Addl. CIT, Muzaffarnagar V. M/s. Adarsh Mahila Mercantile Co- Operative Bank Ltd., Muzaffarnagar

ITA 4202/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53321 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-11-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 20-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANADR
• Assessee Lawyers: AMIT GOELAR
• Section: 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI I.P. BANSAL, JM & SHRI A.N. PAHUJA, AM ITA NO.4202/DEL/2011 ASSESSMENT YEAR:2008-09 ADDL. C.I.T.,RANGE-2, MUZAFFARNAGAR (UP) V/S . M/S ADARSH MAHILA MERCANTILE CO-OPERATIVE BANK LTD., 10A, NEW MANDI, MUZAFFARNAGAR (UP) [PAN NO.: AAAAA 4275 C] APPELLANT (RESPONDENT) ASSESSEE BY SHRI AMIT GOEL,AR REVENUE BY MRS. ANUSHA KHURANA,DR DATE OF HEARING 21-11-2011 DATE OF PRONOUNCEMENT 30-11-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 20.9.2011 BY THE REVENUE AGAI NST AN ORDER DATED 13 TH JULY, 2011 OF THE LD. CIT(A)-MUZAFFARNAGAR, RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN LAW IN DELETING THE ADDITION OF ` `95,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH DE POSIT OUT OF BOOKS ON THE BASIS OF AIR INFORMATION WITHOUT AP PRECIATING THE FACTS OF THE CASE AS THE AIR INFORMATION HAS TO BE FILED BY THE HEAD OFFICE ON THE BASIS OF INFORMATION RECEIVE D/TRANSACTION MADE BY ITS BRANCHES, WHILE THE BRANCH OFFICE CANNO T DENY THE TRANSACTIONS REPORTED BY ITS HEAD OFFICE AND EVEN A S PER THE REVISED AIR INFORMATION DOWNLOADED ON 19.04.2011 AL L ENTRIES ARE SAME AS IN THE ORIGINAL AIR. 2. THE ORDER OF LEARNED CIT(A) BE SET ASIDE AND THAT O F THE ASSESSING OFFICER BE RESTORED. ITA NO.4202/DEL./2011 2 2. FACTS IN BRIEF, AS PER RELEVANT ORDERS ARE THA T E-RETURN DECLARING INCOME OF ` `1,13,48,187/- FILED ON 27 TH SEPTEMBER, 2008 BY THE ASSESSEE, A CO- OPERATIVE BANK, WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). IN THIS CASE, AIR INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER[A O IN SHORT] THAT THE ASSESSEE DEPOSITED FOLLOWING AMOUNTS IN CASH WITH HDFC BANK, JANSATH ROAD, MUZAFFARNAGAR:- [IN ` ] 1.2.2008 20,00,000/- 2.4.2007. 10,00,000/- 12.5.2007 35,00,000/- 12.7.2007 20,00,000/- 10.8.2007 10,00,000/- TOTAL: 95,00,000/- 2.1 TO A QUERY BY THE AO, THE ASSESSEE EXPLAINED T HAT THEY HAVE NOT DEPOSITED ANY CASH IN THE AFORESAID BANK ACCOUNT WI TH HDFC AND ENCLOSED A COPY OF CERTIFICATES ISSUED BY THE HDFC BANK IN RES PECT OF ACCOUNT NO.03810380000017 & 03812320000159. SINCE AIR INFO RMATION REVEALED CASH OF ` `95 LACS DEPOSITED IN THE BANK ACCOUNT OF THE ASSES SEE WITH HDFC BANK, THE AO ISSUED SUMMONS TO THE MANAGER OF THE BANK, WHO A FTER PERUSING THE BANK ACCOUNT STATEMENT OF THE HEAD OFFICE INFORMED THAT THESE TRANSACTIONS EMANATED FROM THE CTR WHICH WERE SUBMITTED BY THE OFFICE OF HDFC BANK,MUMBAI.. HOWEVER, SINCE THE ASSESSEE DID NOT CONTROVERT THE AFORESAID CASH TRANSACTIONS NOR RECONCILED THE TRANSACTIONS REPORTED BY THE HEA D OFFICE VIS--VIS STATEMENT OF A/C OF THE BRANCH , THE AO ADDED THE AMOUNT OF ` `95 LACS U/S 68 OF THE ACT. ITA NO.4202/DEL./2011 3 3. ON APPEAL, THE LD. CIT(A) FORWARDED WRITTEN SUB MISSIONS FILED BY THE ASSESSEE TO THE AO FOR A REMAND REPORT, WHEREIN IT WAS SPECIFICALLY MENTIONED THAT THE AFORESAID FIVE TRANSACTIONS TOTALING TO ` 95,00,000/- DID NOT APPEAR IN REVISED AIR.. IN THE REMAND REPORT DATED 25 TH MARCH, 2011, THE ASSESSING OFFICER REITERATED THE FACTS MENTIONED IN THE ASSESSMENT OR DER IN THE FOLLOWING TERMS:- ......... THE ASSESSEE IN HIS WRITTEN SUBMISSIONS BEFORE YOUR HONOUR STATED THAT THE ENTRIES OF ABOVE CASH DEPOSITS DO NOT EXIST IN ITS BANK ACCOUNT AS WELL A S IN STATEMENT OF HDFC BANK ITSELF. THIS CONTENTION OF T HE ASSESSEE IS NOT CORRECT AS THE AIR INFORMATION HAS TO BE FILED BY THE HEAD OFFICE OF THE BANK ON THE BASIS O F INFORMATION RECEIVED/TRANSACTIONS MADE BY ITS BRANC HES. THE BRANCH OFFICE COULD NOT DENY THE TRANSACTIONS REPORTED BY ITS HEAD OFFICE,DESPITE SEVERAL OPPORTU NITIES REPEATED OPPORTUNITIES ON 18-11-2010, 25-11-2010, 0 9- 12-2010 AND 23-12-2010. FURTHER, THE ASSESSEE NEITH ER CONTROVERTS THE CASH TRANSACTIONS NOR EXPLAINED THE M SATISFACTORILY. THE ASSESSEE FURTHER SLATED THAT THE A.O. HAS ADDED THE CASH DEPOSITED AS CASH TRANSACTIONS FROM UNDISCLOSED SOURCES U/S 68 OF THE INCOME TAX ACT, 1 961, WHICH IS NOT CORRECT. THIS CONTENTION OF THE ASSESS EE IS NOT ACCEPTABLE AS THE FIVE ENTRIES AMOUNTING TO RS. 95,00,000/-, REPORTED IN THE AIR OF H DFC BANK WERE IN CASH AND WERE NEITHER RECORDED IN THE BOOKS OF ACCO UNT OF THE ASSESSEE NOR HAD EXPLAINED SOURCE. THE ASSESSEE ALSO STALED THAT NO CASH DEPOSIT HAS BEEN MADE BY HIM ON ABOVE DATES IN HDFC BANK AS STIPULATED BY THE A.O AND THE SAME HAS NOT BEEN CONFIRMED BY THE HDFC BANK VIDE LETTER DATED 28- 12 - 2010 AND NOW HDFC BANK HAS REVISED ITS AIR ALONGWIT H AFFIDAVIT STATING THAT THE ENTRIES DO NOT BELONG TO THE BANK. THIS CONTENTION OF THE ASSESSEE IS NOT CORREC T AND ACCEPTABLE BECAUSE THE AIR INFORMATION ONCE COLLECT ED & REPORTED CANNOT BE DENIED BY AFFIDAVITS. FURTHER, T HE BRANCH OFFICE CANNOT DENY THE TRANSACTIONS REPORTED BY ITS HEAD OFFICE AND THE ASSESSMENT WAS MADE ON THE BASIS OF AIR INFORMATION AVAILABLE ON THE DATE OF COMPLETION OF ASSESSMENT AFTER GIVING SEVERAL OPPORTUNITIES TO THE ASSESSEE AS WELL AS HDFC BANK. THE FAILURE ON THE PART OF ASSESSEE CASTS AN ONUS T O ITA NO.4202/DEL./2011 4 EXPLAIN ITS SOURCE AND HENCE THE ADDITION WAS MADE. IN VIEW OF THE ABOVE SUBMISSION & DETAILED REASONS DISCUSSED IN THE ASSESSMENT ORDER, THE APPEAL OF TH E ASSESSEE DESERVES TO BE DISMISSED' 3.1 SINCE THE HDFC BANK HAD REVISED THE AIR VIDE L ETTER DATED 15 TH MARCH, 2011, THE CIT(A) DIRECTED THE AO TO MAKE NEC ESSARY VERIFICATION. CONSEQUENTLY, THE AO VIDE HIS LETTER DATED 26.04.20 11 SUBMITTED AS UNDER:- ...... THE INCOME TUX OFFICER, WARD-..4.(2), KANP UR VIDE HIS LETTER DATED 19-04-2011 STATED THAT THE AIR INFORMATION WAS GENERATED ON 19-04-2011 IN RESPECT TO THE ABOVE ASSESSEE(PAN AAAAA4275C). HE ALSO ENCLOSED THE COPY OF AIR REPORT ALONG WITH HIS LETT ER 'WITH A COPY TO YOUR GOODSELF. PERUSAL OF A1R REPORT GENERATED ON 19-4-2011 REVEAL S THAT THERE IS NO DIFFERENCE WITH THE REPORT GENERAT ED ON 03-08-2009. THE ADDITION OF RS.95,00, 000/- WAS MAD E ON THE BASIS OF AIR REPORT DATED 03-08-2009 AS THE FOLLOWING FIVE ENTRIES WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THESE ENTRIES STILL EXIST IN THE LATEST AIR REPORT I. E. AFTER HAVING FILED THE REVI SED AIR RETURN BY HDFC BANK, PROOF OF WHICH HAS BEEN FILED BY THE ASSESSEE BEFORE YOUR GOODSELF. THE COPY OF ALR REPORT DATED 03 -08- 2009 IS ALSO ENCLOSED HEREWIT H FOR YOUR KIND PERUSAL. 01 -02-2008 RS. 20, 00, 000/- 02-04-2007 R S.10, 00, 000/- 12-05-2007 R S. 35,00, OOO/- 12-07-2007 R S. 20, 00, 000/- 10-08-2007 R S.I0, 00, 000/- TOTAL: R S. 95, 00, 000/- IN VIEW OF THE ABOVE INFORMATION, THE REMAND REPORT DATED 25- 03-2011 & DETAILED REASONS DISCUSSED IN THE ASSESSMENT ORDER, THE APPEAL OF THE ASSESSEE DESERVES TO BE DISMISSED .' ITA NO.4202/DEL./2011 5 3.2 HOWEVER, THE LD. CIT(A) SOUGHT FURTHER REPORT FROM THE AO VIDE LETTER DATED 3 RD MAY, 2011 IN THE FOLLOWING TERMS:- ........ IT IS OBSERVED THAT THE APPELLANT HAS SUB MITTED EVIDENCE IN RESPECT OF REVISED REPORT FILED BY HDFC WITH NSDL BUT SUCH REVISION DOES NOT FIGURE OUT IN THE A IR IN RESPECT OF THE APPELLANT, SINCE THE CONTENTS OF THE REVISED REPORT FILED BY THE HDFC ARE NOT KNOWN, YOU ARE DIRECTED TO MAKE NECESSARY INQUIRIES INCLUDING CALL ING FOR REVISED REPORT FROM THE HDFC SO AS TO VERIFY THE CO RRECT STATUS OF THE FACTS. FURTHER, IN CASE SUCH CASH DEPOSITS FIND PLACE IN HDFC REPORT, IT WOULD BE NECESSARY TO ASCERTAIN THE ACTUAL OWNERSHIP OF SUCH CASH DEPOSITS SO THAT ITS TAXABILITY IN PROPER HANDS IS ENSURED. YOU ARE THER EFORE, DIRECTED TO CARRY OUT THE INVESTIGATION TO IDENTIFY THE PERSONS WHO DEPOSITED THE SAID CASH (IF AT ALL SUCH CASH WAS EVER DEPOSITED WITH THE APPELLANT BANK) SO THAT NECESSARY DIRECTIONS MAY BE ISSUED TO THE A.O. HAVING JURISDICTION OVER SUCH PERSONS .... ' 3.3 THE AO ,ACCORDINGLY REQUIRED THE MANAGER, HDFC BANK, MUZAFFARNAGAR , TO INFORM THE DETAILS OF PERSONS TO WHOM THE AFORESAID FIVE ENTRIES OF ` `95 LACS PERTAINED . NO SUCH DETAILS APPEAR TO HAVE BEEN ASCERTAINED, AS IS EVIDENT FROM THE IMPUGNED ORDER. . 4. IN VIEW OF THE FOREGOING, THE LD. CIT(A) OB SERVED AS UNDER:- 3.1.8. FURTHER, THE A.O. ALSO ISSUED LETTER DATED 28-06-2011 TO L.T.O. WARD-4(2), KANPUR REQUIRING TO FURNISH COPY OF LATE ST AIR INFORMATION IN RESPECT OF HDFC BANK FOR F.Y.2007-08 RELEVANT TO A.Y.2008-09. THE FACTS OF THE CASE AS WELL AS STATEMENTS OF FA CTS AND GROUNDS OF APPEAL MADE BY THE APPELLANT HAVE BEEN CAREFULLY CO NSIDERED. IT IS OBSERVED THAT THE A.O. ON THE BASIS OF AIR INFORMATION RECEIVED F ROM HEAD OFFICE HDFC BANK, MUMBAI GATHERED THAT THE FOLLOWING ENTRIES WERE IN THE NAME OF THE APPELLANT ;- 01 -02-2008 RS. 20, 00, 000/- 02-04-2007 R S. I0, 00, 000/- 12-05-2007 R S. 35,00, OOO/- ITA NO.4202/DEL./2011 6 12-07-2007 R S. 20, 00, 000/- 10-08-2007 R S.IO, 00,000/- TOTAL: R S. 95, 00, 000/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APP ELLANT CATEGORICALLY DENIED THE OWNERSHIP OF THESE ENTRIES AND FURNISHED COPIES OF BANK ACCOUNT NO.03810380000017 AND NO.03812320000159 WITH THE AFORESAID BANK IN SUPPOR T OF ITS CONTENTION. THE A.O. ALSO SOUGHT INFORMATION U/S 133(6) OF THE ACT FROM HDFC BANK, MUZAFFARNAGAR AND OBTAINED COPY OF BANK STATEMENTS OF THE APPELLANT. THE MANAGER, HDFC BANK. MUZAFFARNAGAR WAS ALSO SUMMONED U/S 131 OF THE ACT AND HIS STATEMENT ON OATH WAS ALSO RECORDED BY THE A.O. THE MANAGER VIDE LETTER DATED. 11-11-2010 ALSO INFORMED THAT TH ESE TRANSACTION WERE NON-EXISTENT. HOWEVER, THE A.O. HE LD THAT THE APPELLANT WAS NEITHER ABLE TO CONTROVERT THE CASH T RANSACTIONS TOTALING TO RS.95,00,0001- AS, CONTAINED IN THE AIR INFORMATION NOR EXPLAINED THEM SATISFACTORILY. THE A.O. ON THE BASIS OF A1R OF THE HDFC BANK, MAIN BRANCH, MUMBAI HELD THAT THE IMPUGNED SUMS REPRESENT UNDISCLOSED INCOME OF THE A SSESSEE AND WERE LIABLE TO BE ADDED U/S 68 OF THE ACT. DURING APPELLATE PROCEEDINGS THE APPELLANT HAS FURNISHED LETTER DATE D 28-12- 2010 ISSUED BY HDFC BANK, MUZAFFARNAGAR WHEREIN THE AFORESAID BANK HAS CONFIRMED THAT THE ENTRIES TOTAL ING TO RS.95,00,000/- DID NOT RELATE TO THE APPELLANT. THE APPELLANT HAS ALSO FURNISHED REVISED AIR OF HDFC BANK ALONG WITH AFFIDAVIT OF THE APPELLANT TO THE EFFECT THAT THE AFORESAID F IVE ENTRIES DID NOT PERTAIN TO THE APPELLANT. DURING THE COURSE OF APPELLATE PROCEEDINGS THE A.O. WAS ALSO REQUIRED TO MAKE NECE SSARY INVESTIGATION IN RESPECT OF THE IMPUGNED ISSUE HOWE VER, THE INVESTIGATION HAS NOT BEEN MADE TO ITS LOGICAL END DESPITE SUFFICIENT OPPORTUNITIES GIVEN TO THE A.O. SINCE TH E APPELLANT HAD FURNISHED REVISED AIR OF THE AFORESAID BANK, TH E A.O. VIDE LETTER DATED 03-05-2011 WAS SPECIFICALLY DIRECTED T O CARRY OUT NECESSARY INVESTIGATION SO AS TO ASCERTAIN THE ACTU AL OWNERSHIP OF THE CASH TRANSACTIONS AMOUNTING TO RS.95,00,000/ -. HOWEVER, TILL DATE, NO SUCH REPORT HAS BEEN RECEIVED FROM TH E A.O. EVEN IF THE A.O. HAD RECEIVED CERTAIN AIR INFORMATION, IT W AS FOR HIM TO PROCESS THE SAME AND MAKE FURTHER INVESTIGATION SO AS TO ARRIVE AT A LOGICAL CONCLUSION. HOWEVER, WITHOUT DO ING THE SAME, THE A.O. HAS ONLY HARPED ON THE AIR INFORMATION AND HAS NOT MADE PROPER ANALYSIS. THUS IN ABSENCE OF PROPER ANA LYSIS OF THE AIR INFORMATION AND ANY ADVERSE MATERIAL EVIDEN CE ON RECORD, THE ADDITION MADE U/S 68 IS HELD AS UNTENAB LE. ON THE OTHER HAND THE APPELLANT HAS FURNISHED SUFFICIENT E VIDENCES TO ITA NO.4202/DEL./2011 7 ESTABLISH THAT THE AFORESAID FIVE ENTRIES OF CASH T RANSACTIONS DID NOT PERTAIN TO IT. UNLESS THE AO IS ABLE TO CONTROV ERT SO MANY DOCUMENTARY EVIDENCES PLACED BY THE ASSESSEE ON REC ORD; IT WOULD NOT BE PROPER TO SUSTAIN ADDITION MADE U/S 68 OF THE ACT AS CASH TRANSACTIONS. IN OTHER WORDS, SUFFICIENT EV IDENCE, E.G. COPIES OF BANK STATEMENTS, LETTER OF THE MANAGER, H DFC BANK, REVISED AIR OF HDFC BANK AND AFFIDAVIT ETC. HAVE BE EN FURNISHED, WHICH HAD SHIFTED THE 'ONUS' FROM ASSESS EE ONTO THE AO; BUT AO HAS NOT DISCHARGED HIS ONUS TO SHOW ANY DISCREPANCY/FALSITY IN SUCH EVIDENCES. IN MY VIEW, THESE EVIDENCES ARE SUFFICIENT TO ESTABLISH THE APPELLANT 'S CLAIM AND THE ADDITION AT RS.95,00,000/- IS THEREFORE, DIRECT ED TO BE DELETED. GROUND NO.1 IS ALLOWED. . 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR SUPPORTED TH E ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE RELIED UPON THE AFORES AID FINDINGS OF THE LD. CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THE ASSESSEE CATEGORICALLY DENIED THE OWNERSHIP OF AFORESAID FIVE ENTRIES OF ` `95 LACS AND FURNISHED COPIES OF THEIR BANK ACCOUNT S WITH HDFC . THE MANAGER OF THE CONCERNED BRANCH VIDE LETTER DATED 1 1.11.2010 ALSO INFORMED THAT THESE TRANSACTIONS WERE NON EXISTENT. BEFORE THE L EARNED CIT(A), THE ASSESSEE FURNISHED A LETTER DATED 28 TH DECEMBER, 2010 ISSUED BY HDFC BANK, MUZAFFARNAGAR THAT THE AFORESAID ENTRIES TOTALING T O ` ` 95 LACS DID NOT RELATE TO THE ASSESSEE AND A REVISED AIR ALONG WITH AFFIDAVIT OF THE ASSESSEE WAS ALSO FILED. THE AO DID NOT CARRY OUT NECESSARY INVESTIGATION IN ORDER TO ASCERTAIN AS TO WHO IS THE ACTUAL OWNER OF THESE ENTRIES AND INSTEAD RE LIED MERELY ON AIR INFORMATION. SINCE THE AO DID NOT CONTROVERT THE REVISED AIR NOR THE REVENUE HAVE PLACED BEFORE US ANY MATERIAL, CONTROVERTING THE AFORESAID FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) IN THE LIGHT OF COPIES OF BANK STATE MENTS, LETTER OF MANAGER, HDFC BANK, REVISED AIR ETC., WE DO NOT FIND ANY BASIS TO TAKE A DIFFERENT VIEW IN THE MATTER. ACCORDINGLY, WE HAVE NO ALTERNATIVE BUT TO UPHOLD THE FINDINGS OF LEARNED CIT(A).THEREFORE, GROUND NO.1 IN THE APPEAL IS DISM ISSED. ITA NO.4202/DEL./2011 8 7.. GROUND NO.2 BEING MERE PRAYER NOR ANY SUBMISSI ONS HAVING BEEN MADE BEFORE US ON THIS GROUND, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION AND IS, THEREFORE, DISMISSED. 8. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 9.. IN RESULT, APPEAL IS DISMISSED. SD/- SD/- (I.P. BANSAL) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ADDL.C.I.T., RANGE-2, MUZAFFARNAGAR (U.P.). 2. M/S ADARSH MAHILA MERCANTILE CO-OPERATIVE BANK L TD., 10A, NEW MANDI, MUZAFFARNAGAR (U.P.). 3. CIT(A), MUZAFFARNAGAR (UP). 4. CIT CONCERNED. 5. DR, ITAT,A BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT