Shri Maheshkumar Bhagvanbhai Patel, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

ITA 994/AHD/2012

• Counselvise Citation: 99420514 RSA 2012
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA SR DR
• Assessee Lawyers: S N DIVATIA
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.994/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) MAHESHKUMAR BHAGVANBHAI PATEL A/7, SURBHI PARK SOCIETY NR.ISANPUR CHOKDI ISANPUR, AHMEDABAD-382 443 / VS. THE ITO WARD-6(4) AHMEDABAD ./ ./ PAN/GIR NO. : AROPP 2901 Q ( ' / APPELLANT ) .. ( #' / RESPONDENT ) ' $ / APPELLANT BY : SHRI S.N.DIVATIA, AR #' % $ / RESPONDENT BY : SHRI D.C.MISHRA, SR.DR &'( % ) / DATE OF HEARING 24/09/2015 *+, % ) / DATE OF PRONOUNCEMENT 21/10/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XI, AHMEDABA D [CIT(A) IN SHORT] DATED 17/02/2012 PERTAINING TO ASSESSMENT Y EAR (AY) 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.994/AHD/ 2012 MAHESHKUMAR BHAGVANBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 2 - 1.1 THE ORDER PASSED U/S.250 ON 17.2.2012 FOR A.Y. 2008-09 BY CIT(A)-XI, ABAD UPHOLDING THE ADDITION OF RS.18.25 LAKH AS UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT U/S.68 MA DE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO T HE IMPUGNED ADDITIONS. 1.3 THE LD. CIT(A) OUGHT TO HAVE ALLOWED THE OP PORTUNITY TO THE APPELLANT TO PRODUCE ADDITIONAL EVIDENCE BY WAY OF CASH BOOK ETC. INSTEAD OF REJECTING THE SAME ON TECHNICAL GRO UNDS. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THAT THE CASH DEPOSITS OF RS.18.25 LAKH MADE IN BANK ACCOUNT WITH ICICI BANK WAS UNEXPLAINED. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE CASH DE POSITS OF RS.18.25 LAKH MADE IN BANK ACCOUNT WITH ICICI BANK WAS UNEXPLAINED. 3.1 THE LD. CIT(A) HAS ERRED IN REJECTING THE C OPY OF CASH BOOK FURNISHED BEFORE HIM. 3.2 WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT (A) OUGHT TO HAVE RESTRICTED THE ADDITION TO THE EXTENT OF PEAK CREDI T. IT IS, THEREFORE, PRAYED THAT THE ADDITION OF RS.18 .25 LAKH MADE BY THE AO AND UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 07/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.18,25,000/- ON ACCOUNT OF UNEXPLAINE D DEPOSITS IN BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. AGAINST TH E SAID ASSESSMENT ITA NO.994/AHD/ 2012 MAHESHKUMAR BHAGVANBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 3 - ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMIS SED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESS EE IS FURTHER IN APPEAL BEFORE US. 3. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST THE CONFIRMATION OF ADDITION OF RS.18,25,000/- MADE U/S.68 OF THE A CT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW F AILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAD BEEN WITHDRAWING AND DEP OSITING THE AMOUNT WITH ICICI BANK. THE AUTHORITIES BELOW OUGHT NOT T O HAVE MADE ADDITION ON THE ENTIRE AMOUNT. THE LD.COUNSEL FOR THE ASSES SEE DREW OUR ATTENTION TOWARDS THE BANK STATEMENT OF THE ICICI BANK TO BUT TRESS THE ARGUMENT THAT THERE ARE DEPOSITS BY CASH AS WELL AS WITHDRAW AL BY THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS P ER THIS STATEMENT, IT CAN BE SEEN THAT THE ASSESSEE HAS WITHDRAWN ON 04/08/20 07 THROUGH ATM A SUM OF RS.25,000/- AND DEPOSITED ON 06/08/2007 A SU M OF RS.25,000/- FURTHER, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ON 10/08/2007 HAD WITHDRAWN A SUM OF RS.10,000/- AND D EPOSITED INTO THE BANK ACCOUNT OF RS.45,000/- ON 11/08/2007. SIMILA RLY, ON VARIOUS DATES THE ASSESSEE HAD WITHDRAWN THROUGH ATM AND DEPOSITE D INTO THE BANK ACCOUNT BY CASH. THEREFORE, HE SUBMITTED THAT THE ENTIRE CASH DEPOSITS OUGHT NOT TO HAVE BEEN ADDED TO THE INCOME OF THE A SSESSEE. THE ASSESSEE HAS ALSO DREW OUR ATTENTION TOWARDS THE BANK STATEM ENT, WHEREIN 1 ST & 3 RD ITA NO.994/AHD/ 2012 MAHESHKUMAR BHAGVANBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 4 - SEPTEMBER-2007, THERE WERE CASH WITHDRAWALS OF RS.9 9,000 AND RS.45,000/- RESPECTIVELY. HOWEVER, ON 08/09/2007, THE ASSESSEE HAS MADE PAYMENT TO RAVJI STOCK BROKING LTD. A SUM OF R S.4,3000/-. THE ASSESSEE HAD DEPOSITED A SUM OF RS.49,000/- EACH ON 10 TH & 11 TH SEPTEMBER-2007. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT THE ENTIRE AMOUNT OUGHT NOT TO HAVE BEEN ADDED , AT THE MOST, THE AO SHOULD HAVE ADDED THE PEAK-CREDITS. 3.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO HAS RIG HTLY MADE THE ADDITION AS THE ASSESSEE FAILED TO DEMONSTRATE THE NEXUS BETWEEN THE CASH WITHDRAWN AND CASH DEPOSITED. MOREOVER, THE ASSESS EE ALSO FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSITS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAD MADE ADDITION ON THE BASIS THAT THE ASSESSEE HAD DEPOSITED TOTAL CASH OF RS.18,25,000/- WITH ICICI B ANK. THE AO TREATED THE SAME AS NOT EXPLAINED ON THE BASIS THAT NO NARRATION OF CASH DEPOSIT AND WITHDRAWAL HAS BEEN GIVEN. THE LD.CIT( A) IN PARA-3.4 OF HIS ORDER CONFIRMED THE ADDITION MADE BY THE AO, BY OB SERVING AS UNDER:- 3.4 I HAVE CAREFULLY CONSIDERED RIVAL SUBMISSION S. IT IS SEEN THAT DURING THE ASSESSMENT PROCEEDINGS APPELLANT EXPLAIN ED THAT THE DEPOSITS MADE BY HIM ARE FROM THREE SOURCES NAMELY, SALE PRO CEEDS FROM RETAIL ITA NO.994/AHD/ 2012 MAHESHKUMAR BHAGVANBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 5 - BUSINESS, UNSECURED LOANS AND CASH WITHDRAWALS FROM THE SAME BANK ACCOUNT. HOWEVER, DURING THE APPELLATE PROCEEDINGS APPELLANT HAD RELIED ONLY ON ONE SOURCE I.E. CASH WITHDRAWAL FROM THE SAME SAVINGS BANK ACCOUNT. IT IS SUBMITTED THAT APPELLANT HAD WI THDRAWN A SUM OF RS.13,30,000/- FROM THE SAME, SAVINGS BANK ACCOUNT ON VARIOUS DATES. HOWEVER, PERUSAL OF APPELLANT'S BANK ACCOUNT MAINTA INED WITH ICICI BANK REVEALS THE CASH WITHDRAWALS OF RS.9,50,040/- ONLY. MANY TIMES THESE CASH WITHDRAWALS ARE NOT BEFORE CASH DEPOSITS AND ACCORDINGLY SOURCE OF CASH DEPOSITS CANNOT BE ACCEPTED TO BE FR OM CASH WITHDRAWALS. TO BE PRECISE, APPELLANT HAD WITHDRAWN CASH FROM HIS SAVINGS BANK ACCOUNT OF RS.56,000/- FOR THE PERIOD FROM 13-3-2008 TO 29-3-2008. HOWEVER, THERE IS NO CASH DEPOSIT DURING THIS PERIOD. THIS WAY, THESE CASH WITHDRAWALS CANNOT BE TAKEN AS SOUR CE OF CASH DEPOSITS IN THE BANK ACCOUNT. OTHERWISE ALSO, APPELLANT HAS FAILED TO FURNISH ANY DOCUMENTARY EVIDENCES TO INDICATE THAT CASH WITHDRA WALS FROM THE BANK WAS DEPOSITED BACK IN THE BANK ACCOUNT. NORMALLY, T HE CASH IS WITHDRAWN FROM THE BANK FOR SPECIFIC PURPOSE AND NO T FOR DEPOSITING THE SAME BACK IN THE SAME ACCOUNT. IN VIEW OF THESE FAC TS, SUBMISSIONS MADE BY THE APPELLANT IS REJECTED AND ADDITION OF R S.18,25,000/- MADE BY THE A.O. U/S.68 OF THE I.T.ACT IS CONFIRMED. TH ESE GROUNDS OF APPEALS ARE DISMISSED. 4.1. WE FIND THAT BOTH THE AUTHORITIES BELOW HAVE F AILED TO APPRECIATE THE FACT THAT ON VARIOUS OCCASIONS, THE ASSESSEE HA S WITHDRAWN FROM THE SAME ACCOUNT AND DEPOSITED IN THE BANK AFTER A WEE KS TIME. IN OUR CONSIDERED VIEW, THIS AMOUNT SHOULD NOT HAVE BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IT IS SETTLED POSITION OF LAW THAT ONLY UNEXPLAINED DEPOSIT COULD BE SUBJECTED TO TAX. IF AN ASSESSEE IS ABLE TO DEMONSTRATE THAT HE HAD DEPOSITED THE AMOUNT EARLIER WITHDRAWN FROM THE SAME ACCOUNT, IN THAT CASE, THE AO WOULD NOT BE JUSTIFIE D TO SUBJECT BOTH THE CREDITS TO TAX. HOWEVER, THE ASSESSEE IN RESPECT O F OTHER DEPOSITS COULD ITA NO.994/AHD/ 2012 MAHESHKUMAR BHAGVANBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 6 - NOT GIVE ANY SATISFACTORY EXPLANATION, THEREFORE WE HEREBY DIRECT THE AO TO MAKE ADDITION ON THE BASIS OF THE PEAK-CREDITS. THE AO IS DIRECTED TO COMPUTE THE PEAK-CREDITS AND MAKE ADDITION ACCORDIN GLY. WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND THE ISSUE I S RESTORED BACK TO THE FILE OF AO TO DECIDE THE SAME IN ACCORDANCE WITH TH E DIRECTIONS AS GIVEN HEREINABOVE. THUS, GROUND RAISED IN THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 21 ST DAY OF OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 21/ 10 /2015 0)..& , '.&../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 ( ) / THE CIT(A)-XI, AHMEDABAD 5. 5'6 &23 , ) 23 , , 1 / DR, ITAT, AHMEDABAD 6. 689 :( / GUARD FILE. / BY ORDER, #5 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD