Sh. Raman Bhuraria, New Delhi V. ITO, New Delhi

ITA 6131/DEL/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3390 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 17-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

ITA NO. 6131 /DEL./201 5 ASSESSMENT Y EAR: 2011 - 12 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B BENCH NEW DELHI) BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER & SHRI AMIT SHUKLA , JUDICIAL MEMB E R ITA NO. 6131 / DEL./20 1 5 ASSESSMENT YEAR: 2011 - 12 RAMAN BHURARIA, 4873/1B, 24, ANSARI ROAD, NEW DELHI VS. ITO WARD 37(1), CIVIC CENTRE, NEW DELHI (APPLICANT) (RESPONDENT) (PAN: A AHPB1738P ) ASSESSEE BY: SH. K. SAMPATH , ADVOCATE REVENUE BY: SH. ANIL KUMAR SHARMA , SR. DR DATE OF HEARING 1 3 / 0 4 /201 7 DATE OF PRONOUNCEMENT 2 1 / 0 4 /201 7 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER : TH E AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 1 4 . 9 .201 5 , PASSED BY THE LD. CIT (A PPEALS ) - XX , NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 1 4 3 (3) FOR THE A.Y. 2011 - 12 . IN THE MEMO OF APPEAL T HE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.21,25,000/ - MADE BY THE ASSESSING OFFICER O N THE FACTS AND CIRCUMSTANCES OF THE CASE. PAGE 2 OF 7 2. THE LD. CIT (APPEALS) ERRED ON THE FACTS OF CASE IS NOT APPRECIATING THE CORRECT PERSPECTIVE REGARDING THE DEPOSIT OF CASH IN THE BANK ACCOUNT AND AS SUCH THE ORDER CONFIRMING THE ADDITION OF RS.21,25,000/ - IS BAD IN LAW AND LIABLE TO BE DELETED. 3. THE LD. CIT (APPEALS) ERRED IN STATING THAT A SUM OF RS.21,25,000/ - WAS INTRODUCED BY THE ASSESSEE IN CASH IN HIS BOOKS OF ACCOUNTS WHICH REMAINED UNEXPLAINED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS SUCH THE ADDITION IS LIABLE TO BE DELETED. 4. THE AUTHORITIES BELOW ERRED IN NOT APPRECIATING THAT THE TOTAL WITHDRAWALS MADE BY THE APPELLANT FROM RAMAN BHURARIA & ASSOCIATES, CHARTERED ACCOUNTANTS IN WHICH THE APPELLANT WAS A APPELLANT WAS A DIRECTOR, W ERE FAR IN EXCESS OF THE DE IN THE BANK ACCOUNT AND AS SUCH NO ADDITION WAS CALLED FOR ON THE FACTS OF THE CASE. 5. THE ADDITION SO MADE BY THE ASSESSING OFFICER IS PURELY ON SUSPICION, SURMISES AND CONJECTURES WHICH HAVE BEEN CONFIRMED BY THE LD. CIT (APPEALS) AND AS SUCH THE ADDITION IS LIABLE TO BE DELETED. 2. THE BRIEF FACTS ARE THAT ASSESSEE IS A CHARTERED ACCOUN TANT AND PARTNER IN M/S. RAM BHURARIA & ASSOCIATES FROM WHICH HE IS EARNING INCOME FROM BUSINESS AND PROFESSION . H E IS ALSO A DIRECTOR IN M/S. BHURARIA CONSULTANTS LTD. THE ASSESSEE S CASE WAS SELECTED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION THAT ASSESSEE HAS MADE HUGE DEPOSITS IN BANK ACCOUNT WITH ICICI BANK . THE LD. ASSESSING OFFICER NOTED THAT F ROM THE PERIOD 20.10.2010 TO 30.3.2010 , THE PAGE 3 OF 7 ASSESSEE HAS DEPOSITED SUM OF RS. 21,25,000/ - IN CASH AND THERE IS NO CASH WITHDRAWALS DURING THIS PERIOD. TH E STATEMENT OF SH. AWADH NARAYAN GARG, ACCOUNTANT FOR THE ASSESSEE WAS RECORDED AND HE WAS SPECIFICALLY ASKED TO EXPLAIN THE PROOF OF CASH WITHDRAWN AND DEPOSITS MADE IN THE BANK ACCOUNT. THE RELEVANT ANSWER OF THE SAID EMPLOYEE ON THE ASSESSING OFFICER S QUESTION WAS AS UNDER: - 6. ANS: THE ASSESSEE HAS DEPOSITED SUM OF RS.42,44,000/ - IN ICICI BANK LTD. OUT OF MONEY UNUSED WHICH WAS WITHDRAWN FROM THE ICICI BANK LTD., MONEY WITHDRAWN FROM M/S RAMAN BHURARAI & ASSOCIATES AND WITHDRAWN FROM M/S BHURARIA CON SULTANT LTD. THE ASSESSEE HAS NOT UTILIZED THE MONEY WITHDRAWN FROM THESE SOURCES FOR THE PURPOSE OTHER THAN UTILIZATION OF DEPOSITS IN SYNDICATE BANK, REPAYMENT OF MORTGAGE LOAN OF STATE BANK OF MYSORE, DEPOSITS IN RAMAN BHURARIA & ASSOCIATES, PAYMENT TO M/S SHIVAM CHITS PVT. LTD. CHITS PVT. LTD. AND UTILIZATION OF DRAWINGS FOR HOUSEHOLD EXPENSES. NO OTHER INCOME WAS EARNED BY THE ASSESSEE FROM RS.25,57,500/ - . FROM THE SAID REPLY ASSESSING OFFICER INFERRED THAT THE CASH WITHDRAWALS MADE BY THE ASSESSEE HAVE BEEN UTILIZED SOMEWHERE ELSE AND ASSESSEE S CLAIM THAT THE CASH DEPOSITS WERE PARTLY FUNDED FROM WITHDRAWALS OF RS.21,25,000/ - IS NOT CORRECT. IF THE CASH HAVE BEEN UTILIZED FOR THE PURPOSE OF REPAYMENT OF MORTGAGE LOAN, DEPOSITS IN THE PARTNERSHIP FI RM, PAYMENT TO M/S. SHIVAM CHITS PVT. LTD. AND UTILIZATION FOR HOUSEHOLD EXPENSES , THEN THERE COULD NOT HAVE BEEN ANY CASH AVAILABLE WITH THE ASSESSEE FOR DEPOSITING THE SAME IN THE BANK ACCOUNT. ACCORDINGLY , HE HELD THAT THE MONEY DEPOSITED IN THE BANK AC COUNT FOR SUMS AGGREGATING TO RS. 21,25,000/ - IS PAGE 4 OF 7 UNEXPLAINED CREDIT WHICH NEEDS TO BE ADDED INCOME OF THE ASSESSEE U/S 68. 3. BEFORE THE LEARNED CIT (APPEALS) , THE ASSESSEE SUBMITTED THAT HE IS MAINTAINING REGULAR BOOKS OF ACCOUNT AND ALSO CASH BOOK CON TAINING DAY TO DAY SOURCE OF GENERATION AND EXPENDITURE OF CASH. THUS , THE ENTIRE CASH AVAILAB ILITY IS EXPLAINED FROM THE REGULAR BOOKS OF ACCOUNT. THE LEARNED CIT(APPEALS) AFTER NOTING DOWN THE ENTIRE FACT S, OBSERVED THAT THE ASSESSEE HAD MADE TOTAL CASH DEPOSITS OF RS. 42,44,000/ - AND HAS ONLY WITHDRAWN RS. 25,57,500/ - , THEREFORE , HE DID NOT HAVE ANY OTHER SOURCE OF CASH FOR MAKING THE DEPOSIT IN THE BANK ACCOUNT. HE FURTHER OBSERVED THAT THE ASSESSEE S CLAIM THAT HE HAS RECEIVED CASH OF RS. 19,80,000/ - FROM M/S. RAMAN BHURARIA & ASSOCIATES ; AND FURTHER AMOUNT OF RS. 11 LA KHS IN CASH FROM M/S. BHURARIA CONSULTANTS LTD. AS RETURN OF SHARE APPLICATION MONEY , ARE ONLY AS SELF SERVING EVIDENCE AND CANNO T BE ACCEPTED. HE FURTHER HELD THAT THE ASSESSEE S EXPLANATION CANNOT BE SUSTAINED AS HE IS ONLY TRYING TO TAKE ADVANTAGE OF CASH BOOK OF TWO CONCERNS . ACCORDINGLY, HE CONFIRMS THE ADDITION MADE BY THE ASSESSING OFFICER. 4. BEFORE US THE LEARNED COUNSEL , SH RI K. SAMPATH SUBMITTED THAT IF ASSESSEE HAS BEEN FOUND TO BE M AINTAIN ING REGULAR BOOKS OF ACCOUNT AND ALSO MAINTAINED CASH BOOK OF THE BANK ACCOUNT , THEN THE ENTIRE SOURCE OF DEPOSITS STANDS EXPLAINED FROM THE CASH BOOK ITSELF AND THEREFORE, WITHOUT R EJECTION OF BOOKS OF ACCOUNT , NO ADDITION COULD HAVE BEEN MADE. 5. ON THE OTHER HAND THE LD. DR STRONGLY RELYING UPON THE ORDER OF THE LEARNED CIT(APPEALS) SUBMITTED THAT , ONUS WAS UP ON THE PAGE 5 OF 7 ASSESSEE TO PROVE THE NEXUS BETWEEN THE CASH WITHDRAWALS AND CASH DEPOSITS IN THE BANK ACCOUNT AND ALSO TO EXPLAIN THE SOURCE THEREOF. SINCE THE ASSESSEE HAS FAILED TO GIVE PROPER EXPLANATION , THEREFORE , THE CASH DEPOSITS HAVE RIGHTLY BEEN ADDED AS INCOME OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSION S AND PERUSED THE RELEVANT FINDING GI V E N IN THE IMPUGNED ORDER AS WELL AS MATERIAL REFERRED TO BEFORE US. THE MAIN DISPUTE IS WITH REGARD TO THE AMOUNT OF CASH D EPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE ON VARIOUS DATES FOR SUMS AGGREGATING TO RS. 21,50 ,000/ - WHICH HAS BEEN ADDED AS UNEXPLAINED CASH CREDIT U/S 68 . THE ASSESSEE S CASE HAS BEEN THAT HE HAS BEEN MAINTAINING REGULAR BOOKS OF ACCOUNT AND ALSO DAY TO DAY CASH BOOK , WHEREIN THE ENTIRE GENER ATION OF SOURCE AS WELL AS ITS UTILIZATION HAS BEEN SHO WN. THESE CASH BOOK ITSELF CONSTITUTES THE SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNT. BEFORE US, THE LD. COUNSEL TO SUBSTANTIATE THE ASSESSEE S CASE HA D REFERRED AND RELIED UPON, FIRSTLY, CASH FLOW STATEMENT FOR THE YEAR ENDING 31.3.2011 ; SECONDLY , COPY OF BANK ACCOUNTS AS MAINTAINED BY THE ASSESSEE ; AND LASTLY, THE CONFIRMATIONS FROM M/S. BHURARIA CONSULTANTS LTD. AND FROM M/S. RAMAN BHURARIA AND ASSOCIATE S THAT ASSESSEE HAS RECEIVED THE CASH PAYMENTS. IF THE ASSESSEE IS MAINTAINING DAY TO DAY CASH BOOK AND ENTIRE GENERATION OF CASH RECEIVED FROM VARIOUS CONCERNS IN WHICH THE ASSESSEE IS A PARTNER OR A DIRECTOR HAS BEEN REFLECTED THEREIN, THEN DEFINITELY SUCH AVAILABILITY OF CASH BECOMES SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. HOWEVER , WE FIND THAT NEITHER THE ASSESSING OFFICER NOR THE LEARNED CIT (APPEALS) HAVE EXAMINED THE CASH BOOK STATED TO BE MAINTAINED BY THE ASSESSEE ON DAY TO DAY BASIS ALONG WITH REGULAR BOOKS OF ACCOUNT . I F THE CASH WITHDRAWALS FROM BANK ACCOUNT OR CASH RECEIVED FROM TW O AFORESAID PAGE 6 OF 7 CONCERNS ARE TALLIED WITH THE DEPOSITS MADE IN THE BANK ACCOUNT ON THE VARIOUS DATES, THEN THE SAME STANDS EXPLAINED . BUT THIS MATTER NEEDS PROPER EXAMINATION BY THE ASSESSING OFFICER. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION TH E ENTIRE MATTER OF CASH DEPOSITS SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL VERIFY AND EXAMINE THE TOTAL AVAILABILITY OF CASH FROM VARIOUS SOURCES AS STATED BY THE ASSESSEE AND TO SEE WHETHER THESE CASH ARE RECORDED IN THE REGULAR BOOK S OF ACCOUNT O N DAY TO DAY BASIS IN THE CASH BOOK AND ALSO WHETHER THE CASH AS REFLECTED IN THE CASH BOOK HAVE BEEN DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. WITH THIS DIRECTION , WE SET ASIDE THE ORDER OF THE LEARNED CIT( APPEALS) AND REMIT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THIS ISSUE AFRESH AFTER GIVING PROPER OPPORTUNIT Y TO THE ASSESSEE TO EXPLAIN HIS CASE. THUS THE GROUNDS RAISED BY THE ASSESSEE ALLOWED FOR STATISTICAL PURPOSES. 7 . IN T HE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED IN THE OPEN COURT ON 2 1 . 0 4 .201 7. ( N.K. SAINI ) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 1 . 0 4 .2017 NARENDER PAGE 7 OF 7 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 1 7 .0 4 .2017 DRAFT PLACED BEFORE AUTHOR 1 8 .0 4 .2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 2 1 .4 .2017 KEPT FOR PRONOUNCEMENT ON FILE SENT TO THE BENCH CLERK 2 1 . 4 .2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.