DCIT, New Delhi V. Shri S. Satyamoorthy, New Delhi

ITA 853/DEL/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0624 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 14-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 09-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAOREM
• Assessee Lawyers: S NANDA
• Keywords: Unexplained investment; Additional evidence
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE SHRI A. D. JAIN, JM AND SHRI K. D. RANJ AN, AM I. T. A. NO. 853 (DEL) OF 2009 ASSESSMENT YEAR : 2005-06. DY. COMMISSIONER OF INCOME-TAX, SHRI S. SATHYA MOORTHY, C/O. SHRI S. N. NANDA & CO., C I R C L E : 40 (1), VS. C 43 , PAMPOSH ENCLAVE, GREATER KAILASH I, N E W D E L H I. N E W D E L H I. P A N / G I R NO. AOG PS 4206 Q. ( APPELLANT ) ( RESPON DENT ) ASSESSEE BY : SHRI S. NANDA, C. A.; DEPARTMENT BY : MS. BANITA DEVI NAOREM, SR. D. R .; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 200 5-06 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)XXX, NEW DELHI. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REPRODUCED AS UNDER :- ' (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT (APPEALS)-XXX, NEW DELHI, HAS ERRED IN DELETING THE FOLLOWING ADDI TIONS :- 1. UNEXPLAINED DEPOSITS IN BANK ACCOUNT AMOUNTING TO R S.43,22,014/-; 2. UNEXPLAINED INVESTMENT IN FLAT AMOUNTING TO RS.15,0 0,000/-; 2 I. T. A. NO. 853 (DEL) OF 2009 3. INCOME ASSESSED UNDER THE HEAD INCOME FROM HOUSE PR OPERTY AT RS.44,772/- ON ACCOUNT OF DISALLOWANCE OF HOUSE TAX PAYMENT AND INTEREST ON BORROWED CAPITAL; (2.) WITHOUT ALLOWING THE AO A REASONABLE OPPORTU NITY TO EXAMINE THE ADDITIONAL EVIDENCE / DOCUMENTS PRODUCED BY THE ASS ESSEE (OR TO PRODUCE EVIDENCE / DOCUMENT IN REBUTTAL OF ADDITIONAL EVID ENCE), IN CONTRAVENTION OF RULE 46-A OF INCOME TAX RULES, 1962. 3. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT T HE ASSESSEE RECEIVED SALARIES FROM CONTROLLER & AUDITOR GENERAL OF INDIA TILL 31 ST DECEMBER, 2004 AND PENSION THEREAFTER. HE ALSO EA RNED SALARY OF RS.2,36,979/- FROM 1.01.2005 TO 31 ST MARCH, 2005 FROM BEARING POINT INC. THE RETURN OF INCOME FILED WAS PROCESSED UNDER SECTION 143(1) AND THE CASE WAS SELECTED UNDER CASS. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH THE COPIES OF BANK ACCOUNTS FROM 1.04.2004 TO 31 ST MARCH, 2004, COPY OF SALE DEED FOR HOUSE PROPERTIE S WHICH HAVE BEEN RENTED OUT AND COPIES OF RENT AGREEMENTS, DETAILS OF INVESTMENTS MADE IN THE YEAR AND A NOTE ON HOUSE-HOLD EXPENSES. IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAD PURCHASED A FLAT IN E-91, GREATER KAILASH I, NEW DELHI, FOR RS.15,00,000/- ON 6/09/2004. THE ASSESSING OFFICER FURTHER MADE ENQUIRIES WITH REFERENCE TO FLATS AT AHMEDABAD, MADRAS AND DE LHI, COPY OF SALE DEED IN RESPECT OF GREATER KAILASHI PROPERTY. HE WAS ALSO ASKED TO PRODUCE T HE COPY OF BANK STATEMENTS. SINCE NOBODY ATTENDED THE ASSESSING OFFICER PASSED ORDER UNDER S ECTION 143(3) IN THE MANNER READ WITH SECTION 144 OF THE ACT. THE ASSESSING OFFICER FROM THE BAN K STATEMENT NOTED THAT THERE WERE DEPOSITS OF RS.53,79,228=52 OUT OF WHICH DEPOSITS OF RS.19,45,0 00/- WORTH BY WAY OF CASH. AS PER THE RETURN OF INCOME FOR ASSESSMENT YEAR 2005-06 THE IN COME OF THE ASSESSEE WAS ONLY RS.7,33,673/-. THE ASSESSING OFFICER TREATED THE DEPOSITS OF RS.23 ,77,014/- AS UNEXPLAINED AFTER GIVING CREDIT TO SALARY RECEIPTS AND RECEIPTS FROM RENT. THE ASSESS ING OFFICER ALSO ADDED THE AMOUNT OF RS.15,00,000/- ON ACCOUNT OF PURCHASE OF GREATER KA ILASHI PROPERTY. THE ASSESSING OFFICER ADDED THE INTEREST OF RS.17,060/-. THE ASSESSING O FFICER ALSO COMPUTED INCOME FROM HOUSE PROPERTY SITUATED AT AHMEDABAD, MADRAS AND DELHI. 4. ON APPEAL IT WAS SUBMITTED THAT THE ASSESSEE WAS DY. CONTROLLER AND AUDITOR GENERAL OF INDIA. HE RETIRED ON 31 ST DECEMBER, 2004 AND ON RETIREMENT HE RECEIVED PAYME NTS OF GPF, LEAVE 3 I. T. A. NO. 853 (DEL) OF 2009 ENCASHMENT ETC. AMOUNTING TO RS.30,59,610/- BY WAY OF CHEQUE, WHICH WERE DEPOSITED IN TWO BANK ACCOUNTS MAINTAINED IN STATE BANK OF PATIALA A ND CANARA BANK. THE ASSESSING OFFICER HAD MADE ADDITION UNDER SECTION 144 WITHOUT AFFORDING A NY OPPORTUNITY TO THE ASSESSEE. IT WAS ALAO SUBMITTED THAT ALL THE DEPOSITS WERE EXPLAINABLE FR OM VARIOUS SOURCES. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION IN RESPECT OF BANK DEPOSITS. IT WAS ALSO SUBMITTED THAT THE INVESTMENT IN THE PROPERTY IN GREATER KAIL ASHI WAS ALSO EXPLAINED WHICH WAS PURCHASED AFTER WITHDRAWING THE AMOUNT OF RS.14,95,000/- FROM STATE BANK OF PATIALA AND RS.1,60,000/- FROM CANARA BANK. THE LD. CIT (APPEALS) AFTER CONS IDERING THE REPLY DELETED ALL THE ADDITIONS BY OBSERVING AS UNDER :- 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSION S MADE ON BEHALF OF THE APPELLANT AS ALSO THE DOCUMENTS / EVIDENCES PRODUCE D BY HIM. I FIND THAT ALTHOUGH INITIALLY, ALL THE DOCUMENTS / INFORMATION THAT HAD BEEN REQUISITIONED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS WERE PRODUCED BY THE ASSESSEES COUNSEL, CERTAIN OTHER NOTICES / CLA RIFICATIONS / INFORMATIONS REQUISITIONED BY THE ASSESSING OFFICER TOWARDS THE END, COULD NOT BE FURNISHED BECAUSE ACCORDING TO THE APPELLANT, THE NOTICES WER E NOT RECEIVED BY THE APPELLANT IN TIME AS THESE WERE SENT VERY LATE AND IN ANY CAS E THERE WAS HARDLY ANYTIME LEFT FOR PROPER COMPLIANCE. CONSIDERING THE FACTS AND C IRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE PROVISIONS OF SECTION 144 OF T HE I. T. ACT ARE NOT APPLICABLE IN THIS CASE. HOWEVER, SINCE THE ORDER HAS BEEN PASSE D UNDER SECTION 143(3) / 144 OF THE I. T. ACT, THE CASE IS BEING DECIDED ON MERITS ALSO. 5.1 THE ADDITIONS TO THE TOTAL INCOME AT DECL ARED BY THE APPELLANT HAVE BEEN MADE ON THE BASIS THAT THERE WERE SUBSTANTIAL DEPOS ITS [RS.43,22,014/-] IN THE BANK ACCOUNTS WHICH COULD NOT BE EXPLAINED BY THE A SSESSEE. HOWEVER, IT IS SEEN THAT ALL THESE DEPOSITS ARE IN FACT, THE RETIREMENT BENEFITS RECEIVED BY THE APPELLANT AT THE TIME OF HIS SUPERANNUATION. THE NECESSARY E VIDENCE, I.E. DETAILS OF CHEQUES RECEIVED VIS--VIS THE DEPOSITS MADE IN THE BANK AC COUNTS HAS BEEN EXAMINED BY ME AND I AM SATISFIED THAT THE DEPOSITS ARE EXPLAIN ED. THE ADDITION OF RS.43,22,014/- IS DELETED. 4 I. T. A. NO. 853 (DEL) OF 2009 5.2 THE ADDITION MADE BY TREATING THE INVESTMEN T IN THE DELHI FLAT AMOUNTING TO RS.15,00,000/- HAS ALSO BEEN EXPLAINED BY THE APPEL LANT ALONG WITH PROPER EVIDENCES AND HENCE, THIS ADDITION IS ALSO DELETED. 5.3 THE 4 TH GROUND OF APPEAL RELATES TO ADDITION OF RS.44,772/ - AND THE APPELLANT HAS EXPLAINED BEFORE ME THAT THIS ADDITIO N HAS BEEN MADE BECAUSE THE ASSESSING OFFICER HAS ERRONEOUSLY NOT ALLOWED THE D EDUCTION OF INTEREST PAID AN HOUSING LOAN AGAINST THE INCOME FROM HOUSE PROPE RTY. HE HAS PRODUCED BEFORE ME THE CERTIFICATES FROM GIC HOUSING FINANCE LTD. AND STATE BANK OF PATIALA REGARDING PAYMENT OF INTEREST AN HOUSING LO AN AS ALSO A CALCULATION OF HOUSE PROPERTY INCOME AND I FIND THAT HE HAD IN FACT INCURRED A LOSS FROM THE HOUSE PROPERTY. THE ADDITION OF RS.44,772/- AS INC OME FROM HOUSE PROPERTY IS THEREFORE DELETED. 5.4 AS REGARDS THE OTHER GROUND OF APPEAL THAT THE DEDUCTION UNDER SECTION 80-L HAS NOT BEEN ALLOWED AGAINST INTEREST INCOME, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION TO THE APPELLANT AS PER LAW. 5.5 THE OTHER GROUNDS OF APPEAL RELATING TO CHA RGING OF INTEREST UNDER SECTION 234-A AND 234-C ARE CONSEQUENTIAL AND NO ADJUDICATI ON IS CALLED FOR. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE LD. CIT (A) IT IS EVIDENT THAT THE AO REQUISITIONED DOCUMENTS / INFORMATION WERE PRODUCED BEFORE THE AO. THE ASSESSEE COULD NOT SUB MIT CLARIFICATION BECAUSE THE NOTICES WERE RECEIVED BY THE ASSESSEE VERY LATE AND THERE WAS NO TIME LEFT FOR PROPER COMPLIANCE. THE LD. CIT (A), THEREFORE, CAME TO THE CONCLUSION THAT PROVISI ONS OF SECTION 144 OF THE ACT WERE NOT APPLICABLE. THE LD. CIT (A) HAS RECORDED A FINDING OF FACT THAT THE DEPOSITS IN THE BANK ACCOUNTS WERE OUT OF RETIREMENT BENEFITS ON HIS SUPERANNUATI ON. THE ASSESSEE HAD RETIRED FROM THE POST OF DY. CONTROLLER AND AUDITOR GENERAL OF INDIA. THE ADDITION MADE IN THE INVESTMENT OF PROPERTY AT DELHI AT RS.15 LAKHS HAS ALSO BEEN EXPLAINED BY THE ASSESSEE WITH PROPER EVIDENCE. THE LD. CIT (A) HAS RECORDED A FINDING OF FACT IN THIS REGA RD. AS REGARDS THE ADDITION OF RS.44,742/-, IT HAS BEEN SUBMITTED THAT THE AO HAD NOT ALLOWED DEDU CTION OF INTEREST PAID ON HOUSING LOAN 5 I. T. A. NO. 853 (DEL) OF 2009 AGAINST THE PROPERTY INCOME. CERTIFICATE FROM GIC HOUSING FINANCE AND STATE BANK OF PATIALA REGARDING THE PAYMENT OF INTEREST ON HOUSING LOAN W AS ALSO FILED. THEREFORE, THE LD. CIT (A) HAS ALSO RECORDED CATEGORICAL FINDINGS IN THIS REGARD W HILE DELETING THE ADDITIONS MADE BY THE AO. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER PASSED BY THE LD. CIT (A). AS REGARDS THE ADMISSION OF ADDITIONAL EVIDENCE WE FIND FROM THE O RDER OF THE LD. CIT (A) THAT NO ADDITIONAL EVIDENCE WAS FILED BEFORE HIM, BUT CERTAIN CLARIF ICATIONS WERE SOUGHT BY AO ON THE EVIDENCE FILED BEFORE HIM WHICH COULD NOT BE FURNISHED BECAU SE OF PAUCITY OF TIME. ACCORDINGLY, IN OUR CONSIDERED OPINION, THERE IS NO MERIT IN THE CONTEN TION OF THE REVENUE THAT ADDITIONAL EVIDENCE HAS BEEN ADMITTED IN CONTRAVENTION OF PROVISIONS OF RULE 46-A OF THE ACT. DURING THE COURSE OF HEARING BEFORE US THE REVENUE COULD NOT PRODUCE ANY EVIDENCE TO SUGGEST THAT THE LD. CIT (A) HAD ADMITTED ADDITIONAL EVIDENCE. HENCE, THIS CONT ENTION OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14 TH JANUARY, 2011, ON CONCLUSION OF THE HEARING. SD/- SD/-. [ A. D. JAIN ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH FEBRUARY, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.