Appeal details
Counselvise Citation
19622714 RSA 2011
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
07-03-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2007-2008
Appeal Filed On
10-08-2011
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 196/IND/2011 A.Y.2007-08 INCOME TAX OFFICER 5(3) INDORE ... APPELLANT VS SHRI SATYANARAYAN GOYAL SANAWAD PAN AHJPD-2974J ... RESPONDENT APPELLANT BY : SHRI ARUN DEWAN RESPONDENT BY : SHRI S.S. SHEETAL DATE OF HEARING : 5.3.2012 DATE OF PRONOUNCEMENT: 7.3.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 31.5.2011 PASSED BY LEARNED 2 COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE, ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO THE FACTS AND LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 23,80,960/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE TWO UNDECLARED BANK ACCOUNT, WHEN ASSESSEE WASS UNABLE TO PROVE THE GENERATION OF FUNDS OF HUF AND ITS SUBSEQUENT DIVERSION TO BANK ACCOUNTS NOT OF HUF. 3. WHILE HOLDING SO THE LEARNED CIT(A) ERRED IN RELYING UPON MEDICAL EVIDENCE CLAIMING INTERMITTENT LOSS OF MEMORY, NOT CLAIMED BY ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND NOT SUPPORTED BY ANY SUCH DIAGNOSIS AS PER THE MEDICAL REPORTS. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD SHRI ARUN DEWAN, LEARNED SR. DR AND SHRI S.S. SHEET AL, LEARNED COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUM ENTS ON BEHALF OF THE REVENUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ER RED IN DELETING THE ADDITION OF RS. 23,80,960/-, MADE B Y THE ASSESSING OFFICER, ON ACCOUNT OF UNEXPLAINED DEPOS ITS IN TWO UNDECLARED BANK ACCOUNTS, WHEN THE ASSESSEE DID 3 NOT PROVE THE GENERATION OF FUNDS OF HUF AND ITS SUBSEQUENT DIVERSION TO BANK ACCOUNT. HE FURTHER SUBMITTED THAT SINCE THE ASSESSEE NEVER RAISED THE PLEA REGARDING INTERMITTENT LOSS OF MEMORY DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, IT WAS NOT PROPER ON THE PART OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO GIVE RELIEF TO THE ASSESSEE WITHOUT THE MEDICAL REP ORTS. IT WAS ALSO PLEADED THAT THERE IS VIOLATION OF RULE 46 A OF THE INCOME TAX RULES AS THE LEARNED CIT(A) HAS ADMITTED FRESH EVIDENCE. ON THE OTHER HAND, THE LEARNED CO UNSEL FOR THE ASSESSEE, WHILE SUPPORTING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), SUBMITTED THAT SINCE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DID CALL FOR THE REMAND REPORT FROM THE ASSESSING OFFICER ON THE PAPERS RELATING TO INTERMITTENT LOSS OF MEMORY AND OTHER PAPERS SUBMIT TED BEFORE HIM, THERE WAS NO VIOLATION OF RULE 46A ON T HE PART OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) . HE SUBMITTED THAT IT WAS ONLY AFTER APPRECIATION OF THE 4 SUBMISSIONS OF THE ASSESSEE IN VIEW OF THE REMAND R EPORT THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ALLOWED THE CLAIM OF THE ASSESSEE AND AS SUCH THERE IS NO MISTAKE IN HIS ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE WAS AN EMPLOYEE IN THE FIRM M /S ASHIRWAD INDUSTRIES, SANAWAD AND HE WAS ALSO ENGAGE D IN SEASONAL COTTON BUSINESS. THE ASSESSEE FILED RET URN OF INCOME DECLARING TOTAL INCOME AT RS. 1,13,378/- AND AGRICULTURAL INCOME AT RS. 1,50,858/-. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER ISSUED NOTICES U/S 143(2) AND COMPLIANCES WERE MADE AS NOT ED IN ASSESSMENT ORDER. ON VERIFICATION OF RECORD, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE DEPARTMENT HAS INFORMATION FROM AIR OF STANDARD CHARTERED BANK AND CITI BANK ABOUT BANK ACCOUNTS IN THE NAME AND PAN O F THE ASSESSEE. HE ALSO FOUND THAT THE ASSESSEE DID NOT SUBMIT DETAILS OF THESE TWO BANK ACCOUNT WITH STAND ARD 5 CHARTERED BANK & CITI BANK IN WHICH CASH DEPOSITS H AD BEEN MADE BY THE ASSESSEE AMOUNTING TO RS. 1240100/ - & RS. 1140860/-, RESPECTIVELY. THE ASSESSING OFFICE R, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN ABOUT THE SAME BUT THE ASSESSEE DID NOT FURNISH ANY EXPLANATION THEREFOR. HOWEVER, THE ASSESSEE STATED THAT THE INFORMATION SOUGHT FOR BY THE ASSESSING OFFICER REL ATED TO HIS PERSONAL ACCOUNT AND DUE TO NON AVAILABILITY OF COPY OF BANK ACCOUNTS, HE WAS NOT IN A POSITION TO EXPLA IN THE SAME. IN SPITE OF GIVING MANY OPPORTUNITIES, THE A SSESSEE COULD NOT EXPLAIN THE SAME. IN THE ABSENCE OF THE SAME, THE ASSESSING OFFICER FOUND HIMSELF SATISFIED THAT THE ASSESSEE HAS NO EXPLANATION TO TENDER ABOUT THESE TRANSACTIONS. THE ASSESSING OFFICER, THEREFORE, TR EATED THESE TRANSACTIONS AS UNEXPLAINED CASH DEPOSITED IN THE ACCOUNTS OF THE ASSESSEE. HE, THEREFORE, ADDED THE AMOUNTS OF DEPOSITS OF RS.23,80,960/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INCOME FROM O THER SOURCES. 6 4. FELT, AGGRIEVED, THE ASSESSEE APPROACHED THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE FILED WRITTEN SUBMISSIONS. IN ADDITION, IT WAS ALSO SUBMITTED THAT THE ASSESSEE WAS NOT PROVIDED WITH ADEQUATE OPPORTUNITY TO REPRESENT HIS CASE. IT WAS BROUGHT ON RECORD THAT THE ASSESSEE HAD UNDERGONE A MAJOR BRAIN SURGERY AND THEREAFTER HE WAS SUFFERIN G FROM INTERMITTENT LOSS OF MEMORY. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FORWARDED WRIT TEN SUBMISSIONS OF THE ASSESSEE TO THE ASSESSING OFFICE R WITH THE DIRECTION TO MAKE NECESSARY INQUIRY AND SUBMIT HIS REMAND REPORT. 5. IN RESPONSE, THE ASSESSING OFFICER SUBMITTED HIS REMAND REPORT WHEREIN HE ACCEPTED THE ASSESSEES PL EA ABOUT HIS BRAIN SURGERY. THE ASSESSING OFFICER CALL ED FOR DETAILS AND EVIDENCE FROM THE ASSESSEE IN REGARD TO NATURE AND SOURCE OF BANK DEPOSITS. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE EXPLAINED THAT THE MAIN OR RATHER ONLY SOURCE OF DEPOSITS MADE IN THE BANK 7 ACCOUNTS WAS EXPLAINED BY THE ASSESSEE AS FUNDS OF THE HUF WITH THE ASSESSEE AS KARTA. THE ASSESSING OFFIC ER ALSO PROVIDED THE GENEALOGICAL TREE OF THE ASSESSEE S FAMILY IN THE REMAND REPORT AND DETAILS OF THE INCO ME OF THE ASSESSEES HUF FROM AGRICULTURE, RENTAL INCOME AND INCOME FROM FLOUR MILLS WAS REPORTED APART FROM DET AILS OF IMMOVABLE ASSETS AND CASH/FUNDS-FLOW STATEMENT F OR THE FINANCIAL YEARS 1992-93 TO 2006-07. THE MEMBERS OF THE SAID HUF WERE REPORTED TO BE THE ASSESSEE, HIS BROTHER AND THEIR WIVES AND CHILDREN AND THE SISTER OF THE ASSESSEE HAVING ALREADY BEEN MARRIED LONG BACK. IT WAS ALSO REPORTED THAT THE TOTAL INCOME OF THE ASSESSEE FOR THE PRECEDING ASSESSMENT YEARS REMAINED BELOW TAXABLE LIMITS. 6. THE ASSESSING OFFICER ON VERIFICATION FOUND THA T THE INDIVIDUAL BUSINESS OF THE ASESSEE OR HIS BROTH ER SHRI RAJENDRA KUMAR GOYAL OR ANY FUNDS RELATED TO THEIR INDIVIDUAL BUSINESSES WHICH IS NOT AT ALL INVOLVED IN THE DEPOSITS IN THE TWO BANKS NAMED ABOVE. IT IS ALSO 8 REPORTED BY THE ASSESSING OFFICER THAT CONTEMPORANE OUS EVIDENCE OF EXISTENCE OF HUF FUNDS OR THE NUCLEUS O F THE HUF OR EVIDENCE OF MOVABLE AND IMMOVABLE PROPERTIES INCLUDING AGRICULTURAL LANDS ACQUIRED BY ASSESSEES ANCESTORS WAS FILED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE. THE CASH/FUNDS FLOW STATEMENT SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER EXPLAINE D THE INITIAL AND SUBSTANTIAL DEPOSITS IN THE CITI BANK A ND STANDARD CHARTERED BANK BRANCHES AND THEREAFTER THE PEAK OR THE TELESCOPIC BENEFIT ON ACCOUNT OF WITHDR AWALS AND REDEPOSITS WAS ALSO FOUND BY THE ASSESSING OFF ICER TO BE CLEARLY AVAILABLE TO THE ASSESSEES HUF. THE ASSESSING OFFICER ALSO OBSERVED IN THE REMAND REPOR T THAT HE PERUSED THE BULK OF DOCUMENTS RELATING TO THE ASSESSEES AILMENT AND HE APPRECIATED THAT THE ASSE SSEE DUE TO HIS AILMENT COULD NOT MAKE SO MUCH OF COMPLIANCE AT ASSESSMENT STAGE AS HE HAS MADE DURIN G REMAND PROCEEDINGS. 9 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FORWARDED A COPY OF THE ABOVE REMAND REPORT TO THE ASSESSEE FOR HIS COMMENTS IN RESPONSE TO WHICH THE ASSESSEE MADE WRITTEN SUBMISSIONS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) REQUIRED THE ASSESSEE TO EXPLAIN OPENING OF BANK ACCOUNTS AND SUBSEQUENT TRANSFER THEREIN FROM HUF FUNDS AS CLAIM ED WITH DETAILS AND DOCUMENTS AS SUBMITTED BEFORE THE ASSESSING OFFICER AND ALSO TO EXPLAIN HOW SUCH FUN DS WERE AVAILABLE WITH HIM AND UTILIZED BEFORE DEPOSITING THE SAME IN BANK ACCOUNTS. IN COMPLIANCE THERETO THE ASSESSE E FILED THE FOLLOWING EXPLANATION :- 1. IN THE COURSE OF APPEAL HEARING ON 26-05-11, YOUR HONOUR HAS REQUIRED THE APPELLANT ASSESSEE TO EXPLA IN OPENING OF BANK ACCOUNTS AND SUBSEQUENT TRANSFER THEREIN FR OM HUF FUNDS AS CLAIMED- WITH DETAILS AND DOCUMENTS AS SUB MITTED BEFORE THE AO AND TO FURTHER EXPLAIN HOW SUCH FUNDS WERE UTILIZED BEFORE DEPOSITING THE SAME IN BANK ACCOUNT S. 2. AS ALREADY SUBMITTED, THE FUNDS OF THE HUF REMAINING UNDER THE CONTROL OF KARTA OF HUF WERE UTILIZED ONLY FOR THE PURPOSES OF HUF AND NO OTHER BENEFIT FROM THE SAME HAS BEEN TAKEN IN ANY WAY BY ANY INDIVIDUAL M EMBER OF THE HUF. 10 3. AS PER DETAILS AND DOCUMENTS AVAILABLE WITH THE ASSESSEE, THE FUNDS HAVE BEEN MOSTLY UTILIZED IN MA KING BANK FDRS IN THE NAMES OF MEMBERS OF HUF. DETAILS OF SUC H FDRS ARE GIVEN IN THE FOLLOWING TABLE :- S. NO. NAME OF BANK NAME OF HUF MEMBER IN WHOSE NAME FDR MADE FDR NO. AMOUNT OF FDR (RS.) DATE/ DUE DATE 1. THE UNITED WESTERN BANK LTD., SANAWAD MADANLAL DEVILAL GOYAL 148184 20,000 29-10-88/ 29-10-89 2. THE UNITED WESTERN BANK LTD., SANAWAD KRISHI UPAJ MANDI SAMITI A/C MADANLAL DEVILAL GOYAL 240297 5,000 04-10-89/ 04-10-90 3. THE UNITED WESTERN BANK LTD., SANAWAD SATYANARAYAN MADANLAL 078961 1,00,000 06-08-91/ 06-11-91 4. THE UNITED WESTERN BANK LTD., SANAWAD SATYANARAYAN MADANLAL GOYAL 210524 1,00,000 10-08-94/ 10-08-95 5. THE UNITED WESTERN BANK LTD., SANAWAD RAJENDRAKUMAR MADANLAL GOYAL 210523 1,00,000 10-08-94/ 10-08-95 6. THE UNITED WESTERN BANK LTD., SANAWAD RAJENDRAKUMAR MADANLAL GOYAL 340510 60,000 08-01-96/ 08-01-97 7. THE UNITED WESTERN BANK LTD. ,SANAWAD SMT. PARWATIBAI MADANLAL GOYAL 452632 60,000 08-07-96/ 08-07-97 8. THE UNITED WESTERN BANK LTD. ,SANAWAD RAJENDRAKUMAR MADANLAL GOYAL 452633 60,000 08-07-96/ 08-07-97 9. THE UNITED WESTERN BANK LTD. ,SANAWAD SATYANARAYAN MADANLAL GOYAL 452634 60,000 08-07-96/ 08-07-97 10. THE UNITED SATYANARAYAN 525382 60,000 10-01-98/ 11 3.1 POSITION OF CASH AVAILABLE AS PER CASH FLOW STATEMENT AT THE END OF VARIOUS YEARS PRECEDING THE YEAR UNDER APPEAL IS AS UNDER: WESTERN BANK LTD. ,SANAWAD MADANLAL GOYAL 10-01-99 11. THE UNITED WESTERN BANK LTD. ,SANAWAD RAJENDRAKUMAR MADANLAL GOYAL 538285 60,000 12-01-99/ 12-01-2000 12. THE UNITED WESTERN BANK LTD. ,SANAWAD SMT. PARWATIBAI MADANLAL GOYAL 551340 60,000 06-01-2000/ 06-01-2001 13. THE UNITED WESTERN BANK LTD. ,SANAWAD RAJENDRAKUMAR MADANLAL GOYAL 553400 60,000 08-01-2001/ 08-01-2002 14. THE UNITED WESTERN BANK LTD. ,SANAWAD MASTER ANKIT SANTOSH AGRAWAL 553398 60,000 08-01-2001/ 08-01-2002 15 THE UNITED WESTERN BANK LTD., SANAWAD MASTER ARPIT SANTOSH AGRAWAL 553403 60,000 08-01-2001/ 08-01-2002 16. THE UNITED WESTERN BANK LTD., SANAWAD SMT. PARWATIBAI MADANLAL GOYAL 552750 60,000 27-07-2001/ 27-05-2002 17. THE UNITED WESTERN BANK LTD., SANAWAD SATYANARAYAN MADANLAL GOYAL 607612 60,000 10-01-2002/ 10-01-2003 18. THE UNITED WESTERN BANK LTD., SANAWAD SMT. PARWATIBAI MADANLAL GOYAL 653810 6,00,000 08-06-2003/ 08-07-2003 12 DATE CASH FDR TOTAL 31-03-01 RS. 7,07,622/- ( 4 FDRS OF RS.2,00,000/-) RS. 9,07,622/- 31-03-02 RS. 9,19,893/- RS.10,39,893/- 2 FDRS RS. 1,20,000/- 31-03-03 RS. 11,72,213/ NO FDR RS. 11,72,213/- 31-03-04 RS.13,01,193/ 1 FDR 0F RS. 6,00,000/- 31-03-05 RS.13,01,193/ TAKEN ON 08-06-03 AND MATURED ON 08-07- 03 AFTER MATURITY,ADVANCE OF RS. 7,00,000/- WAS MADE FOR LAND PURCHASE BUT WAS RECEIVED BACK ON 18-11- 200 ON CANCELLATION OF DEAL] 31-03-06 RS. 14,30,000/- RS. 14,30,000/- NO FDR 31-03-07 RS. 14,77,010/- RS. 14,77,010/- NO FDR PEAK CREDITS IN THE BANK ACCOUNTS WITH STANDARD CHARTERED BANK AND CITI BANK DURING THE YEAR UNDER APPEAL ARE AS UNDER :- STANDARD CHARTERED BANK RS. 4,00,007/- AS ON 12-05-2006(AS PER ENCLOSED COPY OF A/C NO. 80010004260 WITH THE BANK) CITI BANK RS. 10,25,000/- AS ON 02-05-2006(AS PER ENCLOSED COPY OF A/C NO. 5001552548 WITH THE BANK) 3.2 THUS ,THE MAXIMUM ADDITION THAT COULD HAVE BEEN MADE FOR ALLEGEDLY UNEXPLAINED DEPOSITS THEREI N 13 COULD HAVE BEEN OF RS.. 14,25,007/- (4,00,007/-PLUS 10,25,000/- ) IN ANY CASE. THE AO HAS MADE ADDITION OF TOTAL DEPOSITS OF RS. 23,80,960/-(12,40,100/- PL US 11,40,860/- ) IN THE BANK A/CS DURING THE PREVIOUS YEAR. THE AO, WHILE MAKING ADDITIONS, HAS NOT GIVEN THE BENEFIT OF WITHDRAWALS MADE FROM THE SAME BANK ACCOUNT WHICH WERE AVAILABLE TO THE APPELLANT FOR REDEPOSITING SUBSEQUENTLY . FOR EXAMPLE, IN THE CAS E OF STANDARD CHARTERED BANK, BEFORE CREDIT ENTRY OF RS. 2,00,000/- ON 21-04-06, THERE IS A WITHDRAWAL OF RS . 15,000/- ON 20-04-06 WHICH WAS AVAILABLE TO THE ASSESSEE AND SHOULD HAVE BEEN GIVEN CREDIT OF WHILE MAKING IMPUGNED ADDITION. LIKEWISE, BEFORE CREDIT ENTRY OF RS. 3,65,100/- ON 12-05-06 , THERE ARE WITHDRAWALS ON VARIOUS DATES AMOUNTING TO RS. 2,50,500/- (2,00,000 ON 24-04-06,+50,000, ON 26-04 - 06,+16,000 ON 29-04-06,-70,000 ON 03-05-06,+500 ON 03-05-06,+19,000 ON 03-05-06, +60,000 ON 06-05-06,- 25,000 ON 12-05-06 ). IN OTHER WORDS, THE PEAK BENE FIT OR THE BENEFIT OF TELESCOPING OR INTERNAL SET OFF W AS NOT CONSIDERED BY THE AO IN THE BEST JUDGMENT ADDITION S MADE BY HIM IN THE IMPUGNED ASSESSMENT . 3.3 SIMILARLY, IN THE CASE OF CITI BANK, BEFORE CR EDIT ENTRY OF RS. 5,00,000/- ON 02-05-06, THERE IS WITHDRAWAL OF RS. 25,000/- ON 01-05-06 WHICH WAS AVAILABLE TO THE ASSESSEE AND SHOULD HAVE BEEN GIV EN CREDIT OF WHILE MAKING IMPUGNED ADDITION. LIKEWISE, THERE IS A WITHDRAWAL OF RS. 10,20,000/- ON 03-05- 06 FOLLOWED BY FURTHER TWO WITHDRAWALS OF RS. 20,00 0/- EACH ON 19-05-06. THUS, A SUM OF RS. 10,60,000/- WAS AVAILABLE WITH THE ASSESSEE ON 03-05-06 FOR FURTHER DEPOSITS WHICH HAS NOT BEEN CONSIDERED BY T HE AO WHILE MAKING IMPUGNED ADDITION ON A/C OF 14 SUBSEQUENT DEPOSITS . IN THE RESULT, THE AO SHOULD HAVE GIVEN BENEFIT OF WITHDRAWALS AT LEAST OF RS. 13,25,500/-(15,000 PLUS2,50,500/- PLUS 10,60,000/- ). THE AO HAS MADE ADDITION OF RS. 23,80,960/- WITHOUT GIVING SET OFF FOR WITHDRAWALS AN ADDITION OF RS. 13,25,500/-. IN OTHER WORDS, THE PEAK BENEFIT O R THE BENEFIT OF TELESCOPING OR INTERNAL SET OFF WAS NOT CONSIDERED BY THE AO IN THE BEST JUDGMENT ADDITION S MADE BY HIM IN THE IMPUGNED ASSESSMENT IN RESPECT OF BOTH THE BANK ACCOUNTS. 3.4 THE AOS REMAND REPORT, IN THE MIDDLE SUB-PARA OF PARA 5 ON PAGE 3 THEREOF CATEGORICALLY REPORTS THUS : THE CASH/FUND LOW STATEMENT SUBMITTED BY THE ASSESSEE EXPLAINS THE INITIAL AND SUBSTANTIAL DEPOS ITS IN THE CITI BANK AND STANDARD CHARTERED BANK BRANCHES AND THEREAFTER, THE PEAK OR THE TELESCOPIN G BENEFIT ON ACCOUNT OF WITHDRAWALS AND RE DEPOSITS I S ALSO FOUND TO BE CLEARLY AVAILABLE TO THE HUF OF TH E ASSESSEE. THE BASIS FOR SUCH A REPORTING IS THE EXPLANATION DETAILED ABOVE WHICH WAS DEMONSTRABLY GIVEN BEFORE THE AO DURING REMAND PROCEEDINGS BUT WHICH IS NOT RECORDED IN HIS REMAND REPORT RENDERING THE REMAND REPORT ON THIS ASPECT A NON SPEAKING ONE. WITH THE ABOVE EXPLANATION AND ELABORATION, IT IS HOPED THAT YOUR HONOUR SHALL BE SATISFIED ABOUT THE CORRECTNES S OF THE CONTENTIONS OF THE APPELLANT WITH REGARD TO THE BANK DEPOSITS HAVING BEEN SOURCED FROM THE HUF FUNDS. 3.5 PHOTO COPIES OF ALL THE ABOVE FDRS ARE ENCLOSED COLLECTIVELY MARKED AS ANNEXURE-I. FROM THE PERUSAL 15 OF THE ENCLOSED FUND-FLOW STATEMENT, IT WILL BE APPRECIATED THAT THE ABOVE FDRS FIND PLACE IN THE SAME BOTH AT THE TIME OF MAKING THE FDRS AND ALSO A T THE TIME OF THEIR MATURITY, AS HIGH LIGHTED IN THE STATEMENT. IT WILL NOT BE OUT OF PLACE TO MENTION H ERE THAT SHRI SATYANARAYAN SUFFERS FROM INTERMITTENT MEMORY LOSS AND THIS FACT HAS BEEN APPRECIATED BY THE AO ALSO IN HIS REMAND REPORT. THEREFORE, ON BEI NG ASKED BY YOUR HONOUR TO EXPLAIN UTILIZATION OF HUF FUNDS, SHRI SATYANARAYAN TRIED TO RECOLLECT OLD TRANSACTIONS. AFTER TRYING, HE RECOLLECTED VERY REC ENTLY THE FACTS OF MAKING SOME MORE FDRS AND SEARCHED THE OLD DOCUMENTS. AS A RESULT OF THE SEARCH, HE FO UND THAT THE HUF HAD MADE FDRS IN ADDITION TO FDRS AT S.NO.1 TO 3 ALSO, AS ABOVE. HENCE THE SAME HAVE BEE N INCORPORATED IN THE ATTACHED FUND FLOW STATEMENT. 4. IN ADDITION TO ABOVE UTILIZATION OF HUF FUNDS, THE HUF, THROUGH ITS KARTA SATYANARAYAN GOYAL, ENTERED INTO AN AGREEMENT WITH SHRI NANDAJI VENIRAM PRAJAPAT, SANAWAD FOR PURCHASE OF AGRICULTURAL LAND BEARING PH NO. 50, KHASRA NO. 508/17 MEASURING 0.021 HECTARE FOR RS. 8,11,000/- ON 10-07-2003 AND PAID RS. 7,00,000/- AS ADVANCE IN CASH FOR THE SAME . ON ACCOUNT OF SOME DISPUTE IN THE FAMILY OF THE SEL LER SHRI NANDAJI, THE SAID AGREEMENT COULD NOT BE MATERIALISED AND WAS CANCELLED. ON CANCELLATION OF AGREEMENT, THE SELLER RETURNED THE AMOUNT OF ADVANC E OF RS. 7,00,000/- ON 18-11-2003. A COPY OF THE AGREEMENT EMBODYING THEREIN THE CANCELLATION OF THE SAID AGREEMENT IS ALSO ENCLOSED AS ANNEXURE-II. 5. SO FAR AS THE MOVEMENT OF FUNDS IS CONCERNED, A FUND-FLOW STATEMENT FOR THE PERIOD 30-03-82 TO 31-0 3- 07 IS ENCLOSED AS ANNEXURE-III. 6. A COPY OF FIVE YEARS KHASRA IN FORM NO P.II IN THE NAME OF MOTILAL GANGARAM GOYAL, THE GREAT GRAND 16 FATHER OF THE KARTA SATYANARAYAN FOR THE PERIOD 197 6- 77 TO 1979-80 AND IN THE NAMES OF SMT. PARWATIBAI MADANLAL, SATYANARAYAN, RAJENDRAKUMAR MADANLAL GOYAL FOR THE PERIOD 2005-06 TO 2008-09 IN RESPECT OF AGRICULTURAL LANDS BEARING KHASRA NO. 559/3 IS ENCLOSED COLLECTIVELY MARKED AS ANNEXURE-IV. 7. A COPY OF BANK ACCOUNT NUMBER 800-1-000426-0 WITH STANDARD CHARTERED BANK IN THE NAME OF SATYANARAYAN GOYAL IS ENCLOSED AS ANNEXURE-V. 8. A COPY OF BANK ACCOUNT NUMBER 556010031666 WITH ING VYSYA BANK IN THE NAME OF SATYANARAYAN GOYAL IS ENCLOSED AS ANNEXURE-VI. 9. A COPY OF BANK ACCOUNT NUMBER 5-001552-548 WITH CITI BANK IN THE NAME OF SATYANARAYAN GOYAL IS ENCLOSED AS ANNEXURE-VII. 10. A COPY OF BANK ACCOUNT NUMBER 5-001569-548 WITH CITI BANK IN THE NAME OF UMA AGRAWAL, SISTER O F SATYANARAYAN IS ENCLOSED AS ANNEXURE-VIII. 11. A COPY OF BANK ACCOUNT NUMBER 800-1-002529-2 WITH STANDARD CHARTERED BANK IN THE JOINT NAMES OF SATYANARAYAN GOYAL AND UMA AGRAWAL IS ENCLOSED AS ANNEXURE-IX. 12. FROM A PERUSAL OF CASH-FLOW STATEMENT AND THE AFORESAID BANK ACCOUNTS, IT WILL BE APPRECIATED THA T ALL THE DEPOSITS MADE IN THE SAID BANK ACCOUNTS DUL Y FIND PLACE IN THE CASH-FLOW STATEMENT WHICH PROVES THE FACT THAT THE DEPOSITS HAVE ACTUALLY BEEN MADE WITH THE HELP OF HUF FUNDS AVAILABLE WITH SHRI SATYANARAYAN AS KARTA OF THE HUF AT THE MATERIAL TIME. 8. AFTER CONSIDERING THE FACTS OF THE CASE, ASSESSM ENT ORDER, REMAND REPORT, REPLY OF THE ASSESSEE TO THE REMAND REPORT AND THE SUBMISSIONS MADE BY THE ASSESSEE, TH E 17 LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OBSERV ED AS UNDER :- THE FIRST TWO GROUNDS PIVOT AROUND THE ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT S WHILE THE LATTER TWO ARE DIRECTED AGAINST THE AO NO T GIVING ADEQUATE TIME FOR LEADING EVIDENCE OF THE NA TURE AND SOURCE OF SUCH BANK DEPOSITS. IT WILL BE APPROPRIATE TO EXPECT RELEVANT PORTION OF REMAND RE PORT SUBMITTED BY AO. ASSESSEE EXPLAINED THAT THE MAIN OR RATHER ONLY SOURCE OF DEPOSITS MADE IN THE BANK ACCOUNTS WERE THE FUNDS OF THE HUF WITH SHRI SATYANARAYAN GOYAL O F SANAWAD (THE PRESENT ASSESSEE) AS KARTA. THIS WAS, HOWEVER, NOT EXPLAINED AT THE TIME OF ASSESSMENT PROCEEDINGS FOR THE SUBJECT ASSESSMENT YEAR. IN THE COURSE OF REMAND PROCEEDINGS, THE ASSESSEE HAS MADE DETAILED SUBMISSIONS ABOUT EXISTENCE OF HUF FUNDS OR THE NUCLEUS OF THE HUF SUPPORTED BY CONTEMPORANEOUS EVIDENCE OF OWNERSHIP OF IMMOVABLE PROPERTIES INCLUDING AGRICULTURAL LAND ACQUIRED BY ASSESSEES ANCESTORS VIZ. HIS FATHER LATE MADANLAL (AS WELL AS MOTHER LATE PARVATI BAI), HIS GRANDFATHER L ATE DEVILAL AND SO ALSO HIS GREAT GRANDFATHER LATE MOTI LAL. THE REGISTERED DOCUMENTS EVIDENCING ACQUISITION AND OWNERSHIP OF IMMOVABLE PROPERTIES BY ANCESTORS OF T HE ASSESSEE ARE ENCLOSED TO THE ASSESSEES EXPLANATIO NS. AS REGARDS EXISTENCE OF THE REGULAR SOURCES OF INCO ME BY WAY OF AGRICULTURAL INCOME, THE RIN EVAM BHOO ADHIKAR PUSTIKA SHOWING THE EXTENT OF AGRICULTURAL HOLDING HELD BY THE PRESENT COPARCENERS AS WELL AS THEIR ANCESTORS I.E., B-1 AND P-II, I.E., KHASRA AS WELL AS KHATONI, THE LATTER SHOWING THE VARIOUS CROPS TA KEN BY THE ASSESSEE FROM THE YEAR 1976 UP TO THE YEAR 2006-07 DULY CERTIFIED BY THE CONCERNED REVENUE AUTHORITY WERE ALSO FILED BY THE ASSESSEE ON DEMAND . THE CROPS TAKEN WERE MAINLY THOSE OF WHEAT, TUWAR AND MIRCHI AS PER THE FORMS P-II. THE VALUE OF CRO PS 18 TAKEN WAS ALSO JUSTIFIED BY THE WELL AVAILABLE ON T HE LAND FOR IRRIGATION ROUND THE YEAR & SO ALSO BY THE PURCHASE BILLS FOR FERTILIZER AND THE DETAILS OF SA LE OF AGRICULTURE PRODUCE EFFECTED BY THE ASSESSEE THROUG HT THE KRISHI UPAJ MANDI SAMITI, SANAWAD AS WELL AS DIRECTLY. IN SUPPORT OF EXISTENCE OF NON AGRICULTU RAL INCOME, EVIDENCE OF OWNERSHIP OF HOUSE PROPERTIES GIVEN ON RENT AS WELL AS THOSE USED FOR RUNNING THE FLOUR MILLS, BIG REGISTERED DOCUMENTS, HAVE BEEN FI LED. THESE REGISTERED DOCUMENTS RELATE BACK TO ASSESSEE S ANCESTORS. APART FROM THIS, APPLICATIONS MADE TO INDUSTRIES AND SHOPS & ESTABLISHMENT DEPARTMENTS SHOW THE ANCESTRAL OR PAITRIK NATURE OF OWNERSHIP OF PREMISES AND ALSO MANAGEMENT BY THE COPARCENER SHRI RAJENDRA KUMAR GOYAL. TO SUM UP, THERE IS EVIDENCE OF VERIFIABLE OWNERSHIP OF THE NUCLEUS OR ANCESTRAL NATURE OF PROPERTIES ON THE ONE HAND AND THERE IS ALSO EVIDENCE OF VERIFIABLE CARRYING ON OF AGRICULTURAL AND BUSINESS ACTIVITIES. ACCORDING TO THE CASH/FUNDS FLOW CHART ALSO THE NON-AGRICULTURAL INCOME OF ASSESSEES HUF DOES NOT EXCEED THE CORRESPONDING NON-TAXABLE MAXIMUM LIMITS FOR THE RELEVANT PAST ASSESSMENT YEARS. THE CASH/FUNDS FLOW STATEMENT SUBMITTED BY THE ASSESSEE EXPLAINS THE INITIAL AND SUBSTANTIAL DEPOSITS IN TH E CITI BANK AND THE STANDARD CHARTERED BANK BRANCHES AND THEREAFTER, THE PEAK OR THE TELESCOPING BENEFIT ON ACCOUNT OF WITHDRAWALS AND RE DEPOSITS IS ALSO FOUN D TO BE CLEARLY AVAILABLE TO THE HUF OF THE ASSESSEE. THE CASE RECORDS CONTAINING ASSESSEES EXPLANATION DATED 03.05.2011, 06.05.2011, 10.05.2011, 11.05.2011 AND 12.05.2011 DULY FLAGGED ARE ENCLOSED IN THREE VOLUMES. THE REMAND PROCEEDINGS HAD TO HELD VIRTUALLY ON A DAY TO DAY BASIS BECAUSE YOUR HONOUR HAD REQUIRED SUBMISSION OF THE REMAND REPORT BY TODAY. WHEN THE BULK OF DOCUMENT ENCLOSED WITH THE ASSESSEES REPLY LETTERS IS SEEN IN THE LIGHT OF HI S AILMENT AS CLAIMED, IT BECOMES NECESSARY TO REPORT THE EXTENT OF ASSESSEES AILMENTS ALSO. AFTER PERUSAL OF 19 THE BULK OF DOCUMENTS INVOLVING ASSESSEES PRE AS W ELL AS POST NEURO-SURGERY INVESTIGATIONS AND TREATMENTS , IT MAY BE SUBMITTED THAT THE ASSESSEES BRAIN SURGERY HAD BEEN CARRIED OUT IN SEPTEMBER, 2007. IT MAY BE SUBMITTED THAT THE PRESCRIPTIONS FOR INVESTIGATIONS AND TREATMENTS AND THEREAFTER, THE BRAIN SURGERY OF THE ASSESSEE TOGETHER WITH DISCHARGE LETTERS IN 46 SHEE TS ARE ENCLOSED AS ONE OF THE ANNEXURES TO ASSESSEES LETTER DATED 10.05.2011. AFTER PERUSAL OF THESE DOCUMENTS IT BECOMES CLEAR THAT THE ASSESSEES CONTENTIONS OF HIS INABILITY TO MAKE PROPER COMPLIA NCE AT ASSESSMENT STAGE ALSO SEEMS TO BE ACCEPTABLE. (EMPH ASIS SUPPLIED) 4.1.1 THE AO HAS SATISFIED HIMSELF ABOUT THE APPELLANTS AILMENT AND FOR THAT REASON HIS INABILI TY TO EXPLAIN THE NATURE AND SOURCE OF DEPOSITS DURING ASSESSMENT PROCEEDINGS AND THE AO HAS ALSO SATISFIE D HIMSELF ABOUT THE EXISTENCE OF THE APPELLANTS HUF, OF SUCH HUF HAVING SUFFICIENT MOVEABLE AND IMMOVEABLE PROPERTIES AS WELL AS INCOMES THERE FROM AND FINALL Y THE AO WAS PRIMA FACIE ALSO SATISFIED ABOUT THE APPELLANTS EXPLANATION OF THE NATURE AND SOURCE OF THE BANK DEPOSITS, AS NO ADVERSE COMMENTS, ON THE FUND FLOW STATEMENT ETC SUBMITTED BEFORE HIM, ARE RECORD ED IS REMAND REPORT: 4.1.2 THE AO THOUGH HAS SENT THE ASSESSMENT FOLDER CONTAINING COPIES OF DOCUMENTS ETC SUBMITTED BEFORE HIM ALONG WITH REMAND REPORT BUT NO CATEGORI CAL FINDINGS ABOUT THE DEPOSIT IN BANK A/C BEING EXPLAI NED WERE RECORDED IN REMAND REPORT. HENCE THE APPELLANT AS CALLED UP ON TO EXPLAIN AND SUBSTANTIATE THE SOU RCE AND AVAILABILITY OF FUNDS TO EXPLAIN BANK DEPOSITS. IN COMPLIANCE THERE TO THE APPELLANT HAS FILED DETAILS AND DOCUMENTS AS NOTED ABOVE. 4.1.3 NOW TO RECAPITULATE: A. AO HAS HIMSELF SATISFIED ABOUT THE EXISTENCE OF HUF AND THEIR BEING NO TAXABLE INCOME, THERE WAS NO OBLIGATION ON PART OF HUF TO FILE IT RETURN. HENCE NO ADVERSE VIEW CAN BE TAKEN FOR NOT FILING OF IT. RET URN BY HUF IN THE PAST. 20 B. THE SOURCE OF EARNING OF HUF BEING FROM AGRICULT URAL ACTIVITIES, RENTAL INCOME AND INTEREST INCOME ETC A RE VERIFIABLE FROM SUPPORTING DOCUMENTS. C. PART OF SUCH ACCUMULATED INCOME WAS INVESTED IN MAKING FDRS INTO BANK IN THE NAMES OF MEMBERS OF HUF. D. THUS NOT ONLY SOURCE BUT THE AVAILABILITIES OF F UNDS PROXIMATE TO EXPLAIN BANK DEPOSITS IN TWO BANK ACCOUNTS TOTALING RS.2380960/- IS SUFFICIENTLY ESTABLISHED BY THE APPELLANT. AS A RESULT, THE ADDITION OF RS. 23,80,9 60/- IS HEREBY DELETED. 9. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OBTAINING IN THIS CASE, WE FIND THAT SO FAR AS THE PRESENT ALLEGED UNEXPLAINED DEPOSITS BY THE ASSESSEE IN THE TWO UNDECLARED BANK ACCOUNTS IS CONCERNED, THE ASSESSEE HAS CLEARLY ESTABLISHED ON RECORD THAT HE HAS INVESTED PART OF THE ACCUMULATED INCOME IN THE FDRS IN THE NAMES OF DIFFERENT MEMBER S OF HUF, WHICH INCOME WAS DERIVED BY THE HUF FROM DIFFERENT ACTIVITIES SUCH AS AGRICULTURAL OPERATION S, RENTAL INCOME AND INTEREST INCOME AS SUCH, THE ASSESSEE H AS FULLY EXPLAINED THE SOURCE OF INCOME GENERATED TO H IM OUT OF WHICH HE MADE THE DEPOSITS IN THE BANK. WE A RE, 21 THEREFORE, CLEARLY OF THE OPINION THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY HE LD THE DEPOSITS BY THE ASSESSEE IN THE BANK TO BE GENU INE AND AS SUCH WE CONFIRM THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING TH E ADDITION IN QUESTION. IN THIS VIEW OF THE MATTER, THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN THIS APPE AL FALL TO THE GROUND AND DISMISSED AS SUCH. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7.3.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7.3.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/- 22
