DCIT, New Delhi V. Sh. Manish Kumar Aggarwal, New Delhi

ITA 3301/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4787 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 27-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 28-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K P GARG
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .3301/DEL/2012 3301/DEL/2012 3301/DEL/2012 3301/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -36(1), 36(1), 36(1), 36(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, 50, FIRST FLOOR, 50, FIRST FLOOR, 50, FIRST FLOOR, 50, FIRST FLOOR, NEW NEW NEW NEW RAJDHANI ENCLAVE, RAJDHANI ENCLAVE, RAJDHANI ENCLAVE, RAJDHANI ENCLAVE, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : PAN : PAN : PAN : AADPA2376A. AADPA2376A. AADPA2376A. AADPA2376A. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO.3475/DEL/2012 .3475/DEL/2012 .3475/DEL/2012 .3475/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2008 2008 2008 2008- -- -09 0909 09 SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, 50, FIRST FLOOR, 50, FIRST FLOOR, 50, FIRST FLOOR, 50, FIRST FLOOR, NEW RAJDHAN NEW RAJDHAN NEW RAJDHAN NEW RAJDHANI ENCLAVE, I ENCLAVE, I ENCLAVE, I ENCLAVE, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : AADPA2376A. PAN : AADPA2376A. PAN : AADPA2376A. PAN : AADPA2376A. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -34(1), 34(1), 34(1), 34(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI KEYUR PATEL, SR.DR. ASSESSEE BY : SHRI K.P. GARG, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF LEARNED CIT(A)-XXVII, NEW DELHI DATED 16 TH MARCH, 2012 FOR THE AY 2008-09. 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APPEA L READS AS UNDER:- ITA-3301 & 3475/D/2012 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT (A) HAS ERRED IN RESTRICTING THE ADDITION OF RS.8,45,000/- U/S 68 OF THE INCOME TAX ACT ON ACCOUNT OF UNEXPLAINED CAS H CREDITS IN THE ASSESSEES BANK ACCOUNT AS AGAINST ADDITION OF RS.26,30,000/- MADE BY THE A.O. DESPITE THE ASSESSEE OFFERING NO EXPLANATION REGARDING THE PURPOSE FOR CA SH WITHDRAWALS AND THUS NOT ESTABLISHING A CLEAR NEXUS BETWEEN CASH WITHDRAWALS AND SUBSEQUENT DEPOSITS IN BANK. 3. THE GROUNDS RAISED BY THE ASSESSEE IN HIS APPEAL READ A S UNDER:- 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS.8,45,000/- ON AC COUNT OF UNEXPLAINED DEPOSIT OF CASH IN BANK ON 3 RD AND 4 TH APRIL, 2007 IGNORING THE OPENING CASH IN HAND OF RS.9,13,08 0/-. 2. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE IMPUGNED ORDER OF THE LEARNED ASSESSING OFFICER WHICH IS CONTRARY TO LAW, EQUITY AND JUSTICE AND FACTS AND MATERIAL ON RECORD, DEVOID OF JURISDICTION, ARBI TRARY, BASED ON CONJECTURES AND SURMISES, PASSED WITHOUT APPLICATION OF MIND, WITHOUT GRANTING PROPER OPPORT UNITY TO DEFEND. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIV IDUAL WHO DERIVES INCOME FROM CONSULTANCY. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF ` 18,24,060/-. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER NOTICED THAT THE ASSESSEE MADE CASH DEPOSIT OF ` 26,30,000/- IN THE SAVINGS BANK ACCOUNT WITH AXIS BANK LIMITED, MAYUR VIH AR, NEW DELHI. HE ASKED THE ASSESSEE TO EXPLAIN THE SAME. THE ASSESSEE EXP LAINED THE DEPOSIT TO BE OUT OF OPENING CASH IN HAND AS WELL AS OUT OF CASH WITHDRAWAL FROM THE BANK. IT WAS POINTED OUT THAT T HOUGH THERE WAS CASH DEPOSIT DURING THE YEAR UNDER CONSIDERATION AMOUN TING TO ` 26,30,000/-, BUT THERE WAS CASH WITHDRAWAL OF ` 44,39,000/-. THE DATE- WISE DEPOSIT AND WITHDRAWAL FURNISHED BY THE ASSESSEE IS AN NEXED AS ANNEXURE A TO THE ASSESSMENT ORDER. HOWEVER, THE ASSESSI NG OFFICER ITA-3301 & 3475/D/2012 3 DID NOT ACCEPT THE ASSESSEES EXPLANATION ON THE GROUND THAT THE SOURCE OF CASH DEPOSIT AND THE USE OF CASH WITHDRAWALS AR E ENTIRELY DIFFERENT AND THE ASSESSEE IS NOT ABLE TO EXPLAIN EXACT LY THE NATURE AND SOURCE OF THESE DEPOSITS. ACCORDINGLY, HE MADE THE AD DITION OF ` 26,30,000/- AS UNEXPLAINED CREDIT UNDER SECTION 68 O F THE INCOME-TAX ACT, 1961. ON APPEAL, LEARNED CIT(A) NOTICED THAT THERE WAS CASH DEPOSIT IN THE BANK AMOUNTING TO ` 8,45,000/- ON 3 RD APRIL, 2007 AND 4 TH APRIL, 2007. HE WAS OF THE OPINION THAT THE WITHDRA WAL MADE BY THE ASSESSEE FROM THE BANK ACCOUNT WAS AFTER THESE DATES. HE, THEREFORE, TOOK THE VIEW THAT THERE WAS NO EXPLANATION FOR THE CASH DEPOSITS AMOUNTING TO ` 8,45,000/- ON 3 RD APRIL, 2007 & 4 TH APRIL, 2007. HE DID NOT ACCEPT THE ASSESSEES EXPLANATION OF OPENING BALAN CE OF CASH IN HAND AMOUNTING TO ` 9,13,080/- ON THE GROUND THAT THE BALANCE SHEET OF AY 2007-08 WAS NOT FILED ALONGWITH THE RETURN OF INC OME. BOTH THE PARTIES, AGGRIEVED WITH THE ORDER OF THE LEARNED CIT (A), ARE IN APPEAL BEFORE US. THE REVENUE IS AGGRIEVED WITH THE RELIEF ALLOWED BY THE LEARNED CIT(A) WHILE THE ASSESSEE IS AGGRIEVED WITH THE ADDITION OF ` 8,45,000/- SUSTAINED BY THE LEARNED CIT(A). 5. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE SIDES AND PE RUSED THE MATERIAL PLACED BEFORE US. IT IS SUBMITTED BY TH E LEARNED COUNSEL THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT AND NO DEFECT THEREIN HAS BEEN FOUND BY THE ASSESSING OFFICER. THAT THE ASSESSEE HAS FILED THE RETURN BY ELECTRONIC MODE (I.E. E -FILING OF RETURN). THAT IN THE E-FILING OF THE RETURN, THE ASSESSEE CAN F URNISH THE DETAILS AS PRESCRIBED. THE ASSESSEE CANNOT SUBMIT EITHER ANY ADDITI ONAL INFORMATION OR ENCLOSE ANY PAPER SUO MOTU . THAT THERE IS NO COLUMN IN SUCH RETURN WITH REGARD TO DISCLOSING THE ASSETS INCLUDIN G THE CASH IN HAND. THEREFORE, THE BALANCE SHEET IS NOT BEING FIL ED BY THE ASSESSEE YEAR AFTER YEAR SINCE THE RETURNS ARE BEING FURNISHED THROUGH ELECTRONIC MODE. HE HAS ENCLOSED THE COPY OF THE BALANCE SHEET I N THE PAPER ITA-3301 & 3475/D/2012 4 BOOK FOR AY 2007-08 AS WELL AS 2008-09 AND HAS POINTE D OUT THAT THE CASH BALANCE AS ON 1 ST APRIL, 2007 WAS ` 9,13,080/- AND AS ON 31 ST MARCH, 2008, IT WAS ` 12,50,983/-. HE HAS ALSO GIVEN THE DATE-WISE POSITION OF CASH BALANCE WHICH WAS ALSO ENCLOSED BY THE ASSESSING OFFICER AS ANNEXURE TO THE ASSESSMENT ORDER. FROM THESE DATE-WISE DETAILS OF CASH ALSO, IT IS APPARENT THAT THE CASH IN HA ND AS ON 1 ST APRIL, 2007 WAS ` 9,13,080/- AND AS ON 31 ST MARCH, 2008, IT WAS ` 12,50,983/-. HE, THEREFORE, SUBMITTED THAT THE ADDITION SUSTAINED B Y THE LEARNED CIT(A) AT ` 8,45,000/- SHOULD BE DELETED. 6. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE ASSESSING OFFICER AND STATED THAT THE ASSESSEE MADE THE DEP OSIT OF ` 26,30,000/- FOR WHICH SPECIFIC SOURCE HAS NOT BEEN EXP LAINED. THAT THE AMOUNT WITHDRAWN BY THE ASSESSEE MUST HAVE BEEN SPENT BY THE ASSESSEE FOR HOUSEHOLD OR OTHER EXPENDITURE. HE, THEREF ORE, SUBMITTED THAT THE ORDER OF THE LEARNED CIT(A) SHOULD BE REVER SED AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORED. 7. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AN D PERUSING THE MATERIAL PLACED BEFORE US, WE FIND THAT THE ASSESSEE HAS FURNISHED THE DATE-WISE CASH BALANCE AND EACH AND EVERY DEPOSIT IN THE BANK ACCOUNT IS SHOWN TO BE OUT OF THE CASH BALANCE WITH T HE ASSESSEE. THE OPENING CASH BALANCE AS PER THE CASH ACCOUNT IS ` 9,13,080/- AND THE CLOSING CASH BALANCE OF THE YEAR IS ` 12,50,983/-. THE SAME IS DULY REFLECTED IN THE BALANCE SHEET ENDED ON 31 ST MARCH, 2007 AND 31 ST MARCH, 2008 RESPECTIVELY. WHEN IN THE ELECTRONIC FI LING OF THE RETURN THERE IS NO PROVISION FOR FILING OF THE BALANCE SHEET, THEN NON-FURNISHING OF THE BALANCE SHEET CANNOT LEAD TO THE PRESUMPTION T HAT THERE WAS NO CASH IN HAND WITH THE ASSESSEE. THE ASSESSEE IS A PROFESSIONA L WHOSE RETURNED INCOME IS MORE THAN ` 18 LAKHS. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE ASSESSEES CLAIM THAT HE HAS AN O PENING CASH ITA-3301 & 3475/D/2012 5 BALANCE OF ` 9,13,080/- CANNOT BE DISPUTED. THE ABOVE OPENING CA SH IN HAND IS SUFFICIENT TO EXPLAIN THE DEPOSIT IN THE BANK ACCOUNT ON 3 RD AND 4 TH APRIL, 2007. THEREAFTER, ADMITTEDLY, WITHDRAWAL F ROM THE BANK IS MUCH MORE THAN THE CASH DEPOSITS. IN FACT, THE TOTAL WITHDRAWAL FROM THE BANK AS PER ANNEXURE-1 OF THE ASSESSMENT ORDER IS ` 44,39,000/- AS AGAINST THE TOTAL DEPOSIT IN THE BANK OF ` 26,30,000/-. THE INFERENCE OF THE ASSESSING OFFICER THAT THE AMOUNT WITHDRAWN BY THE ASSESSEE FROM THE BANK HAS BEEN UTILIZED FOR HOUSEHOLD EXPENDITURE OR OTHER EXPENSES IS WITHOUT ANY BASIS. THE TOTAL WITHDRAWAL BY THE ASSESSEE IS MORE THAN ` 44 LAKHS AND IN THE ABSENCE OF ANY MATERIAL TO PRESUME THAT SUCH HUGE CASH WITHDRAWAL HAS BEEN SPENT BY THE ASSESSEE WOULD BE INCORRECT. SOME OF THE WITHDRAWALS ARE OF HUGE A MOUNT, SAY, ON 4 TH APRIL, 2007, THE ASSESSEE WITHDREW ` 7,00,000/-, ON 29 TH JUNE, 2007, THE ASSESSEE WITHDREW IN CASH ` 10,50,000/- ( ` 4,90,000 + ` 5,60,000). THAT TO PRESUME SUCH HUGE WITHDRAWAL WAS SPENT BY THE ASSESSEE IN THE ABSENCE OF ANY EVIDENCE OF ITS UTILIZATION WOULD BE A WRONG PRESUMPTION. IN VIEW OF THE ABOVE, WE ARE OF THE OPI NION THAT THE ENTIRE CASH DEPOSIT IN THE BANK IS DULY EXPLAINED BY THE ASSESSE E. WE, THEREFORE, DELETE THE ADDITION OF ` 8,45,000/- SUSTAINED BY THE LEARNED CIT(A). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED A ND THE APPEAL OF THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2013. SD/- SD/- ( (( (A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 13.12.2013 VK. ITA-3301 & 3475/D/2012 6 COPY FORWARDED TO: - 1. REVENUE : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -36(1), NEW DELHI. 36(1), NEW DELHI. 36(1), NEW DELHI. 36(1), NEW DELHI. 2. ASSESSEE : SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, SHRI MANISH KUMAR AGGARWAL, 50, FIRST 50, FIRST 50, FIRST 50, FIRST FLOOR, FLOOR, FLOOR, FLOOR, NEW RAJDHANI ENCLAVE, DELHI NEW RAJDHANI ENCLAVE, DELHI NEW RAJDHANI ENCLAVE, DELHI NEW RAJDHANI ENCLAVE, DELHI 110 092. 110 092. 110 092. 110 092. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR