Shri Deepak C.Yadav, Ahmedabad V. The Income tax Officer,Ward-10(2), Ahmedabad

ITA 1652/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1535 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 30-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K
• Assessee Lawyers: RIA NAGPAL
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

I.T.A. NO: 1652/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD B BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND KUL BHARAT JM] I.T.A. NO: 1652/AHD/2012 ASSESSMENT YEAR: 2008 - 09 DEEPAK C YADAV .APPELLANT 401, SHRI SURYADEV APARTMENT 27C, MAHADEVN AGAR SOCIETY SARDAR PATEL STADIUM ROAD, NAVRANGPURA AHMEDABAD 380 014 [PAN: AAJPY8148C ] VS. INCOME TAX OFFICER WARD 10(2) , AHMEDABAD . RESPONDENT APPEARANCES BY: RIA NAGPAL FOR THE APPELLANT A K PANDEY FOR THE RESPONDENT D ATE OF C ONCLUDING THE HEARING : FEBRUARY 23 , 201 6 DATE OF PRONOUNCING THE ORDER : MAY 20 TH , 201 6 O R D E R PER PRAMOD KUMAR , AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 1 ST JUNE 2012 PA SSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2008 - 09. 2. GRIEVANCE OF THE ASSESSEE, IN SUBSTANCE, IS THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS 18,45,0 00, MADE TO THE INCOME OF THE ASSESSEE, UNDER SECTION 68 OF THE ACT AND ON ACCOUNT OF CASH DEPOSITS IN HIS BANK ACCOUNT. I.T.A. NO: 1652/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 2 OF 4 3. THE MATERIAL FACTS OF THE CASE ARE IN A RELATIVELY NARROW COMPASS. THE ASSESSEE BEFORE US IS ENGAGED IN THE BUSINESS OF REAL ESTATE , AS ASSESSING OFFICER HIMSELF PUTS IT, ON A RELATIVELY SMALL SCALE . THE ASSESSING OFFICER WAS IN RECEIPT OF AIR INFORMATION THAT THERE ARE TWO CASH DEPOSITS OF RS 9,00,000 EACH IN THE MONTH OF DECEMBER 2007 IN HIS BANK ACCOUNT. THE EXPLANATION OF THE A SSESSEE WAS THAT HE HAD A CASH BALANCE OF RS 20,85,800 AND THAT THESE DEPOSITS WERE MADE IN THE BANK ACCOUNT BECAUSE HE HAD TO GIVE LOANS, THROUGH BANKING CHANNELS, TO SMT GAURUBEN CHANDANLAL YADAV. IT WAS FURTHER SUBMITTED THAT THE SOURCE OF THE CASH BALA NCE WAS WITHDRAWAL OF RS 9,37,000 ON 27 MARCH 2007 AND OF RS 10,93,000 ON 28 TH MARCH 2007, WHICH WERE RECEIVED FROM GAJKESARI FINANCE CORPN, THROUGH THE ASSESSEE S ACCOUNT WITH KALUPUR COMMERCIAL BANK ACCOUNT NO. 2910100438. IT WAS POINTED OUT THAT THE MO NIES SO RECEIVED BY THE ASSESSEE WERE NOT USED IN ANYWAY TILL DECEMBER 2007 WHEN FINALLY THE CASH WAS DEPOSITED IN THE BANK. THE ASSESSEE DID DEMONSTRATE THAT ON THE VERY NEXT DAYS OF THESE CASH DEPOSITS, THE CHEQUES FOR THE SAME VALUE WERE ISSUED TO GAUR IBEN. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THIS EXPLANATION. HE REJECTED THE STAND OF THE ASSESSEE AND OBSERVED THAT IN REALITY, A PRUDENT BUSINESSMAN, LIKE THE ASSESSEE, WOULD NOT KEEP SUCH A HE AMOUNT OF RS 20,30,000 (RS 9,37,000+ RS 10,03,00 0) IDLE AT HOME FOR SUCH ALONG PERIOD . HE WAS OF THE VIEW THAT IT CAN BE INFERRED THAT THE CASH WITHDRAWN BY THE ASSESSEE EARLIER MUST HAVE BEEN USED FOR THE PURPOSE FOR WHICH IT WAS WITHDRAWN, WHICH IS BEST KNOWN TO THE ASSESSEE, AND THE AMOUNT DEPOSITE D IN THE BANK, BY ANY STRETCH OF IMAGINATION, CAN (NOT) BE SAID TO BE THE SAME CASH AS WITHDRAWN BY THE ASSESSEE EARLIER BEFORE 9 MONTHS . THE ASSESSING OFFICER MADE SOME OBSERVATIONS ABOUT CERTAIN OTHER DEPOSITS IN THE ASSESSEE S BANK ACCOUNT, BY WAY OF U NSECURED LOANS ETC, BUT IT IS NOT NECESSARY TO DEAL WITH THOSE ASPECTS AS THERE WERE NO ADDITIONS IN RESPECT OF THE SAME. THE ASSESSING OFFICER ALSO MADE SOME OBSERVATIONS ABOUT THE UNRELIABILITY OF THE CASH BOOK BUT, ONCE AGAIN, THAT ASPECT OF THE MATTER IS NOT REALLY MATERIAL INASMUCH AS THE CASH DEPOSITS ARE EXPLAINED BY THE AMOUNTS RECEIVED FROM GAJKESARI FINANCE - WHICH IS WHAT THE ASSESSEE CONFIRMED IN THE STATEMENT RECORDED BY THE AO AS WELL. IT WAS IN THIS BACKGROUND THAT THE ASSESSING OFFICER CONC LUDED THAT THE ASSESSEE I.T.A. NO: 1652/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 3 OF 4 HAS NOT PROVED, WITH CONCLUSIVE EVIDENCE, THAT THE CASH DEPOSITS OF RS 9,00,000 ON 14.12.2007, OF RS 9,00,000 ON 15.12.2007 AND OF RS 45,000 ON 27 .12.2007 ARE OUT OF HIS KNOWN SOURCE OF INCOME . ACCORDINGLY, AN ADDITION OF RS 18,45 ,000 WAS MADE UNDER SECTION 68 OF THE ACT. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL O N RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT THERE IS NO DISPUTE ABOUT THE AVAILABILITY OF FUNDS IN THE HANDS OF THE ASSESSEE INASMUCH THE RECEIPT OF RS 20,30,000 FROM GAJKESARI FINANCE CORP REMAINS BEYOND DOUBT OR CONTROVERSY. THE EXPLANATION OF THE ASSESSEE HAS, HOWEVER, BEEN REJECTED ON THE GROUND THAT NOBODY, IN THE PERCEPTION OF THE AUTHORITIES BELOW, WILL KEEP CASH IDLE FOR NINE LONG MONTHS AND THAT IT CAN REASONABLY BE INFERRED, ACC ORD ING TO THEM, THAT THE MONEY SO WITHDRAWN HAS ALREADY BEEN USED FOR THE PURPOSES FOR WHICH IT WAS WITHDRAWN EVEN THOUGH, EVEN ACCORDING TO THE AUTHORITIES BELOW, SUCH A PURPOSE CAN ONLY BE KNOWN TO THE ASSESSEE HIMSELF. WE ARE UNABLE TO SEE ANY LEGALLY SUST AINABLE MERITS IN THE APPROACH SO ADOPTED BY THE AUTHORITIES BELOW. ONCE AVAILABILITY OF RS 20,30,000 IS NOT IN DISPUTE, AS IS THE POSITION ON THE FACTS OF THIS CASE, AND UNLESS THE SAID AMOUNT IS FOUND TO HAVE BEE N USED FOR SOME OTHER PURPOSES, WHICH IS N OT EVEN THE CASE OF THE ASSESSING OFFICER, IT CANNOT BE OPEN TO THE ASSESSING OFFICER TO TREAT THE CASH DEPOSITS OF RS 19,45,000 AS UNEXPLAINED CREDITS. THE SOURCE STANDS REASONABLY EXPLAINED. AS THE ASSESSING OFFICER HIMSELF PUTS IT, THE ASSESSEE IS DOIN G BUSINESS AT A VERY SMALL SCALE AND IT IS, THEREFORE, UNREALISTIC TO EXPECT THAT THE ACCOUNTING RECORDS MAINTAINED BY THE ASSESSEE WILL BE OF HIGHEST STANDARDS AND WOULD MEET THE TEST OF HAVING BEEN PROPERLY MAINTAINED . THE OTHER CASH DEPOSITS, IN ASSES SEE S BANK ACCOUNT, ARE ALSO IRRELEVANT INASMUCH AS NO ADDITIONS HAVE BEEN MADE IN RESPECT OF THE SAME. THE ISSUES WITH REGARD TO PRODUCTION OF PARTIES IS IN RESPECT OF TRANSACTIONS NOT RELATED TO THE ISSUE BEFORE US. AS FAR AS THE SOURCE OF CASH DEPOSITS OF RS 18,45,000 IS I.T.A. NO: 1652/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 4 OF 4 CONCERNED, T HE ASSESSEE HAS OFFERED AN EXPLANATION, WHICH, IN OUR CONSIDERED VIEW, IS SATISFACTORY AND THE FACTUAL ELEMENTS EMBEDDED THEREIN REMAIN UNCONTROVERTED. ON FACTS, IN OUR CONSIDERED VIEW , THERE ARE NO REASONS TO INVOKE THE PRO VISIONS OF SECTION 68. 6. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, IN OUR CONSIDERED VIEW, THE IMPUGNED ADDITION OF RS 18,45,000 INDEED DESERVES TO BE DELETED. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASSESSEE, AN D DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 20 TH DAY OF MAY, 2016. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 20 TH DAY OF MAY, 2016. COPIES TO : (1) THE APPE LLANT (2) THE RESPONDENT (3) D IT (4) DRP (5) DR (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD