DEEN DAYAL SHARMA,A-135, GOVINDPURA, KARDHANI, KALWAR ROAD, JAIPUR vs. INCOME TAX OFFICER, WARD - 3(1), JAIPUR
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 394/JP/2023
per the table made in the written submission. The ld. AO thus made
the following observation in his remand report:
Perusal of bank account statements reveals that the cash has been withdrawn around 1-2 months before re-deposit. Assessee has claimed that these amount was kept with him for business purposes and cash withdrawal was redeposited in his bank account. The assessee has himself claimed that he was engaged in the business of Job work activity of building construction so cash withdrawal amount could have been used for business purposes. The issue may kindly be decided on merits accordingly.
Therefore, the even the cash deposit made by the assessee stands
explained and prayed based on the various case laws that the
addition made by deleted.
The ld DR is heard who has relied on the findings of the lower
authorities on both the grounds on merits raised by the assessee.
13 ITA No. 394/JP/2023 Deen Dayal Sharma vs. ITO
We have heard the rival contentions and perused the material
placed on record. The bench noted that the so far as the ground
no. 2 is concerned the ld. CIT(A) has granted the benefit of cost of
Rs. 15,200 and the assessee has disputed only the difference
between the actual consideration and the amount considered for
payment of stamp duty. The bench also noted that the difference
between the actual consideration and the amount adopted for stem
duty purpose is for an amount of Rs. 1,38,334/-. We also note that
the difference between the actual consideration and the amount
considered for stability purpose is 6.21 %. This issue has already
been considered by the coordinate bench of Bangalore ITAT in the
case of Sri Sandeep Patil Vs. ITO in ITA No. 924/Bang/2019. The
operative part of the finding on the issue by the coordinate bench is
as under :
We also notice that the Parliament has introduced third proviso in section 50C(1) of the Act, as per which the difference in stamp duty valuation and actual consideration should be ignored, if it is less than 5%/10%. Even though the said provision has come into effect from 1.4.2019/1.4.2021, we notice that the Kolkata Bench of Tribunal has held it to be curative in nature in the case of Chandra Prakash Jhunjhunwala (supra) and accordingly held that the proviso shall apply since the date of insertion of sec.50C of the Act. Accordingly, the above said reasoning given by the Kolkata bench of ITAT also supports the contentions of the assessee. 11. In view of the foregoing discussions we find merit in the prayer of the assessee. We notice that the addition of Rs.15,92,800/- sustained by Ld CIT(A) works out to less than 10% of the actual consideration of Rs.2,33,00,000/- paid by the assessee. Accordingly, we modify the
14 ITA No. 394/JP/2023 Deen Dayal Sharma vs. ITO
order passed by Ld. CIT(A) and direct the A.O. to ignore the difference between fair market value determined by CIT(A) and the actual consideration as the same is less than 10% of the actual consideration.
On this issue we note that there is a merit in the arguments of the
ld. AR of the assessee and revenue could not bring to service any
contra judgment we respectfully following the findings of the
coordinate bench judgment considered the arguments and direct
the ld. AO to delete the addition of Rs. 1,38,334/-. In terms of this
observation ground no. 2 raised by the assessee is allowed.
7.1 As regards the ground no. 3 raised by the assessee for an
amount of Rs. 30,70,000/- being the amount of cash deposited into
the bank account of the assessee, the bench noted that the ld.
CIT(A) based on the submission made by the assessee forwarded
the evidences and submission of the assessee for the comments of
the ld. AO. The ld. AO based on the evidence so produced
observed as under :
“The assessee was asked to furnish the source of these huge cash deposits in his bank account but he did not file any documentary evidence in this regard during assessment proceedings. As per ITR assessee has shown total turnover of Rs. 51,20,635/- and declared presumptive income u/s 44AD of Rs. 4,80,000/-. Therefore, expenditure of Rs. 46,40,635/- was made by the assessee. Whereas he was made cash deposit in bank of Rs. 30,70,000/- and converted in time deposits in urban cooperative bank. The assessee was asked vide above show cause that why the income of Rs. 30,70,000/- should not added in you total income as undisclosed income but he did not file any
15 ITA No. 394/JP/2023 Deen Dayal Sharma vs. ITO
reply/evidence in this regard. Therefore, the deposits of Rs. 30,70,000/- added to the total income of the assessee as income from other source. During the course of appellant proceedings it is noticed that the assessee has filed the additional evidence i.e. copy of various bank accounts details and cash book statement and also stated that the assessee was withdrawn the cash and after some days deposit the same. The dates of cash withdrawal supporting for cash deposit as under:-
Perusal of bank account statements reveals that cash has been withdrawn around 1-2 month before re-deposit. Assessee has claimed that this amount was kept with him for business purposes and cash withdrawn was re- deposited in his bank account. The assessee has himself claimed that he was engaged in the business of job work activity of building construction so cash withdrawal amount could have been used for business purpose. The issue may kindly be decided on merits, accordingly.”
16 ITA No. 394/JP/2023 Deen Dayal Sharma vs. ITO
Based on the above remand report and submission of the
assessee the ld. CIT(A) has dismissed this ground of the assessee
merely relying on the judgment held that availability of earlier
withdrawal of cash for the subsequent deposit must be established
by the appellant to the satisfaction of the AO and in the absence of
such evidence, the benefit of earlier withdrawal cannot be given.
The CIT(A) further noted that there is no substantial reason to
withdraw cash for expenses when the previous cash withdrawals
remained unrelinquished. On this issue we note that both the lower
authority did not doubt the cash withdrawal by the assessee. We
also note that the lower authority also did not raise a question that
if the cash reposited is considered the assessee is left with no
cash for meeting the expenditure as alleged in the assessment
order for claiming the presumptive income. The ld. AO or in that
case the ld. CIT(A) did not dispute the availability of cash for
redeposit to the assessee and there is an acceptance of the ld. AO
as reproduced here in below :
Perusal of bank account statements reveals that the cash has been withdrawn around 1-2 months before re-deposit. Assessee has claimed that these amount was kept with him for business purposes and cash withdrawal was redeposited in his bank account. The assessee has himself claimed that he was engaged in the business of Job work activity of building construction so cash withdrawal amount could have been used for business purposes. The issue may kindly be decided on merits accordingly.
17 ITA No. 394/JP/2023 Deen Dayal Sharma vs. ITO The revenue did not bring anything contrary to the submission of
the assessee and when the lower authority categorically admitting
the sufficient amount of cash withdrawal and the ld. AO through
the ld. DR did not bring anything on record that the assessee has
considered this cash for their other business use. Thus in the
absence of this evidence we are of the considered view that once
the assessee has established the source of cash deposited into
the bank account, the lower authority erred in making / confirming
the addition of Rs. 30,70,000/- merely based on the premise that
the assessee might have used it for other purpose but that
averments are not based on any evidence against the chart of
withdrawal and deposit submitted by the assessee. Based on
these observations the ground no. 3 raised by the assessee is
allowed.
7.2 Ground no. 4 being general in nature does not require any
adjudication by us.
7.3 The ground no. 1 raised by the assessee for challenging the
re-opening proceeding since we have considered the appeal of the
18 ITA No. 394/JP/2023 Deen Dayal Sharma vs. ITO assessee on merits this ground becomes educative in nature and
therefore, the same is not adjudicated.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 21/09/2023 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur fnukad@Dated:- 21/09/2023 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Deen Dayal Sharma, Jaipur 2. izR;FkhZ@ The Respondent- Income Tax Officer, Ward-3(1), Jaipur 3. vk;dj vk;qDr@ CIT vk;dj vk;qDr@ CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZ QkbZy@ Guard File { ITA No. 394/JP/2023} 6. vkns'kkuqlkj@ By order सहायक पंजीकार@Aेेज. त्महपेजतंत
