Income Tax Appellate Tribunal - Amritsar
Jaswant Singh, Distt. Hoshiarpur vs Assessee on 22 February, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL,
AMRITSAR BENCH; AMRITSAR (SMC)
BEFORE SH. A.D. JAIN, JUDICIAL MEMBER
ITA No. Assessment year
688(Asr)/2014 2004-05
689(Asr)/2014 2005-06
690(Asr)/2014 2006-07
691(Asr)/2014 2007-08
692(Asr)/2014 2008-09
693(Asr)/2014 2009-10
Sh. Jaswant Singh vs. Income Tax Officer,
S/o Dev Singh alia Badowalie Ward-2,
VPO Morawalli, New Abadi, Hoshiarpur.
Teh. Garhshanker,
Distt. Hoshiarpur.
PAN:CQVPS5290P
(Appellant) (Respondent)
Appellant by: Sh. Tarun Bansal, Advocate
Respondent by: Dr. Tarun Deep Kaur, DR
Date of hearing: 16/11/2015
Date of pronouncement: 17/02/2016
ORDER
These six appeals of the assessee are directed against different orders of CIT(A), Jalandhar, for the assessment years 2004-05 to 2009-
10.
2. The issues are common in all these years and so, the facts are being taken from assessment year 2004-05.
3. The common facts involved in these appeals are that the assessee an individual, was not found to be filing return of income in any of the years. The assessee's only source of income was agricultural income, 2 due to which, he did not file any return of income. The AO received information in the case of the assessee from the Investigation Wing, as per which, the assessee had maintained 11 FDRs during F.Y.2009-10 with different banks, totaling to Rs.73,88,770/-. These FDRs were claimed to be made out of deposits in Non Resident (External) account which was stated to be opened between the period from 1984 to 1998, when the assessee was stated to be an NRI. The AO noticed that the assessee earned interest income on these FDRs during the year, under consideration which was much above the non taxable limit. Accordingly, the AO issued a notice u/s 148 of the I.T. Act to the assessee on 25.02.2011 and reopened the assessment for the year under consideration. In response to the notice u/s 148 of the Act, the assessee filed return of income for the year under consideration declaring therein an income of Rs.3,63,149/- plus agriculture income of Rs.20,000/- for rate purposes. The whole income had been claimed as exempt u/s 10(4)(ii) of the Act for the reason that the interest income earned on deposits in Non Resident (External) Account is exempt from tax. The AO denied the exemption claimed by the assessee u/s 10(4)(ii) of the Act and made an addition of Rs.3,63,344/- to the returned income of the assessee. The AO had also made an addition of Rs.1,00,000/- to the returned income of the assessee on account of inadequate household withdrawals. The assessment was completed by the AO at an assessed income of Rs.4,63,344/- plus agriculture income of Rs.20,000/-. 3
4. By virtue of the impugned orders, the ld. CIT(A) confirmed the additions made by the AO for all the years under consideration.
5. Before us, the first issue raised by the assessee is that the authorities below have wrongly calculated the bank interest on the FDRs @ 7%, whereas the assessee had earned 4.00% for the assessment year 2004-05, 3.80% for the assessment years 2005-06 & 2006-07, 3.80% for AY 2008-08 and 3.79% for AY 2009-10.
6. Thus, the assessee has not challenged before this Bench, the action of the authorities below in denying the assessee's exemption claimed u/s 10(4)(ii) of the Act. It is only the calculation/application of bank interest rate on the FDRs, which is under challenge.
7. The assessee has also contended that the ld. CIT(A) has not given full benefit u/s 80C for the AYs 2007-08 to 2009-10, u/s 80L for AYs 2004-05 & 2005-06 and u/s 88 for AY 2006-07, while confirming the additions.
8. The last grievance of the assessee is that the ld. CIT(A) erred in confirming the addition in household expenses under the head 'other sources' when no other source of income was proved by the AO, ignoring the fact that the assessee had agricultural income from the land of his 4 American uncle, Sh. Sital Singh and that the assessee's father also contributed to the assessee's household expenses.
9. An application for additional evidence has been filed, seeking to place on record affidavit of the assessee himself, affidavit of Sh. Sital Singh, real uncle of the assessee, affidavit of Sh. Dev Singh father of the assessee and affidavit of Sh. Harish Kumar, Accountant. The assessee has also sought to produce interest rate certificates issued by the banks, in support of his contention regarding different rates of interest earned by him from various banks in the years under consideration. The assessee has also sought to produce two comparative charts with regard to calculation of correct figures of interest and the assesse's claim under sections 80C, 80L & 88 of the Act. Two school certificates pertaining to his son's school have also been sought to be filed. Further, copy of intimation to the AO regarding land measuring 21 kanals 6 marlas having been purchased by the assessee is also sought to be filed. Then, a copy of power of attorney given to the assessee by his real uncle, Sh. Sital Singh in respect of land measuring 30 Kanals 9 Marlas in District Hoshiarpur, to cultivate and use the said land, is sought to be filed. Lastly, the assessee seeks to produce J-Forms indicating sale proceeds received from agriculturists.
10. The application for additional evidence has been verified by the assessee and attested by a Notary Public.
11. In his affidavit, the assessee has deposed as follows: 5
"I, Jaswant Singh S/o Sh. Dev Singh, Resident of V&PO Moranwali, Teh Garhshankar, Distt Hoshiarpur, aged 56 years, do hereby state on solemn information as under :-
1. That I am an Agriculturist and was NRI from the year 1984 to 1988 and opened NRE account with various banks during that period and the FDR's were also made and income earned from that was exempt u/s 10(4)(ii) at that time.
2. That I received notice from the Income Tax department u/s 148 for the A.Y. 2004-05 to 2009-10 (Six years).
3. That I consulted Mr. Harish Kumar, Accountant at Amritsar to whom I know through some local friend. He calculated certain figures of interest from various FDRs @7% for the A.Y. 2004-05 to 2009-10 and he further told me that if there will be any difference in the interest account then it will not matter for Income-tax purpose being all your all interest income is exempt u/s 10(4)(ii) and filing of returns isjust a formality and there will not be any tax liability to me.
4. That I filled the figures of Income as calculated by him estimatedly @7% p.a. and filed the returns of the above all the six assessment years.
5. That when I met Sh. Tarun Bansal, Advocate for Hon'ble ITAT, six appeals, which were filed after the confirmation of addition by the ld CIT(A). He advised me to bring Bank Certificates of interest rate applicable to NRE Accounts being according to him NRE A/cs & FDRs do not get such high rate of interest and it is not possible that all the assessment years have same rate of interest on FDRs.
6. That I brought the Interest Rate Certificates from State Bank of India dated 14.10.14 & 10.11.14 , as well as, from Canara Bank dated 05.11.14 , where I had my above said Accounts and it was really astonished to see that the rate of interest for various years ranging from 3.1%, 3.8%, 6.42%, 5% and 7% in the F.Y. 2009-10 only. Copy of interest rate certificates are enclosed at Page A-12 to A-14. As I am not a educated person, so I never calculated at what rate I am getting interest.
7. That the ld AO assumed the same figures, which I filed in the Computation of Taxable income and did not applied his mind to calculate the correct figures of interest and he 6 assessed almost the same figures, which I took in my computation of Income, comparison Chart is enclosed at Page A-15 to A-16.
8. That the ld AO even has not given me any claim u/s 80L and / or u/s 88 as the case may be in all the six assessment years, Chart at PB A-17.
9. That in all the six assessment year orders, AO wrote that my son is in class six and did not verified and calculated the exact tuition fee for claim u/s 80-L or u/s 88, as the case may be. The school Certificates dated 01.11.14 & 5.11.14 indicating the tuition for the various assessment years is enclosed at Page A-18 to A-19.
10. That the ld AO made the addition in drawings in the six assessment years as under without verifying the facts :-
Asstt. Year Drawings (Rs.) 2004-05 1.00 Lac 2005-06 1.00 Lac 2006-07 1.05 Lac 2007-08 1.05 Lac 2008-09 1.10 Lac 2009-10 1.10 Lac
11. That I have an Agriculture land, which was purchased me measuring 21 kanals 6 marlas and intimation of the same was given to the ld AO dated 05.08.11, copy enclosed at Page A-20 and ld AO has not considered the true income out of the same.
12. That I also had the agriculture land on rent, measuring seven Acre for cultivation in the year 2004-05 from Tadi Tarsem Singh Ragi of Hoshiarpur and it was with me upto March 2015. It was taken on verbal agreement and the rent was also paid in cash.
13. That my father Mr. Dev Singh S/o Sh. Chanda Singh is also having an ancestral land of half an Acre at District Hoshiarpur, which is cultivated by me and my father jointly.7
My father is also an ex-serviceman and is getting pension of Rs.10,000/- per month approximately.
14. That my real uncle Sh. Sital Singh S/o Sh. Chanda Singh permanent resident of USA, also gave me the Power of Attorney to cultivate and use the agriculture produce in any manner out of his land. The land is 30 Kanals 9 Marla at District Hoshiarpur and this fact was confirmed to ld CIT(A), which is mentioned by him at Para-7.1 Page-13 for the A.Y. 2004 - 05, Page-14 for the A.Y.05-06, 06-07, 07-08, 08- 09 & 09-10. Copy of Power of Attorney given by my real uncle to me is enclosed at Page A-21 to A-22.
15. That I used to sell some of the crop in the Mandi also from the land belongs to me, of my father and of my uncle collectively. Sometimes my father went to the Mandi, to sell the same and sometimes I went to sell the Agriculture produce in the Mandi. Whosoever went,the commission agent raised the J-Forms on that particular person's name and we have never objected to this being our Agriculture income is exempt. Copy of few J-Forms are enclosed at Page A-23 to A- 40 along with year-wise Chart of J-Forms indicating the sale proceeds received from Mandi. Though they are not all but it has a circumstantial evidentiary value indicating that I had an agriculture Income and that agriculture produce is my source of household expenses. Whatever agriculture income I shown in my Income-tax Return was the net agriculture income left out of spending my household expenses.
16. That I have been wrongly assessed by ld AO for the A.Y. 2004-05 to 2009-10 and I met my household expenses as under, which has not been considered by him:-
a) A.Y.2004-05 :-
Out of my agriculture income from 14 Acres of land approximately as mentioned above.
b) A.Y.2005-06 :-
Out of my agriculture income from 14 Acres of land approximately as mentioned above.
c) A.Y.2006-07 8 Out of Agriculture Income, as well as, net withdrawal of Rs.13,000/- by my father and my own withdrawal of Rs.90,000 total = Rs.1,03,000/-
d) A.Y.2007-08 :-
Out of Agriculture Income, as well as, withdrawal of my father Rs.20,000/- + Self withdrawal of Rs.1,45,000 total = Rs.1,65,000/.
e) A.Y.2008-09 :-
Out of Agriculture Income, as well as, withdrawal of my father Rs.1,36,000/- + Self withdrawal of Rs.7,800/- total = Rs.1,40,800/.
f) A.Y.2009-10 :-
Out of Agriculture Income, as well as, withdrawal of my father Rs.20,000/- + Self withdrawal of Rs.1,90,000/- total = Rs.2,10,000/-.
17. That when the appeal before ld CIT(A) was filed but my counsel, I was assured that my case is covered u/s 10(4)(ii), my total interest income is exempt, I will get 100% relief. So, the Certificates of the Banks, School fee and Agriculture Income J-Forms and ownership of land was neither procured or arranged nor filed before any authority below and I was deprived of from the factual figures and assessment. Now I am enclosing all the above documents as additional evidence U/R 29 of ITAT with a prayer to admit the same. I further pray that tax should not be levied on ignorance of law and income should be computed with provisions of law and not a single rupee should be charged extra than the real income, for the principle of natural justice & equity.
Date: 12.10.15 Sd/-
Place: Hoshiarpur Deponent
Verification
I Jaswant Singh above named hereby declare that the above contents are true to the best of my knowledge and belief and no part of it is false.
Date: 12.10.15 Sd/-
Place: Hoshiarpur Deponent "
9
12. The Ld. DR has strongly opposed the assessee's above application for additional evidence, contending that all this evidence ought to have been filed by the assessee before the AO and since this was not done without sufficient cause, it cannot be now allowed to be raised as additional evidence.
13. The stand of the assessee in this regard, it is seen, is that the issue of interest rate having been raised before the Tribunal for the first time, the evidence showing the interest rate earned by the assessee for the years under consideration is essential for a just decision in the matter.
14. Likewise, according to the assessee, a similar is the situation with regard to the assessee's claim under sections 80C, 80L and 88 of the Act and so, the evidence with regard thereto is also necessary to be brought on record. Apropos the issue of household expenses, it has been contended that the evidence with regard to the agricultural income earned by the asessee could not be produced before the authorities below, since he was assured by his Counsel that his case was covered u/s 10(4)(ii) of the Act and that he would get one hundred percent relief. It is submitted that it was for this reason, the certificates of the banks, School fee and agricultural income J - Forms and ownership of land were neither obtained, nor filed before the authorities below. This, it is 10 relevant to mention here, is the content of para-17 of the assessee's affidavit, as reproduced above.
15. We have heard the rival contentions in the light of the material available on record. The assessee's contention is that all this evidence was not either obtained, or filed before the authorities below, since his Counsel had assured that his case was covered u/s 10(4)(ii) of the Act and that he would get full relief. In this regard, the affidavit of Sh. Harish Kumar, Accountant, reads as under:
" I, Harish Kumar S/o Sh. Roshan Lal Kundra, Resident of House No.3053, Mohalla Bagichi, Katra Karam Singh, Amritsar, Aged 46 years, do hereby state on solemn information as under:
1. That I am an Accountant working part-time for the last 20 years.
2. That I met Mr. Jaswant Singh through some common friend and I was requested to calculate the interest income of NRE Accounts and FDRs, which I did for the first time. I estimatedly took 7% rate of interest and blanketly calculated the same for the six assessment years and handed over the figures to Mr. Jaswant Singh with a view that these figures ultimately will be exempt u/s 10(4)(ii) and there will be no loss of Revenue, as well as I calculated his agriculture income after reducing estimated household expenses as per my knowledge.
Dated 12.10.15 Sd/-
Place:Amritsar Deponent"
I Harish Kumar above named hereby declare that the above contents are true to the best of my knowledge and belief and no part of it is false.
Date: 12.10.15 Sd/-
Place: Hoshiarpur Deponent"
11
16. Sh. Sital Singh, real uncle of the assessee, in his affidavit has stated as follows:
"I, Sital Singh S/o Sh. Chanda Singh, Resident of USA now at V&PO Moranwali, Teh - Garhshankar, Distt Hoshiarpur, aged 68 years, do hereby state on solemn information as under :-
1. That I am a bachelor and I treat Mr. Jaswant Singh S/o Dev Singh my real Nephew, as my son and I have given the Power of Attorney of my Agriculture land measuring 30 Kanals 9 Marlas at District Hoshiarpur, to him to cultivate and enjoy the produce in whatsoever manner he likes.
Date: 12.10.15 Sd/-
Place: Hoshiarpur Deponent
Verification
I Sital Singh above named hereby declare that the above contents are true to the best of my knowledge and belief and no part of it is false.
Date: 12.10.15 Sd/-
Place: Hoshiarpur Deponent "
17. Sh. Dev Singh, the assessee's father has stated in his affidavit as under:
"I, Dev Singh S/o Sh. Chanda Singh, Resident of V&PO Moranwali, Teh - Garhshankar, Distt Hoshiarpur, aged 79 years, do hereby state on solemn information as under :-
1. That I am widower & Ex-serviceman and earning pension.
2. That I am residing with my son, Daughter-in-law & only grandson and helping my son Jaswant Singh in his cultivation and contributing for household expenses out of the cash withdrawals from my Saving bank from time to time plus out of my Agriculture produce from Half an Acre ancestral Agriculture land at District Hoshiarpur.
Date: 12.10.15 Sd/-
12
Place: Hoshiarpur Deponent
Verification
I Dev Singh above named hereby declare that the above contents are true to the best of my knowledge and belief and no part of it is false.
Date: 12.10.15 Sd/-
Place: Hoshiarpur Deponent "
18. A perusal of the above shows that the additional evidence sought to be filed by the assessee is necessary for adjudicating the additions made. The issue regarding rate of interest and the assessee's claim under sections 80C, 80L and 88 of the Act, to reiterate, has been raised by the assessee for the first time before this Bench. These issues undoubtedly emanate from the order under appeal. The evidence with regard to the household expenses is also essential, having not been produced before the taxing authorities for the view of the assessee's Counsel that the case was covered under the provisions of section 10(4)(ii) of the Act.
19. It is well settled that it is the correct income of the assessee which needs to be brought to tax. The additional evidence filed by the assessee pertains to the additions made and confirmed by the Taxing Authorities, respectively. Therefore, this additional evidence is required to be considered for deciding the matter. Thus, in the interest of justice, this additional evidence is admitted. Since this evidence was not before the AO at the first stage, the matter concerning all these appeals is remitted to the file of the AO, to be decided afresh in accordance with law, by taking into consideration this additional evidence, on affording due and 13 adequate opportunity of hearing to the assessee to support his case. The assessee, no doubt, shall co-operate in the fresh proceedings before the AO. All pleas available under the law shall remain available to the assessee in these proceedings before the AO. Ordered accordingly.
17. In the result, for statistical purposes, all the six appeals are treated as allowed.
Order pronounced in the open court on 17/02/2016.
Sd/-
(A.D. JAIN)
JUDICIAL MEMBER
Dated: 17 /02/2016
/skr/
Copy of order forwarded to:
1. The Assessee: Sh. Jaswant Singh, Garshankar, Distt. Hoshiarpur.
2. The ITO, Ward-2, Hoshiarpur.
3. The CIT(A), JLR
4. The CIT, JLR.
5. The Sr. DR, ITAT, ASR.
True copy By order (Assistant Registrar) Income Tax Appellate Tribunal Amritsar Bench: Amritsar.