Sh. Sheetal Verma, Ambala Cantt. v. ITO, Ambala

ITA 442/CHANDI/2011 | 2007-2008
Pronouncement Date: 29-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 44221514 RSA 2011
Bench Chandigarh
Appeal Number ITA 442/CHANDI/2011
Duration Of Justice 10 month(s)
Appellant Sh. Sheetal Verma, Ambala Cantt.
Respondent ITO, Ambala
Appeal Type Income Tax Appeal
Pronouncement Date 29-02-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 29-02-2012
Date Of Final Hearing 23-02-2012
Next Hearing Date 23-02-2012
Assessment Year 2007-2008
Appeal Filed On 29-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA VICE PRESIDENT AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO.442/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI SHEETAL VERMA V ITO WARD-2 PROP.SHEETAL GUN HOUSE AMBALA. NICHOLSON ROAD AMBALA CANTT. PAN: ABUPV-8839P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDERSHAN KUMAR & ROHIT BEC TOR RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 23.02.2012 DATE OF PRONOUNCEMENT : 29.02.2012 ORDER PER MEHAR SINGH AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A) PASSED U/S 250(6) OF THE INCOME-TAX ACT 1961 (IN SHORT 'THE ACT') DATED 25.02.2011 RELATING TO A SSESSMENT YEAR 2007-08. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATION OF INCOME FROM REAL ESTATE BUSINESS AT RS.1 50 000/- AGAINST THE RETURNED INCOME OF RS.52231/-. 2. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.30 000/- ON ACCOUNT OF COMMISSION OF SHEETAL JEWELLERS. 2 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.50 000/- ON ACCOUNT OF INVESTMENT IN FDRS. 4. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.434808/- ON ACCOUNT OF INVESTMENTS MADE BY AN EXISTING ASSESSEE SMT.ANUPAM VERMA AND HAS ALSO GROSSLY ERRED IN DISBELIEVING HER SOUR CE OF INCOME SIMPLY ON THE REPORT OF THE INSPECTOR WHI CH WAS NEVER CONFRONTED TO HER. 5. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.21208/-. 6. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.86920/-. 7. THAT THE BENEFIT OF BUSINESS ADDITIONS HAS NOT B EEN ALLOWED WHILE COMPUTING THE NET ASSESSABLE INCOME FROM ALL SOURCES. 8. THAT THE LD. CIT(A) HAS ERRED IN TREATING THE AD DITIONS TO THE INCOME AMOUNTING TO RS.1 00 000/- AGAINST TH E HOUSEHOLD EXPENSES. 9. THAT THE APPELLANT RESERVES THE RIGHT TO ADD AM END OR WITHDRAW ANY OF THE GROUNDS OF APPEAL. 3. IN GROUND NO.1 THE ASSESSEE CONTENDED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATION OF IN COME FROM REAL ESTATE BUSINESS AT RS.1 50 000/- AGAINST THE R ETURNED INCOME OF RS.52231/-. THE RELEVANT FINDINGS OF THE LD. CIT(A) IN THIS REGARD ARE REPRODUCED HEREUNDER: 4.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION MAD E BY THE APPELLANT AND REASONING GIVEN BY THE AO. IT IS SEEN THAT THE APPELLANT HAS NOT FILED ANY DETAILS BEFORE THE AO WITH REGARD TO HIS INCOME FROM BUSINESS OF PROPERTY DEALING. IF ONE GOES TO THE STATEMENT OF THE APPELL ANT 3 RECORDED BY THE AO IT IS SEEN THAT ALL THE REPLIES ARE EVASIVE. THE APPELLANT HAS NO MORAL GROUND TO SAY T HAT THE AO HAS NOT GIVEN ANY BASIS FOR MAKING THE ESTIMATING IN VIEW OF THE FACT THAT THE APPELLANT H IMSELF HAS NOT DISCHARGED THE ONUS ON HIM TO PROVE HIS INC OME. I AGREE WITH THE AO THAT INCOME SHOWN FROM BUSINESS OF PROPERTY DEALING BEING IN ODD FIGURE INDICATE THAT THE SAME IS BASED ON SOME COMPUTATION WHICH THE APPELLA NT DOES NOT WANT TO DISCLOSE. IT IS NOT BELIEVABLE THA T THE APPELLANT DOES NOT HAVE THE RECORD OF THE TRANSACTI ONS OF PROPERTY DEALING ENTERED BY HIM. AS THE APPELLANT H AS FAILED TO GIVE ANY INFORMATION WITH REGARD TO HIS I NCOME FROM THE BUSINESS OF PROPERTY DEALING THE AO IS JU STIFIED IN ESTIMATING THE APPELLANT'S INCOME AT RS.1 50 000 /-. THIS GROUND OF APPEAL IS DISMISSED. 4. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND THE RELEVANT RECORD. HAVING REGARD TO THE FACT- SITUATION OF THE PRESENT CASE AND IN THE INTEREST O F JUSTICE WE DEEM IT FIT TO REDUCE THE REAL ESTATE BUSINESS INCO ME FROM RS.1 50 000/- TO RS.50 000/-. THEREFORE THE ASSES SEE GETS PARTIAL RELIEF AND THIS GROUND OF APPEAL OF THE ASS ESSEE IS PARTLY ALLOWED. 5. IN GROUND NO. 2 THE ASSESSEE CONTENDED THAT THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS.30 00 0/- ON ACCOUNT OF COMMISSION OF SHEETAL JEWELLERS. THE RE LEVANT PART OF THE FINDINGS OF THE LD. CIT(A) IS REPRODUCED HER EUNDER FOR PROPER APPRECIATION OF THE FACTS: 5.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION MAD E BY THE APPELLANT AND ALSO THE REASONING GIVEN BY THE A O FOR ESTIMATING THE APPELLANT'S INCOME AND ALSO FOR TREA TING THE SAME AS DERIVED FROM M/S SHEETAL JEWELLERS FIRM AS AGAINST SHOWN BY THE APPELLANT AS FROM M/S SHEETAL 4 JEWELLERS AS A PROPRIETARY CONCERN. IT IS SEEN THAT NO RECORD WITH REGARD TO COMMISSION INCOME RECEIVED FR OM M/S SHEETAL JEWELLERS HAS BEEN KEPT BY THE APPELLAN T. THEREFORE THE AO IS JUSTIFIED IN MAKING AN ESTIMAT E OF THE INCOME DERIVED THEREFROM. THE AO HAS ESTIMATED THE APPELLANT'S INCOME AT RS.1 08 000/- AS AGAINST RS.60 000/- SHOWN BY THE APPELLANT. THE ESTIMATE HOWEVER APPEARS TO BE ON THE HIGHER SIDE AND THE SA ME IS RESTRICTED TO RS.90 000/-. AS REGARDS THE APPELLAN T'S CONTENTION THAT THE INCOME HAS BEEN DERIVED IN THE INDIVIDUAL CAPACITY AND NOT FROM THE FIRM THE SAME APPEARS TO BE VALID. THEREFORE THE AO'S FINDING TH AT THE INCOME HAS BEEN DERIVED BY THE APPELLANT AS PARTNER AND NOT AS PROPRIETOR IS HELD TO BE WITHOUT ANY BASIS. THE EXISTENCE OF A FIRM DOES NOT IN ITSELF PROVE THAT T HE BUSINESS HAS BEEN CARRIED OUT BY IT. THERE IS NO EV IDENCE ON RECORD TO SHOW THAT THE BUSINESS WAS CARRIED ON BY THE FIRM. MOREOVER THE SAME INCOME HAS BEEN ASSESSED A S DERIVED FROM PROPRIETARY CONCERN IN THE IMMEDIATELY PRECEDING YEAR IN ASSESSMENT FRAMED U/S 143(3) AS INFORMED BY THE ASSESSEE. MOREOVER THERE IS MERIT IN APPELLANT'S SUBMISSION THAT IF THE INCOME IS TREATE D AS DERIVED FROM THE FIRM THEN THE SAME SHOULD BE TAXED IN THE HANDS OF THE FIRM AND NOT THE PARTNER AS DONE BY TH E AO. IN VIEW OF THE AFORESAID DISCUSSION THE ADDITION M ADE ON ACCOUNT OF COMMISSION INCOME FROM SALE OF JEWELLER Y IS RESTRICTED TO RS.30 000/- AS AGAINST RS.48 000/-MAD E BY THE AO AND IT IS HELD THAT THE INCOME HAS BEEN DERI VED BY THE CAPACITY OF PROPRIETOR AND NOT THE PARTNER. THI S GROUND OF APPEAL IS PARTLY ALLOWED. 6. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND THE RELEVANT RECORD AND ARE OF THE OPI NION THAT THE ENDS OF JUSTICE WOULD BE SERVED BY RESTRICTING THE ADDITION FROM RS.30 000/- TO RS.10 000/- ON ACCOUNT OF COMMI SSION OF 5 SHEETAL JEWELLERS. ACCORDINGLY THIS GROUND OF APP EAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN GROUND NO. 3 THE ASSESSEE CONTENDED THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.50 00 0/- ON ACCOUNT OF INVESTMENT IN FDRS. THE RELEVANT FINDING S OF THE LD. CIT(A) ARE REPRODUCED HEREUNDER ; 6.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION MAD E BY THE APPELLANT AND ALSO THE REASONING GIVEN BY THE AO FO R MAKING THE ADDITION. I AGREE WITH THE AO THAT THE EXPLANATION OFFERED BY THE APPELLANT CANNOT BE BELIEVED IN VIEW OF THE FACT T HAT THE APPELLANT INITIALLY WAS UNABLE TO GIVE THE NAME AND ADDRESS O F THE PERSON/PERSONS FROM WHOM THE FRIENDLY LOANS HAVE BEEN TAKEN TO MAK E THE INVESTMENT IN THE FDR. MOREOVER THE APPELLANT HIMSELF HAD STATED ON OATH DURING THE COURSE OF SURVEY U/S 133A ON 14 03.2007 THAT HE HAS NOT BORROWED ANY FUNDS OTHER THAN HAVING OVERDRAFT FACILITY WITH ALL AHABAD BANK TO THE EXTENT OF RS.50 000/-. MOREOVER IT IS AGAINST ALL HUMAN PROBABILITIES THAT A PERSON WILL RAISE LOANS TO MAKE INVESTMENT I N THE FDRS. IT ALSO DOES NOT APPEAL TO LOGIC THAT ANYBODY WOULD GIVE FRIENDL Y LOAN - INTEREST FREE LOAN - TO A PERSON TO MAKE INVESTMENT AND EARN INCO ME THEREON. THE APPELLANTS' EXPLANATION IS THEREFORE REJECTED AND T HE ADDITION MADE IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 8. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND THE RELEVANT RECORD AND FIND NO INFIRM ITY IN THE FINDINGS OF THE LD. CIT(A). THE CIT(A) ON APPRECI ATION OF THE FACT-SITUATION OF THE CASE RECORDED REASONS-BASED FINDINGS IN THE MATTER. THEREFORE WE DONT FIND ANY INFIRMITY IN SUCH FINDINGS AND HENCE THE SAME ARE CONFIRMED AND THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 6 9. IN GROUND NO. 4 THE ASSESSEE CONTENDED THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.4 43 808/- ON ACCOUNT OF INVESTMENT MADE BY THE EXISTING ASSESSEE. SIMILA RLY IN GROUND NOS. 5 & 6 THE ASSESSEE CONTENDED THAT CIT( A) ERRED IN CONFIRMING ADDITION OF RS.21 208/- AND 86 920/- RESPECTIVELY. THE LD. CIT(A) HAS MADE THE FOLLOWIN G FINDINGS IN THIS REGARD : 7.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND FIND NO MERIT IN THE SAME. IT IS SEEN THAT SMT. ANUPAM VERMA DID NOT APPEAR BEFORE THE AO WHEN THE REPORT OF THE INSPECTOR INDICATING THAT SHE IS NOT CARRYIN G OUT ANY TUITION WORK WAS CONFRONTED TO HER. THE AO IS JUSTIFIED TO HOLD THAT THE ABOVE MENTIONED INVESTMENTS HAVE BEEN MADE OUT OF UNDISCLOSED INCOME OF THE APPELLANT. THE APPELLANT S CONTENTION THAT SMT. ANUPAM VERMA IS AN EXISTING ASSESSEE DOES NOT HELP HIM IN VIEW OF THE REPORT OF THE INSPECTOR THAT SHE IS NOT CARRYING OUT ANY TUITION WORK WHICH HAS NOT BEEN C ONTROVERTED EITHER BY THE BY APPELLANT OR SMT. ANUPAM VERMA TH OUGH A SPECIFIC OPPORTUNITY IN THIS REGARD WAS GIVEN. THE ADDITION MADE IN THIS REGARD IS THEREFORE CONFIRMED. THIS G ROUND OF APPEAL IS DISMISSED. 9.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE FACTS AS BROUGHT OUT IN THE A SSESSMENT ORDER. THE APPELLANT'S SUBMISSION THAT THE INVESTM ENT OF RS.2 50 000/- HAS BEEN REFLECTED IN THE CASH FLOW S TATEMENT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS ACCEPTABLE TO THE EXTENT THAT AFTER ACCOUNTING FOR THESE TWO INVESTMENTS THE APPELLANT WAS SHORT OF CASH BY RS.86 920/-. THEREFORE THE ADDITION OF RS.2 50 000 /- MADE AS PER PARA (III) PAGE 9 OF THE ASSESSMENT ORDER IS DELETED. HOWEVER AS REGARD THE BALANCE INVESTMENT OF RS.21 208/- SOUGHT TO BE EXPLAINED IN THE HANDS OF SMT. ANUPAM VERMA THE SAME IS REJECTED AS IT HAS ALREADY BEEN HELD T HAT SMT. ANUPAM VERMA HAD NO INDEPENDENT SOURCE OF INCOME. THEREFORE ADDITION OF RS.21 208/- IS UPHELD. SIMI LARLY THE ADDITION OF RS.86 920/- THE SAME IS ALSO UPHELD BEI NG UNEXPLAINED INVESTMENT. THUS THE GROUND OF APPEAL NO. 8 IS PARTLY ALLOWED AND GROUND NO. 9 IS DISMISSED. 10. HAVING REGARD TO THE FACTS OF THE CASE AND THE RIVAL SUBMISSIONS WE ARE OF THE OPINION THAT THE ISSUES IN THESE GROUNDS OF APPEAL NEED FURTHER INVESTIGATION & V ERIFICATION FOR PROPER DISPOSAL AND HENCE THE SAME ARE RESTOR ED TO THE 7 FILE OF AO FOR THE PURPOSE OF ADJUDICATING THE ISS UES AFRESH ACCORDING TO LAW AND AFTER AFFORDING OPPORTUNITY TO THE ASSESSEE. THEREFORE GROUND NOS. 4 5 AND 6 ARE AL LOWED FOR STATISTICAL PURPOSES ONLY. 11. IN GROUND NO. 7 THE ASSESSEE CONTENDED THAT THE BENEFIT OF BUSINESS ADDITIONS HAD NOT BEEN ALLOWED WHILE CO MPUTING THE NET ASSESSABLE INCOME FROM ALL SOURCES. THIS G ROUND OF APPEAL WAS NOT RAISED BEFORE THE CIT(A) AS IS EVID ENT FROM THE PERUSAL OF THE RELEVANT RECORD. IT IS FURTHER ADDED THAT THE LD. 'AR' DID NOT ARGUE THIS GROUND IN THE COURSE OF PRE SENT APPELLATE PROCEEDINGS. THEREFORE HAVING REGARD TO THE FACT- SITUATION THIS GROUND OF APPEAL IS DISMISSED. 12. GROUND NO. 8 WAS NOT PRESSED. THEREFORE THIS G ROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 13. GROUND NO. 9 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 14. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29THFEB. 2012 . SD/- SD/- (H.L.KARWA) (MEHA R SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 29 TH FEB. 2012. POONAM COPY TO: THE APPELLANT THE RESPONDENT THE CIT(A) CIT DR ASSISTANT REGISTRAR ITAT CHANDIGARH