Arjun B Kothari, CHENNAI V. ITO, CHENNAI

ITA 693/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4011 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 22-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Business income; Period of limitation; Corroborative evidences; Time period of passing order

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./ I.T.A. NO. 693/MDS/2016 / ASSESSMENT YEAR : 2010-2011 SHRI. ARJUN B . KOTHARI, NEW NO.18, KOTHARI BAGH, UTTAMAR GANDHI ROAD, CHENNAI 600 034. [PAN AQLPA 5697C) VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(1) CHENNAI. ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI. R. VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : SHRI. A.V.SREEKANTH, IRS, JCIT. / DATE OF HEARING : 10-11-2016 ! / DATE OF PRONOUNCEMENT : 23-11-2016 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE ASSESSEE, IT AGGRIEV ED ON AN ADDITION OF D.16,06,370/- CONFIRMED BY THE LD. COMM ISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI. ITA NO.693/MDS/2016. :- 2 -: 2. ASSESSEE HAS FILED THIS APPEAL WITH A DELAY OF FOU R DAYS. CONDONATION PETITION HAS BEEN FILED. REASONS SHOWN FOR THE DELAY ARE JUSTIFIED. DELAY IS CONDONED. APPEAL IS ADMITTED 3. FACTS APROPOS ARE THAT ASSESSEE HAD FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DISCLOSING AN INCOME OF D2 ,61,530/. IT SEEMS DIRECTOR GENERAL OF INCOME TAX (INVESTIGATION ), CHENNAI RECEIVED CERTAIN INFORMATION THAT ASSESSEE WAS HAVI NG A BANK ACCOUNT WITH HSBC, SWITZERLAND. EFFORTS WERE MADE BY THE A SSESSING OFFICER TO OBTAIN FACTUAL DETAILS OF ANY ACCOUNT MAINTAINED BY THE ASSESSEE OR ANY ACCOUNT IN WHICH HE WAS THE BENEFICIARY. IT SEEMS ASSESSING OFFICER WAS CONSTRAINED TO COMPLETE THE ASSESSMENT BEFORE OBTAINING ANY SUCH INFORMATION DUE TO LIMITATION PERIOD FOR C OMPLETING ASSESSMENT. IT IS TO BE NOTED THE ASSESSEE HAD DE NIED HAVING ANY SUCH ACCOUNT WITH HSBC. HE HAD ALSO STATED THAT H E WAS NEVER ASSOCIATED WITH M/S. SISAL HOLDINGS, MENTIONED IN T HE INFORMATION PROVIDED BY THE INVESTIGATION WING. 4. HOWEVER, THE ASSESSING OFFICER FOUND THAT ASSESSEE WAS PURSUING BSC IN EDUCATION AND SOCIAL POLICY IN USA. THOUGH T HE ASSESSEE ARGUED THAT EXPENDITURE FOR PURSUING EDUCATION ABR OAD WAS MET BY ITA NO.693/MDS/2016. :- 3 -: HIS OWN AUNT SMT. KAMAL KUMBHANI, SUPPORTING IT BY AN AFFIDAVIT, LD. ASSESSING OFFICER DISALLOWED IT. HE WAS OF THE OPI NION THAT NO SUPPORTING EVIDENCE WAS FILED BY THE ASSESSEE WHICH COULD SHOW ANY PAYMENT OF FEES FROM HER ACCOUNT. ASSESSING OFFICE R HELD THAT ASSESSEE HAD NOT CONCLUSIVELY PROVED HOW HE MET TH E EDUCATIONAL EXPENDITURE. RUPEE EQUIVALENT OF US DOLLARS 30,000/ - WAS ADDED AS INCOME OF THE ASSESSEE. THE ADDITION CAME TO D13,44 ,820/-. 5. IN HIS APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ARGUMENT OF THE ASSESSEE WAS THAT SMT. K AMAL KUMBHANI HAD CONFIRMED MEETING THE EXPENDITURE OF HIS STUDY IN USA. AN UNDERTAKING FROM SMT. KAMAL KUMBHANI WAS ALSO FIL ED. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT IMPRES SED. ACCORDING TO HIM, ASSESSEE COULD NOT PROVIDE BANK DETAILS OF SMT. KAMAL KUMBHANI AND COULD NOT PROVE THAT SHE HAD SUFFICIE NT FUNDS WITH HER FOR MEETING THE EDUCATIONAL EXPENDITURE. HE UPHEL D THE ADDITION. 6. NOW, BEFORE US, LD. AUTHORISED REPRESENTATIVE STRON GLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES SUBMITTED THAT AFFIDAVIT FILED BY SMT. KAMAL KUMBHANI WAS OVERLOOKED FOR NO REASON. ACCORDING TO HIM, ADDITION MADE WAS NOT JUSTIFIED. ITA NO.693/MDS/2016. :- 4 -: 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE ORDERS OF THE AUTHORITIES BELOW. THE PROCEEDINGS AGAINST THE ASSESSEE WAS INITIATED ON A REFERENCE FROM DIRECTOR GENERAL OF INCOME TAX (INVESTIGATION) THAT HE WAS HOLDING AN ACCOUNT WITH HSBC, SWITZERLAND OR WAS ASSOCIATED WITH A CONCERN CALLED SISAL HOLD INGS WHICH WAS HOLDING AN ACCOUNT. HOWEVER, THE FINAL ASSESSMENT COMPLETED HOWEVER DID NOT CARRY ANY ADDITION RELATED TO THIS. THE ADDITION MADE WAS ON EDUCATIONAL EXPENSES OF THE ASSESSEE IN USA , WHICH ASSESSEE CLAIMED TO HAVE BEEN MET BY HIS AUNT SMT. KAMAL KUM BHANIM. NO DOUBT ASSESSING OFFICER HAS MENTIONED THAT ASSESSMENT WAS BEING COMPLETED CONSIDERING CONSTRAINS OF LIMITATIONS. HO WEVER, EVEN BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS), REVENUE WAS NOT ABLE TO SHOW EXISTENCE OF ANY ACCOUNT MAINTAINED BY ASSESS EE IN HSBC SWITZERLAND OR ANY RELATED ENTITY. EVEN BEFORE US, NO SUCH PLEADING WAS MADE BY LD. DEPARTMENTAL REPRESENTATIVE. ADDITI ON WAS MADE ONLY FOR THE STUDY EXPENDITURE OF THE ASSESSEE IN U SA WHICH WAS CLAIMED BY THE ASSESSEE TO BE MET BY HIS AUNT IN US A UNJUSTIFIED. CONTENTS OF THE CONFIRMATION PROVIDED BY THE AUNT O F THE ASSESSEE ITA NO.693/MDS/2016. :- 5 -: PRODUCED BEFORE LD. COMMISSIONER OF INCOME TAX (APP EALS) IS REPRODUCED HEREUNDER:- KAMAL N. KUMBHANI 10608 SUNDERLAND WOODS CT., DAYTON, OHIO - 45458, UNITED STATES OF AMERICA TO WHOMSOEVER IT MAY CONCERN THIS IS TO CONFIRM THAT I MRS. KAMAL KUMBHANI RESIDING AT 10608 SUNDERLAND WOODS CT . DAYTON OH 45458 AM A CITIZEN OF USA. I HAVE FINANCED THE STAY AND EDUCATION EXPENSES OF MY NEPHEW MR. ARJUN B KOTHARI I FOR THE FINANCIAL YEAR 2009-10 WHEN HE WAS PURSUING HIS BSC IN NORTHWESTERN UNIVERSITY, 633, CLARK STREET, EVANSTO N IL60208, USA. THE EXPENSES WERE MET OUT MY EARNINGS IN THE USA COMPRISING OF BUSINESS INCOME, SALARIES, INTEREST & DIVIDEND ETC. THE PROOF OF MY INCOME IN THE FORM OF MY INCOME TAX RETURN FILED IN THE USA IS ENCLOSED. YOURS SINCERELY, SD/-. KAMAL KUMBHANI. ADDRESS OF THE SMT. KAMAL KUMBHANIM IS AVAILABLE. SHE HAD ALSO GIVEN THE SOURCE OF HER EARNINGS. IT IS NATURAL FO R AN AUNT TO MEET THE EXPENDITURE OF HER NEPHEW FOR HIS STUDIES ABROAD. ESPECIALLY SO WHEN THE AUNT WAS STAYING IN USA WHERE THE NEPHEW WAS ST UDYING. IN ANY ITA NO.693/MDS/2016. :- 6 -: CASE, THE REVENUE WAS NOT ABLE TO PLACE ON RECORD ANY SOURCE OF INCOME FOR ASSESSEE WHO WAS OBVIOUSLY A STUDENT, WH ICH COULD JUSTIFY THE ADDITION MADE. WE, THEREFORE SET ASIDE THE ORD ER OF THE LOWER AUTHORITIES AND DELETE THE ADDITION MADE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON WEDNESDAY, THE 23 RD DAY OF NOVEMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 23RD NOVEMBER, 2016 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF