Binay Krishna Das, Bhubaneswar V. DCIT, Circle-2(1), Bhubaneswar

ITA 90/CTK/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3704 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 14-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P C SETHI
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

1 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 90 /CTK/2016 ASSESSMENT YEAR :2011 - 12 BINAY KRISHNA DAS, BIVAB HOUSE, BIVAB ESTATE, BARAMUNDA, BHUBANESWAR VS. DCIT, CIRCLE 2(1), BHUBANESWAR. PAN/GIR NO. ACPPB 5414 J (APPELLANT ) .. ( RESPONDENT ) ASSESS EE BY : SHRI P.C . SETHI, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 12 /07 / 2017 DATE OF PRONOUNCEMENT : 26 /07 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR , DATED 9.12.2015 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER MAKING ADDITION OF RS.30 LAKHS AS UNEXPLAINED CASH CREDIT TO THE INCOME OF THE ASSESSEE. 3. BRIEF FACTS OF THE CASE, AS OBSERVED FROM THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A) ARE THAT THE ASSESSING OFFICER FOUND FROM THE 2 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 PERUSAL OF DIFFERENT BANK ACCOUNTS OF THE ASS ESSEE THAT THERE WERE CASH DEPOSITS OF RS.30,00,000/ - ON DIFFERENT DATES FROM 11 PERSONS AS UNDER: SI NO. DATE OF RECEIPT RECEIVED IN CASH (RS.) RECEIVED FROM BANK 1 23.06.2010 150000 AJIT PATNAIK STANDARD CHARTERED ACCOUNT NO. 76815 09.02.2011 150000 - DO - STANDARD CHARTERED ACCOUNT NO. 76815 2 23.06.2010 200000 SACHIDANANDA SINGH STANDARD CHARTERED ACCOUNT NO. 76815 03.07.2010 125000 - DO - SBI.A/C NO. 57558 3 23.06.2010 200000 CH. BIKRAM KESHARI PRAHARAJ STANDARD CHARTERED ACCOUNT NO. 76815 23.02.2011 100000 - DO - STANDARD CHARTERED ACCOUNT NO. 76815 4 14.09.2010 200000 KAMALA KANTA CHOUDHURY STANDARD CHARTERED ACCOUNT NO. 76815 28.12.2010 80000 - DO - SBI,A/C NO. 57558 5 14.09.2010 150000 RATNAKAR JENA STANDARD CHARTERED ACCOUNT NO. 76815 28.12.2010 70000 - DO - SBI,A/C NO. 57558 6 14.09.2010 150000 SUVENDU KUMAR PATI STANDARD CHARTERED ACCOUNT NO. 76815 23.11.2010 150000 - DO - SBI,A/C NO. 57558 7 03.07.2010 175000 UMA DEVI AGARWAL SBI,A/C NO. 57558 28.12.2010 125000 - DO - SBI,A/C NO. 57558 8 05.08.2010 150000 ABSAR BEURIA SBI,A/C NO. 57558 09.02.2011 200000 - DO - STANDARD CHARTERED ACCOUNT NO. 76815 I9 28.12.2010 175000 RAMA KANTA MISHRA SBI,A/C NO. 57558 10 23.11.2010 150000 PRAFULLA KUMAR CHOUDHURY SBI,A/C NO. 57558 23.02.2011 50000 - DO - STANDARD CHARTERED ACCOUNT NO. 76815 11 23.02.2011 150000 RATAN KUMAR MISHRA STANDARD CHARTERED ACCOUNT NO. 76815 09.03.2011 100000 - DO - SBI, A/C NO. 57558 TOTAL 3000000 ______________ 3 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 4. IN REPLY TO SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER TO EXPLAIN THE SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNTS, THE ASSESSEE SUBMITTED THAT THE AMOUNTS WERE RECEIVED FROM 11 PERSONS FOR PROCESSING OF REGISTRATION OF FLATS. THE ASSESSING OFFICER ISSUED SUMMONS T O THOSE PERSONS AND NO REPLY WAS RECEIVED BY HIM. THE ASSESSING OFFICER FURTHER OBSERVED THAT REGISTRATION WORK WAS COMPLETED AFTER ONE YEAR AND IN SOME CASES AFTER MORE THAN 2 YEARS. THE NON - COMPLIANCE OF SUMMONS BY THE PROSPECTIVE BUYERS AND SUCH DELAY IN PROCESS OF REGISTRATION WAS COMMUNICATED TO THE ASSESSEE THROUGH SHOW CAUSE NOTICE DATED 25.3.2014, IN REPLY TO WHICH, THE ASSESSEE SUBMITTED THAT THE DELAY IN REGISTRATION WAS PRIMARILY CAUSED DUE TO LOCAL AREA PROBLEMS, LAND ACQUISITION PROBLEMS, DELAY IN CONSTRUCTION AND ALSO STRIKES BY LAWYERS AND CLOSURE OF SUB - REGISTRAR OFF ICE, WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE ABOVE SUBMISSIONS OF THE ASSESSEE AND MADE AN ADDITION OF RS.30,00,000/ - TO THE INCOME OF THE ASSESSEE. 5. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBM ITTED THAT THE ASSESSING OFFICER FAILED TO APPRECIATE THE EVIDENCES FURNISHED TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE PERSONS AND GENUINENESS OF THE TRANSACTION AND MADE ADDITION ON THE GROUND OF TIMING OF ADVANCES RATHER THAN GENUINENESS OF THE TRANSACTION. IT WAS EXPLAINED THAT THE DELAY IN REGISTRATION OF THE FLATS WAS DUE TO UNFORESEEN CIRCUMSTANCES EXPLAINED TO THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS THAT THE 4 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 ADVANCE RECEIVED F ROM 11 PERSONS AMOUNTING TO RS.3 0 LAKHS TOWA RDS REGISTRATION COST OF THEIR FLATS HAD CREDITWORTHINESS AS THEY HAVE AVAILED LOANS FROM VARIOUS BANKS FOR PURCHASE OF THE FLATS. THE IDENTITY OF THE PERSONS AND GENUINENESS OF TRANSACTION WERE ALSO ESTABLISHED BY EVIDENCE OF AFFIDAVIT SUBMITTED BY THEM TO THE ASSESSING OFFICER. SOME PERSONS APPEARED BEFORE THE ASSESSING OFFICER AND SOME HAD TELEPHONICALLY CONFIRMED THE TRANSACTION. IT WAS SUBMITTED THAT THE ASSESSEE ESTABLISHED THREE INGREDIENTS OF SECTION 68 OF THE ACT AND, THEREFORE, NO ADDITION UN DER THE DEEMING PROVISIONS WAS SUSTAINABLE, FOR WHICH, HE PLACED RELIANCE ON THE FOLLOWING CASES: I) ITO VS NC CABLES LTD., (2014) TAXPUB (IDT) 4204; II) CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD., 342 ITR 169; III) CIT VS. LOVELY EXPORTS, 319 ITR 5(SC) IV) CIT VS. VENKATESWARA RAO AND OTHERS, 370 ITR 212 6. THE CIT(A) AFTER CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE IS THE MANAGING DIRECTOR OF M/S. BIVAB DEVELOPERS (P) LTD. THE ASSESSEE EXPLAINED THE SOURCE OF CASH DEPOSIT OF RS.30,00,000/ - AS ADVANCE RECEIVED FROM ELEVEN PROSPECTIVE PURCHASERS OF FLATS FROM THE COMPANY. THE ASSESSEE FURNISHED DOCUMENTS INCLUDING AFFIDAVIT OF THE CONCERNED PERSONS TO ES TABLISH THE CLAIM. THE ASSESSING OFFICER VERIFIED THE SAME AND FOUND THAT THERE WAS NO NEXUS OF SUCH ADVANCE RECEIVED FROM THE PURCHASERS WITH DATE OF REGISTRATION. IN ORDER 5 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 TO ASCERTAIN THE CORRECTNESS OF TRANSACTIONS, THE ASSESSING OFFICER ISSUED SUMMO NS TO 11 PERSONS AND RECEIVED REPLY FROM TWO PERSONS NAMELY SHRI VIKRAM KESHARI PRAHARAJ AND SHRI KAMALAKANTA CHOUDHURY. THE CREDITWORTHINESS OF THE PURCHASESWAS NOT DEMONSTRATED WITH NECESSARY EVIDENCE LIKE SOURCE OF INCOME, LOAN SANCTION LETTERS IF ANY, BANK STATEMENTS, REMITTANCE OF CASH TO THE ACCOUNT OF THE ASSESSEE. THEREFORE, HE HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION. 7. BEFORE ME, LD A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 8. LD D.R. ON THE OTHER HAND, SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE UNDISPUTED FACTS ARE THAT THE ASSESSING OFFICER FOUND THAT TH E ASSESSEE HAS MADE CASH DEPOSITS OF RS.30,00,000/ - IN HIS VARIOUS BANK ACCOUNTS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE EXPLAINED THE SOURCE OF DEPOSIT OF RS.30 LAKHS RECEIVED FROM 11 PERSONS AS THE COST TOWARDS PROCESSING AND REGISTRATION CHA RGES OF FLATS PURCHASED FROM THE COMPANY, OF M/S. BIVAB DEVELOPERS (P) LTD., OF WHICH, THE ASSESSEE IS THE MANAGING DIRECTOR. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLAIN OF THE ASSESSEE AS HE FOUND THAT THE REGISTRATION OF THE FLAT WAS DONE ONE YEAR AFTER THE RECEIPT OF THE AMOUNT AND IN SOME CASES AFTER TWO YEARS OF RECEIPT OF THE 6 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 AMOUNT. IN ORDER TO VERIFY THE CASH DEPOSITS, THE ASSESSING OFFICER ISSUED SUMMONS TO ALL ELEVEN PERSONS FROM WHOM THE ASSESSEE HAD RECEIVED CASH AND DEPOSITED IN HIS BANK AC COUNTS. OUT OF 11 PERSONS, TWO PERSONS NAMELY, SHRI VIKRAM KESHARI PRAHARAJ AND SHRI KAMALAKANTA CHOUDHURY APPEARED BEFORE THE ASSESSING OFFICER AND CONFIRMED HAVING GIVEN THE AMOUNT TO THE ASSESSEE. THE ASSESSEE THEREAFTER FILED AFFIDAVITS OF THE PERSONS TO EVIDENCE THAT THEY HAVE GIVEN THE AMOUNT TO THE ASSESSEE TOWARDS REGISTRATION OF FLATS PURCHASED BY THEM FROM THE COMPANY, M/S. BIVAB DEVELO PERS (P) LTD. , HENCE , THE ASSESSING OFFICER HELD THAT THERE WAS NO NEXUS BETWEEN THE DEPOSITS OF CASH IN THE BANK ACCOUNTS AND THE EXPLANATION OF THE ASSESSEE. 10. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 11. I FIND THAT IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED RS.30,00,000/ - FROM ELEVEN PERSONS ON ACCOUNT OF REGISTRATION FEE TO BE PAID BY THEM. THE ASSESSEE HAS FURNISHED THE NAMES AND ADDRESSES OF THE 11 PERSONS IS NOT IN DISPUTE. THE SAID 11 PERSONS HAVE PURCHASED FLATS FROM M/S. BIVAB DEVELOPERS PVT LTD., IS ALSO NOT IN DISPUTE. SUMMONS ISSUED TO THE SAID PERSONS WERE DULY SERVED. IN THE ABOVE CIRCUMSTANCES, THE IDENTITY OF 11 PERSONS ARE ESTABLISHED AND A S THEY HAVE PURCHASED FLATS, THEREFORE, THEIR CR EDITWORTHINESS TO MAKE PAYMENT OF THE REGISTRATION FEE ALSO CANNOT BE DOUBTED. TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS, THE ASSESSEE HAS FURNISHED EVIDENCES OF ALL THE 11 PERSONS BEFORE THE ASSESSING OFFICER. IT IS ALSO OBSERVED THAT 7 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 OUT OF 11 P ERSONS, TWO PERSONS NAMELY, SHRI VIKRAM KESHARI PRAHARAJ AND SHRI KAMALAKANTA CHOUDHURY ALSO APPEARED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER EXAMINING THE SAID TWO PERSONS COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE SAID TWO PERSONS HAVE NOT PAID THE AMOUNT TO THE ASSESSEE. IN THE ABOVE CIRCUMSTANCES, IN MY CONSIDERED OPINION, MERELY BECAUSE THERE WAS GAP BETWEEN THE DATE ON WHICH MONEY WAS PAID TO THE ASSESSEE AND THE DATE ON WHICH ACTUAL REGISTRATION WAS DONE, IT CANNOT BE CONCLUDED THAT THE AMOUNTS IN QUESTIONS WERE NOT PAID BY THE PROSPECTIVE PURCHASERS OF THE FLATS TO THE ASSESSEE FOR REGISTRATION EXPENSES. AS I FIND THAT THE INITIAL BURDEN WHICH WAS UPON THE ASSESSEE UNDER LAW WAS DULY DISCHARGED BY THE ASSESSEE AND AF TER THAT NO POSITIVE MATERIAL COULD BE BROUGHT ON RECORD BY THE REVENUE TO DISPROVE THE TRANSACTION, THE ADDITION SO MADE CANNOT BE SUSTAINED. I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.30,00,000/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 12 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED ON 26 /07 / 2017. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 26 /0 7 /2017 B.K.PARIDA, SPS 8 ITA NO.90/CTK/2016 ASSESSMENT YEAR :2011 - 12 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : BINAY KRISHNA DAS, BIVAB HOUSE, BIVAB ESTATE, BARAMUNDA, BHUBANESWAR 2. THE RESPONDENT: DCIT, CIRCLE 2(1), BHUBANESWAR. 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//