ACIT, Patiala V. Sh. Vishwanath Sharma, Zirakpur

ITA 685/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80807 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-07-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 05-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 685/CHD/2013 ASSESSMENT YEAR : 2003-04 THE A.C.I.T., VS SHRI VISHWANATH SHARM A, CENTRAL CIRCLE, VILLAGE LOHGARH, PATIALA. WARD 6, NAC ZIRAKPUR. PAN : ALHPS6333E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.S.NAGAR RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 03.07.2014 DATE OF PRONOUNCEMENT : 08.08.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS) LUDHIANA DATED 20.03.2013 AGAINST THE ORDER PASSED UNDER SECTION 143(3)/153A OF THE INCOME-TAX ACT, 1961 ( 'THE ACT' FOR SHORT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : L(A). THE LD. CIT(A) HAS ERRED BOTH IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS. 24,000/- MADE ON ACCOUNT OF LOW HOU SEHOLD EXPENSES, HOLDING ESTIMATION OF HOUSEHOLD EXPENDITU RE TO BE REASONABLE, L(B). THE LD. CIT(A) HAS ERRED BOTH IN LAW A ND ON FACTS IN NOT APPRECIATING THE FACTS THAT AS DISCUSSED IN THE ASS ESSMENT ORDER THAT THE HOUSEHOLD EXPENSES SHOWN ARE NOT SUFFICIEN T TO MEET THE EXPENDITURE KEEPING IN VIEW THE VALUABLE ITEMS FOUN D IN HIS POSSESSION AT HIS PREMISES ENJOYING HIGH STANDARD O F LIVING EVEN IF THE AMOUNT OF WITHDRAWALS BY OTHER FAMILY MEMBERS A RE TAKEN INTO CONSIDERATION. 2 2(A). THE LD, CIT(A) HAS ERRED BOTH IN LAW A ND ON FACTS IN DELETING THE ADDITION OF RS.10,70,000/- ON ACCOUNT. OF UNEXPLAIN ED CREDIT ENTRIES IN THE BANK ACCOUNT. 2(B). THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN NOT APPRECIATING THE FACTS THAT DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO PROVE THE GENUI NENESS OF THESE CREDIT ENTRIES IN BANK ACCOUNT. 2(C). THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.10,70,000/- BY HOLDING THAT MAJORITY OF THE ENTRIES IN THE BANK ACCOUNT PERTAIN TO RECEIPT OF SALARY BY THE ASSESSEE DISREGARDING THE FACT THAT ASSESSEE IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE CIT(A) HIMSELF CLA IMED THAT CREDIT ENTRY OF RS. 3 LAC IS IN RESPECT OF REPAYMEN T OF LOAN AND ANOTHER CREDIT ENTRY OF RS,7,70,000/- IS IN RESPECT OF PROPERTY SALE. 2(D). THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON F ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 10,70,000/- BY GIVING A QUITE CONTRADICTORY FINDING EVEN THOUGH SUCH PLEA WAS NOT TAKEN BY THE ASSESSEE BEFORE THE CIT(A). 2(E). THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON F ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 10,70,000/- EVEN THOUG H THE ASSESSEE HAD FAILED TO FILE ANY EVIDENCE. 2(F). THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON F ACTS IN NOT APPRECIATING THE FACTS THAT IN THE REMAND REPORT SU BMITTED, THE A.O. HAS SPECIFICALLY OBJECTED TO THE ADMISSION OF ADDIT IONAL EVIDENCE AT APPELLATE STAGE UNDER RULE 46A. 3. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SIMILAR TO THE ISSUE RAISED I N THE HANDS OF THE BROTHER OF THE ASSESSEE SHRI YADWINDER KUMAR SHARMA AND THE ISSUE BE DECIDED IN LINE WITH THE SAID APPEAL. 4. THE LD. DR FOR THE REVENUE, HOWEVER PLACED RELIA NCE ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE GROUND OF APPEAL NO. 1 RAISED BY THE ASSESSEE IS IN RELATION TO THE ADDITION ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. 6. THE ASSESSING OFFICER HAD ESTIMATED THE HOUSEHOL D EXPENSES ON THE BASIS OF THE SIZE OF THE FAMILY AND THE RELATED EXPENSES AND MADE AN ADDITION OF RS. 24,000/-, WHICH WAS DELETED BY T HE COMMISSIONER OF 3 INCOME TAX (APPEALS). THE REVENUE IS IN APPEAL AGA INST THE SAID ADDITION. 7. WE FIND THAT SIMILAR ISSUE OF ADDITION ON ACCOUN T OF LOW HOUSEHOLD WITHDRAWALS AROSE IN THE CASE OF THE BROT HER OF THE ASSESSEE SHRI YADWINDER KUMAR SHARMA IN THE APPEAL FILED BY THE REVENUE VIDE ITA NO. 1131/CHD/2012 WHEREIN THE TRIBUNAL VIDE ORD ER DATED 11.07.2014 UPHELD THE ADDITION MADE ON ACCOUNT OF L OW HOUSEHOLD EXPENSES. AS ADMITTED BY THE LD. AR FOR THE ASSESS EE, THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCES IN THE CASE OF SHRI YADWINDER KUMAR S HARMA (SUPRA) AND IN THE ABSENCE OF THE ASSESSEE HAVING BROUGHT O N RECORD ANY EVIDENCE TO PROVE THE SOURCE OF MEETING ITS HOUSEHO LD EXPENSES, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE. 8. DURING THE COURSE OF SEARCH CARRIED OUT AT THE R ESIDENTIAL PREMISES OF THE ASSESSEE, IT WAS NOTED THAT THE ASS ESSEE WAS ENJOYING HIGH STANDARD OF LIVING AND HAD VARIOUS IMMOVEABLE ASSETS INSTALLED IN HIS RESIDENCE. THE EXPLANATION OF THE ASSESSEE THA T IT WAS WITHDRAWING A SUM OF RS. 5,000/- PER MONTH TO MEET ITS HOUSEHOL D EXPENSES IN ADDITION TO THE WITHDRAWALS MADE INDEPENDENTLY BY H IS BROTHERS AND FATHER WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER ESTIMATED THE HOUSEHOLD EXPENSES AT RS. 7,0 00/- PER MONTH AND MADE AN ADDITION OF RS. 24,000/-. THE SAID ESTIMAT ION OF THE EXPENSES WAS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEA LS) IN THE HANDS OF THE ASSESSEE. HOWEVER, THE COMMISSIONER O F INCOME TAX (APPEALS) DELETED THE ADDITION IN VIEW OF THE PLEA OF THE ASSESSEE THAT THERE WAS CONTRIBUTION FOR HOUSEHOLD EXPENSES BY OT HER FAMILY MEMBERS. WE FIND THAT IN THE HANDS OF THE OTHER FA MILY MEMBERS I.E. THE BROTHER OF THE ASSESSEE SHRI YADWINDER KUMAR SH ARMA, AN ADDITION 4 HAS ALREADY BEEN UPHELD ON ACCOUNT OF LOW HOUSEHOLD EXPENSES AND IN VIEW THEREOF, THERE IS NO MERIT IN THE ORDER OF COM MISSIONER OF INCOME TAX (APPEALS) IN GIVING THE BENEFIT OF TELESCOPING AGAINST THE WITHDRAWALS MADE BY OTHER FAMILY MEMBERS. REJECTIN G THE SAME, WE UPHOLD ADDITION OF RS. 24,000/- IN THE HANDS OF THE ASSESSEE. 9. THE ISSUE IN GROUND NO. 2 RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS. 10,70,000/-. THE SAID ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF NON FURNISH ING OF THE EVIDENCE IN RESPECT OF CREDIT ENTRIES IN THE BANK ACCOUNT. THE SAID ADDITION WAS DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE HANDS OF THE ASSESSEE. 10. THE BRIEF FACTS OF THE ISSUE ARE THAT THERE WER E TWO CREDIT ENTRIES IN THE BANK ACCOUNT AGAINST WHICH THE ASSESSEE FAIL ED TO GIVE ANY EXPLANATION AND SUM OF RS. 10,70,000/- WAS ADDED AS INCOME OF THE ASSESSEE. 11. THE ADDITION MADE BY THE ASSESSING OFFICER OF R S. 10,70,000/- WAS ON ACCOUNT OF TWO CREDIT ENTRIES I.E. ON 03.07. 2002 OF RS. 3,00,000/- AND ON 22.10.2002 OF RS. 7,70,000/-. 12. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE EXPLANATION OF THE ASSESSEE WAS THAT IT HAD GIVEN A N ADVANCE OF RS. 3,05,000/- TO MR. SANDEEP RAI AND DURING THE YEAR, THE SAID AMOUNT WAS RECEIVED FROM HIM IN TWO INSTALMENTS I.E. RS. 3 ,00,000/- ON 08.07.2002 AND RS. 5,000/- ON 26.08.2002/-. IN THE REMAND REPORT, ASSESSING OFFICER STATED THAT THE ASSESSEE HAD FAIL ED TO GIVE ANY PROOF OF THE AMOUNT ADVANCED TO THE SAID PERSON AND IN TH E ABSENCE OF THE SAME, THE SAID ADDITION IS TO BE UPHELD. 5 13. THE COMMISSIONER OF INCOME TAX (APPEALS), IN VI EW OF THE CASH-FLOW STATEMENT, SUBMITTED BY THE ASSESSEE ACCE PTED THE PLEA OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 3 LACS . THE REVENUE IS IN APPEAL AGAINST THE SAID DELETION OF RS. 3 LACS. 14. WE FIND THAT SIMILAR PLEA OF EXPLANATION BY WAY OF ENTRIES THROUGH CASH-FLOW STATEMENT AROSE BEFORE THE TRIBUN AL IN THE CASE OF CIT VS SHRI YADWINDER KUMAR SHARMA (SUPRA) AND SAME WAS NOT ACCEPTED. THE ASSESSEE DURING THE ASSESSMENT PROCEE DINGS HAD NOT FURNISHED THE SAID CASH FLOW STATEMENT AND FURTHER HAS NOT FURNISHED ANY PROOF OF HAVING ADVANCED THE SAID LOAN TO THE S AID SHRI SANDEEP RAI EARLIER WHICH WAS REPAID DURING THE YEAR UNDER CONSIDERATION. IN THE ENTIRETY OF THE ABOVESAID FACTS AND CIRCUMSTANC ES, WE FIND NO MERIT IN THE RELIANCE PLACED UPON ENTRIES THROUGH CASH-FL OW STATEMENT AND REJECTING THE SAME, WE REVERSE ORDER OF COMMISSIONE R OF INCOME TAX (APPEALS) AND UPHOLD THE ADDITION OF RS. 3 LACS. 15. NOW COMING TO THE SECOND DEPOSIT ENTRY OF RS . 7,70,000/- ON 22.10.2002. BEFORE ASSESSING OFFICER, NO EXPLANATI ON WAS FURNISHED AND HENCE, THE ADDITION WAS MADE. BEFORE THE COMMI SSIONER OF INCOME TAX (APPEALS), THE ASSESSEE FURNISHED WRITTE N SUBMISSIONS STATING THAT THE SAID SUM OF RS. 7,70,000/- WAS REC EIVED ON SALE OF KOTHI IN VILLAGE LOHGARH 675 SQ. YDS. FOR RS.9,00,0 00/- AT 1/3 RD SHARE ALONGWITH SHRI DHARMINDER KUMAR SHARMA AND SHRI YAD WINDER KUMAR SHARMA. THE PLEA OF THE ASSESSEE BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS) WAS THAT AT BEST, INCOME FROM LONG TE RM CAPITAL GAINS COULD BE TAXED IN THE HANDS OF THE ASSESSEE. 16. THE COMMISSIONER OF INCOME TAX (APPEALS) DEL ETED THE ADDITION IN TOTALITY. 6 17. WE FIND THAT SIMILAR ISSUE OF THE ASSESSABIL ITY OF CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AROSE BEFORE THE TRIBU NAL IN THE CASE OF ACIT VS YADWINDER KUMAR SHARMA( SUPRA). THE TRIBUN AL HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE AND INCLUDE THE INCOME ARISING FROM CAPITAL GAINS ON SA LE OF THE PLOTS IN THE HANDS OF THE ASSESSEE FOR 1/3 RD SHARE. THE OTHER 1/3 RD SHARE IS OWNED BY THE ASSESSEE BEFORE US AND IN VIEW OF OUR RATIO LAID DOWN IN THE HANDS OF CO-OWNER, WE DIRECT THE ASSESSING OFFI CER TO RE-COMPUTE THE INCOME FROM LONG TERM CAPITAL GAINS IN THE HAND S OF THE ASSESSEE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING T O THE ASSESSEE. ACCORDINGLY, WE REVERSE THE ORDER OF COMMISSIONER O F INCOME TAX (APPEALS) IN DELETING THE ADDITION IN TOTALITY AND AFTER ACCEPTING THE EXPLANATION OF THE ASSESSEE THAT THE SAID AMOUNT HA S BEEN RECEIVED ON THE SALE OF PROPERTY, WE DIRECT THE ASSESSING OFFIC ER TO COMPUTE THE INCOME AFRESH IN LINE WITH OUR DIRECTIONS. THE GROU ND OF APPEAL NO. 2 IS THUS, PARTLY ALLOWED. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH AUGUST, 2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR. ASSISTANT REGISTRAR ITAT,CHD.