ITO-2(4), Agra v. Sh. Jeewat Ram Vaswani, Agra

ITA 23/AGR/2010 | 2005-2006
Pronouncement Date: 24-02-2012 | Result: Dismissed

Appeal Details

RSA Number 2320314 RSA 2010
Assessee PAN AAATJ5219J
Bench Agra
Appeal Number ITA 23/AGR/2010
Duration Of Justice 2 year(s) 15 day(s)
Appellant ITO-2(4), Agra
Respondent Sh. Jeewat Ram Vaswani, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 24-02-2012
Date Of Final Hearing 22-02-2012
Next Hearing Date 22-02-2012
Assessment Year 2005-2006
Appeal Filed On 08-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI A.L. GEHLOT ACCOUNTANT MEMBER ITA NO.23/AGR/2010 ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER 2(4) VS. SHRI JEEWAT RAM VASW ANI TRUSTEE AGRA. M/S. JEEVAT RAM FAMILY TRUST-II 42/158 BILLOCHPURA AGRA. (PAN: AAATJ 5219 J). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD SR. D.R. RESPONDENT BY : SHRI ANURAG SINHA ADVOCATE DATE OF HEARING : 22.02.2012 DATE OF PRONOUNCEMENT : 24.02.2012 ORDER PER A.L. GEHLOT A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 30.10.2009 PASSED BY THE CIT(A)-I AGRA FOR THE ASS ESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS:- 1. THAT THE CIT(A)-1 AGRA HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF ` 27 16 050/- MADE U/S 69 OF THE INCOME TAX ACT 1961 ON ACCOUNT OF INVESTMENT IN PR OPERTY WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE NATURE AND SOURCE OF THE INVESTMENT OF ` 27 16 050/-. ITA NOS.23/AGR/2010 A.Y. 2005-06 2 2. THAT THE LD. CIT(A)-1 AGRA HAS ERRED IN LAW AND FACTS IN HOLDING THAT THE A.O. IS NOT CORRECT TO APPLY PROVI SIONS OF SECTION 164 RATHER THAN 161 WITHOUT APPRECIATING THE FACT THAT ORIGINAL TRUST DEED WAS NEITHER PRODUCED BY THE ASSESSEE IN ASSESSMENT PROCEEDINGS NOR FILED WITHOUT THE RETURN OF INCOME. 3. THAT THE ORDER OF THE CIT(A)-1 AGRA IS ERRONEOU S IN LAW AND ON THE FACTS OF THE CASE AND THAT THE ORDER OF THE A.O . BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY AND GROUND DURING APPEAL PROCEEDINGS. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE CASE OF THE ASSESSEE TRUST WAS REOPENED ON THE GROUND THAT A PROPERTY NO.A-66 JAI PUR HOUSE AGRA WAS PURCHASED DURING THE YEAR BUT THE ASSESSEE DID NOT SHOW THE INVESTMENT OF THE AFORESAID PROPERTY IN THE RETURN FILED. THE PROPER TY WAS STATED TO BE PURCHASED FOR ` 27 16 050/-. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE THAT THE PROPERTY WAS PURCHASED BY M/S. JEEVAT RAM FAMIL Y TRUSTII THROUGH SHRI JEEVAT RAM VASWANI TRUSTEE. AS REGARDS THE SOURCE OF JEEVAT RAM FAMILY TRUST AND JEEVAT RAM FAMILY TRUST-II SOME OF THE BENEFIC IARIES IN BOTH THE TRUSTS ARE COMMON. JEEVAT RAM FAMILY TRUST CAME INTO EXISTENC E IN THE FINANCIAL YEAR 1998-99 AND SINCE THEN IT HAS BEEN REGULARLY FILING ITS RETURN OF INCOME. THE CAPITAL BALANCE IN THIS ACCOUNT INCLUDING INCOME EA RNED BY THE TRUST AND GIFT RECEIPTS WAS ` 47 88 490/- AS ON 31.03.2000. OUT OF THE SAID CAPI TAL AN INVESTMENT OF ` 23 51 950/- WAS MADE IN FIXED DEPOSITS. THESE FIXE D DEPOSITS WERE HANDED ITA NOS.23/AGR/2010 A.Y. 2005-06 3 OVER TO JEEVAT RAM FAMILY TRUST-II ON 31.03.2001 ON WHICH DATE ITS MATURITY VALUE INCLUDING INTEREST WAS ` 26 14 403/-. THE FIXED DEPOSIT RECEIPT ALONGWITH C ASH OF ` 10 597/- I.E. ` 26 25 000/- WAS TRANSFERRED TO JEEVAT RAM FAMILY TR UST-II ON 31.03.2001. THIS WAS ACCOUNTED FOR IN THE BOOKS OF JEEVAT RAM FAMILY TRUST-II. THIS F.D.R. WAS MATURED ON 14.08.2002 FOR ` 30 24 361/-. M/S. JEEVAT RAM FAMILY TRUST GOT 6 F.D.RS. OF ` 5 LACS EACH PREPARED IN THE NAMES OF 5 BENEFICIARIES OF SECOND TRUST. FOR THE BALANCE AMO UNT OF ` 24 361/- A CHEQUE WAS ISSUED. THUS TOTAL AMOUNT RECEIVED ON MATURITY OF FIXED DEPOSIT WAS ` 30 24 361/. THE INTEREST INCOME EARNED ON FIXED DEPOSITS WERE R EGULARLY SHOWN AS INCOME IN THE HANDS OF THE SECOND TRUST. THE TOTAL MATURITY VALUE OF THESE F.D.RS. AS ON 31.03.2004 WAS ` 33 86 850/-. AGAINST THESE FIXED DEPOSITS THE ASS ESSEE TOOK OVERDRAFT FACILITY OF ` 25 40 000/- FROM CANARA BANK IN THE NAMES OF 5 BENEFICIARIES. THE OVERDRAFT WAS DEPOSITED IN 5 NE W ACCOUNTS OPENED IN THE NAMES OF BENEFICIARIES WITH CANARA BANK. SUBSEQUENTLY A NOTHER ACCOUNT WAS OPENED IN JOINT NAME OF SHRI JEEVAT RAM VASWANI AND USHA VASW ANI JOINT TRUSTEE OF THE TRUST. THE BALANCE IN THE ACCOUNT OF BENEFICIARIES WAS TRANSFERRED TO THIS JOINT ACCOUNT. THE TRUSTEE PURCHASED A PROPERTY BY MAKIN G PAYMENT OF ` 22 00 000/- OUT OF BANK ACCOUNT AND ` 5 16 050/- IN CASH WHICH WAS AVAILABLE IN THE BOOKS OF THE TRUST. THE TOTAL PURCHASE CONSIDERATION WAS ` 27 16 050/-. THE ASSESSEE FURNISHED PHOTOCOPY OF THE BANK PASS BOOK BEFORE TH E ASSESSING OFFICER. THE ITA NOS.23/AGR/2010 A.Y. 2005-06 4 ASSESSING OFFICER EXAMINED THE PARTIES BY ISSUING S UMMONS UNDER SECTION 131 OF THE INCOME TAX ACT 1961. THE ASSESSING OFFICER AL SO CALLED INFORMATION FROM CANARA BANK. THE ASSESSING OFFICER HELD THAT THE G ENUINENESS OF THE TRUST AS A PRIVATE FAMILY SPECIFIC TRUST IS NOT ESTABLISHED. THE ASSESSING OFFICER TREATED THE ASSESSEE TRUST M/S. JEEVAT RAM FAMILY TRUST-II AS A DISCRETIONARY TRUST IN VIEW THAT THE BENEFICIARIES OF THIS TRUST ARE ALSO BENEFICIAR IES IN M/S. JEEVAT RAM FAMILY TRUST. THEREFORE THE ASSESSEES CLAIM THAT THE TR UST HAS COME UNDER SECTION 161 OF THE ACT IS NOT CORRECT. IT IS COVERED UNDER SECTIO N 164 OF THE ACT AND ACCORDINGLY INCOME OF THE TRUST IS CHARGEABLE AT THE MAXIMUM MA RGINAL RATE. THE ASSESSING OFFICER ALSO MADE ADDITION OF ` 27 16 050/- ON THE GROUND THAT THE ASSESSEE FAILED TO PROVE NATURE AND SOURCE OF THE INVESTMENT. THE ASSESSING OFFICER MADE THE ADDITION UNDER SECTION 69 OF THE ACT. THE ASSESSIN G OFFICER DID NOT ALLOW APPROPRIATION OF INTEREST INCOME FROM BANK AT ` 2 62 407/- ON THE GROUND THAT THE SAME CANNOT BE APPROPRIATED AS PER THE PROVISIONS O F SECTION 164 OF THE ACT. THE CIT(A) DELETED THE ADDITION AS UNDER :- (3.3) I HAVE CONSIDERED THE RELEVANT FACTS AND PE RUSED THE RECORDS AND FIND THAT - - THE BENEFICIARIES ACQUIRED FIXED DEPOSITS OF ` 5 00 000/- EACH IN CANARA BANK LOHAMANDI AGRA ON 14.08.2002 OUT O F DEPOSIT OF ` 30 24 361/-. ITA NOS.23/AGR/2010 A.Y. 2005-06 5 - THE BENEFICIARIES TOOK LOANS AGAINST THE SAID FDR S AS EXPRESSLY CONFIRMED BY THE CANARA BANK THE DETAILS OF WHICH ARE SUMMARIZED AS UNDER :- AS ON FD AMOUNT A/C. NO. LOAN AMOUNT HOLDER TRANSF ER TO TRUST A/C. NO.92568 14.08.02 500000 92571 508000 KAPIL 500000 14.08.02 500000 92572 508000 SANJAY 500000 14.08.02 500000 + 500000 92570 1016000 SMT. USHA & JEEVAT RAM 700000 14.08.02 500000 92573 508000 PANKAJ 500000 OUT OF THE SAID ACCOUNT NO.92568 OF THE TRUST THE FOLLOWING CHEQUES WERE ISSUED FOR PURCHASE OF THE PROPERTY :- 71545 4 00 000 71544 4 50 000 71543 4 50 000 71542 4 50 000 71541 4 50 000 22 00 000 REMAINING EXPENSES OF ` 5 16 050/- (27 16 050 (-) 22 00 000) ARE STATED TO HAVE BEEN MET OUT OF CASH BALANCE WIT H THE TRUST WHICH HAS NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER WITH ANY EVIDENCE TO THE CONTRARY. IN VIEW OF THE ABOVE FACTS THE INVESTMENT IN THE P ROPERTY TREATED AS UNEXPLAINED AND HENCE THE APPELLANTS IN COME IN TERMS OF SECTION 69 OF THE ACT IS NOT TENABLE. CONSEQUENTLY THE ADDITION OF ` 27 16 050/- IS NOT SUSTAINABLE AND HENCE DELETED. 3. AS REGARDS THE ISSUE OF APPLICATION OF PROVISION S OF SECTION 164 OR SECTION 161 OF THE ACT THE CIT(A) DECIDED THE ISSUE AS UND ER :- ITA NOS.23/AGR/2010 A.Y. 2005-06 6 I HAVE CONSIDERED THE RIVAL CONTENTIONS. IT IS SE EN THAT THE ASSESSING OFFICER HAS APPLIED THE PROVISIONS OF SEC TION 164 RATHER THAN SECTION 161 OF THE ACT ON THE GROUNDS THAT THE VERACITY OF THE TRUST DEED WAS ITSELF IN DOUBT AS THE ORIGINAL DEED IS NE ITHER AVAILABLE ON RECORD NOR PRODUCED FOR PERUSAL. HENCE THE ASSESS ING OFFICER IS DIRECTED TO CALL FOR THE ORIGINAL TRUST DEED AND AF TER DUE VERIFICATION TAX EACH INDIVIDUAL BENEFICIARY BY ADOPTING HIS 1/8 TH SHARE OF INCOME FROM THIS TRUST ADDING THERETO HIS 1/7 TH SHARE OF INCOME FROM JEEVAT RAM FAMILY TRUST AS PER SECTION 161 OF THE ACT AND ANY/ALL OTHER INCOME/INCOMES FROM ANY OTHER SOURCE AS THERE MAY B E AS PER SECTION 4 & 5 OF THE ACT. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. AS REGARDS THE ADDITION OF ` 27 16 050/- WE NOTICE THAT THE CIT(A) AFTER VERIFY ING THE FACT THAT THE AMOUNT OF ` 22 00 000/- WAS INVESTED OUT OF THE LOAN AMOUNT TAK EN AGAINST THE FIXED DEPOSIT THE CIT(A) GAVE FULL DET AILS OF THE LOAN ACCOUNT IN HIS ORDER AS REPRODUCED ABOVE. THE PAYMENT OF ` 22 00 000/- WAS MADE BY CHEQUES AND REMAINING AMOUNT OF ` 5 16 050/- WAS MADE OUT OF CASH BALANCE WITH TRUST. THE REVENUE FAILED TO POINT OUT ANY CONTRARY FACT A S NOTED BY THE CIT(A) NOR THE SAME IS AVAILABLE ON RECORD. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). THIS ISSUE IS CONFIRMED. 5. AS REGARDS THE APPLICABILITY OF SECTION 161 OR S ECTION 164 OF THE ACT WE NOTICE THAT THE CIT(A) HAS DIRECTED THE ASSESSING O FFICER TO CALL FOR THE ORIGINAL TRUST DEED AND AFTER DUE VERIFICATION THE ISSUE IS TO BE DECIDED ACCORDINGLY. WE DO NOT FIND ANY INFIRMITY IN THE DIRECTION OF THE CIT( A). THE REVENUE HAS FAILED TO ITA NOS.23/AGR/2010 A.Y. 2005-06 7 POINT OUT THE GRIEVANCE AGAINST THE SAID DIRECTION OF THE CIT(A). IN ABSENCE OF SUCH MATERIAL WE CONFIRM THE ORDER OF THE CIT(A) ON THI S ISSUE ALSO. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 24 TH FEBRUARY 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R. ITAT AGRA BENCH AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY