The Dy.Commissioner of Income-tax, Amritsar. V. M/s SKA Builders, Amritsar.

ITA 334/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7805 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P N ARORA
• Keywords: Tax effect
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER I.T.A NO. 352/(ASR)/2015 ASSESSMENT YEAR: 2010-11 PAN: ABCFS4466K M/S. SKA BUILDERS 57-PINK PLAZA, NEAR HALL GATE, AMRITSAR. VS. DY. C. I. T. CIRCLE-1 AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A NO. 334/(ASR)/2015 ASSESSMENT YEAR: 2010-11 PAN: ABCFS4466K DY. C. I. T. CIRCLE-1 AMRITSAR. VS. M/S. SKA BUILDERS 57-PINK PLAZA, NEAR HALL GATE, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA (A DV.) RESPONDENT BY: SH. RAHUL DHAWAN (D. R.) DATE OF HEARING: 08.08.2017 DATE OF PRONOUNCEMENT: 15.09.201 7 ORDER PER T. S. KAPOOR (AM): THESE ARE CROSS APPEALS FILED BY ASSESSEE AS WELL A S BY REVENUE AGAINST THE ORDER OF LD. CIT(A), AMRITSAR DATED 31. 03.2015 FOR ASST. YEAR: 2010-11. 2. THE ASSESSEE IS AGGRIEVED WITH THE ADDITIONS SUS TAINED BY LD. CIT(A) WHICH THE ASSESSING OFFICER HAD MADE ON ACCO UNT OF UNEXPLAINED ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 2 CASH CREDITS TO THE TUNE OF RS.14,50,000/- RECEIVED FROM THE FOLLOWING PERSONS: (I) SMT. SUKHJIT KAUR RS.5,00,000/- (II) SH. VISHAL KUMAR RS.2,00,000/- (III) SH. AJIT SINGH RS.5,00,000/- (IV) SH. VINOD KALIA RS.2,50,000/- THE GROUNDS OF APPEAL TAKEN BY ASSESSEE RELATES TO ONLY THESE FOUR ADDITIONS. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE AP PEAL FILED BY REVENUE IN ITA NO. 334/ASR/2015 IS NOT MAINTAINABLE AS THE TAX EFFECT IN THIS APPEAL IS BELOW RS.10 LACS AND AS PER CIRCULAR NO. 21 OF 2015, DATED 10 TH OCT. 2015, THE REVENUES APPEAL IS NOT MAINTAINABL E. 4. THE LD. DR FAIRLY AGREED THAT THE TAX INVOLVED I N THIS APPEAL IS LESS THAN RS. 10 LACS. 5. THEREFORE THE APPEAL OF THE REVENUE IN ITA NO. 3 34 IS DISMISSED AS THE TAX INVOLVED IN THIS APPEAL IS LESS THAN RS.10 LACS. 6. AS REGARDS THE APPEAL FILED BY THE ASSESSEE, THE LD. AR SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITIONS U/S 68 OF THE ACT SPECIFICALLY IN VIEW OF THE FACT THAT ASSESSEE HAD FILED BANK STATEMENT, COPY OF RETURNS OF INCOME TAX, CONFIRMATIONS AND TH EREFORE THE ASSESSEE HAD DISCHARGED ITS ONUS IN PROVING THE IDENTITY, CR EDITWORTHINESS AND GENUINENESS OF CASH CREDITS. ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 3 7. IN RESPECT OF SMT. SUKHJIT KAUR THE LD. AR SUBMI TTED THAT SHE WAS HAVING AGRICULTURAL LIMIT ACCOUNT WITH AXIS BANK AN D FURTHER STATED THAT THE DEPOSITS OF RS.5,00,000/- IN HER ACCOUNT WAS MA DE OUT OF WITHDRAWALS WHICH SHE HAD MADE ON THE EARLIER DATES . THE LD. AR SUBMITTED THAT LD. CIT(A) HAD HELD THAT THE EARLIER WITHDRAWALS WERE FOR THE PURPOSE OF MEETING HER IMMEDIATE NEEDS WITHOUT POINTING OUT ANY SPECIFIC INSTANCE WHERE SHE MIGHT HAVE UTILIZED THE WITHDRAWN MONEY. THE LD. AR SUBMITTED THAT THE ONUS WAS ON THE REVEN UE TO PROVE THAT THE SAID WITHDRAWALS WERE UTILIZED FOR ANY OTHER PURPOS E RATHER THAN FOR REDEPOSIT IN THE BANK ACCOUNT. OUR SPECIFIC ATTENTI ON WAS INVITED TO THE WITHDRAWALS MADE BY SMT. SUKHJIT KAUR ON 24.12.2009 , 09.01.2010, 20.02.2010 AND 13.03.2010. THE LD. AR SUBMITTED THA T THE TOTAL AMOUNT AVAILABLE WITH SMT SUKHJIT KAUR OUT OF HER BANK WIT HDRAWALS WERE TO THE TUNE OF RS.5,21,000/- OUT OF WHICH SHE HAD DEPOSITE D ON ACCOUNT OF 5,00,000/- ON 26.03.2010 IN HER SAVING ACCOUNT AND FROM THAT BANK ACCOUNT, SHE HAD GIVEN A CHEQUE TO THE ASSESSEE. TH EREFORE, THE LD. AR SUBMITTED THAT IN THIS CASE EVEN THE SOURCE OF SOUR CE STOOD DULY EXPLAINED AND THEREFORE THE LD. CIT(A) HAS WRONGLY SUSTAINED THIS ADDITION. 8. IN RESPECT OF SH. VISHAL KUMAR THE LD. AR SUBMIT TED THAT SH. VISHAL KUMAR WAS AN EXISTING INCOME TAX PAYEE AND W AS WORKING AS SALES MANAGER WITH BAJAJ ALLIANZ LIFE INSURANCE COM PANY LTD. AND THE COPIES OF INCOME TAX RETURN FOR A.Y. 2008-09, 2009- 10 AND 2010-11 WERE FILED BEFORE THE AUTHORITIES BELOW AND THEREFORE TH E IDENTITY AND ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 4 CREDITWORTHINESS OF THE CASH CREDITS WAS FULLY PROV ED AND THEREFORE THE LD. CIT(A) SHOULD HAVE DELETED THE ADDITIONS. 9. IN RESPECT OF SH. AJITSINGH, THE LD. AR SUBMITTE D THAT ASSESSEE WAS HAVING HIS BANK ACCOUNT WITH PNB A COPY OF WHICH WA S AVAILABLE AT P.B. PAGE NO. 5. HE SUBMITTED THAT AJITSINGH WAS AN AGRI CULTURIST AND NECESSARY COPY OF JAMABANDI WAS PLACED AT P.B. PAGE 6 TO 9 AND ENGLISH VERSION OF THE SAME WAS AVAILABLE AT P.B. PAGE 6A T O 9A. THE LD. AR SUBMITTED THAT THESE COPIES OF JAMABANDI PROVES THA T THE ASSESSEE WAS HAVING AGRICULTURAL LAND AND IT IS WRONG ON THE PAR T OF LD. CIT(A) TO HOLD THAT ASSESSEE WAS NOT HAVING AGRICULTURAL LAND. AS REGARDS SH. VINOD KALIA, THE LD. AR SUBMITTED T HAT MR. VINOD KALIA WAS ALSO AN EXISTING INCOME TAX PAYEE AND THE RETURN OF INCOME ALONGWITH COMPUTATION OF INCOME WAS FILED THAT THE AUTHORITIES BELOW. IT WAS SUBMITTED THAT FROM THE COPIES OF INCOME TAX RE TURNS, IT IS APPARENT THAT SHRI VINOD KALIA WAS HAVING SUFFICIENT AMOUNT OF INCOME TO ADVANCE UNSECURED LOAN TO THE ASSESSEE. 10. THE LD. AR IN VIEW OF THESE FACTS ARGUED THAT A SSESSEE HAD PROVED SOURCE OF THESE DEPOSITS AND IT WAS NOT REQUIRED TO PROVE SOURCE OF SOURCE. RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWING CASE LAWS: (I) DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAM NARAIN GOEL, REPORTED IN 224 ITR 180. (II) DECISION OF ITAT, KOLKATA BENCH, IN THE CASE O F JCIT VS. GRAMOPHONE COMPANY OF INDIA LTD., REPORTED IN 265 ITR (KOL-TRI B) 46 (AT). (III) DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF MONGA METALS PVT. LTD. VS. ACIT, REPORTED IN 67 TTJ (ALL) 247. ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 5 (IV) DECISION OF SUPREME COURT OF INDIA IN THE CASE OF CIT VS. DAULAT RAM RAWAT MULL, REPORTED IN 87 ITR 349 (SC). (V) DECISION OF GUJARAT HIGH COURT IN THE CASE OF D CIT VS. ROHINI BUILDERS, REPORTED IN 256 ITR 360 (GUJ.) (VI) DECISION OF RAJASTHAN HIGH COURT IN THE CASE O F AARAVALI TRADING CO. VS. ITO, REPORTED IN 3 DTR (RAJ.) 199. (VII) 211 ITR 11 (SC.) 11. THE LD. DR ON THE OTHER HAND SUBMITTED THAT LD. CIT(A) HAS PASSED DETAILED AND REASONED ORDER AND WHEREIN HE H AS HELD THAT THE BALANCE IN THE BANK ACCOUNTS BEFORE AND AFTER THE I SSUE OF CHEQUES TO ASSESSEE WAS MINIMAL AND THESE PERSONS HAD ADVANCED LOANS TO ASSESSEE AFTER DEPOSIT OF THE SIMILAR AMOUNTS IN THIER BANK ACCOUNTS WHICH SUGGESTS THAT THE LOANS OBTAINED BY ASSESSEE WERE N OT GENUINE AND ALSO THE CREDITWORTHINESS OF THE DEPOSITORS WAS ALSO NOT PROVED AND THEREFORE THE LD. CIT(A) HAS RIGHTLY SUSTAINED THE ADDITIONS. IT WAS SUBMITTED THAT MERELY BECAUSE OF THE FACT THAT THE ASSESSEE HAD FI LED CONFIRMATIONS AND THE DEPOSITS WERE RECEIVED THROUGH CHEQUES DOES NOT ABSOLVE ASSESSEE FROM ITS ONUS OF PROVING CASH CREDITS. 12. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HOUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS CORRECT THAT A SSESSEE HAD FILED A CONFIRMATIONS ALONGWITH COPY OF BANK ACCOUNTS AND C OPIES OF INCOME TAX RETURNS WHEREVER APPLICABLE. THE LD. CIT(A) HAS UPH ELD THE ADDITIONS ONLY BECAUSE OF THE FACT THAT THESE DEPOSITORS HAD ISSUED CHEQUES TO THE ASSESSEE IMMEDIATELY AFTER DEPOSIT OF SIMILAR AMOUN TS IN CASH IN THE RESPECTIVE BANK ACCOUNTS. ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 6 AS REGARDS SMT. SUKHJIT KAUR WE FIND THAT THE LD. CIT(A) THOUGH ADMITTED THAT SMT. SUKHJIT KAUR HAS WITHDRAWN VARIO US AMOUNTS FROM HER BANK ACCOUNT IN CASH BUT HE HELD THAT THESE WIT HDRAWALS WERE MADE FOR HER PERSONAL NEEDS. THE LD. CIT(A) HAS NOT BROU GHT ON RECORD ANY MATERIAL TO SUGGEST THAT FOR WHAT PURPOSES, THESE W ITHDRAWALS WERE MADE. IN THE ABSENCE OF ANY ADVERSE FINDINGS REGARD ING THESE WITHDRAWALS IT CANNOT BE CONCLUDED THAT THESE WITHD RAWALS WERE NOT UTILIZED FOR REDEPOSIT IN THE BANK ACCOUNT OF SMT. SUKHJIT KAUR. FROM HER BANK ACCOUNT WITH AXIS BANK SHE HAD WITHDRAWN AN AM OUNT OF RS.5,21,000/- ON VARIOUS DATES WHICH IS DETAILED AS UNDER: 24.12.2009 RS.101000/- 09.01.2010 RS.90,000/- 20.01.2010 RS.70,000/- 13.03.2010 RS.2,60,000/- TOTAL RS.5,21,000/- OUT OF THESE WITHDRAWALS OF RS.5,21,000/- SMT. SUK HJIT KAUR DEPOSITED AN AMOUNT OF RS.5,00,000/- IN THE SAME BA NK ACCOUNT ON 26.03.2010 AND ISSUED A CHEQUE TO THE ASSESSEE ON T HE SAME DATE AND THEREFORE THE AMOUNT OF UNSECURED LOAN FROM SMT. SU KHJIT KAUR GETS DULY EXPLAINED. WE FURTHER FIND THAT THESE WITHDRAW ALS WERE MADE BY SMT. SUKHJIT KAUR AFTER THE AMOUNTS IN HER SAVING A CCOUNT WERE TRANSFERRED FROM AGRICULTURE LIMIT ACCOUNT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE DO NOT AGREE WITH THE DECISION OF LD. CIT(A) SO FAR AS SMT. SUKHJIT KAUR IS CONCERNED AS HER DEPOSITS OF C ASH IN THE BANK ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 7 ACCOUNT ARE DULY EXPLAINED AND THIS WAS THE ONLY OB JECTION RAISED BY LD. CIT(A). IN VIEW OF THE ABOVE, WE ALLOW GROUND NO. 4 OF THE APPEAL. AS REGARDS DEPOSITS OF RS.5,00,000/- RECEIVED FROM SH. AJIT SINGH, THE LD. CIT(A) HAS HELD THAT SH. AJIT SINGH WAS NOT HAVING ANY AGRICULTURE LAND AND HE HAS HELD THAT THE AGRICULTU RAL LAND BELONGED TO BROTHERS OF SH. AJIT SINGH. HOWEVER IN THE P.B. PAG E 6A TO 9A, WE FIND AN ENGLISH VERSION OF JAMABANDI WHEREIN AJIT SINGH HAS BEEN MENTIONED AS OWNER OF THE LAND. THE LD. CIT(A) HAS NOT EXAMINED THIS FACT ABOUT AGRICULTURAL INCOME OF SH. AJIT SINGH AS HE HAS HEL D THAT THE LAND BELONGED TO THE BROTHERS OF SH. AJIT SINGH, THEREFO RE WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE OFFICE OF THE ASSESSING OFFICER WHO SHOULD EXAMINE THE AGRICULTURE INCOME OF SH. AJ IT SINGH TO ARRIVE AT THE CONCLUSION AS TO WHETHER SH. AJIT SINGH WAS ABL E TO ADVANCE AN AMOUNT OF RS.5,00,000/- TO THE ASSESSEE OR NOT. IN VIEW OF THE ABOVE GROUND NO. 3 IS ALLOWED FOR STATISTICAL PURPOSES. AS REGARDS THE DEPOSITS OF RS.2,50,000/- RECEIVED FROM SH. VINOD KALIA, WE FIND THAT MR. VINOD KALIA WAS HAVING SALA RY INCOME FROM BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. AND HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 WAS FILED AT RS.1,81,680/-. THE LD. CIT(A) HAS HELD THAT THE BANK STATEMENT OF SHRI VINOD KALIA WA S NOT FILED AND ASSESSEE HAD NOT EXPLAINED THE GENERATION OF SAVING S OF SH. VINOD KALIA TO THE EXTENT OF RS.2,50,000/- AND THEREFORE HE HAS HELD THAT THE DEPOSITS OF RS.2,50,000/- GIVEN BY SH. VINOD KALIA REMAINED ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 8 UNEXPLAINED. WE FIND THAT ASSESSEE HAD FILED THE CO PIES OF INCOME RETURNS FOR THE ASSESSMENT YEAR 2010-11 TO 2011-12 WHEREAS THE RELEVANT COPIES OF RETURN FOR ESTABLISHING THE PAST SAVINGS OF SH. VINOD KALIA WERE RETURNS BELONGING TO YEARS EARLIER THAN ASSESSMENT YEAR 2010-11. BEFORE US ALSO NO PROOF OF EARLIER SAVINGS OF SH. VINOD KA LIA WAS SUBMITTED, THEREFORE WE CONCUR WITH THE FINDINGS OF LD. CIT(A) THAT THE AMOUNT OF RS.2,50,000/- REMAINED UNEXPLAINED AND IN VIEW OF T HE ABOVE GROUND NO. 5 IS DISMISSED. 13. NOW COMING TO THE LAST ADDITION OF RS.2,00,000/ - WHICH WAS RECEIVED FROM SH. VISHAL KUMAR, WE FIND THAT THE AS SESSEE HAD FILED INCOME TAX RETURNS OF SH. VISHAL KUMAR FOR ASSESSME NT YEAR 2008-09, 2009-10 AND 2010-11 WHEREIN THE INCOMES OF RS.1,56, 010, RS.1,93,500/- AND RS.1,51,994/- WERE DECLARED. THE COPY OF BANK ACCOUNT IN ICICI BANK IS PLACED AT P.B. PAGE 29 TO 33 AND WHICH WAS ALSO FILED BEFORE THE AUTHORITIES BELOW. THE BALANCE IN THE BANK ACCOUNT REMAINED VERY LOW AND IT WAS ONLY ON 29.03.2010 THA T A CASH OF RS.2,00,000/- WAS DEPOSITED OUT OF WHICH ON 30.03.2 010, A CHEQUE OF RS.2,00,000/- WAS GIVEN TO THE ASSESSEE. OTHER THAN THIS CASH DEPOSIT, THE BANK ACCOUNT DO NOT REVEAL ANY OTHER DEPOSIT. T HEREFORE THE GENUINENESS OF THE TRANSACTION COULD NOT BE EXPLAIN ED AND IN VIEW OF THE ABOVE, WE ARE IN AGREEMENT WITH THE FINDINGS OF LD. CIT(A). IN VIEW OF THE ABOVE GROUND NO. 6 IS ALSO DISMISSED. ITA NOS. 352&334(ASR)/2015 ASSESSMENT YEAR: 2010-11 9 14. IN NUTSHELL, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED, PARTLY DISMISSED AND PARTLY ALLOWED FOR STATISTICAL PURPOS ES WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED BEING BELOW THE TAX EFF ECT OF RS.10 LACS. ORDER PRONOUNCED IN THE OPEN COURT ON 15.09.2017 SD/- SD/- (N. K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15.09.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER