Rangaswamy Hanumegowda , Bangalore V. Income Tax Officer Ward-3(2)(3), Bangalore

ITA 207/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9303 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-08-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 04-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Assessee Lawyers: B S BALACHANDRAN
• Keywords: Income from undisclosed sources; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A.K GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.207/BANG/2019 ASSESSMENT YEAR : 2014-15 SHRI RANGASWAMY HANUMEGOWDA, NO.2, KANYAKUMARI NILAYA, MPM LAYOUT, MALLATHAHALLI, BENGALURU. PAN ABUPH 5641 R VS. THE INCOME-TAX OFFICER, WARD-3(2)(3), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI B.S BALACHANDRAN, ADVOCATE REVENUE BY : SHRI MANJEET SINGH, ADDL. CIT DATE OF HEARING : 05-08-2020 DATE OF PRONOUNCEMENT : 14-08-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED FOR DECEMBER 2018 PASSED BY LD. CIT (A)-3, BA NGALORE FOR ASSESSMENT YEAR 2014-15 ON FOLLOWING GROUNDS OF APPEAL: 1. THE ORDERS OF LOWER AUTHORITIES IS CONTRARY, LA W ON FACTS, EVIDENCE ON RECORD. 2. THE LEARNED LOWER AUTHORITIES ERRED IN MAKING AN ADDITION OF RS.54,86,500/OVERLOOKING THE WITHDRAWALS IN THE RUNNING BANK ACCOUNT. ON THE GROUND THAT IT IS IMPROBABLE THAT T HE APPELLANT COULD HAVE RETAINED SUCH WITHDRAWALS FOR RE-DEPOSIT AND O N THE SURMISE THAT IT COULD HAVE BEEN UTILIZED FOR PERSONAL PURPO SES. PAGE 2 OF 10 ITA NO.207/BANG/2019 3. THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED A ND APPRECIATED THAT THE WITHDRAWALS SHOULD BE CONSIDER ED AS AVAILABLE FOR RE-DEPOSITING UNLESS IT IS SHOWN BY EVIDENCE TH AT IT HAS BEEN USED FOR SOME OTHER PURPOSES AS HELD IN THE CASE OF VINATHA MADHUSUDAN REDDY VS ACIT, BENGALURU IN ITA NO.257/B ANG/2018. AND AS SUCH OUGHT TO HAVE DESISTED FROM MAKING THE IMPUGNED ADDITION. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETURN O F INCOME ON 23/01/2015 DECLARING TOTAL INCOME OF RS. 3, 52, 890/-. IT HAS BEEN STATED THAT, ASSESSEE HAS ITS SOURCE OF IN COME FROM CONTRACT BUSINESS. THE CASE WAS SELECTED FOR SCRUTI NY AND ACCORDINGLY NOTICE UNDER SECTION 143 (2) WERE ISSUE D TO ASSESSEE. LD.AO HAS RECORDED THAT IN AIR INFORMATI ON, CASH DEPOSITS OF RS.54,86,500/- WERE FOUND IN SAVINGS A CCOUNT OF ASSESSEE AT SYNDICATE BANK AND RS.14,25,000/- IN AN DHRA BANK. ACCORDINGLY, NOTICE UNDER SECTION 142 (1) WAS ISSUED TO ASSESSEE. LD.AO ALSO ISSUED NOTICE DATED 18/10/2 016 WHEREIN, ASSESSEE WAS CALLED UPON TO FURNISH, SOURC E OF CASH CREDITS OF RS.54,86,500/- AND RS.14,25,000/- FOUND IN SAVINGS ACCOUNT OF ASSESSEE IN SYNDICATE BANK AND A NDHRA BANK RESPECTIVELY. 3. DURING COURSE OF ASSESSMENT PROCEEDINGS, ASSESSE E FURNISHED STATEMENTS OF ANDHRA BANK, COPY OF RETURN FILED FOR ASSESSMENT YEAR 2014-15 IN HUF CAPACITY, ALONG WITH, COMPUTATION STATEMENT. IT WAS SUBMITTED BY ASSESSEE THAT HE HAD SUFFICIENT CASH BALANCE AND DUE TO SUBSTANTI AL WITHDRAWAL FROM SAVINGS ACCOUNT DURING THE YEAR, MO NEY PAGE 3 OF 10 ITA NO.207/BANG/2019 WAS LATER ON DEPOSITED BY ASSESSEE. ASSESSEE ALSO F URNISHED DAILY CASH BOOK FOR RELEVANT PERIOD BEFORE LD.AO. 4. ASSESSEE ALSO SUBMITTED THAT HE HAD HUGE DRAWING S DURING THE YEAR AND THAT MONEY OF HUF HAVE BEEN UTI LISED FOR CASH DEPOSIT IN THE BANK. 5. IN RESPECT OF SYNDICATE BANK ACCOUNT ASSESSEE SUBMITTED THAT CASH WAS WITHDRAWN FROM THE BANK AND SAME WAS REDEPOSITED ON SUBSEQUENT DATES. LD. AO RE JECTED IT ON THE PREMISE THAT THESE WERE ONLY ORAL SUBMISS IONS WITHOUT ANY EVIDENCE. 6. LD.AO DID NOT ACCEPT SUBMISSIONS OF ASSESSEE AN D MADE ADDITION IN TO THE EXTENT OF RS.54,86,500/-. 7. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A). BEFORE LD.CIT(A) ASSESSEE FILED C ASH FLOW STATEMENT FOR YEAR UNDER CONSIDERATION AND SUBMITTE D THAT, SUFFICIENT CASH WAS AVAILABLE IN HANDS FOR MAKING CASH DEPOSIT IN BANK ACCOUNTS. IT WAS SUBMITTED THAT CAS H WAS WITHDRAWN BY ASSESSEE ON DIFFERENT DATES AND THE SO URCE OF THE SAME WAS CASH WITHDRAWAL MADE BY HIM FROM BANK ACCOUNT. LD.CIT(A) OBSERVED THAT, CASH DEPOSITS DUR ING RELEVANT YEAR WAS RS.54,86,500/-, WHEREAS CASH WITHDRAWALS WERE RS.43,86,000/-. LD.CIT(A), REJECTE D CONTENTION OF ASSESSEE THAT, ONLY SUM OF RS.11,18,2 25/- SHOULD BE CONSIDERED AS UNACCOUNTED INCOME. LD.CIT (A) OBSERVED THAT, AMOUNT WAS BEING WITHDRAWN BY ASSESS EE FOR HIS PERSONAL PURPOSES FOR PERSONAL EXPENDITURE OR INVESTMENTS, WHICH ARE NOT DISCLOSED TO LD.AO AND T HAT, PAGE 4 OF 10 ITA NO.207/BANG/2019 AMOUNT WAS NEVER AVAILABLE WITH HIM FOR PURPOSE OF BEING DEPOSITED BACK IN BANK ACCOUNT. 8. HE THUS OBSERVED AS UNDER: 5.7 ALTHOUGH THE APPELLANT HAS RELIED UPON VARIOUS DECISIONS TO SUPPORT HIS CONTENTIONS, HOWEVER THE SAME ARE FOUND TO BE RENDERED ON DIFFERENT FACTS. SINCE IN THE CASE UNDER CONSIDE RATION FACTS ARE DIFFERENT, THESE DECISIONS CANNOT BE APPLIED. THE A PPELLANT HAS RELIED UPON THE DECISION OF ALLAHABAD HIGH COURT IN THE CA SE OF BI7AIYAIAI SHYAM BEHARI V. COMMISSIONER OF INCOME-TAXI2005J 27 6 ITR 38 (ALL.), HOWEVER IT IS NOTED THAT IN THE SAID CASE THE APPEA L OF THE ASSESSEE AGAINST THE ORDER OF ]TAT WAS DISMISSED BY THE 1-IC AND THE ISSUE WAS THUS DECIDED IN FAVOUR OF REVENUE. THE HC HELD THAT FOR ADJUDICATING UPON THE PLEA OF PEAK CREDIT, THE FACT UAL FOUNDATION HAS TO BE LAID BY THE ASSESSEE. IN THE CASE UNDER CONSI DERATION THE APPELLANT HAS FAILED TO EXPLAIN AS TO HOW EACH AND EVERY CASH WITHDRAWAL MADE IT FROM THE BANK ACCOUNT WAS NEVER UTILIZED BY IT AND HOW THE SAME WAS AVAILABLE TO HIM FOR BEING DEP OSITED BACK. SO THE ABOVE DECISION GOES AGAINST THE APPELLANT. THE ONUS WAS ON THE APPELLANT TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNT, HOWEVER HE HAS FAILED TO DISCHARGE SUCH ONUS. 9. AGGRIEVED BY ORDER OF LD.CIT(A), ASSESSEE PREFE RRED APPEAL BEFORE THIS TRIBUNAL . 10. ONLY GROUND RAISED BY ASSESSEE IS IN RESPECT OF ADDITION CONFIRMED BY LD.CIT(A) AMOUNTING TO RS.54,86,500/- OVERLOOKING THE WITHDRAWALS IN RUNNING BANK ACCOUNT . 11. LD. A.R. SUBMITTED THAT, CASH WITHDRAWALS OF RS.43,85, 000/-WERE MADE ON DIFFERENT DATES FROM BA NK ACCOUNT DURING THE YEAR UNDER CONSIDERATION, AND TH E SAME WERE DEPOSITED BACK IN BANK ACCOUNT. HE REFERRED TO ASSESSEES SUBMISSION ON DETAILS OF CASH WITHDRAWN AND DEPOSITED BACK INTO THE BANK ACCOUNT WHICH ARE AS U NDER: 1. THE CASH WITHDRAWN UPTO 30TH JULY 2013 IS RS.1, 53,000/AND THE CASH DEPOSITED IS RS.7,31,500/-, LEAVING A DEFI CIT OF RS.5,78,000/- FOR WHICH THE ASSESSEE COULD NOT OFFE R ANY SATISFACTORY EXPLANATION FOR THE SOURCES. PAGE 5 OF 10 ITA NO.207/BANG/2019 II SIMILARLY, HUGE WITHDRAWALS ARE MADE DURING THE MONTHS OF SEPTEMBER AND OCTOBER OF RS.11,60,000/- AND RS.11,68,000/RESPECTIVELY, THERE WERE NO DEPOSITS D URING THE MONTH, WHICH MEANS THAT THESE AMOUNTS ARE UTILIZED FOR THE PURPOSES FOR WHICH THESE WERE WITHDRAWN. A PERSON D OES NOT WITHDRAW SUCH HUGE CASH WITHOUT ANY PURPOSE. III. DURING THE MONTH OF NOVEMBER CASH WITHDRAWAL M ADE IS RS,5,00,000/- AND DEPOSITS MADE IS RS. 7,50,000/-, FOR THIS EXCESS DEPOSIT NO EXPLANATION OFFERED FOR THE SOURCES. IV. DURING THE MONTH OF DECEMBER CASH WITHDRAWAL MA DE IS RS.5,20,000/- DEPOSITS MADE IS RS.5,00,000/-, THE P URPOSE FOR WHICH DRAWN AND REDEPOSITED BACK NOT EXPLAINED. V. JANUARY WITHDRAWAL MADE IS RS.5,000/- DEPOSITS M ADE IS RS.9,00,000/-, THUS THERE IS NO SOURCE FOR CASH DEP OSIT OF RS.8,95,000/-, FOR WHICH THE ASSESSEE DID NOT OFFER ANY EXPLANATION. VI. DURING THE MONTH OF FEBRUARY WITHDRAWAL MADE IS RS.25,000/- DEPOSITS MADE IS RS.7,50,000/-, DEFICIT IS RS.7,25, 000/-, NO EXPLANATION OFFERED FOR SOURCE OF RS.7,00,000/-. VII. DURING THE MONTH OF MARCH WITHDRAWAL MADE IS R S.8,20,000/- DEPOSIT MADE IS RS.17,00,000/-, DEFICIT OF RS.880,0 00/-, NO EXPLANATION OFFERED FOR THE SOURCE FOR THE EXCESS C ASH DEPOSITS. 12. HE PLACED RELIANCE UPON ORDER DATED 24/08/2018 PASSED BY COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF VINITHA MADHUSUDAN REDD VS.ACIT IN ITA NO. 275/B/2018 FOR ASSESSMENT YEAR 2014-15. LD.AR SUBMITTED THAT, IDENTICAL ISSUE AROSE BEFORE THIS TRIBUNAL WHEREIN, IT HAS BEEN HELD THAT, WHEN SUFFICIENT CASH WAS AVAILABLE IN THE BANK WITH ASSESSEE, SUBSEQUENT WITHDRAWAL AND DEPOS IT CANNOT BE DISBELIEVED BY REVENUE AUTHORITIES. HE AL SO SUBMITTED THAT THIS (TRIBUNAL) WHILE TAKING THIS VIEW RELIED UPON DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF S.R VENKATRAMAN VS CIT & ORS. REPORTED IN 127 ITR 807 . 12. ON THE CONTRARY LD.SR.DR SUBMITTED THAT ASSESSE E SUBMITTED BEFORE AUTHORITIES BELOW THAT SOURCE OF S UM OF PAGE 6 OF 10 ITA NO.207/BANG/2019 RS.11,18,228/- CAN COULD NOT BE EXPLAINED AND AT TH E BEST THE SAME CAN BE ADDED. HE PLACED RELIANCE UPON ORDE RS PASSED BY LD.CIT(A). 13. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. 14. DETAILS OF CASH DEPOSIT AND CASH WITHDRAWN BY ASSESSEE FROM ITS BANK ACCOUNT HAS BEEN PROVIDED AS UNDER: ------ SPACE LEFT INTENTIONALLY ---- PAGE 7 OF 10 ITA NO.207/BANG/2019 PAGE 8 OF 10 ITA NO.207/BANG/2019 15. IT IS SEEN FROM THE ABOVE THAT CASH DEPOSITS IN BANK ACCOUNT ARE PRECEDED BY WITHDRAWALS FROM VERY SAME ACCOUNT. THE ABOVE TABLE IS REPRODUCED IN IMPUGNED ORDER SHOWS THAT, CASH WITHDRAWN ON VARIOUS DATES WERE SUBSEQUENTLY DEPOSITED AND THIS HAS NOT BEEN DISBEL IEVED BY REVENUE. THE ONLY ISSUE ALLEGED BY REVENUE IS, AVAI LABILITY OF CASH FOR DEPOSIT, AS ON THE RESPECTIVE DATES. FURTH ER IT IS NOT DISPUTED BY REVENUE THAT CASH WITHDRAWN IS SUBSEQUE NTLY DEPOSITED BACK INTO THE SAME ACCOUNT. 16. WE HAVE PERUSED DECISIONS RELIED BY LD.AR PASSE D BY HONBLE KARNATAKA HIGH COURT IN CASE OF S.R VENKATR AMAN VS CIT & ORS(SUPRA), WHEREIN, HONBLE COURT HELD THAT, IT WAS NOT OPEN TO REVENUE TO EXAMINE AS TO WHAT ASSESSEE DID WITH THE MONEY AND CANNOT CHOOSE TO DISBELIEVE THE PLEA OF ASSESSEE MERELY ON SURMISES THAT, IT WOULD NOT BE P ROBABLE FOR ASSESSEE TO KEEP THE MONEY UNUTILISED. THIS VIE W HAS BEEN FOLLOWED BY COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF VINITHA MADHUSUDAN REDD VS.ACIT (SUPRA) ON IDENTICAL FACTS. RESPECTFULLY FOLLOWING THE SAME WE ARE OF OPINION THAT, SUM OF RS.43,86,000/- CANNOT BE CONSIDERED AS UNEXPLAIN ED. 16. IN THE PRESENT FACTS OF THE CASE SUM OF RS.11,1 8,255/- BEING DIFFERENCE BETWEEN CASH WITHDRAWAL AND CASH DEPOSITED STANDS UNEXPLAINED BY ASSESSEE BEFORE US. WE THEREFORE, RESTRICT DISALLOWANCE ONLY TO THE EXTENT OF RS.11,18,255/-. PAGE 9 OF 10 ITA NO.207/BANG/2019 ACCORDINGLY THIS GROUND RAISED BY ASSESSEE STANDS P ARTLY ALLOWED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUG, 2020. SD/- SD/- (A.K GARODIA) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 14 TH AUG, 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL. BANGALORE. PAGE 10 OF 10 ITA NO.207/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -08-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -08-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -08-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -08-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -08-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -08-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -08-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS