Mrs. Gurjeet Kaur, Ludhiana V. ITO, Ludhiana

ITA 257/CHANDI/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90164 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Peak credit
• Section: 133(6); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 256/CHD/2012 ASSESSMENT YEAR: 2008-09 S. RAJINDER SINGH, VS. THE ITO, WARD VI(2), LUDHIANA LUDHIANA PAN NO.ARYPS1069G & ITA NO. 257/CHD/2012 ASSESSMENT YEAR: 2008-09 MRS GURJEET KAUR, VS. THE ITO, WARD VI(1), LUDHIANA LUDHIANA PAN NO.ANXPK16555K (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SUDHIR SEHGAL & ASHOK GOYAL RESPONDENT BY : SHRI R.K. GUPTA DATE OF HEARING : 26.5.2015 DATE OF PRONOUNCEMENT : 05/06/2015 ORDER PER T.R.SOOD, A.M. BOTH THE APPEAL BY THE ASSESSEE ARE DIRECTED AGAINS T THE SEPARATE ORDERS EACH DATED 23/12/2011 PASSED BY THE CIT(A)-II, LUDHIANA. 2. SINCE IDENTICAL ISSUE HAS BEEN RAISED IN THESE A PPEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON A ND CONSOLIDATED ORDER. 3. FIRST WE SHALL DEAL WITH ITA NO. 256/CHD/2012 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 2 1. THAT THE LEARNED CIT(APPEALS)-II, LUDHIANA HAS E RRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION TO THE TUNE OF RS. 19272047/- OUT OF TOTAL CREDITS TO THE TUNE OF RS. 23118468/-. 2. THAT THE LEARNED CIT (APPEALS)-II, LUDHIANA HAS ERRED IN LAW AND FACTS IN REJECTING THE CLAIM OF THE ASSESSE E THAT THE LEARNED ASSESSING OFFICER HAS ACCEPTED PART OF THE BUSINESS AS DRAFT DISCOUNTING BUSINESS OUT OF THE TOTAL DEPOSIT S OF DRAFT AMOUNTING RS. 23118468/- AND NOT ACCEPTING THE BALA NCE AMOUNT. 3. THAT THE LEARNED CIT(APPEALS)-II, LUDHIANA HAS E RRED IN LAW AND FACTS IN NOT ACCEPTING THE CLAIM OF THE ASS ESSEE THAT HE HAS NOT DEPOSITED RS. 10 LACS OR MORE IN CASH IN HI S SAVING BANK ACCOUNT. THEREFORE, THE SELECTION OF THE CASE UNDER SCRUTINY THROUGH CASS BY AIR INFORMATION BASIS IS B AD IN LAW AND ASSESSMENT SO FRAMED IS NULL AND VOID. 4. THAT THE LEARNED CIT(APPEALS)-II, LUDHIANA HAS N OT DOUBTED AND REJECTED THE CLAIM OF ASSESSEE THAT HE DID THE DRAFT DISCOUNTING BUSINESS AND EARNING A COMMISSION OF 0. 30%, DESPITE THIS FACT THE ADDITION OF RS. 19272047/- FO R THE PARTS OF THE DRAFTS DEPOSITED SUSTAINED IS UNJUSTIFIED AND T O BE TREATED AS NULL AND VOID. 5. THAT THE LEARNED CIT(APPEALS)-II, LUDHIANA HAS N OT GIVEN ANY JUSTIFICATION FOR TREATING THE PART OF THE BUSI NESS AS UNEXPLAINED INVESTMENTS OR UNEXPLAINED MONEY. 6. THAT THE LEARNED CIT(APPEALS)-II, LUDHIANA HAS E RRED IN LAW AND FACTS IN SUSTAINING THE ADDITION MADE BY TH E LEARNED ASSESSING OFFICER WITHOUT ANY BASIS AND ON THE BASI S OF CONJECTURES AND SURMISES. 7. THAT THE LEARNED CIT(APPEALS)-II, LUDHIANA HAS E RRED IN REJECTING THE INCOME AND EXPENDITURE STATEMENT AS S UBMITTED BEFORE THE LEARNED ASSESSING OFFICER WITHOUT ANY BA SIS. 4. IN THIS APPEAL THOUGH VARIOUS GROUNDS HAVE BEEN RAISED BUT DURING THE COURSE OF HEARING IT IS SUBMITTED THAT THE ONLY DIS PUTE WAS REGARDING ADDITION OF RS. 1,92,72,047/- ON ACCOUNT OF CREDIT APPEARING IN THE BANK ACCOUNT. 5. AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSE SSMENT WAS TAKEN UNDER SCRUTINY AND ASSESSEE WAS REQUIRED TO FURNISHED DET AILS OF THE BANK ACCOUNTS IN HIS 3 NAME AS WELL AS NAMES OF HIS FAMILY MEMBERS. VIDE R EPLY DATED 24.6.2010 THE ASSESSEE SUBMITTED COPY OF THE STATEMENT OF HIS SAV ING BANK ACCOUNT NO. 30064414211 AND HIS WIFE GURJEET KAURS BANK ACCOUN T NO. 300064413965. BOTH THE ACCOUNTS WERE IN STATE BANK OF INDIA, GILL ROAD , LUDHIANA. THE ASSESSEE WAS AGAIN VIDE ORDER SHEET ENTRIES DATED 26.6.2010 AND 20.7.2010 WAS ASKED TO FURNISH DETAILS OF ANY OTHER BANK ACCOUNT. THE ASSESSEES V IDE REPLY DATED 20.7.2010 SUBMITTED AS UNDER:- THAT THE ASSESSEE DOES NOT HAVE ANY OTHER SAVING A CCOUNT EXCEPT THE ONE ALREADY SUBMITTED. COPY OF WIFES SA VING BANK ACCOUNT IS SUBMITTED. THE ASSESSING OFFICER NOTED THAT AIR INFORMATION WA S AVAILABLE THAT ASSESSEE WAS ALSO MAINTAINING A BANK ACCOUNT WITH DENA BANK WITH MATA RANI CHOWK BRANCH, LUDHIANA. INFORMATION REGARDING THIS WAS NOT FURNI SHED IN THE RETURN OF INCOME AND ASSESSEE HAD FAILED TO DISCLOSE THIS ACCOUNT DE SPITE VARIOUS OPPORTUNITIES. THEREFORE, INFORMATION WAS OBTAINED U/S 133(6) FROM DENA BANK WHICH REVEALED THAT ASSESSEE WAS MAINTAINING TWO BANK ACCOUNTS BEA RING NO. CAGEN 4701 IN THE NAME OF M/S ISHU TRADING COMPANY PROP. SHRI RAJINDE R SINGH AND ANOTHER ACCOUNT NO. 146098 IN THE NAME OF SHRI. RAJINDER SINGH. IT WAS FURTHER NOTED FORM THE INFORMATION THAT IN THE CURRENT ACCOUNT NO. CAGEN47 01, THE ASSESSEE HAS DEPOSITED RS. 1,92,72,047/- IN THE FORM OF DEMAND D RAFTS. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS WILLFULLY TRIED TO CONCEAL THIS INFORMATION RELATING TO THE TRANSACTION MADE THROUGH BANK ACCOUNT NO. CAGEN 470 1 WITH DENA BANK. ASSESSEE WAS AGAIN ASKED TO EXPLAIN THE NATURE OF E NTRIES IN THIS ACCOUNT. IN REPLY DATED 14.10.2010 IT WAS SUBMITTED AS UNDER:- WITH REFERENCE TO YOUR QUERIES WE SUBMIT OUR REPLY AS UNDER:- 1. THAT THE ASSESSEE HAS CARRIED OUT THE BUSINESS OF D RAFTS DISCOUNTING FOR A SMALL PERIOD OF ABOUT TWO MONTHS DURING THE FINANCIAL YEAR 2007-08. DURING THAT PERIOD HE HAD O PENED A CURRENT ACCOUNT IN THE NAME OF M/S ISHU TRADING CO. AND SAVING ACCOUNT IN HIS NAME AND IN THE NAME OF HIS WIFE SMT . GURJEET KAUR WITH THE DENA BANK, BHADAUR HOUSE, LUDHIANA. C OPIES ARE ENCLOSED HEREWITH. 4 2. THAT ALL THE DISCOUNTED DRAFTS WERE DEPOSITED IN TH E CURRENT ACCOUNT. 3. THAT THE ASSESSEE HAD WITHDRAWN THE AMOUNT IN CASH OR TRANSFERRED THE SSME TO HIS SAVING ACCOUNT OR TO HI S WIFES ACCOUNT TO SAVE THE BANKING CASH TRANSACTION TAX. 4. THAT THE ASSESSEE SUFFERED NET LOSS IN THE BUSINESS CARRIED OUT FOR A SMALL PERIOD AND ACCORDINGLY STOPPED THE SAME . 5. THAT DURING THE PERIOD THE ASSESSEE FINANCIAL CONDI TIONAL WAS NOT WELL AND TO MEET THE FAMILY NEEDS BY EARNING SO ME EXTRA INCOME HE STARTED THIS BUSINESS. 6. SIR KEEPING IN VIEW THE FACTS OF THE CASE, WE REQUE ST YOU TO ACCEPT OUR PLEADING AND PRONOUNS THE ORDER ACCORDIN GLY. 6. THEREAFTER THE ASSESSEE WAS ASKED TO APPEAR IN P ERSON AND HIS STATEMENT WAS RECORDED. IN THE STATEMENT, ASSESSEE REFUSED TO DIS CLOSE THE NAMES OF PARTIES FROM WHOM THE DRAFTS WERE RECEIVED. HE ALSO REFUSED TO P RODUCE ANY OF THE 10 PERSONS FROM WHOM SAID DRAFTS WERE SAID TO HAVE BEEN RECEIV ED FOR THE PURPOSE OF DISCOUNTING SUCH DRAFTS. THE ASSESSING OFFICER NOTE D THAT ONUS WAS CLEARLY ON THE ASSESSEE TO EXPLAIN THE NATURE OF EACH AND EVERY EN TRY APPEARING IN HIS BANK ACCOUNT. HE OBSERVED THAT BY SIMPLY SAYING THAT HE WAS DOING DRAFT DISCOUNTING BUSINESS ON BEHALF OF THE OTHER PERSONS WAS NOT ENO UGH AND HE WAS REQUIRED TO SUBSTANTIATE THE GENUINENESS OF THESE FACTS MY GIVI NG THE NAMES AND ADDRESSES OF SUCH PERSONS OR BY PRODUCING PERSONS FROM WHOM SUC H DRAFTS WERE RECEIVED. ANOTHER SHOW CAUSE NOTICE WAS ISSUED THAT WHY SUCH CREDITS APPEARING IN THE BANK ACCOUNT SHOULD NOT BE TREATED AS UNDISCLOSED MONEY AND ADDED TO HIS MONEY. THE ASSESSEE FILED DETAILED REPLY VIDE LETTER DATED 22. 12.2010, THE CONTENTS OF THIS REPLY HAS BEEN REPRODUCED BY THE ASSESSING OFFICER AT PAGES 6 TO 13. 7. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE R EPLY BECAUSE IN HIS OPINION TRANSACTIONS COULD NOT BE ACCEPTED SIMPLY BECAUSE THE AMOUNT HAS COME BY WAY OF CHEQUES AND DRAFTS UNLESS THE RECIPIENT PROVE THE GENUINENESS OF THE SAME. THOUGH THE ASSESSEE HAS STATED THAT HE WAS DOING TH E BUSINESS OF DRAFT DISCOUNTING 5 ON BEHALF OF THE OTHER PERSONS BUT HE HAS NOT PROVI DED THE NAMES AND ADDRESSED OF SUCH PERSONS FORM WHOM DRAFTS HAVE BEEN RECEIVED AN D TO WHOM CASH WAS PAID, THEREFORE, THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE SOURCES OF THE DRAFTS. IN THIS BACKGROUND, A SUM OF RS. 1,92,72,047/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 8. ON APPEAL, THE SUBMISSIONS MADE BEFORE THE ASSES SING OFFICER WERE REITERATED AND A DETAILED REPLY WAS FILED WHICH HAS BEEN EXTRACTED BY LD. CIT(A) IN PARA 4 OF THE IMPUGNED ORDER. THE LD. CIT(A) ALSO D ID NOT FIND FORCE IN THESE SUBMISSIONS AND THE ISSUE WAS DECIDED AGAINST THE A SSESSEE VIDE PARAS 7 TO 7.2 WHICH ARE AS UNDER:- 7. 1 HAVE CONSIDERED THE FINDINGS GIVEN BY THE A O IN THE ORDER AND IN THE REMAND REPORT AND ALSO THE DETAILE D SUBMISSIONS OF THE ASSESSEE. IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS MAINTAINING A BANK ACCOUNT WITH DENA B ANK, MATA RANI CHOWK, LUDHIANA, WHERE THERE HAS BEEN VARIOUS DEPOSITS AND WITHDRAWALS OF CASH AND THE TRANSFER OF AMOUNT BY WAY OF CHEQUES FROM 27.11.2007 TO 31.03.2008. AS NOTICED I N THE ASSESSMENT ORDER, ASSESSEE HAS ADMITTED THE OWNERSH IP OF THE ABOVE ACCOUNT. SINCE THE AO RECEIVED AIR INFORMATIO N FROM THE BANK AND, ACCORDINGLY, THE CASE WAS SELECTED FOR SC RUTINY UNDER CASS, THEREFORE, NO FAULT COULD BE FOUND FOR RECEIP T OF INFORMATION FROM THE BANK AND SELECTION OF THE CASE FOR SCRUTINY. 7.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS BE FORE THE AO AND THE APPELLATE PROCEEDINGS BEFORE ME, IT HAS BEEN CONTENDED THAT ASSESSEE WAS DOING THE BUSINESS OF D RAFT DISCOUNTING ON BEHALF OF OTHER PARTIES AN COMMISSIO N BASIS AND THE BANK DRAFTS WERE DEPOSITED IN THE BANK ACCOUNT, AS OBTAINED FROM DIFFERENT PARTIES AND THERE AFTER THE AMOUNT W AS WITHDRAWN FROM THE BANK ACCOUNTS AND THE CASH WAS PAID TO THE PARTIES FROM WHOM THE DRAFTS WERE TAKEN. IN THE ABOVE PROCE SS, IT WAS CONTENDED THAT THE ASSESSEE WAS EARNING COMMISSION INCOME OF 0.30%. IT WAS ALSO CONTENDED THAT TOTAL DEPOSITS OF DRAFTS WERE TO THE TUNE OF RS. 2,31,18,468/- IN DENA BUNK, MATA RANI CHOWK, LUDHIANA IN THE NAME OF' ISSUE TRADING CO., ' AND AS 6 OUT OF THIS BANK ACCOUNT, CASH AMOUNTING TO RS. 39, 06,000/- - WAS WITHDRAWN CASH AND PAID TO THE PARTIES AND PART OF THE AMOUNT WAS PUT TO BANK TRANSFER AMOUNTING TO RS. 1, 92,72,047/- IN TWO ACCOUNTS SUCH AS SB A/C NO. 14608 IN THE NAM E OF SH. RAJINDER SINGH AND IN A/C NO. 14616 IN THE NAME OF MRS. GURJEET KAUR SINCE, THE DRAFT DISCOUNTED BUSINESS W AS ACCEPTED AS BUSINESS TRANSACTION PARTIALLY, THEREFORE, THE T OTAL AMOUNT DEPOSITED-BY WAY OF DRAFTS WAS THE BUSINESS OF ASS ESSEE. IN VIEW OF THE ABOVE AND ON THE BASIS OF THE INCOME AN D EXPENDITURE ACCOUNT PRODUCED BEFORE THE A/O, AND DU RING THE APPELLATE PROCEEDINGS BEFORE ME, IT WAS PRAYED THAT THE TOTAL TRANSACTIONS WERE TREATED AS THE BUSINESS OF ASSESS EE AND IT WAS PRAYED THAT THE COMMISSION AT THE RATE OF 0.30% MAY BE APPLIED AND NOT TOTAL DEPOSITS MEANING THEREBY THE TOTAL AM OUNTS OF DRAFTS OBTAINED ON BEHALF OF OTHER PARTIES. IT HAS BEEN CONTENTED THAT THE SEQUENCE AND MODE OF TRANSACTION PLACE THE CASE OF THE ASSESSEE THAT AS AND WHEN THERE WERE DEPOSITS OF DR AFTS PURCHASED FROM OTHER PARTIES, AND WHICH WERE, INFAC T, CLAIMED TO BE THE PROCEEDS OF OTHER PARTIES EFFECTED THROUG H THE ASSESSEE, THE AMOUNT WAS WITHDRAWN IMMEDIATELY FOR MAKING THE PAYMENT TO THE PARTIES, FROM WHOM THE DRAFTS WERE T AKEN 7.2 1 HAVE GONE THROUGH THE ABOVE ARGUMENT OF THE ASSESSEE, BUT FIND THAT THE APPELLANT HAS NOT BEEN ABLE TO PR OVE THE CONTENTIONS AS PUT FORTH BY THE ASSESSEE THAT HE WA S EARNING THE COMMISSION BY DOING THE DRAFT DISCOUNTING BUSINESS AND EARRING 0.30% COMMISSION THEREON. SINCE, THE ASSESSEE HAD T AILED TO DISCHARGE THE ONUS UPON HIM TO PROVE THE FACT THAT DEPOSITS IN THE BANK WERE IN RESPECT OF DRAFTS DISCOUNTING BUSI NESS, THE COMMISSION OF THE ASSESSEE WITH REGARD TO EARNING O F THE COMMISSION CANNOT BE ACCEPTED. PRIMARILY IT IS THE DUTY OF THE ASSESSEE TO PROVE THE SOURCES OF SUCH DEPOSITS IN H IS BANK ACCOUNT. HE CANNOT SHILL THIS BURDEN ON OTHERS. MOR E SO, THERE IS NOTHING ON RECORD TO PROVE THAT OTHER PERSONS TO WHOM HE ALLEGES THAT THE DEPOSIT BELONGS HAVE ACCEPTED/SURR ENDERED SUCH DEPOSITS IN THEIR HANDS AND HAVE PAID TAX THEREON. THERE IS MAXIM IN LAW THAT CONTENTS OF DOCUMENTS ARC PROVED TO BE TRUE UNLESS PROVED OTHERWISE. EVEN IF HE IS IN COLLUSION /COLLABORATION IN DEFRAUDING REVENUE, HE HAS TO BEAR THE CONSEQUEN CE. IT IS NOT 7 THAT FOR THE UNEXPLAINED .INCOME REVENUE SUFFERS TH E TAX LOSS. THEREFORE, THE CONTENTIONS RAISED BY THE APPELLANT ARE DISMISSED AND RELEVANT GROUNDS OF APPEAL ALSO. 9. BEFORE US LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE WAS DOING BUSINESS OF DRAFT DISCOUNTING ON WHICH ASSESSEE WAS GETTING SMALL COMMISSION. HE REFERRED TO THE SUMMARY OF THE VARIOUS BANK ACCOUNT S WHICH IS GIVEN AT PAGE 1 AND POINTED OUT ONLY RS. 60,000/- WAS DEPOSITED IN CASH AND ANOTHER AMOUNT OF RS. 2,31,18,468/- WAS DEPOSITED THROUGH DEMAND DRAFTS. OUT OF THIS, RS. 39,06,500/- WAS WITHDRAWN IN CASH FOR DISTRIBUTION AMONG THE PE RSONS WHO HAS GIVEN THE DRAFTS TO THE ASSESSEE. ANOTHER AMOUNT OF RS. 1,25,40,000 /- WAS TRANSFERRED TO ACCOUNT NO. 14608 FROM WHERE THE AMOUNT WAS WITHDRAWN AND DISTRIBUTED TO VARIOUS DRAFT HOLDERS. HE THEN REFERRED TO DETAILED ACCOUNT SUMMA RY PLACED AT PAGES 2 & 3 OF THE PAPER BOOK AND POINTED OUT THAT MAXIMUM CREDIT AVAI LABLE WAS RS. 5,85,305/-. HOWEVER, WHEN SOME OBJECTIONS WERE RAISED, HE CATEG ORICALLY STATED THAT HE IS NOT PRESSING THE CONTENTION OF PEAK CREDIT THEORY IN TH IS CASE. 10. HE FURTHER CONTENDED THAT THE AMOUNT WERE RECEI VED THROUGH DRAFTS AND NOT BY CASH, THEREFORE, ONCE IT WAS ESTABLISHED THAT AS SESSEE WAS DOING DRAFT DISCOUNTING BUSINESS, THEN THE ASSESSING OFFICER C OULD HAVE EASILY OBTAINED THE INFORMATION BY MAKING CORRESPONDENCE WITH THE BANK WHO WERE GIVEN SUCH DRAFTS. HE ALSO CONTENDED THAT THERE WAS NO REASON TO DEPOS IT THE DEMAND DRAFTS AND THEN WITHDRAW THE MONEY IN CASH WHICH CLEARLY SHOWS THAT ASSESSEE WAS DOING DRAFT DISCOUNTING BUSINESS. 11. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER AND CIT(A) AND SUBMITTED THAT ONUS WAS ONLY ON THE ASSESSEE TO GIVE THE NAMES AND ADDRESSES OF THE DRAFT HOLDERS. IN THIS REGARD, HE POINTED OUT THAT ANSWERS TO QUESTION NOS. 8 & 9 OF THE ASSESSEE STATEMENT GIVEN BEFORE THE ASSESSING OFFICER WHEREIN ASSESSEE HAS CLEARLY STATED THAT HE DOES NO T KNOW ANYTHING REGARDING THESE 8 PARTIES, WHICH CLEARLY SHOWS THAT ASSESSEE WAS NOT DOING ANY DRAFT DISCOUNTING BUSINESS. IN ANY CASE THIS ISSUE IS SQUARELY COVERE D BY THE DECISION OF CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF SUDHIR KUMAR S HARMA V ITO IN ITA NO. 713/CHD/2010 AND OTHERS. IN THIS CASE THE TRIBUNAL HAS PLACED RELIANCE ON THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CAS E OF BHAIYALAL SHAYAM BEHARI V CIT 276 ITR 36 (ALL.) WHICH WAS RELIED BY REVENU E IN THAT CASE. THIS DECISION HAS BEEN CONFIRMED BY THE HON'BLE HIGH COURT OF PUN JAB & HARYANA REPORTED AT 46 TAXMAN.COM 340 . THE LD. DR HAS FILED COPIES OF THE DECISION OF TR IBUNAL AS WELL AS HIGH COURT WHICH ARE PLACED ON RECORD. 12. IN THE REJOINDER LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT THERE WAS IMPORTANT DISTINCTION BETWEEN THE ASSESSEES CASE A ND CASE OF SHRI SUDHIR KUMAR SHARMA BECAUSE IN THE CASE OF SHRI SUDHIR KUMAR SHA RMA FIRST CASH WAS RECEIVED WHICH WAS DEPOSITED IN THE BANK AND THEN CHEQUES WE RE ISSUED TO THE VARIOUS PARTIES WHEREAS IN THE PRESENT CASE THE ASSESSEE HA S DEPOSITED DEMAND DRAFT AND THEN LATER ON CASH HAS BEEN WITHDRAWN. 13. WE HAVE CONSIDERING THE RIVAL SUBMISSIONS CAREF ULLY, CASE LAWS AND JUDGMENTS CITED BY THE PARTIES AS WELL AS RELEVANT MATERIAL ON RECORD. IN THIS CASE INITIALLY ASSESSEE SUBMITTED THAT HE WAS MAINTAININ G ONE BANK ACCOUNT IN HIS NAME AND ONE MORE BANK ACCOUNT IN THE NAME OF HIS WIFE I N STATE BANK OF INDIA AND DESPITE VARIOUS OPPORTUNITIES, THE ASSESSEE MAINTAI NED THAT STAND. IT IS ONLY AFTER THAT ASSESSEE WAS CONFRONTED WITH THE INFORMATION O BTAINED FROM DENA BANK, THAT HE WAS MAINTAINING ANOTHER CURRENT ACCOUNT NO. CAGE N 4701 IN THE NAME OF M/S ISHU TRADING COMPANY AND ANOTHER SAVING BANK ACCOUN T NO. 14608 (IN HIS OWN NAME I.E. SHRI RAJINDER SINGH) HE CAME OUT WITH THE THEORY THAT ASSESSEE WAS DOING DRAFT DISCOUNTING BUSINESS. AT THIS STAGE, TH E ASSESSING OFFICER RECORDED THE ASSESSEES STATEMENT AND FEW ANSWERS TO THE QUESTIO NS WHICH ARE VERY RELEVANT ARE REPRODUCED BELOW:- 9 8. IN REPLY TO EARLIER QUESTION YOU HAVE STATED THAT YOU WERE DEPOSITING D.D. OF VARIOUS PARTIES IN YOUR BANK ACC OUNTS. PLEASE GIVE NAME AND PAN OF ANY 10 PERSON OR PARTIE S / CONCERNS WHOSE BANKS DRAFT YOU WERE DEPOSITED IN BA NK ACCOUNT AND WITHDRAWING CASH FOR THEM. ANS. I DO NOT KNOW ANYTHING ABOUT IT. I CANNOT PROD UCE OR NAME ANY SUCH PARTIES. 9. PLEASE EXPLAIN HOW YOU WERE GETTING BANK DRAFTS IF YOU ARE NOT ABLE TO EXPLAIN WHOSE BANK DRAFTS ARE THERE . ANS. I CANNOT SAY ANYTHING REGARDING THIS I WAS REC EIVING THESE DRAFTS FROM MY FRIENDS AND I WAS GETTING COMMISSION OF RS. 30 PER THOUSANDS. 14. THE ANSWERS TO THE ABOVE QUESTIONS CLEARLY SHOW S THAT ASSESSEE HAS SIMPLY STATED THAT HE DOES NOT KNOW ANYTHING ABOUT THIS I. E. SOURCE OF THE DEPOSITS AND SHOWED HIS INABILITY TO PRODUCE ANY OF THE 10 PERSO NS AS DESIRED BY THE ASSESSING OFFICER. IT IS SETTLED LAW THAT WHENEVER A DEPOSI T IS MADE THE BURDEN IS ALWAYS ON THE ASSESSEE TO SHOW THE SOURCES OF SUCH DEPOSITS. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE CASE OF SUDHIR KUMAR SHARMA VS ITO (SUPRA) WHERE THE ASSESSEE HAS DEPOSITED CERTAIN CASH IN HIS BANK ACCOUNT AND LATER ON GIVEN CHEQEUS TO VARIOUS PARTIES. THEREFORE, THE TRIBUNAL ON THESE F ACTS ULTIMATELY HELD THAT BURDEN WAS ON THE ASSESSEE TO PROVE THE GENUINENESS OF SOU RCES OF THE DEPOSITS. WHEN THE MATTER TRAVELLED TO THE HON'BLE HIGH COURT THE SAME WAS ADJUDICATED IN ITA NO. 122 OF 2014 VIDE ORDER DATED MAY 12, 2014. THE HEAD NOTE OF THIS DECISION READS AS UNDER:- SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CRED ITS (CASH DEPOSITS) - ASSESSMENT YEAR 2007-08 - DURING ASSESS MENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSE E HAD DEPOSITED HUGE AMOUNT OF CASH IN HIS BANK ACCOUNT - IN VIEW OF FAILURE OF ASSESSEE TO EXPLAIN SOURCE OF SAID DEPOS ITS, ASSESSING OFFICER ADDED AMOUNT SO DEPOSITED TO ASSESSEE'S TAX ABLE INCOME BY INVOKING PROVISIONS OF SECTION 68 -TRIBUNAL CONF IRMED SAID ADDITION - WHETHER SINCE VARIOUS AMOUNTS IN CASH WE RE DEPOSITED IN BANK ACCOUNT OF ASSESSEE, ONUS WAS UPO N ASSESSEE TO EXPLAIN NATURE AND SOURCE OF SAID CASH DEPOSITS - HELD, YES - WHETHER SINCE ASSESSEE FAILED TO GIVE LIST OF PERSO NS WHO 10 ADVANCED CASH TO HIM ALONG WITH THEIR CONFIRMATION IN RESPECT OF SAID CASH CREDITS, IMPUGNED ADDITION WAS TO BE C ONFIRMED - HELD, YES [PARA 9] [IN FAVOUR OF REVENUE] THEREFORE, CLEARLY THE BURDEN WAS ON THE ASSESSEE B UT THE ASSESSEE HAS SHOWN HIS INABILITY TO GIVE NAMES AND ADDRESSES OF SUCH PERSO NS OR PRODUCED THE PERSONS FROM WHOM SUCH DRAFTS WERE RECEIVED. 15. THE LD. COUNSEL HAD TRIED TO DISTINGUISH THIS D ECISION BY STATING THAT IN THE PRESENT CASE IT WAS DRAFT WHICH WAS DEPOSITED AND L ATER ON CASH WAS WITHDRAWN. IN OUR OPINION, IT DOES NOT MATTER WHETHER CASH IS DEP OSITED OR DRAFT IS DEPOSITED, ONUS REMAINS THE SAME AND ASSESSEE SHOULD HAVE COME FORWARD WITH THE NAMES OF PERSONS WHO HAD GIVEN DRAFTS. THERE IS NO FORCE IN THE CONTENTION THAT REVENUE SHOULD HAVE MADE FURTHER ENQUIRIES AS THERE IS NO B URDEN CASTED ON THE REVENUE. WE FURTHER FIND NO FORCE IN THE CONTENTION THAT WHY ANY ASSESSEE WOULD FIRST DEPOSIT THE DRAFT IN BANK ACCOUNT AND THEN WITHDRAW THE CASH. THAT INFORMATION IS PURELY IN THE DOMAIN OF THE ASSESSEE AND ONLY HE CO ULD HAVE GIVEN SUCH INFORMATION. IF HE FAILS TO GIVE SUCH INFORMATION T HEN THE REVENUE HAS EVERY RIGHT TO TAKE ADVERSE INFERENCE. THIS PROPOSITION HAVE BE EN CONFIRMED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. BEST AND CO. ( PRIVATE) LTD. 60 ITR 11 (SC). IN THIS REGARD, FOLLOWING OBSERVATION GIVEN IN THE HEAD NOTE IS RELEVANT :- THE SUPREME COURT DID NOT LAY DOWN IN COMMISSIONER OF INCOME-TAX V. CHARI AND CHARI LTD. [1965] 57 I.T.R. 400 (S.C.) THAT THE BURDEN ON THE REVENUE TO ESTABLISH THAT AN INCOME WAS TAXABLE WAS IMMUTABLE IN THE SENSE THAT IT NEVER SH IFTED TO THE ASSESSEE. WHEN SUFFICIENT EVIDENCE, EITHER DIRECT O R CIRCUMSTANTIAL, IN RESPECT IF ITS CONTENTION WAS DI SCLOSED BY THE REVENUE, AN ADVERSE INFERENCE COULD BE DRAWN AGAINS T THE ASSESSEE IF HE FAILED TO PUT BEFORE THE DEPARTMENT MATERIAL WHICH WAS IN HIS EXCLUSIVE POSSESSION. WHILE THE INCOME-TAX AUTHORITIES HAVE TO GATHER THE RELEVANT MATERIAL TO ESTABLISH THAT THE COMPENSATION GIVEN F OR THE LOSS OF AGENCY WAS A TAXABLE INCOME, ADVERSE INFERENCE C OULD BE DRAWN AGAINST THE ASSESSEE IF HE HAD SUPPRESSED DOC UMENTS 11 AND EVIDENCE, WHICH WERE EXCLUSIVELY WITHIN HIS KNO WLEDGE OR KEEPING. THEREFORE, WE FIND NOTHING WRONG IN THE ORDER OF LD . CIT(A) AND WE CONFIRM THE SAME. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ITA NO. 257/CHD/2012 17. IN THIS APPEAL IDENTICAL GROUNDS HAVE BEEN RAIS ED. THE ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF DEPOSITS MADE IN HER AC COUNT. THE FACTS AND CONTENTIONS IN THIS CASE ARE SIMILAR EXCEPT THAT ON E ADDITIONAL CONTENTION WAS RAISED THAT MONEY INTO THE ACCOUNT OF SMT. GURJEET KAUR HAS BEEN DEPOSITED OUT OF FUNDS TRANSFERRED FROM HUSBANDS ACCOUNT. 18. IN THIS CASE ALSO THE STATEMENT OF SMT. GURJEET KAUR I.E. ASSESSEE WAS RECORDED AND SHE ALSO STATED IN REPLY TO QUESTION N OS. 12 & 13 THAT SHE DOES NOT KNOW ANYTHING ABOUT THE ACCOUNTS AND DEPOSITS. THE RELEVANT ANSWERS TO THE QUESTION ARE AS UNDER:- 12. DURING THE COURSE OF ASST. PROCEEDINGS, YOU HAVE FILED ONE LETTER FROM (CERTIFICATE) GIGABITE NETWORK THAT YOU WERE W ORKING THERE AS FIELD SUPERVISOR THEN AND GETTING 10000/-P.M. AS CO NTRACT CHARGES. BUT THE SOME HAS NOT BEEN DISCLOSED IN THE RETURN FILED BY YOU. PLEASE EXPLAIN? ANS. THE INCOME RECEIVED FROM GIGABITE NETWORK BEIN G CONTRACT CHARGES HAS BEEN SHOWN UNDER THE HEAD BUSINESS INCO ME. 13. DO YOU WANT TO SAY ANYTHING ELSE? ANS. NO I DO NOT WANT TO SAY ANY THING. THE ASSESSEE HAS STATED IN HIS STATEMENT THAT HE WA S DOING BUSINESS OF DRAFT DISCOUNTING DURING THE YEAR UNDER CONSIDERATI ON AND GETTING COMMISSION, BUT WHEN ASKED TO PRODUCE THE PERSONS F ROM WHOM DRAFTS HAVE BEEN RECEIVED AND TO WHOM CASH HAS BEEN PAID H E WAS UNABLE TO 12 DO SO. ONUS IS ON THE ASSESSEE TO EXPLAIN THE NATUR E AND SOURCE OF EACH AND EVERY ENTRY APPEARING IN HIS BANK ACCOUNT. SIMP LY SAYING THAT HE WAS DOING DRAFT DISCOUNTING BUSINESS ON BEHALF OF O THER PERSONS IS NOT ENOUGH, HE HAS NOT SUBSTANTIATED THE GENUINENESS OF THIS FACT BY GIVING THE NAMES, ADDRESSES OR BY PRODUCING THE PERSONS FR OM WHOM THE DRAFTS HAVE BEEN RECEIVED AND TO WHOM CASH HAS BEEN PAID. ANY TRANSACTION CANNOT BE ACCEPTED GENUINE BECAUSE THE AMOUNT HAS C OME BY WAY OF A CHEQUE OR DRAFT UNLESS THE RECIPIENT PROVES THE GEN UINENESS OF THE SAME. 19. HOWEVER, WE FIND FORCE IN THE ALTERNATIVE SUBM ISSION THAT THE AMOUNT HAVE BEEN TRANSFERRED FROM THE HUSBAND,S ACCOUNT IN WHOS E CASE ADDITION HAS ALREADY BEEN MADE IN THE CASE OF SHRI RAJINDER SINGH. WE H AVE ALREADY CONFIRMED THE ADDITION IN THE CASE OF SHRI RAJINDER SINGH I.E. H USBAND OF THE ASSESSEE, THEREFORE, THE MONEY DEPOSITED IN HIS ACCOUNT NOW CAN BE SAID TO BE EXPLAINED AND THERE IF ADDITION IS AGAIN MADE IN THE HANDS OF THIS ASSESSE E I.E. SMT. GURJEET KAUR THEN THAT WOULD AMOUNT TO DOUBLE ADDITION. HOWEVER, THI S CONTENTION WAS NOT BEFORE THE ASSESSING OFFICER. THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THIS MATTER BACK TO THE FILE OF ASSESSING OFFICER T O VERIFY IF MONEY HAS BEEN TRANSFERRED FROM HUSBANDS ACCOUNT THEN NO ADDITION SHOULD BE MADE OTHERWISE THE ISSUE WILL BE DECIDED IN ACCORDANCE WITH LAW. 20. IN THE RESULT APPEAL IN ITA NO. 256/CHD/2012 IS DISMISSED WHEREAS ITA NO. 257/CHD/2012 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05/06/2015. SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 5 TH JUNE, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 13