ITO, KOTA vs. MAHESH GUPTA, KOTA

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh Hkkxpan] ys[kk lnL; ,oa Jh dqy Hkkjr] U;kf;d lnL; ds le{k BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM vk;dj vihy la-@ITA No. 734/JP/2014 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke Income Tax Officer, Mahesh Gupta, Vs. Ward 2(2), Chh-4, Sabarmati Colony, Kota. Kota. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABXPG 5078 J vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 742/JP/2014 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke Mahesh Gupta, Income Tax Officer, Vs. S/o- Ramesh Chand Gupta, Ward 2(2), Kota. K-10, Sabarmati Colony, Kota, (Rajasthan). LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABXPG 5078 J vihykFkhZ@Appellant izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by : Smt. Neena Jeph, (JCIT). fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Yadav (Adv) lquokbZ dh rkjh[k@ Date of Hearing : 07/04/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 28/04/2017 vkns'k@ ORDER PER: BHAGCHAND, A.M. These are the cross appeals, one by the revenue and another by the assessee emanates from the order of the ld. CIT(A), Koat dated

ITA 734 & 742/JP/2014_ 2 ITO Vs. Mahesh Gupta

21/08/2014 for the A.Y. 2010-11, wherein the revenue and the assessee

has taken following grounds of appeal:-

Ground of revenue’s appeal in ITA No. 734/JP/2014

“(i) Deleting the addition of Rs. 31,55,400/- out of total addition of Rs. 49,60,590/- on account of unexplained cash deposit in bank.” Grounds of assessee’s appeal in ITA No. 742/JP/2014

“1. That under the given facts and circumstances and in law, the ld. CIT(A) grossly erred in considering the amount of Rs. 16,00,000/- as income which was received as advance of sale of land and later refunded on account of cancellation of deal due to non payment of last installment.

total income of Rs. 9,38,860/- was filed by the assessee on 30/07/2010.

The assessee derived income from salary, rent and other sources. The

Assessing Officer made addition of Rs. 49,60,590/- on account of

unexplained bank deposit and Rs. 2,39,432/- on account of unexplained

ITA 734 & 742/JP/2014_ 3 ITO Vs. Mahesh Gupta

cash credit. The ld. CIT(A) granted part relief on account of deposit in bank

account and both sides are in appeals on this issue

on the common issue where ld. CIT(A) has partly deleted the addition and

partly sustained on account of cash deposited in the bank account. At the

outset of hearing, the ld AR has submitted that the tax effect in revenue’s

appeal is below threshold limit of Rs. 10.00 lacs, therefore, the same is not

maintainable. The ld DR was not having any different view in this regard.

Admittedly, the tax effect in revenue’s appeal is below the threshold limit of

Rs. 10.00 lacs, therefore, the same is not maintainable in view of the

Board’s circular and the revenue’s appeal is hereby dismissed.

3.1 On the ground No. 1 of the assessee’s appeal, the ld AR has

submitted that this issue has been already decided by the ITAT, Jaipur

Benches, Jaipur in the case of Shri Naresh Gupta Vs ITO in ITA No.

743/JP/2014 order dated 30/08/2016. He has drawn our attention towards

paragraph No. 6.5 of the order of the ITAT, which reproduced hereunder:-

“6.5 I have heard the rival contentions and perused the materials available on record. It is observed that the A.O. made an addition of Rs. 23,94,000/- as mentioned in the assessment order in the case of the assessee because of non-furnishing the details of the amounts deposited in the banks and the

ITA 734 & 742/JP/2014_ 4 ITO Vs. Mahesh Gupta

same was treated as unexplained income of the assessee. in appeal, the ld. CIT(A) observed that the assessee had failed to explain the source of Rs. 6,91,550/- which included Rs. 6.00 lacs claimed to have been received from Shri Rang Lal and Rs. 91,550/- treated as unexplained out of opening cash balance of Rs. 2,41,550/-. It is noted further that this ground of appeal relates to confirmation of addition of Rs. 6.00 lacs by the ld. CIT(A) as the A.O. had taken into consideration the amount of Rs. 6.00 lacs as unexplained income of the assessee in the garb of investment. From the records, it is observed that Shri Rang Lal appeared before the A.O. and confirmed that he had entered into a land deal of 9 bigha with the assessee and his brother. The total consideration was to the tune of Rs. 38 lacs for which Shri Ranglal had advanced an amount of Rs. 6 lacs as per pages 17 and 18 of the assessee’s paper book. It is also noted that the assessee had returned the amount of Rs. 6.00 lacs to Shri Ranglal in cash in July, 2010 (page 59 of APB) and this fact was noted by the A.O. in the assessment order. It is also observed from the statement of Shri Ranglal that a sum of Rs. 2.00 lacs was not paid by the assessee. The assessee submitted that the sum of Rs. 2.00 lacs was forfeited because of not complying with the terms of agreement for purchase of land from the assessee. Considering the entirety of the facts and circumstances of the case and the case laws relied upon by the assessee (supra), the addition confirmed by the ld. CIT(A) is directed to be deleted. Thus, ground No. 1 of the assessee is allowed.”

ITA 734 & 742/JP/2014_ 5 ITO Vs. Mahesh Gupta

Facts of this case being the same, therefore, we respectfully following the

decision of the Tribunal, we allow this ground of the assessee’s appeal.

of Rs. 2,05,190/- as unexplained income out of the opening cash balance

as on 01/4/2008 at Rs. 4,05,190/-. In this regard, the ld AR has submitted

that this case was selected for limited scrutiny and therefore the Assessing

Officer should not have made any other addition except the issue on which

it was selected for scrutiny. However, from the records, it is found that this

case was selected for scrutiny under CASS and in the cases selected for

CASS system, there is no binding of circular as relied by the ld. AR. The ld

CIT(A) has dealt this issue as under:-

“It was seen that assessee has claimed opening cash balance of Rs. 4,05,190/- as on 01/4/2008. The assessee claimed that opening cash balance as on 01/4/2009 was Rs. 4,32,690/-. The assessee submitted a cash flow statement from 01/4/2008 to 31/3/2010 showing various drawings, savings and income.

The claim of opening balance as on 01/4/2008, was not supported by any evidence except assessee’s claim that it was filing income tax return since 1995-96 and in A.Y. 2009-10, it has declared income of Rs. 7,11,680/-.

ITA 734 & 742/JP/2014_ 6 ITO Vs. Mahesh Gupta

In the A.Y. 2010-11, assessee has shown income of Rs. 14,70,000/- and claimed expenses of Rs. 14,66,000/- which shows that assessee had, practically, no saving during the year.

Assessee had huge personal borrowings on which he was paying interest. The assessee has also taken huge loan from banks on which also he was paying interest. It is difficult to believe that a person having huge cash balance would borrow money on interest. Considering the above, I am of the opinion that opening cash balance as on 01/4/2008 can be at best taken at Rs. 2.00 lacs.”

supporting document provided with regard to the opening balance as on

01/4/2008. The ld. CIT(A) has rightly observed that the assessee has

shown income of Rs. 14,70,000/- for the assessment year 2010-11 and has

claimed expenses of Rs. 14,66,000/-, thus, there was any savings for the

year under consideration. The ld. CIT(A) has also observed that the

assessee has huge personal borrowings on which he was paying interest.

The assessee has also taken huge loan from the banks on which also he

was paying interest. In such a situation, it was held that the claim of the

assessee that he was having such huge cash balance and was also

borrowed money from the bank, was not accepted. In absence of any

further document, we find no merit in the ground of assessee’s appeal,

therefore, the same stands dismissed.

ITA 734 & 742/JP/2014_ 7 ITO Vs. Mahesh Gupta 6. Ground No. 3 of the assessee’s appeal is general in nature and does not require any adjudication, therefore, the same is hereby dismissed. 7. In the result, the appeal of the revenue is dismissed and appeal of the assessee is partly allowed. Order pronounced in the open court on 28/04/2017.

Sd/- Sd/- ¼dqy Hkkjr½ ¼Hkkxpan½ (Kul Bharat) (BHAGCHAND) U;kf;d lnL;@ U;kf;d lnL;@Judicial Member ys[kk lnL;@ U;kf;d lnL;@ U;kf;d lnL;@ ys[kk lnL;@ ys[kk lnL;@Accountant Member ys[kk lnL;@ Tk;iqj@Jaipur fnukad@Dated:- 28th April, 2017

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सहायक पंजीकार@Aेेज. त्महपेजतंत