ITO, Jaipur V. SWAROOP DAY, Jaipur

ITA 261/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54215 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHARI
• Assessee Lawyers: MANISH TATIWALA
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

1 ITA 261-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 261/JP/2011 ASSTT. YEAR : 2007-08. THE INCOME-TAX OFFICER, VS. SHRI SWAROOP DAY, WARD 1(1), 1622, KANSARON KI GALI, JAIPUR. SMS HIGHWAY, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD JOHARI RESPONDENT BY : SHRI MANISH TATIWALA DATE OF HEARING : 05.10.2011 DATE OF PRONOUNCEMENT : 21.10.2011 ORDER DATE OF ORDER : 21/10/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE DEPARTMENT IS OBJECTING IN DELETING THE ADDI TION OF RS. 30,30,601/- ADDED LBY AO UNDER SECTION 68. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE DE RIVES INCOME FROM JOB WORK OF SILVER ORNAMENTS. DURING THE YEAR UNDER CONSIDERATI ON ON GROSS RECEIPTS OF RS. 2,80,500/-, NET INCOME OF RS. 99,850/- HAS BEEN SHOWN. THE AO O N PERUSAL OF BANK ACCOUNTS FOUND THAT ON VARIOUS DATES, CASH WAS DEPOSITED TOTALING TO RS. 30,30,601/-. IT WAS EXPLAINED 2 BEFORE THE AO THAT THE ASSESSEE BELONGS TO A POOR F AMILY OF WEST BENGAL AND LIVES IN A ROOM ON RENT ALONG WITH SEVERAL OTHER PERSONS OF HI S VILLAGE. THE ASSESSEE IS ONLY A PERSON IN THEIR GROUP HAVING BANK ACCOUNT AT JAIPUR . THEIR FAMILIES RESIDE IN WEST BENGAL AND THEY ARE REQUIRED TO SEND MONEY TO THEIR FAMILY MEMBERS ON REGULAR BASIS. FOR QUICK TRANSFER OF MONEY, HIS FRIENDS AND FELLOW WORKERS, USED TO DEPOSIT THEIR MONEY IN THE ASSESSEES ACCOUNT AT JAIPUR AND SOME ONE IN THE FA MILY WITHDRAWS THE SAME AMOUNT IN THEIR VILLAGES AT WEST BENGAL AND DELIVERS THE SAME TO FAMILY OF THE DEPOSITOR. THAT IT IS VERIFIABLE FROM THE BANK ACCOUNTS THAT ALMOST ALL T HE WITHDRAWALS WERE MADE IN WEST BENGAL ONLY. SOME AFFIDAVITS TO THIS EFFECT WERE FI LED BEFORE THE AO. THE ASSESSEE HAS NOT COLLECTED ANY CHARGES FROM THESE PERSONS EXCEPT CHA RGES LEVIED BY THE BANK. 4. THE AO HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE ON THE GROUND THAT A SINGLE AFFIDAVIT WAS FILED FROM 12 PERSONS WITHOUT ADDRESSES OF THE PERSONS. THE ASSESSEE FAILED TO PRODUCE THESE PARTIES FOR VERIFICATION. A S THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT AND NO R EASON WAS GIVEN WHY HE HAS PROVIDED THIS FACILITY TO SO MANY PERSONS AND NO WITHDRAWALS WERE POSSIBLE WITHOUT CHECK OR ATM CARD, THE AO HAS MADE AN ADDITION OF RS. 30,30,601/ - UNDER SECTION 68 OF IT ACT AS UNEXPLAINED CASH CREDITS. 5. DETAILED WRITTEN SUBMISSIONS WERE FILED BEFORE L D. CIT (A) ALONG WITH PROOF OF IDENTITY OF THE DEPOSITORS AND WHEREVER IDENTITY PR OOF WERE NOT AVAILABLE, AFFIDAVITS WERE FILED. BEING FRESH EVIDENCES, COPIES OF THE SAME W ERE FORWARDED TO THE AO FOR HIS REMAND REPORT. INSPITE OF SEVERAL REMINDERS ISSUED, NO REMAND REPORT OF THE AO WAS RECEIVED. AFTER CONSIDERING THE SUBMISSIONS AND PE RUSING THE MATERIAL ON RECORD, THE LD. 3 CIT (A) FOUND THAT THE AO WAS NOT JUSTIFIED IN TREA TING THE ENTIRE DEPOSIT IN BANK ACCOUNT AS UNEXPLAINED BANK DEPOSIT OF THE ASSESSEE. ACCOR DINGLY HE DELETED THE ADDITION. 6. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 7. THE LD. D/R PLACED STRONG RELIANCE ON THE ORDER OF AO. IT WAS FURTHER SUBMITTED THAT THE PROVISIONS OF SECTION 68 ARE VERY CLEAR AN D ASSESSEE FAILED TO DISCHARGE HIS ONUS TO PROVE THE GENUINENESS OF THE BANK DEPOSITS. THEREFO RE, ORDER OF AO IS LIABLE TO BE CONFIRMED. 8. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A). CONTENTIONS RAISED BEFORE LD. CIT (A) WERE REITERATED HERE BEFORE THE TRIBUNAL. 9. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIALS ON RECORD, WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). DETAIL ED WRITTEN SUBMISSIONS WERE FILED BEFORE LD. CIT (A) EXPLAINING THE FACTS OF THE CASE WHICH HAVE BEEN DISCUSSED BY LD. CIT (A) AT PAGES 2 & 3 OF HIS ORDER IN THE FOLLOWING MANNER :- IN HIS WRITTEN SUBMISSION, THE AR HAS REITERATED WHAT WAS STATED BEFORE THE AO. THAT THE APPELLANT IS DOING ONLY JOB WORK OF GOLD AND SILVER ORNAMENTS ON WORKS CONTRACT BASIS. THAT HE I S BACHELOR LIVES WITH CO-WORKERS FROM HIS NATIVE PLACE AND MAINTAINS COMM ON MESS. THAT THE APPELLANT BELONGS TO A POOR FAMILY OF WEST BENGAL A ND HE IS THE ONLY PERSON IN THE GROUP HAVING BANK ACCOUNT AT JAIPUR. ALL OTHER CO-WORKERS ARE ALSO DOING JOB WORK/LABOUR OR MAKING ORNAMENTS AND FOR SENDING MONEY TO THEIR FAMILY MEMBERS AT VILLAGE USED THE A PPELLANTS BANK ACCOUNT. THE FAMILY MEMBERS IN THE VILLAGE ARE MOST LY ILLITERATE AND, THEREFORE, FIND MONEY TRANSFERRED THROUGH POST OFFI CE OR OTHER MEANS QUITE DIFFICULT AND ALSO IT TAKES QUITE LONGER TIME. FROM THE PERUSAL OF BANK ACCOUNT, IT CAN BE SEEN THAT ALL THE WITHDRAWALS WE RE MADE IN W.B. ONLY. 4 AFFIDAVITS WERE FILED BUT THE AO WITHOUT MAKING ANY ENQUIRY AT THEIR NATIVE VILLAGES REJECTED THE AFFIDAVITS. THE DEPOSI TS INCLUDE APPELLANTS JOB WORK RECEIPTS BOTH IN CASH AND CHEQUE AS WELL AS PA ST SAVINGS BUT THE SAME WAS NOT CONSIDERED BY THE AO. THE AO ALSO FAILED TO PROVE ANY SOURCE OF SUCH HUGE DEPOSITS, IF IT WAS THE APPELLANTS INCOM E. THE APPELLANT DOES NOT MAINTAIN ANY STATUS AND LIVES IN A SINGLE ROOM THAT TOO SHARING WITH CO- WORKERS AND TAKING MEALS IN A COMMON MESS. MONEY D EPOSITED WAS WITHDRAWN EITHER ON THE SAME DAY OR VERY NEXT DAY L EAVING A CLOSING BALANCE OF RS. 2349/-. THE AO HAS NOT MADE ANY EFFO RTS TO FIND OUT WHERE THIS HUGE SUM OF RS. 30,30,601/- HAS GONE. THE APP ELLANT DOES NOT OWN ANY IMMOVABLE ASSETS. ALTERNATIVELY, IT WAS SUBMIT TED THAT IF AT ALL THE DEPOSITS ARE CONSIDERED IN THE HANDS OF THE APPELLA NT, ONLY THE PEAK DEPOSITS MAY BE CONSIDERED FOR ADDITION. THE PEAK D EPOSIT OF RS. 2,15,996/- APPEARS AT THE FAG END OF THE YEAR AND S UBSEQUENTLY WITHDRAWN. IT REMAINS AS EXPLAINABLE AS DURING THE YEAR THE AP PELLANT HAS SHOWN HIS INCOME OF RS. 99,850/- AND IN EARLIER 4-5 YEARS, IN COME IN THE SAME RANGE HAS BEEN SHOWN. AS THE DEPOSIT REMAINS EXPLAINED, I T WAS REQUESTED THAT THE ADDITION MADE BY AO MAY BE DELETED. 10. AFTER CONSIDERING THE ABOVE SUBMISSIONS, THE LD . CIT (A) FOUND THAT THE ASSESSEE IS A MAN OF SMALL MEANS WHO IS LIVING IN A HIRED RO OM WITH OTHER CO-WORKERS AND TAKING FOOD IN COMMON MESS AND DOING JOB WORK OF SILVER OR NAMENTS CANNOT BE EXPECTED OF OWING HUGE DEPOSITS, PARTICULARLY, WHEN NO OTHER SO URCE OF INCOME COULD BE FIND OUT. THERE APPEARS NO CONTRADICTION IN THE EXPLANATION O F LD. A/R THAT THE ASSESSEES BANK ACCOUNT WAS USED IN TRANSFERRING INCOME OF THE ASSE SSEE AS WELL AS OTHER CO-OWNERS FROM JAIPUR TO THEIR NATIVE VILLAGES. FROM THE COPY OF B ANK ACCOUNT, IT CAN BE SEEN THAT THE CASH WAS WITHDRAWN THROUGH ATM CARD AND THE AMOUNT DEPOS ITED WERE WITHDRAWN ALMOST ON THE SAME DAY. THE AO HAS ALSO ADMITTED THAT THE WIT HDRAWALS WERE MADE OUT OF JAIPUR. IN 5 MOST OF THE CASES, IDENTITY PROOF OF THE DEPOSITORS WAS GIVEN TO SHOW THAT THEY ARE ONLY LABOURERS. IN THE AFFIDAVITS FILED BY THEM THEY HAV E ADMITTED DEPOSITING THEIR INCOME OF JOB CHARGES RECEIVED BEING DEPOSITED IN THE BANK AC COUNT OF THE ASSESSEE AND SUBSEQUENTLY WITHDRAWALS IN WEST BENGAL AND RECEIVE D THE MONEY BY THEIR FAMILY MEMBERS. AS THE EXPLANATION GIVEN BY LD. A/R COULD NOT BE DISPROVED, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, DEPOSITS OF RS . 30,30,601/- IN THE BANK ACCOUNT OF THE ASSESSEE ARE CONSIDERED AS MONEY DEPOSITED BY VARIO US LABOURERS INCLUDING THE ASSESSEE. THUS THE SOURCE OF DEPOSITS REMAIN EXPLAINED AND, T HEREFORE, THE AO WAS DIRECTED TO DELETE THE ADDITION OF RS. 30,30,601/-. 11. THE ABOVE FINDINGS, IN OUR VIEW, ARE REASONABLE FINDING. IN CASE OF P.K. NOORJAHAN, THE HONBLE SUPREME COURT HAS HELD THAT IT HAS TO BE SEEN THAT WHAT IS THE MEANS OF THE ASSESSEE AND WHETHER THE AMOUNT WHICH WAS CONSIDERED BY THE DEPARTMENTAL AUTHORITIES AS INCOME OF THE ASSESSEE WAS ABLE TO E ARN SUCH INCOME OR NOT. IF ANY PERSON IS NOT A MAN OF MEANS, THEN OF COURSE ADDITION MADE AN D SUSTAINED WERE HELD AS NOT JUSTIFIED. IN VIEW OF THESE FACTS AND CIRCUMSTANCE S AND IN VIEW OF REASONING GIVEN BY LD. CIT (A) WHICH, IN OUR CONSIDERED VIEW ARE FINDING O F FACTS, WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN DELETING THE ADDITIONS. ACCORDINGLY WE CONFIRM THE ORDER OF LD. CIT (A). 12. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 13. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 .10.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- 6 COPY FORWARDED TO :- THE ITO WARD 1(1), JAIPUR. SHRI SWAROOP DAY, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 261/JP/2011) BY ORDER, AR ITAT JAIPUR.