Rohit Sahi, Ludhiana V. ITO, Ludhiana

ITA 443/CHANDI/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8385 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.443/CHD/2013 (ASSESSMENT YEAR : 2009-10) ROHIT SAHI, VS. THE INCOME TAX OFFICER, 108, ASHOK NAGAR, WARD VI(2), NEAR BUS STAND, LUDHIANA. LUDHIANA. NEW ADDRESS: 302-B, SKY MARK GARDEN, RANJIT AVENUE, PHASE I, MALERKOTLA ROAD, LUDHIANA. PAN: ATIPS2489Q AND ITA NO.502/CHD/2013 (ASSESSMENT YEAR : 2009-10) THE INCOME TAX OFFICER, VS. ROHIT SAHI, WARD VI(2), 108, ASHOK NAGAR, LUDHIANA. NEAR BUS STAND, LUDHIANA. PAN: ATIPS2489Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 28.01.2016 DATE OF PRONOUNCEMENT : 08.02.2016 O R D E R PER RANO JAIN, A.M . : BOTH THE CROSS APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF 2 INCOME TAX (APPEALS)-I, LUDHIANA DATED 27.2.2013 FO R ASSESSMENT YEAR 2009-10. ITA NO.443/CHD/2013 (ASSESSEES APPEAL) 2. THE GROUND NO.1 RAISED BY THE ASSESSEE READS AS UNDER : 1. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.3,28,500/- OUT OF ADDITION OF RS.6,28,500/- MADE BY THE LEARNED ASSESSING OFFICER BEING THE CASH DEPOSITED IN THE SBI BANK ACCOUNT FOR REPAYMENT OF LOAN AS PER PARA 13 OF HIS ORDER. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD TAKEN A HOME LOAN FROM SBI WHEREIN CER TAIN AMOUNTS WERE DEPOSITED DURING THE YEAR. THE ASSESS ING OFFICER MADE ADDITION OF A AMOUNT OF RS.6,28,500/- REJECTING THE CONTENTION OF THE ASSESSEE THAT THE D EPOSITS WERE MADE BY WITHDRAWING THE AMOUNT WHICH HAS BEEN DEPOSITED IN THIS LOAN ACCOUNT BY THE ASSESSEE. 4. BEFORE THE LEARNED CIT (APPEALS), IT WAS STATED THAT AN AMOUNT OF RS.3 LACS WAS DEPOSITED IN THE SA ID ACCOUNT AFTER WITHDRAWING THE SAME FROM HIS OWN BAN K ACCOUNTS WITH HDFC AND ICICI BANK AND THE AMOUNTS WERE DEPOSITED ON THE SAME DAY ON WHICH THE WITHDRA WALS WERE MADE. FOR THE REMAINING AMOUNTS WHICH WERE SM ALL DEPOSITS, IT WAS SUBMITTED THAT THESE DEPOSITS WERE MADE OUT OF CASH AVAILABLE WITH THE ASSESSEE AND THE CAS H FLOW STATEMENT WAS FILED BEFORE THE LEARNED CIT (APPEALS ). THE LEARNED CIT (APPEALS) ACCEPTED THE EXPLANATION OF T HE 3 ASSESSEE TO THE TUNE OF RS.3 LACS. HOWEVER, HE CON FIRMED THE ADDITION TO THE EXTENT OF RS.3,28,500/-. 5. THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US STATED THAT THE CASH FLOW STATEMENT WAS FILED BEFOR E THE LEARNED CIT (APPEALS) TO SHOW THAT THERE WAS ENOUGH CASH IN HAND TO BE DEPOSITED IN THIS BANK ACCOUNT AT REG ULAR INTERVALS. THE AMOUNTS HAVE BEEN DEPOSITED IN SMAL L DENOMINATION. A COPY OF CASH FLOW STATEMENT WAS AL SO FILED BEFORE US IN THE PAPER BOOK FILED BY THE ASSE SSEE AND IT WAS SHOWN TO US THAT ON THE DATES ON WHICH THESE DEPOSITS HAVE BEEN MADE, THERE WAS ENOUGH CASH AVAILABLE. THE ATTENTION WAS DRAWN PARTICULARLY TO PAGES 15 AND 16 OF THE PAPER BOOK, WHEREBY ALL THESE DEPO SITS WERE BEING MADE OUT OF THE CASH AVAILABLE WITH THE ASSESSEE. 6. THE LEARNED D.R. RELIED ON THE ORDER OF THE LEARNED CIT (APPEALS) AND STATED THAT THE LEARNED C IT (APPEALS) HAD BEEN FAIR ENOUGH TO GIVEN THE ASSESSE E THE BENEFIT OF THE AMOUNTS DEPOSITED BY WITHDRAWING FRO M OTHER BANK ACCOUNTS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF THE CASH FLOW STATEMENT FILED BEFORE US, WE SEE THAT THE DATES ON WHICH THE IMPUGNED DEPOSITS HAVE BEEN MADE, THERE IS ENOUGH CASH AVAILABLE WITH THE ASSES SEE TO RE-DEPOSIT IN THE BANK. THE LEARNED COUNSEL FOR TH E 4 ASSESSEE HAS BEEN ABLE TO POINT OUT VARIOUS DATES O N WHICH THE DEPOSITS ARE MADE AND ALSO BE AVAILABILIT Y OF THE CASH ON THOSE DATES. THIS IS ALSO NOT IN DOUBT THA T THIS CASH FLOW STATEMENT WAS SUBMITTED BEFORE THE LEARNE D CIT (APPEALS). THE LEARNED CIT (APPEALS) HAS NOT CAST ANY APPREHENSION ON THIS CASH FLOW STATEMENT. HIS ONLY CONTENTION WAS THAT THE WITHDRAWALS MADE IN SMALL AMOUNTS CANNOT BE USED FOR RE-PAYMENT OF LOANS. WE DO NOT AGREE WITH THIS OBSERVATION OF THE LEARNED CIT (APPEALS) SINCE IT IS A FACT ON RECORD THAT THE RE- PAYMENT OF LOAN ACCOUNT HAS BEEN MADE FROM THESE SMALL AMOU NTS AS CAN BE SEEN FROM THE LOAN ACCOUNT WHICH THE ASSE SSING OFFICER HIMSELF HAS REPRODUCED IN HIS ORDER AND IN FACT, THE QUERY RAISED BY THE ASSESSING OFFICER AS WELL A S THE LEARNED CIT (APPEALS) IS WITH REGARD OF THESE SMALL RE- PAYMENTS ONLY. IN VIEW OF THIS, WE DIRECT THE ASSE SSING OFFICER TO DELETE THE ADDITION MADE BY THE ASSESSIN G OFFICER. THE GROUND NO.1 RAISED BY THE ASSESSEE I S ALLOWED. 8. THE GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDER : 2. THAT THE LEARNED CIT(A) HAS ALSO ERRED IN CONFIRMING ADDITION OF RS. 13,11,100/- MADE BY THE LEARNED ASSESSING OFFICER BEING THE CASH DEPOSITED IN SBI BANK ACCOUNT AS PER PARA 15 OF HIS ORDER 9. BRIEFLY, THE FACTS ARE THAT THERE WERE CASH DEPOSITS AMOUNTING TO RS.13,11,100/- IN THE STATE B ANK 5 OF INDIA, WHICH THE ASSESSING OFFICER ADDED IN THE INCOME OF THE ASSESSEE REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE. 10. BEFORE THE LEARNED CIT (APPEALS), IT WAS SUBMITTED THAT THE ASSESSEE HAD SOLD A PLOT AT BASA NT CITY, PAKHOWAL ROAD, LUDHIANA ON 12.6.2008 FOR RS.10,47,500/-, OUT OF WHICH AMOUNTS OF RS.4 LACS A ND RS.5 LACS WERE DEPOSITED ON 12.6.2008 AND 13.6.2008 RESPECTIVELY. THE EXPLANATION WITH REGARD TO THE REMAINING DEPOSITS WERE ALSO GIVEN TO THE LEARNED C IT (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE, THE LEARNED CIT (APPEALS) HELD THAT THE S AME CANNOT BE ACCEPTED AS LOGICAL BECAUSE THE PROPERTY IN QUESTION STILL STAND IN ASSESSEES NAME IN REVENUE RECORD, SPECIALLY WITH NO TRANSFER IN THE FORM OF REGISTERE D DEED HAS TAKEN PLACE. IN THE SAID CIRCUMSTANCES, THE LE ARNED CIT (APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 11. THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US MADE SUBMISSIONS WITH REGARD TO THE DEPOSIT OF RS.9 LACS ONLY. HIS SUBMISSION WAS THAT THE ASSESSEE HAS SOL D THE PLOT THROUGH GENERAL POWER OF ATTORNEY WHICH IS THE COMMON PRACTICE IN THE PRESENT AGE. THE AGREEMENT TO SELL WAS DULY REGISTERED WITH THE REGISTRAR OFFICE AND HAS BEEN UNDERTAKEN BEFORE THE SUB REGISTRAR. IT HAS ALSO BEEN MENTIONED VERY CLEARLY IN THE AGREEMENT TO SEL L THAT WHOLE OF THE SALE CONSIDERATION HAS EXCHANGED HANDS IN 6 FRONT OF THE WITNESS AND NOW THERE IS NO TITLE OF T HE ASSESSEE ON THE SAID PLOT. THE AGREEMENT TO SELL I S A VALID DOCUMENT IN THE EYE OF LAW AND IT IS ALSO A FACT TH AT THE DEPOSIT IN THE BANK HAS BEEN MADE EXACTLY ON THE DA TE OF THE AGREEMENT TO SELL. 12. THE LEARNED D.R. RELIED ON THE ORDER OF THE LO WER AUTHORITIES AND STRESSED ON THE FACT THAT SINCE TIL L NOW THE PLOT HAS NOT BEEN REGISTERED, HOW CAN IT BE ASSUMED THAT THE TOTAL AMOUNT OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS THE AMOUNT WHICH WAS DEPOSITED IN THE ACCOUNT. 13. WE HAVE HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO PERUSED THE EVIDENCES ADDUCED BEFORE US BY THE ASSESSEE IN ITS PAPER BOOK, WHICH ARE IN THE FORM O F PURCHASE DEED, BUYER SELLER AGREEMENT AND REGISTERE D POWER OF ATTORNEY. WE SEE THAT THE AGREEMENT TO SE LL IS A REGISTERED DOCUMENT. THE FACT THAT THE PROPERTY HA S STILL NOT BEEN REGISTERED OR ACTUALLY BEEN REGISTERED IS NOT RELEVANT TO THE FACTS OF THE PRESENT CASE. WE HAVE TO SEE WHETHER THE AMOUNT DEPOSITED IN THE BANK ACCOUNT IS OUT OF THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. THE RELEVANT FACT TO BE CONSIDERED IS THAT THE DEPOSIT HAS BEEN MADE ON THE SAME DATE ON WHICH THE AGREEMENT TO SEL L HAS BEEN EXECUTED. IT HAS BEEN VERY CLEARLY MENTIONED IN THE AGREEMENT THAT THE SAME CONSIDERATION HAS ACTUALLY BEEN RECEIVED BY THE ASSESSEE. THE ONLY FLAW IN THE SAI D DOCUMENT CAN BE THAT THERE IS NO MENTION OF SALE 7 CONSIDERATION IN THIS AGREEMENT TO SELL. HOWEVER, WE CANNOT BRUSH ASIDE THE SUBMISSION OF THE ASSESSEE T HAT HE WOULD SELL HIS PROPERTY ATLEAST FOR A MINIMUM PR ICE EQUAL TO PRICE FOR WHICH HE HAS PURCHASED THE SAME. IN VIEW OF THESE CIRCUMSTANCES, WE ARE INCLINED TO GIV EN BENEFIT TO THE ASSESSEE TO THE EXTENT OF RS.9 LACS RECEIVED BY HIM AS SALE CONSIDERATION OF PLOT. FURTHER FOR THE REMAINING DEPOSITS, NO SUBMISSIONS WERE MADE BEFORE US. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO DELET E THE ADDITION TO THE EXTENT OF RS.9 LACS. THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 14. THE LEARNED COUNSEL FOR THE ASSESSEE PREFERRED NOT TO PRESS GROUND NOS.3& 4, THEREFORE, THE SAME A RE DISMISSED AS NOT PRESSED. 15. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.502/CHD/2013 : (REVENUES APPEAL) 16. IT IS STATED THAT IN THE PRESENT APPEAL THE TA X EFFECT IS LESS THAN THE PRESCRIBED LIMIT PROVIDED B Y THE RECENT CBDT CIRCULAR. 17. ACCORDING TO CIRCULAR NO.21/2015 DATED 10.12.2015, THE CBDT IN SUPERCESSION OF EARLIER INSTRUCTIONS HAS DIRECTED THAT DEPARTMENTS APPEALS BEFORE ITAT SHALL NOT BE FILED IN CASES WHERE THE TAX EFF ECT DOES 8 NOT EXCEED THE MONETARY LIMIT OF RS.10 LACS. THE T AX WILL NOT INCLUDE ANY INTEREST THEREON. IT IS FURTHER CL ARIFIED THAT IF IN THE CASE OF AN ASSESSEE, DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH T HE TAX EFFECT IN RESPECT OF DISPUTED ISSUES EXCEEDS THE MO NETARY LIMIT SO SPECIFIED. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO B E FILED HENCEFORTH BEFORE THE TRIBUNAL. THE PENDING APPEALS BELOW THE SPECIFIED TAX LIMIT MAY BE WITHDRAWN/NOT PRESSE D. 18. ADMITTEDLY, IN THE DEPARTMENTAL APPEAL, THE TA X EFFECT IS LESS THAN RS.10 LACS, THEREFORE, DEPARTME NTAL APPEAL IS NOT MAINTAINABLE. THE LEARNED CIT (APPEA LS) DECIDED THE ISSUE IN DEPARTMENTAL APPEAL ON FACTS A ND THE CASE OF THE REVENUE WOULD NOT FALL IN THE EXCEPTION S PROVIDED IN THE ABOVE CIRCULAR. 19. IN VIEW OF THE ABOVE, LEARNED D.R. STATED THAT SINCE DEPARTMENTAL APPEAL IS FILED AGAINST THE CBDT INSTRUCTIONS, THEREFORE, HE WOULD NOT BE PRESSING DEPARTMENTAL APPEAL. THEREFORE, THE ABOVE DEPARTME NTAL APPEAL IS DISMISSED BEING NOT PRESSED. 9 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF MARCH, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 8 TH MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH