ITO, UDAIPUR V. Shri Lokesh Choudahry, UDAIPUR

ITA 124/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70354 (ITAT-JODHPUR)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Keywords: Unexplained cash credit; Additional evidence; Reasonable cause; Corroborative evidences
• Section: 143(3); 68; 69

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 124/JODH/2013 (A.Y. 2009-10) ITO, WARD-2(1), VS. SHRI LOKESH CHOUDHARY, UDAIPUR. 1, KHUSI VILLA, GOKULPURA, UNIVERSITY ROAD, UDAIPUR. PAN NO. ACDPC 9384 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY : DR. DEEPAK SEHGAL- D.R. DATE OF HEARING : 12/11/2013. DATE OF PRONOUNCEMENT : 22/11/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 14/12/2012 OF LD. CIT (A), UDAIPUR. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN 1. DELETING THE ADDITIONS BY ADMITTING THE ADDITION AL EVIDENCES FILED BY THE ASSESSEE BY IGNORING THE PROVISION OF RULE 46A( 1) OF THE I.T. RULES 2 AND WITHOUT APPRECIATING THE FACT THAT NONE OF COND ITIONS MENTIONED IN RULE 46A OF THE I.T. RULE ARE SATISFIED IN THIS CASE. 2. DELETING THE DISALLOWANCE U/S 57 OF THE I.T. ACT OF RS. 5,34,876/- IGNORING THE FACT THAT IN SPITE OF REPEATED OPPORTU NITY GRANTED TO ASSESSEE, THE ASSESSEE FAILED TO FURNISH THE DETAIL S. 3. DELETING THE ADDITION OF RS. 40,54,807/- MADE O N ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69 OF THE I.T. ACT. 4. DELETING THE ADDITION OF RS. 4,97,300/- MADE U/S 69 OF THE I.T. ACT ON ACCOUNT OF EXPLAINED CASH DEPOSITS IN BANK ACCOUNT. 5. DELETING THE ADDITION OF RS. 78,08,750/- MADE ON ACCOUNT OF UNEXPLAINED CREDITORS U/S 68 OF THE I.T. ACT. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DEL ETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING. 2. VIDE GROUND NO.1, THE DEPARTMENT IS AGGRIEVED FOR THE ADMISSION OF THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE. 3. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 08/10/2010 DECLARING TOTAL INCOME OF R S. 3,09,484/-, WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) ON 10/08/2010. LATER ON, CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT AT INCOME OF RS. 1,32,05,220/- BY MAKING VARIOUS ADDITIONS. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND ALSO FILED AN APPLICATION DATED 27/07/20 12 UNDER RULE 46 A OF THE I.T. RULES 1962 (HEREINAFTER REFERRED TO AS TH E RULES IN SHORT) AND 3 FURNISHED CERTAIN DOCUMENTS. THE ASSESSEE REQUESTE D TO ADMIT THE DOCUMENTS AS ADDITIONAL EVIDENCE AND STATED THAT TH E ASSESSEE WAS PREVENTED BY THE SUFFICIENT CAUSE FROM PRODUCING TH OSE DOCUMENTS BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PRO CEEDINGS. LEARNED CIT(A) BEFORE TAKING DECISION ON THE ADMISSION OF T HE NEW DOCUMENTS/ EVIDENCES, SENT THE SAME TO THE ASSESSING OFFICER F OR HIS COMMENTS ON THE ADMISSIBILITY AND ON THE MERITS OF THE EVIDENCES. T HE ASSESSING OFFICER SUBMITTED HIS REMAND REPORT AND STATED THAT THE ADD ITIONAL EVIDENCES PRODUCED BY THE ASSESSING OFFICER MAY NOT BE ACCEPT ED AT THIS STAGE. THE LEARNED CIT(A) PROVIDED THE REMAND REPORT OF T HE ASSESSING OFFICER TO THE ASSESSEE ASKING HIM TO FILE REPLY. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THERE WAS A BONAFIDE REASON FOR NON- FILING OF THE EVIDENCES DURING THE ASSESSMENT PROCEEDINGS DUE TO DEFAULT OF THE COUNSEL. THEREFORE, ASSESSEE SHOULD NOT BE PENALIZE D AS HE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE IN FILING THE NE W/ADDITIONAL EVIDENCES. IT WAS FURTHER STATED THAT THE NEW EVIDENCES GOES T O THE ROOT OF GROUNDS OF APPEAL FILED BY THE ASSESSEE AND HIGHLY ESSENTIA L FOR IMPARTING THE JUSTICE. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER, OBS ERVED THAT THE 4 ASSESSING OFFICER OBJECTED THE ADMISSION OF THE ADD ITIONAL EVIDENCES ON THE GROUND THAT ASSESSEE WAS GIVEN SUFFICIENT AND R EASONABLE OPPORTUNITY TO PRODUCE ALL THE SUPPORTING EVIDENCES, BUT HE FAI LED TO AVAIL SUCH OPPORTUNITY. HE FURTHER OBSERVED THAT THE ASSESSEE HAD MADE OUT A CASE THAT NON-SUBMISSION OF THE NEW EVIDENCES WAS NOT AN OMISSION ON THE PART OF THE ASSESSEE, BUT IT WAS CLAIMED TO BE ON THE PA RT OF THE PREVIOUS AUTHORIZED REPRESENTATIVE. LEARNED CIT(A), ACCORDI NGLY, ADMITTED THE NEW EVIDENCES UNDER RULE 46A(1)(C) OF THE INCOME TA X RULES. NOW THE DEPARTMENT HAS CHALLENGED THE ADMISSION OF NEW EVID ENCES. 5. LEARNED D.R. REITERATED THE CONTENTION OF THE ASSE SSING OFFICER MENTIONED IN HIS REMAND REPORT WHILE LEARNED COUNSE L FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) AND SUPPORTED THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE. 6 . AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PAR TIES AND THE MATERIAL AVAILABLE ON THE RECORD, IT APPEARS THAT T HE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN FURNISHING ADDITIO NAL EVIDENCES DURING THE ASSESSMENT PROCEEDINGS BECAUSE, THE THEN COUNSE L OF THE ASSESSEE, WHO WAS GIVEN SUCH DOCUMENTS, DID NOT FURNISH THE S AME TO THE ASSESSING OFFICER. IT IS WELL SETTLED THAT THE POWERS OF LEAR NED CIT(A) ARE CO- 5 TERMINUS WITH THOSE OF THE ASSESSING OFFICER AND EX PLANATION TO SECTION 251 OF THE ACT PROVIDES THAT THE LEARNED CIT(A) MA Y ADMIT NEW EVIDENCES WHILE DECIDING THE APPEAL. IN THE PRESENT CASE, TH E LEARNED CIT(A) WHILE EXERCISING HIS POWERS UNDER SUB-SECTION (4) & (5) O F SECTION 250 OF THE ACT, ADMITTED THE NEW EVIDENCES UNDER RULE 46A(1) O F THE RULES. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF T HE DEPARTMENTAL APPEAL. 7. GRIEVANCE OF THE DEPARTMENT VIDE GROUND NO.2 RELATE S TO THE DELETION OF DISALLOWANCE OF RS. 5,34,876/- MADE BY THE ASSESSING OFFICER UNDER SECTION 57 OF THE ACT. 8. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE A SSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS, NOTICED THAT THE ASSESSEE SHOWN INTEREST RECEIPTS OF RS. 6,08,221/-, AGAINST WHICH, INTEREST PAYMENTS OF RS. 5,34,876/- HAD BEEN CLAIMED UNDER SECTION 57 OF THE ACT AND THE BALANCE AMOUNT OF INTEREST OF RS. 73,345/- HAD BEEN DECLARED AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER ASKED TH E ASSESSEE TO JUSTIFY THE CLAIM. IN RESPONSE TO THAT, THE ASSESSEE SUBMI TTED THAT INTEREST OF RS. 4,89,268/- HAD BEEN PAID TO SBBJ, MIA, UDAIPUR ON OVER DRAFT ACCOUNT AND THE INTEREST HAD BEEN DEBITED ON MONTHLY BASIS. IN SUPPORT OF THIS, 6 THE ASSESSEE FILED COPY OF THE BANK STATEMENT. AS REGARDS TO THE BALANCE AMOUNT OF INTEREST PAYMENT, IT WAS STATED THAT THE SAME HAD BEEN PAID TO ICICI BANK ON CAR LOAN. IT WAS FURTHER STATED T HAT THE INTEREST PAID WAS TO SBBJ ONLY AND THE FUND WITHDRAWN FROM THE BANK H AD BEEN INVESTED IN THE BUSINESS. HOWEVER, ASSESSING OFFICER DID NOT FI ND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND DISALLOWED THE INTE REST EXPENSES CLAIMED AT RS. 5,34,876/-. 9. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND THE SUBMISSIONS MADE HAD BEEN INCORPORAT ED IN PARA 3.2 OF THE IMPUGNED ORDER, FOR THE COST OF REPETITION, THE SAM E ARE NOT REPRODUCED HEREIN. LEARNED CIT(A) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAD RECEIVED PERSONAL SE GMENT ADVANCE LOAN OVERDRAFT FACILITY OF RS. 45,00,000/- FROM SBBJ, MI A, UDAIPUR, WHICH WAS VERIFIABLE FROM THE SANCTION ORDER OF THE BANK DATE D 02/01/2008. OUT OF SUCH OVERDRAFT FACILITY, THE ASSESSEE HAD ADVANCED LOAN OF RS. 30,50,000/- THROUGH A/C PAYEE CHEQUES TO M/S. AMBER VELLEY PROM PART PVT. LTD. AND THE SAID AMOUNT WAS SHOWN AS UNSECURED LOAN IN THE BALANCE SHEET. THE ASSESSEE CHARGED INTEREST @ 18% WHICH RESULTED IN T HE RECEIPT OF INTEREST OF RS. 5,49,000/- FROM THE SAID COMPANY. THE ASSES SEE ALSO DECLARED INTEREST INCOME OF RS. 59,221/-, WHICH WAS CLAIMED TO HAVE BEEN 7 RECEIVED ON THE LOAN ADVANCED AMOUNTING TO RS. 3,29 ,000/- TO THE RELATIVES, FRIENDS AND KNOWN PERSONS. THUS, THE AS SESSEE DECLARED TOTAL INTEREST INCOME OF RS. 6,08,221/-. LEARNED CIT(A) FURTHER OBSERVED THAT INTEREST PAID TO THE BANKER BY THE ASSESSEE COULD B E SAID TO HAVE DIRECT NEXUS WITH THE BUSINESS ACTIVITY BECAUSE, THE ASSES SEE HAD DECLARED INTEREST INCOME EARNED BY HIM ON SUCH OVERDRAFT AND , THEREFORE, IT COULD BE SAID THAT OVERDRAFT AMOUNT RECEIVED BY THE ASSES SEE HAD BEEN UTILIZED FOR THE BUSINESS PURPOSES. HE FURTHER OBSERVED THA T THE ASSESSEE HAD CLAIMED SUCH EXPENSES AGAINST THE INTEREST RECEIPTS SHOWN ON SUCH OVERDRAFT AMOUNT AND THERE WAS A SURPLUS AMOUNT OF INTERESTS, WHICH HAD BEEN OFFERED FOR TAXATION. LEARNED CIT(A), ACCORDIN GLY, DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. NOW TH E DEPARTMENT IS IN APPEAL. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSES SEE WAS HAVING PERSONAL SEGMENT ADVANCE LOAN OVERDRAFT FACILITY OF RS. 45,0 0,000/- AND PAID INTEREST OF RS. 5,34,876/- ON THE SAID OVERDRAFT. THE ASSESSEE ADVANCED LOAN OF RS. 30,50,000/- TO M/S. AMBER VELLEY PROMPA RT PVT. LTD. AND CHARGED INTEREST @ 18%, WHICH RESULTED IN RECEIPTS OF RS. 5,49,000/-. THE 8 ASSESSEE ALSO GAVE ANOTHER LOAN, AMOUNTING TO RS.3, 29,000/-, TO RELATIVES, FRIENDS ETC. AND EARNED RS. 59,221/-, SO IT WAS CLE AR THAT THE ASSESSEE EARNED RS. 6,08,221/- ON THE AMOUNT ADVANCED OUT O F THE OVERDRAFT LIMIT AND PAID INTEREST OF RS. 5,34,876/- ON THE SAID OVE RDRAFT. THEREFORE, THE INCOME EARNED BY THE ASSESSEE WAS MORE THAN THE EXP ENDITURE CLAIMED AS SUCH, NO DISALLOWANCE WAS CALLED FOR AND THE LEARNE D CIT(A) WAS FULLY JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 11. THE NEXT ISSUE VIDE GROUND NO.3 RELATES TO THE DELE TION OF ADDITION OF RS. 40,54,807/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT UNDER SECTION 69 OF THE ACT. 12. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE A SSESSING OFFICER NOTICED THAT THE ASSESSEE HAD EARNED INTEREST INCOM E OF RS. 6,08,221/-. HE ASKED THE ASSESSEE TO FURNISH THE DETAILS OF INT EREST INCOME ALONG WITH THE DETAILS OF THE DEBTORS FROM WHOM SUCH INTEREST INCOME WAS RECEIVED. SINCE, THE ASSESSEE FAILED TO FILE THE DETAILS AS A SKED FOR, THE ASSESSING OFFICER ESTIMATED THE INVESTMENT AT RS. 40,54,807/- ON THE BASIS OF INTEREST INCOME DECLARED AT RS. 6,08,221/- BY CONSI DERING THAT THE ASSESSEE MIGHT HAVE EARNED INTEREST @ 15%. 9 13. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND THE SUBMISSIONS MADE HAD BEEN INCORPORA TED IN PARA 5.2 OF THE IMPUGNED ORDER WHICH ARE NOT REPRODUCED HEREIN AT THE COST OF REPETITION. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE OBSERVED THAT THE ASSESSEE ADVANCED A SUM OF RS. 30 ,50,000/- TO M/S. AMBER VELLEY PROPMART PVT. LTD. AND CHARGED INTERES T @ 18%. HE FURTHER OBSERVED THAT THE LOAN TAKEN BY THE SAID COMPANY WA S REFLECTED IN ITS AUDITED BALANCE SHEET AND THE INTEREST DECLARED BY THE ASSESSEE HAD BEEN ACCEPTED BY THE ASSESSING OFFICER. LEARNED CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFICER HAD NOT DISPUTED THE LOANS TA KEN BY THE ASSESSEE FROM SBBJ, MIA, UDAIPUR AND CHARGING OF INTEREST @ 18% HAD BEEN ACCEPTED. HE ALSO OBSERVED THAT THE ASSESSEE DECLA RED INTEREST INCOME OF RS. 59,221/- ON THE LOAN ADVANCED TO THE RELATIV ES, FRIENDS AND OTHER KNOWN PERSONS WHICH HAD ALSO BEEN STATED TO BE OUT OF THE PERSONAL LOAN RECEIVED FROM THE BANK, AMOUNTING TO RS. 45,00,000/ -. LEARNED CIT(A) WAS OF THE VIEW THAT THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD TO SHOW THAT THE LOAN TAKEN BY THE ASSESSEE AMOUNTING TO RS.45,00,000/- FROM SBBJ, MIA, UDAIPUR HAD NOT BEEN UTILIZED FOR G IVING THE ABOVE MENTIONED LOANS AND THE SAME HAD BEEN INVESTED/SPEN T FOR OTHER 10 PURPOSES. HE, THEREFORE, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 14. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING O FFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A). 15. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES, WE ARE OF THE VIEW THAT THE PRESENT ISSUE IS CO-RELATED WITH THE ISSUE AGITATED IN GROUND NO.2 BY THE DEPARTMENT. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS HAVING PERSONAL OVERDRAFT LOAN, AM OUNTING TO RS. 45,00,000/- FROM SBBJ, MIA, UDAIPUR, WHICH WAS UTIL IZED FOR GIVING LOAN OF RS. 30,50,000/- TO M/S. AMBER VELLEY PROPMART PVT. LTD. AND RS. 3,29,000/- WAS USED FOR GIVING LOAN TO THE FRIENDS AND RELATIVES. THEREFORE, THE SOURCE OF LOAN WAS KNOWN, WHICH WAS UTILIZED FOR GIVING ADVANCES/LOANS FROM WHICH INTEREST AMOUNTING TO RS. 6,08,221/- WAS RECEIVED. THEREFORE, THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER WITHOUT ANY BASIS AND MERELY ON SUMMARIZE A ND CONJECTURE WAS NOT JUSTIFIED AND IT IS NOT TENABLE IN THE EYES OF LAW. ACCORDINGLY, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. 11 16. THE NEXT ISSUE VIDE GROUND NO.4 RELATES TO THE DELE TION OF ADDITION OF RS. 4,97,300/- MADE BY THE ASSESSING OFFICER UND ER SECTION 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE B ANK. 17. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE A SSESSEE MAINTAINED TWO ACCOUNTS IN SBBJ, MIA, UDAIPUR AND THERE WAS HU GE DEPOSITS IN THE SAID BANK ACCOUNTS. THE ASSESSING OFFICER NOTICED THAT ON 09/06/2008 THERE WAS A NEGATIVE CASH BALANCE OF RS. 97,300/- I N THE ACCOUNT NO. 61036494981. THE ASSESSING OFFICER ALSO NOTICED TH AT THERE WAS A DEPOSIT OF RS. 2,00,000/- ON 06/06/2008 IN BANK ACCOUNT NO. 61036476371 AND ANOTHER DEPOSIT OF RS. 2,00,000/- ON 06/06/2008 IN THE BANK ACCOUNT NO. 1450301110693 MAINTAINED WITH ICICI BANK. THE ASSE SSING OFFICER CONSIDERED THE ABOVE SAID AMOUNT OF RS. 4,97,300/- (RS. 2,00,000/- + RS. 2,00,000/- + 97,300/-) AS INCOME OF THE ASSESSEE UN DER SECTION 69 OF THE ACT BY OBSERVING THAT THE ASSESSEE DID NOT FILE ANY EXPLANATION. 18. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED AND THE EXPLANATION GIVEN HAS BEEN MENTIONED IN PAR A 5.2 OF THE IMPUGNED ORDER, FOR THE COST OF REPETITION, THE SAM E IS NOT REPRODUCED HEREIN. LEARNED CIT(A) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE OBSERVED THAT THE CASH DEPOSIT AMOUNTING TO RS.2,00 ,000/- EACH IN THE 12 BANK ACCOUNT NO. 61036476371 MAINTAINED WITH SBBJ, MIA, UDAIPUR AND ACCOUNT NO. 1450301110693 WITH ICICI BANK WAS OUT O F THE ADVANCE RECEIVED IN CASH FROM SHRI UDAILAL CHOUDHARY OF DHA RIAWAD AGAINST SALE OF RESIDENTIAL PLOT AND IN SUPPORT OF THE SAME, THE AS SESSEE FILED COPY OF SALE AGREEMENT DATED 10/05/2008. LEARNED CIT(A) CA TEGORICALLY STATED THAT AS PER THE SAID AGREEMENT, SHRI UDAILAL CHOUDH ARY HAD GIVEN RS. 6,00,000/- TO THE ASSESSEE IN CASH ON THE DATE OF E XECUTION OF SALE AGREEMENT I.E. ON 10/05/2008 AND DEPOSIT IN THE BAN K ACCOUNTS WAS ON 06/06/2008, WHICH WAS SUBSEQUENT TO THE RECEIPTS OF ADVANCE IN CASH AGAINST THE SALE OF RESIDENTIAL PLOT. LEARNED CIT( A) OBSERVED THAT IT WAS NOT A CASE OF THE ASSESSING OFFICER THAT ASSESSEE S PENT THE ABOVE CASH FOR OTHER PURPOSES AND NO CASH WAS AVAILABLE TO MAKE DE POSIT IN THE BANK ACCOUNT. HE, THEREFORE, HELD THAT THE ADDITION MAD E BY THE ASSESSING OFFICER AS UNEXPLAINED DEPOSIT IN BANK WAS NOT SUST AINABLE. AS REGARDS TO THE ADDITION OF RS. 97,300/- DUE TO SHORT FALL OF C ASH IN BANK ACCOUNT NO. 6136494981, LEARNED CIT(A) OBSERVED THAT THE ASSESS EE DEPOSITED A SUM OF RS. 1,70,000/- ON 09/06/2008, OUT OF CASH RECEIV ED AS ADVANCE FOR SALE OF RESIDENTIAL PLOT AND THE ASSESSING OFFICER HAD N OT CONSIDERED THE DEPOSIT WHILE ARRIVING AT THE NEGATIVE FIGURE OF RS . 97,300/-, WHICH WAS ADDED UNDER SECTION 69 OF THE ACT. LEARNED CIT(A), ACCORDINGLY, DELETED 13 THE ADDITION MADE BY THE ASSESSING OFFICER. NOW TH E DEPARTMENT IS IN APPEAL. 19. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CA SE, IT APPEARS THAT NEGATIVE BALANCE IN BANK ACCOUNT NO. 6136494981 WIT H SBBJ, MIA, UDAIPUR AMOUNTING TO RS. 97,300/- WAS WRONGLY CONSI DERED BY THE ASSESSING OFFICER BY IGNORING THIS FACT THAT THE AS SESSEE HAD DEPOSITED A SUM OF RS. 1,70,000/- ON 09/06/2008, WHICH WAS CONS IDERED BY THE ASSESSING OFFICER. IF THE SAID AMOUNT WAS TO BE CO NSIDERED, THERE WAS A POSITIVE BALANCE AND NOT THE NEGATIVE BALANCE AS ST ATED BY THE ASSESSING OFFICER. AS REGARDS TO THE REMAINING AMOUNT OF RS. 4,00,000/- DEPOSITED IN SBBJ AND ICICI BANK AMOUNTING TO RS. 2,00,000/- EACH IS CONCERNED, LEARNED CIT(A) HAS GIVEN CATEGORICAL FINDING THAT T HE ASSESSEE RECEIVED CASH OF RS. 6,00,000/- FROM SHRI UDAILAL CHOUDHARY ON ACCOUNT OF SALE OF PLOT AND THE SAID FACT WAS MENTIONED IN THE SALE AG REEMENT DATED 10/05/2008. THE ASSESSEE DEPOSITED THE AFORESAID A MOUNT OF RS. 2,00,000/- EACH IN THE BANK ACCOUNT ON 06/06/2008, WHICH WAS SUBSEQUENT TO THE DATE OF RECEIPT I.E. 10/05/2008 A ND IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE UTILIZED THE SAID AMOUNT OF RS. 6,00,000/- ELSEWHERE AND NOT IN DEPOSITING IN THE A BOVE SAID TWO BANK 14 ACCOUNTS. WE, THEREFORE, ARE OF THE VIEW THAT THE ASSESSING OFFICER MADE THE ADDITION WITHOUT APPRECIATING THE FACTS IN RIGH T PERSPECTIVE AND THE LEARNED CIT(A) WAS FULLY JUSTIFIED IN DELETING THE IMPUGNED ADDITION. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF T HE DEPARTMENTAL APPEAL. 20. THE LAST ISSUE AGITATED VIDE GROUND NO.5 RELATES TO THE DELETION OF ADDITION OF RS. 78,08,750/- MADE BY THE ASSESSING O FFICER UNDER SECTION 68 OF THE ACT. 21. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE A SSESSEE FILED COPY OF BANK STATEMENT OF ACCOUNT NO. 610364494981 MAINT AINED WITH SBBJ, MIA, UDAIPUR WHICH REVEALED THE FOLLOWING ENTRIES/D EPOSITS CLAIMED TO HAVE BEEN RECEIVED FROM THE PERSONS/CONCERNS MENTIO NED AGAINST EACH OF THE FOLLOWING ENTRY:- DATE DATE SHOWN BY THE ASSESSEE AMOUNT CLAIMED BY THE ASSESSEE HAVING BEEN RECEIVED FROM 11/04/2008 12/04/2008 RS. 2,00,000 SHRI GANESH LAL CHOUDHARY 21/04/2008 22/04/2008 RS. 1,00,000 SHRI ANIL JAIN 08/05/2008 08/05/2008 RS. 7,00,000 SHRI KAILASH CH ANDRA CHOUDHARY 08/05/2008 09/05/2008 RS. 1,00,000 - DO - 03/06/2008 03/06/2008 RS. 19,75,000 M/S. DUGAR MINE RALS & CHEMICALS 05/06/2008 06/06/2008 RS. 3,80,000 M/S. JAI BHERU NATH LOADERS 15 17/06/2008 17/06/2008 RS. 10,00,000 SHRI NEEL KAMAL AJMERA 25/06/2008 26/06/2008 RS. 02,00,000 M/S. VARDHMAN M INERALS 12/08/2008 12/08/2008 RS. 05,00,000 SHRI OM PRAKASH CHAUDHARY & JASODA 08/09/2008 09/09/2008 RS. 08,00,000/- SHRI KEM RAJ DANGI 26/09/2008 27/09/2008 RS. 01,60,000 SHRI PANKAJ JAI N 21/10/2008 21/10/2008 RS. 00,50,000 M/S. VARDHMAN M INERALS 21/10/2008 21/10/2008 RS. 00,90,000 M/S. VARDHMAN M INERALS 31/10/2008 01/11/2006 RS. 04,63,750 SHRI OMPRAKASH CHOUDHARY 08/11/2008 08/11/2008 RS. 00,95,000 SHRI MOGRAJI 17/11/2008 18/11/2008 RS. 02,50,000 SHRI GANESH LAL CHOUDHARY 10/12/2008 10/12/2008 RS. 00,20,000 M/S. DUGAR MINE RALS & CHEMICALS 14/12/2009 14/03/2009 RS. 2,25,000 M/S. DUGAR MINER ALS & CHEMICALS TOTAL 73,08,750 ICICI BANK (PREVIOUSLY BANK OF RAJASTHAN) ACCOUNT N O. 1450301110693 27/06/2008 RS.2,00,000 M/S. VARDHMAN MINERALS 14/11/2008 RS. 3,00,000 SHRI TARENDERA KUMAR JAIN TOTAL 78,08,750 22. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE CREDITORS ALONG W ITH CAPITAL ACCOUNT, BALANCE SHEET AND RELEVANT BANK ACCOUNT STATEMENTS FROM WHICH TRANSACTIONS WERE MADE. THE ASSESSING OFFICER MENT IONED THAT ASSESSEE DID NOT FILE THE DETAILS, HE THEREFORE, REQUIRED TH E ASSESSEE TO SHOW-CAUSE AS TO WHY THE CREDIT ENTRIES SHOULD NOT BE TREATED AS UNEXPLAINED CREDIT. THE SUBMISSIONS OF THE ASSESSEE BEFORE THE ASSESSIN G OFFICER WAS THAT THE CREDIT ENTRIES IN THE BANK ACCOUNTS WERE FROM THE C REDITORS REFERRED TO IN REPLY DATED 12/12/2011 WERE LOANS AND ADVANCES FROM FRIENDS AND RELATIVES. THE ASSESSING OFFICER, HOWEVER, DID NO T ACCEPT THE CONTENTION 16 OF THE ASSESSEE BY STATING THAT THE ASSESSEE WAS NO T HAVING ANY OTHER DECLARED SOURCE OF INCOME/ACTIVE BUSINESS EXCEPT SH ARE OF PROFIT, INTEREST ON CAPITAL AND PARTNERS REMUNERATION AND INCOME FR OM INTEREST. THE ASSESSING OFFICER DID NOT ACCEPT THE SELF SIGNED CO NFIRMATION AND TREATED THE CREDIT ENTRIES AS MENTIONED ABOVE AMOUNTING TO RS. 78,08,750/- AS UNEXPLAINED CREDITS UNDER SECTION 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 23. B EING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED THAT BOOK OR BOOKS SIGNIFIES A COLLECTION OF SHEETS OF PAPER BOUND TOGETHER IN A MANNER WHICH CANNOT BE DI STURBED OR ALTERED EXCEPT BY TEARING THEM APART AND THE ASSESSEE MAINT AINED BOOKS OF ACCOUNTS FOR HIS PREVIOUS YEAR. IN THE SAID BOOKS OF ACCOUNTS, CASH CREDIT ENTRIES APPEARED AND THE ASSESSING OFFICER MADE THE ADDITION CONSIDERING THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. IT WAS FURTHER STATED THAT THE PROVISIONS OF SECTION 68 OF THE ACT COMES TO OPERATION ONLY WHEN THE ASSESSEE MAINTAINED THE BOOKS OF ACCOUNTS AND C REDIT ENTRY OCCURRED IN SUCH BOOKS OF ACCOUNTS BUT WHERE THE ASSESSEE HA D NOT MAINTAINED THE BOOKS OF ACCOUNT, THERE WAS NO LEGAL SCOPE OF THE A SSESSING OFFICER TO INVOKE THE PROVISIONS OF SECTION 68 OF THE ACT. RE LIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 17 1. ACIT VS. SATYAPAL WASSAN (2007) 295 ITR (AT) 352 (JAB.) 2. CBI VS. V.C. SHUKLA (1998) 3 (SC) 410 (SC) 3. SMT. MADHU RAITANI VS. ACIT (2011) 45 SOT 231 ( GAU) TM 4. CIT VS. BHAICHAND H GANDHI (1983) 141 ITR 67 (B OM.) 5. CIT VS. TAJ BOREWELLS (2007) 291 ITR 232 (MAD.) 6. SMT. SHANTA DEVI VS. CIT (1998) 171 ITR 532 (P & H) 24. THE ASSESSEE SUBMITTED THAT HE HAD RECEIVED A SUM O F RS. 22,20,000/- FROM PARTNERSHIP FIRM AS PER HIS REQUIR EMENTS OF FUND REFLECTING THEM IN HIS CAPITAL ACCOUNT. IT WAS FUR THER STATED THAT THE ASSESSEE HAD MADE ALL THE ABOVE TRANSACTIONS THROUG H BANKING CHANNEL AND EXPLAINED THE NATURE AND SOURCES OF BANK DEPOSI T IN HIS BANK STATEMENT. LEARNED CIT(A) HAD DISCUSSED EACH AND E VERY ENTRY AT PAGES NO. 36 TO 50 IN THE IMPUGNED ORDER. HE ALSO RELIED ON JUDICIAL PRONOUNCEMENTS WHICH WERE MENTIONED AT PAGE 52 TO 5 3 OF THE IMPUGNED ORDER. IT WAS CONTENDED THAT THE DEPARTMENT HAD NO T PLACED ANY RECORD OR ADVERSE MATERIAL AND CONCRETE EVIDENCE THAT THE BANK CREDITS APPEARING IN THE BANK STATEMENT WERE FALSE OR NOT R EAL. IT WAS CONTENDED THAT THE PROVISIONS OF SECTION 68 OF THE ACT HAD NO APPLICATION, SO THERE WAS NO QUESTION FOR DISCHARGING THE BURDEN OF ONUS ON THE ASSESSEE UNDER SECTION 68 OF THE ACT. LEARNED CIT(A) ASKED THE RE MAND REPORT OF THE ASSESSING OFFICER AND AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE 18 AND THE REMAND REPORT OF THE ASSESSING OFFICER, DIS CUSSED EACH AND EVERY ENTRY IN PARA 6.3 OF THE IMPUGNED ORDER. LEARNED C IT(A) OBSERVED THAT THE ASSESSEE FURNISHED CONFIRMATION FROM THE PARTIE S AND ALSO HAD GIVEN PAN OF THE CREDITORS ALONG WITH COMPLETE ADDRESSES, WHICH WERE SENT TO THE ASSESSING OFFICER FOR EXAMINATION AND HIS COMME NTS. HOWEVER, THE ASSESSING OFFICER HAD NOT GIVEN ANY COMMENT ON THIS ISSUE, WHICH CLEARLY INDICATES THAT THERE WAS NOTHING ON RECORD, CONTRAR Y TO THE SUBMISSIONS OF THE ASSESSEE. HE ALSO OBSERVED THAT THE ASSESSEE W AS HAVING REGULAR TRANSACTIONS WITH FEW OF THE ABOVE SAID PARTIES AND THAT THE ADDITION UNDER SECTION 68 OF THE ACT CAN ONLY BE MADE IN RES PECT OF ANY CREDIT FOUND RECORDED IN THE BOOKS OF ACCOUNTS, WHICH WAS REMAINED UNEXPLAINED, BUT THE CASE OF THE ASSESSEE WAS OF N O BOOKS OF ACCOUNTS AND THEREFORE, THE ADDITION UNDER SECTION 68 OF THE ACT COULD NOT BE MADE ON ACCOUNT OF UNEXPLAINED CREDIT ENTRIES FOUND RECORDED IN THE BANK ACCOUNT OF THE ASSESSEE. RELIANCE WAS PLACED ON THE DECISION OF ITAT, JODHPUR BENCH IN THE CASE OF INTERNATIONAL GU WAR GUM & CHEMICALS IN I.T.A.NO. 1670 (JP) OF 1994 FOR THE A.Y. 1992-9 3 DATED 31/01/2002 (2003) SOT 240 (JODH), WHEREIN IT HAS BEEN HELD IF THAT THE AMOUNT WAS FOUND DIRECTLY CREDITED TO BANK ACCOUNT AND NOT FOU ND CREDITED IN BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE, IT WOULD NOT ATT RACT PROVISIONS OF 19 SECTION 68. THE LEARNED CIT(A) ALSO REFERRED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI (1982) 11 TAXMAN 59, WHEREIN IT HAS BEEN HELD AS UNDER:- WHEN MONEYS ARE DEPOSITED IN A BANK, THE RELATION SHIP THAT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF THE DEBTOR AND CREDITOR AND NOT OF TRUSTEE AND BENEFICIARY. A PPLYING THIS PRINCIPLE, THE PASS BOOK SUPPLIED BY THE BANK TO ITS CONSTITUE NT IS ONLY A COPY OF THE CONSTITUENTS ACCOUNT IN THE BOOKS MAINTAINED B Y THE BANK. IT IS NOT AS IF THE PASS BOOK IS MAINTAINED BY THE BANK AS TH E AGENT OF THE CONSTITUENT, NOR CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS OF THE CONSTITUENT. TH EREFORE, THE PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE IN THE PR ESENT CASE COULD NOT BE REGARDED AS A BOOK OF THE ASSESSEE NOR A BOOK MA INTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS. AS SUCH, ADDIT ION UNDER S. 68 OF THE AMOUNT ENTERED ONLY IN THE BANK PASS BOOK WAS NOT J USTIFIED. 25. LEARNED CIT(A) HELD THAT THE ADDITION IN RESPECT OF UNEXPLAINED ENTRIES FOUND RECORDED IN THE BANK ACCOUNT SHOULD H AVE BEEN MADE UNDER SECTION 69 AND NOT UNDER SECTION 68 OF THE ACT IF THE CASH CREDITS ARE NOT EXPLAINED. LEARNED CIT(A) FURTHER OBSERVED THAT ALL THE CREDIT ENTRIES HAVE BEEN CONSIDERED AND DISCUSSED INDIVIDUALLY WHI CH HAD BEEN TREATED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AND THA T THE ASSESSING OFFICER IN HIS REMAND REPORT HAD NOT GIVEN ANY ADVERSE INFE RENCE. LEARNED CIT(A) ACCORDINGLY, DELETED THE ADDITION MADE BY TH E ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 20 26. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING O FFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BY THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGN ED ORDER PASSED BY THE LEARNED CIT(A). 27. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT TH E ENTRIES APPEARING IN THE BANK PASSBOOK OF THE ASSESSEE WERE ADDED BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT AND N OT UNDER SECTION 69 OF THE ACT. IT IS WELL SETTLED THAT THE BANK PASSBOOK CANNOT BE CONSIDERED AS BOOKS OF ACCOUNTS, THEREFORE THE ENTRIES IN QUESTIO N APPEARING ONLY IN THE BANK PASSBOOK AND NOT IN THE BOOKS OF ACCOUNTS, CAN NOT BE ADDED UNDER SECTION 68 OF THE ACT. THE PASSBOOK OF THE ASSESSE E COULD NOT BE CONSIDERED AS A BOOK OF THE ASSESSEE NOR BOOK AS MA INTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTION AS PER THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H GANDHI (SUPRA). MOREOVER, THE ASSESSEE EXPLAINED EACH AND EVERY TRA NSACTION BEFORE THE LEARNED CIT(A) AND HAD ALSO GIVEN PAN OF THE PARTIE S. ASSESSEE ALSO FILED COPY OF CONFIRMATION OF TRANSACTION. THE ASSESSING OFFICER IN HIS REMAND REPORT HAD NOT GIVEN ANY ADVERSE COMMENT. THEREFOR E, THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED AND THE LEARNED CIT(A) RIGHTLY DELETED THE SAME. 21 28. MOREOVER, THE LEARNED CIT(A) DELETED THE IMPUGNED ADDITION BY FOLLOWING THE DECISION OF THIS BENCH OF THE TRIBUNA L IN THE CASE OF INTERNATIONAL GUWAR GUM & CHEMICALS (2003) SOT 240 (JODH). WE, THEREFORE, BY CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 29. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSE D. (ORDER PRONOUNCED IN THE COURT ON 22 ND NOVEMBER, 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND NOVEMBER , 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.