Smt. KAVITA AGARWAL, Khandwa V. The ITO, Khandwa

ITA 345/IND/2014

• Counselvise Citation: 34522714 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: ASHOK SURJAN
• Keywords: Income from undisclosed sources; Principle of natural justice; Peak credit
• Section: 234B; 68

Judgement Text

SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO.345/IND/2014 A.Y.2008-09 SMT. KAVITA AGRAWAL KHANDWA ::: APPELLANT VS INCOME TAX OFFICER KHANDWA ::: RESPONDENT APPELLANT BY SHRI ASHOK SURJAN RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 17.12.2015 DATE OF PRONOUNCEMENT 17 .12.2015 O R D E R THE ASSESSEE HAS PREFERRED THIS APPEAL AGAINST THE ORDER OF THE LEARNED CIT(A)-II, INDORE, DATED 28.2.2 014 ON THE FOLLOWING GROUNDS :- SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 2 (I) THE LD.CIT(A) HAS ERRED AND WAS NOT JUSTIFIED IN DECIDING THE APPEAL IN CONFIRMING THE ORDER OF THE LD. A.O. AS THE SAME IS NOT BASED ON FACTS ON RECOR D AND IS CONTRARY TO THE PROVISIONS OF THE ACT. (II) THE LD.CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS.4,52,888/- ON ACCOUNT OF CASH DEPOSITS IN BANK. (III) THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITIONS SO MADE AT RS.4,52,888/- AS TO BE COVERING U/S 68 OF THE IT ACT, 1961. (IV) THE LD.CIT(A) HAS ERRED AND WAS NOT JUSTIFIED IN MAINTAINING CHARGING OF INTEREST U/S 234A, 234B (V) THE LD.CIT(A) HAS ERRED AND WAS NOT JUSTIFIED IN NO T QUASHING THE INITIATION OF PENALTY U/S 271(1)() 2. BRIEFS FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FEMALE INDIVIDUAL. THE ASSESSEE HAS MAIN SOURCE OF INCOM E FROM MEHANDI, SAREE FALL PIKU AND STITCHING WORK. IN TH IS SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 3 CASE AIR INFORMATION WAS RECEIVED THAT THE ASSESSEE HAS MADE CASH DEPOSITS OF RS. 11,15,000/-IN THE BANK ACCOUN T. THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF HEAVY BANK TRANSACTION. THE DETAILS OF MAJOR TRANSACTIONS ARE AS UNDER :- (I) 4.4.2007 RS. 4.50 LACS (II) 10.4.2007 RS. 1.50 LACS (III) 7.5.2007 RS. 1.00 LAC (IV) 13.7.2007 RS. 1.00 LAC (V) 7.8.2007 RS. 0.65 LACS (VI) 8.2.2008 RS. 1.50 LACS TOTAL = RS.11.15 LACS IN REPLY TO SHOW CAUSE NOTICE THE ASSESSEE SUBMITTED THAT THE MONEY WAS DEPOSITED AND WITHDRAWN FROM THE ACCOUNT WITHIN ONE OR TWO DAYS TIME. THE REASON FOR THE SAME IS THAT THE ASSESSEE DOES NOT DEPOSIT SMALL CURRENCY AND UNDERTAKES MANY TRANSACTIONS. SHE FURTHER STATED THAT TH E SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 4 ASSESSEES HUSBAND IS OWNER OF MANISH TRADERS AND FOR H IS TRADE, TO SAVE THE COMMISSION SHE DEPOSITED MONEY OF SMALL DENOMINATION OF CURRENCY NOTES IN BANK ACCOUNT AND THEN WITHDRAWN THE AMOUNT OF BIG DENOMINATION CURRENC Y NOTES. IN SUPPORT OF HER SUBMISSIONS, THE ASSESSEE PRODUCED COPY OF BANK ACCOUNT OF MANISH TRADER AND COPY OF BANK ACCOUNT OF SOME DAYS FOR THIS PURPOSE BUT THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE SAME. HE, THEREFORE, TREATED THE PEAK DEPOSIT OF RS.4,52,888/- AS INCOME FROM UNEXPLAINED SOURCES U/S 68 OF THE ACT. 3. AGAINST THE ABOVE ACTION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED CIT (A) BUT COULD NOT SUCCEED. NOW THE ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL. 4. BEFORE ME, THE LEARNED COUNSEL FOR THE ASSESSEE FI LED THE FOLLOWING WRITTEN SUBMISSIONS :- SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 5 GROUND NO. 1 THE LD. CIT(A) HAS ERRED AND WAS NOT JUSTIFIED IN DECIDING THE APPEAL IN CONFIRMING THE ORDER OF THE LD. A.O. AS THE SAME IS NOT BASED ON FACTS ON RECORD AN D IS CONTRARY TO THE PROVISIONS OF THE ACT . I. THE LD. CIT(A) DID NOT APPRECIATE THE FOLLOWING FACTS OF THE CASE PROPERLY WHILE PASSING APPEAL ORDER HENCE HIS ORDER IS NOT BASED ON FACTS OF THE CASE AND DESERVES TO BE SUITABLY AMENDED. SINCE THE LD. CIT(A) DID NOT APPRECIATE EVIDENCES ON RECORD IT IS ALSO AGAINST THE PRINCIPLES OF NATURAL JUSTICE. (I) IDENTICAL AMOUNT WITHDRAWAN THAT TOO ON VERY SAME DAY. PB I (II) ALWAYS WITHDRAWN HIGHER DENOMINATION CURRENCY CERTIFICATE FROM BANK P.B. 4 (III) TIME OF CONVERSION WHEN STOCK OF BIG DENOMINATION CURRENCY CONSUMED THEN ONLY GETS CONVERTED FOR NEXT NEED/TERM. (PLZ SEE ENCLOSED SHEET OF RECONCILIATION) (IV) UNACCOUNTED/UNDISCLOSED MONEY GENERALLY COMES IN HIGHER DENOMINATION & NOT IN SMALL (V) BEYOND HUMAN PROBABILITY PRESUMPTION THATHUGE TRANSACTION NOT REQUIRED IN ASSESSEES BUSINESS THEREFORE IT IS FROM UNDISCLOSED SOURCES, IS BASELE SS. BECAUSE A COMMON PRUDENCE PERSON WILL NOT GET CONVERTED HER UNDISCLOSED MONEY THROUGH DEPOSITING SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 6 IN OWN BANK ACCOUNT SPECIALLY WHEN CASH WITHDRAWN OF IDENTICAL AMOUNT ON THE SAME DAY. (VI) ASSESSEE NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AS PER SEC 44AA. HENCE RECONCILIATION FROM BOOKS NO T POSSIBLE. (VII) ALWAYS HAVING SUFFICIENT HUGE CASH BALANCE IN THE BOOKS OF HUSBAND IS NOT A COINCIDENCE. (VIII) LEVY OF BANK CHARGES BY BANK FIRST TIME ON DEPOSITS IN CURRENT ACCOUNT. (IX) MOTIVE OF HUSBAND SAVING OF BANK CHARGES. (X) AFFIDAVIT OF HUSBAND NOT EXAMINED IT IS NOT SELF SERVING BEING SUPPORTED BY CASH BOOK & BANK CERTIFICATE FOR EXCHANGE OF CURRENCY. (XI) PEAK CREDIT ADDITION IS MADE WITHOUT ANY CREDIT FOR OPENING CASH BALANCE. II. CERTIFICATE FROM BANK NOT APPRECIATED BY LD. CIT(A) SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 7 A CERTIFICATE WAS FURNISHED FROM BANK STATING THAT CURRENCY NOTES OF SMALL DENOMINATION WERE DEPOSITED IN BANK A/LEARNED CIT(A) P.B. 2-3. ANOTHER CERTIFIC ATE WAS ALSO FURNISHED FROM BANK STATING THAT CURRENCY NOTES OF BIG DENOMINATION WERE WITHDRAWN FROM BANK A/C P.B. 4-4. COPY OF RELEVANT PAGES OF CASH BOOK O F HER HUSBAND WERE ALSO FURNISHED P.B. 6 TO 12. THESE PAGES PROVE THAT THERE WAS SUFFICIENT CASH BALANCE WITH THE HUSBAND OF THE ASSESSEE ON DIFFERENT DATES OF DEPOSIT OF CASHBY ASSESSEE IN HE R SAVING BANK A/C ACC OF DEPOSITORS HUSBAND WAS ALSO FILED BEFORE LD. CIT(A) P.B. 13 TO 13. SINCE THE AF FIDAVIT OF HBAND WAS NOT EXAMINED EVEN AND WAS NEITHER REFUSED NOR APPRECIATED BY CIT(A) WITHOUT GIVING AN Y REASON IN HIS ORDER THE ADDITION CONFIRMED BY HIM I S WITHOUT JURISDICTION AS IT IS AGAINST THE LAW PROPOUNDED BY THE APEX COURT IN MEHTA PARIKH & CO. SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 8 (XII) GROUND NO.2 THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N OF RS.4,52,888/- ON ACCOUNT OF CASH DEPOSITS IN BANK 1. FOR SOURCE OF DEPOSIT - COPY OF HBANDS AUDITED BOOKS WERE PRODUCED WITH AFFIDAVIT BUT NOT APPRECIATED. THE ASSESSEE HAS FURNISHED SATISFACTORY EXPLANATION REGARDING SOURCE OF DEPOSITS IN HER SAVING BANK A/C P.B. 14 TO 15 AND THE EXPLANATION IS SUPPORTED BY OVERWHELMING EVIDENCES FILED BEFORE THE HON'BLE TRIBUNAL IN THE SHAPE OF PAPER BOOK. THE LD. CIT(A) OUGHT TO HAVE NOT CONFIRMED THE ADDITION AND SHOULD HAVE DELETED THE SAME. THE LD. CIT(A) HAS MADE AN ATTEMPT TO BLOW LIFE IN A DEAD ORDER OF A.O. WHICH IS FULL OF CONTRADICTIONS AND CONFUSIONS. AT ONE PLACE HE ASKED THE ASSESSEE TO RECONCILE WITH THE BANK A/C OF MANISH TRADERS AND AT ANOTHER HE SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 9 ASKED TO FURNISH WHETHER THE BANK A/C OF MANISH TRADER HAS BEEN SHOWN IN AUDITED BALANCE SHEET. EVEN AFTER OBSERVING THAT THE ASSESSEE SUBMITTED COPY OF CASH BOOK OF SOME DAYS OF MANISH TRADER HE DID NOT TAKE PAINS TO SEE THE CASH BALANCES AVAILABLE IN THE SAID CASH BOOK (P.B. 6-12) TO FIND OUT TRUTH IN THE CONTENTION OF THE ASSESSEE THAT TH E SMALL DENOMINATION NOTES WERE GIVEN TO HER BY HER HUSBAND FOR EXCHANGING THEM WITH BIG DENOMINATION NOTES NO ACTUAL CASH TRAVELLED TO APPELLANT YOUR HONOUR THIS IS A SIMPLE CASE OF MUTUAL UNDERSTANDING BETWEEN HUSBAND AND WIFE AND NO PHYSICAL CASH HAS ACTUALLY TRAVELLED BETWEEN THEM, ONLY NOTES OF SMALL AND HIGH DENOMINATION HAVE CHANGED HANDS FOR ACCOMMODATING THE HUSBAND BY WIFE THAT TOO WITH THE ACCOUNTED SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 10 MONEY OF HUSBAND AND NO UNACCOUNTED MONEY OF EITHER HUSBAND OR WIFE HAS BEEN UTILISED IN ANY WAY. ALL THE SUPPORTING DOCUMENTS PROVE BEYOND DOUBT THE CONTENTIONS OF THE ASSESSEE. 5. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT T HE ASSESSEES HUSBAND SHOULD HAVE CASH IN HAND ON THE DATE OF DEPOSIT OF MONEY IN THE BANK AND SINCE THE ASSESSE E HAS FAILED TO PROVE THIS FACTOR, THE AMOUNT DEPOSITED IN T HE ASSESSEES BANK MUST BE TREATED AS INCOME FROM UNDISCLOSED SOURCES. 6. AFTER CONSIDERING THE ARGUMENTS OF THE PARTIES, I AM OF THE CONSIDERED VIEW THAT THE MATTER SHOULD GO BACK TO THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH. I, TH EREFORE, DIRECT THE ASSESSING OFFICER TO VERIFY THE CASH AVAILA BILITY IN THE CASH BOOK OF MANISH TRADERS ON THE DATE OF SUCH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. IF THE ASSESSING OFFICER IS SATISFIED THAT THERE WAS SUFFICIE NT CASH SMT. KAVITA AGRAWAL ITA NO. 345/INMD/2014 11 BALANCE WITH MANISH TRADERS, THE ADDITION IN QUESTION SHOULD BE DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLO WED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 17 TH DECEMBER, 2015 SD/- (D.T. GARASIA) JUDICIAL MEMBER 17 DECEMBER, 2015 DN/-