Shri Varun Sharma, Ghaziabad V. ITO, Ghaziabad

ITA 49/DEL/2013

• Counselvise Citation: 4920114 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 02-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 03-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SRINIVAS SENIOR
• Assessee Lawyers: ANIL SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.49/DEL./2013 (ASSESSMENT YEAR : 2007-08) SHRI VARUN SHARMA, VS. ITO, WARD 2 (1), PROP. OF M/S. SHARMA OPTICAL & CONTACT GHAZIABAD. LENS CLINIC, III-M/R-13, NEHRU NAGAR, GHAZIABAD 201 001 (U.P.) (PAN : BAPPS9100R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL SHARMA, ADVOCATE REVENUE BY : SHRI D. SRINIVAS, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (A), GHAZIABAD DATED 29.10.2012 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS AN INDIVIDUAL AND DOING THE BUSI NESS OF OPTICAL AND CONTACT LENS IN THE NAME AND STYLE OF SHARMA OPTICA LS & CONTACT LENS CLINIC. THE ADDITION OF RS.2,40,000/- WAS MADE ON ACCOUNT O F CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE HELD WITH PUNJAB NATIO NAL BANK, AMBEDKAR MARG, GHAZIABAD ON 02.01.2007. THE CIT (A) HAS CON FIRMED THE ADDITION BY HOLDING AS UNDER :- ITA NO.49/DEL./2013 2 AFTER DUE APPLICATION OF MIND, I FIND SEVERE LOOP HOLES IN THIS EXPLANATION. FIRSTLY, INSPITE OF A.O. ASKING A S TO WHAT WERE THESE BUSINESS INTENTIONS, THE APPELLANT HAS REMAIN ED SILENT AND HAS NOT ELABORATED ANY OF THE PURPOSES FOR WHICH CA SH WAS WITHDRAWN. HAD THE EXPLANATION BEEN GENUINE, THE AS SESSEE WOULD HAVE BEEN ABLE TO GIVE SOME CONCRETE INSTANCE S AND EXPLANATIONS. SECONDLY, IT IS NOT CONVINCING THAT O NE CASH WITHDRAWAL WAS FOLLOWED BY ANOTHER AND ANOTHER ALTH OUGH THE PURPOSE WAS NOT GETTING FULFILLED. IN OTHER WORDS, IT IS NOT A CASE OF CASH WITHDRAWAL RE-DEPOSITED AFTER A REASON ABLE AMOUNT OF TIME AND AGAIN WITHDRAWN FOR SOME OTHER PURPOSE. THE APPELLANT HAS WITHDRAWN CASH CHUNKS WITHOUT THEIR B EING ANY INDICATIVE PATTERN OF SOME BUSINESS INTENTION. THIR DLY, THERE IS NO CO-RELATION OF THIS CASH WITHDRAWAL TO THE CASH DEPOSIT IN ONE CHUNK OF RS.2,40,000/- MADE AFTER THREE TO FOUR MONTHS OF THIS CASH WITHDRAWAL. FOURTHLY, THE CASH WITHDRAWAL FOR HOUSE HOLD EXPENSES BEING CLAIMED BY THE ASSESSEE IS VERY INADEQUATE AND HENCE THERE IS ALWAYS A STRONG LIKELIHOOD THAT THE CASH WITHDRAWALS WERE REQUIRED FOR HOUSE HOLD AND PERSON AL EXPENSES, AND, THUS, NOT LEAVING ANYTHING FOR REDEP OSIT. . THE ANOMALIES POINTED OUT BY THE A,O. ON PAGE 3 OF THE ASSESSMENT ORDER ARE ALSO RELEVANT AND VALID. IN VIEW OF THE ABOVE, I AGREE WITH THE A.O.S VIEW THAT CASH CREDIT OF RS.2,40,000/- IS NOT OUT OF CASH WIT HDRAWAL AND OUT OF CURRENT YEARS INCOME IS UPHELD. THE ADDITI ON OF RS.2,40,000/- IS, THEREFORE, CONFIRMED. 3. NOW, THE ASSESSEE IS IN APPEAL BY TAKING THE FOL LOWING GROUNDS OF APPEAL :- 1. THAT THE LD. CIT (A) ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.2,40,000/- ON THE BAS IS OF SURMISES AND CONJECTURES. ITA NO.49/DEL./2013 3 2. THAT THE LD. CIT (A) ERRED ON FACTS AND IN LAW I N IGNORING THAT THE AMOUNT OF RS.2,40,000/- ADDED U/S 68 OF I.T. ACT WAS A CASH DEPOSIT IN THE BANK ACCOUNT OF THE A PPELLANT AND WAS FULLY EXPLAINABLE FROM EARLIER WITHDRAWALS AND CURRENT INCOME. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED IN HOLDING THE WITHDRAWAL S FOR HOUSEHOLD EXPENSES TO BE VERY INADEQUATE ON THE BAS IS OF ASSUMPTIONS AND PRESUMPTIONS. 4. ANY OTHER GROUNDS 4. THE LD. AR FOR THE ASSESSEE HAS PLEADED THAT THE RE WAS A CASH WITHDRAWAL IMMEDIATE PRIOR TO THIS DEPOSIT ON FOUR OCCASIONS AND THE DETAILS OF WHICH ARE AS UNDER :- DATE OF WITHDRAWAL AMOUNT OF WITHDRAWAL 29.07.2006 RS.45,000/- 02.08.2006 RS.45,000/- 21.08.2006 RS.40,000/- 19.09.2006 RS.32,000/- TOTAL : RS.1,62,000/- THE LD. AR ALSO SUBMITTED THAT THIS AMOUNT WAS WITH DRAWALS FOR BUSINESS PURPOSES BUT THE SAME WAS LATER ON DEPOSITED WITH T HE BANK ACCOUNT OF THE ASSESSEE. THE CIT (A) WAS NOT JUSTIFIED IN CONFIRM ING THE ADDITION WHEN THE REVENUE HAS FAILED TO GIVE ANY FINDINGS WITH REGARD TO THE USE OF THE CASH WITHDRAWAL FOR ANY OTHER PURPOSE. HE ALSO RELIED O N THE DECISION OF ITAT, ITA NO.49/DEL./2013 4 DELHI BENCH C, NEW DELHI IN THE CASE OF ITO VS. I SHWAR SINGH VATS IN ITA NO.96/DEL/2012 DATED 08.02.2013 WHEREIN THE ITAT HA S DELETED THE ADDITION BY HOLDING THAT ASSESSING OFFICER DID NOT BRING OUT ANYTHING ON RECORD TO SUBSTANTIATE THAT ASSESSEE HAS USED THIS MONEY ANYW HERE ELSE. HE ALSO RELIED ON THE DECISION OF ITAT, DELHI BENCH E, NEW DELHI IN THE CASE OF DCIT VS. MANISH AGGARWAL IN ITA NO.3301/DEL/2012 DATED 13.12 .2013. HE ALSO PLEADED THAT CIT (A)S OBSERVATION FOR WITHDRAWAL O F HOUSEHOLD EXPENSES WAS ALSO NOT BASED ON ANY EVIDENCE IT IS ONLY A SURMISE . HE PLEADED TO SET ASIDE THE SAME. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F THE AUTHORITIES BELOW AND STATED THAT ASSESSEE IS NOT ABLE TO STATE IN CL EAR TERMS REGARDING THE PURPOSE FOR WHICH THE CASH BALANCE WAS WITHDRAWN. HE ALSO SUBMITTED THAT PATTERN OF WITHDRAWAL DOES NOT JUSTIFY THE ASSESSEE S CLAIM FOR THE PURPOSE OF WITHDRAWAL. HE RELIED ON THE ORDERS OF THE AUTHORI TIES BELOW. 6. WE HAVE HEARD BOTH THE SIDES. THE CIT (A)S FIN DING REGARDING INADEQUATE WITHDRAWAL FOR THE HOUSEHOLD EXPENSES IS NOT BASED ON ANY EVIDENCE. THERE IS NO ADDITION MADE FOR LOW HOUSEH OLD EXPENSES. WE HOLD THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT CASH WITHDRAWN IN THE IMMEDIATE PRECEDING FEW MONTH S HAS BEEN UTILIZED BY THE ASSESSEE SOMEWHERE ELSE FOR ANY OTHER PURPOSE. IN THE ABSENCE OF THE SAME, WE HOLD THAT THE ASSESSEE WAS ABLE TO EXPLAIN THE SOURCE OF THE CASH ITA NO.49/DEL./2013 5 DEPOSIT UP TO RS.1,62,000. HOWEVER, FOR REMAINING AMOUNT, THE RELIANCE ON THE RETURN OF INCOME TO EXPLAIN THE SOURCE OF CASH IS NOT CONVINCING. THEREFORE, WE HOLD THAT OUT OF THE ADDITION OF RS.2 ,40,000/-, THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE OF RS.1,62,000/- AND THE BALANCE AMOUNT, I.E. RS.78,000/- IS HELD TO BE UNEXPLAINED. ACCORDINGLY , WE UPHOLD THE ADDITION UP TO RS.78,000/-. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF APRIL, 2014. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 11 TH DAY OF APRIL, 2014 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), GHAZIABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.