ITO, Ludhiana V. Shri Gurvinder Singh, Ludhiana

ITA 1297/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68445 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 1297/CHD/2012 ASSESSMENT YEAR : 2008-09 I.T.O. WARD VI(1) V GURVINDER SINGH LUDHIANA 177/168 VILLAGE DUGRI LUDHIANA ASZPS 2965 B CROSS-OBJECTIONS 6/CHD/2013 ARISING OUT OF ITA NO. 1297/CHD/2012 ASSESSMENT YEAR : 2008-09 GURVINDER SINGH V I.T.O. WARD VI(1) 177/168 LUDHIANA VILLAGE DUGRI LUDHIANA ASZPS 2965 B (APPELLANT) (RESPONDENT) DEPARTMENT BY SHRI MANJIT SINGH ASSESSEE BY: NONE DATE OF HEARING 8.8.2013 DATE OF PRONOUNCEMENT 3.9.2013 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 16. 10.2012 OF THE LD. CIT(A)-II, LUDHIANA. THE ASSESSEE HAS FILE D CROSS- OBJECTIONS AGAINST THE ORDER OF LD. CIT(A). 2. IN THIS CASE NOTICE HAS BEEN ISSUED TO THE RESPO NDENT THROUGH RPAD BUT NONE APPEARED DESPITE NOTICE AND T HEREFORE, WE HAVE PROCEEDED TO DECIDE THE APPEAL ON EX-PARTE BAS IS. 2 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT AS P ER AIR INFORMATION THE ASSESSEE DEPOSITED CASH AMOUNTING T O RS. 23,78,000/- IN HIS BANK ACCOUNT WITH HSBC BANK LTD. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CONFRONTED WITH THIS INFORMATION AND WAS ASKED TO EXPLAIN THE SAME. SIN CE THE ASSESSEE FAILED TO GIVE ANY PLAUSIBLE EXPLANATION, A SUM OF RS. 23,78,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE . 4 ON APPEAL BEFORE THE LD. CIT(A) IT WAS MAINLY SUB MITTED THAT CASH WAS DEPOSITED FROM TIME TO TIME AND WAS DULY A CCOUNTED FOR IN CASH BOOK. COPY OF CASH BOOK AND BALANCE SHEET WAS FILED THEREFORE, IT WAS STATED THAT SOURCE OF THE DEPOSIT WAS FILED BEFORE THE ASSESSING OFFICER ON DIFFERENT DATES AND PROOF FOR FILING SUCH EVIDENCE WAS ENCLOSED. IT WAS STATED THAT CASH WAS GENERATED FROM HIS INCOME WHICH HAVE BEEN SHOWN IN THE COMPUT ATION. IT WAS FURTHER STATED THAT CASH WAS ALSO RECEIVED ON S ALE OF JOINT PROPERTY WITH THE MOTHER OF THE ASSESSEE, SMT. BHAJ AN KAUR AND BROTHER SHRI JASWANT SINGH. THIS PROPERTY WAS SOLD BY THE ASSESSEE AS ATTORNEY HOLDER AND THIS CASH WAS KEPT FOR SOMETIMES. COPY OF SALE DEED WAS ALSO FILED. THE ASSESSEE ALSO OBTAINED COPY OF NOTING SHEET OF THE ASSESSMENT PRO CEEDINGS AND FROM THE SAME THE LD. CIT(A) NOTED THAT THIS NOTING CLEARLY SHOW THAT ISSUE REGARDING CASH DEPOSIT WAS ONLY SPECIFIC ALLY CONFRONTED TO THE ASSESSEE. THEREFORE, THE LD. CIT(A) REMITT ED THE ISSUE FOR CONDUCTING FRESH INQUIRIES WITH REGARD TO THE SOURC E OF CASH DEPOSIT. THE ASSESSING OFFICER SUBMITTED THE FOLLO WING REMAND REPORT DATED 16.7.2012 BEFORE THE LD. CIT(A). 3 IN THIS CONNECTION, IT IS SUBMITTED THAT THE MATT ER REGARDING CASH-DEPOSITS IN BANK WAS ASKED TO BE EXPLAINED BY THE ASSESSEE VIDE POINT NO. 10 OF THE QUESTIONNAIRE DATED 21.05. 2010 DURING THE ASSESSMENT PROCEEDINGS WHERE THE ASSESSEE FAILE D TO DO SO. THESE FACTS WERE SUBMITTED TO YOUR OFFICE VIDE THIS OFFICE LETTER NO. 729 DATED 30.11.2011. NOW AS PER YOUR DIRECTIONS U/S 250(4) THE MATTER IS CONFRONTED TO THE ASSESSEE. THE COUNSEL OF THE ASSESSEE SUBMITTED A COPY OF THE CASH BOOK OF THE ASSESSEE WHICH AS ALSO FILED D URING THE ASSESSMENT PROCEEDINGS ALONGWITH CASH FLOW STATEMEN T. THE VARIOUS CASH DEPOSITS AND WITHDRAWAL IN THE BANK AC COUNT WERE ROUTED THROUGH THIS CASH BOOK. ON QUERY IN RESPECT OF DEPOSIT OF RS. 6 LACS ON 12.04.2007 THE ASSESSEE STATED IT TO BE OUT OF IMPREST MONEY AND IN SUPPORT HE HAS SUBMITTED BALAN CE SHEET AS ON 31.3.2007 AND 31.3.2008 AND ALSO EXPLAINED THAT THE AMOUNT WAS RECEIVED IN CASH AGAINST AGREEMENT TO SELL A PL OT AT VILLAGE ASSI KALAN WHICH WAS CANCELLED ON 25.2.2008. THE O THER DEPOSITS ON DIFFERENT DATES AS STATED BY THE ASSESS EE A RE WITHDRAWALS FROM ONE ACCOUNT OR THE OTHER AND DEPOS ITED IN ANOTHER ACCOUNT ETC. HOWEVER, THE ASSESSEE FAILED TO AUTHENTICATE THE PURPOSE OF WITHDRAWALS ON DIFFEREN T DATES EVEN WHEN HE HAS ALREADY SUFFICIENT CASH IN HAND E.G. ON 1.5.2007 HE WITHDREW RS. 2,94,000/- WHEREAS HE HAS ALREADY CASH IN HAND OF RS. 6,72,280/- ON THAT DATE. SIMILARLY ON OTHER DA TES WHEN HE WITHDREW CASH HE ALREADY KEPT ABUNDANT CASH IN HAND (CASH FLOW CHART ENCLOSED). UNDER THESE CIRCUMSTANCES HE HAS TO EXPLAIN THE PUR POSE OF CASH WITHDRAWAL AND IF INVESTED SOMEWHERE THE FACTS SHOU LD BE REPORTED TRULY. HOWEVER, THE ASSESSEE FAILED TO EX PLAIN THE VERY PURPOSE OF CASH WITHDRAWALS DURING THE ASSESSMENT P ROCEEDINGS AND SUBSEQUENTLY DURING THE ENQUIRY U/S 250(4), THE GENUINENESS OF THIS CASH BOOK OR CASH FLOW STATEMENT IS DOUBTFU L AND CAN NOT BE RELIED UPON AND IT SEEMS THAT THESE DOCUMENTS AR E AN AFTER THOUGHT WHEN NOTICE U/S 143(2) ISSUED. THESE DOCUM ENTS ALSO CAN NOT BE RELIED UPON AS THE ASSESSEE FAILED TO BR ING ON RECORDS ANY EVIDENCE IN THE SHAPE OF VOUCHERS/BILLS SUPPORT ING CASH BOOK ENTRIES. IN VIEW OF THE ABOVE FACTS, THE SOURCE OF CASH DEPO SITS HAS NOT BEEN EXPLAINED AND AS SUCH, I AM OF THE VIEW THAT T HE EARLIER ASSESSING OFFICER AND RIGHTLY MADE AN ADDITION OF R S. 23,78,000/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPL AINED CASH DEPOSITS. COPIES OF CASH FLOW STATEMENT BALANCE SH EETS AS ON 31.3.2007 AND 31.3.2008 ARE ENCLOSED FOR YOUR KIND PERUSAL. IN VIEW OF THESE SUBMISSIONS THE APPEAL OF THE ASSESSE E MAY KINDLY BE CONSIDERED ON MERITS. THIS REPORT WAS CONFRONTED TO THE ASSESSEE. THE AS SESSEE IN REPLY AGAIN STATED THAT AVAILABILITY OF CASH FROM D AY TO DAY BECAME 4 CLEAR FROM THE CASH BOOK. IT WAS FURTHER SUBMITT ED THAT COMPLETE DOCUMENTS IN RESPECT OF SALE OF PROPERTY BELONGING TO THE MOTHER AND BROTHER OF THE ASSESSEE WERE ALSO SUBMITTED. I T WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAD OBSERVED T HAT WHY CASH HAS BEEN WITHDRAWN WITHOUT NOTICING THE FACT THAT C ASH WAS RECEIVED ON ACCOUNT OF SALE OF SHARES, RENTAL INCOM E, AGRICULTURAL INCOME, SALE OF CAR, SALE OF SHOP ETC. WHICH HAS NO THING TO DO WITH THE AVAILABILITY OF CASH. 5 THE LD. CIT(A) CONSIDERED THESE SUBMISSIONS AND U LTIMATELY CONFIRMED THE ADDITION OF RS. 6.00 LAKHS. THE REVE NUE HAS FILED APPEAL AGAINST THE DELETION OF PART ADDITION AND TH E ASSESSEE HAD FILED CROSS-OBJECTIONS OBJECTING TO THE CONFIRMATIO N OF ADDITION OF RS. 6.00 LAKHS. 6 THE REVENUE WAS HEARD. 7 AFTER CONSIDERING THE SUBMISSIONS OF LD. DR FOR T HE REVENUE AND RELEVANT MATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) HAS CORRECTLY ADJUDICATED THE ISSUE. THE AMOUNT OF RS. 12 LAKHS WAS RECEIVED FROM SALE OF JOINT PROPERTY IN THE NAME OF THE ASSESSEE, HIS BROTHER SHRI JASWANT SINGH AND MOTHER SMT. BHAJ AN KAUR. AS PER CASH FLOW STATEMENT RS. 2 LAKHS WAS RECEIVED ON 12.2.2008 AND RS. 10LAKHS WAS RECEIVED ON 15.2.2008 AND THE S AME WAS DEPOSITED IN THE BANK ACCOUNT ON 10.2.2008 AND 15.2 .2008 RESPECTIVELY. THE LD. CIT(A) ALSO NOTED THAT COPY OF AGREEMENT DARTED 15.2.2008 WAS ALSO FILED. HE FURTHER NOTED THAT OUT OF THIS TOTAL SALE CONSIDERATION A SUM OF RS. 4 LAKHS WAS S HOWN BY THE ASSESSEE AS HIS SHARE OF INCOME IN THE RETURN. IT WAS FURTHER NOTICED THAT THE SHARE OF BROTHER AND MOTHER OF THE ASSESSEE WAS 5 PAID TO THEM ON 6.3.2008. WE ARE OF THE OPINION TH AT THESE FACTS CLEARLY SHOW THAT THE CASH WAS AVAILABLE WITH THE A SSESSEE AND NO FAULT CAN BE FOUND IN THE FINDINGS OF THE LD. CIT(A ). THE LD. CIT(A) ALSO NOTED THAT A SUM OF RS. 1,,52,500/- WHICH HAD BEEN DEPOSITED ON 30.1.2008 HAS BEEN DULY REFLECTED IN THE RETURN OF INCOME. IN OUR OPINION, THERE IS NO PROBLEM IN ACCEPTING THE S OURCE WHERE THE INCOME HAS BEEN RETURNED BY THE ASSESSEE. IN RESPE CT OF OTHER ENTRIES THE LD. CIT(A) MADE FOLLOWING OBSERVATION I N PARA IV. AVAILABILITY OF CASH IN BANK ACCOUNT ON THE VARIOU S DATES FROM WHICH CASH HAD BEEN WITHDRAWAL: AS PER THE CASH FLOW STATEMENT THE APPELLANT HAD SH OWN WITHDRAWAL OF CASH ON VARIOUS DATES FROM HIS BANK A CCOUNT IN INDIAN BANK AND HSBC BANK LTD. AS PER DETAILS REFER RED TO ABOVE. PERUSAL OF THE RETURN OF INCOME FILED BY TH E APPELLANT SHOWS THAT THE APPELLANT HAD SHOWN RECEIPTS OF RS. 9,52,137/- ON ACCOUNT OF SALE OF MUTUAL FUNDS WHIC H HAVE BEEN CREDITED TO HIS BANK ACCOUNT. FURTHER THE ASS ESSING OFFICER IN HIS REMAND REPORT DATED 16.7.2012 HAS NO T GIVEN ANY ADVERSE COMMENTS REGARDING THE SOURCE OF CASH WITHDRAWALS FROM THE BANK ACCOUNT. IN THESE CIRCUM STANCES THE SOURCE OF AVAILABILITY OF CASH WITH THE APPELLA NT ON ACCOUNT OF WITHDRAWALS FROM THE BANK ACCOUNT ARE H ELD TO BE SATISFACTORY. THE ASSESSING OFFICER HAS CONTENDED THAT THE APPELL ANT HAD FAILED TO EXPLAIN THE PURPOSE OF CASH WITHDRAWALS E VEN WHEN HE ALREADY HAD SUFFICIENT CASH IN HAND AND IN THESE CIRCUMSTANCES THE GENUINENESS OF THE CASH BOOK OR C ASH FLOW STATEMENT IS DOUBTFUL AND CANNOT BE RELIED UPON. I DO NOT AGREE WITH THE ASSESSING OFFICERS CONTENTION. IN C ASE THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE SOURCE OF CASH AVAILABLE WITH THE APPELLANT HE WAS FREE TO CONDUCT ANY ENQUIRY TO ESTABLISH THE SAME. THE CASE WAS SPECIF ICALLY REMAND TO THE ASSESSING OFFICER ON 22.5.2012 WITH T HE DIRECTION TO CONDUCT NECESSARY ENQUIRY IN ORDER TO FIND OUT WHETHER THE CASH DEPOSITS STAND EXPLAINED OR NOT. THE ASSESSING OFFICER CHOSE NOT TO CONDUCT ANY FURTHER ENQUIRY IN THE MATTER. THE APPELLANT HAVING EXPLAINED THE SOU RCE OF CASH THROUGH CASH FLOW STATEMENT AND HAVING SUBMITT ED THE NECESSARY DOCUMENTS IN THIS REGARD HAD DISCHARGED H IS ONUS WITH REGARD TO THE CASH AS SHOWN IN THE CASH FLOW S TATEMENT EXCEPT RS. 6,00,000/- ON ACCOUNT OF IMPREST MONEY INTRODUCED ON 12.4.2007. IN CASE, THIS AMOUNT OF R S. 6,00,000/- INTRODUCED BY THE APPELLANT IN CASH FLOW STATEMENT 6 ON 12.4.2007 IS TAKEN OUT, THE ASSESSING OFFICERS OBSERVATION THAT THE APPELLANT HAS FAILED TO AUTHEN TICATE THE PURPOSE OF WITHDRAWALS ON DIFFERENT DATES EVEN WHEN HE HAS ALREADY SUFFICIENT CASH IN HAND EXAMPLE ON 1.5.2007 HE WITHDREW RS. 2,94,000/- WHEREAS HE ALREADY HAS CASH IN HAND OF RS. 6,72,280/- ON THAT DATE ALSO STAND EXPL AINED. WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS CORRE CTLY ADJUDICATED THE ISSUE. THE LD. CIT(A) HAS SPECIFICALLY GIVEN S EPARATE FINDING IN RESPECT OF SUM OF RS. 6 LAKHS IN PARA 4.7 (I) A S UNDER: CASH AMOUNTING TO RS. 6.00 LAKHS ON ACCOUNT OF IM PREST ACCOUNT AS PER THE CASH FLOW STATEMENT THE APPELLANT HAS IN TRODUCED AN AMOUNT OF RS. 6.00 LAKHS ON 12.4.2007. THE APPE LLANT HAD EXPLAINED THAT THIS AMOUNT WAS AVAILABLE WITH H IM AS IMPREST MONEY ON ACCOUNT OF AN AGREEMENT TO SELL E NTERED INTO ON 10.1.2007. THIS ISSUE HAD ALSO BEEN EXAMIN ED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. T HE ASSESSING OFFICER HAS REPORTED THAT THE AGREEMENT T O SELL WAS CANCELLED ON 25.2.008. THE APPELLANT IN HIS C OUNTER ARGUMENTS DATED 7.8.2012 HAS NOT CONTROVERTED THIS FINDING OF THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES I F THE APPELLANTS CONTENTION THAT RS. 6.00 LAKHS WAS AVAI LABLE WITH HIM ON ACCOUNT OF ADVANCE RECEIVED AGAINST AGREEME NT TO SELL DATED 10.1.2007 AND SAME WAS LYING WITH HIM IN CASH AS IMPREST ACCOUNT IS TAKEN TO BE CORRECT THEN ON THE CANCELLATION OF THIS AGREEMENT ON 25.2.008, THE APP ELLANT SHOULD HAVE TAKEN THIS AMOUNT OUT OF THE CASH FLOW STATEMENT AND REPAID TO THE PERSON WITH WHOM THE AG REEMENT TO SELL WAS SIGNED. PERUSAL OF CASH FLOW STATEMENT REVEALS THAT NO SUCH AMOUNT HAS BEEN TAKEN OUT OF CASH FLOW STATEMENT BY THE APPELLANT. THIS CLEARLY ESTABLISH ES THAT THE CONTENTION OF THE APPELLANT IS NOT CORRECT. FURTHE R THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE TO SHOW THA T THE AMOUNT RECEIVED ON ACCOUNT OF ADVANCE AS ABOVE DUR ING THE FINANCIAL YEAR 2006-07 WAS REFLECTED IN THE RETURN FOR ASSESSMENT YEAR 2007-08. MOREOVER, WHILE THE AMOUN T RECEIVED AS PER AGREEMENT DATED 10.1.2007 IS RS. 6,,25,000/- THE AMOUNT AVAILABLE AS IMPREST ON THIS ACCOUNT HAS BEEN SHOWN TO BE RS. 6,00,000/-. GENUINENESS O F THIS TRANSACTION IS THEREFORE, NOT ESTABLISHED. WITHOUT PREJUDICE E TO THE ABOVE, EVEN IF THE CASH HAD BEEN RECEIVED BY THE APPELLANT AS ADVANCE AGAINST AGREEMENT TO SELL, FRO M THE SEQUENCE OF EVENTS IT IS ESTABLISHED BEYOND DOUBT T HAT THIS AMOUNT COULD NOT HAVE BEEN DEPOSITED BY THE APPELLA NT IN BANK ACCOUNT. IT MUST HAVE BEEN KEPT AS CASH AND R EPAID BACK ON THE CANCELLATION OF THE AGREEMENT. THE APP ELLANTS EXPLANATION WITH REGARD TO THIS AMOUNT OF RS. 6,00, 000/- IS THEREFORE, HELD TO BE NOT SATISFACTORY. 7 WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS CORRE CTLY REJECTED THE SUM OF RS. 6 LAKHS. IN VIEW OF THESE OBSERVATI ONS WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. ACCORDINGLY APPEAL BY THE REVENUE AND THE C ROSS- OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. 8 IN THE RESULT, APPEAL OF THE REVENUE AND THE CROS S- OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3.9.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3.9.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR