Shri Mrugesh G.Sharma, Ahmedabad V. The Income tax Officer,Ward-7(2), Ahmedabad

ITA 3245/AHD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0483 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Unexplained cash credit; Income from undisclosed sources; Additional evidence; Corroborative evidences
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 3245/ AHD/2011 (ASSESSMENT YEAR 2008-09) SHRI MRUGESH G SHARMA, C/O VINIT MOONDRA C.A., 201, SARAP, OPP. NAVJIVAN PRESS, ASHRAM ROAD, AHMEDABAD VS. ITO, WARD 7(2), AHMEDABAD PAN/GIR NO. : ANZPS7052G (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI VINIT MOONDRA, CA RESPONDENT BY: SHRI D K SINGH, SR.DR DATE OF HEARING: 19.02.2013 DATE OF PRONOUNCEMENT: 08.03.2013 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) XIV, AHMEDABAD DATED 28.11.2011 FOR THE ASSESSMENT YEAR 2008-09. THE ONLY GROUND RAISED BY THE ASSESSEE IS AS UNDER: IN THIS ORDER DATED 28.11.2011, LD. CIT(A) HAS ERR ED IN LAW BY UPHOLDING THE ADDITION OF RS.8,14,800/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK MADE BY THE A.O., WITHOUT CON SIDERING THE FACTS OF THE CASE AND REAL NATURE OF TRANSACTIONS D ONE. 2. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT IN THE PRESENT YEAR, THE ASSE SSEE HAS DEPOSITED RS.8,14,800/- IN ACCOUNT N.308120160002953 WITH KOT AK MAHINDRA I.T.A.NO.3245 /AHD/2011 2 BANK AND THE SOURCE OF THIS DEPOSIT COULD NOT BE EX PLAINED BY THE ASSESSEE AND ON THIS BASIS, THE A.O. CONSIDERED THI S AS UNACCOUNTED INCOME AND MADE ADDITION IN THE TOTAL INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE LD. CIT(A) AND ADDITIONAL EVIDENCES WERE SUBMITTED BEFORE THE LD. CIT(A) AND AFTER ADMITTING THE SAID ADDITIONAL EVIDENCES, LD. CIT(A) OBTAINED REMAND REPORT FROM THE A.O. ON THIS ASPECT, BUT NO RELIEF WAS ALLOWED BY LD. CIT(A) ON THIS ISSUE ALTHOUGH ANOTHER ADDITIONAL OF RS.31,03,164 MADE BY THE A.O. U/S 69 OF THE INCOME TAX ACT, 1961 WAS DELETED BY LD. CIT(A) AND NOW, THE ASSESSEE IS IN FURTHER APPEAL B EFORE US FOR ADDITION CONFIRMED BY LD. CIT(A) AND IT WAS BROUGHT TO OUR N OTICE THAT NO APPEAL IS FILED BY THE REVENUE FOR THE ADDITION DELETED BY LD. CIT(A). 3. IT WAS SUBMITTED BY THE LD. A.R. THAT THE ASSESS EE HAS SUBMITTED CASH BOOK FOR THE ENTIRE YEAR BEFORE THE AUTHORITIE S BELOW AND THE COPY OF THE SAME IS AVAILABLE IN THE PAPER BOOK ALSO AND IT CAN BE SEEN THAT THE CASH DEPOSITED IN THE BANK ARE BY WAY OF DEBIT IN C ASH BOOK AND, THEREFORE, THE ADDITION MADE BY THE A.O. AND CONFIR MED BY LD. CIT(A) IS NOT JUSTIFIED. HE ALSO SUBMITTED THAT OUT OF THE T OTAL CASH DEPOSITED IN THE BANK OF RS.8,14,800/-, THERE IS WITHDRAWAL FROM THE SAME BANK OF RS.6.59 LACS AND THE WITHDRAWAL FROM THE BANK IS ON THE DAT E PRIOR TO THE DATE OF DEPOSIT AND, THEREFORE, TO THIS EXTENT, THE SOURCE OF CASH DEPOSITED IN THE BANK STANDS EXPLAINED. HE ALSO SUBMITTED THAT THER E IS OPENING BALANCE OF RS.1,82,910/- AND THERE IS AGRICULTURAL INCOME OF R S.1,82,600/- AND IN ADDITION TO THIS, THERE IS RENTAL INCOME OF RS.69,0 00/- AND OTHER INCOME OF RS.36,915/- AND THEREFORE, THE SOURCE OF ENTIRE CAS H DEPOSIT IS EXPLAINED AND HENCE, NO ADDITION IS CALLED FOR. HE ALSO PLAC ED RELIANCE ON A TRIBUNAL DECISION RENDERED IN THE CASE OF ITO VS BH UPINDER PAL SINGH I.T.A.NO.3245 /AHD/2011 3 CHAWLA IN I.T.A.NO. 4080/DEL/2010 DATED 25.02.2011 IN SUPPORT O THIS CONTENTION THAT WHEN THERE IS CASH WITHDRAWAL FROM BANK ON A DAY PRIOR TO CASH DEPOSITED IN THE BANK, THE SOURCE OF CASH DEPO SIT STANDS EXPLAINED AND NO ADDITION IS CALLED FOR. HE ALSO PLACED RELI ANCE ON ANOTHER TRIBUNAL DECISION RENDERED IN THE CASE OF DEORA TRADING CO. VS ITO AS REPORTED IN 23 TAXMAN 326. RELIANCE WAS ALSO PLACED ON THE FOL LOWING JUDICIAL PRONOUNCEMENTS : I) DAULTRAM RAWATMAL 87 ITR 349 (S.C.) II) SARAOGI CREDIT CORPORATION 103 ITR 344 (PATNA H .C.) III) TOLARAM DAGA 59 ITR 632 (ASSAM H.C.) IV) VISHNULAL KARWA VS ITO, 32 TAXMAN 276 (JAIPUR T RIBUNAL) V) SODARGARCHAND DIWANCHAND VS ITO 32 TTJ (JAIPUR TRIBUNAL) VI) LALCHAND BHAGAT AMBICA RAM VS CIT 37 ITR 288 (S .C.) 4. AS AGAINST THIS, LD. D.R. SUPPORTED THE ORDERS O F AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT THIS ISSUE WAS DECIDED BY LD. CIT(A) AS PER PA RA 3.3 OF HIS ORDER WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REF ERENCE: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND THE SUBMISSIONS GIVEN BY THE APPELLANT. THE A. O. NOTED THAT THERE WERE CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPEL LANT WITH KOTAK MAHINDRA BANK. THE APPELLANT COULD NOT GIVE ANY EXP LANATION DURING THE ASSESSMENT STAGE. DURING THE APPELLATE S TAGE, THE APPELLANT HAS GIVEN WRITTEN SUBMISSION EXPLAINING T HAT THE CASH DEPOSITS WERE OUT OF AGRICULTURE INCOME OF THE APPE LLANT DURING THE YEAR AND ALSO OUT OF VARIOUS WITHDRAWALS MADE FROM THE BANK. THE A. O. HAS EXAMINED THE CLAIM OF THE APPELLANT IN TH E REMAND REPORT AND IT HAS BEEN SUBMITTED BY HIM THAT THE APPELLANT COULD NOT PRODUCE ANY SUPPORTING EVIDENCE REGARDING AGRICULTU RE INCOME. THE LAND FROM WHICH THE AGRICULTURE INCOME HAS BEEN SHOWN IS OWNED BY FOUR PERSONS AND IT IS UNLIKELY THAT THIS MUCH AGRICULTURE INCOME CAN BE OBTAINED FROM THAT LAND. IT IS OBSERV ED THAT THE APPELLANT HAD 48900 SQ.MTR. AGRICULTURE LAND WHICH WAS CO-OWNED I.T.A.NO.3245 /AHD/2011 4 BY FOUR PERSONS IN WHICH SUGARCANE WAS BEING CULTIV ATED. THE LAND WAS NOT SUFFICIENT TO GENERATE THE INCOME CLAIMED B Y HIM. THEREFORE, THE CLAIM OF THE APPELLANT REGARDING DEP OSIT OUT OF AGRICULTURE INCOME IS NOT ACCEPTED. REGARDING THE C LAIM OF WITHDRAWAL FROM BANK ACCOUNT, THE A. O. HAS REPORTE D THAT THE CASH WITHDRAWAL FROM THEL5A7TK~WASUSED FOR THE PAYMENT O F STAMP DUTY FOR REGISTRATION OF THE PROPERTY. THE SAME AMO UNT HAS BEEN CLAIMED AS SOURCE OF DEPOSIT IN THE BANK ACCOUNT. T HE CLAIM OF THE APPELLANT REGARDING REDEPOSIT OF CASH WITHDRAWAL FR OM THE ACCOUNT IS ALSO NOT ACCEPTED AS HE HAS CLAIMED THE UTILISAT ION OF THE SAME AMOUNT FOR TWO DIFFERENT PURPOSES. THE CLAIM REGARD ING OPENING CASH BALANCE OF RS. 1,82,910/- IS ALSO NOT SUPPORTE D BY ANY EVIDENCE TO SHOW THAT THE APPELLANT HAD THAT MUCH C ASH AT THE BEGINNING OF THE YEAR. IF IS, THEREFORE, CLEAR FROM THE ABOVE FACTS THAT THE APPELLANT HAS NOT BEEN ABLE TO SATISFACTOR ILY EXPLAIN THE TACT OF CASH DEPOSIT IN THE BANK ACCOUNT. HE HAS NOT BEE N ABLE TO SUBSTANTIATE HIS CLAIM WITH NECESSARY EVIDENCE. THE REFORE, THE EXPLANATION GIVEN BY THE APPELLANT IS NOT ACCEPTED AND THE ADDITION MADE BY THE A. O. IN RESPECT OF CASH DEPOSITS IN BA NK IS UPHELD. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 6. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT A CLEAR FINDING IS GIVEN BY LD. CIT(A) THAT REGARDING THIS EXPLANATION OF THE ASSESSEE THAT PART OF CASH DEPOSIT IS OUT OF AGRICU LTURAL INCOME, THE SAME COULD NOT BE ESTABLISHED BY THE ASSESSEE AND SINCE THE ASSESSEE IS ONLY 1/4 TH OWNER OF THE LAND OF 48900 SQ. MTRS., THIS LAND IS NOT SUFFICIENT TO GENERATE THIS MUCH INCOME CLAIMED BY THE ASSESSEE. IN SPITE OF THIS CLEAR FINDING OF LD. CIT(A), NOTHING HAS BEEN BROUGHT ON RECORD BEFORE US TO ESTABLISH ABOUT THE QUANTUM OF AGRICULTURAL INCOME IN THE HANDS OF THE ASSESSEE. MOREOVER, THE ASSESSEE HAS DEPOSITED THE CASH ON VARIOUS DATES IN JULY 2007, OCTOBER 2007 AND NOVEMBER 2007 AND TH EREAFTER, SMALL AMOUNTS WERE DEPOSITED IN JANUARY 2008 TO MARCH 200 8. TO EXPLAIN THE SOURCE OF CASH DEPOSITED OUT OF AGRICULTURAL INCOME , IT HAS TO BE ESTABLISHED THAT EVEN IF THERE WAS ANY AGRICULTURAL INCOME, THE SAME WAS I.T.A.NO.3245 /AHD/2011 5 RECEIVED BY THE ASSESSEE PRIOR TO THE DATE OF CASH DEPOSITED IN THE BANK. THERE IS NO EVIDENCE BROUGHT ON RECORD IN THIS REGA RD. SO FAR THE CASH BOOK FOR THE YEAR IS CONCERNED, WE FIND THAT THE EN TIRE CASH BOOK IS OF 3 PAGES BEING COMPUTER PRINTOUT AND IN THE ABSENCE OF ANY SUPPORTING EVIDENCE IN RESPECT OF VARIOUS CASH RECEIPTS SHOWN IN THE CASH BOOK, THIS CANNOT BE ACCEPTED AS EVIDENCE IN SUPPORT OF AVAILA BILITY OF CASH IN THE HANDS OF THE ASSESSEE. EVEN FOR THE OPENING CASH B ALANCE OF RS.1,82,910/- SHOWN IN THE CASH BOOK, NO EVIDENCE H AS BEEN BROUGHT ON RECORD THAT ANY BALANCE SHEET WAS FILED BY THE ASSE SSEE ALONG WITH ANY RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2007-08 SHOWING THIS MUCH CLOSING CASH BALANCE. REGARDING RENTAL INCOME AND MISCELLANEOUS INCOME ALSO, NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHO W AS TO FROM WHOM THIS CASH WAS RECEIVED AND WHAT IS THE DATE OF THES E CASH RECEIPTS SHOWN AND FOR ENTRY IN THE SO CALLED CASH BOOK IN THE ABS ENCE OF ANY SUPPORTING EVIDENCE, SUCH ENTRIES IN THE COMPUTERIZED CASH BOO K, WHICH CAN BE CREATED AFTERWARDS ALSO, IT CANNOT BE ACCEPTED AS A COGENT EVIDENCE REGARDING SOURCE OF CASH WITH THE ASSESSEE. REGARD ING THE CASH WITHDRAWAL FROM THE BANK, A CLEAR FINDING IS GIVEN BY LD. CIT(A) THAT OUT OF THE TOTAL CASH WITHDRAWAL FORM BANK OF RS.6.89 L ACS, AT LEAST RS.3.20 LACS WAS USED FOR STAMP DUTY PAYMENT AND IN SPITE O F QUERY, NOTHING HAS BEEN BROUGHT ON RECORD REGARDING THE DATE OF SUCH P AYMENT OF STAMP DUTY. HENCE OUT OF CASH WITHDRAWAL OF RS.6.89 LACS, IT HA S TO BE ACCEPTED THAT RS.3.20 LACS WAS USED FOR PAYMENT OF STAMP DUTY AND THE BALANCE AMOUNT OF RS.3.69 LACS ONLY WAS AVAILABLE FOR DEPOSIT IN B ANK. BUT THERE ARE OTHER CASH PAYMENTS ALSO IN ADDITION TO PAYMENT OF STAMP DUTY SUCH AS DRAWINGS, PAID TO H K RAO ON VARIOUS DATES AND SINC E OTHER CASH RECEIPTS AND OPENING CASH BALANCES ARE NOT ESTABLISHED, ALL OTHER CASH PAYMENTS I.T.A.NO.3245 /AHD/2011 6 SUCH S DRAWING, PAYMENT TO H K RAO, STAMP DUTY ETC. HAS TO BE REDUCE. MOREOVER, THE ASSESSEE IS SHOWING CLOSING CASH IN H AND OF RS.25,270/-, THE SAME CAN BE ACCEPTED AS OUT OF RENTAL AND MISCE LLANEOUS INCOME. HOWEVER, WHATEVER REMAINS AFTER DEDUCTING OTHER CAS H PAYMENTS FROM RS.3.69 LACS, SHOULD BE CONSIDERED AS CASH AVAILABL E WITH THE ASSESSEE FOR DEPOSIT IN THE BANK AND ADDITION OF BALANCE AMOUNT IS JUSTIFIED. THE A.O. IS DIRECTED ACCORDINGLY. 7. IN THE LIGHT OF ABOVE FACTUAL POSITION, NOW, WE EXA MINE THE APPLICABILITY OF VARIOUS JUDGEMENTS CITED BY THE LD . A.R. - THE FIRST JUDGEMENT CITED IS THE TRIBUNAL DECISIO N RENDERED IN THE CASE OF ITO VS BHUPENDRA PAL SINGH CHAWLA (SUPRA). IN THAT CASE, THERE WAS CASH WITHDRAWAL FROM THE BANK ON 10.03.2004 AND THERE WAS CASH DEPOSIT IN THE BANK OF RS.8.64 LACS IN APRIL 2004 A ND THERE WAS NO ALLEGATION IN THAT CASE THAT CASH WITHDRAWAL WAS US ED BY THE ASSESSEE FOR SOME OTHER PURPOSE. IN THE PRESENT CASE, IT HAS BE EN ESTABLISHED BY THE A.O. THAT PART OF CASH WITHDRAWAL HAS BEEN USED BY THE ASSESSEE FOR PAYMENT OF STAMP DUTY AND HENCE, THERE ARE OTHER CA SH PAYMENTS ALSO AND WE HAVE DIRECTED THE A.O. TO ACCEPT CASH SOURCE TO THE EXTENT OF CASH WITHDRAWN FROM BANKS AFTER DEDUCTING ALL CASH PAYME NTS SUCH AS PAYMENT OF STAMP DUTY, DRAWINGS, PAYMENT TO H K RAO ETC. - THE 2 ND DECISION CITED BY THE LD. A.R. IS THE TRIBUNAL DEC ISION RENDERED IN THE CASE OF DEORA TRADING COMPANY (SUPR A). IN THAT CASE IT WAS SHOWN THAT CASH OF RS.3.30 LACS WAS WITHDRAWN F ROM BANK ON 24.05.2004 AND IT WAS DEPOSITED IN THE BANK ON 08.0 6.2004 AND THERE WAS NO ALLEGATION IN THAT CASE THAT THE CASH WITHDRAWN FORM BANK WAS USED FOR SOME OTHER PURPOSE ALSO BUT IN THE PRESENT CASE, TH ERE ARE OTHER CASH I.T.A.NO.3245 /AHD/2011 7 PAYMENTS ALSO AND WE HAVE DIRECTED THE A.O. TO ACCE PT CASH WITHDRAWAL AFTER ALL CASH PAYMENTS. 8. THE OTHER JUDGEMENTS CITED BY THE LD. A.R. ARE N OT APPLICABLE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. ALL THESE JUDGEMENTS ARE IN RESPECT OF ADDITION MADE BY THE A.O. U/S 68 I.E. FOR UNEXPLAINED CASH CREDIT WHEREAS IN THE PRESENT CASE, THE ADDITION MA DE BY THE A.O. IN RESPECT OF CASH DEPOSITED IN THE BANK BY THE ASSESS EE FOR WHICH ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITED AND, THEREFORE, ADDITION IN THE PRESENT CASE FALLS U/S 69 AND 69A AND NOT U/S 6 8 OF THE ACT AND, THEREFORE, NONE OF THESE JUDGEMENTS CITED BY THE LD . A.R. IS RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. THIS GROU ND IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN HE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.3245 /AHD/2011 8 1. DATE OF DICTATION 22/02/213 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26/02/2013.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 08/03/2013 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.8/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 08/03/2013 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .