Smt. Rekhaben Hasmukhlal Jariwala, Surat v. The ACIT.,Circle-3,, Surat

ITA 3489/AHD/2008 | 2002-2003
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 348920514 RSA 2008
Assessee PAN ACRPJ9028N
Bench Ahmedabad
Appeal Number ITA 3489/AHD/2008
Duration Of Justice 2 year(s) 2 month(s) 30 day(s)
Appellant Smt. Rekhaben Hasmukhlal Jariwala, Surat
Respondent The ACIT.,Circle-3,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 26-10-2012
Date Of Final Hearing 18-09-2012
Next Hearing Date 18-09-2012
Assessment Year 2002-2003
Appeal Filed On 22-10-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI D.K.TYAGI JUDICIAL MEMBER AND SHRI T.R. MEENA ACCOUNTANT MEMBER ITA NO. 3489 & 3493/AHD/2008 ASSESSMENT YEARS :2002-03 & 2006-07 SMT. REKHABEN HASMUKHLAL JARIWALA 89 NEHRUNAGAR SOCIETY ICHCHHANATH ROAD SURAT V/S . ACIT CIRCLE-3 SURAT. PAN NO. A CRPJ9028N (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI D. K. PARIKH A.R. /BY RESPONDENT SHRI D.P. GUPTA CIT. D.R. /DATE OF HEARING 18.09.2012 /DATE OF PRONOUNCEMENT 26.10.2012 O R D E R PER : T.R.MEENA ACCOUNTANT MEMBER THE APPELLANT FILED APPEAL FOR A.Y. 02-03 BY ITA NO .3489/AHD/2008 AGAINST THE ORDER OF THE CIT(A)-SURAT ORDER DATED 13.08.2008 AND FOR A.Y. 06- 07 BY ITA NO.3493/AHD/2008 AGAINST THE ORDER OF THE CIT(A)-SURAT DATED 11.08.2008. THE CO-ORDINATE D BENCH AHMADABAD HAD PASSED A CONSOLIDATED ORDER FOR ITA NOS. 3487- 3493 /AHD/ 20 08 & ITA NOS. 3660-3661 / AHD / 2008 FOR A.YS. 2000-01 TO 2006-07 ON 21. 01.2011. THE APPELLANT ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 2 FILED M.A. FOR BOTH THE ASSESSMENT YEARS. M.A. NO.27/AHD/2011 FOR A.Y. 02- 03 & M.A. NO. 28/AHD/2011 FOR 06-07 AND CLAIMED THA T IN A.Y. 02-03 THE CO- ORDINATE BENCH HAS NOT DISPOSED OFF FOLLOWING GROU NDS OF ORIGINAL APPEAL IN ITA NO. 3489/AHD/2008: 4. THAT THE CIT(A) ERRED IN CONFIRMING DISALLOWANC E U/S-14A OF RS.66 218/- 5. THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION U/S-68 OF RS.3 46 149/-. LIKEWISE IN A.Y. 06-07 IN ITA NO.3493/AHD/2008 THE GROUND NO.2 HAS NOT BEEN DEALT WITH BY THE CO-ORDINATE BENCH WHICH IS AS UNDER: 2. THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITIO N OF RS.62 450/- AS INCOME FROM UNDISCLOSED SOURCES. THE CO-ORDINATE D BENCH AHMADABAD VIDE ORDER DATED 20.04.2012 HAS ALLOWED THE M.A. IN BOTH THE YEARS AND HELD AS UNDER FOR A.Y. 02-03: 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE OR DER PASSED BY TRIBUNAL AND WE FIND THAT A MISTAKE HAS C ROPPED UP IN NOT ADJUDICATING THE GROUND NO.4 & 5 OF THE ORDER A ND WE RECALL THE ORDER TO THIS EXTENT ONLY. THE SIMILAR OBSERVATION FOR GROUND NO.2 OF A.Y. 06- 07 IS GIVEN IN THE SAME ORDER. SO WE HAVE HEARD TOGETHER THE CASE ON THES E GROUNDS AS THE ASSESSEE IS SAME AND ISSUES ARE IDENTICAL. THEREF ORE BOTH APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 3 GROUNDS OF ITA NO.3489/AHD/2008 (FOR A.Y. 02-03) 2. GROUND NO.4 IS AGAINST CONFIRMING THE DISALLOWA NCES U/S.14A OF RS.66 218/-. THE A.O. OBSERVED THAT THE ASSESSEE H AS CLAIMED EXPENSES OF RS.86 407/- (RS.25 368/- CLAIMED FROM FUTURE TRADIN G AND RS.61 039/- FROM OTHER INCOME). THE APPELLANT HAD DIVIDEND INCOME O F RS.8 05 041/- BUT NO EXPENSES ON EARNING ON THIS DIVIDEND HAD BEEN APPOR TIONED BY THE APPELLANT. THEREFORE A.O. HAD GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. AFTER CONSIDERING THE ASSESSEES REPLY HE DISALLOWED RS. 66 218/- U/S. 14A OF THE IT ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O. THE AS SESSEE CARRIED THE MATTER BEFORE CIT(A) WHO HAS ALSO CONFIRMED THE AD DITION BY OBSERVING AS UNDER: 13. I FIND NOTHING UNSCIENTIFIC IN THE METHOD ADOP TED BY THE A.O. A PART OF THE ASSESSEES INCOME WAS EXEMPT FR OM TAXATION. THE ASSESSED WAS NOT IN A POSITION TO BIFURCATE THE EXPENDITURE BETWEEN WHAT HAD BEEN INCURRED FOR EARNING TAXABLE INCOME AND WHAT HAD BEEN INCURRED FOR EARNING EXEMPT INCOME. THEREFORE I AM OF THE VIEW THAT THE AO HAD NO OTHER OPTION BUT TO SEGREGATE THE EXPENSES ON PROPORTIONATE BASIS. THE DISALLOWA NCE OF THE SUM OF RS.66 218/- UNDER THE PROVISIONS OF SEC.14A OF THE IT ACT IS CONFIRMED. 4. NOW THE ASSESSEE CARRIED THE MATTER BEFORE US. LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT NO NEXUS HAD BEEN ESTABLISH ED BY THE A.O. BETWEEN EXEMPTED INCOME AND EXPENDITURE BEFORE DISALLOWING THE EXPENSES U/S.14A OF ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 4 THE IT ACT. IT IS CLAIMED THAT THE EXPENDITURE INC LUDED SALARY BONUS BANK AND OTHER CHARGES AND TELEPHONE EXPENSES WHICH WE RE NOT RELATABLE TO ANY EXEMPT INCOME SUCH AS FROM DIVIDEND. HE ALSO RELIE D UPON THE CO-ORDINATE BENCH DECISION FOR A.Y. 01-02 IN ITA NO.3488/AHD/20 08 AND CLAIMED THAT HONBLE CO-ORDINATE BENCH HAD ALLOWED THE APPEAL ON IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. THE FINDING IS AS UNDER: 11. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS DISALLOWED A SUM OF RS.16 000/- BY INVOKING THE PRO VISIONS OF SECTION 14A AND STATING THAT THE EXPENDITURE INCURR ED WAS ON ACCOUNT OF ACCOUNTS FEES POSTAGE & TELEGRAM CHARG ES AND DEMAT CHARGES WHICH ARE RELATABLE TO EXEMPT INCOME . THE ASSESSEE CONTENDED THAT THESE EXPENSES ARE NOT AT A LL RELATABLE TO THE EXEMPT INCOME AND THESE ARE ARISING OUT OF B USINESS OF ASSESSEE. HENCE NO DISALLOWANCE SHOULD BE MADE. WE FIND THAT THE PLEA OF THE ASSESSEE IS REASONABLE AND THE RE IS NO NEXUS THAT ASSESSEE HAS EARNED EXEMPT INCOME. WE FURTHER FIND THAT THE PLEA OF ASSESSEE IS QUITE REASONABLE AND WE ALL OW THE CLAIM OF ASSESSEE. THIS ISSUE OF ASSESSEES APPEAL IS AL LOWED. FROM THE SIDE OF THE REVENUE LD. D.R. RELIED UPON THE ORDERS OF AUTHORITIES BELOW AND CLAIMED THAT IT SHOULD BE CONFIRMED. 5. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND GONE THROUGH THE CO-ORDINATE BENCH DECISION IN ITA NO. 3488/AHD/ 2008 (SUPRA). IT IS FOUND THAT IN A.Y. 01-02 THE DISALLOWANCE U/S. 14A WAS M ADE ON ACCOUNT OF ACCOUNTS FEES POSTAGE & TELEGRAPH CHARGES AND D EMAT CHARGES WHEREAS IN THE YEAR UNDER CONSIDERATION THE DISALLOWANCE WAS MADE BY THE A.O. ON ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 5 ACCOUNT OF EXPENDITURE INCURRED ON SALARY & BONUS BANK & OTHER CHARGES AND TELEPHONE EXPENSES. AS THE ASSESSEE HAS NOT DISALL OWED THE EXPENSES U/S.14A OF THE IT ACT IT IS TRUE THAT WITHOUT ANY EXPENDITURE NO INCOME CAN BE EARNED. THE ORDER RELIED UPON BY THE APPELLANT IS NOT SQUARELY APPLICABLE AS FACTS ARE DIFFERENT DURING THE YEAR UNDER CONSIDERA TION. THEREFORE WE HAVE CONSIDERED VIEW THAT CIT (A) WAS RIGHT IN CONFIRMIN G THE ADDITION. THE ASSESSEES APPEAL ON THIS GROUND IS DISMISSED. 6. GROUND NO.5 IS AGAINST CONFIRMING THE ADDITION U /S.68 OF RS.3 46 149/-. THE A.O. OBSERVED THAT THE ASSESSEE HAD SHOWN TWO L OANS NAMELY RS.77 863/- FROM M/S. TRIUMH FINSEC PVT. LTD. AND R S.2 68 286/- FROM J.V. CONTROL. THE ASSESSEE WAS GIVEN REASONABLE OPPORTU NITY OF BEING HEARD TO PROVE THE GENUINENESS OF THE TRANSACTION CREDITWOR THINESS OF THE CASH CREDITORS AND IDENTITY OF THE PERSONS. SHE DID NOT FILE ANY CONFIRMATION COPY OF RETURN ON INCOME OR ANY OTHER DETAILS OF BOTH THE P ARTIES EVEN THEN REPEATED OPPORTUNITY WAS GIVEN TO HER. THEREFORE HE MADE A DDITION OF RS.3 46 149/- U/S.68 OF THE IT ACT. 7. BEING AGGRIEVED BY THE ORDER OF THE A.O. THE AS SESSEE CARRIED THE MATTER BEFORE CIT(A) WHO HAS ALSO CONFIRMED THE ADD ITION BY OBSERVING AS UNDER: 17. THERE IS NO EVIDENCE TO SHOW THAT THE CREDIT S TANDING IN THE NAME OF M/S. JV CONTROL WAS THE RESULT OF A LAPSE IN THE ACCOUNTING SOFTWARE NOT HAS ANY EVIDENCE BEEN FURN ISHED TO SHOW THAT THE SAME HAD BEEN RECTIFIED SUBSEQUENTLY. THE ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 6 ADDITION OF THE SUM OF RS.2 68 286/- WILL THEREFORE STAND CONFIRMED. 8. NOW THE MATTER IS BEFORE US. LD. COUNSEL FOR TH E APPELLANT CONTENDED THAT THE LOWER AUTHORITIES HAD TAKEN RS.2 68 286/- IN THE NAME OF M/S. J.V. CONTROL AS LOAN BUT WHICH WAS BALANCE DUE TO COMPUT ER SOFTWARE LAPSE. THIS WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) IN WRITTEN SUBMISSION AT PAGE NO.18 OF THE PAPER BOOK AT PARA F THAT DUE TO ACCOU NTING SOFTWARE LAPSE THE AMOUNT WAS TAKEN UNDER HEAD J.V. CONTROL AND THAT I T WAS SUBSEQUENTLY RECONCILED AND ADJUSTED IN A.Y. 04-05. ALL THE EVI DENCES OF THE APPELLANT WAS WITH THE A.O. FOR SIX ASSESSMENT YEARS AS THERE WA S SEARCH IN THIS CASE. SIMILARLY RS.77 863/- RELATED TO THE TRANSACTION O F PURCHASE OF SHARE FROM M/S. TRIUMH FINSEC PVT. LTD. AND NOT CASH CREDIT RS.49 6 47/- WAS RECEIVED THROUGH CHEQUE FROM M/S. M/S. TRIUMH FINSEC PVT. LTD. LD. CIT(A) CONFIRMED THE ADDITION MAINLY BECAUSE ACCOUNTS WERE NOT CROSS VER IFIED BY THE PARTIES. THEREFORE HE REQUESTED TO DELETE THE ADDITION. FR OM THE SIDE OF THE REVENUE LD. D.R. RELIED UPON THE ORDERS OF CIT(A) AND A.O. 9. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND GONE THROUGH THE FACTS OF THE CASE. PAGE NO. 58 OF THE PAPER BO OK SHOWS THAT THERE WAS A RUNNING ACCOUNT IN THE BOOKS OF ASSESSEE OF M/S. TR IUMH FINSEC PVT. LTD. WITHOUT ANY SIGNATURE WHICH SHOWS THE PURCHASE OF THE SHARES WITH OPENING BALANCE OF RS.13 702/- ON 14.04.2001 THERE WAS CRE DIT ENTRY OF RS.49 647.23/- IN THE SAID PAGE. THE FINAL LIABILI TY AS ON 31.03.2002 HAS BEEN SHOWN AT RS.77 863/- IN THIS ACCOUNT. BUT ASSESSEE DID NOT FILE ANY ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 7 CONFIRMATION FROM M/S. TRIUMH FINSEC PVT. LTD. AT A NY STAGE. THE PAGE NO. 18 REFERRED BY THE APPELLANT IS NARRATION OF FACTS. THE REPLY OF THE ASSESSEE THAT THE AMOUNT OF RS.2 68 286/- IN THE NAME OF J.V. CON TROL WAS DUE TO COMPUTER SOFTWARE LAPSE WHICH REMAINED UNADJUSTED. BESIDES THIS NO EVIDENCE HAS BEEN GIVEN BY THE APPELLANT. THE ONUS ON THE ASSESS EE TO PROVE THE GENUINENESS OF THE TRANSACTION CREDITWORTHINESS OF THE CASH CREDITORS AND IDENTITY OF THE PERSONS WHICH HAS NOT BEEN DISCHARG ED BY THE APPELLANT. THEREFORE WE HAVE CONSIDERED VIEW THAT NO INTERFER ENCE IN THE ORDER OF THE CIT(A) IS WARRANTED. WE CONFIRM THE ADDITION. THE ASSESSEES APPEAL ON THIS GROUND IS DISMISSED. GROUNDS OF ITA NO.3493/AHD/2008 (FOR A.Y. 06-07) 10. GROUND NO.2 WAS AGAINST CONFIRMING THE ADDITION OF RS.62 450/- AS INCOME FROM UNDISCLOSED SOURCES. THE A.O. OBSERVED THAT DURING THE COURSE OF SEARCH JEWELLERY OF RS.62 450/- WAS FOUND AS PER ANNEXURE JF IN LOCKER ON 18.12.2005. THE ASSESSEE WAS GIVEN REASONABLE OPPO RTUNITY OF BEING HEARD DURING THE COURSE OF ASSESSMENT PROCEEDING U/S. 153 A OF THE IT ACT. BEFORE A.O. THE APPELLANT CLAIMED THAT THIS JEWELLERY BEL ONGED TO HER HUSBAND AND ALSO DRAWN ATTENTION TO THE CIRCULAR NO.1916 DATED 15.05.1994. AFTER CONSIDERING THE APPELLANTS REPLY THE A.O. MADE TH E ADDITION OF RS.62 450/- AS INCOME FROM UNDISCLOSED SOURCE. 11. BEING AGGRIEVED BY THE ORDER OF THE A.O. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS CONFIRMED THE ADDI TION ON THE GROUND THAT ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 8 THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF ACQUISIT ION OF THE SAID JEWELLERY WHICH HAS NOT BEEN DISCLOSED IN THE RETURN OF INCOM E. NO EXPLANATION WAS FURNISHED BEFORE THE A.O. THE APPELLANT CLAIMED TH AT THE JEWELLERY BELONGED TO HER HUSBAND WITHOUT CORROBORATING EVIDENCE. 12. NOW THE MATTER IS BEFORE US. LD. COUNSEL FOR T HE APPELLANT CONTENDED THAT SEARCH WARRANT WAS IN THE NAME OF HER HUSBAND SHRI KRISHANKANT PATEL. LOCKER NO.607 WITH SHRI BHARAT CO-OPERATIVE BANK LI MITED WAS IN THE NAME OF HER HUSBAND WHERE JEWELLERY VALUED RS.62 450/- WAS FOUND. THE TOTAL WEIGHT OF JEWELLERY (GOLD) WAS 63.5GR. AND .5KG SILVER ART ICLES WERE ADDED IN THE HANDS OF HER HUSBAND NAMELY SHTRI KRISHANKANT PATEL. H E ALSO DRAWN OUR ATTENTION ON PAGE NOS. 49 AND 50 OF THE PAPER BOOK AND CLAIME D THAT SIMILAR ADDITION HAD BEEN MADE IN THE CASE OF HER HUSBAND IN A.Y. 06 -07 ORDER DATED 27.12.2007. THEREFORE HE REQUESTED TO DELETE THE ADDITION IN THE HANDS OF THE APPELLANT. FROM THE SIDE OF THE REVENUE LD. D.R. RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 13. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES B ELOW AND GONE THROUGH THE PAPER BOOK. AS MENTIONED ABOVE THE ADDITION F OR SAME JEWELLERY HAD BEEN MADE IN THE HANDS OF HER HUSBAND AS WELL AS IN THE HANDS OF APPELLANT IT IS TANTAMOUNT TO DOUBLE ADDITION OF THE SAME JEW ELLERY. THUS WE ARE IN AGREEMENT WITH THE APPELLANT AND ACCORDINGLY THE A DDITION IS DELETED. ITA NOS. 3489 & 3493/AHD/2008 A.Y. 2002-03 & 2006-07 PAGE 9 14. IN THE RESULT THE ASSESSEES APPEALS FOR A.Y. 2002-03 IN ITA NO.3489/AHD/2008 IS DISMISSED AND FOR A.Y. 2006-07 IN ITA NO.3493/AHD/2008 IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 26.10.2012 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ) ) 12( / DR ITAT AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ 8/ 1 ': ) 12( ; STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 25.10.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 26.10.2012 4) DATE OF CORRECTION 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 26.10.2012 7) ORDER UPLOADED ON 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 26.10.2012