Shri Rameshbhai Somabhai Patel, Gandhinagar V. The Income Tax Officer, Ward-3, Gandhinagar

ITA 1864/AHD/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8490 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: P M PATEL
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 143(3); 68

Judgement Text

ITA NO.1864/AHD/2014 ASSESSMENT YEAR : 2008-09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM] ITA NO.1864/AHD/2014 ASSESSMENT YEAR: 2008-09 RAMESHBHAI SOMABHAI PATEL .... ............................ APPELLANT PLOT NO.426/2, SECTOR-4/B, GANDHINAGAR 382 006. [PAN : AJHPP 3608 H] . VS. INCOME TAX OFFICER, WARD 3, GANDHINAGAR. .............RESPONDENT APPEARANCES BY P.M. PATEL FOR THE APPELLANT R.P. MAURYA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 30.01.2018 DATE OF PRONOUNCING THE ORDER : 19.04.2018 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 13 TH MARCH, 2014 IN THE MATTER OF ASSESSMENT UNDER SECT ION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER), FOR T HE ASSESSMENT YEAR 2008-09. 2. THIS APPEAL IS TIME BARRED BY 36 DAYS BUT THE AS SESSEE HAS MOVED CONDONATION PETITION PLEADING THAT THE DELAY BE CONDONED. 3. ON PERUSAL OF THE PETITION AND UPON HAVING HEARD THE RIVAL CONTENTIONS, I AM INCLINED TO CONDONE THE DELAY. ACCORDINGLY, I CONDONE THE DELA Y AND PROCEED TO TAKE UP THE MATTER ON MERITS. 4. BRIEFLY STATED, THE MATERIAL FACTS ARE LIKE THIS . THE ASSESSEE BEFORE ME IS A SALARIED EMPLOYEE AND THERE WAS A CASH DEPOSIT AGGREGATING T O RS.12,27,200/- IN HIS BANK ACCOUNT DURING THE PERIOD 01.04.2007 TO 31.03.2008. IN RES PONSE TO THE REQUISITION MADE BY THE ASSESSING OFFICER, THE ASSESSEE DID EXPLAIN THE SOU RCE OF THESE DEPOSITS WHICH WAS SAID TO BE SALE OF ANCESTRAL PROPERTY BUT FOR THE REASONS I WI LL SET OUT IN A SHORT WHILE TO GO INTO THIS ASPECT OF THE MATTER IT IS SUFFICE TO SAY THAT THE ASSESSI NG OFFICER PROCEEDED TO TREAT AN AMOUNT OF RS.11,82,587/- AS UNEXPLAINED CASH CREDIT WITHIN T HE MEANING OF SECTION 68 OF THE I.T. ACT, ITA NO.1864/AHD/2014 ASSESSMENT YEAR : 2008-09 PAGE 2 OF 3 1961. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE BEING NOT SATISFIED IS I N FURTHER APPEAL BEFORE ME. 5. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, SHR I PATEL, LEARNED COUNSEL FOR THE ASSESSEE INVITED MY ATTENTION TO HONBLE BOMBAY HIG H COURTS JUDGEMENT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI (1983) 53 COMPCAS 400 BOM. IN PARTICULAR, MY ATTENTION WAS INVITED TO THE FOLLOWING OBSERVATIONS MADE BY THEIR LORDSHIPS: - 2. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS FO R THE ASSESSMENT YEAR 1962-63, FOR WHICH THE RELEVANT PREVIOUS YEAR IN TH E CASE OF THE ASSESSEE WAS SAMVAT YEAR 2017, THE ITO INCLUDED RS.30,000 IN THE ASSESSMENT ON ACCOUNT OF CASH CREDITS FOUND IN CERTAIN BOOKS WHICH, ACCORDIN G TO THE ITO, WERE THE BOOKS OF THE ASSESSEE. THE EXPLANATION OFFERED BY THE ASS ESSEE REGARDING THE GENUINENESS OF THESE CREDITS WAS NOT ACCEPTED BY TH E ITO AND HE TREATED THE AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. ON AN AP PEAL BY THE ASSESSEE, THE AAC CONFIRMED THE VIEW OF THE ITO. ON A FURTHER APP EAL TO THE TRIBUNAL BY THE ASSESSEE, AN ARGUMENT WAS PUT FORWARD ON BEHALF OF THE ASSESSEE THAT IN RESPECT OF ONE OF THE DEPOSITS INCLUDED IN THE SAID SUM OF RS. 30,000, NAMELY, A DEPOSIT OF RS.10,000, THIS DEPOSIT WAS SHOWN ON JANUARY 21, 19 61, IN THE BANK ACCOUNT OF THE ASSESSEE. IT WAS CONTENDED ON BEHALF OF THE ASSESSE E MAINTAINED BY THE ASSESSEE FOR THE PREVIOUS YEAR ENDING ON NOVEMBER 8, 1961 (S AMVAT YEAR 2017) AND THAT THE BANK PASS BOOK WAS NOT A BOOK MAINTAINED BY THE ASS ESSEE. IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE AMOUNT, EVEN IF TRE ATED AS UNDISCLOSED INCOME OF THE ASSESSEE, THAT THE AMOUNT, EVEN IF TREATED AS U NDISCLOSED INCOME OF THE ASSESSEE, COULD ONLY BE ASSESSED IN THE FINANCIAL Y EAR. THE TRIBUNAL ACCEPTED THE CONTENTION OF THE ASSESSEE HOLDING THAT THE SAID BA NK PASS BOOK COULD NOT BE TREATED AS A BOOK OF THE ASSESSEE, AS CONTENDED BY THE DEPARTMENT, AND HELD THAT IT WAS NOT A BOOK MAINTAINED BY THE ASSESSEE FOR AN Y PREVIOUS YEAR AS REFERRED TO IN S. 68 OF THE SAID ACT. IT IS FROM THIS DECISION THAT THE AFORESAID QUESTIONS HAVE BEEN REFERRED TO US. 3. SECTION 68 OF THE SAID ACT SAYS AS FOLLOWS : 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE INCOME-TAX OFFICER, SATISFACTORY, THE SUM SO CREDIT ED MAY BE CHARGED TO INCOME- TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR.' 4. IN BALADIN RAM V. CIT [1969] 71 ITR 427, IT HAS BEEN HELD BY THE SUPREME COURT THAT IT IS NOW WELL SETTLED THAT THE ONLY POS SIBLE WAY IN WHICH INCOME FROM AN UNDISCLOSED SOURCE CAN BE ASSESSED OR REASSESSED IS TO MAKE THE ASSESSMENT ON THE BASIS THAT THE PREVIOUS YEAR FOR SUCH AN INC OME WOULD BE THE ORDINARY FINANCIAL YEAR. EVEN UNDER THE PROVISIONS EMBODIED IN S. 68 OF THE SAID ACT, IT IS ONLY WHEN ANY AMOUNT IS FOUND CREDITED IN THE BOOKS OF THE AMOUNT SO CREDITED MAY BE CHARGED TO TAX AS THE INCOME OF THAT PREVIOU S YEAR, IF THE ASSESSEE OFFERS NO EXPLANATION OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY. 5. AS THE TRIBUNAL HAS POINTED OUT, IT IS FAIRLY WE LL SETTLED THAT WHEN MONEYS ARE DEPOSITED IN A BANK, THE RELATIONSHIP THAT IS CONST ITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF DEBTOR AND CREDITOR AND NOT OF TRUSTEE AND BENEFICIARY. ITA NO.1864/AHD/2014 ASSESSMENT YEAR : 2008-09 PAGE 3 OF 3 APPLYING THIS PRINCIPLE, THE PASS BOOK SUPPLIED BY THE BANK TO ITS CONSTITUENT IS ONLY A COPY OF THE CONSTITUENT'S ACCOUNT IN THE BOO KS MAINTAINED BY THE BANK. IT IS NOT AS IF THE PASS BOOK IS MAINTAINED BY THE BANK A S THE AGENT OF THE CONSTITUENT, NOT CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS OF THE CONSTITUENT. IN VIEW OF THIS, T HE TRIBUNAL WAS, WITH RESPECT, JUSTIFIED IN HOLDING THAT THE PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE IN THE PRESENT CASE COULD NOT BE REGARDED AS A BOOK OF THE ASSESSEE, THAT IS, A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTION S. IN OUR VIEW, THE TRIBUNAL WAS JUSTIFIED IN THE CONCLUSIONS AT WHICH IT ARRIVE D. 6. LEARNED COUNSELS SHORT CONTENTION IS THAT THE I MPUGNED ADDITION IS MADE UNDER SECTION 68 BY TREATING THE BANK ACCOUNT OF THE ASSESSEE AS BOOKS OF ACCOUNT BUT THEN THIS COURSE OF ACTION IN THE LIGHT OF THE ABOVE JUDICIAL PRECEDENT IS NOT SUSTAINABLE IN LAW. 7. I SEE MERIT IN THE PLEA OF THE LD. COUNSEL FOR T HE ASSESSEE. THERE IS NO AND THERE CANNOT BE ANY DISPUTE ON THE FACT THAT THE MATERIAL FACT O F THIS CASE VIZ-A-VIZ OF THE CASE BEFORE HONBLE BOMBAY HIGH COURT IS MATERIALLY IDENTICAL. UNDER T HESE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE VIEW SO EXPRESSED BY THE HONBLE BOMBAY HIGH CO URT, I UPHOLD THE PLEA OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPU GNED ADDITION OF RS.11,82,587/-. 8. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCE D IN THE OPEN COURT ON THIS 19 TH DAY OF APRIL, 2018. SD/- PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: AHMEDABAD, THE 19 TH DAY OF APRIL, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPOND ENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD