Shri Pravinbhai Lallubhai Patel, Gandhinagar V. The Income Tax Officer, Ward-14(2), Ahmedabad

ITA 1356/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8409 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 15-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR VARMA
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Corroborative evidences
• Section: 143(3); 68; 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO.1356/AHD/2015 / A.Y. 2011-12 SHRI PRAVINBHAI LALLUBHAI PATEL, OPP. ABHUJIN PARA, B/H. GAYATRI MANDIR, KALOL, DIST. GANDHINAGAR PAN : ADRPP 2052 M VS INCOME TAX OFFICER, WARD-14(2), AHMEDABAD ! / (APPELLANT) '# ! / (RESPONDENT) BY ASSESSEE(S) : SHRI S.N. DIVATIA, AR BY REVENUE : SHRI SUMIT KUMAR VARMA, SR. DR / DATE OF HEARING : 04/04/2018 /DATE OF PRONOUNCEMENT: 23/04/2018 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST CIT(A), AHMEDABAD-5S ORDER DATED 30.03.2015 PASSED IN CASE NO.CIT(A)- 5/WD.14(2)/77/2014-15 AFFIRMING ASSESSING OFFICERS ACTION ADDING UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AMOUNTING TO RS.32,500/- AND UNEXPLAINED INVESTMENT UNDER SECTIO N 69 OF THE ACT AMOUNTING TO RS.8,04,200/-; RESPECTIVELY IN PROCEED INGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961; IN SHORT THE A CT. HEARD BOTH SIDES. CASE FILE PERUSED. 2. LEARNED COUNSEL REPRESENTING ASSESSEE STATES AT THE OUTSET THAT HE DOES NOT WISH TO PRESS FOR ABOVE FORMER SUBSTANTIVE GROUND CHALLENGING CORRECTNESS OF ADDITION OF RS.32,500/- UNDER SECTIO N 68 OF THE ACT. THE SAME IS THEREFORE REJECTED AS NOT PRESSED. ITA NO. 1356/AHD /2015 SHRI PRAVINBHAI LALLUBHAI PATEL VS. ITO A.Y :- 2011-12 - 2 - 3. THIS LEAVES US WITH THE SECOND ISSUE OF CORRECTN ESS OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT AMOUNTING TO RS.8,04,200/- AS AFFIRMED IN THE LOWER APPELLATE PROCEEDINGS WITH TH E FOLLOWING DETAILED DISCUSSIONS:- 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION MADE BY THE APPELLANT. THE AO HAS MADE THE TWO ADDITIONS I.E. W ITH REGARD TO THE CASH DEPOSITS IN HIS BANK ACCOUNT AND THE UNEXPLAINED IN VESTMENT IN THE LAND. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AP PELLANT SUBMITTED VARIOUS DETAILS IN RESPECT OF THE ADDITIONS SO MADE AND THE SAME HAVE BEEN EXAMINED. HOWEVER, WITH REGARD TO THE ADDITION OF R S.49,500/-, IT WAS FOUND THAT THIS AMOUNT WAS DEPOSITED IN THE BANK AC COUNT BY THE APPELLANT ON 12.5.2010, ALTHOUGH THE APPELLANT SUBMITTED THE DATE WISE CASH BOOK EXPLAINING THE SOURCES. BUT BY NOT ACCEPTING THE SA ME, THE A.O. MADE THE ADDITION OF THIS AMOUNT OF RS.49,500/-. FOR READY R EFERENCE THE RELEVANT PART OF THE CASH BOOK UPTO 12.5.2010 IS AS UNDER:- DATE DESCRIPTION DEBIT (RS.) CREDIT (RS.) 1.4.2010 OPENING BALANCE 1,00,000.00 1.4.2010 BY HARI OM CORPORATION 40,000.00 6.4.2010 BY HARI OM CORPORATION 35,000.00 10.4.2010 WITHDRAWAL FROM AXIS BANK A/C. 29,000.00 21.4.2010 WITHDRAWAL FROM AXIS BANK A/C. 10,400.00 30.4.2010 PATEL PRAVINBHAI LALLUBHAI 8,000.00 12.5.2010 BY SBI AH A/C.NO.10529171132 49,950.00 4.4. FURTHER THE AO HAS REJECTED THE OPENING BALANC E OF CASH OF RS.1 LAKH FOR WANT OF VERIFICATION. FURTHER THE CASH INFLOW/R ECEIPT OF RS.29,000/- AND RS.10,400/- ON 10.4.2O10 AND 21.4.2010, THE APPELLA NT SUBMITTED THAT THESE WERE THE WITHDRAWALS MADE FROM THE BANK ACCOU NT OF HIS WIFE IN AXIS BANK. BUT NO CONFIRMATION, IDENTITY AND CREDITWORTH INESS AND PAN OF HIS WIFE WERE SUBMITTED DURING THE ASSESSMENT PROCEEDIN GS. THEREFORE, HE DID NOT TOOK NOTE OF THE SUBMISSION AND THE SOURCES TO THIS EXTENT WERE NOT ACCEPTED. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AND IN THE APPELLATE PROCEEDINGS ALSO THE APPELLANT DID NOT PROVE THE ID ENTITY, CREDITWORTHINESS AND PAN OF HIS WIFE FROM WHOSE BANK ACCOUNT THESE A MOUNTS WERE STATED TO BE WITHDRAWN AND UTILIZED FOR THE DEPOSIT IN THE BA NK ACCOUNT ON 12.5.2010. ITA NO. 1356/AHD /2015 SHRI PRAVINBHAI LALLUBHAI PATEL VS. ITO A.Y :- 2011-12 - 3 - 4.5. ALTHOUGH IN THE SHOW CAUSE NOTICE ISSUED DTD.6 .2.2014, THE A.O. VIDE LAST PARA AT PAGE-2 HAS CALLED FOR THE DETAILS AND SOURCES OF THE CASH PAYMENTS MADE WITH SUPPORTING EVIDENCES OF THE SOUR CES BUT THE APPELLANT HAS FAILED TO PROVIDE SUCH EVIDENCES IN THE FORM OF CONFIRMATION OF HIS WIFE ETC. BUT ON THE OTHER SIDE THE APPELLANT HAS CLAIME D THAT THE OPENING BALANCE AS ON 1.4.2010 AT RS.1 LAKH HAS BEEN ACCEPTED BY TH E A.O. HIMSELF FOR THE REASON THAT THE APPELLANT HAS WITHDRAWN RS. 10,31,0 00/- FROM S.B.I. SAVING BANK ACCOUNT AND HAVING CLOSING BALANCE AT RS.2,27, 703/- AT THE END OF THE YEAR. HENCE, THERE WAS NO DOUBT ON THE OPENING CASH BALANCE OF RS.1 LAKH. SINCE THE AO HIMSELF HAS IMPLIEDLY ACCEPTED THE OPE NING CASH BALANCE HENCE THE SAME CANNOT BE SIMPLY REJECTED FOR WANT O F ANY VERIFICATION. THEREFORE, CONSIDERING THE OPENING CASH BALANCE OF RS.1 LAKH AS ON 1.4.2010 OUT OF WHICH AS PER THE CASH BOOK ON 1.4.2010, 6.4. 2010 AND ON 30.4.2010 THE PAYMENTS OF RS.40,000/-, RS.35,000/- AND RS.8,0 00/- HAVE BEEN MADE, LEAVING THE CLOSING CASH BALANCE AVAILABLE OF RS.17 ,000/- (RS. 1,00,000/- (-) RS.83,000/-) FOR DEPOSIT IN THE S.B.I. BANK ACCOUNT ON 12.5.2010 AGAINST WHICH THE APPELLANT HAS DEPOSITED THE AMOUNT OF RS. 49,500/-. THUS, THE SOURCES FOR THE NEGATIVE CASH BALANCE AT RS.32.500/ - (RS.49.500/- (-) RS.17,000/-) THERE WAS NO EXPLANATION WITH REGARD T O THE SOURCES AND HENCE THE ADDITION MADE BY THE A.O. AMOUNTING TO RS.49,50 0/- IS RESTRICTED TO RS.32,500/- BEING UNEXPLAINED CASH REPRESENTING THE UNDISCLOSED INCOME OF THE APPELLANT. 4.6. FURTHER THE AO HAS MADE THE ADDITION OF RS. 8, 79,200/- PAID IN CASH IN RESPECT OF THE AGRICULTURAL LAND PURCHASED AT KALOL ON 7.6.2010 THROUGH THE REGISTRATION NO.KAL/5683/1-15/2010. THE AFORESAID L AND WAS PURCHASED IN TOTAL CONSIDERATION OF RS.9 LAKHS OUT OF WHICH RS. 1,50,000/- HAS BEEN PAID BY WAY OF CHEQUE ON7.4.2010 AND THE REMAINING CONSI DERATION OF RS.7,50,000/- WAS PAID THROUGH CASH ON VARIOUS DATE S. OVER AND ABOVE, THE APPELLANT HAS ALSO PAID THE STAMP DUTY CHARGES OF R S.45,000/- AND THE REGISTRATION EXPENSES AT RS.9,200/- TOTALING TO RS. 54,200/-. ON GOING THROUGH THE SALE DEED DTD. 7.6.2010 IT IS NOTICED T HAT THE SELLER OF THE LAND NAMELY SHRI PATEL RAMESHBHAI BABALDAS HAS ALREADY R ECEIVED THE CASH OF RS.7,50,000/- APART FROM THE CHEQUE OF RS. 1,50,000 /- TOTALING TO RS. 9 LAKHS FROM THE APPELLANT UPTO THE DATE OF SALE DEED. BUT AS PER THE APPELLANT, IN THE CASH BOOK, THE PAYMENTS TO SHRI PATEL RAMESHBHA I BABALDAS HAS BEEN SHOWN ON VARIOUS DATES AFTER THE DATE OF SALE DEED STARTING FROM 5.7.2010 TO 22.10.2010 WHILE THE SALE DEED WAS ALREADY BEEN EXE CUTED ON 7.6.2010. SO THE AO WAS OF THE VIEW THAT AS PER THE SALE DEED TH E SELLER OF THE LAND HAD ALREADY BEEN PAID THE CASH THEN HOW THE PAYMENTS SU BSEQUENT TO THE SALE DEED ON VARIOUS DATES AS PER THE CASH BOOK COULD BE MADE AND ACCEPTED. SO TO EXPLAIN THE SOURCES OF THE CASH PAYMENTS THE APP ELLANT HAS CONCOCTED THIS STORY OF SUBSEQUENT PAYMENTS TO THE SELLER BY CREAT ING VARIOUS SOURCES ITA NO. 1356/AHD /2015 SHRI PRAVINBHAI LALLUBHAI PATEL VS. ITO A.Y :- 2011-12 - 4 - BEFORE HAND AND IN SUPPORT AN AFFIDAVIT OF THE SELL ER WAS ALSO PRODUCED BEFORE A.O. 4.7. SINCE LEGALLY THE AUTHENTICITY OF THE SALE DEE D IS MUCH MORE THAN THE AFFIDAVIT OF THE SELLER PRODUCED SUBSEQUENTLY IN TH E ASSESSMENT PROCEEDINGS MORE PARTICULARLY WHEN THE SALE DEED CLEARLY MENTIO NS ABOUT THE RECEIPT OF THE CASH PAYMENTS OF RS.7,50,000/- FROM THE APPELLA NT TILL THE DATE OF SALE DEED. THUS, THE NOTARIZED AFFIDAVIT CANNOT SUBSTITU TE THE TERMS AND CONDITIONS OF THE SALE DEED AND THEREFORE THE EXPLA NATION OF THE SOURCES OF THE PAYMENTS BY THE A.O. ON THE SUBSEQUENT DATES TO THE SALE DEED IN FOUND NOT ACCEPTABLE. 4.8. IN THIS REGARD ON PRINCIPLE THE AO'S STAND FOR MAKING THE ADDITION BY TREATING THE CASH PAYMENTS AS UNEXPLAINED IS FOUND CORRECT AND JUSTIFIED BUT THE QUANTUM OF ADDITION IS NOT CORRECT. SINCE T HE APPELLANT HAS PAID THE CASH OF RS.7,50,000/- TO THE SELLER OF THE LAND AND ALSO MADE THE PAYMENT OF STAMP DUTY AND REGISTRATION CHARGES OF RS.54,200/-. THUS, THE TOTAL ADDITION ON THIS ACCOUNT COMES TO RS.8,04,200/- ONL Y WHICH IS REPLACED TO THE ADDITION OF RS.8,79,200/- MADE BY THE A.O. IT I S NEEDLESS TO MENTION THAT IN THE CASH BOOK THE APPELLANT HAS ALSO SHOWN THE GIFTS FROM HER MOTHER AT RS.65,000/- ON 6.6.2010 BUT THE SAME IS ALSO NOT ACCEPTED FOR THE REASON THAT THE APPELLANT HAS TOTALLY FAILED TO PROVE THE GENUINENESS AND ALSO DID NOT SUBMIT THE CONFIRMATION OR ANY OTHER EVIDENCES. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. THE SOLE R EASON FOR THE CIT(A) FOR AFFIRMING THE IMPUGNED ADDITION IS THAT ALTHOUG H THE ASSESSEE HAS PLACED ON RECORD ITS VENDOR CONFIRMATION ALONG WITH ALL NECESSARY DOCUMENTS, I.E. CASH BOOK/CLOSING CASH BALANCE, THE SAME IS NOT ACCEPTED SINCE REGISTERED SALE DEED CARRIES PRESUMPTION OF T RUTH AT THE COST OF THE ABOVE ORAL EVIDENCE. WE DO NOT SEE ANY REASON TO C ONCUR WITH THE SAME. THE CIT(A) IS FAIR ENOUGH IN NOT FINDING ANY FAULT PER SE WITH ASSESSEES DETAILED EVIDENCE COUPLED WITH THE VENDORS AFFIDAV IT/CONFIRMATION. WE OBSERVE IN THESE CIRCUMSTANCES THAT THE ABOVE STATE D PRESUMPTION OF REGISTERED DOCUMENTS PRESUMPTION STANDS REBUTTED I F CONSIDERED IN THE LIGHT OF ABOVE OVERWHELMING EVIDENCE BY APPLYING TH E PRINCIPLES OF PREPONDERANCE OF PROBABILITIES. IT THUS TRANSPIRES THAT THE ASSESSEE HAD NOT ITA NO. 1356/AHD /2015 SHRI PRAVINBHAI LALLUBHAI PATEL VS. ITO A.Y :- 2011-12 - 5 - PAID THE ENTIRE SALE CONSIDERATION AMOUNT TO HIS VE NDOR WHICH CHANGED HANDS POST FACTO SALE DEED EXECUTION. WE THUS ACCE PT ASSESSEES LATTER SUBSTANTIVE GROUND. THE IMPUGNED ADDITION OF RS.8 ,04,200/- STANDS DELETED ACCORDINGLY. THIS ASSESSEES APPEAL IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 23 RD APRIL, 2018 AT AHMEDABAD SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER AHMEDABAD; DATED 23/04/2018 *BT & '() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' $ / CONCERNED CIT 4. $ ( ) / THE CIT(A) 5. ' **' , ' , / DR, ITAT, AHMEDABAD 6. / / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD