ANISHA R.DHANANI,,MUMBAI vs. THE ACIT, CIRCLE-1(2),, BARODA

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri S. S. Godara, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 3294/Ahd/2014 Assessment Year 2006-07

Anisha R. Dhanani, The ACIT, Flat No. 281, 28th Floor Circle-1(2), Kalpataru Heights, Vs Baroda Mahalaxmi, Mumbai (Respondent) PAN: ACTPD3111C (Appellant)

Revenue by: Shri S.K. Verma, Sr. D.R. Assessee by: Shri Surendra Modiani, A.R.

Date of hearing : 20-12-2017 Date of pronouncement : 08-02-2018 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

This assessee’s appeal for A.Y. 2006-07, arises from order of the CIT(A)-I, Baroda dated 12-09-2014, in proceedings under section 271(1)(c) of the Income Tax Act, 1961; in short “the Act”. 2. The assessee has raised following grounds of appeal:- “1. The order of the learned Commissioner(Appeals) is against law and facts. 2. The learned Commissioner(Appeals) erred in confirming the levy of penalty of Rs.2,58,400/-. Your appellant submits that the penalty of Rs.2,58,400/- is not justified and prays that the same be deleted.”

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2,00,000/- was made on 29/04/2005 in HDFC Bank out of opening balance of cash lying with her. Regarding other cash withdrawals from HDFC Bank, ICICI Bank and ABN Amro Bank, it was observed by the AO that the appellant had not furnished any documentary evidence to prove that the opening balance of Rs. 3,32,467/- was available with the appellant. The AO held that no cash balance as contended by the appellant was available with her. As per the AO, in her explanation, appellant has shown cash withdrawal of Rs. 8,00,000/- on 07/06/2005 from HDFC Bank. However, as per the AO such an amount of Rs, 8,00,000/- was paid by the appellant to Sandoz, Mumbai by way of clearing of cheque. Thus, as per the AO, there was no cash withdrawal of Rs. 8,00,000/- on 07/06/2005 from HDFC Bank. As per the AO, on verification it was also found that there was no cash withdrawal from other Banks also. Later on, the Ld. CIT(A) vide his appeal order in appeal no. CAB-I/192/08-09 dated 04/07/2011 directed the AO to accept opening cash balance at Rs. 50,000/- and to rework the day-to-day cash balance. Thus, the Ld. CIT(A) has confirmed the addition to the extent of Rs. 8,24,800/-. The AO in the penalty order u/s 271(1)(c) has mentioned that with regard to cash deposits of Rs. 8,00,000/-, no explanation was submitted by the appellant in compliance to show-cause notice as issued and therefore it was established that the appellant had accepted his faults and she had nothing to say for the same. Thus, the AO levied the penalty u/s 271(1)(c) on addition of Rs. 8,24,800/-. On the other hand, the AR of the appellant in his submission dated 04/09/2014 has mainly stated that the AO has imposed penalty u/s 271(1)(c) of Rs. 2,45,350/- on negative peak credit amounting to Rs. 8,24,800/- during the AY 2006-07. The AR has enclosed with his submission cash balance statement and has stated that from such cash balance statement it can be observed that there was no negative cash balance during the year under review and there was opening cash balance of Rs. 3,32,467/- as on 01/04/2005. Thus, as per the AR there was no peak negative cash credit amounting to Rs. 8,24,800/- during ASSESSMENT YEAR 2006-07, in view of the new fact which came into light during the assessment proceedings u/s 153A. /The appellant has enclosed with his submission the confirmation received from HDFC Bank wherein the Bank has confirmed that on 07/06/2005 cash amounting to Rs. 8,00,000/- was withdrawn vide cheque no. 0134083. 5.2 But the above submission of the appellant is not found to be acceptable. First of all, the confirmation dated 09/09/2014 as submitted by the AR of the appellant from Branch Manager, HDFC Bank is not original. The appellant has merely submitted the copy of confirmation dated 09/09/2014 from the Branch Manager of HDFC Bank wherein it is certified that the appellant had withdrawn cash amount of Rs. 8,00,000/- from her account no. 02401000004429 vide cheque no. 0134083 dated on 07/06/2005. However, in absence of original certificate from the Bank, the submission of the AR of the appellant cannot be accepted. Secondly, the submission of the appellant as made before me at the stage of appellate proceedings is in contradiction to the submission which was made by her before the Ld. CIT(A) at the time of appellate proceedings in respect of quantum addition. The appellant had filed appeal to the CIT(A) against the additions as made by the AO u/s 143(3). The appellant at the time of appellate proceedings in respect of quantum addition clearly accepted the findings of the AO regarding entry of Rs. 8,00,000/- on 07/06/2005. At this place it would be pertinent to reproduce relevant part of decision of the Ld. CIT(A)/on this issue as given by him in his appeal order in appeal no. CAB-1/192/2008-09 dated 04/07/2011 which is in respect of quantum addition: "3.1 In appeal, appellant accepted AO's observation regarding amount of Rs. 8 lakh to be payment to Sandoz Mumbai and submitted that it was a mistake on part of the Accountant. Regarding opening balance of Rs. 3 ,32,467 /- as on 1.4.2005, it was submitted that appellant belonged to a well-to-do family engaged in large business and AO was, therefore, not justified in presuming that appellant would not have a single rupee of cash in hand on first April of the year. The AR further referred to provisions of Wealth

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Tax Act in section 2(ea)(vi) that cash exceeding Rs. 50,000/- only is to be declared in wealth. 3.2 I have considered the matter. Appellant has accepted AO's finding regarding entry of Rs. 8 lakh on 7.6.2005 which is therefore rightly excluded for computing availability of cash. Regarding opening balance, even if appellant did not maintain books of accounts, availability of cash in hand with a person from well-to-do business family cannot be denied. Opening cash balance of Rs. 50,000/- can therefore be accepted. AO would accordingly re-work the day to day cash balance and modify the addition accordingly. " 5.3 As can be seen from the above that the appellant accepted the observation of the AO regarding amount of Rs. 8,00,000/- to be payment to Sandoz Mumbai and she submitted that it was a mistake on part of the Accountant. Surprisingly, the stand i.e. there was in fact cash withdrawal of Rs, 8,00,000/- was never taken by the appellant before the AO at the time of assessment proceedings and before the Ld. CIT(A) at the time of appellate proceedings. On the contrary, the appellant accepted the observations of the AO that the above amount of Rs. 8,00,000/- was paid to Sandoz, Mumbai by way of clearing of cheque. Now, at the stage of appellate proceedings in connection with the penalty matter a different version of AR of the appellant cannot be accepted more particularly in view of the fact that the appellant has already accepted the findings of the AO. If the finding of the AO was not correct, the appellant would have not accepted the same before the AO as well as before the Ld. CIT(A). It can be safely presumed that the appellant accepted the finding of the AO after making due verification of bank statement and other relevant records. Thus, the Ld. CIT(A) in his appeal order has rightly excluded this amount of Rs. 8,00,0007- for computing availability of cash. Thus, it is held that appellant's explanation that the sources of cash deposits as made in HDFC N and ABN Amro was from the cash amount of Rs. 8,00,000/- as withdrawn from the HDFC Bank cannot be accepted. Thus, the fact remains that sources of cash deposits in the above banks could not be explained by the appellant and therefore the AO has correctly levied the penalty on addition of Rs. 8,24,800/- by filing inaccurate particulars of income and therefore the same is confirmed. Thus, all the grounds of appeal of the appellant are dismissed. In result, the appeal of the appellant is dismissed.”

Regarding issue no. 1, we observe that the assessee had showed Rs. 34,17,2,136 as STCG and Rs. 5,94,08,417/- as LTCG. The assessee has furnished details of scrip-wise short term and long term capital gain along with the return of income. However, inadvertently shares purchased from NTPC amounting to Rs. 9,09,486/- and sale thereof of Rs. 1019110/- was included in the statement of long term capital gain on sale thereof. We observe that the assessee has provided entire particulars of transactions with the return of income, however, in respect of transactions in NTPC shares the claim as above was inadvertently made as long term capital gain instead of short term capital

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gain. In respect of second issue the assessing officer observed that source of cash deposit from the cash withdrawal of Rs. 8,00000/- on 07/06/2005 from HDFC Bank was not correct as he was of the view that that aforesaid amount was actually paid to Sandoz Mumbai by cheque on 07/06/2005. We observe that the assessee was able to locate source of cash withdrawal from HDFC on 07/06/2015 of Rs. 8,00000/-. In this connection we further observe that the branch manager of HDFC Sanoz House Branch, Mumbai vide certificate dated 09/09/2014 certified that assessee had withdrawn cash of Rs. 8,00000 vide cheque no. 0134083 dated 07/06/2005. After considering the above facts and circumstances, we find that Ld. CIT(A) has not disproved the correctness of the aforesaid certificate issued by the branch manager of HDFC Bank. Keeping in view of the above facts and circumstances of this case, we observe that the ld. CIT(A) is not justified in sustaining the impugned penalty, therefore, the appeal of the assessee is allowed.