Sh. Dimple Anand, New Delhi V. ACIT, New Delhi

ITA 3296/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5059 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 03-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR MANINDER KAUR
• Keywords: Corroborative evidences
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. SANJAY GARG, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3296/DEL/2016 (ASSESSMENT YEAR : 2011-12) SHRI DIMPLE ANAND 261, OKHLA INDUSTRIAL ESTATE, PHASE III NEW DELHI 110020 PAN : AAKPA 1211 H VS. ACIT, CIRCLE 24(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI A. K. SRIVASTAVA, C.A. SHRI SURESH KUMAR GUPTA, ADV. REVENUE BY DR. MANINDER KAUR, SR. D.R. DATE OF HEARING: 2 1 .0 9 .2021 DATE OF PRONOUNCEMENT: 27 .0 9 .2021 ORDER PER ANIL CHATURVEDI, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.03.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-10, NEW DELHI RELATING TO ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED FROM THE MATERIAL ON RECORDS ARE AS UNDER : 2 3. ASSESSEE IS AN INDIVIDUAL WHO IS STATED TO BE ENGAGED IN THE BUSINESS OF TRADING IN CLOTH/FABRICS FOR TENTS ETC. ASSESSEE ELECTRONICALLY FILED HIS RETURN OF INCOME FOR A.Y. 2011-12 ON 31.02.2012 DECLARING TOTAL INCOME AT RS.35,54,050/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 28.03.2014 AND THE TOTAL INCOME WAS DETERMINED AT RS.61,54,330/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO VIDE ORDER DATED 31.03.2016 IN APPEAL NO.130/14-15 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 10,70,000/-, BEING CASH DEPOSIT IN THE SAVING BANK ACCOUNT OF ASSESSEE AND HIS WIFE WHICH WAS OUT OF EARLIER CASH WITHDRAWALS FROM THE ASSESSED BANK ACCOUNT AS SUBSTANTIATED BY THE ASSESSEE', BY WRONGLY HOLDING AS UNDER: THAT THERE BEING GAP BETWEEN CASH WITHDRAWALS & DEPOSITS OF APPROX ONE YEAR, HENCE CASH DEPOSIT TO BE TREATED AS INCOME U/S 68 OF THE ACT. BY HOLDING THAT SUBMISSION AND EVIDENCES SUBMITTED BEFORE CIT(A), AS AFTERTHOUGHT, SINCE NO SUCH EXPLANATION / EVIDENCE WAS SUBMITTED TO A.O. (ALTHOUGH ALL SUCH EXPLANATIONS / EVIDENCES WERE SUBMITTED BEFORE A.O. EXCEPT ASSESSEES DULY SWORN AFFIDAVIT AS PER APPELLATE TRIBUNAL RULE 10). BY RELYING UPON THE WRONG DATE (S) OF CASH DEPOSITS, WHICH MOST OF DEPOSIT DATE(S) DO NOT EVEN FALL IN THE YEAR UNDER ASSESSMENT. BY BASING HIS OPINION ON SUSPICION & SURMISE AGAINST THE CASE FACTS ON RECORD. 3 2. WHETHER THE LD CIT (A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 1,71,220/- UNDER THE HEAD PURCHASES INSTEAD OF GROSS PROFIT ON THE CORRESPONDING SALES, BASED ON THE FINDING THAT THE PURCHASE VOUCHERS IN THE SAID AMOUNT WERE NOT SUBMITTED IN THE CASE PROCEEDINGS, WHEREAS AS A MATTER OF PRACTICE, ONLY PART OF THE SUPPORTING EVIDENCES ARE SUBMITTED FOR TEST CHECK BASIS IN THE CASE PROCEEDINGS AND NOT THE ENTIRE RECORDS. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, DELETE OR ALTER ANY ONE OR MORE OF THE AFORESAID GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4. GROUND NO.1 IS WITH RESPECT TO THE ADDITION OF RS.10,70,000/- BEING CASH DEPOSIT IN THE SAVING BANK ACCOUNT. 5. AO NOTED THAT ON THE BASIS OF AIR INFORMATION, IT WAS NOTICED THAT ASSESSEE HAD MADE CASH DEPOSIT AGGREGATING TO RS.10,70,000/- IN THE BANK ACCOUNT MAINTAINED WITH BANK OF INDIA. ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS AND FURNISH THE CASH FLOW STATEMENT. ASSESSEE INTER ALIA SUBMITTED THAT THE BANK ACCOUNT IS A JOINT ACCOUNT MAINTAINED WITH HIS WIFE AND THAT THE DEPOSITS IN THE BANK ACCOUNT WERE OUT OF CASH WITHDRAWALS MADE EARLIER FROM THE BANK ACCOUNT. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO AO. HE ALSO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE THAT THE CASH DEPOSITS WERE OUT OF CASH WITHDRAWALS MADE EARLIER DUE TO THE GAP BETWEEN THE TWO DATES OF BEING ALMOST ONE YEAR AND TWO MONTHS. HE ACCORDINGLY TREATED THE ENTIRE CASH DEPOSIT TO BE OUT OF UNDISCLOSED SOURCE AND MADE ADDITION OF RS.10,70,000/-. 4 6. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). CIT(A) UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND CIT(A) AND THEREAFTER POINTED TO THE TABLE OF THE CASH DEPOSITS TABULATED BY THE AO UNDER PARA 5 OF THE ORDER. FROM THE AFORESAID TABLE, HE POINTED OUT THAT AO HAD MADE ADDITION OF THE AGGREGATE CASH DEPOSITS OF RS.10,70,000/-. FROM THE TABLE, HE POINTED OUT THAT OUT OF THE VARIOUS DEPOSITS, THE CASH DEPOSIT OF RS.2,00,000/- MADE ON 29.12.2010 PERTAINED TO THE YEAR UNDER CONSIDERATION AND THE OTHER CASH DEPOSITS AGGREGATING TO RS.8.70 LAKHS WERE MADE IN MAY AND JUNE 2009 DID NOT FALL IN THE PERIOD UNDER CONSIDERATION. HE THEREFORE FIRSTLY SUBMITTED THAT SINCE THE AGGREGATE CASH DEPOSITS OF RS.8,70,000/- DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION, NO ADDITION COULD HAVE BEEN MADE OF THE AFORESAID AMOUNT. THEREAFTER, HE POINTED TO THE DETAILS OF CASH WITHDRAWAL AND CASH DEPOSITS AS NOTED BY THE AO AND FROM THOSE DETAILS HE SUBMITTED THAT THE DEPOSITS WERE OUT OF THE CASH WITHDRAWALS MADE EARLIER. HE FURTHER SUBMITTED THAT WITHOUT THERE BEING ANY EVIDENCE OF THE CASH WITHDRAWALS MADE EARLIER BEING DEPLOYED BY THE ASSESSEE EITHER FOR ACQUISITION OF SOME ASSETS OR HAVE BEEN SPENT, THE SUBMISSION OF ASSESSEE EXPLAINING THE SOURCE CANNOT BE DISCARDED AND THEREFORE NO ADDITION OF THE CASH DEPOSITS COULD HAVE BEEN MADE BY THE AO. HE THEREFORE SUBMITTED THAT ENTIRE ADDITIONS MADE BY AO BE DELETED. 5 8. LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO THE CASH DEPOSITS OF RS.10,70,000/- TREATED AS UNDISCLOSED INCOME. FROM THE TABLE OF CASH DEPOSITS WHICH AGGREGATED TO RS.10,70,000/- OF WHICH THE ADDITION HAS BEEN MADE BY AO, IT IS SEEN THAT THE CASH DEPOSITS AGGREGATING TO RS.8,70,000/- WAS MADE IN MAY/JUNE 2009 AND THEREFORE DID NOT FALL IN THE YEAR ENDING 31 ST MARCH 2011 CORRESPONDING TO ASSESSMENT YEAR 2011-12 UNDER CONSIDERATION. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT NO ADDITION COULD HAVE BEEN MADE OF RS.8,70,000/-DURING THE YEAR. WE THEREFORE DIRECT ITS DELETION. THEREAFTER, WE ARE LEFT ONLY TO DECIDE WITH RESPECT TO THE DEPOSIT OF RS.2,00,000/- MADE BY THE ASSESSEE ON 29.11.2010. WITH RESPECT TO THE AFORESAID CASH DEPOSITS, IT IS AN ASSESSEES CONTENTION THAT THE AMOUNT HAS BEEN DEPOSITED OUT OF THE CASH WITHDRAWN EARLIER. THE CASH WITHDRAWALS MADE EARLIER BY THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE BUT HOWEVER THE CONTENTION OF THE ASSESSEE THAT THE CASH DEPOSITS ARE OUT OF SUCH CASH WITHDRAWALS WAS NOT ACCEPTED BY THE AO AS THERE WAS A HUGE DIFFERENCE BETWEEN THE DATES OF CASH WITHDRAWAL AND CASH DEPOSITS. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL TO DEMONSTRATE THAT THE CASH WITHDRAWAL MADE BY THE ASSESSEE WAS NOT AVAILABLE WITH THE ASSESSEE AS IT HAS BEEN SPENT BY THE ASSESSEE OR HAS BEEN INVESTED AND THEREFORE WAS NOT AVAILABLE FOR DEPOSITS. IN SUCH A SITUATION, WITHOUT THEIR BEING EVIDENCE TO THE 6 CONTRARY, WE ARE OF THE VIEW THAT THE EXPLANATION OF THE ASSESSEE OF THE CASH DEPOSITS BEING OUT OF THE WITHDRAWALS MADE EARLIER CANNOT BE SIMPLY BRUSHED ASIDE. WE THEREFORE, DIRECT THE DELETION OF CASH DEPOSITS OF RS.2 LAKH. THUS WE DIRECT THE DELETION OF ENTIRE AMOUNT OF RS.10,70,000/- MADE BY THE AO. THUS THE GROUND OF THE ASSESSEE IS ALLOWED. 10. 2 ND GROUND IS WITH RESPECT TO THE DISALLOWANCE OF RS.1,71,220/- MADE UNDER THE HEAD OF PURCHASES. 11. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED TO FILE THE DETAILS OF PARTY-WISE PURCHASES. ASSESSEE FILED THE DETAILS ALONG WITH THE BILLS WHICH ARE TABULATED BY THE AO IN PARA 6.2 OF THE ORDER. THE AMOUNT AGGREGATED TO RS. 4,80,446/-. AO NOTED THAT ASSESSEE HAD NOT SUBMITTED ANY BILL OF RS.1,71,220/- IN RESPECT TO THE PURCHASES MADE FROM AGGARWAL CANVAS COMPANY. WITH RESPECT TO THE OTHER PURCHASES, AO NOTED THAT THE BILLS / VOUCHERS ARE COMPUTER GENERATED AND THEREFORE THE AUTHENTICITY AND GENUINENESS OF THOSE BILLS WAS HARD TO ESTABLISH. HE ACCORDINGLY CONCLUDED THAT THE BILLS WERE ARRANGED TO COVER UP THE EXPENSES. HE THEREFORE DISALLOWED THE ENTIRE PURCHASES OF RS.4,80,446/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY NOTING THAT THE AO DID NOT DRAW ANY ADVERSE INFERENCE AS FAR AS CORRESPONDING SALES WERE CONCERNED AND NO ADDITION COULD BE MADE WHEN THE CORRESPONDING SALES WERE ACCEPTED. HOWEVER, WITH RESPECT TO PURCHASE FROM AGGARWAL CANVAS COMPANY OF RS.1,71,220/-, HE 7 NOTED THAT SINCE ASSESSEE COULD NOT PRODUCE THE RELEVANT BILLS, HE UPHELD THE ADDITION TO THE EXTENT OF RS.1,71,220/-. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 12. BEFORE US, LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND CIT(A) AND FURTHER SUBMITTED THAT WHEN THE SALES MADE BY THE ASSESSEE HAVE BEEN ACCEPTED THERE COULD BE NO REASON TO TREAT THE PURCHASES TO BE BOGUS. HE IN THE ALTERNATE SUBMITTED THAT AT THE MOST THE GROSS PROFIT ON THE CORRESPONDING SALES COULD BE ADDED TO THE INCOME. 13. LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO ADDITION OF RS.1,71,220/- OUT OF THE TOTAL PURCHASES. BEFORE US, IT IS THE CONTENTION OF THE LEARNED AR THAT OUT OF THE IMPUGNED PURCHASE MADE FROM AGGARWAL CANVAS CO., THE SALES HAVE BEEN MADE AND THE SALES HAVE BEEN ACCEPTED BY THE REVENUE AND IN SUCH A SITUATION, NO DISALLOWANCE OF PURCHASES IS CALLED FOR. THE AFORESAID CONTENTION OF THE LEARNED AR HAS NOT BEEN CONTROVERTED BY THE REVENUE. BUT AT THE SAME TIME, IT IS ALSO A FACT THAT ASSESSEE COULD NOT PRODUCE THE COPY OF THE PURCHASE INVOICE OF AGGARWAL CANVAS CO. BEFORE THE CIT(A) NOR HAS IT BEEN PRODUCED BEFORE US. IT IS ALSO A FACT THAT ALTERNATIVELY IT IS THE CONTENTION OF THE LEARNED AR THAT THE GROSS PROFIT OF THE SALES MADE FROM THE IMPUGNED PURCHASES COULD BE ADDED TO THE 8 INCOME. BEFORE US, ASSESSEE HAS NOT PLACED ANY RECORD TO POINT OUT THE GROSS PROFIT EARNED BY THE ASSESSEE DURING THE YEAR. CONSIDERING THE TOTALITY OF THE FACTS AND ALSO THE FACT THAT THE APPEAL IS OF A.Y. 2011-12, WE ARE OF THE VIEW THAT ENDS OF JUSTICE SHALL BE MET IN THE PRESENT CASE IF THE DISALLOWANCE IS RESTRICTED TO RS.15,000/-. WE THEREFORE DIRECT THE DISALLOWANCE BE MADE OF RS.15,000/- AND DIRECT THE DELETION OF THE BALANCE DISALLOWANCE OF RS.1,56,220/-. THUS THE GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.09.2021 SD/- SD/- (SANJAY GARG) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:- 27.09.2021 PY* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI