Shri Hardik Satish Sharma, Ahmedabad V. The Income Tax Officer, Ward-9(2), Ahmedabad

ITA 3185/AHD/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2541 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 03-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Salary income; Principle of natural justice; Source of fund
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.3185/AHD/2014 (ASSESSMENT YEAR : 2008-09) HARDIK SATISH SHARMA, 402, SAMARTH AVENUE, 48, SARDAR PATEL NAGAR, OPP: NEST HOTEL, NAVRANGPURA, AHMEDABAD 380 009 VS. THE INCOME TAX OFFICER, WARD 9(2), AHMEDABAD. [PAN NO. AQBPS 7578 N] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S. N. DIVATIA, A.R. RESPONDENT BY : SHRI VINOD TANWANI, SR. D.R. DATE OF HEARING 12/12/2018 DATE OF PRONOUNCEMENT 07/03/2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 11.08.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- XVI, AHMEDABAD ARISING OUT OF THE ORDER DATED 31.12.2010 PASSED UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (THE ACT) FOR THE ASSESSMENT YEAR 2008-09 WITH THE FOLLOWING GROUNDS: 1.1 THE ORDER PASSED U/S.250 ON 11-08-2014 FOR A.Y .2008-09 BY CIT(A)-XVI, ABAD UPHOLDING THE ADDITION OF RS.8,60,549/- AS UNEXPLAINED INVESTMENT U/S.69 MADE BY AO IS WHOLLY ILLEGAL, UNL AWFUL AND AGAINST I THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGN ED ADDITIONS. - 2 - ITA NOS.3184/AHD/2014 HARDIK SATISH SHARMA VS. THE ITO ASST.YEAR 2008-09 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND ON FACTS IN CONFIRMING THE ADDITION OF RS.8,60,549/- OUT OF CASH DEPOSITS IN BANK ACCOUNT MADE BY APPELLANT'S WIFE-MRS. RICHA SHARMA, 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ADDITION OF RS.8,60,549/- OUT OF CASH DEPOSITS IN BANK ACCOUNT MADE BY APPELLANT'S W IFE-MRS. RICHA SHARMA. 3.1 THE LD CIT(A) HAS ERRED IN REJECTING THE EVIDEN CE PRODUCED IN SUPPORT OF THE CASH DEPOSITS MADE IN BANK ACCOUNT BY APPELLANT S WIFE. 3.2 WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALTER NATIVE, BOTH THE LOWER AUTHORITIES HAS GRIEVOUSLY ERRED IN REJECTING IN TO TO THE CASH DEPOSITS IN BANK ACCOUNT OUT OF SAVINGS, GIFTS, SALE OF JEWELLE RY ETC. AND THE SAME SHOULD BE ACCEPTED TAKING HOLISTIC VIEW OF THE MATT ER. IT IS, THEREFORE, PRAYED THAT THE ADDITION OF RS.8, 60,549/- UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 3. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE ENGAGED IN BUSINESS OF CIVIL CONSTRUCTION WORK FILED HIS RETURN OF INCOME ON 09.09.2008 SHOWING TOTAL INCOME OF RS.5,11,610/-. THE ASSESSEE DURING THE YEAR HAS SHOWN TOTAL RECEIPTS OF RS.1,53,950/- ON WHICH NET PROFIT OF RS.1,52,094/- HAS BEEN DECLA RED. THE BOOKS OF ACCOUNT, BILLS AND/OR VOUCHERS AND THE BANK STATEMENT WERE PRODUCE D AND THE SAME WERE VERIFIED ON TEST CHECK BASIS. IN TERMS OF THE AIR INFORMATION, THE ASSESSEE HAD DEPOSITED AN AMOUNT OF RS.17,58,400/- IN A BANK ACCOUNT HELD IN HIS NAM E IN BANK OF BARODA, AMBAWADI, AHMEDABAD. WHILE EXPLAINING THE SOURCE OF SUCH DEPO SITS BEFORE THE ASSESSING OFFICER, THE ASSESSEE INFORMED THAT SUCH BANK ACCOUNT WAS A JOINT ACCOUNT, HIS WIFE MRS. RICHA SHARMA OPENED SUCH ACCOUNT IN THE YEAR 2001 AND ONL Y IN THE YEAR 2003, THE ASSESSEE JOINED THE SAME AS THE SECOND HOLDER OF THE ACCOUNT . IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEES WIFE DEPOSITED THE MONEY IN THE SAID ACC OUNT OUT OF HER PAST SAVINGS AND CASH WITHDRAWALS OUT OF HER PAST EARNINGS FROM SALARY, T UITION INCOME, INTEREST INCOME, RECEIPTS OF VARIOUS SOCIAL FUNCTION, SALE OF JEWELLERY ETC. THE OPENING CASH BALANCE OF RS.6,90,530/- AS ON 01.04.2007 WAS REFLECTED IN HER CASH BOOK. THE PAY-IN-SLIPS AND CHEQUES AS OBTAINED FROM THE BANK BY THE ASSESSMENT OFFICER REVEALED THAT MOST OF THE - 3 - ITA NOS.3184/AHD/2014 HARDIK SATISH SHARMA VS. THE ITO ASST.YEAR 2008-09 INSTRUMENTS WERE BEARING THE SIGNATURE OF THE ASSES SEE. THE LEARNED AO ON THE BASIS OF SUCH DOCUMENTS CAME TO A CONCLUSION THAT THE TRANSA CTIONS WERE MADE BY THE ASSESSEE HAVING A SUCCESSFUL BUSINESS OF CIVIL CONSTRUCTION. FURTHER THAT, THE WIFE OF THE ASSESSEE DECLARED LIMITED SOURCES OF INCOME IN THE FORM OF S ALARY INCOME, TUITION INCOME AND INTEREST INCOME THE RETURN OF INCOME. THE ASSESSMEN T WAS FINALIZED WITH AN ADDITION OF RS.8,60,549/-. IN APPEAL, THE LEARNED CIT(A) CONFIRMED THE SAME. H ENCE, THE ASSESSEE IS BEFORE US. 4. AT THE TIME OF THE HEARING OF THE INSTANT APPEAL , THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE WIFE OF T HE ASSESSEE DEPOSITED THE AMOUNT IN QUESTION IN THE BANK OF BARODA OUT OF HER OWN SAVIN GS FROM PERSONAL EARNINGS OF INCOME FROM SALARY, TUITION FEES & OTHER INTEREST INCOME S TARTING FROM 18 YEARS OF AGE. THE RECEIPTS OF CASH ON THE OCCASION OF WEDDING ANNIVER SARY, BIRTH OF CHILD AND STRIDHAN WERE ALSO PRODUCED BEFORE THE LEARNED CIT(A) ON BEH ALF OF THE ASSESSEE. FURTHER THAT, THE CASH RECEIVED IN FESTIVAL OCCASION WAS SAVED BY HER AND THE SAME WAS DULY DEPOSITED IN HER JOINT ACCOUNT WITH THE ASSESSEE. THE PHOTOCOPIE S OF BILLS OF SALE OF JEWELLERY IN THE YEAR 2005-06 WERE ALSO PLACED ON RECORD BY THE ASSE SSEE BEFORE THE ASSESSING OFFICER. THE DETAILS OF SAVINGS ACCRUALS OF MRS. RICHA H. SH ARMA WERE ALSO MADE KNOWN TO THE AUTHORITIES BELOW FROM WHICH SUBSTANTIAL AMOUNT OF RS.7,45,477/- OF NET ACCRUAL (APPROX) WAS REVEALED. THE LEARNED COUNSEL FURTHER SUBMITTED BEFORE US THAT THE PAY-IN-SLIP OBTAINED FROM THE BANK CLEARLY PROVES THE FACT OF R S.1,60,000/- WAS DEPOSITED BY THE WIFE OF THE ASSESSEE. HE, FURTHER RELIED UPON TWO JUDGME NTS PASSED IN THE MATTER OF NEMI CHAND KOTHARI-VS-CIT [2004] 136 TAXMAN 213 (GAU.) A ND SUMATI DAYAL-VS-CIT [1995] 80 TAXMAN 89/214 ITR 801 (SC). ACCORDING TO HIM, IT IS EVIDENT FROM THE RECORDS THAT THE ASSESSEE NOWHERE MANIPULATED BY HI DING HIS INCOME AND THEREFORE HE - 4 - ITA NOS.3184/AHD/2014 HARDIK SATISH SHARMA VS. THE ITO ASST.YEAR 2008-09 PRAYED FOR DELETION OF ADDITION MADE BY THE AUTHORI TIES BELOW. ON THE CONTRARY, THE LEARNED DR RELIED UPON THE ORDERS PASSED BY THE AUT HORITIES BELOW. 5. WE HAVE HEARD THE RESPECTIVE PARTIES, PERUSED TH E RELEVANT MATERIALS AVAILABLE ON RECORD. THE DOCUMENTS NAMELY THE BANK STATEMENT OF THE WIFE OF THE ASSESSEE, CASH BOOK AND CASH FLOW STATEMENT ALONG WITH OTHER DOCUMENTS ANNEXED TO THE PAPER BOOK SHOW THAT THOSE DOCUMENTS WERE DULY PLACED BEFORE THE AU THORITIES BELOW. THE ONLY GROUND BEFORE US IS TO CONSIDER WHETHER THE ADDITION HAS M ADE BY THE AUTHORITIES BELOW U/S 69 IN RESPECT OF CASH DEPOSIT IN THE BANK AS UNEXPLAINED CASH CREDITS IS JUSTIFIABLE OR NOT. WE PERUSED THE DOCUMENTS ANNEXED TO PAPER BOOK AS MENT IONED ABOVE. THE ASSESSEES WIFE IN WHOSE NAME THE AMOUNT WAS CLAIMED TO HAVE BEEN D EPOSITED EITHER BY ASSESSEE OR HERSELF WAS FROM HER INCOME FROM SALARY, SALE OF JE WELLERY AND OTHER SOURCES INCLUDING INCOME TAX RETURN AS AVAILABLE AT PAGES 6, 19 AND 4 7 AT PAPER BOOK SEEMS TO BE GENUINE. THE SALARY CERTIFICATE IS ALSO PART OF THE DOCUMENT BEFORE US. THE CHART PREPARED BY THE ASSESSEE REGARDING HER SOURCE OF INCOME APPEARING I N THE WRITTEN SUBMISSION BEFORE THE LEARNED CIT(A) DATED 07.05.2013 FOR FINANCIAL YEAR 2002-03 TO 2007-08 OF RS.7,45,477/- HAVE ALSO BEEN PERUSED BY US. WE HAVE CAREFULLY CONSIDERED THE JUDGMENTS RELIED UPON BY THE ASSESSEE AS WELL. WE FIND THAT SINCE THE PAY-IN-SLIPS BORE THE SIGNAT URE OF THE ASSESSEE AND NOT THE SIGNATURE OF THE ASSESSEES WIFE. THE LEARNED AO CA ME TO A CONCLUSION THAT THE TRANSACTIONS WERE MADE BY THE ASSESSEE AND NOT BY H IS WIFE. WHILE DOING SO, THE LEARNED AO DID NOT TAKE INTO ACCOUNT THAT THE EVIDENCE RELA TING TO INCOME FROM SALARY, STRIDHAN, INTEREST INCOME FOR A PROLONG PERIOD IN RELATION TO THE INCOME OF THE ASSESSEES WIFE OR THAT THE FACT THAT THE PREPOSITION OF DEPOSING THIS MONEY IN A JOINT ACCOUNT BY THE HUSBAND BY PUTTING HIS OWN SIGNATURE INSTEAD OF HIS WIFE DO ES NOT NECESSARILY LEAD TO A CONCLUSION THAT THE HUSBAND HAS DEPOSITED THE SAME FROM HIS OW N INCOME OTHER THAN THE INCOME - 5 - ITA NOS.3184/AHD/2014 HARDIK SATISH SHARMA VS. THE ITO ASST.YEAR 2008-09 EARNED BY THE WIFE. SINCE THE GENUINENESS OF THE SO URCE OF INCOME OF THE WIFE HAS NOT BEEN QUESTIONED BY THE AUTHORITIES BELOW THE ENTIRE ADDITION CANNOT BE MADE AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. HOWEVER, THE ENTIRE SOURCE OF AMOUNT SO DEPOSITED WAS FAILED TO HAVE BEEN ESTABLISHED BY THE ASSESSEE WITH CORROBORATING EVID ENCES. WE, THEREFORE, TAKING INTO CONSIDERATION THE ENTIRE GAMUT OF THE MATTER FOUND IT FIT AND REASONABLE TO ALLOW RS. 3,00,000/- AS THE SAVING OF THE WIFE OF THE ASSESSE E FROM SUCH ADDITION MADE BY THE AUTHORITIES BELOW. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 07/03/2019 SD/- SD/- ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 07/03/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-XVI, AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD