SHRI ANUP SAXENA, Bhopal V. THE ITO 2(1), Indore

ITA 540/IND/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5741 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: N D PATWA CAS
• Keywords: Unexplained cash credit; Business income; Salary income
• Section: 44AD; 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI ANUP SAXENA, 12, GAUTAM NAGAR, NEAR NEHRU NAGAR, BHOPAL PAN:ANHPS1237P VS. INCOME-TAX OFFICER, WARD 2(1), BHOPAL APPELLANT RESPONDENT APPELLANT BY SHRI ASHISH GOYAL AND SHRI N. D. PATWA, CAS RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 24.08.2016 DATE OF PRONOUNCEMENT 19.09.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, RAIPUR [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 28.03 .2013. THIS APPEAL PERTAINS TO ASSESSMENT YEAR 2008-09 AS AGAIN ST APPEAL DECIDED IN RESPECT OF ASSESSMENT ORDER DATED 30.12. 2010, PASSED U/S 143(3) OF THE INCOME-TAX ACT, 1961. [HER EINAFTER REFERRED TO AS THE AO]. I.T.A. NO.540/IND/2013 ASSESSMENT YEAR: 2008-09 ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 2 OF 9 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL : - 1. THAT THE LD. CIT(A) ERRED IN SUSTAINING THE ASSESSMENT WHICH IS BARRED BY LIMITATION, PASSED WITHOUT JURISDICTION, BAD IN LAW, CONTRARY TO MATERIAL LAW AND WAS ILLEGAL. 2. THE LD. CIT(A) ERRED IN SUSTAINING ADDITION OF RS. 32,82,978/- AS UNEXPLAINED CREDIT AND ADDING THE SAME U/S 68. 3. WE ARE CONSIDERING THE ABOVE GROUNDS TOGETHER 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALA RY AND COMMISSION AND REAL ESTATE BUSINESS. THE RETURN OF INCOME WAS FILED ON 29.04.2008 DECLARING INCOME OF RS. 2,35 ,500/-, WHICH WAS ASSESSED, U/S 143(3) ON 30.12.2010 BY DETER MINING TOTAL INCOME AT RS. 42,43,478/-, WITH AN ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT OF RS. 40,07,978/- WITHIN THE MEANING OF SECTION 68 OF THE INCOME-TAX ACT, 1961. THE ASSESSE E WAS ASKED TO FURNISH EXPLANATION OF CASH DEPOSITS AMOUN TING TO RS. 24,64,300/- ALONGWITH THE DOCUMENTARY EVIDENCE A ND ALSO TO FURNISH DETAILS OF ALL MONETARY TRANSACTIONS MAD E WITH M/S. ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 3 OF 9 AKSHMIT MULTIPLE (P) LIMITED, BHOPAL, IN WHICH THE A SSESSEE IS A DIRECTOR. THE ASSESSEE HAS ALSO NOT FURNISHED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF CASH DEPOSIT AMO UNTING TO RS. 15,43,678/- MADE IN THE ABOVESAID BANK ACCOU NT. ACCORDINGLY, THE TOTAL DEPOSITS OF RS. 40,07,978 ( INCLUDING CASH DEPOSIT OF RS. 24,64,300/- IN THE SAVING BANK ACCOUNT) WERE TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE ACT . THE ASSESSEE HAS FILED THE APPEAL BEFORE THE LD. CIT(A) . THE CIT(A) OBSERVED THAT THE PRECISE SUBMISSION OF THE ASSESSE E HE HAD RECEIVED CERTAIN SUMS PERTAINING TO COMPANY VIZ. M /S. AKSHMIT MULTIPLE (P) LIMITED AND THAT IT HAD TRANSF ERRED THE AMOUNT RECEIVED ON BEHALF OF THE COMPANY TO THE SAI D COMPANY THROUGH PROPER BANKING CHANNEL. FROM THE RE CORDS, IT WAS NOTICED THAT THE ASSESSEE HAD DEPOSITED CASH AGGREGATING TO RS. 24,64,300/- IN HIS BANK ACCOUNT, BUT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE SOURCE AND NATURE OF CASH DEPOSIT IN THE SAID BANK ACCOUNT. THE LD. CIT( A) OBSERVED THAT THE ASSESSEE HAS PLACED A COPY OF BANK STATEME NT OF M/S. AKSHMIT MULTIPLE (P) LIMITED. FROM THE PERUSAL OF B ANK ACCOUNTS OF THE SAID COMPANY HAVING ACCOUNT NO. 913 WITH ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 4 OF 9 ANDHRA BANK, M.P. NAGAR, BHOPAL. THE SAID COMPANY H AS DEBITED A SUM OF RS. 1.25 LAKHS AND RS. 10,000/- ON 23.06.2007 AND 25.06.2007 VIDE CHEQUE NO. 0147164 A ND 014716 RESPECTIVELY. HOWEVER, NO SUCH CORRESPONDIN G ENTRIES WERE FOUND IN THE LEDGER OF M/S. AKSHMIT MULTIPLE (P ) LIMITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. SIMILARLY , THE COMPANY HAS REVEALED THE PAYMENT OF RS. 2.70 LAKHS ON 05.11.2007 TO THE ASSESSEE. HOWEVER, NO SUCH CORRE SPONDING RECEIPT WAS FOUND IN THE BOOKS OF ACCOUNTS OF THE AS SESSEE. THEREFORE, THE LD. CIT(A) HAS HELD THAT THE DETAILS FURNISHED BY THE ASSESSEE ARE NOT RELIABLE AND NO REASONABLE CON CLUSION CAN BE ARRIVED AT ON THE BASIS OF THE EVIDENCES FURNISH ED BY THE ASSESSEE DUE TO THE ABOVE NOTED DISCREPANCIES. HOWEV ER, THE CIT(A) FURTHER NOTED THAT THE ASSESSEE HAD RECEIVED SALARY FROM THE AFORESAID COMPANY AMOUNTING TO RS. 1,95,00 0/-, WHICH HAS BEEN ALREADY TAXED AS SALARY INCOME IN THE HANDS OF THE ASSESSEE. FURTHER, THE ASSESSEE HAS RECEIVED RS . 5,30,000/- ON 01.10.2007 FROM THE AFORESAID COMPANY AND SAID ENTRIES APPEARING IN THE AFORESAID COMPANYS L EDGER AS MAINTAINED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS . ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 5 OF 9 ACCORDINGLY, THE LD. CIT(A) HAS ALLOWED RELIEF OF RS . 7,25,000/-( RS. 5,30,000/- + RS. 1,95,000/-) FROM THE TOTAL ADD ITION OF RS. 40,07,078/- (-) RS. 7,25,000/- AND CONFIRMED THE B ALANCE ADDITION OF RS. 32,82,978/-. 5. AGGRIEVED WITH THE ORDER, THE ASSESSEE HAS FILED THE APPEAL BEFORE THIS TRIBUNAL. 6. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT OUT OF TOTAL ADDITION OF RS. 40,07.0 78/-, THE LD. CIT(A) HAS ALLOWED RELIEF OF RS. 7,25,000/- AND CON FIRMED THE BALANCE DEPOSITS AT RS. 32,82,978/-. THE LD. AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT A CHE QUE OF RS. 90,000/- WAS DEPOSITED, WHICH WAS DIS-HONOURED, WHICH I S APPEARING AT PAPER BOOK PAGE NOS. 13, 42 & 43 IN T HE BANK STATEMENT. THEREFORE, IT WAS CONTENDED THAT THERE WAS NO RECEIPT AT ALL. HENCE, THIS AMOUNT SHOULD NOT HAVE BEEN ADDED. 7. AS REGARDS CASH OF RS. 24,64,300/- RECEIVED BY THE ASSESSEE ON BEHALF OF THE COMPANY, THE LD. AUTHORIZ ED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THES E SUMS BELONGED TO THE COMPANY AND THE SAME HAS BEEN OFFER ED AS INCOME IN THE HANDS OF THE COMPANY AND THE CASH REC EIVED ON ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 6 OF 9 BEHALF OF THE COMPANY AS TRANSFERRED BACK TO THE CO MPANY FROM TIME TO TIME. THE ASSESSEE HAS ALSO FILED DETA ILS OF CASH RECEIVED ON BEHALF OF THE COMPANY AND REMITTED TO T HE COMPANY, WHICH IS AS UNDER :- DATE PARTICULARS CASH DEPOSIT PAYMENT MADE 10.08.2007 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 3,75,000 17.09.2007 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 4,40,000 20.09.2007 PAYMENT MADE TO AKSHMIT MULTIPLE PVT.LTD. THROUGH CHEQUE NO. 773235 3,90,000 21.09.2007 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 5,00,000 24.09.2007 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 4,70,000 01.10.2007 PAYMENT MADE TO AKSHMIT MULTIPLE PVT.LTD. THROUGH CHEQUE NO. 773235 14,00,000 21.11.2007 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 25,000 26.11.2007 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 6,44,300 29.11.2007 PAYMENT MADE TO ASKSHMIT MULTIPLE P.LTD. THROUGH CHEQUE NO. 773235 4,00,000 21.01.2008 CASH DEPOSITED ON BEHALF OF AKSHMIT MULTIPLES PRIVATE LIMITED 10,000 TOTAL 24,64,300 21,90,000 8. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED THAT A SUM OF RS. 10,000/- WAS REC EIVED FROM THE COMPANY ON 11.12.2007 AND RS. 10,000/- WAS ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 7 OF 9 RECEIVED ON 21.01.2008 AS REFLECTING IN PAPER BOOK PAGE NO. 42, 84 & 896. THEREFORE, THIS CANNOT BE CONSIDERED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE. THE LD. A UTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED TH AT OUT OF BUSINESS RECEIPTS OF RS. 15,59,725/-, THE ASSESSEE HAS OFFERED BUSINESS RECEIPTS AS HIS INCOME AND OFFERED INCOME OF RS. 1,24,778/- U/S 44AD APPLYING 8% OF CONTRACT RECEIPT S OF RS. 15,59,725/-. THEREFORE, IT WAS CONTENDED THAT NO ADD ITION ON THIS ACCOUNT CAN BE MADE. 9. THE LD. SR. DEPARTMENTAL REPRESENTATIVE RELIED ON T HE ORDERS OF THE LOWER AUTHORITIES. 10. WE HAVE CAREFULLY CONSIDERED THE FACTS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND ALSO GONE THRO UGH THE ASSESSMENT ORDER. WE FIND THAT THE CHEQUE OF RS. 90 ,000/- WAS DEPOSITED IN THE BANK ACCOUNT ON 21.01.2008, AS APPEARING AT PAGE 13, 42 & 43 OF PAPER BOOK, BUT TH E SAME HAS BEEN DISHONOURED BY THE BANK. THEREFORE, WE FIN D THAT THE EXPLANATION OF THE LD. AUTHORIZED REPRESENTATIV E OF THE ASSESSEE AS CORRECT, HENCE ADDITION ON THIS ACCOUNT IS DELETED. WE FURTHER FIND THAT A SUM OF RS. 20,000/- WAS RECEI VED BY CHEQUE OF RS. 10,000/- EACH ON 11.12.2007 AND 21.01 .2008 AS APPEARING AT PAPER BOOK PAGE NO. 42. HENCE, ADDI TION TO ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 8 OF 9 THIS EXTENT IS NOT EXIGIBLE. WE ALSO FIND SOME FORC E IN THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF RS. 1 5,59,725/- RECEIVED BY WAY OF CHEQUE HAS BEEN DULY ACCOUNTED F OR BY THE ASSESSEE, ON WHICH NET INCOME @ 8% GROSS PROFIT ON C ONTRACT RECEIPTS HAS BEEN OFFERED U/S 44AD, WHICH IS EVIDENT FROM THE RETURN OF INCOME AND PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE. THEREFORE, THE ADDITION TO THE EXTENT OF RS. 7,08,678/- IS ALSO NOT SUSTAINABLE IN LAW, CONSIDER ING THE SAME AS BUSINESS RECEIPTS ON WHICH NET PROFIT HAS BE EN DISCLOSED, HENCE IT IS TREATED AS EXPLAINED. ACCORD INGLY, THE ADDITION TO THE EXTENT OF RS. 7,08,678/- IS DELETED . AS REGARDS THE EXPLANATION OF THE ASSESSEE THAT CASH DEPOSIT O F RS. 24,64,300/- WERE MADE ON BEHALF OF THE COMPANY IS A LSO FOUND AS ACCEPTABLE IN THE LIGHT OF CASH FLOW STATE MENT FILED BY THE ASSESSEE. WE FIND THAT OUT OF CASH RECEIPTS BY THE DIRECTOR ON BEHALF OF THE COMPANY, THE SAME WERE RE DEPOSITED THROUGH CHEQUE, IN THE BANK ACCOUNT OF M/S. AKSHMIT MULTIPLE (P) LIMITED, THE COMPANY, IN WHICH THE ASSE SSEE IS DIRECTOR. THESE FACTS REFLECTED FROM THE CHART AS R EPRODUCED ABOVE. THAT OUT OF TOTAL CASH RECEIPTS OF RS. 24,64 ,300/- THE AMOUNT OF RS. 23,98,000/- HAS BEEN TRANSFERRED TO T HE COMPANY BY WAY OF CHEQUE. THE CASH FLOW STATEMENT FIL ED BY THE ASSESSEE ALSO REFLECTS THESE FACTS. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE OF CASH DEPOSITS AMOUNTING TO RS. 24,64,300/-. IN THE LIGHT OF ABOVE DISCUSSION, THE ADDITION OF RS. 32,82,978/- IS FOUN D AS ITA NO.540/I/13 AY:08-09 ANUP SAXENA PAGE 9 OF 9 EXPLAINABLE, HENCE, THE SAME IS DELETED, THEREFORE, GROUND NO. 2 OF APPEAL IS ALLOWED. AS REGARDS GROUND NO.1, THE SAME WAS NOT PRESSED BEING GENERAL IN NATURE AND IS, THEREFO RE, DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 19 TH SEPTEMBER, 2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED : 19 TH SEPTEMBER, 2016. CPU*