Mrs. Naina Singh, New Delhi V. ACIT, Chandigarh

ITA 607/CHANDI/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8486 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 24-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C GOYAL
• Assessee Lawyers: MANJIT SINGH
• Keywords: Unexplained investment; Tax effect
• Section: 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 607/CHD/2013 ASSESSMENT YEAR : 2002-03 SMT. NAINA SINGH VS. THE ACIT, W/O AJAY CHAUTALA CENTRAL CIRCLE-II, # 2883, HARDIAN SINGH ROAD CHANDIGARH KAROL BAGH NEW DELHI PAN NO. AORPS1742Q & ITA NO. 720/CHD/2013 ASSESSMENT YEAR : 2002-03 THE DCIT VS. SMT. NAINA SINGH CENTRAL CIRCLE-II, W/O AJAY CHAUTALA CHANDIGARH #2883, HARDIAN SINGH ROAD KAROL BAGH NEW DELHI PAN NO. AORPS1742Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : SH. P.C. GOYAL DATE OF HEARING : 16/12/2015 DATE OF PRONOUNCEMENT : 25/02/2016 ORDER PER ANNAPURNA MEHROTRA A.M. 1. BOTH THE APPEALS FILED BY THE REVENUE AND ASSESS EE ARE DIRECTED AGAINST THE ORDER DATED 19.03.2013, PASSED BY THE CIT, CENT RAL, GURGAON. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED- OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE, IN RESPONSE TO WHICH RETURN DECLARING INCOME OF RS. 7,38,407/- AND AGRICULTURAL INCOME OF RS. 9,00,000/- WAS FILED BY THE ASSESSEE. ASSESSMENT WA S FRAMED AT AN INCOME OF RS. 25,25,145/- AFTER MAKING ADDITION OF RS. 2,94,800/- ON ACCOUNT OF INCOME FROM 2 OTHER SOURCES, AND RS. 14,91,645/- ON ACCOUNT OF UN EXPLAINED INVESTMENT IN PROPERTY. IN APPEAL BEFORE THE LD. CIT(A), THE ADDI TION OF RS. 2,94,800/- ON ACCOUNT OF INCOME FROM OTHER SOURCES WAS DELETED WH ILE OUT OF THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT, A SUM OF RS. 8,02,000/- WAS TREATED AS EXPLAINED AND THE BALANCE ADDITION OF RS . 6,89,645/- WAS UPHELD. 3. AGGRIEVED BY THE SAME, BOTH THE ASSESSEE AND THE REVENUE FILED THE PRESENT APPEAL BEFORE US. 4. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE A SSESSEE IN ITA NO. 607/CHD/2013, IN WHICH THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT(A) (CENTRAL) GRUGAON IS NOT JUS TIFIED IN UPHOLDING THE ADDITION OF RS. 6,89,645/-. 2. THAT THE LD. CIT(A) (CENTRAL) GURGAON HAS IGNORE D THE FACT THAT THE AMOUNT OF RS. 6,89,645/- PAID TO MUNICIPAL CORPORAT ION OF DELHI FROM THE BANK ACCOUNT OF HER HUSBAND SH. AJAY CHAUTALA IS PART OF COST OF CONSTRUCTION OF RS. 24,09,645/- AND WAS PAID BY HIM ON BEHALF OF THE AP PELLANT. AS IS EVIDENT, BOTH THE GROUNDS RELATE TO THE ADDIT ION OF RS. 6,89,645/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT UPHELD BY THE LD. CIT(A). 5. BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURIN G ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2003-04 IT WAS FOUND THAT THE ASSE SSEE HAD SHOWN AN INVESTMENT OF RS. 50.66 TOWARDS COST OF CONSTRUCTIO N OF A PROPERTY AT 2883, HARDIAN SINGH ROAD KAROL BAGH. WITH REGARD TO THE S OURCE OF INVESTMENT, THE ASSESSEE CLAIMED THAT RS. 8.02 LACS WAS INVESTED OU T OF OWN PAST SAVINGS AND RS. 6,89,645/- HAD BEEN RECEIVED FROM HER HUSBAND. THE AO REJECTED THE CONTENTION OF THE ASSESSEE FOR THE REASON THAT NO E VIDENCE TO SUBSTANTIATE THE EXPLANATION HAD BEEN FILED BY THE ASSESSEE AND MADE ADDITION OF THE SAME TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINE D INVESTMENT. BEFORE THE LD. CIT(A) THE ASSESSEE CLAIMED THAT THE IMPUGNED I NVESTMENTS HAD BEEN MADE IN THE PRECEDING YEAR I.E; ASSESSMENT YEAR 20 02-03 WHICH WAS ACCEPTED BY THE LD. CIT(A), WHO OBSERVED THAT THE ADDITION I F ANY COULD BE MADE ON THIS ACCOUNT IN THE PRECEDING YEAR. CONSEQUENTLY DURING ASSESSMENT PROCEEDING FOR 3 ASSESSMENT YEAR 2002-03 I.E; THE IMPUGNED ASSESSME NT YEAR THE ASSESSEE WAS AGAIN ASKED TO EXPLAIN THE SOURCE OF INVESTMENT. LD . AO THEREAFTER PROCEEDED TO MAKE ADDITION OF THE IMPUGNED SUMS (8,02,000/- + 6,89,845/-) ON PROTECTIVE BASIS, SINCE THE ADDITION ON SUBSTANTIVE BASIS HAD BEEN MADE IN ASSESSMENT YEAR 2003-04. THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO VIDE HIS ORDER DT. 19.03.2013 DELETED THE ADDITION OF RS. 8, 02,000/- AND UPHELD THE ADDITION OF RS. 6,89,645/-. 6. BEFORE US LD. AR REITERATED THE CONTENTIONS MADE BEFORE THE LD. CIT(A) AND PLEADED THAT RS. 6,89,645/- INVESTED IN THE IMP UGNED PROPERTY WAS ON ACCOUNT OF PAYMENT MADE TO THE MUNICIPAL CORPORATIO N DELHI, FOR THE IMPUGNED PROPERTY WHICH WAS DIRECTLY MADE BY MR. AB HAY CHAUTALA, THE HUSBAND OF THE ASSESSEE THROUGH HIS BANK ACCOUNT. L D. AR DREW OUR ATTENTION TO THE FOLLOWING DOCUMENTS TO SUBSTANTIATE HIS EXPLANA TION. A) RECEIPT ISSUED BY THE MUNICIPAL CORPORATION DELH I IN THIS BEHALF. B) AFFIDAVIT OF SH. AJAY CHAUTALA IN THIS REGARD AT PAPER BOOK PAGE NO.36. C) CERTIFICATE OF SBI, CERTIFYING THE ISSUE OF CHEQ UE AMOUNTING TO RS. 6,89,645/- FROM THE ACCOUNT OF SH. AJAY CHAUTALA PA PER BOOK PAGE NO. 37 D) BANK STATEMENT OF SH. AJAY CHAUTALA SHOWING ISSU E OF CHEQUE AMOUNTING TO RS. 6,89,645/- AT PAPER BOOK PAGE NO . 38 THUS THE LD. AR SUBMITTED THAT THE SOURCE OF INVEST MENT OF RS. 6,89,645/- STOOD EXPLAINED AND NO ADDITION ON THIS ACCOUNT WAS WARRA NTED. 7. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER O F THE CIT(A) / AO. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS ALSO THE DOCUMENTS PLACED BEFO RE US. 9. WE FIND THAT THE SOURCE OF INVESTMENT OF RS. 6,8 9,645/- IN THE PROPERTY OF THE ASSESSEE STANDS EXPLAINED AND DULY SUBSTANTIATE D BY THE EVIDENCES 4 PRODUCED BY THE ASSESSEE. THE BANKERS CERTIFICATE, THE BANK STATEMENT OF SH. AJAY CHAUTALA, THE MUNICIPAL CORPORATION RECEIPT, T HE AFFIDAVIT OF SH. AJAY CHAUTALA CONFIRM THE FACT THAT THE IMPUGNED SUM WAS PAID BY SH. AJAY CHAUTALA THROUGH HIS BANK ACCOUNT DIRECTLY TO THE M UNICIPAL CORPORATION. CLEARLY THE IMPUGNED INVESTMENT HAS BEEN MADE BY TH E HUSBAND OF THE ASSESSEE ON HER BEHALF. ALL THESE EVIDENCES WERE FI LED BEFORE THE LD. CIT(A) ALSO, WHO, WE FIND, HAS NOT CONTROVERTED THE SAME. MOREOV ER WE FIND NO MERIT OR SUBSTANCE IN THE FINDING OF THE LD. CIT(A) THAT SIN CE THIS AMOUNT WAS PAID TO THE MUNICIPAL CORPORATION THE SAME COULD NOT BE SAID TO BE PAID TO THE ASSESSEE. CLEARLY THE AMOUNT HAD BEEN PAID ON BEHALF OF THE A SSESSEE TO THE MUNICIPAL CORPORATION AND THE INVESTMENT MADE TO THIS EXTENT OF RS. 6,89,645/- IN THE PROPERTY OF THE ASSESSEE STANDS EXPLAINED. 10. THE ADDITION MADE OF RS. 6,89,645/- IS THEREFOR E DELETED. 11. THE APPEAL OF THE ASSESSEE IS THEREFORE ALLOWED . ITA NO. 720/CHD/2013 12. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWIN G GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FAC TS BY DELETING THE ADDITION OF RS. 2,94,800/- ON ACCOUNT OF BOGUS AGRICULTURAL INCOME WHEN THE NAME OF THE ASSESSEE IS NOT APPEARING AS CULTIVATOR IN JAMABAN DI OF THE CULTIVATED LAND. 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACT S BY DELETING THE ADDITION OF RS. 8,02,000/- OUT OF FACT BASED ADDITION OF RS. 14 ,91,645/- MADE AS UNEXPLAINED INVESTMENT TOWARDS CONSTRUCTION OF PROPERTY WHEN TH E ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE SAME. 13. IN THE APPEAL FILED BY THE REVENUE, IT IS AN AD MITTED FACT THAT THE TAX EFFECT DOES NOT EXCEEDS THE MONETARY LIMIT OF RS.10 LAKHS. THUS, IN VIEW OF CIRCULAR NO. 21/2015 DATED 10.12.2015, F.NO.279/MIS C.142/2007- ITJ(PT),GOVERNMENT OF INDIA, MINISTRY OF FINANCE, D EPARTMENT OF REVENUE, CENTRAL BOARD OF DIRECT TAXES, THE ABOVE APPEALS DE SERVES TO BE TREATED AS WITHDRAWN/NOT PRESSED. VIDE PARA 10 OF THE ABOVE I NSTRUCTIONS, THE CBDT HAS CLARIFIED THAT THIS INSTRUCTION WILL APPLY RETROSPE CTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN ITAT. THE CBDT H AS FURTHER CLARIFIED THAT THE 5 PENDING APPEALS BEFORE THE TRIBUNAL BELOW THE SPECI FIED TAX LIMITS I.E. RS.10 LAKHS MAY BE WITHDRAWN/NOT PRESSED BY THE REVENUE. THE IS SUES INVOLVED IN THESE APPEALS ARE NOT COVERED BY THE PARA 8 (EXCEPTIONS) OF THE ABOVE INSTRUCTIONS. ACCORDINGLY THE APPEAL FILED BY THE REVENUE IS TREA TED AS WITHDRAWN/NOT PRESSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND THE CROSS APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/02/2016. SD/- SD/- (H.L. KARWA) (ANNAPURNA MEHROTRA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 25/02/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR