Mrs. Renu Kumari, Bhagalpur V. I.T.O., Bhagalpur

ITA 123/PAT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1195 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R AJESH KR MISHRA
• Assessee Lawyers: A K RASTOGI
• Keywords: Deemed to accrue or arise in india
• Section: 133(6); 68

Judgement Text

1 ITA NO. 123/PAT/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 123/PAT/2014. ASSESSMENT YEAR : 2006 - 07. MRS. RENU KUMARI, THE INCOME - TAX OFFICER, SABOUR, BHAGALPUR. VS. WARD - 1(2), BHAGALPUR. APPELLANT. RESPONDENT. APPELLANT BY : SHRI A.K. RASTOGI AND SHRI RAKESH KUMAR. RESPONDENT BY : SHRI R AJESH KR. MISHRA. DATE OF HEARING : 01 - 08 - 2016 DATE OF PRONOUNCEMENT : 19 TH AUGUST, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, PATNA DATED 1 9 - 05 - 2014 AND PERTAINS TO ASSESSMENT YEAR 200 6 - 07 . THE GROUNDS OF APPEAL READ AS UNDER : 1. FOR THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN AFFIRMING THE ADDITION OF RS.3,04,504/ - AS UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT IS WRONG, ILLEGAL AND U NJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. 2. FOR THAT THE ORDER PASSED BY CIT(APPEALS) IS BAD IN FACTSOF THE CASE AND FIT TO BE MODIFIED. 2. IN THIS CASE THE AO NOTED THAT THE COPY OF ASSESSEES BANK STATEMENT WAS OBTAINED U/ S 133(6) FROM STATE BANK OF INDIA, CITY BRANCH, BHAGALPUR. IN THE SAID BANK ACCOUNT FOLLOWING SUM WAS DEPOSITED IN CASH : 2 ITA NO. 123/PAT/2014. SL. NO. DATE A MOUNT 1 15.11.2005 67,000/ - 2 23.11.2005 90,000/ - 3. 07.12.2005 40,000/ - 4. 06.01.2006 1,00,000/ - 5. 13.01.2006 7,505/ - 6. 04.03.2006 27,000/ - TOTAL 3,31,505/ - THE ASSESSEE EXPLAINED THAT THE DEPOSITS WERE MADE FROM WITHDRAWALS FROM THE SAME BANK ACCOUNT. ON EXAMINING THIS SUBMISSION TH E AO OBSERVED AS UNDER : ON SCRUTINY OF THE BANK STATEMENT, IT TRANSPIRED THAT, THE WITHDRAWALS WERE MADE ON 26.09.2005 THROUGH THREE CHEQUES OF RS.1,00,000/ - EACH BUT THE AMOUNT WAS DEBITED THROUGH CLEARING FOR CREDITING IN THIRD PARTIES ACCOUNT. THE BANK FURNISHED THE PHOTOCOPIES OF THE INSTRUMENTS THROUGH WHICH THE CLEARING WAS MADE. IT HAS BEEN REVEALED THAT RS.2,00,000/ - WAS CREDITED IN THE ACCOUNT OF SHRI SHANKER PRASAD SINGH AND RS.1,00,000/ - WAS CREDITED IN THE ACCOUNT OF SMT. NEELAM RANI. IT MEANS THAT THE AMOUNT WAS NOT AVAILABLE WITH THE ASSESSEE IN CASH TO DEPOSIT IN THE BANK SUBSEQUENTLY. HOWEVER, A SUM OF RS.27,000/ - WAS WITHDRAWN ON 21.02.2006 WHI CH MAY COVER THE DEPOSIT OF THE SAME AMOUNT ON 04.03.2006. HENCE, THE DEPOSIT OF RS.27,000/ - OUT OF RS.3,31,505/ - IS TREATED AS EXPLAINED AND THE BALANCE AMOUNT OF RS.3,04,505/ - REMAINED UNEXPLAINED. SINCE, THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOU NTS, PROVISIONS OF SECTION 68 ARE NOT APPLICABLE IN HER CASE. BUT, IT DOES NOT CHANGE THE INTENT TO TAX THE AMOUNT. THE PROVISIONS OF SECTION 68 TO 69D ARE DEEMING PROVISIONS AND ARE PURELY CLARIFICATORY IN NATURE. IT HAS BEEN HELD THROUGH JUDICIAL PRONOUN CEMENTS THAT THESE SECTIONS EMBODY ONLY A RULE OF EVIDENCE. HENCE, THE UNEXPLAINED DEPOSITS OF RS.3,04,505/ - IS TREATED AS DEEMED INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 3. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) NOTED THE FACTS AND ASSESSEE S SUBMISSIONS AS UNDER : THE A.O. MADE AN ADDITION OF RS.3,04,505/ - ON THE GROUND THAT THE DEPOSITS WERE NOT COVERED OUT OF WITHDRAWALS MADE IS CHEQUE FORWARDING SHRI SHANKAR PD. SINGH AS NO NEXUS HAS BEEN ESTABLISHED BETWEEN THE TWO. THE APPELLANTS C LAIM THAT RS.3,00,000/ - GIVEN TO SRI SHANKAR PRASAD SINGH WAS REFUNDED IN CASH ON DIFFERENT DATES WAS NOT ACCEPTED AND EVEN 3 ITA NO. 123/PAT/2014. AN EXAMINATION OF SRI SHANKAR PRASAD SINGH DID NOT INSTILL CONFIDENCE REGARDING THE CLAIM OF THE APPELLANT. THE APPELLANT HAD SUBMI TTED THREE CHEQUES OF RS. 1,00,000/ - EACH WERE ISSUED IN FAVOUR OF SRI SHANKAR PRASAD SINGH AGAINST SUPPLY OF BUILDING MATERIALS AND AS THE BUILDING MATERIAL WAS NOT SUPPLIED THE SUM OF RS. 3,00,000/ - HAD BEEN REPAID INC ASH OVER A PERIOD OF TIME. DURING T HE EXAMINATION SRI SHANKAR PD. SINGH WAS NOT ABLE TO SUBMIT THE NAMES OF ANY OTHER PERSONS WITH WHOM HE HAD BUSINESS DEALINGS AS HISA BUSINESS HAD CLOSED DOWN QUITE SOME TIME BACK. IT HAS BEEN SUBMITTED THAT THE FACT REMAINS THAT THE SAME WAS RETURNED TO T HE APPELLANT AS THE BUILDING MATERIAL COULD NOT BE SUPPLIED. IT WAS REITERATED THAT IN THE CIRCUMSTANCES THE INFERENCES DRAWN BY THE A.O. WERE FIT TO BE OVER RULED AND THE DEPOSIT IS EXPLAINED OUT OF THE REFUND FROM SRI SHANKAR PRASAD SINGH. CONSIDERING T HE ABOVE, LEARNED CIT(APPEALS) HELD AS UNDER : THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDERED. NO NEXUS BETWEEN THE DEPOSITS IN THE BANK ACCOUNT AND THE PAYMENT MADE TO SRI SHANKAR SINGH HAS BEEN ESTABLISHED BY THE APPELLANT. IT IS A MATTER OF FAC T THAT PAYMENTS WERE MADE BY CHEQUES WHICH IMPLIES THAT SRI SHANKAR PD SINGH HAD A BANK ACCOUNT. IF REPAYMENT HAD TO BE MADE AGAINST THE GOODS NOT SUPPLIED THE SAME COULD HAVE BEEN THROUGH THE SAME BANK ACCOUNT. IN THE ENTIRETY OF CIRCUMSTANCES, THE CLAIM OF THE APPELLANT IS NOT CONSIDERED ACCEPTABLE AND THIS GROUND IS ACCORDINGLY REJECTED. 4 . AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5 . I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE IN THIS REGARD REITERATED THE SUBMISSIONS THAT THE AMOUNT WAS PAID TO SRI SHANKAR PRASAD SINGH FOR OBTAINING BUILDING MATERIAL AND SINCE HE COULD NOT SUPPLY THE MATERIAL, HE HAD REPAID THE AMOUNT IN CASH . LEARNED COUNSEL OF THE ASSESSEE IN THIS REGARD HAS SUBMIT TED THAT THE SAID PERSONS STATEMENT HAS BEEN RECORDED ON OATH AND HE HAS AFFIRMED REFUNDING OF RS.3,00,000/ - IN CASH. HENCE THE LEARNED COUNSEL PLEADED THAT THE FACT THAT THE ASSESSEE HAS GIVEN RS.3,00,000/ - TO SRI SHANKAR PRASAD SINGH IS ESTABLISHED. HE FURTHER REFERRED TO THE OBSERVATION OF THE LEARNED CIT(APPEALS) THAT THE REPAYMENT HAS NOT BEEN MADE BY CHEQUE WHICH COULD HAVE EASILY BEEN MADE AS MR. SINGH WAS OPERATING BANK ACCOUNT. IN THIS REGARD, HE SUBMITTED THAT SUSPICION HOWSOEVER STRONG CANNOT PARTAKE THE CHARACTER OF PROOF AND THERE NO MATERIAL/EVIDENCE ON RECORD 4 ITA NO. 123/PAT/2014. TO DISBELIEVE THE ASSERTION OF MR. SINGH IN THE STATEMENT ON OATH RECORDED ON 02 - 11 - 2012 AFFIRMING THE FACT OF REFUNDING RS.3,00,000/ - IN F.Y. 2005 - 06 IN CASH. HENCE, HE PLEADED THAT T HE REASON ASSIGNED BY CIT(APPEALS) IS FIT TO BE OVERRULED ESPECIALLY IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ADDL. COMMISSIONER OF INCOME - TAX VS. HANUMAN AGRAWAL REPORTED IN 151 ITR 150. REFERRING TO THE ABOVE, LEARN ED COUNSEL SUBMITTED THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE SOURCE OF DEPOSIT IN BANK ACCOUNT TO THE EXTENT OF RS.3,00,000/ - . 6 . PER CONTRA, LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT IF SRI SHANKAR PRASAD SINGH WAS THE SUPPLIER, THERE IS NO REASON WHY RS.2,00,000/ - WOULD BE PAID TO HIM AND RS. 1,00,000/ - TO HIS WIFE. HE FURTHER SUBMITTED THAT WHEN SRI SHANKAR PRASAD SINGH WAS EXAMINED BY THE REVENUE AUTHORITIES HE COULD NOT PROVIDE THE DETAILS OF HIS DEALING WIT H ANY OTHER PARTY. LEARNED D.R. FURTHER SUBMITTED THAT WHEN THE AMOUNT HAS BEEN PAID TO SRI SHANKAR PRASAD SINGH BY CHEQUE THEN IT CLEARLY MEANT THAT HE HAD A BANK ACCOUNT AND THE REPAYMENT COULD HAVE BEEN DONE BY CHEQUE. HENCE LEARNED D.R. PLEADED THAT T HE SUBMISSIONS OF THE ASSESSEE ARE SELF SERVING STATEMENTS AND CANNOT BE A BASIS OF REVERSING THE CONCURRENT FINDINGS OF THE AUTHORITIES BELOW. 7 . I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. AS PER THE UNDISPUTED FACTS OF THE CA SE THERE WAS CASH DEPOSIT OF RS.3,31,505 / - IN THE ASSESSEES BANK ACCOUNT AS UNDER : SL. NO. DATE AMOUNT 1 15.11.2005 67,000/ - 2 23.11.2005 90,000/ - 3. 07.12.2005 40,000/ - 4. 06.01.2006 1,00,000/ - 5. 13.01.2006 7,505/ - 6. 04.03.2006 27,000/ - TOTAL 3,31,505/ - 5 ITA NO. 123/PAT/2014. NOW ASSESSEES EXPLANATION IN THIS REGARD IS THAT THE ASSESSEE HAD PAID RS.2,00,000/ - BY CHEQUE TO ONE SRI SHANKAR PRASAD SINGH AND RS.1,00,000/ - BY CHEQUE TO HIS WIFE FOR SUPPLY OF BUILDING MATERIAL. SINCE THE SAID PERSON COULD NOT SUPPLY THE BUILDING MATERIAL HE HAD REPAID THE AMOUNT IN CASH WHICH WAS DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT. NOW I FIND THAT WHEN THE SAID SRI SHANKAR PRASAD SINGH WAS EXAMINE D BY THE REVENUE AUTHORITIES HE COULD NOT RECALL HAVING DEALT WITH ANY OTHER PERSON OTHER THAN THE ASSESSEE IN REGARD TO HIS SAID BUSINESS OF SUPPLYING BUILDING MATERIAL. FURTHER REVENUES CONTENTION IS ALSO COGENT THAT WHEN THE AMOUNT IS GIVEN BY CHEQUE, THE SAID PERSON WAS HAVING BANK ACCOUNT , THEN THERE IS NO REASON WHY HE HAS NOT RETURNED MONEY BY CHEQUE AND INSTEAD , MAKE PAYMENT IN CASH IN P IECE MEAL OVER A PERIOD OF FOUR MONTHS. THE ABOVE FACTS CLEARLY INDICATE THAT THE ASSESSEES SUBMISSIONS ARE DEV OID OF COGENCY . 8. W ITHOUT COGENTLY REBUTTING TO THE LEARNED CIT(APPEALS) FINDING THAT WHEN PAYMENT WAS RECEIVED BY CHEQUE IN HIS ACCOUNT BY SHRI SINGH, THERE IS NO REASON WHY HE WOULD MAKE THE REPAYMENT IN CASH , LEARNED COUNSEL OF THE ASSESSEE HAS TRIED TO SUPPORT THE ASSESSEES CASE BY SUBMITTING THAT SUSPICION HOWSOEVER IS STRONG CANNOT PARTAKE THE CHARACTER OF PROOF AND THAT THERE IS NO MATERIAL/EVIDENCE ON RECORD TO DISBELIEVE THE ASSERTION OF MR. SINGH. I FI ND THAT THIS IS NOT A CASE OF MERE SUSPICION IT IS A CLEAR CASE WHERE THE SUBMISSIONS OF THE ASSESSEE AND THE SAID SRI SHANKAR PRASAD SINGH HAVE NO COGENCY. THAT THE SO CALLED SUPPLIER OF BUILDING MATERIAL FORG O T THE NAME OF ALL HIS OTHER BUSINESS ASSOCIA TES EXCEPT THE ASSESSEE IS NOT ACCEPTABLE. DESPITE HAVING RECEIVED THE CHEQUE AMOUNT THE SAID PERSON WAS CLAIMING TO HAVE PAID THE AMOUNT IN CASH IN A MANNER WHICH IS NOT AT ALL COGENT. THE CASE LAW REFERRED BY THE LEARNED COUNSEL OF THE ASSESSEE IS NOT R ELEVANT INASMUCH AS IT IS ON A DIFFERENT SET OF FACTS. 6 ITA NO. 123/PAT/2014. 9. HONBLE APEX COURT IN THE CASE OF DURGA PRASAD MOR (82 ITR 540) AND SUMATI DAYAL (214 ITR 801 ) HAD EXPOUNDED THAT THE REVENUE AUTHORITIES ARE NOT SUPPOSED TO PUT ON BLIN KERS BUT HAVE TO TAKE INTO ACCOUNT THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY . IN THE FACTS OF THE PRESENT CASE THE ASSESSEE HAS BEEN FOUND TO HAVE DEPOSITED IN CASH RS.3,31,505/ - IN HER BANK ACCOUNT ON DIFFERENT DATES OVER A PERIOD OF FOUR MONTHS. SHE HAS TRIED TO JUSTIFY THE SAME BY SUBMITTING THAT RS.3,00,000/ - WERE PAID TO A PARTICULAR PERSON AND HIS WIFE FOR SUPPLY OF BUILDING MATERIAL BY CHEQUE AND SINCE HE COULD NOT SUPPLY THE BUILDING MATERIAL HAS REPAID THE AMOUNT IN CASH IN PIECE MEAL OVER FOUR MONTHS. THE SAID PERSON ON EXAMINATION BY REVENUE AUTHORITIES IS NOT EVEN ABLE TO RECALL ANY OTHER PERSON TO WHOM HE HAS SUPPLIED BUILDING MATERIAL IN HIS SO CALLED BUSINESS. IN THESE CIRCUMSTANCES IN MY CONSIDERED OPINION, THE FINDINGS OF THE AUTHORITIES BELOW ARE QUITE COGENT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF DEPOSIT OF RS.3,04,505/ - . IN THESE CIRCUMSTANCES I DO NOT FIND ANY INFIRMITY IN THE CONCURRENT FINDINGS OF THE AUTHORITIES BELOW. ACCORDINGLY I UPHOLD THE SAME. 10 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF AUGUST, 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. DATED: 19 TH AUGUST, 2016. 7 ITA NO. 123/PAT/2014. COPY FORWARDED TO : 1. MRS. RENU KUMARI, SABOUR, BHAGALPUR. 2. I.T.O., WARD - 1 (2) , BHAGALPUR. 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.