Sushila Mittal, Mansa vs Department Of Income Tax

Income Tax Officer, vs. Sh.Harbhagwan Dass Mittal, HUF Ward 1(4), Mansa. Budhlada. (Appellant) (Respondent)

C.O. No.42(Asr)/2013 (Arising out of I.T.A. No.432(Asr)/2013) Assessment year:2009-10 PAN :AAAHH5584G

Sh.Harbhagwan Dass Mittal, HUF vs. Income Tax Officer, Budhlada. Ward 1(4), Mansa. (Appellant) (Respondent)

I.T.A. No.430(Asr)/2013 Assessment year:2009-10 PAN :ACMPM1563A

Income Tax Officer, vs. Smt. Sushila Mittal Prop. Ward 1(4), Mansa. M/s. Arjan Dass & Sons, Anaj Mandi, Budhlada. (Appellant) (Respondent)

C.O. No.41(Asr)/2013 (Arising out of I.T.A. No.430(Asr)/2013) Assessment year:2009-10 PAN :ACMPM1563A

Smt. Sushila Mittal Prop. Vs. Income Tax Officer, 2 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

M/s. Arjan Dass & Sons, Ward 1(4), Mansa. Anaj Mandi, Budhlada. (Appellant) (Respondent)

I.T.A. No.431(Asr)/2013 Assessment year:2009-10 PAN :ACMPH1564H

Income Tax Officer, vs. Sh.Harbhagwan Dass Mittal, Ward 1(4), Mansa. Budhlada. (Appellant) (Respondent)

Appellant by:S/Sh. P.N.Arora & Parshotam K. Singla, Advocates Respondent by:Smt. Neeraj Sharma, DR

Date of hearing:18/02/2015 Date of pronouncement:26/02/2015

ORDER

PER BENCH:

These three appeals of the Revenue arise from three different orders

of CIT(A), Bathinda, each dated 28.03.2013 in the cases of Sh. Harbhagwan

Dass Mittal HUF, Smt. Sushila Mittal & Sh. Harbhagwan Dass Mittal for

the assessment year 2009-10. The assessees in the case of Sh. Harbhagwan

Dass Mittal, HUF & Smt. Sushila Mittal have also filed cross objections.

2. The Revenue in the case of Sh. Harbhagwan Dass Mittal, HUF ( ITA

No.432(Asr)/2013) has raised the following grounds of appeal:

"1. That on the facts and in the circumstances of the case, the ld.

CIT(A), has erred in deleting the addition of Rs.53,19,139/- made by the AO u/s 56(2)(vi) of the Income Tax Act, 1961 by 3 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

admitting the additional evidence filed at a the receipt counter of Income-tax office, Mansa on 26.12.2011 after the finalization of the assessment proceedings u/s 144 of the I.T.Act, 1961 i.e. assessment was made on 23.12.2011.

2. That the Ld. CIT(A) has erred in deleting the addition of Rs.12,36,000/- made by the AO u/s 69 of the Act by admitting the additional evidence filed at the receipt counter of the Income-tax Department on 26.12.2012 whereas assessment was made u/s 144 of the Act vide order dated 23.12.2012.s

3. That on the facts and in the circumstances of the case, the ld.

CIT(A) has erred in admitting the additional evidence filed on 26.12.2012 at the receipt counter of the Income tax office, Mansa as well as without verifying the same with the regular books of account as the assessment was made ex-parte u/s 144 of the Act by providing sufficient opportunities to the assessee.

4. All the above mentioned additions were deleted by the ld.

CIT(A) merely on the basis of admission of additional evidence filed at the receipt counter of Income Tax Office, Mansa on 26.12.2012 that too without verifying the additional evidence with the regular books of account as the assessee neither produced his regular books of account during the course of assessment proceedings nor at the time of appellate proceedings whereas the assessment was made ex-parte u/s 144 on 23.12.2011.

5. That it is prayed that the order of the Ld. CIT(A) be set aside and the of the AO be restored."

3. The assessee in C.O. No.42(Asr)/2013 (Sh.Harbhagwan Dass Mittal, HUF) has raised the following grounds:

"1. That on the facts and circumstances of the case, the ld. CIT(A) has erred by holding that as per amendment of section 292BB the service of notice can only be challenged during the assessment proceedings without appreciating that the assessee has duly challenged the jurisdiction of the AO. As such, service 4 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

of any notice and the assessment without proper jurisdiction is invalid and void abinitio.

2. That on the facts and circumstances of the case, the ld. CIT(A) has erred by holding that the assessee has not produced any evidence on account of approval given by the Addl. CIT, Range-1, Bathinda before finalization of assessment without appreciating that as per guidelines of the Central Board of Direct Taxes the approval is required in the cases selected manually. As such, assessment framed is bad in law, hence, liable to be quashed.

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

4. The Revenue in the case of Smt. Sushila Mittal ( ITA

No.430(Asr)/2013) has raised the following grounds of appeal:

"1. That on the facts and in the circumstances of the case, the ld.

CIT(A), has erred in deleting the addition of Rs.60,08,228/- made by the AO u/s 56(2)(vi) of the Income Tax Act, 1961 by admitting the additional evidence filed at a the receipt counter of Income-tax office, Mansa on 26.12.2011 after the finalization of the assessment proceedings u/s 144 of the I.T.Act, 1961 i.e. assessment was made on 23.12.2011.

2. That on the facts and in the circumstances of the case, the ld.

CIT(A) has erred in admitting the additional evidence filed on 26.12.2012 at the receipt counter of the Income tax office, Mansa as well as without verifying the same with the regular books of account as the assessment was made ex-parte u/s 144 of the Act by providing sufficient opportunities to the assessee.

3. The above mentioned addition was deleted by the ld. CIT(A) merely on the basis of admission of additional evidence filed at the receipt counter of Income Tax Office, Mansa on 26.12.2012 that too without verifying the additional evidence with the regular books of account as the assessee neither produced his regular books of account during the course of assessment 5 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

proceedings nor at the time of appellate proceedings whereas the assessment was made ex-parte u/s 144 on 23.12.2011.

4. That it is prayed that the order of the Ld. CIT(A) be set aside and the of the AO be restored."

5. The assessee in C.O. No.41(Asr)/2013 (Smt. Sushila Mittal,) has raised the following grounds:

"1. That on the facts and circumstances of the case, the ld. CIT(A) has erred by holding that as per amendment of section 292BB the service of notice can only be challenged during the assessment proceedings without appreciating that the assessee has duly challenged the jurisdiction of the AO. As such, service of any notice and the assessment without proper jurisdiction is invalid and void abinitio.

2. That on the facts and circumstances of the case, the ld. CIT(A) has erred by holding that the assessee has not produced any evidence on account of approval given by the Addl. CIT, Range-1, Bathinda before finalization of assessment without appreciating that as per guidelines of the Central Board of Direct Taxes the approval is required in the cases selected manually. As such, assessment framed is bad in law, hence, liable to be quashed.

3. That the present appeal made to the Hon'ble ITAT by the ITO, Ward 1(4, Mansa is illegal and void abinitio as he does not hold jurisdiction over the assessee as admitted by the AO himself in the remand report submitted to the CIT(A) as well as statement of facts to this appeal. Therefore, the appeal of the department is dismissed.

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

6. The Revenue in the case of Sh. Harbhagwan Dass Mittal, ( ITA

No.431(Asr)/2013) has raised the following grounds of appeal: 6 ITA Nos. 430, 431 & 432(Asr)/2013

C.O.Nos. 41 & 42(Asr)/2013

"1. That on the facts and in the circumstances of the case, the ld.

CIT(A), has erred in deleting the addition of Rs.34,44,348/- made by the AO u/s 56(2)(vi) of the Income Tax Act, 1961 by admitting the additional evidence filed at a the receipt counter of Income-tax office, Mansa on 26.12.2011 after the finalization of the assessment proceedings u/s 144 of the I.T.Act, 1961 i.e. assessment was made on 23.12.2011.

2. That the Ld. CIT(A) has erred in deleting the addition of Rs.18,01,652/- made by the AO u/s 69 of the Act by admitting the additional evidence filed at the receipt counter of the Income-tax Department on 26.12.2012 whereas assessment was made u/s 144 of the Act vide order dated 23.12.2012.s

3. That on the facts and in the circumstances of the case, the ld.

CIT(A) has erred in admitting the additional evidence filed on 26.12.2012 at the receipt counter of the Income tax office, Mansa as well as without verifying the same with the regular books of account as the assessment was made ex-parte u/s 144 of the Act by providing sufficient opportunities to the assessee.

4. All the above mentioned additions were deleted by the ld.

CIT(A) merely on the basis of admission of additional evidence filed at the receipt counter of Income Tax Office, Mansa on 26.12.2012 that too without verifying the additional evidence with the regular books of account as the assessee neither produced his regular books of account during the course of assessment proceedings nor at the time of appellate proceedings whereas the assessment was made ex-parte u/s 144 on 23.12.2011.

5. That it is prayed that the order of the Ld. CIT(A) be set aside and the of the AO be restored."

7. Since the issues involved in all the appeals are identical and belong to

the same group of family members, therefore, all the appeals are being

decided together by this consolidated order for the sake of convenience. 7 ITA Nos. 430, 431 & 432(Asr)/2013

C.O.Nos. 41 & 42(Asr)/2013

8. First of all, we take up appeal in the case of Sh. Harbhagwan Dass

Mittal HUF, in ITA No.432(Asr)/2013 as under:

9. Sh. P.N.Arora, Advocate did not press the C.O. bearing

No.42(Asr)/2013 of the assessee and accordingly, the same is dismissed as

not pressed.

10. As regards Revenue's appeal, the brief facts of the case are that the

assessee's case was selected for scrutiny through manual selection with the

prior approval of the Addl. Commissioner of Income-tax, Range-1, Bathinda

and notice u/s 143(2) of the Act was issued on 29.09.2010, as observed by

the AO at page 1 of the order. The assessee filed a letter dated 05.09.2011

regarding transfer of his case to Panchkula, since he had permanently shifted

to Panchkula and his jurisdiction lies with the ITO, Panchkula. The request

of the assessee for transfer of the case to Panchkula was rejected by the AO,

since the case was getting time barred. Accordingly, the assessee was

required to submit the details as required under section 142(1) of the Act.

The assessee sought adjournments on many dates and ultimately filed the

details like computation of chart, copy of Bank statement, list of loans,

Income and Expenditure account and balance sheet etc. The assessee did not

produce books of account. From the perusal of the accounts produced,

including capital account, balance sheet and trading account etc., the AO 8 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

observed that it is not possible to examine the books of account and

therefore, proceeded to make the assessment in the manner provided under

section 144 of the Act. The AO on perusal of the list of unsecured loans for

the years ending 31.03.2007 & 31.03.2008 and for the impugned year and

other details produced by the assessee, made the additions of Rs.53,19,139/-

and Rs.12,36,000/-. The necessary findings of the AO vide para 2.4 to 3.5

of the order are reproduced for the sake of convenience as under:

"2.4. The perusal of both the balance sheet as on 31.03.2008 and 31.03.2009 shows that the names of creditors are the same but in the balance sheet as on 31.03.2009, the assessee bifurcated the unsecured loans in three categories i.e. secured loans, unsecured loans and transferred to capital account. The reasons for bifurcating the unsecured loans in three categories are best known to the assessee. From the unsigned balance sheet as on 31.03.2009, as submitted, the assessee has transferred unsecured loans to his capital account to the tune of Rs.53,19,139/- belonging to creditors Sh. O.P. Mittal, and Sh. R.K.Mittal and their family members. In the absence of books of account, these could not be verified. On the other hand, the capital account furnished shows heavy withdrawals in cash to the tune of Rs.51,70,000/- on different dates but the assessee failed to furnish any documentary evidence regarding utilisation of these withdrawals or purpose of making withdrawals.

2.5. From this exercise of the assessee i.e. transferring unsecured loans to his capital account and making huge withdrawals in cash, it can be inferred either the unsecured loans have been repaid other than by an account payee cheques or account payee bank draft, in contravention to the provisions of sec. 269Tof I.T. Act, 1961 or it was assessee's own income from undisclosed sources.

2.6. At the time of framing the assessment for the assessment year 2007-08 in the case of Smt. Sushila Mittal w/o Sh. Harbhagwan Dass the statement of one of the creditors Sh. O.P.Mittal was recorded on 9 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

23.10.09. In his statement, Sh. O.P.Mittal deposed that it is relevant to mention here that Smt. Sushila Mittal is not in a mood to return the amount ( shown under the head unsecured loan in his income) or principal as well as of interest. Similar deposition was made by Ms. Nidhi Mittal D/o Sh.O.P.Mittal and Sh. Raman Mittal S/o Sh. O.P.Mittal in their affidavits filed during the course of assessment proceedings for the A.Y.2007-08. During the course of assessment proceedings for the A.Y . 2007-08. During the course of assessment proceedings under consideration statement of Sh. O.P. Mittal was recorded by deputing the Inspector of this office on 13.12.2011. The extract of statement is reproduced below:

".....

Q.2. Please give names and addresses of your brothers and sisters and their family details. Also please given your family tree & business/profession of your son/daughters.

Ans. Brother: 1. Sh.Harbhagwan Dass Mittal

2. Shri Ram Kishan Mittal

Sister 3. Smt. Bimla Devi (house-wife)

Whereabouts of my brothers and sisters are not known to me. My family-free is as under:-

1. Smt. Saroj Mittal,MBBS Practising with me (wife)

2. Sh.Jatinder Mittal (Married) studying MCH at Delhi ( 28 years)

3. Ms. Nidhi Mittal ( 25 years) MBA preparing for PSU competition.

Q.3. Please given details of unsecured loans as on 31.03.2009 with Smt. Sushila Mittal, Sh.bhagwan Dass Mittal, HUF and Sh. Harbhagwan Dass Mittal, Indl. In your name and in the name of your family members.

Ans. I as well as my family members have not any type of monetary dealing with the above said three persons.

10 ITA Nos. 430, 431 & 432(Asr)/2013

C.O.Nos. 41 & 42(Asr)/2013

Q.4 As per records of Sh. Harbhagwan Dass Mittal, HUF, Sh. Harbhagwan Dass Mittal, Indl. And Smt. Sushila Mittal for the year ending 31.3.2007 and 31.3.2008 available in my office, there are unsecured loans in your name and in the names of your family members. What do you want to say about this?

Ans. I have no knowledge & no relatively with the above said loans in his books and same applies to my children.

3.1. From the deposition made by one of the creditors Sh. O.P. Mittal, it is held that transferring of unsecured loans to his capital account at Rs.53,19,139/- during the year under consideration, reflected in the names of Sh. O.P.Mittal, his family members and in the names of some other relatives, is, in actual unexplained income of the assessee because in his statement, Sh. O.P.Mittal has clearly stated that he and his family members have not any type of monetary dealings with the assessee but the assessee showing them as creditors as on 31.03.2007 and 31.03.2008 under the head unsecured loans. Therefore, the assessee utilize the amount of unsecured loans, in the names of Sh. O.P.Mittal, his family members and in the names of others, as suits and convenient to him.

3.2. It is pertinent to mention here during the year under consideration, in the case of the assessee as well as in the cases of his sister concerns Smt. Sushila Mittal and Sh. Harbhagwan Dass Mittal, Indl., the unsecured loans stated to be transferred to capital accounts, relate to the family of Sh. O.P. Mittal and Sh. R.K.Mittal.

3.3. A perusal of the capital account furnished, there are huge withdrawals in cash of Rs.8,00,000/-, Rs.15,00,000/-, Rs.5,00,000/-, Rs.8,00,000/-, Rs.7,00,000/-, Rs.7,00,000/- and Rs.1,70,000/- on 10.4.2008, 20.6.2008, 15.10.2008, 05.11.2008, 25.11.2008, 02.12.2008 and 25.02.2009 respectively but the assessee failed to furnish any documentary evidence for utilization these withdrawals. The assessee stated these withdrawals have been transferred to personal account but also no personal books of account were produced inspite of sufficient opportunities afforded to the assessee. On one hand transferring the unsecured loans to the capital account and on the other hand making such huge withdrawals and keeping in 11 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

view the deposition made by Sh.O.P.Mittal creditor that he and his family members have not any type of monetary dealing with the assessee ( i.e. relinquishment of rights of claim) shows that it was assessee's own income and he is utilizing the same as and when required.

3.4. Keeping in view the foregoing facts, the amount of Rs.53,19,139/- is held as income of assessee from the sources not disclosed and assessed under the head "Income from other sources"

u/s 56(2)(vi) of the Act. I am satisfied that the assessee has concealed the particulars of his income/furnished inaccurate particulars of his income and penalty proceedings u/s 271(1)(c) of the Act, have been initiated separately.

3.5. The assessee is maintaining a saving bank account No.111121 with OBC, Budhlada. A perusal of the certified copy of bank statement of the assessee, obtained u/s 133(6) of the Act shows that there is deposit and withdrawals of Rs.2,30,000/-, Rs.821,500/- and Rs.1,85,000/- on the same dates i.e. 2.4.2008, 19,04,2008, and 04.08.2008 respectively.The sources of these deposits also remained unexplained in the absence of books of account/corroborating evidence. Therefore, this amount of Rs.12,36,000/- is added back as income unexplained investment u/s 69 of the Act.

I am satisfied that the assessee has concealed the particulars of his income and penalty proceedings u/s 271(1)(c) of the Act, have been initiated separately."

11. Before the ld. CIT(A), the assessee raised as many as 12 grounds of

appeal and filed the application for additional evidence under Rule 46A of

the I.T. Rules, 1962. The Ld. CIT(A) dismissed all the legal grounds No. 2,

3, 4, 5, 8 & 11 before him for the reasons mentioned in his order. On merit,

the ld. CIT(A) deleted the addition of Rs.53,19,139/- after taking the remand

report from the AO and admitting the additional evidence and also deleted

the addition of Rs.12,36,000/- vide page 7 to 9 of his order. 12 ITA Nos. 430, 431 & 432(Asr)/2013

C.O.Nos. 41 & 42(Asr)/2013

12. The Ld. DR argued that the assessee was not co-operative during

assessment proceedings and no books of account were produced during

assessment proceedings, since sufficient opportunities were offered to the

assessee to comply with the statutory notices issued. The assessee does not

have any reasonable cause for the admission of additional evidence before

the ld. CIT(A) and, therefore, the ld. CIT(A) was not justified in admitting

the additional evidence.

13. The Ld. Counsel for the assessee, Mr. P.N.Arora, Advocate, on the

other hand, relied upon the submissions made before the AO and the ld.

CIT(A) and further relied upon the findings of the ld. CIT(A) deleting the

additions of Rs.53,19,139/- and Rs.12,36,000/-.

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

It was submitted by the ld. Counsel for the assessee before the ld. CIT(A),

which for the sake of convenience is reproduced hereinbelow:

"That as per assessee, he has permanently shifted to Panchkula, therefrom return for the year under ference has been filed under his Panchkula address. Accordingly, in response to notice issued by the AO made a request vide his letter dated 12.09.2011 and 03.10.2011 for transfer of his cases to Panchkula. Further the main head of the family, Sh.Harbhagwan Dass Mittal was not feeling well remained admitted in Medanta Hospital in the month of October due to lever infection and heart problem, pace maker was placed and was discharged on 21.10.2011 and advised complete rest and avoid dust etc. On this ground the case was adjourned for 03.11.2011 and again on 09.11.2011 and furher on 23.11.2011 . On 23.11.2011 the assessee engaged counsel Sh. Ashwani Juneja and filed maximum reply except 13 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

certain papers as required till 19.12.2011. On 19.12.2011 the case was adjourned for 21.12.2011 for filing the balance information though the assessee requested for some more one or to day's time as it is not possible for filing the information after traveling to Chandigarh from Mansa and back Chandigarh to Mansa within one day after preparing the information. The information has been filed on 26.12.201.1 The relevant information has also been filed before the Ld. JCIT, R-1, Bathinda in response to penalt. Reply filed before the ld. JCIT is as under:

"With reference to your penalty notice dated 24.07.2012 in the above noted case it is respectfully submitted that in this case my firm namely Arjan Dass Pyare Lal which I am proprietor has to pay certain liabilities on account of loan and interest outstanding in the name of Sg. O.P.Mittal and his family members. On 06.05.2008 there started a disputed between my family and the family of Sh.O.P. Mittal against which a Police report has been made by Sh.O.P.Mittal which was converted to FIR on 08.03.2009. During the period negotiation was also going on but not matured till date. Originally the amounts payable to Sh.O.P. Mittal and has family was outstanding in my firm in which business is being done by me but it was transferred to my personal balance sheet and shown as liabilities by passing a general entry so that if the dispute is not settled or negotiation are not matured it will not effect my business. Otherwise there is no dispute that no re-payment has been made to Sh. O.P.Mittal or his family members and the amount is still outstanding as per statement recorded by the AO on 23.10.09 in which Sh.O.P.Mittal has duly admitted that no payment has been made to him in respect of loan outstanding as on 31.03.2007 and 31.03.2008 in his name or his family members. On the basis of this statement no adverse view has been taken at the time of finalizing the assessment proceedings for the assessment yea 2007-08 on account of outstanding liability of Sh.O.P.Mittal or his family members."

In view of the aforesaid facts, it is, therefore, requested that the penalty proceedings started in this case may kindly be dropped."

In view of the above, the assessee was prevented by reasonable and sufficient cause for not filing the information as required and also keeping in view the serious illness of the head of the assessee 14 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

appellant family, it is requested hat the additional information as filed on 26.12.2011 may kindly be admitted before disposing of the case as per grounds of appeal taken by the assessee."

15. The documents filed on 26.12.2011 in the form of additional evidence

before the ld. CIT(A) are as under:

1. Balance sheet, Profit & loss, Capital A/c of M/s. Hindustan Finance Corpn.

2. Personal Balance sheet, profit Loss and capital a/c

3. Proof of Investment - LIC -PPF

4. Proof of PPF withdrawal

5. Copy of account unsecured loan and proof of new addition

6. Copy of A/c loans & advances.

7. Copy of Bank a/c SBOP-C/A OBC-CD, OBC-S/A, PNB - C/A

8. Detail of interest

9. Detail of salary

10. Reply of your letter dt. 3.11.2011.

16. The application of the assessee for admission of additional evidence

alongwith the above said documents were forwarded to the AO for

comments, who stated that the assessee was provided sufficient

opportunities for submitting the documents but same were not furnished and

the AO finalized the assessment on 23.12.2011 whereas, the assessee

submitted the said documents only on 26.12.2011 after assessment

proceedings were completed and therefore, the AO in the remand report

stated that the additional evidence be not admitted.

17. The Ld. CIT(A) after examining the case of the assessee and the

report of the AO observed that the assessee has not given any comments on 15 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

the reasonable cause mentioned by the assessee in his application i.e. for the

prolonged illness. It was observed by the ld. CIT(A) that the assessment

proceedings were started though in the month of Sept., 2010 and thereafter,

the proceedings were not taken up, which, in fact, were taken up after a gap

of one year i.e. on 29.08.2011. The assessee made a request to transfer his

case to Panchkula because his jurisdiction lies at Panchkula, which was

rejected and case was fixed for 05.10.2011 and thereafter on 17.10.2011, the

assessee sought adjournment on medical grounds of Sh.Harbhagwan Dass

Mittal, who was admitted in the Mednta Hospital, Gurgaon in emergency on

10.10.2011 on account of congestion in the heart. The case was adjourned

to 03.11.2011 and thereafter on 9.11.2011. The assessee was advised

complete bed rest and the case was adjourned on various dates and the

assessee attended the proceedings and filed maximum information, as

required by the AO and on 21.12.2011, the assessee sought adjournment and

required time for 2-3 days, which in fact, was not given by the AO and the

assessment was completed on 23.12.2011. But the assessee still filed the

information on 26.12.2011 before the AO, which in fact, are the additional

evidences before the ld. CIT(A). In the facts and circumstances of the case,

we find no infirmity in the order of the ld. CIT(A) for admitting the

additional evidence, since the assessee was prevented by reasonable and 16 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

sufficient cause for not filing the information due to prolonged illness and

due to the reasons he was residing at Chandigarh and he has to travel from

Chandigarh to Mansa to attend the proceedings and it was a fit case for

admission of additional evidence. Therefore, ground taken by the Revenue

against admission of the additional evidence is rejected and the arguments

made by the Ld. DR cannot help the revenue.

18. As regards the addition of Rs.53,19,139/- on account of unsecured

loans in the name of Sh.O.P.Mittal, Sh.R.K.Mittal and their family members,

it is on record before the AO as well as ld. CIT(A) that all these loans are

outstanding since assessment year 2007-08. As regards the statement of

Sh.O.P.Mittal, which was recorded on 23.10.2009, as referred to by the AO,

no adverse view has been taken by the AO while completing the assessment

proceedings. It was observed by the AO vide para 2.5 of the order that by

transferring unsecured loans to the personal books, it can be inferred either

the unsecured loans have been repaid other than by an account payee cheque

or account payee bank demand draft in contravention to the provisions of

sec. 269T of the Act or it was assessee's own income from undisclosed

sources. For violation of the provisions of sec. 269T of the Act, penalty

proceedings were initiated against the assessee for which the assessee 17 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

submitted the reply, which for the sake of convenience is reproduced as

under:

"With reference to your penalty notice dated 24.07.2012 in the above noted case it is respectfully submitted that in this case my firm namely Arjan Dass Pyare Lal of which I am proprietor has to pay certain liabilities on account of loan and interest outstanding in the name of Sh.O.P.Mittal and his family members. On 06.05.2008 there started a disputed between my family and the family of Sh.O.P.Mittal against which a Police report has been made by Sh.O.P.Mittal which was converted to FIR on 9.3.2009. During this period negotiation was also going on but not matured till date. Originally the amounts payable to Sh.O.P. Mittal and has family was outstanding in my firm in which business is being done by me but it was transferred to my personal balance sheet and shown as liabilities by passing a general entry so that if the dispute is not settled or negotiation are not matured it will not effect my business. Otherwise there is no dispute that no re-payment has been made to Sh. O.P.Mittal or his family members and the amount is still outstanding as per statement recorded by the AO on 23.10.09 in which Sh.O.P.Mittal has duly admitted that no payment has been made to him in respect of loan outstanding as on 31.03.2007 and 31.03.2008 in his name or his family members. On the basis of this statement no adverse view has been taken at the time of finalizing the assessment proceedings for the assessment yea 2007-08 on account of outstanding liability of Sh.O.P.Mittal or his family members.

19. It is pertinent to mention that after considering the reply of the

assessee, the penalty proceedings so initiated were dropped by the Joint

Commissioner of Income Tax (In short. 'JCIT'). Therefore, the findings of

the AO in the para 2.5 referred to hereinabove with regard to repayment

other than by an account payee cheques or account payee bank draft become

infructuous and there is no material on record of repayment of such loans 18 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

brought on record by the AO. Also, the findings of the AO that it is

assessee's own income from undisclosed sources during the year have not

been established by bringing any material on record. Moreover, the said

amount cannot be treated as income of the impugned year since all the loans

have been received by the assessee in earlier years which is a matter of

record in the order of the AO and therefore, earlier years loans, which are

outstanding since assessment year 2007-08 cannot be given a colour of

undisclosed income of the impugned year. The Ld. CIT(A) has examined

all the evidences placed as additional evidences on record that all the

unsecured loans received in the earlier years were still outstanding in the

impugned year. The assessee has submitted the explanation before the AO in

the penalty proceedings for transferring some of the personal loans before

the ld. JCIT . In the facts and circumstances of the case, we find no infirmity

in the order of the ld. CIT(A), who has rightly deleted the addition so made

by the AO.

20. As regards the addition made for deposit in the bank account

No.111121 with OBC, Budhlada on 2.4.2008, 19.4.2008 and 4.8.2008

amounting to Rs.2,30,000/-, Rs.8,21,500/- and Rs.1,85,000/- respectively,

the ld. CIT(A) has examined the additional evidence that the said amount

has been transferred from the current account to the saving bank and there is 19 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

no justification in making addition of Rs.2,30,000/-, Rs.8,21,500/- and

Rs.1,85,000/- totaling Rs.12,36,000/-. In such facts and circumstances of the

case, we find no infirmity in the order of the ld. CIT(A), who has rightly

deleted the addition so made by the AO. Thus, all the grounds of the

Revenue are dismissed.

21. In the result, both the appeal of the Revenue in ITA No.432(Asr)/2013

and C.O. No.42(Asr)2013 of the assessee are dismissed.

22. Now, we take up the appeal of the Revenue in ITA No.430(Asr)/2014

in the case of Smt. Sushila Mittal. The Ld. Counsel for the assessee did not

press C.O. bearing No.41(Asr)/2013 and accordingly, the same is dismissed

as not pressed.

23. As regards the grounds of the revenue, the facts are similar as in the

case of Sh.Harbhagwan Dass Mittal, HUF in ITA No.432(Asr)/2013 except

the amount of loans received which is Rs.60,08,228/- in the present case. All

other facts regarding observation of the AO for non-cooperative attitude of

the assessee and assessee's explanation for shifting the jurisdiction at

Panchkula and submission of part details before the AO, submission of

additional evidence before the ld. CIT(A), remand report from the AO and

finding of the ld. CIT(A) are similar as in the case of Sh.Harbhagwan Dass

Mittal, HUF in ITA No.432(Asr)/2013 (supra). Therefore, our findings in 20 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

the case of Sh.Harbhagwan Dass Mittal, HUF in ITA No.432(Asr)/2013

(supra) are identically applicable in the present case and accordingly, we

find no infirmity in the order of the ld. CIT(A) deleting the addition so made

by the AO and accordingly all the grounds of the revenue are dismissed.

24. In the result, both the appeal of the Revenue in ITA No.430(Asr)/2013

and C.O. No.41(Asr)2013 of the assessee are dismissed.

25. Now, we take up the appeal of the Revenue in ITA No.431(Asr)/2014

in the case of Sh. Harbhagwan Dass Mittal. The facts in the present case are

are similar as in the case of Sh.Harbhagwan Dass Mittal, HUF in ITA

No.432(Asr)/2013 except the amount of loans received which is

Rs.34,44,348/- and Rs.18,01,652/- in the present case. All other facts

regarding observation of the AO for non-cooperative attitude of the assessee

and assessee's explanation for shifting the jurisdiction at Panchkula and

submission of part details before the AO, submission of additional evidence

before the ld. CIT(A), remand report from the AO and finding of the ld.

CIT(A) are similar as in the case of Sh.Harbhagwan Dass Mittal, HUF in

ITA No.432(Asr)/2013 (supra). Therefore, our findings in the case of

Sh.Harbhagwan Dass Mittal, HUF in ITA No.432(Asr)/2013 (supra) are

identically applicable in the present case and accordingly, we find no 21 ITA Nos. 430, 431 & 432(Asr)/2013 C.O.Nos. 41 & 42(Asr)/2013

infirmity in the order of the ld. CIT(A) deleting the addition so made by the

AO and accordingly all the grounds of the revenue are dismissed.

26. In the result, all the three appeals of the Revenue in ITA Nos.

432(Asr)2013, 430(Asr)/2013 & 431(Asr)/2013 and C.O. Nos. 42

(Asr)/2013 & 41(Asr)/2013 of the assessees are dismissed.

Order pronounced in the open court on 21st February, 2015.

Sd/- Sd/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 21st February, 2015 /SKR/ Copy of the order forwarded to:

1. The Assessees:i) Sh.Harbhagwan Dass Mittal, HUF (ii) Sh.Harbhagwan Dass Mittal & (iii) Smt. Sushila Mittal.

2. The ITO Ward 1(4), Mansa.

3. The CIT(A), Bathinda.

4. The CIT, Bathinda.

5. The SR DR, ITAT, Amritsar.

True copy By order

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