Kulvinder Singh, Yamunanagar V. ITO, W-2, , Yamunanagar

ITA 199/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3809 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 19-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANKUR ALYA
• Section: 44AD; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! ' # $ %! , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.199/CHD/2018 / ASSESSMENT YEAR : 2011-12 SH.KULVINDER SINGH, S/O SH.JARNAIL SINGH, H.NO.38, LABOUR COLONY, YAMUNA NAGAR. THE INCOME TAX OFFICER, WARD-2, YAMUNA NAGAR. ./PAN NO: AVSPS8206R /ASSESSEE BY : SHRI ROHIT GOEL, CA / REVENUE BY : SHRI ANKUR ALYA, SR.DR ! /DATE OF HEARING : 14.11.2018 '#$% ! /DATE OF PRONOUNCEMENT: 30.01.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PANHKULA (IN SHORT CIT(A) DATED 26.12. 2017 PASSED U/S 250(6) OF THE INCOME TAX AT, 1961 (HEREI NAFTER REFERRED TO AS ACT). 2. AT THE OUTSET IT WAS POINTED OUT THAT THE SOLE I SSUE INVOLVED IN THE PRESENT APPEAL RELATES TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH FOUND DEPOSITED IN THE BANK OF THE ASSESSEE AMOUNTING TO RS.10,54,547/-. 3. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE ADDITION OF RS.1713947- MADE BY THE LD . A.O. AND PARTLY UPHELD TO THE EXTENT OF RS.1054547/- BY L D. ITA NO.199/CHD/2018 A.Y.2011-12 2 CIT (A) IS WRONG, UNTENABLE, GIVEN THE FACTS OF THE CASE. 2. THE HON'BLE CIT(A), PANCHKULA ERRED IN UPHOLDING THE AMOUNT OF RS.1054547/- OUT OF THE ADDITION MADE BY LD. AO WITHOUT GIVING ANY APPROPRIATE CONSIDERATION ON T HE FACTS IGNORING ALL MERITS OF THE CASE. 3. THAT THE HON'BLE CIT WRONGLY IGNORED THE WITHDRAW AL BY THE ASSESSE FROM HIS PARTNERSHIP FIRM AS SOURCE O F DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSE. 4. THE LD. AO HAS ERRED IN INITIATING PENALTY PROCEED INGS U/S 271 (1) (C) AS THERE IS NO CASE OF CONCEALMENT OF INCOME AND OR FURNISHING OF INACCURATE PARTICULARS. 5. THE LD. A.O. AND THE CIT(A) HAVE PASSED THE ORDE R IN HASTE, AGAINST THE FACTS, LAW AND PROVISIONS OF THE INCOME TAX ACT, 1961 AND RULES MADE THERE UNDER. 6. THE APPELLANT WISHES TO FILE DETAILED ARGUMENTS/ PRODUCE DOCUMENTS AT THE TIME OF HEARING OF APPEAL A ND CRAVES TO ADD/ MODIFY/ DELETE/ WITHDRAW THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 4. THE LD. COUNSEL FOR ASSESSEE STATED THAT OUT OF THE ABOVE ONLY GROUND NO.1 WAS BEING AGITATED BY IT WHI LE THE REST WERE NOT BEING PRESSED BY IT. IN VIEW OF THE S AME, GROUND NOS.2 TO 6 RAISED BY THE ASSESSEE ARE DISMIS SED AS NOT PRESSED. 5. TAKING UP GROUND NO. THE LD. COUNSEL FOR ASSESSE E POINTED OUT THAT THE FACTS RELATING TO THE ISSUE WE RE THAT THE A.O. DURING ASSESSMENT PROCEEDINGS HAD NOTED THAT A SSESSEE HAD DEPOSITED CASH OF RS.1,47,400/- AND RS.15,66,54 7/- IN HIS BANK ACCOUNT IN ICICI BANK LTD. AND KOTAK MAHIN DRA BANK RESPECTIVELY. IN THE ABSENCE OF ANY SATISFACTO RY EXPLANATION BEING GIVEN BY THE ASSESSEE WITH REGARD TO THE SOURCE OF THE SAME, THE A.O. MADE ADDITION OF THE S AME TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 6. BEFORE THE CIT(A) THE ASSESSEE FILED DETAILED EXPLANATION ALONGWITH CASH FLOW STATEMENT BUT GOING THROUGH WHICH THE CIT(A) ACCEPTED THE CASH DEPOSITS MADE ITA NO.199/CHD/2018 A.Y.2011-12 3 IN THE BANK ACCOUNT WHICH CORRESPONDED WITH THE CAS H WITHDRAWALS MADE PRIOR TO THE DATE OF DEPOSITS. HE ALSO ACCEPTED THAT THE ERRORS HAD BEEN MADE BY THE A.O. WHILE NETTING CASH DEPOSITS AND WITHDRAWALS AS POINTED OU T BY THE ASSESSEE AND CORRECTED THE SAME BUT AT THE SAME TIM E THE LD.CIT(A) HELD THAT EVEN AFTER CONSIDERING THE ABOV E PEAK NEGATIVE BALANCE CASH OF RS.10,54,547/- WAS FOUND A S ON 23.3.2011 AND THE CONTENTION OF THE ASSESSEE THAT T HE SAME COULD BE EXPLAINED FROM THE WITHDRAWALS MADE FROM T HE PARTNERSHIP FIRM AND OPENING CASH BALANCE WASNOT ACCEPTABLE. THE LD.CIT(A) HELD THAT THE A.O. HAD GI VEN DETAILED REASONING IN THIS REGARD WHILE REJECTING T HIS EXPLANATION OF THE ASSESSEE WHICH HE FOUND WAS CORR ECT. THEREFORE, THE LD.CIT(A) UPHELD THE ADDITION TO THE EXTENT OF RS.10,54,547/- DELETING THE BALANCE OF THE ADDITION MADE BY THE A.O. 7. BEFORE US, THE LD. COUNSEL FOR ASSESSEE REITERAT ED THE CONTENTION MADE BEFORE THE LOWER AUTHORITIES THAT T HE SAID DEPOSIT WAS RELATABLE TO THE WITHDRAWALS MADE BY TH E ASSESSEE FROM HIS PARTNERSHIP CONCERN M/S SHREE MAHALUXMI TRADERS, PUNE WHICH STOOD DULY REFLECTED IN THE IMPREST ACCOUNT MAINTAINED IN THE BOOKS OF THE PROPRIETORSHIP CONCERN. THE LD. COUNSEL FOR ASSESSE E POINTED OUT THAT THE IMPREST ACCOUNT REFLECTED AN ADVANCE O F RS.14,65,800/- TO THE ASSESSEE DURING THE YEAR, OUT OF WHICH CASH ADVANCE WAS OF RS.9,65,0000/- WHILE THE BALANCE WAS BY WAY OF CHEQUES. THE LD. COUNSEL FOR ASSESSEE ITA NO.199/CHD/2018 A.Y.2011-12 4 CONTENDED THAT THE REVENUE AUTHORITIES HAD ACCEPTED THE ADVANCE MADE TO THE ASSESSEE AS REFLECTED INTEREST HE IMPREST ACCOUNT BY WAY OF CHEQUE AND HAD REJECTED T HE CASH ADVANCE MADE TO THE ASSESSEE. THE LD. COUNSEL FOR A SSESSEE POINTED OUT THAT THE REASON FOR THE SAME WAS THAT T HE IMPUGNED PROPRIETORSHIP CONCERNS WERE NOT FOUND TO BE AUTHENTIC SINCE WHILE THE BOOKS SHOWED PROFITS OF RS.13009.22 CRORES. THE PROFITS RETURNED BY THE ASS ESSEE FOR INCOME TAX PURPOSES IN ITS RETURN OF INCOME WAS RS. 43009 CRORES. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THIS HAD BEEN EXPLAINED TO THE A.O. OF BEING ON ACCOUNT OF T HE FACT THAT THE PROFITS RETURNED WAS ON PRESUMPTIVE BASIS U/S 44AD OF THE ACT. THE LD. COUNSEL FOR ASSESSEE FURTH ER CONTENDED THAT HAVING EXPLAINED THE DIFFERENCE IN T HE TWO PROFITS AS SHOWN IN THE BOOKS AS RETURNED BY THE AS SESSEE AND THE A.O. HAVING ACCEPTED THE ADVANCES SHOWN TO HAVE BEEN MADE BY CHEQUES IN THE IMPREST ACCOUNT OF THE ASSESSEE, THERE WAS NO REASON AT ALL TO HAVE REJECT ED THE CASH ADVANCES SHOWN TO HAVE BEEN MADE TO THE ASSESS EE. 8. THE LD. DR ON THE OTHER HAND, HEAVILY RELIED UP ON THE FINDINGS OF THE LOWER AUTHORITIES. DRAWING OUR AT T O PARAS 3.1 TO 3.4 OF THE ASSESSMENT ORDER THE LD. DR STATE D THAT THE A.O. HAD GIVEN DETAILED REASONING FOR HAVING RE JECTED THE EXPLANATION OF THE ASSESSEE THAT THE DEPOSITS OF RS.10,54,547/- STOOD EXPLAINED BY WAY OF CASH WITHD RAWN FROM THE PROPRIETORSHIP CONCERN AND OPENING CASH IN HAND WITH THE ASSESSEE. THE LD. DR STATED THAT THE A.O. HAD ITA NO.199/CHD/2018 A.Y.2011-12 5 CATEGORICALLY POINTED OUT THAT THE BOOKS OF ACCOUNT WHICH INCLUDED LEDGER OF THE IMPREST ACCOUNT OF THE ASSES SEE REFLECTING THE ADVANCE IN CASH OF RS.9,65,000/-, TH E BOOKS OF ACCOUNT WERE HELD TO BE NOT GENUINE BY THE A.O. SIN CE THE PROFITS REFLECTED IN THE BOOKS DID NOT TALLY WITH T HAT RETURNED FOR TAXATION PURPOSE BY THE ASSESSEE. THE LD. DR FURTHER CONTENDED THAT EVEN IF THE CONTENTION OF TH E ASSESSEE THAT THE PROFITS HAD BEEN RETURNED ON PRESUMPTIVE B ASIS U/S 44AD OF THE ACT, WAS NOT ACCEPTABLE SINCE THE ASSES SEE HAD NOT MENTIONED THE NECESSARY FIGURES IN THE COLUMNS OF THE ITR WHICH WERE REQUIRED TO BE FILLED WHERE THE ASSE SSEE PAY TAXES ON PRESUMPTIVE BASIS. THE LD. DR FURTHER STA TED THAT THE IMPREST HAD BEEN SHOWN UNDER THE HEAD LOANS AN D ADVANCES WHEN IN FACT IT WAS THE DRAWING OF THE AS SESSEE AND THEREFORE, ALSO THE SAME HAD BEEN RIGHTLY REJE CTED BY THE A.O./CIT(A). THE LD. DR, THEREFORE, STATED THAT THE CIT(A) HAD RIGHTLY UPHELD THE ADDITION TO THE EXTEN T OF RS.10,54,457/- IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION FURNISHED BY THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE CONTENTION OF BOTH THE PARTIES WE ARE NOT INCLINED TO DISMISS THE CONTENTIONS OF THE ASSESSEE IN ENTIRETY. IN FA CT, WE FIND SOME MERIT IN THE CONTENTIONS OF THE LD. COUNSEL FO R ASSESSEE THAT THE DEPOSITS IN THE BANK ACCOUNT ARE RELATABLE TO WITHDRAWALS MADE FROM THE PROPRIETORSHIP CONCERN OF THE ASSESSEE. ITA NO.199/CHD/2018 A.Y.2011-12 6 10. UNDISPUTEDLY, AMOUNTS HAVE BEEN TRANSFERRED FRO M THE SAID PROPRIETORSHIP CONCERN TO THE ASSESSEE BY WAY OF CHEQUES ALSO WHICH HAS BEEN ACCEPTED BY THE REVENUE . IT IS ONLY THE AMOUNTS TRANSFERRED IN CASH, AND WHICH THE ASSESSEE IS ATTRIBUTING AS THE SOURCE OF CASH DEPOS ITED IN HIS BANK ACCOUNT, WHICH HAS NOT BEEN ACCEPTED BY TH E REVENUE. AND THE REASON FOR THE SAME IS THAT THE BO OKS OF ACCOUNTS OF THE PROPRIETORSHIP CONCERN REFLECTING T HIS TRANSFER ARE NOT RELIABLE SINCE THE PROFITS REFLECT ED THEREIN DO NOT MATCH WITH THAT RETURNED BY THE ASSESSEE FOR TAXATION. EVEN BEFORE US LD.COUNSEL FOR THE ASSESSE E HAS FAILED TO COME UP WITH A CONVINCING ARGUMENT FOR AC CEPTING THE RELIABILITY OF THE BOOKS OF ACCOUNTS OF THE PRO PRIETORSHIP CONCERN, EXCEPT FOR STATING THAT IT HAD RETURNED PR OFITS FOR TAXATION ON PRESUMPTIVE BASIS U/S 44AD OF THE ACT. BUT THIS CONTENTION ALSO COULD NOT BE DULY SUBSTANTIATED BY CORRELATING ANY DETAIL FURNISHED IN THE RETURN WITH THAT IN THE BOOKS OF ACCOUNTS OF THE CONCERN. BUT ,DESPITE THE SAID FACT OF THE BOOKS NOT BEING RELIABLE, THE CASH TRAN SACTIONS CANNOT BE OUTRIGHTLY REJECTED ON THIS BASIS ALONE, WHEN THE FACT THAT THE ASSESSEE HAS MADE ADVANCES BY WAY OF CHEQUES ALSO STANDS DEMONSTRATED AND DULY ACCEPTED BY THE REVENUE. THERE BEING NO DISPUTE REGARDING THE FACT THAT THE ASSESSEE WAS CARRYING OUT BUSINESS IN ITS AFORESTAT ED PROPRIETORSHIP CONCERN AND HAD MADE ADVANCES BY WAY OF CHEQUES TO HIS OWN SELF FROM THE SAID CONCERN, THE FACT OF HAVING BEEN ADVANCED SUMS IN CASH ALSO CANNOT BE COMPLETELY RULED OUT. ITA NO.199/CHD/2018 A.Y.2011-12 7 11. IN VIEW OF THESE ADMITTED FACTS, WE AGREE WITH THE LD. COUNSEL FOR ASSESSEE THAT THE A.O. WAS NOT JUSTIFIE D IN OUT RIGHTLY REJECTING THE ENTIRE CASH ADVANCES MADE BY THE ASSESSEE AS BEING INGENUINE. IN THE INTEREST OF JU STICE AND IN ALL FAIRNESS, WE THEREFORE CONSIDER IT JUST AND PROPER TO ACCEPT THE CASH WITHDRAWALS MADE FROM PROPRIETORSHI P CONCERN TO THE EXTENT OF RS.5 LACS AND DIRECT THE A .O. TO DELETE THE ADDITION MADE TO THIS EXTENT TO THE INCO ME OF THE ASSESSEE U/S 68 OF THE ACT. THE BALANCE ADDITION IS , THEREFORE, UPHELD. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ' # $ %! (SANJAY GARG ) ANNAPURNA GUPTA) /JUDICIAL MEMBER &' /ACCOUNTANT MEMBER )' /DATED: 30 TH JANUARY, 2019 * ! * #&' ()*) / COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT 2. ',+ / THE RESPONDENT 3. - / CIT 4. - ( )/ THE CIT(A) 5. )./' 0 , !0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35 / GUARD FILE #& / BY ORDER, / ASSISTANT REGISTRAR