D.b. Income Tax Appeal v. The Commissioner Of Income Tax, Ncrb Building Statue Circle, Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. D.B. Income Tax Appeal No. 167/2002 APPELLANT Smt. Neelam Saxena, W/o Shri H.N. Saxena, 7-JHA-36, Jawahar Nagar, Jaipur. VERSUS RESPONDENTS 1.The Commissioner of Income Tax, NCRB Building Statue Circle, Jaipur. 2. The Dy. Commissioner of Income TaxInvestigation Circle-2(1), Jaipur. DATE OF ORDER ::: 21.09.2016 HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE BANWARI LAL SHARMA Mr. Prakul Khurrana, for the appellant.Mr. Nikhil Simlote, for the respondent. ***** 1.By way of this appeal, the appellant hasassailed the judgment and order of the Tribunalwhereby the tribunal has partly allowed the appealpreferred by both the sides. 2. Counsel for the appellant contended that thisCourt has framed following issues :- “1. Whether on the facts in thecircumstances of the case, theTribunal was justified in sustainingan addition of Rs.70,000/- asunexplained cash, irrespective of thefact that identity and capacity ofthird person were not doubted?2. Whether on the facts and in thecircumstances of the case, theTribunal was correct in law insustaining an addition of Rs.3,53,000/- on account of explainedinvestment in IVP?.3.Whether on the facts in thecircumstances of the case, theTribunal was justified in settingaside the addition of Rs.68,691/- & 1,26,300/- on account of unexplainedloans which was duly credited in theregular books account of the appellantand thus outside the scope of blockassessment under chapter XIVB of theAct.4.Whether on the facts and in thecircumstances of the case, theTribunal was correct in law in holdingthat the income declared at Rs.1,04,962/- in regular return after thedate of search for the assessment year1997-98 is undisclosed income asdefined u/s 158B(b) of the Act for thepurpose of block assessment?” 3.However, issue no.3 will not survive, in viewof the fact that after the remanding order, theissue is now concluded. The court is required toanswer issue no.1, 2 & 4. 4.Counsel for the appellant Mr Prakul Khurranacontended that the Tribunal has seriouslycommitted an error in not accepting theexplanation of the real brother of the assesseeonly on the ground of amount referred by theassessee was Rs. 50,000/- and brother in hisstatement immediately recorded on the next datei.e. 2/10/1997 and only on that ground, therectification which was made was not accepted. Hespecifically relied upon para 6,7 & 8 of theTribunal order which reads as under:- “6. On the other hand the Ld. A/Rsubmitted that the cash was found fromthe bed room of the assessee as mentionedin the seized annexure of Punchnama. Theassessee has stated that in her statementthat the amount represented giftsreceived in the marriages of her two sonsand Rs. 50,000/- was received from herbrother Shri R.B. Saxena. The departmenthas verifed the same from assessee'sbrother Shri R.B. Saxena at Delhi on thesame very morning at about 6.30 AMthrough the Inspector of the Income-tax,submitted that the cash was found fromthe bed room of the assessee as mentionedin the seized annexure of Punchnama. Theassessee has stated that in her statementthat the amount represented giftsreceived in the marriages of her two sonsand Rs. 50,000/- was received from herbrother Shri R.B. Saxena. The departmenthas verifed the same from assessee'sbrother Shri R.B. Saxena at Delhi on thesame very morning at about 6.30 AMthrough the Inspector of the Income-tax, immediately after recording the statementof the assessee at about 4.30 AM on thesame very day. The fact of leaving thecash with his sister at Jaipur was dulyconfirmed by assessee's brother and thecopy of the same was also available withthe AO. The assessee's brother Shri R.B.Saxena has also subsatantiated the sourceof Rs. 70,000/- out of retirement savingsdeposited in banks from his lastemployers M/s. Simmco Birla Ltd., Gwaliorand M/s. Birla GTM Enterprises Ltd.Shahpura, Jaipur. He made withdrawls fromhis two bank accounts namely UCO Bank &Punjab National Bank between March, 1997to July, 1997 amounting to Rs. 1,16,500/-and out of it, he gave Rs. 70,000/- tohis sister Smt. Neelam Saxena. He furthersubmitted that small variation in thestatement is immaterial as clarified bythe assessee in her letter dated20.11.1998. It was therefore, submittedthat in the light of the assessee'srebuttal letter which was filed on20.11.1998 before the AO, the additionmade by the AO should be deleted.7.We have carefully considered the rivalsubmissions of both the parties andperused the material available on record.We find that the assessee has stated thatthe cash found form her bed room waspartly received as a gift on the occasionof the marriage of her two sons and Rs.50,000/- was received from her brotherShri R.B.Saxena. Later on, after the gapof more than 13 months vide a letterdated 20.11.1998 the assessee retractedher statement saying that-“2. in answer to question No.1.,it has been recorded that out of Rs.92,350/- cash found during the course ofsearch, Rs. 50,000/- belong to mybrother. I may mention that it was Rs.70,000/- & not Rs. 50,000/- which belongto Shri R.B. Saxena, New Delhi. This facthas also been confirmed by my brotherR.B. Saxena in his statements recordedu/s 131 on the same day at Delhi” From the letter dated 02.10.1997 of ShriR.B. Saxena we find that a sum of Rs.70,000/- is claimed to have been givento the assessee for certain domesticwork whereas the assessee in her letterdated 20.11.1998 has stated that thesame belongs to her brother. No materialwas placed before us as to show that theamount given by the assessee's brotherShri R.B. Saxena was not utilised fordomestic work, nor for the purpose forwhich it was given. No explanation forthis has been placed on record. 8.Under these circumstances and in viewof contradiction in the statements ofassessee and assessee's brother evenregarding the quantum of amount, we areof the view that the AO was justified intreating Rs. 70,000/- as undisclosedincome of the block period andaccordingly we reverse the finding ofthe CIT(A) and allow the Ground No. 1taken by the revenue.” 5.The second contention regarding the issuanceof the IVP where the amount of investment is addedunder not explained, the Tribunal not accepted thestatement of one of the person namely Mr. NareshChandra Dwivedi, alleged brother-in-law of husbandof appellant developing the story about hisapprehension arrest and staying with the assesseebut all the IVP found together, and thereforeamount of Rs. 2,00,000/- of IVP claimed by herwere found to be her undisclosed income. However,counsel for the appellant also contended that outof Rs.3,53,000/-, Rs. 50,000/- was accepted in theassessment of the husband of the assessee. In thatview of the matter, even if the contention of theappellant is not accepted qua Mr. Naresh ChandraDwivedi, 50,000/- which has been accepted in thename of the husband during the survey andassessment proceeding and the same was deducted. 6.On the fourth issue, counsel for theappellant has contended that the Tribunal in para21 has seriously committed an error in notaccepting the return which was filed on 19/12/1997and tax was paid on 9/12/1997 and block return wasfiled on 26/11/1998. In that view of the matter, 6.On the fourth issue, counsel for theappellant has contended that the Tribunal in para21 has seriously committed an error in notaccepting the return which was filed on 19/12/1997and tax was paid on 9/12/1997 and block return wasfiled on 26/11/1998. In that view of the matter, he contended that Tribunal ought to have reliedupon the decision of Karnataka High Court in thecase of Commissioner of Income Tax & Anr. vs. M.J.Siwani reported in (2014) 366 ITR 0356 (Karn). Theassessment which was filed should be accepted inthe assessment and not in the block period. 7.Counsel for the respondent Mr. Nikhil Simlotefor R.B. Mathur has contended that the view takenby the Tribunal is just and proper. In the socalled statement of brother-in-law, there isserious discrepancy of Rs. 50,000/- and the sameis not required to be changed in the mannerregarding the IVP. The custody of IVP which hasbeen in the name of assessee and third point blockassessment is required to assessed because theassessment for the year 1997-1998 was time barredit was filed only after the survey. In that viewof the matter, view taken by the Tribunal isaccordingly accepted. 8.We have heard learned counsel for theappellant and counsel for the respondent. 9.On the first issue regarding the addition of70,000/- in the instant case in our view,statement of brother of the assessee was recordedimmediately on the next date in the morning atabout 6.30 a.m. In that view of the matter, merelydifference of amount which is not higher thanRs.20,000/- between the two statement could have been seen, which comes to Rs. 20.000/- or less.The view taken by the Tribunal is not correct andis required to be reversed and addition of Rs.70,000/- in the name of assessee is required to bereversed. Therefore, this issue we answer infavour of the assessee. 10.On the second issue, the statement made byMr. Naresh Chandra Dwivedi, brother-in-law of ShriH.N. Saxena, in our view the factum of hisapprehension arrest and staying with the assesseebut all the IVP found together, the story asdeveloped by the assessee is not rightly acceptedby the Tribunal and we also not inclined tointerfere and view taken by the Tribunal is justand proper. 11.However, if the 50,000/- which has been foundproper explanation in the assessment of thehusband of the assessee the same will be set offby the assessing officer if it has been foundproper explanation in the assessment of thehusband of the assessee. 12.On the fourth issue regarding the 1,04,962/-of the regular income, we are of the opinion thatthe return was filed after time barred andtherefore, it should be block assessment year andhe accepted tax only about block assessment. Thetax paid over and above block assessment will berefundable and in view of 158BB which was amended w.e.f. 1/7/1995 whatever benefit assessee isentitled in view of the amended standard directionon the any other benefits will be granted to theassessee. 13.Accordingly, the issue no. 2 & 4 is answeredin favour of the department against the assesseeaccepting the benefits which are confirmed underthe statute and the other assessment of husbandwill be granted benefit. 14.The appeal stands partly allowed. (Banwari Lal Sharma), J. (K.S. Jhaveri), J. A.Sharma/s-98