Shri Prafulla Ranjan, Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 702/LKW/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83422 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 03-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Opportunity of being heard; Principle of natural justice
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.702/LKW/2014 ASSESSMENT YEAR:2010-11 SHRI. PRAFULLA RANJAN D-1102, ROHTASH PLUMERIA APARTMENT VIBHUTI KHAND, GOMTI NAGA LUCKNOW V. DY. CIT-2 LUCKNOW TAN/PAN:ACVPR4318R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. AMIT NIGAM, D.R. DATE OF HEARING: 20 10 2014 DATE OF PRONOUNCEMENT: 03 12 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WHICH IS ILLEGAL, IMPROPER AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. (2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WITHOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD AND WITHOUT CONSIDERING THE SUBMISSION MADE BEFORE HIM AND WITHOUT CONSIDERING THE FACT THAT THE REQUIRED INFORMATION COULD NOT BE FURNISHED BEFORE HIM DUE TO THE ILLNESS OF THE APPELLANT'S MOTHER IN LAW WHO WAS IN COMA. (3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED :- 2 -: IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.5,25,000/- MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF DEPOSIT OF CASH IN BANK. (4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.1,80,000/- MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF HOUSEHOLD EXPENSES. (5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INTEREST CHARGED U/S 234 B AND 234 C. 2. THE MAIN ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPOSIT OF RS.5.25 LAKHS IN THE BANK ACCOUNT OF THE ASSESSEE. THE ADDITION WAS MADE ON THE GROUND THAT THE ASSESSEE COULD NOT FURNISH THE SOURCE OF DEPOSIT IN THE BANK ACCOUNT; WHEREAS ACCORDING TO THE ASSESSEE HE HAS EXPLAINED BEFORE THE ASSESSING OFFICER THAT RS.3 LAKHS WAS RECEIVED FROM HIS MOTHER AND RS.2.25 LAKHS WAS RECEIVED FROM HIS WIFE. HE HAS FURNISHED CONFIRMATIONS, CREDITWORTHINESS, IDENTITY, ETC. TO PROVE THE GENUINENESS OF THE TRANSACTION. BEING NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.5.25 LAKHS IN THE HANDS OF THE ASSESSEE, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A), BUT THE ASSESSEE DID NOT FIND FAVOUR WITH HIM. 3. NOW THE ASSESSEE IS BEFORE US AND HAS FURNISHED A COPY OF CASH BOOK ACCOUNT DEMONSTRATING AS TO HOW HE GENERATED CASH FOR ITS DEPOSITION IN THE BANK ON TWO DIFFERENT DATES. WITH REGARD TO SOURCE OF GIFT/CASH WITH THE ASSESSEES MOTHER AND HIS WIFE, IT WAS CONTENDED THAT BOTH OF THEM HAVE RECEIVED CASH ON ACCOUNT OF CANCELLATION OF SALE AGREEMENT FROM SHRI. ANAND MOHAN CHITRANSHI, TO WHOM THEY HAVE GIVEN ADVANCE FOR PURCHASE OF PROPERTY. THE ASSESSEE HAS FILED COPIES OF SALE AGREEMENT AND CANCELLATION :- 3 -: AGREEMENT IN SUPPORT OF HIS CONTENTION WITH REGARD TO THE AVAILABILITY OF CASH. HE HAS ALSO PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS:- 1. RAKESH KANDWAL VS. ITO, 2004 (3) MTC 961. 2. MOHD. USMAN, PROP. M.U. EATING POINT VS. ITO, 2005 (6) MTC 361. 3. ACIT VS. SMT. QAISER JAHAN BEGUM, 2006 (8) MTC 621. 4. THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 5. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT BEFORE THE ASSESSING OFFICER ASSESSEE HAS EXPLAINED THE SOURCE OF DEPOSIT OF CASH IN HIS BANK ACCOUNT BY STATING THAT THIS CASH OF RS.5.25 LAKHS WAS RECEIVED FROM HIS MOTHER AND HIS WIFE. THE SOURCE OF AVAILABILITY OF CASH WITH HIS WIFE AND MOTHER WAS ALSO EXPLAINED. OUR ATTENTION WAS ALSO INVITED TO THE SALE AGREEMENT AND ITS CANCELLATION AGREEMENT IN ORDER TO ESTABLISH THE AVAILABILITY OF CASH WITH HIS WIFE AND MOTHER. SINCE THE ASSESSEE HAS PLACED ALL THE RELEVANT EVIDENCE IN ORDER TO ESTABLISH THE SOURCE OF DEPOSIT IN THE BANK ACCOUNT, THE IMPUGNED ADDITION IS NOT CALLED FOR. 6. WE HAVE ALSO CAREFULLY EXAMINED THE JUDGMENTS REFERRED TO BY THE ASSESSEE AND WE FIND THAT IT HAS BEEN REPEATEDLY HELD BY VARIOUS JUDICIAL FORUM THAT WHEREVER THE ASSESSEE IS ABLE TO FURNISH EVIDENCE WITH REGARD TO THE AVAILABILITY OF CASH FOR ITS DEPOSIT IN BANK, NO ADDITION IS CALLED FOR UNDER SECTION 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT. WE, THEREFORE, FIND NO MERIT IN THE ADDITION AND ACCORDINGLY DELETE THE SAME. 7. THE OTHER GROUND IN THIS APPEAL RELATES TO ADDITION OF RS.1.80 LAKHS MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL. :- 4 -: 8. IT IS NOTICED FROM THE ORDERS OF THE LOWER AUTHORITIES THAT THE ASSESSEE HIMSELF HAS DECLARED HOUSEHOLD EXPENSES AT RS.12,000/- PER MONTH WHICH WAS MADE BY HIS WIFE, AS THE WIFE OF THE ASSESSEE WAS ALSO DOING SOME BUSINESS. BUT IT WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND HE ESTIMATED THE HOUSEHOLD EXPENSES AT RS.15,000/- PER MONTH AND MADE ADDITION OF RS.1.80 LAKHS IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAS FURNISHED THE RELEVANT EXPLANATIONS WITH REGARD TO THE SOURCE TO MEET THE HOUSEHOLD EXPENSES BY ADMITTING THAT HOUSEHOLD EXPENSES ON AN AVERAGE WAS OF RS.12,000/- PER MONTH WHICH WAS MAINLY MADE BY HIS WIFE. IN THE LIGHT OF THIS EVIDENCE, WE ARE OF THE VIEW THAT THE HOUSEHOLD EXPENSES SHOULD NOT BE ESTIMATED WITHOUT ANY COGENT REASONS. IF THE ASSESSING OFFICER HAS DOUBTED THE EXPLANATIONS OF THE ASSESSEE, HE COULD HAVE MADE NECESSARY ENQUIRIES WITH REGARD TO THE SOURCE OF EARNING OF THE WIFE OF THE ASSESSEE AND ALSO CONTRIBUTION MADE BY THE ASSESSEE. BUT HE DID NOT DO THE SAME AND MADE ADDITION ON CONJECTURES AND SURMISES. WE, THEREFORE, FIND NO MERIT THEREIN AND WE ACCORDINGLY DELETE THE SAME. 9. GROUND NO.5 IS CONSEQUENTIAL IN NATURE AND NEEDS NO INDEPENDENT ADJUDICATION. 10. IN THE RESULT, THEAPPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- S SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:3 RD DECEMBER, 2014 JJ:2711 :- 5 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR