The DCIT, Cir. 2(1), V. Smt. Chetandevi Saklecha,

ITA 998/IND/2004

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1483 (ITAT-INDORE)
• Duration Of Justice: 5 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-11-2009
• Assessment Year: misc
• Appeal Filed On: 08-11-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: ANIL KHAA
• Keywords: Unexplained investment; Tax effect; Reassessment proceedings
• Section: 260A; 268A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI V.K. GUPTA, AM ITA NOS.997 & 998/IND/2004 ASSESSMENT YEARS: 1979-80 & 1980-81 DY. CIT-2(1), BHOPAL ..APPELLANT V/S. SMT. CHETANDEVI SAKLECHA, L/H OF LATE SHRI VIRENDRA KUMAR SAKLECHA, A-4, PROFESSOR COLONY, BHOPAL (PAN NOT AVAILABLE) ..RESPONDENT DEPARTMENT BY : SHRI V.K. KARAN, SR. DR ASSESSEE BY : SHRI ANIL KHABYA, CA ORDER PER JOGINDER SINGH, JM THESE TWO APPEALS ARE BY THE REVENUE FOR ASSESSMEN T YEARS 1979-80 & 1980-81. FIRST, WE SHALL TAKE UP APPEAL F OR ASSESSMENT YEAR 1979-80 WHEREIN IT HAS BEEN CHALLENGED THAT THE LD. FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.32,284/- MADE ON ACCOUNT OF PURCHASE OF BANK DRAFT, THE ADDITION OF RS.43,368/- BY TREATING THE ASSESSEE AS BENAMIDAR OF LATE SHRI V.K . SAKLECHA, THE ADDITION OF RS.1,82,714/- TO SHRI VIJAY KR. SAKLECH A, ALSO AS BENAMIDAR 2 OF SHRI V.K. SAKLECHA, RESTRICTING THE ADDITION OF RS.13,298/- BY REDUCING THE ADDITION OF RS.1 LAKH BELONGING TO SHR I RAJKUMAR SAKLECHA AS BENAMIDAR OF LATE SHRI V.K. SAKLECHA. 2. AT THE OUTSET, THE LD. COUNSEL FOR ASSESSEE POIN TED OUT THAT THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE AS THE TA X EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. THIS ASSERTION OF THE AS SESSEE COULD NOT BE CONTROVERTED BY THE REVENUE BEING FACTUALLY CORRECT . ON PERUSAL OF RECORD AND AFTER HEARING THE SUBMISSION PUT FORTH B Y THE LD. RESPECTIVE COUNSEL ON THE ISSUE OF MONETARY LIMIT, WE ARE REPR ODUCING HEREWITH THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL I N THE CASE OF R.K. HOTELS (ITA NO.383/IND/2009): THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF LD. CIT-(A)-II, BHOPAL, DATED 31.3.2009 FOR THE AY 2005-06 ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF 6,37,206/- MADE BY THE AO BY APPLYING THE PROVISIONS OF SEC. 154(3) ON ACCOUNT OF INCORRECTNESS AND INCOMPLETENESS OF BOOKS OF ACCOUNT.. 2. DURING HEARING OF THE APPEAL, WE HAVE HEARD SMT. APARNA KARAN, LD. SR. DR AND SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL, LD. COUNSEL FOR ASSESSEE. AT THE OUTSET, IT WAS POINTED OUT THAT THERE IS TYPOGRAPHICAL ERROR IN MENTIONING THE FIGURE OF RS.6,37,206/- IN THE GROUND OF APPEAL AS THE CORRECT FIGURE IS RS.3,94,732/-. THE ASSERTION OF THE ASSESSEE WAS CONSENTED TO BE CORRECT BY THE LD. SR. DR. FURTHER, IT WAS POINTED OUT THAT THE TAX EFFECT IS ALSO BELOW MONETARY LIMIT, THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY 3 AGREED TO THE SUBMISSION OF THE ASSESSEE TO THE EXTENT THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON THE FILE. WE HAVE FOUND THAT WHILE DISPOSING OF GROUND NO.3 (PAGE 2 OF THE IMPUGNED ORDER), THERE IS A MENTION THAT THE ADDITION OF RS.3,94,732/- WAS MADE BY ESTIMATING THE NET PROFIT @5% OF THE TOTAL TURNOVER OF RS.1,27,44,130/- IN PLACE OF RS.2,42,474/- SHOWED BY THE ASSESSEE, THEREFORE, WITHOUT GOING INTO THE MERIT OF THE CASE, WE ARE OF THE VIEW THAT SINCE THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT AND ALSO INSERTION OF SEC. 268A IN THE ACT, THIS APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. THE BOARD VIDE INSTRUCTION NO. 5 OF 2008 DATED 15.5.2008 SPECIFIED THE MONETARY LIMIT FOR FILING APPEAL BEFORE VARIOUS COURTS/TRIBUNAL. THE BOARD INSTRUCTION NO. 1979 DATED 23.3.2000, NO. 1985 DATED 19.6.2000, NO. 6 OF 2003 DATED 17.7.2003, NO. 19 OF 2003 DATED 23.12.2002, NO. 5 / 2004 DATED 27.5.2004, NO.2 / 2005 DATED 24.10.2005, NO.5 / 2007 DATED 16.7.2007 AND INSTRUCTION NO. 5/2008 DATED 15.5.2008, WHEREIN MONETARY LIMIT FOR FILING DEPARTMENTAL APPEALS (IN INCOME TAX MATTERS) AND OTHER CONDITIONS WERE SPECIFIED FOR FILING APPEALS BEFORE THE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT. IN SUPPRESSION OF THE ABOVE INSTRUCTIONS, IT WAS DECIDED BY THE BOARD THAT DEPARTMENTAL APPEAL WILL BE FILED, CONSIDERING THE MONETARY LIMIT, AS UNDER:- S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 2,00,000/- 4 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4,00,000/- 3 SUPREME COURT 10,00,000/- THE BOARD FURTHER CLARIFIED THE TAX EFFECT, WHICH MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE, HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. IN CASES OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. IN THE PRESENT APPEAL, THE TOTAL DISPUTED ADDITION IS RS.3,94,732/-, THEREFORE, AS AGREED/CANVASSED BY LD. REPRESENTATIVES FROM BOTH SIDES, THE TAX EFFECT IS BELOW RS.2 LAKHS, THE LIMIT PRESCRIBED FOR FILING APPEAL BEFORE THE TRIBUNAL, THEREFORE, APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FROM THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASES OF SHRI J.S. LUTHRA (ITA NO.712 TO 715/CHD/2009) AND ITO, WARD 2(2), ROPAR VS. THE JHALLIAN KALAN PRI. COOP MILK PRODUCE SOCIETY LTD., JHALLIAN KALAN DISTT. ROPAR (ITA NO.721/CHD/2009). THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CASE, FACTS AND THE JUDICIAL PRONOUNCEMENTS (SUPRA), THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES ON 6.10.2009. IN THE LIGHT OF THE ABOVE AND THE ARGUMENTS OF THE LD. RESPECTIVE COUNSEL TO THE EFFECT THAT THE TAX EFFECT IS BELOW MONETARY LIMIT, THEREFORE, THIS APPEAL OF THE REVENUE DESERVES TO B E DISMISSED. 5 3. IN ITA NO.998/IND/2004, THE FOLLOWING GROUNDS HA S BEEN RAISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN: - 1. DELETING THE ADDITION TO RS.1,33,374/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES; 2. DELETING THE ADDITION OF RS.45,914/- RELATED TO THE INCLUSION OF INCOME BELONGING TO SMT. CHETAN DEVI SAKLECHA TREATING HER AS BENAMIDAR OF LATE SH. VIRENDRA KUMAR SAKLECHA; 3. DELETING THE ADDITION OF RS.3,31,600/- MADE BY THE AO ON ACCOUNT OF BENAMI INCOME OF LATE SH. VIRENDRA KUMAR SAKLECHA IN THE HANDS OF SH. VIJAY KUMAR SAKLECHA. 4. GIVING RELIEF OF RS.10,916/- OUT OF TOTAL ADDITION OF RS.3,80,916/- MADE BY THE AO ON ACCOUNT OF BENAMI INCOME OF LATE SH. VIRENDRA KUMAR SAKLECHA IN THE HANDS OF SH. RAJ KUMAR SAKLECHA. 4. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT TH E REASSESSMENT WAS MADE BY THE LD. ASSESSING OFFICER ON THE DIRECT ION OF THE TRIBUNAL, THOUGH, OPPORTUNITY WAS GIVEN TO THE ASSESSEE BUT T HE ASSESSMENT WAS FRAMED AS WAS ORIGINALLY ASSESSED, THAT TOO, WITHOU T MENTIONING ANY FACTUAL FINDING. HOWEVER, LD. CIT, DR DEFENDED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS ARE THAT SI X APPEALS WERE REFRAMED BY THE ASSESSING OFFICER PURSUANT TO THE DIRECTION OF THE TRIBUNAL VIDE COMMON ORDER DATED 17.12.2002 FOR ASSESSMENT YEARS 1979-80 TO 1984-85. THE IMPUGNED ASSESSMENT YEAR BEFORE US IS 1980-81. SHRI 6 VIRENDRA KR. SAKLECHA EXPIRED ON 31.5.1999 AND IS R EPRESENTED BY HIS WIFE, THE PRESENT ASSESSEE, AS LEGAL REPRESENTATIVE . THERE IS NO DISPUTE TO THE FACT THAT BEFORE THE LD. FIRST APPELLATE AUT HORITY, WRITTEN SUBMISSIONS WERE FURNISHED BY THE ASSESSEE ALONG WI TH VARIOUS ASSESSMENT ORDERS OF THE GROUP, COPIES OF THE STATE MENTS OF CASH CREDITORS, IN RESPECT OF WHOM, SUBSTANTIVE ADDITION S WERE MADE. THERE IS A FACTUAL FINDING AT PAGE 9 (PARA 16.0 AND 16.1) THAT FOR THE ADDITION OF RS.1,33,374/-, AS UNEXPLAINED INVESTMENT IN SHAR ES, THE ASSESSING OFFICER HAS NOT DISCUSSED THE ADDITION WHILE REFRAM ING THE ASSESSMENT AND MERELY REPEATED THE EARLIER COMPUTATION. IN THE IMPUGNED ORDER, A DETAILED REASONING HAS BEEN MENTIONED IN PARA 16.3, 16.4 TO THE EFFECT THAT SHARES CANNOT BE PURCHASED IN THE NAME OF THE HUF AND THE HUF CAN HOLD INVESTMENT THROUGH MEMBERS WHOSE NAMES ARE RECORDED IN THE BOOKS OF COMPANY. EVEN OTHERWISE, THE HUF M/S. V.K. SAKLECHA & SONS PREFERRED KVSS FOR DIFFERENT AYS INCLUDING THE IMPUGNED ASSESSMENT YEAR WHEREIN THE DECLARATION HAS BEEN AC CEPTED BY THE DEPARTMENT. EVEN OTHERWISE, THERE IS NO FINDING IN THE REASSESSMENT PROCEEDINGS THAT INVESTMENT IN SHARES HAS COME OUT OF FUNDS OF THE ASSESSEE. FOR DELETING THE ADDITION OF RS.45,914/-, A FACTUAL FINDING HAS BEEN MENTIONED AT PAGE 11 (PARA 18 TO 18.2) WHEREIN NO DEFECT WAS POINTED OUT BY THE REVENUE AS KVSS WAS ACCEPTED FOR IMPUGNED ASSESSMENT YEAR. FOR THE ADDITION OF RS.3,31,600/-, A FACTUAL FINDING 7 HAS BEEN RECORDED AT PAGE 12 (PARA 19.0). FOR RELIE F OF RS.10,916/- OUT OF THE ADDITION OF RS.3,70,000/-, THERE IS A FACTUA L FINDING AT PAGE 13 AND 14 OF THE IMPUGNED ORDER WHEREIN NO INFIRMITY W AS POINTED OUT. THERE IS A FACTUAL FINDING THAT SHRI RAJKUMAR SAKLE CHA DID NOT FILE ANY RETURN FOR 1980-81 AND THE AMOUNT OF RS.3,70,000/- WAS HELD TO BE BENAMI INVESTMENT, CONSEQUENTLY, WE HAVE NOT FOUND ANY INFIRMITY IN THE STAND OF THE LD. CIT(A). IT IS NOT THE CASE THA T THE IMPUGNED ORDER HAS BEEN PASSED MECHANICALLY WITHOUT ASSIGNING ANY REASON. IN VIEW OF THIS FACT, THIS APPEAL OF THE REVENUE IS ALSO HAVIN G NO MERIT. FINALLY, BOTH THE APPEALS OF THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 25.11.2009. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.11.2009 !VYAS! COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR