ITO, Rewari V. Smt. Narwada, Rewari

ITA 4429/DEL/2012

• Counselvise Citation: 442920114 RSA 2012
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 31-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 17-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Income from undisclosed sources; Opportunity of being heard; Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.4429/DEL/2010 ASSESSMENT YEAR : 2009-10 ITO, SMT. NARWADA, W/O WARD-2, SHRI DHARAM PAL, REWARI. V. NRP BASS ROAD, DHARUHERA, REWARI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AFKPN AFKPN AFKPN AFKPN- -- -9785 9785 9785 9785- -- -L LL L APPELLANT BY : SHRI SAMEER SHARMA, SR. DR. RESPONDENT BY : SHRI GAUTAM JAIN, C.A. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE OR DER OF LD CIT(A) DATED 8.6.2012. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT( A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF ` .28,45,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT AS ASSESSEE FAILED TO FURNISH SUSTAINABLE DOCUMENT EVIDENCE IN THE COURSE OF ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT (A) HAS ERRED IN LAW AND FACTS IN TREATING THE CASH DEPOSIT OF ` .10 LAKHS IN THE BANK IN ON ACCOUNT OF AGREEMENT OF SALE OF LAND AS EXPLAINED ITA NO4429/DEL/2010 2 WITHOUT APPRECIATING THE FACTS AND REASONING DISCUSSED I N DETAIL BY ASSESSING OFFICER IN ASSESSMENT ORDER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT (A) HAS ERRED IN LAW AND FACTS IN ALLOWING THE BENEFIT OF PE AK BALANCE IN BANK ACCOUNT WITHOUT APPRECIATION THE FACTS DISCUSSED I N DETAIL IN ASSESSMENT ORDER. 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, D ELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RE TURN OF INCOME DECLARING INCOME OF ` .1,08,000/- FROM DAIRY BUSINESS AND THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS FROM THE COPY OF BANK ACCOUNT WITH YES B ANK THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAD DEPOSITED CASH AMOUNT OF ` .28,45,000/- ON VARIOUS DATES. ON ENQUIRY THE ASSESSEE SUB MITTED THAT THE AMOUNT OF ` .2,00,000/- REPRESENTED HER PAST SAVINGS. FURTHER IT WAS EXPLAINED THAT THE ASSESSEE HAD ENTERED INTO AN A GREEMENT FOR SALE OF LAND AGAINST WHICH A SUM OF ` .10,50,000/- WAS RECEIVED AND OUT OF SUCH ADVANCE ` .10,00,000/- WAS DEPOSITED ON 17.10.2008. AS REGARDS THE BALANCE AMOUNT OF ` .16,45,000/- IT WAS SUBMITTED THAT THESE WERE DEPOSITED OUT OF WITHDRAWALS ON DIFFERENT D ATES FROM THE SAME BANK. THE ASSESSING OFFICER, HOWEVER, OBSERVED THAT THERE WAS NO PROOF OF ANY PAST SAVINGS OF THE ASSESSEE AND FURTHER HELD THAT THE AGREEMENT OF SALE OF LAND WAS CANCELLED AND NO REASONS FOR CANCELLATIONS OF AGREEMENT WERE MENTIONED. FURTHER T HE ASSESSEE DID NOT EXPLAIN THE REASON FOR REPAYMENT OF ADVANCE MONE Y INSTEAD OF ITS FORFEITURE. THEREFORE, THE ASSESSEE WAS ASKED TO PRODUCE ALL PERSONS WITH WHOM AGREEMENT OF SALE OF LAND WAS EXECUTED. THE ASSESSEE DID NOT PRODUCE THESE PERSONS AND INSTEAD FILED AFFIDAVITS O F THESE PERSONS. ITA NO4429/DEL/2010 3 THE ASSESSING OFFICER ON THE EXAMINATION OF SUCH AFFIDAV ITS OBSERVED THAT THE PERSONS WHO HAD SIGNED THE AFFIDAVITS WERE RESI DENT OF RAJASTHAN WHEREAS THE AFFIDAVITS WERE PREPARED IN REWA RI, HARYANA. FURTHER IT WAS OBSERVED THAT STAMP PAPERS WERE PURCHASED ON 28.11.2011 AND 29.11.2011 THE AFFIDAVITS WERE PREPAR ED. HE OBSERVED THAT IF THE PERSONS OF RAJASTHAN CAN COME TO REWARI, HARYANA FOR PREPARATION OF AFFIDAVITS, IT WAS NOT UNDERSTOOD AS TO WHY THESE PERSONS HAD REFUSED TO APPEAR BEFORE HIM. MOREOVER, HE OBSERVED THAT IN NORMAL COURSE, IF A PERSON IS ASKED FOR AN AFFIDAVIT HE USUALLY GETS IT PREPARED AT NEARER COURT INSTEAD OF TRAVELING TO A D ISTANT PLACE. HE FURTHER OBSERVED THAT SIGNATURES OF THESE PERSONS PLACED ON AFFIDAVITS AND ON AGREEMENT DID NOT MATCH WITH EACH OTHER AND IN VIEW OF THE ABOVE CIRCUMSTANCES HE HELD THAT DEPOSIT OF CASH OF ` .10,00,000/- WAS NOT OUT OF HER EXPLAINED SOURCES. FURTHER HE DID NOT ACCEPT THE EXPLANATION OF ASSESSEE REGARDING DEPOSIT OF BALANCE AM OUNT OF ` .16,45,000/- OUT OF HER CASH IN HAND AS NO DOCUMENTAR Y EVIDENCE WAS FURNISHED. HOWEVER, HE HELD THAT ASSESSEE HAD WITHDRAWN AMOUNT ON VARIOUS DATES FROM BANK ACCOUNT BUT SHE COULD NOT PRO VE THE PURPOSE FOR WHICH THE AMOUNTS WERE WITHDRAWN NOR SHE COULD PR OVE THE NEXUS BETWEEN THE AMOUNT WITHDRAWN AND AMOUNT DEPOSITED IN HER BANK ACCOUNT. IN VIEW OF THE ABOVE CIRCUMSTANCES, THE ENTI RE AMOUNT OF DEPOSIT OF ` .28,45,000/- WAS TREATED AS INCOME FROM UNDISCLOSED SOURCES AND ADDITION U/S 68 OF THE ACT WAS MADE. 3. DISSATISFIED WITH THE ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD CIT(A) AND LD CIT(A) AFTER GOING THROUGH THE SUBMISSIONS OF ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MADE BY T HE AR. THE RECEIPT OF ADVANCE OF ` .10,50,000/- IN CASH ON 12.10.2008 AS PER THE TERMS OF AGREEMENT FOR SALE DATE D 12.10.2008 IS NOT IN DISPUTE. AS EXPLAINED BY THE AR, THE ITA NO4429/DEL/2010 4 AGREEMENT WAS MUTUALLY TERMINATED ON 23.12.2008 AS TH E PURCHASERS APPARENTLY WANTED THE PORTION OF AGRICULTU RAL LAND PERTAINING TO THE ASSESSEE TO BE SEPARATED FIRST. THE TE RMINATION OF AGREEMENT WAS WRITTEN IN THE BACK SIDE OF FIRST PAG E OF THE AGREEMENT FOR SALE. FURTHER, THE TRANSACTION WAS CONF IRMED BY THE AFFIDAVITS OF THE PURCHASERS. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO DOUBT THE GENUINENESS OF THE SAID TRANSACTION. NOT REGISTERING THE AGREEMENT FOR SAL E AND EXECUTING IT ON A STAMP PAPER OF ONLY ` .10/- CANNOT BE THE GROUND FOR SUSPECTING THE GENUINENESS OF THE AGREEMENT . THEREFORE THE SOURCE FOR THE DEPOSIT OF ` .10 LAKHS IN THE BANK ACCOUNT ON 17.10.2008 STAND EXPLAINED, THE ASSESSING OFF ICER HAS NOT MADE ANY ADVERSE COMMENTS ON THE CASH FLOW STATE MENT FILED BY THE ASSESSEE BEFORE HIM. IT IS EVIDENT FROM THE BANK STATEMENT THAT THERE ARE SERIES OF WITHDRAWALS AND DEPO SITS IN THE BANK STATEMENT. NO MATERIAL HAS BEEN BROUGHT ON R ECORD BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UTILIZED THE WITHDRAWALS ELSEWHERE INSTEAD OF RE-DEPOSITING THE SAME IN THE BANK ACCOUNT FROM TIME TO TIME. IN VIEW OF THE ABOV E AND HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE FAIR AND APPROPRIATE TO BRING THE PEAK BALANCE IN T HE BANK ACCOUNT TO TAX. THE ASSESSING OFFICER IS DIRECTED TO WOR KOUT THE PEAK AND ASSESS THE INCOME ACCORDINGLY. IN THE RESULT, T HE GROUND OF APPEAL IS PARTLY ALLOWED. 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, THE LD DR SUBMITTED THAT THE MAIN ENQUIRY FOR ` .10,00,000/- WAS EXPLAINED TO THE ASSESSING OFFICER BEI NG ON ACCOUNT OF AGREEMENT FOR SALE OF LAND AND LD CIT(A) PASSED A V ERY CRIPTIC ORDER WITHOUT GOING THROUGH THE OBSERVATIONS MADE BY THE A SSESSING OFFICER. HE FURTHER SUBMITTED THAT SIGNATURE ON AFFIDAVITS AND ON AGREEMENT TO ITA NO4429/DEL/2010 5 SELL ARE DIFFERENT AND THEREFORE ASSESSEE IN FACT HAD FO RGED SIGNATURES AND THEREFORE PRIMARY ONUS OF PROVING THE CREDITS IN BANK ACCOUNT WAS NOT DISCHARGED. HIGHLIGHTING FROM THE ORDER OF ASSESSING OFFICER HE ARGUED THAT THE BUYERS OF LAND WERE FROM RAJASTHAN WH EREAS THE STAMP PAPERS AND AFFIDAVITS WERE PURCHASED FROM REWARI WHICH IS AGAINST THE HUMAN PROBABILITIES. REGARDING WITHDRAWA LS FROM BANK IT WAS ARGUED THAT THOUGH SOME CHEQUES WERE FOR CASH WITHD RAWAL BUT ON SOME CHEQUES NAME OF SOME PERSONS BABLU WAS WRITTEN, THEREFORE THE CHEQUES DRAWN BY BABLU MAY NOT BE CASH WITHDRAWAL . IN VIEW OF THE ABOVE HE ARGUED THAT THE ORDER OF LD CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 6. THE LD AR, ON THE OTHER HAND, FILED WRITTEN SYNOP SIS OF FACTS OF THE CASE AND SUBMITTED THAT THE AMOUNT OF ` .28,45,000/- REPRESENTED THREE COMPONENTS CONSISTING OF ` .16,45,000/- AS WITHDRAWALS ON VARIOUS DATES FROM SAME BANK ACCOUNT, ` .10,00,000/- RECEIVED AS ADVANCE AGAINST AGREEMENT TO SELL AND ` .2,00,000/- OUT OF SAVINGS OF ASSESSEE. OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 8 -12 WHEREIN CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE BEFORE THE A SSESSING OFFICER WAS PLACED AND IT WAS SUBMITTED THAT ASSESSING OF FICER HAS NOT MADE A WHISPER OF CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE. THEREFORE, IT WAS ARGUED THAT LD CIT(A) HAD CONSIDERE D ALL THESE FACTS AND DELETED THE AMOUNT OF ` .16,45,000/-. REGARDING ` .2,00,000/- OUT OF PAST SAVINGS HE INVITED OUR ATTENTION TO PAPER BOOK PA GES 5 & 6 WHEREIN STATEMENT OF AFFAIR AS ON 31.3.2008 AND 31.3 .2009 WAS PLACED. OUR SPECIFIC ATTENTION WAS INVITED TO CASH IN HAND OF ` .2,25,000/- DECLARED AS ON 31.3.2008. HE ARGUED THAT ASSESSING OFFIC ER DID NOT CONSIDER THE STATEMENT OF AFFAIR WHICH WAS SPECIFICALLY FILED AS PROOF OF PAST SAVINGS OF ASSESSEE. CONTINUING HIS ARGUMENTS THE LD AR SUBMITTED THAT ALLEGATION OF ASSESSING OFFICER THAT NO R EASON FOR CANCELLATION OF AGREEMENT WAS FURNISHED IS WRONG AS TH E REASON FOR ITA NO4429/DEL/2010 6 CANCELLATION ARE ON THE BACK SIDE OF AGREEMENT OF SAL E ITSELF. THEREFORE, HE ARGUED THAT ASSESSING OFFICER WITHOUT ANY JUSTIFICAT ION DID NOT CONSIDER THE AGREEMENT OF SALE OF LAND BY WHICH THE ASSESSEE HAD RECEIVED ` .10,50,000/- WHICH THE LD CIT(A) HAS CONSIDERED AFTER TAKING INTO ACCOUNT ALL FACTS AND CIRCUMSTANCES. 7. REGARDING ARGUMENTS OF LD DR THAT AMOUNTS WITHDRA WN BY BABLU MAY NOT BE CASH WITHDRAWALS, THE LD AR INVITED OUR AT TENTION TO PAPER BOOK PAGE 13 WHERE A COPY OF LETTER WRITTEN TO ASSESSIN G OFFICER WAS PLACED AND WHEREIN THE ENTRIES RELATING TO CASH WITH DRAWALS THROUGH BABLU WERE EXPLAINED. IN VIEW OF THE ABOVE, THE LD AR ARGUED THAT ASSESSEE HAD EXPLAINED THESE TRANSACTIONS ALSO AND HAD THE ASSESSING OFFICER FELT ANY DOUBT HE COULD HAVE VERIFIED FROM THE BANK. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD DEPOSITED AN AMOUNT OF ` .28,45,000/, ON VARIOUS DATES STARTING FROM 20.9.2008 TO 29.12.2008. THE ASSESSEE HAS A LSO WITHDRAWN CASH ON VARIOUS DATES AS IS APPARENT FROM PAPE R BOOK PAGE 7 WHEREIN A COPY OF BANK ACCOUNT IS PLACED. ON PERUSA L OF BANK STATEMENT, WE FIND THAT THERE ARE WITHDRAWALS ON VARI OUS DATES AND ON CERTAIN OCCASIONS WITHDRAWALS WERE THROUGH SOME PERSON N AMED AS BABLU. 9. THE LD DR HAD ARGUED THAT THE CHEQUES GIVEN TO B ABLOO MAY NOT BE CASH WITHDRAWALS. HOWEVER, FROM PAPER BOOK PAGE 13 , WE FIND THAT ASSESSEE VIDE LETTER DATED NIL HAD FURNISHED AN EXPLANAT ION TO ASSESSING OFFICER STATING THEREIN THAT BABLOO WAS SON OF HER HUSBANDS FRIEND WHO WAS GIVEN BEARER CHEQUES TO WITHDRAW FROM THE BANK AND ASSESSING OFFICER DID NOT CONDUCT FURTHER ENQUIRIES FROM BANK. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT ASSES SING OFFICER SHOULD HAVE CONSIDERED THE CASH WITHDRAWALS ALSO TO ARRI VE AT PEAK CREDIT. AS REGARDS THE CLAIM OF ASSESSEE THAT ` .2,00,000/- WAS OUT OF ITA NO4429/DEL/2010 7 HER PAST SAVINGS, WE FIND FROM THE STATEMENT OF AFFAIRS AS ON 31.3.2008 PLACED AT PAPER BOOK PAGE 5 THAT THERE WAS CASH BALAN CE OF ` .2,25,000/- WHICH WAS REDUCED TO ` .25,000/- AS ON 31.3.2009. THE ASSESSEE HAD FILED HER RETURN OF INCOME FROM DIARY BUSIN ESS AND BEING A LADY OF 57 YEARS THE SAVINGS OF ` .2,00,000/- CANNOT BE DOUBTED.. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT(A) TO THE EXTENT OF ` .18,45,000/-. AS REGARDS ` .10,00,000/- CLAIMED TO HAVE BEEN DEPOSITED OUT OF ADVANCE AGAINST SALE OF LAN D WE DEEM IT APPROPRIATE THAT ASSESSING OFFICER SHOULD RE-ADJUDICATE ON THIS ISSUE AS IN OUR OPINION, THE LD CIT(A) HAS NOT CONSIDERED ANY OBSERVATION OF ASSESSING OFFICER. THE ASSESSING OFFICER SHOULD CONDUCT FURT HER ENQUIRY REGARDING THE AGREEMENT OF SALE AND ON THE BASIS OF EN QUIRIES SHOULD ARRIVE AT PROPER CONCLUSION ON THE BASIS OF ANY FURTH ER EVIDENCE TO BE FILED BY THE ASSESSEE. NEEDLESS TO SAY THAT THE ASSESSEE WILL BE GIVEN A PROPER OPPORTUNITY OF BEING HEARD. THEREFORE, TO TH E EXTENT OF ` .10,00,000/- THE CASE IS REMITTED BACK. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE R EVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH DAY O F AUGUST, 2013. SD/- SD/- (RAJPAL YADAV ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.08.08.2013. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. (ITAT, NEW DELHI). ITA NO4429/DEL/2010 8 DATE OF HEARING 1.8.2013 DATE OF DICTATION 1.8.2013 DATE OF TYPING 1..8.2013 DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.