Sh. Shashi Garg, New Delhi V. ACIT, New Delhi

ITA 6472/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3083 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 27-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: K P GANGULI
• Keywords: Business income; Salary income
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.6472/DEL./2014 ASSESSMENT YEAR 2011-2012 MS. SHASHI GARG, B-256, SURAJ MAL VIHAR, DELHI 110 092. PAN AIGPG7786F VS THE ACIT, CIRCLE 36 (1), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.P. GANGULI, ADVOCATE. FOR REVENUE : SHRI KAUSHLENDRA TIWARI, SR.DR DATE OF HEARING : 20.03.2018 DATE OF PRONOUNCEMENT : 26.03.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XXVIII, NEW DELHI, DATE D 12 TH SEPTEMBER, 2014, FOR THE A.Y. 2011-2012, CHALLENGIN G THE ADDITION OF RS.26,25,000/- ON ACCOUNT OF CASH CREDI T UNDER SECTION 68 OF THE I.T. ACT, 1961. 2 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSE E FILED RETURN OF INCOME DECLARING INCOME OF RS.21,25,283/- . THE ASSESSEE IS A DIRECTOR IN THE COMPANY I.E., M/S. CP R CAPITAL SERVICES LTD., AND EARNED INCOME FROM SALARY, RENTA L INCOME, INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SO URCES. AS PER AIR INFORMATION, THERE WAS A CASH DEPOSIT OF RS .35,25,000/- IN THE S.B. A/C MAINTAINED WITH PUNJAB NATIONAL BAN K IN ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE WAS ASKE D TO FILE COMPLETE BANK STATEMENT OF HER S.B. A/C IN PUNJAB N ATIONAL BANK. ON PERUSAL OF THE SAID BANK STATEMENT, IT WAS FOUND THAT DURING THE YEAR THERE WAS A CASH DEPOSIT OF RS.35,2 5,000/-. THE ASSESSEE EXPLAINED THAT ASSESSEE HAS WITHDRAWN AN E QUIVALENT AMOUNT FROM HER BANK ACCOUNT DURING ASSESSMENT YEAR UNDER APPEAL FOR A PROPERTY DEAL, BUT, DUE TO SOME DIFFER ENCE OF OPINION BETWEEN THE PARTIES, THE DEAL COULD NOT BE MATERIAL IZED AND THE SAME WAS EITHER DEPOSITED BACK BY THE ASSESSEE IN H ER ACCOUNT ON DIFFERENT DATES OR UTILIZED BY THE ASSESSEE. IT WAS FOUND ALL THE CASH WITHDRAWALS WERE PRECEDED BY TRANSFER OF A N EQUIVALENT AMOUNT FROM COMPANIES IN WHICH ASSESSEE IS DIRECTOR . THE 3 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. CONTENTION OF ASSESSEE THAT AMOUNT WAS WITHDRAWN FO R PROPERTY DEAL COULD NOT MATERIALIZED AND SHE DEPOSITED BACK THE CASH WAS NOT FOUND TENABLE. THERE WAS NO CORRELATION IN PATTERN OF WITHDRAWALS AND DEPOSIT OF CASH. 2.1. THE A.O. NOTED THAT ASSESSEE KEPT ON WITHDRAW ING THE CASH THROUGHOUT THE YEAR FOR THE PURPOSE OF BUY ING A PROPERTY AND KEPT ACCUMULATING THE CASH AT HOME. AN Y PROPERTY DEAL WOULD NOT GO THROUGHOUT THE YEAR. MOREOVER, FO R A PROPERTY DEAL NO ONE KEEPS WITHDRAWING THE CASH THROUGHOUT T HE YEAR IN SMALL-SMALL AMOUNTS. THE ASSESSEE IS NOT IN BUSINES S OF REAL ESTATE WHERE SHE WOULD FREQUENTLY REQUIRE CASH WITH DRAWALS FOR SALE AND PURCHASE OF THE PROPERTY. USUALLY IN A NO RMAL COURSE OF EVENTS IN A PROPERTY DEAL, ONE PAYS SOME ADVANCE BEFORE THE DEAL IS FINALISED AND REST OF THE AMOUNT WOULD BE P AID AFTER THE DEAL IS FINALISED ON THE BASIS OF THE AGREEMENT TO SELL. WHILE EXTENDING SUCH ADVANCES A WISE PERSON ALWAYS KEEPS A PROOF PAYMENT SO THAT THE OTHER PERSON DOES NOT CHEAT HIM . THE A.O. ASKED THE ASSESSEE TO SUBSTANTIATE SUCH CLAIM WITH SUPPORTING 4 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. EVIDENCE THAT THE ASSESSEE WAS ACTUALLY PUTTING MON EY FOR SOME PROPERTY PURCHASE AND WHY THE AMOUNT WAS LYING IDLE AT THE HOME THROUGHOUT THE YEAR. INITIALLY, NO REPLY WAS F ILED BY THE ASSESSEE. THE ASSESSEE, LATER ON, FILED REPLY AND S UBMITTED THAT CASH OF RS.48 LAKHS WAS WITHDRAWN BY ASSESSEE FROM HER BANK ACCOUNT FOR PURCHASE OF PROPERTY IN HARGOVIND ENCLA VE, DELHI- 92, FOR A TOTAL CONSIDERATION OF RS.85 LAKHS THROUG H A REAL ESTATE AGENT. THE REAL ESTATE AGENT HAS ADVISED THE ASSESS EE TO KEEP THE CASH IN HAND READY ATLEAST OF 50% OF THE TOTAL PRICE OF THE PROPERTY. WHEN DEAL DID NOT MATERIALIZE, CASH WAS R EDEPOSITED. THE A.O, HOWEVER, NOTED THAT DURING THE YEAR ASSESS EE HAS WITHDREW TOTAL AMOUNT OF RS.99,25,000/- AND 50% OF THE PURCHASE WOULD BE RS.42,50,000/- BUT, ASSESSEE HAS MADE MORE WITHDRAWALS. THE ASSESSEE ACTED AGAINST ADVISE OF PROPERTY DEALER AND DO NOT RE-DEPOSIT THE SAME AMOU NT IN THE BANK ACCOUNT, THE ASSESSEE SHOULD HAVE WITHDRAWN 50 % OF THE AMOUNT ONLY AS PRUDENT PERSON WOULD NOT WITHDRAW CA SH WITHOUT ANY NEED. IT IS NOT EXPLAINED WHY ASSESSEE KEPT WITHDRAWING THE MONEY THROUGHOUT THE YEAR AND KEPT AT HOME 5 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. AND WHY THE AMOUNT MORE THAN 50% WAS KEPT IN CASH I S NOT EXPLAINED. IT IS, THEREFORE, CLEAR CASH WITHDRAWAL WAS NOT FOR PROPERTY DEAL BUT FOR SOME OTHER PURPOSE WHICH ASSE SSEE DID NOT REVEAL. CASH DEPOSIT IS NOT SAME AMOUNT BUT UNA CCOUNTED INCOME OF ASSESSEE. WHEN DEAL DID NOT MATERIALIZE W HY ASSESSEE MADE DEPOSITS AT END OF THE YEAR. THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO GET VERIFY THE FACT OF PROPERTY DEA L. THE A.O. NOTED CERTAIN FEATURES REGARDING CASH DEPOSITS AND WITHDRAWALS, WHICH HAVE NO CO-RELATION. THE A.O, TH EREFORE, NOTED THAT ASSESSEE FAILED TO PROVE THE SOURCE OF T HE CASH DEPOSIT IN THE BANK ACCOUNT. THEREFORE, ADDITION ON UNEXPLAINED CASH DEPOSIT OF RS.35,25,000/- WAS MADE UNDER SECTI ON 68 OF THE I.T. ACT. 3. THE ASSESSEE REITERATED THE SAME SUBMISSIONS BE FORE THE LD. CIT(A). THE LD. CIT(A) CONSIDERING THE WITH DRAWALS IN MARCH, 2010 AND REDEPOSITED IN APRIL, 2010, HAS GIV EN BENEFIT OF RS.9 LAKHS TO THE ASSESSEE. HOWEVER, WITH REGARD TO REST OF THE AMOUNT, THE LD. CIT(A) NOTED THAT THE EXPLANATI ON OF 6 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. ASSESSEE IS NOT ACCEPTABLE AS THE TIME LAG BETWEEN THE WITHDRAWALS AND SUBSEQUENT DEPOSIT IN THE BANK ACCO UNT IS TOO VAST. THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO SUBSTANTIATE THE EXPLANATION OF CASH DEPOSITS IN HER BANK ACCOUN T WERE FROM CASH WITHDRAWALS. SINCE, THE SOURCE OF THE CASH DEP OSIT WAS NOT EXPLAINED TO THE SATISFACTION OF THE AUTHORITIES BE LOW AND NO EVIDENCE WAS FILED WITH REGARD TO PURCHASE OF ANY A LLEGED PROPERTY BY ASSESSEE, THE LD. CIT(A) FOUND THAT ASS ESSEE FAILED TO EXPLAIN SOURCE OF THE CASH DEPOSIT OF RS.26,25,0 00/-. THE LD. CIT(A) RELIED UPON DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 IN WHI CH IT WAS HELD THAT TAXING AUTHORITIES ARE PERMITTED TO LOOK INTO THE CIRCUMSTANCES AND APPLY THE TEST OF HUMAN PROBABILI TIES. BY APPLYING SUCH TEST, THE LD. CIT(A) FOUND THAT THE E XPLANATION OF ASSESSEE OF WITHDRAWALS AND REDEPOSIT IS NOT SATISF ACTORY AND ACCORDINGLY, CONFIRMED THE ADDITION OF RS.26,25,000 /-. THE ASSESSEE IS IN APPEAL CHALLENGING THIS ADDITION. 7 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. 4. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT . THEREFORE, NO ADDITION UNDER SECTION 68 COULD BE MADE. HE HAS RELIED UPON THE ORDER OF THE ITAT, LUCKNOW BENCH IN THE CASE OF ITO VS. KAMAL KUMAR MISHRA (2013) 33 TAXMANN.COM 610 (LUCKN OW- TRIB.) IN WHICH IT WAS HELD AS UNDER : WHERE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNT, ASSESSING OFFICER CANNOT INVOKE PROVISIONS OF SECTION 68 ON BASIS OF DEPOSITS MADE IN BANK ACCOUN T OF ASSESSEE. 4.1. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT WHEN LD. CIT(A) CAN ACCEPT THE EXPLA NATION OF ASSESSEE REGARDING KEEPING OF CASH OF RS.9 LAKHS AT HOME, THE LD. CIT(A) SHOULD HAVE DELETED THE ENTIRE ADDITION. 5. THE LD. D.R, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT AN AIR INFORMATION WAS RECEIVED THAT THERE IS HUGE CASH DE POSIT IN THE 8 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. BANK ACCOUNT OF THE ASSESSEE, WHICH, ASSESSEE FAILE D TO EXPLAIN THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. THE THE ORY EXPLAINED BY ASSESSEE WAS NOT SUBSTANTIATED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. THE UNEXPLAINED CAS H DEPOSIT IN THE BANK ACCOUNT WOULD BE ATTRACTING SECTION 69 OF THE I.T. ACT. MERE MENTIONING OF WRONG SECTION IN THE ORDERS OF THE AUTHORITIES BELOW IS NOT SIGNIFICANT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT ASSESSEE MADE CASH DEPOSITS OF RS.35,25,000/- IN HER BANK AC COUNT MAINTAINED WITH PUNJAB NATIONAL BANK. THE ASSESSEE HAS INCOME FROM SALARY, HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAS NO BUSINESS INCOME IN ASS ESSMENT YEAR UNDER APPEAL. THE ASSESSEE IS ALSO NOT A PROPE RTY DEALER. THE ASSESSEE EXPLAINED BEFORE THE AUTHORITIES BELOW THAT CASH WAS WITHDRAWN FROM HER BANK ACCOUNT TO DEAL IN PROP ERTIES. HOWEVER, ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN S UPPORT OF SAME, IF ANY, TRANSACTION WAS CONDUCTED BY ASSESSEE DEALING IN 9 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. ANY PROPERTY. THE ASSESSEE, THUS, FAILED TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS IN THE BANK ACCOUNT. THE ASSESSEE ALSO FAILED TO EXPLAIN ANY CO-RELATION BETWEEN THE CASH DEPOSIT AND CASH WITHDRAWALS. THE ASSESSEE HAS BEEN KEPT ON ACCUMULA TING THE CASH AT HOME WITHOUT ANY REASONS AND NOTHING IS EXP LAINED THAT WHEN HUGE AMOUNT HAVE BEEN WITHDRAWN THROUGHOUT THE YEAR, WHY A SMALL AMOUNT HAVE BEEN DEPOSITED IN CASH IN T HE SAME BANK ACCOUNT. THE ASSESSEE, FURTHER, EXPLAINED THAT THE PROPERTY DEALER ADVISED HER TO KEEP READY ATLEAST 5 0% OF THE PRICE OF THE PROPERTY. HOWEVER, IT WAS FOUND THAT A SSESSEE HAS WITHDRAWN MORE THAN THE SALE CONSIDERATION OF THE P ROPERTY IN ASSESSMENT YEAR UNDER APPEAL. THEREFORE, WHATEVER C ONTENTION WAS RAISED BEFORE THE A.O. WAS EITHER FOUND FALSE O R WAS NOT SUBSTANTIATED THROUGH ANY EVIDENCE OR MATERIAL ON R ECORD. IT IS, THEREFORE, CLEAR FROM THE FACTS AND CIRCUMSTANCES O F THE CASE THAT ULTIMATELY, ASSESSEE FAILED TO EXPLAIN THE SOU RCE OF THE CASH DEPOSIT IN THE BANK ACCOUNT. EVEN AS AGAINST THE RE TURNED INCOME DECLARED, THE DEPOSIT OF CASH IN THE BANK AC COUNT IS MORE. THEREFORE, ASSESSEE HAS NO EXPLANATION AT ALL FOR DEPOSIT 10 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. OF THE CASH IN THE BANK ACCOUNT. THE FACTS AND CIRC UMSTANCES, THUS, CLEARLY SUPPORT THE CONCLUSION DRAWN BY THE A UTHORITIES BELOW THAT ASSESSEE IS NOT ABLE TO EXPLAIN THE SOUR CE OF THE CASH DEPOSIT IN HER BANK ACCOUNT. THE DECISION OF THE HO NBLE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE (SUP RA), CLEARLY APPLY I.E., WHEN THE TEST OF HUMAN PROBABIL ITIES ARE APPLIED TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE CLEAR THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT IN THE BANK ACCOUNT THROUGH ANY COGENT AND RELIABLE EVIDENCE AND SURROUNDING CIRCUMSTANCES SPEAK AGAINS T THE ASSESSEE. THE EXPLANATION OF ASSESSEE HAS BEEN CORR ECTLY REJECTED BY THE AUTHORITIES BELOW BECAUSE THERE WAS NO EXPLANATION TO THE SATISFACTION OF THE AUTHORITIES BELOW. LEARNED COUNSEL FOR THE ASSESSEE MERELY CONTENDED THAT ASSE SSEE DID NOT MAINTAIN THE BOOKS OF ACCOUNT, THEREFORE, NO AD DITION UNDER SECTION 68 OF THE ACT COULD BE MADE AND RELIED UPON THE DECISION OF ITAT, LUCKNOW BENCH IN THE CASE OF ITO VS. KAMAL KUMAR MISHRA (SUPRA). HOWEVER, HONBLE ALLAHABAD HIGH COU RT IN THE CASE OF CIT VS. JAUHARIMAL GOEL (2006) 201 CTR 54 ( ALL.)/(2008) 11 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. 296 ITR 263 (ALL.) HELD THAT DEPOSIT IN THE BANK ACCOUNT WOULD AMOUNT TO INVESTMENT UNDER SECTION 69 OF THE I.T. A CT. THEREFORE, THE DECISION OF LUCKNOW BENCH CANNOT BE GIVEN PREFE RENCE. WE ARE OF THE VIEW THAT MENTIONING OF WRONG SECTION IN THE ORDERS OF THE AUTHORITIES BELOW WOULD NOT BE FATAL TO THE CASE OF REVENUE. MAY BE TECHNICALLY SECTION 68 IS NOT APPLI CABLE IN THE CASE OF THE ASSESSEE, BUT, ASSESSEE FAILED TO EXPLA IN SOURCE OF THE CASH DEPOSIT IN HER BANK ACCOUNT. THEREFORE, AD DITION WAS RIGHTLY MADE AGAINST THE ASSESSEE FOR UNEXPLAINED C ASH DEPOSIT IN BANK ACCOUNT OF THE ASSESSEE. THERE IS ALSO NO M ERIT IN THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE T HAT WHEN LD. CIT(A) COULD ACCEPT THE EXPLANATION OF ASSESSEE FOR RS.9 LAKHS, THE ENTIRE ADDITION SHOULD HAVE BEEN DELETED . THIS ARGUMENT ITSELF HAS NO FORCE AND IS REJECTED BECAUS E ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT IN THE BANK ACCOUNT AND ALSO FAILED TO EXPLAIN ANY CO-RELATION BETWEEN THE CASH WITHDRAWALS AND CASH DEPOSIT IN HER BANK ACCOU NT. THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE CLEARLY SHOW 12 ITA.NO.6472/DEL./2014 MS. SHASHI GARG, DELHI. THAT ASSESSEES APPEAL HAS NO MERIT, THE SAME IS AC CORDINGLY DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (LP SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 26.03.2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT G BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.