DCIT-RAnge-1, Gwalior v. Shri Parmanand Agarwal, Chhatarpur

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER IT(SS)A NO.15/AGR/2003 BLOCK PERIOD: 01.04.1989 TO 18.01.2000 DY. COMMISSIONER OF INCOME TAX VS. SHRI PARMANAN D AGRAWAL RANGE-1 GWALIOR. C/O.M/S CHOUDHARY LAXMNDAS SARAF CHOWK BAZAR CHHATARPUR. (PAN : P-720). C.O. NO.22/AGR/2006 (IN IT(SS)A NO.15/AGR/2003) BLOCK PERIOD: 01.04.1989 TO 18.01.2000 SHRI PARMANAND AGRAWAL VS. DY. COMMISSIONER OF INCOME TAX C/O. M/S. CHOUDHARY LAXMNDAS SARAF RANGE-1 GWA LIOR. CHOWK BAZAR CHHATARPUR. (PAN : P-720). (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI HOMI RAJVANSH CIT D.R. ASSESSEE BY : SHRI G.N. PUROHIT ADVOCATE ORDER PER BENCH : THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE HAVE BEEN FILED AGAINST THE ORDER OF THE CIT(A) DATED 14.02.2003. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 1 16 845/- ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF CAPITAL SHOWN. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) ERRED IN DELETING THE ADDITION OF ` 1 13 220/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) ERRED IN DELETING THE ADDITION OF ` 64 170 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SILVER ARTICLE S AND ORNAMENTS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED TO DELETING THE ADDITION OF ` 70 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENDITURE IN THE MARRIAGE OF SON. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 30 500/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF PL OT.. 2. THE GROUND NO.1 OF REVENUES APPEAL AND GROUND N O.1 OF ASSESSEES CROSS OBJECTION RELATE TO THE ADDITION MADE BY THE ASSESSING OFFICE R ON ACCOUNT OF UNEXPLAINED INVESTMENT. 3. THE FACTS RELATING TO THIS ISSUE ARE THAT THE AS SESSEE HAS SHOWN CAPITAL IN HIS BALANCE SHEET AS ON 18.01.2000 AT RS.3 19 446/- WHILE AS PER THE BALANCE SHEET UPTO 31.03.1999 THE CAPITAL SHOWN BY THE ASSESSEE IN THE RETURN WAS RS.2 85 867 /-. THE RETURN FOR THE ASSESSMENT YEAR 1999-2000 WAS SUBMITTED ON 05.01.2000 PRIOR TO THE DATE OF SEARCH. THE ASSESSING OFFICER REDUCED THE SUM OF RS.1 79 726/- OUT OF RS.3 19 446 /- AND MADE THE ADDITION OF RS.1 39 720/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEF ORE THE CIT(A) THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS SHOWN CAPITAL AT RS.2 85 867/- IN THE LAST RETURN FILED PRIOR TO THE DATE OF SEARCH FOR THE ASSESSMENT YEAR 1999-2000 AND HENCE IT CANN OT BE TREATED AS UNDISCLOSED INCOME. IN THE ASSESSMENT YEAR 1999-2000 THE ASSESSEE HAS SHOWN IN COME OF RS.45 980/-. THE ASSESSEE HAS WORKED OUT THE CAPITAL AS ON 18.01.2000 AT RS.3 19 446/- AND THEREFORE NO ADDITION COULD HAVE BEEN MADE. THE CIT(A) REDUCED THE ADDITION TO RS.2 2 875/- BY HOLDING THAT THE SUM OF RS.2 85 867/- WAS IN THE BALANCE SHEET FILED ALONG WITH THE RETURN FOR THE ASSESSMENT YEAR 1999- 3 2000. A SUM OF RS.10 704/- WAS RECORDED IN THE BOO KS OF THE ASSESSEE DURING THE PERIOD 01.04.1999 TO 18.01.2000 AS RECEIVED FROM M/S. CHOU DHARY LAXMAN DAS SARAF AND ACCORDINGLY IT CANNOT ALSO BE ADDED TO THE INCOME OF THE ASSESS EE. THE REVENUE HAS COME IN APPEAL WHILE THE ASSESSEE HAS COME IN CROSS OBJECTION IN SUSTAIN ING THE ADDITION OF RS.22 875/-. 4. BEFORE US THE LD A.R. CONTENDED THAT THE ASSESS EE HAS SHOWN DURING THE YEAR ENDED 31.03.2000 AN INCOME OF RS.33 625/-. THIS INCOME W AS DULY ACCEPTED BY THE ASSESSING OFFICER. IT CANNOT BE SAID THAT THE ASSESSEE WOULD NOT HAVE EARNED ANY INCOME UPTO 18.01.2000. THEREFORE THE ASSESSEE SHOULD BE ALLOWED CREDIT IN THE INCOME WHICH HAD ACCRUED TO THE ASSESSEE UPTO 18.01.2000 AND THAT INCOME CANNOT BE TREATED T O BE THE INCOME FROM UNDISCLOSED SOURCES AS ADDED TO THE CAPITAL OF THE ASSESSEE. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. THIS IS A FACT THAT THE ASSESSEE HAS SUBMITTED RETURN FOR THE ASSESSMENT YEAR 1999-2000 PRIOR TO T HE DATE OF SEARCH CARRIED ON 18.01.2000. ALONG WITH THE RETURN THE ASSESSEE SUBMITTED THE BA LANCE SHEET ALSO. IN THE BALANCE SHEET OPENING CAPITAL SHOWN WAS RS.2 85 867/-. THIS CAPI TAL CANNOT BE REGARDED TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SEC TION 158B(B) OF THE INCOME TAX ACT 1961 (THE ACT HEREINAFTER). THE ASSESSEE HAS RETURNED THE INCOME DURING THE ASSESSMENT YEAR 2000- 01 FROM THE SAME SOURCE AS WERE IN THE EARLIER YEAR AT RS.35 625/-. THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE WOULD HAVE NOT EARNED ANY INCOME FROM THE DISCLOSED SOURCES FROM 01.04.1999 TO 18.01.2000. EVEN ON AVERAGE BASIS IN OUR OPINI ON THE ASSESSEE WOULD HAVE EARNED 4 RS.28 500/- APPROXIMATELY UPTO 18.01.2000. THE CIT (A) HAS ALREADY ALLOWED THE ASSESSEE REDUCED ADDITION IN RESPECT OF THE INTEREST INCOME DURING THE YEAR AMOUNTING TO RS.10 704/-. THEREFORE FURTHER ADDITION HAS TO BE REDUCED BY RS .28 500/- () 10 704/- I.E. BY RS.17 800/-. THUS IN OUR OPINION THE ASSESSEE WILL FURTHER GET A RELIEF OF RS.17 800/-. ACCORDINGLY GROUND NO.1 OF REVENUES APPEAL STANDS DISMISSED WHILE GR OUND NO.1 OF ASSESSEES CROSS OBJECTION IS PARTLY ALLOWED. 6. THE GROUND NO.2 OF THE REVENUES APPEAL RELATES TO THE DELETION OF ADDITION OF RS.1 13 220/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS. AT THE TIME OF HEARING BOTH THE LD. A. R. AND THE LD. D.R. HAD AGREED THAT THIS ADDITION HAS ALREADY BEEN SUSTAINED BY THIS BENCH O F THE TRIBUNAL VIDE ITS ORDER DATED 04.08.2006 IN IT(SS)A NO.13/AGR/2003 IN THE CASE OF M/S. CHAUD HARY LAXMAN DAS SARAF. THEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. IN VIEW O F THIS FACT AND AFTER GOING THROUGH THE ORDER OF THIS BENCH OF THE TRIBUNAL IN IT(SS)A NO.13/AGR/200 3 DATED 04.08.2006 WE CONFIRM THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS.1 13 220/ -. THUS THIS GROUND STANDS DISMISSED. 7. THE THIRD GROUND RELATES TO THE DELETION OF ADDI TION OF RS.64 170/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SIL VER ARTICLES AND ORNAMENTS. 8. DURING THE COURSE OF SEARCH SILVER ARTICLES WEI GHING 17.495 KGS. WERE FOUND. THE ASSESSING OFFICER NOTED THAT IN THE STATEMENT OF AF FAIRS OF SMT. GEETA DEVI AS ON 31.03.1985 SIX KGS. OF SILVER UTENSILS WERE SHOWN AND THIS CONTINU ED UPTO 31.03.1992. NO INCREASE OR DECREASE WAS SHOWN IN THE SILVER ARTICLES. HE THEREFORE T REATED REMAINING 11.459 KGS. OF SILVER UTENSILS 5 AS UNEXPLAINED AND VALUING THEM @ RS.56/- PER 10 GM S. ADDED THE SUM OF RS.64 170/- IN THE INCOME OF THE ASSESSEE. BEFORE THE CIT(A) THE ASS ESSEE CONTENDED THAT THE SILVER WEIGHING 11.459 KGS. WAS THE OLD POSSESSION OF THE FAMILY O F SHRI PARMANAND AGRAWAL. THE ASSESSEE WAS HOLDING IT AS A KARTA OF HUF. SILVER WAS KEPT WITH SMT. GEETA DEVI AND WAS FOUND FROM HER POSSESSION WHICH SHE MENTIONED IN HER INITIAL STATE MENT ALSO. THE NATURE OF SILVER FOUND ARE OLD COINS AND ORNAMENTS OF OLD PATTERN. THE CIT(A) DEL ETED THE ADDITION BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE ASSESSMENT ORDER STATEMENT OF SMT. GITA DEVI RECORDED AT THE TIME OF SEARCH. I HAVE ALSO GONE T HROUGH THE INVENTORY OF SILVER FOUND AT THE TIME OF SEARCH. IT IS CUSTOMARY IN HI NDU FAMILIES TO KEEP SILVER COINS FOR DIWALI POOJA AND OTHER RELIGIOUS CEREMONIES. L OOKING TO THE STATUS OF THE FAMILY AND THEY BEING IN SARAFI BUSINESS IT IS NOT UNUSUAL FOR THE HUF TO POSSESS 11.459 KG. OF SILVER. I AM OF THE VIEW THAT IT WIL L BE REASONABLE TO TREAT THE OLD POSSESSION OF SILVER AS INCOME OF THE APPELLANT. I THEREFORE DELETE THE ADDITION OF ` 64 170/- AS MADE BY THE ASSESSING OFFICER. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE C IT(A). THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. NO COGENT MATERIAL OR EVIDENCE WAS BROUG HT TO OUR KNOWLEDGE WHICH MAY PROVE THAT THE SILVER ARTICLES FOUND DURING THE COURSE OF SEAR CH BELONGED TO THE ASSESSEE INDIVIDUAL OR DOES NOT HAVE OLD COINS AND ORNAMENTS OF OLD PATTERN. W E THEREFORE CONFIRM THE ORDER OF THE CIT(A). THUS THIS GROUND STANDS DISMISSED. 10. THE FOURTH GROUND RELATES TO THE DELETION OF AD DITION OF RS.70 000/- MADE BY THE ASSESSING OFFICER AS MIGHT HAVE BEEN INCURRED BY TH E ASSESSEE ON THE MARRIAGE OF SHRI SANJAY AGRAWAL. WHEN THE MATTER WENT BEFORE THE CIT(A) T HE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- 6 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBMISS IONS OF THE LEARNED COUNSEL. THE MARRIAGE IS A FAMILY FUNCTION. IT IS THEREFORE NATURAL FOR THE FAMILY TO INCUR THE EXPENDITURE ON MARRIAGE. THE ASSESSIN G OFFICER IN THE ASSESSMENT ORDER HAS NO WHERE MENTIONED THAT ANY SPECIFIC QUER Y WAS RAISED RETARDING THE MARRIAGE EXPENSES IN THE CASE OF PARMANAND AGRAWAL. IN THE STATEMENT OF SHRI SANJAY AGRAWAL HE HAS ADMITTED THE RECEIVING OF ` 25 000 TO 30 000/- FROM INVITEES AND ABOUT ` 8 000/- TO ` 10 000/- IN DIFFERENT FUNCTIONS AT MAIHAR AND HE CONFIRMED THAT THE ENTIRE AMOUNT HAS BEEN SPENT IN THE MARRIAGE EXPENSES. LOOKING TO THE STATEMENT OF SHRI SANJAY AGRAWAL AND THE FACT THAT IN SUCH FUNCTIONS THE EXPENDITURE MUST HAVE BEEN COVERED BY THE JOINT FAMILY THE ADDITION OF ` 70 000/- IS NOT JUSTIFIED AND IS DELETED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE SAME. IN OUR OPINION NO INTERFERENCE IS CALLED FOR IN THE ODER OF THE CI T(A). THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER MERELY ON THE BASIS OF ESTIMATES. NO INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH WHICH MAY POINT OUT THAT THE A SSESSEE HAS ACTUALLY INCURRED EXPENSES ON THE MARRIAGE OF SHRI SANJAY AGRAWAL. THIS IS SETTLED L AW THAT IN THE BLOCK ASSESSMENT NO ADDITION CAN BE MADE UNTIL AND UNLESS EVIDENCES WERE NOT FOU ND DURING THE COURSE OF SEARCH. THE LD. D.R. HAS ALSO NOT POINTED OUT SUCH MATERIAL DURING THE C OURSE OF HEARING BEFORE US WHICH MAY POINT OUT THAT THE ASSESSEE HAS ACTUALLY INCURRED THE EXP ENSE. WE THEREFORE DO NOT FIND ANY MERIT IN THE GROUND TAKEN BY THE REVENUE. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A) DELETING THE ADDITION. THUS THIS GROUND STANDS DISMISSED. 12. GROUND NO.5 RELATES TO THE DELETION OF ADDITION OF RS.30 500/-MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PUR CHASE OF PLOT. THE ASSESSING OFFICER AT PAGE NO. 5 OF THE ASSESSMENT ORDER OBSERVED THAT HALF PO RTION OF THIS PLOT WAS ALREADY IN THE POSSESSION OF SHRI PARMANAND AGRAWAL (HUF). THE RE MAINING 50% PLOT WAS PURCHASED BY HIM AND HIS WIFE SMT. GEETA DEVI. THE COST OF PLOT INC LUDING STAMP DUTY IS RS.61 000/-. THE ASSESSING OFFICER OBSERVED THAT THERE WAS NO WITHDR AWAL SHOWN BY THE ASSESSEE FROM HIS ACCOUNT 7 FOR THE PURCHASE OF THE PLOT. THEREFORE HE TREATE D ` 30 500/- AS UNEXPLAINED INVESTMENT. BEFORE THE CIT(A) THE ASSESSEE EXPLAINED THAT IT WAS EXPL AINED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT HALF PORTION OF PLOT NO.17 HAWMANTORIA MARG CHATARPUR WAS PURCHASED JOINTLY BY SHRI PARMANAND AGRAWAL AND SMT. GEETA DEVI. THE PORTION PURCHASED BY SHRI PARMANAND AGRAWAL BELONGED TO THE JOINT FAM ILY. THE PURCHASE OF PLOT WAS INCORPORATED IN THE CASH FLOW STATEMENT OF THE HUF WHICH WAS SUB MITTED TO THE ASSESSING OFFICER COPY OF WHICH WAS FILED BEFORE THE CIT(A) ALSO. THUS IT W AS CONTENDED THAT THE INVESTMENT IS COVERED BY AVAILABILITY OF FUND WITH THE JOINT FAMILY. THE CIT(A) NOTED THAT THE COST OF PURCHASE OF PLOT AT ` 30 491/- WAS INCORPORATED IN THE CASH FLOW STATEMEN T OF CHOUDHARY BADRI PRASAD SARAF HUF SUBMITTED BEFORE THE ASSESSING OFFICER IN THE CASE OF FIRM CHOUDHARY LAXMAN DAS SARAF.. HE THEREFORE DELETED THE ADDITION. 13. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER AND CONTENDED THAT THE ASSESSEE HAS SUBMITTED THE FRESH EVIDENCE. WHILE THE LD. A.R. BY REFERRING TO PAGE NO.18 OF THE PAPER BOOK AS WELL AS PAGE A-13 OF HIS SUBMISSIONS BEFORE THE CIT(A) POINTED OUT THAT NO FRESH EVIDENCES WERE FILED BEFORE THE CIT(A). THE CASH F LOW STATEMENT OF CHOUDHARY BADRI PRASAD SARAF HUF WAS SUBMITTED BEFORE THE ASSESSING OFFICE R IN THE CASE OF FIRM CHOUDHARY LAXMAN DAS SARAF COPY OF THE SAME CASH FLOW STATEMENT WAS FILED BEFORE THE CIT(A). THIS CANNOT BE REGARDED TO BE FRESH EVIDENCE. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW AS WELL AS THE DOCUMENTS AND THE PAPERS RELIED ON BEFORE US. WE NOTED THAT THE INVESTMENT IN THE PLOT AT RS.30 491/- HAS DULY BEEN SHOWN IN THE CASH FLOW STATEMENT OF 8 CHOUDHARY BADRI PRASAD SARAF HUF FOR THE PERIOD END ED 31.03.1994. THIS CASH FLOW STATEMENT HAS NOT BEEN REJECTED BY THE ASSESSING OFFICER. UN DER THESE FACTS AND CIRCUMSTANCES IN OUR OPINION THIS IS NOT A FIT CASE WHICH WARRANTS OUR INTERFERENCE. WE ACCORDINGLY CONFIRM THE FINDING GIVEN BY THE CIT(A) AND DISMISS THE GROUND TAKEN BY THE REVENUE. 15. IN THE RESULT APPEAL FILED BY THE REVENUE STAN DS DISMISSED WHILE THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.02.2011). SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 25 TH FEBRUARY 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY