THE LAND AT GRAM PADLIYAKALA 1 & 2 WHICH COSTED AT RS.1,11,510/- + RS.29,363/- TOTALING TO RS.1,40,873/- WAS SOLD DURING THE FINANCIAL YEAR 20 06- 07 AND THE SASLE CONSIDERATION WAS REDUCED FROM THE COST OF LAND WHICH WAS SOLD IN PART AND NOT IN FULL AND A REDUCED VALUE OF RS. 55,493/- HAS BEEN SHOWN IN THE ORIGINAL BALANCE SHEET IN PLACE OF RS.1,40,873/- AN D AS A RESULT A GAP OF RS.85,380/- OCCURRED IN THE BALANCE SHEEET OF FINANCIAL YEAR 2006-07 AND THE PROFIT OF RS.24,3 46/- AROSE ON THE SALE OF RURAL AGRICULTURAL LAND AND TH IS RESULTED IN DIFFERENCE OFRS.85,380/- + RS.24,346/- TOTALING TO RS.1,09,726/- . ACCORDINGLY THE BALANCE SHEET OF FINANCIAL YEAR 2006-07 AND FINANCIAL YEAR 2007-0 8 BY INCREASING THE CAPITAL OF RS.1,09,726/- AND THE COS T OF AGRICULTURAL LAND AT GRAM PADLIYAKALA 1 & 2 HAS BEE N INCREASED BY LIKE AMOUNT. ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 16 11. IN MY OPINION, THE ASSESSING OFFICER HAS NOT VER IFIED THIS FACT PROPERLY. THEREFORE, I RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AR E PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 26 TH JULY, 2016 SD/- (D.T. GARASIA) JUDICIAL MEMBER 26 TH JULY, 2016 DN/- ITA NOS. 499 & 500/IND/2015 DR. VINOD LAHIRI & DR.VIDYA LAHIRI 17