Shri. N.V. Jayaram, Bangalore v. ITO, Bangalore

ITA 801/BANG/2010 | 1994-1995
Pronouncement Date: 23-03-2011 | Result: Dismissed

Appeal Details

RSA Number 80121114 RSA 2010
Bench Bangalore
Appeal Number ITA 801/BANG/2010
Duration Of Justice 9 month(s) 7 day(s)
Appellant Shri. N.V. Jayaram, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-03-2011
Date Of Final Hearing 22-02-2011
Next Hearing Date 22-02-2011
Assessment Year 1994-1995
Appeal Filed On 15-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO. 801/BANG/2010 ASSESSMENT YEAR : 1994-95 SHRI N.V. JAYARAM # 686 KEMPEGOWDA LAYOUT BANASHANKARI III STAGE BANGALORE. : APPELLANT VS. THE INCOME TAX OFFICER WARD 5(2) BANGALORE. : RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL.CIT(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF THE LD. CIT (A)-II BANGALORE IN ITA NO: 77/W 5( 2)/CIT (A)-II/08-09 DATED: 1.3.2010 FOR THE ASSESSMENT YEAR 1994-95 . 2. OUT OF FOUR GROUNDS RAISED BY THE ASSESSEE IN H IS GROUNDS OF APPEAL GROUND NOS: 1 AND 4 DO NOT SURVIVE FOR ADJUDICATION SINCE NO SPECIFIC ISSUES HAVE BEEN RAISED IN THEM. GROUND NO.3 IS NOT MAINTAINABLE AS ITA NO.801/BANG/10 PAGE 2 OF 7 CHARGING OF INTEREST U/S 234A 234B AND 234C OF THE ACT IS MANDATORY AND CONSEQUENTIAL IN NATURE. THUS THE SOLITARY GROUND SURVIVED FOR ADJUDICATION IS THAT THE CIT (A) WAS NOT JUSTIFIED IN UPHOLDING THE ADD ITION OF RS.2.5 LAKHS AS UN-EXPLAINED INVESTMENT IN SERVICE STATION 3. THE BACK-GROUND OF THE ISSUE IN BRIEF IS THAT THE ASSESSMENT ORDER FOR THE AY UNDER DISPUTE WAS ORIGINALLY CONCLUDED O N 27.3.97 WHICH WAS CHALLENGED BY THE ASSESSEE BEFORE THE CIT (A) WHO H AD CONCEDED TO THE ASSESSEES CLAIM PARTIALLY. ON A FURTHER APPEAL T HE HONBLE TRIBUNAL GAVE A PARTIAL RELIEF TO THE ASSESSEE WHICH WAS CHALLENG ED BY THE REVENUE BEFORE THE HONBLE HIGH COURT. THE JURISDICTIONAL HIGH COURT IN ITS WISDOM (IN ITA NO: 253/2001 DT: 4.9.2006) SET ASIDE THE IM PUGNED ORDERS AND REMITTED BACK THE MATTER TO THE TRIBUNAL FOR REHEAR ING AND PASS AN ORDER IN ACCORDANCE WITH LAW. 3.1. IN PURSUANCE THE HONBLE TRIBUNAL IN ITS FINDING IN ITA NO.219/B/1999 DATED: 9.3.2007 AFTER HEARING THE RIV AL PARTIES WITH REGARD TO (I) BANK DEPOSITS OF RS.4.02 LAKHS AND (II) INVESTM ENT IN SERVICE STATION OF RS.2.5 LAKHS HAD OBSERVED THUS 2.3. AFTER HEARING BOTH THE SIDES WE FIND FORCE I N THE SUBMISSION MADE BY LEARNED DR. ALTHOUGH ADDITION HAS BEEN MAD E BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) HOWE VER THIS ASPECT WAS NOT CONSIDERED BY THE AUTHORITIES BELOW. IN CASE THE INVESTMENT HAS BEEN MADE IN THE ASST. YEAR 1995-96 IT IS OBVIOUS THAT NO ADDITION CAN BE MADE IN THE ASST. YEAR 1994 -95. HOWEVER TO VERIFY THE FACTS WE RESTORE THIS ISSUE TO THE A SSESSING OFFICER FOR DECIDING AFRESH IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.801/BANG/10 PAGE 3 OF 7 3.2. IN OBEDIENCE TO THE FINDING OF THE TRIBU NAL THE AO TOOK UP THE ISSUE FOR A FRESH LOOK. AFTER ANALYZING THE PARTIC ULARS FURNISHED BY THE ASSESSEE AND ALSO DEMOLISHING THE ASSESSEES CLAIM BEFORE THE EARLIER BENCH OF THE TRIBUNAL THAT THE PETROL PUMP IN QUESTION STARTED IN THE FY 1994-95 AND THE INVESTMENT IS ALSO MADE IN THAT YEA R AND THEREFORE IF ANY ADDITION IS TO BE MADE IT SHOULD BE IN THE ASST. YE AR 1995-96 AND NOT IN ASST. YEAR 1994-95 THE AO FOR THE DETAILED REASONS RECORDED IN THE IMPUGNED ORDER UNDER CHALLENGE AVERRED THAT (I) THE UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE HAS TO BE CONSIDERED IN HIS INDIVIDUAL HANDS ONLY AND WHICH H AS BEEN RIGHTLY DONE; & (II) THE INVESTMENT MADE FALLS UNDER THE ASSESSMENT YEAR 1994-95 AND NOT FOR 1995-96. 4. AGGRIEVED THE ASSESSEE TOOK UP THE ISSUE AMONG OTHERS WITH THE LD. CIT (A) FOR SUCCOR. DUE CONSIDERATION OF THE A SSESSEES CONTENTIONS AS WELL AS THE REASONING OF THE AO IN HIS IMPUGNED ORD ER THE LD. CIT (A) HAD MADE THE FOLLOWING OBSERVATIONS: 3.3TO BEGIN WITH THE ORIGINAL ASSESSMENT W AS COMPLETED ON 27/3/1997. THE AO HAS ALSO SCRUTINIZE D THE SEIZED PAPERS WHICH REVEAL THAT THE APPELLANT CONSTITUTED A PARTNERSHIP FIRM WITH ANOTHER PARTNER SHRI PRASANNA TO OPEN A P ETROL BUNK. A LETTER WAS ALSO RECEIVED FROM THE INDIAN OIL CORP ORATION LTD. WHICH INDICATES THAT PETROL BUNK BECAME FUNCTIONAL ON 29.3.1994. THE TOTAL INVESTMENT IS SHOWN AT RS.2 50 000/- OUT OF WHICH THE APPELLANTS SHARE OF INVESTMENT WAS RS.1 25 000/-. THE APPELLANT EXPLAINED BEFORE THE AO THAT SOURCES FOR THE SUM OF RS.25 000/- WERE OUT OF HIS SAVINGS AND THE BALANCE OF RS.1 00 000/- WAS FROM BORROWALS. THE AO FURTHER HELD THAT AS PER TH E STATEMENT RECORDED ON 3.2.1995 (ANSWER TO QTN.NO.31) THE APPE LLANT EXPRESSED HIS INABILITY TO FURNISH THE NAME AND ADD RESS OF THE PERSON FROM WHOM HE HAD BORROWED RS.100000/-. EVEN ON SUBSEQUENT OCCASION ALSO THE APPELLANT FAILED TO F URNISH THE NAME AND ADDRESS OF THE SAID PERSON MODE OF RECEIP T OF THE LOAN ITA NO.801/BANG/10 PAGE 4 OF 7 OF RS.100000/- ETC. A SUM OF RS.125000/- WAS CLAIM ED TO HAVE BEEN INVESTED BY THE OTHER PARTNER SHRI PRASANNA AS HIS SHARE IN KALABAIRAVA SERVICE STATION [KSS]. NO EVIDENCE HAS BEEN ADDUCED IN SUPPORT OF THE CONTRIBUTION PURPORTED TO HAVE BEEN MADE BY PRASANNA. OBSERVING THUS THE AO HELD THAT THE ENTIRE INVESTMENT OF RS.250000/- IN KSS HAS BEEN MADE BY T HE APPELLANT AND BROUGHT THE SAME TO TAX IN HIS HANDS. 