Vivek Shriram Kalkar, Pune V. Deputy Commissioner of Income-tax,

ITA 890/PUN/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9486 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHERSHAN SHEKHAR
• Assessee Lawyers: PRAMOD JADHAV
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 890 /P U N/201 6 / ASSESS MENT YEAR : 20 08 - 09 SHRI VIVEK SHRIRAM KALKAR, HOUSE 303, 3 RD FLOOR, TWIN TOWER, NEAR PARIHAR CHOWK, AUNDH, PUNE 411007 . / APPELLANT PAN: A LNPK6433B VS. THE DY. COMMISSIONER OF INCOME TAX , CIRCLE 3, PUNE . / RESP ONDENT / APPELLANT BY : SHRI PRAMOD JADHAV / RESPONDENT BY : S HRI SUDHERSHAN SHEKHAR , JCIT / DATE OF HEARING : 2 4 . 0 5 .201 7 / DATE OF PRONOUNCEMENT: 26 . 0 5 .201 7 / OR DER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 3 , PUNE , DATED 29.01.2016 RELATING TO ASSESSMENT YEAR 20 08 - 09 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 890 /P U N/20 1 6 S HRI VIVEK SHRIRAM KALKAR 2 GROUND NO.1: THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.14,95,000/ - MADE BY THE AO ON THE GROUND OF ALLEGED UNACCOUNTED CASH CREDIT UNDER SECTION 68 OF INCOME TAX ACT, 1961. GROUND NO.2: WITHOUT PREJUDICE TO THE GROUND NO.1 THE LEARNED CIT(A) HAS ERRED IN NOT RELYING ON THE RATIO DECIDENDI OF HONBLE BOMBAY HIGH COURT DECISION IN CASE OF CIT VS BHAICHAND H. GANDHI (1983) 141 ITR 67 (BOM), WHEREIN IT HAS BEEN HELD THAT ADDITION UNDE R SECTION 68 OF THE ACT ON THE BASIS OF ENTRY IN THE PASS BOOK IS JUSTIFIED. IN VIEW OF THE ABOVE GROUND AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELLANT PRAYS YOUR HONOUR S TO DELETE THE ADDITIONS TO THE RETURNED INCOME MADE BY THE AO WHICH HAS BEEN SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT(A). 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ADDITION MADE UNDER SECTION 68 OF THE ACT AT RS.14,95,000/ - . 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE IS AN INDIVIDUAL AND WA S CARRYING ON BUSINESS OF TOURIST & CAR HIRE BUSINESS UNDER THE NAME AND STYLE M/S. TRAVEL TIME CAR RENTAL, PUNE. THE ASSESSING OFFICER RECEIVED ITS DATA, AS PER WHICH, THE ASSESSEE HAD DEPOSITED CASH OF RS.18,95,000/ - IN SARASWAT CO - OPERATIVE BANK LTD . ON VARIOUS DATES. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT. IN REPLY, THE ASSESSEE EXPLAINED THAT RS.4 LAKHS WAS WITHDRAWN FROM HIS PROPRIETARY CONCERN ON 20.08.2007 AND IN RESPECT OF BALANCE SUM OF RS.14,95,000/ - , THE ASSESSEE EXPLAINED THAT THE SOURCE OF SAME WAS ADVANCE RECEIVED FOR SALE OF AGRICULTURAL LAND AT BULDHANA TO BE SOLD BY MR. SHRIRAM KALKAR I.E. THE FATHER OF ASSESSEE TO HIS BROTHERS. THE ASSESSING OFFICER NOTED THAT THE BANK ACCOUNT IN WHICH CASH HAS BEEN DEPOSITED WAS NOT DISCLOSED BY THE ASSESSEE IN HIS TAX RETURN AND ALSO THERE WAS NO REASON FOR ASSESSEE TO DEPOSIT CASH RECEIVED AS ADVANCE BY HIS FATHER, IN HIS BANK ACCOUNT . T HE EXPLANATION WAS HELD TO BE AN AFTERTHOUGHT ITA NO. 890 /P U N/20 1 6 S HRI VIVEK SHRIRAM KALKAR 3 AND WAS NOT ACCEPTED AN D ADDITION OF RS.14,95,000/ - WAS MADE AS UNACCOUNTED CASH CREDIT UNDER SECTION 68 OF THE ACT. 5. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER, NOT ACCEPTING THE EXPLANATION OF ASSESSEE THAT THE SAID AMOUNT WAS RECEIVED ON BEHALF OF HIS FATHER BY THE A SSESSEE FROM HIS UNCLE SHRI SAKHARAM P. KALKAR, ON AGREEMENT TO SELL HIS SHARE IN ANCESTRAL PROPERTY SITUATED AT BULDHANA. THE ASSESSEE FURTHER EXPLAINED THAT THE TRANSACTION WAS AGREED AT RS.40 LAKHS UNDER AN UNREGISTERED INSTRUMENT DATED 16.03.2007, UND ER WHICH RS.6 LAKHS IN CASH WAS PAID ON 16.03.2007 AND THE BALANCE OF RS.34 LAKHS WAS TO BE GIVEN IN THE NEXT FIVE YEARS. THEREAFTER, THE ASSESSEE REFERRED TO THE CASH RECEIPTS I.E. ROCK PAVATI SIGNED BY THE FATHER OF ASSESSEE ON DIFFERENT DATES. THE ASS ESSEE EXPLAINED THAT THE AMOUNT WAS RECEIVED BY HIM ON BEHALF OF HIS FATHER AND IT WAS TRANSFERRED TO HIS ACCOUNT ON THE VERY NEXT DAY. THE ASSESSEE ALSO EXPLAINED THE SOURCE OF EARNING OF HIS UNCLE I.E. THROUGH AGRICULTURAL INCOME. HOWEVER, THE PLEA OF ASSESSEE WAS REJECTED ON THE GROUND THAT THE ASSESSEE HAD NOT DISCLOSED THE SAID BANK ACCOUNT WITH SARASWAT CO - OPERATIVE BANK LTD. IN THE RETURN OF INCOME. THE CIT(A) OBSERVED THAT THERE WERE SEVERAL TRANSACTION IN THE SAID BANK WHICH WERE CLEARLY LINKED TO HIS BUSINESS ACCOUNT, THEREFORE, THE PROPOSITION OF ASSESSEE THAT HE HAD NOT DECLARED HIS NON - BUSINESS ACCOUNT, WAS NOT ACCEPTED. THE EXPLANATION OF ASSESSEE OF RECEIPT OF CASH BY HIS FATHER AND DEPOSIT OF CASH IN HIS BANK ACCOUNT AND THEN TRANSFER TO THE ACCOUNT OF FATHER, WAS HELD TO BE ILLOGICAL. THE CIT(A) UPHELD THE ADDITION, AGAINST WHICH THE ASSESSEE IS IN APPEAL. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE THE TRIBUNAL HAS POINTED OUT THAT THE CASH ADMITTEDLY, WAS DEPOSITE D IN THE SAID ITA NO. 890 /P U N/20 1 6 S HRI VIVEK SHRIRAM KALKAR 4 BANK ACCOUNT AND THE SOURCE OF CASH WAS PART PAYMENT OF SALE OF AGRICULTURAL LAND BY HIS FATHER TO HIS UNCLE AND IN THIS REGARD, HE REFERRED TO THE AGREEMENT OF SALE PLACED AT PAGES 35 AND 36 ALONG WITH ENGLISH TRANSACTION AT PAGES 37 AND 38 OF THE PAPER BOOK. HE FURTHER POINTED OUT THAT IN THE PRECEDING YEAR, SIMILARLY CASH OF RS.6 LAKHS WAS RECEIVED AND IN THE CURRENT YEAR, CASH OF RS.14 LAKHS HAS BEEN RECEIVED. HE FURTHER EXPLAINED THAT THE ASSESSEE HAD A BANK ACCOUNT IN BULDHANA AND THE CASH RECEIVED FROM HIS UNCLE WAS DEPOSITED IN BULDHANA ITSELF AND THEREAFTER, ON THE NEXT DATE, THE ASSESSEE ISSUED CHEQUE TO HIS FATHER AND AMOUNT WAS TRANSFERRED TO HIS ACCOUNT. HE REFERRED TO THE OBSERVATIONS OF THE CIT(A) THAT THE BANK ACCOUNT OF HIS UNCLE DID NOT SHOW THE CASH WITHDRAWALS. HE POINTED OUT THAT THE SAID BANK ACCOUNT WA S FILED TO SHOW THAT HIS UNCLE HAD INCOME FROM AGRICULTURE AND THE RECEIPTS WERE BEING DEPOSITED IN HIS BANK ACCOUNT. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR TH E REVENUE STRESSED THAT WHERE THE BANK ACCOUNT WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE, THEN THERE IS NO MERIT IN THE PLEA OF ASSESSEE. HE PLACED RELIANCE ON THE ORDER OF CIT(A) ESPECIALLY AT PARA 35 ON PAGE 10 OF THE APPELLATE ORD ER. 8. ON PERUSAL OF RECORD AND AFTER HEARING AR GUMENTS OF BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS.14,95,000/ - UNDER SECTION 68 OF THE ACT. THE ASSESSING OFFICER DURING THE Y EAR UNDER CONSIDERATION HAD RECEIVED INFORMATION THROUGH ITS DATA THAT SUM OF RS.18,95,000/ - HAS BEEN DEPOSITED IN THE BANK ACCOUNT OF ASSESSEE WITH SARASWAT CO - OPERATIVE BANK LTD. THE DETAILS OF DEPOSITS DATE - WISE ARE AS UNDER: - ITA NO. 890 /P U N/20 1 6 S HRI VIVEK SHRIRAM KALKAR 5 DATE OF DEPOSIT AMOUNT P ARTICULARS OF BANK 11.06.2007 2,00,000 SARASWAT COOPERATIVE BANK LTD. 14.06.2007 4,00,000 15.06.2007 3,00,000 30.07.2007 3,50,000 21.08.2008 3,25,000 22.08.2007 3,20,000 18,95,000 9. THE ASSESSEE EXPLAINED THAT SUM OF RS.4 LAKHS WAS WITHDRAWN OUT OF HIS PROPRIETARY CONCERN AND WAS DEPOSITED IN HIS BANK ACCOUNT. THIS PLEA OF THE ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER AND NO ADDITION WAS MADE IN THIS REGARD. HOWEVER, IN RESPECT OF BALANCE CREDIT OF RS.14,95,000/ - , T HE ASSESSEE OFFERED AN EXPLANATION WHICH HAS NOT BEEN ACCEPTED. AS PER THE CASE OF ASSESSEE, THE FATHER OF ASSESSEE HAD JOINTLY OWNED CERTAIN AGRICULTURAL LAND ALONG WITH HIS BROTHER. THERE WAS AN UNDERSTANDING BETWEEN THE BROTHERS, WHEREIN THE FATHER OF ASSESSEE AGREED TO SELL HIS PORTION OF LAND TO HIS BROTHER FOR TOTAL CONSIDERATION OF RS.40 LAKHS. IN THIS REGARD, AN AGREEMENT WAS ENTERED INTO ON 16.03.2007, COPY OF WHICH IS AVAILABLE BOTH IN MARATHI AND ENGLISH TRANSLATION OF RECORD. THE FATHER OF A SSESSEE HAD RECEIVED RS.6 LAKHS ON 16.03.2007 ITSELF AND BALANCE OF RS.34 LAKHS WAS TO BE PAID WITHIN PERIOD OF FIVE YEARS. DURING THE YEAR UNDER CONSIDERATION, THE FATHER OF ASSESSEE RECEIVED FURTHER SUM OF RS.14,95,000/ - FOR WHICH ROCK PAVATI I.E. CAS H RECEIPTS WERE ISSUED BY THE FATHER OF ASSESSEE. THE COPIES OF SAID CASH RECEIPTS ARE FILED IN THE PAPER BOOK AND DATE - WISE CASH RECEIPTS ARE AS UNDER: - DATE OF RECEIPT AMOUNT 07.03.2007 2,00,000 12.06.2007 4,00,000 14.06.2007 3,00,000 30.07. 2007 3,50,000 18.08.2007 2,45,000 10. THE SAID CASH RECEIVED BY THE FATHER OF ASSESSEE WAS DEPOSITED IN THE BANK ACCOUNT OF ASSESSEE AT BULDHANA. THE AGRICULTURAL LAND IS SITUATED IN THE ITA NO. 890 /P U N/20 1 6 S HRI VIVEK SHRIRAM KALKAR 6 VICINITY OF BULDHANA AND THE UNCLE OF ASSESSEE WHO, THE ASSESS EE CLAIMED HAD MADE THE SAID PAYMENT AS PER THE AGREEMENT TO SELL ALSO RESIDES IN BULDHANA. THE PERUSAL OF BANK ACCOUNT REFLECTS THAT UPON CASH DEPOSIT IN THE SAID BANK ACCOUNT, CHEQUES WERE ISSUED BY THE ASSESSEE IN THE NAME OF HIS FATHER. THE ASSESSEE EXPLAINS THAT BECAUSE OF CERTAIN DIFFERENCES IN THE FAMILY, THE SAID AMOUNT WAS DEPOSITED IN THE SAID ACCOUNT AT BULDHANA AND THEN, WAS TRANSFERRED TO PUNE TO HIS FATHERS ACCOUNT. THE SAID EXPLANATION OF THE ASSESSEE HAS NOT BEEN ACCEPTED BY THE REVENUE AUTHORITY AND HENCE, THE ADDITION. THE FIRST OBJECTION OF REVENUE AUTHORITIES IS THAT THE SAID BANK ACCOUNT WAS NOT DISCLOSED IN HIS RETURN. HERE, IT MAY BE POINTED OUT THAT THE TOTAL CASH DEPOSIT IN THE SAID BANK WAS RS.18,95,000/ - AND THE EXPLANATION O F ASSESSEE IN RESPECT OF RS.4 LAKHS CASH DEPOSIT BEING OUT OF WITHDRAWALS FROM HIS SOLE PROPRIETARY CONCERN, HAS BEEN ACCEPTED AND NO ADDITION HAS BEEN MADE IN THE HANDS OF ASSESSEE. IN CASE THE BANK ACCOUNT HAS NOT BEEN DISCLOSED BY THE ASSESSEE AND THAT IS THE REASON FOR MAKING THE ADDITION, THEN THE ADDITION IN THE HANDS OF ASSESSEE SHOULD HAVE BEEN MADE OF RS.18,95,000/ - AND NOT RS.14,95,000/ - . THE AUTHORITIES BELOW HAVE TAKEN DIFFERENT STAND S IN RESPECT OF CASH DEPOSIT OF RS.4 LAKHS AND CASH DEPOSIT TOTALING RS.14,95,000/ - AND THERE IS NO MERIT IN THE STAND OF AUTHORITIES BELOW IN THIS REGARD. 11. NOW, COMING TO THE EXPLANATION FILED BY THE ASSESSEE THAT HIS FATHER AGREED TO SELL HIS SHARE OF ANCESTRAL LAND TO HIS BROTHER FOR SUM OF RS.40 LAKHS, AGAI NST WHICH SUM OF RS.6 LAKHS WAS RECEIVED IN THE PRECEDING YEAR AND RS.14,95,000/ - WAS RECEIVED DURING THE INSTANT ASSESSMENT YEAR. THE ASSESSEE HAS PLACED ON RECORD THE COPY OF AGREEMENT TO SELL AND THE ROCK PAVATI ISSUED BY THE FATHER OF ASSESSEE ON DI FFERENT DATES ACCEPTING THE SAID ITA NO. 890 /P U N/20 1 6 S HRI VIVEK SHRIRAM KALKAR 7 CASH. THE SAID CASH HAS ALSO IMMEDIATELY BEEN TRANSFERRED TO THE BANK ACCOUNT OF FATHER OF ASSESSEE. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND BECAUSE OF FAMILY CONNECTION BETWEEN THE PERSONS TRANSACTI NG THE SAID TRANSACTION, THERE IS NO MERIT IN NOT ACCEPTING THE PLEA OF ASSESSEE AND IN MAKING THE AFORESAID ADDITION. ACCORDINGLY, THE ORDER OF CIT(A) IS SET - ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.14,95,000/ - . THE GROUN D OF APPEAL NO.1 IS THUS, ALLOWED. THE ALTERNATE PLEA RAISED BY THE ASSESSEE VIDE GROUND OF APPEAL NO.2 IS THUS, DISMISSED. 12 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 26 TH DAY OF MAY , 201 7 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 26 TH MAY , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 3 , PUNE ; 4. / THE PR. CIT - 2, PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE