ITO, Bangalore v. Sri. Madanj Kumar J, Bangalore

ITA 277/BANG/2014 | 2007-2008
Pronouncement Date: 19-11-2014 | Result: Dismissed

Appeal Details

RSA Number 27721114 RSA 2014
Assessee PAN ADXPM3872C
Bench Bangalore
Appeal Number ITA 277/BANG/2014
Duration Of Justice 8 month(s) 24 day(s)
Appellant ITO, Bangalore
Respondent Sri. Madanj Kumar J, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 19-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 19-11-2014
Assessment Year 2007-2008
Appeal Filed On 25-02-2014
Judgment Text
ITA NO.277 OF 2014 MADANJ KUMAR J BANGALORE. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE ABENCH BANGALORE BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI JASON P. BOAZ ACCOUNTANT MEMBER ITA NO. 277/BANG/2014 (ASSESSMENT YEAR: 2007-08) INCOME TAX OFFICER WARD 8(1) BANGALORE VS. SHRI MADANJ KUMAR J PROP:SRI CHAKRAVARTHY TRADERS SACRED HEART ROAD BEHIND ST. ANTHONYS CHURCH TC PALYA BANGALORE PAN: ADXPM 3872 C (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI P. DHIVAHAR JCIT & SHRI BIJOY KUMAR PANDA CIT (DR ASSESSEE BY: SHRI S. KRISHNA SWAMY CA DATE OF HEARING: 19/11/2014 DATE OF PRONOUNCEMENT: 19/11/2014 O R D E R PER RAJPAL YADAV J.M. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LEARNED CIT (A) DATED 10.10.2013 PASSED FOR ASSESSM ENT YEAR 2007-08. THE SOLITARY GRIEVANCE OF THE REVENUE IS T HAT THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.13 07 341/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL. HE HAS FILED HIS RETURN OF INCOME ON 31 .10.2007 DECLARING A TOTAL INCOME OF RS.5 50 906/-. A SURVEY U/S 133A WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSES SEE ON 12.10.2009. ACCORDING TO THE ASSESSING OFFICER DURI NG THE COURSE OF SURVEY IT WAS FOUND THAT THE ASSESSEE HAS MADE UNEXPLAINED ITA NO.277 OF 2014 MADANJ KUMAR J BANGALORE. PAGE 2 OF 5 INVESTMENT IN THE IMMOVABLE PROPERTY HENCE A NOTIC E U/S 148 WAS ISSUED. THE ASSESSEE FILED LETTER DATED 20.08.2 010 AND SUBMITTED THAT THE INCOME DECLARED ORIGINALLY BE TR EATED DECLARED IN RESPONSE TO NOTICE U/S 148. ASSESSING OFFICER HA S MADE AN ADDITION OF RS.13 07 341/- BY OBSERVING AS UNDER: DIFFERENCE IN THE CAPITAL ACCOUNT : IT IS SEEN FROM THE STATEMENT OF AFFAIRS AS ON 31.3.2007 FILED IN T HE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 THERE IS A VARIATION I N RESPECT OF THE CAPITAL ACCOUNT OF THE ASSESSEE. THI S WOULD HAVE BEEN DONE BY THE ASSESSEE PROBABLY TO EXPLAIN THE SURCES FOR THE INVESTMENTS MADE IN THE PROPERTIES HELD BY HIM. IN THE STATEMENT OF AFFAIRS AS ON 31.3.2007 FILED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS SHOWN A SUM OF RS.25 63 066/- TOWARDS CAPITAL AS ON 31.3.2007. HOWEVER ON EXAMINING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 THE ASSESSEE HAS SHOWN THE CAPITAL AS ON 31.3.2007 AT RS.12 55 725/- ONLY/ THUS THERE IS A DIFFERENCE OF RS.13 07 341/- BETWEEN THE ABOVE STATEMENT OF AFFAIRS AND THE BALANCE SHEET IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2007-08. IN THE ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE THE AMOUNT OF RS.13 07 341/- IS BROUGHT TO TAX AS DIFFERENCE IN THE CAPITAL. 3. ON APPEAL THE LEARNED CIT (A) DELETED THE ADDIT ION BY OBSERVING AS UNDER: 9. IN MY CONSIDERED VIEW THE ASSESSING OFFICER HAS NOT BROUGHT OUT CLEARLY THE REASONS FOR RE- OPENING THE ASSESSMENT U/S 148. THE VAGUE REFERENCE TO THE DISCOVERY OF UNEXPLAINED INVESTMENTS IN IMMOVABLE PROPERTIES DURING THE SURVEY SHOWS THAT THERE IS NO APPLICATION OF MIND. UNLESS THERE IS CLEAR AND SPECIFIC INFORMATION OR MATERIAL WITH THE ASSESSING OFFICER AND THE REASONS RECORDED MENTIONS OF THE AMOUNT OF INCOME ESCAPING ASSESSMENT FOR THE RELEVANT YEAR WHICH ITA NO.277 OF 2014 MADANJ KUMAR J BANGALORE. PAGE 3 OF 5 MAY BE REPRESENTED BY UNACCOUNTED OR UNEXPLAINED INVESTMENT EXPENDITURE ETC. THE PROCEEDINGS U/S 148 ARE VITIATED. FOR THE ASSESSMENT YEAR 2007-08 THERE IS NOTHING TO SHOW THAT ANY MATERIAL WAS DISCOVERED DURING SURVEY TO CALL FOR PROCEEDINGS U/S 148. THE PROCEEDING BEING BAD IN LAW ASSESSMENT MADE IN PURSUANCE THERE TO IS HELD TO BE BAD IN LAW AND QUASHED. 9.2 EVEN ON MERITS THERE IS ABSOLUTELY NO BASIS OR REASON FOR MAKING AN ADDITION ON ACCOUNT OF DIFFERENCE IN CAPITAL. I AGREE WITH THE LEARNED AR THAT THERE IS NO DIFFERENCE IN THE CAPITAL BALANCE AS ON 31.3.2007 AT ALL FOR THE ASSESSING OFFICER TO INTERFERE. THE ASSESSING OFFICER CANNOT MERELY SURMISE AND PRESUME THE DIFFERENCE AND CONJECTURE THE SAME TO BE FOR THE PURPOSE OF EXPLAINING ANY UNDISCLOSED INVESTMENT. THE ASSESSING OFFICER HAS MISERABLY FAILED TO POINT OUT ANY ITEM OR ASSET WHICH IS NOT DISCLOSED AND THE SOURCE OF WHICH HAS NOT BEEN EXPLAINED. SHE ALSO FAILED TO FIND A SINGL E RUPEE OF UNDISCLOSED AND UNEXPLAINED INVESTMENT BY THE ASSESSEE. THE ADDITION ON ACCOUNT OF CAPITAL DIFFERENCE IS MERELY A FIGMENT OF IMAGINATION OF TH E ASSESSING OFFICER WITHOUT ANY SHADE OF REALITY AND FACTS. THE ADDITION OF RS.13 07 341/- IS HEREBY DELETED. GROUNDS OF APPEAL ARE ALLOWED. 4. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATIV ES WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS PLEADED THAT THE ASSESSING OFFICER HAS PICKED THE FIGURE OF RS.1 2 55 725/- BUT HE DID NOT DISCLOSE THE SOURCE FROM WHERE HE PI CKED UP THIS FIGURE. THERE IS NO COHERENCE BETWEEN THE MATERIAL AVAILABLE ON RECORD AND THE ULTIMATE CONCLUSION DRAWN BY THE ASS ESSING OFFICER. THE ASSESSEE HAS POINTED OUT THE DETAILS O F ITS CAPITAL BALANCE AND OTHER DETAILS WHICH HAVE BEEN NOTICED B Y THE LEARNED CIT (A) IN PARAGRAPH NO.8 OF THE IMPUGNED ORDER. AC CORDING TO THE ASSESSEE THE BALANCE SHEET AS ON 31.3.2007 FILE D ALONG WITH ITA NO.277 OF 2014 MADANJ KUMAR J BANGALORE. PAGE 4 OF 5 THE RETURN FOR THIS ASSESSMENT YEAR SHOWED THE CLOS ING CAPITAL BALANCE OF RS.29 10 746/-. ON AN ANALYSIS OF THESE DETAILS THE LEARNED CIT (A) HAS OBSERVED THAT THE ASSESSING OFF ICER HAS DRAWN WRONG INFERENCE AND HIS ORDER IS BASED ON CON JECTURE. HE ALSO OBSERVED THAT THE DIFFERENCE IN THE ALLEGED CA PITAL BALANCE HAS BEEN ASSUMED BY THE ASSESSING OFFICER. SHE HAS NOT MADE ANALYSIS OF THE EARLIER YEARS OR SUBSEQUENT ASSESSM ENT YEARS IN ORDER TO EXACTLY POINT OUT THE DIFFERENCE. SINCE TH E LEARNED FIRST APPELLATE AUTHORITY HAS OBSERVED THAT THERE IS INHE RENT CONTRADICTION IN THE FINDINGS OF THE ASSESSING OFFI CER HE HAS NOT MADE REFERENCE TO ANY MATERIAL RATHER HE FAILED TO CALCULATE THE CLOSING CAPITAL BALANCE SHOWN BY THE ASSESSEE IN TH E BALANCE SHEET FILED ALONG WITH THE RETURN. NOTHING HAS BEEN PLACED BEFORE US TO INDICATE THAT THE FINDINGS OF THE CIT (A) ARE CONTRARY TO THE RECORD. ONCE HIGHER APPELLATE AUTHORITY HAS POINTED OUT THAT THE ASSESSMENT ORDER IS BASED ON SURMISE AND CONJECTURE AND NOT IN CONSONANCE WITH THE FACTS ON RECORD THEN THAT FIND INGS CANNOT BE REVERSED MERELY BY FILING THE APPEAL. THE REVENU E OUGHT TO HAVE PLACED ON RECORD THE FACTS AND CIRCUMSTANCES I NDICATING THAT THE FACTUAL FINDINGS OF THE CIT (A) ARE WRONG. WE HAVE TO PUT RELIANCE UPON THE FINDINGS BY THE HIGHER AUTHORITIE S INSTEAD OF THE ASSESSING OFFICER. THEREFORE WE DO NOT FIND AN Y MERIT IN THE APPEAL IT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH NOVEMBER 2014. SD/- SD/- (JASON P. BOAZ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 19 TH NOVEMBER 2014. ITA NO.277 OF 2014 MADANJ KUMAR J BANGALORE. PAGE 5 OF 5 VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES BANGALORE