Vinod Kumar J Bansal, Pune v. ACIT, Central Circle,1(1),, Pune

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 1170/PN/05 BLOCK PERIOD: 01-04-1996 TO 05-09-2002 SHRI VINODKUMAR BANSAL A-2/13 AGRASEN SOCIETY OREGAON P ARK N EAR B LUE D IAMOND P UNE -411 001 PAN ACSPB 8345 D .... APPELLANT VS. ASSTT. CIT CENT. CIR. 1(1) PUNE . RESPONDENT APPELLANT BY : SHRI NILESH KHANDELWAL CA RESPONDENT BY : SHRI A.S. SINGH CIT DR ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(A)-I PUNE DATED 03-03-2005 FOR THE BLOCK PERIOD 01-04-1996 TO 05-09-2002. 2. AT THE VERY OUTSET THE LEARNED COUNSEL FOR THE ASS ESSEE TOOK US THROUGH THE GROUNDS OF APPEAL AND MENTIONED THAT THEY REVOLVE AROUND THE ADDITION OF RS. 2 00 000/- ON ACCOUNT OF FIXED DEPOSIT RECEIPTS DISCOVERED IN SEARCH ACTION FROM THE PREMISES OF M/S AGRASEN URBAN CO-OP. BANK LTD. AND RELATABLE INTEREST OF RS. 29 760/- ON THE SAID FIXED DEPOSITS AND ANOT HER ADDITION OF RS. 17 40 197/- ON ACCOUNT OF INVESTMENTS IN FIXED DEPO SITS WHICH STAND ALLEGEDLY IN THE NAME OF FICTITIOUS PERSONS AND NOT IN THE NAMES OF THE ASSESSEE. AO MADE THE ABOVE ADDITIONS HOLDING THEY BELONG TO THE ASSE SSEE. THE CIT(A) CONFIRMED THE ABOVE ADDITIONS ALLEGEDLY WITHOUT APPRECIATING T HAT THEY WERE STANDING IN THE NAME OF OTHER PERSONS AND NOT IN THE NAME OF THE ASS ESSEE. IN THIS REGARD THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE FACTS OF THE CASE BY STATING THAT THERE WAS A SEARCH AND SURVEY ACTION IN THE CASES OF A GRASEN URBAN CO-OP. BANK ITA NO.1170/PN/05 VINODKUMAR BANSAL BLOCK PERIOD: 1-4-96 TO 5-9-02 PAGE 2 OF 3 LTD AND THE ASSESSEE. DURING THE SEARCH AND SURVEY AC TION THE DEPARTMENT DISCOVERED CERTAIN INFORMATION FROM THE COOPERATIVE BANK WHERE THE ASSESSEE IS THE DIRECTOR THAT THERE WERE FACTS RELATING TO THE MAK ING OF THE FIXED DEPOSIT RECEIPTS TOTALLING TO TO RS 2 LAKHS AND RS 17 40 19 7/-. WHILE RS 2 LAKSH STAND IN THE NAMES OF 14 PERSONS WHOSE NAMES PRIMA FACIE ARE FICTITIOUS THERE ARE NO NAMES ON THE FDRS AMOUNTING TO RS 17 40 197/-. 3. DURING THE PROCEEDINGS BEFORE US THE LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS. 2 00 000/- AND A NOTHER ADDITION OF RS. 17 40 197/- AND THE RELATED INTEREST OF RS. 29 760/ - WERE ADDED AND CONFIRMED BY THE CIT(A) ERRONEOUSLY WHEN THEY DO NOT BELONG TO THE ASSESSEE. AS PER THE AR OF THE ASSESSEE THERE ARE NO COLLABORATIVE EVIDEN CES TO DEMONSTRATE THAT THE SAID FDRS BELONG TO THE ASSESSEE. NO ADDITIONS MUST BE SUSTAINED WHEN THERE ARE NO COLLABORATIVE EVIDENCES. IN THIS REGARD IN CO MPARABLE CIRCUMSTANCES AS PER THE ASSESSEES AR THE TRIBUNAL HELD THAT THE ADD ITIONS CANNOT BE MADE IN THE HANDS OF THE ASSESSEE WHEN THE SAME WERE NOT OWN ED BY THE ASSESSEE AND WHEN CORROBORATIVE EVIDENCE WAS AVAILABLE TO SUGGEST THAT THE DEPOSITS BELONGED TO OTHER PERSONS. FOR THIS PURPOSES THE LEARNED COUNS EL RELIED ON THE ORDER OF PUNE BENCH IN THE CASE OF LATE MR. BRIJMOHAN BANSAL ( ITA NO. 1365/PN/2006 FOR THE BLOCK PERIOD 1997-98 TO 20023-04) ORDER DATED 30- 06-2008. IN THIS REGARD THE LEARNED COUNSEL EAD OUT THE RELEVANT PORTION FROM PARA 9 ONWARDS. FURTHER THE LEARNED COUNSEL ALSO MENTIONED THAT IN A COMPARA BLE CASE I.E. LATE MR. LAKHPATRAI AGARWAL (ITA NO. 1138/.PN/2005 FOR THE BLO CK PERIOD 1-4-1996 TO 13- 8-2001 ORDER DATED 18-02-2010) THE TRIBUNAL SET ASIDE THE ISSUE FOR WANT OF CROSS EXAMINATION OF THE WITNESSES. HOWEVER HE MENTI ONED THERE IS NO SUCH REQUIREMENT IN THE INSTANT CASE AS THE CROSS EXAMINATI ON WAS ALREADY OFFERED IN THIS CASE. FURTHER THE LEARNED COUNSEL MENTIONED THAT IN THE INSTANT CASE THE ADDITIONS ON ACCOUNT OF FIXED DEPOSITS WERE MADE MERE LY FOR THE REASON THAT THE ASSESSEE IS A DIRECTOR OF THE BANK AND AO MUST HAVE A SKED THE BANK TO EXPLAIN THE SOURCE OF THE IMPUGNED FIXED DEPOSITS WHERE THE FIXED DEPOSIT RECEIPTS WERE ACTUALLY FOUND. FURTHER HE MENTIONED THAT THE S AID AMOUNTS WERE ACTUALLY TAXED BOTH IN THE NAMES OF THE BANK AND THE ASSESSE E AND THEREFORE IT IS THE CASE OF DOUBLE ADDITION AND SUCH TAXATION IS AGAINS T THE SETTLED PRINCIPLES OF TAXATION. ON THE OTHER HAND THE LEARNED DR FOR THE REVENUE ARGU ED STATING THAT THE ASSESSEE IS RESPONSIBLE PERSON SO FAR AS THE BANKING A CTIVITIES ARE CONCERNED AS HE IS THE DIRECTOR OF THE BANK. SO FAR AS THE ADDITION OF RS. 2 00 000/- IS CONCERNED THERE ARE 14 PERSONS INVOLVED AND THE ASSESS EE FAILED TO BRING THE ITA NO.1170/PN/05 VINODKUMAR BANSAL BLOCK PERIOD: 1-4-96 TO 5-9-02 PAGE 3 OF 3 PARTIES TO ESTABLISH THAT THE SAID AMOUNT DOES NOT B ELONG TO HIM AND THEY BELONG TO THE NAMES APPEARING ON THE RECEIPTS. IT IS FOR THE ASSESSEE OR THE AGRASEN URBAN CO-OP. BANK LTD. TO ESTABLISH THAT THE FIXED DEPOSITS DO NOT BELONG TO EITHER OF THEM. IN THE ABSENCE OF DISCHARGE OF ONUS SATISFACTORILY THE ADDITIONS HAVE TO BE MADE IN THE HANDS OF RIGHT PERSON. IN THE ABSENCE OF ANY CONCLUSIVE EVIDENCE THAT THE IMPUGNED FDRS DO NOT BELONG TO EI THER OF THEM AO HAS RIGHTLY TAXED IN THE NAME OF THE DIRECTOR. AS PER THE LEARNED D R NO ATTEMPTS WERE MADE BY THE DIRECTOR OR BANK TO PIN-POINTEDLY IDENTIFY (1) THE CORRECT PERSON WHO OWNS THE FIXED DEPOSIT RECEIPTS (II) NEITHER THE AS SESSEE NOR THE BANK IS THE CORRECT PERSON FOR TAXING THE SAID FIXED DEPOSIT AMOUNT . 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF REVENUE. THE CORE ISSUE UNDER CONSIDERATION IS THE OWNERSHIP OF FIXE D DEPOSIT RECEIPTS INVOLVING THE AMOUNTS OF RS. 2 00 000/- AND RS. 17 40 197/- AND IF THE ASSESSEE OF THE BANK WHERE HE IS THE DIRECTOR HAVE DISCHARGED ONUS SATISFACTORILY. ON PERUSAL OF FACTS WE FIND THAT THE IMPUGNED RECEIPTS WERE FOUND IN THE POSSESSION OF THE BANK WHERE THE ASSESSEE IS A DIREC TOR. BOTH BANK AND THE ASSESSEE FAILED TO SUPPLY THE NAMES AND ADDRESSES OF THE PERSONS WHO ACTUALLY OWN THE AMOUNTS. CONSIDERING THE FACT THAT IT IS TH E CASE OF SEARCH AND THE DOCUMENTS WERE SEIZED FROM THE POSSESSION OF THE BANK RUN BY THE DIRECTOR THE RESPONSIBILITY LARGELY LIES ON THE ASSESSEE OR THE BAN K TO DEMONSTRATE THAT THE OWNERSHIP OF IMPUGNED FIXED DEPOSIT RECEIPTS IS NOT WITH THEM. IN THIS REGARD THE ASSESSEE OR THE BANK MAY HAVE TO DEMONSTRATE THAT THEY ARE NOT THE OWNERS OF THE AMOUNTS AND SOMEBODY ELSE IS THE OWNER OF THE AMOUNTS. FROM THE ONUS POINT OF VIEW IT IS FOR THEM TO DEMONSTRATE WHO ARE T HE ACTUAL OWNERS OF THE FDRS. THEN ONLY IT AMOUNTS TO DEMONSTRATION OF PRO PER DISCHARGE OF THE ONUS. TILL THEN THE ASSESSEE OR/AND THE BANK ARE NOT FREE FROM THIS RESPONSIBILITY AND OF COURSE THE A.O IS FREE IN HOLDING THEM RESPONSIBLE . IN THIS CASE IN OUR OPINION CORRECT FACTS ARE NOT BROUGHT ON RECORD BY THE A SSESSEE TO DEMONSTRATE THAT WHO OWNS THESE FIXED DEPOSIT RECEIPTS AND THE SOURCES THEREOF. CONSIDERING THE ABOVE WE ARE OF THE OPINION THAT THE MATTER HAS TO BE SET ASIDE TO THE FILE OF A.O FOR DOING INVESTIGATION AFRESH ON BOTH THE AMOUNTS OF RS. 2 00 000/- AND RS. 14 70 197/- RESPECTIVELY. THE AS SESSEE IS DIRECTED TO FILE REQUISITE FACTS RELATING TO THE OWNERSHIP OF THE FIXED DEPOSIT RECEIPTS. IN OUR OPINION BEING THE DIRECTOR OF THE BANK HE CANNOT D ISCONNECT HIMSELF FROM THE BANKING ACTIVITIES BY SAYING THAT IT IS FOR THE BANK TO DEMONSTRATE THE OWNERSHIP OF THE FIXED DEPOSIT RECEIPTS AND IT IS FOR THE REASO NS THAT THE DIRECTORS ARE REGULARLY CONNECTED TO THE BUSINESS OF THE BANK AND I T SHOULD IN THE NORMAL ITA NO.1170/PN/05 VINODKUMAR BANSAL BLOCK PERIOD: 1-4-96 TO 5-9-02 PAGE 4 OF 3 COURSE OF BUSINESS ACTIVITIES THAT DIRECTOR MUST BE PRI VY TO THE INFORMATION AT LEAST THOSE INVOLVING LARGER OR SUCH CONTROVERSIAL OR F ICTITIOUS TRANSACTIONS SUCH AS IMPUGNED FIXED DEPOSIT RECEIPTS. ASSESSEE IS ALSO D IRECTED THE FILE THE COPIES OF THE CITED DECISIONS OF THE TRIBUNAL FOR SUPPORTING HIS ARGUMENTS. AO SHALL CONSIDER THE SAID DECISION WHILE ADJUDICATING THE IS SUE. HE SHALL CONSIDER THE DECISION OF THE TRIBUNAL IF ANY INVOLVING THE APPEAL BY THE IMPUGNED COOPERATIVE BANK. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE SET ASIDE . 5. IN THE RESULT THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH FEBRUARY 2011. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 28 TH FEBRUARY 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ITO WARD 3(1) NANDED 2. ASSESSEE 3. CIT(A)-I PUNE 4. CIT PUNE 5. DR ITAT B BENCH PUNE BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE