John Peter Pal Rebello, Pondicherry V. ITO, Pondicherry

ITA 1955/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7641 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 23-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 29-06-2016
• Court: TRIBUNAL
• Department Lawyers: N GOPI KRISHNA JT
• Assessee Lawyers: S LAKSHMI VENKATARAMAN
• Keywords: Peak credit; Additional evidence
• Section: 143(3); 68; 69

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A/SMC, CHENNAI , ! BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ITA NO.1955/MDS/2016 ' # $%# / ASSESSMENT YEAR : 2009-10 JOHN PETER PAUL REBELLO, NO.50, ADVOCATE CHINNATHAMBI STREET, PADMINI NAGAR, PONDICHERRY 605 012. [PAN: AAEPR 5111M ] ( &' /APPELLANT) VS. INCOME TAX OFFICER, WARD-I(1), PUDUCHERRY. ( ()&' /RESPONDENT) &' * + /APPELLANT BY : SHRI S.LAKSHMI VENKATARAMAN, FCA ()&' * + /RESPONDENT BY : SHRI N.GOPI KRISHNA, JT.CIT , $ * - /DATE OF HEARING : 23.02.2017 .% * - /DATE OF PRONOUNCEMENT : 02.03.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY ( CIT(A) FOR SHORT) DATED 07.04.2016, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREI NAFTER) FOR THE ASSESSMENT YEAR (AY) 2009-10. 2 ITA NO.1955/MDS/2016 (AY 2009-10) JOHN PETER PAUL REBELLO V. ITO 2. THE BACKGROUND FACTS OF THE CASE ARE THAT THE A SSESSEES BANK ACCOUNT FOR THE RELEVANT YEAR (WITH THREE BANKS) REFLECTED CASH DEPOSITS IN AN AGGREGATE SUM OF .5.74 LACS. THE ASSESSEE EXPLAINED THE SAME ON THE BASIS OF CASH WITHDRAWALS FROM THE SAID BANK ACCOUNTS. THE SAME, HOWEVER, WAS FOUND INCORRECT ON THE BASIS OF THE ASSESSEES CASH-BOOK. THE ASSESSEES ALTERNATE PLEA WITH REGARD TO THE WITHDRAWAL/S FROM ATM ALSO DID N OT FIND FAVOUR WITH THE LD. CIT(A), BEFORE HIM IT WAS MADE, AND WHO ALSO DID NO T ENTERTAIN THE ASSESSEES REVISED CASH BOOK, HOLDING AS UNDER: 7. DECISION AND THE REASONS: 7.1 THE UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT IS ONLY AN INVESTMENT AND THEREFORE THE AO WAS RIGHT IN INVOKING THE PROV ISIONS OF SECTION 69 OF THE ACT FOR ASSESSING THE UNEXPLAINED DEPOSIT INTO THE BANK ACCOUNT WHICH IS ONLY AN INVESTMENT MADE BY THE ASSESSEE. IT WAS NOT A CASH CREDIT TO CONSIDER IT U/S. 68 OF THE ACT. HENCE THE PRELIMINA RY OBJECTION RAISED BY THE AR IS REJECTED. 7.2 ON MERITS, THE ASSESSEE'S CONTENTION IS THAT TH E DEPOSITS WERE ALL PASSED THROUGH THE CASHBOOK MAINTAINED IN THE REGUL AR COURSE OF BUSINESS. SUCH CASH BOOK WAS SCRUTINIZED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AND HE FOUND THAT THERE WERE NO ENTRIES OF CASH DEPOSITS INTO THE BANK ACCOUNT OUT OF THE CASH AVAILABLE IN THE BOOKS . WHEN SUCH BEING THE POSITION, THE FILING OF DIFFERENT CASH BOOK AT THE APPELLATE STAGE NOW CANNOT BE ACCEPTED IN TOTO. A PERUSAL OF THE BANK ACCOUNT OF INDUS IND BANK SHOWS THAT THE AMOUNTS WITHDRAWN WERE THROUGH ATM WHICH W OULD HAVE BEEN USED FOR THE PERSONAL USE OF THE ASSESSEE AND IT IS NOT KNOWN AS TO WHY THE AMOUNT SHOULD BE WITHDRAWN FROM ATM AND THEN REDEPO SITED. AND AGAIN IT IS NOT KNOWN WHY AT ALL THE AMOUNT SHOULD BE WITHDR AWN WHEN THERE WAS NO IMMEDIATE USE. SIMILARLY IN THE ICICI BANK, THE ASS ESSEE HAD DEPOSITED CASH OF RS.2,50,000 ON 20/10/2008 AND RS.1,60,000 ON 28/ 10/2008 (NOT TAKEN BY THE AO FOR ASSESSMENT) ONLY TO HONOUR THE CHEQUE IS SUED TO M.BAQUCALAOHOUMY FOR RS.4,04,000/-. IN CANARA BANK, THE ASSESSEE MADE A CASH DEPOSIT OF RS.1, 00,000 ON 27/09/2009 TO HONOU R THE CHEQUE PAYMENT OF RS.1,00,000 ON 14/10/2008. EXCEPT THIS CASH DEPO SIT, THERE WERE NO DEPOSITS INTO THE CANARA BANK ACCOUNT AT ALL. IT MA Y BE SEEN FROM THE TRANSACTIONS THAT THERE WAS DIRECT NEXUS BETWEEN TH E DEPOSITS MADE FIRST AND THEN SUBSEQUENT WITHDRAWALS IMMEDIATELY. IT IS NOT OTHER WAY ROUND, I.E., FIRST WITHDRAWAL AND THEN DEPOSIT. THE ASSESSEE IS NOT ABLE TO ESTABLISH THE SOURCES FOR THE CASH DEPOSITS MADE INTO THE BANK AC COUNT . THE ORIGINAL CASH BOOK PRODUCED BEFORE THE AO AT THE TIME OF ASSESSME NT PROCEEDINGS DID NOT CONTAIN THE ENTRIES THAT ARE NOW AVAILABLE IN THE P RESENT CASH BOOK. HENCE, THE CASH BOOK NOW PRODUCED AT THE APPELLATE STAGE C ANNOT BE RELIED UPON. I 3 ITA NO.1955/MDS/2016 (AY 2009-10) JOHN PETER PAUL REBELLO V. ITO THEREFORE CONFIRM THE ADDITION OF RS. 5,74,000/ - B EING THE CASH DEPOSITS MADE INTO THE BANK ACCOUNTS AS UNEXPLAINED INVESTME NT ASSESSABLE U/S 69 OF THE ACT AND THE ORDER OF THE AO IS CONFIRMED. (EMPHASIS, BY ITALICS, OURS) 3. DURING HEARING, THE ASSESSEES CONTENTION WAS W ITH REGARD TO BEING ALLOWED PEAK CREDIT AND, TWO, FOR CONSIDERATION OF THE REMAND REPORT DATED 23/3/2016 BY THE AO (COPY ON RECORD), TO WHICH NO REFERENCE STANDS MADE BY THE LD. CIT(A) IN HIS ORDER, PLACING A COPY OF THE SAME ON RECORD. THE LD. DR WOULD RELY ON THE ORDERS BY THE AUTHORITIES BELOW. 4. THE PARTIES HAVE BEEN HEARD, AND THE MATERIAL ON RECORD PERUSED. THE ASSESSEES CLAIM OF BEING LIABLE TO BE TAXED A T THE PEAK CREDIT IS NOT VALID IN-AS-MUCH AS THE SAME IMPLIES CHURNING OF TH E SAME FUNDS, WHICH WAS NOT FOUND ON VERIFICATION OF HIS ACCOUNTS (CASH BOOK), WHICH FINDING HAS NOT BEEN CHALLENGED OR DISPUTED. FURTHER, THE LD. CIT(A) HAS RIGHTLY DECLINED ADMISSION OF THE ADDITIONAL EVIDENCE IN THE APPELLATE PROCEEDING S - NO REASON FOR WHICH STANDS FURNISHED, IN THE FORM OF THE REVISED CASH-BOOK. TH EN, AGAIN, IT IS ONLY THE CASH BOOK AS MAINTAINED IN THE REGULAR COURSE OF HIS BUS INESS THAT COULD BE RELIED UPON IN EVIDENCE BY THE ASSESSEE. TWO, THE PRESUMPT ION UNDERLYING A CASH WITHDRAWAL (FROM THE BANK, WHETHER BY CHEQUE OR THR OUGH ATM) WOULD ONLY BE OF IT BEING TOWARD AN EXPENDITURE OR FOR BEING APPL IED FOR SOME PERSONAL PURPOSE, AND NOT TO SWELL THE ASSESSEES CASH BALAN CE, ONLY TO BE DEPOSITED BACK IN THE BANK ACCOUNT/S. IF AT ALL, PREPONDERANCE OF PROBABILITY WOULD DICTATE THIS OCCURRING ONLY RARELY, AS WHERE THE PURPOSE FOR WHI CH THE CASH WAS WITHDRAWN BECOMES INCAPABLE OF BEING FULFILLED, SO THAT THE S AME CAME TO BE DEPOSITED BACK IN THE BANK ACCOUNT. THAT IS, CASH WITHDRAWALS , AS A SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT/S, WHICH CONSTITUTES THE ASSESS EES CASE, ITSELF RINGS HOLLOW, I.E., BESIDES BEING UN-EVIDENCED; BEING IN FACT DIS PROVED BY THE EXAMINATION OF THE BANK ACCOUNTS BY THE LD. CIT(A) AND OF CASH BOO K BY THE AO. 4 ITA NO.1955/MDS/2016 (AY 2009-10) JOHN PETER PAUL REBELLO V. ITO THE ASSESSEES ALTERNATE PLEA, HOWEVER, IS VALID. IN MY OPINION, THE MATTER BEING FACTUAL, WITH THE ASSESSEE NOT BEING ABLE TO FURNISH ANY SATISFACTORY EXPLANATION FOR THE SOURCE OF THE CASH DEPOSIT/S IN HIS BANK ACCOUNT/S, I.E., WITH REFERENCE TO HIS ACCOUNTS OR EVEN OTHERWISE, THE LD . CIT(A) OUGHT NOT TO HAVE CALLED FOR A REMAND REPORT FROM THE AO, PARTICULARL Y WHEN HE DECLINES TO ADMIT ADDITIONAL EVIDENCE - WHICH COULD ONLY BE SUBJECT T O THE SATISFACTION OF R. 46A, IN THE FORM OF THE REVISED CASH BOOK. IT NEEDS TO B E APPRECIATED THAT THE ASSESSEES ORIGINAL EXPLANATION FOR CASH DEPOSITS W AS ONLY AS BY WAY OF REDEPOSIT OF CASH GENERATED FROM WITHDRAWALS. HOWEV ER, HAVING CALLED FOR THE SAME (REPORT REPORT), IT IS INCUMBENT ON HIM TO CON SIDER IT, AND HE CANNOT DECIDE THE APPEAL BEFORE HIM DE HORS THE SAME INASMUCH AS HIS ORDER BEARS NO REFERENCE THERETO . HIS CONSIDERATION OF THE SAME CANNOT BE PRESUMED. THE SAME THE OPERATIVE PART OF WHICH IS REPRODUCED AS UNDE R FOR READY REFERENCE, IN FACT, BEARS REFERENCE TO THE CASH WITHDRAWAL IN DECEMBER, 2011, THE RELEVANCE OF WHICH FOR THE CURRENT YEAR, THEREFORE, IS NOT UNDER STOOD: SUBSEQUENTLY, THE ASSESSEE HAS BEEN GIVEN AN OPPOR TUNITY OF BEING HEARD. THE ASSESSEES AUTHORIZED REPRESENTATIVE, SH RI V.RAMU, FCA, APPEARED AND FURNISHED THE DETAILS IN RESPECT TO TH E ADDITIONAL EVIDENCES FILED BEFORE THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS).THE ASSESSEES AUTHORIZED REPRESENTATIVE HAS STATED THA T THE ASSESSEES MAIN SOURCE OF INCOME IS FROM MONEY LENDING AND TRADING IN UTENSILS. THE ASSESSEES AUTHORIZED REPRESENTATIVE HAS FURNIS HED THE CONFIRMATION OF RECEIPT OF CASH FROM M/S. MEENAKSHI STEEL HOUSE ON 28.12.2011 AND MS. CATHERINE REBELLO THROUGH THEIR BANK ACCOU NT AND THEIR BANK ACCOUNT HAS BEEN VERIFIED AND FOUND TO BE GENU INE. SMT. ANASTAZIA REBELLO, THE MOTHER OF THE ASSESSEE, HAS GIVEN AN A MOUNT OF . 30,000/- ON 14.10.2008 VIDE CANARA BANK ACCOUNT EXTRACT FURNISH ED BY THE ASSESSEES AUTHORIZED REPRESENTATIVE ON 28.12.2011 . THEY HAVE CONFIRMED THEIR AMOUNT GIVEN TO THE ASSESSEE WELL BACK ON 28.12.2011 . AS THE EVIDENCES ARE AVAILABLE IN FILE, THE TRANSACTIONS SEEM TO BE GENU INE. (EMPHASIS, BY US) AGAIN, THERE IS NO REFERENCE TO THE DATE/S OF REC EIPT IN CASE OF SOME OSTENSIBLE LENDERS. HOW COULD, IN THE ABSENCE OF RE FLECTION IN THE REGULAR ACCOUNTS, ONE WONDERS, COULD IT BE SAID THAT CASH WHICH IS EVEN OTHERWISE 5 ITA NO.1955/MDS/2016 (AY 2009-10) JOHN PETER PAUL REBELLO V. ITO PROSCRIBED FOR BEING ACCEPTED (AS WELL AS REPAID) I N EXCESS OF A THRESHOLD LIMIT (SS. 269SS/269T), WAS RECEIVED AND, FURTHER, ON A P ARTICULAR DATE/S. THEN, AGAIN, THE SAME WOULD PRESUMABLY BE FOR SOME DEFINITE PURP OSE, WHILE THE VERY FACT OF ITS DEPOSIT IN BANK ACCOUNT/S SUGGESTS IT AS NOT SO. THE QUESTION THEREFORE THAT NEEDS TO BE CONSIDERED AND DETERMINED IS AS TO WHAT IS THE CONTEMPORANEOUS MATERIAL ON THE BASIS OF WHICH THE ASSESSEE CLAIMS TO BE PAID IN CASH BY THE NAMED LENDERS, ALONG WITH THE PURPOSE, WHICH, AS IT TURNS OUT, REMAINS ABORTIVE. THE MATTER, AS PRAYED, IS ACCORDINGLY SET ASIDE TO THE FILE OF THE LD. CIT(A) TO ADJUDICATE ON MERITS, IN ACCORDANCE WITH LAW, AF TER HEARING BOTH THE PARTIES BEFORE HIM, ALLOWING A REASONABLE OPPORTUNITY FOR T HE SAME. I DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON MARCH 02, 2017 AT CHENNAI . SD/- ( ) (SANJAY ARORA) /ACCOUNTANT MEMBER /CHENNAI, / /DATED, MARCH 02, 2017. EDN 0 * ('-12 32%- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 4- ( )/CIT(A) 4. , 4- /CIT 5. 2$56 ('-' /DR 6. 67# 8 /GF