Mr. Mumtazul Hasan, V. DCIT,

ITA 106/PAT/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1171 (ITAT-PATNA)
• Duration Of Justice: 6 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 15-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K VERMA
• Assessee Lawyers: N K LAL
• Keywords: Unexplained cash credit; Gift; Depreciation; Income from undisclosed sources; Salary income; Corroborative evidences
• Section: 68

Judgement Text

1 ITA NO. 106/PAT/2010. IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 106 /PAT/ 2010. ASSESSMENT YEAR : 2004 - 05. MR. MUMTAZUL HASAN, DY. COMMISSIONER OF INCOME - TAX, PATNA. VS. CENTRAL CIRCLE - 2, PATNA. APPELLANT. RESPONDENT. APPELLANT BY : SHRI N.K. LAL. RESPONDENT BY : SHRI S.K. VERMA. DATE OF HEARING : 01 - 08 - 2016 DATE OF PRONOUNCEMENT : 29 TH SEPT., 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, PATNA DATED 25 - 03 - 2010 AND PERTAINS TO ASSESSMENT YEAR 2004 - 05. THE GROUNDS OF APPE AL READ AS UNDER : 1. FOR THAT THE ORDER OF THE LD. CIT(A) IS BAD AS WELL AS WELL AS IN LAW. 2. FOR THAT THE LD. CIT(A) HAS MECHANICALLY CONFIRMED ALL THE ADDITIONS MADE IN COURSE OF ASSESSMENT PROCEEDINGS WITHOUT APPRECIATING AND/OR CONSIDERING THE EXPLANATION AND/OR EVIDENCES FILED IN COURSE OF EITHER APPELLATE OR ASSESSMENT PROCEEDINGS. 3. FOR THAT THE ADDITIONS UNDER SEC. 68 HAVE BEEN CONFIRMED WITHOUT THE CONDITIONS FOR MAKING SUCH ADDITIONS BEING SATISFIED MORE PARTICULARLY IN VIEW OF THE PATNA HIGH COURT JUDGMENT REPORTED IN 150 ITR 150 AND 150 ITR 571. 4. FOR THAT THE CONFIRMATION OF ADDITION OF RS.1,00,000.00 FROM PROFESSION IS ARBITRARY AND BASED ON NO MATERIALS WHEN IN THE PAST LOSSES SHOWN WERE ACCEPTED BY THE ASSESSING OFFICER. IT IS WELL SETTLED THAT ASSESSMENT ACCEPTING LOSSES IN THE PAST YEARS IS GOOD EVIDENCE FOR PURPOSE OF ESTIMATING INCOME. [REFER 8 STC 7 70 AND 175 TAXMAN PAGE 56]. 2 ITA NO. 106/PAT/2010. 5. FOR THAT THE ADDITIONS HAVE BEEN CONFIRMED ON THE BASIS OF CONJECTURES AND SURMISES. 2. IN THIS CASE THE ASSESSEE DERIVES INCOME FROM SALARY, HOUSE PROPERTY AND BUSINESS. IN THE COMPUTATION OF INCOME THE AO MADE THE FOLLOWING ADDITIONS : I) INCOME FROM PROFESSION : RS.1,56,566/ - II) INCOME FROM UNDISCLOSED SOURCES ON ACCOUNT UNEXPLAINED GIFT. : RS.10,95,189/ - III) ADDITION U/S 68 UNEXPLAINED CREDIT OF RS.2,25,000/ - CLAIMED AS RENT ADVA NCE. : RS. 2,25,000/ - IV) UNEXPLAINED DEPOSIT IN BANK : RS. 5,75,000/ - 3. AS REGARDS THE GIFTS, ASSESSEES SUBMISSIONS WERE AS UNDER : THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.10,95,189/ - AS GIFTS FROM THE FOLLOWING PERSONS : NAME OF D ONOR AMOUNT RELATIONSHIP WITH THE ASSESSEE. 