Kanta Devi Agrawal, Sambalpur V. DCIT, Sambalpur

ITSSA 109/CTK/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3254 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MOHAPATRA
• Keywords: Income from undisclosed sources; Document seized; Principle of natural justice; Corroborative evidences; Documents seized
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER ITA NO.109/CTK/2013 ASSESSMENT YEAR : 2009 - 2010 SM T KANTA DEVI AGRAWAL, C/O. SRI N ARSHING LAL AGARWAL, NAYAPARA, SAMBALPUR VS. DCIT, CIRCLE 1(1), SAMBALPUR PAN/GIR NO. ACFPA 1775 M (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PRAJNA RAJ MOHANTY, AR/SAMBHULAL AGARWAL, FCA REVENUE BY : SHRI A.K.MOHAPATRA, CIT , DR DATE OF HEARING : 20 /04/ 2017 DATE OF PRONOUNCEMENT : 25 /04/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - BERHAMPUR , DATED 11.3.2013 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. GROUND NOS.1 & 6 ARE GENERAL IN NATURE AND HENCE, REQUIRES NO SEPARATE ADJUDICATION BY US. 3. GROUND NOS. 2, 3 & 4 READ AS UNDER: 2 ITA NO.109/CTK/2013 ASSESSMENT YEAR :2009 - 2010 2 . FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE IMPUGNED ASSESSMENT IS NOT BARRED BY LIMITATION WITHOUT PROPER APPRECIATION OF THE WRITTEN SUBMISSIONS SUPPORTED BY VARIOUS CASE LAWS FILED BY THE APPELLANT. THE CASE LAWS CITED BY THE LEARNED CIT(A) ARE NOT RELEVANT TO THE FACTS OF THE APPELLANT. 3. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ALSO ERRED IN LAW IN UPHOLDING THE APPLICABILITY OF SEC. 153C IN THE CASE OF THE APPELLANT SIMPLY ON THE BASIS OF VOLUNTARY DISCLOSURE OF RS.40.00 LAC MADE BY THE APPELLANT IN THE STATEMENT RECORDED U/S. 132(4), IGNORING THE CLEAR FINDING OF DELHI HIGH COURT IN CIT V. RAJ PAL BHATIA REFERRED TO IN PARA 1.5 OF WRITTEN SUBMISSION DT.22.11.2011 (PAGE 3 OF THE IMPUGNED ORDER) THAT IT WOULD NOT QUALIFY THE EXPRESSION 'DOCUMENT' HAVING BEEN SEIZED DURING THE SEARCH. THE LEARNED CIT(A) IS PRIMA FA CIE WRONG TO UPHOLD THE INVOCATION OF SEC.153C SIMPLY ON THE GROUND THAT THE ABOVE DISCLOSURE WAS MADE ON THE BASIS OF SEIZED DOCUMENTS, WHICH, BY IMPLICATION , BELONG TO THE APPELLANT. 4. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED DEDUCTION OF LOAN INTEREST OF RS.26,485 U/S.24 WHILE COMPUTING 'INCOME FROM HOUSE PROPERTY' AND THE BALANCE LOAN INTEREST OF RS.1,884 FROM GROSS INCOME FROM OTHER SOURCES OF RS.31,367.00 AS STATED IN THE WRITTEN SUBMISSION DT.2 2.11.2011 ( PAGE 9 OF THE IMPUGNED ORDER). HE IS NOT JUSTIFIED TO UPHOLD THE DISALLOWANCE OF THE ENTIRE INTEREST ON EXTRANEOUS GROUNDS. 4. AT THE TIME OF HEARING, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE DID NOT PRESS THE ABOVE GROUNDS OF APPEAL AND, THEREFORE, SAME ARE DISMISSED FOR WANT OF PROSECUTION. 5. IN GROUND NO.5 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.8,40,500 BEING CASH DEPOSITS IN BANK ACCOUNT EXPLAINED TO BE OUT OF OPENING CASH - IN - HAND OF RS.3,72,449 AND PRIOR CASH WITHDRAWALS OF RS.11,58,000 FROM BANK, WHICH HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT . 3 ITA NO.109/CTK/2013 ASSESSMENT YEAR :2009 - 2010 6. THE BRIEF FACTS OF THE CASE ARE THAT ON A PERUSAL OF THE PASS BOOK OF THE ASSESS EE, THE ASSESSING OFFICER FOUND THAT AN AMOUNT OF RS.8,40,500/ - WAS DEPOSITED IN CASH DURING THE IMPUGNED ASSESSMENT YEAR . ON BEING ASKED TO EXPLAIN THE SOURCE OF THIS CASH DEPOSIT, THERE WAS NO COMPLIANCE FROM THE ASSESSEE. THE ASSESSING OFFICER SUMMONE D THE ASSESSEE AND RECORDED HER STATEMENT. IN THE STATEMENT RECORDED THE ASSESSEE STATED THAT THE DEPOSITS MADE IN THE BANK ACCOUNT ARE OUT OF CASH AVAILABLE IN HER HAND. THE ASSESSING OFFICER OBSERVING THAT NO SUPPORTING EVIDENCE WAS FURNISHED AND NO CASH FLOW STATEMENT WAS FILED, ADDED RS.8,40,500/ - AS INCOME FROM UNDISCLOSED SOURCES. 7. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE IN HER STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ON 10.12.2010 BEFORE THE ASSESSING OFFICER SUBMITTED THA T THE DEPOSIT IN THE BANK WAS OUT OF CASH AVAILABLE IN HER HAND. THEREAFTER, NO OPPORTUNITY WAS ALLOWED TO FURNISH THE CASH FLOW STATEMENT WITH SUPPORTING EVIDENCE IN ABSENCE OF WHICH, THE ASSESSING OFFICER IS NOT JUSTIFIED TO TREAT THE ENTIRE DEPOSIT OF RS.8,40,500/ - AS UNACCOUNTED INCOME IGNORING THE CASH IN HAND OF RS.3,72,488.84 AS ON 31.3.2008 DISCLOSED IN THE STATEMENT OF AFFAIRS FILED WITH THE RETURN OF INCOME IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 09 AND CASH WITHDRAWALS MADE FROM THE S AID BANK, THE PASSBOOK OF WHICH WAS FURNISHED BY THE ASSESSEE, WHICH WAS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. THE ASSESSEE CLAIMED THAT IT HAD 4 ITA NO.109/CTK/2013 ASSESSMENT YEAR :2009 - 2010 WITHDRAWN CASH FROM THE BANK PRIOR TO THE DEPOSITS WITH THE HELP OF XEROX COPY OF THE BANK PASSBOOK FILED ALONGWITH COMPUTATION OF INCOME AND STATEMENT OF AFFAIRS AS UNDER: DATE AMOUNT 29.04.2008. RS. 50,000 29.04.2008 RS. 50,000 04.06.2008 RS. 1,00,000 27.06.2008 RS. 99,000 02.09.2008 RS. 60,000 12.09.2008 RS. 1,85,000 27.09.2008 RS. 1,00,000 04.11.2008 RS. 1,00,000 03.12.2008 RS. 1,07,000 24.01.2008 RS. 1,07,000 10.03.2009 RS. 1,00,000 26.03.2009 RS.1,00.000 RS.11,58,000/ - 8. THEREFORE, IT WAS SUBMITTED THAT THE ADDITION OF RS.8,40,500 / - SHOULD BE DELETED. 9. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER WHO VIDE HIS LETTER NO.8283 DATED 2.3.2012 HAS STATED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT PRODUCE THE CASH FLOW STATEMENT WITH SUPPORTING EVIDENCE AND, THEREFORE, THE ADDITION WAS MADE. IN THE REJOINDER TO THE REMAND REPORT, LD A.R. SUBMITTED THAT THE ASSESSING OFFICER IN HIS REMAND REPORT HAS SIMPLY REPEATED THE FACTS FROM THE ASSESSMENT ORDER AND HAS NOT FOUND ANY FAULT IN THE SOURCE OF THE ABOVE DEPOSITS AS EXPLAINED IN THE WRITTEN SUBMISSION DATED 5 ITA NO.109/CTK/2013 ASSESSMENT YEAR :2009 - 2010 22.11.2011 FILED BEFORE THE CIT(A). AS SUCH THE ADDITION SHOULD BE DELETED. 10. THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER OBSERVING THAT AS MENTIONED BY THE ASSESSING OFFI CER I N THE ASSESSMENT ORDER THAT NO CASH FLOW STATEMENT WERE FURNISHED DURING THE ASSESSMENT PROCEEDINGS. NOW LD A.R. HAS TRIED TO LINK SOME WITHDRAWALS WITH THE DEPOSITS MORE PARTICULARLY ON THE WITHDRAWAL FR OM THE SAME BANK ACCOUNT. THESE DETAILS WERE NOT FURNISHED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, HE FOUND NO REASON TO ACCEPT THE CONTENTION OF THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE. 11. LD A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE CI T(A) AND SUBMITTED THAT A PLAUSIBLE AND GOOD EXPLANATION AND PROOF OF THE ASSESSEE CANNOT BE BRUSHED ASIDE BY THE ASSESSING OFFICER AND T HE CIT(A) LIGHTLY. THEY HAVE TO GIVE REASON AS TO WHY SAID EXPLANATION IS NOT ACCEPTABLE BY THEM. THE ASSESSEE HAD MADE WITHDRAWAL OF RS.11,58,000/ - FROM THE VERY SAME BANK ACCOUNT BEFORE MAKING CASH DEPOSIT IN BANK WHICH FACT HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AS WELL AS CIT(A). STILL THE ASSESSEE HAD CASH BALANCE OF RS.3,72,448.84 AS ON 31.3.2008 AS PER THE S TATEMENT OF AFFAIRS FILED BY THE ASSESSEE ALONGWITH THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008 - 09. THEREFORE, THE CASH DEPOSIT IN THE ACCOUNT OF RS.8,40,500/ - HAS BEEN FULLY EXPLAINED 6 ITA NO.109/CTK/2013 ASSESSMENT YEAR :2009 - 2010 AND DOES NOT WARRANT ANY ADDITION TO THE INCOME OF THE ASSESSEE AS U NEXPLAINED DEPOSIT IN THE BANK. 12. LD D.R. RELIED ON ORDERS OF LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THE UNDISPUTED FACTS ARE THAT THE ASSESSING OFFI CER FOUND FROM THE BANK PASSBOOK OF THE ASSESSEE THAT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS.8,40,500/ - DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A) THAT THE DEPOSIT WAS OUT OF EARLIER C ASH WITHDRAWALS FROM THE BANK ACCOUNT OF RS.11,58,000/ - AND FROM THE CLOSING CASH IN HAND OF RS.3,72,448.84 AS ON 31.3.2008 AS PER THE STATEMENT OF AFFAIRS FILED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09. BOTH THE LOWER AUTHORITIES HAVE NO T GIVEN ANY REASON AS TO WHY THE SAID EXPLANATI ON OF THE ASSESSEE IS NOT ACCEPTABLE . NO MATERIAL HAS BEEN BROUGHT ON RECORD AFTER VERIFICATIO N BY THE ASSESSING OFFICER AS WELL AS BY THE CIT(A) TO SHOW THAT THE ASSESSEE COULD NOT HAVE MADE CASH DEPOSIT OF RS.8,40,500/ - OUT OF EARLIER WITHDRAWALS FROM THE VERY SAME BANK ACCOUNT AND OUT OF CASH IN HAND AS ON 31.3.2008 OF RS.3,72,448.84. WE FIND THAT THE EXPLANATION OF THE ASSESSEE THAT THE CASH DEPOSIT IN THE BANK ACCOUNT OF RS.8,40,500/ - IS OUT OF THE EARLIE R CASH WITHDRAWAL FROM THE SAID BANK ACCOUNT AND OUT OF THE CASH IN HAND OF RS.3,72,448.84 AS ON 31.3.2008 IS A PLAUSIBLE ONE. HENCE, I N ABSENCE 7 ITA NO.109/CTK/2013 ASSESSMENT YEAR :2009 - 2010 OF ANY CONTRARY MATERIAL BEING BROUGHT ON RECORD, IN OUR CONSIDERED VIEW, THE LOWER AUTHORITIES WERE NOT JUSTI FIED IN MAKING THE ADDITION OF RS.8,40,500/ - TO INCOME OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSIT U/S.68 OF THE ACT. WE, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELE TE THE ADDITION OF RS.8,40,500/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 14 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 25 /04/2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (KULDIP SINGH) ( N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER CUTTACK; DATED 25 /04/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SMT KANTA DEVI AGRAWAL, C/O. SRI NARSHING LAL AGARWAL, NAYAPARA, SAMBALPUR 2. THE RESPONDENT: DCIT, CIRCLE 1(1), SAMBALPUR 3. THE CIT(A) SAMBALPUR 4. PR.CIT , SAMBALPUR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//