Income Tax Appellate Tribunal - Delhi
Harkesh Singh, Gurgaon vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'C': NEW DELHI
BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER
&
SHRI A.D. JAIN, JUDICIAL MEMBER
ITA No.5679/Del/2012
Assessment Year: 2009-10
ITO, Harkesh Singh,
Ward 11(2), VPO-Bhondsi,
HSIDC Building, Udyog Vihar Vs. Tehsil-Sohna,
Phase V, Gurgaon. Gurgaon.
PAN No. AYWPS5811L
(Appellant) (Respondent)
Appellant by: Sh. Satpal Singh, Sr. DR
Respondent by: Sh. S.K. Gupta, CA
ORDER
PER S.V. MEHROTRA, A.M.
This appeal filed by the Revenue is directed against the order dated 28/08/2012 of CIT(A)-Faridabad for A.Y. 2009-10.
2. The assessee individual, in the relevant assessment year, carried on retail business of readymade garments. He is a retired ex-serviceman living in a small village. He had filed his return of income declaring an income of Rs. 1,94,050/-. In the course of assessment proceedings, the assessee filed bank statement of Punjab National Bank, Bhondsi, Sohna Road, Gurgaon (A/c No. 3415) and Bank Account of Gurgaon Gramin Bank (A/c No. 3136) along with two copies of sale deeds of agricultural land. ITA No. 5679/Del/2012- Harkesh Singh 2
3. The Assessing Officer required the assessee to explain the sourc e of cash deposits of Rs. 28,66,594/- in PNB, Bhondsi, Account No. 3415. Since assessee did not explain the source of deposits, inspite of various opportunities given by AO, he issued notice u/s 133(6) to the Branch Manager of PNB, Bhondsi, Sohna Road, to furnish the bank statement of assessee. From the said bank statement, the AO noticed that assessee had deposited Rs. 28,66,594/- between 22/01/2009 to 18/03/2009. The AO made an addition of Rs. 28,66,594/-, inter-alia, observing as under:
"The assessee failed to furnish the sources of such cash deposits. Moreover, on perusal of the copies of sale deed of agriculture land shows that the amount of share received through cheque by assessee on sale of agriculture land was deposited in the account no. 3136 of Gurgaon Gramin Bank, Bhondsi and this amount was withdrawn from the account from 11.12.2008 to 20.12.2008. Whereas, the amount of cash deposit in PNB Bhondsi was from 22.01.2009 to 18.03.2009. This fact is important to mention here so as to ascertain whether the cash deposited is received from sale of agricultural land. So this cash deposit cannot be considered as an amount received from sale of agricultural land. Moreover, after giving so many opportunities, the assesee has nothing to say in this regard and also failed to give the cash flow statement. I am therefore, of the view, which is based on facts, that the amount of Rs. 28,66,594/- deposited in cash is from unexplained sources and the same is added ITA No. 5679/Del/2012- Harkesh Singh 3 to the income of the assessee u/s 69B of the I.T. Act, 1961."
4. Ld. CIT(A) deleted the addition for the following reasons:
1. The only reason assigned by the AO were that the cash deposits could not be considered out of the sale proceeds of agricultural land because of time gap between the withdrawals from the bank account with Gurgaon Gramin Bank and deposits in the bank account with Punjab National Bank. Ld. CIT(A) pointed out that when the assessee had explained that the cash deposits in one bank account were out of cash withdrawals made from other account, the explanation had to be accepted in absence of any material brought on record by the AO to prove that the money withdrawn had been spent or invested somewhere else. In absence of any such finding, the source of deposits explained to be out of the withdrawals made in earlier period need to be accepted. In this regard ld. CIT(A) has referred to various decisions of Tribunal noted at page 13 of his order;
2. As regards, the AO's objection that the assessee failed to file Cash Flow Statement to explain the source of cash deposits, ld. CIT(A) observed that there was no force in the reasoning of the AO that addition on account of unexplained cash can be made on the ground that cash flow statement was not filed when the copies of bank accounts were filed by the assessee which clearly reflected cash withdrawals against the deposits made out of sale proceeds of agricultural land through cheques. He further observed that, in any case, now assessee has filed cash flow statement where all cash transactions are incorporated on the basis of two bank accounts provided to the AO during assessment proceedings, which is ITA No. 5679/Del/2012- Harkesh Singh 4 inconfirmity with the transactions recorded in the bank accounts. Ld. CIT(A) has reproduced the same at pages 12 to 13 of his order.
5. Ld. DR submitted that the assessee had not submitted the cash flow statement before AO which was submitted for the first time before ld. CIT(A). He submitted that ld. CIT(A) did not call for any remand report on the said cash flow statement from AO. He, therefore, submitted that no opportunity was availed by assessee before AO and no opportunity was provided by ld. CIT(A) to AO before accepting the cash flow statement.
6. Ld. Counsel for the assessee submitted that the cash flow statement had been prepared on the basis of bank statements submitted before the AO and, therefore, it was not an additional evidence before ld. CIT(A). He submitted that it was mere compilation of statement from the bank accounts.
6.1 We have considered the rival submissions and have perused the record of the case. It is not disputed that the sale proceeds of the agricultural land were deposited in Gurgaon, Gramin Bank, Account No. 3136 and this amount was withdrawn from the account from 11/12/2008 to 20/12/2008. In the cash flow statement reproduced in ld. CIT(A)'s order, these entries have been shown as cash received from bank account no. 3136 between 11/12/2008 to 20/12/2008. The amount was deposited in PNB account no. 3415 from 22/01/2009 to 18/03/2009. These amounts are also reflected in the cash flow statements which are in conformity with the information obtained from PNB by issuing notice u/s 133(6) by AO. ITA No. 5679/Del/2012- Harkesh Singh 5 Therefore, the cash flow statement submitted by assessee was rightly not treated as additional evidence by ld. CIT(A) because the primary evidence in the form of bank statement had already been submitted by assessee before the AO. We, therefore, do not find any merit in the submission of ld. DR regarding no opportunity being provided to AO by ld. CIT(A). 6.2 The only point of controversy is whether the cash withdrawals from Gurgaon, Gramin Bank between 11/12/2008 to 28/12/2008 could reasonably be taken as source of cash deposits in PNB account no. 3415 between 22/01/2009 to 18/03/2009. Admittedly, the AO had not pointed out any other investment being made by assessee out of the withdrawals made form Gurgaon, Gramin Bank. Therefore, merely because of the gap of 1 to 3 months between the date of withdrawal and date of deposits, it could not be inferred that the source of deposits in PNB remained unexplained.
7. In the result, the Department's appeal is dismissed.
Order pronounced in the open court on 21/06/2013 Sd/- Sd/-
(A.D. JAIN) (S.V. MEHROTRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 21/06/2013
*Kavita
ITA No. 5679/Del/2012- Harkesh Singh 6
Copy to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT, New Delhi.
TRUE COPY
By Order
ASSISTANT REGISTRAR