ANANT GAJANAN BANCHPALLIWAR, Nagpur V. ITO-WARD-5(1), Nagpur

ITA 285/NAG/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7656 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: V V SARANJAME
• Keywords: Unexplained cash credit; Unexplained investment; Opportunity of being heard
• Section: 148; 154; 68

Judgement Text

1 ITA NO. 285/NAG/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 285/NAG/2014. ASSESSMENT YEAR : 2010 - 11. SHRI ANAN T GAJANAN BANCHPALLIWAR, THE INCOME - TAX OFFICER, NGPUR. VS. WARD - 5(1), NAGPUR. PAN ABWPB2508H. APPELLANT. RESPONDENT. APPELLANT BY : SHRI V.V.SARANJAME. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 13 - 01 - 2017. DATE OF PRONOUNCEMENT : 16 TH JANUARY, 2017. O R D E R. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER O F LEARNED CIT(APPEALS) - II, NAGPUR 11 - 02 - 2014 AND PERTAINS TO ASSESSMENT YEAR 2010 - 11. THE GROUND OF APPEAL READS AS UNDER : THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.619547/ - OUT OF THE TOTAL ADDITION OF RS.21,12,782/ - BY NOT CONSIDERING THE AGRICULTURAL INCOME OF THE APPELLANT AND THE AFFIDAVIT FILED BEFORE THE A.O. AND THIS HONOURABLE COURT BE PLEASED TO DELETE THE RESIDUAL ADDITION OF RS.6,19,547/ - AS ONE MADE W ITHOUT CONSIDERING THE FACTS IN THEIR PROPER PERSPECTIVE. 2. EARLIER THIS APPEAL WAS DISPOSED OF EXPARTE BY THIS TRIBUNAL VIDE ORDER DATED 23 - 11 - 2015. LATER ON THE ASSESSEE HAS FILED A MISCELLANEOUS APPLICATION AND THE ORDER WAS RECALLED VIDE ORDER DATED 6 TH JANUARY, 2017 AND THEREAFTER THIS APPEAL WAS HEARD. 2 ITA NO. 285/NAG/2014. 3. IN THIS REGARD I MAY GAINFULLY REFER TO THE FACTS AND EARLIER DECISION OF THE TRIBUNAL AS UNDER : 4. THE ASSESSEE IN THIS CASE IS AN EMPLOYEE OF MALARIA DEPARTMENT, GOVERNMENT OF MAHARASHTRA. IN FORMATION WAS OBTAINED REGARDING CASH DEPOSIT IN VARIOUS BANK ACCOUNTS. IN SUPPORT OF THE CASH DEPOSIT, THE ASSESSEE HAD SUBMITTED A CASH FLOW STATEMENT. THE AO HAS ORIGINALLY MADE AN ADDITION OF RS.21,12,782/ - BUT LEARNED CIT(APPEALS) NOTED THAT FROM THE CASH FLOW STATEMENT AND THE REMAND REPORT FROM THE AO THERE WAS A NEGATIVE CASH BALANCE OF RS.6,20,547/ - . THE ASSESSEES STATEMENT THAT THERE WAS AGRICULTURAL INCOME WHICH WAS NOT BACKED BY ANY EVIDENCE WAS CONSIDERED BY THE LEARNED CIT(APPEALS) AS A SEL F SERVING STATEMENT. HENCE THE LEARNED CIT(APPEALS) CONFIRMED THE ADDITION OF RS.6,19,547/ - . 5. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I FIND THAT THE CASH DEPOSITS WERE FOUND IN THE ASSESSEES BANK ACCOUNT TO THE TUNE OF RS.21,12,782/ - . LEARNED CIT(APPEALS) GRANTED SUBSTANTIAL RELIEF BY ACCEPTING THE CASH FLOW STATEMENT OF THE ASSESSEE WHICH SHOWED BALANCE AS ON 31 - 03 - 2007, 31 - 03 - 2008 AND 31 - 03 - 2009 AT |RS.9,08,500/ - , RS.10,80,150/ - AND RS.13,43,303/ - RESPECTIVELY. IN MY CONSIDERED OPINION ACCEPTING SUCH LARGE CASH BALANCE IN THE HANDS OF THE ASSESSEE, A GOVERNMENT EMPLOYEE, IS SUFFICIENT CONCESSION. MERE STATEMENT THAT THE ASSESSEE HAD AGRICULTURAL INCOME DEVOID OF ANY COGENT EVIDENCE CANNOT BE ACCEPTED AS EXPLANAT ION FOR THE NEGATIVE CASH BALANCE. HENCE IN MY CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY I UPHOLD THE SAME. 7. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS DISMISSED. 4. UPON RECALL LEARNED COUNSEL O F THE ASSESSEE HAS MADE THE FOLLOWING SUBMISSIONS : APPELLANT FILED RETURN IN THE STATUS OF INDIVIDUAL VOLUNTARILY AT RS . 252707/ - ON 23.07.2010. APPELLANT IS EMPLOYED WITH MALARIA DEPARTMENT WITH STATE GOVERNMENT. THE APPELLANT RECEIVED NOTICE U/S 143(2). THE CASE WAS SCRUTINIZED ON THE BASIS OF AIR INFORMATION U/S 285 B A AS THE APPELLANT HAD DEPOSITED MORE THAN RS.10,00,00/ - IN CASH 3 ITA NO. 285/NAG/2014. DURING THE YEAR IN HIS BANK ACCOUNT . , T HE APPELLANT HAD SOLD HIS ANCESTRAL HUF AGRICULTURAL LANDS IN THE BACKWARD DISTRICT OF GADCHIROLI . THE SALE PROCEEDS WERE DEPOSITED IN CASH. THE LEARNED A . O . MADE FURTHER INQUIRIES ABOUT THE SOURCE OF CASH DEPOSIT. THE APPELLANT PREPARED CASH FLOW STATE MENT BY CONSIDERING THE DEPOSITS AND WITHDRAWALS FROM HIS THREE BANK ACCOUNTS WITH STATE BANK OF INDIA. 1 AT GADCHIROLI 2 AT SURENDRA NAGAR NAGPUR 3. AT RAMDASPETH NAGPUR IT WAS STATED THAT THE SBI A/C AT GADCHIROLI AND SURENDRA NAGAR NAGPUR WERE USED BY HI S HUF AND SBI A/C AT RAMDASPETH NAGPUR WAS USED BY HIM IN CAPACITY AS INDIVIDUAL WHERE SALARY WAS DEPOSITED. THE LEARNED A . O . DID NOT ACCEPT CONTENTION OF THE ASSESSEE ABOUT INDIVIDUAL AND HUF. AND MADE THE HUGE ADDITION AS FOLLOWS: 1. INCOME FROM HOUSE PROPERTY RS.3,18,175/ - (CLAIMED BY APPELLANT AS INCOME OF HUF) 2. INCOME FROM OTHER SOURCES BANK INTEREST RS. 5,097/ - 3. UNEXPLAINED CASH CREDIT U/S 68 RS. 21,12,782/ - 4. ` UNEXPLAINED INVESTMENT IN HOUSE PROPERTY RS. 1,84,040 / - ============= RS.26,20,094/ - OUT OF THE ABOVE FOLLOWING ADDITIONS WERE CHALLENGES IN APPEAL. 1. INCOME FROM HOUSE PROERTY RS.318175/ - CLAIMED TO BE HUF INCOME 2. UNEXPLAINED CASH CREDIT U/S 68 RS.21,12,782/ - 3. UNEXPLAINED INVESTMENT IN THE HOUSE PROPERTY. RS.1,84,040/ - ============= 26,14,997/ - ============= 4 ITA NO. 285/NAG/2014. THAT MEANWHILE NOTICES U/S 148 WERE ISSUED TO THE ASSESSEE FOR A.Y. 2007 - 08, 2008 - 09 AND 2009 - 10 TO TAX HOUSE PROPERTY INCOME (RENTAL INCOME). THE APPELLANT PREFERRED TO APPEAL BEFORE THE LEARNED CIT(A) - II. THE LEARNED CIT(A) AFTER SENDING THE CASE TO A.O. FOR REMAND DIRECTED THE A.O. TO GET CASH FLOW STATEMENT. THE L EARNED A.O. PREPARED HIS REMAND REPORT AND CAME TO A CONCLUSION THAT OUT OF RS.21,12,782/ - RS.14,93,234/ - WERE EXPLAINED AND RS.619547/ - REMAINED UNEXPLAINED. THE LEARNED CIT(A) HELD THAT THE INCOME FROM HOUSE PROPERTY BELONGED TO UF, AFTER VERIFYING CERT AIN DOCUMENTS OF ANCESTRAL PROPERTY. THE LEARNED CIT(A) ALSO HELD THAT THE UNEXPLAINED INVESTMENT OF RS.184040/ - ALSO STOOD EXPLAINED BY PASSING FROM ORDER U/S 154 (PAGE 8 TO 9) AT PARA 3 OF THE ORDER. THE ONLY GRIEVANCE IS ABOUT THE UNEXPLAINED ASH OF RS. 619547/ - FOR WHICH THIS APPEAL IS BEING FILED. 5. LEARNED COUNSEL OF THE ASSESSEE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAD SUFFICIENT AGRICULTURAL INCOME FROM HUF. THIS WAS ALSO SHOWN IN RETURNS OF INCOME SUBSEQUENTLY AND HAS BEEN ACCEPTED BY THE DEPARTMENT THOUGH LEARNED COUNSEL ADMITTED THAT THERE WAS NO SUCH DISCLOSURE OF AGRICULTURAL INCOME BY HUF EARLIER. LEARNED COUNSEL SUBMITTED THAT THIS DOES NOT DEN Y THE FACT THAT IN THE HUF THERE WAS AGRICULTURAL LAND BEFORE ALSO AND THE INCOME THERE FROM WAS GENERATED AND WAS USED BY THE ASSESSEE AS HIS CASH IN FLOW. LEARNED COUNSEL PLEADED THAT THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO CANVAS THIS ASPECT BEFORE THE AO. 6. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE LEARNED CIT(APPEALS). 7. UPON CAREFUL CONSIDERATION I NOTE THAT INTEREST OF JUSTICE WILL BE 5 ITA NO. 285/NAG/2014. SERVED IF THE ASSESSEE IS GIVEN AN OPPORTUNITY TO CANVAS THE ISSUE OF AGRICULTURAL INCOME THROUGH HUF IN SUPPORT OF THE BALANCE ADDITION OF RS.6,19,547/ - . HENCE THE ISSUE REGARDING THE BALANCE OF RS.6,19,547/ - IS REMITTED TO THE FILE OF THE A.O. THE A.O. IS DIRECTED TO CONSIDER THE ASSESSEES SUBMISSIONS AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT THIS APPEAL BY THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF JANUARY., 2017. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 16 TH JANUARY, 2017. COPY FORWARDED TO : 1. SHRI ANAND GAJANAN BANCHPALLIWAR, PLOT NO. 93, STREET NO. 4, JAWAHAR NAGAR, NAGPUR. 2. I.T.O., WARD - 5(1), NAGPUR. 3. C.I.T. - III, NAGPUR. 4. CIT(APPEALS), - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.