Shri Vishal Dhawan, Bhopal V. The ITO, Vidisha

ITA 254/IND/2012

• Counselvise Citation: 25422714 RSA 2012
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Salary income; Capital receipt
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AA4PD5760C I.T.A.NO. 254 /IND/201 2 . A.Y. : 2008 - 09 SHRI VISHAL DHAWAN, VS INCOME - TAX OFFICER, B - 249, MANSAROVAR COLONY, SHAHPURA, BHOPAL BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI PRAKASH JAIN, CA RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 27 .0 8 .2012 DATE OF PRONOUNCEMENT : 12 . 0 9 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 25.1.2012 FOR THE ASSESSMENT YEAR 2 008-09, IN -: 2: - 2 THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME -TAX ACT, 1961. 2. THE ASSESSEE IS AGGRIEVED FOR ADDITION OF RS. 24,93,405/- U/S 68 OF THE INCOME-TAX ACT, 1961. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING SALARY INCOME FROM VAISHNAV FIBRES LIMITED , BHOPAL, AND INTEREST FROM BANK AND NSC. DURING THE COURSE O F SCRUTINY ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS HAVING JOINT BANK ACCOUNT NO. 569010100012430 WITH UTI BANK. THIS ACCOUNT WAS JOI NTLY HELD BY THE ASSESSEE WITH HIS WIFE ANJALI DHAWAN. T HE ASSESSING OFFICER FURTHER STATED THAT THERE WERE CR EDIT OF RS. 11,00,000/- RS. 9,60,000/- AND RS. 4,33,405/- ON 12.10.2007, 12.5.2007 AND 12.5.2007 RESPECTIVELY. T HE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS FAIL ED TO SATISFACTORILY EXPLAIN THE CREDIT ENTRY IN THE BANK ACCOUNT, THEREFORE, ADDITION OF RS. 24,93,405/- WAS MADE U/S 68 OF THE INCOME-TAX ACT, 1961, IN RESPECT OF THE ABOVE CREDI T ENTRIES. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ACTI ON OF THE -: 3: - 3 ASSESSING OFFICER AND THE ASSESSEE IS IN FURTHER AP PEAL BEFORE US. 4. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATI VE THAT NO AMOUNT WAS DEPOSITED IN THE BANK DURING THE YEAR UNDER CONSIDERATION AND THIS WAS ONLY TRANSFER ENTR Y OUT OF SWEEP TRANSFER FROM FDR MADE BY THE BANK IN THE IMM EDIATELY PRECEDING YEAR IN RESPECT OF AMOUNT RECEIVED FROM M /S. VAISHNAV FIBRES LIMITED ON ACCOUNT OF TRANSFER OF T HEIR EQUITY SHARES. OUR ATTENTION WAS DRAWN TO THE COPY OF THE BANK STATEMENT WITH THE UTI BANK PLACED AT PAGE 6 TO 10 OF THE PAPER BOOK INDICATING SWEEP TRANSFER OF AMOUNT, COP Y OF STATEMENT OF RECEIPT AND PAYMENT IN THE BANK ACCOUN T NO. 044010100089195 HELD WITH AXIS BANK FROM THE PERIOD FROM 1.4.2007 TO 31.3.2008 AS PLACED AT PAGES 11 & 12 OF THE PAPER BOOK. THE CRUX OF THE ARGUMENT OF THE LD. AUTHORIZE D REPRESENTATIVE WAS THAT THERE WAS NO FRESH DEPOSIT IN THE BANK DURING THE YEAR UNDER CONSIDERATION AND IT WAS ONLY A TRANSFER ENTRY IN RESPECT OF FDRS ALREADY MADE IN T HE IMMEDIATELY PRECEDING YEAR BY WAY OF SWEEP TRANSFER . ON THE OTHER HAND, THE LD. SENIOR DR RELIED ON THE ORDER O F LOWER -: 4: - 4 AUTHORITIES AND CONTENDED THAT THE ASSESSEE COULD N OT SATISFACTORILY EXPLAIN CREDIT ENTRY IN THE BANK ACC OUNT, THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN M AKING ADDITION U/S 68 OF THE INCOME-TAX ACT, 1961. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAV E ALSO PERUSED THE RELEVANT DOCUMENTS OF THE PAPER BOOK TO WHICH OUR ATTENTION WAS INVITED DURING THE COURSE OF HEAR ING, WHICH WERE CERTIFIED TO BE FILED BEFORE THE LOWER AUTHORI TIES IN TERMS OF THE CERTIFICATE ENCLOSED WITH THE PAPER BOOK. UN DER THE PROVISIONS OF SECTION 68, WHEREIN SUM IS FOUND CRED ITED IN THE BOOKS OF AN ASSESSEE AND THE ASSESSEE OFFERS NO EXP LANATION ABOUT THE NATURE OR SOURCE THEREOF OR THE EXPLANATI ON OFFERED BY HIM IS NOT SATISFACTORY IN THE OPINION OF THE AS SESSING OFFICER, THE SUM SO CREDITED MAY BE CHARGED TO INCO ME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. ONUS IS ON THE ASSESSEE TO EXPLAIN THE CREDIT ENTRY AND IF HE FAILS TO SATISFACTORILY EXPLAIN, ADDITION IS WARRANTED U/S 6 8 OF INCOME- TAX ACT, 1961. IN THE INSTANT CASE, ADDITION HAS BE EN MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF INCOME-TA X ACT, -: 5: - 5 1961. ON THE BASIS OF DOCUMENTARY EVIDENCE PLACED I N PAPER BOOK, WE HAVE TO EXAMINE WHETHER ASSESSEE HAS EXPLA INED THE CREDIT ENTRY IN HIS BANK ACCOUNT. FROM THE RECORD, WE FOUND THAT THERE WAS CREDIT ENTRY IN THE BANK ACCOUNT OF THE ASSESSEE ON 12.10.2007 RS. 11 LAKHS, ON 12.5.07 RS. 9,60,000 /- AND ON 12.5.2007 RS. 4,33,405/-. AS PER THE BANK STATEMENT PLACED ON RECORD, THERE WERE TRANSFER OF RS. 11,00,000/- O N 12.10.2007 AND RS. 9,60,000 ON 12.5.2007 UNDER THE NARRATION SWEEP TRANSFER FROM 044010400770040. SIMI LARLY, CREDIT ENTRY ON 12.5.2007 AMOUNTING TO RS. 4,33,405 /- WAS A SWEEP TRANSFER FROM 0440104000723435. THESE SWEEP TRANSFER ENTRIES WERE OUT OF THE AMOUNT TRANSFERRED BY THE BANK TO THE SWEEP ACCOUNT ON FOLLOWING DATES :- DATE AMOUNT NARRATION GIVEN BY THE BANK 15.05.2006 5,00,000/ - 044010400723435 05.03.2007 21,60,000/- 044010400770040 THE SWEEP TRANSFER WAS OUT OF CREDIT BALANCE IN FDR OF ASSESSEE WITH THE BANK, MADE IN THE IMMEDIATELY PRE CEDING YEAR. IF THE FDR MADE IN EARLIER YEAR IS ENCASHED D URING THE YEAR, THE SAME IS IN THE NATURE OF CAPITAL RECEIPT DURING THE -: 6: - 6 YEAR UNDER CONSIDERATION AND THE SAME CANNOT BE TRE ATED AS INCOME OF ASSESSEE. THUS, CREDIT IN THE SAVING BANK OF ASSESSEE WAS OUT OF MATURITY VALUE OF FDR THROUGH S WEEP TRANSFER, WHICH CANNOT BE SAID TO BE INCOME OF ASSE SSEE FOR THE YEAR UNDER CONSIDERATION. 6. IN VIEW OF THE ABOVE FACTS, THE SOURCE OF CREDIT E NTRY IN THE BANK ACCOUNT WAS CLEARLY EXPLAINED FROM THE BAN K ACCOUNT ITSELF INDICATING SWEEP TRANSFER, THE ASSES SING OFFICER WAS NOT JUSTIFIED IN OBSERVING THAT CREDIT WAS NOT SATISFACTORILY EXPLAINED. IN THE INSTANT CASE BEFORE US, IT IS CLE AR FROM THE BANK STATEMENT PLACED ON RECORD THAT THERE WAS CRED IT ENTRY IN THE BANK ACCOUNT OUT OF SWEEP TRANSFER. THE SOURCES OF SWEEP TRANSFER WAS OUT OF AMOUNT FROM THE FDRS MADE BY TH E BANK IN THE IMMEDIATELY PRECEDING YEAR. THUS, THE ASSESS EE HAS EXPLAINED THE NATURE AND SOURCE OF THE CREDIT IN T HE BANK ACCOUNT. IT IS NOT THE CASE OF THE ASSESSING OFFICE R THAT FRESH AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT WHICH THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN. HOWEVER, IT IS A CASE OF MERE SWEEP TRANSFER ENTRY AND CLEAR NARRATION WAS GIVEN BY THE -: 7: - 7 BANK IN THE FORM OF SWEEP TRANSFER FROM 04401040077 0040 ON 12.10.2007 RS. 11 LAKHS, THE SWEEP TRANSFER FROM 044010400770040 ON 12.5.2007 RS. 9.60 LAKHS AND SWE EP TRANSFER FROM 044010400723435 ON 12.5.2007 RS. 4,33 ,405/-. IN VIEW OF THE DOCUMENTARY EVIDENCE PLACED ON RECOR D, WE DO NOT FIND ANY JUSTIFICATION FOR TREATING THE TRANSFE R ENTRY IN THE BANK ACCOUNT AS UNEXPLAINED, THEREBY MAKING ADDITIO N U/S 68 OF THE INCOME-TAX ACT, 1961. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH SEPTEMBER, 2012. CPU* 11129