Sh. Kulwant Singh, Amritsar. V. The Income-tax Officer, Gurdaspur

ITA 519/ASR/2014

• Counselvise Citation: 51920914 RSA 2014
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 21-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.519(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN :ATOPS0977K SH.KULWANT SINGH, VS. INCOME TAX OFFICER, GURDWARA NANAKSAR, GURDASPUR. KHURMANIA, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.P.N.ARORA, DR RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING:09/02/2015 DATE OF PRONOUNCEMENT:19/02/2015 ORDER PER B.P.JAIN,AM: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F THE CIT(A), AMRITSAR, DATED 02.07.2014 FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LD. CIT(A) ARE BOTH THE FACTS OF THE CASE AND UNTENABL E IN LAW. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN SUSTAIN ING ADDITION OF RS.7,05,671/- OUT OF THE ADDITION MADE BY THE AO AT RS.15,96,000/-. THAT THE LD. CIT(A) DID NOT APPREC IATE THAT NO ITA NO.519(ASR)/2014 2 ADDITION WHATSOEVER IS CALLED FOR AN THE ADDITION M ADE IS PURELY BASED ON CONJECTURES, SURMISES & SUPPOSITION AND TH E SAME DESERVES TO BE DELETED. 3. THAT THE ADDITION MADE IS UN-JUSTIFIED, UN-CALLE D FOR AND UN- WARRANTED UNDER THE CIRCUMSTANCES OF THE CASE AND T HE SAME MAY BE DELETED. THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.7,05,671/- AND THE SAME MAY BE D ELETED. ALTERNATIVELY, THE ADDITION SUSTAINED BY THE LD. CI T(A) AT RS.7,05,671/- IS VERY HIGH & EXCESSIVE. 4. ANY OTHER GROUND OF APPEAL THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THE ASSESSEE IS A PREACHER AT GURDWARA NANAKSAR, KHURMANIA, DISTT. AMRITSAR AND DERIVES IN COME FROM PERFORMING OF AKHAND PATHS AND KIRTAN. HE IS ALSO PRESIDENT OF THE MANAGING COMMITTEE OF GURDWARA NANAKSAR, KHURMANIA, WHICH IS REGISTERED AS A SOCIETY UNDER THE SOCIETIES REGISTRATION ACT (XXI OF 1860) AS AMENDED BY THE PUNJAB AMENDMENT ACT, 1957. THE ASSESSEE FILED RETURN OF INCOME OF 07.08.2008 SHOWING INCOME OF RS.120000/- IN HIS IND IVIDUAL CAPACITY. THE RETURN WAS PROCESSED U/S 143(1) ON 03.03.2010. LATE R ON THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AS ASSESSEE HAD DE POSITED CASH OF RS.1596000/- IN HIS BANK ACCOUNT NO.006601502623 WI TH ICICI BANK, AMRITSAR. ACCORDINGLY, THE AO ISSUED NOTICE U/S 143 (2) OF THE ACT. WITH REGARD TO THE CASH DEPOSITS IN THE BANK, THE ASSESS EE CLAIMED BEFORE THE AO THAT IT REPRESENTED GOLAK INCOME OF THE GURDWARA, W HICH WAS DEPOSITED IN ITA NO.519(ASR)/2014 3 THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE AND EXP ENSES FOR GURDWARA WERE ALSO MADE BY THE ASSESSEE OUT OF THIS BANK ACC OUNT. THE AO EXAMINED THE BANK ACCOUNT OF THE ASSESSEE AND FOUND THAT THE ASSESSEE HAD MADE PAYMENTS AMOUNTING TO RS.93683/- TO LIC FOR POLICIE S OF HIMSELF AND HIS FAMILY MEMBERS. THE AO, THEREFORE, REJECTED THE PLE A OF THE ASSESSEE THAT THE BANK ACCOUNT BELONGED TO THE GURDWARA AND WAS O NLY BEING OPERATED BY THE ASSESSEE BY OBSERVING THAT HAD THIS BEEN GURDWA RA ACCOUNT, NO MONEY COULD HAVE BEEN WITHDRAWN TO COVER PERSONAL POLICIE S OF THE ASSESSEE AND HIS FAMILY MEMBERS. THE AO, THEREFORE, HELD THAT THE AM OUNT OF RS.1596000/- DEPOSITED IN THE SAID BANK ACCOUNT WAS THE EARNING OF THE ASSESSEE AS A KIRTANIAN AND PREACHER AND ASSESSED THE SAME AS INC OME FROM UNDISCLOSED SOURCES. 3. THE LD. CIT(A) WORKED OUT THE PEAK AND OUT OF T HE SAME REDUCED THE OPENING BALANCE OF RS.10783/- AND SUSTAINED THE ADD ITION OF RS.7,05,671/-. 4. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND FURTHER ARGUED THAT THE A SSESSEE HAD DECLARED THE INCOME REGULARLY FOR THE ASSESSMENT YEARS 2004-05 T O 2008-09 AND IN THE IMPUGNED YEAR, AS UNDER: ASSESSMENT YEAR DEDUCTION 2004-05 RS. 83,450/- 2005-06 RS.1,21,070/- ITA NO.519(ASR)/2014 4 2006-07 RS.1,02,000/- 2007-08 RS.1,10,000/- 2008-09 RS.1,20,000/- TOTAL: RS.5,36,520/- THEREFORE, THE CREDIT OF THE SAME BE ALLOWED TO THE ASSESSEE OUT OF THE PEAK SO WORKED OUT. HE RELIED UPON THE DECISION IN THE CASE OF SUKHDEV SINGH IN APPEAL ITA NO.166(ASR)/2011, RELATING TO ASSESSMEN T YEAR 2008-09 DATED 17.01.2014 OF LD. CIT(A), AMRITSAR. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) THAT THE ASSESSEE DID NOT HAVE ANY RIGHT OVER THE FUNDS OF THE SOCIETY NOR H E COULD USE SUCH FUNDS FOR PERSONAL NEEDS. AS AGAINST THIS, THE IMPUGNED BANK ACCOUNT WAS IN THE NAME OF THE ASSESSEE AND HE HAS RIGHT OVER THE SAID ACC OUNT WHICH COULD BE USED BY THE ASSESSEE FOR HIS PERSONAL NEEDS AND OTHER PU RPOSES AND THERE WERE AUTO SWEEP FACILITY IN THE IMPUGNED BANK ACCOUNT AN D THE FDRS ALSO FOUND IN THE NAME OF THE ASSESSEE. THEREFORE, FOR ALL INT ENTS AND PURPOSES, THE SAID BANK ACCOUNT BELONGED TO THE ASSESSEE AND THUS, TH E LD. CIT(A) HAS RIGHTLY REJECTED THE PLEADINGS OF THE ASSESSEE THAT CASH DE POSITS IN THE SAID BANK ACCOUNT REPRESENTED RECEIPTS OF GOLAK OF GURDWARA AND CASH WITHDRAWALS WERE UTILIZED FOR THE EXPENDITURE OF GURDWARA. THE REFORE, LD. CIT(A) HAS RIGHTLY UPHELD THE FINDINGS OF THE AO THAT THERE AR E UNEXPLAINED DEPOSITS IN ITA NO.519(ASR)/2014 5 THE BANK ACCOUNT BUT AT THE SAME TIME ACCEPTED THE ALTERNATIVE PLEADINGS TAKEN BY THE ASSESSEE THAT UNEXPLAINED CASH DEPOSIT S IN THE BANK ACCOUNT CANNOT EXCEED THE PEAK OF THE DEPOSIT MADE IN THE BANK ACCOUNT, SINCE THERE ARE FREQUENT CASH DEPOSITS AND CASH WITHDRAWALS. TH ERE IS NOTHING ON RECORD THAT CASH WITHDRAWALS HAVE BEEN USED ELSEWHERE. ACC ORDINGLY, THE LD. CIT(A) HAS RIGHTLY WORKED OUT THE PEAK AT RS.7,16, 454/- AND HAS RIGHTLY ALLOWED FURTHER CREDIT OF RS.10,783/-, RESULTING INTO THE ADDITION OF RS.7,05,671/-. 7. AS REGARDS THE INCOME DECLARED DURING THE IMPUGN ED YEAR AND IN THE PRECEDING FOUR YEARS AMOUNTING TO RS.5,36,520/- (T OTAL FOR 5 YEARS), WE ACCEPT THE FINDING OF THE LD. CIT(A) THAT THE ASSE SSEE MUST HAVE MET HOUSEHOLD EXPENDITURE BUT REJECT THE FINDING OF TH E LD. CIT(A) TO THE EXPENDITURE THAT THERE ARE NO SAVINGS OF SUCH INCO ME SINCE IT IS HUMANLY NOT POSSIBLE THAT THE ASSESSEE MAY NOT HAVE SAVED EVE N A SINGLE PENNY AT THE CLOSE OF 31 ST MARCH OF EVERY YEAR. IN A COUNTRY LIKE OURS, THE P EOPLE ARE IN A HABIT OF SAVINGS AND THEREFORE, ASSESSEE CERTAINLY MUST HAVE SAVED SOME MONEY AND ACCORDINGLY THE BENEFIT OF SUCH SAVINGS IN THE PRECEDING YEARS AND IN THE IMPUGNED YEAR HAS TO BE GIVEN TO THE ASS ESSEE OUT OF PEAK AMOUNT MENTIONED HEREINABOVE. WE DIRECT THE AO TO GIVE A F URTHER DEDUCTION OF ITA NO.519(ASR)/2014 6 RS.1,25,000/- ON ACCOUNT ACCOUNT OUT OF THE ADDITI ON SUSTAINED AT RS.7,05,671/-. ACCORDINGLY, THIS GROUND OF THE ASSE SSEE IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.519(ASR)/2014 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH FEBRUARY, 2015. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. KULWANT SINGH, AMRITSAR. 2. THE ITO,GURDASPUR. 3. THE CIT(A), AMRITSAR. 4. THE CIT, AMRITSAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.