Rubina Mittal, Delhi V. DCIT, New Delhi

ITA 887/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3341 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 13-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 13-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RIDHI KARAN AGGARWAL
• Keywords: Search and seizure; Salary income
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.887/DEL/2015 ASSESSMENT YEAR : 2011-12 RUBINA MITTAL, R 29, VIKAS MARG, SHAKARPUR, DELHI. VS. DCIT, CENTRAL CIRCLE- 17, NEW DELHI. PAN : AALPM8089Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RIDHI KARAN AGGARWAL, CA DEPARTMENT BY : MS. YAMINI, SR.DR DATE OF HEARING : 21-11-2017 DATE OF PRONOUNCEMENT : 21-11-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 10.11.2014 OF CIT(A)- XXXII, NEW DELHI RELATING TO ASSESSMENT YEAR 2011-12. 2. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNA L FOR NON-PROSECUTION. SUBSEQUENTLY, THE TRIBUNAL VIDE ORDER DATED 06.10.2 017 IN MA NO.360/DEL/2016 RECALLED ITS EARLIER ORDER. HENCE, THIS IS A RECALLED MATTER. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 01.02.2013 DECLARING TOTAL INCOME OF RS.15,02,078/-. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE I.T. AC T WAS CONDUCTED AT THE BUSINESS/RESIDENTIAL PREMISES OF THE ASSESSEE ON 19 .10.2010. THE ASSESSEE DERIVES INCOME FROM SALARY AND BUSINESS. SHE IS A PROFESSOR AT A COLLEGE OF 2 ITA NO.887/DEL/2015 DELHI UNIVERSITY AND IS ALSO ENGAGED IN A PROPRIETA RY BUSINESS OF PROVIDING TEMPORARY INFRASTRUCTURE FACILITIES FOR VARIOUS EVE NTS UNDER THE NAME OF PINNACLE DESIGNS AND EXHIBITS. SHE ALSO RECEIVES DIRECTORS REMUNERATION FROM A COMPANY. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED THE FOLLOWIN G EXPENSES IN HER PROFIT & LOSS ACCOUNT :- (I) MOTOR EXPENSES RS.2,29,570/- (II) LABOUR EXPENSES RS.5,40,750/- (III) INSURANCE EXPENSES RS. 20,280/- TOTAL RS.7,90,600/- 5. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROV E THAT THE ABOVE EXPENSES HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE WITH DOCUMENTARY EVIDENCES. IT WAS EXPLAINED BY THE ASS ESSEE THAT IT IS VERY DIFFICULT TO OBTAIN VOUCHER/BILLS ON ALL OCCASIONS FOR THE EX PENSES OF THE ABOVE NATURE. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE, TH E ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.1,58,120/- BEING 1/5 TH OF SUCH EXPENSES. 5.1 SIMILARLY, THE ASSESSING OFFICER ALSO MADE ADDI TION OF RS.9,20,000/- BEING CASH FOUND DURING THE COURSE OF SEARCH FROM T HE RESIDENCE OF THE ASSESSEE AT 26A FIROZSHAH ROAD, NEW DELHI. HE OBSERVED THAT IN THE STATEMENT RECORDED 3 ITA NO.887/DEL/2015 DURING THE COURSE OF SEARCH, THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. IT WAS REPLIED BY THE ASSESSEE THAT AN AMOUNT OF RS.2,50,0 00/- REPRESENTS HER SAVINGS AND THE EXPLANATION FOR THE REMAINING AMOUNT WOULD BE FURNISHED IN DUE COURSE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER AGAIN ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH FOUND. IT W AS SUBMITTED BY THE ASSESSEE THAT RS.5,00,000/- BELONGS TO HER OUT OF HER PERSON AL SAVINGS OVER THE YEARS AND RS.1,00,000/- BELONGS TO HER MOTHER-IN-LAW SMT. MRI DULA MITTAL AND AN AMOUNT OF RS.3,20,000/- BELONGS TO THE PROPRIETARY CONCERN OF THE ASSESSEE. THE ASSESSING OFFICER OBSERVED THAT AS PER THE BOOKS TH E CASH IN HAND COMES TO RS.1,08,441/- WHEREAS THE ASSESSEE IS CLAIMING THAT CASH OF RS.3,20,000/- BELONGS TO THE PROPRIETARY FIRM. THE ASSESSING OFF ICER CONFRONTED THE SAME TO THE ASSESSEE. REJECTING THE VARIOUS EXPLANATION GI VEN BY THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITION OF RS.9,20,000/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH U/S 69A OF THE I.T. AC T. 6. IN APPEAL, THE LD. CIT(A) RESTRICTED THE DISALLO WANCE TO 10% OF THE EXPENSES AS AGAINST 20% MADE BY THE ASSESSING OFFIC ER IN CASE OF MOTOR CAR EXPENSES AND INSURANCE. HOWEVER, HE DELETED THE DI SALLOWANCE OF LABOUR EXPENSES. SO FAR AS THE ADDITION ON ACCOUNT OF CAS H FOUND DURING THE COURSE OF SEARCH IS CONCERNED, THE LD. CIT(A) DELETED THE ADD ITION TO THE EXTENT OF RS.3,20,000/- WHICH ACCORDING TO HIM WAS PART OF RE GULAR BOOKS OF ACCOUNT OF 4 ITA NO.887/DEL/2015 THE ASSESSEE. HE, HOWEVER, SUSTAINED THE ADDITION OF RS.6,00,000/- BY OBSERVING AS UNDER :- 14. I HAVE CONSIDERED THE FACTS OF THE CASE, THE W RITTEN SUBMISSIONS OF THE APPELLANT AND THE FINDING GIVE BY THE ASSESSING OFF ICER IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION ON THE GROUND THAT THE EXPLANATION GIVE BY THE APPELLANT WITH REGARD TO THE SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH AMOUNTING TO RS.9,20,000/- WAS NOT SUBSTANTI ATED WITH ANY EVIDENCE. OUT OF THE TOTAL CASH OF RS.9,20,000/- FOUND, THE APPELLAN T CLAIMED THAT AN AMOUNT OF RS.5,00,000/- BELONGED TO HER OUT OF HER PERSONAL S AVINGS OVER THE YEARS AND RS.1 LAC BELONGED TO HER MOTHER IN LAW. HOWEVER, THE APPELL ANT COULD NOT SUBSTANTIATE HIS CLAIM WITH ANY COGENT EVIDENCE. THE ASSESSING OFFI CER HAD RIGHTLY POINTED OUT THAT IT WAS NOT POSSIBLE TO HAVE A CASH SAVING OF RS.5 LACS OUT OF THE CUMULATIVE DRAWINGS OF RS.12,20,000/- MADE FOR HOUSE HOLD EXPENSES DURING THE PERIOD 1.04.2004 TO 31.03.2011. THE APPELLANT ALSO DID NOT EXPLAIN AS TO WHY SHE HAD KEPT THE ACCUMULATED SAVINGS IN CASH WITH HER INSTEAD OF DEP OSITING THE SAME IN HER BANK ACCOUNT. SIMILARLY, NO COGENT EVIDENCE WAS FURNISH ED WITH REGARD TO THE CASH OF RS.1 LAC CLAIMED TO BE BELONGING TO THE APPELLANTS MOTH ER. IN VIEW OF THESE FACTS, IT WAS RIGHTLY HELD BY THE ASSESSING OFFICER THAT THE AMOU NT OF RS.6 LACS CLAIMED TO BE BELONGING TO HERSELF AND HER MOTHER WAS UNEXPLAINED AS IT WAS NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCE AND, THEREFORE, ADDED BACK T O THE INCOME OF THE APPELLANT. 7. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE G ROUNDS RELATING TO MOTOR CAR EXPENSES AND LABOUR EXPENSES. IT IS PERTINENT TO MENTION HERE THAT THE LD. CIT(A) HAS ALREADY DELETED THE ENTIRE LABOUR EXPENS ES AND, THEREFORE, THE GROUND RELATING TO DISALLOWANCE OF LABOUR EXPENSES IS A FR IVOLOUS ONE. 9. SO FAR AS INSURANCE EXPENSES IS CONCERNED, THE S AME RELATES TO DISALLOWANCE OF RS.2028/- BEING 10% OF RS.20,280/-. CONSIDERING THE SMALLNESS OF THE AMOUNT AND CONSIDERING THE FACTS O F THE CASE THAT ONE OF THE VEHICLE IS A COMMERCIAL VEHICLE, THE DISALLOWANCE O F RS.2028/- SUSTAINED BY THE 5 ITA NO.887/DEL/2015 LD. CIT(A), IN MY OPINION, IS UNCALLED FOR. ACCORD INGLY, THE SAME IS DIRECTED TO BE DELETED. 10. SO FAR AS THE ADDITION OF RS.6,00,000/- IS CONC ERNED, I FIND THE LD. CIT(A) SUSTAINED THE ADDITION ON THE GROUND THAT THE ASSES SEE COULD NOT SUBSTANTIATE THE SOURCE WITH ANY COGENT EVIDENCE. SHE DID NOT EXPLA IN AS TO WHY SHE HAD GOT THE ACCUMULATED SAVINGS OF RS.5,00,000/- IN CASH WITH H ER INSTEAD OF DEPOSITING THE SAME IN HER BANK ACCOUNT. SIMILARLY, THE LD. CIT(A ) HAS OBSERVED THAT NO COGENT EVIDENCE WAS FURNISHED WITH REGARD TO THE CASH OF R S.1,00,000/- CLAIMED TO BE BELONGING TO THE ASSESSEES MOTHER. IT IS THE SUBM ISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY, SHE WILL BE IN A POSITION TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER REGARDING THE AVAILABILITY OF CASH OF RS.5,00,000/- WITH THE ASSE SSEE AND CASH OF RS.1,00,000/- AVAILABLE TO HER MOTHER-IN-LAW. CONSIDERING THE TO TALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GRANT ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATIS FACTION OF THE ASSESSING OFFICER REGARDING THE AVAILABILITY OF CASH OF RS.5, 00,000/- WITH ASSESSEE AND RS.1,00,000/- WITH HER MOTHER-IN-LAW. THE ASSESSIN G OFFICER SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROU ND RAISED BY THE ASSESSEE ON THIS ISSUE IS ACCORDINGLY ALLOWED FOR STATISTICAL P URPOSES. 6 ITA NO.887/DEL/2015 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON THIS 21 ST DAY OF NOVEMBER, 2017. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 21-11-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI