ITO, New Delhi V. Sh. Ashok Kumar Gupta, New Delhi

ITA 3569/DEL/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9947 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Additional evidence; Corroborative evidences
• Section: 143(3); 69

Judgement Text

DELHI BENCH A : NEW DELHI BEFORE SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO . 3569 /DEL/2013 (ASSESSMENT YEAR: 2009 - 10 ) ITO, WARD - 31(2), NEW DELHI VS. SH. A SHOK KUMAR GUPTA, S/O LATE SHRI GANGA RAM, K - 37, ANDHARIA MAUR, P.O. MEHRAULI, NEW DELHI, (APPELLANT) (RESPONDENT) DATE OF HEARING 18.03.2015 DATE OF PRONOUNCEMENT .04. 2015 O R D E R PER A. T. VARKEY, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 0 1 . 0 3 .201 3 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXVI, NEW DELHI PERTAINING TO ASSESSMENT YEAR 200 9 - 10 , ON THE FOLLOWING GROUNDS: - 1. THE CIT(A) HAS ERRED IN FACTS AND CIRCUMSTANCES BY DELETING THE ADDITION OF RS. 42,89,500/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN A SITUATION WHEN ASSESSEE COULD NOT GIVE ANY SUPPORTING EVIDENCE FOR SUCH CASH DEPOSITS DURING THE ASSESSMENT PROCEEDINGS . 2. THE CIT(A) HAS ERRED IN LAW BY ACCEPTING THE PLEA OF ASSESSEE REGARDING SOURCE OF CASH OF RS. 5,62,430/ - AS SALE CONSIDERATION OF VARIOUS ITEMS WHEREAS ASSESSEE HIMSELF STATED THE SAME AS GIFT FOR WHICH NO SUPPORTING EVIDENCE COULD BE FURNISHED BY HI M DUR ING THE ASSESSMENT PROCEEDINGS. 3 . THE CIT(A) HAS ERRED IN LAW BY ACCEPTING ADDITIONAL EVIDENCES DURING THE COURSE OF APPELLATE PROCEEDINGS AS: - A) THE ASSESSEE & CIT(A) HAVE NOT MENTIONED ANY CONDITION U/S 46A(1) OF 1. T. RULES, 1962, ON THE BASIS OF WHICH HE HAD PRODUCED THE ADDITIONAL EVIDENCE BEFORE THE CIT(A). B) THE ORDER PASSED BY THE CIT(A) DID NOT COMPLY WITH PROVISION OF RULE 46A(2) AS THE CIT(A) HAD NOT RECORDED IN WRITING THE REASONS ADMISSION OF ADDITIONAL EVIDENCE IN THE ORDER. APPELLANT BY : Y KAKKAR, DR RESPONDENT BY : SH. ASHOK KUMAR GUPTA PAGE 2 OF 4 C) THE CIT(A) HAD PASSED THE ORDER VIOLATING THE RULE 46A(3) AS THE CIT(A) HAD NOT GIVEN ANY REASONABLE OPPORTUNITY TO THE AO: - I) TO EXAMINE THE EVIDENCE OR DOCUMENT PRODUCE D BY THE APPELLANT OR II) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVID ENCE PRODUCED BY THE APPELLANT. 3 . FIRST OF ALL, WE WOUL D LIKE TO ADJUDICATE GROUND NO.3 OF THE REVENUES APPEAL AS TO NON - COMPLIANCE OF RULE 46A OF THE INCOME TAX RULES, 1962 (HEREIN AFTER THE RULES) BY THE LD CIT(A) DURING APPELLATE PROCEEDING BEFORE ADMITTING NEW EVIDENCES. 4. THE FACTS IN BRIEF AS NOTED BY THE LD CIT(A) ARE THAT THE ASS ESSEE IS AN INDIVIDUAL , AND HAD FILED HIS RETURN OF INCOME ON 29.3.2010 DECLARING A TOTAL INCOME OF RS. 3,96,672/ - . THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) AND THEREAFTER WAS SELECTED FOR SCRUTINY THROUGH C ASS. SUBSEQUENTLY, FURTHER NOTICES U/S. 143(2) WERE ISSUED AND SERVED UPON THE ASSESSEE . IN RESPONSE THERETO, THE ASSESSEES COUNSEL ATTENDED THE PROCEEDINGS AND THE ASSESSMENT WAS COMPLETED IN TERMS OF ORDER U/S. 143(3) AT AN INCOME OF RS. 46,86,172/ - AS AGAINST THE RETURNED INCOME OF RS. 3,96,672/ - WHEREIN AN ADDITION OF RS. 42,89,500/ - WAS MADE BY THE ASSESSING OFFICER U/S. 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE ASSESSEES BANK ACCOUNT MAINTAINED WITH AXIS BAN K . 5 . AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER 0 1. 0 3.2013 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE . 6 . NOW THE REVENUE IS AGGRIEVED AGAINST THE IMPUGNED ORDER DATED 1 . 3 .20 1 3 AND FILED THE PRESENT APPEAL BEF ORE US . 7 . AT THE TIME OF HEARING LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL . 8 . ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE SAME MAY BE UPHELD. PAGE 3 OF 4 9 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORD S AVAILABLE WITH US . WE FIND THAT THE LD. CIT(A) HAS ADJUDI CATED THE ISSUE IN DISPUTE AS UNDER: - 7. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO PERUSED THE RELEVANT BANK STATEMENTS FILED BY THE APPELLANT DURING THE COURSE OF APPELLATE PR OC EEDINGS. THE ASSESSING OFFI CER HAD MADE THE IMPUGNED ADDITION ON THE GROUND THAT THE APPELLANT DID NOT FILE ANY SUPPORTING DOCUMENTARY EVIDENCE PERTAINING TO THE SOURCE OF THESE DEPOSITS AMOUNTING TO RS.30,94,500/ - AND RS.11 ,95,000/ - . ON PERUSAL OF THE DETAILS FURNISHED BY THE APPE LLANT, I FIND THAT THE MAJOR PORTION OF THE CASH DEPOSITED WAS OUT OF THE CASH WITHDRAWALS MADE FROM THE BANK ACCOUNT. THE AR OF THE APPELLANT SUBMITTED THAT THE CASH WITHDRAWALS WERE BEING MADE FOR SOME PURPOSE AND BECAUSE OF THEIR NON - UTILIZATION, THE SA ME WERE RE - DEPOSITED IN THE BANK ACCOUNT. THE ASSESSING OFFICER HAD NOT DISPUTED THE CASH WITHDRAWAL MADE BY THE APPELLANT. ON THE OTHER HAND, PERUSING THE BANK STATEMENT, THE APPELLANT WAS ABLE TO PROVE THAT THE SOURCE OF DEPOSITS WERE OUT OF WITHDRAWAL. WITH REGARD TO THE SOURCE OF GIFT OF RS.5,62,430/ - . IT HAS BEEN EXPLAINED BY THE AR OF THE APPELLANT THAT THIS AMOUNT WAS FROM THE SALE CONSIDERATION RECEIVED BY HIM ON SALE OF VARIOUS ITEMS, WHICH WAS EARLIER INADVERTENTLY AND WRONGLY EXPLAINED AS RECEIPT OF GIFT. THE AR OF THE APPELLANT FILED BEFORE ME THE COPIES OF INVOICES IN RESPECT OF THE SALE OF CERTAIN ITEMS ON ACCOUNT OF WHICH HE HAD RECEIVED A CASH OF RS.5,62,430/ - , WHICH WAS DEPOSITED IN THIS BANK ACCOUNT. THEREFORE, CONSIDERING THE FACTS OF THE CASE, I HOLD THAT THE ASSESSING OFFICER HAD NOT MADE OUT ANY CASE FOR MAKING THE IMPUGNED ADDITION. ACCORDINGLY, SINCE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT STANDS EXPLAINED, THE ADDITION OF RS.42,89,500/ - MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. 10 . FROM THE ABOVE, WE FIND THAT THE ESSENCE OF THE CLAIM OF THE ASSESSEE IS THAT DEPOSITS ARE OUT OF THE WITHDRAWALS AND THUS THERE IS A NEXUS BETWEEN THE SAID WITHDRAWAL S AND DEPOSIT S. APART FROM THE ABOVE, THE LD CIT(A) HAS HELD THAT SUM OF RS.5,62,430/ - REPRESENTED SALE OF CERTAIN ITEMS WHICH WERE STATED EARLIER BEFORE THE AO INADVERTENTLY AS GIFTS. THE INVOICE IN SUPPORT OF THE SALE OF THE GOODS ON ACCOUNT OF WHICH HE HAD RECEIVED RS.5,62,430/ - WAS PLACED BEFORE THE LD CIT(A) FOR THE FIRST TIME DURING THE APPELLATE PROCEEDINGS. WE FIND THAT THIS EVIDENCE HAS NOT BEEN FORWARDED TO THE AO FOR HIS EXAMINATION IN TERMS OF RULE 46A. AS SUCH WE FIND FORCE IN PAGE 4 OF 4 THE CONTENTION OF THE LD DR TH AT THE LD CIT(A) SHOULD NOT HAVE ADMITTED AND ACCEPTED THE ADDITIONAL EVIDENCE WITHOUT FOLLOWING THE PROCEDURE PRESCRIBED IN RULE 46A . THE ACTION OF THE LD CIT(A) TO ADMIT EVIDENCE WITHOUT THE NEW EVIDENCE FURNISHED BEFORE HIM FOR THE FIRST TIME BEING NOT SENT TO AO, FOR HIS REMAND REPORT, CANNOT BE COUNTENANCED ; AND BEFORE ADMITTING NEW EVIDENCE THE FIRST APPELLATE AUTHORITY OUGHT TO HAVE FOLLOWED THE PROCEDURE AS MANDATED UNDER RULE 46A OF THE RULES AND WE ARE THEREFORE LEFT WITH NO OTHER ALTERNATIVE B UT TO RESTORE THE MATTER BACK TO THE FILE OF AO FOR FRESH ADJUDICATION. 11 . IN T HE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE SET - ASIDE THE ORDER OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE AND REMIT BACK THE ISSUES IN DISPUTE TO THE FILE OF THE ASSESSING OFFICER, WITH THE DIRECTION TO CONSIDER THE SAME AFRESH ALONG WITH THE EVIDENCE PRODUCED BEFORE THE LD CIT(A) . NEEDLESS TO SAY THAT AO BEFORE PASSING THE ORDER AFRESH SHALL PROVIDE ADEQUATE O PPORTUNITY TO THE ASSESSEE . 12 . IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN C OURT ON 1 0 . 04 . 20 1 5 . - S D / - - S D / - ( S.V. MEHROTRA) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 0 / 04 /2015 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI