Shri Vithalbhai Bhimjibhai Ladani, JUNAGADH V. The Income Tax Officer, Ward-2(1), JUNAGADH

ITA 536/RJT/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8863 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 19-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: USHA N SHROTE
• Assessee Lawyers: MJ RANPURA
• Keywords: Peak credit; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 536/RJT/2014 (ASSESSMENT YEAR: 2009-10) SHRI VITHALBHAI BHIMJIBHAI LADANI B-203, CHANAKYA APARTMENT, B/H. DWARKADHIS MARKET, NEHRU PARK, SARDAR BAG, JUNAGADH AP PELLANT VS. THE INCOME-TAX OFFICER, WARD -2(1), JUNAGADH RESPON DENT PAN: AAMPL8419J / BY ASSESSEE : SHRI M. J. RANPURA, A.R. / BY REVENUE : SMT. USHA N. SHROTE, SR. D.R. /DATE OF HEARING : 14.02.2018 /DATE OF PRONOUNCEMENT : 20.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 ARISES AGAINST THE CIT(A)-IV, RAJKOTS ORDER DATED 11.07.2014 IN CASE NO. CIT(A)-IV/0169/0958/11- 12, MAKING ENHANCEMENT OF SECTION 68 ADDITION OF UN EXPLAINED CASH DEPOSITS OF RS.13,55,500/- MADE IN ASSESSMENT ORDER DATED 25.11 .2011 TO PEAK CREDIT AMOUNT OF RS.14,28,881/-, IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 536/RJT/14 [SHRI VITHALBHAI B. LADANI VS. I TO] A.Y. 2009-10 - 2 - 2. IT EMERGES AT THE OUTSET THAT THE ASSESSING OFFI CERS ASSESSMENT ORDER MADE THE ADDITION IN QUESTION OF RS.13,55,500/- COMPRISI NG OF ASSESSEES FATHERS INCOME, AGRICULTURAL INCOME, WIFES INCOME AND SALA RY (ALL UNEXPLAINED) INVOLVING SUMS OF RS.9,35,500/-, RS.70,000/-, RS.1LAKH, RS.2, 50,000/-; RESPECTIVELY. THE CIT(A) APPEARS TO HAVE CONSIDERED THE RELEVANT DATE -WISE CREDIT AND WITHDRAWAL ENTRIES IN ASSESSEES BANK ACCOUNT NO. 2123 IN JUNA GADH COMMERCIAL CO-OPERATIVE BANK, JUNAGADH INTER ALIA INDICATING OPENING BALANC E OF RS.4,11,709/- DEPOSITS OF RS.31,34,238/- IN AGGREGATE WITHDRAWALS OF RS.32,62 ,657/- AS WELL AS PEAK CREDIT SUM OF RS.14,28,881/- TO CONSEQUENTLY ENHANCE THE I MPUGNED ADDITION TO THE EXTENT OF THE ABOVE LAST FIGURE AS FOLLOWS: 4. AS CAN BE SEEN FROM THE ABOVE TABLE, THE MAXIMU M CREDIT BALANCE OF RS.18,40,590/- IS APPEARING ON 21/06/2008. THE OPEN ING BALANCE OF RS. 4,11,709/-, IF TAKEN OUT, THE PEAK CREDIT COMES TO RS. 14,28,881/- . HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAS TRIED TO EXPLAIN THE SOURCE OF CASH DEPOSITS TO THE TUNE OF RS. 13,55,500/- WHICH IS DI SCUSSED IN DETAIL IN PARAGRAPH 2 TO 3 OF THE ASSESSMENT ORDER. THE APPELLANT HAS EXPLAI NED IN THE FOLLOWING MANNER: THST AN AMOUNT OF RS. 9,35,500/- HAS BEEN RECEIVE D FROM HIS FATHER SHRI BHIMABHAI DEVRAJBHAI LADANI, IN SUPPORT OF WHICH AN AFFIDAVIT IS FILED. IN THE STATEMENT RECORDED BY THE ASSESSING OFFICER, SHRI BHIMABHAI DEVRAJBHAI LADANI HAS CONFIRMED THAT HE HAS GIVEN S UCH AMOUNT IN CASH TO HIS SON. HOWEVER, THE SAVINGS BANK ACCOUNT OF SH RI BHIMABHAI D. LACANI MAINTAINED WITH UNION BANK OF INDIA, RESHOD BRANCH, KESHOD BEARING ACCOUNT NO. 10472, WHEN ANALYZED, NO SUCH C ASH WAS AVAILABLE IN THE SAID BANK ACCOUNT ON 27/05/2008 TO EXPLAIN T HE SOURCE OF CASH DEPOSIT MADE BY THE APPELLANT AT RS. 13,60,000/- ON 27/05/2008. SHRI BHIMABHAI DEVRAJBHAI LADANI COULD NOT SUBSTANTIATE THE AVAILABILITY OF CASI WITH HIM TO THE TUNE OF RS. 9,35,500/- WITH AN Y COGENT EVIDENCE. THEREFORE, THE ASSESSING OFFICER IS OF THE VIEW THA T MERE PRODUCTION OF AFFIDAVIT DO NOT PROVE THE CREDITWORTHINESS OF A PE RSON, WHO MAKES IT. HE REJECTED THE EXPLANATION GIVEN AND ADDED BACK THIS AMOUNT TO THE INCOME RETURNED. THAT THE APPELLANT HAS RECEIVED A CASH LOAN OF RS . 1,00,000/- FROM HIS- WIFE. IT IS CLAIMED THAT THE APPELLANT'S WIFE HAS R ECEIVED A CHEQUE FROM EMPLOYEES COOPERATIVE MANDALI AND THEY WITHDRAWAL T HERE FROM REPRESENTS THE LOAN GIVEN. HOWEVER, SINCE NO EVIDEN CE WAS PRODUCED BEFORE THE ASSESSING IN SUPPORT OF THE CLAIM MADE, THE EXPLANATION GIVEN BY THE APPELLANT IS REJECTED AND THE SAME WAS ADDED BACK TO THE INCOME RETURNED AS UNEXPLAINED INCOME. THAT AN AMOUNT OF RS. 2,50,000/- HAS BEEN DRAWN F ROM THE BANK ACCOUNT OF THE APPELLANT WHERE SALARIES ARE CREDITED. HOWEV ER, ON EXAMINATION OF SUCH DEBIT, THE ASSESSING OFFICER HAS FOUND THAT TH ERE WAS A GAP OF ABOUT 8 MONTHS BETWEEN THE WITHDRAWAL FROM THE SALARY ACC OUNT AND THE DEPOSIT MADE IN THE BANK ACCOUNT WHICH IS UNDER EXA MINATION. HE ITA NO. 536/RJT/14 [SHRI VITHALBHAI B. LADANI VS. I TO] A.Y. 2009-10 - 3 - REJECTED THE EXPLANATION GIVEN BY THE APPELLANT AND THE SAME WAS ADDED BACK AS UNDISCLOSED INCOME OF THE APPELLANT. THAT AN AMOUNT OF RS. 70,000/- HAS BEEN RECEIVE D FROM THE SALE PROCEED OF THE AGRICULTURAL PRODUCE (CHANA). THIS EXPLANATI ON IS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE APPELLANT NEVER DECLARED THE AGRICULTURAL INCOME IN EARLIER YEARS AND THE SAME W AS ADDED BACK AS UNDISCLOSED INCOME OF THE APPELLANT. 5. AS CAN BE SEEN FROM THE ABOVE, THE APPELLANT MIS ERABLY FAILED TO SUBSTANTIATE SOURCE OF CASH DEPOSIT OF RS. 13,55,500/-., AS NO E VIDENCE IS PRODUCED BEFORE THE ASSESSING OFFICER IN SUPPORT OF THE CLAIM MADE. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 13,55,500/- WHICH INCLUDES THE ABOV E FOUR COMPONENTS ON ACCOUNT OF UNDISCLOSED SOURCE OF INCOME. INSTEAD OF CONSIDERIN G ONLY AN AMOUNT OF RS. 13,55,500/-, THE ASSESSING OFFICER SHOULD HAVE CONS IDER THE PEAK CREDIT OF RS. 14,28,8817- FOR THE ADDITION. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS, SHRI K. G. FUMAKIA, ADVOCATE, APPEARING FOR THE APPELLANT HAS MADE WRITTEN SUBMIS SIONS ON 16/01/2014, WHEREIN IT IS NOTICED MORE OR LESS SIMILAR EXPLANATION IS GIVE N AS WAS SUBMITTED BEFORE THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. TH E EXPLANATION GIVEN BY THE APPELLANT LACKS CREDENCE. MERE FILING OF AFFIDAVIT BY THE FATHER OF THE APPELLANT TO SUBSTANTIATE THE SOURCE OF CASH DEPOSITS MADE IN TH E BANK ACCOUNT TO THE TUNE OF RS. 9,35,500/- IS NO EVIDENCE AS IT IS COLLUSIVE AND SE LF-SERVING IN NATURE. THE ASSESSING OFFICER HAS GIVEN A CLEAR FINDING IN THE ASSESSMENT ORDER THAT SHRI BHIMABHAI DEVRAJBHAI LADANI HAS FAILED TO EXPLAIN AS TO WHERE THE SAID MONEY CAME FROM. HE SIMPLY STATED THAT THE SAID AMOUNT OF RS. 9,35,500/ - COMES FROM HIS PAST SAVINGS EMANATING FROM HIS AGRICULTURAL INCOME AND ALSO FUN DS RECEIVED FROM HIS DISEASED WIFE SMT. PURIBEN BHIMABHAI LADANI. WITHOUT ANY SUP PORTING EVIDENCE, SUCH EXPLANATION CANNOT BE ACCEPTED AS THE CREDITWORTHIN ESS OF SHRI BHIMABHAI DEVRAJBHAI LADANI REMAINED UNPROVED, SO ALSO THE .G ENUINENESS OF THE TRANSACTION REMAINS A SUSPECT. SIMILARLY, THE EXPLANATION GIVEN BY THE APPELLANT TO THE EFFECT THAT AN AMOUNT OF RS. 1,00,000/- IS RECEIVED FROM HIS WI FE, AN AMOUNT OF RS. 2,50,000/- FROM THE WITHDRAWAL FROM HIS SALARY HANK ACCOUNT AN D THAT RS. 70,000/- IS FROM AGRICULTURE IS NOT ACCEPTABLE AS THERE IS NO EVIDEN CE WITH THE APPELLANT TO BACK SUCH EXPLANATION. 7. AS CAN BE SEEN FROM THE IMPUGNED BANK ACCOUNT, T HE TOTAL CASH DEPOSITS AMOUNTED TO RS. 31,34,238/-, BUT THEN THE PEAK CASH CREDIT OF RS. 14,28,881/- IS REQUIRED TO BE CONSIDERED FOR THE ADDITION. VIDE TH IS OFFICE LETTER DATED 02/07/2014, THE APPELLANT IS ASKED TO EXPLAIN AS TO WHY NOT THE PEAK CASH CREDIT OF RS. 14,28,881/- BE ADDED TO THE INCOME RETURNED AS AGAINST THE ADDI TION MADE AT RS. 13,55,500/- (RS. 9,35,500+RS. 70,000+RS. 100,000+RS. 2,50,000), WHIC H RESULTS IN ENHANCEMENT OF RS.73,381/-, BY 10/07/2014. THERE IS NO RESPONSE FR OM THE APPELLANT TO THE NOTICE OF ENHANCEMENT ISSUED. THEREFORE, I DIRECT THE ASSESSI NG OFFICER TO MAKE ADDITION OF RS.14,28,881/- ON ACCOUNT OF UNEXPLAINED SOURCE OF INCOME OF PEAK CASH CREDIT IN THE IMPUGNED BANK ACCOUNT U/S.68 OF THE IT ACT, 1961. THIS GROUND OF APPEAL IS DISMISSED. 3. CASE FILE SUGGESTS THAT THE ASSESSEE HAS FILED A DDITIONAL EVIDENCE AS WELL IN THE NATURE OF COPY/BANK PASS BOOK IN HIS MOTHER SMT . PURIBEN BHIMJIBHAI ITA NO. 536/RJT/14 [SHRI VITHALBHAI B. LADANI VS. I TO] A.Y. 2009-10 - 4 - LADANIS NAME FOR THE PERIOD FROM 15.09.2000 TO 07. 02.2007. THE SAME IS NOT FOUND TO BE RELEVANT SINCE WE ARE DEALING WITH ASSE SSMENT YEAR 2009-10. DOCUMENTS AT SL. NOS. 2 TO 4 THEREAFTER INDICATE AS SESSEES FATHER SHRI BHIMJI DEVRAJ LADANIS NAME IN PAGES 8 TO 31 REGARDING VAR IOUS AGRICULTURAL LANDS. WE SOUGHT TO KNOW THE EXACT LAND OWNERSHIP. LEARNED C OUNSEL REPLIES THAT ASSESSEES FATHER HAD AGRICULTURAL LANDS MEASURING 3.8 ACRES I N VILLAGE KHORASA, REVENUE ESTATE AS PER GRAM PANCHAYAT CERTIFICATE. NEXT DOC UMENT SMT. PURIBEN BHIMJIBHAI LADANIS PENSION DOCUMENT FOLLOWED BY S.B.I. CERTIF ICATE DATED 06.09.2017 THAT THE ASSESSEE HAD FILED A PERSONAL LOAN OF RS.2LACS FROM ITS TOWER ROAD BRANCH AT JUNAGADH. LEARNED DEPARTMENTAL REPRESENTATIVE VEHE MENTLY SUBMITS THAT THE IMPUGNED ADDITIONAL EVIDENCE IS NOT ADMISSIBLE AT T HIS BELATED STAGE WITHOUT ANY RELEVANCE THEREOF IN FACTS OF THE INSTANT CASE. TH E REVENUE THEREAFTER PLEADS TO SUPPORT THE IMPUGNED ADDITION MADE ON PEAK CREDIT B ASIS ON MERITS. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS ON ADDITIONAL EVIDENCE ASPECT AS WELL AS QUA CORRECTNE SS OF THE IMPUGNED ADDITION. WE COME TO ADDITIONAL EVIDENCE ISSUE FIRST. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSEE SEEKS TO PLACE ON RECORD HIMSELFS AND HIS PARENTS ASSETS / FINANCIAL DETAILS IN SUPPORT OF THE PLEA THAT SOME OF THE DEP OSITS ARE ATTRIBUTED TO HIS FATHER AS WELL AS MOTHER TO THE EXTENT INDICATED IN PRECED ING PARAGRAPHS. WE THEREFORE ADMIT THE SAID ADDITIONAL EVIDENCE FOR APPROPRIATE ADJUDICATION OF THE MATTER. THERE ARE TWO OPTIONS AVAILABLE TO US AT THIS STAGE . THE FIRST ONE OF COURSE IS THAT WE OUGHT TO REMIT THE ISSUE BACK TO THE ASSESSING A UTHORITY FOR FACTUAL VERIFICATION. WE HOWEVER FEEL IN THE PECULIAR FACTS OF THE INSTAN T CASE THAT A LOT OF TIME HAS ALREADY ELAPSED SINCE THE IMPUGNED ASSESSMENT YEAR 2009-10. WE THEREFORE ADMIT THE ADDITIONAL EVIDENCE HEREINABOVE OURSELVES TO DE CIDE THE ISSUE WITHOUT REMITTING THE CASE BACK TO THE ASSESSING OFFICER. THE ASSESSEES ABOVE ADDITIONAL DOCUMENTS NOWHERE PROVED THE LINKAGE BETWEEN THE IM PUGNED CASH DEPOSITS RECEIVED FROM HIS MOTHER AS WELL AS THE PERSONAL LO AN OF RS.2LACS OBTAINED FROM THE STATE BANK OF INDIA (SUPRA). THERE IS NO DIREC T NEXUS FORTHCOMING FROM THE CASE FILE. WE FIND THAT THE ONLY RELIEF WHICH CAN BE GRANTED TO THE ASSESSEE IS THAT ITA NO. 536/RJT/14 [SHRI VITHALBHAI B. LADANI VS. I TO] A.Y. 2009-10 - 5 - THE LOWER AUTHORITIES HAVE REJECTED HIS FATHERS CA SE TO HAVE GIVEN THE SUM IN QUESTION OF RS.9,35,500/-. THEY HAVE NOT GRANTED C REDIT OF AGRICULTURAL INCOME ALLEGEDLY DERIVED FROM HIS LANDS MEASURING 3.8 ACRE S. WE THEREFORE CONCLUDE THAT LARGER INTEREST OF JUSTICE WOULD BE MADE IN CASE AN ESTIMATED CREDIT OF AGRICULTURAL INCOME AMOUNTING TO RS.2,50,000/- ON THUMB RULE BAS IS IS GRANTED IN PECULIAR FACTS OF THE CASE. THE IMPUGNED ADDITION OF RS.14,28,881/ - IS THEREFORE DELETED TO THE EXTENT OF RS.2,50,000/- AND THE BALANCE ADDITION AM OUNT IS ACCORDINGLY AFFIRMED. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF MARCH, 2018.] SD/- SD/- (PRADIP KUMAR KEDIA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD: DATED 20/03/2018 TRUE COPY S.K.SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT