Income Tax Appellate Tribunal - Amritsar
The Income Tax Officer, Bathinda vs Sh. Narinder Pal Bansal, Bathinda on 25 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER
AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER
I.T.A No. 240/(Asr)/2016
Assessment Year: 2012-13
PAN: AGFPB5284Q
Income Tax Officer Vs. Sh. Narinder Pal Bansal
Ward- 2(1), S/o Babu Ram,
Bhatinda. Bhucho Mandi, Bhatinda.
(Appellant) (Respondent)
Appellant by : Sh. Rahul Dhawan (D. R.)
Respondent by: Sh. P. N. Arora (Adv.)
Date of Hearing: 07.08.2017
Date of Pronouncement: 25.08.2017
ORDER
PER T. S. KAPOOR (AM):
This is an appeal filed by Revenue against the order of Ld. CIT(A), Bhatinda dated 25.02.2016 for Asst. Year: 2012-13.
2. The grounds of appeal taken by Revenue are reproduced below:
"1. The Ld. CIT(A) has erred in restricting the addition of Rs.
73,09,609/- made by the AO on accounts of unexplained capital introduced during the year to Rs. 6,33,280/- by relying upon the restructured accounts from the financial years 2007-08 to 2011-12,6760 though such accounts never formed part of ITRs filed by the assessee for such years.
2. The Ld. CIT(A) has erred in accepting the closing capital balance of Rs. 61,13,593/- as on 31.03.2008 claimed by the assessee on the basis of reconstructed accounts, ignoring that no such capital balance was shown by the assessee in the return of income and the figure of capital balance has 2 ITA No. 240(Asr)/2016 Assessment Year: 2012-13 been created only to justify the unexplained capital introduced during the A.Y. 2012-13.
3. The Ld.CIT(A) has erred in ignoring the fact that returned income of the assessee for the A.Y. 2008-09 was Rs. 2.67.250/- and with such meagre income, the assessee could not have accumulated capital of Rs. 61,13,593/- as on 31.03.200, even as no loan has been shown as payable.
4. The Ld. CIT(A) has erred in invoking the provisions of Rule(46A(4)j)f the Rules as the sub rule (4) authorizes the Ld. CIT(A) to direct the production of additional documents to enable him to dispose of the appeal whereas in this case .additional documents/evidence have been produced by the assessee and hence,, sub Rule (I), (2), and (3) of Rule 46A were applicable in this case, the conditions of which the assessee did not fulfill.
5. The Ld. CIT(A) has erred in allowing relief to the assessee on the basis of remand report of the AO by considering only one part of the remand report and totally ignoring the observations of the Assessing Officer m the remand report that the additional documentary evidence produced by the assessee were never subjected to verification and were liable to he rejected.
6. The Ld. CIT(A) has erred in accepting the capital balance of the assessee as on 31.03.2008 at Rs. 61,1 (,593/ on the basis of restructured accounts produced by the assessee in support of his contention that all value of assets and investments made by him before that date he heated as capital of the assessee ignoring the fact that such assets. invest investments and capital never formed part of return filed by the assessee and as such, the source of capital as on
3 1.03.2008 could not be treated as explained."
3. At the outset, the Ld. DR submitted that Ld. CIT(A) has passed under u/R 46A(4) of the Act for enable himself to dispose off appeal whereas in this case, the additional evidences were filed by assessee and therefore sub- rule 1, 2 and 3 of rule 46A were applicable and for which assessee was not eligible.
4. As regards merits of the case, the Ld. DR submitted that the Ld. CIT(A) has accepted the opening balance in the capital account of 3 ITA No. 240(Asr)/2016 Assessment Year: 2012-13 assessee by relying on the restructured account whereas the assessee has been filing the returns on no account basis. The Ld. DR further argued that the Ld. CIT(A) has not fully taken into account the remand report of the Assessing Officer and has ignored his observations that assessee had kept away the balance sheet and capital in hand from the sight of the department and these were never subjected to verification. In view of the above he argued that the order of Ld. CIT(A) be set aside and that of Assessing Officer be upheld.
5. The Ld. AR on the other hand submitted that assessee had been claiming before the Assessing Officer that he was filing return for the last 8 years and over a period of 8 years, he had accumulated the capital. The Ld. AR submitted that the assessee had shown opening capital at Rs.73,09,609 which was accumulated over a period of time and the same was verified by Assessing Officer during remand proceedings and this respect our attention was invited to the contents of the remand report which the Ld. CIT(A) has reproduced at page 5 of his order.
6. The Ld. AR submitted that opening capital balance consisted of properties, loans and advances which the Assessing Officer had verified from the copy of sale deed as well as from the confirmed copy of account of loans and advances. As regards the non verification of cash in hand, the Ld. CIT(A) has already allowed 50% of the claim and further Ld. CIT(A) has not allowed relief for an amount of Rs.5,00,000/- which was claimed to have been introduced in the F.Y. 2010-11. Therefore it was 4 ITA No. 240(Asr)/2016 Assessment Year: 2012-13 argued that Ld. CIT(A) has passed a speaking and reasoned order keeping in view the facts and circumstances of the case and keeping in view the comments of Assessing Officer in remand report. He submitted that where the Assessing Officer made negative remarks, the Ld. CIT(A) has not given any relief.
7. As regards the argument of Ld. DR that Ld. CIT(A) had passed order u/s 46A(4) for examination the veracity of the documentary evidences, it was submitted that Ld. CIT(A)'s power are co terminus with the powers of Assessing Officer and he at his own can call any further documents which he considers necessary for adjudication of an appeal.
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8. We have heard the rival parties and have gone though the material placed on record. We find that during assessment proceedings, the Assessing Officer made an addition of Rs.73,09,609/- which the assessee had claimed as opening capital of the assessee. The Ld. CIT(A) on remand report from the Assessing Officer observed that the opening balance of capital as on 31.03.2008 consisted of the following items:-
"Properties Rs.25,39,751/-
Closing Stock Rs.54,200/-
Loan and advances Rs.31,96,628/
Cash in hand Rs.2,66,560/-
Bank accounts Rs.56,454/-
Total Rs.61,13,525/-"
The Assessing Officer during remand proceedings had verified the value of property from the sale deeds which he has mentioned in his 5 ITA No. 240(Asr)/2016 Assessment Year: 2012-13 remand report. Further as regards loans and advances the Assessing Officer during remand proceedings had verified the same from the confirmed copy of accounts to whom the advances were made.
As regards cash in hand of Rs.2,66,560/-, the Assessing Officer did not find any documentary evidence except cash book. The Ld. CIT(A) therefore accepted the figures of capital as on 31.03.2008 which was verified by Assessing Officer however, in respect of cash in hand, the Ld. CIT(A) allowed relief only to the extent Rs. 50% of such cash as the Assessing Officer had stated that cash was not verifiable. After 31.03.2008, the assessee has been filing regular income tax returns and the results declared by assessee during these years has been incorporated in the order of Ld. CIT(A) at page 6 of his order.
9. The Ld. CIT(A) has taken a reasoned and justifiable view and had accepted the opening balance of capital after rejecting the claim to the extent of Rs.6,33,280/- which consisted of 50% of cash in hand and an amount of Rs.5,00,000/- which the assessee had claimed to have introduced during financial year 2010-11. We further find that in remand report the Assessing Officer has further stated that even if it is assumed that assessee had acquired these properties out of his undisclosed income, the department cannot take action being out of time limit which has been prescribed under the Income tax Act. We further find that the addition was made by Assessing Officer on account of opening balance of capital which the assessee had earned during earlier years and for which addition was not warranted during the year under 6 ITA No. 240(Asr)/2016 Assessment Year: 2012-13 consideration. The addition if any was only possible in the earlier years for which Assessing Officer should have reopened the earlier years which he did not do due to whatever reason.
10. As regards the argument of Ld. DR regarding the action of Ld. CIT(A) in invoking the provisions of rule 46A(4), we find that rule 46A(4) authorizes Ld. CIT(A) to direct the production of additional document to enable him to dispose off the appeal and the powers of Ld. CIT(A) are co terminus with the powers of Assessing Officer, therefore, even if the assessee had filed additional evidences, there is no bar on the part of Ld. CIT(A) to invoke the provisions of Rule 46A(4).
As regards the objection of Ld. DR that Ld. CIT(A) had ignored the part of remand of report wherein the Assessing Officer had mentioned that the assessee had failed to explain the source of cash entries, we find that Ld. CIT(A) has not accepted the claim of assessee with regard to Rs. 5,00,000/- and had also not acdepted the claim of cash to the extent of 50% and in view of the above facts and circumstances, we do not find any infirmity in the order of Ld. CIT(A).
12. In view of the above, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 25.08.2017 Sd/- Sd/-
(N. K. CHOUDHRY) (T. S. KAPOOR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 25.08.2017.
/GP/Sr. Ps.
Copy of the order forwarded to:
(1) The Assessee:
7 ITA No. 240(Asr)/2016
Assessment Year: 2012-13
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order