Arvind Laxman Phalke, Pune V. Income-tax Officer,

ITA 1145/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1292 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJIT TOLANI
• Keywords: Unexplained investment
• Section: 143(3); 133(6)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , , BEFORE MS. SUSHMA CHOWLA, J UDICIAL M EMBER . / ITA NO. 1 1 45 /PN/201 4 / ASSESSMENT YEAR : 200 7 - 08 SHRI ARVIND LAXMAN PHALKE, 229/1 - A, VAISHALI HEIGHTS, MALWADI ROAD, HADAPSAR, P UNE 4110 2 8 . / APPELLANT P UNE 4110 2 8 . / APPELLANT PAN: A EVPP7037D VS. THE INCOME TAX OFFICER, WARD 1 ( 3 ), PUNE . / RESPONDENT / APPELLANT BY : S /SHRI AJIT TOLANI AND DARPAN KIRPALANI DARPAN KIRPALANI / RESPOND ENT BY : SHRI RAJESH DAMOR / DATE OF HEARING : 17 .07.2015 / DATE OF PRONOUNCEMENT: 12 .0 8 .2015 / ORDER PER SUSHMA CHOWLA, J M : TH I S APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - I , PUNE , DATED 29 . 1 1 .20 1 3 REL ATING TO ASSESSMENT YEAR 200 7 - 08 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 . 2. THE ASSESSEE H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS. 3,03,000 MADE BY THE AO, TO THE TOTAL INCOME OF THE ASSESSEE. THE LEARNED AO HAS SHOWN INCONSISTENCY IN JUDGMENT BY FIRST ACCEPTING THE SAME FOR AO HAS SHOWN INCONSISTENCY IN JUDGMENT BY FIRST ACCEPTING THE SAME FOR ELEVEN OUT OF THE THIRTEEN DEPOSITS . SUBSEQUENTLY, THE CIT HAS SHOWN INCONSISTENCY IN ACCEPTING THE EXPLANATION FOR THE TWELFTH DEPOSIT AND REJECTING THE THIRTEENTH. ITA NO . 1 1 45 /PN/20 1 4 SHRI ARVIND LAXMAN PHALKE 2 2 . THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS IN STEPPING INTO THE SHOES OF A BUSINESSMAN TO DECIDE ON HOW MUCH TIME A BUSINESSMAN CAN KEEP CASH IDLE . IN HIS ORDER THE LEARNED CIT CONSIDERS A PERIOD OF TWO AND A HALF MONTHS UNACCEPTABLY TOO LONG TO KEEP CASH IN LIQUID FORM. THE ABOVE GROUNDS ARE DISTINCT AND SEPARATE, AND WI THOUT PREJUDICE TO EACH OTHER . THE APPELLANT CRAVES LEAVE TO ADD, MODIFY, ALTER, WITHDRAW OR FOREGO ANY OF THE GROUNDS AT THE TIME OF HEARING. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS.3,03,000/ - . 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 7,49,949/ - , WHICH WAS REVISED SINCE LONG TERM CAPITAL GAIN ON SALE OF GODOWN WAS NOT SHOWN IN THE ORIGINAL RETURN OF INCOME. THE ASSESSEE WAS ENGAGED IN THE BUS INESS OF TRADING IN OIL , VANASPATI, SUGAR, ETC. THE ASSESSEE WAS HAVING SAVINGS BANK ACCOUNT WITH KARNATAKA BANK LTD. AND THE EXTRACT OF BANK ACCOUNT FOR THE YEAR UNDER CONSIDERATION WAS RECEIVED BY THE ASSESSING OFFICER UNDER SECTION 133(6) OF THE ACT. THE ASSESSEE RECEIVED BY THE ASSESSING OFFICER UNDER SECTION 133(6) OF THE ACT. THE ASSESSEE HAD DEPOSITED CASH TO THE EXTENT OF RS. 22,98,000/ - ON VARIOUS DATES. THE ASSESSEE FURNISHED EXPLANATION VIS - - VIS SOURCE OF C ASH DEPOSIT IN THE SAID ACCOUNT WHICH WAS ACCEPTED BY THE ASSESSING OFFICER EXCEPT THE CASH DEPOSIT OF RS. 2,00,000/ - ON 18.08.2006 AND RS. 3,03,000/ - ON 15.12.2006 . SINCE THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE BANK TO THE EXTENT OF RS. 5,03,000/ - , THE SAME WAS ADDED AS INCOME OF THE ASSESSEE. EXTENT OF RS. 5,03,000/ - , THE SAME WAS ADDED AS INCOME OF THE ASSESSEE. 5. THE CIT(A) NOTED THE EXPLANATION OF THE ASSE SSEE VIS - - VIS EARLIER WITHDRAWALS MADE BY THE ASSESSEE UP TO 15.12.2006 AND DEPOSIT TO THE EXTENT OF RS.2,00,000/ - ONLY AS AGAINST WITHDRAWAL OF RS. 11,30,000/ - . THE CIT(A) WAS OF THE VIEW THAT THE DEPOSIT OF RS. 3,03,000/ - ON 15.12.2006 COULD NOT BE SAID TO HAVE BEEN MADE OUT OF EARLIER WITHDRAWALS IN THE SAME ACCOUNT AND THE SAME HAVE BEEN MADE OUT OF EARLIER WITHDRAWALS IN THE SAME ACCOUNT AND THE SAME WAS ADDED AS UNEXPLAINED INVESTMENT UNDER SECTION 69A OF THE ACT. HOWEVER, ADDITION OF RS.2 LAKHS WAS DELETED BY THE CIT(A). ITA NO . 1 1 45 /PN/20 1 4 SHRI ARVIND LAXMAN PHALKE 3 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF C IT(A). 7. SHRI AJIT TOLANI & DARPAN KIRPALANI APPEARED ON BEHALF OF THE ASSESSEE AND SHRI RAJESH DAMOR APPEARED ON BEHALF OF THE REVENUE AND PUT FORWARD THEIR CONTENTIONS. 8. AFTER HEARING THE RIVAL CONTENTIONS AND ON PERUS AL OF RECORD , IT TRANSPIRES THA T THE ASSESSEE HAD MADE VARIOUS WITHDRAWALS IN CASH FROM HIS BANK ACCOUNT WITH KARNATAKA BANK LTD. TOTALING RS.11,30,000/ - , AS AGAINST WHICH THE ASSESSEE HAD DEPOSITED RS.5,03,000/ - IN THE BANK ACCOUNT ON TWO DIFFERENT DATES. THE EXPLANATION OF THE ASSESS EE VIS - - VIS RS.2,00,000/ - DEPOSITED ON 16.08.2006 WAS ACCEPTED BY THE CIT(A) AS EXPLAINED THROUGH THE CASH WITHDRAWALS. HOWEVER, SIMILAR EXPLANATION OF SOURCE OF CASH DEPOSIT ON 15.12.2006 OF RS.3,03,000/ - WAS NOT ACCEPTED BY THE CIT(A) BECAUSE OF THE TI ME GAP BETWEEN THE DATES OF CASH WITHDRAWAL AND DATE OF CASH DEPOSIT. THE BREAK - UP OF DATE - WISE WITHDRAWALS MADE BY THE ASSESSEE IN CASH ARE AS UNDER: - ---- ---- EXPLANATION OF THE SOURCE ---- ---- EARLIER WITHDRAWALS UP TO 15/12/2006 DATE OF DEPOSIT AMOUNT (IN RS.) DATE OF WITHDRAWALS AMOUNT (IN RS.) 16/08/2006 2,00,000 03/04/2006 1,00,000 15/12/2006 3,03,000 26/06/2006 80,000 28/06/2006 8,40,000 18/08/2006 10,000 21/09/2006 10,000 28/09/2006 90,000 TOTAL 5,03,000 11,30,000 9. THE A SSESSEE AS AGAINST THE AFORESAID WITHDRAWALS ON DIFFERENT DATES, CLAIMED TO HAVE RE - DEPOSITED SUM OF RS.5,03,000/ - IN THE SAME BANK ACCOUNT AS UNDER: - DATE AMOUNT (IN RS.) 16/08/2006 2,00,000 15/12/2006 3,03,000 TOTAL 5,03,000 ITA NO . 1 1 45 /PN/20 1 4 SHRI ARVIND LAXMAN PHALKE 4 10. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE HAS MADE SUFFICIENT CASH WITHDRAWALS FROM ITS BANK ACCOUNT, I FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN ONLY ALLOWING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS. 2,00,000/ - AND NOT ACC EPTING S IMILAR EXPLANATION IN RESPECT OF BALANCE CASH DEPOSIT OF RS.3,03,000/ - . REVERSING THE ORDER OF CIT(A), THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.3,03,000/ - SINCE THE ASSESSEE HAD MADE SUFFICIENT CASH WITHDRAWALS FROM HIS BANK ACCOUNT, THOUGH ON EARLIER DATES, WHICH WAS AVAILABLE WITH THE ASSESSEE TO MAKE THE AFORESAID DEPOSITS AND IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD BY THE REVENUE THAT THE SAID CASH IN HAND WAS OTHERWISE UTILIZED . THE GROUNDS OF APPEAL RAISED BY T HE ASSESSEE ARE THUS, ALLOWED. 1 1 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER P RONOUNCED ON THIS 12 TH DAY OF AUGUST , 201 5 . SD/ - ( SUSHMA CHOWLA ) / JUDICIAL MEMBER / PUNE ; DATED : 12 TH AUGUST , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESP ONDENT; 3. ( ) / THE CIT(A) - I , PUNE ; 4. / THE CIT - I , PUNE ; 5. , , - / DR SMC , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE