Subhash Rastogi, New Delhi V. ITO, New Delhi

ITA 695/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1928 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 04-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained investment

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 695/DEL/2015 ASSESSMENT YEAR: 2008-09 SUBHASH RASTOGI, C/O RAJ KUMAR & ASSOCIATES, CHARTERED ACCOUNTANTS, 4435/7, ANSARI RAOD, DARYAGANJ, NEW DELHI - 110 002 (PAN: AAEPR9312E) VS. ITO, WARD 14(1), NEW DELHI (APPELLANT) (RESPONDENT) ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 03.11.2014 PASSED BY THE LD. CIT(A)-XVII, NEW DELHI RELATING TO ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, THERE IS N O JUSTIFICATION AND LEGALITY FOR ADDITION OF RS. 12,03,000/- BEING TOTAL OF CASH DEPOSITED ON VARIOUS DATES IN KOTAK MAHINDRA BANK, NEW DELHI. ASSESSEE BY SH. RAJ KUMAR, CA DEPARTMENT BY SH. AMIT KATOCH, SR. DR. 2 THE AO FURTHER ERRED IN HOLDING THAT RS. 12,03,000/ - HAS BEEN DEPOSITED IN SINGLE INSTALLMENT ON 31.3.2008. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE LD. CIT (A) ERRED IN SUSTAINING ADDITION OF RS. 11,01,000/- AS ALLEGED UNEXPLAINED INVESTMENT IN SHARE TRANSACTIONS OUT OF TOTAL ADDIT ION OF RS. 65,79,197/- MADE BY THE AO. THE COMPLETE INVESTMENT STANDS FULLY EXPLAINED. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE F ILED ITS RETURN OF INCOME ON 17.2.2009 DECLARING AN INCOME OF RS. 2,00,000/- WHICH WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT THROU GH CASS AND ACCORDINGLY STATUTORY NOTICE U/S. 143(2) OF THE ACT DATED 14.9.2009 WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE, THE AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIM E AND FILED THE NECESSARY DETAILS. DURING THE YEAR UNDER CONSIDER ATION, ASSESSEE HAS SHOWN INCOME UNDER THE HEAD SALARY FROM M/S PARAGON TRADEX OVERSEAS PVT.LTD. RELEVANT DETAILS WERE EXAMINED, BUT AO OBS ERVED THAT THE ASSESSEE DID NOT FILE THE STATE OF AFFAIRS AS ON 31 .3.2008 AND 31.3.2007. AO FURTHER OBSERVED THAT ONE SINGLE CASH TRANSACTIO N OF RS. 12,03,000/- ON 31.3.20008 WITH M/S KOTAK MAINDRA BANK LTD., 229 , BAKHTWAR NCPA MARG, NARIMAN POINT, MUMBAI WAS MADE. IN THIS REGA RD, AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AND IN RESPONSE TO TH E SAME THE ASSESSEE FILED A LETTER DATED 28.12.2010 SUBMITTED AN AFFIDA VIT STATING THEREIN THAT THE CASH TRANSACTION AMOUNTING TO RS. 12,03,000/- IS NOT RELEVANT TO 3 HIM. AO OBSERVED THAT SINCE THE ASSESSEE HAS NOT FI LED COMPLETE DETAILS OF BANK ACCOUNTS MAINTAINED BY HIM DURING THE PERIOD U NDER CONSIDERATION, AND OTHER DOCUMENTS LIKE BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND STATEMENTS OF AFFAIRS ETC, HENCE, IN THE ABSENCE OF THESE DOCUMENTS / DETAILS THE SOURCE OF CASH DEPOSIT CANNOT BE TREATE D AS EXPLAINED IN THE HANDS OF THE ASSESSEE MERELY ON THE BASIS OF FILING OF AFFIDAVIT. HENCE, THE CASH DEPOSIT AMOUNTING TO RS. 12,03,000/- REMAIN UN EXPLAINED IN THE HANDS OF THE ASSESSEE AND WAS ADDED BY THE AO, WHIC H WAS UPHELD BY THE LD. CIT(A). FURTHER, THE AO ADDED THE SHARE TRANSAC TION FOR RS. 65,79,187/- HOLDING THAT THE SOURCE OF INVESTMENT I S UNEXPLAINED AND LD. CIT(A) DELETED THE WHOLE ADDITION EXCEPT RS. 11,01, 000/- ON THE GROUND THAT INVESTMENT TO THIS EXTENT REMAINS UNEXPLAINED. AGAINST THE LD. CIT(A)S ACTION, THE ASSESSEE IS IN APPEAL BEFORE T HE TRIBUNAL. 3. LD. COUNSEL FOR THE ASSESSEE STATED THERE IS NO JUSTIFICATION AND LEGALITY FOR ADDITION OF RS. 12,03,000/- BEING TOTA L OF CASH DEPOSITED ON VARIOUS DATES IN KOTAK MAHINDRA BANK, NEW DELHI. H E FURTHER SUBMITTED THAT THE AO FURTHER ERRED IN HOLDING THAT RS. 12,03 ,000/- WHICH HAS BEEN DEPOSITED IN SINGLE INSTALLMENT ON 31.3.2008. HE FU RTHER SUBMITTED THAT LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 11,01,000/- AS ALLEGED UNEXPLAINED INVESTMENT IN SHARE TRANSACTIONS OUT OF TOTAL ADDITION OF RS. 65,79,187/- MADE BY THE AO. THE COMPLETE INVES TMENT STANDS FULLY EXPLAINED, HENCE, THE ADDITIONS IN DISPUTE MAY BE D ELETED AND APPEAL OF THE ASSESSEE MAY BE ALLOWED. 4 4. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON T HE ORDER OF THE LD. CIT(A) AND STATED HE HAS PASSED A WELL REASONED ORD ER, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE IMPUGNED ORDER. WITH REGARD TO GROUND NO. 1 REL ATING TO ADDITION OF RS. 12,03,000/- BEING TOTAL OF CASH DEPOSITED ON VA RIOUS DATES IN KOTAK MAHINDRA BANK, NEW DELHI IS CONCERNED, WE FIND THAT IN KOTAK MAHINDRA BANK, TOTAL CASH DEPOSITED IN THE YEAR WAS RS. 12,0 3,000/-. THE AO ADDED THE SAME AS NOT SATISFIED WITH THE SOURCE AND LD. C IT(A) CONFIRMED THE FINDINGS OF THE AO. WE NOTE FROM THE ASSESSMENT ORD ER THAT IT IS A SINGLE CASH DEPOSIT TRANSACTION OF RS. 12,03,000/- ON 31.3 .2008. HOWEVER, IT IS THE TOTAL AMOUNT OF CASH DEPOSITS ON LARGE NUMBER OF DATES IN THE SAID BANK DURING THE YEAR WHICH IS RS. 12,03,000/-. HOWE VER, THE COMPLETE CASH IS OUT OF THE CASH IN HAND AS PER CASH A/C OF WHOLE YEAR. NO DISCREPANCY POINTED OUT IN THE SAID CASH ACCOUNT AN D THE SOURCE OF CASH DEPOSIT IS OUT OF CASH IN HAND. THE MAIN SOURCE OF CASH AVAILABILITY IS THE CASH WITHDRAWAL FROM THE SAME BANK ACCOUNT AS APPAR ENT FROM THE CASH ACCOUNT AND BANK STATEMENT. HENCE, THE ADDITION SU STAINED BY THE LD. CIT(A) IS EXPLAINED AND ACCORDINGLY THE SAME IS DEL ETED. 5.1 WITH REGARD TO GROUND NO. 2 RELATING TO SUSTAIN ING THE ADDITION OF RS. 11,01,000/- ON ACCOUNT OF UNEXPLAINED INVESTMEN T IN SHARE TRANSACTIONS IS CONCERNED, WE FIND THAT THE AO ADDE D SHARE TRANSACTIONS FOR RS. 65,79,187/- HOLDING THAT THE SOURCE OF INV ESTMENT IS UNEXPLAINED 5 AND THIS AMOUNT INCLUDED RS. 11,01,000/- PAID FROM KOTAK MAHINDRA BANK TO INDIA BULLS ON 15.9.07 AND ALSO THE LD. C IT(A) DELETED THE WHOLE ADDITION EXCEPT RS. 11,01,000/- ON THE GROUND THAT INVESTMENT TO THIS EXTENT REMAINS UNEXPLAINED. IT IS NOTED THAT RS. 1 1,01,000/- PAID TO INDIA BULLS FROM KOTAK MAHINDRA BANK THROUGH BANKI NG CHANNEL ON 15.9.2007. IT WAS THE INITIAL FIRST PAYMENT TO I NDIA BULLS AS A MARGIN MONEY FOR COMMENCEMENT OF SHARE TRANSACTIONS WITH INDIA BULLS, AFTER WHICH NO FURTHER PAYMENT WAS MADE DURING THE YEAR A ND THE ACCOUNT STOOD PERIODICALLY SETTLED ONLY THROUGH THE SALE P ROCEEDS OF SHARES. IN VIEW OF ABOVE, THE KOTAK MAHINDRA BANK STANDS FULLY EXPLAINED DURING ASSESSMENT. EVEN SPECIFICALLY, THE SOURCE OF RS. 1 1,01,000/- IS MAINLY FOLLOWING TWO IMMEDIATE PRECEDING CREDITS IN THE BA NK NAMELY:- RS. 6,72,534/- ON 10.9.2007 RS. 4,83,489/- ON 11.9.2007 TOTAL RS. 11,56,023/- 5.2 EVEN THE SOURCE OF THESE TWO CREDITS STOOD EXPLAINE D. RS. 6,72,534/- WAS TAKEN FROM LOAN FROM ICICI BANK AND THE LOAN CHEQUE WAS DEPOSITED IN KOTAK MAHINDRA BANK. RS. 4,83,48 9/- LOAN TAKEN FROM HDFC BANK (APPEARING IN HDFC BANK STATEMENT ON 30.8 .07, HOWEVER, CHEQUE NO. 984643 MATCHES IN HDFC BANK STATEMENT AS WELL AS IN KOTAK MAHINDRA BANK STATEMENT). HENCE, THE SOURCE IS VERY APPARENT AND CLEAR AND ACCORDINGLY THE ADDITION IN DISPUTE IS HEREBY D ELETED. 6 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 20-11-2018. SD/- SD/- (N.K. BILLAIYA) [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBE R DATE:20/11/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES