Appeal details
Counselvise Citation
[2024] 100 COUNSELVISE.COM (IT) 2831 (ITAT-RAJKOT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 8 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-04-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
09-04-2024
Assessment Year
2017-2018
Appeal Filed On
22-08-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . N o .2 3 0 /R j t /2 02 2 ( A s se ss m e nt Y e a r : 20 17- 1 8 ) R a me sh S ha n ke r l al Sh ah, “ Va ik u n th ” , O pp . A nk ur A p a r t me nt , P. O . G a n d hig r a m, J u n ag a d h - 3 6 20 01 , G u ja r at V s. A s sis ta n t C o mm i s s i o ne r o f I nc o m e Ta x, I nt e r na tio na l Ta x a t ion , R a j ko t- 36 00 0 1 [ P A N N o . AG N P S8 9 9 1D ] (Appellant) .. (Respondent) Appellant by : Shri Rupesh Shah, A.R. Respondent by: Shri Sanjeev Ranjan, Sr. DR D a t e of H ea r i ng 10.04.2024 D a t e of P r o no u n ce me nt 24.04.2024 O R D E R PER SIDDHARTHA NAUTIYAL, JM: This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-13, (in short “Ld. CIT(A)”), Ahmedabad in Appeal No. CIT(A)-13/Intl. Taxn./AHD/123/2019-20 vide order dated 29.06.2022 passed for Assessment Year 2017-18. 2. The assessee has taken the following grounds of appeals:- “1. The ld. CIT(A)-13, Ahmedabad has erred in law and on the facts of the case in confirming the various additions made by Ld. AC/DC (International Taxation) Rajkot without appreciating the facts of the case in spite of appellant produced various documentary evidence before CIT(A)-13, Ahmedabad in remand proceedings fails to appreciate the facts of the case of the appellant and overlooked the remand report by the AO under the facts and circumstances of the case and confirmed total addition of Rs.25,51,284 may be deleted in the interest of justice. 2. That both the lower authority fail to appreciate that appellant in NRI (British Citizen and Doctor) and senior citizen having age of 79 and no source of income in India and deposited cash amounting Rs.18,91,000 + Rs110000 during demonetization period own legal money out of withdrawal and out of sale proceeds of old ornaments erred in confirming cash ITA No.230/Rjt/2022 Ramesh Shankerlal Shah vs. ACIT Asst.Year –2017-18 - 2 - deposit of Rs.18,31,000 and Rs.110000 without appreciating the facts of the case and without appreciating the remand report by the AO. 3. That your appellant reserve right to amend/alter/modify any ground or grounds during the pendency of the appeal.” 3. The brief facts of the case are that the assessee is a Non-Resident (British Citizen and a surgeon) and his case was selected for scrutiny assessment for A.Y. 2017-18 based on information gathered under ‘Operation Clean Money’ that he had deposited SBNs of Rs. 18,91,000/- (demonetized currency notes of Rs.500/- & Rs.1,000/-) in various bank accounts with Punjab National Bank and Union Bank in India. However, during the course of assessment proceedings, another cash deposit of Rs. 1,10,000/- was also noticed and added to the total income of the assessee vide assessment order dated 27.11.2019 passed under Section 144 of the Act. 4. During the course of appellate proceedings before Ld. CIT(Appeals), the assessee submitted that he had sold gold ornaments for Rs.10,42,000/- in cash to Shri Nidhiram H Belal on 20.08.2016 and deposited this cash during the demonetized period into various bank accounts. Documents/evidences related to this claim of the assessee were forwarded by Ld. CIT(Appeals) to AO for verification and his comments. The AO vide Remand Report dated 07.07.2021 stated that information under Section 133(6) of the Act was sought from the purported purchaser of the jewellery and a copy of the said bill was also received by him. However, the Assessing Officer declined to accept that the same cash was deposited during the demonetization period owing to the time gap between the time of receipt of cash and subsequent claim of deposit. In the rejoinder, the assessee submitted that the assessing officer has not disapproved any documents, evidences or facts regarding source of generation of cash. In fact, the Ld. Assessing Officer has also cross checked the same with ITA No.230/Rjt/2022 Ramesh Shankerlal Shah vs. ACIT Asst.Year –2017-18 - 3 - the jeweler to whom ornaments were sold and has nowhere disputed or challenged the existence of actual cash being in the hand of assessee at the time of being deposited. The Ld. Assessing Officer’s adverse observations are solely based on his assumptions and probabilities. The arguments of the Ld. Assessing Officer are not supported by any other documents or findings or facts to the contrary. However, Ld. CIT(Appeals) rejected the arguments of the assessee on the ground that the copy of bill of sale cannot be held to be conclusive evidence with respect to generation of this cash of Rs. 10,42,000/- as claimed. Ld. CIT(Appeals) raised doubts regarding the authenticity of the sale bill itself and stated that the sale of bill of jewellery is a self-serving documents. Ld. CIT(Appeals) rejected the contention of the assessee with the following observations: “8.4.1 This raises serious doubts about the authenticity of the aforesaid transaction as the appellant cannot be outside India and in Ahmedabad at the same time. A simple scrutiny of this handmade bill also shows that it has been sold to some shop but it does not disclose any other details, It's not clear whether it was sold to a jeweller as well, as the bill does not contain any registration number, VAT details, etc. Further the bill only gives the ornaments without any description. There is no explanation from where these so-called ornaments, some of them heavy, came to be owned by the appellant, a resident of UK. Furthermore, why was a British citizen who is well to do require to suddenly sell any gold ornaments which were owned by him. In his reply the appellant stated that this was done for renovation of the house. But no such renovation was carried out. Human probabilities suggest that such jewelleries are normally transmitted to the next generation. The entire exercise appears to be an arrangement to somehow justify the huge cash deposit during the demonetization period. Sold in cash is a convenient argument to camouflage the bogus sale. The bill adduced as proof is merely a self-serving document with little evidentiary value. The entire purported transaction is sale of ornament in cash is just a sham and colourable device used to evade tax. 8.4.2 In any case, on the one hand the appellant claims to have sold the ornaments purportedly through a third person in his absence for urgent work requirement and then weaves a story that the same was not used for that work and kept for more than 2 ½ months to be required to be redeposited during demonetization period. No claim or evidence of renovation of the flat later, i.e. the purpose and objective, for which the said gold was sold was made or adduced. Since the claim that such a sale was made for a specific purpose was made by the appellant, it is his onus to prove the same. Not a shred of evidence was produced. It is not the onus of the AO to prove that the said cash was used for some other purposes. In fact, it is highly impractical to put, such onus on the AO in a scrutiny case. ITA No.230/Rjt/2022 Ramesh Shankerlal Shah vs. ACIT Asst.Year –2017-18 - 4 - 8.4.3 In view of above, I am inclined to reject the explanation of the appellant with respect to this amount of Rs 10,42,000/- claimed as cash received from sale of ornament and later deposited in Bank during Demonetization period.” 5. Regarding, remaining cash deposit of Rs.8,49,000/- out of cash deposited of Rs.18,91,000/- the assessee submitted before Ld. CIT(Appeals) that he had re-deposited the earlier withdrawal of cash mainly during the month of April, 2016, during the Demonetization period. The assessee submitted that that the assessee left India on 16.04.2016. Before that he had withdrawn a sum of Rs.7,50,000/- in cash. Later, amounts were withdrawn by his daughter who is the joint account holder. However, Ld. CIT(Appeals) rejected the argument of the assessee on the ground that the assessee has not demonstrated any logic to withdraw cash, if earlier drawn cash is lying at home. The assessee is a Non-Resident who left India on 16.04.2016 and came back only on 02.10.2016. Ld. CIT(Appeals) rejected the argument of the assessee that the money which was withdrawn earlier by the assessee and which the co-owner kept on withdrawing later was saved in cash at his residence and was deposited when that currency notes became illegal. The Ld. CIT(Appeals) made the following observations while rejecting the argument of the assessee: “8.5.2 Regarding the balance amount the appellant of Rs 7,89,000/- the appellant stated that the withdrawals made in April 2016 and later were deposited during the Demonetization period. It is reiterated that that the appellant left India on 16/04/2016. Before that he had withdrawn Rs 7,50,000/- in cash. Later amounts were said to be withdrawn by her daughter who is the joint account holder. However, this argument of the appellant is not footed on reliable reasoning and evidence. It can be seen from the bank accounts statements that there are 7 cash withdrawals from 11.04.2016 to 17.09.2016 and were supposed to be for requirements leading to withdrawals. There is no logic to withdraw cash, if earlier drawn cash is lying at home. This belies human behaviour. Cash is withdrawn only if it is required and is expended. The appellant has cited several case laws in favour of it's argument. But facts in this case are different. The appellant here is Non-Resident who left India on 16/0472016. He carne back only on 02/10/2016. He argues that the money he withdrew earlier and which the co-owner kept on withdrawing later was saved in cash and was deposited when that currency notes became illegal. ITA No.230/Rjt/2022 Ramesh Shankerlal Shah vs. ACIT Asst.Year –2017-18 - 5 - 8.5.3 Attention is also drawn to the fact that the appellant could have deposited the entire cash in one go but he did not do so. He deposited amounts in three different banks on various days with highest amount being Rs 2,50,000/-. It may not be out of place to mention that during the demonetization days, lots of unconfirmed news used to float that the amount of deposit should be kept below Rs 2.5 to 3.0 lakh to keep it below government verification radar in future. Further, bank accounts of trusted persons were being used by unscrupulous persons to deposit their black money to thwart a very noble scheme. Be whatever it may, the conduct of the appellant of depositing the entire cash in multiple banks and multiple amounts and multiple days is highly suspicious. Further the explanation that the said amount was withdrawn in cash on 13.04.2016, left India on 16.04.2016 and kept for a long period and deposited in November is also not explicable. 8.5.4 In view of above, the argument put forward by the appellant is rejected. The explanation regarding source of balance Rs. 7,89,000/- deposited in bank during demonetization is not at all satisfactory and unacceptable.” 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals), confirming the additions made by Ld. CIT(Appeals). The Ld. Counsel for the assessee submitted that the assessee is non-resident senior Citizen of UK who has been living in UK for many years. During the year under assessment he was 76 Years of age. The assessee is a Doctor by profession and was practicing at UK and his wife expired in 2007. The assessee is having one son and two daughters as legal hairs. His son is settled at UK and both the daughters are married and settled at Ahmedabad. The assessee visited India during 2016 and made cash withdrawals on different dates. 7. The Ld. Counsel for the assessee submitted that during the course of assessment and before Ld. CIT(A), the assessee had submitted the bank statement and explained that he had made cash withdrawal of Rs. 9,42,000/- from Punjab National Bank before demonetization, which was cash on hand and the same was re-deposited. Further, both during the assessment proceedings as well as before Ld. CIT(A), the assessee had stated the purpose of cash withdrawal and had submitted that the said amount was withdrawn for renovation of his house. Further, the assessee during the course of assessment ITA No.230/Rjt/2022 Ramesh Shankerlal Shah vs. ACIT Asst.Year –2017-18 - 6 - proceedings also produced copy of sale bill dated 20.08.2016 of Nidhiram H. Balel, in support of the fact that the said person had purchased the gold ornaments of the assessee’s wife. Further, in response to 133(6) notice, Mr. Nidhiram H. Balel also confirmed that he has paid cash to the assessee and that the statement made by such person has not been disputed by the Department. During the course of assessment and before Ld. CIT(A), assessee had produced his passport in support of the fact that he had visited India during the month of March 2016, which is also not in dispute. During the course of assessment and before Ld. CIT(A), assessee has shown cash flow of his cash on hand, which were re-deposited in the bank, during the demonetization period. Accordingly, looking into the instant facts, the Counsel for the assessee submitted that the assessee has been able to demonstrate that he is a non-resident doctor residing in U.K. for past many years. The assessee has no source of income in India and the source of cash deposited during demonetization has been fully explained as coming from sale of ornaments of wife of the assessee and also withdrawals made from bank account for the purpose of renovation of house, which were subsequently duly deposited during the demonetization period. 8. In response, the Ld. D.R. placed reliance on the observations made by the Ld. CIT(A) in the appellate order. 9. We have heard the rival contentions and perused the material on record. From the facts placed on record before us, we observe that the assessee is a citizen of U.K., and has been practicing as a Doctor in U.K. for past many years. The assessee is not having any sources of income in India. Further, in the instant facts the assessee has been able to demonstrate that the cash deposited by the assessee during the demonetization period was arising out of sale of ornaments (the purchaser of ornaments had duly verified the factum of ITA No.230/Rjt/2022 Ramesh Shankerlal Shah vs. ACIT Asst.Year –2017-18 - 7 - purchase in response to 133(6) notice issued to such person) and from cash withdrawals made on different dates from his saving bank accounts held with Punjab National Bank, amounting to Rs. 7,00,200/-. There is no material on record dispute the fact that the assessee had sold ornaments belonging to his wife on a consideration of Rs. 10,42,015/- which were get as cash on hand by the daughter of the assessee and also from the facts placed on record, it is seen that the assessee had made cash withdrawal on different dates from his savings bank account with Punjab National Bank, during the impugned assessment year, amounting to Rs. 7,92,000/-. Accordingly, looking into the instant facts, we are of the considered view that the assessee has discharged his onus by suitably explaining the source of cash deposit made in his bank account during the demonetization period. Accordingly, looking into the instant facts, the addition made by the Ld. Assessing Officer is directed to be deleted. 10. In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 24/04/2024 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 24/04/2024 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, राजोकट / DR, ITAT, Rajkot 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार Dy./Asstt.Registrar) आयकर अपील य अ धकरण, राजोकट / ITAT, Rajkot
