Shri Yogesh V. Jadhav, Aurangabad V. ITO (Central), Aurangabad

ITA 876/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2003 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: V L JAIN
• Keywords: Unexplained expenditure; Gift; Income from undisclosed sources; Salary income; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.875/PN/2011 AND ITA NO.876/PN/2011 (ASSTT. YEARS : 2005-06 AND 2008-09) YOGESH V. JADHAV 10, SHRINIKETAN COLONY, JALNA ROAD, NEAR COSMOS BANK, AURANGABAD. .. APPELLANT PAN NO. AAVPJ5274G VS. ITO (CENTRAL) .. RESPONDENT AURANGABAD APPELLANT BY : SHRI V.L. JAIN RESPONDENT BY : SHRI MUKESH VERMA DATE OF HEARING : 08-03-2013 DATE OF PRONOUNCEMENT : 12-03-2013 ORDER PER R.K. PANDA, AM : THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DI RECTED AGAINST THE CONSOLIDATED ORDER DATED 08-04-2011 OF THE CIT( A), AURANGABAD RELATING TO ASSESSMENT YEARS 2005-06 AND 2008-09 RE SPECTIVELY. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER A ND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.875/PN/2011 (A.Y. 2005-06) : 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL RELATES TO THE ORDER OF THE CIT(A) IN CONFIRMING TH E ADDITION OF ` 1,20,504/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PEAK NEGATIVE CASH BALANCE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT IN RESPONS E TO NOTICE U/S.153A THE ASSESSEE FILED RETURN OF INCOME ON 23-11-2009 D ECLARING TOTAL INCOME OF ` 1,91,580/- WHICH IS THE SAME AS DECLARED U/S.139(1) . IT IS PERTINENT TO MENTION HERE THAT A SEARCH U/S.132 OF THE INCOME TAX ACT 2 WAS CONDUCTED IN THE CASE OF THE ASSESSEE AND OTHER GROUP MEMBERS ON 21-02-2008. DURING THE COURSE OF ASSESSMENT PROCEE DINGS THE ASSESSING OFFICER NOTICED FROM THE CASH BOOK THAT T HE ASSESSEE IS IN RECEIPT OF ADVANCE SALARY, GIFTS ETC, AND THE SAME RECEIPTS ARE UTILIZED TO DEPOSIT CERTAIN AMOUNTS IN THE BANK ACCOUNT AND TO MAKE OTHER PAYMENTS. THE AO AFFIRMED THAT AS PER THE CASH BOOK S FURNISHED FOR A.Y.2005-2006 TO A.Y.2008-2009, THERE EXISTS CASH D EFICIT AFTER CONSIDERING THE OPENING BALANCE IN THE CASH BOOK AN D DATE-WISE RECEIPTS AND PAYMENTS AS APPEARING IN THE CASH BOOKS. THE AO CALCULATED THE PEAK NEGATIVE CASH BALANCE IN EACH OF THE YEARS. TH E DETAILS OF DATES OF PEAK CASH DEFICIT BALANCE AND THE AMOUNT OF NEGATIV E CASH BALANCE WORKED OUT BY THE AO FOR A.Y.2005-2006 TO A.Y.2008- 2009 ARE AS FOLLOWS: ASSESSMENT YEARS DATE OF PEAK NEGATIVE CASH BALANCE PEAK NEGATIVE CASH BALANCE (RS.) A.Y. 2005-2006 31/1-/2004 1,20,504 A.Y. 2006-2007 24-03-2006 1,47,875 A.Y. 2007-2008 06-02-2007 1,34,901 A.Y. 2008-2009 31-12-2007 5,00,482 4. THE AO REJECTED THE CLAIM OF THE ASSESSEE THAT T HE ACCOUNTANT/ COMPUTER OPERATOR HAS ERRED IN RECORDING THE DATES OF GIFT RECEIVED IN CASH FROM SHRI. NARENDRA V. JADHAV, BROTHER OF THE ASSES SEE. HE CONCLUDED THAT THE CONTENTION OF THE ASSESSEE IS INCORRECT CONSIDE RING THE FACT THAT THE COPY OF ACCOUNT EXTRACT OF THE ASSESSEE IN THE BOOK S OF SHRI NARENDRA V.JADHAV CONTAINS THE DATES OF GIFTS CONFIRMING WIT H THE DATES OF GIFTS APPEARING IN THE CASH BOOKS OF THE ASSESSEE AND NOT AS CLAIMED BY THE ASSESSEE AS CORRECT LATER. THE AO MADE ADDITION OF PEAK NEGATIVE CASH BALANCE TOWARDS UNEXPLAINED EXPENDITURE IN EACH OF THE ASSESSMENT YEARS. IN THE REMAND REPORT, THE AO CONTENTED THAT IN THE ASSESSMENTS FOR A.Y.2002-2003 TO A.Y.2008-2009 IN THE CASE OF SHRI NARENDRA JADHAV, 3 THE ADDITION HAS BEEN MADE ON ACCOUNT OF NEGATIVE C ASH BALANCE IN EACH OF THE YEARS. THE AO CLAIMED THAT SHRI NARENDRA JAD HAV HAS FAILED TO PRODUCE ANY SUPPORTING EVIDENCE IN RESPECT OF AGRIC ULTURAL INCOME CLAIMED BY HIM EXCEPT COPIES OF 7/12 EXTRACT OF LAN D HOLDING FILED. THE AO CONCLUDED THAT IN VIEW OF THE ABOVE CIRCUMSTANCE S, THE GIFT AS SHOWN APPEARS TO BE NOT GENUINE. 5. BEFORE CIT(A) IT WAS CLAIMED THAT THE ACCOUNTANT/COMPUTER OPERATOR HAS INADVERTENTLY RECO RDED THE ENTRIES OF GIFTS RECEIVED IN CASH FROM THE BROTHER OF THE ASSE SSEE ON INCORRECT DATES. IT WAS CLAIMED THAT AFTER CONSIDERING THE CO RRECT DATES OF GIFTS RECEIVED, THERE IS NO NEGATIVE CASH BALANCE ON ANY SINGLE DAY. THE ASSESSEE FURNISHED THE DETAIL OF ERRONEOUS DATE OF ENTRY IN THE BOOKS OF ACCOUNTS, THE CORRECT DATE OF GIFT AND THE AMOUNT O F CASH GIFT, WHICH ARE AS FOLLOWS : DATE OF ENTRY IN THE BOOKS OF ACCOUNT ACTUAL DATE OF GIFT RECEIVED AMOUNT OF CASH GIFT (RS.) 24/11/2004 25/05/2004 1,50,000 29/03/2006 01/08/2005 1,50,000 24/02/2007 13/11/2006 3,00,000 15/02/2008 30/08/2007 1,50,000 IT WAS CLAIMED THAT THE ADDITION MADE BY THE AO IS A SUBJECT MATTER OF MISTAKE. IT WAS ARGUED THAT A MERE MISTAKE IN ACCOU NTS WRITING DOES NOT PROVE THAT THE ASSESSEE HAS MADE EXPENSES OUT OF HI S CONCEALED SOURCE OF INCOME. IT WAS FURTHER ARGUED THAT THE EXPENSES ARE SOURCED OUT OF GIFTS RECEIVED IN CASH FROM TIME TO TIME AND THEREFORE TH E SAME CANNOT BE TREATED AS SOURCED OUT OF UNEXPLAINED SOURCES OF IN COME. IT WAS ARGUED THAT THE ASSESSEE HAS NO OTHER SOURCE OF INCOME OTH ER THAN SALARY INCOME AND GIFTS RECEIVED FROM HIS REAL BROTHER. IT WAS SU BMITTED THAT THE AO HAS 4 NOT POINTED OUT ANY OTHER HIDDEN SOURCE OF INCOME. IT WAS CONTENTED BY THE ASSESSEE THAT DURING THE COURSE OF SEARCH ACTIO N ALSO, NO INCRIMINATING DOCUMENTS WERE FOUND TO ESTABLISH ANY OTHER SOURCE OF INCOME OF THE ASSESSEE. IT WAS PLEADED THAT THE CA SH GIFTS ARE RECEIVED BY HIM ON THE DATES MENTIONED IN THE COLUMN NO. 2 AS A BOVE AND NOT ON THE DATES RECORDED IN THE CASH BOOKS OF THE ASSESSEE. T O SUBSTANTIATE THE ABOVE CONTENTION, THE APPELLANT FILED COPIES OF GIF T DECLARATION OF SHRI NARENDRA V. JADHAV. 6. HOWEVER, THE LD. CIT(A) WAS NOT CONVINCED WITH T HE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE ADDITION MA DE BY THE AO BY HOLDING AS UNDER : 7 . 2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, ORDERS OF THE A.O., SUBMISSIONS OF THE APPELLANT AND RELEVANT EVIDENCE ON RECORD. THE CLAIM OF THE AO THAT THE ADDITION IS MADE ON ACCOUNT OF NEGA TIVE CASH BALANCES IN THE CASE OF SHRI NARENDRA JADHAV IS FACTUALLY INCORRECT . IN FACT, SHORT CASH HAS BEEN PHYSICALLY FOUND ON THE DATE, OF SEARCH ACTION . THE AO HAS FURTHER CLAIMED THAT THE GIFT APPEARS TO BE NOT GENUINE IN VIEW OF NON SUBMISSION OF EVIDENCE BY SHRI NARENDRA JADHAV IN SUPPORT OF AGRI CULTURAL INCOME. THE ADDITION MADE BY THE AO ON ACCOUNT OF ALLEGED EXCES SIVE AGRICULTURAL INCOME HAS BEEN MOSTLY DELETED IN THE CASE OF SHRI NARENDR A JADHAV. THE CLAIM OF SHRI NARENDRA JADHAV TOWARDS AGRICULTURAL INCOME EV EN IF NOT ACCEPTED WILL NOT IN ITSELF RENDER THE GIFT AS NOT GENUINE AS THE ALLEGED EXCESSIVE AGRICULTURAL INCOME IS TAXED BY THE AO IN THE HANDS OF SHRI NARENDRA JADHAV AS INCOME FROM UNDISCLOSED SOURCES. THE APPELLANT HAS CLAIMED THAT THE DATES RECORDED I N THE CASH BOOKS FOR CASH GIFTS ARE INCORRECT AND THE CASH GIFTS ARE RECEIVED ON DIFFERENT DATES. THE APPELLANT HAS FILED COPIES OF GIFT DECLA RATION BY THE DONOR, SHRI NARENDRA V.JADHAV TO PROVE THAT THE CASH GIFTS ARE RECEIVED ON DATES AS CLAIMED BY THE APPELLANT AND NOT ON THE DATES AS RE CORDED IN THE CASH BOOKS OF THE APPELLANT. THE APPELLANT HAS RELIED ON THE G IFT DECLARATIONS IN SUPPORT OF ITS CLAIM. ON PERUSAL OF THE COPIES OF GIFT DECL ARATIONS FILED, IT IS OBSERVED THAT THE DECLARATIONS ARE MADE BY THE DONOR ON THE FOLLOWING DATES: 5 ' IN THE DECLARATIONS FILED, THE DONOR HAS CLAIMED TH AT THE DECLARATIONS ARE MADE ON AFORESAID DATES. IT IS NOTICED THAT THE ASSESSME NT PROCEEDINGS WERE CONDUCTED ON DATES AFTER THE DATES CLAIMED IN THE D ECLARATIONS, THE CLAIM OF THE DONOR THAT THE DECLARATIONS ARE MADE ON AFORESAID D ATES CANNOT BE ACCEPTED: IN VIEW OF THE FACT THAT IF THE DECLARATIONS WERE M ADE ON AFORESAID DATES, THE SAME COULD HAVE BEEN FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. THE COPIES OF GIFT DECLARATIONS ARE FI LED DURING THE APPELLATE PROCEEDINGS AND WERE NOT FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. CONSIDERING THAT THE CLAIM OF THE DONO R IN RESPECT OF DATE OF DECLARATION MADE IS PROVED TO BE INCORRECT, THE OTH ER CONTENTS CANNOT BE ACCEPTED. IN VIEW OF THIS ANOMALY, THE GIFT DECLARA TIONS CANNOT BE ACCEPTED AS EVIDENCE. IT IS AN UNDISPUTED FACT THAT THE DATES OF CASH GIF TS RECORDED IN THE CASH BOOKS OF THE APPELLANT AND THE BOOKS OF ACCOUNT OF THE DONOR, SHRI NARENDRA V.JADHAV ARE THE SAME. HENCE, THE DATES AS RECORDED IN THE CASH BOOKS OF THE APPELLANT ARE REGARDED AS CORRECT AS THEY CORROBORA TE WITH THE DATES IN THE BOOKS OF ACCOUNTS OF THE DONOR, IN VIEW OF THE ABOV E' FACTS, THE CLAIM OF THE APPELLANT IS REJECTED. GROUND NO. 2 IS DISMISSED. WITHOUT PREJUDICE TO THE EARLIER CONTENTI ONS, IT HAS BEEN ALTERNATIVELY ARGUED BY THE APPELLANT THAT ON CONFI RMING THE ADDITION OF PEAK NEGATIVE CASH BALANCE ON ACCOUNT OF UNEXPLAINED EXP ENDITURE, THE CASH TO THE EXTENT OF ADDITION WILL CONSEQUENTLY BECOME AVAILAB LE TO THE APPELLANT IN THE SUCCEEDING YEAR FOR EXPLAINING THE SOURCE OF EXPENS ES. THE. AO HAS MADE ADDITIONS CONSIDERING THE OPENING BALANCE OF CASH I N THE CASH BOOK IN ALL THE YEARS. THE AO HAS NOT ADJUSTED THE OPENING CASH BAL ANCE TO THE EXTENT OF THE ADDITION IN THE PRECEDING YEAR. AFTER GIVING EFFECT OF THE ABOVE, THE ADDITIONS CONFIRMED ARE AS FOLLOWS: 6.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE OPPOS ING THE ORDER OF THE CIT(A) REITERATED THE SAME ARGUMENTS AS ADVANCE D BEFORE THE DATE OF DECLARATION AS CLAIMED BY THE DONOR AMOUNT OF CASH GIFT (RS.) 25/05/2004 1,50,000 01/08/2005 1,50,000 13/11/2006 3,00,000 30/08/2007 1,50,000 A.Y ADDITION MADE BY THE AO RELIEF ADDITION CONFIRMED 2005-2006 1,20,504 0 1,20,504 2006-2007 1,47,875 1,20,504 27,371 ,2007-2008 1,34,901 1,34,901 NIL 2008-2009 5,00,482 1,47,875 3,52,607 6 CIT(A). HE SUBMITTED THAT THE MATTER MAY BE RESTOR ED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE AV AILABILITY OF CASH ON THE ACTUAL DATE OF GIFT RECEIVED. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIN D THE LEARNED CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE DATES OF C ASH GIFTS RECORDED IN THE CASH BOOKS OF THE ASSESSEE AND THE BOOKS OF ACC OUNTS OF DONOR SRI. NARENDRA B. JADHAV ARE SAME AND THEREFORE THE DATES AS RECORDED IN THE CASH BOOKS OF THE ASSESSEE HAS TO BE RECORDED AS CO RRECT SINCE IT CORROBORATES WITH THE DATES IN THE BOOKS OF ACCOUNT S OF THE DONOR. THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT CONTROVE RT THE ABOVE FACTUAL FINDING GIVEN BY THE LEARNED CIT(A). WE FURTHER FI ND THE ASSESSEE HAS FILED THE COPIES OF THE GIFT DECLARATIONS DURING TH E APPELLATE PROCEEDINGS BUT THOSE WERE NOT FILED BEFORE THE ASSESSING OFFIC ER DURING ASSESSMENT PROCEEDINGS AND THEREFORE THE SUBMISSION OF THE ASS ESSEE AFTER A LONG GAP THAT THERE WAS MISTAKE IN RECORDING THE ENTRIE S OF GIFT RECEIVED IN CASH FROM THE BROTHER OF THE ASSESSEE ON INCORRECT DATES DOES NOT FIND MUCH FORCE IN IT. IN THIS VIEW OF THE MATTER AND I N VIEW OF THE DETAILED ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE WE FIND NO INFIRMITY IN THE SAME. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 7 ITA NO.876/PN/2011 (A.Y. 2008-09) : 10. THE ONLY GROUND RAISED BY THE ASSESSEE RELATES TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF ` 3,52,607/- BY THE ASSESSING OFFICER ON ACCOUNT OF PEAK NEGATIVE CASH BALANCE. 11. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUN D RAISED BY THE ASSESSEE IS IDENTICAL TO GROUND RAISED IN ITA NO.87 5/PN/2011. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE ASSESSEE HAS BEEN DISMISSED. FOLLOWING THE SAME RATIO, THE GROUND RA ISED BY THE ASSESSEE IS DISMISSED. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF MARCH, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED THE 12 TH MARCH 2013. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-AURGANABAD 4. THE CIT, AURANGABAD. 5. THE DR A BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE T RIBUNAL, PUNE.