Shri Dharmendra Tiwari, Bhopal V. The ITO, Bhopal

ITA 307/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53888 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARMA, A.M. PAN NO. : ABYPT2507Q I.T.A.NO. 307 / IND /20 10 A.Y. : 200 6 - 07 SHRI DHARMENDRA TIWARI, INCOME - TAX OFFICER, G - 1, SWAPNIL APARTMEN T, VS 1(2), PLOT NO.31 - 32, TRILANGA, BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI PRAKASH JAIN, C.A. RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 17 TH AUGUST, 2011. DATE OF PRONOUNCEMENT : 14 TH SEPTEMBER, 2011 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSES SEE AGAINST THE ORDER OF CIT(A) - I DATED 19.01.2010 FOR THE ASSESSMENT YEAR 200 6 - 07 . 2. F OLLOWING GROUNDS HAVE BEEN TAKEN : - 1. THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS BAD IN LAW AS WELL AS ON THE FACTS. IT IS BASED ON - : 2 : - 2 INCORRECT INTERPRETATION OF LAW AND THE FACTS HAVE BEEN ALSO BEEN INCORRECTLY CONSTRUED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN UPHOLDING THE AO S ACTION IN RESPECT OF AD DITION ON ACCOUNT OF ALLEGED UNEXPLAINED DEPOSIT OF RS. 13,83,000/ - ON ACCOUNT OF THE AMOUNT OF CASH DEPOSIT ON DIFFERENT DATES IN THE SAVING BANK ACCOUNT MAINTAINED WITH STANDARD CHARTERED BANK WITHOUT APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS MA DE BEFORE HIM. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 46,848/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST RECE I VED FROM SAVING BANK ACCOUNT HELD WITH STANDARD CHARTERED BANK. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A N INDIVIDUAL HAVING SOURCE OF INCOME FROM REMUNERATION AND INTEREST FROM TWO PARTNERSHIP FIRMS M/S. R. D. SHARMA & SONS AND M/S. TIRUPATI ASSOCIATES . . RETURN OF INCOME WAS FILED DECLARING INCOME OF RS. 2.68 LAC S. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT THE ASSESSEE HAS DEPOSITED RS. 13.83 LAKHS IN THE - : 3 : - 3 STANDARD CHARTERED BANK. ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF VARIOUS DEPOSITS TOTALLING RS. 13.83 LAKHS. AS THE ASSESSEE HAD NO DETAILS OF DEPOSIT, HE APPLIED FOR OBTAINING COPY OF BANK STATEMENTS FROM THE SAID BANK AND THE BRANCH INTIMATED THAT THE SAME MAY BE RECEIVED FROM THE HEAD OFFICE OF THE BANK. THE ASSESSEE FREQUENTLY APPROACHED TO THE BANK FOR GETTING OF BANK STATEMENTS TO KNOW THE DETAILS OF DEPOSIT AND CHEQUES WITHDRAW N FROM THE BANK . THE BANK ISSUED LETTER ON 10 TH NOV.,2008, ENSURING TO FURNISH THE DETAILS BY 15 TH NOV.,08 (COPY OF SAME SUB MITTED TO THE ASSESSING AUTHORITY) AND ON 24 TH NOV.08, SEEKING 15 DAYS TIME TO FURNISH. ( COPY OF SAME ALSO SUBMITTED TO THE ASSESSING AUTHORITY BUT NO BANK STATEMENT WAS FURNISHED TO THE ASSESSEE. ). THEREAFTER, T HE ASSESSING AUTHORITY COLLECTED THE COPY OF BANK STATEMENT FROM BANK AND FURNISHED COPY OF BANK STATEMENT ALONGWITH LETTER DATED 05 .12.08, INSTRUCTING TO EXPLAIN THE SOURCE OF DEPOSITS OF RS. 1383000/ - , DETAILS OF CERTAIN CHEQUES ISSUED BY THE ASSESSEE, WHY BANK INTEREST OF RS. 46,848/ - NOT BEEN CONSIDERED AS INCOME BY THE ASSESSEE AND ESTABLISHING NEXUS OF WITHDRAWALS OF RS. 150000/ - FROM R. D. SHARMA & SONS AND - : 4 : - 4 DEPOSITS IN THE BANK ACCOUNT. THE SAID LETTER WAS SERVED TO THE ASSESSEE ON 11 TH DECEMBER, 2008, INSTRUCTING TO FURNISH DESIRED EXPLANATION ON THE SAME DAY I.E. 11 TH DECEMBER, 2008. THE ASSESSEE DEMANDED FOR SOME MORE TIME TO FURNISH THE DETAILS REQUIRED BY AO ON THE LETTER DATED 05 TH DEC.,08, SERVED TO THE ASSESSEE ON 11 TH DEC.,08, BUT NO SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO FURNISH THE SOURCES OF DEPOSITS AND OTHER DETAILS IN THIS REGARD . 5. WITHOUT PROVIDING A DEQUATE OPPORTUNITY, THE AO COMPLETED THE ASSESSMENT ON 17.12.2008 ITSELF AND ADDITION OF RS. 13.83 LAKHS WAS MADE WITH RESPECT TO VARIOUS AMOUNTS DEPOSITED IN THE BANK AS WELL AS INTEREST OF RS. 46,848/ - CREDITED BY THE BANK. AGGRIEVED BY THIS ORDER, THE ASSESSEE APPROACHED TO THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE FURNISHED COMPLETE DETAILS OF THE DEPOSIT AND SOURCE OF IT DULY MENTIONING THEREIN THE DATES OF DEPOSIT AND DATES OF RECEIPT OF INCOME, WHICH WAS ALLEGED TO BE DEPOSITED ALONGWITH NATURE OF SUCH INCOME AND THE SOURCE FROM WHICH SUCH INCOME WAS RECEIVED . IT WAS SUBMITTED THAT THE ASSESSEE HAD IRRIGATED AGRICULTURAL LAND OF ABOUT 35 ACRES IN THE VILLAGE DHUA - : 5 : - 5 GARIPUR, PATWARI HALKA NO. 17, TAHSIL GHATGAON, DISTRICT GWALIOR. THE LAND WAS ANCEST RAL (HUF) AND WAS IN THE NAME OF THE ASSESSEE AND HIS BROTHER DEVENDRA TIWARI . IT WAS CONTENDED THAT THE ASSESSEE WAS CARRYING OUT THE ENTIRE AGRICULTURAL ACTIVITY ON BEHALF OF THE FAMILY AND THE DEPOSITS IN THE SAID BANK ACCOUNT WERE MADE OUT OF RECEIPTS OF FAMILY AGRICULTURE INCOME. IT WAS ALSO SUBMITTED THAT DURING THE RELEVANT ASSESSMENT YEAR 2006 - 07, THE ASSESSEE SOLD TOTAL AGRICULTURAL CROP OF RS. 13,98,989/ - ON DIFFERENT DATES THROUGH KRISHI UPAJ MANDI AND REALIZE THE SALE PROCEEDS IN CASH AND DEPOS ITED THE SAME IN THE BANK ACCOUNT FROM TIME TO TIME. IT WAS ALSO SUBMITTED THAT THE ASSESSEE IS PARTNER IN R. D. SHARMA & SONS AND MADE A WITHDRAWAL OF RS. 1,50,000/ - DURING THE ASSESSMENT YEAR 2006 - 07. THUS, IT WAS CONTENDED THAT THE DEPOSITS IN THE BANK ACCOUNT WERE MADE OUT OF SALE OF AGRICULTURAL CROPS AND WITHDRAWALS FROM THE FIRM. THUS, THE CASH OF RS. 13,83,000/ - SO DEPOSITED IN THE BANK ACCOUNT WAS OUT OF EXPLAINED SOURCES OF INCOME AND, THEREFORE, IT WAS PRAYED THAT THE ADDITION OF RS. 13,83,000/ - MAY BE DELETED. HOWEVER, THE LD. CIT(A) DID NOT CONVINCE WITH THE ASSESSEE S - : 6 : - 6 SUBMISSION AND, ACCORDINGLY, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. IT WAS ARGUED BY THE LD. A.R. THAT DUE TO DELAY IN OBTAINING THE BANK STATEMENT, THE ASSESSEE COULD NOT FURNISH THE DETAILS BEFORE THE AO AND EVEN AFTER AO DIRECTLY OBTAINED THE BANK STATEMENT , COMPLETED ASSESSMENT BY GIVING OPPORTUNITY OF ONLY ONE DAY FOR EXPLAINING VARIOUS DEPOSITS IN THE SA ID BANK ACCOUNT, THEREFORE, ENTIRE DETAIL WITH SOURCE OF DEPOSIT, NATURE OF DEPOSIT ALONGWITH DOCUMENTARY EVIDENCES WERE FILED BEFORE THE CIT(A). OUR ATTENTION WAS DRAWN TO THE COPY OF P - II KHASRA INDICATING OWNERSHIP OF ASSESSEE AND HIS BROTHER OVER THE A GRICULTURAL LAND, COPY OF RECEIPTS FROM SALE OF AGRICULTURAL INCOME ISSUED BY KRISHI UPAJ MANDI, ALAMPUR, DISTT. BHIND (MP), COPY OF CASH FLOW STATEMENT INDICATING RECEIPT OF SALE PROCEEDS OF THE CROP AND DEPOSIT OF THE SAME IN THE BANK ACCOUNT. OUR ATTENT ION WAS ALSO DRAWN TO THE COPY OF ACCOUNT IN THE BOOKS OF R.D. SHARMA & SON S, WHEREIN ASSESSEE WAS PARTNER AND FROM WHERE THE ASSESSEE HAS WITHDRAWN A SUM OF RS. 1,50,000/ - . IN VIEW OF THESE - : 7 : - 7 DOCUMENTARY EVIDENCES SUBMITTED BEFORE THE CIT(A), IT WAS SUBMITT ED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION WHEN THE DEPOSIT IN THE BANK WAS DULY EXPLAINED WITH THE SOURCE. 7. ON THE OTHER HAND, THE LD. SENIOR D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 8. WE H AVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE DOCUMENTS PLACED BEFORE THE LOWER AUTHORITIES AND TOWARDS WHICH OUR ATTENTION WAS INVITED DURING THE COURSE OF HEARING. FROM THE RECORD, WE FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DEPOSITED VARIOUS AMOUNTS IN THE BANK. THESE AMOUNTS WERE RECEIVED FROM SALE OF AGRICULTURAL CROP ON THE LAND OWNED BY THE ASSESSEE AND HIS BROTHER. DOCUMENTARY EVIDENCE CONFIRMING OWNERSHIP OF THE ASSE SSEE AND HIS BROTHER OVER 35 ACRES OF LAND WAS FURNISHED BEFORE THE LOWER AUTHORITIES. THE ASSESSEE HAS SOLD THE CROP THROUGH KRISHI UPAJ MANDI, ALAMPUR. VARIOUS RECEIPTS ISSUED BY KRISHI UPAJ MANDI FOR SALE OF CROP ON ASSESSEE S BEHALF WAS DULY MENTIONED THEREIN GIVING FULL DETAIL OF NAME OF THE CROP, - : 8 : - 8 ITS WEIGHT, RATE AND THE TOTAL AMOUNT REALIZED ON ITS SALE. ALL THE RECEIPTS OF AGRICULTURAL PRODUCE WAS DULY INCORPORATED IN THE CASH FLOW STATEMENT, WHICH ALSO INDICATED THE DEPOSIT OF THE SAID AMOUNT IN TH E BANK. WE HAVE CORROBORATED EACH AND EVERY ENTRY OF RECEIPTS FROM KRISHI UPAJ MANDI WHICH FINDS PLACE IN THE CASH FLOW STATEMENT. IT IS NOT THE CASE OF THE REVENUE AUTHORITIES THAT THE AMOUNT DEPOSITED IN THE BANK WAS IN EXCESS OF THE AMOUNT REALIZED FRO M SALE PROCEEDS OF THE CROP. WE HAD ALSO VERIFIED THE STATEMENT OF ACCOUNT OF ASSESSEE WITH THE PARTNERSHIP FIRM M/S. R.D. SHARMA & CO., WHEREIN THE ASSESSEE WAS PARTNER AND HAS MADE WITHDRAWAL OF RS.1.50 LAKHS DURING THE YEAR UNDER CONSIDERATION. THIS AMO UNT ALSO FINDS PLACE IN THE CASH FLOW STATEMENT SUBMITTED BEFORE THE LOWER AUTHORITIES. THE ASSESSEE HAS ALSO ACCOUNTED FOR HOUSE HOLD EXPENDITURE IN VARIOUS MONTHS, WHICH VARIES FROM 4500 TO 6500. THUS, THE AVAILABILITY OF CASH BEFORE THE DATE OF DEPOSIT IN THE BANK ACCOUNT WAS DULY EXPLAINED IN THE CASH FLOW STATEMENT. NO FAULT WAS FOUND BY THE REVENUE AUTHORITIES IN THE CASH FLOW STATEMENT SUBMITTED BEFORE THEM OR WITH RE SPECT TO THE RECEIPT OF INCOME OUT OF SALE OF AGRICULTURAL - : 9 : - 9 PRODUCE THROUGH KRISHI UP AJ MANDI AMOUNT RECEIVED ON SALE OF AGRICULTURAL PRODUCE FROM KRISHI UPAJ MANDI WAS ASSESSEE S AGRICULTURAL INCOME NOT LIABLE TO TAX . IN VIEW OF THE DOCUMENTARY EVIDENCES PLACED ON RECORD, WE DO NOT FIND ANY JUSTIFICATION FOR TREATING THE AMOUNT SO DEPOSIT ED IN THE BANK AS UNEXPLAINED. ACCORDINGLY, WE DIRECT THE AO TO DELETE THE ADDITION OF RS. 13.83 LAKHS MADE ON ACCOUNT OF VARIOUS DEPOSITS IN THE BANK. IN SO FAR AS INTEREST WAS ACCRUED ON THE CREDIT BALANCES IN BANK, THE SAME CONSTITUTES ASSESSEE S INCOME FROM OTHER SOURCES AND IS LIABLE TO TAX. ACCORDINGLY, WE CONFIRM THE ACTION OF THE LOWER AUTHORITIES FOR ADDING THE INTEREST ACCRUED ON SUCH DEPOSIT IN THE BANK ACCOUNT IN ASSESSEE S INCOME. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER , 2011. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 TH SEPTEMBER , 2011 . C PU* 12149