The ITO, 3(1), Indore V. Smt. Leela Banke, Indore

ITA 539/IND/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98946 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 15-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: S N AGRAWAL; PANKAJ MOGRA CAS
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.539/IND/2013 A.Y. : 2008-09 ITO, 3(1) SMT. LEELA BANKE, INDORE. VS INDORE. APPELLANT RESPONDENT P.A.N. NO A CDPB7295B APPELLANT BY SHRI G. S. GAUTAM, DR RESPONDENT BY SHRI S.N. AGRAWAL AND SHRI PANKAJ MOGRA, CAS DATE OF HEARING : 30 .0 7 .2015 DATE OF PRONOUNCEMENT : 01 .09.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE, DATED 30.04.2013 FOR THE ASSES SMENT YEAR 2008-09. 2. GROUND NO. 1 READS AS UNDER :- 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS.28,00,000/- MADE BY THE AO U/S 69 OF THE I.T.ACT ON ACCOUNT OF UNEXPLAINED CASH PAYMENT OF RS. 28,00,000/- FOR PURCHASE OF PROPERTY. 1.1 WHILE HOLDING SO, THE ID.CIT(A) FAILED TO APPRECIATE THAT THE PAYMENT OF RS. 28 LACS IN CASH WAS NOT AT ALL DISCLOSED IN THE REGISTERED DEED WHICH WAS DETECTED BY AO ON BASIS OF TEP. 1.2 WHILE HOLDING SO, THE ID. CIT(A) FURTHER ERRED IN CONSIDERING THE SOURCE OF CASH PAYMENT OF -: 3: - 3 RS. 28 LACS OUT OF THE DEBIT OF RS. 47,77,696/- AS APPEARING IN THE CAPITAL ACCOUNT OF THE ASSESSEE FOR THE YEAR ENDED 30.03.2007 WHEN AS PER THE BALANCE SHEET OF THE CONSOLIDATED FINANCIAL STATEMENT OF ASSESSEE THERE WAS CASH IN HAND OF RS. 47,41,801/- AVAILABLE WITH THE ASSESSEE ON 30.03.2007 RULING OUT THE CONTENTION OF ASSESSEE THAT CASH IN HAND WAS FORMED OUT OF WITHDRAWALS FROM CAPITAL ACCOUNT FOR PURPOSE OF INVESTMENT IN PROPERTY. 1.3 WHILE HOLDING SO THE ID. CIT(A) FURTHER ERRED IN NOT APPRECIATING THAT THE CAPITAL OF THE ASSESSEE AS PER THE REGULAR BUSINESS WAS OF RS. 26,60,129/- WHEN AS PER THE CONFRONTED ASSESSEE RELIED ON ' CONSOLIDATED BALANCE SHEET BY FILING SAME BEFORE ID. CIT(A) HAVING FINANCIAL TRANSACTION MUCH MORE THAN THE TRANSACTION IN REGULAR BOOKS WHICH REMAINED TO BE EXAMINED IN THIS CASE. -: 4: - 4 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER. 4. IN THIS CASE A TAX EVASION PETITION WAS RECEIVED I N THIS OFFICE WHICH REVEALS THAT SMT. LEEAL BANKE W/O SHRI GOPAL BANKE RESIDENT OF M-148, STADIUM GROUND NANDA NAGAR , INDORE HAS PURCHASED A HOUSE SITUATED AT FG-21,SCHE ME NO.54, INDORE FOR TOTAL CONSIDERATION OF RS.50,25,0 00/- BUT SHE GOT IT REGISTERED FOR RS.22,25,000/- ONLY. SHE PAID RS.28,00,000/- AS CASH WHICH IS NOT DISCLOSED IN RE GISTERED DEED. IN THIS WAY SHE TRIED TO EVADE STAMP DUTY AND INCOME TAX BY FURNISHING INACCURATE PARTICULARS OF HER INC OME. THE COMPLAINER HAS FURNISHED A COPY OF SALE AGREEMENT D ATED 04- 06-2007 , A COPY OF SALE DEED, PHOTOCOPY OF CHEQUES (4), A REPORT OF SIGNATURE EXPERT AND A PHOTOGRAPH OF HOUS E AT FG- 21,SCHEME NO.54,INDORE . ACCORDINGLY, THE CASE WAS SELECTED FOR SCRUTINY, THE ASSESSEE VIDE THIS OFFICE LETTER DATED 22-04- 2010 WHICH WAS SERVED UPON ASSESSEE ON 23-04-2010 R EQUIRED TO EXPLAIN THE REASON, WHY PAYMENT OF RS. 50,25,000 /-WAS MADE TO THE PURCHASER WHEN PROPERTY WAS PURCHASED F OR 22,25,000/-ONLY. HE WAS ALSO REQUIRED TO EXPLAIN, T HE NATURE -: 5: - 5 AND SOURCE OF CASH PAYMENT OF RS. 28,00,000/-WITH P OSITIVE EVIDENCES THEREOF . HE WAS ALSO REQUIRED TO EXPLAIN WHY CASH PAYMENT OF RS.28,00,000/-MAY NOT BE TREATED AS UNEX PLAINED INVESTMENT OF PROPERTY AND BE ADDED IN YOUR TOTAL I NCOME U/S 69 OF THE INCOME-TAX ACT, 1961, AND PENALTY PROCEED INGS U/S 271(1)(C) MAY NOT BE INITIATED FOR FURNISHING INACC URATE PARTICULARS OF INCOME. 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER :- 3.3 I HAVE CONSIDERED THE APPELLANTS AR SUBMISSIO N AND THE AOS OBSERVATIONS. THE APPELLANT HAS ADMITTED DURING THE COURSE OF APPELLATE PROCEEDINGS THAT SHE HAD PAID AN AMOUNT OF RS. 22,25,000/- BY CHEQUE AND AN AMOUNT OF RS. 28,00,000/- VIDE CASH FOR PURCHASE OF RESIDENTIAL HOUSE. THE ONLY ISSUE T HAT REMAINS IS REGARDING THE SOURCE OF CASH PAYMENT MADE BY THE APPELLANT. DURING THE ASSESSMENT PROCEEDINGS ONLY, AS MENTIONED IN THE ASSESSMENT ORDER ALSO, THE APPELLANT HAD SUBMITTED THAT THE CA SH -: 6: - 6 PAYMENT OF RS. 28,00,000/- WAS MADE BY HER OUT OF PERSONAL CASH IN HAND WHICH SHE HAD WITH HER FROM THE DRAWINGS MADE IN THE PREVIOUS F.Y. AND ACCORDINGLY, THE SAME WAS APPEARING IN HER CAPITAL ACCOUNT AS DEBIT OF RS. 47,77,696/-. SHE REQUESTED SOME MORE TIME FOR SUBMITTING THE DETAILED COPY OF THE CAPITAL ACCOUNT. THE AO DID NOT ACCEPT THIS EXPLANATION BY STATING THAT THE APPELLANTS EXPLANATION WAS NOT SATISFACTORY. HE HAS NOT MENTIONED ANY REASONS FOR REACHING SUCH CONCLUSION. 3.3.1 NOW DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS PROVIDED FULL DETAILS OF CASH WITHDRAWALS MADE BY HER IN THE EARLIER F.Y. WHICH WAS ALSO DEBITED TO HER CAPITAL ACCOUNT. SHE HAD AL SO PROVIDED THE COPIES OF BANK STATEMENTS IN SUPPORT O F SUCH WITHDRAWALS HER EXPLANATION THAT SHE WAS SEARCHING FOR HOUSE FOR LAST 6 MONTHS AND FOR THIS REASONS CASH WAS WITHDRAWN IN EARLIER PREVIOUS YEAR IS ALSO A PLAUSIBLE EXPLANATION. NEVERTHELESS, ONCE -: 7: - 7 THE APPELLANT HAS ESTABLISHED THAT SHE HAD SUFFICIE NT CASH IN HAND AT THE TIME OF MAKING THE PAYMENT OF RS. 28,00,000/- FOR PURCHASE OF HOUSE, NO ADDITION U/S 69A CAN BE MADE FOR SUCH PAYMENT. IN HIS REMAND REPORT, THE AO HAS NOT OFFERED ANY COMMENTS ON THIS FACTS. HIS ONLY OBJECTION IS THAT THE EVIDE NCE OF THE AGREEMENT FOR PAYMENT OF CASH IS SUFFICIENT PROOF IN SUPPORT OF THE UNDER STATEMENT OF THE SOLD PROPERTY RESULTING IN THE CONCEALMENT OF INCOME AND THE STATEMENT OF AFFAIRS SUBMITTED BY THE ASSESSEE AT THIS STAGE ARE AFTER THOUGHT. AS ALREADY STATED ONC E THE APPELLANT HAS ESTABLISHED THAT THE PAYMENT OF CASH PART OF THE PURCHASE WAS MADE OUT OF HER DISCLOSED CASH IN HAND, NO ADDITION IS WARRANTED DESPITE THE FACT OF UNDER STATEMENT OF PURCHASE CONSIDERATION IN THE REGISTERED DEED. ON THE CONTRA RY, THIS INFORMATION CONSTITUTE A VALID AND GOOD GROUND FOR INITIATION OF PROCEEDINGS IN THE HANDS OF THE SELLERS, IF THEY HAVE NOT DISCLOSED THE ENTIRE PART OF SALE CONSIDERATION INCLUDING THE CHEQUE - AND CASH -: 8: - 8 PART, IN THEIR RETURN OF INCOME. HENCE, THE ADDITIO N MADE BY THE AO IS DIRECTED TO BE DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. THE LD. AUTHORIZED REPRESENTATIVE RELIED U PON THE ORDER OF LD. CIT(A) AND LD. SENIOR D.R. RELIED UPON THE ORDER OF AO. THE AO HAS ADDED RS. 28 LACS AS AMOUNT, WHICH W AS ADDED U/S 69A OF THE ACT, ON THE GROUND THAT THE AS SESSEE HAS PURCHASED THE HOUSE FOR CONSIDERATION OF RS. 50,25, 000/- AND SHE HAS REGISTERED IN REGISTRY AT RS. 22,25,000/-. THE ASSESSEE PAID RS. 28 LACS IN CASH, WHICH WAS NOT DISCLOSED I N REGISTRY. THEREFORE, THIS RS. 28 LACS WAS TREATED AS UNEXPLAI NED INVESTMENT IN THE PROPERTY. THE LD. COUNSEL FOR TH E ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS PAID CASH FROM HER INDIVIDUAL ACCOUNT. THE ASSESSEE HAS SUFFICIENT CAS H IN HER HAND AND THE ASSESSEE WAS ABLE TO EXPLAIN THAT SHE HAD SUFFICIENT BALANCE IN HER BANK. THE LD. CIT(A) HAS CONSIDERED THAT THE ASSESSEE HAS SHOWN THAT SHE HAS MADE THE P AYMENT IN EARLIER YEARS. THEREFORE, THE LD. COMMISSIONER W AS OF THE VIEW THAT SHE HAS ALREADY PAID THIS AMOUNT TO THE S ELLER. -: 9: - 9 THEREFORE, THE ADDITION MUST HAVE BEEN MADE IN THE HANDS OF SELLER AND NO ADDITION CAN BE MADE FOR SUCH PAYMENT IN THE HANDS OF THE ASSESSEE. WE ARE OF THE VIEW THAT THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION. OUR INTERFERENCE IS NOT CA LLED FOR. 7. GROUND NO.2 READS AS UNDER :- 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 13,22,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED DEPOSIT OF RS. 13,22,000/- IN HER CAPITAL ACCOUNT. 2.1. WHILE HOLDING SO THE ID CIT(A) FAILED TO CONSI DER THE SPECIFIC FINDING OF THE AO IN THE REMAND REPORT THAT THE CREDIT OF RS. 13,22,000/- WITH THE NATURE AND SOURCE OF SAID DEPOSITS REMAINED TO BE SUPPORTED WITH POSITIVE EVIDENCE. 2.2 WHILE HOLDING SO, THE ID CIT(A) FAILED TO APPRECIATE THAT CREDITS WERE SHOWN TO BE ARISING OUT OF THE BANK ACCOUNTS BUT NO SUCH BANK ACCOUNTS WAS REFLECTED IN THE BALANCE SHEET OF THE -: 10: - 10 ASSESSEE FOR THE YEAR ENDING 31.03.2007 AND THE RETRIEVAL OF THE LOANS THROUGH THE PERSONAL BOOKS O F ACCOUNTS BEING NOT PART OF THE REGULAR BOOKS REMAINED TO BE EXAMINED ALONG WITH THE CLAIM OF CASH DEPOSIT IN BUSINESS OF RS. 3,02,000/- FROM THE CASH IN HAND AVAILABLE IN PERSONAL BOOKS. 8. THE ASSESSEE HAS SUBMITTED THE CAPITAL ACCOUNT BEFORE THE AO AND THE AO HAS VERIFIED THE CAPITAL A CCOUNT. IN THE CAPITAL ACCOUNT, THE AO FOUND THAT THERE WAS CR EDIT OF RS. 13,22,000/- AS DEPOSIT IN CAPITAL ACCOUNT. THEREFOR E, THE AO TRIED TO VERIFY THE NATURE AND SOURCE OF THE DEPOSI T. THE ASSESSEE HAS SUBMITTED THE DOCUMENTS IN SUPPORT OF HIS DEPOSIT AND THE ASSESSEE SUBMITTED THAT RS. 1,61,81 0/- ON HIS LIC MONEY BACK RECEIVED FROM KOTAK LIFE INSURANCE. SIMILARLY, IN CAPITAL ACCOUNT, THE CASH DEPOSIT OF RS. 3,02,00 0/- FROM THE CASH IN HAND AVAILABLE IN PERSONAL BOOKS, RS. 4,64. 900/- AND RS. 10,076/- REPRESENTED BANK BALANCE OF THE COSMOS COOP BANK LIMITED AND THE SARASWAT COOP. BANK LIMITED RESPECTIVELY, RS. 2,15,245.76 AND RS. 3,30,000/- RE PRESENTED -: 11: - 11 BEING PERSONAL LOAN, BUT THE AO WAS NOT SATISFIED A ND HE ADDED IN THE HANDS OF THE ASSESSEE. 9. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS ALLOWED THE CLAIM BY OBSERVING AS UNDER :- 4.2 THE AO IN HIS ORDER HAS NOT ACCEPTED THE EXPLANATION FILED BY THE APPELLANT BY STATING THAT THE EXPLANATION IS NOT SUPPORTED BY DOCUMENT / POSITIVE EVIDENCE. IN THIS REGARD, FROM THE COPY OF LETTER SUBMITTED BY THE APPELLANT TO THE AO DATED 25.05.2010, IT IS SEEN THAT AFTER PROVIDING THE EXPLANATION , THE APPELLANT HAD ALSO REQUESTED THAT IF NEED BY OF ANY OTHER DOCUMENT / INFORMATION, THE SAME WILL BE PROVIDED TO THE AO WITHIN THE REASONABLE TIME. THE AO HAS NOT ASKED FOR ANY SUCH DETAILS AND HAS PASSED THE ASSESSMENT ORDER ON 31.05.2010. NOW, THE SUPPORTING DOCUMENTS HAVE BEEN PROVIDED BY THE APPELLANT IN THE FORM OF COPIE S OF BANK STATEMENTS AND OTHER DOCUMENTS WHICH WERE FORWARDED TO THE AO FOR HIS COMMENTS. THE AO IN HIS REMAND REPORT HAS NOT MADE ANY COMMENTS ON SUCH -: 12: - 12 DOCUMENTS. FROM THE DOCUMENTS FURNISHED BY THE APPELLANT, HER EXPLANATIONS FILED DURING THE COURSE OF ASSESSMENT PROCEEDING, HAVE BEEN FOUND TO BE CORRECT. HENCE, THE ADDITION MADE BY THE AO IS DIRECTED TO BE DELETED AND THIS GROUND OF APPEAL I S ALLOWED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE IN HIS CAPITAL ACCOUNT HA S FOLLOWING BALANCE, WHICH WAS SHOWN AS UNDER :- S.NO PARTICULARS AMOUNT (RS) 1 CASH TRANSFER FROM INDIVIDUAL ACCOUNT TO FIRMS ACC OUNT 3,02,000 2 BANK BALANCE WITH COSMOS CO - OP BANK LTD AS ON 31 - 03 - 2007 4,64,900 3 BANK BALANCE WITH SARASWAT CO - OP BANK LTD AS ON 31.03.2007 10,076 4 GOPAL BANKE [HUF] TRANSFERRED FROM THE BOOK OF INDI VIDUAL BOOK TO THE BOOK OF THE FIRM AS ON 31.03.2007 2,15,246 5 NEHA BANKE TRANSFERRED FROM THE BOOK OF INDIVIDUAL BOOK TO THE BOOK OF THE FIRM AS ON 31.03.2007 3,30,000 13,22,222 11. DURING THE COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE HAS PRODUCED THE COMPILATION ON PAGE S 92 TO 93 BY WAY OF PAPER BOOK AND FROM THE PERUSAL OF BAL ANCE SHEET -: 13: - 13 AS ON 31 ST MACH, 2007, THE AMOUNT TRANSFERRED FROM BALANCE FROM INDIVIDUAL TO BALANCE SHEET OF BUSINESS HAS BE EN DULY RECONCILED. THEREFORE, THIS AMOUNT CANNOT BE ADDED. MOREOVER, THE ASSESSEE HAS ALSO CLARIFIED THAT THIS AMOUNT WA S CREDITED IN HIS CAPITAL ACCOUNT BY WAY OF INTERNAL ENTRIES A ND THAT IS PRODUCED BEFORE US AND WE HAVE VERIFIED IT AND WE A RE OF THE VIEW THAT LD. CIT(A) AFTER VERIFICATION HAS DELETED THE ADDITION. THEREFORE, OUR INTERFERENCE IS NOT REQUIRED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 1 ST SEPTEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 1 ST SEPTEMBER, 2015. CPU* 278