Shri Rajesh Singh A. Rajput, Ahmedabad V. The Income Tax Officer, Ward-15(4), Ahmedabad

ITA 379/AHD/2017

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6044 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: Ahmedabad
• Next Hearing Date: 31-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 13-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MSSAUMYAPANDEY
• Assessee Lawyers: SHRIS.N.DIVATIA

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’B’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And MsMADHUMITAROY,JUDICIALMEMBER आयकरअपीलसं./ITANos.378-379/AHD/2017 धििाधरणवरध / Asstt.Year:2011-2012 RajeshSinghA.Rajput, 16,SamayviharBunglows, B/h.GangotriBunglows, NewNikol, Ahmedabad-382330. PAN:ABKPR0216N Vs. I.T.O, Ward-15(4), Now,ITO,Ward-5(1)(4), Ahmedabad. (Applicant)(Respondent) Assesseeby:ShriS.N.Divatia,A.R Revenueby:MsSaumyaPandey,Sr.D.R सुिवाईकीतारीख/DateofHearing:01/08/2023 घोरणाकीतारीख/DateofPronouncement:30/10/2023 आदेश/ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedtwoappealshavebeenfiledattheinstanceoftheAssessee againsttheorderoftheLearnedCommissionerofIncomeTax(Appeals)-7, Ahmedabad,arisinginthematterofassessmentorderpassedunders.144and penaltyorderpassedu/s.271(1)(c)oftheIncomeTaxAct,1961(here-in-after referredtoas"theAct")relevanttotheAssessmentYear2011-2012. ITAnos.378-379/AHD/2017 A.Y.2011-12 2 2.Theassesseehasraisedfollowinggroundsofappeal: 1.1Theorderpassedu/s.250on10.11.2016forA.Y.2011-12byCIT(A)-7,Abad upholdingtheadditionofRs.52,39,433/-towarescreditsinbankaccountasunexplainedis whollyillegal,unlawfulandagainsttheprinciplesofnaturaljustice. 1.2TheLd.CIT(A),hasgrievouslyerredinlawandononfactsinnotconsideringfully andproperlythesubmissionsmadeandevidenceproducedbytheappellantwithregardto theimpugnedaddition.TheLd.CIT(A)oughttohavepointedoutanddiscussedthe reasonsasadvancedforconfirmingtheadditionbeforepassingtheimpugnedorder. 2.1TheLd.CIT(A)hasgrievouslyerredinlawandonfactsinconfirmingtheaddition towardsaggregatecredits,cashorotherwiseofRs.52,39,433/-inbankaccountwithAxis Bankasunexplained. 2.2Thatinthefactsandcircumstancesofthecaseaswellasinlaw,theLd.CIT(A)ought nottohaveupheldthetheadditiontowardsaggregatecredits,cashorotherwiseof Rs.52,39,433/-inbankaccountwithAxisBankasunexplained. 3.1TheLd.CIT(A)hasfailedtoappreciatethattheimpugnedadditionofRs.52,39,433/- includedexplainedcreditssuchasRs.3,18,823/-inrespectofsalary,Rs.1610/-interest andRs.51,000/-beingrefundfromMaxNewYorkLifeInsuranceCo.etc.sothatit amountedtodoubleadditioninrespectofsuchcredits.TheCIT(A)hasfailedtoappreciate thecashdepositsinsaidbankaccountwasonlytotheextentofRs.30,34,000/-. 3.2TheLd.CIT(A)hasfailedtoappreciatethattheappellanthadfullydischargedthe burdencastuponhimtoprovethecreditsinthesaidbankaccount.Nocogentand convincingreasonshavebeenadvancedbyCIT(A)forupholdingtheadditionof Rs.52,39,433/-.TheobservationsmadebyCIT(A)whicharecontrarytotheevidenceon recordoragainsttheappellantarenotadmitted. 4.1Withoutprejudicetoaboveandinalternative,theimpugnedadditionofRs.52,39,433/- ishighlyexcessiveandthesamedeservestobereducedbyexplaincreditsanditbe restrictedtothepeakcredit. Itis,therefore,prayedthatadditionofRs.52,39,433/-upheldbytheCIT(A)maykindlybe deleted. 3.Thefactsinbriefarethattheassesseeisanindividualandderivingincome fromsalary.Theassesseeinthereturnfiledundersection139oftheActdeclared incomeatRs.1.76lakhonlywhichwassubsequentlyselectedforscrutinyunder CASS.TheAOduringtheassessmentproceedingnoticedthatthesavingbank accountoftheassesseeheldwithAxisbankhasbeencreditedbyanamount aggregatingtoRs.52,39,433/-onlyintheformofcashandchequedeposits.The assesseewasaskedtofurnishthenatureandsourcesofcreditinbankaccount, butassesseefailedtomakeanyreply.Thus,theAOinabsenceofthereplyfrom ITAnos.378-379/AHD/2017 A.Y.2011-12 3 theassesseetreatedtheentiredepositofRs.52,39,433/-asunexplainedcash creditandaddedthesametothetotalincomeoftheassessee. 4.TheaggrievedassesseepreferredanappealbeforethelearnedCIT(A). 5.TheassesseebeforethelearnedCIT(A)submittedthedetailoftotalcredits inthebankaccountmadeduringtheyearwhichareasunder: ParticularsAmount IncomeFromSalary318823.00 CashDeposittoBank(Detailsof givenbelow) 3034000.00 SavingBankInterest1610.00 IncomeRecdfromPersonalSource andloanreturnbackandreceived FromFriends&Relatives 1834000.00 AmountRefundfromMaxNew YorkLifeInsurance 51000.00 TotalAmount5239433.00 5.1TheassesseefurthersubmittedsourcesofcashdepositedforRs. 30,34,000/-inthebankaccountwhicharedetailedasunder: SummaryofCashBookisasfollows: ParticularsAmount OpeningCashBalalnce147964.70 Add: CashreceivedfromDeep Enterprise 2171000.00 CashreceivedfromFriendsand Relatives 70000.00 CashWithdrawalfromBank869500.00 Less: HouseHoldExpenses120000.00 CashGivenbacktoFriends& Relatives 70000.00 CashDeposittoBank3034000.00 ClosingCashBalance34446.70 5.2TheassesseefurthersubmittedthatthecashamountingtoRs.21,71,000/- wasdepositedbyM/sDeepEnterprisesaproprietaryconcernofhisfriendwho wasillatthattimeandwasnotabletohandlebankingactivityduetoillness. However,hisfriendwasinneedtoissuedemanddraftinfavourofIndianOil ITAnos.378-379/AHD/2017 A.Y.2011-12 4 CorporationagainstthepurchasesofpetroleumproductsbyM/sDeepEnterprises. Accordingly,cashofM/sDeepEnterpriseswasdepositedinhisbankaccount,and heissueddemanddraftinfavourofIndianOilCorporation(IOC).Theassesseein supportofitsclaimedsubmittedcopyofinvoicesissuedbytheIOCtoM/sDeep Enterprises,copyofletterfromtheownerofM/sDeepEnterprisesinthisregard, confirmationandITRofDeepEnterprise. 5.3Theassesseefurtherduringtheremandproceedingsubmittedconfirmation andPANfromthefriendsandrelativeswhosechequesweredepositedinhisbank account.Theassesseeduringremandproceedingalsosubmittedcashbook,bank booketc. 5.4However,theAOintheremandreportedsubmittedthattheassesseehas notfurnishedsufficientmaterialstosubstantiatethatcashdepositedwasreceived fromM/sDeepEnterprises.Assuch,theamountofcashdepositsinassessee’s bank,theamountofdemanddraftissuedandtheamountofinvoicefromIOC werenotmatchingwitheachother.Likewise,theassesseeclaimedremaining cashdepositsweremadefromopeningcashbalanceandcashwithdrawalduring theyear,butnocorroborativematerialproducedbytheassessee.Similarly,the assesseeclaimedthatamountcreditedinthebankaccountotherthanthecash depositwereonaccountofsalary,receiptofloansfromfriendsandrelativeand refundfromMaxNewYorkLifeinsurancebutnocorroborativematerialwas produced.Accordingly,theAOcontendedthattheadditionmadeshouldbe sustained. 6.ThelearnedCIT(A)afterconsideringthefactsintotalityconfirmedthe additionmadebytheAObyobservingasunder: 6.2Ihaveconsideredtheassessmentorder,factsofthecasethesubmissionsmade bytheappellant,theremandreportandtherejoindertothetemandreport.Theappellant hassubmittedbywayofsubmissionsmadeduringtheappellateproceedings(acopyof whichwassenttotheAOaswellforhiscomments)thattheamountdepositedinhisbank accountincludedcashdepositstobank,incomefromreceivedduringtheyear,loans ITAnos.378-379/AHD/2017 A.Y.2011-12 5 receivedfromfriendsandrelativesandamountrefundedfromMaxNewYorkLife Insurance.Hehasfurtherstatedthatoutofthecashreceived,anamountofRs 21,71,000/-wasreceivedfromDeepEnterprisesforpaymentofbillstoIndianOil CorporationonbehalfofDeepEnterprises.Aperusalofallthesubmissionsmadeand evidencesfiledshowsthattheexplanationwithrespecttocashdepositfromDeep Enterprisescannotbeacceptedintheabsenceofsatisfactoryevidences.Whilethe appellanthasfurnishedfourbillsofIndianOilCorporationforanamountofRs.5,41,700/- each,thisamountdoesnottallywiththeamountsofcashdepositsfromDeepEnterprises andthedemanddraftsissued.Moreover,thebankstatementalsodoesnotreflect anywherethattheseamountswhichhavebeenmadeoutto"self"forissuanceofdemand draft,havebeenpaidtoIndianOilCorporation.Simplyfurnishinganaffidavitofthe proprietorofDeepEnterprisescannotberegardedasdocumentaryevidencetoestablish genuinenessofatransaction. 6.1Inrespectoftheothercashdepositsaswell,theappellanthasnotsubmitted supportingcorroborativeevidencestoestablishthegenuinenessofthetransactionorthe anycreditworthinessofthedepositors.Infact,theappellanthasnotsubmittedcopyof ITRorbankstatementofanyofthefriendsandrelativesfromwhomhehasostensibly receivedloans.Itisseenthattheappellant'sincomefromsalaryisonlyRs.3,18,823/-. Therefore,hiscontentionthattheamountofRs.18,34,000/-depositedinhisbankaccount comprisesofincomereceivedfrompersonalsourcesandloansreceivedfromfriendsand relativescannotbetakenatfacevalue.Hehasnotexplainedwhathisincomefrom personalsourceis. 6.1.1Itisalsopertinenttonotethatintherejoindertotheremandreport,theappellant hasnotmadeanysubmissiononmerit.Hehassimplystatedthathehasnootherincome exceptsalaryincome.Consideringallthefactsasdiscussedaboveaswellasthe submissionsmade,Iamoftheviewthattheappellanthasnotsatisfactorilydischargedthe onusofestablishingthegenuinenessofthetransactionandcreditworthinessofthe depositorsinrespectofthedepositsinhisbankaccountandhisclaiminrespectofcash receivedfromDeepEnterprisesisalsonotexplainedwithcorroborativeevidences. Consideringthesefacts,theadditionofRs.52,39,433/-madebytheAssessingOfficeris confirmedGroundofappealno.3isdismissed. 7.BeingaggrievedbytheorderofthelearnedCIT(A),theassesseeisin appealbeforeus. 8.ThelearnedARbeforeusfilledpaperbookrunningfrompages1to72and reiteratedthesubmissionmadeduringremandandappellateproceedingsbefore theAOandtheld.CIT-A. 9.Ontheotherhand,thelearnedDRvehementlysupportedtheorderofthe authoritiesbelow. ITAnos.378-379/AHD/2017 A.Y.2011-12 6 10.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Admittedly,duringtheyearunderconsideration,the savingbankaccountoftheassesseehasbeencreditedforanamountaggregating toRs.52,39,433/-only.Theassesseeduringtheappellateproceedingbeforethe learnedCIT(A)andremandproceedingbeforetheAOfurnishedsourcesofcredit inthebankaccountbutthelowerauthoritiesdidnotagreewiththesubmissionof theassesseeandtreatedtheentirecreditinbankaccountasunexplainedmoney. Forthesakeofconvenience,weproceedtoadjudicateeachsourceofcreditinthe bankaccountoftheassesseeseparately. Creditentryinthebankthroughchequeorotherelectronicforms amountingtoRs.22,05,433/-. 10.1Thefirstsourceofcreditclaimedbytheassesseeisfromsalaryamounting toRs.3,18,823/-only.Inthisregard,wenotetheAOhimselfnotedthatthe assesseeisasalariedpersonanddeclarednettaxableincomeforRs.1.76lakh whichincludeincomefromsalary,lossonaccountofhouseproperty.ButtheAO andthelearnedCIT(A)didnotbelievethesubmissionoftheassesseethathis bankaccountwascreditedonaccountofreceiptofsalary.Wefurthernotethe assesseeinthecomputationofincomehasshowngrosssalaryof3,94,340/- whichismoretheamountclaimedbytheassesseewhichwascreditedinthebank accountoftheassesseeonaccountsalary.Thereisnoallegationorfindingofthe AOthattheassesseeisholdinganyotherbankaccountinwhichreceipton accountofsalarymighthavebeencredited.Therefore,itpresumedthatthesalary musthavebeencreditedintheimpugnedbankaccountoftheassessee.Wealso notethattheAOinhisorderhasreproducedeachentryinbankaccountandon perusalofthesameitcanbeseenthereareseveralcreditentrieswithnarration salary.Therefore,wefindforceonthecontentionoftheassesseeanddirectto AOdeletetheadditiontotheextentofamountclaimedtobecreditedonaccount ofsalary. ITAnos.378-379/AHD/2017 A.Y.2011-12 7 10.2ThenextsourcescreditclaimedbytheassesseeisforRs.1610onaccount ofbankinterest.Onperusalofthedetailofcreditinbankaccountreproducedby theAOinhisorder,wefindthattherewereentriesaggregatingtoRs.1610/-with narrationinterest.However,onperusalofcomputationofincome,wenotethat theassesseehasnotincludedinterestincomeinhiscomputationofincome. Therefore,theadditiontothisisextentconfirmed. 10.3Comingnextsourcesclaimedbytheassesseeforanamountaggregatingto Rs.18,34,000/-asreceiptfromfriendsandrelatives.Assuch,theassesseeinthis regardfurnisheddetailsof5personsfromwhomtheassesseebankaccountgot creditedondifferentdates,thesummaryofthesameisavailableatpage68of paperbook.TheassesseealsofurnishedPANandconformationletterfromthese personswhichareavailableonpages39to50ofthepaperbook.Eventhe assesseealsofiledthecopiesITR-Vofthefriendsandrelatives.Thus,inour consideredopinion,theassesseehasprovidedprimaryevidence,andtheonus wasshiftedupontherevenuetomakenecessaryinquirytofindoutthe genuinenessoftheclaim.However,theAOduringtheremandproceedingwithout conductingnecessaryinquiryorbringinganycontrarymaterialrejectingthe explanationoftheassessee.Thus,consideringthefactthattheassesseehas furnishedprimaryevidencewithregardtosourcesofcreditinbankaccount,but nocontrarymaterialbroughtonrecordbytheAOneitheranyinfirmitywas pointedoutinthesedocumentaryevidence,weherebydirecttheAOtodeletethe additiontotheextentofRs.18,24,000/-only. 10.4ThenextsourceofcreditforanamountofRs.51,000/-claimedbythe assesseeasrefundfromMaxNewYorkLifeInsurance.Theassesseeinsupport furnishedaledgercopyofMaxNewYorkLifeInsurancewhichisplacedonpage 13ofthepaperbook.Onperusalofsame,wenotethattheassesseeon21 st July 2010madepaymentofRs.51,000toMaxNewYorkandsubsequentlysame ITAnos.378-379/AHD/2017 A.Y.2011-12 8 amountwasreceivedbackbytheassesseeason6 th August2010.Inthisregard wefurtherperusedtheentriesinthebankaccountwhichhasbeenreproducedby theAOinhisorder,wenotethatsameismatchingwiththedebitandcreditentry inbankaccountonrespectivedatesandthebanknarrationagainsttheentryalso reads“MaxNewYork”.Therefore,wefindforceintheclaimedoftheassessee thatimpugnedamountrepresentsrefundofpaymentmadeonearlieroccasion. Hence,weherebydirecttheAOtodeletetheadditionmadebyhimtotheextent ofRs.51000/-receivedfromMaxNewYork. CashDepositamountingtoRs.30,34,000/-: 10.5Theassesseewithrespecttothesourcesofcashdepositclaimedthatthe majorityamountofRs.21,71,000/-wascashreceivedfromM/sDeepEnterprises whichwasdepositedinhisbankaccountforissuanceofdemanddraftinfavourof IndianOilCorporation.TheassesseeinsupportfurnishedaledgercopyofM/s DeepEnterprises,copyofconfirmation,purchaseofsummaryofDeepEnterprises fromIOC,invoicesissuedbytheIOCtoDeepEnterprises.However,theAOand thelearnedCIT(A)rejectedtheclaimoftheassessedwithoutmakingany independentinquiryorbringingcontrarymaterialmerelyforthereasonthatthere wereminordifferencesinamountofcashdepositedviz-a-vizamountofdemand draftandtheamountofinvoiceswhichisdetailedasunder: CashDeposit date Amountof cashDeposit Dateof DemandDraft Amountof Demand BillNo./date byIOCL BillAmount 08-09-2010545000.0013-09-2010544360.0013-09-2010541700.00 21-09-2010545000.0022-09-2010544360.0022-09-2010541700.00 26-09-2010545000.0029-09-2010544360.0030-09-2010541700.00 10-10-2010536000.0011-10-2010536338.0012-10-2010541700.00 10.6Inourconsideredopinion,theapproachoftherevenueforrejectingthe explanationoftheassesseemerelyforminordifferenceintheinvoiceamountand demanddraftviz-a-vizcashdepositisnotjustified.Assuchtheassesseewasable todemonstratethatcashofRs.21,71,000/-wasdepositedbyM/sDeep ITAnos.378-379/AHD/2017 A.Y.2011-12 9 Enterprises.Iftherevenuehaddoubt,thentheAOshouldhavecarriedout independentinquiryfromM/sDeepEnterprise,buttheAOfailedtodoso. Therefore,weherebysetasidethefindingofthelearnedCIT(A)inthisregardand directtheAOtodeletetheadditionmadebyhimforRs.21,77,000/-only. 10.7ComingtotheremainingamountofcashdepositforRs.8,63,000/-.The assesseeclaimedthattheaboveamountwasdepositedoutofopeningcash balanceofRs.1,47,965/-andwithdrawalmadefromthebankforRs.8,69,500/- only.Theassesseeinsupportofclaimfurnishescopyofcashbookandbankbook. Consideringthesmallnessoftheamountofopeningbalancei.e.1,47,965.00only, weareoftheviewthatsuchamountshouldbeavailablefordeposit.Likewise,we alsonotethattherewerefrequentwithdrawalsfromthebankaccountwhichwere sufficienttodeposittheremainingcashinthebankaccount.Therevenuehasalso notbroughtanythingonrecordthatthecashwithdrawalwasutilisedbythe assesseeforsomeotherpurposes. 10.8Inviewoftheabovedetaileddiscussion,weherebydirecttheAOtodelete theadditionmadebyhimonaccountofcreditentryinbankaccountofassessee totheextentofRs.52,37,823/-andconfirmedtheadditionforRs.1610/-onlyon accountofinterestincomenotofferedbytheassessee.Hence.thegroundof appealraisedbytheassesseeisherebypartlyallowed. 10.9Intheresult,theappealoftheassesseepartlyallowed. ComingtoITANo.379/Ahd/2017bytheassesseeforAY2011-12 againstthepenaltyproceedingundersection271(1)(c)oftheAct. 11.Attheoutset,wenotethatquantumadditiononwhichtheAOhaslevied penaltyundersection271(1)(c)oftheActhasbeendeletedbyusvideparagraph number10ofthisorderinITANo378/Ahd/2017.Inotherwords,thequantum ITAnos.378-379/AHD/2017 A.Y.2011-12 10 additionsmadebytheAOandconfirmedbythelearnedCIT(A)weredeletedby theus.Thus,thequestionofconcealmentofincomeorfurnishinginaccurate particularofincomedoesnotariseandthereforethepenaltycannotbesustained. Undertheprovisionsofsection271(1)(c)oftheAct,theamountofpenaltyhas beenspecifiedwhichshallnotbelessthanhundredpercentoftheamountoftax soughttobeevadedsubjecttothemaximumlimitof300%ofsuchamount. Underexplanation4tosection271(1)(c)oftheAct,themannerforquantifying theamountoftaxsoughttobeevadedhasbeenspecifiedwhichhasdirectnexus withtheadditions/disallowancesmadeduringthequantumproceedings. Therefore,whenthequantumadditions/disallowanceshavebeendeleted,then themannerofquantifyingtheamountofpenaltyunderexplanation4tosection 271(1)(c)oftheActasdiscussedabovefails.Accordingly,weareoftheviewthat thattherecannotbeanypenaltywithrespecttothequantumadditionswhich havebeendeletedbyus.RegardingtheconfirmationofadditionforRs.1600.00, consideringthesmallnessofamount,weherebydeletethepenalty.Hencethe groundofappealraisedbytheassesseeisherebyallowed. 11.1Intheresult,theappealfiledbytheassesseeisherebyallowed. 12.Inthecombinedresults,theappealfiledbytheassesseebearingITA No.378/Ahd/2017forA.Y.2011-12ispartlyallowedwhereastheITA No.379/Ahd/2017forA.Y.2011-12isallowed. OrderpronouncedintheCourton30/10/2023atAhmedabad. Sd/Sd/-Sd/-Sd/- (MADHUMITAROY)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad:Dated30/10/2023 Manish