KAMAL BATRA,ROORKEE vs. DCIT, CIRCLE HARIDWAR, HARIDWAR
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Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
IN THE INCOME TAX APPELLATE TRIBUNAL, DEHRADUN CIRCUIT BENCH: DEHRADUN BEFORE, SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.3375/Del/2019 (Assessment Year: 2010-11) Sh. Kamal Batra, Dy. CIT, Ram Lal Batra & Sons, Circle, 66/2, Jamuna Bhawan, Vs. Haridwar B. T. Ganj, Roorkee.
PAN – AAOPB5539M (Appellant) (Respondent)
Appellant By Sh. Hemant Arora, CA Sh. Pavitra Arora, CA Respondent by Sh. A.S. Rana, Sr. DR Date of Hearing 22.06.2023 Date of Pronouncement 23.06.2023
ORDER This is an appeal by the assessee against order dated
19.12.2017 passed by the learned Commissioner of Income Tax
(Appeals), Dehradun, for assessment year 2010-11.
The only effective issue to be decided in this appeal is as to
whether the learned CIT(A) was justified in confirming the addition
made by the learned Assessing Officer in the sum of Rs.5,53,535/-
ITA No.3375/Del/2019 AY: 2010-11 representing business income of the wife of the assessee by
clubbing it with the assessee’s income.
We have heard the rival submissions and perused the
materials on record. The assessee is engaged in trading of bidis
under the name and style of ‘Ram Lal Batra& Sons’ having his
shop at 66/2, Jamuna Bhawan, B T Ganj, Roorkee. The return of
income for the assessment year 2010-11 was filed by the assessee
on 18.09.2010 for the assessment year 2010-11 filed by the
assessee on 18.09.2010 declaring total income of Rs.8,93,880/-. A
survey operation was carried out under section 133A of the Act in
the business premises of the assessee. During the course of survey,
the survey team observed found that Smt. Sonia Batra, wife of the
assessee was also carrying on trading business of bidis under the
name and style of ‘Sonia Batra’ at 660, Ram Nagar, Roorkee, but in
reality, she was not doing any such business and thus, the entire
business was carried on only by her husband. A statement on oath
was recorded by the survey team from her, wherein, she stated that
she is not aware of any such business being done in her name and
its her husband, Sh. Kamal Batra (assessee herein), who is aware of
ITA No.3375/Del/2019 AY: 2010-11 the business of trading of bidis. Accordingly, a notice under section
148 of the Act was issued to the assessee on 31.03.2017. In the
reassessment proceedings, based on the survey statement, the
learned Assessing Officer proceeded to club the business profit
disclosed by Sh. Sonia Batra in her individual Income Tax Return
filed on 18.09.2010 for assessment year 2010-11 in the sum of
Rs.5,53,535/-, with the income of the assessee. This action of
learned AO was upheld by learned CIT(A).
We find that both the assessee as well as his wife Smt. Sonia
Batra were carrying on business of trading of bidis in their
individual capacity at different addresses. Both the assessee as well
as his wife are independently assessed to income tax having
separate PAN and have been regularly filing their respective Income
Tax Returns with the Income Tax Department.
The learned AR before us, argued that bidis brand traded by
the assessee are as under:
“Deluxe Tarzan 25 by 20, Tarzan Small 13 by 20, Tarzan 14 by 20, Super Tarzan 16 by 20, 13 by 20 Bidi Telephone Sp. 25 by 20, Bidi Telephone Small 20 by 20, Match Boxes.”
ITA No.3375/Del/2019 AY: 2010-11 5. The learned AR also submitted that bidis brand traded by
assessee’s wife are as under:
“Telephone 25 by 20, Tarzan Big 11 by 20 and 22 by 20”
Learned AR also submitted that sales tax registration (TIN) no.
of assessee is 05004109042 and TIN of Sonia Batra is
05004165011. He pointed out that the assessee was only assisting
his wife in the business of trading of bidis. The learned AR also
placed on record the independent Income Tax Returns filed by the
assessee’s wife offering business income in respect of trading in
bidis from assessment year 2010-11 to assessment year 2022-23 as
under:
We find that accounts of the assessee have been duly
subjected to tax audit in terms of section 44AB of the Act, which is
ITA No.3375/Del/2019 AY: 2010-11 evident from page 5 to 20 of the paper-book. When the assessee’s
wife is independently assessed to income tax, having separate sales
tax registration number and conducting the trading of bidis
business at totally different addresses with that of the assessee and
more especially when she had offered the business income from
trading of bidis in her individual capacity in her income tax returns,
it would be unfair to club her income with that of the business
income of the assessee. In any case, we find that the assessee is
already in high tax bracket and there is no need for him to split the
profits between him and his wife. Hence, there is absolutely mala
fide on the part of assessee. No contrary evidence to this fact has
been brought on record by the Revenue, except relying on statement
recorded during survey proceedings. It is trite law that the
statement recorded during survey proceedings does not have any
evidentiary value. Reliance in this regard is placed on the decision
of Hon’ble Supreme Court in case of CIT Vs. S. Khader Khan Sons,
reported in 352 ITR 480 and decision of Hon’ble Kerala High Court
in the case of Paul Mathew and Sons Vs. CIT, 263 ITR 101.
ITA No.3375/Del/2019 AY: 2010-11
In view of the above observations and respectfully following the
judicial precedents relied upon hereinabove, the action of the lower
authorities in clubbing the business income of assessee’s wife with
that of the assessee in the facts and circumstances of the instant
case, is dismissed. Accordingly, the grounds raised by the assessee
are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in Open Court on 23rd June, 2023
Sd/- Sd/- (SAKTIJIT DEY) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 23/06/2023 RK/Sr.PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI (Dehradun Circuit Bench, Dehradun)
