1 ITA NO. 2432/Del/13
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `B' NEW DELHI
BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT
AND
SHRI A. D. JAIN, JUDICIAL MEMBER
I.T.A .No. 2432/Del/2013
(Assessment Year: 2008-09)
ITO vs Darsh pal Seble
Ward-23(1), Room No. B-301, Shakti Apartments,
1207, Sector- 5, Plot NO. 18, Dwarka
12th Floor, E-2 Block, Civic New Delhi
Centre, Minto Road BIVPS5682N
New Delhi (RESPONDENT)
(APPELLANT)
Appellant by Smt. Nidhi Srivastava, CIT
DR
Respondent by Sh. D.R. Singh, ADV
ORDER
PER A. D. JAIN, JM
This Department's appeal for A. Y 2008-09, taking the following grounds:-
"1. On the facts and circumstances of the case, the Ld. CIT(A) has erred
in accepting the additional evidence in violation of Rule 46A of the
Income Tax Act.
2. On the facts and circumstances of the case the Ld. CIT(A) has erred in
deleting the addition of Rs.30,49,000/- made by the AO as unexplained
cash credits u/s 68 of the Income Tax Act, on the basis of additional
evidences filed by the assessee.
2 ITA NO. 2432/Del/13
3. On the facts and circumstances of the case the Ld. CIT(A) has erred in
deleting the disallowance of deduction u/s 80C of Rs.1,00,000/- on the
basis of additional evidences filed by the assessee.
2. The facts are that the assessee filed return of income for the A.Y 2008-09 on
31/7/2008 disclosing income of Rs.5,09,682/-. The case was selected for scrutiny by
issue of notice u/s 143(2) dated 4/8/2009. The assessee failed to comply with the
said notice and with subsequent notices issued u/s 143(2) and 142(1). The Assessing
Officer proceeded to frame the assessment u/s 144 on the basis of the material on
record. The Assessing Officer had received AIR information that the assessee had
deposited cash amounting to Rs.30,49,000/- in his savings account with Axis Bank.
In the absence of any explanation regarding the sources thereof, the Assessing
Officer treated the sum of Rs.30,49,000/- as unexplained cash credits u/s 68. The
Assessing Officer further disallowed the claim of deduction under Chapter VIA of
the I. T. Act amounting to Rs.1,00,000/-, as the assessee had failed to provide any
supporting documents.
3. By virtue of the impugned order, the Ld. CIT(A) deleted both the above
additions. As a result, the Department has raised the grounds of appeal before us.
4. Apropos Ground Nos 1 & 2, the Ld. DR contends that the Ld. CIT (A) has
erred in deleting the addition of Rs.30,49,000/-made by the AO as unexplained cash
credits; and that while doing so, the Ld. CIT(A) has wrongly relied on the additional
evidence filed by the assessee before the Ld. CIT(A).
5. The Ld. Counsel for the assessee, on the other hand, has placed strong reliance
on the order under appeal in this regard.
6. It is seen that the addition was made by the AO by observing that the assessee
had failed to furnish any explanation and supporting documents regarding the
amount of Rs.30,49,000/- deposited in the assessee's savings bank account with
Axis Bank. Before the Ld. CIT(A), the assessee contended, inter-alia, that notices
3 ITA NO. 2432/Del/13
under sections 143(2) and 142(1) of the I.T Act were never received by him, as the
address at which they were sent had already been vacated and changed; that the
assessee, being alone in India and his family being resident in Canada, was mainly
residing with his nephew, Shri Sunil Batra, who was the owner of the address
provided in the return of income and at which address, notices u/s 142(2) of the Act
for A. Y 2011-12, etc., were still being received; that no notice of hearing was ever
received either by the assessee, or by any of the members residing at the given
address, or at the old address, i.e, 204, Ansal Tower, 38, Nehru Place, New Delhi,
110019, at which address, the assessment order was passed; that the assessee came
to know about the ex-parte assessment and its proceedings after more than two
months, i.e, in the month of March, 2011, when the bank account of the assessee was
attached and the amount of Rs.8,89,400/-, being the balance in the said band
account, was realized against the demand created by the assessment order; that it
was at such that the assessee did not get any opportunity to file explanation and lead
evidence with regard to the alleged cash deposits in the bank account and to support
the deduction of Rs.1 lac claimed u/s 80C of the Act; and that therefore, the assessee
was prevented by sufficient cause to produce evidence before the AO. The assessee
produced the following additional evidence before the Ld. CIT(A):-
1. Photocopy of relevant statement of Bank account containing the alleged
cash deposits (Account No. 176010100137621 of Darsh Pal Seble with
Axis Bank Ltd. Rudrapur (U.P) for the involved assessment year). The
same also supports the deposit of Rs.1,00,000/- towards the FDR for
claim u/s 80C.
2. Explanation of cash deposits in the above Bank Account.
3. Confirmation in two certificates with PAN of the source payer, in
respect of source and explanation of cash deposits.
4. Photocopies of agreements to sell immovable property (4nos.).
4 ITA NO. 2432/Del/13
7. The assessee also submitted before the Ld. CIT(A) that he had entered into a
transaction for the sale of his ancestral property situated at Ward No. 10/ Gandhi
Colony, Gole Market, Rudrapur, with Grower Developers, SGAD Complex, Nainital
Road, Rudrapur, District US Nagar, on 14/10/2006 for an agreed total consideration
of Rs.3,10,00,000/- and had received advances against the transaction from time to
time through cheques and in cash; that the detail of the payments of the additions
and confirmation thereof by the partners of M/s Grover Developers and the detail of
cash paid during F.Y 2007-08, along with PANs of the buyers, was in the additional
evidence filed. It was stated that the involved cash deposits in the bank account
represented the stated cash receipts. The assessee filed photocopy of the relevant
bank statement along with explanation, as follows:-
Date of Deposit Amount deposited Explanation
3/7/2007 200,000 Advance received against agreement
to sell immovable property
(evidence/identity and confirmation of
payer is at pages 4 to 6 & the Copy of
agreements at pages 7 to page 50)
14/7/2007 49,000 Same as above (Received 50,000)
18/07/2007 100,000 Same as above
31/07/2007 400,000 Same as above
02/08/2007 200,000 Advance Received as Stated
Above
03/08/2007 200,000 Advance Received as Stated
Above
31/08/2007 300,000 Advance rect. As stated above
28/09/2007 300,000 Advance recd as above.
23/10/2007 100,000 Redeposit (Withdrawn 300,000 on
(1/10/2007)
29/10/2007 300,000 Advance recd. As stated above.
14/12/2007 150,000 Redeposit (Withdrawn 200,000
10/12/2007)
14/12/2007 50,000 Redeposit of balance of above
Withdrawal
16/02/2008 50,000 Advance recd. As stated above
Rs.100,000.
20/02/2008 50,000 Balance of above advance recd.
04/03/2008 200,000 Redeposit of withdrawal of
200,000 on 01/03/2008
5 ITA NO. 2432/Del/13
14/03/2008 100,000 Redeposit of withdrawal of
08/03/2008 100,000
25/03/2008 200,000 Advance recd. As stated above.
Total... 3,049,000 (Advance Recd. 20,50,000 &
Redeposit 10,00,000)
8. Considering that the notices Under Sections 143(2) & 142(1) of the Act were
never received by the assessee and also taking into consideration the material
relevance of the additional evidence filed by the assessee, the Ld. CIT(A) forwarded
the said evidence to the AO, asking for a remand report and requiring the AO to
correlate the dates of deposits of cash in the bank account with the dates of receipt of
cash as per the sale agreement stipulated by the assessee. The AO, vide his remand
report dated 7/1/2013, vehemently objected to the admission of the additional
evidence, stating that the notices had been sent to the assessee at the address
provided in the return of income. With regard to the merit of the additional
evidence, the AO stated in the remand report that though the assessee had stated that
an amount of Rs.20.50 lacs had been received by him as advances against property
from Shri Diwan Singh, on verification, it had been noticed that as per the sale deed
provided, no agreement to sell the property had been entered into with Shri Diwan
Singh; that as per the copies of the sale deed, the agreement had been made with
Surender Singh Grover, Jaswinder Kaur Grover, Amarjeet Kaur Grover & Jigar
Preet Kaur Grover; that thus, the additional evidence submitted by the assessee was
not conclusive and did not clarify the source of the cash deposits; and that since no
details or explanation had been filed by the assessee during the assessment
proceedings, the case had been decided on merits. However, though he had been
required by the Ld. CIT(A) to do so, the AO, in the remand report, did not offer any
comment on the correlation of the dates of the cash deposits in the bank account
with the date of receipt of cash as advance on sale of land.
6 ITA NO. 2432/Del/13
9. In his rejoinder to the AO's remand report, the assessee reiterated his stand of
not having received any notice qua the assessment proceedings. On the merits of the
additional evidence, he stated that the certificate of Diwan Singh, filed by the
assessee before the CIT(A), made it clear that Shri Diwan Singh was the father of
Shri Surender Singh Grover, and Jaswinder Kaur Grover was wife of Shri Surender
Singh; that in this certificate, both Surender Singh Grover and Jaswinder Kaur
Grover, partners of Grower Developers, had confirmed that they had paid cash
advance of Rs.20,50,000/- to the assessee through Shri Diwan Singh in F.Y 2007-08;
that this certificate had been duly executed by both of them before a notary; that the
cash receipts in question had been duly adjusted in the consideration mentioned in
the agreements; that the AO had failed to appreciate these facts and the genuineness
of the source of the bank deposits; and that since the AO had not commented
thereon, he had accepted the facts regarding the redeposit of cash of Rs.10 lacs
against cash withdrawals. The Ld. CIT(A), taking all the above facts into
consideration, held that the AO could not be said to have allowed in-adequate
opportunity to the assessee and that even otherwise, the assessee had been afforded
adequate opportunity in the appellate proceedings. The additional evidence was
admitted by the CIT(A) on having taking into consideration the totality of the facts
and circumstances, as discussed above and we do not find any error in this action of
the Ld. CIT(A). Accordingly, the grievance of the Department in this regard stands
rejected.
10. So far as regards the merits of Ground No. 2, the Ld. CIT(A) duly examined
the agreement of sale of land, the bank statement and cash flow statement filed by
the assessee. The assessee was found to have received additions from time to time
against the agreed consideration of Rs.3,10,00,000/- for sale of his property to
Grover Developers, which sale was agreed upon vide agreement dated 9/10/2012.
During F. Y 2007-08, relating to the year under consideration, the assessee was
7 ITA NO. 2432/Del/13
found to have received a total sum of Rs.20,50,000/- in cash from Shri B. Diwan
Singh, PAN BKDPS7718H, which has been found to be as per the confirmation
filed by the payees/buyers. The confirmation from the partners of Grover
Developers , which confirmation was notarized and was on stamp paper, showed
that the assessee had been paid Rs.10 lac and Rs.5lac by cheque on 6/7/2007 &
7/1/08, respectively. The assessee was found to have received cash of
Rs.20,50,000/- through Shri Diwan Singh, father of Shri Surender Singh Grover,
partner of M/s Grover Developers. The cash flow statement showed withdrawal of
cash of Rs.14 lacs on various dates and re-deposit of Rs.10 lacs. As per the cash
flow statement, the deposits in the bank tallied with the cash advance received by the
assessee from the buyers.
11. It was after having duly taken into consideration all the above, that the Ld.
CIT(A) deleted the addition. Before us, the Department has not been able to dispute
the categorical findings of fact recorded by the Ld. CIT(A). Accordingly, we uphold
these factual findings. Therefore, Ground No. 2 is rejected.
12. Concerning Ground No. 3, the AO disallowed the assessee's claim of
deduction under chapter VI A of the Act, amounting to Rs.1 lac, observing that the
assessee had failed to provide any supporting documents. The CIT(A) deleted this
disallowance. The Department contends that this disallowance was illegally deleted
by the Ld. CIT(A) on the basis of additional evidence filed by the assessee.
13. Here, it remains undisputed that the assessee had invested the amount to Rs.1
lac through his Axis Bank Account in a term deposit. The merits of the action of the
CIT(A) in admitting additional evidence have been discussed and upheld
hereinabove. Such investment in a term deposit is undisputedly eligible for
deduction u/s 80C (2) (xxi) of the Act, as correctly held by the Ld. CIT(A). As such,
finding no infirmity therein, the CIT's action of deleting this disallowance is also
upheld. Ground No. 3 is rejected.
8 ITA NO. 2432/Del/13
14. In the result, the appeal filed by the Department is dismissed.
The order is pronounced in the open court on 17th of April 2014.
Sd/- Sd/-
(G. D. AGRAWAL) (A. D. JAIN)
VICE PRESIDENT JUDICIAL MEMBER
Dated: 17/04/2014
*R. Naheed*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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