Smt. Sejal D.Shah, Ahmedabad V. The Income tax Officer,Ward-4, Anand

ITSSA 247/AHD/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8277 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: ANIL R SHAH
• Keywords: Unexplained investment; Gift; Business income
• Section: 143(3); 142(1); 153A

Judgement Text

IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T.(SS) A. NO.247/AHD/2012 (ASST. YEA R: 2006-07) SMT.SEJAL D. SHAH, 201 MEROO SHIKHAR APARTMENT, NR.MAHAVIR JAIN DERASAR, NAN BAZAR, VALLABH VIDYANAGAR ANAND (APPELLANT) VS. INCOME TAX OFFICER, WARD -4, INCOME TAX OFFICE, ANAND. (RESPONDENT) PAN: BDTP-5947M APPELLANT BY : MR.ANIL R. SHAH RESPONDENT BY : MR. S.K. GUPTA, CIT (DR) ( )/ ORDER DATE OF HEARING : 9 -7- 2012 DATE OF PRONOUNCEMENT : 14- 9 -2012 PER: SHRI ANIL CHATURVEDI, A.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT (A)- IV, BARODA DATED 10-2-2012 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED GROUNDS OF APPEAL IN TWO PARTS (I) ON LEGALITY AND (II) ON MERITS. IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 2 3. GROUNDS MENTIONED IN PART-I I.E. ON LEGALITY ARE NOT PRESSED AND THEREFORE, NOT ADJUDICATED. GROUNDS IN PART-II ARE ON MERITS AND ARE AS UNDER:- (1) IT IS SUBMITTED BY YOUR APPELLANT THAT DURING COURSE OF ASSESSMENT PROCEEDING BEFORE ITO DURING PROCEEDINGS TO GIVE EFFECT TO THE ORDER U/S. 254 OF THE ACT AND ALSO BEFORE LD . CIT (A) HAD FILED FULL FACTS AND FIGURES AND EVIDENCE IN SUPPORT OF C LAIM THAT CASH OF RS.1,32,200/- SEIZED FROM BANK LOCKER AND DEPOSIT OF RS.7,000/- WAS FULLY EXPLAINED AND WAS NOT LIABLE TO BE ADDED. IT WAS FURTHER SUBMITTED THAT RS.7,000/- WAS NOT LI ABLE TO BE ADDED AS CASH CREDIT AND THAT SEC. 68/69 DOES NOT APPLY TO T HE FACTS OF THE CASE. (2) IT IS SUBMITTED THAT YOUR APPELLANT HAD BALANCE AVAILABLE AT OPENING OF THE YEAR AND HAD EARNING OF THE YEAR AVA ILABLE TO EXPLAIN CASH DEPOSIT OF RS.1,32,200/- IN LOCKER AND CASH DE POSIT OF RS.7,000/- AND THEREFORE THE ABOVE ADDITION IS NOT LIABLE TO BE ADDED. (3) IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANC ES CASH IN BANK LOCKER OF RS.1,32,200/- AND RS.7,000/- AS DEPOSIT I N BANK BEING DULY EXPLAINED AND SUPPORTED BY EVIDENCE BE DELETED. 4. BRIEF FACTS OF THE CASE ARE THAT SEARCH OPERATIO N U/S.132 IN THE CASES OF OSWAL GROUP AND ASSESSEE WAS CARRIED OUT ON 19-1 -2006. DURING THE COURSE OF SEARCH U/S.132, IT WAS NOTICED THAT THE A PPELLANT HAD IN HER BANK IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 3 ACCOUNT CASH DEPOSITS OF RS.7,000/-.FROM LOCKER IN HER NAME AND SHRI DILIP SHAH, CASH OF RS.1,32,200/- WAS FOUND AND THEREFORE ADDITION OF RS.1,39,200/- WAS MADE ON ACCOUNT OF UNDISCLOSED SO URCE OF INCOME. AGAINST THIS ADDITION, THE ASSESSEE PREFERRED APPEA L BEFORE THE CIT (A). LD. CIT (A) VIDE ORDER DATED 4-11-2008 CONFIRMED THE AD DITION MADE BY THE A.O. ASSESSEE THEREAFTER WENT IN APPEAL BEFORE HON BLE TRIBUNAL. THE HONBLE TRIBUNAL VIDE ORDER IN ITA NO.1115/AHD/2009 DATED 3-7-2009 SET ASIDE THE ISSUE TO THE FILE OF A.O. FOR CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE IN RESPECT OF AMOUNT CREDITED IN BANK ACCO UNT FOR PURCHASE OF HOUSE PROPERTY. 5. FOLLOWING THE DIRECTIONS OF THE HONBLE IT AT, A.O. ISSUED NOTICE U/S. 142(1) CALLING FOR NECESSARY EVIDENCES WITH RESPECT TO SOURCE OF CASH DEPOSIT IN BANK AND CASH FOUND IN LOCKER. THE ASSES SEE VIDE LETTER DATED 28-10-2010 INTERALIA SUBMITTED THAT THE AMOUNT WAS OUT OF ACCUMULATED SAVINGS FROM THE MONEY RECEIVED AS GIFTS ON BIRTHDA YS AND ANNIVERSARIES DURING EARLIER YEARS. IT WAS FURTHER SUBMITTED THAT THIS AMOUNT HAS BEEN SHOWN IN THE RETURN FILED U/S.153A. THE SUBMISSIONS MADE BY ASSESSEE WERE NOT FOUND ACCEPTABLE BY THE A.O. AND HE VIDE O RDER DATED 22-10-2010 HELD THE CASH OF RS.1,39,200/- AS INCOME FROM UNEXP LAINED/UNDISCLOSED SOURCES AND ADDED TO TOTAL INCOME. ON FURTHER APPE AL BEFORE THE CIT (A), CIT (A) VIDE ORDER DATED 10-2-2012 AGAIN CONFIRMED THE ACTION OF THE A.O. BY HOLDING AS UNDER:- 8THE APPELLANT HAS SUBMITTED THAT IN A.Y. 2006 -07 THE AMOUNT IN CASH FOUND IN LOCKER OF RS.1,32,200/- AND CASH DEPOSITED IN THE BANK OF RS.7,000/- WERE OUT OF BUSINESS INCO ME AND GIFTS AND SAVINGS/ AVAILABLE WITH HER BY WAY OF INCOME OF THE CURRENT YEAR IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 4 AND/OR PAST YEARS AS WELL AS INCOME AND SAVINGS OF THE YEAR UNDER APPEAL AS WELL AS OF PAST YEARS BY HER AND THE MEMB ERS OF HER FAMILY. THE APPELLANT HAS ENCLOSED A CHART SHOWING INCOME E ARNED BY HER FOR THE A.YRS FROM 2003-04 TO 2006-07 AND THE SAME SHOWS THAT BY WAY OF BUSINESS INCOME AND GIFTS ETC., INCLUDING IN COME FOR A.Y. 2006-07 SHE HAD RS.3,61,390/- FREELY AVAILABLE AFTE R MEETING EXPENSES AND WITHDRAWALS OUT OF WHICH SHE HAD RS.1, 32,200/- IN BANK LOCKER AND CASH DEPOSITS OF RS.7,000/- TOTALLI NG TO RS1,39,200/-. BUT THIS ENTIRE SUBMISSION OF THE APPELLANT IS NOT SUPPORTED BY DOCUMENTARY EVIDENCES. THE APPELLANT HAS SUBMITTED THAT SHE HAD BUSINESS INCOME AND HAD RECEIVED GIFTS. HOWEVER, WI TH REGARD TO AVAILABILITY OF FUNDS OUT OF GIFTS RECEIVED ON BIRT HDAYS, WEDDING ANNIVERSARIES AND FESTIVALS, THE SUBMISSION IS WITH OUT ANY BASIS PARTICULARLY IN VIEW OF THE FACTS THAT SHE HAS NOT DISCLOSED THE SAID GIFT INCOME IN HER RELEVANT RETURN OF INCOME. AGAIN SHE HAS NOT FURNISHED ANY CONFIRMATION LETTER FROM THE PERSON FROM WHOM T HE GIFT IS CLAIMED TO HAVE BEEN RECEIVED BY HER. THE IDENTITY AND CRED IT WORTHINESS OF THE DONOR AND GENUINENESS OF TRANSACTIONS ARE NOT E STABLISHED BY THE APPELLANT. AGAIN, THE APPELLANT HAS NOT BEEN ABLE T O ESTABLISH THAT SHE WAS ACTUALLY CARRYING OUT ANY BUSINESS ACTIVITY IN THE PAST AND ALSO DURING THE YEAR UNDER CONSIDERATION. IN THIS REGAR D NOTHING HAS BEEN FILED BY HER WHICH COULD ESTABLISH THAT SHE HAD ACT UALLY CARRIED OUT ANY BUSINESS ACTIVITIES AND HAD EARNED INCOME FROM THE SAME. THE A.O. IN THE ABOVE ORDER U/S. 143(3) READ WITH SECTI ON 153A AND 254 HAS MENTIONED THAT REGARDING APPELLANTS SUBMISSION THAT FUNDS WERE AVAILABLE WITH OTHER FAMILY MEMBERS IS NOT ACCEPTAB LE AS THE FUNDS AVAILABLE WITH THE OTHER FAMILY MEMBERS CANNOT BE M ERGED WITH THE INCOME OF THE APPELLANT. SINCE ALL THE FAMILY MEMBE RS ARE INDEPENDENT AND ALSO THE APPELLANT HAS NOT SHOWN AN Y BORROWINGS FROM ANY OF HER FAMILY MEMBERS, I ALSO AGREE WITH T HE VIEW OF THE A.O. AGAINST THE APPELLANT IS MAINTAINING TWO BANK ACCOUNTS IN HER NAME AND, THEREFORE, HER SUBMISSION THAT THE INCOME ACCUMULATED OVER A PERIOD OF ALMOST FIVE YEARS WERE KEPT IN THE BANK LOCKER IS NOT FOUND TO BE TENABLE. WITH REGARD TO DEPOSIT OF RS.7 ,000/- IN THE BANK AGAIN THE APPELLANT HAS FURTHER RELIED UPON HER SUB MISSION THAT THE ENTIRE AMOUNT WAS OUT OF HER ACCUMULATIONS STATED A BOVE. SINCE THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THAT SHE W AS ACTUALLY CARRYING OUT BUSINESS ACTIVITY AND, THEREFORE, IN V IEW OF THIS HER IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 5 EXPLANATION WITH REGARD TO HER DEPOSIT OF RS.7,000/ - IN THE BANK ALSO CANNOT BE ACCEPTED. 8.1. CONSIDERING THE ABOVE FACTS, I HOLD THAT THE A .O. HAS CORRECTLY MADE ADDITION OF CASH OF RS.1,32,200/- AS FOUND FRO M THE LOCKER OF THE APPELLANT AND ALSO THE CASH OF RS.7,000/- BY TR EATING THE SAME AS INCOME FROM UNEXPLAINED/UNDISCLOSED SOURCES AND, TH EREFORE, THESE TWO ADDITIONS ARE CONFIRMED. 6. AGAINST THE ABOVE ORDER OF CIT (A), ASSESSEE IS NOW IN APPEAL BEFORE US. 7. BEFORE US THE LD. A .R. SUBMITTED A CHART DEPICT ING THE TOTAL FUNDS AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENTS. FROM THE CHART THE LD. A.R. POINTED OUT THAT THE ASSESSEE WAS HAVING FUNDS IN EXCESS OF RS.1,67,932/- WHICH WAS MORE THAN SUFFICIENT TO MEE T THE ADDITIONS OF RS.1,39,200/- MADE BY A.O. THUS PROVING THAT THERE WAS NO CASE OF UNEXPLAINED INVESTMENTS/ INCOME. THE LD. A.R. ALSO SUBMITTED THAT THE ASSESSEE IS A GRADUATE HAILING FROM JAIN MAHAJAN SA MAJ. AFTER GETTING MARRIED IN 1990, THE ASSESSEE EARNED BY OFFERING TU ITIONS AND DOING KNITTING WORK DURING SPARE TIME. THE INCOME EARNED WAS APPRO XIMATELY IN THE RANGE OF RS.30,000/- PER YEAR. SINCE THE INCOME WAS BELOW TAXABLE LIMIT, THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME. THE LD. A.R. FURTHER SUBMITTED THAT APART FROM THE INCOME THE ASSESSEE RECEIVED CA SH GIFTS DURING THE FESTIVALS OF DIPAVALI, RAKSHA BANDHAN ETC. THUS THE LD. A.R. URGED THAT THE ADDITION MADE BY THE A.O. BE DELETED. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE ORDER OF A.O. IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 6 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE DETAILS FURNISHED IN THE PAPER BO OK AND PLACED ON RECORD IT IS REVEALED THAT TOTAL FUNDS AVAILABLE WAS TO TH E EXTENT OF RS.1,67,932/- WHICH COVERS THE ADDITION OF RS.1,39,200/- MADE BY THE A.O. THE ASSESSEE HAS SUBMITTED THAT IT HAD EARNED INCOME FROM TUITIO NS, KNITTING WORK AND CUSTOMARY GIFTS RECEIVED ON VARIOUS FESTIVAL OCCASI ONS. THE FACTUAL POSITION THAT ASSESSEE IS A GRADUATE AND HAS EARNED INCOME I N THE PAST FROM TUITIONS AND KNITTING ETC., AND THE INCOME BEING BE LOW THE TAXABLE LIMITS, COULD NOT BE CONTROVERTED BY REVENUE BY BRINGING AN Y MATERIAL ON RECORD. IN THE CASE OF RAJUBEN PATEL VS. ACIT (SUPRA) THE C O-ORDINATE BENCH OF TRIBUNAL AFTER TAKING INTO CONSIDERATION THE INCOME EARNED BY THE ASSESSEE IN PAST HELD THAT THE ASSESSEE IN THAT CASE HAD SUF FICIENT INCOME TO PURCHASE JEWELLERY. CONSIDERING THE TOTALITY OF FAC TS AND RELYING ON THE DECISION OF CO-ORDINATE BENCH AND IN VIEW OF THE FA CT THAT THE AMOUNT AVAILABLE WITH ASSESSEE WAS MORE THAN THE ADDITION MADE BY A.O., WE ARE OF THE VIEW THAT ON THE FACTS OF THE PRESENT CASE N O ADDITION CAN BE MADE BY A.O. ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. IN VIEW OF TOTALITY OF FACTS WE ARE OF THE VIEW THAT IN THE PRESENT CASE NO ADDI TION IS CALLED FOR. WE ACCORDINGLY DELETE THE ADDITION. THUS THE ADDITION MADE BY A.O. IS DELETED. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 14 - 9- 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER IT(SS) A . NO.247/AHD/2012 ASST YEA R 2006- 07. . 7 AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) IV, BARODA 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD 1.DATE OF DICTATION 3 - 9 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 3,4,5 / 9 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER