ITO, New Delhi V. Sh. Deepak Chawla, New Delhi

ITA 1626/DEL/2013

• Counselvise Citation: 162620114 RSA 2013
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DEVI SHARAN SINGH
• Keywords: Additional evidence
• Section: 143(3); 68; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE S MT. DIVA SINGH , JM AND SH. O.P.KANT , AM ITA NO. 1626 /DEL./20 1 3 ASSTT. YEAR : 200 8 - 09 ITO, WARD - 26(3), ROOM NO.1809, E - 2, BLOCK, 18 TH FLOOR, CIVIC CENTER, NEW DELHI VS DEEPAK CHAWLA, D - 19, OM VIHAR, UTTAM NAGAR, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AEPPL9361R A PPELLANT BY : SH. DEVI SHARAN SINGH, SR. DR RE SPONDENT BY : NONE. DATE OF HEARING : 2 9 . 10 .2015 DATE O F PRONOUNCEMENT : 30 . 10 .2015 ORDER PER O.P.KANT , A.M. THIS APPEAL OF THE R EVENUE IS DIRECTED AGAINST THE ORDER OF THE L EARNED COMMISSIONER OF INCOME - TAX (A PPEALS ) - XXIV, NEW DELHI DATED 29.01.2013 IN RESPECT TO ASSESSMENT YEAR 2008 - 09. THE R EVENUE HAS RAISED FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AND IN LAW CIT(A) ERRED IN - 2. RESTRICTING THE ADDITION OF RS.27,000/ - AGAINST RS.20,27,289/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INCOME U/S 68 OF THE INCOME TAX ACT. 3. ACCEPTING ADDITIONAL EVIDENCE IN THE FORM OF CASH FLOW STATEMENT WHICH WAS NOT PRODUCED BEFORE THE AO IN THE CO NTRAVENTION TO RULE 46A. ITA NO. 1626 - 66 /DE L/20 1 3 2 2. FACTS IN BRIEF AS CULLED OUT FROM THE ORDER OF THE LOWER AUTHORITIES ARE THAT THE ASSESSEE WAS AN INDIVIDUAL AND WAS RUNNING A GENERAL STORE IN THE NAME AND STYLE OF M/S. CHAWLA GENERAL STORE DURING THE RELEVANT PERIOD OF TIM E. THE ASSESSEE FILED RETURN OF INCOME ON 20.01.2009 DECLARING TOTAL INCOME OF RS.1,27,240/ - . THE CASE WAS SELECTED FOR SCRUTINY THROUGH COMPUTER ASSISTED SELECTION OF SCRUTINY ( CASS ) . IN THE COURSE OF THE SCRUTINY PROCEEDINGS , THE LEARNED ASSESSING OFFIC ER (IN SHORT AO) OBSERVED CASH DEPOSIT OF RS.19,27,289/ - IN SAVING BANK ACCOUNT WITH ICICI BANK AND CASH DEPOSIT OF RS.1 LAKH IN S AVING BANK A CCOUNT WITH KOTAK MAHINDRA BANK. IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 ( IN SHORT ACT) ON 23.12.2010, T HE LD. AO HELD THAT EVEN AFTER PROVIDING SO MANY OPPORTUNITIES, NO REPLY WAS FILED BY THE ASSESSEE REGARDING SOURCE OF CASH DEPOSITS , AND THEREFORE , CASH DEPOSITS OF RS. 20,27,289/ - APPEARING IN BOTH THE ACCOUNTS WERE HEL D AS UNEXPLAINED CA SH CREDITS UNDER SECTION 68 OF THE ACT. 3. AGGRIEVED , THE ASSESSEE FILED AN APPEAL BEFORE THE L EARNED COMMISSIONER OF INCOME - TAX( APPEALS) [ IN SHORT CIT(A) ] . THE LD. CIT(A) IN HIS ORDER HAS MENTIONED THAT , AFTER FILING THE APPEAL, THE ASSESSEE DEMISED AT THE YOUNG AGE OF AROUND 40 YEARS AND HIS WIFE SMT. MINU CHAWALA, BEING LEGAL HAIR OF THE ASSESSEE, AUTHORISED MR ARJUN GUPTA, ITA NO. 1626 - 66 /DE L/20 1 3 3 CA AS AUTHORISED REPRESENTATIVE ( IN SHORT AR) TO APPEAR IN APPELLATE PROCE EDINGS . BEFORE THE LD CIT(A) , THE LD. AR SUBMITTED THAT CASH WAS DEPOSITED OUT OF PERSONAL SAVING S , OPENING CASH BALANCE AND BUSINESS TURNOVER OF THE ASSESSEE AND THE CASH WITHDRAWN FROM THE BANK WAS RE - DEPOSITED TO INCREASE THE VOLUME OF MONEY TRANSACTIO NS IN THE BANK. THE LD. AR PREPARED A CASH FLOW STATEMENTS ON THE BASIS OF BANK STATEMENT S AND SUBMITTED TO THE LD. CIT(A). THE LD CIT(A) OBSERVED A NEGATIVE CASH BALANCE OF RS.26,998/ - IN THE CASH FLOW STATEMENT DURING PERIOD FROM 1 ST JULY TO 15 TH JULY. 2 007. FURTHER , THE LD CIT(A) OBSERVED THAT CASH OF RS.12,59,750/ - WAS WITHDRAWN FROM BANK ACCOUNTS DURING THE PREVIOUS YEAR , WHICH HAS BEEN UTILIZED FOR RE - DEPOSIT IN BANKS. FURTHER , HE ALSO OBSERVED THAT THE ASSESSEE HAD DECLARED A CASH TURNOVER OF RS.9,02,219/ - FROM HIS BUSINESS AND THERE WAS A OPENING CASH BALANCE OF RS.1,52,312/ - , WHICH HAD ALSO BEEN UTILISED FOR DEPOSIT IN BANKS . IN VIEW OF THE AVAILABILITY OF CASH FROM WITHDRAWAL, BUSINESS TURNOVER AND OPENING BALANCE , THE LD CIT(A) HELD THAT CASH AVAILABILITY WITH THE APPELLANT WAS MORE THAN CASH DEPOSIT OF RS.20,27,289/ - , BUT IN VIEW OF THE NEGATIVE CASH BALANCE FROM 1 ST JULY TO 15 TH JULY, 2007 OF RS.26,998 / - , H E SUSTAINED THE ADDITION OF RS.27,000/ - . 4. AGGRIEVED THE R EVENUE IS BEFORE US. ITA NO. 1626 - 66 /DE L/20 1 3 4 5. THE L EARNED SENIOR DEPARTMENTAL REPRESENTATIVE ( IN SHORT SR DR) RELIED ON THE ORDER OF THE LD. AO AND SUBMITTED THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF DEPOSITS IN BANKS , WHEREAS, ON THE OTHER HAND AN APPLICATION FOR ADJOURNMENT WAS FILED BY THE WIFE OF THE ASSESSEE , WHICH WAS REJECTED . 6. WE HAVE HEARD THE SUBMISSION OF THE REVENUE AND PERUSED THE MATERIA L AVAILABLE ON RECORD. W E ARE OF THE OPINION THAT THE LD CIT(A) HAS THOROUGHLY EXAMINED THE AVAILABILITY OF CASH BALANCE AND IN VIEW OF THE WITHDRAWALS FROM BANKS , CASH GENERATED FROM BUSINESS TURNOVER AND OPENING CASH BALANCE , THE DEPOSIT S OF RS.20,27,289/ - IN BANKS STANDS FULLY EXPLAINED AND SUSTAINED AN ADDITION OF RS.27,000/ - IN VIEW OF THE NEGATIVE CASH BALANCE FOR THE PERIOD FROM 1ST JULY TO 15 TH JULY, 2007 . IN VIEW OF ABOVE CLEAR FINDINGS OF THE LD. CIT(A) , WE ARE OF CONSIDERED VIEW THAT NO INTERFERENCE IS REQUIRED IN THE ORDER OF THE LD CIT(A) ON THIS ISSUE . ACCORDINGLY, THE FIRST GROUND OF REVENUE IS DISMISSED. 7. AS REG ARDS TO THE NEXT GROUND OF THE R EVENUE THAT ADDITIONAL EVIDENCE IN THE FORM OF CASH FLOW STATEMENT WAS ADMITTED BY THE LD. CIT(A) IN CONTRA VENTION OF RU LE 46A IS CONCERNED , THE LD SR DR SUBMITTED THAT LD. CIT(A) HAS NOT PROVIDED OPPORTUNITY TO THE LEARNED AO TO GO THROUGH THE ITA NO. 1626 - 66 /DE L/20 1 3 5 CASH FLOW STATEMENT . BUT, WE ARE NOT IN AGREEMENT WITH THE LD. SR DR. IT IS APPARENT FROM THE FACTS THAT IN THE CASE, COPY OF BA NK STATEMENTS WAS AVAILABLE WITH THE LD. AO AND CASH FLOW STATEMENT WAS PREPARED ON THE BASIS OF THOSE BANK STATEMENTS, THEREFORE, T HE CASH FLOW STATEMENT CANNOT BE TERMED AS ADDITIONAL EVIDENCE . THE LD. CIT(A) HAS DONE THE TASK OF EXAMINATION OF AVAILABILITY OF CASH FOR DEPOSITS UNDER CO - TERMINUS POWERS OF THE ASSESSING OFFICER AND ACCORDINGLY HE HAS SUSTAINED ADDITION OF RS. 27,000/ - . IN VIEW OF ABOVE, WE FIND THAT THERE IS NO CONTRA VENTION OF RULE 46A OF THE IT RULES AND THER EFORE THIS GROUND OF THE R EVENUE IS ALSO DISMISSED. 7. I N THE RESULT THE APPEAL OF THE R EVENUE IS DISMISSED. ORDER PRON OUNCED IN THE COURT ON 30 / 10 / 2015 . - SD/ - - SD/ - ( DIVA SINGH ) ( O.P.KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 / 10 /2015 * AJAY * COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR