Rakesh Arora, New Delhi V. ACIT, New Delhi

ITA 4209/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3026 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 18-10-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 01-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH F NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCO UNTANT MEMBER ITA NO. 4209/DEL./2016 ASSTT. YEAR : 2013-14 RAKESH ARORA A-36, ORIENTAL APARTMENT, 8ROHINI, SECTOR-9, DELHI NEW DELHI VS. ACIT CENTRAL CIRCLE- NEW (PAN: AAGPA4632G) (APPELLANT) (RESPONDENT) ASSESSEE BY SH. RAJAT JAIN & SH. AKSHAT JAIN, CA REVENUE BY SH. ATIQ AHMAD, SR. DR ORDER PER L.P. SAHU, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(A)-24, NEW DELHI FOR THE ASSESSMENT YEAR 2013-14 ORDER DAT ED 25.05.2016 ON THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE APPE LLANTS CASE, THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN CO NFIRMING ADDITION TO THE EXTENT OF RS. 2,42,600/- BEING UNEXPLAINED CASH U/S 69A OF THE ACT FOUND DURING THE COURSE OF SEARCH ACTION U/S 132 OF THE ACT BY HOLDING DATE OF HEARING 25 .0 1 .2018 DATE OF PRONOUNCEMENT 19 .0 3 .2018 ITA NO. 4209/DEL./2016 2 THE PLAUSIBLE OR PROBABLE EXPLANATION OF THE APPE LLANT AS IMPROBABLE EXPLANATION BY DRAWING ASSUMPTIONS WIT HOUT ANY BASIS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN CO NFIRMING ADDITION TO THE EXTENT OF RS. 2,42,600/- BEING UNEXPLAINED BY E STIMATING OPENING CASH BALANCE AT RS. 50,000/- INSTEAD OF RS. 3.5 LAC S AS CLAIMED BY THE APPELLANT KEEPING IN VIEW OF STATUS OF THE FAMILY A ND RETURNED INCOME OF THE APPELLANT AND HIS WIFE, PINUP MONEY AND SAVI NGS OF HIS WIFE. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE ACTION WAS CONDUCTED U/S 132 IT ACT OF THE 1961 (HEREINAFTER REFERRED TO AS THE ACT) SAS GROUP OF CASES ON 16.01.2013. THE CASE OF THE ASSESSEE WAS A LSO COVERED U/S 132 OF THE IT ACT, 1961. THE CASE WAS CENTRALIZED AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE AND ASSESSEE FILED RETURN OF DECLARED INCO ME OF RS. 23,77,100/- AND NOTICE U/S 143(2) OF THE IT ACT ISSUED ON 27 TH NOVEMBER, 2014. THE ASSESSEE FILED NECESSARY DETAILS AND CLARIFICATION AS REQUIRED BY THE ASSESSING OFFICER. 3. DURING THE COURSE OF SEARCH PROCEEDINGS OF THE P REMISES OF THE ASSESSEE, THE CASH WAS SEIZED AS UNDER :- PANCHNAMA IN THE NAME OF PREMISES CASH FOUND RAKESH ARORA A-36, ORIENTAL APPARTMENT, SECTOR-9, ROHINI, NEW DELHI RS. 92,600/- RAKESH ARORA AND RITU ARORA LOCKER NO. 372, CANARA BANK, SECTOR-9, ROHINI, NEW DELHI RS. 1,00,000/- RAKESH ARORA AND RITU ARORA LOCKER NO. 230, CANARA BANK, SECTOR-9, ROHINI, NEW DELHI RS. 1,00,000/- TOTAL RS. 2,92,600/- 4. FROM THE SUBMISSIONS MADE BY THE ASSESSEE, THE A SSESSING OFFICER WAS NOT CONVINCED AND HE ADDED THE SUM OF RS. 2,92,600/- TO THE INCOME DECLARED BY THE ITA NO. 4209/DEL./2016 3 ASSESSEE. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A) AND THE LD. CIT(A) AFTER CONS IDERING THE ORDER OF THE ASSESSING OFFICER AND SUBMISSION OF THE ASSESSEE RE STRICTED TO THE ADDITION TO THE EXTENT OF RS. 2,42,600/- AND PARTLY ALLOWED THE APP EAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE APPEALED B EFORE THE INCOME TAX APPELLATE TRIBUNAL. 5. THE LD. AR REITERATED THE SUBMISSIONS MADE BEFOR E THE CIT(A) AND HE FURTHER SUBMITTED THAT THE ASSESSEE HAD OPENING BAL ANCE OF RS. 3,50,000/- AND TOTAL CASH WITHDRAWN UP TO 16.03.2013 FROM BANK ACCOUNT W AS RS. 2,30,000/- AND CASH WITHDRAWN UP TO 16.01.2013 FROM THE PARTNERSHIP FIR M IS RS. 50,000/-. THEREFORE, THE CASH AVAILABILITY OF THE ASSESSEE WAS RS. 6,30 ,000/- AND HE INCURRED TOTAL HOUSEHOLD EXPENSES OF RS. 3,37,400/-. THEREFORE, TH ERE WAS A CASH BALANCE IN HAND AS ON THE DATE OF SEARCH I.E. 16.01.2013 OF RS. 2,92,600/-. THE ASSESSEE AND HIS WIFE BOTH ARE FILING RETURN OF INCOME AND TOTAL INC OME FROM ASSESSMENT YEAR 2007- 08 TO 2013-14 IS RS. 1, 16,69,920/- (65,22,340/- + 51,47,580/-). THEREFORE, THE CASH FOUND DURING SEARCH IS A QUITE REASONABLE LOOK ING TO THE INCOME AND STATUS OF THE ASSESSEE. HE FURTHER SUBMITTED THAT BOTH ARE WO RKING, THEREFORE, THEY HAD KEPT CASH INTO BANKERS LOCKER AND IN CASE OF EMERGENCY THEY CAN GET MONEY EASILY. BOTH THE ASSESSEE AND HIS WIFE HAD NOT ANY ATM CARD , THEREFORE, THE CASH IS MAINTAINED IN THE BANKS LOCKER. IN VIEW OF THIS, THE LD. CIT(A) IS NOT JUSTIFIED THAT THE CASH FOUND DURING SEARCH WAS UNEXPLAINED. HE FU RTHER SUBMITTED THAT THE CASH HAS BEEN FULLY EXPLAINED BEFORE THE SEARCH TEAM AS WELL AS BEFORE THE LOWER AUTHORITIES. 6. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT SUBMITTED ANY PLAUSIBLE EVIDENCE REGARDING THE OPENING BALAN CE OF CASH AS SHOWN BY THE ASSESSEE OF RS. 3,50,000/-. THEREFORE, THE LOWER AU THORITIES ARE JUSTIFIED TO MAKE ITA NO. 4209/DEL./2016 4 ADDITION OF UNEXPLAINED CASH FOUND DURING THE COURS E OF SEARCH AND HE RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 7. AFTER HEARING BOTH THE SIDES AND PERUSING THE MA TERIALS AVAILABLE ON THE RECORD AND ORDER OF THE AUTHORITIES BELOW AND PAPER BOOKS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSED WE FIND THAT THE ASSESSEE HAS PRODUCED THE CHART REGARDING THE CASH AVAILABILITY ON THE DA TE OF SEARCH IN WHICH HE HAS DECLARED OPENING CASH BALANCE ON 01.04.2012 OF RS. 3,50,000/- AND HE FURTHER EXPLAINED THAT THIS OPENING CASH BALANCE HAS BEEN M ADE OUT OF PREVIOUS CASH WITHDRAWALS FROM BANK ACCOUNT , MONEY OF HIS WIFE A ND SAVINGS OF HIS FAMILY MEMBERS ACCUMULATED OVER THE YEARS INCLUDING RS. 2, 00,000/- FOUND IN LOCKERS. BUT THE ASSESSEE WAS NOT ABLE TO ESTABLISH BY ANY DOCUMENTARY EVIDENCE REGARDING OPENING CASH BALANCE AS SHOWN BY HIM. AFTER GOING THROUGH THE PAPER BOOK PAGE NO. 19 BANK HAS DEBITED RS. 100/- TOWARDS MAINTAI NING CHARGES OF ATM CARD ON 03.08.2011. THE ASSESSEE HAS EXPLAINED THAT HE HAS NOT POSSESSED ANY ATM CARD IS NOT CORRECT. THE LD. CIT(A) HAS DISCUSSED THIS ISSU E IN DETAILS IN HIS ORDER REGARDING SUSTENANCE OF RS. 2,42,600/- WHICH IS AS UNDER :- I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLAN T AS WELL AS THE MATERIAL ON RECORD. THE APPELLANT HAS SUBMITTED THE BANK STATEMENT OF HIS ACCOUNT HELD IN BANK OF INDIA (ASHOK VIHAR), STATE BANK OF INDIA (KURUKSHETRA) AND AXIS BANK (ROHINI) IN SUPPORT OF HIS SUBMISSIONS. THESE STATEMENTS COVER THE PERIOD F.Y. 2011-12 (A.Y. 2012 -13). CASH WITHDRAWALS ARE ALMOST EXCLUSIVELY FROM THE AXIS BA NK, ROHINI ACCOUNT OF THE APPELLANT. THE TOTAL WITHDRAWALS ADMITTED FOR T HE F.Y. 2011-12 IS RS. 2,30,000/-, IN ADDITION TO A SUM OF RS. 50,000/- WI THDRAWN FROM M/S RAPG & CO. (A PARTNERSHIP FINN). THE AVERAGE MONTHLY WIT HDRAWAL WORKS OUT TO RS. 23,333/- PER MONTH. THIS SMALL SUM CAN BE REASO NABLY BE SAID TO HAVE BEEN EXCLUSIVELY INCURRED FOR HOUSEHOLD EXPENDITURE . IN FACT IT CAN BE SEEN FROM THE BANK STATEMENT THAT FOUR MONTHS PAYMENTS O F ELECTRICITY BILLS (RS. 4,000/- TO 4,500/.- PER MONTH) HAVE BEEN PAID THROU GH BANKING CHANNELS. THE COROLLARY NATURALLY IS THAT SIMILAR AMOUNTS WOU LD HAVE BEEN PAID IN CASH FOR THE REMAINING EIGHT MONTHS. THE STANDARD O F LIVING AND ECONOMIC STATUS CAN BE FURTHER GLEANED FROM THE FACT THAT TH E APPELLANT MAKES SUBSTANTIAL PAYMENTS FOR INSURANCE PREMIA, SCHOOL F EES AND GAS BILLS AS ITA NO. 4209/DEL./2016 5 CAN BE SEEN FROM THE BANK STATEMENT. THEREFORE, EXP ENDITURES FOR DAILY EXPENSES CAN REASONABLY BE HELD TO BE AT LEAST EQUA L TO THE TOTAL CASH WITHDRAWALS, MEANING THEREBY THAT NONE OF THE CASH WITHDRAWALS WOULD BE AVAILABLE TO EXPLAIN THE CASH FOUND. THE NEXT POINT IS THAT THE CLAIM OF RS. 3 LACS CASH IN HAND SHOWN BY THE APPELLANT WITH THE B EGINNING OF THE F.Y. 2011-12. NO EVIDENCE HAS BEEN ADDUCED TO SUPPORT TH IS CLAIM. IN THE COURSE OF RECORDING OF HIS STATEMENT U/S 132(4) DUR ING THE SEARCH, THE APPELLANT HAS STATED THAT THE REASON FOR KEEPING CA SH IN LOCKER IS THAT:- (1) HE DOES NOT POSSESS ANY DEBIT-CUM-ATM CARD BECAUSE OF HIS CONCERNS OF POSSIBLE MISUSE. (2) HE DRAWS CASH FROM THE BANK ONLY BY WAY OF CHEQUE. (3) CASH IS KEPT IN LOCKERS IN THE BANKS WHICH IS ABOUT A HALF OF KILOMETER FROM HIS RESIDENCE, FOR EMERGENCY USE. 4.1.3 IN THE LIGHT OF THESE CIRCUMSTANCES, IT IS NE CESSARY TO NOW ONLY EXAMINE WHETHER THE CLAIM OF THE APPELLANT THAT HE HAD A OPENING BALANCE OF RS. 3 LACS CASH IS A PLAUSIBLE OR CREDIBLE EXPLA NATION. FIRST OF ALL, WHETHER BY DRAWING CASH THROUGH CHEQUE OR BY RETRIE VING FROM LOCKER, EITHER ACTION WOULD BE INVOLVE A VISIT TO THE BANK DURING WORKING HOURS ONLY, UNLIKE USE OF ATM CARD. THEREFORE THERE IS NO PLAUSIBLE BENEFIT IN KEEPING ACCOUNTED-FOR CASH IDLE IN A LOCKER, WHEN I T CAN BE AS WELL BE DEPOSITED IN BANK ACCOUNT AND RETRIEVED WITH EQUAL EASE. THE EXPLANATION OF THE APPELLANT THAT IT IS KEPT FOR EMERGENCY RETR IEVAL DOES NOT THEREFORE RING TRUE. ALSO, NO EVIDENCE HAS BEEN ADDUCED TO SH OW ANY LARGER-THAN- NORMAL CASH WITHDRAWAL PRIOR TO THE START OF THE RE LEVANT YEAR WHICH COULD SUPPORT THE CLAIM OF AN OPENING BALANCE OF RS. 3 LA CS. IT IS THUS HIGHLY IMPROBABLE THEREFORE THAT ANY PRIOR CASH WITHDRAWAL S WOULD HAVE BEEN ACCUMULATED TO RS. 3 LACS AS CASH IN HAND. APPLYING THE PRINCIPLE OF PREPONDERANCE OF PROBABILITY, I AM OF THE VIEW THAT THE ASSESSEES EXPLANATION ISNEITHER PLAUSIBLE NOR 3. PROBABLE ABO UT THE SOURCE OF CASH FOUND IN HIS HANDS. HOWEVER, HAVING DUE REGARD TO T HE FACT THAT EVERY FAMILY WOULD BE EXPECTED TO HAVE SOME AMOUNT OF CAS H IN HAND, I ESTIMATE A SUM OF RS. 50,000/- (EQUIVALENT TO ABOUT TWO MONT HS CASH EXPENSES) AS BEING REASONABLE OPENING CASH IN HAND. THUS UNDER T HESE CIRCUMSTANCES, I HOLD THAT THE REMAINING SUM OF RS. 2,42,600/- CASH FOUND IN THE APPELLANTS HANDS IS NOT SATISFACTORILY EXPLAINED. IN OTHER WOR DS, ADDITION TO THE EXTENT OF RS. 2,42,600/- IS SUSTAINED. THIS GROUND OF APPE AL IS THEREFORE PARTLY ALLOWED. 8. FROM THE ABOVE ORDER OF LD. CIT(A), IT REVEALS T HAT THE LD. CIT(A) HAS DONE GOOD REASONED ORDER AND IT DOES NOT REQUIRE ANY INT ERFERENCE. WE UPHOLD THE ACTION ITA NO. 4209/DEL./2016 6 OF THE LD. CIT(A) LOOKING TO THE FACT AND CIRCUMSTA NCES OF THE CASE OF THE ASSESSEE. THE AR WAS TRYING TO RECONCILE THE CASH FOUND DURIN G THE SEARCH OF RS. 2,92,600/- ONLY BY FILING A CHART WITHOUT ANY SUPPORTING DOCUM ENTARY EVIDENCE OF OPENING BALANCE AS ON 01.04.2012. THEREFORE THE ARGUMENTS P UT FORTH BEFORE US ARE NOT ON THE BASIS OF ANY CREDIBLE EVIDENCE. REGARDING OPENI NG CASH BALANCE OF RS. 3,50,000/-, THEREFORE, THE CLOSING BALANCE CALCULAT ED BY THE ASSESSEE AS ABOVE CHART ARE NOT GENUINE. HOWEVER, THE LD. CIT(A) HAS RESTRI CTED THE ADDITION MADE BY THE A.O. TO RS. 2,42,600/-. WE ALSO AGREE WITH THE CONC LUSION REACHED BY THE CIT(A). 9. IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES OF T HE CASE, THE APPEAL OF THE ASSESSEE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.03.20 18. SD/- SD/- (BHAVNESH SAINI) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19.03.2018 *BINITA* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI ITA NO. 4209/DEL./2016 7 DATE INITIAL 1. DRAFT DICTATED ON 16.03.2018 PS 2. DRAFT PLACED BEFORE AUTHOR 19.03.2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON 19.03.2018 PS 7. FILE SENT TO THE BENCH CLERK 19.03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.