SHRI BHAGWAN SAHAI GURJAR, SIKAR V. INCOME TAX OFFICER, SIKAR

ITA 939/JPR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8081 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA CIT DHK
• Keywords: Unexplained investment; Principle of natural justice
• Section: 250; 147; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NOS. 938 & 939/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 & 2011-12 SHRI BHAGWAN SAHAI GURJAR WARD NO. 15, GURJAR COLONY, NEEM KA THANA, SIKAR (RAJASTHAN). C UKE VS. INCOME TAX OFFICER, WARD- NEEM KA THANA, DISTT.-SIKAR LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AZTPG0290J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI VINOD GUPTA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJENDRA JHA, (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24/04/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 15/07/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THESE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF LD.CIT(A)-3, JAIPUR DATED 20-09-2017 AND 05-10-2017 FOR THE A.YS. 2010- 11 AND 2011-12 IN THE MATTER OF ASSESSMENT ORDERS PASSED U/S 143(3)/148 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. GROUNDS TAKEN BY THE ASSESSEE IN BOTH THE A.YS UNDER CONSIDERATION ARE SAME. GROUNDS TAKEN IN THE A.Y 2010-11 READS AS UNDER:- ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 2 1. IMPUGNED ORDER PASSED U/S. 250 IS BAD IN LAW AND ON FACTS BEING AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND FOR MANY MORE OTHER REASONS. 2. UNDER THE FACTS AND CIRCUMSTANCES, LD. CIT(A) HAS ERRED BY CONFIRMING THE ACTION OR INITIATION OF PROCEEDING U/S. 147 OF THE INCOME TAX ACT. 3. UNDER THE FACTS AND CIRCUMSTANCES, LD. CIT(A) HAS ERRED BY CONFIRMING THE ADDITION OF RS.5,50,000/- OF PAYMENT MADE TO LIC AS UNEXPLAINED INVESTMENT U/S. 69 OF THE INCOME TAX ACT. THE ADDITION SUSTAINED IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 4. THAT THE APPELLANT CRAVES YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. GROUNDS TAKEN IN THE A.Y 2011-12 READS AS UNDER:- 1. IMPUGNED ORDER PASSED U/S. 250 IS BAD IN LAW AND ON FACTS BEING AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND FOR MANY MORE OTHER REASONS. 2. UNDER THE FACTS AND CIRCUMSTANCES, LD. CIT(A) HAS ERRED BY CONFIRMING THE ADDITION OF RS.2,80,000/- ON ACCOUNT OF CASH DEPOSIT. THE ADDITION SUSTAINED IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 3. THAT THE APPELLANT CRAVES YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN AGRICULTURIST. THE PARTICULARS OF INCOME DISCLOSED IN THE RETURN FILED FOR THE A.Y. 2007-08 TO 2011-12 ARE AS FOLLOWS: - PARTICULARS ASSESSMENT YEAR 2007 - 0 8 2008 - 09 2010 - 11 2011 - 12 LABOUR CHARGES/JOB WORK 58,600 93,750 1,12,600 1,22,500 OTHER INCOME 758 4644 1, 591 4, 150 AGRICULTURAL INCOME 48,000 57 ,000 59,000 60,000 TOTAL 1,07,358 1,55,394 1,73,191 1,86,650 ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 3 4. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS FOR THE A.Y. 2011- 12, THE ASSESSING OFFICER PROPOSED ADDITION OF RS.4,57,200/- ON ACCOUNT OF CASH DEPOSIT IN POST OFFICE. THE ASSESSEE SUBMITTED BEFORE THE A.O. THAT THE DEPOSIT IN POST OFFICE WAS FROM HIS SAVING AND OUT OF AGRICULTURAL INCOME AND HE ALSO FILED DETAIL OF WITHDRAWAL FROM BANK WHICH ARE AS UNDER:- DATE AMOUNTS 22.10.2010 RS.60,000/ - 23.12. 2010 RS.1,00,000/ - 23.12.2010 RS.80,000 AND HE DEPOSITED IN POST OFFICE AS UNDER :- DATE AMOUNTS 22.10.2010 RS. 1,32,300/ - 23.12.2010 RS. 88,200/- 03.01.2011 RS.88,200/ - 24.03. 2011 RS.49,500/ - 24.03.2011 RS.49,500/ - 24.03.2011 RS.49,500/ - 5. HOWEVER, THE A.O. DID NOT CONVINCE WITH THE ASSESSEES EXPLANATION AND ADDED RS. 4,57,200/- ON ACCOUNT OF CASH DEPOSITED IN THE BANK. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION OF RS.1,76,400/-, HOWEVER, HE CONFIRMED THE ADDITION OF RS. 2,80,800/-. AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD DURING THE ASSESSMENT PROCEEDINGS AS WELL AS BEFORE THE LD. CIT(A), A CASH FLOW ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 4 STATEMENT WAS FILED SINCE 1 ST APRIL, 2006 CONTAINING SOURCE OF RECEIPT COMPRISES OF AGRICULTURAL INCOME, LABOUR INCOME, CASH WITHDRAWAL, SALE PROCEED OF TRACTOR. THE CASH FLOW STATEMENT WAS REJECTED BY THE AO AS WELL AS LD. CIT(A). HOWEVER, THE AO HAS REJECTED THE ASSESSEES CLAIM OF AGRICULTURAL INCOME, WHICH IS CONTRARY TO HIS OWN FINDING BECAUSE HE HAS TAKEN INTO ACCOUNT THE AGRICULTURE INCOME SHOWN BY THE ASSESSEE FOR THE RATE PURPOSE. THUS, WHEN THE AGRICULTURAL INCOME WAS AVAILABLE FOR CALCULATING RATE OF TAX BY THE AO, THEN AT THE TIME OF ALLOWING THE CREDIT FOR AVAILABILITY OF SUCH INCOME, SAME CANNOT BE DENIED. FROM THE RECORD, WE FIND THAT DURING THE A.Y 2007-08, RS.48,000/- IN A.Y 2008-09 RS. 57,000/- HAS BEEN SHOWN AS AGRICULTURE INCOME BY THE ASSESSEE. THUS, IT IS CLEAR THAT ASSESSEE WAS HAVING AGRICULTURE INCOME AND CONTINUOUSLY SHOWING AGRICULTURE INCOME AND SAME HAS BEEN ACCEPTED. THE AO AS WELL AS LD. CIT(A) ALLEGED THAT THE ASSESSEE HAS SHOWN AGRICULTURE INCOME OF RS. 1,86,650/-, WHEREAS, IN FACT ASSESSEE SHOWED AGRICULTURE INCOME OF RS.60,000/- AS EVIDENT FROM INCOME TAX RETURN AND CASH FLOW STATEMENT. IT IS CLEAR FROM ABOVE, THAT ACTION OF THE AO AS WELL AS OF THE LD. CIT(A) IS BASED UPON WRONG ASSUMPTION OF FACT. MOREOVER, THE AO HAS ALSO RECORDED THE ASSESSEES STATEMENT U/S. 131, WHEREIN HE HAS CONFIRMED HAVING AGRICULTURAL INCOME. ACCORDINGLY, THERE IS NO REASON TO DECLINE SUCH AGRICULTURAL INCOME EARNED BY THE ASSESSEE IN EARLIER YEARS AND DULY ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 5 SHOWN IN THE RETURN OF INCOME. IN THE ASSESSMENT YEAR 2008-09, ADDITION OF RS.1,80,000/- WAS MADE ON ACCOUNT OF CASH DEPOSITED IN POST OFFICE ACCOUNT ON 8.8.2007. WE FIND THAT A CASH FLOW STATEMENT FROM 1.4.2006 TAKING THE OPENING CASH BALANCE AS ON 1.4.2006 AT RS. 1,05,720/- WAS FILED BEFORE AO AND LD. CIT(A). WE ALSO FOUND THAT ON THE BASIS ORDER PASSED BY THE LD. CIT(A) FOR THE A.Y 2008-09 THE ASSESSEE HAD RE-DRAWN THE CASH FLOW STATEMENT FROM 9.8.2008, A DATE IMMEDIATE AFTER THE DEPOSITION OF RS.1,80,000/- FOR WHICH, THE ORDER OF THE AO HAD REACHED THE FINALITY. IN THE CASH FLOW STATEMENT, DUE CONSIDERATION HAS BEEN GIVEN TO THE HOUSEHOLD EXPENSES. THE HOUSEHOLD EXPENSES CONSIDERED IS REASONABLE LOOKING TO THE BACKGROUND OF THE ASSESSEE, PLACE OF LIVING WHERE BEING SMALL VILLAGE COST OF LIVING IS MUCH LESS, THE FACT THAT ALL THE CHILDREN ARE STUDYING IN GOVERNMENT SCHOOLS. THE HOUSEHOLD EXPENSES SHOWN IN THE CASH FLOW HAS NOT DISPUTED. ALL OTHER RECEIPTS IN THE CASH FLOW STATEMENT IS FROM KNOWN SOURCES SUCH AS AGRICULTURAL INCOME AND LABOUR CHARGES IS EVIDENT AND ACCEPTED BY THE AO SINCE HE HAS ACCEPTED THE RETURN AND ALSO MENTIONED INCLUDED AGRICULTURE INCOME FOR RATE PURPOSES. SIMILARLY, MONEY RECEIVED FROM SALE OF TRACTOR IS EVIDENT FROM TRACTOR SALE DEED, THE PURCHASE OF TRACTOR WAS ALREADY CONSIDERED IN A.Y 2008-09. WE ALSO OBSERVE THAT THE LD. CIT(A) HAS ALLOWED THE CREDIT OF RS. 1,76,400/-, OUT OF CASH WITHDRAWAL OF RS. 2,40,000/- BY STATING THAT THE ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 6 CASH WITHDRAWAL WAS 2 MONTHS PRIOR TO DATE OF DEPOSITION. WHEREAS, RS. 60,000/- WHICH WERE NOT ACCEPTED AS AVAILABLE FOR DEPOSITION WAS WITHDRAW ON THE SAME DATE I.E. 22/12/2010. EVEN OTHERWISE, THE CREDIT OF THE SAME HAS BEEN DENIED BASED ON PRESUMPTION THAT NOBODY WILL BE KEPT THE MONEY IN THE HOUSE FOR MORE THAN 2 MONTHS. SUCH PRESUMPTION IS WITHOUT ANY BASIS OR REASON. ACCORDINGLY, WE DIRECT THE A.O. TO GIVE CREDIT OF RS. 60,000/- IN RESPECT OF CASH AVAILABLE WITH THE ASSESSEE AND DEPOSITED ON THE SAME DATE I.E. 22/12/2010. 7. IN VIEW OF ABOVE, CASH FLOW STATEMENT SO SUBMITTED BY THE ASSESSEE BEFORE THE AO/LD. CIT(A) SHOULD BE ACCEPTED, WHICH COVERS ALL THE DEPOSITS. WITHOUT ESTABLISHING THAT MONEY HAS BEEN UTILIZED FOR SOME OTHER PURPOSES, THE CREDIT FOR CASH AVAILABLE AS PER CASH FLOW STATEMENT FROM KNOWN SOURCES I. E CASH WITHDRAWAL, PROCEED FOR SALE OF TRACTOR ETC. CANNOT BE DENIED. IN THE INSTANT CASE, DATE WISE CASH FLOW HAS BEEN FILED AND THERE IS NO NEGATIVE BALANCE ON ANY DAY. THE SOURCE OF THE CASH FLOW IS WELL SUPPORTED WITH THE DOCUMENTARY EVIDENCES. ACCORDINGLY, WE DIRECT THE A.O. TO ALLOW CREDIT FOR THE AGRICULTURAL INCOME OF RS. 60,000/-, AVAILABILITY OF CASH OF RS. 60,000/- AND OPENING BALANCE OF RS. 1,05,720/-. THUS, OUT OF ADDITION OF RS. 2,80,000/-, WE UPHOLD ADDITION OF RS. 54,280/- I.E. 2,80,000-2,25,720/- (60,000 60,000 1,05,720). ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 7 8. IN THE RESULT, THIS APPEAL IS ALLOWED IN PART. 9. FOR THE A.Y. 2011-12, THE LD. CIT(A) HAS DISMISSED THE ASSESSEE APPEAL BY PASSING EX PARTE ORDER. THE LD AR HAS EXPLAINED THE REASONS FOR NON-APPEARANCE BEFORE THE LD. CIT(A). WE FOUND THAT THE SIMILAR ADDITION HAS BEEN MADE BY THE A.O. DISREGARDING THE CASH FLOW STATEMENT FILED BEFORE THE A.O.. OUR ATTENTION WAS ALSO INVITED TO THE SAME, WHICH ARE PLACED ON RECORD. IN THE SUBSTANTIAL INTEREST OF JUSTICE, WE RESTORE THE APPEAL FOR THE A.Y. 2011-12 TO THE FILE OF A.O. FOR DECIDING AFRESH AFTER CONSIDERING THE CASH FLOW STATEMENT SO FILED BY THE ASSESSEE. WE DIRECT ACCORDINGLY. 10. IN THE RESULT APPEAL FOR THE A.Y. 2011-12 IS ALLOWED IN PART FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2019. SD/- SD/- FOT; IKY JKO JES 'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 TH JULY, 2019 *PP,SPS VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI BHAGWAN SAHAI GURJAR, SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O, WARD-NEEM KA THANA, DIST: SIKAR ITA NOS. 938 & 939/JP/17 SHRI BHAGWAN SAHAI GURJAR VS ITO 8 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NOS. 938 & 939/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR