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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’, NEW DELHI
Before: SH. H.S. SIDHU & SHRI N.K. BILLAIYA
This appeal is filed by the Assessee against the order dated 03.11.2014 passed by the Ld. CIT(A)-XVII, New Delhi relating to assessment year 2008-09 on the following grounds:-
That under the facts and circumstances, there is no justification
and legality for addition of Rs. 12,03,000/- being total of cash deposited on various dates in Kotak Mahindra Bank, New Delhi. 1
The AO further erred in holding that Rs. 12,03,000/- has been deposited in single installment on 31.3.2008.
2. That under the facts and circumstances, the Ld. CIT(A) erred in sustaining addition of Rs. 11,01,000/- as alleged unexplained
investment in share transactions out of total addition of Rs.
65,79,197/- made by the AO. The complete investment stands fully explained.
The brief facts of the case are that assessee filed its return of income on 17.2.2009 declaring an income of Rs. 2,00,000/- which was processed u/s. 143(1) of the Income Tax Act, 1961 (in short “Act”). The case of the assessee was selected for scrutiny assessment through CASS and accordingly statutory notice u/s. 143(2) of the Act dated 14.9.2009 was issued and served upon the assessee. In response, the AR of the assessee attended the proceedings from time to time and filed the necessary details. During the year under consideration, assessee has shown income under the head salary from M/s Paragon Tradex Overseas Pvt.Ltd. Relevant details were examined, but AO observed that the assessee did not file the State of Affairs as on 31.3.2008 and 31.3.2007.
AO further observed that one single cash transaction of Rs. 12,03,000/- on 31.3.20008 with M/s Kotak Maindra bank Ltd., 229, Bakhtwar NCPA Marg, Nariman Point, Mumbai was made. In this regard, AO issued show cause notice to the assessee and in response to the same the assessee filed a letter dated 28.12.2010 submitted an affidavit stating therein that the cash transaction amounting to Rs. 12,03,000/- is not relevant to 2 him. AO observed that since the assessee has not filed complete details of bank accounts maintained by him during the period under consideration, and other documents like balance sheet, profit and loss account and statements of affairs etc, hence, in the absence of these documents / details the source of cash deposit cannot be treated as explained in the hands of the assessee merely on the basis of filing of affidavit. Hence, the cash deposit amounting to Rs. 12,03,000/- remain unexplained in the hands of the assessee and was added by the AO, which was upheld by the ld. CIT(A). Further, the AO added the share transaction for Rs. 65,79,187/- holding that the source of investment is unexplained and Ld. CIT(A) deleted the whole addition except Rs. 11,01,000/- on the ground that investment to this extent remains unexplained. Against the Ld. CIT(A)’s action, the assessee is in appeal before the Tribunal.
Ld. Counsel for the assessee stated there is no justification and legality for addition of Rs. 12,03,000/- being total of cash deposited on various dates in Kotak Mahindra Bank, New Delhi. He further submitted that the AO further erred in holding that Rs. 12,03,000/- which has been deposited in single installment on 31.3.2008. He further submitted that Ld. CIT(A) erred in sustaining the addition of Rs. 11,01,000/- as alleged unexplained investment in share transactions out of total addition of Rs. 65,79,187/- made by the AO. The complete investment stands fully explained, hence, the additions in dispute may be deleted and appeal of the assessee may be allowed.
On the other hand, Ld. DR strongly relied upon the order of the Ld. CIT(A) and stated he has passed a well reasoned order, which does not need any interference on our part.
We have heard both the parties and perused the records especially the impugned order. With regard to ground no. 1 relating to addition of Rs. 12,03,000/- being total of cash deposited on various dates in Kotak Mahindra Bank, New Delhi is concerned, we find that in Kotak Mahindra Bank, total cash deposited in the year was Rs. 12,03,000/-. The AO added the same as not satisfied with the source and Ld. CIT(A) confirmed the findings of the AO. We note from the assessment order that it is a single cash deposit transaction of Rs. 12,03,000/- on 31.3.2008. However, it is the total amount of cash deposits on large number of dates in the said bank during the year which is Rs. 12,03,000/-. However, the complete cash is out of the cash in hand as per cash a/c of whole year. No discrepancy pointed out in the said cash account and the source of cash deposit is out of cash in hand. The main source of cash availability is the cash withdrawal from the same bank account as apparent from the cash account and bank statement. Hence, the addition sustained by the Ld. CIT(A) is explained and accordingly the same is deleted.
5.1 With regard to ground no. 2 relating to sustaining the addition of Rs. 11,01,000/- on account of unexplained investment in share transactions is concerned, we find that the AO added share transactions for Rs. 65,79,187/- holding that the source of investment is unexplained and this amount included Rs. 11,01,000/- paid from Kotak Mahindra Bank to India Bulls on 15.9.07 and also the ld. CIT(A) deleted the whole addition except Rs. 11,01,000/- on the ground that investment to this extent remains unexplained. It is noted that Rs. 11,01,000/- paid to India Bulls from Kotak Mahindra Bank through Banking channel on 15.9.2007. It was the initial first payment to India Bulls as a margin money for commencement of share transactions with India Bulls, after which no further payment was made during the year and the account stood periodically settled only through the sale proceeds of shares. In view of above, the Kotak Mahindra Bank stands fully explained during assessment. Even specifically, the source of Rs. 11,01,000/- is mainly following two immediate preceding credits in the bank namely:-
Rs. 6,72,534/- on 10.9.2007 Rs. 4,83,489/- on 11.9.2007 Total Rs. 11,56,023/- 5.2 Even the source of these two credits stood explained.
Rs. 6,72,534/- was taken from loan from ICICI bank and the loan cheque was deposited in Kotak Mahindra Bank. Rs. 4,83,489/- loan taken from HDFC Bank (appearing in HDFC Bank statement on 30.8.07, however, cheque no. 984643 matches in HDFC Bank statement as well as in Kotak Mahindra Bank statement). Hence, the source is very apparent and clear and accordingly the addition in dispute is hereby deleted.
In the result, the Appeal of the Assessee is allowed.
Order pronounced on 20-11-2018.