ITO, Ghaziabad V. Sh. Kamal Kumar Modi, Modinagar

ITA 2659/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98036 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI
• Assessee Lawyers: ASHOK GA NDHI
• Keywords: Income from undisclosed sources; Salary income; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH D NEW DELHI BEFORE : SHRI I.C. SUDHIR , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2659/DEL./2013 ASSTT. YEAR : 2009 - 10 INCOME - TAX OFFICER, VS. KAMAL KUMAR MODI, WARD 1(5), GHAZIABAD. MODI BHAWAN, MODINAGAR. [ABNPM 2548 P] (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RICHA RASTOGI, SR. DR RESPONDENT BY : SH. ASHOK GANDHI, ADV. DATE OF HEARING : 15.10.2015 DATE OF PRONOUNCEMENT : 04 .12.2015 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 22.02.2013 OF LD. CIT(A), GHAZIABAD FOR THE ASSESSMENT YEAR 2009 - 10 ON THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.18,92,500/ - ON THE BASIS OF THE CASH FLOW STATEMENT AND ACCEPTING THE CASH IN HAND MERELY ON THE BASIS OF THE WEALTH TAX RETURN FILED IN WHICH OPENING CASH IN HAND OF RS.3,88,706/ - WA S SHOWN. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE A.O. S OBSERVATION THAT THE TOTAL EARNING OF THE ASSESSEE I.E. RS.1,38,327/ - IS DISPROPORTIONATE TO HIS CASH DEPOSIT IN BANK I.E. RS.18,92,500/ - . ITA NO. 2659/DEL./2013 2 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.7,50,000/ - ON ACCOUNT OF INTEREST AND EMI PAID TO THE VARIOUS BANKS/FINANCIAL INSTITUTIONS WITHOUT APPRECIATING THE A.O. S OBSERVATION THAT IT WAS OUT OF HIS INCOME FROM UNDISCLOSED SOURCES. 2 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL HAVING SOURCE OF INCOME FROM SALARY AS DIRECTOR OF TWO COMPANIES, FILED ITS RETURN OF INCOME ON 25.03.2010 DECLARING TOTAL INCOME AT RS.1,05,460/ - . ON THE BASIS OF AIR INFORMATION RECEIVED BY AO, IT WAS NOTICED THAT THE ASSESSEE HAD DEPOSITED CASH IN HIS SAVING BANK ACCOUNT OF RS.18,92,500/ - . THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THIS DEPOSIT. THE ASSESSEE VIDE REPLY DATED 26.08.2011 AND 28.11.2011 EXPLAINED THE CASH DEPOSITS IN TH E BANK ACCOUNT WITH THE REQUISITE DETAILS AND ALSO FURNISHED THE CASH FLOW STATEMENT, WHICH SHOWED OPENING CASH BALANCE OF RS.3,88,706/ - AS CORROBORATED BY THE CASH IN HAND SHOWN BY THE ASSESSEE IN WEALTH - TAX RETURN FOR A.Y. 2009 - 10 FILED ON 2 ND MARCH, 200 9. THE ASSESSEE ALSO EXPLAINED THAT THE ASSESSEE, BEING THE DIRECTOR OF TWO COMPANIES RECEIVES SALARY PER MONTH OF RS.12,000/ - AND RS.19,440/ - RESPECTIVELY. IT WAS ALSO EXPLAINED THAT THE ASSESSEE MADE FREQUENT WITHDRAWALS FROM ONE BA NK AND DEPOSITS IN OTH ER BA NKS AS AND WHEN NEED AROS E. IT WAS SUBMITTED THAT THE ASSESSEE HAD TAKEN SHORT TERM LOANS FROM THE FOLLOWING PERSONS/BANKS AND REPAID THE SAME THROUGH EMI/INTEREST : (I). MANDIRA RAI RS.6,00,000/ - (II). M/S. BARCLAYS BANK RS.10,00,000/ - (III). R ELIANCE CAPITAL LTD. RS. 5,00,000/ - ITA NO. 2659/DEL./2013 3 (IV). ING VYSYA BANK LTD. RS.7,50,000/ - IT WAS SUBMITTED THAT THE ASSESSEE ALSO ADVANCED MONEY TO OTHERS AND HAS REPAID THE LOANS BY WAY OF EMIS/INTEREST. THE AO WAS NOT SATISFIED WITH THE EXPLANATIONS OF THE ASSESS EE AND MADE ADDITION OF RS.18,92, 5 00/ - U/S. 68 OF THE ACT ON ACCOUNT OF CASH DEPOSITED IN THE BANK OUT OF UNDISCLOSED SOURCES AND ALSO MADE ADDITION OF RS.7,50,000/ - ON ACCOUNT OF REPAYMENT OF LOAN FROM UNDISCLOSED SOURCES OF INCOME. THE ASSESSEE CHALLENGE D THE ABOVE ADDITIONS MADE BY AO BY FILING AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE DOCUMENTARY EVIDENCE & CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE AND THE EXPLANATIONS OFFERED BY ASSESSEE, DELETED THE ABOVE TWO ADDITION S VIDE IMPUGNED ORDER. THE REVENUE, BEING AGGRIEVED, HAS COME UP IN THIS APPEAL BEFORE US. 3. DURING THE COURSE OF HEARING, THE LD. DR RELYING UPON THE ORDER OF THE AO, SUBMITTED THAT THE LD.CIT(A) HAS ERRONEOUSLY DELETED THE ADDITIONS MADE BY THE AO. IT WAS SUBMITTED THAT AS PER RETURN OF INCOME FILED BY THE ASSESSEE, THE TOTAL INCOME WAS DECLARED AT RS.1,38,327/ - AND CASH IN HAND SHOWN IN THE W EALTH - TAX RETURN WAS ONLY OF RS.3,88,706 / - AS OPENING BALANCE . OUT OF THIS MUCH OF INCOME, THE CASH DEPOSITED IN THE BANK ACCOUNT OR OTHER INVESTMENTS MADE BY THE ASSESSEE STOOD UNEXPLAINED. THEREFORE, THE AO WAS JUSTIFIED IN ITA NO. 2659/DEL./2013 4 MAKING THE IMPUGNED ADDITIONS AND THUS , THE IMPUGNED ORDER DESERVES TO BE SET ASIDE. 4. THE LD. AR OF THE ASSESSEE , ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT THE CASH FLOW STATEMENT SUBMITTED BEFORE THE AUTHORITIES BELOW UNEQUIVOCALLY GOES TO EXPLAIN THE SOURCE OF DEPOSITS AND WITHDRAWALS WHICH HAS BEEN PROPERLY CONSIDERED BY THE LD. CIT(A) IN THE IMPUGNED ORD ER. THEREFORE, THE ORDER OF THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MATERIAL AVAILABLE BEFORE US AND WE FIND NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. IT IS NOTABLE THAT BY WAY OF CASH FLOW STATEMENT FURNISHED BEFORE THE AUTHORITIES BELOW THE ASSESSEE HAS PROPERLY EXPLAINED THE CASH DEPOSITS OUT OF OPENING CASH IN HAND, WHICH STOOD CORROBORATED BY THE WEALTH TAX RETURN FILED BY THE ASSESSEE AND ALSO BY WITHDRAWALS MADE FROM TIME TO TIME. THERE IS NOTHING ON RECORD TO REBUT THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE IS THE DIRECTOR OF TWO COMPANIES AND WHEN SHORT TERM BUSINESS/PROFESSIONAL FUNDS ARE REQUIRED, HE WITHDRAWS MONEY FROM ONE BANK AND DEPOSITS INTO OTHER BANK ACCOUNT , WHICH GO TO EXPLAIN VARIOUS CASH DEPOSITS AND WITHDRAWALS MADE INTO THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE IS REGULARLY FILING ITS WEALTH - TAX RETURN, WHICH STOOD VERIFIED BY THE LD. CIT(A) ITA NO. 2659/DEL./2013 5 FROM THE RECORD. THE LD. DR COULD NOT RAISE A FINGER ON T HE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. IT IS ALSO WORTH CONSIDERATION THAT THE OPENING CASH BALANCE OF RS.3,88,706/ - SHOWN IN THE CASH FLOW STATEMENT STANDS CORROBORATED FROM THE WEALTH - TAX RETURN OF THE DISPUTED YEA R AND THE CLOSING BALANCE OF RS.12,22,822/ - SHOWN IN THE SAID CASH FLOW STATEMENT ALSO STOOD TALLIED WITH THE WEALTH - TAX RETURN OF THE ASSESSEE FILED FOR THE NEXT YEAR. THEREFORE, IN OUR OPINION, THERE IS NO REASON NOT TO BELIEVE THE ENTIRE SERIES OF CASH DEPOSITS AND WITHDRAWALS SHOWN IN THE SAID CASH FLOW STATEMENT, WHICH GO TO PROPERLY EXPLAIN THE OBJECTIONS OF THE ASSESSING OFFICER , PARTICULARLY WHEN THE ASSESSING OFFICER HAS NOT CONTROVERTED THE TRANSACTIONS SHOWN IN THE CASH FLOW STATEMENT . IN THIS VI EW OF THE MATTER, THE LD. CIT(A), IN OUR CONSIDERED OPINION, WAS QUITE JUSTIFIED IN DELETING THE IMPUGNED ADDITIONS, MADE BY THE AO. WE, THEREFORE, FIND NO JUSTIFICATION TO INTERFERE WITH THE IMPUGNED ORDER. 6. AS A RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.12.2015 . SD/ - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 04.12.2015 *AKS/ -