Appel v. Income Tax Officer, Ward 35(1), Chandigarh And Others

IN THE HIGH COURT OF PUNJAB AND HARYANA: ADCHANDIGARH. ITA No.110 of 2019 (O&M)Date of decision: 13.2.2019 Krishna Bansal ....-- Appel Vs. Income Tax Officer, Ward 35(1), Chandigarh and others ....Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL.HON BLE MRS. JUSTICE MANJARI NEHRU KAUL Present: —Mr. Shreenath A. Khemka, Advocate for the appellant-assessee. — Ajay Kumar Mittal1J.| 1].This appeal has been preferred by the appellant-assessee underSection 260A of the Income Tax Act, 1961 (in short, “the Act’) against theorder dated 14.12.2018, Annexure P.1 passed by the Income Tax AppellateTribunal (in short, “the Tribunal”) for the assessment year 2014-15 in ITA.No.484/Chd/2018, claiming following substantial questions of law:- ““1) Whether the Assessing Officer had discharged the.preliminary burden to demonstrate the existence of|investments, for the application of Section 69?|preliminary burden to demonstrate the existence of|investments, for the application of Section 69?| 11)Whether redeposit of cash withdrawn from bank account|constitutes investment under Section 69”?constitutes investment under Section 69”? 111)Whether Section 69 will apply if the sum had been duly|recorded in the cashbook of the appellant-assessee’?recorded in the cashbook of the appellant-assessee’? Iv)Whether the appellant-assessee had offered sufficient|explanation regarding the re-deposit of cash withdrawn|from bank account?explanation regarding the re-deposit of cash withdrawn|from bank account? GURBAX SINGHv)Whether the Assessing Officer had wrongly @y¥ergasech BE2019.02.28 16:53discretion under Section 69 to declare the sum as the|appellant-assessee’s income?discretion under Section 69 to declare the sum as the|appellant-assessee’s income? V1)Whether in case of ambiguity in Section 69, the statute|must be read in favour of the appellant-assessee?”’must be read in favour of the appellant-assessee?”’ D |A few facts relevant for the decision of the controversy involvedas narrated in the appeal may be noticed. The appellant-assessee maintained abank account with the State Bank of India. She had withdrawnzy”0 lacs on!11.6.2012 for investment purposes from the said bank account. However, asthe prospect of investment did not materialise, the assessee re-deposited thesum back into the same bank account from 20.4.2013 to 12.6.2013. Theassessee recorded the cash transactions in her cashbook. The opening balanceoft the cashbook as on 1.4.2013 waszy22,50,000/- because of the withdrawal|of the amount of|S|20,00,000/- on 11.6.2012 which was being held as cash|and had not been invested anywhere else. Subsequently, the said amount was.re-deposited and the same was duly recorded in the cashbook. The assesseehad re-deposited the huge sum ofS|20,00,000/- in smaller tranches by reasonof abundant caution. The said amount had been carefully kept in smalleramounts at separate places in the house, so that in case of theft, complete loss.could be foreclosed. The assessee had filed her income tax return for theassessment year 2014-15 on 29.7.2014 declaring her gross total income atS|8,43,216/- and deduction ofS|1,00,000/- was claimed under Section 80C ofthe Act reducing the total income tozy7,34,220/-. Notice under Section143(2) of the Act was issued to the assessee on 4.9.2015. Subsequently,notice under section 142(1) of the Act was issued on 3.2.2016. During theassessment proceedings, the Chartered Accountant of the assessee discoveredcertain calculation mistakes pertaining to interest income for the assessment GURBAX SINGHyear in question. While reconciling the bank statements, the oobamenech2019.02.28 16:53Accountant of the assessee discovered that there had been an inadvertentomission to include interest income amounting tov69,347/-. Therefore,while the total mterest Income wasZL2,/6,8/75/-, in the income tax return,income ofS|2,07,528/- had been declared. According to the assessee, therewas a bonatide mistake in the calculation and there was neither any attemptto conceal nor was any malafide involved. The assessee suo motu revised herincome from other sources fromv2,07,528/- toZL2,/6,875/- on 30.3.2016 soas to rectify the calculation error. Consequently, the Assessing Officerrevised the total income at.zy7,93,560/- for the assessment year 1n question. The Assessing Officer noticed that the sum ofy20 lacs had been withdrawnfrom the assessee’s bank account in 2012 which had been re-deposited in thenext financial year into the same bank account. The Assessing Officer soughtto include the said amount as taxable income as unexplained investmentunder Section 69 of the Act. The assessee explained that the said sum hadbeen withdrawn for an investment opportunity. However, 1t was re-depositedin the Bank account when the investment plans did not materialise. Thecashbook also showed that this amount was withdrawn in 2012 and later re-deposited in 2013. Despite that, the Assessing Officer included the sum of|S|20 lacs as taxable income as unexplained investment under Section 69 of theAct. Thus, the Assessing Officer issued notice of demand dated 29.9.2016.under Section 156 of the Act alongwith assessment order under Section143(3) of the Act for further payment of|S|8,15,800/- as income tax for theassessment year in question. The assessee filed appeal before theCommissioner of Income Tax (Appeals) [CIT(A)] under Section 250(6) ofthe Act which was dismissed on 6.2.2018, Annexure P.7 holding theassessment order as valid on the assumption that because the assessee and her GURBAX SINGHhusband had taken certain home loans, they could not have ha@;wathstraav2019.02.28 16:53money for investment purposes and later re-deposited the same. Aggrievedthereby, the assessee filed further appeal before the Tribunal which was alsodismissed vide order dated 14.12.2018, Annexure P.1 on the same ground.Hence the instant appeal by the appellant-assessee. 3. We have heard learned counsel for the appellant-assessee. 4.The only issue arising in the present appeal relates to additionmade on account of unexplained cash found deposited in the bank account ofthe assessee amounting to’S|20,79,000/- under the provisions of Section 69 ofthe Act. It has been recorded by the Tribunal that the assessee had depositedcash to the tune oTzy20,79,000/- in her bank account in the relevant previousyear. When the assessee was asked to explain, she stated that the same was.attributable to her opening cash in hand and furnished a copy of cash bookfor the relevant financial year showing opening balance ofS|22,50,000/-. Theassessee was asked to justify the opening balance to which it was submittedthat the cash in hand to the tune of)zy20 lacs was on account of cash/withdrawn by her in the preceding year in June 2012 for the purpose ofinvestment which was not made due to lack of investment and thus remainedas such with her. The Assessing Officer noticed that the assessee had raisedloans and also withdrawn cash numerous times thereafter which was not.needed, if she already had so much cash in hand and had deposited cash inthree installments after a period of 8-9 months. The Assessing Officer notaccepting her explanation made the addition ofS|20,79,000/- on account ofunexplained deposits, to the returned income of the assessee. The CIT(A) inappeal held that the circumstances showed that the withdrawal attributed bythe assessee to the opening cash in hand was not actually available with her by the Assessing Officer and the CIT(A). The relevant findings recorded bythe Tribunal read thus:- by the Assessing Officer and the CIT(A). The relevant findings recorded bythe Tribunal read thus:- “10. We have heard rival contentions and have also gonethrough the orders of the authorities below. We do not find anyreason to interfere in the order of the learned CIT(A). Thelearned CIT(A) has noted the findings of the Assessing Officerthat the cash withdrawal which was attributed to having beenretained by the assessee and deposited in the impugned year,was 8-9 months old and though the assessee had claimed that thesame was kept by her in the form of cash 1n hand, it was noticedthat despite such huge amount of cash available with her she hadtaken loans thereafter and even made further withdrawals from|the bank of substantial amounts. Moreover, the learned CIT(A)has noticed that the assessee had claimed that the amount had|been withdrawn for making investment and since the investmentdid not materialize the same was re-deposited. But the depositwas made in a staggered manner over a period of three months.None of the facts as pointed out by the lower authorities hasbeen controvered before us. Further, no explanation for theabove has been given by the learned counsel for the assesseeeven before us. We therefore agree with the learned CIT(A) that.the explanation of the assessee does not appear to be plausible.As rightly held by the CIT(A), merely making cash withdrawalsat one point of time cannot be a sole basis for explaining thecash deposit in future. It 1s the totality of all the facts andcircumstances which is to be considered and thereafter aplausible view to be taken on the issue which in the present casewe find, that the assessee has been unable to offer to justify thecash deposits. The ground of appeal No.2 raised by the assessee1S also dismissed. | In effect, the appeal of the assessee is also dismissed.” GURBAX SINGH5.The concurrent findings of fact recorded by the,amthayiees,2019.02.28 16:53below have not been shown to be illegal or perverse by the learned counselfor the appellant-assessee warranting interference by this Court. Nosubstantial question of law arises. Consequently, the appeals stand dismissed. | February 13, 2019_Whether speaking/reasonedWhether reportable (Ajay Kumar Mittal) sudge sudge>YesYes (Manjari Nehru Kaul)