NIRMAL PANWAR, Jaipur V. ITO, Jaipur

ITA 367/JPR/2011

• Counselvise Citation: 36723114 RSA 2011
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: G M MEHTA
• Keywords: Salary income
• Section: 68; 139

Judgement Text

1 ITA 367-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 367/JP/2011 ASSTT. YEAR : 2005-06. SHRI NIRMAL PANWAR, VS. THE INCOME-TAX OFFICER, C/O G. MEHTA & CO., WARD 3(3), PARAS, 127, HARI MARG, JAIPUR. CIVIL LINES, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.M. MEHTA RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 05.10.2011. DATE OF PRONOUNCEMENT : 21.10.2011. ORDER DATE OF ORDER : 21/10/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. THE EFFECTIVE GROUND IN THE APPEAL OF THE ASSESS EE IS AGAINST SUSTAINING THE ADDITION OF RS. 15,11,910/- MADE BY AO ON ACCOUNT O F UNEXPLAINED BANK DEPOSIT IN THE ACCOUNT OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT BASED ON AI R INFORMATION, THE CASE WAS TAKEN UP FOR SCRUTINY. NO ONE ATTENDED THE ASSESSMENT PRO CEEDINGS AND, THEREFORE, NO EXPLANATION WAS OFFERED ON CASH DEPOSITED IN THE BA NK ACCOUNT WITH IDBI BANK WHEREIN 2 RS. 15,61,800/- WERE FOUND DEPOSITED ON VARIOUS DAT ES. THE AO CONSIDERED THE SOURCE OF DEPOSITS AS UNDISCLOSED AND ACCORDING AN ADDITION W AS MADE UNDER SECTION 69A OF THE IT ACT. 4. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT ( A). IT WAS SUBMITTED THAT ASSESSEE AN OLD ASSESSEE AND HAS FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05 ALONG WITH COPY OF BALANCE SHEET. AS PER BALANCE SHEET FOR ASS ESSMENT YEAR 2004-05, THERE WAS A CASH IN HAND OF MORE THAN RS. 15,00,000/- AND OUT O F THE SAME, THE ASSESSEE HAD DEPOSITED THE AMOUNT IN THE BANK. THEREFORE, AO WAS NOT JUST IFIED IN TREATING THE AMOUNT OF BANK DEPOSIT AS UNEXPLAINED. AN AFFIDAVIT ALONG WITH BA LANCE SHEET AND CAPITAL ACCOUNT WERE ALSO FILED BEFORE LD. CIT (A) WHICH WERE SENT TO TH E AO FOR HIS REMAND REPORT. THE REMAND REPORT WAS RECEIVED AND A COPY OF THE SAME W AS GIVEN TO THE ASSESSEE TO FILE HIS COMMENTS. FOLLOWING COMMENTS WERE FILED BEFORE LD. CIT (A) ON BEHALF OF THE ASSESSEE :- THE AR IN HIS COMMENTS ON THE AOS REMAND REPORT STATED THAT THE APPELLANT IS WORKING AS SECRETARY F OR MAHATMA JYOTI RAO PHULE MAHILA MAHAVIDHYALAYA. HE HAS PRACTICALLY THE ONLY SOURCE OF SALARY. THE APPELLANT HAD CASH BALANCE OF RS. 15,11,710/- ON 31.3.04 WHICH IS APPEARING IN THE CASH BOOK MAIN TAINED BY HIM. THE REASON FOR KEEPING SUCH CASH IN HAND WAS THAT B OTH HUSBAND AND WIFE WANTED TO BUY SOME IMMOVABLE PROPERTY BUT PROPERTY COULD NOT BE PURCHASED. THE CASH BALANCE WAS DULY D ISCLOSED IN THE PERSONAL BALANCE SHEET FILED WITH THE RETURN OF INC OME FOR ASSESSMENT YEAR 2004-05 WHICH WAS ACCEPTED BY THE A O. THE AVAILABLE OPENING CASH BALANCE AND CURRENT YEAR SUR PLUS WERE DEPOSITED BY THE APPELLANT IN HIS BANK ACCOUNT. BOO KS OF ACCOUNTS ARE MAINTAINED AND, THEREFORE, AO IS NOT JUSTIFIED IN MAKING ADDITION. 3 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, THE LD. CIT (A) WAS NOT SATISFIED WITH THE EXPLANATION FILED BE FORE HIM. HOWEVER, HE WAS OF THE VIEW THAT ADDITION MADE UNDER SECTION 68 WAS NOT JUSTIFI ED. THE ADDITION SHOULD HAVE BEEN MADE UNDER SECTION 69A. THEREFORE, THE ADDITION MA DE BY AO WAS SUSTAINED BUT UNDER SECTION 69A INSTEAD OF SECTION 68 APPLIED BY THE AO . 6. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE TR IBUNAL. 7. CONTENTION RAISED BEFORE THE LOWER AUTHORITIES W ERE REITERATED. COPY OF WRITTEN SUBMISSIONS WAS FILED ALONG WITH VARIOUS OTHER DOCU MENTS AND RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05. RELIANCE WAS PLACED ON THE ORDER OF THE TRIBUNAL IN CASE OF ITO VS. JAGDEEP SINGH, HANUMANGARH JN DECIDED IN ITA NO . 11/JU/2007 VIDE ORDER DATED 3.12.2008, COPY OF THE SAME WAS ALSO FILED. 8. ON THE OTHER HAND, THE LD. D/R STRONGLY PLACED RELIANCE ON THE ORDERS OF THE AO AND LD. CIT (A). 9. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED. WE NOTED THAT RETURN OF INCOM E FOR ASSESSMENT YEAR 2004-05 I.E. IMMEDIATELY PRECEDING YEAR FROM THE PRESENT ASSESSM ENT YEAR I.E. 2005-06 WAS FILED IN THE MONTH OF JULY, 2004 WHICH WAS UNDER SECTION 139 (1). ALONG WITH RETURN OF INCOME, COPY OF BALANCE SHEET AS ON 31.3.2004 WAS ALSO ENCL OSED. COPY OF THE SAME IS PLACED IN THE PAPER BOOK AT PAGE 4. AS PER BALANCE SHEET AS ON 31.3.2004, THE CASH IN HAND WAS RS. 15,11,710/-. THE AMOUNT OF DEPOSIT IN THE YEAR UNDER CONSIDERATION IS OF RS. 15,61,800/-. THE SOURCE OF DEPOSIT OF RS. 15,11,71 0/- HAS TO BE TREATED AS EXPLAINED AS 4 THE SAME IS COMING FROM LAST YEAR. THE DEPARTMENT S CASE IS THAT ASSESSEE IS EARNING ONLY SALARY INCOME AND HE WAS NOT ABLE TO SAVE SUCH AMOU NT. THIS CONTENTION MAY BE CORRECT BUT CANNOT BE APPLIED FOR THE YEAR UNDER CONSIDERAT ION BECAUSE THE ASSESSEE HAS FILED A COPY OF BALANCE SHEET ALONG WITH RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05. IT IS ALSO A MATTER OF FACT THAT ASSESSEE IS ASSESSED TO TAX R EGULARLY AND FILING RETURN OF INCOME REGULARLY. IT IS ALSO A MATTER OF FACT THAT ASSESSE ES WIFE IS ALSO ASSESSED TO TAX FOR LAST SO MANY YEARS AND FILING RETURN REGULARLY. THEREFORE, IT CANNOT BE SAID THAT THESE PERSONS CANNOT SAVE AMOUNT FOR LAST SEVERAL YEARS INCOME. CASH FLOW STATEMENT WAS ALSO FILED BEFORE AO BUT IT WAS NOT ACCEPTED. WE ARE OF THE V IEW THAT CASH FLOW STATEMENT MAY BE CORRECT OR MAY NOT BE CORRECT, BUT THE FACT IS THAT ASSESSEE FILED BALANCE SHEET FOR ASSESSMENT YEAR 2004-05 ALONG WITH RETURN OF INCOME AND AS PER BALANCE SHEET, THERE WAS CASH IN HAND OF RS. 15,11,710/-. THEREFORE, TO THIS EXTENT THE CASH IN HAND AVAILABLE WITH THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS TO BE ADMITTED. IF ANY ADVERSE INFERENCE CAN BE DRAWN THAT CAN BE DRAWN IN THE ASSESSMENT YE AR 2004-05 AND NOT IN 2005-06. THEREFORE, THE AMOUNT OF RS. 15,11,710/- IS TREATED AS UNEXPLAINED. WE FURTHER NOTED THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASS ESSEE HAS SHOWN INCOME FROM SALARY OF RS. 3,12,000/- AND AFTER DEDUCING THE EXPENDITUR E ON HOUSEHOLD EXPENDITURE AND CONTRIBUTION TOWARDS PF AND LIC, THERE WAS SURPLUS OF MORE THAN RS. 1,00,000/-. THEREFORE, THE AMOUNT OF RS. 50,000/- OR ODD DEPOSI TED IN THE YEAR UNDER CONSIDERATION CANNOT BE TREATED AS DEPOSITED FROM UNDISCLOSED SOU RCES. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE DELETE THE ENTIRE ADDITION MADE B Y AO WHICH IS CONFIRMED BY LD. CIT (A). 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 5 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 .10.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- NIRMAL PANWAR, JAIPUR. THE ITO WARD 3(3), JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 367/JP/2011) BY ORDER, AR ITAT JAIPUR.