DINESH H. BOTHRA, MUMBAI V. I.T.O. - 21(1)(1), MUMBAI

ITA 1585/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75900 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV JAIN
• Assessee Lawyers: VIMAL PUNMIYA
• Keywords: Unexplained cash credit; Gift; Business income; Income from undisclosed sources

Judgement Text

, MH MHMH MH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.1585/MUM/2011, ! ! ! ! / ASSESSMENT YEAR-2005-06 DINESH H. BOTHRA C-401, KAILASH, JUHU CHURCH ROAD, VILE-PARLE(W) MUMBAI-400049 VS I.T.O. -21 (1)(1) PRATYAKSHKAR BHAVAN, BKC, BANDRA(E), MUMBAI-400051 PAN:ADOPB3143J ( '# / APPELLANT) ( $%'# / RESPONDENT) &' ( ) / ASSESSEE BY : SHRI VIMAL PUNMIYA ( ) / REVENUE BY : SHRI SANJEEV JAIN ( (( ( '+ '+ '+ '+ / DATE OF HEARING : 18-02-2014 ,-! ( '+ / DATE OF PRONOUNCEMENT : 14-03-2014 , 1961 ( (( ( 254 )1( '.' '.' '.' '.' / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DT. 24.11.2010 OF THE CIT(A)- 32,MUMBAI,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE A ND IN THE LAW, THE LEARNED A.O. ERRED IN ADDING LOAN OF RS. 2,50,000/- TAKEN ON 06.11.2004 FROM HIS DAUGHTER BHARTI BOTHRA FOR WHICH LOAN CONFIRMATION & XEROX OF BANK PASS BOOK WERE DULY SU BMITTED BY HOLDING IT AS UNEXPLAINED. 2.IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN THE LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ALSO ERRED IN CONFIRMING ADDITI ON OF LOAN OF RS. 250000 TAKEN ON 6-11-2004 FROM HIS DAUGHTER BHARTI BOTHRA FOR WHICH LOAN CONF IRMATION & ZEROX OF BANK PASS BOOK DULY SUBMITTED BY HOLDING IT AS UNEXPLAINED. 2. ASSESSEE AN INDIVIDUAL ENGAGED IN THE BUSINESS OF R ENT, BUSINESS RECEIPTS, CAPITAL GAINS & INCOME FROM OTHER SOURCES,FILED HIS RETURN OF INCO ME ON 30.11.2005 DECLARING TOTAL INCOME OF RS.83,783/-.ASSESSING OFFICER (AO) FINALISED THE AS SESSMENT ORDER U/S.143(3) OF THE ACT, ON 24.12.2007,DETERMINING THE TOTAL INCOME AT RS. 8,00 ,150/-. THE EFFECTIVE GROUND OF APPEAL IS ABOUT ADDITION OF RS.2,50,000/- TO THE INCOME OF THE ASSESSEE.DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT THE ASSESSEE HAD TAKEN LOAN FROM HIS DAUGHTER.WHEN THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS IN RESPECT OF LOANS TAKEN, THE COPY OF BANK STATEMENTS OF THE DAUGHTER WAS FILED. AFTER GO ING THROUGH THE BANK STATEMENT, IT WAS NOTED BY THE AO THAT ON 4.10.2004 A SUM OF RS.2,00,000 WA S SHOWN AS PAID TO THE APPELLANT AND FURTHER AMOUNT OF RS. 90,000 WAS SHOWN TO BE TRANSFERRED BY CHEQUE TO S.B.A/C. NO. 77771 OF THE APPELLANT ON 05.11. 2004.SUBSEQUENTLY ON 6/11/2004 AN AMOUNT OF RS.2,50,000/- WAS DEPOSITED IN CASH ON IN THE ACCOUNT OF HIS DAUGHTER. ON THESE FA CTS, THE AO CONCLUDED THAT ASSESSEE HIMSELF HAD DEPOSITED THE CASH IN HER DAUGHTERS ACCOUNT,THAT S HE TRANSFERRED THE SAID AMOUNTS IN THE FORM OF LOAN BACK TO HER FATHER. AO,ASKED THE ASSESSEE TO E XPLAIN WHY THIS SUM OF RS.3,47,000/- SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE,AO HELD THAT WHOLE ARRANGEMENT OF DEPO SITING THE CASH IN DAUGHTERS ACCOUNT AND 2 ITA NOS. 1585/MUM/2011 DINESH H. BOTHRA GIVING BACK AS LOAN TO THE FATHER WAS A SHAM TRANSA CTION,THAT THE AMOUNT TAKEN AS LOAN WAS NOTHING BUT THE UNACCOUNTED INCOME OF THE ASSESSEE ROUTED A S UNSECURED LOANS.ACCORDINGLY, THE ABOVE AMOUNTS WERE ADDED U/S.68 BY THE AO. 3 .AGGRIEVED BY THE ORDER OF THE AO,ASSESSEE PREFERRE D AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE,HE CALLED FOR REMAND REPORT FROM THE AO.IN HIS REMAND REPORT DATED 15.10.2010 T HE AO STATED THAT THE AMOUNT OF RS.90000 GIVEN AS LOAN BY THE DAUGHTER OF THE ASSESSEE COULD BE CONSIDERED A GENUINE LOAN TRANSACTION,THAT AT THAT POINT OF TIME THE ASSESSEES DAUGHTER WAS H AVING SUFFICIENT CREDIT BALANCE IN HER BANK ACCOUNT.HOWEVER IN RESPECT OF THE BALANCE AMOUNT OF RS.2,50,000/- TRANSFERRED BY DAUGHTER TO THE ASSESSEE,HE HELD THAT IT WAS ENTIRELY OUT OF THE CA SH DEPOSITED IN HIS DAUGHTERS ACCOUNT FROM UNEXPLAINED SOURCES. AS PER THE FAA,AFTER GOING THROUGH BANK STATEMENTS OF THE ASSESSEE, AS WELL AS THAT OF HIS DAUGHTER,HE FOUND THAT ON 3.6.2004 THERE WAS A WIT HDRAWAL FROM THE BANK ACCOUNT OF THE DAUGHTER OF RS.50,000 BY THE ASSESSEE BY WAY OF BEARER CHEQUE,THAT ON 4.1 0.2004 A SUM OF RS 2,00,000/- HAD BEEN WITHDRAWN FROM THE BANK ACCOUNT OF THE DAU GHTER BY THE ASSESSEE BY WAY OF BEARER CHEQUE,THAT IF THE AMOUNTS WERE WITHDRAWN EARLIER A S EARLY AS IN THE MONTHS OF JUNE & OCTOBER, THEN HOW THE SAID AMOUNTS WERE AVAILABLE FOR BEING RE-DEPOSITED BACK IN THE BANK ACCOUNT ON 6.11.2004,THAT THE ASSESSEE HAD SATISFACTORI1Y EXPL AINED THE ENTIRE TRANSACTION,THAT NO EVIDENCE FOR THE AVAILABILITY OF THE CASH OUT OF THE WITHDRAWALS MADE EARLIER FOR PERSONAL NEEDS WAS PRODUCED,THAT THE PLEA OF THE ASSESSEE THAT THOSE A MOUNTS WERE WITHDRAWN FOR PERSONAL NEEDS SUGGESTED THAT IT WOULD HAVE BEEN USED FOR SUCH NEE DS,THAT THE WITHDRAWALS OF RS.50000 AND RS.2,00,000 HAD BEEN MADE ON TWO OCCASIONS WHICH IT SELF SUGGESTED THAT WITHDRAWAL OF RS.2,00,000 AT SECOND OCCASION WOULD HAVE BEEN MADE ONLY WHEN THE FIRST WITHDRAWAL OF RS.50000 WAS UTILISED,THAT CLAIM MADE BY THE ASSESS EE THAT THE CASH OF RS.2,50,000 DEPOSITED ON 6.11.2004 WAS AVAILABLE OUT OF THE WITHDRAWALS MADE EARLIER WAS NOT ACCEPTABLE,THAT THE BALANCES IN THE ACCOUNT OF THE DAUGHTER OF THE ASSESSEE AT T HE OPENING OF THE YEAR WERE LESS THAN 10000,THAT AT THE CLOSE OF THE YEAR ALSO IT WAS ONLY 10000 TO 11000,THAT OPENING AND CLOSING BALANCES SUGGESTED THAT EXCEPT FOR THE PERIOD JUST BEFORE TH E GIVING OF MONEY THE DAUGHTER WAS NOT HAVING MUCH MONEY IN HER A/C AND HENCE SHE DID NOT HAVE EN OUGH CREDITWORTHINESS AND CAPACITY TO LEND THE AMOUNT OF LOAN OF RS.2,50,000 OVER AND ABOVE TH IS LOAN OF RS.90000 ALREADY GIVEN BY HER OUT OF HER ACCUMULATED BALANCE,THAT FROM THE PERUSAL OF THE BANK STATEMENT OF THE ASSESSEE, IT WAS SEEN THAT THERE WAS A DEPOSIT BY CASH OF RS.2,00,000 ON 4.11.2004 AND 3,00,000 ON 6.11.2004 WHICH FURTHER SUGGESTED THAT EVEN IF SOME CASH WAS AVAILA BLE OUT OF THE EARLIER WITHDRAWALS MADE FROM THE BANK ACCOUNT OF THE DAUGHTER THE SAME MIGHT HAV E ALREADY BEEN DEPOSITED IN THE BANK ACCOUNT OF THE FATHER ON THE ABOVE DATES. FINALLY HE CONCLU DED THAT SAME CREATED A SUSPICION ON THE CLAIM OF THE ASSESSEE THAT THE CASH OF RS.2,50,000/- DEPO SITED IN CASH IN THE BANK ACCOUNT OF DAUGHTER ON 6/11/2004 WAS OUT OF THE EARLIER WITHDRAWALS MADE F ROM HER ACCOUNT.REFERRING TO THE CASES OF (SUMATI DAYAL 214 ITR 804),ASHOK MAHINDRU (173 TAX MAN178),PREM NATH GOEL & CO.(271 ITR 390), P MOHANKALA (291 ITR 278),DIZA HOLDINGS (255 ITR 573) AND PRECISION FINANCE(208ITR265),SHE CONFIRMED THE ADDITION MADE BY THE AO. 4. BEFORE US,AR SUBMITTED THAT ASSESSEE HAD MADE CASH WITHDRAWAL OF RS. 2.5 LACS FROM THE ACCOUNT OF HER DAUGHTER ON HER BEHALF AND LATER ON IT WAS RE-DEPOSITED IN HER BANK ACCOUNT, THAT THE COPY OF A BANK PASS-BOOK PROVED THE WITHDRAWAL AND RE-DEPOSITING OF THE SAID AMOUNT, THAT HIS DAUGHTER HAD RECEIVED THE SAID AMOUNT ON MATURITY O F UTI CHILDREN GROWTH GIFT FUND (CGGF) ON HER BECOMING MAJOR, THAT ASSESSEE HAD PROVED THE SO URCES OF FUND, THAT LOAN TRANSACTION FROM HIS DAUGHTER WAS FILED,THAT THE LOAN WAS A BONAFIDE TRA NSACTION,THAT THE ADDITION WAS MADE ON THE BASIS OF SUSPICION ONLY,THAT ASSESSEE WANTED TO PURCHASE THE PROPERTY IN THE NAME OF HIS DAUGHTER,THAT TRANSACTION TO PURCHASE A PROPERTY DID NOT MATERIAL ISE,THAT THE MONEY WAS RE-DEPOSITED IN THE BANK ACCOUNT ON 06.11.2004,THAT FAA HAD NOT INDICATED AN Y MATERIAL WHICH COULD PROVE THAT AMOUNTS WITHDRAWN HAD BEEN UTILISED FOR SOME OTHER PURPOSES ,THAT THE DAUGHTER OF THE ASSESSEE HAD 3 ITA NOS. 1585/MUM/2011 DINESH H. BOTHRA SUFFICIENT BALANCE-SHEET IN THE BANK ACCOUNT BEFORE ADVANCING LOAN TO THE ASSESSEE,THAT SHE HAD RECEIVED SEVERAL AMOUNTS BY WAY OF REDEMPTIONS OF U NITS OF CGGF, THE TOTAL AMOUNT RECEIVED OUT OF SUCH REDEMPTIONS WAS OF RS. 4.04 LACS.HE REFERRE D TO PAGE NO. 12 TO 21 OF THE PAPER BOOK ALONG WITH THE PAGE NO.7 & 8.HE RELIED UPON THE ORDER OF KULWANT RAI (163TAXMAN585),SUPER TECH AGRO OILS (P) LTD. SANJEEV KAPOOR(ITA91/DEL/2010),R ASIDA BANO, BASIRAM AND MOHD.ASLAM (205 TAXATION 58)HE ALSO REFER TO THE ORDER OF C BENCH MUMBAI IN THE CASE OF MR. CHANDRABAN LACHHMI ARORA (ITA 1199/MUM/2012-AY-2008-09 DT. 08. 01. 2014). DR SUPPORTED THE ORDER OF THE AO/FAA. 5 .WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US.WE FIND THAT ADDITION WAS SUSTAINED BY THE FAA ON THE BASIS THAT CASH WAS DEPOSITED IN BANK AND SAME WAS TRANSFERRED TO THE ASSESSEE AS A LOAN.WE FIND THAT ASSESSEE HAD PRODUCED EVIDENCES OF REDEMPTION OF UNITS OF CGGF BEFORE THE AO AND FAA AND THE AMOUNT RECEIVED BY THE DAUGHTER OF THE ASSESSEE WAS MORE THAN RS.4 LACS.WE ARE AWARE THAT THERE WERE CASH DE POSITS,BUT THE ASSESSEE HAD EXPLAINED THE SOURCES OF DEPOSIT BY PRODUCING COPY OF THE BANK AC COUNT AND REDEMPTION CERTIFICATE OF UTI CHILDREN GROWTH GIFT FUND.IN OUR OPINION,IF THE ASS ESSEE HAS CASH ON HAND ON A PARTICULAR DATE IT JUST CANNOT BE HELD THAT SAME CANNOT BE DEPOSITED I N BANK ACCOUNT ON A LATER DATE.FAA HAD CONFIRMED THE ADDITION RELYING BY THE DECISION OF S UMATI DAYAL,DELIVERED BY THE HONBLE SUPREME COURT. IN OUR OPINION,THAT MATTER IS NOT RELEVANT F OR DECIDING THE ISSUE BEFORE US.IN THAT MATTER ASSESSEE HAD SHOWN INCOME FROM HORSE RACING AND WIN NING JACKPOTS.IN THE MATTER BEFORE US,DAUGHTER OF THE ASSESSEE HAD SUFFICIENT FUND TO ADVANCE LOANS.SHE HAD ALSO CONFIRMED THE TRANSACTION.CONSIDERING THE PECULIAR FACTS AND CIRC UMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT FAA WAS NOT JUSTIFIED IN UPHOLDING THE ORDER O F THE AO.WE FIND THAT IN CASE OF CHANDRABAN LACHHMI ARORA (SUPRA) IN THE SIMILAR CIRCUMSTANCES, TRIBUNAL HAD HELD THAT AO DID NOT DISCHARGE ONUS ON THE ISSUE THAT CASH WITHDRAWN ON A PARTICUL AR DATE SHOULD NOT BE THE SOURCE OF CASH DEPOSIT AT A LATER DATE AND THAT AO HAD NOT ANSWERED THE QU ESTION AS WHERE THE CASH WITHDRAWN BY THE ASSESSEE WAS USED BY THE ASSESSEE IF SAME WAS NOT R E-DEPOSITED IN THE BANK ACCOUNT SUBSEQUENTLY.FAA,IN HIS FINAL CONCLUSION,HAS STATED THAT WITHDRAWAL AND DEPOSIT OF MONEY IN THE BANK ACCOUNT CREATED SUSPICION.IT IS ACCEPTED PRINC IPLE OF TAXATION JURISPRUDENCE THAT SUSPICION, HOWEVER STRONG IT MAY BE,CANNOT BE BASIS FOR FASTEN ING TAX LIABILITY UPON AN ASSESSEE.AS THE ASSESSEE HAD DEMONSTRATED THAT HE HAD SOURCE FROM W HERE THE DEPOSITS COULD HAVE COME,SO,WITHOUT REBUTTING HIS SUBMISSIONS WITH COGE NT REASONS,NO ADDITION CAN BE MADE U/S.68 OF THE ACT.WE FIND THAT IN THE CASE OF PREM NATH GOEL & CO.(SUPRA)TRIBUNAL HAD GIVEN A CATEGORICAL FINDING THAT THERE WAS NO EVIDENCE OF THE AVAILABIL ITY OF THE AMOUNT OF RS. 3 LAKHS WITH THEM ON THE DATES OF THE DEPOSIT WITH THE ASSESSEE AND THE DRAFTS FOR THE MONEY PURPORTEDLY GIVEN BY THE CREDITORS IN CASH WERE OBTAINED BY THE ASSESSEE.CLE ARLY,FACTS OF THE CASE RELIED UPON BY THE FAA ARE DISTINGUISHABLE.CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION WE ARE OF THE OPINION,THAT ASSESSEE H AD DISCHARGED HIS ONUS ABOUT PROVING THE SOURCE OF DEPOSIT.THEREFORE, REVERSING THE ORDER OF THE FAA,WE DECIDE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESULT, APPEAL FIL ED BY THE ASSESSEE STANDS ALLOWED. 0'1 &' 2 3 4' ( ' 56. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH,2014 . / ( ,-! 8 9 14 EKPZ EKPZ EKPZ EKPZ , 201 4 - ( . : SD/- SD/- ( MK MKMK MK0 00 0 ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 9 /DATE: 14.03.2014. SK 4 ITA NOS. 1585/MUM/2011 DINESH H. BOTHRA / / / / ( (( ( $'; $'; $'; $'; <;!' <;!' <;!' <;!' / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ = > , 4. THE CONCERNED CIT / = > 5. DR D BENCH, ITAT, MUMBAI / ;?. $' M MM MH HH H , . . . 6. GUARD FILE/ . 0 %;' %;' %;' %;' $' $'$' $' //TRUE COPY// / / BY ORDER, @ / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI