Vineet Sharma, Faridabad V. ITO, Ward-2(5), Faridabad

ITA 517/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4013 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATHIYA VED
• Assessee Lawyers: RAVINDRA BHATTRA
• Keywords: Unexplained investment
• Section: 234B; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO. 517/DEL/2018 ASSESSMENT YEAR: 2014-15 VINEET SHARMA C/O DINESH AHUJA & ASSOCIATES, 782, SECTOR-15A, FARIDABAD, HARYANA PAN-BUFPS4355A VS. ITO, WARD - 2(5) FARIDABAD [APPELLANT] [RESPONDENT] ASSESSEE BY: SH. RAVINDRA BHATTRA, CA RESPONDENT BY: SMT. ATHIYA VED, SR. D.R. DATE OF HEARING: 07 06 2018 DATE OF PRONOUNCEMENT: 13 08 2018 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 10.11.2017 OF CIT(A), FARIDABAD. FOLLOWING GROUNDS HAVE BEEN R AISED IN THIS APPEAL:- I. THAT THE APPELLANT DENIES HIS LIABILITY TO BE ASSES SED AT INCOME OF RS. 12,11,160/- AND ACCORDINGLY DENIES HIS LIABILITY TO PAY TAX, SURCHARGE AND INTEREST DEMANDED THEREON. II. THAT ON THE FACTS AS WELL AS ON LAW, LD. AO ERRED I N MAKING ADDITION OF RS. 2,68,000/- BEING CASH PAID FOR PURCHASE OF N EW CAR BY TREATING IT AS UNDISCLOSED INVESTMENT U/S 69 OF THE INCOME TAX ACT, 1961. III. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN CHARGING INTERE ST U/S 234B AND 234C OF THE INCOME TAX ACT, 1961. 2. VIDE GROUND NOS. 1 AND 2, THE GRIEVANCE OF THE ASSE SSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS. 2,68,000/- MADE BY THE AO U/S 69 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT). FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 24. 3.2015 DECLARING AN INCOME OF ITA NO. 517/DEL/2018 2 RS. 9,43,160/-. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASS ESSEE PURCHASED A NEW CAR FROM M/S VARDHMAN CARS PVT. LTD., AND PAID AN AMOUN T OF RS. 10,8000/-. HE ASKED THE ASSESSEE TO EXPLAIN THE TOTAL EXPENDITURE MADE ON PURCHASE OF CAR AND SOURCE THEREOF. THE ASSESSEE SUBMITTED THAT HE HAD PAID THE FOLLOWING AMOUNTS FOR PURCHASE OF CAR. DATED MODE OF PAYMENT AMOUNT 03.11.2013 CASH PAYMENT TO VARDHMAN CARS PVT. LTD. 5,43,000/- 03.11.2013 CREDIT CARD TO VARDHMAN CARS PVT. LTD. 15,000/- 18.11.2013 LOAN FROM SBI TO VARDHMAN CAR PVT. LTD. 4,50,000/- 3. THE ASSESSEE ALSO FURNISHED THE COPIES OF CASH R ECEIPTS ISSUED BY M/S VARDHMAN CARS PVT. LTD FOR RS. 5,43,000/-. THE AO T HEREAFTER ISSUED A LETTER TO M/S VARDHMAN CARS PVT. LTD (FORMERLY KNOWN AS VARDH MAN CARS PVT. LTD) WITH THE REQUEST TO FURNISH THE COMPLETE DETAILS OF PAYM ENT MADE TO THE COMPANY BY THE ASSESSEE FOR THE PURCHASE OF CAR ON 3.11.2013. IN RESPONSE, THE SAID COMPANY SUBMITTED THAT THE CAR WAS SOLD ON 11.3.2013 AND AL SO FURNISHED THE COPY OF LEDGER ACCOUNT WHICH READ AS UNDER:- S. NO. DATE OF PAYMENT MODE OF PAYMENT AMOUNT (DR.) AMOUNT (CR.) 1. 27.10.2013 CASH FOR BOOKING OF DUSTER CAR 50,000/- 2. 03.11.2013 CASH PAID 5,43,000/ - 3. 03.11.2013 SALE OF CAR 9,39,454/- 4. 03.11.2013 CREDIT CAR 15,000/ - 5. 03.11.2013 REGN. CHARGES 64,080/- 6. 03.11.2013 INSURANCE CHARGES 32,966/- 7. 03.11.2013 LOGISTICS CHARGES 8,500/- 8. 03.11.2013 LOAN FROM SBI 4,50,000/- 9. 03.11.2013 ACCESSORIES CHARGES 13,000/- TOTAL 10,58,000/- 10,58,000/- 4. THE AO OBSERVED THAT THE INFORMATION RECEIVED F ROM THE COMPANY REVEALED THAT THE ASSESSEE HAD PAID A SUM OF RS. 5, 93,000/- WHILE THE ASSESSEE ITA NO. 517/DEL/2018 3 EXPLAINED THE TOTAL CASH PAYMENT OF RS. 5,43,000/-. HE, THEREFORE, MADE THE ADDITION OF RS. 50,000/-. THE AO ALSO OBSERVED THAT THE SOURCE OF INVESTMENT FURNISHED BY THE ASSESSEE WAS AS UNDER;- LOAN TAKEN FROM SBI RS. 4,50,000/ - THROUGH CREDIT CARD RS. 15,000/- SALE OF OLD CAR TO SHRI VIJAY SINGH RS. 2,25,000/ - CASH PAYMENT RS. 5,43,000/- THE AO ASKED THE ASSESSEE TO FURNISH COMPLETE ADDR ESS OF THE OLD CAR PURCHASER AND AFTER GETTING THE ADDRESS, HE SENT A LETTER THROUGH SPEED POST WHICH RETURNED BACK UNSERVED WITH THE POSTAL REMARKS I.E. INCOMPLETE ADDRESS WITHOUT PART. HE, THEREFORE, ADDED A SUM OF RS. 2,25,000/-. 5. THE AO ALSO ASKED THE ASSESSEE TO FURNISH THE SO URCE OF CASH PAYMENT OF RS. 5,43,000/-. THE ASSESSEE SUBMITTED THAT A SU M OF RS. 1,49,800/- WAS WITHDRAWN FROM STANDARD CHARTERED BANK ACCOUNT NO. 52610819255 AND SUM OF RS. 3,95,000/- WAS WITHDRAWN FROM HDFC BANK ACCOUNT NO. 07071000030663. THE AO ON PERUSING BANK STATEMENT O F STANDARD CHARTERED BANK OBSERVED THAT THE ASSESSEE HAD MADE WITHDRAWAL S FROM ATM THROUGHOUT THE YEAR FOR HIS HOUSEHOLD EXPENSES THEREFORE, THOS E MAY NOT BE CONSIDERED FOR THE PURCHASE OF CAR. HE ALSO OBSERVED THAT THE BANK STATEMENT OF HDFC REVEALED THAT THE PAYMENTS WERE TRANSFERRED THROUGH NEFT TO OTHER ACCOUNT IN THE AXIS BANK, THERE WERE NO CASH WITHDRAWALS FOR A SUM OF R S. 1,80,000/- AND THAT THE ANOTHER WITHDRAWALS WERE THROUGHOUT THE YEAR FOR DA Y TO DAY HOUSEHOLD EXPENSES. HOWEVER, HE ACCEPTED THE WITHDRAWALS OF R S. 50,000/- ON 21.11.2013 FOR THE PURPOSES OF PURCHASE OF CAR AND WAS OF THE VIEW THAT THE ASSESSEE COULD NOT ESTABLISH THE CASH PAYMENT MADE TO M/S VARDHMAN CARS PVT. LTD FOR RS. 2,68,000/- (5,43,000/- MINUS RS. 2,25,000/- MINUS R S. 50,000/-) AND ACCORDINGLY THE ADDITION OF RS.2,68,000/- WAS ALSO MADE. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) WHO DELETED THE ADDITIONS OF RS. 50,000/- AND RS. 2 ,25,000/- BY OBSERVING THAT ITA NO. 517/DEL/2018 4 THE ASSESSEE HAD WITHDRAWN RS. 50,000/- FROM HIS BA NK ACCOUNT ON 27.10.2013 AND THAT THE ASSESSEE COULD EXPLAIN THE AMOUNT OF R S. 2,25,000/- RECEIVED FROM SALE OF OLD CAR. 7. AS REGARDS TO THE ADDITION OF RS. 2,68,000/-, TH E SUBMISSIONS OF THE ASSESSEE WERE AS UNDER:- 6.1 THAT LD. ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 268000/- TO THE INCOME OF THE APPELLANT BEING AN INVESTMENT FOR PURCHASE OF D USTER CAR FROM UNDISCLOSED SOURCE OF THE APPELLANT. THE APPELLANT HAS GIVEN DE TAIL OF CASH WITHDRAWAL FROM HIS BANK ACCOUNTS ON VARIOUS DATES. BUT THE LD. ASSESSI NG OFFICER HAS REFUSED TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT SUCH WITHDRAWAL S WERE FOR THE PURCHASE OF CAR. THE DISALLOWANCE WAS MADE ONLY ON THE ASSUMPTIONS T HAT THE CASH WITHDRAWAL FROM TWO BANK ACCOUNTS ON DIFFERENT DATES WAS TO MEET DA Y TO DAY HOUSE HOLD EXPENSES OF THE APPELLANT, BUT NOT FOR PURCHASE OF CAR. THE LD. ASSESSING OFFICER HAS NOT GIVEN ANY REASONABLE EVIDENCE FOR HIS ASSUMPTION. 4.11 ASSESSEE BEING SALARIED PERSON EMPLOYED WITH M/S P ANASONIC INDIA PVT. LTD. HAD DECLARED TOTAL INCOME OF RS. 9,43,160/- FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. HIS SPOUSE SMT. GARIMA SHARMA IS ALS O A SALARIED PERSON AND IS AN INCOME TAX ASSESSEE HAVING PAN - ASCPM5888Q. COPY O F ITR OF BOTH THE APPELLANT AND HIS SPOUSE ARE ENCLOSED AT PAGE NO. 48-49 OF THE PAPER BOOK. 4.L2 DURING THE YEAR UNDER CONSIDERATION BOTH ASSES SEE AND HIS SPOUSE WITHDRAW SUBSTANTIAL CASH FROM THEIR BANK ACCOUNTS FOR PURCH ASE OF DUSTER CAR. COPY OF BANK STATEMENTS OF APPELLANT SH. VINEET SHARMA AND HIS S POUSE SMT. GARIMA SHARMA IS ENCLOSED AT PAGE NO. 23-47 OF THE PAPER BOOK. SUMMARY OF CASH WITHDRAWING DURING THAT PERIOD IS AS UNDER: PERIOD AMOUNT OF CASH WITHDRAWAL BY SH. VINEET SHARMA FROM: AMOUNT OF CASH WITHDRAWAL BY SMT. GARIMA SHARMA FROM: HDFC BANK STANDARD CHARTERED BANK CITI BANK HDFC BANK FROM 01.04.2013 TO 31.07.2013 RS. 53,900/ - RS. 72,000/ - 68,000/ - RS. 78,800/ - FROM 01.08.2013 TO 03.11.2013 RS. 1,72,000/- RS. 81,500/- RS. 94,200/- RS. 1,51,500/- TOTAL RS. 2,25,900/- RS. 1,53,500/ - RS. 1,62,200/ - RS. 2,30,300/ - TOTAL WITHDRAWAL FROM BOTH OF THEM RS. 7,71,900/- 4.13 YOUR HONOUR, WE RESPECTFULLY SUBMIT THAT CASH WITHD RAWAL OF RS. 7,71,900/- AS EXPLAINED ABOVE, FROM THE APPELLANT'S AND HIS SPOUS E'S ACCOUNT WAS NOT MERELY FOR DAY TO DAY HOUSE HOLD EXPENSES. IT ALSO INCLUDES TH E CASH WITHDRAWAL WHICH WAS DRAWN FOR PURCHASE OF CAR. ITA NO. 517/DEL/2018 5 4.14 FURTHER, IT IS CLEARLY EVIDENT THAT APPELLANT HAS DONE MUCH HOUSEHOLD EXPENDITURE THROUGH HIS CREDIT AND DEBIT CARDS ALSO . THE TOTAL OF THAT PAYMENTS IS OF RS. 1,75,000/- APPROX. FOR THE PERIOD FROM 01.04.20 13 TO 03.11.2013 WHICH CAN ALSO BE EVIDENT FROM THE STANDARD CHARTERED BANK STATEME NT. PLEASE REFER PAGE NO. 25-39 OF PAPER BOOK. 4.15 IN THIS INSTANT CASE, THE CASH EXPENDED BY THE APP ELLANT OF RS. 268000/- IS SELF EXPLAINED FROM ACCUMULATED CASH PROBABLY GENERATED AND AVAILABLE FROM SURPLUS (INCOME DECLARED IN PAST RETURN OF INCOME MINUS REA SONABLE HOUSEHOLD WITHDRAWALS) EMERGING FROM INCOME DECLARED IN PAST ITRS. THE VARIOUS WITHDRAWALS FROM APPELLANT'S AND HIS SPOUSE'S BANK ACCOUNT TILL THE DATE OF PURCHASE OF CAR FURTHER STRENGTHEN ASSESSEE'S CASE FOR PROBABLE AVA ILABILITY OF SUCH ABOVE-SAID CASH FROM PART AND CURRENT YEAR SAVINGS SO AS TO MAKE IN VESTMENT IN PRESENT YEAR. 4.16 IMPORTANTLY, WE RESPECTFULLY SUBMIT BEFORE YOUR HO NOUR THAT THERE IS NO LEGAL BAR IN KEEPING CASH AT HOME AND KEEPING CASH AT HOM E BEFORE PURCHASING A NEW CAR IS NOT UNUSUAL. 4.17 YOUR HONOUR, IN FACTS OF THE CASE, THERE IS ONLY A TIME GAP BETWEEN THE APPELLANT'S WITHDRAWALS FROM THEIR RESPECTIVE BANK ACCOUNTS AND PURCHASE OF NEW CAR. IMPORTANTLY, TO MENTION HERE THAT THERE IS NO FINDING RECORDED BY THE LD. ASSESSING OFFICER THAT APART FROM USING SUCH CASH F OR PURCHASE OF CAR AS EXPLAINED BY THE APPELLANT, THERE WAS NO OTHER USE BY THE ASS ESSEE FOR THESE CASH WITHDRAWALS AND IN THE ABSENCE OF THAT, SIMPLY BECAUSE THERE WA S A TIME GAP, THE EXPLANATION OF THE APPELLANT CANNOT BE REJECTED AND HENCE ADDITION OF RS. 268000/- MADE BY THE LD. ASSESSING OFFICER IS NOT CORRECT. 4.18 IN CASE OF BALDEV CHARLA 121 TTJ 366 ITAT DELHI HAS HELD THAT THE EXPLANATION OF THE ASSESSEE CANNOT BE REJECTED SIMPLY BECAUSE T HERE WAS A TIME GAP, AND HENCE ADDITION CONFIRMED BY THE LD. ASSESSING OFFICER IS NOT CORRECT. 6.10. IS NOTEWORTHY TO MENTION HERE THAT THE INVEST MENT FOR PURCHASE OF NEW CAR HAVE BEEN DULY EXPLAINED FROM BANK WITHDRAWALS AS D ISCUSSED ABOVE AND THE SAME IS GENUINE IN VIEW OF FACTS THAT NO PRUDENT MAN WILL W ITHDRAW ACCOUNTED CASH FROM HIS BANK ACCOUNT AND CONVERT IT INTO UNACCOUNTED/UNEXPL ALNED/BLACK MONEY AND SIMULTANEOUSLY MADE INVESTMENT FROM THIS UNACCOUNTE D/UNEXPLAINED/BLACK MONEY. TO SUM UP 6.11 IN CASE OF P. K. NOORJAHAN THE HONOURABLE SUPR EME COURT OF INDIA HAS HELD THAT, SECTION 69 OF THE INCOME TAX ACT, 1961CONFERRED ON LY A DISCRETION ON THE INCOME TAX OFFICER TO DEAL WITH THE INVESTMENT AS INCOME O F THE ASSESSEE AND THAT IT DID NOT MAKE IT MANDATORY ON HII PART TO DEAL WITH THE INVE STMENT AS INCOME OF THE ASSESSEE AS SOON AS THE TATTER'S EXPLANATION HAPPENED TO BE REJECTED. THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCU MSTANCES OF THE PARTICULAR CASE. 6.12 IN THIS INSTANT CASE ALSO, THE LD. A.0 HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THE FACT THAT THE CASH WITHDRAWAL HAS BEE N UTILIZED FOR ANY OTHER PURPOSE, OTHER THAN THE PURPOSE SPECIFIED BV THE APPELLANT. THERE WAS NO MATERIAL WITH THE ITA NO. 517/DEL/2018 6 LD. ASSESSING OFFICER THAT ABOVE-SAID CASH WAS NOT AVAILABLE WITH THE APPELLANT FURTHER, IT IS APPARENT THAT CASH WITHDRAWAL BV THE APPELLANT AND HIS SPOUSE WERE FAR IN EXCESS OF REASONABLE REQUIREMENT OF HOUSEHOL D EXPENSES. LD. ASSESSING OFFICER HAS NO MATERIAL BEFORE HIM TO SUPPORT HIS C ONTENTION THAT THE ENTIRE CASH WITHDRAWALS MUST HAVE BEEN SPENT BV THE APPELLANT. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES IN TOTALITY AND ALSO JUDICIAL PRONOUN CEMENT. YOUR HONOUR IS REQUESTED TO KINDLY DELETE THE ADDITION OFRS. 2.68. 000/- AS MADE BV THE LD. A.0 BEING UNEXPLAINED INVESTMENT FOR PURCHASE OF CAR U/S 69 O F THE INCOME TAX ACT. 1961. 8. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE OBSERVED THAT THE SUBMISSIONS OF THE ASSESSEE HAD B EEN CONSIDERED BY THE AO IN PARA 4 OF THE ASSESSMENT ORDER, THEREFORE, THERE WA S NO REASON TO INTERFERE WITH THE ORDER OF THE AO. 9. NOW THE ASSESSEE IS IN APPEAL. 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE PAYMENTS IN CASH WERE MADE OUT OF WITHDRAWALS FROM THE BANK ACCOUNTS , THEREFORE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION S MADE BY THE AO. THE RELIANCE WAS PLACED ON THE DECISION OF THE ITAT DEL HI BENCH SMC-2 BENCH, NEW DELHI IN THE CASE OF GORDHAN VS. ITO IN ITA NO. 811/DEL/2015. IN HIS RIVAL SUBMISSIONS, THE LEARNED SR. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE HAD M ADE SMALL WITHDRAWALS FOR HOUSEHOLD EXPENSES AND THE AO HAD ALREADY ALLOWED T HE CREDIT OF THE AMOUNT UTILIZED FOR PURCHASE OF CAR THEREFORE, THE LEARNED CIT(A) WAS FULLY JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE AO. 11. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE SMALL WITHDRAWALS MADE BY THE ASSESSEE WER E CONSIDERED BY THE AO TOWARDS HOUSEHOLD EXPENSES. HOWEVER, THE EXPLANATIO N OF THE ASSESSEE BEFORE THE LEARNED CIT(A) WAS THAT HIS SPOUSE SMT. GARIMA SHARMA ALSO WITHDREW FROM THE BANK AND TOTAL WITHDRAWALS BY BOTH OF THEM WERE OF RS. 7,71,900/- WHICH INCLUDED THE WITHDRAWALS FOR PURCHASE OF CAR. THE SAID EXPLANATION OF THE ITA NO. 517/DEL/2018 7 ASSESSEE ALTHOUGH MENTIONED AT PARA 4.12 OF THE IMP UGNED ORDER BUT HAD NOT BEEN APPRECIATED BY THE LEARNED CIT(A) IN RIGHT PER SPECTIVE. THEREFORE, CONSIDERING THE TOTALITY OF FACTS, I AM OF THE VIEW THAT WHEN THE ASSESSEE AND HIS WIFE HAD WITHDREW A SUM OF RS. 7,71,900/- FROM THE VARIOUS BANKS ACCOUNT FROM 1.4.2013 TO 3.11.2013. THE SAID WITHDRAWAL WAS SUFF ICIENT TO EXPLAIN A PAYMENT OF RS. 2,68,000/- FOR THE PURCHASE OF THE CAR, PART ICULARLY WHEN IT IS NOT BROUGHT ON RECORD THAT THE SAID AMOUNT WAS USED ELSEWHERE. IN THAT VIEW OF THE MATTER, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LE ARNED CIT(A) IS DELETED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 13.08.2018.) SD/ - [N.K. SAINI] ACCOUNTANT MEMBER DATED: 13.08.2018 SH ITA NO. 517/DEL/2018 8 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 10 .0 8 .2018 PS 2. DRAFT PLACED BEFORE AUTHOR 13 .0 8 .2018 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. 11. ORDER UPLOADED ON 13 .8 .2018