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Shri Dinesh Agarwal Versus The Income Tax Officer, Ward-4 (2) , Jaipur.

2015 (8) TMI 1164 - ITAT JAIPUR

Undisclosed income added by the AO on account of cash shortage - CIT(A) confirmed part addition - Held that:- The bank authorities have certified that assessee has withdrawn ₹ 8,90,000/-on 20.11.2005 which was entered in the bank register on 21.11.2005. The Standard Chartered Bank on these days were working for 365 days. It is normal practice of Bank that any transaction made by 365 days working branch on holidays is reported on Monday in case transaction is made on Sunday or on subsequent .....

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pplied by the AO at the appellate stage. Further assessee also filed the evidences of cash payment to M/s. Jai Hanumant on 20.02.2006 that on same day assessee received ₹ 8,00,000/- from M/s. Goodwill Fincom Pvt. Ltd. against an agreement to sale his shop situated at B-22, Transport Nagar, Jaipur for ₹ 21 lacs entered on 20.02.2006.

These evidences were produced before the AO but ld. AO doubted these evidences without any adverse material brought on record. The company is .....

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r of ld. CIT (A) and allow the assessee’s appeal. - Decided in favour of assessee. - ITA No. 327/JP/2013 - Dated:- 11-8-2015 - SHRI R.P. TOLANI AND SHRI T.R. MEENA, JJ. For The Assessee : Shri Mahendra Gargieya and Shri Fazlur Rahman Khan, (Advocates) For The Revenue : Shri Raj Mehta (JCIT) ORDER PER SHRI T.R. MEENA, A.M. This is an appeal by the Assessee emanating from the order of ld. CIT(A)-II, Jaipur dated 31.01.2013 for the assessment year 2006-07. The effective grounds raised in the appeal .....

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66.4 + ₹ 7,72,516.45). The addition so made by the AO and party confirmed by the ld. CIT (A), is totally contrary to the provisions of law and facts on the record and hence, the same may kindly be deleted in full. 3) The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234B & 234D of the Act. The appellant totally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, kin .....

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s of shares and units of different mutual funds. Source of investments made in acquiring units of various mutual funds was examined during the assessment proceedings. For this purpose, source of deposit in assessee s bank account maintained with Standard Chartered Bank vis-à-vis computerized personal books of accounts were examined. Each entry of cash deposit and withdrawals as appearing in the bank account of assessee was cross tallied with the entries appearing in personal computerized .....

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hich was replied by the assessee by letter dated 21.07.2008 which has also been reproduced by the AO on pages 3 & 4 to verify the correctness of the submissions of the assessee. The ld. AO enquired under section 131/133(6) of the IT Act with the concerned bank authority and stamp issuing authority. In response to notice under section 133(6) regarding withdrawal of ₹ 8,90,000/- on 20.11.2005, the Standard Chartered Bank has intimated that We are not able to locate any withdrawl on 20th .....

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xecute on that day itself but the transactions which took place on just preceding holiday. For instance, the transactions appearing in the records of the bank with the value date of Monday, in fact, would represent not only the transactions which took place on Monday itself but the transactions took place on Sunday also. In such situation it is not necessary to know whether a particular transaction was entered executed on Monday or on Sunday. The AO reproduced some of the contents of the stateme .....

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t as regards so called agreement to sale dated 20.02.2006, this agreement has been written on an stamp of ₹ 100/- having serial no. F 888923 and shown in the name of M/s. Goodwill Fincom Pvt. Ltd. by stamp vendor Shri Chetan Saini, Barodia Basti, Jaipur vide his register sl. No. 7887 dated 02.02.2008. Enquiries u/s 133(6) were conducted with the Office of the Collector (Stamps), Jaipur. In response, the Officer- in-Charge, District Record Cell, Jaipur vide his office letter no. Record/08/2 .....

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s query letter vide letter dated 11.12.2008 which has been reproduced on pages 6 & 7 of the assessment order. After considering the assessee s reply, the AO held that the bank records as well as statement of Shri Nitin Gupta, Manager (Operations) of Standard Chartered Bank shows that assessee has withdrawn ₹ 8,90,000/- on 21.11.2005. The letter dated 27.10.2008 of Bank cannot be given more credence than oath statement recorded under section 131 of the IT Act in view of the fact that th .....

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ny of the assessee. All the Directors of the company are close family members of the assessee viz. Bhabhi, wife, brothers, father etc. Even the so called agreement entered into with this company was signed by Smt. Kusum Agarwal who is family member of assessee. In turn, the assessee was in a position to arrange the affairs of this company to suit his need which he had also done. When agreement to sale itself has been proposed to be fabricated and bogus, there is no relevance of accounts of M/s. .....

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ed on 20.02.2006 was repair the next delay on the plea that the deal was cancelled. In fact, the funds had become available on 21.02.2006 as a result of cash withdrawn from the bank. The assessee was no more in need of cash. There was a gap of only one day between the payment made by the assessee and availability of cash on record in his hands. This gap had been made up through a cooked up story of obtaining advance against property on 20.02.2006 and returning back the same on 21.02.2006. This c .....

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explanation for the shortage of cash amount of ₹ 7,72,516.45 created on 20.02.2006. It was also held that the payment to the extent of ₹ 7,72,516.45 had been made by the assessee to M/s. Jai Hanumant out of his undisclosed income. Accordingly, the AO made an addition of ₹ 7,72,516.45 in the income of the assessee. Thus total addition was made by the AO at ₹ 12,85,082.90. 3. Being aggrieved by the order of AO, assessee carried the matter before ld. CIT (A) who had allowed .....

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proofs were also submitted during assessment proceedings but were not considered by the AO. Therefore the addition of ₹ 8,00,000/- is directed to be deleted, as also pleaded alternatively by the appellant, and the balance of ₹ 4,85,082/- (Rs.12,85,082 - ₹ 8,00,000) is upheld. 4. Now the assessee is before us. The ld. A/R of the assessee submitted that assessee had submitted all the evidences confirming the availability of sufficient cash on the subjected date. It was submitted .....

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rded the statement of Shri Nitin Gupta, Manager (Operations), Standard Chartered Bank on 10.09.2008 under section 131 of the Act , and on that basis the AO concluded that said cash was withdrawn in fact on 21.11.2005 only. The AO was asked to supply the copy of statement of Shri Nitin Gupta, Manager (Operations) recorded on 10.09.2008 vide A/R s request letter dated 11.12.2008. The AO had not provided the copy of statement during the assessment proceedings nor allowed any opportunity of cross ex .....

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ion on pages 38 and 39 of the paper book and argued that said statement should be read in totality which clearly explained the factual position that modus operandi adopted by the bank as regards its working and also as regards the recording of the transactions. It has been admitted by Shri Nitin Gupta, Manager (Operations) in answer to question no. 2 that bank was operating 365 days branch till 2007 (up to June, 2007) and in answer to question no. 3 he admitted that all transactions on Sundays a .....

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us the Manager (Operations) categorically answered all the transactions took place on Sundays and holidays but were being recorded and being reflected in the bank s record on next Monday or next working day. Therefore, it was argued that it is a settled law of evidence that statement is to be read in its entirety and not in piece meal which suits to the Revenue authorities or goes against the assessee as held in case of Hissaria Brothers vs. ACIT, 22 Tax World 684 (JD). Any statement recorded at .....

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er 20, 2005 was a Sunday, the said amount had been posted in the account on 21st November, 2005. Therefore, addition made by the AO is deserves to be deleted. The ld. A/R further argued that there was no cash shortage. The ld. CIT (A) must have deleted the addition on its merit itself once she never disagreed with assessee s contentions and the evidences produced before her were neither doubted nor rebutted. Although by doing so, she has indirectly confirmed the addition of ₹ 5,12,566/- wi .....

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Director of the buyer company which is a private limited company. It was a validly entered agreement between the parties duly notarized and therefore the legal implication flowing therefrom cannot be avoided. Based on the agreement, any failure on the part of the buyer would have provided a legal remedy to the seller assessee. There is no contrary evidence brought on record by the lower authorities. The AO only rejected the submission that this agreement was within the group company and managed .....

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ve the availability of sufficient cash or the AO was justified in making addition of cash shortage of ₹ 5,12,516/- on 20.11.2005 and of ₹ 7,12,516/- on 20.02.2006, the earlier date addition may kindly be telescoped into the later date addition and at the worst it is only the balance of ₹ 1,99,949/- may be confirmed. 5. At the outset, the ld. D/R supported the order of ld. CIT (A). 6. We have heard the rival contentions and perused the material on record. The bank authorities ha .....

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