Smt. Geeta Devi, Bhopal V. The ACIT, 1(2), Bhopal

ITSSA 25/IND/2012

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7442 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 27-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: ASHISH GOYAL S; H P VERMA SHRI GIRISH AGARWAL
• Keywords: Unexplained investment; Gift; Opportunity of being heard; Block assessment; Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AARPD9910D I.T .(SS) .A.NO. 24 /IND/201 2 A.Y. : 1.4.1985 TO 28.2.1996 SHRI KUMAR DHIRENDRA, ACIT, HIG - 18, OLD SUBHAS H VS 2(1), NAGAR, BHOPAL BHOPAL. APPELLANT RESPONDENT PAN NO. : AEQPD1623R I.T.(SS).A.NO. 25/IND/2012 A.Y. : 1.4.1985 TO 28.2.1996 SMT.GEETA DEVI, ACIT, HIG - 18, OLD SUBHASH VS 2(1), NAGAR, BHOPAL BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI H.P.VERMA, SHRI GIRISH AGARWAL AND SHRI ASHISH GOYAL, ADVOCATES RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 12.04.2012 DATE OF PRONOUNCEMENT : 30 . 0 5 .201 2 -: 2: - 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEES AGAINS T SEPARATE ORDERS OF CIT(A)-2(1), BHOPAL, BOTH DATED 19.12.2011, FOR THE BLOCK PERIOD 1.4.1985 TO 28.02.1996. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN IN I.T.(SS).A.NOS . 24/IND/2012 :- 1. THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ASSESSMENT ORDER WHICH IS CONTRARY TO THE MATERIAL ON RECORDS AND PROVISIONS OF THE ACT, UNJUST AND BAD I N LAW. 2. THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ASSESSMENT ORDER WHICH IS CONTRARY TO THE DIRECTION S GIVEN BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH IN ITS ORDER DATED 07/02/2011 WHILE SETTING ASIDE THE ERSTWHILE ASSESSMENT ORDER WHEREB Y MENTIONING TO CONSIDER ELABORATELY THE SUBMISSION O F THE ASSESSEE WITH RESPECT TO THE ADDITIONS MADE IN THE VARIOUS YEARS AND AFTER CONSIDERING THE SAME, FRAME AN -: 3: - 3 ASSESSMENT DE NOVO. 3. THE LEARNED ASSESSING OFFICER ERRED IN ASSESSING AS IT IS, CONTRARY TO DE NOVO ASSESSMENT, BY REFERRING TO THE UNDISCLOSED INCOME OF RS. 9,31,410 AS DETERMINED BY THE ERSTWHILE ASSESSING OFFICERS IN THEIR ORDER DAT ED 30/03/1999 AND SUBSEQUENT SET ASIDE ASSESSMENT ORDER DATED 31/03/2006 WHICH IN FACT WERE SET ASIDE BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, INDOR E BENCH VIDE ITS ORDERS DATED 26/04/2004 AND 07/02/2011, RESPECTIVELY. 4. THE LEARNED ASSESSING OFFICER ERRED IN MAKING AN ADDITION OF RS. 9,31,410 HOLDING IT TO BE UNDISCLOS ED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD 01/04/1985 TO 28/02/1996. 5. THE LEARNED ASSESSING OFFICER ERRED IN MAKING AN ADDITION OF RS. 9,31,410 AS UNDISCLOSED INCOME WITHOUT PASSING A SPEAKING ORDER AND ELABORATELY DEALING WITH EACH ITEM OF ADDITION EITHER BY RAISIN G QUERIES AS WELL AS CONSIDERING AND /OR REBUTTING TH E -: 4: - 4 SUBMISSIONS MADE BY THE ASSESSEE ON EACH ITEM OF ADDITION FOR EACH ASSESSMENT YEAR COMPRISED IN THE BLOCK PERIOD 01/04/1985 TO 28/02/1996. 6. THE LD. ASSESSING OFFICER ERRED INITIATING PENALTY U/S 158BFA(2) OF THE ACT. 3. FOLLOWING GROUNDS HAVE BEEN TAKEN IN I.T.(SS).A.NOS . 25/IND/2012 :- 2. THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ASSESSMENT ORDER WHICH IS CONTRARY TO THE MATERIAL ON RECORDS AND PROVISIONS OF THE ACT, UNJUST AND BAD I N LAW. 3. THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ASSESSMENT ORDER WHICH IS CONTRARY TO THE DIRECTION S GIVEN BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH IN ITS ORDER DATED 07/02/2011 WHILE SETTING ASIDE THE ERSTWHILE ASSESSMENT ORDER WHEREB Y MENTIONING TO CONSIDER ELABORATELY THE SUBMISSION O F THE ASSESSEE WITH RESPECT TO THE ADDITIONS MADE IN THE VARIOUS YEARS AND AFTER CONSIDERING THE SAME, FRAME AN -: 5: - 5 ASSESSMENT DE NOVO. 4. THE LEARNED ASSESSING OFFICER ERRED IN ASSESSING AS IT IS, CONTRARY TO DE NOVO ASSESSMENT, BY REFERRING TO THE UNDISCLOSED INCOME OF RS. 7,36,540/- AS DETERMINED BY THE ERSTWHILE ASSESSING OFFICERS IN THEIR ORDER DATED 31/03/20061999 AND SUBSEQUENT SET ASIDE ASSESSMENT ORDER DATED 31/03/2006 WHICH IN FACT WERE SET ASIDE BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH VIDE ITS ORDERS DATED 26/04/2004 AND 07/02/2011, RESPECTIVELY. 5. THE LEARNED ASSESSING OFFICER ERRED IN MAKING AN ADDITION OF RS. 9,31,410 HOLDING IT TO BE UNDISCLOS ED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD 01/04/1985 TO 28/02/1996. 7. THE LEARNED ASSESSING OFFICER ERRED IN MAKING AN ADDITION OF RS. 7,36,540/- AS UNDISCLOSED INCOME WITHOUT PASSING A SPEAKING ORDER AND ELABORATELY DEALING WITH EACH ITEM OF ADDITION EITHER BY RAISI NG QUERIES AS WELL AS CONSIDERING AND/OR REBUTTING THE -: 6: - 6 SUBMISSIONS MADE BY THE ASSESSEE ON EACH ITEM OF ADDITION FOR EACH ASSESSMENT YEAR COMPRISED IN THE BLOCK PERIOD 01/04/1985 TO 28/02/1996. 8. THE LD. ASSESSING OFFICER ERRED INITIATING PENALTY U/S 158BFA(2) OF THE ACT. I.T(SS).A.NO. 25/IND/2012 : 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. BRIEF FACTS OF THE CASE ARE THAT BLOCK ASS ESSMENT ORDER U/S 158BD/143(3) DATED 30.03.1999 WAS PASSED BY ACIT, CIRCLE-2, BHOPAL, DETERMINING TOTAL UNDISCLOS ED INCOME OF RS. 7,36,540/-. THE LD. I.T.A.T., INDORE BENCH, INDORE, VIDE PARA-4 OF THE APPELLATE ORDER DATED 26.04.2004 IN A PPEAL I.T.A.NO. 10/IND/1999, SET-ASIDE THE BLOCK ASSESSME NT ORDER AND DIRECTED THE ASSESSING OFFICER TO AFFORD ADEQUA TE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND MAKE THE ASSESSMENT AFRESH. IN THE SET-ASIDE PROCEEDINGS, TH E ASSESSEE MADE WRITTEN SUBMISSION AND FURNISHED THE SAME ON 14.10.2011 WHICH IS AVAILABLE ON RECORD. ON PERUSAL OF THE SAME, THE ASSESSING OFFICER STATED THAT THE ASSESSE E HAS ALMOST REITERATED HIS EARLIER SUBMISSIONS MADE DURI NG THE -: 7: - 7 ORIGINAL BLOCK ASSESSMENT PROCEEDINGS. THUS, THE AS SESSING OFFICER HAS REPEATED ALL THE ADDITIONS BY MENTIONIN G THAT NO FRESH EVIDENCE WAS FURNISHED DURING THE SET-ASIDE P ROCEEDINGS BY THE ASSESSEE. FROM THE RECORD, WE FOUND THAT THE ASSESSEE HAS CLAIMED INCOME FROM TAILORING FROM YEAR TO YEAR , BUT THE ASSESSING OFFICER REJECTED THIS SUBMISSION AS NO PR OOF WAS PRODUCED IN SUPPORT OF IT. IT WAS ARGUED BY LD. AUT HORIZED REPRESENTATIVE THAT SINCE INCOME OF ASSESSEE WAS B ELOW TAXABLE LIMIT, THEREFORE, NO RETURN WAS FILED. HE P LEADED THAT IN VIEW OF THE DECISION OF M.P. HIGH COURT IN THE CASE OF SURENDRA KUMAR LAHOTI, 16 ITJ 572, THE INCOME BELOW TAXABLE LIMIT MAY NOT BE TREATED AS UNDISCLOSED INCOME. RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT, WE DIREC T THE ASSESSING OFFICER TO EXCLUDE THE INCOME BELOW TAXAB LE LIMIT FOR ASSESSMENT YEARS OUT OF TOTAL UNDISCLOSED INCOME, P ROVIDED INCOME ASSESSED BY ASSESSING OFFICER IN THE RESPECT IVE YEAR IS BELOW TAXABLE LIMIT. WE DIRECT ACCORDINGLY. IN THE ASSESSMENT YEAR 1988-89, AN ADDITION OF RS. 2,60,281/- WAS MAD E. AS THE AMOUNT DEPOSITED IN THE BANK COULD NOT BE EXPLAINED BY THE ASSESSEE, THE ADDITION WAS MADE BY THE ASSESSING OF FICER -: 8: - 8 ALONGWITH ADDITION ON ACCOUNT OF DIFFERENCE IN VALU E OF CAR OF RS. 95,000/- AND UNDISCLOSED INTEREST OF RS. 981/-. EVEN BEFORE THE BENCH, THE ASSESSEE COULD NOT EXPLAIN TH E SOURCE OF DEPOSIT. ACCORDINGLY, WE CONFIRM THE ADDITION MADE BY ASSESSING OFFICER IN THE ASSESSMENT YEAR 1988-89. 5. IN THE ASSESSMENT YEAR 1989-90, ADDITION OF RS. 12,902/- WAS MADE OUT OF WHICH RS. 12,000/- WAS FRE SH DEPOSITED IN THE BANK ACCOUNT. IN VIEW OF THE INCOM E ASSESSED IN ASSESSMENT YEAR 1988-89, AS PER CONSIDERED VIEW, THE ASSESSEE WAS HAVING SUFFICIENT CASH FOR DEPOSIT IN THE BANK ACCOUNT. ACCORDINGLY, THE ADDITION MADE BY THE ASSE SSING OFFICER IS NOT SUSTAINABLE. 6. IN THE ASSESSMENT YEAR 1990-91, AN ADDITION OF RS. 27,512/- WAS MADE FOR DEPOSIT IN THE BANK ACCOUNT. 7. SIMILAR ADDITION WAS MADE IN THE ASSESSMENT YEAR 1991-92 AND 1992-93 AMOUNTING TO RS. 37,000/- AND R S. 22,500/- ON ACCOUNT OF DEPOSIT IN THE BANK. IN VIEW OF THE ASSESSEE HAVING CASH OUT OF INCOME ASSESSED FOR THE ASSESSMENT YEAR 1988-89, THERE IS NO JUSTIFICATION FOR ADDITIONS ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT IN -: 9: - 9 THE ASSESSMENT YEAR 1990-91, 1991-92 AND 1992-93. W E DIRECT ACCORDINGLY. 8. IN THE ASSESSMENT YEAR 1993-94, THE TOTAL ADDITION OF RS. 31,291/- WAS MADE. ON ACCOUNT OF DEPOSIT IN THE BANK RS. 9000/- AND PAYMENT OF RS. 30000/- TOWARDS PURCH ASE OF HOUSE. THIS ADDITION IS COVERED BY THE INCOME OF RS . 27,218/- DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME F ILED FOR THE BLOCK PERIOD. BALANCE OF RS. 12,000/- IS AVAILABLE WITH THE ASSESSEE OUT OF EARLIER YEARS INCOME, WHICH WAS AL READY ASSESSED IN THE ASSESSMENT YEAR 1988-89. 9. ADDITION MADE IN THE ASSESSMENT YEAR 1994-95 AND 1995-96 AMOUNTING TO RS. 25,000/- AND RS. 1642/- RESPECTIVELY WAS NOT EXPLAINED BY ASSESSEE, THEREFO RE, THE ASSESSING OFFICER WAS JUSTIFIED IN ADDING THE SAME. 10. AN ADDITION OF RS. 70,580/- WAS MADE IN THE ASSESSMENT YEAR 1996-97. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS AMOUNTING TO RS. 62,18 0/- AND UNACCOUNTED RENTAL INCOME OF RS. 8400/-. AS THE ASS ESSEE COULD NOT EXPLAIN THE SOURCE OF ACQUISITION OF GOLD ORNAMENTS, THE ASSESSING OFFICER HAS CORRECTLY MADE ADDITION. SIMILARLY, -: 10: - 10 UNACCOUNTED RENTAL INCOME OF RS. 8400/-, WHICH HAS NOT BEEN OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME FIL ED IN FORM NO.2-B, THEREFORE, THE ASSESSING OFFICER WAS JUSTIF IED IN MAKING THIS ADDITION. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. I.T.(SS).A.NO. 24/IND/2012 : 12. AS DISCUSSED IN THE CASE OF SMT. GEETA DEVI, THE ADDITIONS WERE MADE IN THE HANDS OF SHRI KUMAR DHIE NDERA IN THE SET ASIDE PROCEEDINGS, ON THE PLEA THAT NO FRES H EVIDENCE WAS FURNISHED DURING THE SET-ASIDE ASSESSMENT PROCE EDINGS. 13. AS ALREADY DISCUSSED IN THE CASE OF SMT. GEETA DEVI IN TERMS OF DECISION OF JURISDICTIONAL HIGH COURT IN T HE CASE OF SURENDRA KUMAR LAHOTI (SUPRA), WHERE THE INCOME IS BELOW TAXABLE LIMIT AND THE ASSESSED INCOME IN THAT YEAR IS BELOW TAXABLE, THE SAME MAY NOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THERE IS ALSO NO DISPUTE TO THE PROPO SITION THAT WHERE IN BLOCK ASSESSMENT, INCOME OF SOME OF THE YE ARS ARE BELOW BASIC EXEMPTION LIMIT, RETURN FILED AFTER THE SEARCH, THE EXEMPTION AVAILABLE TO THE ASSESSEE U/S 80L IN RESP ECT OF -: 11: - 11 INTEREST INCOME CANNOT BE DECLINED. WE, ACCORDINGLY , DIRECT THE ASSESSING OFFICER TO GIVE BENEFIT OF EXEMPTION U/S 80L IN THE ASSESSMENT YEAR 1988-89 AND 1989-90 IN RESPECT OF I NTEREST INCOME FROM BANK. 14. AN ADDITION OF RS. 2,77,000/- WAS MADE IN THE ASSESSMENT YEAR 1990-91 IN RESPECT OF PURCHASE OF T ANKER. FROM THE RECORD, WE FOUND THAT THE ASSESSEE HAD TAK EN THE TANKER BY EXECUTING HIRE PURCHASE AGREEMENT WITH BE TALA FINANCE AND THE CHEQUE OF RS. 2 LAKHS DATED 31.3.19 90 WAS ALSO GIVEN FAVOURING SANGHI BROTHERS, DEALER OF THE TANKER. THIS CHEQUE WAS BOUNCED AND ANOTHER CHEQUE WAS ISSU ED BY THE ASSESSEE ON 10.4.1990. WE ALSO FOUND THAT LOAN OF RS. 20,000/- WAS TAKEN FROM LALMANI PANDEY AND A CONFIR MATION WAS ALLEGED TO BE FILED. HOWEVER, THE ASSESSING OFF ICER ALSO DID NOT ACCEPT THE SAME. IT APPEARS THAT THE ASSESSING OFFICER HAS NOT PROPERLY EVALUATED THE DOCUMENTS FILED TO EXPLA IN THE SOURCE OF INVESTMENT IN TANKER. IN THE INTEREST OF JUSTICE, WE RESTORE THIS GROUND BACK TO THE FILE OF THE ASSESSI NG OFFICER FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. IN CASE LOAN IS FOUND TO BE GENUINELY TAKEN, NO DISALL OWANCE OF -: 12: - 12 INTEREST ON SUCH LOAN IS WARRANTED AS THE TANKER WA S USED IN ASSESSEES BUSINESS. 15. IN THE ASSESSMENT YEAR 1991-92, THE ADDITION WAS MADE ON ACCOUNT OF TANKER BODY BUILDING BY THE ASSE SSEE, WHICH WAS EXPLAINED THROUGH GIFT OF RS. 15,000/- AN D LOAN FROM FATHER OF RS.45,000/-. IN TERMS OF OUR OBSERVA TIONS IN THE ASSESSMENT YEAR 1990-91, THE MATTER IS RESTORED BAC K TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH. 16. IN THE ASSESSMENT YEAR 1992-93, THE ASSESSING OFFIC ER HAS DISALLOWED THE INTEREST PAYMENT TO BETALA FINAN CE AT RS. 19,000/-. AS PER OUR DISCUSSION, IN THE ASSESSMENT YEAR 1990- 91, WE RESTORE THE MATTER BACK TO THE FILE OF THE A SSESSING OFFICER FOR DECIDING AFTER VERIFYING THE GENUINENES S OF LOAN TAKEN FROM BETALA FINANCE. 17. IN ASSESSMENT YEAR 1993-94, ADDITION WAS MADE ON ACCOUNT OF LOAN TAKEN FROM PRADEEP KUMAR AT RS. 45, 000/-. IT WAS CONTENDED BY LD. AUTHORIZED REPRESENTATIVE THA T LOAN WAS GIVEN BY DRAFT NO. 0329587 DATED 15.5.1992 DRAWN ON CANARA BANK, BHOPAL. SHRI PRADEEP KUMAR WAS UNCLE OF THE A SSESSEE AND HIS CONFIRMATION WAS ALSO FILED BEFORE THE ASSE SSING -: 13: - 13 OFFICER. ADDITION WAS ALSO MADE ON ACCOUNT OF LOAN FROM LALMANI PANDEY AT RS. 15,000/-, CONFIRMATION OF WHI CH WAS ALSO PLACED ON RECORD. IN VIEW OF THE CONFIRMATION SO FILED AND THE RELATIONSHIP OF LOANEE WITH THE ASSESSEE, WE DO NOT FIND ANY MERIT IN THE ADDITION SO MADE. 18. WITH RESPECT TO THE ADDITION MADE IN THE ASSESSMENT YEAR 1994-95, ASSESSEE COULD NOT SUBSTANTIATE ITS C LAIM OF LOAN TAKEN FROM NIRMAL KUMAR AT RS. 15,000/- AND GIFT OF RS. 60,000/- RECEIVED ON MARRIAGE. ACCORDINGLY, WE CONF IRM THE ADDITION MADE BY THE ASSESSING OFFICER. 19. IN THE ASSESSMENT YEAR 1995-96, THE ADDITION WAS MADE ON ACCOUNT OF AMOUNT DEPOSITED IN THE BANK AT RS. 1,99,400/- ON 7.12.1994. CONTENTION OF LD. AUTHORIZ ED REPRESENTATIVE WAS THAT IT WAS THE SALE PROCEEDS OF THE TANKER. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN ANY SP ECIFIC FINDINGS FOR SUCH ADDITION. ACCORDINGLY, WE RESTORE THIS GROUND ALSO BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING THE RELEVANT EVIDENCE FILED BY TH E ASSESSEE FOR SALE OF TANKER, THE PROCEEDS OF WHICH WAS CONTENDED TO BE DEPOSITED IN THE BANK ACCOUNT. WE DIRECT ACCORDINGL Y. -: 14: - 14 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART IN TERMS INDICATED HEREIN ABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH MAY , 2012. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH MAY, 2012. CPU* 20.4/29.5/ 30.5