SHRI RAVI KEWALTANI, DURG V. INCOME TAX OFFICER, WARD 2(1), BHILAI

ITA 278/RPR/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4178 (ITAT-RAIPUR)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITUPARAN NAMDEO
• Assessee Lawyers: R B DOSHI
• Section: 69; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.278/RPR/2017 ASSESSMENT YEAR : 2014-15 SHRI RAVI KEWALTANI, BOMBAY FOOTWEAR, G.E. ROAD, PACHARI PARA, DURG (CG). VS. ITO, WARD- 2(1), BHILAI (CG). PAN : AULPK6656M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. B. DOSHI, CA DEPARTMENT BY : SHRI RITUPARAN NAMDEO, DR DATE OF HEARING : 06-08-2018 DATE OF PRONOUNCEMENT : 12-10-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 05.09.2017 OF THE LD. CIT(A)-II, RAIPUR (CG) RELATI NG TO ASSESSMENT YEAR 2014-15. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER :- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- II ERRED IN OF HOLDING THE ADDITION OF RS.53,40,510/- U/S 69A OF THE INCOME TA X ACT, 1961, MADE BY THE A.O. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING OF FOO TWEAR UNDER THE STYLE OF M/S GANAPATI ENTERPRISES. HE FILED HIS RETURN OF INCOM E ON 22.12.2014 DECLARING TOTAL INCOME OF RS.6,66,620/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE 2 ITA NO.278/RPR/2017 ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS TW O SEPARATE SAVINGS ACCOUNTS MAINTAINED WITH ORIENTAL BANK OF COMMERCE AND KARNA TAKA BANK. THE ASSESSING OFFICER EXAMINED THE ENTRIES IN THESE SAV INGS BANK ACCOUNTS AND ASKED THE ASSESSEE TO EXPLAIN THE DEPOSITS OF CASH MADE THEREIN. IT WAS EXPLAINED BY THE ASSESSEE THAT THE DEPOSITS ARE TRA NSFER OF FUNDS FROM ONE SAVINGS BANK ACCOUNT TO ANOTHER SAVINGS BANK ACCOUN T AND ALSO FROM FUNDS RECEIVED FROM SALE OF PROPERTY DULY SHOWN IN THE IN COME TAX RETURN. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE HAD CASH IN HAN D AND, THEREFORE, SOME OF THE DEPOSITS IN CASH ARE OUT OF SUCH CASH IN HAND. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND MADE ADDITION OF RS.53,40 ,510/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED MONEY U/S 69A OF THE I. T. ACT BY OBSERVING AS UNDER :- HEREIN ABOVE, (O) & (K) SUFFIXED TO CASH DEPOSITS AND WITHDRAWAL ARE RELATED TO ORIENTAL BANK OF COMMERCE AND KARNATAKA BANK. THE ABOVE TABLE IS PREPARED FROM BANK ACCOUNT STATEMENT OF TWO SAVING BANKS AND ONLY CASH DEPOSITS AND CASH WITHDRAWAL BY THE SELF CHEQUES ARE ACCOUNTED FOR. HENCE, LOOKING TO THE ABOVE TABLE, IT IS CLEAR THAT IF OPENING CASH IN HAND AT RS.1346 852/- AS CLAIMED BY THE ASSESSEE WHICH IS ALREADY SHOWN FOR READY REFERENCE IN THE P ARA NO.2, THEN AS ON 30.03.2014, CASH IN HAND WILL BE (-) RS.2271138/- (RS.1346852/- MINUS RS.1573990/-). MINUS CASH BALANCE OF (-) RS.227138/- IS NOT POSSIBLE AT ALL. AS PER THE ASSESSEES TABLE, RS.125000/- WITHDRAWAL FROM THE BUSINESS CONCERN AN D DEPOSITED INTO THE SAVING ACCOUNT DOES NOT HAVE ANY EFFECT BEING MINUS PLUS O F THE SAME AMOUNT CREATES ZERO. THUS, ANALYSIS OF THE ASSESSEES BANK ACCOUNT ALONG WITH THE ASSESSEES SUBMISSION TO EXPLAIN THE CREDIT IN THE BANK ACCOUNT, DOES NOT AP PROPRIATE, AND SO THE TOTAL CASH DEPOSIT OF RS.5340510/- IS UNEXPLAINED MONEY U/S 69 A OF THE INCOME TAX ACT, 1961 AND DESERVED TO BE ADDED IN THE HANDS OF THE ASSESS EE. ALSO PENALTY PROCEEDINGS IS INITIATED U/S 271(1)(C). 3 ITA NO.278/RPR/2017 5. BEFORE THE LD. CIT(A), ASSESSEE MADE ELABORATE S UBMISSIONS. HOWEVER, THE LD. CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPL ANATION GIVEN BY THE ASSESSEE AND SUSTAINED THE ADDITION MADE BY THE ASSESSING OF FICER BY OBSERVING AS UNDER :- I HAVE GONE THROUGH THE GROUNDS OF APPEAL, SEEN TH E ORDER OF THE AO AND PERUSED THE SUBMISSIONS OF THE APPELLANT. DURING THE APPEAL HEA RINGS THE APPELLANT SUBMITTED A STATEMENT WHICH WAS FURNISHED DURING THE ASSESSMENT PROCEEDINGS IN WHICH THE CASH WITHDRAWALS AND DEPOSITS ARE EXPLAINED. IT IS SEEN FROM THE STATEMENT THAT ON 5.7.2013 CASH OF RS. 24,00,000/- WAS WITHDRAWN FROM KARNATAK A BANK AND THEREAFTER ON 8.7.2013 AND 10.7.2013 THERE WERE FURTHER WITHDRAWA LS OF RS. 5,00,000/- AND RS.1,00,000/- RESPECTIVELY. OUT OF THE ABOVE WITHDR AWALS CASH HAS BEEN DEPOSITED IN ORIENTAL BANK SAVINGS ACCOUNT AND RE-DEPOSITED IN K ARNATAKA BANK SAVINGS ACCOUNT OVER A PERIOD OF TWO MONTHS. IN THE FUND FLOW STATE MENT AS ON 31.3.2014 IT WAS EXPLAINED THAT RS. 30,00,000/- WAS RECEIVED ON ACCO UNT OF PROPERTY SALE AND DEPOSITED IN THE KARNATAKA BANK. THIS AMOUNT WAS WITHDRAWN ON VARIOUS DATES AND DEPOSITED IN THE ORIENTAL BANK AS WELL AS IN THE KARNATAKA BANK ON DIFFERENT DATES. THERE ARE DEPOSITS OF VARIOUS AMOUNTS THAT ARE EXPLAINED AS R ECEIVED FROM GANAPATI ENTERPRISES AND HAVE BEEN DEPOSITED IN THE ORIENTAL BANK SAVING S ACCOUNT FROM TIME TO TIME. IN THIS MANNER THE APPELLANT HAS SOUGHT TO EXPLAIN THA T THE DEPOSITS ARE FROM FUNDS TRANSFERRED FROM ONE SAVINGS BANK ACCOUNT TO ANOTHE R SAVINGS BANK ACCOUNT, FROM SALE OF PROPERTY AND FROM RECEIPTS OF GANAPATI ENTE RPRISES. 4. ON PERUSAL OF THE SUBMISSIONS AND STATEMENTS OF THE APPELLANT I NOTICE THAT THERE IS NO LINK ESTABLISHED BY THE APPELLANT IN TH E CASH WITHDRAWALS MADE FROM KARNATAKA BANK AND CASH DEPOSITED IN THE ORIENTAL B ANK. I FURTHER OBSERVE THAT THE CASH WITHDRAWAL FROM KARNATAKA BANK ON 5.7.2013 HAS BEEN RETAINED BY THE APPELLANT AND DEPOSITED IN DIFFERENT AMOUNTS IN THE ORIENTAL BANK SAVINGS ACCOUNT SPREAD OVER A PERIOD OF TWO MONTHS I.E. FROM 5.7.20 13 TO 4.9.2013. NO CONCLUSIVE EXPLANATION WITH DOCUMENTARY EVIDENCE HAS BEEN BROU GHT ON RECORD REGARDING THE WITHDRAWALS MADE FROM THE KARNATAKA BANK BEING THE SAME CASH DEPOSITED IN THE ORIENTAL BANK SAVING ACCOUNT OVER A PERIOD OF TWO M ONTHS. COMING TO THE EXPLANATION THAT RS. 30,00,000/- WAS RECEIVED ON ACCOUNT OF SAL E OF PROPERTY THERE IS NO MATERIAL THAT THE IMPUGNED AMOUNT RECEIVED IN CASH AND DEPOS ITED IN THE SAVINGS BANK ACCOUNT REPRESENTS SALE OF PROPERTY BY THE APPELLANT. THE A PPELLANT HAS NOT BEEN ABLE TO EXPLAIN THE SOURCES OF THE CASH DEPOSITS IN THE SAV INGS ACCOUNTS FROM EITHER AS FUNDS TRANSFER FROM ONE BANK ACCOUNT TO ANOTHER OR FROM T HE SALE PROCEEDS RECEIVED FROM THE SALE OF PROPERTY. THESE ISSUES HAVE BEEN ADJUDI CATED BY THE HON'BLE COURTS WHEREIN THE RATIO OF THEIR DECISIONS ARE APPLICABLE TO THE PRESENT CASE. IN THE CASE OF SMT. KAVITA CHANDRA VS. CIT(A) PANCHKULA REPORTED I N 81 TAXMANN.COM 317 THE HON'BLE PUNJAB AND HARYANA HIGH COURT OBSERVED THAT THERE WAS NO LINK IN THE CASH WITHDRAWN FROM THE BANK TO THE CASH DEPOSITS SO MAD E AND HENCE AFFIRMED THE ACTION OF THE AO IN MAKING THE ADDITION ON ACCOUNT OF UNEX PLAINED CASH DEPOSITS. THE HON'BLE HYDERABAD TRIBUNAL IN THE CASE OF MIR BASHE ERUDDIN ALI KHAN VS. ITO WARD 6(3), HYDERABAD REPORTED IN 42 TAXMANN.COM 69 OBSER VED THAT IT REMAINS UNEXPLAINED AS TO WHY THE ASSESSEE HAD WITHDRAWN SUCH HUGE CASH AND KEPT IT WITH HIM WHEN HE 4 ITA NO.278/RPR/2017 HAD BANK ACCOUNTS. IN THE CASE OF MANOJ KUMAR JAIN VS. ITO REPORTED IN 25 TAXMANN.COM 440 THE HON'BLE DELHI TRIBUNAL CONFIRME D THE ADDITIONS MADE ON ACCOUNT OF CASH DEPOSITS BY HOLDING THAT THERE WAS NO PROOF THAT IT WAS THE SAME CASH WITHDRAWN AND DEPOSITED IN THE BANK ACCOUNTS. THE H ON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CHAND PRAKASH VIJ VS. CIT REPORTED IN 315 ITR 251 ON THE ISSUE OF CASH DEPOSITS ON ACCOUNT OF SALE OF RESIDE NTIAL PROPERTY HELD THAT THE STORY OF SALE OF RESIDENTIAL PROPERTY AND CASH DEPOSITED FRO M IT IN THE BANK ACCOUNT REMAINED UNPROVED. THE DECISIONS OF THE HON'BLE APEX COURT I N THE CASE OF SUDHIR K SHARMA (HUF) VS. CIT -III, LUDHIANA REPORTED IN 69 TAXMANN .COM 219 AND OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SUSHIL MODI VS. CIT CENTRAL-II REPORTED IN 59 TAXMANN.COM 63 ARE ALSO RELIED ON. 5. IN THE LIGHT OF THE ABOVE OBSERVATIONS THE AO HA S RIGHTLY REJECTED THE EXPLANATION OF THE APPELLANT AND BROUGHT THE IMPUGN ED DEPOSITS TO TAX U/S. 69 A OF THE ACT. ACCORDINGLY THE ADDITION OF RS.53,40,510/- U/ S. 69A OF THE ACT IS CONFIRMED. 6. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOSE D THE ORDER OF THE LD. CIT(A) IN SUSTAINING THE ADDITION MADE BY THE ASSES SING OFFICER. REFERRING TO PAGE 7 AND 8 OF THE PAPER BOOK, HE SUBMITTED THAT T HE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAS GIVEN DETAILS OF THE OPENING CASH IN HAND OF RS.13,46,852/- WHICH HAS BEEN REJECTED BY THE AS SESSING OFFICER. HE SUBMITTED THAT THE CHARTS PREPARED BY THE ASSESSING OFFICER IN THE BODY OF THE ASSESSMENT ORDER AND THE CALCULATION BY THE ASSESSE E FOR BALANCING MISTAKE ARE DIFFERENT AND A PERUSAL OF THE SAME SHOWS THAT THER E IS NO NEGATIVE CASH BALANCE IN THE HANDS OF THE ASSESSEE. THERE WAS A TOTALING MISTAKE AND RECTIFICATION APPLICATION FILED BY THE ASSESSEE U/S 154 HAS NOT Y ET BEEN DISPOSED OFF. REFERRING TO PAGE 19 OF THE PAPER BOOK, HE SUBMITTE D THAT SINCE THE OPENING CASH BALANCE IS NOT DISPUTED BY THE ASSESSING OFFIC ER AND THE SALE PROCEEDS OF 5 ITA NO.278/RPR/2017 THE TWO PROPERTIES HAVE BEEN ACCEPTED BY THE ASSESS ING OFFICER AND SINCE THE SALE PROCEEDS WERE DEPOSITED IN THE BANK ACCOUNT, T HEREFORE, WITHOUT CONSIDERING THE SAME, THE ASSESSING OFFICER COULD N OT HAVE MADE THE ADDITION. HE ACCORDINGLY SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) SHOULD BE DELETED. 8. THE LD. DR ON THE OTHER HAND REFERRING TO PAGE 4 OF THE PAPER BOOK SUBMITTED THAT THE OPENING CASH BALANCE SHOWN BY TH E ASSESSEE WAS RS.12,57,796/-. THEREFORE, THE OPENING CASH BALANC E NOW GIVEN BY THE ASSESSEE SHOWS THAT THOSE ACCOUNTS ARE MANIPULATED. HE ACCO RDINGLY SUBMITTED THAT SINCE THE ORDER OF THE LD. CIT(A) IS A REASONED ONE, THER EFORE, THE SAME SHOULD BE UPHELD AND THE GROUND RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAS SHOWN OPENING CASH BALANCE OF RS.13,48,852/- AND THE SAME HAS NOT BEEN DISPUTED B Y THE ASSESSING OFFICER. WE FURTHER FIND THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE SALE PROCEEDS OF THE TWO PROPERTIES WHICH WERE DEPOSITED IN THE B ANK ACCOUNT AS ARGUED BY THE ASSESSEE. FURTHER, THE RECTIFICATION APPLICATION F ILED BY THE ASSESSEE U/S 154 IS STILL PENDING. IT IS ALSO AN ADMITTED FACT THAT AS PER PAGE 4 OF THE PAPER BOOK, THE ASSESSEE HAS GIVEN OPENING CASH BALANCE OF RS.1 2,57,796/- AS AGAINST RS.13,48,852/- GIVEN AT THE TIME OF ASSESSMENT PROC EEDINGS. CONSIDERING THE 6 ITA NO.278/RPR/2017 TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERE ST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER WITH A DIRECTION TO GIVE ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE H IS CASE. WHILE DOING SO, HE SHALL CONSIDER THE ARGUMENT OF THE ASSESSEE THAT TH E SALE PROCEEDS OF THE TWO PROPERTIES HAVE BEEN DEPOSITED IN THE BANK ACCOUNT AND CONSIDER THE OPENING CASH BALANCE GIVEN BY THE ASSESSEE AT THE TIME OF A SSESSMENT PROCEEDINGS AND PASS APPROPRIATE ORDER. NEEDLESS TO SAY, THE ASSES SING OFFICER SHALL DECIDED THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GRO UND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH OCTOBER, 2018. SD/- SD/- (SUCHITRA KAMBLE) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12-10-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., RAIPUR. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY ITAT, RAIPUR