Vipin Aggarwal, Sonepat V. ITO, Ward- 34(1), New Delhi

ITA 2571/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3790 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Income from undisclosed sources
• Section: 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.2571/DEL./2018 ASSESSMENT YEAR 2011-2012 SHRI VIPIN AGGARWAL, SONEPAT. HARYANA 131001. PAN AFWPA3076P C/O. RAVINDER K. GOEL & ASSOCIATES, 1002, PADMA TOWER-1, RAJINDRA PLACE, DELHI 110 008. VS. THE INCOME TAX OFFICER, WARD-34(1), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI RAJEEV SAXENA, AND SHRI SHYAM SUNDER ADVOCATES. FOR REVENUE : SHRI S.L. ANURAGI, SR. D.R. DATE OF HEARING : 12.02.2019 DATE OF PRONOUNCEMENT : 19.02.2019 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-12, NEW DELHI, DATED 30.03.2017, FOR THE A.Y. 2011-2012, CHALLENGING THE ADDITION OF RS.34,77,138/- ON ACCOUNT OF UNEXPLAINED INCOME FROM UNDISCLOSED SOURCES UNDER SECTION 68 OF THE I.T. ACT, 1961. 2 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME OF RS.6,02,750/-. FROM THE PERUSAL OF THE AIR INFORMATION IN THE CASE OF THE ASSESSEE, IT WAS OBSERVED THAT THE ASSESSEE HAS DEPOSITED CASH AGGREGATING TO MORE THAN RS.10 LAKHS IN THE BANK ACCOUNTS MAINTAINED WITH CANARA BANK, SONIPAT RS.21,01,000/- AND WITH ORIENTAL BANK OF COMMERCE, PRASHAT VIHAR, DELHI RS.22,07,100/-. COPIES OF THE BANK STATEMENTS WERE CALLED FOR UNDER SECTION 133(6) OF THE I.T. ACT, 1961 FROM THE CONCERNED BANK WHICH REVEALED THAT BOTH THE BANK ACCOUNTS PERTAINED TO THE ASSESSEE AND THE ACCOUNT OPENING FORMS WERE ALSO SINGED AND VERIFIED BY THE ASSESSEE. THE EXPLANATION OF ASSESSEE WAS CALLED FOR. THE WRITTEN REPLY OF THE ASSESSEE IS REPRODUCED IN THE ASSESSMENT ORDER IN WHICH THE ASSESSEE ADMITTED TO HAVE MAINTAINED THE ABOVE TWO BANK ACCOUNTS. THE ASSESSEE EXPLAINED THE SOURCE OF THE BANK DEPOSITS FROM CASH WITHDRAWAL FROM THESE BANKS AND ARE RE-DEPOSITED. IT WAS ALSO EXPLAINED THAT ASSESSEE HAS RECEIVED CASH FROM VIVEK STEEL (PROPRIETORSHIP CONCERN) AND THAT ASSESSEE ALSO SOLD PROPERTY FOR RS.7 LAKHS. THE 3 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. ASSESSEE, THEREFORE, EXPLAINED THAT CASH DEPOSIT IS EXPLAINED. THE A.O. HOWEVER, DID NOT ACCEPT THE CONTENTION OF ASSESSEE BECAUSE ONCE CASH WAS WITHDRAWN, THERE WERE NO NECESSITY TO MAKE DEPOSIT IN OTHER BANK. IT WAS ALSO NOTED THAT THERE IS NO NECESSITY FOR ASSESSEE TO MAKE WITHDRAWALS ONCE SUFFICIENT CASH IS AVAILABLE WITH THE ASSESSEE. IT WAS ALSO NOTED THAT PREPONDERANCE OF THE PROPERTIES WOULD SHOW THAT ON WITHDRAWING THE CASH OF SUCH HUGE AMOUNT, THERE MUST BE SOME PURPOSE FOR WITHDRAWAL OF THE AMOUNT. IT WAS ALSO EXPLAINED THAT ASSESSEE AVAILED LOAN FROM CITY FINANCIALS AGAINST MORTGAGE OF PROPERTY. THE ASSESSEE WAS KEEPING CASH FOR REPAYMENT OF LOAN FOR CLOSURE OF LOAN. THE ASSESSEE ALSO CLAIMED THE CASH PROCEEDS WERE RECEIVED FROM SALE OF THE CAR AT RS.4,25,000/- WHICH WERE DEPOSITED IN ORIENTAL BANK OF COMMERCE. THE A.O. CALLED FOR THE DOCUMENTS FOR THE SALE OF THE CAR AND IT WAS OBSERVED THAT CASH ON SALE OF THE CAR WAS RECEIVED LATER ON, BUT, THE BANK DEPOSITS ARE MADE ON EARLIER DATES. THE EXPLANATION OF ASSESSEE WAS REJECTED BY HOLDING NO PRUDENT BUSINESSMAN WOULD WITHDRAW CASH FOR REDEPOSIT. THE A.O. CONSIDERING THE 4 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. TOTALITY OF THE FACTS OF THE CASE, DID NOT ACCEPT THE EXPLANATION OF ASSESSEE REGARDING DEPOSIT OF THE CASH. THE A.O. ALSO NOTED THAT EXPENSES @ 2% WERE CONSIDERED REASONABLE FOR EARNING OF SUCH INCOME, THEREFORE, ADDITION WAS MADE OF RS.34,77,138 (RS.21,62,958 + RS.13,14,180/-). THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A). THE ASSESSEE REITERATED THE SAME SUBMISSIONS AND ALSO FILED CASH FLOW STATEMENT WHICH WAS FILED BEFORE A.O. TO EXPLAIN THE AVAILABILITY OF THE CASH WITH THE ASSESSEE WHICH WAS FROM WITHDRAWAL FROM THE SAME BANK ACCOUNT AS WELL AS FROM OTHER SOURCES AS EXPLAINED ABOVE. THE ASSESSEE RELIED UPON THE SOME DECISIONS OF THE TRIBUNAL IN SUPPORT OF THE CONTENTION THAT CASH HAVE BEEN EXPLAINED. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT THE EXPLANATION OF ASSESSEE AND NOTED THAT THERE IS A SUBSTANTIAL GAP BETWEEN THE WITHDRAWAL AND THE DEPOSITS AND ON THE SAME REASONING AS GIVEN BY THE A.O, CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF ASSESSEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS 5 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. REFERRED TO THE BANK STATEMENTS OF CANARA BANK AND ORIENTAL BANK OF COMMERCE. PB-17 IS AGREEMENT TO SELL. PB- 25 IS CASH RECEIPTS FOR SALE OF THE CAR. PB-27 IS DOCUMENTS OF PURCHASE OF CAR. HE HAS FILED COPY OF THE CASH FLOW STATEMENT ALSO WHICH IS SUPPORTED BY BANK STATEMENTS AND THE ABOVE DOCUMENTS TO SHOW THAT ASSESSEE WAS HAVING SUFFICIENT CASH WITH HIM TO MAKE DEPOSITS IN THE BANK ACCOUNTS. 4. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSEE FILED CASH FLOW STATEMENT BEFORE A.O. WHICH IS SUPPORTED BY BANK ENTRIES CONTAINED IN BOTH THE BANKS SHOWING WITHDRAWAL OF THE AMOUNT IN CASH ON DIFFERENT DATES. THE ASSESSEE ALSO FILED COPY OF THE AGREEMENT TO SELL AND CASH RECEIPTS ON SALE OF THE CAR. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO ALL THE DOCUMENTS IN THE PAPER BOOK AND REFERRED TO THE SAME ITEMS IN THE CASH FLOW STATEMENT PREPARED BY ASSESSEE. ALL THE ENTRIES IN THE CASH FLOW 6 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. STATEMENT HAVE NOT BEEN DOUBTED BY THE AUTHORITIES BELOW WHICH ARE SUPPORTED BY DOCUMENTS ON RECORD. THUS, ASSESSEE HAS AVAILABILITY OF CASH WITH HIM. THE A.O. REJECTED THE EXPLANATION OF ASSESSEE BECAUSE IT WAS OBSERVED THAT ONCE ASSESSEE HAS WITHDRAWN THE CASH, IT MUST BE USED SOMEWHERE ELSE BECAUSE OF SOME NECESSITY. THE LD. CIT(A) FOUND SOME SUBSTANTIAL GAIN BETWEEN THE WITHDRAWALS AND RE-DEPOSITS IN THE SAME BANK ACCOUNTS. THUS, ONUS WAS PUT UPON ASSESSEE TO PROVE THAT HE HAS NOT SPENT THE AMOUNT SOMEWHERE ON WITHDRAWAL OF THE AMOUNT. HOWEVER, THE AUTHORITIES BELOW NEVER DOUBTED THE DOCUMENTS ON RECORD AND THE CASH FLOW STATEMENT FILED BY ASSESSEE. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHIV CHARAN DAS VS. CIT, PUNJAB (1980) 126 ITR 263 (P&H) HELD AS UNDER : PARTIAL PARTITION TOOK PLACE ON MARCH 31,1951, OF AN HUF OF WHICH THE ASSESSEE WAS THE KARTA. IN OCTOBER, 1951, THE. HUF DECLARED A SUM OF RS. 20,000 UNDER THE VOLUNTARY DISCLOSURE SCHEME, WHICH WAS ACCEPTED BY THE DEPARTMENT. THEREFORE, THE MONEY WHICH WAS THE 7 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. SUBJECT-MATTER OF THE VOLUNTARY DISCLOSURE WAS KEPT WITH THE WIFE OF THE ASSESSSEE FROM 1951 UP TO HER DEATH IN MAY, 1956. AFTER HER DEATH THE AMOUNT WAS DEPOSITED ON OCTOBER 29, 1956, IN A BANK IN THE NAMES OF THE TWO UNMARRIED DAUGHTERS OF THE ASSESSEE (WHO HAD BY THEN ATTAINED MAJORITY), IN EQUAL SHARES. THE ASSESSEE EXPLAINED THAT THE TWO DEPOSITS WERE OUT OF THE SUM OF RS. 20,000 DECLARED UNDER THE VOLUNTARY DISCLOSURE SCHEME IN OCTOBER, 1951, BUT THE ITO REJECTED THE EXPLANATION AND ADDED THE SAME AS INCOME FROM UNDISCLOSED SOURCES. ON APPEAL, THE AAC HELD THAT THE SUM COULD BE RELATED TO THE AMOUNT VOLUNTARILY DISCLOSED EARLIER. ON FURTHER APPEAL, THE TRIBUNAL REVERSED THE ORDER OF THE AAC AND RESTORED THAT OF THE ITO. ON A REFERENCE : HELD, THAT SINCE BOTH THE DAUGHTERS HAD ATTAINED MAJORITY AT THE TIME WHEN THE MONEY WAS DEPOSITED IN THEIR NAMES, THE AMOUNT OF RS. 20,000 WAS NOT FOUND MENTIONED IN THE BOOKS OF THE ASSESSEE NOR THE SAME WAS FOUND TO HAVE BEEN DEPOSITED IN THE ACCOUNTS OF THE 8 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. ASSESSEE OR THAT OF THE HUF AND THERE WAS NOTHING ON THE RECORD TO SHOW THAT THE AMOUNT WAS UTILISED BY THE ASSESSEE OR THE HUF IN ANY OTHER MANNER THAN THE ONE WHICH WAS REPRESENTED BY THE ASSESSEE. THE ONUS LAY ON THE DEPARTMENT TO SHOW THAT THE EXPLANATION OFFERED BY THE ASSESSEE SHOULD NOT BE ACCEPTED. FURTHER, IF THE ASSESSEES EXPLANATION THAT THE AMOUNT REPRESENTED THE SAME AMOUNT AS DISCLOSED UNDER THE VOLUNTARY DISCLOSURE, SCHEME WAS NOT ACCEPTED, THE PRESUMPTION THAT THE AMOUNT WAS FROM UNDISCLOSED SOURCES COULD BE RAISED ONLY AGAINST THE MAJOR DAUGHTERS OF THE ASSESSEE AND NOT AGAINST THE ASSESSEE HIMSELF. THEREFORE, IT COULD NOT BE SAID THAT THE AMOUNT WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 5.1. IN THIS CASE THE DEPOSITS WERE MADE AFTER 4-5 YEARS AND IT WAS DIRECTED THAT REVENUE SHOULD SHOW THAT ASSESSEES EXPLANATION SHOULD NOT BE ACCEPTED, THEREFORE, ONUS UPON ASSESSEE WOULD NOT LAY TO PROVE THAT AMOUNT WITHDRAWN FROM THE BANK HAVE NOT BEEN SPENT ON SOME OTHER ITEMS. THE A.O. HAS NOT BROUGHT ANY EVIDENCE ON 9 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. RECORD THAT THE AMOUNT WITHDRAWN FROM THE BANKS HAVE BEEN SPENT BY ASSESSEE SOMEWHERE ELSE. THUS, THERE WAS NO JUSTIFICATION TO REJECT THE EXPLANATION OF ASSESSEE ON ASSUMPTION AND PRESUMPTIONS WITHOUT BRINGING ANY EVIDENCE ON RECORD. SINCE THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITED IN THE BANK ACCOUNTS THROUGH THE CASH FLOW STATEMENT, THEREFORE, THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION. FURTHER, THERE WAS NO JUSTIFICATION FOR THE AUTHORITIES BELOW TO CALCULATE 2% OF THE EXPENSES FOR EARNING OF THE INCOME. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 19 TH FEBRUARY, 2019 VBP/- 10 ITA.NO.2571/DEL./2018 SHRI VIPIN AGGARWAL, SONEPAT. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.