IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `F', NEW DELHI
BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER
&
SHRI J.S. REDDY, ACCOUNTANT MEMBER
ITA No. 2487/Del/2011
Assessment Year: 2007-08
ITO, vs. Pawan Kumar,
Ward-2, 476/26,
Rohtak. Jawahar Nagar,
Rohtak.
AFWPK1903P
(Appellant) (Respondent)
Appellant by : Shri Manoj Kumar Chopra, Sr. DR
Respondent by : Sh. Naveen Gupta, Adv.
ORDER
PER DIVA SINGH, J.M.
This is an appeal filed by the Revenue against the order dated
03/03/2011 of CIT(A)-Rohtak pertaining to 2007-08 assessment year on the
following grounds:
1. "On the facts and in the circumstances of the case, the
ld.CIT(A) has erred in law and facts in deleting the addition of Rs.
16,55,500/- made by AO on account of unexplained cash deposits in
bank. The assessee failed to explain the deposits in bank despite
sufficient opportunities allowed to him during assessment
proceedings;
2. On the facts and in the circumstances of the case, the ld.
CIT(A) has erred in law and facts in deleting the addition of Rs.
16,55,500/- made by AO on account of unexplained cash deposits in
bank, overlooking the facts narrated by AO in the remand report."
ITA No. 2487/D/2011 Pawan Kumar 2
2. The relevant facts of the case are that the assessee returned an
income of Rs. 98,560/- which was selected for scrutiny under CASS.
Notices u/s 143(2) were issued and served upon the assessee in response
there to the assessee was represented by ld. AR on 21/10/2009 on which
date the hearing was adjourned. On 26/10/2009 the assessee attended
along with his AR and filed a written reply. However, the AO proceeded to
assess the income u/s 144. For ready reference we reproduce the relevant
findings from the assessment order:
1.6 "Notice u/s 143(2)/142(1) dated 8.10.2009 for 21.10.2009
was issued but on the date of hearing Shri Mukesh Handa attended
the proceedings and the case was adjourned to 26.10.2009. On
26.10.2009 Shri Pawan Kumar along with Shri Mukesh Hana
Advocate attended the proceedings and filed a written reply.
2. Sufficient opportunities have been allowed to the assessee to
explain the deposits in bank but he failed to do so. The assessment
is therefore, made u/s 144 of the Income Tax Act to the best of my
judgment on the basis of material on records.
3. The assessee is a LIC agent. The assessee declared net profit
of Rs. 98560/- from gross receipts of Rs. 169577/-. Copy of bank
account obtained and deposits therein has been examined. During
the year under consideration the assessee deposited cash of Rs.
16,55,500/- in his account maintained with AXIS bank, Rohtak. The
assessee was required to explain the source of deposit. No
explanation has been offered despite so many opportunities allowed
to the assessee. Unexplained cash deposit of Rs. 16,55,500/- is
therefore, added in the total income of the assessee."
3. Aggreived by this the assessee came in appeal before the First
Appellate Authority where on behalf of the assessee fresh evidence under
Rule 46A was filed stating that the documents could not be filed earlier as
they were in the possession of Shri Ravindra Singh Kadian. The said
ITA No. 2487/D/2011 Pawan Kumar 3
evidences were admitted and remanded the same to the AO. The CIT(A)
considering the explanation of the assessee and the Remand Report of the
AO held that the source for cash deposit in the bank account of the
assessee were mainly from Shri Ravindra Singh Kadian for making payment
of LIC premium and the source of funds in the hands of Shri Ravindra Singh
Kadian stood explained the addition as such was deleted.
4. Against this action the Revenue is in appeal before the Tribunal.
5. Ld. Sr. DR relies upon the assessment order. The LD. AR on the
other hand relied upon the impugned order.
6. We have heard the rival submissions and have taken ourselves through
the material available on record. On a consideration thereof we are of the
view that the impugned order in the facts as they stand deserves to be
upheld. It is seen that the CIT(A) in para 3.1 & 3.2 after referring to the fresh
evidence has proceeded to admit the same and remanded the same to the
AO. The explanation of the assessee is found recorded in para 3.3 of his
order and the objections of the AO in the remand report are also found
recorded in para 3.4 of his order. For ready reference we reproduce the
same hereunder:
3.1 "Regarding the additions made by the AO, the AR sought the
admission of following documents as additional evidence u/r 46A as
these documents were not in the possession of the appellant but in
the possession of Sh. Ravinder Singh Kadian:
(i) Certificate from Sh. Ravinder Singh Kadian
(ii) Bank statement of Sh. Ravinder Singh Kadian
(iii) Status report of two LIC policies of Sh. Ravinder Singh Kadian.
ITA No. 2487/D/2011 Pawan Kumar 4
The certificate of Sh. Ravinder Singh Kadian states that he
has given Rs. 2.50 lakh in cash to the appellant on 22.6.2006 to
deposit in his LIC policy number 174984904 as additional
premium. Further, he has given Rs. 11.00 lacs in cash to the
appellant on 3.7.2006 to deposit for his LIC policy of Rs. 15.00 lacs.
This amount of Rs. 11.00 lacs was given in cash after withdrawing
from his bank a/c no. 900056, Corporation Bank, Rohtak on
3.7.2006.
3.2 The above mentioned additional evidence has been admitted
in terms of the provisions of Rule 46A and remanded to the AO for
his report. The remand report of the AO and the rejoinder of the
appellant have been taken on record.
3.3 Before me, the AR submitted that the appellant, being an LIC
Agent, sometimes used to accept cash from his customers, get it
deposited in his bank account and pay LIC premium of the
customers. During the year under reference, the appellant accepted
cash of total Rs. 13.50 lacs from Sh. Ravinder Singh Kadian, got
deposited in his bank a/c and paid the LIC premium from his bank
account. The appellant accepted cash of Rs. 2.50 lacs on 22.6.2006
from Sh. Kadian, deposited in his bank account on 22nd & 23rd of
June, 2006 and paid LIC premium of Rs. 1.00 lac and Rs. 1.50 lacs
on 23.6.2006 therefrom. He further accepted cash of Rs. 11.00 lacs
from Sh. Ravinder Singh Kadian on 3.7.2006, deposited Rs. 9.00
lacs on 3.7.2006 and Rs. 2.00 lacs on 25.8.2006 in his bank account
and paid the LIC premium of Rs. 15.00 lacs of Sh. Ravinder Singh
Kadian on 7.7.2006. The remaining small cash deposits were made
out of past years savings.
3.4 As per the remand report of the AO dated 7.2.2011, the AO
recorded sworn statement of Sh. Ravinder Singh Kadian wherein he
confirmed the cash payments to the appellant. As per him, LIC
Jiwan Plus Policy for the premium of Rs. 15.00 lacs was expiring on
30.6.2006 and in order to save time, he withdrew cash from his bank
a/c and give the same to the appellant who deposited it in his bank
a/c and issued the cheque to LIC."
6.1. It is seen that considering the above in a speaking manner, the
CIT(A) came to a reasoned conclusion which has not been assailed by the
Revenue by any contrary evidence or argument. The same is reproduced
hereunder for ready-reference:-
ITA No. 2487/D/2011 Pawan Kumar 5
4. "I have considered the issue and the submissions made by the
AR. Out of the Rs. 2.50 lacs given by Sh. Ravinder Singh Kadian on
22.6.2006, the appellant deposited Rs. 2.00 lacs on 22.6.2006 and
Rs. 40,000/- on 23.6.2006 out of which he paid the premiums to LIC
of Rs. 2.50 lacs on behalf of Sh. Ravinder Singh Kadian. From the
cash of Rs. 11.00 lacs given by Sh. Ravinder Singh Kadian on
3.7.2006, the appellant deposited Rs. 9.00 lacs on the same day and
an amount of Rs. 6.00 lacs was received by cheque on the same day
and an amount of Rs. 6.00 lacs was received by cheque from M/s
Mahima Life Insurance from which the appellant made payment of
LIC premium of Rs. 15.00 lacs on 7.7.2006 on behalf of Sh.
Ravinder Singh Kadian. From the remaining Rs. 2.00 lacs received
from Sh. Ravinder Singh Kadian, the appellant deposited Rs. 2.50
lacs on 25.8.2006. The sources for deposit of Rs. 50,000/- was
stated to be from out of the past savings. From the above mentioned
facts, it is apparent that the sources for cash deposits in the bank
account of the appellant were mainly from Sh. Ravinder Singh
Kadian for making payment of LIC premium. Since the sources in
the hands of Sh. Ravinder Singh Kadian stand fairly explained, the
cash deposits in the bank account of the appellant are treated as
explained and, therefore, the addition made by the AO is deleted and
the ground of appeal is allowed."
6.2. On a perusal of the above detailed reasoning and finding arrived at
after following the procedures and considering the relevant material available
on record which has also been placed in the paper book filed before us, we
find that the reasoning arrived at by the CIT(A) on facts warrants no
interference. Being satisfied by the reasoning and finding the departmental
ground is dismissed. The said order was pronounced in the open court at
the time of hearing itself.
7. In the result, the appeal of the Revenue is dismissed.
The order is pronounced in the open court on 29th of August 2014.
Sd/- Sd/-
(J.S. REDDY) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:29/ 08/2014
*Kavita*
ITA No. 2487/D/2011 Pawan Kumar 6
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
TRUE COPY
By Order,
ASSISTANT REGISTRAR
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