Mandeep Kaur, Faridkot vs Assessee

Smt. Mandeep Kaur, vs. Income Tax Officer, C/o Bhupindra Maternity Home, Ward III(4), Circular Road, Faridkot. Faridkot. (Appellant) (Respondent)

Appellant by:S/Sh.P.N.Arora, & Sh.Parshotam K. Singla, Advocates Respondent by:Sh.Tarsem Lal, DR

Date of hearing:10/02/2015 Date of pronouncement:13/02/2015

ORDER

PER B.P.JAIN,AM:

This appeal of the assessee arises from the order of the CIT(A),

Bathinda dated 29.11.2013 for the assessment year 2010-11. The assessee

has raised the following grounds of appeal:

"1. On the facts & in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of Rs.4,90,000/- u/s 56(2) of the I.T.Act whereas the amount was taken as loan by her husband from his relatives/friends which was paid back. As such, provisions of section 56(2) of the I.T. Act, are not applicable.

2 ITA No.109(Asr)/2014 2. On the facts & in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of Rs.4,90,000/- on the ground that assessee appellant failed to produce any evidence in support of source and genuineness of the loan without appreciating that the loan was taken by Sh. Bhupinder Pal Singh and deposited in the joint bank account. The first name in the draft as well as in the bank account is of Sh. Bhupinder Pal Singh. As such, the addition made in the hands of assessee appellant is unjustified. The account number in which the above said draft was deposited was being mainly operated by Sh. Bhupinnder Pal Singh (estranged husband) with whom divorced case is pending since 2010. Hence, this draft should have been counted in the income of 2010-11 of Sh.Bhupinder Pal Singh and the draft in question of Rs.4,90,000/- was issued by the relative of Bhupinder Pal Singh.

3. On the facts & in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of Rs.4,90,000/- on the ground that no application under Rule 46A of the I.T.Rules has been filed for admitting the additional evidence without appreciating that the assessee has not brought any new evidence during the appellate proceedings but relied on the evidence already before the AO. As such, the findings of the CIT(A) are irrelevant especially when assessee made request that the deposit in the joint bank account of Rs.4,90,000/- does not belong to her but belongs to Sh. Bhupinder Pal Singh.

4. On the facts & in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of Rs.10,010/- on account of bank interest whereas there was loss under the head interest after considering the interest paid to HDFC Bank on home loan. Therefore, addition made is uncalled for an liable to be deleted.

5. That the appellant craves to add or amend the grounds of appeal."

2. As regards grounds No. 1, 2 & 3, the brief facts of the case are that the

assessee had maintained saving bank account with HDFC Bank jointly with 3 ITA No.109(Asr)/2014

her husband. The assessee could not explain the deposit of Rs.4,90,000/- on

19.03.2010 and the same was added to the income of the assessee u/s 56(2)

of the Income Tax Act, 1961 ( In short, 'the Act').

3. The Ld. CIT(A) confirmed the action of the Assessing Officer.

4. The Ld. counsel for the assessee, Mr. P.N.Arora, Advocate argued

that the assessee's husband Sh.Bhupinder Singh took unsecured loan of

Rs.4,90,000/- from his relative, Sh. Arpan Preet Singh R/o Sri Ganga Nagar,

Rajasthan from HDFC Bank through demand draft dated 16.03.2010 and a

copy of the same is available at page 3 of the paper book. The assessee's

husband deposited the same in HDFC Bank Account on 19.03.2010 which

was a joint account in the name of assessee's husband Sh.Bhupinder Singh

and assessee. The AO came to the erroneous conclusion that a sum of

Rs.4,90,000/- is liable to be added in the total income by invoking the

provisions of section 56(2) of the Act. This view was upheld by the Ld.

CIT(A) against which the assessee preferred an appeal before the Tribunal.

The ld. counsel for the assessee submitted that this fact was explained in the

written submissions before the ld. CIT(A), which is available at pages 1 & 2

of the paper book and the relevant portion is reproduced as under:

"Reg: Deposits in HDFC Bank A/c No.27222

That as stated above the assessee is a employee and as per Income Tax Act, 1961, he is not liable to maintain the books of account, but she has maintained the bank accounts and the complete detail of bank deposits and withdrawals alongwith documentary 4 ITA No.109(Asr)/2014

evidence/details is already provided during the course of assessment proceedings and the same is placed on the file except one cheque (Rs.4,90,000/- dated 19/03/2010). In this regard assessee has clarified to the ITO that she has some disputes with her husband Sh. Bhupinder Pal Singh and a divorce case is already filed between them. That the S.B. A/c No.0107100027222 with the HDFC Bank is a joint bank account and is operated by Sh. Bhupinder Pal Singh. That during the A.Y. 2009-10 Sh. Bhupinder Pal Singh has taken a unsecured loan of Rs.4,90,000/- from his relative Sh. Arpanpreet Singh R/o Sri Ganga Nagar, Rajasthan and not by the assessee. That now I have not got the copy of DD No.004999 issued on 16.03.2010 (copy of the same is enclosed for verification) from S.B. A/c No.05051000161067 of Sh. Arpanpreet Singh(the relative of Sh. Bhupinder Pal Singh from whom he has taken unsecured loan) R/o Sri Ganga Nagar, Rajasthan in favour of Sh. Bhupinder Pal Singh & Mandeep Kaur jointly. So, the addition of Rs.4,90,000/- u/s 56(2) in the hands of the assessee is not justified and liable to be set aside."

4.1. It was further argued that demand draft was issued by the HDFC

Bank, Sri Ganga Nagar, Rajasthan, a copy of the bank account is available at

page no.4 of the paper book. It was pointed out that this account was jointly

maintained in the name of Sh. Bhupinder Pal Singh, husband of the assessee

and the assssee and this account was operated by assessee's husband Sh.

Bhupinder Pal Singh.

4.2. The Ld. counsel further pointed out that the department has not taken

any action in the hands of assessee's husband Sh. Bhupinder Pal Singh, who

is an existing assessee and is being assessed to income tax by the same

Income Tax Officer. A copy of the assessment order u/s 143(3) of the Act,

in the case of Sh. Bhupinder Pal Singh for the A.Y. 2010-11, dated

22.03.2013 is placed on record. Whereas the assessment in the case of the 5 ITA No.109(Asr)/2014

assessee was completed on 26.03.2013 i.e. after 3 days from the date of

completion of assessment in the case of Sh. Bhupinder Pal Singh and no

action has been taken in the hands of Sh. Bhupinder Pal Singh. Thus, grave

injustice has been done to the assessee & step motherly treatment has been

given to the assessee by the department. Furthermore, the Ld. CIT(A) was

not justified in admitting the relevant material which was necessary for

deciding the appeal. In view of these circumstances, it is very respectfully

prayed that the addition made may kindly be deleted. Alternatively, the

addition, if any, should have been made in the hands of assessee's husband

Sh. Bhupinder Pal Singh.

4.3. The Ld. counsel further stated that the ld. CIT(A) has grossly erred in

upholding the addition of Rs.4,90,000/- on the ground that application under

Rule 46A of the Income Tax Rules, has been filed for admitting the

additional evidence without appreciating that the assessee has not brought

any new evidence during the assessment proceedings but the Ld. CIT(A)

relied on the evidence already filed before the AO. As such the contentions

of the Ld. CIT(A) are irrelevant especially when the assessee has made a

request that the amount deposited in the joint bank account for Rs.4,90,000/-

does not belong to assessee but the same belongs to Sh. Bhupinder Pal

Singh. The AO has not taken any amount in the hands of Sh. Bhupinder Pal

Singh and has chosen to tax the assessee for no reason. In view of these 6 ITA No.109(Asr)/2014

circumstances, the Ld. CIT(A) was not justified in upholding the addition

and prayed that the addition made may be deleted, as the authorities below

have not appreciated the point raised before them.

5. The Ld. DR, on the other hand, relied upon the orders of both the

authorities below.

6. We have heard the rival contentions and perused the facts of the case.

The undisputed facts of the case are that the assessee did not explain the

source of deposit of Rs.4,90,000/- except stating that her husband Sh.

Bhupinder Pal Singh has taken some unsecured loan from some near and

dear and the name of the person from whom loan has been taken has slipped

out from assessee's mind. However, before the Ld. CIT(A), it was submitted

that the assessee has maintained a joint account with her husband Sh.

Bhupinder Pal Singh. The assessee is having dispute with her husband and

divorce case is already filed between them. A copy of the demand draft was

produced before the ld. CIT(A) received from one Arpanpreet Singh R/o Sri

Ganga Nagar, Rajasthan, a relative of assessee's husband. The name of the

husband of the assessee Sh. Bhupinder Pal Singh is the first name in the

demand draft, as placed on record at page 3 of the paper book. It was

submitted before the Ld. CIT(A) that a loan of Rs.4,90,000/- has been taken

by the husband of the assessee and not by the assessee. The Ld. CIT(A),

however, rejected the claim of the assessee by observing that a copy of bank 7 ITA No.109(Asr)/2014

account of Sh. Arpanpreet Singh or any other evidence regarding source and

genuineness of loan has not been filed by the assessee and there is no

application under Rule 46-A of the I.T. Rules, for admitting the additional

evidence.

6.1. Though, the assessee has not moved any proper application under

Rule 46-A of the I.T. Rules, 1962, for admitting the additional evidence

before the ld. CIT(A) but at the same time, a copy of the demand draft of

Rs.4,90,000/- was produced before the ld. CIT(A) and with this

information, it is evident that the said amount has been taken as a loan from

Sh. Arpanpreet Singh R/o Sri Ganga Nagar, Rajasthan, who has issued

demand draft from HDFC Bank. The assessee has also submitted that the

said loan has been taken, in fact, by the husband of the assessee and the

same has been used by the husband of the assessee as per copy of bank

account placed at page 4 of the paper book. A copy of the said bank account

was available with both the authorities below. The Ld. CIT(A) could have

obtained copy of bank account of Sh.Arpanpreet Singh from HDFC Bank

and could have examined the genuineness of loan from Sh. Arpanpreet

Singh. It was too early for the ld. CIT(A) to come to the conclusion that the

loan of Rs.4,90,000/- is the income of the assessee. Thus, in the interest of

justice, the matter is remitted back to the file of the Ld. CIT(A), who will

examine the genuineness of loan, as submitted by the assessee from Mr. 8 ITA No.109(Asr)/2014

Arpanpreet Singh and decide the issue denovo, in view of the submissions

made by the assessee before him but by affording adequate opportunity of

being heard to the assessee. The assessee is also directed to co-operate in

the proceedings before the ld. CIT(A). Thus , grounds No. 1, 2 & 3 of the

assessee are allowed for statistical purposes.

7. Ground No.4 has not been pressed by the Ld. Counsel for the

assessee, therefore, the same is dismissed as not pressed.

8. In the result, the appeal of the assessee is partly allowed for statistical

purposes.

Order pronounced in the open court on 13th February, 2015.

Sd/- Sd/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 13th February, 2015 /SKR/ Copy of the order forwarded to: 1. The Assessee:Smt. Mandeep Kaur, Faridkot 2. The ITO Ward III(4), Faridkot. 3. The CIT(A) 4. The CIT 5. The SR DR, ITAT, Amritsar. True copy By order

(Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.