Case Law Details
Vinod Bhandari Vs PCIT (ITAT Indore)
Conclusion: Where there were two funds one which was already taxed and other had not and there were remittances during the accounting year for a certain sum, the source of which was not indicated then the presumption was that the remittances should have been from the fund which had already suffered tax. Thus, assessee was entitled to the telescoping benefit of the income surrendered during the year to the cash deposited in the bank account as the surrendered income which was invested in hundis were received back in cash and were duly accounted in the books of accounts.
Held: Assessee was a doctor by profession. Survey proceedings u/s 133A was carried out at the premises of M/s B Hospital & Research Centre (BHRC). During the course of survey proceedings, incriminating material in the form of Hundis were found and impounded. Assessee in his individual capacity admitted the discrepancies of un secured loan given to various persons and surrendered additional income of Rs.7 crores for Financial Year 2011-12. Subsequently, assessee e-filed return of income for assessment year 2012-13 declaring income of Rs.7,01,74,054/- which was further revised declaring income of Rs.7,41,07,850/- AO observed that the original return was a belated return as provided u/s 139(4) and thus could not be revised. AO therefore treated the revised return filed as invalid return and assessment proceedings were carried out taking the basis of original return filed. AO also observed that there were huge cash deposits in the bank account of the assessee during the month of February and March. Assessee claimed that the surrendered income of Rs.7 crores which was invested in the form of hundi matured during the year and the money so received (Principal and Interest) was deposited in the bank account and the same were duly recorded in regular books. However AO in view of Vyapam scam which involved the allegation of bribe of illegal money for admission in medical colleges in Madhya Pradesh, took a view that assessee being unable to explain the source of cash deposited in bank account by not providing the information about the persons named in the hundi found during the course of survey, did not accept the source of cash explained by the assessee thus the alleged cash deposit of Rs.7,34,79,097/- was treated as unaccounted income earned from Vyapam scam and made addition thereof. Accordingly income assessed at Rs. 14,75,87,000/-. It was held that proceeding initiated against the assessee under the Vyapam case fall in financial year 2012-13 i.e. subsequent year whereas cash was deposited during Financial Year 2011-12. There was no evidence on the record to substantiate this fact that assessee received any unaccounted income in the form of bribe for admission in medical college during financial year 2011-12. AO merely on the basis of surmises and conjectures had taken this view. He ignored the fact that the assessee had surrendered Rs.7 crores as unaccounted income during the year. This unaccounted income in cash was used in earning interest income by way of giving short term advance on hundis. Only the name of person receiving the money, his signature, amount given as advance, rate of interest, date of entering into the hundi agreement and the maturity date of receiving the money were provided. When assessee showed the original hundi he received the principal and interest. Assessee had surrendered his income from other source as unexplained money which was not recorded in the books of accounts and the assessee failed to offer any explanation about the nature and source of acquisition of these unexplained money/income. The hundis were impounded during the course of survey which itself was sufficient evidence that unaccounted income has been invested. The unaccounted income had been offered to tax which was not in dispute. Also if there were two funds one which was already taxed and other had not and there were remittances during the accounting year for a certain sum, the source of which was not indicated then the presumption was that the remittances should have been from the fund which had already suffered tax. Thus, assessee was entitled to the telescoping benefit of the income surrendered during the year to the cash deposited in the bank account.
FULL TEXT OF THE ITAT JUDGEMENT
The above captioned appeals are filed at the instance of assessee pertaining to the Assessment Year 2012-13. ITA No.350/Ind/2017 is directed against the order of Ld. Pr. Commissioner of Income Tax-1 dated 30.03.2017 passed u/s 263 of the Act. ITA No.57/Ind/2017 is directed against the order of Ld. Commissioner of Income Tax-1, Indore dated 22.11.2018 which is arising out of the order u/s 143(3) r.w.s. 263 of the Act dated 27.12.2017 framed by DCIT-2(1), Indore. ITA No.66/Ind/2017 is directed against the order of Ld. Commissioner of Income Tax-III, Indore dated 23.11.2016 which is arising out of the order u/s 143(3) of the Act dated 24.03.2015 framed by ACIT-2(1), Indore.
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