Smt. Neelam Sharma, Shimla V. ITO, Rampur Bushahr

ITA 1159/CHANDI/2014

• Counselvise Citation: 115921514 RSA 2014
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Depreciation; Peak credit; Additional evidence
• Section: 68; 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 1159/CHD/2014 ASSESSMENT YEAR: 2010-11 SMT. NEELAM SHARMA, VS. THE ITO, WARD- RAMPUR, NEW SHIMLA BUSHAHR, DISTT. SHIMLA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VISHAL MOHAN RESPONDENT BY : MS. RAJINDER KAUR DATE OF HEARING : 03.11.2015 DATE OF PRONOUNCEMENT : 16.11.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A) , SHIMLA (H.P.) DATED 20.10.2014 RELATING TO ASSESSME NT YEAR 2010-11 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF ( APPEALS) IS NOT JUSTIFIED IN UPHO LDING THE ADDITION OF RS 1108516/- UNDER SECTION 68 OF THE IN COME TAX ACT ON THE BASIS OF THE PEAK CREDIT WORKED OUT BY H ER. THE SAID ADDITION IS ABSOLUTELY ILLEGAL AND NOT SUSTAINABLE IN THE EYES OF LAW. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN NOT 2 ALLOWING THE APPLICATION FILED FOR ADDUCING ADDITIO NAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES. 1962. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SSESSEE IS AN INDIVIDUAL AND THE ASSESSMENT YEAR INVOLVED IS 2010-11. FOR THE AS SESSMENT YEAR 2010-11, THE ASSESSEE SUBMITTED HER RETURN OF INCOME ON 30.7.201 0 DECLARING TOTAL INCOME AT RS. 2,59,259/-. THE SAID RETURN WAS PROCESSED U/S 1 43(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY TO VERIFY THE SOURCE OF CASH DEPOSITS MADE BY THE ASSE SSEE IN HER SAVING BANK ACCOUNT. THE MAIN SOURCE OF INCOME OF ASSESSEE IS I NCOME FROM PLYING OF VEHICLES, HOUSE PROPERTY AND OTHER SOURCES. THE ASS ESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CASH D EPOSITS MADE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION IN HDFC SAVING ACCOUNT AMOUNTING TO RS. 19 LAKHS. THE DETAILS OF CASH DEP OSITS IN TWO SAVING BANK ACCOUNTS WITH THE SAME BANK ARE AS UNDER;- HDFC SAVING ACCOUNT NO. 06781930002817 DATE OF CASH DEPOSIT AMOUNT 21.11.2009 4,00,000/- 26.11.2009 3.00.000/- 14.12.2009 5,00,000/- 26.01.2010 4.00,000/- 26.02.2010 3,00,000/- II) HDFC SAVING ACCOUNT NO. 05031000119270 DATE OF CASH DEPOSIT AMOUNT 21.05.2009 10,000/- 16.07.2009 10,000/- TOTAL CASH DEPOSIT IN F.Y. 2009-10 19. 20,000/- 3 IN RESPONSE TO THE QUESTIONNAIRE ISSUED BY THE ASSE SSING OFFICER, THE ASSESSEE SUBMITTED THAT TOTAL CASH WITHDRAWALS DURING THE FI NANCIAL YEAR 2009-10 WAS RS. 21,42,000/- AND AN AMOUNT OF RS. 19 LAKHS WAS RE-DE POSITED IN THE AFORESAID ACCOUNT. IN SUPPORT OF THE ABOVE EXPLANATION, THE A SSESSEE SUBMITTED AN AFFIDAVIT WHICH READS AS UNDER:- 'THIS IS IN CONTINUATION TO MY REPLY OF JULY 7.2012 - I, NEELAM SHARMA W/O SH. VINOD SHARMA AGED ABOUT 49 YEARS RESIDENT O F C-16, SECTOR-I LANE-I. NEW SHIMLA 171009 DO HEREBY SOLEMNLY AFFIRM AND UNDERTAKE THAT: I. THE AMOUNT WITHDRAWN BY ME FROM MY SB ACCOUNT NO . 06781930002817 DURING FY 2010-11 WAS RS. 21.42 LAC . OUT OF WITHDRAWN AMOUNT RS. 19 LAC WERE RE-DEPOSITED AND T HEREAFTER USED BY ME FROM ABOVE SAID ACCOUNT. II. MY SON GOT MARRIED IN FEBRUARY. 2010 AND MONEY WAS WITHDRAWN BY ME FOR MEETING THE EXPENSES MAINLY FOR THE MARRIAGE . ALL THE ENTRIES HAVE BEEN DULY EXPLAINED AND CAN FURTHER HE VERIFIED FRO M MY HDFC BANK SAVING A/C. NO. 06781930002817. III. THE TOTAL CASH WITHDRAWN DURING FY 2010-11 WA S RS. 21,42,000/- OUT OF THIS RS, 59,00,000/-WAS RE-DEPOSITED. THE EX PENSES DURING FY 2010-11 WERE DULY EXPLAINED IN MY BANK STATEMENT. F URTHER CASH OF RS. 19.00,000/- HAS ALSO BEEN SHOWN AT APPROPRIATE PLAC E/COLUMN IN MY ITR- 2 FORM OF FY 2010-11.' 4. THE ASSESSING OFFICER REJECTED THE ABOVE EXPLANA TION OF THE ASSESSEE STATING THAT THE ASSESSEE FAILED TO EXPLAIN THE NATURE AND SOURCE OF CASH DEPOSITS. ACCORDING TO ASSESSING OFFICER, THE ONUS WAS ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF THE DEPOSITS AS PER THE PROVISIONS OF SECTION 68 OF THE ACT. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE FAILE D TO EXPLAIN THE NATURE AND SOURCE OF CASH DEPOSITS IN HER SAVING BANK ACCOUNT AND EXPLANATION GIVEN BY HER WAS ALSO NOT FOUND SATISFACTORY FOR THE REASONS MEN TIONED IN THE ASSESSMENT 4 ORDER. ACCORDINGLY, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 19,20,000/- U/S 68 OF THE ACT AND ADDED THE SAME TO THE TOTAL I NCOME OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND CIT(A) ALLOW ED A PARTIAL RELIEF TO THE ASSESSEE, OBSERVING AS UNDER;- 5.3 THE MAIN ISSUE IN THIS CASE IS THE FA ILURE OF ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITS MADE BY THE ASSESSEE IN HER BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE'S CONTENTION IS THAT IT HAS RE-DEPOSITED THE CASH WITHDRAWN EARLIER FROM HE R BANK ACCOUNT. DURING APPELLATE PROCEEDINGS, THE ASSESSEE HAS CONTENDED T HAT THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THAT ASSESSEE HAS BEEN R ECEDING RENT IN CASH SA WELL AS WITHDRAWALS MADE PRIOR TO 21.11.2009 AND H AS ERRED IN ADDING ENTIRE SUM OF RS. 19,0,000,- IN THE HANDS OF ASSESS ES. THE ASSESSING OFFICER IN HIS ORDER HAS ACCEPTED THE FACT THAT ASSESSEE HA S WITHDRAWN RS- 3.,88,000/- FROM 08.7.2009 TO 17.11.2009 AND NO BEN EFIT OF THE WITHDRAWALS MADE BY THE ASSESSEE EARLIER HAS BEEN GIVEN WHILE C OMPUTING THE INCOME OF ASSESSEE KEEPING IN VIEW THE ABOVE FACTS, IT WOULD BE PROPER TO RE-COMPUTE THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT S ON BASIS OF PEAK CREDIT IN BANK AS UNDER:-- PEAK CREDIT DURING THE YEAR IN THE TWO BARK ACCOUNT S OF ASSESSEE - RS. 16,44,849/- FOUND ON 11.02.2009 LESS : RETURNED INCOME RS. 2,59,259/- LESS : DEPRECIATION AS PER RETURN OF INCOME RS . 1,27,500/- LOSS: 50% OF 2,99,147/-BEING INTEREST PAYABLE ON HOUSE BUILDING ADVANCE JOINTLY OWNED BY ASSESSES ALONGWIIH HER HUSBAND TOTAL RS.11,08,516/- THUS AN ADDITION OF RS.11,08,516/- IS CONFIRMED U/S 69 OF THE I.T. .ACT AS UNEXPLAINED INVESTMENT IN THE FORM CASH DEPOSITED I N BANK. THUS APPEAL OF ASSESSEE IS PARTLY ALLOWED. 5 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHIR VISHAN MOHAN LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS RECOMPUTED THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS ON THE BASIS OF PEAK CREDIT IN BANK. HE FU RTHER POINTED OUT THAT THE LD. CIT(A) HAS NOT CORRECTLY RECOMPUTED THE ADDITION AN D THE FIGURE OF PEAK CREDIT IS WORKED OUT BY THE LD. CIT(A) AT RS. 16,44,849/- IS FACTUALLY INCORRECT. NOW, THE SHORT QUESTION BEFORE US IS WHAT SHOULD BE THE ADD ITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS ON THE BASIS OF PEAK CRE DIT IN TWO BANK ACCOUNTS WITH HDFC BANK. THE LD. CIT(A) HAS NOT GIVEN THE WORKING / FIGURES WHILE DETERMINING THE PEAK CREDIT IN THE TWO BANK ACCOUNT S OF THE ASSESSEE. SHRI VISHAL MOHAN LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE LD. CIT(A) HAS NOT TAKEN INTO ACCOUNT THE ENTIRE WITHDRAWALS MADE AND RE-DEP OSITED IN ASSESSEES BANK ACCOUNT. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTA NCES OF THE PRESENT CASE, WE SET ASIDE THE ORDER OF CIT(A) AND REMAND THE LIMITE D ISSUE TO THE ASSESSING OFFICER WITH A DIRECTION TO RE-COMPUTE THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS ON THE BASIS OF PEAK CREDIT IN THE AF ORESAID BANK ACCOUNTS. THE ASSESSING OFFICER IS DIRECTED TO GIVE AN OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. IT IS ALSO MADE CLEAR THAT THE ADDITION, IF ANY, IS MADE BY THE ASSESSING OFFICER, THE SAME SHALL NOT EXCEED THE AMOUNT OF RS . 11,08,516/-. THUS, GROUND NO.1 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPO SES. 7. AS REGARDS THE GROUND NO.2 OF THE APPEAL, WE ARE OF THE VIEW THAT THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE HAS R IGHTLY NOT BEEN ADMITTED BY CIT(A). THE ASSESSEE SUBMITTED AN ADDITIONAL EVIDE NCE IN THE FORM OF BANK ACCOUNT OF HER SON IN SUPPORT OF THE CLAIM THAT TH E SUM OF RS. 5 LAKHS WITHDRAWN FROM SONS ACCOUNT SHOULD BE CONSIDERED TOWARDS DEP OSIT OF CASH IN ASSESSEES ACCOUNT. IN OUR VIEW, THE SAID ADDITIONAL EVIDENCE IS NOT RELEVANT IN THIS MATTER, 6 BECAUSE DURING THE ASSESSMENT PROCEEDINGS THE ASSE SSEE CONTENDED THAT SHE HAS WITHDRAWN TOTAL CASH OF RS. 21,42,000/- OUT OF HER SAVING ACCOUNT AND OUT OF WHICH RS. 19,00,000/- WAS RE-DEPOSITED IN THE SAID ACCOUNT OUT OF THE CASH WITHDRAWN EARLIER. THE LD. COMMISSIONER HAS CORRECT LY OBSERVED THAT THE ASSESSEE HAS CHANGED HER STAND TAKEN EARLIER BEFORE THE ASSE SSING OFFICER WHICH IS NOT PERMISSIBLE. IN OUR CONSIDERED VIEW, THERE IS NO M ERIT IN THIS GROUND OF THE APPEAL AND ACCORDINGLY THE SAME IS DISMISSED. 8. NO OTHER POINT WAS RAISED OR ARGUED BEFORE US. 9. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 16 TH NOVEMBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR