Shri Rakeshkumar P. Patel, Visnagar V. The Dy.CIT (Intl. Taxn.)-1, Ahmedabad

ITA 310/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9149 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 08-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Salary income; Additional evidence; Corroborative evidences
• Section: 143(3)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 310/AHD/2016 ( ASSESSMENT YEAR : 2012-13) RAKESHKUMAR P. PATEL A-16, MANGLAM SOCIETY, AT. KANSHA, TA. VISNAGAR 384315 / VS. DCIT (INTERNATIONAL TAXATION)-1, ROOM NO. 205, SECOND FLOOR, NAVJEEVAN TRUST BUILDING, OFF. ASHRAM ROAD, AHMEDABAD - 380014 ./ ./ PAN/GIR NO. : APAPP1357G ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARDIK VORA, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, SR.D.R. DATE OF HEARING 12/12/2018 !'# / DATE OF PRONOUNCEMENT 21/12/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-13, AHMEDA BAD (CIT(A) IN SHORT), DATED 22.12.2015 ARISING IN TH E ASSESSMENT ORDER DATED 26.02.2015 PASSED BY THE ASSESSING OFFI CER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE AC T) CONCERNING AY 2012-13. ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 2 - 2. AS PER ITS GROUNDS OF APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ACTION OF THE REVENUE IN MAKING ADDITIONS OF RS.10, 18,300/- AS UNEXPLAINED CASH DEPOSITS WHICH AMOUNT REPRESENTS A GGREGATE CASH DEPOSIT IN THE BANK ACCOUNT. 3. BRIEFLY STATED, THE ASSESSEE FILED ITS RETURN O F INCOME DECLARING TOTAL INCOME OF RS.55,09,110/- WHICH PREDOMINATELY INCLUDED FROM SALARIES OF RS.52,37,231/- EARNED IN UK WHICH IS NOT TAXABLE IN INDIA AS THE STATUS OF THE ASSESSEE IS A NON-RES IDENT INDIAN (NRI). THE RETURN FILED BY THE ASSESSEE WAS SUBJEC TED TO SCRUTINY ASSESSMENT. IN THE COURSE OF SCRUTINY ASSESSMENT, THE AO INTER ALIA OBSERVED CERTAIN CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE IN HDFC AGGREGATING TO RS.10,18,300/- ON V ARIOUS DATES TABULATED AS UNDER: DATE AMOUNT MODE OF DEPOSIT 13.04.11 40000 CASH RS.2,57,500/- 16.04.11 27500 CASH 17.05.11 45000 CASH 18.05.11 45000 CASH 20.05.11 35000 CASH 19.08.11 40000 CASH 20.08.11 25000 CASH 26.11.11 49000 CASH RS.7,60,800/- 28.11.11 340000 CASH 15.12.11 49000 CASH 20.12.11 49000 CASH 31.12.11 49000 CASH 03.01.12 35800 CASH 03.01.12 49000 CASH 14.02.12 46000 CASH 14.02.12 45000 CASH 18.02.12 49000 CASH TOTAL 1018300 4. AS A COROLLARY, THE AO INITIATED ENQUIRY TOWARDS THE SOURCE OF SUCH DEPOSITS. IN RESPONSE, THE ASSESSEE SUBMITT ED BEFORE THE ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 3 - AO THAT CASH OF RS.2,57,500/- IN AGGREGATE PERTAINI NG TO ENTRIES FROM 13.04.2011 TO 20.08.2011 WAS DEPOSITED OUT OF PAST SAVINGS RIGHT FROM 14.08.2001. AS REGARDS BALANCE OF RS.7, 60,800/-, IT WAS CLAIMED THAT ASSESSEE HAS WITHDRAWN RS.19 LAKH ON 25.11.2011 FOR PURCHASE OF NEW RESIDENTIAL HOUSE PR OPERTY WHICH DID NOT MATERIALIZE. THE AO HOWEVER DISBELIEVED TH E PATTERN OF DEPOSITS OF SMALL AMOUNTS ON VARIOUS DATES TO BE OU T OF PAST SAVINGS AND THUS REJECTED THE EXPLANATION FOR CASH DEPOSITS OF RS.2,57,500/-. THE AO ALSO REJECTED THE EXPLANATIO N WITH RESPECT TO SOURCE OF REMAINING AMOUNT OF RS.7,60,800/- ON T HE GROUND THAT BANK ACCOUNT FILED BY THE ASSESSEE CLEARLY STIPULAT ES THAT WITHDRAWAL IS IN THE FORM OF CHEQUE PAID AND NOT CASH WITHDRAWAL AS CLAIMED. THE AO ACCORDINGLY FOUND IN HERENT CONSISTENCIES IN THE REPLY OF THE ASSESSEE AND FOUN D THE EXPLANATION FOR THE SOURCE OF CASH DEPOSITS TO BE U NSATISFACTORY. ACCORDINGLY, ADDITION OF RS.10,18,300/- WAS MADE IN THE HANDS OF THE ASSESSEE TOWARDS SUCH UNEXPLAINED CASH DEPOSITS . 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) RE-VISITED THE FACTS BEFORE IT AND WAS A LSO OF THE SAME VIEW THAT THE EXPLANATION OFFERED BY THE ASSESSEE I N SUPPORT OF CASH DEPOSITS WERE NOT SATISFACTORY. CONSEQUENTLY, APPEAL OF THE ASSESSEE WAS DISMISSED. 6. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED THE AP PEAL BEFORE THE TRIBUNAL. 7. LEARNED AR FOR THE ASSESSEE SUBMITTED AT THE OUT SET THAT THE ENTIRE CASH DEPOSITS OF RS.10,18,300/- REQUIRES TO BE DIVIDED IN ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 4 - TWO PARTS I.E. RS.2,57,500/- AND RS.7,60,800/- AS T ABULATED. AS REGARDS CASH DEPOSITS OF RS.2,57,500/-, THE LEARNED AR FOR THE ASSESSEE REITERATED THAT THE AFORESAID DEPOSITS WER E OUT OF CASH ACCUMULATED FROM SALARY INCOME OF THE EARLIER PERIO D AND THEREFORE THE SOURCE OF SUCH DEPOSITS STOOD EXPLAIN ED. AS REGARDS THE REMAINING DEPOSITS OF RS.7,60,800/- IN CASH, IT WAS CONTENDED THAT THE ASSESSEE HAD WITHDRAWN RS.19 LAKHS IN THRE E TRANCHES ON 25.11.2011 WHICH WAS INCORRECTLY MENTIONED AS CHQ. PAID IN THE BANK STATEMENT ISSUED BY THE HDFC BANK. THE SOURCE OF SUBSEQUENT DEPOSITS IS THEREFORE OUT OF THE AFORESA ID CASH WITHDRAWAL OF RS.19 LAKHS. THE LEARNED AR THUS SUB MITTED THAT THE SOURCE OF ENTIRE CASH DEPOSITS IS EXPLAINED. T HE LEARNED AR THEREAFTER ADVERTED OUR ATTENTION TO THE PAPER BOOK AND REFERRED TO A CONFIRMATION LETTER DATED 17.12.2015 RECEIVED FRO M THE HDFC BANK WHICH ENDORSES THE AFORESAID AMOUNT OF RS.19 L AKHS TO BE CASH WITHDRAWAL AS AGAINST ERRONEOUS MENTION CHQ. PAID COMMITTED ON BEHALF OF BANK. ON BEING QUESTIONED B Y THE BENCH FOR OMITTING TO FOLLOW THE DUE PROCEDURE FOR ADMISS ION OF ADDITIONAL EVIDENCES AS CONTEMPLATED IN RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE LEARNED A R DREW BLANK BUT HOWEVER SUBMITTED THAT THE MISTAKE COMMITTED IN NOT FOLLOWING THE STATUTORY PROCEDURE SHOULD NOT OPERAT E AGAINST THE ASSESSEE PER SE IN THE INTEREST OF JUSTICE . THE LEARNED AR ACCORDINGLY PLEADED THAT THE ADDITION TOWARDS CASH DEPOSIT STANDS CORROBORATED IN THE LIGHT OF THE EXPLANATION AND TH E ADDITIONAL EVIDENCE ADDUCED AND CONSEQUENTLY, THE ADDITIONS MA DE TOWARDS CASH DEPOSITS BE DELETED. THE LEARNED AR THEREAFTE R RELIED UPON CERTAIN DECISIONS TO AUGMENT ITS CASE. ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 5 - 8. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE AO AND SUBMITTED THAT THE BANK STATEMENT SHOWIN G CASH DEPOSIT ON VARIOUS DATES SHOWS A PECULIAR AND UNIFO RM PATTERN OF CASH DEPOSITS BELOW RS.50,000/- ON ALL OCCASIONS EX CEPT AT ONE INSTANCE. IT WAS THUS ARGUED THAT SUCH PATTERN SHO WS THAT THE ASSESSEE HAS DELIBERATELY USED THE PECULIAR WAY TO AVOID INQUIRY WHILE DEPOSITING HIS UNACCOUNTED CASH MONEY. THE L EARNED DR FURTHER SUBMITTED THAT THE CLAIM OF RS.19 LAKHS IN THREE TRANCHES ON 25.11.2011 AS CASH WITHDRAWAL IS ALSO WITHOUT AN Y SUPPORTING EVIDENCE BEFORE THE AO OR THE CIT(A). IT WAS THUS SUBMITTED THAT THE REVENUE AUTHORITIES HAVE PROCEEDED TO MAKE ADDI TIONS BASED ON MATERIAL PLACED BEFORE THEM WITH WHICH NO INTERF ERENCE IS CALLED FOR. THE LEARNED DR ALSO PLEADED THAT THE A DDITIONAL EVIDENCE FILED BY WAY OF THE CONFIRMATION LETTER FR OM THE HDFC BANK NOW BEING SUBMITTED BEFORE THE TRIBUNAL IS CON TRARY TO THE ASSERTIONS MADE IN THE BANK STATEMENT ISSUED BY THE HDFC BANK ITSELF WHERE IT IS STATED TO BE CHQ. PAID'. IT WA S THEREAFTER CONTENDED THAT THE ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMATION FROM THE BANK REMAINS UNVERIFIED AND THEREFORE CANN OT BE ADMITTED AT THIS STAGE TO RECOGNIZE THE SOURCE OF C ASH AT BEHEST OF THE ASSESSEE. THE LEARNED DR ACCORDINGLY SUBMITTED THAT THE ADDITIONAL EVIDENCE REQUIRES TO BE REJECTED AND ORD ER OF THE LOWER AUTHORITIES REQUIRES TO BE SUSTAINED. 9. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS. THE SOURCE OF CASH DEPOSIT AMOUNTING TO RS.10,18,300/- IS IN C ONTROVERSY. IT IS THE CASE OF THE ASSESSEE THAT CASH DEPOSIT AGGRE GATING TO RS.2,57,500/- (TABULATED SUPRA) IS OUT OF THE CASH IN HAND OF THE EARLIER YEARS WHEREAS THE BALANCE AMOUNT OF RS.7,60 ,800/- IS OUT ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 6 - OF CASH WITHDRAWALS OF RS.19LAKHS FROM HDFC BANK. EXCEPT FOR THE NARRATIVE MADE OUT TOWARDS DEPOSIT OF RS.2,57,5 00/- OUT OF OLD SAVINGS FROM 2001 TO 2009, THERE IS NO COGENT MATER IAL TO SUPPORT THE PLEA. THE ASSESSEE HAS ALSO NOT EXPLAINED THE REASONS FOR HOLDING SUCH LARGE CASH IN HAND PARTICULARLY WHEN T HE ASSESSEE HAS ALREADY GONE ABROAD (UK) FOR JOB PURPOSE ON 21.11.2 009. THUS, WE HARDLY FIND ANY SEMBLANCE OF BONAFIDE IN THE PLE A OF THE ASSESSEE ON THE SOURCE OF SUCH CASH DEPOSITS. THE TYPICAL PATTERN OF DEPOSITS BELOW RS.50,000/- IN MULTIPLE TRANCHES ONLY ACCENTUATES THE LACK OF BONAFIDES. NEVERTHELESS, P OSSIBILITY OF HOLDING SOME CASH AT ANY POINT OF TIME CANNOT BE EN TIRELY RULED OUT. IN THE ABSENCE OF ANY EVIDENCE, WE RESORT TO ESTIMATIONS FOR PROBABLE HOLDING OF CASH BY A PERSON OF ORDINARY PR UDENCE AND ASSIGN THE SAME TO BE RS.1 LAKH. THEREFORE, WE DE EM CASH DEPOSIT TO THE EXTENT OF RS.1 LAKH OUT OF RS.2,57,5 00/- AS EXPLAINED. ACCORDINGLY, REMAINING ADDITION TO THE EXTENT OF RS.1,57,500/- IS SUSTAINED. 10. CONTINUING FURTHER, AS REGARDS OTHER DEPOSIT OF RS.7,60,800/- OUT OF CASH WITHDRAWALS OF RS.19 LAKHS CLAIMED TO H AVE BEEN WITHDRAWN ON 25.11.2011, THE EXPLANATION FROM THE A SSESSEE DOES NOT PROVIDE ANY SATISFACTORY BASIS. THE CLAIM OF T HE ASSESSEE THAT CASH WAS WITHDRAWN FOR PROPOSED PURCHASE OF RESIDEN TIAL HOUSE PROPERTY (WHICH EVENTUALLY DID NOT TAKE PLACE) DOES NOT INSPIRE CONFIDENCE. A TAXPAYER WOULD BE EXPECTED TO EXPLAI N WHY SUCH LARGE AMOUNT OF CASH WAS NEEDED FOR PROPOSED PURCHA SE OF RESIDENTIAL HOUSE PROPERTY. THE ENTRIES IN THE BAN K STATEMENT ALSO DEMONSTRATE THAT THESE SUM WERE MARKED CHQ. PAID' WHICH IS UNLIKE CASH WITHDRAWALS. A BARE AND UNVERIFIED CON FIRMATION ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 7 - FROM THE HDFC BANK (WITHOUT ANY REFERENCE NUMBER) I NTRODUCED BEFORE THE TRIBUNAL WITHOUT FOLLOWING THE PROCEDURE LAID DOWN IN RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE S IS ALSO CURIOUS. THE CIRCUMSTANCES FOR MENTIONING THE CHQ . PAID WHERE THE CASH WAS STATED TO BE WITHDRAWN IS NOT EXPLAINE D IN THE IMPUGNED ADDITIONAL EVIDENCE. SIMULTANEOUSLY, IT IS ALSO DIFFICULT TO PUT BLINKERS ON UNCHARACTERISTIC PATTERN OF RE-D EPOSITS OF SMALL AMOUNTS ALLEGEDLY HAVING WITHDRAWN SUCH LARGE AMOUN T OF RS.19 LAKHS FOR THE PURPOSE WHICH REMAINED UNSERVED. THE REFORE, WE DO NOT SEE ANY JUSTIFIABLE REASONS TO ADMIT THE ADD ITIONAL EVIDENCE ON RECORD AT THIS JUNCTURE ATTEMPTED TO BE INTRODUC ED WITHOUT FOLLOWING THE PRESCRIBED PROCEDURE. THE DEPOSITS O F RS.7,60,800/- THUS REMAINS UNEXPLAINED. WHILE HOLDING SO, WE TAKE NOTICE OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. SARVANKUMAR SHARMA (2014) 49 TAXMANN.COM 101 (GUJ) WHERE THE ADDITIONS ON ACCOUNT OF CASH DEPOSITS WERE SUSTAINE D WHERE THE EXPLANATION WAS FOUND TO BE UNSUBSTANTIATED. IT IS OSTENSIBLE THAT THE DETERMINATION OF ISSUE IN QUESTION IS DEPENDENT ENTIRELY ON FACTS. NO ABSTRACT LAW IS PLAUSIBLE IN SUCH CASES. WE NOW TAKE NOTE OF THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MANOJ INDRAVADAN CHOKSHI (2014) 50 TAXMANN. COM 419 (GUJ) CITED ON BEHALF OF THE ASSESSEE BUT HOWEVER F IND IT OF NO AVAIL TO THE ASSESSEE IN VIEW OF ALTOGETHER DIFFERE NT FACTS. THE HONBLE GUJARAT HIGH COURT, IN ESSENCE, OBSERVED TH AT ONCE THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT IS EXPLA INED, THE SUBSEQUENT WITHDRAWAL IS NOT REQUIRED TO BE EXPLAIN ED. IN THE INSTANT CASE, THE ESSENTIAL QUESTION IS SOURCE OF C ASH DEPOSIT WHICH IS FACTUAL IN NATURE AND REMAINS UNCORROBORATED. L IKEWISE, THE DECISION OF THE CO-ORDINATE BENCH OF TRIBUNAL IN NA VINCHANDRA ITA NO. 310/AHD/16 [RAKESHKUMAR P. PATEL VS.DCIT] A.Y. 2012-13 - 8 - RAMJIBHAI CHAVDA VS. ITO ITA NO. 2335/AHD/2012 ORDE R DATED 12.04.2013 AND SUDHIRBHAI PRAVINKANT THAKER VS. ITO (2017) 88 TAXMANN.COM 382 (AHMEDABAD-TRIB.) ARE ALSO FOUND TO BE RENDERED IN THE FACTS OF RESPECTIVE CASES, WHICH AR E QUITE DISTINGUISHABLE. THE ASSESSEE IN THE INSTANT CASE H AS ONLY MADE OUT A NARRATIVE WHICH REMAINS UNEXPLAINED. IN THE LIGHT OF ABOVE DISCUSSION, THE ADDITIONAL EVIDENCE FILED WITHOUT F OLLOWING DUE PROCEDURE AND WITHOUT SHOWING THE BONAFIDES CAUSE F OR ITS BELATED ADMISSIONS DESERVES TO BE REJECTED AND THE ACTION O F THE REVENUE REQUIRES TO BE UPHELD EXCEPT TO THE EXTENT OF AN ES TIMATED SUM OF RS.1 LAKH. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 21/12/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 21/12/201 8