Sh. Bhavan Chand Bakshi, Kangra V. ITO, Palampur

ITA 835/CHANDI/2008

• Counselvise Citation: 83521514 RSA 2008
• Duration Of Justice: 3 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 23-09-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: ASHWANI KUMAR
• Section: 147; 69; 148; 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.835/CHD/2008 ASSESSMENT YEAR: 2000-01 SHRI BHAVAN CHAND BAKSHI V I.T.O. P ALAMPUR (HP) VPO CHADIAR TEHSIL BAIJNATH DISTT KANGRA, HP PAN: (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY: SMT. JAISHREE SHARMA DATE OF HEARING: 18.01.2012 DATE OF PRONOUNCEMENT: 17 .02.2012 ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), SHIMLA DATED 2.7.2008 RELATING TO ASSESSMENT YEAR 2000-01 AGAINS T THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF THE CIT(A) IS AGAINST LAW AN D FACTS ON THE FILE. 2. THAT THE PROCEEDINGS INITIATED U/S 147 IN THIS C ASE ARE ILLEGAL, ARBITRARY UNJUSTIFIED. 3. THAT THE CIT(A) IS NOT JUSTIFIED UPHOLDING ORDER OF ITO AND CONFIRMING THE ADDITION OF RUPEES 2,50,000/- MADE B Y AO IN THIS CASE. 4. THAT CIT(A) HAS ALSO FAILED TO APPRECIATE THE FA CTS THAT THE OBJECTIONS FILED BY THE APPELLANT AGAINST THE PROCE EDING INITIATED U/S 147 OF THE INCOME-TAX ACT WERE NOT DISPOSED OFF BY THE AO BEFORE THE COMPLETION OF THE ASSESSMENT, THE AO WAS BOUND TO D O THE DISPOSE OFF THE OBJECTION BY PASSING A ORDER, AS LAID DOWN BY THE H ON'BLE APEX COURT IN THE CASE OF GKN DRIVE SHAFT LTD V. ITO AND OTHERS, 259 ITR PAGE 19 SC. THIS FACT WAS IGNORED BY THE AO IN THIS CASE. 5. THAT ANY OTHER GROUNDS OF APPEAL MAY BE TAKEN UP AT THE TIME OF HEARING OF THE APPEAL. 3. THE ASSESSEE VIDE GROUND NO. 2 HAS CHALLENGED TH E VALIDITY OF PROCEEDINGS INITIATED U/S 147 OF THE INCOME-TAX ACT . FURTHER VIDE GROUND NO.3, 2 THE ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ADD ITION OF RS. 2,50,000/- MADE BY THE AO. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,71,360/- ON 5.3.2000. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED U/S 143( 1) OF THE ACT ON 18.2.2002. DURING THE ASSESSMENT PROCEEDINGS OF M/S TRILOK SIN GH & CO. WINE CONTRACTORS RELATING TO ASSESSMENT YEAR 2001-02, IT WAS OBSERVE D THAT THE ASSESSEE WAS PARTNER IN THAT CONCERN WITH 3% SHARE AGAINST WHICH HE HAD INVESTED RS. 8.00 LAKHS ON 11.3.2000 I.E. AT THE TIME OF AUCTION AT D HARAMSHALA, DISTT KANGRA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELATIN G TO AY 2001-02 IN THE CASE OF TRILOK SINGH & CO. WINE CONTRACTORS NEITHER THE FIRM NOR THE PARTNERS FURNISHED SOURCES OF CAPITAL INVESTED IN THE SAID F IRM. CONSEQUENTLY, THE CASE OF THE ASSESSEE WAS REOPENED UNDER THE PROVISIONS O F SECTION 147 OF THE ACT AND NOTICE U/S 148 OF THE ACT WAS ISSUED ON 23.3.20 05. THE ASSESSEE EXPLAINED RS. 5.00 LAKHS TO BE TRANSFERRED FROM THE FIRM M/S JAISINGHPUR WINE CONTRACTOR IN WHICH HE WAS PARTNER AND THE REMAINING WAS CLAIM ED TO BE INVESTED OUT OF INCOME FROM OTHER SOURCES. THE AO REJECTED THE SOUR CE OF DEPOSIT OF RS. 3.00 LAKHS, CREDIT OF RS. 50,000/- WAS ALLOWED TO THE AS SESSEE AND THE BALANCE INVESTMENT OF RS. 2.50 LAKHS WAS ADDED AS INCOME OF THE ASSESSEE U/S 69 OF THE ACT. 5. BEFORE THE CIT(A), THE LD. AR FOR THE ASSESSEE CHALLENGED THE REOPENING OF PROCEEDINGS U/S 147/148 OF THE ACT ALLEGING THAT BOTH THE CASES OF THE FIRM AND THE PARTNERS TOTALING 31 CASES WERE REOPENED BY THE AO AND THE CIT GRANTED PERMISSION BY A SINGLE LETTER WITHOUT SEEIN G THE FILES AND HENCE THE REOPENING WAS BAD. IN RESPECT OF MERITS OF THE CAS E, IT WAS POINTED OUT BY THE LD. AR FOR THE ASSESSEE THAT THE TOTAL INCOME DECLA RED DURING ASSESSMENT YEAR 1994-95 TO 1998-99 WORKS OUT TO RS. 2,72,750/- WHIC H AMOUNT WAS INVESTED IN THE FIRM M/S TRILOK SINGH AND CO. THE SAID INVESTM ENT WAS IN ADDITION TO CAPITAL OF RS. 5.00 LAKHS TRANSFERRED FROM BOOKS OF M/S JAISINGHPUR WINE CONTRACTORS. AS PER THE LD. AR FOR THE ASSESSEE TH E SAID AMOUNT WAS NOT 3 CONSIDERED BY THE AO IN THE PRESENT CASE. THE CIT(A ) REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST REOPENING OF ASSESSM ENT U/S 147/148 OF THE ACT. THE SECOND PLEA OF THE ASSESSEE AGAINST MERITS OF T HE CASE WAS ALSO REJECTED BY THE CIT(A) OBSERVING THAT THE INCOME FROM OTHER SOU RCES OF THE ASSESSEE FROM YEAR TO YEAR IS ON THE LOWER SIDE AND IT WAS NOT AC CEPTABLE THAT THE ASSESSEE WAS KEEPING ALL THE CASH AT HOME FOR FIVE TO SIX YE ARS. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). 6. SHRI ASHWANI KUMAR, THE LD. AR FOR THE ASSESSEE AND SMT. JAISHREE SHARMA, THE LD. DR FOR THE REVENUE PUT FORWARD THE IR CONTENTIONS. 7 WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE R ECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE INITIA TION OF RE-ASSESSMENT PROCEEDINGS U/S 147/148 OF THE ACT. THE SECOND ISS UE RAISED BY THE ASSESSEE IS AGAINST THE MERITS OF THE ADDITION TOTALING RS. 2,5 0,000/-. THE ASSESSEE IN THE RETURN OF INCOME HAD DECLARED SALARY AND INTEREST I NCOME FROM FIRM M/S JAISINGHPUR, WINE CONTRACTORS. DURING THE YEAR UND ER CONSIDERATION THE ASSESSEE HAD INVESTED RS. 8.00 LAKHS WITH ANOTHER P ARTNERSHIP FIRM ON 11.3.2000. THE SOURCE OF INVESTMENT OF THE AFORES AID CAPITAL INTRODUCTION OF RS. 8.00 LAKHS WAS EXPLAINED BY THE ASSESSEE TO BE MADE OUT OF WITHDRAWALS FROM THE CONCERN M/S JAISINGHPUR, WINE CONTRACTORS IN WHICH HE WAS PARTNER AND OUT OF HIS PAST SAVINGS OF INCOME FROM OTHER SO URCES. A SUN OF RS. 5.00 LAKHS WAS DEBITED TO THE CONCERN M/S JAISINGHPUR WI NE CONTRACTORS AND THE SOURCES OF INVESTMENT TO THE EXTENT OF RS. 5.00 LAK HS WAS ADMITTED BY THE AO. HOWEVER, SOURCE OF THE BALANCE CAPITAL INTRODUCTION OF RS. 3.00 LAKHS CLAIMED TO BE OUT OF HIS INCOME FROM OTHER SOURCES, WAS HEL D TO BE NON-VERIFIABLE / NON- EXPLAINABLE BY THE ASSESSEE AND ADDITION ON THAT AC COUNT WAS MADE IN THE HANDS OF THE ASSESSEE AFTER ALLOWING CREDIT OF RS. 50,000 /-. 8 WE FIND THAT THE ASSESSEE HAS BEEN DECLARING HIS TRUCK INCOME, OTHER SOURCES INCOME AND AGRICULTURAL INCOME FROM YEAR TO YEAR. THE YEAR UNDER CONSIDERATION BEFORE US IS ASSESSMENT YEAR 2000-01. THE INCOME OF THE 4 ASSESSEE FOR ASSESSMENT YEAR 1994-95 TO 1998-99 WAS CONSIDERED BY THE AO AND CAPITAL ACCOUNT FURNISHED BY THE ASSESSEE ALONG WITH THE RETURN FILED PURSUANT TO NOTICE U/S 148 OF THE ACT WAS ALSO TAKE N INTO ACCOUNT. THE AO DISMISSED THE CAPITAL ACCOUNT FURNISHED BY THE ASSE SSEE ALONG WITH THE RETURN FURNISHED IN RESPONSE TO NOTICE U/S 148 OF THE ACT AS NO SUCH CAPITAL ACCOUNT WAS FILED ALONG WITH ORIGINAL RETURN OF INCOME. THE ASSESSEE, ON THE OTHER HAND, HAS FURNISHED YEARWISE DETAILS OF THE INCOME EARNED BY HIM WHICH IS AS UNDER:- ASSESSMENT YEAR - 1994-95 TRUCK INCOME RS. 30,000/- AGRICULTURAL INC RS. 18,500/- OTHER SOURCES RS. 21,000/- TOTAL RS. 69,500/- ASSESSMENT YEAR - 1995-96 TRUCK INCOME RS. 24,000/- AGRICULTURAL INC RS. 24,000/- OTHER SOURCES RS. 17,250/- TOTAL RS. 65,250/- ASSESSMENT YEAR - 1996-97 TRUCK INCOME RS. 24,000/- AGRICULTURAL INC RS. 24,000/- OTHER SOURCES RS. 17,000/- TOTAL 65,000/- ASSESSMENT YEAR - 1997-98 TRUCK INCOME RS. 28,000/- AGRICULTURAL INC RS. 25,000/- TO0TAL 53,000/- ASSESSMENT YEAR - 1998-99 AGRICULTURAL INC RS. 20,000/- TOTAL 20,000/- RS. 2,72,750/- 9 THE ABOVE INCOME REFLECTED IN THE CHART HAS BEEN DECLARED BY THE ASSESSEE DURING ASSESSMENT YEARS 1994-95 TO 1998-99 , WHICH IS IN ADDITION TO ITS INCOME FROM WINE CONTRACTORS. THE TOTAL INCOME FROM OTHER SOURCES IN THE AFORESAID ASSESSMENT YEARS WORKED OUT TO RS. 2,72,7 50/- WHICH HAS ALSO BEEN 5 ACKNOWLEDGED BY THE CIT(A) IN HER ORDER. IN THE TO TALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE ASSESSEE HAS BE EN DECLARING INCOME FROM OTHER SOURCES UNDER VARIOUS HEADS IN ADDITION TO SH ARE OF PROFIT/INCOME FROM WINE CONTRACTORS, THE AVAILABILITY OF CASH IN THE H AND OF THE ASSESSEE STANDS EXPLAINED. THE AO IN THE PRESENT CASE HAD ALLOWED CREDIT OF RS. 50,000/-, WHICH WAS UPHELD BY THE CIT(A). THE TOTAL INVESTME NT CLAIMED BY THE ASSESSEE OUT OF HIS INCOME FROM OTHER SOURCES IS RS. 3.00 LA KHS. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE V IEW THAT THE SOURCE OF INVESTMENT OF RS. 2,00,000/- STANDS EXPLAINED. ACCO RDINGLY THE ASSESSEE IS ENTITLED TO RELIEF OF RS. 1,50,000/- AS RS. 50,000/ - HAS BEEN ALLOWED BY THE AO FROM THE SAID SOURCE OF INCOME. THE BALANCE ADDITI ON OF RS. 1,00,000/- IS CONFIRMED IN THE HANDS OF THE ASSESSEE. GROUND NO. 3 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 10. IN VIEW OF PARTLY ALLOWING THE APPEAL OF THE AS SESSEE ON MERITS, WE ARE NOT ADDRESSING THE ISSUE OF INITIATION OF PROCEEDI NGS U/S 147/148 OF THE ACT. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF FEBRUARY, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17.02.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR