Income Tax Appellate Tribunal - Delhi
Shri Praveen Malik, Sonepat vs Ito, New Delhi on 13 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "F", NEW DELHI
BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
AND
SMT. BEENA A. PILLAI, JUDICIAL MEMBER
ITA No.622/Del/2015
Assessment Year : 2011-12
Praveen Malik, ITO, Ward- 37 (3),
House No.2121, Sector- 23, New Delhi.
Vs.
Sonepat.
PAN : ALHPP7943H
(Appellant) (Respondent)
Assessee by : Shri Praveen Malik (Assessee)
Department by : Shri Atiq Ahmad, Sr.DR
Date of hearing : 13-02-2018
Date of pronouncement : 13-02-2018
ORDER
PER R. K. PANDA, AM :
This appeal filed by the assessee is directed against the order dated 10.11.2014 of the CIT(A)- XXVIII, New Delhi relating to assessment year 2011-12.
2. Facts of the case, in brief, are that the assessee is an individual and is an Advocate by profession doing practice in District Sonepat Court. He filed his return of income on 30.03.2012 declaring income of Rs.1,64,498/-. The case was selected for scrutiny by issue of statutory notices. However, since there was non-compliance from the side of the assessee, the Assessing Officer completed the assessment u/s 144 of the I.T. Act determining the total income of the assessee at Rs.83,28,320/-. While doing so, he observed from the bank 2 ITA No.622/Del/2015 account of the assessee that substantial cash has been deposited in the two bank accounts maintained with ICICI Bank Ltd., Sonepat Branch, the total of which comes to Rs.81,63,820/-. Since there was non-compliance before him, he added the entire amount to the total income of the assessee and determined the total income at Rs.83,28,320/-.
3. In appeal, the ld. CIT(A) upheld the action of the Assessing Officer by observing as under :-
"5.1 I have carefully considered the assessment order and submissions thereof. The facts of the case as per assessment order are that the case was selected on the basis of AIR Information that large amount of cash has been deposited in the bank account. The Assessing Officer issued statutory notices in response to which the assessee himself attended the proceedings and filed copies of his bank accounts. He was directed to submit source of cash deposited in the bank account, purpose of cash withdrawals and source of funds transferred in the account. In response the assessee kept seeking adjournments and did not file the requisite details. The assessee is a practicing advocate in Sonepat District. He had deposited Rs.70,80,6201- in one bank account and Rs.10,83,200/- in Another Bank Account. The income declared in his return was Rs.1,64,498/- which included Rs.1,10,000/- as income from his profession and Rs.54,498/- as income from other sources. The assessee did not file the statement of affairs,. Capital account, profit and loss account and details of creditors/ debtors. Since the source of Rs.81,63,820/- deposited in the account remained unexplained, the Assessing Officer added it to the total income.
5.2 In appeal, the appellant claimed that a direct selling agent asked him to build a good bank account by making frequents deposits and withdrawals. He claimed that the same was required for procuring loan. Therefore, it was claimed by the appellant that he took gifts and loans from friends and relatives in cash or through cheques. He enclosed alongwith the submissions the following details :-
1 Copy of statement of both the banks accounts.
2. Details of additions made by The ITO with point wise explanation of the credits made in the bank by way of cash/cheque for credit more than Rs.
50000/-. Cash deposits for amount less than Rs. 50000/- were also deposited from previous withdrawals from the bank.
3. Details of Loans received during the year.
4 Detail of Gifts received during the year from relatives. 5.3 The details filed by the appellant have been perused. The copy of the bank account shows deposits and withdrawals as mentioned by the Assessing Officer. The other documents show claim of deposits out of cash withdrawals, gifts received from various persons/relatives/friends. Loans received from various persons/relatives/friends. However, none of the statement /claim is backed by any documentary evidence. The appellant has not filed any, confirmation of the alleged 3 ITA No.622/Del/2015 donors, confirmation from the persons giving the alleged loan, credit worthiness of the persons giving loans / gifts, their identity or genuineness. In the absence of any documentary evidences the claim of the appellant cannot be accepted. Further, the appellant has claimed that the cash withdrawn on earlier dates have been re- deposited in the account. This claim of the appellant cannot be accepted as the appellant has failed to prepare and file a cash flow statement showing the direct nexus between deposits and withdrawals and the utilization of withdrawals for different purposes. The perusal of the bank statement also shows the deposits have been made at different places example Sonipat, Dwarka, Najafagarh and cash withdrawal have been made by different persons Gulshan Kumari, Naresh Devi, Akshay Kumar, Shiv Shanka, Hari Parkash, Manender, Sandeep Kumar, Gulshan, Hari Parkash, Ravinder, Kuldeep,etc and not by the appellant himself. Thus the claim of the appellant that cash withdrawals made from the bank account have been re- deposited is not supported by the bank statement. The addition made by the Assessing Officer is therefore confirmed.
{6}. Ground of appeal No. 3 is directed against initiation of penalty under section 271(1)(c) being premature hence not adjudicated.
{7} In the result, the appeal is dismissed."
4. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :-
"1. That order passed by ld. assessing officer is without assuming valid jurisdiction and should be quashed ab-initio.
2. That ld. CIT(A) without appreciating the correct facts of the case and giving proper opportunity of being heard is not justified in law and facts and circumstances of the case is confirming the addition of Rs.81,63,820/- made by ld. assessing officer as income from undisclosed sources.
3. Appellant assessee has every right to make, add, delete, modify or alter any grounds of appeal at the time of hearing."
5. The assessee himself appeared before the Bench and explained that due to his illness, he could not appear before the Assessing Officer for which he has passed an ex-parte order making the addition of the entire cash deposits in the bank accounts. He submitted that the ld. CIT(A) without considering the facts properly has upheld the addition made by the Assessing Officer without giving any credit for the withdrawals made by him from time to time. He submitted 4 ITA No.622/Del/2015 that his explanation that the deposits are out of cash withdrawals, gift received from various persons/relatives and loans received from relatives and friends were rejected by the CIT(A) for want of any documentary evidence. He submitted that since he could not give all details before the Assessing Officer, the ld. CIT(A) without giving proper opportunity had sustained the addition. He submitted that given an opportunity he is in a position to substantiate the various cash deposits in the two bank accounts maintained by him.
6. The ld. DR on the other hand heavily relied on the order of the ld. CIT(A).
7. After hearing both the sides, we find some force in the argument of the ld. counsel for the assessee. We find the entire cash has been added by the Assessing Officer without giving any credit for the various withdrawals from the said two bank accounts and the loans & gifts, etc. said to have been received. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate his case with evidence to his satisfaction. The Assessing Officer is directed to decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 5 ITA No.622/Del/2015
8. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on this 13th February, 2018.
Sd/- Sd/-
(BEENA A. PILLAI) (R. K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 13-02-2018.
Sujeet
Copy of order to: -
1) The Appellant
2) The Respondent
3) The CIT
4) The CIT(A)
5) The DR, I.T.A.T., New Delhi
By Order
//True Copy//
Assistant Registrar
ITAT, New Delhi