Shri Manisha Gaba C/o- M/s. K.L. Datta & Co. CA, Vashistha Plaza, 2 Manu Marg, Alwar, Alwar V. ITO Ward-1(5), Alwar, Ward-1(5), Alwar

ITA 741/JPR/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7360 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA JCIT DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 741/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. MANISHA GABA W/O SH. VIRENDARA PAL, 4-G22, PRATAP NAGAR, HOUSING BOARD ALWAR 301001. CUKE VS. THE ITO, WARD-1(5), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABUPG 7662 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI. P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI ASHOK KHANNA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24/07/2019 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 26/07/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 25.03.2019 OF CIT(A), ALWAR FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL AS UNDER:- 1.0 THAT THE LD. ASSESSING OFFICER HAS ERRED IN LA W AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN MAKING AN AD DITION OF RS. 451000.00 AND THE LD. CIT(A) ALWAR HAS ERRED IN SUS TAINING A SUM OF RS. 301000.00 OUT OF THE SAME. ITA 741/JP/19 SMT. MANISHA GABA VS. ITO 2 2.0 THAT THE LD. ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN MAKING AND A DDITION OF RS. 82805.00 AND THE LD. CIT(A), ALWAR HAS ERRED IN SUS TAINING THE SAME. 3.0 THAT THE ASSESSEE RESERVES ITS RIGHT TO ADD, AL TER, MODIFY, AMEND ALL OR ANY OF THE GROUNDS OF APPEAL BEFORE OR AT TH E TIME OF HEARING OF APPEAL. 2. GROUND NO. 1 IS REGARDING THE ADDITION SUSTAINE D BY THE LD. CIT(A) TO THE EXTENT OF RS. 3,01000/- ON ACCOUNT OF DEPOSI T MADE IN THE BANK ACCOUNT. THE AO RECEIVED AIR INFORMATION REGARDING THE DEPOSIT IN THE SAVING BANK ACCOUNT OF THE ASSESSEE. THE AO NOTED T HAT THE ASSESSEE HAS DEPOSITED RS. 1,51,000/- ON 08.08.2009 ON THE DAY W HEN THE SAVING BANK ACCOUNT WITH BANK OF BARODA WAS OPENED BY THE ASSE SSEE AND AN AMOUNT OF RS. 1,50,000/- WAS WITHDRAWN BY THE ASSESSEE ON 10.08.2009. SUBSEQUENT THE ASSESSEE HAS ALSO DEPOSITED RS. 3,00 ,000/- ON 20.02.2010. THUS, THE AO MADE ADDITION OF RS. 4,51,000/- BY TRE ATING THE SAME AS UNEXPLAINED DEPOSIT MADE IN THE BANK. ON APPEAL, T HE LD. CIT(A) HAS ACCEPTED THE SOURCE OF PAST SAVING TO THE EXTENT OF RS. 1,50,000/- FROM THE BUSINESS OF BEAUTY PARLOR IN THE PAST SEVERAL Y EARS DONE BY THE ASSESSEE AND THEREBY THE BALANCE AMOUNT OF RS. 3,01 ,000/- WAS CONFIRMED. ITA 741/JP/19 SMT. MANISHA GABA VS. ITO 3 3. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS ACCEPTED THE FACT THAT THE ASSES SEE WAS RUNNING A BEAUTY PARLOUR IN THE PAST SEVERAL YEARS HOWEVER, T HE SAVING FROM THE SAID ACTIVITY WAS ACCEPTED ONLY TO THE EXTENT OF RS. 1,5 0,000/- AS AGAINST THE ENTIRE DEPOSIT MADE BY THE ASSESSEE. THE LD. AR HAS FURTHER CONTENDED THAT THE ASSESSEE HAS RUNNING THE BEAUTY PARLOUR AN D BOUTIQUE SINCE THE YEAR 1992 AND TILL AUGUST, 2008 FOR 17 YEARS THERE FORE, THE CLAIM OF SAVING FROM BEAUTY PARLOUR ACTIVITY OF RS. 3,00,000/- IS REASONABLE AGAINST WHICH THE LD. CIT(A) HAS ACCEPTED ONLY RS. 1,50,000/-. TH E LD. AR HAS FURTHER CONTENDED THAT WHEN A SUM OF RS. 1,50,000/- WAS WIT HDRAWN BY THE ASSESSEE PRIOR TO THE SUBSEQUENT DEPOSIT OF RS. 3,0 0,000/- THEN ONLY PICK CREDIT SHOULD HAVE BEEN CONSIDERED FOR THE PURPOSE OF ADDITION. THUS, THE LD. AR HAS SUBMITTED THAT THE ESTIMATION MADE BY TH E LD. CIT(A) IS WITHOUT ANY BASIS AND THE ADDITION TO THE EXTENT OF RS. 3,0 0,000/- MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT DECLARED ANY INCOME FROM THE BEAUTY PARLOUR IN THE PAST AND THEREFORE, THE CLAIM OF SAVING FROM THE SAID ACTIVI TY IS WITHOUT ANY DOCUMENTARY EVIDENCE. HOWEVER THE LD. CIT(A) HAS AC CEPTED THE SAVING TO THE EXTENT OF RS. 1,50,000/- WHICH IS VERY REASONAB LE AND PROPER. HE HAS RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. ITA 741/JP/19 SMT. MANISHA GABA VS. ITO 4 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD IT IS NOTED THAT THE AO MADE ADDITION OF RS. 4,51,000/- BY CONSIDERING THE TOTAL DEPOSIT MADE BY THE ASSESSEE BEING RS. 1,51,000/- AT THE TIME OF OPENING OF THE ACCOUNT ON 08.08.2009 AN D RS. 3,00,000/- ON 20.02.2010. THERE IS NO DISPUTE THAT A SUM OF RS. 1 ,50,000/- WAS WITHDRAWN FROM THE BANK ACCOUNT ON 10.08.2009 THERE FORE, WHILE CONSIDERING THE DEPOSIT MADE IN THE BANK ACCOUNT AS UNEXPLAINED THE WITHDRAWAL MADE BY THE ASSESSEE OF RS. 1,50,000/- I S ALSO REQUIRED TO BE TAKEN INTO ACCOUNT. THOUGH THERE IS A TIME GAP OF T HE SAID DEPOSIT HOWEVER, ONCE INCOME IS ADDED ON ACCOUNT OF THE DEP OSIT THEN THE WITHDRAWAL CANNOT BE IGNORED AS BOTH THE DEPOSIT AS WELL AS WITHDRAWAL TRANSACTIONS ARE DURING THIS FINANCIAL YEAR. THEREF ORE, EVEN IF TAKING PICK CREDIT THE SAID AMOUNT OF RS. 1,50,000/- IS REQUIRE D TO BE TAKEN INTO CONSIDERATION. THUS, THE ADDITION MADE BY THE AO TO THE EXTENT OF THE SAID AMOUNT OF RS. 1,50,000/- IS NOT SUSTAINABLE. 5.1 FURTHER, THE LD. CIT(A) HAS ACCEPTED THE FACT THAT THE ASSESSEE WAS RUNNING A BEAUTY PARLOUR AND BOUTIQUE FOR LAST ABOU T 17 YEARS AND ACCEPTED THE SAVING OF THE ASSESSEE OF THE PAST YEA RS BUT ONLY TO THE EXTENT OF RS. 1,50,000/-. THE LD. CIT(A) HAS ESTIMA TED THE SAVING WITHOUT REFERRING THE BASIS THEREFORE, IN THE FACTS AND CIR CUMSTANCES OF THE CASE ITA 741/JP/19 SMT. MANISHA GABA VS. ITO 5 WHEN THE ASSESSEES ACTIVITY OF RUNNING OF BEAUTY PARLOUR AND BOUTIQUE FOR SO MANY YEARS IS NOT DISPUTE THEN THE SAVING O F RS. 3,00,000/- AS CLAIMED OF THE ASSESSEE IS REASONABLE AND PROPER. 5.2 ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE THE ADDITION SUSTAINED BY THE LD. CIT(A) IS D ELETED. 5.3 BEFORE PARTING WITH THE ISSUE IT IS TO BE NOTED THAT THE DECISION IN CASE OF BHAWANI SINGH VS. ITO DATED 13.09.2018 IN I TA NO. 407/JP/2017 AS RELIED UPON BY THE AUTHORITIES BELOW CANNOT BE A PPLIED TO THE FACTS OF THE PRESENT CASE WHEN IN THE SAID CASE THE WITHDRAW AL FROM THE BANK WAS MADE BY THE ASSESSEE AT THE TIME OF PURCHASING OF T HE LAND AND THE ASSESSEE CLAIMED THAT ONLY PART AMOUNT WAS UTILIZED FOR PURCHASE OF LAND AND BALANCE WAS WITH THE ASSESSEE. IN THE SAID CASE THE TRIBUNAL NOTED THAT THE ASSESSEE HAS CLAIMED THE UTILIZATION OF TH E WITHDRAWAL AMOUNT ONLY TO THE EXTENT OF THE PURCHASE CONSIDERATION SH OWN IN THE TITLE DOCUMENT AND NOT ACTUAL AMOUNT OF PURCHASE CONSIDER ATION AND FURTHER THERE WAS A TIME GAP OF 2-3 YEARS BETWEEN THE TRAN SACTION OF PURCHASE OF LAND AND SUBSEQUENT DEPOSIT IN THE BANK ACCOUNT. HE NCE THE SAID DECISION CANNOT BE APPLIED IN THE CASE OF THE ASSESSEE. ITA 741/JP/19 SMT. MANISHA GABA VS. ITO 6 6. GROUND NO. 2 IS REGARDING THE CLAIM OF COST OF I MPROVEMENT OF RS. 1,82,805/-, WHILE COMPUTING THE CAPITAL GAIN ON SA LE OF LAND, WAS DENIED BY THE AO AS WELL AS THE LD. CIT(A). 7. I HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CO NSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS CLAIM ED TO HAVE PURCHASED THE PLOT NO. D-323, SURYA NAGAR, ALWAR ON 17.08.200 5 AND THEREAFTER THE ASSESSEE HAS INCURRED EXPENDITURE ON IMPROVEMENT OF LEVELLING OF LAND AND ALSO SOME FOUNDATION CONSTRUCTION. THE ASSESSEE PR ODUCED THE BILLS REGARDING PURCHASE OF SAND OF 75 TRACTOR TROLLIES AND 22 TRACTOR TROLLIES OF STONES. THE AO AS WELL AS THE LD. CIT(A) DENIED THE CLAIM OF COST OF IMPROVEMENT ON THE GROUND THAT NO SUCH AVERMENT WER E MADE IN THE SALE DEED REVEALING THE FACT OF COST OF IMPROVEMENT. EXC EPT THE BILL ON PLAIN PAPER THE ASSESSEE HAS NOT PRODUCED ANY OTHER DOCUM ENTS IN SUPPORT OF THE CLAIM. THE AO HAS ALSO NOT CONDUCTED ANY INQUIR Y WHETHER ANY WORK OF IMPROVEMENT WAS CARRIED OUT AT THE SITE PRIOR TO TH E SALE OF THE PLOT OF LAND ON 20.08.2009. THEREFORE, IN THE FACT AND CIRCUMSTA NCES OF THE CASE WHEN NEITHER THE ASSESSEE HAS PRODUCED THE CONCLUSIVE EV IDENCE FOR CARRYING OUT THE IMPROVEMENT WORK NOR THE AO CONDUCTED A PROPER INQUIRY TO REBUT THE CLAIM OF THE ASSESSEE IT IS PROPER TO ALLOW THE CLA IM OF THE ASSESSEE ON ITA 741/JP/19 SMT. MANISHA GABA VS. ITO 7 SOME ESTIMATE BASIS. ACCORDINGLY, A SUM OF RS. 40,0 00/- IS ALLOWED ON ACCOUNT OF COST OF IMPROVEMENT ON ESTIMATE BASIS. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/07/2019. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL; @ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26/07/2019 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. MANISHA GABA, ALWAR. 2. IZR;FKH @ THE RESPONDENT- THE ITO, WARD-1(5), ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 741/JP/19) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR