ITO, Gurgaon V. Sh. Yogesh Kataria, Gurgaon

ITA 3385/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5923 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHOBHIT TIWARI; YOGESH KATARIA
• Keywords: Additional evidence
• Section: 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 3385 /DEL/201 5 A.Y. 20 10 - 11 INCOME TAX OFFICER, WARD 4(4), HSIIDC BUILDING, UDYOG VIHAR, PHASE-V, GURGAON VS. SH. YOGESH KATARIA, 1/23, LAXMI GARDEN, GURGAON (PAN: ABOKPK9651N) NOW: H.NO. 692, SECTOR-7, GURGAON (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. ATIQ AHMED, SR. DR. ASSESSEE BY : SH. SHOBHIT TIWARI, ADV. & SH. YOGESH KATARIA-ASSESSEE ORDER PER H.S. SIDHU, JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE ORD ER DATED 17.3.2015 PASSED BY THE LD. CIT(A)-1, GURGAON RELE VANT TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE I.T. ACT 2 ON ACCOUNT OF UNEXPLAINED DEPOSIT OF CASH TO THE EXTENT OF RS. 18,45,000/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED DEPOSIT OF CASH TO THE EXTENT OF RS. 18,45,000/- INSPITE OF THE FACT THAT THE SALE OF PROPERTY IS NOT REFLECTED IN THE RETURN OF INCOME FILED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED DEPOSIT OF CASH TO THE EXTENT OF RS. 18,45,000/- INSPITE OF THE FACT THAT THERE IS GAP OF MORE THAN 3 MONTHS IN THE SALE OF PROPERTY AND DEPOSIT OF CASH IN BANK ACCOUNT. 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. THAT THE APPEAL CRAVES FOR THE PERMISSION TO ADD, DELETE 3 OR AMEND GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMP ANY HAS FILED THE RETURN ON 30.3.2011 DECLARING INCOME OF RS.2,10,400/- WHICH WAS ASSESSED AT RS. 38,95,400/- , CONSEQUENT UPON ASSESSMENT ORDER 11.3.2013 ORDER PASSED U/S. 14 4 OF THE I.T. ACT. SUBSEQUENTLY, THE AO IMPOSED PENALTY U/S. 271(1 )(C) OF RS. 10,99,608/- VIDE ORDER DATED 20/9/2013 BY HOLDING TH AT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF HIS INC OME IN RESPECT OF THE ADDITIONS MADE. AGAINST THE PENALTY ORDER, THE AS SESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNE D ORDER DATED 17.3.2015 HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE PENALTY IN DISPUTE. AGGRIEVED WITH THE ORDER OF THE L D. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFI CER AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF A PPEAL. 4. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE HA S RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HA S PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFE RENCE, BECAUSE THE QUANTUM ADDITION HAS ALREADY BEEN DELETED BY THE L D. CIT(A) HIMSELF, HENCE, THE PENALTY DOES NOT SURVIVE. 4 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS, ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT LD. CIT(A ) HAS DELETED THE PENALTY IN DISPUTE ON THE BASIS THAT THE ENTIRE AD DITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS HAS BEEN DELE TED BY HIM, HENCE, THERE IS NO QUESTION OF IMPOSING THE PENALTY. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING HEREWITH THE RELEVAN T FINDINGS OF THE LD. CIT(A) GIVEN IN PARA NO. 4.2 TO 4.3 OF THE IM PUGNED ORDER AS UNDER:- 4.2 I HAVE CONSIDERED THE FACTS OF. THE CASE AND GONE THROUGH THE SUBMISSIONS OF LD. COUNSEL OF THE APPELLANT. IN THE APPELLATE ORDER PASSED BY ME IN APPEAL NO 204/13-14 DATED 24.02.15, AGAINST THE ORDER U/S 144 OF THE INCOME TAX ACT, THE ENTIRE ADDITION OF RS. 36,85,000/- IN RESPECT OF WHICH THE AFORESAID PENALTY WAS IMPOSED HAS BEEN DELETED. WHILE DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS THE UNDERSIGNED HELD AS UNDER: - 'I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE SUBMISSIONS OF THE APPELLANT, THE REMAND REPORT OF THE A.O. ALONG WITH THE REJOINDER TO THE REMAND REPORT FURNISHED BY THE APPELLANT THE A.0. IN THE FIRST INSTANCE, MADE THE ADDITION OF RS. 36,85,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS, SINCE IN THE ABSENCE OF ANY DETAILS 5 FURNISHED BY THE APPELLANT, HE HELD THE ENTIRE AMOUNT OF CASH DEPOSITS, AS PER AIR INFORMATION, IN THE APPELLANT'S BANK ACCOUNT TO BE UNEXPLAINED. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT FURNISHED ADDITIONAL EVIDENCE WHICH WAS SENT TO THE A.O FOR HIS EXAMINATION. THE A.O IN HIS REPORT DATED 19- 01-2015 SUBMITTED THAT THE SAME AMOUNT OF RS. 18,45,OOO/- APPEARING AS CASH DEPOSIT WAS ADDED TWICE IN THE ASSESSMENT ORDER U/S 144 OF THE INCOME TAX ACT. THE A.O CONCLUDED THAT THE TOTAL CASH DEPOSIT IN APPELLANT'S BANK ACCOUNT WAS RS. 18,45,OOO/- RATHER THAN RS. 36,85,OOO/- AS HAD BEEN ADDED BY THE A.O IN HIS ORDER U/S 144 OR THE INCOME TAX ACT. 5.6 AFTER A CAREFUL ANALYSIS OF THE DOCUMENTS SUBMITTED BY THE APPELLANT TOGETHER WITH THE REMAND REPORT OF THE A.O., IT IS FOUND THAT THE APPELLANT HAD MADE CASH DEPOSITS OF RS 5000/- ON 1-2-2010 OF RS. 16OOOOO/- ON 2- 2-2010 AND RS. 240OOO/- ON 2-3-2010. THE TOTAL OF THESE AMOUNTS COMES TO RS 1845OOO/- APART FROM MAKING THIS ADDITION OF RS 18,45,000/-, THE AO MADE ANOTHER ADDITION OF RS 18,40OOO/- WHICH CONSISTED OF CASH DEPOSITS OF RS 2,40,OOO/- AND 16,00,OOO/- ALREADY CONSIDERED EARLIER BY THE AO. HENCE A DOUBLE ADDITION ON ACCOUNT OF THE SAME CASH DEPOSITS WAS MADE BY THE AO. THE APPELLANT 6 HAS GIVEN AN AFFIDAVIT IN THIS REGARD. MORE IMPORTANTLY, THE AO HAS ACKNOWLEDGED THE FACT THAT THE TOTAL CASH DEPOSIT IN THE APPELLANT'S BANK ACCOUNT WAS ONLY RS 18,45,000/. GIVEN THESE FACTS, I CONCUR WITH THE AO, AND HOLD THAT THE TOTAL CASH DEPOSITS IN APPELLANT'S BANK ACCOUNT WERE RS. 18,45,OOO/- ONLY. CONSEQUENTLY THE REMAINING AMOUNT OF RS. 18,40,000/- ADDED TO THE APPELLANT'S INCOME ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS GETS DELETED. THE APPELLANT GETS CONSEQUENTIAL RELIEF ON THIS BASIS. 5.7. AS REGARDS THE REMAINING AMOUNT OF RS. 18,45,000/-, THE APPELLANT SUBMITTED THAT THIS WAS ON ACCOUNT OF CASH DEPOSITS OF RS. 5,000/- ON 01-02-2010, RS. 16 LAKH ON 02-02-2010 AND RS. 2,40,000/- ON 02-3-2010 AMOUNTING IN ALL TO RS. 18,45,000/. IN ORDER TO EXPLAIN THE AFORESAID CASH DEPOSITS, THE APPELLANT SUBMITTED THAT THESE DEPOSITS WERE ON ACCOUNT OF SALE OF PROPERTY AT KHASRA NO. 6631/888,889, JYOTI PARK, GURGAON, HARYANA. THE APPELLANT GAVE A COPY OF REGISTERED SALE DEED DATED 24-11-2009, AS PER WHICH, SH. 7 YOGESH KATARIA, THE APPELLANT SOLD THIS PROPERTY FOR RS. 47,04,000/- TO SMT. JYOTI GAMBHIR. OUT OF THE TOTAL AMOUNT OF RS. 47,04,000/-, RS. 27,04,000/- WAS RECEIVED IN CASH AND THE REMAINING AMOUNT BY CHEQUE. ON THE BASIS, OF THIS DOCUMENT, THE APPELLANT SUBMITTED THAT THE SALE PROCEEDS OF THE AFORESAID PROPERTY RECEIVED ON 24-11-2009 WERE DEPOSITED IN THE BANK ACCOUNT ON 02-02- 2010 WHEN AN AMOUNT OF RS. 16 LAKH WAS DEPOSITED IN CASH AND ON 02-03-2010 WHEN AN AMOUNT OF RS. 2,40,000/- IN CASH WAS DEPOSITED IN THE BANK ACCOUNT. THE A.O WHILE ACCEPTING REGISTERED SALE DEED OF THE PROPERTY DEFENDED THE ADDITION OF RS. 18,45,000/- ON THE GROUND THAT THERE WAS A SUBSTANTIAL GAP BETWEEN DATE ON WHICH SALE PROCEEDS FROM THE AFORESAID PROPERTY WERE RECEIVED IN CASH ON THE ONE HAND AND DATES OF CASH DEPOSITS IN THE BANK ACCOUNT ON THE OTHER. THE APPELLANT, IN HIS REJOINDER TO THE- REMAND REPORT SUBMITTED THAT IN THE ABSENCE OF ANY EVIDENCE REGARDING 8 ANY OTHER USE OF CASH BY THE ASSESSEE, IT CANNOT BE ALLEGED THAT SUCH CASH WAS USED FOR SOME OTHER PURPOSES AND WAS NOT AVAILABLE WITH THE ASSESSEE ON THE DATE WHEN CASH DEPOSIT WAS MADE IN THE BANK ACCOUNT. FURTHERMORE, 'IT WAS SUBMITTED THAT THERE WAS NO LEGAL BAR IN KEEPING A CASH AT HOME BEFORE DEPOSITING THE SAME IN BANK. AS REGARDS THE EXPLANATION BEHIND NOT DEPOSITING, THE CASH RECEIVED FROM SALE OF PROPERTY INTO THE BANK ACCOUNT, THE APPELLANT SUBMITTED THAT HE INTENDED TO PURCHASE THE PROPERTY BUT COULD NOT FIND A SUITABLE PROPERTY FOR HIMSELF AS A RESULT OF WHICH CASH WAS DEPOSITED LATER INTO THE BANK ACCOUNT. APART FROM GIVING THIS EXPLANATION, THE APPELLANT RELIED UPON A NUMBER OF CASE LAWS SOME OF WHICH ARE CLEARLY ATTRACTED IN THE APPELLANT'S CASE. FOR INSTANCE IN THE CASE OF SANJEEV KAPOOR VS. CIT (ITA NO. 2091/DEL/2010) DATED 29-10-2010 IT WAS HELD THAT IF A PERSON WITHDRAWS CASH FROM BANK IN INSTALLMENTS AND REDEPOSIT THE SAME 9 INTO BANK WITHOUT USING THE CASH, IN TTIE ABSENCE OF ANY EVIDENCE REGARDING ANY OTHER USE OF CASH BY THE ASSESSEE, IT CANNOT BE HELD THAT SUCH CASH COULD HAVE BEEN USED FOR SOME OTHER PURPOSES AND WAS NOT AVAILABLE WITH HIM ON THE DATE CASH WAS DEPOSITED IN THE BANK ACCOUNT. FURTHERMORE, IN THE CASE OF CIT VS. PALWINDER PAL SINGH (P&H) ITA NO. 76 OF 2011, THE HON'BLE ITAT CHANDIGARH BENCH 'A' CHANDIGARH CAME TO THE CONCLUSION THAT THE ENTIRE DEPOSITS IN THE BANK ACCOUNT WERE EXPLAINED AS OUT OF MANY WITHDRAWALS FROM THE JOINT SAVING ACCOUNT OF ASSESSEE'S FATHER AND MOTHER IN CENTURION BANK OF PUNJAB. SIMILARLY, IN THE CASE OF CIT VS. JOGENDER SINGH (DELHI ITAT 2011) IT WAS HELD THAT THE AO HAD NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THE FACT THAT CASH WITHDRAWALS HAD BEEN UTILIZED OTHER THAN FOR PURPOSE-SPECIFIED BY THE APPELLANT. ON THIS BASIS IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN TREATING DEPOSITS OF RS. 14,52,000/- AS UNEXPLAINED. FINALLY ON THE 10 TIME GAP BETWEEN WITHDRAWALS AND CASH DEPOSITS IT HAS BEEN HELD IN THE CASE OF MOONGIPA INVESTMENT LTD. VS. ITO ITA NO. 2605/DEL/2007 (2012) THAT THE SAME CANNOT BE MADE A BASIS OF ADDITION. 5.8. HENCE AFTER A CAREFUL CONSIDERATION OF THE FACTS OF THE CASE, THE APPELLANT'S SUBMISSIONS, THE REMAND REPORT OF THE AO ALONG WITH THE APPELLANT'S REJOINDER AND VARIOUS JUDICIAL PRONOUNCEMENTS ON THIS ISSUE, I HOLD THAT THE AD ERRED IN MAKING THE ADDITION OF RS. 18,45,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. ACCORDINGLY THE ADDITION OF RS. 18,45,000/- IS DELETED. GROUND NO. 3 AND 4 OF THE APPEAL ARE THUS ALLOWED. ' 4.3 HENCE ON ACCOUNT OF THE DETAILED REASONING GIVEN BY ME IN THE AFOREMENTIONED APPELLATE ORDER AGAINST ORDER U/S 144 OF THE INCOME TAX ACT, ENTIRE ADDITION OF RS. 36,85,000/- MADE ON ACCOUNT OF UNEXPLAINED CASE DEPOSITS HAS BEEN DELETED. SINCE THE ENTIRE ADDITION ON ACCOUNT OF EXPLAINED CASH DEPOSITS HAS BEEN DELETED BY ME IN THE AFORESAID ORDER, THERE IS NO QUESTION OF IMPOSITION OF PENALTY IN RESPECT OF THE AFORESAID ADDITION MADE BY THE A.O IN HIS ORDER U/S 144 OF THE INCOME TAX ACT. HENCE PENALTY OF RS. 10,99,608/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT IS HEREBY 11 CANCELLED. ACCORDINGLY, GROUND NOS. 2 & 3 OF THE APPEAL ARE ALLOWED. 5.1 AFTER PERUSING THE AFORESAID FINDING OF THE LD. C IT(A), WE FIND THAT SINCE THE ENTIRE ADDITION ON ACCOUNT OF UNEXPLAINE D CASH DEPOSITS HAS ALREADY BEEN DELETED BY THE LD. CIT(A), THEREFORE, THE PENALTY IN DISPUTE WAS RIGHTLY DELETED BY THE LD. CIT (A), WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPH OLD THE ACTION OF THE LD. CIT(A) IN DELETING THE PENALTY AND REJECT THE GROUNDS RAISED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED ON 21/06/2018. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 21/06/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 12