Jagtar Singh, Ludhiana V. ITO, Ludhiana

ITA 812/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8513 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gift; Peak credit; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 812/CHD/2015 ASSESSMENT YEAR: 2009-10 SH. JAGTAR SINGH, VS. THE ITO, WARD IV(1), S/O SH. JEET SINGH, LUDHIANA LUDHIANA PAN NO. BIJPS9826G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 15.01.2016 DATE OF PRONOUNCEMENT : 29.01.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- II, LUDHIANA DATED 1.9.2015 RELATING TO ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE ORDER PASSED UNDER SECTION 250(6) BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA IN APPEAL NO. 190/IT/CIT (A)-2/LDH/2011-12 DATED 01.09.2015 IS CO NTRARY TO LAW AND FACTS OF THE CASE. 2. THAT IN THE FACTS AND CIRCUMSTANCE OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (APPEALS), LUDHIANA HAS GRAVELY ERRED IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER AND UPHOLDING THE 2 ADDITION OF RS. 11,96,500/- MADE BY THE LD ASSESSIN G OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK ACCOUN T. 3. THAT THE APPELLANT PRODUCED DOCUMENTARY EVIDEN CE AS WELL AS AFFIDAVIT ON 26.08.2011 BEFORE THE LD. ASSESSING OF FICER AND FURTHER ON 12.01.2015 BEFORE THE LD. COMMISSIONER OF INCOME TA X (APPEALS) ALONGWITH ORIGINAL PASSPORT AND IT CANNOT BE SAID T HAT 'THE APPELLANT FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN ORIGI NAL IN SUPPORT OF HIS CONTENTION, NOT ONLY AT THE TIME OF ASSESSMENT PROCEEDINGS BUT ALSO AT THE TIME OF APPELLATE PROCEEDINGS.' 4. THAT THE CASH FLOW STATEMENT FILED ON 26.07.20 11 BEFORE THE LD. ASSESSING OFFICER AND FURTHER, ON 19.01.2015 BEFORE THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT BEEN C ONSIDERED BY THEM. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL AND IS A PROPERTY ADVISOR AND IS EARNING COMMISSION ON PURCHASE / SALES OF PROPERTIES. THE ASSESSEE DECLARED GROSS RECEIPTS AT RS. 1,80,000/-. AFTER DEBITING EXPENSES OF RS. 45,000/-, RETURN WAS FILED DECLARING NET INCOME AT RS. 1,35,340/- INCLUDING INCOME FROM OTHER SOURCES AT R S. 340/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NO TICED THAT THE ASSESSEE WAS MAINTAINING SAVING BANK ACCOUNT NO. 51362010004200 WITH ORIENTAL BANK OF COMMERCE IN WHICH CASH DEPOSITS AND SUBSEQUENT WITH DRAWALS OF RS. 17,86,500/- WERE MADE ON DIFFERENT DATES. THE ASSE SSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCES OF THESE CASH DEPOS ITS. IN THIS REGARD, THE ASSESSEE CONTENDED THAT HE DEPOSITED CASH IN HIS AC COUNT AFTER SOME DAYS, THE SAID AMOUNT WAS WITHDRAWN. AGAIN, THE SAID AMOUNT W AS DEPOSITED AFTER FEW DAYS, THE AMOUNT WAS WITHDRAWN. IT WAS EXPLAINED TH AT THE SAID FREQUENCY OF DEPOSITS AS WELL AS WITHDRAWALS OF CASH FROM SAVING ACCOUNT WAS DUE TO THE FACT THAT THE ASSESSEE HAVING MEAGER SOURCES OF INCOME, WANTS TO TRY TO HIS LUCK TO GET U.S. VISA AND IT WAS SUGGESTED BY THE TRAVEL AG ENT THAT THERE SHOULD BE 3 FREQUENCY OF TRANSACTIONS IN ORDER TO IMPRESS THE V ISA AUTHORITIES THAT THE ASSESSEE IS WELL SETTLED IN INDIA AND IS CARRYING O UT BUSINESS ACTIVITY. THE ASSESSEE FURTHER CONTENDED THAT HE HAD DEPOSITED CA SH AMOUNTING TO RS. 17,86,500/- ON VARIOUS DATES DURING THE YEAR UNDER CONSIDERATION AND AN AMOUNT OF RS. 13,48,000/- WAS WITHDRAWN ON VARIOUS DATES B Y HIM. THE NET PEAK OF THE ASSESSEE CAME TO RS. 4,03,212/- ON 12.9.2008. FURTH ER, IT WAS ALSO EXPLAINED THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO DEPOSIT AND WITHDRAW CASH FROM THE SAVING ACCOUNT, EXCEPT TO GET VISA FROM TH E U.S. AUTHORITIES. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE STATING THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE BANK TRANSACTIONS WERE MADE TO IMPRESS THE USA VISA AUTH ORITIES. THE ASSESSEE COULD NOT PRODUCE THE ORIGINAL PASSPORT. HOWEVER, THE ASS ESSEE PRODUCED THE PHOTOCOPIES OF THE LAST PURCHASE AND HIS PASS BOOKS . THE ASSESSEE SUBMITTED THAT THE ORIGINAL PASSPORT WAS DEPOSITED WITH THE REGION AL PASSPORT OFFICER FOR ADDITION OF SURNAME. HOWEVER, THE ASSESSEE DID NOT RECEIVE THE SAME. THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE A SSESSEE OBSERVING THAT HE WAS EARNING COMMISSION INCOME WHICH HE HAD DEPOSITED IN HIS SAVING BANK ACCOUNT. THE ASSESSING OFFICER CONCLUDED THAT THE EXPLANATIO N OF THE ASSESSEE IS AN AFTERTHOUGHT TO COVER THE DETECTION OF CONCEALMENT OF INCOME. THE ASSESSING OFFICER GAVE THE BENEFIT OF OPENING BALANCE OF RS. 10,000/-, GROSS RECEIPTS SHOWN AS PER RETURN AT RS. 1,80,000/- AND DEPOSIT MADE OU T OF GIFT OF RS. 4 LAKHS RECEIVED BY THE ASSESSEE FROM HIS MOTHER, TOTALIN G TO RS. 5,90,000/-. THUS, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 11,96,50 0/- (17,80,500/- MINUS RS. 5,90,000/-). 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION OF RS. 11,90,500/- AND, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 4 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS APPARENT FROM THE RECOR D THAT THE ASSESSEE MAINTAINED SAVING BANK ACCOUNT WITH ORIENTAL BANK OF COMMERCE IN WHICH HE MADE CASH DEPOSITS AND WITHDRAWALS ON DIFFERENT DATES. WHEN T HE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN SOURCES OF THESE CASH DEPOS ITS, THE ASSESSEE CLAIMED THAT HE DEPOSITED AND WITHDRAWN THE DIFFERENT AMOUNTS AG AIN AND AGAIN AS SUGGESTED BY TRAVEL AGENT THAT THERE SHOULD BE FREQUENCY OF T RANSACTIONS IN ORDER TO IMPRESS THE VISA AUTHORITIES TO SHOW THAT THE ASSES SEE IS WELL SETTLED IN INDIA. IT IS OBSERVED THAT THE ASSESSEE DID NOT GIVE SATISFAC TORY EXPLANATION TO THE ASSESSING OFFICER AND ALSO TO THE CIT(A). IT IS ALS O OBSERVED THAT A REMAND REPORT FROM THE ASSESSING OFFICER WAS CALLED FOR BY THE CIT(A) AND THE SAME WAS CONFRONTED TO THE ASSESSEE. THE ASSESSEE WAS ASKED TO FILE THE REJOINDER TO THE REMAND REPORT. IN THE REJOINDER ALSO, THE ASSESSEE COULD NOT OFFER ANY SATISFACTORY EXPLANATION REGARDING THE CASH DEPOSIT S AND WITHDRAWALS MADE FROM HIS SAVING ACCOUNT. 6. I HAVE ALSO PERUSED THE COPY OF THE PASS BOOK OF ACCOUNT NO. 51362010004200 OF THE ASSESSEE WITH THE ORIENTAL BA NK OF COMMERCE, BRANCH LUDHIANA (PAGES 8 TO 10 OF THE ASSESSEES PAPER BOO K). ON A PERUSAL OF COPY OF PASS BOOK, I FOUND THAT THERE ARE CASH WITHDRAWALS FROM THE SAID BANK ACCOUNT AND THERE ARE ALSO CASH DEPOSITS IN THE SAID SAVING ACCOUNT. THERE IS A CASH DEPOSIT OF RS. 4 LAKHS ON 12.9.2008 WHICH IS CLAIME D BY THE ASSESSEE TO BE A GIFT RECEIVED FROM HIS MOTHER ON 8.9.2008 AND THE SAME W AS UTILIZED FOR PURCHASE OF PLOT ON 26.9.2008. IT APPEARS THAT THE ASSESSING O FFICER HAS ACCEPTED THE GIFT OF RS. 4 LAKHS WHICH WAS DEPOSITED IN THE AFORESAID BA NK ACCOUNT ON 12.9.2008. IN MY OPINION, THE AUTHORITIES BELOW OUGHT NOT TO HAVE TREATED THE CASH DEPOSITS AS INCOME OF THE ASSESSEE WITHOUT CONSIDERING THE CASH WITHDRAWALS FROM THE SAME BANK. IN MY OPINION, IN SUCH CASES, THE PEAK CREDIT THEORY SHOULD BE APPLIED IN 5 ORDER TO DETERMINE THE QUANTUM OF ADDITION IN THE H ANDS OF THE ASSESSEE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, I DIRECT THE ASSESSING OFFICER TO MAKE THE ADDITION OF ONLY PEAK OF THE DEPOSITS IN THE SAVING BANK ACCOUNT NO. 51362010004200 AFTER OBTAINING TH E AUTHENTIC COPY OF THE BANK STATEMENT / PASS BOOK. 7. IN THE ABOVE TERMS, THE APPEAL IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2016 SD/- (H.L.KARWA) VICE PRESIDENT DATED : 29 TH JANUARY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR