Income Tax Appellate Tribunal - Pune
Vikramsing Balasaheb Jadhav,, Pune vs Income-Tax Officer,, on 11 November, 2016
आयकर अपील�य अ�धकरण पुणे �यायपीठ एक-सद�य मामला पुणे म�
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "SMC", PUNE
सु�ी सुषमा चावला, �या�यक सद�य के सम�
BEFORE MS. SUSHMA CHOWLA, JM
आयकर अपील सं. / ITA No. 1602/PN/2016
�नधा�रण वष� / Assessment Year : 2007-08
Shri Vikramsing Balasaheb Jadhav,
Plot No.79, Abhilasha Pats,
Yashwant Nagar,
Talegaon Dabhade, Maval,
Pune - 410507 .... अपीलाथ�/Appellant
PAN: A CNPJ6247P
Vs.
The Addl. Commissioner of Income Tax,
Range-8, Pune .... ��यथ� / Respondent
अपीलाथ� क� ओर से / Appellant by : Shri Kishore Phadke
��यथ� क� ओर से / Respondent by : Smt. Sumitra Banerji
सुनवाई क� तार�ख / घोषणा क� तार�ख /
Date of Hearing : 05.10.2016 Date of Pronouncement: 11.11.2016
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
This appeal filed by the assessee is against the order of CIT(A)-9, Pune, dated 14.04.2016 relating to assessment year 2007-08 against order passed under section 143(3) of the Income-tax Act, 1961 (in short 'the Act'). 2 ITA No. 1602/PN/2016
Shri Vikramsing Balasaheb Jadhav
2. The assessee has filed modified grounds of appeal, which read as under:-
1. The learned CIT(A)-9, Pune erred in law and on facts in sustaining addition u/s 69 of ITA 1961 by not granting benefit of telescoping of cash withdrawn against cash deposits amounting to Rs.6,06,487/- made from time to time as follows:
Date Amount
23-Dec-2006 Rs.1,50,000
28-Dec-2006 Rs.2,00,000
23-Mar-2007 Rs. 25,000
23-Mar-2007 Rs.2,31,487
-----------------------------------------------
Total Rs.6,06,487
2. The learned CIT(A)-9, Pune erred in law and on facts in not confining the addition on account of alleged undisclosed investment to the in-
between peak amount and thus telescoping the addition.
3. The learned Authorized Representative for the assessee pointed out that short issue arising in the present appeal is non-granting the benefit of telescoping of cash withdrawn against cash deposited totaling Rs.6,06,487/-. The learned Authorized Representative for the assessee pointed out that at best the addition could be made on account of alleged undisclosed investment on account of deposits in the bank account to the extent of peak amount only.
4. Briefly, in the facts of the case, the assessee had furnished the return of income declaring total income of Rs.1,21,320/-. The case of assessee was selected for scrutiny through CASS and notices were issued. The assessee was engaged in the business of commission agent i.e. sale of movable and immovable property on commission basis. The assessee was not maintaining any books of account for his business. As per AIR information available, the assessee was having savings bank account with IDBI Bank at Talegaon Dabhade, in which during the year under consideration, the assessee had deposited cash of Rs.15,59,000/-. The assessee had not disclosed the said bank account or any of the transactions of the bank in the Balance Sheet / 3 ITA No. 1602/PN/2016 Shri Vikramsing Balasaheb Jadhav return of income filed. In view thereof, show cause notice was issued to the assessee as to why the said deposits in cash should not be treated as undisclosed income for the year. During the pendency of assessment proceedings, directions were sought under section 144A of the Act from the Addl. CIT, Range-8, Pune, who in turn, gave opportunity of hearing to the assessee. The assessee in reply pointed out that he was not maintaining books of account regularly. Further pointed out that the agency business was being carried out by him at Maval Taluka, which was agricultural area and most of the farmers did not accept any cheque or demand draft for token money and due to this, he was required to maintain cash in hand regularly. Since it was not safe to keep the cash at home, cash in hand was deposited and withdrawn regularly from his savings account. The assessee explained the nature of cash deposits and its source in the said letter which are reproduced at pages 3 and 4 of the assessment order. The Addl. CIT issued directions under section 144A of the Act to the extent that though the books of account were not being maintained but the assessee has prepared and filed the Profit & Loss Account and Balance Sheet for the year under consideration. Further, the assessee was having two bank accounts in the same bank i.e. IDBI. However, only Current Account was disclosed by the assessee in the Balance Sheet and the other bank account with cash deposits of Rs.15,59,000/- was not disclosed. Even during the start of assessment proceedings, the assessee disclosed only one bank account with closing balance of Rs.6,330/- and it was stated by the assessee that he did not have any other bank accounts. Since the assessee had failed to disclose the said bank account and had repeatedly tried to hide the facts, the Addl. CIT was of the view that where the deposits made in the said bank account were not verifiable since the assessee had not maintaining any books of account, therefore, cash deposit of Rs.15,59,000/- was to be 4 ITA No. 1602/PN/2016 Shri Vikramsing Balasaheb Jadhav treated as undisclosed income of the assessee. The Assessing Officer in view of directions of Addl. CIT, added the said deposits as undiscl osed income of the assessee at Rs.15,59,000/-.
5. The CIT(A) rejected the first plea of assessee that it was not given sufficient opportunity since in order to meet ends of justice, remand proceedings were allowed to the assessee. With regard to the contention of assessee giving telescoping effect out of credits of IDBI, the CIT(A) observed as under:-
"5.3.2 .....
i) ` 1,50,000/- on 23.12.2006: The appellants claimed that deposit was out of earlier withdrawals. This argument of the assessee is not found tenable as withdrawal of ` 2,00,000/- was made on 2nd December and thereafter several withdrawals were made i.e. ` 25,000/- on 7th December, ` 60,000/- on 13th December and again ` 50,000/- on 13th December and ` 4,000/- on 15th December. The above withdrawals on different dates to meet the business needs of the appellant and deposit of ` 1,50,000/-
was made on 23rd December which was much later hence the argument is not found acceptable.
ii) ` 2,00,000/- on 28.12.2006: The withdrawal amount on 26th December was ` 1,50,000/- only and therefore the appellant's argument that deposit was out of earlier withdrawals is not found acceptable.
iii) Likewise claim of the appellant with regard to deposit of ` 25,000/- is also not found acceptable as on the same date there were total deposits of ` 8,00,000/- in cash which were made for making DD of ` 8,00,000/- and ` 25,000/- is part of that total deposit of ` 8,00,000/-. Thus, this contention of the appellant is also without any basis as discussed earlier in this order."
6. In respect of balance deposits of Rs.1,49,980/- + Rs.500 + Rs.5,000/- totaling Rs.1,54,980/-, the explanation of the assessee was accepted and the addition was restricted to Rs.14,04,020/-.
7. The assessee is in appeal against the order of CIT(A).
8. The learned Authorized Representative for the assessee pointed out that the benefit of telescoping be given against the cash withdrawals totaling Rs.6,06,487/-.
5ITA No. 1602/PN/2016
Shri Vikramsing Balasaheb Jadhav
9. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the order of CIT(A).
10. The limited issue which arises for adjudication in the present appeal is the claim of telescoping of cash withdrawals from the bank account against the cash deposits in the bank account. The Assessing Officer received the information that the assessee was operating bank account with IDBI bank i.e. Savings Bank Account No.2999, which was not disclosed in the return of income / balance sheet. The assessee had declared another account in IDBI bank but had failed to disclose the entries in IDBI savings bank account No.2999. The case of the assessee was reopened under section 148 of the Act and directions were sought from the Addl. CIT, Pune in this regard. The assessee had made the cash deposits in the said account totaling Rs.15,59,000/- which was treated as undisclosed income of the assessee. Before the CIT(A), the assessee made claim of telescoping benefit, wherein he requested that the benefit of cash withdrawals may be allowed to the assessee against the cash deposits. The CIT(A) accepted the claim of assessee to the extent of Rs.1,54,980/-. However, in respect of balance amounts, the explanation of assessee was not accepted and addition was made to the extent of Rs.14,04,020/-.
11. Now, before the Tribunal, the assessee has li mited his scope of relief by way of modified ground of appeal to cash deposit amounting to Rs.6,06,487/-. Before the CIT(A), the assessee had furnished the explanation in respect of deposits and the CIT(A) accepted partly and not accepted partly. However, there is merit in the claim of assessee and the assessee should be allowed benefit of telescoping vis-à-vis amounts withdrawn in cash from the said bank account against cash deposits made. Accordingly, I remit this issue back to the 6 ITA No. 1602/PN/2016 Shri Vikramsing Balasaheb Jadhav file of Assessing Officer to allow the claim of assessee and to re-work the addition in the hands of assessee after giving telescoping effect to the cash withdrawals made by the assessee during the year under consideration from the said bank account itself. Reasonable opportunity of being heard shall be provided to the assessee. The grounds of appeal raised by the assessee are thus, allowed as indicated above.
12. In the result, the appeal of assessee is allowed as indicated above.
Order pronounced on this 11 th day of November, 2016.
Sd/-
(SUSHMA CHOWLA)
�या�यक सद�य / JUDICIAL MEMBER
पुणे / Pune; �दनांक Dated : 11 th November, 2016.
GCVSR
आदे श क� ��त�ल�प अ�े�षत/Copy of the Order is forwarded to :
1. अपीलाथ� / The Appellant;
2. ��यथ� / The Respondent;
3. आयकर आयु�त(अपील) / The CIT(A)-9, Pune;
4. आयकर आयु�त / The Pr. CIT-5, Pune;
5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, पुण,े एक-सद�य मामला / DR 'SMC', ITAT, Pune;
6. गाड� फाईल / Guard file.
आदे शानुसार/ BY ORDER, स�या�पत ��त //True Copy// व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune