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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
PER KULDIP SINGH, JUDICIAL MEMBER :
in all the aforesaid appeals, the same are being disposed off by way of consolidated order to avoid repetition of discussion.
The appellant, Smt. Sangeeta Aggarwal (hereinafter referred to as ‘the assessee’) by filing the present appeals, sought to set aside the impugned order dated 08.10.2014 & 09.10.2014 passed by Ld. CIT (Appeals)-III, New Delhi qua the assessment years 2007-08 & 2008-09 and 2009-10 & 2010-11 respectively on the grounds inter alia that:-
“ (AY 2007-08) 1. That the Learned CIT (A) has erred both in law and on facts of the case in sustaining the addition of Rs.6,27,000/- on account of unaccounted investment and interest income accrued on FDR of Rs.6,00,000/- from Bansal Credits Limited on account of undisclosed income. The CIT (A) has erred in dismissing the ground of appeal of Appellant on the basis of relying that the FDR of Rs.6,00,000/- belongs to Appellant and investment in it were made from her undisclosed sources as well as the interest on FDR amounting to Rs.27,000/- belongs to Appellant. The addition made on this ground was purely on the basis of assumption, surmises and conjectures of the Assessing Officer without any iota of evidence, cogent material or corroborative evidence in the hands of Department. The addition made on this account is totally unjustified, arbitrary, flagrantly contrary to the principle of natural justice hence the addition on this account should be deleted as the same is bad in law.” “ITA NO.6624/DEL/2014 (AY 2008-09)
1. That the Learned CIT (A) has erred both in law and on facts of the case in sustaining the addition of Rs.3,64,545/- on account of unaccounted investment and 3 6624, 6625 & 6626/Del./2014 interest income accrued on FDR from Bansal Credits Limited on account of undisclosed income. The CIT (A) has erred in dismissing the ground of appeal of Appellant on the basis of relying that the FDR of Rs.3,00,000/- belongs to Appellant and investment in it were made from her undisclosed sources as well as the interest on FDR amounting to Rs.64,545/- belongs to Appellant. The addition made on this ground was purely on the basis of assumption, surmises and conjectures of the Assessing Officer without any iota of evidence, cogent material or corroborative evidence in the hands of Department. The addition made on this account is totally unjustified, arbitrary, flagrantly contrary to the principle of natural justice hence the addition on this account should be deleted as the same is bad in law.”
“ITA NO.6625/DEL/2014 (AY 2009-10)
1. That the Learned CIT (A) has erred both in law and on facts of the case in sustaining the addition of Rs.76,008/- on account of interest accrued on FDR of Rs.9,00,000/- from Bansal Credits Limited relying that the FDR of Rs.9,00,000/- belongs to Appellant and investment in it were made from her undisclosed sources during the financial year 2006-07 & 2007-08 i.e. RS.6,00,000/- in f.y. 2006-07 and Rs.3,00,000/- in f.y. 2007-08. The addition made on this ground was purely on the basis of assumption, surmises and conjectures of the Assessing Officer without any iota of evidence, cogent material or corroborative evidence in the hands of Department. The addition made on this account is totally unjustified, arbitrary, flagrantly contrary to the principle of natural justice hence the addition on this account should be deleted as the same is bad in law.”
“ITA NO.6626/DEL/2014 (AY 2010-11)
That the Learned CIT (A) has erred both in law and on facts of the case in sustaining the addition of Rs.44,253/- on account of interest accrued on FDR of Rs.9,00,000/- from Bansal Credits Limited relying that the FDR of Rs.9,00,000/- belongs to Appellant and investment in it were made from her undisclosed sources during the financial year 2006-07 & 2007-08 i.e. Rs.6,00,000/- in F.Y. 2006-07 & Rs.3,00,000/- in F.Y. 2007-08. The addition made on this ground was purely on the basis of assumption, surmises and conjectures of the Assessing Officer without any iota of 4 6624, 6625 & 6626/Del./2014 evidence, cogent material or corroborative evidence in the hands of Department. The addition made on this account is totally unjustified, arbitrary, flagrantly contrary to the principle of natural justice hence the addition on this account should be deleted as the same is bad in law.
2. That the Ld. CIT (A) has erred both in law and on facts of the case in confirming the addition of Rs.17,00,000/- as income from undisclosed sources. The addition made on this ground is purely on the basis of assumptions, surmises and conjectures without any iota of evidence, cogent material or corroborative evidence in the hands of Department. The addition made on this account is totally unjustified, arbitrary, flagrantly contrary to the principle of natural justice hence the addition of Rs.17,00,000/- on this account needs to be deleted in full as the same is bad in law.
That the Ld. CIT(A) erred both in law and on facts of the case in confirming the addition on adhoc basis to the extent of Rs.1,00,000 expenditure met from undisclosed sources in the marriage of her daughter. The addition made on this ground is purely on the basis of guess work, assumptions, surmises and conjectures without any iota of evidence, cogent material or corroborative evidence in the hands of Department. Therefore addition made on this account is totally unjustified, arbitrary, flagrantly contrary to the principle of natural justice hence the addition of Rs.1,00,000/- on this account needs to be deleted in full as the same is bad in law.”
Briefly stated the facts necessary for adjudication of the controversy at hand in the aforesaid appeal for AY 2007-08 are : during the search operation at the premises of assessee, a laptop was seized containing fact that the assessee is holding FDR in her own name as well as in the name of her family members worth Rs.6,00,000/- for AY 2007-08 issued by Bansal Credits Ltd.. Out of the aforesaid FDRs, assessee alleged that FDR worth FDRs were kept with assessee in safe custody and the remaining FDRs of Rs.2,00,000/- in the name of Smt. Sarla Gupta, mother and Shri H.M. Aggarwal, father-in-law of the assessee which were from their respective sources. AO, declining the contentions raised by the assessee, held the amount of Rs.6,27,000/- as income of the assessee and thereby added the same to the income of the assessee for AY 2007-08.
For AY 2008-09, AO noticed from the laptop seized during search operation from the assessee that there are FDRs of Rs.3,00,000/- which the assessee claimed to be belonging to her sister residing in USA. On failure of the assessee to bring on record any evidence to prove as to how the funds have travelled from USA to India, AO made addition thereof to the total income of the assessee for AY 2008-09.
For AY 2009-10, AO noticed from the laptop that from the FDR in the name of assessee for AYs 2006-07 & 2007-08 for Rs.9,00,000/-, interest of Rs.76,008/- was accrued on FDR of Rs.9,00,000/- from Bansal Credits Ltd.. On failure of the assessee to bring on record any evidence on the source of FDRs, AO made addition of Rs.76,008/- and Rs.44,253/- on account of interest 2010-11 respectively.
In AY 2010-11, AO also noticed from the entries made in laptop annexed as Annexure ‘B’ with the assessment order that the assessee has purchased a plot at “Vatika” for Rs.60,00,000/- (Rs.57,00,000/- + Rs.3,00,000/- cost of registry). Out of which Rs.17,00,000/- was paid in cash by the assessee and Rs.3,00,000/- paid in cash for registry and Rs.29,25,000/- was financed by Axis Bank and Rs.10,75,000/- were paid by Ajay, husband of the assessee. Declining the contentions raised by the assessee, AO treated the amount of Rs.17,00,000/- paid by the assessee to her husband as unexplained investment and thereby made the addition thereof to the income of the assessee. AO also noticed form the seized material that during the year under consideration, marriage of daughter of the assessee was solemnized and three functions were organized viz. Mata ki Chowki at the residence at Faridabad, Ring Ceremony at Hotel Mansingh Palace, Jaipur and marriage ceremony at Hotel Rajputana Sheraton whereas household withdrawals were to the tune of Rs.1,12,402/-. Declining the contentions raised by the assessee, AO estimated the expenses to the tune of Rs.2,50,000/- on videography, flower decoration etc. income of the assessee.
Assessees carried the matter by way of appeals before the ld. CIT (A) who has partly allowed the appeals. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeals.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
GROUND NO.1 IN ITA No.6623/Del./2014 (AY : 2007-08) ITA No.6624/Del./2014 (AY : 2008-09) ITA No.6625/Del./2014 (AY : 2009-10) ITA No.6626/Del./2014 (AY : 2010-11)
Undisputedly, FDRs of Rs.6,00,000/- with Bansal Credits Ltd. are in the name of the assessee. It is also not in dispute that the interest on these FDRs is being accrued and paid to the assessee. It is also not in dispute that the assessee has not brought any evidence on record except confirmation letter from her sister residing at USA to prove that she has received amount of Rs.4,00,000/- from her. Out of the amount of Rs.6,00,000/- invested in FDRs, Rs.4,00,000/- belongs to her sister residing in the basis of seized material u/s 32(4)/292C of the Income-tax Act, 1961 (for short ‘the Act’) and the assessee has failed to rebut the presumption that the amount of FDRs belongs to her, there is no scope to interfere into the findings returned by ld. CIT (A) moreover when sister of the assessee is residing in USA, there is not an iota of evidence on the file as to how the amount of Rs.4,00,000/- has travelled to the assessee to be deposited in the FDR with Bansal Credits Ltd.. Such a huge amount in 2007-08 must have been transferred through banking channel, but no evidence is there on file. Furthermore when the interest on these FDRs has been accruing on year to year basis at least the same might have been declared by her sister in her return of income.
Merely on the basis of contentions of the assessee that US authorities had not kept the record intact does not absolve the assessee to rebut the presumption attached to the fact that the FDRs are admittedly in the name of the assessee as per seized material.
Assessee has also failed to prove if the remaining amount of Rs.2,00,000/- has been transferred to her by her mother and father- in-law by proving the fact that if they had shown the same in their return of income. the AO and confirmed by ld. CIT (A) for AY 2008-09. Again, assessee has taken the defence that the amount of Rs.3,00,000/- belonged to her sister residing in USA for purchasing FDRs to be spent by her as and when she visits India. So, for this amount also, except confirmation no document has been brought on record by the assessee to prove as to how this amount was transferred to the assessee or if the sister of the assessee was in possession of such an amount with her. So, we are of the considered view that there is no scope of interference in the findings returned by ld. CIT (A) who confirmed the addition of Rs.6,00,000/- and Rs.3,00,000/- for AYs 2007-08 & 2008-09 respectively as unexplained income of the assessee. So, in these circumstances, grounds no.1 in AYs 2007-08 & 2008-09 are determined against the assessee.
So far as additions of Rs.76,008/- and Rs.44,253/- for AYs 2009-10 & 2010-11 are concerned, in the light of the findings returned in the preceding paras, when the principal amount is held to be belonging to assessee as unexplained income, interest accrued thereon also belongs to the assessee. So, in these circumstances, grounds no.1 in AYs 2009-10 & 2010-11 are determined against the assessee.
Income-tax Appellate Tribunal Rules, 1963 sought to bring on file copy of confirmation letter given by Vatika Limited on the ground that due to ignorance of procedure and law, the assessee had omitted to file this document. Application has been vehemently opposed by ld. DR on the ground that the same cannot be moved at the time of hearing. However, we are of the considered view that when the entire case of the assessee hinges upon the fact as to what is the price of flat in question purchased by the assessee, the documents sought to be brought on record cannot be disallowed merely on the basis of procedural technicalities. So, we allow the application moved by the assessee to bring on record the confirmation given by Vatika Limited.
Addition of Rs.17,00,000/- has been made by the AO on the basis of seized material, Annexure ‘B’ extracted from the laptop, which is extracted by the ld. CIT (A) in Para 8.2 at page 14 of the impugned order, wherein cash amount of Rs.17,00,000/- and Rs.3,00,000/- for registry is shown to have been paid to Vatika Limited. It is not in dispute that for purchasing the said property by Vatika Limited, Ajay Aggarwal, husband of the assessee availed of the case of the Revenue that the remaining amount was also paid to Vatika Limited for purchase of flat for Rs.57,00,000/-.
Assessee to rebut the information contained in the seized material only relied on the fact that subsequently assessee preferred to buy a 2BHK flat for Rs.42,48,072/- instead of 3BHK flat for Rs.60,00,000/- and relied upon the confirmation given by Vatika Limited showing details of payment of Rs.42,48,072/-. First of all, confirmation letter relied upon by the assessee does not disclose the name of the issuing authority. Secondly, un-rebutted seized document Annexure ‘B’ categorically shows that the payment of Rs.17,00,000/- in cash was made by the assessee to Vatika Limited on behalf of her husband.
Furthermore, the assessee has also not brought on record sale deed / allotment or transfer deed for purchasing 2BHK instead of 3BHK for which amount of Rs.57,00,000/- is proved to have been paid. Furthermore, when the assessee has spent an amount of Rs.3,00,000/- on the sale deed for 3BHK flat, she has failed to clarify on file if that sale deed has got cancelled for executing of the new sale deed of 2BHK by paying stamp duty of Rs.2,28,481/-.
So, we are of the considered view that ld. CIT (A) after appreciating the facts in the light of the settled principles of law in of the provisions contained u/s 132 (4) of the Act read with section 292C. So, the findings returned by AO as well as ld. CIT (A) are hereby affirmed and ground no.2 for AY 2010-11 is determined against the assessee.
GROUND NO.3 IN ITA No.6626/Del./2014 (AY : 2010-11) 19. AO made addition of Rs.2,50,000/- to the income of the assessee being unexplained expenditure in marriage of her daughter on stay expenses, videography, flower decoration etc. which was restricted to Rs.1,00,000/- by the ld. CIT (A).
Undisputedly, the assessee has filed details of the expenditure and sources before ld. CIT (A) explained at page 23 of the impugned order, which has been accepted by the ld. CIT (A).
Now, the dispute is qua addition of Rs.1,00,000/- which is purely on estimate basis made by AO as well as ld. CIT (A). We are of the considered view that when the misc. expenses of Rs.4,20,000/- has been accepted by the Revenue authorities, there is no need to go for estimation. Moreover, in the marriage of a daughter, some expenses are invariably made from the savings made by the family members. So, we are of the considered view Consequently, ground no.3 for AY 2010-11 is determined in favour of the assessee.
Resultantly, the appeals filed by the assessee for AYs 2007- 08, 2008-09 & 2009-10 in ITA No.6623/Del./2014, ITA No.6624/Del./2014 & ITA No.6625/Del./2014 respectively are dismissed and appeal filed by the assessee for AY 2010-11 in ITA No.6626/Del./2014 is partly allowed. Order pronounced in open court on this 8th day of October, 2018.