Income Tax Appellate Tribunal - Pune
Aditya Satish Parakh,, Nashik vs Assistant Commissioner Of ... on 19 February, 2019
आयकर अपील य अ धकरण] पण
ु े यायपीठ "बी" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
BEFORE MS. SUSHMA CHOWLA, JM AND
SHRI ANIL CHATURVEDI, AM
आयकर अपील सं
. / ITA No.322/PUN/2016
नधा रण वष / Assessment year : 2011-12
Aditya Satish Parakh,
Aditya, 2 & 3, Behind Aditya Petrol Pump, .......... अपीलाथ /
IBP Residential Colony, Savarkar Colony, Appellant
Gangapur Road, Nashik.
PAN : ALIPP3411B.
बनाम v/s
The Asst. Commissioner of Income Tax, .......... यथ /
Central Circle 1, Nashik.
Respondent
Assessee by : Shri Pramod Shingte.
Revenue by : Shri Avadesh Kumar.
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 11.01.2019 Date of Pronouncement: 19.02.2019
आदे श / ORDER
PER ANIL CHATURVEDI, AM :
1. This appeal filed by assessee is emanating out of the order of Commissioner of Income Tax (Appeals) - 12, Pune dated 03.12.2015 for the assessment year 2011-12.
2. The relevant facts as culled out from the material on record are as under :-
Assessee is an individual stated to be having income from business, capital gains and other sources. Assessee electronically filed his original return of income for A.Y. 2011-12 on 30.09.2011 declaring total income of Rs.5,85,936/-. A search and seizure action u/s 132 2 ITA No.322/PUN/2016 of the Act was conducted in Ashoka Group of cases on 20.04.2010. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) r.w.s. 153(B) of the Act vide order dt.21.03.2013 and the total income was determined at Rs.26,85,936/- and agricultural income of Rs.65,640/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.03.12.2015 (in appeal No.PN/CIT(A)-12/497/2014-15) granted partial relief to the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us and has raised the following grounds :
"1. The learned CIT(Appeals) erred in confirming the addition of Rs.17.50 lakhs, on account of cash deposits in ICICI Bank Account, without properly appreciating the facts of the matter and evidences on record. Therefore, it is prayed to cancel the addition made of Rs.17.50 lakhs.
2. The learned CIT(Appeals) erred in confirming the addition of Rs.2.50 lakhs, on account of payment of stamp duty & registration fees, by disbelieving the explanation offered by appellant and the evidences on record. Therefore, it is prayed to cancel the addition made of Rs.2.50 lakhs."
3. Both the grounds being inter-connected are considered together.
4. AO has noted that during the search and seizure action on 20.04.2010 at the residence of the assessee, two cash vouchers dated 05.04.2010 in the names of Shri Sachin C. Gandhi and Mrs. Meera S. Gandhi were seized. The vouchers were in respect of advance paid for land at Gat No.2/6 and G.No.2/3/2 of Mauje Gangavohare, Tal & District, Nashik. Statement of Shri Satish D. Parakh u/s 132(4) of the Act was recorded on 20.04.2010 wherein in respect of those two cash vouchers, it was stated that it were with respect to cash receipts of Rs.10 lakhs each paid to Shri Sachin C. Gandhi and Mrs. Meera S. 3 ITA No.322/PUN/2016 Gandhi as advance payment against the purchase of their land situated at Nashik. A statement of the assessee was recorded u/s 132(4) of the Act on 17.05.2010 wherein he was asked about the details of payments made by him to Shri Sachin C. Gandhi and Mrs. Meera S. Gandhi for the purchase of land. Assessee submitted that he made payment of Rs.40 lakhs by cheques of ICICI Bank for purchasing the land. The source of which was stated to be out of amounts taken from his father and from his own savings. It was further stated by the assessee that he made cash payment of Rs.20 lakhs on 05.04.2010 which was received back when the final payment was made by cheque. AO noted that purchase deed for the land which was executed on 17.04.2010 showed the payment of Rs.20 lakh each by way of cheques but the alleged cash payment of Rs.20 lakh made by assessee was not reflected in the purchase deed. The submission of the assessee that Rs.20 lakhs that was paid by him in cash to Mr. Sachin Gandhi & Mrs. Meera Gandhi was subsequently refunded back to the assessee on receipt of full agreed consideration of Rs. 40 lacs by cheque and out of the cash refunded amount of Rs.20 lacs after retaining Rs.2.50 lacs for stamp duty, the balance cash amount of Rs.17.50 lacs was deposited with his ICICI Bank account was not found acceptable to the AO. AO concluded that assessee has failed to prove his claim that the amount of Rs. 20 lakhs was refunded by the vendors Shri Sachin C. Gandhi and Mrs. Meera S. Gandhi. AO therefore held that assessee has failed to prove the source of cash deposits of Rs.17.50 lakhs deposited in his ICICI Bank account and he accordingly treated the cash deposits of Rs.17.50 lacs as "unexplained cash credit". The amount of Rs.2.5 lakhs, out of Rs.20 lakhs received back from Gandhi's, which was stated to have spent on stamp duty, registration fee and other charges were also not 4 ITA No.322/PUN/2016 found acceptable to the AO. He held that the source of expenditure of Rs.2.5 lakhs as stamp duty had remained as unexplained and added it as unproved expenditure. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who upheld the order of AO by observing as under :-
"4.5 Considering all the facts and circumstances, the explanation of stop gap arrangement and the theory that Gandhis returned back the cash on 16.4.2010 is only an afterthought. The factum of cash returned back was neither recorded on the cash voucher nor cash voucher was cancelled. There was no evidence found during the search to support the case that cash was returned back by the Gandhis. Statements of the appellant and Mr. Gandhi were recorded after the gap of -about one month hence not as credible as the statement of . Shri Satish Parakh recorded u/s 132(4) on the date of search. Moreover, Mr. Sachin Gandhi and appellant both were party to the unaccounted transaction and were not expected to state the truth which goes against' both of them. Appellant clairned that Gandhis were insisting on payment by of DDs which were already drawn on 5.4.2010 in favour Gandhis hence cancellation of the DDs and thereafter withdrawal of cash from bank is beyond comprehension. Therefore, it is held that cash paid of Rs 20 lakhs through the vouchers seized during the search were the payment over and above the recorded value of the transactions at Rs 40 lakhs and amount in cash was never returned by Gandhis. Therefore, source of cash deposited of Rs 17,50,000 in the bank account of the appellant and the expenditure of Rs 2,50,000 on stamps and other expenditure remains unexplained. I uphold both the additions made by the AO and the grounds raised by the appellant are dismissed."
Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us.
5. Before us, Ld.A.R. reiterated the submissions made before AO and Ld.CIT(A) and further submitted that at the time of search and seizure action on 20.04.2010 at the residence of assessee, two cash vouchers dt.05.04.2010 evidencing cash payment of Rs.10 lakhs each to Mr. Sachin Gandhi and Mrs. Meera Gandhi for purchase of land at Nashik were found. He submitted that since the aforesaid cash payments did not appear in the final sale deed, a doubt about it being "on-money" was expressed. Assessee explained the source for such cash payment to be withdrawn from his ICICI Bank account. It was 5 ITA No.322/PUN/2016 further submitted that the cash payments made were refunded by the vendors after receipt of cheque payments which was noted in the final sale deed and in support of refund of Rs.20 lacs it was pointed out that out of the cash refund of Rs.20 lacs after retaining cash of Rs.2.50 lacs for stamp duty, registration fee and other charges, the balance amount of Rs.17.50 lacs was deposited in the Bank account. In the absence of source for cash deposit of Rs.17.50 lakhs in his ICICI Bank account and retaining cash of Rs.2.50 lakhs for payment of stamp duty, registration fee and other charges, the addition of the aforesaid amounts were made as "unexplained cash credit" and "unproved expenditure" respectively. He submitted that initially the transaction for purchase of agricultural land was finalized between his father and Mr. Sachin Gandhi & Mrs. Meera Gandhi and according to the terms of the transaction, Mr. & Mrs. Gandhi were to be paid to Rs.10 lakhs each by demand draft as earnest money deposit on 05.04.2010 and accordingly to honour the commitment, two demand drafts of Rs.10 lakhs each were purchased from ICICI Bank in favour of Mr. & Mrs. Gandhi by Mr. Satish Parakh. However, it was subsequently realized that due to certain practical problems, it was not possible to purchase the land in the name of Satish Parakh. Accordingly, the proposal to buy the land in the name of Satish Parakh was dropped at 11th hour and it was decided to purchase the land in the name of the assessee. However, since the commitment was made to Mr. & Mrs. Gandhi regarding the payment of Rs.10 lacs on 05.04.2010, it had become necessary to make payment and by the time, it was too late to get a fresh demand draft from bank and therefore under such circumstances, assessee was left with no alternative but to withdraw cash from his ICICI Bank account and carry to Mumbai and hand it 6 ITA No.322/PUN/2016 over the same to Mr. & Mrs. Gandhi. He further submitted that on the assurance that the payment of cash for the purchase of land was as a stop gap arrangement and subsequently payments would be made by demand drafts at the time of registration of Mr. & Mrs. Gandhi accepted the cash. Thereafter, on 16.04.2010 Mr. & Mrs. Gandhi came to Nashik for execution of purchase deed and after reaching Nashik, they returned cash of Rs.10 lac each to assessee. Assessee after retaining Rs.2,50,000/- for incurring of expenditure towards stamp duty, registration fees etc., balance amount of Rs.17,50,000/- was immediately deposited in his ICICI Bank account. In support of his contention, Ld.A.R. pointed to the statement of assessee that was recorded u/s 132(4) of the Act which was reproduced in page 7 of order of Ld.CIT(A), wherein assessee had stated the source of payment of Rs.20 lakhs to be withdrawn from his ICICI bank account and it was also submitted that the amount of cash of Rs. 20 lacs was paid on 05.04.2010 but it was received back and finally the payments were made by cheques. He also pointed to the statement wherein assessee had submitted that since assessee did not have time to make the demand draft for the payment, he made the payment in cash after withdrawing it from his ICICI Bank account. Later on, Mr. and Mrs. Gandhi on receipt of the full agreed consideration of Rs.40 lacs thru cheque, the assessee was refunded the cash. In support of assessee's submission of the amount being withdrawn from his ICICI bank account, Ld.A.R. pointed to the Bank statement of assessee which is placed at page 15 of the paper book. He also pointed to the statement of Mr. Sachin C. Gandhi which was recorded u/s 131 of the Act on 17.05.2010 wherein he has acknowledged the receipt of amount to be refundable deposit. Further, in support of his contention of depositing 7 ITA No.322/PUN/2016 the cash back after retaining cash of Rs.2,50,000/-, he again pointed to the assessee's bank statement maintained with ICICI Bank, which is placed at page 15 of the Paper Book. He therefore submitted that since assessee has explained the source of cash, no addition is called for in the present case. Ld.D.R. on the other hand, supported the order of lower authorities.
6. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to addition of Rs.17,50,000/- and Rs.2,50,000/- on account of "unexplained cash deposit" in the bank account of assessee and "unproved expenditure"
on account of stamp duty, registration fee etc., respectively. It is not in dispute that during the course of search, two cash vouchers dated 05.04.2010 in the name of Mr. Sachin Gandhi & Mrs. Meera Gandhi for payment of Rs.10 lakhs each were found at the residential premises of the assessee, which were towards the purchase of land at Nashik. It is a fact that during the course of search, statement of assessee was recorded wherein the source of payment of Rs.20 lakhs was stated to be withdrawal of the amount from his ICICI Bank account. We find that the contention of the assessee of having taken a demand draft from the Bank, getting it cancelled and withdrawing of cash from the bank is reflected in his bank account with ICICI Bank. We further find that in the statement of Shri Sachin C. Gandhi, had also accepted the payment of cash to be a stop gap arrangement and refundable on receipt of the agreed amount by way of cheque. Further, the submissions of the assessee has not been found to be false on the basis of any corroborative evidences. Considering the totality of the facts, more so when the assessee in the statement recorded at the time of search had explained the source of withdrawal of cash from his bank 8 ITA No.322/PUN/2016 account and subsequently, the depositing of Rs.17,50,000/- in his bank account coupled with the confirmations of Mr. and Mrs. Gandhi, we are of the view that assessee has fully explained the source of cash deposits. In such circumstances, we are of the view that no additions on account of "unexplained cash deposit" and "unproved expenditure on account of stamp duty" can be made in the present case. We therefore direct its deletion. Thus, the grounds of the assessee are allowed.
7. In the result, the appeal of the assessee is allowed.
Order pronounced on 19th day of February, 2019.
Sd/- Sd/-
(SUSHMA CHOWLA) (ANIL CHATURVEDI)
या यक सद!य / JUDICIAL MEMBER लेखा सद!य / ACCOUNTANT MEMBER
पुणे Pune; दनांक Dated : 19th February, 2019.
Yamini
आदे श क# $ त&ल'प अ(े'षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. CIT(A)-12, Pune.
4. Pr. CIT, Central, Nagpur.
5 "वभागीय %त%न&ध, आयकर अपील य अ&धकरण, "बी" / DR, ITAT, "B" Pune;
6. गाड+ फाईल / Guard file.
आदे शानस ु ार/ BY ORDER // True Copy // व-र.ठ %नजी स&चव / Sr. Private Secretary आयकर अपील य अ&धकरण ,पण ु े / ITAT, Pune.