Shri Praveen Malik, Sonepat V. ITO, New Delhi

ITA 622/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3508 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAVEEN MALIK
• Keywords: Gift; Opportunity of being heard; Source of fund
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.622/DEL/2015 ASSESSMENT YEAR : 2011-12 PRAVEEN MALIK, HOUSE NO.2121, SECTOR- 23, SONEPAT. VS. ITO, WARD- 37 (3), NEW DELHI. PAN : ALHPP7943H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAVEEN MALIK (ASSESSEE) DEPARTMENT BY : SHRI ATIQ AHMAD, SR.DR DATE OF HEARING : 13-02-2018 DATE OF PRONOUNCEMENT : 13-02-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 10.11.2014 OF THE CIT(A)- XXVIII, NEW DELHI RELATIN G TO ASSESSMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS AN ADVOCATE BY PROFESSION DOING PRACTICE IN DISTRICT S ONEPAT COURT. HE FILED HIS RETURN OF INCOME ON 30.03.2012 DECLARING INCOME OF RS.1,64,498/-. THE CASE WAS SELECTED FOR SCRUTINY BY ISSUE OF STATUTORY NOT ICES. HOWEVER, SINCE THERE WAS NON-COMPLIANCE FROM THE SIDE OF THE ASSESSEE, T HE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE I.T. ACT DE TERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.83,28,320/-. WHILE DOING SO, HE OBSERVED FROM THE BANK 2 ITA NO.622/DEL/2015 ACCOUNT OF THE ASSESSEE THAT SUBSTANTIAL CASH HAS B EEN DEPOSITED IN THE TWO BANK ACCOUNTS MAINTAINED WITH ICICI BANK LTD., SONEPAT B RANCH, THE TOTAL OF WHICH COMES TO RS.81,63,820/-. SINCE THERE WAS NON-COMPL IANCE BEFORE HIM, HE ADDED THE ENTIRE AMOUNT TO THE TOTAL INCOME OF THE ASSESS EE AND DETERMINED THE TOTAL INCOME AT RS.83,28,320/-. 3. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE ASSESSING OFFICER BY OBSERVING AS UNDER :- 5.1 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND SUBMISSIONS THEREOF. THE FACTS OF THE CASE AS PER ASSESSMENT ORDER ARE THAT THE CASE WAS SELECTED ON THE BASIS OF AIR INFORMATION THAT LARGE AMOUNT OF CASH HAS BE EN DEPOSITED IN THE BANK ACCOUNT. THE ASSESSING OFFICER ISSUED STATUTORY NOTICES IN R ESPONSE TO WHICH THE ASSESSEE HIMSELF ATTENDED THE PROCEEDINGS AND FILED COPIES O F HIS BANK ACCOUNTS. HE WAS DIRECTED TO SUBMIT SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNT, PURPOSE OF CASH WITHDRAWALS AND SOURCE OF FUNDS TRANSFERRED IN THE ACCOUNT. IN RESPONSE THE ASSESSEE KEPT SEEKING ADJOURNMENTS AND DID NOT FILE THE REQU ISITE DETAILS. THE ASSESSEE IS A PRACTICING ADVOCATE IN SONEPAT DISTRICT. HE HAD DEP OSITED RS.70,80,6201- IN ONE BANK ACCOUNT AND RS.10,83,200/- IN ANOTHER BANK ACCOUNT. THE INCOME DECLARED IN HIS RETURN WAS RS.1,64,498/- WHICH INCLUDED RS.1,10,000 /- AS INCOME FROM HIS PROFESSION AND RS.54,498/- AS INCOME FROM OTHER SOURCES. THE A SSESSEE DID NOT FILE THE STATEMENT OF AFFAIRS,. CAPITAL ACCOUNT, PROFIT AND LOSS ACCOU NT AND DETAILS OF CREDITORS/ DEBTORS. SINCE THE SOURCE OF RS.81,63,820/- DEPOSITED IN THE ACCOUNT REMAINED UNEXPLAINED, THE ASSESSING OFFICER ADDED IT TO THE TOTAL INCOME. 5.2 IN APPEAL, THE APPELLANT CLAIMED THAT A DIRECT SELLING AGENT ASKED HIM TO BUILD A GOOD BANK ACCOUNT BY MAKING FREQUENTS DEPOSITS AN D WITHDRAWALS. HE CLAIMED THAT THE SAME WAS REQUIRED FOR PROCURING LOAN. THEREFORE , IT WAS CLAIMED BY THE APPELLANT THAT HE TOOK GIFTS AND LOANS FROM FRIENDS AND RELAT IVES IN CASH OR THROUGH CHEQUES. HE ENCLOSED ALONGWITH THE SUBMISSIONS THE FOLLOWING DE TAILS :- 1 COPY OF STATEMENT OF BOTH THE BANKS ACCOUNTS. 2. DETAILS OF ADDITIONS MADE BY THE ITO WITH POINT WISE EXPLANATION OF THE CREDITS MADE IN THE BANK BY WAY OF CASH/CHEQUE FOR CREDIT MORE THAN RS. 50000/-. CASH DEPOSITS FOR AMOUNT LESS THAN RS. 500 00/- WERE ALSO DEPOSITED FROM PREVIOUS WITHDRAWALS FROM THE BANK. 3. DETAILS OF LOANS RECEIVED DURING THE YEAR. 4 DETAIL OF GIFTS RECEIVED DURING THE YEAR FROM REL ATIVES. 5.3 THE DETAILS FILED BY THE APPELLANT HAVE BEEN PE RUSED. THE COPY OF THE BANK ACCOUNT SHOWS DEPOSITS AND WITHDRAWALS AS MENTIONED BY THE ASSESSING OFFICER. THE OTHER DOCUMENTS SHOW CLAIM OF DEPOSITS OUT OF CASH WITHDRAWALS, GIFTS RECEIVED FROM VARIOUS PERSONS/RELATIVES/FRIENDS. LOANS RECEIVED F ROM VARIOUS PERSONS/RELATIVES/FRIENDS. HOWEVER, NONE OF THE STATEMENT /CLAIM IS BACKED BY ANY DOCUMENTARY EVIDENCE. THE APPELLANT HAS NOT FILED A NY, CONFIRMATION OF THE ALLEGED 3 ITA NO.622/DEL/2015 DONORS, CONFIRMATION FROM THE PERSONS GIVING THE AL LEGED LOAN, CREDIT WORTHINESS OF THE PERSONS GIVING LOANS / GIFTS, THEIR IDENTITY OR GENUINENESS. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCES THE CLAIM OF THE APPELLANT CA NNOT BE ACCEPTED. FURTHER, THE APPELLANT HAS CLAIMED THAT THE CASH WITHDRAWN ON EA RLIER DATES HAVE BEEN RE- DEPOSITED IN THE ACCOUNT. THIS CLAIM OF THE APPELLA NT CANNOT BE ACCEPTED AS THE APPELLANT HAS FAILED TO PREPARE AND FILE A CASH FLO W STATEMENT SHOWING THE DIRECT NEXUS BETWEEN DEPOSITS AND WITHDRAWALS AND THE UTIL IZATION OF WITHDRAWALS FOR DIFFERENT PURPOSES. THE PERUSAL OF THE BANK STATEME NT ALSO SHOWS THE DEPOSITS HAVE BEEN MADE AT DIFFERENT PLACES EXAMPLE SONIPAT, DWAR KA, NAJAFAGARH AND CASH WITHDRAWAL HAVE BEEN MADE BY DIFFERENT PERSONS GULS HAN KUMARI, NARESH DEVI, AKSHAY KUMAR, SHIV SHANKA, HARI PARKASH, MANENDER, SANDEEP KUMAR, GULSHAN, HARI PARKASH, RAVINDER, KULDEEP,ETC AND NOT BY THE APPELLANT HIMSELF. THUS THE CLAIM OF THE APPELLANT THAT CASH WITHDRAWALS MADE FROM TH E BANK ACCOUNT HAVE BEEN RE- DEPOSITED IS NOT SUPPORTED BY THE BANK STATEMENT. T HE ADDITION MADE BY THE ASSESSING OFFICER IS THEREFORE CONFIRMED. {6}. GROUND OF APPEAL NO. 3 IS DIRECTED AGAINST INITIATION OF PENALTY UNDER SECTION 271(1)(C) BEING PREMATURE HENCE NOT ADJUDICATED. {7} IN THE RESULT, THE APPEAL IS DISMISSED. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT ORDER PASSED BY LD. ASSESSING OFFICER IS W ITHOUT ASSUMING VALID JURISDICTION AND SHOULD BE QUASHED AB-INITIO. 2. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IS CONFIRMING THE ADDITIO N OF RS.81,63,820/- MADE BY LD. ASSESSING OFFICER AS INCOME FROM UNDISCLOSED SO URCES. 3. APPELLANT ASSESSEE HAS EVERY RIGHT TO MAKE, ADD, DELETE, MODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 5. THE ASSESSEE HIMSELF APPEARED BEFORE THE BENCH A ND EXPLAINED THAT DUE TO HIS ILLNESS, HE COULD NOT APPEAR BEFORE THE ASSESSI NG OFFICER FOR WHICH HE HAS PASSED AN EX-PARTE ORDER MAKING THE ADDITION OF THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNTS. HE SUBMITTED THAT THE LD. CIT(A) WI THOUT CONSIDERING THE FACTS PROPERLY HAS UPHELD THE ADDITION MADE BY THE ASSESS ING OFFICER WITHOUT GIVING ANY CREDIT FOR THE WITHDRAWALS MADE BY HIM FROM TIM E TO TIME. HE SUBMITTED 4 ITA NO.622/DEL/2015 THAT HIS EXPLANATION THAT THE DEPOSITS ARE OUT OF C ASH WITHDRAWALS, GIFT RECEIVED FROM VARIOUS PERSONS/RELATIVES AND LOANS RECEIVED F ROM RELATIVES AND FRIENDS WERE REJECTED BY THE CIT(A) FOR WANT OF ANY DOCUMEN TARY EVIDENCE. HE SUBMITTED THAT SINCE HE COULD NOT GIVE ALL DETAILS BEFORE THE ASSESSING OFFICER, THE LD. CIT(A) WITHOUT GIVING PROPER OPPORTUNITY HA D SUSTAINED THE ADDITION. HE SUBMITTED THAT GIVEN AN OPPORTUNITY HE IS IN A POSI TION TO SUBSTANTIATE THE VARIOUS CASH DEPOSITS IN THE TWO BANK ACCOUNTS MAINTAINED B Y HIM. 6. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON T HE ORDER OF THE LD. CIT(A). 7. AFTER HEARING BOTH THE SIDES, WE FIND SOME FORCE IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THE ENTIRE CASH HAS BEEN ADDED BY THE ASSESSING OFFICER WITHOUT GIVING ANY CREDIT FOR THE VARIOUS WITHDRAWALS FROM THE SAID TWO BANK ACCOUNTS AND THE LOANS & GIFTS, E TC. SAID TO HAVE BEEN RECEIVED. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE WITH EVIDENCE TO HIS SATISFACTION. THE ASSESS ING OFFICER IS DIRECTED TO DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING D UE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSES. 5 ITA NO.622/DEL/2015 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH FEBRUARY, 2018. SD/- SD/- (BEENA A. PILLAI) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13-02-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI