ITO, Bangalore v. Smt. Uma Puruashotham, Bangalore

ITA 270/BANG/2010 | 2005-2006
Pronouncement Date: 13-01-2011 | Result: Allowed

Appeal Details

RSA Number 27021114 RSA 2010
Bench Bangalore
Appeal Number ITA 270/BANG/2010
Duration Of Justice 10 month(s) 8 day(s)
Appellant ITO, Bangalore
Respondent Smt. Uma Puruashotham, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 13-01-2011
Date Of Final Hearing 11-01-2011
Next Hearing Date 11-01-2011
Assessment Year 2005-2006
Appeal Filed On 05-03-2010
Judgment Text
PAGE 1 OF 6 ITA NO.270/BANG/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE K. J.M. AND SHRI A MOHAN ALANKAMONY A.M. ITA NO. 270/BANG/2010 (ASST. YEAR 200 5 - 0 6 ) THE INCOME TAX OFFICER WARD - 1( 2 ) BANGALORE. - APPELLANT VS SMT. UMA PURUSHOTHA M NO.33 ANNASWAMY MUDALIAR ROAD BANGALORE - 42. - RESPONDENT APPELLANT BY : SMT. JACINTA ZIMIK VASHAI ADDL. CIT RESPONDENT BY : SHRI BALRAM R RAO ADVOCATE O R D E R PER GEORGE GEORGE K : THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTE D AGAINST THE CIT(A) - I 'S ORDER DATED 4 . 12 .2009. THE RELEVANT ASSESSMENT YEAR IS 200 5 - 0 6 . 2. THE EFFECTIVE GROUNDS RAISED READS AS FOLLOWS: - I) THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENTS IN A FIRM OF R S.12 50 000/ - WITHOUT APPRECIATING THE CIRCUMSTANCES UNDER WHICH THE AO HAD MADE THE ADDITION. II) THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF INVESTMENT MADE BY THE ASSESSEE IN MUTUAL FUNDS AMOUNTING TO PAGE 2 OF 6 ITA NO.270/BANG/2010 2 RS.10 00 000/ - WITHOUT TAKING INTO C ONSIDERATION THAT NO STATEMENT OF AFFAIRS WAS FILED BY THE ASSESSEE BEFORE THE A.O. IN THE COURSE OF ASSESSMENT PROCEEDINGS. III) THE LEARNED CIT(A) HAS ERRED IN ARRIVING AT HIS FINDINGS BY CONSIDERING FRESH EVIDENCE/DOCUMENTS FILED BEFORE HIM WHICH WERE NOT F ILED BEFORE THE AO IN COURSE OF THE ASSESSMENT PROCEEDINGS IN CONTRAVENTION OF RULE 46A OF THE I T RULES. 3. THE FACTS IN BRIEF ARE AS FOLLOWS: - THE ASSESSEE IS AN INDIV IDU AL . SHE DERIVES INCOME FROM HOUSE PROPERTY AND BUSINESS. FOR THE CONCERNED A SST. YEAR RETURN OF INCOME WAS FILED DECLARING AN INCOME OF RS.4 14 678/ - . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES WERE ISSUED U/S 143(2) OF THE ACT ON VARIOUS DATES. SINCE THERE WAS NO RESPONSE TO THE NOTICES ISSUED ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT VIDE ORDER DATED 30/11/2007. IN THE BEST JUDGEMENT ASSESSMENT COMPLETED THE A.O. HAD MADE THE FOLLOWING TWO ADDITIONS: - 1. CAPITAL INVESTMENT IN FIRM RS.12 50 000/ - 2. INVESTMENT IN MUTUAL FUND RS.10 00 000/ - 3.1 THE ADDITION OF RS .12 50 000/ - WAS MADE BY THE AO FOR THE FOLLOWING REASONS: - ON VERIFICATION OF THE FIRMS RETURN IT IS SEEN THAT 2 FIRMS ARE DECLARING RENTAL INCOME OF RS.6 00 000/ - AND RS.3 00 000/ - . AS THE ASSESSEE DID NOT SUBMIT ANY DETAILS IT IS ESTIMATED THAT TO PAGE 3 OF 6 ITA NO.270/BANG/2010 3 EARN ABOVE MENTIONED RENTAL INCOME THE ASSESSEE FIRM SHOULD HAVE INVESTED AN AMOUNT OF RS.15 00 000/ - AND RS.10 000/ - WHICH IS EQUALLY INVESTED BY ASSESSEE AND HER HUSBAND SRI V PURUSHOTTAM. HENCE EACH INDIVIDUALS SHARE WORKS OUT TO RS.1 2 50 000/ - . THIS AMOUNT OF INVESTMENT IS BROUGHT TO TAX AS UNEXPLAINED INVESTMENT . 3.2 THE ADDITION OF RS.10 00 000/ - AS UNEXPLAINED INVESTMENT WAS MADE BY THE AO BY OBSERVING THUS: - AS PER INFORMATION COLLECTED THE ASSESSEE HAS MADE INVESTMENT IN M UTUAL FUND OF RS.10 LAKHS. THE ASSESSEE WAS REQUESTED TO SUBMIT SOURCES FOR THIS INVESTMENT; THE ASSESSEE DID NOT SUBMIT ANY DETAILS. HENCE THE AMOUNT OF RS.10 LAKHS IS ADDED AS UNEXPLAINED INVESTMENT . 4. THE ASSESSEE BEING AGGRIEVED FILED AN APPEA L BEFORE THE FIRST APPELLATE AUTHORITY. 5. THE CIT(A) DELETED BOTH THE ABOVE SAID ADDITIONS. WITH REFERENCE TO ADDITION OF RS.12 50 000/ - THE CIT(A) DELETED THE ADDITION BY OBSERVING THUS: - AFTER CAREFULLY EXAMINING THE DOCUMENTS FILED I FOUND STREN GTH IN THE ARGUMENT OF THE A.R. RECORDS SHOW THERE WAS NO NEW INVESTMENT BY THE APPELLANT EITHER IN THE FIRM OR IN CONSTRUCTION OF A HOUSE IN EJIPPURA OR ASM ROAD. HENCE THE ADDITION IS UNCALLED FOR AND DESERVES TO BE DELETED. HENCE ADDITION IS DELET ED. GROUND OF APPEAL IS ALLOWED . PAGE 4 OF 6 ITA NO.270/BANG/2010 4 5.1 THE ADDITION OF RS.10 LAKHS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MUTUAL FUND WAS DELETED BY THE CIT(A) FOR THE FOLLOWING REASON: - THIS GROUND RELATES TO ADDITION OF RS.10 LAKHS AS UNEXPLAINED INVESTMENT I N MUTUAL FUNDS. AS PER THE STATEMENT OF AFFAIRS AS ON 1.3.2005 THE APPELLANT HAS SHOWN INVESTMENT LIC ETC. AT RS.11 25 000/ - EXPLAINING THE SOURCE THEREOF. THEREFORE THE ADDITION IS DELETED AND THE GROUND OF APPEAL IS ALLOWED . 6. THE REVENUE BEI NG AGGRIEVED IS IN APPEAL BEFORE US. 7. THE LEARNED DR SUBMITTED THAT THE ASSESSMENT HAS BEEN COMPLETED U/S 144 OF THE ACT ON ACCOUNT OF NON - COOPERATION ON THE PART OF THE ASSESSEE IN COMPLIANCE WITH THE NOTICES U/S 143(2) OF THE ACT. IT WAS SUBMITTED THAT THE CIT(A) HAS ADMITTED FRESH EVIDENCE /DOCUMENTS AND HAS DELETED THE ADDITIONS MADE BY THE AO IN CONTRAVENTION OF RULE 46A OF THE INCOME TAX RULES. 8. THE LEARNED AR ON THE OTHER HAND SUPPORTED THE FINDING OF THE CIT(A). 9. WE HAVE HEARD THE R IVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE PRESCRIPTION OF RULE 46A IS APPARENT THAT THE ASSESSEE IS ORDINARILY NOT ENTITLED TO PRODUCE ADDITIONAL EVIDENCE BEFORE THE CIT(A) OTHER THAN FURNISHED TO THE AO EXCEPT PAGE 5 OF 6 ITA NO.270/BANG/2010 5 IN THE FOUR CIRCUMSTANCES ENUM ERATED IN CLAUSE (A) TO (D) OF SUB - RULE (1). SUB - RULE (2) HOWEVER PROVIDES THAT NO EVIDENCE SHALL BE ADMITTED UNDER SUB - RULE (1) UNLESS THE CIT(A) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. SUB - RULE (3) FURTHER STIPULATES THAT THE CIT(A) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB - RULE (1) UNLESS THE AO HAS BEEN ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS EXAMINE THE WITNESS PRODUCED BY THE ASSESSEE OR TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY W ITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. 9.1 IN THE INSTANT CASE THE CIT(A) HAS REFERRED TO THE STATEMENT OF AFFAIRS AS ON 31.3.2005 AND ALSO TO CERTAIN DOCUMENTS WHICH WERE FILED IN THE COURSE OF HEARING BEFORE HIM TO DE LETE THE ABOVE SAID TWO ADDITIONS. IF THE CIT(A) WANT TO ENTERTAIN ADDITIONAL EVIDENCES HE OUGHT TO HAVE CALLED FOR THE COMMENTS OF THE AO ON IT MORE SPECIFICALLY IN THE LIGHT OF THE FACT THAT THE ASSESSMENT WAS MADE U/S 144 OF THE ACT. THEREFORE TH E IMPUGNED ORDER ON THIS SCORE IS SET ASIDE AND THE MATTER IS REMITTED TO THE AO FOR DECIDING THIS ISSUE AFRESH AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. NEEDLESS TO SAY THE ASSESSEE WOULD EXTEND FULL COOPERATION T O THE AO SO AS TO FACILITATE THE FRAMING OF THE PROPER ASSESSMENT AND WOULD ALSO BE ENTITLED TO FILE ANY ADDITIONAL EVIDENCE BEFORE THE AO IN SUPPORT OF HIS CASE. PAGE 6 OF 6 ITA NO.270/BANG/2010 6 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. TH E ORDER PRONOUNCED ON THURSDAY THE 13 TH DAY OF JANUARY 201 1 AT BANGALORE. SD/ - SD/ - (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1) THE ASSESSEE (2) THE REVENUE (3) THE CI T(A) CONCERNED. (4) THE CIT CONCERNED. (5) THE DR (6) GUARD FILE. (7) GUARD FILE NEW DELHI. MSP/ 12 . 1. BY ORDER ASST. REGISTRAR ITAT BANGALORE.