ITO, Kota V. MAHESH GUPTA, Kota

ITA 734/JPR/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2170 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C YADAV ADV DHK
• Keywords: Salary income; Tax effect

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 734/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER, WARD 2(2), KOTA. CUKE VS. MAHESH GUPTA, CHH-4, SABARMATI COLONY, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABXPG 5078 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 742/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 MAHESH GUPTA, S/O- RAMESH CHAND GUPTA, K-10, SABARMATI COLONY, KOTA, (RAJASTHAN). CUKE VS. INCOME TAX OFFICER, WARD 2(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABXPG 5078 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH, (JCIT). FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. YADAV (ADV) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07/04/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/04/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THESE ARE THE CROSS APPEALS, ONE BY THE REVENUE AND ANOTHER BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A), KOAT DATED ITA 734 & 742/JP/2014_ ITO VS. MAHESH GUPTA 2 21/08/2014 FOR THE A.Y. 2010-11, WHEREIN THE REVENUE AND THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- GROUND OF REVENUES APPEAL IN ITA NO. 734/JP/2014 (I) DELETING THE ADDITION OF RS. 31,55,400/- OUT O F TOTAL ADDITION OF RS. 49,60,590/- ON ACCOUNT OF UNEXPLAIN ED CASH DEPOSIT IN BANK. GROUNDS OF ASSESSEES APPEAL IN ITA NO. 742/JP/2014 1. THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN CONSIDERING THE AMOUNT OF RS. 16,00,000/- AS INCOME WHICH WAS RECEIVED AS ADVANCE OF SALE OF LAND AND LATER REFUN DED ON ACCOUNT OF CANCELLATION OF DEAL DUE TO NON PAYME NT OF LAST INSTALLMENT. 2. THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN CONSIDERING RS. 200000/- AS OPENING CASH BALANCE AS ON 01/4/2008 INSTEAD OF RS. 405190/- AND MAKING AN ADDITION OF BALANCE RS. 205190/- AS UNEXPLAINED INCOME. 3. THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES IN L AW, THE ASSESSMENT OF ABOVE MENTIONED GROUNDS HAS BEEN MADE ON BELIEFS AND SURMISES AND ESTIMATES AND IS LIABLE TO BE QUASHED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN O F INCOME DECLARING TOTAL INCOME OF RS. 9,38,860/- WAS FILED BY THE ASSE SSEE ON 30/07/2010. THE ASSESSEE DERIVED INCOME FROM SALARY, RENT AND OT HER SOURCES. THE ASSESSING OFFICER MADE ADDITION OF RS. 49,60,590/- ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT AND RS. 2,39,432/- ON ACCO UNT OF UNEXPLAINED ITA 734 & 742/JP/2014_ ITO VS. MAHESH GUPTA 3 CASH CREDIT. THE LD. CIT(A) GRANTED PART RELIEF ON AC COUNT OF DEPOSIT IN BANK ACCOUNT AND BOTH SIDES ARE IN APPEALS ON THIS ISSUE 3. GROUND NO. 1 OF THE REVENUES APPEAL AS WELL AS A SSESSEES APPEAL IS ON THE COMMON ISSUE WHERE LD. CIT(A) HAS PARTLY DELET ED THE ADDITION AND PARTLY SUSTAINED ON ACCOUNT OF CASH DEPOSITED IN TH E BANK ACCOUNT. AT THE OUTSET OF HEARING, THE LD AR HAS SUBMITTED THAT THE TAX EFFECT IN REVENUES APPEAL IS BELOW THRESHOLD LIMIT OF RS. 10.00 LACS, T HEREFORE, THE SAME IS NOT MAINTAINABLE. THE LD DR WAS NOT HAVING ANY DIFFERENT VIEW IN THIS REGARD. ADMITTEDLY, THE TAX EFFECT IN REVENUES APPEAL IS B ELOW THE THRESHOLD LIMIT OF RS. 10.00 LACS, THEREFORE, THE SAME IS NOT MAINTAIN ABLE IN VIEW OF THE BOARDS CIRCULAR AND THE REVENUES APPEAL IS HEREBY DISMISSED. 3.1 ON THE GROUND NO. 1 OF THE ASSESSEES APPEAL, T HE LD AR HAS SUBMITTED THAT THIS ISSUE HAS BEEN ALREADY DECIDED BY THE ITAT, JAIPUR BENCHES, JAIPUR IN THE CASE OF SHRI NARESH GUPTA VS ITO IN ITA NO. 743/JP/2014 ORDER DATED 30/08/2016. HE HAS DRAWN OUR ATTENTION TOWARDS PARAGRAPH NO. 6.5 OF THE ORDER OF THE ITAT, WHICH REP RODUCED HEREUNDER:- 6.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE A.O. M ADE AN ADDITION OF RS. 23,94,000/- AS MENTIONED IN THE ASS ESSMENT ORDER IN THE CASE OF THE ASSESSEE BECAUSE OF NON-FU RNISHING THE DETAILS OF THE AMOUNTS DEPOSITED IN THE BANKS A ND THE ITA 734 & 742/JP/2014_ ITO VS. MAHESH GUPTA 4 SAME WAS TREATED AS UNEXPLAINED INCOME OF THE ASSESS EE. IN APPEAL, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HA D FAILED TO EXPLAIN THE SOURCE OF RS. 6,91,550/- WHICH INCLUD ED RS. 6.00 LACS CLAIMED TO HAVE BEEN RECEIVED FROM SHRI R ANG LAL AND RS. 91,550/- TREATED AS UNEXPLAINED OUT OF OPEN ING CASH BALANCE OF RS. 2,41,550/-. IT IS NOTED FURTHER THAT THIS GROUND OF APPEAL RELATES TO CONFIRMATION OF ADDITION OF RS . 6.00 LACS BY THE LD. CIT(A) AS THE A.O. HAD TAKEN INTO CONSIDE RATION THE AMOUNT OF RS. 6.00 LACS AS UNEXPLAINED INCOME OF TH E ASSESSEE IN THE GARB OF INVESTMENT. FROM THE RECORD S, IT IS OBSERVED THAT SHRI RANG LAL APPEARED BEFORE THE A.O . AND CONFIRMED THAT HE HAD ENTERED INTO A LAND DEAL OF 9 BIGHA WITH THE ASSESSEE AND HIS BROTHER. THE TOTAL CONSIDERATIO N WAS TO THE TUNE OF RS. 38 LACS FOR WHICH SHRI RANGLAL HAD A DVANCED AN AMOUNT OF RS. 6 LACS AS PER PAGES 17 AND 18 OF T HE ASSESSEES PAPER BOOK. IT IS ALSO NOTED THAT THE AS SESSEE HAD RETURNED THE AMOUNT OF RS. 6.00 LACS TO SHRI RANGLA L IN CASH IN JULY, 2010 (PAGE 59 OF APB) AND THIS FACT WAS NOTED BY THE A.O. IN THE ASSESSMENT ORDER. IT IS ALSO OBSERVED F ROM THE STATEMENT OF SHRI RANGLAL THAT A SUM OF RS. 2.00 LA CS WAS NOT PAID BY THE ASSESSEE. THE ASSESSEE SUBMITTED THAT TH E SUM OF RS. 2.00 LACS WAS FORFEITED BECAUSE OF NOT COMPLYING WITH THE TERMS OF AGREEMENT FOR PURCHASE OF LAND FROM THE AS SESSEE. CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE AND THE CASE LAWS RELIED UPON BY THE ASSESSEE ( SUPRA), THE ADDITION CONFIRMED BY THE LD. CIT(A) IS DIRECTED TO BE DELETED. THUS, GROUND NO. 1 OF THE ASSESSEE IS ALLOWE D. ITA 734 & 742/JP/2014_ ITO VS. MAHESH GUPTA 5 FACTS OF THIS CASE BEING THE SAME, THEREFORE, WE RES PECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL, WE ALLOW THIS GROUND OF THE ASSESSEES APPEAL. 4. GROUND NO. 2 OF THE ASSESSEES APPEAL IS AGAINST SUSTAIN THE ADDITION OF RS. 2,05,190/- AS UNEXPLAINED INCOME OUT OF THE OPENING CASH BALANCE AS ON 01/4/2008 AT RS. 4,05,190/-. IN THIS REGARD, THE LD AR HAS SUBMITTED THAT THIS CASE WAS SELECTED FOR LIMITED SCRUTINY AND THEREFORE THE ASSESSING OFFICER SHOULD NOT HAVE MADE ANY OTHER ADDITION EXC EPT THE ISSUE ON WHICH IT WAS SELECTED FOR SCRUTINY. HOWEVER, FROM THE RECOR DS, IT IS FOUND THAT THIS CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND IN THE CASES SELECTED FOR CASS SYSTEM, THERE IS NO BINDING OF CIRCULAR AS REL IED BY THE LD. AR. THE LD CIT(A) HAS DEALT THIS ISSUE AS UNDER:- IT WAS SEEN THAT ASSESSEE HAS CLAIMED OPENING CASH BALANCE OF RS. 4,05,190/- AS ON 01/4/2008. THE ASSESSEE CLA IMED THAT OPENING CASH BALANCE AS ON 01/4/2009 WAS RS. 4,32,69 0/-. THE ASSESSEE SUBMITTED A CASH FLOW STATEMENT FROM 01/4/2 008 TO 31/3/2010 SHOWING VARIOUS DRAWINGS, SAVINGS AND INCOM E. THE CLAIM OF OPENING BALANCE AS ON 01/4/2008, WAS NO T SUPPORTED BY ANY EVIDENCE EXCEPT ASSESSEES CLAIM T HAT IT WAS FILING INCOME TAX RETURN SINCE 1995-96 AND IN A.Y. 2009-10, IT HAS DECLARED INCOME OF RS. 7,11,680/-. ITA 734 & 742/JP/2014_ ITO VS. MAHESH GUPTA 6 IN THE A.Y. 2010-11, ASSESSEE HAS SHOWN INCOME OF R S. 14,70,000/- AND CLAIMED EXPENSES OF RS. 14,66,000/- WHICH SHOWS THAT ASSESSEE HAD, PRACTICALLY, NO SAVING DURI NG THE YEAR. ASSESSEE HAD HUGE PERSONAL BORROWINGS ON WHICH HE WA S PAYING INTEREST. THE ASSESSEE HAS ALSO TAKEN HUGE LO AN FROM BANKS ON WHICH ALSO HE WAS PAYING INTEREST. IT IS DIF FICULT TO BELIEVE THAT A PERSON HAVING HUGE CASH BALANCE WOULD BORROW MONEY ON INTEREST. CONSIDERING THE ABOVE, I AM OF T HE OPINION THAT OPENING CASH BALANCE AS ON 01/4/2008 CAN BE AT BEST TAKEN AT RS. 2.00 LACS. 5. BEFORE US ALSO, EXCEPT THE RAISING THE ISSUE OF LIMITED SCRUTINY, NO SUPPORTING DOCUMENT PROVIDED WITH REGARD TO THE OPEN ING BALANCE AS ON 01/4/2008. THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEE HAS SHOWN INCOME OF RS. 14,70,000/- FOR THE ASSESSMENT Y EAR 2010-11 AND HAS CLAIMED EXPENSES OF RS. 14,66,000/-, THUS, THERE WAS ANY SAVINGS FOR THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) HAS ALSO OB SERVED THAT THE ASSESSEE HAS HUGE PERSONAL BORROWINGS ON WHICH HE WAS PAYING INTEREST. THE ASSESSEE HAS ALSO TAKEN HUGE LOAN FROM THE BANKS ON WHICH ALSO HE WAS PAYING INTEREST. IN SUCH A SITUATION, IT WAS HELD THAT THE CLAIM OF THE ASSESSEE THAT HE WAS HAVING SUCH HUGE CASH BALANCE A ND WAS ALSO BORROWED MONEY FROM THE BANK, WAS NOT ACCEPTED. IN AB SENCE OF ANY FURTHER DOCUMENT, WE FIND NO MERIT IN THE GROUND OF ASSESSEES APPEAL, THEREFORE, THE SAME STANDS DISMISSED. ITA 734 & 742/JP/2014_ ITO VS. MAHESH GUPTA 7 6. GROUND NO. 3 OF THE ASSESSEES APPEAL IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION, THEREFORE, THE SAME I S HEREBY DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04/2017. SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 TH APRIL, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 2(2), KOTA. 2. IZR;FKHZ @ THE RESPONDENT- SHRI MAHESH GUPTA, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 734 & 742/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR