Sh. Jyotesh Kumar Jain, Ambala Cantt. V. ITO, Ambala

ITA 543/CHANDI/2011

• Counselvise Citation: 54321514 RSA 2011
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 1999-2000
• Appeal Filed On: 19-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: RAVI SHANKAR; BRIJ MOHAN MONGA
• Keywords: Salary income; Source of fund
• Section: 148; 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 543/CHD/2011 ASSESSMENT YEAR:1999-2000 SHRI JYOTESH KUMAR JAIN VS. THE I.T.O. WARD -2, C/O SIALKOT HOUSE AMBALA D.C. ROAD AMBALA CANTT PAN: ABOPJ 4626 Q (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI RAVI SHANKAR & BRIJ MOHAN MONGA RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 16.08.2011 DATE OF PRONOUNCEMENT : 26.08.2011 ORDER THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), PANCHKULA DATED 17.2.2011 RELATING TO ASSESSMENT YEAR 1999-20 00 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL:- 1 THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW AS WELL AS ON FACTS. 2 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS O N FACTS OF THE CASE IN UPHOLDING THE ORDER OF THE AO WHILE SUSTAINING THE ADDITION OF RS. 2,00,000/- IGNORING THE STATEMENT OF SHRI ROHIT JAIN, MAJOR SON OF THE APPELLANT ADMITTING THAT HE HIMSELF HAD PAID FEE FR OM HIS OWN SPECIFIC SOURCES AND NOT FROM THE APPELLANT . 3 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS O N FACTS OF THE CASE IN UPHOLDING THE ORDERS OF THE AO WHILE UPHOLDING THE NOTICE ISSUED U/S 148 AS LEGAL, IGNOR ING THE ABSENCE OF TANGIBLE OR COGENT MATERIAL. 2 3. THE GROUND NO.1 RAISED BY THE ASSESSEE BEING GEN ERAL, IS DISMISSED. 4. THE ISSUE RAISED IN GROUND NO.2 IS AGAINST THE A DDITION OF RS. 2 LACS AND THE ASSESSEE VIDE GROUND NO. 3 HAS RAISED THE ISSUE OF NOTICE U/S 148 OF THE INCOME TAX ACT. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS DERIVED INCOME FROM SALARY, HOUSE PROPERTY, INTEREST INCOME AND BA NK INTEREST. THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM DDIT (INVESTI GATION) AMBALA THAT RS. 2 LACS WERE PAID IN CASH DURING THE FINANCIAL YEAR 1998-99 TO M.M. EDUCATIONAL TRUST, MULANA FOR THE ADMISSION OF SHRI ROHIT JAIN IN NRI QUOTA. ON ENQUIRES, IT WAS REVEALED THAT SHRI ROHIT JAIN W AS SON OF SHRI JYOTESH JAIN, THE ASSESSEE BEFORE US. THE ASSESSING OFFICER ON V ERIFICATION OF THE RECORD FOUND THAT NO SUCH WITHDRAWAL WAS SHOWN BY THE ASSE SSEE. ACCORDINGLY, NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE WHO IN RE PLY STATED THAT HE FILED HIS RETURN ON 2.6.2006 DECLARING INCOME AS ALREADY ASS ESSED. THE ASSESSEE WAS SHOW CAUSED AS TO WHY THE AMOUNT OF RS. 2 LACS BE NOT INCLUDED AS INCOME OF THE ASSESSEE U/S 69C OF THE INCOME TAX ACT. THE RE -ASSESSMENT ORDER U/S 143(3) WAS PASSED ON THE TOTAL INCOME OF RS. 3,14,4 50/- THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE CIT(A). FURTHER, THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 654/CHD/2007 DATED 25.1.2008 REMANDED THE C ASE TO THE FILE OF CIT(A) TO DECIDE THE APPEAL OF THE ASSESSEE ON MERI T. THE ASSESSEE FILED A MISC. APPLICATION AGAINST THE IMPUGNED ORDER AND TH E TRIBUNAL VIDE ITS ORDER IN M.A. NO. 94/CHD/2008 DATED 19.8.2008 MODIFIED IT S EARLIER ORDER AND REMANDED THE CASE TO THE FILE OF THE ASSESSING OFFI CER. IN THE SECOND ROUND OF PROCEEDINGS, THE ASSESSING OFFICER ISSUED NOTICE TO THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, STATEMENT OF THE ASSESSEE AND SHRI ROHIT JAIN WAS RECORDED. THE ASSESSEE FURNISHED A REPLY T O THE SHOW CAUSE NOTICE 3 ISSUED BY THE ASSESSING OFFICER AS TO WHY THE PAYME NT OF RS. 2 LACS BE NOT TREATED AS MADE BY THE ASSESSEE OUT OF HIS UNDISCLO SED INCOME. THE REPLY OF THE ASSESSEE IS INCORPORATED IN PARA 7 AT PAGES 2 & 3 OF THE ASSESSMENT ORDER. THE ASSESSEE DENIED TO HAVE MADE THE AFORESAID PAYM ENTS. IT WAS FURTHER CLAIMED BY THE ASSESSEE ON 21.8.2008 THAT SHRI ROHI T JAIN, HIS SON, WAS MAJOR AND IT WAS FOR HIM TO EXPLAIN THE SOURCE FROM WHERE HE MADE THE PAYMENT. AS PER THE ASSESSEE THE ASSESSMENT OR RE-ASSESSMENT PR OCEEDINGS SHOULD HAVE BEEN INITIATED IN THE HANDS OF SHRI ROHIT JAIN. TH E ASSESSING OFFICER NOTED THAT IN THE PREVIOUS PROCEEDINGS, THE ASSESSEE HAD DENIED OF MAKING ANY PAYMENT OF RS. 2 LACS TOWARDS ADMISSION OF HIS SON AND IT WAS NEVER DISCLOSED TO THE THEN ASSESSING OFFICER THAT THE PAYMENT WAS MADE BY SHRI ROHIT JAIN. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESS EE IN HIS STATEMENT HAD ADMITTED THAT HIS SON SHRI ROHIT JAIN WAS EARNING I NCOME AS MINOR BUT AS PER THE ASSESSING OFFICER NEITHER THE ASSESSEE NOR HIS WIFE HAD DECLARED ANY INCOME ON BEHALF OF THEIR MINOR SON IN THEIR RESPEC TIVE RETURN/S OF INCOME, WHICH SHOWS THAT SHRI ROHIT JAIN WAS NOT HAVING ANY INCOME AS A MINOR. FURTHER, SHRI ROHIT JAIN IN HIS STATEMENT HAD NOT O FFERED ANY EXPLANATION WITH REGARD TO THE SOURCE OF INCOME AS MINOR. THE ISSUE OF THE RECEIPT IN THE NAME OF THE STUDENT AS PER THE ASSESSING OFFICER DOES NO T HELP THE ASSESSEE. THE ASSESSING OFFICER THUS HELD AS UNDER:- NO DOUBT THAT SHRI ROHIT JAIN HAS COMPLETED 18 YEA RS OF AGE AS ON 21.8.1998, THE DATE OF PAYMENT OF RS. 2 LAC BUT AS IS CLEAR FROM THE ABOVE FACTS, HE WAS HAVING NO SOURCE OF INCOME OF HIS OWN AS MINOR. THE ADMISSION BY SHRI ROHIT JAIN THAT HE HAS MADE THE PAYMENT OF RS. 2 LACS OUT OF HIS EARNINGS AS MINOR CANNOT BE ACCEPTED. THE THEN ASS ESSING OFFICER WAS RIGHT IN ARRIVING AT THE CONCLUSION THA T AS PER RETURN RECORD OF THIS OFFICE NO SUCH WITHDRAWAL HAS BEEN SHOWN. THE FACT IS THAT SHRI JOYTESH KUMAR JAIN HA D PAID 4 THE AMOUNT OF RS. 2 LACS ON 21.8.1998 TO M/S M.M. EDUCATIONAL TRUST, MULLANA FOR ADMISSION OF HIS SON SHRI ROHIT JAIN IN NRI QUOTA / ROLL NO. 270. SHRI ROHIT JAIN WAS A STUDENT AND DEPENDENT ON HIS FATHER. THIS CHILD D ID NOT HAVE ANY INDEPENDENT SOURCE OF INCOME. THIS EXPENDI TURE OF RS. 2 LACS WAS INCURRED BY SHRI JOYTESH KUMAR JAIN. NO EXPLANATION HAS BEEN OFFERED FOR THE SOURCE OF THIS EXPENDITURE. THEREFORE, THIS AMOUNT IS DEEMED TO BE THE INCOME OF THE ASSESSEE FOR THE FINANCIAL YEAR 1998 -99 RELEVANT TO THE ASSESSMENT YEAR 1999-2000 AS PER SE CTION 69C OF THE INCOME TAX ACT, 1961. 6. BEFORE THE CIT(A), THE ASSESSEE CHALLENGED THE O RDER ISSUED U/S 148 OF THE ACT AND THE ADDITION MADE PURSUANT THERETO. T HE SUBMISSIONS OF THE ASSESSEE ARE INCORPORATED IN THE APPELLATE ORDER. T HE CIT(A) UPHOLDED THE REOPENING OF THE ASSESSMENT IN VIEW OF THE RATIO L AID DOWN BY THE HON'BLE SUPREME COURT IN RAJESH JHAVERI STOCK BROKERS PVT L TD. [291 ITR 500 (SC)]. THE CONTENTION OF THE ASSESSEE THAT HIS SON SHRI RO HIT JAIN HAD PAID THE AFORESAID AMOUNT OUT OF HIS OWN SOURCES AND WAS EAR NING INCOME BY WAY OF TAKING TUITIONS AND ALSO FROM CRICKET COACHING, WAS REJECTED AS NO EVIDENCE WAS BROUGHT ON RECORD TO PROVE THAT SHRI ROHIT JAIN HAD ANY SOURCES OF INCOME. FURTHER, IT WAS HELD BY THE CIT(A) THAT SH RI ROHIT JAIN WAS DEPENDENT UPON THE ASSESSEE AND HAS NO INDEPENDENT SOURCES OF INCOME AND THE AMOUNT IN QUESTION HAS TO BE ASSESSED IN THE HA NDS OF THE ASSESSEE AS NO WITHDRAWALS WAS MADE FOR THE PURPOSE, THE ADDITION ON THIS ACCOUNT WAS UPHELD. THE CONTENTION OF SHRI ROHIT JAIN HAVING I NCOME WAS ALSO REJECTED AS NO SUCH INCOME OF THE MINOR WAS DECLARED IN THE HAN DS OF EITHER OF THE PARENTS. THE SAID CONTENTION WAS ALSO REJECTED AS N O SUCH ADMISSION WAS MADE AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS. 7. SHRI RAVI SHANKAR APPEARED FOR THE ASSESSEE AND SMT. JAISHREE SHARMA APPEARED FOR THE REVENUE AND PUT FORWARD THEIR CONT ENTIONS. 5 8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORDS. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ADDITIO N OF RS. 2 LACS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE SUM OF RS. 2 LA CS PAID TO M.M. EDUCATIONAL TRUST, MULANA DURING THE FINANCIAL YEAR 1998-99 FOR THE ADMISSION OF SHRI ROHIT JAIN. NO WITHDRAWAL OF COR RESPONDING AMOUNT WAS SHOWN TO HAVE BEEN MADE BY THE ASSESSEE. IN THIS C ONNECTION, THE CONTENTION OF THE ASSESSEE WAS THAT THE SAID AMOUNT WAS PAID B Y HIS SON OUT OF THE INCOME EARNED BY HIS SON ON ACCOUNT OF GIVING TUITI ON AND CRICKET COACHING WHILE HE WAS A MINOR. THE DATE OF BIRTH OF SON OF THE ASSESSEE IS 8.8.1990, AND HE BECOMES MAJOR ON 8.8.2008. THE PAYMENT OF R S. 2 LACS WAS RECEIVED BY M.M. EDUCATIONAL TRUST ON 21.8.2008. THE SAID P LEA OF THE ASSESSEE THAT HIS SON HAD MADE PAYMENT OUT OF HIS SOURCES OF INCO ME DOES NOT STAND IN THE ABSENCE OF ANY INCOME BEING DECLARED ON ACCOUNT OF THE EARNING OF THE MINOR SON IN THE HANDS OF EITHER OF HIS PARENTS. IN THE ABSENCE OF THE SAME, THERE IS NO JUSTIFICATION IN THE CLAIM OF THE ASSESSEE THAT THE SAID AMOUNT HAS BEEN PAID BY SHRI ROHIT JAIN OUT OF HIS SOURCES OF INCOME. F URTHER, THE ASSESSEE IS THE FATHER OF SHRI ROHIT JAIN AND HE IS DEPENDENT UPON HIS FATHER. IN THE ABSENCE OF ANY EVIDENCE OF THE SOURCES OF THE SAID DEPOSIT OF RS. 2 LACS, THE AMOUNT IN QUESTION IS TO BE ASSESSED AS INCOME OF THE ASSESS EE BEING THE FATHER AND NATURAL GUARDIAN OF HIS SON. THOUGH SHRI ROHIT JAI N IN HIS STATEMENT RECORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD ADM ITTED OF HAVING PAID THE AFORESAID AMOUNT OUT OF HIS OWN INCOME BUT THE SAME DOES NOT STAND THE TEST OF TIME IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON R ECORD TO PROVE THE STAND OF EARNING INDEPENDENT INCOME AS A MINOR. IN THE T OTALITY OF FACTS AND CIRCUMSTANCES, I AM IN AGREEMENT WITH THE ORDER OF CIT(A) IN UPHOLDING THE SAME AND DISMISS GROUND NO.2 RAISED BY THE ASSESSEE AND CONFIRM THE ADDITION OF RS. 2 LACS. 6 9. THE ISSUE IN GROUND NO.3 RAISED BY THE ASSESSEE IS AGAINST THE INITIATION OF RE-ASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S 148 OF THE ACT. THE LD. AR FOR THE ASSESSEE HAS NOT ADDRESSED THE ISSUE OF REOPENING U/S 148 OF THE ACT AND THUS, THE SAME IS DISMISSED AS NOT ADDRESSE D. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF AUGUST, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 26 TH AUGUST, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH