ITO, Ludhiana V. Sh. Ashok Kumar Jain, Ludhiana

ITA 180/CHANDI/2013

• Counselvise Citation: 18021514 RSA 2013
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SSH SUDHIR SEHGAL
• Keywords: Salary income

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 180/CHD/2013 ASSESSMENT YEAR: 2008-09 THE ITO, WARD-VII(1), VS. SH. ASHOK KUMAR JAIN, LUDHIANA LUDHIANA PAN NO. AAYPJ0630M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K.MITTAL RESPONDENT BY : S/SH. SUDHIR SEHGAL & ASHOK GOYAL DATE OF HEARING : 01.10.2015 DATE OF PRONOUNCEMENT : 03.11.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A) - II, LUDHIANA DATED 10.12.2012 RELATING TO ASSESSMEN T YEAR 2008-09. IN THIS APPEAL THE REVENUE HAS CHALLENGED THE ACTION OF CIT (A) IN DELETING THE ADDITION OF RS. 19,60,000/- 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SSESSEE IS AN INDIVIDUAL AND HE SUBMITTED HIS RETURN OF INCOME DECLARING A TOTAL INCOME OF RS. 93,959/- WHICH INCLUDED SALARY INCOME, RENTAL INCOME AND INTEREST ON DEPOSITS. DURING THE 2 ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE D EPOSITED A SUM OF RS. 19.60 LAKHS ON DIFFERENT DATES IN CASH WITH ICICI BANK, L UDHIANA. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS IN THE SAID BANK. IN RESPONSE TO THE SAID QUERY, THE ASSESSEE SUBMITT ED FOLLOWING DOCUMENTS:- A) COPY OF BALANCE SHEET ALONGWITH ASSETS AND LIABILIT IES AS ON 31.3.2007 B) COPY OF BALANCE SHEET ALONGWITH ASSETS AND LIABILIT IES AS ON 31.3.2008 C) COPY OF CASH FLOW STATEMENT SHOWING CASH AVAILABLE AS ON 1.4.2007, DEPOSITS DURING THE PERIOD 2.4.2007 TO 31.3.2008, W ITHDRAWALS MADE FOR THE PERIOD 1.4.2007 TO 31.3.2008 AND CASH AVAIL ABLE AS ON 31.3.2008. D) NARRATION OF ALL ENTRIES EITHER ON THE CREDIT SIDE OR ON THE DEBIT SIDE OF THE CASH FLOW STATEMENT. E) NARRATION OF ALL ENTITIES WITH ICICI BANK, LUDHIANA THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT, HAS NOWHERE DISCUSSED ABOUT THE ABOVE DOCUMENTARY EVIDENCE FURNISHED BY T HE ASSESSEE AND ADDED A SUM OF RS. 19.60 LAKHS AS INCOME FROM UNDISCLOSED S OURCES. 3. ON APPEAL, THE CIT(A) DELETED THE ADDITION, OBS ERVING AS UNDER:- AS PER THE CASH FLOW STATEMENT SUBMITTED BY THE AP PELLANT, THE CASH-IN-HAND AVAILABLE WITH THE APPELLANT AS ON 31.03.2007 WAS RS. 13,48,638/-. IN THIS REGARD THE APPELLANT HAD SUBMITTED THAT HE HAD TAKEN A LOAN OF RS.20.00 LACS FROM CENTURION BANK OF PUNJAB AGAINST MORTGAGE OF RESIDENTIAL HOUSE OWNED BY THE APPELLAN T. OUT OF THIS LOAN OF RS.20.00 LACS THE APPELLANT HAD WIT HDRAWN RS. 12,25,000/- ON 05.02.2007. FURTHER, AS PER THE SUBMISSIONS OF THE APPELLANT HE HAD WITHDRAWN AN AM OUNT OF RS. 1,25,000/- ON 13.12.2006. THE TOTAL AMOUNT WITHDRAWN ON THESE TWO DATES WAS RS. L3,50,000/- OU T OF WHICH THE APPELLANT CLAIMED THAT RS. 13,48,638/-WAS LYING WITH HIM AS CASH-IN-HAND ON 31.03.2007. THE AO IN H IS REPORT DATED 23.07.2012, HAS NOT DISPUTED THIS FACT THAT THE 3 APPELLANT HAD TAKEN A LOAN OF RS.20.00 LACS. IN THE SE CIRCUMSTANCES THE SOURCE OF CASH AVAILABLE WITH THE APPELLANT ON 01.04.2007 AMOUNTING TO RS.13,48,638/- STANDS FULLY EXPLAINED. THE ASSESSING OFFICERS CON TENTION THAT THE APPELLANT HAS SHOWN CASH-IN-HAND AT ALMOST 21 TIMES IS THEREFORE, NOT CORRECT. . THE CASH AVAILAB LE ON 01.04.2007 BEING OUT OF CASH WITHDRAWALS FROM THE LOAN TAKEN BY THE APPELLANT HAVE BEEN DULY EXPLAINED BY THE APPELLANT ALONG WITH THE EVIDENCES FOR THE SAME. 4.7 AS PER THE CASH FLOW STATEMENT SUBMITTED BY THE APPELLANT, THE APPELLANT HAD WITHDRAWN 'VARIOUS AMO UNTS IN THE MONTH OF MAY AND JUNE, 2007 FROM HIS BANK ACCOU NTS AND THE TOTAL CASH AVAILABLE WITH HIM AS ON 01.07. 2007 WAS RS.17,34 6387-. THE AO IN HIS REPORT DATED 23.07.20 12, HAS NOT POINTED OUT ANY DISCREPANCY WITH REGARD TO THES E CLAIMS OF THE APPELLANT REGARDING THE WITHDRAWALS FROM THE BANK ACCOUNTS. AS PER THE CASH FLOW STATEMENT SUBMITTED BY THE APPELLANT THE CASH DEPOSITS OF RS. 16.50 LACS WAS M ADE OUT OF AFORESAID CASH AVAILABLE DURING THE MONTHS OF JU LY AND AUGUST, 2007. A FURTHER DEPOSIT OF RS. 2.00 LACS MA DE IN THE MONTH OF OCTOBER, 2007 AND AFTER SOME MINOR ADJUSTM ENTS THE TOTAL CASH AVAILABLE ON 1 M NOVEMBER, 2007 WAS RS. 50,004/-. AS PER CASH FLOW STATEMENT SMALL AMOUNTS WERE WITHDRAWN AND DEPOSITED THEREAFTER FROM THE BANK AC COUNTS OF THE APPELLANT. THE CASH DEPOSITS IN THE BANK ACC OUNTS OF THE APPELLANT THEREFORE STAND FULLY EXPLAINED AND T HE _AO WAS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT HAD NOT DISCHARGED HIS ONUS TO EXPLAIN THE SOURCE OF THESE DEPOSITS. AS DISCUSSED ABOVE THE COPY OF BANK ACCOUNTS, CASH FLOW STATEMENT AND THE BALANCE SHEET AS ON 31.03.2007 AN D 31.03.2008 WERE DULY FILED BEFORE THE AO. ALL THE E NTRIES IN THE CASH FLOW STATEMENT WERE DULY RECORDED FROM THE BANK ACCOUNTS AND REPRESENTED THE VARIOUS CASH WITHDRAWA LS AND CASH DEPOSITS MADE BY THE APPELLANT AFTER AVAILING A BANK LOAN OF RS.20.00 LACS. 4 4.8 THE AO IN HIS REPORT DATED 23.07.2012, HAS OBSE RVED THAT THE APPELLANT HAD MADE NEED BASED CASH WITHDRA WALS FROM HIS BANK ACCOUNTS AND THE SUBSEQUENT WITHDRAWA LS WAS MADE ONLY AFTER THE WITHDRAWAL MADE EARLIER HAD BEE N UTILIZED BY THE APPELLANT. THIS OBSERVATION OF THE AO IS WITHOUT ANY BASIS. THE APPELLANT IS AT LIBERTY TO W ITHDRAW CASH FROM HIS BANK ACCOUNTS AS PER HIS OWN PLANS AN D REQUIREMENTS. MERELY BECAUSE CASH WAS WITHDRAWN ON A PARTICULAR DATE ALSO DOES NOT IMPLY THAT THE CASH A LREADY WITHDRAWN ON EARLIER DATES HAD BEEN UTILIZED. THE A O HAS POINTED OUT THAT IN CASE THE APPELLANT WAS ACTUALLY HAVING CASH-IN-HAND OF RS.13,48,638/- AS ON 01.04.2007, TH ERE WAS HARDLY ANY REASON FOR MAKING FURTHER CASH WITHDRAWA LS. THIS OBSERVATION OF THE AO IS BASED ON CONJECTURES AND SURMISES AND IS WITHOUT ANY BASIS. THE APPELLANT HA D EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THAT CASH WAS WITHDRAWN WITH THE INTENTION TO BUY SOME PROPERTY. THE ACTUAL AMOUNT OF CASH REQUIRED BY THE APPELLANT IN THESE CIRCUMSTANCES WOULD BE KNOWN TO THE APPELLANT ONLY. THERE IS NO BAR IN KEEPING THE CASH AT HOME ACCORDING TO REQUIREMENTS. 4.9 THE ASSESSING OFFICER HAS ALSO REFERRED T O THE FACT THAT THE CASH DEPOSITS IN THE BANK ACCOUNTS WERE ME DE ON VARIOUS DATES FROM JUNE TO NOVEMBER, 2007. THE AO H AS ALSO HELD THAT CASH AMOUNTING TO RS. 17,44,004/- W AS AVAILABLE ON 11.07.2007 AND IF IT WAS NOT REQUIRED BY THE APPELLANT THE SAME SHOULD HAVE BEEN DEPOSITED IN TH E BANK IN ONE GO RATHER THAN IN PARTS FROM 14.07.2007 TO 15.11.2007. PERUSAL OF THE CASH FLOW STATEMENT REVE ALS THAT OUT OF THE CASH AVAILABLE OF RS. 17,44,004/- ON 11. 07.2007 DEPOSITS OF RS.16.50 LACS WERE MADE ON 13.07.2007, 31.07.2007 AND 07.08.2007 I.E. WITHIN THE PERIOD OF 25 DAYS. THEREAFTER THE TOTAL AMOUNT OF CASH DEPOSITS AND WITHDRAWALS ARE NOT VERY SIGNIFICANT. THIS OBSERVAT ION OF THE AO IS ALSO WITHOUT ANY BASIS. 5 4.10 THE AO ALSO POINTED OUT THAT THE APPELLANT GAVE INTEREST FREE LOANS OF RS.10.00 LACS AND RS.5.00 LA CS TO SMT. KAMLA JAIN ON 01.08.2007 AND 09.08.2007. SMT. KAMLA JAIN IS SISTER OF THE APPELLANT AND THE APPELLANT WAS FR EE TO GIVE ANY AMOUNTS OF LOAN TO HIS SISTER WITH OR WITHOUT I NTEREST. THIS DOES NOT IN ANY WAY MAKE THE SOURCE OF CASH DE POSITS IN. BANK ACCOUNTS UNEXPLAINED. 4.11 FROM THE FACTS DISCUSSED ABOVE, I AM OF THE CONSIDERED VIEW THAT THE CASH DEPOSITS IN THE BANK ACCOUNTS BY THE APPELLANT STAND FULLY EXPLAINED FROM THE CAS H WITHDRAWALS MADE BY THE APPELLANT OUT OF THE LOAN O F RS.20.00 LACS TAKEN BY HIM IN FEBRUARY, 2007. THE C ASH WITHDRAWALS AND THE SUBSEQUENT CASH DEPOSITS IN THE BANK ACCOUNTS PERTAINED TO THE PERIOD FEBRUARY, 2007 TO OCTOBER, 2007 AND' THE APPELLANT HAS DULY DISCHARG ED THE ONUS LYING ON HIM TO EXPLAIN THE SOURCE OF CASH DEP OSITS. THE ADDITION MADE BY THE AO IS THEREFORE DELETED AN D THESE GROUNDS OF APPELLANT ARE ACCORDINGLY ALLOWED 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED ALSO THE MATERIALS ASSAILABLE ON RECORD. SHRI SUDHIR SEHGAL LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER WHILE COMPLETING THE ASSESSM ENT HAD TOTALLY OVERLOOKED THE DETAILS OF CASH IN HAND AVAILABLE WITH THE ASS ESSEE AS PER BALANCE SHEET AS ON 31.3.2007. HE FURTHER POINTED OUT THAT REGULAR B OOKS OF ACCOUNTS ARE BEING MAINTAINED BY THE ASSESSEE AND ALL THE ENTRIES OF C ASH WITHDRAWALS AND CASH DEPOSITS ARE DULY RECORDED IN THE CASH LEDGER ACCOU NT. HE FURTHER POINTED OUT THAT THE RETURNS ARE BEING FILED ON THE BASIS OF BO OKS OF ACCOUNT EVEN IN THE EARLIER YEARS. AS PER THE BALANCE SHEET, THE CASH I N HAND AVAILABLE WITH THE ASSESSEE ON 31.3.2007 WAS RS. 13,48,638/-. IT IS ST ATED THAT THE CASH AVAILABLE ON THE AFORESAID DATE WAS OUT OF WITHDRAWALS MADE FROM ICICI BANK WHEREIN THE DEPOSITS BEFORE WITHDRAWALS WERE MADE AFTER TAKING LOAN OF RS. 20 LAKHS FROM CENTURION BANK OF PUNJAB AGAINST MORTGAGE OF RESIDE NTIAL HOUSE OWNED BY THE 6 ASSESSEE. AS REGARDS THE PROPOSE OF WITHDRAWALS, IT WAS EXPLAINED THAT CASH WAS WITHDRAWN WITH THE INTENTION TO BUY SOME PROPERTY AND SINCE THE PROPERTY WAS NOT PURCHASED UPTO 31.3.2007, THE CASH WAS AVAILABL E WITH THE ASSESSEE. FINALLY, THE ASSESSEE DEPOSITED THE SAME IN THE BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION. IT IS RELEVANT TO OBSERVE HERE THAT LD. CIT(A) HAS GIVEN THE DETAILS OF WITHDRAWALS AND DEPOSITS IN THE IMPUGNED YEAR. AS PER CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE BEFORE THE LOWE R AUTHORITIES, IT IS EVIDENT THAT ASSESSEE HAS WITHDRAWN AMOUNTS ON VARIOUS DAT ES IN THE MONTH OF MAY AND JUNE 2007 FROM HIS BANK ACCOUNT AND THE TOTAL CASH AVAILABLE WITH HIM AS ON 1.7.2007 WAS RS. 17,34,638/-. IT IS ALSO APPARENT F ROM THE RECORDS THAT THE LD. CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE ASSE SSING OFFICER AND THE ASSESSING OFFICER IN HIS REPORT DATED 23.7.2012 DI D NOT POINT OUT ANY DISCREPANCY WITH REGARDS TO THE ASSESSEES CONTENTI ON REGARDING THE WITHDRAWALS FROM THE BANK ACCOUNT. THE LD. CIT(A) HAS CATEGOR ICALLY STATED THAT THE COPY OF THE BANK ACCOUNT, CASH FLOW STATEMENT AND THE BA LANCE SHEET AS ON 31.3.2007 AND 31.3.2008 WERE SUBMITTED BEFORE THE ASSESSING O FFICER. ALL THE ENTRIES IN THE CASH FLOW STATEMENT WERE DULY RECORDED FROM THE BANK ACCOUNTS AND REPRESENTED THE VARIOUS CASH WITHDRAWALS AND CASH DEPOSITS MADE BY THE ASSESSEE AFTER AVAILING THE BANK LOAN OF RS. 20 LAK HS. THE LD. CIT(A) HAS ALSO REJECTED THIS CONTENTION OF THE ASSESSING OFFICER T HAT THE ASSESSEE HAD MADE NEED BASED CASH WITHDRAWALS FROM HIS BANK ACCOUNT. SUBS EQUENT WITHDRAWALS WERE MADE ONLY AFTER THE WITHDRAWALS MADE EARLIER HAD BE EN UTILIZED BY THE ASSESSEE. ACCORDING TO CIT(A), MERELY BECAUSE CASH WAS WITHDR AWN ON A PARTICULAR DATE ALSO DOES NOT IMPLY THAT THE CASH ALREADY WITHDRAWN ON EARLIER DATES HAD BEEN UTILIZED. WE FULLY ENDORSE THE ABOVE VIEW OF THE CI T(A). THE ASSESSING OFFICER HAS MADE THE OBSERVATION THAT IN THE CASE THE ASSE SSEE WAS ACTUALLY HAVING CASH IN HAND OF RS. 13,48,638/- AS ON 1.4.2007, THERE WA S HARDLY ANY REASON FOR MAKING FURTHER CASH WITHDRAWALS. THE LD. CIT(A) HAS CORRECTLY HELD THAT THIS OBSERVATION OF THE ASSESSING OFFICER IS WITHOUT AN Y BASIS. THE LD. CIT(A) 7 FURTHER OBSERVED THAT ASSESSEE HAD EXPLAINED DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS THAT CASH WAS WITHDRAWN WITH THE INTENT ION TO BUY SOME PROPERLY. THE LD. CIT(A) HAS CATEGORICALLY OBSERVED THAT ACTU AL AMOUNT OF CASH REQUIRED IN THESE CIRCUMSTANCES WOULD BE KNOWN TO THE ASSES SEE ONLY. HE HAS ALSO STATED THAT THERE IS NO BAR IN KEEPING THE CASH AT HOME AC CORDING TO REQUIREMENTS. THUS, OBSERVATIONS OF THE LD. CIT(A) ARE CORRECT AN D, THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE QUEST ION INVOLVED IN THIS CASE IS OF FACTS AND THE LD. CIT(A) HAS CORRECTLY APPRECIATED THE FACTS OF THE CASE AND DECIDED THE ISSUE CORRECTLY. IN VIEW OF THE ABOVE D ISCUSSION, WE DO NOT FIND ANY MERIT IN THE APPEAL FILED BY THE REVENUE AND ACCORD INGLY WE DISMISS THE SAME. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 03.11.2015. SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 03 RD NOVEMBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR