The ITO, Ward-1(2), JAMNAGAR V. Smt/ Parvatiben J. Bhensdadia, JAMNAGAR

ITA 727/RJT/2010

• Counselvise Citation: 72724914 RSA 2010
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-04-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 23-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR DR EI
• Assessee Lawyers: PRASHANT M MAHARISHI
• Section: 143(3); 133A

Judgement Text

M , IN THE INCOME TAX APPELLATE TRIBU NAL: RAJKOT BENCH, RAJKOT. BEFORE SHRI D . K. TYAGI , JM AND SHRI A. M OHAN ALANKAMONY , AM IT A NO . 727, 728 & 729/RJT/2010 EI I / ASSESSMENT YEAR 2003 - 04, 2004 - 05, 2 0 06 - 07 ITO, WARD - 1(2), JAMNAGAR ( . / APPELLANT) VS. SMT. PARVATIBEN J. BHENSDADIA PROP. OF M/S. RAVI TUTORIALS, DEVANG, ROAD NO.1, CHITRAKUT SOCIETY, OPP.KHODIYAR COLONY, JAMNAGAR PAN : AFOPN 7088 N R(. / RESPONDENT T / REVENUE BY SHRI AVINASH KUMAR, DR EI /ASSESSEE BY SHRI PRASHANT M MAHARISHI, CA / DATE OF HEARING 2 5 .04.2013 / DATE OF PRONOUNCEMENT 06 . 06 .2013 / ORDER PER BENCH: THE SE THREE A PPEAL S ARE FILED BY THE REVENUE AGGRIEVED BY THE ORDER S PASSED BY THE L D. CIT(A), JAMNAGAR IN APPEAL NO S .CIT(A)/JAM/ 403 /0 6 - 0 7 / 1309/427, 402/06 - 07/1309/426 & 293/08 - 09/1309/639, ALL DTD. 17.12.2009 PASSED U/S 143(3) R.W.S. 147 OF THE ACT . SINCE THE ISSUE IS I DENTICAL FOR ALL THE 3 ASSESSMENT YEARS, FOR THE SAKE OF CONVENIENCE, ALL THE CASES ARE HEARD TOGETHER AND ARE DISPOSED - OFF BY THIS COMMON ORDER. ITA NO. 727, 728 & 729/RJT/2010 2 2. THE REVENUE IN ITS APPEAL HAS RAISED SIX GROUNDS FOR THE AY 2003 - 04 & 2004 - 05 AND FIVE GROUNDS FOR THE ASSESSMENT YEAR 2006 - 07, WHEREIN GROUND NO S . 3 TO 6 FOR AY 2003 - 04 & 2004 - 05 AND GROUND NO.2 TO 5 FOR THE AY 2006 - 07 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE GROUND NO.1 FOR ALL THE THREE ASSESSMENT YEARS AND GROUND NO.2 FOR ASSESSMENT YEAR 2003 - 04 & 2004 - 05 ARE IDENTICAL AND THEY ARE REPRODUCED HEREIN BELOW FOR OUR CONSIDERATION: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN RESTRICTING THE ADDITION TO RS.2,38,000/ - , RS.3,81,900/ - & 1,69,500/ - OUT O F THE TOTAL ADDITION OF R S .14,49,000/ - , RS.15,35,000/ - & RS.24,18,500/ - RESPECTIVELY FOR THE AY 2003 - 04, 2004 - 05 & 2006 - 07 MADE ON ACCOUNT OF UNACCOUNTED TUITION FEE RECEIPT. 2. THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS.37,000/ - & RS.2,95,000/ - FOR THE AY 2003 - 04 & 2004 - 05 RESPECTIVELY ON ACCOUNT OF DEPOSIT OF CASH IN THE BANK ACCOUNT. 3. BRIEF FACTS : - THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF CONDUCING TUITION CLASS, FILED HER RETURN OF INCOME O N 22.10.2003 , 13 - 10 - 2004 AND 02 - 02 - 2007 FOR THE ASSESSMENT YEAR 2003 - 04, 2004 - 05 AND 2006 - 07 DECLARING TOTAL T AXABLE INCOME OF RS.1,40,440/ - , RS.1,37,010/ - AND RS.2,76,550/ - RESPECTIVELY. DURING THE ASSESSMENT YEAR 2006 - 07 A SURVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS/PROFESSION PREMISES OF THE ASSESSEE ON 01.09.2005 AND SOME IMPORTANT DOCUMENTS WERE IMPOUNDED. ON VERIFICATION OF THE RECORDS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD SUPPRESSED FEES RECEIVED FROM STUDENTS & CASH DEPOSIT S DURING THE RELEVANT PREVIOUS YEAR AND EARLIER YEARS. IT WAS ALSO OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD NOT DISCLOSED CERTAIN BANK ACCOUNTS IN HER STATEMENT OF ACCOUNTS. THEREAFTER ITA NO. 727, 728 & 729/RJT/2010 3 THE ASSESSMENT S WERE REOPENED AND THE INCOME OF THE ASSESSEE WAS REASSESSED U/S 143(3) R. W. S. 147 OF THE ACT FOR THE ASSESSMENT YEAR 2003 - 04 AND 2004 - 05 AND U/S. 143 (3) OF THE ACT FOR THE ASSESSMENT YEAR 2006 - 07 WHEREIN CERTAIN ADDITIONS WERE MADE BY LD AO. ON APPEAL BEFORE LD . CIT(A), THE LD. CIT(A) DELETED SOM E OF THE DISALLOWANCES /ADDITIONS MADE BY LD . AO. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 4. GROUND NO.1 FOR AY 2003 - 04, 2004 - 05 & 2006 - 07 RESTRICTING ADDITION TO RS.2,38,000/ - , RS.3,81,900/ - & 1,69,500/ - OUT OF THE TOTAL ADDITION OF RS.14,49,000/ - SIC. RS.10,42,800/ - , RS.15,35,000/ - & RS.24,18,500/ - RESPECTIVELY FOR THE AY 2003 - 04, 2004 - 05 & 2006 - 07 MADE ON ACCOUNT OF UNACCOUNTED TUITION FEE RECEIPT : - DURING THE COURSE OF SURVEY CARRIED OUT AT THE TUITION CLASS OF THE ASSESSES ON 01.09.2005 IT WAS OBSERVED THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE WERE NOT RELIABLE AND THEREFORE CORRECT INCOME OF THE ASS ESSEE COULD NOT BE DETERMINED. FURTHER , THE EVIDENCE COLLECTED DURING THE SURVEY AND POST SURVEY ENQUIRIES IT WAS REVEALED THAT THE ASSESSEE HAD BEEN CONSISTENTLY SUPPRESSING HER INCOME FROM THE TUITION CLASSES FOR ALL THE THREE ASSESSMENT YEARS. THE NUMBER OF STUDENTS ENROLLED BY THE ASSESSE E WAS NOT PROPERLY DISCLOSED ; THEREFORE BY ESTIMATION THE LD. AO MADE THE FOLLOWING ADDITIONS FOR ALL THE THREE ASSESSMENT Y EARS TOWARDS SUPPRESSION OF TUITION FEES : - ITA NO. 727, 728 & 729/RJT/2010 4 AY NO STUDENTS / TUITION FEE DECLARED BY THE ASSESSEE (RS.) TUITION FEE ESTIMATED BY THE LD AO (RS.) ADDITION MADE ON ACCOUNT OF TUITION FEE (RS.) NO. OF STUDENTS TUITION FEE TOTAL NO. OF STUDENTS TUITION FEE TOTAL TOTAL 2003 - 04 - 2000 2,72,000 316 3300 10,42,800 7,70,800 2004 - 05 - 2000 2,85,000 364 5000 18,20,000 15,35,000 2006 - 07 226 - 3,95,500 402 7000 28,14,000 24,18,500 4.1 WHEN THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), LD. CIT(A) AFTER EXAMINING THE ISSUE ARRIVED AT THE FOLLOWING CONCLUSIONS ON ESTIMATE BASIS : - AY NO STUDENTS / TUITION FEE DECLARED BY THE ASSESSEE (RS.) TUITION FEE ESTIMATED BY THE LD . CIT (A) (RS.) ADDITION SUSTAINED BY LD. CIT(A) (RS.) NO. OF STUDENTS TUITION FEE TOTAL NO. OF STUDENTS TUITION FEE TOTAL - 2003 - 04 - 2000 2,72,000 154 3500 5,39,000 2,38,000 SIC 2,67,000 2004 - 05 - 2000 2.85.000 171 3900 6,66,900 3,81,900 2005 - 06 226 - 3,95,500 113 5000 5,65,000 1,69,500 4.2 FOR THE IDENTICAL ISSUE FOR THE AY 2005 - 06 WHEN THE MATTER REACHED TRIBUNAL, THE TRIBUNAL VIDE ORDER DATED 11.06.2010 CONFIRMED THE FINDINGS OF THE LD . CIT(A) THAT THE NUMBER OF STUDENTS FOR THE AY 2003 - 04 & 2004 - 05 ARE 154 & 171 RESPECTIVELY AND FURTHER ESTIMATED THE TUITION FEE AT RS.6000/ - PER STUDENT FOR THE AY 2005 - 06 BY OBSERVING THAT THE FEE WOULD BE INCREASED ON YEAR TO YEAR BASIS. FURTHER, T AKING CUE FROM THE ORDER OF THE TRIBUNAL AND OBSERVING THE SAME RATIO WE HEREBY CONFIRM THE ORDER OF THE LD . CIT(A) FOR THE AY 2006 - 07 WITH RESPECT TO NUMBE R OF STUDENTS I.E. 113 STUDENTS. ITA NO. 727, 728 & 729/RJT/2010 5 4.3 SINCE, THE TRIBUNAL FOR THE ASSESSMENT YEAR 2005 - 06 HAS ESTIMATED THE TUITION FEES AT RS.6,000/ - PER STUDENT AND FURTHER OBSERVED THAT THE FEE SHOULD BE INCREASED ON YEAR TO YEAR BASIS, IN PARITY WITH THE SAME OBSERVA TION, WE HEREBY ESTIMATE THE TUITION FEE BY INCREASING RS.1,000/ - FOR EVERY SUBSEQUENT YEAR AND SIMILARLY DECREASING THE SAME BY RS.1,000/ - FOR THE PRECEDING YEAR. ACCORDINGLY, WE HEREBY ESTIMATE THE TUITION FEES FOR ALL THE RELEVANT THREE ASSESSMENT YEARS AS UNDER: - ASSESSMENT YEAR FEES (RS.) 2003 - 04 4000 2004 - 05 5000 2005 - 0 6 6000 2006 - 07 7000 5. ACCORDINGLY WE HEREBY CONFIRM ON ESTIMATE BASIS THE TOTAL FEES EARNED BY THE ASSESSEE FOR THE RELEVANT ASSESSM ENT YEARS AS UNDER : - AY NO. OF STUDENTS FEES PER STUDENT (RS.) TOTAL (RS.) 2003 - 04 154 4000 6,16,000 2004 - 05 171 5000 8,55,000 2006 - 07 113 7000 7,91,000 THUS GROUND NO.1 FOR ALL THE THREE ASSESSMENT YEARS IS DISPOSED - OFF. 6. GROUND NO. 2 FOR AY 2003 - 04 & 2004 - 05 - DELETING THE ADDITION OF RS.37,000/ - & RS.2,95,000/ - FOR THE AY 2003 - 04 & 2004 - 05 RESPECTIVELY ON ACCOUNT OF DEPOS IT OF CASH IN THE BANK ACCOUNT : - FOR THE ASSESSMENT YEAR 2003 - 04 THE LEARNED AO OBSERVED THAT THE ASSESSEE HAD DEPOSITED CASH OF RS.36,000/ - AND RS.1,000/ - IN NAWANAGAR CO - OPERATIVE BANK LTD. ON 20 - 03 - 2003 AND 19 - 07 - 2002 RESPECTIVELY. THE ASSESSEE EXPLAINED THE SAME AS LOAN REPAYMENT TO THE BANK. HOWEVER, ITA NO. 727, 728 & 729/RJT/2010 6 THE LEARNED AO HELD THE SAME AS CASH DEPOSIT OF UNACCOUNTED MONEY. ON APPEAL, THE LEARNED CIT(A) DELET ED THE SAME AFTER VERIFYING THE ENTRIES REFLECTED IN THE BOOKS OF ACCOUNTS. SIMILARLY, FOR THE ASSESSMENT YEAR 2004 - 05 THE LEARNED AO OBSERVED THAT THE ASSESSEE HAD DEPOSITED A CASH OF RS.2,95,000/ - ON VARIOUS DATES IN THE SAME BANK FOR WHICH THE ASSESSEE EXPLAINED IT TO BE LOAN REPAYMENT. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITION FOR THE SAME REASON AS HELD IN ASSESSMENT YEAR 2003 - 04. NOW BEFORE US, THE REVENUE IS IN APPEAL. HOWEVER, THE LEARNED DR FOR THE REVENUE HAS NOT BROUGHT OUT ANY COGENT MA TERIALS ON RECORD TO ESTABLISH THEIR STAND. THEREFORE, WE ARE LEFT WITH NO OTHER OPTION BUT TO CONFIRM THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, WE HEREBY CONFIRM THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE IN ITA NOS. 727 /RJT/201, 728 /RJT/201 0 AND ITA NO.279/RJT/2010, FOR THE ASSESSMENT YEAR 2003 - 04, 2004 - 05 AND 2006 - 07 ARE PARTLY ALLOWED. SD/ - SD/ - (D .K. TYAGI) ( A. M OHAN ALANKAMONY ) E T / JUDICIAL MEMBER OHAN / ACCOUNTANT MEMBER / ORDER DATE /RAJKOT .05 .2013 B T /LK T HIS O RDER IS PRONOUNCED IN THE O PEN COURT ON 06/06/2013 SD/ - SD/ - (D. K. SRIVASTAVA) (T. K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA NO. 727, 728 & 729/RJT/2010 7 T O O / COPY OF ORDER FORWARDED TO: - 1 . . / APPELLANT - ITO, WARD - 1(2), JAMNAGAR 2 . R(. / RESPONDENT - SMT. PARVATIBEN J. BHENSDADIA, PROP. OF M/S. RAVI TUTORIALS, DEVANG, ROAD NO.1, CHITRAKUT SOCIETY, OPP.KHODIYAR COLONY, JAMNAGAR 3 . M A / CIT , JAMNAGAR 4 . A - / CIT (A) , JAMNAGAR 5 . REEM , M , / DR, ITAT, R AJKOT 6 . I / GUARD FILE. //TRUE COPY// / BY ORDER , SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT.