Appeal details
Counselvise Citation
[2012] 124 COUNSELVISE.COM (IT) 7532 (ITAT-CUTTACK)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 2 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
25-04-2012
Appeal Filed By
Assessee
Bench Allotted
DB
Next Hearing Date
02-04-2012
Assessment Year
2003-2004
Appeal Filed On
28-01-2009
Judgement Text
IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) IT(SS)A 25/ CTK - 2009 FOR THE A.Y. 2004 - 05 SMT. SANGAMITRA MISHRA 138, NILAKANTHESWAR ROAD,BARAMUNDA, BHUBANESWAR 751 003 PAN: AHZPM 6820 E VERSUS ASST. COMMISSIONER OF INCOME - TAX, WARD 1(2), BHUBAN ESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.S.PANDA/K.AGARWALLA, ARS FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, DR DATE OF HEARING : 02.04.2012 DATE OF PRONOUNCEMENT : 25.04.2012 ORDER PER BENCH : THE ASSESSEE HAS FILED THESE APPEALS AGAINST THE AGAINST THE ORDERS PASSED BY COMMISSIONER OF INCOME TAX (A) BHUBANESWAR, PERTAINING TO THE ASSESSMENT MADE U/S.153A/143(3) OF THE INCOME - TAX ACT,1961 FOR THE A.Y.2003 - 04 TO A.Y. 2006 - 07. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BE ING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY . 2. THE BRIEF FACTS ARE THAT SEARCH AND SEIZURE OPERATION U/S.132 OF THE L.T.ACT,1961 WAS CONDUCTED BY THE DEPARTMENT ON 09.08.2005 IN THE OFFICE PREMISES OF THE SOCIETY, ORISSA COMPUTER ACADEMY AND RESIDENTIAL PREMISES OF THE DIRECTORS. DURING THE COURSE OF SEARCH OPERATION, INCRIMI NATING DOCUMENTS , BOOKS OF ACC OUNT ETC. WERE FOUND AND SEIZED, BASED ON WHICH THE ASSESSING OFFICER ISSUED NOTICE U/S.153A OF THE ACT ON 08.03.2006 RE QUIRING THE ASSESSEE TO FI LE A RETURN OF INCOME. ON 28.04. 2006, THE ASSESSEE FILED HER RETURNS FOR THE AYS UNDER CONSIDERATION. THEREAFTER THE ASSESSING OFFICER ISSUED NOTICE U/S.143(2) ON 16.1.2007. THE ASSESSEE SUO MOTU FILED REVISED RETURNS ON 6.12.2007 . THE ASSESSING OFFICER, THOUGH TREATED THE REVISED IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 2 RETURN AS NON - EST ALLEGING TO HAVE BEEN FILED BELATEDLY, HELD THE ADDITIONAL INCOME DISCLOSED IN THE REVISED RETURN AS REGARDS THE DEPOSIT IN RD ACCOUNT AND INTEREST THEREON AS UNDISCLOSED INCOME OF THE A SSESSEE BESIDES MAKING ADDITION ON OTHER COUNTS AND COMPLETED THE ASSESSMENTS FOR ALL THE AYS U/S.153A/143(3) OF THE ACT. A.Y. INVESTMENT IN R.D. A/C. INTEREST ON R.D. A/C. GIFT FROM FATHER INCOME FROM LTCG INVESTMENT IN BAJAJ ALLIANZ STDR IN THE NAME OF MINOR SON 2003 - 04 30,00,000 77,730 1,00,000 - - - 2004 - 05 - 2,78,238 - - - - 2005 - 06 - 3,03,456 - - - 35,000 2006 - 07 3,30,860 - 9,41,107 50,000 3. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE CIT(A) AND BEING UNSUCCESSFUL, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS REGARDS THE INVESTMENT IN R.D. ACCOUNT IN THE ASSESSMENT YEAR 2003 - 04 AND INTEREST ON R.D.ACCOUNT IN ALL THE AYS UNDER CONSIDERATION, T HE LEARNED AR OF THE ASSESSEE DID NOT DISPUTE THE ADDITIONS BUT CONTENDED BEFORE US THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) HOLDING THE SAME AS UNDISCLOSED INCOME IS NOT PROPER. THE LEARNED DR, ON THE OTHER HAND , SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW POINTING OUT TO THE FACT THAT THE ASSESSEE HA D NOT FILED THE FIRST RETURN IN TIME. IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 3 5. ON CAREFUL GOING THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL MADE AVAILABLE TO THE TRI BUNAL, THE UNDISPUTED FACTS ARE THAT FOR ALL THE AYS UNDER CONSIDERATION THE ASSESSEE FILED R ETURNS ON 28.4 .2006 IN RESPONSE TO NOTICE U/S.153A. BUT AFTER RECONCILING THE ENTIRE INCOME/INVESTMENT WITH THE STATEMENT OF AFFAIRS, THE ASSESSEE FILED SUO MOTU T HE REVISED RETURNS ON 6.12.2007 DISCLOSING THE ABOVE ADDITIONAL INCOME BEFORE THE SAME WAS DETECTED BY THE TAX AUTHORITIES. THERE IS ALSO NO DISPUTE TO THE FACTS THAT THE ASSESSING OFFICER HAS UTILISED THE INFORMATION MADE IN THE REVISED RETURN FILED BY TH E ASSESSEE. BY FILING THE REVISED RETURN DISCLOSING ADDITIONAL INCOME IN THE REVISED RETURN, THE INTENTION OF THE ASSESSEE APPEARS TO BE VERY MUCH CLEAR FOR VOLUNTARY DISCLOSURE OF THE SAID INCOME WHICH WAS CLAIMED BY THE ASSESSEE TO HAVE BEEN DETECTED AFT ER FILING OF THE RETURN BUT BEFORE ASSESSMENT. SINCE THE ASSESSEE HAS DISCLOSED THE INCOME/INVESTMENT SUO MOT U IN THE REVISED RETURN S OF INCOME FILED BEFORE DETECTION OF THE SAME BY THE DEPARTMENT, AND SINCE THE ASSESSING OFFICER HAS UTILISED THE INFORMATI ON MADE IN THE REVISED RETURN S , THE SAID AMOUNTS CANNOT BE HELD AS UNDISCLOSED INCOME, AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE ASSESSEE . 6. AS REGARDS SUSTENANCE OF ADDITION OF 1,00,000 IN THE ASSESSMENT YEAR 2003 - 04, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION DISBELIEVING THE CLAIM OF THE ASSESSEE TO HAVE RECEIVED GIFT FROM HER FATHER. THE ASSESSEE HAD NOT FURNISHED ANY SU PPORTIVE EVIDENCES THOUGH CLAIMED BEFORE THE ASSESSING OFFICER, VIDE REPLY DT.20.8.2007 , THAT THE ASSESSEE HAD RECEIVED FROM GIFT FROM HER FATHER WHO GIFTED THE MONEY OUT OF THE RETIREMENT BENEFITS RECEIVED BY HIM FROM THE ORISSA STATE ELECTRICITY BOARD. T HE LEARNED CIT(A) CONFIRMED THE SAME FOR WANT OF SUPPORTIVE EVIDENCE. THE LEARNED AR OF THE ASSESSEE CONTENDED BEFORE US THAT THE ASSESSING OFFICER AS WELL AS THE IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 4 LEARNED CIT(A) ASKED FOR FURTHER DETAILS WITHOUT MENTIONING FOR ANY SPECIFIC DOCUMENT AND DOU BTED THE SOURCE OF THE ABOVE DEPOSIT IGNORING THE FACT THAT THE DONOR WAS WORKING GOVT. ORGANIZATION AND AT THE TIME OF HIS RETIREMENT, HE RECEIVED SUBSTANTIAL AMOUNT AS RETIREMENT BENEFIT. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS O F THE AUTHORITIES BELOW AND CONTENDED THAT THE IMP UGNED ADDITION OF 1 LAKH DISALLOWING THE CLAIM OF GIFT IS JUSTIFIED THE ASSESSEE HAVING FAILED TO ESTABLISH THE SAME. WE FIND THAT THE DONOR AND THE DONEE HAVING DISCLOSED THE SAME IN THEIR RESPECTIVE RETURNS CANNOT BE TAXED IN THE HANDS OF NEITHER OF TH E ASSESSEES. THEREFORE, THE ADDITION OF 1 LAKHS MADE IN THE HANDS OF THE ASSESSEE ON THIS COUNT CANNOT BE SUSTAINED AND AS SUCH, WE DIRECT DELETION OF THE SAID ADDITION. 7. THE NEXT DISPUTE IS REGARDING SUSTENANCE OF ADDITION OF 35,000 IN THE ASSESSM ENT YEAR 2005 - 06 . THE UNDISPUTED FACTS ARE THAT WHILE EXAMINING THE SEIZED MATERIALS, THE ASSESSING OFFICER FOUND A TERM DEPOSIT FOR 35,000 IN THE NAME OF SRI SARTHAK MISHRA (L/H SANGHMITRA MISHRA) IN IRC VILLAGE BRANCH OF PUNJAB NATIONAL BANK. IT IS THE CLAIM OF THE ASSESSEE THAT THE SAID AMOUNT REPRESENTED THE GIFTS RECEIVED ON THE BIRTHDAY CEREMONY OF HER MINOR SON. WE FIND THAT THE LEARNED CIT(A) DID NOT CONSIDER SUCH CLAIM OF THE ASSESSEE IN ITS PROPER PERCEPTIVE. THE FACTS UNDISPUTED ARE THAT THE AS SESSEE IS A SOCIALLY REPUTED PERSON AND AS SUCH THERE IS NO MATERIAL TO DISBELIEVE THE CLAIM OF THE ASSESSEE THAT THE AMOUNT HAS BEEN RECEIVED AS GIFTS ON THE BIRTHDAY CEREMONY OF HER MINOR SON, WHICH IS NOT UNCOMMON AS A TRADITION PREVAILING IN THE SOCI ETY CONSIDERING THE STATUS OF THE ASSESSEE. THEREFORE, THE ADDITION OF 35,000 MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) AS FROM UNDISCLOSED SOURCE, IN OUR CONSIDERED VIEW, IS NOT PROPER AND THE SAME IS DIRECTED TO BE DELETED. IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 5 8. AS REGARDS THE ADDITION OF 9,41,107 MADE IN THE ASSESSMENT YEAR 2006 - 0 7, THE FACTS ARE THAT THE ASSESSEE SHOWN 9,41,107 AS LONG TERM CAPITAL GAINS AND CLAIMED EXEMPTION U/S.10(38) OF THE I.T.ACT. THE ASSESSING OFFICER DID NOT ALLOW THE SAID CLAIM OF EXEMPTION OBSERVING THAT THE ASSESSEE FILED NO EVIDENCE IN SUPPORT OF SHAR E TRANSACTIONS. ON APPEAL, THE LEARNED CIT(A) CALLED FOR REMAND REPORT. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE REMAND REPORT, THE LEARNED CIT(A) CONFIRMED THE ADDITION OF 9,41,107 OBSERVING IN HIS ORDER, VIDE PARAGRAPHS 4.4., AS UNDER : 4.4. I HAVE GIVEN CAREFUL CONSIDERATION TO THE MATTER. THE FIRST THING THAT EMERGES FROM THE ABOVE TRANSACTION IS THAT THE VALUE OF THE SHARE IN KWALITY CREDIT & LEASING LTD. ROSE FROM RS. 5.32 ON 30.03.2004 TO RS. 163.34 ON 23.09.2005, AN ABNORMAL GROW TH OF 3070% IN A PERIOD OF 18 MONTHS. THE APPELLANT SITTING IN BHUBANESWAR WITHOUT KNOWING THE NAMES OF SHARES AND THOSE OF BROKERS (AS PER HER STATEMENT) IS THE BENEFICIARY OF THIS ABNORMAL GROWTH. AN INVESTMENT OF RS. 31,920/ - HAS GIVEN HER RS. 9,73,530/ - WITH A PROFIT OF RS. 9,41,107/ - . THERE IS NOTHING ON RECORD TO SHOW THAT THE GROWTH IN THE PRICE OF THE SHARE OF THIS RELATIVELY UNKNOWN COMPANY HAS ANYTHING TO DO WITH THE FUNDAMENTALS OF THE COMPANY. THEREFORE, THE SALE AND PURCHASE OF THE SHARES OF TH IS COMPANY WAS ENQUIRED INTO FROM KOLKATA STOCK EXCHANGE AND SEBI DURING THE REMAND PROCEEDINGS. THE INFORMATION RECEIVED FROM THESE TWO AGENCIES IS QUITE REVEALING: I ) ON 30.03.2004 M/S. MUKESH DOKANIA & CO. EXECUTED THREE CROSS DEALS FOR RS. 5.30 PER SHARE WITH THE CLIENT CODE CLIENT. II ) THERE WERE AS MANY AS 4525 CROSS DEALS IN THIS SCRIPT DURING THE PERIOD 01.04.2002 TO 31.03.2006. III ) THE SHARES WERE SOLD BY THE BROKER SRI SIDDHARTH SETHIA TO SHIVAM STOCK BROKING PVT. LTD., WHO WAS SUSPENDED BY SEBI 29.09.2005 . IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 6 IV ) SEBI HAS ENUMERATED THE FEATURES OF SUCH MANIPULATIVE TRANSACTIONS WHICH IS SEEN IN THE PRESENT CASE. ALL THESE LEAD TO THE CONCLUSION THAT THE PRICE OF THE SCRIP WAS ARTIFICIALLY MANIPULATED AND INFLATED TO PROVIDE HAWLA ENTRY FOR UNACCOUNTED INCOME. TH E INCREASE IN THE PRICE OF THE SCRIP IN QUESTION TRADED THROUGH CROSS DEALS WITHIN A FEW BROKERS WHO HAVE ALSO BEEN BOOKED FOR MALPRACTICES DEFINITELY FAILS THE TEST OF HUMAN PROBABILITY IN TERMS OF A GENUINE TRANSACTION. THEREFORE, THE RATIO OF THE DECISI ON IN THE CASE OF SUMATI DAYAL (SUPRA) IS APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS OF THE ABOVE CASE ARE SIMILAR TO THOSE IN THE CASE OF MAHESH PRASAD AGRAWAL WHICH WAS DECIDED BY THE ITAT, CUTTACK BENCH FOR THE A.Y. 2001 - 02 ON 28. 08.2009 IN ITA NO. 230/CTK/2008. THE FACTS, BRIEFLY, IS THAT THE SAID ASSESSEE PURCHASED 17,000/ - SHARES OF NEXCEN SOFT - TECH LTD. (THE COMPANY HEREINAFTER) ON 04.05.1999 FOR RS. 1,39,400/ - THE SAME WERE DECLARED AS SOLD ON 05.05.2000 FOR RS. 19.61.647/ - . THE ASSESSEE LOCATED IN A REMOTE PART OF ORISSA HAD LITTLE KNOWLEDGE OR EXPERIENCE IN SHARE TRANSACTION. THE LD. A.O. REFERRED THE MATTER TO SEBI WHO REPORTED THAT THERE WAS NO CORPORATE ANNOUNCEMENT TO WARRANT THE STEEP PRICE IN THE PRICE OF THE SCRIPT. THE TWO BROKERS HANDLING THE ABOVE SCRIP HAD A COMMON CLIENT AND TRADING WITH THIS CLIENT ACCOUNTS FOR 90% OF THE TOTAL TRANSACTIONS IN THE SCRIP. THE REMAINING 10% WAS ON BEHALF OF ANOTHER CLIENT. SEBI REPORTED THAT AN ARTIFICIAL MARKET APPEARS TO HAVE BE EN CREATED FOR THIS SCRIP WITHOUT ACTUALLY GIVING OR TAKING DELIVERY OF SCRIP. THE ASSESSEE RELIED ONLY ON CONTRACT NOTES. THE ITAT UPHELD THE ORDER OF THE LD. A.O. OBSERVING AS UNDER: 5.3 THE PRINCIPLE THAT THE APPARENT IS REAL, WHICH FORMS THE ESSENCE OF THE ASSESSEES CASE, WOULD NOT HOLD IN FACE OF SUCH IMPUGNING, AUTHENTIC AND DAMNING EVIDENCES BROUGHT BY THE REVENUE. THE SEVERAL EVIDENCES ON RECORD CLEARLY INDICATE CLEAR AND COMPLETE ABSENCE OF ANY GENUINE MARKET FORCES BEHIND THE PURPORTED SHARE PR ICE CONSIDERING THE FACTS AND CIRCUMSTANCES IN THE APPELLANTS CASE, IT IS QUITE CLEAR THAT THE TRANSACTION IS NOT A GENUINE TRANSACTION. THE SHARE PRICE HAS BEEN MANIPULATED TO GIVE ACCOMMODATION ENTRY TO UNACCOUNTED MONEY. THEREFORE, THE ADDITION OF RS . 9,41,107/ - IS UPHELD. IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 7 9. DURING THE COURSE OF HEARING, THE ASSESSEE FILED NECESSARY DOCUMENTS INCLUDING THE CONTRACT NOTES BOTH FOR PURCHASE AND SALES, THE BANK STATEMENTS WHEREIN TRANSACTIONS FOR BOTH PURCHASE AND SALES HAS BEEN REFLECTED WHICH IS EV IDENT FROM THE ASSESSMENT ORDER. THE LEARNED AR OF THE ASSESSEE FILED COPIES OF THE SAME PLACE AT 52 TO 58 OF THE PB, WHICH WERE ALSO FILED BEFORE THE ASSESSING OFFICER IN COURSE OF THE REMAND PROCEEDINGS. WITHOUT CONTRADICTING THE DOCUMENTS FILED OR WITHO UT POINTING OUT ANY DEFECTS IN THE DOCUMENTS FILED, THE ASSESSING OFFICER PRESUMED THAT THE TRANSACTIONS MADE ON PURCHASE AND SALE OF SHARES ARE BOGUS, WHICH IS ILLEGAL AND BAD IN LAW. HE CONTENDED THAT THE ENTIRE TRANSACTIONS OF THE SEARCH PERIOD WITH REG ARD TO SHARES WERE MADE THROUGH STOCK EXCHANGE AND ALSO THROUGH RECOGNIZED BROKERS. DURING THE COURSE OF INVESTIGATION THE TWO BROKERS THROUGH WHOM THE SHARES WERE TRANSACTED WERE SUMMONED WHO CONFIRMED THE TRANSACTIONS. AS REGARD THE PRICE HIKE IN THE VAL UE OF THE SHARE ITS MARKET DRIVEN AND DEPEND UPON AND SENTIMENT OF THE MARKET. THE STOCK MARKET IS REGULATED BY THE SEBI/NSE AND HIKE IN THE PRICE OF THE SHARE SHOULD NOT BE QUESTIONED. HE FURTHER SUBMITTED THAT W HILE THE LEARNED CIT(A) HAS REFER RED TO THE DECISION OF THE ITAT, CUTTACK BENCH IN THE CASE OF MAHESH PRASAD AGARWAL V. ITO (ITA NO.230/ CTK/2008) FOR THE A.Y. 2001 - 02, WHICH FACTS ARE ENTIRELY DIFFERENT THAN IN THE ASSESSEES CASE. THE LEARNED AR OF THE ASSESSEE FURTHER CONTENDED THAT THE ITAT, CUT TACK BENCH HAS DELETED SIMILAR ADDITION AS IN THE CASE OF THE ASSESSEE, IN THE CASE OF SRI RAM RATAN BANKA IN IT(SS)A NO.51/CTK/12004 FOR THE AY 1995 - 96 TO 2000 - 01. 9.1. WE HAVE CONSIDERED THIS ISSUE IN DETAIL VIDE CONSOLIDATED ORDER PASSED ON TO - DAY IN TH E CASE OF ST. ASHALATA MISHRA V. ACIT IN IT(SS)A NOS.249,250, 251 AND 252/CTK/2011 AND 459/CTK/2010, WHEREIN WE HAVE HELD THAT IN SIMILARLY IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 8 PLACED CONDITION THE SAID AMOUNT CANNOT BE TAXED AS CONSIDERATION RECEIVED FROM UNDISCLOSED SOURCES. THE LEARNED CIT (A) ERRED IN CONFIRMING INCOME FROM LONG TERM CAPITAL GAINS WITHOUT POINTING OUT ANY CONTROVERTING MATERIAL FOR SUSTAINING THE SAME. WE DIRECT THE DELETION THEREOF . 10. AS REGARDS THE ADDITION OF 50,000 BEING THE INVESTMENT MADE BY THE ASSESSEE TOWARDS PURCHASE OF POLICIES BEARING NOS.8955920 & 8957140 DURING THE FY ENDING ON 31.3.2006 THE ASSESSING OFFICER OBSERVED IN HIS ORDER THAT THOUGH THE INV ESTMENT WAS FOUND TO HAVE BEEN MADE BY WAY OF CHEQUE , THE ASSESSEE DID NOT FURNISH THE DETAILS OF CHEQUE, WH ICH CLEARLY ESTABLISHES THAT THE INVESTMENTS THOUGH MADE THROUGH BANK BUT THE SOURCE OF THE SAME WAS NOT ACCOUNTED FOR AND HOW THE FUND WAS AVAILABLE TO THE ASSESSEE IS NOT CLEAR, PARTICULARLY WHEN THE ASSESSEE DID NOT MAINTAIN ANY PERSONAL ACCOUNTS. IN V IEW OF THE ABOVE, THE ASSESSING OFFICER HELD T HE INVESTMENT OF 50,000 IN BAJAJ ALLIANZ LIFE INSURANCE AS AN INVESTMENT OUT OF UNACCOUNTED INCOME AND THEREFORE, ADDED TO THE TOTAL INCOME. BEFORE THE LEARNED CIT(A) IT WAS CONTENDED THAT THE SAID AMOUNT WAS BROUGHT BY CHEQUES FROM THE ASSESSEES HUSBAND SHRI S.P.MISHRA. THE ASSESSEE FILED A COPY OF THE BANK STATEMENT WITH STANDARD CHARTERED BANK IN THE NAME OF SUBRAT PRASANNA MISHRA, HUSBAND OF THE ASSESSEE WHERE THERE ARE TWO CHEQUES WITHDRAWALS OF 25,000 EACH ON 27.5.2005. THE LEARNED CIT(A) OBSERVED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CATEGORICALLY STATED THAT INVESTMENT IN QUESTION HAS COME FROM SURRENDERED AMOUNT. HOWEVER, DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE IS REPUDIATING T HE ABOVE EXPLANATION STATING THAT THE AMOUNT HAS COME FROM THE BANK ACCOUNT OF HER HUSBAND. THE ABOVE EXPLANATION CONTRADICTS THE CASH FLOW STATEMENT AS ON 31.03.2006 FILED BY THE ASSESSEE. HE FURTHER OBSERVED THAT THE IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 9 ASSESSEE HAS ONLY LINKED THE ABOVE WI THDRAWAL TO INVESTMENT IN BAJAJ ALLIANZ. THE DETAILS OF THE MONEY ACTUALLY GIVEN TO BAJAJ ALLIANZ HAVE NOT BEEN FURNISHED. THEREFORE, HE WAS OF THE VIEW THAT IT WAS REASONABLE TO GO BY THE EXPLANATION PROVIDED BY THE ASSESSEE TO THE ASSESSING OFFICER AND T HE CASH FLOW STATEMENT FILED BY HER. HE CONFIRMED THE ADDITION. 11. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE INVESTMENT MADE IN BAJAJ ALLIANZ FOR 50,000 WAS IN FACT MADE BY BORROWING FUNDS FROM HUSBAND OF THE APPELLANT WHICH WAS SUBSEQUENTLY REPAID. THE ASSESSEE IS MAINTAINING CURRENT ACCOUNT WITH HER HUSBAND. SHE FILED HER STATEMENT OF AFFAIRS WITH DEPARTMENT ALONG WITH REVISED RETURN FILED ON 0 6.12.2007, COPIES OF WHICH ARE ENCLOSED IN PAPER BOOK AT PAGE NO. 50 FOR A.Y. 2005 - 06 & AT PAGE NO. 51 FOR A.Y. 2006 - 07. FROM THE STATEMENT OF AFFAIRS, IT MAY BE SEEN THAT THE ASSESSEE HAD GIVEN AN ADVANCE OF 10,00,000 AS ON 31.03.2005 AND THE SAME HAD BEEN REDUCED TO 9,75,000 , WHICH REPRESENTS THE BALANCE OF THE CURRENT ACCOUNT AT THE END OF THE YEAR. THE SOURCE OF THE ABOVE INVESTMENT HAS BEEN DULY REFLECTED IN THE STATEMENT OF AFFAIRS. THE LEARNED AR OF THE ASSESSEE FURTHER CONTENDED THAT WHEN BOTH THE ASSESSEE AND HER HUSBAND WERE ASSESSED BY THE SAME ASSESSING OFFICER IN CONSEQUENCE TO SEARCH, THE ASSESSING OFFICER SHOULD HAVE VERIFIED THE ABOVE TRANSACTIONS FROM THE ACCOUNT OF HER HUSBAND BEFORE TAKING ANY ADVERSE VIEW. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 12. HAVING HEARD BOTH THE PARTIES AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND MATERIAL MADE AVAILABLE TO THE TRIBUNAL, WE FIND FORCE IN THE SUBMISSION OF THE LEARNED AR OF THE ASSESSEE THAT THE AMOUNT IN QUESTION HAS BEEN INVESTED IN BAJAJ ALLIANZ OUT OF THE FUNDS RECEIVED FROM HER IT(SS)A 24/ CTK/2009 (A.Y. 2003 - 04) IT(SS)A 25/ CTK/2009 ( A.Y. 2004 - 05) IT (SS)A 18/ CTK/2012 ( A.Y. 2005 - 06) AND IT(SS)A 132/ CTK/2011 ( A.Y.2006 - 07) 10 HUSBAND, WHICH INVESTMENT HAS DULY BEEN REFLECTED IN THE STATEMENT OF AFFAIRS SUBMITTED ALONG WITH THE REVISED RETURN. THE LEARNED CIT(A) CONS IDERING THE MATERIAL MADE AVAILABLE BEFORE HIM HAS CATEGORICALLY OBSERVED THAT THE ASSESSEE HAS LINKED THE ABOVE WITHDRAWAL TO INVESTMENT IN BAJAJ ALLIANZ. BUT THE ASSESSEE DID NOT FURNISH THE DETAILS OF THE MONEY ACTUALLY GIVEN TO BAJAJ ALLIANZ. WHEN THE ASSESSEE HAS LINKED THE WITHDRAWAL TO INVESTMENT AND ADMITTEDLY THE INVESTMENT WAS MADE IN BAJAJ ALLIANZ, AND UNDISPUTEDLY THE ASSESSEE HAS SURRENDERED A SUBSTANTIAL AMOUNT OF INCOME, THE IMPUGNED ADDITION OF 50,000, IN OUR CONSIDERED VIEW, CANNOT BE HEL D AS OUT OF UNDISCLOSED SOURCES. THE SAID ADDITION IS THEREFORE, DIRECTED TO BE DELETED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DA TE: 25.04.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SMT. SANGAMITRA MISHRA 138, NILAKANTHESWAR ROAD,BARAMUNDA, BHUBANESWAR 751 003 2. THE RESPONDENT: ASST. COMMISSIONER OF INCOME - TAX, WARD 1( 2), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.
Mehul