Baldevsingh Wahi, Ahmednagar V. Income-tax Officer,

CO 21/PUN/2015

• Counselvise Citation: [2017] 112 COUNSELVISE.COM (IT) 4504 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PUN C O NO; ACHAL SHARMA ITA NOS
• Keywords: Unexplained cash credit; Business income; Source of fund; Capital Gains

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 1212/PUN/2014 / ASSESSMENT YEAR : 2008-09 ITO, WARD - 2, AHMEDNAGAR . / APPELLANT V/S SHRI BALDEV SINGH WAHI, LEGAL HEIR OF SMT. GURUCHARAN WAHI, RAJ CHAMBERS, NEAR KOTHALA ROAD, AHMEDNAGAR. PAN : AAMPW0454E . / RESPONDENT . / ITA NO. 333/PUN/2014 / ASSESSMENT YEAR : 2008-09 SHRI BALDEVSINGH WAHI, LEGAL HEIR OF LATE SMT. GURUCHARAN WAHI, B-34, RAJ CHAMBERS, NEAR KOTHALA ROAD, AHMEDNAGAR. PAN : AAMPW0454E . / APPELLANT V/S ADDL.CIT, AHMEDNAGAR RANGE, AHMEDNAGAR . / RESPONDENT C.O. NO. 21/PUN/2015 / ASSESSMENT YEAR : 2008-09 SHRI BALDEVSINGH WAHI, LEGAL HEIR OF LATE SMT. GURUCHARAN WAHI, B-34, RAJ CHAMBERS, NEAR KOTHALA ROAD, AHMEDNAGAR. PAN : AAMPW0454E . / APPELLANT V/S ITO, WARD - 2, AHMEDNAGAR . / RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI ACHAL SHARMA 2 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE THREE APPEALS UNDER CONSIDERATION AGAINST THE ORDERS OF CIT(A)-IT/TP, PUNE DATED 11-12-2013 RELATING TO ASS ESSMENT YEAR 2008-09. THE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE A ND THE CROSS OBJECTION FILED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DECIDED BY THIS COMPOSITE ORDER. ITA NO.1212/PUN/2014 (BY REVENUE) : 2. WE SHALL TAKE UP THE REVENUES APPEAL FIRST BEIN G ITA NO.1212/PUN/2014. BEFORE TAKING UP THE GROUNDS RAI SED BY THE REVENUE IN THE APPEAL, WE FIND NEED OF CULLING AT CERTAIN FACT S. THE BRIEF FACTS OF THIS CASE INCLUDE THAT THE ASSESSEE IS AN INDIVIDUAL DOI NG MULTIPLE BUSINESS ACTIVITIES INCLUDING TRUCK PLYING, DEALING IN SHARE S, ETC. APPROPRIATE HEAD OF INCOME FOR TAXING OF THE GAINS AROSE FROM THE SALE OF SHARES WAS THE SUBJECT MATTER OF DISPUTE DURING THE ASSESSMENT PROCEEDINGS . AO TREATED THE GAINS EARNED ON SALE OF SHARES AS BUSINESS INCOME AGAINST THE ASSESSEES CLAIM OF SHORT TERM CAPITAL GAINS. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE AND DIRECTED THE AO TO TREAT THE SAME AS SHORT TERM CAP ITAL GAINS AS PER THE DISCUSSION GIVEN IN PARA NO.5 OF HIS ORDER. IT IS EVIDENT FROM THE SAID PARAGRAPH THAT THE CIT(A) RELIED HEAVILY ON THE ORD ER OF THE ITAT IN ASSESSEES OWN CASE VIDE ITA NOS.80 AND 1331/PN/201 1, ITA NOS. 82 & 1332/PN/2011 AND ITA NOS.81/PN/2011 ORDER DATED 22- 03-2013. THE TRIBUNAL PASSED THE COMMON ORDER COMMONLY DISPOSING THE GROUND OF / DATE OF HEARING :28.06.2017 / DATE OF PRONOUNCEMENT: 30.06.2017 3 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 APPEALS BY SHRI IN THE CASES OF BALDEVSINGH SATSING H WAHI (HUF), GURUCHARANKAUR B.WAHI & BALDEVSINGH SATSINGH WAHI, THE ASSESSEE. 3. AGGRIEVED WITH THE ABOVE FINDING OF THE CIT(A) T HE REVENUE FILED THE PRESENT APPEAL RAISING 7 GROUNDS OF APPEAL. 4. BEFORE US, BOTH THE COUNSELS SUBMITTED THAT ALL THE GROUNDS IN QUESTION REVOLVES AROUND PROPER HEAD OF INCOME FOR TAXING THE GAINS IN THE ASSESSEES CASE. 5. BRINGING OUR ATTENTION TO THE CLAIM OF THE ASSES SEE IN A.Y.2005-06 ONWARDS IT IS SUBMITTED THAT THE ASSESSEE IS CONSIS TENT IN OFFERING SIMILAR GAINS IN THE PAST UNDER THE HEAD SHORT TERM CAPITA L GAINS. THE CLAIM IS NORMALLY ACCEPTED BY THE REVENUE WITH EXCEPTION OF FEW ASSESSMENT YEARS, WHEREVER, AO DISTURBED THE CLAIM OF THE ASSESSEE. ASSESSEE PREFERRED AN APPEAL AND EVENTUALLY, THE TRIBUNAL WAS GRANTING TH E RELIEF IN FAVOUR OF THE ASSESSEE. 6. ON HEARING BOTH THE PARTIES AND PERUSING THE ORD ERS OF THE REVENUE ON ONE SIDE AND THE PAPER BOOK FILED BEFORE US, WE FIND IT IS RELEVANT TO EXTRACT THE CONTENTS OF PARA NO.5 OF THE ORDER OF C IT(A) AND THE SAME READS AS UNDER : 5. THE APPELLANT BEFORE ME, SUBMITTED THAT THE ITA T VIDE ORDER BEARING ITA NO.80 AND 1331/PN/2011 DATED 22-03-2013 IN THE COMMON ORDER IN THE CASES OF BALDEV SINGH WAHI (HUF), GURU CHARAN KAUR WAHI AND BALDEV SINGH WAHI HAS REVERSED THE ORDERS OF THE LE ARNED AO AND THE CIT(A) ON THE ABOVE GROUND AND THUS PRAYED TO TREAT THE GAIN AS SHORT TERM CAPITAL GAIN AND NOT BUSINESS INCOME. 7. THUS, IT IS EVIDENT FROM THE ABOVE THAT THE CIT( A) HAS COMPLIED WITH THE DIRECTIONS OF THE TRIBUNAL FOLLOWING THE PRINCI PLES OF JUDICIAL DISCIPLINE AND ALLOWED THE APPEAL OF THE ASSESSEE. THE REVENU E HAS NOT MADE OUT 4 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 ANY CASE THAT THE SAID DECISION OF THE TRIBUNAL REQ UIRES ANY ALTERATION. THEREFORE, WE ARE OF THE OPINION THAT WE SHOULD AFF IRM THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. ACCO RDINGLY, ALL THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ITA NO.333/PUN/2014 (BY ASSESSEE) : 9. NOW, WE PROCEED TO TAKE THE ASSESSEES APPEAL BE ING ITA NO.333/PUN/2014. THE GROUNDS RAISED BY THE ASSESSE E IN ITS APPEAL READ AS UNDER : 1. HONOURABLE CIT(A) HAS ERRED IN NOT ADJUDICATING THE ISSUE OF SURPLUS ON SALE OF SHARES WITHIN THE PERIOD OF ONE YEAR AS SHORT TERM CAPITAL GAIN. APPELLANT PRAYS FOR DECISION THAT IT IS ASSESSABLE AS SHORT TERM CAPITAL GAIN AND NOT BUSINESS INCOME. 2. LOWER AUTHORITIES HAVE ERRED BOTH ON FACTS AND I N LAW IN MAKING ADDITION OF RS.49,05,459/- U/S.68 OF THE ACT. SAME MAY PLEASE BE DELETED. 3. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 4. APPELLANT DENIES LIABILITY OF INTEREST U/S.234B, 234C ETC. SAME MAY PLEASE BE DELETED. 5. APPELLANT PRAYS TO ADD, ALTER, AMEND AND/OR WITH DRAW THE GROUND/S DURING THE PROCEEDINGS. 10. REFERRING TO GROUND NO.1, LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE SAID GROUND IS LINKED TO THE ISSUE RAISED BY THE REVENUE IN THEIR APPEAL. HE FAIRLY MENTIONED THAT IN CASE REVENUES APPEAL IS DISMISSED FOR ANY REASON THIS GROUND IS ALSO REQUIRED TO BE DISMI SSED. AS DISCUSSED ABOVE IN ITA NO.1212/PUN/2014, WE HAVE DISMISSED TH E REVENUES APPEAL. CONSEQUENTLY, THE GROUND NO.1 OF THE ASSESSEE IS AL SO DISMISSED. 5 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 11. REFERRING TO GROUNDS OF APPEAL NO. 3 TO 5, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE GROUNDS ARE EITHER CO NSEQUENTIAL OR GENERAL IN NATURE. ACCORDINGLY, THE SAID GROUNDS ARE DISMI SSED AS SUCH. 12. THAT LEAVES GROUND NO.2 AND THE FACTS RELEVANT FOR THIS GROUND INCLUDE THAT THE ASSESSEE BROUGHT IN ADDITIONAL CAP ITAL AMOUNTING TO RS.49,05,459/-. THERE WAS AN ENQUIRY ABOUT THE SOUR CE OF THESE FUNDS DURING THE ASSESSMENT PROCEEDINGS. EXCEPT THE INFO RMATION ON THE SAID SOURCES, ASSESSEE SUBMITTED VARIOUS OTHER DOCUMENTS AND DETAILS WITH WHICH THE AO IS NOT SATISFIED REGARDING THE SOURCES OF THE SAID CAPITAL. EVENTUALLY, THE AO MADE ADDITION OF RS.49,05,459/- BY GIVING THE FOLLOWING REASONING. THE REASONING READS AS UNDER : 29. . . . . . . . . BUT THE WORKING GIVEN BY THE A SSESSEE IS NOT CLEAR AND DOES NOT EXPLAIN THE AMOUNT OF ADDITION TO THE CAPI TAL. THE ASSESSEE WAS ASKED TO GIVE A FURTHER CLARIFICATION WHICH HAS NOT BEEN SUBMITTED SO FAR. THEREFORE, SUM OF RS. RS.49,05,459/- IS ADDED TO TH E TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT U/S.68 OF THE I .T. ACT, 1961. . . . . . . . 13. DURING THE FIRST APPEAL PROCEEDINGS, ASSESSEE F ILED SOME MORE DETAILS WHICH WERE REMANDED BY THE CIT(A) TO THE FI LE OF THE AO VIDE LETTER DATED 21-06-2013. AO WAS ASKED TO EXAMINE THE SOUR CES OF HUGE CASH DEPOSITS IN AMA BANK ACCOUNT NO.59/61 ALONG WITH MA NY OTHER DIRECTIONS. AO SUBMITTED A REMAND REPORT VIDE LETTER DATED 30-0 8-2013. AO HAS NOT GIVEN ANY DISCUSSION ABOUT THE SOURCE OF THE FUNDS IN HIS REPORT. THIS IS THE STAND OF THE ASSESSEE THAT THERE ARE NO CASH DE POSITS IN THE BANK BUT THERE ARE ONLY CASH WITHDRAWALS. THEREFORE, THE ST ATEMENT OF THE AO IN HIS REMAND REPORT IS ERRONEOUS. 14. AFTER HEARING THE ASSESSEE AND PERUSING THE SAI D REMAND REPORT THE CIT(A) CAME TO THE CONCLUSION THAT THE ASSESSEE FAI LED TO EVIDENCE THE SOURCE OF FUNDS. EVENTUALLY, THE CIT(A) CONFIRMED THE ADDITION OF 6 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 RS.49,05,459/- AND DISMISSED THE APPEAL OF THE ASSE SSEE ON THIS ISSUE. THE CONTENTS OF PARA NO.2.2.9 OF THE ORDER OF CIT(A) IS RELEVANT. 15. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THERE ARE MANY APPARENT MISTAKES IN THE ORDERS OF THE AO AND THE CIT(A) WITH REGARD TO THE CASH DEPOSITS QUA THE CASH WITHDRAWALS. THE RE IS MESS IN THE MIND OF THE AO REGARDING THESE FACTS. ACCORDING TO THE LD AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, OFFICERS HAS NOT U NDERSTOOD THE CONTENTS OF THE CAPITAL ACCOUNT OF THE ASSESSEE AND ALSO THE WRITTEN SUBMISSIONS OF THE ASSESSEE. IN THE REMAND REPORT ALSO, THE AO FA ILED TO GIVE CATEGORICAL FINDING WITH REGARD TO THE SOURCES OF FUNDS. IN FA CT, REMAND REPORT IS SILENT ON THE DIRECTION OF THE CIT(A) ON THIS ISSUE RELATI NG TO SOURCES OF DEPOSITS IN THE CAPITAL ACCOUNT. THEREFORE, ADJUDICATION OF TH IS ISSUE BY THE CIT(A) WITHOUT SEEKING FURTHER CLARIFICATION FROM THE AO O N THIS ISSUE OF ADDITION U/S.68 OF THE ACT IS PREMATURE. THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE ASKED FOR REMANDING THE ISSUE ONCE AGAIN TO THE FIL E OF CIT(A) FOR FRESH ADJUDICATION AFTER GETTING CLARIFICATIONS, IF ANY, FROM THE AO AND THE ASSESSEE. 16. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AO AND THE CIT(A) DUTIF ULLY. 17. ON HEARING BOTH THE PARTIES, WE FIND THERE IS C ONTRADICTION OF FACTS QUA THE CASH DEPOSITS/WITHDRAWALS OUT OF THE BANK A CCOUNTS. THE REMAND REPORT OF THE AO IS DEFICIENT TO THE EXTENT OF ABSE NCE OF CATEGORICAL CLARIFICATION ON THE SOURCES OF FUNDS THAT FOUND TH E WAY INTO THE CAPITAL ACCOUNT OF THE ASSESSEE. AS REQUESTED BY THE LD. C OUNSEL FOR THE ASSESSEE, IT IS NECESSARY FOR WANT OF FACTS THAT THIS ISSUE S HOULD BE REMANDED TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION. CIT(A) IS D IRECTED TO PERUSE THE CAPITAL 7 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 ACCOUNT OF THE ASSESSEE THOROUGHLY AND PERUSE BANK ACCOUNTS OF THE ASSESSEE QUA THE DEPOSITS OF THE CASH INTO THE ACCO UNT. CIT(A) SHALL DO FRESH ADJUDICATION ON THIS ISSUE AFTER GRANTING REA SONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. C.O. NO.21/PUN/2015 (BY ASSESSEE) : 19. WE NOW TAKE UP THE CROSS OBJECTIONS IN C.O. NO. 21/PUN/2015 FILED BY THE ASSESSEE. THE ASSESSEE FILED THE CROSS OBJE CTIONS TOUCHING ON THE ISSUE OF HEAD OF INCOME OF TAXING THE GAINS EARNED ON SALE OF SHARES. 20. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE SAID ISSUE HAS ALREADY BEEN ADJUDICATED BY THE TRIBUNAL IN FAV OUR OF THE ASSESSEE IN EARLIER ASSESSMENT YEARS. CIT(A) HEAVILY RELIED ON THE SAID ORDER OF THE TRIBUNAL WHILE GRANTING RELIEF TO THE ASSESSEE. TH US, THE CROSS OBJECTIONS ARE RAISED ONLY TO SUPPORT THE FINDINGS OF THE CIT( A). FURTHER, HE SUBMITTED THAT, IN CASE REVENUES APPEAL IS DISMISSED FOR ANY REASON, THERE IS NO NEED FOR ADJUDICATING THE CROSS OBJECTIONS RAISED BY THE ASSESSEE. 21. CONSIDERING THE RELIEF GRANTED BY US WHILE ADJU DICATING ITA NO.1212/PUN/2014 FILED BY THE REVENUE, ADJUDICATION OF THESE GROUNDS BECOME AN ACADEMIC EXERCISE AND HENCE THESE CROSS O BJECTIONS ARE DISMISSED AS ACADEMIC. 22. IN THE RESULT, THE CROSS OBJECTIONS FILED BY TH E ASSESSEE ARE DISMISSED. 8 ITA NOS.1212 & 333/PUN/2014 C.O. NO.21/PUN/2015 23. TO SUM UP, ITA NO.1212/PUN/2014 FILED BY THE RE VENUE AND THE CROSS OBJECTION NO.21/PUN/2015 FILED BY THE ASSESSE E ARE DISMISSED AND ITA NO.333/PUN/2014 FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; DATED : 30 TH JUNE, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// /ASSISTANT REGISTRAR , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - IT/TP, PUNE 4. THE CIT - IT/TP, PUNE 5 . DR, ITAT, A BENCH PUNE; 6 . / GUARD FILE.