SUNIL JAIN HUF, Jaipur V. DCIT, Jaipur

ITA 640/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5102 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Assessee Lawyers: DEEPAK SETHI

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 640/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SHRI SUNIL JAIN, HUF 44, INDRA NAGAR, TONK ROAD JAIPUR CUKE VS. THE DCIT CIRCLE- 6 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAIHS 0784 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI DEEPAK SETHI, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08/07/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29 /07/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 22-07-2014 FOR THE ASSESSM ENT YEAR 2009-10 RAISING THEREIN FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD. CIT(A)-II, JAIPUR IS CONTRARY TO THE FACTS OF THE CASE AND PREJUDICIAL T O THE ASSESSEE. 2. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE IN MAKING ADDITION OF RS. 6,73,955/- AS UNEX PLAINED ITA NO. 640/JP/2014 SHRI SUNIL JAIN, HUF VS. DCIT , CIRCLE- 6, JAIPUR . 2 CASH CREDITS. THE ACTION IS LD. CIT(A) IS CONTRARY TO THE FACTS, RECORDS, CIRCUMSTANCES OF THE CASE AND LAW AND DESE RVES TO BE DELETED. 2.1 THE GROUND NO. 1 OF THE ASSESSEE IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION.. 2.2 AS REGARDS THE GROUND NO. 2 OF THE ASSESSEE WHE REIN BRIEF FACTS OF THE CASE ARE THAT THE RETURN DECLARING LOSS OF RS. 45,93,722/- FOR THE ASSESSMENT YEAR 2009-10 IN THE STATUS OF HUF WAS E -FILED ON 30-09-2009 BY THE ASSESSEE. THE ASSESSEE HAS DECLARED INCOME F ROM TRADING OF SHARES AND INTEREST INCOME UNDER THE HEAD INCOME FROM OTHE R SOURCES. THE CASE OF THE ASSESSEE WAS SELECTED UNDER CASS FOR SCRUTIN Y ASSESSMENT U/S 143(3). THE NOTICE U/S 143(2) OF THE ACT DATED 18- 08-2010 WAS SENT TO THE ASSESSEE THROUGH REGD. POST. THE DETAILS AND DO CUMENTS OF THE ASSESSEE WERE TEST CHECKED BY THE AO. THE AO OBSERV ED THAT DURING THE YEAR THE ASSESSEE HAD MADE CASH DEPOSITS IN ITS BAN K ACCOUNT. THE RELEVANT EXTRACT OF THE ASSESSMENT ORDER IN THE CAS E OF THE ASSESSEE IS AS UNDER:- IN THIS SAVINGS ACCOUNT, CASH HAS ALSO BEEN DEPOSITED. DETAILS ARE AS UNDER:- DATE AMOUNT 06-06-2008 CASH DEPOSIT 47,000/- 07-06-2008 CASH DEPOSIT 31,000/- 20-06-2008 CASH DEPOSIT 30,000/ 23-06-2008 CASH DEPOSIT 40,000/- ITA NO. 640/JP/2014 SHRI SUNIL JAIN, HUF VS. DCIT , CIRCLE- 6, JAIPUR . 3 24-06-2008 CASH DEPOSIT 30,000/- 11-10-2008 CASH DEPOSIT 5,00,000/- 15-10-2008 CASH DEPOSIT 11,000/- TOTAL CASH 6,89,000/- 17-10-2008 CASH WITHDRAWAL 1,00,000/- 20-10-2008 CASH WITHDRAWAL 2,00,000/- CASH WITHDRAWAL 2,00,000/- 29-10-2008 CASH DEPOSIT 90,000/- BALANCE 7,79,000/- REPLY AND DETAILS FURNISHED BY THE ASSESSEE WERE CONSIDERED. LATE SMT. PISTA DEVI JAIN HAS DECLARED INCOME RS. 29,271/- AS INTEREST AND HOSPITAL. INCOME IS DECLAR ED AS UNDER: NSC RS. 40,000/- 5 TH YEAR NSC RS. 40,000/- 4 TH YEAR NSC RS. 40,000/- 3 RD YEAR NSC RS. 25,000/- 2 ND YEAR THUS, SHE HAD TOTAL NSC OF RS. 1,45,000/-. NSC MATU RES AFTER 7.5 YEARS. THUS, BARELY ONLY TWO NSC OF TOTAL RS. 80,00 0/- WOULD HAVE MATURED. PAYMENT ABOVE RS. 20,000/- IS NOT MADE IN CASH BY THE POST OFFICE,THEREFORE, THE AMOUNT WOULD HAVE BEEN D EPOSITED IN ANY BANK A/C. BUT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE REGARDING MATURITY PROCEEDS RECEIVED OF NSC AND THE IR NEXUS THAT THE SAID AMOUNT WAS AVAILABLE IN CASH AND DEPOSITED IN SB ACCOUNT. EVEN INTEREST AMOUNT RS.29271/- @ 12% GIVE S HER CAPITAL TO RS. 243925/-. EVEN TAKING ALL AMOUNTS SO CLAIMED BY THE ASSESSEE WOULD NOT BE SUFFICIENT TO MEET THE AMOUNT OF RS. 689000/- DEPOSITED IN THE SB A/C WITH THE RAJASTHAN BANK LTD . ABOVE ALL THE ASSESSEE FAILED TO PROVE THE AVAILABILITY OF FUND A S WELL AS NEXUS OF AVAILABILITY OF FUND AND UTILIZING THE SAME FOR DEP OSIT IN BANK ACCOUNT. RS. 689000/- IS TREATED AS UNEXPLAINED CAS H DEPOSITED IN THE BANK ACCOUNT BY THE ASSESSEE AND IS ADDED TO TH E INCOME OF THE ASSESSEE. ITA NO. 640/JP/2014 SHRI SUNIL JAIN, HUF VS. DCIT , CIRCLE- 6, JAIPUR . 4 HENCE, IN NUTSHELL, THE AO THE TREATED THE SUM OF R S. 6,89,000/- AS UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 2.3 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WITH FOLLOWING SUBMISSIONS BUT THE LD. CIT(A ) HAS CONFIRMED THE ACTION OF THE AO. RELEVANT EXTRACT OF THE SUBMISSIONS OF THE AS SESSEE LATE SMT. PISTA DEVI JAIN (PAN ABFPJ0287L), DOB 07 JULY,1930, MOTHER OF KARTA SHRI SUNIL JAIN EXPIRED ON 29 TH NOVEMBER 2005 (AGED MORE THAN 75 YRS. AT THE TIME OF DEATH) WAS ASSESSED TO INCOME TAX SINCE LONG, HAD GROSS TO TAL INCOME OF RS. 1,71,804/- FOR A.Y. 2006-07 WHICH IS WRONGLY MENTIONED BY LD. AO AS RS. 29,271/-. THE ITR ACKNOWLEDGEMENT WAS PRODUCED BEFORE THE LD. AO DURING ASSESSMENT PROCEE DINGS, HOWEVER, IS AGAIN ENCLOSED FOR YOUR READY REFERENCE AS PER ANNEXURE A. LATE SMT. PISTA DEVI JAIN WAS PARTNER IN M/S HOSPIT AL & HOSPITAL AND M/S NEW DRUG CORNER. LATE SMT. PISTA DEVI JAIN HAD GIVEN LOANS TO PARTIE S AND ALSO TO FRIENDS & RELATIVES. THE LD. AO HAS ALSO WRONGLY STATED THE MATURITY PER IOD OF NSC TO 7.5 YRS. INSTEAD OF 6 YEARS. A INDIVIDUAL NSC IS NOT ISSUED BY THE POST OFFICE H AVING DENOMINATION MORE THAN RS. 10,000/- AND ALSO THAT POST OFFICE HAS USUAL PRACTICE TO MAKE PAYMENTS IN CASH. ITA NO. 640/JP/2014 SHRI SUNIL JAIN, HUF VS. DCIT , CIRCLE- 6, JAIPUR . 5 THE CASH COLLECTED FROM ASSETS OF LATE SMT. PISTA D EVI JAIN WAS LYING WITH THE ASSESSEE WHICH WAS DEPOSITED IN THE BANK AT VARIOUS TIMES DURING THE PERIOD RELEVANT TO THE A.Y . 2009-10. THE CASH DEPOSITED IN BANK A/C OF THE ASSESSEE FROM THE ASSETS OF LATE SMT. PISTA DEVI JAIN SHALL CONSTITUTE AS CO RPUS OF THE HUF, THEREFORE CANNOT BE CONSIDERED AS UNEXPLAINED CASH DEPOSITS. THEREFORE, IN THE LIGHT OF THE ABOVE, IT IS ESTABLI SHED THAT CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IS NO T UNDISCLOSED SOURCE AD THEREFORE, CANNOT BE ADDED BACK TO THE IN COME OF THE ASSESSEE. OBSERVATION OF THE LD. CIT(A) 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASS ESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. THE FACT IS THAT CASH OF RS. 6,89,000/- HAS BEEN DEPOSITED IN THE BANK ACCOU NT OF THE APPELLANT. IT HAS BEEN SUBMITTED BY THE APPELLANT T HAT THE SOURCE OF THIS CASH DEPOSIT IS REALIZATION FROM THE ASSETS OF THE MOTHER OF THE KARTA WHO PASSED AWAY ON 29-11-2005. THE CASH DEPOS ITED IN THE BANK ACCOUNT IS DURING THE PERIOD 6-6-2008 AND 15- 10-2008 WHICH IS AROUND TWO YEARS AFTER THE DEATH OF THE MOTHER. THE APPELLANT HAS NOT SUBMITTED ANY SPECIFIC DETAILS OR ANY DOCUMENTA RY EVIDENCE TO SHOW THAT THE SOURCE OF THIS CASH COULD BE OUT OF P ROCEEDS OF NSC OR RETURN OF ADVANCES GIVEN ON THE PRETEXT THAT THE ASSESSEE IS NOT MAINTAINING STATEMENT OF AFFAIRS FOR HIS PERSONAL M ATTERS. WHEREAS, IT IS WORTHWHILE TO NOTE THAT FOR TRANSACTIONS IN S HARES, THE APPELLANT MAINTAINS BOOKS OF ACCOUNT WHICH ARE DULY AUDITED U /S 44AB.IN VIEW OF THE ABOVE DISCUSSION, THE EXPLANATION OF TH E APPELLANT REGARDING THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNT, IS NOT SATISFACTORY. THEREFORE, THE ADDITION RS. 6,89,000 /- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH D EPOSITED IN THE BANK ACCOUNT, IS SUSTAINED. ITA NO. 640/JP/2014 SHRI SUNIL JAIN, HUF VS. DCIT , CIRCLE- 6, JAIPUR . 6 2.4 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION WITH FOLLOWING SUBMISSIONS. YOUR HONOUR, THE ASSESSEE APPELLANT HUF HAD DEPOS ITED THE CASH AT VARIOUS INTERVALS FROM THE AMOUNT COLLECTED FROM TH E ASSETS OF LATE SMT. PISTA DEVI JAIN (MOTHER OF KRATA SHRI SUNIL JAIN) WITH A BONA FIDE BELIEF OF CONSIDERING IT AS ITS CORPUS. SINCE CORPUS BEING IN THE NATURE OF CAPITAL, CANNOT FORM PART OF TOTAL INCOME OF THE ASSESSEE APPELLANT HUF FOR THE RELEVA NT ASSESSMENT YEAR. THEREFORE, THE CASH DEPOSITED IN THE BANK A/C OF TH E ASSESSEE APPELLANT HUF IS NOT FROM UNDISCLOSED SOURCES AND CANNOT BE A DDED BACK TO INCOME OF THE ASSESSEE APPELLANT HUF. THEREFORE, THE ADDITION OF RS. 6,89,000/- MADE BY T HE LD. AO AND CONFIRMED BY THE LD. CIT (A) IS BASED ON ERRONEOUS UNDERSTANDINGS OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND EXPLANATION S GIVEN AND DESERVES TO BE DELETED. 2.5 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I HAVE TAKEN INTO CONSIDERATIO N ALL THE DEPOSITS AND CASH WITHDRAWAL OF THE ASSESSEE SHOWING BALANCE OF RS. 7,79,000/- AS IS MENTIONED IN THE ORDER OF THE AO. IT IS ALSO NOTIC ED FROM THE ASSESSMENT ORDER THAT LATE SMT. PISTA DEVI HAD DECLARED INCOM E OF RS. 29,273/- AS INTEREST AND HOSPITAL INCOME. LATE SMT. PISTA DEVI HAD NSCS AMOUNTING TO RS. 1,45,000/- WHICH WERE TO BE MATURED AFTER 7 .5 YEARS AS PER NSC SCHEME. SMT. PISTA DEVI HAS PASSED AWAY AND AS PER DEPOSIT SHE EARNED INTEREST OF RS. 29,271/- @ 12% ON THE CAPITAL OF RS . 2,43,925/- AS TAKEN ITA NO. 640/JP/2014 SHRI SUNIL JAIN, HUF VS. DCIT , CIRCLE- 6, JAIPUR . 7 BY THE AO IN HIS ASSESSMENT ORDER. HENCE, I FEEL TH AT THE AMOUNT OF RS. 2,43,925/- AS INDICTED BY THE AO IN HIS ASSESSM ENT ORDER SHOULD NOT BE ADDED IN THE TOTAL INCOME OF THE ASSESSEE. IN TH E INTEREST OF JUSTICE, THE ADDITION SHOULD BE RESTRICTED TO RS. 4,45,075/-. TH US THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 /07/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29/07/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SUNIL JAIN, HUF , JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE- 6, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 640/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR