Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 4678 (ITAT-PATNA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-07-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2012-2013
Appeal Filed On
04-01-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH , PATNA BEFORE SHRI CHANDRA MOHAN GARG, J M AND SHRI L .P. SAHU, AM ITA NO. 05 & 06 / PAT /20 1 9 ( ASSESSMENT YEAR S : 2012 - 2013 & 2013 - 2014 ) JAY PRAKASH GUPTA, S/O LATE BADAN SINGH, CHARGARWA, RAM NAGAR, WEST CHAMPA RAN - 845106 VS. ITO, WARD - BETTIAH, BIHAR PAN NO. : A EFPG 9742 L ( APPELLANT ) .. ( RESPONDENT ) AS SESSEE BY : SHRI G.P.TULSIYAN , A R REVENUE BY : SHRI ABHAY KUMAR , SR. DR DATE OF HEARING : 28 /06/2019 DATE OF PRONOUNCEMENT : 26 /07/2019 O R D E R PER BENCH : TH ESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), JAMSHEDPUR, BOTH DATED 25.09.2018 FOR THE ASSESSMENT YEAR S 201 2 - 2013 & 2013 - 2014 . 2. IN BOTH THE APPEALS, EXCEPT DIFFERENCE IN FIGURES, THE COMMON GROUND S RAISED B Y THE ASSESSEE ARE AS UNDER : - 1. FOR THAT THE ORDER OF THE A.O. PASSED IN THE ABOVE CASE IS BAD AND HOT BASED ON THE MERITS OF THE CASE. 2. FOR THAT THE ORDER OF LEARNED C.I.T. - (A), JAMSHEDPUR PASSED IN THE ABOVE CASE IS BAD AND NOT BASED ON THE MERI TS OF THE CASE. 3. FOR THAT THE ASSESSEE HAD ADMITTED BEFORE THE A.O. AS WELL AS CIT(A) THAT HE WAS RUNNING A BRICK' KILN UNIT AND WAS NOT A LIQUOR DEALER. HE FURTHER ACTED AS A REPRESENTATIVE OF THE ACTUAL LIQUOR DEALERS AND EARNED COMMISSION FROM THEM . THE ASSESSEE HAD SHOWN HIS INCOME FROM BRICK KILN BUSINESS AND FILED A RETURN IN ITR - 4 SHOWING BUSINESS INCOME AT RS. 58,920/ - AND RS. 2,40,189/ - AS SALARY/COMMISSION FROM LIQUOR DEALERS. FURTHER HE DEPOSITED THE CASH SUPPLIED BY THE LIQUOR VENDORS IN HI S BANK ACCOUNT AND ISSUED RTGS/DD IN FAVOR OF LIQUOR SUPPLIERS ON BEHALF OF LIQUOR VENDORS. THEREFORE TREATING THE CASH DEPOSITS IN HIS BANK ACCOUNT AMOUNTING TO RS. 2,10,06,880/ - AS HIS TURNOVER FROM LIQUOR BUSINESS AND - ITA NO S . 5&6 / PAT /201 9 2 ASSESSING THE INCOME THEREFORE @ 8% IS ARBITRARY AND THEREFORE, THE ADDITION OF RS. 14,46,689/ - ( 19,46,689 - 5,00,000) BEING PROFIT FROM LIQUOR BUSINESS SHOULD BE DELETED . 4. THE A.O. HAS GROSSLY ERRED IN NOT ALLOWING THE DEDUCTION OF RS. 2,34,191/ - OF THE INCOME ALREADY DECLARED IN ITR - 4 FROM THE SO CALLED ASSESSED INCOME OF RS. 21,80,880/ - AND THEREFORE THE ORDER ITSELF IS DEFECTIVE AND NEEDS TO BE QUASHED. 5. THE ASSESSEE DOES NOT HOLD ANY LIQUOR LICENSE FROM THE GOVERNMENT OF BIHAR TO ENABLE HIM TO T RADE IN LIQUOR, THEREFORE, THE ALLE GATION OF THE A.O. OF BEING LIQUOR DEALER IS NOT TENABLE. 6. AS ESTABLISHED, THE ASSESSEE WAS NOT A LIQUOR DEALER; HE DID NOT REQUIRE ANY MONEY TO RUN THIS SO CALLED BUSINESS. THE MODUS OPERANDI BEING CASH WAS HANDED BY THE ACTUAL LIQUOR DEALERS TO THE' ASSESSEE WHO IN TURN DEPOSITED THIS CASH INTO HIS SAVING ACCOUNTS AND PURCHASED DD/RTGS IN FAVOR OF LIQUOR SUPPLIERS ON BEHALF OF VENDORS AS INTERMEDIARY AND IN THIS PROCESS EARNED SOME COMMISSION. THEREAFTER, THE ADDITION OF RS. 5,00,000/ - BY A.O. BEING CAPITAL REQUIRED TO RUN THE SO CALLED BUSINESS IS TOTALLY ARBITRARY AND BASELESS AND REQUESTED TO BE DELETED. FURTHER GROUNDS, SUBMISSIONS PAPERS AND ARGUMENTS SHALL BE URGED AT THE TIME OF THE HEARING OF THE CASE. 3 . BRIEF FACTS OF THE CASE ARE THAT TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF RETAIL TRADER OF LIQUOR AND DERIVES INCOME FROM SALE OF LIQUOR. THE ASSESSEE FILED ITS RETURN OF INCOME ELECTRONICALLY ON 31.08.2013 DECLARING TOTAL INCOME AT RS.2,34,191/ - . THE CASE WAS SELECTED FOR SCRUTINY U/S.14 7 OF THE ACT ON THE BASIS OF CASH DEPOSIT IN HIS BANK ACCOUNT AT RS.2,10,06,880/ - DURING THE FINANCIAL YEAR 2011 - 2012. CONSEQUENTLY, STATUTORY NOTICES U/S.148 OF THE ACT WAS ISSUED FOR COMPLIANCE ON 09.07.2015 . ACCORDINGLY, THE ASSESSEE REPLIED THE ABOVE N OTICE AND APPEARED BEFORE THE AO FROM TIME TO TIME. FINALLY, ON THE BASIS OF CIB/AIR INFORMATION CONSIDERING THE CASH DEPOSITS IN BANK ACCOUNTS, THE A.O. ESTIMATED THE T.O. AS RS. 2,10,06,880/ - AND ESTIMATED 8% PROFIT ITA NO S . 5&6 / PAT /201 9 3 ASSESSING TOTAL INCOME AT 16,80,550/ - AND A SUM OF RS. 5,00,000/ - BEING CAPITAL EMPLOYED IN THE BUSINESS AND MADE AN ASSESSMENT AT RS. 21,80,880/ - , RAISING A DEMAND OF RS. 6,70,460/ - . 4 . FEELING AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE APPEALED BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSID ERING THE SUBMISSIONS OF AO AND FINDINGS OF CIT(A) UPHELD THE ACTION OF AO. AGAINST WHICH, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 5 . BEFORE US, LD. AR SUBMITTED THAT THE ASSESSEE HAD ADMITTED BEFORE THE AUTHORITIES BELO W THAT HE WAS RUNNING A BRICK KILN UNIT AND WAS NOT A LIQUOR DEALER. HE FURTHER ACTED AS A REPRESENTATIVE OF THE ACTUAL LIQUOR DEALERS AND EARNED COMMISSION FROM THEM. THE ASSESSEE HAD SHOWN HIS INCOME FROM BRICK KILN BUSINESS AND FILED A RETURN IN ITR - 4 S HOWING BUSINESS INCOME AT RS. 58,920/ - AND RS. 2,40,189/ - AS SALARY/COMMISSION FROM LIQUOR DEALERS. FURTHER THE LD.AR SUBMITTED THAT THE ASSESSEE DEPOSITED THE CASH SUPPLIED BY THE LIQUOR VENDORS IN HIS BANK ACCOUNT AND ISSUED RTGS/DD IN FAVOR OF LIQUOR SU PPLIERS ON BEHALF OF LIQUOR VENDORS. THEREFORE TREATING THE CASH DEPOSITS IN HI S BANK ACCOUNT AMOUNTING TO RS. 2,10,06,880/ - AS HIS TURNOVER FROM LIQUOR BUSINESS AND ESTIMATING THE INCOME OF THE ASSESSEE @ 8% OF THE TOTAL TURNOVER IS UNJUSTIFIED AND THEREFOR E , THE SAME MAY KINDLY BE DELETED . LD. AR FURTHER SUBMITTED THAT THE ADDITION OF RS.5,00,000/ - ALSO MAY KINDLY BE DELETED . IT WAS ALSO THE CONTENTION OF LD. AR THAT DUE TO COMPLETE IGNORAN CE ABOUT THE DATES OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT APPEAR BEFORE THE AO, RESULTING INTO FRAMING OF ASSESSMENT U/S.144 OF THE ACT. THE SAME FACT ITA NO S . 5&6 / PAT /201 9 4 WAS ALSO SUBMITTED BEFORE THE CIT(A), HOWEVER, THE CIT(A) HAS NOT TAKEN INTO CONSIDERATION TO THE OBJECTION OF THE ASSESSEE FOR PASSING OF EX - PARTE ASSESSMENT ORDER U/S.144 OF THE ACT FOR WHICH THE ASSESSEE IS DEPRIVED OF OPPORTUNITY. 6 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT . LD. DR ALSO SUBMITTED THAT THE ASSESSE E COULD NOT SUBSTANTIATE HIS CLAIM WITH REGARD TO DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE INCLUDED HIS RECEIPTS/TURNOVER FROM BRICK - KILN BUSINESS. ACCORDINGLY, THE LD. DR SUBMITTED THAT BOTH THE AUTHORITIES BELOW HAVE PASSED JUST AND PROPER ORDER, THE REFORE, BOTH THE APPEAL S OF THE ASSESSEE DESERVE TO BE DISMISSED. 7 . AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD , WE FIND THAT THE AO HAS COMPLETED THE ASSESSM ENT EX - PARTE U/S.144 OF THE ACT. LD. AR BEFORE US SUBMITTED THAT F OR THE EX - PARTE ASSESSMENT FRAMED BY THE AO, THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE IS FULLY DEPRIVED FROM THE OPPORTUNITY TO APPEAR IN HIS CASE DUE TO NON - INFORMATION REGARDING THE DATES ISSUED TO THE ASSESSEE AS MENTIONED IN TH E ASSESSMENT ORDER. LD. AR ALSO SUBMITTED THAT THE ASSESSEE HAS FULL EVIDENCE REGARDING CASH DEPOSITS IN HIS SAVINGS BANK ACCOUNT BECAUSE HE HAS FULLY MAINTAINED HIS BOOKS OF ACCOUNT. LD. AR PRAYED BEFORE US THAT THE ASSESSEE MAY KINDLY BE PROVIDED ONE MO RE OPPORTUNITY TO SUBSTANTIATE ITS CLAIM BEFORE THE AO AS THE ASSESSEE FULL EVIDENCE WITH REGARD TO CASH DEPOSITS. LD. DR HAS ALSO NO OBJECTION IF THE ITA NO S . 5&6 / PAT /201 9 5 APPEAL S OF THE ASSESSEE ARE RESTORED TO THE FILE OF AO. CONSIDERING THE SUBMISSION OF THE ASSESSEE AND IN THE INTEREST OF RENDERING SUBSTANTIAL JUSTICE, AND ALSO THE FACT THAT THE ASSESSEE WAS PREVENTED OPPORTUNITY OF HEARING BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS , WE RESTORE THE ISSUES RAISED BY THE ASSESSEE IN BOTH THE APPEALS FOR BOTH THE ASSESSME NT YEARS UNDER CONSIDERATION TO THE FILE OF AO FOR DE NOVO ASSESSMENT AFTER PROVIDING SUFFICIENT OPPORTUNITIES OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO IN DE NOVO ASSESSMENT PROCEEDINGS WITH PROPER EVIDENCE TO SUB STANTIATE ITS CLAIM. 8 . IN THE RESULT, BOTH APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34/4 OF ITAT RULES, 1963 BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 26 /07/2019 AT PATNA. SD/ - ( C.M.GARG ) SD/ - ( L.P.SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER PATNA ; DATED 26 / 0 7 /201 9 PKM , S R.P.S. COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) INCOME TAX APPELLATE TRIBUNAL , PATNA 1. THE APPELLANT - 2. THE RESPONDENT - 3. THE CIT(A), 4. CIT 5. DR, ITAT, PATNA 6. GUARD FILE. //TRUE COPY//
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