Kapil Brij Mohan, Ahmedabad vs Department Of Income Tax

ACIT, Cir.14 Shri Kapil Brij Mohan Ahmedabad. Vs A-803, Mahalaxmi Complex Mahalaxmi Panch Rasta, Paldi Ahmedabad.

PAN: AJWPM 2242 B

अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)

Revenue by : Shri Dinesh Singh, Sr.DR Assessee(s) by : Shri J.M. Trivedi

सन ु वाई क तार ख/ Dateof Hearing : 20/01/2015 घोषणा क तार ख / Date of Pronouncement: 02/02/2015

आदे श/O R D E R

PER N.S. SAINI, ACCOUNTANT MEMBER: This is an appeal filed by

the Revenue against the order of the Commissioner of Income-Tax (Appeals)-XXI, Ahmedabad dated 22.2.2011.

2. The Revenue has taken the following grounds of the appeal:

"1. The ld.CIT(A) has erred in law and on facts in deleting the addition on account of unexplained cash deposits of Rs.11,81,500/- and on account of unexplained loan transactions of Rs.8,04,000/-.

2. The ld.CIT(A) has failed to take into consideration the reasons/grounds on the basis of which, the so called disallowance were made by the AO and as discussed in detail by the AO in the assessment order dated 31.12.2010.

ITA No.1370/Ahd/2011 2 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary."

3. The brief facts of the case are that the AO observed that the assessee has made deposit of Rs.11,81,500/- in his ICICI Bank A/c.No.000701059521 during the year. He required the assessee to explain the source of deposit in the said bank account. In reply to the same, the assessee submitted that on 13.12.2008, the assessee has deposited a cheque of Rs.1,00,000/- received from Kalesh Rathore, and on the same date, the assessee has also deposited cheque received from Tarun Sharma of Rs.3,50,000/-, Indresh Ojha of Rs.26,000/- and Hiren Rabari of Rs.26,000/- and Hiral Soni of Rs.500/-. The assessee has also submitted that he has withdrawn Rs.3,00,000/- on 3.12.2007 and Rs.50,000/- on 8.12.2007 from the said bank for family occasion of his sister's engagement, which did not take place, and so Rs.3,40,000/- was deposited in the bank on 9.2.2008. The AO did not accept the submission of the assessee for the reasons as under:

(a) The assessee is a salaried employee and having bank accounts. He is residing in a city like Ahmedabad and also having credit card which can be of use in cases of emergency or when one is not carrying sufficient cash with him. Also ATM cards are mostly used by those having bank accounts so as to withdraw cash from any of the ATM counters nearby.

(b) It is, therefore, not understood as to why assessee requires so much cash running into lacs at his home. There is no reply to this particular question and no valid reason apparently for which the assessee is resorting to this practice.

(c) The assessee has deposited this much cash in his. bank account an apparently he is not able to explain the source of the same. The reply that the cash was withdrawn early and then deposited in bank when required, does not carry weight in view of no justified reason offered by the assessee.

(d) There is no valid reason for keeping idle money to the tune of lacs of rupees by a person when it can easily and safely kept in a ITA No.1370/Ahd/2011 3

bank or invested in any other asset which will earn some money or appreciation in value

(e) The withdrawals made by the assessee are normally used and the amount is withdrawn only when required and even when deposits are made in bank accounts, there is some valid reasons.

(f) It is also seen that on one side the assessee claims to have so much spare cash with him at any moment and as per so called cash book produced by him, he is having an opening cash balance as on 1.4.2007 of Rs.22,14,232/-and closing balance as on 31.3.2008 of Rs.23,74,032/-. This is simply not possible for any prudent man to keep this much cash idle at home.

Therefore, he added Rs.11,81,500/- to the income of the assessee, as the income from undisclosed sources.

4. Similarly, in the show cause notice, the AO required the assessee to give complete details of the loan given and taken with identity, capacity and genuineness of the transaction. The assessee filed confirmation and PANs of the persons from whom the loan were taken, which are as follows:

"1. I enclosed herewith details of following party confirmation with copy of PAN, which are as under:-

Party Name PAN

Kalpesh Sureshbhai AHQPR5455H Rathod

HIran Rabari AJQPR4663P

Rashmi Desai AKAPD7914L

Indrakumar Ojha AAHOP1488K

Tehas Soni BGEPS6147K

Pratik Darji A3ZPD2193F

Kalpit Patel APUPP6223K ITA No.1370/Ahd/2011 4

(iii) It is, however, noticed that the bank account of the assessee with ICICI Bank A/c No. 000701059521 is showing a different picture as it is observed that there are so many cash deposits in this account of the assessee on various dates in the name of various persons including some of those mentioned by the assessee. The names and amounts are as under:-

Date Name Amount (Rs)

4.4.2007 Tarun Mehta 1,00,000

24.8.2007 Tarun Sharma 1,25,000

17.12.2007 Kalpit/Hiren 3,00,000 -

24.01.2008 Tarun 2,00,000

13.02.2008 Kalpesh Rathod 1,00,000

13.0.22008 Tarun Sharma 4,02,500

14.0.2008 Pratik Darji 26,000

14.2.2008 Sanjay 26,000

14.2.2008 Tejas Soni 26,000

19.2.2008 Niruben Gajjar 26,000

27.3.2008 Neha Sharma 1,00,000

27.3.2008 Archana Sharma 1,10,000

17,27,500

5. The AO observed that when required to give details of the loans taken, the assessee has given details only Shri Tarun Sharma and where he was assessed to tax. For want of complete information, the AO held that the identity, capacity and genuineness of the transaction was not proved by the assessee, which onus, lies on them. He, therefore, held that he has no option, but to treat these deposits as not ITA No.1370/Ahd/2011 5

genuine, and held them to be undisclosed income of the assessee. He observed that the total deposits are of Rs.17,27,500/-, out of which, an amount of Rs.7,27,500/- was in the name of Shri Tarun Sharma, who is assessed to tax is genuine, and the balance amount of Rs.10,00,000/-

was not genuine, and added the same to the income of the assessee.

6. On appeal, the CIT(A) deleted the addition by observing as under:

Unexplained cash deposit Rs.11,81,500/-

The reasons of AO are contained in para 4 on page no.1 to 3 o the assessment order. The reply/submissions of the assessee have been reproduced in assessment order. I have gone through the same.

It can be observed from the details submitted that out of Rs.l1,81,5007- Rs.100000/- deposited on 13.2.08 is by cheque as well as Rs.4,02,500/- deposited on 13.2.08 is also by cheque Rs. 100000/- were received from Shri Kalpesh Rathore thought cheque as well as Rs.4,02,500-- were received by cheque as under.

Shri Tarun Sharma Rs.3,50,000/- Shri Indresh Ojha Rs. 26,000/- Shri Hiren Rabari Rs. 26,000/- Shri Hiren Soni Rs. 500/- ---------------- Rs.4,02,500/- =========

5.1 Thus A.O.'s version that entire Rs.11,81,500/- is by cash

is not acceptable and appears to be without verification of facts or inquiry.

6. The appellant had also produced before A.O.'s cashbook and same is also place on record for the accounting period 1.4.07 to 31.3.08 relevant to Asst. Year 08-09. It can be observed from the same that there was opening cash as on 1.4.07 of Rs.22,14,232/-

. The A.O. has not accepted cash book on filling ground and presumption and not supported his observation/finding on any base. Again it is to be noted that appellant had with drawn cash of Rs.3,00,000/- from bank on 3.12.07 and Rs.50,000/- on 8.12.07 for family occasion of her sister's engagement but as same could ITA No.1370/Ahd/2011 6

not materialize out of said withdraw of Rs.3,50,000/- Rs.3,40,000/- were deposited in Bank on 09.2.08. The reasoning of A.O. for not accepting this transaction are again on presumption and on the premises not taxable in law, without bringing any evidence on record to reject assessee's contention. Whether to use ATM and credit card or not is not choice of department. The remaining amount can reasonably said to be covered in opening balance of cash on 1.4.07 thus I am of the view that without bringing any adequable evidence on record, explanation of appellant cannot be rejected on surmises and presumptions, when these transaction appear in cash book. I am of the view that addition of Rs.11,81,500/- is required to be deleted and I hereby delete the same.

7. Un disclosed income out of loan transaction Rs. 10,00,000/- :-

The A.O.'s observation are in para 5 on page 3 to 5 of assessment order. The assessee's reply is also reproduced in Asst. Order, I have gone through the same.

On page 4 of the Asst. Order, A.O. states that there are loan transaction of Rs.17,27,500/- and according to him" deposits in the name of Tarun Sharma totaling to Rs.7,27,500/- stands explained as he is assessed to tax. The assessee contends that total of amount in the name of Tarun Sharm is of Rs.8,27,500/-. Since at one place A.O. has typed name of Tarum Sharam as Tarun Mehta and hence more relief of Rs.100000/- in the name of Tarun Sharma requires to be given. The explanation of the assessee appears to be reasonable / plausible and hence I direct to delete the addition of Rs.100000/- on this count."

7. Being aggrieved, the Revenue is in appeal before us.

8. Both parties admitted before us that the issues require to be restored back to the file of the AO for proper verification, and thereafter, adjudication afresh. We, therefore, set aside the orders of the lower authorities, and restore the matter back to the file of the AO for fresh adjudication after proper verification by passing a speaking order. Needless to mention, he shall allow reasonable and proper opportunity of hearing to the assessee before adjudicating the issue ITA No.1370/Ahd/2011 7

afresh. These grounds of the appeal of the Revenue are allowed for statistical purpose.

9. In the result, the appeal of the Revenue are allowed for statistical purpose.

Order pronounced in the Court on Monday, the 2nd February, 2015 at Ahmedabad.

Sd/- Sd/- (SHAILENDRA KUMAR YADAV) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 02/02/2015

आदे श क& " त(ल)प अ*े)षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. संबं धत आयकर आयु!त / Concerned CIT

4. आयकर आयु!त(अपील) / The CIT(A)-III, Ahmedabad

5. $वभागीय 'त'न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड- फाईल / Guard file.

ु ार/ BY ORDER, आदे शानस

TRUE COPY

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation- 20.01.2015

2. Date on which the typed draft is placed before the Dictating Member 21.01.2015

3. Date on which the approved draft comes to the Sr.P.S./P.S. -

4. Date on which the fair order is placed before the Dictating Member for Pronouncement ....................

5. Date on which the file goes to the Bench Clerk...... 02/02/2015

6. Date on which the file goes to the Head Clerk..................................

7. The date on which the file goes to the Assistant Registrar for signature on the order..........................

8. Date of Despatch of the Order..................