ITO, WARD- 1(2), RAIPUR V. SMT. KALPANA BEN JANANI, NASHIK (MH)

ITA 113/BIL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9095 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R B DOSHI
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.113 /RPR /201 4 ASSESSMENT YEAR : 2009 - 2010 INCOME TAX OFFICER, WARD 1(2), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR VS. SMT. KALNA;PA BEN JANANI, HOUSE NO.50, BAZAR PETH, VANI, DINDORI NAKA, NASHIK, MAHARASHTRA PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) C.O. NBO.20/RPR/2014 (ARISING OUT OF ITA NO.113/RPR/201 ASSESSMENT YEAR : 2009 - 20104) SMT. KALNA;PA BEN JANANI, HOUSE NO.50, BAZAR PETH, VANI, DINDORI NAKA, NASHIK, MAHARASHTRA VS. INCOME TAX OFFICER, WARD 1(2), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR PAN/GIR NO. (CROSS OBJECTOR ) .. ( RESPONDENT ) ASSESSEE BY : SHRI R.B.DOSHI, AR REVENUE BY : SHRI AJIT KUMAR LASKAR, DR DATE OF HEARING : 4 /05 / 2017 DATE OF PRONOUNCEMENT : 5 /05 / 2017 O R D E R PER N.S.SAINI, AM THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILE BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A) - RAIPUR , DATED 20.9.2014 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2 2. THE SOLE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN DELETING ADDITION OF RS.63,46,900/ - MADE BY THE ASSESSING OFFICER UN ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN ICICI BANK. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE CASH DEPOSITS ABOVE THE THRESHOLD LIMIT IN SAVING BANK ACCOUNT AMOUNTING TO RS.44,62,900/ - AND RS. 28,84,000/ - RESPECTIVELY IN ICIC I BANK DURING THE FINANCIAL YEAR 20 08 - 09. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF DEPOSITS WITH DOCUMENTARY EVIDENCE AND AS THE ASSESSEE FAILED TO DO SO, THE ASSESSING OFFICER TREATED RS.63,46,900/ - AS UNEXPLAINED DEPOSITS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED AS UNDER: 3.1THE APPELLANT HAS CONTENDED THAT THE APPELLANTS BROTHER SHRI DEEPAK SANGANI OF RAIPUR HAS RECEIVED OFFER FROM SHRI DEVEN MALVIYA SHARE/COMMODITY BROKER OF NAGPUR TO POOL RESOURCES FROM SMALL INVESTORS AND TO GIVE THE CONSOLIDATED AMOUNT TO SHRI MALVIYA AGAINST RETURN OF MORE THAN 2% PER MONTH. SHRI DEEPAK SANGANI HAS INVOLVED HIS SISTER, WHO IS RESIDING AT NASIK, SINCE JULY, 1989 TO RAISE FUNDS FROM AND AROUND NASIK. ACCORDINGLY, THE APPELLAN T HAS GARNERED BUSINESS BY OBTAINING CASH FROM VILLAGERS AND DEPOSITED THE MONEY IN HER BANK ACCOUNT WITH ICICI BANK, NASIK FROM WHERE THE MONEY WAS TRANSFERRED THROUGH CHEQUE TO THE ACCOUNTS OF SHRI DEEPAK SANGANI AND THE SAID MONEY WAS ULTIMATELY TRANSFE RRED TO THE ACCOUNTS OF TWO CONCERNED COMPANIES OF SHRI DEVEN MALVIYA NAMELY, VIBRANT EQUITIES & COMODITIES (P) LTD. AND VELOCITY 3 CAPITAL MARKET. COPY OF BANK ACCOUNT OF THE APPELLANT WAS FILED. IT WAS STATED THAT SHRI DEVEN MALVIYA WAS PERIODICALLY GIVING THE RETURNS TO SHRI DEEPAK SANGANI AND THEREAFTER THE AMOUNT WAS TRANSFERRED TO THE APPELLANT'S ACCOUNT FOR FURTHER REMITTANCE TO THE INVESTORS. ON THE BASIS OF THESE EXPLANATIONS, THE APPELLANT CONTENDED THAT THE AMOUNT DEPOSITED IN HER ACCOUNT DOES NOT PERTAIN TO HER. HENCE, THE ADDITION MADE IS NOT CORRECT. THE APPELLANT ALSO FILED CONFIRMATIONS FROM TWENTY THREE PERSONS. 3.2 THE APPELLANT FURTHER SUBMITTED THAT LATER ON SHRI DEVEN MALVIYA ENDED UP IN GREAT FINANCIAL DIFFICULTIES AND COMMITTED SUICIDE ON 30.12.2010 AND ALL HIS ACTIVITIES WERE RECORDED IN THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF DISHA VS. STATE OF GUJARAT AND OTHERS (2011) STPL (WEB) 624 (SC) IN WRIT PETITION (CR IMINAL) NO.33 OF 2011 FILED BY SMT. DISHA, WIDOW OF SHRI DEVEN MALVIYA DECIDED ON 20.07.2011. THE APPELLANT ALSO INVITED MY ATTENTION TO NEWS ITEMS PUBLISHED IN NEWSPAPERS 'AKHILA', 'LOKMAT' AND IN WEB LINK OF TIMES OF INDIA SR.31.12.2010. IT WAS SUBMITTED AT DUE TO ALL THE PRESSURES AND PULLS, THE APPELLANT AND HER HUSBAND DEVELOPED CO RONARY ARTERY DISEASE AND WERE UNDER TREATMENT TILL ASSESSMENT STAGE, FOR WHICH THE CO MPLIANCES COULD NOT BE MADE EARLIER. RELYING ON THE DECISION OF HON'BLE SUPREME IN THE C ASE OF CIT VS. SMT. P.K. NOORJAHAN (1999) 237 ITR 570 (SC), IT WAS ARGUED THAT HAVING REGARD TO HER CAPITAL, SOURCE OF INCOME AND HER EDUCATION, THE APPELLANT COULD NOT CREDIT SUCH HUGE SUM IN HER ACCOUNT. THE APPELLANT ALSO RELIED ON THE DECISION OF HON'B LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAI CHAND GANDHI 141 ITR 67, 69 (BOM) AND CONTENDED THAT THE AMOUNT DEPOSITED IN BANK ACCOUNT CANNOT BE ADDED BY INVOKING SECTION 68 OF THE ACT. IT WAS CONTENDED THAT IN ENQUIRY CONDUCTED DURING REMAND STAGE, SO ME OF THE INVESTORS HAVE CONFIRMED THE TRANSACTIONS STATING THAT THEY ARE DOING AGRICULTURE ACTIVITIES FOR MORE THAN 15 TO 20 YEARS AND HENCE, THE AO'S OBSERVATION THAT THEY WERE MEN OF LOW MEANS IS BASELESS. REGARDING THE CONNECTION OF LATE SHRI DEVEN MAL VIYA AND SHRI DEEPAK SANGANI, THE APPELLANT HAS CONTENDED THAT FLOW OF MONEY ELECTRONICALLY FROM THE BANK ACCOUNT OF SHRI DEEPAK SANGANI TO BANK ACCOUNT OF COMPANIES / CONCERNS OF LATE SHRI DEVEN MALVIYA ESTABLISHES THE LINK. THEREFORE, ACCORDING TO THE AP PELLANT, THE ADDITION MADE BY THE A.O. IS UNWARRANTED. 5. THE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER: 4 3.3 1 HAVE GONE THROUGH THE OBSERVATIONS OF THE A.O. AND SUBMISSION OF THE APPELLANT. THE PRECISE QUESTION INVOLVED IN THIS CASE IS WHETHER TH E CASH FOUND DEPOSITED IN THE APPELLANT'S BANK ACCOUNT REPRESENTS HER UNDISCLOSED INCOME OR NOT. ADMITTEDLY, THE APPELLANT'S BANK ACCOUNT DEMONSTRATES TRANSFER OF FUND TO THE BANK ACCOUNT OF SHRI DEEPAK SANGANI, HER BROTHER, AND THE FUNDS SO TRANSFERRED WE RE SUBSEQUENTLY TRANSMITTED TO THE BANK ACCOUNT OF COMPANIES OF LATE SHRI DEVEN MALVIYA. THE BANK ACCOUNTS ALSO SHOW SEVERAL TRANSACTIONS OF RETURN OF MONEY FROM THE ACCOUNTS OF THOSE COMPANIES TO THE ACCOUNT OF SHRI DEEPAK SANGANI AND LATER ON TO THE APPE LLANT'S ACCOUNT FOR THE PAYMENT TO INVESTORS. DURING REMAND PROCEEDINGS, SEVERAL INVESTORS HAVE ALSO CONFIRMED THE FACT THAT THEY HAD GIVEN MONEY IN CASH TO THE APPELLANT, FOR MAKING INVESTMENT. THE APPELLANT HAS ALSO PRODUCED BEFORE ME DETAILS OF DATE OF RECEIPT OF MONEY IN CASH FROM THESE PERSONS AND A PERUSAL OF THESE DETAILS SHOWS THAT THE DATE OF DEPOSIT IN THE BANK ACCOUNT MATCHES WITH T H E DATE OF RECEIPT OF CASH FROM VARIOUS PERSONS. THE FACT OF RECEIPT OF MONEY FROM IDENTIFIED INDIVIDUALS IS ESTABL ISHED FROM THE CONFIR MATION AND DIRECT ENQUIRY OF THE AO. GENUINENESS OF THE EXPLANATION OF THE APPELLANT IS ALSO ESTABLISHED . THE FACTS RECORDED IN THE HONBLE SUPREME COURTS ORDER ARE STANDING EVIDENCE OF THE ACTIVITIES CARRIED ON BY SHRI DEVEN MALVIY A. THE EXPLANATION OF APPELLANT THAT SHE HAD FALLN VICTIM OF ILL DEEDS OF SHRI DEVEN MALVIYA IS SUBSTANTIATED. THERE IS NOTHING ON RECORD TO CONTROVERT ANY MATERIAL FURNISHED BY THE APPELLANT. IN THE REMAND REPORT ALSO, NO FINDING IS RECORDED ABOUT THE FACTS OR EXPLANATION OF APPELLANT BEING INCORRECT. UNDER SUCH CIRCUMSTANCES, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS ABUNDANTLY DISCHARGED THE BURDEN CAST ON HER TO SHOW THAT THE AMOUNTS FOUND DEPOSITED IN HER ACCOUNT ACTUALLY RELATED TO THE INVESTORS AND NOT TO HER AND SO THE AMOUNT OF CASH DEPOSITS CANNOT BE HELD TO BE THE INCOME OF APPELLANT. THE ISSUE OF POOLING OF SMALL INVESTORS' FUND ON THE ASSURANCE OF LUCRATIVE RETURNS IS FOUND RAMPANT. ON THE OTHER HAND, THE A.O'S OBJECTION THAT THE INVESTORS ARE MEN OF LOW MEANS HAS NO BASIS. FURTHER, AS PER THE PAST RECORDS OF THE APPELLANT, SHE HAS BEEN DISCLOSING INSIGNIFICANT INCOME FROM PETTY SOURCES AND INTEREST. CONSIDERING ALL THE FACTS OF THE CASE, I ALSO AGREE THAT THE APPELLANT COULD NOT B E CREDITED WITH HAVING EARNED SUCH PHENOMENAL INCOME IN A YEAR. THE RATIO OF DECISION OF HON'BLE SUPREME COURT RELIED UPON BY THE APPELLANT IS APPLICABLE IN THE FACTS OF THE CASE OF APPELLANT. THEREFORE, THE ADDITION MADE BY THE A.O. IS NOT 5 PROPER, HENCE, DELETED. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 6. LD D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 7. LD A.R. RELIED ON THE ORDER OF THE CIT(A). HE FURTHER RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SMT. P .K. NOORJAHAN (1999) 237 ITR 570 (SC), AND ARGUED THAT THE HONBLE SUPREME COURT HELD THAT THE INCOME - TAX OFFICER IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE A S THE INCOME OF THE ASSESSEE, IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVERY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THAT THE SOURCES OF INVESTMENTS COULD NOT BE TREATED AS INC OME OF THE ASSESSEE . HENCE, IT WAS HIS ARGUMENT THAT JUST BECAUSE THE EXPLANATION IS FOUND NOT SATISFACTORY BY THE ASSESSING OFFICER, IT IS NOT NECESSARY THAT ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE AND SAME WILL DEPEND ON THE FACTS OF EACH CASE. HE ARGUED THAT THE AS SESSEE EXPLAINED BEFORE THE CIT (A) THAT THE AMOUNT WAS RECEIVED FROM SMALL INVESTORS AND TO GIVE THE CONSOLIDATED AMOUNT TO SHRI DEVEN MALVIYA, WHO WAS A SHARE TRADING BROKER AGAINST RETURN OF MORE THAN 2% PER MONTH. HE SUBMITT ED THAT DURING THE REMAND PROCEEDINGS, ENQUIRIES WERE CONDUCTED BY THE ASSESSING OFFICER AND SOME OF THE INVESTORS HAVE CONFIRMED THE TRANSACTION S STATING THAT THEY ARE 6 DOING AGRICULTURAL ACTIVITIES FOR MORE THAN 15 TO 20 YEARS AND, THEREFORE, THE ASSESSIN G OFFICERS OBSERVATION THAT THEY WERE MEN OF LOW MEANS IS BASELESS. IT WAS SUBMITTED WITH REGARD TO LATE DEVEN MALVIYA AND SHRI DEEPAK SANGANI, THAT THE FLOW OF MONEY WAS ELECTRONICALLY FROM THE BANK ACCOUNT OF SHRI DEEPAK SANGANI TO BANK ACCOUNT OF COM PANIES/CONCERN OF LATE SHRI DEVEN MALVIYA ESTABLISHES THE LINK. THEREFORE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. HE ALSO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT S. ORISSA CORPORATION PVT LTD., 159 ITR 78 (ORI), WHE REIN, IT WAS HELD THAT IT IS NOT IN ALL CASES THAT BY MERE REJECTION OF THE EXPLANATION OF THE ASSESSEE, THE CHARACTER OF A PARTICULAR RECEIPT AS INCOME COULD BE SAID TO HAVE BEEN ESTABLISHED. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, PERUSING THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE CIT(A) AFTER APPRECIATING THE ENTIRE FACTS HAS ARRIVED AT A CONSCIOUS CONCLUSION THAT THE ADDITION OF RS.63,46,900/ - MADE AS UNEXPLAINED DEPOSIT IN ICICI BANK CANNOT BE SUSTAINED. L D D.R. DURING THE COURSE OF HEARING HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND HAS NOT POINTED OUT ANY SPECIFIC ERROR IN THE ABOVE QUOTED ORDER OF THE CIT(A) . HENCE, WE C ONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVE NUE. 9. THE CROSS OBJECTION FILED BY THE ASSESSEE IS SUPPORTING TO THE ORDER OF THE CIT(A). SINCE, WE HAVE UPHELD THE ORDER OF THE CIT(A), THE CROSS 7 OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND SAME IS DISMISSED. 10. IN THE RESULT, THE APPEA L FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 05 /05 /2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (GEORGE GEORGE K ) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER RAIPUR ; DATED 05 /05 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY 1. THE APPELLANT : INCOME TAX OFFICER, WARD 1(2), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR 2. THE RESPONDENT. SMT. KALNA;PA BEN JANANI, HOUSE NO.50, BAZAR PETH, VANI, DINDORI NAKA, NASHIK, MAHARASHTRA 3. THE CIT(A) RAIPUR 4. PR.CIT , RAIPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//