Umesh Gupta, New Delhi V. ACIT, New Delhi

ITA 3507/DEL/2011

• Counselvise Citation: 350720114 RSA 2011
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 11-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: ANIL GOEL
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH H DELHI ] BEFORE MS. DIVA SINGH, JM AND SHRI K. D. RA NJAN, AM I. T. APPEAL NO. 3507 (DEL) OF 2011 ASSESSMENT YEAR : 2007-08. SHRI UMESH GUPTA, ASSTT. COMMISSIONER OF I NCOME-TAX, L 6, 2 ND FLOOR, VS. C I R C L E : 13 (1), K A L K A J I, N E W D E L H I. N E W D E L H I 110 019. PAN/GIR NO. ADDPG 0092N. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI ANIL GOEL, C. A.; DEPARTMENT BY : DR. B. R. R. KUMAR, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 07-08 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)-XVI, NEW DELHI. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS:- 1 THAT THE CIT (APPEALS)-XVI HAS WRONGLY UPH ELD THE ADDITIONS OF RS.5,00,000/- UNDER HEAD UNEXPLAINED INCOME UNDER SECTION 68 OF I. T. ACT, 1961 MADE BY THE ASSESSING OFFICER; 2. THE ORDER IS BAD IN LAW AND ON FACTS O F THE CASE. 3. THE ONLY ISSUE FOR OUR CONSIDERATION RELATES TO CONFIRMING THE ADDITION OF RS.5,00,000/- UNDER THE HEAD UN-EXPLAINED INCOME UNDER SECTION 68 OF THE ACT, 1961. THE FACTS OF THE CASE 2 I. T. APPEAL NO. 3507 (DEL) OF 2011 STATED IN BRIEF ARE THAT DURING THE COURSE OF ASSES SMENT PROCEEDINGS THE ASSESSING OFFICER VERIFIED THE BANK STATEMENTS FOR THE RELEVANT PERIOD. IT WA S NOTICED FROM THE BANK STATEMENT WITH INDIAN OVERSEAS BANK THAT THE ASSESSEE DEPOSITED RS.5,00,0 00 IN CASH ON 3/03/2007. TO A QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE VIDE LETTER DATED 18/11/2009 SUBMITTED THAT THE ASSESSEE HAD MADE CASH WITHDRAWAL OF RS.1,00,000/- ON 9/02/2007 FROM IOB VIDE CHEQUE NO.439674 AND RS.4,00,000/- ON 18/08/2006 FROM KOTAK BANK VIDE CH EQUE NO. 0019. IT WAS ALSO SUBMITTED THAT THE TOTAL CASH WITHDRAWAL OF RS.6,99,000/- WAS MADE DURING THE YEAR BESIDES OPENING CASH IN HAND AS DETAILED IN CASH FLOW STATEMENT SUBMITTED. IT WAS SUBMITTED THAT THE ASSESSEE HAD DEPOSITED CASH IN THE BANK ACCOUNT OUT OF AMOUNT AL READY WITHDRAWN FROM THE BANK IN ANTICIPATION OF SOME PAYMENTS TO BE MADE TO ONE PAR TY ON ACCOUNT OF SOME LAND DEAL BUT WAS DEPOSITED AGAIN IN THE BANK AS THE DEAL WAS NOT MAT URED. IT WAS ALSO SUBMITTED THAT THE ASSESSEE WAS NOT ENGAGED IN ANY BUSINESS ACTIVITY AND HAS NO OTHER SOURCE OF INCOME. ALL THE TRANSACTIONS OF MUTUAL FUND ETC. WERE DONE THROUGH PROPER BANKIN G CHANNELS AND THE CASH DEPOSITED IN THE BANK ACCOUNT WAS WITHDRAWN FROM THE BANK ITSELF EAR LIER. THIS CONTENTION OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THA T THE ASSESSEE HAD WITHDRAWN RS.4,00,000/- ON 18/08/2006 AND KEPT WITH HIM THE AMOUNT UPTO 6 MONT HS AND 17 DAYS; IN RESPECT OF WITHDRAWAL OF RS.1,00,000/- THE ASSESSEE HAD WITHDRAWN ON 9/02 /2007 AND KEPT WITH HIM FOR 22 DAYS AND THEREAFTER THE SAME MONEY WAS DEPOSITED IN THE BANK . THE ASSESSING OFFICER, IN VIEW OF THESE FACTS, REJECTED THE CONTENTION OF THE ASSESSEE AND TREATED THE AMOUNT OF RS.5,00,000/- AS UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT. 4. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED TH AT THE ASSESSEE HAS WITHDRAWN RS.6,99,000/- DURING THE YEAR OUT OF WHICH RS.5,00, 000/- WERE RE-DEPOSITED IN THE BANK. IT WAS ALSO STATED THAT THE ASSESSEE HAD SHOWN A SUM OF RS .13,87,000/- IN THE FUND FLOW STATEMENT AS DRAWINGS WHICH INCLUDED EXPENSES INCURRED IN CASH A T RS.1,99,000/- OUT OF CASH WITHDRAWN FROM BANK; EXPENSES THROUGH CREDIT CARD RS.1,36,416/- AN D BANK PAYMENTS FOR HOUSE-HOLD EXPENSE WHICH WERE SAID TO BE MORE THAN SUFFICIENT TO MAINT AIN THE FAMILY OF FOUR MEMBERS WITH NO CHILDREN AND NO SOCIAL FUNCTIONS/OCCASIONS DURING T HE YEAR UNDER CONSIDERATION. THE ASSESSEE PLACED RELIANCE ON SEVERAL DECISIONS INCLUDING THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF MS. AISHWARYA K. RAI VS. DCIT IN IT (SS) APPEAL NO. 677 (MUM.) OF 2003 [TM]. THE LD. 3 I. T. APPEAL NO. 3507 (DEL) OF 2011 CIT (APPEALS) AFTER CONSIDERING THE FACTS OF THE CA SE AND DECISIONS RELIED UPON BY THE ASSESSEE CONFIRMED THE ADDITION, BY OBSERVING AS UNDER :- 2.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT COMPANY AND THE FAC TS NARRATED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.5,00,000/- UNDER SECTION 68 OF THE ACT ON ACCOUNT OF CASH DEPOSIT OF THE AMO UNT IN THE BANK ACCOUNT OF THE APPELLANT WITH INDIAN OVERSEAS BANK ON 3 RD MARCH, 2007 BECAUSE HE WAS NOT SATISFIED WITH THE EXPLANATION OF THE APPELLANT THA T THIS CASH REPRESENTED THE VERY SAME CASH OF RS.1,00,000/- WHICH WAS WITHDRAWN BY T HE APPELLANT ON 9 TH FEBRUARY, 2007 FROM INDIAN OVERSEAS BANK AND RS.4,0 0,000/- WITHDRAWN FROM KOTAK BANK ON 18/08/2006. THE CASE LAWS RELIED UPON BY THE AR OF THE APPELLANT ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT C ASE. IN NONE OF THE CASES, THERE WAS A GAP OF AS MUCH AS SIX MONTHS BETWEEN THE DATE OF WITHDRAWAL OF CASH FROM THE BANK AND ITS DEPOSIT ON A SUBSEQUENT DATE / DAT E OF SEARCH. IN THE CASES OF CIT VS. KULWANT RAI, ITA NO.86/2006 (DEL) AND M/S. AISH WARYA K. RAI VS. DCIT IT (SS) A. NO. 677/MUM/2003, THE HONBLE COURTS WERE O F THE VIEW THAT SINCE CASH HAD BEEN WITHDRAWN FROM THE BANK BY THE ASSESSEES O N AN EARLIER DATE AND SINCE THE ASSESSING OFFICER HAD ACCEPTED THE CASH BOOKS M AINTAINED BY THOSE ASSESSEES, THERE WAS NO REASON FOR THE ASSESSING OFFICERS TO C ONTROVERT THE SUBMISSIONS OF THE ASSESSEES THAT THE DEPOSIT OF CASH AT A LATER DATE OR THE CASH FOUND DURING SEARCH AT THE LATER DATE WAS OUT OF THE CASH WITHDRAWN EAR LIER, ESPECIALLY SINCE THE CASH BOOK SHOWED THE AVAILABILITY OF CASH ON THE DATE OF DEPOSIT OF CASH / ON THE DATE OF SEARCH. HOWEVER, IN THE CASE OF THE APPELLANT, IT IS OBSERVED THAT VIDE LETTER DATED 4 TH NOVEMBER, 2009 IT HAS BEEN SUBMITTED BY HIM TO THE ASSESSING OFFICER THAT HE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND HAS NOT P REPARED ANY BALANCE SHEET OR PROFIT AND LOSS ACCOUNT FOR THE YEAR IN QUESTION. IT HAS BEEN FURTHER SUBMITTED IN THIS LETTER THAT IT IS DIFFICULT FOR THE APPELLANT TO DRAW HIS STATEMENT OF AFFAIRS AS ON 31 ST MARCH, 2007. WHEN THE APPELLANT HIMSELF IS STATIN G THAT HE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND IS NOT IN A POSITION TO FU RNISH HIS STATEMENT OF AFFAIRS AT 4 I. T. APPEAL NO. 3507 (DEL) OF 2011 THE END OF THE YEAR (OR ON ANY OTHER DATE), THE CAS H BOOK / CASH FLOW STATEMENT FURNISHED BY THE APPELLANT TO PROVE THE AVAILABILIT Y OF CASH ON 3 RD MARCH, 2007 (DATE OF DEPOSIT OF RS.5 LACS IN THE BANK ACCOUNT O F THE APPELLANT) CANNOT BE RELIED UPON BECAUSE THE CASH BOOK CANNOT BE PREPARED IN IS OLATION IN THE ABSENCE OF OTHER BOOKS OF ACCOUNTS. CLEARLY THIS CASH BOOK IS ONLY AN AFTER-THOUGHT OF THE APPELLANT TO EXPLAIN THE HEAVY CASH DEPOSIT IN HIS BANK ACCOUNT ON THE AFORE- MENTIONED DATE. THIS IS FURTHER CORROBORATED BY TH E FACT THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVIDE THE DETAILS OF THE PROPERT Y DEAL IN ANTICIPATION OF WHICH HE ALLEGEDLY WITHDREW RS.4,00,000/- IN AUGUST, 2006 AND RS.1,00,000/- IN FEBRUARY, 2007 AND WHEN THE DEAL DID NOT MATERIALIZ E, DEPOSITED THE AMOUNT IN MARCH, 2007. IT DOES NOT MAKE SENSE THAT ANYBODY W OULD KEEP RS.4 LACS AS CASH WITH HIM FOR MORE THAN SIX MONTHS ONLY TO RE-DEPOSI T IT IN THE BANK AT A LATER DATE AS IS BEING CLAIMED BY THE APPELLANTS AR. I, THER EFORE, ENDORSE THE FINDING OF THE ASSESSING OFFICER THAT THE SUM OF RS.5 LACS DEPOSIT ED IN CASH IN THE BANK ACCOUNT OF THE APPELLANT REPRESENTS HIS UNEXPLAINED INCOME UND ER SECTION 68 OF THE ACT. ACCORDINGLY, THESE GROUNDS OF APPEAL ARE DISMISSED. 5. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAD WITHDRAWN AMOUNT FOR THE PURPOSE OF PURCHASE OF PROPERTY. THE AMOUN T WAS GIVEN AS ADVANCE TO THE OWNER OF THE PROPERTY. SINCE THE DEAL DID NOT MATERIALIZE, THE A MOUNT WAS RECEIVED BACK AND DEPOSITED IN THE BANK ACCOUNT. THE LD. AR OF THE ASSESSEE PLACED RE LIANCE ON THE CASH BOOK FOR THE PERIOD 1 ST APRIL, 2006 TO 31 ST MARCH, 2007 PLACED AT PAGE NOS. 40 TO 42. FOR DETA ILS OF HOUSE-HOLD EXPENSES, HE PLACED RELIANCE ON WITHDRAWALS MADE BY DIFFERENT FAMILY MEMBERS PLACED AT PAGE NO. 120. HE, THEREFORE, SUBMITTED THAT THE AMOUNT WITHDRAWN FROM BANK WAS NOT UTILIZED FOR ANY OTHER HOUSE-HOLD EXPENSE. THE LD. AR OF THE ASSESSEE ALS O PLACED RELIANCE ON THE DECISION OF ITAT IN THE CASE OF MS. AISHWARYA K. RAI VS. DCIT (SUPRA). ON THE OTHER HAND, THE LD. SR. DR SUBMITTED THAT AMOUNT HAS ALLEGEDLY BEEN DEPOSITED AFTER EXPI RY OF MORE THAN SIX MONTHS. THERE IS NO EVIDENCE THAT THE AMOUNT WAS RECEIVED BACK FROM THE OWNER OF THE PROPERTY. AS REGARDS THE CONTENTION OF THE ASSESSEE THAT ENTRIES ARE EXHIBIT ED IN THE CASH BOOK, THE LD. SR. DR HAS SUBMITTED THAT IT IS NOT CASH BOOK, BUT FUND FLOW S TATEMENT WHICH SHOWS THE WITHDRAWALS AND 5 I. T. APPEAL NO. 3507 (DEL) OF 2011 DEPOSITS. FURTHER, THE CASE LAWS RELIED BY THE AS SESSEE ARE DISTINGUISHABLE ON FACTS. IN THE CASE OF MS. AISHWARYA K. RAI VS. DCIT (SUPRA) REGULAR BO OKS OF ACCOUNTS WERE MAINTAINED AND AVAILABILITY OF CASH WAS THERE IN THE BOOKS OF ACCO UNTS. HOWEVER, IN THE PRESENT CASE THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS. THE SO-C ALLED CASH BOOK WHICH IS A FUND FLOW STATEMENT AND HAS BEEN PREPARED TO TAKE ADVANTAGE O F DECISION OF ITAT IN THE CASE OF MS. AISHWARYA K. RAI VS. DCIT (SUPRA). THE ASSESSEE HA D NOT MAINTAINED REGULAR BOOKS OF ACCOUNTS. THEREFORE, THE DECISION OF THE ITAT IN T HE CASE OF MS. AISHWARYA K. RAI VS. DCIT (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE ASSES SEES CASE. SIMILARLY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KULWANT RAI DATED 13 TH FEBRUARY, 2007 IN ITA. NO. 86/2006 IS ALSO DISTINGUISHABLE ON FACTS AS IN THAT CASE CASH WAS FOUND IN THE BED ROOM OF THE ASSESSEE AND THE TIME LAG WAS OF ONLY TWO MONTHS WH EREAS IN THE CASE OF THE ASSESSEE IT IS MORE THAN SIX MONTHS. IN VIEW OF THE ABOVE THE LD. SR. DR SUPPORTED THE ORDER OF THE LD. CIT (APPEALS). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT (APPEALS) HAS RECORDED A FINDING OF FACT TH AT THE ASSESSEE VIDE LETTER DATED 4 TH NOVEMBER, 2009 HAS STATED BEFORE THE ASSESSING OFFICER THAT H E WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND HAD NOT PREPARED ANY BALANCE SHEET OR PROFIT AN D LOSS ACCOUNT FOR THE YEAR IN QUESTION. THIS FACT HAS NOT BEEN CONTROVERTED BY THE ASSESSEE. TH E SO-CALLED CASH BOOK RELIED UPON BY THE ASSESSEE IS NOT CASH BOOK, BUT SHOWS FEW ENTRIES. THE OPENING CASH BALANCE AS ON 1/04/2006 HAS BEEN SHOWN AT RS.71,215.67 FOR WHICH NO EXPLANATION WAS OFFERED BY THE ASSESSEE DURING THE COURSE OF HEARING BEFORE THIS TRIBUNAL. THE ASSESS EE IN HIS LETTER DATED 4 TH NOVEMBER, 2009 HAD ALSO SUBMITTED THAT IT WAS DIFFICULT FOR HIM TO DRA W HIS STATEMENT OF AFFAIRS AS ON 31 ST MARCH, 2007. IN VIEW OF THESE FACTS, THE CASH FLOW STATEM ENT PREPARED BY THE ASSESSEE CANNOT BE RELIED UPON. DURING THE COURSE OF HEARING, THE ASSESSEE C OULD NOT GIVE DETAILS OF THE PERSONS TO WHOM THE CASH OF RS.4,00,000/- WAS GIVEN IN THE MONTH OF AUGUST AFTER WITHDRAWING THE SAME FROM BANK. THERE IS NO EVIDENCE ON RECORD TO PROVE THE C ONTENTION OF THE ASSESSEE THAT THE LAND DEAL WAS NOT FINALIZED. FROM THESE FACTS IT HAS TO BE CO NCLUDED THAT THE ASSESSEE HAD NOT COME FORWARD WITH CLEAN HANDS TO DISCLOSED TRUE FACTS. THEREFOR E, IN THE ABSENCE OF ANY MATERIAL TO PROVE THAT CASH WITHDRAWN ON 18/08/2006 OF RS.4,00,000/- WAS R ECEIVED BACK BY THE ASSESSEE, WHICH WAS 6 I. T. APPEAL NO. 3507 (DEL) OF 2011 DEPOSITED IN THE BANK, CANNOT BE ACCEPTED. THE LD. CIT (APPEALS) HAD ALSO OBSERVED THAT THE ASSESSEE HAD NOT BEEN ABLE TO PROVIDE THE DETAILS O F THE PROPERTY DEAL IN ANTICIPATION OF WHICH HE ALLEGEDLY WITHDREW RS.4,00,000/- IN AUGUST, 2006 AN D RS.1,00,000/- IN FEBRUARY, 2007 AND WHEN THE DEAL DID NOT MATERIALIZE, DEPOSITED THE AMOUNT IN MARCH, 2007. IN THE ABSENCE OF ANY EVIDENCE TO PROVE THE CONTENTION OF THE ASSESSEE, I N OUR CONSIDERED OPINION, THE LD. CIT (A) HAS RIGHTLY COME TO THE CONCLUSION THAT THE AMOUNT DEPO SITED IN CASH IN THE BANK ACCOUNT REPRESENTS HIS UNEXPLAINED INCOME UNDER SECTION 68 OF THE ACT. THE DECISION RELIED UPON IN THE CASE OF MS. AISHWARYA K. RAI VS. DCIT (SUPRA) IS NOT APPLICABLE AS IN THAT CASE THE REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED BY THE ASSESSEE AND AVAILA BILITY OF CASH WAS EXHIBITED IN THE BOOKS OF ACCOUNTS. THE FACTS ARE ENTIRELY DIFFERENT FROM TH E FACTS OF MS. AISHWARYA K. RAI VS. DCIT (SUPRA). THEREFORE, THE DECISION OF THE ITAT IS OF NO HELP TO THE ASSESSEE. LIKEWISE THE DECISION IN THE CASE OF CIT VS. KULWANT RAI (SUPRA) IS NOT A PPLICABLE AS THE TIME GAP IS OF SIX MONTHS IN THE INSTANT CASE. THE ASSESSEE HAS ALLEGED TO HAVE GIVEN AMOUNT FOR PURCHASE OF PROPERTY, DETAILS OF WHICH HAVE NOT BEEN GIVE AND HENCE NO CREDENCE I S TO BE GIVEN. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT (A ) CONFIRMING THE ADDITION. WE UPHOLD THE ORDER OF CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 30 TH SEPTEMBER, 2011. SD/- SD/- [ DIVA SINGH ] [ K. D. R ANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : _30 TH SEPTEMBER, 2011 . *MEHTA * 7 I. T. APPEAL NO. 3507 (DEL) OF 2011 COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.