ITO, New Delhi V. Shri Hukum Singh Gautam, New Delhi

ITA 4780/DEL/2011

• Counselvise Citation: 478020114 RSA 2011
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-03-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 02-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y K KAKKAR
• Assessee Lawyers: G R AGNIHOTRI
• Keywords: Unexplained cash credit
• Section: 142(1); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C DELHI) BEFORE SHRI S.V. MEHROTRA AND SHRI A.D. JAIN ITA NO. 4780(DEL)2011 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER, SHRI HUKUM SINGH GAUTAM, WARD 43(1), NEW DELHI. V. PANCHSHEEL BHAW AN, HOUSE NO.5 B, STREET NO.8A, BANK COLONY, MANDOLI, NAND NAGRI, DELHI-110093. (APPELLANT) (RESPONDENT) APPELLANT BY: MS. Y.,K. KAKKAR, SR. DR RESPONDENT BY: SHRI G.R. AGNIHOTRI , ADVOCATE ORDER PER A.D. JAIN, J.M . THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2008-09 AGAINST THE ORDER DATED 18.08.2011 PASSED BY THE COMMISSIO NER OF INCOME TAX(APPEALS)XXX, NEW DELHI, CONTENDING THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 11,59,799/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS WITHOUT CONSIDERING THE FACT THAT THESE CASH DEPOSI TS WERE MADE IN THE BANK ACCOUNT OF THE ASSESSEE, WHO FAILED TO EXPLAIN THE SOURCE THEREOF, DESPITE SUFFICIENT OPPORTUNITY PROVIDED BY THE AO. ITA 4780(DEL)2011 2 2. THE FACTS ARE THAT THE ASSESSEE WAS ASSISTANT MA NAGER, UNION BANK OF INDIA, PANCHSHEEL BHAWAN, NAGAR NIGAM, GHAZIABAD, T ILL HE WAS PROMOTED AS BRANCH MANAGER, UNION BANK OF INDIA, SHAMLI, DI STRICT MUZAFFARNAGAR, U.P. ON 1.12.2010. THE ASSESSEE FILED THE INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION ON 22.7.2008, DEPICTING THE SAL ARY INCOME OF ` 2,36,303/-. FROM AIR INFORMATION RECEIVED, IT CAM E TO THE NOTICE OF THE AO THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF ` 11,59,779/- IN UNION BANK OF INDIA, GANDHI NAGAR NIGAM NAVYUG MARKET, GHAZIABAD (UP) DURING THE YEAR UNDER CONSIDERATION. THE AO QUERIED THE ASSE SSEE VIDE NOTICE U/S 143(2) OF THE I.T. ACT, REQUIRING HIM TO FURNISH EX PLANATION AND EVIDENCE IN SUPPORT OF THE CASH DEPOSIT IN SAVINGS BANK ACCOUNT NO. 555202010509375, IN THE NAME OF THE SOCIAL ORGANIZ ATION KNOWN AS ALL INDIA BACKWARD (SC, ST, OBC) AND MINORITY COMMUNITI ES EMPLOYEES FEDERATION (BRIEFLY KNOWN AS BAMCEF). 3. THE ASSESSEE CONTENDED BEFORE THE AO THAT THE CA SH OF ` 11,59,779/- HAD BEEN RECEIVED FROM VARIOUS STATE UNITS OF BAMCE F AND THE SAME HAD BEEN DEPOSITED IN THE BANK ACCOUNT OF BAMCEF; THAT BAMCEF WAS A SOCIAL ORGANIZATION REGISTERED UNDER THE SOCIETIES REGISTRATION ACT XXI OF 1860, NEW DELHI ON 25.6.1987; THAT HE (THE ASSESSE E) WAS THE NATIONAL TREASURER OF BAMCEF, HAVING OWN PAN, HAD NOT FILED THE RETURN OF INCOME ITA 4780(DEL)2011 3 AND NO CERTIFICATE UNDER SECTIONS 10(23 C)/12A/80G OF THE I.T. ACT HAD BEEN ISSUED TO BAMCEF; THAT THERE WERE THREE OR MORE EMP LOYEES OF THE SAME ORGANIZATIONS, DOING THE SAME ACTIVITIES ON THE SAM E REGISTRATION NUMBER, I.E., REGISTRATION NO. S 17809, HAVING THEIR SEPAR ATE CENTRAL OFFICES AT DIFFERENT PLACES IN DELHI UNDER SEPARATE EXECUTIVE COMMITTEES. 4. VIDE ASSESSMENT ORDER DATED 6.12.2010, THE AO HE LD THAT THE CASH DEPOSITS OF ` 11,59,799/- REMAINED UNEXPLAINED AND ADDED THIS AMO UNT TO THE RETURNED INCOME OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSITS FROM UNDISCLOSED SOURCES. WHILE DOING SO, IT WAS OBSER VED, INTER ALIA, THAT IN RESPONSE TO SUMMONS ISSUED U/S 131 OF THE ACT, THE BRANCH MANAGER, UNION BANK OF INDIA, NAGAR NIGAM BRANCH, GHAZIABAD, VIDE LETTER DATED 1.11.2010, HAD FURNISHED CERTIFIED COPIES OF CERTAIN CORRESPON DENCE LETTERS BETWEEN THE BANK AUTHORITIES, HAVING RELEVANCE TO THE CASE OF T HE ASSESSEE; THAT THESE CORRESPONDENCE LETTERS COMPRISED LETTER DATED 2.3. 2010 FROM UNION BANK OF INDIA, NAGAR NIGAM BRANCH, GHAZIABAD, TO THE SR. MA NAGER(P) REGIONAL OFFICE, MEERUT, LETTER DATED 10.6.2010 FROM THE REG IONAL OFFICE OF THE BANK, MEERUT, TO THE ASSESSEE AND LETTER DATED 25.06.2010 FROM NAGAR NIGAM BRANCH, GHAZIABAD TO SR. MANAGER(P) REGIONAL OFFICE , MEERUT; THAT IN THE LETTER DATED 2.03.2010, GHAZIABAD BRANCH OF THE BAN K HAD INFORMED THE SR. MANAGER OF THE REGIONAL OFFICE OF THE BANK AT MEERU T, THAT THE ASSESSEE HAD ITA 4780(DEL)2011 4 VISITED THE GHAZIABAD BRANCH OF THE BANK ON 8.2.201 0 AND HAD REQUESTED TO SEE THE DOCUMENTS OF SB ACCOUNT NO. 555202010509375 , FOR WHICH ACCOUNT, HE WAS THE AUTHORIZED SIGNATORY AND AFTER WAITING FOR A FEW MONTHS, ON THE PRETEXT OF GETTING PHOTO COPIES HE H AD TAKEN ALL THE ORIGINAL DOCUMENTS RELATING TO THE SAID ACCOUNT AND HAD NOT RETURNED THEM; THAT VIDE LETTER DATED 10.6.2010, THE MEERUT REGIONAL OFFICE OF THE BANK HAD WRITTEN TO THE ASSESSEE IN THIS REGARD THAT THE SAID ACT OF THE ASSESSEE HAS BEEN TAKEN SERIOUSLY BY THE D.G.M. OF THE BANK AND IN CASE THE ASSESSEE DID NOT RETURN THE ORIGINAL DOCUMENTS WITHIN 3 DAYS, THE MATTER WO ULD BE REPORTED TO IR SECTION C.O., BOMBAY AND FGMO, DELHI FOR TAKING STR ICT ACTION AGAINST HIM; THAT COPIES OF THIS LETTER WERE FORWARDED TO THE CH IEF MANAGER, SERVICE BRANCH, DELHI OF THE BANK WITH SERVICE REQUEST AND TO THE BRANCH MANAGER, NAGAR NIGAM BRANCH, GHAZIABAD, ASKING HIM TO CONFIR M THAT THE DOCUMENTS HAD BEEN RECEIVED BY HIM (THE BRANCH MANAGER) AND H E HAD ALSO TAKEN THE SAME IN WRITING FROM THE ASSESSEE; THAT VIDE LETTE R DATED 25.6.2010, THE GHAZIABAD BRANCH OF THE BANK HAD WRITTEN TO THE SR. MANAGER(P) OF THE MEERUT REGIONAL OFFICE BANK, STATING THAT THE ASSES SEE HAD NEITHER VISITED THE BRANCH, NOR HAD RETURNED THE ORIGINAL DOCUMENTS PERTAINING TO THE ACCOUNT NO. 555202010509375, I.E., 25.6.2010; THAT FROM THIS EVIDENCE, IT WAS CLEAR THAT THE COPY OF ACCOUNT OPENING FORM FUR NISHED BY THE ASSESSEE ITA 4780(DEL)2011 5 BEFORE THE AO WAS A FABRICATED DOCUMENT, MADE BY TH E ASSESSEE FOR MOTIVATED PURPOSES; THAT A NOTICE U/S 142(1) OF THE ACT WAS ISSUED ON 10.11.2010 TO THE ASSESSEE, REQUIRING HIM TO EXPLAI N AND JUSTIFY HIS AFORESAID ACTION WITH EVIDENCE; AND THAT HOWEVER, THE ASSESSE E DID NOT FURNISH ANY EXPLANATION OR JUSTIFICATION. 5. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO. AGGRIEVED THEREBY, THE DEPARTMENT IS IN APPEAL. 6. BEFORE US, THE LD. DR HAS CONTENDED THAT WHILE W RONGLY DELETING THE ADDITION CORRECTLY MADE BY THE AO, THE LD. CIT(A) H AS FAILED TO TAKE INTO CONSIDERATION THE FACT THAT IT STANDS ESTABLISHED O N RECORD THAT THE ASSESSEE HAD OPENED A FICTITIOUS BANK ACCOUNT IN THE NAME OF BAMCEF IN UNION BANK OF INDIA, NAGAR NIGAM BRANCH, GHAZIABAD, USING HIS PERSONAL PAN IN THE ACCOUNT OPENING FORM SHOWING HIMSELF AS THE FIR ST APPLICANT IN THE ACCOUNT OPENING FORM, GIVING HIS OWN RESIDENTIAL AD DRESS, RESIDENTIAL TELEPHONE NUMBER AND PERSONAL MOBILE NUMBER THEREIN ; THAT THE ASSESSEE HAD OPERATED THE SAID ACCOUNT SINGLE-HANDEDLY, MAKING C ASH DEPOSITS AMOUNTING TO ` 11,59,779/- IN THE SAID ACCOUNT; THAT IN THE ASSESS MENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED FABRICATED DOCUMENTS AND HAD MISREPRESENTED THE TRUE FACTS, IN THE SAME BREATH HIMSELF ADMITTING THAT TH E NAME OF BAMCEF HAD BEEN USED BY MANY PERSONS IN DELHI; THAT THE ASSESS EE HAD NOT BEEN ABLE TO ITA 4780(DEL)2011 6 FURNISH ANY EVIDENCE THAT THE CASH DEPOSITS IN FAC T BELONGED TO BAMCEF; THAT THE ASSESSEE HAD ACTUALLY, ACTED JUST LIKE A S OLE PROPRIETOR OF BAMCEF; AND THAT AS SUCH, THE AO CORRECTLY CONCLUDED THAT T HE CASH DEPOSITS WERE MADE IN THE BANK ACCOUNT OF THE ASSESSEE HIMSELF AN D THE ASSESSEE FAILED TO EXPLAIN THE SOURCE THEREOF DESPITE ADEQUATE OPPORTU NITY PROVIDED TO DO SO. 7. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS STRONGLY SUPPORTED THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT BAMCEF WAS A SOCIAL ORGANIZATION, DULY REGISTERED UNDER THE REGI STRATION OF SOCIETIES ACT, 1860; THAT AS PER THE CONSTITUTION OF BAMCEF, ITS R EGIONAL TREASURER OR REPRESENTATIVES COLLECTED MONEY FOR CARRYING OUT IT S OBJECTIVES; THAT THE COLLECTIONS SO MADE WERE HANDED OVER TO THE NATIONA L TREASURER WHICH POST WAS MEANT BY THE ASSESSEE; THAT THE NATIONAL TREASU RER DEPOSITED THE COLLECTIONS IN THE BANK ACCOUNT OF BAMCEF; THAT THE BANK ACCOUNT OF BAMCEF WAS A SEPARATE AND INDEPENDENT BANK ACCOUNT; THAT SINCE BAMCEF DID NOT HAVE ANY PAN, AS ITS NATIONAL TREASU RER, THE ASSESSEE HAD USED ITS PAN FOR THE PURPOSE OF OPENING THE BANK AC COUNT; THAT THE ASSESSEE HAD RECEIVED COLLECTIONS FROM REGIONAL TREASURER OR REPRESENTATIVES OF THE ASSESSEE, AMOUNTING TO ` TWO LAKHS, ` FOUR LAKHS, ` THREE LAKHS AND ` 2,59,779/- IN CASH ON 8 TH , 9 TH , 10 TH AND 11 TH JANUARY, 2008; THAT THE ASSESSEE WAS ASSISTANT BRANCH MANAGER, UNION BANK OF INDIA, NAGAR NIGAM BRANCH, ITA 4780(DEL)2011 7 GHAZIABAD; THAT HE HAD DEPOSITED THE SAID COLLECTIO NS ON THE SAID DATE IN SAVINGS BANK ACCOUNT NO. 555202010509375 OF BAMCEF; THAT LATER, THESE COLLECTIONS HAD BEEN TRANSFERRED TO THE SAVINGS BAN K ACCOUNT NO.357102010050498 OF BAMCEF, IN UNION BANK OF INDI A, PAHARGANJ, NEW DELHI; THAT THE COPIES OF THE RELEVANT BANK STA TEMENT HAD BEEN PRODUCED BEFORE THE AO, SHOWING THAT THE COLLECTIONS HAD R ESPECTIVELY BEEN TRANSFERRED BY MEANS OF ACCOUNT PAYEE CHEQUE NOS. 8 541 TO 8544; THAT THUS THE SMALL INTEREST INCOME OF ` 2,625/- HAD ALSO BEEN TRANSFERRED TO BAMCEF BY MEANS OF ACCOUNT PAYEE CHEQUE NO. 8545 DATED 15. 5.08; THAT EVEN THE INITIAL COLLECTIONS HAVE BEEN MADE IN THE NAME OF B AMCEF; THAT THE ASSESSEE DID NOT HAVE ANY INTEREST WHATSOEVER IN TH E COLLECTIONS AND THESE COLLECTIONS HAD BEEN TRANSFERRED IMMEDIATELY TO THE OFFICE OF BAMCEF, TO THE LAST RUPEE; THAT THE COLLECTIONS HAD BEEN ACC OUNTED FOR TO THE ASSESSEES HEAD QUARTERS OF BAMCEF; AND THAT THE AO HAD WRONGL Y ASSUMED THAT THE COLLECTIONS BELONGED TO THE ASSESSEE RATHER THAN TO THE BAMCEF. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS DULY TAKEN INTO CONSIDERATION THE BANK ACCOUNTS, THE CON STITUTION, THE CENTRAL COMMITTEE AND THE BALANCE SHEET OF BAMCEF WHILE RIG HTLY DELETING THE ADDITION WRONGLY MADE. ITA 4780(DEL)2011 8 8. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. THERE IS NO DISPUTE TO THE FACT THAT THE BANK ACCO UNT IN WHICH THE DEPOSITS WERE INITIALLY MADE, BELONGED TO BAMCEF. IT ALSO R EMAINS UNCHALLENGED THAT THE TOTAL AMOUNT OF DEPOSITS, I.E., THE SUM OF ` 11,59,779/- WAS REMITTED TO THE BANK ACCOUNT OF BAMCEFS HEAD OFFICE IN DELH I. THE COLLECTIONS WERE NEVER IN THE PERSONAL ACCOUNT OF THE ASSESSEE AND SO, THEY CANNOT BE SAID TO HAVE BEEN CREDITED IN THE PERSONAL BANK ACC OUNT OF THE ASSESSEE, AS RIGHTLY OBSERVED BY THE CIT(A). THAT BEING SO, TH IS AMOUNT COULD NOT AT ALL BE CONSIDERED TO BE THE UNDISCLOSED INCOME OF THE A SSESSEE. ACCORDINGLY, THE PROVISIONS OF SECTION 68 OF THE ACT ARE NOT ATT RACTED AND WERE WRONGLY APPLIED BY THE AO. IT STANDS ESTABLISHED ON RECORD THAT THE COLLECTIONS WERE REMITTED TO BAMCEFS HEAD OFFICE BY WAY OF ACCOUNT PAYEE CHEQUE NOS. 8542 FOR ` FOUR LAKHS, 8543 FOR ` THREE LAKHS, 8544 FOR ` 2,59,779/- AND 8541 FOR ` TWO LAKHS, RESPECTIVELY, ON 17.4.2008 BY BAMCEF. GH AZIABAD. THE BANK INTEREST OF ` 2,625/- FROM THE SAID SAVING BANK ACCOUNT HAD ALSO BEEN REMITTED TO THE HEAD OFFICE . THE CENTRAL OFFICE OF BAMCEF HAD AN OPENING CREDIT BALANCE OF ` 6,66,706.55 IN ITS BANK ACCOUNT ON 17.4.08, BESIDES A REMITTANCE OF ` 11,59,779/- FROM ITS GHAZIABAD BRANCH BY WAY OF ACCOUNT PAYEE CHEQUE ON 17.4.08. ITA 4780(DEL)2011 9 9. IN THESE UNDISPUTED FACTS AND CIRCUMSTANCES, FIN DING NO ERROR WHATSOEVER IN THE ORDER OF THE LD. CIT(A), WE HEREB Y CONFIRM THE SAME, REJECTING THE GROUND OF APPEAL RAISED BY THE DEPART MENT. 10. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.2012. SD/- SD/- (S.V. MEHROTRA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23.03.2012 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER ASSISTANT REGISTRAR