Smt. Dhariniben Anilkumar Shukla., Ahmedabad V. The Income Tax Officer, Ahmedabad

ITA 973/AHD/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5481 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Principle of natural justice; Set aside
• Section: 133(6)

Judgement Text

, , ,, ,LK LKLK LK- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 973/AHD/2016 / ASSESSMENT YEAR : 2011-12 SMT. DHARINIBEN ANILKUMAR SHUKLA, 263/64, PREMCHANDNAGAR, SATYAGRAH CHHAVANI ROAD, AHMEDABAD 380 015. (PAN NO: AHJPS 6654 C) VS. ITO, WARD 14(2), AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI TUSHAR HEMANI & P.B. PARMAR, A.R. REVENUE BY : SHRI APOORVA BHARDWAJ, SR. D.R. / DATE OF HEARING : 08.08.2018 / DATE OF PRONOUNCEMENT : 01.11.2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF T HE ASSESSEE AGAINST THE APPELLATE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-5, AHMEDABAD [CIT(A) IN SHORT] RELEVANT TO A SSESSMENT YEAR 2010-11. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CA SE IN CONFIRMING THE ACTION OF AO IN ADDING RS.9,50,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS OF THE APPELLANT. 2. BOTH THE LOWER AUTHORITIES HAVE PASSED THE ORDERS WITHOUT PROPERLY APPRECIATING THE FACT AND THAT THEY FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EXPLANATION AND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF THE LOWER AUTHORITIES IS IN 2 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 CLEAR BREACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVES TO BE QUASHED. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ACTION OF THE LD.AO IN LEVYING INTEREST U/S.234A/B/C/D OF THE ACT. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ACTION OF THE LD.AO IN INITIATING PENALTY U/S271(1)(C) OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 3. THE SOLITARY ISSUE RAISED BY THE ASSESSEE IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO FOR RS. 9,50,000/- U/S 68 OF THE ACT. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN THE PRE SENT CASE IS AN INDIVIDUAL AND DERIVING HIS INCOME UNDER THE HEAD SALAR Y AS TEACHER AND INCOME FROM HOUSE PROPERTY. THE ASSESSEE IS ALSO RUNNI NG A HOSTEL IN THE NAME OF D. A. SHUKLA AT MEHMADABAD PROVIDING ACCOMMODATION FACIL ITIES AND FOOD TO THE NEEDY STUDENTS AT REASONABLE RATES. 4.1 THE ASSESSEE IS MAINTAINING THREE SAVING BANK ACCOUNTS IN DIFFERENT BANKS NAMELY AXIS BANK, UCO BANK AND BANK OF BARODA. THE ASSESSEE I N ALL THESE BANKS HAS DEPOSITED CASH OF RS. 18,24,246/- ONLY. THE NECESSARY DETAILS OF DEPOSIT OF CASH IN DIFFERENT BANKS STAND AS UNDER: SR. NO. NAME OF THE BANK CASH DEPOSIT BRANCH OF THE BANK 1. AXIS BANK 2,19,000/- AHMEDABAD 2. UCO BANK 1,59,000/- AHMEDABAD 3. BANK OF BARODA 14,46,246/- MEHMEDABAD 3 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 4.2 ON QUESTION BY THE AO ABOUT THE SOURCE FOR THE DEP OSIT OF CASH IN THE BANK ACCOUNTS, THE ASSESSEE SUBMITTED THAT SHE IS RUNNIN G A HOSTEL AND PROVIDING FOOD TO THE STUDENTS WHO BELONG TO POOR F AMILIES. AS SUCH, THE MONEY RECEIVED FROM