Shri Sarvesh Gupta L/R Late Smt. Sandhya Gupta, Bhopal V. THE ITO 1(1), Bhopal

ITA 420/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5658 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 08-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHMD JAVED
• Assessee Lawyers: PREETI PATWA CAS
• Keywords: Additional evidence
• Section: 143(3); 131; 69; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI SARVESH GUPTA L/HEIR OF LATE SMT. SANDHYA GUPTA BUNGALOW NO.8 , PRIYANKA NAGAR , NR SANKAR NAGAR KOLAR ROAD BHOPAL VS. INCOME TAX OFFICER 1(1) BHOPAL APPELLANT RESPONDENT PAN: AELPG 6590 C APPELLANT BY SHRI MANEESH VAIDYA AND SMT. PREETI PATWA CA`S RESPONDENT BY SHRI MOHMD. JAVED, SR. (DR) DATE OF HEARING 08.11.2016 DATE OF PRONOUNCEMENT 08.11.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. 1. THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER O F INCOME TAX (APPEALS) - I BHOPAL DTD, FILES THIS APPEAL. 22.01.2016 FOR THE AS SESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) GROSSLY ERRED IN HOLDING THE VIEW THAT CREDIT WORTH INESS OF ALL THE SIX PERSON WHO ADVANCED LOANS TO THE APPELLANT COULD NOT BE ESTABLISHED AND THE GENUINENESS OF ALL THESE TRANSACTIONS ALSO COULD NOT BE I.T.A. NO.420/IND/2016 ASSESSMENT YEAR:2011-12 I.T.A.NO. 420/IND/2016 A.Y.:2011-12 SHRI SAVESH GUPTA, L/H OF SMT. SANDHYA GUPTA BHOPAL PAGE 2 OF 7 PROVED, AND FURTHER THAT SOURCE OF DEPOSIT OF CASH OF RS. 7,50,000/- IN TO THE BANK ACCOUNT OF THE APPELLANT WHICH IS ATTRIBUTABLE TO, AND EMANATED FROM CORPUS FUND OF THE FAMILY IS NOT CORROBORA TED BY ANY KIND OF EVIDENCE/ PROOF. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) GROSSLY WAS TOTALLY UNJUSTIFIED IN CONFIRMING THE AD DITION MADE BY THE ASSESSING OFFICER UNDER SECTION 69 TOTALLING/ AMOUNT ING TO RS. 25,75,600/- WHICH MAY KINDLY BE DELETED. 2. SINCE, THE ABOVE GROUND DEALS WITH COMMON ISSUE AND INTERCONNECTED, HENCE, SAME BEING DEALT WITH TOGETHER. 3. SUCCINCTLY, THE FACTS AS CULLED OUT FROM THE ORDER O F LOWER AUTHORITIES ARE THAT THE ASSESSEE, WAS AN ADVOCATE BY PROFESSION, FILED R ETURN OF INCOME ON 02.12.2012 DECLARING TOTAL INCOME AT RS. 5,08,540/- WHICH WAS ASSESSED AT RS. 32,16,270/- VIDE ORDER DATED 27.08.2012 UNDER SECTI ON 143(3) OF THE ACT. IT WAS NOTICED TO THE ASSESSEE HAS CASH DEPOSITS IN HER SAV ING BANK ACCOUNT AT RS. 25,75,600/- DURING THE YEAR UNDER CONSIDERATION. TH E SOURCE OF THE DEPOSITS WAS CLAIMED AS LOANS FROM SHRI VIKRANT GUPTA RS. 2 LA KH , SMT. KRISHNA GUPTA RS. 2.50 LAKH , SHRI SANDESH GUPTA RS.1.75 LAKH , S HRI ABHISHEK GUPTA RS. 1.50 LAKH , SHRI NEERAJ GUPTA RS. 2 LAKH AND CORPUS FUND R S. 7.50 LAKH AND OPENING CASH BALANCE OF RS. 8,33,350/- BESIDE PROFESSIONAL REC EIPTS S OF RS. 1,01,200/- TOTALLING TO RS. 28,09,550/-. HOWEVER, NO CONFIRMAT ION WAS FILED FROM THE SIX CREDITORS, HENCE THE AO HELD THAT IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF TRANSACTIONS IS NOT PROVED. THE AO ALSO NOTED THA T THE ASSESSEE FAILED TO I.T.A.NO. 420/IND/2016 A.Y.:2011-12 SHRI SAVESH GUPTA, L/H OF SMT. SANDHYA GUPTA BHOPAL PAGE 3 OF 7 EXPLAIN THE SOURCE OF CASH AMOUNTING TO RS.7,50,000/ - CLAIMED TO BE AVAILABLE WITH THE ASSESSEE ON ACCOUNT OF CORPUS FUND OF HUF. HENCE ADDITION OF RS. 25,75,600/- WAS MADE UNDER SECTION 6 9 OF THE ACT AS UNEXPLAINED CASH DEPOSITS IN SAVING BANK ACCOUNT. 4. BEING, NOT SATISFIED, THE ASSESSEE FILED AN APPEAL BE FORE THE LD. CIT (A). DURING THE COURSE OF APPELLATE PROCEEDINGS, ADDITIONAL EVIDE NCE WERE FILED ON WHICH REMAND REPORT WAS CALLED FOR. DURING THE COURS E OF REMAND PROCEEDINGS, THE AO RECORDED THE STATEMENT OF ALL TH E SIX-PERSON U/S. 131 OF THE ACT AND DOUBTED THE CREDITWORTHINESS OF SHRI ABH ISHEK GUPTA ONLY. HOWEVER, LD. CIT (A) HAS ENDORSED THE VIEW OF THE A .O. AND OBSERVED THAT AFFIDAVITS FILED ARE SELF-SERVING DOCUMENTS AND AFTE R THOUGHT, ACCORDINGLY, ADDITION WAS CONFIRMED. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE WAS NOT KEEPING WELL AND WAS SUFFERING FROM MULTIPLE AILMENTS AN D SHE PASSED AWAY ON 15.02.2015. SHE WAS CONTEMPLATING INVESTMENT IN S OME PROPERTY, WHICH WAS NOT MATERIALIZE, BUT SINCE THERE WAS SHORTAGE OF FUNDS AVAILABLE WITH THE ASSESSEE. SHE AVAILED LOANS FROM RELATIVES WITHIN T HE FAMILY FROM 6 PERSONS AMOUNTING TO RS. 11,25,000/-. THE LEARNED COUNSEL FU RTHER SUBMITTED THAT IN REMAND REPORT, THE AO HAS ACCEPTED THE IDENTITY OF A LL 6 LOAN CREDITORS EXCEPT CREDITWORTHINESS OF ALL EXCEPT SHRI ABHISHEK G UPTA. WITH REGARDING TO OBSERVATION THAT DOCUMENTS ARE SELF-SERVING, THE LEAR NED COUNSEL, SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE HAD I.T.A.NO. 420/IND/2016 A.Y.:2011-12 SHRI SAVESH GUPTA, L/H OF SMT. SANDHYA GUPTA BHOPAL PAGE 4 OF 7 ADMITTED BEFORE THE AO THAT SHE HAD RECEIVED LOAN FRO M 6 FAMILY MEMBERS, BUT DUE TO HER ILLNESS SHE COULD NOT FILED THE SAME. THE APPEARANCE OF ALL THE 6 PERSON BEFORE THE AO AND THEIR ADMISSION BEFORE THE A O IN STATEMENT AND FILING DOCUMENTS LIKE PAN, SALARY/ PENSION SHEETS IND ICATES THAT LOANS WERE GENUINE. THE LEARNED COUNSEL ALSO SUBMITTED THAT THE L/H HAD RETURNED THE LOANS TO CREDITORS THROUGH BOOKING CHANNEL, WHICH AR E SOUGHT TO BE PRODUCED AS ADDITIONAL EVIDENCE. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE UNDER MISCONCEPTION USED TERM OF COR PUS FUND BEFORE THE AO , BUT THE FACT THAT SMT. KALAWATI GUPTA, MOTHER-IN LAW OF THE ASSESSEE, IN HER WILL (PAPER BOOK PAGE 4 4) STATED THAT IN CASE O F HER DEATH SALE PROCEEDS SHOULD BE KEPT IN HOUSE AND UTILISED IN CASE OF NEED. AS PER WILL CUSTODIAN OF WILL WAS HUSBAND OF THE ASSESSEE. HENC E, THERE WAS NO QUESTION OF KEEPING RECORDS OF HUF, AS MONEY WAS KEPT WITH THE ASSESSEE HERSELF. THE ASSESSEE HAD PRODUCED EVIDENCE OF SALE OF FOUR PLOTS OF ANCESTRAL PROPERTY AT BIJAWAR AS WHICH A SUM OF RS. 5,61,000/- WAS RECE IVED. BESIDE THIS LATE SMT. KALAWATI, MOTHER-IN LAW OF THE ASSESSEE HAD KEPT CAS H OF RS. 1,76,000/-IN HER ALMIRAH WHICH WAS ALSO RECEIVED BY THE ASSESSEE. THE LEARNED COUNSEL ALSO SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, A CASH F LOW STATEMENT WAS FILED ACCORDING TO WHICH OPENING CASH BALANCE OF RS. 8,33,350/- WAS AVAILABLE WITHOUT THE ASSESSEE. THE AO DID NOT POINTE D OUT ANY DEFECTS IN THE SAME. IF THE AO DOUBTED THE OPENING CASH BALANCE, THE AO SHOULD HAVE EXAMINED THE SAME IN A.Y. 10-11 AND NOT FOR A.Y. 11- 12. IN SEPARATE OF THIS CONTENTION THE LEARNED COUNSEL HAS RELIED IN THE CA SE OF SHRI VINOD KUMAR I.T.A.NO. 420/IND/2016 A.Y.:2011-12 SHRI SAVESH GUPTA, L/H OF SMT. SANDHYA GUPTA BHOPAL PAGE 5 OF 7 AGARWAL VS. ACIT ITAT HYDERABAD,( COPY FILED ) BY DRA WING INFERENCE FROM DECISION IN THE CASE OF SURAPU INDIRA DEVI VS. ACIT ( COPY FILED) THE AND ON ACCOUNT OF OPENING CASH BALANCE WAS DELETED. THE L EARNED COUNSEL ALSO RELIED IN THE CASE OF SMT. KRISHNA SHARMA VS. ACIT, I NDORE BENCH ( COPY FILED ) WHERE THE ASSESSEE WAS IN POSSESSION OF THIS BALANCE AT THE END OF MARCH 2010 , AND IT HAS BEEN DEPOSITED IN BANK ACCOUNT IN TH E MONTH OF APRIL, 2010 IN PIECEMEAL AND CAN BE VERIFIED FROM BANK ACCOUNT PLA CED AT PAGE 9 OF PAPER BOOK. IN VIEW OF ABOVE , IT WAS PLEADED THAT TH E IMPUGNED ADDITION BE DELETED. IT WAS ALSO URGED THE ADDITIONAL EVIDENC E IN FORM OF REPAYMENT OF LOANS BE ALLOWED TO BE ADMITTED AND THE MATTER MAY BE SET-ASIDE TO THE AO FOR RE-EXAMINATION OF FACTS AS FRESH. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE ORDERS OF THE LOWER AUTHORITIES, AND PERUSED THE MATERIAL AVAI LABLE ON RECORD. WE FIND THAT THE AO MADE ADDITION OF RS. 25,75,600/- ON ACCO UNT CASH DEPOSITS IN BANK ACCOUNT OF THE ASSESSEE. WE FIND THAT SOURCE OF AN AMOUNT OF RS. 11.25 LAKH IS EXPLAINED AS LOANS TAKEN IN CASH FROM SIX FA MILY RELATIVES OF THE ASSESSEE WHO HAVE APPEARED BEFORE THE AO AND FILED PAN , SALARY SHEET PENSION SHEET. THUS, THEIR IDENTITY HAS BEEN PROVED. H OWEVER, THE LOWER AUTHORITIES HAVE DOUBTED THE CREDITWORTHINESS IN RES PECT OF ONE PERSON. THE AO WAS ALSO OF THE VIEW THAT LOANS WERE NOT RE PAID, HENCE DOUBTFUL. HOWEVER, NOW THE ASSESSEE HAS FILED THE PROOF OF RE- PAYMENTS OF SAID LOANS. WE NOTE THAT THE ASSESSEE HAS CLAIMED THAT THERE WA S OPENING CASH BALANCE OF RS. 8, 33,350/- AS PER CASH FLOW STATEMENT S UBMITTED, BUT THE AO I.T.A.NO. 420/IND/2016 A.Y.:2011-12 SHRI SAVESH GUPTA, L/H OF SMT. SANDHYA GUPTA BHOPAL PAGE 6 OF 7 HAS NOT GIVEN HIS FINDING IN THIS REGARD. ONGOING T HROUGH ASSESSMENT ORDER WE FIND THAT THE AO MENTIONED THE FACTS AND CLAIM MADE BY THE ASSESSEE BUT NOT GIVEN THE REASON FOR NOT ACCEPTING THE SAME. AS REGARDS CORPUS FUND , THE LEARNED COUNSEL SUBMITTED THAT SAME IS MISREPRESE NTED AS IT WAS MONEY KEPT BY THE HUSBAND OF THE ASSESSEE WITH HIM AND SAME W AS CLAIMED TO HAVE BEEN RECEIVED FROM SALE PROCEEDS OF 4 ANCESTRAL LAND OF PLOT BELONGING TO LATE MOTHER-IN LAW OF THE ASSESSEE. THI S FUND WAS TO BE KEPT AS PER WILL OF LATE SMT. KALAWATI GUPTA (MOTHER-IN LAW). FURTHER A SUM OF RS. 1,76,000/- WERE CLAIMED TO BE CASH KEPT BY MOTHER-IN LAW OF THE ASSESSEE IN HER ALMIRAH. THE ALL CREDITORS APPEARED BEFORE THE AO , IN REMAND REPORT PROCEEDINGS, HENCE, THEIR IDENTITY HAS BEEN ESTABLISH ED. FURTHER , THE ASSESSEE ALSO FILED ADDITIONAL EVIDENCE OF RE-PAYMENT OF SAID LOANS. CONSIDERING THE FACTS IN TOTALITY AND TAKING A HOL ISTIC VIEW OF THE ISSUE AND CONSIDERING THE FACTS THAT SOME ASPECT WERE NOT LOOKE D IN TO BY THE AO., WE ARE OF THE VIEW THAT ONE MORE OPPORTUNITY OF BEING HEAR D TO BE ALLOWED TO THE ASSESSEE IN THE INTEREST OF JUSTICE. THE AO WIL L ANALYSE THE OPENING CASH BALANCE, THE STATEMENT OF LOANS GIVER, THE WILL OF LA TE KALAWATI, ADDITIONAL EVIDENCE OF RE-PAYMENT OF LOANS AND ALL OTHER EVIDE NCES WHICH THE ASSESSEE MAY ADDUCE. THE AO IS FREE TO CAUSE ANY ENQU IRY IF DEEM FIT. THE AO WILL EXTEND COOPERATION IN THE ENQUIRY. THEREFORE , THE ENTIRE ISSUE IS RESTORED TO THE FILE OF THE A.O. TO MAKE DE-NOVA ASS ESSMENT AS FRESH AFTER TAKING ALL CIRCUMSTANCES, IN TO CONSIDERATION, IN AC CORDANCE WITH LAW. THUS ABOVE GROUNDS OF APPEAL IS PARTLY ALLOWED FOR STATISTI CAL PURPOSE. I.T.A.NO. 420/IND/2016 A.Y.:2011-12 SHRI SAVESH GUPTA, L/H OF SMT. SANDHYA GUPTA BHOPAL PAGE 7 OF 7 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE ALLOWED F OR STATISTICAL PURPOSES. 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 09.11.2016 SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED :9 TH NOVEMBER, 2016.