SHRI RADHEY SHYAM SHARMA, Jaipur V. ACIT, Alwar

ITA 901/JPR/2011

• Counselvise Citation: 90123114 RSA 2011
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2002-2003
• Appeal Filed On: 24-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Keywords: Loose papers; Source of fund; Non compliance
• Section: 143(3); 153A

Judgement Text

1 ITA 901(7)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER ITA NO. 901 TO 907/JP/2011 ASSTT. YEARS : 2002-03 TO 07-08. SHRI RADHEY SHYAM SHARMA, VS. THE ACIT, CENTRAL C IRCLE, 2649, SHYAM BHAWAN, KHEJANE WALO ALWAR. KA RASTA, CHANDPOLE BAZAR, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANISH AGARWAL RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 16.02.2012. DATE OF PRONOUNCEMENT : 07.03.2012. ORDER DATE OF ORDER : 07/03/2012. PER R.K. GUPTA, J.M. THESE ARE SEVEN APPEALS BY ASSESSEE AGAINST THE OR DER OF LD. CIT (A) RELATING TO ASSESSMENT YEARS 2002-03 TO 2007-08. 2. ALL THESE APPEALS ARE FILED LATE BY 17 DAYS. CON DONATION APPLICATIONS ARE PLACED ON RECORD. AFTER TAKING INTO CONSIDERATION THE CONTEN TS OF CONDONATION APPLICATION THAT ASSESSEE HANDED OVER ALL THE PAPERS TO HIS LEGAL AD VISER WHO COULD NOT FILE APPEAL IN TIME. I FIND THAT THERE WAS BONA FIDE IN FILING THE APPEA LS LATE BY 17 DAYS. THEREFORE, I CONDONE THE DELAY IN FILING THE APPEAL LATE IN ALL THESE CA SES. 3. APPEAL IN ITA NO. 902/JP/2011 RELATES TO CONFIRM ING PENALTY OF RS. 10,000/- UNDER SECTION 271(1)(B) OF I.T. ACT. THIS APPEAL I S TAKEN FIRST. 2 4. THE ASSESSEE IS OBJECTING IN UPHOLDING PENALTY O F RS. 10,000/- LEVIED UNDER SECTION 271(1)(B) OF THE ACT. 5. NOTICE UNDER SECTION 153A DATED 29.05.2009 WAS I SSUED TO THE ASSESSEE. IN VIEW OF NON COMPLIANCE BY ASSESSEE, NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(B) DATED 27.8.2009 WAS ISSUED FOR COMPLIANCE TO BE MAD E ON 8.9.2009. HOWEVER, ASSESSEE FAILED TO FURNISH EXPLANATION OF THE SHOW CAUSE NOT ICE OF PENALTY. THEREFORE, AO LEVIED A PENALTY OF RS. 10,000/- UNDER SECTION 271(1)(B). TH E LD. CIT (A) ALSO CONFIRMED THE ORDER OF THE AO. THE CONTENTION OF THE ASSESSEE WAS ALSO REJECTED THAT IN SIMILAR CIRCUMSTANCES IN CASE OF OTHER FAMILY MEMBERS OF THE GROUP, NAMEL Y SHRI VISHNU PRAKASH SHARMA, SHRI SATISH SHARMA AND SHRI CHANDRA PRAKASH SHARMA, PENA LTY WAS LEVIED BY AO WHICH WAS DELETED BY TRIBUNAL, FOR THE REASON THAT THE TRIBUN AL HAS OBSERVED IN ITS ORDER THAT ASSESSEE FILED DETAILED REPLY TO THE SHOW CAUSE NOT ICE GIVEN FOR IMPOSITION OF PENALTY. 6. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE TR IBUNAL. 7. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES, I FIND THAT ASSESSEE DESERVES TO SUCCEED IN HIS APPEAL. ONLY ONE SHOW CAUSE NOTIC E WAS GIVEN AND THE CONTENTION OF THE ASSESSEE THAT CASES OF OTHER FAMILY MEMBERS OF ASSE SSEE WERE GOING ON AND DETAILED REPLY WERE FILED IN THOSE CASES AND DUE TO BONA FIDE BELI EF NO REPLY COULD BE FILED IN REPLY TO SHOW CAUSE NOTICE IN THE NAME OF ASSESSEE. IT IS F URTHER SEEN THAT THERE WERE 63 CASES OF THE FAMILY MEMBERS IN PROGRESS AND IN ALL THE CASES COMPLIANCE WAS MADE BY ALL THE FAMILY MEMBERS. IN CASE OF THIS ASSESSEE ONLY DUE TO BONAFIDE REASONS, THE REPLY COULD NOT BE FILED. THEREFORE, I FEEL THAT THIS WAS A BO NA FIDE MISTAKE AND, THEREFORE, I HOLD THAT PENALTY LEVIED AND CONFIRMED BY LOWER AUTHORITIES W AS NOT JUSTIFIED. ACCORDINGLY SAME IS DELETED. 3 7.1. NOW REMAINING OTHER APPEALS ARE DISPOSED OFF I N THE FOLLOWING MANNER. 8. SIMILAR ISSUE IS INVOLVED IN ALL THESE APPEALS. THE ISSUE IS AGAINST UPHOLDING ADDITION OF RS. 62,730/- ON ACCOUNT OF NOTIONAL REN T ADDED BY THE AO IN ITA NO. 901/JP/2011 FOR THE A.Y. 2002-03. IN OTHER YEARS, THE AMOUNT OF NOTIONAL RENT ADDED BY THE AO IS CONFIRMED BY LD. CIT (A) IS DIFFERENT. H OWEVER, THE ISSUE IS SAME. 9. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH WA S CONDUCTED ON 10.01.2008 IN PANDEY AND SHARMA GROUP OF CASES. DURING THE COURS E OF SEARCH VARIOUS LOOSE PAPERS/DOCUMENTS WERE SEIZED, BESIDES STATEMENTS OF FAMILY MEMBERS AND ASSOCIATES WERE RECORDED. APPELLANT SHRI RADHEY SHYAM SHARMA BELONGS TO SHARMA GROUP AND HE IS PROPRIETOR OF M/S. SHYAM MOORTI KALA DEALING THE REIN STATUES MADE OF STONES, BESIDES THIS, HIS OTHER SOURCES OF INCOME ARE INTEREST INCO ME. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 12.11.2009 DECLARI NG TOTAL INCOME OF RS. 1,94,030/-, HOWEVER, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 153A OF THE IT ACT, 1961 AT A TOTAL INCOME OF RS. 2,37,940/ - BY MAKING ADDITIONS OF RS. 62,730/- (GROSS) TO THE TOTAL INCOME OF THE ASSESSEE ON ACCO UNT OF NOTIONAL RENTAL INCOME FROM HOUSE PROPERTY. THESE FACTS ARE RELATING TO ASSESS MENT YEAR 2002-03. SIMILAR FACTS ARE INVOLVED IN OTHER CASES, HOWEVER, THE AMOUNT OF REN TAL INCOME ADDED BY AO IS DIFFERENT. AGAINST THE ORDERS OF AO, ASSESSEE PREFERRED APPEAL S BEFORE LD. CIT (A) WHO ALSO DISMISSED THE APPEALS OF THE ASSESSEE. 9.1. AFTER CONSIDERING THE WRITTEN SUBMISSIONS AND THE ORDERS OF THE LD. CIT (A) ON WHICH RELIANCE HAS BEEN PLACED BY LD. D/R, I FIND T HAT ASSESSEE DESERVES TO SUCCEED. I NOTED THAT AO ESTIMATED TOTAL RENTAL INCOME OF RS. 62,730/-, DETAILS OF WHICH ARE AS UNDER :- 4 S.NO. PROPERTY DETAILS RENT RECEIVED RENTAL INCOME COMPUTED BY AO REASONS OF NON- SHOWING THE RENTAL INCOME BY THE ASSESSEE. 1. PART OF HOUSE NO. 1870- 72, KHAJANE WALO KA RASTA, JAIPUR. - 6,000.00 USED FOR GODOWN PURPOSE 2. PART OF HOUSE NO. 1862, KHAJANE WALO KA RASTA, JAIPUR - 3,960.00 USED FOR GODOWN PURPOSE. 3. PART OF HOUSE NO. 1995, KHEJRO KA RASTA, JAIPUR. - 7,170.00 USED FOR GODOWN PURPOSE. 4/ PART OF HOUSE NO. 1994, KHAJANE WALO KA RASTA, JAIPUR - 21,600.00 USED FOR OWN BUSINESS PREMISES. 5. PLOT NO. 117/366, MANSAROVAR COLONY, JAIPUR. - 24,000.00 OPEN LAND TOTAL - 62,730/- SIMILARLY, THE AO HAS ESTIMATED THE RENTAL INCOME O F THESE PROPERTIES IN SUBSEQUENT YEARS ALSO. ALL THESE PROPERTIES ARE OWNED BY ASSESSEE A ND OTHER COPARCENERS. OTHER COPARCENERS ARE SHOWING THE RENTAL INCOME AGAINST T HE ROOMS OWNED BY THEM. HOWEVER, THE ASSESSEE IS USING THE ROOM FOR THE PURPOSE OF B USINESS AND HAS STORED HIS STOCKS OF MOORTIES IN THESE ROOMS. IT IS SEEN THAT THERE IS ONLY ONE ROOM IN EACH PROPERTY HAVING NO BATH ROOM, TOILET ETC., THEREFORE IT CANNOT BE SAID THAT THESE PROPERTIES CAN BE RENTED OUT FOR ANY LIVING PURPOSE. ALTHOUGH THERE WAS NO INVEN TORY PREPARED BY THE DEPARTMENT DURING THE SEARCH, AS STATED BY LD. A/R IN RESPECT TO GOODS STORED IN THESE PROPERTIES, HOWEVER, IT WAS STATED THAT IN CASE OF OTHER COPARC ENERS, THE INVENTORY WAS PREPARED BY SEARCH PARTY. IT IS ALSO A MATTER OF FACT THAT ASSE SSEE SHRI RADHEY SHYAM SHARMA BELONGS TO SHARMA GROUP AND IS PROPRIETOR OF M/S. SHYAM MOO RTI KALA DEALING IN STATUES MADE OF STONES ETC. AND ALL THE STATUES ARE STORED IN TH E SMALL ROOMS OF THE VARIOUS PROPERTIES SHOWN ABOVE IN THE CHART. THEREFORE, IN MY CONSIDE RED VIEW, THE EXPLANATION OF THE 5 ASSESSEE SHOULD HAVE BEEN ACCEPTED AS THESE PROPERT IES WERE USED FOR BUSINESS PURPOSES IN THE SHAPE OF GODOWN. THERE WAS NO EVIDENCE FOUN D TO DISAPPROVE THE EXPLANATION OF THE ASSESSEE. THEREFORE, I AM OF THE VIEW THAT MERE LY ON SUSPICION AND SURMISES, THE NOTIONAL RENT ADDED BY THE AO WAS NOT JUSTIFIED AND , THEREFORE, LD. CIT (A) WAS ALSO NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO. ACCO RDINGLY, I DELETE THE IMPUGNED ADDITION MADE FOR EACH YEAR ON ACCOUNT OF NOTIONAL RENT. THE GROUND OF THE ASSESSEE IS ALLOWED FOR ALL THE YEARS. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07 .03.2012. SD/- ( R.K. GUPTA ) JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHRI RADHEY SHYAM SHARMA, JAIPUR. THE ACIT, CENTRAL CIRCLE, ALWAR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 901(7)/JP/2011) BY ORDER, AR ITAT JAIPUR.