STUDENTS WAS INCURRED IN PROVING THE ACCOMMODATION AND FOOD FACILITY TO THE STUDENTS. THERE WAS NO INCOME LEFT WITH THE ASSESSEE OUT OF THE HOSTEL ACTIVITY. THEREFORE THERE WAS NO QUESTI ON OF OFFERING ANY INCOME OUT OF SUCH ACTIVITY IN THE INCOME TAX RETURN. THE ASSE SSEE ALSO CLAIMED THAT SHE DID NOT MAINTAIN ANY BOOKS OF ACCOUNTS. HOWEVER, SHE WAS MAINTAINING THE DETAILS OF THE FEES RECEIVED FROM STUDENTS AND VOUCHE RS SHOWING THE VARIOUS EXPENSES INCURRED BY HER. 4.3 THE AO DURING THE ASSESSMENT PROCEEDINGS REQUESTED THE ASSESSEE TO PRODUCE ANY THREE STUDENTS FOR VERIFICATION OF THE AC TIVITY WHETHER SHE WAS RUNNING THE HOSTEL AS DISCUSSED ABOVE. BUT THE ASSESSE E EXPRESSED HER INABILITY TO PRODUCE THE STUDENTS. 4.4 THE AO TO VERIFY THE VERACITY OF THE CLAIM OF THE ASSESSEE ALSO ISSUED NOTICE U/S 133(6) TO 30 STUDENTS BUT IN MOST OF THE CASES THERE WAS NO REPLY RECEIVED FROM THE STUDENTS AND THE NOTICES REMAINED U N-SERVED. IN SOME OF THE CASES, THE REPLY WAS RECEIVED FROM THE STUDENTS ADMITTI NG THE PAYMENT MADE FOR AVAILING THE HOSTEL/ FOOD FACILITY. HOWEVER, IN SOME OF THE CASES THE AMOUNT PAID BY THE STUDENTS AND RECEIPT SHOWN BY THE ASSESSEE WERE NOT MATCHING. 4.5 THE AO FURTHER OBSERVED THAT THE AMOUNT CHARGED BY THE ASSESSEE FROM THE STUDENTS WAS RS.25,000/- TOWARDS THE HOSTEL FEES AND DEP OSIT AMOUNT OF RS.7,000/- AGGREGATING TO RS.32,000/- WHICH IS QUITE HIGH. ACCOR DINGLY, THE AO DISREGARDED THE CLAIM OF THE ASSESSEE AND WORKED OUT TH E PEAK AMOUNT OF THE 4 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 CASH DEPOSITED IN ALL THE BANKS OF THE ASSESSEE FOR RS. 9,50,000/- ONLY. THUS, THE AO TREATED THIS AMOUNT AS UNDISCLOSED INCOME AND ADDED TO THE TOTA L INCOME OF THE ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. CIT(A) . THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE AMOUNT RECEI VED FROM STUDENTS WAS INCURRED IN PROVIDING HOSTEL AND FOOD FACILITY TO TH E STUDENTS. THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS FURNISHED THE DETAILS AS GIVEN UNDER : (A) BANK STATEMENTS; (B) INCOME & EXPENDITURE ACCOUNT; (C) CASH STATEMENT; (D) FEES RECEIPTS; (E) ELECTRICITY BILLS; (F) RENT AGREEMENT; (G) VOUCHERS SHOWING PAYMENT OF RENT THROUGH ACCOUNT PAYEE CHEQUE S; (H) GROCERY BILLS AND VOUCHERS; (I) SALARY REGISTER; (J) INVOICES OF GAS; 5.1 THE ASSESSEE ALSO FILED THE DETAILS OF THE STUDENTS SHOWING THEIR NAME, POSTAL ADDRESSES, PHOTOGRAPHS AND FEE RECEIPT FROM THEM. 5.2 THE ASSESSEE ALSO FILED THE AFFIDAVIT OF SHRI MAYANKBHAI SHAH OWNER OF THE HOSTEL BUILDING STATING THAT SHE WAS RUNNING HOSTE L DURING THE PERIOD THE A.Y. 2010-11. 5.3 THE ASSESSEE FURTHER SUBMITTED THAT SHE HAS DISCHARGE D HER ONUS BY PROVIDING THE PROOF OF IDENTITY, GENUINENESS AND CRED ITWORTHINESS OF THE TRANSACTIONS FOR THE CASH DEPOSITED IN THE BANK ACCOUNTS . THEREFORE NO ADDITION CAN BE MADE TO HER TOTAL INCOME. 5 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 5.4 THE ASSESSEE ALSO CLAIMED THAT THERE WAS NO DETAIL FUR NISHED BY THE AO FOR THE NOTICE ISSUED U/S 133(6) OF THE ACT. SIMILARLY, TH E REPLY RECEIVED BY THE AO FROM THE STUDENTS WAS ALSO NOT SHOWN TO THE ASSESSE E FOR HER REBUTTAL. THEREFORE THERE IS NO QUESTION OF MAKING ANY ADDITION IN THE HANDS OF THE ASSESSEE. HOWEVER, THE LD. CIT(A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: HOWEVER, THE APPELLANT IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND IMPORTANTLY SHE HAS FAILED TO DISCLOSE PARTICULARS OF S UCH ACTIVITY IN HER RETURN OF INCOME. WHEN THE AO DURING THE COURSE OF ASSESSMENT PROC EEDINGS ASKED FOR DETAILS TO VERIFY THESE DEPOSITS ASSESSEE FAILED TO DISCHAR GE HER ONUS. THE AO HAS ASKED TO PRODUCE ANY OF THE THREE STUDENTS TO VERIFY THE CON TENTION OF THE ASSESSEE BUT ASSESSEE HAS FAILED TO DO SO. FROM THE INQUIRIES MA DE BY SENDING NOTICES U/S.136(6) OF THE ACT, THE AO HAS OBSERVED THAT THERE ARE DISCR EPANCIES IN THE DETAILED FURNISHED BY THE ASSESSEE AND INFORMATION GIVEN BY SOME STUDENTS IN RESPONSE TO THE NOTICE U/S.133(6) OF THE ACT. THE CONTENTIO N OF THE APPELLANT THAT ADDITION HAS BEEN MADE BEHIND THE BACK OF THE ASSESSEE IS ALSO NOT CORRECT AS THE ASSESSEE HAS FAILED TO DISCHARGE PRIMARY ONUS WHICH LIES UP ON THE ASSESSEE. CONSIDERING ALL THESE FACTS, THE ADDITION MADE BY THE AO F OR THE PEAK DEPOSIT IN THESE BANK ACCOUNTS IS JUSTIFIED AND CONFIRMED. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS IN APPEAL BE FORE US. 6. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FRO M PAGES 1-316 AND FILED VARIOUS DETAILS WHICH CAN BE SUMMARIZE AS UNDER: PARTICULARS PGS OF P/B LETTER DATED 23.10.12 ADDRESSED TO AO 12-13 BANK STATEMENTS 14-32 INCOME & EXPENDITURE A/C 33 CASH STATEMENT 34-41 FEES RECEIPTS 42-51 ELECTRICITY BILLS 54-111 RENT AGREEMENT 112-114 VOUCHERS W.R.T PAYMENT OF RENT 115-121 6 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 GROCERY BILLS AND VOUCHERS 125-139 SALARY REGISTER 140-151 BILLS OF ITEMS PURCHASES FROM PROVISION STORE AND VOUCHERS 152-194 BILLS W.R.T PURCHASE OF GAS AND VOUCHERS 195-219 LETTER DATED 06.11.2012 ADDRESSED TO AO 226-227 LIST OF STUDENTS FROM WHOM HOSTEL FEES HAVE BEEN RECEIVED 228 LIST OF ABOVE STUDENTS ALONG WITH THEIR ADDRESS AND PHOTO 229-235 RECEIPTS W.R.T PAYMENT ALONG WITH VOUCHERS 236-260 NOTICE DATED 19.12.12 ISSUED BY AO 286-287 LETTER DATED 24.12.12 ADDRESSED TO AO 288 LETTER DATED 02.01.13 ADDRESSED TO AO 289 AFFIDAVIT OF MAYANK HASHMUKHLAL SHAH AND HIS BANK STATEMENT 290-297 NOTICE DATED 08.03.13 298 7. ON THE OTHER HAND, LD DR SUBMITTED THAT IT WAS THE D UTY OF THE ASSESSEE TO MAINTAIN THE BOOKS OF ACCOUNTS OF THE ACTIVITY I.E. R UNNING THE HOSTEL FACILITY. THE ASSESSEE AS SUCH WAS NOT CARRYING OUT ANY CHARITABLE AC TIVITY RATHER SHE WAS CARRYING THE COMMERCIAL ACTIVITY THEREFORE FEE WAS CHARGED FROM THE STUDENTS. 7.1 THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS N OT PRODUCED ANY IDENTITY CARD OF THE STUDENTS RESIDING IN THE HOSTEL S THOUGH IT IS ONE OF THE MANDATORY REQUIREMENTS. THE LD. DR VEHEMENTLY SUPPORTE D THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE DISPUTE RELATES TO T HE CASH DEPOSITED BY THE ASSESSEE IN HER SAVING BANK ACCOUNT. AS PER THE ASSESSEE, SHE WAS PROVIDING THE HOSTEL FACILITY TO THE POOR AND NEEDY STUDENTS AT A REAS ONABLE RATE. AS PER THE ASSESSEE THE AMOUNT RECEIVED WAS INCURRED IN PROVIDING SUCH FACILITY TO THE STUDENTS. HOWEVER, THE AO DID NOT BELIEVE THE SUBMISS ION OF THE ASSESSEE AND 7 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 ACCORDINGLY TREATED AN AMOUNT OF RS.9,50,000/- AS UNEXPLAINED IN COME OF THE ASSESSEE. 8.1 FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ASSE SSEE HAS GIVEN DETAILS OF THE EXPENSES INCURRED BY HER IN PROVIDING HOSTEL AND FOOD FACILITY TO THE STUDENTS. THE DETAILS OF THE EXPENSES HAVE ALREADY E LABORATED AND PLACED IN THE PAPER BOOK FILED BEFORE US. NONE OF THE AUTHORITY HAS POINTED OUT ANY DEFECT IN THE DETAILS OF THE EXPENSES INCURRED BY THE ASSESS EE. EVEN WE PRESUME THAT THE ASSESSEE WAS RUNNING A HOSTEL FACILITY IN COMMERCIA L MANNER THEN ALSO IN OUR CONSIDERED VIEW THE ASSESSEE IS ENTITLED FOR THE EXPENSES INCURRED IN CONNECTION WITH THE IMPUGNED ACTIVITY. THUS, THE PEAK BALANC E CANNOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AS SUCH, THE ASSESS EE IS ENTITLED TO CLAIM THE DEDUCTION OF THE EXPENSES INCURRED AGAINST THE RECEI PT FROM THE STUDENTS. ON PERUSAL OF THE INCOME AND EXPENDITURE OF THE STATEMENT FILED BY THE ASSESSEE, WE NOTE THAT THERE IS A DEFICIT IN THE STATEMENT. MEANIN G THEREBY THERE WAS NO SURPLUS LEFT TO THE ASSESSEE OUT OF THE RECEIPT OF M ONEY FROM THE STUDENTS. WE ALSO NOTE THAT NONE OF THE AUTHORITY BELOW HAS POINTED OUT ANY DEFECT IN THE DETAILS FILED BY THE ASSESSEE. 8.2 WE ALSO NOTE THAT THE ASSESSEE HAS FILED CASH STATEMENT ON PAGES 34-41 SHOWING ALL THE TRANSACTIONS OF MONEY RECEIVED FROM T HE STUDENTS AND COST INCURRED OUT OF SUCH MONEY. THE CASH STATEMENT CONTAI NS ALL THE DETAILS. THE LD. DR BEFORE US HAS ALSO NOT BROUGHT ANYTHING CONTRARY TO THE DETAILS FILED BY THE ASSESSEE WHICH IS PLACED IN THE PAPER BOOK. THUS, WE HAV E NO ALTERNATE EXCEPT TO REVERSE THE ORDERS OF AUTHORITIES BELOW. HENCE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. THEREFORE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED . 8 ITA NO.973/AHD/2016 SMT DHARINIBEN ANILKUMAR SHUKLA VS. ITO A.Y.. 2011-12 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON __1 ST _ NOVEMBER, 2018 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER ( WASEEM AHMED ) ACCOUNTANT MEMBER AHMEDABAD; DATED 01/11/2018 PRITI YADAV, SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' # / CONCERNED CIT 4. ' # () / THE CIT(A) 5, AHMEDABAD. 5. &'( ! , ! , *+, , / DR, ITAT, AHMEDABAD. 6. (- ./ / GUARD FILE. / BY ORDER, & //TRUE COPY// '/# $% ( DY./ASSTT.REGISTRAR) &'(, #)* / ITAT, AHMEDABAD 1. DATE OF DICTATION 09/10/2018 (PAGE-7) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : .. 22/10/2018 3. OTHER MEMBER .. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 25/10/2018 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 10. DATE OF DESPATCH OF THE ORDER