Shri Rahul D.Shah, Ahmedabad V. The Income tax Officer,Ward-2, Anand

ITSSA 248/AHD/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8292 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2001-2002
• 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; Income from undisclosed sources; Salary income; Source of fund; Corroborative evidences
• Section: 153A; 68; 132

Judgement Text

IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 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. 248/AHD/2012 (ASST. YEAR:20 01-02) SHRI RAHUL D. SHAH, ARCHANA GROND FLOOR, STATION ROAD, BEHIND UCO BANK, VALLABH VIDYANAGAR, ANAND. (APPELLANT) VS. INCOME TAX OFFICER, WARD 2, STATION ROAD, ANAND. (RESPONDENT) PAN: AZJPS 7972B APPELLANT BY : MR. ANIL R. SHAH. RESPONDENT BY : MR.S. K. GUPTA, CIT (DR) ( )/ ORDER DATE OF HEARING : 9-7 -2 012 DATE OF PRONOUNCEMENT : 24-8-2012 PER: SHRI ANIL CHATURVEDI, A.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT (A)- IV, BARODA DATED 10-2-2012 FOR THE ASSESSMENT YEAR 2001-02. 2. THE ASSESSEE HAS RAISED GROUNDS OF APPEAL IN PAR TS (I) ON LEGALITY AND (II) ON MERITS. IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 2 3. GROUNDS MENTIONED IN PART-I I.E. ON LEGALITY ARE NOT PRESSED AND THEREFORE NOT ADJUDICATED. GROUNDS IN PART-II ARE O N MERITS AND ARE AS UNDER:- (1) IT IS SUBMITTED BY YOUR APPELLANT THAT DURING C OURSE OF ASSESSMENT PROCEEDING BEFORE ITO DURING PROCEEDINGS TO GIVE EF FECT TO THE ORDER U/S. 254 OF THE ACT AND ALSO BEFORE LD. CIT (A) HA D FILED FULL FACTS AND FIGURES AND EVIDENCE IN SUPPORT OF CLAIM THAT CONST RUCTION OF SHOP OF RS.1,14,750/- AND DEPOSIT OF RS.47,550/- WAS FULLY EXPLAINED AND WAS NOT LIABLE TO BE ADDED. IT WAS FURTHER SUBMITTED THAT RS.47,550/- WAS NOT L IABLE TO BE ADDED AS CASH CREDIT AND THAT SEC. 68/69 DOES NOT APPLY T O THE 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 AVAILABLE FOR INVESTMENT SHOP AND CASH DEPOSIT WHICH HAS BEEN UTILIZED AND THEREF ORE THE ABOVE ADDITION IS NOT LIABLE TO BE ADDED. (3) IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES INVEST MENT IN SHOP OF RS.1,14,750/- AND RS.47,550/- AS DEPOSIT IN BANK BE ING DULY EXPLAINED AND SUPPORTED BY EVIDENCE BE DELETED. 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH OPE RATION 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 CONSTRUCTED 14 SHOPS AND HAD MADE CASH DEPOSITS OF RS.47,550/- IN HIS BANK ACCOUNT. AS PER THE SUBMISSIONS MADE BEFORE THE A.O. ON 6-3- 2006 AND ON 20-11- IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 3 2007, THE ASSESSEE HAD MADE TOTAL INVESTMENT IN CON STRUCTION OF SHOPS TO THE TUNE OF RS.2,26,950/- DURING F.Y. 2000-01 TO 20 02-03. OUT OF THE SAID EXPENDITURE,RS.1,14,750/- WAS INCURRED FOR CONSTRUC TION OF SHOPS DURING F.Y.2000-01. SINCE THE ASSESSEE COULD NOT EXPLAIN T HE SOURCE OF INVESTMENT IN HOUSE PROPERTY AND CASH DEPOSITS IN B ANK ACCOUNTS, THE A.O. CONCLUDED THAT INVESTMENT IN CONSTRUCTION OF SHOPS TO THE TUNE OF RS.1,14,750/- AND CASH DEPOSITS OF RS.47,550/- IN B ANK ACCOUNTS WERE MADE OUT OF UNDISCLOSED SOURCES OF INCOME AND THERE FORE ADDITION OF RS.1,62,300/- WAS MADE. AGAINST THIS ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT (A). LD. CIT (A) VIDE ORDER DATED 4-11-2008 CONFIRMED THE ADDITION MADE BY THE A.O. ASSESSEE T HEREAFTER WENT IN APPEAL BEFORE THE HONBLE TRIBUNAL. THE HONBLE TRI BUNAL VIDE ORDER IN ITA NO.1118 & 1119/AHD/2009 DATED 3-7-2009 SET ASIDE TH E ISSUES TO THE FILE OF A.O. FOR CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE IN RESPECT OF AMOUNT CREDITED IN BANK ACCOUNT AND INVESTMENT MADE IN CONSTRUCTION OF SHOPS. 4. FOLLOWING THE DIRECTIONS OF THE HONBLE IT AT, A.O. ISSUED NOTICE U/S.142(1) CALLING FOR NECESSARY EVIDENCES ABOUT TH E SOURCES OF INVESTMENT OF RS.1,14,750/- MADE FOR CONSTRUCTION OF SHOPS AND CASH DEPOSITS OF RS.47,550/- IN THE BANK ACCOUNT. THE ASSESSEE VIDE LETTER DATED 28-10- 2010 INTERALIA SUBMITTED THAT THE EXPENSES INCURRED FOR CONSTRUCTION OF SHOPS (RS.1,14,750/-) WAS OUT OF DISCLOSED SALARY I NCOME AND RENT RECEIPTS AND THE CASH DEPOSIT IN BANK (RS.47,550/-) WAS ENTI RELY FROM ACCUMULATED CARRIED FORWARD CASH ON HAND OF EARLIER YEARS. THE SUBMISSIONS MADE BY ASSESSEE WERE NOT FOUND ACCEPTABLE BY THE A.O. AND VIDE ORDER DATED 22- IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 4 10-2010 HELD THE EXPENSES INCURRED ON CONSTRUCTION OF SHOPS AND DEPOSIT IN BANK TO BE UNEXPLAINED INCOME OF ASSESSEE. ON FU RTHER APPEAL BEFORE THE CIT (A), CIT (A) VIDE ORDER DATED 10-2-2012 AG AIN CONFIRMED THE ACTION OF THE A.O. BY HOLDING AS UNDER:- 9. THESE GROUNDS OF APPEAL AS WELL AS ENTIRE A BOVE SUBMISSION OF THE APPELLANT HAVE BEEN CONSIDERED. IT IS SUBMITTED BY THE APPELLANT THAT THE INVESTMENT OF RS.1,14,750/- AS MADE IN CON STRUCTION OF SHOPS AND CASH DEPOSIT RS.47,550/- AS MADE IN THE BANK WE RE FROM DECLARED SOURCE OF INCOME AND SAVINGS AVAILABLE WIT H HIM BY WAY OF INCOME OF THE CURRENT YEAR AND /OR PAST SAVINGS OF THE YEAR UNDER APPEAL AS WELL AS OF THE PAST YEARS BY HIM AND THE MEMBERS OF HIS FAMILY. THE APPELLANT HAS ENCLOSED A CHART SHOWING INCOME EARNED BY HIM FROM A.Y. 99-00 TO A.Y. 2003-04 WHICH SHOWS THAT BY WAY OF SMALL INCOME AND RENTAL INCOME FOR A.Y. 2001-02 HE HAD RS.1,84,320/- FREELY AVAILABLE AFTER MEETING EXPENS ES AND WITHDRAWALS OUT OF WHICH HE HAD MADE INVESTMENT IN SHOP AND CASH DEPOSITS TOTALING TO RS.1,62,300/- (1,14,750 + 47,5 50).BUT THE ENTIRE ABOVE SUBMISSION OF THE APPELLANT IS NOT SUPPORTED BY DOCUMENTARY PROOF. THE APPELLANT HAS SHOWN TO HAVE EARNED A SMA LL AMOUNT OF SALARY OF RS.77,520/- AND RENTAL INCOME OFRS.1,06,8 00/- AND TOTAL OF BOTH THESE TWO INCOME COMES TO RS.1,84,320/-.DURING THE EARLIER YEAR AND EVEN IN SUBSEQUENT YEARS THE INCOME HAS BEEN SH OWN BY THE APPELLANT ONLY FROM SALARY AND RENT. AGAIN EVEN IF IT IS CONSIDERED THAT THE APPELLANT HAS EARNED SALARY INCOME AND RENTAL I NCOME OF RS.1,84,320/- THEN ALSO IT IS NOT POSSIBLE TO MAKE INVESTMENT OF RS.1,14,750/- IN CONSTRUCTION OF SHOP AND TO DEPOSI T AN AMOUNT OF RS.47,550/- IN THE BANK OUT OF SUCH TOTAL INCOME OF RS.1,84,320/-.THE APPELLANT IS REQUIRED A REASONABLE AMOUNT TO BE INC URRED FOR HIS HOUSEHOLD EXPENSES ALSO AND SINCE THE APPELLANT HAS GOT NO OTHER SOURCES OF INCOME EXCEPT SALARY AND RENTAL INCOME, THEREFORE, IT IS NOT POSSIBLE TO MAKE ABOVE INVESTMENT OF RS.1,14,750/- IN SHOPS AND TO DEPOSIT ABOVE AMOUNT OF RS.47,550/- OUT OF SUCH SAL ARY AND RENTAL INCOME. THE APPELLANT HAS NOT FURNISHED ANY SPECIFI C DETAILS AND PROOF WITH REGARD TO HIS HOUSEHOLD EXPENSES FOR THE YEAR UNDER CONSIDERATION. THE APPELLANT HAS ALSO NOT FILED HIS CAPITAL ACCOUNT ETC. FOR THE YEAR UNDER CONSIDERATION SHOWING THAT HE HA D SUFFICIENT CASH IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 5 IN HAND TO MAKE INVESTMENT IN THE SHOPS AND TO DEPO SIT THE ABOVE AMOUNT IN THE BANK. THE APPELLANT HAS MERELY FILED A CHART SHOWING HIS RENTAL INCOME AND SALARY INCOME YEAR WISE ADDIT ION SUCH CHART IS WITHOUT ANY SUPPORTING EVIDENCES AND FROM THE SAME SOURCE OF INVESTMENT IN CONSTRUCTION OF SHOP AND ALSO SOURCE OF AMOUNT DEPOSITED IN THE BANK IS NOT PROVED. THE A.O. IN TH E ORDER PASSED U/S.143(3) READ WITH SECTION 153A AND 254 HAS MENTI ONED THAT REGARDING APPELLANTS SUBMISSION THAT FUNDS AVAILAB LE WITH OTHER FAMILY MEMBERS IS NOT ACCEPTABLE AS THE FUNDS AVAIL ABLE WITH OTHER FAMILY MEMBERS CANNOT BE MERGED WITH THE INCOME OF THE APPELLANT SINCE ALL THE FAMILY MEMBERS ARE INDEPENDENT AND AL SO THE APPELLANT HAS NOT SHOWN ANY BORROWING FROM ANY OF HIS FAMILY MEMBERS. I AGREE WITH THIS VIEW OF THE A.O. 10. CONSIDERING ALL THE ABOVE FACTS, I HOLD THAT THE A.O. HAS CORRECTLY MADE ADDITION OF RS.1,14,750/- TO THE TOT AL INCOME OF THE APPELLANT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN C ONSTRUCTION OF SHOPS OUT OF HIS UNDISCLOSED SOURCE OF INCOME. AGAI N THE A.O. HAS ALSO MADE ADDITION OF RS.47,550/- TO THE TOTAL INCO ME OF THE APPELLANT BEING CASH DEPOSITS IN THE BANK ACCOUNT OUT OF UNDI SCLOSED SOURCES OF INCOME. AT THIS PLACE IT MAY BE MENTIONED THAT T HE APPELLANT HAS RAISED AN ISSUE THAT THE DEPOSIT IN BANK DOES NOT A TTRACT PROVISIONS OF SECTION 68 OF THE I.T. ACT. IN VIEW OF ACCEPTED PRI NCIPLE OF ACCOUNTANCY AND VARIOUS JUDICIAL PRONOUNCEMENTS. IN THIS REGARD IT MAY BE MENTIONED THAT THE A.O. HAS NOT MADE ADDITIO N OF RS.47,550/- U/S.68 OF THE I.T. ACT. A.O. HAS MADE ADDITION OF R S.47,550/- TO THE TOTAL INCOME OF THE APPELLANT BEING THE SAME AS CAS H DEPOSIT IN THE BANK ACCOUNT OUT OF UNDISCLOSED SOURCES OF INCOME. IN VIEW OF THIS THE ISSUE RAISED BY THE APPELLANT IS NOT ACCEPTABLE . AGAIN THE APPELLANT HAS PLEADED THAT THE SAID ADDITION OF RS. 47,550/- IS REQUIRED TO BE DELETED ON PRINCIPLE OF TELESCOPING SINCE T HE ALLEGED ADDITION OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY AND THI S CASH CREDIT AMOUNTS TO DOUBLE ADDITION WHICH IS AGAINST THE PRI NCIPLE OF LAW AND JUSTICE. BUT IN MY OPINION, THE INVESTMENT IN CONST RUCTION OF SHOPS AND THE DEPOSIT IN THE BANK ACCOUNT ARE TWO DIFFERENT A SPECT. THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT THE INVES TMENT IN CONSTRUCTION OF SHOPS WAS MADE OUT OF ABOVE DEPOSIT OF RS.47,550/- AS DEPOSITED IN THE BANK. THE ABOVE TWO ISSUES ARE NOT FOUND TO BE RELATED WITH EACH OTHER AND BOTH THESE TWO ISSUES A RE REQUIRED TO BE IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 6 CONSIDERED SEPARATELY FOR MAKING ADDITIONS. IN VIEW OF THIS THE GROUND OF APPEAL OF THE ASSESSEE WITH REGARD TO BENEFIT OF TELESCOPING IS HEREBY DISMISSED. 5. AGAINST THE ABOVE ORDER OF CIT (A), ASSESSE E IS NOW IN APPEAL BEFORE US. 6. BEFORE US THE LD. A.R. SUBMITTED A CHART D EPICTING 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.4 LAC WHICH WAS MORE THAN SUFFICIENT TO MEET THE ADDITION S MADE BY A.O. THUS PROVING THAT THERE WAS NO CASE OF UNEXPLAINED INVES TMENTS/INCOME. THE LD. A.R. ALSO SUBMITTED AT PAGE 16B OF THE PAPER BO OK THE YEARWISE DETAILS (FROM A.Y. 1999-2000 TO 2003-04) THE AMOUNT OF INCO ME RECEIVED FROM SALARY AND RENT AND THE AMOUNT INVESTED IN CONSTRUC TION OF SHOPS. FROM, THE CHART HE POINTED OUT THAT ASSESSEE WAS HAVING S UFFICIENT INCOME. HE ALSO RELIED ON THE DECISION OF AHMEDABAD TRIBUNAL I N THE CASE OF RAJUBEN PATEL VS. ACIT (ITA NO.2375/AHD/2009) AND PLACED ON RECORD THE COPY OF THE SAME. HE THUS URGED THAT THE ADDITION MADE BY A .O. BE DELETED. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE ORDER OF CIT (A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND P ERUSED THE MATERIAL; ON RECORD. FROM THE DETAILS FURNISHED IN THE PAPER BOO K AND PLACED ON RECORD IT IS REVEALED THAT THE ASSESSEE AT THE BEGINNING OF A .Y. 2000-01 WAS HAVING SURPLUS IN HAND TO THE TUNE OF RS.2.41 LACS WHICH C OVERS THE ADDITION OF RS.1.63 LACS MADE BY THE A.O. THE ASSESSEE HAS BEEN IN RECEIPT OF SALARY AND RENTAL INCOME IN THE PAST. THE ASSESSEE HAS SUB MITTED THE COPIES OF IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 7 DECLARATION GIVEN BY THE TENANTS EVIDENCING THE PAY MENT OF RENT. THE INCOME OF THE ASSESSEE FOR A.Y. 2001-02 FROM SALARY IS RS.77,520/- AND RENT IS RS.1,06,800/- AGGREGATING TO RS.1,84,320/-. THE REVENUE HAS NOT BEEN IN A POSITION TO CONTROVERT THE AFORESAID FACT S. IN THE CASE OF RAJUBEN PATEL VS. ACIT (SUPRA) THE CO-ORDINATE BENCH OF TRI BUNAL AFTER TAKING INTO CONSIDERATION THE INCOME EARNED BY THE ASSESSEE IN PAST HELD THAT THE ASSESSEE IN THAT CASE HAD SUFFICIENT INCOME TO PURC HASE JEWELLERY. CONSIDERING THE TOTALITY OF FACTS AND RELYING ON TH E DECISION OF CO-ORDINATE BENCH AND IN VIEW OF THE FACT THAT THE AMOUNT AVAIL ABLE WITH ASSESSEE WAS MORE THAN THE ADDITION MADE BY A.O., WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE BY A.O. ON ACCOUNT OF UNEXPLAINED INVES TMENTS AND CASH DEPOSITS. THUS THE ADDITION MADE BY A.O IS DELETED. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 24 8 - 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. IT(SS)A NO.248/AHD/2012 ASST YEA R 2001- 02. . 8 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) XX, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD 1.DATE OF DICTATION 9 - 7 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 2,3,7,8,24 / 8 / 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