3.4. THE APPELLANT FURNISHED A COPY OF THE LETTER DT: 13.2.98 ADDRESSED TO THE ITO W-2 MANDYA AT THE TIME OF AS SESSMENT PROCEEDINGS IN THE CASE OF KSS FOR THE AY 95-96 WHE REIN IT WAS STATED AS UNDER: IT IS SUBMITTED THAT ON 22.10.93 THE LAND ON WHICH THE PETROL BUNK IS SITUATED WAS TAKEN ON LEASE FROM SRI K.NARA YANASWAMY BY PAYING A SUM OF RS.2 LAKHS WHICH IS EVIDENCED BY A DEED OF AGREEMENT OF LEASE A COPY OF WHICH IS ENCLOSED HER EWITH FOR YOUR HONOURS PERUSAL. THE SUM OF RS.2 LAKHS WAS PAID A S UNDER: N.V.JAYARAM RS. 20000/- SMT. B.BHARATHI RS.180000/- THE SUM OF RS.20000/- PAID BY SHRI N.V.JAYARAM WHO BECAME A PARTNER IN M/S.KSS WAS RECORDED IN THE BOOKS OF THE FIRM AS THE LAND DEPOSIT. THE BALANCE SUM OF RS.180000/- HAS B EEN SHOWN SMT.B.BHARATHI IN HER RETURN OF INCOME/STATEMENT OF AFFAIRS FILED WITH THE DEPARTMENT A COPY OF WHICH IS ENCLOSED H EREWITH FOR YOUR PERUSAL. 3.5. IN THE BALANCE SHEET AS ON 31.3.1993 AND 31/3 /1994 NO AMOUNT APPEARS AS THE LAND LEASE DEPOSIT OR DEPOSIT S IN KSS. FROM THE FACTS NARRATED ABOVE IT IS OBSERVED THAT WITH REGARD TO THE SOURCES OF INVESTMENT OF RS.250000/- THE APPEL LANT TOOK DIFFERENT STANDS AT DIFFERENT STAGES. EVEN IN THE STATEMENT ON OATH RECORDED ON 3.2.95 HE COULD NOT FURNISH THE NAME A ND ADDRESS OF THE PERSON FROM WHOM THE AMOUNT WAS BORROWED. THUS THE SOURCE OF INVESTMENT OF RS.250000/- REMAINS UNEXPLA INED. THEREFORE I DO NOT FIND INFIRMITIES IN THE AOS FI NDINGS. THE ADDITION OF RS.250000/- IS THEREFORE CONFIRMED. (I) AS PER THE LEASE DEED DATED: 22/10/1993 AND LET TER DT: 13.2.98 IT IS SEEN THAT THE TRANSACTION IN INVESTMENT HAD T AKEN PLACE ON 22.10.93 WHICH FALLS IN THE FY 93-94 AND HENCE TH E AO HAS RIGHTLY TAXED IT IN THE AY 94-95... ITA NO.801/BANG/10 PAGE 5 OF 7 5. AGITATED THE ASSESSEE HAS COME UP WITH THE PRES ENT APPEAL. DURING THE COURSE OF HEARING THE LD. A R HAD REITE RATED MORE OR LESS WHAT WAS PORTRAYED BEFORE THE FIRST APPELLATE AUTHORITY. IN FURTHERANCE AND TO STRENGTHEN HIS ARGUMENT THE LD. A R FURNISHED A PA PER BOOK CONTAINING 1 66 PAGES WHICH CONSIST OF AMONG OTHERS COPIES OF (I) TRIBUNAL ORDERS; (II) HONBLE HIGH COURT; (III) CORRESPONDENCE WITH THE ASSESSING OFFICER ETC. 5.1. ON HER PART THE LD. DR WAS VERY FIRM IN HER URGE THAT THE ASSESSING OFFICER AS WELL AS THE FIRST APPELLATE AU THORITY HAVE GONE TO THE ROOT OF THE ISSUE AND BROUGHT OUT THE FACTS NARRATI NG THE SEQUENCE OF EVENTS WHICH AMPLY DEMONSTRATE THAT THE ASSESSEE HAD FAILE D TO PROVE THE SOURCE FOR HIS ALLEGED INVESTMENT OF RS.2.5 LAKHS. IT WA S THEREFORE FERVENTLY URGED THAT THE FINDINGS OF THE AUTHORITIES BELOW RE QUIRE NO INTERFERENCE AT THIS STAGE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMI SSIONS METICULOUSLY GONE THROUGH THE RELEVANT CASE RECORDS FINDINGS OF THE EARLIER BENCHES AND ALSO THE EVIDENCES ADVANCED BY THE LD. A R DURING T HE COURSE OF HEARING IN THE SHAPE OF A PAPER BOOK (SUPRA). 6.1. AT THE OUTSET WE WOULD LIKE TO RECORD OUR CON SIDERED APPRECIATION THAT THE AO HAD IN FACT BROUGHT ON RECORD THE SEQ UENCE OF EVENTS IN AN ORDERLY AND FAIRLY MANNER. THE REASONING OF THE ASSESSEE WITH REGARD TO THE SOURCE OF INVESTMENT HAS BEEN THAT RS.25000/- W AS OUT OF HIS SAVINGS AND THE BALANCE OF RS.1 LAKH WAS FROM BORROWALS. H OWEVER ON A GLIMPSE OF THE IMPUGNED ORDERS WE FIND THAT THE ASSESSEE H AD FAILED TO FURNISH ANY DOCUMENTARY PROOF FROM WHOM HE HAD BORROWED MONEY. THE OTHER CLAIM ITA NO.801/BANG/10 PAGE 6 OF 7 OF THE ASSESSEE WAS THAT RS.1.25 LAKHS WAS INVESTED BY OTHER PARTNER PRASANNA AS HIS SHARE IN KSS. HOWEVER NO PROOF WO RTH THE NAME HAS BEEN FURNISHED TO STRENGTHEN HIS CLAIM. AS RIGHTLY HIGHLIGHTED BY THE LD. CIT (A) (AT THE COST OF REPETITION) 3.5. IN THE BALANCE SHEET AS ON 31.3.1993 AND 31/3/1994 NO AMOUNT APPEARS AS THE L AND LEASE DEPOSIT OR DEPOSITS IN KSS. FROM THE FACTS NARRATED ABOVE IT IS OBSERVED THAT WITH REGARD TO THE SOURCES OF INVESTMENT OF RS.2500 00/- THE APPELLANT TOOK DIFFERENT STANDS AT DIFFERENT STAGES. EVEN IN THE STATEMENT ON OATH RECORDED ON 3.2.95 HE COULD NOT FURNISH THE N AME AND ADDRESS OF HE PERSON FROM WHOM THE AMOUNT WAS BORROWED THE ASSESSEE HAD FAILED TO ADDUCE ANY PROOF FOR THE SOURCE OF INVEST MENT OF RS.2.5 LAKHS EVEN AT THIS STAGE. 6.2. IN AN OVERALL CONSIDERATION OF THE FAC TS AS DISCUSSED IN THE FORE- GOING PARAGRAPHS WE ARE OF THE CONSIDERED VIEW THA T THE LD. CIT (A) WAS WELL JUSTIFIED IN ARRIVING AT A CONCLUSION THAT THE SOURCE OF INVESTMENT OF RS.2 50 000/- REMAINS UNEXPLAINED. IT IS ORDERED ACCORDINGLY . 7. IN THE RESULT : THE ASSESSEES APPEAL IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH 2011. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 23 RD MARCH 2011. DS/- ITA NO.801/BANG/10 PAGE 7 OF 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.