AO have no right to take decision without supporting evidence and assessee must give explanation to his claim

IN THE INCOME TAX APPELLATE TRIBUNAL

(DELHI BENCH `F’: NEW DELHI)

BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND

SHRI A.N. PAHUJA, ACCOUNTANT MEMBER

ITA No.4090/Del /2011

(Assessment Year: 2008-09)

ACIT, Circle 25(1),

Gurgaon

(Appellant)

Vs.

Smt. Rajni Malik,

73/17, Sector, Defence Colony,

Gurgaon.

(PAN/GIR No.ACKPM1998F)

 (Respondent)

Assessee by: Shri A.K. Srivastava, CA

Revenue by: Dr. B.R.R. Kumar, Sr.DR

ORDER

PER U.B.S. BEDI, J.M.

This appeal of the department is directed against the order passed by the CIT(A)- XXIV, New Delhi, dated 04.06.2011, relevant to assessment year 2008-09, whereby deletion of penalty of Rs.1,32,52,409/- has been challenged on the ground that CIT(A) without going into merits whether the same is to be treated as income from undisclosed sources or long term capital gain.

2. Facts indicate that in this case, the assessee was a proprietor of a boutique, which she was running at Naraina Vihar, New Delhi. She had inherited jewellery from her late mother and father from the locker which was relinquished to her vide a Relinquishment Deed. She had also inherited jewellery from her late mother-in-law. During the year under consideration, the assessee had sold jewellery for a sum of Rs.1,32,52,409/- and had declared taxable long term capital gain on the same to the tune of Rs.37,922/-. The Assessing Officer, did not accept the explanation of the assessee and treated the whole amount as investment in jewellery from unaccounted sources and accordingly framed the assessment order.

3. Aggrieved by the order of the Assessing Officer, assessee filed appeal and raised the following grounds:

a) The notice u/s 154/155 is totally incorrect and wrongly worded as the Assessing Officer has again purposed to tax the income as “Long Term Capital Gain” whereas the ITNS 50 speaks otherwise.

b) The order u/s 154/143(3) passed by the Assessing Officer is inadmissible, bad in law, against the facts and illegal.

c) The demand raised u/s 156 is absolutely incorrect, inasmuch as only “Additional Tax” should have been demanded from the appellant u/s 156.

d) The appellant may be allowed to add any other grounds of appeal at the time of hearing.

4. Ld.CIT(A) while considering and accepting the plea of the assessee, has deleted the addition of Rs.1,32,52,409/- as per paras.4 & 5 of his order which is reproduced as under:

“4. I have gone through the assessment order very carefully and have considered the submissions made by the appellant. The original order passed by the Assessing Officer u/s 143(3) of the Act on 30.11.2010 was also a subject matter of appeal before the undersigned. The substantive additions made by the Assessing Officer have been considered in detail in my said order dated 31.05.2011 in appeal No.198/10-11. For the reasons given in my abovementioned order, the addition made by the Assessing Officer for a sum of Rs.1,32,00,000/- was deleted. In view of the findings given in that order, the order u/s 154/143(3) of the Act passed by the Assessing Officer on 03.02.2011 does not survive.

5. Therefore, following my order in appeal 198/10-11 dated 31.05.2011, the additions made by Assessing Officer to the tune of Rs.1,32,52,409/- are hereby deleted.”

5. Aggrieved by this order of the CIT(A), department has come up in appeal. It is common ground of both the sides that issue is squarely covered in favour of the assessee by tribunal’s decision in assessee’s own case for the same assessment year in earlier round of proceedings in I.T.A. No.3641/Del/2011 for assessment year 2008-09 dated 25.10.2011, which came to be passed in appeal of the Revenue and CIT(A) has followed his own decision dated 31.5.2011 to delete the addition by observing that the order passed u/s 154/143(3) of the Act, by the Assessing Officer on 3.2.2011 does not survive. Therefore, in view of earlier decision of this bench in assessee’s own case, the appeal of the Revenue is liable to be dismissed, which may be dismissed.

6. We have heard both the sides and considered the material on record and find that with respect to assessment framed u/s 143(3) dated 30.11.2010, addition of Rs.1,32,52040/- was made, against which the assessee filed appeal and CIT(A) deleted such addition vide order dated 31.5.2011 against which the department filed appeal and Tribunal upheld the order of CIT(A) vide order dated 25.10.2011 in I.T.A No.3641/Del.2011 for assessment year 2008-09. Meanwhile, Assessing Officer passed another order u/s 154/143(3) on 3.2.2011 making the same addition, against which assessee filed appeal and CIT(A) deleted the impugned addition while following his earlier order dated 31.5.2011. Since issue is squarely covered in favour of the assessee inasmuch as the Ld.CIT(A) has followed his earlier decision which has been confirmed by the tribunal in assessee’s own case in first round of proceedings, therefore, we do not find any reasonable basis to interfere in the order passed by the CIT(A) which is confirmed and appeal of the Revenue is dismissed.

6. As a result, appeal of the department gets dismissed.

Order pronounced in open court soon after the conclusion of the hearing on 10.05.2012.

                                                       Sd/-                                     Sd/-

                                             (A.N. PAHUJA)                 (U.B.S. BEDI)

                                     ACCOUNTANT MEMBER  JUDICIAL MEMBER

Dated: May 10, 2012

SKB

Copy of the order forwarded to:-

1. Appellant

2. Respondent

3. CIT

4. CIT (A)-XXIV, New Delhi.

5. CIT (ITAT)

Deputy Registrar, ITAT