Income Tax Officer,Ward-8(1), Nagpur V. Shri. Sunil Vishwambharnath Tiwari, Nagpur

ITA 9/NAG/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2972 (ITAT-NAGPUR)
• Duration Of Justice: 9 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R B ATAL
• Keywords: Unexplained investment; Gift; Income from undisclosed sources
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D. T. GARASIA, HONBLE JUDICIAL MEMBER I.T.A. NO.09/NAG/10 ASSESSMENT YEAR: 06-07 A.C.I.T., VS. SMT. SHAHIN IRFAN JAKHURA, CENTRAL CIRCLE, SHIVAJI NAGAR, BANOSA, AKOLA. DARYAPUR, AMRAVATI. PAN:AHWPJ4275F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. RAJARAM, ADDL. CIT, DR. MILIND BHUSARI, C.I.T. (D.R.) RESPONDENT BY : SHRI R. B. ATAL, ADVOCATE DATE OF HEARING :10/10/2012 DATE OF PRONOUNCEMENT :07/12/2012 ORDER PER D. T. GARASIA: THIS APPEAL IS FILED BY THE DEPARTMENT AGAINST ORDER OF CIT (A)I, NAGPUR, DATED 15/03/2010. IN THIS APPEAL, THE DEPARTMENT HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS: (I) THE HON'BLE CIT(A) HAS ERRED ON FACTS AND IN LAW BY ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT, RELYING ON A CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE WHICH IS PROVED TO BE NOT ACCEPTABLE IN THE ASSESSMENT PROCEEDINGS AND PARTICULARLY WHEN THE SOURCES OF DEPOSITS ARE PROVED TO BE UNEXPLAINED. (II) THE HON'BLE CIT(A) HAS ERRED ON FACTS AND IN LAW BY ALLOWING RELIEF TO THE ASSESSEE ON UNEXPLAINED INVESTMENT IN AGRICULTURAL LAND WHEN IT IS CONCLUSIVELY PROVED WITH EVIDENCE I.T.A. NO. 09/NAG/2010 2 THAT THE SOURCE OF SUCH INVESTMENT IS UNEXPLAINED ON THE DATE OF TRANSACTION. (III) THE HON'BLE CIT(A) HAS ERRED ON FACTS AND IN LAW BY ALLOWING RELIEF TO THE ASSESSEE ON THE ISSUE OF UNEXPLAINED WITHDRAWALS ON ACCOUNT OF MARRIAGE ACCEPTING THE SELF SUPPORTING FINANCIAL STATEMENT SUBMITTED BY THE ASSESSEE WHICH HAVE NO SANCTITY. (IV) ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. THE SHORT FACTS RELATED TO FIRST GROUND OF APPEAL ARE THAT A SEARCH & SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT ON 14/02/2007 AND 15/02/2007 IN THE GHANIWALA GROUP OF DARYAPUR, AMRAVATI AND DURING THE COURSE OF SEARCH, A BANK ACCOUNT NO. 5232 WITH DR. PUDC BANK, DARYAPUR AND ACCOUNT NO. 8887 OF A.D.C.C. BANK WAS FOUND AND TOTAL AMOUNT IN THESE TWO BANKS WERE RS.2,26,000/-. THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE AS TO WHY THE CASH DEPOSITED SHOULD NOT BE TREATED AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE, IN HIS REPLY TO SHOW CAUSE NOTICE, SUBMITTED THAT HER INCOME IS RS.98,600/- AND AGRICULTURE INCOME OF RS.1,05,280/- IS THE SOURCE OF DEPOSIT. THE ASSESSEE ALSO TRIED TO EXPLAIN THE SOURCE OF CREDIT OF RS.1,81,000/- PARTLY THROUGH CASH GIFT OF RS.1,20,000/- RECEIVED FROM HER SISTER SMT. ASHIYA FAROOQ GHANIWALA ON 15/11/2000. THE ASSESSING OFFICER HAS CONSIDERED THE REPLY OF THE ASSESSEE HE HAS ADDED THE CASH CREDIT AMOUNTING TO RS.2,26,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 3. THE ASSESSEE CARRIED THE MATTER TO CIT(A) AND CIT(A) HAS DELETED THIS ADDITION BY OBSERVING AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSIONS AND ALSO GONE THROUGH THE FINANCIAL STATEMENTS AND BANK STATEMENTS, THE CERTIFIED COPY OF WHICH ARE FILED ON RECORD. I HAVE ALSO GONE THROUGH THE FINDINGS OF THE ASSESSING OFFICER AS PER THE ASSESSMENT ORDER AND ALSO GONE THROUGH THE REMAND REPORT. DURING THE CURRENT YEAR THE APPELLANT HAS SHOWN AN INCOME OF RS. 98,600/- AND AGRICULTURAL INCOME OF RS.1,05,280/- IN THE RETURN OF INCOME. THE AGRICULTURAL 2 I.T.A. NO. 09/NAG/2010 3 INCOME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN PARA 6 OF THE ASSESSMENT ORDER. APART FROM THAT THE APPELLANT HAS RECEIVED RS.1,20,000/- FROM HER SISTER SMT. AHIYA FAROOQ GHANIWALE. AS PER SMT. ASHIYA'S CASH BOOK THERE WAS SUFFICIENT AVAILABILITY OF FUND AND THE OPENING BALANCE IN HER CASE IS OF RS.4,91,828/- AS ON 01-04-2005. APART FROM THAT THERE WAS SUFFICIENT CASH AVAILABLE IN THE BOOKS OF THE ASSESSEE, WHICH SHE HAS ACCUMULATED OUT OF EARLIER YEARS' INCOME, WHICH HAS BEEN ASSESSED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER WITHOUT PROPERLY ANALYZING THE CASH BOOK OF THE ASSESSEE, HAS SUMMARILY DISMISSED THE SAME. NEEDLESS TO SAY THAT THIS BEING A SEARCH CASE, THE ADDITIONS ARE TO BE BASED ON THE ANALYSIS OF THE SEIZED MATERIAL OR ANY OTHER DOCUMENTARY EVIDENCE CULLED OUT IN THE POST-SEARCH ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY SUCH EVIDENCE ON RECORD. HENCE, IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION BASED ON THE CASH DEPOSITS IN THE BANK BY THE ASSESSING OFFICER IS NOT JUSTIFIED AS THE ASSESSING OFFICER WITHOUT CONSIDERING THE CASH AVAILABILITY WITH THE APPELLANT, HAS GIVEN A LOPSIDED FINDING, WHICH IS NOT PROPER AND NOT WARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS, CONSIDERING THE EVIDENCE AND OTHER DOCUMENTS, THE ADDITION OF RS.2,26,000/- IS HEREBY DIRECTED TO BE DELETED AS THERE IS NO JUSTIFICATION FOR MAKING THIS ADDITION, MORE PARTICULARLY AS THE FUNDS ARE AVAILABLE WITH THE APPELLANT AS PER THE DAY TO DAY FINANCIAL TRANSACTIONS. 4. THE LEARNED D. R. RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE DEPOSIT IN BANK ACCOUNT IS ORIGINATED FROM UNDISCLOSED SOURCES OF THE ASSESSEE. THE ASSESSEE SUBMITTED THAT SHE HAS RECEIVED THE GIFT FROM HER SISTER BUT IT IS MERELY AN AFTERTHOUGHT PLEA AND IT IS NOT SUPPORTED BY ANY PROOF, THEREFORE, THE ASSESSING OFFICER IS JUSTIFIED IN HIS ACTION. 5. ON THE OTHER HAND THE LEARNED A. R. RELIED UPON THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEE HAS SUBMITTED FINANCIAL STATEMENT AND BANK STATEMENT AND CERTIFIED COPY FILED ON RECORD. THE CIT(A) CALLED FOR REMAND REPORT AND DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN INCOME OF RS.98,600/- AND AGRICULTURE INCOME OF RS.1,05,280/- IN HER RETURN OF INCOME. THE AGRICULTURE INCOME HAS 3 I.T.A. NO. 09/NAG/2010 4 BEEN ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSEE HAS ALSO RECEIVED GIFT OF RS.1,20,000/- FROM HER SISTER SMT. ASHIYA FAROOQ GHANIWALA WHO HAS SUFFICIENT FUNDS. ANALYZING ALL THESE FACTS, THE CIT(A) HAS DELETED THE ADDITION, THEREFORE, OUR INTERFERENCE IS NOT REQUIRED. THUS, THE GROUND TAKEN BY THE REVENUE IS DISMISSED. 7. THE SHORT FACTS RELATED TO GROUND NO. 2 ARE THAT THE ADDITION OF RS.4,25,008/- IS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INVESTMENT IN AGRICULTURAL LAND FROM UNDISCLOSED SOURCES AS DISCUSSED IN PARA 8 OF THE ASSESSMENT ORDER. T HE ASSESSING OFFICER MADE ADDITION, AS ACCORDING TO HER, THE INVESTMENT FOR AGRICULTURAL LAND IS MADE BY THE ASSESSEE ON 17-05-2005 WHEN THE PURCHASE DEED WAS EXECUTED, WHEREAS THE ASSESSEE RECEIVED GIFT OF RS.3,00,000/- ON 18-05-2005 FROM HER MOTHER SMT. ANJUM GHANIWALA. DURING THE YEAR THE ASSESSEE HAS MADE PAYMENT OF RS.4,90,838/- FOR PURCHASE OF AGRICULTURAL LAND (RS.6,90,838/- - RS. 2,00,000;- PAID IN ASSESSMENT YEAR 2005-06 GIVEN IN THE EARLIER YEAR AS ADVANCE). OUT OF RS.4,90,838, THE ASSESSING OFFICER GAVE CREDIT FOR RS.65,830, AS DISCUSSED IN PARA 8.3 OF THE ASSESSMENT ORDER AND THE BALANCE AMOUNT OF RS.4,25,008 IS TREATED AS AN UNDISCLOSED INVESTMENT. 8. THE ASSESSEE CARRIED THE MATTER TO CIT(A) WHO HAS DELETED THE ADDITION BY OBSERVING AS UNDER: 4.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND ALSO GONE THROUGH THE FINDINGS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. ON THIS ISSUE, IN SUPPORT OF HER CONTENTION, THE AUTHORISED REPRESENTATIVE OF THE APPELLANT HAS ALSO SUBMITTED CERTIFIED BANK ACCOUNTS, DECLARATION OF GIFTS RECEIVED FROM ASHIYA GHANIWALA AS WELL AS CAPITAL A/C OF THE DONOR AND PHOTOCOPY OF THE SALE DEED REGISTERED ON 18-05-2005 AND NOT ON 17-05-2005 AS OBSERVED BY THE ASSESSING OFFICER. THE ENTIRE INVESTMENT IS BROUGHT ON THE RECORD BY THE ASSESSEE AS CAN BE SEEN FROM THE FINANCIAL STATEMENTS IN THE FORM OF CAPITAL A/C AND BALANCE SHEET SUBMITTED ALONG WITH THE RETURN OF INCOME. IT IS ALSO CONCLUSIVELY PROVED THAT THE TRANSACTION TOOK PLACE ON 18-05-2005, I.E., THE 4 I.T.A. NO. 09/NAG/2010 5 DATE OF REGISTRATION OF DOCUMENT AND NOT ON 17-05-2005. THERE IS ADEQUATE AVAILABILITY OF FUNDS ON 18-05-2005 AS ON THAT DATE ASSESSEE RECEIVED GIFT FROM HER MOTHER SMT. ANJUMBAI GHANIWALA. THE AVAILABILITY OF FUNDS IN THE HANDS OF SMT. ANJUMBAI IS PROVED FROM HER BANK A/C IN A.D.C.C BANK, FROM WHERE THE AMOUNT IS WITHDRAWN FOR GIVING GIFT OF RS. 3,00,000/- ON 18-05-05 AND ANOTHER GIFT BY A CHEQUE OF RS.5,00,000/-, DATED 21- 11-2005. MOREOVER, A LETTER FROM THE VENDOR OF THE AGRICULTURAL LAND NAMELY SHARACI NANA JAIN IS ALSO BROUGHT ON RECORD, WHO HAS CATEGORICALLY CONFIRMED IN WRITING THAT HE RECEIVED THE FINAL AMOUNT OF CONSIDERATION ON 18-05-2005. THE COPY OF CAPITAL A/C AND BALANCE SHEET IS ALSO SUBMITTED BEFORE ME DURING THE APPELLATE PROCEEDINGS. THE SAID CAPITAL A/C AND BALANCE SHEET IS BASED ON DAY TO DAY BOOKS OF ACCOUNTS WHICH ARE PREPARED ON THE BASIS OF BANK STATEMENTS AND VARIOUS OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH. THE BOOKS OF ACCOUNTS WHICH ARE PREPARED BY THE ASSESSEE AFTER TAKING IN ACCOUNT THE BANK STATEMENTS AS WELL AS ALL OTHER DATA INCLUDING RECEIPTS AND EXPENDITURE FOUND AND IMPOUNDED BY THE DEPARTMENT. THESE BOOKS OF ACCOUNTS ARE RETAINED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS NOT PIN POINTED ANY SPECIFIC DISCREPANCY OR FLAW IN ANY TRANSACTION. IN VIEW OF THIS THERE IS NO JUSTIFICATION FOR MAKING ADDITION OF RS.4,25,008/-, IGNORING THE INCOME RETURNED AT RS.98,600/- BESIDES AGRICULTURAL INCOME OF RS.1,05,280/-. 4.4 IN THIS CASE OUT OF THE GIFT OF RS.3,00,000/-, RECEIVED BY THE APPELLANT IN ASSESSMENT YEAR 2005-06, THE APPELLANT HAS GIVEN ADVANCE OF RS. 2,00,000/- TO THE VENDOR FOR PURCHASE OF LAND AND THE BALANCE OF RS.1,00,000/- HAS REMAINED WITH HER. DURING THE YEAR THE APPELLANT HAS RECEIVED AN AMOUNT OF RS.3,00,000/- FROM HER MOTHER ON 18-05-2005. THE ABOVE AMOUNTS ALONG WITH THE INCOME AND AGRICULTURE INCOME AS ACCEPTED BY THE ASSESSING OFFICER AND THE SAVINGS FROM THE EARLIER YEARS ARE SUFFICIENT TO EXPLAIN THE PAYMENTS MADE TO THE VENDOR OF THE LAND. THE AO'S FINDINGS REGARDING THE EXECUTION OF LAND AS ON 17/05/2005 IS FOUND TO BE NOT CORRECT. AS PER THE CERTIFIED COPY OF THIS EXECUTION DEED, IT IS SEEN THAT THIS DEED IS EXECUTED ON 18/05/2005 AND THE AMOUNT OF RS.3,10,000/- HAS ALSO BEEN PAID ON 18/05/2005. HENCE, THE FINDINGS OF THE ASSESSING OFFICER ON THIS POINT IS FOUND TO BE WRONG. I HAVE CONSIDERED THE SUBMISSIONS AND ALSO GONE THROUGH THE FINANCIAL STATEMENTS AND BANK STATEMENTS, THE CERTIFIED COPY OF WHICH IS FILED ON RECORD, THUS, CONSIDERING THE EVIDENCE AND OTHER DOCUMENTS, THE ADDITION OF RS.4,25,008/- IS HEREBY DIRECTED TO BE DELETED AS THERE IS NO JUSTIFICATION FOR MAKING THIS ADDITION. 5 I.T.A. NO. 09/NAG/2010 6 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED D. R. RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHILE THE LEARNED A. R. RELIED UPON THE ORDER OF CIT(A). WE FIND THAT ASSESSEE HAS SUBMITTED ALL THE DOCUMENTS, CERTIFIED BANK ACCOUNTS, DECLARATION OF GIFT RECEIVED FROM HER SISTER SMT. ASHIYA FAROOQ GHANIWALA AS WELL AS CAPITAL ACCOUNT OF DONORS AND PHOTOCOPY OF SALE DEED REGISTERED ON 18/05/2005. THE ENTIRE INVESTMENT IS BROUGHT ON RECORD BY THE ASSESSEE. THE CIT(A) HAS VERIFIED ALL THESE AND HAS DELETED THE ADDITION. IN RESPECT OF GIFT OF RS.3,00,000/-, THE CIT(A) HAS HELD THAT THE ASSESSEE HAS PRODUCED ALL THE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM, THEREFORE, THE CIT(A) HAS DELETED THE ADDITION. WE ALSO FIND THAT THE ASSESSEE HAS PRODUCED ALL THE DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM AND CIT(A) HAS RIGHTLY DELETED THE ADDITION, THEREFORE, OUR INTERFERENCE IS NOT REQUIRED. THIS GROUND OF APPEAL OF REVENUE IS ALSO DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/12/2012) SD/. SD/. ( P. K. BANSAL ) ( D. T. GARASIA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:07/12/2012 *CL SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR 6