MARUTI NANDAN SAH, NAINITAL V. ACIT, CIRCLE- 3, NAINITAL

ITA 3046/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4248 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 01-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: PAWAN KUMAR NATH
• Keywords: Source of fund

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI E BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER, AND SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO. 3046 /DEL/201 8 [ASSESSMENT YEAR: 20 14 - 15 ] MARUTI NANDAN SAH VS. THE A. C.I.T. 86, RAMSAY ROAD CIRCLE - 3 TALLITAL, NAINITAL NAINITAL PAN : BBXPS 5336 N [APPELLANT] [RESPONDENT] DATE OF HEARING : 1 3 . 0 8 .201 8 DATE OF PRONOUNCEMENT : 1 4 .0 8 .2018 ASSESSEE BY : SHRI PAWAN KUMAR NATH, CA . REVENUE BY : S HRI RAVI KANT GUPTA, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] , HALDWANI DATED 2 8 .0 3 .201 8 PERTA INING TO ASSESSMENT YEAR 2014 - 15 . 2 2. THE SUBSTANTIVE GR IEVANCES RAISED BY THE ASSESSEE READ AS UNDER: 1. BECAUSE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AS WELL ON FACTS WHILE CONFIRMING THE ADDITION MADE, R S. 60.00 LAKHS, ON ACCOUNT OF CASH DEPOSITS AND IGNORING THE SETTLED LAW THAT BEFORE MAKING ANY ADDITION ON INCOME A PROPER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PRESENT HIS CASE ON THE PARTICULAR ISSUE OF ADDITION. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALSO ERRED IN LAW NOT APPRECIATING THE FACT THAT THE ADDITIONS WERE MADE WITHOUT QUOTI NG ANY RELEVANT SECTION OF THE ACT, UNDER THE PURVIEW OF WHICH THE AMOUNT OF CASH DEPOSIT CAN BE TAXED. 2. BECAUSE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AS WELL ON FACTS WHILE CONFIRMING THE ADDITION MADE, RS. 20.25 LAKHS, ON ACCO UNT OF PAYMENT FOR PURCHASE OF HOUSE PROPERTY AND IGNORING THE SETTLED LAW THAT BEFORE MAKING ANY ADDITION ON INCOME A PROPER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PRESENT HIS CASE ON THE PARTICULAR ISSUE OF ADDITION. THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) ALSO ERRED IN LAW NOT APPRECIATING THE FACT THAT THE ADDITIONS WERE MADE WITHOUT QUOTING ANY RELEVANT SECTION OF THE ACT, UNDER THE PURVIEW OF WHICH THE AMOUNT OF CASH DEPOSIT CAN BE TAXED. 3 3. BECAUSE, THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN LAW AS WELL ON FACTS WHILE CONFIRMING THE ADDITION MADE, RS. 5.00 LAKHS, ON ACCOUNT OF HOUSEHOLD EXPENSES AND IGNORING THE SETTLED LAW THAT BEFORE MAKING ANY ADDITION ON INCOME A PROPER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PRESENT HIS CASE ON THE PARTICULAR ISSUE OF ADDITION. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALSO ER RED IN LAW NOT APPRECIATING THE FACT THAT THE ADDITIONS WERE MADE WITHOUT QUOTING ANY RELEVANT SECTION OF THE ACT, UNDER THE PURVIEW OF WHICH T HE AMOUNT OF CASH DEPOSIT CAN BE TAXED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM SHARE PROFIT FROM FIRMS AND FROM OTHER SOURCES ETC. RETURN FOR THE YEAR WAS FILED ON 31.03.2015 DECLARING INCOME AT RS. 15,39,110 / - . THE CASE WAS SELECTED FOR LIMITED SCRUTINY THROUGH CASS AND, SUBSEQUENTLY, ON 27.09.2016 THE CASE WAS CONVERTED FROM LIMITED TO COMPLETE SCRUTINY. 4. THE ASSESSEE WAS FOUND TO HAVE DEPOSITED CASH IN THE SAVINGS BANK ACCOUNT NO. 4669 MAINTAINED WITH K URMANCHAL NAGAR SAHKARI BANK LTD, TALLITAL, NAINITAL [KNSB ] AMOUNTING TO RS. 60 LAKHS. THE ASSESSEE WAS ALSO FOUND TO HAVE 4 PURCHASED AN IMMOVABLE PROPERTY AT RANIDHARA, ALMORA FOR RS. 70.25 LAKHS. RS. 50 LAKHS WAS INVESTED OUT OF HOUSING LOAN TAKEN FROM KNSB AND RS. 20.25 LAKHS WAS INVESTED IN CASH. THE ASSESSEE WAS FURTHER FOUND TO HAVE SPENT RS. 5 LAKHS IN HOUSE HOLD EXPENSES. 5. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF CASH DEPOSIT IN KNSB AMOUNTING TO RS. 60 LAKHS. THE ASSESSEE WAS FURTHER ASKED TO EXPLAIN THE SOURCE OF RS. 20.25 LAKHS UTILISED IN PURCHASE OF IMMOVABLE PROPERTY AND THE SOURCE OF RS. 5 LAKHS WHICH WAS SPENT TOWARDS HOUSE HOLD EXPENSES. 6. THE ASSESSEE EXPLAINED THAT CASH SALES OF THE FIRM M/S SHRI JOGESHWAR TRADERS WAS COLLECTED BY HIM AND SUBSEQUENTLY DEPOSITED IN THE BANK ACCOUNT OF THE FIRM. IT WAS EXPLAINED THAT ON TWO OCCASIONS CASH WAS DEPOSITED IN THE PERSONAL BANK ACCOUNT OF THE ASSESSEE WHICH AMOUNTS TO RS. 60 LA KHS. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE FURNISHED COPY OF CURRENT ACCOUNT IN THE BOOKS OF M/S SHRI JOGESHWAR TRADERS . THE ASSESSEE TRIED TO EXPLAIN THE CASH 5 DEPOSITED IN HIS SAVINGS BANK ACCOUNT WITH KNSB FROM THE ENTRIES IN THE CURRENT ACCOUNT W ITH M/S SHRI JOGESHWAR TRADERS. THE AO DID NOT FIND ANY SUBSTANCE IN THE CLAIM OF THE ASSESSEE AND MADE ADDITION OF RS. 60 LAKHS WHICH WAS SUBSEQUENTLY CONFIRMED BY THE FIRST APPELLATE AUTHORITY. 7. IN RESPECT OF INVESTMENT OF RS. 20.25 LAKHS IN CASH TOW ARDS PURCHASE OF IMMOVABLE PROPERTY, THE ASSESSEE ONCE AGAIN TOOK SHELTER BEHIND THE CURRENT ACCOUNT WITH M/S SHRI JOGESHWAR TRADERS AND ONCE AGAIN FAILED TO CONVINCE THE AO. ADDITION WAS MADE AND CONFIRMED BY THE CIT(A). 8. SOURCE OF HOUSE HOLD EXPENSE S OF RS. 5 LAKHS WAS ALSO FROM THE CURRENT ACCOUNT WITH M/S SHRI JOGESHWAR TRADERS AND ONCE AGAIN DID NOT FIND ANY FAVOUR WITH THE AO /CIT(A). 9. BEFORE US, THE LD. AR DREW OUR ATTENTION TO THE CURRENT ACCOUNT WITH M/S SHRI JOGESHWAR TRADERS, WHICH IS EXHIBITED AT PAGES 11 TO 17 OF THE PAPER BOOK. 6 10. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE COPY OF LEDGER ACCOUNT. A PERUSAL OF THE SAID COPY OF LEDGER ACCOUNT REVEALS THAT THERE ARE DEBIT AND CREDIT ENTRIES. HOWEVER, SUCH DEBIT AND CREDIT ENTRIES CANNOT ESTABLISH THE AVAILABILITY OF CASH WITH THE ASSESSEE WHICH HE COULD HAVE DEPOSITED IN HIS SAVINGS BANK ACCOUNT AND UTILISED IN THE PURCHASE OF IMMOVABLE PROPERTY. MOREOVER, WE FIND THAT THE FIRM M/S SHRI JOGESHWAR TRADERS WAS HAVING BANK ACCOUNT WITH NAINITAL BANK LTD WHEREAS THE ASSESSEE WAS HAVING SAVINGS BANK ACCOUNT WITH KNSB. WE FAIL TO UNDERSTAND AS TO WHY WOULD A FIRM PERMIT ITS PARTNER TO DEPOSIT THE SALE PROCEEDS IN HIS PERSONAL SAVING BANKS ACCOUNT. NO DOCUMENTARY EVIDENCE HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THE AVAILABILITY OF CAS H VIS A VIS ENTRIES IN THE FIRMS BOOKS OF ACCOUNT. 11. CONSIDERING THE PECULIAR FACTS IN TOTALITY, WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. WE, ACCORDINGLY, DISMISS THE CURRENT LEDGER ACCOUNT IN THE BOOKS O F THE F IRM M/S SHRI JOGESHWAR TRADERS . A S THE SOURCE OF FUNDS IS IN THE HANDS OF THE ASSESSEE , ALL THE 7 THREE ADDITIONS MADE BY THE AO AND CONFIRMED BY THE CIT(A) ARE UPHELD. 12 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 1 4 . 0 8 .2018. S D / - S D / - [ K.N. CHARY ] [N.K. BILLAIYA] J UDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 4 T H AUGUST , 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 8 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER