Sh. Lalit Kumar Agarwal, Agra V. I.T.O.-4(2), Agra

ITA 126/AGR/2012

• Counselvise Citation: 12620314 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: NAVIN GARGH
• Keywords: Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 126/AGRA/2012 ASSTT. YEAR : 2008-09 LALIT KUMAR AGARWAL, VS. INCOME-TAX OFFICER, B-30, SHALIMAR ENCLAVE, 4(2), AGRA. KAMLA NAGAR, AGRA. (PAN: ADEPA 6910 A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 27.11.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.11.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 22.12.2011 FOR THE ASSESSMENT YEAR 2008- 09, CHALLENGING THE ADDITION OF RS.23,66,646/- ON ACCOUNT OF UNEXPLAINED CASH DE POSIT IN AXIS BANK. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME AT RS.1,16,400/- FROM JOB WORK OF JEWELLERY. THE AO HA D INFORMATION THAT THE ASSESSEE WAS MAINTAINING A SAVING BANK ACCOUNT WITH AXIS BANK, SANJAY PLACE, AGRA WHEREIN DURING THE YEAR UNDER CONSIDERATION, T HERE WERE DEPOSITS TO THE EXTENT OF RS.23,66,645/-. THE ASSESSEE INITIALLY STATED BE FORE THE AO THAT DUE TO OVERSIGHT, ITA NO. 126/AGRA/2012 2 THIS ACCOUNT WAS NOT SHOWN IN THE RETURN OF INCOME AND THAT WHATEVER INCOME HAS BEEN EARNED FROM THE OPERATION OF THIS ACCOUNT, THE ASSESSEE IS PREPARED TO PAY TAX ON THE SAME. THE ASSESSEE, HOWEVER, LATER ON, CHANG ED THE STAND THAT ALL THE DEPOSITS IN THE BANK ACCOUNT ARE RECEIPTS OF THE RE TAIL BUSINESS. THE ASSESSEE FURTHER SUBMITTED BEFORE THE AO THAT THE DEPOSITS IN THE BA NK ACCOUNT IN QUESTION WERE, IN FACT, MADE ON THE REQUEST OF HIS FRIEND SHRI GAURAV GAUTAM WHO WAS AN EMPLOYEE OF INDIAN INFOLINE, 5 PAISE.COM. IT WAS FURTHER SUB MITTED THAT MR. GAURAV GAUTAM RECEIVED CASH FROM VARIOUS PARTIES AND LATER ON THE SAME WAS DEPOSITED IN ASSESSEES BANK ACCOUNT AND IN LIEU THEREOF, THE AS SESSEE RECEIVED 1% CASH COMMISSION ON THE VALUE OF DEMAND DRAFTS. HOWEVER, AS PER THE AO, ALL THE STATEMENTS APART FROM STATEMENT WHICH WAS MADE ON 1 9.03.2010 INITIALLY, ARE CONCOCTED AND CANNOT BE RELIED UPON. THE AO, AS REG ARDS THE CLAIM OF ASSESSEE, NOTED THAT NO DOCUMENTS HAVE BEEN FILED TO SUBSTANT IATE THE CLAIM. THEREFORE, THE ADDITION WAS MADE OF RS.23,66,645/- U/S. 69 OF THE IT ACT. 3. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A ) AND IT WAS SUBMITTED THAT THE ASSESSEE IS INNOCENT AND THAT PEAK CREDIT IN TH E BANK ACCOUNT OF THE ASSESSEE WAS ONLY RS.2,06,181/- ON 01.10.2007. THE BANK ACCO UNT IN THE NAME OF ASSESSEE WITH AXIS BANK WAS UTILIZED BY HIS FRIEND GAURAV GA UTAM, WHO WAS EMPLOYEE IN INDIA INFOLINE COMMODITY PVT. LTD., AGRA. THE ASSES SEE VIDE WRITTEN REQUEST DATED 22.06.2010 (PB-5) REQUESTED BEFORE THE AO TO RECORD THE STATEMENT OF SHRI GAURAV ITA NO. 126/AGRA/2012 3 GAUTAM BECAUSE IT WAS ESSENTIAL FOR DECISION IN THE MATTER. IT WAS FURTHER EXPLAINED THAT ALL THE DDS/PO ISSUED BY THE BANK WERE IN FAVO UR OF M/S. INDIA INFOLINE COMMODITY PVT. LTD. ON VARIOUS DATES AND CONFIRMATI ON FROM THE AXIS BANK WAS FILED. THE ASSESSEE DID NOT HAVE ANY DEAL WITH M/S. INDIA INFOLINE COMMODITY PVT. LTD. AND AFFIDAVIT TO THAT EFFECT WAS ALSO FILED. A LL THE PAY-IN-SLIPS ARE IN THE HAND WRITING OF MR. GAURAV GAUTAM. SINCE M/S. INDIA INFO LINE COMMODITY PVT. LTD. DID NOT ACCEPT CASH, THEREFORE, ITS EMPLOYEE MR. GAURAV GAUTAM UTILIZED BANK ACCOUNT OF THE ASSESSEE AND NOW THE ASSESSEE IS ABLE TO GET DETAILS OF THE CUSTOMERS OF THE SAID COMPANY IN RESPECT OF WHOM THE AMOUNTS WERE DE POSITED. SINCE THE ASSESSEE IS NOT BENEFICIARY OF ANY TRANSACTIONS WITH M/S. IN DIA INFOLINE COMMODITY PVT. LTD., THEREFORE, THE ADDITION SHOULD NOT BE MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE ALLAHA BAD HIGH COURT IN THE CASE OF MUNNA LAL MURLIDHAR VS. CIT, 79 ITR 540 ON THE PROP OSITION THAT IT IS THE DUTY OF THE ASSESSING OFFICER TO ASSIST THE ASSESSEE IN PRO DUCING THE EVIDENCE. 4. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT THE CONT ENTION OF THE ASSESSEE AND HELD THAT THE ASSESSEE FAILED TO PROVE SOURCE OF TH E CASH DEPOSITED IN HIS BANK ACCOUNT. THE FINANCIAL STATUS OF SHRI GAURAV GAUTAM WAS ALSO NOT PROVED THROUGH ANY DOCUMENTARY EVIDENCE. THE ASSESSEE HAS FAILED T O SUBSTANTIATE ITS EXPLANATION AND IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE. THE ADDITION WAS, THEREFORE, CONFIRMED AND THE APPEAL OF THE ASSESSEE ON THIS GR OUND WAS DISMISSED. ITA NO. 126/AGRA/2012 4 5. THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR T HE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE H AS SUBMITTED THAT THE ASSESSEE WAS NOT HAVING ANY TRANSACTION WITH M/S. INDIA INFO LINE COMMODITY PVT. LTD. AND THE ASSESSEE WAS NOT BENEFITED BY ISSUE OF ANY DDS/ PO ISSUED BY THE AXIS BANK IN FAVOUR OF M/S. INDIA INFOLINE COMMODITY PVT. LTD.. THE AXIS BANK HAS CONFIRMED THAT ALL THE DDS/PO ARE ISSUED IN FAVOUR OF M/S. IN DIA INFOLINE COMMODITY PVT. LTD. AND THE AO DID NOT RECORD STATEMENT OF MR. GAU RAV GAUTAM DESPITE REQUEST MADE SPECIFICALLY IN THIS BEHALF. THEREFORE, NO ADD ITION COULD BE MADE AGAINST THE ASSESSEE. HE HAS RELIED UPON THE DECISIONS OF ALLAH ABAD HIGH COURT IN THE CASE OF MUNNA LAL MURLIDHAR VS. CIT, 79 ITR 540 AND NATHU R AM PREMCHAND VS. CIT, 49 ITR 561. HE HAS REFERRED TO VARIOUS DOCUMENTS IN TH E PAPER BOOK IN SUPPORT OF HIS CONTENTION INCLUDING THE BANK CERTIFICATES. HE HAS ALSO FILED AFFIDAVIT OF THE ASSESSEE UNDER RULE 10 OF THE ITAT RULES AND EXPLAI NED THAT THE TRANSACTIONS WERE CARRIED OUT BY MR. GAURAV GAUTAM BEING EMPLOYEE OF M/S. INDIA INFOLINE COMMODITY PVT. LTD. AND AFFIDAVIT AND CONFIRMATION OF MR. GAURAV GAUTAM WAS SUBMITTED BEFORE THE LD. CIT(A), BUT THE SAME WAS N OT ACCEPTED. COPIES OF THE SAME ARE FILED IN THE PAPER BOOK. HE HAS, THEREFORE , SUBMITTED THAT THE AFFIDAVIT OF THE ASSESSEE AND MR. GAURAV GAUTAM MAY BE ADMITTED U/R 10 OF THE ITAT RULES AND THE SAME MAY BE ADMITTED AS ADDITIONAL EVIDENCE SO THAT MATTER MAY BE REMANDED TO THE AO FOR RECORDING STATEMENT OF GAURA V GAUTAM TO CONFIRM THE ITA NO. 126/AGRA/2012 5 TRANSACTIONS CARRIED OUT BY HIM IN RESPECT OF THE B ANK ACCOUNT IN QUESTION. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW AND ALSO RELIED UPON THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS. K. CHINNATHAMBAN, 292 ITR 682, IN WHICH IT WAS HELD TH AT BURDEN IS UPON THE PERSON WHO DEPOSITED THE MONEY AND HIS FAILURE TO EXPLAIN THE SOURCE IS DEEMED MONEY OF SUCH PERSON. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE BANK ACCOUNT IN QUESTION WAS OPERATED BY THE ASSESSEE HAVING DEPOSITS OF RS.23,66,645/-. THE ASS ESSEE HAS FILED DETAILS OF SOME OF THE BENEFICIARIES WHO HAVE TRANSACTIONS WITH M/S . INDIA INFOLINE COMMODITY PVT. LTD. THROUGH MR. GAURAV GAUTAM. COPY OF CERTIF ICATES OF AXIS BANK IS ALSO FILED, WHICH SHOWED THE NATURE OF TRANSACTION CARRI ED OUT IN THIS ACCOUNT. THERE ARE CASH DEPOSITS AND THEN ISSUE OF DDS/PO . IN WHOLE O F THE YEAR, SIMILAR TRANSACTIONS HAVE BEEN CARRIED OUT IN THE BANK ACCOUNT IN QUESTI ON. THE AXIS BANK IN THEIR CERTIFICATE (PB-7) ALSO CONFIRMED THAT DDS/PO WERE ISSUED FROM THE BANK ACCOUNT IN QUESTION FAVOURING M/S. INDIA INFOLINE COMMODITY PVT. LTD. ON VARIOUS DATES AS PER REQUEST. FURTHER, CERTIFICATE OF AXIS BANK (PB- 50) WAS ALSO ISSUED TO THE AO DIRECTLY ON DATED 05.07.2010, IN WHICH ALSO BANK HA S AGAIN CONFIRMED THAT THESE PAY ORDERS HAVE BEEN ISSUED FAVOURING M/S. INDIA IN FOLINE COMMODITY PVT. LTD., A SHARE TRADING FIRM HAVING THEIR LOCAL OFFICE AT AGR A. COPIES OF SOME OF THE CHEQUES ITA NO. 126/AGRA/2012 6 ISSUED ARE ALSO FILED IN THE PAPER BOOK ALONGWITH T HE DETAILS OF THE TRANSACTIONS. SAME ARE FILED FROM PAGES 50 TO 67. THE ASSESSEE AL SO FILED COMPLETE DETAILS OF LIST OF PERSONS WHO ARE BENEFITED BY THE DDS/PO AT PAGE 68 OF THE PAPER BOOK ALONG WITH COPY OF RECONCILIATION STATEMENT OF DDS/BANKER S CHEQUES ISSUED TO THEIR BENEFICIARIES AT PAGES 69 TO 70 OF THE PAPER BOOK. COPY OF ACCOUNT OF BENEFICIARIES FROM M/S. INDIA INFOLINE COMMODITY PVT. LTD. SHOWIN G DDS/PO DEPOSITED ARE FILED AT PAGES 71 TO 100 OF THE PAPER BOOK. THESE EVIDENC ES ON RECORD CLEARLY SUPPORT THE CASE OF THE ASSESSEE THAT EVEN IF CERTAIN CASH AMOU NT HAS BEEN DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE ON DIFFERENT DATES, BUT IMM EDIATELY PO/DDS HAVE BEEN ISSUED FROM THE SAME BANK ACCOUNT FAVOURING M/S. IN DIA INFOLINE COMMODITY PVT. LTD. ON THE FACE OF THESE EVIDENCES AND THE MATERIA L ON RECORD, PARTICULARLY THE BANK CERTIFICATES ISSUED DIRECTLY IN FAVOUR OF THE ASSESSING OFFICER WOULD REVEAL THAT THE AO WAS HAVING SUFFICIENT MATERIAL BEFORE H IM TO FIND OUT THAT THE AMOUNT ULTIMATELY WAS VESTED WITH M/S. INDIA INFOLINE COMM ODITY PVT. LTD.. THUS, THE ASSESSEE WAS NOT BENEFICIARY OF ANY AMOUNT DEPOSITE D IN THIS BANK ACCOUNT AND THE ASSESSEE DID NOT HAVE ANY TRANSACTION WITH M/S. IND IA INFOLINE COMMODITY PVT. LTD.. ALL THE AMOUNTS IN QUESTION DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE WENT TO M/S. INDIA INFOLINE COMMODITY PVT. LTD. IN RESPECT OF CERTAIN BENEFICIARIES WHICH TRANSACTIONS WERE CARRIED OUT THROUGH MR. GAU RAV GAUTAM AS EXPLAINED BY THE ASSESSEE. THEREFORE, THERE IS NO QUESTION OF PL ACING ANY RELIANCE UPON THE EARLIER STATEMENTS MADE BY THE ASSESSEE BEFORE THE AO. IN THE FACTS AND ITA NO. 126/AGRA/2012 7 CIRCUMSTANCES AND THE MATERIAL ON RECORD, IT WOULD HAVE BEEN RELEVANT FOR THE AO TO EXAMINE MR. GAURAV GAUTAM TO FIND OUT TRUTH IN T HE MATTER, BUT THE AO DID NOT CARRY OUT ANY INVESTIGATION IN THE MATER IN RIGHT D IRECTIONS. INTERESTINGLY, WHEN THE ASSESSEE MADE A REQUEST TO THE AO AT ASSESSMENT STA GE ON 22.06.2010 (PB-5) TO RECORD STATEMENT OF MR. GAURAV GAUTAM IN THIS REGAR D, WHICH FACT IS ALSO NOTED AT PAGE 16 OF THE ASSESSMENT ORDER, THE AO DID NOT TAK E ANY STEP IN THE MATTER AND DID NOT SUMMON GAURAV GAUTAM FOR THE PURPOSE OF RECORDI NG HIS STATEMENT. HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. RAMESH CHAND SHUKLA (MAIT 71/2003 DECIDED ON 01.04.2005) REPORTED IN 10 ITJ 286 HELD THAT IT IS NOW WELL SETTLED THAT WHERE THE ASSESSEE REQUESTS THE AO TO ISSUE SUMMONS , TO ENFORCE ATTENDANCE OF THE CREDITORS TO ESTABLISH THE GENUINENESS AND CAPACITY OF THE CREDITORS, IT IS THE DUTY OF THE AO TO ENFORCE ATTENDANCE OF CREDITORS BY ISSUIN G SUMMONS. IF THE AO DOES NOT CHOOSE TO ISSUE SUMMONS AND EXAMINE THE CREDITORS, HE CANNOT SUBSEQUENTLY TREAT THE LOANS STANDING IN THE NAME OF SUCH CREDITORS AS NON-GENUINE NOR ADD THE AMOUNT THEREOF TO THE ASSESSEES INCOME. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ADDL. CIT VS. RADHEY SHYAM JAGDISH PRASAD, 117 ITR 186 HAS HELD THAT WHEN THE AO REFUSED TO SUMMON CREDITOR ON REQUEST O F THE ASSESSEE, IT WOULD VITIATE ASSESSMENT PROCEEDINGS. CONSIDERING THE ABO VE DISCUSSION IN THE LIGHT OF THE MATERIAL ON RECORD AND REQUEST OF THE ASSESSEE TO R ECORD STATEMENT OF GAURAV GAUTAM, WOULD CLEARLY PROVE THAT THE ASSESSEE HAS E XPLAINED THE SOURCE OF THE AMOUNT DEPOSITED IN HIS BANK ACCOUNT WHICH ULTIMATE LY WENT TO M/S. INDIA INFOLINE ITA NO. 126/AGRA/2012 8 COMMODITY PVT. LTD.. NOTHING IS THEREFORE UNEXPLAIN ED MONEY IN THE HANDS OF THE ASSESSEE. WE MAY ALSO ADD HERE THAT THE ASSESSEE HA S FILED HIS AFFIDAVIT AND AFFIDAVIT OF SHRI GAURAV GAUTAM UNDER RULE 10 OF TH E ITAT RULES IN WHICH SAME FACTS HAVE BEEN AFFIRMED AND IT WAS ALSO PLEADED TH AT THE AFFIDAVIT AND CONFIRMATION OF MR. GAURAV GAUTAM WAS NOT ACCEPTED BY THE LD. CI T(A) BEFORE PASSING THE APPELLATE ORDER. THERE IS NO REBUTTAL TO THESE FACT S FROM THE SIDE OF THE REVENUE DEPARTMENT. THE PROPOSED AFFIDAVIT TO BE FILED BEFO RE THE LD. CIT(A) OF MR. GAURAV GAUTAM DATED 20.12.2011 IS ALSO FILED ON RECORD IN SUPPORT OF THE SAME CONTENTION. THESE FACTS WILL CLEARLY REVEAL THAT THE REVENUE DE PARTMENT WAS NOT INTERESTED IN PROCEEDING IN RIGHT MANNER TO FIND OUT TRUTH IN THE MATTER. SINCE NO PROPER ENQUIRY INTO THE MATTER HAS BEEN MADE AND STATEMENT OF GAUR AV GAUTAM WAS NOT RECORDED DESPITE REQUEST OF THE ASSESSEE, THE WHOLE ASSESSME NT ORDER IS VITIATED AND THE ORDERS OF THE AUTHORITIES BELOW WOULD NOT SUSTAIN I N LAW. SINCE IT IS A MATTER PERTAINING TO ASSESSMENT YEAR 2008-09 AND CONSIDERI NG THE CIRCUMSTANCES AND THE DISCUSSION ABOVE, WE DO NOT PROPOSE TO GIVE ONE MOR E INNING TO THE AO TO RECTIFY HIS MISTAKES AT THIS STAGE. WE, THEREFORE, ARE OF T HE VIEW THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN MONEY DEPOSITED IN HIS BANK ACCOUNT AND THE CIRCUMSTANCES LEADING TO SUCH DEPOSITS IN WHICH THE ASSESSEE HAS NO PERSO NAL INTEREST AND HAS NO TRANSACTION WITH M/S. INDIA INFOLINE COMMODITY PVT. LTD.. THEREFORE, NO ADDITION IN THE HANDS OF THE ASSESSEE COULD BE MADE OF SUCH DEPOSITS. EXPLANATION OF THE ASSESSEE IS LIABLE TO ACCEPTED. ITA NO. 126/AGRA/2012 9 7. CONSIDERING THE ABOVE DISCUSSION, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ADDITION OF RS.23,66,645/- IN THE HANDS OF THE ASSESSEE. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELET E THE ADDITION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY