Shri Paresh Vinodchandra Shah, Ahmedabad V. The Income tax Officer,Ward-11(2), Ahmedabad

ITA 2937/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6278 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 27-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Assessee Lawyers: K R DIXIT
• Keywords: Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' BEFORE SHRI T K SHARMA,JM & SHRI A N PAHUJA,AM ITA NO.2937/AHD/2010 (ASSESSMENT YEAR:-2007-08) SHRI PARASH VINODCHANDRA SHAH, 8, VIJAYGHAT SOCIETY, NARAYANNAGAR ROAD, PALDI, AHMEDABAD V/S THE INCOME-TAX OFFICER, WARD-11(2), AHMEDABAD PAN: AIFPS 9423 A [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI K R DIXIT, AR REVENUE BY:- SHRI S P TALATI, DR O R D E R A N PAHUJA: THIS APPEAL FILED ON 27-10-2010 BY AN ASSESSEE AGAINST AN ORDER DATED 01-09-2010 OF THE LD. CIT(AP PEALS)-XVI, AHMEDABAD, FOR THE ASSESSMENT YEAR 2007-08, RAISES VARIOUS GROUNDS RELATING TO THE ADDITION OF RS.17,20,800/- . 2 FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.1,14,070/- FILED ON 30-07-2007 BY THE ASSESSEE, AFTER BEING PROCESSED ON 12.5.2008 U/S 143(1) OF THE INCO ME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT], WAS SE LECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ISSUED ON 21-07- 2008 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER [AO IN SHORT] NOTICED THAT THE ASSESSEE DEP OSITED CASH OF RS.17,20,800/- IN HIS SAVING BANK ACCOUNT WITH STAN DARD CHARTERED BANK IN THE FY 2006-07. TO A QUERY BY THE AO, THE A SSESSEE EXPLAINED THE ENTRIES AS UNDER: DATE AMOUNT REMARKS 1 13-11-2006 2,94,000 AS PER CASH A/C 2 17-11-2006 1,80,000 AS PER CASH A/C 3 25-01-2007 1,46,800 AS PER CASH A/C 4 21-02-2007 11,00,000 AMOUNT WAS UNPAID BY BANK SO THAT NO CASH TRANSACTION 2 ITA NO.2937/AHD/2010 2 BEING MADE (AS PER BANK STATEMENT.) TOTAL 17,20,800 2.1 THE ASSESSEE FURTHER STATED THAT THOUGH HE W AS IN THE BUSINESS OF TRADING IN CHEMICAL ITEMS, NO SUCH BUSI NESS WAS, HOWEVER, CARRIED ON DURING THE FY 2006-07. THE AO O BSERVED FROM THE BALANCE SHEETS OF THE ASSESSE THAT THE ASSESSE REFLECTED CASH IN HAND AS UNDER:- 31-03-2005 RS. 1,786/- 31-03-2006 RS.7,45,692/- 31-03-2007 RS. 992/- SINCE THE ASSESSEE DID NOT HAVE SUFFICIENT CASH AVA ILABLE NOR ANY BUSINESS WAS CARRIED ON DURING THE YEAR, THE AO DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE THAT CASH OF RS.2,94,00 0/-, RS.1,80,000/- AND RS.1,46,800/-DEPOSITED IN THE SB ACCOUNT WAS OUT OF CASH ACCOUNT. AS REGARDS CASH OF RS.11,00,00 0/- DEPOSITED ON 21-02-2007, THE AO NOTICED THAT THE BANK ACCOUNT R EVEALED FOLLOWING ENTRIES :- DATE DESCRIPTION DEPOSIT WITHDRAWAL --------------------------------------------------- ------------------------------------------------ 19-02-2007 TR FR MAHAVIR EXPORTS 10,00,000/- -- 647121 HVC RET 10,00,000/- HVC PARAS V SHAH 647121 10,00,000/- 21-02-2006 CSH 647122 RTN UNPAID 11,00,000/- CASH WITHDRAWAL 647122 11,00,000/- 06-03-2006 DD FVG; PARAS V SHAH 11,00,000/ - --------------------------------------------------- ------------------------------------------------- SINCE THE NATURE AND SOURCES OF CASH DEPOSITED IN S B ACCOUNT WAS NOT PROPERLY EXPLAINED, THE AO ASKED THE ASSESSEE T O EXPLAIN THE AFORESAID ENTRIES APPEARING IN THE BANK STATEMENT O F STANDARD CHARTERED BANK. THE ASSESSEE, IN HIS LETTER DATED 22-12-2009 DID NOT EXPLAIN THE ENTRIES AND INSTEAD SUBMITTED THAT HE HAD WITHDRAWN THE CASH ON DIFFERENT DATES FROM THE BANKS FOR THE PURPOSE OF PURCHASING THE 3 ITA NO.2937/AHD/2010 3 AGRICULTURE LAND BUT DUE TO SOME PROBLEM, HE WAS NO T ABLE TO PURCHASE THE LAND AND DEPOSITED BACK THE AMOUNT OF RS.2,94,000/-, RS. 1,80,000/- & RS.1,46,000/- IN TO THE BANK .HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE ON THE GROUND THAT THERE WAS NO SUCH EVIDENCE OF P URCHASE OF LAND WHILE WITHDRAWALS FORM 22.4.2006 TO 31.10.2006 WERE OF S MALL AMOUNTS VARYING BETWEEN RS. 5000 TO RS. 15,000/- .ACCORDINGLY, THE AO CONCLUDED THAT CASH OF RS.17,20,800/- DEPOSITED IN SAVING BANK ACCOUNT OF STANDARD CHARTERED BANK WAS OUT OF THE INCOME FROM UNDISCLOSED SOURCE S AND ADDED U/S 68 OF THE ACT . 3. ON APPEAL, THE LEARNED CIT(A) UPHELD THE ADDITIO N IN THE FOLLOWING TERMS:- 3. DURING THE APPELLATE PROCEEDINGS THE APPELLANT FILED CASH BOOK COPY AND STATED THAT THE ENTIRE CASH WITHDRAWN AND DEPOS ITS ARE FULLY EXPLAINED FROM THERE. THE ASSESSEE ALSO FILED COPY OF BANK AC COUNT STATEMENT OF STANDARD CHARTERED BANK. 4 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLAN T AND OBSERVATION OF THE AO. THE APPELLANT STATED THAT TH E CASH WAS DEPOSITED AS PER THE CASH BOOK COPY, THE CORRECTNESS OF WHICH IS TOTALLY DOUBTFUL. THE READING OF THE CASH BOOK COPY GIVEN BY THE APPELLAN T SHOWS THAT IT IS ENTIRELY UNBELIEVABLE THAT THE ASSESSEE WOULD BE WI THDRAWING CASH OF VERY SMALL AMOUNT RANGING FROM RS.2500 TO RS.15000 ALMOS T AT SMALL INTERVALS EVEN THOUGH AS PER THE CASH BOOK HUGE AMOUNT OF CAS H IS STILL AVAILABLE. THE READING OF THE CASH BOOK WILL BE VERY INTERESTI NG IN THIS REGARD. ON FIRST OF APRIL 2006 CASH AVAILABLE IN THE CASH BOOK IS RS .745692. UP TO 08/05/2006, THERE IS NO WITHDRAWAL, BUT STILL THE A SSESSEE HAS DEPOSITED CASH ON FIVE DIFFERENT DATES RANGING FROM RS.5000 T O RS. ONE LAKH. ON THE DATE 08/05/2006 RS. ONE LAKH HAS BE EN WITHDRAWN WHEN THE BALANCE IS RS.814692. THEREAFTER UP TO 13/11/2006, THERE IS NO WITHDRAWAL, BUT FROM 09/05/2006 UP TO 03/11/2006 THE ASSESSEE H AS DEPOSITED CASH OF SMALL AMOUNTS RANGING FROM RS.2500 TO A MAXIMUM OF RS.15000 ON 40 DIFFERENT OCCASIONS EVEN THOUGH ON 09/05/2006 CASH BOOK HAD CASH BALANCE OF RS.814692. IT HAS BEEN STATED THAT THIS CASH HAS BEEN WITHDRAWN FROM IDBI BANK LTD. AND STANDARD CHART ERED BANK. ON 13/11/2006 THE WITHDRAWAL OF RS.294000 STATED TO BE DEPOSITED IN THE STANDARD CHARTERED BANK. STILL, THEREAFTER FROM 15/ 11/2006, THE ASSESSEE HAS AGAIN DEPOSITED RS.12000, ON 17/11/2006. TH E ASSESSEE HAS AGAIN WITHDRAWN 180000 AND STATED TO BE DEPOSITED IN STAN DARD CHARTERED BANK. ON THIS DATE THE CASH BOOK BALANCE OF 688192. BUT S TILL THE ASSESSEE HAS BEEN DEPOSITING AGAIN SMALL AMOUNTS ON DIFFERENT INSTALLMENTS AS STATED ABOVE. THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN T HE WITHDRAWALS FROM 4 ITA NO.2937/AHD/2010 4 THE IDBI BANK AND STANDARD CHARTERED BANK ALONG WIT H THE DEPOSITS IN THOSE BANKS. THE ASSESSEE CONVENIENTLY FORGOT TO E XPLAIN THE DEPOSITS IN THOSE BANKS. IDBI BANK STATEMENT HAS NOT BEEN GIVEN AT ALL. THEREFORE, IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO EXPLAIN EVEN THE DEPOSITS OF RS.294000, RS.180000 AND RS.146800. FURTHER, THE DE POSIT OF RS.20 LAKHS IN TWO INSTALLMENTS OF RS.10 LAKHS EACH ON L9/02/2 007 IS NOT AT ALL EXPLAINED. FROM THE ABOVE IT IS CLEAR THAT EVEN THE ENTRIES IN THE CASH BOOK ARE TOTALLY DOUBTFUL. IF THE ASSESSEE REQUIRED CASH FOR PURCHASING THE AGRICULTURE LAND, THEN, WHAT WAS THE NEED IN WITHDR AWING THE CASH IN SMALL AMOUNTS OF RS.5000 TO RS.10,000 ON ALMOST 40 OCCASI ONS DURING THE YEAR. FURTHER, EVEN THE DEPOSITS IN THE IDBI BANK AND STA NDARD CHARTERED BANK ARE NOT EXPLAINED. IN VIEW OF THE ABOVE, I AGREE WI TH THE AO THAT THE APPELLANT HAS FAILED TO EXPLAIN THE CASH DEPOSITED AND HENCE THE ADDITION MADE BY HIM IS CONFIRMED AND THE GROUND OF APPEAL A RE DISMISSED. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED AR ON B EHALF OF THE ASSESSEE WHILE REITERATING THEIR SUBMISSIONS BEFORE THE LEARNED CIT(A) INVITED OUR ATTENTION TO THEIR APPLICATION F OR ADMISSION OF FOLLOWING ADDITIONAL EVIDENCE:- (I) THE ASSESSEES LETTER TO THE BANK THAT HIS REQU EST OF CASH WITHDRAWAL OF RS.11 LAKHS BY CHEQUE NO. 647122 OF D ATED 21 FEBRUARY 2007 MAY BE CANCELLED. (II) THE BANKS LETTER EXPLAINING THE ENTRIES DATED 19-02-2007 AND 21- 02-2007 IN THE ASSESSEES PASS BOOK. 4.1 IT IS MENTIONED IN THE AFORESAI D APPLICATION THIS EVIDENCE MAY BE ADMITTED IN VIEW OF DECISION OF THE HONBLE GUJARAT HIGH C OURT IN PARI MANGALDAS VS. CIT 6 CTR 647 AND DECISION OF THE HONBLE DELHI HIGH C OURT IN R DALMIA VS. CIT 113 ITR 522.THE LD. AR ARGUED THAT IN THE LIGHT OF AFOR ESAID ADDITIONAL EVIDENCE, ADDITION OF RS.11 LACS WAS NOT JUSTIFIED. ON THE OT HER HAND, THE LD. DR PLEADED THAT THE EXCEPT FOR THE AMOUNT OF RS. 11 LACS, THE LD. AR DID NOT PLACE ANY EVIDENCE IN RESPECT OF SOURCE OF CASH OF RS. 6,20, 800/- DEPOSITED IN THE BANK, BEFORE THE ITAT. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE. AS IS APPARENT FROM THE AFORESAID FACTS, SINCE THE ASSESSEE DID NOT EXPLAIN WITH PROPER AND COGENT EVI DENCE THE 5 ITA NO.2937/AHD/2010 5 SOURCE OF CASH OF RS. 2,94,000/- DEPOSITED ON 13-11 -2006, RS. 1,80,000/- DEPOSITED ON 17-11-2006, RS. 1,46,800/- DEPOSITED ON 25-01-2007 AND RS. 11 LACS DEPOSITED ON 21.2.2007 I N HIS SB ACCOUNT WITH THE STANDARD CHARTERED BANK, THE AO ADDED THE AMOUNT TO THE INCOME OF THE ASSESSEE BY WAY OF INCO ME FROM UNDISCLOSED SOURCES. ON APPEAL, THE LD. CIT(A) UPHE LD THE FINDINGS OF THE AO ON THE GROUND THAT THAT THE ASSESSEE FAILED TO EXPLAIN EVEN THE DEPOSITS OF RS.294000, RS.180000 AND RS.146800. EVEN BEFORE US, THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT PL ACE ANY EVIDENCE OR MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER NOR EXPLAINED THE SOURCE OF CASH DEPOSITED IN THE A FORESAID SB ACCOUNT OF THE ASSESSEE. IN THE ABSENCE OF ANY BASI S, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) SO FAR AS ADDITION IN RESPECT OF THREE AMOUNTS OF RS.294000, RS.180000 AND RS.146800, IS CONCERNED 5.1 AS REGARDS ADDITION OF RS. 11 LACS, WE FIND TH AT THE LD. CIT(A) DID NOT RECORD HIS SPECIFIC FINDINGS WHILE UPHOLDIN G THE SAID ADDITION. WE ARE OF THE OPINION THAT IN VIEW OF REASONS ADDUC ED BY THE LD. AR, THE AFORESAID ADDITIONAL EVIDENCE IS VITAL AND ESSE NTIAL FOR THE PURPOSE OF CONSIDERATION OF THE SUBJECT-MATTER OF THE ADDITION OF RS. 11 LACS IN THIS APPEAL AND TO ARRIVE AT A FINAL AND ULTIMATE DECISION IN A FAIR AND JUST MANNER. THE TRIBUNAL, UNDER RULE 29 OF THE ITAT RULES, 1963, HAS POWER TO ADMIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE OR IF THERE EXISTS SUBSTANTIAL CAUSE. TH E CAUSE OF JUSTICE WILL BE BETTER SERVED IF THE AFORESAID TWO DOCUMENT S ARE ADMITTED BECAUSE THESE DOCUMENTS HAVE A NEXUS WITH THE FACTS OF THE CASE AND ALSO VERY ESSENTIAL FOR PROPER APPRECIATION AND ADJUDICATION OF THE LIS/CONTROVERSY INVOLVED. ACCORDINGLY, PRAYER F OR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES ,1963 IS ACCEPTED IN THE LIGHT OF GUIDELINES LAID DOWN IN T HE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF PARI MANGA LDAS GIRDHARIDAS VS. CIT,(1977) 6 CTR(GUJ)647. IN THESE CIRCUMSTANCE S, WE CONSIDER 6 ITA NO.2937/AHD/2010 6 IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF T HE LD. CIT(A) AND RESTORE THE MATTER RELATING TO ADDITION OF RS. 11 L ACS TO HIS FILE FOR DECIDING THE ISSUE AFRESH IN ACCORDANCE WITH LAW, I N THE LIGHT OF AFORESAID ADDITIONAL EVIDENCE AND OF COURSE AFTER A LLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. THE LD. CIT(A) IS FREE TO UNDERTAKE ANY INDEPENDENT ENQUIRES, IF FOUND NECESSARY AND T HEREAFTER, MAY PASS SUCH ORDER AS HE DEEMS PROPER, IN ACCORDANCE W ITH LAW . WITH THESE OBSERVATIONS, GROUND NOS. 1 TO 9 IN THE APPEA L ARE DISPOSED OF. 6.. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFOR E US IN TERMS OF THE RESIDUARY GROUND IN THE APPEAL, ACCORDINGLY, TH IS GROUND IS DISMISSED. 7. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 8. IN THE RESULT, APPEAL IS PARTLY ALLOWED BUT FO R STATISTICAL PURPOSES ORDER PRONOUNCED IN THE COURT TODAY ON 30 -06-2011 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 30-06-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI PARASH VINODCHANDRA SHAH, 8, VIJAYGHAT SOCI ETY, NARAYANNAGAR ROAD, PALDI, AHMEDABAD 2. ITO, WARD-11(2), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XVI, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-D, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD