SMT LALITA GAUR,INDORE vs. ACIT 2(1) INDORE, INDORE
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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
Per Vijay Pal Rao, JM:
This appeal by the Assessee is directed against the order dated 13.11.2019 of Commissioner of Income Tax(Appeal), for Assessment Year 2010-11. The assessee has raised following grounds of appeal:
“1.The appellant, being legal heir and wife of died original assessee Late Shri Virendra Gour, was not aware of any facts of the business and she has tried with all evidences, the credit entries in the bank account of the appellant which his genuine borrowings out of past savings and past capital of the appellant.
ITANo.107/Ind/2020 Lalita Gaur 2. On the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals)-1, Indore ("CIT(A)") erred in confirming the action of Assessing Officer ("A.O.") in making additions in the assessment and not accepting the income as returned by the Appellant. The Appellant prays that the said additions and adjustments be deleted and returned income be accepted. 3. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the action of Assessing Officer by making addition in the form of unexplained credits under section 68 of the Income Tax Act, 1961 amounting to Rs.1,19,06,150/- which is being genuine credit of the appellant out of being past savings and business transactions. The Appellant prays that the said addition be directed to be deleted. 4. On the facts and circumstances of the case the learned CIT(A) erred in confirming the action of Assessing Officer by making addition of Rs. 16,50,000/- considering it as unexplained investment which was actually pertaining to genuine loan taken from his Wife Mrs. Lalita Gaur, who is also legal heir of Mr. Late Shri Virendra Gaur. The Appellant prays that the said addition be directed to be deleted. 5. On the facts and circumstances of the case, the learned CIT (A) erred in confirming the action of leaned assessing officer by upholding the addition made by learned A.O. of Rs. 17,18,806/- which was deposited in his wife bank account. Therefore, addition made of the above mentioned amount in assessee's name is not valid and as per the the provisions of the law. Therefore, The Appellant prays that the said addition be directed to be deleted.” 2. The solitary issue raised in this appeal is regarding the addition made by the AO u/s 68 of the Act on account of total credit in the bank account of the assesse. The assesse filed his return of income on 30.07.2010 declaring total income of Rs.16,34,873/- which was subjected to scrutiny assessment u/s 143(3) vide order dated 22.11.2012 whereby the AO estimated the profit on unexplained deposit in the bank account of the assessee @ 5% of the total turnover of Rs.1,19,09,150/-. Thereafter a revision order u/s 263 was passed on 23.03.2015 whereby the assessment order Page 2 of 10
ITANo.107/Ind/2020 Lalita Gaur was set aside and AO was directed to make fresh assessment after ascertaining all the facts regarding deposit made in the bank account instead of estimating the profit by treating the same as turnover. The AO accordingly issued notice u/s 143(2) r.w section 263 on 27.03.2015 and made the addition u/s 68 of the Act of the entire deposit of Rs.1,19,09,150/- and reduced the earlier addition of estimated profit of Rs.5,95,308/-. The assesse challenged the order of the assessment passed in pursuant to revision order u/s 263 before the CIT(A) but could not succeed.
Before the Tribunal ld. AR of the assessee has submitted that the addition made by the AO is not justified as the original assessment u/s 143(3) was challenged by the assessee before the Ld. CIT(A)and thereafter before this tribunal which was dismissed for non-prosecution vide order dated 15.10.2015. The Ld. AR has submitted that the assessment order passed u/s 143(3) has merged with the order of the CIT(A) dated 16.09.2013 and therefore, the order passed by the CIT u/s 263 is not valid as the issue on which proceedings u/s 263 of the Act were initiated was already a subject matter of appeal before the CIT(A) and the appeal was disposed off vide order dated 16.09.2013. Thus, Ld. AR has submitted that the addition made by the AO while passing assessment order in pursuant to the revision order u/s 263 is not sustainable and liable to be deleted. He has referred to the finding of Ld. CIT(A) against the original assessment order passed u/s 143(3) and submitted that
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ITANo.107/Ind/2020 Lalita Gaur the CIT(A) has granted part relief to the assessee by considering part deposit only as turnover and the source of the part of deposits was accepted. He has further summited that the CIT(A) has also confirmed the addition on account of unexplained deposit in the bank account. Therefore, the issue was very much subject matter of the appeal before the CIT(A) on which u/s 263 was invoked by the Commissioner.
On merits the Ld. AR has submitted that the AO has made the addition of the entire credit in the bank account without considering contra entries of deposit and withdrawal in the name of wife of the assessee which is clearly part of the record as the bank account statements were produced before the AO. He has further submitted that if all the credits of withdrawal is given then the deposit in the bank account stands fully explained. He has referred to the Standard Chartered Bank statement as well as Syndicate Bank statement placed at page no.103 to 112 and 98 to 102 of the paper book respectively and submitted that the credit/deposit in the bank are duly explained from the source of loan taken from HDFC bank as well as amounts received from various persons with supporting evidence of their individual ledger. He has further submitted that there was opening balance of bank account of Rs. 16,14,197/- and the deposits thereafter was specifically explained as received from the persons as a recovery of the earlier amounts given to them. Thus, Ld. AR has submitted that all the amounts
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ITANo.107/Ind/2020 Lalita Gaur deposited in the bank account were duly explained by the assessee by furnishing the details however the AO has not considered the same.
On the other hand, ld. DR has submitted that the details of sources are not supported by any evidence therefore, these explanations of the assesse are not satisfactory. He has relied upon the order of the AO as well as the CIT(A).
We have considered the rival submissions as well as relevant material on record. As regards the contention of the assessee that the original assessment order passed u/s 143(3) merged with the order of the CIT(A) dated 16.09.2013 and therefore, the order passed by the CIT u/s 263 is not valid as concerned. It is undisputed fact that the assesse did not challenge the revision order passed u/s 263 of the Act and the same has attained finality. The Hon’ble Bombay High Court in case of Herdillia Chemicals Limited vs. CIT (1995) 221 ITR 194 has observed as under :
“10. In our view, reference to and reliance on the operative part of the order without regard to the text of the order and the findings recorded therein is wholly misplaced and improper. To understand the true purport of an order, it has to be read as a whole. The operative part of the order in this case has to be read and understood in the light of the controversy before the CIT and the questions decided by him. It cannot be read in isolation from the text of the order and the determination of the questions arising therein by the CIT. It is neither proper nor permissible to pick out any part of the order, and in case of remand order the operative part thereof and to read the same without regard to the questions decided Page 5 of 10
ITANo.107/Ind/2020 Lalita Gaur therein to support the contention that all issues are left open for determination by the authorities below. The Tribunal, in this case, in our opinion, was right in holding that the revisional order, wherein a definite finding is recorded on both the points at issue, having become final on account of the failure of the assessee to pursue the statutory remedies provided in the Act against that order, the assessee cannot be allowed to challenge such concluded findings collaterally in an appeal filed against the fresh order passed by the ITO with a view to giving effect to the same. 11. In our opinion, though appeal is maintainable from the fresh order passed by the ITO to give effect to a revisional order or an appellate order, only such issues can be agitated in such appeal which have not attained finality by virtue of earlier orders of the revisional or appellate authorities. it is not open in such an appeal to agitate any point which has already been decided by the revisional or the appellate authorities in their order. 12. In view of the above, we do not find any infirmity in the finding of the Tribunal in the instant case. Accordingly, question No. 1 is answered in the affirmative and in favour of the Revenue. On the very same reasoning question No. 2 is also answered in favour of the Revenue. In the facts and circumstances of the case, there shall be no order as to costs.” 7. Accordingly the assessee cannot challenge the validity of the order passed u/s 263 in the appeal against consequential order passed by the AO. However, the order of the AO to the extent of the additions made as per the direction of fresh order to be passed after conducting proper verification and inquiry on this issue is concerned the same can be challenged in appeal so far as the merits of the addition is concerned. At the outset, we note that the CIT(A) in order dated 16.09.2013 has decided the issue of addition on account of deposits in bank in para 4 to 7.3 as under: ”4. I have seen the assessment order, the grounds of appeal and th submissions of appellant. 5. The first ground of appeal is against addition of Rs. 16,50,000/- received by appellant out of which Rs. 15,00,000/- was received in cash from wife Smt. Lalita Gaur and Rs. 1.50 lakhs was received from one Mr. Kalyan. Page 6 of 10
ITANo.107/Ind/2020 Lalita Gaur 5.1 It is contended by appellant that he took cash loan of Rs. 15 lakhs from wife Smt. Lalita Gaur, who in turn took a bank loan of same amount. But this explanation itself gives rise to several questions. Why such loan was taken by wife of appellant when it was required by him? If it was bank loan, it must have been received by Smt. Lalita Gaur into her bank account. In that case why such amount was withdrawn and why cash amount was given instead of giving a cheque and instead of there being a prohibition imposed by Income Tax Act u/s 269SS in accepting any loan of Rs. 20,000/- or more otherwise than by an account payee cheque. Even cash withdrawal by Smt. Lalita Gaur was in small amounts on different days and no single amount of such cash of Rs. 10 lakh or Rs. 5 lakh was withdrawn from her bank account account. Hence such cash withdrawal in name of different persons as per bank account was for some other purpose and not for the purpose of giving loan to appellant. 5.2 Even the creditworthiness of wife to take such loan from bank or to give such loan to appellant, is not established. Neither copy of her return nor her balance sheet was filed. No details of her income of this year or earlier years was filed. 5.3 The explanation regarding other cash deposit/receipt from Shri Kalyan of Rs. 1.50 lakhs also could not be explained properly. His full name and address was not filed. His PAN and copy of his return was not filed. The explanation that earlier a loan of Rs. 11 lakhs was given to him, out of which Rs. 9.50 lakhs was receiver earlier and Rs. 1.50 lakhs was received during this year, was also not supported by any confirmation from such person or by copy of any ledger account of such person in appellant's books in this year and earlier years and even no amount of interest on such alleged deposit was shown as income during the year by appellant. 5.4 Hence explanation furnished in regard to cash credits of Rs. 16.50 lakhs were not found satisfactory and the additions of such amount are confirmed in the hands of the appellant u/s 68 of the Income Tax Act. Ground no. (1) of appeal is dismissed. 6. Ground no. (2) of appeal is against addition of Rs. 5,95,308/- on account of addition of 5% profit estimated by AO on various deposits of Rs.1.05 crore in Syndicate Bank and deposits of Rs.76.36 lakhs in Standard Chartered Bank excluding the rental income of Rs. 23.35 lakhs and interest income of Rs. 1,221/- and Rs 23,10,185/- and loan received of Rs. 16,50,000/- Rs. 16,50,000/-- Page 7 of 10
ITANo.107/Ind/2020 Lalita Gaur 6.1 According to appellant such amounts of deposits are mainly returns of various deposits/loans given to various persons. According to appellant there were returns of such loans/deposits of Rs. 82.53 lakhs in Syndicate Bank and Rs. 30.88 lakhs in Standard Chartered Bank which makes to total of Rs. 30.88 lakhs However, on examination of balance sheet of Repellant, it is found that loans/advances as on 31.03.2009 were only of could have explained return of deposits at the most of Rs. 42,13,107/- Rs. 45,96, 123/- and as on 31.03.2010, they were of Rs. 383 42,013,107/ Rs.45,96,123 reduced, is 218,655/- is reduced from addition of Rs. 5,95,308/--Rs.3,83,016). Hence 5% addition on this amount is reduced i.e. Rs.2,10,655/- is reduced from addition of Rs.5,95,308/-. Hence addition on this point of upto Rs. 3,84,653/- is confirmed. Ground no. (2) of appeal is partly allowed. 7. Ground no. (3) of appeal is against addition of Rs. 17,18,806/-on the basis of peak for the deposits made in his three bank accounts. The AO noted that there are cash deposits and other deposits in such account. 7.1 On verification of bank accounts of appellant, it could be seen that there are cash deposits of Rs. 22,89,967/- in Syndicate Bank and Rs.17,72,150/- in Standard Chartered Bank. Even if loan taken in cash of Rs. 16,50,000/- is removed, as it is separately added, balance cash deposits remain unexplained. 7.2 Similarly as discussed earlier, even deposits through cheque stated to be return of loans/deposits could not be proved because while amount of such deposits in bank is of Rs. 89.32 lakhs and Rs. 30.88 lakhs, such outstanding deposits in balance sheet of appellant as on 31.03.2009 was only of Rs. 45,96,123/-. Hence the balance amount of loans/advances could not be established, especially when even full names and address of such persons, copy of their ledger accounts duly confirmed by them and copy of return of income/PAN of such persons was not furnished. 7.3 In view of aforesaid discussion, an addition of peak amount of Rs. 17,18,306/- for various cash/cheque deposits in bank accounts of appellant as discussed in para 7.1 & 7.2 is hereby confirmed. Ground no (3) of appeal is dismissed.”
The CIT(A) in the proceedings against the original assessment order passed u/s 143(3) has partly confirmed the addition made by
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ITANo.107/Ind/2020 Lalita Gaur the AO on account of estimation of the profit @ 5% and other balance amount of the bank account was treated as unexplained deposit and thereby the addition to that extent was confirmed. Thus, in the order pursuant to the revision order passed u/s 263 the AO ought to have considered all these facts and findings given by CIT(A) vide order dated 16.09.2013 on the merits of the additions. However, the AO instead of considering this fact as well as the explanation and contra entries in the bank account of the assesse, has made addition of entire deposits which is contrary to the earlier finding of the CIT(A) as well as material available before the AO in the shape of bank account statement and other details produced by assesse. The AO has not conducted a proper inquiry even as per the directions given in the revision order and therefore, we are of the considered view that addition made by the AO of the entire deposit is not justified and highly arbitrary. It is pertinent to note that though the assessee challenged the order of the CIT(A) dated 16.09.2013 before the Tribunal but the said appeal of the assessee was dismissed for the non-prosecution and the order of the Tribunal has attained finality. Accordingly in the facts and circumstances of the case as discussed above we set aside the impugned order of the CIT(A) and remand the matter to the record of the AO for re-adjudication of the issue after considering all the relevant facts and evidence as well as the earlier order of the CIT(A) order dated on 16.09.2013. Needless to say the assessee be given an appropriate opportunity of hearing before passing fresh order.
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ITANo.107/Ind/2020 Lalita Gaur
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 14.12.2023.
Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member
Indore,_ 14 .12.2023 CPU/Sr. PS
Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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