SHRI DR. YOGIRAJ SHARMA, Bhopal V. THE ACIT 1(2), Bhopal

ITA 532/IND/2013

• Counselvise Citation: 53222714 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 11-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Keywords: Unexplained investment; Unexplained expenditure; Gift
• Section: 234B; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI MUKUL SHRAWAT, HONBLE JUDICIAL MEMBER IT(SS) NO. 532/IND/2013 : (A.Y : 2001 - 02) DR. YOGIRAJ SHARMA A - 70, SHAKTI NAGAR, BHOPAL PAN : ALOPS1636H (APPELLANT) VS ASST . COMMISSIONER OF INCOME TAX - 1(2), BHOPAL ( RESPONDENT ) IT(SS) NO. 545/IND/2013 : (A.Y : 2001 - 02) ASST . COMMISSIONER OF INCOME TAX - 1(2), BHOPAL ( APPELLANT ) VS DR. YOGIRAJ SHARMA A - 70, SHAKTI NAGAR, BHOPAL PAN : ALOPS1636H (RESPONDENT) ASSESSEE BY : K.P. DEWANI, ADV. REVENUE BY : LAL CHAND, CIT DR DATE OF HEARING : 17 /09/2014 DATE OF PRONOUNCEMENT : 17 / 11 /2014 O R D E R PER P.K. BANSAL 1. THESE CROSS APPEALS HAVE BEEN FILED AGAINST THE ORDER OF CIT(A) DT. 18.3.2013. THE ASSESSEE DID NOT PRESS GROUND NOS. 1 & 2, THEREFORE, THE FOLLOWING GROUNDS SURVIVE IN ASSESSEES APPEAL : 3. THE LEARNED ASSESSING OFFICER ERRED IN HOLDING THA T INVESTMENT MADE BY SHRI GAURAV SHARMA IN RENOVATION OF HOUSE REMAINS UNEXPLAINED AND IS LIABLE TO BE ASSESSED AS INCOME AT THE HANDS OF ASSESSEE. 4. THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THAT RS.19,81,903/ - BEING AMOUNT OF INVESTMENT MADE BY SHRI GAURAV SHARMA IN RENOVATION OF HOUSE IS LIABLE TO ASSESSED TO TAX AS UNEXPLAINED INVESTMENT AT THE HANDS OF ASSESSEE. 2 IT(SS) NO. 532&545/IND/2013 (ASST. YEAR : 2001 - 02) 5. THE LEARNED AUTHORITIES OUGHT TO HAVE ACCEPTED THE EXPLANATION GIVEN WITH REGARD TO INVESTMENT MADE IN RENOVATION OF HOUSE AND NO ADDITION AT RS.19,81,903/ - OUGHT TO HAVE BEEN MADE. 6. THE ADDITION MADE BY ASSESSING OFFICER AT RS.19,81,903/ - ON ACCOUNT OF INVESTMENT MADE IN RENOVATION OF HOUSE IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 7. THE ASSESSEE DENIES LIABILITY TO BE ASSESSE D TO INTEREST U/S 234A, 234B AND 234C OF THE I.T. ACT, 1961. WITHOUT PREJUDICE, THE LEVY OF INTEREST U/S 234A, 234B AND 234C IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. IN REVENUES APPEAL, THE ONLY GROUND READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN : 1. REDUCING THE ADDITION OF RS.19,81,903/ - FROM RS.20,98,519/ - MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT IN RENOVATION OF HOUSING BUILDING. 2. GROUND NOS. 3 TO 6 IN ASSESSEES APPEAL AS WELL AS THE ONLY GROUND IN REVENUES APPEAL RELATE TO THE COMMON ISSUE RELATING TO ADDITION MADE IN THE HANDS OF THE ASSESSEE IN RESPECT OF RENOVATION EXPENDITURE AMOUNTING TO RS.20,98,519/ - AS PER LPS 1/6 RELATING TO RE NOVATION OF THE HOUSE CARRIED OUT AT A - 70, SHAKTI NAGAR, BHOPAL. AS PER THE AO LOOSE PAPER LPS 1/6 INDICATED RENOVATION OF THE HOUSE AND INCURRING OF EXPENDITURE AMOUNTING TO RS.21,39,338/ - . THE AO, THEREFORE, ASKED FOR EXPLANATION OF THE ASSESSEE. ASSE SSEE STATED THAT THE EXPENDITURE WAS MADE BY HIS SON, SHRI GAURAV SHARMA. STATEMENT OF SHRI GAURAV SHARMA WAS ALSO RECORDED. THE AO NOTED THAT SHRI GAURAV SHARMA WAS ONLY 19 YEARS OLD AND WAS STUDYING IN COLLEGE. IN HIS STATEMENT IN REPLY TO QUESTION NO. 4, SHRI GAURAV SHARMA STATED THAT HE RECEIVED JEWELLERY AND CASH AMOUNTING TO RS. 40 LACS FROM HIS GRANDMOTHER, SMT. RAMDULARI SHARMA. SHRI GAURAV SHARMA WAS CONFRONTED WITH THE WILL OF HIS GRANDMOTHER. AS PER THE WILL ONLY 5 TOLAS OF GOLD WAS GIVEN TO SHRI GAURAV 3 IT(SS) NO. 532&545/IND/2013 (ASST. YEAR : 2001 - 02) SHARMA BUT SHRI GAURAV SHARMA STILL CONTENDED THAT HE HAS BEEN GIVEN SECRET GIFT BY HIS GRANDMOTHER, THAT HE RECEIVED A SUM OF RS. 3 LACS OUT OF SALE OF THE GOLD MADE TO M/S. ALANKAR JEWELLERS. M/S. ALANKAR JEWELLERS CONFIRMED THAT THEY PURCHA SED JEWELLERY FROM SHRI GAURAV SHARMA. IN RESPECT OF RENOVATION EXPENDITURE OF RS.21,39,358/ - AS DETAILED IN LPS 1/6, PG. 1 - 292 IT WAS SUBMITTED BY THE ASSESSEE THAT THE TRANSACTIONS CONTAIN SOME ROUGH PAPERS, DOCUMENTS BELONGING TO GAJANAN DISTRIBUTOR & DEVELOPERS PVT. LTD. NAMED AS ASHARAM BILLS AND SOME ESTIMATE FOR BUILDING CONSTRUCTION AND MATERIAL. THE ACTUAL AMOUNT WAS VERY LESS AND THAT WAS DULY DISCLOSED BY SMT. RAMDULARI SHARMA AND SHRI GAURAV SHARMA IN THEIR RETURN FOR A.Y 2001 - 02 FOR RS.2,39,2 27/ - AND RS. 66,409/ - RESPECTIVELY. THE AO NOTED THAT THE ASHARAM BILLS WERE ONLY FOR RS.40,8 19 / - . ACCORDING TO THE AO, SHRI GAURAV SHARMA WAS NOT HAVING DEFINITE SOURCE OF INCOME AS HE WAS SIMPLY PURSUING COLLEGE EDUCATION. THEREFORE, THE AO AFTER REDU CING THE SUM OF RS.40,819/ - FROM RS.21,39,338/ - ADDED SUM OF RS.20,98,519/ - AS UNEXPLAINED EXPENDITURE FROM UNACCOUNTED SOURCES IN THE HANDS OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL. BEFORE THE CIT(A) THE ASSESSEE REITERATED THE SUBMISSION MADE BEFOR E THE AO AND STATED THAT THE HOUSE A - 7 - , SHAKTI NAGAR WAS INHERITED BY SHRI GAURAV SHARMA ON THE DEATH OF HIS GRANDMOTHER, SMT. RAMDULARI SHARMA ON 31.7.2000. SHRI GAURAV SHARMA IS AN INDEPENDENT ASSESSEE HAVING INDEPENDENT SOURCE OF INCOME. THEREFORE, T HE ADDITION CANNOT BE MADE IN HIS HANDS. CIT(A) AFTER EXCLUDING THE SUM OF RS.1,16,616/ - BEING INVESTMENT IN ORNAMENTS BY SMT. RAMDULARI SHARMA AND SMT. SHASHI SHARMA SUSTAINED THE ADDITION OF RS.19,81,903/ - IN THE HANDS OF THE ASSESSEE. FOR THE DELETION OF THE ADDITION OF RS. 1,16,616/ - THE REVENUE HAS COME IN APPEAL WHILE FOR THE SUSTENANCE OF ADDITION, THE ASSESSEE HAS COME IN APPEAL. 3. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE HOUSE IN 4 IT(SS) NO. 532&545/IND/2013 (ASST. YEAR : 2001 - 02) RESPECT OF WHICH THE AO MADE ADDITION FOR RENOVATION EXPENSES DOES NOT BELONG TO THE ASSESSEE. THE HOUSE BELONGS TO SHRI GAURAV SHARMA, SON OF THE ASSESSEE WHO INHERITED THE SAID HOUSE ON THE DEATH OF HIS GRANDMOTHER, SMT. RAMD ULARI SHARMA ON 31.7.2000. THE ASSESSEE AS WELL AS SMT. RAMDULARI SHARMA DURING A.Y 2001 - 02 HAVE SHOWN IN THEIR RETURN PART OF THE RENOVATION EXPENDITURE WHICH HAS BEEN ACCEPTED BY THE AO. THE AO HAS MERELY MADE ADDITION ON THE BASIS OF PRESUMPTION AND A SSUMPTION THAT THE SON OF THE ASSESSEE COULD HAVE NOT GOT FUNDS TO INCUR THE EXPENDITURE ON THE RENOVATION. THE LD. AR EVEN THOUGH VEHEMENTLY CONTENDED BEFORE US BY REFERRING TO THE VARIOUS PAGES FROM PG. 1 - 292 THAT PG. 52 AMOUNTING TO RS. 30,750/ - RELATE S TO A.Y 1999 - 2000, PG. 12 - 21 WHICH CONTAINS RS. 62,000/ - RELATES TO JEWELLERY CALCULATION WHILE SUM OF RS.2,84,706/ - RELATES TO ESTIMATE ON VARIOUS PAGES VIZ. 1, 3, 4, 6, 9, 28, 194, 276, 267 & 38. THESE PAPERS DO NOT RELATE TO CONSTRUCTION OF THE HOUSE. HE ALSO CONTENDED THAT ONLY THE FOLLOWING SUMS AS PER LOOSE PAPER RELATE TO THE RENOVATION OF THE HOUSE WHICH HAS BEEN INCURRED BY SMT. RAMDULARI SHARMA TILL 31.7.2000 : SMT. RAMDULARI SHARMA - RS.1,70,798/ - SHRI GAURAV SHARMA - RS.3,95,921/ - 4. OUR ATTENTION WAS ALSO DRAWN TO SUM OF RS.55,000/ - WHICH RELATED TO DUPLICATE PAYMENT. WE ARE NOT GOING THROUGH THIS ISSUE, AS IN OUR OPINION, ONCE THE HOUSE DOES NOT BELONG TO THE ASSESSEE, THERE IS NO EVIDENCE FOUND DURING THE COURSE OF THE SEARCH THAT THE ASSESSEE HAS INVESTED IN THE RENOVATION OF THE HOUSE, U/S 69 THE ONUS IS ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS MADE THE INVESTMENT WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS, IF ANY, MAINTAINED BY THE ASSESSEE. THE HOUSE WHERE THE RENOVATION HAS BEEN CARRIED OUT DOES NOT BELONG TO THE ASSESSEE. THE PAPERS AND DOCUMENTS ON THE BASIS OF WHICH THE ADDITION HAS BEEN MADE HAS BEEN FOUND FROM THE HOUSE IN WHICH NOT 5 IT(SS) NO. 532&545/IND/2013 (ASST. YEAR : 2001 - 02) ONLY THE ASSESSEE, BUT THE FAMILY OF THE ASSESSEE WAS PUTTING UP. THE RENOVATION WA S TO BE CARRIED OUT BY THE PERSON TO WHOM THE HOUSE BELONGED. NO COGENT MATERIAL OR EVIDENCE HAS BEEN BROUGHT ON RECORD EVEN ON THE BASIS OF THE MATERIALS SEIZED THAT THE EXPENSES FOR RENOVATION HAVE BEEN INCURRED BY THE ASSESSEE. IN OUR OPINION, THE ONU S LIES ON THE REVENUE BY MAKING THE ADDITION TO PROVE THAT THE ASSESSEE HAD MADE THE INVESTMENT. IN OUR OPINION, IF ANY ADDITION HAS TO BE MADE FOR THE RENOVATION OF THE HOUSE, SAME SHOULD BE MADE IN THE HANDS OF THE MOTHER OF THE ASSESSEE AS WELL AS THE SON OF THE ASSESSEE TO WHOM THE HOUSE BELONGS. WE, THEREFORE, DELETE THE ADDITION. IN THE RESULT, GROUND NOS. 3 TO 6 IN ASSESSEES APPEAL ARE ALLOWED WHILE THE ONLY GROUND IN REVENUES APPEAL STANDS DISMISSED. 5. GROUND NO. 7 IN ASSESSEES APPEAL IS CON SEQUENTIAL RELATING TO CHARGING OF INTEREST U/S 234A, 234B & 234C. WE, THEREFORE, DIRECT THE AO TO RECOMPUTE THE INTEREST U/S 234A, 234B & 234C AFTER GIVING EFFECT TO THE ABOVE ORDER. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED WHILE T HE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 7. ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT INDORE . SD/ - ( MUKUL SHRAWAT ) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER DATED : 17 / 11 /2014 *SSL* 6 IT(SS) NO. 532&545/IND/2013 (ASST. YEAR : 2001 - 02) COPY TO : (1) ASSESSEE (2) REVENUE (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER