Shri Sarwankumar Sharma, Surat V. The Income tax Officer,Ward-1(2), Surat

ITA 2302/AHD/2011

• Counselvise Citation: 230220514 RSA 2011
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 17-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Keywords: Unexplained investment; Income from undisclosed sources; Salary income; Corroborative evidences
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI A. MOHAN ALANKAMONY, AM AND SHRI KUL B HARAT, JM) ITA NO.2302/AHD/2011 ( A. Y.2008-09) SHRI SARWANKUMAR SHARMA, 15, FATEHBHAI COLONY, NEAR 451 MARKET, RING ROAD, SURAT P. A. NO. AGUPS 8266 L VS THE INCOME TAX OFFICER, WARD 1 (2), AAYAKAR BHAVAN, MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) APPELLANT BY SHRI MEHUL SHAH, AR RESPONDENT BY SHRI J. P. JHANGID, SR. DR DATE OF HEARING: 17-07-20 13 DATE OF PRONOUNCEMENT: -08-2013 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE LEARNE D CIT(A)-I, SURAT IN APPEAL NO.CAS-I/284/2010-11 DATED 17-06-2011 PASSED U/S 250 READ WITH SECTION 143 (3) OF THE INCOME TAX ACT, 1961, F OR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IN HIS APPEAL HAS RAISED THREE GROU NDS WHEREIN GROUND NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE SOLE SURVIVING GROUNDS NO.1 IS RE PRODUCED HEREIN UNDER FOR REFERENCE:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 2 ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN MAKING ADDITION OF RS.45,85,861/- U/S 69A OF THE I. T. ACT , 1961 ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT. 3. BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE T HE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM SALARY AND INTEREST FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 09-03-200 9 DECLARING TOTAL INCOME OF RS.1,07,160/-. THE CASE WAS PROCESSED U/S 143(1) OF THE ACT AND SUBSEQUENTLY SELECTED FOR SCRUTINY. FINALLY, AS SESSMENT ORDER WAS PASSED BY THE LEARNED AO U/S 143(3) OF THE ACT ON 3 0-12-2010 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 47,93,020/- WHEREIN ADDITION OF RS.45,85,861/- WAS MADE U/S 69A OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT. DURIN G THE ASSESSMENT PROCEEDINGS, THE LEARNED AO OBSERVED THAT AIR INFOR MATION SHOWS THAT THE ASSESSEE HELD A BANK ACCOUNT BEING A/C NO.31020 00100093025 WITH THE PUNJAB NATIONAL BANK, SURAT WHEREIN THE AS SESSEE HAD DEPOSITED A SUM OF RS.45,16,192/- ON VARIOUS DATE. ON THE BASIS OF THE SAME, THE LEARNED AO ISSUED NOTICE U/S 133(6) OF TH E ACT TO THE BANK REQUIRING IT TO FURNISH CERTAIN DETAILS ALONG WITH BANK STATEMENT OF THE ASSESSEE OF THE AFORESAID ACCOUNT NUMBER. IT WAS FU RTHER OBSERVED BY THE LEARNED AO THAT THE DETAILS OF THE BANK ACCOUNT WERE NOT REFLECTED BY THE ASSESSEE IN HIS RETURN OF INCOME. ON PERUSAL OF THE BANK STATEMENT THE LEARNED AO NOTICED THAT THE ASSESSEE HAD DEPOSI TED TOTAL AMOUNT OF RS.66,75,030/- IN THE ABOVE BANK ACCOUNT INCLUDING A SUM OF RS.45,16,192/- IN CASH. IN VIEW OF THE SAME, THE LE ARNED AO SHOW CAUSED THE ASSESSEE AS TO WHY CASH DEPOSIT OF RS.45 ,16,192/- SHOULD NOT BE ADDED TO HIS TOTAL INCOME AS UNEXPLAINED MON EY U/S 69A OF THE ACT. IN RESPONSE THERETO, THE ASSESSEE SUBMITTED T HAT THE TRANSACTIONS IN THE SAID ACCOUNTS WERE BUSINESS TRANSACTIONS OF SALES AND PURCHASES OF ART SILK CLOTH AND THE ASSESSEE HAD NOT MAINTAIN ANY ACCOUNT FOR THE ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 3 SAME. THE ASSESSEE HAD ALSO FURNISHED A STATEMENT S HOWING MONTHLY TRANSACTIONS IN THE SAID ACCOUNT WHICH IS AS UNDER: - MONTH DEPOSIT (RS.) WITHDRAWALS (RS.) APRIL 173360 88390 MAY 430100 64440 JUNE 277310 215205 JULY 282450 465820 AUGUST 309618 245175 SEPTEMBER 845136 356521 OCTOBER 759300 159009 NOVEMBER 187960 190670 DECEMBER 544894 533653 JANUARY, 2008 300460 278640 FEBRUARY 299600 325414 MARCH 250663 258299 TOTAL 4659398 4592351 3.1 THE LEARNED AO REJECTED THE EXPLANATION FURNISH ED BY THE ASSESSEE FOR THE FOLLOWING REASONS:- (I) THE ASSESSEE HAD STATED IN THE FIRST INSTANCE T HAT HIS SOURCE OF INCOME WAS SALARY AND INTEREST AND HE MAINTAINED AC COUNT NO.1988 WITH FEDERAL BANK. SUBSEQUENTLY, THE ASSESS EE HAD CHANGED HIS STAND ON BEING QUERIED BY STATING THAT THE ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 4 TRANSACTIONS IN THE SAVING ACCOUNT REFLECTED HIS BU SINESS TRANSACTION OF TRADING IN ART SILK CLOTH. II) THE ASSESSEE COULD NOT EXPLAIN THE NATURE AND S OURCE OF THE AMOUNT DEPOSITED IN THE BANK ACCOUNT AS REQUIRED U/ S 69A OF THE ACT. (III) THE BANK DETAILS SHOWED THAT ASSESSEE HAD MAD E UNACCOUNTED INVESTMENT IN VARIOUS ASSETS AND INCURRED UNACCOUNT ED EXPENDITURE OUT OF SUCH UNACCOUNTED INCOME REFLECTE D AT THE CREDIT SIDE OF THE BANK ACCOUNT. (IV) THE ASSESSEE FAILED TO PRODUCE SOURCE OF ACQUI SITION OF THE MONEY DEPOSITED IN THE SAID ACCOUNT. (V) THE ASSESSEE HAD NOT DISCLOSED HIS BANK ACCOUNT NO.3102000100093025 MAINTAINED WITH PUNJAB NATIONAL BANK. (VI) THOUGH THE ASSESSEE HAD RELIED ON VARIOUS DECI SIONS, THEY ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE SINCE THE AS SESSEE HAD NOT DISCLOSED HIS BANK ACCOUNT WITH PUNJAB NATIONAL BAN K TO THE REVENUE DEPARTMENT. 3.3 FOR THE AFORESAID REASONS, THE LEARNED AO ADDED THIS AMOUNT OF RS.45,85,861/- TO THE INCOME OF THE ASSESSEE AS UNE XPLAINED MONEY U/S 69A OF THE ACT. 3.4 THE ASSESSEE CARRIED THE MATTER BEFORE THE LEAR NED CIT(A) AND THE LEARNED CIT(A) UPHELD THE ORDER OF THE LEARNED AO. THE RELEVANT PORTION OF THE FINDINGS OF THE LEARNED CIT(A) IS REPRODUCED HEREIN UNDER FOR REFERENCE:- 6. DECISION: - 6.1 THE ARGUMENTS OF THE ASSESSING OFFICER AS WELL AS APPELLANT HAVE BEEN CONSIDERED. THE APPELLANT HAS CONTENDED THAT H E IS A TAMER AND THAT DEPOSIT IN THE BANK A/C IS IN THE NATURE OF SA LES RECEIPT DEPOSITED BY VARIOUS CUSTOMERS AT DIFFERENT PLACES. HOWEVER, THE APPELLANT HAS GIVEN NO SUPPORTING EVIDENCES TO SUBSTANTIATE ITS C ONTENTION. ON THE CONTRARY, IN THE RETURN OF INCOME, THE APPELLANT HA D SHOWN INCOME FROM SALARY AND NO INCOME FROM SO CALLED BUSINESS ACTIVI TY WAS DISCLOSED IN THE RETURN. EVEN DURING THE COURSE OF APPELLATE PRO CEEDINGS, THE APPELLANT WAS ASKED TO ADDUCE EVIDENCE IN SUPPORT O F ITS CLAIM THAT HE ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 5 IS CARRYING OUT TRADING ACTIVITY. HOWEVER, THE APPE LLANT HAS NOT PRODUCED ANY SUCH EVIDENCE EVEN AT THE APPELLATE SA GE. 6.2 IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ENT IRE STORY AS PROPOSED BY THE APPELLANT THAT THE DEPOSIT IN THE BANK A/C I S IN THE NATURE OF TRADING RECEIPTS IS AT BEST A FIGMENT OF IMAGINATIO N. THE STRONG REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER AS MENTIONED ABOVE CLEARLY INDICATES THAT THE CASH DEP OSIT IN THE BANK A/C IS OUT OF UNDISCLOSED SOURCES. IN VIEW OF THE REA SONING GIVEN BY THE A.O., IT IS HELD THAT THE ENTIRE AMOUNT OF CASH DEP OSIT IN THE BANK IS UNACCOUNTED INCOME OF THE APPELLANT DURING THE YEAR. IN VIEW OF THE ABOVE, THE ORDER OF THE ASSESSING OFFICER IS UPHELD . IN THE RESULT THE APPEAL IS DISMISSED . 3.5 AGAINST THE ABOVE FINDINGS OF THE LEARNED CIT(A ), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US THE LEARNED AR SUBMITTED THAT THE ASSE SSEES CASE IS COVERED BY THE ORDER OF THE ITAT AHMEDABAD C BENC H DATED 28-03-2012 IN THE CASE OF ITO VS SMT. RATANBEN CHAM PALAL BHATIA IN ITA NO.3282/AHD/2011 FOR THE ASSESSMENT YEAR 2008-0 9. HE ALSO FURTHER RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS PRESIDENT INDUSTRIES REPORTED IN 258 ITR 654 (GUJ) AND PLEADED THAT THE ADDITION MAY BE DELETED. THE LEARNED DR ON THE OTHER HAND, RELIED ON THE ORDER OF THE LEARNED CIT(A) AND PRAYE D THAT HIS ORDER MAY BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE REVENUE AND CAREFULLY CONSIDERED THE MATERIALS AVAI LABLE ON RECORD. FROM THE CASE BEFORE US THE FOLLOWING FACTS EMERGE: - (I) THE ASSESSEE HAD NOT DISCLOSED THE BANK ACCOUNT MAINTAINED BY HIM WITH PUNJAB NATIONAL BANK BEARING ACCOUNT NO.3102000100093025 WHEREIN A SUM OF RS.46,90,487/- WAS DEPOSITED ON VARIOUS DATES FOR THE PERIOD 01-04-200 7 TO 31-03- 2008. THE AGGREGATE OF THE WITHDRAWALS DURING THAT PERIOD ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 6 AMOUNTED TO RS.46,45,855/- (COURTESY PAGE NO.7 TO 2 7 OF THE PAPER BOOK FURNISHED BY THE ASSESSEE). (II) THE EXPLANATION OFFERED BY THE ASSESSEE WAS TH AT THESE DEPOSITS AND WITHDRAWALS REFLECTED HIS UNACCOUNTED BUSINESS OF TRADING IN ART SILK CLOTH. (III) THE LEARNED AO ADDED THE ENTIRE AMOUNT OF RS. 45,85,861/- AS MONEY OWNED BY THE ASSESSEE IN THE FORM OF CASH DEP OSITS U/S 69A OF THE ACT REJECTING THE CONTENTION OF THE ASSE SSEE THAT THESE DEPOSITS RESULTED OUT OF TRADING IN ART SILK CLOTH AND THE CORRESPONDING WITHDRAWALS WERE EXPENDITURE INCURRED FOR THE PURCHASES MADE BY THE ASSESSEE. 5.1 THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE L EARNED AO SINCE THE ASSESSEE COULD NOT ADDUCE EVIDENCE IN SUPPORT O F HIS CLAIM THAT HE WAS CARRYING OUT TRADING ACTIVITIES IN THE FORM OF VOUCHERS ETC. EVEN DURING THE APPELLATE STAGE. 6. ON EXAMINING THE BANK ACCOUNT SUBMITTED BY THE A SSESSEE WE FIND THAT THE ASSESSEE HAD WITHDRAWN CASH IN MOST OF THE INSTANCES BY WAY OF ISSUING CHEQUES TO VARIOUS PARTIES FROM SURAT AN D OTHER PLACES. SIMILARLY, CASH WAS DEPOSITED FROM VARIOUS PLACES I N THE ASSESSEES BANK ACCOUNT. THIS POINTS OUT THAT THERE WAS SOME A CTIVITY CARRIED ON BY THE ASSESSEE RELATING TO BUSINESS. THE REVENUE HAS IT MEANS TO FIND OUT THE NATURE OF TRANSACTIONS TRANSACTED IN THE BANK A CCOUNTS OF THE ASSESSEE. HOWEVER, THE REVENUE HAS FAILED TO MAKE S UCH EXERCISE AND SIMPLY PRESUMED THE FACTS TO ITS CONVENIENCE THAT T HE ENTIRE CASH DEPOSITED BY THE ASSESSEE WAS THE INCOME OF THE ASS ESSEE. WE DO NOT SUBSCRIBE TO THIS VIEW OF THE REVENUE. THE REVENUE HAS ALSO NOT BROUGHT ANYTHING ON RECORD BEFORE US STATING THAT THE ASSES SEE HAD MADE ANY INVESTMENT FROM SUCH INCOME. FURTHER, CONSIDERING T HE PARTICULARS OF TRANSACTIONS REFLECTED IN THE BANK STATEMENT ONE CA N PRESUME THAT THE ASSESSEE WAS INDULGING IN TRADING ACTIVITIES PROBAB LY OF ART SILK CLOTH AS CLAIMED BY THE ASSESSEE. NO DOUBT, THE ONUS IS ON T HE ASSESSEE TO ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 7 ESTABLISH HIS CLAIM WHICH HE HAS NOT COMPLIED FULLY . HOWEVER, THE REVENUE HAS ALSO NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT THE CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE WAS H IS INCOME FROM UNDISCLOSED SOURCES WITHOUT COMMENTING ON THE CASH WITHDRAWALS MADE BY THE ASSESSEE. IN THESE CIRCUMSTANCES AND DRAWING STRENGTH FROM THE CASE LAWS CITED BY THE ASSESSEE, SUPRA, WE ARE OF T HE CONSIDERED VIEW THAT THE ENTIRE DEPOSITS OF RS.45,85,861/- MADE BY THE ASSESSEE IN HIS BANK ACCOUNT AS OBSERVED BY THE LEARNED AO HAS TO B E TREATED AS TOTAL TURNOVER OF THE ASSESSEE WITH RESPECT TO HIS UNDISC LOSED BUSINESS OF TRADING IN ART SILK CLOTH AND ACCORDINGLY THE INCOM E OF THE ASSESSEE SHALL BE ESTIMATED AT 8% OF THE TOTAL TURNOVER. IT IS ORD ERED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-8-2013. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITANO.2302/A/2011(AY-2008-09) SHRI SARWANKUMAR SHARMA VS ITO 1(2), SURAT 8 1. DATE OF DICTATION: DIRECT ON COMPUTER 06-08-13 /13-08-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER 12-08-13/13-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: