ITO 3(1), v. NAMITA KHANNA,

MA 551/MUM/2010 | 2005-2006
Pronouncement Date: 09-03-2011 | Result: Dismissed

Appeal Details

RSA Number 55119924 RSA 2010
Assessee PAN AGRPK3856B
Bench Mumbai
Appeal Number MA 551/MUM/2010
Duration Of Justice 5 month(s) 24 day(s)
Appellant ITO 3(1),
Respondent NAMITA KHANNA,
Appeal Type Miscellaneous Application
Pronouncement Date 09-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Date Of Final Hearing 26-11-2010
Next Hearing Date 26-11-2010
Assessment Year 2005-2006
Appeal Filed On 15-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI T.R. SOOD ACCOUNTANT MEMBER M.A. NO. 551/MUM/2010 ARISING OUT OF ITA. NO. 816/MUM/2009 ASSESSMENT YEAR 2005-2006 ITO 3 (1) MUMBAI VS. MRS. NAMITA KHANNA MUMBAI 400 021 PAN AGRPK3856B (APPLICANT) (RESPONDENT) FOR APPLICANT : S/SHRI BV.JHAVERI & S.C. KAPADIA FOR RESPONDENT : SHRI SHRAVAN KUMAR (DR) ORDER PER D. MANMOHAN V.P. 1. BY THIS APPLICATION THE ASSESSEE SEEKS RECTIFIC ATION OF THE ORDER DATED 7 TH MAY 2010 ON THE GROUND THAT IT CONTAINS SEVERAL MISTAKES APPARENT FROM RECORD. 2. FACTS IN SHORT ARE THAT ASSESSEE A NON-RESIDEN T INDIAN WAS RESIDING AT VIETNAM IN THE YEAR UNDER CONSIDERA TION AND STAYING WITH HER HUSBAND MR. DEEPAK KHANNA WHO IS ALSO A N ON-RESIDENT INDIAN. ASSESSEE WAS FILING INCOME TAX RETURNS IN I NDIA AND WAS ASSESSED ACCORDINGLY. IN THE YEAR UNDER CONSIDERAT ION THE ASSESSEE DECLARED A TOTAL INCOME OF RS.2 56 270/-. RETURN OF INCOME HAVING BEEN SELECTED FOR SCRUTINY CASE OF THE ASSESSEE WA S EXAMINED IN DETAIL. ASSESSING OFFICER NOTICED THAT THE ASSESSEE CREDITED RS. 30 LAKHS IN THE CAPITAL ACCOUNT AND CLAIMED THAT IT WA S THE VALUE OF A PAINTING PURCHASED OUTSIDE THE COUNTRY AND BROUGHT TO INDIA. IT WAS STATED TO HAVE BEEN PURCHASED IN THE JOINT NAMES OF THE ASSESSEE AND HER HUSBAND. 2 3. ASSESSING OFFICER TOOK A VIEW THAT ANY CREDIT E NTRY IN THE BOOKS OF ACCOUNT HAS TO BE EXPLAINED BY THE ASSESSE E AND IN THE ABSENCE OF PROPER PROOF AN ADDITION CAN BE MADE UND ER SECTION 68 OF THE ACT. CIT(A) HAVING DELETED THE SAID ADDITION. R EVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL WHEREIN THE ORDER OF THE LEARNED CIT(A) WAS NOT ACCEPTED AND UPHELD THE VIEW TAKEN BY THE A SSESSING OFFICER; THE TRIBUNAL OBSERVED THAT SECTION 68 EMPOWERS THE ASSESSING OFFICER TO EXAMINE ANY SUM FOUND CREDITED IN THE BOOKS OF T HE ASSESSEE AND THE INITIAL ONUS IS UPON THE ASSESSEE TO PROVE THE SOURCE OF THE SAME. A CATEGORICAL FINDING WAS GIVEN ON THE STRENGTH OF THE FACTS ON RECORD THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF PAINTING PURCHASED. THEREFORE ADDITION WAS UPHELD UNDER SEC TION 68 OF THE ACT. 4. IN THE MISCELLANEOUS APPLICATION THE ASSESSEE C ONTENDS THAT CERTAIN FACTS WERE NOT EXAMINED BY THE TRIBUNA L IN THEIR PROPER PERSPECTIVE I.E. (A) PAINTING WAS PURCHASED OUTSIDE INDIA IN THE JOINT N AMES OF THE ASSESSEE AND HER HUSBAND. (B) PAYMENT WAS MADE IN FOREIGN CURRENCY (USD) IN USA. THERE IS NO EVIDENCE ON RECORD THAT THE ASSESSEE MA DE PAYMENT FROM INDIA OR THE ASSESSEE HAS SOURCE OF IN COME IN INDIA TO MAKE PAYMENT FOR THE PURCHASE OF THE SA ID PAINTING. (C) ASSESSEE HAS FURNISHED THE PARTICULARS OF PAINTING HER SOURCE OF INCOME AND HUSBANDS SOURCE OF INCOME AND THUS MERELY BECAUSE ASSESSEE BROUGHT THE SAID PAINT ING TO INDIA BY RECORDING IT IN THE BALANCE SHEET ADDIT ION CANNOT BE MADE SINCE ASSESSING OFFICER HAS NOT DOUB TED THE SOURCE OF FOREIGN REMITTANCE MADE BY THE ASSESS EE. (D) THE FACT THAT ASSESSEE IS EARNING INCOME IN FOREIGN CURRENCY AND THE PAINTING WAS PURCHASED ABROAD CANN OT BE OVERRULED. 3 5. LEARNED COUNSEL APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT UNDER SECTION 4 OF THE INCOME TAX AC T INCOME TAX SHALL BE CHARGED IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR AND SECTION 5 (2) OF THE ACT PROVIDES THAT ONLY INC OME EARNED IN INDIA IS ASSESSABLE TO TAX. IN OTHERWORDS IN THE CASE OF A NON-RESIDENT INCOME WHICH IS RECEIVED OR DUE TO BE RECEIVED IN I NDIA IS ASSESSABLE TO TAX AND HENCE SECTION 68 HAS NO APPLICATION. IT WAS ALSO CONTENDED THAT SECTION 69 DOES NOT COME INTO PLAY SINCE THE A SSESSEE HAS RECORDED THE INVESTMENT IN THE BOOKS OF ACCOUNTS. I T WAS THUS CONTENDED THAT THE ORDER OF THE TRIBUNAL SUFFERS FR OM MISTAKE APPARENT FROM RECORD. 6. ON THE OTHER HAND LEARNED DR SUBMITTED THAT DEE MING PROVISION HAS TO BE TAKEN TO ITS LOGICAL CONCLUSION AND ANY INVESTMENT/VALUE FOUND CREDITED IN THE BOOKS OF ACC OUNT IMPOSES A BURDEN UPON THE ASSESSEE TO EXPLAIN THE SOURCE THER EOF AS OTHERWISE IT CAN BE TREATED AS A DEEMED INCOME UNDER SECTION 68 OF THE ACT. IT WAS ALSO CONTENDED THAT EXPLANATION 1 TO SECTION 5 SPEA KS OF DEEMED INCOME ARISING OUTSIDE INDIA WHEREAS THE TRIBUNAL HAS TAKEN NOTE OF THE FACTUAL MATRIX TO COME TO THE CONCLUSION THAT I T WAS A DEEMED INCOME ACCRUING TO THE ASSESSEE IN INDIA. RELYING U PON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . RAMESH ELECTRIC & TRADING COMPANY 203 ITR 497 IT WAS CONTENDED THAT SECTION 254 (2) OF THE INCOME TAX ACT 1961 OPERATES IN A LIMITED F IELD I.E. ONLY MISTAKES APPARENT FROM RECORD CAN BE RECTIFIED. IN OTHERWORDS TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS. THE HONBLE COURT FURTHER STATED THAT FAILURE OF THE TR IBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE FACE OF THE RECORD ALTHOU GH IT MAY BE AN ERROR OF JUDGMENT AND EVEN SUCH ERRORS DO NOT FALL WITHIN THE SCOPE OF SECTION 254 (2) OF THE ACT. IT WAS THUS CONTENDED T HAT APART FROM THE FACT THAT THE TRIBUNAL HAS APPRECIATED THE FACTS IN THE CORRECT PERSPECTIVE EVEN IF CERTAIN FACTS WERE NOT PROPERL Y CONSIDERED OR 4 OMITTED TO BE CONSIDERED IT CAN AT BEST BE CONSIDER ED AS AN ERROR IN JUDGMENT IN WHICH EVENT RECOURSE TO SECTION 254 (2) IS NOT PERMISSIBLE. HE THUS STRONGLY SUPPORTED THE ORDER O F THE APPELLATE TRIBUNAL. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. AS COULD BE NOTICED FROM THE OR DER OF THE TRIBUNAL FACTS OF THE CASE ARE PROPERLY EXAMINED BY THE BENC H WHILE COMING TO THE CONCLUSION THAT ANY AMOUNT FOUND CREDITED IN TH E BOOKS OF THE ASSESSEE IN INDIA HAS TO BE SUPPORTED BY PROPER EVI DENCE AS OTHERWISE SECTION 68 OF THE INCOME TAX ACT COMES INTO PLAY SI NCE IT DEEMS SUCH CREDIT AS INCOME OF THE ASSESSEE EARNED IN INDIA. T HE BENCH HAS RECORDED ITS DETAILED FINDINGS IN PARAS 14 AND 15 O F THE ORDER. IN THE LIGHT OF THE DECISION OF THE HONBLE BOMBAY HIGH CO URT CITED (SUPRA) WE ARE OF THE VIEW THAT THE PLEA RAISED BY THE ASSE SSEE AT THIS STAGE IF ALLOWED WOULD AMOUNT TO REVIEW OF THE ORDER OF THE TRIBUNAL WHICH IS NOT PERMISSIBLE IN LAW. UNDER THE CIRCUMSTANCES TH E M.A. FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 9 TH DAY OF MARCH 2011. SD/- SD/- (T.R. SOOD) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDEN T MUMBAI DATE 9 TH MARCH 2011 VBP/- COPY TO 1. INCOME TAX OFFICER 3 (1) MUMBAI 2. MRS. NAMITA KHANNA 132 BUENA VISTA GEN J.B. M ARG NARIMAN POINT MUMBAI 400 021 PAN AGRPK3856B 3. CIT(A)-XII MUMBAI 4. CIT-XII MUMBAI 5. DR B BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR ITAT MUMBAI BENCHES