TMI Blog2018 (11) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... structure and organization. Firstly, in computation of assessee’s total income for the year under consideration, we direct the AO to delete the additions in respect of those amounts which were invested by the Assessee in earlier years i.e. before previous year 2008-09 relevant for A.Y. 2009-10. AO is directed to quantify this amount while giving effect to this order. Secondly, we also direct the AO to delete the addition amounting to ₹ 6,05,000/- which was made by the assessee during the year under consideration through cheque transactions of the assessee in her bank accounts in Allahabad Bank and Punjab National Bank; because, as stated earlier, it is not disputed that the assessee had sufficient deposits in her bank account at the beginning of the year to explain the source of aforesaid transactions by cheque. Thirdly, as far as investment totaling aforesaid amount of ₹ 6,53,100/- in cash is concerned, we restore the matter to the file of the AO with the direction to pass a fresh order on merits on this limited issue after considering the explanation of the assessee. At this stage we are expressing no opinion on merits of the explanation tendered by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax Appeal as CIT(A) c. Departmental Representative as DR d. Dated as dtd. e. Income Tax Act as I.T. Act f. Income Tax Appellate Tribunal as ITAT g. Learned as Ld. h. Under Section as U/s (2) The appeal filed by the Assessee is late by 5 days having regard to Section 253(3) of I.T. Act. The Assessee has filed petition for condonation of delay in filing of this appeal. The relevant portion of the petition is reproduced as under:- The appeal bearing number 6909/Del/2014 should have been filed in your court upto 18th December 2014 since the appeal order was served upon appellant on 19th October, 2014. Although the appellant dispatched the appeal in time through speed post on 18th December, 2014 but it might have reached your esteemed court after 19th October, 2014 due to some delay in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of All Bank Accounts. Copy of Rejoinder to Remand Report. Copy of Judgment of Sarogi Credit Corporation. Copy of Judgment of CIT V/s Daulat Ram Rawat Mull Copy of Judgment of Nemi Chand Kothari V/s CIT. (3.1) Further, the Ld. Counsel for Assessee also filed the following particulars: Page of Paper Book Date Amount Ch. No. Bank Remark/Source of Credit in Bank 47 21.07.2006 4,00,000.00 130095 HSBC Payment from opening balance of ₹ 4,75,029.00 in saving bank A/c of her own savings 41 28.07.2006 5,00,000.00 00009 Kotak Mahindra Payment from Opening Balance of ₹ 1,54,495.00 in bank. ₹ 3,45,505.00 overdraft by Bank. 42 05.08.2006 5,00,000.00 00010 Kotak Mahindra Payment from Opening Balance of ₹ 82,596.00 in bank. ₹ 4,17,404.00 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further submitted that the remaining amount of investment was made in the earlier year(s) for which no addition can be made in the year under consideration. He also submitted that the aforesaid investment of ₹ 9,05,000/- during this year included ₹ 1,05,000/- through cheque payment out of the Assessee s Bank Account namely Allahabad Bank on 26.07.2008, and two payments of ₹ 2,50,000/- each, out of the Assessee s Bank Account in Punjab National Bank on 17.08.2008. The remaining amount of ₹ 3 lacs out of the aforesaid amount of ₹ 9,05,000/- was made in cash, and stamp duty charges of ₹ 3,53,100/- were also paid in cash: thus, making total investment in cash amounting to ₹ 6,53,100/- during the year under consideration. The Ld. Counsel for Assessee took us through copies of the Assessee s account from the books of the builder from whom the property was purchased. He also took us through the copies of account statements of the Assessee s banks accounts. The Ld. Counsel, with the help of Paper Book showed us that there were sufficient deposits in the bank accounts of the assessee, carried forward from earlier year, to explain the source of afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her brother and the counsel at Noida was engaged by him only. He was busy in her marriage celebrations at the crux of time hence failed to focus on assessment proceedings at Noida. She persuaded her counsel on telephone only and had bonafide belief that her case was being attended to. A major reason of her non appearance on hearing occurred due to her ill health. The photocopy of her medical certificates is being appended herewith for your kind reference. Annexure - A Sir, an Ex - Parte assessment cannot be supported in the eyes of law. The appellant did not find justice at the hands of the L'D assessing authority. An order which is made Ex - Parte cannot be justified. The appellant being lady was not aware of the consequences which followed later and also of the fact that the matter shall be time barred shortly hence cannot be penalized in such a way as observed by Hon'ble Apex Court in the case of M/s Moti Lai Padam Path Sugar Mills Co., V/s State of U.P., reported in 118 ITR, Page - 330 in which court observed as under:- A common man is not supposed to know each and every law of land while these laws are in abundance and act committed in ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment in the above property from the following source. Sources of Funds Amount invested by Shri Rahul Singh, brother of the appellant on account of Km. Preeti Singh after making withdrawal from his ICICI Bank Ltd, Meerut A and transferred to O.B.C. through Ch. No. 506635. Shri Rahul Singh sold flat no.798 at pocket -2, Sec-13, Dwarika and deposited the amount in his bank account ICICI Ltd, Meerut, the Sh. Rahul Singh is assessee with PAN: AJBPS0370D T The entire transaction reflected in his Income Tax returns Rs.18,70,000.00 Amount invested by father Shri Pawan Kumar Singh, also an Income Tax assessee with PAN: AJBPS0369W in property under question in the name of his daughter after selling the property in F.Y. 2005-06 and 2006-07 situated at Shaym Nagar, Meerut. The entire transaction reflected in his Income Tax Returns. ₹ 12,71,000.00 Amount Invested by assessee from her income and savings made in previous years and deposited with the seller from time to time. ₹ 3,59,000.00 Registration Expenses met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,95,875.00 45,283.00 42,000.00 4,50,491.00 2007-08 2,02,102.00 45,283.00 45,000.00 5,62,310.00 2008-09 2,07,565.00 49,346.00 55,000.00 6,85,529.00 2009-10 2,44,339.00 49,346.00 65,000.00 7,95,522.00 The chart above shows that the appellant incurred capital of around ₹ 8.00 Lacs from her own sources, after deductions and withdrawal and the same cannot be questioned. The L d first appellate authority did not consider this fact also. Therefore the investment declared by appellant worth ₹ 7,12,100.00 may kindly be approved in the interest of justice. The copies of all returns were filed before the L d assessing authority along with statement of income in support of the defence taken in respect to investment made in the property. Sir, the L'd assessing officer made the assessment without giving proper opportunity of hearing to the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd raised this objection that the appellant deliberately did not furnish the copy of this account. The bank account questioned by the L'd assessing officer belongs to the builder company M/s Ultra Home Construction Pvt. Ltd. and not to the appellant. The L'd assessing officer did not bother to inquire this bank account and furnished remand report on wrong facts against the appellant. The L'd first appellate authority viewed that the appellant did not produce copy of bank account and statement of cash flow. His objection was not sustainable since the appellant furnished all copies of bank statement along with remand report. The cash flow statement was also drawn at page 2 of the submissions made at the time of remand proceedings. Lower authorities did not consider the amount invested by appellant out of her own savings. They did not even consider the fact that the major payment was made in the previous years. Assessment order as well as appeal order confirming such addition is not only arbitrarily but wrong also. (3.2.1) In respect of aforesaid cash investment totaling ₹ 6,53,000/- during the year under consideration, the Ld. Counsel for Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e totaling ₹ 6,05,000/-. It is further not disputed that the deposits in the bank accounts of the assessee at the beginning of the year had accumulated in the past, across several years. It is also not disputed that the assessee had made significant amounts of withdrawals in cash, out of her bank account in an earlier year. (4.1) It will be useful to refer to Section 4 of I.T. Act, which is the charging section. For ease of reference, Section 4 is reproduced as under:- Charge of income-tax. 4. ( 1) Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and [subject to the provisions (including provisions for the levy of additional income-tax) of, this Act] in respect of the total income of the previous year of every person : Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. ( 2) In respect of income chargeable under sub-section (1), income-tax shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice adopted by the assessee or otherwise, it does not entitle Revenue to assess the same as the income of any subsequent year when the mistake becomes apparent. (4.2) In view of the aforesaid undisputed facts, and the legal position we dispose off this appeal with the following directions. Firstly, in computation of assessee s total income for the year under consideration, we direct the AO to delete the additions in respect of those amounts which were invested by the Assessee in earlier years i.e. before previous year 2008-09 relevant for A.Y. 2009-10. The AO is directed to quantify this amount while giving effect to this order. Secondly, we also direct the AO to delete the addition amounting to ₹ 6,05,000/- which was made by the assessee during the year under consideration through cheque transactions of the assessee in her bank accounts in Allahabad Bank and Punjab National Bank; because, as stated earlier, it is not disputed that the assessee had sufficient deposits in her bank account at the beginning of the year to explain the source of aforesaid transactions by cheque. Thirdly , as far as investment totaling aforesaid amount of ₹ 6,53,100/- in cash is con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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