Ramesh Kumar, Hisar vs Department Of Income Tax

Income Tax Officer, Ward-3, Vs. Sh. Ramesh Kumar, Hisar C/o- CA J.P. Goyal, 1st Floor, Shivalya Market, GT Road, Fatehabad. (PAN: BCVPK8902M) (Appellant) (Respondent)

Appellant by : Sh. Vikram Sahay, Sr. DR Respondent by: Sh. R.R. Singla, CA Date of hearing: 24.04.2015 Date of pronouncement: 30.04.2015

ORDER

PER SHRI INTURI RAMA RAO, A.M. :

1. This is an appeal filed by the Revenue for the assessment year 2009-10

impugning the order of learned CIT(A), dated 23.09.2013 raising the following

grounds of appeal:

i. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 11,00,000/- by observing that the assessee had not deposited any amount of Rs. 11,00,000/- in his saving bank account.

ii. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating that the assessment order has been made addition in respect of unexplained part out of cash deposit entries of Rs. 18,60,200/- in bank statement, source of which is claimed to be including Rs. 11,00,000/-, purportedly received as' advance against proposed sale of land.

iii. On the facts and in the circumstances of the case, the Ld. C1T(A) has erred in ignoring the facts and circumstances leading to conclusion that purported agreement of sale of land is an eye-wash.

2 iv. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating that the creditability of statement of Sh. Sanjay Kumar is low, in view of the fact that assessee not only refrained from producing his brother namely S/Shri Hanuman, Bahader and Sat Pal who are joint owner of the land purportedly under sale and Sh. Sanjay Kumar, the purported buyer of the land under sale who is direct relative of the assessee but also refrained from attending himself before ITO for the fear of cross examination, inspite of various opportunities afforded during the remand proceedings.

v. On the facts and in the circumstances of the case, the Ld. C1T(A) has erred in not appreciating that cited judgement in the case of (i) CIT Vs U.M. Shah, prop. Shreink Trading Co. Ltd. (1973) 90 ITR 396 (Bom.),

(ii) CIT Vs Ashok Arora (2009) 29(1) ITCL- 40: (P&H-HC)(2009) 24 DTR (P&H) 227, and (iii) CIT Vs Surinder Nath Singla (1995) 51 TTJ ( Del.- Trib.) 179 are distinguishable on facts and not applicable to the present case.

vi. The Appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.

2. The brief facts of the case are that the respondent assessee is an individual

deriving income from retail business who filed return of income for the

assessment year 2009-10, declaring income of Rs. 1,23,000/- apart from the

agricultural income of Rs. 54,800/- on 18.05.2009. Against the said return of

income the assessment was completed by the Assessing Officer on 20.12.2011

after bringing to tax the cash deposited with the ICICI Bank on the following

dates:

Rs. 4,50,000/- on 31.12.2008 Rs. 1,70,000/- on 07.01.2006 Rs. 4,62,000/- on 12.01.2009

3. Aggrieved by the assessment order, an appeal was preferred before the

learned CIT(A) who vide order dated 23.09.2013 allowed the appeal of the

assessee. Hence, the present appeal by the Revenue. 3

4. Learned DR vehemently argued that the learned CIT(A) ought not have

deleted the addition of Rs. 11 lakhs being the cash deposit in the bank account of

the assessee, inasmuch as, the assessee had failed to furnish any proof of the said

deposits.

5. On the other hand, learned Authorized Representative placed reliance on

the order of learned CIT(A).

6. We have heard the rival submissions and have perused the material

available on record. Learned CIT(A) considered the cash flow statement and the

statement of Mr. Sanjay Kumar who stated to have advanced the money to the

assessee which was recorded by the Assessing Officer and out of the statement

of Mr. Sanjay Kumar nothing adverse against the assessee had emerged and

therefore, the learned CIT(A) allowed the appeal of the assessee. The findings of

the learned CIT(A) vide para no. 5 (pages 8 & 9) are as follows:

"I have carefully considered the issue and submissions made by the AR as well as the comments of the A.O. It is a matter of fact that the appellant had not deposited any amount of Rs.11.00 lacs in his saving bank account which has been deemed as an income of the appellant from undisclosed sources u/s 69 of The Income Tax , Act, 1961. The appellant had received Rs.1100000/- as an advance for sale of agriculture land from Sh. Sanjay Kumar and which sum was returned after withdrawing Rs.1090000/- on 12.01.2009 from his saving bank account with ICICI bank. The appellant also submitted a copy of cash flow statement showing the details of receipts and withdrawals/payments. The A.O. duly accepted opening cash in hand amounting to Rs.83126/- which was closing balance as on 31.03.2009 and give the credit of the same while framing the assessment for the assessment year 2010-2011. Therefore, the contents of cash flow statement for the financial year 2009-10 cannot be doubted. Sh. Sanjay Kumar has also confirmed in his statement, which was recorded during the course of assessment proceedings, that he had made said advances to Sh. Ramesh Kumar for purchase of agricultural land. The claim of the appellant could not rejected only on the ground that the appellant could not personally produce, during the remand proceedings, the purchaser of 4

land, when no summon what so ever has been issued to the purchaser of land. In the absence of any summons to the purchasers of land, the assessee could not be blamed for all this as held by the Hon'ble Bombay High Court in the case of CIT v U.M. Shah, Proprietor Shrenik Trading Co. Ltd. 1973 90 ITR 396 (Born) and by The Hon'ble Punjab & Haryana High Court in the case of ClT vs Ashok Arora (2009) 29(1) ITCL 40:

(P&H- HC) (2009) 24 DTR (P&H) 227 and by the Hon'ble ITAT Delhi in the case of CIT V Surinder Nath Singla, (1995) 51 TTJ (Dej-Trib) 179. It is each and every individual entry, on which the mind has to be applied by the A.O., when an explanation is offered by the assessee. If no explanation has been offered in respect of a particular entry then the A.O. will be justified in coming to the conclusion that the said investment is unexplained. It is not the totality of the credit entries which are to be allowed or to be disallowed as made in the above case. The appellant had discharged its burden of proof by producing Sh. Sanjay Kumar during the course of assessment proceedings and circumstantial evidences on the facts of the case. Therefore, I find no plausible reason to dispute the contention of the assessee that cash deposit in the ICICI bank stand explained. In view of the above, the addition made by the A.O. of Rs. 11.00 lacs is deleted and the grounds of appeal are allowed."

7. In view of the above findings, we agree with the reasoning given by

learned CIT(A) and we do not intend to interfere with the order passed by

learned CIT(A). Accordingly, the appeal filed by the Revenue is dismissed.

8. In the result, the appeal is dismissed.

The decision is pronounced in the open court on 30th April, 2015.

Sd/- Sd/- (I.C. Sudhir) (Inturi Rama Rao) Judicial Member Accountant Member Dated: 30th April, 2015. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi