Income Tax Appellate Tribunal - Delhi
Adarsh Mahila Mercantile Co- Operative ... vs Department Of Income Tax on 13 July, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI 'A' BENCH
BEFORE SHRI I.P. BANSAL, JM & SHRI A.N. PAHUJA, AM
ITA No.4202/Del/2011
Assessment year:2008-09
Addl. C.I.T.,Range-2, V/s. M/s Adarsh Mahila
Muzaffarnagar (UP) Mercantile Co-operative
Bank Ltd., 10A, New
Mandi, Muzaffarnagar (UP)
[P AN No.: AAAAA 4275 C]
Appellant (Respondent)
Assessee by Shri Amit Goel,AR
Revenue by Mrs. Anusha Khurana,DR
Date of hearing 21-11-2011
Date of pronouncement 30-11-2011
ORDER
A.N.Pahuja:- This appeal filed on 20.9.2011 by the Revenue against an order dated 13th July, 2011 of the ld. CIT(A)-Muzaffarnagar, raises the following grounds:-
1. "On the facts and in the circumstances of the case, the learned CIT(A) erred in law in deleting the addition of ``95,00,000/-
made by the Assessing Officer on account of cash deposit out of books on the basis of AIR information without appreciating the facts of the case as the AIR information has to be filed by the head office on the basis of information received/transaction made by its branches, while the branch office cannot deny the transactions reported by its head office and even as per the revised AIR information downloaded on 19.04.2011 all entries are same as in the original AIR.
2. The order of learned CIT(A) be set aside and that of the Assessing Officer be restored."
2 ITA No.4202/Del./20112. Facts in brief, as per relevant orders are that e-return declaring income of ``1,13,48,187/- filed on 27th September, 2008 by the assessee, a Co- operative bank, was selected for scrutiny with the service of a notice u/s 143(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act). In this case, AIR information was received by the Assessing Officer[AO in short] that the assessee deposited following amounts in cash with HDFC Bank, Jansath Road, Muzaffarnagar:-
[In `] 1.2.2008 20,00,000/-
2.4.2007. 10,00,000/-
12.5.2007 35,00,000/-
12.7.2007 20,00,000/-
10.8.2007 10,00,000/-
Total: 95,00,000/- 2.1 To a query by the AO, the assessee explained that they have not
deposited any cash in the aforesaid bank account with HDFC and enclosed a copy of certificates issued by the HDFC Bank in respect of account no.03810380000017 & 03812320000159. Since AIR information revealed cash of ``95 lacs deposited in the bank account of the assessee with HDFC bank, the AO issued summons to the manager of the Bank, who after perusing the bank account statement of the head office informed that these transactions emanated from the CTR which were submitted by the office of HDFC Bank,Mumbai..
However, since the assessee did not controvert the aforesaid cash transactions nor reconciled the transactions reported by the head office vis-à-vis statement of a/c of the branch , the AO added the amount of ``95 lacs u/s 68 of the Act.
3 ITA No.4202/Del./20113. On appeal, the ld. CIT(A) forwarded written submissions filed by the assessee to the AO for a remand report, wherein it was specifically mentioned that the aforesaid five transactions totaling to ` 95,00,000/- did not appear in revised AIR.. In the remand report dated 25th March, 2011, the Assessing Officer reiterated the facts mentioned in the assessment order in the following terms:-
"......... The assessee in his written submissions before your honour stated that the entries of above cash deposits do not exist in its bank account as well as in statement of HDFC Bank itself. This contention of the assessee is not correct as the AIR information has to be filed by the head office of the bank on the basis of information received/transactions made by its branches. The branch office could not deny the transactions reported by its head office,despite several opportunities repeated opportunities on 18-11-2010, 25-11-2010, 09- 12-2010 and 23-12-2010. Further, the assessee neither controverts the cash transactions nor explained them satisfactorily.
The assessee further slated that the A.O. has added the cash deposited as cash transactions from undisclosed sources u/s 68 of the Income Tax Act, 1961, which is not correct. This contention of the assessee is not acceptable as the five entries amounting to Rs. 95,00,000/-, reported in the AIR of HDFC Bank were in cash and were neither recorded in the books of account of the assessee nor had explained source.
The assessee also staled that no cash deposit has been made by him on above dates in HDFC Bank as stipulated by the A.O and the same has not been confirmed by the HDFC Bank vide letter dated 28- 12- 2010 and now HDFC Bank has revised its AIR alongwith affidavit stating that the entries do not belong to the bank. This contention of the assessee is not correct and acceptable because the AIR information once collected & reported cannot be denied by affidavits. Further, the branch office cannot deny the transactions reported by its head office and the assessment was made on the basis of AIR information available on the date of completion of assessment after giving several opportunities to the assessee as well as HDFC Bank. The failure on the part of assessee casts an onus to 4 ITA No.4202/Del./2011 explain its source and hence the addition was made.
In view of the above submission & detailed reasons discussed in the assessment order, the appeal of the assessee deserves to be dismissed"
3.1 Since the HDFC Bank had revised the AIR vide letter dated 15th March, 2011, the CIT(A) directed the AO to make necessary verification. Consequently, the AO vide his letter dated 26.04.2011 submitted as under:-
"...... The income Tux Officer, Ward-..4.(2), Kanpur vide his letter dated 19-04-2011 stated that the AIR information was generated on 19-04-2011 in respect to the above assessee(PAN AAAAA4275C). He also enclosed the copy of AIR report along with his letter 'with a copy to your goodself.
Perusal of A1R report generated on 19-4-2011 reveals that there is no difference with the report generated on 03-08-2009. The addition of Rs.95,00, 000/- was made on the basis of AIR report dated 03-08-2009 as the following five entries were not reflected in the books of account of the assessee. These entries still exist in the latest AIR report i. e. after having filed the revised AIR return by HDFC Bank, proof of which has been filed by the assessee before your goodself. The copy of AlR report dated 03 -08- 2009 is also enclosed herewith for your kind perusal.
01 -02-2008 Rs. 20, 00, 000/-
02-04-2007 Rs.10, 00, 000/-
12-05-2007 Rs. 35,00, OOO/-·
12-07-2007 Rs. 20, 00, 000/-
10-08-2007 Rs.I0, 00, 000/-
Total: Rs. 95, 00, 000/-
In view of the above information, the remand report dated 25- 03-2011 & detailed reasons discussed in the assessment order, the appeal of the assessee deserves to be dismissed ...."5 ITA No.4202/Del./2011
3.2 However, the ld. CIT(A) sought further report from the AO vide letter dated 3rd May, 2011 in the following terms:-
"........ It is observed that the appellant has submitted evidence in respect of revised report filed by HDFC with NSDL but such revision does not figure out in the AIR in respect of the appellant, Since the contents of the revised report filed by the HDFC are not known, you are directed to make necessary inquiries including calling for revised report from the HDFC so as to verify the correct status of the facts.
Further, in case such cash deposits find place in HDFC report, it would be necessary to ascertain the actual ownership of such cash deposits so that its taxability in proper hands is ensured. You are therefore, directed to carry out the investigation to identify the persons who deposited the said cash (if at all such cash was ever deposited with the appellant bank) so that necessary directions may be issued to the A.O. having jurisdiction over such persons .... "
3.3 The AO ,accordingly required the manager, HDFC Bank, Muzaffarnagar , to inform the details of persons to whom the aforesaid five entries of ``95 lacs pertained . No such details appear to have been ascertained, as is evident from the impugned order. .
4. In view of the foregoing, the ld. CIT(A) observed as under:-
"3.1.8. Further, the A.O. also issued letter dated 28-06-2011 to l.T.O. Ward-4(2), Kanpur requiring to furnish copy of latest AIR information in respect of HDFC Bank for F.Y.2007-08 relevant to A.Y.2008-09.
The facts of the case as well as statements of facts and grounds of appeal made by the appellant have been carefully considered. It is observed that the A.O. on the basis of AIR information received from head office HDFC Bank, Mumbai gathered that the following entries were in the name of the appellant ;-
01 -02-2008 Rs. 20, 00, 000/-
02-04-2007 Rs. I0, 00, 000/-
12-05-2007 Rs. 35,00, OOO/-·
6 ITA No.4202/Del./2011
12-07-2007 Rs. 20, 00, 000/-
10-08-2007 Rs.IO,00,000/-
Total: Rs. 95, 00, 000/-
During the course of assessment proceedings the appellant categorically denied the ownership of these entries and furnished copies of bank account NO.03810380000017 and NO.03812320000159 with the aforesaid bank in support of its contention. The A.O. also sought information u/s 133(6) of the Act from HDFC Bank, Muzaffarnagar and obtained copy of bank statements of the appellant. The Manager, HDFC Bank. Muzaffarnagar was also summoned u/s 131 of the Act and his statement on oath was also recorded by the A.O. The Manager vide letter dated. 11-11-2010 also informed that these transaction were non-existent. However, the A.O. held that the appellant was neither able to controvert the cash transactions totaling to Rs.95,00,0001- as, contained in the AIR information nor explained them satisfactorily. The A.O. on the basis of A1R of the HDFC Bank, Main Branch, Mumbai held that the impugned sums represent undisclosed income of the assessee and were liable to be added u/s 68 of the Act. During appellate proceedings the appellant has furnished letter dated 28-12- 2010 issued by HDFC Bank, Muzaffarnagar wherein the aforesaid bank has confirmed that the entries totaling to Rs.95,00,000/- did not relate to the appellant. The appellant has also furnished Revised AIR of HDFC Bank along with affidavit of the appellant to the effect that the aforesaid five entries did not pertain to the appellant. During the course of appellate proceedings the A.O. was also required to make necessary investigation in respect of the impugned issue however, the investigation has not been made to its logical end despite sufficient opportunities given to the A.O. Since the appellant had furnished revised AIR of the aforesaid bank, the A.O. vide letter dated 03-05-2011 was specifically directed to carry out necessary investigation so as to ascertain the actual ownership of the cash transactions amounting to Rs.95,00,000/-. However, till date, no such report has been received from the A.O. Even if the A.O. had received certain AIR information, it was for him to process the same and make further investigation so as to arrive at a logical conclusion. However, without doing the same, the A.O. has only harped on the AIR information and has not made proper analysis. Thus in absence of proper analysis of the AIR information and any adverse material evidence on record, the addition made u/s 68 is held as untenable. On the other hand the appellant has furnished sufficient evidences to 7 ITA No.4202/Del./2011 establish that the aforesaid five entries of cash transactions did not pertain to it. Unless the AO is able to controvert so many documentary evidences placed by the assessee on record; it would not be proper to sustain addition made u/s 68 of the Act as cash transactions. In other words, sufficient evidence, e.g. copies of bank statements, letter of the Manager, HDFC Bank, Revised AIR of HDFC Bank and affidavit etc. have been furnished, which had shifted the 'onus' from assessee onto the AO; but AO has not discharged his onus to show any discrepancy/falsity in such evidences. In my view, these evidences are sufficient to establish the appellant's claim and the addition at Rs.95,00,000/- is therefore, directed to be deleted. Ground No.1 is allowed. ."
5. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld. DR supported the order of the AO while the ld. AR on behalf of the assessee relied upon the aforesaid findings of the ld. CIT(A).
6. We have heard both the parties and gone through the facts of the case. We find that the assessee categorically denied the ownership of aforesaid five entries of ``95 lacs and furnished copies of their bank accounts with HDFC . The manager of the concerned branch vide letter dated 11.11.2010 also informed that these transactions were non existent. Before the learned CIT(A), the assessee furnished a letter dated 28th December, 2010 issued by HDFC Bank, Muzaffarnagar that the aforesaid entries totaling to ``95 lacs did not relate to the assessee and a revised AIR along with affidavit of the assessee was also filed. The AO did not carry out necessary investigation in order to ascertain as to who is the actual owner of these entries and instead relied merely on AIR information. Since the AO did not controvert the revised AIR nor the Revenue have placed before us any material, controverting the aforesaid findings of facts recorded by the ld. CIT(A) in the light of copies of bank statements, letter of Manager, HDFC bank, revised AIR etc., we do not find any basis to take a different view in the matter. Accordingly, we have no alternative but to uphold the findings of learned CIT(A).Therefore, ground no.1 in the appeal is dismissed.
8 ITA No.4202/Del./20117.. Ground no.2 being mere prayer nor any submissions having been made before us on this ground, does not require any separate adjudication and is, therefore, dismissed.
8. No other plea or argument was made before us.
9.. In result, appeal is dismissed.
Order pronounced in Open Court
Sd/- Sd/-
(I.P. Bansal) (A.N. Pahuja)
(Judicial Member) (Accountant Member)
NS
Copy of the Order forwarded to:-
1. Addl.C.I.T., Range-2, Muzaffarnagar (U.P.).
2. M/s Adarsh Mahila Mercantile Co-operative Bank Ltd., 10A, New Mandi, Muzaffarnagar (U.P.).
3. CIT(A), Muzaffarnagar (UP).
4. CIT concerned.
5. DR, ITAT,'A' Bench, New Delhi
6. Guard File.
BY ORDER, Deputy/Asstt.Registrar ITAT, Delhi