Gurbachan Singh Kohli, New Delhi V. ITO, New Delhi

ITA 1533/DEL/2014

• Counselvise Citation: 153320114 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 30-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Keywords: Unexplained cash credit; Opportunity of being heard; Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1533 /DEL/201 4 (ASSESSMENT YEAR - 200 9 - 10 ) GURBACHAN SINGH KOHLI, FB - 13, TAGORE GARDEN, NEW DELHI - 110027. PAN - ABKPS5562L (APPELLANT) VS ITO, WARD - 26(2), NEW DELHI (RESPONDENT ) APPELLANT BY NONE RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER BY THE PRESENT APPEAL FILED BY THE ASSESSEE THE CORRECTNESS OF THE ORDER DATED 24.12.2013 OF CIT(A) - XVIII, NEW DELHI PERTAINING TO 2009 - 10 ASSESSMENT YEAR IS ASSAILED. AT THE TIME OF HEARING, AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE SEEKING TI ME HOWEVER CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO REJECT THE SAME AFTER CONSIDERING THE ARGUMENTS OF THE LD. SR. DR. ACCORDINGLY THE APPEAL O F THE ASSESSEE IS BEING DECIDED EX - PARTE FOR THE ASSESSEE APPELLANT ON ME RIT. 2. THE RELEVANT FACTS OF THE CASE ARE THAT BASED ON THE AIR INFORMATION WHERE THE ASSESSEE IS FOUND TO HAVE MADE CASH DEPOSIT OF RS.15,25,350/ - IN HIS SAVING BANK A/C THE RETURNED INCOME WAS SUBJECTED TO SCRUTINY ASSESSMENT. T HE ASSESSEE AS PER RECORD DECLARED TOTAL INCOME OF RS.2,18,200/ - . A FTER ISSUANCE OF NOTICE U/S 143(1)/143(2) ETC. THE RETURN WAS SUBJECTED TO SCRUTINY ASSESSMENT ON ACCOUNT OF THE AIR INFORMATION . THE RELEVANT EXTRACT FROM THE ASSESSMENT ORDER MAKING THE ADDITION OF RS.7,17,393/ - IS EXTRACTED HEREUNDER FOR READY - REFERENCE: - {7} GROUNDS OF APPEAL NO. 2 TO 5 ARE TAKEN TOGETHER AS THESE ARE INTER - LINKED AND HAVE BEEN TAKEN AGAINST ACTION OF AO BY WHICH HE HAS DATE OF HEARING 30 .0 6 .2015 DATE OF PRONOUNCEMENT 24 .0 7 .2015 I.T.A .NO. - 1533/ DEL/2014 PAGE 2 OF 3 MADE ADDITION OF RS.7,17,393/ - UNDER 'SECTION 69A. IN THIS REGARD, AO HAS MADE ADDITION BY OBSERVING IN THE ORDER AS UNDER: - 'AIR INFORMATION IN THIS CASE WAS RECEIVED THAT THE ASSESSEE HAD MADE CASH DEPOSIT OF RS. 15,25,350/ - IN HIS SAVING BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE, BESIDES CASH TRANSACTIONS OF RS.2,00,000/ - AND SHARE TRANSACTIONS OF RS. 2,72,575/ - . THE AR OF THE ASSESSEE STATED THAT THE SALE PROCEEDS OF FOOD GRAINS WERE DEPOSITED IN THE BANK ACCOUNT. THE ASSESSEE HAS NOT BEEN ABLE TO GIVE THE DETAILS OF PURCHASE OF FOOD GRAIN. TH E AR OF THE ASSESSEE STATED THAT THE FOOD GRAINS WERE PURCHASED IN THE IMMEDIATE PRECEDING YEAR AND NO BANK ACCOUNT IN SUPPORT OF HIS CONTENTION HAS BEEN FILED. A CURSORY LOOK ON THE BANK ACCOUNTS REVEALS THAT ASSESSEE HAD DEPOSITED CASH OF RS. 3 LACS ON 1 0TH OCTOBER, 2008 AND AGAIN RS. 3 LACS ON 11/10/08 WHICH IN ANY CASE CANNOT BE THE SALE PROCEEDS OF FOOD GRAINS. IN VIEW OF THIS IT IS CLEAR THAT THE ASSESSEE HAS NO EXPLANATION WITH REGARD TO CASH DEPOSITS IN HIS BANK ACCOUNT. TO MEET THE END OF JUSTICE I TREAT THE PEAK BALANCE OF THE ASSESSEE SHOWN AT RS. 7,17,393/ - AS ON 11.10.2008 AS THE UNEXPLAINED CASH CREDIT LYING IN HIS ACCOUNT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69A OF THE INCOME TAX ACT, 1961.' 2.1. THE ISSUE WAS CHALLENGE D IN APPEAL BEFORE THE CIT(A) WHO CAME TO THE FOLLOWING CONCLUSION: - 7.1. THE ADDITION HAS BEEN MADE ON THE BASIS OF AIR INFORMATION ABOUT CASH DEPOSIT OF RS. 15,25,350/ - IN THE SAVINGS BANK ACCOUNT, BESIDES CASH TRANSACTION OF RS. 2 LACS AND SHARE TRANSA CTION OF RS. 2,72,575/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO HAS MENTIONED THAT THERE ARE VARIOUS CASH DEPOSITS WHICH CANNOT BE SALE PROCEEDS OF FOODGRAIN. SO, AO HAS MADE ADDITION OF PEAK CREDIT AMOUNTING TO RS.7,17,393/ - . IN THIS REGARD, VARI OUS DETAILS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS HAD BEEN PERUSED AND I FOUND THAT LD. AR OF THE APPELLANT HAS RELIED ON THE FACT THAT TOTAL TURNOVER DURING THE PERIOD WAS OF RS.19,82,376/ - ONLY. THE LD. AR OF THE APPELLANT HAS ALSO RELIED ON VARIOUS CASE LAWS WHICH HAVE BEEN FOUND TO BE DISTINGUISHABLE ON THE FACTS OF THE CASE AND HAS ALSO CHALLENGED THE ACTION OF AO BY INVOKING PROVISIONS OF SECTION 69A OF THE INCOME TAX ACT, 1961. TO SOME EXTENT, THE OBJECTION OF LD. AR OF THE APPELLANT IS F OUND TO BE CORRECT BECAUSE CASH DEPOSIT IN THE BANK ACCOUNTS CANNOT BE ASSESSED UNDER SECTION 69A. FOR THIS, RELEVANT SECTION IS SECTION 68 OF THE INCOME TAX ACT, 1961. HOWEVER, AO HAS MADE ADDITION OF PEAK CREDIT AMOUNTING TO RS. 7,17,393/ - WHICH IS FOUND TO BE ON THE BASIS OF VARIOUS DETAILS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND AO HAS NOT ADDED WHOLE OF THE SUM CREDITED IN THE BOOKS OF ACCOUNTS. SO, IN MY OPINION, AO HAS MADE ADDITION OF PEAK CREDIT AFTER CONSIDERING THE EXPLANATION FILED BY THE APPELLANT DURING, THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, ADDITION MADE BY AO IS CONFIRMED BUT IT SHOULD BE TREATED AS ADDITION MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE DISCUSSION, GROUNDS OF APPEAL NO. 2 TO 5 ARE PARTLY ALLOWED. (EMPHASIS PROVIDED) I.T.A .NO. - 1533/ DEL/2014 PAGE 3 OF 3 3. A PERUSAL O F THE ABOVE SHOWS THAT THE FINDING UNDER CHALLENGE IS GENERAL, VAGUE AND CONTRADICTORY. THE SAID ORDER IS ASSAILED ON THE GROUND THAT THE CASH DEPOSIT WAS FULLY EXPLAINED AS PER GROUND NO. - 2 RAISED IN THE PRESENT PROCEEDINGS. HOWEVER THE ISSUE HAS NOT BEEN DISCUSSED. A PERUSAL OF THE IMPUGNED ORDER AS REPRODUCED EARLIER SHOWS THAT REFERENCE IS MADE TO VARIOUS DETAILS FILED DURING THE APPELLATE PROCEEDINGS, H OWEVER, WHAT WERE THE S E DETAILS IS NOT FOUND ADDRESSED IN THE ORDER. REFERENCE IS ALSO MADE TO SOME DECISIONS ON WHICH RELIANCE IS PLACED HOWEVER, THE L D. CIT(A) FAILS TO MENTION THESE DECISIONS ALSO. THUS THE CORRECTNESS OF THE CONCLUSION THAT THEY WERE DISTINGUISHABLE IS NOT OPEN TO JUDI CIAL SCRUTINY. ACCORDINGLY IN THE ABSENCE OF ANY RELEVANT DISCUSSION ON FACTS AND LAW WHICH ADMITTEDLY THE ASSESSEE PLEADED BEFORE THE CIT(A) THE FINDING ARRIVED AT DOES NOT INSPIRE ANY CONFIDENCE AND IS OPEN TO THE CHALLENGE OF BEING PERVERSE. IN VIEW THEREOF AFTER HEARING THE LD. SR. DR, IT I S CONSIDERED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE FILE TO THE LD. CIT(A) WITH THE DIRECTION TO DISCUSS THE RELEVANT FACTS AND ARGUMENTS SUPPOSEDLY ADVANCED BY THE ASSESSEE AND COME TO A CLEAR CUT FINDING ON FACTS . NEEDLESS TO SAY THAT THE LD. CIT(A) SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 4 T H OF JULY , 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 2 4 /07 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI