SHRI Ishwar Patel, Dhar V. THE ITO, Dhar

ITA 937/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2316 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-08-2017
• Assessment Year: 1997-1998
• Appeal Filed On: 12-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: RAVI SARDA
• Keywords: Income from undisclosed sources; Peak credit; Validity of assessment
• Section: 143(3); 69; 148

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS.937 & 938/IND/2016 ASSESSMENT YEARS: 1997-98 & 1998-99 REVENUE BY SHRI RAVI SARDA RESPONDENT BY SHRI K.G GOYAL DATE OF HEARING 18.01.02.2018 DATE OF PRONOUNCEMENT 15.02.2018 ORDER PER MANISH BORAD, AM. THESE APPEALS FILED BY THE ASSESSEE PERT AINING TO THE A.YS. 1997-98 AND 1998-99 ARE DIRECTED AGAINST THE CONSOL IDATED ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-22 (HOLDIN G CONCURRENT JURISDICTION OF CIT(A)01, INDORE, DATED 16.6.2016 W HICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT D ATED 20.3.2002 FRAMED BY THE ITO, DHAR. SHRI ISH W AR PATEL PITHAMPUR VS. INCOME TAX OFFICER DHAR (REVENUE) (RESPONDENT ) PAN NO.AGDPP 0622Q 2 2. AS THE ISSUES RAISED IN BOTH THESE APPEALS ARE C OMMON, THEY WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COM MON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. IN ITA NO. 937/IND/2016 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- GROUND NO. 1 :- THE LEARNED CIT(A) HAS ERRED IN APPROVING ACTION O F A.O. IN CORRECT PROSPECTIVE WHEREAS THE ASSESSEE HAS NO INC OME IN INDIVIDUAL STATUS AND ENTIRE INCOME IS EARNED OUT O F FUND RECEIVED IN PARTITION OF HUF AND AS SUCH ASSESSMENT IN QUESTION IS LIABLE TO BE ANNULLED. GROUND NO.2 THE ASSESSMENT OF INCOME FROM HOUSE PROPERTY AT RS.38,400/- IN THE STATUS OF INDIVIDUAL IS INVALID IN LAW AND IT IS LIABLE TO BE DELETED. 3 GROUND NO. 3 :- THE ASSESSMENT OF INCOME AT RS. 1,05,500/- IS BAD IN LAW, WITHOUT SUPPLYING THE PAPERS RELIED, AS ASSESSEE IS NOT THE OWNER OF DEPOSITS IN INDIVIDUAL CAPACITY. GROUND NO. 4 :- THE ASSESSMENT OF AGRICULTURE INCOME OUT OF RS. 62 ,000/- AT RS. 33,000/- AS INCOME FROM OTHER SOURCES IS BAD IN LAW AND THAT TOO IN INDIVIDUAL STATUS OF THE ASSESSEE. GROUND NO. 5 :- THE ENTIRE ASSESSMENT IS BAD IN LAW AND IT IS LIABL E TO BE QUASHED. IN ITA NO. 938/IND/2016 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- GROUND NO. 1 :- THE LEARNED CIT(A) HAS ERRED IN APPROVING ACTION O F A.O. IN CORRECT PROSPECTIVE WHEREAS THE ASSESSEE HAS NO INC OME IN 4 INDIVIDUAL STATUS AND ENTIRE INCOME IS EARNED OUT O F FUND RECEIVED IN PARTITION OF HUF AND AS SUCH ASSESSMENT IN QUESTION IS LIABLE TO BE ANNULLED. GROUND NO.2 THE ASSESSMENT OF INCOME FROM HOUSE PROPERTY AT RS.48,000/- IN THE STATUS OF INDIVIDUAL IS INVALID IN LAW AND IT IS LIABLE TO BE DELETED. GROUND NO. 3 :- THE ASSESSMENT OF INCOME AT RS. 6,62,400/- IS BAD IN LAW, WITHOUT SUPPLYING THE PAPERS RELIED, AS ASSESSEE IS NOT THE OWNER OF DEPOSITS IN INDIVIDUAL CAPACITY. GROUND NO. 4 :- THE ASSESSMENT OF AGRICULTURE INCOME OUT OF RS. 72 ,000/- AT RS. 40,000/- AS INCOME FROM OTHER SOURCES IS BAD IN LAW AND THAT TOO IN INDIVIDUAL STATUS OF THE ASSESSEE. 5 GROUND NO. 5 :- THE ENTIRE ASSESSMENT IS BAD IN LAW AND IT IS LIABL E TO BE QUASHED. 4. FROM A PERUSAL OF THE ABOVE GROUNDS, FOLLOWING C OMMON ISSUES NEED OUR ADJUDICATION :- (I) WHETHER THE LEARNED CIT(A) ERRED IN APPROVING T HE ACTION OF THE AO ASSESSING THE INCOME IN THE HANDS OF THE ASS ESSEE RATHER THAN IN THE STATUS US HUF ? (II) THE ADDITION ON ACCOUNT OF INCOME FROM HOUSE P ROPERTY. (III) THE ADDITION FOR UNDISCLOSED INCOME IN THE FO RM OF CASH DEPOSITED AT RS. 1,05,500/- AND RS. 6,62,400/- FOR THE A.YS. 1997-98 AND 1998-99, RESPECTIVELY. (IV) ASSESSING THE AGRICULTURE INCOME AT RS.33,000/ - AND RS.40,000/- AS AGAINST THE AGRICULTURAL INCOME DISC LOSED BY THE ASSESEE AT RS. 62,000/- AND RS. 72,000/- FOR TH E A.YS. 1997-98 AND 1998-99, RESPECTIVELY. 5. FOR ADJUDICATION OF THE ABOVE COMMON ISSUES, WE WILL TAKE THE FACTS FOR THE A.Y. 1997-98. BRIEFLY STATED, THE FA CTS OF THE CASE ARE 6 THAT THE ASSESSEE IS AN INDIVIDUAL. ON THE BASIS O F INFORMATION RECEIVED BY THE AO RELATING TO DEPOSIT OF CASH IN T HE BANK ACCOUNT, NOTICE UNDER SECTION 148 OF THE ACT DATED 18.1.2000 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. IN COMPLIANCE, THE A SSESSEE FILED THE RETURN OF INCOME ON 3.3.2000 DISCLOSING INCOME FROM HOUSE PROPERTY AT RS. 30,720/- AND AGRICULTURAL INCOME AT RS. 65,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DETAIL S WERE CALLED FOR BY THE AO TOWARDS THE BASIS OF SHOWING HOUSE PR OPERTY INCOME WHICH THE ASSESSEE FAILED TO SUBMIT. IN THE MEANTI ME, THE LEARNED COUNSEL FOR THE ASSESSEE THROUGH LETTER DATED 8.1.2 002 SUBMITTED THAT THE INCOME FROM AGRICULTURE MAY BE CALCULATED AT RS. 32,000/- AS AGAINST RS. 62,000/- SHOWN BY THE ASSESSEE IN TH E RETURN OF INCOME. THE LEARNED AO ALSO OBSERVED THAT THE ASSES SEE HAS DEPOSITED CASH OF RS. 1,05,500/- IN THE BANK ACCOUN T HELD WITH STATE BANK OF INDORE. NO REASONABLE EXPLANATION WA S PUT-FORTH. THE LEARNED AO ACCORDINGLY COMPLETED THE ASSESSMENT BY ESTIMATING THE INCOME FROM HOUSE PROPERTY AT RS. 48 ,000/- MAKING ADDITION FOR UNEXPLAINED INCOME UNDER SECTION 69 OF THE ACT AT RS.1,05,500/- AND ADDITION FOR INCOME FROM OTHER SO URCES AT 7 RS.33,000/- ON ACCOUNT OF DECLARING EXCESS FIGURE O F AGRICULTURAL INCOME. THE INCOME WAS ASSESSED AT RS.1,76,900/-. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) BUT FAILED TO SUCCEED. NOW THE ASSESSEE IS I N APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND A LSO TOOK US THROUGH PAPER BOOK RUNNING FROM PAGE 1 TO 71 AND WR ITTEN SUBMISSIONS PLACED ON RECORD. ON THE OTHER HAND, T HE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DOC UMENTS. 8. THE FIRST ISSUE RAISED BY THE ASSESSEE IS THAT T HERE WAS NO SOURCE OF INCOME IN THE INDIVIDUAL CAPACITY AS THE ENTIRE INCOME WAS EARNED OUT OF THE FUNDS RECEIVED ON PARTITION O F HUF AND THEREBY QUESTIONING THE VALIDITY OF ASSESSMENT. 8 9. WE FIND THAT THIS GROUND OF THE ASSESSEE HAS NO BASIS FOR THE VERY REASON THAT THE ASSESSEE IS TRYING TO CONNECT THE SOURCE OF ALLEGED FUNDS DEPOSITED DURING THE YEAR OUT OF THE COMPENSATION RECEIVED IN 1984 THROUGH CHEQUE ON ACCOUNT OF COMPE NSATION RECEIVED BY THE HUF COMPRISING THE ASSESSEE AND OTH ER FAMILY MEMBER TOWARDS ACQUISITION OF LAND HELD JOINTLY IN THE FAMILY NAMELY. IN THESE CIRCUMSTANCES, THE PLEA OF THE LEA RNED COUNSEL FOR THE ASSESSEE CANNOT BE ACCEPTED THAT THE SOURCE OF INCOME EARNED DURING THE YEAR WAS OUT OF THE FUNDS RECEIVED TEN Y EARS AGO. ACCORDINGLY, WE DISMISS THIS COMMON GROUND NO. 1 RA ISED BY THE ASSESSEE FOR BOTH THE YEARS. 10. THE NEXT COMMON GROUND RELATES TO ADDITION UNDE R THE HEAD INCOME FROM HOUSE PROPERTY WHEREIN THE CIT(A) HAS CONFIRMED THE INCOME AT RS. 48,4000/- FOR BOTH THE A.YS. 1997-98 AND 1998-99 AS AGAINST RS. 30,720/- AND RS. 38,400/- SHOWN BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS SHOWN INCOME FROM HOUSE PROPERTY IN THE INCOME TAX RETURN AND THE LEARNED AO HAS ESTIMA TED THE INCOME AT RS. 48,000/- AND RS.60,000/- FOR THE A.YS. 1997- 98 AND 1998- 99 BECAUSE THE ASSESSEE COULD NOT PLACE ANY DOCUMEN TARY EVIDENCE 9 TO SUPPORT THE BASIS OF RENTAL INCOME. THE LD. CIT (A) GAVE PART RELIEF IN THE A.Y. 1998-99 THEREBY CONFIRMING THE INCOME F ROM HOUSE PROPERTY AT RS. 48,000/- FOR BOTH THE YEARS. WE FI ND NO REASON TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A) A ND CONFIRM THE SAME. 11. IN THE RESULT, GROUND NO. 2 FOR BOTH THE YEARS IS DISMISSED. 12. NOW WE SHALL TAKE UP COMMON GROUND NO. 3 RELATI NG TO UNEXPLAINED INCOME OF RS. 1,05,500/- AND RS. 6,62,4 00/- IN BOTH THE YEARS. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLEADED THAT THE SOURCE OF ALLEGED CASH DEPOSITED IN THE BANK ACCOUN T IS OUT OF THE MONEY RECEIVED IN PARTITION OF HUF AS WELL AS INCOM E FROM AGRICULTURE WHICH WAS KEPT IN HAND IN THE PAST. THE SUBMISSIONS OF THE ASSESSEE ARE GENERAL IN NATURE AND HAVING NO SU BSTANTIAL EVIDENCE TO SUPPORT THE SAME. THE LEARNED COUNSEL F OR THE ASSESSEE ALSO TOOK US THROUGH THE CHART SHOWING PEAK CASH CR EDIT WHICH WAS FILED DURING THE COURSE OF HEARING PLACED AT PAGES 72 TO 75 OF THE PAPER BOOK. FROM PERUSAL OF THESE RECORDS AS WELL AS LOOKING TO THE FACT THAT THE MATTER IS VERY OLD AND RELATES TO THE A.YS. 1997-98 AND 1998-99, IT WILL NOT BE JUSTIFIED TO RESTORE THE IS SUE TO THE FILE OF THE 10 AO FOR CARRYING OUT VERIFICATION OF THE PEAK CREDIT WORKING. WE AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL FO R THE ASSESSEE THAT THE ADDITION SHOULD BE MADE ONLY FOR THE PEAK CASH CREDIT AND NOT FOR THE TOTAL CASH DEPOSITED ON VARIOUS DATES. IT IS NOT IN DISPUTE THAT THERE HAVE BEEN REGULAR CASH WITHDRAWA LS ALSO BEFORE THE CASH DEPOSITED. 13. WE FURTHER FIND THAT THE ASSESSEE IS HAVING AGR ICULTURAL INCOME AND HOLDS AGRICULTURAL LAND SINCE MANY YEARS. ONE C ANNOT DENY THE FACT THAT THE ASSESSEE HAD ACCUMULATED SOME CASH I N HAND EARNED THROUGH AGRICULTURAL OPERATIONS. LOOKING TO THESE PRACTICAL ASPECTS AS WELL AS THE FACTUAL MATRIX ARISING IN THE GIVEN FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE HAD AN OPENING CASH BALANCE OF RS. 1,51,000/- ON ACCOUNT OF PAST S AVINGS. THIS OPENING BALANCE WILL TAKE CARE OF ALL THE ALLEGED U NEXPLAINED INCOME OF RS. 1,05,500/- FOR THE A,.Y. 1997-98 AND THE SAM E STANDS DELETED. HOWEVER, FOR THE A.Y. 1998-99 WHEREIN THE ADDITION OF RS.6,62,400/- HAS BEEN CONFIRMED BY THE LEARNED CIT (A), WE, AFTER GOING THROUGH THE PEAK CREDIT STATEMENT, ARE OF THE VIEW THAT THE ADDITION FOR UNACCOUNTED INCOME SHOULD BE SUSTAINED AT 11 RS.2,50,000/- AND THIS WILL TAKE CARE OF THE PEAK C REDIT WORKING AS WELL HOUSEHOLD WITHDRAWALS NOT SHOWN BY THE ASSESSE E IN THE PEAK CREDIT WORKING. 14. IN THE RESULT, GROUND NO. 3 FOR THE A.Y. 1997-9 8 IS ALLOWED AND FOR THE A.Y. 1998-98 IT IS PARTLY ALLOWED. 15. NOW WE SHALL TAKE UP LAST COMMON ISSUE I.E. GRO UND NO. 4 RELATING TO ESTIMATION OF AGRICULTURAL INCOME. WE F IND THAT THE ASSESSEE DISCLOSED RS.62,000/- AND RS.72,000/- IN T HE INCOME TAX RETURN. THEREAFTER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THESE FIGURES WERE REVISED TO RS.32,000/- FOR BOTH THE YEARS. EVEN AFTER ACCEPTING THESE REDUCED FIGURES OF AGRICULTUR AL INCOME, THE ASSESSEE AGAIN RAISED A GROUND BEFORE THE LEARNED C IT(A) BUT FAILED TO SUCCEED FOR THE A.Y. 1997-98 AND PARTLY SUCCEEDE D FOR THE A.Y. 1998-99. IN THESE CIRCUMSTANCES, WHERE THE ASSESSEE IS HIMSELF NOT CLEAR ABOUT THE QUANTUM OF AGRICULTURAL INCOME EARN ED BY HIM DURING THE YEAR AND AS NO DETAILS WERE MAINTAINED T O SUPPORT THE INCOME, WE FIND NO REASON TO INTERFERE WITH THE FIN DINGS OF THE LEARNED CIT(A) ESTIMATING THE AGRICULTURAL INCOME A T RS. 32,000/- AND RS. 40,000/- FOR BOTH THE YEARS RESPECTIVELY AN D THEREBY 12 CONFIRMING THE ADDITION UNDER THE HEAD INCOME FROM OTHER SOURCES AT RS.30,000/- AND RS.32,000/- FOR BOTH THE YEARS. 16. IN THE RESULT, GROUND NO. 4 IN BOTH THE YEARS A RE ALSO DISMISSED. 17. GROUND NO. 5 IS GENERAL IN NATURE WHICH NEEDS N O ADJUDICATION. 18. IN THE RESULT, BOTH THE APPEALS ARE PARTLY ALLO WED. THE ORDER PRONOUNCED IN THE OPEN COURT ON .02.20 18. SD SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 15 FEBRUARY, 2018 COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. 13 BY ORDER PRIVATE SECRETARY/DDO, INDORE 1. DATE OF DICTATION : 8.2.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 9.2.2018 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S./P .S: 10.1.2018 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISSTANT R EGISTRAR FOR SIGNATURE OF THE ORDER. 9. DATE OF DESPATCH OF THE ORDER: