Ajay Kumar Saxena, Kanpur V. Astt. Commissioner of Income Tax-4, Kanpur

ITA 235/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4126 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 17-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NEIL JAIN
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.235/LKW/2015 ASSESSMENT YEAR 2007-08 ACIT - 4, KANPUR VS AJAY KUMAR SAXENA 3/204, VISHNUPURI, KANPUR-208002 PAN ACEPS 7866 A (RESPONDENT) (APPELLANT) SHRI RAKESH GARG, ADVOCATE APPELLANT BY SHRI NEIL JAIN , DR RESPONDENT BY 02 /0 6 /2016 DATE OF HEARING 29 / 07 /2016 DATE OF PRONOUNCEMENT ORDER PER MAHAVIR PRASAD, JM: THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (A)-II, KANPUR DATED 30.12.2014 FOR THE AY 2006-07, INTER ALIA ON FOLLOWING GROUNDS: 01. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN L AW IN ARBITRARILY UPHOLDING THE ADDITION OF RS,10,17,000/ - AS UNEXPLAINED INCOME UNDER SECTION 69A OF THE I.T. AC T, 1961, WHICH ADDITION IS CONTRARY TO FACTS, BAD IN LAW AND BE DELETED. 02. BECAUSE ON A PROPER CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE FOUND THAT N O PART OF RS.10,17,000/-DEPOSITED BY THE ASSESSEE IN BANK, IS ITA NO. 235 / LKW /201 5 2 UNEXPLAINED INCOME OF THE ASSESSEE, AND HENCE, THE ADDITION MADE BE DELETED. 03. BECAUSE THE CIT(A) HAS FAILED TO APPRECIATE T HAT THE AMOUNT OF RS.10,17,000/- DEPOSITED IN BANK IS NOTHING ELSE , BUT IS OUT OF WITHDRAWALS MADE BY THE ASSESSEE FROM HIS BA NK ACCOUNT, WHICH HAS BEEN RE-DEPOSITED IN HIS BANK. 04. BECAUSE IN ANY CASE AND IN ALL CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT(A) IS ERRONEOUS AND MISCONCEIV ED THE ADDITION MADE BE DELETED. 2. WE NOTED THAT DURING THE ASSESSMENT PROCEEDINGS F OR AY 2007-08, THE ASSESSEE WAS ASKED THE CASH DEPOSITS AMOUNTING TO RS.10,17,000/- IN STANDARD CHARTERED BANK, DELHI AS PER THE AIR VIDE ORDER SHEET ENTRY DATED 23.07.2009. THE ASSESSEE HAD FAILED TO PROVE AND ESTABLISH THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE T RANSACTIONS OF CASH DEPOSITS (AS DISCUSSED IN THE ASSESSMENT ORDER) BEF ORE THE AO ADDITION OF RS.10,17,000/- HAS BEEN MADE U/S 69 OF THE ACT. DUR ING THE APPEAL PROCEEDINGS, THE AR OF THE ASSESSEE HAS SUBMITTED A LETTER DATED 29-12- 2014 AND HAS EXPRESSED HIS INABILITY TO PRODUCE ANY OTHER DOCUMENTS AND EVIDENCES IN SUPPORT OF GENUINENESS, IDENTITY AND C REDITWORTHINESS OF THE TRANSACTIONS OF CASH DEPOSITS. IN HIS SUBMISSION VI DE HIS LETTER DATED 29- 12-2014, A.R. OF THE ASSESSEE HAS REPEATED THE SAME AS PLACED BEFORE THE AO WITHOUT SUBSTANTIATING THE FACTS WITH PROOF AND EVIDENCES. AS THE ASSESSEE HAS FAILED TO PROVE THE IDENTITY, GENUINEN ESS AND CREDITWORTHINESS OF CASH DEPOSIT OF RS.10,17,000/-M ADE IN THE BANK ACCOUNT MAINTAINED IN STANDARD CHARTERED BANK, PREE T VIHAR, DELHI, THE ADDITION OF RS.10,17,000/- HAS RIGHTLY BEEN MADE U /S 69A OF THE ACT. 3. IN RESPONSE TO THE ABOVE MENTIONED QUERY, THE AS SESSEE FILED HIS REPLY DATED 11.08.2009. THE REPLY IS REPRODUCED AS BELOW: ITA NO. 235 / LKW /201 5 3 RESPECTFULLY FOLLOWING DETAILS ARE SUBMITTED IN CON NECTION WITH THE QUERY RAISED FOR CASH DEPOSIT OF RS.10,17, 000/- IN STANDARD CHARTERED BANK, DELHI. AS A/READY EXPLAINE D IN REPLY DATED 23.07.2009 ASSESSEE'S COMPANY M/S JAK TRADERS (P.) LTD., KANPUR HAD THE INTENTION TO BUY A PROPERTY FO R ITS OFFICE PURPOSES. FOR NEGOTIATING THE PURCHASE OF PROPERTY, IT HAD INITIALLY ADVANCED AN AMOUNT OF RS.9,13,000/- THROU GH CHEQUES TO THE ASSESSEE IN PREVIOUS YEAR I. E. DURING JANUA RY106 TO MARCH 06. BUT LATER ON NEGOTIATIONS DID NOT PROGRES S AND THE MONEY WAS RETURNED BACK TO THE COMPANY THROUGH CHEQ UES BY DEPOSITING RS.9,13,000/- IN CASH IN STANDARD CHARTE D BANK, DELHI DURING THE MONTH OF NOVEMBER 2006. LATER ON A FTER SIX- SEVEN MONTHS COMPANY DIRECTLY PURCHASED ANOTHER PRO PERTY FOR OFFICE USE. COPY OF BANK ACCOUNT HAS ALREADY BEEN SUBMITTED. COMPANY BOOKS SHOWING BUILDING ADVANCE OF' RS.9,13, 000/-ARE ALSO PRODUCED. THE BALANCE OF RS. 1,04,000/- DEPOSITED IN SMALL AM OUNTS ON DIFFERENT DATES AS EXPLAINED EARLIER, ARE OUT OF EA RLIER WITHDRAWALS,' 5. THE SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 17.08.2009 TO SHOW CAUSE AS TO WHY AN AMOUNT OF RS.10,17,000/- SHOULD NOT BE ADDED BACK TO YOUR INC OME AS UNEXPLAINED CASH DEPOSITS. THE SHOW CAUSE NOTICE IS REPRODUCED AS BELOW :- 'THE FACT ARISES THAT WHEN THE COMPANY DIRECTL Y PURCHASED ANOTHER PROPERTY FOR OFFICE USE AFTER SIX-SEVEN MON THS THEN WHAT WAS THE NEED FOR THE COMPANY TO INITIALLY ADVA NCE AN AMOUNT OF RS. 9,13,000/-THROUGH CHEQUES TO YOU IN T HE PREVIOUS YEAR FOR THE PURCHASE OF THE PROPERTY FOR WHICH THE NEGOTIATIONS FAILED. THE COMPANY COULD HAVE PURCHAS ED THE PROPERTY FOR WHICH THE NEGOTIATIONS FAILED, DIRECTL Y AS FT DID SIX- SEVEN MONTHS LATER, INSTEAD OF PURCHASING IT INDIRE CTLY THROUGH YOU.' 6. IN RESPONSE, THE ASSESSEE FILED HIS REPLY VIDE LETTER DATED 24.08.2009. THE REPLY IS REPRODUCED AS BELOW;- ITA NO. 235 / LKW /201 5 4 'IT IS MOST RESPECTFULLY, SUBMITTED THAT DEALINGS F OR EACH PROPERTY (O BE PURCHASED ARE DONE ACCORDING TO THE CONDITION IMPOSED BY SELLER. CONDITIONS FOR. PURCHASING PROPE RTY FOR WHICH THE COMPANY ADVANCED MONEY OF RS.9,13,000/- TO ASSE SSEE WERE DIFFERENT TO THE CONDITIONS OF PURCHASE OF PRO PERTY WHICH LATER ON COMPANY DIRECTLY PURCHASED. IN EARLIER CAS E, NEGOTIATIONS FOR PURCHASE OF PROPERTY HAD STARTED T HROUGH MIDDLEMEN AND NOT DIRECTLY THROUGH OWNERS OF PROPER TY. THE ASSESSEE ON BEHALF OF COMPANY WAS DEALING WITH THEM .' FURTHER, THE ASSESSEE VIDE HIS REPLY DATED 07.10.20 09 HAS STATED THAT:- MONEY WAS ADVANCED BY M/S JAK TRADERS (P.) LTD. IN THE BANK ACCOUNT OF THE ASSESSEE AS FOLLOWS:- DATES AMOUNT (RS.) 19.01.2006 41,500/ - 20.01.2006 83,000/- 16.02.2006 83,000/ - 18.02.2006 83,000/ - 22.02.2006 (OUT OF RS.2,49,000/ - ) 2,07,500/ - 10.03.2006 (OUT OF RS.4,98,000/ - ) 4,15,000/ - 9,13,000/ - MONEY WAS WITHDRAWN BY THE ASSESSEE FROM THE BANK ACCOUNT AS FOLLOWS: DATES AMOUNT (RS.) 21.01.2006 1,04,000/ - 23.01.2006 5,000/ - 16.02.2006 15,000/ - 18.02.2006 1,10,000/ - 20.02.2006 25,000/ - 22.02.2006 2,34,000/ - 27.02.2006 10,000/ - 01.03.2006 5,000/ - 10.03.2006 3,00,000/ - 11.03.2006 43,000/ - 13.03.2006 1,40,000/ - ITA NO. 235 / LKW /201 5 5 9,91,000/ - MONEY WAS DEPOSITED BY THE ASSESSEE IN HIS BANK ACC OUNT IN CASH AS FOLLOWS:- DATES AMOUNT (RS.) 18.11.2006 3,00,000/- 20.11.2006 4,00,000/ - 21.11.2006 ( OUT OF RS.2,40,000/ - ) 2,13,000/ - 9,13,000/ - 4. THE ASSESSEE HAS FAILED TO DISCHARGE HIS PRIMARY ONUS TO EXPLAIN AND SUBSTANTIATE THE OWNERSHIP OF CASH OF RS.1 0,17,000/- IN THE FORM OF CASH DEPOSIT MADE IN THE BANK ACCOUNT. IN VIEW O F THE ABOVE, THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE T RANSACTIONS OF CASH DEPOSITS HAVE NOT BEEN EXPLAINED AND ESTABLISHED AN D THERE IS TIME GAP OF EIGHT MONTHS APPROXIMATELY IN WITHDRAWAL OF MONE Y OF RS.9,91,000/- AND CASH DEPOSIT OF RS.9,13,000/- IN THE BANK ACCOU NT OF THE ASSESSEE AND ASSESSEE HAS BEEN UNABLE TO PROVIDE ANY EVIDENC E TO SUPPORT THAT THE MONEY WITHDRAWN WAS USED FOR INVESTMENT IN THE PROPERTY AND LATER ON THE NEGOTIATION FAILED DUE TO WHICH THE MONEY WA S DEPOSITED IN THE BANK ACCOUNT. THUS, THERE IS NO CO-RELATION BETWEEN THE AMOUNT WITHDRAWN FROM THE BANK ACCOUNT AND TEH CASH DEPOSI TS IN THE BANK. 5. AGGRIEVED, ASSESSEE HAS PREFERRED AN APPEAL BEFO RE THE CIT(A) AND CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITION OF RS.10,17,000/-. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSEE IS A SALARIED EMPLOYEE AND HAD CASH IN HAND AND SAME AMO UNT WAS DEPOSITED ITA NO. 235 / LKW /201 5 6 IN THE BANK AND IT IS ALSO EVIDENT FROM THE ASSESSM ENT ORDER AT PAGE 3 AS MONEY WAS WITHDRAWN BY THE ASSESSEE FROM THE BANK A CCOUNT AND PAID TO COMPANY AS AN ADVANCE FOR PURCHASING OF AN OFFIC E BUT SOMEHOW NEGOTIATIONS FAILED AND MONEY WAS RETURNED IN THE C OMPANY TO THE ASSESSEE WHO DEPOSITED THE SAME IN HIS ACCOUNT. WE H OLD THAT ASSESSEE HAS NOT VIOLATED ANY PROVISIONS OF THE INCOME TAX A CT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (P.K. BANSAL) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/07/2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR