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Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI O.P. KANT & SHRI KULDIP SINGH
This appeal by the Revenue is directed against order dated 02/02/2015 passed by the Ld. Commissioner of income tax (appeals)- 1, Gurgaon [ in short the Ld. CIT(A)] for assessment year 2010-11 raising following grounds: 1. “The order of CIT(A) is perverse and bad in law
2. On the facts and circumstances of the case, the CIT(A) has erred in fact and in law in deleting the addition of Rs. 36,70,000/-.
On the facts and circumstances of the case, the CIT(A) has erred in fact and in law in holding that the amount of Rs. 36,40,000/- was withdrawn on various dated by the assessee from hsi saving bank account no. 056010100560689. No proof substantiating these withdrawals is placed on record. 4. On the facts and circumstances of the case, the CIT(A) has erred in fact and in law as no evidence has been furnished to prove the source of cash deposit available with Sh. Ishwar Singh from whom the cash is received as a result of cancellation of deal. 5. The appellant craves leave to add, amend, alter, discard any of the grounds of appeal
at the time of hearing.”
2. Briefly stated facts of the case are that the assessee, an individual filed return of income on 28/03/2012 declaring total income of Rs. 5, 31,000/-. The case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 (in short the Act) was issued and served on the email ID given in the return of income filed. Though on the date specified in the notice, no one attended on behalf of the assessee, however later on assessee filed reply through Ayakar Sewa Kendra (ASK). Again the Assessing Officer issued a letter giving fresh opportunity on 20/12/2012 alongwith notice u/s 142(1) raising various queries. The assessee alongwith his counsel attended the proceedings and case was adjourned on his request. But none attended on the date of hearing fixed i.e. 24/12/2012. In the case of the assessee, the Assessing Officer received information from the 2 Annual Information Return (AIR) filed by one of the bank that the assessee deposited cash amounting to Rs. 36,70,000/- in his saving account. The Assessing Officer also received information from the CIB wing of the Income Tax Department that assessee had deposited cash amounting to Rs. 36,40,000/-in his saving accounts. The Assessing Officer issued a final show cause letter to the assessee to explain the source of the deposits in bank accounts and also justify other deduction claimed. No compliance was made on the part of the assessee and thus the Assessing Officer held both the amount of Rs. 36,70,000/-and Rs. 36,40,000/-as income from undisclosed sources and added the amount of Rs. 73,10,000/- to the taxable income of the assessee. Aggrieved, the assessee filed appeal before the Ld. CIT(A) and claimed that information received from both the sources i.e. AIR and CIB pertained to same set of bank accounts and the amount of deposits of Rs. 36, 40,000/- in question in CIB information is covered by the deposits of Rs. 36,70,000/- reported in AIR information. The assessee claimed that he advanced Rs. 36,40,000/- between the period from 10/01/2009 to 10/06/2009 to Sh. Ishwar Singh for purchase of the land. However the deal could not be materialised and Sh. Ishwar Singh returned the said advance of Rs. 36,40,000/- back to the assessee, which was deposited in the bank accounts maintained with the Axis Bank. . The source of advance paid was explained as out of the withdrawals from those bank accounts .The assessee also filed copy of bank statements, copy of the agreement of purchase of land etc. in the form of additional evidences under rule 46A of Income Tax Rules, 1962 (in short the Rules). The Ld. CIT(A) forwarded the documents filed by the assessee to the Assessing Officer calling for objection to admitting the additional evidence and comment on the merit of the additional evidences. In the remand report, the Assessing Officer did not object to the admitting of the additional evidences. But the Assessing Officer observed that cash payment was mentioned in the purchase agreement on various dates but corresponding withdrawals was not explained in the statement of two bank accounts number 056010100655170 and 056010100560696, filed in the form of additional evidences. He also raised doubt on the transaction of purchase agreement dated 10/06/2009 and cancellation and return of the money to the assessee between 17/06/2009 to 26/06/2009. The assessee made a detailed rejoinder to the Ld. CIT(A) on the remand report and tried to justify cash deposits of Rs. 36, 70,000/-in three bank accounts maintained with the Axis Bank. On the basis of the detailed submissions in rejoinder, the Ld. CIT(A) accepted the contention of the assessee that deposits referred in CIB information of Rs. 36,40,000/-are covered by the deposits of Rs. 36,70,000/- mentioned in AIR information and held that the Assessing Officer made double addition in respect of the same deposits. According to the Ld. CIT(A) the assessee deposited said sum of Rs. 36, 70,000/-in bank accounts out of the advance of Rs. 36, 40,000/-returned by Shri Ishwar Singh and other sums available with him. The source of Rs. 36, 40,000/-for making advance was also held to be explained by the Ld. CIT(A) except a small amount of Rs. 1, 30,000/-and accordingly sustained addition of Rs. 1 ,30,000/- and deleted the balance addition out of Rs. 73, 10,000/-.
3. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds is reproduced above.
The Ld. DR submitted that one of the bank account out of the three bank accounts was not forwarded to the Assessing Officer during remand proceedings and, therefore, the Ld. CIT(A) has violated the provisions of rule 46A of the rules. According to him the Ld. CIT(A)
has decided without any comments of the Assessing Officer on third bank account number 056010100560689 maintained with the Axis Bank, in which part of the deposits (Rs. 11,70,000/-) in question were made. According to him the source of alleged money advanced to Shri Ishwar Singh for purchase of the land has not been explained by the assessee satisfactorily and, therefore, either the addition must be sustained or the issue in dispute may be restored to the file of the Assessing Officer for deciding a fresh. The DR also relied on the decision of Hon’ble Delhi High Court in the case of Krishan Kumar Sethi vs. CIT reported in (2018) 92 taxman.Com 324 (Delhi.) 5. On the other hand, the Ld. Counsel of the assessee filed the paper book containing pages 1 to 15, which included copies of bank statement of the three bank accounts . The Ld. Counsel relying on the order of the Ld. CIT(A) submitted that the assessee satisfactorily explained the source of cash deposit in question and thus the order of the Ld. CIT(A) might be upheld.
We have heard the rival submissions and perused the relevant material on record. In the facts of the case mentioned in the earlier part of the order, the two issues arise. The first issue is whether the deposits mentioned in the CIB information is covered by the deposits mentioned in information received from AIR. The second issue is whether the source of the cash deposits has been explained by the assessee. The Ld. CIT(A) has decided both the issue in favour of the assessee.
On perusal of the bank statement filed in the paper book , we find that same are either not bearing the account number or the stamp of the issuing bank. The bank statements are also not for the complete financial year. In the bank account certain receipts are appearing . The fact whether those receipts have been considered in the return of income filed is also not clear from the record available before us .We also note that during first appellate proceeding, the assessee filed bank statement of three bank accounts of the Axis Bank as additional evidence in terms of rule 46A of the rules, however only two bank accounts were made available to the Assessing Officer for his comments. This fact is evident from the submission of the assessee in the rejoinder reproduced by the Ld. CIT(A) on page 7 of the impugned order . For ready reference same is reproduced as under : “Sir, the relevant bank statements were attached with the petition filed under rule 46A but in case the same have been left or misplaced, the same bank statements are attached herewith this rejoinder evidencing the payments/withdrawals, which shall evidence the matter absolutely clear.” As per the rule 46A(3) of the rules, the Ld. CIT(A) cannot take 8. into account any additional evidence unless Assessing Officer has been allowed a reasonable opportunity to examine the said evidence. The relevant rule is reproduced as under: “(3) The first appellate authority shall not take into account any evidence produced under sub-rule (1) unless the first appellate authority been allowed a reasonable opportunity— a. to examine the evidence or document or to cross-examine the witness produced by the appellant, or b. to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant”
In view of the above , it is evident that the Ld. CIT(A) has admitted the additional evidence and decided the appeal without providing a reasonable opportunity to examine the said evidence, including violation of the rule 46A(3).
In view the above facts and circumstances, we feel it appropriate to restore the issue in dispute of cash deposits to the file of the Ld. Assessing Officer for deciding a fresh, with the direction to the assessee to produce complete bank statements and other evidence relied in support of his contention that the money deposited in bank accounts stands explained. It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. 11. In the result, appeal of the Revenue is allowed for statistical purposes. This decision was pronounced in the Open Court on 16th November, 2018.