ITO, New Delhi V. Shri Karan Mehra, New Delhi

ITA 2075/DEL/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6396 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: R S AHUJA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : D : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.2075/DEL/2011 ASSESSMENT YEAR : 2007-08 ITO, WARD 4 (2), ROOM NO.413A, CR BUILDING, IP ESTATE, NEW DELHI. VS. KARAN MEHRA, D-6/6006/1, VASANT KUNJ, NEW DELHI. PAN : ACEPM0866C ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI R.S. AHUJA, CA DEPARTMENT BY : S HRI S.N. BHATIA, SR. DR ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 17.02.2011 IN RELATION TO THE ASSESSM ENT YEAR 2007- 08. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST RESTRICTING THE ADDITION OF ` 1,14,74,500/- MADE ON ACCOUNT OF AO U/S 69A OF THE ITA NO.2075/DEL/2011 2 INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) TO ` 2,80,000/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE AO GOT SOME AIR INFORMATION DIVULGING THAT THE ASSESSEE DEPOSIT ED CASH IN HIS BANK ACCOUNT MAINTAINED WITH STANDARD CHARTERED BAN K AND ALSO MADE SOME INVESTMENTS IN MUTUAL FUNDS. ON BEING CA LLED UPON TO STATE THE SOURCE OF SUCH DEPOSITS IN THE BANKS, THE ASSESSEE STATED THAT ONE MS VANDANA CHANDRA, NRI, BASED IN U SA PAID CASH TO THE ASSESSEE AS IMPREST FOR MAKING INVESTME NTS ON HER BEHALF IN INDIA. DESPITE REPEATED ADJOURNMENTS, T HE ASSESSEE DID NOT FURNISH THE NECESSARY EVIDENCE AS CALLED FOR. THE AO OBSERVED THAT THE TOTAL CREDIT ENTRIES IN ASSESSEE S BANK ACCOUNT NO.531-1-0273146-6 WERE TO THE TUNE OF ` 86,01,500/- AND IN THE OTHER BANK ACCOUNT NO.531-1-020774-7 WERE ` 28,73,000/-. TOTAL OF THESE CREDIT ENTRIES AT ` 1,14,74,500/- WAS TREATED AS UNEXPLAINED MONEY U/S 69A OF THE ACT. DURING THE C OURSE OF THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED COPIES OF BANK STATEMENT OF BOTH THE ACCOUNTS MAINTAINED WITH STAN DARD CHARTERED BANK, GURGAON, BRANCH, HARYANA ; COPY OF PASSPORT OF MS VANDANA CHANDRA ; BANK STATEMENT OF NRI ACCOUNT OF MS ITA NO.2075/DEL/2011 3 VANDANA CHANDRA ; AFFIDAVIT DECLARING INVESTMENTS AND TRANSFERS OF MS VANDANA CHANDRA, ETC. THE LD. CIT(A) SENT TH IS ADDITIONAL EVIDENCE TO THE AO IN TERMS OF RULE 46A(3) OF THE I NCOME-TAX RULES, 1962 FOR FURTHER EXAMINATION OF THE MATTER A ND CROSS- EXAMINATION OF THE WITNESSES, IF NECESSARY. THE AO VIDE HIS REMAND REPORT DATED 10.08.10, OBJECTED TO THE ADMI SSION OF SUCH ADDITIONAL EVIDENCE. HE, HOWEVER, DID NOT CONSIDER IT EXPEDIENT TO DISCUSS THE MERITS OF THE ADDITION SO MADE BY HIM I N THE ORIGINAL ASSESSMENT PROCEEDINGS IN THE LIGHT OF THE ADDITION AL EVIDENCE FILED BY THE ASSESSEE. THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE. AFTER PERUSING THE WRITTEN SUBMISSIONS F ILED ON BEHALF OF THE ASSESSEE, WHICH HAVE BEEN REPRODUCED ON PAGE S 5-9 OF THE IMPUGNED ORDER AND THE FRESH MATERIAL FILED BEFORE HIM, HE NOTICED THAT THE SOURCE OF CASH DEPOSITS AND DEPOSI TS THROUGH CHEQUES IN THE BANK ACCOUNTS WAS FULLY EXPLAINED BY THE ASSESSEE INASMUCH AS SEVERAL DEPOSITS IN THE BANK ACCOUNTS R EPRESENTED THE EARLIER WITHDRAWALS APART FROM THE AMOUNT RECEI VED FROM MS VANDANA CHANDRA. IT WAS HELD THAT THERE WAS A PEAK OF THE CREDIT BALANCE IN THE BANK ACCOUNTS AMOUNTING TO ` 2,80,000/- WHICH WAS REQUIRED TO BE ADDED. HE, THEREFORE, RESTRICTE D THE ADDITION ITA NO.2075/DEL/2011 4 TO THIS LEVEL. THE REVENUE IS AGGRIEVED AGAINST TH IS DELETION OF ADDITION. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THO UGH THE ASSESSEE DID NOT EXTEND CO-OPERATION TO THE AO DURING THE AS SESSMENT PROCEEDINGS, BUT SUCH DEFICIENCY WAS MADE GOOD BY S UBMITTING THE RELEVANT EVIDENCE BEFORE THE LD. CIT(A) AS ADDI TIONAL EVIDENCE. THE LD. FIRST APPELLATE AUTHORITY, IN ALL FAIRNESS, REMITTED SUCH ADDITIONAL EVIDENCE TO THE AO FOR EXAMINATION AND R ECORDING OF STATEMENT OF WITNESSES, IF ANY. THE AO DID NOT ADV ERSELY COMMENT ON SUCH EVIDENCE BUT CHOSE TO OPPOSE THE AD MISSION OF THE ADDITIONAL EVIDENCE. IN OUR CONSIDERED OPINION , THE AO SHOULD HAVE NO OBJECTION IF THE ADDITIONAL EVIDENCE WAS EN TERTAINED BY THE LD. CIT(A), AS THE SAME WAS FIRST SENT TO HIM FOR VERIFICATION. IF HE WAS NOT SATISFIED WITH THE CORRECTNESS OF THE AS SESSEES CLAIM IN THE LIGHT OF SUCH FRESH EVIDENCE, HE COULD HAVE CONTROVERTED THE SAME. 5. ON MERITS, IT CAN BE NOTICED THAT THE AO CHOS E TO PICK UP DEPOSIT SIDE OF THE BANK ACCOUNTS, TOTALED THE SAME AND MADE ITA NO.2075/DEL/2011 5 ADDITION FOR THE EQUAL SUM WITHOUT GIVING BENEFIT O F THE AMOUNTS WITHDRAWN. IN OTHER WORDS, CERTAIN AMOUNTS WERE WI THDRAWN, THEN DEPOSITED, AGAIN WITHDRAWN AND RE-DEPOSITED. WHEN THE POSITION IS SUCH THAT THERE ARE CERTAIN DEBITS AND CREDITS IN THE BANK ACCOUNT, IT IS WHOLLY IMPERMISSIBLE TO CONSIDE R ONLY THE DEPOSITS IN THE BANK ACCOUNT FOR THE PURPOSES OF MA KING ADDITION BY TOTALING IGNORING THE FACT THAT THERE ARE WITHDR AWALS OF THE AMOUNT AS WELL. IN SUCH A SITUATION, IT IS A PEAK AMOUNT WHICH IS REQUIRED TO BE ADDED, WHICH EXACTLY HAS BEEN DONE B Y THE LD. CIT(A) IN THIS CASE. THE LD. DR COULD NOT POINT OU T ANY INFIRMITY IN THE CALCULATION OF THE PEAK AMOUNT, BY WHICH THE LD . CIT(A) RESTRICTED THE ADDITION TO ` 2.80 LAC. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER. 6. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 04.07.201 4. SD/- SD/- [ C.M. GARG ] [ R.S. SYAL ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 04 TH JULY, 2014. DK ITA NO.2075/DEL/2011 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.