SNEH LATA DWIVEDI, Jaipur V. ITO, Jaipur

ITA 501/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5635 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Gift; Business income; Opportunity of being heard; Additional evidence; Competent authority; Reason to believe; Reassessment proceedings
• Section: 133(6); 147; 68; 148; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 501/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 SMT. SNEH LATA DWIVEDI 6/372, MALVIYA NAGAR JAIPUR CUKE VS. THE ITO WARD- 2(3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AJVPD 0339 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI RAJEEV SOGANI, CA JKTLO DH VKSJ LS@ REVENUE BY: SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/01/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 12 /01/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A)-1, JAIPUR DATED 21-03-2016 FOR THE ASSESS MENT YEAR 2007-08 RAISING FOLLOWING GROUNDS OF APPEAL. 1.(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF AO IN REOPENING THE ASSESSMENT MERELY ON THE BASIS OF AIR INFORMATION. AIR INFORMATION CAN NEVER FROM BASIS F OR REOPENING THE ASSESSMENT. THE ACTION OF LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 2 MAY PLEASE BE GRANTED BY QUASHING THE REASSESSMENT PROCEEDINGS BEING ILLEGAL AND WITHOUT ANY BASIS. 1.(B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE AO IN MAKING ADDITION OF RS. 25,00,000/- IN RESPECT OF A MATTER WHICH IS NOT FORMING PART OF THE REASONS RECORDED F OR REOPENING THE ASSESSMENT AND WHERE NO ADDITION WAS MADE IN RESPECT OF THE INVESTMENT IN THE MUTUAL FUNDS F OR RS. 10,00,000/- FOR WHICH REASON THE ASSESSMENT WAS REO PENED. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIE D, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEAS E BE GRANTED BY QUASHING THE ASSESSMENT PROCEEDINGS BEIN G ILLEGAL, WITHOUT JURISDICTION AND BEYOND SCOPE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE AO IN ADDING THE SUM OF RS. 25,00,000/- AS ALLEGED UNE XPLAINED CASH CREDITS U/S 68 OF THE I.T. ACT, 1961. THE ACTI ON OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAIN ST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETI NG THE SAID ADDITION OF RS. 25,00,000/-. 2.1 THE GROUND NO. 1 (A) AND (B) OF THE ASSESSEE IS REGARDING REOPENING THE ASSESSMENT U/S 147 OF THE ACT BY THE AO WHICH HAS BEEN REJECTED BY THE LD. CIT(A) TAKING INTO CONSIDERATIO N ALL THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING THE WRITTEN SUB MISSION OF THE ASSESSEE BY OBSERVING AS UNDER:- 3.2.2.DETERMINATION (I) I HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. THE BRIEF FACTS OF THE CASE ARE THAT ON THE BASIS OF AIR INFORMATION THAT THE APPELLANT HAS MADE ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 3 INVESTMENT IN MUTUAL FUNDS TO THE TUNE OF RS. 10 LA C DURING THE YEAR UNDER CONSIDERATION, A NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO THE APPELLANT ON 30 - 12-2013 IN RESPONSE TO WHICH IT WAS STATED BY THE APPELLANT THAT IT HAD NOT MADE ANY INVESTMENT IN TH E MUTUAL FUNDS DURING THE YEAR UNDER CONSIDERATION. I T IS PERTINENT TO MENTION HERE THAT TH APPELLANT HAD NOT FILED ANY RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WITHIN TIME LIMIT PRESCRIBED BY SECTION 139 OF THE ACT. CONSEQUENTLY, AFTER RECORDI NG REASONS AND OBTAINING APPROVAL FROM THE COMPETENT AUTHORITY, THE AO ISSUED NOTICE U/S 148 O THE ACT T O THE APPELLANT. (II) DURING THE APPELLATE PROCEEDING, IT WAS SUBMITTED BY THE APPELLANT THAT AIR INFORMATION CANNOT BE THE BASIS FOR REOPENING OF THE ASSESSMENT . THERE IS NO MERIT IN THE SUBMISSIONS OF THE APPELLA NT. IT IS A MATTER OF FACT THAT THE APPELLANT HAD NOT F ILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WITHIN THE TIME LIMIT PRESCRIBED U/S 139 OF THE ACT . THE APPELLANT HAS DENIED TO MAKE ANY INVESTMENT IN ICICI PRUDENTIAL MUTUAL FUND. THEREFORE, ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, THE AO HA S REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T. FURTHER THE EXPLANATION-2(A) TO SECTION 147 IS CLEA RLY APPLICABLE TO THE TO THE FACTS OF THE INSTANT CASE UNDER CONSIDERATION. IT MAY BE MENTIONED THAT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (2007) 291 ITR 500 (SC), IT WAS HELD BY THE APEX COURT THAT IF THE AO, FOR WHATEVER REASON, HAS REAS ON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IT CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. IT I S A FACT THAT NO ASSESSMENT WAS MADE EARLIER U/S 143(3)/144 OF THE ACT IN THE CASE OF THE APPELLANT , THEREFORE, THE RATIO IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) APPLIES SQUARELY TO THE FACTS OF THE CASE. ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 4 (III) IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD T HAT THE AO WAS JUSTIFIED IN INITIATING PROCEEDINGS U/S 147 OF THE ACT, HENCE, THIS GROUND OF APPEAL IS HEREBY REJECTED. 2.2 AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, I FIND NO MERIT IN THE ARGUMENTS ADVANCE D BY THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING BEFORE THE BENCH. H ENCE, THE SAME IS DISMISSED. 3.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, THE LD. A R OF THE AT THE TIME OF HEARING PRAYED FOR ADMISSION OF FOLLOWING ADDITI ONAL EVIDENCE UNDER RULE 29A OF ITAT RULES, 1963 WITH REGARD TO THE AD DITION OF RS. 25.00 LACS CONFIRMED BY THE LD. CIT(A) U/S 68 OF THE ACT. THE LD. AR OF THE ASSESSEE FURTHER PRAYED THAT THESE ADDITIONAL DOCUM ENTS ARE VITAL IN ADJUDICATING THE CASE IN RIGHT PERSPECTIVE AND ITS ABSENCE MAY NOT UNFOLD THE ACTUAL CONTROVERSY AND MAY LEAD TO MISCARRIAGE OF JUSTICE. . COPIES OF THE BANK STATEMENT OF ASSESSEE'S IND IVIDUAL BANK ACCOUNT AS WELL AS BANK STATEMENTS OF JOINT ACCOUNT S HELD WITH OTHER FAMILY MEMBERS FOR THE F.Y. 207-08 ACCOUNT NO. NAME OF THE ACCOUNT HOLDER ADD. EVIDENC E PAPER BOOK 00111001002112 SNEH LATA DWIVEDI 1 154901000000678 DINANATH DWIVEDI, SNEHLATA DWIVEDI 2 676901057266 DINANATH DWIVEDI, AKHIL DWIVEDI, PRIYANKA DWIVEDI 3 00111001880 SNEH LATA DWIVEDI, PRIYANKA DWIVEDI 4-6 ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 5 THE BANK STATEMENTS SHOWS THAT THE ASSESSEE OR HER FAMILY MEMBER DO NOT SHOW ANY DEPOSITS OF CASH, WHICH IS A LLEGEDLY RECEIVED DURING F.Y. 2007-08. TO THIS EFFECT, THE LD. AR OF THE ASSESSEE RELIED O N THE ITAT PATNA, THIRD MEMBER JUDGEMENT IN THE CASE ABHAY KUMAR SHROFF VS . ITO, ITA NO. 95 & 193/PAT/1993, A.Y. 198-90 (1997), 63 ITD 144 (PAT). 3.2 DURING THE COURSE OF HEARING, THE LD. DR OBJECT ED TO THE ADDITIONAL EVIDENCE PUT FORTH BY THE LD. AR OF THE ASSESSEE A ND THE LD. DR RELIED ON THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 3.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT OF RS. 10 LACS MADE BY HER ON 24-01-2007 IN ICICI PRUDENTIAL MUTUAL FUND ALONGWITH COPIES OF THE RELEVANT BANK A CCOUNT. DURING ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE ASS ESSEE THAT SHE HAD RECEIVED A SUM OF RS. 25 LACS IN CASH ON SALE OF HE R PROPERTY AT SITUATED AT 43, BHAIRUVILAS NEAR RATANADA GOLF COURSE, JODH PUR OUT OF WHICH RS. 20 LACS WAS DEPOSITED IN THE BANK ACCOUNTS AND THE BALANCE RS. 5 LACS WERE USED FOR RENOVATION OF HOUSE PROPERTY. THE DET AILS OF THE CASH AMOUNT DEPOSITED WITH THE BANKS ARE AS UNDER:- ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 6 DATE NAME OF THE ACCOUNT HOLDER NAME OF THE BANK AMOUNT DEPOSITED. 11-10-2006 SNEH LATA DWIVEDI THE URBAN COOPERATIVE BANK 4,00,000/- 11-10-2006 SNEH LATA DWIVEDI THE BANK OF RAJASTHAN LTD. 4,00,000/- 11-10-2006 DINANATH DWIVEDI & SNEH LATA DWIVEDI INDIAN OVERSEAS BANK 5,00,000/- 11-10-2006 DINANATH DWIVEDI & SNEH LATA DWIVEDI THE URBAN COOPERATIVE BANK 4,00,000/- 11-10-2006 DINANATH DWIVEDI & SNEH LATA DWIVEDI CENTURION BANK LTD. 3,00,000/- TOTAL 20,00,000/- TOTAL CASH HAS BEEN UTILIZED FOR RENOVATION OF HOUS E 5,00,000/- TOTAL SALES CONSIDERATION RECEIVED IN CASH 25,00,00 0/- THUS IT IS OBSERVED FROM THE ASSESSMENT ORDER THAT OUT OF CASH DEPOSIT OF RS. 20 LACS IN ITS BANK ACCOUNTS, THE ASSESSEE INVE STED RS. 5 LACS EACH IN THE NAME OF HERSELF AND IN THE NAME OF HER HUSBAND SHRI DINANATH DWIVEDI IN ICICI PRUDENTIAL MUTUAL ON 24-01-2007. I T WAS FURTHER OBSERVED BY THE AO FROM THE REGISTERED SALE DEED OF THE PROPERTY AT JODHPUR THAT THE ASSESSEE SOLD THE SAID PROPERTY ON 23-10-2007 I.E. IN THE F.Y. 2007-08 RELEVANT TO A.Y. 2008-09 TO SMT. KUSUM SINGHVI WHEREAS THE ASSESSEE CLAIMED TO HAVE SOLD THE PROPERTY DURI NG THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2007-08. THE AO FURTH ER NOTED THAT THE SALE ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 7 DEED EXECUTED ON 23-10-2007 DID NOT MENTION ANYTHIN G ABOUT THE CASH PAYMENTS MADE DURING F.Y. 2006-07 RELEVANT TO A.Y. 2007-08. THE AO WHEN CONFRONTED THIS FACT FROM THE ASSESSEE WHO SAI D THAT SAID PROPERTY WAS SOLD TO SHRI MAHESH SHARMA IN CASH ONLY DURING THE F.Y. 2006-07 . COPY OF AGREEMENT TO SELL WAS NOT FURNISHED INSTEAD A POWER OF ATTORNEY IN FAVOUR OF SHRI MAHESH SHARMA WAS FILED AND NO SA LE CONSIDERATION WAS MENTIONED THEREIN. IN VIEW OF THESE FACTS, THE AO H ELD THAT THE ASSESSEE SOLD HER PROPERTY AT JODHPUR IN THE A.Y. 2008-08 AN D NOT DURING THE YEAR UNDER CONSIDERATION AND THUS THE SOURCE OF RS. 25 L ACS CLAIMED BY THE ASSESSEE TO BE RECEIVED ON ACCOUNT OF SALE OF ITS PROPERTY REMAINED UNEXPLAINED AND THE AO MADE AN ADDITION OF RS. 25 LACS AS INCOME FROM UNEXPLAINED SOURCES IN THE HANDS OF THE ASSESSEE. I N FIRST APPEAL PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE SAID P ROPERTY WAS TRANSFERRED BY HER BY WAY OF EXECUTING A GENERAL POWER OF ATTOR NEY (POA) IN FAVOUR OF SHRI MAHESH SHARMA ON 11-10-2006 AND THE SAID PO WER OF ATTORNEY SOLD THE PROPERTY ULTIMATELY TO SMT. KUSUM SINGHVI ON 23-10-2007 UNDER HIS OWN SIGNATURES. THE ASSESSEE FURTHER SUBMITTED THAT THE AMOUNT AGAINST SALE OF THIS PROPERTY WAS RETAINED BY SHRI MAHESH SHARMA AS HE HAD ALREADY PAID THE CONSIDERATION TO THE ASSESSEE. THE LD. CIT(A) OBSERVED THE CONTENTION OF THE ASSESSEE DURING THE APPELLATE PROCEEDINGS ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 8 THAT POA SHRI MAHESH SHARMA IS NOWHERE RELATED TO HER AND NO PERSON WOULD EVER EXECUTE A POA IN FAVOUR OF A STRANGER AN D JEOPARDIZE HER IN PROPERTY. THE ASSESSEE FURTHER CONTENDED THAT THE P RACTICE OF TRANSFERRING THE PROPERTY BY EXECUTING POA, HANDING OVER POSSESS ION AND ACCEPTING THE PAYMENT IS WELL ACCEPTED BY DIFFERENT JUDICIAL FORMS INCLUDING THE HON'BLE SUPREME COURT IN THE CASE OF SURAJ LAMP & INDUSTRIES (P) LTD. (2012) 340 ITR 1. THE LD. CIT(A) NOTED THAT THE SAL E DEED OF THE ABOVE PROPERTY WAS EXECUTED BY SHRI MAHESH SHARMA ON 23- 10-2007 IN FAVOUR OF SMT. KUSUM SINGHVI AS POWER OF ATTORNEY HOLDER O F THE ASSESSEE BUT THE SAID DOCUMENT REVEALED THAT SHRI MAHESH SHARMA WAS ACTING A GENERAL POWER OF ATTORNEY HOLDER AND NOWHERE IT WAS STATED THAT SHRI MAHESH SHAMRA HAD ALREADY PAID A SUM OF RS. 25.00 LACS TO THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. BEFORE THE LD. CIT(A) SUBMITTED THAT THE AO COULD HAVE SUMMONED SHRI MAHESH SHARMA AND SMT. KUSUM SHINGHVI TO ASCERTAIN THE FACTS WHICH WAS NOT DONE. THE LD. CIT(A) NOTED THAT IT WAS PRIMARY ONUS ON THE ASSESSEE TO SUBSTAN TIATE THAT SHE DID NOT SELL THE INSTANT PROPERTY DURING THE YEAR UNDER CON SIDERATION WHICH WAS NOT DISCHARGED BY THE ASSESSEE. THE LD. CIT(A) NOTE D THAT THE ASSESSEE HAD NEITHER FILED A COPY OF AGREEMENT TO SELL WITH SHRI MAHESH SHARMA OR ANY OTHER DOCUMENT IN THE FORM OF WILL, GIFT DEED E TC. HENCE, THE LD. ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 9 CIT(A) CAME TO CONCLUSION THAT THE SOURCE OF CASH DEPOSIT OF RS. 25 LACS IN THE BANK ACCOUNT OF THE ASSESSEE WAS OUT OF THE SALE PROCEEDS OF IMMOVABLE PROPERTY DURING THE YEAR UNDER CONSIDERAT ION WHICH CANNOT BE ACCEPTED IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE AND HE CONFIRMED THE ADDITION OF RS. 25 LACS MADE BY THE AO. DURING THE COURSE OF HEARING THE LD. AR OF THE ASSESSEE SUBMITTED THAT POA WAS E XECUTED ON 11-10- 2006 AND CASH WAS DEPOSITED IN ONE GO IN THE BANK A CCOUNT ON 11-10- 2006 WHICH PROVES THAT THE SALE TRANSACTION HAD TAK EN PLACE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WILL BE IN THE INTEREST OF JUSTICE TO ACCEPT THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE AND THE ASSESSEE SHOULD BE GIVEN A CHANCE TO PRESENT THE ADDITIONAL EVIDENCES BEFORE THE AO WITH A VIEW TO DEDUCE THE EXACT POSITION OF THE CASE. THUS GROUND NO. 2 OF THE ASSESSEE RELATING TO CONFIRMING THE AD DITION OF RS. 25 LACS ON ACCOUNT OF SALE OF PROPERTY (SUPRA) IS SET ASIDE T O THE FILE OF THE AO TO DECIDE IT AFRESH BY TAKING INTO CONSIDERATION THE A DDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE THE BENCH AND ALLOWING THE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. THE A SSESSEE IS ALSO DIRECTED TO PRODUCE RELEVANT DOCUMENTS BEFORE THE AO AND COO PERATE HIM IN THE PROCEEDINGS. THUS GROUND NO. 2 OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ITA NO.501/JP/2016 SMT. SNEH LATA DWIVEDI VS. ITO, WARD- 2(3), JAIPUR 10 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 /01/2 017. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 /01/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SNEH LATA DWIVEDI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 2(3), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 501/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR