The ITO, Ward-15(2), Ahmedabad V. Shri Divyangbhai P.Vaishnav, Ahmedabad

ITA 2479/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2025 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-12-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MATHIRAMAN
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, A M) ITA NO.2479/AHD/2009 A. Y.: 2006-07 THE INCOME TAX OFFICER, WARD- 15(2), 7 TH FLOOR, NATURE VIEW BUILDING, ASHRAM ROAD, AHMEDABAD VS SHRI DIVYANGBHAI P. VAISHNAV, 26/B, NARAYAN NAGAR SOCIETY, J.B. MARG, PALDI, AHMEDABAD PA NO. ABKPU 4983 A (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. MATHIRAMAN, DR RESPONDENT BY SHRI M. K. PATEL, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XXI, AHMEDABAD DATE D 19-06-2009 FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.3,70,280/- AND RS.9,98,576/- U/S 68 OF THE I. T. ACT, 1961. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ENTERTAINING ADDITIONAL EVIDENCES REGARDING UNEXPLAINED CASH DEPOSITS AND TRANSFER CREDIT ENTRI ES, THUS VIOLATING RULE 46A OF THE I. T. RULES. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVE OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T HE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO N OTED THAT IN THE BANK ACCOUNT OF THE ASSESSEE WITH ICICI BANK, THERE ARE CASH DEPOSITS ON SEVERAL DATES AMOUNTING TO RS.3,70,280/-. SIMILARLY , THERE ARE 8 CREDIT ITA NO. 2479/AHD/2009 SHRI DIVYANGBHAI P.VAISHNAV 2 ENTRIES TOTALING TO RS.9,98,576/- IN THE ASSESSEES ICICI BANK ACCOUNT. THE ASSESSEE HAS FAILED TO EXPLAIN THE CASH DEPOSIT S OF RS.3,70,280/- AS WELL AS FAILED TO EXPLAIN THE TRANSFER ENTRIES THRO UGH BANKING CHANNEL AMOUNTING TO RS.9,98,576/-, ACCORDINGLY THE SAME WE RE TREATED AS UNEXPLAINED CASH CREDIT AND ADDITIONS WERE ACCORDIN GLY MADE. 4. THE ASSESSEE FILED ENTIRE EVIDENCES AND MATERIAL BEFORE THE LEARNED CIT(A) TO EXPLAIN THE ABOVE ADDITIONS AND ALSO FILE D APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE 46A OF THE I.T. RULES BEFORE THE LEARNED CIT(A). THE APPLICATION OF THE ASSESSEE ALONG WITH ADDITIONAL EVIDENCES WAS FORWARDED TO TH4E AO FOR HIS COMMENTS . THE AO FILED HIS REPORT BEFORE THE LEARNED CIT(A) IN REFERENCE TO TH E ADMISSION OF THE ADDITIONAL EVIDENCES UNDER RULE 46A OF THE I. T. RU LES. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE, MATERIAL ON RECORD AND REMAND REPORT FILED BY THE AO AT THE APPELLATE STAGE NOTED THAT THE ASSESSEE HAS REASONABLY COMPLIED WITH THE PROVISION S OF RULE 46A OF THE I. T. RULES AND SINCE THE ADDITIONAL EVIDENCE GOES TO THE ROOT OF THE MATTER, THEREFORE, THE ADDITIONAL EVIDENCES WERE AD MITTED FOR HEARING. 5. AS REGARDS ADDITION OF RS.3,70,280/- IS CONCERNE D, IT WAS EXPLAINED THAT CASH DEPOSIT IN THE BANK ACCOUNT WITH ICICI BA NK WHICH IS JOINTLY OWNED BY THE ASSESSEE AND HIS WIFE SMT. MITA VAISHN AV AND THAT SHE IS HAVING INCOME BY WAY OF SALARY AND TUITION INCOME W HICH IS RECEIVED IN CASH AND DEPOSITED IN THE JOINT ACCOUNT. IT WAS ALS O SUBMITTED THAT SOURCES OF THE SAME DEPOSIT IS CASH WITHDRAWAL FROM ANOTHER BANK ACCOUNT WITH AXIS BANK. THE DETAILED SUBMISSIONS OF THE ASSESSEE ARE RECORDED IN THE IMPUGNED ORDER AND AFFIDAVIT OF WIF E OF THE ASSESSEE ALONG WITH BANK STATEMENT WAS ALSO FILED IN SUPPORT OF TH E SUBMISSIONS. IT WAS ALSO EXPLAINED THAT SOME AMOUNTS WERE WITHDRAWN FRO M THE SAME BANK ACCOUNT ALSO AND RE-DEPOSITED ON VARIOUS DATES. IT WAS, THEREFORE, EXPLAINED BEFORE THE LEANED CIT(A) THAT THE DEPOSIT IN THE BANK ACCOUNT ITA NO. 2479/AHD/2009 SHRI DIVYANGBHAI P.VAISHNAV 3 WITH ICICI BANK WAS CASH WITHDRAWALS FROM AXIS BANK , CASH WITHDRAWALS FROM ICICI BANK ITSELF AND INCOME OF THE WIFE DEPOS ITED IN THE ICICI BANK ACCOUNT. THE LEARNED CIT(A), ON EXAMINATION OF THE EVIDENCES ON RECORD ALONG WITH THE MATERIAL AND CONSIDERING THE REMAND REPORT OF THE AO NOTED THAT THE AFFIDAVIT OF WIFE OF THE ASSESSEE IS NOT ADVERSELY COMMENTED BY THE AO IN THE REMAND REPORT AND THAT E VIDENCES FILED BY THE ASSESSEE ARE SUFFICIENT TO EXPLAIN THE CASH DEP OSITED IN THE BANK ACCOUNT. THE LEARNED CIT(A) ON THE BASIS OF THE EVI DENCES AND MATERIAL ON RECORD DELETED THE ADDITION OF RS.3,70,280/-. 6. AS REGARDS ADDITION OF RS.9,98,576/- IS CONCERNE D, THE ASSESSEE FILED DETAILED SUBMISSIONS ALONG WITH THE MATERIAL AND EVIDENCES IN WHICH IT WAS EXPLAINED THAT ALL ENTRIES WITH ICICI BANK ARE THROUGH TRANSFER BANKING ENTRIES WHICH IS ADMITTED BY THE A O ALSO IN THE ASSESSMENT ORDER. IT WAS BRIEFLY EXPLAINED THAT THE DEPOSIT OF RS.50,000/- AND RS.6,44,837/- ARE THE TRANSFER ENTR IES THROUGH BANKING CHANNEL WHICH ARE THE SALE PROCEEDS OF THE RESIDENT IAL PROPERTY SOLD BY THE ASSESSEE. THE DEPOSITS OF RS.35,000/- AND RS.40 ,000/- THROUGH BANKING CHANNEL WHICH ARE EXPLAINED BY THE ASSESSE E BEING THE AMOUNT RECEIVED FROM HIS SISTER NAMELY NILIMA P. VAISHNAV. CONFIRMATION OF HIS SISTER ALONG WITH COPY OF BANK ACCOUNT AND INCOME T AX RETURN WERE FILED IN SUPPORT OF THE SAME. THE AMOUNT OF RS.25,000/- W AS EXPLAINED TO BE TRANSFERRED FROM ASSESSEES OWN BANK ACCOUNT WITH A XIS BANK IN WHICH SALARY IS DEPOSITED. COPY OF THE BANK ACCOUNT WAS A LSO FILED. RS.75,000/- BEING DEPOSIT WAS EXPLAINED AS THE AMOUNT RECEIVED BY THE ASSESSEE FORM CO-OPERATIVE HOUSING SOCIETY ON ACCOUNT OF REFUND O F MAINTENANCE DEPOSIT OF SALE OF THE FLAT AT AHMEDABAD. COPY OF T HE CHEQUES OF THE SOCIETY WAS ALSO FILED. AS REGARDS DEPOSIT OF RS.1, 18,440/- IS CONCERNED, IT WAS EXPLAINED THAT WIFE OF THE ASSESSEE HAD OPEN ED RECURRING DEPOSIT ACCOUNT IN POST OFFICE IN THE YEAR 2000 WHERE SMALL AMOUNTS WERE DEPOSITED IN SEVERAL YEARS AND ON MATURITY OF THE R ECURRING DEPOSIT ITA NO. 2479/AHD/2009 SHRI DIVYANGBHAI P.VAISHNAV 4 ACCOUNT THE AMOUNT RECEIVED WAS DEPOSITED THROUGH B ANKING CHANNEL IN THE ACCOUNT JOINTLY HELD BY THE ASSESSEE ALONG WITH HIS WIFE. THE AFFIDAVIT OF WIFE OF THE ASSESSEE AND COPY OF THE POST OFFICE RECURRING DEPOSIT ACCOUNT PASS BOOK WAS ALSO FILED. AS REGARDS DEPOSI T OF RS.10,299/- IS CONCERNED, IT WAS EXPLAINED TO BE THE AMOUNT RECEIV ED FROM ORIENTAL INSURANCE CO. LTD. TOWARDS INSURANCE CLAIM OF CAR. THE EVIDENCE IN SUPPORT OF THE SAME WAS ALSO FILED. THE LEARNED CIT (A) ON EXAMINATION OF THE ABOVE MATERIALS ON RECORD ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE AMOUNT OF RS.9,98,576/- ARE THE AMOUNTS DEPOSITED T HROUGH BANKING CHANNEL THROUGH VARIOUS SOURCES AS EXPLAINED ABOVE AND, THEREFORE, THE SAME AMOUNT CANNOT BE TREATED AS UNEXPLAINED DEPOSI T IN THE BANK ACCOUNT OF THE ASSESSEE. THE ADDITION WAS ACCORDING LY DELETED. 7. THE LEARNED DR MERELY RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND DID NOT DISPUTE THE AMOUNTS RECEIVED THRO UGH BANKING CHANNEL IN THE BANK ACCOUNT OF THE ASSESSEE. THE LE ARNED DR SUBMITTED THAT IN THE CASE OF ADDITION OF RS.3,70,280/- IS CO NCERNED, THESE WAS CASH DEPOSITS, THEREFORE, THE ORDER OF THE LEARNED CIT(A) MAY BE REVERSED. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE F ILED APPLICATION BEFORE THE LEARNED CIT(A) FOR ADMISSION OF ADDITIONAL EVID ENCES. THE LEARNED CIT(A) GAVE OPPORTUNITY TO THE AO TO EXAMINE THE AD DITIONAL EVIDENCES AND THE AO FILED REMAND REPORT BEFORE THE LEARNED C IT(A). THE LEARNED CIT(A) WAS SATISFIED THAT THE ABOVE EVIDENCES WHICH GO TO THE ROOT OF THE MATTER, THEREFORE, THE SAME SHOULD BE ADMITTED FOR THE PURP OSE OF DECIDING THE APPEAL OF THE ASSESSEE ON MERIT BECAUSE THE ASSESSE E COMPLIED WITH THE REQUIREMENTS OF RULE 46A OF THE I. T. RULES IN THE MATTER. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KULDEEP INDUSTR IAL CORPORATION 209 ITA NO. 2479/AHD/2009 SHRI DIVYANGBHAI P.VAISHNAV 5 CTR 400 HELD THAT WHEN THE AO WAS PRESENT BEFORE TH E LEARNED CIT(A) AND DID NOT RAISE ANY OBJECTION, RULE 46A NOT VIOLA TED. IN THE PRESENT CASE, THE LEARNED CIT(A) GAVE OPPORTUNITY OF BEING HEARD TO THE AO BEFORE TAKING COGNIZANCE OF ADDITIONAL EVIDENCES. THE ADDI TIONAL EVIDENCES WERE EXAMINED BY THE AO. SINCE THE ADDITIONAL EVIDENCES GO TO THE ROOT OF THE MATTER, THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN ADMITTING THE SAME FOR SUBSTANTIAL CAUSE OF JUSTICE. WE, THEREFORE, DO NOT FIND ANY ERROR IN THE DISCRETION EXERCISED BY THE LEARNED CIT(A) IN A DMITTING THE ADDITIONAL EVIDENCES. 9. THE LEARNED CIT(A) ON PROPER APPRECIATION OF MAT ERIAL ON RECORD NOTED THAT THE ADDITION OF RS.9,98,576/- IS EXPLAIN ED THROUGH EVIDENCE ON RECORD BECAUSE ALL THE DEPOSITS WERE THROUGH BAN KING CHANNEL AND THE SOURCES OF THE SAME HAVE BEEN EXPLAINED THROUGH THE MATERIAL EVIDENCES ON RECORD. THE LEARNED DR PRACTICALLY DID NOT DISPUTE THE FINDING OF THE LEARNED CIT(A) IN ACCEPTING THE EXPL ANATION OF THE ASSESSEE IN DELETING THE ABOVE ADDITION. THE AO HAS ALSO NOT ED IN THE ASSESSMENT ORDER THAT THE AFORESAID AMOUNTS WERE DEPOSITS BEIN G THE CREDIT ENTRIES RECEIVED THROUGH BANKING CHANNEL. THE ASSESSEE HAS PRODUCED SUFFICIENT MATERIAL BEFORE THE LEARNED CIT(A) TO EXPLAIN EACH AND EVERY ENTRIES WHICH ARE THROUGH THE EXPLAINED SOURCES LIKE SALE P ROCEEDS OF THE PROPERTY, AMOUNT RECEIVED FROM SISTER OF THE ASSESS EE, AMOUNTS TRANSFERRED FROM AXIS BANK, AMOUNT RECEIVED ON REFU ND OF MAINTENANCE DEPOSIT FROM CO-OPERATIVE HOUSING SOCIETY, THE AMOU NTS RECEIVED BY ASSESSEES WIFE ON ACCOUNT OF SALARY AND THE INSURA NCE CLAIM RECEIVED FROM ORIENTAL INSURANCE CO. LTD. IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE LEARNED CIT( A) ON PROPER APPRECIATION OF MATERIAL AND EVIDENCES ON RECORD CO RRECTLY DELETED THE AFORESAID ADDITION. AS REGARDS ADDITION OF RS.3,70, 280/- IS CONCERN, IT WAS EXPLAINED THAT THE BANK ACCOUNT WAS JOINTLY OWN ED BY THE ASSESSEE WITH HIS WIFE IN WHICH HIS WIFE HAVING INDEPENDENT SOURCE OF INCOME ITA NO. 2479/AHD/2009 SHRI DIVYANGBHAI P.VAISHNAV 6 MADE CASH DEPOSITS ON VARIOUS DATES. AFFIDAVIT OF W IFE OF THE ASSESSEE WAS FILED IN WHICH HIS WIFE OWNED DEPOSIT OF THE CASH I N THE JOINT ACCOUNT AND THAT THE AMOUNTS WERE ALSO WITHDRAWN FROM AXIS BANK AND ICICI BANK FOR THE PURPOSE OF MAKING DEPOSITS IN THE JOINT ACC OUNT OF THE ASSESSEE AND HIS WIFE. IN THE ABSENCE OF ANY CONTRARY MATERI AL ON RECORD, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) ON PROPER APPRECIA TION OF EVIDENCES AND MATERIAL ON RECORD CORRECTLY DELETED THE ADDITION. 10. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAS CORRECTLY HELD THAT THE DEPOSITS IN THE BANK ACCOUNT ARE FULLY EXPLAINED THROUGH EVIDENCES AND MATERIAL ON RECORD . THE LEARNED CIT(A) WAS, THEREFORE, JUSTIFIED IN DELETING BOTH THE ADDI TIONS. 11. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE DEP ARTMENTAL APPEAL ON BOTH THE GROUNDS. WE, ACCORDINGLY DISMISS THE DEPAR TMENTAL APPEAL. 12. AS A RESULT, DEPARTMENTAL APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-12-2009 SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 23-12-2009 LAKSHMIKANT/- 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 DY. REGISTRAR, ITAT, AHMEDABAD