The ITO, Ward-2(1), JAMNAGAR V. Shri Lakhdhirsinh R. Rana, JAMNAGAR

ITA 816/RJT/2010

• Counselvise Citation: 81624914 RSA 2010
• Duration Of Justice: 3 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-09-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 26-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI
• Assessee Lawyers: CHETAN AGARWAL CA
• Keywords: Unexplained investment; Source of fund
• Section: 147; 69; 144; 69C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT .. .. BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. S RIVASTAVA AM ITA NO. 816/RJT/2010 / ASSESSMENT YEAR : 2002-03 INCOME-TAX OFFICER, WARD 2(1) JAMNAGAR ( / APPELLANT) SHRI LAKHDHIRSINH R RANA JASWANT SOCIETY, NAVAGAM GHED JAMNAGAR PAN : ACMPR 6872 P / RESPONDENT ! '# / REVENUE BY DR. JAYANT B. JHAVERI, DR $% ! '# / ASSESSEE BY SHRI CHETAN AGARWAL, CA ' & ' %( / DATE OF HEARING 11.09.2013 ) %( / DATE OF PRONOUNCEMENT 15.10.2013 / ORDER .. , / T. K. SHARMA, J. M. : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 21.01.2010 OF CIT(A)-JAM NAGAR FOR THE ASSESSMENT YEAR 2002-03. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME U/ S 139(1) ON 01.08.2002 DECLARING TOTAL INCOME AT RS.3,08,090/-, WHICH INTER-ALIA, CO MPRISING OF GROSS SALARY OF RS.88550/- , AGRICULTURAL INCOME OF RS.172500/- AND INCOME FRO M OTHER SOURCES AMOUNTING TO RS.47295/-. THE ASSESSING OFFICER FRAMED THE ASSES SMENT U/S 144 R.W.S. 147 ON 20.12.2007. IN THIS ASSESSMENT ORDER, THE ASSESSIN G OFFICER MADE ADDITION OF RS.10,00,000/- U/S 69 OF THE INCOME-TAX ACT BEING I NVESTMENT IN LIC BIMA NIVESH. THIS ADDITION WAS MADE MERELY ON THE GROUND THAT TH E ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS. ON APPEAL, THE LD CIT(A) DELETE D THE SAID ADDITION FOR THE DETAILED REASON GIVEN IN PARAGRAPH 5 OF THE IMPUGNED ORDER W HICH READS AS UNDER:- 5. I HAVE CAREFULLY CONSIDERED THE ISSUE AND GONE THROUGH RECORDS. IT IS SEEN THAT DURING THE YEAR UNDER CONSIDERATION, APPELLANT HAS MADE AN INVESTMENT OF RS.10,00,000/- IN LIC BIMA NIVAS. THE SAID INVESTME NT IS DULY REFLECTED IN COMPUTATION OF INCOME ON WHICH REBATE U/S 88 WAS CL AIMED. ALSO THE SAID INVESTMENT IS REFLECTED IN BALANCE SHEET UNDER THE HEAD INVESTMENT. THE APPELLANT WAS SALARIED EMPLOYEE OF JAMNAGAR NAGRIK SAHAKARI BANK LIMITED SINCE 1985 AND FILING INCOME TAX RETURNS REGULARLY. HE WAS ALSO HAVING SUBSTANTIAL AGRICULTURAL INCOME. COPIES OF INCOME T AX RETURN OF LAST THREE YEARS 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 2 WERE FILED. IGNORING THIS APPARENT FACT AND EVIDENC E, IN THE ASSESSMENT, THE ADDITION WAS SIMPLY MADE SINCE THE APPELLANT HAD NO T ATTENDED THE PROCEEDINGS AND THE ASSESSMENT WAS FRAMED U/S 144. THOUGH THE A SSESSMENT WAS FRAMED U/S 144, THE AO CANNOT IGNORE APPARENT FACTS AND EV IDENCE AS DONE. I DO NOT FIND ANY JUSTIFICATION IN MAKING ADDITION OF RS.10, 00,000/- DULY REFLECTED IN BALANCE SHEET FILED ALONG WITH RETURN AND FROM EARL IER YEARS RETURN, IT IS SEEN THAT APPELLANT WAS HAVING ENOUGH CASH BALANCE. PROV ISIONS OF SECTION 69 HAVE NO APPLICATION TO FACTS OF THE CASE SINCE THE INVES TMENT IS DULY REFLECTED IN BOOKS OF ACCOUNT AND IN THE BALANCE SHEET. THE CASE LAW R ELIED UPON BY AR ARE ALSO RELEVANT. THEREFORE THE ADDITION OF RS.10,00,000/- IS HEREBY DELETED. 3. AGGRIEVED WITH THE ORDER OF THE LD CIT(A), THE R EVENUE IS NOW IN APPEAL BEFORE THIS TRIBUNAL, ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.10,00,000/- MADE U/S 69C OF THE ACT ON ACCOUN T OF UNEXPLAINED INVESTMENT IN THE L.I.C. POLICY. 2. THE CIT (A) HAS ERRED IN LAW AND IN FACTS IN BAS ING HIS DECISION ON WRONG PRESUMPTION THAT THE INVESTMENT IS REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE & THE BOOKS OF ACCOUNTS OF THE ASSESSEE AN D THAT THE ASSESSEE HAD ENOUGH CASH BALANCE, PARTICULARLY WHEN THE ASSESSEE HIMSELF, IN ANSWER TO QUESTION NO.10 AND 11 OF THE STATEMENT DATED 25.09. 2006 RECORDED BY THE ITO (INV.), RAJKOT ACCEPTED THAT HE DID NOT MAINTAIN AN Y BOOKS OF ACCOUNTS. 3. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT TH E ASSESSEE NEVER PRODUCED HIS BOOKS OF ACCOUNTS AND DID NOT EVER PRO VE THE SOURCES OF INVESTMENT WITH COGENT EVIDENCE BEFORE THE AO. 4. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE C ASE, THE CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. IT IS THEREFORE PRAYED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THAT THE REVENUE CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUNDS OF APPEAL. 4. AT THE TIME OF HEARING, ON BEHALF OF THE REVENUE , DR. JAYANT B. JHAVERI, DR, APPEARED AND POINTED OUT THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS; THEREFORE THE ASSES SING OFFICER RIGHTLY MADE THE ADDITION OF RS.10,00,000/- U/S 69 OF THE INCOME-TAX ACT, 1961. AS AGAINST THIS, THE LD COUNSEL OF THE ASSESSEE SHRI CHETAN AGARWAL, CA POI NTED OUT THAT INVESTMENT OF RS.10,00,000/- IN LIC BIMA NIVAS IS SHOWN IN THE BA LANCE-SHEET AND ON THIS INVESTMENT REBATE U/S 88 WAS CLAIMED IN THE ORIGINAL RETURN OF INCOME. THE MAIN SOURCES OF INCOME OF THE ASSESSEE ARE SALARY AND AGRICULTURAL INCOME/ INTEREST INCOME. 5. THE LD COUNSEL OF THE ASSESSEE FURTHER POINTED O UT THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED SIX TIMES W ITHOUT ANY ADJOURNMENTS. THE FATHER OF THE ASSESSEE EXPIRED ON 12.10.2007 AND FO R THIS REASON THE ASSESSEE COULD 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 3 NOT PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE ASSESS ING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS. THE LD COUNSEL OF THE ASSES SEE FURTHER SUBMITTED THAT BOOKS OF ACCOUNT ARE AVAILABLE AND THE SAME CAN BE PRODUC ED. TO SUM-UP, THE LD COUNSEL OF THE ASSESSEE PLEADED THAT THE INVESTMENTS MADE BY T HE ASSESSEE IN LIC BIMA NIVES IS DULY RECORDED IN THE BOOKS OF ACCOUNT AND ALSO REFL ECTED IN THE BALANCE-SHEET, THEREFORE NO ADDITION U/S 69 OF THE INCOME-TAX ACT CAN BE MADE AND ON THIS GROUND ALONE THE VIEW TAKEN BY THE LD CIT(A) IN DELETING T HE ADDITION BE UPHELD; OR ALTERNATIVELY THE MATTER BE REMANDED TO THE FILE OF THE ASSESSING OFFICER TO ENABLE HIM TO EXAMINE THE BOOKS OF ACCOUNTS. IN REJOINDER, THE LD DEPART MENTAL REPRESENTATIVE POINTED OUT THAT NO SECOND INNINGS CAN BE ALLOWED TO THE ASSESS EE. 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY C ONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY, THE ASSESSEE HAS MAD E INVESTMENT OF RS.10,00,000/- IN LIC BIMA NIVAS FOR THE ASSESSMENT YEAR 2002-03 ON W HICH HE CLAIMED THE REBATE U/S 88 OF THE INCOME-TAX ACT IN THE RETURN OF INCOME FI LED ON 01.08.2002, WHICH IS EVIDENT FROM THE INCOME-TAX RETURN, STATEMENT OF INCOME, PR OFIT AND LOSS ACCOUNT AND BALANCE SHEET. IN THE IMPUGNED ORDER, THE LD CIT(A) DELETED THE ADDITION WITHOUT EXAMINING THE BOOKS OF ACCOUNTS WHICH WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD CIT (A) AND RESTORE THE ADDITION OF RS.10,00,000/- TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSEE SHALL PRODUCE THE BOOKS OF ACCOUNT AND IN TURN THE ASSESSING OFFICER WILL EXAMINE THE SAME AND RE-ADJUDICATE THIS ADDITION OF RS.10,00,00 0/- AFRESH IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- ( *.#. , % D. K. SRIVASTAVA ) ( .#. -. / T. K. SHARMA) #( '/ / ACCOUNTANT MEMBER '/ /JUDICIAL MEMBER /#- 0/1/ ORDER DATE 15.10.2013. /RAJKOT *BT 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 4 !'# $%'& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- INCOME-TAX OFFICER, WARD 2(1), JAMNAG AR 2. / RESPONDENT- SHRI LAKHDHIRSINH R RANA, JASWANT SO CIETY, NAVAGAM GHED, JAMNAGAR 3. '151 % & 6% / CONCERNED CIT, JAMNAGAR 4. & 6%- / CIT (A)-JAMNAGAR 5. :;< % , , / DR, ITAT, RAJKOT 6. <* >? / GUARD FILE /#- '# / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT