DINESH AGARWAL, Jaipur V. ITO, Jaipur

ITA 327/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99281 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 28-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHTA JCIT DHK
• Assessee Lawyers: FAZLUR RAHMAN KHAN S
• Keywords: Principle of natural justice
• Section: 143(3); 234B; 133(6); 131

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 327/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 SHRI DINESH AGARWAL D-53, GANESH PARK, AMBABARI, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD-4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A- @ PAN/GIR NO.: ABEPA 2356 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI FAZLUR RAHMAN KHAN, (ADVOCATES) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHTA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/07/2015 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 11/08/2015 VKNS'K@ ORDER PER SHRI T.R. MEENA, A.M. THIS IS AN APPEAL BY THE ASSESSEE EMANATING FROM TH E ORDER OF LD. CIT(A)- II, JAIPUR DATED 31.01.2013 FOR THE ASSESSMENT YEAR 2006-07. THE EFFECTIVE GROUNDS RAISED IN THE APPEAL ARE AS UNDER :- 1) THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN T HE ORDER U/S 143(3) OF THE ACT DATED 26.12.2008 ARE BAD IN LAW AN D ON FACTS OF 2 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE DELETED. 2) RS. 4,85,082/- : THE LD. CIT (A) ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING THE ADDITION UPTO RS. 4,85,082/- AS UNDISCLOSED INCOME ADDED BY THE AO ON ACCOUNT OF CA SH SHORTAGE OUT OF RS. 12,85,0823/- (RS. 5,12,566.4 + RS. 7,72, 516.45). THE ADDITION SO MADE BY THE AO AND PARTY CONFIRMED BY T HE LD. CIT (A), IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FAC TS ON THE RECORD AND HENCE, THE SAME MAY KINDLY BE DELETED IN FULL. 3) THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CHARGING INTEREST U/S 234B & 234D OF THE ACT. THE AP PELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING OF ANY SUCH INTERE ST. THE INTEREST SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 2. GROUND NO. 1 AND 2 ARE AGAINST CONFIRMING ADDITI ON OF RS. 4,85,082/- BY THE LD. CIT (A) WHICH WAS IN ASSESSMENT ORDER RS. 12,8 5,823/-. THE ASSESSEE HAS SHOWN INCOME FROM RENT, PROFIT FROM TRADING, INT EREST AND DIVIDEND INCOME. HE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CO NSIDERATION ON 31.10.2006 AT RS. 1,87,485/-. THE CASE WAS SCRUTINIZED UNDER SECTI ON 143(3) OF THE ACT. THE AO OBSERVED THAT DURING THE YEAR THE ASSESSEE HAD MADE HEAVY SALES, PURCHASES OF SHARES AND UNITS OF DIFFERENT MUTUAL FUNDS. SOURCE OF INVESTMENTS MADE IN ACQUIRING UNITS OF VARIOUS MUTUAL FUNDS WAS EXAMINED DURING THE ASSESSMENT PROCEEDINGS. FOR THIS PURPOSE, SOURCE OF DEPOSIT I N ASSESSEES BANK ACCOUNT MAINTAINED WITH STANDARD CHARTERED BANK VIS--VIS CO MPUTERIZED PERSONAL BOOKS OF ACCOUNTS WERE EXAMINED. EACH ENTRY OF CASH DEPOS IT AND WITHDRAWALS AS APPEARING IN THE BANK ACCOUNT OF ASSESSEE WAS CROSS TALLIED WITH THE ENTRIES 3 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. APPEARING IN PERSONAL COMPUTERIZED CASH BOOK SUBMIT TED BY THE ASSESSEE. ON SUCH VERIFICATION IT WAS NOTICED THAT ON TWO OCCASION S I.E. 20.11.2005 AND 20.02.2006) DURING THE YEAR UNDER REFERENCE THERE WA S SHORTAGE OF CASH IN THE HANDS OF THE ASSESSEE. HOWEVER, PAYMENT WAS MADE TO F IRM M/S. JAI HANUMANT. THIS RESULTED IN SHORTAGE OF CASH ON IMPUGNED DATES. THEREFORE, THE ASSESSEE WAS ASKED TO FURNISH HIS EXPLANATION VIDE SHOW CAUSE NOTICE ISSUED ON 30.06.2008. THE SHOW CAUSE NOTICE HAS BEEN REPRODUCED BY THE AO ON PAGES 2 & 3 WHICH WAS REPLIED BY THE ASSESSEE BY LETTER DATED 21.07.2008 WHICH HAS ALSO BEEN REPRODUCED BY THE AO ON PAGES 3 & 4 TO VERIFY THE CORRECTNESS OF THE SUBMISSIONS OF THE ASSESSEE. THE LD. AO ENQUIRED UN DER SECTION 131/133(6) OF THE IT ACT WITH THE CONCERNED BANK AUTHORITY AND STAM P ISSUING AUTHORITY. IN RESPONSE TO NOTICE UNDER SECTION 133(6) REGARDING WI THDRAWAL OF RS. 8,90,000/- ON 20.11.2005, THE STANDARD CHARTERED BANK HAS INTI MATED THAT WE ARE NOT ABLE TO LOCATE ANY WITHDRAWL ON 20 TH NOV., 2005 FROM ACCOUNT NO. 751-1-003633- 8 IN THE NAME OF MR. DINESH AGARWAL. STATEMENT UNDER SECTION 131 ALSO RECORDED BY THE AO OF SHRI NITIN GUPTA, MANAGER (OP ERATIONS) ON 10.09.2008, WHO HAD CONFIRMED THAT DURING THE RELEVANT PERIOD TH E BANK WAS WORKING AS 365 DAYS BRANCH AND THE TRANSACTIONS ENTERED INTO ON HO LIDAYS WERE RECORDED BY THE BANK WITH THE VALUE DATE OF NEXT WORKING DAY. THUS, I N THE RECORDS OF THE BANK THE TRANSACTIONS ON NEXT WORKING DAY REPRESENTED NOT ONLY THE TRANSACTIONS EXECUTE ON THAT DAY ITSELF BUT THE TRANSACTIONS WHIC H TOOK PLACE ON JUST PRECEDING 4 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. HOLIDAY. FOR INSTANCE, THE TRANSACTIONS APPEARING I N THE RECORDS OF THE BANK WITH THE VALUE DATE OF MONDAY, IN FACT, WOULD REPRESENT N OT ONLY THE TRANSACTIONS WHICH TOOK PLACE ON MONDAY ITSELF BUT THE TRANSACTIO NS TOOK PLACE ON SUNDAY ALSO. IN SUCH SITUATION IT IS NOT NECESSARY TO KNO W WHETHER A PARTICULAR TRANSACTION WAS ENTERED EXECUTED ON MONDAY OR ON SUN DAY. THE AO REPRODUCED SOME OF THE CONTENTS OF THE STATEMENTS ON PAGES 4 & 5 OF THE ASSESSMENT ORDER. THE AO HELD THAT AFTER GOING THROUGH THE STATEMENT O F MANAGER OPERATIONS SHRI NITIN GUPTA THERE REMAINS NO DOUBT THAT THE PARTICU LAR WITHDRAWAL OF RS. 8,90,000/- WHICH WAS CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE ON 20.11.2005 WAS NOT MADE ON 20.11.2005. INSTEAD THE S AME WAS MADE ON 21.11.2005. THEREFORE, THE EXPLANATION SUBMITTED B Y THE ASSESSEE REGARDING CASH SHORTAGE ON 20.11.2005 WAS NOT FOUND CORRECT BY THE AO. THE AO FURTHER OBSERVED THAT AS REGARDS SO CALLED AGREEMENT TO SAL E DATED 20.02.2006, THIS AGREEMENT HAS BEEN WRITTEN ON AN STAMP OF RS. 100/- HAVING SERIAL NO. F 888923 AND SHOWN IN THE NAME OF M/S. GOODWILL FINCOM PVT. LT D. BY STAMP VENDOR SHRI CHETAN SAINI, BARODIA BASTI, JAIPUR VIDE HIS REGIST ER SL. NO. 7887 DATED 02.02.2008. ENQUIRIES U/S 133(6) WERE CONDUCTED WITH THE OFFICE OF THE COLLECTOR (STAMPS), JAIPUR. IN RESPONSE, THE OFFIC ER- IN-CHARGE, DISTRICT RECORD CELL, JAIPUR VIDE HIS OFFICE LETTER NO. RECORD/08/2 93 DATED 12.09.2008 HAD SENT A COPY OF RELEVANT PAGE FOR 02.02.2006 OF THE REGISTR AR OF STAMP VENDOR SHRI CHETAN SAINI. HE HAS ALSO STATED THAT ON 02.02.200 6 THERE ARE SL. NO. 2319 TO 5 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. 2335 ONLY IN THE SAID REGISTER. ON THAT BASIS IT WA S FOUND BY THE AO THAT THE NAME OF PURCHASE OF SAID STAMP I.E. M/S. GOODWILL FI NCOM PVT. LTD. WAS NOT REFLECTED THERE. THE LD. AO AGAIN HAD GIVEN THE SHOW CAUSE NOTICE ON 28.11.2008 WHICH HAS BEEN REPRODUCED ON PAGES 5 & 6. THE ASSESSE E ALSO REPLIED AGAINST THIS QUERY LETTER VIDE LETTER DATED 11.12.2008 WHICH HAS BEEN REPRODUCED ON PAGES 6 & 7 OF THE ASSESSMENT ORDER. AFTER CONSIDE RING THE ASSESSEES REPLY, THE AO HELD THAT THE BANK RECORDS AS WELL AS STATEMENT O F SHRI NITIN GUPTA, MANAGER (OPERATIONS) OF STANDARD CHARTERED BANK SHOWS THAT A SSESSEE HAS WITHDRAWN RS. 8,90,000/- ON 21.11.2005. THE LETTER DATED 27.10.200 8 OF BANK CANNOT BE GIVEN MORE CREDENCE THAN OATH STATEMENT RECORDED UNDER SE CTION 131 OF THE IT ACT IN VIEW OF THE FACT THAT THE LD. AO HELD THAT THERE WAS A SHORTAGE OF AMOUNT TO THE TUNE OF RS. 5,12,566/- ON 20.11.2005. THE ASSESSEE HAD MADE CASH PAYMENT TO THIS EXTENT TO M/S. JAI HANUMANT OUT OF HIS UNDISCL OSED INCOME. THEREFORE, ADDITION OF RS. 5,12,566.45 IS MADE TO THE TOTAL IN COME OF THE ASSESSEE ON THIS ACCOUNT. AS REGARDS CASH SHORTAGE OF RS. 7,12,516/ - ON 20.02.2006, COPIES OF LEDGER AND CASH BOOK OF M/S. GOODWILL FINCOM PVT. LT D. CANNOT BE GIVEN ANY COGNIZANCE BECAUSE THIS COMPANY IS A GROUP COMPANY OF THE ASSESSEE. ALL THE DIRECTORS OF THE COMPANY ARE CLOSE FAMILY MEMBERS O F THE ASSESSEE VIZ. BHABHI, WIFE, BROTHERS, FATHER ETC. EVEN THE SO CALLED AGRE EMENT ENTERED INTO WITH THIS COMPANY WAS SIGNED BY SMT. KUSUM AGARWAL WHO IS FAMILY MEMBER OF ASSESSEE. IN TURN, THE ASSESSEE WAS IN A POSITION TO ARRANGE T HE AFFAIRS OF THIS COMPANY TO 6 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. SUIT HIS NEED WHICH HE HAD ALSO DONE. WHEN AGREEME NT TO SALE ITSELF HAS BEEN PROPOSED TO BE FABRICATED AND BOGUS, THERE IS NO RE LEVANCE OF ACCOUNTS OF M/S. GOODWILL FINCOM PVT. LTD. THE ASSESSEE HAS BEEN CHAN GING HIS VERSION FIRST REGARDING THE SOURCE OF RS. 8,00,000/- ON 20.02.200 6. PREVIOUSLY THIS AMOUNT WAS SHOWN AS WITHDRAWN FROM THE BANK. WHEN SHOW CAUSE N OTICE DATED 30.06.2008 WAS ISSUED, THE ASSESSEE REALIZES HIS MIS TAKE AND COOKED UP A STORY OF RECEIVING THE ADVANCE AGAINST PROPERTY FROM A FA MILY CONCERN (THOUGH IT IS A COMPANY BUT WORKING AND CONTROL ARE NOT MORE THAN A PROPRIETARY CONCERN). EVEN THIS ADVANCE STATED TO HAVE BEEN RECEIVED ON 2 0.02.2006 WAS REPAIR THE NEXT DELAY ON THE PLEA THAT THE DEAL WAS CANCELLED. IN FACT, THE FUNDS HAD BECOME AVAILABLE ON 21.02.2006 AS A RESULT OF CASH WITHDRAWN FROM THE BANK. THE ASSESSEE WAS NO MORE IN NEED OF CASH. THERE WAS A GAP OF ONLY ONE DAY BETWEEN THE PAYMENT MADE BY THE ASSESSEE AND AVAILAB ILITY OF CASH ON RECORD IN HIS HANDS. THIS GAP HAD BEEN MADE UP THROUGH A COOK ED UP STORY OF OBTAINING ADVANCE AGAINST PROPERTY ON 20.02.2006 AND RETURNIN G BACK THE SAME ON 21.02.2006. THIS COOKED UP STORY HAD BEEN BROKEN DU E TO THE FACT THAT THE STAMP USED FOR PURPOSE OF AGREEMENT IS NOT PROPER A ND HENCE HAD NO EVIDENTIARY VALUE. EVEN AFTER CONFRONTING THE FACT , THE ASSESSEE HAD NOT BEEN ABLE TO FURNISH ANY SATISFACTORY EXPLANATION. IN V IEW OF THE ABOVE DISCUSSION MADE BY THE AO, HE HELD THAT UNDER THE AGREEMENT TO SALE ENTERED INTO ON 20.02.2006 WAS ONLY A MADE UP STORY WHICH CANNOT BE G IVEN ANY COGNIZANCE. 7 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. THE ASSESSEE HAD NOT BEEN ABLE TO FURNISH ANY SATISF ACTORY AND ACCEPTABLE EXPLANATION FOR THE SHORTAGE OF CASH AMOUNT OF RS. 7,72,516.45 CREATED ON 20.02.2006. IT WAS ALSO HELD THAT THE PAYMENT TO TH E EXTENT OF RS. 7,72,516.45 HAD BEEN MADE BY THE ASSESSEE TO M/S. JAI HANUMANT OUT OF HIS UNDISCLOSED INCOME. ACCORDINGLY, THE AO MADE AN ADDITION OF RS . 7,72,516.45 IN THE INCOME OF THE ASSESSEE. THUS TOTAL ADDITION WAS MADE BY THE AO AT RS. 12,85,082.90. 3. BEING AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD. CIT (A) WHO HAD ALLOWED THE ASSESSEES APPEAL PARTIALL Y BY OBSERVING AS UNDER :- 6. THE ARGUMENT OF THE AO IS THAT THERE WAS CASH SH ORTAGE OF RS. 5,12,566/- ON 20.11.2005 AND OF RS. 7,72,516 /- ON 20.2.2006 AND THEREFORE HE TREATED RS. 12,85,082/- AS CASH PAID TO M/S. JAI HANUMANT FROM UNDISCLOSED SOURCES. PERUSAL OF THE SUBMISSION SHOWS THAT THE APPELLANT HAD RECEI VED RS. 8,00,000/- AS ADVANCE ON 20.2.2006 FROM M/S. GOODWIL L FINCOM PVT. LTD, JAIPUR AGAINST AN AGREEMENT TO SEL L A SHOP FOR WHICH NECESSARY PROOFS WERE ALSO SUBMITTED DURING ASSESSMENT PROCEEDINGS BUT WERE NOT CONSIDERED BY TH E AO. THEREFORE THE ADDITION OF RS. 8,00,000/- IS DIRECTED TO BE DELETED, AS ALSO PLEADED ALTERNATIVELY BY THE APPEL LANT, AND THE BALANCE OF RS. 4,85,082/- (RS.12,85,082 RS. 8 ,00,000) IS UPHELD. 4. NOW THE ASSESSEE IS BEFORE US. THE LD. A/R OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAD SUBMITTED ALL THE EVIDENCES CONFIRMING THE AVAILABILITY OF SUFFICIENT 8 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. CASH ON THE SUBJECTED DATE. IT WAS SUBMITTED THAT WI THDRAWAL OF RS. 8,90,000/- WAS MADE ON 20.11.2005 ONLY WHICH BEING A SUNDAY, TRA NSACTION WAS RECORDED BY THE BANK AUTHORITY ON SUBSEQUENT DAY I.E. ON MON DAY AND IN SUPPORT A LETTER DATED 14.7.2008 ISSUED BY THE BANK STATING THAT THE BANK WAS OPERATING AS A 365 DAYS BRANCH FROM 07.02.2003 TO 01.07.2007 AND A LL TRANSACTIONS DONE ON SUNDAYS AND NATIONAL HOLIDAYS WERE BEING POSTED ON T HE NEXT WORKING DAY, WAS FILED. THE AO CONDUCTED ENQUIRY UNDER SECTION 133(6 ) FROM THE BANK AND ALSO RECORDED THE STATEMENT OF SHRI NITIN GUPTA, MANAGER (OPERATIONS), STANDARD CHARTERED BANK ON 10.09.2008 UNDER SECTION 131 OF T HE ACT , AND ON THAT BASIS THE AO CONCLUDED THAT SAID CASH WAS WITHDRAWN IN FACT ON 21.11.2005 ONLY. THE AO WAS ASKED TO SUPPLY THE COPY OF STATEMENT OF SHRI NITIN GUPTA, MANAGER (OPERATIONS) RECORDED ON 10.09.2008 VIDE A/RS REQU EST LETTER DATED 11.12.2008. THE AO HAD NOT PROVIDED THE COPY OF STATEMENT DURING THE ASSESSMENT PROCEEDINGS NOR ALLOWED ANY OPPORTUNITY OF CROSS EXA MINATION. THE COPY OF STATEMENT COULD BE OBTAINED BY THE ASSESSEE ONLY AT THE TIME OF ARGUING APPEAL BEFORE LD. CIT (A). IT IS FURTHER ARGUED THAT ALTHO UGH THIS STATEMENT WAS RECORDED AT THE BACK OF THE ASSESSEE WITHOUT ANY OPP ORTUNITY OF CROSS EXAMINATION, THE AO HAD PURPORTEDLY MIS-READ/MIS-IN TERPRETED AND REPRODUCED ONLY PART THEREOF IN ASSESSMENT ORDER I.E. ANSWER TO QUESTION NOS. 5 TO 7 BUT IGNORED THE OTHER QUESTIONS AND ANSWERS I.E. QUESTIO N NOS. 2 TO 4. THE LD. A/R ALSO DRAWN OUR ATTENTION ON PAGES 38 AND 39 OF THE P APER BOOK AND ARGUED THAT 9 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. SAID STATEMENT SHOULD BE READ IN TOTALITY WHICH CLEA RLY EXPLAINED THE FACTUAL POSITION THAT MODUS OPERANDI ADOPTED BY THE BANK AS REGARDS ITS WORKING AND ALSO AS REGARDS THE RECORDING OF THE TRANSACTIONS. IT HAS BEEN ADMITTED BY SHRI NITIN GUPTA, MANAGER (OPERATIONS) IN ANSWER TO QUEST ION NO. 2 THAT BANK WAS OPERATING 365 DAYS BRANCH TILL 2007 (UP TO JUNE, 20 07) AND IN ANSWER TO QUESTION NO. 3 HE ADMITTED THAT ALL TRANSACTIONS ON SUNDAYS AND HOLIDAYS COMES BY VALUE DATED NEXT WORKING DAY. TO BE CLEAR IF ANY TRANSACTI ON IS EXECUTED ON SUNDAY IT WOULD REFLECT IN PER RECORDS AND CUSTOMERS STATEMENT ON MONDAY OR NEXT WORKING DAY. IN ANSWER TO QUESTION NO. 4, SHRI NITIN GUPTA REPLIED THAT THERE IS NO RECORD FOR WITHDRAWING THE CASH ON 20.11.2005 BUT HE HAD BROUGHT WITH HIM A COPY OF STATEMENT OF SHRI DINESH AGARWAL AND CERT IFIED COPY OF CASH WITHDRAWAL CHEQUE OF RS. 8,90,000/- WHICH WAS REFLECTING IN THEI R RECORD ON 21.11.2005. THUS THE MANAGER (OPERATIONS) CATEGORICALLY ANSWERED ALL THE TRANSACTIONS TOOK PLACE ON SUNDAYS AND HOLIDAYS BUT WERE BEING RECORDE D AND BEING REFLECTED IN THE BANKS RECORD ON NEXT MONDAY OR NEXT WORKING DAY . THEREFORE, IT WAS ARGUED THAT IT IS A SETTLED LAW OF EVIDENCE THAT STATEMENT IS TO BE READ IN ITS ENTIRETY AND NOT IN PIECE MEAL WHICH SUITS TO THE REVENUE AUTHOR ITIES OR GOES AGAINST THE ASSESSEE AS HELD IN CASE OF HISSARIA BROTHERS VS. A CIT, 22 TAX WORLD 684 (JD). ANY STATEMENT RECORDED AT THE BACK OF THE ASSESSEE OR ANY EVIDENCE COLLECTED BY THE REVENUE AUTHORITIES SHOULD BE ALLOWED TO REBUT B Y THE ASSESSEE AS HELD IN CASE OF VIMAL CHAND GOLECHA VS. ITO & OTHERS, 134 I TR 119 (RAJ.). THE LD. A/R 10 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. FURTHER HAS DRAWN OUR ATTENTION ON PAGES 34 TO 37 O F THE PAPER BOOK AND ARGUED THAT BANK ITSELF CERTIFIED IN ITS LETTER DATED 17 TH OCTOBER, 2008 WHICH WAS SUBMITTED BEFORE THE AO VIDE HIS REPLY DATED 11.12. 2008 TO PROVE THAT CASH HAD BEEN WITHDRAWN ON 20.11.2005. HOWEVER, SINCE NOVEMBER 20, 2005 WAS A SUNDAY, THE SAID AMOUNT HAD BEEN POSTED IN THE ACCO UNT ON 21 ST NOVEMBER, 2005. THEREFORE, ADDITION MADE BY THE AO IS DESERV ES TO BE DELETED. THE LD. A/R FURTHER ARGUED THAT THERE WAS NO CASH SHORTAGE. THE L D. CIT (A) MUST HAVE DELETED THE ADDITION ON ITS MERIT ITSELF ONCE SHE N EVER DISAGREED WITH ASSESSEES CONTENTIONS AND THE EVIDENCES PRODUCED BEFORE HER WE RE NEITHER DOUBTED NOR REBUTTED. ALTHOUGH BY DOING SO, SHE HAS INDIRECTLY CONFIRMED THE ADDITION OF RS. 5,12,566/- WITHOUT ASSIGNING ANY REASON IN HER ORDER . THERE WAS NO JUSTIFICATION TO CONFIRM THE ADDITION OF RS. 5,12,566/- IN RESPEC T TO THE PAYMENT OF RS. 8,00,000/- MADE TO M/S. JAI HANUMANT ON 20.11.2005. IT IS FURTHER ARGUED THAT PAYMENT MADE TO M/S. JAI HANUMANT OF RS. 8,00,000/- ON 20.02.2006 ITSELF FROM M/S. GOODWILL FINCOM PVT. LTD. AGAINST AN AGREEMENT TO SALE HIS SHOP SITUATED AT B-22, TRANSPORT NAGAR, JAIPUR FOR RS. 21,00,000/- EN TERED ON 20.02.2006. THE AGREEMENT WAS SIGNED BY THE DIRECTOR OF THE BUYER CO MPANY WHICH IS A PRIVATE LIMITED COMPANY. IT WAS A VALIDLY ENTERED AGREEMENT BETWEEN THE PARTIES DULY NOTARIZED AND THEREFORE THE LEGAL IMPLICATION FLOWIN G THEREFROM CANNOT BE AVOIDED. BASED ON THE AGREEMENT, ANY FAILURE ON TH E PART OF THE BUYER WOULD HAVE PROVIDED A LEGAL REMEDY TO THE SELLER ASSESSEE . THERE IS NO CONTRARY 11 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. EVIDENCE BROUGHT ON RECORD BY THE LOWER AUTHORITIES. THE AO ONLY REJECTED THE SUBMISSION THAT THIS AGREEMENT WAS WITHIN THE GROUP C OMPANY AND MANAGED FAMILY AFFAIRS. BUT COMPANY HAS A LEGAL ENTITY UNDE R THE COMPANY LAW AS WELL AS INCOME TAX LAW. THEREFORE, THERE IS NO REASON TO DRA W ADVERSE INFERENCE ON THE BASIS OF EVIDENCE SUBMITTED BEFORE THE LOWER AUTHORI TIES. THE ASSESSEE HAS FURNISHED THE EXPLANATION OF RS. 8,00,000/- ON 20.0 2.2006 BEFORE THE LOWER AUTHORITIES. ACCORDINGLY ADDITION CONFIRMED BY THE LD. CIT (A) DESERVES TO BE DELETED. ALTERNATIVELY IT WAS ARGUED THAT IN ANY CASE EVEN IF IT IS HELD THAT THE ASSESSEE HAS FAILED TO PROVE THE AVAILABILITY OF SU FFICIENT CASH OR THE AO WAS JUSTIFIED IN MAKING ADDITION OF CASH SHORTAGE OF RS . 5,12,516/- ON 20.11.2005 AND OF RS. 7,12,516/- ON 20.02.2006, THE EARLIER DATE A DDITION MAY KINDLY BE TELESCOPED INTO THE LATER DATE ADDITION AND AT THE WORST IT IS ONLY THE BALANCE OF RS. 1,99,949/- MAY BE CONFIRMED. 5. AT THE OUTSET, THE LD. D/R SUPPORTED THE ORDER O F LD. CIT (A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE BANK AUTHORITIES HAVE CERTIFIED THAT ASSESSEE HA S WITHDRAWN RS. 8,90,000/- ON 20.11.2005 WHICH WAS ENTERED IN THE BANK REGISTER ON 21.11.2005. THE STANDARD CHARTERED BANK ON THESE DAYS WERE WORKING FO R 365 DAYS. IT IS NORMAL PRACTICE OF BANK THAT ANY TRANSACTION MADE BY 365 D AYS WORKING BRANCH ON HOLIDAYS IS REPORTED ON MONDAY IN CASE TRANSACTION IS MADE ON SUNDAY OR ON 12 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. SUBSEQUENT WORKING DAY. THIS ASPECT WAS ALSO ADMITTE D BY SHRI NITIN GUPTA, MANAGER (OPERATIONS) IN HIS STATEMENT DATED 10.09.2 008 BEFORE THE AO. THE AO USED THE STATEMENT RECORDED UNDER SECTION 131 OF SH RI NITIN GUPTA IN PIECE MEAL NOT IN ITS ENTIRETY AND ALSO HAS NOT GIVEN COPY TO THE ASSESSEE WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS ANY EVIDENCE C OLLECTED BY THE REVENUE THAT IS TO BE CONFRONTED WITH THE ASSESSEE BEFORE ITS USE. TH E ASSESSEE ASKED TO SUPPLY COPY OF THE STATEMENT WHICH WAS SUPPLIED BY THE AO AT THE APPELLATE STAGE. FURTHER ASSESSEE ALSO FILED THE EVIDENCES OF CASH P AYMENT TO M/S. JAI HANUMANT ON 20.02.2006 THAT ON SAME DAY ASSESSEE RECEIVED RS . 8,00,000/- FROM M/S. GOODWILL FINCOM PVT. LTD. AGAINST AN AGREEMENT TO SA LE HIS SHOP SITUATED AT B-22, TRANSPORT NAGAR, JAIPUR FOR RS. 21 LACS ENTERED ON 2 0.02.2006. THESE EVIDENCES WERE PRODUCED BEFORE THE AO BUT LD. AO DOUBTED THESE EVIDENCES WITHOUT ANY ADVERSE MATERIAL BROUGHT ON RECORD. THE COMPANY IS A LEGAL ENTITY UNDER THE LAW. THE EVIDENCES FURNISHED BEFORE THE AO WHICH HAD NOT BEEN APPRECIATED PROPERLY. THE LD. CIT (A) ALSO PASSED A CRYPTIC ORDER. NO SPECI FIC FINDING HAS BEEN GIVEN BY HER IN HER ORDER DATED 31.01.2013. SHE SIMPLY REDUC ED RS. 8,00,000/- FROM RS. 12,85,082/- AND CONFIRMED THE ADDITION OF RS. 4,85, 082/-, BUT NO FINDING REGARDING THE CASH RECEIVED BY THE ASSESSEE FROM TH E STANDARD CHARTERED BANK ON 20.11.2005 HAS BEEN GIVEN BY HER. THEREFORE, WE R EVERSE THE ORDER OF LD. CIT (A) AND ALLOW THE ASSESSEES APPEAL. 13 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR. 7. GROUND NO. 3 RELATES TO INTEREST UNDER SECTION 2 34B & 234D OF THE IT ACT IS CONSEQUENTIAL IN NATURE. THE SAME IS DECIDED ACCORDI NGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/8/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11 TH AUGUST, 2015 *DAS VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI DINESH AGARWAL, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 4(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA 327/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR 14 ITA NO. 327/JP/2013 A.Y. 2006-07. SHRI DINESH AGARWAL, JAIPUR.