Meena garg, Alwar V. ITO, Alwar

ITA 152/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9703 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: RAJIV SOGANI
• Keywords: Unexplained cash credit; Gift; Source of fund; Corroborative evidences
• Section: 80C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 152/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 MEENA GARG, A-02, ASHIANA BAGEECHA, BHIWADI, ALWAR. CUKE VS. INCOME TAX OFFICER, WARD-2(2), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFKPG 5947 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJIV SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06/03/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 07/03/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 04/12/2015 PASSED BY THE LD. CIT(A), ALWAR FOR THE A .Y. 2011-12, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. IN ADDING A SUM OF RS. 11,33,000/- AS ALLEGED UNEXPLAINED INCOME INTRODUCED IN CAPITAL ACCOUNT. THE ACTION OF THE LD. CIT(A) IS ITA 152/JP/2016_ MEENA GARG VS ITO 2 ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 11,33,000/-. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. A.O. IN NOT ALLOWING THE DEDUCTION OF RS. 9850/- U/S 80C. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ALLOWING THE SAID DEDUCTION OF RS. 9850/- U/S 80C. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. A.O. IS DISALLOWING A SUM OF RS. 10,000/- OUT OF TOTAL DISALLOWANCE OF RS. 18,197/- ON ACCOUNT OF VARIOUS EXPENSES. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ALLOWING THE SAID ADDITION OF RS. 10,000/-. 2. THE ASSESSEE IS PROPRIETOR OF M/S SWASTIK ENTERPRI SES AND HAS FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 28/09/2011 DECLARING TOTAL INCOME OF RS. 7,34,277/- . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSMEN T WAS COMPLETED ON 21/2/2014 WHEREIN CERTAIN ADDITIONS HAVE BEEN MA DE. ITA 152/JP/2016_ MEENA GARG VS ITO 3 3. GROUND NO. 1 OF THE APPEAL IS AGAINST SUSTAINING THE ADDITION OF RS. 11,33,000/- ON ACCOUNT OF UNEXPLAINED INCOME IN TRODUCED IN CAPITAL ACCOUNT. THE ASSESSEE CLAIMED THAT THE ASSESSEE WAS H AVING TWO BANK ACCOUNTS, ONE WAS SAVINGS BANK ACCOUNT FOR PERSONAL PURPOSES AND ANOTHER WAS CURRENT ACCOUNT FOR BUSINESS PURPOSES. D URING THE YEAR UNDER CONSIDERATION, CAPITAL TO THE EXTENT OF RS. 1 1,33,000/- WAS INTRODUCED. THIS MONEY WAS INTRODUCED OUT OF FUNDS WH ICH WERE, PRIOR TO SUCH INTRODUCTION, TRANSFERRED FROM CURRENT ACCO UNT OF M/S SWASTIK ENTERPRISES TO PERSONAL SAVINGS BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF CAPITAL INTRODUCED FOR RS. 11,33,000/- AS CLAIMED AS PER ITS CAPITAL ACCOUNT, WHICH IS TREATED AS BOGUS CAPITAL INTRODUCED AND UNDISCLOSED INCOME OF THE ASSESSEE AND THE SAME IS ADDED BACK TO THE INCOME OF THE ASSESSE E. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WH O AFTER CONSIDERING THE SUBMISSIONS HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 11,33,000 HAS BEEN MADE BY THE AO ITA 152/JP/2016_ MEENA GARG VS ITO 4 ON ACCOUNT OF UNEXPLAINED CREDITS IN THE CAPITAL ACCOUNT OF THE APPELLANT. THE ADDITION WAS MADE ON THE GROUND THAT CERTAIN AMOUNTS HAVE BEEN INTRODUCED IN THE CAPITAL ACCOUNT BY WAY OF TRANSFER ENTRIES IN THE BANK ACCOUNT OF THE BUSINESS M/S SWASTIK ENTERPRISES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS COMPLETE DETAILS OF ALL THE BANK ACCOUNTS MAINTAINED BY THE APPELLANT WERE SOUGHT BY THE AO AND IT WAS FOUND THAT A SAVINGS BANK ACCOUNT IN THE NAME OF THE PROP. SMT. MEENA GARG HAS NOT BEEN DISCLOSED. THE AO WHILE SCRUTINIZING THE DETAILS OF CAPITAL INTRODUCTION FO UND THAT TRANSFER OF FUNDS HAVE BEEN RECEIVED IN THE BUSINESS ACCOUNT FROM THE UNDISCLOSED SAVINGS ACCOUNT OF THE PROPRIETOR. 4.4 THE AO HAS FURTHER STATED IN THE ORDER THAT MONE Y HAS BEEN TRANSFERRED FROM THE BUSINESS ACCOUNT WITHOUT REDUCING THE CAPITAL ACCOUNT BALANCE TO THE SAVINGS ACCOUNT OF THE PROPRIETOR AND VICE-A-VERSA ALSO. THE DETAILS OF THE TRANSACTIONS SO CARRIED OUT HAVE BEEN GIVEN IN PARA 1.8 ON PAGE 5 OF THE ORDER. THUS, AO HAS GIVEN A FINDING THAT A CAPITAL INTRODUCTION OF RS. 10 LACS BY WAY OF CHEQUES FROM THE UN DISCLOSED SAVINGS ACCOUNT OF THE PROPRIETOR HAS TO BE TREATED AS UNEXPLAINED INCOME OF THE APPELLANT. FURTHER, IT IS STATED THAT 1,33,000 HAS ITA 152/JP/2016_ MEENA GARG VS ITO 5 BEEN INTRODUCED IN THE CAPITAL ACCOUNT BY WAY OF CASH CONTRIBUTION AND IN THE ABSENCE OF ANY EVIDENCE, THE SAME WAS ALSO HELD TO BE UNEXPLAINED INCOME. 4.5 THE APPELLANT HAS STATED THAT AN AMOUNT OF RS. 1 0 LACS WAS TRANSFERRED THROUGH THE BANK ACCOUNT AND A CHEQUE NO. 370177 OF RS. 5 LACS WAS INTRODUCED ON 13-04-2010 AND A CHEQUE NO. 370178 OF RS. 5 LACS WAS INTRODUCED ON 28-04- 2010. THE AMOUNT OF RS. 1,15,000 WAS DEPOSITED IN CASH ON 15-06-2010 AND RS. 18,000 WAS DEPOSITED ON 20-03-2011. THE SOURCES OF CASH DEPOSITED ARE STATED TO BE ON ACCOUNT OF CASH WITHDRAWAL OF RS. 65,000 FROM THE BANK ACCOUNT ON VARIOUS DATES AND FURTHER AMOUNT IS ON ACCOUNT OF SAVINGS OF POCKET MONEY FROM HER HUSBAND AND OCCASIONAL GIFT RECEIVED. FURTHER, CASH DEPOSIT OF RS. 18,000 IS OUT OF MONEY RECEIVED FROM FATHER-IN-LAW. 4.6 HAVING CONSIDERED THE EVIDENCE PLACED ON RECORD , I FIND THAT THE TRANSACTIONS OF FUND TRANSFER BETWEEN THE SAVINGS ACCOUNT OF THE PROPRIETOR AND BUSINESS ACCOUNT HAVE BEEN REPETITIVE IN NATURE AND HAVE NOT BEEN COMPLETELY REFLECTED IN THE ACCOUNTS BOOKS. THESE TRANSACTIONS HAVE NOT BEEN ROUTED THROUGH THE CAPITAL ACCOUNT OF THE PROPRIETOR. IT IS SEEN F ROM THE COPY OF THE SAVINGS ACCOUNT FILED BY THE ITA 152/JP/2016_ MEENA GARG VS ITO 6 APPELLANT IN THE COURSE OF APPELLATE PROCEEDINGS TH AT THERE HAVE BEEN FREQUENT TRANSACTIONS BETWEEN THE TWO ACCOUNTS, FOR INSTANCE, RS. 1 LAC HAS BEEN TRANSFERRED IN THE SAVINGS ACCOUNTS ON 31-07-2010 AND RS. 2 LACS ON 04- 01-2011. SIMILARLY, THERE HAV E BEEN TRANSACTIONS OF TRANSFER OF FUNDS TO M/S SWASTI K ENTERPRISES OF RS. 7 LACS ON 23-01-2010 FROM THE SAVING ACCOUNT OF THE PROPRIETOR (WHICH THOUGH FALL S IN THE PRECEDING YEAR). THUS, I HOLD THAT APPELLANT HAS FAILED TO EXPLAIN THE SOURCES OF CREDITS AND AO WAS JUSTIFIED IN TREATING THE AMOUNT OF RS. 10 LACS CREDITED IN THE CAPITAL ACCOUNT ON ACCOUNT OF BANK TRANSFERS FROM THE SAVINGS ACCOUNTS AS UNEXPLAINED INCOME OF THE APPELLANT. 4.7 FURTHER, I FIND THAT AS REGARDS, THE CONTRIBUTI ON OF RS. 1,33,000 IN CASH BY THE PROPRIETOR IN THE CAPIT AL ACCOUNT IS CONCERNED, THE APPELLANT HAS FAILED TO FURNISH ANY SUPPORTING EVIDENCE TO SUBSTANTIATE ITS CONTENTIONS. THE EXPLANATION FURNISHED IN THIS REGAR D IS VAGUE AND TOO GENERALIZED AND IS SELF SERVING IN NATURE. THE APPELLANT HAS FAILED TO BRING ON RECORD ANY EVIDENCE WITH REGARD TO THE ACCUMULATION OF CASH AND SOURCES THEREOF. NO CONFIRMATION, SOURCES OF INCOME, ETC. OF THE OTHER PERSONS HAS BEEN FILED TO SUBSTANTIATE THE CONTENTIONS. THUS, I HOLD THAT APPELLANT HAS FAILED TO EXPLAIN THE SOURCES OF CASH ITA 152/JP/2016_ MEENA GARG VS ITO 7 CREDITS IN THE CAPITAL ACCOUNT AND AO WAS JUSTIFIED IN TREATING THE AMOUNT OF RS. 1,33,000 CREDITED IN THE CAPITAL ACCOUNT AS UNEXPLAINED INCOME OF THE APPELLANT. 4.8 THUS, I CONFIRM THE ADDITION OF RS. 11,33,000 MA DE BY THE AO ON ACCOUNT OF UNEXPLAINED INCOME INTRODUCED IN THE CAPITAL ACCOUNT OF THE APPELLANT. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE ME. THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS AS MADE BEFOR E THE LOWER AUTHORITIES AND PRAYED TO ALLOW THE APPEAL. 6. THE LD SR. DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 7. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM PERUSAL OF THE ORDER OF THE LD. CIT(A), IT TRANSPIRES THAT THERE IS NO CLEAR CUT FINDING REGAR DING THE SOURCE OF CAPITAL IN PROPRIETORY CONCERN AND ALSO IN THE SAVI NGS BANK ACCOUNT OF THE ASSESSEE. IN ABSENCE OF SUCH VITAL FACTS, THIS ISSUE CANNOT BE DECIDED IN EITHER WAY, THEREFORE, IN THE INTEREST OF JUSTICE AND EQUITY, I FEEL IT APPROPRIATE TO REMAND THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. ITA 152/JP/2016_ MEENA GARG VS ITO 8 ON THE OTHER TWO SMALL ISSUES, THE LD AR SUBMITTED THAT THERE MAY ALSO BE RESTORED TO THE FILE OF THE ASSESSING O FFICER AS THE SAME NEEDS SAME VERIFICATION AT THE LEVEL OF ASSESSING O FFICER PRIOR TO TAKING ANY DECISION ON THESE ISSUES. AFTER HEARING BOTH TH E SIDES, THE ISSUES RAISED IN THE GROUND NO. 2 AND 3 OF THE APPEAL WITH REGARD TO THE CLAIM OF DEDUCTION U/S 80C OF THE ACT AND DISALLOWANCE OUT OF VARIOUS EXPENSES ARE ALSO RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 07/03/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07 TH MARCH, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. MEENA GARG, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-2(2), ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 152/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR