ITO, New Delhi V. M/s. Vineeta Khanna, New Delhi

ITA 3502/DEL/2008

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6548 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 04-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 27-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: R P MALL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 3502/DEL./2008 (ASSESSMENT YEAR : 2005-06) INCOME TAX OFFICER, VS. MS. VINEETA KHANNA WARD 35(1), C/O M.L. PURI & CO. H-BLOCK, VIKAS BHAWAN 407, NEW DELHI HOUSE NEW DELHI 27, BARAKHAMBA ROAD, NEW DELHI 110001 (PAN:AFPPK6619H) (APPELLANT) (RESPONDENT) REVENUE BY : SHRI V.R. SONBHADRA, SR. DR ASSESSEE BY : SH. SALIL AGGARWAL, ADV. & SH. R. P. MALL. ADV. DATE OF HEARING : 04-02-2016 DATE OF ORDER : 01-03-2016 ORDER PER H.S. SIDHU, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF LD. CIT (APPEALS)-XXVII, NEW DELHI DATED 29.08.2008 FOR THE ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE AS UNDER :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF RS. 57,10 ,566/- MADE BY THE AO U/S. 68 OF THE I.T. ACT. ITA NO.3502/DEL./2008 2 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDEN CE DURING THE APPELLATE PROCEEDINGS WITHOUT FOLLOWING THE PROCEDURE AND PRINCIPLE AS PER RULE 46A OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED ON 30.8.2005 AT AN INCOME OF RS. 1,47,200/- AND T HE SAME WAS PROCESSED U/S. 143(1). SUBSEQUENTLY, THE CASE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, THE ASSESSME NT ORDER WAS PASSED ON 24.12.2007 U/S. 143(3)/144 OF THE INCOME TAX ACT, 1961, ASSESSING THE TOTAL INCOME OF RS. 58,57,766/- FOR T HE ASSESSMENT YEAR 2005-06, THEREBY MAKING ADDITIONS OF RS. 57,10,566/ - ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT. 3. AGAINST THE ABOVE ADDITION, ASSESSEE APPEALED B EFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 29.8.2008 HAS DELETED THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD. CI T(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. DR HAS ARGUED ON THE ISSUE OF RAISED IN GROUND NO. 2 REGARDING ADMISSION OF ADDITIONAL E VIDENCE FILED BEFORE THE LD. CIT(A) WITHOUT FOLLOWING THE PROCEDURE AND PRINCIPLES LAID DOWN UNDER RULE 46A OF THE INCOME TAX RULES, 1962. HE ALSO DRAW OUR ATTENTION TOWARDS THE IMPUGNED ORDER AND STATED TH AT THE LD. CIT(A) HAS NOT GIVEN OPPORTUNITY TO THE AO BEFORE RELYING UPON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. TO SUPPORT HIS CONT ENTION HE PLACED ITA NO.3502/DEL./2008 3 RELIANCE UPON THE DECISION RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MANISH BUILDWELL REPOR TED IN 204 TAXMANN VS. 106 (DEL.). HE REQUESTED THAT THE ISSUE IN DIS PUTE MAY BE SET ASIDE TO THE AO TO THOROUGHLY EXAMINE THE SAME AND DECID E IT ACCORDING TO LAW, AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSE SSEE FOR SUBSTANTIATING ITS CLAIM BEFORE THE AO. HOWEVER, ON THE MERIT OF THE CASE HE RELIED UPON THE ORDER OF THE AO AND THE AD DITION MADE BY THE AO MAY BE UPHELD. 6. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE STATED THAT AS REGARDS THE ARGUMENTS ADVANCED BY THE LD. DR ON T HE ADMISSION OF ADDITIONAL EVIDENCE BY THE LD. CIT(A) IS CONCERNED , HE STATED THAT THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. MANISH BUILDWELL REPORTED IN 204 TAXMANN VS. 106 (D EL.) IS NOT APPLICABLE IN THE PRESENT CASE. BECAUSE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LD. CIT(A) HAS ASKED THE AS SESSEE TO FURNISH THE ADDITIONAL EVIDENCE AND IN COMPLIANCE WITH THE SAME, ASSESSEE HAS SUBMITTED THE ADDITIONAL EVIDENCES AS REQUIRED BY T HE LD. CIT(A). THEREFORE, HE STATED THAT THERE IS NO VIOLATION OF THE PROVISIONS AND PRINCIPLES AS LAID DOWN UNDER RULE 46A OF THE INCOM E TAX RULES, 1962. HE ALSO DRAW OUR ATTENTION TO SECTION 250(4) OF T HE INCOME TAX, 1961 UNDER WHICH LD. CIT(A) HAS CALLED FOR THE ADDITION AL DOCUMENTS, WHICH IS PERMISSIBLE UNDER THE LAW, HENCE, THERE IS NO VI OLATION OF RULE 46A AT ALL. AS REGARDS THE MERITS OF THE CASE HE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THE SAME MAY BE UPHELD. ITA NO.3502/DEL./2008 4 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. AS REGARDS GROUND NO. 2 RELATING TO ADMISSION OF ADDI TIONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS IS CONCERNED, WE FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL CONTENTION THAT THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. MANISH BUILDWELL REPORTED IN 204 TAXMANN VS. 106 (DEL.) IS NOT APPLICABLE IN THE PRESENT CASE. BECAUSE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, LD. CIT(A) HAS ASKED THE ASSESSEE TO F URNISH THE ADDITIONAL EVIDENCE AND IN COMPLIANCE WITH THE SAME , ASSESSEE HAS SUBMITTED THE ADDITIONAL EVIDENCES AS REQUIRED BY T HE LD. CIT(A). THEREFORE, THERE IS NO VIOLATION OF THE PROVISIONS AND PRINCIPLES AS LAID DOWN UNDER RULE 46A OF THE INCOME TAX RULES, 1962. WE ALSO NOTE THAT LD. COUNSEL OF THE ASSESSEE ALSO DREW OUR ATT ENTION TO SECTION 250(4) OF THE INCOME TAX, 1961 UNDER WHICH LD. CIT (A) HAS CALLED FOR THE ADDITIONAL DOCUMENTS, WHICH IS PERMISSIBLE UND ER THE LAW, HENCE, THERE IS NO VIOLATION OF RULE 46A AT ALL. IN VIEW OF THE ABOVE, WE DISMISS THE GROUND NO. 2 RAISED BY THE REVENUE. 8. AS REGARDS THE GROUND NO. 1 RELATING TO DELETI ON OF ADDITION OF RS. 57,10,566/- IS CONCERNED, WE FIND THAT LD. CIT( A) HAS DELIBERATELY ADJUDICATED THE ISSUE IN DISPUTE VIDE PARA NOS. 6 T O 6.9 AT PAGE NO. 10 12 VIDE HIS IMPUGNED ORDER DATED 29.8.2008. FOR TH E SAKE OF CONVENIENCE, WE ARE REPRODUCING THE PARA NO. 6 TO 6 .9 OF THE IMPUGNED AS UNDER:- 6. DETERMINATION: ITA NO.3502/DEL./2008 5 THE SUBMISSIONS MADE BY THE APPELL+ANT HAVE BEEN CAREFULLY CONSIDERED IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE AND THE PROVISIONS OF LAW. IT IS OBSERVED THAT THE ASSESSING OFFICER HAS MADE THE ADDITIONS U/S 68 OF THE ACT ON ACCOUNT OF THE ENTIRE CASH AND CHEQUE TRANSACTIO NS MADE IN THE TWO BANK ACCOUNTS OF THE ASSESSEE IN THE ABS ENCE OF ANY DETAILS. THIS, HOWEVER, CANNOT BE TAKEN AS A SU FFICIENT GROUND FOR MAKING SUCH ADDITION IN THE ABSENCE OF A NY COGENT REASONS OR EVIDENCE TO THE CONTRARY BROUGHT ON RECORD. 6.1. DURING THE COURSE OF THE APPELLATE PROCEEDING S, THE APPELLANT WAS, THEREFORE, ASKED TO FURNISH HER EXPL ANATION IN REGARD TO THE NATURE AND SOURCES OF TRADE IN CASH/B Y CHEQUES IN HER AFORESAID TWO BANK ACCOUNTS ALONG WI TH DOCUMENTARY EVIDENCE IN SUPPORT THEREOF. THE APPELL ANT WAS ALSO ASKED TO SUBMIT THE CASH FLOW STATEMENT FOR TH E YEAR UNDER CONSIDERATION. THE APPELLANT HAS FURNISHED TH E RELEVANT DETAILS IN THIS REGARD WHICH HAVE BEEN PLA CED ON RECORD. 6.2. IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS AN UNMARRIED LADY STAYING WITH HER PARENTS WHO ARE SEN IOR CITIZENS. SHE IS REGULAR TAXPAYER. COPIES OF RETURN FILED FOR THE ASSESSMENT YEARS 2002-03, 2003-04 AND 2004-05 ITA NO.3502/DEL./2008 6 ALONGWITH COMPUTATION OF INCOME HAVE BEEN FURNISHED IN SUPPORT. 6.3. IT HAS BEEN SUBMITTED THAT THE RETURN OF INCO ME FOR ASSESSMENT YEAR 2005-06 WAS FILED ON 30.8.2005 DECL ARING AN INCOME OF RS. 1,47,200/-. THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT ON AN AMOUNT OF RS. 58,57, 766/- BY ADDING ALL THE CREDIT ENTRIES WHETHER MADE IN CA SH OR BY CHEQUE IN THE TWO BANK ACCOUNTS OF THE ASSESSEE REF ERRED ABOVE, WITHOUT CONSIDERING THE EXPLANATION FURNISHE D BY HER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND WITHOUT TAKING INTO ACCOUNT THE DEBIT ENTRIES IN TH E STATEMENT OF ACCOUNT OF THE BANKS. 6.4. IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS MAINTAINING PERSONAL BOOKS OF ACCOUNTS FOR HER DAY- TO-DAY ENTRIES. COPIES OF THE AFORESAID BANK ACCOUNTS MAIN TAINED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE ALONG WITH CO PIES OF BANK STATEMENTS OF BOTH THE BANKS GIVING PARTICULAR S OF EACH AND EVERY TRANSACTION MADE THEREIN AND COPY OF CASH BOOK HAVE BEEN FURNISHED WHICH HAVE BEEN PLACED ON RECOR D. THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE A LSO BEEN PRODUCED FOR PERUSAL DURING THE COURSE OF THE APPELLATE PROCEEDINGS. 6.5. AS REGARDS THE CHEQUE ENTRIES IN THE SAVINGS B ANK ALC NO. 935 WITH CANARA BANK, VASANT VIHAR BRANCH, IT H AS BEEN SUBMITTED THAT DURING THE YEAR UNDER CONSIDERA TION, ITA NO.3502/DEL./2008 7 THE ASSESSEE HAS MADE PURCHASE OF GOLD BY CHEQUE FR OM M/S KHANDELWAL & SONS, PART OF WHICH WAS SOLD TO M/ S UNIQUE GEMS AND PAYMENT RECEIVED BY CHEQUE. THE CORRESPONDING DEBIT AND CREDIT ENTRIES ACCORDINGLY APPEAR IN THE BANK ACCOUNT. COPIES OF SALE BILLS/PURCHASE VOU CHERS HAVE BEEN FURNISHED IN SUPPORT. SHE HAS ALSO DONE C ERTAIN TRANSACTIONS WITH MRS. MUKTA MALHOTRA AND MR. RAKES H KHANNA FOR WHICH CONFIRMATIONS HAVE BEEN FILED. FRO M THE PERUSAL OF THE BANK ACCOUNT, IT WILL BE FOUND THAT MOST OF THE PAYMENTS HAVE BEEN MADE FOR CONSTRUCTION PURPOSES. IT HAS BEEN SUBMITTED THAT THE ASSESSEE HAD PURCHASED LAND JOINTLY WITH HER FATHER SH. Y.N. KHANNA FOR A CONSI DERATION OF RS. 34,00,000/- (COPY OF THE REGISTRATION DEED ENCL OSED). COPY OF HOUSING LOAN ACCOUNT MAINTAINED WITH SYNDIC ATE BANK HAS ALSO BEEN FURNISHED. 6.6. AS REGARDS THE CHEQUE ENTRIES IN THE SAVINGS B ANK ACCOUNT NO. 76368 WITH SYNDICATE BANK, C-18, PASCHI MI MARG, NEW DELHI, FROM THE PERUSAL OF THE BANK ACCOU NT IT WILL BE FOUND THAT MOST OF THE CHEQUES HAVE BOUNCED. IT HAS BEEN SUBMITTED THAT THERE ARE TRANSACTIONS WITH MR. CHAN DER BHAN AND MR. R. K. KAPOOR. CONFIRMATIONS OF ACCOUNT S ALONGWITH PAN AND ASSESSMENT PARTICULARS HAVE BEEN FURNISHED. AS REGARDS MR. R.K. KAPOOR, HE IS AN NRI AND COPY OF H IS ITA NO.3502/DEL./2008 8 PASSPORT AND BANK STATEMENT MAINTAINED WITH SYNDICA TE BANK, VASANT VIHAR, NEW DELHI, HAVE ALSO BEEN FURNI SHED. 6.7. AS REGARDS THE CASH TRANSACTIONS, IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS MAINTAINING REGULAR CASHBOOK. COPY OF CASHBOOK GIVING THE CASH FLOW STATEMENT FOR THE YEA R UNDER CONSIDERATION HAS BEEN FURNISHED WHICH HAS BEEN PLA CED ON RECORD. THIS INCLUDES ALL THE CASH DEPOSITS AND WIT HDRAWALS MADE IN BOTH THE BANK ACCOUNTS AS WELL. 6.8. ON CAREFUL EXAMINATION OF THE DETAILS FURNISHE D BY THE APPELLANT AS ABOVE, IT IS, THUS, OBSERVED THAT THE APPELLANT HAS FURNISHED SATISFACTORY EXPLANATION IN REGARD TO THE NATURE AND SOURCE OF EACH AND EVERY DEPOSIT MADE IN CASH BY CHEQUE IN HER AFORESAID BANK ACCOUNTS. 6.9. IN VIEW OF THE ABOVE DISCUSSION, IT IS HEREBY HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING A DDITION ULS 68 OF THE ACT AS ABOVE. THE ADDITION OF RS. 57, 10,566/- (4,82,000 + 5,35,000 + 46,93,566) MADE ON THIS COU NT IS, ACCORDINGLY, HEREBY DELETED. 8.1 ON GOING THROUGH THE AFORESAID FINDING OF THE L D. CIT(A) ON THE ISSUE IN DISPUTE, WE ARE OF THE VIEW THAT CIT(A) HAS RIGHTLY DELETED THE ADDITION IN DISPUTE, BECAUSE THE ASSESSEE HAS FURNI SHED SATISFACTORY EXPLANATION IN REGARD TO THE NATURE AND SOURCE OF E ACH AND EVERY DEPOSIT MADE IN CASH / BY CHEQUE IN HER AFORESAID B ANK ACCOUNTS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER ITA NO.3502/DEL./2008 9 PASSED BY THE LD. CIT(A) ON THE ISSUE NO. 1, AND H ENCE, WE UPHOLD THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. THEREFORE, THE GROUND NO. 1 RAISED BY THE REVENUE STANDS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 01-03-2016. SD/- SD/- (L.P. SAHU) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : THE 01-3-2016 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.