Sh. Hari Shankar, New Delhi V. ITO, New Delhi

CO 348/DEL/2010

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5298 (ITAT-DELHI)
• Duration Of Justice: 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 20-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: BL GUPTA
• Keywords: Income from undisclosed sources; Opportunity of being heard; Additional evidence; Assessment record
• Section: 143(3); 68

Judgement Text

ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4183/DEL/2010 A.Y. : 2006-07 INCOME TAX OFFICER, WARD 20(3), NEW DELHI VS. SH. HARI SHANKAR, A-309, 1 ST FLOOR, DERAWAL NAGAR, DELHI & A-1, CC COLONY, DELHI (PAN: AKQPP7101B) AND C.O. NO. 348/DEL/2010 (IN ITA NO. 4183/DEL/2010) A.Y. 2006-07 SH. HARI SHANKAR, A-309, 1 ST FLOOR, DERAWAL NAGAR, DELHI & A-1, CC COLONY, DELHI (PAN: AAACP0256C) (APPELLANTS) VS. INCOME TAX OFFICER, WARD 20(3), NEW DELHI (RESPONDENTS) ASSESSEE BY : SH. B.L. GUPTA, FCA DEPARTMENT BY : SMT. MONA MOHANTY, SR. D.R. ORDER PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE EMANATE OUT OF ORDER OF LD. COMMISSIONER OF INCOME T AX (APPEALS) DATED 23.6.2010 PERTAINING TO ASSESSMENT YEAR 2006-0 7. ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 2 REVENUES APPEAL 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 11,4 2,000/- MADE BY THE ASSESSING OFFICER U/S. 68 OF THE IT ACT AS UNEXPLA INED CASH DEPOSITS. 3. ASSESSING OFFICER IN THIS CASE NOTED THAT INFOR MATION HAD BEEN RECEIVED SHOWING TOTAL CASH DEPOSITS OF ` 11,42,000 /- MADE BY THE ASSESSEE WITH STANDARD CHARTERED BANK, NEW DELHI. ASSESSEE WAS REQUIRED TO FILE CASH FLOW STATEMENT ALONGWITH DETAI LS OF EXPENSES CLAIMED WITH BILLS/ VOUCHERS. ASSESSING OFFICER FU RTHER NOTED THAT DESPITE SEVERAL ADJOURNMENTS, NO DETAILS WERE FILED. IN THE ABSENCE OF ANY DETAIL ASSESSING OFFICER NOTED THAT THE CASH D EPOSITS OF ` 11.42 LACS MADE WITH STANDARD CHARTERED BANK REMAINED UNE XPLAINED AND THE SAME IS TREATED AS INCOME FROM UNDISCLOSED SOURCE S. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE SUBMITTED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSULTANCY AND LIAISONING AND HE HAS FILED RETURN OF INCOME FOR A. Y. 2006-07 ON 19.2.2007 DECLARING INCOME OF ` 1,17,250/- WHICH WER E PROCESSED U/S 143(1). IT WAS FURTHER SUBMITTED THAT ASSESSING OF FICER HAS NOTED THAT CASH DEPOSITS OF ` 11,42,000/- WERE MADE WHEREAS CAS H DEPOSITS WERE ACTUALLY ` 10,02,000/- AND NOT ` 11,42,000/-. IT W AS FURTHER SUBMITTED THAT SOURCE OF CASH DEPOSITS WAS WITHDRAWAL FROM T HE SAME BANK ACCOUNT AND THE PURPOSE OF WITHDRAWAL WAS TO SHOW MO RE TURNOVER TO THE TO THE BANK FOR ISSUE FOR ATM/PLATINUM CARD AS S UGGESTED BY THE BANK. IT WAS FURTHER SUBMITTED THAT BANK ACCOUNT S TATEMENT OF STANDARD CHARTERED BANK FROM 1.4.2005 TO 31.3.2006 ALONGWITH THE CASH FLOW WAS FILED WITH THE ASSESSING OFFICER BUT THE SAME WERE NOT CONSIDERED BY THE ASSESSING OFFICER. ASSESSEE FUR THER SUBMIT ONE ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 3 REASON FOR WITHDRAWAL OF CASH OF ` 13,93,500/- WAS TO SHOW MORE TURNOVER TO THE BANK FOR ISSUE OF ATM/PLATINUM CARD AS SUGGESTED BY THE BANK. LD. COMMISSIONER OF INCOME TAX (APPEALS) SENT THE CASH FLOW AND COPY OF BANK STATEMENT AND OTHER EVIDENCES UNDER RULE 46A TO THE ASSESSING OFFICER FOR EXAMINATION. ASSESSI NG OFFICER COMMENTED THAT NO DETAIL WAS PROVIDED DURING THE CO URSE OF PROCEEDINGS. CONSIDERING THE SUBMISSIONS THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER:- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, PERUSED THE ASSESSMENT ORDER, REMAND REPORT, REJOINDER AND T HE MATERIALS PLACED BEFORE ME BY THE APPELLANT. THE A PPELLANT IS AN INDIVIDUAL WHO FILED RETURN DECLARING INCOME OF ` 1,17,250/-. BASED ON AN INFORMATION THAT THE APPEL LANT HAD MADE CASH DEPOSITS OF ` 11,42,000/- ASSESSMENT PROCEEDINGS WERE INITIATED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT HAD SHOWN NON COOPERATIVE ATTITUDE AND DID NOT FILED CASH FLOW ST ATEMENT ALONGWITH THE DETAILS OF EXPENSES CLAIMED WITH BIL LS / VOUCHERS. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT PROCEEDINGS U/S 143(3) TREATING THE CASH DEPOSITS AS INCOME FROM UNDISCLOSED SOURCES AND ANO THER ADDITION OF ` 44,585/- ON ACCOUNT UNVERIFIED EXPENS ES. THE APPELLANT HAS CONTENDED THAT THE HE WAS DENIED SUFF ICIENT OPPORTUNITY OF BEING HEARD AND TO FURNISH THE REQUI SITE DETAILS. HE HAS FURTHER ASSERTED THAT ON 27.11.2 008 THE DAY, ON WHICH THE LAST OPPORTUNITY WAS PROVIDED, HE WENT TO ATTEND THE PROCEEDINGS BUT THE ASSESSING OFFICER W AS NOT PRESENT. THE APPELLANT FURTHER CONTENDED THAT THE ACTION ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 4 OF THE ASSESSING OFFICER WAS AGAINST THE NATURAL JU STICE AND WITHOUT PROVIDING FURTHER OPPORTUNITY HE PASSED TH E ORDER ON 08.12.2008. FROM THE PERUSAL OF THE ASSESSMENT RECORD AND FACTS OF THE CASE, IT IS EVIDENT THAT EN OUGH OPPORTUNITIES WERE PROVIDED TO THE APPELLANT AND TH E CONTENTION OF THE APPELLANT HAS NO FORCE. EVEN, IF IT IS CONSIDERED TRUE THAT THE ASSESSING OFFICER WAS ON LEAVE ON 27.11.2008, THE APPELLANT COULD HAVE ATTENDED THE PROCEEDINGS ON THE NEXT WORKING DAY. THE CONTENTI ON OF THE APPELLANT THAT HE WAS NOT PROVIDED SUFFICIENT OPPORTUNITIES IS THEREFORE REJECTED. CONCERNING THE CASH DEPOSITS, THE APPELLANT HAS FURNISHED CASH FLOW STATEMENT, BANK STATEMENTS AND DETAILS OF COMMISSION RECEIVED FROM M/S THUNDER BIRD INDUSTR IES PVT. LTD. THE APPELLANT HAS CONTENDED THAT OWING TO THE NATURE OF HIS BUSINESS AND PLACE OF RESIDENCE I.E. A VILLAGE HE HAD TO MAKE WITHDRAWALS FROM THE BANK AND DEPOSIT THE CASH IN THE BANK. THE REASONS GIVEN BY THE APPEL LANT ARE WITH COGENT REASONS. THE ADDITIONAL EVIDENCES FUR NISHED BY THE APPELLANT WERE SENT TO ASSESSING OFFICER U NDER RULE 46A FOR VERIFICATION / EXAMINATION AND COMMENTS. T HE ASSESSING OFFICER AFTER MAKING ENQUIRIES FOUND THA T THE APPELLANT HAD IN FACT DEPOSITED CASH AMOUNTING TO ` 10,02,200/- AND WITHDRAWALS OF ` 13,93,500/-. THIS FACT SUBSTANTIATE THE CONTENTION OF THE APPELLANT THAT H E USED TO WITHDRAW MONEY FROM THE BANK USING PLATINUM CARD TO PURCHASER THE AGRICULTURAL LAND AND VILLAGERS ASKED FOR PAYMENTS IN CASH, AND WHENEVER THE DEAL DID NOT ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 5 MATERIALIZED HE USED TO DEPOSIT THE MONEY IN BANK. THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY ADVERSE MATERIAL ON RECORD TO CONTROVERT THE THEORY OF THE APPELLANT . FURTHER THE APPELLANT HAS FURNISHED ALL THE RELEVANT DOCUM ENTS AND NOTHING ADVERSE WAS NOTED. SINCE, THE APPELLANT H AS SUCCESSFULLY EXPLAINED THE SOURCE AND NATURE OF TH E CASH DEPOSITS, THE ADDITION MADE BY THE ASSESSING OFFICER FAILS THE TEST OF JUDICIAL SCRUTINY AND IS THEREFORE DELE TED. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. AS IT HAS BEEN ADMITTED BY THE ASSESSING OFFICER THAT THE RE ARE WITHDRAWALS OF ` 13,93,500/- FROM THE SAME BANK ACCOUNT AND DEP OSITS OF ` 10,02,200/- IN THE SAME BANK. THIS FACT SUBSTA NTIATED THE CONTENTION OF THE ASSESSEE THAT HE USED TO WITHDRA W MONEY FROM THE BANK USING PLATINUM CARD TO PURCHASE THE AGRICULTURA L LAND AND VILLAGERS ASKED FOR PAYMENT IN CASH AND WHENEVER T HE DEAL DID NOT MATERIALIZE, HE USED TO DEPOSIT THE MONEY IN THE BA NK. AS NOTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ASSES SING OFFICER HAS NOT BROUGHT OUT ANY ADVERSE RECORD TO CONTROVERT TH E SUBMISSIONS OF THE ASSESSEE. UNDER THE CIRCUMSTANCES, WE DO NOT F IND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) AND UPHOLD THE SAME. 7. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 44,585/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF UNVERIFIED EXPENSES. ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 6 8. ON THIS ISSUE ASSESSING OFFICER NOTED THAT ASSE SSEE HAS SHOWN RECEIPTS FROM BUSINESS OF ` 2,95,550/- AGAINST WHIC H EXPENSES OF ` 1,78,340/- HAS ALSO BEEN CLAIMED. ASSESSING OFFICE R NOTED THAT AS THE ASSESSEE HAS NOT FILED DETAILS OF SUCH EXPENSES WIT H BILLS / VOUCHERS, THEREFORE, ` 44,585/- BEING 25% OF SUCH EXPENSES IS BEING DISALLOWED FOR WANT OF VERIFICATION. 9. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT ASSESSEE HAS SUBMITTED THE DET AILS AND PROOF OF EXPENSES AND THE SAME WERE SENT FOR EXAMINATION TO A SSESSING OFFICER. THE ASSESSING OFFICER HAS NOT COMMENTED ON THIS ACC OUNT. HENCE, LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT IN TH E ABSENCE OF ANY CONTRARY REMARKS /FINDINGS, THE BILLS / VOUCHERS ARE TAKEN AS GENUINE.; THEREFORE, HE HELD THAT EXPENSES CLAIMED BY THE ASSE SSEE WERE GENUINE AND JUSTIFIED AND THE ADDITION MADE ON THIS ACCOUNT WAS NOT SUSTAINABLE. 10. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 11. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT ASSESSING OFFICER HAS MADE ADHOC DISALLOW ANCE FOR THE REASONS THAT DETAILS OF EXPENSES WITH BILLS AND VOU CHERS WERE NOT PRODUCED BEFORE HIM. THE SAME WERE PRODUCED BEF ORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE SAME WER E SENT TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD NOT M ADE ANY COMMENT IN THIS REGARD. UNDER THE CIRCUMSTANCES, THE VOU CHERS ETC. ARE NOW AVAILABLE AND ASSESSING OFFICERS DISALLOWANCE S OLELY BASED ON LACK OF EVIDENCE CANNOT BE SUSTAINED. HENCE, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) ON THIS ITA NO. 4183 & CO NO. 348/DEL/2010 A.Y. 2006-07 7 ACCOUNT AND WE AFFIRM THE SAME. IN THE RESULT, RE VENUES APPEAL IS DISMISSED. ASSESSEES CROSS OBJECTION 12. BEFORE US LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING THE CROSS OBJECTION, AS SUCH THE CROSS OBJECTION IS DISMISSED AS NOT PRESSED. 13. IN THE RESULT, THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/11/2010. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 12/11/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES