Shri Yogesh Sharma, 61-B, Sahakar Nagar, Jhotwara, Jaipur, Jaipur V. ITO, Ward-4(1), Jaipur, Ward-4(1), Jaipur

ITA 455/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6569 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Tangible material; Competent authority; Reason to believe
• Section: 13; 22; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 455/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2009-10 SH. YOGESH SHARMA 61- B, SAHAKAR NAGAR, JHOTWARA, JAIPUR CUKE VS. ITO, WARD-4(1), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BWKPS3999H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (ADDL. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 24/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 16/09/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), AJMER DATED 09.01.2019 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, TH E NOTICE ISSUED U/S 148 AND THE CONSEQUENT ORDER PASSED U/S 147 IS ILLEGAL & BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.20,04,900/- BY TREATING THE CASH DEP OSIT IN THE BANK ACCOUNT AS UNEXPLAINED. ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 2 2.1 THE LD. CIT(A) HAS FURTHER ERRED ON FACTS AND I N LAW IN CONFIRMING THE ADDITION BY:- (I) NOT ACCEPTING THE CONTENTION OF ASSESSEE THAT PART OF THE DEPOSIT IN THE BANK ACCOUNT IS OUT OF THE CASH AMOUNT RECEI VED ON SALE OF 3 FLATS FOR RS.25 LACS. (II) NOT ALLOWING THE CREDIT OF WITHDRAWAL MADE IN CASH FROM THE SAME BANK ACCOUNT WHICH IS A SOURCE OF DEPOSIT IN T HE BANK ACCOUNT. (III) MAKING VARIOUS INCORRECT OBSERVATIONS WHILE CONFIRM ING THE ADDITION. 2. REGARDING GROUND NO. 1, THE LD AR SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RETAIL TRADING OF GIFT I TEMS IN THE NAME & STYLE M/S JEETU GIFT CENTRE. THE AO ISSUED NOTICE U /S 148 DATED 22.03.2016 FOR THE FOLLOWING REASONS:- AS PER INFORMATION AVAILABLE ON RECORD, IT IS GATH ERED THAT THE ASSESSEE DEPOSITED IN CASE OF RS.20,94,000/- DURING FY 2008- 09. ON VERIFICATION OF RECORD IT IS FOUND THAT AS PER A ST NO RETURN OF INCOME WAS FILED FOR THE AY 2009-10. IN ABSENCE OF THE RET URN OF INCOME, CASH DEPOSIT COULD NOT BE VERIFIED. THUS THE ASSESSEE HA S FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT. THEREFORE, I HAVE REASON TO BELIEVE THAT THE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT OF RS.20,94,900/- WITHIN THE MEA NING AND PURVIEW OF SECTION 147 OF THE IT ACT, 1961 AND IT IS A FIT CASE TO ISSUE NOTICE U/S 148 OF THE IT ACT, 1961. 3. IT WAS SUBMITTED THAT IN RESPONSE TO NOTICE U/S 148, ASSESSEE FILED HIS RETURN OF INCOME ON 29.08.2016 DECLARING PROFIT OF RS.4,347/- U/S ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 3 44AF AND PROFIT OF RS.2 LACS U/S 44AD. BEFORE THE L D. CIT(A) ASSESSEE CHALLENGED THE VALIDITY OF NOTICE ISSUED U/S 148 ST ATING THAT AT THE TIME OF APPROVAL FROM PR. CIT, NO REASONS HAS BEEN RECOR DED BY THE AO. THE PR. CIT HAS GIVEN THE APPROVAL WITHOUT SEEING THE R EASONS RECORDED BY AO. FURTHER THE PR. CIT HAS GIVEN COMMON APPROVAL I N 33 CASES AND IN THE LIST THERE IS NO MARK AGAINST THE NAME OF ASSES SEE. THE LD. CIT(A), HOWEVER, UPHELD THE REOPENING BY HOLDING THAT THE A SSESSMENT WAS REOPENED AFTER OBTAINING APPROVAL OF THE COMPETENT AUTHORITY U/S 151. THE AO HAD SPECIFIC INFORMATION THAT THERE WAS CASH DEPOSIT OF RS.20,94,900/- IN THE BANK ACCOUNT MAINTAINED BY TH E APPELLANT FOR WHICH NO SATISFACTORY EXPLANATION WAS AVAILABLE LOO KING TO THE FACT THAT NO RETURN OF INCOME WAS FILED BY THE ASSESSEE. THER EFORE, AO HAD SUFFICIENT MATERIAL IN HIS POSSESSION TO FORM THE B ELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. 4. FURTHER, OUR REFERENCE WAS DRAWN TO THE PROVISI ONS OF SECTION 151(1) WHICH READ AS UNDER:- NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER, AFTER THE EXPIRY OF A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COM MISSIONER OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORD ED BY THE ASSESSING OFFICER, THAT IT IS A FIT CASE FOR THE IS SUE OF SUCH NOTICE. 5. IT WAS SUBMITTED THAT IN THE PRESENT CASE, THE A O RECORDED THE REASONS ON THE ORDER SHEET ON 18.03.2016 AND THEREA FTER ISSUED NOTICE U/S 148 ON 22.03.2016. HOWEVER, BEFORE RECORDING OF THE REASONS, THE LD. PCIT HAS ACCORDED THE APPROVAL U/S 151 FOR ISSU E OF NOTICE U/S 148 ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 4 IN 33 CASES FOR AY 2009-10 ON 17.03.2016 AS IS EVID ENT FROM THE COMMUNICATION MADE FROM THE OFFICE OF PCIT TO THE J CIT. THUS, THE PCIT HAS GIVEN THE APPROVAL PRIOR TO THE REASONS RE CORDED BY THE AO FOR REOPENING THE ASSESSMENT. THUS, WHEN NO REASONS WER E RECORDED BY AO BEFORE THE APPROVAL, QUESTION OF SATISFACTION BY PCIT DOES NOT ARISE. FURTHER, THE PCIT HAS GIVEN COMMON APPROVAL IN 33 C ASES AND IN THE LIST THERE IS NO MARK AGAINST THE NAME OF ASSESSEE. THUS , THE NOTICE ISSUED U/S 148 IS ILLEGAL AND BAD IN LAW AND THE SAME BE QUASHED. 6. IT WAS FURTHER SUBMITTED THAT THE AO SOLELY ON T HE BASIS OF INFORMATION THAT THERE IS CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE HAS PRESUMED THAT INCOME HAS ESCAPED ASSES SMENT AS RETURN OF INCOME IS NOT FILED BY THE ASSESSEE. ONLY ON PRE SUMPTION, NOTICE U/S 148 CANNOT BE ISSUED AS THE PRIMARY CONDITION FOR R EOPENING IS THAT AO SHOULD HAVE REASONS TO BELIEVE THAT INCOME HAS ESCA PED ASSESSMENT. FOR ARRIVING AT REASON TO BELIEVE, THE AO MUST MAKE AT LEAST SOME PRIMARY ENQUIRY AT HIS END TO COME TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. NO SUCH ENQUIRY IS MADE BY THE AO BEFOR E ISSUANCE OF NOTICE U/S 148. HENCE, THE REOPENING IS BAD IN LAW. IN THIS CONNECTION RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS:- VINOD COMMODITIES LTD. VS. ACIT (2019) 182 DTR 49 ( JODH) SH. MAHAVIR PARSAD VS. ITO (ITA NO.924/DEL/2015 DT. 09.10.2017) 7. PER CONTRA, THE LD DR SUBMITTED THAT THE CONTEN TION OF THE LD AR THAT THE APPROVAL FOR REOPENING THE ASSESSMENT HAS BEEN ACCORDED BY THE LD PR CIT EVEN PRIOR TO RECORDING OF REASONS BY THE AO IS FACTUALLY INCORRECT AND IS NOT BORNE OUT OF THE RECORDS. IT WAS SUBMIT TED THAT THERE CANNOT ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 5 BE A SITUATION WHERE THE APPROVAL IS ACCORDED BY A HIGHER AUTHORITY EVEN PRIOR TO THE AO RECORDING THE REASONS AND INIT IATING THE PROPOSAL FOR SEEKING SUCH APPROVAL. IN THE INSTANT CASE, TH E REASONS WERE RECORDED BY THE AO ON 03.03.2016 AS APPARENT FROM T HE FORM FOR RECORDING THE REASONS FOR INITIATING THE PROCEEDING S UNDER SECTION 148 AND FOR OBTAINING THE APPROVAL FROM THE PR. CIT-II, JAIPUR, THEREAFTER, THE PROPOSAL FOR SEEKING APPROVAL ALONG WITH RELEVA NT RECORDS WERE TO THE LD PR CIT- II JAIPUR THROUGH JOINT COMMISSIONER OF INCOME TAX, RANGE 4 JAIPUR ON 08.03.2016. THE JOINT COMMISSI ONER OF INCOME TAX, RANGE 4 JAIPUR ACCORDED HER APPROVAL ON 11.0 3.2016 AND THE MATTER WAS THEREAFTER SENT ON 17.03.2016 FOR APPROV AL OF LD PR CIT- II JAIPUR WHO ACCORDED HIS APPROVAL ON 17.03.2016 AND ON RECEIPT OF SUCH APPROVAL, ENTRY IN THE ORDER SHEET WAS MADE BY THE AO ON 18.03.2016 AND NOTICE U/S 148 WAS ISSUED BY THE ASSESSEE ON 22 .03.2016. IT WAS ACCORDINGLY SUBMITTED THAT ENTRY IN THE ORDER SHEET DATED 18.03.2016 CANNOT BE READ AND UNDERSTOOD AS THE DATE OF RECORD ING OF THE REASONS AS THE REASONS WERE RECORDED EARLIER ON 03.03.2016 AS BORNE OUT OF THE RECORDS AND THEREAFTER, ON RECEIVING THE APPROVAL, THE NOTICE WAS ISSUED TO THE ASSESSEE. IT WAS ACCORDINGLY SUBMITTED THAT THE CONTENTION OF THE LD AR THAT THE APPROVAL FOR REOPENING THE ASSES SMENT HAS BEEN ACCORDED BY THE LD PR CIT EVEN PRIOR TO RECORDING O F REASONS BY THE AO IS FACTUALLY INCORRECT AND IS NOT BORNE OUT OF THE RECORDS AND THUS, NEEDS TO BE REJECTED. IT WAS FURTHER SUBMITTED THAT THE AO PRIOR TO RECORDING OF THE REASONS HAVE TRIED TO CARRY OUT PRELIMINARY ENQUIRY AND A LETTER DATED 27.01.2016 WAS ISSUED TO THE ASSESSEE TO FURN ISH THE RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME, HOWEVER, T HERE WERE NO COMPLIANCE ON PART OF THE ASSESSEE. IN SUCH A SCEN ARIO, WHERE THE AO IS IN POSSESSION OF TANGIBLE INFORMATION THAT THERE ARE CASH DEPOSITS IN ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 6 THE BANK ACCOUNT OF THE ASSESSEE AND THE LATTER IS NOT WILLING TO COME FORWARD TO EXPLAIN THE SOURCE OF SUCH DEPOSIT, THE AO IS CLEARLY HAVING A REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE H AS ESCAPED ASSESSMENT. IT WAS ACCORDINGLY SUBMITTED THAT THER E WAS NO PRESUMPTION ON PART OF THE AO WHILE ISSUING THE NOT ICE, RATHER HE HAS THE TANGIBLE INFORMATION AND THE BASIS TO FORM A PR IMA FACIE BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT AND THUS, THERE I S NO INFIRMITY IN ISSUANCE OF NOTICE U/S 148 AND THE CONSEQUENT ASSES SMENT ORDER PASSED U/S 147 OF THE ACT AND THE GROUND OF APPEAL SO TAKEN BY THE ASSESSEE SHOULD THEREFORE BE DISMISSED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSE D THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, ON PERUSAL OF RECORD S AND THE SEQUENCE OF EVENTS RIGHT FROM RECORDING OF THE REASONS BY THE A O ON 03.03.2016 TO ACCORDING OF APPROVAL BY THE JCIT ON 11.03.2016 TO ACCORDING OF APPROVAL BY PR CIT ON 17.03.2016 TO ENTRY IN THE OR DER SHEET ON 18.03.2016 TO THE FINAL ISSUANCE OF NOTICE U/S 148 ON 22.03.2016, WE FIND THAT THE REASONS HAVE BEEN DULY RECORDED BY TH E AO ON 03.03.2016 AND THEREAFTER, THE PROPOSAL FOR SEEKING SANCTION W AS MOVED BY THE AO THROUGH JCIT AND THE APPROVAL WAS FINALLY GRANTED B Y THE PR CIT ON 17.03.2016 AND THEREFORE, IT IS NOT A CASE WHERE TH E APPROVAL FOR REOPENING THE ASSESSMENT HAS BEEN ACCORDED BY THE L D PR CIT EVEN PRIOR TO RECORDING OF REASONS BY THE AO AND ACCORDI NGLY, THE CONTENTION SO ADVANCED BY THE LD AR IN THIS REGARD CANNOT BE A CCEPTED AS THE SAME IS NOT BORNE OUT OF RECORDS. 9. NOW, COMING TO OTHER CONTENTION ADVANCED BY THE LD AR THAT ONLY ON PRESUMPTION, NOTICE U/S 148 SHOULD NOT BE ISSUED AND THE AO SHOULD HAVE CARRIED OUT CERTAIN PRIMARY ENQUIRY AT HIS END TO COME TO BELIEVE ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 7 THAT INCOME HAS ESCAPED ASSESSMENT, WE FIND THAT TH E AO DID TRY TO MAKE SUCH PRIMARY ENQUIRY AND HAS TRIED TO REACH OU T TO THE ASSESSEE AND HAS ISSUED A LETTER DATED 27.01.2016 SEEKING DE TAILS OF FILING OF RETURN OF INCOME AND THE INCOME SO DISCLOSED THEREI N. HOWEVER, FOR REASONS BEST KNOWN TO THE ASSESSEE, THE LATTER HAD CHOSEN TO IGNORE AND NOT EVEN RESPONDED TO SUCH ENQUIRY AND LETTER I SSUED BY THE AO. IN SUCH A SCENARIO, THE ASSESSEE CANNOT NOW COME AN D PLEAD THAT THE AO MUST MAKE ATLEAST SOME PRIMARY ENQUIRY BEFORE CO MING TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, THE AO HAD THE TANGIBLE MATERIAL IN FORM OF INFORMATION THAT T HE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS 20,94,900/- IN HIS B ANK ACCOUNT DURING THE FINANCIAL YEAR 2008-09 AND BASIS SUCH INFORMATI ON IN HIS POSSESSION, THE AO TRIED TO MAKE PRELIMINARY ENQUIRY DIRECTLY F ROM THE ASSESSEE AND THE LATTER HAVING FAILED TO RESPOND TO SUCH ENQUIRI ES AND IN ABSENCE OF PAST TAX HISTORY OF THE ASSESSEE, WE FIND THAT THE AO HAS RIGHTLY EXERCISED HIS JURISDICTION U/S 147 AND ISSUED NOTIC E U/S 148 OF THE ACT. AT THE TIME OF ISSUANCE OF NOTICE, WHAT IS REQUIRED IS THAT THE AO SHOULD BE IN POSSESSION OF TANGIBLE INFORMATION AND MATERI AL WHICH IN THE PRESENT CASE IS CASH DEPOSIT IN THE BANK ACCOUNT AN D IT IS NOT THE CASE OF THE ASSESSEE THAT THE BANK ACCOUNT DOESNT BELON G TO IT OR THE FACT THAT HE IS NOT AWARE OF THE CASH SO DEPOSITED IN TH E SAID BANK ACCOUNT. WHERE THE ASSESSEE IS NOT DISPUTING THE BANK ACCOUN T AND CASH TRANSACTIONS SO REFLECTED IN SUCH BANK ACCOUNT, THE RE IS THUS NO DISPUTE THAT SUCH INFORMATION QUALIFY AS TANGIBLE PIECE OF INFORMATION DULY SUBSTANTIATED. IN TERMS OF ESTABLISHING NEXUS BETW EEN SUCH TANGIBLE INFORMATION AND FORMATION OF BELIEF THAT THE SAME R EPRESENT THE INCOME WHICH HAS ESCAPED ASSESSMENT, THE AO DID TRY TO MAK E THE PRELIMINARY ENQUIRY FROM THE ASSESSEE AND HAVING FAILED IN HIS EFFORTS TO SOLICIT ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 8 ASSESSEES RESPONSE AND THE FACT THAT THE ASSESSEE IS NOT A REGULAR TAX FILER AND HAS THUS NO PAST TAX HISTORY, WE DONOT SE E ANY FAULT WHERE THE AO FORMS A PRIMA FACIE BELIEF THAT CASH SO DEPOSITE D REPRESENTS THE INCOME WHICH HAS ESCAPED ASSESSMENT. THERE MAY BE A SITUATION WHERE AFTER ISSUANCE OF NOTICE U/S 148, THE ASSESSE E DECIDE TO RESPOND AND EXPLAIN THE SOURCE OF SUCH CASH DEPOSIT AND THE EXPLANATION SO OFFERED BY THE ASSESSEE MAY OR MAY NOT FIND FAVOUR WITH THE AO FULLY OR THERE COULD BE A SCENARIO WHERE ONLY PART OF THE CA SH DEPOSIT IS FINALLY ASSESSED TO TAX, THE SAME CANNOT PRECLUDE THE AO IN EXERCISING HIS JURISDICTION U/S 147 AS ALL THAT IS REQUIRED AT THE TIME OF RECORDING OF THE REASONS IS THAT THE FORMATION OF A PRIMA FACIE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT. WE HAVE ALSO GONE THROUGH THE DECISIONS CITED AT THE BAR AND FIND THAT THERE ARE DISTINGUISHABLE ON FACTS AND HENCE, DOESNT SUPPORT THE CASE OF THE ASSESSEE. WE ACCOR DINGLY UPHELD THE ISSUANCE OF NOTICE U/S 148 AND THE CONSEQUENT ASSES SMENT ORDER U/S 147 AND THE GROUND OF APPEAL IS THUS DISMISSED. 10. NOW, COMING TO GROUND NOS. 2 & 2.1 OF THE ASSES SEES APPEAL WHERE THE ASSESSEE HAS CHALLENGED THE SUSTENANCE OF ADDITION OF RS 20.04 LACS. 11. IN THIS REGARD, THE LD AR SUBMITTED THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THERE IS A DEPOSIT OF RS.20,94,900/- IN STANDARD CHARTERED BANK ACCOUNT O F ASSESSEE IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE VIDE LETTER DT. 29.08.2016 & 05.09.2016 EXPLAINED THAT HE WAS APPOINTED AS POWER OF ATTORNEY (POA) HOLDER BY SH. GIRDHARIL LAL TO LOOK AFTER HIS PROPERTY SITUATED AT JODLA POWER HOUSE, SIKAR ROAD, JAIPUR. ON SUCH PROP ERTY THE ASSESSEE CONSTRUCTED 3 FLATS 16A, 16B & 16. THE ENTIRE SALE CONSIDERATION ON SALE ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 9 OF THESE FLATS AMOUNTING TO RS.25 LACS WAS RECEIVED BY HIM AND PROFIT ON SALES OF SUCH FLAT WAS DECLARED IN THE RETURN OF INCOME. THE CASH DEPOSIT IN THE BANK ACCOUNT WAS OUT OF SALE PROCEED S OF THESE FLATS. 12. IT WAS SUBMITTED THAT THE AO, HOWEVER, HELD THA T ASSESSEE HAS ADMITTED THAT EXPENSES ON CONSTRUCTION OF FLATS WER E INCURRED OUT OF SALE CONSIDERATION RECEIVED FROM SALE OF ONE FLAT. THIS MEANS THAT MAJOR PORTION OF SALE CONSIDERATION WAS UTILIZED BY THE A SSESSEE IN CONSTRUCTION OF FLATS AND THERE WAS NO AVAILABILITY OF CASH WITH HIM TO DEPOSIT IN BANK ACCOUNT AS CLAIMED BY HIM. FURTHER ASSESSEE HAS ALSO INVESTED RS.20 LACS IN THE NAME OF HIS WIFE SMT. SA RITA SHARMA FOR PURCHASE OF PROPERTY FROM SH. NAWAL KISHORE PAREEK AND THE SOURCE OF SUCH INVESTMENT HAS NOT BEEN EXPLAINED. THIS MEANS SOURCE OF INVESTMENT WAS ALSO OUT OF SALE CONSIDERATION OF AB OVE FLATS. THUS, AGAINST RECEIPT OF RS.25 LACS, ASSESSEE HAS INVESTE D RS.25 LACS IN ANOTHER PROPERTY, DEPOSITED CASH IN BANK ACCOUNT AT RS.20,94,900/- AND HAS ALSO SPENT MONEY ON CONSTRUCTION OF FLATS. ALL THESE FACTS DISPROVE THE CONTENTION OF ASSESSEE THAT SOURCE OF DEPOSIT W AS SALE AMOUNT OF FLATS. THUS, CASH DEPOSIT OF RS.20,94,900/- IN THE SAVING BANK ACCOUNT IS TREATED AS UNEXPLAINED AND DEPOSITED OUT OF UNDISCL OSED INCOME. 13. IT WAS FURTHER SUBMITTED THAT ON APPEAL, THE LD . CIT(A) HELD THAT ASSESSEE HAS DECLARED PROFIT OF RS.2 LACS ON SALE O F ABOVE FLATS FOR RS.25 LACS. SINCE THE ASSESSEE HIMSELF HAS DECLARED PROFI T ON SALE OF THESE FLATS AS HIS INCOME, THEREFORE, THERE CANNOT BE ANY DISPUTE ABOUT THE FACT THAT THE PROPERTY MENTIONED IN THE POWER OF AT TORNEY ON 12.02.2008 WAS PURCHASED BY HIM. IN OTHER WORDS, TH E ASSESSEE HAS TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.23 LACS (RS. 25 LACS- RS.2 LACS) IN ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 10 PURCHASE OF PLOT ALONG WITH CONSTRUCTION AND THE CO NSTRUCTION WORK DONE AFTER PURCHASE OF PLOT. FURTHER THE ASSESSEE H AS INVESTED RS.20 LACS FOR PURCHASE OF PROPERTY IN THE NAME OF HIS WI FE. THEREFORE, THE CONTENTION OF ASSESSEE THAT CONSIDERATION OF SALE P ROCEEDS OF RS.25 LACS WAS USED FOR MAKING CASH DEPOSIT WITHOUT EXPLAINING THE SOURCE OF INVESTMENT OF RS.23 LACS IN PURCHASE & CONSTRUCTION OF FLATS AND INVESTMENT IN PROPERTY IN THE NAME OF WIFE OF RS.20 LACS CANNOT BE ACCEPTED. ALL THE THREE FLATS WERE SOLD WITHIN THE PERIOD OF 6 MONTHS, THEREFORE, IT CANNOT BE ACCEPTED THAT THE SALE PROC EEDS OF ONE FLAT WAS UTILIZED FOR CONSTRUCTION OF ANOTHER FLAT. THUS, TH E SOURCE OF CASH OF RS.20,94,900/- DEPOSITED BY THE ASSESSEE IN HIS BAN K ACCOUNT REMAINS UNEXPLAINED. AGAINST THE SAID FINDINGS, THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL. 14. IT WAS FURTHER SUBMITTED THAT THE ENTIRE CASH D EPOSIT IN THE BANK ACCOUNT IS OUT OF THE EARLIER WITHDRAWALS AS IS EVI DENT FROM THE FOLLOWING DATE WISE STATEMENT OF CASH WITHDRAWAL AND CASH DEP OSIT. (AMOUNT IN RS.) DATE CASH WITHDRAWAL CASH DEPOSIT CASH BALANCE AVAILABLE 04.04.2008 4,00,000/- - 4,00,000/- 11.04.2008 2,00,000/- - 6,00,000/- 09.06.2008 - 4,500/- 5,95,500/- 10.06.2008 2,000/- - 5,97,500/- 11.06.2008 - 5,000/- 5,92,500/- 12.06.2008 - 5,000/- 5,87,500/- 13.06.2008 - 20,000/- 5,67,500/- ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 11 14.06.2008 32,250/- - 5,99,750/- 16.06.2008 - 20,000/- 5,79,750/- 17.06.2008 - 10,000/- 5,69,750/- 19.06.2008 - 10,000/- 5,59,750/- 20.06.2008 20,000/- - 5,79,750/- 23.06.2008 - 3,000/- 5,76,750/- 24.06.2008 2,500/- 7,000/- 5,72,250/- 25.06.2008 2,000/- 5,000/- 5,69,250/- 26.06.2008 4,450/- - 5,73,700/- 27.06.2008 10,000/- - 5,83,700/- 28.06.2008 5,000/- 7,000/- 5,81,700/- 02.07.2008 7,81,500/- - 13,63,200/- 04.07.2008 50,000/- 10,000/- 14,03,200/- 05.07.2008 - 10,000/- 13,93,200/- 07.07.2008 - 3,000/- 13,90,200/- 08.07.2008 10,000/- - 14,00,200/- 10.07.2008 4,000/- - 14,04,200/- 15.07.2008 2,000/- 30,000/- 13,76,200/- 17.07.2008 5,000/- - 13,81,200/- 18.07.2008 - 10,000/- 13,71,200/- 19.07.2008 5,000/- - 13,76,200/- 22.07.2008 5,000/- 10,000/- 13,71,200/- 23.07.2008 10,000/- - 13,81,200/- 24.07.2008 - 4,100/- 13,77,100/- 25.07.2008 - 28,000/- 13,49,100/- 26.07.2008 - 10,000/- 13,39,100/- 28.07.2008 10,000/- 5,000/- 13,44,100/- ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 12 29.07.2008 70,000/- 10,000/- 14,04,100/- 30.07.2008 - 37,000/- 13,67,100/- 31.07.2008 - 20,000/- 13,47,100/- 01.08.2008 - 6,000/- 13,41,100/- 05.08.2008 4,000/- 10,000/- 13,35,100/- 06.08.2008 - 12,000/- 13,23,100/- 07.08.2008 6,200/- 3,000/- 13,26,300/- 08.08.2008 55,000/- - 13,81,300/- 11.08.2008 - 10,000/- 13,71,300/- 12.08.2008 15,000/- 8,500/- 13,77,800/- 13.08.2008 - 17,000/- 13,60,800/- 14.08.2008 5,000/- 10,000/- 13,55,800/- 19.08.2008 40,000/- - 13,95,800/- 20.08.2008 - 20,000/- 13,75,800/- 30.08.2008 - 6,000/- 13,69,800/- 02.09.2008 3,000/- 10,000/- 13,62,800/- 03.09.2008 5,250/- - 13,68,050/- 06.09.2008 - 20,000/- 13,48,050/- 08.09.2008 - 13,000/- 13,35,050/- 09.09.2008 4,000/- - 13,39,050/- 11.09.2008 - 10,000/- 13,29,050/- 12.09.2008 3,750/- 33,000/- 12,99,800/- 15.09.2008 - 14,000/- 12,85,800/- 16.09.2008 10,844/- - 12,96,644/- 19.09.2008 - 45,000/- 12,51,644/- 22.09.2008 1,23,350/- - 13,74,994/- 27.09.2008 1,000/- - 13,75,994/- ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 13 08.10.2008 5,000/- - 13,80,994/- 10.10.2008 12,700/- - 13,93,694/- 11.10.2008 3,950/- - 13,97,644/- 13.10.2008 17,000/- - 14,14,644/- 25.10.2008 - 20,000/- 13,94,644/- 27.10.2008 12,500/- - 14,07,144/- 31.10.2008 - 40,000/- 13,67,144/- 01.11.2008 - 10,000/- 13,57,144/- 03.11.2008 - 10,000/- 13,47,144/- 04.11.2008 - 10,000/- 13,37,144/- 05.11.2008 3,000/- 25,000/- 13,15,144/- 14.11.2008 - 20,000/- 12,95,144/- 19.11.2008 5,000/- - 13,00,144/- 26.11.2008 - 35,000/- 12,65,144/- 28.11.2008 - 9,800/- 12,55,344/- 10.12.2008 5,000/- - 12,60,344/- 12.12.2008 4,300/- - 12,64,644/- 16.12.2008 3,500/- - 12,68,144/- 18.12.2008 5,600/- - 12,73,744/- 24.12.2008 4,100/- - 12,77,844/- 30.12.2008 - 20,000/- 12,57,844/- 05.01.2009 9,985/- 1,00,000/- 11,67,829/- 06.01.2009 - 10,000/- 11,57,829/- 10.02.2009 15,000/- - 11,72,829/- 11.02.2009 - 8,90,000/- 2,82,829/- 13.02.2009 1,000/- - 2,83,829/- 16.02.2009 10,000/- - 2,93,829/- ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 14 04.03.2009 5,200/- - 2,99,029/- 07.03.2009 - 50,000/- 2,49,029/- 13.03.2009 - 1,85,000/- 64,029/- 17.03.2009 - 49,000/- 15,029/- 20.03.2009 - 80,000/- (64,971/-) 26.03.2009 10,000/- - 10,000/- TOTAL 20,39,929/- 20,94,900/- FROM THE ABOVE TABLE IT CAN BE NOTED THAT SOURCE OF ENTIRE CASH DEPOSIT IS OUT OF THE CASH WITHDRAWAL EXCEPT THAT ON 20.03. 2009 THERE IS A DEPOSIT OF RS.64,971/- WITHOUT CORRESPONDING WITHDR AWAL FROM THE BANK ACCOUNT. THIS DEPOSIT IS ALSO COVERED BY INCOME OF RS.1,88,750/- DECLARED IN THE RETURN OF INCOME. HENCE, THE DEPOSI T IN BANK ACCOUNT IS COVERED BY THE WITHDRAWAL MADE FROM THE BANK ACCOUN T. 15. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS PURCHASED A PLOT NO.16, SIKAR ROAD, JAIPUR HAVING CONSTRUCTED AREA O F 1,000 SQ. FT. AS PER REGISTERED POA DT. 12.02.2008. ON THE SAID PLOT HE MADE FURTHER CONSTRUCTION AND SOLD THE 3 FLATS CONSTRUCTED ON IT FOR WHICH AMOUNT IS RECEIVED AS UNDER:- FLAT NO. DATE OF RECEIPT CASH RECEIVED CHEQUE RECEIVED TOTAL AMOUNT PB 16A 02.04.2008 25,000/- 6,00,000/- 6,25,000/- 22-27 16B 28.06.2008 3,30,000/- 8,00,000/- 11,30,000/- 29-36 16 01.10.2008 1,15,000/- 6,30,000/- 7,45,000/- 37-4 5 ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 15 THE AMOUNT DEPOSITED IN THE BANK ACCOUNT IS IMMEDIA TELY WITHDRAWN AND THUS, THE ASSESSEE HAS SUFFICIENT CASH BALANCE TO UTILISE PART AMOUNT IN CONSTRUCTION AND REALISE BACK THE SAME AS IS EVIDENT FROM THE BANK STATEMENT. FURTHER THE PAYMENT MADE FOR PURCHA SE OF PLOT IN THE NAME OF WIFE FOR RS.25 LACS ON 23.10.2008 IS BY CHE QUE WHICH CLEARED FROM THE BANK ACCOUNT OF ASSESSEE BETWEEN 04.10.200 8 TO 12.02.2009 OUT OF CASH DEPOSIT FROM EARLIER WITHDRAWALS AND CH EQUE RECEIVED BY THE ASSESSEE. THUS, THE SOURCE OF DEPOSIT IN THE BANK A CCOUNT IS FULLY EXPLAINED. HENCE, THE ADDITION MADE BY AO AND CONFI RMED BY LD. CIT(A) BY TREATING THE ENTIRE CASH DEPOSIT IN THE B ANK ACCOUNT BY IGNORING THE WITHDRAWALS FROM THE SAID BANK ACCOUNT IS UNJUSTIFIED AND UNCALLED FOR. 16. PER CONTRA, THE LD DR SUBMITTED THAT THE STATEM ENT FURNISHED BY THE LD A/R REGARDING CASH DEPOSITS AND CASH WITHDRA WALS WAS NOT AVAILABLE DURING THE COURSE OF ASSESSMENT AND APPEL LATE PROCEEDINGS AND IN ANY CASE, THE SAME IS NOT A COMPLETE RECONCI LIATION STATEMENT WHEREIN THE COMPLETE PICTURE CAN BE SEEN IN TERMS O F OVERALL CASH AND CHEQUE DEPOSITS AND WITHDRAWALS IN RESPECT OF ASSES SEES BUSINESS TRANSACTION AND TRANSACTION OF PURCHASE AND SALE OF PROPERTY AND IN ABSENCE OF THE SAME, THE CONTENTION ADVANCED BY THE LD AR THAT CASH DEPOSITS IS OUT OF EARLIER WITHDRAWALS CANNOT BE AC CEPTED. IT WAS FURTHER SUBMITTED THAT THE EXPLANATION OF THE ASSES SEE BEFORE THE LOWER AUTHORITIES THAT THE SOURCE OF CASH DEPOSITS IS OUT OF SALE PROCEEDS FROM SALE OF FLATS HAS ALSO BEEN RIGHTLY REJECTED. THE LD DR ACCORDINGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 16 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LIMITED ISSUE UNDER CONSI DERATION RELATES TO SOURCE OF CASH DEPOSITS OF RS 20,94,900/- MADE IN T HE ASSESSEES BANK ACCOUNT DURING THE FINANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSI TS. IN ITS FIRST RESPONSE DATED 29.08.2016, THE ASSESSEE HAS SUBMITT ED THAT CASH DEPOSITS OF RS 20,94,900/- WITH STANDARD CHARTERED BANK OUT OF ALL CONSIDERATION OF SALES OF ABOVE PROPERTIES AS WELL AS PERTAINS TO BUSINESS IN THE NAME OF M/S JEETU GIFT CENTRE. BOT H THE AO AS WELL AS LD CIT(A) HAVE REJECTED THE EXPLANATION OF THE ASSE SSEE THAT THE SOURCE OF SUCH DEPOSITS IS OUT OF SALE PROCEEDS OF THE PRO PERTIES SO SOLD BY THE ASSESSEE. WE HAVE GONE THROUGH THE FINDINGS OF THE LOWER AUTHORITIES AND CONTENTION ADVANCED BY THE ASSESSEE AND DONT F IND ANY INFIRMITY IN THE FINDINGS SO RECORDED BY BOTH THE LOWER AUTHORIT IES. HOWEVER, THE EXPLANATION OF THE ASSESSEE THAT SOURCE OF SUCH CAS H DEPOSITS IS ALSO ARISING OUT OF HIS BUSINESS TRANSACTIONS HAS NOT BE EN DISPUTED BY THE REVENUE. THEREFORE, IN ABSENCE OF ANY THING CONTRAR Y BROUGHT ON RECORD BY THE REVENUE, WHERE THE ASSESSEES SOURCE OF INCO ME IS FROM SALE OF PROPERTY AND ALSO FROM THE RETAIL BUSINESS IN NAME OF M/S JEETU GIFT CENTRE AND THE FACT THAT THE SALE CONSIDERATION OF THE PROPERTY SO SOLD AND PROFIT SO DECLARED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE, IT WOULD BE REASONABLE TO HOLD THAT SOURCE OF CASH DEPOSITS IS FROM THE ASSSESSEES BUSINESS RUN IN NAME AND STYLE OF M/S JEETU GIFT CENTRE. IN FACT, THE AO HAS ALSO RECORDED A FINDING THAT THE ASSESSEE HAS REPORTED A LOW TURNOVER IN RETAIL GIFT BUSINESS WHICH IS NOT DISPUTED BY THE ASSESSEE. THEREFORE, GIVING CREDIT OF TURNO VER OF RS 86,935/- AS OFFERED BY THE ASSESSEE U/S 44AF OF THE ACT, REMAIN ING CASH DEPOSIT OF ITA NO. 455/JP/2019 SH. YOGESH SHARMA, JAIPUR VS. ITO, JAIPUR 17 RS 20,07,965/- IS TREATED AS TURNOVER OF THE ASSESS EE FROM HIS RETAIL GIFT BUSINESS AND WHICH SHOULD ACCORDINGLY SUFFER TAXATI ON @ 5% OF TURNOVER U/S 44AF OF THE ACT. FURTHER, THE CONTENT ION ADVANCED BY THE LD AR THAT CASH DEPOSITS IS OUT OF EARLIER WITHDRAW ALS CANNOT BE ACCEPTED IN ABSENCE OF COMPLETE RECONCILIATION STAT EMENT PERTAINING TO BUSINESS AND PROPERTY TRANSACTIONS UNDERTAKEN BY TH E ASSESSEE DURING THE YEAR. IN THE RESULT, THE GROUND OF APPEAL IS PARTLY ALLOWED. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 16/09/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/09/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. YOGESH SHARMA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD-4(1), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 455/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR