Sh. Shyam Lal Shagar, Delhi V. ITO, New Delhi

ITA 3781/DEL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7884 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 04-02-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 10-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBHAKANT SAHU
• Assessee Lawyers: D V TANEJA
• Keywords: Income from undisclosed sources
• Section: 147; 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I - 2 : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 3781/DEL/2015 (ASSESSMENT YEAR: 2002 - 03 ) SHYAM LAL SHAGAR, A - 19, OVERSEAS APARTMENTS, PLOT NO.22, SECTOR - 9, ROHINI, DELHI PAN:AAYPS0353G VS. ITO, WARD - 39(4), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. D. V. TANEJA, CA RESP ONDENT BY: SH. SUBHAKANT SAHU, SR. DR DATE OF HEARING 04/02/ 2016 DATE OF PRONOUNCEMENT 03 / 05 /2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER 13. 04 .2015 OF THE LD CIT(A) - 13 , NE W DELHI FOR ASSESSMENT YEAR 2002 - 03. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LEARNED ASSESSING AUTHORITY GROSSLY ERRED BY ISSUING NOTICE U/S 147 & FRAMING ASSESSMENT U/S 148/143(3) OF I.T. ACT, 1961. AND L D C!T (A) ERRED IN CONFIRMING THE SAME 2. THAT THE LEARNED ASSESSING AUTHORITY FURTHER ERRED BY NOT ISSUING NOTICE U/S 143(2) OF INCOME TAX ACT. 1961 BEF ORE FRAMING THE ASSESSMENT AND LD CIT(A) ERRED IN CONFIRMING THE SAME 3. THAT THE LEARNED ASSESSING AUTHORITY ERRED BY NOT PROPERLY RECORDING THE REASONS FOR ISSUING OF NOTICE U/S 147 OF INCOME TAX ACT, 1961 AND L D CIT (A) ERRED IN CONFIRMING THE SAME. 4. THAT LEARNED ASSESSING AUTHORITY ERRED IN MAKING ADDITION OF (I) 4,00,000 (II) 95,000 (III) 1,50,000 (IV) 1,20,000 (V) 1,00,000 TOTAL 8,65,000 U/S 68 AS INCOME FROM UNDISCLOSED SOURCES AND L D CIT (A) ERRED IN CONFIRMING TH E SAME. 5. THAT THE L D A.O ERRED IN NOT CONSIDERING COMPLETE EVIDENCE FILED WITH CASH FLOW BANK STATEMENT AND ADDITION MADE BY LD A.O AND CONFIRMED BY L D CIT (A) ARE BAD IN LAW 6 LD. A.O AND L D CIT (A) COMPLETELY OVER LOOKED CASE LAWS CITED AND EVIDE NCE FILED AND CONFIRMATION OF ADDITIONS IS BAD IN LAW. PAGE 2 OF 4 7. THE ORDER PASSED BY THE LD CIT(A) IS BAD IN LAW. 3. THE BRIEF FACT OF THE CASE IS THAT THE APPELLANT IS AN EMPLOYEE OF A NATIONALIZED BANK RETIRED FROM SERVICES ON 31.01.2001. HE IS ALSO PRACTICING AS AN ADVOCATE AFTER RETIREMENT. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.03.2003 DECLARING TAXABLE INCOME OF RS. 119260/ - . SUBSEQUENTLY, ON RECEIPT OF TAX EVASION REPORT FROM DDIT (INVESTIGATION), NEW DELHI THE CASE WAS REOPENED U/S 147. LD AO NOTED TH AT ASSESSEE HAS PURCHASED A FLAT FOR RS. 1336795/ - . ASSESSEE SUBMITTED COPY OF THE BANK ACCOUNT AND GIVEN DETAILS OF THE SOURCE OF INVESTMENT. HOWEVER, IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED RS. 865000/ - IN VARIOUS BANK ACCOUNTS FOR WHICH THE ASSESSE E COULD NOT GIVE EXPLANATION TO THE SATISFACTION OF THE ASSESSING OFFICER AND THEREFORE ADDITION WAS MADE. APPELLANT CONTENDED THIS ADDITION BEFORE THE LD CIT(A) WHO IN TURN CONFIRM THE ORDER OF THE ASSESSING OFFICER. THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE FIRST INSTANCE APPELLANT FURNISH REVISED GROUNDS OF APPEAL AS UNDER: - 5. AS THE LD DR DID NOT OBJECT TO REVISION OF THOSE GROUNDS, SAME ARE DEALT WITH AS UNDER: - 1. LD CIT(A) ERRED IN FACTS AND IN LAW IN CONFIRMING ASSTT. U/ S 147 WHREAS (I) REASONS RECORDED WERE NOT CONFRONTED TO APPELLANT (II) NOTICE U/S 143(2) WAS NOT ISSUED BEFORE COMPLETING ASSESSMENT. 2. LD CIT(A) ERRED IN CONFIRMING ALLEGED CASH ADDITION OF RS.8,65,000/ - WHEREAS CASH DEPOSITED INTO BANK WAS RS.645,000/ - AND TWO CHEQUES OF RS.1 ,20,000/ - AND RS.1,00,000/ - WERE DEPOSITED INTO BANK AND COMPLETE EVIDENCE FOR DEPOSIT OF CASH OF RS.6,45,000/ - AND TWO CHEQUES WERE FURNISHED BEFORE LD AO AND LD CIT(A). 3. LD CIT(A) ERRED IN OBSERVING 6 LACS DEPOSITED IN CASH ON 27.09.2001 WHEREAS 6 LACS VIDE CHEQUE NO.726769 WERE DEPOSITED INTO BANK AND NO SUCH FINDING AND ADDITION WAS MADE BY LD AO IN ASSTT. ORDER. 4. LD CIT(A) COMPLETELY OVERLOOKED THE EVIDENCE PLACED ON RECORD OF CASH FLOW, CASH WITHDRAWS AND CASH DEPOSITS INTO BANK TWO CHEQUES DEPOSI TED OF RS.1,00,000/ - +1,20,000/ - AND CONFIRMATION OF ADDITION OF RS.8,65,000/ - IS MISCONCEIVED AND OPPOSED TO FACTS LAW AND CIRCUMSTANCES OF THE CASE. 6. BEFORE US, THE LD AR SUBMITTED THAT REASONS RECORDED WERE NOT PROVIDED TO THE ASSESSEE. HE FURTHER ARG UED THAT NOTICE U/S 143(2) OF THE INCOME TAX ACT WAS ISSUED AFTER FILING OF THE RETURN AND BEFORE FRAMING THE ASSESSMENT. HE FURTHER SUBMITTED THAT THE DETAILS CASH FLOW STATEMENT WAS FURNISHED BEFORE THE LD CIT(A) AS WELL AS BEFORE THE AO WHICH IS AS PER THE DETAILS MAINTAINED BY THE ASSESSEE. HE SUBMITTED THAT CASH DEPOSIT OF RS. 4 LACS ON PAGE 3 OF 4 05.07.2001 IS OUT OF THE CASH WITHDRAWN ON 24.03.2001, 24.04.2001, 02.05. 2001,26.02.2001, 28.06.2001 AND OUT OF ACCUMULATED BALANCE OF RS. 306700/ - OUT OF PREVIOUS YEA R S OF SELF AND HIS WIFE BOTH OF WHOM ARE WORKING . ASSESSEE SUBMITTED THAT HE KEEPS CASH AT HOME IN A DIARY AS APPELLANT AND HIS WIFE ARE ONLY TWO MEMBERS OF THE FAMILY. HE SUBMITTED THAT APPELLANTS WIFE IS ALSO A PRINCIPAL AND APPELLANT WAS ALSO ASSIS TANT MANAGER OF A BANK WHO RETIRED FROM THE JOB AND THEREAFTER WORKING AS AN ADVOCATE AND CONSULTANT THEREFORE, THE AMOUNT OF RS. 8.65 LACS WHICH IS DEPOSITED IN VARIOUS BANK ACCOUNTS IS OUT OF THE FUNDS WITHDRAWN FROM VARIOUS BANKS AND ONLY RS. 306700/ - I S OUT OF PAST SAVINGS. THEREFORE HE SUBMITTED THAT LOOKING TO THE PAST HISTORY OF THE ASSESSEE AND HIS SPOUSE THIS ADDITION SHOULD NOT HAVE BEEN MADE. 7. LD DR RELIED ON THE ORDER S OF THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AS WELL AS THE PAPER BOOK FILED BEFORE US. 9. ON GROUND NO. 1 ASSESSEE WAS ALREADY GIVEN REASON RECORDED BY THE ASSESSING OFFICER AND NOTICE U/S 143(2) WAS ALSO ISSUED TO THE ASSESSEE AS PER HIS OWN SUBMISSION , THEREFORE GROUND NOS.1 AND 2 ARE DISMISSED. 10. ON THE BASIS OF THE EVIDENCE SU BMITTED BEFORE US IT IS EVIDENT THAT ADDITION ON ACCOUNT OF RS. 4 LACS DEPOSITED IN CASH ON 05.07.2001 IS SUPPORTED BY WITHDRAWAL FROM THE VARIOUS BANK ACCOUNTS OF THE ASSESSEE O N VARIOUS DATE. HOWEVER, ASSESSEE CLAIMED OF RS. 306700/ - OUT OF ACCUMULATED SAVING. FOR THIS SUM IT IS SUBMITTED THAT THE ASSESSEE IS WORKING NOW AS AN ADVOCATE AND ALSO IN PAST HE WAS AN ASSISTANT MANAGER IN INDIAN OVERSEAS BANK WHERE FROM HE RETIRED IN 2001. HIS WIFE IS ALSO WORKING AS A PRINCIPAL IN A SCHOOL. HE MAINTAINS A DIARY IN WHICH HE HAS SHOWN HIS PAST SAVINGS OUT OF EARNING OF SELF AND HIS SPOUSE. REGARDING THE CASH DEPOSITED ON 19.10.2001 OF RS. 95,000/ - IT IS BACKED BY THE WITHDRAWALS FROM VA RIOUS BANKS. FURTHER AMOUNT OF DEPOSIT OF RS. 150,000/ - ON 01.12.2001 IS ALSO WITHDRAWALS FROM VARIOUS BANKS. A CHEQUE OF RS.120,000/ - DEPOSITED ON 07.02.2002 IS OUT OF REFUND FROM COOPERATIVE GROUP HOUSING SOCIETY AND FURTHER RS.1 LAC ON 07.02.2002 IS DEP OSIT BY CHEQUE OF RETURN OF LOAN AMOUNT GIVEN ON 29.08.2001 TO FASHION LYRICS. THEREFORE OUT OF TOTAL DEPOSIT OF RS. 865,000/ - EXCEPT RS. 306700/ - ASSESSEE HAS EXPLAINED AMOUNT WISE WITHDRAWALS FROM THE BANK STATEMENT AND SUBMITTED THE COPIES OF BANK PAGE 4 OF 4 STATE MENT SHOWING SUCH WITHDRAWALS. MERELY BECAUSE THE ASSESSEE HAS WITHDRAWN MONEY FROM ONE BANK AND DEPOSITED IN OTHER BANK CANNOT RESULT INTO AN INCOME IN THE HANDS OF THE ASSESSEE UNLESS ASSESSING OFFICER FINDS THAT THIS AMOUNT WAS NOT AVAILABLE WITH THE AS SESSEE. THIS IS NOT THE CASE OF LD ASSESSING OFFICER. FURTHER AS THE ASSESSEE AND HIS WIFE ARE WORKING FOR A VERY LONG TIME THEREFORE AN AMOUNT OF RS. 306700/ - CANNOT BE SUCH A BIG SUM WHICH CANNOT BE ACCUMULATED BY TWO WORKING INDIVIDUALS WHO DOES NOT HAV E ANY CHILD. IN ABSENCE OF ANY OTHER SPENDING ALLEGED BY LD ASSESSING OFFICER THIS AMOUNT CANNOT BE DISBELIEVE D WHERE ASSESSEE HAS PRODUCED A CASH FLOW STATEMENT OF PAST YEARS, BANK STATEMENTS OF THE ASSESSEE AND A TABULATED DIARY BEFORE AO SHOWING ACCUMU LATION OF CASH. FURTHER IT IS ALSO REQUIRED TO BE APPRECIATED THAT THE ASSESSEE IS BEING ASKED TO EXPLAIN ABOUT SMALL ENTRIES PERTAINING TO AY 2002 - 03 IN DECEMBER 2009 I.E. ALMOST AFTER EIGHT YEARS. IT MAY SO HAPPEN THAT ASSESSEE MAY NOT HAVE SUCH METICUL O US DETAILS OF HIS WITHDRAWAL AND DEPOSIT OF THE BANK FOR THOSE YEARS . THEREFORE BENEFIT OF DOUBT IN SUCH CIRCUMSTANCES REQUIRES TO BE GIVEN TO THE ASSESSEE . IN VIEW OF THIS, WE ARE OF THE VIEW THAT ADDITION OF RS. 865000/ - M ADE IN THE HANDS OF THE APPELL ANT DESERVE S TO BE DELETED. HENCE, WE REVERSE THE ORDER OF LD CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 8650000/ - ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNT OF THE ASSESSEE ON VARIOUS DATES. IN THE RESULT, WE ALLOW GROUND NOS 2, 3 AND 4 OF THE APPEAL. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 12. ORDER PRONOUNCED IN THE OPEN COURT ON 0 3 / 0 5 /2016 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 3 / 0 5 / 2016 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI