Sh. Shamsher Singh GIll, Haridwar V. ITO, Haridwar

ITA 2987/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6619 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-01-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K MONGA
• Keywords: Unexplained cash credit
• Section: 143(3); 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.2987/DEL/2015 ASSESSMENT YEAR: 2004-05 SH. SHAMSHER SINGH GILL, VS. ITO, WARD-2, C/O S.K. MONGA & ASSOCIATES, D-29-30, 312-313, GOVINDPURI, INDUSTRIAL AREA, HARIDWAR-249401 (UK) INCOME TAX OFFICE (PAN: AHYPG4152A) HARIDWAR 249401 (UK) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SALIL AGGARWAL, ADV . & SH. S.K. MONGA, ADV DEPARTMENT BY : SH. RAKESH KUMAR, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE IMPU GNED ORDER DATED 27.3.2015 OF LD. CIT(A), DEHRADUN PERTAININ G TO ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS RAISED AS MANY AS 06 GROU NDS, BUT THE LD. COUNSEL OF THE ASSESSEE HAS ONLY PRESSED THE FOLLOW ING 02 GROUNDS WHICH READ AS UNDER:- THAT THE PROVISIONS OF SEC. 68 UNDER WHICH THE AMOUNT HAS BEEN ADDED BY THE AO ARE NOT APPLICABLE. MOREOVER, THE LD. CIT(A) IS NOT JUSTIFIED TO MENTIO N THE APPLICABILITY OF PROVISIONS OF SECTION 69 OF T HE ACT WHICH WAS NOT UNDER THE GROUNDS OF APPEAL OR CAUSE OF ACTION. 2 THAT THE PROVISIONS OF SECTION 292B OF THE I.T. AC T, 1961 ARE ALSO NOT APPLICABLE BECAUSE THERE IS NO MISTAKE, THE AO HAS MADE THE ADDITION U/S. 68 WITH THE CLEAR MIND. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO OB TAINED INFORMATION THAT THE ASSESSEE HAD AN ACCOUNT IN THE ORIENTAL BANK OF COMMERCE, RANIPUR MORE, HARIDWAR WITH THE DEPOSIT OF RS.500/- ON 26.6 .2003. ON 28.6.2003, RS.30,75,000/- WERE DEPOSITED THROUGH TRANSFER AND ON THE SAME DATE AN AMOUNT OF RS.30,00,000/- WERE WITHDRAWN THROUGH CHE QUE. ON 4.7.2003 AN AMOUNT OF RS.3 LAKH WAS FURTHER DEPOSITED THROUG H CLEARING. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ABOV E SUMS DEPOSITED IN HIS BANK A/C NO. 2405 WERE NOT REFLECTED IN HIS RE TURN OF INCOME FOR THE RELEVANT ASSTT. YEAR. IN RESPONSE THE ASSESSEE SUB MITTED THAT HE HAD FILED AN AFFIDAVIT DATED 13.9.2004 IN WHICH HE HAD SUBMIT TED THAT THE PURCHASER OF HIS LAND HAD DEPOSITED THE ABOVE SUMS IN HIS BAN K ACCOUNT NO. 2405 WITH ORIENTAL BANK OF COMMERCE, JWALAPUR THROUGH BA NK TRANSFERS, OUT OF WHICH RS. 30 LAKHS WAS WITHDRAWN BY HIM UNDER PRESS URE MOUNTED UPON HIM BY THE PURCHASERS. THE A.O. CONDUCTED A ENQUIRY WHICH REVEAL THAT TWO TPOS FOR RS.29,25,000/- AND RS.1,50,000/- TOTAL ING RS.30,75,000/- WERE ISSUED BY ORIENTAL BANK OF COMMERCE, CLOCK TOW ER BRANCH, DEHRADUN ON 26.6.2003WHICH WERE TRANSFERRED TO HIS BANK ALE NO. 2405 WITH ORIENTAL BANK OF COMMERCE, JWALAPUR, HARIDWAR. SUBSEQUENT ENQUIRIES REVEALED THAT THE TPOS WERE ISSUED IN FAV OUR OF THE ASSESSEE BY 3 MAKING APPLICATION AND ISSUING CHEQUE OF RS.58,25,0 00/- DATED 25.6.2003 IN FAVOUR OF OBC, CLOCK TOWER, DEHRADUN BY URBAN CO OPERATIVE BANK LTD., 10 GANDHI ROAD, DEHRADUN. THE BRANCH MANAGER, URBAN COOPERATIVE BANK WAS ASKED TO EXPLAIN THE SOURCE OF RECEIVING THE SUM AND CREDITING TO THE BANK AND THEN TRANSFERRING THE SUM TO THE CREDIT OF THE ASSESSEE'S ACCOUNT NO. 2405. IN COMPLIANCE, THE BRA NCH MANGER SUBMITTED THAT THE TRANSACTION HAD TAKEN PLACE ON THE REQUEST OF THE ACCOUNT HOLDER FROM THE ACCOUNT OF SHRI PYARE LAL AND SHRI PRADEEP KUMAR GARG (ACCOUNT NO. 4758), RESIDENCE OF 274 RAJPUR ROAD, D EHRADUN. SUBSEQUENTLY, THE INSPECTOR OF THE WARD WAS DEPUTED TO CONDUCT ENQUIRY AND HE REPORTED BACK THAT HOUSE NO. 274 DID NOT EXI ST ANYWHERE IN THE RAJPUR ROAD AREA. EFFORTS WERE ALSO MADE TO TRACE O UT THE SAID PERSONS WITHOUT SUCCESS. THUS, THE AO CONCLUDED THAT A FORG ED ACCOUNT HAD BEEN OPENED IN THE NAME OF FORGED PERSONS BY THE ASSESSE E HIMSELF. ON FURTHER PERUSAL OF THE ASSESSEE'S RECORD, THE AO. OBSERVED THAT THE ASSESSEE HAD SOLD SOME LAND TO JOINT PURCHASERS NAMELY SMT. URMI LA RANI, W/O SHRI ASHWANI MITTAL, AND SMT. HEMLATA WALIA, W/O SHRI PR ADEEP WALIA. SUMMONS U/S 131 OF THE I.T. ACT, 1961 WERE ISSUED T O BOTH PURCHASERS AND THEIR STATEMENT ON OATH, WERE RECORDED. IN THE STAT EMENT ON OATH, THESE PURCHASERS TOTALLY DENIED THE FACT THAT ANY AMOUNT WAS TRANSFERRED BY THEM BY TPO TO THE BANK, A/C NO. 2405 OF SHRI SHAMSHER SINGH GILL. THUS THE AO OBSERVED THAT THE ASSESSEE HAD FAILED TO DISCHA RGE HIS ONUS REGARDING PROVING THE SOURCE OF THE DEPOSIT IN HIS BANK A/C. THE AO ASCERTAINED 4 DURING THE COURSE OF INVESTIGATION THAT THEN BRANCH MANAGER OF ORIENTAL OF COMMERCE, RANIPUR MORE, HARIDWAR, SHRI PRAVEEN KUMA R KHANNA, HAD GIVEN HIS STATEMENT ON OATH BEFORE THE DISTRICT & S ESSION JUDGE, HARIDWAR. THE AO OBTAINED A CERTIFIED COPY OF THE SAME. IN HIS STATEMENT ON OATH SH. KHANNA HAD STATED THAT BOTH T HE TPOS WERE CARRIED BY SH. SHAMSHER SING GILL HIMSELF FOR DEPOSIT AND RS. 30 LAKHS WERE WITHDRAWN BY HIM THROUGH CHEQUE. IN VIEW OF THESE F ACTS, THE AO HAD CONCLUDED THAT THE VERSION OF THE ASSESSEE THAT HIS BANK ACCOUNT NO. 2405 WAS CREDITED BY THE PURCHASERS WAS TOTALLY BASELESS AND UNTENABLE. HE ALSO HELD THAT THE ASSESSEE HAD ADMITTED WITHDRAWING BEF ORE THE DISTRICT & SESSION JUDGE, HARIDWAR. THE AO OBTAINED A CERTIF IED COPY OF THE SAME. IN HIS STATEMENT ON OATH SH. KHANNA HAD STATED THAT BOTH THE TPOS WERE CARRIED BY SHRI SHAMSHER SINGH GILL HIMSELF FOR DEP OSIT AND RS.30 LAKHS WERE WITHDRAWN BY HIM THROUGH CHEQUE. IN VIEW OF TH ESE FACTS, THE A.O. HAD CONCLUDED THAT THE VERSION OF THE ASSESSEE THAT HIS BANK A/C NO. 2405 WAS CREDITED BY THE PURCHASERS WAS TOTALLY BASELESS AND UNTENABLE. HE ALSO HELD THAT THE ASSESSEE HAD ADMITTED WITHDRAWING T HIS MONEY AND HAD THUS UTILIZED IT. HE CONCLUDED THAT SINCE THE SOURC ES OF THE MONEY HAD NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT W AS NOTHING BUT AN ATTEMPT TO BRING HIS UNACCOUNTED MONEY INTO THE MAIN STREAM WITHOUT PAYING ANY TAX. HE, THEREFORE, ADDED BACK THE AMOUNT OF RS. 30 ,75,000/- TO THE INCOME OF THE ASSESSEE ULS 68 OF THE I.T. ACT, 1961 AND COMPLETED THE ASSESSMENT AT RS. 34,48,870/- VIDE HIS ORDER DATED 18.2.2015 PASSED U/S. 5 143(3) OF THE I.T. ACT, 1961. AGGRIEVED WITH THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE H IS IMPUGNED ORDER DATED 3. NOW THE ASSESSEE IS AGGRIEVED AGAINST THE IMPUGN ED ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. AT THE THRESHOLD, LD. COUNSEL OF THE ASSESSEE HA S ONLY PRESSED GROUND NO.3 & 4 AND STATED THAT THE ISSUE/GROUND NO . 3 INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ITAT, SM C BENCH, MUMBAI DECISION DATED 12.8.2016 PASSED IN ITA NOS. 4223 & 4224 (MUM) OF 2015 (AYRS. 2011-12) IN THE CASE OF SMT. MANASI MAH ENDRA PITKAR VS. ITO. IN THIS BEHALF, HE FILED THE COPY OF THE SAID DECISION AND REQUESTED THAT BY FOLLOWING THE SAME REASONING, THE ADDITION IN DISPUTE MAY BE DELETED, BECAUSE THE PROVISION OF SECTION 68 UNDER WHICH THE AMOUNT HAS BEEN ADDED BY THE AO ARE NOT APPLICABLE. LD. COUNS EL OF THE ASSESSEE FURTHER STATED THAT LD. CIT(A) IS NOT JUSTIFIED TO MENTION THE APPLICABILITY OF PROVISIONS OF SECTION 69 OF THE ACT WHICH WAS NO T UNDER THE GROUNDS OF APPEAL OR CAUSE OF ACTION. WHILE PRESSING GROUND N O. 4, IT WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT THE PROVISI ONS OF SECTION 292B OF THE I.T. ACT, 1961 ARE ALSO NOT APPLICABLE BECAUSE THERE IS NO MISTAKE, THE AO HAS MADE THE ADDITION U/S. 68 WITH THE CLEAR MIN D AND AFTER SATISFACTION. IN VIEW OF THE ABOVE, HE REQUESTED TH AT THE ADDITION IN DISPUTE MAY BE DELETED. 6 5. ON THE CONTRARY, LD. SR. DR RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD.CIT(A) AND THE DEC ISION REFERRED BY THE LD. COUNSEL OF THE ASSESSEE OF THE ITAT, SMC BENC H, MUMBAI DATED 12.8.2016 PASSED IN ITA NOS. 4223 & 4224 (MUM) OF 2015 (AYRS. 2011- 12) IN THE CASE OF SMT. MANASI MAHENDRA PITKAR VS. ITO. I FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL IN R ELYING UPON THE AFORESAID DECISION OF THE ITAT, MUMBAI. FOR THE SAK E OF CLARITY, I AM REPRODUCING THE FINDING GIVEN VIDE PARA NO. 9 & 9 .1 OF THE ITAT, MUMBAI DECISION DATED 12.8.2016 IN THE CASE OF SMT . MANASI MAHENDRA PITKAR VS. ITO, MUMBAI PASSED IN ITA NOS. 4223 & 4 224 (MUM) OF 2015 (AY 2011-12) AS UNDER:- 9. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE PRESENT CASE THE ADDITION HAS BEEN MADE BY T HE INCOME TAX AUTHORITIES BY TREATING THE CASH DEPOSIT S IN THE BANK ACCOUNT AS AN UNEXPLAINED CASH CREDIT WITH IN THE MEANING OF SECTION 68 OF THE ACT. THE LEGAL POI NT RAISED BY THE ASSESSEE IS TO THE EFFECT THAT THE BA NK PASS BOOK IS NOT AN ACCOUNT BOOK MAINTAINED BY THE ASSESSEE SO AS TO FALL WITHIN THE AMBIT OF SECTION 68 OF THE ACT. UNDER SECTION 68 OF THE ACT, IT IS ONLY WH EN AN AMOUNT IS FOUND CREDITED IN THE ACCOUNT BOOKS OF TH E 7 ASSESSEE FOR ANY PREVIOUS YEAR THAT THE DEEMING PROVISIONS OF SECTION 68 OF THE ACT WOULD APPLY IN THE CIRCUMSTANCES MENTIONED THEREIN. NOTABLY, SECTION 6 8 OF THE ACT WOULD COME INTO PLAY ONLY IN A SITUATIO N 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE. THE HON'BLE BOMBAY HIGH.COURT IN THE CASE OF SHRI BHAICHAND GANDHI (SUPRA) HAS APPROVED THE PROPOSITION THAT A BANK PASS BOOK MAINTAINED BY THE BANK CANNOT BE REGARDED AS A BOOK OF THE ASSESSEE F OR THE PURPOSES OF SECTION 68 OF THE ACT. FACTUALLY SPEAKING, IN THE PRESENT CASE, ASSESSEE IS NOT MAINTAINING ANY BOOKS - OF ACCOUNT AND SECTION 68 O F THE ACT HAS BEEN INVOKED BY THE ASSESSING OFFICER O NLY ON THE BASIS OF THE BANK PASS BOOK. THE INVOKING OF SECTION 68 OF THE ACT HAS TO FAIL BECAUSE AS PER TH E JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI BHAICHAND N GANDHI (SUPRA), THE BANK PASS BOOK OR BANK STATEMENT CANNOT BE CONSTRUED TO BE A BOOK MAINTAINED BY-THE ASSESSEE FOR ANY PREVIO US YEAR AS UNDERSTOOD FOR THE PURPOSES OF SECTION 68 O F THE ACT. THEREFORE, ON THIS ACCOUNT ITSELF, THE IMP UGNED ADDITION DESERVES TO BE DELETED. I HOLD SO. 8 9.1 EVEN OTHERWISE, I FIND THAT THE EXPLANATION RENDERED BY THE ASSESSEE HAS BEEN MERELY DISBELIEVE D WITHOUT ESTABLISHING ANY CREDIBLE INFIRMITY OR FALL ACY IN THE SAME. OSTENSIBLY, THE CIRCUMSTANCES IN WHICH TH E CASH DEPOSITS HAVE BEEN MADE AND THE PURPOSE FOR WHICH SUCH MONIES HAVE BEEN UTILIZED IS EMERGING FR OM RECORD AND IN ANY CASE, THERE IS NO MATERIAL FOUND BY THE ASSESSING OFFICER TO DISPROVE THE SAME. OF COURSE, THE ASSESSEE COULD NOT PRODUCE ANY FORMAL CORROBORATIVE EVIDENCE OF HAVING RECEIVED RESPECTIV E AMOUNTS FROM FRIENDS AND RELATIVES, SO HOWEVER, IT IS TO BE APPRECIATED THAT SECTION 68 IS A RULE OF EVIDENC E; AND, THE ASSESSING OFFICER IS EXPECTED TO CONSIDER THE EXPLANATION RENDERED IN THE CONTEXT OF THE CIRCUMSTANCES OF EACH CASE. BE THAT AS IT MAY, SINC E I HAVE ALREADY HELD THAT THE ADDITION IS UNSUSTAINABL E FOLLOWING THE RATIO OF THE JUDGMENT IN THE CASE OF SHRI BHAICHAND N GANDHI (SUPRA), I DO NOT DEAL WITH THE INSTANT ASPECT ANY FURTHER. IN THE RESULT, THE ORDE R OF THE CIT (A) IS SET-ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS. 27,36,500/- MADE UNDER SECTION. 68 OF THE ACT. 9 9.2 RESULTANTLY, APPEAL OF THE ASSESSEE IN ITA NO. 4224/MUM/2015 IS ALLOWED. 7. AFTER PERUSING THE AFORESAID DECISION OF THE ITA T, MUMBAI, I AM OF THE CONSIDERED VIEW THAT THE ISSUE IN DISPUTE IS SQ UARELY COVERED BY THE AFORESAID DECISION, BECAUSE THE FACTS AND CIRCUMSTA NCES OF THE PRESENT CASE ARE EXACTLY SIMILAR AND IDENTICAL TO THAT OF CASE OF SMT. MANASI MAHENDRA PITKAR VS. ITO (SUPRA). THEREFORE, RESPECTFULLY FOL LOWING THE AFORESAID DECISION DATED 12.8.2016 OF THE ITAT, MUMBAI SMC BENCH, PASSED IN ITA NO. 4223 & 4224/MUM/2015 (AY 2011-12) IN THE CASE OF SMT. MANASI MAHENDRA PITKAR VS. ITO, THANE, THE ADDITI ON IN DISPUTE IS DELETED AND ACCORDINGLY, THE GROUND NO. 3 APPEAL OF THE ASSESSEE IS ALLOWED. EVEN OTHERWISE, THE LD. CIT(A) VIDE PARA NO. 14 AT PAGE NO. 10 OF THE IMPUGNED ORDER HAS STATED THAT THE ASSESSEE IS RIGHT WHEN HE SAYS THAT THE PROVISIONS OF SECTION 68 CANNOT BE APPLIED TO AMOUNT CREDITED IN THE BANK ACCOUNT. I FURTHER NOTE FROM THE SAME P ARA THAT LD. CIT(A) WAS WRONG IN OBSERVING THAT THE PROVISIONS OF SECTION 6 9 WOULD QUITE CLEARLY APPLY TO AMOUNTS DEPOSITED INTO THE ASSESSEES BANK ACCOUNT, WHICH WAS NOT UNDER THE GROUNDS OF APPEAL OR CAUSE OF ACTION. I FURTHER FIND THAT THE PROVISIONS OF SECTION 292B OF THE I.T. ACT, 1961 AR E ALSO NOT APPLICABLE BECAUSE THERE IS NO MISTAKE, THE AO HAS MADE THE AD DITION U/S. 68 WITH THE CLEAR MIND AND AFTER SATISFACTION. ACCORDINGLY, TH E GROUND NO. 4 IS ALSO ALLOWED. 10 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/ 2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 28/02/2017 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITATTRUE COPY BY ORDER, ASSISTANT REGISTRAR