Ram Kumar Tyagi, Yamunanagar V. ITO, Yamunanagar

ITA 505/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9895 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gift; Business income
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER ITA NO.505 /CHD/2016 (ASSESSMENT YEAR: 2007-08) RAM KUMAR TYAGI, VS. THE INCOME TAX OFFICER, B-6/1269-C, GOBIND PURI, WARD NO.3, MODEL TOWN, YAMUNA NAGAR. YAMUNA NAGAR. PAN NO. ADJPT2525K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOEL RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 21.06.2016 DATE OF PRONOUNCEMENT : 21.06.2016 O R D E R THIS APPEAL AT THE INSTANCE OF THE ASSESS EE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-2, GURGAON DATED 16.2.2016 RELATING T O ASSESSMENT YEAR 2007-08, PASSED UNDER SECTION 250(6 ) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE SOLITARY ISSUE THAT ARISES FOR MY CONSIDERA TION IS WHETHER THE CIT (APPEALS) IS JUSTIFIED IN CONFIRMIN G AN ADDITION OF RS.1,22,800 OUT OF THE TOTAL ADDITION O F RS.2,52,800/- MADE BY THE ASSESSING OFFICER BEING UNEXPLAINED CASH DEPOSIT UNDER SECTION 68 OF THE AC T. 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS FO LLOWS : 3.1) THE ASSESSEE IS AN INDIVIDUAL. THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR WAS FILED ON 28.3. 2008 DECLARING NET INCOME OF RS.1,08,000/- AND AGRICULTU RAL INCOME OF RS.1,30,000/-. THE ASSESSING OFFICER RECEIVED I NFORMATION THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS.10,6 6,900/- IN SAVING BANK ACCOUNT MAINTAINED WITH ICICI BANK L TD. DURING THE PREVIOUS YEAR RELEVANT TO THE CONCERNED ASSESSMENT YEAR. THE ASSESSEE SUBMITTED A CASH FLOW STATEMENT AND CONTENDED THAT THE CASH WAS DEPOSITED FROM THE CASH AVAILABLE WITH HIM ON ACCOUNT OF CASH WITHDRAWALS FROM BANK, AGRICULTURAL INCOME, BUSINESS INCOME AND CASH RECEI VED FROM HIS WIFE AND SON. THE CASH FLOW STATEMENT FURNISHE D BY THE ASSESSEE WAS NOT RELIED ON BY THE ASSESSING OFFICER . THE ASSESSING OFFICER PREPARED A SEPARATE CASH FLOW STA TEMENT AND POINTED OUT THAT THERE WAS A NEGATIVE CASH BALANCE OF RS.2,52,800/- ON 23.3.2007. THIS AMOUNT OF NEGATI VE CASH BALANCE OF RS.2,52,800/- WAS ADDED TO THE TOTAL INC OME OF THE ASSESSEE WHILE COMPLETING THE ASSESSMENT ORDER DATE D 9.1.2015 UNDER SECTION 143(3) OF THE ACT. 4) AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL TO THE CIT (APPEALS). THE CIT (APPEALS) GAVE CREDIT OF OPENING CASH AND AGRICULTURAL INCOME AMOUNTING TO RS.20,000/- EACH. THE CIT (APPEALS) FU RTHER ACCEPTED ASSESSEES CONTENTION THAT THE CASH DEPOSI T IN THE BANK ON 29.9.2006 WAS ONLY RS.10,000/- INSTEAD OF R S.1 LAC TAKEN BY THE ASSESSING OFFICER. ACCORDINGLY, A SUM OF 3 RS.1,30,000/- WAS DELETED BY THE CIT (APPEALS) (RS. 90,000/- CASH DEPOSIT IN BANK ON 29.9.2006, OPENING CASH BAL ANCE OF RS.20,000/- + AGRICULTURAL INCOME OF RS.20,000/- = RS.1,30,000/-). 5) THE ASSESSEE BEING AGGRIEVED, IS IN APPEAL BEFO RE US WITH REGARD TO THE RETENTION OF ADDITION OF SUM OF RS.1,22,800/- UNDER SECTION 68 OF THE ACT. DURING THE COURSE OF HEARING BEFORE US, THE ASSESSEE HAD SUBMITTED AF FIDAVIT OF SHRI AKSAH TYAGI AND SMT.REKHA TYAGI, SON AND WIFE OF THE ASSESSEE. THE AFFIDAVIT IS CONFIRMING THE GIFTS OF RS.45,000/- AND RS.40,000/- FROM WIFE AND SON RESPECTIVELY TO A SSESSEE. THE COMPUTATION OF INCOME OF THE ASSESSEE AS WELL A S ASSESSEES SON SHRI AKASH TYAGI FOR THE ASSESSMENT YEAR 2007-08 IS ALSO ENCLOSED IN THE PAPER BOOK. IT WAS SUBMITTED THAT THE CREDIT IS TO BE GIVEN FOR THE GIFTS RECEIV ED FROM WIFE AND SON OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE CREDIT OF RS.50,000/- SHOULD BE GIVEN FOR BUSINESS INCOME IN THE CASH FLOW STATEMENT, SINCE THE ASSESSEE HAS DEC LARED IN THE RETURN OF INCOME BUSINESS INCOME OF RS.1,08,000 /-. IT WAS CONTENDED THAT IF ABOVE CREDITS ARE TAKEN INTO ACCOUNT, THERE WOULD NO NEGATIVE BALANCE WARRANTING ADDITION UNDER SECTION 68 OF THE ACT. 6) THE LEARNED D.R. WAS DULY HEARD. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS FI LED THE AFFIDAVIT OF WIFE AND SON OF THE ASSESSEE CONFIRMIN G THE 4 PAYMENT OF RS.40,000/- AND RS.45,000/- RESPECTIVELY TO THE ASSESSEE. BOTH ASSESSEES SON AND WIFE HAS GOT NEC ESSARY SOURCE FOR MAKING THE ABOVE GIFT AND THE SAME IS EV IDENT FROM THE COMPUTATION OF INCOME OF ASSESSEES SON AND WIF E, WHICH IS ENCLOSED IN THE PAPER BOOK FILED BY THE ASSESSEE . MOREOVER, IN THE ASSESSEES RETURN, THERE IS DECLARATION OF R S.1,08,000/- AS A BUSINESS INCOME FOR THE RELEVANT ASSESSMENT YE AR. THEREFORE, IN THE CASH FLOW STATEMENT PREPARED BY T HE ASSESSEE CREDIT OF RS.50,000/- ON ACCOUNT OF BUSINE SS INCOME CANNOT BE DIS-BELIEVED. IF THE GIFTS RECEIVED FROM THE WIFE AND SON AS WELL AS THE BUSINESS INCOME ARE GIVEN DUE CR EDIT IN THE CASH FLOW STATEMENT, THERE WOULD NOT BE ANY NEGATIV E CASH BALANCE AS ON 23.3.2007. SINCE I HAVE ACCEPTED THE SOURCE OF GIFT AND CORRECTNESS OF BUSINESS INCOME, THE ADDITI ON ON ACCOUNT OF NEGATIVE CASH BALANCE AS ON 23.3.2007 IS UNWARRANTED. THEREFORE, THE ADDITION OF RS.1,22,800 /- SUSTAINED BY THE CIT (APPEALS) IS DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF JUNE, 2016 SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER DATED : 21 ST JUNE, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5