ITA No. 416 of 2016 (O&M) 1 IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 416 of 2016 (O&M) Date of decision: 17.4.2017 Ravi Mallick, Prop. of M/s Sunkraft Designs, Ludhiana . Appellant Vs. DCIT, Circle III, Ludhiana ..Respondent CORAM: HON BLE MR. JUSTICE AJAY KUMAR MITTAL HON BLE MR. JUSTICE RAMENDRA JAIN Present: Mr. Deepanshu Jain, Advocate with Mr. Divya Suri Advocate for appellant. Ajay Kumar Mittal,J. 1. delay in refilling appeal is condoned. 2. assessee-appellant has filed instant appeal under Section 260A of Income Tax Act, 1961 (in short, Act ) against order dated 28.10.2015, Annexure A.8, passed by Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (in short, Tribunal ) in ITA No. 274/CHD/2013, for assessment year 2009-10, claiming following substantial questions of law:- (i) Whether under facts & circumstances of case, benefit of closing cash in hand as on 31.03.2008 duly disclosed can be given set-off in relevant assessment year 2009-10? 1 of 7 ::: Downloaded on - 02-06-2017 10:18:09 ::: ITA No. 416 of 2016 (O&M) 2 (ii) Whether under facts & circumstances of case, onus stands discharged by assessee under Section 68 of Income Tax Act, 1961 for proving source of cash deposits through substantial evidences already on record? 3. few facts relevant for decision of controversy involved as narrated in appeal may be noticed. appellant-assessee is proprietor of Sun Craft Designs and is primarily engaged in business of manufacturing of hosiery garments. assessee filed his return of income on 30.09.2008 declaring income of ` 14,53,883/-. On 27.08.2010, case was selected for scrutiny. Notice under Section 143(2) of Act was issued to assessee. assessee filed detailed replies/information along with documentary evidence, books of account and vouchers. During course of assessment proceedings, assessee was required to explain source of cash deposit of ` 26,77,000/- in saving Bank account with ICICI Bank during period ending 31.03.2009. Not satisfied with reply submitted by assessee, Assessing Officer made assessment under Section 143(3) of Act on 30.12.2011 at amount of ` 41,78,460/-. addition of ` 26,77,000/- under Section 68 of Act and disallowance of ` 47,574/- under Section 40(a) (ia) of Act was made. Aggrieved by order, assessee filed appeal before Commissioner of Income Tax Appeals [CIT(A)]. Vide order dated 29.01.2013, Annexure A.6, CIT(A) partly allowed appeal filed by assessee. Addition of ` 14.42 lacs out of ` 26,77,000/- was deleted. additions of ` 12.35 lacs and ` 47,574/- were confirmed. Not satisfied with order, assessee and revenue filed cross appeals before Tribunal. Vide order dated 28.10.2015, Annexure A.8, Tribunal dismissed both appeals and upheld order passed by CIT(A). 2 of 7 ::: Downloaded on - 02-06-2017 10:18:13 ::: ITA No. 416 of 2016 (O&M) 3 assessee filed miscellaneous application dated 04.01.2016 before Tribunal for reconsidering order dated 28.10.2015. Vide order dated 03.2.2016, Annexure A.12, Tribunal dismissed miscellaneous application. Hence, present appeal by assessee before this Court. 4. We have heard learned counsel for appellant-assessee. 5. Admittedly, during period relevant for assessment year under consideration assessee had deposited ` 26,77,000/- in his saving account with ICICI Bank. Assessing Officer was not satisfied with explanation given by assessee with regard to source of deposit. Thus, addition was made by Assessing Officer to income of assessee. It has been recorded by CIT(A) that cash withdrawals made on different dates by assessee were from his saving Bank account with ICICI Bank. After examining matter, CIT(A) came to conclusion that cash deposits in Bank account amounting to ` 14.42 lacs had been explained as being sourced from cash withdrawals from same account. It was further recorded that no evidence on record was shown that withdrawals made by assessee were invested in assets elsewhere. There was no substantial gap between deposits and withdrawals. Thus, Tribunal rightly upheld order passed by CIT(A). assessee had paid professional fee of ` 47,574/- to Shri Radhey Shyam Sharma on account of supervision of works of factory building. Assessing Officer made disallowance under Section 40(a) (ia) of Act on ground that no TDS was deducted on this amount. CIT(A) confirmed disallowance holding that entire amount was payable to Sh. Radhey Shyam Sharma who had raised consolidated bill of ` 47,574/-. Thus, assessee was liable to deduct TDS on this amount. 3 of 7 ::: Downloaded on - 02-06-2017 10:18:13 ::: ITA No. 416 of 2016 (O&M) 4 Tribunal upheld order passed by CIT(A) on this point also. In miscellaneous application filed by assessee before Tribunal, it was pleaded that cash deposits were made in saving account from available cash in hand, cash withdrawals from saving account and sale proceeds of land belonging to Smt. Ritu Mallick. It was recorded by CIT(A) that no evidence of sale of land belonging to Smt. Ritu Mallick as well as source of cash in hand as claimed by assessee was filed during course of assessment proceedings. Tribunal accordingly dismissed miscellaneous application vide order dated 03.02.2016. relevant findings recorded by Tribunal dated 28.10.2015, Annexure A.6 read thus:- 7. It is relevant to observe here that Ld. DR could not point out additional evidence, if any, admitted by CIT(A). On perusal of order of CIT(A), it would be clear that CIT(A) has not admitted any additional evidence as alleged by Revenue, therefore, there is no question of any violation of provisions of Rule 46A(2) of I.T. Rules. As regards merits of case, it is admitted fact that assessee had deposited cash amounting to ` 26,77,000/- in his bank account with ICICI bank. learned CIT(A) has given details of deposits made on various dates. CIT(A) has also mentioned cash withdrawals made on different dates by assessee from his saving bank account with ICICI bank. Learned CIT(A) has also annexed copy of bank account of assessee as Annexure I to impugned order. learned CIT(A) after analyzing details of bank account statement, came to conclusion that cash deposits in bank account amounting to 14.42 lacs have been explained as being sourced from cash withdrawals from same account. There is no material on record to controvert above findings of CIT(A). question involved in this case is pure question of fact and no legal point is involved. assessee 4 of 7 ::: Downloaded on - 02-06-2017 10:18:13 ::: ITA No. 416 of 2016 (O&M) 5 had claimed that cash deposits were made out of cash available with him from cash withdrawals made from same account. There is no evidence on record to show that withdrawals made by assessee were invested in assets elsewhere and it is also not case of Assessing Officer. Furthermore, there is no substantial gap between deposits and withdrawals. In our view, order of CIT(A) requires no interference at our level. Accordingly, we dismiss ground Nos. 1 to 3 of assessee s appeal and ground Nos. (i) to (iv) of Revenue s appeal. 8. xxxxxxx xxxxx 9. We have heard rival submissions Shri Sudhir Sehgal learned counsel for assessee submitted that assessee had paid professional fee of ` 47,574/- to Shri Radhey Shyam Sharma on account of supervision works of factory building. However, Assessing Officer made disallowance under Section 40(a) (ia) of Act stating that no TDS was deducted on this payment. On appeal, CIT(A) confirmed disallowance stating that whole of amount was payable to Shri Radhey Shyam Sharma who had raised consolidated bill of `47,574/-. assessee was therefore liable to deduct TDS on this payment. He accordingly held that disallowance made by Assessing Officer was justified. In our view, order of CIT(A) deserves to be upheld as assessee has failed to deduct TDS on payment made to Shri Radhey Shyam Sharma as provisions relating to TDS are mandatory. Accordingly, we dismiss ground No.4 of assessee s appeal. 6. Further findings recorded by Tribunal in miscellaneous application vide order dated 03.02.2016 read thus:- 4. In this case, during period relevant to assessment year under consideration, assessee had deposited ` 26,77,000/- in his bank account with ICICI bank. In absence of any satisfactory explanation of source of deposit, Assessing Officer made addition. During course of appellate 5 of 7 ::: Downloaded on - 02-06-2017 10:18:13 ::: ITA No. 416 of 2016 (O&M) 6 proceedings before CIT(A), assessee took plea that cash deposits were made in saving account from available cash in hand, cash withdrawals from saving account and sale proceeds of land belonging to Smt. Ritu Mallick. Further, assessee vide his written submissions dated 22.01.2013, submitted cash flow statement for financial year 2007-08 and shown cash deposit of ` 50,000/- on 31.07.2007, ` 50,000/- on 27.12.2007 and ` 30,000/- on 28.03.2008 in name of Smt. Ritu Mallick, wife of assessee. Thus, cash flow statement submitted by assessee pertained to assessment year 2008-09 and not for assessment year under reference. As regards assessee contention of having cash in hand and also having cash on account of sale or property by assessee s wife Smt. Ritu Mallick, learned CIT(A) observed that no such reply was filed by assessee before Assessing Officer during course of assessment proceedings to claim source of cash deposits in bank account relevant to period under consideration. learned CIT(A) has categorically stated that said contention of assessee was merely afterthought. He has also observed that no evidence of sale of land belonging to Smt. Ritu Mallick as well as source of cash in hand as claimed by assessing was filed during course of assessment proceedings. 5. next contention of assessee before CIT(A) was that following deposits in bank account of assessee were made out of income of Smt. Ritu Mallick, wife of assessee. Date Amount 31.07.2007 ` 50,000/- 27.12.2007 ` 50,000/- 28.03.2008 ` 30,000/- learned Commissioner has observed that cash deposits in bank account were made during period 01.04.2007 to 31.03.2008 and addition in assessee s case has been 6 of 7 ::: Downloaded on - 02-06-2017 10:18:13 ::: ITA No. 416 of 2016 (O&M) 7 made on account of cash deposits in bank account during period 01.04.2008 to 31.03.2009. Therefore, assessee failed to explain cash deposits made during period 01.04.2008 to 31.03.2009 in bank account out of cash available from income of Smt. Ritu Mallick. We may also observe here that instant miscellaneous application, assessee has not pointed out any apparent mistake in order of Tribunal Sh. Deepanshu Jain, learned counsel of assessee submitted that assessee had filed cash flow statement for period 01.04.2008 to 31.03.2009 before CIT(A). However, assessee failed to substantiate his claim that any cash flow statement relating to period from 1.04.2008 to 31.03.2009 was filed before CIT(A). Even during course of appellate proceedings before Tribunal, no such cash flow statement was submitted by assessee. Thus, considering entire facts and circumstances of present case, miscellaneous application filed by assessee is devoid of any merit and deserves dismissal. Accordingly, we dismiss miscellaneous application filed by assessee. 7. findings recorded by Tribunal are pure findings of facts which have not been shown to be illegal or perverse by learned counsel by appellant-assessee. Thus, no substantial question of law arises. Consequently, appeal stands dismissed. In view of dismissal of appeal on merits, question of condonation of delay in filing appeal is left open. (Ajay Kumar Mittal) Judge April 17, 2017 (Ramendra Jain) gs Judge Whether speaking/reasoned Yes Whether reportable Yes 7 of 7 ::: Downloaded on - 02-06-2017 10:18:13 ::: Ravi Mallick v. DCIT, Circle III, Ludhiana