Sh. Vishal Kumar, Gurgaon V. ITO, Gurgaon

ITA 2206/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4386 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 25-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SH. R.K PANDA, ACCOUNTANT MEMBER ITA NO.2206/DEL/2016 ASSESSMENT YEAR: 2011-12 SH. VISHAL KUMAR MS-1/101, KENDRIYA VIHAR, SECTOR-56 GURGAON PAN ANYPK6137B VS ITO WARD 1 (3) GURGAON (APPELLANT) (RESPONDENT) APPELLANT BY DR. RAKESH GUPTA, ADVOCATE RESPONDENT BY SH. RINKU SINGH, SR DR DATE OF HEARING: 03 /0 1 /201 9 DATE OF PRONOUNCEMENT: 11/02/2019 ORDER PER R.K. PANDA, AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 17.02.2016 OF THE CIT(A)-2, GURGAON REL ATING TO A. Y. 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 13.09. 2011 DECLARING TOTAL INCOME OF RS.2,02,220/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT ASS ESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS. HOWEVER, FROM T HE BANK STATEMENT FURNISHED BY THE ASSESSEE THE ASSESSING O FFICER OBSERVED THAT THERE ARE CASH DEPOSITS ON VARIOUS DA TES AMOUNTING ITA NO.2206/DEL/2016 2 TO RS.32,92,540/-. HE, THEREFORE, ASKED THE ASSESS EE TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSITED IN THE BANK ACCOU NT. THE ASSESSEE FURNISHED CONFIRMATION OF UNSECURED LOAN F ROM FOUR PERSONS NAMELY (A) SMT. KIRAN KUMAR D/O SH. SAMAY S INGH AND W/O ASSESSEE FOR OUTSTANDING AMOUNT OF RS.13,17,550 /-IN CHEQUE (B) SMT. PRIYA PARTHSARTHY D/O MR. RAVINDRA KUMAR SWAIN, MOSCOW (RUSSIA), IN CASH AT RS.10,00,000/- ( C) SH. SANTOSH KUMAR S/O SH. VP CHAUDHARY, MOSCOW RUSSIA I N CASH RS.10,00,000/- (D) SH. ASHOK JAISWAL S/O LATE SH. J . P. JAISWAL MOSCOW, RUSSIA IN CASH AT RS.1000000/-. 3. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPL AIN THE CREDITWORTHINESS AND IDENTITY OF THE ABOVE LENDERS AND ALSO PROVE THE GENUINESS OF THE TRANSACTIONS. HOWEVER, IN ABS ENCE OF ANY PROPER REPLY TO HIS SATISFACTION REGARDING THE CRED ITWORTHINESS AND GENUINESS OF THE TRANSACTIONS THE ASSESSING OFFICER MADE ADDITION OF RS.30,03,521/- TO THE TOTAL INCOME OF THE ASSESS EE. WHILE DOING SO HE ALLOWED CREDIT OF THE GROSS RECEIPT OF RS.2,89,019/- SHOWN IN THE ITR AS EXPLAINED 4. BEFORE THE CIT(A), THE ASSESSEE MADE ELABORATE A RGUMENTS. HOWEVER, THE LD. CIT(A) WAS ALSO NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. AFTER CONSIDERING THE R EMAND REPORT OF THE ASSESSING OFFICER AND REJOINDER OF THE ASSES SEE TO SUCH REMAND REPORT, HE SUSTAINED THE ADDITION BY OBSERVI NG AS UNDER:- I. CASH DEPOSITS IN THE BANK ACCOUNT AS REFERRED ABOVE, THERE WAS A TOTAL CASH DEPOSIT OF RS.32,92,540/- IN THE BANK ACCOUNT OF THE APPELLANT . AFTER ITA NO.2206/DEL/2016 3 CONSIDERING THE APPELLANTS SUBMISSIONS ON THIS ISS UE, THE ASSESSING OFFICER HAD HELD THAT CASH DEPOSITS AMOUNTING TO RS .30.03.521/- WERE UNEXPLAINED. FROM THE FACTS RECORDED IN THE A SSESSMENT ORDER, THESE AMOUNTS CAN BE LINKED TO THE APPELLANTS CLAI M OF AMOUNTS RECEIVED FROM THE FOLLOWING PERSONS :- I. DR. PRIYA PARTHASARTHI II. SH. SANTOSH KUMAR III. SH. ASHOK JAISWAL IV. SMT. KIRAN KUMAR W/O OF THE APPELLANT. AS REGARDS THE CLAIM OF AMOUNTS RECEIVED FROM SH. A SHOK JAISWAL, SH. SANTOSH KUMAR AND DR. PRIYA PARTHASARTHI IT IS EVID ENT FROM THE FACTS REPORTED BY THE AO VIDE HIS REPORT DATED 08.09.2015 THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT HAD CLAIMED THAT THESE WERE UNSECURED LOANS RECEIVED FROM EACH OF TH E AFORESAID 3 PERSONS IN CASH FOR PERSONAL USE. THE APPELLANT HAD FURNISHED CONFIRMATIONS FROM ALL THE AFORESAID 3 PERSON DULY SIGNED BY EACH OF THEM CONFIRMING THAT THE AMOUNTS WERE GIVEN IN THE FORM OF UNSECURED LOANS FOR PERSONAL USE AND THE APPELLANT HAD HIMSEL F WRITTEN ON THESE CONFIRMATIONS LETTERS THAT THE ABOVE LOAN HAD BEEN RECEIVED BY HIM IN CASH. AS REPORTED BY THE AO VIDE HIS REMAND REPORT DISCUS SED ABOVE, THE APPELLANT WAS ASKED BY THE AO TO PRODUCE 3 PERSONS FOR VERIFICATION OF GENUINENESS OF THE CLAIM. OUT OF THE 3 PERSONS, SH. SANTOSH KUMAR WAS NOT PRODUCED IN SPITE OF REPEATED OPPORTUNITIES . REGARDING THE OTHER 2 PERSONS IT IS EVIDENT FROM THE STATEMENTS R ECORDED THAT DR. PRIYA PARTHASARTHI HAS CATEGORICALLY STATED THAT HE DID NOT KNOW THE APPELLANT AND DID NOT MAKE ANY INVESTMENT WITH SH. VISHAL KUMAR. IN THESE CIRCUMSTANCES THE ORIGINAL CONFIRMATION FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT DR . PRIYA PARTHASARTHI HAD GIVEN UNSECURED LOANS OF RS. 10,00 ,000/- TO SH. VISHAL KUMAR FOR PERSONAL USE DOES NOT CONVEY THE C ORRECT FACTS. FURTHER, WHILE IN THE ORIGINAL CONFIRMATION THE AMO UNT WAS STATED TO HAVE BEEN GIVEN FOR PERSONAL USE OF SH. VISHAL KUMA R AS UNSECURED LOAN, DURING THE COURSE OF STATEMENT RECORDED BY TH E AO, IT IS CLAIMED THAT THE AMOUNT WAS ADVANCE FOR INVESTMENT IN PROPE RTY. THIS SUBMISSION DURING THE REMAND PROCEEDINGS IS DEARLY AN AFTERTHOUGHT. IT MAY BE MENTIONED HERE THAT IF THE CONFIRMATIONS FIL ED BY THE THESE 3 PERSONS WERE HELD TO BE GENUINE CONFIRMATIONS SHOWI NG GENUINE TRANSACTIONS THEN THE APPELLANT WOULD HAVE BEEN LIA BLE TO PENALTY U/S ITA NO.2206/DEL/2016 4 27ID FOR NOT COMPLYING WITH THE PROVISIONS OF SECTI ON 269SS. AS THE APPELLANT HAD CLAIMED TO HAVE BEEN RECEIVED LOANS A MOUNTING TO RS. 30,00,000/- IN CASH FROM 3 PERSONS HE WOULD HAVE BE EN LIABLE TO PAY THE PENALTY OF RS. 30,00,000/-, IN CASE THE LOANS W ERE HELD TO BE GENUINE. APPARENTLY TO AVOID SUCH A SITUATION THE A PPELLANT, AT THE STAGE OF REMAND PROCEEDINGS, CHANGED THE CLAIM AND CONTENDED THAT THE AMOUNTS WERE RECEIVED AS ADVANCE TOWARDS PURCHA SE OF PROPERTY. IN ANY CASE DR. PRIYA PARTHASARTHI HAS NOT PRODUCED ANY EVIDENCE WITH REGARD TO THE CLAIM THAT THE AMOUNT WAS GIVEN FOR P URCHASE OF PROPERTY TO THE APPELLANT. THERE WAS NO AGREEMENT TO PURCHAS E. IN FACT NO PROPERTY WAS FINALLY PURCHASED IN THIS CASE BY THE PERSON ADVANCING THE AMOUNTS. IT IS ALSO EVIDENT FROM THE FACTS RECO RDED IN THE REPORT OF THE AO THAT DR. PARTHASARTHI HAD NOT MADE ANY EFFOR T TO CLAIM BACK THE MONEY WHICH WAS SUPPOSEDLY GIVEN AS ADVANCE TO THE APPELLANT ALMOST 5 YEARS EARLIER. NO PERSON WOULD GIVE AN AMO UNT OF RS. 10 LACS AS LOAN/ADVANCE AND THEN JUST FORGET ABOUT IT. THE AO HAS ALSO CLEARLY POINTED OUT THAT IT WAS ALMOST IMPOSSIBLE FOR ANY P ERSON TO BRING 20,000/- DOLLARS IN CASH AT ONE GO FROM ABROAD AS L EGALLY A PERSON CAN CARRY NOT MORE THAN 5,000 DOLLARS PER TRIP. THE APP ELLANT HAS NOT BEEN ABLE TO CONTROVERT THESE FACTS RECORDED BY THE AO. EVEN IN THE CASE OF SH. SANTOSH KUMAR, THE FACTS OF THE TRANSACTIONS, T HE CONFIRMATIONS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS A ND THE SUBSEQUENT CLAIM MADE BEFORE THE AO DURING THE REMAND PROCEEDI NGS ARE ALMOST SIMILAR EXCEPT THAT SH. ASHOK KUMAR JAISWAL CLAIMS TO KNOW THE APPELLANT. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANC ES OF THE CASE IT IS EVIDENT THAT THE SUBMISSIONS AND THE CLAIMS FILED B Y THE APPELLANT REGARDING THE AMOUNTS RECEIVED FROM THE AFORESAID 3 PERSONS IS A MERE SELF SERVING STATEMENT WITHOUT ANY SUPPORTING EVIDE NCE. THE APPELLANT HAD DEPOSITED CASH IN HIS BANK ACCOUNT AND THE ONUS WAS ON THE APPELLANT TO EXPLAIN THE SOURCES OF CASH DEPOSITS I N THE BANK ACCOUNT. THE APPELLANT HAS FAILED TO DISCHARGE THE ONUS. THE ADDITIONS MADE TO THE EXTENT OF RS. 30,00,000/- BEING CASH DEPOSITS I N THE BANK ACCOUNT IS ACCORDINGLY CONFIRMED. IT MAY BE ONCE AGAIN MENT IONED HERE THAT IN CASE THESE LOANS WERE HELD TO BE GENUINE THE APPELL ANT WOULD HAVE BEEN LIABLE TO PENALTY PROCEEDINGS U/S 27ID, KEEPIN G IN VIEW THE ORIGINAL CONFIRMATIONS FILED BY THE APPELLANT AT TH E TIME OF ASSESSMENT PROCEEDINGS. AS REGARDS THE ADDITION OF REMAINING AMOUNT OF RS. 3,521/- BEING THE BALANCE CASH DEPOSIT IN THE BANK ACCOUNT THE APPELL ANT HAS NOT ITA NO.2206/DEL/2016 5 SUBMITTED ANY EXPLANATION OR WRITTEN SUBMISSIONS ON THIS ISSUE. THE BALANCE ADDITION IS ALSO ACCORDINGLY CONFIRMED. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GRO UNDS OF APPEAL :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING AN AGGREGATE ADDITION OF RS.30,03,521/- ON A CCOUNT OF CASH DEPOSIT IN BANK ACCOUNT BY TREATING IT AS ALLEGED UNEXPLAIN ED INCOME OF ASSESSEE AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDI NG AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, AC TION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MAKING AN AGGREG ATE ADDITION OF RS.30,03,521/- ON ACCOUNT OF CASH DEPOSIT IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSI NG THE ACTION OF LD. AO IN REJECTING THE BOOKS OF ACCOUNTS OF ASSESSEE AND THAT TOO WITHOUT ANY BASIS. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSI NG THE ACTION OF LD. AO IN CHARGING INTEREST U/S 234A AND 234B OF INCOME TA X ACT, 1961. 5. THAT THE APPELLANT CRAVES TO LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. ITA NO.2206/DEL/2016 6 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE ASSESSING OFFICER HAS INITIATED PENALTY PR OCEEDINGS U/S 271D OF THE IT ACT AND HAS LEVIED PENALTY OF RS.30 LACS FOR ACCEPTING LOAN IN CASH IN VIOLATION OF PROVISIONS O F SECTION 269SS OF THE IT ACT. ONCE THE ASSESSING OFFICER HAS ACCEP TED THE LOANS, THEREFORE, THERE IS NO QUESTION OF MAKING ANY ADDIT ION U/S 68 OF THE IT ACT. HE, HOWEVER, SUBMITTED THAT ASSESSEE H AS CHALLENGED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271 D OF THE IT ACT. FOR VIOLATION OF PROVISION OF SECTION 269SS OF THE IT ACT, 1961 AND THE APPEAL IS PENDING BEFORE THE CIT(A) FOR DIS POSAL. 7. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE CIT(A) SO THA T A CONSISTENT VIEW CAN BE TAKEN ON THIS ISSUE. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. WE FIND THE ASSESSING OFFICER IN THE INSTANT CASE HAS MADE ADDITION OF RS.30,03,521/- TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE IT ACT WHICH HAS BEEN CONFIRMED BY THE CIT(A). HOW EVER, IT IS ALSO AN ADMITTED FACT THAT THE ASSESSING OFFICER HA S LEVIED PENALTY OF RS.30 LACS U/S 271D OF THE IT ACT FOR ACCEPTING THE LOAN IN CASH IN VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE IT ACT. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A). AGAINST LEVY OF PENALTY U/S 271D OF THE IT ACT 1961 WHICH IS PENDIN G BEFORE HIM. THEREFORE, IN ALL FAIRNESS AND IN THE INTEREST OF J USTICE WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE CIT( A) TO TAKE A CONSISTENT APPROACH ON THIS ISSUE I.E. AS TO WHETHE R THE ASSESSEE ITA NO.2206/DEL/2016 7 WAS ABLE TO EXPLAIN THE SOURCE OF DEPOSITS OR THESE ARE CASH LOANS AND IF SO WHETHER THERE IS VIOLATION OF PROVISION O F SECTION 269SS OF THE IT ACT 1961. THE LD. CIT(A) SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROU NDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICA L PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.2019 SD/- SD/- (DIVA SINGH ) (R.K PANDA) JUDICIAL MEMBER ACCOUNTA NT MEMBER *NEHA* DATE:-11.02.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 03.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 11.02.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER