Income Tax Appellate Tribunal - Jaipur
Jai Kumar Hasnani, Jaipur vs Circle International Taxation, ... on 24 June, 2024
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES,"A" JAIPUR
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BEFORE: SHRI SANDEEP GOSAIN, JM & DR MITHA LAL MEENA, AM
IT (IT)A No. 8/JP/2023
fu/kZkj.ko"kZ@Assessment Year :2015-16
Jai Kumar Hasnani cuke The DCIT,Circle
S-71 Adinath Nagar, Vs. (International Taxation)
JLN Marg, Jaipur Jaipur
LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACKPH 5325 F
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@Assessee by : None
jktLo dh vksj ls@Revenue by: Shri A.S. Nehra , Addl. CIT-DR
lquokbZ dh rkjh[k@Date of Hearing : 10/04/2024
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 24 /06/2024
vkns'k@ORDER
PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against assessment order of the AO, Circle (Intl. Tax), Jaipur dated 27-01-2023 for the assessment year 2015-16 wherein the assessee has raised the following grounds of appeal.
''1. The ld. Circle International Taxation, Jaipur erred in law and in facts in holding that the order passed u/s 147 r.w.s. 144C(13) dated 27-01- 2023 was erroneous and prejudicial to the interest of revenue and thereby deserves to be quashed and set aside.
2. The AO i.e. Circle International Taxation, Jaipur erred in setting aside the representations of the appellant and passing the impugned order on incorrect assumptions.
2IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR
3. The AO i.e. Circle International Taxation, Jaipur erred in her non-speaking order u/s 147 r.w.s. 144C(13) dated 27-01-2023 neither refuted the contentions of appellant nor the ratio of decisions of the jurisdictional courts, quoted by appellant therein. This makes the order unsustainable.
4. The AO i.e. Circle International Taxation, Jaipur erred in passing the order dated 27-01-2023 apparently on the basis of an invalid observation and therefore, her order u/s 147 r.w.s. 144C (13) dated 27-01- 2023 is unsustainable.'' 2.1 During the course of hearing, the Bench noted that none appeared on behalf of the assessee when the case was called out for hearing. Hence, the Bench decided to dispose off the appeal on the basis of the written submission and other documents placed on record before the Bench filed by the counsel of the assesses in office of Registry. The Bench has taken into consideration the written submission and other documents concerning the issue in the case of the assessee for disposal of the appeal of the assessee.
2.2 Apropos Ground Nos. 1 to 4 of the assessee, brief facts of the case are that the assessee did not file his ITR for the AY. 2015-16 and information in this case was reflected on AIMS data in AO's office. The AO on the basis of the information available on record, a notice u/s 148 was issued to the assessee on 31- 03-2021 for filing of ITR for A.Y. 2015-16 after getting approval from the ld.
CIT(IT), Delhi-1, Jaipur. In response to the notice u/s 148, the assessee filed his ITR for A.Y. 2015-16 on 16-12-2021, declaring a total income of Rs.15,04,320/-.
3IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR Therefore, notice u/s 143(2) of the Act, 1961 was issued to the assessee on 28-03- 2022. A draft assessment order u/s 144C of the I.T. Act, 1961 in this case was issued to the assessee on 29-03-2022 making an addition of Rs.52,62,266/-
considering it unexplained investment u/s 69A of the Act. The ld. AO has also mentioned the part of the draft assessment order in this assessment order. It is noted from the assessment order wherein the assessee had also filed the reply at para 4.1 which has not been accepted by the AO at para 4.2 of his order as under:-
''4.1 The assessee in his submission has claimed that a part of these payments was made out of rental income received from Shop situated in WTP mall, Jaipur. However, this contention of the assessee does not stand any ground as the cheques from which payment of rent were made were rejected and debited from the account as clearly given in above table.
Also, the assessee, in his submission dated 23.03.2022, submitted before Ld. DRP vide letter dated 26.04.2022, has submitted that-
3. Without prejudice to this contention and in further submission to the reply filed on 23.02.2022, it may be informed that the assessee has now able to obtain a copy of his NRO Savings bank a/c no. 096901075010 in ICICI Bank through which the payments for the acquisition of property was made. A copy of the statement is enclosed for consideration as Annexure-A. It reveals that the main source of the credit entries/deposits in this bank account were:-
(i) Transfers from assessee's NRO bank a/c no.
33309671409 in SBI Bank Account as evident from the narration in the bank statement.
(ii) Amounts received from the NRE A/c of Bharat Sawlani, a close associate and resident of Oman (copy of 4 IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR his resident card/driving license of Oman is enclosed as Annexure-B).
(iii) Amounts received from the NRE A/c of Kartar Hasnani, elder brother (PAN: ALAPH8475R), copy of PAN is enclosed as Annexure-C
(iv) Rental receipts from World Trade Park from the leased premises (UG-34, World Trade Park, JLN Marg, Jaipur) of assessee in the mall named World Trade Park, evident from Form 26AS.
(v) Amount received from Purshottam Kane Exchange, Oman i.e. transfers from Oman (A copy of sample remittance voucher of Purshottam Kanji Exchange, Al Khuwair Branch, is enclosed as Annexure-D).
(vi) Amount received from Lata Chandwani (post marriage surname changed to Lata Hasnani) (Wife), PAN:
AFXPH7617C, copy of PAN is enclosed as Annexure-E
(vii) Amount received from Asan Das.
(viii) Amount of loan advance returned by Asandas and Shyam Kamlani (PAN: ACWPK2271K). (ix) Cash deposits of Rs. 70,000 and Rs. 25,000, from out of encashment of remaining Oman money.
4. Sir, it is reiterated that the rental derived from property (let out to The Prime) located at UG-34, World Trade Park, JLN Marg, Jaipur and interest income on bank deposit in NRO A/c are already subjected to TDS. Under the beneficial clauses of the DTAA with Oman, I was entitled to concessional rate of tax and thereby a refund of the excess TDS as claimed in the return filed on 16.12.2021. There is no other income generating activity and no earning of income in India.
4.2 The contention of the assessee is not acceptable on the following grounds:-
5IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR
1. As above, the assessee has only submitted that these credit entries were received from persons known to him, but did not produce any documentary evidence proving the capacity of these persons of making these huge payments.
2. The assessee has not submitted any loan or advance agreement executed with the persons from which repayment of advance or loan was received.
3. On perusal of the fund transfer receipt of the funds received from Purshottam Kane Exchange, Oman, it is noted that this payment was made in cash and not from account of any person. This facts again puts gravity of the undisclosed nature of this amount.
4. The assessee has also not submitted any documentary evidence regarding the source of funds used to transfer funds in his ICICI Bank alc from his SBI Bank NRO a/c.
5. No payment was made out of rental income received from shop in WTP mall, Jaipur as the cheques were rejected.
6. During the course of assessment the assessee was regularly asked regarding the payment capacity of the persons making credits to his bank account but the assessee failed in doing so. However, the assessee again got a chance to submit these documents before Ld. DRP but the assessee again failed in submitting any evidence supporting the payment capacity of the persons making credits to bank account. Hence, the payment capacity of his wife, his brother and other persons stands unexplained and unverified.
7. The assessee has also contended that he used funds received from Mr. Bharat Kumar Sewani from his NRE a/c to make payments to Mrs. Kusum Mittal for purchase of the said property. However, this contention of the assessee is not acceptable as no amount was received from Mr. Bharat Kumar Sewlani during the time when payments were made to Mrs. Kusum Mittal. Funds received from Mr. Bharat Kumar Sewlani were before the time of making payment to Mrs. Kusum Mittal and were utilized for making payments to various persons and for different reasons, best known to the assessee 6 IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR only, and none of these funds were used for making payment to Mrs. Kusum Mittal. The assessee, only on the basis of credit entries being shown in the name of Mr. Bharat Kumar Sewlani, has made this claim to deviate the department from the Issue of unexplained credit entries which are not made verified/explained by the assessee.
8. The assessee has also not submitted any evidence proving the source of funds used to make cash deposit in his NRO a/c held in ICICI bank 4.3 On basis of the discussion made above, documents available on record, considering the directions issued the Ld. DRP and evidence produced by the assessee before the Ld. DRP it is noted that the assessee has failed in proving genuineness of funds credited into his bank a/c, also has failed to submit relevant documents as discussed in para 4.2 above and it is held that the addition of Rs. 52,62,266/- u/s 69A of the L.T. Act, 1961, made in the draft assessment order, is justified and correct.'' 2.3 On the other hand, the ld. DR strongly contested the assessment order dated 27-01-2023 passed by Revenue Authority, Circle (Intl. Tax), Jaipur.
2.4 We have heard the ld.DR and also perused the documents placed on record by the ld. Counsel of the assessee in the office of the Registry for consideration.
From the records, we noticed that draft assessment order u/s 144C of the Act in this case was issued to the assessee on 29-03-2022 thereby making and thus considering it unexplained investment u/s 69A of the Act. In this case, it is noted that as per record the assessee had made submission and made available information on record with regard to the details of income tax which are mentioned at page no. 2 of the assessment order. After considering the same, the AO in the 7 IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR final assessment order upheld the addition of Rs.52,62,266/- as investment from unexplained sources and thus added the same to the total income of the assessee for the year under consideration. Now after having gone through entire order and the documents placed on record by the assesse before the Revenue Authorities, we observed found that the contention of the assessee was found to be untenable by the AO vide para 4.2 of his order and the same is reproduced below.
''4.2 The contention of the assessee is not acceptable on the following grounds:-
1. As above, the assessee has only submitted that these credit entries were received from persons known to him, but did not produce any documentary evidence proving the capacity of these persons of making these huge payments.
2. The assessee has not submitted any loan or advance agreement executed with the persons from which repayment of advance or loan was received.
3. On perusal of the fund transfer receipt of the funds received from Purshottam Kane Exchange, Oman, it is noted that this payment was made in cash and not from account of any person. This facts again puts gravity of the undisclosed nature of this amount.
4. The assessee has also not submitted any documentary evidence regarding the source of funds used to transfer funds in his ICICI Bank alc from his SBI Bank NRO a/c.
5. No payment was made out of rental income received from shop in WTP mall, Jaipur as the cheques were rejected.
6. During the course of assessment the assessee was regularly asked regarding the payment capacity of the persons making credits to his bank account but the assessee failed in doing so. However, the assessee again got a chance to submit these documents before Ld. 8 IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR DRP but the assessee again failed in submitting any evidence supporting the payment capacity of the persons making credits to bank account. Hence, the payment capacity of his wife, his brother and other persons stands unexplained and unverified.
7. The assessee has also contended that he used funds received from Mr. Bharat Kumar Sewani from his NRE a/c to make payments to Mrs. Kusum Mittal for purchase of the said property. However, this contention of the assessee is not acceptable as no amount was received from Mr. Bharat Kumar Sewlani during the time when payments were made to Mrs. Kusum Mittal. Funds received from Mr. Bharat Kumar Sewlani were before the time of making payment to Mrs. Kusum Mittal and were utilized for making payments to various persons and for different reasons, best known to the assessee only, and none of these funds were used for making payment to Mrs. Kusum Mittal. The assessee, only on the basis of credit entries being shown in the name of Mr. Bharat Kumar Sewlani, has made this claim to deviate the department from the Issue of unexplained credit entries which are not made verified/explained by the assessee.
8. The assessee has also not submitted any evidence proving the source of funds used to make cash deposit in his NRO a/c held in ICICI bank.'' 2.4.1 Before proceeding further, it is necessary and imperative to consider the parawise reply submitted by the assessee to counter the objections raised by the AO and the same is reproduced as under:-
''Para wise reply to the objections raised by the AO in the Order Dated 27/01/2023, Para No. 4.2 of the Order (Starting from Page No. 7 of the Order)
1. As above, the assessee has only submitted that these credit entries were received from persons known to him, but did not produce any documentary evidence proving the capacity ofthese persons of making these huge payments. - Following documentary evidences were provided, which are attached herewith again;9
IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR a. Bank statements at the time of original advancement of the loans were made i.e. 2011, 2012 and 2013.
b. PAN card of the persons from whom the return of advancements was received.
c. Resident Card of the Foreign Country was also produced to establish the residency status of the person(s) from whom the loan has been advanced.
2. The assessee has not submitted any loan or advance agreement executed with the persons from which repayment of advance or loan was received - Since these amounts were merely repaid back of the earlier loans, few of the amounts were received from the relatives (friends and family) of the assesee.
3. On perusal of the fund transfer receipt of the funds received from Purshottam Kane Exchange, Oman, it is noted that this payment was made in cash and not from account of any person. Thisfact again puts gravity of the undisclosed nature of this amount. - It is imperative to note here that the cash was deposited by the person transferring the funds, which is in no matter related with the assesee, also, such funds were deposited in a foreign Country "Sultanate of Oman", wherein cash earning/deposited is permitted.
4. The assessee has also not submitted any documentary evidence regarding the source of funds used to transfer funds in his ICICI Bank a/c from his SBI Bank NRO a/c. - Documentary proof and narration in the bank statement clearly mentions that such transactions were contra in nature and were merely deposited from one account of the assesee to another account of the assesee.
5. No payment was made out of rental income received from shop in WTP mall, Jaipur as thecheques were rejected.- That, irrespective of the receipt of the amount, the income has been shown on an accrual basis in the return of the income and taxes pertaining to that income has been discharged while filing the return of Income, it is imperative to note here that, even when the amount was not received in the bank, it has been claimed as an expense by the company (from whom the rent has been received) and TDS has been deposited by the company.
6. During the course of assessment the assessee was regularly asked regarding the payment capacity of the persons making credits to his bank account but the assessee failed in doing so. However, the assessee again got a chance to submit these documents before Ld. DRP but the assessee again failed in submitting any evidence supporting the payment capacity of the persons making credits to bank account. Hence, the payment capacity of his wife, his brotherand other persons stands unexplained and unverified.- The capacity of the person paying the amount was given to DRP marking a copy of the AO, wherein documents such as PAN card of the Payer, Residency Card of the Payer etc. were produced.
10IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR
7. The assessee has also contended that he used funds received from Mr. Bharat Kumar Sewlani from his NRE a/c to make payments to Mrs. Kusum Mittal for purchase of the said property. However, this contention of the assessee is not acceptable as no amount was received from Mr. Bharat Kumar Sewlani during the time when payments were made to Mrs. Kusum Mittal. Funds received from Mr. Bharat Kumar Sewlani were before the time of making payment to Mrs. Kusum Mittal and were utilized for making payments to various persons and for different reasons, best known to the assessee only, and none of these funds were used for making payment to Mrs. Kusum Mittal. The assessee, only on the basis of credit entries being shown in the name of Mr. Bharat Kumar Sewlani, has made this claim to deviate the department from theissue of unexplained credit entries which are not made verified/explained by the assessee. - Money was received on 03.02.2015 and payment was made to 04.02.2015, the contention of the AO is completely wrong.
8. The assessee has also not submitted any evidence proving the source of funds used to makecash deposit in his NRO a/c held in ICICI bank. - Cash deposits were made out of the unrealised/remaining foreign currency with the assesee, the unutilized foreign currency was then deposited in the bank account of the assesee. '' 2.4.2 Apart from this, the assessee has filed the detailed explanation with regard to the transactions taken place in his bank account during the year under consideration and the same is reproduced in Tabulation Form.
EXPLANATION OF ASSESSEE JAI KUMAR HASNANI OF TRANSACTIONS TOOK PLACE IN HIS BANK ACCOUNT DURING A.Y. 2015-16 Amount Narration as per the Sr. Date Debit Credit Order Dated Explanation by assessee No. 27.01.2023 Rent Received entry as shown in Bank Statement, Rent received from bounced cheque returned on
1. 03.02.2015 - 4,01,070 shop at WTP, Jaipur the same date, can be reconciled from the entry on serial number 5 of this table.
Received back from Saurabh
Gupta against the advances
Received from
2. 03.02.2015 - 5,00,000 made in the year 2011 and
unexplained source
2013, attached ledger and
bank statement as
11
IT(IT)A 8/JP/2023
JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR Annexures.
Received back from Saurabh
Gupta against the advances
Received from made in the year 2011 and
3. 03.02.2015 - 19,50,000
unexplained source 2013, attached ledger and
bank statement as
Annexures.
NRE Associate of assessee.
Received from Copy of his resident/driving
4. 03.02.2015 - 10,00,000 Asandas/Shyam license of Oman submitted
Kamlani to A.O. with reply dated
22.03.2022.
Cheque from WTP
The cheque mentioned in
shop was rejected
5. 03.02.2015 4,01,070 - Serial Number 1, returned
therefore debit
from bank.
amount
Received back from Saurabh
Gupta against the advances
made in the year 2011 and
Received from 2013, attached ledger and
6. 04.02.2015 - 14,50,000
Yogesh Kumar Gupta bank statement as
Annexures.
Cash deposited from the
7. 04.02.2015 - 10,000 Cash Deposit encashment of remaining
Oman Money.
Payment made to
Kusum Mittal on Payment made on account of
8. 04.02.2015 15,00,000 -
account of purchase Purchase of Property
of property
Payment made to
Kusum Mittal on Payment made on account of
9. 04.02.2015 36,55,000 -
account of purchase Purchase of Property
of property
Received back from Saurabh
Gupta against the advances
Received from made in the year 2011 and
10. 09.02.2015 - 2,00,000
Sourabh Gupta 2013, attached ledger and
bank statement as
Annexures.
Rent Received entry as
Rent received from shown in Bank Statement,
11. 10.02.2015 - 4,01,070 shop at WTP, Jaipur bounced cheque returned on the same date, can be 12 IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR reconciled from the entry on serial number 14 of this table.
Payment made to Payment made on account of
12. 10.02.2015 1,12,955 -
Axis Bank EMI of the loan.
Payment made (not to Payment made on account of
13. 10.02.2015 61,983 -
Kusum Mittal) EMI of the loan.
Cheque from WTP
The cheque mentioned in
shop was rejected
14. 10.02.2015 4,01,070 - Serial Number 11, returned
therefore debit
from bank.
amount
Received back from Saurabh
Gupta against the advances
made in the year 2011 and
Received from
15. 11.02.2015 - 4,00,000 2013, attached ledger and
Sourabh
bank statement as
Annexures.
Cash deposited from the
16. 11.02.2015 - 70,000 Cash Deposit encashment of remaining
Oman Money.
Received on account of
Deepak Hasnani, which was
Received from earlier transferred on
17. 12.02.2015 - 5,00,000
unexplained source 10.12.2014, can be verified from the bank statement, attached as Annexure Payment made to Kusum Mittal on Payment made on account of
18. 12.02.2015 10,00,000 - account of purchase Purchase of Property of immovable property Received from Asan
19. 13.02.2015 - 4,00,000 Das Payment made to Kusum Mittal on Payment made on account of
20. 13.02.2015 4,00,000 - account of purchase Purchase of Property of immovable property We also found that the ledger account of the assessee is also in the Court file containing details of the transactions. Therefore, considering the entirety of the 13 IT(IT)A 8/JP/2023 JAI KUMAR HASNANI VS DCIT, CIRCLE (INTERNATIONAL TAXATION), JAIPUR facts and circumstances and the details of the submissions in the Court file and also the documentary evidences filed by the assessee before the Revenue authorities and detailed objections, the Bench is of the view that the AO was not justified in making addition in the hands of the assessee and the addition so made by him is deleted. Hence, in view of the above deliberations, the appeal of the assessee is allowed as indicated hereinabove.
3.0 In the result, the appeal filed by the assessee is allowed Order pronounced in the open court on 24/06/2024.
Sd/- Sd/- ¼ Mk0 ehBk yky ehuk ½ ¼lanhi xkslkbZ½ (Dr. Mitha Lal Meena) (Sandeep Gosain) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 24/06/2024 *Mishra
vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. The Appellant-Shri Jai Kumar Hasnani, Jaipur
2. izR;FkhZ@ The Respondent- DCIT, Circle (International Taxation) , Jaipur
3. vk;dj vk;qDr@ The ld CIT
4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
5. xkMZ QkbZy@ Guard File (IT(IT)A No. 8/JP/2023) vkns'kkuqlkj@ By order, Asstt. Registrar