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Income Tax Appellate Tribunal, MUMBAI BENCHES “J”, MUMBAI
Before: Shri Sanjay Garg, & Shri Ashwani Taneja
17/02/2016 सुनवाई क� तार�ख / Date of Hearing : 16/03/2016 आदेश क� तार�ख /Date of Order: आदेश / O R D E R Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals), Mumbai- 32 {(in short ‘CIT(A)’}, order dated 27.06.2012 passed against assessment order u/s. 143(3) of Income Tax Act 1961, dated
2 Jaspal Singh Sehgal 30.12.2011 for the Assessment Year 2009-10 on the following grounds:
“1.The learned Commissioner of Income Tax (Appeals) has erred in upholding the addition of Rs. 20,65,000/- made by Assessing Officer as unexplained cash credits for the reasons stated in the assessment order.
2. The learned Commissioner of Income Tax (Appeals) has erred in upholding the addition of Rs. 4,19,120/- made by Assessing Officer as Unexplained expenditure towards foreign traveling. However the appellant has incurred the traveling expenditure for his personal purpose and the said amount has been debited to the capital account of the appellant and the same has not been claimed as the business expenditure. Further all the payments towards the expenditure on' Foreign Traveling have been made out of the normal banking accounts of the appellant so there is no question of any unexplained expenditure and the appellant has on his own declared the said expenditure as debit to his capital account."
During the course of hearing, arguments were made by Shri R.S. Bindra, Authorised Representative (AR) on behalf of the Assessee and by Shri K. Mohandas, Departmental Representative (DR) on behalf of the Revenue.
Ground No.1: In this ground the assessee has challenged the action of lower authorities in making an aggregate addition of Rs.20.65 lakhs on account of cash deposited in the bank account. We have heard both the parties on these issues. It is noted that the AO made addition on account of cash deposited in its three bank accounts namely: (i) Axis Bank
3 Jaspal Singh Sehgal (ii) PMC Bank (iii) P & S Bank 3.1. During the course of hearing before lower authorities the assessee tried to explain with the help of cash summary the sources of deposit of cash in the bank account. The lower authorities were not satisfied fully with the explanation of the assessee and therefore, amount of cash deposited in the bank account was added.
3.2. During the course of hearing before us, Ld. Counsel of the assessee has taken us through various pages of the paper book explaining item wise sources of cash under various heads and also submitted summarised and detailed cash book showing inflow and outflow the cash. After hearing both the party, we have our decision with respect to each of the items of sources of cash in following parameters: (i) Opening cash balance of Rs.3,86,222/-: With the assistance of both the parties, it is noted by us that the assessee has shown closing cash balance in the balance sheet of last year. These documents could not be controverted by the lower authorities as well as by the Ld. DR before us. Therefore, we direct the AO to accept the opening balance of Rs.3,86,222/-.
(ii) Cash Withdrawn from Axis Bank of Rs.9,73,000/- and from PMC Bank of Rs.2,33,100/- : The lower authorities refused to give benefit of cash withdrawn from the bank on the 4 Jaspal Singh Sehgal ground that the assessee could not establish that the cash withdrawn has not been used anywhere else. In our opinion approach of the lower authorities is not fair and justified. The assessee has submitted detailed cash summary showing inflow and outflow of the cash for the entire year. In our opinion the assessee cannot be directed to prove the negative. It is a burden upon the AO to prove that cash has been utilized elsewhere by the assessee before he rejects the claim of the assessee. Unless any such contrary material is brought on record by him to prove that cash has been utilized elsewhere by the assessee, he should give benefit of cash withdrawn by the assessee from the bank account against the amount of cash deposit into the bank account of the assessee, especially when the cash has been withdrawn and deposited in the same financial year, even if the bank from where cash was withdrawn and bank where the cash was deposited are different. Thus, after considering entire facts and circumstances of the case, we direct the AO to give set off of entire amount of cash withdrawn from the Axis Bank and PMC Bank. iii) Friendly loans of Rs.3,55,000/-: No serious arguments have been made by the assessee for explaining friendly loans. Rather at the conclusion of the hearing Ld. Counsel stated that he did not want to press this amount. Therefore, in absence of proper details and expression we reject this claim of friendly loans of Rs.3,55,000/-.
5 Jaspal Singh Sehgal iv) Gift from mother of Rs.1,50,000/- and gift from father of Rs. 3,50,000/-: The situation with respect to gifts is same as with regard to friendly loans. Since Ld. Counsel has not pressed these two items also, therefore this claim is also rejected. v) The Income from free lancing of Rs.3,18,789/-: With the assistance of both the parties, it is noted that this amount has been shown by the assessee as its income in the return filed which has been accepted and taxed by the Assessing Officer in the assessment order. Therefore, we direct the AO to give credit of this amount also. Thus, this claim is accepted.
As a result ground no.1 is partly allowed in terms of our directions as given above.
Ground No.2:- In this ground, the assessee has challenged the action of lower authorities in making addition of Rs.4,19,120/- as unexplained expenditure on account of foreign traveling.
4.1. We have carefully gone through facts of the case and orders of lower authorities. On the basis of submissions made during the course of hearing that entire amount was spent by the assessee by cheque and for this purpose our attention was drawn on page no. 16 of the paper book wherein it was shown that entire amount has been spent by different cheques issued from the bank accounts of the assessee. The assessee has 6 Jaspal Singh Sehgal given item wise details and particulars of cheque no. of various amounts paid by the assessee for meeting the expenditure incurred on foreign travel. These details clearly reflect that the assessee had made payment by cheque to Super Travels Pvt. Ltd. and to M/s. Paul Merchant for foreign currency. It appears that Ld. CIT(A), misunderstood the facts and presumed that entire expenses were incurred by the assessee in cash. Ld. DR did not make any serious arguments to rebut the submissions of the Ld. Counsel. We find the disallowance has been made by the lower authorities under wrong assumption of facts. In our view the entire payment has been made from bank accounts of the assessee. Thus, no disallowance or addition is called for. Therefore, we delete the addition made by the assessee and allow ground no.2.
In the result, the appeal of the Assessee is partly allowed.
Order pronounced in the open court on 16th March, 2016.
Sd/- Sd/- (Sanjay Garg ) (Ashwani Taneja) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER मुंबई Mumbai; �दनांक Dated :16/ 03 /2016 ctàxÄ? P.S/.�न.स. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai
7 Jaspal Singh Sehgal