Sanju Agarwal, Bhubaneswar V. DCIT, Circle-1(1), Bhubaneswar

ITA 263/CTK/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0726 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 26-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P S PANDAKAMAL AGARWAL ARS
• Keywords: Unexplained cash credit; Reasonable cause; Deemed dividend
• Section: 2(22)(e); 201; 13; 68

Judgement Text

P A G E 1 | 13 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 263 /CTK/201 8 ASSESSMENT YEAR : 2011 - 12 SANJU AGARWAL, PLOT NO.N - 1/93, IRC VILLAGE, NAYAPALLI, BHUBANESWAR. VS. DCIT, CIRCLE 1(1), BHUBANESWAR. PAN/GIR NO. ACEPA 5217 D (APPELLANT ) .. ( RESPONDENT ) ITA NO .264 /CTK/2018 ASSESSMENT YEAR : 2011 - 12 SUBASH AGARWAL, PLOT NO.N - 1/93, IRC VILLAGE, NAYAPALLI, BHUBANESWAR. VS. DCIT, CIRCLE 1(1), BHUBANESWAR. PAN/GIR NO. AATPA 3716 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.S.PANDA/KAMAL AGARWAL , AR S REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 27 / 11 / 201 9 DATE OF PRONOUNCEMENT : 23 / 1 2 / 201 9 O R D E R PER C.M.GARG,JM BOTH THE APPEALS HAVE BEEN FILED BY THE ASSESSEES AGAINST THE SEPARATE ORDER S OF THE CIT(A),1, BHUBANESWAR DATED ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 2 | 13 16.11.2016 IN RESPECT OF SANJU AGARWAL AND DATED 2.1.2017 IN RESPECT OF SUBASH AGARWAL FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE APPEAL IN THE CASE OF SANJU AGARWAL IS TIME BARRED BY 532 DAYS AND APPEAL IN THE CASE OF SUBASH AGARWAL IS TIME BARRED BY 476 DAYS. BOTH THE ASSESSEES VIZ WIFE AND HUSBAND HAVE FILED CONDONATION PETITIONS ALONGWITH AFFIDAVIT S STATING THEREIN THAT DUE TO RECESSION IN INFRASTRUCTURE DEVELOPMENT BUSINESS, THE PERSON WHO WAS LOOKING AFTER THEIR PERSONAL INCOME TAX MATTERS LEFT THE JOB AND THE ORDER S RECEIVED FROM THE CIT(A) WERE UNATTENDED AND THE SECOND APPEAL S COULD NOT BE FILED WITHIN THE DUE DATE. IT IS STATED THAT THE DELAY IN FILING THE APPEAL S BEFORE THE BENCH IS BONAFIDE AND IS BEYOND THEIR CONTROL. IT WAS IN THIS BACKDROP PRAYED THAT THE DELAY IN FILING THE APPEALS MAY BE CONDONED AND APPEALS BE ADMITTED FOR ADJUDICATION. 3. AFTER HEARING THE RIVAL SUBMISSIONS, WE HAVE PERUSED THE CONDONATION PETITIONS ALONGWITH AFFIDAVITS. WE ARE SATISFIED THAT THE DELAY IN FILING THE APPEALS IS DUE TO REASONABLE CAUSE AND, ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEALS FOR ADJUDICATION. ITA NO.264/C TK/2018: A.Y. 2011 - 12 - SUBASH AGARWAL 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 3 | 13 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY LD. CIT(A) CONFIRMING THE ORDER OF LD. ASSESSING OFFICER IS ARBITRARY AND BAD IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONSIDERING THE RS. 50.00 LAKHS RECEIVED BY THE APPELLANT FROM SMT. SANJU AGARWAL HIS WIFE AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN IGNORING THE SUBMISSION FILED BEFORE THE LD. ASSESSING OFFICER CONSIDERING THE REPAYMENT OF RS.23.25 LAKHS TO SMT. SANJU AGARWAL AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961. 4. ON T HE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF LD. ASSESSING OFFICER FOR CONSIDERING RS. 73.25 LAKHS (RS. 50.00 LAKHS RECEIVED FROM SMT. SANJU AGARWAL AND RS. 23.25 LAKHS REFUND OF LOAN TO SMT. SANJU AGARWAL) AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATING THE SUBMISSION/EXPLANATIONS FILED. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE LD. ASSESSING OFFICER FOR R S. 1,25,000 PAYABLE TO THE DAUGHTER OF THE APPELLANT SMT. SILPA AGARWAL AGAINST SALE OF SHARES OF M/S ARSS INFRASTRUCTURE PROJECTS LTD. AS UNEXPLAINED U/S. 68 OF THE INCOME TAX ACT, 1961. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NO T JUSTIFIED IN CONFIRMING THE ORDER OF THE LD. ASSESSING OFFICER IN CONSIDERING RS. 50.00 LAKHS PAID TO SMT. SANJU AGARWAL BY M/S. ARSS DEVELOPERS LTD. AS AMOUNT PAID TO THE APPELLANT AND THEREFORE TREATED IT AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE INCOME TAX ACT,1961. 5 . GROUND NOS.1 & 7 OF APPEAL ARE GENERAL IN NATURE. 6. LD COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO.6 OF APPEAL, HENCE, SAME IS DISMISSED AS NOT PRESSED. ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 4 | 13 7 . APROPOS GROUND NOS.2 , 3 & 4 OF APPEAL, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD CIT(A) HAS ERRED IN CONSIDERING THE AMOUNT OF RS.50 LAKHS RE CEIVED BY THE ASSESSEE FROM HIS WIFE SMT. SANJU AGARWAL AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. LD A.R. FURTHER SUBMITTED THAT THE LD CIT(A) WAS NOT CORRECT AND JUSTIFIED IN IGNORING THE SUBMISSION FILED BEFORE THE AO CONSIDERING THE REPAYMENT OF R S.23,25,000/ - TO SMT. SANJU AGARWAL AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. LD COUNSEL FURTHER SUBMITTED THAT THE AUTHORITIES BELOW ERRED IN MAKING THE ADDITION U/S.68 OF THE ACT ON BASELESS GROUND CONSIDERING RS.50 LAKHS RECEIVED FROM SANJU AGARWAL AND RS.23,25,000/ - AS REPAYMENT TO SANJU AGARWAL WITHOUT APPRECIATING THE SUBMISSION/EXPLANATION FILED BY THE ASSESSEE. 8. EXPLAINING THE FACTS OF THE CASE, LD COUNSEL SUBMITTED THAT THE AO HAS MADE ADDITION OF RS.50 LAKHS U/S.2(22)(E) OF THE ACT BY HOLDI NG THAT THE LOAN/ADVANCE GIVEN BY THE COMPANY TO ITS SHAREHOLDER SMT. SANJU AGARWAL AS DEEMED DIVIDEND AND TAXABLE IN THE HANDS OF RECIPIENT ASSESSEE. LD COUNSEL SUBMITTED THAT THE ASSESSEE BY WAY OF NOT PRESSING GROUND NO.6 OF APPEAL BEFORE THE TRIBUNAL HAS ACCEPTED THIS ADDITION MADE BY THE AO AND CONFIRMED BY THE LD CIT(A). LD A.R. FURTHER SUBMITTED THAT IN THE BALANCE SHEET OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2011 - 12, ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 5 | 13 THE UNSECURED LOAN RECEIVED FROM HIS WIFE SMT. SANJU AGARWAL OF RS.26,75,000/ - HAS BEEN SHOWN IN THE BALANCE SHEET AND SIMULTANEOUSLY, SMT. SANJU AGARWAL HAS ALSO SHOWN UNSECURED LOAN OF RS.23,25,000/ - FROM THE ASSESSEE. LD COUNSEL ALSO SUBMITTED THAT THIS CONFUSION AROSE DUE TO THE FACT THAT THE AO FOUND THAT THE ASSESSEE HAD CLAIM ED TO HAVE BORROWED UNSECURED LOAN OF RS.50 LAKHS FROM SMT. SANJU AGARWAL DURING FINANCIAL YEAR 2010 - 2011 AND ALSO CLAIM TO HAVE REPAID LOAN AMOUNTING TO RS.23,25,000/ - TO SMT. SANJU AGARWAL. WHILE VERIFYING THE STATEMENT OF AFFAIRS IN THE CASE OF SMT. SANJU AGARWAL, THE ASSESSING OFFICER FOUND THAT SMT. SANJU AGARWAL HAD SHOWN TO HAVE BORROWED UNSECURED LOAN OF RS.,23,25,000/ - FROM THE ASSESSEE AND SMT. SANJU AGARWAL HAD NOT SHOWN ANY LOANS AND ADVA NCES GIVEN TO THE ASSESSEE DURING THE FINANCIAL YEAR 2010 - 2011 IN HER STATEMENT OF AFFAIRS. THE ASSESSING OFFICER CONCLUDED THAT THAT THE ASSESSEE HAD GOT RS.50,00,000/ - FROM HIS UNDISCLOSED INCOME AND WRONGLY REPAID LOAN OF RS.23,25,000/ - TO SMT. SANJAY AGARWAL. LD A.R. REITERATING THE SUBMISSIONS OF THE ASSESSEE BEFORE THE AO AND REPRODUCED BY LD CIT(A) IN PARA 3 OF HIS ORDER SUBMITTED THAT DURING THE RELEVANT PERIOD, SMT. SANJU AGARWAL, WIFE OF THE ASSESSEE HAD RECEIVED A SUM OF RS.50 LAKHS FROM ARSS D EVELOPERS LTD., AS UNSECURED LOAN AND THE ABOVE ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 6 | 13 AMOUNT WAS DIRECTLY PAID TO THE ASSESSEE BY ARSS DEVELOPERS LTD., AT THE REQUEST OF SMT. SANJU AGARWAL . HOWEVER, WHILE PREPARING THE STATEMENT OF AFFAIRS, THE SAID TRANSACTION WAS NOT INCORPORATED BY SMT. SA NJU AGARWAL WHICH IS AN INADVERTENT MISTAKE. LD COUNSEL SUBMITTED THAT THIS FACT HAS NOT BEEN CONTROVERTED NEITHER BY THE AO NOR BY LD CIT(A) THAT AMOUNT OF RS.50 LAKHS WAS TRANSFERRED TO THE ACCOUNT OF THE ASSESSEE FROM M/S. ARSS DEVELOPERS LTD., WHICH HAS BEEN ACCEPTED TO BE ADDED IN THE HANDS OF THE ASSESSEE U/S.2(22)(E) OF THE ACT BY WAY OF NOT PRESSING GROUND NO.6. LD A.R. SUBMITTED THAT IN THIS SITUATION DUE TO THIS MISTAKE IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE AND HIS WIFE, THE UNSECURED LOA N OF RS.26,75,000/ - WAS SHOWN IN THE BALANCE SHEET OF THE ASSESSEE RECEIVED FROM HIS WIFE AND REPAYMENT OF LOAN OF RS.23,25,000/ - WAS SHOWN IN THE BALANCE SHEET OF SMT. SANJU AGARWAL FROM THE ASSESSEE AND IF THE AMOUNT OF RS.50 LAKHS HAS TO BE ADDED IN TH E HANDS OF THE ASSESSEE, WHICH WAS DIRECTLY RECEIVED BY HIM FROM ARSS DEVELOPERS LTD., THEN BY WAY OF ADJUSTING THIS RS.50 LAKHS, THE FACTUM OF REPAYMENT OF LOAN OF RS.23,25,000/ - BY THE ASSESSEE TO HIS WIFE WAS TO BE ACCEPTED . LD COUNSEL SUBMITTED THAT I F THE AMOUNT OF RS.50 LAKHS IS ADDED IN THE HANDS OF THE ASSESSEE WITHOUT TREATING THE SAME AS LOAN FROM HIS WIFE, THEN THE FINAL SITUATION WOULD BE ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 7 | 13 THAT IN THE BEGINNING OF THE YEAR AN AMOUNT OF RS.23,25,000/ - WAS DUE AGAINST THE WIFE OF THE ASSESSEE SANJ U AGARWAL, WHICH WAS RIGHTLY SHOWN IN THE BALANCE SHEET OF SANJU AGARWAL AS UNSECURED LOAN FROM THE ASSESSEE SHRI SUBASH AGARWAL AND AFTER REVERSING THE AMOUNT OF RS.50 LAKHS FROM THE ACCOUNT OF THE ASSESSEE, THE SAME AMOUNT OF RS.23,25,000/ - WOULD BE DU E TO WIFE OF THE ASSESSEE SANJU AGARWAL AND SAME WOULD FIND PLACE IN THE BALANCE SHEET OF THE ASSESSEE AS DEBTOR. 9. THEREFORE, NO FURTHER ADDITION U/S.68 OF THE ACT IS CALLED FOR NEITHER IN THE HANDS OF THE ASSESSEE NOR IN THE HANDS OF WIFE SANJU AGARWAL AND SAME MAY KINDLY BE DELETED. 10. REPLYING TO ABOVE, LD DR STRONGLY SUPPORTED THE ASSESSMENT AND FIRST APPELLATE ORDER. HOWEVER, IN ALL FAIRNESS, HE SUBMITTED THAT SINCE THE ASSESSEE HAS CONCEDED THE AMOUNT OF RS.50 LAKHS AS ADDITION U/S.2(22)(E ) OF THE ACT, THEREFORE, CONSEQUENT EFFECT OF THIS SITUATION HAS TO BE TAKEN CARE OF IN THE RESPECTIVE ACCOUNTS OF THE ASSESSEE AND HIS WIFE. 11. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED VIEW THAT IF THE ASSESSEE HAS ACC EPTED THE AMOUNT OF RS.50 LAKHS RECEIVED FROM THE ACCOUNT OF ARRS DEVELOPERS LTD., TO HIS BANK ACCOUNT AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 8 | 13 ACT , WITHOUT ANY OTHER EVIDENCE, SAME AMOUNT CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE AS RECEIVED BY SANJU A GARWAL AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. HENCE, GROUND NO.2 OF THE ASSESSEE STANDS ALLOWED. 12. FURTHER AFTER REVERSING THE ENTIRE AMOUNT OF RS.50 LAKHS WITHOUT TREATING THE SAME AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE, REVERSE ACCOUNT ING ENTRY HAS TO BE MADE WHICH WOULD RESULT THAT THE AMOUNT OF RS.23,25,000/ - HAS TO BE TREATED AS DUE TO THE WIFE OF THE ASSESSEE AND ENTRY OF UNSECURED LOAN FROM HIS WIFE TH AT THE AMOUNT OF RS.23,25,000/ - HAS TO BE SHOWN DUE TO THE ASSESSEES WIFE SMT. S ANJU AGARWAL AND THAT AMOUNT WOULD BE SHOWN IN THE BALANCE SHEET OF THE ASSESSEE FOR ASSESSMENT YEAR 2011 - 12. ON THIS COUNT, NO ADDITION U/S.68 OF THE ACT IS CALLED FOR. THE AO WAS NOT CORRECT IN MAKING THE ADDITION OF RS.73,25,000/ - IN THE HANDS OF THE ASSESSEE TREATING RS.50 LAKHS RECEIVED FROM SANJU AGARWAL AND RS.23,25,000/ - AS REPAYMENT OF LOAN TO SANJU AGARWAL U/S.68 OF THE ACT. AS WE HAVE NOTED ABOVE AMOUNT OF RS.50 LAKHS WAS DIRECTLY RECEIVED FROM ARSS DEVELOPERS LTD., AND THE AMOUNT HAS BEEN ROUTED THROUGH THE BANKING CHANNEL AND HAS BEEN TAXED IN THE HANDS OF THE ASSESSEE AS DEEMED DIVIDEND , NO FU RTHER ADDITION IN THIS REGARD AMOUNTING TO RS.50 LAKHS CAN BE MADE IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 9 | 13 U/S.68 OF THE ACT. THIS FACT HAS NOT BEEN DISPUTED BY LD D.R. THAT BEFORE TRANSACTION OF RS.50 LAK HS, AMOUNT OF RS.23,25,000/ - WAS DUE TO THE WIFE OF THE ASSESSEE SANJU AGARWAL AS DEBTOR AND WHEN THE ASSESSEE TREATED THE AMOUNT OF RS.50 LAKHS AS RECEIVED FROM SANJU AGARWAL AS LOAN, THE SITUATION CHANGE AND THAT IS WHY THE ASSESSEE HAS SHOWN BALANCE AMO UNT OF RS.26,75,000/ - AS UNSECURED LOAN FROM HIS WIFE I.E. DEDUCTING RS.23,25,000/ - FROM THE NOTIONAL AMOUNT OF UNSECURED LOAN OF RS.50 LAKHS. WHEN THE CONTROVERSY REGARDING AMOUNT OF RS.50 LAKHS HAS BEEN SOLVED BY TREATING THE SAME AS DIVIDEND INCOME IN THE HANDS OF THE ASSESSEE U/S.2(22)(E) OF THE ACT THEN OTHER RELEVANT BOOK ENTRY CANNOT BE HELD AS SUSTAINABLE AND AFTER REVERSING THE SAME, NO ADDITION U/S.68 OF THE ACT CAN BE HELD AS SUSTAINABLE. 13. IN VIEW OF FOREGOING DISCUSSION, WE ARE INCLINED TO HOLD THAT THE AO WAS NOT RIGHT IN MAKING ADDITION IN THE HANDS OF THE ASSESSEE OF RS.73,25,000/ - U/S.68 OF THE ACT AND LD CIT(A) WAS NOT CORRECT IN UPHOLDING THE SAME. IT IS PERTINENT TO NOTE THAT THE AS SESSEE HAS CONCEDED RS. 50,00 ,000/ - AS RECEIVED AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT ONLY BEFORE THE TRIBUNAL AND THE AUTHORITIES BELOW HAD NO OCCASION TO DEAL WITH THE ISSUE WHILE CONSIDERING THIS FACT. THEREFORE, IN THE CHANGING SCENARIO, WE CONFI RM RS.50 LAKHS IN THE HANDS OF THE ASSESSEE U/S.2(22)(E) OF ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 10 | 13 THE ACT AND CONSEQUENTLY, OTHER ADDITIONS MADE BY THE AO AND CONFIRMED BY LD CIT(A) ONLY ON THE BASIS OF LEDGER/BOOK ENTRY IN THE RESPECTIVE ACCOUNTS AND BALANCE SHEET OF THE ASSESSEE AND HIS WIFE CANNOT BE HELD AS SUSTAINABLE. THEREFORE, GROUND NOS.3 & 4 OF ASSESSEE ARE ALLOWED. 14. APROPOS GROUND NO.5 OF APPEAL, LD A.R. SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION U/S.68 OF THE ACT OF RS.1,25,000/ - PAYABLE TO THE DAUGHTER OF THE AS SESSEE SMT SILPA AGARWAL AGAINST TOWARDS SALE OF SHARES OF M/S. ARSS INFRASTRUCTURE PROJECT LTD.,. THEREFORE, SAME MAY KINDLY BE DELETED. 15. REPLYING TO ABOVE, LD D.R. SUBMITTED THAT FROM THE STATEMENT OF FACTS OF SILPA AGARWAL FOR THE FINANCIAL YEAR 201 0 - 2011 PERTAINING TO ASSESSMENT YEAR 2011 - 12, IT WAS NOTICED BY THE AO THAT NO LOAN WAS PAID TO THE ASSESSEE DURING THE SAME PERIOD BY SILPA AGARWAL. THEREFORE, THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND SATISFACTORY AND HENCE, THE AMOUNT WAS A DDED IN THE HANDS OF THE ASSESSEE U/S.68 OF THE ACT AS UNEXPLAINED CASH CREDIT. FURTHER, DRAWING OUR ATTENTION TO PARA 4.1 OF THE CIT(A) ORDER, LD D.R. SUBMITTED THAT EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS, NO MATERIAL WAS PRODUCED BY THE ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 11 | 13 ASSESSE E AND IN ABSENCE OF NECESSARY EVIDENCE, THE EXPLANATION GIVEN BEFORE THE AO BY THE ASSESSEE CANNOT BE GIVEN ANY CREDENCE AND HENCE, ADDITION IN THIS REGARD MAY KINDLY BE SUSTAINED. 16. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE FIND NO ERROR IN THE FINDIN GS OF THE LD CIT(A) THAT NO MATERIALS WERE PRODUCED BEFORE THE AUTHORITIES BELOW. BEFORE US, NO VALID EXPLANATION WAS SUBMITTED BY LD COUNSEL FOR THE ASSESSEE TO PROVE THAT SILPA AGARWAL HAS PAID THE AMOUNT OF RS.1,25,000/ - TO THE ASSESSEE . HENCE, GROUND NO.5 OF THE ASSESSEE IS DISMISSED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.263/CTK/2018: A.Y. 2011 - 12 - SANJU AGARWAL. 18 . GROUND NOS.1 & 3 ARE GENERAL IN NATURE. 19. THE EFFECTIVE GROUND NO.2 OF THE APPEAL OF THE ASSESSEE READS AS UNDER: 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE AO AMOUNTING TO RS.50 LAKHS RECEIVED FROM ARSS DEVELOPERS LTD., AS UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME TAX ACT, 1961. 20. LD A.R. SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE VIDE LETTER DATED 23.6.2015 SUBMITTED THAT THE ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 12 | 13 AMOUNT OF RS.50 LAKHS HAS BEEN PAID TO THE HUSBAND OF THE ASSESSEE SHRI SUBASH AGARWAL DIRECTLY FROM ARSS DEVELOPERS LTD., ON THE REQUEST OF THE ASSESSEE, HOWEVER, WHILE PREPARING THE STATEMENT OF AFFAIRS, THE SAID TRANSACTION WAS NOT INCORPORATED WHICH IS AN INADVERTENT MISTAKE. LD A.R. FURTHER SUBMITTED THAT SINCE THE HUSBAND OF THE ASSESSEE SHRI SUBASH AGARWAL HAS CONCEDED THAT AMOUNT O F RS.50 LAKHS MAY BE TREATED AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT, THEREFORE, NO ADDITION IS CALLED FOR IN THE HANDS OF WIFE SANJU AGARWAL I.E THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD CIT(A) MAY KINDLY BE DELETED . 21. REPLYING TO ABOVE, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. HOWEVER, HE COULD NOT CONTROVERT THE FACT THAT THE AMOUNT OF RS.50 LAKHS WAS DIRECTLY TRANSFERRED FROM THE ACCOUNT OF ARRS DEVELOPERS LTD., TO THE BANK ACCOUNT OF THE HUSBAND OF T HE ASSESSEE SHRI SUBASH AGARWAL AND SAME WAS NOT ROUTED THROUGH THE BANK OF THE ASSESSEE. THE ASSESSEE HAS NOTHING TO DO WITH SAID TRANSACTION WHICH HAS BEEN ACCEPTED BY HER HUSBAND BEFORE THE TRIBUNAL BY NOT PRESSING GROUND NO.6 OF APPEAL. 22. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT WHEN ADDITION OF RS.50 LAKHS WAS MADE IN THE HANDS ITA NO.263& 264/CTK/2018 ASSESSMENT YEAR : 2011 - 12 P A G E 13 | 13 OF THE HUSBAND OF THE ASSESSEE U/S.2(22)(E) OF THE ACT AS THE AMOUNT WAS DIRECTLY TRANSFERRED FROM ARSS DEVELOPERS LTD., TO THE ACCOUNT OF T HE HUSBAND OF THE ASSESSEE, THEREFORE, NO FURTHER ADDITION IN THE HANDS OF THE ASSESSEE IS CALLED FOR. CONSEQUENTLY, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 23 / 1 2 /201 9 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 23 / 1 2 /20 1 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : SANJU AGARWAL/SUBASH AGARWAL PLOT NO.N - 1/93, IRC VILLAGE, NAYAPALLI, BHUBANESWAR 2. THE RESPONDENT. DCIT, CIRCLE 1(1), BHUBANESWAR. 3. THE CIT(A) - 1 , BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//