ITO, New Delhi v. Sh. Bhupinder Pal Singh Chawla, New Delhi

ITA 4080/DEL/2010 | 2005-2006
Pronouncement Date: 25-02-2011 | Result: Dismissed

Appeal Details

RSA Number 408020114 RSA 2010
Assessee PAN AAUPS1944B
Bench Delhi
Appeal Number ITA 4080/DEL/2010
Duration Of Justice 5 month(s) 22 day(s)
Appellant ITO, New Delhi
Respondent Sh. Bhupinder Pal Singh Chawla, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-02-2011
Date Of Final Hearing 17-02-2011
Next Hearing Date 17-02-2011
Assessment Year 2005-2006
Appeal Filed On 03-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO. 4080/DEL/2010 ASSESSMENT YEAR: 2005-06 ITO VS. SH. BHUPINDER PAL SINGH CHAWLA WARD 32(1) F-7 7A/42 WEA KAROL BAGH NEW DELHI. NEW DELHI. AAUPS1944B (APPELLANT) (RESPONDENT) APPELLANT BY : MS. ANUSHA KHURANA SR. DR RESPONDENT BY : S.P. A GARWAL CA ORDER PER I.P. BANSAL J.M. : THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER PASSED BY LD. CIT(A) DATED 14.6.10 FOR A.Y. 2005-06 . GROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 8 64 000/- MA DE BY THE AO U/S 68 OF THE INCOME TAX ACT 1961 BEING UNEXPLAINED CA SH DEPOSITS IN BANK ACCOUNT. 2. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE AO DID NOT HAVE ANY SPECIFIC EVIDENCE INSPITE OF THE FACT THAT THE AO H AD GIVEN CATEGORICAL FINDING IN HIS ORDER WHEREIN SOME CASH DEPOSITS WER E ACCEPTED AS EXPLAINED AND ADDITION WAS MADE ONLY IN RESPECT OF UNEXPLAINED CASH DEPOSITS IN VIEW OF THE STRONG CIRCUMSTANTIAL EVIDENCE. 3. THE LD. CIT(A) HAS ERRED IN GRANTING RELIEF TO T HE ASSESSEE INSPITE OF THE FACT THAT THE ASSESSEE HAD NOT BEEN ABLE TO EXP LAIN THE SOURCE OF ITA NO. 4080/D/10 2 CASH DEPOSITS TO THE SATISFACTION OF THE AO AND IN VIEW OF THE JUDGMENTS OF HONBLE SUPREME COURT IN THE CASES OF SUMATI DAYAL V. CIT (SC) 214 ITR 801 AND SREELEKHA BANERJEE & ORS. V. CIT (SC) 49 ITR 112 THE BURDEN OF PROOF TO EXPLAIN THE SOUR CE OF CASH DEPOSITS SATISFACTORILY RESTED ON THE ASSESSEE. 4. THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. 2. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF DEPOSIT OF RS. 8 64 000/- MADE IN THE BANK ACCOUNT OF THE ASSESSEE ON 6.11.04. IN RESPONSE TH E ASSESSEE SUBMITTED THAT A SUM OF RS. 10 LAKH WAS WITHDRAWN FROM THE SA ID BANK ACCOUNT IN CASH ON 11.3.04 OUT OF WHICH THE SAID DEPOSITS IN THE BA NK ACCOUNT WAS MADE. IT WAS SUBMITTED THAT ASSESSEE AND HIS FAMILY IS ENGAG ED IN THE BUSINESS OF REAL ESTATE AND ALSO OWNS NUMBER OF PROPERTIES INHE RITED BY THEM. IT WAS SUBMITTED THAT SINCE THOSE PROPERTIES WERE VERY OLD THE ASSESSEE WAS PLANNING TO RENOVATE THEM. FUNDS WERE NEEDED TO BI D VARIOUS PROPERTIES AUCTIONED BY THE GOVERNMENT OR PRIVATE INSTITUTIONS THAT IS WHY ASSESSEE HAD KEPT THE SAID FUND WITH HIM. HOWEVER THE AO T REATED THE SAID AMOUNT OF RS. 8 64 000/- AS UNEXPLAINED DEPOSIT IN THE BAN K ACCOUNT OF THE ASSESSEE AND THE SAME WAS ADDED TO THE INCOME OF TH E ASSESSEE. BEFORE CIT(A) IT WAS SUBMITTED THAT OUT OF THE SAID WITHD RAWAL OF RS. 10 LAKH AN AMOUNT OF RS. 8 75 000/- WAS ADVANCED TO ONE SH. AS HOK KUMAR SACHDEVA WHO WAS GIVEN THE CONTRACT TO DEMOLISH AND CONSTRUC T THE BUILDING STRUCTURE OF THE PROPERTY AT C-9/14 KRISHNA NAGAR SHAHDRA NEW DELHI. HOWEVER ITA NO. 4080/D/10 3 SINCE THE SAID CONTRACTOR COULD NOT CARRY OUT THE W ORK THE AMOUNT WAS REFUNDED BACK BY THE SAID CONTRACTOR TO THE ASSESSE E IN OCTOBER 2004 WHICH WAS DEPOSITED IN THE SAVING BANK ACCOUNT. TO SUPPORT AN AFFIDAVIT AFFIRMED ON OATH BY SAID SH. ASHOK KUMAR SACHDEVA W AS ALSO FILED IN WHICH HE ADMITTED THE FACT OF HAVING TAKEN ADVANCE OF RS. 8 75 000/- WHICH WAS REFUNDED BACK TO THE ASSESSEE. IT WAS SUBMITTED TH AT THERE WERE OTHER DEPOSITS ALSO IN THE MONTH OF APRIL 2004 AGGREGATI NG TO SUM OF RS. 1 33 000/- WHICH WAS ACCEPTED BY THE AO FROM THE VE RY SOURCE I.E. WITHDRAWAL OF RS. 10 LAKH. RELIANCE WAS MADE ON TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. P. MOHAN KALA 2 91 ITR 278 TO CONTEND THAT EVEN THE REJECTION OF THE EXPLANATION OFFERED BY THE ASSESSEE AS UNACCEPTABLE BY ITSELF CANNOT BE A REASON FOR MAKIN G THE ADDITION. CONSIDERING THESE SUBMISSIONS LD. CIT(A) HAS OBSER VED THAT FROM THE PERUSAL OF CASH FLOW STATEMENT PRODUCED BEFORE HIM HE FOUND THAT AO DID NOT HAVE ANY SPECIFIC EVIDENCE WHATSOEVER TO CHALL ENGE THE CASH FLOW STATEMENT OF THE ASSESSEE IN SUPPORT OF THE CONTENT ION THAT WITHDRAWAL OF RS. 10 LAKH IN MARCH 2004 WAS THE SOURCE OF CASH D EPOSIT OF RS. 8 64 000/- IN APRIL 2004 (WRONGLY WRITTEN AS APRIL 2004 WHE REAS IT SHOULD BE NOVEMBER 2004). LD. CIT(A) FURTHER OBSERVED THAT AO HAS MADE NO ATTEMPT TO WORK OUT HOUSEHOLD WITHDRAWALS OR INVEST MENT POSSIBILITIES OF ALTERNATIVE INVESTMENT OF SUCH CASH WITHDRAWAL MADE BY THE ASSESSEE AND THUS WAS DEPENDENT ONLY IN A VAGUE AND UNSUBSTANTI ATED OBSERVATION THAT HUGE AMOUNT HAVE REMAINED IDLE WITH THE ASSESSEE. THEREFORE LD. CIT(A) HAS HELD THAT SUCH AN UNSUBSTANTIATED OBSERVATION C ANNOT CHANGE THE ITA NO. 4080/D/10 4 NATURE OF CASH DEPOSIT IN SUCH A WAY THAT IT COULD BE TREATED AS INCOME OF THE ASSESSEE AS THE SAME WAS ASSESSEES OWN MONEY W ITHDRAWN EARLIER. IN THIS MANNER LD. CIT(A) HAS DELETED THE ADDITION. THE REVENUE IS AGGRIEVED HENCE IN APPEAL. 3. AFTER NARRATING THE FACTS LD. DR RELYING UPON T HE ORDER OF AO HAS PLEADED THAT ADDITION WAS RIGHTLY MADE BY THE AO AS ASSESSEE COULD NOT GIVE PLAUSIBLE EXPLANATION REGARDING DEPOSIT OF THE SAID AMOUNT IN HIS BANK ACCOUNT. SHE SUBMITTED THAT LD. CIT(A) HAS WRONGLY ACCEPTED THE CLAIM OF THE ASSESSEE AS THERE WAS A CONSIDERABLE GAP IN THE WITHDRAWAL MADE AND AMOUNT DEPOSITED IN THE BANK ACCOUNT. 4. ON THE OTHER HAND IT WAS SUBMITTED BY LD. AR TH AT SIMPLY THE FACT THAT THERE WAS A LONG GAP IN THE WITHDRAWAL AND THE DEPO SIT MADE CANNOT BE BASIS FOR MAKING SUCH ADDITION. HE SUBMITTED THAT UNLESS DEPARTMENT ESTABLISHES THAT THE CONTENTION OF THE ASSESSEE WAS INCORRECT SUCH ADDITION COULD NOT BE MADE. TO SUPPORT SUCH CONTENTION LD. AR RELIED UPON THE DECISION OF DELHI BENCHES IN THE CASE OF ACIT VS. B ALDEV RAJ CHARLA AND OTHRS. 121 TTJ (DEL.) 366 WHEREIN IT WAS HELD BY T HE TRIBUNAL THAT THERE BEING NO MATERIAL WITH THE I.T. AUTHORITIES TO SHOW THAT THE AMOUNTS OF CASH DEPOSITS IN QUESTION ADMITTEDLY WITHDRAWN FROM BAN K AND ASSESSEES CONCERN WERE UTILIZED FOR ANY OTHER PURPOSE NO AD DITION COULD BE MADE ONLY ON THE GROUND THAT THERE WAS TIME GAP BETWEEN THE WITHDRAWALS AND THE CORRESPONDING CASH DEPOSIT. HE SUBMITTED THAT THE CASE OF THE ITA NO. 4080/D/10 5 ASSESSEE IS ON BETTER FOOTING AS THE ASSESSEE HAD A DDUCED THE EVIDENCE THAT THE IMPUGNED AMOUNT WAS RECEIVED BACK BY THE A SSESSEE FROM A CONTRACTOR TO WHOM IT WAS GIVEN FOR RENOVATION OF T HE PROPERTY OWNED BY THE ASSESEE AFTER WITHDRAWING THE SAME FROM THE BANK AN D THE CONTRACTOR HAS CONFIRMED THESE FACTS BY WAY OF AN AFFIDAVIT. THUS HE PLEADED THAT THE ADDITION HAS RIGHTLY BEEN DELETED BY LD. CIT(A) AND HIS ORDER SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THOUGH THERE IS A CONTR ADICTION IN THE ASSESSMENT ORDER AND THE ORDER PASSED BY LD. CIT(A) . A BARE READING OF ASSESSMENT ORDER WILL REVEAL THAT THE ASSESSEE DID NOT TAKE THE PLEA REGARDING AMOUNT HAVING BEEN GIVEN TO THE CONTRACTO R BY SPECIFICALLY MENTIONING THE NAME OF SH. ASHOK KUMAR SACHDEVA TO WHOM THE MONEY WAS STATED TO BE GIVEN DURING THE COURSE OF APPELLA TE PROCEEDING BEFORE CIT(A). HOWEVER AS IT CAN BE SEEN FROM GROUNDS OF APPEAL IT IS NOT THE CASE OF REVENUE THAT LD. CIT(A) HAS TAKEN INTO CONS IDERATION CERTAIN ADDITIONAL EVIDENCES WHILE DELETING THE ADDITION. THEREFORE NOT GOING INTO THE QUESTION THAT WHETHER OR NOT THIS PLEA WAS TAKE N BY THE ASSESSEE BEFORE AO WE PROCEED TO DECIDE THE PRESENT APPEAL ACCORDIN G TO THE FACTS OBTAINED FROM THE ASSESSMENT ORDER AND THE ORDER OF CIT(A). AN AFFIDAVIT HAS BEEN FILED BY THE ASSESSEE FROM THE CONTRACTOR WHEREIN THE FACT OF AMOUNT HAVING GIVEN TO HIM AND AMOUNT REFUNDED BACK BY HIM HAVE B EEN STATED AND RELYING UPON THAT AFFIDAVIT AND ALSO GOING THROUGH THE CASH FLOW STATEMENT LD. ITA NO. 4080/D/10 6 CIT(A) HAS ARRIVED AT A FINDING THAT THE SOURCE OF THE SAID DEPOSIT OF RS. 8 64 000/- IS THE AMOUNT GIVEN BY THE ASSESSEE TO T HE SAID CONTRACTOR FOR THE RENOVATION WORK OF AFOREMENTIONED PROPERTY. NONE O F THESE FACTS HAVE BEEN CONTROVERTED BY THE REVENUE. IF IT IS SO AND THE GAP BETWEEN THE WITHDRAWAL AND DEPOSIT OF AMOUNT HAVE BEEN EXPLAINE D BY THE ASSESSEE THEN IN OUR OPINION THERE IS NO INFIRMITY IN THE OR DER OF CIT(A) VIDE WHICH THE IMPUGNED ADDITION HAS BEEN DELETED ON THE GROUND TH AT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE SOURCE OF SAID DEPOSIT WHI CH REPRESENTS EARLIER WITHDRAWAL BY THE ASSESSEE. THEREFORE WE DECLINE TO INTERFERE IN THE DELETION MADE BY LD. CIT(A) AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.2.11 (A.K. GARODIA) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER * KAVITA DATED: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT