IN INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARMA, A.M. PAN NO. : ATLPS9866E I.T.A.No.574 & 575/Ind/2005 A.Y. : 1996-97 & 1997-98 Jai Prakash Sharma, Income tax Officer, Prop. M/s. Ajai vs Dewas Trasnport Co., 30, Civil Lines, Dewas Appellant Respondent Appellant by : S/Shri J.N. Sharma & Jaiprakash Sharma Respondent by : Shri Arun Dewan, Sr. DR Date of Hearing : 15.12.2011 Date of : 28.12.2011 pronouncement ORDER PER R. C. SHARMA, A.M. These are appeals filed by assessee against orders of CIT(A) both dated 31.3.2005 for assessment years 1996- 97 and 1997-98. -: 2: - 2. Grounds taken by assessee in I.T.A.No. 574/Ind/2005 reads as under : 1. On facts and in circumstances of case and in law, ld. CIT(A) erred in : i) rejecting ground that assessment order was illegal and without jurisdiction. ii) in maintaining addition of Rs. 8,38,786/- in respect of unexplained investment in house property in name of appellant s wife, On protective basis , in hands of appellant. iii) in directing AO u/s 153(3) of Income- tax Act, 1961,, to initiate appropriate steps for considering such investment in hands of Smt. Lata Devi Sharma by issue of notice u/s 148. iv) in making observations regarding assessment order for assessment year 1998-99 (which was not subject matter of appeal at all) that it was not left open to discretion of present AO to take any other view in 2 -: 3: - matter of investment in construction of house, then what was taken by his predecessor in office. v) In getting issued notice u/s 148 for assessment year 1998-99 on 30.03.2005 during pendency of this appeal which was disposed off on 31.03.2005 during pendency of this appeal which was disposed off on 31.03.2005. vi) in confirming addition of Rs. 2,80,800/- u/s 68 of Act, by observing that provisions of Section 69A are attracted instead of Section 8 applied by Assessing Officer. vii) in enhancing income from bus plying from Rs. 43,330/- to Rs. 2.50 lakhs (after considering claim of depreciation and provisions of Section 28(2)), without adhering to provisions of Section 251(2) and that too without providing any opportunity to appellant. 3 -: 4: - 3. Apart from above, assessee vide application dated 16.07.2010 has prayed before us to admit additional ground of appeal, which reads as under :- On facts and in circumstances of case and in law, ld. CIT(A) erred in assuming jurisdiction to issue statutory directions to AO u/s 251(2) r/w explanation thereto, to issue notices u/s 148 for assessment years 1992-93 to 1995- 96, without first complying with express requirements contained in said sanction and explanation. 4. Grounds taken by assessee in I.T.A.No. 575/Ind/2005 reads as under : 1. On facts and in circumstances of case and in law, ld. CIT(A) erred in : i) rejecting ground that assessment order was illegal and without jurisdiction. ii) in enhancing income from bus plying from Rs. 37,250/- to Rs. 2.50 lakh ( after 4 -: 5: - considering claim of depreciation and provisions of Section 28(2) ), without adhering to provisions of Section 251(2) and that too without providing any opportunity to appellant. iii) in maintaining addition of Rs. 6,25,938/- in respect of unexplained investment in house property in name of appellant s wife on protecting basis in hands of appellant. 5. Rival contentions have been heard and records perused. 6. First grievance of assessee in assessment year 1996-97 pertains to maintaining addition of Rs. 8.38 lakhs in respect of unexplained investment in house property. From record, we found that AO has made this addition in assessee s hands as he could not explain investment made in house, which was standing in name of his wife. ld. CIT(A) upheld addition on protective basis in assessee s 5 -: 6: - hands because house was standing in name of his wife and she was legal owner of house. ld. CIT(A) upheld addition on protective basis in assessee s hands and directed AO to issue notice u/s 148 in name of his wife Smt. Lata Devi Sharma, since house was standing in her name. We do not find any infirmity in order of CIT(A) in so far as house was in name of his wife and both are separate entity and wife is required to explain source of amount invested in construction of house. Accordingly, ground taken with regard to maintaining addition on protective basis by CIT(A) is hereby dismissed. 7. assessee is also aggrieved for confirming addition of Rs. 2,80,800/- u/s 68 of Income-tax Act, 1961. Contention of ld. Authorized Representative was that confirmation letters were filed in respect of these credits and statements of some of creditors were also recorded by Assessing Officer. Those creditors who could not attend office due to harvesting season had filed their affidavits confirming advances given to assessee. In brief fact emerged that none of creditors denied to have advanced loan to 6 -: 7: - assessee. But AO on basis of his prejudiced conclusions based on presumptions, assumptions, estimations and surmises, added total amount of Rs. 2,80,500/- as unexplained and that too unlawfully u/s 68 of Income-tax Act, 1961. 8. As per ld. Authorized Representative there were in all 15 creditors in list totalling to Rs. 2,80,500/- and out of these only three belonged to Dewas proper and rest belonged to places out of Dewas. Even then assessee made all possible efforts to collect confirmations letters and/or affidavits in respect of creditors and produced 5 persons for examination before AO creditor-wise details are given below :- a) Shri Krishnadas S/o Girdharidas Bairagi, Village Kallukhedi Sonkatech Dist. Dewas Rs. 19,000/- confirmation letter filed on 20.01.1999. In statement of oath recorded by Assessing Officer Shri Krishnadas Bairagi 7 -: 8: - has categorically stated to have advanced Rs. 19,000/- to assessee. Copy of Confirmation letter Paper book Page 15. Copy of statement paper book page 16 to 22 b) Dr. Shri Anil Kumar S/o Rampadarath Singh Solanki, Village Barodia, The. Bhujalpur, Dist. Shajapur Rs.19,000/-. Confirmation letter filed on 20th January, 1999. He has filed affidavit, verifying that he had advanced Rs. 19,000/- to assessee on 1.6.95. He had also come to Dewas for giving his statement before AO, but due to non-availability of assessee he could not come to office. Copy of confirmation letter P.B.Page 23 Copy of Affidavit Paper book page 24 & 25. 8 -: 9: - c) Radheshyam S/o Ramsingh Patel, Agriculturist, Village Davli, Tehsil Tonk Khurd, Distt. Dewas Rs. 19,000/- Confirmation letter filed on 20.01.99. He has also filed affidavit stating that he is agriculturist and out of agricultural income he had advanced Rs. 19,000/- to assessee on 2nd June, 1995. due to harvesting season he could not attend before AO. Copy of confirmation letter P.B.Page 26 Copy of Affidavit Paper book page 27 & 28. d) Rajendra Kumar Gangaprasad Sharma, P.W.D. Quarters Alirajpur, Distt. Jhabua, Rs. 19,000/-. Confirmation letter filed on 20th January, 1999. 9 -: 10: - He was produced by assessee before AO for examination. In his statement on oath he has accepted to have advanced Rs. 19,000/- to assessee. He runs typing institutions in Alirajpur which is main city of Jhabua Distt. And not small place as mentioned by Assessing Officer. Copy of confirmation letter P.B.Page 29 Copy of Affidavit Paper book page 30 to 33. e) Maheshchandra Badriprasad Sharma, Udasai Ka Adda, Indore Gate, Ujjain Rs. 19,000/- confirmation letter filed on 20th January 1999. He was produced before AO for examination on 19th March, 1999, and waited for AO s call from 11.10 a.m. to 10.30 p.m. in Income Tax Office, but 10 -: 11: - was not called by Assessing Officer. Hence, he filed affidavit confirming advancement of Rs. 19,500/- to assessee. Copy of confirmation letter P.B.Page 34 Copy of Affidavit Paper book page 35 & 36. f) Omprakash Hariprasad Tiwari, Agriculturist, Village Barchakhurd Tehsil Khategaon Dist. Dewas Rs. 18,500/-. Confirmation letter filed on 20.01.1999. Copy of confirmation letter P.B.Page 23 Copy of Affidavit Paper book page 24 & 25. In his affidavit creditor has stated that he did come to Dewas to appear before AO but due to non-availability of assessee on 26th March, 1999, he could not attend office. He has also accepted to have advanced Rs. 18,500/- 11 -: 12: - to assessee during relevant previous year. Copy of confirmation letter P.B.Page 37 Copy of Affidavit Paper book page 38 *& 39. g) Satish S/o Ganesh Shankar Sharma, Development Officer, LIC of India, 47, Civil Lines Sadashiv Nagar, Dewas. Confirmation letter filed on 20.01.1999 Rs. 17,000/-. His statement on oath was recorded by Assessing Officer. He has confirmed to have advanced Rs. 17,000/- to assessee during relevant previous year. Copy of confirmation letter P.B.Page 40 Copy of Statement Paper book page 41 to 45. 12 -: 13: - h) Sajjan Singh S/o Ramsingh Sandhaw, Agriculturist. Village Dehr, Tehsil Sonkatch, Dist. Dewas Rs. 18,000/-. Confirmation letter filed on 20th January, 1999. His statement on oath was recorded by Assessing Officer and he has confessed to have advanced Rs. 18,000/- to assessee during relevant previous year. Copy of confirmation letter P.B.Page 46 Copy of Statement Paper book page 47 to 49. i) Bharatbhushan S/o Ramgovindji Sharma, Near Bherunala, Ujjain Rs. 18,000/- confirmation letter filed on 20.01.1999. This creditor could not be contacted by assessee as he was living at Ujjain and was not available at 13 -: 14: - time when assessee went to contact him. Copy of confirmation letter P.B.Page 50 Copy of Affidavit Paper book page 51 to 57. j) Shri Jagdishchandra S/o Shivnarayan Dwivedi, Village Ariawada Tehsil Bagli, Dewas Rs. 19,500/-. Confirmation letter filed on 20.01.1999. This creditor has filed affidavit and has accepted to have advanced Rs. 19,500/- to assessee. He was also present in income tax office on 23.02.1999 from 11.00 a.m. to 8.30 p.m., but was not called by Assessing Officer for examination. Copy of confirmation letter P.B.Page 58 Copy of Affidavit Paper book page 59 & 60. 14 -: 15: - k) Rameshchandra S/o Ambaram Dwivedi, Village Ariawada, Tehsil Bagli, Dist. Dewas Rs. 18,500/-. Confirmation letter filed on 20.01.1999. This creditor has filed affidavit and has accepted to have advanced Rs. 18,500/- to assessee. He was also present in Income tax Office on 23.02.1999 from 11.00 a.m. to 8.30 p.m., but was not called by Assessing Officer for examination by AO. Copy of confirmation letter P.B.Page 61 Copy of Affidavit Paper book page 62 & 63. l) Jagdish S/o Sewaram, Agriculgturist, Village Pandajagir, Dist. Dewas Rs. 15 -: 16: - 18,500/-. Confirmation letter filed on 20.01.1999. This creditor was present in Income tax Office on 26.03.1999, from 11.00 a.m. to 9.30 p.m. but was not called for examination by Assessing Officer. He has, therefore, filed affidavit confirming advance to assessee. Copy of confirmation letter P.B.Page 64 Copy of Affidavit Paper book page 65 & 66. m) Manoj Kumar Ramakant Shukla, 96, Ramnagar Dewas Rs.19,000/-. Confirmation letter filed on 20.01.1999. Statement on oath was recorded by Assessing Officer wherein creditor has accepted to have advanced Rs. 19,000/- to assessee. But AO has not believed his statement. Copy of confirmation letter P.B.Page 67 16 -: 17: - Copy of Affidavit Paper book page 68 to 74. n) Shri Badriprasad Ramlalji Sharma, Business, Udasi-Ka-Adda, Indore Gaate, Ujjain Rs.19,000/-. His affidavit was filed on 23.03.1999 with letter. He attended Income Tax Office on 19.03.1999 and remained there from 11.00 a.m. to 10.30 p.m., but was not called for examination by Assessing Officer. He has confirmed to have advanced Rs.19,000/- to assessee. Copy of Affidavit Paper book page 75 & 76. o) Shri Omprakash, Radhaganj, Dewas, Rs.19,000/-. 17 -: 18: - creditor has expired. Statement on oath his son Shri Rishikumar Soni was recorded by Assessing Officer has confirmed credit of Rs. 19,000/- to assessee by his late father Shri Omprakash Soni. Copy of Statement of Omprakash Paper book page 77 to 80. 9. We have carefully considered rival contentions and found that assessee has filed confirmation from all creditors and in respect of some of creditors, affidavit was also filed before AO. Some of creditors were also produced before AO for recording their statement. ld. Authorized Representative drew our attention in respect of eight creditors and five persons who were produced before AO for recording their statements. However, AO did not agree with assessee s contention and made addition, which was confirmed by ld. CIT(A). From record, we found that even though creditors attended office of AO., AO did not call creditors nor examined them. Thus, 18 -: 19: - contention of ld. Authorized Representative that all credits were genuine could not be established. Keeping in view totality of facts and circumstances of case and more so in interest of justice, this issue is restored back to file of AO for deciding afresh after giving due opportunity to assessee in this regard. 10. Next grievance of assessee relates to direction issued by ld. CIT(A) to AO for issue of notice u/s 148 for assessment years 1992-93 to 1995-96. 11. We have carefully considered rival contentions and found from record that during course of passing appellate order on 31st March, 2005, ld. CIT(A) has issued direction to AO for reopening assessment by issue of notice u/s 148 for assessment years 1992-93 to 1995-96. As on 31st March, 2005, time limit for reopening assessment for assessment year 1992-93 to 1995-96 have already been expired as per provisions of Section 149(1). We also found that there is no justifiable reasons assigned by ld. CIT(A) for directing AO to reopen assessment for these years. As time limit prescribed for issue of notice u/s 19 -: 20: - 148 for assessment year 1992-93 to 1995-96 have already been expired on 31.3.95, we do not find any justification in direction so issued by ld. CIT(A). 12. In both assessment years, assessee is aggrieved for enhancement of income from bus plying. In assessment year 1996-97, ld. CIT(A) has enhanced income from bus plying from Rs. 43,330/- to Rs. 2.50 lakhs and in assessment year 19970-98 Rs. 37,250/- to Rs.2.50 lakhs. 13. We have carefully considered rival contentions and found that assessee was having income from bus plying. After calling for all records, AO has accepted income Rs. 43,330/- in assessment year 1996-97 and Rs. 37,250/- in assessment year 1997-98. Both these income have been enhanced by ld. CIT(A) to Rs. 2.50 lakhs. From record, we found that since assessment year 1992-93, assessee was showing income from bus plying on basis of buses owned by him, route permit obtained, road tax paid and capacity of buses. In all these assessment years right from assessment year 1992-93, AO had accepted income from bus plying. Without assigning cogent reasons, ld. 20 -: 21: - CIT(A) has enhanced income from bus plying to extent of Rs. 2.50 lakhs. After going through detailed documents placed on record with regard to route for which permit was issued to him, road tax paid and capacity of buses, we think it appropriate to estimate income from bus plying at Rs. 1 lakh in each of assessment year 1996-97 and 1997-98 in place of income declared by assessee at Rs. 43,030/- and Rs. 37,350/-. We direct accordingly. 14. In result, both appeals are allowed in part in terms indicated hereinabove. This order has been pronounced in open court on 28th December, 2011. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 28th December, 2011. CPU* 2123 21 Sh Jai Praksah Sharma v. ITO