ACIT, Patiala v. Sh. Yadwinder Kumar Sharma, Zirakpur

ITA 937/CHANDI/2013 | 2008-2009
Pronouncement Date: 07-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 93721514 RSA 2013
Assessee PAN AOAPS4926B
Bench Chandigarh
Appeal Number ITA 937/CHANDI/2013
Duration Of Justice 1 year(s) 1 month(s) 4 day(s)
Appellant ACIT, Patiala
Respondent Sh. Yadwinder Kumar Sharma, Zirakpur
Appeal Type Income Tax Appeal
Pronouncement Date 07-11-2014
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 07-11-2014
Date Of Final Hearing 30-10-2014
Next Hearing Date 30-10-2014
Assessment Year 2008-2009
Appeal Filed On 03-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI T.R.SOOD ACCOUNTANT MEMBER ITA NO.937/CHD/2013 ASSESSMENT YEAR: 2008-09 THE A.C.I.T. V SHRI YADWINDER KUMAR SHARMA CENTRAL CIRCLE VILLAGE - LOHGARH PATIALA. WARD NO. 6 N.A.C. ZIRAKPUR. PAN: AOAPS4926B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 30.10.2014 DATE OF PRONOUNCEMENT : 07.11.2014 O R D E R PER BHAVNESH SAINI JM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LD. CIT(APPEALS)-I LUDHIANA DATED 31.07.2013 FOR ASSESS MENT YEAR 2008-09 ON THE FOLLOWING GROUNDS :- 1. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS W HILE DELETING THE ADDITION OF RS. 60 000/- MADE ON ACCOU NT OF LOW HOUSEHOLD WITHDRAWALS KEEPING IN VIEW THE SPECIFIC FINDINGS GIVEN IN THE ASSESSMENT ORDER. 2. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS WHILE DELETING THE ADDITION OF RS.9 00 000/- MADE ON ACCOU NT OF UNEXPLAINED CREDIT ENTRIES IN THE BANK ACCOUNT WIT HOUT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT JUSTIFY CREDIT ENTRIES IN THE BANK ACCOUNT DURING THE COURSE OF ASSESSMENT PROC EEDINGS. 3. THE LD. CITCA) HAS ERRED BOTH IN LAW AND ON FACTS WH ILE DELETING THE ADDITION OF RS.1 61 544/- ON ACCOUNT OF UNEXPLAINED CASH FOUND FROM THE ASSESSEE'S PREMISES DURING THE COURSE OF SEARCH (I/5 TH OF RS.8 O7 72O/-} SINCE FIVE DIRECTORS RESIDE IN TH E SAME PREMISES) WITHOUT APPRECIATING THE FACTS RECOR DED BY THE A.O. THAT THE ASSESSEE FAILED TO PRODUCE DOCUMENTAR Y EVIDENCE 2 IN THIS REGARD DURING THE ASSESSMENT PROCEEDINGS. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROU NDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSE D OFF. 5. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE AO BE RESTOR ED. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO.1 ASSESSING OFFICER MADE ADDITION O F RS. 60 000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. THE ASSESSING OFFICER IN THIS REGARD HAS BROUGHT ON RE CORD A LIST OF VALUABLE ITEMS FOUND DURING THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISES OF THE ASSESSEE WHICH SUGGESTE D THAT ASSESSEE WAS ENJOYING A VERY HIGH STANDARD OF LIVIN G. THE ASSESSEE EXPLAINED THAT AMOUNT OF RS. 12 000/- PER MONTH HAS BEEN WITHDRAWN BY HIM ALONGWITH WITHDRAWALS MADE INDEPENDENTLY BY HIS BROTHER AND FATHER AS THEY HAD BEEN RESIDING JOINTLY IN THE SAME PREMISES. THE WITHDRA WAL OF RS. 1 44 000/- WAS CONSIDERED INADEQUATE BY THE ASSESSI NG OFFICER CONSIDERING THE RESIDENCE OF THE ASSESSEE TO BE EQU IPPED WITH ELECTRONIC ITEMS SUCH AS AC TV GENERATOR ETC. TH E ASSESSING OFFICER THEREFORE ESTIMATED HOUSEHOLD EXPENSES AT RS. 17 000/- PER MONTH AND MADE ADDITION OF RS. 60 000/-. THE A SSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND IT WAS SUBMITTED THAT DURING THE COURSE OF SEARCH NO MATE RIAL HAS BEEN FOUND FOR INCURRING ANY OTHER EXPENSES OR OTHE R HOUSEHOLD EXPENSES. THE ADDITION IS MADE ON ESTIMATE BASIS W ITHOUT ANY MATERIAL FOUND AGAINST THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO FAILED TO TAKE INTO CONSIDERATION OTHER HOUSEH OLD EXPENSES 3 INCURRED BY OTHER FAMILY MEMBERS. THE DETAILS AND CASH-FLOW STATEMENTS WERE ALSO FILED TO SHOW THAT ADDITION IS UNJUSTIFIED. THE ASSESSING OFFICER DID NOT CONSIDER THAT ASSESSE E WAS LIVING IN JOINT FAMILY. WITH REGARD TO VALUABLE ITEMS INS TALLED IN THE NEWLY CONSTRUCTED KOTHI JOINTLY HELD BY THE FAMILY IT WAS EXPLAINED THAT THIS KOTHI WAS CONSTRUCTED BY M/S N. K.SHARMA ENTERPRISES LTD. AND M/S B.N.SHARMA BUILDERS AND PR OPER AGREEMENT WAS ENTERED INTO FOR CONSTRUCTION AND INS TALLATION AND ALL THE EXPENSES HAVE BEEN DEBITED IN THE BOOKS OF ACCOUNT. IT WAS THEREFORE SUBMITTED THAT ADDITION IS WHOLLY U NJUSTIFIED. 4. THE LD. CIT(APPEALS) CONSIDERING THE HOUSEHOLD EXPENSES JOINTLY CONTRIBUTED BY OTHER FAMILY MEMBERS FOUND T HAT ADDITION ON ESTIMATE BASIS IS WHOLLY UNJUSTIFIED AND ACCORDI NGLY DELETED THE ADDITION. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE AR E OF THE VIEW THAT PART ADDITION IS SUSTAINABLE ON THIS ISSU E. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT IN AS SESSMENT YEAR 2004-05 THE LD. CIT(APPEALS) SUSTAINED THE ADDITIO N OF RS. 36 000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS IN THE CASE OF THE ASSESSEE AND INADVERTENTLY REVENUE HAS PREFERRE D APPEAL BEFORE THE TRIBUNAL IN ITA 1131/2012 AND THE TRIBUN AL DISMISSED THIS GROUND OF APPEAL OF THE REVENUE BECA USE LD. CIT(APPEALS) HAS NOT DELETED THE ADDITION BUT IN FA CT UPHELD THE ADDITION. THE ASSESSEE HAS THEREFORE SUBMITTED T HAT SINCE ADDITION OF RS. 36 000/- ON ACCOUNT OF LOW HOUSEHOL D WITHDRAWAL HAS NOT BEEN CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL THEREFORE TO THAT EXTENT ADDITION MAY BE SUSTAINED . 4 6. ON GOING THROUGH THE SUBMISSIONS OF THE PARTIES AND FINDINGS OF THE LD. CIT(APPEALS) IT IS CLEAR THAT ASSESSEE HAS FILED COMPLETE DETAILS OF HOUSEHOLD EXPENSES FOR SE LF AND OTHER FAMILY MEMBERS BEFORE THE AUTHORITIES BELOW. OTHER EXPENSES ON LIC PREMIUM ELECTRICITY EXPENSES TELEPHONE EXPENS ES ETC. WERE ALSO EXPLAINED SEPARATELY. IT THEREFORE STANDS E STABLISHED ON RECORD THAT ALL OTHER FAMILY MEMBERS OF THE FAMILY ALSO JOINTLY CONTRIBUTED TO THE HOUSEHOLD EXPENSES. THEREFORE ON MERE ESTIMATE THE ADDITION OF RS. 60 000/- WAS WHOLLY U NJUSTIFIED. HOWEVER IN THE ASSESSMENT YEAR 2004-05 LD. CIT(AP PEALS) SUSTAINED THE ADDITION OF RS. 36 000/- ON WHICH ASS ESSEE HAS ADMITTEDLY DID NOT FILE APPEAL BEFORE TRIBUNAL AND LD. COUNSEL FOR THE ASSESSEE CONCEDED TO THAT FACT THAT ADDITION OF RS. 36 000/- MAY BE SUSTAINED. WE MODIFY THE ORDER OF THE LD. CI T(APPEALS) IN DELETING THE ENTIRE ADDITION AND DIRECT TO SUSTAIN ADDITION OF RS. 36 000/- ON THIS ISSUE. IN THE RESULT THIS GROUND OF THE REVENUE IS PARTLY ALLOWED. 7. ON GROUND NO. 2 ASSESSING OFFICER OBSERVED THAT THE CREDIT ENTRY OF RS. 9 LACS DATED 11.07.2007 HAS NOT BEEN E XPLAINED BY ASSESSEE THEREFORE ADDITION WAS MADE AGAINST THE A SSESSEE. THE ASSESSING OFFICER FOUND THAT THERE WAS CREDIT ENTRY IN THE BANK ACCOUNT OF THE ASSESSEE AND IN THE ABSENCE OF EXPLA NATION ADDITION WAS MADE AS NOTED ABOVE. THE ASSESSEE SUB MITTED BEFORE LD. CIT(APPEALS) THAT ON 03.04.2007 ASSESSE E MADE A BANK DRAFT OF RS. 9 LACS FOR THE PURPOSE OF LAND AU CTION BUT THE ASSESSEE WAS NOT SUCCESSFUL IN SUCH AUCTION THEREF ORE DRAFT WAS CANCELLED AND SAME ENTRY WAS CREDITED TO HIS SAVING BANK ACCOUNT. CREDIT ENTRY WAS THEREFORE FULLY EXPLAI NED. THE 5 SUBMISSION OF THE ASSESSEE WAS FORWARDED TO THE ASS ESSING OFFICER FOR FILING COMMENTS AND ADMISSION OF THE AD DITIONAL EVIDENCE. THE ASSESSING OFFICER HOWEVER SUBMITTED THAT THE CREDIT ENTRY IN THE BANK ACCOUNT WAS NOT EXPLAINED AT THE ASSESSMENT STAGE. 8. THE LD. CIT(APPEALS) CONSIDERING THE EVIDENCE O N RECORD AND SUBMISSION OF THE ASSESSEE ADMITTED THE ADDITIO NAL EVIDENCE AND DELETED THE ADDITION. HIS FINDINGS UNDER PARA 1 5 & 16 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 15. I HAVE CONSIDERED THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCE WHICH IS IN THE FORM OF CASH FL OW STATEMENT WHICH IS BASED UPON THE WITHDRAWALS/DEPOSITS MADE BY THE ASSESSEE IN HIS BANK ACCOUNTS WHICH STAND REFLECTED IN THE RETURN O F INCOME FILED BY THE ASSESSEE. IT IS ALSO SEEN THAT THE ASSESSEE WAS GIVEN OPPORTUNITIES AT THE TIME OF ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER TO EXPLAIN THE DOCUMENT SEIZED BUT NO EXPLANATION COULD BE FILED AT THAT TIME FOR REASONS DETAILED IN ASSESSEE'S SUBMISSION BEFORE ME. THE EVIDENCE IN THE FORM OF CASH FLOW STATEMENT PROPOSED TO BE FILE D NOW HAS NOT BEEN CREATED AFRESH OR IS NOT BASED UPON ANY NEW DOCUMENTS AND THEREFORE ONLY GIVES AN OPPORTUNITY TO THE ASSESSEE O EXPLAIN THE IMPUGNED SEIZED DOCUMENTS. THE DENIAL OF ADMISSION OF ADDITIONAL EVIDENCE WOULD MEAN THAT WORKING OUT OF CORRECT TAXABLE INCOME ON THE BASIS OF VARIOUS DOCUMENTS WOULD GET COMPROMISED. IT MEANS THAT THE EXPLANATION OF THE ASSESSEE BASED UPON HIS BANK ACCOUNTS IS NECESSARY TO ADJUDICATE THE GROUNDS OF APPEAL. HON'BLE PUNJAB & HARYANA HIGH COURT THE CASE OF ARJAN DASS VS. CIT 112 ITR 480 HAS HELD AS UNDER: 'BOTH THE EXTREME VIEWS THAT THE AAC IN DEALING WI TH AN APPEAL AGAINST AN ASSESSMENT U/S 144 HAS NO POWER OR HAS UNLIMITED POWER TO RECEIVE ADDITIONAL EVIDENCE ARE UNTENABLE. THE ASSESSEE NO DOUBT CANNOT INSIST ON ADDUCING ADDITIONAL EVIDENCE BUT THERE IS NO BAR ON THE RECEIPT OF ADDITIONAL EVIDEN CE BY THE AAC IF HE CONSIDERS SUCH EVIDENCE NECESSARY FOR DISPOSING OF THE APPEAL BEFORE HIM. HE MAY DO S O IF HE THINKS THAT THE ITO HAD ACTED WITHOUT MATERIA L OR THAT HE HAD ACTED ARBITRARILY OR CAPRICIOUSLY. H E 6 MAY DO SO IF HE CONCLUDES THAT THE JUDGEMENT OF THE ITO WAS NOT PROPERLY EXERCISED OR THAT THE QUANTUM WAS NOT PROPERLY AND FAIRLY ARRIVED AT. HE MAY DO S O FOR THE PURPOSE OF CLARIFICATION OF POINTS ARISING OUT OF THE VERY ORDER OF ASSESSMENT MADE BY THE ITO. HE MAY DO SO FOR A VARIETY OF REASONS DEPENDING UPON THE FACTS AND CIRCUMSTANCES OF DIFFERENT CASES. BUT THIS HE CAN DO ONLY IF HE CONSIDER IT NECESSARY FOR DISPOSING OF THE APPEAL - GIRDHAR JAVER & CO. VS CI T (1953) 24 ITR 540 (BOM): TC7R 273 AND SUNDERMULL & CO. VS. CIT (1978) 112 ITR 512 (AP) : TCR.256 CONCURRED WITH. IN VIEW OF THE ABOVE DETAILED REASONS THE ADDITIONAL EVIDENCE IN THE FORM OF BANK ACCOUNT ENTRIES EXPLANATION/CASH FLOW STATEMENT IS ALLOWED TO BE CONSIDERED. 16. THE APPELLANT HAS EXPLAINED EACH ENTRY OF AMOUNT CREDITED IN HIS BANK ACCOUNT BY PROVIDING TH E SUPPORTING EVIDENCE WHICH HAS NOT BEEN CONTRADICTED BY THE ASSESSING OFFICER. THE MAJORITY OF THE ENTRI ES PERTAIN TO RECEIPT OF SALARY BY THE ASSESSEE AND TH E SAME STANDS REFLECTED IN THE INCOME TAX RETURN OF T HE APPELLANT AS WELL AS IN THE BOOKS OF ACCOUNTS OF RESPECTIVE EMPLOYER. IN VIEW OF THE ABOVE THE APPELLANT HAS DISCHARGED THE ONUS CAST UPON HIM U/S 68 AND THERE IS NO BASS TO TREAT THESE ENTRIES AS UNEXPLAINED TO WARRANT AN ADDITION. THE SAME IS THEREFORE DIRECTED TO BE DELETED. 9. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESSEE HAS FILED LEDGER ACCOUNT OF THE ASSESSEE AND CERTIF ICATE FROM HDFC BANK AND COPY OF THE BANK ACCOUNT TO SHOW THAT DRAFT WAS PREPARED OF RS. 9 LACS ON 03.04.2007 AND THE MANAGE R CHEQUES OF THE SAME AMOUNT WAS PAID IN THE ACCOUNT OF THE A SSESSEE ON 11.07.2007. THUS THE BANK ENTRY IS FULLY EXPLAINE D BY THE ASSESSEE. THERE IS NO INFIRMITY IN ADMITTING ADDIT IONAL EVIDENCE BY THE LD. CIT(APPEALS) ON WHICH ALSO NO SPECIFIC GROUND HAS BEEN TAKEN BY THE REVENUE. GROUND NO. 2 HAS THUS NO MERIT AND IS DISMISSED. 7 10. ON GROUND NO. 3 REVENUE CHALLENGED THE DELETIO N OF ADDITION OF RS. 1 61 544/-. THE ASSESSING OFFICER MADE THIS ADDITION ON THE GROUND THAT ASSESSEE DID NOT EXPLAI N THE CASH FOUND FROM THE RESIDENCE OF THE ASSESSEE. IT WAS S EEN THAT AMOUNT OF RS. 8 07 720/- WAS FOUND FROM THE RESIDEN TIAL PREMISES OF THE ASSESSEE AND SAME WAS EXPLAINED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS AS BEING THE RECEI PT ON ACCOUNT OF PAYMENT OF FLAT NO. 267 IN SAVITRI TOWER S WHICH WAS DELIVERED AT RESIDENCE. THE ASSESSING OFFICER REJE CTED THE EXPLANATION OF THE ASSESSEE. THERE WAS NO CONFIRMA TION FROM THE CONCERNED PERSON HAVING BEEN FILED. IT WAS SUBMITT ED BEFORE LD. CIT(APPEALS) THAT THIS CASH BELONG TO M/S N.K.SHARM A ENTERPRISES PVT. LTD. OF WHICH FAMILY MEMBERS ARE D IRECTORS. THE AMOUNT HAS BEEN RECEIVED JUST A DAY BEFORE FROM ONE CUSTOMER OF THE COMPANY WHO MADE PAYMENT AT RESIDEN CE OF THE DIRECTORS ON ACCOUNT OF PURCHASE OF PLOT NO. 267 S AVITRI TOWERS. THE RECEIPT TO THAT EFFECT WAS ALSO ISSUED. OWING T O THE SEARCH ON 16.10.2007 THE CASH COULD NOT BE DEPOSITED IN T HE BANK. DUPLICATE COPY OF THE RECEIPT ISSUED TO THE CUSTOME R WAS ALSO FILED. EVEN DURING THE COURSE OF SEARCH SIMILAR E XPLANATION WAS MADE. THEREFORE THERE IS NO FALSE EXPLANATION GIV EN BY THE ASSESSEE. THE ASSESSEE SIMILARLY SOUGHT ADMISSION OF THE ADDITIONAL EVIDENCE. 11. THE LD. CIT(APPEALS) AFTER CALLING FOR THE COMM ENTS OF THE ASSESSING OFFICER ON ADDITIONAL EVIDENCE DELETED T HE ADDITION. 8 HIS FINDINGS IN PARA 19 OF THE IMPUGNED ORDER ARE R EPRODUCED AS UNDER : 19. DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSING OFFICER WAS ASKED WITH COMMENTS ON THE ASSESSEE'S SUBMISSION ON THIS ISSUE AND THE ASSESSING OFFICER ONLY SUBMITTED THAT ASSESSMENT ORDER WAS BEIN G RELIED UPON. I HAVE CONSIDERED THE BASIS OF ADDITION MAD E BY THE ASSESSING OFFICER THE ARGUMENTS OF THE AR AND THE EVIDENCE IN THE FORM OF RECEIPT ISSUED BY N.K. SHARMA ENTERPRISES LTD. DATED 15/10/2007 WHEREIN AN AMO UNT OF RS. 8 LACS HAD BEEN RECEIVED IN CASH FROM SH. KULWINDER SINGH IN RESPECT OF SALE OF FLAT NO. 267 IN SAVITRI TOWERS. IT IS SEEN THAT THE ASSESSEE HAD G IVEN THE SAME EXPLANATION AT THE TIME OF RECORDING OF HI S STATEMENT DURING THE SEARCH PROCEEDINGS WHICH MEANS T HAT THE STAND OF THE ASSESSEE IS CONSISTENT AND SUBJECT T O VERIFICATION SINCE THE DAY OF MAKING OF THE STATEMENT A T THE TIME OF THE SEARCH. IT IS ALSO MATTER OF RECORD THA T NO ENQUIRIES HAVE BEEN CONDUCTED EITHER BY ADIT(INV.) OR THE ASSESSING OFFICER TO BRING ON RECORD ANY EVIDENC E TO ESTABLISH THAT THE CLAIM OF THE AASESSEE IN THIS REG ARD WAS INCONSISTENT WITH RECORDS. THE AMOUNT OF CASH FO UND AT THE RESIDENCE THEREFORE CAN NOT BE CONSIDERED AS UNEXPLAINED AND DIVIDED IN THE HANDS OF FIVE BROTHERS AND TREATED AS UNEXPLAINED. THE ADDITION MADE IS THEREFOR E DIRECTED TO BE DELETED . 12. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE D O NOT FIND ANY MERIT IN THIS GROUND OF THE REVENUE. 13. THE LD. DR MERELY RELIED UPON ORDER OF THE ASSE SSING OFFICER. THE EXPLANATION OF THE ASSESSEE IS JUST A ND PROPER THAT PRIOR TO ONE DAY BEFORE SEARCH CASH WAS RECEIVED F OR SALE OF THE FLAT WHICH WAS EXPLAINED THROUGH THE RECEIPT ISSUED TO THE CUSTOMER AND SIMILAR EXPLANATION WAS GIVEN AT THE T IME OF RECORDING OF THE STATEMENT OF ASSESSEE DURING THE C OURSE OF SEARCH. THE LD. CIT(APPEALS) THEREFORE ON PROPER APPRECIATION 9 OF FACTS AND MATERIAL ON RECORD RIGHTLY DELETED TH E ADDITION. THIS GROUND OF THE REVENUE IS THEREFORE DISMISSED. 14. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH NOVEMBER 2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH NOVEMBER 2014. POONAM COPY TO: THE APPELLANT THE RESPONDENT THE CIT(A) THE CIT DR ASSISTANT REGISTRAR ITAT CHANDIGARH