MS ANNIE KISHAN,GURGAON vs. DCIT, NEW DELHI

Brief facts of the case are that the assessee is a salaried employee working as Head CSR with Pepsi Foods Pvt. Ltd. She filed her return of income for AY 2011-12 on 31.07.2011 declaring a total income of Rs. 53,09,654/- and a short term capital loss of Rs. 3,043/- and also claimed deductions u/s 80C & 80G of the Act amounting to Rs. 1 lakh and Rs. 6,000/- respectively. AO added back an amount of Rs. 14,19,432/- as undisclosed investment in mutual funds, failed to give the benefit the tax deducted at source in respect of perquisites to a tune of Rs. 3,36,423/- and added Rs. 1,06,000/- disallowing the claim of the assessee for deduction u/s 80C and 80G of the Act. AO also initiated penalty proceedings and by way of order dated 24.09.2014 he imposed a penalty of Rs. 5,75,313/-.

Appeals preferred against the assessment and penalty orders were dismissed by the Ld. CIT (A)-XXI, New Delhi by way of order dated 11.11.2016.

Aggrieved by the orders of the authorities below, the assessee preferred challenging the confirmation of the additions and challenging the 3 Stay Nos. 243 & 244/Del/2017 & & 1981/Del/2017 confirmation of the penalty. Pending disposal of the appeals the assessee preferred stay petitions in Stay Petitions Nos 243 & 244/Del/2017.

As could be seen from the order of the Ld. Commissioner of Income Tax confirming the quantum additions, Ld. CIT (A) observed that the assessee failed to furnish before the AO material in support of her claim and during the appellate proceedings also she failed to substantiate her claim with cogent evidence. On these observations the Ld. CIT (A) upheld the additions made by the AO and also confirmed the penalty. During the course of these proceedings before us while we are hearing the stay petitions Ld. Counsel produced by way of Paper Book the copy of the mutual fund statement, copy of Form 16 on two different dates along with Form 12BA, etc. and drew our specific attention to page nos. 14 to 16 in respect of portfolio statement and transactions as contained in the entry dated 25/06/2010 in respect of IDFC equity fund dividend amounting to Rs. 8,56,892/- showing that those entries are in respect of switch out and switch in. Similarly at page no. 16 similar entries were there bearing the date of 04.05.2010 in 4 Stay Nos. 243 & 244/Del/2017 & & 1981/Del/2017 respect of HDFC Infrastructure Fund Growth and HDFC Monthly Income Plan amounting to Rs. 5,62,540/-. By showing these entries Ld. Counsel explained that there is no fresh investment to a tune of Rs. 14,19,432/- but it was only the reinvestment of the same funds which was invested earlier.

So also in respect of denial of TDS amounting to Rs. 1,04,863/- in respect of perquisites to a tune of Rs. 3,36,423/- is concerned. Ld. Counsel submits that it was reflected in Form No. 26AS and the fresh Forms 16A issued by the Company. He produced such evidence vide page nos. 12, 13 & 17 to 22 of the Paper Book. He submitted that in respect of the claim for deduction u/s 80C & G also sufficient evidence is produced but the Ld. CIT (A) failed to appreciate the same property.

It is the argument of the Ld. DR that all these facts need verification at the end of the AO and since the assessee failed to submit all the material before the AO there was no occasion for the AO to examine all these documents to reach the just tax liability of the assessee as such in the absence of the verification of this 5 Stay Nos. 243 & 244/Del/2017 & & 1981/Del/2017 material by the AO no credence could be given to these documents and no conclusions could be reached as to their veracity.

On this submission of the Ld. DR that the documentary evidence produced by the assessee requires the verification by the AO, Ld. AR submits no objection. At this stage Ld. AR as well as Ld. DR submitted that since the documents need verification at the end of the AO to reach the just tax liability of the assessee no purpose would be served by disposing of the stay petitions alone or to keep the appeals pending as such appeals may be heard and decided at this stage itself. Since both the sides are ready to proceed with the appeals, we proceeded to hear the appeals on merits.

A careful consideration of the orders of the authorities below indicates that the assessee failed to substantiate her claim before the AO by producing cogent and convincing evidence. So also even before the Ld. CIT (A) no such exercise was undertaken. Observing that there is no material in support of the claim of the assessee, the authorities below concluded that the assessee is not entitled to the benefits claim. However, since such material is produced now

With this view of the matter, we dismiss both the stay petitions and allow & 1981/Del/2017 for statistical purposes.