SNEH LATA DWIVEDI,JAIPUR vs. ITO, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh HkkxpUn] ys[kk lnL; ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 501/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke Smt. Sneh Lata Dwivedi The ITO Vs. 6/372, Malviya Nagar Ward- 2(3) Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AJVPD 0339 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by: Shri Rajeev Sogani, CA jktLo dh vksj ls@ Revenue by: Smt. Poonam Rai, DCIT- DR lquokbZ dh rkjh[k@ Date of Hearing : 10/01/2017 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 12 /01/2017 vkns'k@ ORDER PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A)-1, Jaipur dated 21-03-2016 for the assessment year 2007-08 raising following grounds of appeal. ‘’1.(a) In the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming the action of AO in reopening the assessment merely on the basis of AIR information. AIR information can never from basis for reopening the assessment. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief

2 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur may please be granted by quashing the reassessment proceedings being illegal and without any basis.

1.(b) In the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming the action of the AO in making addition of Rs. 25,00,000/- in respect of a matter which is not forming part of the reasons recorded for reopening the assessment and where no addition was made in respect of the investment in the Mutual Funds for Rs. 10,00,000/- for which reason the assessment was reopened. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the assessment proceedings being illegal, without jurisdiction and beyond scope.

2.1 The Ground No. 1 (a) and (b) of the assessee is regarding

reopening the assessment u/s 147 of the Act by the AO which has been

rejected by the ld. CIT(A) taking into consideration all the facts and

circumstances of the case including the written submission of the assessee

by observing as under:-

3.2.2.Determination

(i) I have duly considered the submissions of the appellant, assessment order and the material placed on record. The brief facts of the case are that on the basis of AIR information that the appellant has made

3 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur investment in mutual funds to the tune of Rs. 10 lac during the year under consideration, a notice u/s 133(6) of the Act was issued to the appellant on 30- 12-2013 in response to which it was stated by the appellant that it had not made any investment in the mutual funds during the year under consideration. It is pertinent to mention here that th appellant had not filed any return of income for the assessment year under consideration within time limit prescribed by Section 139 of the Act. Consequently, after recording reasons and obtaining approval from the competent authority, the AO issued notice u/s 148 o the Act to the appellant.

(ii) During the appellate proceeding, it was submitted by the appellant that AIR information cannot be the basis for reopening of the assessment. There is no merit in the submissions of the appellant. It is a matter of fact that the appellant had not filed its return of income for the year under consideration within the time limit prescribed u/s 139 of the Act. The appellant has denied to make any investment in ICICI Prudential Mutual Fund. Therefore, on the basis of information available on record, the AO has reason to believe that income had escaped assessment. Further the Explanation-2(a) to Section 147 is clearly applicable to the to the facts of the instant case under consideration. It may be mentioned that in the case of ACIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500 (SC), it was held by the Apex Court that if the AO, for whatever reason, has reason to believe that income has escaped assessment, it confers jurisdiction to reopen the assessment. It is a fact that no assessment was made earlier u/s 143(3)/144 of the Act in the case of the appellant, therefore, the ratio in the case of ACIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) applies squarely to the facts of the case.

4 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur (iii) In view of the above discussion, it is held that the AO was justified in initiating proceedings u/s 147 of the Act, hence, this ground of appeal is hereby rejected.’’

2.2 After hearing both the parties and perusing the material available

on record, I find no merit in the arguments advanced by the ld. AR of the

assessee at the time of hearing before the Bench. Hence, the same is

dismissed.

3.1 Apropos Ground No. 2 of the assessee, the ld. AR of the at the time

of hearing prayed for admission of following additional evidence under

Rule 29A of ITAT Rules, 1963 with regard to the addition of Rs. 25.00

lacs confirmed by the ld. CIT(A) u/s 68 of the Act. The ld. AR of the

assessee further prayed that these additional documents are vital in

adjudicating the case in right perspective and its absence may not unfold

the actual controversy and may lead to miscarriage of justice.

. ‘’Copies of the bank statement of assessee's individual bank account as well as bank statements of joint accounts held with other family members for the F.Y. 207-08 Account No. Name of the Account Holder Add. Evidence Paper Book 00111001002112 Sneh Lata Dwivedi 1 154901000000678 Dinanath Dwivedi, Snehlata 2 Dwivedi 676901057266 Dinanath Dwivedi, Akhil 3 Dwivedi, Priyanka Dwivedi 00111001880 Sneh Lata Dwivedi, Priyanka 4-6 Dwivedi

5 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur The bank statements shows that the assessee or her family member do not show any deposits of cash, which is allegedly received during F.Y. 2007-08.’

To this effect, the ld. AR of the assessee relied on the ITAT Patna, Third

Member Judgement in the case Abhay Kumar Shroff vs. ITO, ITA No.

95 & 193/Pat/1993, A.Y. 198-90 (1997), 63 ITD 144 (Pat).

3.2 During the course of hearing, the ld. DR objected to the additional

evidence put forth by the ld. AR of the assessee and the ld. DR relied on

the order of the ld. CIT(A) on this issue.

3.3 I have heard the rival contentions and perused the materials

available on record. It is noted that the during the course of assessment

proceedings the AO required the assessee to explain the source of

investment of Rs. 10 lacs made by her on 24-01-2007 in ICICI Prudential

Mutual Fund alongwith copies of the relevant bank account. During

assessment proceedings, it was submitted by the assessee that she had

received a sum of Rs. 25 lacs in cash on sale of her property at situated at

43, ‘’Bhairuvilas’’ near Ratanada Golf Course, Jodhpur out of which

Rs. 20 lacs was deposited in the bank accounts and the balance Rs. 5 lacs

were used for renovation of house property. The details of the cash

amount deposited with the banks are as under:-

6 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur Date Name of the Name of the Amount account holder bank deposited. 11-10-2006 Sneh Lata The Urban 4,00,000/- Dwivedi Cooperative Bank 11-10-2006 Sneh Lata The Bank of 4,00,000/- Dwivedi Rajasthan Ltd. 11-10-2006 Dinanath Indian Overseas 5,00,000/- Dwivedi & Sneh Bank Lata Dwivedi 11-10-2006 Dinanath The Urban 4,00,000/- Dwivedi & Sneh Cooperative Lata Dwivedi Bank 11-10-2006 Dinanath Centurion Bank 3,00,000/- Dwivedi & Sneh Ltd. Lata Dwivedi Total 20,00,000/- Total cash has been utilized for renovation of house 5,00,000/- Total sales consideration received in cash 25,00,000/-

Thus it is observed from the assessment order that out of cash deposit of

Rs. 20 lacs in its bank accounts, the assessee invested Rs. 5 lacs each in

the name of herself and in the name of her husband Shri Dinanath

Dwivedi in ICICI Prudential Mutual on 24-01-2007. It was further

observed by the AO from the registered sale deed of the property at

Jodhpur that the assessee sold the said property on 23-10-2007 i.e. in the

F.Y. 2007-08 relevant to A.Y. 2008-09 to Smt. Kusum Singhvi whereas

the assessee claimed to have sold the property during the assessment year

under consideration i.e. A.Y. 2007-08. The AO further noted that the sale

7 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur deed executed on 23-10-2007 did not mention anything about the cash

payments made during F.Y. 2006-07 relevant to A.Y. 2007-08. The AO

when confronted this fact from the assessee who said that said property

was sold to Shri Mahesh Sharma in cash only during the F.Y. 2006-07 .

Copy of Agreement to sell was not furnished instead a power of attorney

in favour of Shri Mahesh Sharma was filed and no sale consideration was

mentioned therein. In view of these facts, the AO held that the assessee

sold her property at Jodhpur in the A.Y. 2008-08 and not during the year

under consideration and thus the source of Rs. 25 lacs claimed by the

assessee to be received on account of sale of its property remained

unexplained and the AO made an addition of Rs. 25 lacs as income from

unexplained sources in the hands of the assessee. In first appeal

proceedings, the assessee submitted that the said property was transferred

by her by way of executing a general power of attorney (POA) in favour

of Shri Mahesh Sharma on 11-10-2006 and the said power of attorney

sold the property ultimately to Smt. Kusum Singhvi on 23-10-2007 under

his own signatures. The assessee further submitted that the amount

against sale of this property was retained by Shri Mahesh Sharma as he

had already paid the consideration to the assessee. The ld. CIT(A)

observed the contention of the assessee during the appellate proceedings

8 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur that POA Shri Mahesh Sharma is nowhere related to her and no person

would ever execute a POA in favour of a stranger and jeopardize her in

property. The assessee further contended that the practice of transferring

the property by executing POA, handing over possession and accepting

the payment is well accepted by different judicial forms including the

Hon'ble Supreme Court in the case of Suraj Lamp & Industries (P) Ltd.

(2012) 340 ITR 1. The ld. CIT(A) noted that the sale deed of the above

property was executed by Shri Mahesh Sharma on 23-10-2007 in favour

of Smt. Kusum Singhvi as power of attorney holder of the assessee but

the said document revealed that Shri Mahesh Sharma was acting a general

power of attorney holder and nowhere it was stated that Shri Mahesh

Shamra had already paid a sum of Rs. 25.00 lacs to the assessee during

the assessment year under consideration. Before the ld. CIT(A) submitted

that the AO could have summoned Shri Mahesh Sharma and Smt. Kusum

Shinghvi to ascertain the facts which was not done. The ld. CIT(A) noted

that it was primary onus on the assessee to substantiate that she did not

sell the instant property during the year under consideration which was

not discharged by the assessee. The ld. CIT(A) noted that the assessee

had neither filed a copy of agreement to sell with Shri Mahesh Sharma or

any other document in the form of Will, Gift Deed etc. Hence, the ld.

9 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur CIT(A) came to conclusion that the source of cash deposit of Rs. 25 lacs

in the bank account of the assessee was out of the sale proceeds of

immovable property during the year under consideration which cannot be

accepted in the absence of any documentary evidence and he confirmed

the addition of Rs. 25 lacs made by the AO. During the course of hearing

the ld. AR of the assessee submitted that POA was executed on 11-10-

2006 and cash was deposited in one go in the bank account on 11-10-

2006 which proves that the sale transaction had taken place. Looking to

the facts and circumstances of the case, it will be in the interest of justice

to accept the additional evidences filed by the assessee and the assessee

should be given a chance to present the additional evidences before the

AO with a view to deduce the exact position of the case. Thus Ground

No. 2 of the assessee relating to confirming the addition of Rs. 25 lacs on

account of sale of property (supra) is set aside to the file of the AO to

decide it afresh by taking into consideration the additional evidences filed

by the assessee before the Bench and allowing the adequate opportunity

of being heard to the assessee in the matter. The assessee is also directed

to produce relevant documents before the AO and cooperate him in the

proceedings. Thus Ground No. 2 of the assessee is allowed for statistical

purposes.

10 ITA No.501/JP/2016 Smt. Sneh Lata Dwivedi vs. ITO, Ward- 2(3), Jaipur 4.0 In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 12 /01/2017.

Sd/- ¼HkkxpUn½ (Bhagchand) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 12 /01/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Smt. Sneh Lata Dwivedi, Jaipur 1. 2. izR;FkhZ@ The Respondent- The ITO, Ward- 2(3), Jaipur vk;dj vk;qDr¼vihy½@ CIT(A). 3. vk;dj vk;qDr@ CIT, 4. 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA No. 501/JP/2016) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत