NAWAL KISHORE SHARMA,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. 785/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke Shri Nawal Kishore Sharma The ITO Vs. 90-A, Sultan Nagar, Gujar Ki Thadi Ward – 3(3), Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BGCPK 6211 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by: Shri Mukesh Khandelwal, CA jktLo dh vksj ls@ Revenue by: Shri Rajendra Jha, Addl.CIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 30/12/2016 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 9 /01/2017 vkns'k@ ORDER PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A)-I , Jaipur dated 27-06-2016 for the assessment year 2007-08 raising following grounds of appeal. ‘’1. That the ld. CIT(A) has erred seriously on the facts and in law in not admitting additional evidence in the form of affidavits of the persons from whom the appellant had taken loans for making payment for purchase of land.

2 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur 2. That the ld. CIT(A) has erred in law and on fats in sustaining the addition of Rs. 3,02,550/- u/s 69 of the I.T. Act, 1961

2.1 Apropos Ground No. 1 and 2 of the assessee, the facts as emerges

from the order of the ld. CIT(A) is as under:-

‘’3.1.2 Determination

(i) The brief facts of the case are that the appellant has purchased a residential plot in Sanganer, Jaipur for a sum of Rs. 3,02,550/- on 21-07-2006. As per copy of the agreement to sell dated 21-07-2006, the seller Shri Rajesh Saini received the entire sale consideration in cash and the original papers and possession of the land was handed over to the appellant on the said date itself. During the assessment proceedings, the AO required the appellant to explain the source of investment in the above residential plot and it was stated that the appellant had obtained a loan of Rs. 3,75,000/- from UTI Bank. However, the documents filed by the appellant revealed that the said loan was sanctioned and deposited by the appellant in its bank account on 20-11-2006 and subsequently, the appellant made cash withdrawal of Rs. 3,10,000/- on 22-11-2006.

(ii) In view of the above discrepancies, the AO required the appellant to explain the same and it was stated by the appellant that it was having very good relations with the seller, Shri Rajesh Saini and the consideration was stated to have been received whereas actually the amount was paid only after obtaining loan from the bank. The AO required the

3 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur appellant to produce Shri Rajesh Saini for his examination and to provide his contact number but the appellant has expressed his inability by stating that he has no information about Shri Rajesh Saini and consequently, the AO made addition of Rs. 3,02,550/- u/s 69 of the Act.

(iii) During the appellate proceedings, it was stated by the appellant that the AO made the addition of Rs. 3,02,50/- without going into the detail of the source of investment made in plot as the appellant has provided affidavits of the persons for whom loans were taken for purchase of residential plot. The appellant has filed copies of number of affidavits which were stated to be filed before the AO. It is noted that the assessment order was passed by the AO on 13-11-2014 whereas the letter enclosing the undated affidavits addressed to the AO was of the date 18-11-2014 i.e. subsequent to the date of assessment order. Thus, these constitute additional evidences as these were not before the AO at the tie of passing the assessment order. The appellant has neither stated anywhere in its written submission that these are the additional evidences nor made any prayer for their admittance as additional evidence under Rule 46A of the I.T. Rules. Further, the appellant has changed its stand as it was stated earlier before the AO that the consideration was paid to Shri Rajesh Saini after obtaining a loan from the bank whereas a new story has now been concocted by stating that the consideration was paid to Shri Rajesh Saini after obtaining cash loans from 15 persons and each loan is less than Rs. 20,000/-. Therefore, looking to the totality of facts and circumstances of the case, the affidavit filed by the appellant cannot be given any cognizance as these are not admitted under Rule 46A of the I.T. Rules. Further looking to the contradictions regarding source of payment to Shri Rajesh Saini and also looking to the fact that Shri Rajesh Saini was not produced by the appellant before the AO, it is held

4 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur that the appellant has failed miserably to explain the source of payment of Rs. 3,02,550/- for acquisition of residential plot and thus the addition of Rs. 3,02,550/- made by the AO is hereby sustained.

2.2 Apropos Ground No. 3 of the assessee, the facts as emerges from

the order of the ld. CIT(A) is as under:-

‘’3.2.2.Determination

(i) The appellant has shown miscellaneous income of Rs. 22,155/- in its return of income under the head ‘’income from other sources’’. During the assessment proceedings, it was admitted by the appellant that it had shown only 50% of such income in its return of income and consequently the AO made addition of Rs. 22,155/- under the head ‘’income from other sources’’ for the remaining 50% of such income which was not disclosed by the appellant in its return of income.

(ii) During the appellate proceedings, it was submitted by the appellant that it had already declared income from other sources at Rs. 22,155/- in its return of income and the addition of Rs. 2,15/- deserves to be deleted.

(iii) I have duly considered the submissions of the appellant and the assessment order and it is observed that the appellant has not controverted the findings of the AO as stated in the assessment order that only 50% of the ‘income from other sources’’ was declared in its return of income. Hence, the addition of Rs. 22,155/- made by the AO is hereby sustained.’’

2.3 During the course of hearing the ld. AR prayed that the lower

authorities have erred in confirming the additions. The ld. AR further

5 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur prayed that the assessee filed the fresh evidences before the ld. CIT(A)

relating to confirmation of loan taken by the assessee from 15 persons for

payment to seller but they were not taken into consideration ld. CIT(A)

and the ld. CIT(A) confirmed the additions made by the AO. Further the

assessee is employed at clerical post in Govt. of Rajsthan at SMS

Hospital, Jaipur. The assessee is not aware of the provisions of income

tax laws and thus could not properly explain the source of income relating

to the addition of Rs. 22,155/- made by the AO. Conclusively, the ld. AR

of the assessee prayed that the above issues raised by the assessee in his

appeal may be restored to the file of the AO for fresh consideration. The

submission of the ld. AR made in the written submission are as under-

‘’Ground No. 1 : Non admission of fresh evidences : The ld. CIT (A) did not entertain the fresh evidences filed by the appellant before him consisting of confirmations of 15 known persons who advanced loan to the appellant for making payment to the seller of the land on the technical ground that no application/prayer was filed for such admission under rule 46A of the Income Tax Rules, 1962. The ld. AO working in a judicious office was supposed to admit these evidences as the same were very important for the disposal of the appeal and for granting justice to the appellant. It was only due to ignorance of the appellant and incompetence of the counsel that no prayer was submitted for such admission for which an honest tax payer must not be penalized. It is also not out of place to state that the appellant is on a clerical post employed with Govt. of Rajasthan and is not aware about strict provisions of law. He had purchased the land during previous year 2006-07 and he was questioned about the sources during 2014-15 i.e. after 8 years he could not recollect the real scene and he replied that the same was paid out of finance taken. When his attention was drawn to the variation between the date of agreement and the date of disbursal of the loan he recollected and came out with an explanation that the consideration was paid on 22.11.2006 and not on 21.07.2006. When he failed to produce the seller he came on the real fact of availing loans from known persons and he got confirmation from 15 persons and filed the same to the ld. AO but since the order had already been passed no consideration could be given by the ld. AO on such confirmations and since nothing came on records no whispering of such fact of submission of confirmation was mentioned in the assessment order. The said confirmations were filed by the appellant before the Ld. CIT (A) which were not admitted by him as per his version. It is

6 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur therefore sincerely requested that the matter may kindly be set aside to the file of the ld. AO or the Ld. CIT (A) for passing a fresh order by considering such vital piece of evidence. Ground No. 2 : Addition of Rs. 3,02,550 : Without prejudice to the submissions made for ground no. 1 it is submitted that the ld. AO considered the whole amount of such investment as unaccounted income of the assessee. He has not allowed any credit for accumulated amount with the appellant. Even from the assessment order it is not discernible whether any such claim was made by the counsel of the appellant or not. Therefore the matter may kindly be set aside to the file of the ld. AO or Ld. CIT (A) for considering this particular aspect of the matter, so that justice may be granted to an innocent assessee. Ground No. 3 : Addition of Rs. 22,155 : It seems that the counsel representing the appellant could not satisfactory explain the source of such income to the ld. AO and the ld. CIT (A) and due to improper representation an opinion was formed that only 50% of the income was declared and hence addition of matching amount of Rs. 22,155 was made by the Ld. AO and sustained by the Ld. CIT (A). It is therefore humbly prayed that this issue may also be set aside to the file of lower authorities for reexamination. I had asked the appellant about this particular matter from the appellant and the appellant was absolutely blank about the matter and hence it seems that due to lack of competence of the counsel the honest appellant is suffering. Appropriate directions may kindly be given.’’ 2.4 The ld. DR relied on the orders of the lower authorities.

2.5 I have heard the rival contentions and perused the materials

available on record. It is noted from the records that the assessee is a

government employee drawing salary from SMS Hospital (Govt. of

Rajsthan) . During the relevant year, the assessee had purchased a

property consisting of a residential plot in Sanganer, Jaipur for

Rs. 3,02,505/- in cash. The case of the assessee was selected for

reassessment as to the investment of the amount in property in question.

The assessee replied that he had obtained a loan of Rs. 3.75 lacs from

UTI Bank and produced a copy of sanction letter from the bank. The AO

observed that this amount was deposited by the assessee in his bank

account with SBBJ, SMS Hospital Branch, Jaipur on 20-11-206 and cash

7 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur withdrawal of Rs. 3.10 lacs was thereafter made on 22-11-2006, out of

which the consideration was stated to have been paid. The AO further

observed from the perusal of the sale agreement of the impugned property

that the entire consideration of Rs. 3,02,550/- had been obtained in cash

on the date of agreement i.e. 21-07-206 and no further amount was due

and the original paper together with the actual possession had been

handed over to the assessee. The AO when confronted the assessee with

this contradictory fact of payments, the assessee submitted that he had

very good relations with Shri Rajesh Saini (the seller) and thus only the

agreement was made and the consideration was paid only after receipt of

loan amount from the bank. The AO asked the assessee to produce Shri

Rajesh Saini for examination of the issue in question but the assessee

failed to produce Shri Rajesh Saini before the AO as to source of

investment in the impugned property. The AO thus treated the amount of

Rs. 3,02,550/- as unexplained investment in the impugned property and

added the same to his total income u/s 69 of the Act. The AO further

observed that the assessee had shown miscellaneous income of Rs.

22,155/- in his return. The AO asked the assessee about source of this

income for which the assessee replied that this income pertained from

servicing and minor carried out by his wife’s concern for which he has no

8 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur record. The AO further noted that the assessee admitted that only half of

such income had been shown. On the basis of assessee's own admission,

the remaining half i.e. 22,155/- not disclosed by the assessee was added

by the AO in his total income. In first appeal, the ld. CIT(A) confirmed

the action of the AO. During the course of hearing, the ld. AR of the

assessee filed the written submission praying that the assessee may be

given one chance to contest his case properly as the assessee is a Govt.

servant and he is employed SMS Hospital, Jaipur. The assessee had filed

the fresh evidences before the ld. CIT(A) on the issue of investment of

amount in the property in question and the details of the loan taken from

15 persons but the same were not considered by the ld. CIT(A). Further

the assessee could not properly represent the case before the lower

authorities on the addition of Rs. 22,155/- made by the AO. Hence, in

view of the above facts and circumstances of the case, it will be in the

interest of equity and justice to restore the issue in question to the file of

the AO to decide it de novo by providing adequate opportunity of being

heard to the assessee. The assessee is also directed to produce all the

relevant documents/ details before the AO and cooperate in the

assessment proceedings. Thus the appeal of the assessee is allowed for

statistical purposes.

9 ITA No.785/JP/2016 Shri Nawal Kishore Sharma vs. ITO, Ward- 3(3) Jaipur 3.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 09 /01/2017. Sd/- ¼HkkxpUn½ (Bhagchand) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 09 /01/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Nawal Kishore Sharma, Jaipur izR;FkhZ@ The Respondent- The ITO, 3(3), Jaipur 2. 3. vk;dj vk;qDr¼vihy½@ CIT(A). vk;dj vk;qDr@ CIT, 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 785/JP/2016) vkns'kkuqlkj@ By order,

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