Mr. Satish Kumar Sharma (HUF), New Delhi V. ITO, New Delhi

ITA 2112/DEL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7051 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 28-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 18-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI BENCH SMC, NEW DELHI BEFORE SHRI BHAVNSH SAINI, JUDICIAL MEMBER ITA NO. 2112/DEL./2016 ASSESSMENT YEAR : 2005-06 SATISH KUMAR SHARMA (HUF) C/O. R.B.ARORA & CO., CAS, DSM- 127, DLF TOWERS, SHIVAJI MARG, MOTI NAGAR NEW DELHI PAN : AAMHS8485F VS ITO, WARD-51(1) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SALIL AGARWAL, SH. SAILASH GUPT A, ADV., SH. R.B. ARORA, C.A. REVENUE BY : SH. S.L.ANURAGI, SR. DR DATE OF HEARING : 11.07.2018 DATE OF PRONOUNCEM ENT : 13 .07.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAI NST THE ORDER OF LD. CIT(A)- 17, NEW DELHI DATED 16 TH FEB., 2016 FOR ASSESSMENT YEAR 2005-06, CHALLENGI NG THE ADDITION OF RS. 14 LAKHS ON ACCOUNT OF UNEXPLAINE D CASH DEPOSIT IN THE BANK ACCOUNT. EARLIER APPEAL OF ASSESSEE WAS DISMISSED W HICH IS RESTORED BY ALLOWING M.A. ITA NO.2112/DEL/2016 2 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY FACTS OF THE CASE ARE THAT IN THIS CASE AN ASSESSMENT WAS COMPLETED U/S 143(3) /147 ON 15 TH DECEMBER, 2008, WHEREIN AN ADDITION OF RS. 14,00, 000/- WAS MADE TO THE RETURNED INCOME OF THE ASSESSEE TREATIN G THE DEPOSIT OF CASH IN ALLAHABAD BANK, PAHARGANJ ON VARIOUS DATES, DURING THE YEAR A S UNEXPLAINED. THE ADDITION OF RS. 14,00,000/- WERE DELETED BY THE LD. CIT(A) VIDE ORDER DATED 10 TH DECEMBER, 2009. THE DEPARTMENT FILED APPEAL BEFORE ITAT AND T HE TRIBUNAL VIDE ORDER DATED 30 TH APRIL, 2010 IN ITA NO. 806/2010 SET ASIDE THE ORDE R OF THE CIT(A) AND RESTORED THE MATTER BACK TO THE FILE OF AO WITH THE DIRECTIO N TO EXAMINE THE CONTENTIONS OF THE ASSESSEE ABOUT THE AVAILABILITY OF THE CASH WITH RE FERENCE TO THE INCOME ADMITTED AND THE EXPENDITURE THAT WOULD HAVE BEEN MADE BY HIM FO R MEETING HIS FAMILY EXPENSES. AO WILL ALSO EXAMINE THE GENUINENESS OF THE CASH AV AILABLE WITH HIM AS SHOWN IN STATEMENT OF AFFAIRS. 4. THE AO ACCORDINGLY TOOK UP THE MATTER AGAIN. THE AO NOTED THAT ASSESSEE HUF APPLIED FOR ALLOTMENT OF PAN IN MARCH, 2004 AN D WAS ALLOTTED A PAN ONLY ON 26 TH MARCH, 2004. THE BANK ACCOUNT WAS OPEN ON 29 TH MARCH, 2004 BY DEPOSITING A CASH OF RS. 2,000/- IN ORDER TO DERIVE SOME BENEFIT , THE RETURN IN THE STATUS OF HUF WAS FILED FOR PRECEDING ASSESSMENT YEARS 2002-03 AN D 2003-04. THE RETURN FOR ASSESSMENT YEAR 2004-05 WAS FILED ON 2 ND JUNE, 2004 DECLARING INCOME OF RS. ITA NO.2112/DEL/2016 3 88,250/-. THE RETURN OF THESE YEARS WERE NOT PICKED UP FOR SCRUTINY. THE RETURN FOR ASSESSMENT YEAR UNDER APPEAL 2005-06 WAS FILED ON 1 ST AUGUST, 2005 DECLARING INCOME OF RS. 1,06,700/-. THIS WAS ALSO NOT PICKED UP FOR SCRUTINY. HOWEVER, THERE WAS AIR INFORMATION TO THE EFFECT THAT ASSESSEE HUF DEPOSITED SUM OF RS. 14,00,000/- IN HIS BANK ACCOUNT DURING THE FINANCIA L YEAR 2004-05, THEREFORE, IN ORDER TO INVESTIGATE THE SOURCE OF THIS DEPOSIT, PROCEEDI NGS U/S 148 WERE INITIATED. THE ASSESSEE REITERATED THAT A SUM OF RS. 11,49, 000/- WAS AVAILABLE AS CASH IN HAND AS ON 31 ST MARCH, 2004 AND CASH OF RS. 14,00,000/- WERE DEPOS ITED OUT OF THE SAID SUM. THE ASSESSEE ALSO FILED COPIES OF THE WEALTH TAX RE TURN FOR ASSESSMENT YEAR 2003-04 AND 2004-05. THE AO, HOWEVER, DID NOT ACCEPT CONTEN TION OF ASSESSEE AND NOTED THAT THE STORY PUT FORTH BY THE ASSESSEE APPEARS ONLY C OOK AND BUY STORY. NOTHING HAS PREVENTED THE ASSESSEE FROM DEPOSITING THE CASH IN THE BANK ACCOUNT INSTEAD OF MAKING DEPOSIT ON DIFFERENT DATE FROM 5 TH MAY, 2004 TO 23 RD MARCH, 2005 IN A SUM OF RS. 14,00,000/- WHEN THE BANK FACILITIES ARE AVA ILABLE. THE SOURCE OF INCOME IS NOT PROVED, THE ASSESSEE HAS NO WITHDRAWAL FOR HOU SEHOLD PURPOSE. THE EXPLANATION OF ASSESSEE WAS REJECTED AND ADDITION OF RS. 14,00, 000/- WAS MADE TO THE RETURNED INCOME. 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND REITERATED THE SAME SUBMISSIONS, HOWEVER, LD. CIT(A) NOTED THAT NA TURE AND SOURCE OF CASH OF RS. ITA NO.2112/DEL/2016 4 14,00,000/- REMAINED UNEXPLAINED. THEREFORE, APPEAL OF ASSESSEE HAS BEEN DISMISSED. 6. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE AUTHORITIES BELOW AND REFERRED TO PB 24 WHICH IS RE PLY FILED AT THE ORIGINAL ASSESSMENT PROCEEDINGS IN WHICH ASSESSEE SIMILARLY EXPLAINED THAT RETURNS UNDER INCOME TAX ACT AND WEALTH TAX WERE FILED FOR EARLIE R YEARS IN WHICH CASH IN HAND HAVE BEEN SHOWN. IN THE RETURNS FOR ASSESSMENT YEAR 2004-05, THE AVAILABILITY OF CASH IN HAND OF RS. 11,49,879/- HAVE BEEN SHOWN IN BALAN CE SHEET FILED WITH RETURN COPIES WHICH ARE FILED AT PAGES 17 TO 19 OF THE PAPER BOOK . P B 16 IS PROCESSING OF THE RETURN U/S 143(1) FOR ASSESSMENT YEAR 2004-05. HE H AS ALSO FILED COPY OF THE BANK STATEMENT TO SHOW THAT ON 5 TH MARCH, 2005, ASSESSEE HAS WITHDRAWN RS. 2,00,000/- FROM ITS ACCOUNT IT WAS NOT SPENT ANYWHERE. IT WAS AVAILABLE TO ASSESSEE TO MAKE RE- DEPOSIT OF RS. 1,00,000/- EACH ON 21 ST MARCH, 2005 AND 23 RD MARCH, 2005. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AO HAS NOT MADE ANY INQUIRY ON THE DOCUMENTARY EVIDENCES FILED BY ASSESSEE. THEREFOR E, ADDITION IS WHOLLY UNJUSTIFIED. 7. ON THE OTHER HAND LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE CONSIDERED RIVAL SUBMISSION AND MATERIAL ON RECORD. THE ASSESSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS SUBMITTED STATE MENT OF RECEIPT AND PAYMENT OF ASSESSEE FOR YEAR, UNDER THE TITLE RECEIPT AND PAY MENT ACCOUNT, ALONG WITH STATEMENT OF AFFAIRS AS ON 31 ST MARCH, 2004 SHOWING OPENING CASH IN HAND ALONG WIT H ITA NO.2112/DEL/2016 5 COPIES OF INCOME TAX AND WEALTH TAX RETURN TO SHOW THAT IN PROCEEDING ASSESSMENT YEAR 2004-05, ASSESSEE HAS CASH IN HAND AS ON 31 ST MARCH, 2004 IN A SUM OF RS. 11,49,879/-. THIS RETURN WAS ACCEPTED BY THE DEPART MENT WHILE PROCESSING THE RETURN U/S 143(1) OF THE ACT. THE ASSESSEE HAS BEEN TAKING THIS STAND CONSISTENTLY BEFORE THE AUTHORITIES BELOW. FURTHER THE LD. CIT(A) IN EARLIE R APPELLATE PROCEEDINGS ACCEPTED THE SIMILAR CLAIM OF ASSESSEE. HOWEVER, THE TRIBUNA L RESTORED THE MATTER BACK TO THE FILE OF AO WITH DIRECTION TO EXAMINE THE GENUINENES S OF THE CASH AVAILABLE WITH THE ASSESSEE AS SHOWN IN STATEMENT OF AFFAIRS AND ALSO TO SEE THE HOUSEHOLD EXPENSES. SINCE IN EARLIER YEAR REVENUE DEPARTMENT HAS ACCEPT ED AVAILABILITY OF THE CASH WITH THE ASSESSEE AS CASH IN HAND AS ON 31 ST MARCH, 2004, THEREFORE, THE SAME COULD NOT BE DISPUTED IN SUBSEQUENT ASSESSMENT YEAR UNDER APP EAL. WHATEVER EXPLANATION WAS GIVEN BY THE ASSESSEE EARLIER IN THE STATEMENT OF A FFAIRS AND THE RETURN F INCOME ONCE ACCEPTED, UNLESS SOME SUBSTANTIVE MATERIAL IS BROUG HT ON RECORD AGAINST ASSESSEE, THE REVENUE CANNOT CHANGE THE STAND SUBSEQUENTLY. THE AO DID NOT MAKE ANY INQUIRY ON THE SAME. THUS, ASSESSEE WAS HAVING CASH IN HAND OF RS. 11,49,879/- ON THE FIRST DAY OF THE FINANCIAL YEAR AS ON 01.04.200 4, THEREFORE, SUCH AMOUNT IS AVAILABLE TO ASSESSEE FOR MAKING DEPOSIT IN THE BA NK ACCOUNT. THE AO REJECTED THE EXPLANATION OF ASSESSEE BECAUSE NOTHING PREVENTED T HE ASSESSEE FROM MAKING DEPOSIT IN ONE GO IN THE BANK ACCOUNT OF THE ASSESSEE. HOWE VER, IT MAY NOT BE A PLAUSIBLE REASON TO REJECT THE EXPLANATION OF ASSESSEE BECAUS E THE ASSESSEE MADE CASH DEPOSITS ITA NO.2112/DEL/2016 6 IN SUBSEQUENT YEAR UNDER APPEAL OUT OF THE CASH AM OUNT AVAILABLE WITH IT, IN HIS BANK ACCOUNT, THEREFORE, NOTHING ADVERSE SHOULD BE TAKEN AGAINST THE ASSESSEE. FURTHER ASSESSEE IS A HUF AND ACCORDING TO EXPLANAT ION OF LD. COUNSEL FOR THE ASSESSEE, HOUSEHOLD EXPENSES WERE MADE BY MAKING WI THDRAWALS IN THE CASE OF INDIVIDUAL, THEREFORE, SUCH A REASON IS NOT VALID T O REJECT THE CONTENTION OF THE ASSESSEE. THEREFORE, THE CASH IN HAND OF THE EARLIE R YEAR IS AVAILABLE TO ASSESSEE FOR MAKING CASH DEPOSIT IN BANK ACCOUNT IN YEAR UNDER A PPEAL. SIMILARLY, THE ASSESSEE HAS WITHDRAWN RS. 2,00,000/- ON 5 TH MARCH, 2005 FROM HIS BANK ACCOUNT WHICH IS AVAILABLE TO ASSESSEE TO MAKE RE-DEPOSIT ON 21 ST MARCH, 2005 AND 23 RD MARCH, 2005 IN A SUM OF RS. 1,00,000/- EACH. AO HAS NOT BROUGHT AN Y EVIDENCE ON RECORD TO PROVE THAT THE AMOUNT WITHDRAWN BY THE ASSESSEE FROM THE BANK ACCOUNT WAS UTILIZED SOMEWHERE ELSE FOR OTHER PURPOSES. THEREFORE, EXPLA NATION OF ASSESSEE SHOULD NOT HAVE BEEN REJECTED FOR AVAILABILITY OF CASH OF RS. 2,00,000/- FOR MAKING RE-DEPOSIT IN THE BANK ACCOUNT. THUS, THE ASSESSEE WAS HAVING SUF FICIENT EVIDENCE TO EXPLAIN, IT WAS HAVING AVAILABILITY OF THE CASH OF RS. 13,49,87 9/- WHICH WOULD EXPLAIN THE DEPOSIT OF RS. 14,00,000/- IN THE BANK ACCOUNT OF T HE ASSESSEE ON DIFFERENT DATES. IN VIEW OF THE ABOVE DISCUSSION, I SET ASIDE THE ORDER S OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 13,49,879/- OUT OF RS. 14,00,00 0/-. APPEAL OF ASSESSEE IS PARTLY ALLOWED. ITA NO.2112/DEL/2016 7 9. IN THE RESULT APPEAL OF ASSESSEE IS PARTLY ALLOW ED. (ORDER PRONOUNCED IN THE OPEN COURT.) SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 13 /07/2018 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE OF DICTATION 11 .0 7 .2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12 .0 7 .2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER .07.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 13 .07.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 13 .07.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 13 .07.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 13 .07.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER ITA NO.2112/DEL/2016 8