Shri Govind Jaipura, Sehore V. The ITO wd 2(3), Bhopal

ITA 204/IND/2014

• Counselvise Citation: 20422714 RSA 2014
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MEENA
• Assessee Lawyers: N D PATWA S
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.204/IND/2014 A.Y. : 2008-09 SHRI GOVIND JAIPURIA, ITO, WARD 2(3), SEHORE VS. BHOPAL APPELLANT RESPONDENT PAN NO.ADEPJ4310P A PPELLANT S BY : SHRI ASHISH GOYAL AND SHRI N. D. PATWA, ADVOCATES RESPONDENT BY : SHRI R. R.MEENA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), BILASPUR, DATED 26.11.2013 FOR THE ASSE SSMENT YEAR 2008-09. 2. GROUND NOS. 2 & 3 ARE NOT PRESSED, HENCE DISMISSED, AS NOT PRESSED. DATE OF HEARING : 27. 10 .2015 . DATE OF PRONOUNCEMENT : 07 . 1 2 .2015 SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 2 2 3. GROUND NOS. 3, 4, 5 AND 6 READ AS UNDER :- 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), BILASPUR/ BHOPAL, IN MAINTAINING THE ADDITION OF RS. 9,50,000/- TO THE RETURNED INCOME. THE ADDITION MAY KINDLY BE DELETED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), BILASPUR/ BHOPAL IS NOT JUSTIFIED IS NOT JUSTIFIED THAT THE CASH DEPOSIT OF RS. 9,50,000/- IN THE BANK OF INDIA, SEHORE, WAS OUT OF UNACCOUNTED AND UNEXPLAINED INCOME TO THE RETURNED INCOME. THE ADDITION MAY KINDLY BE DELETED. 5. IN ANY CASE, THE SAID SUM OF RS. 9,50,000/- COUL D NOT BE TAKEN TO BE INCOME FROM UNDISCLOSED SOURCES. THE ADDITION MAY KINDLY BE DELETED. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A), BILASPUR/BHOPAL IN SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 3 3 NOT CANCELLING THE INITIATION OF PENALTY U/S 271(1) (C) AND CHARGING OF INTERESTS U/S 234A & 234B. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE I S A RETAIL TRADER OF FMCG AND FILES RETURN OF INCOME U/ S 44AF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF D EPOSIT OF RS. 50,000/- AND RS. 9,50,000/- IN HIS BANK ACCOUNT 28 .3.2008 AND 29.03.2008 RESPECTIVELY. THE AO GATHERED INFORM ATION OF ACQUISITION OF RENTED PROPERTY IN THE JOINT NAME WI TH SMT. MEENA AGRAWAL W/O SHRI MOHANLAL AGRAWAL BY INVESTIN G HIS SHARE OF RS. 9,00,000/- FROM THE ASSESSMENT YEARS 2 002-03 TO 2008-09. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VERIFICATION OF THE BANK ACCOUNTS, THE AO OBSERVED THAT THE ASSESSEE HAS BORROWED A SUM OF RS. 9 LACS FROM JAIP URIA TRADERS A CONCERN OF HIS BROTHER, WHICH WAS PAID TO HIS BROTHER AGAIN. THE EXAMINATION OF THE ACCOUNTS FURT HER REVEALED THAT THE ASSESSEE HAS DEPOSITED RS. 50,000 /- AND RS. 9 LACS IN THE BANK ACCOUNT. THE ASSESSEE CONTENDED THAT HE WAS HAVING OPENING BALANCE OF RS. 8,25,368/-. THERE FORE, THE SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 4 4 ASSESSEE NEED NOT TO BORROW RS. 9 LACS FOR INVESTME NT OF THE LAND, BUT THE AO WAS NOT SATISFIED WITH IT. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DISMISSED THE APPEAL. 5. THE ASSESSEE HAS FILED THE WRITTEN SUBMISSION, WHI CH READS AS UNDER :- THE ASSESSEE IS DERIVING INCOME FROM TRADING IN FMC G ITEMS. ASSESSEE HAS BEEN DECLARING INCOME U/S. 44AF ON PRESUMPTIVE BASIS. ASSESSEE TOOK LOAN OF RS. 9,00,000 FROM M/S. JAIPUR IA TRADERS (A CONCERN OF HIS BROTHER) FOR INVESTMENT I N PURCHASE OF LAND. THIS WAS DULY REFLECTED IN BANK ACCOUNT ON 15.11.2007. THEREAFTER, RS. 8,50,000 WAS REPAID BY APPELLANT ON 31.03.2008. LD AO DOUBTED T HE CASH DEPOSIT OF RS. 9,50,000 IN THE BANK ACCOUNT AS UNDER, WHICH WAS USED FOR MAKING PAYMENT TO M/S. JAIPURIA TRADERS: - SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 5 5 28.03.2008 RS. 50,000 29.03.2008 RS. 9,00,000 SOURCE OF DEPOSIT HAS BEEN EXPLAINED AS UNDER: - THE OPENING CASH BALANCE WAS RS. 8,25,368/-. THIS C AN BE VERIFIED FROM THE RETURN OF AY 2007-08, WHICH WA S FILED ON 07.12.2007, PRIOR TO ANY INQUIRY FROM INCO ME TAX DEPARTMENT, AND PRIOR TO REPAYMENT OF THE LOAN. THE BALANCE SHEET SHOWING CASH AND BANK BALANCE OF RS. 8,25,368.99. THE APPELLANT HAD ONLY ONE BANK ACCOU NT WHICH WAS A (.(. ACCOUNT WITH BANK OF INDIA. RS. 7,08,519. THIS ACCOUNT WAS REFLECTED IN THE BALANCE SHEET. THUS, THE 'CASH AND BANK BALANCE' REPRESENTE D ONLY A CASH BALANCE OF RS. 8,25,368.99. THIS WAS CORRECTED IN THE SUBSEQUENT YEAR AS CASH BALANCE. REPAYMENT FROM SUNDRY DEBTORS SUNDRY DEBTORS AS ON 31.03.2007 RS. 3,27,673.90 SUNDRY DEBTORS AS ON 31.03.2008 RS. 84,350.00 THUS, THE NET RECEIPT FROM DEBTORS RS. 2,43,323.90 SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 6 6 THIS REPAYMENT WAS NOT REFLECTED IN BANK STATEMENT. THUS, THIS AMOUNT, WHICH WAS RECEIVED WAS ALSO AVAILABLE WITH THE APPELLANT. LD AO DOUBTED THAT THIS AMOUNT WAS DEPOSITED IN THE BANK ON 29.03.2008, I.E. AT THE FAG END. HE THEREFORE CONTENDED THAT THIS AMOUNT WAS KEPT WITH THE APPELLANT FOR THE WHOLE YEAR IN CASH. SUCH PROPOSITION IS QUITE IMPROBABLE AS NO PRUDENT BUSINESSMAN WILL KEEP HIS CASH IN HAND IDLE FOR ALMOST WHOLE OF THE YEAR. THESE ARE GENERAL FINDINGS. THE DEPARTMENT HAS ITSELF ACCEPTED THE CASH BALANCE AS ON 31.03.2007. THE ID AO HAS NOT GIVEN ANY FINDING AS TO ANY OTHER PLACE THIS AMOUNT WOULD HAVE BEEN INVESTED. IF NO EVIDENCE IS BROUGHT ON RECORD BY THE ID AO, T O SHOW THAT THE AMOUNT WAS INVESTED ANYWHERE ELSE, THE AMOUNT REMAINED WITH THE APPELLANT. THE APPELLANT CANNOT PROVE NEGATIVE AND ESTABLISH THAT THE AMOUNT WAS NOT USED ANYWHERE ELSE. SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 7 7 IT IS PERTINENT TO NOTE THAT EVEN ON 31.03.2006, TH E BALANCE WAS RS. 7,19,284.83. THIS CASH BALANCE CONTINUED FOR YEARS, WHICH WAS ACCEPTED BY THE DEPARTMENT. THE BALANCE REMAINED WITH THE APPELLANT. NO ADDITION CAN THEREFORE BE MADE IN THE HANDS OF APPELLANT MERELY ON CONJECTURES AND SURMISES THAT THE AMOUNT WOULD HAVE BEEN INVESTED SOMEWHERE. IF THE ID AO WANTS TO ESTABLISH THAT THE CASH WAS NOT AVAILABLE, IT SHOULD HAVE BEEN DONE ON THE BASIS OF EVIDENCE ON RECORD. THE FINDINGS OF ID AO THAT IF THE ASSESSEE HAD SUFFICIENT CASH BALANCE, WHY HE WOULD HAVE TAKEN LOAN FROM M/S. JAIPURIA TRADERS, IS AGAIN SELF CONTRADICTORY. ON THE ONE HAND, THE LOAN HAS BEEN ACCEPTED, AND ON THE OTHER HAND, ID AO IS TRYING TO DOUBT THE LOAN BY HOLDING THAT LOAN WOULD NOT HAVE BEEN TAKEN. THE ASSESSEE IS ALWAYS FREE TO MANAGE HIS FINANCIAL AFFAIRS. HE SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 8 8 HAD REGULAR DEALINGS WITH M/S. JAIPURIA TRADERS. THE APPELLANT WAS GETTING INTEREST FREE AMOUNT FROM THIS CONCERN, WHICH BELONGED TO HIS BROTHER. THE APPELLANT THEREFORE, THOUGHT IT PROPER TO TAKE THIS LOAN; AND HAVE FREE CASH BALANCE, WHICH COULD HAVE BEEN USED FOR MAKING ANOTHER INVESTMENT. SUBSEQUENTLY, SINCE NO INVESTMENT WAS MADE, THE APPELLANT REPAID THE LOAN OF M/S. JAIPURIA TRADERS. FINDINGS OF ID CIT(A) IN RELATION TO MULTIPLE ACCOUNT WITH M/S. JAIPURIA TRADERS IS UNRELATED FINDINGS, AS THE DISPUTE RELATED TO CASH DEPOSITS IN BANK. 6. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW 7. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT AS THE RETURN SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 9 9 WAS FILED U/S 144A OF THE ACT. THE ASSESSEE CONTEND ED BEFORE ME THAT THE ASSESSEE WAS HAVING OPENING CASH BALANC E OF RS. 8,25,368/-. THIS CAN BE VERIFIED FORM THE RETURN FO R ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS FILED ONE BANK ACCOUNT AND THE CASH BALANCE OF RS. 8,25,368/- AND IN SUBSEQUENT YEARS, IT WAS OPENING CASH BALANCE. THE ASSESSEE HAS MADE REPAYMENT OF SUNDRY DEBTORS ON 31 ST MARCH, 2008. THUS, THE ASSESSEE HAS RECEIVED RS. 2,43,323/- WHIC H IS NOT REFLECTED IN THE BANK STATEMENT. THE ASSESSEE HAD O PENING CASH BALANCE AND IF HE HAD OPENING BALANCE, THEN IT IS THE CONTENTION OF THE ASSESSEE THAT THIS AMOUNT IS PAID FROM THIS CASH FLOW STATEMENT. I FIND THAT THE AO HAS NOT VER IFIED THIS FACT. THEREFORE, IN THE INTEREST OF JUSTICE AND FAI R PLAY, I RESTORE THIS ISSUE BACK TO THE FILE OF AO TO DECIDE AS PER THE STATEMENT GIVEN BY THE ASSESSEE AND THE AO IS DIRECTED TO DEC IDE ACCORDINGLY. SHRI GOVIND JAIPURIA,SEHORE VS. ITO, I.T.A.NO. 204 /IND/2014 A.Y. 2008-09 10 10 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 7TH DECEMBER, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 7 TH DECEMBER, 2015. CPU* 18.4