Akshay Verma, Chandigarh V. DCIT, Chandigarh

ITA 926/CHANDI/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8918 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-05-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ASHISH GUPTA CIT DR
• Keywords: Salary income; Bonafide belief; Deemed dividend
• Section: 2(22)(e); 250; 68; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRISANJAY GARG, JUDICIAL MEMBER ./ ITA NOS. 931 & 932/CHD/2014 / ASSESSMENT YEARS : 2009-10 & 2010-11 SHRI ANIL VERMA, H NO. 1383, SECTOR 33-C, CHANDIGARH VS. THE DCIT, CENTRAL CIRCLE-II, CHANDIGARH ! ' ./ PAN NO: ABGPV 4017P !#/ APPELLANT %& !# / RESPONDENT ./ ITA NOS. 924 TO 926/CHD/2014 / ASSESSMENT YEARS : 2009-10, 2010-11 & 2011-12 SHRI AKSHAY VERMA, H NO. 1383, SECTOR 33-C, CHANDIGARH VS. THE DCIT, CENTRAL CIRCLE-II, CHANDIGARH ! ' ./ PAN NO: ACGPV 2609E !#/ APPELLANT %& !# / RESPONDENT ./ ITA NOS. 937 TO 939/CHD/2014 / ASSESSMENT YEARS : 2009-10, 2010-11 & 2011-12 SHRI RANI VERMA, H NO. 1383, SECTOR 33-C, CHANDIGARH VS. THE DCIT, CENTRAL CIRCLE-II, CHANDIGARH ! ' ./ PAN NO: AAIPV6878M !#/ APPELLANT %& !# / RESPONDENT ()*+ /ASSESSEE BY : SH. SUDHIR SEHGAL, ADVOCATE *+ / REVENUE BY : DR. ASHISH GUPTA, CIT DR , -*) .' /DATE OF HEARING : 13.05.2019 /0 *) .' / DATE OF PRONOUNCEMENT : 10.07.2019 ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 2 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THESE BUNCH OF APPEALS ARISE FROM THE COMMON ORDER DATED 28.8.2014 OF LD. COMMISSIONER OF INCOME TAX (CENTRA L), GURGAON [HEREINAFTER REFERRED TO AS CIT(A)] FOR DIFFEREN T ASSESSMENT YEARS PASSED SEPARATELY IN CASES OF EACH OF THE ASSESSEE BEFORE US. 2. THE COMMON ISSUE INVOLVED IN ALL THE APPEALS IS RELATING TO THE VALIDITY OF THE ADDITION MADE BY THE ASSESSING OFFI CER AND FURTHER CONFIRMED BY THE CIT(A) U/S 2(22)(E) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') TREATING THE AMOUNT RECEIVED BY T HE INDIVIDUAL ASSESSEES FROM THE COMPANY NAMELY M/S VTC TRANSPORT PVT. LT D. (IN SHORT VTC LIMITED) AS DEEMED DIVIDEND. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE APPELLANT-ASSESSEES ARE SUBSTANTIAL SHAREHOLDERS IN VTC LIMITED. A SEAR CH AND SEIZURE OPERATION WAS CONDUCTED ON 30.6.2010 IN THE VTC GRO UP OF CASES. THE ASSESSEES / APPELLANTS NAMED ABOVE WERE ALSO COVERE D IN THE SEARCH ACTION. PURSUANT TO THE SEARCH ACTION, THE ASSESSEE S WERE CALLED UPON TO FILE THE RETURNS OF INCOME FOR PRECEDING SIX ASSESS MENT YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. AC CORDINGLY, THE ASSESSMENT U/S 153 A OF THE ACT WAS MADE BY THE ASS ESSING OFFICER FOR ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 3 ASSESSMENT YEARS 2005-06 TO 2010-11. DURING THE ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEES / APPELLANTS HAD TAKEN HEFTY LOANS AND ADVANCES FROM M/S VTC TRANSPORT PVT. LTD. THAT THE ASSESSEES HAD SUBSTANTIAL SHARE HOLDING IN VTC LIMITED. HE FURTHER OBSERVED THAT THE SAID COMPANY VTC LIMITED HAD HUGE ACCUMULATED PROFITS IN THE FORM OF RESERVES AN D SURPLUSES. WHEN CALLED UPON TO EXPLAIN AS TO WHY THE AFORESAID LOAN S AND ADVANCES BE NOT TREATED AS DEEMED DIVIDEND IN THE HANDS OF THE RESP ECTIVE ASSESSEE U/S 2(22)(E) OF THE INCOME TAX ACT, 1961, THE ASSESSEES EXPLAINED THAT THE COMPANY VTC LIMITED HAD HIRED THEIR LAND AND PREMI SES, FOR ITS BUSINESS ACTIVITY. THE COMPANY APART FROM PAYING THE ANNUAL RENT AS PER THE REND DEED HAD ALSO AGREED TO MAKE INTEREST FREE SECURITY DEPOSITS OF RS. 5 CRORES TO BE PAID FROM 1.4.2004 TO 31.3. 2007, WHICH WAS FURTHER REVISED TO RS. 10 CORES AFTER 31.3.2007. IT WAS ALSO AGREED THAT THE INTEREST FREE DEPOSITS WOULD BE MADE OVER A PER IOD OF TIME ACCORDING TO THE AVAILABILITY OF FUNDS WITH THE COMPANY, HENC E, IT WAS NOT THAT RS. 5 CORES WOULD BE GIVEN IMMEDIATELY. THAT NO SPECIFI C PERIOD HAD BEEN CLARIFIED IN THE AGREEMENT WITH REGARD TO THE DEPOS ITS TO BE GIVEN BY THE COMPANY TO THE LAND OWNERS. SINCE THE SUFFICIENT FU NDS WERE NOT AVAILABLE WITH THE COMPANY, THE FULL SECURITY DEPOS ITS COULD NOT BE GIVEN BY THE COMPANY TO THE CO-OWNERS / ASSESSEES. HOWEV ER, THE AMOUNT OF SECURITY DEPOSITS DID NOT EVER INCREASE THE AMOUNT STIPULATED / AGREED AS PER THE LEASE AGREEMENT. IT WAS ALSO PLEADED THAT E VEN THE INDIVIDUAL ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 4 ASSESSEES HAD SHOWN THE RENTAL INCOME RECEIVED FROM THE COMPANY IN THEIR RETURNS OF INCOME WHICH WAS DULY ACCEPTED BY THE ASSESSING OFFICER, HENCE, THE TERMS OF THE LEASE AGREEMENT CO ULD NOT BE DISPUTED AT THIS STAGE BY THE ASSESSING OFFICER. HOWEVER, THE A SSESSING OFFICER DID NOT AGREE WITH THE ABOVE CONTENTIONS OF THE ASSESSE ES AND TREATED THE AFORESAID ALLEGED SECURITY DEPOSITS AS LOAN AND ADV ANCES MADE BY THE COMPANY TO THE ASSESSEES OUT OF ITS RESERVES AND SU RPLUSES AND MADE THE ADDITION OF THE SAME INTO THE INCOME OF THE ASSESSE ES AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. 4. THE LD. CIT(A) ALSO DID NOT ACCEPT THE CONTENTIO N OF THE ASSESSEES REGARDING THE AMOUNT RECEIVED AS SECURITY DEPOSITS IN RESPECT OF LAND LEASED OUT TO THE COMPANY. HE, HOWEVER, AGREED WITH THE ALTERATIVE CONTENTION OF THE ASSESSEES THAT THE TOTAL ADDITION BE RESTRICTED TO THE TOTAL ACCUMULATED PROFITS OF THAT RELEVANT YEAR O R THE AMOUNT ADVANCED, WHICHEVER IS LOWER, AFTER NETTING OF THE AMOUNT AL READY ADDED AS DEEMED DIVIDEND IN THE IMMEDIATELY PRECEDING ASSESS MENT YEAR. THE LD. CIT(A) SUBJECT TO THE ABOVE RESTRICTION CONFIRM ED THE ACTION OF THE ASSESSING OFFICER IN TREATING THE AMOUNTS RECEIVED BY THE ASSESSEES DURING DIFFERENT ASSESSMENT YEARS FROM VTC LIMITED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 5 5. BEING AGGRIEVED BY THE ABOVE ADDITIONS MADE BY T HE CIT(A), THE ASSESSEES PREFERRED APPEALS FOR DIFFERENT ASSESSMEN T YEARS BEFORE THIS TRIBUNAL. THE ADDITIONS RELATING TO THE ASSESSMENT YEAR 2005-06 TO 2008-09 STOOD DELETED BY A SEPARATE COMMON ORDER OF THIS TRIBUNAL DATED 28.11.2016 PASSED IN ITA NOS. 927 TO 930/CH D/2014 AND OTHERS ON THE LEGAL GROUND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH ACTION AND THAT THE ORIGINAL ASSESSMENTS ALR EADY STOOD COMPLETED ON THE DATE OF SEARCH, BY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MALA BUIL DERS PVT. LTD VS ACIT IN ITA NOS. 433 TO 437/CHD/2014 & OTHERS. 6. NOW, THE CAPTIONED APPEALS ARE RELATING TO REMA INING ASSESSMENT YEARS 2009-10 TO 2011-12, CHALLENGING THE AFORESAID CONFIRMATION OF ADDITIONS ON MERITS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE MATERIAL AVAILABLE ON RECORD . THE LD. COUNSEL FOR THE ASSESSEES HAS REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT THE LOWER AUTHORITIES HAVE WRONGLY TREATED THE AMOUNT OF SECURITY DEPOSITS RECEIVED BY THE ASSESSE ES AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEES. HE HAS FUR THER SUBMITTED THAT THE ASSESSEES ARE CO-OWNERS OF 11 ACRES OF LAND, SITUAT ED NEAR RAILWAY STATION, CHANDIGARH WHICH HAS WORTH VALUE OF ABOUT RS. 100 CORES. THAT ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 6 VTC LIMITED IS ENGAGED IN HIRING OF TRUCKS FOR TR ANSPORTATION, HANDLING AND CONSIGNMENT AGENTS, AND HAS BEEN CARR YING ITS BUSINESS ACTIVITY FROM THE AFORESAID LAND / PREMISES IN QUE STION WHICH HAS BEEN USED FOR PARKING OF TRUCKS AND CRANES, WAREHOUSING OF IRON AND STEEL MATERIAL OF COMPANYS CLIENTS AND THAT THE BUSINES S HAS BEEN CARRIED OUT BY THE COMPANY FROM ITS PREMISES FOR A LONG TIME. T HAT AS PER THE LEASE AGREEMENT EXECUTED ON 1.4.2004 AND FURTHER NOTARIZ ED WITH THE NOTARY PUBLIC ON 7.4.2004, THE COMPANY HAD AGREED TO PAY THE ANNUAL RENT OF RS. 12 LACS FOR INITIAL PERIOD OF 3 YEARS I.E. 1.4. 2004 TO 31.3.2007 AND IT WAS FURTHER AGREED THAT THE LEASE RENT WOULD BE EN HANCED WITH THE MUTUAL CONSENT OF BOTH THE PARTIES FROM TIME TO THA T. THAT AS PER THE CLAUSE 3 OF THE SAID AGREEMENT, IT WAS AGREED THAT THE COMPANY WOULD MAKE A TOTAL INTEREST FREE SECURITY DEPOSITS OF RS . 5 CRORES WHICH WOULD BE DEPOSITED OVER A PERIOD OF TIME ACCORDING TO THE AVAILABILITY OF THE FUNDS AND THAT ON AN INCREASE OF RENT AFTER 1.4.200 7, THE SECURITY DEPOSIT OF RS. 10 CRORES WOULD BE MADE BY THE COMPANY OVER THE PERIOD OF TIME. 8. THE LD. COUNSEL FOR THE ASSESSEES HAS FURTHER CO NTENDED THAT THE ASSESSEES HAVE DECLARED FROM TIME TO TIME THE RENT AL INCOME RECEIVED FROM THE COMPANY IN THEIR RETURNS OF INCOME AND DUE TAXES PAID THERE UPON WHICH HAS BEEN DULY ACCEPTED BY THE ASSESSING OFFICER. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT THE AUTHENTICITY OF THE LEASE AGREEMENT CANNOT BE DOUBTED AS IT WAS DULY NOTARIZE D. HE, IN THIS ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 7 RESPECT HAS ALSO PLACED ON FILE A COPY OF THE CERTI FICATE ISSUED BY THE CONCERNED NOTARY SHRI PREM KRISHAN DASS, WHEREI N, HE HAS CONFIRMED THAT THE LEASE AGREEMENT IN QUESTION WAS NOTARIZED BY HIM VIDE HIS REGISTER ENTRY S.NO.673 DATED 7.4.2004. T HE LD. COUNSEL FOR THE ASSESSEES, THEREFORE, HAS SUBMITTED THAT THE AM OUNTS RECEIVED BY THE ASSESSEES DURING DIFFERENT ASSESSMENT YEARS WERE NO T LOAN AND ADVANCES, RATHER, THE SAME WERE OUT OF THE BUSINESS TRANSACT IONS OF THE ASSESSEES WITH THE COMPANY. THAT ACCEPTING OF THE INTEREST F REE SECURITY DEPOSITS IS A COMMON PRACTICE IN CASE OF LEASING / HIRING OF LAND PREMISES. THE LD. COUNSEL IN THIS RESPECT HAS ALSO RELIED UPON TH E CBDT CIRCULAR NO. 19 OF 2017 DATED 12.6.2017, WHEREIN, THE CBDT HAS O BSERVED THAT THE TRADE ADVANCES WHICH ARE IN THE NATURE OF COMMERCIA L TRANSACTIONS WOULD NOT FALL WITHIN THE AMBIT OF THE WORD ADVANC E IN SECTION 2(22)(E) OF THE ACT. IT HAS BEEN DIRECTED IN THE SAID CIRCUL AR THAT APPEALS MAY NOT BE FILED ON THIS GROUND BY OFFICERS OF THE DEPARTME NT AND THOSE ARE ALREADY FILED IN COURTS / TRIBUNALS, MAY BE WITHDR AWN / NOT PRESSED. APART FROM THAT, THE LD. COUNSEL IN THIS RESPECT HA S RELIED UPON THE FOLLOWING DECISIONS:- 1. MUKUNDRAY K SHAH VS CIT 277 ITR 128 CAL-HC 2. CIT VS AMBASSADOR TRAVELS(P) LTD. 318 ITR 376 DEL-H C 3. CIT VS RAJ KUMAR 318 ITR 462 DEL-HC 4. CIT VS PARLE PLASTICS LTD 332 ITR 63 HC OF BOMBAY A T GOA 5. DCIT VS LAKRA BROTHERS 106 TTJ 250 CHD-ITAT ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 8 6. SHITAL KUMAR VIJ VS ACIT ITA NO. 405/CHD/2009, ITAT AMRITSAR BENCH, AMRITSAR. 7. DCIT VS CHARIOT INTERNATIONAL (P) LTD 29 ITR ( TRIB) 36 BANG-ITAT 8. CIT VS FRANCIS WACZIARG 353 ITR 187 DELHI-HIGH COURT 9. CIT VS MADURAI CHETTIYAR KARTHIKEYAN 223 TAXMAN 350 MAD-HIGH COURT 10. BAGMANE CONSTRUCTIONS (P) LTD VS CIT 277 CTR 338 KAR- HIGH COURT 11. JINENDRA KUMAR JAIN VS ACIT ITA NO. 4126/DEL/2014 DELHI-TRIB 12. ASHWANI KAPOOR VS ITO ITA NO. 808/DEL/2013 DEL-TRIB 13. CIT VS ATUL ENGINEERING UDYOG 125 DTR 219 ALL-HC 9. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T THE ALLEGED LEASE AGREEMENT SEEMS TO BE AN AFTERTHOUGHT DEVICE OF THE ASSESSEES. THAT THE SAID LEASE AGREEMENT WAS NOT FOUND DURING THE SEARCH ACTION EITHER AT THE PREEMIES OF THE ASSESSEE OR AT THE PR EMISES OF THE VTC LIMITED. THE DISTRIBUTION EVEN OF THE ALLEGED SECU RITY DEPOSITS WAS NOT IN ACCORDANCE WITH THE SHAREHOLDINGS OF THE ASSESSE ES IN THE LAND IN QUESTION. THAT EVEN THERE WAS NO ENTRY IN THE BALAN CE SHEET OF THE VTC LIMITED REGARDING THE ALLEGED SECURITY DEPOSITS PA YABLE TO ASSESSEES. THAT THE ALLEGED LEASE DEED SEEMED TO BE BOGUS BEC AUSE THE STAMP PAPER UPON WHICH THE ALLEGED LEASE DEED HAS BEEN EXECUTED IS ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 9 SEEMED TO HAVE BEEN PURCHASED FROM SOMEWHERE IN HI MACHAL PRADESH, WHEREAS, THERE WAS NO CONNECTION OF THE COMPANY IN THE HIMACHAL PRADESH. THAT THE IDENTITY OF THE STAMP VENDOR WAS NOT VERIFIABLE. THAT EVEN THE ALLEGED LEASE DEED BEING OF A PERIOD OF 10 YEARS WITH PAYMENT OF YEARLY RENT WAS REQUIRED TO BE REGISTERED AS PER THE PROVISIONS OF SECITON17 (1)(D) OF THE INDIAN REGISTRATION ACT, 19 08. HE, THEREFORE, HAS CONTENDED THAT THE ASSESSING OFFICER HAS RIGHTL Y MADE THE IMPUGNED ADDITIONS INTO THE INCOME OF THE ASSESSEES AS DEEME D DIVIDEND U/S 2(22)(E) OF THE INCOME TAX ACT, 1961. 10. IN REBUTTAL, THE LD. COUNSEL FOR THE ASSESSEES HAS SUBMITTED THAT MERELY BECAUSE THE AMOUNT PAYABLE AS SECURITY DEPOS IT WAS NOT SHOWN IN THE BALANCE SHEET OF THE COMPANY THAT ITSELF IS NOT DECISIVE OR CONCLUSIVE OF THE FACT THAT THERE WAS NO COMMERCIAL TRANSACTIO N. THAT AS PER THE SETTLED LAW, IT IS THE REAL INCOME WHICH IS REQUIRE D TO BE TAXED. THAT THE ENTRIES IN THE BALANCE SHEET MAY NOT BE DECISIVE OR CONCLUSIVE IN THIS RESPECT. THAT IT IS OPEN TO THE INCOME TAX OFFICER AS WELL AS TO THE ASSESSEES TO POINT OUT TRUE AND PROPER INCOME WHIL E SUBMITTING THE RETURN OF INCOME. THE LD. COUNSEL FOR THE ASSESSEES IN THIS RESPECT HAS RELIED UPON THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF UNITED COMMERCIAL BANK VS CIT [1999] 240 ITR 0355 AND OF THE ITAT DELHI BENCH OF THE TRIBUNAL IN THE MINDA CORPORATION LTD VS DCIT 42 ITR (DELHI-TRIB) 615. HE HAS FURTHER SUBMITTED THAT THE TRUCKS ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 10 OF THE ASSESSEES GO ON A REGULAR BASIS TO HIMACHAL PRADESH AND THAT STAMP PAPERS IN QUESTION WAS PURCHASED FROM HIMACHA L PRADESH FOR SOME OTHER PURPOSE. SINCE THE VALIDITY OF THE SAID STAMP PAPER HAD NOT EXPIRED, HENCE, THE SAME WAS USED FOR EXECUTION OF THE LEASE DEED IN QUESTION. THAT SAID AGREEMENT IN QUESTION HAS BEEN DULY NOTARIZED AND THE SAME HAS BEEN ACTED UPON BY THE PARTIES. THE RE NT PAID BY THE COMPANY AS PER AGREEMENT HAS BEEN REFLECTED IN THE RETURNS OF INCOME OF THE ASSESSEES AND ASSESSED AS SUCH BY THE DEBARM ENT. THAT ON THE BASIS OF THE SAME AGREEMENT, THE DEPARTMENT HAS ACC EPTED THE RENTAL INCOME AND THERE WAS NO QUESTION TO DOUBT THE RECEI PT OF THE SECURITY DEPOSITS. HE, THEREFORE, HAS SUBMITTED THAT THE PAY MENT TO THE ASSESSEES BY THE COMPANIES WAS PURELY A BUSINESS TRANSACTION AND CANNOT BE ASSESSED AS DEEMED DIVIDEND INCOME IN THE HANDS OF THE ASSESSEES. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS HAVE A LSO GONE THROUGH THE RECORD. ADMITTEDLY, THE ASSESSEES BEFORE US ARE THE CO-OWNERS IN THE LAND / PREMISES WHICH HAS BEEN USED BY THE COMPANY VTC LIMITED LTD FOR ITS BUSINESS OF TRANSPORTATION AND ALLIED BUSIN ESS. THE ASSESSEES HAVE SUBSTANTIAL INTEREST IN THE COMPANY. THE COMPANY V TC LIMITED HAS SUFFICIENT RESERVES AND SURPLUSES DURING THE ASSESS MENT YEAR UNDER CONSIDERATION. THE ASSESSEES HAVE RECEIVED CONSIDER ABLE AMOUNT FROM THE SAID COMPANY. AS PER THE INCOME TAX AUTHORITIES , THE AMOUNT RECEIVED BY THE ASSESSEES WAS IN THE SHAPE OF LOANS AND ADVANCES, HENCE, ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 11 WOULD FALL WITHIN THE DEFINITION OF DEEMED DIVIDEND AS PER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, WHEREAS, THE PLEA OF THE ASSESSEE IS THAT THE AMOUNT RECEIVED WAS IN LIEU OF THE SECURITY DEPOSITS TO BE MAINTAINED BY THE LESSEES WITH THE LESSORS AS PER THE LEASE AGREEMENT DATED 1.4.2004. THE CONTENTION OF THE DEB ARMENT IS THAT THE ALLEGED LEASE AGREEMENT IS A COLOURFUL DEVICE WHICH HAS BEEN PREPARED AS AN AFTERTHOUGHT TO ESCAPE THE RIGOUR OF THE DEEMING PROVISIONS OF SECTION 2(22(E) OF THE INCOME TAX ACT. ON THE OTHER HAND, THE CONTENTION OF THE LD. COUNSE L FOR THE ASSESSEES IS THAT NOT ONLY THE SECURITY DEPOSITS, T HE ASSESSEES HAVE ALSO RECEIVED LEASE AMOUNT (RENT) FROM THE COMPANY WHICH HAS BEEN DULY SHOWN IN THEIR RETURNS OF INCOME AND HAS BEEN ACCEP TED BY THE DEPARTMENT. UNDER THE CIRCUMSTANCES, HAVING ADMITT ED THE RENTAL INCOME, THE DEPARTMENT IS NOT SUPPOSED TO DOUBT THE RECEIPT OF SECURITY DEPOSITS AS PER THE TERMS AND CONDITIONS OF THE AGR EEMENT IN QUESTION. 12. WE HAVE GONE THROUGH THE LEASE AGREEMENT IN QUE STION. AS PER THE LEASE AGREEMENT EXECUTED BETWEEN THE ASSESSEES AND VTC LIMITED, ABOUT 88 KANALS LAND CO-OWNED BY THE ASSESSEES HAS BEEN GIVEN ON LEASE TO VTC LIMITED. THOUGH, ASSESSEES ARE THE MAJOR SHAREHOLDERS IN THE SAID COMPANY, HOWEVER, AS PER THE PROVISIONS OF INC OME TAX ACT, THE SAID COMPANY IS A SEPARATE TAXABLE ENTITY. ADMITTED LY, THE LAND IN QUESTION HAS BEEN USED BY THE VTC LIMITED FOR ITS TRANSPORTATION AND ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 12 ALLIED BUSINESS. THE RENT AS PER THE TERMS OF THE A GREEMENT HAS BEEN DULY PAID BY VTC LIMITED TO THE ASSESSEES WHICH HAS BEEN SHOWN IN THEIR RETURNS OF INCOME AND DUE TAXES PAID THERE UPON. A S PER CLAUSE 3 OF THE AGREEMENT, THE COMPANY IS ALSO SUPPOSED TO MAINTAIN THE SECURITY DEPOSITS WITH THE ASSESSEES AS STIPULATED THEREIN, HOWEVER, THE CLAUSE RELATING TO THE SECURITY DEPOSIT IS A LITTLE BIT LI BERAL AS NO DATE AND TIME HAS NOT BEEN MENTIONED STRICTLY FOR MAKING THE AGR EED SECURITY DEPOSITS BY THE COMPANY WITH THE ASSESSEES, RATHER, THE SAME ARE TO BE MADE OVER A PERIOD OF TIME SUBJECT TO AVAILABILITY OF FUNDS W ITH THE COMPANY. THE LD. COUNSEL HAS EXPLAINED IN THIS RESPECT THAT SINC E THE ASSESSEES OTHERWISE ARE MAJOR SHAREHOLDERS IN THE COMPANY AND , HENCE, THEY ARE ALSO INTERESTED IN THE GROWTH OF THE COMPANY, HEN CE, THE CLAUSE RELATING TO THE SECURITY DEPOSITS FROM THE COMPANY WAS NOT S TRICTLY IMPLEMENTED SO AS TO MAKE AVAILABLE THE APPROPRIATE FUNDS TO TH E COMPANY FOR ITS BUSINESS PURPOSES. HOWEVER, THAT DOES NOT MEAN THAT THE ASSESSEES WOULD NOT BE ENTITLED TO TAKE ANY SECURITY DEPOSITS FROM THE COMPANY. THE LAND USED BY THE COMPANY IS A COMMERCIAL HIGH V ALUE LAND, HENCE, AS PER THE NORMAL BUSINESS PRACTICE, THE LESSORS C AN PRESS UPON THE LESSEE TO MAKE APPROPRIATE SECURITY DEPOSITS. THAT THIS WAS NOT UNUSUAL IN THE CASE OF ASSESSEES ALSO. THERE IS NO REBUTTAL TO THE ARGUMENT OF THE COUNSEL FOR THE ASSESSEES THAT THE SECURITY DEPOSIT S IN QUESTION NEVER CROSSED THE AMOUNT PAYABLE AS SECURITY DEPOSITS AS PER THE TERMS OF THE LEASE AGREEMENT. SO FAR AS THE CONTENTION OF THE LD . DR THAT THE STAMP ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 13 PAPER UPON WHICH THE LEASE AGREEMENT WAS EXECUTED WAS PURCHASED FROM HIMACHAL PRADESH, WHEREAS, THE ASSESSEES DO N OT HAVE ANY BUSINESS OFFICE IN HIMACHAL PRADESH IS CONCERNED, THE COUNSEL FOR THE ASSESSEES HAS EXPLAINED THAT IT WAS THE OLD STAMP PAPER USED WHICH WAS LYING WITH THE COMPANY, THE VALIDITY OF WHICH ON TH E DATE OF EXECUTION HAD NOT EXPIRED. THE LD. COUNSEL IN THIS RESPECT HA S RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F THIRUVENGADA PILLAI VS NAVANEETHAMMAL & ANR ORDER DATED 19.2.2008 IN WRIT PETITION (CIVIL ) 290 OF 2001, WHEREIN, IN PARA 11 OF THE JUDGEMENT, THE HON'BLE SUPREME COURT HAS OBSERVED THAT THE INDIAN STAMP ACT 1899 NOWHERE PRESCRIBES ANY EXPIRY DATE FOR USE OF THE S TAMP PAPER. HOWEVER, SECTION 54 OF THE SAID ACT PROVIDES THAT A PERSON C AN SEEK REFUND OF THE VALUE OF THE UNUSED STAMP PAPER BY SURRENDERING THE SAME TO THE COLLECTOR PROVIDED IT IS PURCHASED WITHIN THE PER IOD OF SIX MONTHS. THE HON'BLE SUPREME COURT, THEREFORE, HAS HELD THAT SECTION 54 OF THE INDIAN STAMP ACT DOES NOT REQUIRE ANY PERSON TO US E IT WITHIN SIX MONTHS AND THAT THERE IS NO IMPEDIMENT FOR A STAMP PAPER PURCHASED MORE THAN SIX MONTHS PRIOR BEING USED FOR EXECUTION OF A DOCUMENT / DEED. THE HON'BLE SUPREME COURT FURTHER IN PARA 1 3 OF THE SAID JUDGMENT HAS NOTICED THAT IN THE SAID CASE THE AGR EEMENT WAS DATED 5.1.1980 AND THE STAMP PAPERS USED WERE PURCHASED I N THE YEAR 1973 AND 1978. UNDER THE CIRCUMSTANCES, THE HON'BLE SUP REME COURT OBSERVED THAT THOUGH ONE OF THE POSSIBLE INFERENCES WAS THAT THE PLAINTIFF ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 14 NOT BEING ABLE TO SECURE AN ANTI-DATED STAMP PAPER FOR CREATING THE AGREEMENT, MADE USE OF SOME OLD STAMP PAPERS THAT W ERE AVAILABLE WITH HIM TO FABRICATE THE DOCUMENT. THIS MAY CERTAINLY B E A CIRCUMSTANCE THAT CAN BE USED AS A PIECE OF EVIDENCE TO CAST DOUBT ON THE AUTHENTICITY OF THE AGREEMENT, BUT, THAT CANNOT BE A CLINCHING EVI DENCE. THE HON'BLE SUPREME COURT FURTHER OBSERVED THAT THERE IS ALSO A POSSIBILITY THAT A LAY MAN UNFAMILIAR WITH LEGAL PROVISIONS RELATING T O STAMPS, MAY BONAFIDLY THINK THAT HE CAN USE THE OLD UNUSED S TAMP PAPER LYING WITH HIM FOR PREPARATION OF THE DOCUMENT AND ACCORDINGLY USES THE OLD STAMP PAPERS. IN THE LIGHT OF THE ABOVE OBSERVATION OF THE HON'B LE SUPREME COURT, WHEN WE EXAMINE THE LEASE AGREEMENT IN QUEST ION, WE FIND THAT STAMP PAPERS USED FOR THE ALLEGED LEASE AGREEMENT W ERE PURCHASED ON 15.10.2003 AND THE AGREEMENT WAS EXECUTED THEREUPON ON 1.4.2004. THAT SHOWS THAT THE STAMP PAPER IN QUESTION WAS USE D WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF ITS PURCHASE. THOUGH, T HE HON'BLE SUPREME COURT HAS CATEGORICALLY HELD THAT THERE WAS NO BAR U/S 54 OF THE INDIAN STAMP ACT, 1899 TO USE AN OLD STAMP PAPER MAY BE P URCHASED BEYOND THE PERIOD OF SIX MONTHS, HOWEVER, EVEN OTHERWISE ALSO, IF AS PER SECTION 54 OF THE INDIAN STAMP ACT, THE PERIOD OF SIX MONTHS FOR RETURN OF THE STAMP PAPERS IS TAKEN AS A PERIOD OF VALIDITY OF STAMP PAPER, THE ASSESSEES UNDER BONAFIDE BELIEF AND USU AL PRACTICE HAVE USED THE STAMP PAPERS WITHIN THE PERIOD OF SIX MONTHS TH INKING IT TO BE A ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 15 VALID FOR EXECUTION OF THE LEASE AGREEMENT IN QUES TION. THE PURPOSE OF EXECUTION OF AN AGREEMENT ON STAMP PAPER IS TO PAY THE STAMP DUTY TO THE GOVERNMENT. THE ASSESSEES WERE HAVING A STAMP PAPER IN THEIR POSSESSION WHICH WAS NOT A VERY OLD STAMP PAPER AN D USED WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF ITS PURCHASE UNDER NORMAL CIRCUMSTANCES. IN VIEW OF THIS, THOUGH, THE USE O F OLD STAMP PAPER MAY CAST SOME DOUBT ABOUT ON THE AUTHENTICITY OF THE AG REEMENT, HOWEVER, THE SAME IS NOT DETERMINATIVE OR CONCLUSIVE TO HOLD THAT AGREEMENT IN QUESTION WAS NOT AUTHENTIC. AS DISCUSSED ABOVE, SIN CE THE STAMP PAPER IN QUESTION HAS BEEN USED WITHIN SIX MONTHS FROM THE D ATE OF ITS PURCHASE, HENCE, THE BONFIDE OF THE ASSESSEES TO USE THE SA ID STAMP PAPER BEING A VALID ONE, COULD NOT BE REBUTTED BY THE REVENUE. EVEN THE AGREEMENT IN QUESTION HAS BEEN DULY NOTARIZED WITH STAMP AND SEAL OF THE NOTARY. THE ASSESSEES HAVE ALSO PRODUCED ON FILE A CERTIFIC ATE FROM THE NOTARY CERTIFYING THAT THE SAID AGREEMENT WAS DULY NOTARIZ ED BY HIM AND AN ENTRY TO THIS EFFECT HAS ALSO BEEN MADE IN HIS REGI STER. 14. THE NEXT CONTENTION OF THE LD. DR THAT THE LEA SE AGREEMENT IN QUESTION IS NOT REGISTERED, WHEREAS, THE SAME IS RE QUIRED TO BE REGISTERED AS PER THE PROVISIONS OF INDIAN REGISTRATION ACT. THE VALIDITY OF THE NON-REGISTERED LEASE DEED OF MORE THAN ONE YEAR OR STIPULATING YEARLY RENTAL HAS BEEN CONSIDERED BY THE HON'BLE SUPREME C OURT IN CASE OF ANTHONY V KC ITTOOP AND SONS AND OTHERS (2000) 6 (SC) 394; AIR ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 16 2000 SC 3523, WHEREIN, THE HON'BLE S UPREME COURT HAS CONSIDERED WHETHER AN UNREGISTERED LEASE DEED CAN CREATE A LEA SE. THE COURT HELD THAT AN UNREGISTERED INSTRUMENT CANNOT CREATE A CON TRACTUAL LEASE DUE TO THE STATUTORY RESTRICTIONS PUT UNDER SECTIONS 17 AN D 49 OF THE REGISTRATION ACT AND SECTION 107 OF THE TRANSFER OF PROPERTY ACT (TOPA) BUT THAT THE EXISTENCE OF A LEASE CAN BE PRE SUMED FROM THE CONDUCT OF THE PARTIES. THE SUPREME COURT HELD: A TRANSFER OF RIGHT IN THE BUILDING FOR ENJOYMENT, OF WHICH THE CONSIDERAT ION OF PAYMENT OF MONTHLY RENT HAS BEEN FIXED, CAN REASONABLY BE PRES UMED. FURTHER, IN THE CASE OF BURMAH SHELL OIL DISTRIBUTING NOW KNOWN AS BHARAT PETROLEUM CORPORATION LTD. V. KHAJA MIDHAT NOOR & O RS (AIR 1988 SC 1470), THE HON'BLE SUPREME COURT HELD THAT A LEASE FOR A PERIOD EXCEEDING ONE YEAR CAN ONLY BE CREATED BY A REGISTE RED INSTRUMENT. IN THE ABSENCE OF A REGISTERED INSTRUMENT, THE LEASE S HALL BE A MONTH TO MONTH LEASE. SIMILARLY, IN THE CASE OF PARK STREET PROPERTIES (PVT.) LTD. V. DIPAK KUMAR SINGH AND ORS. (AIR 2016 SC 4038) THE HON'BLE SUPREME COURT HAS HELD THAT IN THE ABSENCE OF REGISTRATION, A MONTH-TO-MONTH LEASE IS CREATED WHICH IS GOVERNED BY SECTION 106 O F TOPA. 15. FROM THE ABOVE DECISIONS OF THE HON'BLE SUPREME COURT, IT CAN BE GATHERED THAT THOUGH A LEASE DEED OF YEAR TO YEAR F OR MORE THAN ONE YEAR IS REQUIRED TO BE REGISTERED AND IN THE ABSENCE OF REGISTRATION OF SUCH ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 17 DEED, THE TERMS AND CONDITIONS OF THE LEASE DEED CA NNOT BE ENFORCED, HOWEVER, AT THE SAME TIME, FROM THE ACT AND CONDU CT OF THE PARTIES IT CAN BE PRESUMED AS A LEASE ON MONTH TO MONTH BASIS AND WILL BE GOVERNED BY THE STATUTORY PROVISIONS OF THE TRANSFE R OF PROPERTY ACT. IT CAN BE GATHERED OTHERWISE FROM THE ACT AND CONDUCT OF THE PARTIES WHETHER THAT THERE WAS A RELATIONSHIP OF LESSOR OR LESSEE OR NOT. IN THE CASE IN HAND, NEITHER THE VTC LIMITED NO R THE ASSESSEES HAVE DENIED OR DISPUTED THEIR RELATIONSHIP AS A LES SOR AND LESSEE, RATHER, IT HAS ALSO NOT BEEN DISPUTED BY THE REVENUE THAT THE VTC LIMITED IS USING PREMISES OF THE ASSESSEES AND HAS BEEN PAYIN G RENT TO THE ASSESSEES WHICH HAS BEEN DULY TAKEN INTO THE ACCOUN T IN THE RETURNS OF THE INCOME OF THE ASSESSEES AND DUE TAXES PAID THER EUPON AND ALSO ACCEPTED AS SUCH BY THE DEPARTMENT. AS PER THE PRO VISIONS OF SECTION 49 OF THE REGISTRATION ACT, NO DOCUMENT REQUIRED TO BE REGISTERED SHALL BE RECEIVED AS EVIDENCE OF ANY TRANSACTION AFFECTING S UCH PROPERTY OR CONFERRING SUCH POWER UNLESS IT HAS BEEN REGISTERED . HOWEVER, AS PER THE PROVISION OF SECTION 49 OF THE ACT, UNREGISTERE D DOCUMENTS CAN BE RECEIVED AS AN EVIDENCE OF THE COLLATERAL TRANSACTI ONS NOT REQUIRED TO BE AFFECTED BY REGISTERED INSTRUMENT. IN THE CASE IN H AND, THERE IS NO DISPUTE BETWEEN THE PARTIES TO LEASE DEED REGARDING TERMS AND CONDITIONS OF THE LEASE. THE NATURE OF RELATIONSHIP BETWEEN T HE COMPANY AND THE ASSESSEES HAS ALSO NOT BEEN DISPUTED BY THE INCOME TAX DEPARTMENT. IF PARTIES TO THE LEASE HAVE AGREED THAT THERE WILL BE A SECURITY DEPOSIT ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 18 MAINTAINED BY THE LESSEES WITH THE LESSOR, AND THEY ARE NOT DISPUTING IT, THE INCOME TAX DEPARTMENT, WHICH IS NOT A PARTY TO THE TRANSACTION, IS NOT COMPETENT TO DISPUTE THE TRANSACTIONS IN RESPEC T OF THE RIGHTS EFFECTING THE IMMOVABLE PROPERTY BETWEEN LESSOR AND LESSEE OR TO SAY THAT THE LESSORS CANNOT ACCEPT OR COULD NOT HAVE AC CEPTED THE SECURITY DEPOSITS FROM THE LESSEE ONLY BECAUSE THAT THE LEAS E DEED HAS NOT BEEN REGISTERED. IN THE CASE IN HAND, THE ASSESSEES HAVE ESTABLISHE D THAT THERE IS A CONTRACTUAL RELATIONSHIP OF LESSOR AND LESSEE WITH THE COMPANY, THE LAND RENTED OUT IS A HIGH VALUE LAND , THE RENT PAID BY THE COMPANY HAS BEEN RETURNED IN THE INCOME TAX RETURNS OF THE LESSORS A ND DULY ACCEPTED BY THE DEPARTMENT, THERE IS NO QUESTION TO DOUBT THE P AYMENT OF SECURITY DEPOSITS ALSO. THE ASSESSEES, THUS, HAVE PROVED THA T IT WAS COMMERCIAL TRANSACTION BETWEEN THE ASSESSEES AND THE COMPANY, HENCE, THE DEEMING FICTION OF DEEMED DIVIDEND AS PER THE PROVISIONS OF SECTION 2(22(E) OF THE ACT CANNOT BE APPLIED IN THIS CASE. 16. SO FAR AS THE CONTENTION OF THE LD. DR THAT THE AMOUNT PAID AS SECURITY DEPOSITS TO DIFFERENT ASSESSEES IS DISPROP ORTIONATE VIS-A VIS TO THE SHARE OF THE ASSESSEES IN PROPERTY IN QUESTION , IT IS UNDISPUTED THAT THE ASSESSEES HEREIN ARE FAMILY MEMBERS AND THE TOT AL SECURITY DEPOSITS PAID BY THE COMPANY TO THE ASSESSEES NEVER EXCEEDED THE LIMIT AS STIPULATED IN THE LEASE AGREEMENT. IT IS UP TO THE ASSESSEES TO SETTLE ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 19 BETWEEN THEM AS TO IN WHICH ASSESSMENT YEAR WHAT AM OUNT OF THE SECURITY DEPOSIT WILL BE RETAINED BY EITHER OR ANY OF THEM. THIS CANNOT BE A GROUND TO DOUBT OR TO REJECT THE TRANSACTION IN QUESTION. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ASSESSEES HAVE ESTAB LISHED THAT THE PAYMENTS RECEIVED BY THEM AS SECURITY DEPOSITS WERE PAID BY THE COMPANY IN THE COURSE OF ITS BUSINESS, HENCE, THE D EEMING FICTION OF DEEMED DIVIDEND TO SECTION 2(22)(E) OF THE ACT IS N OT APPLICABLE TO THESE TRANSACTIONS. THIS COMMON GROUND TAKEN BY THE ASSES SEES IN ALL THE APPEALS IS ALLOWED AND ADDITIONS MADE BY THE ASSE SSING OFFICER ON THIS ISSUE ARE HEREBY ORDERED TO BE DELETED. 17. IN THE CAPTIONED APPEAL OF RANI VERMA IN ITA NO. 937/CHD/2014 RELATING TO THE ASSESSMENT YEAR 2009-10 , APART FROM THE COMMON GROUND OF DEEMED DIVIDEND, ANOTHER GROUND AGITATIN G THE ADDITIONS MADE / CONFIRMED BY THE LOWER AUTHORITIES U/S 68 OF THE I.T. ACT HAS ALSO BEEN TAKEN WHICH READS AS UNDER:- 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 64,2,5000/- BEING ENTIRE CASH DEPOSITED IN THE BANK ACCOUNT, AS INCOME U/S 68 OF THE INCOME TAX ACT. THE FACT IS THAT ASSESSEE HAS SUBMITTED DETAILED CASH FLOW STATEMENT, AS WELL AS STATEMENT OF AFFAIR OF EACH YEAR TO LEARNED AO. EVE N STATEMENT SHOWING DATE WISE AVAILABILITY OF CASH IN HAND OF EACH YEAR WAS SUBMITTED TO LEARNED CIT (APPEAL). AS SUCH THE CONFIRMATION OF ADDITION BY T HE LD. CIT(APPEALS) IS FACTUALLY AND LEGALLY NOT CORRECT. ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 20 18. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FROM THE PERUSAL OF THE BANK ACCOUNT OF THE ASSESSEE NOTED THAT THERE WERE CASH DEPOSITS ON DIFFERENT DATES TOTALING RS. 64,25,000/- DURING THE YEAR UNDER CONS IDERATION. HE, THEREFORE, SHOW CAUSED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE AFORESAID DEPOSITS OF RS. 64,25,000/- DEPOSITED ON DIFFERENT DATES. THE ASSESSEE REPLIED THAT NO REGULAR BOOKS OF ACCOUNT H AVE BEEN MAINTAINED BY THE ASSESSEE, HOWEVER, AS PER THE CASH FLOW STA TEMENT, THERE WERE MORE WITHDRAWALS THAN THE CASH DEPOSITS IN THE BANK ACCOUNT ON DIFFERENT DATES AND THAT THE DEPOSITS IN THE BANK ACCOUNT ON DIFFERENT DATES WERE OUT OF CASH WITHDRAWALS. THE ASSESSING O FFICER, HOWEVER, DID NOT GET SATISFIED WITH THE ABOVE REPLY OF THE A SSESSEE. HE OBSERVED THAT ASSESSEE HAD NOT FILED DATE WISE CASH FLOW STA TEMENT, RATHER, THE ASSESSEE HAD FILED A CONSOLIDATED CASH FLOW STATEM ENT. HE OBSERVED THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE SOURCE OF THE CASH DEPOSITS. HE, ACCORDINGLY MADE AN ADDITION OF RS. 64,25,000/- INT O THE INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT. 19. THE LD. CIT(A) CONFIRMED THE ADDITION SO MADE B Y THE ASSESSING OFFICER. 20. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEES HA S SUBMITTED THAT ASSESSEE IS AN INDIVIDUAL AND HAS BEEN FILING HER R ETURNS OF INCOME DECLARING RENTAL INCOME AND SALARY INCOME. THAT ASS ESSEE IS NEITHER ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 21 MAINTAINING REGULAR BOOKS OF ACCOUNT AND NOR SHE IS REQUIRED STATUTORILY TO MAINTAIN ANY BOOKS OF ACCOUNT. THAT THE ASSESSEE HAS FILED CONSOLIDATED STATEMENT BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) AND HAS GIVEN THE SOURCE OF DEPOSITS AS CASH IN HAND YEAR AFTER YEAR AND THE SAME HAS BEEN REFLECTED IN THE B ALANCE SHEET. THE CLOSING CASH AND OPENING CASH AS REFLECTED IN THE CONSOLIDATED CASH FLOW STATEMENT TALLIES WITH THE DATE WISE CASH FLOW STATEMENT FURNISHED BEFORE THE LD. CIT(A) WHICH REFLECTS THE DAY TO DAY AVAILABILITY OF CASH. THE LD. COUNSEL FOR THE ASSESSEES HAS INVITED OUR A TTENTION IN THIS RESPECT TO PAGE 23 OF THE PAPER BOOK WHICH IS COPY OF THE RECONCILIATION OF THE CASH ACCOUNT / CASH FLOW STATEMENT TO SHOW T HE DATE WISE CASH AVAILABLE WITH THE ASSESSEE TO MEET THE DEPOSITS MA DE IN THE BANK ACCOUNT. THE LD. COUNSEL FOR THE ASSESSEES HAS SUB MITTED THAT EACH AND EVERY ENTRY HAS BEEN REFLECTED IN THE CONSOLIDATED CASH FLOW CHART. THE AFORESAID CASH FLOW STATEMENT FURNISHED BY THE ASSE SSEE COULD NOT BE REBUTTED BY THE LD. DR. 21. A PERUSAL OF THE CASH FLOW STATEMENT AS WELL AS OPENING AND CLOSING BALANCE OF THE YEAR PROVES THAT THE ASSESSE E HAD FUNDS AVAILABLE ON THE RELEVANT DATES TO MAKE THE DEPOSITS IN THE B ANK ACCOUNT OF THE ASSESSEE. THE SOURCE OF THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, THUS, STANDS EXPLAINED BY THE ASSESSEE. IN VIEW OF THIS, THE ADDITION MADE BY THE LOWER AUTHORITIES ON THIS ISSU E IS ALSO HELD TO BE ITA NOS. 924 TO 932-C-2014- ANIL VERMA & OTHERS, CHANDIGARH 22 NOT JUSTIFIED AND THE SAME IS ACCORDINGLY ORDERED T O BE DELETED. GROUND NO.2 OF THE APPEAL IN ITA NO. 937/CHD/2017 STANDS A LLOWED. NO OTHER GROUND WAS RAISED OR PRESSED. IN VIEW OF OUR FINDINGS GIVEN ABOVE, ALL THE APPEAL S OF THE ASSESSEE ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2019 SD/- SD/- ( . . / N.K. SAINI) ( / SANJAY GARG) !'# / VICE PRESIDENT $% / JUDICIAL MEMBER DATED : 10.07.2019 .. 2*%)3454) / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. %& !# / THE RESPONDENT 3. , 6) / CIT 4. , 6) ( )/ THE CIT(A) 5. 47 %)8 , . 8 , 9:;< / DR, ITAT, CHANDIGARH 6. ;= - / GUARD FILE 2 , / BY ORDER, > / ASSISTANT REGISTRAR