SHRI VIJAY HARIRAMANI, Bhopal V. THE ACIT 2(1), Bhopal

ITA 1052/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2310 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 19-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Assessee Lawyers: GIRISH AGRAWAL
• Keywords: Salary income
• Section: 143(3)

Judgement Text

VIJAY HARIRAMANI ITA NO. 1052/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, HONBLE JUDICIAL MEMBER AND SHRI MANISH BORAD, HONBLE ACCOUNTANT MEM BER ITA NO. 1052/IND/2016 A.Y. 2011-12 SHRI VIJAY HARIRAMANI BHOPAL ::: APPELLANT VS ASSISTANT COMMISSIONER OF INCOME-TAX 2(1) BHOPAL PAN AAGPH6333P ::: RESPONDENT APPELLANT BY SHRI GIRISH AGRAWAL RESPONDENT BY SHRI R.P. MOURYA DATE OF HEARING 13.2.201 8 DATE OF PRONOUNCEMENT 2 8 .2.201 8 O R D E R PER SHRI MANISH BORAD, AM THIS APPEAL OF THE ASSESSEE RELATING TO THE ASSES SMENT YEAR 2011-12 IS DIRECTED AGAINST THE ORDER OF THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS)-II, BHOPAL, DATED VIJAY HARIRAMANI ITA NO. 1052/IND/2016 2 5.7.2016 WHICH IS ARISING OUT OF THE ORDER U/S 143(3 ) OF THE ACT DATED 27.3.2014 FRAMED BY THE ACIT 2(1), BHOPAL. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN LAW AND IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 1782000 MADE BY THE A.O. THE SAID UNJUSTIFIED AND UNLAWFUL ADDITION BE KINDLY DELETED. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW AND HAVING REGARD TO THE EXPLANATION FURNISHED, IT IS NEITHER LAWFUL NOR JUSTIFIED TO HO LD THAT THE CASH DEPOSITS IN THE BANK ACCOUNT AT RS. 178200 0 ARE UNEXPLAINED BANK DEPOSITS. THE ASSESSEE SUBMIT S THAT THE BANK DEPOSITS ARE NOT UNEXPLAINED BANK VIJAY HARIRAMANI ITA NO. 1052/IND/2016 3 DEPOSITS AND, THEREFORE, THE ADDITION OF RS.1782000 /- BE KINDLY DELETED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEVY OF INTEREST U/S 234B, 234C IS UNLAWFUL AND HENCE BE CANCELLED. 3. BRIEFLY STATED, THE FACTS, AS CULLED OUT FROM RECOR D, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED RETURN OF INCOME ON 29.7.2011 SHOWING TOTAL INCOME AT RS.43,75,860/-. THE CASE SELECTED FOR SCRUTINY. NOT ICE U/S 143(2) OF THE ACT WAS ISSUED ON 12.9.2012. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFIC ER NOTICED FROM THE INFORMATION RECEIVED THROUGH AIR FR OM PUNJAB & SINDH BANK THAT THE ASSESSEE HAD DEPOSITED CASH OF RS. 17,82,000/- IN F.Y. 2010-11. NO PLAUSIBLE EXPLANATION WAS GIVEN BY THE ASSESSEE. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 17,82,000/- U/S 68 O F THE ACT AND ASSESSED THE INCOME AT RS.61,57,860/-. VIJAY HARIRAMANI ITA NO. 1052/IND/2016 4 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AGAINST THE IMPUGNED ADDITION. IT WAS SUBMITTED BY THE ASSESSEE T HAT THERE WAS SUFFICIENT CASH BALANCE IN THE BOOKS AND CASH FLOW STATEMENTS FOR THE FINANCIAL YESARS 2008-09, 2009- 10 AND 2010-11 WERE SUBMITTED. HOWEVER, THE COMMISSION ER OF INCOME TAX (APPEALS) DID NOT FAVOUR THE ASSESSEE AND OBSERVED THAT THE ASSESSEE HAS NOT ADDUCED ANY COGENT AND UNIMPEACHABLE EVIDENCE REGARDING THE AVAILABILITY OF CASH IN HAND AND ACCORDINGLY CONFIRMED THE ADDITION. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE SOLE GRIEVANCE OF THE ASSESSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE ADDITION OF RS. 17,82,000/- FOR UNEXPLAINED CASH DEPOS ITED IN THE BANK. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2009-10 WAS COMPLETED UNDER SECTION 143(3) OF THE A CT AND VIJAY HARIRAMANI ITA NO. 1052/IND/2016 5 THERE WAS CLOSING CASH BALANCE OF RS. 3,67,932/-. THEREAFTER, DURING FINANCIAL YEAR 2009-10 THERE WERE REGULAR WITHDRAWALS FROM THE BANK AND IN THE BOOKS THE CLOSING BALANCE OF RS. 12,60,500/- WAS APPEARING AS ON 31.3.2010. FURTHER, DURING THE YEAR UNDER CONSIDER ATION AS ON 1.4.2010 THE CASH IN HAND OF RS. 12,60,500/- AND FURTHER WITHDRAWAL FROM BANK AS WELL AS FROM THE PARTNERSHIP FIRM, THE TOTAL CASH INFLOW WAS RS. 20,04, 500/- AND AGAINST THIS CASH INFLOW, THE TOTAL CASH OUTFLOW WAS RS.20,34,800/- WHICH, INTER ALIA, INCLUDED THE ALLEGED CASH DEPOSIT OF RS. 17,82,000/-, THEREBY LEAVING A POSITIV E CASH IN HAND OF RS.1,69,700/- AS ON 31.3.2011. THE LEARNED COUNSEL FOR THE ASSESSEE REQUESTED FOR DELETING THE IMPUGNED ADDITION. 6. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND ALSO SUBMITTED THAT THERE ARE NO CASH DRAWINGS SHOWN BY THE ASSESSEE IN THE VIJAY HARIRAMANI ITA NO. 1052/IND/2016 6 CASH FLOW STATEMENTS WHICH ARE APPEARING IN CASHFLOW STATEMENT FOR THE FINANCIAL YEAR 2008-09. 7. WE HAVE HEARD BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD OF THE TRIBUNAL, INTER AL IA, IMPUGNED ASSESSMENT ORDER, ORDER OF THE LEARNED CIT(A ) ALONGWITH PAPER BOOK FILED BY THE ASSESSEE. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO ADDITION OF RS.17,82,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE PUNJAB & SINDH BANK AND THIS ADDITION HAS BEEN CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS ). WE AGREE THAT THE ASSESSEE DID NOT FILE ANY DETAILS AND EXPLANATIONS TO EXPLAIN THE ALLEGED CASH DEPOSITS. WHEN THE MATTER CAME UP BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE CASH FLOW STATEMENTS WERE FILED FOR THE YEAR UNDER APPEAL AND PRECEDING TWO YEARS ALONG WITH COPY OF BANK ACCOUNTS. THE REMAND REPORT WAS CALLED FOR BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND VIDE REPORT VIJAY HARIRAMANI ITA NO. 1052/IND/2016 7 DATED 30.5.2016 THE LEARNED ASSESSING OFFICER EVEN TH OUGH APPRECIATING THAT THE CASH FLOW STATEMENTS AND BANK STATEMENTS HAVE BEEN FILED BUT HE WAS NOT CLEAR WITH TH E SOURCE OF CASH DEPOSITED. THE COMMISSIONER OF INCOM E TAX (APPEALS) EVEN THOUGH PASTING THE CASHFLOW STATEMENT FO R THE F.Y. 2010-11 IN THE APPELLATE ORDER, COULD NOT SU PPORT THE ASSESSEES CONTENTIONS BY WAY OF OBJECTING THE P URPOSE OF WITHDRAWING THE CASH AND IMMEDIATELY DEPOSITING WHE N THERE WAS AVAILABILITY OF CASH IN HAND. BOTH THE LOWER AUTHORITIES HAVE NOT DISPUTED ABOUT THE SOURCE OF CASH WHICH IS OUT OF THE WITHDRAWALS FROM BANK AS WELL AS T HE WITHDRAWALS FROM THE PARTNERSHIP FIRM M/S TOP & TOWN. TO THE EXTENT OF SOURCE OF CASH, THE CASH FLOW STATEME NTS ARE VERY CLEAR. WE FURTHER OBSERVE THAT THE CASEOF THE ASSESSEE WAS SCRUTINISED AND THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT AND THE CLOSING CASH IN HAND ON 31.3.2009 WAS RS. 7,67,932/-. FURTHER IN THE ASSESSM ENT VIJAY HARIRAMANI ITA NO. 1052/IND/2016 8 YEAR 2010-11 RS. 7,97,000/- WERE FURTHER ADDED TO THE OPENING CASH BALANCE AS ON 1.4.2009. DURING THE YEAR, UNDER CONSIDERATION, THERE IS CASH WITHDRAWAL OF RS.8 LACS WHICH IN TOTAL COMES TO CASH IN HAND OF RS. 19,64,932/ - WHICH THE ASSESSEE HAS CONTENDED TO BE SUFFICIENT ENO UGH TO COVER THE CASH DEPOSIT OF RS.17,82,000/-. WE FI ND THAT THE ASSESSEE HAS DISCLOSED TOTAL INCOME OF RS. 43,75,8 60/- WHICH, INTER ALIA, INCLUDES SHARE OF PROFIT FROM THE PARTNERSHIP FIRM, SALARY INCOME, INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. NO NEGATIVE OPINION HAS BEEN GIVEN BY THE LOWER AUTHORITIES ABOUT THE SOURCE OF CASH WHICH IS EMANATING OUT OF THE WITHDRAW ALS FROM THE BANK ACCOUNTS. HOWEVER, ONE QUESTION REMAINS UNANSWERED ON THE PART OF THE ASSESSEE AND THAT IS THE HOUSEHOLD WITHDRAWALS. ON GOING THROUGH THE CASH FLOW STATEMENT FOR THE F.Y. 2008-09 WHICH WAS UNDER SCRUTI NY, WE OBSERVE THAT THERE WERE REGULAR WITHDRAWALS WHICH W ERE VIJAY HARIRAMANI ITA NO. 1052/IND/2016 9 APPROXIMATELY RS. 25,000/- PER MONTH AS DISCLOSED BY T HE ASSESSEE IN THE CASH FLOW STATEMENT APPEARING AT PAGES 6 AND 7 OF THE PAPER BOOK BUT SURPRISINGLY THERE ARE NO SUCH CASH HOUSEHOLD WITHDRAWALS DURING THE F.Y. 2009-10 AS WELL AS F.Y. 2010-11 WHICH RAISES SUSPICION ABOUT THE ACTUAL CASH IN HAND WITH THE ASSESSEE. APART FROM THE ISSUE OF CASH HOUSEHOLD WITHDRAWALS, WE FIND NO OTHER REASON TO OBJECT THE CASH FLOW STATEMENTS OF THE ASSESS EE. 8. WE, THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND TAKING A VERY PESSIMISTIC APPROACH ARE OF TH E VIEW THAT THE CASH WITHDRAWALS FOR HOUSEHOLD EXPENSES OF RS. 30,000/- PER MONTH FOR F.Y. 2009-10 AND RS. 35,0 00/- FOR THE F.Y. 2010-11 SHOULD HAVE BEEN MADE BY THE ASSESSEE. THIS CALCULATES TO TOTAL CASH WITHDRAWALS FOR HOUSEHOLD EXPENSES OF RS. 7,80,000/-. TO THIS EXTEN T, THE ASSESSEES CASH IN HAND NEEDS TO BE REDUCED WHICH WILL LEAVE CASH IN HAND WITH THE ASSESSEE AT ITS DIS POSAL VIJAY HARIRAMANI ITA NO. 1052/IND/2016 10 FOR BEING DEPOSITED IN THE BANK ACCOUNT. WE ACCORDINGL Y SUSTAIN THE ADDITION OF RS.7,80,000/- AND DELETE THE REMAINING ADDITION. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTL Y ALLOWED. PRONOUNCED IN OPEN COURT ON 28 FEBRUARY, 2018. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 28 TH FEBRUARY, 2018 DN/- COPY TO APPELLANT/RESPODENT/PR.CIT/CIT(A)/DR/GUAR D FILE