Sh.Arundeep Singh Prop Ekam, Ludhiana V. Joint Commissioner Of Income Tax, Ludhiana

ITA 860/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8928 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 19-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: SUBHASH AGGARWAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 860/CHD/2016 ASSESSMENT YEAR: 2009-10 SH. ARUNDEEP SINGH PROP. VS. THE JCIT (OSD), CIRC LE-1, EKAM ENTERPRISES, LUDHIANA LUDHIANA PAN NO. ABRPS9307E (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUBHASH AGGARWAL DEPARTMENT BY : SH. MANJIT SINGH DATE OF HEARING : 28.11.2016 DATE OF PRONOUNCEMENT : 08.12.2016 ORDER PER ANNAPURNA GUPTA, A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)1 LUDHIANA, DA TED 27.05.2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THAT THE LD. CIT (A)1 HAS ERRED IN CONFIRMING ADDITION OF RS. 8,54,760/- BEING THE DEPOSIT IN THE BANK ACCOUNT IGNORING THE SUBMISSIONS MADE BY THE APPELLANT. 2. THAT IN ANY CASE THE ADDITION CONFIRMED IS AGAINST THE LAW AND FACTS OF THE CASE . 2 2. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITED IN THE BANK A CCOUNT AMOUNTING TO RS. 8,54,760/-. 3. BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT AS PER INDIVIDUAL TRANSACTION STATEMENT PERTAINING TO AIR, THERE WERE CASH DEPOSITS OF RS. 33,09,520/- IN THE SAVINGS BANK ACC OUNT OF THE ASSESSEE IN THE BANK OF INDIA AS PER DETAILS BELOW:- S.NO. NAME AND ADDRESS TRANSACTION AMOUNT TRANSACTION DATE FILTER BRACH NAME AND ADDRESS 1 ARUNDEEP SINGH 132-H, BRS NAGAR,LUDHIANA 141421 16,54,760 28.08.08 BANK OF INDIA LUDHIANA 141421 2 AMAN SINDHU & ARUNDEEP SINGH S/O GIAN SINGH, 132-H, BRS NAGAR, LUDHIANA 16,54,760 28.08.08 BANK OF INDIA LUDHIANA 141421 4. THE ASSESSEE WAS ASKED TO VERIFY THE SOURCE OF C ASH DEPOSITS IN THE BANK ACCOUNT. THE ASSESSEE SUBMITTED CASH FLOW STATEMENT EXPLAINING WITHDRAWAL OF CASH FROM AXIS BANK ACCOUN T AND DEPOSIT OF CASH IN THE BANK. AS PER THE CASH FLOW STATEMENT, C ASH DEPOSITS FROM 13.10.2008 TO 17.01.2009 AMOUNTING TO RS. 8,54,760/ - OUT OF RS. 3 16,54,960/- IN THE ACCOUNT OF AMAN SIDHU AND ARUNDE EP SINGH COULD NOT BE EXPLAINED ON ACCOUNT OF LACK OF CASH WITHDRA WAL, THE AO MADE AN ADDITION OF RS.25,09,520/- TO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE SAME THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT( APPEAL), WHO AFTER PERUSING THE FACTS BEFORE HIM, H ELD THAT THERE WAS ONLY ONE DEPOSIT OF RS. 16,54,760/- IN THE BANK AC COUNT OF THE ASSESSEE IN BANK OF INDIA AND, THEREFORE, DELETED T HE ADDITION MADE TO THE EXTENT OF RS. 16,54,760/-. THE REMAINING ADDITI ON OF RS. 8,54,960/- WAS UPHELD BY THE CIT(A) IN THE ABSENCE OF ANY JUST IFICATION GIVEN BY THE ASSESSEE FOR THE PURPOSE OF MAKING WITHDRAWALS FROM AXIS BANK, KEEPING THE AMOUNT FOR A LONG PERIOD OF TIME AND TH EN RE-DEPOSITING IN THE BANK OF INDIA. 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE STATED THAT THE DEPOSIT IN THE BANK OF INDIA WAS DULY EXPLAINED BY THE CASH WI THDRAWALS FROM AXIS BANK REFLECTED IN THE CASH FLOW STATEMENT WHIC H WAS FILED BEFORE THE LOWER AUTHORITIES ALSO. LD. COUNSEL DREW OUR AT TENTION TO THE CASH FLOW STATEMENT AND POINTED OUT THAT THE CASH WITHDR AWALS TOTALLED RS. 29,00,000/- DURING THE YEAR WHICH WAS MORE THAN SUF FICIENT FOR THE DEPOSIT OF RS. 16,54,760/-. LD. DR ON THE OTHER H AND RELIED UPON THE ORDER OF THE CIT( A). 6. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS ALSO THE DOCUMEN TS PLACED BEFORE US. THE ONLY ISSUE IN DISPUTE RELATES TO THE SOURCE OF DEPOSIT OF CASH IN THE 4 BANK AMOUNTING TO RS. 8,54,760/-. THESE DEPOSITS WERE MADE IN THE BANK ACCOUNT OF THE ASSESSEE IN BANK OF INDIA BETWE EN 13.10.08 AND 17.01.09 AS FOLLOWS:- 13/10/2008 2, 50,000/- 16/10/2008 3, 00,000/- 20/10/2008 50, 000/- 21/10/2008 24, 760/- 17/01/2009 2,30,000/- AS PER THE CASH FLOW STATEMENT, THE CASH BALANCE AV AILABLE WITH THE ASSESSEE AS ON THE DATE OF MAKING THE ABOVE CASH DE POSITS WAS RS. 14 LAKHS, WHICH WAS ON ACCOUNT OF WITHDRAWALS MADE FRO M 20/08/2008 TO 29/09/2008. THIS BALANCE WAS MORE THAN SUFFICIENT T O MEET THE DEPOSITS OF RS. 8,54,760/. . THE ARGUMENT OF THE LD . DR THAT THE ASSESSEE HAS GIVEN NO JUSTIFICATION FOR WITHDRAWING THE AMOUNTS MERITS NO CONSIDERATION SINCE THE ASSESSEE HAS CLAIMED THA T THE ENTIRE CASH WAS RETAINED BY HIM AND THE PERIOD OF RETENTION ALS O DOES NOT APPEAR TO BE UNREASONABLY LONG TO REJECT THE ASSESSEES EXPLAN ATION. AS PER THE CASH FLOW STATEMENT, THE AVAILABLE CASH BALANCE FRO M WITHDRAWALS MADE IN FROM 20 TH TO 28 TH AUGUST 2008 AND THE NET WITHDRAWALS FROM AXIS BANK IN THE MONTH OF SEPTEMBER 2008 AMOUNTED T O RS. 14,00,000/ WHICH WERE DEPOSITED TO THE EXTENT OF RS . 9,24,760/- FROM 13/10/2008 TO 21/10/2008. THUS, CASH WAS RETAINED F OR A PERIOD OF ONE MONTH WHICH CANNOT BE SAID TO BE AN UNREASONABLE PE RIOD . FURTHER, WITHDRAWAL IN CASH FROM AXIS BANK ON 10/11/2008 OF RS.7 LAKHS WAS 5 DEPOSITED TO THE EXTENT OF RS.2,30,000/- ON 17.01.2 009. AGAIN, THE HOLDING PERIOD IS APPROXIMATELY 2 MONTHS WHICH CANN OT BE SAID TO BE UNREASONABLY LONG. MOREOVER WE FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE UTILIZED THE CASH IN ANY OTHER MANNER. THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F SHIV CHARAN DASS VS.CIT, PUNJAB 126 ITR 263(P&H) HAS HELD THAT WHERE THE EXPLANATION OF THE ASSESSEE WAS REASONABLE AND THER E WAS NOTHING ON RECORD TO SHOW THAT THE AMOUNT WAS UTILIZED BY THE ASSESSEE IN ANY OTHER MANNER THAN THE ONE WHICH WAS REPRESENTED BY THE ASSESSEE, THE ONUS LAY ON THE DEPARTMENT TO SHOW THAT THE EXPLANA TION OF THE ASSESSEE SHOULD NOT BE ACCEPTED. THE HONBLE HIGH C OURT HELD AS FOLLOWS: IT IS ALSO NOT DISPUTED THAT THE AMOUNT OF RS. 10, 000 EACH WAS FOUND DEPOSITED IN THE NAMES OF THE TWO MAJOR DAUGHTERS OF THE ASSESSEE. SUDARSHAN KUMARI WAS 18 YEARS OF AGE AT THE TIME OF PARTIAL PARTITIO N OF THE HUF, WHEREAS SATYA METHA WAS 13 YEARS OLD. THE MONEY WAS FOUND DEPOSITED IN THE NAMES OF THE TWO GIRLS AFTER FIVE YEARS OF THE PARTIAL PARTITION AND , THEREFORE, IT IS OBVIOUS THAT BOTH THESE DAUGHTERS WERE MAJOR AT THE TIME WHEN THE MONEY WAS FOUND DEPOSITE D IN THEIR NAMES. THE ASSESSEE TOOK THE PLEA THAT THI S AMOUNT REPRESENTED A SUM OF RS. 20,000 BELONGING TO THE HUF WHICH WAS DECLARED UNDER THE VOLUNTARY DISCLOSURE SCHEME. IT IS NOT DISPUTED THAT A SUM OF RS. 20,000 WAS DECLARED BY THE HUF OF WHICH THE ASSESSE E WAS THE KARTA UNDER THE DISCLOSURE SCHEME IN OCTOBE R, 1951. IT HAS ALSO BEEN FOUND THAT THIS AMOUNT OF RS . 6 20,000 WAS NOT FOUND MENTIONED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, NOR THE SAME WAS FOUND TO HAVE BEEN DEPOSITED IN THE ACCOUNTS OF THE ASSESSEE OR THAT OF THE HUF. THAT BEING SO, THE EXPLANATION OFF ERED BY THE ASSESSEE HAS TO BE ACCEPTED IN THE ABSENCE O F ANY OTHER EVIDENCE TO SHOW THAT A SUM OF RS. 20,000 DISCLOSED UNDER THE DISCLOSURE SCHEME WAS UTILISED BY THE ASSESSEE OR BY THE HUF IN SOME OTHER MANNER THA N THE ONE WHICH WAS REPRESENTED BY THE ASSESSEE. THE AAC AS WELL AS THE TRIBUNAL CAME TO THE CONCLUSION THAT THERE WAS NOTHING ON THE RECORD TO SHOW THAT T HIS SUM WAS UTILISED BY THE ASSESSEE IN ANY OTHER MANNE R. THAT BEING SO, THE ONUS HEAVILY LAY ON THE REVENUE TO SHOW THAT THE EXPLANATION PUT FORTH BY THE ASSESSEE SHOULD NOT BE ACCEPTED, BUT THERE IS NOTHING ON THE RECORD TO SHOW THAT. THEIR LORDSHIPS OF THE SUPREME COURT IN SREELEKA BANERJEE V. CIT [1963] 49 ITR (SC ) 112 , HELD AS FOLLOWS (P. 120): 'IN CASES OF HIGH DENOMINATION NOTES, WHERE THE BUSINESS AND THE STATE OF ACCOUNTS AND DEALINGS OF THE ASSESSEE JUSTIFY A REASONABLE INFERENCE THAT HE MIG HT HAVE FOR CONVENIENCE KEPT THE WHOLE OR A PART OF A PARTICULAR SUM IN HIGH DENOMINATION NOTES, THE ASSESSEE, PRIMA FACIE, DISCHARGES HIS INITIAL BURDE N WHEN HE PROVES THE BALANCE AND THAT IT MIGHT REASONABLY HAVE BEEN KEPT IN HIGH DENOMINATION NOTE S. BEFORE THE DEPARTMENT REJECTS SUCH EVIDENCE, IT MUS T EITHER SHOW AN INHERENT WEAKNESS IN THE EXPLANATION OR REBUT IT BY PUTTING TO THE ASSESSEE SOME INFORMATIO N OR EVIDENCE WHICH IT HAS IN ITS POSSESSION. THE DEPART MENT CANNOT BY MERELY REJECTING UNREASONABLY A GOOD EXPLANATION, CONVERT GOOD PROOF INTO NO PROOF.' 7 IF THE AMOUNT OF RS. 20,000 DISCLOSED UNDER THE DISCLOSURE SCHEME HAD BEEN FOUND TO BE DEPOSITED OR UTILISED BY THE ASSESSEE OR THE HUF IN SOMEOTHER MANNER, IN THAT CASE, A LEGITIMATE INFERENCE COULD BE DRAWN THAT THE AMOUNT IN DISPUTE WAS FROM UNDISCLOS ED SOURCES AS THE AMOUNT SO DISCLOSED IN THE DISCLOSUR E SCHEME HAD BEEN FOUND TO BE OTHERWISE UTILISED BY T HE ASSESSEE OR BY THE HUF BUT THE FINDING ON THIS ASPE CT OF THE CASE IS OTHERWISE. THE ABOVE OBSERVATIONS OF THEIR LORDSHIPS OF THE SUPREME COURT GO TO SUPPORT THE VIEW TAKEN BY US IN THIS CASE. 8. IN VIEW OF THE ABOVE, WE HOLD THAT THE DEPOSITS OF RS. 8,54,760/- STAND EXPLAINED AND ADDITION ON ACCOUNT OF THE SAME , THEREFORE, BE DELETED. THE APPEAL OF THE ASSESSEE THEREFORE STAND S ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8 TH DECEMBER, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 8