Varsha Agrawal, Indore V. ACIT2(1), Bhopal

ITSSA 01/Ind/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7248 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 01-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: GIRISH AGRAWAL; NISHA LAHOTI A RS
• Keywords: Income from undisclosed sources
• Section: 143(3); 153A; 234B; 143(2); 68; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE RAJPAL YADAV, VICE PRESIDENT AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING IT(SS)A NO.01/IND/2019 ASSESSMENT YEAR: 2007-08 MRS. VARSHA AGARWAL BHOPAL PAN:ADJPA4697F : APPELLANT V/S ACIT-2(1) BHOPAL : RESPONDENT APPELLANT BY SHRI GIRISH AGRAWAL & MS. NISHA LAHOTI, ARS REVENUE BY SHRI S.S. MANTRI, CIT-DR DATE OF HEARING 04.08.2021 DATE OF PRONOUNCEMENT 23.08.2021 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 IS DIRECTED A GAINST THE MRS. VARSHA AGARWAL IT(SS) NO.01/IND/2019 2 ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS) (I N SHORT LD. CIT],-2(1) BHOPAL DATED 31.12.2009 WHICH IS ARISIN G OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHO RT THE ACT) DATED 13.11.2007 FRAMED BY ACIT, BHOPAL. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN IT(SS)ANO.01/IND/2019: 1. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE INITIATION OF PROCEEDINGS U/S 153A ARE UNLAWFUL AND WITHOUT JURISDICTION AND, THEREFORE, THE ASSESSMENT MADE BE HELD AS UNLAWFUL AND WITHOUT JURISDICTION AND HENCE BE CANC ELLED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED AND IS NOT JUSTIFIED IN SUSTAI NING ADDITION OF RS.286561/- MADE BY THE AO AS PER PARA (5) OF THE A SSESSMENT ORDER THE SAID UNLAWFUL AND UNJUSTIFIED ADDITION OF RS.286561/- BE KINDLY DELETED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ASSESSEE IS NOT THE OWNER OF THE BANK ACCOUNT O F SHRI MANOJ KUMAR JAIN AND THE DEPOSITS IN THE SAID BANK ACCOUN T DO NOT IN ANY MANNER REPRESENT THE UNDISCLOSED INCOME OF THE ASSESSEE AND THEREFORE, THE ADDITION OF RS.286561 IS UNLAWFU L AND UNJUSTIFIED AND, THEREFORE BE DELETED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEVY OF INTEREST U/S 234A 234B & 234C ARE UNLAW FUL AND HENCE BE CANCELLED. 2. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE T HAT THE ASSESSEE IS AN INDIVIDUAL AND PARTNER IN THE FIRM, NAMELY AG RAWAL JEWELERS. SEARCH U/S 132 OF THE ACT WAS CARRIED OUT ON 13.11.2007. THE ASSESSEE WAS ALSO SUBJECTED TO SEAR CH. NOTICE U/S 153A OF THE ACT WAS ISSUED. IN RESPONSE RETURN FOR A.Y. 2007- MRS. VARSHA AGARWAL IT(SS) NO.01/IND/2019 3 08 WAS FILED AND THE SAME INCOME WAS DISCLOSED AS W AS SHOWN IN THE ORIGINAL RETURN FILED IN THE RETURN SUBMITTED O N 19.06.2008. NOTICE U/S 143(2) OF THE ACT DULY SERVED UPON THE A SSESSEE. 3. LD. AO WHILE EXAMINING SEIZED RECORDS INCLUDING THE BANK ACCOUNT IN NAME OF THE SHRI MANOJ KUMAR JAIN WHO IS AN EMPLOYEE OF AGRAWAL JEWELLERS OBSERVED THAT CERTAIN ENTRIES INCLUDING CASH DEPOSITS WERE APPEARING IN THIS BANK ACCOUNT AND ON 02.09.2006 CHEQUE OF RS. 286561/- WAS ISSUED TO THE ASSESSEE NAMELY VERSHA AGARWAL. LD. AO WAS OF THE V IEW THAT AN EMPLOYEE CANNOT GIVEN ADVANCE TO ITS EMPLOYER AND I T IS ACTUALLY UNACCOUNTED INCOME OF THE ASSESSEE AND HE ACCORDING LY ADDED THE AMOUNT TO THE INCOME DECLARED BY THE ASSESSEE A ND ASSESSED THE INCOME AT RS.8,77,790/-. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE LD . CIT(A) BUT COULD NOT SUCCEED. 5. NOW ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED SUPPORTING THE SUBMI SSIONS FILED BEFORE THE LD. CIT(A), DOCUMENTS PLACED IN THE PAPE R BOOK RUNNING FROM PAGES 5 TO 37 AND ALSO RELYING ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF AGARWAL JEWELLERS (ONE OF THE GROUP MRS. VARSHA AGARWAL IT(SS) NO.01/IND/2019 4 CASE WHERE SEARCH WAS CONDUCTED) IT(SS)A NO. 86/IND /2012 DATED 19.06.2012. 6. PER CONTRA LD. DR VEHEMENTLY ARGUED SUPPORTING T HE ORDERS OF BOTH THE LOWER AUTHORITIES. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. GROUND NO.1 & 4 BY THE ASSESSEE A RE GENERAL IN NATURE AND THE EFFECTIVE GROUNDS ARE GROUND NO.2 & 3 THROUGH WHICH SOLE GRIEVANCE RAISED BY THE ASSESSE IS AGAIN ST THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.2,86,56 1/- MADE BY THE LD. AO TOWARDS UNDISCLOSED INCOME OF THE ASSESS EE. 8. WE FIND THAT NEXUS OF THE ALLEGED ADDITION IS A BANK ACCOUNT OF MR. MANOJ KUMAR JAIN WHO IS AN EMPLOYEE OF AGARWAL JEWELLERS OF WHICH THE ASSESSEE IS A PARTNER. IN THE BANK ACC OUNT OF MR. MANOJ KUMAR JAIN AS REPRODUCED IN THE ASSESSMENT OR DER ON 24 TH AUGUST 2006, 31 ST AUGUST, 2006 AND 1 ST SEPTEMBER 2006 THERE ARE SOME CREDIT ENTRIES OF RS.27,000/-, RS. 3 7.60 & RS, 6,500/- AND ALSO ON 29.08.2006, 30.08.2006, 31.08.2 006 & 02.09.2009, THERE ARE CASH DEPOSITED OF RS.23,000/- RS.20,000/- , RS.81,000/-, RS.1,30,000/- & RS.10,000/-. ON 2 ND SEPTEMBER 2006 A CHEQUE OF RS.2,86,561/- HAS BEEN ISSUED TO A SSESSEE. MRS. VARSHA AGARWAL IT(SS) NO.01/IND/2019 5 WHEN MR. MANOJ KUMAR JAIN WAS ENQUIRED BY THE REVEN UE AUTHORITIES ABOUT THE SOURCE OF CASH DEPOSIT IT WAS STATED BY HIM THAT ALL THESE AMOUNTS HAD BEEN RECEIVED AGAINST TH E SALE OF LAND BUT NO DOCUMENTARY EVIDENCE WAS FURNISHED. AFTER TH IS NO FURTHER ENQUIRY WAS MADE BY THE LD. AO AND HE MERELY INTERP RETED THAT THE AMOUNT OF RS.2,86,561/- RECEIVED BY ASSESSEE IS HER UNDISCLOSED INCOME ROUTED THROUGH SHRI MANOJ KUMAR JAIN. 9. WE HOWEVER FAIL TO FIND ANY MERIT IN THIS FINDIN G BECAUSE BEFORE US BANK ACCOUNT OF THE ASSESSEE IS NOT PLACED NOR T HE LD. AO HAD MADE ANY ENQUIRY TO EXAMINE THAT WHETHER THE ALLEGE D SUM WAS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE, WHICH IS A PRIMARY CONDITION TO MAKE ADDITION U/S 68 OF THE ACT. SECON DLY, CASH WAS DEPOSITED IN THE ACCOUNT OF MUKESH KUMAR JAIN, SO S UBSTANTIVE ADDITION OUGHT TO HAVE BEEN MADE IN HIS HAND IF SUF FICIENT EXPLANATION WAS NOT OFFERED AND IF NEEDED PROTECTIV E ADDITION COULD HAVE BEEN MADE IN THE HANDS OF ASSESSEE. THIR DLY, MR. MANOJ KUMAR JAIN SAID TO HAVE RECEIVED SOME AMOUNT CREDITED IN THE BANK ACCOUNT FROM SALE OF LAND, THEREAFTER NO E FFORTS SEEMS TO MRS. VARSHA AGARWAL IT(SS) NO.01/IND/2019 6 HAVE BEEN MADE BY THE REVENUE AUTHORITIES AS APPEAR ING FROM RECORDS, TO CHECK THE CORRECTNESS OF THIS STATEMENT . 10. UNDER THESE GIVEN FACTS AND CIRCUMSTANCES AND F ACTUAL MATRIX OF THE CASE AND LOOSE ENDS OF THE ENQUIRY CO NDUCTED BY THE REVENUE AUTHORITIES, ASSESSEE DESERVE TO SUCCEED AS THERE IS NO DIRECT MATERIAL FOUND BY THE REVENUE AUTHORITIES AG AINST HER TO MAKE THE ADDITION FOR UNDISCLOSED INCOME OF RS.2,86 ,561/-. THE EFFECTIVE GROUNDS NOS. 2 & 3 RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, ASSESSEES APPEAL IN IT(SS)ANO.01/IND/2019 IS ALLOWED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES, 1963 ON 23.08.2021. SD/- SD/- (RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT ME MBER / DATED : 23.08. 2021 PATEL/PS COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE