The ITO, (Intl. Taxn.), Surat V. Shri Nitin Hirabhai Jariwala, Surat

ITA 2861/AHD/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1852 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2014
• Court: TRIBUNAL

Judgement Text

ITO (INT. TAXATION), SURAT VS. NITIN HIRABHAI JARIWALA /ITA NO.2861/AHD/2014/A.Y.2011-12 PAGE 1 OF 6 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A. NO.2861/AHD/2014/SRT / ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER, (INTERNATIONAL TAXATION), SURAT. VS. SHRI NITIN HIRABHAI JARIWALA, 5/519, GROUND FLOOR, A-19, TRIKAMNAGAR SOCIETY, L H ROAD, SURAT 395 006. [PAN: ALBPJ 2214 K] APPELLANT /RESPONDENT /ASSESSEE BY SHRI NITIN GHEEWALA CA /REVENUE BY SHRI B.P.K.PANDA SR.DR / DATE OF HEARING: 18 . 0 2 .201 9 /PRONOUNCEMENT ON: 20 .0 2 .2019 /O R D E R PER O.P.MEENA, AM: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-GANDHINAGAR, AHMEDABAD(IN SHORT THE CIT (A)) DATED 12.08.2014 PERTAINING TO ASSESSMENT YEAR 2011-12, WHICH IN TURN HAS ARISEN FROM THE ORDER DATED 26.02.2014 PASSED BY THE INCOME TAX OFFICER (INTL. TAXN.), SURAT (IN SHORT THE AO ) UNDER SECTION 143 (3) OF INCOME TAX ACT,1961 ( IN SHORT THE ACT). 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : (I) THE LD.CIT(A) HAS ERRED ON FACTS IN HOLDING THAT THE ASSESSEE HAD PRODUCED SUFFICIENT EVIDENCE TO EXPLAIN SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNT AND NO ADDITION WAS REQUIRED TO BE MADE U/S.69. ITO (INT. TAXATION), SURAT VS. NITIN HIRABHAI JARIWALA /ITA NO.2861/AHD/2014/A.Y.2011-12 PAGE 2 OF 6 (II) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN REJECTING THE CONCLUSION OF THE AO THAT THE ASSESSEE BEING A NON-RESIDENT, COULD NOT HAVE MAINTAINED A HUGE CASH BALANCE OF RS.69 LACS OVER A PERIOD OF OVER TWO YEARS. (III) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE HAS CASH DEPOSITS IN HIS BANK ACCOUNTS MAINTAINED WITH AXIS BANK DURING THE PERIOD FROM 25.02.2011TO 12.03.2011 AMOUNTING TO RS.69 LAKHS. THE ASSESSEE HAS EXPLAINED THE SOURCE OF SUCH CASH DEPOSITS THAT SAME IS OUT OF OPENING CASH BALANCE OF RS.96,31,000/- AS ON 01.04.2010 AND CLOSING BALANCE WAS OF RS.26,20,025/- AS ON 31.03.2011. IT WAS ALSO EXPLAINED THAT THE CASH BALANCE OF RS.96.31 LAKHS AS ON 01.04.2010 WAS REPRESENTED OUT OF WITHDRAWALS OF CASH BY THE ASSESSEE DURING THE FINANCIAL YEAR 2008- 09 FROM THE BANK ACCOUNT AXIS BANK (NRO ACCOUNT) OF THE AMOUNT OF RS.1,09,95,000/-. THE ASSESSEE HAS ALSO FILED COPY OF THE SAID BANK ACCOUNT AXIS BANK BEFORE THE AO. HOWEVER, THE AO OBSERVED THAT THOUGH THE ASSESSEE HAD WITHDRAWN TOTAL AMOUNT OF RS.1,07,95,000/- UP TO 07.03.2009, THEREAFTER THE ASSESSEE HAS WITHDRAWN OF RS.2,00,000/- ON 14.03.2009 AND RS.50,000/- ON 02.04.2009. ACCORDING TO AO, IF THE ASSESSEE HAD SUBSTANTIAL CASH AMOUNT ON HAND, THERE WAS NO NEED TO WITHDRAW MEAGRE CASH OF RS.2 LAKHS AND RS.50,000/- AS ABOVE. THE AO HAS ALSO STATED THAT IF THE ASSESSEE HAS SUBSTANTIAL AMOUNT OF CASH ON HAND THE SAME WOULD HAVE BEEN DEPOSITED IN THE BANK ACCOUNT AT A SINGLE STANCE. ITO (INT. TAXATION), SURAT VS. NITIN HIRABHAI JARIWALA /ITA NO.2861/AHD/2014/A.Y.2011-12 PAGE 3 OF 6 HOWEVER, THE ASSESSEE HAS DEPOSITED CASH ON VARIOUS DATES FROM 25.02.2011 TO 12.03.2011 AND THEREFORE IT IS PRESUMED THAT NO CASH WAS AVAILABLE WITH THE ASSESSEE. THE AO ACCORDINGLY PRESUMED THAT THE UNACCOUNTED INCOME IN CASH WAS EARNED, THE SAME WAS DEPOSITED IN BANK ACCOUNT. THE AO ALSO OBSERVED THAT THE ASSESSEE HAD ALONG WITH THE CO-OWNERS PURCHASED TWO AGRICULTURAL LANDS FOR RS.2.75 CRORE AND RS.2.38 CRORE AS PER THE SALE DEEDS FOR WHICH VARIOUS CHEQUES HAVE BEEN ISSUED AS MENTIONED IN THE ASSESSMENT ORDER. 4. IN VIEW OF THESE FACTS, THE AO WAS OF THE VIEW THAT THE AMOUNT WITHDRAWN EARLIER WAS UTILISED FOR OTHER PURPOSES AND THERE WAS NO CASH ON HAND AVAILABLE AS ON 31.03.2009, ACCORDINGLY THE AO HAS MADE ADDITION OF AFORESAID AMOUNT U/S.69 OF THE ACT. 5. BEING AGGRIEVED, THE ASSESSEE HAS CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A) WHEREIN IT WAS SUBMITTED THAT THE CASH WAS WITHDRAWN FROM BANK. SHRI SANJAY PATEL ON POWER OF ATTORNEY HOLDER OF THE ASSESSEE WHO HAD AUTHORITY TO SIGN CHEQUE AND WITHDRAW THE AMOUNT FROM THE BANK ACCOUNT. THE ASSESSEE IS A NRI SETTLED IN USA AND DERIVES INCOME FROM HOUSE PROPERTY IN INDIA AND ALSO INCOME FROM AGRICULTURAL ACTIVITIES. IT WAS ALSO SUBMITTED THAT THESE FACTS WERE ALSO CONFIRMED BY THE SHRI SANJAY PATEL WHEN THE AO HAD EXAMINED HIM U/S.131 ON 12.02.2014. IT WAS EXPLAINED BY SHRI SANJAY PATEL THAT HE WAS HAVING POWER OF ATTORNEY ON OF ITO (INT. TAXATION), SURAT VS. NITIN HIRABHAI JARIWALA /ITA NO.2861/AHD/2014/A.Y.2011-12 PAGE 4 OF 6 SHRI NITIN JARIWALA WHO WAS HIS FRIEND. HE HAD ALSO CONFIRMED THAT THE AMOUNT IN CASH WAS GIVEN BY SHRI NITIN BHAI IN THE PAST TO HIM THAT WAS KEPT AT HIS HOUSE AND AS AND WHEN REQUIRED THE SAME WAS DEPOSITED IN THE BANK ACCOUNT. HE HAD ALSO EXPLAINED THAT THE AMOUNT WAS KEPT IN CASH AT HIS RESIDENCE IN ORDER TO PURCHASE A LAND, THE FORMER REQUIRED PAYMENT, THE SAME SHOULD BE AVAILABLE WITH HIM. IT WAS ALSO ARGUED BY THE AR OF THE ASSESSEE THAT THE AO HAS NOT REBUTTED THIS EXPLANATION AND THE STATEMENT ON OATH OF SHRI SANJAY PATEL RECORDED BY HIM. CONSIDERING THESE FACTS, THE LD.CIT(A) HAS GIVEN HIS FINDING IN PARA 5.4 WHICH IS REPRODUCED AS UNDER : 5.4 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE ABOVE CONTENTIONS. IT IS NOTICED THAT THE APPELLANT HAD PROVIDED COPY OF CASH ACCOUNT AND BANK STATEMENT TO EXPLAIN THE SOURCES FOR CASH DEPOSITED IN THE BANK ACCOUNT. THE SOURCE OF CASH AVAILABLE WAS THE WITHDRAWAL MADE FROM APPELLANTS BANK ACCOUNT IN THE FINANCIAL YEAR 2008-09. IT IS NOTICED THAT IN THE SAID YEAR THERE ARE SUFFICIENT CASH WITHDRAWAL AS DISCUSSED HEREIN ABOVE. THE AO HAS NOT ACCEPTED THE SAID EXPLANATION MAINLY OBSERVING THAT THE MONEY WITHDRAWN TWO YEARS EARLIER COULD NOT BE USED AS SOURCE TO EXPLAIN THE FUNDS OF RS.69 LACS DEPOSITED IN THE BANK ACCOUNT. ACCORDING TO HIM, THE POWER OF ATTORNEY HOLDER HAD ACCESS TO THE BANK ACCOUNT AND THAT HE COULD NOT HAVE KEPT SUCH CASH AT HIS RESIDENCE FOR TWO YEARS. ACCORDING TO HIM, THEREFORE, THE APPELLANTS EXPLANATION DOES NOT EVIDENCE THE SOURCE OF FUND. THE APPELLANT HAS EXPLAINED THAT THE FACT THAT THE CASH WAS WITHDRAWN FROM APPELLANTS BANK ACCOUNT (NRO ACCOUNT) DURING THE F.Y.2008-09 AND THAT THE SAME WAS REFLECTED IN THE CASH BOOK PRODUCED BEFORE THE AO, IS NOT DENIED BY THE AO. IT IS ALSO EXPLAINED BY THE APPELLANT THAT THE CASH WAS KEPT WITH SANJAY PATEL IN ORDER TO BUY AGRICULTURE LAND AS AND WHEN OPPORTUNITY WAS FOUND. THIS EXPLANATION IS ALSO SUPPORTED BY THE STATEMENT OF SANJAY PATEL RECORDED BY THE AO. IT IS ARGUED BY THE AR THAT THE CASH WAS AVAILABLE WITH SANJAY PATEL AND WHEN PAYMENT WAS REQUIRED TO BE MADE, IT WAS USED FOR DEPOSIT IN THE BANK ACCOUNT. THE ASSESSING OFFICER HAS NOT ESTABLISHED THAT THE CASH WAS NOT AVAILABLE OR WAS UTILIZED SOMEWHERE ELSE, AS PRESUMED BY HIM. IN ABSENCE OF EVIDENCE ABOUT USE OF CASH OTHERWISE THAN WHAT IS STATED ABOVE, THE AO WAS NOT JUSTIFIED IN ATTORNEY HOLDER. HE HAS ALSO MADE STATEMENT WITHOUT ESTABLISHING USE OF CASH, THAT AS AND WHEN UNACCOUNTED INCOME IS RECEIVED, IT IS DEPOSITED IN BANK ACCOUNT. THE APPELLANT IS NOT RESIDING IN INDIA WHICH IS A FACT AND IN SUCH CIRCUMSTANCES, IT IS INCORRECT TO ASSUME THAT HE IS HAVING UNACCOUNTED BUSINESS AND THE INCOME IS EARNED THEREFROM AT THE TIME OF DEPOSIT OF CASH IN BANK ACCOUNT. IN THE CIRCUMSTANCES, IN MY VIEW THE ADDITION IS MADE ONLY ON PRESUMPTION AND WITHOUT ESTABLISHING THE ALLEGATION THAT CASH ITO (INT. TAXATION), SURAT VS. NITIN HIRABHAI JARIWALA /ITA NO.2861/AHD/2014/A.Y.2011-12 PAGE 5 OF 6 WAS USED SOMEWHERE ELSE PRIOR TO DEPOSIT IN THE BANK ACCOUNT. THE ADDITION SO MADE IS NOT JUSTIFIED AND IS DIRECTED TO BE DELETED. 6. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. THE LD.SR.DR FOR THE REVENUE STRONGLY RELIED ON THE ORDER OF THE LD.AO AND REPEATED THE ARGUMENTS AS TAKEN BY THE LD.AO AND SUBMITTED THAT THE CASH BALANCE SHOWN BY THE ASSESSEE AS HAS BEEN REBUTTED BY THE AO. FURTHER, THE MONEY WITHDRAWN TWO YEARS BEFORE COULD NOT BE USED AS SOURCE TO EXPLAIN THE SOURCE OF FUNDS OF RS.69 LAKH. 7. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS CLAIMED THAT THE DEPOSITS ON NINE DIFFERENT DATES WERE MADE OUT OF AVAILABLE CASH BALANCE OF RS.96,31,000/- ON HAND AS ON 01.04.2010 AND IN SUPPORT THEREOF, THE ASSESSEE SUBMITTED COPY OF CASH BOOK FOR THE RELEVANT PERIOD. FURTHER, AS REGARDS, THE OPENING CASH BALANCE OF RS.96,31,000/- BROUGHT FORWARD ON 01.04.2010, THE ASSESSEE HAS EXPLAINED THAT THE SAME IS OUT OF WITHDRAWAL OF CASH BY THE ASSESSEE DURING THE FINANCIAL YEAR 2008-09 FROM THE BANK ACCOUNT (NRO) WITH AXIS BANK WHICH AMOUNTED TO RS.1,09,95,000/- IN SUPPORT OF THESE FACTS THE ASSESSEE HAS FILED COPY OF BANK STATEMENT. THESE FACTS OF KEEPING THE CASH IN HAND WAS ALSO ITO (INT. TAXATION), SURAT VS. NITIN HIRABHAI JARIWALA /ITA NO.2861/AHD/2014/A.Y.2011-12 PAGE 6 OF 6 CONFIRMED BY THE SHRI SANJAY PATEL, POWER OF ATTORNEY HOLDER OF THE ASSESSEE, BUT THE AO HAS NOT ESTABLISHED THAT THE CASH WAS NOT AVAILABLE OR WAS UTILISED SOMEWHERE LESS AS PRESUMED HIM. IN ABSENCE OF EVIDENCE ABOUT USE OF CASH OTHERWISE THEN WHAT IS STATED BY THE ASSESSEE, THE AO WAS NOT JUSTIFIED IN PRESUMING THAT THE CASH WAS NOT AVAILABLE WITH THE ASSESSEES POWER OF ATTORNEY HOLDER. THESE FACTS ARE ALSO NOT CONTROVERTED BY THE LD.SR.DR BEFORE US. IT IS ALSO A FACT THAT THE ASSESSEE IS NOT RESIDING IN INDIA. THEREFORE, IN SUCH FACTS AND CIRCUMSTANCES, IT IS INCORRECT TO ASSUME THAT HE IS HAVING UNACCOUNTED BUSINESS INCOME IN INDIA AND THE INCOME IS EARNED THEREFROM AT THE TIME OF DEPOSITING CASH IN BANK ACCOUNT. IN THE LIGHT OF THESE FACTS AND THE FINDINGS OF THE LD.CIT(A) WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A), ACCORDINGLY SAME IS UPHELD. CONSEQUENTLY, ALL THE ABOVE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.02.2019. SD/- SD/- (KUL BHARAT) (O.P.MEENA) ( /JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) / SURAT, DATED : 20 TH FEBRUARY , 2019/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT