Smt. Parulben J. Shah, Surat V. The Income tax Officer,Ward-3(1), Surat

ITA 381/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2310 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL DHAKA
• Assessee Lawyers: RAJESH UPADHAYA
• Keywords: Income from undisclosed sources; Source of fund; Reasonable cause; Bonafide mistake
• Section: 143(3)

Judgement Text

SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 1 OF 7 , , INCOM TAX APPELLATE TRIBUNAL SURAT-BENCH-SURAT . . , . . , BEFORE SHRI C .M. GARG,JUDICIAL MEMBER AND SHRI O. P. MEENA, ACCOUNTANT MEMBER ITA NO.381/AHD/2016/SRT ASSESSMENT YEAR: 2009-10 SMT. PARULBEN J. SHAH, 1003, ANMOL COMPLEX, NR. SARGAM SHOPPPING CENTRALE, PARLE POINT SUYRAT 395 007 PAN: AQBPS 7037C V S . ITO WARD 3(1), SURAT APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAJESH M. UPADHYAY , ITP /RESPONDENT BY SHRI ANIL DHAKA, SR.DR / DATE OF HEARING: 05.04.2018 /PRONOUNCEMENT DATE 25 .04 .2018 ORDER PER O. P. MEENA, AM 1. THIS APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)II, SURAT DATED 04.11.2015 FOR THE ASSESSMENT YEAR 2009-10 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. DURING THE COURSE OF HEARING PROCEEDINGS, THE AUTHORISED REPRESENTATIVE HAS POINTED OUT THAT THERE IS DELAY IN FILING OF APPEAL BY 07 DAYS. IT WAS SUBMITTED THAT THE ORDER OF CIT(A) WAS SERVED ON 11.12.2015. THEREFORE, THE APPEAL WAS REQUIRED TO BE FILED BEFORE ITAT ON OR BEFORE 10.02.2016. HOWEVER, THE SAME IS FILED ON 17.02.2016 WHICH IS LATE BY 07 DAYS. IT WAS EXPLAINED THROUGH AFFIDAVIT THAT DELAY IS CAUSED DUE TO ILLNESS OF THE ASSESSEE ON ACCOUNT OF ORTHOPEDIC PROBLEM IN LEG. SHE IS A SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 2 OF 7 PHYSICALLY HANDICAPPED PERSON AND IN WINTER SEASON FACE THE HEALTH PROBLEMS. UNDER THESE CIRCUMSTANCES, SHE COULD NOT KEEP IN TOUCH WITH HER TAX CONSULTANT SHRI RAJESH M. UPADHYAY, WHO HAD PREPARED THE APPEAL MEMO AND OTHER DOCUMENTS TO BE FILED BEFORE THE TRIBUNAL. THE LD.DEPARTMENTAL REPRESENTATIVE (DR) HAS NO OBJECTION FOR IF DELAY IS CONDONED. CONSIDERING THE FACTS, WE ARE SATISFIED THAT THERE IS REASONABLE CAUSE FOR FILING THE APPEAL OF SMALL DELAY OF 07 DAYS. ACCORDINGLY, THE DELAY IN FILING OF APPEAL IS CONDONED. 3. GROUND NO.1 RELATES TO CONFIRMATION OF ADDITION OF RS.3,14,218/- BEING UNACCOUNTED DEPOSIT IN BANK ACCOUNTS. 4. THE PERUSAL OF AIR INFORMATION AND BANK STATEMENT REVEALED THAT THE ASSESSEE HAS DEPOSITED TOTAL AMOUNT OF RS.16,42,296/- IN THREE BANK ACCOUNTS WITH INDIAN OVERSEAS BANK INCLUDING THE SUM OF RS.10,37,850/- IN CASH. THE AO FOUND THAT THE ACCOUNT NO.18760100000091 WITH INDIAN OVERSEAS BANK WAS NOT DISCLOSED IN THE RETURN OF INCOME IN WHICH TOTAL DEPOSITS AMOUNT OF RS.16,42,296/-. IT WAS ALSO NOTED THAT THE ASSESSEE WAS MAINTAINING THREE BANK ACCOUNTS. THE AO, THEREFORE, MADE AN ADDITION OF RS.3,41,218/- WHICH WAS NOT FOUND EXPLAINABLE AFTER ALLOWING THE CREDIT OF RENT RECEIPTS CREDITED IN THESE BANK ACCOUNTS. 5. BEING AGGRIEVED, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(A) BEFORE WHOM THE ASSESSEE HAS CLAIMED THE DEPOSITS OF BANK ACCOUNT AS FOLLOWS: 6.3.2 ON THE PERUSAL OF THE RETURN OF INCOME FILED IN ITR 2 IT IS FOUND THAT AT COLUMN NO.12 OF PART B-TTI OF THE RETURN THE APPELLANT HAS ONLY MENTIONED 91 AGAINST THE BANK ACCOUNT NUMBER. THE APPELLANT HAS SHOWN CASH WITHDRAWALS FROM THE THREE BANK ACCOUNTS TO SHOW THE SOURCE OF THE DEPOSITS IN THE BANK ACCOUNT AS FOLLOWING: SOURCE OF FUND AMOUNT RENT INCOME 5,83,444 LOAN FROM BROTHER, SHRI RAJIV SHAH 11,48,000 SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 3 OF 7 CASH WITHDRAWAL FROM IOC BANK 91 3,62,000 CASH WITHDRAWAL FROM IOC BANK 20290 3,06,800 CASH WITHDRAWAL FROM IOC BANK 13103 2,82,500 LIC LOAN 1,00,000 TOTAL 27,81,744 HOWEVER, THE APPELLANT WAS NOT ABLE TO ESTABLISH THE LINK BETWEEN THE CASH WITHDRAWALS MADE FROM THE ABOVE 3 BANK ACCOUNTS VIS--VIS THE DEPOSITS MADE IN THESE ACCOUNTS. THE APPELLANT HAS SUBMITTED A CASH FLOW STATEMENT TO SHOW THAT THE BANK WITHDRAWALS WERE MADE FROM VARIOUS ACCOUNTS AND SUBSEQUENTLY DEPOSITED IN THE OTHER ACCOUNT. THE PERUSAL OF THE BANK STATEMENTS AND THE CASH FLOW STATEMENT DO NOT PROVE THE CLAIM OF THE APPELLANT AS THE AMOUNT OF WITHDRAWALS FROM THE BANK ACCOUNTS, DATES OF WITHDRAWALS, DATE OF DEPOSITS ETC. ARE TOTALLY UNRELATED AND NO CO-RELATION VIS A VIS A PURPOSE AND INTENTION OF WITHDRAWAL TO THE DEPOSIT IS ESTABLISHED. IN ABSENCE OF ANY DETAILS AND EVIDENCE TO ESTABLISH THAT THE WITHDRAWALS MADE FROM THE VARIOUS BANK ACCOUNTS WAS DEPOSITED IN THE OTHER BANK ACCOUNTS THE CONTENTION OF THE APPELLANT CANNOT BE ACCEPTED AND THE ADDITION MADE BY THE AO IS UPHELD AND THE GROUND OF APPEAL IS DISMISSED. 6. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER INSTRUCTIONS GIVEN UNDER THE RULES FOR FILING OUT FORM ITR 2, THE ASSESSEE IS UNDER OBLIGATION TO FILL UP THE AIR COLUMN IN CASE OF CASH DEPOSITS IN EXCESS OF RS.10 LAKHS. IF THIS CRITERIA IS APPLIED THEN BANK ACCOUNT SHOWN AT SL.NO.2 & 3 IN TABULAR FORM AT PAGE 4 OF RETURN OF INCOME IS OUTSIDE THE SAID CRITERIA. THE ASSESSEE HAS ALREADY SHOWN FIRST BANK ACCOUNT IN HER RETURN OF INCOME. THEREFORE, THE VERSION OF THE AO THAT THE ASSESSEE HAS NOT SHOWN 3 BANK ACCOUNTS IS FACTUALLY INCORRECT. IT WAS FURTHER SUBMITTED THAT RENT AS THE INCOME IS NOT UNDER DISPUTE WHICH STAND ACCEPTED BY THE AO. THE AUTHORISED REPRESENTATIVE (AR) FURTHER SUBMITTED THAT THE RENTAL INCOME OF RS.5,83,800/- AND INTEREST INCOME WERE ONLY SOURCE OF INCOME. THEREFORE, THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN MAKING ADDITION AND UPHOLDING THE SAME. 7. ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THE LINK BETWEEN THE CASH WITHDRAWALS MADE FROM THE BANKS VIS--VIS FROM CASH DEPOSIT MADE IN THESE BANK ACCOUNTS. SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 4 OF 7 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE THE MATERIAL ON RECORD AND FIND THAT THE ASSESSEE HAS NOT BEEN ABLE TO LINK BETWEEN THE CASH WITHDRAWALS MADE FROM THE 3 BANK ACCOUNTS AND DEPOSITS MADE THEREIN. DATES SHOWN IN THE CASH FLOW STATEMENT ALSO NOT MATCHING WITH THE AMOUNT OF WITHDRAWALS. THE DATES OF CASH WITHDRAWALS AND DATE OF WHICH ARE NOT FUND TO BE RECONCILED. IN SUCH CIRCUMSTANCES, WE HAVE NO REASON TO INTERFERE THE FINDINGS RECORDED BY THE LOWER AUTHORITIES. ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 9. GROUND NO.2 RELATES TO ADDITION OF RS.23,967/- BEING DIFFERENCE IN CARRY FORWARD OF CASH BALANCE BY NOT ACCEPTING THE FACT THAT CARRY FORWARD OF CASH BALANCE IS LESSER THAN THAT SHOWN IN THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD OPENING CASH BALANCE AT RS.4,12,858/- WHILE CLOSING BALANCE AS PER THE PREVIOUS BALANCE SHEET IS RS.4,36,825/-, THUS, THERE IS SHORTAGE OF CASH BALANCE OF RS.23,967/-. THE LD.AR CONTENDED THAT IF CARRIED FORWARD CASH BALANCE IS LESSER THAN THAT SHOWN IN THE RETURN OF INCOME THEN THERE CANNOT BE ANY ADDITION ON THIS ACCOUNT. 10. ON THE OTHER HAND, THE LD.SENIOR DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF LOWER AUTHORITIES. 11. WE HAVE CONSIDERED THE FACTS AND FINDINGS OF THE VIEW THAT THERE APPEARS TO BE INADVERTENT ERROR AND BONAFIDE MISTAKE ON THE PART OF THE ASSESSEE TO SHOW THE LESSER AMOUNT OF CARRY FORWARD OF CASH BALANCE. HOWEVER, THE SAME CANNOT BE MADE THE BASIS OF ADDITION AS THE SAME BEING SHORTAGE OF CASH, THEREFORE, THE ADDITION SO CONFIRMED BY THE LOWER AUTHORITIES IS DELETED. THIS GROUND OF APPEAL IS THEREFORE ALLOWED. SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 5 OF 7 12. GROUND NO.3 RELATES TO CONFIRMING THE ADDITION OF RS.7,68,759/- ON ACCOUNT OF MINUS CASH BALANCE IGNORING THE CONFIRMATION OF SHRI RAJIV SHAH WHO HAS CONFIRMED THE FACT THAT GIVING LOAN TO THE ASSESSEE BY WITHDRAWING THE SAME FROM HIS BANK ACCOUNT. ON THE PERUSAL OF THE CASH BOOK, THERE EXISTED A BOOK NEGATIVE CASH BALANCE OF RS.6,42,692/- AS ON 25.03.2009. THE CASH BOOK SHOWED NEGATIVE CASH BALANCE FROM 20.09.2008 TO 31.03.2009 WITH CLOSING NEGATIVE CASH BALANCE OF RS.5,87,962/- WHICH SHOWED THAT THE ASSESSEE WAS NOT HAVING CASH IN HAND BUT STILL INCURRING EXPENSE DEPOSITING CASH IN THE BANK AND DOING OTHER CASH TRANSACTIONS. THE AO, THEREFORE ADDED RS.7,68,759/- AS UNACCOUNTED INCOME. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHEREIN IT WAS STATED THAT THE ONLY SOURCE OF THE INCOME IS RENTAL INCOME AND INTEREST FROM SAVINGS BANK ACCOUNT. THE ASSESSEE IS NOT MAINTAINING ANY REGULAR BOOKS OF ACCOUNTS AS SHE FALLS IN THE CATEGORY OF NO ACCOUNT CASE. IT WAS SUBMITTED THAT AN AMOUNT OF RS.11,48,000/- WAS RECEIVED FROM SHRI RAJIV SHAH IN AUGUST 2008 AND THIS AMOUNT IS CONSIDERED TO BE PART OF CASH BALANCE AVAILABLE WITH THE APPELLANT DURING THE FINANCIAL YEAR 2008-09. DURING THE REMAND PROCEEDINGS, THE AO REITERATED THAT THE APPELLANT HAS PROVIDED SOURCE OF RECEIPT BUT HAS NOT PROVIDED NATURE OF THIS RECEIPT AND ALSO TO PROVIDE THE COPY OF BANK ACCOUNT WHERE THE SAID CASH IS CREDITED AND ALSO EXPLAINED THE NATURE OF SAID SUM. 13. IN APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE DID NOT PROVIDE ANY BANK STATEMENT WHEREIN THE AMOUNT OF RS.11,48,000/- HAS BEEN CREDITED IN HER ACCOUNT TO EXPLAINED THE NEGATIVE CASH BALANCE. THE LEDGER STATEMENT FILED BY SHRI RAJIV SHAH AND THE BANK STATEMENT SHOWS THAT THE APPELLANT HAS BEEN GIVEN CHEQUE FOR RS..11,48,000/- BEARING CHEQUE NO.940547 DRAWN ON INDIAN OVERSEAS BANK OF RS.10,00,000/- ON 14.08.2008 AND CHEQUE NO.940550 DRAWN ON INDIAN OVERSEAS SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 6 OF 7 BANK OF RS.1 LAKH ON 19.08.2008. HOWEVER, THE CIT(A) OBSERVED THAT THE PERUSAL OF BANK ACCOUNT SHOW THAT CHEQUE NO.940547 OF RS.10 LAKHS IS SELF-CHEQUE DRAWN IN CASH ON 14.02.2008 AND CHEQUE NO.940550 IS AGAIN A BEARER CHEQUE DRAWN IN CASH IN NAME PARULBEN J SHAH. THEREFORE, THE CONTENTION OF THE ASSESSEE IS CONSIDERED TO BE INCORRECT. ACCORDINGLY, THE ADDITION MADE BY THE AO WAS UPHELD. 14. BEING AGGRIEVED, THE ASSESSED FILED THIS APPEAL BEFORE US. THE LD.COUNSEL CONTENDED THAT THIS SUM OF RS.11,48,000/- RECEIVED FROM SHRI RAJIV SHAH WAS NOT DEPOSITED IN ANY BANK ACCOUNT AS THE AMOUNT WAS RECEIVED THROUGH BEARER CHEQUES. THE COPY OF BANK STATEMENT SHRI RAJIV SHAH BANK CASH BOOK AND BANK STATEMENT HAS BEEN FILED BEFORE THE LOWER AUTHORITIES WHICH SHOWS THAT THIS AMOUNT IS PART OF CASH FLOW STATEMENT WHICH EXPLAINS THAT THE EXISTED NO NEGATIVE CASH FLOW BALANCE. 15. THE LD.COUNSEL FURTHER DRAWS OUR ATTENTION TO THE CASH FLOW STATEMENT OF FINANCIAL YEAR 2008-09 AT PAPER BOOK, PAGE NO.78 TO 81 WHEREIN THE AMOUNT RECEIVED FROM SHRI RAJIV SHAH AT RS.10 LAKHS AND RS.1,48,000/- BY CHEQUE NO.940547 DATED 14.08.2008 AND RS.1,48,000/- CHEQUE NO.940540 ARE REFLECTED. THE LD.COUNSEL ALSO FILED COPY OF BANK STATEMENT OF INDIAN OVERSEAS BANK AND WHICH PLACED AT PAPER BOOK, PAGE NO.82 TO 89 WITH COPY OF CONFIRMATION OF SHRI RAJIV SHAH WHEREIN THE WITHDRAWAL BY SELF-CHEQUE OF THE AFORESAID AMOUNT IS REFLECTED IN HIS BANK STATEMENT. 16. ON THE OTHER HAND, THE LD.SENIOR DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT CIT(A) WAS RIGHT IN CONFIRMING THE ADDITION. THE ASSESSEE HAS FAILED TO PROVIDE ENTRY OF RECEIPTS FROM SHRI RAJIV J SHAH AND THE AMOUNT GIVEN BY WAY OF CHEQUES SHOULD HAVE BEEN REFLECTED IN HER BANK ACCOUNT. SMT.PARULBEN J. SHAH IN ITA NO.381 OF 2016 FOR A.Y. 2009-10 PAGE 7 OF 7 17. WE HAVE CONSIDERED THE FACTS AND PERUSED THE MATERIAL ON RECORD AND HEARD THE PARTIES. ON CAREFUL CONSIDERATION AND CONSIDERING THE CONFIRMATION OF SHRI RAJIV J SHAH AND GOING THROUGH THE BANK STATEMENT WE FIND THAT THERE IS A CASH WITHDRAWAL OF RS.10 LAKHS ON 14.08.2008 AND RS.1,48,000/- ON 19.08.2008 BY SELF-BEARER CHEQUE. THE ASSESSEE HAS SHOWN THIS AMOUNT IN HER CASH FLOW STATEMENT. THE BANK STATEMENT OF SHRI RAJIV J SHAH ALSO REFLECTS THE SAID AMOUNT AS WAS GIVEN TO THE ASSESSEE BY BEARER CHEQUE, THEREFORE, SINCE THE AMOUNT WAS WITHDRAWN BY BEARER CHEQUE, HENCE, THE SAME CANNOT FIND PLACE IN THE BANK ACCOUNT OF THE ASSESSEE. SINCE THE CASH RECEIPTS ARE DULY SUPPORTED BY CONFIRMATION OF THE PARTY AND HIS BANK ACCOUNT OF SHRI RAJIV J SHAH, THEREFORE, LOWER AUTHORITIES ARE NOT JUSTIFIED IN TREATING THE SAME AS UNEXPLAINED AND MORE OVER MAKING ADDITION OF NEGATIVE CASH BALANCE. THEREFORE, THE ADDITION OF RS.7,68,759/- MADE ON THIS ACCOUNT DELETED. OUR VIEW IS ALSO SUPPORTED BY THE DECISION IN THE CASE OF ITO VS. MS.DEEPAL SEGHAL IN ITA NO.660/DEL/2012 DATED 05.09.2014 WHICH WERE CITED BY THE LD.COUNSEL IN HIS SUPPORT. THIS GROUND IS THEREFORE, ALLOWED. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-04-2018. SD/- SD/- ( . . /C.M. GARG) ( . . / O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / SURAT, DATED: 25 TH APRIL, 2018 S.GANGADHARA RAO COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT