ITO, New Delhi V. Sh. Anil Verma, Gurgaon

ITA 6794/DEL/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7145 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.6794/DEL/2013 ASSESSMENT YEAR: 2005-06 ITO-WARD 25(1), NEW DELHI. VS. MR. ANIL VERMA, FLAT NO.004, SPHINIX TOWER, NILE APARTMENTS, NEAR GURGAON OMEX MALL, SECTOR-49, SOHNA ROAD, GURGAON. TAN/PAN: AEMPV 9651A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SOMIL AGGARWAL, ADV. RESPONDENT BY: SHRI AMIT JAIN, SR.D.R. DATE OF HEARING: 11 04 2018 DATE OF PRONOUNCEMENT: 05 07 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 14.10.2013, PASSED BY LD. CIT (APPEALS)-XXIV, NEW DELHI FOR THE QUANTUM OF AS SESSMENT PASSED U/S.144/148 FOR THE ASSESSMENT YEAR 2005-06. THE REVENUE IS AGGRIEVED BY DELETION OF ADDITION OF RS. 36,67,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED CASH DEPOSITS. 2. THE FACTS IN BRIEF ARE THAT ON THE BASIS OF AIR INFORMATION THAT ASSESSEE HAS DEPOSITED A SUM OF RS . 36.67 I.T.A. NO.6794/DEL/2013 2 LAC DURING THE RELEVANT FINANCIAL YEAR IN HIS SAVIN GS BANK ACCOUNT WITH INDUSTRIAL DEVELOPMENT BANK OF INDIA L TD, THE ASSESSEES CASE WAS REOPENED U/S.147 VIDE NOTICE DA TED 22.03.2012 ISSUED U/S 148. BEFORE THE ASSESSING OFF ICER, THE ASSESSEE HAS FURNISHED THE COPY OF BANK STATEMENT S HOWING THE TOTAL DEPOSIT MADE IN CASH AND CORRESPONDING WITHDRAWALS, WHICH WERE AT RS.36,37,000/- AND RS. 32,67,000/-, RESPECTIVELY. HOWEVER, THE ASSESSING O FFICER NOTED THAT ASSESSEE HAS FAILED TO EXPLAIN THE CASH DEPOSIT AND ACCORDINGLY, THE ENTIRE DEPOSITS WERE TREATED AS IN COME FROM OTHER SOURCES WHILE FRAMING THE ASSESSMENT U/S 144. 3. BEFORE THE LD. CIT (A), IT WAS SUBMITTED THAT ASSESSMENT WAS COMPLETED U/S.144 AND NO PROPER OPPORTUNITY OF BEING HEARD WAS GIVEN BY THE ASSESSING OFFICER TO THE ASS ESSEE. ACCORDINGLY, THE ASSESSEE FURNISHED ADDITIONAL EVID ENCE TO SUBSTANTIATE THE SOURCE OF DEPOSIT IN HIS BANK ACCO UNT. IT WAS FURTHER SUBMITTED THAT ASSESSEE IS A CHARTERED ACCO UNTANT EMPLOYED WITH A COMPANY NAMED AS M/S. FITJEE LTD. W HICH WAS IN THE PROCESS OF ESTABLISHING ITS OFFICE IN HY DERABAD. THE ASSESSEE HAD ACQUIRED THE OFFICE PROPERTIES FOR THE SAID COMPANY FOR ITS OTHER GROUP COMPANY NAMED AS M/S. KARTIKEYA INFRASTRUCTURE AND FINSEC PVT. LTD., DUR ING THE RELEVANT ASSESSMENT YEAR. SINCE THE SAID COMPANY DI D NOT HAVE ANY BANK ACCOUNT IN HYDERABAD, M/S. KARTIKEYA INFRASTRUCTURE DEPUTED THE ASSESSEE TO MAKE INSTANT PAYMENT IN CASH AS AND WHEN REQUIRED. SINCE ASSESSEE HAD MU LTICITY I.T.A. NO.6794/DEL/2013 3 ACCOUNT WITH IDBI BANK, THE SAID COMPANY GAVE CHEQU E OF RS.23 LACS FOR THE PURPOSE OF NEGOTIATING THE DEAL FOR PURCHASE OF OFFICE ON BEHALF OF THE SAID COMPANY WHICH WAS D EPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT ON 02.04.2004 A ND CASH WAS WITHDRAWN ON THE SAME DAY FOR MAKING PAYMENT. HOWEVER, THE DEAL COULD NOT BE MATERIALIZED, AND TH EREFORE, THE CASH WAS RE-DEPOSITED AND THE ENTIRE AMOUNT WAS RETURNED TO THE M/S. KARTIKEYA INFRASTRUCTURE AND F INSEC PVT. LTD. BY CHEQUE. THE SUMMARY OF CASH DEPOSITS AND WITHDRAWALS IN HIS BANK ACCOUNTS WAS EXPLAINED IN T HE FOLLOWING MANNER:- 1. IN IDBI BANK A. TOTAL DEPOSITS RS.36,67,000/- LESS: DEPOSIT OUT OF CASH WITHDRAWAL OF RS.23,00,000/- RECEIVED FROM M/S. KARTIKEYA INFRASTRUCTURE AND FINSEC PVT. LTD. R S.23,00,000/- NET DEPOSIT IN BANK (OTHER THAN 23,00,000/- RS .13,67,000/- B. TOTAL WITHDRAWAL RS.32,63,500/- LESS: WITHDRAWAL OF RS.23,00,000/- RECEIVED RS. 23,00,000/- FROM M/S. KARTIKEYA INFRASTRUCTURE AND FINSEC PVT. LTD. NET OTHER WITHDRAWAL RS.9,63,500/- 2. IN RBS BANK (PREVIOUSLY KNOWN AS ABN AMRO BANK C. TOTAL WITHDRAWAL FROM SALARY ACCOUNT RS.4,86,000/ - LESS: DEPOSIT IN SALARY ACCOUNT RS.1,27 ,900/- NET WITHDRAWAL FROM SALARY ACCOUNT RS.3 ,58,100/- TOTAL WITHDRAWAL FROM REIMBURSEMENT ACCOUNT RS.72,0 00/- LESS: DEPOSIT IN REIMBURSEMENT ACCOUNT I.T.A. NO.6794/DEL/2013 4 NET WITHDRAWALS FROM REIMBURSEMENT ACCOUNT RS.72,00 0/- D. TOTAL WITHDRAWAL DURING A.Y. 2005-06 (B+C) RS.13,93 ,600/- E. UTILIZATION OF CASH IN HAND OPENING CASH IN HAND (AS ON 01.04.2004) RS.4,04,750 /- LESS: CLOSING CASH IN HAND (AS ON 31.3.2005) RS.2 ,76,250/- NET CASH IN HAND UTILIZED FOR DEPOSIT IN BANK RS.1, 28,500/- F. TOTAL AVAILABLE FUNDS WITH ASSESSEE (D+E) RS.15,22, 100/- G. NET DEPOSITS IN BANK AS PER (A) RS.13,67,000/- H. CASH AVAILABLE FOR OTHER DRAWINGS & PERSONAL EXPENDITURE RS.1,55,100/- TOTAL OTHER DRAWINGS FROM BANK RS.1,16,943/- 5. LD. CIT (A) NOTED THAT, SINCE ASSESSEE WAS NOT G IVEN PROPER OPPORTUNITY OF BEING HEARD BY THE ASSESSING OFFICER AND ASSESSMENT HAS BEEN COMPLETED U/S.144, THEREFOR E, HE ADMITED THE ADDITIONAL EVIDENCE AND FORWARDED THE S AME TO THE ASSESSING OFFICER TO OFFER ITS COMMENT AND SUBM IT REMAND REPORT. IN RESPONSE, THE ASSESSING OFFICER HAD SUBM ITTED HIS REMAND REPORT ON THE ADDITIONAL EVIDENCE WHICH HAS BEEN DULY TAKEN NOTE AND CONSIDERED BY THE LD. CIT (A). HE FIRST OF ALL NOTED THE DETAILS OF THE DEPOSITS IN THE BANK A CCOUNT WHICH WAS AS UNDER:- S. NO. PARTICULARS AMOUNT (IN RS.) 1. AMOUNT RECEIVED FROM M/S. KARTIKEYA INFRASTRUCTURE AND FINSEC PVT. LTD. RS.23,00,000/- 2. OUT OF CASH WITHDRAWALS DURING THE YEAR. RS.9,65 ,000/- 3. OUT OF PAST SAVINGS DEPOSITS IN THE BANK ACCOUNT. RS.4,02,000/- TOTAL RS.36,67,000/- 6. THEREAFTER HE NOTED THAT ASSESSEE RECEIVE D SUM OF I.T.A. NO.6794/DEL/2013 5 RS.23 LACS FROM M/S. KARTIKEYA INFRASTRUCTURE ON 02 .04.2004 THROUGH CHEQUE WHICH HAS BEEN DULY CREDITED IN THE ACCOUNT OF THE ASSESSEE AND THE SAME AMOUNT HAS BEEN WITHDR AWN BY HIM IN CASH ON THE SAME DAY WHICH AGAIN HAS BEEN RE - DEPOSITED ON VARIOUS DATES. AFTER DEPOSITING OF THE SE CASH, THE SAME AMOUNT HAS BEEN RETURNED BACK TO M/S. KARTIKEY A INFRASTRUCTURE AND FINSEC PVT. LTD. THROUGH CHEQUE. THUS, THESE ENTRIES HAVE BEEN SQUARED UP DURING THE RELEV ANT ASSESSMENT YEAR AND IT HAS NOT RESULTED IN ANY GAIN / INCOME TO THE ASSESSEE. HE FURTHER NOTED THAT IN THE REMAN D REPORT, ASSESSING OFFICER HAS NOT MADE ANY COMMENT TO CONTR OVERT THE CLAIM OF THE ASSESSEE EITHER FOR THE CASH WITHD RAWN OR THE SUBSEQUENT DEPOSITS. ACCORDINGLY, HE DELETED THE AD DITION OF RS.23 LACS. LD. CIT(A) FURTHER NOTED THAT THE ASSES SEE HAS DEPOSITED SUM OF RS.13,67,000/- WHICH WAS MADE OUT OF CASH AVAILABLE WITH HIM OF RS.15,22,100/- AND THUS, THE SOURCE OF DEPOSIT OF RS.13,67,000/- WAS TREATED TO BE UNEXPLA INED AND THE SAME WAS DELETED. 7. BEFORE US, LEARNED DEPARTMENT REPRESENTATIVE SUB MITTED THAT LD. CIT (A) DID NOT CALL FOR THE BOOKS OF ACCO UNT OF THE ASSESSEE NOR HAS HE VERIFIED THE CONTENTION RAISED BY THE ASSESSEE. HE HAS SIMPLY ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DELETED THE ADDITION; THEREFORE, HE SU BMITTED THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. ON THE OTHER HAND, LEARNED COUNS EL AFTER REFERRING TO THE VARIOUS DOCUMENTS PLACED IN THE PA PER BOOK SUBMITTED THAT EACH AND EVERY CASH DEPOSITS AND WIT HDRAWAL I.T.A. NO.6794/DEL/2013 6 HAVE BEEN EXPLAINED WITH SUPPORTING DOCUMENTS WHICH HAS BEEN PLACED IN THE PAPER BOOK, THEREFORE, THE FINDI NG GIVEN BY THE LD. CIT(A), WHILE DELETING THE SAID ADDITION SH OULD BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDER AS WE LL AS THE MATERIAL PLACED ON RECORD. THE ASSESSING OFFICER IN HIS EX- PARTE ASSESSMENT ORDER U/S.144 HAS SIMPLY ADDED THE ENTIRE DEPOSITS WITHOUT TAKING NOTE OF THE CASH WITHDRAWAL S MADE BY THE ASSESSEE. THE ASSESSEE BEFORE THE LD. CIT (A) H AS FILED ALL THE RELEVANT DOCUMENTS WHICH WAS DULY REMANDED TO T HE ASSESSING OFFICER WHO AGAIN HAS FAILED TO EXAMINE T HE SAME OR GAVE ANY REBUTTAL TO THE EXPLANATION OFFERED BY THE ASSESSEE OR DOCUMENTS FURNISHED. OUT OF TOTAL DEPOSIT OF RS.33, 67,000/-, THE SOURCE OF DEPOSIT OF RS.23 LACS WAS EXPLAINED T O BE FROM M/S. KARTIKEYA INFRASTRUCTURE AND FINSEC PVT. LTD. WHICH WAS RECEIVED BY WAY OF CHEQUE AND SAME WAS WITHDRAWAL O N THE SAME DAY; AND SINCE MONEY WHICH WAS WITHDRAWAN FOR THE PURPOSE OF PURCHASING THE PROPERTY COULD NOT BE FRU CTIFIED, THEREFORE, SAME WAS RE-DEPOSITED AND THE CHEQUE OF THE SAME AMOUNT WAS ISSUED BACK TO M/S. KARTIKEYA INFRASTRUC TURE AND FINSEC PVT. LTD. THUS, THERE IS DIRECT LINK OF THE SOURCE OF DEPOSIT AND AGAIN THE AMOUNT WHICH HAS BEEN WITHDRA WN TO PAY BACK TO THE SAID PARTY. IN SUCH A SITUATION, TH E AMOUNT OF RS.23 LACS CANNOT BE HELD TO BE INCOME FROM UNDISCL OSED SOURCES. I.T.A. NO.6794/DEL/2013 7 9. IN SO FAR AS OTHER DEPOSITS ARE CONCERNED, THE ASSESSEE HAS SUBMITTED THAT TOTAL WITHDRAWAL FROM SALARY ACC OUNT AND OTHER WITHDRAWALS AGGREGATED TO RS.13,93,600/-. APA RT FROM THAT, THERE WERE OPENING CASH IN HAND OF RS.4.05 LA CS WHICH TOTALED TO RS.15,22,100/-. OUT OF THE SAID TOTAL FU ND AVAILABLE WITH THE ASSESSEE THE NET DEPOSIT WAS RS. 13.67 LAC S AS PER THE CHART INCORPORATED ABOVE. IN THE WAKE OF SUCH A VAILABILITY OF CASH WITH THE ASSESSEE, THE DEPOSITS IN THE BANK ACCOUNT OSTENSIBLY STANDS PROVED AND IN ABSENCE OF ANY MATE RIAL ON RECORD, THE FINDING GIVEN BY THE LD. CIT (A) IN DEL ETING THE ADDITION IS CONFIRMED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JULY, 2018. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH JULY, 2018 PKK: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR DATE I.T.A. NO.6794/DEL/2013 8 1. DATE OF DICTATION 04.07.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06.07.2018 3. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./PS 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./PS 7. DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 11. DATE OF DISPATCH OF THE ORDER