Sh. Satish Kapoor, Ambala City V. ITO, Ambala

ITA 554/CHANDI/2013

• Counselvise Citation: 55421514 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 244A; 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 554/CHD/2013 ASSESSMENT YEAR: 2008-09 SHRI SATISH KAPOOR, VS. THE ITO C/O M/S SOHAN LAL BHARAT BHUSHAN WARD 1 AGGARSAIN CHOWK, AMBALA AMBALA CITY PAN NO. ACFPK1316G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 07/07/2015 DATE OF PRONOUNCEMENT: 09/07/2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), PANCHKULA, DT. 02/04/2013 RELATING TO ASSESSMENT YE AR 2008-09. 2. GROUND NO. 1 OF THE APPEAL READS AS UNDER: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 6,00,000 AND RS. 2,50,000/- MADE ON ACCOUNT OF ALLEGED UNEXPLAINED D EPOSITS IN BANK ACCOUNTS IN UTTER DISREGARD OF THE EXPLANAT IONS RENDERED DURING THE COURSE OF BOTH ASSESSMENT AND A PPELLATE PROCEEDINGS WHICH IS ARBITRARY AND UNJUSTIFIED . 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME AT RS. 1,25,084/-. T HE RETURN WAS PROCESSED U/S 143(1)(A) OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S 143( 2) AND 142(1) WERE ISSUED TO 2 THE ASSESSEE. THE ASSESSEE DID NOT MAINTAIN ANY BOO KS OF ACCOUNT AND HIS BANK PASS BOOK WAS CHECKED BY THE AO. 4. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSEE SUBMITTED COPY OF HIS BANK ACCOUNT NUMBER 120201000048181 WIT H THE CENTURION BANK OF PUNJAB (IN SHORT CBOP) FOR THE FINANCIAL YEAR 200 7-08. THE AGGREGATE OF DEPOSITS IN THE SAID BANK ACCOUNT WAS AT RS. 22,18, 139/-. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE DEPOSITS. I N THIS REGARD, THE ASSESSEE SUBMITTED THAT A PERSONAL LOAN OF RS. 7.29 LACS WAS RAISED FROM KOTAK MAHINDRA PRIME, OUT OF WHICH THE SUM OF RS. 7,27,850/- WAS C REDITED IN HIS BANK ACCOUNT ON 29/05/2007 AFTER DEDUCTING THE SUM OF RS. 1150/- TH ERE FROM ON ACCOUNT OF BROKERAGE. IT WAS ALSO EXPLAINED THAT DEPOSITS OF R S. 10,000/- ON 13/04/2007 AND 08/05/2007 ARE ON ACCOUNT OF TRANSFER FROM M/S SOHA N SAREES, AMBALA CITY. AS REGARDS THE OTHER DEPOSITS, IT WAS STATED THAT THES E DEPOSITS ARE OUT OF CASH WITHDRAWALS FROM THE SAID BANK ACCOUNT ITSELF. IT W AS ALSO EXPLAINED THAT THE PEAK AMOUNT OF THE DEPOSITS OF RS. 14,50,000/- IN T HE SAID BANK ACCOUNT DURING THE YEAR WAS ONLY RS. 7,27,850/- AND THE ASSESSEE I NTENDED TO MAKE INVESTMENTS IN SOME PROPERTY, BUT COULD NOT FIND SUITABLE PROPE RTY AND ULTIMATELY THE LOAN WAS PAID BACK. THE AO DID NOT AGREE WITH THE EXPLA NATION OF THE ASSESSEE AND HE ADDED THE SUM OF RS. 6,00,000/- , OBSERVING AS U NDER: 3. THE ABOVE EXPLANATION TENDERED BY THE ASSESSEE IS NOT FOUND TO BE IN CONFORMITY WITH THE TREND OF THE ENTRIES IN THE ASS ESSEES BANK ACCOUNT. AFTER CREDIT OF RS. 7,27,850/- ON 29.5.2007, THE AS SESSEE WITHDREW RS. 2,00,000/- ON 30.05.2007 AND RS. 4,00,000/- ON 11,0 6,2007. AND, FIRST CASH DEPOSIT OF RS. 6,00,000/- HAS BEEN MADE ON 20.7.200 7. HAD THE ASSESSEE SOME BALANCE WITH HIM OUT OF WITHDRAWAL OF RS. 2,00 ,000/- MADE ON 30.05.2007, FURTHER WITHDRAWAL OF RS. 4,00,000/- WO ULD HAVE HARDLY REQUIRED. AND, HAD THE ASSESSEE SOME BALANCE OUT OF THE SECON D WITHDRAWAL OF RS. 4,00,000/- MADE ON 11.06.2007, HE WOULD NOT HAVE TO MAKE FURTHER SMALL PAYMENTS FROM THE BANK ACCOUNT BEFORE THE DEPOSIT O F RS. 6,00,000/-. THE ASSESSEE COULD NOT CORRELATE THE DEPOSITS STATED TO HAVE BEEN MADE FROM THE WITHDRAWALS WITH ANY DOCUMENTARY OR OTHER EVIDE NCE, EXCEPT SIMPLY STATING SO. THEREFORE, I HOLD THAT THE SUM OF RS. 6 ,00,000/- DEPOSITED ON 20.07.2007 IS NOT FROM THE WITHDRAWALS OF RS. 2,00, 000/- & 4,00,000/- MADE ON 30.05.2007 & 11.06.2007 RESPECTIVELY. THEREFORE, THE SUM OF RS. 6,00,000/- DEPOSITED ON 20.072007 IS ADDED TO THE A SSESSEES TOTAL INCOME TREATING IT TO BE HIS INCOME FROM UNDISCLOSED SOURC ES. THE AO FURTHER ADDED A SUM OF RS. 2,50,000/- AS PER PARA 5 OF THE ASSESSMENT ORDER WHICH READS AS UNDER: 5. THEN AFTER, THE ASSESSEE HAS MADE FOLLOWING DE POSITS WHICH TOO ARE TREATED TO BE ASSESSEES INCOME FROM UNDISCLOSE D SOURCE FOR THE REASON SIMILAR TO THOSE DISCUSSED IN PARA 3 ABOVE: 3 DATE AMOUNT(RS) 15.10.2007 10,000 10.11.2007 50,000 24.12.2007 50,000 04.01.2008 50,000 18.02.2008 40,000 03.03.2008 50,000 TOTAL 2,50,000 ACCORDINGLY, AN ADDITION OF RS. 2,50,000/-IS MADE T O THE ASSESSEES TOTAL INCOME ON THIS COUNT. 5. ON APPEAL THE LD. CIT(A) CONFIRMED BOTH THE ADD ITIONS, AND HENCE THE ASSESEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD LD. COUNSEL FOR THE ASSESSEE AND LD . DR AT LENGTH. AT THE VERY OUTSET LD. COUNSEL FOR THE ASSESSEE INVITED MY ATTENTION TO THE COPY OF BANK STATEMENT ( PAGE 4.6 OF ASSESSEES PAPER BOOK) OF C BOP LTD. AND SUBMITTED THAT THE DEPOSIT OF RS. 6,00,000/- ON 20/07/2007 WAS MAD E FROM THE WITHDRAWALS OF RS. 2,00,000/- ON 30/05/2007 AND RS. 4,00,000/- ON 11/0 6/2007 I.E. JUST WITHIN ONE & HALF MONTH BEFORE THE DATE OF DEPOSIT. THE LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT SIMILARLY THE DEPOSIT OF RS. 2.50 LA CS MADE ON DIFFERENT DATES WERE OUT OF THE CASH WITHDRAWALS OF RS. 5.50 LACS MADE A S UNDER: DATE AMOUNT 05/09/2007 2,00,000/- 12/09/2007 2,00,000/- 28/09/2007 1,50,000/- CASH WITHDRAWALS OF RS. 5.50 LACS WERE MADE WITH IN FEW MONTHS BEFORE THE DATE OF DEPOSITS IN THE MONTH OF OCTOBER, NOVEMBER, DECE MBER, JANUARY, FEBRUARY AND MARCH 2007. THE LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE WITHDRAWALS FROM THE BANK ACCOUNT WERE MADE SINCE T HE ASSESSEE INTENDED TO MAKE INVESTMENTS IN SOME PROPERTY, BUT COULD NOT FI ND SUITABLE PROPERTY AND ULTIMATELY THE PERSONAL LOAN TAKEN FROM KOTAK MAHIN DRA PRIME WAS RETURNED. IT IS ALSO STATED THAT THE PEAK AMOUNT OF THE DEPOSIT MAD E WITH CBOP, ADMITTEDLY AMOUNTS TO RS. 7,27,850/- WHICH IS ONLY THE LOAN AM OUNT RAISED FROM KOTAK MAHINDRA PRIME. 7. IN THE INSTANT CASE, THE AO HAS DULY ACCEPTED TH E PERSONAL LOAN TAKEN VIDE CHEQUE FROM KOTAK MAHINDRA PRIME, DEPOSITED IN CBOP. THE AO HAS ALSO 4 ACCEPTED THE CASH WITHDRAWALS MADE BY THE ASSESSEE FROM THE AFORESAID BANK. HOWEVER, THE AO HAS NOT ACCEPTED THE PART OF THE DE POSITS IN THE AFORESAID BANK WITHOUT BRINGING ANY COGENT EVIDENCE ON RECORD , WHICH IS NOT IN ACCORDANCE WITH LAW. THE AO HAS NOT BROUGHT ANY MAT ERIAL ON RECORD TO SHOW THAT THE AMOUNTS WITHDRAWN BY THE ASSESSEE WERE INV ESTED IN ANY OTHER ASSETS. IT IS ALSO RELEVANT TO OBSERVE HERE THAT THERE IS HARD LY ONE & HALF MONTH TIME GAP BETWEEN THE WITHDRAWAL OF THE AMOUNT AND THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. I AM FULLY IN AGREEMENT WITH THIS SUBMISSI ON OF LD. COUNSEL FOR THE ASSESSEE THAT THE AO HAS NO EVIDENCE EITHER ORAL OR DOCUMENTARY TO SHOW THAT THE WITHDRAWALS MADE WERE INVESTED ELSEWHERE AND TH EREFORE, NO ADDITION COULD BE MADE ON SUSPICION. IT APPEARS THAT THE LD. CIT(A) HAS ALSO NOT CORRECTLY APPRECIATED THE EXPLANATION OF THE ASSESSEE REGARDI NG DEPOSITS AND WITHDRAWALS APPEARING IN BANK ACCOUNT. IN MY OPINIO N THE LD. CIT(A) HAS CONFIRMED THE ADDITION WITHOUT ASSIGNING ANY COGENT REASONS. THUS, KEEPING IN VIEW THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE, I AM OF THE OPINION THAT THE ADDITION OF RS. 6,00,000/- AND RS. 2,50,00 0/- MADE ON ACCOUNT OF ALLEGED UNEXPLAINED DEPOSITS IN BANK ACCOUNT DESERV ES TO BE DELETED. ACCORDINGLY, BOTH THE ADDITIONS ARE DELETED. 8. GROUND NO. 2 OF THE APPEAL IS GENERAL IN NATURE, AND HENCE NO FINDINGS ARE REQUIRED TO BE GIVEN. 9. GROUND NO. 3 READS AS UNDER: 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST LEVIED UNDER SEC TION 234A, 234B AND 234C OF THE ACT WHICH IS NOT CHARGEABLE IN THE FAC TS OF THE CASE WHILE INTEREST UNDER SECTION 244A HAS BEEN WRONGLY WITHDR AWN WHICH IS ARBITRARY AND UNJUSTIFIED AT THE TIME OF HEARING OF THE APPEAL, BOTH THE PART IES AGREED THAT THIS GROUND OF APPEAL IS CONSEQUENTIAL IN NATURE AND I HOLD ACCORD INGLY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 09/07/2015 SD/- (H.L.KARWA) VICE PRESIDENT DATED : 09/07/2015 AG COPY TO:1. THE APPELLANT,2. THE RESPONDENT,3.THE CI T, 4.THE CIT(A),5. THE LD. DR