DHARAM VEER SINGH, Jaipur V. ITO, Jaipur

ITA 352/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1997 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 22-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: J K MOHTA
• Keywords: Salary income; Peak credit
• Section: 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 352/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 DHARAM VEER SINGH, PLOT NO. 61, GANESH NAGAR, SITALI PHATAK, BENAR ROAD, JAIPUR (RAJ). CUKE VS. INCOME TAX OFFICER, WARD 2(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BEWPS 8655 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI J.K. MOHTA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/06/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 25/07/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES F ROM THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 26/02/2016 FOR THE A .Y. 2007-08, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE UTILIZATION OF CASH WITHDRAWALS IN MAKING CASH DEPOSI TS IN THE BANK ACCOUNT AND CONFIRMED THE ADDITIONS MAD E BY THE A.O. SOLELY ON THE BASIS OF SURMISES. THE FAC TUAL POSITION THAT THE CASE WAS OPENED ON THE BASIS OF AI R INFORMATION AND PROCEEDINGS U/S 147 WERE INITIATED, BUT DUE TO ASSESSEES ILLITERACY IN TAXATION, AS BE LONGS ITA 352/JP/2016_ DHARAM VEER SINGH VS ITO 2 TO AGRICULTURIST FAMILY IN VILLAGE AND NOW WORKING WI TH RAJASTHAN POLICE (POSTED AT RAC), COULD NOT ATTENDED/REPRESENTED PROPERLY IS ALSO ONE OF THE MA IN REASONS OF SUCH ADVERSE ORDER. 2. THE LD. CIT(A) HAS ALSO ERRED IN ACCEPTING OPENING CASH BALANCE OF RS. 50,000/- INSTEAD OF RS. 3 LACS WITHOUT CONSIDERING THE FACT OF JOINT FAMILY AND AGRICULTURIST BACKGROUND OF THE ASSESSEE. 2. BOTH THE GROUNDS OF THE APPEAL ARE INTERLINKED A ND IN THIS REGARD, THE FACTS OF THE CASE ARE THAT AS PER AIR INFORMATI ON, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEPOSITED RS. 10,71,900/- IN HIS SAVINGS BANK ACCOUNT. NO RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR THE A.Y. 2007-08. THE ASSESSEE WAS ASKED TO GIVE TH E DETAILS OF DEPOSIT BUT NO COMPLIANCE WAS MADE. PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS INITIATED AND THE ASSESS ING OFFICER VIDE ORDER DATED 20/10/2014 ASSESSED THE TOTAL INCOME OF THE A SSESSEE AT RS. 13,61,900/-. 3. THE LD. CIT(A) HAS GIVEN PART RELIEF TO THE ASSESS EE BY HOLDING AS UNDER:- 3.2.1 DETERMINATION:. (I) DURING ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE AO THAT THE APPELLANT HAS DEPOSITED RS. 13,61,900/- IN CASH IN ITS BANK ACCOUNT WITH ICICI BANK. SINCE NO COMPLIANCE WAS MADE BY THE APP ELLANT, THE AO MADE ADDITION OF RS. 13,61,900/- TO THE INCOME OF THE AP PELLANT AND ASSESSED ITS ITA 352/JP/2016_ DHARAM VEER SINGH VS ITO 3 TOTAL INCOME AT THE SAME AMOUNT AS NO RETURN OF INC OME WAS FURNISHED BY THE APPELLANT IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT. (II) DURING APPELLATE PROCEEDINGS, IT WAS THE CONTE NTION OF THE APPELLANT THAT HE WAS HAVING OPENING CASH-IN-HAND OF RS. 3 LAC AS ON 01.04.2006 AND HE HAS WITHDRAWN A SUM OF RS. 17,50,650/- AND DEPOSITE D 13,70,900/- IN HIS BANK ACCOUNT AND THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT ON VARIOUS DATES IS THE OPENING CASH IN HAND OF RS 3 L AC AND THE AMOUNTS WITHDRAWN IN CASH FROM HIS BANK ACCOUNT. IT IS EVID ENT FROM THE STATEMENT OF FACTS THAT THE APPELLANT HAS INCURRED RS. 5,25,3 50/- IN THE CONSTRUCTION OF THE HOUSE, RS. 12,300/- ON ACCOUNT OF EMI AND RS . 24,000/- ON ACCOUNT OF HOUSE HOLD EXPENSES. THUS, OUT OF TOTAL WITHDRAW ALS OF RS. 17,50,650/- A SUM OF RS. 5,61,650/- WAS USED BY THE APPELLANT. FURTHER, THE CLAIM OF THE APPELLANT THAT IT WAS HAVING OPENING CASH BALAN CE OF RS. 3 LAC IS WITHOUT ANY BASIS AND CANNOT BE ACCEPTED IN TOTALIT Y. IF MAY BE MENTIONED THAT DURING THE YEAR UNDER CONSIDERATION, THE APPEL LANT HAS RECEIVED ONLY NET SALARY INCOME OF RS. 67,143/- WHICH WAS CREDITE D IN ITS BANK ACCOUNT AND AFTER MEETING ITS HOUSEHOLD EXPENSES AND EMI, I F WAS LEFT WITH VERY LITTLE MONEY. HOWEVER, LOOKING TO THE TOTALITY OF F ACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY LOOKING TO THE FACT THAT TH E APPELLANT IS WORKING WITH RAJASTHAN POLICE SINCE 1995, THE CASH IN HAND AS ON 01.04.20006 IS ESTIMATED AT RS. 50,000/-. (III) IT IS EVIDENT FROM THE BANK ACCOUNT OF THE AP PELLANT THAT THERE WERE FREQUENT WITHDRAWALS AND DEPOSITS IN THE ICICI BANK ACCOUNT. IT WAS THE CONTENTION OF THE APPELLANT THAT CASH WITHDRAWALS W ERE THE SOURCE OF CASH DEPOSITS IN THE ACCOUNT. IT MAY BE MENTIONED T HAT IN THE CASE OF SIND MEDICAL STORES VS. CIT (2015) . 117 DTR 0497 (RAJ.) AFTER CONSIDERING THE CASE OF CIT VS. ISHWARDAS MUTHA (2004) 270 ITR 597 (RAJ.), IT WAS HELD BY THE HON'BLE HIGH COURT OF RAJASTHAN THAT THE BENEFI T OF PEAK CREDIT THEORY CAN BE GIVEN WHEN ANY AMOUNT IS PAID, LATER WITHDRA WN FROM THE BANK, WOULD BE AVAILABLE FOR RECYCLING AND ROTATION, UNLE SS OTHERWISE ITA 352/JP/2016_ DHARAM VEER SINGH VS ITO 4 ESTABLISHED AS INVESTED ELSEWHERE BY THE REVENUE. I T WAS ALSO HELD THAT IF THE ASSESSING OFFICER COMES TO A FINDING THAT WITHD RAWN AMOUNT WAS USED OR SPENT BY THE ASSESSEE FOR ANY OTHER INVESTMENT O R EXPENDITURE THEN THE BENEFIT OF PEAK OF SUCH CREDIT, IN SUCH CIRCUMSTANC ES, MAY NOT BE AVAILABLE. (IV) IN THE INSTANT CASE UNDER CONSIDERATION, IT HA S ALREADY BEEN QUANTIFIED THAT THE APPELLANT HAS USED CASH WITHDRAWAL OF RS. 5,61,650/- FROM ITS BANK ACCOUNTS, THEREFORE, IN VIEW OF THE ABOVE REFE RRED DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF SIND MEDIC AL STORE VS. CIT (SUPRA), THE BENEFIT OF PEAK CREDIT THEORY COULD NOT BE ALLO WED TO THE APPELLANT. IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION OF R S. 13,20,900/- (13,70,900 - 50,000) IS HEREBY SUSTAINED AS UNEXPLAINED CASH D EPOSIT IN THE BANK ACCOUNT OF THE APPELLANT. (V) IN ITS REMAND REPORT, IT WAS STATED BY THE AO THAT THE SALARY INCOME OF RS. 1,08,810/- IS TO BE ADDED TO THE INCOME OF THE APPE LLANT AS THE APPELLANT HAS NEITHER FILED ANY RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION NOR ATTENDED THE ASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE, A NOTICE FOR ENHANCEMENT OF INCOME WAS ISSUED TO THE APPELLA NT ON 15.02.2016 U/S 251(2) OF THE ACT. IT WAS SUBMITTED BY THE APPELLAN T THAT ITS TAXABLE SALARY FOR THE YEAR UNDER CONSIDERATION WAS ONLY RS. 93,77 9/- AND IT CLAIMED DEDUCTION OF RS. 42,819/- THEREOF, HOWEVER, NO EVID ENCE WAS FURNISHED BY THE APPELLANT. (VI) IN VIEW OF THE ABOVE, THE INCOME OF THE APPELL ANT UNDER THE HEAD INCOME FROM SALARY' IS ASSESSED AT RS. 93,779/- WHICH IS T O BE ADDED TO THE TOTAL INCOME OF THE APPELLANT. HOWEVER, THE AO IS DIRECTE D TO ALLOW DEDUCTION OF RS. 42.819/- OR PART THEREOF IF THE APPELLANT FI LE ANY SATISFACTORY EVIDENCE THEREOF. I AM SATISFIED THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF HIS INCOME AND THUS PENALTY PROCEEDI NGS U/S 271 (1) (C) ARE INITIATED AND THE SHOW CAUSE NOTICE U/S 271 (1)(C) OF THE ACT IS BEING ISSUED SEPARATELY. ITA 352/JP/2016_ DHARAM VEER SINGH VS ITO 5 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS AS MADE BEFOR E THE LD. CIT(A). HE HAS SUBMITTED THAT THE ASSESSEE BELONGS TO AGRICULT URIST FAMILY. THE FAMILY IS ENGAGED IN AGRICULTURE ON THEIR INHERITED LAND A DMEASURING 15 BIGHAS AS WELL AS DAIRY FIRM. THE ASSESSEE JOINED RAJASTHAN PO LICE IN THE YEAR 1995. HE ALSO SUBMITTED THAT DURING THE YEAR UNDER CONSID ERATION, THE ASSESSEE HAD DEPOSITED RS. 13,70,900/- IN HIS SAVINGS BANK A CCOUNT WITH SIMULTANEOUS CASH WITHDRAWALS OF RS. 17,50,650/-. HE ALSO SUBMITTED THAT OUT OF SAID CASH WITHDRAWALS OF RS. 17,50,650/- AND WI TH OPENING CASH BALANCE OF RS. 3,00,000/-, THE ASSESSEE HAS UTILIZE D RS. 5,61,650/- TOWARDS HOUSE CONSTRUCTION, HOUSE HOLD EXPENSES AND EMIS. TH E BALANCE AMOUNT OF RS. 14,89,000/- WAS AVAILABLE FOR REDEPOSIT AND AS SUCH, RS. 13,70,900/- HAS BEEN UTILIZED IN CASH DEPOSIT WITH BANK. IT IS A LSO A FACT THAT THE ASSESSEE IS GOVT. EMPLOYEE SINCE 1995 AND HAVING LI MITED SOURCE OF INCOME AS SALARY , THE CASH IN HAND IS ESTIMATED BY LD. CIT(A) AT RS. 50,000/- ONLY. HOWEVER, THE OTHER PART OF THE ASSESS EES BACKGROUND BELONGS TO AGRICULTURIST FAMILY IS MORE IMPORTANT T O CONSIDER ON THIS ASPECT. THE ASSESSEE BELONGS TO AGRICULTURIST FAMILY CONSIST OF HIMSELF, FATHER, MOTHER AND BROTHER. THE FAMILY IS ENGAGED IN AGRICUL TURE ACTIVITIES ON THEIR INHERITED LAND SINCE LONG AS WELL ALSO MILKING FROM THEIR OWN COWS AND BUFFALOS, GENERATING AGRICULTURE INCOME. THEREFORE, THE OPENING CASH IN ITA 352/JP/2016_ DHARAM VEER SINGH VS ITO 6 HAND IN SUCH CASE IS VERY MUCH OBVIOUS. THEREFORE, H E PRAYED TO ALLOW THE APPEAL. 5. ON THE CONTRARY, THE LD SR. DR HAS VEHEMENTLY SU PPORTED THE ORDER OF THE LOWER AUTHORITIES. 6. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE, PERUS ED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE O RDERS OF THE LOWER AUTHORITIES. THE ASSESSEE HAS CLAIMED THAT HE HAS OP ENING BALANCE AT RS. 3.00 LACS BUT FROM PERUSAL OF THE BANK STATEMENT AV AILABLE IN THE PAPER BOOK, IT TRANSPIRES THAT THE IN ASSESSEES ACCOUNT NUMBER 001201538992 MAINTAINED WITH ICICI BANK MORADABAD, UTTAR PRADESH, THE OPENING BALANCE AS ON 01/05/2006 WAS RS. 98,906/-. HE HAS AL SO CLAIMED THAT HE BELONGS TO AGRICULTURIST FAMILY AND INHERITED 15 BI GHAS OF LAND, IN THIS REGARD, HE HAS FILED A CERTIFICATE ISSUED BY THE SA RPANCH OF GRAM PANCHAYAT LAMBI AHIR, BUHANA, JHUNJHUNU. FROM PERUSAL OF THE CERTIFICATE, IT TRANSPIRES THAT THE CERTIFICATE WAS ISSUED IN THE NA ME OF SHRI MAHAVIR PRASAD, SON OF SHRI RAMJILAL, IT WAS NOT IN THE NAME OF THE ASSESSEE HIMSELF. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS A GOVT. EMPLOYEE SINCE 1995 AND DURING THE YEAR UNDER CONSIDERATION, HE GOT RS. 67,143/- AS SALARY. THE ASSESSEE ALSO CLAIMED THAT THE ASSESS ING OFFICER HAD PASSED ASSESSMENT ORDER EX PARTE WITHOUT GIVING HIM PROPER AND EFFECTIVE ITA 352/JP/2016_ DHARAM VEER SINGH VS ITO 7 OPPORTUNITY OF HEARING, THEREFORE, THE INTEREST OF JUSTICE AND EQUITY, I RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER FOR FRESH ADJUDICATION AFTER GIVING PROPER AND EFFECTIVE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE AND DECIDE THE MATTER ON MERIT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 25/07/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25 TH JULY, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI DHARAM VEER SINGH, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD WARD 2(3), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 352/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR