The Income-tax Officer, Amritsar. V. Sh. Inderjit Singh Sharma, Amritsar.

ITA 602/ASR/2014

• Counselvise Citation: 60220914 RSA 2014
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 08-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.602(ASR)/2014 ASSESSMENT YEAR:2006-07 PAN :AGHPS0802R INCOME TAX OFFICER VS. SH.INDERJIT SHARMA, WARD 4(2), AMRITSR. JANDIALA GURU, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SMT. NEERAJ SHARMA, DR RESPONDENT BY:SH. TEJ MOHAN SINGH, ADVOCATE DATE OF HEARING:18/02/2015 DATE OF PRONOUNCEMENT:19/02/2015 ORDER PER A.D.JAIN, AM: THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEA R 2006-07 AGAINST THE ORDER DATED 16.07.2014 PASSED BY THE LD. CIT(A) , AMRITSAR. THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN TAKEN: 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACT IN DEL ETING THE ADDITIONS OF RS.19.00 LACS WHICH WAS MADE BY THE AO U/S 69 OF THE INCOME TAX ACT, TREATING AS UNEXPLAINED INVESTM ENT OF RS.19.00 LACS IN MUTUAL FUNDS. THE LD. CIT(A) HAS F AILED TO APPRECIATE THE FACTS THAT CREDITWORTHINESS OF HIS S ON COULD NOT BE ESTABLISHED AND NO EXPLANATION REGARDING DEPOSITS I N THE ACCOUNT OF THE ASSESSEE BY HIS SON WAS PROVED. THE LD. CIT(A) HAS FAILED TO VERIFY THE SOURCE OF CASH DEPOSITS IN THE ACCOUNT OF ITA NO.602(ASR)/2014 2 THE SON OF THE ASSESSEE WHICH WAS INVESTED IN PURCH ASING THE UNITS OF MUTUAL FUNDS. 2. THE LD. CIT(A) HAS ADMITTED AND ACCEPTED ADDITI ONAL EVIDENCES UNDER RULE 46A OF THE INCOME TAX RULES WI THOUT GRANTING ANY OPPORTUNITY TO CROSS EXAMINE THE ASSES SEE AND AUTHENTICATE THE DEPOSITS IN THE BANK ACCOUNT OF H IS SON WHICH IS AGAINST THE TRUE SPIRIT OF RULE 46A OF THE INCOM E TAX RULES. 2. AS PER GROUND NO.2, THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, WI THOUT GRANTING ANY OPPORTUNITY TO THE AO TO CROSS-EXAMINE THE ASSESSEE AND TO AUTHENTICATE THE DEPOSITS IN THE BANK ACCOUNT OF HIS SON. IT IS ON THE BASIS OF THIS ADDITIONAL EVIDENCE, THAT THE LD. CIT(A) DELETED THE ADDITION OF RS.19 LACS MADE BY THE AO U/S 69 OF THE INCOME TAX ACT, 1961, WHICH DELETI ON IS THE SUBJECT MATTER OF GROUND NO.1 RAISED BY THE DEPARTMENT BEFORE US. 3. IN THIS REGARD, THE LD. CIT(A) HAS OBSERVED AS F OLLOWS: IT APPEARS THAT AO HAS MADE ADDITION AS ASSESSEE W AS NOT ABLE TO FURNISH IN TIME ANY CONCRETE EVIDENCE DURING ASSESS MENT PROCEEDINGS REGARDING CREDIT WORTHINESS OF SH. DEEPAK SHAMA AND IT IS ALSO CLEAR THAT ASSESSEE WHO IS PENSIONER AND A RETIRED PERSON WAS APPEARING BEFORE THE AO AND WAS NOT ABLE TO UNDERSTAND PROPER LY WHAT CERTIFICATE/DOCUMENTS ARE REQUIRED FOR THE PURPOSE OF PROVING CREDIT WORTHINESS. DURING APPELLATE PROCEEDING, COUNSEL OF THE ASSESSEE HAS SUBMITTED RETURN OF INCOME FILED WITH TAX AUTHORITI ES OF IRELAND OF SH. DEEPAK SHARMA FOR THE YEAR 2002, 2003, 2004 & 2005 TO PROVE HIS CREDIT WORTHINESS. HE HAS ALSO SUBMITTED LETTER FRO M THE MANAGING DIRECTOR OF THE COMPANY M/S. BIOSHELL TEORANTA STAT ING THAT GROSS SALARY OF SH.DEEPAK SHARMA WAS 50,000/- EURO PER AN NUM VIDE HIS LETTER DATED 18 AUG, 2004. SH. DEEPAK SHARMA HAS SH OWN IN HIS RETURN OF INCOME SALARY OF E.18,274/-, E. 27,253/-, E. 38, 784/- & E. 38,679/- SALARY FOR THE YEAR ENDED 2002, 2003, 2004 & 2005. THESE EVIDENCES ITA NO.602(ASR)/2014 3 HAVE BEEN TAKEN ON RECORD CONSIDERING THAT APPELLAN T WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE BEF ORE THE AO WHICH WAS RELEVANT TO PROVE HIS GROUNDS OF APPEAL AS PROV IDED IN RULE 46A(1)(C). AS THESE DETAILS WERE CALLED BY THE UNDE RSIGNED FOR THE VERIFICATION OF CREDIT WORTHINESS OF SH. DEEPAK SHA RMA IN THIS REGARD AS PROVIDED IN SECTION 250(4) OF THE INCOME TAX AC T, 1961. IT IS CLEAR FROM THE BANK ACCOUNT DETAILS SUBMITTED BEFORE THE AO THAT MUTUAL FUND OF RS.19,00,000/- WERE PURCHASED FROM THE BANK ACCOUNT OF SH. DEEPAK SHARMA WITH HDFC BANK ACCOUNT NO.02131010000 142 AND IMMEDIATE SOURCE OF CREDIT FUNDS INCLUDING ORIGIN OF THESE FUNDS HAVE BEEN VERIFIED FROM VARIOUS BANK ACCOUNTS DISCUSSED ABOVE, I AM OF THE OPINION THAT ASSESSEE HAS DISCHARGED ONUS OF PROVIN G SOURCE OF INVESTMENT ALONGWITH GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS. IN VIEW OF ABOVE, ADDITION MADE OF RS.1 9,00,000/- IS DELETED AND APPEAL IS ALLOWED. 4. FROM THE ABOVE, IT IS EVIDENT THAT THE LD. CIT(A ) ADMITTED THE ADDITIONAL EVIDENCE SINCE ACCORDING TO HIM, THE AS SESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING IT BEFORE THE AO AN D ALSO BECAUSE THE LD. CIT(A) HAD HIMSELF ASKED THE ASSESSEE TO PRODUCE T HIS ADDITIONAL EVIDENCE BEFORE HIM [THE LD.CIT(A)], AS PER SECTION 250(4) O F THE ACT. THE LD. CIT(A) DELETED THE ADDITION ON THE BASIS OF THIS AD DITIONAL EVIDENCE. 5. WHILE DELETING THE ADDITION, IT IS SEEN, THE LD. CIT(A) OBSERVED THAT THE IMMEDIATE SOURCE OF THE CREDIT FUNDS, INCLUDING THE ORIGIN OF THESE FUNDS HAD BEEN VERIFIED FROM VARIOUS BANK ACCOUNTS AND TH AT HE WAS OF THE OPINION THAT THE ASSESSEE HAS DISCHARGED THE ONUS OF PROVIN G THE SOURCE OF INVESTMENT ALONGWITH THE GENUINENESS OF THE TRANSACTION AND TH E CREDIT-WORTHINESS. ITA NO.602(ASR)/2014 4 6. HOWEVER, AS RIGHTLY OBJECTED BY THE LD. DR (AS A LSO STATED IN THE GROUNDS OF APPEAL) , THE IMPUGNED ORDER NOWHERE SHOWS THAT THE AO WAS AFFORDED ANY OPPORTUNITY TO CROSS-EXAMINE THE ASSES SEE AND TO AUTHENTICATE THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSES S ON, SH. DEEPAK SHARMA. THE ORDER UNDER APPEAL ALSO DOES NOT EVINCE THOUGH HE SAYS SO IN THE ORDER, AS TO INN WHAT MANNER THE LD. CIT(A) HIMSELF VERIFI ED THE SOURCE OF THE CASH DEPOSITS IN THE BANK ACCOUNT OF SH.DEEPAK SHARMA. I T IS WELL SETTLED THAT QUASI-JUDICIAL ORDER MUST BE REASONED AND SPEAKING ORDER. IT REMAINS UNDISPUTED THAT THE SOURCE OF INVESTMENT BY WAY OF PURCHASE OF UNITS OF MUTUAL FUNDS WAS THESE CASH DEPOSITS. 7. THUS, NEITHER DID THE LD. CIT(A) MAKE FURTHER EN QUIRY INTO THE MATTER, NOR DID DIRECTION TO THE AO TO DO SO, THEREBY VIOLA TING THE MANDATE OF SECTION 250(4) OF THE ACT. SECTION 250(4) OF THE ACT, READS AS FOLLOWS: SECTION 250(4): THE LD. CIT(A) MAY, BEFORE DISPOSI NG OF ANY APPEAL, MAKE SUCH FURTHER ENQUIRY AS HE THINKS FIT, OR MAY DIRECT THE AO TO MAKE FURTHER ENQUIRY AND REPORT THE RESULT OF THE SAME TO THE CIT(A). 8. IN VIEW OF THE ABOVE, IN THE INTEREST OF JUSTICE , WE REMIT THIS MATTER TO THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW , AFTER VERIFYING THE SOURCE OF THE CASH DEPOSITS IN THE BANK ACCOUNT OF SH.DEEPAK SHARMA SON OF ITA NO.602(ASR)/2014 5 THE ASSESSEE, BY, INTER-ALIA, CROSS-EXAMINING THE ASSESSEE. THE ASSESSEE, NO DOUBT, SHALL BE GRANTED DUE AND ADEQUATE OPPORTUNIT Y TO SUPPORT HIS CASE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH FEBRUARY, 2015. SD/- SD/- (B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. INDERJIT SHARMA, AMRITSAR 2. THE ITO WARD 4(2), AMRITSR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.