Sh. Azad Bansal, Ghaziabad V. ITO, Ghaziabad

ITA 6134/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3234 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHURI
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-6134/DEL/2014 (ASSESSMENT YEAR-2009-10) AZAD BANSAL, C-273, SHALIMAR GARDEN, EXT.-2, SAHIBABAD, GHAZIABAD-201005. PAN-AHSPB4215F ( APPELLANT) VS ITO, WARD-1(1), GHAZIABAD. (RESPONDENT) ASSESSEE BY SH.SUNIL KUMAR, CA REVENUE BY MS. BEDOBANI CHAUDHURI, SR.DR DATE OF HEARING 08.02.2017 DATE OF PRONOUNCEMENT 08.05. 2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 26.08.2014 OF CIT(A), GHAZIABAD PER TAINING TO 2009-10 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THE AO TREATED FULL AMOUNT OF RS.15,00,000/- WH ICH HAS BEEN PAID AGAINST PURCHASE OF HOUSING IN JOINT NAME, AS UNEXP LAINED INVESTMENT AND ADDITION MADE ACCORDINGLY FOR RS.15,00,000/-. 2. THE AO HAD IGNORED THE FACT THAT PURCHASE OF HOU SE MADE IN JOINT NAME AND BY IGNORING THIS FACT ALL THE PAYMENT IN CASH F OR RS.15,00,000/- TREATED AS MADE BY THE ASSESSEE. 3. THE AO HAD IGNORED THAT THE BOTH PURCHASER OF RE SIDENTIAL HOUSE WAS HAVING NIL CAPITAL ON THE DATE OF PURCHASE. THE AS SESSEE AND HIS WIFE ARE INCOME TAX PAYER FROM LAST 10 YEARS AND SAVINGS OUT OF INCOME/STRIDHAN TREATED NIL. 4. THE AO ERRED IN LAW BY TREATING ALL PAYMENT IN C ASH HAVE BEEN MADE BY THE ASSESSEE WHILE 50% OF RS.15,00,000/- I.E. RS.7, 50,000/- MADE BY WIFE OF ASSESSEE. PAYMENT MADE BY THE WIFE NOT TO B E TREATED AS PAYMENT MADE BY THE ASSESSEE U/S 69B. 5. THE ASSESSEE REQUEST TO RELIEF BY DELETING THE DEMAND ON ADDITION OF RS.15,00,000/- U/S 69B. 6. THE AO HAS ERRED IN INITIATING PENALTY PROCEEDIN GS U/S 271(1)(C) OF THE ACT. 7. THAT THE APPELLANT CRAVES THE RIGHT TO AMEND, AP PEND, DELETE, ENHANCE, AND ADD ANY OR ALL GROUND OF APPEAL BEFORE OR AT TH E TIME OF HEARING OF APPEAL. 2. BOTH THE PARTIES HAVE BEEN HEARD. THE RECORD SH OWS THAT THE ASSESSEE DECLARED AN INCOME OF RS.1,84,410/- FROM PETTY BUSINESS ACTI VITIES WHEREIN BOOKS OF ACCOUNTS HAVE NOT BEEN MAINTAINED. THE AO REQUIRED THE ASSES SEE TO EXPLAIN THE INVESTMENT OF RS.15 LACS IN THE PURCHASE OF HOUSE PROPERTY. THE A SSESSEE INITIALLY WAS REPRESENTED BY SH. S.C.JAIN, CA THEREAFTER ON 12.12.2011 BY SH. RA JEEV KUMAR, CA. ADDITION OF RS.15 LACS WAS MADE BY THE AO BY AN ORDER DATED 29. 12.2011 U/S 143(3) HOLDING AS UNDER:- 2. ON 12.12.2011 SHRI RAJIV KUMAR, CA ATTEN DED THE PROCEEDINGS AND FILED POWER OF ATTORNEY AND ON ADJOURNED DATE ON 15 .12.2012 FILED WRITTEN SUBMISSION AND DURING THE COURSE OF CONFRONTATION T HE COUNSEL OF THE ASSESSEE STATED THAT THE PROPERTY IN QUESTION OF PU RCHASED JOINTLY WITH HIS WIFE AS PER COPY OF DEED FILED AND DISCLOSED THE SO URCE OF INVESTMENT. AS REGARDS SOURCE OF INVESTMENT MADE IN THE PROPERTY B Y HIS WIFE, SOURCE OF INCOME COULD NOT BE FURNISHED AND SEEMS TO BE COLOU RABLE DEVICE TO EXPLAIN THE SOURCE OF INVESTMENT IN PROPERTY. FOR SOURCE OF RS.7,50,000/- CASH, PAGE 2 OF 4 INVESTMENT BY ASSESSEE, IT IS STATED THAT IT IS OUT OF PAST SAVINGS AND CURRENT YEARS INCOME/CAPITAL. HOWEVER, THE AVERMENT HAS NOT BEEN SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THE EVIDENCE OF NEITHER O PENING CAPITAL NOR CURRENT CAPITAL HAS BEEN FURNISHED. IT IS STATED IN THE REPLY THAT 'DETAILS OF WORKING OF AVAILABILITY OF THIS CASH OF RS.7,50,000 /- IS ASSESSED' BUT NO SUCH ANNEXURE HAS BEEN ENCLOSED. HENCE, THE ARGUMENTS PU T FORTH BY THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH PAYMENT OF R S.15,00,000/-PLUS STAMP DUTY RS.2,35,000/- PLUS REGISTRATION CHARGES RS.10,000/- ARE NOT SUBSTANTIATED AND REMAIN UNEXPLAINED. CONSIDERING T HE REPLY OF THE ASSESSEE AND CONFRONTATION DURING THE COURSE OF PRO CEEDINGS AN ADDITION OF RS.15,00,000/-IS MADE IN HIS INCOME. (ISSUE PENALTY NOTICE U/S 271(L)(C) SEPARATELY) ADDITION OF RS.15,00,000/- THE INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- NET INCOME AS SHOWN RS.184410/- ADD: AS PER PARA-2 ABOVE. RS.15,00,000/- TOTAL INCOME RS.1684410/-' ASSESSMENT FOR A.Y. 2009-10 IS COMPLETED ON THE INC OME OF RS.1684410/- AGAINST RETURNED INCOME OF RS.184410/-. ISSUE NOTIC E OF DEMAND AND CHALLAN. CHARGE INTEREST U/S 234A/B/C AS PER RULE. ISSUE PENALTY NOTICE U/S 271(L)(C) & 271(L)(B). 3. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE SUBMITTED THAT THE PURCHASE OF THE SAID PROPERTY HAD BEEN FINANCED BY A HOUSING LOAN OF RS.20 LACS. THE HOUSE WAS PURCHASED IN THE JOINT NAME ALONGWITH HIS WIFE SMT. MUNESH. IT WAS ACCEPTED THAT PAYMENT OF RS.15 LACS WAS MADE IN CAS H HOWEVER, THE ASSESSEE PAID ONLY RS. 7.5 LACS FROM AVAILABLE SOURCES AND THE RE MAINING 50% WAS PAID BY HIS WIFE WHO TOO WAS A TAX PAYER OVER THE YEARS I.E. F.Y. 20 02-03 ONWARD. HER SHARE OF THE PAYMENT WAS MADE BY HER SAVINGS OUT OF HER INCOME A ND STRIDHAN ETC. APART FROM THAT IT WAS ALSO ARGUED THAT SINCE BOTH THE HUSBAND AND WIFE WERE RUNNING PETTY BUSINESS AND CONTINUOUSLY FILED INCOME TAX RETURNS AND AS PE R CHART FILED AND HAD BEEN REGULARLY MAKING DRAWINGS FOR EXPENSES OVER TEN YEARS AND ALS O HAD SAVINGS IN THE FORM OF CASH OF THE ASSESSEE AND HIS WIFE FROM FY 2001-02 TILL FY 2007-08. THE SUPPORTING EVIDENCES WERE CLAIMED TO HAVE BEEN ATTACHED IN SUP PORT OF THE EXPLANATION BEFORE THE CIT(A) RELYING ON WHICH IT WAS SUBMITTED THAT THE I NVESTMENT WAS THUS FULLY EXPLAINED. HOWEVER, THE ARGUMENTS AND SUBMISSIONS DID NOT FIND FAVOUR WITH THE CIT(A). AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 4. LD.AR ASSAILED THE CONCLUSION OF THE CIT(A) STAT ING THAT THE EXPLANATION HAS BEEN ARBITRARILY REJECTED AND IGNORING THE FACT THA T ADMITTEDLY BOTH THE HUSBAND AND THE WIFE HAVE REGULARLY BEEN ASSESSED TO TAX OVER THE YEARS. THUS THE INSISTENCE OF THE DEPARTMENT TO SUSTAIN THE ENTIRE ADDITION IN THE HA NDS OF THE ASSESSEE IT WAS SUBMITTED IS NOT JUSTIFIED. PART OF THE INVESTMENT IT WAS SU BMITTED HAS BEEN MADE BY THE ASSESSES WIFE WHO IS ON INDEPENDENT ASSESSEE IN HER OWN RIGH T. 5. LD.SR. DR RELIED UPON THE IMPUGNED ORDER. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE PECULIAR FACTS AND CIRCUM STANCES OF THE CASE, I FIND THAT THE LD. CIT(A) HAS FAILED TO GIVE ANY FINDING WHATSOEVE R AS TO WHY THE EXPLANATION OF THE ASSESSEE THAT HALF THE FUNDS FOR MEETING THE COST O F INVESTMENT OF RS.7. 50 LACS WAS FINANCED BY HIS WIFE SHOULD NOT BE ACCEPTED. ADMITT EDLY THE ASSESSEE CONSISTENTLY HAS PAGE 3 OF 4 TAKEN THE STAND THAT THE RESIDENTIAL HOUSE WAS JOIN TLY PURCHASED BY THE HUSBAND AND THE WIFE. THE RECORD SHOWS THAT IN SUPPORT OF THE CLAIM THE ASSESSEE HAS SUBMITTED THE EVIDENCE TO SHOW THAT HIS WIFE HAS ALSO BEEN A TAXP AYER FOR ALMOST 5 YEARS PRIOR TO THE PURCHASE OF THIS HOUSE. ON A CONSIDERATION OF THE F INDINGS OF THE LD. CIT(A), IT IS SEEN THAT THE ASSESSEES WIFE SMT.MUNESH WAS ALSO RETURN ING INCOME FROM PETTY BUSINESS AND THIS FACT HAS BEEN ACCEPTED BY THE LD.CIT(A) AL SO. IT IS A FACT THAT THE BANK BEFORE ADVANCING THE LOAN NECESSARILY HAS SEEN THE ASSESSE E AND HIS WIFES CAPACITY TO REPAY BACK THE LOAN WITH INTEREST OVER THE YEARS BASED ON THEIR LIQUIDITY POSITION AND PAST SAVINGS. HOWEVER THE CIT(A) HAS DOUBTED THE FACT AS TO HOW THE CONCERNED LADY COULD HAVE SUCH HIGH SAVINGS TO THE EXTENT CLAIMED. IT IS PRESUMED BY HIM BASED ON NO FACT THAT THE DRAWINGS AND SAVINGS NECESSARILY MUST HAVE BEEN SPENT ELSEWHERE. HOWEVER NO MATERIAL HAS BEEN RELIED UPON TO DISMISS THE CLA IM OF THE ASSESSEE. IT IS SEEN THAT THE FINDING UNDER CHALLENGE MAKES NO REFERENCE TO A NY SUPPORTING FACT OR EVIDENCE AND THUS IS OPEN TO THE CHALLENGE OF BEING ARBITRARY AN D THUS UNSUSTAINABLE. I AM OF THE VIEW THAT THE EXPLANATION OFFERED CONSISTENTLY BEFORE TH E TAX AUTHORITIES SUPPORTED BY EVIDENCE SHOULD HAVE BEEN CONSIDERED KEEPING IN MIN D THE SOCIO-ECONOMIC REALITIES AND ASPIRATIONS OF A LOWER MIDDLE-CLASS OR MIDDLE-C LASS INDIAN FAMILY TO PURCHASE AND OWN AT LEAST ONE RESIDENTIAL HOUSE DURING THEIR LIF E TIME. THE EMOTIONAL DECISION TAKEN TO FULFILL THIS OVERWHELMINGLY COMPELLING NEED OF OWNI NG AT LEAST ONE FAMILY RESIDENTIAL HOUSE AT TIMES IS OFTEN NOT A DECISION BASED ON SOU ND PRUDENT FINANCIAL PLANNING. LIKE DECISIONS OF INDIAN FAMILIES OFTEN TO RASHLY OVERSP END ON MARRIAGES OF CHILDREN AS A STATUS SYMBOL TO IMPRESS THE SOCIETY. THE DECISION TO BUY A FAMILY HOME ARE EQUALLY EMOTIONAL DECISIONS DRIVEN BY FAMILY PRIDE. THE RE ALITY OF THIS SOCIAL DICTUM OF FALSE STATUS BOOSTING FAMILY PRIDE CAN BE WELL UNDERSTOOD IN THE CONTEXT OF THE SOCIAL MILEU WHERE REPEATEDLY INDIAN FAMILIES, AT TIMES WILLINGL Y STILL PUT THEMSELVES IN CRIPPLING FINANCIAL INDEBTEDNESS AGAINST ALL SOUND FINANCIAL ADVISE TOWARDS THIS SO CALLED NECESSARY WISH FULFILLMENT. THE TAX AUTHORITIES CAN NOT BLINDLY DICTATE WHAT THE EARNING COUPLE SHOULD NECESSARILY SAVE, THE TAX AUTHORITIES ARE EXPECTED TO BE ALIVE TO THE NEEDS AND EXPECTATIONS OF ASPIRATIONAL INDIA WHERE BOTH S POUSES ARE WILLING TO EARN AND SAVE MAKING SACRIFICES ON A PERSONAL LEVEL IN ORDER TO C ONTRIBUTE TO FULFILLING THEIR LIFES DREAM OF OWNING A FAMILY HOUSE. THE WIFE TOO CAN BE AN EQ UAL CONTRIBUTER FROM HER OWN LIFE SAVINGS AND EARNINGS. IN SUCH A SCENARIO, THE EXPLA NATION OFFERED THAT THE WIFE WHO ADMITTEDLY WAS A TAXPAYER FOR OVER 5 YEARS AND AS P ER THE CONSISTENT EXPLANATION BEFORE THE TAX AUTHORITIES, SHE ACCEPTED AND ACKNOWLEDGED THAT SHE GAVE HER ENTIRE LIFE SAVINGS INCLUDING STRIDHAN, SHOULD HAVE BEEN CONSID ERED AND ACCEPTED KEEPING THE REALITIES OF THE SOCIAL MILEU TO WHICH THE TAXPAYER BELONGED. IF THE EXPLANATION STILL HAD TO BE REJECTED IT SHOULD HAVE BEEN REJECTED ON FACTS A ND EVIDENCES. THE EXPLANATION COULD NOT HAVE BEEN OUTRIGHTLY REJECTED WITHOUT ASCRIBING ANY REASONS WHATSOEVER. ON CONSIDERATION OF THE MATERIAL AVAILABLE ON RECORD, I FIND THAT THE EXPLANATION OF THE TAXPAYER THAT HALF OF THE AMOUNT WAS PAID BY HIS WI FE WHERE SHE WAS AN INDEPENDENT TAXPAYER IN HER OWN RIGHT DESERVES TO BE ACCEPTED A ND CONSEQUENTLY THE ASSESSEE IN THOSE PECULIAR FACTS AND CIRCUMSTANCES CANNOT BE SA DDLED WITH THE ADDITION OF RS. 7.50 PAGE 4 OF 4 WHICH HAS BEEN OWNED UP BY THE WIFE; THE PROPERTY A S PER RECORD IS IN THE JOINT NAME OF THE HUSBAND AND WIFE AND THE BANK LOAN IS ALSO IN T HEIR JOINT NAME. ACCORDINGLY THE EXPLANATION THAT THE WIFE CONTRIBUTED RS. 7.50 LACS FROM HER PAST SAVINGS AND HER STRIDHAN IS ACCEPTED. QUA THE REMAINING AMOUNT OF R S. 7.50 LACS REMAND IS DIRECTED AND THE ISSUE IS SET ASIDE BACK TO THE FILE OF THE LD. CIT(A). THE CIT(A) IS DIRECTED TO EXAMINE THE TAXPAYERS CLAIM IN REGARD TO THE PAYME NT OF RS.7.50 LACS BY THE ASSESSEE WHICH IS STATED TO BE FROM HIS PAST SAVINGS. ACCORD INGLY, THE IMPUGNED ORDER TO THIS LIMITED EXTENT IS SET ASIDE BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER CONSIDE RING THE ASSESSEES EXPLANATION TO THE EXTENT OF RS.7.50 LACS AS THE EXPLANATION QUA H IS WIFE FOR THE REMAINING PORTION FOR THE REASONS GIVEN HEREINABOVE IS ACCEPTED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08 TH MAY 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* (DELHI) / AG(CHANDIGARH) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT