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Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI
Before: Shri S.S.Godara & Dr. A.L. Saini
आदेश/O R D E R PER BENCH:-
This assessee’s appeal for assessment year 2010-11 arises against the Commissioner of Income Tax (Appeals)-Shillong’s order dated 21.02.2019 passed in case No. CIT(A)/SHG/100092018-19, involving proceedings u/s 143(3)r.w.s. 147 of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.
The assessee’s sole substantive grievance in the instant appeal challenging correctness of both the lower authorities’ action treating his LIC
ITA No.145/Gau/2019 A.Y. 2010-11 Page 2 Ratan Deb Vs. ITO Wd-3, Agar policy investment of Rs.5.50 lac to be unexplained u/s69 of the Act. The CIT(A)’s detailed discussion affirming the addition reads as under:- “4. Ground No.1 The ground is against addition of rs.5,50,000/- u/s 69 of the Act. 4.1 According to the AO, in the return of income filed, assessee disclosed income of Rs.3,02,730/-. However, information was received regarding purchase of 11 (eleven) Nos. of LIC policies by assessee in cash. Proceeding u/s. 147 was accordingly initiated against assessee. Before the AO, it was stated that two younger brothers of assessee deposited Rs.2,50,000/- and Rs.3,00,00/- each in LIC policies in the name of assessee which was intimated to him only after a lapse of one and a half years. It was stated that the two brothers had filed their tax returns and the deposits were disclosed by them. The AO referred to explanation of assessee given to DDIT(Inv.), Guwahati dated 30.01.2012 wherein it was stated that though assessee was not interested in taking insurance policies, his younger brothers made him sign several papers and Insurance policies were taken by them without his knowledge. After examination of the mater, AO noted his findings at para 5 of his order. The same is extracted as under: ‘Considering the facts stated above and the submissions of the assessee mentioned above, the following facts have been noticed: i) That the assessee has not disclosed the deposit of LIP of Rs.5.50 Lakhs in his return of income dated 04.08.2010. ii) That the assessee has not even claimed deduction under chapter VIA against these deposits just to avoid detection of his investments by the Department. iii) That the assessee could know through the receipt of communication dated 03.05.2011 from the DDIT(Inv.), Guwahati, that information of his investment of Rs.5.50 lakhs with the LIC during the FY 2009-10 has reached the Department, if not intimated by any other communication from the DDIT(Inv.), Guwahati, or any other authorities, prior to that. iv) That the assessee could file the reply against the communication of the DDIT(Inv.) Guwahati at 03.05.2011 only on 30.01.2012, i.e. after a gap of about 11 (eleven) months. v) V Thus, the filing of return of income against the PANs of his brother, namely, Sri Kamal Deb (PAN: ABYPD 9324R) and Sri Sajal Kanti Deb (PAN; ABYPD 9321L) for the AY 2010-11 are apparently the afterthoughts of receipt of communication dated 03.05.2011 from the DDIT(Inv.), Guwahati, by the assessee. vi) It may be mentioned here that these returns for the AY 2010-11 filed against the PANs of the brothers of the assessee on 03.01.2012 and 04.01.2012 are the first ever return of income filed against their PAN. vii) These returns have apparently been prepared after the receipt of communication from the DDIT(Inv.), Guwahati, dated 03.05.2011 by the assessee and the assessee filed the above mentioned reply before the DDIT(Inv.), Guwahati, on 08.02.2012 vide letter dated 30.01.2012 i.e. after filing the returns of income against the above mentioned PANs of his brothers on 04.01.2012 & 03.01.2012 and preparation of Affidavits dated 17.01.2012. viii) Moreover, it may be mentioned here that from the returns field against the PANs of the brothers of the assessee, it appears that no income from commission business of LIC, which may also haves
ITA No.145/Gau/2019 A.Y. 2010-11 Page 3 Ratan Deb Vs. ITO Wd-3, Agar corresponding TDSs has been reflected in these return and also that after filing the return of income for the AY 2012-13 in the month of August, 2012, no other returns have been filed against these two PANs till date. Thus, it is apparent that the main purpose of filing these returns against the PANs of the brother of the assessee after receipt of show cause notice from the DDIT(Inv.), Guwahati, is to materialized the scheme fabricated to submit reply, as mentioned in para No.4, against the undisclosed investment by the assessee in td he LIPs.’ The AO concluded that explanation given and filing of returns by the brothers were afterthoughts only. He added Rs.5,50,000/- to assessee’s income u/s 69 of the Act. 4.2 In appeal, submission given before the AO was reiterated. Copies of affidavit sworn by the two brothers were also enclosed. It was argued that the addition was totally baseless and unsustainable.”
We have given our thoughtful consideration to rival contentions regarding the above sole issue of correctness of gifts of the impugned addition amount allegedly coming from assessee’s brother’s side. Mr. Haokip vehemently contends during the course of hearing that assessee’s brother(s) have been found to have obtained PAN only after the DDIT(Inv) scrutiny in question. Learned counsel on the other hand states that said donor(s) are regularly assessed to tax as per the relevant acknowledgements placed on record since assessment years 2000-01. The Revenue’s sole reason therefore does not deserve acceptance.
Next comes the equally important aspect of the source of assessee’s income brother(s)/doner(s). He has failed to explain the fact that the said two brothers did not the income to the extent the impugned investment amount in the respective hands. The fact also remains that they had been having some cash-in-hand upto the impugned assessment year since assessed throughout. We therefore take into account all these peculiar facts and circumstances to conclude that a lump sum addition of Rs.1.50 lac out of that in dispute of Rs.5.50 lac would be just and proper. The assessee gets relief to the tune of Rs.4 lac.
ITA No.145/Gau/2019 A.Y. 2010-11 Page 4 Ratan Deb Vs. ITO Wd-3, Agar 5. Learned counsel’s next submission that the taxpayer no more wishes to press for his other substantive grounds regarding validity of re-assessment proceedings as well as that relating to rental income addition of Rs.6,855/- provided same is not treated as precedent against him any other assessment year. The Revenue is fair enough in not disputing the same. 6. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court 10/07/2019 Sd/- Sd/- (लेखा �è�) (Û�ȡǓ��� �è�) ( A.L.Saini) (S.S.Godara) (Accountant Member) (Judicial Member) Guwahati, *Dkp Ǒ��ȡȲ�Ȭ- 10/07/2019 गू�ȡ¡ ȡ�Ȥ । आदेश�ȧ ĤǓ�ͧ�ͪ�\ Ē ȯͪ��/ Copy of Order Forwarded to:- 1. आवेदक/Assessee-Shri Ratan Sharma, 6th Floor, Fatasil Ambari, Guwahati-9 2. �ȡ�è�/Revenue-DCIT, Circle-3, R.No.714, 7th Floor, Aayakar Bhawan, G.S. Road Guwahati-781005 3. Ȳ�Ȳͬ���] ����] �ǕÈ��Ǚ�ȡ¡ ȡ�Ȥ/ Concerned CIT Guwahati 4. ] ����] �ǕÈ�- अपील/ CIT (A) Guwahati 5. ͪ��ȡ�Ȣ��ĤǓ�Ǔ�ͬ�, ] ����\ �Ȣ�ȣ��\ ͬ����, गू�ȡ¡ ȡ�Ȥ��Ȳ��Ȣ�/ DR, ITAT, Guwahati 6. �ȡ�[��ȡ^�/ Guard file. By order/आदेश से, /True Copy/ Sr. Private Secretary (on tour) ] ����\ �Ȣ�ȣ��\ ͬ����, गू�ȡ¡ ȡ�Ȥ ।