SHRI NITINKUMAR K. SHAH,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-11(2),, AHMEDABAD

आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD – BENCH ‘B’

BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.126 and 127/Ahd/2017 �नधा�रण वष�/Asstt. Year: 2005-06 and 2006-07 Alpa Nitinkumar Shah Vs. ITO, Ward-11(1) B-11, Pratikshah Apartment Ahmedabad. Nr.Laxmivardhak Jain Mandir Shantivan, Paldi Ahmedabad 380 007. PAN : ARKPS 1166 J आयकर अपील सं./ ITA No.128 and 129/Ahd/2017 �नधा�रण वष�/Asstt. Year: 2005-06 and 2006-07 Shri Nitinkumar K. Shah Vs. ITO, Ward-11(1) Ahmedabad. B-11, Pratikshah Apartment Nr.Laxmivardhak Jain Mandir Shantivan, Paldi Ahmedabad 380 007. PAN : BMBPS 8400 E

अपीलाथ�/ (Appellant) �त् यथ�/ (Respondent)

Assessee by : Shri J.P. Shah, AR Revenue by : Shri Santosh Kannan, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 14/02/2019 घोषणा क� तार�ख /Date of Pronouncement: 15 /02/2019 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:

Present four appeals are directed at the instance of the assessees against orders of the ld.CIT(A)-5, Ahmedabad dated 13.10.2016 passed on the respective appeals of the appellants in the Asstt.Years 2005-06 and 2006-07.

ITA No.126/Ahd/2017 and 3 Others 2

ITA No.126/Ahd/2017 and 3 Others 3 have not opened bank account as alleged by the AO. They have applied under RTI Act for obtaining various information however, they were not able to get sufficient material. However, in order to do substantial justice, the ld.CIT(A) called for remand report from the AO and appraised him to conduct investigation on the following points: 6. You are accordingly requested to kindly conduct following inquiries:-

i) Record statement of appellant u/s.131 so as to establish whether she has any knowledge, relationship or acquaintance, business or personal with either the person who introduced her at the time of opening the bank account (Account holder No. 18630). Or the persons in whose favour cheques were issued.

ii) Record statement of person i.e. Account holder No. 18630 u/s.131 so as to establish whether he/she has any knowledge, relationship or acquaintance, business or personal with the appellant and under what circumstances he had introduced the account. While recording his statement please establish as to whether he knew the person whose photograph was pasted or the appellant.

iii) Record statement of person i.e. recipients of cheque payments from this account u/s.131 so as to establish whether he /she has any knowledge, relationship or acquaintance, business or personal with the appellant and under what circumstances they had received the impugned amount monies from appellant.

iv) Record statement u/s.1231 of the person who was bank manager on the date of opening of account opening who has authorized opening of this account as to how against name and address of appellant, photograph of some other lady was pasted on the account opening form and also inquire from the bank as to what evidence towards residential proof indicated in the bank account was obtained at the time of account opening. v) Conduct inquiries from the Assessing Officer of Central Circle as to whether any loan or gift was given by appellant to Salasar Laminates Pvt. Ltd. and if yes, relevant copies thereof.

ITA No.126/Ahd/2017 and 3 Others 4 7. You are further requested to conduct all or any other inquiries which you deem fit so as to prove the hypothesis observed by me in para-5 above. Your report on the matter should reach this office on or before 31.10.2013."

The Bank Manager, Bank of India, New Cloth Market, Raipur, Ahmedabad was specifically requested to provide the information/ details/ name of persons, addresses etc. in respect of persons about whom the inquiry was required to be conducted as per your directions. The details were called for under the provisions of section 133(6) of the I. T. Act, 1961. The report mentioned below is based on the details provided to this office. Para 6(1) to record the statement of appellant.

The statement of Smt. Alpaben Nitinkumar Shah was recorded on 13.12.201. There was direct question about the opening / having the S. B. account with Bank of India, New Cloth Market Branch, Raipur, Ahmedabad. She has categorically denied to have opened the account or having S. B. account with Bank of India, New cloth Market Branch, Ahmedabad.

The question regarding Shri Chetankumar Kantilal Shah who has given introduction to open the account was asked to her. Whether she knows him and have any kind of personal or business relation with him. She has stated that she does not know any Chetankumar Kantilal Shah or she has no any personal or business relation with him. She was asked do you want to say anything in this regard. She has clarified that she has not done any transactions through the bank account in respect of which the question was asked. Further, it was reported by her that she has lodged a complaint on 13.01.2013 in Karanj Police Station, Ahmedabad City, Ahmedabad and she has

ITA No.126/Ahd/2017 and 3 Others 5 called for details under RTI Act from Bank and Income Tax Department.

It was further reported by her that she is getting threatening telephones from the numbers mentioned below. 1. 9227166448 2. 9737896913

Secondly, it was reported by her that her PAN has been misused and she is being harassed unnecessarily. Para 6(2) to record the statement of persons i.e. account holder number 18630.

As per details obtained from bank u/s. 133(6) of I.T. Act, 1961 Shri Chetankumar Kantilal Shah who is holding S. B. A/c. No. 18630 was summoned and requested to attend the office of the undersigned. His address is as under: Near Old Post Office, Jain Derasari, At and Post. Vaso, Tal. Nadiad. Pin. 387380. Shri Chetankumar Kantilal Shah has given signature as introductory to open the account of appellant in Bank of India. He was directed to attend the office of the undersigned on 11.12.2013 by letter and summon dated 29.11.2013. The letter / summon was sent by Speed Post. The postal department returned the cover with endorsement "Expired". Accordingly, fresh letter/summon dated 24.12.2013 was issued to Shri Chetankumar Kantilal Shah. The Ward Inspector was directed vide this office letter dated 24.12.2013 to serve letter/ summon and to inquire about his existence in this world. The Ward Inspector has reported that the residential house of Shri Chetankumar Kantilal Shah remains closed and further reported that as per inquiry conducted from neighbors, Shri Chetankumar Kantilal Shah expired since long. The said premises are closed since last three -four years i.e. after death of Shri Chetankumar Kantilal Shah. His wife and son have shifted to Ahmedabad and staying at Vatva after death of Shri Chetankumar Kantilal Shah. So practically it was not possible by Ward Inspector to collect any further details or death certificate etc. or present address of his wife and son. Para 6(2) to record the statement of Shri Indrakumar D. Agarwal.

ITA No.126/Ahd/2017 and 3 Others 6 Shri Indrakumar D. Agarwal has signed or given his signature at the time of opening the account of Shri Chetankumar Kantilal Shah. His S. B, Account number is 17953. His residential address, as provided by Bank is as under: House No. 14A, Sarvoday Park, B/h. Balaji no Kuvo, B/h. Bhikshuk Gruh, . Odhav, Ahmedabad He was directed to attend the office of the undersigned on 11.12.2013 vide letter/ summon dated 29.11.2013. He has not attended or not made any compliance on the date of hearing. Accordingly, Ward Inspector was directed vide letter dated 19.12.2013 to get the letter/ summon served upon Shri Agarwal. It has been reported by Ward Inspector/ T.A. vide letter dated 27.12.2013 that Shri Indrakumar Agarwal is on death bad, he is not able to move as he is suffering from paralysis and his leg is effected for gagaring. His wife has accepted the letter/ summon and stated that he will not be able to attend the office. In this circumstances, it-is not practically possible to record his statement. Para 6(3) - To record the statement of persons i.e. receptionist of cheques payment from appellant' s account. The copy of bank account statement in respect of S.B. account number 18723 in the case of Smt. Alpaben N. Shah was obtained from the bank for the period 01.04.2004 to 31.03.2005. The scrutiny of said bank statement reveals that amount of cash deposited was withdrawn immediately after cash deposited. It is seen that there are number of persons whose accounts the fund was transferred. It is seen that every time the fund is transferred to different persons account. There are 65 persons in whose accounts the fund was transferred. It was told by the bank authority that it is old matter and practically it is not possible to trace out account of all these persons because they are not having account in this bank. These details can be available from the persons who have managed to transfer the fund. In these circumstances, it is not practically possible by this office to record the statement of persons in whose accounts the fund was transferred. Para 6(iv) - To record the statement of persons who was bank manager on the date of opening the account of appellant. The Present bank manager/ officer in-charge was specifically requested to furnish the details u/s. 133(6) of I.T. Act, 1961 vide this office letter dated 24.10.2013. It was reported vide letter dated 30.10.2013 that

ITA No.126/Ahd/2017 and 3 Others 7 the matter is about 10 years old and records have been called for. It was requested to give time for 10 days vide bank's letter dated 30.10.2013 received in this office on 21.11.2013. Thereafter telephonically inquiry was made but it was reported that it is old matter about 10 years or so and very difficult to have such details. Para 6(v) - To conduct inquiry from A.O., Central Circle - 1(3), Ahmedabad as to whether any loan or gift was made by appellant to Salasar Laminates Pvt. Ltd. The case records were with ACIT, Central Circle - 1(3), Ahmedabad. The said A.O. was specifically requested vide this office letter dated 27.09.2013 to furnished the details. There was no compliance. As such reminder letter dated 24.10.2013 was sent. However there was no response hence personal inquiry was made in the office of the ACIT, Central Circle - 1(3), Ahmedabad. It was ascertained that the case records have been transferred to OSD, circle - 8, Ahmedabad. The said A.O. was requested vide this office letter dated 19.11.2013 to comply by 30.11.2013. There was no compliance hence reminder dated 23.12.2013 was sent. The report is awaited. I hope above clarification/details will meet with your requirements.”

“In response to this the appellant has submitted a rejoinder vide letter dtd. 14.09.2016, which is reproduced as under: -

With reference to the above referred remand report submitted before your goodself by Ld. ITO Ward 5(3) (1), Ahmedabad, the copies which have been provided to me, I have to state as under: 1. The bank official refused to provide any documents i.e. bank account opening form, bank statement for the relevant period etc. or details stating the reason that since the account did not belong to us, they could not provide the same. So, we had no details which we could produce before the Ld. ITO. In spite of being repeatedly intimated about the fact, the fraudulent nature of transactions and himself having documents relating to the above referred bank

ITA No.126/Ahd/2017 and 3 Others 8 accounts and, the Ld. AO never attempted to simply verify the basic facts i.e. photo and signature on Account Opening Form and PAN with that of ours, details of introducers to the account, area of residence where we used to reside i.e. Paldi and the branch i.e. New Cloth Market where the account was opened and other relevant facts. 2. The Ld. ITO did not care to call various parties concerned like bank officials, the persons who had opened and operated the account and record their statements. 3. The Ld. ITO did not care to call the persons who introduced the account and record their statements. 4. The Ld. ITO in spite of knowing the fact about our FIR filed to Kagdapith Police Station, Ahmedabad to investigate matter, did not try to inquire anything as to the facts of the case and the status of the investigation. You honour may please note that had we been at fault we could not have filed the FIR and pursued the matter with various authorities like RBI Banking Ombudsmen, Enforcement Directorate, Investigation Unit-I, Ahmedabad, FIR to Kagdapith Police Station, Ahmedabad and Metropolitan Court of Ahmedabad, 5. The Ld. ITO did not make any efforts to verify the details and facts of the case which in her wisdom and authority she can do and simply sitting in her cabin had prepared the remand report without considering the facts and exercising her authority to verify the veracity of the documents, identity of the people who opened and operated the accounts, who became witness for opening the account and the authorities who allowed such account to be opened and operated, the persons who were involved in the fraudulent transactions etc. The above facts show clear negligence on the part of Ld AO and lack of application of the mind and the principles of natural justice. The remand report so prepared and submitted before your goodself is without considering and verification of the facts of the case and devoid of the factual position of the case and hence we request your goodself not to consider the same while disposing the appeal.”

3.7. The facts of the case and the submissions are considered. The case of the AO is that the assessee had deposited cash amounting to Rs.45,25,600/- in the bank account with BOI, Ahmedabad and the assessee has failed to explain the source of these deposits. The assessment in this case was reopened on the basis of information and details that the assessee is an entry provider to the director of Salasar Laminates Group and their relative by way of alleged gift and he had

ITA No.126/Ahd/2017 and 3 Others 9 deposited substantial cash in the bank account. On the other hand the case of the appellant is that this account doesn’t belonged to her and she has never opened this bank account. The main contention of the appellant is that she has not submitted any documents to any party in connection with the same and not carried out any transactions in that account and that was purely on account of fraudulent account obtained by somebody on her behalf to carry out transactions. The appellant has also filed FIR before the Kagdapith Police station and complaint filed before Metropolitan Magistrate. The investigation of Police is still pending. The appellant has also made inquiries from the bank authorities which are also pending. The only basis of the contention of the appellant that account is not belonged to her is that the photograph affixed on the account opening form is not that of the assessee but that of some other lady and signature appearing in the account opening form defers from the signature on PAN Card. Other than this the assessee has failed to provide any concrete evidence to substantiate her claim that the transaction made in the BOI do not pertained to her. Mere filing of statement and proof for filing petitions before various authorities are not sufficient to conclude that the bank account in question as well as transactions made there from do not belonged to her. All documentary evidences such as PAN, name and address of account holder etc. in the bank account indicates pertaining to the appellant. The primary onus on the assessee which has not been discharged by the assessee. Neither bank authorities nor police investigation have indicated that this bank account does not belong to the appellant. Without any substantial evidences and documents, it cannot be said that bank account is fraudulently opened by some other person in the name of the appellant The appellant has taken this plea that the account doesn't belonged to her first time during the appellate proceedings. A perusal of assessment order shows that the AO has given sufficient opportunities to the assessee to explain the details of source of cash deposits in the bank account however, assessee failed to comply with the notices issued by the AO. During the appellate proceedings the appellant has simply stated that she is a layman and housewife and could not understand the notices issued by the ITO and her husband on behalf of her verbally explained the basic facts of the case that the account alongwith the entries therein never belonged to her. This shows that the assessee has intentionally avoided the compliances during the assessment proceedings. Now she came with the plea that appellant doesn't belongs to her that also without any substantial and concrete basis. All these circumstances indicates that the appellant is not able to explain the source of the cash deposited in the bank account as all documentary evidences shows that the account

ITA No.126/Ahd/2017 and 3 Others 10 belongs to the appellant and she has failed to explain the source of deposits made therein, the view taken by the AO that these deposits are unexplained is correct. Considering all these facts, the addition made by the AO is justified and the same is confirmed. Thus the grounds of appeal is dismissed.”

“6.1 Scrutiny of the account opening from reveals that the photograph affixed on the account opening form is not that of the assessee but that of some other lady. Likewise, signature appearing in the account opening form differs from the signatures on PAN Card and Identity Card issued by Election Commission. However, name address and PAN are that of the assessee. Therefore, until and unless further investigation is made, it is practically impossible to arrive at a conclusion whether the account opening form pertains to the assessee and the bank account in question was actually operated by the assessee. The assessee has not submitted any concrete evidences which could prove that the savings Bank account and the cash deposits made in the said bank account for the A.Y. 2005-06 do not belong to her. The primary onus is on the assessee to prove/disprove transaction.”

8 A perusal of the above report would indicate that the AO himself was not satisfied with the quality of evidence collected by him or produced before him in order to resolve that these accounts belong to the assessee. He was of opinion that further investigation is required. The ld.CIT(A) confirmed the addition, as if it was the onus of the assessee to prove that these accounts do not belong to them. Onus upon the assessee was to prove from where the amounts have been deposited in the accounts. But it is

ITA No.126/Ahd/2017 and 3 Others 11 for the AO first to establish that these accounts belonged to the assessee. What poor fellow can do except bringing into notice of all the authorities. They have lodged FIR. They have made complaints to the bank; they have pointed out to the AO that if the investigation agencies like Police or the AO cannot conclusively establish that these accounts belongs to the assessee, or to someone, how these two assessees can prove that fact ? Therefore, in the above circumstances, we deem it appropriate to remit this issue back to the file of AO for carrying out further investigation. It is for the Revenue first to establish that these accounts belong to the assessee. They cannot be expected to prove negative that these accounts do not belong to them. In law negative cannot be proved nor can be expected. Therefore, we set aside all the orders in both the assessment years, and restore this issue to the file of the AO for re-adjudication.

Order pronounced in the Court on 15th February, 2019.

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

Ahmedabad; Dated 15/02/2019