Vikram Capoor, Lucknow V. Income Tax Officer, Lucknow

ITA 260/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4634 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Peak credit

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.260/LKW/2015 ASSESSMENT YEAR 2010-11 INCOME TAX OFFICER, WARD-2(3), LUCKNOW- 226001 VS. VIKRAM CAPOOR 52, HAZRATGANJ, LUCKNOW 226001 PAN ABGPC 4422 P (RESPONDENT) (APPELLANT) SHRI J.J. MEHROTRA, CA APPELLANT BY SHRI AMIT NIGAM , DR RESPONDENT BY 23 /0 2 /2016 DATE OF HEARING 17/03/2016 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-I, LUCKNOW, INTERALIA ON FOLLOWING GROUNDS :- . 1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE ID. CIT(A) IS NOT JUSTIFIED IN HOLDING TH AT THE INTEREST PAID OF RS. 1,08,210/- ON THE OD ACCOUNT CANNOT BE ALLOWED AS DEDUCTION U/S 57(111) OF THE INCOME TAX ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE ID. CIT(A) IS NOT JUSTIFIED IN CONFIRMI NG THE ADDITION OF RG 28,99/743/~ MADE BY THE ID. ASSESSING OFFIC ER BY TREATING THE CASH DEPOSIT IN THE BANK ACCOUNT OF THE APPELLANT AS UNEXPLAINED. 3. THAT THE ID. CIT(A) HAS ERRED IN LAW AND ON FACT S AND CIRCUMSTANCES OF THE CASE IN NOT CONSIDERING THE EX PLANATION AND EVIDENCES FILED BY THE APPELLANT EXPLAINING THE SOURCE OF 2 CASH DEPOSIT AND IS WRONG IN REJECTING THE SAME IN A CURSORY MANNER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD ALTER, A MEND OR WITHDRAW ANY OR ALL THE GROUNDS OF APPEAL ON OR B EFORE THE DATE OF HEARING. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE HAS OPTED NOT TO PRESS GROUND NO.1. ACCORDINGLY GROUND NO.1 IS DI SMISSED BEING NOT PRESSED. 3. SO FAR AS GROUND NO.2 IS CONCERNED, WE FIND THA T DURING THE COURSE OF ASSESSMENT PROCEEDING, ASSESSING OFFICER NOTED THAT HUGE DEPOSITS IN CASH HAVE BEEN MADE BY THE ASSESSEE IN DIFFERENT BANK ACCOUNT S I.E. AXIS BANK, HDFC BANK, IDBI BANK, AS PER INFORMATION AVAILABLE WITH THE DEPARTMENT. ACCORDINGLY, SHOW CAUSE NOTICE WAS ISSUED AND IN RESPONSE THERET O, THE ASSESSEE HAS SUBMITTED A WORKING OF THE PEAK CREDIT OF RS.30,95, 843/- AS ON 23.03.2010 BASED ON THE DEPOSITS & WITHDRAWALS MADE BY THE ASS ESSEE IN VARIOUS BANKS IN VARIOUS ACCOUNTS. IT WAS FURTHER CONTENDED ON BEHAL F OF THE ASSESSEE THAT THE ASSESSEE HAS USED RS.12.00 LAKH THE SURPLUS CASH I N HAND AVAILABLE WITH THE FIRM M/S CAPOORS HOTEL & RESTAURANT IN WHICH HE WAS PART NER AND FURTHER IT WAS ALSO STATED THAT HE RECEIVED RS.5.00 LAKH IN CASH ON 20. 02.2010 FROM MR. KUNAL LAUNGANI AND MR. LALIT LAUNGANI AS ADVANCE TOWARDS SALE OF HOUSE PROPERTY SITUATED AT 122/6, FAIZABAD ROAD, LUCKNOW. THEREFOR E, OUT OF THE AMOUNT OF PEAK CREDIT OF RS.30,95,843/-, THE ASSESSEE HAD CAS H OF RS.17.00 LAKH FROM THE AFORESAID SOURCES. IT WAS ALSO SUBMITTED THAT THE A SSESSEE RECEIVED RS. 3.00 LAKH AS RENTAL OF MOTOR CARS IN CASH AND ASSESSEES WIFE MRS. POONAM CAPOOR HAD AVAILED A PERSONAL LOAN OF RS.9,91,500/- FROM M/S M UTHOOT FINANCE LTD. AND ON 31.03.2010 THE SAID AMOUNT WAS UTILIZED BY THE ASSE SSEE TO MAKE GOOD THE AMOUNT UTILIZED OUT OF CASH IN HAND OF M/S CAPOORS HOTEL AND RESTAURANT. ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLAN ATION OF THE ASSESSEE. REGARDING AVAILABILITY OF RS.5.00 LAKH, THE ASSESSI NG OFFICER HAS OBSERVED THAT IN AUDIT REPORT IN FORM NO.3CB/3CD, THERE IS NO MENTIO N OF SUCH ADVANCE GIVEN BY 3 THE FIRM, M/S CAPOORS HOTEL AND RESTAURANT TO THE ASSESSEE. FURTHER COL. NO.18 OF THE AUDIT REPORT CONTAINS THE DETAILS OF AMOUNTS PAID AS REMUNERATION, INTEREST ON CAPITAL, HIRE CHARGES OF CAR TO THE ASSESSEE. TH E CAPITAL ACCOUNT OF THE ASSESSEE HAS ALSO NOT DEBITED BY THE AMOUNT OF RS.1 2.00 LAKH CLAIMED TO HAVE BEEN UTILIZED BY HIM. ACCORDINGLY, EXPLANATION OF T HE ASSESSEE IN THIS REGARD WAS REJECTED. 4. REGARDING AVAILABILITY OF RS.5.00 LAKK IN CASH C LAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED AS ADVANCE ON 20.02.2010 FROM TW O PERSONS, MR. KUNAL LAUNGANI AND HIS BROTHER MR. LALIT LAUNGANI. THE AS SESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING EVIDE NCE, SUCH AS AN AGREEMENT TO SALE ETC. THE ASSESSING OFFICER ACCORDINGLY NOTE D THAT IN THE EARLIER INSTANCE OF SALE OF THE SAME HOUSE WHICH WAS CANCELLED AN AGREE MENT TO SALE WAS SIGNED ON STAMP PAPER AND RS. 5.00 LAKH WAS RECEIVED FROM ONE MR. ASHOK KUMAR AGARWAL THROUGH CHEQUE WHO IS NOT ONLY A LUCKNOW BASED PART Y BUT ALSO NEIGHBOUR OF THE ASSESSEE WHEREAS TWO PERSONS BASED AT NEW DELHI HAV E ADVANCED RS.5.00 LAKH IN CASH TO THE ASSESSEE WITHOUT ANY AGREEMENT OR PR OPER DOCUMENTATION . THE ASSESSING OFFICER FOUND THE TRANSACTION HIGHLY ABNO RMAL, UNUSUAL AND NOT IN ACCORDANCE WITH THE ACCEPTED PRACTICE FOR SALE OF A N IMMOVABLE PROPERTY AND THE ASSESSING OFFICER ACCORDINGLY REJECTED THE CONTENTI ON OF THE ASSESSEE. HE, HOWEVER ALLOWED THE BENEFIT OF CASH FLOW OF RS.1,96 ,707/- IN RESPECT OF CAR HIRE CHARGES RECEIVED IN CASH AFTER DEDUCTING EXPENSES O F RS.1,03,900/-. REGARDING UTILIZATION OF LOAN OF RS.9,91,500/- RAISED BY HIS WIFE MRS. POONAM CAPOOR FROM M/S MUTHOOT FINANCE LTD., THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE, AS THE LOAN WAS RAISED IN 31.03.2010 AND THE DEPOSITS HAVE BEEN MADE IN CASH BY THE ASSESSEE THROUGHOUT THE YEAR AN D PEAK CASH CREDIT WAS ARRIVED AT RS.30,95,843/- ON 23.03.2010. THE ASSESS ING OFFICER ACCORDINGLY AFTER ALLOWING A SET OFF OF RS.1,96,100/- MADE THE ADDITI ON OF BALANCE AMOUNT OF RS.28,99,743/- (RS.30,95,843 RS.1,96,100) AS UNEX PLAINED CASH DEPOSIT. 4 5. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) AND FILED A WRITTEN SUBMISSION EXPLAINING THE SOURCE OF DEPOSIT. THE CI T(A) WAS ALSO NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND HE CONFIRM ED THE ADDITION. 6. AGGRIEVED, ASSESSEE HAS PREFERRED AN APPEAL BEFO RE THE TRIBUNAL AND REITERATED ITS CONTENTIONS. DURING THE COURSE OF HE ARING, SPECIFIC QUERY WAS RAISED TO EXPLAIN OF DEPOSIT ON DIFFERENT DATES. BUT EXCEP T ORAL SUBMISSION NO DOCUMENTARY EVIDENCE WAS PLACED ON RECORD. WITH REG ARD TO RECEIPT OF CASH OF RS.5.00 LAKH FROM MR. KUNAL LAUNGANI AND MR. LALIT LAUNGANI ON 20.02.2010 AS ADVANCE FOR SALE OF HIS HOUSE AT FAIZABAD ROAD LUCK NOW, NO EVIDENCE WAS FILED IN THE FORM OF AGREEMENT OF SALE OR OTHERWISE . IT WAS ALSO NOT STATED AS TO WHETHER THIS PROPERTY WAS SOLD TO THE PROPOSED BUYE RS OR THE SALE AGREEMENT WAS CANCELLED. THE ASSESSING OFFICER HAS QUOTED THE PAST HISTORY IN THIS REGARD BY SAYING THAT IN EARLIER YEAR, ASSESSEE HAS RECEIV ED THE CASH OF RS.5.00 LAKH FROM THE PROPOSED BUYERS AND THAT TIME AGREEMENT OF SALE WAS EXECUTED BUT THIS TIME THOUGH THE BUYER IS FROM DELHI BUT NO AGREEMEN T TO SALE WAS EXECUTED. IN ANY CASE, WITH REGARD TO OTHER SOURCE OF DEPOSITS N O EVIDENCE IS FILED BY THE ASSESSEE. 7. LD. DR OF THE REVENUE ON THE OTHER HAND HAS PLAC ED RELIANCE UPON THE ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT O NUS IS UPON THE ASSESSEE TO FURNISH THE EVIDENCE WITH REGARD TO SOURCE OF REGUL AR DEPOSIT IN BANK IN DIFFERENT DATES BUT EXCEPT THE ORAL SUBMISSIONS, ASSESSEE HAS NOT PLACED ANY EVIDENCE ON RECORD. 8. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES, WE FIND THAT ASSESSEE HAS MADE THE ORAL SUBMISSION THAT HE HAS R ECEIVED A SUM OF RS.12.00 LAKH FROM THE PARTNERSHIP FIRM BUT NO EVIDENCE WAS FILED IN THIS REGARD. THE ASSESSING OFFICER CATEGORICALLY OBSERVED IN HIS ORD ER THAT IN THE AUDIT REPORT THERE IS NO MENTION OF ANY ADVANCE GIVEN BY THE FIRM TO A SSESSEE. WITH REGARD TO RECEIPT OF RS.5.00 LAKH ALSO NO AGREEMENT TO SALE W AS PRODUCED TO STRENGTHEN 5 THE ARGUMENT THAT HE HAS RECEIVED IN ADVANCE OF RS. 5.00 LAKH TOWARDS SALE OF HIS PROPERTY. DURING THE COURSE OF HEARING, DESPITE A S PECIFIC QUERY, NO EVIDENCE WAS FILED TO SUBSTANTIATE AS TO WHETHER AN AGREEMENT TO SELL WAS EXECUTED OR AS TO WHAT HAS HAPPENED TILL NOW. WHETHER THE PROPERTY WA S SOLD OR THE AGREEMENT TO SELL WAS CANCELLED. WITH REGARD TO RECEIPT OF LOAN OF RS.9,91,500/- FROM M/S MUTHOOT FINANCE LTD. THE ASSESSING OFFICER HAS OBSE RVED THAT IT WAS RECEIPT ON 31.03.2010 WHERE THE PICK CREDIT OF RS.30,95,843/- WAS SHOWN ON 23.03.2010. MOREOVER, THE REGULAR DEPOSITS WERE MADE IN THE BA NK ACCOUNT OF THE ASSESSEE AND BY SIMPLY SHOWING LOAN FROM M/S MUTHOOT FINANCE LTD. FOR PARTICULAR DATE SOURCE OF DEPOSIT CANNOT BE SAID TO HAVE BEEN EXPLA INED. 9. WE HAVE CAREFULLY EXAMINED THE ORDER OF LD. CIT( A) IN THIS REGARD, WE FIND THAT THE CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL IN HIS ORDER BY MAKING SPECIFIC OBSERVATION. THE RELEVANT PORTION OF CIT(A) IS EXTR ACTED IS AS UNDER:- 4.4 I HAVE ALSO CONSIDERED SUBMISSIONS OF THE APPE LLANT ON MERITS. THE DETAILS OF PEAK CASH CREDIT IN EVERY MONTH OF THE YEAR AND COR RESPONDING CASH IN HAND AVAILABLE WITH THE FIRM, M/S. CAPOOR'S HOTEL AND RE STAURANT ARE AS UNDER: MONTHS PEAK CASH CREDIT (IN RS.) CASH IN HAND (RS.) 29.04.2009 1,38,000 4,25,930 27.05.2009 2,35,000 3,96,762 30.06.2009 2,34,000 6,45,236 25.07.2009 14,07,000 6,39,125 19.08.2009 20,62,800 6,27,268 25.09.2009 21,04,800 8,73,207 30.10.2009 21,77,843 7,73,105 26.11.2009 23,73,843 6,49,846 30.12.2009 26,26,843 11,24,071 19.01.2010 26,61,843 9,50,375 17.02.2010 30,26,843 10,38,760 6 23.03.2010 30,95,843 8,43,598 FROM THE ABOVE IT IS NOTED THAT THE PEAK CASH CREDI T AS ON 23.03.2010 IS RS.30,95,843/-WHEREAS THE CASH IN HAND AVAILABLE WITH THE FIRM IS ONLY RS.8,43,598/-. HENCE THE EXPLANATION OF THE AP PELLANT REGARDING CASH AVAILABILITY OF RS.12 LAKH OUT OF CASH IN HAND AVAILABLE WITH THE SAID FIRM IS NOT ACCEPTABLE. FURTHER, I ALSO FIND T HAT NO SUCH WITHDRAWAL BY THE APPELLANT IS RECORDED IN THE BOOK S OF ACCOUNT INCLUDING CASH BOOK OF THE FIRM. THE BOOKS OF ACCOU NT OF THE FIRM M/S. CAPOOR'S HOTEL AND RESTAURANT ARE DULY AUDITED U/S 44AB OF THE ACT BY A CHARTERED ACCOUNTANT AND AN AUDIT REPORT IN FO RM NO. 3CB/3CD ALONG WITH AUDITED BALANCE SHEET AND PROFIT AND LOS S ACCOUNT HAVE BEEN PREPARED AFTER, OBTAINING THE INFORMATION AND EXPLANATION FROM THE-PARTNERS. IT IS ALSO NOTED THAT THE APPELLANT H AS-MADE WITHDRAWAL OF RS.2,40,000/-ONLY FROM THE FIRM WHICH IS CREDITE D IN THE HDFC BANK ACCOUNT NO. 00781000031295 WHICH DOES NOT .FORM PAR T OF COMPUTATION OF PEAK CREDIT. ALSO THE EXPLANATION TH AT CASH IN HAND OF THE FIRM HAS BEEN RECOUPED BY THE WIFE OF THE APPEL LANT, MRS. POOHAM CAPOOR BY TAKING PERSONAL LOAN OF RS.9,91,000/- IS ALSO NOT VERIFIABLE FROM THE ENTRIES IN THE BOOKS OF ACCOUNT. UNDER THE CIRCUMSTANCES, I FIND THAT'THE AO WAS JUSTIFIED IN NOT ACCEPTING THE SUBMISSION OF THE APPELLANT IN THIS.REGARD AS THE SAME IS NOT SUPPORT ED BY ANY EVIDENCE. THE EXPLANATION OF THE APPELLANT ABOUT RS.5 LAKH IN CASH RECEIVED FROM MR. KUNAL LAUNGANI AND MR. LALIT LAUNGANI CMJ2 0.02.20LO AS ADVANCE FOR SALE OF HIS HOUSE PROPERTY LOCATED AT 1 22/6, FAIZABAD ROAD, LUCKNOW IS ALSO NOT SUPPORTED BY ANY EVIDENCE EXCEPT A CONFIRMATION LETTER FILED BY THEM. BOTH OF THEM ARE APPARENTLY WORKING FOR A COMPANY, M/S. GOLA SOUTHEND RESTAURANT AND AV AILABILITY OF CASH WITH THEM IS NOT VERIFIABLE. ADMITTEDLY, BOTH OF TH EM ARE NEPHEW OF THE APPELLANT AND CONFIRMATIONS FROM THEM HAVE BEEN APPARENTLY OBTAINED ONLY TO EXPLAIN THE CASH DEPOSIT. I ALSO A GREE-WITH THE AO THAT IN PAST SUCH PAYMENT WAS RECEIVED FROM ASHOK K UMAR AGARWAL BY CHEQUE AND THE APPELLANT ENTERED INTO A PROPER A GREEMENT TO SALE ON STAMP PAPER. I ALSO FIND THAT THERE IS NOT MUCH OF DIFFERENCE IN THE PEAK CREDITS AS ON 17.02.2010 AND 23.03.2010 WHICH STAND AT RS.30,2 6,843/- AND KS. 3 0,95,8437- RESPECTIVELY. LOAN OF RS.5 LAKH HAS BE EN OBTAINED FROM LAUNGANI BROTHERS ON 20.02.2010 WHICH CERTAINLY CAN NOT EXPLAIN THE PEAK CREDIT OF RS.30,26,843/- AS ON 17.02.2010. UND ER THE CIRCUMSTANCES ADDITION OF RS,28,99,743/- MADE BY-TH E AO IS CONFIRMED. GROUND NOS. 6, 6(A) AND 7 ARE DECIDED AG AINST THE APPELLANT. 7 10. SINCE NO EVIDENCE HAS BEEN FILED BY THE ASSESSE E TO DEMOLISH THE STAND TAKEN BY THE REVENUE WITH REGARD TO UNEXPLAINED SOU RCE OF DEPOSITS, WE ARE OF THE VIEW THAT THE REVENUE HAS RIGHTLY MADE THE ADDI TION ON ACCOUNT OF UNEXPLAINED SOURCE OF DEPOSIT IN THE BANK. WE, THER EFORE, FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) AND WE CONFIRM THE SAME. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 17/03/2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR