ITO, Meerut V. Shri Mahesh Chand Saini, Meerut

ITA 3874/DEL/2013

• Counselvise Citation: 387420114 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 23-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 18-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: V K GOEL; K K GARG
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

ITA NO. 3874/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. N O. 38 7 4 /DEL/20 1 3 A.Y. : 200 9 - 10 INCOME TAX OFFICER, WARD 1(4), NEW DELHI VS. SHRI MAHESH CHAND SAINI, 117, VILL-KHADAULI, ROHTA ROAD, MEERUT (PAN:BUOPS1773H) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR ASSESSEE BY : SH. V.K. GOEL, ADV. & SH. K.K. GARG, ADV. DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 23 2323 23- -- -11 1111 11- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 0 00 03 33 3- -- -1 11 12 22 2- -- -201 201 201 2015 55 5 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), MEERUT DATED 14.3.2013 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER:- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW AND IN FACTS IN DELETING THE ADDITION OF RS.37,54,000I- MA DE BY THE A.O. ON ALC OF UNEXPLAINED CASH CREDIT IN THE BANK ALC OF THE ITA NO. 3874/DEL/2013 2 ASSESSEE. LD. CITCA) HAS FAILED TO APPRECIATE THAT THE ASSESSEE'S CLAIM OF DEPOSITING THE SUCH ALLEGED AMO UNT IN HIS SAVING ACCOUNT BY GETTING ADVANCE FOR THE SALE OF D IFFERENT PROPERTIES WAS ,NOT CORROBORATED BECAUSE MENTIONING IN SALE DEEDS THAT SALE CONSIDERATION WAS RECEIVED IN CASH BEFORE DATE OF SALE DEEDS IN NOT AN EVIDENCE THAT THE AMOU NT WAS RECEIVED AN PARTICULAR DATE OF DEPOSIT IN BANK OR P RIOR TO THAT AND THUS ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM THAT SOURCE OF DEPOSIT WAS ADVANCE RECEIVED AGAINST THE SALES. MOR EOVER, LD.CIT(A) HAS ALSO ERRED IN RELYING UPON THE ASSESS EE'S CLAIM THAT SOURCE OF SOME DEPOSITS WAS EARLIER CASH WITHD RAWAL, FOR WHICH NO EVIDENCE WAS PRODUCED BY THE ASSESSEE. THU S, THE ASSESSEE DID NOT DISCHARGE THE ONUS CAST ON HIM ULS 68 OF IT ACT, 1961. RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS;- I. CIT VS. ASHOK TIMBER INDUSTRIES (CAL) 125 ITR 336 II. BASANTIPUR TEA CO. (P) LTD. VS. CIT (CAL) 180 ITR 261 III. CIT VIS KORLAY TRADING CO. LTD. (CAL.) 232 IT R 820. IV. KRISHAN KUMAR JHANB V/S ITO AND ANR (PUNJAB & HARYANA) 17 DTR 249' V. M/S SEJAI INTERNATIONAL LTD V/S CIT MEERUT (ALL .) APPEAL NO.306 OF2010. VI. CIT V S DURGA PRASAD MORE, 82 ITR 540(SC) VII. CIT VS P. MOHNAKALA, 291 ITR 278 (SC) ITA NO. 3874/DEL/2013 3 VIII.CIT VS SUMATI DAYAL, 214, ITR 801 (SC) IX. ITO VS DIZA HOLDINGS PVT. LTD. 255 ITR 573 (KER LA) 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, MODIFY AND / OR DELETE ANY GROUND(S) OF APPEAL. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE COMMISSIONER OF INCOME TAX (A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RET URN OF INCOME IN THIS CASE WAS FILED ON 19.3.2010 AT INCOME OF RS. 1,42,620/-. TH E CASE WAS PROCESSED U/S. 143(1) ON THE RETURNED INCOME. LATER ON THE CASE W AS SELECTED UNDER SCRUTINY THROUGH AIR DATA TO VERIFY THE CASH DEPOSITS AT RS. 37.54 LACS IN SAVING BANK A/C AND THE NOTICE U/S. 143(2) WAS ISSUED ON 24.9. 2010, AND OTHER STATUTORY NOTICES WERE ISSUED FROM TIME TO TIME. IN COMPLIANC E TO THESE NOTICES, AUTHORISED REPRESENTATIVES ATTENDED THE PROCEEDINGS AND FILED THE WRITTEN SUBMISSION AND OTHER DOCUMENTS WHICH WERE EXAMINED BY THE AO. THE AO OBSERVED THAT THE ASSESSEE HAS NEVER BEEN ABLE TO PRODUCE ANY EVIDENC E/ DOCUMENT WHICH COULD PROVE THAT ANY DEPOSIT HAS BEEN MADE INTO THE BANK A/C. MOREOVER, THE ASSESSEE HAS NOT PRODUCED ANY PERSON AS REQUIRED VI DE ORDER SHEET ENTRY DATED 13.12.2011. THE AO FURTHER OBSERVED THAT THE DETAIL S OF SALE DEEDS ETC., NO DATE OR NO AMOUNT TALLIES WITH THE BANK A/C OF THE ASSES SEE WHICH COULD PROVE THE TOTAL POSITION OF DEPOSITS IN THE BANK A/C, THEREFO RE, HE ADDED BACK THE AMOUNT TO THE TUNE OF RS. 37,54,000/- INTO THE INCOME OF T HE ASSESSEE U/S. 68 OF THE ACT AND COMPLETED THE ASSESSMENT AT AN INCOME OF RS . 38,96,620/- VIDE ORDER DATED 30.12.2011. PASSED U/S. 143(3) OF THE I.T. AC T, 1961. ITA NO. 3874/DEL/2013 4 4. AGGRIEVED WITH THE AFORESAID ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 13.3.2013 HA S ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REIT ERATED THE CONTENTIONS RAISED BY THE REVENUE IN ITS GROUNDS OF APPEAL. 7. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE REL IED UPON THE ORDER OF THE LD. CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS, ORDERS OF THE REVENUE AUTHORITIES. WE FIND THAT LD. CIT(A) HAS ADJUDICATED THE ISSUE IN DISPUTE VIDE PARA NO. 2.2 TO 2.4 AS UNDER:- 2.2 THE RELEVANT FACTS ARE THAT DURING THE ASSESS MENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE WAS HA VING A SAVINGS BANK ACCOUNT WITH UBI, MEERUT AND HAD DEPOS ITED CASH AGGREGATING TO RS. 37,54,000/- IN FIVE INSTALL MENTS IN THE MONTH OF APRIL, 2008 AND ONE INSTALMENT IN THE MONTH OF MAY, 2008. IN RESPONSE TO THE QUERY MADE IN THIS RE GARD, IT WAS EXPLAINED THAT THE DEPOSITS WERE EITHER MADE FR OM EARLIER WITHDRAWALS FROM THE SAME BANK ACCOUNT OR F ROM THE CONSIDERATION RECEIVED ON SALE OF LAND. THOUGH IT H AS NOT BEEN RECORDED IN THE ASSESSMENT ORDER, APPARENTLY T HE EXPLANATION WAS THAT THE FATHER OF THE ASSESSEE WAS OWNER OF SUBSTANTIAL PARCELS OF LAND AND HAD APPOINTED HIS P OWER OF ATTORNEY HOLDER. IN PURSUANCE OF THE SAME, THE ASSE SSEE HAD EFFECTED SALES OF LAND. THE AO HAS STATED THAT THE ASSESSEE ITA NO. 3874/DEL/2013 5 WAS NOT ABLE TO PRODUCE ANY EVIDENCE TO JUSTIFY THE DEPOSITS IN THE BANK ACCOUNT. IT IS NOTED THAT IN THE ASSESS MENT ORDER ITSELF, THE AO STATES THAT DETAILS OF SALE DEEDS (P RESUMABLY DATES ON WHICH THE SALE DEEDS HAD BEEN EXECUTED) DO NOT TALLY WITH THE BANK ACCOUNT. THEREFORE, THE AO HELD THAT THE ENTIRE DEPOSIT IN THE BANK ACCOUNT WAS UNEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE INCOME TAX ACT. DURING THE APPEAL PROCEEDINGS, IT WAS EXPLAINED THAT THE ASSESSEE'S F ATHER HAD GIVEN HIM A POWER OF ATTORNEY FOR SELLING HIS AGRIC ULTURAL LAND. INITIALLY, AN UNREGISTERED POWER OF ATTORNEY AUTHEN TICATED BY A NOTARY ON 08.02.2008 HAD BEEN EXECUTED. SUBSEQUEN TLY, REGISTERED POWER OF ATTORNEY WAS EXECUTED ON 03.06. 2008. COPIES OF THESE DOCUMENTS HAVE' BEEN PROVIDED. 17 S ALE DEEDS WERE EXECUTED BY VIRTUE OF THE POWER OF ATTOR NEY. THESE DEEDS WERE EXECUTED IN THE MONTHS OF JUNE, JU LY, SEPTEMBER, NOVEMBER AND DECEMBER 2008 AND IN MARCH 2009. THE SALE CONSIDERATION RANGED FROM RS. 1,01,0 00/-- TO RS. 2,73,000. IN ALL THESE SALE DEEDS EXCEPT TWO DE EDS, IT HAS BEEN RECORDED THAT THE SALE CONSIDERATION HAS A LREADY BEEN PAID TO THE VENDOR MEANING THEREBY THAT THE RE CEIPT OF MONEY IN RESPECT OF SUCH SALE DEEDS WAS PRIOR TO TH E DATE ON WHICH SUCH DEEDS HAVE BEEN EXECUTED. IN THE SALE DE EDS EXECUTED ON 06.03.2009 AND 19.06.2008, IT HAS BEEN MENTIONED THAT THE CONSIDERATION WAS BEING PAID AT THE TIME OF EXECUTION OF THE SALE DEED. COPIES OF ALL THE SA LE DEEDS HAVE BEEN FURNISHED DURING THE APPEAL PROCEEDINGS. ALL ITA NO. 3874/DEL/2013 6 THESE DOCUMENTS WERE REFERRED TO THE AO AND A REMAN D REPORT IN THIS REGARD HAS BEEN RECEIVED VIDE LETTER DATED 06.02.2013. FROM THE REMAND REPORT, IT APPEARS THAT THE BASIC OBJECTION OF THE AO IS THAT THE MONEY HAD BEE N DEPOSITED IN THE BANK ACCOUNT ON DATES WHICH WERE P RIOR TO THE DATES ON WHICH THE SALE DEEDS HAVE BEEN EXECUTE D. IN THE OPINION OF THE AO, THE ONUS LIES ON THE ASSESSE E TO PROVE THE' IDENTITY OF THE CREDITOR, THE GENUINENESS OF T HE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR FROM WHOM ADVANCES HAVE BEEN SHOWN. IN THE REJOINDER TO THE REMAND REP ORT, IT HAS BEEN POINTED OUT THAT ALL DOCUMENTS INCLUDING T HE SALE DEEDS HAD BEEN FURNISHED DURING THE ASSESSMENT PROCEEDINGS. THE SALE DEEDS BEAR THE PHOTO OF THE P ERSON AND HIS ADDRESS. ALL THE PERSONS IN WHOSE FAVOUR TH E DEEDS HAVE BEEN EXECUTED HAD APPEARED BEFORE THE SUB REGI STRAR, MEERUT WITH TWO WITNESSES. THEY HAD CONFIRMED THE C ONTENTS OF THE SALE DEEDS AFTER WHICH THE SUB REGISTRAR HAD REGISTERED THE DOCUMENT. IF HE AO WAS NOT SATISFIED REGARDING THE GENUINENESS OF THE TRANSACTION, APPROPRIATE FIELD E NQUIRIES OUGHT TO HAVE BEEN CONDUCTED. 2.3 THE FACTS OF THE CASE HAVE BEEN CONSIDERED. IT IS NOTED THAT THE FATHER OF THE ASSESSEE HAD EXECUTED A POWE R OF ATTORNEY IN FEBRUARY 2008 AUTHORIZING THE ASSESSEE TO RECEIVE SALE CONSIDERATION FOR PROPERTY AND EXECUTE SALE DEED FOR THE SAME. SUBSEQUENTLY, ANOTHER POWER OF A TTORNEY, WHICH WAS RE IS REGISTERED, GRANTING THE SAME AUTHO RITY TO THE ASSESSEE WAS EXECUTED BY THE FATHER IN JUNE, 2008. OUT OF ITA NO. 3874/DEL/2013 7 THE AGGREGATE CASH DEPOSITS IN THE BANK ACCOUNT, CONSIDERATION RECEIVED PURSUANT TO THE SALE DEEDS AGGREGATING RS. 22,70,0001- IS STATED TO HAVE BEEN DEPOSITED. IT IS CLARIFIED THAT THE AGGREGATE SALE CONSIDERATION RECEIVED PURSUANT TO THE SALE DEEDS IN THE YEAR UND ER CONSIDERATION WAS RS. 28,78,000/-. THE BALANCE AMOU NT OF DEPOSITS IN THE BANK ACCOUNT REPRESENTS WITHDRAWAL MADE FROM THE SAME BANK ACCOUNT WHICH IS EVIDENCED BY TH E BANK STATEMENT. PARTICULAR REFERENCE IS MADE TO THE DEPO SIT OF RS. 19,50,000/- ON 12.5.2008 WHICH HAS BEEN EXPLAI NED BY RS. 3,00,000/- BEING CASH WITHDRAWAL FROM THE BA NK ACCOUNT MADE ON 30.04.2008, , RS. 50,000/- BEING TH E PARTIAL CASH WITHDRAWAL FROM THE BANK ACCOUNT OF R S. 2,00,000 MADE ON 01.05.2008, RS 11,50,000/- BEING CASH WITHDRAWAL FROM THE BANK ACCOUNT MADE ON 05.05.2008, BESIDES RS. 4,50,000/- RECEIVED IN RESP ECT OF SALE DEEDS EXECUTED ON 03.11.2008, 05.12.2008 AND 06.10.2008. ON A SPECIFIC DIRECTION, A CERTIFICATE HAS ALSO BEEN OBTAINED FROM THE BANK THAT THE WITHDRAWAL OF RS. 11,50,000/-, REFERRED TO ABOVE, WAS IN CASH. AS REG ARDS THE SALE DEEDS, ALL THE THREE SALE DEEDS RECORD THAT TH E CONSIDERATION FOR THE SAME HAD BEEN PAID TO THE AS SESSEE PRIOR TO THEIR EXECUTION. IN VIEW OF THE CATEGORICA L STATEMENT IN MOST OF THE SALE DEEDS THAT THE AMOUNT HAD BEEN REC EIVED PRIOR TO THE EXECUTION OF SUCH DEEDS, THE OBJECTION OF THE AO THAT THE DATE OF THE SALE DEED AND THE DATE OF THE DEPOSIT OF CASH IN THE BANK ACCOUNT DOES NOT TALLY, IS NOT VAL ID. IT IS ITA NO. 3874/DEL/2013 8 NOTED THAT THE AO HAS NOT DOUBTED THE GENUINENESS O F THE SALE DEEDS OR THE OWNERSHIP OF THE LAND BY THE FAT HER OF THE ASSESSEE. MOREOVER, THE ENTIRE TRANSACTION IS EVIDE NCED BY THE SUB-REGISTRAR WHO IS A GOVERNMENT AUTHORITY AND THEREFORE, THE EVIDENTIARY VALUE OF THE SALE DEEDS CANNOT BE LIGHTLY DISMISSED. IF INDEED THE AO HAD ANY DOUBT R EGARDING THE GENUINENESS, HE WAS FREE TO SUMMON THE COUNTERP ARTIES TO THE SALE DEEDS OR EVEN MAKE ENQUIRIES FROM THE OFFI CE OF THE SUB REGISTRAR. UNDER THE CIRCUMSTANCES, IT IS HELD THAT THE SOURCE OF CASH DEPOSITED HAS BEEN ADEQUATELY EXPLAI NED BY THE ASSESSEE AND SUCH DEPOSITS CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE. HOWEVER, THE IS SUE OF TAXABILITY OF CAPITAL GAINS, IF ANY, IN THE CASE OF THE FATHER OF THE ASSESSEE MAY HAVE TO BE EXAMINED AND THE AO MAY CONSIDER INTIMATING THE AO HAVING JURISDICTION OVER THE CASE OF THE FATHER, SHRI CHANDRA BHAN, TO TAKE APPROPRIA TE ACTION IN THIS REGARD. 2.4 GROUND NO.1 IS ALLOWED. 9 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS EXPLAINED ABOVE, WE FIND CONSIDERABLE COGENCY IN THE FINDING OF THE LD . CIT(A) THAT THE SOURCE OF CASH DEPOSITED HAS BEEN ADEQUATELY EXPLAINED BY THE ASS ESSEE AND SUCH DEPOSITS CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSE SSEE. AS REGARDS THE ISSUE OF TAXABILITY OF CAPITAL GAINS, IS CONCERNED, WE NOTE THAT LD. CIT(A) HAS RIGHTLY HELD THAT THE ISSUE OF TAXABILITY OF CAPITAL GAINS , IF ANY IN THE CASE OF THE FATHER OF THE ASSESSEE, THE AO MAY HAVE TO BE EXAMINED AND TH E AO MAY CONSIDER INTIMATING THE AO HAVING JURISDICTION OVER THE CASE OF THE FATHER, SHRI CHANDRA ITA NO. 3874/DEL/2013 9 BHAN, TO TAKE APPROPRIATE ACTION IN THIS REGARD. TH EREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDING OF THE LD. CIT (A) ON THE ISSUE IN DISPUTE, HENCE, WE UPHOLD THE SAME AND DISMISS THE GROUND RAISED BY THE REVENUE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/12/2015. SD/- SD/- [ [[ [PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 03/12/2015 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES