Praveen Jain, UDAIPUR V. ACIT, UDAIPUR

ITA 547/JODH/2010

• Counselvise Citation: 54723314 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: SHYAM SINGHVI
• Keywords: Opportunity of being heard
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JODHPUR BENCH, JODHPUR BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 547/JODH/2010 ASSTT. YEAR : 2006-07 PRAVEEN JAIN, VS. ACIT, CENTRAL CIRCLE-1, S/O VIMAL CHAND GODHA, UDAIPUR. PROP. JAIN SANITARY MART, 52, ASHOK NAGAR, UDAIPUR (PAN : AASPJ 5440 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHYAM SINGHVI, A.R. RESPONDENT BY : SHRI G.R. KOKANI, D.R. DATE OF HEARING : 10.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 13.07.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A), CENTRAL, JAIPUR DATED 10.09.2010 FOR THE ASSESSMENT YEAR 2006-07, CHALLENGING THE ADDITION OF RS.1,51,830/- MADE BY THE AO ON ACCOUNT OF CLUBBING OF THE INCOME OF WIFE OF THE ASSESSEE. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF SANITARY PRODUCTS ON RETAIL BASIS IN THE PROPRIE TARY CONCERN, M/S. JAIN SANITARY MART, UDAIPUR, WHICH WAS SUBJECTED TO SEARCH AND SE IZURE ACTION ( AS PER AO ON ITA NO. 547/JODH/2010 2 11.03.2005), WHEREIN IT WAS NOTICED THAT ANOTHER CO NCERN, M/S. SONA DISTRIBUTORS HAS ALSO BEEN SHOWN RUNNING AS A PROPRIETARY CONCER N OF HIS WIFE SMT. KARUNA JAIN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SEAR CH CASES FROM ASSESSMENT YEAR 1999-2000 TO 2005-06, IT WAS NOTICED BY THE AO THAT VARIOUS TRANSACTIONS APPEARING IN THE DOCUMENTS, BOOKS OF ACCOUNT, PARTI CULARLY SALES, PURCHASES, DEBTORS AND CREDITORS WERE IN CONSOLIDATED MIXED FO RM. THE ASSESSEES COUNSEL ADMITTED THAT IT WAS NOT POSSIBLE FOR HIM TO SEGREG ATE THE ACCOUNTS / INCOME OF THE FIRMS RELATING TO THE ASSESSEE AND HIS WIFE. THEREF ORE, HE CONSIDERED ALL THE INCRIMINATING DOCUMENTS AND OTHER ACCOUNTS IN THE C ASE OF THE ASSESSEE. THE AO COMPLETED THE ASSESSMENT OF THE SEARCHED CASES CONS IDERING BOTH THE BUSINESSES IN THE CASE OF THE ASSESSEE. CONSIDERING THE PAST HIST ORY, THE SIMILAR VIEW WAS TAKEN IN THE ASSESSMENT YEAR UNDER APPEAL AND THE BUSINESS I NCOME DECLARED IN THE CASE OF SMT. KARUNA JAIN WAS CLUBBED IN THE HANDS OF THE AS SESSEE IN THE ASSESSMENT YEAR UNDER APPEAL. IT WAS SUBMITTED BEFORE THE D. CIT(A) THAT BOTH THE FIRMS WERE CARRYING ON THE BUSINESS FROM SAME OUTLET, BUT BOTH THE BUSINESSES ARE DIFFERENT FOR THE LAST NUMBER OF YEARS AND ARE DULY ASSESSED TO T AX UNDER THE INCOME-TAX AND SALES TAX SEPARATELY. SEPARATE BOOKS OF ACCOUNT HAV E BEEN MAINTAINED AND RETURN OF INCOME OF ASSESSEE WAS FILED U/S. 44AF ON THE BA SIS OF THE SALES OF RS.27.67 LACS. THE COMBINED INCOME WAS DETERMINED IN THE RET URN FILED U/S. 153A OF THE IT ACT IN ORDER TO AVOID LITIGATION AND TO PURCHASE PE ACE OF MIND. NOW, IN ASSESSMENT ITA NO. 547/JODH/2010 3 YEAR UNDER APPEAL, I.E., 2006-07, THE BUSINESS INCO ME OF SMT. KARUNA JAIN IS DETERMINED ON THE BASIS OF THE BOOKS OF ACCOUNT. TH EREFORE, THERE IS NO JUSTIFICATION TO CLUB THE INCOME OF HIS WIFE IN THE HANDS OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER APPEAL. THE LD. CIT(A), HOWEVER, CONFIRMED TH E ADDITION IN THE HANDS OF THE ASSESSEE ON THE BASIS OF ASSESSMENT FRAMED FOR BLOC K PERIOD U/S. 153A IN THE CASE OF THE ASSESSEE IN EARLIER YEARS AS WELL AS ON THE BASIS OF PAST HISTORY AS NOTED ABOVE. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, THE LD. DR RE LIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS AND TH E MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATIO N AT THE LEVEL OF THE AO. THE AO CLUBBED THE INCOME OF WIFE OF THE ASSESSEE IN THE H ANDS OF THE ASSESSEE ON THE BASIS OF ASSESSMENT FRAMED FOR SEARCH CASES U/S. 153A FOR THE ASSESSMENT YEARS 1999- 2000 TO 2005-06 AND AS PER THE PAST HISTORY NOTED I N THE BLOCK PERIOD. IN THE SEARCH CASES, SPECIFIC MATERIAL WAS FOUND AGAINST THE ASSE SSEE WHICH COULD NOT BE RECONCILED BY THE ASSESSEE AND THE COUNSEL FOR THE ASSESSEE ALSO ADMITTED THAT IT IS NOT POSSIBLE TO SEGREGATE THE ACCOUNTS OF BOTH THE FIRMS. THEREFORE, ALL THE ITA NO. 547/JODH/2010 4 INCRIMINATING DOCUMENTS WERE ADMITTED TO BE CONSIDE RED IN THE CASE OF THE ASSESSEE. HOWEVER, NO SUCH MATERIAL IS FOUND IN THE ASSESSMENT YEAR UNDER APPEAL AGAINST THE ASSESSEE TO SHOW THAT BOTH THE CONCERNS HAVE BEEN RUN BY THE ASSESSEE. THE ASSESSEE HAS FILED COPY OF PROFIT AND LOSS ACCO UNT FOR THE ASSESSMENT YEAR UNDER APPEAL OF HIS WIFE IN THE NAME OF SONA DISTRI BUTORS SHOWING THE SALES, PURCHASES AND OTHER EXPENSES WHICH HAVE BEEN DISCLO SED ON THE BASIS OF THE BOOKS OF ACCOUNT MAINTAINED BY THE WIFE OF THE ASSESSEE. THE SALE FIGURE HAS BEEN ACCEPTED BY THE COMMERCIAL TAX DEPARTMENT SEPARATEL Y IN THE NAME OF WIFE OF THE ASSESSEE. BANK ACCOUNT IS ALSO MAINTAINED BY WIFE O F THE ASSESSEE AND IN SUBSEQUENT ASSESSMENT YEARS ALSO, WIFE OF THE ASSES SEE FILED RETURN OF INCOME AS INDIVIDUAL FOR ASSESSMENT YEAR 2007-08, 2008-09 AND 2009-10 AND CLAIMED HER STATUS TO BE INDIVIDUAL. THEREFORE, THERE WAS SOM E BASIS FOR THE ASSESSEE TO CONTEND THAT SEPARATE BOOKS OF ACCOUNT HAVE BEEN MA INTAINED BY BOTH THE CONCERNS AND SEPARATE TRANSACTIONS HAVE BEEN CARRIED OUT WHI CH SHOULD HAVE BEEN EXAMINED BY THE AO MINUTELY BEFORE CLUBBING THE INCOME OF WI FE OF THE ASSESSEE IN THE HANDS OF THE ASSESSEE. THE AO, HOWEVER, INSTEAD OF EXAMINING THE BOOKS OF ACCOUNTS, VOUCHERS AND OTHER DOCUMENTS PRODUCED BY THE ASSESSEE MERELY NOTED THAT NO EVIDENCE OR BASIS OF SEGREGATING THE ACCOUN TS HAS BEEN GIVEN. SINCE NO FINDING OF FACT HAS BEEN GIVEN BY THE AO IN THE ASS ESSMENT ORDER AND NO BASIS IS SHOWN AS TO WHICH INCRIMINATING MATERIAL WAS FOUND AGAINST THE ASSESSEE FOR THE ITA NO. 547/JODH/2010 5 ASSESSMENT YEAR UNDER APPEAL FOR CLUBBING OF THE IN COME OF WIFE OF THE ASSESSEE. THEREFORE, THE AO SHOULD NOT, MERELY ON THE BASIS O F PAST HISTORY, CLUB THE INCOME OF WIFE OF THE ASSESSEE IN THE HANDS OF THE ASSESSE E. WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ISS UE TO THE FILE OF AO WITH THE DIRECTION TO PASS SPECIFIC ORDER IN THE CASE OF THE ASSESSEE AFTER EXAMINING THE BOOKS OF ACCOUNT, MATERIAL AND DOCUMENTS PRODUCED I N THE CASE OF M/S. SONA DISTRIBUTORS, I.E., PROPRIETARY CONCERN OF THE WIFE OF THE ASSESSEE AND THE AO SHALL GIVE FINDING ON THE SAME BY GIVING REASONABLE AND S UFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, JODHPUR 6. GUARD FILE ASSTT. REGISTRAR TRUE COPY