Mr. Rohit Batra, New Delhi V. ITO, New Delhi

ITA 3889/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3250 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 31-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 18-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Business income; Salary income; Opportunity of being heard; Principle of natural justice; Peak credit
• Section: 69; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3889/DEL /2013 ASSESSMENT YEAR: 2009-10 ROHIT BATRA, C/O KAPIL GOEL ADVOCATE, A-1/25, SECTOR-15, ROHINI, NEW DELHI-110085 (PAN:AFAPB6342R) VS ITO, WARD 20(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANTHARAM, ADV., SHRI DEEPAK O TSWAL, CA RESPONDENT BY : SHRI AMIT JAI N, SR. DR DATE OF HEARING : 21.11.2017 DATE OF PRONOUNCEMENT : 20.02.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 31.01.2013 PASSED BY THE LD . CIT (A)-XXII, NEW DELHI FOR ASSESSMENT YEAR 2009-10 WHEREIN VIDE THE IMPUGNED ORDER, THE LD. COMMISSION ER OF INCOME TAX (A) HAS CONFIRMED THE ADDITION OF RS. 30,83,400/- ADDED AS INCOME OF THE ASSESSEE U/S 69 OF ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 2 THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE A CT') AS INCOME FROM OTHER SOURCES BY THE ASSESSING OFFICER. 2. BRIEF FACTS OF THE CASE ARE THAT AS AGAINST THE RETURNED INCOME OF RS. 5,15,500/-, THE INCOME OF TH E ASSESSEE WAS ASSESSED AT RS.35,99,370/- AFTER MAKIN G AN ADDITION OF RS. 30,83,400/- BEING UNEXPLAINED CASH DEPOSITS IN THE ASSESSEES BANK ACCOUNT WITH ICICI BANK LTD. THE ASSESSEE HAD DECLARED THE SALARY INCOME RECEIVED FROM TWO COMPANIES NAMELY M/S EVERLEADING MARKETING PVT. LTD. AND M/S BIRLA SUNLIFE INSURANCE COMPANY LTD. AMOUNTING TO RS.1,80,000/- AND RS. 2,75,749/- RESPECTIVELY AND ALSO BUSINESS INCOME OF RS. 1,60,743/- BEING REMUNERATION AND INTEREST FROM PARTNERSHIP FIRM M/S SECURE FUTURE SECURITIES AND A LSO INTEREST INCOME OF RS. 431/- RECEIVED FROM HDFC BAN K LTD. AS SAVINGS BANK INTEREST. AS PER ITS DETAILS, THE ASSESSEE HAS DEPOSITED CASH OF RS. 30,83,400/- IN HIS SAVING BANK ACCOUNT WITH ICICI BANK LTD. AND THIS B ANK ACCOUNT HAD NOT BEEN DISCLOSED IN ITS RETURN OF INC OME. THE ASSESSEE WAS ASKED TO FILE BANK STATEMENT, SOUR CE OF CASH DEPOSITS, ITS TAX TREATMENT AND ALSO FILE COPY OF ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 3 STATEMENT OF AFFAIRS AS ON 31.03.2008 AND 31.03.200 9. AS PER STATEMENT OF AFFAIRS AS ON 31.03.2008, THE ASSESSEE DISCLOSED CASH AND BANK BALANCES AT RS. 28,25,212/-. THE ASSESSEE WAS ASKED TO FURTHER GIV E BREAK UP OF CASH AND BANK BALANCES BY THE ASSESSING OFFICER. IN RESPONSE, THE ASSESSEE SUBMITTED BEFOR E THE ASSESSING OFFICER THAT THE ASSESSEES MARRIAGE