Sh. Pankaj Bansal, Chandigarh V. ITO, Chandigarh

ITA 781/CHANDI/2011

• Counselvise Citation: 78121514 RSA 2011
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 08-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI H.L.KARWA, HONBLE VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.781CHD/2011 (ASSESSMENT YEAR : 2007-08) SH.PANKAJ BANSAL, VS. ITO WARD 1(3) H.NO.577, SECTOR 8-B, CHANDIGARH. CHANDIGARH. PAN: AHPPB3319M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRIKSHIT AGGARWAL RESPONDENT BY : SHRI N.K.SAINI, DR DATE OF HEARING : 21.09.2011 DATE OF PRONOUNCEMENT : 21.09.2011 O R D E R PER H.L.KARWA, V.P. : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF THE CIT (APPEALS), CHANDIGARH DATED 18.05.2011 RELATING TO ASSESSMENT YEAR 2007-08. 2. GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE A ND HENCE NO COMMENTS ARE REQUIRED. 3. GROUND NO.2 OF THE APPEAL RAISED IS AS UNDER :: 2. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT (A) VIDE PARA 3 OF HIS ORDER, HAS ERRED IN CONFIRMING ADDITION MADE BY LD. AO WHEREIN HE HAD ERRED IN MAKING ADDITION OF RS.7,50,000/- BY ERRONEOUSLY HOLDING THAT THE CASH DEPOSIT IN BANK IS UNDISCLOSED INCOME OF THE APPELLANT ON FOLLOWING GROUNDS : 2.1 THAT THE ABOVE ADDITION IS ERRONEOUS SINCE THE SOURCE OF CASH DEPOSIT WAS DULY EXPLAINED. 2.2 THAT THE CASH DEPOSIT IN BANK IS OUT OF WITHDRAWLS FROM THE SAME BANK ACCOUNT OF THE APPELLANT. 2 2.3 THAT THE ADDITION MADE, WITHOUT FINDING OUT ANY UTILIZATION OF WITHDRAWL OF CASH, IS ILLEGAL. 2.4 THAT THE ABOVE ADDITION IS AGAINST THE PROVISIONS OF LAW AND FACTS. 4. THE ASSESSING OFFICER MADE THE ADDITION OF RS.7, 60,000/- FOR THE REASONS STATED IN PARA 2, 3 AND 4 OF THE ASSESSMENT ORDER. ON VERIFICATION OF THE BANK ACCOUNT OF ASSESSEE, THE A SSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE CASH DEPOSITS ON VARIOUS DATES WITH HDFC BANK AND STATE BANK OF PATIALA, CHANDIGARH AS UNDER : S.NO. DATE AMOUNT MODE OF DEPOSIT 1 30.03.2006 60,000 CASH DEPOSIT 2 06.07.2006 1,00,000 -DO- 3 09.08.2006 75,000 -DO- 4 10.08.2006 25,000 -DO- 5 19.05.2006 3,00,000 -DO- 6 30.06.2006 2,00,000 -DO- 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE NATURE AND SOURCE O F THESE CASH DEPOSITS OF RS.7,60,000/-. THE REPLY SUBMITTED BY THE ASSES SEE ON 17.11.2009 TO ABOVE QUERY WAS AS UNDER : AS REGARDS CASH DEPOSITS IN THE SAVING ACCOUNTS ARE CONCERNED, THE ASSESSEE HAS WITHDRAWN A SUM OF RS.7,50,000/- ON 27.01.2006 FROM HIS SAVING BANK AC COUNT MAINTAINED WITH HDFC BANK LTD., SECTOR 8, CHANDIGAR H FOR PURCHASE OF PROPERTY BUT HE COULD NOT FIND ANY SUITABLE PROPERTY WITH THIS AMOUNT. SO LATER ON HE DEPOSITED THE AMOUNT WITH HIS SAVING BANK ACCOUNTS ON DIFFERENT DATES. 6. THE ASSESSING OFFICER WAS NOT SATISFIED WITH TH E ABOVE REPLY OF THE ASSESSEE AND, THEREFORE, HE TREATED THE AMOUNT OF RS.7,60,000/- AS INCOME OF THE ASSESSEE FROM UNEXPLAINED SOURCES AND WAS, ACCORDINGLY, ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT (APPEAL S) AND TOOK THE FOLLOWING LINES OF ARGUMENTS : 3 1. FIRST OF ALL, IT IS CLARIFIED THAT THE TRANSACT IONS IN QUESTION TOTAL TO RS.7,50,000/- INSTEAD OF RS.7,60,000/- AS TOTALED BY LD. A.O. AS THE 1 ST TRANSACTION IS ACTUALLY FOR RS.50,000/- DATED 30.06.2006 INSTEAD OF RS.60,000/- ON 30.03.2006. 2. THE APPELLANT HAD DEPOSITED A TOTAL AMOUNT OF RS.7,50,000/- IN CASH ON 6 DIFFERENT DATES IN HIS SAVING BANK ACCOUNT. THE DETAILS ARE AS UNDER :- DATE NAME OF BANK AMOUNT(RS.) A. 30.06.2006 HDFC BANK 50,000/- B. 06.07.2006 HDFC BANK 1,00,000/- C. 09.08.2006 HDFC BANK 75,000/- D. 10.08.2006 HDFC BANK 25,000/- E. 19.05.2006 SBOP 3,00,000/- F. 30.06.2006 SBOP 2,00,000/- TOTAL 7,50,000/- 3. THE ABOVE CASH DEPOSIT IN THE BANK ACCOUNT CANE OUT FROM WITHDRAWAL OF RS.7,50,000/- ON 27.01.2006 FROM HDFC BANK ACCOUNT OF THE APPELLANT. 4. COPY OF BANK ACCOUNTS OF THE APPELLANT DULY MARK ING AND EVIDENCING THE DEPOSIT AS WELL AS WITHDRAWL TRANSACTIONS AND CLEARLY ESTABLISHING THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT IS ENCLOSED AT PAGE NO.5 TO 7 OF THE PAPER BOOK. 5. IT IS EVIDENT FROM THE ABOVE EXPLANATION THAT APPELLANT WITHDREW RS.7,50,000/- IN CASH FROM HIS BANK ACCOUNT ON 27.01.2006 AND DEPOSITED BACK THE SAME AMOUNT OF RS.7,50,000/- IN THE BANK ACCOUNT WITHIN REASONABLE TIME. 6. THE APPELLANT DULY EXPLAINED THE ABOVE REFERRED SOURCE TO THE LD. A.O. COPY OF RELEVANT SUBMISSION TO LD. A.O. IS ENCLOSED AT PAGE NO. 8 OF THE PAPER BOOK. HOWEVER, LD. A.O. FAILED TO APPRECIATE THIS SUBMISSION AND MADE THE ADDITION OF RS.7,50,000/-. 7. IT IS FURTHER SUBMITTED THAT THE APPELLANT NAVE INVESTED OR USED THE ABOVE REFERRED WITHDRAWL OF RS.7,50,000/- EXCEPT RE-DEPOSITING THE SAME IN BANK ACCOUNT. EVEN THE LD. A.O. COULD NOT FIND OUT ANY INVESTMENT MADE OUT BY THE APPELLANT OUT OF THIS WITHDRAWL OF RS.7,50,000/-. IN FACT, THE APPELLANT HAD WITHDRAWN THIS AMOUNT FOR PURCHASE OF PROPERTY. HOWEVER, THE APPELLANT COULD NOT MATERIALIZE A SUITABLE DEAL AND FINALLY RE-DEPOSITED BACK THE CAS H IN THE BANK ACCOUNT. 8. FROM ABOVE, THE APPELLANT HAS DULY EXPLAINED THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT. IT IS NOT AN UNEXPLAINED CASH CREDIT AT ALL. LD. A.O. WAS HIGHLY UNJUSTIFIED IN MAKING THE IMPUGNED ADDITION. 4 8. THE CIT (APPEALS) ALLOWED A RELIEF OF RS.10,000/ - STATING THAT THE CONTENTIONS OF THE ASSESSEE THAT FIRST DEPOSIT WAS OF RS.50,000/- DATED 30.6.2006 INSTEAD OF RS.60,000/- ON 30.3.2006 WAS C ORRECT. HOWEVER, THE CIT (APPEALS) CONFIRMED THE ADDITION OF RS.7,50 ,000/- STATING THAT THE EXPLANATION OF THE ASSESSEE THAT THE CASH DEPOS ITS OF RS.7,50,000/- MADE BY HIM WERE OUT OF WITHDRAWAL OF SIMILAR AMOUN T ON 27.1.2006 FROM HDFC BANK WAS FAR FROM REALITY AND NOT ACCEPTA BLE. 9. NOW, THE ASSESSEE IS IN APPEAL AGAINST THE ADDIT ION OF RS.7,50,000/- SUSTAINED BY THE CIT (APPEALS). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PE RUSED THE MATERIALS AVAILABLE ON RECORD. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEPOSITED AN AMOUNT OF RS.7,50,000/- IN CASH IN HIS BANK ACCOUNT ON SIX DA TES. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE CASH DEPOSITS IN THE BANK ACCOUNT. THE CONTENTION OF THE ASSESSEE W AS THAT THE ABOVE CASH DEPOSITS IN THE BANK ACCOUNT CAME OUT FROM WIT HDRAWAL OF RS.7,50,000/- ON 27.1.2006 FROM HDFC BANK ACCOUNT O F THE ASSESSEE. AS PER THE STATEMENT OF ACCOUNTS SUBMITTED BY THE ASSE SSEE IT IS CLEAR THAT HE HAD WITHDRAWN A SUM OF RS.7,50,000/- ON 27.1.2006 F ROM HIS SAVING BANK ACCOUNT NO.1071070000164 MAINTAINED WITH HDFC BANK LTD, SECTOR 8, CHANDIGARH. AS REGARDS THE PURPOSE OF WITHDRAWAL I T IS STATED BY THE ASSESSEE THAT THIS AMOUNT WAS WITHDRAWN FROM THE BA NK FOR PURCHASE OF PROPERTY BUT HE COULD NOT MATERIALIZE A SUITABLE DE AL AND FINALLY RE- DEPOSITED BACK THE CASH IN THE BANK ACCOUNT ON DIFF ERENT DATES. IT IS SEEN THAT THE ASSESSEE WITHDREW RS.7,50,000/- IN CA SH FROM HIS BANK ACCOUNT ON 27.1.2006 AND DEPOSITED BACK THE SAME AM OUNT OF RS.7,50,000/- IN THE BANK ACCOUNT WITHIN A GAP OF F EW MONTHS. IN OUR VIEW, THE EXPLANATION GIVEN BY THE ASSESSEE APPEARS TO BE PLAUSIBLE AND 5 THEREFORE, NO ADVERSE VIEW CAN BE TAKEN IN THE MATT ER. WE FURTHER HOLD THAT THERE IS NO MATERIAL ON RECORD TO SHOW THAT TH E ASSESSEE HAS MADE ANY INVESTMENT OUT OF THE WITHDRAWAL OF RS.7,50,000 /-. FURTHER EXPLANATION OF THE ASSESSEE THAT THE ASSESSEE HAD W ITHDRAWN THE AMOUNT FOR PURCHASE OF PROPERTY AND SINCE THE SAME DID NOT MATERIALIZE AND THE CASH WAS DEPOSITED IN THE BANK ACCOUNT, DESERVES TO BE ACCEPTED, PARTICULARLY WHEN THE ASSESSEES SOURCE OF INCOME I S ONLY THE INCOME FROM HOUSE PROPERTY I.E. RENTAL INCOME. CONSIDERIN G THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE HOLD THAT THE ASSESSEE HAS SATISFACTORILY PROVED THE SOURCE OF DEPOSITS MADE I N THE BANK ACCOUNT AND, THEREFORE, THERE IS NO JUSTIFICATION IN MAKING THE IMPUGNED ADDITION. WE MAY ALSO ADD HERE THAT BOTH THE AUTHORITIES BELO W HAD TREATED THE AMOUNT IN QUESTION AS INCOME OF THE ASSESSEE FROM U NDISCLOSED SOURCES ON THE BASIS OF SURMISES AND CONJECTURES. IN FACT, THEY HAVE NOT GIVEN ANY COGENT REASON REGARDING THE ADDITION. WE, THER EFORE, DELETE THE ADDITION AND ALLOW THE APPEAL OF THE ASSESSEE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21 ST DAY OF SEPTEMBER, 2011. SD/- SD/- (MEHAR SINGH) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 21 ST SEPTEMBER, 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6