DCIT, Solan V. Shri Ish Kapoor, Solan

ITA 648/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77175 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWIN S

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 648/CHD/2013 ASSESSMENT YEAR: 2008-09 DCIT . VS. SHRI ISH KUMAR CIRCLE SEC-4, PARWANOO PARWANOO,SOLAN SOLAN PAN NO. AAZPK0281G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. ASHWIN S RESPONDENT BY : SHRI SURINDER BABBAR DATE OF HEARING : 26/06/2014 DATE OF PRONOUNCEMENT : 09.07.2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 26/03/2013 OF CIT (APPEALS), SHIMLA, H.P. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1) ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CIT(A)HAS ERRED IN DELETING THE ADDITION OF RS. 18,34,502/-OUT OF THE TOTAL ADDITION OF 82,84,278/- MADE BY THE A.O. AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED DEPOSITS IN VARIOUS BANK ACCOUNTS OF THE ASSESSEE JOINTLY HELD WITH HIS WIFE. 2) ON THE FACT AND CIRCUMSTANCES THE LD.CIT(A) HAS FURTHER ERRED IN DELETING THE ADDITION OF RS. 1,80,000/- OUT OF ADDITION OF RS. 11,93,000/- MADE BY THE A.O. ON ACCOUNT OF CREDIT ENTRIES IN UNDISCLOSED BANK ACCOUNT NO. 014/9810 WITH BANK OF BARADA. GROUND NO. 1 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG THE ASSESSMENT PROCEEDINGS ON AN ENQUIRY BY THE ASSESSING OFFICER THE ASSESSEE SU BMITTED THAT HE WAS MAINTAINING FOLLOWING BANK ACCOUNTS : 2 I. BANK OF BARODA, PARWANOO A/C NO. 12800200007046 II. BANK OF BARODA, PARWANOO A/C NO. 1280020000716 5 III. BANK OF BARODA, PARWANOO COMPUTER LOAN ACCOUNT NO. 12800600000326 IV. ICICI BANK, CHANDIGARH CAR LOAN SAFARI ACCOUNT V. INDIA BULLS, CHANDIGARH A/C NO. HHLCHD00012723 THE AO NOTICED THAT THESE ACCOUNTS WERE DULY REFLEC TED IN THE BALANCE SHEET. ON FURTHER ENQUIRY ASSESSEE SUBMITTED THAT NO UNSECURED LOAN H AVE BEEN TAKEN BY THE ASSESSEE. 4. THEREAFTER ASSESSING OFFICER MADE ENQUIRIES FROM M/S INDIABULLS CHANDIGARH AND ICICI BANK CHANDIGARH REGARDING REPAYMENT OF THE LO AN. SOME MORE ENQUIRIES WERE CONDUCTED FROM BANKS OF PARWANOO AND AIR INFORMATIO N WAS ALSO DOWNLOADED. 5. THESE ENQUIRIES REVEALED THAT ASSESSEE WAS FURT HER MAINTAINED THE FOLLOWING BANK ACCOUNTS : SR. NO. NAME OF THE ACCOUNT HOLDER NAME OF THE BANK ACCOUNT NO. 1. SH. ISH KAPOOR & SMT. KANTA KAPOOR JOINT ACCOUNT HSBC, SECTOR-9, CHANDIGARH 218226462 2. SMT. KANTA KAPOOR & ISH KAPOOR JOINT ACCOUNT AXIS BANK, CHANDIGARH 302010100019178 3 SH. ISH KAPOOR AXIS BANK, KALKA 787070700002271 4 SMT. KANTA KAPOOR BANK OF BARODA, PARWANOO 12800100009817/2005929 5 SMT. KANTA KAPOOR AND SH. ISH KAPOOR JOINT ACCOUNT BANK OF BARODA, PARWANOO 12800100010687/2007198 6 SH. ISH KAPOOR BANK OF BARODA 12800100009810 7 SMT. KANTA KAPOOR AND SH. ISH KAPOOR JOINT ACCOUNT STATE BANK OF INDIA, PARWANOO 1031200076429 8 SH. ISH KAPOOR BANK OF BARODA, PARWANOO 1280020000218 IT WAS NOTICED THAT IN SOME OF THESE BANKS HUGE CAS H WAS DEPOSITED AND ASSESSEE WAS ASKED TO FURNISH THE EXPLANATION. IN RESPONSE IT WA S STATED AS UNDER : 1. THE AMOUNTS DEPOSITED IN THE JOINT SAVING BANK ACCOUNT OF ISH KAPOOR AND KANTA KAPOOR WITH HSBC, CHANDIGARH HAVE BEEN DEPOSITED BY SMT. KANTA KAPOOR OUT OF ADVANCES RECEIVED AGAIN ST SALE OF LAND AT RAMSHEHAR AMOUNTING TO RS. 5,00,000/- AND RS. 12,00 ,000/- RECEIVED AS ADVANCE FROM LATE SH. NASIB SINGH SON OF SH. RAI SI NGH RESIDENT OF RANDHAN GHORO TEHSIL AND DISTT. SOLAN (H.P) AGAINST THE SALE OF LAND AT VILLAGE SHAMOGA, TEHSIL RAJGARH, DISTT. SIRMAUR(H.P .), RAJGARH, KANTA KAPOOR IS ALSO INCOME TAX ASSESSEE AND IS FILING HE R RETURNS SEPARATELY WITH YOU. THIS AMOUNT DOES NOT BELONG TO SH. ISH KA POOR AND MAY BE TREATED AS RECEIPT OF KANTA KAPOOR. 2. AN AMOUNT OF RS. 67,000/- WAS DEPOSITED IN THE S TATE BANK OF INDIA, PARWANOO ON 20.04.2007 IN THE JOINT ACCOUNT OF ISH KAPOOR AND KNATA KAPOOR. OUT OF RS. 67,000/-, RS. 20,000/- WER E DEPOSITED BY ISH KAPOOR OUT OF HIS WITHDRAWALS FROM THE SHIVA ASSOCI ATES ON 12.04.2007 AND RS. 47,000/- WERE DEPOSITED BY KANTA KAPOOR OUT OF HER RENTAL INCOME OF RS. 32,000/- RECEIVED ON 15.04.2007 AND 19.04.20 07 AND RS. 15,000/- RECEIVED AS SECURITY IN CASH ON 19.04.2007. 3 3. THE AMOUNT DEPOSITED IN THE BANK OF BARODA SAVIN G ACCOUNT NO. 2007198 OF MRS. KANTA KAPOOR ARE SECURITIES AND REN T RECEIVED BY HER DURING THE YEAR FOR THE PROPERTIES ALREADY WRITTEN IN OUR PREVIOUS LETTERS. SHE IS ASSESSABLE SEPARATELY. 4. THE AMOUNT DEPOSITED IN THE BANK ACCOUNT NO. 981 0 WITH BANK OF BARODA, PARWANOO BELONG TO SH. ISH KAPOOR. SH. ISH KAPOOR IS SERIOUSLY ILL AND IS ADMITTED IN THE HOSPITAL AT PRESENT. WE ARE UNABLE TO EXPLAIN THE SOURCES OF DEPOSITED WHICH WILL BE EXPLAINED BY HIM ON HIS RELIEVING FROM HOSPITAL. 5. DEPOSIT IN ACCOUNT NO. 2005929 OF KANTA KAPOOR BELONGS TO SMT. KANTA KAPOOR WHO IS ALSO ASSESSEE WITH YOU. 6. THE PAYMENT OF INDIA BULLS HOME LOANS AND ICICI BAN K AGAINST HOUSE LOAN OF SH. ISH KAPOOR HAVE BEEN PARTLY MADE SH. ISH KAPOOR AND PARTLY BY HIS WIFE SMT. KANTA KAPOOR OUT OF THEIR S AVING ACCOUNTS AND CASH INCOMES. 7. THE DEPOSIT WITH HSBC, AXIS BANK AND WITH BANK OF B ARODA WHICH BELONGS TO KANTA KAPOOR MAY BE ASSESSED IN HER HAND S AND SHE IS SEPARATE ASSESSEE. THIS REPLY WAS NOT ACCEPTED AND ULTIMATELY ADDITION AMOUNTING TO RS. 82,84,278/- WAS MADE ON ACCOUNT OF UNDISCLOSED INCOME TOWARDS DEPOS IT OF THE CASH IN THE ABOVE SAID BANKS. OUT OF THE ABOVE THE LD. CIT(A) HAS DELETED ADDITION TO THE EXTENT OF RS. 18,34,502/- AND THE BALANCE ADDITION HAVE BEEN CONF IRMED BY HER. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE HAS ACCEPTED THE BALANCE ADDITION AND HAS NOT FILED ANY APPEAL THEREFORE WE ARE NOT ASKING THE DETAILED EXPLANATION AND REASONS FOR MAKING THE ADDITION AS WE ARE CONCE RNED ONLY WITH THE DELETION OF ADDITION AMOUNTING TO RS. 18,34,502/-. 7. ON APPEAL THE LD. CIT(A) ACCEPTED THE SUBMISSION THAT DEPOSIT ENTRIES AMOUNTING TO RS. 9 LACS WERE TRANSFER ENTRY FROM ANOTHER BANK ACCOUNT OF SMT. KANTA KAPOOR. FURTHER SUM OF RS. 5,19,000/- WAS ACCEPTED BECAUSE SAME WAS ON ACCOUNT OF RENT RECEIPT OF SMT. KANTA KAPOOR, SUM OF RS. 2,25,500/- WAS ACC EPTED BECAUSE SAME WAS ON ACCOUNT OF RENTAL INCOME OF SMT. KANTA KAPOOR, SUM OF RS. 1 ,70,002/- WAS ACCEPTED BECAUSE IT WAS A CASE OF THREE CHEQUES BEING DISHONORED LASTLY SUM OF RS. 20,000/- WAS ACCEPTED BECAUSE OF THE WITHDRAWAL OF THE ASSESSEE AND DEPOS IT OF THE SAME IN SBI. 8. BEFORE US LD. DR STRONGLY SUPPORTED THE ORDER O F ASSESSING OFFICER. 9. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE S TRONGLY SUPPORTED THE IMPUGNED ORDER. 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND LD. CIT(A) HAS DISCUSSED THIS ISSUE IN DETAIL. THE ADDITION DELETED BY THE LD. CI T(A) ARE DISCLOSED AT PARA 3.14, 3.16, 3.19,3.24, AND 3.28 WHICH ARE AS UNDER : 4 3.14 AS REGARDS THE EXPLANATION THAT THE REMAININ G THREE DEPOSIT ENTRIES AMOUNTING TO RS. 9 LACS WERE THE TRANSFER ENTRIES F ROM BANK ACCOUNT NO. 19178 (SUPRA) OF SMT. KANTA KAPOOR WITH THE AXIS BA NK, THE SAME IS FOUND TO BE FACTUALLY CORRECT. IT IS NOTED THAT ALL THE U NEXPLAINED DEPOSITS MADE IN THE GIVEN BANK ACCOUNT WITH AXIS BANK HAVE ALSO BEEN ADDED BACK BY THE A.O. TO THE TAXABLE INCOME OF THE APPELLANT. TH EREFORE, THE CREDIT FOR THE TRANSFER OF AMOUNTS FROM THE SAID BANK ACCOUNT IS REQUIRED TO BE ALLOWED TO THE APPELLANT, OTHERWISE THE ADDITION WO ULD RESULT IN DOUBLE ADDITION. ACCORDINGLY THE SOURCE OF DEPOSITS TO THE TUNE OF RS. 9 LACS IN THE HSBC ACCOUNT OF THE APPELLANT IS CONSIDERED EXPLAIN ED. THE ADDITION TO THIS EXTENT IS THEREFORE, DIRECTED TO BE DELETED. 3.16 THE APPELLANTS SUBMISSIONS HAVE BEEN DULY CON SIDERED WITH REFERENCE TO THE RELEVANT DOCUMENT. THE APPELLANTS CONTENTION R EGARDING THE DEPOSIT OF RS. 5,19,000/- BY WAY OF VARIOUS RENT RECEIPTS OF S MT. KANTA KAPOOR IS FOUND TO BE FACTUALLY CORRECT. HENCE THE SOURCE OF CASH DEPOSIT TO THE TUNE OF RS. 5,19,000/- IS TREATED AS EXPLAINED AND THE A DDITION TO THAT EXTENT IS DIRECTED TO BE DELETED. 3.19 THE APPELLANTS SUBMISSIONS REGARDING THE RENT RECEIPTS AMOUNTING TO RS. 1,49,500/- AND RECEIPT OF SECURITY AGAINST THE RENT ED PREMISES AMOUNTING TO RS. 76,000/- STAND VERIFIED WITH REFERENCE TO TH E RELEVANT DOCUMENTARY EVIDENCE AND WITH REFERENCE TO THE RENTAL INCOME RE TURNED BY THE APPELLANTS WIFE SMT. KANTA KAPOOR. HENCE THE SOURC E OF DEPOSITS TO THE TUNE OF RS. 2,25,500/- IS HELD AS EXPLAINED AND THE ADDITION TO THAT EXTENT IS DIRECTED TO BE DELETED. 3.24 THE APPELLANTS SUBMISSIONS HAVE BEEN DULY CON SIDERED. AS REGARDS HIS CONTENTION THAT THE DEPOSIT OF RS. 1 LAC IS ON ACCO UNT OF CONSUMER LOAN RECEIVED FROM THE BANK, THE SAME STANDS VERIFIED FR OM THE DETAILS OF THE BANK ACCOUNT. IT IS NOTED THAT THE AMOUNT OF RS. 1 LAC CREDITED IN THE APPELLANTS ACCOUNT ON 25/05/2007 BY DEBIT FROM THE LOAN ACCOUNT 5302. SIMILARLY, THE CONTENTION THAT THE CREDIT ENTRIES A MOUNTING TO RS. 70,002/- ARE ON ACCOUNT OF THREE CHEQUES DISHONORED, THE SAM E IS ALSO FOUND TO BE CORRECT WITH REFERENCE TO THE RELEVANT DOCUMENTS. I T IS NOTED THAT THE THREE CHEQUES OF RS. 23,334/- EACH WERE RETURNED DUE TO I NSUFFICIENT FUNDS ON 01/11/2007, 04/12/2007 AND 02/01/2008. HENCE THE SO URCE OF DEPOSITS TO THE TUNE OF RS. 1,70,002/- IS CONSIDERED AS EXPLAIN ED AND THE ADDITION TO THAT EXTENT IS DIRECTED TO BE DELETED. 3.28 THE APPELLANTS SUBMISSIONS HAVE BEEN DULY CON SIDERED WITH REFERENCE TO THE RELEVANT RECORDS. IT IS NOTED THAT THE SAME PLE A WAS TAKEN BY THE APPELLANT DURING THE COURSE OF THE ASSESSMENT PROCE EDINGS BUT IT WAS BRUSHED ASIDE BY THE AO SIMPLY ON THE GROUND THAT T HE PLEA WAS TAKEN AS AN AFTERTHOUGHT. HOWEVER, THE ASSESSING OFFICER HAS NOT DENIED THE FACT THAT THERE WERE WITHDRAWALS AMOUNTING TO RS. 4,55,5 15/- FROM M/S SHIVA ASSOCIATES. HENCE THE BENEFIT OF THE DEPOSIT OF RS. 20,000/- OUT OF THE SAID WITHDRAWALS IS ALLOWED TO THE APPELLANT AND THE DEP OSIT TO THAT EXTENT IN THE STATE BANK OF INDIAS ACCOUNT IS CONSIDERED EXP LAINED. THE ADDITION OF RS. 20,000/- IS ACCORDINGLY DIRECTED TO BE DELETED. THE ABOVE PARAS CLEARLY SHOW THAT LD. CIT (A) HAD D ELETED THE ADDITIONS AFTER VERIFYING THE FACTS. SINCE REVENUE HAS NOT BEEN ABL E TO CONTROVERT THESE FINDINGS BY SHOWING CONTRARY EVIDENCE OR BY SHOWING FACTUAL FIN DING OF THE LD. CIT(A) IS NOT CORRECT. THEREFORE WE FIND NOTHING WRONG IN THE ORDER OF LD. CIT(A) AND CONFIRM THE SAME. GROUND NO. 2 1. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDING AO HAS NOTED THAT THERE WERE CREDIT ENTRIES TOTALING TO RS . 11,93,000/- IN THE UNDISCLOSED BANK 5 ACCOUNT NUMBER 014/9810 OF THE ASSESSEE WITH BANK O F BARODA PARWANOO. ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE SOURCES O F THESE CREDIT ENTRIES. IN RESPONSE IT WAS MAINLY STATED THAT ASSESSEE WAS SERIOUSLY ILL AND A DMITTED TO THE HOSPITAL AND THEREFORE THE DETAILS WOULD BE EXPLAINED AFTER RELIEVING FROM THE HOSPITAL. 2. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS NOT EXPLAINED THE ENTRIES DESPITE VARIOUS OPPORTUNITIES AND THEREFORE MADE ADDITION O F RS. 11,93,000/-. 3. ON APPEAL IT WAS STATED THAT THIS BANK ACCOUNT W AS CLOSED LONG BACK IN MARCH 2008 ITSELF. IT WAS FURTHER STATED THAT THIS WAS IN DIVIDUAL ACCOUNT AND ASSESSEE WAS CARRYING ON THE BUSINESS IN THE NAME OF M/S SHIVA A SSOCIATES AND M/S SHIVA PHOTO CENTRE AND ACCOUNT WERE BEING MAINTAINED FOR THESE BUSINESSES AND ALL THE ENTRIES HAVE BEEN DISCLOSED. THEREAFTER SOURCE WERE EXPLAINED AS UNDER: DATE AMOUNT DESCRIPTION 27.04.2007 3,50,000 CASH RECEIVED FROM SH. ROHIT SI NGLA AGAINST SALE OF BOOTH NO. 5 SECTOR 3 PARWANOO 30.04.2007 6,00,000 CH. RECEIVED FROM SH. ROHIT SIN GLA AGAINST SALE OF BOOTH NO. 5, SECTOR 3 PARWANOO 25.05.2007 10,000 OUT OF CASH IN HAND 28.06.2007 60,000 CH. DEPOSITED AND DISHONORED (ALS O SEE DR. ENTRY) 03.07.2007 60,000 CH. DEPOSITED AND DISHONORED (ALS O SEE DR. ENTRY) 01.08.2007 60,000 CH. DEPOSITED AND DISHONORED (ALS O SEE DR. ENTRY) 07.08.2007 30,000 OUT OF CASH IN HAND 07.08.2007 17,000 OUT OF CASH IN HAND 17.08.2007 3,000 OUT OF CASH IN HAND 17.09.2007 3,000 OUT OF CASH IN HAND 4. LD CIT(A) FOUND FORCE IN RESPECT OF ENTRIES AMOU NTING TO RS. 1,80,000/- ON ACCOUNT OF CHEQUE DEPOSITED WHICH WERE LATER ON DIS MISSED AND ALLOWED THE RELIEF FOR RS. 1,80,000/- AND CONFIRM THE BALANCE ADDITION. 5. THE ASSESSEE HAS NOT FILED ANY APPEAL FOR THE AD DITION CONFIRMED BY THE LD. CIT (A) THEREFORE WE ARE NOT GOING INTO DETAIL IN RESPE CT OF OTHER ENTRIES. ENTRIES WHICH HAVE BEEN DELETED BY LD. CIT(A) LD. DR STRONGLY SUPPORTE D THE ORDER OF ASSESSING OFFICER. 6. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE S UPPORTED THE IMPUGNED ORDER. 7. AFTER CONSIDERING THE RIVAL SUBMISSION WE FIND T HAT THIS ISSUE HAS BEEN ADJUDICATED BY LD. CIT(A) VIDE PARA 3.32 WHICH IS AS UNDER. 6 3.32 THE APPELLANT HAS OFFERED HIS EXPLANATION REG ARDING THE SOURCE OF THE CREDIT ENTRIES IN THE GIVEN BANK ACCO UNT AT THE STAGE OF APPELLATE PROCEEDINGS. IT HAS BEEN EXPLAIN ED THAT THE THREE ENTRIES OF RS. 60,000/- EACH WERE ON ACCOUNT OF THE DISHONORING OF THREE CHEQUES. THE SAID CONTENTION O F THE APPELLANT IS FOUND TO BE FACTUALLY CORRECT WITH REF ERENCE TO THE DETAILS OF THE GIVEN BANK ACCOUNT. HENCE THE CR EDIT ENTRIES TO THE TUNE OF RS. 1,80,000/- ARE TREATED AS EXPLAI NED AND THE ADDITION TO THAT EXTENT IS DIRECTED TO BE DELETED. 8. LD. DR HAS NOT PRODUCED ANY EVIDENCE TO CONTROVE RT THE FINDINGS OF LD. CIT(A) BY SHOWING ANY MATERIAL TO THE CONTRARY. THIS BEING THE FACTUAL FINDING AND ACCORDINGLY WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) IN ABSENCE OF ANY CONTRARY MATERIAL BEFORE US. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09.07.20 14 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09 TH JULY, 2014 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR