The ITO, 3(1), Indore V. SHRI VIKUL SHARMA, Indore

ITA 499/IND/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1951 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 17-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KUMAR YADAV
• Assessee Lawyers: P D NAGAR
• Keywords: Income from undisclosed sources; Salary income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 499 /IND/201 4 A.Y. : 2010-11 ITO, SHRI VIKUL SHARMA, 3(1), VS. INDORE. INDORE APPELLANT RESPONDENT PAN NO.ACXPS4821Q APPELLANTS BY : SHRI RAM KUMAR YADAV, DR RESPONDENT BY : SHRI P.D.NAGAR, C.A. O R D E R PER D. T. GARASIA, J.M. THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE, DATED 25.04.2014, FOR THE ASSESSM ENT YEAR 2010-11. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- DATE OF HEARING : 26. 10.2015. DATE OF PRONOUNCEMENT : 3 0 .1 1 .2015 ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 2 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ID. CIT(A) :- (I) HAS DELETED ADDITION OF RS. 35,21,500/- MADE B Y THE AO ON ACCOUNT OF CASH DEPOSIT IN THE ASSESSEE'S BAN K A/C. THE CIT(A) HAS DELETED THE ADDITION WITH THE FINDING THAT FOR A.Y. 2008-09, THE ASSESSEE HAD SHO WN RECEIPT FROM SALE OF SHARES AT RS. 48,12,907/- AND HAD OFFERED THE SAME TO TAX. THAT, OUT OF THE SAID DEPO SIT, THE ASSESSEE WITHDREW THE CASH FOR PURCHASE OF CERTAIN LAND, AND SINCE THE DEAL WAS NOT MATERIALIZ ED, RE-DEPOSITED THE CASH IN BANK. THE DELETION MADE BY THE CIT(A) IS ERRONEOUS TO THE EXTENT OF RS. 30,21, 500/- SINCE THE THEORY PUT FORTH BY THE ASSESSEE AND ACCEPTED BY THE LEARNED CIT(A), IS NOTHING BUT AN AFTER-THOUGHT. (II) ERRED IN DELETING ADDITION OF RS. 30,21,500/- WITHOUT APPRECIATING THE FACT THAT IN THE COURSE OF ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 3 3 ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PRODUCE PROOF OF DEPOSITING AND WITHDRAWING CASH TO / FROM BANK. (III) ERRED IN DELETING THE ADDITION OF RS. 30,21 ,500/- WITHOUT CONSIDERING THAT THE ASSESSEE'S CONTENTION- THAT HE HAD WITHDRAWN CASH FROM BANK BETWEEN JULY 2007 TO SEPTEMBER2008, AND DEPOSITED THE SAME IN BANK DURING THE YEAR UNDER CONSIDERATION - IS NOT RELIABLE, BEING IN CONTRADICTION TO NORMAL & REASON ABLE BEHAVIOR; MORE SO FOR THE FACT THAT THE ASSESSEE IS AN ACCOUNTANT BY PROFESSION, AND IT WAS NOT PRUDENT FO R HIM TO KEEP SUCH A LARGE CHUNK OF CASH IN HAND FOR SUCH A LONG PERIOD, ON WHICH HE COULD HAVE EASILY EARNED A HANDSOME AMOUNT OF INTEREST. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D ERIVES INCOME FROM SALARY FROM M/S. VISHAL RETAIL LIMITED, DELHI UP TO AUGUST, 2008 SINCE 2004-05. HE SHIFTED IN INDORE AN D JOINED RUCHI GROUP OF COMPANIES UP TO MAY, 2010. THEREAFTE R, HE ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 4 4 JOINED JBM GROUP. GURGAON AND DERIVED SALARY TILL D ATE. RETURN OF INCOME WAS SUBMITTED DECLARING TOTAL INCOME OF R S. 1,58,934/-. DURING THE YEAR, THE ASSESSEE HAD DEPOS ITED A SUM OF RS. 30,21,500/- IN CASH IN SAVINGS BANK ACCOUNT WITH AXIS BANK, Y. N. ROAD, INDORE. THE EXPLANATION RELATING TO SUCH DEPOSIT WAS PROPERLY COMMUNICATED TO THE COUNSEL OF THE ASSESSEE BECAUSE THE ASSESSEE WAS RESIDING AT DELHI . AS THE AO WAS NOT CONVINCED WITH THE EXPLANATION, ENTIRE AMOU NT DEPOSITED IN BANK ON DIFFERENT DATES DURING THE YEA R HAS BEEN ASSESSED TO TAX AS INCOME FROM UNDISCLOSED SOURCES. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERV ING AS UNDER :- 5. GROUND NO. 1 & 2 IS AGAINST ADDITION OF RS. 35,21,500/ - ADDED IN HANDS OF APPELLANT U/S 68 OF THE INCOME TAX ACT, FOR THE CASH DEPOSITS FOUND IN APPELLANT'S BANK ACCOUNT. THE AO ADDED THIS AMOUNT ONLY ON THE GROUND THAT ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 5 5 WITHDRAWAL OF CASH WAS MADE IN DELHI AND HOW IT WAS TAKEN TO INDORE AND KEPT IN HOUSE. 6. APPELLANT HAS SUBMITTED HIS COPY OF RETURN AND ASSESSMENT ORDER FOR AY 2008-09, WHICH SHOWS THAT APPELLANT HAS SHOWN RECEIPT FROM SALE OF SHARES OF RS. 48,12,907/ - ON WHICH HE OFFERED A SHORT TERM CAPITAL GAIN OF RS. 31,02,727/- WHICH WAS DULY ACCEPTED BY AO AS SUCH IN AY 2008-09. FROM THIS DEPOSIT OF RS. 48,12,907/- IN HIS BANK ACCOUNT ON 09.07.2007, APPELLANT WITHDREW CASH OF RS. 29,92,000/- BETWEEN JULY' 2007 TO SEPTEMBER' 2008 AND PAID THE SAME AS AN ADVANCE OF RS. 30,79,000/- BETWEEN THE SAME PERIOD, FOR PURCHASE OF A LAND FROM SHRI. KAMAL GIRI. SINCE THE DEAL DID NOT MATERIALIZE BECAUSE APPELLANT COULD NOT PAY BALANCE AMOUNT OF DEAL, HENCE DEAL WAS CANCELLED AND AMOUNT WAS RETURNED BACK IN CASH BY THAT PARTY TO APPELLANT IN JUNE' ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 6 6 2009 TO JULY' 2009 AND SUCH AMOUNT WAS DEPOSITED IN APPELLANT'S BANK ACCOUNT. WHEN SOURCE OF SUCH CASH DEPOSIT WAS DULY EXPLAINED BY APPELLANT, THERE WAS NO BASIS FOR THE AO TO MAKE ADDITION OF SUCH AMOUNT U/ S 68 ONLY ON THE PROCEDURAL ISSUE AS TO HOW AMOUNT WITHDRAWN IN CASH FROM DELHI WAS TRANSFERRED TO INDORE OR WHERE IT WAS KEPT WHEN SUCH ISSUES ARE RESPONSIBILITY OF APPELLANT AND THEY HAVE NO BEARING FOR ADDITION IX] S 68 OF THE INCOME TAX ACT. BESIDES THERE IS A REVERSAL OF ENTRY OF RS. 5 LAKHS. HENCE EFFECTIVE AMOUNT OF DEPOSIT OF CASH IS RS. 30,21,500/ -. APPELLANT HAS SUCCESSFULLY EXPLAINED CASH WITHDRAWALS OF RS. 29,92,000/- WHICH WAS WITHDRAWN FROM BANK OUT OF DEPOSIT OF SALE CONSIDERATION OF SHARES, WHICH IS OFFERED FOR TAXATION. HENCE OUT OF CASH DEPOSIT OF RS. 30,21,500/-, APPELLANT DULY EXPLAINED AMOUNT OF RS. 29,92,000/- AND ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 7 7 THE BALANCE ADDITION OF RS. 29,500/- IS SUSTAINED U/S 68 OF THE INCOME TAX ACT. AS A RESULT WHILE GROUND NO. 1 OF APPEAL IS PARTLY ALLOWED, GROUND NO. 2 OF APPEAL IS ALLOWED. 5. THE LD. DR RELIED ON THE ORDER OF THE AO. 6. THE LD. AUTHORIZED REPRESENTATIVE RELIED ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. THE ASSESSEE DERIVES THE INCOME FROM SALARY AS ASSI STANT ACCOUNTANT WITH M/S. VISHAL MEGA MART TILL AUGUST 2 008 AT DELHI. THE ASSESSEE HAS PURCHASED SHARES OF VISHAL MEGA MART AND HE HAS PURCHASED THESE SHARES FORM HIS OWN SAVI NGS. THE TOTAL SHARES WERE ALLOTTED AT 6,334 ON 06.06.2007. THEREAFTER, THE MARKET WENT UP AND THE ASSESSEE HAS SOLD THESE SHARES IN ASSESSMENT YEAR 2008-09AT RS. 48,12,907/- AND EARNE D THE CAPITAL GAINS OF RS. 31,02,727/- AND HE HAS DECLARE D THIS AMOUNT IN HIS RETURN OF INCOME. THE ASSESSEE IS ALS O HAVING LAND AND ASSESSEE HAS OUT OF SALE PROCEEDS RECEIVED RS. 48 LAKHS AND SOME AMOUNT WAS ADVANCED FOR PURCHASE OF ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 8 8 AGRICULTURAL LAND AS PER AGREEMENT DATED 13.07.2007. THEREFORE, THE AMOUNT WAS WITHDRAWN FROM DELHI AND THE SAME WA S BROUGHT TO INDORE AND RS. 70,00,000/-. THE AGREEMEN T OF THE ASSESSEE WAS CANCELLED AND ENTIRE PAYMENT WAS RECEI VED BACK BY THE ASSESSEE. THEREAFTER, THIS AMOUNT WAS DEPOSI TED IN THE AXIS BANK. THEREFORE, THE AMOUNT WAS EXPLAINED AND THE ASSESSEE HAS DEPOSITED THIS AMOUNT IN AXIS BANK. TH EREFORE, THE LD. CIT(A) IS JUSTIFIED AND OUR INTERFERENCE IS NOT REQUIRED. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISM ISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 30 TH NOVEMBER, 2015. CPU* 1630 ITO ,3(1), INDROE VS. SHRI VIKUL SHARMA, INDORE. I.T.A.NO. 499/IND/2014 A.Y. 2010-11 9 9