3.1 TAUZEEN AFRIN, USA 4,75,000 NIECE 3.2 SAFDAR IMAM, UAE 1,35,000 NEPHEW 3.3 SAMINA ALMAS, QATAR 1,50,000 NEICE 3.4 SAFDAR IMA, UAE 45,000 NEPHEW 3.5 SAFDAR IMAM, UAE 40,000 NEPHEW 3.6 SAMINA ALMAS 1,00,000 NEICE. 4. AFTER SOME FURTHER DISCUSSION, THE AO OBSERVED THAT HE WAS NOT CONVINCED WITH THE CLAIM OF GIFTS. HENCE HE TREATED THE SUM OF RS.10,95,189/ - AS ASSESSEES UNEXPLAINED INCOME. 5. UPON ASSESSEES APPEAL IN THIS REGARD LEARNED CIT(APPEALS) CONFIRMED THE ACTION OF THE AO BY CONCLUDING AS UNDER : AS HELD IN THE JUDICIAL PRONOUNCEMENTS CITED ABOVE, THE MERE FACT THAT THE TRANSACTION WAS CONDUCTED THROUGH BANKING CHANNELS IS NO PROOF 3 ITA NO. 106/PAT/2010. OF THE GENUINENESS OF THE GIFT. THE ASSESSEE I S REQUIRED TO PROVE, APART FROM THE GENUINENESS OF THE TRANSACTION, ALSO THE FINANCIAL CAPACITY OF THE DONOR TO MAKE THE GIFTS AS CLAIMED, BEFORE THE TRANSACTION CAN BE ACCEPTED AS A GENUINE CASE OF GIFT, IN TERMS OF HE PROVISIONS OF SECTION 68 OF THE ACT. IN THE INSTANT CASE, THE AO HAS POINTED OUT SEVERAL DISCREPANCIES IN THE PAPERS PRODUCED BY THE APPELLANT TO SUBSTANTIATE THE CLAIM; FOR INSTANCE, THE PURPOSE INDICATED AS FAMILY MAINTENANCE ON TWO OF THE CHEQUES, THE DISCREPANCY IN THE NAMES OF THE REM ITTERS IN ONE CHEQUE, AND SO ON. THESE HAVE NOT BEEN CONTROVERTED BY THE APPELLANT DURING APPELLANT PROCEEDINGS. MOST IMPORTANT OF ALL, THE CREDITWORTHINESS OF THE DONORS, WHICH IS A CRITICAL INGREDIENT OF THE ONUS UNDER SECTION 68 REMAINED ENTIRELY UNSUBS TANTIATED. PARTICULARLY IN THE CASE OF DONORS WHO ARE NOT ASSESSABLE TO TAX IN INDIA , THERE IS A HEAVY ONUS ON THE ASSESSEE TO ESTABLISH THEIR FINANCIAL CAPACITY BY PRODUCTION OF CREDIBLE EVIDENCE, SINCE THE SAME IS NOT VERIFIABLE FROM THE RECORDS OF THE DEPARTMENT, UNLIKE IN THE CASE OF INDIAN RESIDENTS WHO FILE RETURNS OF INCOME IN INDIA. HOWEVER, NO EVIDENCE AT ALL TO SUBSTANTIATE THE CREDITWORTHINESS OF THE THREE NRI PERSONS WAS ADDUCED BEFORE THE AO. THE ONUS MANDATED BY SECTION 68 OF THE ACT HAVING R EMAINED UNDISCHARGED, THE TREATMENT OF RS.10,95,189 AS THE APPELLANTS UNEXPLAINED INCOME IS HELD TO BE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 68 AND IS, HEREBY, CONFIRMED. 6. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. I H AVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT THE ASSESSEE IN THIS CASE HAS CLAIMED THAT HE HAS RECEIVED GIFTS FROM HIS CLOSE RELATIVES WHO RESIDE ABROAD. THE GIFTS HAVE ALSO BEEN RECEIVED THROUGH BANKING CHANNEL FROM ABROAD. ALL THE DONO RS HAVE INDEPENDENTLY CONFIRMED TO THE AO OF HAVING MADE THE GIFTS. IT IS FURTHER NOTED THAT THE AUTHORITIES BELOW HAVE DRAWN ADVERSE INFERENCE ON THE GROUND THAT THE ASSESSEE HAS NOT PROVED THE CREDITWORTHINESS OF THE DONORS. IN THIS REGARD I FIND THAT DO NORS ARE RESIDING ABROAD AND THE GIFTS HAVE BEEN RECEIVED FROM ABROAD. WHAT EVIDENCES THE AO REQUIRED TO PROVE THE CREDITWORTHINESS OF THE DONORS IS NOT ON RECORD. THE AUTHORITIES BELOW ARE MAKING PRESUMPTION THAT THE ASSESSEES OWN MONEY HAS COME FROM ABR OAD IN THE G UISE OF GIFS . IN MY CONSIDERED OPINION, THIS IS A MERE SURMISE AND NEEDS TO BE COGENTLY PROVED TO THE HILT. THERE CANNOT BE ANY PRESUMPTION IN THIS REGARD. DRAWING ADVERSE INFERENCE THAT THESE DONORS WHO 4 ITA NO. 106/PAT/2010. WERE NON RESIDENT INDIANS WERE NOT PROD UCED IS NOT SUSTAINABLE. THE NECESSARY PROVISIONS IN THE INCOME - TAX ACT FOR TAXING THE SUM RECEIVED WITHOUT CONSIDERATION IS CONTAINED U/S 5 6( V ) OF THE I.T. ACT FROM FINANCE ACT, 2004 WITH EFFECT FROM 01 - 04 - 2005. THE ASSESSMENT YEAR IN THE APPEAL IS PRIO R TO THE INTRODUCTION OF AFORESAID SECTION AND THE ASSESSEES CASE ALSO DOES NOT FALL UNDER THE AMBIT OF AFORESAID SEC T ION. HENCE IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN MY CONSIDERED OPINION THE ASSESSEE HAS DISCHARGED HIS ONUS AND THE CLAIM OF GIF T HAS BEEN DISALLOWED MERELY ON SURMISES WHICH IS NOT SUSTAINABLE. HENCE I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE A ND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. APROPOS ISSUE OF UNEXPLAINED CREDIT OF RS.2,25,000/ - . ON THIS ISSUE THE ASSESSEE EXPLAINED AS UNDER : THAT THE ASSESSEE HAS RECEIVED A SUM OF RS. 2,25,000/ - FROM HIS TENANT AT CALCUTTA SHOP. THE RENT RECEIVED FROM THE SHOP IS DULY REFLECTED IN RETURN OF INCOME OF THE ASSESSEE. THE DETAILS OF THE TENANT ARE AS UNDER : S HRI PRABHAT GADHYAN 1054, METRO PLAZA NO. 1 , HO CHI MINH SARANI, KOLKATA 700071. THIS ADVANCE RENT IS REFUNDABLE AT THE TIME WHEN THE TENANT WILL VACATE THE PREMISES. HOWEVER, THE AO WAS NOT CONVINCED . HE HELD AS UNDER : A LETTER DATED 4/12/20 06 WAS ALSO WRITTEN TO THE ALLEGED TENANT SHRI PRABHAT GADHYAN OF KOLKATA AT THE ADDRESS REPORTED BY THE ASSESSEE, ASKING HIM TO FURNISH DETAILS AS UNDER, IN THE MATTER OF PAYMENT OF RENT ADVANCE: ....... IN THIS CONNECTION, YOU ARE REQUEST TO PLEASE F URNISH THE FOLLOWING DETAILS. 1. CHEQUE NO. AND DATE OF CHEQUE AND THE NAME OF THE BANK. 5 ITA NO. 106/PAT/2010. 2. YOUR BANK ACCOUNT NUMBER. 3. THE SOURCE OF THE AMOUNT OF RS.2,25,000/ - IN YOUR HAND. 4. THE DETAILS ABOUT THE ASSESSING OFFICER, IN WHOSE JURISDICTION YOU ARE BEING ASSESSED TO INCOME TAX. 5. COPY OF ACCOUNT OF MY ASSESSEE AS REFLECTED IN YOUR BOOKS IN RESPECT OF FINANCIAL YEAR 2003 - 04. 6. COPY OF AGREEMENT OF RENT ENTERED IN TO WITH MY ASSESSEE. COMPLIANCE DATE WAS FIXED ON 14/12/2006. BUT NO COMPLIANCE WAS RECEIVED FROM HIM ON 14/1 2/2006 OR EVEN TILL TODAY. A PHOTOCOPY OF REPLY LETTER DATED NIL PURPORTED TO HAVE BEEN WRITTEN BY SHRI PRABHAT GADHYAN HAS HOWEVER BEEN RECEIVED THROUGH THE A.R. OF THE ASSESSEE, ON 19/12/2006. BUT THIS CAN NOT BE REGARDED AS SUFFICIENT EVIDENCE AS THE SA ID LETTER DID NOT CONTAIN ANY REPLY AS PER POINS RAISED UNDER (1) TO (6) ABOVE. THEREFORE INSPITE OF SUFFICIENT OPPORTUNITY GIVEN, THE ASSESSEE ULTIMATELY FAILED TO DISCHARGE HIS PRIMARY ONUS O PROVE THE GENUINENESS OF THE CLAIM OF ADVANCE RECEIPT OF RENT AMOUNTING TO RS.2,25,000/ - . HENCE ADDITION OF RS.2,25,000/ - IS MADE IN THE ASSESSMENT ORDER IN VIEW OF SECTION 68. 9. BEFORE THE LEARNED CIT(APPEALS) THE ASSESSEE PRODUCED CONFIRMATION LETTER FROM THE SAID PARTY WHO HAS CONFIRMED THAT HE HAS GIVEN THE S UM OF RS.2,25,000/ - BY CHEQUE TO THE ASSESSEE. THE LEARNED CIT(APPEALS) NOTED THE ASSESSEES SUBMISSION AS UNDER : I HAVE PERUSED THE CONFIRMATION LETTER FROM SH, PRABHAT KUMAR GADHYAN, WHEREIN HE HAS CERTIFIED TO HAVE GIVEN RS.2,25,000 BY CHEQUE TO THE APPELLANT AS SECURITY DEPOSIT (ADVANCE RENT) AGAINST RENTAL OF SHOP NO. 1039, METRO PLAZA, KOLKATA. THE APPELLANT WAS ASKED TO FURNISH COPIES OF THE RENTAL AGREEMENT SIGNED WITH THE TENANT, AND THE INCOME TAX RET URN OF THE TENANT. IN RESPONSE, THE AR FURNISHED A RETURN OF THE HUF NAMED PREM CHAND GANDHYAN, AND SUBMITTED THAT THE TENANT, BEING ONE OF THE COPARCENERS OF HIS FATHERS HUF, HAD TAKEN THE SHOP ON RENT BY DEPOSITING SECURITY OF RS.2,25,000. IT WAS ALSO S UBMITTED THAT THE HUF WAS A REGULAR ASSESSEE AND CONTINUED TO BE IN OCCUPATION OF THE SHOP AND WAS PAYING RENT REGULARLY. 10. HOWEVER, THE LEARNED CIT(APPEALS) WAS NOT CONVINCED. HE HELD AS UNDER: THE COPY OF RETURN OF THE HUF WAS PERUSED. IT WAS OBSER VED THAT THE RETURN OF THE HUF FILED BEFORE ME PERTAINED TO A.Y. 2001 - 02. THE NATURE OF BUSINESS IN THE RETURN, WHICH WAS FILED IN DHANBAD, WAS SHOWN 6 ITA NO. 106/PAT/2010. AS HARD COKE MANUFACTURER. NO RETURN OF EITHER THE HUF OR SH. PRABHAT KUMAR GADHYAN HAS BEEN FURNISHED F OR THE RELEVANT PERIOD I.E. A.Y. 2004 - 05. IT WAS ALSO NOTED THAT IN THE CONFIRMATION SIGNED BY SH. PRABHAT KUMAR GADHYAN, THERE IS NO MENTION OF THE SHOP HAVING BEEN RENTED BY THE HUF. NO RENTAL AGREEMENT BETWEEN THE APPELLANT AND THE TENANT HAS BEEN FILED EITHER. WHILE IT IS TRUE THAT THE APPELLANT HAD DISCLOSED RENTAL INCOME OF RS.6,00,000 DURING THE YEAR, THAT BY ITSELF CANNOT PROVE THE RECEIPT OF ADVANCE, IN THE ABSENCE OF A RENTAL AGREEMENT OR CORROBORATION BY WAY OF INCOME - TAX RECORDS OF THE TENANT. T AKING INTO ACCOUNT THE TOTALITY OF CIRCUMSTANCES, I AM INCLINED TO AGREE WITH THE AO THAT THE APPELLANT FAILED TO DISCHARGE THE PRIMARY ONUS OF PROVIDING THE GENUINENESS OF THE CLAIM. THE ADDITION OF RS.2,25,000 IS CONFIRMED. 11. AGAINST THE ABOVE ORDER T HE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 12. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT IN THIS CASE THE ASSESSEE HAS RECEIVED SECURITY DEPOSIT (ADVANCE RENT) FROM HIS TENANT AT KOLKATA. THIS HAS BEEN RECEIVED BY CHEQUE. THE ASSESS EE HAS ALSO SUBMITTED THE CONFIRMATION. THE ASSESSEE HAS ALSO DISCLOSED RENTAL INCOME OF RS.6 LAKHS. HENCE IN MY CONSIDERED OPINION THE ASSESSEE HAS DISCHARGED HIS ONUS. MERE ABSENCE OF A WRITTEN RENTAL AGREEMENT CANNOT BE A REASON TO IGNORE ALL THE EVIDE NCES SUBMITTED. IN THESE CIRCUMSTANCES I HAVE NO HESITATION IN SETTING ASIDE THE ORDERS OF AUTHORITIES BELOW AND DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. 13. APROPOS THE ISSUE OF UNEXPLAINED DEPOSIT OF RS.5,75,000 IN BANK ACCOUNT: ON THIS ISSUE THE A O HIMSELF MADE THE DISALLOWANCE HOLDING AS UNDER : THE ASSESSEE IS FOUND TO HAVE MADE A CASH DEPOSIT OF RS.5,75,000/ - ON 28/7/2007 IN THE BANK ACCOUNT NO. 011 90/0138737 MAINTAINED WITH THE STATE BANK OF INDIA, BRANCH VASANT KUNJ, NEW DELHI. AS TO THE SOURCES OF THE DEPOSIT, THE ASSESSEE VIDE HIS WRITTEN REPLY DATED 12/12/2016, STATED THAT THE CASH DEPOSIT OF RS.5,75,000/ - IN THE AFORESAID BANK ACCOUNT WAS MADE OUT OF THE MONEY WITHDRAWN IN CASH ON DIFFERENT DATES FROM THE FOLLOWING BANK ACCOUNTS MAINTA INED BY HIM IN PATNA : 7 ITA NO. 106/PAT/2010. DATE BANK A/C NAME OF BANK AMOUNT. 08/05/2003 01198093 STATE BANK OF INDIA, PATLIPUTRA SOCIETY, PATNA. 7,00,000/ - 12/07/2003 13596 BANK OF BARODA, S.K. PURI BRANCH, PATNA. 50,000/ - 11/07/2003 10214 CENTRAL BANK OF INDIA, BORING ROAD, PATNA. 2,25,000/ - 9,75,000/ - THE ASSESSEES EXPLANATION IS NOT FOUND TO BE CONVINCING. THERE IS A BIG TIME LAG BETWEEN THE CASH WITHDRAWALS FROM THE BANKS AT PATNA AND THE CASH DEPOSIT MADE BY THE ASSESSEE IN HIS BANK ACCOUNT MAINTAINED AT DELHI. NO PRUDENT BUSINESS MAN CAN TAKE RISK OF WITHDRAWING CASH MONEY TO E KEPT WITH HIM FOR SUCH A LONG TIME. THE ASSESSEE MAINTAINED SO MANY BANK ACCOUN T S AT PATNA AND ALSO AT DELHI. THEREFORE, HE COULD HAVE CONVENIENTLY OPERATE HIS BANK ACCOUNTS, WH ENEVER THE NECESSITY OF CASH EMERGED TO HIM THEREBY AVOIDING THE RISK OF KEEPING CASH MONEY WITH HIM FOR A LONG PERIOD. AGAIN, NO ONE CAN TAKE RISK OF CARRYING SO MUCH CASH FROM PATNA TO DELHI JUST FOR DEPOSITING IN A BANK ACCOUNT MAINTAINED AT DELHI. THE ASSESSEE FAILED TO GIVEN ANY EXPLANATION AS TO WHY HE COULD NOT RESTORED TO BANKI NG CHANNEL FOR TRANSFERRING THE AMOUNT WHICH COULD HAVE BEEN RATHER MORE CONVENIENT AND SAFE. THEREFORE, THE ASSESSEES EXPLANATION REGARDING THE SOURCES OF CASH DEPOSIT OF R S.5,75,000/ - IN STATE BANK OF INDIA, ACCOUNT NO. 01190/0138737 OF VASANT KUNJ, NEW DELHI BRANCH IS NOT FOUND TO BE PLAUSIBLE IN VIEW OF THE SURROUNDING CIRCUMSTANTIAL EVIDENCES EMERGED IN THIS CASE. THE CASH DEPOSIT OF RS.5,75,000/ - IN THE SAID BANK ACCOUN T ON 28/7/2007 IS HELD TO BE UNEXPLAINED DEPOSIT IN BANK ACCOUNT. 14. UPON ASSESSEES APPEAL LEARNED CIT(APPEALS) AFFIRMED THE ADDITION HOLDING AS UNDER : I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE CASE LAW CITED IN SUPPORT, BUT FIND THAT IT CONCERNS A DIFFERENT ISSUE ALTOGETHER, AND CAN IN NO WAY COME TO THE APPELLANTS AID AS REGARDS THE CASH DEPOSITS IN BANK. THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH ANY DIRECT NEXUS BETWEEN THE CREDIT IN THE DELHI BANK ACCOUNT AND THE WITHDRAWALS FROM THE PATNA BANK ACCOUNTS. IT IS ALSO OBSERVED THA T THE APPELLANT IS ATTRIBUTING THE DEPOSI T S MADE ON 28.7.2003 TO WITHDRAWAL OF RS.2,75,000 MADE ON 11.7.2003/12.7.2003, AND RS.7,00,000 ON 8.5.2003, THUS CLAIMING THAT HE KEPT CASH O F RS.3,00,000 FROM 8.5.2003 TO 8 ITA NO. 106/PAT/2010. 28.7.2003, AND RS.2,75,000 FROM 11/12.7.2003 TO 28.7.2002, AND THEN TRANSPORTED IT TO DELHI FOR DEPOSITING INTO THE BANK ACCOUNT. THIS KIND OF BEHAVIOUR IS ANTI - THETICAL TO PRUDENT HUMAN CONDUCT AND MILITATES AGAINST THE PREP ONDERANCE OF PROBABILITY, PARTICULARLY WHEN THERE ARE VERY CONVENIENT RISK - FREE BANKING CHANNELS AVAILABLE FOR TRANSFERRING CASH THROUGH DIFFERENT BANK ACCOUNTS. IN THIS BACKGROUND, THERE WAS A VERY HEAVY ONUS ON THE APPELLANT TO ESTABLISH A DIRECT NEXUS B ETWEEN THE DEPOSIT IN THE DELHI BANK ACCOUNT AND THE WITHDRAWALS FROM THE PATNA BANK ACCOUNTS. THE APPELLANT HAS, HOWEVER, NOT ATTEMPTED TO PROVIDE ANY PLAUSIBLE EXPLANATION, BUT ONLY RELIED ON THE BLAND SUBMISSION THAT THE DEPOSITS WERE MADE OUT OF THE W ITHDRAWALS AS CLAIMED. IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD BY THE APPELLANT TO ESTABLISH A DIRECT LINKAGE BETWEEN THE SAID WITHDRAWAL AND DEPOSIT, NO INTERFERENCE WITH THE AOS ORDER ON THIS ISSUE IS WARRANTED. THE ADDITION OF RS.5,75,000 IS C ONFIRMED. 15. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 16. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT THE ASSESSEES CLAIM IS THAT HE HAS WITHDRAWN SUBSTANTIAL SUMS FROM HIS PATNA BANK ACCOUNTS OCCASIONALL Y AND STORED THE SAME. T HEREAFTER OCCASIONALLY HE TRANSPORTED THE SAME TO DELHI AND DEPOSITED IN HIS DELHI BANK ACCOUNT . THIS IS BEYOND THE PREPONDERANCE OF PROBABILITY. NO PRUDENT PERSON WILL DRAW CASH FROM PATNA AND THEREAFTER CARRY IT TO DELHI TO DEPOSIT IN BANK ACCOUNT. IN THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE LEARNED CIT(APPEALS) IS CORRECT IN HOLDING THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS OF ESTABLISHING A DIRECT NEXUS BETWEEN THE CASH DEPOSITS IN DELHI BA NK ACCOUNT AND THE WITHDRAWALS FROM PATNA BANK ACCOUNTS. IN THESE CIRCUMSTANCES I DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER OF THE LEARNED CIT(APPEALS). HENCE I AFFIRM THE SAME. 17. APROPOS THE ISSUE OF INCOME FROM PROFESSION OF RS.56,566/ - . O N THIS ISSUE THE AO MADE THE ADDITION HOLDING AS UNDER : VIDE THE INCOME EXPENDITURE ACCOUNT ANNEXED TO THE RETURN, THE ASSESSEE HAS DISCLOSED PROFESSIONAL RECEIPT OF RS.2,22,600/ - . AFTER CLAIMING EXPENSES RELATABLE TO BUSINESS SUCH AS SALARY TO STAFF , BANK CHARGE, INTEREST TO BANK, DEPRECIATION AND PROCESSING AND LEGAL CHARGES, THE NET RESULT OF LOSS OF RS.56,566.11 WAS RETURNED UNDER THE HEAD 9 ITA NO. 106/PAT/2010. INCOME FROM PROFESSION. THE BASIS OF DISCLOSING GROSS PROFESSIONAL RECEIPT OF RS.2,22,600/ - IN NO WHERE AVA ILABLE IN THE RETURN. THE ASSESSEE WAS THEREFORE ASKED VIDE ORDER SHEET ENTRY DATED 3/11/2006, TO PRODUCE BOOKS OF ACCOUNT FOR THE PROFESSIONAL INCOME ON 22/11/2006. ON 22/11/2006, HOWEVER, NO BOOKS OF ACCOUNT WAS PRODUCED. THE ASSESSEE, VIDE ORDER SHEET E NTRY DATED 22/11/2006, ONCE AGAIN ASKED TO PRODUCE BOOKS OF ACCOUNTS ON 29/11/2006. ON 29/11/2006 OR EVEN TILL TODAY NO COMPLIANCE WAS MADE. UNDER THE CIRCUMSTANCES, THE RESULT OF PROFESSION AS DISCLOSED BY THE ASSESSEE IN THE RETURN REMAINED UNVERIFIABLE. THEREFORE THE LOSS IN PROFESSION DECLARED BY THE ASSESSEE AMOUNTING TO RS.56,566.11 IS DISALLOWED AND IN PLACE OF IT, AN INCOME OF RS.1,00,000/ - IS ESTIMATED UNDER THE HEAD PROFESSION. 18. UPON ASSESSEES APPEAL LEARNED CIT(APPEALS) HELD AS UNDER : THE APPELLANT SUBMITTED ON THIS POINT THAT DURING A.Y. 2002 - 03, INCOME OF RS.17,412 HAD BEEN DISCLOSED FROM PROFESSION AND IN A.Y. 2003 - 04, LOSS OF RS.1,02,737 HAD BEEN SHOWN, WHICH WAS ACCEPTED BY THE DEPARTMENT. HOWEVER, NO BOOKS OF ACCOUNTS OR ANY OTHER EV IDENCE O SUBSTANTIATE THE RESUL T S AS FAR AS PROFESSIONAL INCOME IS CONCERNED, WERE PRODUCED BEFORE ME EITHER. ONCE A RETURN IS TAKEN UP FOR SCRUTINY, THE ASSESSEE IS REQUIRED TO PRODUCE MATERIAL AND EVIDENCE TO SUBSTANTIATE THE INCOME/LOSS SHOWN UNDER DIFF ERENT HEADS OF INCOME. IN THIS CASE, THE APPELLANT CLAIMED TO HAVE INCURRED LOSS FROM PROFESSION, BUT FAILED TO ADDUCE ANY EVIDENCE TO CORROBORATE THE GENUINENESS OF THE EXPENSES CLAIMED, WHICH RESULTED IN THE LOSS VIS - A - VIS THE RECEIPTS WHICH WERE SHOWN A S RS.2,22,600. WHILE IN NORMAL CIRCUMSTANCES, THE AOS SHOULD NOT RESORT TO ESTIMATION OF INCOME OR EXPENSES, WHEN AN ASSESSEE DOES NOT PRODUCE ANY SUPPORTING EVIDENCE, THE RESORT TO ESTIMATION CANNOT BE FAULTED. THE AO HAS ESTIMATED INCOME OF RS.1,00,000 O N RECEIPTS OF RS.2,22,600, WHICH CANNOT BE CONSIDERED UNREASONABLE OR EXCESSIVE. THE DISALLOWANCE OF LOSS AND ESTIMATION OF INCOME FROM PROFESSION AS RS.1,00,000 IS CONFIRMED. 19. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 20. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT ON A PROFESSIONAL RECEIPT OF RS.2,22,600/ - THE ASSESSEE HAS SHOWN A LOSS OF RS.56,566/ - . NO BOOKS OF ACCOUNTS AND EVIDENCES IN THIS REGARD HAS BEEN PRODUCED FOR THE CLAIM OF LOSS. I FIND THAT ASSESSEES CLAIM OF LOSS HAS BEEN 10 ITA NO. 106/PAT/2010. REJECTED BY THE AO ON THE GROUND THAT NO BOOKS OF ACCOUNTS OR SUPPORTING DOCUMENTS HAVE BEEN FURNISHED IN SUPPORT OF THE LOSS SHOWN. IN THESE CIRCUMSTANCES AGAINST THE CLAIM OF LOSS THE AO HAS ESTIMATED THE PR OFIT AT RS.1 LAKH. 21. IN MY CONSIDERED OPINION THERE IS NO BASIS FOR THIS ACTION OF THE AO. IT IS ONLY THE STATEMENT OF ACCOUNT OF THE ASSESSEE WHICH CONTAINED RECEIPT OF RS.2,26,000/ - AND THE CLAIM OF EXPENSES WHICH WAS BEFORE THE AO. AS PER COMMON LAW M AXIM OF APPROBATE AND REPROBATE IF A DOCUMENT IS TO BE RELIED UPON IT HAS TO BE RELIED UPON AS A WHOLE. IF THE AO IN THIS CASE IS NOT ACCEPTING THE CLAIM OF EXPENSE THERE IS NO BASIS FOR ACCEPTING THE RECEIPT CONTAINED IN THE SAID STATEMENT OF ACCOUNTS. HENCE IN MY CONSIDERED OPINION WHEN IF THE AO IS NOT ACCEPTING THE SAID STATEMENT OF ACCOUNT THE SAME SHOULD BE REJECTED AS A WHOLE. HENCE THERE CANNOT BE ANY ESTIMATE OF INCOME ON THE BASIS OF THE SAID STATEMENT. HENCE I HOLD THAT THERE CANNOT BE ANY ADDITION ON THIS ACCOUNT. HENCE I MODIFY THE AOS ORDER AND HOLD THAT THE ADDITION OF RS. 1 LAKH IS NOT JUSTIFIED. 2 2 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF SEPT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. DATED: 29 TH SEPT., 2016. 11 ITA NO. 106/PAT/2010. COPY FORWARDED TO : 1. MR. MUMTAZUL HASAN , C/O INTRNATIONAL SCHOOL, NEW PATLIPURA, PATNA. 2. D.C.I.T., CENTRAL CIRCLE - 2, PATNA. 3. C.I.T. - , PATNA. 4. CIT(APPEALS), - I, PATNA. 5. D.R., ITAT, PATNA. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. WAKODE.