Smt. Raj Kumari Gupta, Hyderabad v. ACIT, Hyderabad

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI G.C. GUPTA VICE-PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER . IT(SS)A NO.57/HYD/09 : BLOCK PERIOD 1987-88 TO 1997-98 SMT. RAJKUMARI GUPTA HYDERABAD. PAN:ADEPG 8117D VS ACIT CIR-9(1) HYDERABAD. (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI K. VASANT KUMAR RESPONDENT BY : SMT. NIVEDITA BISWAS O R D E R PER AKBER BASHA ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF CIT (A) VIJAYAWADA DATED 24-9-2009 AND IT PERTAINS TO THE BLOCK PERIOD 1987-88 TO 1996-97 AND 1998-99 (1-4-1997 TO 16-7-19 97). 2. GROUNDS RAISED IN THIS APPEAL ARE AS FOLLOWS: '1. THE ORDER OF THE CIT (A) DISMISSING THE APPEAL IS E RRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE SUBM ISSION THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1995- 96 THAT IS FILED BEFORE DATE OF SEARCH REFLECTED INVESTMEN TS OF RS.1 75 000 AND THE SAME IS REFLECTED AS A DIFFERENT ASSET IN 2 THE YEAR 1997-98 AND THEREBY ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER HOLDING THAT THERE IS UNDISCLOSED INCO ME. 3. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CIT (A) ERRED IN HOLDING THAT SOURCES FOR THE INVESTMENT IS NOT PROVED IN STEAD OF APPRECIATING THE FACT THAT WHAT EVER DISCREPANCY IN T HE STATEMENT IT COULD BE DUE TO PASSAGE OF TIME AND NOT OTHERWISE. 4. THE LEARNED CIT (A) FURTHER FAILED TO APPRECIATE THE FACT THAT ONCE THE INVESTMENT HAS REFERENCE TO AN EARLIER YEAR AN D THE RETURN OF INCOME FOR SUCH YEAR IS FILED BEFORE SEARCH NO ADDITION COULD BE MADE IN THE BLOCK PERIOD AND THEREB Y ERRED IN CONFIRMING THE DETERMINATION OF UNDISCLOSED INCOME. 5. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE REQUEST TO EXCLUDE RS.64 000 ADMITTED AS UNDISCLOSED CANNOT BE ACCEPTED SINCE IT IS ADMITTED BY THE ASSESSEE ON HER OWN INSTEAD OF APPRECIATING THE FACT THAT THERE IS NO SUCH UNDISCLOSED INCOME AND EVEN IN BLOCK ASSESSMENT IF IT IS FOU ND THAT NO SUCH UNDISCLOSED INCOME IS THERE IT COULD BE EXCLUDED.' 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIV IDUAL IS THE WIFE OF SRI ANAND KUMAR WHO IS THE FIFTH SON OF SRI OM PRAKASH GUPTA. SRI OM PRAKASH GUPTA AND HIS FAMILY MEMBERS A RE DOING BUSINESS IN PEARLS AND JEWELS IN THE FOLLOWING TWO NAMES :- I) M/S. OMPRAKASH & SONS MACHILIKAMAN PATHARGATTY HYDERABAD II) M/S. SRI OMPRAKASH & SONS PEARLS & JEWELS R.P. RO AD SECUNDERABAD 3 ON 16-7-1997 A SEARCH UNDER SECTION 132 WAS CONDUCTED IN THE CASE OF SRI OM PRAKASH GUPTA AT HIS RESIDENTIAL AND BUSINESS PRE MISES. SUBSEQUENT TO THE SEARCH OPERATION A NOTICE UNDER SECTIO N 158BD WAS ISSUED TO SMT. RAJ KUMARI GUPTA ON 23-3-1998. IN RESP ONSE TO THIS NOTICE THE ASSESSEE HAD FILED A RETURN FOR THE BLOCK PER IOD ON 21-6-1999 DECLARING UNDISCLOSED INCOME OF RS.64 000 AND THE ASSESSMENT IN THIS CASE WAS CONCLUDED ON 30-1-2000 DETERMINING THE TOTAL UN DISCLOSED INCOME FOR THE BLOCK PERIOD AT RS.2 67 000 WHICH COMPRISE S OF THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE OF RS.64 000 AN D ADDITION MADE ON ACCOUNT OF INVESTMENTS NOT PROPERLY EXPLAINED T O THE EXTENT OF RS.2 03 000 FALLING IN VARIOUS ASSESSMENT YEARS IN THE BL OCK PERIOD. THE ASSESSMENT WAS CARRIED IN APPEAL UPTO THIS TRIBUNAL AND TH IS TRIBUNAL SET ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER WIT H A DIRECTION TO PROVIDE AN OPPORTUNITY AGAIN TO THE ASSESSEE TO EXPL AIN TAHE CASH DEPOSITS WITH RELEVANT MATERIAL. CONSEQUENT TO THE DI RECTION OF THE ITAT THE PRESENT ORDER UNDER S. 158BD WAS PASSED BY TH E ASSESSING OFFICER DETERMINING THE TOTAL UNDISCLOSED INCOME FOR TH E BLOCK PERIOD AT RS.2 67 000 AS PER HIS ORDER DATED 24-11-2006. 3. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A). ON APPEAL THE C IT (A) AFTER DISCUSSING THE POINTS AT ISSUES DISMISSED THE APPEAL FILED B Y THE ASSESSEE. 4. AGGRIEVED BY THE DECISION OF THE CIT (A) THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. GROUND NO.1 AND 6 ARE GENERAL IN N ATURE AND THEY DO NOT REQUIRE ANY ADJUDICATION. GROUND NO. 5 WAS NOT PR ESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE. HENCE THIS GROUND IS DISMISSE D AS NOT PRESSED. THE ONLY EFFECTIVE GROUND AMONG OTHER GROUNDS MENTIONED 4 ABOVE IS WHETHER THE INVESTMENT OF RS.1 75 000 APPEARI NG IN THE BALANCE-SHEET AS ON 31-3-2005 IS TO BE EXCLUDED FROM T HE UNDISCLOSED INCOME ARRIVED BY THE ASSESSING OFFICER OR NOT. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE SHOWN THE INVESTMENT OF RS.1 75 000 FOR THE ASSESSMENT YEA R 1995-96 AND THE RETURN WAS FILED BEFORE THE DATE OF SEARCH. T HE SAID INVESTMENT WAS AGAIN REFLECTED AS DIFFERENT ASSETS VIZ. CASH AND INV ESTMENTS FOR THE ASSESSMENT YEAR 1997-98. HENCE THE LOWER AUTHORITIES ARE NOT CORRECT IN HOLDING THAT THERE IS UNDISCLOSED INCOME OF RS.1 75 0 00 WITHOUT APPRECIATING THE FACT THAT ONCE THE INVESTMENT HAS REFER ENCE TO AN EARLIER YEAR AND THE RETURN OF INCOME FOR SUCH YEAR IS FILED BEFORE THE DATE OF SEARCH AND HENCE NO ADDITION COULD BE MADE IN THE BLOCK PERIOD AND THEREBY THE AUTHORITIES BELOW ARE ERRED IN CONFIR MING THE DETERMINATION OF UNDISCLOSED INCOME OF RS.1 75 000. 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE WHILE SUPPORTING THE ORDERS OF THE AUTHORITIES BELOW SUBMITT ED THAT THE CLAIM MADE BY THE ASSESSEE HAS NO SUPPORTING EVIDENCE AND HENCE T HE TEST OF HUMAN PROBABILITIES IS TO BE APPLIED. SINCE THERE IS D IFFERENT METHOD OF CHECKING THE VERACITY OF THE CLAIMS MADE BY THE ASSESSEE IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE THE AUTHORITIES BELOW ARE CORRECT IN HOLDING THAT THE INVESTMENT OF RS.1 75 000 IS TO BE TR EATED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD UND ER CONSIDERATION. IN SUPPORT OF HIS CONTENTION SHE RELIED ON THE FOLLOWING CASE-LAW. I) MANOJ AGARWAL VS. DCIT (113 ITD 377) II) CIT VS. K.CHINNATHAMBAN (292 ITR 682) (SC) III) ROSHAN D. HATTI VS. CIT (107 ITR 93 8) 5 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IN THIS REGARD WE FIN D THAT AS PER THE BALANCE-SHEET FILED FOR THE ASSESSMENT YEAR 1995-96 BY THE ASSESSEE A COPY OF THE SAME IS PLACED AT PAGE-20 OF THE PAPER BOOK THE INVESTMENT OF RS.1 75 000 WAS REFLECTED IN THE BALANCE-SH EET AS ON 31- 3-1995. HENCE WE FIND FORCE IN THE ARGUMENT OF THE L EARNED COUNSEL FOR THE ASSESSEE THAT THIS INVESTMENT OF RS.1 75 000 WAS WITH S MT. BHARATI DEVI AND AFTER RECEIVING BACK THE AMOUNT FROM HER T HE SAME WAS AVAILABLE IN THE FORM OF INVESTMENT AND CASH AS ON 31-3 -1996. WE ALSO FIND THAT THE ASSESSING OFFICER HAD EXAMINED BOTH SMT. B HARATHI DEVI AND THE ASSESSEE AND THE ASSESSING OFFICER TREATED THE SAID I NVESTMENT AS UNDISCLOSED OF THE ASSESSEE IN SPITE OF NOT GETTING ANY CO NTRADICTORY EVIDENCE IN RESPECT OF THE CLAIM OF THE ASSESSEE. SINCE THE SAID INVESTMENT WAS ALREADY DECLARED IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1995-96 AND FILED BEFORE THE DATE OF SEA RCH THE SAME CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE DEPARTMENT DID NOT BRING ANY CORROBORATIVE MATERIAL ON RECORD TO PROVE THAT THE INVESTMENT SHOWN IN THE BALANCE SHEET FILED BE FORE THE DATE OF SEARCH IS DIFFERENT FROM THE INVESTMENT IN QUESTION. TH E CASE LAW RELIED ON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ARE DI STINGUISHABLE ON THE FACTS OF THE CASE AS IN THOSE CASES THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO EXPLAIN THE SOURCES OF THE INVESTMENTS BUT IN THE CASE UNDER CONSIDERATION THE ASSESSEE IN FACT EXPLAINED THAT TH E INVESTMENTS FOUND ON THE DATE OF THE SEARCH ARE ALREADY SHOWN IN T HE RETURNS FILED BEFORE THE DATE OF SEARCH. IN VIEW OF THE ABOVE THE AUTHORITIES BELOW ARE ERRED IN TREATING THE SAID INVESTMENT OF RS.1 75 0 00 AS UNDISCLOSED 6 INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD UNDER CONSIDERA TION. THIS GROUND OF THE ASSESSEE IS THEREFORE ALLOWED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PA RTLY ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 30- 4-2010. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 30-4-2010. COPY FORWARDED TO: 1. K. VASANTHKUMAR ADVOCATE 403 MANISHA TOWERS SHYAMNAGAR HYDERABAD. 2. 3. THE ACIT CIR-9(1) HYDERABAD. CIT A P HYDERABAD. 4.CIT(A) VIJAYAWADA. 5. THE D.R. ITAT HYDERABAD JMR *