Vikram Yadav, New Delhi V. DCIT, New Delhi

ITA 3761/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91524 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 27-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: SURESH ANANTHARAMAN
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

ITA NO.3761/DEL/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO . 3761/DEL/2014 A.Y. : 2005 - 2006 SH. VIKRAM YADAV, D - 84, ANAND NIKETAN, NEW DELHI 110 021 (PAN: ABCPY4826F) VS. DCIT, CENTRAL CIRCLE - 15, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SURESH ANANTHARAMAN, CA DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING: 07 .0 7 .2015 DATE OF ORDER : 30 . 0 7 .2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS - II ) DATED 15 . 4 .201 4 PERTAINING TO ASSESSMENT YEAR 200 5 - 06 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES: - 1. THE LOWER AUTHORITIES HAVE BEEN ERRED IN HOLDING THAT SOURCE OF CASH DEPOSIT OF RS. 2.05 LACS HAS NOT BEEN EXPLAINED BY THE APPELLANT. SUCH FINDINGS ARE OPPOSED TO EVIDENCE ON RECORD. 2. THE LOWER AUTHORITIES HAVE ERRED IN HOLDING THAT A SUM OF RS. 2.0 5 LACS IS UNEXPLAINED CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT. SUCH CONCLUSIONS ARE OPPOSED TO EVIDENCES, ON RECORD. ITA NO.3761/DEL/2014 2 3. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN DECLARING INCOME OF RS. 92,934/ - WAS FILED BY THE ASSESSEE ON 1.8.2005, WHICH WAS PROCESSED U/S. 143(1) ON 11.5.2006. LATER ON CASE WAS SELECTED UNDER SCRUTINY. THE AO NOTED THAT CASH DEPOSITS IN THE B ANK ACCOUNT OF THE ASSESSEE ON VARIOUS DATES IN THE MONTH OF SEPTEMBER, 2004. IN RESPONSE TO THIS SPECIFIC QUERY ON THE SOURCE OF THE CASH DEPOSITS, THE ASSESSEE FAILED TO FILE ANY EXPLANATION. CONSEQUENTLY, THE SUM OF RS. 2,05,000/ - WAS ADDED BY THE AO AS UNEXPLAINED CASH CREDITS AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 20.1.2009. 4. AGGRIEVED WITH THE AFORESAID ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 15. 4.2014 HAS PARTLY ALLOWED THE APPEAL. 5. AGAINST THE AFOREMENTIONED IMPUGNED ORDER DATED 15.4.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL OF THE ASSESSEE IN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY HAS FILED THE WRITTEN SUBM ISSIONS IN RESPECT OF THE ISSUE OF ADDITION OF RS. 2.05 LACS, WHICH IS REPRODUCED AS UNDER: - IT IS SUBMITTED THAT DURING THE YEAR UNDER REVIEW ASSESSEE HAD RECEIVED ADVANCE OF RS. 3,00,000/ - AGAINST IT PROPERTY AT SECTOR - 14, GURGAON, FROM ONE SHRINIWAS YADAV ON 6.8.2004 WHICH THE ASSESEE LATER DEPOSITED IN HIS BANK ACCOUNT IN PIECEMEAL MANNER. THE FACT WAS ALSO CONVEYED ITA NO.3761/DEL/2014 3 TO THE LD. AO VIDE SUBMISSION DATED 20.12.2007. ASSESSEE HAD ALSO SUBMITTED THE CONFIRMATION FROM SHRINIWAS YADAV ALONGWITH COPY O F THE FINANCIAL STATEMENT OF SHRINIWAS YADAV (PLACED AT PAGE NO. 21 TO 37) HOWEVER, THE AO WHILE PASSING THE ORDER HAD NOT CONSIDERED THE SUBMISSION MADE BY THE AO COPY OF THE LETTER DATED 20.12.2007 IS PLACED AT PAGE NO. 20 TO 40 OF THE PAPER BOOK. IN THE LIGHT OF THE ABOVE, IT IS SUBMITTED THAT THE ADDITION OF RS. 2,05,000/ - MADE ON ACCOUNT OF UNEXPLAINED CREDIT MAY BE QUASHED AND RELIEF BE GIVEN TO THE APPELLANT. 6.1 AFTER PERUSING THE WRITTEN SUBMISSIONS FILED BY THE ASSESSE, LD. CIT(A) HAS ADJUDI CATED THE ISSUE IN DISPUTE AS UNDER: - 5.1 THE AO NOTED CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT ON VARIOUS DATES IN THE MONTH OF SEPTEMBER, 2004. IN RESPONSE TO HIS SPECIFIC QUERY ON THE SOURCE OF THE CASH DEPOSITS, THE APPELLANT FAILED TO FILE ANY EXPLANATION. CONSEQUENTLY THE SUM OF RS. 2,05,000/ - WAS ADDED BY THE AO AS UNEXPLAINED CASH CREDITS. 5.2 DURING THE APPELLATE PROCEEDINGS, THE AR REFERRED TO THE LETTER DATED 20112/2007 FILED BEFORE THE AO, WHEREIN THE SOURCE OF CASH WAS STATED T O BE ADVANCE OF RS . 3,00,000 RECEIVED FROM SHRINIVAS YADAV, SON OF RATIRAM YADAV, MADE IN CONNECTION WITH BOOKING OF OFFICE SPACE AT 342 - P, SECTOR , 14, GURGAON. A COPY OF CONFIRMATION WAS ALSO STATED TO HAVE BEEN FILED. THE AR FURTHER EXPLAINED THAT THE ADVANCE WAS ITA NO.3761/DEL/2014 4 RECEIVED FROM SHRINIVAS YADAV, WHO WAS UNRELATED TO TH E APPELLANT, ON 6/8/2004, AND THAT THE CASH DEPOSITS WERE MADE BY THE APPELLANT IN H IS BANK ACCOUN T OUT OF THIS ADVANCE IN A 'PIECEMEAL MANNER'. IT WAS ALSO CLAIMED THAT. THE BOOKS OF SHRINIVA YADAV REFLECTED THE ADVANCE GIVEN BY HIM FOR OFFICE SPACE. 5.3. THE SUBMISSIONS OF THE AR ARE CONSIDERED. EVEN AT THIS STAGE THE LINKAGES BETWEE N THE CA SH DEPOSITS OF RS . 2,05,000 AND THE SO CALLED ADVANCE OF RS . 3,00,000 ARE NOT ESTABLISHED. THERE IS N O CREDIBLE EVIDENCE ON RECORD TO SUGGEST THAT ANY SUCH ADVANCE WAS INDEED RECEIVED BY THE APPELLANT AGAINST BOOKING OF OFFICE SPACE. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, IT IS BEYOND REASONABLE EXPECTATION THAT A PERSON, UNKNOWN TO THE APPELLANT, WOULD HAND OVER CASH OF RS . 3,00,000 AND NOT EVEN OBTAIN A RECEIPT TO COVER HIS RISK. IN ANY CASE, NO OFFICE SPACE WAS PROVIDED BY THE APPELLANT TO THE SAID SHRINIVAS YADAV. THE REFLECTION OF RS 3 , 00,000 IN BALANCE SHEET OF MILLENNIUM TOURS AND TRAVELS (PROPRIETORSHIP OF SHRINIVAS YADAV) AS ADVANCE FOR OFFICE SPACE DOES NOT ESTABLISH THAT THE SUM WAS GIVEN IN CASH AND TO THE APPELLANT IN PARTICULAR. N O EXPLANATION FOR ENTERING INTO A CASH TRANSACTION IN TERMS OF URGENCY OR NECESSITY HAS BEEN MADE OUT. MOREOVER, THE EXPLANATION OF THE AR THAT THE SOURCE OF - CASH OF RS 50,000 DEPOSITED ON 3/9/2004, CASH OF RS 50,000 DEPOSITED ON 4/9/2004, CASH OF RS 50, 000/ - DEPOSITED ON 7/9/2004, CASH OF RS 10,000 DEPOSITED ITA NO.3761/DEL/2014 5 ON 8/9/2004, CASH OF RS 5,000 DEPOSITED ON 18/9/2004 AND CASH OF RS 40,000 DEPOSITED ON 22/9/2004 - WAS RS 3,00,000 OF CASH RECEIVED BY THE APPELLANT ON 6/8/2004, IS NOT TENABLE. THE APPELLANT HAD A BANK ACCOUNT AND WAS GENERALLY MAINTAINING CASH IN HAND OF ABOUT RS 15,000. IT IS BEYOND THE REALM OF REASON AND LOGIC FOR A PERSON TO FIRST TAKE AN 'ADVANCE' OF RS . 3 , 00,000 IN CASH, HOLD THE CASH FOR ABOUT A MONTH, AND THEREAFTER DEPOSIT DIFFERENT DENOM INATIONS IN THE BANK ON DATES SPANNING ALMOST ANOTHER MONTH. THEREFORE, THE EXPLANATION - THAT THE SOURCE OF THE CASH DEPOSITS OF RS 2,05,000 WAS 'ADVANCE' OF RS 3,00,000, TAKEN A MONTH EARLIER - DOES NOT ELICIT THE TRUE STATE OF AFFAIRS - RATHER IT APPEAR S FARFETCHED AND MERELY AN ATTEMPT TO SOMEHOW LINK TWO UNRELATED ENTRIES IN A FUTILE BID TO SOMEHOW EXPLAIN THE SOURCE OF CASH CREDITS. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE IT IS APPARENT THAT THE THREE ESSENTIAL ELEMENTS, NAMELY, THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION, HAVE REMAINED UNPROVED. THE EXPLANATION OF THE APPELLANT, WITH REGARD TO THE SOURCE OF THE CASH CREDITS, BEING UNSATISFACTORY, THE ADDITION OF RS. 2,05,000/ - MADE BY THE AO IS SU STAINED. 6.2 LD. COUNSEL OF THE ASSESSEE STATED THAT THE REVENUE AUTHORITIES HAVE ERRED IN HOLDING THAT SOURCE OF CASH DEPOSIT OF RS. 2.05 LACS HAS NOT BEEN EXPLAINED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT SUCH FINDINGS ARE OPPOSED TO EVIDENCE ON RECORD. THEREFORE, HE REQUESTED ITA NO.3761/DEL/2014 6 THAT THE ADDITION MADE BY THE AO AND THE SUSTAINED BY THE LD. CIT(A) AMOUNTING TO RS. 2.05 LACS MAY BE DELETED. 6. 3 ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES AND STATED THAT THE SAME MAY BE UPHELD. 7 . I HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED. I FIND THAT THE FOLLOWING DEPOSITS IN CASH MADE IN THE MONTH OF SEPTEMBER, 2004 WERE MADE: - 3.9.2004 : RS. 50,000/ - 4.9.2004 : RS. 50,000/ - 7.9.2004 : RS. 50,000/ - 8.9.2004 : RS. 10,000/ - 18.9.2004 : RS. 5,000/ - 22.9.2004 : RS. 40,000/ - TOTAL : RS. 2,05,000/ - 7 .1 THE ABOVE DEPOSITS HAVE BEEN TREATED AS UNEXPLAINED CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE I.T. ACT BY THE ASSESSING OFFICER AND LD. CIT(A) HAS SUSTAINED THE SAME. I ALSO FIND THAT ASSESSEE S COUNSEL BEFORE THE LD. CIT(A) WITH REGARD TO THE ABOVE SAID ADDITION HAS SUBMITTED THAT DURING THE YEAR UNDER REVIEW ASSESSEE HAD RECEIVED ADVANCE OF RS. 3,00,000/ - AGAINST IT PROPERTY AT SECTOR - 14, GURGAON, FROM ONE SHRINIWAS YADAV ON 6.8.2004 WHICH THE ASSESEE LATER DEPOSITED IN HIS BANK ACCOUNT IN PIECEMEAL MANNER. HE FURTHER SUBMITTED THAT THE SAME WAS CONVEYED TO THE AO VIDE WRITTEN SUBMISSION DATED 20.12.2007. HE FURTHER SUBMITTED THAT ASSESSEE HAD ITA NO.3761/DEL/2014 7 ALSO SUBMITTED THE CONFIRMATION FROM SHRINIWAS YADAV ALONGWITH COPY OF THE FINANCIAL STATEMENT OF SHRINIWAS YADAV, BUT AO HAS NOT CONSIDERED THE SAID SUBMISSIONS AND MADE THE ADDITION ARBITRARY, WHICH DESERVE TO BE DELETED. ON GOING THROUGH THE RECORDS, I FIND CONSIDERABLE COGENCY IN THE ASSESSEE S COUNSEL CONTENTION THAT DESPITE SUBMISSION OF THE CONFIRMATION FROM SHRINIWAS YADAV HAVING BEEN GIVEN RS. 3,00,000/ - TO VIKRAM YADAV (ASSESSEE) IN CASH FOR OFFICE SPACE 342, P - SECTOR - 14, GURGAON, WHO IS BEING ASSESSED AT WARD 24(4), NEW DELHI AND WHO PAN NO. AAQPY3197G. I FURTHER NOTE THAT THE AMOUNT OF RS. 3 LACS HAS ALSO BEEN SHOWN IN THE BALANCE SHEET FOR THE YEAR ENDING 31.3.2005 OF MILLEMIUM TOURS & TRAVELS PROP. SHRINIWAS YADAV VIDE PAGE NO. 13 FILED WITH THE PAPER BOOK BEFORE THE BENCH, WHICH SHOWS THAT THE ENTRY OF RS. 3 LACS ON ACCOUNT OF AD VANCE FOR OFFICE SPACE. I ALSO NOTE FROM THE SUBMISSION DATED 20.12.2007 FILED BY THE ASSESSEE S COUNSEL THAT THE ASSESSEE IS A PETTY CONTRACTOR OF TRANSPORTATION, HE HAD MADE ALL THE PAYMENTS BY CHEQUE TO VARIOUS VENDORS, FURTHER THE OPERATION OF THE AS SESSEE STARTED IN THE MONTH OF LATE AUGUST, 2004. I ALSO FIND FROM THE LD. CIT(A) S ORDER ASSESSEE HAD A BANK ACCOUNT AND WAS GENERALLY MAINTAINING CASH IN HAND OF ABOUT RS. 15,000/ - . DUE TO THIS THERE IS A DEFINITE POSSIBILITY OF DEPOSITING THE CASH OF RS. 2.05 LACS ON DIFFERENT DATES AS MENTIONED ABOVE AGAINST THE ADVANCE RECEIVED FROM SHRINIWAS YADAV, WHO HAS GIVEN HIS CONFIRMATION IN THIS REGARD. UNDER THESE CIRCUMSTANCES, IDENTITY OF THE LENDER IS DULY PROVED. KEEPING IN VIEW OF THE AFORESAID DI SCUSSIONS, I AM OF THE CONSIDERED VIEW THAT T HE DEPARTMENT WAS FREE TO PROCEED TO REOPEN THE INDIVIDUAL ASSESSMENT OF THE LENDER I.E. SH. SRINIWAS YADAV IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. THEREFORE, I DELETE THE ADDITION OF RS. 2.05 ITA NO.3761/DEL/2014 8 LACS MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE ACCORDINGLY. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 7 /201 5 . SD/ - [H.S. SIDHU] JUDICIAL MEMBER DATE 30 / 7 /201 5 SRB HATNGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES