Sh. Rakesh Malhotra, New Delhi V. ITO, New Delhi

ITA 4785/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1310 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRISITTA SINGEIT
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.4785/DEL/2012 ASSESSMENT YEAR : 2007-08 SHRI RAKESH MALHOTRA, ITO, B-15, GHARONDA APARTMENTS, WARD-35 (4), SHRESHTA VIHAR, NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAWPM AAWPM AAWPM AAWPM- -- -4203 4203 4203 4203- -- -B BB B APPELLANT BY : SHRI R.S. SINGHVI, C.A. RESPONDENT BY : MS. PRISITTA SINGEIT, SR. DR. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A) DATED 31.7.2012. THE GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE C IT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF ` .12 LAKHS AS UNEXPLAINED CASH CREDIT U/A 68 EVEN THROUGH THE ASSESSEE HAS FURNISHED PROPER EXPLANATION I N SUPPORT OF THE SAID CREDIT. 2. THAT FINDING AND CONCLUSION OF THE LOWER AUTHORITIES IS WITHOUT PROPER APPRECIATION OF FACTS AND OPPORTUNITY TO THE ASSESSEE AND AS SUCH WHOLE BASIS OF ADDITION IS ILLEGAL, ARBITRARY AN D MISCONCEIVED. ITA NO4785/DEL/2012 2 3. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTI FIED ON FACTS AND SAME ARE BAD IN LAW. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D HIS RETURN OF INCOME ON 4.2.2008 AND THE CASE WAS SELECTED FOR SCR UTINY THROUGH CASS. VARIOUS NOTICES U/.S 143(2) & 142(1) WERE ISSUED O N VARIOUS DATES. NONE APPEARED ON BEHALF OF ASSESSEE. ON BEING GIV EN FINAL OPPORTUNITY, THE ARS OF THE ASSESSEE APPEARED AND FILED CERTAIN DETAILS AND FINALLY THE DATE WAS FIXED FOR 29.12.2009 BUT NO BODY APPEARED ON 29.12.2009 AND THE ASSESSING OFFICER FINALIZED THE ASSESSME NT PROCEEDINGS U/S 144 ON THE BASIS OF MATERIAL AVAILABLE ON THE FILE. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION THAT HE HAD DEPOSITED CASH AMOUNTING TO ` .24 LAKHS IN HIS BANK ACCOUNT WITH VIJAY BANK ON DIFFERENT DATES DURI NG FINANCIAL YEAR 2006-07. THE ASSESSEE HAD PROVIDED BANK STATEMENT AND A SSESSING OFFICER FOUND THAT THE FIGURE OF ` .24 LAKHS WAS WRONG AND INSTEAD ONLY ` .12 LAKHS WAS DEPOSITED IN THE SAID BANK ACCOUNT. THE ASSESSEE HAD REPLIED INITIALLY THAT HE HAD DEPOSITED THE SAID AMOU NT OUT OF SOURCE DECLARED IN INCOME TAX RETURNS AND HE AND HIS WIFE H AD CAPITAL OF ` .29,47,743/.- & ` . 55,39,807/- RESPECTIVELY. ON FURTHER QUESTIONING T HE ASSESSEE CHANGED HIS STAND AND SUBMITTED THAT HE HAD DEPOSI TED THE CASH AFTER WITHDRAWING FROM HIS JOINT ACCOUNT WITH WI FE AT CORPORATION BANK, NEW DELHI. IN THIS RESPECT HE SUBMITTED THAT H E HAD WITHDRAWN ` .5 LAKHS ON 26.4.2006 AND ` .5 LAKHS ON 29.4.2006 THROUGH SELF CHEQUES THROUGH HIS FRIEND SHRI RAM PARKASH PATHAK AND THE REMAINING AMOUNT OF ` 2 LAKHS WAS RECEIVED BY HIS WIFE OUT OF RECEIVABLES OUTSTANDING IN THE BEGINNING OF YEAR. THE ASSESSING OFFI CER REQUIRED PERSONAL DEPOSITION OF SHRI RAM PARKASH PATHAK. IN TH E MEANTIME, THE ASSESSING OFFICER ENQUIRED FROM THE CORPORATION BANK AB OUT THE WITHDRAWAL OF ` .10 LAKHS THROUGH TWO CHEQUES OF 26.4.2006 AND ITA NO4785/DEL/2012 3 29.4.2006. THE BANK REPLIED THAT AGAINST CHEQUE DAT ED 26.4.2006 CASH WAS WITHDRAWN BY SHRI RAM PARKASH PATHAK AND THE CHEQUE DATED 29.4.2006 WAS ACCOUNT PAYEE CHEQUE AND WAS CREDITED IN THE BANK ACCOUNT OF SHRI RAM PARKASH PATHAK WITH PUNJAB NATIO NAL BANK. THE AR OF THE ASSESSEE FILED AN AFFIDAVIT ON BEHALF OF SHRI RA M PARKASH PATHAK STATING THAT CASH WAS WITHDRAWN FROM PUNJAB NATIONAL B ANK AND WAS HANDED OVER TO THE ASSESSEE. ON 29.12.2009 SHRI RAMPRKA SH PATHAK APPEARED BEFORE THE ASSESSING OFFICER AND ASSESSING OFFICER RECORDED HIS STATEMENT WHEREIN HE WAS CONFRONTED WITH THE AFFID AVIT FILED BY THE ASSESSEE ON HIS BEHALF. AS PER THE ASSESSING OFFICER, THE SAID SHRI RAM PARKASHPATHAK CATEGORICALLY STATED THAT THIS AFFIDAVI T DID NOT BEAR HIS SIGNATURE AND REGARDING CONFIRMATION HE STATED THAT I T WAS SIGNED BY HIM UNDER THE INFLUENCE OF SHRI RAKESH MALHOTRA, THE ASSESSEE. THEREFORE, KEEPING IN VIEW ALL THESE FACTS THE ASSESSING OFFICER REJECTED THE CONTENTION OF ASSESSEE AND MADE ADDITION OF ` .12 LAKHS. 3. DISSATISFIED WITH THE ORDER, THE ASSESSEE FILED APPEAL BEFORE LD CIT(A) AND SUBMITTED THAT DEPOSIT OF ` .12 LAKHS HAD BEEN EXPLAINED TO THE ASSESSING OFFICER AND REITERATED HIS ARGUMENTS BEFOR E THE ASSESSING OFFICER. HE FURTHER ARGUED THAT ASSESSING OFFICER S OBSERVATIONS WITH REGARD TO SOURCE OF SOURCE WERE NOT PERMISSIBLE IN LAW AND RELIANCE WAS PLACED ON THE JUDGMENT OF HON'B LE DELHI HIGH COURT IN THE CASE OF CIT V. DIAMOND PRODUCTS LTD. 177 TAXMAN 331. WITH REGARD TO THE SOURCE OF ` .10 LAKHS IT WAS SUBMITTED THAT THE SAME HAD BEEN WITHDRAWN FROM OTHER BANK OF THE APPELLANT AND WITH REGARD TO THE STATEMENT OF SHRI RAM PARKASH PATHAK IT WAS SUB MITTED THAT FIRST STATEMENT WAS RECORDED ON THE BACK OF APPELLANT AND N O OPPORTUNITY WAS PROVIDED FOR CROSS EXAMINATION. RELIANCE WAS PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KISHA N CHAND CHELLA RAM, 125 ITR 713. IT WAS FURTHER SUBMITTED THAT HE H AD FILED A LETTER ITA NO4785/DEL/2012 4 SIGNED BY SHRI RAM PRKASH PATHAKL ON DATED 4.1.2010 TO CLARIFY HIS STAND. THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSION S DID NOT ACCEPT THE CONTENTIONS AND ARGUMENTS OF ASSESSEE AND UPHE LD THE ADDITION MADE BY THE ASSESSING OFFICER. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THIS TRIB UNAL. 5. AT THE OUTSET, THE LD AR SUBMITTED THAT CONFIRMATI ON WAS OBTAINED FROM SHRI RAM PARTKASH PATHAK AND AFFIDAVIT WAS ALSO OBTAINED FROM HIM. IN THIS RESPECT HE TOOK US TO PAGE 19 OF PAPER BOOK WHEREIN COPIES OF CONFIRMATION AND AFFIDAVIT WERE PL ACED. HE FURTHER ARGUED THAT STATEMENT OF SHRI RAM PARKASH PATHAK WAS R ECORDED ON 29.12.2009 ON THE BACK OF ASSESSEE AND ASSESSMENT ORDER WAS PASSED ON 30.12.2009 AND THEREFORE NO SUFFICIENT OPPORTUNIT Y WAS GIVEN TO ASSESSEE FOR CROSS EXAMINATION OF SHRI RAM PARKASH PATHAK. HE FURTHER TOOK US TO PAGE 25 OF PAPER BOOK WHEREIN A LETTER DA TED 4.1.2010 ADDRESSED TO ITO WAS PLACED WHEREIN SHRI RAM PARKASH P ATHAK HAD REITERATED THAT CONTENTS OF AFFIDAVIT WERE CORRECT A ND ASSESSING OFFICER HAD INFLUENCED HIM TO SIGN THE STATEMENT WHICH WAS IN ENGLISH. 6. THE LD DR, ON THE OTHER HAND, ARGUED THAT NOBODY ATTENDED ON VARIOUS DATES & ON 29.12.2009 AND THEREFORE THE ARGUM ENT OF LD AR THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN IS NOT CORR ECT AS VARIOUS OPPORTUNITIES WERE GIVEN. REGARDING LETTER DATED 4.1 .2010 THE LD DR SUBMITTED THAT THIS LETTER DO NOT CARRY ANY SIGNIFICAN CE AS IT WAS DELIVERED AFTER THE DATE OF ASSESSMENT ORDER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT ASSESSEE HAD BEEN CONTINUOUSLY CHANGING HIS STAND REGARDIN G SOURCE ITA NO4785/DEL/2012 5 OF DEPOSIT OF CASH IN BANK. FIRST OF ALL, HE STATED THA T THE FUNDS WERE OUT OF THEIR CAPITAL ACCOUNT AND THEN HE SUBMITTED THAT ` .10 LAKHS WAS DEPOSITED AFTER WITHDRAWING THROUGH SELF CHEQUES WHICH WAS NOT CORRECT AS ONE OF THE CHEQUES HAPPENED TO BE ACCOUNT PAYEE CHEQUE. THEREAFTER, THE ASSESSEE TOOK A STAND AND FILED AFFIDAVI T OF SHRI RAM PARKASH PATHAK STATING THAT HE HAD WITHDRAWN ` .5 LAKHS FROM HIS BANK ACCOUNT AND HAD GIVEN BACK THE SAME TO THE ASSESSEE. SHR I RAM PARKASH HAD DENIED OF GIVING ANY AFFIDAVIT AND SIMILA RLY HE DENIED OF HAVING SIGNED ANY CONFIRMATION OF HAVING GIVEN BACK THE AMOUNT OF ` .10 LAKHS TO ASSESSEE. MOREOVER, THE INTENTION OF ASSESSEE REGARDING FIRST GIVING CHEQUES TO SHRI RAMPARKASH PATHAK AND T HEN GETTING CASH BACK FROM HIM IS BEYOND HUMAN PROBABILITY. AT THE SAM E TIME, IT IS ALSO CORRECT THAT ASSESSEE DID NOT GET ANY OPPORTUNITY TO CR OSS EXAMINE SHRI RAM PARKASH PATHAK AND COULD NOT EXPLAIN THE PURPOS E OF THESE TRANSACTIONS. MOREOVER, THE ASSESSING OFFICER HAS NOT CONSI DERED THE AMOUNT OF ` .2 LAKHS STATED TO HAVE BEEN RECEIVED BY WIFE OF ASSESSE E. THE ASSESSING OFFICER HAS REJECTED THE CONTENTION OF ASSESSE E REGARDING RECEIPT OF ` .2 LAKHS FROM RECEIVABLES OF HIS WIFE ON THE BASIS THAT NO CONFIRMATION FROM ANY OF THE PERSONS WERE FIL ED WHEREAS ON PAGE 12 OF PAPER BOOK THERE IS COMPLETE DETAIL OF PE RSONS, THEIR ADDRESSES AND PAN NUMBERS FROM WHOM THE PAYMENT AGGREGA TING TO ` .2 LAKHS WERE RECEIVED. IN VIEW OF THE FACT THAT THE RE WERE CONTRADICTORY STATEMENTS BY SHRI RAM PARKASH PATHAK A ND THE FACT THAT THE ASSESSING OFFICER DID NOT EXAMINE THE RECEIPT OF ` .2 LAKHS FROM DIFFERENT PERSONS DESPITE AVAILABILITY OF ADDRESSES, THEI R PAN NUMBERS, IN THE INTEREST OF JUSTICE, IT IS CONSIDERED APPROPRIAT E THAT THE CASE BE SENT BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATIO N. NEEDLESS TO SAY THAT NECESSARY OPPORTUNITY OF BEING HEARD AND FOR CROSS EXAMINATION OF SHRI RAM PARKASH PATHAK WILL BE GIVEN TO THE ASSESSEE. ITA NO4785/DEL/2012 6 8. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH DAY OF JANUARY, 2013. SD/- SD/- (U.B.S. BEDI) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 4.1.2013. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 8.11.2012 DATE OF DICTATION 31.12.2012 DATE OF TYPING 31.12.2012 DATE OF ORDER SIGNED BY 4.1.2013 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 4.1.2013 & SENT TO THE BENCH CONCERNED.