Sh. Vinod Garg, Faridabad V. ACIT, Faridabad

ITSSA 16/DEL/2008

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9477 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 02-03-2010
• Assessment Year: misc
• Appeal Filed On: 29-01-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K TIWARI
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Gift; Salary income; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI VIMAL GANDHI, PRESIDENT AND SHRI DEEPAK R. SHAH, ACCOUNTANT MEMBER I.T. (SS)A.NO.16/DEL/2008 BLOCK PERIOD : 1.4.1986 TO 14.11.1996 SHRI VINOD GARG, ASSTT. COMMISSIONER INCOME-TAX , H. NO.131, WARD NO.5, VS. RANGE-II, FARIDAB AD (HARYANA). BALLABHGARH, FARIDABAD. PAN: AIKPG-0194-K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWA NI TANEJA, ADVOCATE. RESPONDENT BY : SHRI V.K. TIWARI, CIT(DR). O R D E R PER DEEPAK R. SHAH, ACCOUNTANT MEMBER. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ASSESSMENT FRAMED UNDER SECTION 158BC READ WITH SECTION 254 OF THE IN COME-TAX ACT, 1961 (THE ACT). 2. A SEARCH WAS CONDUCTED AT THE PREMISES OF THE AS SESSEE AND THE ASSESSMENT WAS FRAMED UNDER SEC.158BC ORIGINALLY ON 27.11.1996. THE ASSESSMENT WAS THEREAFTER SET ASIDE BY THE TRIBUNAL BY ITS ORDER DATED 16.11.2006 WITH THE DIRECTION TO RE-ADJUDICATE UPON THE SAME AFTER CONSIDERING SEIZED MATERIAL AND AFFORDING OPPORTUNI TY OF HEARING. PURSUANT 2 TO THE REMAND BY THE TRIBUNAL, AFRESH ASSESSMENT WA S FRAMED WHICH IS NOW IMPUGNED BEFORE US. 3. FIRST GROUND OF APPEAL IS AGAINST ADDITION OF RS .18.,385/- BEING MONEY RECEIVABLE FROM VARIOUS PERSONS. 4. THE ASSESSING OFFICER NOTED THAT DOCUMENT A-1/1 WAS SEIZED DURING SEARCH WHICH IS A LEDGER MAINTAINED BY THE ASSESSEE FOR RECORDING HIS TRANSACTION WITH THE LOCAL PERSONS REGARDING MONEY GIVEN OR MONEY RECEIVED FROM THEM. THE ASSESSEE ADMITTED THAT THE DOCUMENT BELONGED TO HIM. THE ASSESSING OFFICER WORKED OUT THE PEAK BALANCE FROM THE SAID DOCUMENT AT RS.18,385/- AS PER WORKING GIVEN BY THE ASSESSEE HI MSELF. THE SAME WAS THEREFORE, ADDED AS INCOME OF THE ASSESSEE FROM UND ISCLOSED SOURCES. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI ASHWAN I TANEJA INVITED OUR ATTENTION TO THE SAID DOCUMENT WHICH IS A DIARY IN THE FORM OF LEDGER ACCOUNT OF VARIOUS PERSONS TO WHOM THE AMOUNT WAS GIVEN AND RECEIVED BACK. IT WAS SUBMITTED THAT AS PER THE BALANCE-SHEET OTHER LOANS AND INVESTMENTS ARE TO THE TUNE OF RS.32,000/- AND HENCE NO ADDITION CAN BE MA DE IN RESPECT OF THE LOAN AND ADVANCES BASED ON THE DOCUMENT A-1/1. 6. WE ARE UNABLE TO ACCEPT THE CONTENTION. THE ASS ESSEE IS STATED TO HAVE MAINTAINED BOOKS OF ACCOUNT AND FILED WITH THE RETU RN OF INCOME. IF THAT BE SO, THE ASSESSEE COULD EXPLAIN THE ENTRIES IN THE S EIZED MATERIAL WITH THE 3 BOOKS OF ACCOUNT MAINTAINED BY HIM. SINCE THE ADVA NCES AS NOTED IN THE SEIZED MATERIAL ARE NOT FOUND TO BE RELATED TO THE ADVANCES SHOWN IN THE BALANCE-SHEET, THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER. 7. NEXT GROUND OF APPEAL IS AGAINST ADDITION OF RS. 29,000/- ON ACCOUNT OF CASH DEPOSITED IN GURGAON GRAMIN BANK. 8. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WA S FOUND TO HAVE DEPOSITED A SUM OF RS.29,000/- ON 6.8.1996. THE AS SESSEE EXPLAINED THAT THE DEPOSIT WAS OUT OF SALARY INCOME RECEIVED FROM M/S. DREAM SUCCESS LEASING PVT. LTD. @ RS.5,000/- PER MONTH. THE ASSESSING OF FICER HELD THAT THE STORY OF DEPOSITING CASH FROM SALARY IS AN AFTERTHOUGHT. THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE AS TO WHEN THE SALARY WAS RECE IVED FROM THE COMPANY AND HOW IT WAS USED. @ RS.5,000/- PER MONTH THE SA LARY TILL THE DATE OF DEPOSIT WOULD BE RS.25,000/- ONLY WHICH WILL MEAN T HAT THE ENTIRE SALARY HAS BEEN FOUND TO HAVE BEEN DEPOSITED WHICH IS UNREASON ABLE. ACCORDINGLY, THE DEPOSIT WAS TREATED AS OUT OF UNDISCLOSED INCOME. 9. THE LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO PAGE 68- 69 OF THE PAPER BOOK WHICH ARE THE RETURN OF INCOME FILED IN THE REGULAR COURSE. AS PER SUCH RETURN THE ASSESSEE IS STATED TO HAVE RECEIVED SALARY OF RS.54,000/-. THEREFORE, THE DEPOSIT OF RS.29,000/- IS TO BE TREATED AS EXPLAINED FROM SALARY INCOME. 4 10. WE HAVE PERUSED THE PAGES 68-69 OF THE PAPER BO OK. PAGE 69 OF THE PAPER BOOK IS THE BALANCE-SHEET OF THE ASSESSEE AS ON 31.3.1997. AS PER THE SAID BALANCE-SHEET A SUM OF RS.30,000/- IS DUE FROM M/S. DREAM SUCCESS LEASING PVT. LTD. ON THE ASSETS SIDE. THERE IS NO MENTION ABOUT THE BANK ACCOUNT IN WHICH THE SUM OF RS.29,000/- IS DEPOSIT ED. INCOME RECEIVED DURING THE YEAR IS FOUND TO HAVE BEEN APPLIED TOWAR DS OTHER ASSETS BUT NOT IN THE BANK ACCOUNT. THEREFORE, THE DEPOSIT IN BANK A CCOUNT IS NOT EXPLAINED AND SINCE THE EVIDENCE IN RESPECT OF DEPOSIT IN BAN K ACCOUNT WAS FOUND DURING SEARCH, THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER. 11. NEXT GROUND OF APPEAL IS AGAINST ADDITION OF RS .2,87,100/- IN THE BANK ACCOUNT OF ASSESSEES WIFE AND RS.37,541/- IN THE B ANK ACCOUNT OF THE ASSESSEE. AS REGARDS DEPOSIT IN BANK ACCOUNT OF TH E ASSESSEE IT WAS SUBMITTED THAT THE SAME IS OUT OF THE SALE PROCEED OF THE SCOOTER. SINCE NO EVIDENCE WAS FILED IN THIS REGARD, THE ASSESSING OF FICER ADDED THE AMOUNT AS DEPOSIT OUT OF UNDISCLOSED SOURCES. AS REGARDS DEP OSIT IN ACCOUNT OF WIFE, THE ASSESSEE EXPLAINED THAT HIS WIFE IS MAJOR AND I NDEPENDENT AND HENCE DEPOSIT IN HER ACCOUNT CANNOT BE BROUGHT TO TAX. T HE ASSESSING OFFICER HELD THAT THERE IS NO EVIDENCE, WHICH SUGGESTS THAT THE DEPOSIT IN WIFES ACCOUNT IS OUT OF DISCLOSED SOURCE OR THE WIFE HAS ANY INDEPEN DENT SOURCE OF INCOME AND THEREFORE, THE SAME WERE ADDED AS INCOME FROM U NDISCLOSED SOURCES. 5 12. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEPOSIT IN WIFES ACCOUNT CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE. SHE IS INDEPENDENTLY ASSESSABLE TO TAX AND SHE ALONE CAN E XPLAIN DEPOSIT IN HER BANK ACCOUNT. NO EVIDENCE IS FOUND THAT THE AMOUNT DEPOSITED IN BANK ACCOUNT OF WIFE BELONGED TO THE ASSESSEE OR IT HAD BEEN DEPOSITED BY HIM OR THAT THE ACCOUNT WAS OPERATED BY HIM. THEREFORE, I N ABSENCE OF ANY SUCH CO- RELATION OF THE ASSESSEE WITH THE ACCOUNT OF WIFE, ADDITION IS NOT CALLED FOR. HE ALSO SUBMITTED THAT UNDER SIMILAR CIRCUMSTANCES THE TRIBUNAL IN ANOTHER CASE OF SHRI RAJESH MANGLA VS. ACIT IN ITA(SS) NO.1 44/DEL/2007 DATED 22.01.2010 HAS DELETED THE ADDITION. 13. THE LEARNED DR ON THE OTHER HAND, RELIED UPON T HE FINDING OF THE ASSESSING OFFICER. HE TRIED TO DISTINGUISH THE DECI SION OF ITAT, DELHI BENCH `F IN THE CASE OF SHRI RAJESH MANGLA (SUPRA) RELIE D UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. 14. THE FINDING OF THE ASSESSING OFFICER IS THAT T HE ASSESSEE HAD DEPOSITED RS.2,87,100/- IN THE BANK ACCOUNT OF HIS WIFE. SINCE IT WAS THE ASSESSEE WHO HAD DEPOSITED THE AMOUNT IN THE BANK A CCOUNT OF HIS WIFE, IT WAS FOR THE ASSESSEE TO EXPLAIN THE SOURCE THEREOF. THE ASSESSEE CANNOT WASH OFF HIS HANDS BY SAYING THAT SINCE HIS WIFE IS MAJO R AND INDEPENDENT, HE IS NOT REQUIRED TO EXPLAIN THE SOURCE OF DEPOSIT IN TH E BANK ACCOUNT. THE 6 DECISION OF TRIBUNAL IN THE CASE OF SHRI RAJESH MAN GLA IS DISTINGUISHABLE ON FACTS. IN THE SAID CASE THE TRIBUNAL NOTED THAT TH E WIFE OF THE ASSESSEE WAS AN LIC AGENT AND RECEIVING COMMISSION INCOME. IN THE SAID CASE IT WAS ALSO FOUND THAT THE DEPOSITS IN BANK ACCOUNT WERE OUT OF GIFT RECEIVED BY SMT. SUNITA MANGLA, WIFE OF THE ASSESSEE. HOWEVER, IN THE PRESENT CASE NO EXPLANATION IS OFFERED REGARDING THE SOURCE OF ASSE SSEE TO DEPOSIT OR THE SOURCE OF WIFE TO EARN OR RECEIVE SUCH INCOME. SIN CE FINDING OF THE ASSESSING OFFICER REMAINS UNCHALLENGED, THE ADDITIO N IS REQUIRED TO BE SUSTAINED. AS REGARDS DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE, THOUGH IT IS STATED TO BE OUT OF SALE PROCEEDS OF THE SCOOTER , BUT SINCE NO EVIDENCE IS FILED IN THIS REGARD TO SHOW AS TO WHETHER THE ASSE SSEE HAS POSSESSED ANY SCOOTER, THE ADDITION IS TO BE SUSTAINED. 15. NEXT GROUND OF APPEAL IS AGAINST ADDITION OF RS .28,310/- ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH. 16. DURING THE ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSEE EXPLAINED THAT THE CASH WAS FOUND FROM THE BEDROOM OF SHRI V. K. GARG. OUT OF THE CASH FOUND RS.25,000/- PERTAINS TO THE FATHER AND W IDOW BHABHI. SHE HAD DEPOSITED THE SUM FOR THE MARRIAGE OF HER DAUGHTER. THIS FACT WAS ALSO EXPLAINED DURING THE COURSE OF SEARCH TO THE DDI AN D WHO CONVINCED THE ASSESSEE THAT THE AMOUNT WOULD BE RELEASED AFTER SO METIME. LETTER FROM 7 BHABHI WAS ALSO FILED. THE ASSESSING OFFICER REJEC TED THE CONTENTION BY HOLDING IT AS A STORY OR A CAMOUFLAGE AND AFTER THOUGHT. 17. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIN D THAT THE EXPLANATION WAS OFFERED NOT ONLY AT THE TIME OF ASSESSMENT BUT ALSO AT THE TIME OF SEARCH ITSELF. IT WAS EXPLAINED THAT THE AMOUNT BELONGS N OT TO THE ASSESSEE BUT TO HIS FATHER AND BHABHI AND IN RESPECT OF WHICH CONFIRMAT ION LETTERS WERE FILED FROM SMT. JWALA DEVI. WITHOUT CONFRONTING SMT. JWA LA DEVI, THE ASSESSING OFFICER COULD NOT HAVE REJECTED SUCH CONTENTION, WH ICH WAS VALIDLY RAISED. WE, THEREFORE, HOLD THAT THE CASH OF RS.25,000/- IS TO BE TREATED AS EXPLAINED. AS REGARDS BALANCE AMOUNT OF RS.3,310/-, THE SAME C AN BE TREATED AS EXPLAINED IN VIEW OF THE INCOME DECLARED BY THE ASS ESSEE PRIOR TO SEARCH AND ASSESSED AS SUCH. WE, THEREFORE, DELETE THE ADDITI ON OF RS.28,310/-. 18. NEXT GROUND OF APPEAL IS AGAINST ADDITION OF RS .24,300/- ON ACCOUNT OF VARIOUS HOUSEHOLD ARTICLES FOUND DURING SEARCH. 19. THE ASSESSING OFFICER HELD THAT AS PER PUNCHNAM A PREPARED ON THE DATE OF SEARCH, THE ASSESSEE POSSESSED VARIOUS HOUS EHOLD ARTICLES LIKE FRIDGE, TELEVISION, MUSIC SYSTEM, A.C. ETC. VALUING AT RS.5 6,300/-. THE ASSESSING OFFICER HELD THAT AS PER THE BALANCE-SHEET A SUM OF RS.32,000/- IS DISCLOSED AND HENCE BALANCE OF RS.24,300/- IS TO BE ADDED AS ACQUIRED OUT OF UNDISCLOSED SOURCES. 8 20. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN IN ORIGINAL ASSESSMENT PROCEEDINGS IN RESPECT OF QUERY REGARDIN G ACQUISITION OF VALUABLE ARTICLES IT WAS EXPLAINED THAT THE ARTICLES PURCHAS ED ARE DECLARED IN THE BALANCE-SHEET AND OTHER ARTICLES LIKE AUDIO SYSTEM, TELEPHONE, A.C., INVERTER ETC. WERE EITHER RECEIVED BY WAY OF GIFT O R ACQUIRED OUT OF REGULAR INCOME DECLARED. 21. AFTER CONSIDERING RIVAL SUBMISSIONS WE ARE INCL INED TO ACCEPT THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE. THE TO TAL VALUE OF ARTICLES FOUND WAS WORKED OUT TO RS.56,300/- WHICH ALSO INCL UDES SMALL ITEMS LIKE EMERGENCY LIGHT, TELEPHONE, INVERTER ETC. THE ASSE SSEE HAS BEEN DECLARING INCOME FROM YEAR TO YEAR AND ALSO SHOWING WITHDRAWA LS FOR HOUSEHOLD EXPENSES. WE FIND THAT THE DRAWINGS ARE SUFFICIENT TO DEMONSTRATE THAT SUCH ARTICLES WERE ACQUIRED OUT OF INCOME DECLARED IN EA RLIER YEAR AND HENCE ADDITION OF RS.24,300/- IS REQUIRED TO BE DELETED. 22. DURING THE COURSE OF SEARCH THE ASSESSEE WAS FO UND OWNING 1000 SHARES OF RS.10/- EACH OF M/S. SKYTONE CAPITAL SERV ICES LTD. THE ASSESSEE EXPLAINED THAT THE SHARES WERE PURCHASED FOR A SUM OF RS.2100/- ONLY ON 10.11.1996. THE ASSESSING OFFICER HELD THAT SINCE THERE IS NO PROOF OF PURCHASE OF SHARES, NOR ANY EVIDENCE OF SALE THEREO F HAD BEEN SUBMITTED, BUT 9 SINCE FACE VALUE IS OF RS.10,000/- AND THE SOURCE O F THE SAME IS NOT EXPLAINED, THE SAME IS TO BE ADDED AS INVESTMENT OU T OF UNDISCLOSED SOURCES. 23. AFTER CONSIDERING THE RIVAL SUBMISSIONS, SINCE THE ASSESSEE WAS FOUND TO BE OWNING SHARES OF RS.10,000/- AND SINCE NEITHE R THE SOURCE THEREOF WAS EXPLAINED NOR ANY PROOF OF PURCHASE OF SHARES FOR A SUM OF RS.2100/- ONLY WAS FURNISHED, THE SUM OF RS.10,000/- WAS RIGHTLY A DDED AS INVESTMENT OUT OF UNDISCLOSED SOURCES. THE ADDITION OF RS.10,000/ - IS SUSTAINED. 24. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 5 TH MARCH, 2010. SD/- SD/- (VIMAL GANDHI) (DEEPAK R. SHAH) PRESIDENT ACCOUNTANT MEMBER DATED: 5 TH MARCH, 2010. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.