Commissioner Of Income Tax-Ii,Chandigarh v. Parneeta Goyal

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 278 of 2010Date of decision: 7.2.2011 Commissioner of Income Tax-II,Chandigarh --- Appellant Versus Parneeta Goyal --- Respondent CORAM:HON’BLE MR. JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present:Ms. Urvashi Dhugga, Senior Standing Counselfor the appellant-Revenue. Mr. Ravi Shankar, Advocatefor the respondent-assessee. --- AJAY KUMAR MITTAL, J. This appeal under Section 260A of the Income-Tax Act,1961 (for short “the Act”) has been filed by the Revenue against theorder dated 28.7.2009, passed by the Income Tax Appellate TribunalChandigarh Bench ‘B’ Chandigarh (in short “the Tribunal”) in ITA No.353/Chandi/2009, relating to the assessment year 2005-06. The following substantial question of law has been claimedfor determination by this Court: “Whether on the facts and in the circumstances of thecase and in law the order of the Hon’ble ITAT is correct indeleting the addition made by the Assessing Officer,holding that the cash credits were out of sale of propertywhere the assessee failed to prove the nexus between thecash deposits and withdrawals from bank/sale proceeds ofthe house.” The facts, in brief, necessary for adjudication as narratedin the appeal, are that the assessee filed her return of income on26.9.2005 for the assessment year 2005-06 declaring income of Rs.87,747/-. The assessing officer having come to know of cash depositsof Rs.10,97,300/- and Rs.32,84,000/- made by the assessee askedfrom her the source of such deposits. The assessee explained to theassessing officer vide written reply dated 15.11.2007 that the saidamounts were those which she withdrew from the bank on differentdates. It was further claimed by her that she had sold a house for asum of Rs. 24,70,000/- in which she had 50% share whereasremaining 50% share belonged to her husband. The reply sofurnished by the assessee did not find favour with the assessingofficer who accordingly, vide order dated 26.12.2007, made anaddition of Rs. 13,50,000/- under Sections 68 and 69 of the Act. The Commissioner of Income-tax (Appeals) {in short “theCIT(A)”} upheld the order of the assessing officer and dismissedassessee’s appeal by order dated 19.3.2009. The Tribunal, however, allowed the appeal of theassessee, vide the order under appeal by relying upon the decision of the apex Court in Lal Chand Bhagat Ambika Ram Vs. Commissionerof Income Tax, 37 ITR 288 (SC). The Tribunal observed that burdento prove the source of cash deposits was on the assessee and suchonus had been discharged by her by producing of relevant record.The issue that arises for consideration by this Court is,whether the amounts of Rs. 13,50,000/- and Rs.6,15,300/- depositedby the assessee in her bank account on various dates was herundisclosed income or the cash deposits had been duly explained bythe assessee. The Tribunal while holding the aforesaid deposits to begenuine recorded the following finding: “It is seen that the impugned additions were made by theAssessing Officer on the plea that the assessee hasfurnished bulky information simply to escape from thesituation. We are not in agreement with such a findingbecause unless and until any specific defect is pointed out,such a finding cannot be sustained and second, if theAssessing Officer was not satisfied, nothing prevented himto ask the assessee to explain the source of the amountswhere he was having any doubt. Undisputedly, theassessee furnished the copies of bank statements, cashbook and other details as required by him. The claim of theassessee is further fortified from the fact that even theAssessing Officer himself has mentioned at page 1 of theassessment order that the assessee attended theproceedings from time to time and filed details/information as asked for. The relevant portion of the order isreproduced herewith:- as asked for. The relevant portion of the order isreproduced herewith:- “Questionnaire dated 10.8.2006 along with statutorynotices under Section 142(1) and 143(2) were issuedand served on 14.8.2006. Shri Annet Goyal, C.A.attended the proceedings from time to time. Fileddetails/information asked for. Case has beendiscussed.” 4.During hearing of this appeal, it was pleaded by thelearned counsel for the assessee that each and everyentry was duly explained to the Assessing Officer by givingits narration and complete cash book was produced. Thisfactual matrix was not controverted by the Revenue. Eventhe assessee vide her letter dated 24.12.2007 explainedher position. As far as the contention of the learned DRthat the assessee made frequent withdrawals/ deposits inthe respective accounts, we are of the view that there is nobar in depositing or withdrawing the amounts unless anduntil some foul play is brought on record. Even if, theargument of the assessee that the amounts weredeposited/withdrawn, as the assessee wanted to purchasea residential property is not accepted, still there is no bar.Even in the impugned order, the stand of the assesseewas not found convincing in the light of the decision in thecase of Sumiti Dayal, we are of the view that the ratio ofpreponderance of human probability is applicable to both sides. The paper book filed by the assessee (running into59 pages) contains cash book for financial year 2004-05,bank statement of IndusInd Bank Account No. 782245 and782828, bank statement of Vijaya Bank, copy of books ofaccount along with relevant entries, various replies filed bythe assessee clearly shows that the assessee furnishedthe necessary details. As far as the plea of the learned DRthat bulky information was filed by the assessee itselfcannot be the basis of addition and for this proposition, weare fortified by the decision in the case of Narndra G.Goradia (HUF) Vs. CIT (234 ITR 571) (Bom). In theabsence of any specific defect or rejection of books ofaccount, the information/books of account filed by theassessee simply cannot be brushed aside. The additionsseem to be on the basis of suspicion, conjecture andsurmises, therefore, such additions cannot be sustained.Our view is fortified by the decision from the Hon’ble ApexCourt in the case of Lal Chand Bhagat Ambika Ram Vs.CIT (37 ITR 288) (SC), therefore, in the absence of anycogent reasoning and adverse material, such plea of theRevenue cannot be sustained. We are in agreement of thelearned DR only to the extent that the assessee has toestablish the nexus. Admittedly, the burden to prove thesource of receipt is on the assessee but such an onus hasbeen discharged by producing the relevant record. Underthe aforesaid facts, we are of the view that when the necessary details were furnished by the assessee, onusshifts to the Revenue to explain as to how the explanationof the assessee is not acceptable. The ratio laid down inthe case of CIT Vs. Daya Chand Jain Vaidhya 98 ITR 280(All.) fortifies our view.” The deposits made by the assessee were held to begenuine by the Tribunal after appraisal of bank statements of IndusInd Bank and Vijaya Bank in which she had the account and also afterperusal of copy of entries of withdrawals and deposits in the accountsbeing operated by her. Learned counsel for the Revenue could notshow that the findings recorded by the Tribunal holding the cashdeposits to be genuine were liable to be interfered with. In view ofthis, no substantial question of law arises for consideration by thisCourt. In view of the above, finding no merit in the appeal, thesame is dismissed. (AJAY KUMAR MITTAL) JUDGE February 7, 2011*rkmalik* (ADARSH KUMAR GOEL) JUDGE