Shri Jay Kumar Sood, Shimla V. DCIT, Chandigarh

ITA 318/CHANDI/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8252 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DINESH SOOD
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 318/CHD/2014 ASSESSMENT YEAR : 2011-12 SHRI JAY KUMAR SOOD, VS THE DCIT, S/O SHRI MAST RAM SOOD, CENTRAL CIRCLE-II, SANJAY SADAN, CHANDIGARH. CHOTTA SHIMLA, SHIMLA. PAN: ANZPS8958B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL & SHRI DINESH SOOD RESPONDENT BY : SHRI SUSHIL KUMAR DATE OF HEARING : 22.02.2017 DATE OF PRONOUNCEMENT : 01.03.2017 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 07.02.2014 FOR ASSESSMENT YEAR 2011-12. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THIS C ASE, SEARCH & SEIZURE OPERATION WAS CONDUCTED ON 08.10.2010 AT THE RESIDENTIAL AND BUSINESS PREMISES OF M/S SOOD GROUP OF CASES. THE ASSESSEE WAS ALSO COVERED. THE ASSESSEE FILED RETURN OF INCOME SHOWI NG 2 INCOME OF RS. 2,00,720/- WHICH WAS ASSESSED AT RS. 7,09,110/- BY MAKING AN ADDITION OF RS. 5,08,391/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT BEING THE UNEXPLAINED CREDIT ENTRY IN THE T HREE BANK ACCOUNTS. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS). THE LD. CIT(APPEALS) NOTED IN THE IMPUGNED ORDER THAT IT IS A CASE OF THE ASSESSING O FFICER THAT ASSESSEE DID NOT FILE COMPLETE BANK STATEMENTS WITH NARRATION AS CALLED FOR IN RESPECT OF THE CREDIT EN TRIES OF RS. 1,96,304/- WITH AXIS BANK, RS. 93,749/- WITH HD FC BANK AND RS. 2,18,338/- WITH YES BANK LTD. IT WAS ALSO OBSERVED THAT ASSESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE AS TO WHY THE CREDIT ENTRIES TOTALING RS. 5,08,391/- SHOULD NOT BE TREATED AS UNEXPLAINED CRE DIT UNDER SECTION 68 OF THE ACT. THE ASSESSEE SUBMITTE D BEFORE LD. CIT(APPEALS) THAT ASSESSING OFFICER IGNO RED THE CASH-FLOW STATEMENT AS WELL AS THE EXPLANATIONS FOR CREDIT ENTRIES IN THE BANK STATEMENT. THE ASSESSIN G OFFICER IN THE REMAND PROCEEDINGS REITERATED THE ST AND TAKEN IN THE ASSESSMENT ORDER. THE ASSESSEE EXPLAI NED BEFORE LD. CIT(APPEALS) THAT HE HAS DECLARED GROSS INCOME OF RS. 3,00,724/- WHICH INCLUDES HIS SALARY AS A JOURNALIST WHICH WAS ALSO DEPOSITED IN THE BANK ACC OUNT AND WITHDRAWALS FROM M/S AJAY KUMAR SOOD ENGINEERS & CONTRACTORS RS. 4,50,000/- WHICH WAS MORE THAN THE 3 TOTAL CREDITS IN THE BANK ACCOUNT, THEREFORE, ADDIT ION IS WHOLLY UNJUSTIFIED. 3(I) THE LD. CIT(APPEALS) CONSIDERING DETAILS NOTED IN THE BANK ACCOUNTS NOTED THAT ASSESSEE HAS NOT FURNISHED THE COMPLETE BANK STATEMENTS AND HAS NOT FURNISHED SALARY CERTIFICATE. THE LD. CIT(APPEALS) , HOWEVER, GIVEN BENEFIT OF SALARY TO THE EXTENT OF R S. 67,709/- AS SHOWN IN THE BANK ACCOUNT STATEMENT, THOUGH AN INCOMPLETE ONE, WHICH WAS CONSIDERED AS EXPLAINED AND DIRECTED THE ASSESSING OFFICER TO GIV E RELIEF OF RS. 67,709/- TO THE ASSESSEE AND BALANCE ADDITION WAS CONFIRMED. THE ASSESSEE IS IN APPEAL CHALLENGING THE ADDITION OF RS. 5,08,391/- AS UNEXPLAINED CREDIT. 4. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF T HE VIEW ENTIRE ADDITION WAS WHOLLY UNJUSTIFIED. THE ASSESSEE FILED COMPLETE COPIES OF THE BANK STATEMEN TS IN THE PAPER BOOK AND GIST IS ALSO PREPARED OF ALL THE BANK ACCOUNTS. THE DEPOSIT IN AXIS BANK SHOWS THERE IS SALARY DEPOSITED IN THIS BANK ACCOUNT OF THE ASSESS EE AND OTHER ENTRIES ARE ON ACCOUNT OF SAVING BANK INTEREST. THERE IS ONE MORE ENTRY OF OWN CHEQUE OF RS. 12,000/-. IN THE HDFC BANK ACCOUNT, THERE IS OPENI NG BALANCE OF RS. 5200/- ON 08.02.2011 WHICH WAS ON ACCOUNT OF OWN CHEQUE DEPOSITED BY THE ASSESSEE. FURTHER ENTRY OF RS. 17,795/- IS ON ACCOUNT OF OWN ACCOUNT CLOSURE ENTRY AND THE REMAINING ENTRIES ARE IN 4 RESPECT OF THE SALARY OR CASH DEPOSITED FROM 01.04. 2011 TO 04.06.2011 WHICH WILL FALL IN NEXT ASSESSMENT YE AR 2012-13. IN YES BANK ACCOUNT, THERE ARE DEPOSITS O N ACCOUNT OF SALARY, CHEQUE CLEARING AND SAVING BANK ACCOUNT INTEREST. THESE FACTS, THEREFORE, WOULD SU PPORT THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT MAJOR AMOUNT WAS SALARY DEPOSITED IN THESE BANK ACCOUNTS TOTALING TO RS. 3 LACS WHICH HAVE BEEN SHOWN BY ASSESSEE IN RETURN OF INCOME FILED FOR ASSESSMENT Y EAR 2011-12. COPY OF THE ACKNOWLEDGEMENT OF INCOME TAX RETURN AND COMPUTATION IS FILED. THESE FACTS, THER EFORE, CLEARLY PROVE THAT THE MAJOR SOURCE OF DEPOSIT IN T HE BANK ACCOUNT OF THE ASSESSEE WAS SALARY THROUGH BANKING CHANNEL, THEREFORE, CANNOT BE TREATED AS UNEXPLAINED, PARTICULARLY WHEN SALARY IS DISCLOSED IN THE RETURN OF INCOME. OTHERS ARE EITHER SAVING BANK INTEREST OR ENTRIES PERTAINING TO SUBSEQUENT YEAR. THE ASSESSEE, THUS, EXPLAINED ALL THE CREDIT ENTRIES IN HIS ALL THE THREE BANK ACCOUNTS. THERE WAS, THUS, NO JUSTIFICATION TO MAKE THE ADDITION AGAINST THE ASSE SSEE OF THIS AMOUNT. IT MAY BE NOTED HERE THAT LD. CIT(APPEALS) HAS GIVEN BENEFIT OF RS. 67,709/- ON ACCOUNT OF SALARY AS IS SHOWN IN THE BANK STATEMENT EVEN THOUGH IT WAS INCOMPLETE. THEREFORE, ON THE S AME ANALOGY, LD. CIT(APPEALS) SHOULD HAVE DELETED THE E NTIRE ADDITION ON ACCOUNT OF AMOUNT OF SALARY DEPOSITED I N THIS BANK ACCOUNTS OF THE ASSESSEE. 5 5. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ORDERS OF AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST MARCH, 2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD