Dy.Commissioner of Income Tax, Lucknow V. Shri Pawan Agarwal, Lucknow

ITA 374/LKW/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9124 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K DEY
• Assessee Lawyers: K R RASTOGI
• Keywords: Corroborative evidences; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.374/LKW/2013 ASSESSMENT YEAR:2009-10 DY. CIT RANGE 2 LUCKNOW V. SHRI. PAWAN AGARWAL 8/5, VIKRAMADITYA MARG LUCKNOW TAN/PAN:ADTPA1376M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. P. K. DEY, D.R. RESPONDENT BY: SHRI. K. R. RASTOGI, C.A. DATE OF HEARING: 12 01 2015 DATE OF PRONOUNCEMENT: 23 01 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.25.75 LAKHS ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS MAKING CASH WITHDRAWALS WITHOUT ANY REASONS FROM HIS BANK ACCOUNT WHEN HE ALREADY HAD SUFFICIENT CASH BALANCE IN HIS HANDS. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT FROM THE AIR AND CIB INFORMATION GENERATED FROM THE DEPARTMENTAL NETWORK, IT WAS NOTICED THAT A CASH OF RS.25.75 LAKHS WERE DEPOSITED IN CITI BANK AND STANDARD CHARTERED BANK. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS AND IN RESPONSE THERETO, IT WAS STATED THAT THE DEPOSITS WERE MADE OUT OF PERSONAL SAVINGS, RECEIPTS AND WITHDRAWALS FROM THE BANK :- 2 -: ACCOUNT. BEING NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE A.O. HAS MADE AN ADDITION OF RS.2575 LAKHS AS UNEXPLAINED INCOME OF THE ASSESSEE. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND THE ASSESSEE HAS REITERATED ITS CONTENTIONS. THE ASSESSEE HAS EXPLAINED THE SOURCE OF DEPOSITS FROM HIS CASH FLOW STATEMENT TO DEMONSTRATE THAT AT EVERY POINT OF TIME WHENEVER CASH WAS DEPOSITED, THE ASSESSEE WAS HAVING SUFFICIENT BALANCE. THE DETAILED CASH FLOW STATEMENT WAS EXAMINED BY THE LD. CIT(A) AND BEING CONVINCED WITH IT, THE LD. CIT(A) HAS DELETED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER:- 5. I HAVE CONSIDERED THE ASSESSMENT ORDER, SUBMISSIONS MADE BY THE APPELLANT, BANK STATEMENTS AND CASH FLOW STATEMENT SUBMITTED BY THE APPELLANT. I FIND THAT THE CASH FLOW STATEMENT PROPERLY EXPLAINS THE SOURCES OF CASH DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSEE AT CITIBANK AND STANDARD CHARTERED BANK. FROM THE CASH FLOW STATEMENT SUBMITTED BY THE APPELLANT, THE OPENING BALANCE, CASH INFLOW, CASH OUT FLOW AND CLOSING BALANCE ON THE DAY WHEN THE IMPUGNED CASH DEPOSITS HAVE BEEN MADE HAVE BEEN CULLED OUT, WHICH ARE AS FOLLOWS: DATE OPENING BALANCE CASH INFLOW CASH OUT FLOW ON ACCOUNT OF ALLEGED UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT CLOSING BALANCE 02.04.2008 1,00,000 75,000 70,000 1,05,000 15.04.2008 2,07,500 40,000+20,000 1,47,500 28.07.2008 6,84,145 1,00,000+25,000 5,59,145 11.08.2008 8,99,293 20,000 15,000 9,04,293 12.08.2008 9,04,293 ... 50,000 8,54,293 29.08.2008 14,39,293 ... 1,50,000 12,89,293 :- 3 -: 10.09.2008 11,49,293 4,50,000 2,50,000+2,50,000 +25,000 10,74,293 17.09.2008 X: 9,04,293 . 6,50,000 2,54,293 06.10.2008 10,49,293 ... 3,50,000 6,99,293 27.10.2008 9,13,893 ... 3,00,000 6,13,893 11.09.2008 10,74,293 . 2,50,000 8,24,293 UNDER LINED AMOUNTS REPRESENT THE UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT. THE ABOVE STATEMENT CLEARLY REFLECTS THAT THE ASSESSEE HAD SUFFICIENT CASH IN HAND TO DEPOSIT THE SAME IN THE BANK. I ALSO FIND THAT EVEN AFTER INCORPORATING THE HOUSE HOLD WITHDRAWALS THERE IS ALWAYS POSITIVE CASH BALANCE IN CASH FLOW STATEMENT. I ALSO FIND IT IMPLAUSIBLE THAT ONLY THE DEPOSITS MENTIONED IN AIR INFORMATION HAVE BEEN ADDED BY THE AO WHERE AS THERE ARE A NUMBER OF OTHER CASH DEPOSITS IN THE BANK ACCOUNTS WHICH HAVE BEEN TREATED AS EXPLAINED ON THE BASIS OF THE SAME CASH FLOW STATEMENT. I ALSO AGREE WITH THE APPELLANT THAT THE ONUS TO PROVE THE SOURCE OF THE MONEY DEPOSITED HAS BEEN FULLY DISCHARGED BY THE AO THROUGH SUBMISSION OF CASH INFLOW AND OUTFLOW STATEMENT AS AVAILABILITY OF CASH IS CLEARLY SHOWN IN STATEMENT. THE NEXUS BETWEEN THE CASH WITHDRAWN AND DEPOSITS IN THE BANK HAS ALSO BEEN WELL ESTABLISHED BY THE APPELLANT AS THE ENTRIES OF WITHDRAWALS AND DEPOSITS IN THE BANK BOTH STAND RECORDED IN THE CASH FLOW STATEMENT AND AVAILABILITY OF THE FUNDS WITH THE ASSESSEE IS SUFFICIENT TO MEET THE OUTFLOW OF MONEY DEPOSITED IN THE BANK ACCOUNT. I ALSO FAIL TO UNDERSTAND WHAT TYPE OF CONTEMPORANEOUS OR CORROBORATIVE EVIDENCES THE AO WANTED THE APPELLANT TO FURNISH. IN FACT, ONCE THE APPELLANT HAS SUBMITTED A PROPER CASH FLOW STATEMENT THE ONUS SHIFTED UPON AO TO PINPOINT DEFECTS OR MISTAKES ON THE BASIS OF WHICH HE HAS REJECTED SUCH STATEMENT. IN FACT, IN THE CASE OF DHAKESHWARI COTTON MILLS LTD. V. CIT, 26 ITR 775 (SC), THE HON'BLE APEX COURT HAS LAID DOWN THAT AN ITO IS ENTITLED TO ACT ON MATERIAL WHICH MAY NOT BE ACCEPTED AS :- 4 -: EVIDENCE IN A COURT OF LAW, BUT THE ITO IS NOT ENTITLED TO MAKE A PURE GUESS AND MAKE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. THERE MUST BE SOMETHING MORE THAN BARE SUSPICION TO SUPPORT THE ASSESSMENT. IN VIEW OF THE ABOVE DISCUSSION I HOLD THAT THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF CONJECTURES AND SURMISES, WITHOUT ANY EVIDENCE. ADDITION MADE OF RS.25,75,000/- IS DELETED. 4. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER; WHEREAS THE LD. COUNSEL FOR THE ASSESSEE, BESIDES PLACING HEAVY RELIANCE UPON THE ORDER OF THE LD. CIT(A), HAS CONTENDED THAT THE ASSESSEE HAS DEMONSTRATED THROUGH CASH FLOW STATEMENT THAT AT EVERY POINT OF TIME WHEN EVEN CASH WAS DEPOSITED IN THE BANK, THE ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE. COPY OF THE CASH FLOW STATEMENT IS ALSO PLACED ON RECORD. ONCE THE ASSESSEE HAS DISCHARGED HIS ONUS BY PLACING CASH FLOW STATEMENTS, THE ONUS SHIFTS UPON THE REVENUE TO DEMONSTRATE THAT THE CASH WITHDRAWN BY THE ASSESSEE WAS CONSUMED OR UTILIZED FOR HIS OWN PURPOSES AND DEPOSITS WERE MADE OUT OF UNDISCLOSED SOURCES. IN THE ABSENCE OF ANY EVIDENCE IN THIS REGARD, THE CONTENTION OF THE ASSESSEE SHOULD BE ACCEPTED. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION ON THE BASIS AIR INFORMATION. THOUGH CASH FLOW STATEMENT WAS FURNISHED BEFORE HIM, BUT HE HAS NOT LOOKED INTO WHILE MAKING THE ADDITION; WHEREAS THE LD. CIT(A) HAS EXAMINED ALL THE ENTRIES IN THE CASH FLOW STATEMENT, WHICH IS AVAILABLE ON RECORD. IN THE CASH FLOW STATEMENT, THE MOVEMENT OF CASH WAS DISCLOSED AND IT IS EVIDENT THAT ON ALL DATES WHENEVER CASH WAS DEPOSITED IN THE BANK, THE ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE. NOTHING HAS BEEN BROUGHT ON RECORD TO DEMONSTRATE THAT THE CASH WITHDRAWN BY THE ASSESSEE WAS EXHAUSTED OR :- 5 -: UTILIZED FOR OTHER PURPOSES AND THE DEPOSITS WERE MADE OUT OF UNDISCLOSED SOURCES. IN THE LIGHT OF THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS PROPERLY EXPLAINED THE SOURCE OF DEPOSITS IN THE BANK, WHICH WAS PROPERLY APPRECIATED BY THE LD. CIT(A). ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND WE CONFIRM THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD JANUARY, 2015 JJ:2201 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR