Ms. Yukti Tiwari, Lucknow V. Income Tax Officer, Range- 4(5), Lucknow

ITA 660/LKW/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3613 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 06-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C. K. SINGH
• Assessee Lawyers: DHARMENDRA KUMAR
• Section: 69; 143(3); 69A; 22

Judgement Text

I.T.A. NO.660/LKW/2018 ASSESSMENT. YEAR:2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.660/LKW/2018 ASSESSMENT YEAR:2015-16 MS. YUKTI TIWARI, B-55, SOUTH CITY, RAEBARELI ROAD, LUCKNOW. PAN:ALLPT 7053 L VS. INCOME TAX OFFICER, RANGE-1(5), LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A)-2, LUCKNOW DATED 24/09/2018. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. LD.CIT(A) FAILED TO CONSIDER THE FACTS IN RIGHT PERSPECTIVE, ACCORDINGLY APPEAL SHOULD HAVE BEEN ALLOWED. 2. THAT LD. LOWER AUTHORITY FAILED TO FOLLOW THE IN STRUCTION NO.5/2016, DATED 14-07-2016, HENCE ASSESSMENT UPHEL D BY LD.CIT(A) IS ILLEGAL AND WITHOUT JURISDICTION. 3. THAT APPELLANT'S CASE WAS SELECTED THROUGH CASS FOR 'LIMITED SCRUTINY', WHEREAS, AO WAS NOT CONFINED ON LY TO ISSUES UNDER 'LIMITED SCRUTINY'. HE MADE ASSESSMENT BEYOND THE ISSUES FOR EXAMINATION UNDER 'LIMITED SC RUTINY' WITHOUT OBTAINING APPROVAL FROM HIGHER AUTHORITIES, AS PRESCRIBED IN INSTRUCTION NO.5/2016, ACCORDINGLY, ASSESSMENT ORDER PASSED BY AO IS ILLEGAL, ARBITRARY AND WITHOUT JURISDICTION. APPELLANT BY SHRI DHARMENDRA KUMAR, C. A. RESPONDENT BY SHRI C. K. SINGH, D.R. DATE OF HEARING 15/02/2019 DATE OF PRONOUNCEMENT 22 / 02/2019 I.T.A. NO.660/LKW/2018 ASSESSMENT. YEAR:2015-16 2 4. THAT LD.AO WITHOUT POINTING OUT SINGLE DEFECTS I N BOOKS OF ACCOUNT AND RECORDS OF APPELLANT AND WITHOUT REJECT ING THE BOOKS OF ACCOUNT, ASSESSED THE INCOME OF APPELLANT UNDER SECTION 69 A OF THE ACT AND THAT TOO UNDER THE PROV ISIONS OF SECTION 143(3) OF THE ACT, HENCE ASSESSMENT UNDE R QUESTION IS ILLEGAL, ARBITRARY AND WITHOUT JURISDIC TION. 5. THAT SINCE APPELLANT RECORDED THE ENTIRE TUITION FEES IN HER BOOKS OF ACCOUNT, HENCE PROVISIONS OF SECTION 69 A OF THE ACT IS NOT APPLICABLE IN CASE OF APPELLANT, ACCORDI NGLY ASSESSMENT OF TUITION RECEIPT UNDER SECTION 69 A OF THE ACT, WHICH IS ALREADY SHOWN BY APPELLANT IN HER 'PR OFIT & LOSS ACCOUNT' IS ILLEGAL, AGAINST THE FACTS AND WIT HOUT JURISDICTION. 6. THAT LD. AO RELIED UPON THE 'INSPECTOR REPORT' W ITHOUT CONFRONTING THE SAME TO THE APPELLANT; HENCE 'INSPE CTOR REPORT' HAS NO EVIDENTIARY VALUE. 7. THAT THE APPELLANT SEEKS PERMISSION TO MODIFY AN D/OR ADD ANY OTHER GROUND OR GROUNDS OF APPEAL AS THE CIRCUMSTANCES OF THE CASE MIGHT REQUIRE OR JUSTIFY. 8. THAT THE ASSESSMENT, MADE BY THE LEARNED ASSESSI NG OFFICER ARE ARBITRARY, BAD IN LAW AND AGAINST EQUIT Y, JUSTICE AND GOOD CONSCIOUS AND DESERVE TO BE CANCELLED. 2. THE BRIEF FACTS, AS NOTED IN THE ASSESSMENT ORDE R, ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 20/01/2017 DECLA RING TOTAL INCOME AT RS.5,67,490/-. THE CASE OF THE ASSESSEE WAS SELECT ED THROUGH CASS FOR LIMITED SCRUTINY FOR THE VERIFICATION AS TO WHETHER THE CASH DEPOSITED HAVE BEEN MADE FROM DISCLOSED SOURCES AND THEREFORE, THE NECESSARY QUERY WAS RAISED TO THE ASSESSEE. THE ASSESSING OFFICER FURT HER NOTED IN THE ASSESSMENT ORDER THAT IT WAS INFORMED TO THE ASSESS EE THAT THE REASON FOR SELECTION OF SCRUTINY WAS TO EXAMINE AS TO WHETHER CASH DEPOSIT MADE BY THE ASSESSEE DURING DEMONETIZATION PERIOD I.E. 9 TH NOVEMBER, 2016 TO 30 DECEMBER, 2016 WAS MADE FROM DISCLOSED SOURCES OR N OT. IN HER REPLY, THE ASSESSEE SUBMITTED THAT SHE WAS RENDERING TUITIONS TO STUDENTS FROM FINANCIAL YEAR 2013-14 TO 2016-17. THE ASSESSING O FFICER HOWEVER OBSERVED THAT THE ASSESSEE WAS NOT ABLE TO GIVE EVIDENCE OF THE PROFESSION OF THE I.T.A. NO.660/LKW/2018 ASSESSMENT. YEAR:2015-16 3 ASSESSEE. HOWEVER, HE TOOK NOTE OF THE RETURNS FIL ED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2014-15, 2015-16 AND 2016-17, W HICH WERE FILED ON THE SAME DATE I.E. 19/01/2017. THE ASSESSING OFFIC ER THEREFORE, ASSUMED THAT SINCE THE ASSESSEE HAD FILED THE RETURNS AFTER DECLARATION OF DEMONETIZATION AND ASSESSEE WAS NOT MAINTAINING ANY RECORDS RELATING TO EXPENSES AND INCOME OF TUITION AND THEREFORE, INSPE CTOR WAS DEPUTED TO INQUIRY ABOUT GENUINENESS OF THE PROFESSIONAL ACTIV ITIES OF THE ASSESSEE. THE INSPECTOR REPORTED THAT NO PROFESSIONAL ACTIVIT Y HAS BEEN FOUND AT THE HOME OF THE ASSESSEE THEREFORE, THE ASSESSING OFFIC ER, TAKING TO SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES, HELD THAT TH E ASSESSEE WAS NOT ENGAGED IN THE PROFESSIONAL ACTIVITIES. THEREFORE, HE MADE THE ADDITION U/S 69A FOR THE TOTAL AMOUNT OF GROSS RECEIPTS DECLARED BY THE ASSESSEE. THE GROSS RECEIPTS DECLARED BY THE ASSESSEE WERE TO THE TUNE OF RS.7,00,500/-. THE LEARNED CIT(A) ALSO DID NOT ACCEPT THE CONTENTI ON OF THE ASSESSEE AND UPHELD THE ADDITION. 3. LEARNED A. R. INVITED OUR ATTENTION TO THE FACT THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY FOR THE LIMITED PURPOSES OF EXAMINING AS TO WHETHER THE CASH DEPOSIT HAS BEEN MADE FROM UNDI SCLOSED SOURCES AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE ASSES SMENT ORDER ITSELF WHERE THE ASSESSING OFFICER HAD HIMSELF NOTED THE REASON FOR SELECTION OF THE CASE. LEARNED A. R. INVITED OUR ATTENTION TO THE REPLY FI LED BY THE ASSESSEE, PLACED AT PAGES 89, 90 & 91 OF THE PAPER BOOK WHERE THE AS SESSEE, VIDE VARIOUS REPLIES, HAD SUBMITTED THE REPLY. LEARNED A. R. FU RTHER INVITED OUR ATTENTION TO COPY OF BANK STATEMENT, PLACED AT PAGES 41 TO 51 OF THE PAPER BOOK WHERE THE COPY OF BANK ACCOUNT WAS PLACED. IT WAS SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEPO SITED ONLY RS.20,000/-, WHICH WAS ALSO DISCLOSED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND WAS ALSO DECLARED IN THE BALANCE SHEET OF THE ASSESSEE AND OUR ATTENTION WAS I.T.A. NO.660/LKW/2018 ASSESSMENT. YEAR:2015-16 4 INVITED TO PAGE 34 OF THE PAPER BOOK WHERE COPY OF BALANCE SHEET WAS PLACED. LEARNED A. R. SUBMITTED THAT ASSESSEE HA S EARNED A GROSS RECEIPT OF RS.7,00,500/- OUT OF WHICH SHE HAD INCURRED SOME EXPENDITURE AND HAD EARNED A NET PROFIT OF RS.6,47,487/- AND AFTER REDU CING THE DEDUCTION U/S 80C, SHE DECLARED THE NET INCOME AT RS.5,67,490/- A ND MY ATTENTION WAS INVITED TO PAGES 30-32 OF THE PAPER BOOK WHERE COPY OF BALANCE SHEET, COMPUTATION OF INCOME AND COPY OF PROFIT & LOSS ACC OUNT WAS PLACED. LEARNED A. R. SUBMITTED THAT THE ACTION OF THE ASSE SSING OFFICER IN MAKING ADDITION OF ENTIRE GROSS RECEIPT AMOUNTING TO RS.7, 00,500/- IS NOT JUSTIFIED AT ALL AND IT WAS FURTHER SUBMITTED THAT SECTION 69A T ALKS ONLY ABOUT ADDITION IF SOME ASSETS IS DETECTED OUTSIDE THE BOOKS OF ACCOUN T WHEREAS IN THE CASE OF THE ASSESSEE THE ASSESSEE HAD DECLARED THE TOTAL AM OUNT IN ITS BOOKS OF ACCOUNT THEREFORE, NOTHING WAS UNRECORDED. 4. LEARNED D. R., ON THE OTHER HAND, SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. I HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THR OUGH THE MATERIAL PLACED ON RECORD. I FIND THAT THE ASSESSING OFFICE R HIMSELF NOTED IN THE ASSESSMENT ORDER THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR EXAMINATION OF CASH DEPOSITS IN THE BANK ACCOUNT. HOWEVER, THE ASSESSMENT ORDER FURTHER RECORDS THAT THE PURPOSE O F EXAMINATION WAS ALSO TO EXAMINE THE DEPOSITS OF CASH DURING DEMONETIZATI ON PERIOD. ADMITTEDLY, THE DEMONETIZATION PERIOD WAS BETWEEN 6 TH NOVEMBER, 2016 TO 31 ST DECEMBER, 2016. THEREFORE, THE ADDITION, IF ANY, ON ACCOUNT OF DEMONETIZATION DEPOSITS IN THE BANK CAN ONLY BE MAD E IN THE ASSESSMENT YEAR 2017-18. I FURTHER FIND THAT ASSESSING OFFICE R HAS ASSUMED THAT ACTIVITIES OF THE ASSESSEE WERE NOT GENUINE AND THE REFORE, HAD MADE THE ADDITION OF THE ENTIRE GROSS RECEIPTS. ON THE ONE HAND HE IS AGREEING WITH THE GROSS RECEIPTS DECLARED BY THE ASSESSEE WHEREAS ON THE OTHER HAND HE IS I.T.A. NO.660/LKW/2018 ASSESSMENT. YEAR:2015-16 5 NOT AGREEING WITH THE EXPENDITURE CLAIMED BY THE AS SESSEE DESPITE OF THE FACT THAT THE ASSESSEE HERSELF HAS OFFERED THE NET INCOME OF RS.5,67,490/- OUT OF GROSS RECEIPT OF RS.7,00,500/-. THE ASSESSI NG OFFICER AGAIN MADE THE ADDITION OF THE GROSS RECEIPTS AND THAT TOO WITHOUT GIVING BENEFIT OF ALREADY DECLARED INCOME. THE ACTION OF THE ASSESSING OFFIC ER IS HIGHLY UNJUSTIFIED. I FURTHER FIND THAT THE REASON FOR SELECTION OF CASE OF THE ASSESSEE WAS FOR EXAMINATION OF BANK DEPOSITS IN THE BANK AND WHICH THE ASSESSEE HAD EXPLAINED AS PER HER LETTERS PLACED AT PAGES 89 TO 92 OF THE PAPER BOOK WHEREIN THE ASSESSEE HAD EXPLAINED THAT SHE HAD DEP OSITED RS.20,000/- IN THE STATE BANK OF INDIA AND FURTHER PPF OF RS.80,00 0/- IN THE SAME BANK. SHE HAD ALSO EXPLAINED THAT THE DEPOSITS WERE OUT O F HER INCOME EARNED FROM THE TUITION. THE ONLY PURPOSE FOR SELECTION O F THE CASE WAS THE EXAMINATION OF CASH DEPOSITS WHICH THE ASSESSING OF FICER EXTENDED TO OTHER ISSUES AND THAT TOO WITHOUT OBTAINING THE NECESSARY SANCTION AND THEREFORE, ALSO THE ACTION OF THE ASSESSING OFFICER IS HIGHLY UNJUSTIFIED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22/02 /2019) SD/. ( T. S. KAPOOR ) ACCOUNTANT MEMBER DATED:22/02/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW