Smt. Savitaben Arvindbhai Patel, Surat V. The Income tax Officer,Ward-2(2), Surat

ITA 297/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2292 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2014
• Court: TRIBUNAL

Judgement Text

SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 1 OF 8 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . . / I.T.A NO.297/AHD/2014/SRT / ASSESSMENT YEAR :2009-10 SMT. SAVITABEN ARVINDBHAI PATEL , 17 APSARA IND. SOCIETY , UDHANA MAGDALLA ROAD SURAT PAN: ABGPP5099M V S . INCOME TAX OFFICER, WARD- 2(2), SURAT APPELLANT /RESPONDENT /ASSESSEE BY SHRI RUSHI PAREKH, CA /REVENUE BY SHRI J. K. CHANDNANI, SR. D.R. / DATE OF HEARING: 07.06.2018 /PRONOUNCEMENT ON 18.06.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT (IN SHORT THE CIT (A)) DATED 13.11.2013 PERTAINING TO ASSESSMENT YEAR 2009-10, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD- 2(2), SURAT (IN SHORT THE AO) DATED SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 2 OF 8 23.12.2011 UNDER SECTION 143 (3) OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. GROUND NO. 1 TO 7 OF APPEAL STATES THAT THE LD. CIT (A) ERRED IN NOT APPRECIATING THAT THE ASSESSEE WAS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS OR PREPARE BALANCE SHEET AND IN OBSERVING OPENING CAPITAL BALANCE AS ON 01.04.2008 OF RS. 12,37,524 AND NOT HOLDING THAT THE ASSESSEE HAS DEPOSITED RS. 3,65,000 OUT OF WITHDRAWAL OF RS. 8,55,000 FROM UNJHA BANK A/C AND CIT (A) OUGHT TO HAVE GIVEN BENEFIT OF TELESCOPING OF ADDITION OF CASH DEPOSITS IN PRECEDING YEAR 12,37,524 AND IN ALTERNATE THE CLAIM OF THE ASSESSEE OFFERING INCOME OF RS. 60,750 BEING 5 % OF TOTAL RECEIPTS OF RS. 1,21,500 UNDER SECTION 44AD. THEREFORE, THE ADDITION OF RS. 12,15,000 MAY BE DELETED. 3. BRIEF FACTS ARE THAT THE ASSESSEE WAS HAVING BANK ACCOUNT WITH UNJHA NAGRIK SAHKARI BANK LTD. UNJHA IN WHICH CASH DEPOSITS OF RS. 2 LAKH ON 09.08.2008, RS. 4 LAKH ON 11.08.2008 RS. 2.50 LAKH ON 11.08.2008 AND RS. 3,65,000 ON 05.01.2009 WERE NOTICED. THESE CASH DEPOSITS WERE CLAIMED TO BE OUT OF OPENING CAPITAL BALANCE OF RS. 12,00,745 AS ON 01.04.2008 OUT OF ADVANCE RECEIVED FROM VARIOUS PERSONS AGAINST SALE OF LAND IN EARLIER YEARS. THEREFORE, THE AO VIDE LETTER DATED 28.11.2011 HAS ASKED THE LD. SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 3 OF 8 A.R. OF THE ASSESSEE TO PRODUCE VARIOUS PERSONS AND THE ASSESSEE FOR VERIFICATION BUT NO ONE WAS PRODUCED. THUS, THE ASSESSEE HAS NOT SUBMITTED ANY SUPPORTING DETAILS/ DOCUMENT AND MERELY STATED THAT THERE WAS AN OPENING CASH BALANCE. THE ASSESSEE HAS PREPARED SOME SORT OF CASHBOOK AND SUBMITTED THE SAME SHOWING OPENING CASH BALANCE OF RS. 12,00,745. HOWEVER, IT WAS NOTICED THAT THERE WAS NO EVIDENCE AT ALL OF HAVING SUCH HUGE CASH BALANCE. THEREFORE, ADDITION OF RS. 17,60,000 WAS MADE IN A.Y. 2008-09 OUT OF WHICH ADDITION OF RS. 17,07,000 WAS CONFIRMED BY THE CIT (A). DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS AGAIN DEPOSITED CASH OF RS. 12, 15,000 IN BANK ACCOUNT AND IT IS ALSO CLAIMED AGAINST THE SALE OF AGREEMENT TO SALE FOR RS. 20 LAKH OUT OF WHICH AN AMOUNT OF RS.17.60 WAS ALREADY ADDED IN A.Y.2008-09. HENCE, THERE CANNOT BE ANY CASH RECEIPTS AGAINST THE SAME LAND. THE ASSESSEE HAS ALSO PREPARED BALANCE SHEET IN A.Y. 2009-10 AND CLAIMED THAT RS. 2,52,000 WERE FROM RECEIPT OF LOANS AGAINST SAID LOAN SHOWN IN THE BALANCE SHEET AS ADVANCES IN THE NAME OF SHRI SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 4 OF 8 ARVINDBHAI TULSIDAS AT RS. 4,91,634 AND CASH IN HAND OF RS. 7,80,745. THUS, THE AO OBSERVED THAT IT IS INTERESTING TO NOTE THAT ONE SIDE THE ASSESSEE IS CLAIMING THAT CASH DEPOSITS AMOUNT IS OUT OF ADVANCE RECEIVED FROM AGREEMENT TO SALE LAND, AND ON THE OTHER SIDE IT HAS CLAIMED THAT SAME AS LOAN TAKEN. SINCE NO EVIDENCE ON EITHER THEORY WAS PRODUCED BEFORE THE AO. THEREFORE, THE ADDITION OF RS. 12,15,000 WAS MADE AS UNEXPLAINED INCOME. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). THE CIT (A) OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY BALANCE SHEET REGARDING OPENING CASH BALANCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2008-09 AS SEEN FROM PARA 5.2 OF ASSESSMENT ORDER. IT WAS ALSO ADMITTED BY THE ASSESSEE DURING THE COURSE OF PROCEEDINGS OF A.Y. 2008-09 VIDE LETTER DATED 28.10.2010 THAT NO BALANCE SHEET OR PERSONAL CASHBOOK HAS BEEN MAINTAINED. THE CIT (A) ALSO NOTED THAT THE ASSESSEE HAS CLAIMED THAT SHE HAS TAKEN LOAN OF RS. 12,60,000 FROM 5 PERSONS FROM THE PERSON IN WHOSE NAME ADVANCE REGARDING SALE SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 5 OF 8 OF LAND WAS SHOWN IN A.Y. 2008-09. THAT THE ASSESSEE HAS GAVE COLOUR OF THE ADVANCE CLAIMED TO HAVE RECEIVED AGAINST AGREEMENT TO SALE OF LAND AS UNSECURED LOAN DURING YEAR. IN VIEW OF THIS MATTER, THE CIT (A) UPHELD THE FINDINGS OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT CASH DEPOSITS OF RS. 1 LAKH ON 11.08.2008 IS OUT OF CASH WITHDRAWALS OF RS. 1 LAKH MADE ON 14.02.2008 WHICH WAS LYING WITH THE ASSESSEE. SIMILARLY, CASH DEPOSITS OF RS. 3, 65,000 ON 05.01.2009 IS OUT OF CASH WITHDRAWALS OF RS. 8, 55,000 ON 20.08.2008. HENCE, BENEFIT OF DOUBT OF THESE CASH DEPOSITS BE GIVEN AS GIVEN BY THE TRIBUNAL IN I.T.A. NO. 107/AHD/2014 DATED 24.03.2017 FOR THE ASSESSMENT YEAR 2010-11 IN THE ASSESSEE`S OWN CASE. IT WAS FURTHER, SUBMITTED THAT BENEFIT OF DOUBT OF OPENING CASH BALANCE OF RS. 2, 90,745 SHOULD BE ALSO GIVEN TO THE ASSESSEE. SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 6 OF 8 6. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS BEEN CHANGING HER STANDS AT EVERY STAGE. NO BOOKS OF ACCOUNTS ARE MAINTAINED AS ADMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2008-09 AND NO BALANCE SHEET WAS PREPARED AS COULD BE SEEN FROM PARA 5.2 OF ASSESSMENT ORDER. THE ASSESSEE HAS CLAIMED THE SOURCE OF CASH DEPOSITS OUT OF ADVANCE RECEIPTS AGAINST AGREEMENT TO SALE OF LAND. AGAIN, THE SAID ADVANCE WERE GIVEN THE COLOUR OF UNSECURED LOAN FROM SAME VERY PERSON. HOWEVER, THE ASSESSEE HAS FAILED TO PRODUCE THE CONCERNED PERSON FOR VERIFICATION BEFORE THE AO NOR FILED ANY CONFIRMATION. WE ALSO NOTE THAT CASH WITHDRAWALS OF RS. 8, 55,000 ON 20.08.2008 WERE AGAINST THE AMOUNT DEPOSITED BY CHEQUE RECEIVED ON 19.08.2008 FROM SHRI ARVINDBHAI TULSIDAS & CO. HOWEVER, BEFORE THAT THERE IS CASH DEPOSITS IN SAID BANK ACCOUNT SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 7 OF 8 OF RS. 8.50 (2+4+2.50). HENCE, SUCH CASH DEPOSITS OF RS. 6.50 LAKHS CANNOT BE ACCEPTED AS EXPLAINED. WE FIND THAT THE AMOUNT DEPOSITED BY CHEQUE RECEIVED FROM SHRI ARVINDBHAI TULSIDAS WAS WITHDRAWN IN CASH ON 20.08.2008. THEREFORE, THE BENEFIT OF DOUBT OF CASH DEPOSITS OF RS. 3.65 LAKH ON 05.01.2009 CAN BE GIVEN IN VIEW OF THE FINDINGS OF TRIBUNAL IN I.T.A. NO. 107/AHD/2014 DATED 24.03.2017 FOR THE ASSESSMENT YEAR 2010-11 IN THE ASSESSEE`S OWN CASE. WHEREIN THE TRIBUNAL HAS HELD THAT PROBABILITY OF CASH WITHDRAWALS CANNOT BE TOTALLY BRUSHED ASIDE. THOUGH SOME DOUBTFUL AND DISQUIETING CIRCUMSTANCES EXIST IN THE SOURCE EXPLAINED TOWARDS CASH DEPOSITS, WE ARE INCLINED TO GRANT BENEFIT OF DOUBT TO THE ASSESSEE. THE ASSESSEE WILL BE ENTITLED TO BENEFIT OF DOUBT. CONSEQUENTLY, THE ADDITION TOWARDS UNEXPLAINED CASH DEPOSIT OF RS. 4,50,000 STANDS DELETED. BE THAT AS MAY BE, THE BENEFIT OF DOUBT FOR CASH DEPOSITS OF RS. 3.65 LAKHS OUT OF SAID CASH WITHDRAWALS OF RS. 8.55 LAKHS IS ALLOWED TO THE ASSESSEE. ACCORDINGLY, ADDITION OF RS. 3, 65, 000 IS DELETED. HOWEVER, OTHER SAVITABEN ARVINDBHAI PATEL V. ITO 2(2) SURAT/I.T.A. NO.297/AHD/2014/A.Y.:09-10 PAGE 8 OF 8 BALANCE ADDITION REMAINS INTACT. THE CONTENTION REGARDING PEAK AND ASSESSING THE INCOME UNDER SECTION 44AD IS CONCERNED, WE FIND THAT, THERE IS NO REGULAR CASH WITHDRAWALS AS WELL AS CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. HENCE, THE PEAK THEORY COULD NOT BE APPLIED. FURTHER, THE PROVISION OF SECTION 44AD COULD NOT PRESSED IN TO SERVICE AS CASH DEPOSITS ARE NOT LINKED WITH ANY BUSINESS RECEIPTS/TRANSACTION OR INCOME FROM BUSINESS AND PROFESSION. IN VIEW OF THE FOREGOING, THE GROUND NO. 1 TO 7 OF APPEAL ARE PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. THIS ORDER PRONOUNCED IN THE OPEN COURT ON 18-06-2018. SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED : 18 TH JUNE 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ) ( / THE CIT(A), 4. PR. CIT 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT