SMT C I INDIRA ,DAVANGERE vs. INCOME TAX OFFICER WARD-1(1), DAVANGERE

Per Shri Jason P Boaz, A.M. : This appeal by the assessee is directed against the order of the

Commissioner of Income Tax (Appeals), Davangere dt.26.03.2018 for the

Assessment Year 2015-16.

2 ITA No.2439/Bang/2018 2.1 The assessee, an individual, is engaged in the business of retail

trade in rice bran and husk. A survey under Section 133A of the Income

Tax Act, 1961 ('the Act') was conducted at the assessee's business

premises on 3.11.2014; in the course of which it was noticed that the

assessee and her son had jointly invested in the purchase and renovation

of a building to be used as a convention hall. The difference in the

purchase consideration for building and investment made in renovation

for building was admitted to be Rs.46,25,000; 50% of which was offered

as additional income in the assessee hands in the year under

consideration. The assessee filed her return of income for Assessment

Year 2015-16 on 22.09.2016 declaring income of (-)Rs.4,95,076; only

after issue of notices by the Assessing Officer calling upon the assessee

to file the same. It was noted that the assessee had not included the

additional income of Rs.23,12,500, admitted in the course of survey, in

her return of income for Assessment Year 2015-16. The case was taken

up for scrutiny and the assessment was completed under Section143(3)

of the Act vide order dt.27.12.2017, wherein the assessee's income was

determined at Rs.38,44,740 in view of various additions / disallowances

amounting to Rs.39,10,857.

3 ITA No.2439/Bang/2018 2.2 Aggrieved by the order of assessment dt.27.12.2017 for

Assessment Year 2015-16, the assessee preferred an appeal before the

CIT(Appeals), Davangere. The learned CIT(Appeals) disposed off the

appeal, vide the impugned order dt.26.3.2018, allowing the assessee

partial relief.

Davangere dt.26.03.2018 for Assessment Year 2015-16 has preferred this

appeal before the Tribunal.

ORDER ON PETITION FOR CONDONATION OF DELAY OF 65

DAYS IN FILING APPEAL BEFORE THE TRIBUNAL.

4.1 As per the petition and Affidavit sworn to by the assessee, now

filed before the Tribunal, admittedly there has been a delay of 65 days in

filing the appeal. I have heard both parties and perused the Affidavit

filed by the assessee seeking condonation of delay in filing the appeal

and the judicial precedents in this regard. The Hon'ble Apex Court in the

case of MST Katiji & Others (167 ITR 471) (SC), while explaining and

laying down the principles that need to be kept in mind while considering

an application for condonation of delay, has emphasised that substantial

4 ITA No.2439/Bang/2018 justice should prevail over technical considerations. The Hon'ble Court

also explained that a litigant does not stand to benefit by lodging the

appeal late and that the expression ‘every day’s delay must be explained’

does not mean that a pedantic approach should be taken. The doctrine

should be applied in a rational, common sense and pragmatic manner.

4.2 Taking into account the account the aforesaid principles laid

down by the Hon'ble Apex Court and after careful consideration of the

submissions / reasons put forth by the assessee in the Affidavit, I am of

the considered opinion that there was sufficient and reasonable cause

for the delay of 65 days in filing this appeal, as even if the said delay is

condoned, no loss would be caused to Revenue, as legitimate taxes

payable in accordance with law alone will be collected. In the aforesaid

factual matrix of the case in hand and judicial precedents on the subject,

referred to above, I condone the delay of 65 days in filing this appeal

before the Tribunal and admit the appeal for consideration and

adjudication. It is accordingly ordered.

5 ITA No.2439/Bang/2018 O R D E R

appeal :-

5.1 In this ground, the assessee contends that the learned

CIT(Appeals) had erred in confirming the addition of Rs.8,00,000 credited

to the Capital Account, which is a gift from her husband.

5.2 The facts of the matter, as emanate from the record, are that in

the course of assessment proceedings, the Assessing Officer noticed that

in the period under consideration, the assessee had credited a sum of

Rs.8 lakhs in her Capital Account, with the narration “Gift from C.I.

6 ITA No.2439/Bang/2018 Indudhara (spouse)”. On being required by the Assessing Officer to file

details such as copies of gift deed, copy of return of income and financial

statements, etc of the donor, the assessee failed to do so. In the

absence of details / proof of having received the gift, the said sum

amounting to Rs.8 lakhs was held to be an unexplained credit and

brought to tax in the assessee's hands. On appeal also, the learned

CIT(Appeals) dismissed the assessee's ground observing “Before me also,

no evidences on materials are produced in support of their claims.”

5.3.1 In respect of this ground, the learned Authorised Representative

for the assessee filed an application of Rule 29 of the Appellate Tribunal

Rules, 1963 (in short ‘the Rules’) seeking to admit additional evidence in

the form of gift deed dt.19.2.2014 and acknowledgements of Income Tax

Returns filed by Sri C.C. Indudhara, husband of the assessee, who the

assessee claims in the donor of the gift of Rs.8 lakhs to her. As per the

accompanying Affidavit dt.1.10.2018, the assessee submits as under at

paras 3 to 5 thereof :-

7 ITA No.2439/Bang/2018

5.3.2 I have heard both parties and perused and carefully considered

the material on record. Taking into account the facts and circumstances

of the case on this issue, where the addition of Rs.8 lakhs has been made

and sustained for want of filing of required details / supporting

documents to prove the gift by the assessee, in my considered view, the

interest of substantial justice would be served by admitting the

additional evidence in the form of documents, i.e. copies of gift deed

dt.19.2.2014 and IT Returns for Assessment Year 2014-15 & 2015-16;

placed at pages 4 to 7 of the assessee's paper book dt.1.10.2018, since

they are necessary and relevant and could go to the root of the matter

8 ITA No.2439/Bang/2018 for proper adjudication of this issue. In these circumstances, I admit the

additional evidence as laid out above.

5.3.3 Having admitted the additional evidences filed by the assessee

under Rule 29 of the Rules (supra), I set aside the orders of the

authorities below and restore to the file of the Assessing Officer; the

matter of the examination of the veracity of the assessee's claim that the

credit of Rs.8 lakhs in her Capital Account is really a gift received from

her husband. Needless to add, the assessee shall be afforded adequate

opportunity of being heard in the matter and to file details / submissions

required, which shall be duly considered before deciding the issue by

way of a speaking and reasoned order. Consequently, Ground No.1 of

the assessee's appeal is allowed for statistical purposes.

6.1 in this ground, the assessee assails the orders of the authorities

below in making / confirming disallowance of Rs.1 lac on account of

payment of Advance Tax.

6.2 I have heard both parties and perused and carefully considered

the material on record. I find from a perusal of the orders of the

9 ITA No.2439/Bang/2018 authorities below that the aforesaid addition / disallowance of Rs.1 lac

was made by the Assessing Officer on account of Income Tax paid by the

assessee as he was of the view that no such payment of Advance Tax has

been made as claimed in the assessee's Capital Account. The learned

Authorised Representative drew the attention of the Bench to pages 1 to

3 of Paper Book, containing a copy of the assessee’s I T Return for

Assessment Year 2015-16 and the statement of computation of income

to show that only Self Assessment Tax of Rs.1 lakh was paid and

therefore the addition / disallowance was unwarranted. In my view, on

an appreciation of the facts on record, I find that NIL Advance Tax was

paid by the assessee in the year under consideration, as is reflected in

the assessee's Income Tax Return for Assessment Year 2015-16 (copy

placed at page 1 of Paper Book). Therefore, I find merit in the Assessing

Officer’s view that no Advance Tax of Rs.1 lac was paid by the assessee in

the year under consideration as shown in her Capital Account for the

year ending 31.3.2015. Further, I also find that the assessee has actually

paid only Self Assessment Tax of Rs.1 lac vide Axis Bank Cheque on

1.5.2015 which would be reflected in the assessee's Capital Account for

the next financial year. In the factual circumstances of the case, as

10 ITA No.2439/Bang/2018 discussed above, I find no merit in this ground raised by the assessee and

accordingly dismiss the same.

& 234D of the Act.

In these grounds, the assessee denies itself liable to be charged interest under Section 234A, 234B & 234D of the Act. The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala (252 ITR 1) (SC) and we therefore uphold the action of the Assessing Officer in charging the said interest in the case on hand. The Assessing Officer is, however, directed to recompute the interest chargeable under Section 234A, 234B & 234D of the Act, if any, while giving effect to this order.

partly allowed for statistical purposes.

Order pronounced in the open court on the 12th day of Oct.,2018. Sd/- (JASON P BOAZ) ACCOUNTANT MEMBER Bangalore, Dt.12.10.2018.

*Reddy gp

11 ITA No.2439/Bang/2018

Copy to : 1 Appellant 4 CIT(A) 2 Respondent 5 DR. ITAT, Bangalore 3 CIT 6 Guard File

Certified True Copy

Asst. Registrar Income Tax Appellate Tribunal Bangalore.