Sh. Garima Gupta, Jalandhar V. The Income-tax Officer, Jalandhar

ITA 653/ASR/2014

• Counselvise Citation: 65320914 RSA 2014
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR RATINDER KAUR
• Assessee Lawyers: J S BHASIN
• Keywords: Principle of natural justice
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.653(ASR)/2014 ASSESSMENT YEAR:2009-10 PAN: ABCPG2060P SMT. GARIMA GUPTPA, VS. INCOME TAX OFFICER, JALANDHAR. WARD-II(1), JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.J.S.BHASIN, ADV. RESPONDENT BY:DR.RATINDER KAUR, DR DATE OF HEARING: 21/09/2015 DATE OF PRONOUNCEMENT: 27/11/2015 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2009-10, AGAINST THE ORDER DATED 01.09.2014 PASSED BY THE L D. CIT(A), JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,50,000/- MADE BY THE AO. 2. THAT THE LD. CIT(A) HAS ERRED IN REJECTING THE C ONTENTION OF THE APPELLANT THAT THE MANNER IN WHICH ADDITION OF RS.5,50,000/- HAS BEEN MADE BY THE AO IS AGAINST TH E PRINCIPLES OF NATURAL JUSTICE. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,50,000/- WHICH WAS MADE BY THE AO MERELY BASED ON SURMISES AND CONJECTURES. 4. THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN N OT APPRECIATING THE FACTS AND THE CIRCUMSTANCES IN WHI CH THE AMOUNT OF RS.5,50,000/- WAS RECEIVED BY THE APPELLA NT. ITA NO. 653/ASR/2014 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL WHOSE MAIN SOURCE OF INCOME IS INTEREST INCOME ON DEPOSITS. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASS ESSMENT YEAR UNDER CONSIDERATION ON 17.07.2009 DECLARING TOTAL INCOME AT RS.3,14,310/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAD NOTICED THAT THERE WAS A CREDIT OF RS.5,50,000/- ON 25.11.2008 B Y WAY OF CHEQUE DEPOSITED IN THE S.B. A/C NO.00461000178369 OF THE ASSESSEE WITH HDFC BANK, G.T.ROAD, JALANDHAR. THE AO ASKED THE AS SESSEE TO EXPLAIN SOURCES OF DEPOSITS IN HER BANK ACCOUNT. IN RESPONS E, THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.5,50,000/- WAS REC EIVED AS ADVANCE FROM ONE SH. SUKHWINDER SINGH TOWARDS SALE OF PLOT NO. 220 ATWAL COLONY, JALANDHAR OWNED BY HER. HOWEVER, TO JUSTIFY HER STAND, A CERTIFICATE FROM SH.SUKHWINDER SINGH ON A PLAIN PA PER WAS FILED. THE ASSESSEE HAS ALSO FILED A COPY OF CERTIFICATE OBTAI NED FROM THE BANK WHEREIN IT HAS BEEN STATED THAT THE AMOUNT OF RS.5, 50,000/- HAS BEEN DEBITED TO SH. SUKHWINDER SINGHS ACCOUNT. NO OTHE R DETAILS OR EVIDENCE IN THE FORM OF REGISTERED SALE DEED OR AGREEMENT TO CELL, ETC., WAS FILED BY THE ASSESSEE INSPITE OF REPEATED REQUESTS BY THE AO . THE SALE PRICE SETTLED BETWEEN THE ASSESSEE AND THE PURCHASER HAS ALSO NOT BEEN MENTIONED. THE AO WAS OF THE OPINION THAT THE ASSES SEE HAS FAILED TO ESTABLISH THE IDENTITY OF SH. SUKHWINDER SINGH, HI S CREDITWORTHINESS AND GENUINENESS OF TRANSACTION WITH DOCUMENTARY EVIDENC E. ACCORDINGLY, HE MADE AN ADDITION OF RS.5,50,000/- TO THE RETURNED I NCOME OF THE ITA NO. 653/ASR/2014 3 ASSESSEE U/S 69 OF THE ACT BY TREATING THE DEPOSIT FROM UNEXPLAINED SOURCES, SINCE THE ASSESSEE FAILED TO DISCLOSE THIS INCOME IN HER RETURN OF INCOME. 3. THE LD. CIT(A) CONFIRMED THE ADDITION. 4. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE AO ON SURMISES AND CONJECTURES. HE FURTHER STATED THAT THE AO SHOULD HAVE DEPUTED HIS INSPECTOR OR EXERCISED HIS POWERS UNDER THE ACT TO ASCERTAIN THE FACTS OF THE CREDIT BEFORE MAKING THE ADDITION. HE FURTHER SUBMITTED THAT THE MANNER IN WHICH THE ADDITION HAS BEEN MADE BY THE A O IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND REQUESTED THAT TH E CASE BE RESTORED TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH. THE L D. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION O F ITAT, AGRA BENCH (TM), IN THE CASE OF UMESH ELECTRICALS VS. ACIT, 131 ITD 127. 5. THE LD. DR, ON THE OTHER HAND, PLACED STRONG REL IANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 6. HAVING CONSIDERED THE RIVAL CONTENTIONS, I AM OF THE CONSIDERED THE VIEW THAT THE ISSUE IN QUESTION IS LIABLE TO BE RES TORED TO THE FILE OF THE AO. THE ASSESSEE HAS MAINTAINED THAT THE AMOUNT OF RS.5,50,000/- WAS RECEIVED BY HER FROM ONE SH. SUKHWINDER SINGH, TOWA RDS SALE OF THE PLOT OWNED BY HER. SHE FILED A CERTIFICATE FROM SH. SUKH WINDER SINGH. THIS CERTIFICATE HAS NOT BEEN CONSIDERED. THE ASSESSEE ALSO FILED A CERTIFICATE ITA NO. 653/ASR/2014 4 FROM THE BANK, STATING THAT THE AMOUNT IN QUESTION HAD BEEN DEBITED TO THE ACCOUNT OF SH.SUKHWINDER SINGH. THIS CERTIFICA TE WAS FROM THE SBI, NRI BRANCH, JALANDHAR. THE ASSESSEE STATED THAT SHE WAS NOT AWARE AS TO WHETHER THE SAID SH.SUKHWINDER SINGH WAS AN NRI OR NOT. THE AO COULD WELL HAVE ASCERTAINED THIS POSITION BY EXERCI SING HIS POWERS UNDER THE I.T. ACT. HOWEVER, FOR THE REASON BEST KNOWN TO THE AO, IT WAS NOT SO DONE. THE ASSESSEE HAD MADE A SPECIFIC REQUEST BEFO RE THE AO TO GET THE FACTS REGARDING THE CREDIT ASCERTAINED BY VISITING THE PLOT. THE ASSESSEE ALSO FILED AN AFFIDAVIT IN SUPPORT OF THE STATED FA CTS. THIS WAS LIGHTLY BRUSHED ASIDE. 7. NOW, IN CIT VS. SMT. P.K. NOORJAHAN, 237 ITR 570 (SC), THE TRIBUNAL HAD HELD THAT THE TAXING AUTHORITY HAD NOT EXERCISED HIS DISCRETION IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE , AS THE INCOME OF THE ASSESSEE, TAKING INTO ACCOUNT THE CIRCUMSTANCES IN WHICH THE ASSESSEE WAS PLACED. THE HIGH COURT HAD AGREED WITH THE VI EW OF THE TRIBUNAL. THE HONBLE SUPREME COURT FOUND NO ERROR IN THE FIN DING RECORDING BY THE TRIBUNAL. IT WAS HELD THAT THE AO IS NOT OBLIGE D TO TREAT SOURCE OF INVESTMENT AS INCOME IN EVERY CASE WHERE THE EXPLAN ATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY AND THAT T HIS HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF THE PARTICU LAR CASE. HERE IN, THE AO FINDING THE EXPLANATION OF THE ASSESSEE TO BE NOT S ATISFACTORY OUGHT TO ITA NO. 653/ASR/2014 5 HAVE EXAMINED THE MATERIAL PLACED BEFORE HIM BY CAR RYING OUT THE INVESTIGATION HIMSELF. 8. IN UMESH ELECTRICALS VS. ACIT (SUPRA), IT WAS HELD THAT BEFORE THE AO FORMS AN OPINION, HE MUST CONSIDER THE MATERIAL BEFORE HIM. IF HE HAS BEFORE HIM THE MATERIAL SUBMITTED BY THE ASSESSEE WHILE GIVING AN EXPLANATION, THEN HE MUST COLLECT HIS OWN MATERIAL AS AN ENQUIRY OFFICER, WEIGH THE TWO MATERIALS AS A QUASI-JUDICIAL AUTHORI TY FORM AN OPINION AS TO WHETHER THE EXPLANATION FURNISHED BY THE ASSESSE E IS SATISFACTORY OR NOT. IF THE AO DOES NOT APPLY HIS MIND IN EXAMINING THE DOCUMENTS FURNISHED BY THE ASSESSEE AND DOES NOT FIND ANY SUB STANTIVE ERROR IN THEM NOR HE COLLECTS ANY MATERIAL BY EXERCISING POW ERS UNDER THE INCOME TAX ACT, THEN THE CLAIM OF THE ASSESSEE CANNOT BE S TRAIGHTWAY REJECTED. IF HE DOES, IT WOULD BE A VIOLATION OF PRINCIPAL OF N ATURAL JUSTICE AND PROVISIONS OF SECTION 68 OF THE ACT. AS DISCUSSED, HEREIN, THE AO HAS NEITHER PROPERLY EXAMINED THE MATERIAL PLACED BEFOR E HIM, NOR ACCEDED TO THE ASSESSEES REQUEST OF CARRYING OUT PERSONAL I NVESTIGATION BY VISITING THE PLOT. 9. ACCORDINGLY, THIS MATTER IS REMITTED TO THE FIL E OF THE AO TO BE DECIDED AFRESH, IN ACCORDANCE WITH LAW, ON OBJECTIV ELY CONSIDERING THE MATERIAL PLACED BY THE ASSESSEE BEFORE HIM AND CARR YING OUT INVESTIGATION FROM THE BANK OR ALLEGED SH.SUKHWINDER SINGH AND BY VISITING THE PLOT AND ASCERTAINING THE POSITION HIMSELF. THE ASSESSEE SHALL BE PROVIDED ITA NO. 653/ASR/2014 6 PROPER AND ADEQUATE OPPORTUNITY OF HEARING AND THE ASSESSEE SHALL CO- OPERATE IN THE PROCEEDINGS BEFORE THE AO. 10. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH NOV EMBER, 2015. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 27/11/2015 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SMT. GARIMA GUPTA, S-117, FOCAL POI NT EXTN. JALANDHAR. 2. THE ITO, WARD II(1), JALANDHAR 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR. 5. THE SR. DR, ITAT, ASR.