DR. HARPRIT SINGH , JALANDHAR V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, JALANDHAR

ITA 195/ASR/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0427 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-12-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 10-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Deemed dividend; Capital receipt
• Section: 2(22)(e); 133(6); 271D; 191; 68; 69; 148; 56; 10

Judgement Text

DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL AMNRITSAR BENCH, AMRITSAR BEFORE SHRI N.K. CHOUDHRY, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . .. . . .. . ./ ././ ./ I.T.A NO.195/ASR/2018 / // / A.Y.:2011-12 DR. HARPRIT SINGH, C/O M/S. ORTHONOVA HOSPITAL, NEAR NARI NIKETAN, NAKODDAR ROAD, JALANDHAR(PB) PAN: ACMPS 7237 F V S . DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE II, JALANDHAR (PB) APPELLANT /RESPONDENT /ASSESSEE BY SHRI SURINDER MAHAJAN, CA /REVENUE BY SHRI ALOK KUMAR, CIT (D.R.) / DATE OF HEARING: 16.12.2019 $ /PRONOUNCEMENT ON: 19.12.2019 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, JAL ANDHAR (IN SHORT THE CIT (A)) DATED 31.01.2018 PERTAINING TO ASSES SMENT YEAR 2011- 12, WHICH IN TURN HAS ARISEN FROM THE ASSESSMENT OR DER PASSED UNDER SECTION 143 (3)/147 DTD. 13.01.2016 OF INCOME TAX A CT,1961 (IN SHORT THE ACT) BY THE DEPUTY COMMISSIONER OF INCOME-TAX , CENTRAL CIRCLE- II, JALANDHAR (IN SHORT THE AO). 2. GROUNDS 1 TO 4 ARE AGAINST THE CONFIRMATION OF ADD ITION OF RS.33,71,720 MADE ON ACCOUNT OF CASH DEPOSITS IN SA VING BANK ACCOUNT AND RS. 12,528 BEING INTEREST INSPITE OF TH E FACTS TO THE AO DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 2 OF 11 HAS FRAMED ASSESSMENT BY APPLYING DIFFERENT POSSIBI LITIES AND THERE IS NO SPECIFIC CHARGE AGAINST THE ASSESSEE. THE ADD ITION WAS MADE UNDER SECTION 68 OF THE ACT. HOWEVER, SAME WAS SUST AINED BY THE CIT (A) UNDER SECTION 69 OF THE ACT ON THE GROUND T HAT INVESTMENT ARE NOT RECORDED IN BOOKS OF ACCOUNTS. SINCE THE CH ANGE OF SECTION, AMOUNTS TO ENHANCEMENT WITHOUT GIVING OPPORTUNITY O F BEING HEARD THE ASSESSEE, HENCE, NO SUSTAINABLE IN LAW. 3. SINCE ABOVE GROUNDS OF APPEAL RELATED TO ADDITION O F RS. 33,71,720 BEING CASH DEPOSITS IN SAVING BANK ACCOUN T AND INTEREST THEREON OF RS.12,528 , HENCE, SAME ARE BEING CONSID ERED TOGETHER. 4. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 29.03.2012 DECLARING TOTAL INCOME OF RS. 46,57,850. THE ASSESSMENT WAS REOPENED U/S.147 AND NOTICE UNDER SECTION 148 O F THE ACT WAS ISSUED AND SERVED ON 31.03.2015 ON THE GROUND THAT THE ASSESSEE COULD NOT EXPLAIN THE CASH DEPOSITS IN HIS SAVING BANK AC COUNT WITH AXIS BANK IN REPLY TO NOTICE UNDER SECTION 133(6) ISSUED TO HIM. THE SAID BANK ACCOUNT WAS OPENED ON 03.02.2011 IN WHICH CASH OF RS.33,71,720 WAS DEPOSITED DURING THE PERIOD FROM 03.02.2011 TO 15.03.2011. THE ASSESSEE HAS ALSO EARNED INTEREST OF RS.12,528 ON T HE SAID AMOUNT. THE ASSESSEE VIDE LETTER DATED 05.10.2015 EXPLAINED THAT BANK ACCOUNT IS RECORDED IN THE BOOKS OF ACCOUNTS OF M/S . ORTHONOVO JOINT & TRAUMA HOSPITAL PVT. LTD. IT WAS SUBMITTED THAT C ASH HAS BEEN DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 3 OF 11 DEPOSITED OUT OF CASH IN HAND OF THE COMPANY M/S. O RTHONOVO JOINT & TRAUMA HOSPITAL PVT. LTD.A COMPANY IN WHICH THE ASS ESSEE AND HIS WIFE SMT. JASLEEN KAUR ARE MAJORITY SHARES HOLDER. THE SAID COMPANY HAD REGULAR CURRENT ACCOUNT WITH CAPITAL LOCAL AREA BANK, WHICH WAS DULY REFLECTED IN ITS BALANCE SHEET. THE AO HAS OBS ERVED THAT THE PERUSAL OF CASHBOOK OF THE COMPANY SHOWED REGULAR C ASH IN HAND BECAUSE OF CASH RECEIPTS AND ITIS DEPOSITED IN THE CURRENT ACCOUNT EVERY SECOND OR THIRD DAY. THEREFORE, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY CASH DEPOSITS IN HIS PERSONAL BANK ACCOUNT SHOULD NOT BE TREATED AS UNEXPLAINED. THE ASSESSEE HAS EXPLAIN ED THATHE WAS ADVISED BY HIS ASTROLOGER TO INSERT HIS NAME IN THE BANK ACCOUNT OF THE COMPANY. HE APPROACHED HIS BANKER BUT THEY REFUSED. THEREFORE, HE OPENED THE BANK ACCOUNT IN HIS OWN NAME TO DEPOSIT CASH IN SAID BANK ACCOUNT. THE ASSESSEE IS ALSO STATED THAT THE SAVIN G BANK ACCOUNT WAS INCORPORATED IN THE BOOKS OF THE COMPANY AND THE CA SH WAS WITHDRAWN IN THE MONTH OF MARCH. HOWEVER, THE AO OBSERVED THA T THE BALANCE SHEET OF THE COMPANY DOES NOT REFLECT THIS BANK ACC OUNT AS ON 31. 03. 2011. THE INTEREST EARNED ON THE CASH DEPOSITS WAS RS.12,528 HAS ALSO NOT BEEN REFLECTED IN THE RETURN OF INCOME EITHER O F THE ASSESSEE OR IN THE COMPANY. THEREFORE, THE AO OBSERVED THAT THE EX PLANATION OF THE ASSESSEE IS COOKED UP AND HE IS UNABLE TO EXPLAIN A S TO WHY THE ACCOUNT CLAIM TO BELONGING TO THE COMPANY HAS NOT B EEN REFLECTED IN ITS BOOKS OF ACCOUNTS. IN VIEW OF THESE FACTS, THE AO TREATED THE SAID DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 4 OF 11 AMOUNT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. WITHOUT PREJUDICE TO THE ABOVE, THE AO FURTHER OBSE RVED THAT IF AT ANY STAGE IN THE APPELLATE PROCEEDINGS, THE HIGHER JUDI CIAL AUTHORITIES, HOLD THAT THE CASH DEPOSITS AS EXPLAINED, AND CASH IS ACTUALLY BELONGS TO THE COMPANY, THEN THE PAYMENT TO BE EXAMINED IN THE LIGHT OF PROVISIONS OF SECTION 2(22)(E) OF THE ACT AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. THE AO FURTHER OBSERVED THAT THE ASSESSEE IS A DIRECTOR AND SHAREHOLDER WITH THE SUBSTANTIAL SHARE HOLDING IN THE COMPANY AT 50%. THEREFORE, THE MONEY HAS BEEN GIVEN FOR THE BENEFIT TO THE ASSESSEE FOR HIS INDIVIDUAL BENEFIT. THERE I S NO BUSINESS PURPOSE. IN VIEW OF SUCH ADVANCE CLEARLY FALLS WITH IN THE PURVIEW OF PROVISIONS OF SECTION 2(22)(E) OF THE ACT. IN VIEW OF THESE FACTS, THE AO ALSO TAXED THE SAME AMOUNT AS DEEMED DIVIDEND IN TH E HANDS OF THE ASSESSEE. 5. BEING, AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT (A). THE ASSESSEE HAS REITERATED THE SAME SUBMI SSIONS AS MADE BEFORE THE AO. IT WAS ARGUED THAT SAID ACCOUNT WAS REOPENED DUE TO ASTROLOGICAL REASONS. THE ADDITION MADE UNDER SECTI ON 68WAS CHALLENGED ON THE GROUND THAT SECTION 68 IS NOT ATT RACTED AS SAVING BANK ACCOUNT PAPER BOOK IS NOT BOOKS OF ACCOUNTS OF THE ASSESSEE BUT ARE BOOKS OF THE BANK. IT WAS FURTHER SUBMITTED THA T AND IS MADE ON PRESUMPTION AND ASSUMPTION. IT WAS FURTHER SUBMITTE D THAT IT WAS NOT THE CASE OF THE AO THAT COMPANY WAS NOT HAVING CASH IN HAND TO DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 5 OF 11 JUSTIFY THE DEPOSIT MADE IN THE SAVING BANK ACCOUNT OF THE ASSESSEE. HOWEVER, THE LD. CIT(A) HAS UPHELD THE OBSERVATION OF THE AO HAS THE PLEA OF THE ASSESSEE THAT THE BANK ACCOUNT WAS OPEN ED ON THE BASIS OF ASTROLOGICAL ADVICE IS HIGHLY ILLOGICAL AND CANNOT BE ACCEPTED. FURTHER, THE SAID SAVING BANK ACCOUNT OF THE ASSESSEE WAS NE ITHER INCORPORATED IN THE BALANCE SHEET OF THE COMPANY NOR THE SAME WE RE DECLARED BY THE ASSESSEE WHILE FILING RETURN OF INCOME IN HIS I NDIVIDUAL CASE. THE AO HAS INVOKED SECTION 68 BY MAKING ADDITION ON ACC OUNT OF UNDISCLOSED CASH DEPOSIT MADE INTO BANK ACCOUNT OF THE ASSESSEE. SINCE THE PASSBOOK MAINTAINED BY THE BANK IS NOT A BOOKS OF ACCOUNTS OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) OBSERVED THAT THE CASH DEPOSIT IN THE BANK ACCOUNT IS UPHELD UNDER SECTION 69 OF THE ACT. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT AFTER HA VING MADE AN ADDITION OF RS.33, 71, 720 AS CASH CREDIT UNDER SEC TION 68 OF THE ACT. THE AO WITHOUT PREJUDICE TO THE ASSESSMENT MADE BY HIM PROPOUNDED ALTERNATING THEORIES CONSIDERING THE POSSIBILITIES OF HIGHER JUDICIAL AUTHORITIES. SUCH AS AN EXERCISE BY THE AO IS OF NO CONSEQUENCE. NOR IT IS WITHIN HIS POWERS TO PRE-EMPT THE DECISION OF TH E HIGHER JUDICIAL AUTHORITIES. THEREFORE, THE CIT (A) HAS DISMISSED S UCH OBSERVATION MADE BY THE AO REGARDING POSSIBILITY OF INVOKING PR OVISIONS OF SECTION 2(22)(E) OR SECTION 269SS OR 271D AND 271E. 6. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. LEARNED COUNSEL SUBMITS THAT THE ADDITION IS MADE ON DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 6 OF 11 PRESUMPTION AND ASSUMPTION. IT WAS NOT THE CASE OF THE AO THAT COMPANY WAS NOT HAVING CASH IN HAND TO JUSTIFY THE DEPOSIT MADE IN THE SAVING BANK ACCOUNT OF THE ASSESSEE. FURTHER, T HE CIT (A) HAS CHANGED THE ADDITION TO SECTION 69 OF THE ACT WITHO UT GIVING SHOW- CAUSE NOTICE TO THE ASSESSEE. THE CIT (A) HAS THOUG H NOT ACCEPTED THE PLEA OF THE ASSESSEE THAT THE BANK ACCOUNT WAS OPEN ED ON THE BASIS OF ASTROLOGICAL ADVICE, BUT HAS ACCEPTED THAT THE PASS BOOK MAINTAINED BY THE BANK IS NOT A BOOK OF ACCOUNT OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) CONFIRMED THE ADDITION UNDER SECTION 69 OF T HE ACT WITHOUT GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THIS ACT OF THE LD. CIT(A) AMOUNTS ENHANCEMENT OF INCOME, WITHOUT G IVING ANY OPPORTUNITY OF HEARING, WHICH MADE THE ADDITION, CO NFIRMED AS ILLEGAL AND BAD IN LAW. FURTHER, SECTION 68 AND SECTION 69 ARE OPERATES IN DIFFERENT FIELDS. THEREFORE, THE ADDITION CONFIRMED IS ILLEGAL. THE ASSESSMENT IS MADE BY APPLYING DIFFERENT POSSIBILIT IES AND THERE IS NO SPECIFIC CHARGE AGAINST THE ASSESSEE.THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT SECTION 68 COULD NOT BE ATT RACTED IN THE CASE OF THE ASSESSEE IN THE LIGHT OF DECISION OF ITAT AM RITSAR IN THE CASE OF SANJEEV KUMAR V. ITO WARD 6(3) PATHANKOT [I.T.A.NO. 445 TO 449/ASR/2015-DATED 17.06.2016, COPY PLACED ON RECOR D. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER, RELIED IN THE CAS E OF PCIT V. BHAICHAND H GANDHI [1983] 141 ITR 67 (BOMBAY) IN SU PPORT OF CONTENTION THAT NO ADDITION UNDER SECTION 68 CAN B E MADE WHEN NO DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 7 OF 11 BOOKS OF ACCOUNTS ARE MAINTAINED. THE LEARNED COUNS EL FOR THE ASSESSEE CONTENDED THAT THE AO HAS OBSERVED THAT WH EN THE COMPANY WAS HAVING REGULAR CURRENT ACCOUNT THEN WHY THE ASS ESSEE HAS OPENED SAVING BANK ACCOUNT IN HIS NAME TO MAKE DEPOSIT OUT OF CASH IN HAND OF COMPANY. THE LEARNED COUNSEL FOR THE ASSESSEE RE LYING ON THE DECISION CIT V. DALMIA CEMENT (BHARAT) LTD. [2002] 254 ITR 377 (DELHI) SUBMITTED THAT THE AO CANNOT GUIDE AS TO HOW THE BU SINESS SHOULD BE CONDUCTED BY THE ASSESSEE. THE ASSESSEE HAS OPENED A BANK ACCOUNT IN WHICH CASH DEPOSITS WERE MADE OUT OF CASH IN HAND W ITH THE COMPANY. THE AO HAS NOT POINTED OUT THAT CASH DEPOSITS ARE N OT OUT OF CASH IN HAND OF THE COMPANY, NO DISCREPANCIES HAVE BEEN POI NTED OUT BY THE AO.THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELI ANCE IN THE CASE OF GIRISH BANSAL & ANR V. UOI [2016] 384 ITR 161 (DELH I) WHEREIN IT WAS HELD WHEN THE CASH DEPOSITS ARE TAXED UNDER SECTION 68 IT CANNOT BE TAXED UNDER SECTION 69 OF THE ACT NOR CAN BE BROUGH T TO TAX AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. IN THE LIGHT OF ABOVE SUBMISSION, THE LEARNED COUNSEL SUBMITTED, THE CIT (A) WAS NOT JUST IFIED IN SUSTAINING THE ADDITION, WHEN THE AO WAS NOT CERTAIN UNDER WHI CH HEAD THE ADDITION SHOULD BE MADE. THEREFORE, SAME MAY BE QUA SHED. 7. PER CONTRA, LEARNED CIT(D.R.) SUBMITTED DECISION IN KALAYAN KUMAR RAY V. CIT [1991] 191 ITR 634 (SC) WAS GIVEN IN THE CONTEXT OF QUANTIFICATION OF TAX AND INTEREST THEREON. IN SAID CASE, THE AO HAD NOT QUANTIFIED INTEREST CHARGEABLE TO TAX AND MADE PART OF ASSESSMENT DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 8 OF 11 ORDER. THEREFORE, THE HON`BLE SUPREME COURT HELD TH AT HAS ADVISED DEPARTMENT TO INCORPORATE SUCH INTEREST CALCULATION IN ITNS 65 FORM,THEREFORE, SUCH DECISION IS DISTINGUISHABLE ON FACTS HENCE, NOT APPLICABLE TO THE ASSESSEE. IT WAS FURTHER, SUBMITT ED THAT AS PER SECTION 292B OF THE ACT THE CIT (A) CAN RECHRISTENE D THE HEAD OF INCOME. THEREFORE, SUBSTITUTION OF SECTION 69 IN PL ACE OF SECTION 68 IS WELL WITHIN THE POWERS OF THE CIT (A). FURTHER, THE AO HAS RIGHTLY APPLIED PROVISIONS OF SECTION 2(22) (E) OF THE ACT. 8. IN REJOINDER TO ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT REFERRING PARA 5.6 AND 5.7 OF ASSESS MENT ORDER THAT IT IS NOT THE CASE OF THE AOCASH DEPOSITS DOES NOT REL ATE TO COMPANY OR AND THERE WAS NO CASH IN HAND OF THE COMPANY. THE L EARNED COUNSEL FOR THE ASSESSEE FURTHER RELIED ON THE DECISION OF CO-ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF VINESH MAHESWARI V. I TO WARD 61(3) NEW DELHI [I.T.A.NO. 7210/DEL/2018 DATED 01.03.2019 IN APPLYING THE RATIO OF VARIOUS DECISION OF HON`BLE HIGH COURT AND HON`B LE SUPREME COURT IT WAS HELD THAT CHANGE IN SECTION 68 TO 69 WAS HEL D TO BE SANS AND ADDITION SUSTAINED BY THE CIT (A) WAS HELD TO BE IN CORRECT AND REVERSED. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT IT IS NOT THE CASE OF THE AO THAT CASH DEPOSITS IN SAVING BANK ACCOUNT WITH AXIS BANK HAS BEEN NOT MADE OUT OF CASH IN HAND BALANCE AVAILABLE WITH M/S. ORTHONO VO JOINT & TRAUMA DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 9 OF 11 HOSPITAL PVT. LTD. IN WHICH THE ASSESSEE WAS DIRECT OR. WE FIND THAT THE CASH BOOK OF THE COMPANY IS REFLECTING DAY TO DAY C ASH RECEIPTS, OUT OF SAID CASH BALANCE, THE CASH DEPOSITS WERE MADE IN T HE IMPUGNED BANK ACCOUNT. THIS VIEW IS ALSO SUPPORTED BY THE FACTS T HAT THE AO HAS WITHOUT PREJUDICE, ALSO OBSERVED THAT THE ADDITION SHOULD BE CONSIDERED U/S. 2(22)(E) OF THE ACT AS THE ASSESSEE HAS RECEIVED CASH LOAN FROM THE COMPANY IN WHICH HE HAD SUBSTANTIAL I NTEREST AND SHAREHOLDING.THE LEARNED COUNSEL FOR THE ASSESSEE P LACED RELIANCE IN THE CASE OF GIRISH BANSAL &ANR V. UOI [2016] 384 IT R 161 (DELHI) WHEREIN IT WAS HELD AS UNDER: EXAMINED IN THE LIGHT OF THE LEGAL POSITION EXPLAI NED IN THE ABOVE DECISIONS, THE COURT IS OF THE VIEW THAT AS F AR AS THE PRESENT CASE IS CONCERNED, THE SUM OF RS.20 LAKHS R ECEIVED BY THE ASSESSEE WAS IN THE CONTEXT OF THE CANCELLATION OF THE SALE CERTIFICATE AND THE SALE DEED EXECUTED IN THEIR FAV OUR IN RELATION TO AN IMMOVABLE PROPERTY AND NEITHER THE A SSESSEE WAS DEALING IN IMMOVABLE PROPERTY AS PART OF HIS BUSINESS.WHILE IT COULD, IF AT ALL BE SAID TO BE IN THE NATURE OF CAPITAL RECEIPT, WHAT IS RELEVANT FOR THE PRESENT C ASE IS THAT THE REVENUE HAS BEEN UNABLE TO MAKE OUT A CASE FOR TREA TING THE SAID RECEIPT AS OF CAUSAL AND NON-RECURRING NATURE THAT COULD BE BROUGHT TO TAX UNDER SECTION 10 (3) READ WITH SECTI ON 56 OF THE ACT. IN THE LIGHT OF THE CLEAR ENUNCIATION OF THE LAW IN THE AFOREMENTIONED DECISIONS OF THE COURT, IT IS PLAIN THAT AS FAR AS THE PRESENT CASE IS CONCERNED, THE AO WAS IN ERROR IN PROCEEDINGS ON THE BASIS THAT A SUM OF RS. 20 0, 00 ,000 RECEIVED DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 10 OF 11 BY THE ASSESSEE WAS IN THE NATURE OF A CASUAL AND N ON-RECURRING RECEIPT WHICH CAN BE BROUGHT TAX UNDER SECTION 10 ( 3) OF THE ACT. HAVING HELD THAT IT COULD NOT IN THE NATURE OF CAPITAL GAIN, IT WAS NOT OPEN TO THE REVENUE TO SEEK TO BRING IT A TAX UNDER THE REVENUE RECEIPT. THERE CAN BE NO MANNER OF DOUB T THAT WHAT IS IN THE NATURE OF CAPITAL RECEIPT, CANNOT BE BROUGHT TO TAX BY RESORTING TO SECTION 10 (3) READ WITH SECTIO N 56 OF THE ACT. THEREFORE, LEARNED COUNSEL ARGUED THAT WHEN T HE CASH DEPOSITS ARE TAXED UNDER SECTION 68 IT CANNOT BE T AXED UNDER SECTION 69 OF THE ACT NOR CAN BE BROUGHT TO TAX AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. 10. IN THE LIGHT OF RATIO LAID DOWN IN ABOVE DECISION W E HOLD THAT THE CIT (A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITIO N, WHEN THE AO WAS NOT CERTAIN UNDER WHICH HEAD THE ADDITION SHOULD BE MADE. THIS MEANS TO THE AO WAS SOME WHAT AGREED THAT CASH DEPO SITS IN SAID BANK ACCOUNT ARE OUT OF CASH IN HAND AVAILABLE WITH THE SAID COMPANY. HOWEVER, THE AO DID ACCEPT THAT THE BANK OPENED IN PERTAINED TO M/S. ORTHONOVO JOINT & TRAUMA HOSPITAL PVT. LTD. ON CARE FUL CONSIDERATION OF FACTS, WE ARE OF THE VIEW THAT CASH DEPOSITS IN BANK ACCOUNT ARE OUT OF CASH IN HAND BELONGING TO M/S. ORTHONOVO JOINT & TRAUMA HOSPITAL PVT. LTD. HENCE, SOURCE OF CASH DEPOSITS ARE DULY E XPLAINED AND SAME PERTAINED TO THE COMPANY AS AS THE SOURCE OF CASH D EPOSITS ARE FROM CASH IN HAND OF THE IMPUGNED COMPANY.IN SUCH CIRCUM STANCES, WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN MAKIN G ADDITION WITHOUT BRINGING ON RECORD TO ESTABLISH THAT THERE WAS NO C ASH IN HAND BALANCE DR. HARPRIT SINGH V. DCIT-CC-II, JALANDHAR/I.T.A. N O.195/ASR/2018/A.Y.:11-12 PAGE 11 OF 11 WAS AVAILABLE WITH SAID COMPANY. THEREFORE, HAVING NOT DONE SO THE AO CANNOT ADDED THE SUM BELONGING TO COMPANY. THERE FORE, WE HOLD THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY T HE CIT (A) BY INVOKING SECTION 69 IS NOT TENABLE IN LAW, HENCE, S AME IS DELETED. ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS AL LOWED. 12. THE ORDER PRONOUNCED IN THE OPEN COURT ON 19.12.201 9. SD/- SD/- (N.K.CHOUDHRY) (O.P.MEENA) JUDICIAL MEMBER ACC OUNTANT MEMBER AMRITSAR: DATED: DECEMBER 19, 2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/ GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR