Deepa Mathew, Cochin v. DCIT, Ernakulam

ITSSA 7/COCH/2007 | misc
Pronouncement Date: 10-03-2010 | Result: Allowed

Appeal Details

RSA Number 721916 RSA 2007
Assessee PAN ACZPD6502D
Bench Cochin
Appeal Number ITSSA 7/COCH/2007
Duration Of Justice 3 year(s) 8 day(s)
Appellant Deepa Mathew, Cochin
Respondent DCIT, Ernakulam
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 10-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 10-03-2010
Date Of Final Hearing 02-03-2010
Next Hearing Date 02-03-2010
Assessment Year misc
Appeal Filed On 02-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.(S&S)A.NO.07/COCH/2007 BLOCK PERIOD: 1 - 4 - 1996 TO 18 - 4 - 2002 MRS. DEEPA MATHEW KOCHI-20. PA NO.ACZPD 6502D VS. THE ASSIST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-I ERNAKULAM. (APPELLANT) ( RESPONDENT ) & I.T.(S&S)A.NO.12/COCH/2007 & I.T.(S&S)A.NO.30/COCH/2008 BLOCK PERIOD: 1 - 4 - 1996 TO 18 - 4 - 2002 THE ASSIST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-I ERNAKULAM. VS. MRS. DEEPA MATHEW KOCHI-20. PA NO.ACZPD 6502D (APPELLANT) (RESPONDENT) REVENUE BY SHRI A.K. THATTAI CIT DR ASSESSEE BY SHRI CBM WARRIER C.A. O R D E R PER BENCH: THIS SET OF THREE APPEALS IS IN THE CASE OF MRS. D EEPA MATHEW KOCHI. I.T.(S&S)A.NO.07/COCH/2007 IS FILED BY THE ASSESSEE WHEREAS I.T.(S&S)A.NO.12/COCH/2007 & IT(S& S) A NO.30/COCH/2008 ARE BY THE DEPARTMENT. ALL THESE APPEALS IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 2 ARE DIRECTED AGAINST THE ORDERS OF THE CIT(APPEALS) -I KOCHI. THE BLOCK PERIOD INVOLVED IS 1-4-1996 TO 18-04-2002 . 2. LET US FIRST TAKE UP THE APPEAL IN IT(S&S)A NO.30/COCH/2008. THE ONLY ISSUE FOR OUR CONSIDERATION IN THIS APPEAL RELATES TO THE LEVY OF SURCHARGE U/S.11 3 OF THE I.T. ACT AS AMENDED FROM 1-6-2002. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE O F THE VIEW THAT SINCE THE HONBLE SUPREME COURT HAS REFER RED THE ISSUE TO A LARGER BENCH WHETHER IT IS CLARIFICATORY AMENDMENT FOR THE PURPOSE OF LEVY OF SUR-CHARGE IT IS CRYSTA L CLEAR THAT THE ISSUE IS A DEBATABLE ONE. HENCE WE ARE OF TH E HUMBLE VIEW THAT THE ORDER OF THE ASSESSING OFFICER PASSED U/S.154 IS A DEBATABLE ISSUE AND THE LD. CIT(APPEALS) HAS R IGHTLY HELD THAT IT IS A DEBATABLE ISSUE AND IT IS NOT COMING W ITHIN THE AMBIT OF SECTION 154 OF THE ACT. HENCE WE DISMIS S THE APPEAL OF THE REVENUE. 4. IN IT(S&S)A. NO.12/COCH/2007 THE ONLY GROUND RAISED BY THE REVENUE IS IN RESPECT OF DELETION OF ADDITION OF RS.15 27 721/- OUT OF A TOTAL ADDITION OF RS.16 08 831/- BEING UNDISCLOSED BANK DEPOSITS. IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 3 5. WE HAVE HEARD THE LD. CIT. DR AT LENGTH AND CONSIDERED THE SUBMISSIONS CAREFULLY. IT IS NOT DI SPUTED THAT AS ADMITTED BY THE ASSESSING OFFICER RIGHT FROM PAG ES 6 7 AND 8 THE DEPOSITS ARE IN THE INDIVIDUAL NAMES OF 1) DEEPA S.PAI - BANK OF INDIA ERNAKULAM BRANCH A/C . NO.113228 THE BENARAS STATE BANK PANAMPALLY NAGAR BRANCH A/C.NO.496 AND HDFC BANK RAVIPURAM BRANCH A/C.NO.02201000098846; 2) ROOPA - BANK OF INDIA ERNAKULAM BRANCH ACCOUNT NO. 12992 HDFC BANK RAVIPURAM BRANCH A/C.NO.020100005673; 3) SEEMA SUSAN MATHEW BANK OF INDIA ERNAKULAM BRANCH A/C. NO.12991 THE BENARAS STATE BANK PANAMPALLY NAGAR BRANCH A/C.NO.496; CSB GIRINAGA R BRANCH A/C. 093321 AND FD WITH HDFC BANK RAVIPURAM BR. A/C.NO.0204470034828 & 0204470034835. THE FIXED DEPOSITS IN THE HDFC BANK WILL GO TO SHOW THAT THESE ARE THE DEPOSITS STANDING IN THE INDIVIDUAL N AMES OF THE DAUGHTERS. THEY ARE MAJOR DAUGHTERS. THEY ARE A LL WORKING AND THEY ARE INCOME TAX ASSESSES. THAT BEI NG THE IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 4 CASE 158BD ASSESSMENT CAN BE STRICTLY ON THE MATERIALS/EVIDENCE SEIZED AT THE TIME OF SEARCH AND IT IS NOT DISPUTED THAT ALL THE DEPOSITS ARE IN THE NAMES OF MAJOR DAUGHTERS OF THE ASSESSEE. THE BLOCK ASSESSMENT S HOULD RELATE TO THE MATERIALS SEIZED AND SUCH MATERIALS R ELATED TO THE SEARCH AND TO SUCH PERSON WHICH ARE THE REQUIRE MENTS AS PER THE RATIO LAID DOWN BY THE HONBLE SUPREME COUR T IN THE CASE OF MANISH MAHESHWARI REPORTED IN 289 ITR 341 AND IT IS ALSO EXPLAINED THAT THERE IS NO 158BD ASSESSM ENT IS PENDING IN THE CASE OF THE DAUGHTERS CLUBBING OF B ANK DEPOSITS OF DAUGHTERS ARE NOT POSSIBLE BY WAY OF TH IS BLOCK ASSESSMENT AND THE COMPUTATION HAS ALSO TO BE IN R ESPECT OF ASSESSMENT YEAR WISE FOR THE PURPOSE OF COMPUTA TION OF BLOCK UNDISCLOSED INCOME. UNDER THE ABOVE CIRCUMST ANCES WE ARE OF THE VIEW THAT THE ORDER OF THE LD. CIT(AP PEALS) IS QUITE JUSTIFIED WHO RIGHTLY DELETED THE ADDITION OU T OF THE TOTAL ADDITION MADE BY THE ASSESSING OFFICER. UNDER THE ABOVE CIRCUMSTANCES THE GROUND OF THE DEPARTMENT I S MISCONCEIVED AND DEVOID ON MERITS WHICH REQUIRES T O BE REJECTED AND IT IS ACCORDINGLY REJECTED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 5 7. TURNING TO IT(S&S)A NO.07/CPOCH/2007 FIRST IS THE ADDITIONAL GROUND BY THE ASSESSEE ON THE GROUND THA T IN RESPECT OF BLOCK ASSESSMENT RS.10 95 000/- IS ASSES SED AS UN-DISCLOSED INCOME BEING THE ESTIMATE OF PERSONAL EXPENDITURE FOR THE ENTIRE BLOCK PERIOD FROM 1-4-19 96 TO 18- 04-2002 @ RS.15 000/- PER MONTH. WITHOUT PREJUDICE TO THE ORIGINAL GROUND RAISED IN RESPECT OF THIS GROUND T HE SUBMISSION OF THE ASSESSEE IS THAT IF AT ALL ANY AD DITION IS TO BE SUSTAINED IT SHOULD BE DISTRIBUTED IN DIFFERENT ASSESSMENT YEARS WITHIN THE BLOCK PERIOD AND THE ADDITION FOR EACH ASSESSMENT YEAR IS ONLY ABOVE THE TAXABLE SLAB TAX SHOULD BE LEVIED AT THE RATE MENTIONED IN SECT.113 OF THE ACT. 8. AFTER CONSIDERING THE SUBMISSIONS WE ADMIT THE ADDITIONAL GROUND AND PROCEED TO DISPOSE OF THE APP EAL INCLUDING THE ADDITIONAL GROUND ON MERITS. 9. THE FIRST ISSUE IN GROUND NO.2 RELATES TO THE AD DITION OF ESTIMATED HOUSE HOLD EXPENSES AMOUNTING TO RS.10 95 000/- THE ASSESSEE AND HER THREE MAJOR DAUGHTERS ARE HAVI NG THEIR OWN SOURCE OF INCOME. IN 132(4) STATEMENT GIVEN B Y THE ASSESSEE SHE HAS SPECIFICALLY ANSWERED THE QUESTIO N NO.9 THAT SEEMA SUSAN MATHEW ELDER DAUGHTER OF THE ASSE SSEE IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 6 IS AN ASSESSEE WITH PA NO. AND SHE HAS FILED HER RE TURN FOR THE ASSESSMENT YEAR 2002-03 DECLARING INCOME OF RS.85 000/-. SIMILARLY ROOPA MATHEW YOUNGER DAU GHTER OF THE ASSESSEE IS ALSO ASSESSED AND SHE HAS FILED HE R RETURN FOR THE ASSESSMENT YEAR 2002-03 DECLARING RS.85 000 /-. THEREFORE BOTH THE DAUGHTERS OF THE ASSESSEE WERE INCOME- TAX ASSESSES ON THE DATE OF SEARCH. THE SOURCE FO R THE BANK ACCOUNTS WAS ALSO EXPLAINED. WHILE COMING TO THE CAPACITY OF THE DAUGHTERS THEY ARE ALL WELL EARNING MEMBERS AND THEY ARE ASSESSED TO INCOME-TAX. UNDER THE ABOVE CIRCUMSTANCES THE ADDITION MADE UNDER THE HEAD POO R DRAWINGS IS NOT JUSTIFIED AS RS.15 000/- PER MONTH SPREAD OVER TO ALL THE THREE PERSONS THE ASSESSEE AND HER TWO MARRIED DAUGHTERS AND ALL ARE ASSESSED SEPARATELY. THEREFORE IT WILL COME BELOW THE TAXABLE LIMIT AND THE EXPLANATION OF THE ASSESSEE THAT THEY ARE HAVING INDEPENDENT SOURCE OF INCOME AND THE ASSESSEE IS AL READY RUNNING A FOREIGN LIQUOR SHOP AND THE DAUGHTERS HAV E ATTAINED MAJORITY AND THEY ARE HAVING OWN SOURCE T HE HOUSEHOLD EXPENDITURE CANNOT BE BROUGHT WITHIN THE AMBIT OF ASSESSEES EXPENDITURE SO AS TO TAX IT UNDER THE HE AD UNDISCLOSED INCOME. IN THE ABOVE CIRCUMSTANCES T HE ASSESSEE HAS EXPLAINED THE SOURCE AND THE HOUSEHOLD IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 7 EXPENDITURE WHICH WERE SHARED BY ALL THE THREE PERS ONS WHO ARE ASSESSED SEPARATELY. HENCE WE HAVE NO HESIT ATION IN SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW A ND ALLOW THE APPEAL OF THE ASSESSEE ON THIS ISSUE. 10. COMING TO THE THIRD GROUND IT IS ON THE ADDITI ON OF 400 GRAMS OF GOLD VALUED AT RS.1 87 600/- AS UNDISCLOSE D INCOME. WE HAVE HEARD RIVAL SUBMISSIONS. THIS I S THE ASSESSMENT MADE U/S.158BD R.W.S.158BC AND TO ADD MO RE U/S. 144 BEST JUDGMENT ASSESSMENT. ACCORDING TO THE ASSESSING OFFICER IN THE SWORN STATEMENT RECORDED D URING THE COURSE OF SEARCH WHEREIN THE ASSESSEE HAS ADMITTED 400 GRAMS OF GOLD ORNAMENTS WHICH WAS NOT EXPLAINED PRO PERLY. THEREFORE THE ASSESSING OFFICER VALUED 400 GRAMS O F GOLD @ RS.469/- PER GRAM AND ADDED RS.1 87 000/- UNDER UNDISCLOSED INCOME. HOWEVER BEFORE US THE LD. CO UNSEL FOR THE ASSESSEE WOULD SUBMIT THAT NO EVIDENCE WAS FOUN D DURING THE COURSE OF SEARCH. THEREFORE THIS ADDI TION IS NOT AT ALL WARRANTED. HOWEVER THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE COULD NOT HAVE THE SOURCE FO R THE ACQUISITION OF 400 GRAMS OF GOLD. HENCE THE ASSES SING OFFICER VALUED THE 400 GRAMS GOLD AT RS. 1 87 000/- AND BROUGHT THE SAME TO TAX AS UNDISCLOSED INCOME ALON GWITH IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 8 THE GIFT OF CLOTHS ETC. THE LD. COUNSEL FOR THE A SSESSEE WOULD SUBMIT THAT EVEN IN THE SWORN STATEMENT RECOR DED THE ASSESSEE HAS EXPLAINED THE SOURCE OF THIS 400 GRAMS OF GOLD THAT OUT OF 400 GRAMS 240 GRAMS WAS EXPLAINED AS RE CEIVED AT THE TIME OF MARRIAGE AS EXPLAINED IN 132(4) STAT EMENT. THE ASSESSEE HERSELF IS AN INCOME-TAX ASSESSEE IS N OT DISPUTED. ASSESSEE RECEIVED GIFTS ON VARIOUS OCCA SIONS AND RELYING ON THE INSTRUCTION NO.1916 DATED 11-5-1994 WHICH IS AVAILABLE IN ASSESSEES PAPER BOOK AT PAGE NO.27 THE LD. COUNSEL FOR THE ASSESSEE WOULD SUBMIT THAT EVEN THOUGH IT RELATES TO SEIZURE THE DEPARTMENT HAS TA KEN CARE THAT COMMON APPROACH HAS TO BE GIVEN TO A SITUATION WHERE GOLD JEWELLERY AND EARNINGS TO THE EXTENT OF 500 GR AMS PER MARRIED LADY SHOULD NOT BE ASSESSED. THIS INSTRUC TION EVEN THOUGH RELATES TO SEIZURE OPERATION THE TRIBUNAL C ONSISTENTLY HOLDING THAT UP TO 500 GRAMS OF GOLD IN RESPECT OF MARRIED LADIES POSSESSION HAS BEEN JUSTIFIED WHEN THE SOURC E HAS BEEN EXPLAINED TO THE SATISFACTION. AS AN ALTERNATI VE THE LD. COUNSEL FURTHER SUBMITTED THAT THE VALUATION @ RS.4 69/- IS EXCESSIVE AS THIS GOLD WAS POSSESSED BY THE ASSESSE E EVEN AT THE TIME OF MARRIAGE AND SUBSEQUENTLY THE PURCHA SES WILL ALSO BE AT A LOWER COST. THEREFORE THIS ADDITION OF RS.1 87 600/- PARTICULARLY U/S.158BD R.W.S. 158BC A ND U/S. IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 9 144 IS TOTALLY UNWARRANTED AND THE SAME SHOULD BE D ELETED IS THE ARGUMENT OF THE LD. COUNSEL. THE LD. COUN SEL FURTHER ARGUED THAT GROUND NO.4 IS IN RESPECT OF ADDITION T O THE EXTENT OF RS.60 000/- ESTIMATED UNDER THE HEAD UND ISCLOSED INCOME RELATES TO THE DRESS MATERIALS AND THE LD. COUNSEL SUBMITTED THAT THE ANIMOSITY OF THE AUTHORITIES WHI LE TREATING THE ASSESSEE FOR THIS BLOCK ASSESSMENT. THE LD. COUNSEL FURTHER SUBMITTED THAT HE HAS NEVER COME TO SUCH AN ADDITION ON ESTIMATION OF EXPENDITURE OF DRESS MATE RIALS AS THEY ARE VERY COMMON USE AND PARTICULARLY THEY DID NOT INCLUDE ANY COSTLY ITEMS. 11. ON THE OTHER HAND THE LD. CIT.D.R. SUPPORTED T HE FINDINGS OF THE INCOME-TAX AUTHORITIES. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PRE CEDENTS. THE TOTAL QUANTITY OF GOLD FOUND AT THE TIME OF SEA RCH WAS 1396 GRAMS BELONGING TO THE FAMILY CONSISTING OF TH E ASSESSEE AND HER TWO MARRIED DAUGHTERS AND ONE UNMA RRIED DAUGHTER. WHILE DECIDING THE ISSUE THE INSTRUCTI ON OF THE CBD CONTAINED IN I NSTRUCTION NO.1916 DATED 11-5-1994 HAS TO BE TAKEN INTO ACCOUNT. THAT BEING THE CASE T HE TOTAL IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 10 LIMIT FOR ALL THESE FIVE LADIES INCLUDING THE ASSES SEE WILL NOT EXCEED THE POSSESSION OF THE QUANTITY OF GOLD FOUND AND THEY ARE WITHIN THE LIMIT PRESCRIBED BY THE BOARD. THE SOURCES WERE ALSO EXPLAINED. THEY ARE ALL INDEPENDENT. T HEY ARE HAVING THEIR OWN SOURCE OF INCOME. THEY ARE INCOME -TAX ASSESSES. KEEPING THESE FACTS TOGETHER ALONGWITH THE CIRCUMSTANCES WE HAVE NO HESITATION IN DELETING TH E ADDITION MADE UNDER THIS HEAD. ORDER ACCORDINGLY. 13. COMING TO THE ADDITION IN RESPECT OF THE VALUE OF CLOTHES/DRESS MATERIALS ASSESSED AS UNDISCLOSED INC OME WE ARE OF THE VIEW THAT THE ESTIMATE MADE BY THE ASSES SING OFFICER ON THE VALUE OF CLOTH RECEIVED AS GIFT WHIC H WAS TAKEN AS UNDISCLOSED INCOME OF THE ASSESSEE AND SUSTAINED BY THE CIT(APPEALS) PARTICULARLY UNDER THE GIVEN CIRCUMSTA NCES IN THE PANCHNAMA PREPARED AT THE TIME OF SEARCH IS NOT RECORDED IN THE INVENTORY OF CLOTH FOUND AT THE RES IDENCE OF THE ASSESSEE I.E. WHEN THERE IS NO EVIDENCE FOUND AS A RESULT OF SEARCH THE ASSESSMENT MADE U/S.158BD R.W.S.158BC AND U/S.144 BEST JUDGMENT ASSESSMENT IS NOT AT ALL JUSTIFIABLE. THEREFORE WE DELETE THIS ADDITI ON MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(APPE ALS). IT(SS)A NOS. 07 & 12/COCH/2007 & 30/COCH/2008 11 14. IN THE RESULT THIS APPEAL OF THE ASSESSEE IS A LLOWED. 15. IN THE RESULT IT(S&S)A NO.30/COCH/2008 AND IT(S&S)A NO.12/COCH/2007 ARE DISMISSED. IT(S&S)A NO.07/COCH/2007 IS ALLOWED. (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM DATED THE MARCH 2010. PM. COPY FORWARDED TO: 1. THE ACIT. CENTRAL CIRCLE-I ERNAKULAM. 2. MRS. DEEPA MATHEW 28/3185 RAVEENDRAN ROAD KADAVANTHARA KOCHI-20. 3. CIT(A)-I KOCHI 4. CIT CENTRAL KOCHI 5. D.R.