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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: HONBLE KUL BHARAT & HONBLE MANISH BORAD
order u/s 143(3) of the Income Tax Act 1961(In short the ‘Act’) dated 29.03.2014 framed by ITO, Dewas.
2. The assessee has raised following grounds of appeal; “1. The Ld. CIT(A) has erred in upholding the addition of Rs.58,30,000/- being the cash deposits in the bank.
It was proved before the lower authorities that the amount deposited were out of the sale proceeds of the agriculture lands of the assessee and his wife and were out of the fixed deposits taken. The necessary certificates were filed before the lower authorities which are not been considered.
The addition of Rs.58,30,000/- may please be deleted.
The assessment framed is illegal and bad in law and the reopening of the assessment is bad in law.
5. The assessee prays to alter, amend, add or delete any of the grounds of appeal
.”
3. Brief facts of the case as culled out from the records are that the assessee is an individual earning income from salary. Return of income filed on 8.10.2012 declaring income of Rs.1,20,000/-. Case selected for scrutiny and notice u/s 143(2) of the Act was issued and served upon the assessee. On verification of the AIR, Ld. A.O noticed that cash has been deposited on various dates in the saving bank account totaling to Rs.58,30,000/-. Assessee contended before Ld. A.O that part amounts relates to partnership firm of M/s.
Chamunda Best Tools, amount received from his wife on maturity of Fixed Deposits. However Ld. A.O was not satisfied with the details and evidence filed by the assessee and concluded the 2 Rajaram Kumawat assessment by making addition for unexplained credit of Rs.58,30,000/- and accordingly assessed the income at Rs.59,50,000/-.
4. Aggrieved assessee preferred appeal before Ld. CIT(A) but failed to succeed.
Now the assessee is in appeal before the Tribunal.
At the outset Ld. Counsel for the assessee requesting for setting aside the issues raised in this appeal to the file of Ld. CIT(A) for afresh adjudication submitted that Ld. CIT(A) failed to appreciate that amount of Rs.6,30,000/- related to the deposits made in the business concern firm M/s. Chamunda Best Tools, Rs.27,00,000/- was the amount which had its source from fixed deposits in the name of his wife Smt. Shanta Bai which were matured and similarly Rs.25,00,000/- was having its nexus with Fixed Deposit in the bank in the name of assessee. Reference was also made to the sale deeds of agricultural and industrial shed which were sold by the assessee and his wife and the sale consideration was used to make Fixed Deposits.
Per contra Ld. Departmental Representative vehemently argued and supporting the orders of Ld. CIT(A) also submitted that in the alleged sale deeds of agriculture land and industrial sheds consideration have been received by account payee cheques except for cash of Rs.11,751/- received in cash. Ld. A.O also submitted that nothing has been placed on record to prove the source of deposits, their maturity, amount withdrawn from the bank and the reason for depositing cash.
We have heard rival contentions and perused the records placed before us. Though the assessee has raised five grounds of appeal but the sole grievance relates to the upholding the addition of Rs.58,30,000/- by Ld. CIT(A) confirming the unexplained cash deposit addition made by Ld. A.O for the following amounts;
Date Amount In the name of 06.12.2010 3,50,000 M/s. Chamunda Best Tools 12.03.2011 2,80,000 -do- 2010-11 11,50,000 Sh.Rajaram Mathuralal Kumawat 2010-11 14,00,000 Smt. Shanta Bai W/o Rajaram 06.07.2010 13,50,000 Rajaram Mathuralal Kumawat 06.07.2010 13,00,000 Shantabai W/o Rajaram Total 58,30,000
The above details of cash deposits came to the knowledge of the Ld. A.O on the basis of Annual Information Report which is generated on the basis of Permanent Account number of the assessee. Ld. Counsel for the assessee has nowhere disputed that the alleged cash deposit entries does not relates to the assessee.
We observe that the Ld. CIT(A) confirmed the addition of Rs.58,30,000/- observing as follows;
“4.2 Ground No.2 & 3:- Through these grounds of appeal the appellant’s has challenged the addition of Rs.S8.30,OOO/- on account of cash deposit in saving bank account. The appellant has deposited the cash in the saving bank account as under :-
Date Amount In the name of 06.12.2010 3,50,000 M/s. Chamunda Best Tools 12.03.2011 2,80,000 -do- 2010-11 11,50,000 Sh.Rajaram Mathuralal Kumawat
2010-11 14,00,000 Smt. Shanta Bai W/o Rajaram 06.07.2010 13,50,000 Rajaram Mathuralal Kumawat 06.07.2010 13,00,000 Shantabai W/o Rajaram Total 58,30,000
“M/s. Chamunda Best Tools: Rs.3,50,000/- & Rs.2,80,000/-. In respect of the above deposit the appellant submitted that these are the business transactions. While going through the bank account of the M/s. Chamunda Best Tools. the appellant was depositing very nominal amount 5 Rajaram Kumawat in the bank account on the earlier occasion. The appellant failed to establish the source of cash deposit:. No documentary evidence is furnished in support of his claim. In spite of much opportunity during the original appellate proceedings as well as during this appellate proceedings the appellant failed to establish the source of cash deposit.
Sh. Rajaram Mathuralal Kumawat & Smt. Shanta Bai w/o Rajaram Rs. 11,50,000/-, Rs.14,00,000/-, Rs.13,50,000/- & Rs. 13,OO,OOO/-. The appellant submitted that the source of cash deposit is from sale of industrial land sold to Shri Umesh Kurnar Birla. The appellant furnished the ale deed in port of his claim. While going through the sale deeds furnished by the appellant. it is; found that the appellant has received sale consideration in cheque. Nowhere the appellant is in receipt of the sale consideration in cash The appellant repeatedly failed to produce the sour of cash deposit.
Therefore, the addition made by the AO amounting to Rs.58,30,000/- is confirmed. The appeal on these grounds is Dismissed.”
Ld. Counsel for the assessee while making argument before us referred to the following written submissions placed on record;
“On the basis of AIR information this case was scrutinized. The Ld. AO asked the assessee to explain the deposits in the bank. It was submitted before the Ld. AO that the cash deposit and fixed deposits in the bank are taken from the amounts received on the sale of agriculture land in the name of Smt. Shanta bai wife of the assessee on 11.09.2008 and 23.08.2005 (Pg.14 and Pg 31 of PB). It was further submitted that he Rajaram Kumawat Dewas on 01.12.2008 for Rs. 5,11,751/- which were used for the deposit in the bank The assessee stopped his business of manufacturing boxes in the year 2008 and the recoveries of this business were also deposited in the bank.
While framing the assessment the Ld. AO did not accept the contention of the assessee and made additions of Rs. 58,30,000/- being deposits in the bank in the name of the assessee as also in the name of his Wife and the partnership firm. The Ld. AO made the additions as under.
Rs.6,30,000/- Deposits in Chamunda Best Tools. Rs. 27,00,000/- Fixed deposits in the name of Shanta bai (Wife) Rs. 25,00,0001- Fixed deposits in the bank in the name of self.
The sale deeds of agriculture lands and industrial sheds were filed before the Ld. CIT(A). The bank certificates were also filed showing the fixed deposits made earlier and the withdrawal of cash on the expiry of term of the deposits or premature closure. These papers were not considered by the Ld. CIT(A) and he simply observed that in the sale deed the assessee received the cheques and nowhere the cash was received. The assessee has failed to produce the source of cash deposits and as such the addition is confirmed.
It is humbly submitted that the lower authorities did not consider the sale deeds and the bank certificates filed showing that the deposits in the bank were out of the sale proceeds of the immovable properties. The assessee had also taken the overdraft facilities from the bank ( Pg 68 of PB) and withdrawn cash from the bank on various dates which were available for depositing in the bank. These aspects have not been considered by the Ld. CIT(A) when all the necessary certificates of the bank were filed before him.
Under no circumstances the fixed deposits ofRs.27,00,000/- in the name of Wife Smt. Shanta Bai Rajaram can be taxed in the hands of the assessee when she had an independent source by way of sale deed of agriculture lands in her name (Page 14 and page 28 of PB) . It is further submitted that the deposits of Rs. 6,30,000/- in the account of Chamunda Best Tools which is a partnership concern cannot be taxed in the hand of assessee. The fixed deposits in the name of assessee are from the sale proceeds of the shed of Manoj Box Packers and from the realization of assets on closure of his business. Further the amount from the sale of the agriculture lands of the wife were also available for the deposits in the bank”.
From perusal of the above written submissions it is noteworthy that efforts have been made by the Ld. Counsel for the assessee to prove the nexus of sale consideration received from sale of industrial land, agricultural land, maturity of Fixed Deposit Receipts. From perusal of the sale deed page 631 of the paper book it transpires that for the sale of industrial land at Plot No.142, AB Road, Dewas the sale consideration is shown at Rs.5,11,751/- out of which Rs.11,751/- have been received in cash and the remaining amount is by account payee cheque. Similarly for sale of agricultural land owned by the assessee’s wife the sale consideration is mentioned at Rs.29,39,500/- and the total consideration have been received by account payee cheque and there is no mention of any cash amount received by the assessee.
Similarly for the Fixed Deposit Receipts in the name of the assessee’s wife necessary details with the cash flow statement has not been placed to show that the Fixed Deposits were held in the name of assessee/wife, when they got matured, sale consideration have been remitted back to the bank account and the cash amount Rajaram Kumawat withdrawn. This fact also needs verification that the sale consideration of the sale of properties in the name of assessee and his wife as claimed by the Ld. Counsel for the assessee were deposited in the bank account which apparently seems to be during Financial Year 2008-09 and after this deposits, Fixed deposit receipts were made by the assessee and during the year under appeal the Fixed Deposits got matured/being en-cashed.
In our considered opinion Ld. CIT(A) before coming to the finding has not examined various facts of the case which were put forth by the assessee during the course of appellate proceedings. In the interest of justice and to be fair to both the parties we are of the opinion that the issues raised in the instant appeal needs to be set aside to the file of Ld. CIT(A) for denovo adjudication in the light of our observations mentioned in the preceding paras as well as the Remand Report to be called from the Assessing Officer verifying the submission made by the assessee. Needless to mention that proper opportunity of being heard should be provided to the assessee for presenting the records.
In the result the appeal of the assessee is allowed for statistical purposes.
The order pronounced in the open Court on 22.03.2019.