WAS SOLEMNISED IN JULY 2007 AND ON THE OCCASION OF MARRIAGE, HE HAD RECEIVED RS. 20,45,400/- AS GIFT F ROM VARIOUS FRIENDS AND RELATIVES WHICH WAS KEPT AS CAS H IN HAND DURING THE PREVIOUS FINANCIAL YEAR AND DEPOSIT ED IN THE BANK ONLY DURING THE YEAR UNDER CONSIDERATION F OR THE PURPOSE OF PURCHASE OF PROPERTY AND INVESTMENT IN SHARES. HOWEVER, THE ASSESSING OFFICER WAS OF THE OPINION THAT THIS SUBMISSION WAS ONLY AN AFTERTHOUG HT AS THE ASSESSEE HAD NOT FILED ANY WEALTH TAX RETURN FO R ASSESSMENT YEAR 2008-09 IN RESPECT OF THE CASH OF R S. 20,45,400/-. THE ASSESSING OFFICER ALSO NOTED THAT NO LIST OF FRIENDS AND RELATIVES HAD ALSO BEEN FILED I N RESPECT OF ALLEGED GIFTS RECEIVED AT THE TIME OF MARRIAGE. THE ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE COUL D NOT ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 4 EXPLAIN THE SOURCE OF REMAINING CASH DEPOSITS OF RS . 10,38,000/- (RS. 30,83,400/- MINUS RS. 20,45,400/-) . THE ASSESSING OFFICER PROCEEDED TO CONCLUDE THAT TH E ENTIRE CASH DEPOSITS AMOUNTING TO RS. 30,83,400/- REMAINED UNSUBSTANTIATED AND HE PROCEEDED TO TREAT THE SAME AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 2.1 AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE LD. COMMISSIONER OF INCOME TAX (A) WHO ALSO UPH ELD THE ADDITION AND NOW THE ASSESSEE HAS APPROACHED T HE ITAT AND HAS CHALLENGED THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX(A) BY RAISING THE FOLLOW ING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, LEARNED CIT-A ERRED IN NOT APPRECI ATING THAT LD AO DID NOT PROVIDED ADEQUATE OPPORTUNITY OF BEING HEARD TO REBUT THE PROPOSED INFERENCE BEFORE TAKING ADVERSE VIEW ON THE IMPUGNED ISSUE, AND HENC E THERE IS PALPABLE VIOLATION OF NATURAL JUSTICE AT A O'S LEVEL, (REFER SC TIN BOX CASE 249 ITR 216 SC) 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LEARNED CIT-A ERRED IN NOT EXAMINING ASSESSEE'S PLEA AFTER TAKING LD AO'S COMMENTS ON NE W EXPLANATION GIVEN BEFORE LD CIT-A THAT LOSS IN UNACCOUNTED/UNDISCLOSED BANK SHOULD BE NETTED AGAINST THAT IMPUGNED/ALLEGED CASH DEPOSITS IN BANK OF RS. 30,83,400/- ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 5 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LEARNED CIT-A ERRED IN NOT EXAMINING ASSESSEE'S PLEA AND CONFIRMING WHOLE ADDITION OF RS . 30,83,400 WITHOUT GIVING BENEFIT OF PEAK THEORY AND TELESCOPING EARLIER WITHDRAWALS INTO SUBSEQUENT DEP OSITS AND POSSIBLE ACCUMULATED CASH FROM PAST SAVINGS. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LEARNED CIT-A ERRED IN NOT EXAMINING ASSESSEE'S PLEA AND CONFIRMING WHOLE ADDITION OF RS . 30,83,400 ON BASIS OF IRRELEVANT GROUNDS AND PERVER SE FINDINGS AT PARA 8.4, WITHOUT ADJUDICATING CITED PR OVISION OF SECTION 56 WHICH TOTALLY EXEMPTS GIFTS RECEIVED ON MARRIAGE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LEARNED CIT-A ERRED IN NOT EXAMINING ASSESSEE'S PLEA AND CONFIRMING WHOLE ADDITION OF RS . 30,83,400 WITHOUT APPRECIATING THAT IT IS SETTLED P RINCIPLE 'WITNESS CAN LIE BUT DOCUMENT CANNOT' THAT IS DOCUMENTARY EVIDENCE HAS TO PREVAIL OVER ORAL IMPUTATIONS. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO, AMEND, MODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GRO UNDS STATED HEREIN ABOVE, EITHER BEFORE OR AT THE TIME O F HEARING OF THIS APPEAL. 3. LD. AR SUBMITTED THAT THERE WAS NO BASIS FOR THE LOWER AUTHORITIES TO DISBELIEVE THE ASSESSEES CLAIM OF G IFTS HAVING BEEN RECEIVED. IT WAS ALSO EMPHASIZED THAT THE GIFTS WE RE RECEIVED IN THE IMMEDIATELY PRECEDING FINANCIAL YEAR AND NOT DU RING THE YEAR UNDER CONSIDERATION AND, THEREFORE, THE SAME COULD NOT HAVE BEEN ADDED TO THE INCOME IN THIS YEAR. THE LD. AR DREW OUR ATTENTION TO PAGES 27-62 OF THE PAPER BOOK AND SUBMITTED THAT THESE PAGES CONTAIN THE LIST OF PEOPLE WHO HAD GIVEN CASH GIFTS ON THE OCCASION ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 6 OF MARRIAGE OF THE ASSESSEE. IT WAS SUBMITTED THAT THE CASH WHICH WAS DEPOSITED IN BANK REPRESENTED THE OPENING CASH BALANCE BROUGHT FORWARD FROM LAST YEAR AND, THEREFORE, THE SAME CANNOT BE CHALLENGED IN THE CURRENT YEAR. RELIANCE WAS PL ACED ON A NUMBER OF JUDGMENTS OF THE VARIOUS HONBLE COURTS I N SUPPORT OF THIS CONTENTION OF THE ASSESSEE. IT WAS ALSO SUBMI TTED THAT THE ASSESSEE WAS A REGULAR INCOME TAX RETURN FILER AND IT WAS NOT THE CASE THAT THIS WAS THE FIRST YEAR OF FILING OF RETU RN. IT WAS ALSO SUBMITTED THAT THE FACT THAT MARRIAGE OF ASSESSEE H AD TAKEN PLACE WAS ALSO NOT DISPUTED. IT WAS SUBMITTED THAT THE A DDITION SHOULD BE DELETED. 4. IN RESPONSE, THE LD. SR. DR SUBMITTED THAT THE A SSESSEE COULD NOT PROVE THE GENUINENESS OF THE TRANSACTION IN RESPECT OF THE ENTIRE DEPOSITS IN THE BANK. IT WAS ALSO SUBMI TTED THAT THE ASSESSEE HAD NOT BEEN FILING STATEMENT OF AFFAIRS I N THE PRECEDING YEARS WHICH COULD SUBSTANTIATE THE FACT THAT THE AS SESSEE WAS HAVING SUBSTANTIAL CASH IN HAND AT THE CLOSE OF THE PRECEDING ASSESSMENT YEAR. THE LD. SR. DR ALSO SUBMITTED THA T THE ASSESSEE HAD NOT DISCLOSED THE BANK ACCOUNT (ICICI) IN THE RETURN OF INCOME AND THE SAME WAS DETECTED BY THE DEPARTME NT ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAD THIS ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 7 DETECTION NOT BEEN MADE, THE ASSESSEE WOULD HAVE NO T DISCLOSED THE INCOME. HE ALSO UNDERLINED THE FACT THAT THE A SSESSEE HAD NOT EVEN DISCLOSED THE INTEREST EARNED ON THE SAVIN G BANK ACCOUNT MAINTAINED BY HIM WITH ICICI BANK (IMPUGNED ACCOUNT ) IN ITS RETURN OF INCOME. THE LD. SR. DR RELIED ON THE FIN DINGS OF THE LD. CIT (A) AND SUBMITTED THAT THE LD. CIT (A) HAD REAC HED THE CONCLUSION ONLY AFTER ANALYSING THE FACTS OF THE CA SE AS WELL AS AFTER PERUSING THE RELEVANT DOCUMENTS. IT WAS SUBM ITTED THAT THE ORDER OF THE LD. CIT (A) BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS UNDISPUTED THAT THE ADDITION OF RS. 30,83,400/- PERTAINS TO DEPOSITS MADE BY THE AS SESSEE IN AN UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE. ALTHOUGH , THE ASSESSEE HAS DISCLOSED INTEREST INCOME FROM SAVINGS BANK ACCOUNT WITH THE HDFC BANK LTD., HE HAS NOT DISCLOS ED THE INTEREST INCOME FROM ICICI BANK LTD. THEREFORE, FR OM THE CONDUCT OF THE ASSESSEE, IT IS APPARENT THAT THE ASSESSEE H AD NO INTENTION OF DISCLOSING THE IMPUGNED BANK ACCOUNT. FURTHER, WHEN THE ASSESSEE WAS REQUIRED TO EXPLAIN BEFORE THE ASSESSI NG OFFICER THAT IF HE HAD RECEIVED CASH AMOUNT OF RS. 20,45,400/- A S GIFTS FROM THE VARIOUS FRIENDS AND RELATIVES AND THAT CASH WAS KEPT AS CASH ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 8 IN HAND DURING THE PREVIOUS FINANCIAL YEAR, WHY THE ASSESSEE DID NOT FILE A WEALTH TAX RETURN IN RESPECT TO THIS CAS H, NO EXPLANATION WAS FORTHCOMING FROM THE ASSESSEE IN THIS REGARD. ALSO, SINCE THE ASSESSEE HAD NOT BEEN PREPARING AND FILING THE STAT EMENT OF AFFAIRS ON A REGULAR BASIS, THIS CLAIM CANNOT BE SU BSTANTIATED BY A STATEMENT OF AFFAIRS WHICH HAS BEEN FILED BY THE AS SESSEE POST THE INQUIRY BY THE ASSESSING OFFICER. AS FAR AS THE LI ST OF PERSONS WHO HAVE GIVEN GIFTS IN CASH TO THE ASSESSEE, AS CLAIME D BY THE ASSESSEE, IS CONCERNED IT IS SEEN THAT THIS LIST IS JUST A LIST PREPARED ON A RULED SHEET OF PAPER WITH THE NAMES A ND THE AMOUNTS. HOWEVER, THE VERACITY OF THIS LIST COULD NOT BE PROVED BEFORE THE LD. CIT (A) AND FURTHER, THE ASSESSING O FFICER HAS SPECIFICALLY MENTIONED THAT NO LIST OF FRIENDS AND RELATIVES WAS FILED BEFORE HIM. THE LD. CIT(A), WHILE REJECTING THE EVIDENTIARY VALUE OF THE LIST, HAS ALSO NOTED THAT THE LIST IS WRITTEN IN ONE HANDWRITING AND IN ONE FLOW WHEREAS THE GIFTS RELAT ED TO TWO DIFFERENT FUNCTIONS SAGAN AND SHADI . THE LD. CIT (A) HAS MADE SOME OTHER OBSERVATIONS ALSO REGARDING THE EVIDENTI ARY VALUE OF THE LIST IN PARA 8.5 OF THE IMPUGNED ORDER AND AFTE R GOING THROUGH THE SAME, WE FIND THAT THE LD. CIT (A) HAS REACHED A CORRECT FINDING THAT THIS LIST CANNOT BE RELIED UPON AS A P IECE OF EVIDENCE ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 9 AND THAT THE SAME DESERVES TO BE REJECTED. THE LD. CIT (A) HAS FURTHER DISCUSSED IN PARA 8.1 THAT THE ASSESSEE WAS REQUIRED BY HIM TO SPECIFY THE QUANTUM OF EXPENSES INCURRED BY HIM TOWARDS HIS WEDDING CEREMONY AND ALSO SPECIFY WHAT GIFTS WE RE GIVEN BY THE ASSESSEE TO OTHERS DURING THE YEAR UNDER CONSID ERATION AS WELL AS THREE EARLIER YEARS BUT NO DETAILS WERE FOR THCOMING FROM THE ASSESSEE EVEN AFTER GIVING OPPORTUNITY IN THIS REGARD. THUS, IT IS SEEN THAT THE ASSESSEE COULD NOT GIVE DETAILS OF MARRIAGE EXPENSES INCURRED BY HIM AND HAS CLAIMED THE ENTIRE GIFTS RECEIVED AS CASH LYING WITH HIM. THUS, AS FAR AS T HE CASH OF RS. 20,45,400/- IS CONCERNED, GIVEN THE FACT THAT THE A SSESSEE WAS ASKED TO SUBSTANTIATE HIS STAND BY THE LD. CIT (A) BY PROVIDING NUMEROUS OPPORTUNITIES AND MANY QUERIES WERE RAISED BY THE LD. CIT(A), WHICH THE ASSESSEE HAS FAILED TO REPLY, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) HAS RECORDED A PROPER FINDING OF FACT THAT THIS CASH OF RS. 20,45,400/- W AS RIGHTLY ADDED AS UNEXPLAINED AMOUNT U/S 69 OF THE ACT. 5.1 AS FAR AS THE REMAINING CASH BALANCE OF RS. 10, 38,000/- IS CONCERNED, IT IS SEEN THAT NO EXPLANATION WAS GIVEN FROM THE ASSESSEE IN THIS REGARD. IN THIS CASE ALSO IT IS S EEN THAT THE ASSESSEE HAS NOT RESPONDED TO THE QUERIES RAISED BY THE LD. CIT ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 10 (A) AND, THEREFORE, THIS AMOUNT ALSO DESERVES TO BE ADDED BACK TO THE INCOME OF THE ASSESSEE AND WE FIND THE ACTION O F THE LD. CIT (A) IN CONFIRMING THE ADDITION AS CORRECT. 5.2 IN SO FAR AS THE CONTENTION OF THE ASSESSEE THA T THE OPENING CASH BALANCE BROUGHT FROM THE EARLIER YEARS CANNOT BE CHALLENGED IN THE YEAR UNDER CONSIDERATION IS CONCERNED, IT IS OUR CONSIDERED OPINION THAT IN VIEW OF THE ASSESSEES FAILURE TO S UBSTANTIATE THE EXISTENCE OF CASH BALANCE AS ON THE CLOSE OF THE PR EVIOUS FINANCIAL YEAR, THE STATEMENT OF AFFAIRS AS ON 31.03.2008 LOS ES ITS PERSUASIVE VALUE. ALTHOUGH, THE LD. AR HAS RELIED U PON NUMEROUS JUDICIAL PRECEDENTS, IT IS OUR CONSIDERED OPINION T HAT THE SAME WOULD BE APPLICABLE ONLY IF THE GENUINENESS OF THE BROUGHT FORWARD CASH BALANCE COULD BE ESTABLISHED. SINCE W E HAVE ALREADY HELD THAT THE CLAIM OF THE ASSESSEE WITH RE SPECT TO THE CLOSING CASH BALANCE WAS FALSE, HE CANNOT BE PERMIT TED TO HIDE BEHIND THE JUDICIAL PRECEDENTS TO CONTEND THAT NO A DDITION COULD BE MADE IN RESPECT OF CLOSING CASH BALANCE OF THE P RECEDING ASSESSMENT YEAR. THEREFORE, WE DEEM IT FIT TO REJE CT THE GROUNDS RAISED BY THE ASSESSEE AND DISMISS THE ASSESSEES A PPEAL. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 11 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.02 . 2018. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: 20 TH FEBRUARY, 2018 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITA NO. 3889/DEL/2013 ASSESSMENT YEAR 2009-10 12