Sri Ramappa Chandru, Bangalore v. Deputy Commissioner of Income TAx Central Circle-2(4), Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE JUDICIAL MEMBER M.P. NOS. 307 317 TO 322/BANG/2018 (IN ITA NO S . 2013 TO 2019 / BANG/201 7 ) ASSESSMENT YEAR S : 2009 - 10 TO 2015 - 16 SRI RAMAPPA CHANDRU AHUJA CHAMBERS # 204 II FLOOR # 1 KUMARA KRUPA ROAD BANGALORE 560 001. PAN: ACHPC6860H VS. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 [4] BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI V. SRINIVASAN ADVOCATE REVENUE BY : SMT. R. PREMI JCIT (DR) DATE OF HEARING : 15 . 1 1 .2019 DATE OF PRONOUNCEMENT : 28 . 1 1 .2019 O R D E R PER SHRI A.K. GARODIA ACCOUNTANT MEMBER THESE M.PS. ARE FILED BY THE ASSESSEE CONTENDING THAT THERE ARE CERTAIN APPARENT MISTAKES IN THE IMPUGNED COMBINED TRIBUNAL ORDER. 2. IN COURSE OF HEARING IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ONLY PARA NOS. 3 AND 3.1 TO 3.8 OF THE M.P. SHOULD BE CONSIDERED AND DECIDED AND THE REMAINING PARAS OF THIS M.P. ARE NOT PRESSED IN VIEW OF ADMISSION OF SUBSTANTIAL QUESTION OF LAW BY HONBLE KARNATAKA HIGH COURT. HENCE WE REPRODUCE IDENTICAL PARAS 3 AND 3.1 TO 3.8 OF THESE M.PS. THESE ARE AS UNDER. 3. IN THE AFORESAID COMMON ORDER [ANNEXURE-1] THE FIRST MISTAKE APPARENT ON RECORD IS WITH REGARD TO THE ADDITIONS OF RS. 1 20 60 000/- A RS. 68 99 400/-THAT WERE CHALLENGED IN GROUNDS NO 3 ET 3.1 FOR BOTH THE ASSESSMENT YEAR 200910 AND 2010-11. THE PETITIONER AMONG OTHERS HAD CHALLENGED THESE ADDITIONS BEING THE AGGREGATE OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE PETITIONER THAT WAS REGARDED AS UNDISCLOSED INCOME ON THE GROUND THAT THEY WERE NOT BASED ON ANY INCRIMINATING MATERIAL AS WELL AS AVAILABILITY OF CASH WITHDRAWALS TO EXPLAIN THE DEPOSITS MADE. THE GROUNDS RAISED BY THE PETITIONER ON THIS ISSUE FOR M.P. NOS. 307 317 TO 322/BANG/2018 (IN ITA NOS. 2013 TO 2019/BANG/2017) PAGE 2 OF 5 BOTH THESE ASSESSMENT YEARS ARE BEING RE-PRODUCED HEREUNDER FOR THE SAKE OF FACILITY AS UNDER: 'ASSESSMENT YEAR 2009-10: 3. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CITI-A] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 1 20 60 000/- BEING THE AGGREGATE CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT WHICH WAS NOT AN INCRIMINATING SEIZED MATERIAL AT ALL BUT ONE OBTAINED FROM THE BANK IN THE POST SEARCH PROCEEDINGS OUT OF THE EARLIER WITHDRAWALS MADE FROM THE VERY SAME BANK ACCOUNT BY REJECTING THE EXPLANATION ON MOST UNSUSTAINABLE GROUNDS WHICH IS PURELY OUT OF SUSPICION AND SURMISE AND CONSEQUENTLY THE ADDITION MADE REQUIRES TO BE DELETED. 3.1 THE LEARNED CIT[A] FAILED TO APPRECIATE THE FACT THAT THE INCOME REPORTED BY THE APPELLANT ON ESTIMATE BASIS ITSELF WAS RS.2 04 96 539/- WHICH WAS FAR GREATER THAN THE EXTENT OF DEPOSITS OF RS.1 20 60 000/- DRAWN FROM THE VERY SAME BANK ACCOUNT AND THE SOURCE BY WAY OF SUCH WITHDRAWALS WAS TO MAKE THE DEPOSITS FULLY SUBSTANTIATED AND SELF-MANIFEST WHICH WAS NOT DISPUTED AT ALL AND CONSEQUENTLY THE ADDITION MADE REQUIRES TO BE DELETED. ASSESSMENT YEAR 2010-11: 3. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED C1TIA] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 68 99 500/- BEING THE AGGREGATE CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT WHICH WAS NOT AN INCRIMINATING SEIZED MATERIAL AT ALL BUT ONE OBTAINED FROM THE BANK IN THE POST SEARCH PROCEEDINGS OUT OF THE EARLIER WITHDRAWALS MADE FROM THE VERY SAME BANK ACCOUNT BY REJECTING THE EXPLANATION ON MOST UNSUSTAINABLE GROUNDS WHICH IS PURELY OUT OF SUSPICION AND SURMISE AND CONSEQUENTLY THE ADDITION MADE REQUIRES TO BE DELETED. 3.1 THE LEARNED CIT[A] FAILED TO APPRECIATE THE FACT THAT THE INCOME REPORTED BY THE APPELLANT ON ESTIMATE BASIS ITSELF WAS RS.4 37 45 474/ - WHICH WAS FAR GREATER THAN THE EXTENT OF DEPOSITS OF RS.68 99 500/- DRAWN FROM THE VERY SAME BANK ACCOUNT AND THE SOURCE BY WAY OF SUCH WITHDRAWALS WAS TO MAKE THE DEPOSITS FULLY SUBSTANTIATED AND SELF-MANIFEST WHICH WAS NOT DISPUTED AT ALL AND CONSEQUENTLY THE ADDITION MADE REQUIRES TO BE DELETED'. 3.1 THE HON'BLE ITAT AFTER CONSIDERING THE SUBMISSIONS ARGUMENTS AND DOCUMENTS FURNISHED HELD AT PARAS [10 ET 11] OF ITS ORDER AS UNDER :- '10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON THIS ISSUE FOR THESE TWO YEARS THE DECISION OF CIT[A] IS CONTAINED IN PARA NO.9.2 OF HIS ORDER WHICH IS REPRODUCED HEREIN BELOW FOR THE SAKE OF READY REFERENCE. '9.2 I HAVE CONSIDERED THE SUBMISSIONS AND MATERIALS ON RECORD. THE APPELLANT HAS BASICALLY CONTENDED THAT THE CASH DEPOSITS IN THE BANK ACCOUNTS ARE MADE OUT OF EARLIER CASH WITHDRAWALS. HOWEVER THE APPELLANT HAS NOT EXPLAINED AS TO WHY THERE WERE WITHDRAWALS AND CASH DEPOSITS MADE IN THE BANK ACCOUNT FOR THE M.P. NOS. 307 317 TO 322/BANG/2018 (IN ITA NOS. 2013 TO 2019/BANG/2017) PAGE 3 OF 5 ASSESSMENT YEARS 2009-10 AND 2010-11 OF RS.1 20 00 000/ - AND RS.68 99 500/- RESPECTIVELY U/S.69 OF THE ACT THE APPELLANT IS REQUIRED TO GIVE DOCUMENTARY EVIDENCE SUBSTANTIATING THE SAME WHICH HAS NOT BEEN DONE BEFORE THE A.O. OR BEFORE ME. HENCE I DO NOT INTERFERE IN THE ACTION OF THE A.O. AND SUSTAIN THE SAID ADDITIONS MADE FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11'. 11. FROM THE ABOVE PARA REPRODUCED FROM THE ORDER OF CJT[A] IT IS SEEN THAT AS PER THE CL71ARS FINDINGS NO DOCUMENTARY EVIDENCE WAS SUBMITTED BY ASSESSEE BEFORE AO OR CITI-A] IN SUPPORT OF THIS CONTENTION THAT THERE WAS EARLIER CASH WITHDRAWAL. HENCE WE FEEL IT PROPER TO RESTORE THIS MATTER BACK TO THE FILE OF CIT1A] FOR FRESH DECISION ON THIS ISSUE ON THIS ASPECT IN THESE TWO YEARS I.E. ASSESSMENT YEARS 2009-10 AND 2010-11 AND IF IT IS FOUND THAT CASH DEPOSIT IN BANK IN THESE TWO YEARS STANDS EXPLAINED BY EARLIER CASH WITHDRAWAL THEN THE ADDITION MADE BY THE AO IN THESE TWO YEARS SHOULD BE DELETED'. 3.2 IT IS FIRSTLY SUBMITTED THAT THE HON'BLE BENCH HAS NOT CONSIDERED AND DISPOSED OFF THE GROUND TAKEN BY THE APPELLANT THAT THESE ADDITIONS MADE IN THE ASSESSMENT PROCEEDINGS U/S. 153A OF THE ACT WERE ERRONEOUS SINCE THEY WERE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. FOR THIS PROPOSITION THE APPELLANT HAD RELIED UPON THE DECISION OF THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF LANCY CONSTRUCTIONS REPORTED IN 383 ITR 168 [KAR] AND IBC KNOWLEDGE PARK LIMITED REPORTED IN 385 ITR 346 [KAR] ON THE SCOPE OF THE ASSESSMENT THAT HAD NOT ABATED ON THE DATE OF SEARCH. HOWEVER THE HON'BLE BENCH HAS NOT NOTICED THESE ARGUMENTS AND HAS NOT RECORDED ANY FINDING ON THIS ASPECT OF THE MATTER URGED AND THE FAILURE OF THE HON'BLE BENCH TO ADJUDICATE THE SAID GROUND CONSTITUTES A MISTAKE APPARENT ON RECORD WARRANTING RECTIFICATION. 3.3 IN VIEW OF THE ABOVE IT IS SUBMITTED THAT THE AFORESAID ADDITIONS MADE FOR THE ASSESSMENT YEAR 2009-10 AND 2010-11 REQUIRE TO BE DELETED SINCE THE SAME ARE NOT BASED ON ANY INCRIMINATING MATERIALS FOUND IN COURSE OF SEARCH AND SINCE THESE ASSESSMENTS HAD NOT ABATED ON THE DATE OF SEARCH NO ADDITION IN RESPECT OF THE SAME CAN BE MADE IN PROCEEDINGS U/S. 153A OF THE ACT. IT IS PRAYED ACCORDINGLY. 3.4 SECONDLY AND WITHOUT PREJUDICE TO THE ABOVE IT WAS ALSO SUBMITTED THAT THE LEARNED CIT[A] DISMISSED THE GROUNDS RAISED BEFORE HIM ON THE GROUND THAT NO DOCUMENTARY EVIDENCE SUBSTANTIATING THE NEED FOR CASH WITHDRAWALS AND DEPOSITS WERE FILED BEFORE THE A.O. THE LEARNED CIT[A] HAD NOTED THAT THE APPELLANT HAD CLAIMED THAT THESE CASH DEPOSITS WERE OUT OF EARLIER WITHDRAWALS AND IN SUPPORT OF THE SAME A STATEMENT SHOWING THE EXTENT OF CASH WITHDRAWALS WAS ALSO FILED. IT WAS CONTENDED BEFORE THE HON'BLE BENCH THAT THESE CASH DEPOSITS MADE IN THE BANK ACCOUNTS WERE FROM OUT OF EARLIER CASH WITHDRAWALS AND THEREUPON THE HON'BLE BENCH OBSERVED THAT THE AVAILABILITY OF CASH WITHDRAWALS HAS TO BE VERIFIED BY THE LOWER AUTHORITIES SINCE THEY HAD M.P. NOS. 307 317 TO 322/BANG/2018 (IN ITA NOS. 2013 TO 2019/BANG/2017) PAGE 4 OF 5 NOT ACCEPTED THE EXPLANATION OF THE APPELLANT AND THUS HAD NOT VERIFIED THE EXTENT OF CASH AVAILABLE FROM EARLIER WITHDRAWALS THAT WAS AVAILABLE FOR BEING RE-DEPOSITED AND HENCE THE MATTER WAS TO BE REQUIRED TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR CARRYING OUT THE FACTUAL VERIFICATION. 3.5 THEREUPON THE RELATED BANK ACCOUNTS ALONG WITH THE STATEMENT FILED BEFORE THE LEARNED CIT[A] WAS FILED BEFORE THE HON'BLE BENCH AT PAGES 42 TO 74 OF THE MEMO DATED 13/02/2018 IN RESPECT OF THE CASH DEPOSITS MADE FOR THE ASSESSMENT YEAR 2009-10 AND AT PAGES 75 TO 106 OF THE MEMO IN RESPECT OF THE CASH DEPOSITS MADE FOR THE ASSESSMENT YEAR 2010-11. 3.6 HOWEVER ULTIMATELY IN THE ORDER OF THE HON'BLE BENCH DATED 06/04/2018 THE HON'BLE BENCH HAS RESTORED THE MATTER BACK TO THE FILE OF THE CIT[A] FOR FRESH DECISION ON THIS ISSUE. 3.7 IT IS SUBMITTED THAT THE FACTUAL VERIFICATION OF THE EXTENT OF CASH WITHDRAWALS AVAILABLE FOR MAKING THE SUBSEQUENT CASH DEPOSITS HAS TO BE MADE BY THE LEARNED A.O. AND THE REMAND OF THE MATTER TO THE FILE OF THE LEARNED CIT[A] WOULD CONSTITUTE A MISTAKE APPARENT ON RECORD SINCE THE LEARNED CIT[A] ALSO HAVE TO DEPEND UPON THE LEARNED A.O. FOR CARRYING OUT THE SAID FACTUAL EXERCISE AND THERE WOULD BE MULTIPLICITY OF THE PROCEEDINGS. 3.8 IN VIEW OF THE ABOVE IT IS RESPECTFULLY PRAYED THAT THE AFORESAID DIRECTIONS ISSUED BY THE HON'BLE BENCH BE MODIFIED BY DIRECTING THE LEARNED A.O. TO EXAMINE THE STATEMENT OF CASH WITHDRAWALS PREPARED AND FILED BY THE APPELLANT AND THEREAFTER TO DECIDE THE MATTER AS PER THE DIRECTIONS CONTAINED IN THE ORDER OF THE HON'BLE BENCH DATED 06/04/2018. 3. THE LD. DR OF REVENUE SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL WE REPRODUCE PARA NO. 11 OF THE IMPUGNED TRIBUNAL ORDER AS PER WHICH THE ISSUE WAS RESTORED BACK TO THE FILE OF LD. CIT(A) FOR FRESH DECISION. 11. FROM THE ABOVE PARA REPRODUCED FROM THE ORDER OF CIT(A) IT IS SEEN THAT AS PER THE CIT(A)S FINDINGS NO DOCUMENTARY EVIDENCE WAS SUBMITTED BY ASSESSEE BEFORE THE AO OR CIT(A) IN SUPPORT OF THIS CONTENTION THAT THERE WAS EARLIER CASH WITHDRAWAL. HENCE WE FEEL IT PROPER TO RESTORE THIS MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION ON THIS ISSUE ON THIS ASPECT IN THESE TWO YEARS I.E. ASSESSMENT YEARS 2009-10 AND 2010-11 AND IF IT IS FOUND THAT CASH DEPOSIT IN BANK IN THESE TWO YEARS STANDS EXPLAINED BY EARLIER CASH WITHDRAWAL THEN THE ADDITION MADE BY THE AO IN THESE TWO YEARS SHOULD BE DELETED. M.P. NOS. 307 317 TO 322/BANG/2018 (IN ITA NOS. 2013 TO 2019/BANG/2017) PAGE 5 OF 5 5. AS PER PARA NO. 3.7 OF THE M.P. AS REPRODUCED ABOVE THIS IS THE ONLY CLAIM OF THE ASSESSEE THAT INSTEAD OF LD. CIT(A) THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO. WE FIND NO MERIT IN THIS CONTENTION OF ASSESSEE BECAUSE THIS CANNOT BE SAID TO BE AN APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 6. IN THE RESULT ALL THE M.PS. FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 28 TH NOVEMBER 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR ITAT BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE.