ITO, New Delhi V. Shri Kishan Lal, New Delhi

ITA 4780/DEL/2012

• Counselvise Citation: 478020114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: VED JAIN RANO
• Keywords: Unexplained cash credit; Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. R. S. SYAL, AM AND SH. I. C. SUDHIR, JM ITA NO. 4780/DEL/2012 : ASSTT. YEAR : 2008-09 INCOME-TAX OFFICER, WARD-25(4) NEW DELHI VS SHRI KISHAN LAL, FLAT NO. 509, POCKET GH-2, SECTOR- 28, ROHINI, DELHI-110085 (APPELLANT) (RESPONDENT) PAN NO. ACDPL4034G ASSESSEE BY : SHRI VED JAIN, RANO, CA REVENUE BY : SHRI S. N. BHA TIA, DR DATE OF HEARING : 19.5.2014 DATE OF PRONOUNCEMENT : 20.5.2014 ORDER PER R. S. SYAL, AM: THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 22.6.2012 IN RELATION TO THE ASSESSMENT Y EAR 2008-09. 2. THE FIRST GROUND IS AGAINST THE DELETION OF ADDI TION OF RS. 14,35,430/- MADE BY THE A.O TOWARDS INVESTMENT IN P URCHASE OF PROPERTY. 3. BRIEFLY STATE THE FACTS OF THE CASE ARE THAT THE ASSESSEE FURNISHED HIS RETURN DECLARING INCOME FROM DHABA AND TRADING AN D HANDLOOM CLOTH, APART FROM EARNING INCOME FROM OTHER SOURCES. IT WA S NOTICED BY THE ITA NO. 4780/DEL/2012 KISHAN LAL 2 ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THAT THE ASSESSEE DEPOSITED HUGE CASH IN AXIS BANK LTD. ON V ARIOUS DATES. ON BEING CALLED UPON TO CLARIFY THE POSITION, IT WAS E XPLAINED THAT THE ASSESSEE WAS ENGAGED IN PURCHASE AND SALE OF OLD PR OPERTIES ON BEHALF OF HIS CUSTOMERS FOR COMMISSION, WHICH AMOUNT WAS INCL UDED IN THE TOTAL INCOME. NOT CONVINCED, THE AO TOTALED ALL CASH DE POSITS IN AXIS BANK AMOUNTING TO RS. 12,88,630/- AND A CHEQUE DEPOSIT F OR A SUM OF RS. 1,46,800/-, TOTALING RS. 14,35,430/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED VARIOUS DETAILS AND ALSO A C ASH FLOW STATEMENT IN THIS REGARD WITH A REQUEST TO ADMIT THEM AS ADDITIO NAL EVIDENCE UNDER RULE 46A OF IT RULES 1962. IT WAS EXPLAINED THAT TH E ASSESSEE WAS A PRIMARY EDUCATED PERSON WHO DID NOT HAVE KNOWLEDGE OF LEGAL ISSUES. IT WAS ALSO STATED THAT THE ACCOUNTANT ENGAGED BY HIM KEPT THE BOOKS OF ACCOUNT ETC. WITH HIM BECAUSE HE WAS NOT PAID FEE I N TIME. SINCE THE ASSESSMENT WAS MADE U/S 144 OF THE ACT, THE ASSESSE E REQUESTED FOR THE ADMISSION OF SUCH ADDITIONAL EVIDENCE. THE LD. CIT( A) SENT SUCH ADDITIONAL EVIDENCE TO THE A.O AND REQUIRED HIM TO SUBMIT A REMAND REPORT. THE A.O SENT HIS REMAND REPORT DATED 17.2.2 012 WITHOUT GIVING ANY COMMENTS ON THE ADDITIONAL EVIDENCE. ONCE AGAIN THE LD. CIT(A) REQUESTED THE ASSESSING OFFICER TO SUBMIT A REMAND REPORT ON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THE A.O SENT A SECOND REMAND REPORT VIDE HIS LETTER DATED 10.5.2012. ON CONSIDER ATION OF THE ASSESSEES ITA NO. 4780/DEL/2012 KISHAN LAL 3 SUBMISSIONS AND THE RELEVANT PARTS OF THE REMAND RE PORT IN THIS REGARD, THE LD. CIT(A) ORDERED FOR THE DELETION OF ADDITION . THE REVENUE IS AGGRIEVED AGAINST SUCH DELETION OF ADDITION. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS SEEN THAT THE ASSESSEE CA TEGORICALLY STATED THAT THE CREDIT ENTRIES IN THE AXIS BANK ACCOUNT REFLECT ED THE AMOUNTS RECEIVED FROM VARIOUS PERSONS TO WHOM THE PROPERTIE S WERE SOLD BY HIM AS MEDIATOR EARNING COMMISSIONS FROM SUCH TRANSACTI ONS. IT WAS ALSO STATED THAT THE DEBIT ENTRIES IN THE SAID BANK ACCO UNT TOTALING RS. 13,50,057/- REPRESENTED THE AMOUNTS OF PURCHASE PRI CE HANDED OVER TO THE SELLERS AFTER RETAINING COMMISSION ON SALE PROP ERTIES. THE SAID EXPLANATION GIVEN BY THE ASSESSEE BEFORE THE A.O DU RING REMAND PROCEEDINGS HAS REMANDED UNCONTROVERTED. THE ASSESS ING OFFICER DID NOT CALL FOR ANY FURTHER DETAILS FOR CORROBORATION OF THE STAND TAKEN BY THE ASSESSEE BEFORE HIM. IT CAN BE SEEN THAT THE ASSESS EE DISCLOSED BROKERAGE COMMISSION ON PROPERTY DEALS IN HIS RETURN OF INCOM E AT RS. 41,500/-. THE POSITION WHICH, THEREFORE, EMERGES IS THAT THE ASSESSEE FURNISHED EXPLANATION ABOUT THE DEBITS AND CREDITS IN HIS BAN K ACCOUNT WHICH EXPLANATION HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. NEITHER THE ASSESSEE WAS CALLED UPON TO PRODUCE THE PERSONS FRO M WHOM SUCH CASH WAS RECEIVED OR PAID, NOR THE ASSESSING OFFICER PRO CEEDED AT HIS OWN TO VERIFY THE VERACITY OF THE ASSESSEES EXPLANATION. ONCE AN EXPLANATION ITA NO. 4780/DEL/2012 KISHAN LAL 4 ABOUT THE SOURCE OF A DEPOSIT IS GIVEN, WHICH IS NO T REJECTED BY THE ASSESSING OFFICER WITH SOME COGENT MATERIAL, THEN T HE PRESUMPTION IS THAT SUCH EXPLANATION STOOD ACCEPTED. IT IS NOT OP EN TO THE A.O TO DISCARD SUCH THE EXPLANATION WITHOUT SHOWING ANY IN FIRMITY THEREIN. ADVERTING TO THE FACTS OF THE INSTANT CASE, WE FIN D THAT THE ASSESSEES EXPLANATION ABOUT THE SOURCE OF DEPOSITS IN THE BAN K ACCOUNT HAS NOT BEEN CONTRADICTED BY THE ASSESSING OFFICER, WHO CHO SE TO MAKE ADDITION BY CONSIDERING ONLY THE CREDIT ENTRIES IN THE PASS BOOK TOTALING RS. 14.35 LAKH BY VIRTUALLY IGNORING THAT THERE WERE DEBIT EN TRIES IN THE SAME BANK ACCOUNT REPRESENTING CASH WITHDRAWALS TO THE TUNE O F RS. 13.50 LAKH. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE LD. CIT(A) DOES NOT REQUIRE ANY I NTERFERENCE. THE SAME IS THEREFORE UPHELD. 5. SECOND GROUND IS AGAINST THE DELETION OF ADDITIO N OF RS. 10 LAKH, BEING UNEXPLAINED CREDIT IN THE BANK ACCOUNT. BY CO NSIDERING THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH STATE BANK OF BIKANER AND JAIPUR (SBBJ), IN WHICH THE ASSESSEE HAD DEPOSITED A CHEQUE OF RS. 10 LAKH ON 27.11.2007, THE ASSESSING OFFICER MADE ADD ITION OF THIS SUM. THE LD. CIT(A), ON APPRECIATION OF MATERIAL PLACED BEFORE HIM AND THE REMAND REPORT, ORDERED FOR THE DELETION OF THE ADD ITION. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSE E TENDERED AN ITA NO. 4780/DEL/2012 KISHAN LAL 5 EXPLANATION TO THE EFFECT THAT HE RECEIVED A SUM OF RS. 10 LAKH AGAINST THE TENTATIVE PURCHASE OF PROPERTY FROM SHRI RAM KA RAN GARG, S/O LATE SHRI JOHARIMAL, RESIDENT NO. J-23, RESERVE BANK ENC LAVE, PASCHIM VIHAR, NEW DELHI. THIS AMOUNT WAS RECEIVED BY CHEQUE NO. 6 71150 DATED 27.11.2007 WHICH WAS DEPOSITED BY THE ASSESSEE IN H IS BANK ACCOUNT. SINCE, THE TRANSACTION COULD NOT MATERIALIZE, THE A MOUNT ADVANCED BY SHRI RAM KARAN GARG WAS REFUNDED TO HIM. IN THE REM AND REPORT THE ASSESSING OFFICER SUBMITTED THAT THIS TRANSACTION W AS IN CONTRAVENTION OF THE PROVISIONS OF SEC. 269SS OF THE ACT. BE THAT A S IT MAY, WE ARE CURRENTLY CONCERNED WITH THE ASSESSMENT PROCEEDINGS IN WHICH THE ADDITION WAS MADE TOWARDS UNEXPLAINED DEPOSIT IN TH E BANK ACCOUNT. SINCE, THE ASSESSEE GAVE EXPLANATION ABOUT THE SOUR CE OF DEPOSIT ALONG WITH COMPLETE PARTICULARS OF THE PARTY ISSUING CHEQ UE, IN OUR CONSIDERED OPINION, THERE REMAINS NOTHING WITH THE REVENUE TO MAKE ANY ADDITION ON THIS ACCOUNT, MORE SO, WHEN THE EXPLANATION SO G IVEN BY THE ASSESSEE HAS NOT BEEN FAULTED WITH. WE, THEREFORE, APPROVE T HE VIEW TAKEN BY THE LD. CIT(A) ON THIS ISSUE. THE ADDITION IS DELETED. 7. THE NEXT GROUND IS AGAINST THE DELETION OF ESTIM ATED ADDITION IN RESPECT OF DHABA INCOME. THE FACTS APROPOS THIS GRO UND ARE THAT THE ASSESSEE SHOWED DHABA INCOME AT RS. 68,193/-. THE A SSESSING OFFICER, IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, ESTIMAT ED DHABA INCOME AT RS. 2 LAKH. THE LD. CIT(A) DELETED THE ADDITION OVE R AND ABOVE THE AMOUNT OF INCOME DECLARED BY THE ASSESSEE. ITA NO. 4780/DEL/2012 KISHAN LAL 6 8. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE ASSESSEE FILED HIS RETURN DECLARING INCOME FROM DHABA AT RS. 68,193/- AGAINST THE GROSS RECEIPTS AT RS. 1,60,683/-. A COPY OF INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR IN QUESTION IS AVAILABLE ON RECORD. IT CAN BE SEEN FROM IT THAT THE ASSESSEE INCURRED EXPENSES AMOUNTING TO RS. 92,490/ -. WHEN THE AMOUNT OF GROSS RECEIPT IS NOT DISPUTED AT RS.1.60 LAKH, WE FAIL TO COMPREHEND AS TO HOW AN INCOME OF RS.2.00 LAKH CAN BE ESTIMATED FROM IT. IN OUR CONSIDERED OPINION, THERE IS NO LOGIC I N SUSTAINING THE ESTIMATED INCOME OF RS. 2 LAKH FROM DHABA. WE, THE REFORE, APPROVE THE VIEW TAKEN BY THE LD. CIT(A) IN DIRECTING THE ASSES SING OFFICER TO ACCEPT THE DHABA INCOME OF RS. 68,193/- AS DECLARED BY THE ASSESSEE. THIS GROUND FAILS. 9. THE LAST TWO GROUNDS ARE AGAINST THE CONTRAVENTI ON OF RULE 46A OF IT RULES 1962. AFTER HEARING BOTH THE SIDES WE FIND THAT THERE IS NO ADDITIONAL EVIDENCE ADMITTED BY THE LD. CIT(A) IN C ONTRAVENTION OF THE PROVISION OF RULE 46A. THE ENTIRE ADDITIONAL EVIDEN CE SUBMITTED BY THE ASSESSEE WAS SENT TO THE A.O FOR REMAND REPORT, NO T ONLY ONCE BUT TWICE. THAT BEING THE POSITION, THERE CAN BE NO POINT IN C ONTENDING THAT THERE WAS ANY VIOLATION OF RULE 46A. THESE GROUNDS ARE DI SMISSED. 10. IN THE RESULT, THE APPEAL IS DISMISSED. ITA NO. 4780/DEL/2012 KISHAN LAL 7 ORDER PRONOUNCED IN THE OPEN COURT ON 20/5/2014 . SD/- SD/- (I. C. SUDHIR) (R. S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 20/5 /2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 19.5.2014 PS 2. DRAFT PLACED BEFORE AUTHOR 19.5.2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. *