Shri Madhvdas Karla, Indore V. The ITO Ward 2(2), Indore

ITA 197/IND/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4870 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S SHEETAL
• Keywords: Source of fund
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AFWPK2779K I.T.A.NO. 197 /IND/201 3 A.Y. : 2007-08 SHRI MADHAVDAS KARLA, 31, GULMOHAR COLONY, INDORE. VS. ITO,WARD 2 (2), INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.S.SHEETAL, ADV. RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 01 . 0 8 .201 3 DATE OF PRONOUNCEMENT : 30 . 0 9 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 27 TH FEBRUARY, 2013, FOR THE ASSESSMENT YEAR 2007-08 IN THE MATTER OF ORDER PASS ED U/S 143(3) OF THE INCOME-TAX ACT, 1961. -: 2: - 2 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) III, BARODA ERRED IN CONFIRMING THE ADDITION OF RS. 11,93,250/- OUT OF ADDITION OF RS. 13,97,500/- MADE TO THE RETURNED INCOME BY THE ASSESSING OFFICER AS CASH CREDIT U/S 68 OF THE INCOME-TAX ACT, 1961, ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN REGULAR AND DISCLOSED BANK ACCOUNT OF THE APPELLANT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A)-III, BARODA ERRED IN CONFIRMING THE ADDITION OF RS. 1,60,0-00/- MADE TO THE RETURNED INCOME BY THE ASSESSING OFFICER ON ACCOUNT OF ADVANCE RECEIVED. 3. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. DURING THE COURSE OF ASSESSMENT PROCEEDING S ON THE BASIS OF AIR INFORMATION VIDE ORDER SHEET ENTRY DA TED 29.9.2009, THE ASSESSEE WAS INFORMED THAT CASH OF R S. 13,95,500/- WAS DEPOSITED ON VARIOUS DATES IN THE S AVING -: 3: - 3 ACCOUNT WITH VIJAY BANK A/C NO. 5733. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF THESE DEPOSITS. 4. BEING NOT SATISFIED WITH THE SOURCE OF DEPOSIT, THE ASSESSING OFFICER MADE ADDITION OF RS. 13,97,500/- U/S 68. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE AD DITION OF RS. 11,93,250/- AND ALSO ADDITION OF RS. 1,60,000/- BEING LOAN RECEIVED FROM SHRI G. S. SHARMA. AGAINST THIS ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT IN RESPECT OF CASH DEPOSIT OF RS. 48,500/-, OUT OF CASH BALANCE LYING WITH THE ASSESSEE, THE LD. CI T(A) HAS ACCEPTED 50 % OF THE AMOUNT AND CONFIRMED THE BALAN CE ADDITION. NO JUSTIFICATION IS GIVEN BY THE LD.CIT(A ) FOR SUCH DISALLOWANCE WHEN THE CASH BALANCE WAS DULY REFLECT ED IN THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE AS ON 31 .3.2006. SINCE CASH WAS DEPOSITED OUT OF AVAILABLE CASH IN H AND AS AT THE BEGINNING OF THE YEAR, THERE IS NO JUSTIFICATIO N FOR DISALLOWING 50 % OF THE AMOUNT OF RS. 48,500/-. -: 4: - 4 6. OUT OF DEPOSIT OF RS. 3 LAKHS, THE LD. CIT(A) HAS DELETED RS. 1.7 LAKHS AND CONFIRMED BALANCE ADDITIO N OF RS. 1.3 LAKHS. AS THE ASSESSEE WAS UNABLE TO PLACE ON R ECORD ANY EVIDENCE WITH REGARD TO SOURCE OF RS. 1.3 LAKHS, WE CONFIRM THE ACTION OF THE CIT(A). 7. ADDITION OF RS. 1.26 LAKHS WAS CONFIRMED BY THE LD.CIT(A), AFTER GIVING RELIEF OF RS. 10,000/-. FOL LOWING WAS PRECISE OBSERVATIONS OF CIT(A) :- SO FAR AS ADDITIONS OF RS. 10,000/- + RS. 66,000/- + RS. 60,000/- ARE CONCERNED, AGAIN THE ASSESSING OFFICERS OBSERVATIONS THAT CASH WITHDRAWAL OF RS. 2 LAKH ON 17.8.2006 AND RS. 1 LAKH ON 17.8.2006 IS NOT ON ACCOUNT OF SELF WITHDRAWAL BUT ARE CASH WITHDRAWAL BY MEANS OF CHEQUE ISSUED IN OTHER PERSONS NAME HAVE NOT BEEN CONTROVERTED BY THE APPELLANT. HENCE, ADDITION OF RS. 1.26 LAKH IS UPHE LD AND RELIEF OF RS. 10,000/- IS GIVEN TO THE APPELLAN T. 8. IT APPEARS THAT DUE TO CONFUSION BETWEEN THE SEL F WITHDRAWALS OR CASH WITHDRAWALS BY MEANS OF CHEQUE, THE ADDITION HAS BEEN CONFIRMED BY THE LD.CIT(A). HOWEV ER, BOTH -: 5: - 5 THE LOWER AUTHORITIES WERE HAVING NO DOUBT IN THEIR MIND WITH REGARD TO SOURCE OF FUND, IN THE INTEREST OF JUSTIC E, THE MATTER IS RESTORED BACK TO THE FILE OF A.O. FOR DECIDING A FRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 9. WITH REGARD TO THE DEPOSIT OF RS. 1.21 LAKHS, RS. 5 LAKHS, RS. 5 LAKHS, RS. 2.80 LAKHS, RS. 12,000/-, E XPLANATION OF ASSESSEE WAS THAT THESE DEPOSITS HAVE BEEN MADE OUT OF AMOUNTS RECEIVED FROM CANCELLATION OF SALE AGREEMEN T WITH SHRI KAILASH SHARMA AND SHRI RAJESH KARNAWADIA. 10. AFTER CONSIDERING REMAND REPORT, THE LD. CIT(A) CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING O BSERVATIONS :- BUT SO FAR AS THE APPELLANTS CLAIM THAT THE CASH DEPOSIT HAS BEEN MADE OUT OF AMOUNT RECEIVED FROM THESE PERSONS ON CANCELLATION OF AGREEMENT IS CONCERNED, THE ASSESSING OFFICER IN HIS REMAND REPO RT HAS STATED THAT THESE TWO PERSONS COULD NOT BE TRAC ED DURING THE REMAND REPORT PROCEEDINGS AND ALSO THE APPELLANT COULD NOT PRODUCE THEM. THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAS -: 6: - 6 ALSO STATED THAT THE CANCELLATION OF SALE OF AGREEMENTS ARE UNDATED AND THE DATE OF PAYMENT IS NOT MENTIONED. I HAVE ALSO PERSONALLY PERUSED THESE DOCUMENTS FOR CANCELLATION OF SALE AGREEMENTS. THE DOCUMENTS ARE UNDATED AND ALSO NONE OF THE SIGNATORIES INCLUDING THE WITNESSES OF THESE DOCUMENTS HAVE ADDUCED ANY DATE BELOW THEIR SIGNATURES. THE AGREEMENTS MENTION THAT THE SALE AGREEMENT WAS EXECUTED ON 15.2.2006, BUT THE PLACE WHERE THE DATE OF CANCELLATION AGREEMENT WAS TO BE MENTIONED ARE LEFT BLANK. UNDER SUCH CIRCUMSTANCES, IT IS HELD THAT THE APPELLANT HAS FAILED TO ESTABLI SH THAT HE RECEIVED CASH ON ACCOUNT OF CANCELLATION OF AGREEMENT WHICH WERE DEPOSITED IN HIS BANK ACCOUNT. HENCE, ADDITIONS OF THESE AMOUNTS ARE UPHELD. 11. HOWEVER, BEFORE US, THE ASSESSEE COULD NOT PLACE O N RECORD ANY EVIDENCE TO SUBSTANTIATE THE IDENTITY OF THE PERSON, WHO HAS REFUNDED THE MONEY AND GENUINENESS OF THE TRANSACTION. FURTHER, THE FINDING RECORDED BY THE L D.CIT(A) AS -: 7: - 7 REPRODUCED HEREINABOVE COULD NOT BE CONTROVERTED. ACCORDINGLY, WE CONFIRM THE ACTION OF THE CIT(A). 12. WITH REGARD TO LOAN OF RS. 1.60 LAKHS FROM SHRI G. S. SHARMA, THE ASSESSING OFFICER DISALLOWED THE SAME O N THE PLEA THAT NO CONFIRMATION WAS FILED BY SHRI G. S. SHARMA , ORDER OF ASSESSING OFFICER WAS CONFIRMED BY THE LD.CIT(A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT A NOTICE U/S 133(6) WAS SENT TO SA ID SMT. RACHNA CHOUHAN WHO VIDE LETTER DATED 09.03.2012 HAS INFORMED THAT DD/PO HAD BEEN PURCHASED IN FAVOUR OF THE ASSESSEE AT THE INSTANCE OF SHRI G. S. SHARMA OUT O F A CHEQUE CREDIT PROVIDED BY HIM JUST BEFORE THE DATE OF PURC HASE OF THE DD/PO. 14. THUS, IT IS CLEAR THAT DD WAS PURCHASED BY SMT. RACHNA CHOUHAN AT THE INSTANCE OF SHRI G. S. SHARMA . THE SOURCE OF FUND WAS OUT OF CREDIT BALANCE IN THE BAN K ACCOUNT OF RACHNA CHOUHAN. SINCE RACHNA CHOUHAN HAS CONFIR MED THE PURCHASE OF DD IN FAVOUR OF THE ASSESSEE, MEREL Y NOT FILING OF A CONFIRMATION BY SHRI G. S. SHARMA CANNOT BE MA DE THE -: 8: - 8 BASIS FOR ADDITION. IN THE INTEREST OF JUSTICE, THI S ISSUE IS ALSO RESTORED BACK TO THE FILE OF A.O. FOR DECIDING AFRE SH AFTER MAKING DETAILED INQUIRY. WE DIRECT ACCORDINGLY. 15. IN THE RESULT, THE APPEAL IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH SEPTEMBER, 2013. CPU* 309