Shri Sanjay Tandon, New Delhi V. ACIT, New Delhi

ITA 2970/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3936 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: P C YADAV SH NEM SINGH
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 2970 /DEL/201 7 [A.Y. 20 12 - 13 ] SANJAY TANDON VS. ITO, WARD - 63(3) D - 6/156, BATHLA APARTMENT NEW DELHI I.P. EXTENSION, PARTPARGANJ NEW DELHI PAN : ACUPT 6214 B [ ASSESSEE ] [RESPONDENT] DATE OF HEARING : 2 8 . 1 2 .2017 DATE OF PRONOUNCEMENT : 08 .01 .201 8 ASSESSEE BY : SHRI P.C.YADAV, SH. NEM SINGH , ADV. REVENUE BY : MS. ASHIMA NEB, SR. DR ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. CIT(A) - 37 , NEW DELHI VIDE ORDER DATED 2 0 .0 3 .201 7 FOR A.Y. 20 1 2 - 1 3 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: 1. THE ORDER PASSED BY LD CIT(A) IS BAD IN LAW, WRONG ON FACTS , ARBITRARY AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 2 (A) THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY AO OF RS.8,01,000/ - ON ACCOUNT OF CASH DEPOSIT IN BANK TREATING 2 ITA NO. 2970 /DEL/201 7 THE SAME AS UNEXPLAINED CASH CREDIT U/S 69 & 69B OF THE ACT WITHOUT CONSIDERING THE DETAILED SUBMISSION AND EVIDENCE IN SUPPORT OF THE FACT THAT ON THE DATE OF DEPOSITS OF CASH IN BANK THERE WERE CORRESPONDING WITHDRAWALS EITHER FROM BANK OR CASH AVAILABLE IN HAND. (B) THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN FURTHER ENHANCING THE ADDITION MADE BY LD AO BY RS.2,85,500/ - ON ACCOUNT OF UNEXPLAINED SOURCE OF DEPOSIT AGAINST RBS CARD AND CASH IN BANK WITHOUT APPRECIATING THE FACT THAT THERE WAS NO OUTSIDE SOURCE AVAILABLE WITH THE ASSESSEE NOR FOUND BY THE AO AS WELL AS LD CIT(A) FROM WHERE IT COULD BE SAID THAT THE CASH HAS COME AND DEPOSITED WITH BANK AND AGAINST RBS CARD. (C) THE LD CIT(A) AS WELL AS AO HAS FAILED TO APPRECIATE THE FACT THAT MOST OF THE PAYMENT AGAINST CREDIT CARDS WERE MADE DIRECTLY BY THE COMPANY IN WHICH THE ASSESSEE IS A DIRECTOR AND IN FEW CASES IN THE NATURE OF PERSONAL USE THE PAYMENT WERE MADE FROM BANK AND O UT OF CASH IN HAND. 3. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN INITIA TING PENALTY PROCEEDING U/S 271(1)(C ) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE D URING THE ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE BANK STATEMENT OF THE ASSESSEE WAS CALLED FOR AND ON EXAMINATION IT WAS 3 ITA NO. 2970 /DEL/201 7 OBSERVED THAT THE ASSESS E E HAS DEPOSITED CASH AMOUNTING TO RS. 8,01,000/ - IN HIS BANKS. THE DETAILS ARE AS FOLLOWS: INDIAN BANK A/ C NO. 866466250 ROYAL BANK OF SCOTLAND A/C NO 758747 4. THE ASSESS E E WAS ASKED TO EXPLAIN THE C ASH TRANSACTION DONE WITH DOCUMENTARY PROOFS. FURTHER, THE ASSESSE E WAS ASKED TO PRODUCE CASH BOOK AND ITS CORRESPONDING DOCUMENTARY EVIDENCES. THE AR OF THE ASSE S SEE FILED HIS REPLY STATED THAT THE CASH WAS DEPOSITED FROM HIS CASH IN HAND BALANCE DURING T HE IMPUGNED YEAR. THE SUBMISSION OF THE ASSESS E E WAS CONSIDERED AND FOUND NOT TENABLE BY THE ASSESSING OFFICER AS SIMPLY SAYING THAT IT IS OUT OF CASH IN HAND IS NOT A SATISFACTORY DATE MODE OF DEPOSIT AMOUNT 12.08.2011 CASH 2,00,000 10.09.2011 CASH 1,00,000 07.10.2011 CASH 50,000 09.01.2011 CASH 1,00,00(L - , TOTAL 'CSTMHLO/ - DATE MODE OF DEPOSIT AMOUNT 29.04.2011 CASH 45,00 0 04.06.2011 CASH 39,000 29.06.2011 CASH 45,000 02.08.2011 CASH 45,000 02.09.2011 CASH 45,000 30.09.2011 CASH 45,000 03.11.2011 CASH 35,0000 03.12.2011 CASH 32,000 09.12.2011 CASH 20,000 TOTAL SR#00/ - ) 4 ITA NO. 2970 /DEL/201 7 REPLY. THE AR OF THE ASSESS E E FAILED TO PROVE THE EXACT SOURCE OF SUCH CASH AND ITS NEXUS WITH HIS EXPLAINED FUNDS. FURTHER , THE ASSESSING OFFICER RELIED ON THE DECISION OF THE HON'BLE A PEX COURT IN CIT VS K CHINNAT HAMBAN 292 ITR 682 AND DELHI IT AT BENCH HAS ALSO HELD IN MANOJ AGRAWAL VS DCIT 113 ITD 377 THAT CASH DEPOSIT IN BANK SHOULD BE EXPLAINED BY THE ASSESSE E , ALSO IT WILL BE TREATED AS UNEXPLAINED UNDER SECTION 69 AND 69B OF THE I .T ACT . ACCORDINGLY, THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS. 25,25,510/ - TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO ENHANCED THE ADDITION BY RS. 2,85,000/ - SINCE THE ASSESSEE COULD NOT SUBMIT HE EXPLANATION REGARDING CERTAIN DEPOSITS. 6. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUS ED THE ORDERS OF THE A.O AND THE LD. CIT(A). IT HAS BEEN BROUGHT TO MY NOTICE BY THE LD. COUNSEL FOR THE ASSESSEE SHRI P.C. YADAV THAT THE ASSESSEE HAS WITHDRAWN CASH FROM VARIOUS BANK ACCOUNT WHICH IS APPARENT ON RECORD AS PER BANK STATEMENT, WHICH IS AVA ILABLE ON RECORD . T HE FUNDS WHICH HAS BEEN WITHDRAWN BY THE ASSESSEE ON DIFFERENT DATES HAS BEEN DEPOSITED BACK IN THE 5 ITA NO. 2970 /DEL/201 7 BANKS . THE DETAILS OF SAID WITHDRAWALS AND DEPOSIT IS AVAILABLE AT PAGE 21 OF THE PAPER BOOK ON RECORD. AS PER THE BALANCE SHEET, AS ON 31.03 . 2011, BALANCE OF RS. 5,45,200/ - IS AVAILABLE AS CASH IN HAND, WHICH IS A MATTER O F RECORD AVAILABLE AT PAGE 22 OF THE PAPER BOOK AND NO DEFECT IN THE SAME HAS BEEN POINTED OUT. SINCE THE AVAILABILITY OF CASH IS THERE OUT OF WITHDRAWAL OF FUNDS FROM THE SAME BANK ACCOUNT, THEREFORE, IN THE ABSENCE OF ANY PERVERSE FINDINGS BY THE ASSESSING OFFICER OR THE LD. CIT(A) THAT THE SAID CASH WITHDRAWALS HAS BEEN USED ELSEWHERE, NO ADDITION CAN BE MADE ON THIS COUNT OR NO ENHANCEMENT CAN BE MADE. ACCORDINGLY, THE ADDITION SO MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) AND ENHANCEMENT MADE BY THE LD. CIT(A) IS DIRECTED TO BE DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRO NOUNCED IN THE OPEN COURT ON 08 . 0 1 .201 8 . SD/ - [B.P. JAIN] ACCOUNTANT MEMBER DATED: 08 TH JANUARY, 2018 VL/ 6 ITA NO. 2970 /DEL/201 7 COPY FORWARDED TO: 1 . ASSESSEE 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI