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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
of Shri Ashish Sarkar in and C.O. No.15/RPR/2013, arising out of this appeal, and departmental appeal in ITA No.45/RPR/2013, was framed by the ACIT, Circle-1, (1), Bilaspur for assessment year 2009-10 vide his order dated 30-12- 2011 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
Assessment in the case of the Smt. Reena Roy in was framed by the ITO, Ward-21(3) (4), Mumbai for the assessment year 2009-10 vide his order dated 30-11-2011 u/s 143(3) of the Act.
The only common issue in these appeals and the cross objection is, whether the cash deposits made in the saving bank account amounting to Rs.34.88 lacs is to be assessed in the hands of Mrs. Reena Roy, the assessee in or in the hands of Shri Ashish Sarkar, the assessee in ITA No.120/RPR/2013.
Briefly stated facts are that as per AIR information received by the Department Mrs. Reena Roy, Shri Ashish Sarkar and Shri Rajesh Sarkar are having joint bank account No.246010100068013 in Axis Bank Ltd., Powai Branch, Mumbai during the financial year 2008-09 relevant to this assessment year 2009-10. According to the Revenue, the Assessing Officer of Mrs. Reena Roy, Mumbai and the Assessing Officer of Shri Ashish Sarkar, Bilaspur after verification of bank statement received from Axis Bank Ltd. noted that the assessee has deposited in cash amounting to Rs.16.93 lacs, money transfer of Rs.12.95 lacs and deposits made by cheques of Rs.5 lacs. Accordingly, there was total deposit of Rs.34.88 lacs in all. The AO of Mrs. Reena Roy made additions in the absence of any representation from the assessee. Similarly, the AO of Shri Ashish Sarkar also made addition of Rs.34.88 lacs by stating that the assessee’s explanation is not up to the satisfaction. Aggrieved, both the assessees preferred appeal before the CIT (A).
The CIT (A) of Mrs. Reena Roy at Mumbai confirmed the addition despite the fact that Shri Ashish Sarkar filed an affidavit before CIT (A) of Mrs. Reena Roy dated 25-04-2012 mentioning that the entire deposits belongs to Shri Ashish Sarkar only and not to the assessee i.e. Mrs. Reena Roy. But, the CIT (A) of Shri Ashish Sarkar has not accepted the explanation of the assessee that the bank deposits are recorded in the books of account of the assessee, Shri Ashish Sarkar who is carrying on the business of trading and liaisoning in engineering goods, spare parts of mines, mechanical and electrical appliances. The CIT (A) deleted the addition in the hands of Shri Ashish Sarkar for the reason that the addition has already been confirmed by the CIT (A) in the hands of Mrs. Reena Roy being the first account holder and confirmed the action of the AO.
Now, against the deletion of addition in the hands of Shri Ashish Sarkar, Revenue has filed appeal in ITA No.45/RPR/2013. The assessee also filed appeal in against the order of the CIT (A) not accepting the contentions of the assessee on merits that the transactions are recorded in the books of account of the assessee. This appeal is time barred by 63 days and the assessee has filed a condonation petition stating the reasons. Side by side, the assessee has also filed C.O. No.15/RPR/2013 arising out of Revenue’s appeal taking the same grounds. Mrs. Reena Roy has filed appeal before Tribunal in against confirmation of addition.
Since, the issue is only one i.e. assessment of unexplained cash deposit in the bank account i.e. joint account of Mrs. Reena Roy, Shri Ashish Sarkar and Shri Rajesh Sarkar, amounting to Rs.34.88 lacs, we are disposing of the same by this common order for the sake of convenience.
We have heard the rival contentions and gone through the facts and circumstances of the case. We find that Mrs. Reena Roy from the very beginning has taken the plea that these deposits do not belong to her but belong to her brother, Shri Ashish Sarkar. According to her, this bank account exclusively is utilized by her brother, Shri Ashish Sarkar and he is totally responsible for the deposits made in the same. The learned Counsel for the assessee referred to the affidavit of Shri Ashish Sarkar which is enclosed at pages 3 and 4 of the assessee’s paper book dated 18-06-2013 and the relevant context of the affidavit reads as under:-
“I, Mr. Ashish Niranjan Sarkar having address at Durga Bhavan, Tikrapara, Manu Chowk Main Road, Bilaspur – 495 001, Chhattisgarh hereby solemnly affirm and state as under that:
1. 1. The Axis Bank Account (No.246010100068031: Powai Branch) in which deposits are reflecting is a joint account in the name of Ashish Sarkar, myself, Rajesh Sarkar and Rina Roy.
2. M/s. Sarkar Estate Private Limited is incorporate4d to start construction activity in Mumbai.
3. Money Transfer and Cash deposits reflecting in the said bank account are made by me. Such Cash Deposits are received from my late father Niranjan Sarkar from ancestral property and income from agricultural land and operations thereon.
4. The entire money lying in the above mentioned bank account belongs to me and me only and none else. No other person except has any knowledge or connection or any right regarding the same. All the transactions therein have been done by me and me only and none else. Whatever asset, property, income, expense, or liability of any sort belongs to me and me only and none else.
5. Affidavit is hereby made to comply with the Income Tax Department and Government of India. I, Ashish Sarkar do hereby verify on oath that the contents of the affidavit above are true to my personal knowledge”.
The learned Counsel for the assessee also drew our attention to the remand report in the case of Shri Ashish Sarkar by the AO wherein he has admitted that this deposit is of his own while explaining before the CIT (A) during the remand proceedings. The learned Counsel for the assessee explained that relevant remand report No.DCIT/Cr.1(1)/Bsp/Remand Report/12-13 Bilaspur dated 15-03-2013, which is enclosed at pages 1 and 2 of the assessee’s paper book, clarifies that all these deposits pertain to Shri Ashish Sarkar and nobody else. In view of the above, the learned Counsel stated that the appeal of Mrs. Reena Roy should be accepted and no addition should be made. When it was confronted to the learned Sr. DR, he fairly conceded that this should be added only in the hands of Shri Ashish Sarkar and not in the hands of Mrs. Reena Roy. In terms of the above, we delete this unexplained deposit in the bank Account No. 246010100068013 maintained with Axis Bank Ltd., Mumbai amounting to Rs.34.88 lacs and allow the appeal of the assessee Mrs. Reena Roy.
Coming to the appeal of the Revenue in and the C. O.
No.15/BLPR/2013 of the assessee, arising out of the same, we find that the assessee before the AO has tried to explain these deposits and the AO in his remand report has admitted that these deposits belong to Shri Ashish Sarkar and recorded in his books of account. The relevant portion of the remand report dated 15-03-2013 reads as under:-
“Kindly refer to your office letter dated 15/02/2013 on the subject mentioned above. As directed I have called for the books of accounts of the assessee Shri V. K. Khatri and Shri Manoj Shukla, both FCAs and ARs appeared on behalf of the assessee and produced books of accounts and other relevant documents. On verification of books of accounts it was found that all the transactions in Bank account (No.246010100068031) maintained at AXIS Bank, Powai, Mumbai Branch are duly recorded in the Books of the assessee. Shri Rajesh Sarkar, Smt. Reena Roy and assessee are joint holders of above account. The above account was used by the assessee for his business purpose. During the year under consideration total Rs.36,26,758.00 was credited in the account. However, the assessee in his books has debited his account to Rs.31,02,171/-. The reasons for difference has been explained by the assessee as under:-
01 Total credits in bank account Rs.36,16,758=50 02 Less Rs.5,00,000/- Cheque bounce credit Rs.100000/- on 16/07/2008 Rs.100000/- on 21/07/2008 Rs.300000/- on 20/03/2008 03 Less reversal credit Rs.24,400/- Rs.4400/- on 02/05/2008 Rs.15000/- on 12/05/2008 Rs.5000/- on 22/05/2008 04 Less ATM withdrawal charges Rs.187=50 reversed by the bank on various dates 05 TOTAL (02+03+04) Rs.5,24,587=50 06 NET TOTAL (01-05) Rs.31,02,171=00
It is further explained by the assessee that out of the total deposits of Rs.31,02,171/-,the sum of total amount deposited in cash on various dates is Rs.16,93,000/- and balance of Rs.14,09,171/- was deposited through transfer. Cash of Rs.16,93,000/- was deposited in various dates by Shri Ashish Sarkar and these are duly verified with the cash book of Shri Ashish Sarkar. Out of Rs.14,09,171/- a sum of Rs.6,50,000/- have been deposited by Shri Rajesh Sarkar, brother of the assessee through cheques which were returned to him during the year itself and Rs.7,45,000/- was transferred by the assessee through his bank account maintained with Axis Bank Account No.164010100178150, which is duly shown in the books of accounts. Amount of Rs.14,171/- was transferred through assessee’s current account (Mumbai account/capital current account). Rs.13,249.46 was remained balance in that account on 31/03/2009 which was transferred to Shri Ashish Sarkar (Mumbai account/capital current account) on 31/03/2009). Hence this balance had not been shown in the balance sheet of the assessee. The balance of Ashish Sarkar (Mumbai account/capital current account) was Nil as on 31/03/2009 therefore this was not appearing in the balance sheet as on 31/03/2009. The relevant documents have been verified and found correct. It is explained by the assessee that this account is forming part of the books of the assessee because it contains business transactions of the assessee.”
We find that the above deposits are not explained during the remand proceedings as only averments were made before the AO that these are recorded in the books of account.
Whether these are explained or not it has to be seen. Second averment made by the learned Counsel for the assessee before us is that in case the issue is remanded back to the file of the AO for fresh adjudication, the AO should be directed to exclude the amount of cheque bounced amounting to Rs.5 lacs and the credit for reversal should be given. Another facet of argument made by the learned Counsel is that only peak credit should be assessed, in case these are not found explained. We are in agreement with the arguments of the learned Counsel for the assessee that these amounts need verification at the level of the AO because neither Tribunal nor CIT (A) has the mechanism to verify the genuineness of the same. Accordingly, we remit these deposits to the file of the AO with direction that the AO will verify the cheque bounce credit of Rs.5 lacs and then allow rebate accordingly. Secondly, he will also verify whether the sources are explained in respect to the amounts recorded in the books of account or not. In case these are not explained, the AO will assess these deposits as unexplained on the basis of peak theory. He will apply only peak addition and make assessment accordingly. In terms of the above, the appeal of the Revenue and the cross objection of the assessee are allowed for statistical purposes.
Now, coming to assessee’s appeal in since this is delayed by 63 days and we have already adjudicated the alternative Cross Objection of assessee, we need no adjudication of the same again as the issue is same. Accordingly, the same is dismissed as un-admitted.
In the result, the assessee’s appeal in is allowed, assessee’s appeal in is dismissed as un-admitted and the Revenue’s appeal in ITA No.45/RPR/2013 and the C.O. No.15/RPR/2013 of the assessee, both are allowed for statistical purposes. Order pronounced in the open court on 08 /07/2016.