Shri Sanjay Joshie, Mumbai V. ITO, Ward-3, Bhilwara

ITA 460/JODH/2018

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8869 (ITAT-JODHPUR)
• Duration Of Justice: 5 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-01-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 30-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68; 2; 143(3); 142(1); 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR (SMC). BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No.460/Jodh/2018 Assessment Year: 2015-16 Shri Sanjay Joshie A-29, Raghunath Vihar Kharghar, Sector-14, Navi Mumbai-410210. [PAN: AAZPJ2927L] (Appellant) Vs. Income Tax Officer Ward-3, Bhilwara. (Respondent) Appellant by None (W.S.) Respondent by Ms. Nidhi Nair, Sr. DR Date of Hearing 23.01.2024 Date of Pronouncement 02.02.2024 ORDER Per: DR. S. Seethalakshmi, JM: This appeal filed by assessee is arising out of the order of the Learned Commissioner of Income Tax (Appeals), Ajmer dated 30.07.2018 [here in after “ld.CIT(A)(NFAC)”] for assessment year 2015-16 which in turn arise from the order dated 01.12.2017 passed under section 143(3) of the Income Tax Act, by the AO. 2. In this appeal, the assessee has raised following grounds: - I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 2 “1) Whether on the facts and circumstances of the case the Honourable Commissioner of Income Tax (Appeals) has erred to upheld the assessment order passed by AO (Rs. 9,50,000/- 1,70,000/- allowed by the CIT(A)) Rs. 2) The AO has erred to make addition Amount of Rs. 7,80,000 (Rs. 9,50,000/- allowed by the CIT(A)} Rs.1,70,000/- 3) It is mentioned here that SBI A/c. No: 00000010385632164 is in the joint name of Mr. Sanjay Joshie and Mrs. Rashmi Joshie. The Cash Deposits are made by both person. The Assessee's wife Smt. Rashmi Joshie has sold Property in F.Y. 2014-15 and registry was registered on 23/05/2014, Rs. 4,00,000/- is cash out of sale consideration. Before the registrar it is certified that Rs. 40,00,000/- Consideration is already received. It means that 4,00,000/- are received before registration and same has been deposited by spouse in the bank A/c. which the AO has not accepted. The submission of AR Dated 29/11/2017 has not been accepted by AO. The AO has not provided opportunity of hearing before making the addition. 4) The assessee has received Rs. 21,000/- from the sale of Household items etc. 5) Rs. 3,59,000/-is old accumulated saving of Assessee's wife Smt. Rashmi Joshie. 6) The ground of appeal may be added, crave or modify before the appellate authority during the appeal period.” 3. None appeared on behalf of the assessee however, the Bench decided to proceed the matter on merit based on the materials available on record, concerning the issue in question and written submission filed by the assessee. 4. Brief fact of the case is that the assessee has e-filed the return for the Assessment Year 2015-16, on 23.07.2015 declaring return income at Rs. I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 3 8,54,710/-. The return was then processed u/s 143(1) of the IT Act, 1961 at CPC. Bangalore. Subsequently, the case was selected for limited scrutiny through CASS, a notice u/s 143(2) of the Act was issued on 29.07.2016 fixing the hearing on 24.08.2016 and the same were duly served upon the assesses through Registered Speed Post. On 29.08.2016, the ld. AR of the assessee attended and submitted power of attorney and requested for adjournment. Accordingly, case adjourned. Thereafter, Notice u/s 142(1) of the I. T. Act, 1961 along with detailed questionnaire was issued on 25.04.2017 fixing the hearing on 17.05.2017 and the same were duly served upon the assessee through Registered Speed Post. In compliance,Ld. AR of the assessee attended on 24.08.2017 & 28.11.2017 and furnished necessary details called for. The case was discussed with him, and the details furnished were examined on test check basis and the same were placed on record.Subject to the above discussion and decision, total income of the assessee is computed as under:- “ In view of the above, the A/R of the assessee has been failed to submit any satisfactory explanation, documentary evidences etc. in support of their claim regarding source of cash deposits of Rs. 9,50,000/- made in the saving bank account of the assessee. Thus, amount of cash deposits of Rs. 9,50,000/- made by the assessee in his saving bank account is hereby held as unexplained cash credit and accordingly. amount of Rs. 9,50,000/- is herby added to the total income of the assessee u/s 68 of the L. T. Act, 1961 for the year under consideration. As per section 115BBE(1)(a) the amount of Rs. 9,50,000/- is liable for tax @30%. As per sub-section 2 of section 115BBE of the I.T. Act, 1961 no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act. I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 4 5. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds of the appeal so raised the relevant finding of the ld. CIT(A) is reiterated here in below:- “3.2 I have gone through the assessment order, grounds of appeal and written submission carefully. The appellant has not furnished evidence to substantiate the statements made in the written submission filed by him except the proof of Rs. 1,70,000/- of sale of care on 15.03.2014. Therefore, it is held that AO has rightly made the addition of Rs. 7,80,000/- (Rs. 9,50,000-Rs. 1,70,000) in respect of deposits made in the bank account. Accordingly, addition of Rs. 7,80,000/- is confirmed and addition of Rs. 1,70,000/- is deleted. 4.0 In the result, the appeal is partly allowed.” 6. As the assessee did find favour in full of the appeal filed before ld. CIT(A) The present appeal filed against the said order of the ld. CIT(A) before this tribunal on the grounds as reiterated in para 2 above. To support the grounds so raised the written submission were filed and placed on record which is extracted in below:- “It is humbly prayed and requested to your honour that the facts and submissions of the case are as follows: 1) Mr. Sanjay Joshie is a salaried Employee and files the ITR regularly. It is further requested humbly that during the period under consideration the wife of the assessee Mrs. Rashmi Joshie had sold a Property situated at Bhilwara. 2) From the sale of the abovementioned Property the spouse of the assessee Mrs. Rashmi joshie had received a consideration of Rs. 40 Lacs. Out of the total consideration of the property amounting RS. 40 Lacs. Mrs. Rashmi Joshi had received Rs. 4 Lacs in cash in beginning of April 2014 and Rs. 36 Lacs in cheque. 3) The total consideration of Rs. 40 Lacs (Rs. 4 Lacs in cash and Rs. 36 Lacs in cheque) received by the spouse of the Assessee was deposited in the Joint savings Bank account number 00000010385632164, held in the name of Mr. Sanjay Joshie and Mrs. Rashmi Joshi, in SBI, Bhilwara. I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 5 4) As it is apparent from the record that the Saving Bank account Number 00000010385632164 of State Bank of India, Bhilwara is jointly held by Mr. Sanjay Joshie and Mrs. Rashmi Joshi, the account is operated by both Assessee and his spouse, as it is evident from the bank statements that the sale consideration of Property of Mrs. Rashmi Joshie is also deposited in the same joint account. 5) It is humbly requested that the Learned AO has not mentioned any where in the Assessment order regarding to the Bank account number and the joint holders of the abovesaid bank account. 6) The Assessee had submitted the reply and facts along with the nature and source of the cash deposit, during the assessment proceedings and even before the Honourable Commissioner appeals, but the facts apparent from record are not considered by Learned AO as well as Honourable Commissioner Appeals. It is further requested humbly that before making any decision by the authorities, no opportunity was granted to the assessee. 7) Mr. Sanjay Joshi and Mrs. Rashmi Joshi both are assessed under Income tax and both are earning persons. The abovementioned Bank account is operated by both Mr. Sanjay Joshie and Mrs. Rashmi Joshi. 8) It is submitted to your honour that in the body of the assessment order, the Learned AO has neither mentioned the bank account number, nor mentioned to whom it belongs and in which bank this bank account is mentioned is not specified by the assessing officer. The fact that the Bank account is in joint name of assessee and his spouse are also not considered and discussed by the AO. 9) It is prayed that the bank account number 00000010385632164, in State Bank of India, Bhilwara and is in the name of Mr. Sanjay Joshie and Mrs. Rashmi Joshie, this bank account is operated by both husband and wife. This fact is ignored by the AO. 10) During the assessment proceedings the assessee has furnished reply which is also mentioned in the body of the assessment order as under: Cash amount received from sale of Property at Bhilwara 4,00,000 (Sold by Mrs. Rashmi Joshie) Amount Received from sale of CAR 170000 Amount received from sale of Household items 21000 Own old accumulated Cash Savings of wife Rashmi Joshi 359000 (Mrs. Rashmi Joshi is self Employed) The A O has not discussed the reason of not accepting the abovementioned submission in the body of the assessment order. 11) It is humbly prayed to your honour that the spouse of the Assessee has sold the house property in the year 2014-2015. The property was sold for consideration of RS. 40 Lacs out of which the cash of Rs. 4 Lacs was received by the spouse of Assessee, before the execution of the Sale deed in the beginning of month of April 2014. The amount of Rs. 4 Lacs received in cash was deposited by Mrs. Rashmi Joshi in the abovementioned Joint Bank account situated at SBI, Bhilwara. I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 6 12) It is humbly requested that Spouse of Assessee Mrs. Rashmi Joshie W/o Mr. Sanjay Joshie joint holder and owner of the Bank account number 00000010385632164 situated at SBI, Bhilwara, is well educated lady and earns as being self employed. Besides that being Indian lady and as per Indian culture she has habit of saving of money, which she has earned and on every occasion of festivals and her birthdays and anniversaries she had received from her various relatives. Therefore She has sufficient substantial old accumulated savings of so many years, which she had deposited on different dates in the month of April 2014. It is humbly requested to your honour that the nature and the sources of deposits are also explained during the course of assessment proceedings 13) It is humbly requested that the following facts in respect of the Bank account number 00000010385632164 of SBI, Bhilwara, under consideration may kindly be considered: a) Abovesaid Bank statements is in the joint name of Mr. Sanjay Joshie and Mrs. Rashmi Joshi b) The Account is operated by Both Mr. Sanjay Joshie and Mrs. Rashmi Joshi. c) The Sales consideration of the property of Mrs Rashmi Joshie i.e. Cash as well as the Cheque was deposited in the Joint Bank account. d) Rashmi Joshi has deposited her old accumulated savings in the above said Joint account, because Both the assessee and his spouse were shifting from Bhilwara to Mumbai and they had to buy the flat at Mumbai in their joint name. e) The cash deposits in the above bank account are as follows: (i) Part cash payment of property sold By Mrs. Rashmi Joshi Rs. 4,00,000 (ii) Old accumulated savings of Mrs. Rashmi Joshi Rs. 3,59,000 (iii) Old household items sold by Mr. Sanjay Joshi Rs. 21,000 It is humbly requested that the Learned AO has made addition of the abovesaid amount u/s 68 of the Income tax Act 1961, as unexplained cash credit. It is requested humbly that in the matter of Yadwinder Singh Vs. Income tax Officer , the Honourable Income tax appellate tribunal, Amritsar has decided in favour of the Assessee and the extract of the judgement are as follows: "8. Thus, a plain reading of the section establishes that it operates only where books are maintained by an assessee and a sum is found credited therein. 9. Now, in the present case, it remains undisputed that the assessee has not maintained any books during the year. Thus, the provisions of section 68 of the act are not at all attracted and they have been wrongly applied by the authorities below. This position has been duly recognised in Om Prakash Sharma (Supra). No contrary decision has been cited before this bench. 10. In view of the above, the grievance of the assessee by way of the additional grounds taken is justified and accepted as such, Due to such acceptance, since the provisions of Section 68 of the act themselves held to be not aplicable and misapplied, nothing remains to be adjudicated. 11. Accordingly, the order under appeal is reversed. The Addition is cancelled. I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 7 12. In the result, the appeal is allowed." Thus the crux of the abovementioned judgement is as follows: "Section 68 of the Income tax act 1961-Cash credit - As per Section 68, if the assessee offers no explaination of any some found credited in the books of an assessee maintained for any previous year, then section 68 would apply - Assessee had not maintained any books during the year, thus the provisions of section 68 were not at all attracted and they had been wrongly applied by the Authorities below." Therefore it is requested and prayed to your honour, that the assessment and addition made by the AO u/s 68 of the Income tax Act 1961 in the matter of the assesseeis absolutely wrong and the assessment order passed is invalid because the assessee is a salaried employee and does not maintain any books of accounts neither he is liable to maintain any books of accounts, therefore the provisions of section 68 of the Income tax act 1961 does not apply to the assessee. Besides that the assessee had explained all the facts and sources of the deposits in the bank account during the assessment proceedings before AO also. Therefore it is prayed before your honour that all the above details and facts are evident from the documents submitted hereby, therefore kindly consider the request and facts and circumstances and kindly delete the additions made by the Learned AO and allow relief to the assessee. We would be grateful to your honour for your kindness.” 7. Per contra the ld. DR representing the revenue submitted that the order of the ld. CIT(A) is reasoned order out of the addition of Rs. 9,50,000 Rs. 1,70,000/- relief granted by the ld. CIT(A) based on the contentions so raised. The assessee trying to explain the cash deposited in April 2014 for a sale made in May 2014 so ld. DR supported the orders of the lower authority and reiterated the similar contentions as recorded in their in. 8. We have heard the ld. DR and perused the material availableonrecord. The bench noted that the assessee is a salaried Employee and files the ITR regularly for the year under consideration the wife of the assessee Mrs. Rashmi I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 8 Joshie had sold a Property situated at Bhilwara. From the sale of the Property the spouse of the assessee Mrs. Rashmi joshie had received a consideration of Rs. 40 Lacs. Out of the total consideration of the property amounting RS. 40 Lacs. Mrs. Rashmi Joshi had received Rs. 4 Lacs in cash in beginning of April 2014 and Rs. 36 Lacs in cheque. The total consideration of Rs. 40 Lacs (Rs. 4 Lacs in cash and Rs. 36 Lacs in cheque) received by the spouse of the assessee was deposited in the Joint savings Bank account number 00000010385632164, held in the name of Mr. Sanjay Joshie and Mrs. Rashmi Joshi, in SBI, Bhilwara. As it is apparent from the record that the Saving Bank account Number 00000010385632164 of State Bank of India, Bhilwara is jointly held by Mr. Sanjay Joshie and Mrs. Rashmi Joshi, the account is operated by both assessee and his spouse, as it is evident from the bank statements that the sale consideration of Property of Mrs. Rashmi Joshie is also deposited in the same joint account. The ld. AO has not mentioned anywhere in the assessment order regarding to the Bank account number and the joint holders of the abovesaid bank account. The assessee had submitted the reply and facts along with the nature and source of the cash deposit, during the assessment proceedings and even before the ld. CIT(A), but the facts apparent from record are not considered by lower authorities. The assessee has furnished the explanation of cash deposited as under: Cash amount received from sale of property at Bhilwara 4,00,000/- I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 9 (Sold by Mrs. Rashmi Joshie) Amount received from sale of CAR 1,70,000/- Amount received from sale of Household items 21,000/- Own old accumulated cash savings of wife Rashmi Joshi 3,59,000/- (Mrs. Rashmi Joshi is self employed) The spouse of the assessee has sold the house property in the year 2014-2015. The property was sold for consideration of Rs. 40 Lacs out of which the cash of Rs. 4 Lacs was received by the spouse of assessee, before the execution of the Sale deed in the beginning of month of April 2014. The amount of Rs. 4 Lacs received in cash was deposited by Mrs. Rashmi Joshi in the abovementioned Joint Bank account situated at SBI Bhilwara so the source of the said money cannot be added in the hands of the assessee. As regards the saving of Rs. 3,59,000/- by the wife of the assessee wherein the assessee submitted that she is earning leady filing the return of income the money so deposited in the bank account belong to her the wife cannot be added in the hands of the assessee. Since, the information that the cash deposited is related to his wife, these explanations of the assessee who is also self employed and having saving of Rs. 3,59,000/- cannot be denied in the wife of the assessee. Therefore, there is no basis to make the addition in the hands of the assessee. As regards the sale of household items of Rs. 21,000/- there is no finding in the order of the ld. CIT(A) as to why the said amount being small in nature cannot be considered as I.T.A. No.460/Jodh/2018 Shri Sanjay Joshie 10 not taxable in the hands of the assessee. In the light of these facts and considering the explanation of the assessee is Rs. 21,000/- cannot be denied the benefit also the assessee. In the light of the facts and circumstances of the case, the discussion herein above the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 02/.02/2024. Sd/- Sd/- (Rathod Kamlesh Jayantbhai) (DR. S. Seethalakshmi) Accountant Member Judicial Member Santosh (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order