Shri Piyushkumar Shankarbhai Chaudhary, Mehsana V. The Income tax Officer,Ward-2, Mehsana

CO 334/AHD/2010

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9342 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 13-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Keywords: Corroborative evidences
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO.2942/AHD/2010 A.Y. 2005-06 ITO, WARD-2 MEHSANA VS PIYUSH KUMAR SHANKARBHAI CHAUDHARY, C/O NEW SAVINAY TRANSPORT CO., HIGHWAY, MEHSANA. PAN: AEOPC 2574B (APPELLANT) (RESPONDENT) CO NO.334/AHD/2010 A.Y. 2005-06 PIYUSH KUMAR SHANKARBHAI CHAUDHARY, C/O NEW SAVINAY TRANSPORT CO., HIGHWAY, MEHSANA. PAN: AEOPC 2574B VS ITO, WARD-2 MEHSANA (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.C. MATHEWS, SR.D.R., ASSESSEE(S) BY : SHRI ANIL KSHATRIYA / DATE OF HEARING : 25/02/2014 / DATE OF PRONOUNCEMENT: 26/02/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AND THE CROS S OBJECTION HAS BEEN FILED BY THE ASSESSEE EMANATING FROM THE ORDER OF THE LD. CIT(APPEALS), GANDHINAGAR, DATED 26/08/2010 FOR A.Y . 2005-06. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BELOW: ITA NO.2942/AHD/2010 & CO NO.334/AHD/2010 ITO, WARD-2 MEHSANA VS. PIYUSH KUMAR SHANKARBHAI. FOR A.Y. 2005-06 - 2 - 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS IN DELETING THE ADDITION OF RS.15,72,000/- MADE ON ACCOUNT OF UNEXP LAINED DEPOSITS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. AN ASSESSMENT ORDER WAS MADE U/S.143(3) R.W.S 14 7 OF THE IT ACT, DATED 22.12.2009, WHEREIN THE AO RECEIVED AN INFORM ATION FROM CIB WINGS, IN RESPECT OF UTI BANK, STATED TO BE A JOINT ACCOUNT WITH THE BROTHER OF THE ASSESSEE, NAMELY, KAMLESH KUMAR CHAU DHARY, HAVING DEPOSIT TO THE TUNE OF RS.15,72,000/-. THE AO HAD M ENTIONED THAT AT THAT TIME THE ASSESSMENT OF SRI KAMLESH KUMAR CHAUDHARY WAS PENDING AND A SHOW CAUSE WAS ISSUED TO THE ASSESSEE AS TO WHY T HE SAID AMOUNT BE NOT TAXED ON PROTECTIVE BASIS. THE AO HAS ALSO NOTED AS UNDER: THE ABOVE CONTENTION OF THE ASSESSEE IS CONSIDERED HOWEVER, NOT FOUND TO BE ACCEPTABLE KEEPING IN VIEW THE FACTS AND CIRCUMSTAN CES OF THE CASE. AT THE OUTSET, THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION REGARDING THE DEPOSITS AND ALSO NOT FURNISHED ANY CORROBORATIVE EVIDENCES WHIC H CAN EXPLAIN THESE DEPOSITS. FURTHER, THE ARGUMENT OF THE ASSESSEE REG ARDING THE TRANSACTION CARRIED OUT BY HIS BROTHER SHRI KAMLESH CHAUDHARY I S QUITE ACCEPTABLE AT THIS STAGE, HOWEVER, IT IS ALSO SIGNIFICANT AT THIS POIN T OF TIME THAT SHRI KAMLESH CHAUDHARY IS ASSESSED WITH ITO, WARD-1, MEHSANA AND THE ASSESSMENT OF HIS INCOME FOR THE RELEVANT PERIOD IS YET TO BE DONE. I N VIEW OF THIS FACT, IT IS ESSENTIAL TO ADD THESE DEPOSITS IN THE CASE OF ASSE SSEE ON PROTECTIVE BASIS. ACCORDINGLY, AN AMOUNT OF RS.15,72,000/- IS HEREBY ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON PROTECTIVE BASIS TREATING THE S AME AS UN-EXPLAINED. PENALTY PROCEEDINGS U/S. 271(1)(C) OF IT ACT ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHICH LEADS TO CONCEALMENT OF HIS INCOME. 2.1 THEREUPON AN ADDITION OF RS.15,72,000/- WAS MAD E IN THE HANDS OF THE ASSESSEE WHICH WAS CHALLENGED BEFORE LEARNED CI T(A). 3. WHILE DELETING THE ADDITION, LEARNED CIT(A) HAD GIVEN CERTAIN FINDINGS SUCH AS THAT THE SAID BANK ACCOUNT WAS OWN ED BY THE ELDER BROTHER OF THE ASSESSEE. HE HAS ALSO MENTIONED THAT THE TRANSACTION OF THE SAID BANK HAD DULY BEEN REFLECTED IN THE RETURN OF INCOME BY THE ITA NO.2942/AHD/2010 & CO NO.334/AHD/2010 ITO, WARD-2 MEHSANA VS. PIYUSH KUMAR SHANKARBHAI. FOR A.Y. 2005-06 - 3 - ASSESSEES BROTHER. ON THAT BASIS, THE IMPUGNED PRO TECTIVE ASSESSMENT WAS QUASHED IN THE FOLLOWING MANNER: I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPEL LANT AS WELL AS THE ASSESSMENT ORDER. IT IS SEEN THAT APPELLANT HAD OPE NED A JOINT ACCOUNT WITH HIS ELDER BROTHER SHRI KAMLESH CHAUDHARY IN UTI BANK. T HE SAID ACCOUNT WAS ALREADY REFLECTED IN THE RETURN OF INCOME KAMLESH CHAUDHARY FILED ON 29/12/2006 I.E. WELL BEFORE THE FIRST NOTICE U/S. 1 42(1) ISSUED BY THE A.O. ON 13/11/2007 TO THE ASSESSEE. THE APPELLANT HAD SPECI FICALLY INTIMATED TO THE A.O. THAT HIS ELDER BROTHER SHRI KAMLESH CHAUDHRARY IS ASSESSED WITH ITO, WD.-1, MEHSANA. SHRI KAMLESH CHAUDHARY ALSO FILED C ONFIRMATION TO THE EFFECT THAT BANK TRANSACTIONS IN THE SAID BANK ACCO UNT WITH UTL BANK ARE ALREADY REFLECTED IN HIS RETURN OF INCOME AND HE OW NED ALL THE TRANSACTIONS AND HE HAD ONLY OPERATED THIS ACCOUNT. THE CLOSING BALANCE AS ON 31/3/2005 IN THE BANK ACCOUNT IS DULY REFLECTED IN CURRENT AS SETS IN THE BALANCE SHEET OF SHRI KAMLESH CHAUDHARY. MOREOVER, SHRI KAMLESH CHAU DHARY WAS THE FIRST ACCOUNT HOLDER OF THE SAID ACCOUNT. IN ABOVE CIRCUM STANCES, IT IS VERY CLEAR THAT ASSESSEE'S ELDER BROTHER SHRI-KAMLESH CHAUDHAR Y HAS OWNED THE BANK ACCOUNT AND HAS CONFIRMED THE SAME WHICH HAS NOT BE EN DOUBTED BY THE A.O. THE A.O.'S ONLY REASON FOR MAKING ADDITION IS THAT ASSESSMENT IN THE CASE OF SHRI KAMLESH CHAUDHARY IS PENDING AND SO HE IS MAKI NG THE ADDITION ON PROTECTIVE BASIS. THE SAID REASONING IS NOT AS PER LAW BECAUSE PROTECTIVE ASSESSMENT IS MADE ONLY WHEN THERE IS REASON TO BEL IEVE THAT THE INCOME UNDER DISPUTE MAY BE BELONGING EITHER OF TWO PERSONS, THE N ONLY ADDITION IS MADE ON PROTECTIVE BASIS IN ONE OF THE CASE. IN THIS PARTIC ULAR CASE, ASSESSEE'S ELDER BROTHER HAS OWNED THE ACCOUNT AND STATED THAT HE HA S OPERATED THIS ACCOUNT. THIS FACT IS NOT DISPUTED BY BOTH OF ACCOUNT HOLDER S. MOREOVER, SHRI KAMLESH CHAUDHARY HAD FILED THE RETURN OF INCOME WELL BEFOR E THE FIRST NOTICE WAS ISSUED TO THE ASSESSEE ON 13/11/2007 BASED ON THE A IR INFORMATION ABOUT THE SAID BANK ACCOUNT. THE SAID TRANSACTIONS HAS BEEN C LAIMED TO HAVE BEEN REFLECTED IN THE RETURN OF SHRI KAMLESH CHAUDHARY. IN ABOVE CIRCUMSTANCES, THERE IS NO REASON TO MAKE PROTECTIVE ASSESSMENT IN THE CASE OF ASSESSEE AS DUE EXPLANATION WAS GIVEN BY HIM TO THE A.O. ABOUT THE ACTUAL FACTS OF THE CASE WHICH WAS SUPPORTED BY EVIDENCES. ACCORDINGLY, THE ADDITION OF RS.15,72,000/- MADE IN THE ASSESSEES CASE IS DEL ETED. HOWEVER, THE AO IS AT LIBERTY TO ACT AS PER LAW IN THE CASE OF ASSESSEES BROTHER SHRI KAMLESH CHAUDHARYS CASE WHO HAS OWNED THE ACCOUNT. 4. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BOTH T HE SIDES. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R. MR. K.C. M ATHEWS HAS SUPPORTED THE ORDER OF THE AO, ON THE OTHER HAND FR OM THE SIDE OF THE APPELLANT, LEARNED AR, MR. ANIL KSHATRIYA HAS SUPPO RTED THE ORDER OF LEARNED CIT(A). LEARNED AR HAS INFORMED THAT ON 19 TH OF JANUARY, 2010 A ITA NO.2942/AHD/2010 & CO NO.334/AHD/2010 ITO, WARD-2 MEHSANA VS. PIYUSH KUMAR SHANKARBHAI. FOR A.Y. 2005-06 - 4 - NOTICE WAS ISSUED BY ITO WARD-1, MEHSANA TO THE ELD ER BROTHER OF THE ASSESSEE, VIZ., KAMLESH KUMAR CHAUDHARY ALONG WITH REASONS RECORDED AS WELL AS A NOTICE U/S. 148 OF IT ACT IN RESPECT O F TRANSACTION OF RS.15,72,000/- APPEARED IN UTI BANK LTD. ALSO DATED 19 TH OF JANUARY, 2010. THEREAFTER, AN ASSESSMENT WAS MADE U/S.143(3) R.W.S. 147 OF IT ACT, DATED 12.11.2010 ACCORDING TO WHICH THE RETURN ED INCOME OF SRI KAMLESH KUMAR CHAUDHARY WAS ACCEPTED. LEARNED AR HA S, THEREFORE, PLEADED THAT ALTHOUGH THE REASONING FOR REOPENING W AS VERY MUCH IN THE NOTICE OF THE INCOME TAX OFFICER BUT AFTER CONSIDER ING THE EXPLANATION AND THE RETURN OF INCOME FILED BY THE BROTHER, THE CONCERNED ITO HAD CHOSEN TO ACCEPT THE RETURNED INCOME. LEARNED AR HA S THEN CONCLUDED THAT ONCE THERE WAS NO SUBSTANTIVE ADDITION OF IMPU GNED AMOUNT THEN THERE OUGHT NOT TO BE ANY QUESTION OF PROTECTIVE AS SESSMENT IN THE HANDS OF THE ASSESSEE. 4.1 CONSIDERING THE TOTALITY OF THE FACTS AND CIRCU MSTANCES OF THE CASE AND THE EXPLANATION OFFERED BEFORE US, WE ARE OF TH E CONSIDERED OPINION THAT THE REVENUE DEPARTMENT HAS EXAMINED THE EVIDEN CES IN RESPECT OF SRI KAMLESH KUMAR CHAUDHARY AND THEREUPON FOUND THE M CORRECT; HENCE, MADE NO ADDITION IN RESPECT OF IMPUGNED AMOU NT. DUE TO THE SAID REASON, WHILE DECIDING THE APPEAL OF THE ASSESSEE, LEARNED CIT(A) HAS ALSO NOTED ALL OF THOSE EVIDENCES AND HELD THAT THE SAID TRANSACTION BEING REFLECTED IN THE RETURN OF SRI KAMLESH KUMAR CHAUDH ARY AND THAT RETURN WAS ACCEPTED BY THE REVENUE DEPARTMENT; HENCE, THE ASSESSMENT OF THE IMPUGNED AMOUNT PROTECTIVELY IN THE HANDS OF THE AS SESSEE DID NOT SURVIVE. WE HEREBY CONFIRM THE FINDINGS OF THE FIRS T APPELLATE AUTHORITY AND DISMISS THIS GROUND OF THE REVENUE. ITA NO.2942/AHD/2010 & CO NO.334/AHD/2010 ITO, WARD-2 MEHSANA VS. PIYUSH KUMAR SHANKARBHAI. FOR A.Y. 2005-06 - 5 - 5. AS FAR AS THE CO OF THE ASSESSEE IS CONCERNED, T HE GROUND RAISED IS AS UNDER: THE LD. CIT(A) HAS FAILED TO APPRECIATE SUBMISSION DATED 18.08.2010 FILED BEFORE HIM DURING THE COURSE OF APPELLATE PROCEEDIN GS WHEREBY, IN THE OPENING PARAGRAPH 3 UNDER THE HEAD REGARDING ORDER BEING BAD IN LAW AND WITHOUT VALID JURISDICTIONS , ELABORATE SUBMISSIONS WERE MADE AND THE SAME HAS NOT BEEN ADJUDICATED AS STATED IN GROUND NO.1 A BOVE. 6. LEARNED AR, MR. ANIL KSHATRIYA HAS MADE A STATEM ENT AT BAR THAT THE LEGAL ISSUE RAISED BY THE ASSESSEE AS A CROSS O BJECTOR DOES NOT SURVIVE ANY MORE AND NO PREJUDICE SHALL BE CAUSED, IF THE S AME IS NOT PRESSED. 7. IN VIEW OF ABOVE SUBMISSION OF THE LEARNED AR, T HE CROSS OBJECTION OF THE ASSESSEE IS HEREBY DISMISSED AS NO T PRESSED. 8. IN THE RESULT, THE REVENUES APPEAL & ASSESSEES CROSS OBJECTION ARE HEREBY DISMISSED. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 26/02/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD