PARAMJEETKAUR KAMALJIT SANDHU, MUMBAI V. ITO 8(2)2, MUMBAI

ITA 1323/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3397 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Source of fund
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE HONBLE S/SHRI SANJAY GARG, JM AND SHRI RAJESH KUMA R , AM ./ I.T.A. NO. 1323 /MUM / 201 3 ( / ASSESSMENT YEAR : 20 09 - 10 ) SMT.PARAMJEETKAUR KAMALJIT SANDHU, S - 2, UNIQUE HOUSE, CHAKALA ROAD, ANDHERI (E), MUMBAI - 400099 / VS. INCOME TAX OFFICER, WARD 8(2)(2) , AYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 ./ PAN : AA LPS0806M ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NISHIT GANDHI / RESPONDENT BY : SHRI S PANDIAN / DATE OF HEARING : 8.3. 2016 / DATE OF PRONOUNCEMENT : 23. 3 . 2016 / O R D E R PER RAJESH KUMAR , AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 18.12. 201 2 PASSED BY THE LD.CIT(A) - 1 7 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 20 09 - 10. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE AS UNDER: 1. 1 LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 17, MUMBAI ERRED IN CONFIRMING THE ACTION OF AO WHILE MAKING THE ADDITION OF RS.1 0,65,000/ - TO THE INCOME OF THE APPELLANT BY INVOKING THE PROVISIONS OF SECTION 68 OF T HE INCOME TAX ACT, 1961 ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT OF THE ITA NO. 1323 / MUM/20 1 3 2 APPELLANT. 1.2. WHILE DOING SO, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) FAILED TO APPRECIATE THAT IN THE FACTS OF THE CASE, THE CAE OF THE APPELLANT WAS NOT COVERED U/S 68 OF THE ACT,. 1.3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT ASSUMING - BUT NOT ADMITTING - THAT THE CASE OF THE APPELLANT WAS COVERED U/S 68 OF THE ACT, THE APPELLANT HAD DISCHARGED HER PRELIMINARY ONUS AS ENVISAGED UNDER THE SECTION AND THE AO DID NOT DISCHARGE THE ONUS SHIFTED BACK TO HIM. 1.4 WITHOUT FURTHER PREJUDICE TO THE ABOV E, IT IS SUBMITTED THAT ASSUMING - BUT NOT ADMITTING - THAT THE EXPLANATION OF THE APPELLANT WAS NOT FOUND SATISFACTORY BY THE AO STILL IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN MAKING THE ADDITION. 1.5 IT IS SUBMITTED T HAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED. 3. THE SOLE ISSUE RAISED IN ALL THE GROUNDS OF APPEAL RELATES TO THE CONFIRMATION OF ADDITION OF RS.10 , 65 , 000 / - BY THE CIT AS MADE BY AO UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME ON 22.07.2009 BY DECLARING AN INCOME OF RS.1,96,920/ - . THE CASE OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE A CT. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDING THE AO FOUND THE ASSESSEE ON THE BASIS OF ITS DETAILS TO HAVE DEPOSITED RS.10,65,000/ - IN HER ACCOUNT MAINTAINED WITH B ANK OF BARODA. THE ASSESSEE PRODUCED THE BANK STATEMENTS RESPECT OF MOGAVEERA COOP. BANK LTD AND OTHER RESOURCES AS PER CASH BOOK AND BANK OF BARODA AS DESIRED BY THE AO. THE AO CALLED ITA NO. 1323 / MUM/20 1 3 3 FOR VARIOUS DETAILS AND EXPLANATION FROM THE ASSESSEE WHICH THE ASSESSEE PRODUCED FROM TIME TO TIME COMPRISING THE BALANCE SHEET, CAPITAL ACCOUNT, CASH BOOK, BANK BOOK AND BANK STATEMENTS FOR FOUR YEARS. THE AO AFTER CARRYING OUT THE EXTENSIVE VERIFICATION OF THE RECORDS ADDED A SUM OF RS . 10,65,000/ - TO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE A CT BY REJECTING THE CONTENTION OF THE ASSESSEE THAT THE SAID CASH WAS DEPOSITED OUT OF WITHDRAWALS MADE BY HER FROM MOGAVEERA COOP. BANK LTD DURING THE PREVIOUS THREE YEARS. THE CIT ALSO CONFIRMED THE ORDER OF AO ON THE ISSUE OF ADDITION UNDER SECTION 68 BY HOLDING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. THE APPELLANT HAS MENTIONED THAT THE AMOUNT WAS DRAWN FROM BANKS IN THE EARLIER YEARS AN D LEAVE RE - DEPOSITED THE SAME DURING THE YEAR IN THE BANK OF BARODA. HOWEVER THE APPELLANT WAS NOT BEEN ABLE TO CORRELATE THE WITHDRAWAL WITH THE DEPOSITS IN THE BANK. THE ARGUMENT OF THE APPELLANT THAT THERE WAS FEAR BANKRUPTCY OF MOGAVEERA COOP. BANK L TD IS UNSUBSTANTIATED AND IN THE PERIOD THAT SHE WAS WITHDRAWING MONEY FROM MOGAVEERA COOP. BANK LTD, THE APPELLANT HERSELF A DEPOSITED RS. 24,000 ON 28.01.2008. THE ARGUMENT THAT APPELLANT IS NOT LIABLE FOR SECTION 68 IS INCORRECT AS THE BANK PASSBOOK I S ALSO PART OF THE ACCOUNT SETTLEMENT BASED ON WHICH THE FINANCIAL STATEMENT OF APPELLANT IS MADE. PASSBOOK IS RECORD BOOKS OF CLIENT MAINTAINED BY THE BANKER ON THE BASIS OF CASH, CHEQUES DEPOSITS AND WITHDRAWALS MADE BY THE CLIENT WITH THE BANK. IN VIEW OF THE ABOVE THE STAND OF THE AO AND THE GROUND OF APPEAL ARE DISMISSED 5. W E HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD PLACED BEFORE US. WE FIND FROM THE CASH BOOK FILED AT PAGE NO . 1 OF THE PAPER BOOK FOR THE PERIOD 3 1.03.2006 TO 31.03.2009 THAT THE ASSESSEE HAD CASH BALANCE OF RS. 9,76,005/ - AS ON 31.03.2008 WHICH WAS INCREASED BY WITHDRAWALS FROM OTHER BANKS BY RS. 1,50,000/ - , SALARY RECEIVED RS. 20,000/ - AND REDUCED BY CASH DEPOSITED OF RS. 10,65,000/ - IN BANK O F BARODA AND DRAWINGS OF RS. 50,000/ - AND THUS THE CLOSING CASH IN HAND WAS RS. 31,005/ - AS ON 31.03.2009. THE LD AR FOR THE ASSESSEE ALSO ITA NO. 1323 / MUM/20 1 3 4 FILED YEAR - WISE RECONCILIATION OF BANK OF MOGAVEERA COOP. BANK LTD SHOWING THE AMOUNTS WITHDRAWN FROM THE SAID BA NK ACCOUNT. THE LD AR SUBMITTED THAT THE CASH DEPOSITED INTO THE BANK OF BARODA WAS EITHER OUT OF THE EARLIER YEARS OR CURRENT YEAR WITHDRAWALS FROM THE BANK OR FROM O THER SOURCES WHICH WERE TOTALLY PROVED BY THE RECORDS AS PLACED BEFORE US. IN SUPPORT O F HIS ARGUMENT QUA WITHDRAWALS FROM MOGAVEERA COOP. BANK LTD, THE LD AR ARGUED THAT THERE WAS A FEAR OF BANKRUPTCY OF THE SAID BANK FOLLOWING LARGE SCALE BUNGLING OF FUNDS AND CORRUPTION CHARGES ON THE MANAGEMENTS OF THE BANK. THE LD COUNSEL ALSO FILED THE NEWSPAPER REPORTS DATED 23.11.2006 OF BUSINESS LINE PRINT EDITION IN WHICH THE RBI IMPOSING FINE OF RS.5.00 LACS WAS PUBLISHED AND OTHER NEWSPAPER REPORTS OF HUGE BUNGLING AND GRAFT CHARGES ON THE DIRECTORS TO SUPPORT AND JUSTIFY ARGUMENTS OF HUGE WIT HDRAWALS UNDER THE FEAR OF BANKRUPTCY FROM THE SAID BANK PLACED AT PAGE S FROM 22 TO 24 OF THE PAPER BOOK WHEREAS THE LD DR RELIED ON THE ORDERS OF AUTHORITIES BELOW. AS DISCUSSED ABOVE WE ARE QUITE SATISFIED AND CONVINCED WITH THE SOURCE OF FUNDS OF TH E ASSESSEE AND THEREFORE FIND MERIT IN THE CASE OF THE ASSESSEE , THEREFORE, THE ADDITION AS MADE U/S 68 WAS WRONG AS THE RECORDS OF THE ASSESSEE FULLY PROVES THE SOURCES OF DEPOSITS. ACCORDINGLY WE DELETE THE ADDITION OF RS.10,65,000/ - AND THE AO IS DIRE CTED ACCORDINGLY. 6 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD MARCH ,2016. 23RD MARCH , 2016 SD SD ( / SANJAY GARG) ( / RAJESH KUMAR ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 23 /03 /2016 . . ./ SRL , SR. PS ITA NO. 1323 / MUM/20 1 3 5 / COPY OF THE ORDE R FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI