Shri Gordhan, Delhi V. ITO, Gurgaon

ITA 811/DEL/2015

• Counselvise Citation: 81120114 RSA 2015
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 14-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS RAKHI VIMAL
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 811/DEL/2015 AY: 2011-12 GORDHAN VS. ITO, WARD 1(2) C/O KAPIL GOEL, ADV., GURGAON F-26/124, SECTOR-7, ROHINI, DELHI 110 085 PAN: AJOPG6388A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. KAPIL GOEL, ADV. RESPONDENT BY : MRS. RAKHI VIMAL, JCIT ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER DT. 11.12.2014 OF LD.CIT(A), GURGAON FOR ASSESSMENT YEAR 2011-12. 2. THE FACTS IN BRIEF ARE BROUGHT OUT BY THE ASSESS ING OFFICER IN HIS ORDER 10.2.2014 VIDE PARA NO. 2 & 3 WHICH ARE EXTRACTED BELOW FOR READY REFERENCE. 1. THE ASSESSEE IS A REGULAR EMPLOYEE IN HARYANA PO LICE DEPARTMENT AS ASSISTANT SUB INSPECTOR. DURING THE FINANCIAL YE AR 2010-11, FOR THE ASSESSMENT YEAR 2010-11, HE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,91,560/- ON 31.7.20 11. THE CASE WAS PROCESSED U/S. 143(1) ON 31.10.2011 AS N.A. 2. AFTER THAT THE CASE WAS SELECTED IN CASS SCRUTIN Y. THE AO IS TO EXAMINE THE SOURCE OF CASH DEPOSITS OF RS. 53,00,0 00/- IN SAVING BANK ACCOUNT AS PER AIR INFORMATION. NECESSARY NOTI CE U/S. 143(2) ITA 811/DEL/2015 A.Y. 2011-12 2 WAS ISSUED ON 8.8.2012 WHICH WAS DULY SERVED UPON T HE ASSESSEE. FURTHER A QUESTIONNAIRE NOTICE U/S. 143(2) WAS ISSU ED ON 2.12.2013 FIXED FOR 13.12.2013. IN RESPONSE TO THE NOTICE, S HRI RAKESH THAKKAR, ADVOCATE SUBMITTED HIS POWER OF ATTORNEY A S AUTHORISED REPRESENTATIVE ON BEHALF OF THE ASSESSEE. THE CASE WAS FIXED TIME AND AGAIN. THE LD. AR SUBMITTED THE REQUISITE INFO RMATION WHICH WAS TEST CHECKED AND PLACED ON RECORD. 3. THE AO CONSIDERED THE EXPLANATION OF THE ASSESSE E AND REJECTED SOME EXPLANATIONS AND ASSESSED THE TOTAL INCOME AT RS. 9 ,91,562/-, AFTER MAKING THE ADDITION OF RS. 8 LACS U/S. 68 OF THE I.T. ACT, 196 1. 4. ON APPEAL THE LD. CIT(A) HAS UPHELD THE ORDER OF THE AO. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE ME O N THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN NOT DELETING THE UNLAWFUL ADDIT ION OF RS. 8 LACS MADE ON BASIS OF CONJECTURES AND SURMISES BEING CAS H DEPOSITED INTO BANK ACCOUNT FROM EARLIER AVAILABLE CASH WITHD RAWALS WHICH IS NOT ESTABLISHED TO BE UTILISED FOR ANY OTHER PURPOS E/ INVESTMENT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCE OF TH E CASE AND IN LAW, LD. CIT(A) ERRED IN NOT DELETING THE UNLAWFUL ADDIT ION OF RS. 8 LACS IGNORING CITED PRECEDENTS WHICH SQUARELY SUPPORTED ASSESSEES CASE ON SIMILAR FACTS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 8 LACS MADE BY AO ON ACCOUNT OF CASH RE-DEPOSITED FROM AVAILABLE C ASH DULY SUBSTANTITATED ON THE BASIS OF SELF PRESUMED REASON ING. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO, AMEND , MODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GROUNDS STATED HEREI N ABOVE, EITHER BEFORE AT THE TIME OF HEARING OF THIS APPEAL. ITA 811/DEL/2015 A.Y. 2011-12 3 7. LD. COUNSEL OF THE ASSESSEE, SHRI KAPIL GOEL SUB MITTED THAT THE ASSESSEE HAD WITHDRAWN RS. 8 LACS ON 21.4.2010 FROM THE BANK AND RE-DEPOSITED THE SAME ON 29.9.2010. HE SUBMITTED THAT THE ADDITIO N IS MADE ONLY ON THE GROUND OF PRESUMPTION, THAT THE PERIOD OF 5 MONTHS, FROM THE DATE OF WITHDRAWAL AND THE DATE OF DEPOSITS, IS NOT EXPLAINED. FURTHER, H E ARGUED THAT THE AO ON SURMISES AND CONJECTURES, HELD THAT, CASH WOULD NOT HAVE BEEN KEPT WITH ASSESSEE OR HIS WIFE FOR A PERIOD OF 5 MONTHS, WHEN THEY ARE HAVING THE BANK ACCOUNTS. HE SUBMITTED THAT THE FIRST APPELLATE A UTHORITY HAS WRONGLY HELD THAT THE EXPLANATION OF THE ASSESSEE IS NOT JUSTIF IED. HE POINTED OUT THAT THE ASSESSEE MAINTAINED THE CASH BOOK AND THE COPY OF T HE SAME WAS FILED BEFORE THE AO AS WELL AS LD. CIT(A). HE ARGUED THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED AND IN SUCH CIRCUMSTANCES THE ADDITIONS MA DE ON PRESUMPTION AND INFERENCE, CANNOT BE SUSTAINED. HE RELIED UPON TH E DECISION OF THE TRIBUNAL, E, BENCH, NEW DELHI IN ITA NO. 3644/DEL/2008 VIDE ORDER DATED 18.3.2015 IN THE CASE OF DCIT VS. SRI NIKHIL NANDA (AY 2009-10) FOR THE PROPOSITION THAT NO ADDITION CAN BE MADE U/S. 68 OF THE ACT, MERELY, BE CAUSE THERE WAS A TIME GAB BETWEEN THE CASH WITHDRAWAL AND CASH RE-DEPOSIT IN THE BANK, UNLESS THERE IS A FINDING GIVEN BY THE AO, THAT THE AMOUNT IN QUESTIO N WAS ACTUALLY USED SOMEWHERE ELSE. HE ALSO RELIED UPON THE DECISION O F THE ITAT, DELHI BENCHES IN THE CASE OF MOONGIPA INVESTMENT LTD. VS. ITO I N ITA NO. 2605/DEL/2007. 8. LD. DR, SMT. RAKHI VIMAL ON THE OTHER HAND SUBMI TTED THAT THE AO, AS WELL AS THE LD. CIT(A) CONSIDERED THE CASH BOOK OF THE ASSESSEE. SHE SUBMITTED THAT THE CASE LAW RELIED BY THE ASSESSEE CANNOT BE APPLIED TO THE FACTS OF THE CASE, FOR THE REASONS THAT THE ASSESEE HAS NOT EXPLAINED THE PURPOSE OF WITHDRAWAL AND THE GAP OF 5 MONTHS BETWEEN THE WITHDRAWAL AND THE RE-DEPOSITS. SHE POINTED OUT THAT THE LD. CIT(A) AT PAGE NO. 6 VIDE PARA NO. 3.2 RECORDED THAT THERE IS A PARTICULAR PATTERN OF RE-DEPOSITING THE AMOUNT OF W ITHDRAWN AS EARLY AS POSSIBLE, AFTER THE DATE OF SUCH WITHDRAWAL BY THE ASSESSEE. SHE RELIED UPON THE ORDERS OF THE AO AS WELL AS LD. CIT(A). ITA 811/DEL/2015 A.Y. 2011-12 4 9. AFTER HEARING RIVAL CONTENTIONS AND PERUSING TH E DOCUMENTS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, I HOLD AS FOLLOWS. 10. THE SOLE GROUND ON WHICH THE ADDITIONS HAS BEEN MADE U/S. 68 OF THE I.T. ACT, IS THAT, THERE IS A GAP OF 5 MONTHS BETWEEN T HE WITHDRAWAL OF THE CASH FROM THE BANK ACCOUNT AND RE-DEPOSIT OF THE SAME IN THE BANK ACCOUNT. AN ADDITION MADE, SOLELY ON THIS GROUND CANNOT BE SUSTAINED. IN THIS REGARD, I DRAW SUPPORT FROM THE DECISION OF THE ITAT, DELHI IN THE CASE OF AICT VS. BALDEV RAJ CHARLA 121 TTJ (DEL) 366 WHEREIN IT HAS BEEN HELD AS UNDE R:- WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD AND HAVE GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE FIND THAT THIS EXPLANATION O F THE ASSESSEE WAS FOUND CORRECT THAT AGAINST THESE FIVE DEPOSITS ON DATED 14 TH JUNE, 1996, RS. 31,000; 21 ST JULY, 1997, RS. 1,27,000, 19 TH SEPT., 1997, RS. 22,000; 4 TH OCTOBER, 1997, RS. 26,000 AND ON 7 TH NOVEMBER, 1997, RS. 52,000/- THERE WERE SUFFICIENT CASH WITHDRAWALS FROM AWI AND FROM SBL MAYAPURI, BUT THI S ADDITION HAS BEEN CONFIRMED BY LD. CIT(A) ON THE BASIS THAT THERE IS TIME GAP BETWEEN THE ASSESSEES WITHDRAWALS FROM HIS OW N PARTNERSHIP M/S AWI OR FROM HIS OWN BANK. THERE IS FINDING RECO RDED BY THE LD. AO OR BY THE LD. CIT(A) THAT APART FROM DEPOSIT ING THESE CASH INTO BANK AS EXPLAINED BY THE ASSESSEE, THERE WAS A NY OTHER USER BY THE ASSESSEE OF THESE AMOUNTS AND IN THE ABSENCE OF THAT, SIMPLY BECAUSE THERE WAS A TIME GAP, THE EXPLANATION OF TH E ASSESEE CANNOT BE REJECTED AND HENCE THE ADDITION CONFIRMED BY THE LD. CIT(A) IS NOT CORRECT. WE, THEREFORE, DELETE THE SAME. THIS GROUND OF THE ASSESSEE IS ALLOWED. 10. THE AFORESAID DECISION HAS BEEN FOLLOWED BY TH E TRIBUNAL IN THE CASE OF ACIT VS. NIKHIL NANDA (SUPRA). ITA 811/DEL/2015 A.Y. 2011-12 5 11. APPLYING THE PROPOSITION AS LAID DOWN BY THE TRIBUNAL TO THE FACTS OF THE CASE, I HAVE TO HOLD THAT NO ADDITION CAN BE MADE U/S. 68 OF THE I.T. ACT ON THE SOLE REASON THAT THERE IS A TIME GAP OF 5 MONTH S BETWEEN THE DATE OF WITHDRAWAL FROM BANK ACCOUNT OF THE CASH IN QUESTI ON AND THE REDEPOSIT OF THE SAME IN THE BANK ACCOUNT, UNLESS THE AO DEMONSTRATE S THAT THE AMOUNT IN QUESTION HAS BEEN USED BY THE ASSESSEE FOR ANY OTHE R PURPOSE. IN MY VIEW THE ADDITION IS MADE ON INFERENCES AND PRESUMPTIONS, WH ICH IS BAD IN LAW. HENCE, THE ADDITION IN QUESTION IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER, 2015. SD/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 19 TH OCTOBER, 2015 *SR BHATNAGAR* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2. RESPONDENT; 3. CIT; 4. CIT(A); 5. DR; 6. GUARD FILE BY ORDER ASSTT. REGISTRAR