TMI Blog2007 (12) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... mt. Mamta Gupta as undisclosed income; 9. confirming the disallowance of Rs. 2,000 out of Rs. 18,268 made by AO on account of interest on the deposit of Smt. Mamta Gupta; 10. not allowing the set off of addition on various counts; and 11. charging interest under ss. 234A, 234B and 234D of the Act. 2. Heard and considered the arguments advanced by the parties in view of orders of the lower authorities, material available on record and the decisions relied upon by them. Ground Nos. 1 and 2 3. In support of these grounds, the learned Authorised Representative submitted that the assessee is a proprietor of M/s RCA Products and engaged in the business of trading of slats. Return of income was filed at Rs. 28,361 on 31st Dec., 1999 which was processed under s. 143(1) on 13th June, 2000. The AO taking note of the assessment proceedings for asst. yr. 2001-02 observed that there were two cash credits of Sh. Manoj Kumar Gupta of Rs. 1,00,000 received in cash on 26th March, l999 and from Smt. Mamta Gupta wherein Rs. 61,000 were deposited on cash on 16th March, 1999. Since the assessee had paid and claimed interest payment to these creditors, the AO in the proceedings for asst. yr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , late Sh. Harish Chandra Mittal, by way of gift of Rs. 1,00,000 on 24th March, 1999 to Smt. Kamla Devi for Bandobast of the assessee. Because of his death wife Smt. Kamla Devi had confirmed the same. The capital account of Sh. Harish Chandra Mittal for asst. yr. 1999-2000 filed before the AO clearly shows that the amount was withdrawn for "gift to daughter's husband-Rs. 1 lac". Notably Smt. Kamla wife of the donor filed an affidavit on 20th March, 2004. The AO, however, did not choose to summon her under s. 131 and therefore contents of affidavit of Smt. Kamla Devi remained uncontroverted. All these details were made available before the AO during the course of assessment proceedings for asst. yr. 2001-02 and the new thing which happened was the recording of statements of Sh. Yogendra Mittal s/o Late Shri Harishchand Mittal. the donor. The earlier facts are all duly recorded in the very reasons. There is no adverse note in the reasons that some contrary material came to the notice of AO. Regarding the cash creditor Smt. Mamta Gupta, the learned Authorised Representative submitted that the assessee had filed copies of capital account balance sheet, confirmation and return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anker vs. ITO (1991) 39 TTJ (Ahd) 223 wherein it was held that where deposits were not treated as non-genuine in the year of receipt and interest thereon was never disallowed in the past, no disallowance in respect of interest can be validly made. Even on the merit of the genuineness of the above two cash credits, we prima facie find that the assessee had furnished necessary informations about them to the AO and the AO has not bothered himself to verify the correctness of these informations. We however, do not want to comment on genuineness of these cash credits because it is beyond our jurisdiction and records of these years are not available with us. At the same time it is worth noting that when the Department itself in earlier years as it has been noted by the Tribunal in para No. 13 of the order dt. 20th Oct., 2006 for asst. yr. 2001-02, has accepted the genuineness of these above cash credits and interest paid by the assessee thereon has been allowed, there was no reason with the AO to initiate the reopening proceedings on this belief that interests claimed to have been paid by the assessee to the above two cash creditors are not genuine and is escaped income from assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Authorised Representative submitted further that even on merits the additions questioned in ground Nos. 3 to 5 are covered with the decision of Tribunal in the case of assessee for the asst. yr. 2001-02 wherein under the similar set of facts and circumstances of the case the Tribunal has upheld the first appellate order deleting the addition simply made on presumption and without any positive evidence of non-genuineness of the expenditure. 7. The learned Departmental Representative on the other hand tried to justify the first appellate order with this submission that under the amended provisions of s. 147 of the Act w.e.f. 1st April, 1989 the AO has got vide power to reopen an assessment if he has reasons to belief that chargeable income has escaped assessment. He submitted further that in the present case admittedly, return of income as processed under s. 143(1) of the Act and only during the course of reopening proceedings it came to the notice of the AD that several other incomes have escaped from assessment. He was thus justified in disallowing those claims about expenditure, etc. and making additions of those amounts in the income of the assessee to tax the same. 8. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 to 7 are thus allowed. Ground Nos. 8 and 9 9. In support of these grounds the learned Authorised Representative submitted that the AO noted that Smt. Mamta Gupta had deposited Rs. 61,000 on 16th March, 1999 with M/s R.C.I. Products, proprietor concern of the assessee by cheque. The AO disallowed this claim and made additions of Rs. 61,000 and interest paid by the assessee on the said deposit i.e. Rs. 18,268. The learned CIT(A) though has upheld the addition of Rs. 61,000 under s. 68 of the Act but has reduced the disallowance of interest to Rs. 2.000. He submitted that in her statements Smt. Mamta Gupta had stated to have given Rs. 61,000 and Rs. 65,000 to M/s R.C.I. Products. The source of Rs. 61,000 was stated in answer to question No. 7 to be out of a gift received from her father-in-law, Sh. Babulal Gupta by cheque. The AO however did not accept the same alleging that copy of bank pass book of the creditor, Smt. Mamta Gupta was not produced though she stated that the computer hard disk of the bank was damaged. The learned CIT(A) has held that the gift declaration by Sh. Babulal Gupta was not relevant as it was dt. 16th March, 1999 whereas declaration refers to the gift o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 206 CTR (Raj) 626 : (2006) 286 ITR 477 (Raj). The learned Authorised Representative submitted that the learned CIT(A) has rejected the explanation of the assessee on the basis that he has changed his version. He submitted that there cannot be any admission over facts so as to work as an estoppel, provided the facts are available on record. If a bona fide mistake has been committed, the assessee is entitled to retract from the same. In this regard he placed reliance on the decision in the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerela 1972 CTR (SC) 253 : (1973) 91 ITR 18 (SC). 10. The learned Departmental Representative on the other hand tried to justify the first appellate order upholding the addition under s. 68 of the Act relating to the cash credit of the creditor Smt. Mamta Gupta in absence of evidence to support the claim of the assessee in this regard. 11. Considering the above submissions we find substance in the contention of the learned Authorised Representative that an assessee is always at liberty to retract from admissions made by him in his statements to the authority if there is bona fide mistake supported by evidence. In the present case the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Rs. 39,700 made by the AO on account of household withdrawals; 7. confirming the addition of Rs. 87,500 made by the AO treating the outstanding balance of M/s Keladevi Transport Co. as undisclosed income; 8. partly confirming disallowance of Rs. 10,980 as against Rs. 21,690 made by AO on account of disallowance of interest on the deposit of Smt. Mamta Gupta; 9. not allowing the set off of addition on various counts; and 10. charging interest under ss. 234A, 234B and 234D. 15. Heard and considered the arguments advanced by the parties in view of orders of the lower authorities, material available on record and the decisions relied upon by them. Ground Nos. 1 and 2 16. Similar arguments have been adopted by the parties as advanced by them on the identical issues raised in ground Nos. 1 and 2 in the above appeal ITA No. 1013/Jp/2006. We thus following the decision taken therein of which we are not repeating here for the sake of brevity, decide these grounds in favour of the assessee holding the notice issued under s. 148 of the Act and assessment made in furtherance thereto as invalid. Ground Nos. 3 to 8 17. Similar arguments have been adopted by the parties which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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