Neeraj, SONIPAT V. ITO WARD - 3, SONIPAT

ITA 9879/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2931 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Tangible material; Set aside
• Section: 148; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER ITA No.9879/Del/2019 Assessment Year: 2010-11 Neeraj, VPOP Rathdhana, Sonepat, Haryana. PAN: AIYPN6683Q Vs. ITO, Ward-3, Sonepat. (Appellant) (Respondent) Assessee by : Shri Akshat Sharma, CA Revenue by : Shri Mithalesh Kr. Pandey, Sr. DR Date of Hearing : 15.09.2022 Date of Pronouncement : 26.09.2022 ORDER This appeal filed by the assessee is directed against the order dated 25.09.2019 of the CIT(A), Rohtak, relating to Assessment Year 2010-11. 2. The grounds raised by the assessee read as under:- “1. The Id. CIT(A) has grossly erred on the facts and in law in presuming the service of notice u/s 148 on the basis of remand report of the A.O. In the case of the assessee notice was never served even by affixture and the notice u/s 148 sent through speed post never served upon assessee. In absence of service, notice issued u/s 148 deserves to be quashed. 2.. The Id. CIT(A) has grossly erred on facts and in law in upholding the validity of initiation of proceedings u/s 148 of the Act and assessment based on the basis of such notice ignoring the fact that the notice u/s 148 was issued by the AO. Without application of mind, without any tangible material or valid reasons, simply on the basis of ITA No.9879/Del/2019 2 his fallacious assumptions, conjunctures and surmises. The proceedings so initiated were illegal, bad in law and void-ab-initio. 3. The Id. CIT (A) has grossly erred on facts and in law in making the, addition of Rs. 670,000/- and has been made purely on unfounded presumptions and surmises without any evidence brought on records and confronted to the assessee on the other side the appellant had submitted before the Ld. CIT (A) that bank deposits were not related to him. Hence it is prayed addition may kindly be set aside.” 3. The ld. Counsel of the assessee reiterated the written submissions and submitted that the impugned cash amount of Rs.17,73,000/- was deposited on different dates by the mother of the assessee and not by the assessee. The ld. Counsel also submitted that since the assessee did not have any source of income, no return of income was filed for the year under consideration. Further, drawing our attention to cash flow statement, the ld. Counsel submitted that the assessee withdrew Rs.50 lakh cash from the same bank account on 15.01.2009 and there was a cash balance of Rs.49,60,000/- as on 01.04.2009 and, thereafter, out of the said balance, Rs.9 lakh was deposited on 28.08.2009, Rs.3,000/- was deposited on 21.10.2009 and Rs.7,70,000/- was deposited on 06.11.2009 by his mother Smt. Kamlesh and not by him. Therefore, no addition is called for in the hands of the assessee. The ld. Counsel submitted that merely because the assessee was joint account holder with her mother, the amount deposited by her mother cannot be picked up for making addition in the hands of the assessee. The ld. Counsel also drew our attention towards copy of the bank statement filed at pages 10 and 11 of the assessee’s paper book and submitted that the factum of withdrawal of Rs.50 lakh and deposit of the impugned amount on three occasions is clearly ITA No.9879/Del/2019 3 discernible from the copy of the bank statement of his mother to which the assessee is merely a joint account holder. Therefore, the impugned additions may kindly be deleted. 4. Replying to the above, the ld. Sr. DR strongly supported the orders of the authorities below and submitted that the ld.CIT(A) was right in confirming the addition of Rs.6,70,000/- in the hands of the assessee allowing part relief to the assessee. 5. Placing rejoinder to the above, the ld. Counsel submitted copy of the assessment order for AY 2011-12 pertaining to the assessee’s mother Smt. Kamlesh u/s 143(3)/147 of the Act and submitted that in the subsequent year also, the case was picked up for reassessment, but, no addition was made as the assessee’s mother successfully demonstrated that the source of cash deposit to her bank account was sale proceeds of agricultural land sold during the year under consideration which was situated at village Kabulpur and since the said land was not a capital asset within the meaning of section 2(14) of the Act, no capital gain tax was leviable thereon and the AO has accepted the return of income of assessee’s mother. 6. On careful consideration of the above submissions, I am of the considered opinion that undisputedly, the assessee and his mother are having a joint bank account, copy of which clearly reveals that there was a withdrawal of Rs.50 lakh on 15.01.2009. The three amounts picked up by the AO for making addition in ITA No.9879/Del/2019 4 the hands of the assessee has been deposited subsequently to the said withdrawal on 28.08.2009, 21.10.2009 and 06.11.2009. The amount of withdrawal is Rs.50 lakhs and the amount picked up by the AO for making addition in the hands of the assessee is Rs.16,73,000/- out of which the ld.CIT(A) has confirmed addition only to the extent of Rs.6,70,000/- and the remaining part of the addition has been deleted keeping in view the amount of advance received by the assessee on 27.08.2009. However, the copy of the agreement to sell dated 27.08.2009 and copy of registered sale deed dated 25.11.2008 pertaining to separate land clearly reveals that these transactions have been undertaken by the mother of the assessee, Smt. Kamlesh and not by the assessee. 7. In view of the above noted factual position, the whole controversy revolves around a single question whether the impugned cash deposits to the joint bank account of the assessee and her mother belonged to the assessee. The department alleges that the impugned deposits have been made by the assessee, whereas the assessee has successfully demonstrated that these deposits have been made by her mother out of cash withdrawals made by her on 15.01.2009, much earlier than the dates of impugned deposits. In view of the above, I am of the opinion that only because the assessee now has been mentioned as joint account holder of the bank account to which the impugned cash deposit has been made, the additions cannot be made and sustained in the hands of the assessee, keeping aside other relevant evidences, which clearly reveal that the mother of the assessee had withdrawn an ITA No.9879/Del/2019 5 amount of Rs.50 lakh from her bank account and the impugned three deposits have been made to the same bank account by her mother out of the amount withdrawn earlier. Therefore, the ld.CIT(A) was not correct and justified in confirming the addition of Rs.6,70,000/- in the hands of the assessee by taking cognizance of an agreement to sell dated 27.08.2009 which was not accepted by the assessee, but, was accepted by the mother of the assessee. Therefore, the ld.CIT(A) has misinterpreted the relevant documentary evidence relied by the assessee and, therefore, I am of the considered opinion that the part addition sustained by the ld.CIT(A) amounting to Rs.6,70,000/- is also not sustainable and the AO is directed to delete the same. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 26.09.2022. Sd/- (C.M. GARG) JUDICIAL MEMBER Dated: 26.09.2022. dk Copy forwarded to 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi