Shri Laljibhai Ravjibhai Chovatiya, AMRELI V. The Income Tax Officer, Wd-2(4), RAJKOT-GUJARAT

ITA 717/RJT/2014

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8643 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Set aside
• Section: 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO. 717/RJT/2014 ( / ASSESSMENT YEAR : 2010-11) LALJIBHAI RAVJIBHAI CHOVATIYA DJAVAL CHAKKARGADH ROAD ADARSH NAGAR NR. WATER TANK BLOCK NO.22/B, AMRELI / VS. THE ITO WARD-2(4) RAJKOT ./ ./ PAN/GIR NO. : ABFPC 2699 R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : WRITTEN SUBMISSION BY AR ! / RESPONDENT BY : SHRI SANJEEV JAIN, SR.DR ' #$% ! & / DATE OF HEARING 22/11/2019 '( ! & / DATE OF PRONOUNCEMENT 06 /01/2020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)IV, RAJKOT [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-IV/0 085/12-13 DATED 14/10/2014 ARISING IN THE ASSESSMENT ORDER PASSE D UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 18/12/2012 RELEVANT TO ASSESSMENT YEAR (AY) 2009-1 0. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.717/RAJKOT/2014 LALJIBHAI RAVJIBHAI CHOVATIYA VS. ITO ASS T.YEAR 2010-11 - 2 - 1.1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN C ONFIRMING ADDITION OF RS. 10,86,539/-. THE ADDITION NEEDS DELETION. 1.2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN N OT CONSIDERING THAT THE AMOUNT OF RS.10,86,539/- CANNOT BE ADDED SINCE THE EVIDENCES OF RECEIPT THEREOF WERE ALREADY FURNISHED AND THE SAME WERE NOT ACCEPTED WITHOUT AN Y COGENT REASONS. 1.3. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY , FACTUAL, ACCOUNTING AND ADMINISTRATIVE ASPECTS, NO ADDITIONS AMOUNTING TO R S.10,86,539/- OUGHT TO HAVE BEEN MADE. THE ADDITIONS NEED DELETION. 2. WITHOUT PREJUDICE, NO PEAK WORKING HAS BEEN CONS IDERED BY THE LD. C1T(A) WHICH IS ERRONEOUS NEEDS MODIFICATION. 3. WITHOUT PREJUDICE, THE ASSESSMENT MADE IS BAD IN LAW AND DESERVES ANNULMENT. 4. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND R EASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING ASSESSMENT ORDER. THE ASSESS MENT NEEDS ANNULMENT. 5. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND R EASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING APPEAL ORDER. THE ASSESSMENT NEEDS ANNULMENT. 6. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN D/OR SUBSTITUTE ANY OR ALL GROUND OF APPEAL BEFORE THE ACTUAL HEARING TAKES PLACE. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER B Y TREATING THE AMOUNT OF CASH DEPOSITED IN THE BANK FOR RS.10,86,539/- A S UNEXPLAINED INVESTMENTS UNDER SECTION 69 OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND SHOWING INCOME UNDER THE HEAD SALARY. THE ASSESSEE IN THE Y EAR UNDER CONSIDERATION HAS MADE CASH DEPOSITS OF RS. 16,50,0 00/ - IN HIS SBI SAVING BANK A/C ON 15-02-2010. ON QUESTION ABOUT TH E SOURCE OF CASH DEPOSIT BY THE AO, THE ASSESSEE SUBMITTED AS UNDER: ITA NO.717/RAJKOT/2014 LALJIBHAI RAVJIBHAI CHOVATIYA VS. ITO ASS T.YEAR 2010-11 - 3 - (I) HE HAD OPENING CASH IN HAND OF RS. 4,77,985/-. (II) HE HAD THREE DIFFERENT FDS WHICH WERE ENCHASED AS O N 02.04.2009 FOR RS. 2,09,054/- AND WITHDRAWN THE SAM E FROM THE BANK ON THE SAME DAY. (III) HE HAS TAKEN LOAN OF RS.1,99,300/- ON 04-08-2009 FR OM STAFF CO-OPERATIVE SOCIETY AND WITHDRAWN THE SAME ON 04-0 8-2009. (IV) HE HAS TAKEN LOAN OF RS. 2,00,000/- ON 01-12-2009 F ROM SHRI PRAKASHBHAI PARAGJI BHAI THROUGH CHEQUE AND THE SAM E WAS ALSO WITHDRAWN ON THE SAME DAY. 4. IN VIEW OF THE ABOVE, THE ASSESSEE CLAIMED TH AT HE HAS DEPOSITED THE AFORESAID SUM OF RS. 10,86,339/- IN SBI SAVING BANK ON 15-02-2010. THE ASSESSEE ALSO SUBMITTED THAT HIS SON WAS PLANNI NG TO GO TO USA ON STUDENT VISA. THEREFORE, TO GET THE VISA CLEARANCE HE WAS ACCUMULATING SUCH CASH IN HAND IN ADVANCE SO THAT HE COULD DEPOS IT THE SAME IN THE BANK. 5. THE ASSESSEE WITH RESPECT TO THE OPENING CASH ON HAND OF RS. 4,77,985/- SUBMITTED THAT HE WAS EMPLOYEE IN TH E BANK FOR MORE THAN LAST 30 YEAR ON HANDSOME SALARY. THEREFORE THE OPEN ING BALANCE OF CASH REPRESENTS THE SAVING OUT OF SUCH SALARY AMOUNT WHI CH IS QUITE POSSIBLE. ACCORDINGLY ASSESSEE CLAIMED THAT THE CASH DEPOSIT OF RS.10,86,339/- FROM ABOVE MENTIONED SOURCE DOES NOT REPRESENT HIS ADDITIONAL INCOME. ITA NO.717/RAJKOT/2014 LALJIBHAI RAVJIBHAI CHOVATIYA VS. ITO ASS T.YEAR 2010-11 - 4 - 6. HOWEVER, THE AO DID NOT BELIEVE THE SUBMISSION OF THE ASSESSEE BY OBSERVING THAT IT IS IMPOSSIBLE FOR A BANK EMPLOYEE TO HOLD SUCH HUGE AMOUNT OF CASH IN HAND FOR SUCH LONG PERIOD OF TIME I.E. MORE THAN 10 MONTHS. ACCORDINGLY THE AO HELD THAT THE REPLY OF T HE ASSESSEE WAS NOT CONVINCING AND HELD THAT THERE WAS NO CORRELATION B ETWEEN CASH GENERATED BY THE ASSESSEE AND MAKING DEPOSIT OF THE SAME IN T HE SAVING BANK ACCOUNT. AS PER THE AO NO PRUDENT PERSON, ESPECIALL Y ASSESSEE BEING BANK EMPLOYEE WILL WITHDRAW CASH, HOLD THE SAME FOR SUCH LONG PERIOD AND SUFFER INTEREST INCOME. ACCORDINGLY THE AO TREA TED THE SAME AS UNEXPLAINED INVESTMENT IN BANK U/S 69 OF THE ACT. THE AGGRIEVED ASSESSEE CARRIED THE MATTER BEFORE LE ARNED CIT(A). 7. THE ASSESSEE BEFORE LEARNED CIT (A) SUBMITTED THAT HE IS A SALARIED PERSON AND DOES NOT REQUIRE TO MAINTAIN ANY BOOKS O F ACCOUNT. BUT HE EXPLAINED THE SOURCE OF CASH DEPOSIT. HOWEVER THE L EARNED AO WITHOUT ANY SUFFICIENT OR COGENT REASON HELD THE SAME AS UN EXPLAINED DEPOSIT. THEREFORE SUCH ADDITION IS NOT SUSTAINABLE. 8. THE LEARNED CIT(A) AFTER CONSIDERING THE ASSE SSMENT ORDER AND SUBMISSION OF ASSESSEE CONFIRMED THE ORDER OF THE A O BY HOLDING THAT THE EXPLANATION SUBMITTED BY ASSESSEE DID NOT ESTABLISH THE NEXUS BETWEEN CASH DEPOSIT AND ITS SOURCE. ITA NO.717/RAJKOT/2014 LALJIBHAI RAVJIBHAI CHOVATIYA VS. ITO ASS T.YEAR 2010-11 - 5 - BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LEARNED AR BEFORE US SUBMITTED THAT THE E XPLANATION FURNISHED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW HAS NO T BEEN DOUBTED OR PROVED INCORRECT. BUT, THE SAME WAS NOT ACCEPTED DU E TO THE FACT THAT THERE WAS SUFFICIENT TIME BETWEEN THE PERIOD WHEN T HE AMOUNT WAS WITHDRAWN IN CASH AND DEPOSIT OF THE SAME IN CASH I N THE SAVING BANK ACCOUNT. 9.1. THE LEARNED AR ALSO CONTENDED THAT SUCH DEP OSIT IS NOT UNEXPLAINED AND ALSO DOES NOT REPRESENT ADDITIONAL INCOME. AS SUCH, THE AMOUNT OF CASH WAS DEPOSITED IN ORDER TO GET THE VI SA FOR USA. 10. ON THE CONTRARY, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSIT AS DISCUSSED IN THE PRECEDING PARAG RAPH. THUS, THE PRIMARY ONUS OF THE ASSESSEE WAS DISCHARGED. NOW TH E ONUS WAS ON THE REVENUE TO HOLD THE SUBMISSION OF THE ASSESSEE IS I NCORRECT. THE REVENUE HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT THE AMOUNT OF CASH WITHDRAWN HAS EITHER BEEN INCURRED AS AN EXPENDITUR E BY THE ASSESSEE OR THE SAME HAS BEEN UTILIZED FOR THE PURPOSE OF THE I NVESTMENT. THUS, IN THE ITA NO.717/RAJKOT/2014 LALJIBHAI RAVJIBHAI CHOVATIYA VS. ITO ASS T.YEAR 2010-11 - 6 - ABSENCE OF ANY CONTRARY INFORMATION AGAINST THE SUB MISSION OF THE ASSESSEE, WE HOLD THAT THE ASSESSEE HAS DEPOSITED T HE AMOUNT IN THE SAVING BANK ACCOUNT OUT OF THE CASH WITHDRAWAL DURI NG THE YEAR UNDER CONSIDERATION AND OUT OF THE OPENING CASH BALANCE A S DISCUSSED ABOVE. THE PRIMARY REASON FOR TREATING THE CASH DEPOSIT AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT BY THE AO WA S THAT NO PRUDENT PERSON WOULD KEEP SUCH HUGE AMOUNT OF CASH IN HIS H OUSE. THE REASONING FURNISHED BY THE AO APPEARS TO BE LOGICAL BUT SUCH INFERENCE CANNOT BE THE BASIS FOR MAKING THE ADDITION TO THE TOTAL INCO ME OF THE ASSESSEE BY TREATING THE DEPOSIT OF CASH AS UNEXPLAINED INVESTM ENT UNDER SECTION 69 OF THE ACT. AS SUCH, THE ONUS WAS ON THE REVENUE TO FIND OUT THE DETAILS OF THE EXPENSES INCURRED BY THE ASSESSEE VIS-A-VIS THE INVESTMENT MADE BY HIM TO PROVE THAT THE SO-CALLED CASH DEPOSIT WAS NO T MADE OUT OF THE CASH WITHDRAWN OR OUT OF THE OPENING CASH BALANCE. BUT T HE REVENUE, FAILED TO BRING SUCH INFORMATION/EVIDENCE ON RECORD. THEREFOR E WE ARE NOT CONVINCED WITH THE FINDING OF THE AUTHORITIES BELOW . ACCORDINGLY WE SET ASIDE THE FINDING OF THE LEARNED CIT-A AND DIRECT T HE AO TO DELETE THE ADDITION MADE BY HIM. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.717/RAJKOT/2014 LALJIBHAI RAVJIBHAI CHOVATIYA VS. ITO ASS T.YEAR 2010-11 - 7 - 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 06/01/2020 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 06/ 01 /2020 ..#, $.,#../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - & ' .& / CONCERNED CIT 4. ' .& ( ) / THE CIT(A)-IV, RAJKOT 5. 2$34 ,&,# , , /DR,ITAT, RAJKOT 6. 4?@ A% / GUARD FILE. / BY ORDER, 2& ,& //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %&, / ITAT, RAJKOT 1. DATE OF DICTATION 03.01.2020 (WORD PROCESSED BY HONBLE AM IN HIS COMPUTER BY DR AGON) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 03.01.2020 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.7.1.2020 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7.1.2020 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER