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Income Tax Appellate Tribunal, Kolkata Bench, KOLKATA
Before: SRI ABY T.VARKEYAND SHRI WASEEM AHMED
This is an appeal preferred by the Revenue against the order of the CIT(A)- XXIV, Kolkata, dt.29.07.2013, for assessment year 2009-10. 2. Ground No. 1 is general in nature and does not require adjudication. 3. Ground No. 2 is that the Revenue is aggrieved by the action of the Ld. CIT(A) in deleting the addition of Rs. 65,75,645/- on account of unexplained investment u/s 69 of the Act.
2 Sri Chandra Kumar Rathi A.Yr.2009-10 Brief facts of the case is that the assessee returned income of Rs.5,65,450/-. Later the case was selected for scrutiny. During the assessment proceedings, the AO after perusal of the ITS details found that the assessee invested to the tune of Rs.1,18,76,835/-. However, according to the AO, the assessee has only accounted for Rs. 53,05,190/-, so there was a difference of Rs.65,71,645/-, which the assessee has shown less in the books of account.According to the AO, since the assessee did not turn up in spite of notices issued u/s 142(1), had no other alternative but to invoke Section 144 of the Act and he went ahead with the Best Judgment Assessment. So, the difference of the amount of Rs. 65,71,645/- was deemed to be the unexplained investment u/s 69 of the Act. Aggrieved the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the same. Aggrieved by the decision of the Ld. CIT(A), the Revenue is before us.
We have heard both the parties and perused the records. We find that since the assessee did not turn up before the AO despite the notice u/s 142(1), the AO completed the assessment u/s 144 of the Act. However, during the assessment the AO perused the ITS details and found that the assessee has made investment of Rs.1,18,76,835/- whereas the assessee has accounted only Rs 53,05,190/- relating to investment in mutual funds. So, according to the AO, there is a difference of Rs.65,71,645/- which the AO added as unexplained investment u/s 69 of the Act. On appeal, the Ld. CIT(A) took note of the fact that the investment to the tune of Rs.65,71,645/- relates to 23 mutual funds statements which were produced before the Ld. CIT(A) from where it was found that 18 investments were made by the assessee’s wife Mrs. PremLataRathi [PAN: ADPR6811E] and the remaining 5 investments were made by the assessee’s mother Mrs. Radha Devi Rathi [PAN: ACNPR2456E]. The Ld. CIT(A) sought for the remand report from the AO. The AO vide remand report dt. 31.05.2013 stated as under:
“Further to our Letter/report dated 14.05.2013 sent to you, the confirmation from Citi Bank in respect of Smt. PremLataRathi has also been received. Thus confirmations for all the 2
3 Sri Chandra Kumar Rathi A.Yr.2009-10 four(4) enquiries sent to HDFC Bank & Citi Bank in respect of Smt. PremLataRathi& Smt. Radha Devi Rathi have been received. Copies of all the four confirmations are enclosed herewith for your kind perusal at your end.” It is seen from the confiramtions received from the banks that the assessee, Mr. Chandra Kumar Rathi is the 2nd joint holder in all the cases.”
After perusal of the aforesaid remand report, the Ld. CIT(A) has noted that the AO in his remand report has accepted that the investment of Rs.65,71,645/- was made in the name of the assessee’s mother and his wife and the investment was not under the name of the assessee. The Ld. CIT(A) noted that the assessee is only the 2nd joint holder in all the investments which are in dispute and, therefore, he ordered deletion of the addition made by the AO of Rs.65,71,645/- and gave a direction to the AO to take action in accordance to law, if he feels, against the first holder of the investment. We concur with the factual finding of the Ld. CIT(A) since in the remand report of the AO, the AO has accepted the fact that out of the 23 mutual funds, 18 investments were made by the assessee’s wife, Mrs. PremLataRathi, and the remaining 5 were made by the assessee’s mother, Mrs. Radha Devi Rathi, and the assessee was only the 2nd joint holder of the investments. In such a scenario, the addition made u/s 69 of the Act to the tune of Rs.65,71,645/- was unwarranted and the Ld. CIT(A) has rightly deleted the same and we uphold it and dismiss this ground of appeal
preferred by the Revenue. 1
6. Ground no. 3 is in respect to the deletion of Rs.1,12,514/-. Brief facts of the case is that the AO notes that the assessee has claimed deduction under Chapter-VIA, which could not be verified and so he was pleased to disallow the deduction claimed under Chapter-VIA and made an addition of Rs.1,12,514/-. Aggrieved the assessee preferred an appeal before the Ld. CIT(A), who was pleased to partly allow the claim of the assessee. Aggrieved by the said action of the Ld. CIT(A) the Revenue is before us.
4 Sri Chandra Kumar Rathi A.Yr.2009-10 7. We have heard both the parties and perused the records. We find that the main grievance of the Revenue is that the Ld. CIT(A) has given relief to the assessee by not following Rule 46A of the Income Tax Rules, 1962 (hereinafter “the Rules”) and allowed relief to the assessee in respect to the deduction of Rs.1,12,514/- claimed under Chapter-VI A. We note from the perusal of page-8 of the impugned order of the CIT(A) that the Ld. CIT(A) has clearly stated that the additional evidences along with the statements made by the assessee was sent to the AO for remand report but the AO was silent on this issue in the remand report forwarded by him and we note that while deciding the ground no. 2 we have gone through the remand report of the AO, and relevant part of the remand report of the AO for proper adjudication, that issue has been reproduced also (supra) therefore, the fact that the AO kept silent in the remand report on this issue as stated by the Ld. CIT(A) need not be disbelieved. We take note that the Ld. CIT(A) has noted that the assessee has paid insurance premium of Rs.7,00,000/- towards Birla Sun Life Insurance on 11.02.2009. Therefore, the Ld. CIT(A) directed the AO to give deduction u/s 80C of the Act of Rs.1,00,000/-. The Ld. CIT(A) also noted that the assessee has filed the evidence regarding the claim u/s 80D of the Act of Rs.8,764/- which he has examined and found to be in order and, therefore, the claim u/s 80D was also allowed. We find that the ground raised by the Revenue is erroneous because the Ld. CIT(A) has disallowed the claim of the assessee u/s 80G of the Act of Rs.3,750/- and the claim of the assessee in respect to donation receipt of Rs.7,500/- was not accepted by the Ld. CIT(A) and, therefore, the ground was partly only allowed by the Ld. CIT(A) and not the entire amount of Rs.1,12,514/- as raised in the ground of appeal of the Revenue before us.
8. In the light of the aforesaid facts which have been enumerated by the Ld. CIT(A) we do not find any infirmity in the order passed by the Ld. CIT(A) and so we confirm the same and dismiss this ground of appeal of the Revenue.