Sh. Ashok Kumar, Kurukshetra V. ITO, Kurukshetra

ITA 1112/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6853 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 01-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1112/CHD/2016 (ASSESSMENT YEAR : 2011-12) SH.ASHOK KUMAR, VS. THE INCOME TAX OFFICER, 551, SECTOR 3, URBAN ESTATE, WARD-1, KURUKSHETRA. KURUKSHETRA. PAN: AVYPK1377M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOEL, CA RESPONDENT BY : NONE DATE OF HEARING : 24.07.2017 DATE OF PRONOUNCEMENT : 21.09.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. CIT(APPEALS, KARNAL DATED 29.8.201 6 RELATING TO ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUE IN THE PRESENT APPEAL PERTAINS TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT S IN BANK. 3. BRIEFLY STATED, THE ASSESSEE HAD FILED RETURN DE CLARING TOTAL INCOME OF RS.1,53,600/- PLUS AGRICULTURAL INC OME OF RS.2,25,000/- FOR THE IMPUGNED YEAR. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE R EASON WAS THE AIR INFORMATION THAT THERE WERE CASH DEPOSI TS OF RS.88,16,000/- IN THE SAVING BANK ACCOUNT OF THE AS SESSEE WITH THE UNITED BANK OF INDIA. THE ASSESSEE EXPLAI NED THE 2 SAME AS BEING RELATED TO THE SALE RECEIPTS OF HIS A GRICULTURAL PRODUCE. THE ASSESSING OFFICER WAS NOT SATISFIED W ITH THE EXPLANATION OF THE ASSESSEE AND HE, THEREFORE, HELD THE SAID SUM AS UNEXPLAINED AND TREATED THE SAME AS INCOME O F THE ASSESSEE FROM UNDISCLOSED SOURCES MAKING ADDITION O F THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED BY THE SAME, THE ASSESSEE FILED AN APP EAL BEFORE THE LD.CIT(APPEALS) WHERE THE ASSESSEE CONTE NDED THAT DUE CREDIT SHOULD BE GIVEN FOR VARIOUS WITHDRA WALS MADE FROM THE BANK ACCOUNT AND ALSO THAT SOME OF T HE DEPOSITS WERE EXPLAINED THROUGH SALE OF AGRICULTURA L PRODUCE. THE ASSESSEE FURTHER SUBMITTED THAT THERE WAS NEGATIVE CASH BALANCE OF RS.9,31,000/- AND OTHER EXPLANATION FOR VARIOUS CASH CREDITS WAS ALSO GIVEN ALONGWITH DOCUMENTS SUBSTANTIATING THE SAME. THE LD.CIT(APPEALS) FORWARDED THE ASSESSEES SUBMISSION S TO THE ASSESSING OFFICER WHO IN HIS REPORT DATED 21.6. 2016 ACCEPTED ASSESSEES PLEA OF MAKING ADDITION ONLY OF THE PEAK NEGATIVE BALANCE BUT AT THE SAME TIME, WORKED OUT THE PEAK NEGATIVE BALANCE AT RS.31,21,500/- AFTER GIVIN G CREDIT FOR OPENING CASH IN HAND OF RS.21,500/- ONLY AS AGA INST RS.5 LACS CLAIMED BY THE ASSESSEE AND AFTER TAKING INTO CONSIDERATION THE NEGATIVE CASH IN HAND AS ON 17.4. 2010 ON ACCOUNT OF TRANSACTION IN THE PUNJAB NATIONAL BANK ACCOUNT OF THE ASSESSEE. THE LD.CIT(APPEALS) AFTER CONSIDE RING THE ASSESSEES SUBMISSIONS AND REMAND REPORT FILED BY T HE ASSESSING OFFICER HELD THAT SOME CREDIT OUGHT TO BE GIVEN FOR 3 OPENING BALANCE OF CASH AND CASH AVAILABLE ON ACCOU NT OF TRANSACTIONS MADE IN THE PUNJAB NATIONAL BANK ACCOU NT OF THE ASSESSEE. THE LD.CIT(APPEALS) HELD THAT CREDI T OF RS.6,21,500/- BE GIVEN ON ACCOUNT OF THE AFORESAID AND, THEREFORE, HELD THE PEAK NEGATIVE AMOUNT TO BE RS.2 5 LACS, ADDITION ON ACCOUNT OF WHICH WAS UPHELD BY THE LD.CIT(APPEALS). 5. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US, RAISING FOLLOWING EFFECTIVE GROUN D: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.25,00,000/- U/S 69 ON ACCOUNT OF CASH DEPOSIT IN SAVING BANK ACCOUNT. 6. BEFORE US, THE LD. COUNSEL FOR ASSESSEE CONTENDE D THAT THE PEAK NEGATIVE CASH BALANCE SHOULD BE WORKED OUT AFTER CONSIDERING THE FOLLOWING: 1) THE NEGATIVE CASH IN HAND AS ON 17.4.2010 SHOULD BE CALCULATED AFTER EXCLUDING AN AMOUNT OF RS.8,69,000/- SINCE THE SAME PERTAINED TO EXCESS DEPOSITS MADE IN THE PRECEDING YEAR. THE LD. COUNSE L FOR ASSESSEE DREW OUR ATTENTION TO PAPER BOOK PAGE NO.26 WHICH WAS ANNEXURE-3 OF THE ASSESSING OFFICER S REMAND REPORT BEING CASH BOOK COMPILED BY THE ASSESSING OFFICER FROM TWO BANK ACCOUNTS HELD BY TH E ASSESSEE AND POINTED OUT THE ABOVE FACTS TO US FROM THE SAME. 2) THAT THE OPENING CASH IN HAND BE TAKEN AT RS.5 LACS AS AGAINST RS.21,500/- CONSIDERED BY THE 4 LD.CIT(APPEALS) SINCE ADMITTEDLY THE ASSESSEE WAS I N THE BUSINESS OF A PROPERTY CONSULTANT AND CASH IN HAND OF RS.5 LACS WAS A REASONABLE AMOUNT FOR THE SAME. 3) WITHDRAWALS FROM THE UNION BANK OF INDIA NOT CONSIDERED WHILE PREPARING THE CASH BOOK AND WORKIN G OUT THE PEAK NEGATIVE : 1 . 2.11.2010 RS.1,50,000/- UNITED BANK OF INDIA 2. 9.2.2011 RS.5,00,000/- UNITED BANK OF INDIA 4) CASH WITHDRAWALS FROM PUNJAB NATIONAL BANK NOT TAKEN INTO ACCOUNT WHILE CALCULATING THE PEAK NEGAT IVE: DATE WITHDRAWAL (RS.)CASH DEPOSIT 24.05.2010 -- 1,50,000 24.05.2010 1,50,000 -- 24.05.2010 2,50,000 -- 14.06.2010 -- 50,000 14.06.2010 50,000 -- 09.07.2010 5,00,000 -- 06.08.2010 -- 15,000 18.08.2010 -- 49,500 21.08.2010 18,000 -- 29.09.2010 3,00,000 -- 17.11.2010 -- 1,50,000 19.03.2011 -- 3,00,000 TOTAL 12,68,000 7,14,500 BALANCE 5,53,500 5) CERTAIN AMOUNT OF CASH DEPOSITED TO BE ATTRIBUT ED TO THE AGRICULTURAL INCOME OF RS.2,25,000/- EARNED BY THE ASSESSEE AND DISCLOSED IN HIS RETURN OF INCOME. 5 7. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORD ER OF THE LD.CIT(APPEALS) AND STATED THAT THE LD.CIT(APPE ALS) HAD RIGHTLY GIVEN CREDIT ON ACCOUNT OF OPENING CASH IN HAND AND CASH AVAILABILITY FROM WITHDRAWALS MADE FROM PUNJAB NATIONAL BANK TO THE EXTENT OF RS.6,21,500/- AND NO FURTHER CREDIT WAS REQUIRED TO BE GIVEN TO THE ASSESSEE. 8. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS ALSO THE DOCUMENTS PLACED BEFORE US. THE ONLY ISSUE WHICH RE QUIRES OUR THOUGHTFUL CONSIDERATION AND WHICH HAS BEEN PLE ADED BY THE ASSESSEE IS VIS A VIS THE CORRECT WORKING OF THE PEAK NEGATIVE BALANCE OF CASH IN HAND DURING THE YEAR. 9. WE ARE IN AGREEMENT WITH THE CONTENTION OF THE L D. COUNSEL FOR ASSESSEE THAT THE NEGATIVE CASH BALANCE OF RS.8,69,000/- ON ACCOUNT OF EXCESS DEPOSITS MADE IN THE PUNJAB NATIONAL BANK ACCOUNT OF THE ASSESSEE RELATE D TO THE PERIOD PRECEDING THE IMPUGNED YEAR. THE ASSESSEE HA S DULY DEMONSTRATED THIS FACT FROM THE CASH BOOK PREPARED BY THE ASSESSING OFFICER ITSELF AND THE SAME HAS NOT BEEN CONTROVERTED B Y THE REVENUE. WE, THEREFORE, DIREC T THAT THE AMOUNT OF RS.8,69,000/- SHOULD BE REDUCED WHILE WOR KING OUT THE PEAK NEGATIVE CASH BALANCE IN THE HANDS OF THE ASSESSEE. 10. AS FAR CONTENTION OF THE ASSESSEE THAT THE OPEN ING CASH IN HAND SHOULD BE TAKEN AT RS.5 LACS INSTEAD OF RS. 21,500/- SHOWN BY THE ASSESSEE, WE CANNOT AGREE WITH THIS CONTENTION SINCE WE FIND THAT THE LD.CIT(APPEALS) H AS GIVEN 6 CATEGORICALLY FINDING THAT RS.21,500/- WAS THE CLOS ING BALANCE OF CASH IN HAND REFLECTED BY THE ASSESSEE H IMSELF IN HIS RETURN OF INCOME FILED FOR THE PRECEDING YEAR. 11. AS FOR THE CONTENTION OF THE ASSESSEE THAT DUE CREDIT FOR WITHDRAWALS MADE FROM THE UNION OF INDIA BANK A CCOUNT AND PUNJAB NATIONAL BANK ACCOUNT OF THE ASSESSEE AS REPRODUCED ABOVE HAVE NOT BEEN GIVEN, WE FIND THAT THE LD.CIT(APPEALS) HAS GIVEN LUMP SUM CREDIT FOR THE S AME AT RS.6 LACS AND HAS NOT SPECIFICALLY DEALT WITH ALL T HE TRANSACTIONS POINTED OUT BY THE ASSESSEE AS UNCONSI DERED. NO REASON FOR THE SAME HAS ALSO BEEN GIVEN BY THE LD.CIT(APPEALS). WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE ISSUE TO THE FILE OF THE AO TO CONSIDER THE AFORESA ID CONTENTION OF THE ASSESSEE AND AFTER VERIFYING THE SAME GIVE DUE CREDITS FOR THE WITHDRAWALS MADE BY THE ASSESSE E. 12. LASTLY, WE ALSO AGREE WITH THE CONTENTION OF T HE ASSESSEE THAT SOME AMOUNT OF CREDIT FOR CASH DEPOSI TED SHOULD ALSO BE GIVEN FOR THE AGRICULTURAL INCOME EA RNED BY THE ASSESSEE DURING THE YEAR AND RETURNED FOR TAXAT ION AT RS.2,25,000/-. WE CONSIDER AN AMOUNT OF RS.1 LACS A S BEING JUSTIFIED FOR THE SAME AND DIRECT THE ASSESSING OFF ICER TO GIVE CREDIT FOR THE SAME AMOUNT. 13. IN VIEW OF THE AFORESAID, WE DIRECT THAT THE PE AK NEGATIVE CASH IN HAND AVAILABLE WITH THE ASSESSEE S HOULD BE WORKED OUT AFTER REDUCING; 7 A) RS.8,69,000/- ON ACCOUNT OF EXCESS DEPOSITS IN C ASH MADE IN PRECEDING YEAR; B) RS.1 LAC TO BE ATTRIBUTABLE TO CASH DEPOSITED FR OM AGRICULTURAL INCOME OF THE ASSESSEE AND; C) DUE CREDIT BE GIVEN TO WITHDRAWALS MADE FROM UNION BANK OF INDIA AND PUNJAB NATIONAL BANK WHICH WAS POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE AS HAVING NOT BEEN CONSIDERED BY THE ASSESSING OFFICER . 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST SEPTEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH 8