Ms. Sona Bahl, New Delhi V. ITO, New Delhi

ITA 5283/DEL/2014

• Counselvise Citation: 528320114 RSA 2014
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 13-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANOJ KR CHOPRA
• Assessee Lawyers: K R MUNJANI
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - II , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 5283 /DEL/2014 ASSESSMENT YEAR : 2008 - 09 APPELLANT BY : K. R. MUNJANI, ADV RESPONDENT BY : SH. MANOJ KR. CHOPRA, SR. DR DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT : 16 .07.2015 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 20.08.2014 OF LD.CIT(A), X, NEW DELHI PERTAINING TO THE ASSESSMENT YEAR 2008 - 09 ON THE FOLLOWING GROUND S : - THE LD AO HAS ERRED ON FACTS AS WELL AS IN LAW IN MAKING THE ADDITION MERELY ON SURMISES OF RS.5,25,000/ - DEPOSITED IN BANK EVEN THOUGH THERE IS PROPER SOURCE THEREFORE. SIMILARLY LD CIT(A) HAS ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING MERELY ON SURMI SES ADDITION OF RS.3,00,000/ - . 2. THE FACTS OF THE CASE ARE GIVEN IN PARA 2 OF THE ORDER OF THE LD CIT(A), WHICH ARE EXTRACTED FOR READY REFERENCE: - 2. THE FACTS OF THE CASE ARE THAT RETURN OF INCOME WAS FILED ON 02 - 12 - 2008 DECLARING AN INCOME OF RS.91, 910/ - . ASSESSMENT U/S 143(3) WAS COMPLETED AT AN INCOME OF RS.6,16,9107 - BY MAKING THE ADDITION OF RS.5,25,000/ - U/S 69A SINCE THE ASSESSEE COULD NOT DISCHARGE ITS ONUS REGARDING DEPOSITING THE CASH IN ACCOUNT. 3. AGGRIEVED WITH SUCH ORDER, THE PRESE NT APPEAL HAS BEEN FILED. 4. THE APPELLANT HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: '(1) THE AO ERRED IN LAW AND FACTS BY INCREASING INCOME BY RS.5,25,000/ - ON ACCOUNT OF CASH DEPOSIT IN BANK. (2) THE ASSESSEE CRAVES LEAVE TO ADD, AMEND OR WITHDRAW ANY GROUND AT THE TIME HEARING. SONA BAHI D - 810, NEW FRIENDS COLONY, NEW DELHI PAN:AAGPB3766J VS. ITO, WARD - 22 ( 2 ), NEW DELHI (APPELLANT) (RESPONDENT) PAGE 2 OF 4 3. BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE FURNISHED ALL THE DETAILS. THE FIRST APPELLATE AUTHORITY CALLED FOR A REMAND REPORT. THEREAFTER THE ASSESSEE FILED REJOINDER OF THE REMAND REPOR T. THE FIRST APPELLATE AUTHORITY GRANTED PART RELIEF. 4. FURTHER AGGRIEVED THE ASSESSEE IS BEFORE US. 5. HEARD THE LD COUNSEL FOR THE ASSESSEE SHRI K.R. MUNJANI, ADVOCATE AND SHRI MONOJ KUMAR CHOPRA, THE LD DEPARTMENTAL REPRESENTATIVE. THE SUM AND SUBSTAN CES OF THE SUBMISSIONS OF SHRI K.R. MUNJANI IS THAT AN AMOUNT OF RS.4,78,000/ - IS AVAILABLE WITH THE ASSESSEE AS ON 31.03.2007. HE ALSO SUBMITS THAT THE ASSESSEE MAINTAINED BOOKS OF ACCOUNT AND CASH FLOW STATEMENT AND THAT THEY WERE SUBMITTED BEFORE THE AO AS WELL AS BEFORE THE LD CIT(A). THE LD DR SUBMITS THAT THE ASSESSEES CLAIM IS A CONCOCTED STORY AND IS CONTRADICTORY. HE RELIED ON THE ORDER OF THE FIRST APPELLATE AUTHORITY AND SUBMITTED THAT THERE IS NO JUSTIFICATION GIVEN ON WHY THE ASSESSEE KEPT CAS H OUTSIDE HER BANK ACCOUNT FROM DECEMBER, 2006 TO JULY - AUGUST, 2007 , WHEN SPECIFICALLY HER BANK ACCOUNT WAS FULL OF BANKING TRANSACTION AND THE ASSESSEE HAD APPROXIMATELY RS.50 LACS IN INVESTMENT. 6. AFTER HEARING RIVAL CONTENTION I AM CONVINCED WITH THE FINDINGS OF THE FIRST APPELLATE AUTHORITY ON THIS ISSUE. THERE IS NO PLAUSIBLE EXPLANATION GIVEN BY THE ASSESSEE FOR HAVING KEPT CASH BALANCE OF RS.4,78,000/ - FROM 9 TH MARCH 2007 TO 23 RD OCTOBER 2007. THERE IS NO PROXIMITY OF SOURCE . WHEN THE ASSESSEE IS OPERATING HER BANK ACCOUNT REGULARLY THE C L A I M THAT HUGE CASH BALANCES ARE KEPT IS STRANGE. THEORY PUT UP BY THE ASSESSEE CANNOT BE BELIEVED. 7 T HE FIRST APPELLATE AUTHORITY FROM PAGES 11 TO 13 IS AS FOLL OWS: - ON CONSIDERING THE FACTS OF THE CASE IT IS OBSERVED THAT THE APPELLANT WAS NOT MAINTAINING BOOKS OF ACCOUNTS AND IT IS TRUE THAT WHEN THE APPELLANT'S CASE WAS SELECTED IN SCRUTINY, THEREAFTER ONLY THE APPELLANT HAD PREPARED STATEMENT OF CASH FOR F.Y . 2006 - 07 AND BALANCE SHEETS AS ON 31 - 03 - 2007 AND 31 - 03 - 2008. THE ONLY EVIDENCE IN SUPPORT OF BALANCE SHEET AND CASH FLOW STATEMENT ARE BANK ACCOUNTS WHICH WERE SUBMITTED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS AS WELL AS DURING THE APPELLATE PR OCEEDINGS. SINCE THE APPELLANT HAS NOT PRODUCED ANY OTHER DOCUMENT OR EVIDENCE WHICH WERE ALREADY PRODUCED BEFORE THE A.O., THE A.O. IS NOT JUSTIFIED IN ASSUMING THAT THE DOCUMENTS FURNISHED BY THE APPELLANT ARE ADDITIONAL EVIDENCE AND HENCE SHOULD NOT BE ACCEPTED UNDER RULE 46A OF THE I.T. RULES, 1962. IT IS OBSERVED THAT FOR JUSTIFYING THE AVAILABLE CASH OF RS.4,78,000/ - AS ON 01 - 04 - 2007 (OPENING CASH BALANCE), THE APPELLANT HAS FURNISHED A CASH FLOW STATEMENT SHOWING THAT RS.2,00,000/ - EACH WERE WITHDRAW N BY THE APPELLANT AS ON 01 - 12 - 2006 VIDE CHEQUE NO.141708 AND 141709 WITH STANDARD CHARTERED BANK PAGE 3 OF 4 AND AGAIN ON 09 - 03 - 2007, THE APPELLANT HAS WITHDRAWN RS.1,50,000/ - FROM HER BANK ACCOUNT, BANK OF BARODA. THE APPELLANT WAS SPECIFICALLY ASKED AS TO WHY SHE H AD WITHDRAWN RS.1,50,000/ - IN MARCH, 2006 WHEN SHE HAS CLAIMED THAT RS.4,00,000/ - WERE AVAILABLE WITH HER SINCE DECEMBER, 2006. THE APPELLANT HAS MADE THE FOLLOWING SUBMISSIONS VIDE HER LETTER DT. 17 - 06 - 2014 AS UNDER: 'IN REGARD TO YOUR QUERY AS TO WHY THE MONEY WAS WITHDRAWN WHEN RS,4,00,000 / - WERE ALREADY WITHDRAWN, IT IS SUBMITTED FROM THE CAPITAL OF APPELLANT IT IS CLEAR THAT SHE BELONGS TO AFFLUENT FAMILY. ENQUIRY REVEALED THAT SHE HAD INTENTION TO PURCHASE GADGET FOR WHICH THE AMOUNT WAS WITHDRAWN AND FURTHER AMOUNT WAS ALSO WITHDRAWN FOR THAT PURPOSE BUT SINCE SHE DID NOT LIKE QUALITY, UTILITY AND PRICE, IT WAS NOT PURCHASED AND THE MONEY WAS DEPOSITED IN BANK.' ON EXAMINING THE APPELLANT'S REPLY IT IS OBSERVED THAT IT IS A CONCOCTED STORY FORWARDED B Y THE APPELLANT WHICH IS SELF - CONTRADICTORY. ON THE ONE HAND, THE APPELLANT HAD THE INTENTION TO PURCHASE GADGETS FOR WHICH THE AMOUNTS WERE WITHDRAWN BUT AT THE SAME TIME SHE CHANGED HER MIND AS SHE DID NOT LIKE QUALITY, ITS UTILITY AND PRICE AND MONEY WA S DEPOSITED IN A BANK. THERE IS NO JUSTIFICATION AS TO WHY THE APPELLANT WAS KEEPING CASH AWAY FROM HER BANK ACCOUNT FROM DECEMBER, 2006 TO JULY - AUGUST, 2007 WHEN HER BANK ACCOUNT WAS FULL OF BANKING TRANSACTIONS AND THE APPELLANT HAD APPROXIMATELY RS.50 LACS AND MORE INVESTMENTS MADE IN MUTUAL FUNDS AND OTHER INSTRUMENTS. THE APPELLANT WAS REGULARLY MAKING THE FIXED DEPOSITS IN THE BANK FOR EARNING INTEREST INCOME WHICH IS EVIDENT FROM THE COPIES OF BANK ACCOUNTS SUBMITTED BY THE APPELLANT. THEREFORE, TH E APPELLANT IS NOT FAIR IN FORWARDING THE ARGUMENTS THAT SUCH CASH WITHDRAWAL WAS MEANT FOR PURCHASING GADGETS WHICH COULD NOT BE PURCHASED BY HER IN ALMOST 11 MONTHS PERIOD. THE CASH FLOW STATEMENT OF THE APPELLANT IS, THEREFORE, NOT B ELIEVABLE AS THE AMOUNTS WITHDRAWN IN LARGE DENOMINATIONS SEEM TO BE UTILIZED BY THE APPELLANT FOR SOME INVESTMENTS WHICH CANNOT BE ESTABLISHED TILL ALL THE AFFAIRS OF THE APPELLANT ALONGWITH THE AFFAIRS OF HER HUSBAND AND MOTHER - IN - LAW PERTAINING TO F.Y. 2006 - 07 ARE ENQUIRED INTO. HOWEVER, IT IS BEYOND DOUBT THAT THE STORY OF MAKING WITHDRAWALS FOR PURCHASING GADGETS AND LATER ON QUESTIONING THEIR UTILITY IS DEFINITELY A CONCOCTED STORY AND, THEREFORE, NOT BELIEVABLE. THEREFORE, THE CLAIM OF THE APPELLANT THAT RS.4,78,000/ - WAS AVAILABLE WITH HER IN THE BEGINNING OF THE FINANCIAL YEAR IS NOT ACCEPTABLE. WITH THIS BACKGROUND THE APPELLANT'S AFFAIRS ARE EXAMINED DURING THE F.Y. 2007 - 08. IT IS OBSERVED THAT RS.2,00,000/ - WAS WITHDRAWN BY THE APPELLANT IN CASH ON 18 - 07 - 2007 WHICH THE A.O. HAS PRESUMED THAT THE SAME WOULD HAVE BEEN SPENT ON HOUSEHOLD EXPENSES AND MEETING OUT OTHER EXPENSES. HOWEVER, IT HAS BEEN ESTABLISHED BY THE APPELLANT THAT THE APPELLANT'S HUSBAND HAS MADE A WITHDRAWAL OF RS.2,40,000/ - FOR HO USEHOLD PURPOSES AND APPELLANT'S MOTHER - IN - LAW HAS MADE WITHDRAWAL OF RS.1,16,545/ - AND MADE THE PAYMENTS FOR THE SCHOOL FEE OF THE CHILDREN OF THE APPELLANT. THE WITHDRAWAL OF RS.2,00,000/ - ON 18 - 07 - 2007 WAS DEFINITELY AVAILABLE WITH THE APPELLANT WHICH W AS ULTIMATELY DEPOSITED BY HER ON 28 - 07 - 2007 IN HER BANK ACCOUNT. IN VIEW OF THE ABOVE, THE SOURCE OF CASH DEPOSIT OF RS. 2, 25,000/ - ON 28 - 07 - 2007 APPEARS TO BE JUSTIFIED AND, THEREFORE, NO ADDITION OF RS.2,25,000/ - IN APPELLANT'S INCOME U/S 69A OF THE AC T IS CALLED PAGE 4 OF 4 FOR. HOWEVER, THE APPELLANT'S ARGUMENT THAT RS.3,00,000/ - CASH WAS DEPOSITED ON 23 - 10 - 2007 OUT OF THE CASH AVAILABLE WITH THE APPELLANT SINCE BEGINNING OF THE FINANCIAL YEAR IS NOT JUSTIFIED FOR THE REASONS ELABORATED HEREINABOVE. THE AO'S ACTI ON IN MAKING AN ADDITION OF RS.3,00,000/ - IN APPELLANT'S INCOME TREATING THE CASH DEPOSIT MADE BY THE APPELLANT ON 23 - 10 - 2007 AS UNEXPLAINED IS FULLY JUSTIFIED AND THE ADDITION OF RS.3,00,000/ - IS HEREBY SUSTAINED. THE GROUND OF APPEAL IS PARTLY ALLOWED. 7. WE FIND NO INFIRMITY IN THE FACTUAL FINDING OF THE FIRST APPELLATE AUTHORITY AND HENCE WE UPHOLD THE SAME . 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 6 T H JULY, 2015 . - S D / - ( J. SUDHAKAR REDDY ) ACCOUNTANT MEMBER DATED: 1 6 T H JULY, 2015 AKK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR