Shri Harsh Jain, New Delhi V. ITO, Meerut

ITA 2973/DEL/2012

• Counselvise Citation: 297320114 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH SENIOR
• Assessee Lawyers: O P SAPRA
• Keywords: Unexplained cash credit
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2973/DEL./2012 (ASSESSMENT YEAR : 2009-10) SHRI HARSH JAIN, VS. ITO, WARD 1 (3), C/O O.P. SAPRA & ASSOCIATES MEERUT. C 763, NEW FRIENDS COLONY, NEW DELHI 110 025. (PAN : ABSPJ5050E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI O.P. SAPRA, ADVOCATE REVENUE BY : SHRI SATPAL SINGH, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF CIT (APPEALS), MEERUT DATED 28.05.2012 FOR THE ASSESSME NT YEAR 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL. THE RETURN OF IN COME WAS FILED DECLARING INCOME AT RS.1,51,720/-. THE ASSESSING OFFICER MAD E THE FOLLOWING ADDITIONS:- UNEXPLAINED CASH CREDITS (I) U/S 68 RS.8,60,000/- (II) U/S 68 RS.6,00,000/- (III) RE-PAYMENT OF LOAN RS. 15,000/- (IV) RE-PAYMENT OF LOAN RS.2,50,000/- TOTAL : RS.17,25,000/- ITA NO.2973/DEL/2012 2 THE CIT (A) HAS CONFIRMED THE ADDITIONS. NOW, THE ASSESSEE IS IN APPEAL BEFORE US BY TAKING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THERE WAS NO JUSTIFICATION ON THE PART OF THE AO TO MAKE ADDITION OF RS.8,60,000/- U/S 68 ON ACCOUNT OF CASH DEPOSITED IN APPELLANT'S SB A/C ON VARIOUS DATES AN D ON THE PART OF THE LD. CIT(A) TO CONFIRM THE SAME. 2. THAT NO JUSTIFICATION SUBSISTED AT ALL FOR MAKIN G AN ADDITION OF RS.6,00,000/- ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT OF THE HUF M/S HARSH JAIN & SONS - A SEPARA TE REGULAR ASSESSEE. THE LD. CIT(A) OUGHT TO HAVE DELETED THIS ADDITION IN VIEW OF THE SUBMISSIONS MADE SUPPORTED BY DOCUMENTA RY EVIDENCE. 3. THAT THE ADDITION OF RS.15,000/- AS MADE BY THE AO TOWARDS THE ASSESSABLE INCOME OF THE APPELLANT WAS ALSO WHOLLY UNJUSTIFIED AND THERE WAS NO JUSTIFICATION ON THE P ART OF THE LD. CIT(A) TO CONFIRM THE SAME. 4. THAT THE .ADDITION OF RS.2,50,000/- MADE BY THE AO ON THE GROUND THAT THE APPELLANT HAD REPAID LOAN OF RS .2,50,000/- TO SMT. AMITA JAIN IS ARBITRARY, UNJUST AND ILLEGAL. T HE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE SAME. 5. THAT WITHOUT PREJUDICE TO GROUND NO.1 TO 4 ABOVE , THE ABOVE MENTIONED ADDITIONS OF RS.8,60,000/-, R,.6,00 ,000/-, RS.15,000/- AND RS.2,50,000/- TOWARDS THE ASSESSABL E INCOME OF THE APPELLANT ARE VERY EXCESSIVE. VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECT ORDERS WITH REGARD TO THE ABOVE ADDITIONS A RE EITHER INCORRECT OR ARE UNTENABLE. 6. THAT THE LEVY OF INTEREST U/S 234A, 2348 AND 234 C WAS UNJUSTIFIED AND AT ANY RATE, VERY EXCESSIVE. THE LD . CIT(A) IS INCORRECT IN HOLDING THAT NO APPEAL COULD LIE AGAIN ST THE LEVY OF SUCH INTEREST. 7. THAT THE APPELLATE RESERVES ITS RIGHT TO ADD, AMEND/MODIFY THE GROUNDS OF APPEAL. ITA NO.2973/DEL/2012 3 3. IN THE GROUND NO.1, THE ISSUE IS REGARDING ADDIT ION OF RS.8,60,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME-TAX A CT, 1961 ON ACCOUNT OF CASH DEPOSITED IN ASSESSEES SB ACCOUNT HELD WITH PUNJAB NATIONAL BANK. 4. THE CIT (A) HAS CONFIRMED THE ADDITION BY RELYIN G ON THE FINDINGS OF THE ASSESSING OFFICER AND NOT BELIEVING THE ASSESSEES SUBMISSIONS WITH REGARD TO THE HOME CHEST ACCOUNT DRAWN BY THE ASSESSEE FOR TH E ASSESSMENT YEAR 2007- 08 TO 2009-10. 5. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE A SSESSEE IS MAINTAINING HOME CHEST ACCOUNT IN WHICH THE CASH WAS KEPT AS RE SERVE FUND TO BE UTILIZED AT THE TIME OF NEED AND ASSESSEE IS ALSO MAINTAINING C ASH BOOK IN WHICH ALL THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WERE RECO RDED. THIS FACT IS EVIDENT FROM THE COPY OF HOME CHEST ACCOUNT PLACED AT PAGES 9 & 10 OF THE PAPER BOOK WHICH SHOW THE CASH IN HAND AS ON 31.03.2007 OF RS. 42,000/-. SIMILARLY,, THE COPY OF THE HOME CHEST ACCOUNT WAS PLACED AT PAGES 13 & 14 OF THE PAPER BOOK FOR THE PERIOD APRIL 2007 TO MARCH 2008 WHEREIN THE CASH IN HAND IS SHOWN AS RS.6,10,000/- AS ON 31.03.2008. THE HOME CHEST ACC OUNT FOR THE PERIOD APRIL 2008 TO 31.03.2009 PLACED AT PAGES 17 TO 19 OF THE PAPER BOOK SHOW THE OPENING BALANCE AS ON 01.04.2008 AT RS.6,10,000/- A ND OUT OF WHICH RS.2 LACS WERE DEPOSITED IN THE ASSESSEES BANK ACCOUNT HELD WITH PUNJAB NATIONAL BANK ON 15.04.2008. THUS, SUBSEQUENT DEPOSITS IN THE BA NK ACCOUNT WERE ALSO COMING OUT OF THIS HOME CHEST ACCOUNT WHICH IS EVID ENT FROM PAGES 20 TO 22 OF THE PAPER BOOK. ALL THESE FACTS SHOW THAT ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE IN HOME CHEST ACCOUNT. THE AUTHORITIES BEL OW HAVE NOT DISPUTED THIS ITA NO.2973/DEL/2012 4 CLAIM OF THE ASSESSEE WITH ANY COGENT REASONS. THE REFORE, WE ALLOW THIS GROUND OF ASSESSEES APPEAL. 6. IN THE GROUND NO.2, THE ISSUE RAISED IS DEPOSIT OF RS.6 LACS IN THE BANK ACCOUNT M/S. HARSH JAIN & SONS HUF. 7. THE CIT (A) HAS CONFIRMED THE ADDITION RELYING O N THE FINDINGS OF THE ASSESSING OFFICER AND REJECTING THE ASSESSEES SUBM ISSIONS. 8. WE HAVE HEARD BOTH THE SIDES ON THE ISSUES. WE FIND THAT THERE WAS AN OPENING BALANCE OF RS.12,12,140/- IN THE HOME CHEST ACCOUNT OF HUF AS ON 01.04.2008. THE ONLY GROUND FOR NOT ACCEPTING THE ASSESSEES CONTENTION IS THAT HUF HAS FILED THE RETURN OF INCOME DECLARING INCOME AT RS.1,02,500/- FOR ASSESSMENT YEAR 2007-08 AND RS.1,12,500/- FOR ASSES SMENT YEAR 2008-09 WHICH COULD NOT JUSTIFY SUCH HUGE CASH BALANCE. WE FIND THAT ASSESSEE HAS RECEIVED RS.6 LACS FROM HUF ACCOUNT BY CHEQUES. TH US, THERE WAS NO JUSTIFIABLE REASON FOR DOUBTING OPENING CASH BALANC E OF RS.12,12,140/- IN THE HOME CHEST ACCOUNT OF HUF. OUT OF WHICH, RS.6 LACS WAS DEPOSITED IN ITS ACCOUNT. WE ALSO HOLD THAT ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE AS HUF IS A SEPARATE LEGAL ENTITY AND A TA X ASSESSEE WHICH WAS ALSO FILING REGULAR TAX RETURNS. IN THE CASE OF ASSESSE E, THE AMOUNT WAS ALSO RECEIVED THOUGH BANKING CHANNELS. THE IDENTITY OF THE HUF I S BEYOND ANY DOUBT. THE OPENING BALANCE IN THE HOME CHEST ACCOUNT OF THE HU F WAS SUFFICIENT FOR GIVING RS.6 LACS BY CHEQUE. CONSIDERING ALL THESE FACTS, WE FIND NO MERITS IN THIS ADDITION AND WE DIRECT TO DELETE THE SAME. ITA NO.2973/DEL/2012 5 9. THE THIRD GROUND IS WITH REGARD TO THE ADDITION MADE OF RS.15,000/- REGARDING REPAYMENT OF LOAN TO SMT. KUSUM LATA JAIN , MOTHER OF THE ASSESSEE. 10. THE CIT (A) HAS CONFIRMED THE ADDITION BY RELYI NG ON THE ORDER OF THE ASSESSING OFFICER. THE OPENING BALANCE OF SMT. KUS UM LATA JAIN WAS RS.1,25,000/-. ASSESSING OFFICER STATED THAT ASSES SEE RECEIVED LOAN OF RS.2,54,000/- ON 19.11.2008 AND RS.3,00,000/- ON 25 .06.2008. RS.2,00,000/- WERE REPAID ON 05.03.2009. THEREFORE, CLOSING BALA NCE SHOULD HAVE BEEN RS.4,79,000/- WHILE ASSESSEE HAS SHOWN RS.4,64,000/ -. IN THAT SITUATION, ASSESSING OFFICER HELD THAT RS.15,000/- WAS FROM UN DISCLOSED SOURCES. HENCE, THE ADDITION. 11. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE ASSESSEE HAS SHOWN OPENING BALANCE OF SMT. KUSUM LATA JAIN AS ON 01.04 .2008 AT RS.1,25,000/-. THE ASSESSEES CONTENTION WAS THAT IT WAS WRONGLY A DDED IN THE OPENING BALANCE OF CAPITAL ACCOUNT AND SUBMITTED A REVISED CAPITAL ACCOUNT STATEMENT BEFORE THE ASSESSING OFFICER. IT WAS ALSO SUBMITTE D THAT THE AMOUNT WAS RECEIVED BY CHEQUES AND CONFIRMATION WAS SUBMITTED FROM SMT. KUSUM LATA JAIN BEFORE THE REVENUE AUTHORITIES. AFTER HEARING BOTH THE SIDES, WE HOLD THAT THIS WAS A GENUINE MISTAKE WHICH HAS BEEN RECTIFIED BY THE ASSESSEE. THE CONFIRMATION HAS BEEN SUBMITTED IN THIS REGARD, THE REFORE, THERE WAS NO JUSTIFICATION IN MAKING SUCH ADDITION. THE SAME IS DELETED. 12. IN THE GROUND NO.4, THE ISSUE INVOLVED IS AGAIN ST THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF REPAYMENT OF LO AN TO SMT. AMITA JAIN OF RS.2,50,000/-. ITA NO.2973/DEL/2012 6 13. THE ASSESSING OFFICER HELD THAT ASSESSEE HAS SH OWN OPENING BALANCE OF SMT. AMITA JAIN AS ON 01.04.2008 OF RS.2,50,000/-. DURING THE YEAR, THE ASSESSEE HAS RECEIVED RS.4 LACS THROUGH CHEQUE DATE D 10.12.2008. THEREFORE, THE CLOSING BALANCE IN RESPECT OF SMT. AMITA JAIN S HOULD HAVE BEEN RS.6,50,000/-. HOWEVER, THE CLOSING BALANCE SHOWN IS ONLY RS.4 LACS AND ASSESSING OFFICER MADE AN ADDITION OF RS.2,50,000/- FOR THE REASON THAT THE SAME HAS BEEN REPAID BY ASSESSEE OUT OF UNDISCLOSED SOURCES. THE ASSESSEE SUBMITTED A REVISED CAPITAL ACCOUNT IN WHICH THE AS SESSEE HAS REDUCED HIS CAPITAL BY RS.2.5 LACS AND THE BALANCE IN RESPECT O F SMT. AMITA JAIN WAS INCREASED BY THE SAME AMOUNT. HOWEVER, THE AUTHORI TIES BELOW DID NOT ACCEPT THE ASSESSEES CONTENTION. THE ASSESSEE ALSO SUBM ITTED CONFIRMATION OF LOAN FROM SMT. AMITA JAIN WHERE SHE HAS CATEGORICALLY ME NTIONED THAT THE AMOUNT OF RS.4 LACS WAS RECEIVED BY CHEQUE NO.750038 DATED 10.12.2008. THE REVENUE AUTHORITIES TREATED THE CONFIRMATION FROM SMT. AMIT A JAIN AS FALSE. THE CIT (A) CONFIRMED THE ADDITION. 14. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. IN OUR CONSIDERED VIEW, THERE WAS A CLERICAL MISTAKE IN THE ACCOUNTS OF THE ASSES SEE AND IN THE LEDGER OF SMT. AMITA JAIN. THE ASSESSEE HAS RECTIFIED THE MISTAKE BY DEBITING THE CAPITAL ACCOUNT AND CREDITING THE ACCOUNT OF SMT. AMITA JAI N. THIS REVISED CAPITAL ACCOUNT REFLECTS THE CORRECT AFFAIRS OF THE ISSUE. THE ASSESSEE HAS ALSO SUBMITTED CONFIRMATION/VERIFICATION FROM SMT. AMITA JAIN. IN VIEW OF THESE FACTS, WE FIND NO MERITS IN THIS ADDITION AND WE DELETE THE SAME. ITA NO.2973/DEL/2012 7 15. GROUND NO.6 IS REGARDING THE LEVY OF INTEREST U /S 234A, 234B AND 234C OF THE INCOME-TAX ACT. AFTER HEARING BOTH THE SIDE S, WE HOLD THAT LEVYING OF INTEREST IS MANDATORY IN VIEW OF THE DECISION OF HO N'BLE SUPREME COURT IN CIT VS. ANJUM M.H. GHASWALA 252 ITR 1 (SC). THE ASSESS ING OFFICER SHALL WORK OUT THE LEVY OF INTEREST, IF ANY, WHILE GIVING EFFE CT TO THE APPELLATE ORDER. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 24 TH DAY OF SEPTEMBER, 2014/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT