Ishpal Bhardwaj, New Delhi V. ACIT, New Delhi

ITA 4542/DEL/2010

• Counselvise Citation: 454220114 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENU JAHVERI
• Assessee Lawyers: MOHIT GUPTA ACA; DIVESH C HANDER
• Keywords: Gift
• Section: 143(3); 234B; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C NEW DELHI) BEFORE SHRI G.D. AGARWAL, HONBLE VICE-PRESIDENT AN D SHRI RAJPAL YADAV: HONBLE JUDICIAL MEMBER ITA NO. 4542/DEL/2010 ASSESSMENT YEAR: 2007-08 ISHPAL BHARDWAJ, VS. ASSISTANT CIT, 6-B, DDA FLATS, CIRCLE 9(1), NEW FRIENDS COLONY, NEW DELHI. NEW DELHI. (PAN: AAAPI8462Q) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI DIVESH C HANDER, FCA & SH. MOHIT GUPTA, ACA RESPONDENT BY: SMT.RENU JAHVERI, SR. DR DATE OF HEARING : 22.02.2012 DATE OF PRONOUNCEMENT : 23.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 31.3.2010 PASSED FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEALS TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCE OF ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.1,88,62,418 WHICH IS ADDED WITH THE AID OF SECTION 68 OF THE IN COME-TAX ACT, 1961. THE ASSESSEE IS ALSO IMPUGNING CHARGING OF INTEREST UNDER SEC.23 4A AND 234B OF THE ACT. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME-TAX ON 08.02.2008 DECLARING TOTAL INCOME AT RS.8,01,542 . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) WAS ISSUED ON 18.07.2008, WHICH WAS DULY SERVED UPON THE ASSESSEE . IT EMERGES OUT FROM THE ASSESSMENT ORDER THAT ASSESSING OFFICER HAD ISSUED A DETAILED QUESTIONNAIRE ON 16.5.2009, I.E. AFTER NINE MONTHS. ACCORDING TO TH E ASSESSING OFFICER, THIS QUESTIONNAIRE REMAINED UN-COMPLIED WITH. HE OBSERVE D THAT IN ASSESSMENT YEAR 2006-07, AN ASSESSMENT WAS FRAMED UNDER SEC. 143(3) AND AN AMOUNT OF RS.4,19,92,571 WAS DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT IN THAT ASSESSMENT YEAR AND WAS TREATED AS UNEXPLAINED CASH. WITH THIS BACKGROUND, ASSESSING OFFICER SCRUTINIZED THE RETURN OF THE PRESENT YEAR. HE OBSE RVED THAT ASSESSEE HAS DEPOSITED A SUM OF RS.1,87,77,280 IN CASH IN VARIOUS BANK ACCOU NTS DURING THIS ASSESSMENT YEAR. WHEN THE ASSESSEE WAS CONFRONTED WITH THE CASH DEPO SITED BY HIM, HE POINTED OUT THAT CASH OF RS.1,70,97,113 WAS WITHDRAWN BY HIM FR OM THE SEVERAL BANK ACCOUNTS AND IT WAS REDEPOSITED ONE OR THE OTHER BANK. THUS, THE SOURCE EXPLAINED BY THE ASSESSEE IS WITHDRAWAL FROM THE BANKS. THE ASSESSIN G OFFICER HAS REJECTED THIS EXPLANATION OF THE ASSESSEE MAINLY FOR TWO REASONS; (I) HE DOUBTED AS TO WHY AN ASSESSEE WOULD WITHDRAW CASH FROM ONE BANK AND DEPO SITED IT WITH THE OTHER BANK; AND (II) ON PAGE 9 OF THE ASSESSMENT ORDER, HE HAD NARRATED ONE INSTANCE WHEREIN HE POINTED OUT THAT A SUM OF RS.3,80,000 WAS DEPOSITED IN THE BANK ACCOUNT WITH IDBI AT SECUNDERPUR, GURGAON ON 30.11.2006. ON THIS VERY DAY, RS.3,80,000 WAS WITHDRAWN FROM THE SAME BANK ACCOUNT AT PITAMPUR BR ANCH. ACCORDING TO THE ASSESSING OFFICER, FROM THE CASH FLOW STATEMENT, IT REVEALED THAT ASSESSEE WAS 3 ALREADY HAVING CASH OF RS.12,10,876. HE HAS FURTHER WITHDRAWN RS.3,80,000 FROM BANK ACCOUNT NO.396 WITH VIJYA BANK. ACCORDING TO T HE ASSESSING OFFICER, IF ASSESSEE WAS HAVING SUBSTANTIAL AMOUNT OF CASH AS O N 30.11.2006 THEN WHY HE HAD WITHDRAWN FURTHER CASH. THE OTHER REASON ASSIGNED B Y THE ASSESSING OFFICER IS THAT ASSESSEE FAILED TO EXPLAIN THE CASH DEPOSITED IN TH OSE ACCOUNTS FROM WHERE WITHDRAWALS HAVE BEEN ALLEGED. 2. THE NEXT SOURCE GIVEN BY THE ASSESSEE IS GIFT RE CEIVED FROM THE WIFE. HOWEVER, LEARNED ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE. HE ALSO REJECTED THE EXPLANATION THE ASSESSEE THAT HE IS IN THE BUSI NESS OF PURCHASE AND SALES OF BUILDING MATERIAL. 3. ON APPEAL, ASSESSEE HAS REITERATED HIS CONTENTIO NS. HE FILED A PAPER BOOK BEFORE THE LEARNED FIRST APPELLATE AUTHORITY AND SU BMITTED THAT ASSESSING OFFICER HAS NOT ANALYTICALLY EXAMINED THE EACH ENTRY. LEARN ED FIRST APPELLATE AUTHORITY DID NOT MAKE ANY DISCUSSION ON THE ISSUE. HER ORDER IS RUNNING INTO 20 PAGES. ON PAGES 1 AND 2, SHE HAS REPRODUCED THE GROUNDS OF APPEAL T AKEN BY THE ASSESSEE. ON PAGE 3, SHE HAS REPRODUCED ORDER SHEET ENTRIES EXHIBITING T HE OPPORTUNITIES GIVEN TO THE ASSESSEE BY HER DURING ASSESSMENT PROCEEDINGS, AND FROM PAGES 4 TO 19, SHE HAS REPRODUCED THE ASSESSMENT ORDER. THE FINDINGS OF TH E LEARNED CIT(APPEALS) READ AS UNDER: DURING THE APPELLATE PROCEEDINGS, A.R. HAS STATED THAT INCOME WAS DETERMINED WITHOUT ANY REFERENCE TO THE MATERIAL AV AILABLE ON RECORD OR WITHOUT CONFRONTING THE ASSESSEE. HOWEVER, IN VIEW OF THE PRE PONDEROUS OF FACTS AND EVIDENCE BROUGHT ON RECORD ABOVE THIS CON TENTION OF THE ASSESSEE 4 CANNOT BE ACCEPTED. ASSESSEE WAS REPEATEDLY GIVEN A N OPPORTUNITY AND WAS CONFRONTED AND IT IS THE ASSESSEE/AR WHO DID NOT GI VE INFORMATION IN TOTO BY WAY OF EVIDENCE/CASH FLOW/STATEMENT OF AFFAIRS/CONF IRMATION ETC. AND A.O. HAD TO SEEK INFORMATION U/S. 133(6) FROM VARIOUS BA NKS ETC. AR HAS CONTENDED THAT DETAILS REGARDING VARIOUS LOANS WERE GIVEN TO THE A.O. WHO FAIL TO VERIFY THE SAME AND THIS WAS THE SOURCE OF DEPOSIT IN THE BANK. THE PAPERS SUBMITTED BY AR (AND CLAIMED TO BE SUBMITTED TO THE A.O.) HAVE BEEN EXAMINED) THESE ARE MERE PHOTO COPIES NOT ON ANY LE TTER HEAD, NOT BEARING ANY INFORMATION REGARDING THE SOURCE OF THE PAYMENT , NOT ACCOMPANIED ANY COPY OF BANK ACCOUNT OF THE ALLEGED CREDITOR, NOT A CCOMPANIED BY COPY OF THE WRITTEN OF ALLEGED CREDITOR, OR DETAILS REGARDING T HE SOURCE OF THE SAID AMOUNT. AS AN EXAMPLE, IT IS DISCUSSED THAT ONE SH. PRAMOD KR. SINGH FROM PAURI GARWAL HAD ON 16.10.2009 CLAIMED TO BE REPAYI NG RS.2,00,000 FROM THE MONEY (RS. 3,40,000 ADVANCED BY THE ASSESSEE. HOWEV ER, NO DETAILS REGARDING SOURCE OF SAID MONEY OR DATE OF LOAN GIVEN BY THE A SSESSEE HAVE BEEN SUBMITTED. BESIDES THIS, IT IS PERTINENT THAT THE S AID LIST IS NOT EXHAUSTIVE AND NOT RELATABLE TO THE STATEMENTS OF AFFAIR/CASH FLOW /PURCHASE AND SOURCE OF THE SAID LOAN. IN VIEW OF THE ABOVE FACTS AND CONTENTIONS OF THE A SSESSEE CANNOT BE ACCEPTED WHEREIN IT WAS STATED THAT ALL INFORMATION WAS MADE AVAILABLE TO THE A.O. AND HENCE IT IS HELD THAT ASSESSEES RELIANCE ON CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR 195 (S.C) IS MISPLACED AND DISTINGUISHED. IN VIEW OF THE FACTS AND STAND OF THE A.O. IS CONFIRMED. IN THE RESULT, THE APPEAL IS DISMISSED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ASSESSEE HAS FILED A PAPER BOOK RUNNING INTO 75 PAG ES BEFORE THE LEARNED FIRST APPELLATE AUTHORITY. THE ASSESSEE HAS THEREAFTER P LACED ON RECORD 17 JUDGMENTS ON THE FILE OF THE LEARNED CIT(APPEALS). HE HAS PLACED CASH FLOW STATEMENT ON PAGE 5 NOS. 131 TO 133 OF THE PAPER BOOK. ACCORDING TO THE LEARNED COUNSEL, ASSESSEE HAS EXPLAINED EACH ENTRY RELATING TO THE CASH DEPOSIT A ND FROM WHERE THE CASH HAS COME. LEARNED ASSESSING OFFICER HAS REJECTED THE EXPLANAT ION OF THE ASSESSEE BY ASSIGNING GENERAL REASONS INSTEAD OF PIN POINTING ANY DEFECTS IN THE DETAILS. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, ASSESSING OFFICER HAS DRAWN INFERENCE OF HUMAN BEHAVIOR AS TO WHY A PERSON WOULD WITHDRAW WHEN HE IS ALREADY HAVING SUFFICIENT CASH IN HANDS. HE PRAYED THAT THE LEARNED FIRST APP ELLATE AUTHORITY HAS NOT APPLIED HER MIND ON THE DETAILS AND NOT TAKEN ANY M ATERIAL INTO CONSIDERATION. SHE SIMPLY CONCUR WITH THE FINDING OF THE ASSESSING OFF ICER FOR READJUDICATION. HE PRAYED THAT THE ISSUE BE SET ASIDE TO THE FILE OF T HE ASSESSING OFFICER FOR READJUDICATION IN THE LIGHT OF MATERIAL PLACED ON R ECORD BY THE ASSESSEE. 5. LEARNED DR ON THE OTHER HAND OPPOSED THE PRAYER OF THE ASSESSEE. SHE POINTED OUT THAT LEARNED ASSESSING OFFICER HAS ISSU ED ALL THE DETAILS SUBMITTED BY THE ASSESSEE AND THEREAFTER DRAWN CONCLUSION SHOWING HO W THE CONDUCT OF THE ASSESSEE IS CONTRARY TO AN ORDINARY HUMAN BEING IN SUCH SITUATI ON. SHE WAS UNABLE TO GIVE ANY REPLY AS TO WHETHER LEARNED FIRST APPELLATE AUTHORI TY HAS CONSIDERED THE RELEVANT DETAIL OR NOT. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. SECTION 68 OF THE INCOME-TAX ACT, 1961 P ROVIDES WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, 6 SATISFACTORY, THE SUMS SO CREDITED MAY BE CHARGED T O INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN ORDER TO EXPLAIN THE CASH DEPOSITED IN THE BANK, ASSESSEE HAS SUBMITTED CASH FLOW STATEMENT AND THE DETAILS OF THE BANKS FROM WHERE CASH WAS WITHDRAWN. ASSESSING OFFICER WAS NOT SATI SFIED WITH THE EXPLANATION OF ASSESSEE. THIS NON-SATISFACTION OF THE ASSESSING OF FICER IS BASED ON INFERENCE RATHER POINTING OUT ANY ACTUAL DEFECT EITHER IN THE WITHDR AWAL OF CASH FROM THE BANK ACCOUNTS OR FROM THE CASH FLOW STATEMENT. ASSESSING OFFICER WAS REQUIRED TO LOOK INTO THE NATURE OF DETAILS AND THEN POINT OUT FAULT IN THOSE DETAILS BEFORE REJECTING THEM. THE DETAILS CANNOT BE REJECTED ON THE GROUND THAT WHY A PERSON WOULD WITHDRAW FURTHER CASH FOR MAKING DEPOSITS WHEN HE I S ALREADY HAVING SUFFICIENT CASH BALANCE. THIS LOGIC IS NOT SUFFICIENT TO CHARGE AN ASSESSEE WITH A TAX LIABILITY OF MORE THAN A CRORE OF RUPEES. LEARNED FIRST APPELLATE AUT HORITY AT ALL NOT APPLIED HER MIND TO THE DETAILS. TAKING INTO CONSIDERATION ALL THESE ASPECTS, WE DEEM IT NECESSARY TO SET ASIDE THE IMPUGNED ORDERS AND RESTORE THESE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION. THE OBSERVATIONS MADE B Y US WOULD NOT IMPAIR OR INJURE THE CASE OF THE ASSESSING OFFICER OR IT WILL NOT CA USE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 23.03.201 2 SD/- SD/- ( G.D. AGRAWAL ) ( R AJPAL YADAV ) VICE-PRESIDENT JUDIC IAL MEMBER DATED: 23/03/2012 MOHAN LAL 7 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR