ACIT, New Delhi V. Shri Santosh Ravindra Salvi, New Delhi

ITA 3648/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65454 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 06-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR PRABHA KANT
• Assessee Lawyers: PRAKASH SINHA
• Keywords: Unexplained cash credit; Unexplained expenditure
• Section: 69C

Judgement Text

ITA NO. 3648/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3648/DEL/2011 A.Y. : 2008-09 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE- 42(1), ROOM NO. 621, MAYUR BHAVAN, CONNAUGHT PLACE, NEW DELHI VS. SHRI SANTOSH RAVINDRA SALVI, C-6, FLAT NO. 6285, VASANT KUNJ, NE WDELHI (PAN/GIR NO. : BFXPS4421J) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. PRAKASH SINHA, FCA DEPARTMENT BY : DR. PRABHA KANT, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXX, NEW DE LHI DATED 13.5.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN :- DELETING THE ADDITION OF ` 20,50,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 OF INCOME TAX ACT, 1961. ITA NO. 3648/DEL/2011 2 DELETING THE ADDITION OF ` 3,70,833/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S. 69C OF I.T. ACT, 1961. THE APPELLANT CRAVES THE RIGHT TO ALTER, AMEND ADD OR SUBSTITUTE THE GROUNDS OF APPEAL. 3. DURING THE YEAR IN THIS CASE ASSESSEE WAS AN EMPLO YEE OF GO AIRLINES INDIA PVT. LTD. AND WAS DRAWING HIS SALARY FROM GO AIRLINES INDIA PVT. LTD.. AS PER AIR INFORMATION ASSESSEE HAS DEPOSITED THE CASH OF ` 24,15,922/- IN THE ASSESSEES BANK ACCOUNTS ON VARIOUS DATES. THE AIR INFORMATION ALSO SHOWED THAT THE PAYMENT OF ` 2,39,000/- IN ABN AMRO CREDIT CARD AND PAYMENT OF ` 1,31,833/- IN STANDARD CHARTERED BANK CREDIT CARD. ASSESSEE WAS ASKED TO SUBMIT THE EXPLANATION IN THIS REGARD. HOWEVER, ASSESSEE FAIL ED TO SUBMIT THE NECESSARY EXPLANATION. UNDER THE CIRCUMSTANCES, AS SESSING OFFICER ADDED THE DEPOSIT IN THE BANK ACCOUNT AS UNEXPLAINE D CREDIT U/S. 68 OF THE I.T. ACT. ASSESSING OFFICER FURTHER TREATED THE CREDIT CARD PAYMENT AMOUNTING TO ` 3,70,833/- AS UNEXPLAINED EXP ENDITURE U/S. 69C OF THE I.T. ACT. 4. ASSESSEE SUBMITTED BEFORE THE LD. COMMISSIONER O F INCOME TAX (A) THAT A SUM OF ` 20,50,000/- WAS PAID BY THE AS SESSEE TO HIS FRIENDS AND COLLEAGUES THROUGH CHEQUE. OUT OF THE ABOVE WITHDRAWAL OF ` 10 LACS WAS FOR SELF USE HOWEVER THE SAME HAS BEEN R E-DEPOSITED INTO BANK ON VARIOUS DATES. A SUM OF ` 10,50,000/- GIVEN TO THE SAID PERSONS ON GIVEN DATES AND THE SAME HAS BEEN RETURN ED AND RE- DEPOSITED INTO BANK ON VARIOUS DATES. ASSESSEE FU RTHER GAVE DETAILS OF CASH DEPOSITS IN THE BANK OF ` 2415922/-. LD. COMMI SSIONER OF INCOME TAX (A) HAS CONSIDERED THE ABOVE, HE HELD THAT THE OUT OF THE DEPOSITS ITA NO. 3648/DEL/2011 3 OF ` 2415922/-, ASSESSEE HAS EXPLAINED THE AMOUNT DE POSITED AMOUNTING TO ` 20,50,000/-. FURTHER THE BALANCE AM OUNT OF ` 3,65,922/- WAS SURRENDERED /ADDED TO THE ASSESSEES INCOME. 4.1 AS REGARDS THE CREDIT CARD PAYMENT, ASSESSEE SUBMITTED THAT CREDIT CARDS USED BY THE ASSESSEE WAS GENERALLY FOR HIS HOUSEHOLD EXPENSES, BOOKING OF TRAVEL TICKETS AND OTHER MISC. EXPENSES. THE OUTSTANDING BALANCE OF THE CREDIT CARD IS MET BY TH E ASSESSEE THROUGH HIS SALARY ACCOUNT WHICH WAS ALSO CONFIRMED BY THE GIVEN BANK STATEMENT. 4.2 LD. COMMISSIONER OF INCOME TAX (A) FINALLY CONCL UDED AS UNDER:- I HAVE CONSIDERED THE ORDER OF THE ASSESSING OFFIC ER, SUBMISSIONS OF THE APPELLANT AND ALSO THE REMAND REPORT OF THE ASSESSING OFFICER. THE LD. AUTHORISE D REPRESENTATIVE SH. SACHIN SINHA, CA APPEARED FOR HEARING WITH WRITTEN SUBMISSIONS AND BANK STATEMENT. HE EXPLAINED THAT THERE WAS WITHDRAWAL OF CASH FROM APPELLANTS BANK ACCOUNT TO THE EXTENT OF ` 20,50,000/- WHICH WAS PAID TO FRIENDS / SELF AND LA TER THIS AMOUNT WAS ALSO DEPOSITED IN BANK ACCOUNT IN THE FORM OF CASH. THE ASSESSING OFFICER DID NOT L OOK INTO THE EXPLANATION GIVEN BY A.R. FROM HIS BANK ACCOUNTS EITHER IN SCRUTINY PROCEEDING OR REMAND PROCEEDINGS. WHEN APPELLANT SUBMIT SOMETHING, IT SHOULD BE PROPERLY VERIFIED BY THE ASSESSING OFFICE R AND FURTHER GENUINENESS / INVESTIGATION MAY BE MADE INDEPENDENTLY. WE SHOULD NOT SUMMARILY REJECT LD. AUTHORISED REPRESENTATIVES EXPLANATION AT REMAND ITA NO. 3648/DEL/2011 4 STAGE. WHEN THE APPELLANT IS PAYING TAXES REGU LARLY IT SHOULD BE SCRUTINIZED WITH CARE SO THAT OUR ADDI TIONS STAND TEST OF APPEALS. THE BANK ACCOUNT (COMPUTERIZED) SHOWS THE NAME OF PERSONS TO WHOM CHEQUES ARE GIVEN BY APPELLANT. IN SALARY CASES, FACT AND EVIDENCE BASED ASSESSMENTS SHOULD BE MADE BY ASSESSING OFFICER. THERE ARE SOME CASH DEPOSITS I N PREVIOUS AND NEXT YEAR, HOWEVER THE APPELLANT AGRE ED FINALLY SURRENDERS INCOME OF ` 3,65,922/- AND I MADE ADDITION OF ` (24,15,922 - ` 20,50,000) = ` 3,65,9 22 TO THE RETURNED INCOME OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSIT. IN RESPECT OF CREDIT CARD PAYMENTS OF ` 3,70,833/- U/S. 69C, THE EXPLANATION OF THE ASSESSE E/ A.R. IS FOUND TO BE SATISFACTORY, HENCE NO ADDITION IS REQUIRED ON THIS ACCOUNT. THE ASSESSING OFFICER IS DIRECTED TO GIVE THE RELI EF AMOUNTING TO ` 20,50,000/- AND THE AMOUNT OF ` 3,65,922/- IS UPHELD. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT NO EXPLANATION WHATSOEVER REGARDING THE GENUINENESS / CREDITWORTH INESS AND IDENTITY HAS BEEN GIVEN REGARDING THE PERSONS TO WHOM THE AS SESSEE HAS CLAIMED TO GIVEN ` 20,50,000/-. HE SUBMITTED THAT A SSESSEE HAS DEPOSITED THE SUM WHICH WAS BELOW ` 50,000/- ON VARI OUS DATES IN THE BANK A/C AMOUNTING TO ` 24,15,922/-. LD. DEPARTMENTA L REPRESENTATIVE ITA NO. 3648/DEL/2011 5 CLAIMED THAT THE EXPLANATION WAS GIVEN BY THE ASSESS EE WAS NOT COGENT. HENCE, THIS ADDITION WAS LIABLE TO BE SU STAINED. 6.1 AS REGARDS THE PAYMENT TO THE CREDIT CARD, THE L D. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN THE ABSENCE OF THE RELEVANT DETAILS, THE ADDITION ON THIS ACCOUNT ALSO TO BE SUSTAINED. 6.2 LD. COUNSEL OF THE ASSESSEE ON THE OTHER HAND S UBMITTED THAT THE ADDITION ON ACCOUNT OF SECTION 68 IS NOT TENABLE. HE SUBMITTED THAT ASSESSEE IS A SALARIED EMPLOYEE AND IS NOT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNTS. HE FURTHER CLAIMED THAT THE AMOU NT SHOWN IN THE BANK ACCOUNT CANNOT BE SAID TO BE BOOKS OF ACCOUNTS OF THE ASSESSEE. HENCE, THE ADDITION U/S. 68 WAS NOT TENABLE. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT LD. COUNSEL OF THE ASSESSEE HAS ARGUED BEFORE US THE CONTENTION WHICH WAS NOT AT ALL GIVEN BEFO RE THE AUTHORITIES BELOW. THE CLAIM THAT ADDITION U/S. 68 IS NOT PERMI SSIBLE IN THIS CASE AS ASSESSEE WAS NOT REQUIRED TO MAINTAIN BOOKS OF AC COUNTS, WAS NOT MADE BEFORE THE AUTHORITIES BELOW. MOREOVER, WE FIN D THAT ASSESSING OFFICER SHOULD BE GIVEN PROPER OPPORTUNITY TO EXAMI NE THE VARIOUS DETAILS AND SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (A). ASSESSEE HAS NOT GI VEN ANY DETAIL ITA NO. 3648/DEL/2011 6 BEFORE THE ASSESSING OFFICER. THE DETAILS AND OTHE R SUBMISSION WERE GIVEN ONLY IN THE APPELLATE PROCEEDINGS. ACCORDI NGLY, IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE FILE TO THE AS SESSING OFFICER TO CONSIDER THE SUBMISSIONS AND DETAILS FILED BEFORE T HE LD. COMMISSIONER OF INCOME TAX (A) AND DECIDE THE ISSUE AFRESH. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/9/2012. SD/- SD/- [ [[ [I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 14/9/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES