SUNIL PRABHAKAR PAWAR , NAGPUR V. INCOME TAX OFFICER ,WARD -3, NAGPUR

ITA 58/NAG/2018

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8901 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U U KASAR
• Assessee Lawyers: R P C HANDEKAR
• Keywords: Unexplained cash credit; Gift; Additional evidence; Set aside
• Section: 143(3); 142(1); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.58/NAG./2018 ( ASSESSMENT YEAR : 200910 ) SHRI SUNIL PRABHAKAR PAWAR OPP. GAYATRI CONVENT RAHTEKAR WADI, DASARA ROAD MAHAL, NAGPUR 440 032 PAN AGBPP8022G APPELLANT V/S INCOME TAX OFFICER WARD3, NAGPUR .... RESPONDENT ASSESSEE BY : SHRI R.P. CHANDEKAR REVENUE BY : SHRI U.U. KASAR DATE OF HEARING 24.10.2018 DATE OF ORDER 26.10 .2018 O R D E R PER G. MANJUNATHA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 29 TH DECEMBER 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS)- I, NAGPUR, FOR THE ASSESSMENT YEAR 2009-10. THE GRO UNDS RAISED BY THE ASSESSEE ARE EXTRACTED BELOW:- 1. THE ASSESSMENT ORDER PASSED BY THE ASSESSING OF FICER U/S 143(3) OF THE ACT AND SUSTAINED BY THE CIT(A) IS BA D IN LAW, ILLEGAL VOID AND INVALID AS THE FACTS STATED IN THE ASSESSMENT ORDER IS BASELESS. I HAVE REQUESTED YOUR HONOUR TO KINDLY ALLOW PERMISSION TO RETRACT THE STATEMENT RECORDED BY THE ASSESSING 2 SHRI SUNIL PRABHAKAR PAWAR OFFICER AS PER MY SUBMISSION DATED 16.03.2018. THE SOURCE OF INVESTMENT HAS ALREADY BEEN PROVED FOR ASSESSMENT Y EAR 2007 08 AND NOT APPLICABLE FOR ASSESSMENT YEAR 200910. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FI LED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 16 TH FEBRUARY 2010, DECLARING TOTAL INCOME OF ` 1,37,430. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS ON THE BASIS OF AIR INFORMATION REGARDING CASH DEPOSIT OF ` 15.02 LAKH IN THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NAGPUR, DURING THE FINANCI AL YEAR 2008-09. ACCORDINGLY, NOTICE UNDER SECTION 143(2) AND SECTIO N 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO THE NOTICE, THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE APPEARED FROM TIME- TO-TIME AND FILED VARIOUS DETAILS AS CALLED FOR AND ALSO EXPLAINED TH E SOURCE OF CASH DEPOSIT OF ` 15.02 LAKH IN THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NAGPUR. THE ASSESSEE STATE D THAT HE HAS MAINTAINED A JOINT ACCOUNT ALONG WITH HIS WIFE AND SOURCE FOR CASH DEPOSIT IS OUT OF HIS AND HIS WIFES SAVINGS FOR WH ICH NECESSARY EVIDENCES INCLUDING RETURN OF INCOME FILED FOR THE RELEVANT YEARS HAVE BEEN FILED. THE ASSESSING OFFICER, AFTER CONSIDERIN G EXPLANATIONS FILED BY THE ASSESSEE HELD THAT THE ASSESSEE FAILED TO PR OVE WITH EVIDENCE THE SOURCE OF DEPOSIT OF CASH OF ` 15.02 LAKH IN THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NA GPUR. THOUGH, THE ASSESSEE CLAIMS TO HAVE SOURCE IN THE FORM OF H IS AND HIS WIFES 3 SHRI SUNIL PRABHAKAR PAWAR SAVINGS OUT OF DECLARED INCOME, ON A PERUSAL OF THE DETAILS FILED BY THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE IS NOT HAV ING SUFFICIENT SOURCE OF INCOME TO EXPLAIN CASH DEPOSIT ACCORDINGLY MADE ADDITION OF ` 15 LAKH AS UNEXPLAINED CASH CREDIT. AGGRIEVED BY THE A SSESSMENT ORDER SO PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFE RRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE ASSESSEE, BEFORE THE LEARNED COMMISSIONER (APPE ALS), HAS FILED ELABORATE WRITTEN SUBMISSIONS WHICH HAVE BEEN REPRODUCED AT PARA-4 FROM PAGES-4 AND 5 OF THE ORDER OF THE LEARN ED COMMISSIONER (APPEALS). THE SUM AND SUBSTANCE OF THE ARGUMENTS O F THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS) ARE THAT, THE ASSESSING OFFICER HAS IGNORED ALL THE EVIDENCES FILED BEFORE HIM TO PROVE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT. THE ASSESSEE F URTHER CONTENDED THAT OUT OF ` 15 LAKH CASH DEPOSIT, ` 7.50 LAKH BELONGS TO SMT. SEEMA S. PAWAR AND BALANCE ` 7.50 LAKH BELONGS TO THE ASSESSEE FOR WHICH NECESSARY DETAILS INCLUDING RETURN OF INCOME FOR TH E RELEVANT PERIOD HAS BEEN FILED BEFORE THE ASSESSING OFFICER. THE ASSESS ING OFFICER HAS IGNORED ALL THE EVIDENCES TO MAKE THE ADDITIONS TO TOTAL CASH DEPOSITS FOUND IN THE BANK ACCOUNT DISREGARDING THE SOURCE O F INCOME EXPLAINED BY THE ASSESSEE. THE LEARNED COMMISSIONER (APPEALS) , AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALS O CONSIDERING THE FACTS BROUGHT OUT BY THE ASSESSING OFFICER DURING T HE COURSE OF 4 SHRI SUNIL PRABHAKAR PAWAR ASSESSMENT PROCEEDINGS, HELD THAT THE ASSESSEE HAS FAILED TO EXPLAIN SATISFACTORILY THE SOURCE OF CASH DEPOSIT IN THE BA NK ACCOUNT AND, HENCE, THERE IS NO REASON TO INTERFERE IN THE FINDI NGS OF THE ASSESSING OFFICER IN TREATING CASH DEPOSIT AS UNEXPLAINED INC OME OF THE ASSESSEE. RELEVANT OBSERVATIONS OF THE LEARNED COMMISSIONER ( APPEALS) ARE EXTRACTED BELOW:- 5.0 HAVING CONSIDERED THE SUBMISSIONS MADE DURING THE ASSESSMENT AND APPELLATE PROCEEDINGS, THE STATEMENT S RECORDED UNDER SECTION 131 OF THE ACT OF THE APPELLANT AND H IS SPOUSE, SMT. SEEMA PAWAR, THE ARGUMENTS PUT FORTH BY THE APPELLA NT AND THE ASSESSMENT ORDER, IT IS NOTED THAT ALTHOUGH THE APP ELLANT HOLDS THE VIEW THAT HE HAD RECEIVED CASH GIFTS ALL THROUG H 5 YEARS AFTER MARRIAGE, AND HAD ACCUMULATED SUCH A SUBSTANTIAL AMOUNT, HE CONTRADICTS HIMSELF AND STATES THAT IN 2003, H I S MEDICAL EXPENSES WERE BORNE BY HIS RELATIVES AS HE WAS POOR, AND FIN ANCIALLY WEAK. IT IS THIS FAULTY REASONING THAT MAKES THE ASSESSEE 'S EXPLANATION WEAK AND UNSATISFACTORY. IT IS THIS DEFICIENT EXPLA NATION THAT SPOILS THE ASSESSEE'S CASE , COUPLED WITH THE COMPLETE LACK OF KNOWLEDGE / AWARENESS OF THE TRUE STATE OF AFFAIRS DISPLAYED BY HIS SPOUSE, SMT . SEEMA PAWAR DURING THE STATEMENT RECORDED, ESPECIAL LY WHEN IT HAS BEEN ARGUED THAT SHE IS EDUCATED AND CA PABLE OF EARN I NG INCOME- THAT MAKES THE APPELLANT ' S CASE FRAIL AND INSUPPORTABLE. IT IS QUITE INTEREST I NG THAT THE APPELLANT HAS NOW REVERSED HIS STAND AND QUESTIONS THE ADMISSIBIL I TY OF H I S EDUCATED WIFE'S STATEMENT . 5.1 AFTER CONSIDERING THE FACTS AVAILABLE ON RECOR D, IT IS HELD THAT THE ASSESSING OFFICER HAS CORRECTLY ARRIVED AT THE CONCLUSIONS HE DRAWS IN HIS ORDER, AND NO INFIRMITY IS FOUND IN EI THER HIS REASONING, OR IN HIS ACTION OF ASSESSING THIS IMPUG NED DEPOSIT AS UNEXPLAINED INCOME U/S. 68 OF THE ACT . THE FACT THAT CASH BALANCES AS REPORTED IN THE RETURNS OF THE APPELLAN T AND HIS SOUSE, BOTH, DOES NOT SUPPORT THE APPELLANT'S PLEA THAT THIS DEP OSIT WAS OUT OF PAST GIFTS AND SAVINGS, IS ALSO NOTED WHI L E COMING TO THE DECISION- THAT THE APPELLANT HAS NOT SATISFACTORILY EXPLAINED THE SOURCE OF THE CASH DEPOSIT DURING THE YEAR UNDER CO NSIDERATION- AND ACCORDINGLY, THIS DEPOSIT IS LIABLE TO BE TREAT ED AS INCOME OF THE APPELLANT FROM UNEXPLAINED SOURCES AND TAXABLE DURING A.Y. 200910. THE APPELLANTS GROUND NO.1 TO 8 ARE ACCOR DINGLY, DISMISSED. THE ADDITION OF ` 15,00,000 AS UNEXPLAINED INCOME IS 5 SHRI SUNIL PRABHAKAR PAWAR UPHELD AND CONFIRMED. 4. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE SUB MITTED THAT THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT CONSIDERING THE EXPLANATION OF THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSIT FOUND IN THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NAGPUR, DESPITE FURNISHING VARIOUS EVIDENCES INCLUDING ADDITIONAL EVIDENCES. THE LEARN ED AUTHORISED REPRESENTATIVE SUBMITTED THAT INITIALLY THE ASSESSE E HAS EXPLAINED THE SOURCE OF HIS AND HIS WIFES SAVINGS FROM DECLARED INCOME, BUT LATER FILED ADDITIONAL EVIDENCES IN THE FORM OF BANK STAT EMENT OF A PARTNERSHIP FIRM M/S. SHRI SAIRAM HOUSING AGENCY. T HE FIRM HAS SOLD AN AGRICULTURAL LAND ON 17 TH FEBRUARY 2007, FOR A CONSIDERATION OF ` 15 LAKH AND SALE PROCEEDS HAS BEEN DEPOSITED IN CHITNI SPURA SAHAKARI BANK LTD., MAHAL, NAGPUR. THE ASSESSEE HAS WITHDRAWN A SUM OF ` 5 LAKH ON 29 TH JANUARY 2009 AND A FURTHER SUM OF ` 5 LAKH ON 30 TH JANUARY 2009 AND ` 5 LAKH ON 6 TH FEBRUARY 2009 AGGREGATING TO ` 15 LAKH AND THE SAME HAS BEEN DEPOSITED IN THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NAGPUR, ON 9 TH FEBRUARY 2009. IN THIS REGARD, HE FILED NECESSARY EVIDENCES INCLUD ING COPY OF PARTNERSHIP DEED AND BANK STATEMENT. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, STRONGLY SUPPORTED THE ORDER OF THE LEARNED COMMISS IONER (APPEALS). 6 SHRI SUNIL PRABHAKAR PAWAR THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUB MITTED THAT INITIALLY THE ASSESSEE HAS TAKEN AN ARGUMENT THAT T HE SOURCE FOR CASH DEPOSIT FOUND IN THE BANK ACCOUNT IS OUT OF HIS AND HIS WIFES SAVING BUT LATER COME OUT WITH A NEW ARGUMENT THAT THE AMO UNTS HAVE BEEN WITHDRAWN FROM PARTNERSHIP FIRMS BANK ACCOUNT. ALT HOUGH, THE ASSESSEE HAS FILED NECESSARY EVIDENCES IN SUPPORT O F ARGUMENTS BUT THESE ARE THE ADDITIONAL EVIDENCES FILED NOW AND TH E ASSESSING OFFICER HAD NO OCCASION TO GO THROUGH THE EVIDENCES FILED B Y THE ASSESSEE. ACCORDINGLY, THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FURTHER VERIFICATION. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL PL ACED ON RECORD. THE ASSESSING OFFICER MADE ADDITION OF ` 15 LAKH TOWARDS CASH DEPOSIT FOUND IN THE SAVING BANK ACCOUNT OF STATE BANK OF IN DIA, RAVI NAGAR BRANCH, NAGPUR, WHEN THE ASSESSEE HAS FAILED TO OFFE R ANY EXPLANATION WITH NECESSARY EVIDENCES TO PROVE SOURCE OF CASH DE POSITS. THE ASSESSEE, INITIALLY, HAS GIVEN AN EXPLANATION TO AR GUE THAT THE SOURCE OF CASH DEPOSIT IS OUT OF HIS AND HIS WIFES SAVINGS F ROM KNOWN SOURCE OF INCOME. NOW, THE ASSESSEE HAS COME OUT WITH AN ALTE RNATIVE SUBMISSION THAT THE SOURCE FOR CASH DEPOSIT FOUND I N THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NA GPUR, IS OUT OF CASH WITHDRAWALS FROM CHITNISPURA SAHAKARI BANK LTD. , MAHAL, NAGPUR, 7 SHRI SUNIL PRABHAKAR PAWAR FROM BANK ACCOUNT OF A PARTNERSHIP FIRM. ACCORDING TO THE ASSESSEE, THE FIRM HAS SOLD ITS AGRICULTURAL LAND ON 17 TH FEBRUARY 2007, FOR A CONSIDERATION OF ` 15 LAKH AND PROCEEDS HAVE BEEN DEPOSITED IN CHITNISPURA SAHAKAR BANK LTD., MAHAL, NAGPUR. THE AM OUNT CREDITED IN THE FIRMS ACCOUNT HAS BEEN WITHDRAWN ON THREE OCCA SIONS ON 29 TH JANUARY 2009, 30 TH JANUARY 2009 AND 6 TH FEBRUARY 2009 AGGREGATING TO ` 15 LAKH AND THE SAME HAS BEEN DEPOSITED ON 9 TH FEBRUARY 2009 IN THE SAVING BANK ACCOUNT OF STATE BANK OF INDIA, RAVI NAGAR BRANCH, NAGPUR. WE FIND THAT THE ASSESSEE HAS FILED COPY OF PARTNERSHIP DEED, BANK STATEMENT OF PARTNERSHIP FIRM TO PROVE AVAILAB ILITY OF SOURCE IN THE HANDS OF THE FIRM AND WITHDRAWALS OF CASH FROM PARTNERSHIP FIRM BANK ACCOUNT. BUT ALL THESE EVIDENCES ARE FILED DUR ING THE COURSE OF APPELLATE PROCEEDINGS AND THE ASSESSING OFFICER DID NOT HAD AN OCCASION TO GO THROUGH THE EVIDENCES FILED BY THE A SSESSEE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER IN THE LIGHT OF THE ADDITIONA L EVIDENCES FILED BY THE ASSESSEE. CONSEQUENTLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSU E TO THE FILE OF THE ASSESSING OFFICER FOR FRESH VERIFICATION IN ACCORDA NCE WITH LAW. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STAT ISTICAL PURPOSES. 8 SHRI SUNIL PRABHAKAR PAWAR 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26.10.2018 SD/- SANDEEP GOSAIN JUDICIAL MEMBER SD/- G. MANJUNATHA ACCOUNTANT MEMBER NAGPUR, DATED: 26.10.2018 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (A.R./SR. P.S./P.S.) ITAT, NAGPUR