ITO, NEW DELHI vs. SMT. UMA MADAN LAL, NEW DELHI

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ITA 5995/DEL/2014Status: DisposedITAT Delhi30 October 2015AY 2005-064 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Revenue failed to demonstrate any infirmity in the CIT(A)'s order, particularly in accepting additional evidence. The Revenue also did not rebut the evidence considered by the CIT(A).

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting additions made on account of unverified sale transactions and unexplained credit entries. The assessee had initially claimed the sale proceeds of jewellery for bond purchases and explained credit entries as related to a joint account and sale of a residential flat.

What were the issues?

Whether the CIT(A) erred in accepting additional evidence without fulfilling the conditions of Rule 46A and in deleting additions based on such evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SMT DIVA SINGH

Hearing: 10.09.2015Pronounced: 30.10.2015

Date of Hearing 10.09.2015 Date of Pronouncement 30.10.2015 ORDER

The present appeal has been filed by the Revenue assailing the correctness of the order dated 28.08.2014 of CIT(A)-XXVIII, New Delhi pertaining to 2005-06 assessment year on the following grounds:-

1. “CIT(A) has erred in accepting additional evidences although none of the conditions under rule 46A was fulfilled and there was not genuine reason for not submitting evidence to AO.

2. CIT(A has erred in deleting the addition of Rs.4,98,015/- made on account of unverified sale transaction as identify of the partner of M/s Saraf Impex is not established even in appellate proceeding or during remand report proceedings.

3. CIT(A) has erred in deleting the addition of Rs.8,82,437/- by ignoring the fact that the assessee could not explain that the account in which source of credit entries could not be established was in the name of her daughter and how the bank account of daughter of the assessee was used by her and deposit pertained to whom. Payment received as per sale agreement do not match with the credit entries and details of account in which cheques were deposited not given.

4. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.”

2. The relevant facts of the case are that the assessee returned an income of Rs.11,800/- which was processed u/s 143(1). Subsequently the assessment was reopened after issuance of notice u/s 147/148 wherein the assessee was required to explain in the re-assessment proceedings the purchase of I.T.A .No.-5995/Del/2014 bonds/debentures of Rural Electrification Corporation Ltd. for Rs.5 lacs. In response thereto, it was explained as per record on behalf of the assessee that it was from the sale proceeds of jewellery held by her. The said claim was supported by copy of the purchase bill of M/s Saraf Impex showing purchase of jewellery of Rs.4,98,015/- on 25.07.2004. A notice u/s 133(6) was issued to M/s Saraf Impex at the given address at 1245, 2nd Floor, Kucha Mahajani, Chandni Chowk, Delhi-110006. M/s Saraf Impex was requried to corroborate the purchase bill and further to provide the following information:- 1. “………………..

2.

Furnish the copy of bank statement for the period from 1/4/2004 to 31.03.2005 highlighting the amounts of transactions with the said assessee.

3. Copy of daily stock register and ledger account showing the transaction with the assessee.

4.

Furnish copy of ITR filed by you for the A.Y.2005-06.” 2.1. The said notice came back unserved. After making another attempt to serve notice upon the M/s Saraf Impex it was concluded that the assessee’s claim was not genuine. 2.2. The assessee was also required to explain credit entries in her bank account. The assessee explained that it was a joint account held by Madanlal and his wife Mrs. Uma Madanlal which thereafter stood transferred in the name of Nandita Madan Lal the said explanation was also not accepted by the AO. Resulting in the addition being made.

3.

Aggrieved the assessee came in appeal before the First Appellate Authority. Before the said authority, the assessee filed fresh evidences. The fresh evidences it was explained were obtained by the assessee alongwith her son and it was explained that the assessee was in the process of permanently settling in United Kingdom and since during the assessment proceedings she was not available in India the representation made was based on facts readily available. The evidence being filed consisted of requisite papers collected from M/s Saraf Impex and it was pleaded that they may be taken on record. In regard to the credit entries in her bank account it was explained that the assessee alongwith her son had bought a residential flat in DLF, Gurgaon and part payment thereof was made by loan from CITI Bank. While shifting from India the assessee alongwith her son sold the house wherein part payment had been made to DLF alongwith the portion of loan cleared taken from CITI Bank. Page 2 of 4

I.T.A .No.-5995/Del/2014 The two payments it was submitted represented the squaring off of the transaction of purchase and of loan. The documents made available in support of the said entries were also sought to be placed on record. For ready-reference, the relevant extract from the impugned order is reproduced hereunder:- “We are filing some of the relevant papers to this effect. After visit of Mr. Kartik Madan Lal we have been able to get following further papers in support of the transactions. a) Purchase deed (Apartment buyers agreement) between DLF and Mrs. Uma Madan Lal (Marked enclosure 4) b) Copy of Sale Deed between Mrs. Uma Madan Lal and Mr.J.M.Gugnani, where these amounts have been highlighted as follows c) Rs.1,63,000 (paid vide cheque no.213768 dt.27/05/2004, drawn on ICICI Bank) Rs.5,28,255/- (Paid vide cheque no.213769 dt. 27/05/2004, drawn on ICICI Bank) Rs.6,91,255/- (Marked enclosure 5) d) Copy of covering letter from DLF which confirm the payment of Rs.1,91,182/- vide cheque no076264 dated 05/05/2004 (Marked enclosure 6)” 3.1. The cash deposit of Rs.1 lac as a result of deposit of whatever cash was available with the elderly lady was deposited in the bank immediately before migrating to U.K. alongwith her family. 3.2. The record shows that the CIT(A) remanded the evidences to the AO. Considering the reply of the AO, the CIT(A) allowed relief to the assessee which is under challenge in the present proceedings.

4. Ld. Sr.DR, Sh. B.R.R.Kumar relies upon the impugned order.

5.

Considering the facts on record and the submission of the Ld. Sr.DR, I am of the view that the grounds raised by the Revenue deserve to be dismissed. A reading of para 4 at page 2 to 4 of the impugned order would show that the assessee’s arguments on facts for deletion of the additions made have been recorded and the admission of fresh evidences on facts have been recorded by the CIT(A) which have been considered in para 4.2 at page 5 to para 4.5 till page 9 of the impugned order. On a consideration of the same, I find that no infirmity either in accepting the fresh evidences on record has been addressed by the Revenue nor has the Revenue attempted to rebut the evidences taken on record. Considering the facts and arguments on record which have been addressed in the earlier part of this order in the absence of any infirmity in the order and in the absence of any rebuttal on facts being satisfied with the I.T.A .No.-5995/Del/2014

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