Kusum Lata Mittal, New Delhi V. ITO, Ward- 40(4), New Delhi

ITA 3054/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7285 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Unexplained cash credit; Income from undisclosed sources; Competent authority; Reassessment proceedings
• Section: 142(1); 68; 69; 148

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3054/DEL/2018 A.Y. 2009-10 MRS. KUSUM LATA MITTAL, VS. ITO, WARD 40(4) C-2/42A, LAWRENCE ROAD, NEW DELHI DELHI 110 035 (PAN: AVGPM0912) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. R.S. SINGHVI, CA & SH. SATYAJEET GOEL, CA DEPARTMENT BY : SH. S.L. ANURAGI, SR. DR. O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 28.2.2018 OF THE LD. CIT(A)-14, NEW DELHI RELEVANT TO ASSESSMEN T YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT ORDER FOR ASSUMING JURISDICTION U/S. 148 IN ABSENCE OF RECORDING PR OPER SATISFACTION AND APPROVAL U/S. 151 OF THE INCOME TAX ACT , 1961. (II) THAT THE REASONS RECORDED ARE VAGUE AND FAILS TO SA TISFY THE REQUISITE CONDITIONS IN TERMS OF PROVISIONS OF SECTION 14 8 AND AS SUCH THE REASSESSMENT PROCEEDINGS ARE ILLEGAL AND WITHOUT JURISDICTION. 2(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS. 8,64,00 0/- ON THE 2 ALLEGED GROUND OF UNEXPLAINED CASH DEPOSIT U/S. 68 OF T HE INCOME TAX ACT, 1961. (II) THAT THERE BEING NO CASE OF ANY UNEXPLAINED CASH D EPOSIT, THE IMPUGNED ADDITION IS WITHOUT ANY BASIS AND NOT TAKING INTO CONSIDERATION THE DETAILS SUBMITTED BY THE ASSESSEE. 3. THAT THE ORDERS OF LOWER AUTHORITIES ARE NOT JUSTI FIED ON FACTS AND THE SAME ARE BAD IN LAW. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, AL TER OR FORGO ANY OF ALL OF THE GROUNDS AS MAY BE NECESSARY AND IN THE INTEREST OF JUSTICE. 2. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE INF ORMATION WAS RECEIVED FROM THE INVESTIGATION WING, NEW DELHI THAT THE ASSESSEE MAINTAINS A BANK ACCOUNT WITH CANARA BANK, TRI NAGAR, DELHI WHICH REFLECTS CASH DEPOSITS OF RS. 8,64,000/- DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. AFTER RECORDING THE REASON FOR REOPENIN G OF THE ASSESSMENT PROCEEDINGS AND OBTAINING APPROVAL FROM THE COMPETENT AUTHORITY, A NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE, THE ASSESSEE HAS STATED THAT EARLIER RE TURN FOR THE AY 2009-10 MAY PLEASE BE TREATED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THE ASSESSEE ALSO REQUESTED TO SUPPLY THE COPY OF REASONS RE CORDED FOR REOPENING OF THE CASE. THEREAFTER, NOTICES U/S. 143(2) OF THE ACT DATED 22.8.2016 AND U/S. 142(1) OF THE ACT DATED 20.10.20 16 WERE ISSUED TO THE ASSESSEE. IN RESPONSE, THE A.R. FOR THE ASSESSEE APPEARED AND FILED REPLY VIDE LETTER DATED 3.11.2016. AFTER CONSIDERING THE REPLY, THE AO OBSERVED THAT THE ASSESSEE HAS NOTHING TO SAY IN THIS REGARD AND TH E CASH CREDITED IN HER BANK ACCOUNT UNDER CONSIDERATION, IS NOTHING BUT HER OWN UNACCOUNTED MONEY, FOR WHICH SHE HAS NO EXPLANATION, NO EVIDENTIA RY DOCUMENT TO SUPPORT HER CALIM AS MADE BY HER THROUGH THE ABOVE LET TER. THEREFORE, IN 3 ACCORDANCE WITH THE PROVISION OF INCOME TAX AS LAID UNDER SECTION 68 OF THE INCOME TAX ACT, 1961, THE AMOUNT OF RS. 8,64,000/- IS B EING DETERMINED AS HER INCOME FROM UNDISCLOSED SOURCES. THEREFORE, THE AO ADD ED THE SAME TO THE TOTAL TAXABLE INCOME OF THE ASSESSEE AND ASSESSED THE I NCOME OF THE ASSESSEE AT RS. 10,12,780/- VIDE ORDER DATED 23.4.2016. AGAINST THE ORDER OF THE AO, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A) , WHO VIDE HIS IMPUGNED ORDER DATED 28.2.2018 HAS DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), ASSESSEE AP PEALED BEFORE THE TRIBUNAL. 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS N OT PRESSED THE GROUNDS NO. 1(I) & (II), HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. AS REGARDS THE GROUND NO. 2(I) & (II) ARE CONCERNED, HE SU BMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF VIJAY KUMAR PROP. V.K. MEDICAL HALL VS. ITO, WARD-2, FARIDA BAD FOR AY 2011-12 DATED 27.11.2018 PASSED IN ITA NO. 2483/DEL/2015 WHER EIN THE TRIBUNAL HAS ALLOWED THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. HENCE, HE REQUESTED TO FOLLOW THE SAME RATIO AND THIS APPEAL OF THE ASSESSEE MAY BE ALLOWED. 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECOR DS, ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE ORDER OF THE TRIBUNAL I N THE CASE OF VIJAY KUMAR PROP. V.K. MEDICAL HALL VS. ITO, WARD-2, FARIDABAD FO R AY 2011-12 DATED 27.11.2018 PASSED IN ITA NO. 2483/DEL/2015. I FIND CO NSIDERABLE COGENCY IN THE CONTENTION OF THE ASSESSEES COUNSEL THAT THE ISSUE IN DI SPUTE IS SQUARELY COVERED BY THE AFORESAID TRIBUNALS ORDER DATED 27.11. 2018 WHEREIN, THE TRIBUNAL HAS HELD AS UNDER:- 10. WE HAVE HEARD BOTH THE SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 4 11. ADMITTEDLY, ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS, AND IT IS ALSO AN UNDISPUTED FACT THAT CASH HAS BEEN DEPOSITED IN SAVING BANK ACCOUNT OF ASSESSEE, WHICH HE EXPLAINS TO BE SALE PROCEEDS RECEIVED ON SALE OF AGRICULTURAL PLOT. LD. AO APPLIED PROVISIONS OF SECTION 68 OF THE ACT TO CASH FOUND DEPOSITED IN BANK ACCOUNT, SINCE ASSESSEE COULD NOT EXPLAIN SOURCE TO SATISFACTION TO LD. AO, AND BY HOLDING THAT, ASSESSEE HAS NOT DISCHARGED IDENTITY, CREDIBILITY AND MOST IMPORTANTLY GENUINENESS OF TRANSACTION. 12. IT HAS BEEN VEHEMENTLY CANVASSED BY LD.AR THAT PASSBOOK/BANK STATEMENT OBTAINED FROM A BANK DO NOT CONSTRUE BOOKS OF ACCOUNT OF ASSESSEE, AS DEFINED UNDER SECTION 2(12A) OF THE ACT. IT IS ALSO BEEN PROPOSED BY LD.AR THAT SECTION 68 OF THE ACT IS NOT APPLICABLE, WHEN ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNTS. HE, THUS, VEHEMENTLY ARGUED THAT, PROVISIONS OF SECTION 68 IS APPLICABLE, ONLY WHEN, NO EXPLANATION AND/OR EXPLANATION OFFERED BY ASSESSEE IS NOT SATISFACTORY, REGARDING ANY AMOUNT FOUND CREDITED IN BOOKS OF ACCOUNT OF ASSESSEE. 13. BE THAT AS IT MAY, WE HAVE CAREFULLY PERUSED PROVISIONS OF SECTION 68. THIS SECTION STARTS WITH WORDS, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR,. THEREFORE, SECTION 68 CAN BE APPLIED ONLY WHERE, THERE ARE SUM FOUND CREDITED 5 IN BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE. NO DOUBT PASSBOOK /BANK STATEMENT, ARE MAINTAINED BY A BANK FOR ITS CUSTOMERS. THUS IN OUR CONSIDERED OPINION, WE AGREE WITH PROPOSITION ADVANCED BY LD.AR OF NON APPLICABILITY OF SECTION 68 IN CASE OF CASH CREDIT FOUND IN SAVING BANK ACCOUNT. 14. IT IS FURTHER OBSERVED THAT LD. AO APPLIED SECTION 68 AND MADE ADDITIONS IN HANDS OF ASSESSEE, AS UNEXPLAINED CASH CREDITS, TO SUCH AMOUNT, WHICH HAS BEEN FOUND DEPOSITED BY ASSESSEE IN HIS SAVING BANK ACCOUNT. TO OUR MIND IN PRESENT FACTS OF CASE SECTION 69 SHOULD HAVE BEEN INITIATED BY LD.AO. IT IS UNFORTUNATE THAT ASSESSING OFFICERS BLINDLY APPLY PROVISIONS, WHICH CAN BE FATAL TO THE INTEREST OF REVENUE. HOWEVER AS A T RIBUNAL, WE ARE NOT COMPETENT TO MAKE ADDITION U/S 69A OF THE ACT, BY VIRTUE OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN CASE OF SMT. SARIKA JAIN VS. CIT REPORTED IN 407 ITR 254. HONBLE HIGH COURT OBSERVED AS UNDER. 18. IN VIEW OF THE ABOVE, WHEN THE SAID INCOME CANNOT BE ADDED U/S 68 OF THE ACT AND THE TRIBUNAL WAS NOT COMPETENT TO MAKE THE SAID ADDITION UNDER SECTION 69A OF THE ACT, THE ENTIRE ORDER OF THE TRIBUNAL STAND VITIATED IN LAW. 6 RESPECTFULLY FOLLOWING THE ABOVE OBSERVATION BY HONBLE ALLAHABAD HIGH COURT, WE ALLOW ADDITIONAL GROUND RAISED BY ASSESSEE, ONLY BECAUSE ADDITION U/S 68 IS NOT SUSTAINABLE IN PRESENT FACTS OF CASE. ACCORDINGLY THE ADDITIONAL GROUND RAISED BY ASSESSEE STANDS ALLOWED. 5.1 RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENT, WE DELETE THE ADDITION IN DISPUTE AND ALLOW THE GROUND NO. 2(I) & (II) RAISED B Y THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PARTLY A LLOWED. ORDER PRONOUNCED ON 10-01-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE:10/01/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES