SMT. SUNAINA SHARMA (BAIRAGI), Dewas V. THE ITO, Dewas

ITA 633/IND/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5966 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 02-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE
• Keywords: Income from undisclosed sources
• Section: 148

Judgement Text

SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL ME MBER ITA NOS. 633 & 634/IND/2015 A.YS.2007-08 & 2008-09 SMT. SUNAINA SHARMA (BAIRAGI) DEWAS PAN BQTPS 7816N ::: APPELLANT VS INCOME TAX OFFICER DEWAS ::: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI MOHD.JAVED DATE OF HEARING 20.6.2016 DATE OF PRONOUNCEMENT 2 0 .6.2016 O R D E R THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST DIFFERENT ORDERS DATED 30.6.2015 OF THE LD. CI T(A), UJJAIN. SINCE THE GROUNDS OF APPEAL ARE CONNECTED IN BO TH THE APPEALS, THE SAME ARE DISPOSED OFF BY THIS CONSOLID ATED ORDER FOR THE SAKE OF CONVENIENCE. SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 2 2. FOR THE A.Y. 2007-08, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 6,33,053/- ON ACCOUNT OF THE OPENING CAPITAL AND TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. SIMILARLY, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 3,78,803/- FOR THE A.Y . 2008-09 ON THE GROUND THAT THERE IS A DIFFERENCE IN T HE OPENING CAPITAL. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM COACHING CLASSES AND INTEREST INCOME BESIDES THE AGRICULTURAL INCOME. NO RETURNS WERE FILED BY THE ASSESSEE. ON THE BASIS OF THE INFORMATION IN RESPECT O F THE BANK DEPOSITS THE NOTICES U/S 148 WERE ISSUED AND THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE INCOME OF RS. 1,32,847/- PLUS AGRICULTURAL INCOME OF RS. 60,000/- FOR A.Y. 2007-08 AND RS. 2,31,236/- PLU S AGRICULTURAL INCOME OF RS. 20,000/- FOR A.Y. 2008-09. SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 3 THE ASSESSEE DISCLOSED THE OPENING CAPITAL OF RS.11,49,720/- FOR THE A.Y. 2007-08 WHICH INCLUDED THE AGRICULTURAL LAND OF RS. 2,00,000/-, FURNITURE OF RS.1,66,667/-, JEWELLERY OF RS. 1,00,000/- AND HOME APPLIANCES OF RS. 50,000/- BESIDES THE OTHER CURRENT ASSETS OF RS. 6,36,053/-. FOR THE A.Y. 2008-09 THE OPENING CAPITAL WAS SHOWN AT RS. 30,33,606/-. HOWEVER, DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ON THE BASIS OF THE EARLIER BALANCE SHEET THE ASSESSEE REVISED THE OPENING CAPITAL AT RS.26,14,678/-. 4. WHILE PASSING THE ORDER, THE LD AO MADE THE ADDITION OF RS. 6,36,053/- ON THE GROUND THAT THE ASSESSEE HAS NOT PROVED THE ACCUMULATION OF THE CAPITAL TO THE EXTENT OF RS. 6,36,053/-. HE ACCEPTED T HE INVESTMENT IN THE AGRICULTURAL LAND, JEWELLERY, HOUSEHOLD GOODS AND FURNITURE OF RS. 5,16,667/-. SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 4 WHILE PASSING THE ORDER THE ASSESSING OFFICER FURTHE R HELD THAT THE INCOME SHOWN IN THE RETURN AND THE AGRICULTURAL LAND WOULD BE TAXED AS INCOME FROM UNDISCLOSED SOURCES SINCE, THE ASSESSEE DID NOT FILE THE RETURNED INCOME WITHIN THE STIPULATED TIME. HE ACCORDINGLY DETERMINED THE INCOME OF THE RETURN AT NI L. 5. BEING AGGRIEVED WITH THE DISALLOWANCES MADE BY THE ASSESSING OFFICER, THE ASSESSEE APPROACHED THE LEARNED CIT(A) WHO DID NOT ACCEPT THE CONTENTION OF T HE ASSESSEE AND DISMISSED THE SAME. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD BOTH THE SIDES. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFI CER. THE LD. COUNSEL STATED THAT THE ASSESSEE IS AN EDUCATED LADY AND HAS DONE HER M. PHIL IN ENGLISH LITERATURE AND WAS CONDUCTING THE ENGLISH CLASSES AND SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 5 WAS EARNING THE INCOME. SHE WAS ALSO WORKING AS A VISITING LECTURER ON A SALARY OF ABOUT RS. 4,000/- TO R S. 6,000/- P.M. AND STATED THAT THE CERTIFICATES FROM THE GOVERNMENT COLLEGES ARE ENCLOSED FROM PAGES 21 TO 23 OF PB. SHE HAD ALSO PUBLISHED THE ADVERTISEMENT IN THE PAPER ABOUT THE ENGLISH CLASSES WHICH EARNED THE INCOME. THUS HE STATED THAT THE OPENING CAPITAL SHOWN IS QUITE REASONABLE AND STANDS PROVED. HE FURTHER SUBMITTED THAT THE LD.AO HAS ERRED IN TREATING THE AGRICULTURAL INCOME AS UNDISCLOSED INCOME. THE ASSESSEE HELD 6 ACRES OF LAND AND THE AGRICULTURE HOLDING HAS BEEN ACCEPTED BY THE AO. THEREFORE, THE AGRICULTURAL INCOME SHOULD HAVE BEEN ACCEPTED BY THE LOWER AUTHORITIES. FOR THE A. Y. 2008-09, THE AO SUBMITTED THAT THE CAPITAL DISCLOSED IN THE LAST BALANCE SHEET BECOMES AN OPENING CAPITAL AND THE SAME HAS SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 6 BEEN DISCLOSED IN THE REVISED BALANCE SHEET AND AS SUCH NO ADDITION CAN BE MADE ON THIS ACCOUNT. 7. ON THE OTHER HAND, THE LD DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE HEARD BOTH THE SIDES. THE ASSESSING OFFICE R HAS ACCEPTED THE OPENING CAPITAL OF RS. 5,16,667/- AS GENUINE. THOUGH THE ASSESSEE HAS STATED THAT SHE HAS EARNED INCOME FROM THE TUITION AND SALARY FROM THE GOVERNMENT, THERE IS NO PROOF FOR THE SAVING MADE BY HER AND AS SUCH THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2007-08 IS UPHELD. 9. HOWEVER, THE AGRICULTURAL INCOME SHOWN BY TH E ASSESSEE HAS TO BE CONSIDERED SINCE THE ASSESSING OFFICER HAS ACCEPTED THE INVESTMENT IN AGRICULTURAL LAND WHICH HAS BEEN PURCHASED IN THE YEAR 2002. THE ASSESSEE HAS SHOWN THE AGRICULTURAL INCOME OF SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 7 RS.60,000/- FOR THE ASSESSMENT YEAR 2007-08 AND OF RS. 20,000/- IN THE ASSESSMENT YEAR 2008-09. I FIND THAT SINCE THE AGRICULTURAL INCOME HAS BEEN CREDITED IN THE CAPITAL ACCOUNT AND THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE ON ESTIMATE BASIS, THEREFORE, I RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS.30,000/ - AND RS.10,000/- AS AGRICULTURAL INCOME IN THE ASSESSMENT YEARS 2007-08 AND 2008-09, RESPECTIVELY. 10. FOR THE A.Y. 2008-09, THE ADDITION IS MADE O N THE HYPOTHETICAL GROUNDS ABOUT THE DIFFERENCE IN THE OPENING CAPITAL. IN THE REVISED CAPITAL THE ASSESSEE HAS SHOWN THE OPENING BALANCE AS DISCLOSED IN THE BALANCE SHEET FOR THE EARLIER YEAR. IN THE EARLIER YEAR THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF THE CLOSING BALANCE AND AS SUCH THERE IS NO JUSTIFICATION FOR MAKING THE ADDITION OF RS. 3,78,803/- FOR THE SMT.SUNAINA SHARMA ITA NOS. 633 & 634/IND/2015 8 DIFFERENCE IN THE CAPITAL ACCOUNT. THE SAID ADDITION IS, THEREFORE, DELETED. 11. IN THE RESULT, THE APPEALS OF THE ASSESSEE STANDS PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 20 JUNE, 2016 SD/- (D.T. GARASIA) JUDICIAL MEMBER 20 JUNE, 2016 DN/-