The ITO, Ward-2, GANDHIDHAM V. L/H of late Shri Sanjay Omnarayan Shrivastav, GANDHIDHAM

ITA 1026/RJT/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0092 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND N SONTAKKE
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] IT O , WARD - 2 , GANDHIDHAM (APPELLANT) VS L/H OF LATE SANJEEV OMNARAYAN SHRIVASTAV, SHOP 6 - C, PLOT NO. 113/114, SECTOR - 8, GREEN PARK, GA NDHIDHAM - KUTCH P AN: AFHPS 5868 Q (RESPONDENT) REVENUE BY : S H RI ARVIND N. SONTAKKE , SR. D . R. ASSESSEE BY: S H RI VIMAL DESAI , A.R. DATE OF HEARING : 20 - 10 - 2 016 DATE OF PRONOUNCEMENT : 23 - 11 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE TWO REVENUE S APPEAL S FOR A.Y. 2006 - 07 , AR ISE FROM ORDER OF THE CIT(A) - II, RAJKOT DATED 2 6 - 02 - 2010 IN APPEAL NO S . CIT(A) - I T A NO S . 1025 & 1026 / RJT /20 10 A SSESSMENT YEAR 200 6 - 07 I.T.A NO S . 1025 &1026/AHD/2010 A.Y. 2006 - 07 PAG E NO IT O VS. L/H OF LATE SANJEEV OMNARAYAN SHRIVASTAV 2 II / 0050 & 0051 /09 - 10, IN PROCEEDINGS UNDER SECTION 144 & 271(1)(C) OF T HE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUND OF APPEAL: - THE LD. C.I.T(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION TO RS. 3,70,000/ - OUT OF ADDITION MADE OF RS. 41,05,683/ - BEING CASH CREDIT U/S . 68 OF THE ACT. 3 . IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 15 , 310/ - WAS FILED ON 27 TH DECEMBER, 2006. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A SSESS EE FAILED TO MAKE COMPLIANCE BY NOT ATTENDING THE PROCEEDINGS IN SPITE OF PROVIDING A NUMBER OF OPPORTUNITIES BY THE ASSESSING OFFICER, CONSEQUENTLY, THE ASSESSING OFFICER MADE ASSESSMENT U/S 144 OF THE ACT AS EX - PARTE. THE A SSESSING O FFICER HAS DETERMINED THE TOTAL INCOME AT RS. 43,52,250 CONSISTING OF ADDITION U/S. 68 OF RS. 41 , 05 , 68 3/ - AND ESTIMATED NET PROFIT OF RS. 3 , 50 , 916/ - RESPECTIVELY. AGGRIEVED AGAINST THE ORDER OF ASSESSING OFFICER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX(A). THE LD. COMMISSIONER OF INCOME TAX(A) GRANTED RELIEF FROM ADDITIO N MADE ON ACCOUNT OF NET PROFIT TO THE AMOUNT OF RS. 12 , 496/ - AND DETERMINED THE NET PROFIT AT RS. 3 , 38 , 420/ - AGAINST RS. 3 , 76 , 946/ - DETERMINED BY THE A SSESSING O FFICER. REGARDING THE OTHER ADDITIONS MADE U/S. 68 BY THE A SSESSING O FFICER, THE LD. COMMISSI ONER OF INCOME TAX(A) HAS CONFIRMED THE ADDITION TO THE EXTENT OF R S . 3,70,000/ - ONLY AND ASSESSEE IS IN APPEAL AGAINST THIS IMPUGNED DECISION OF THE LD.CIT(A). THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX(A) IS REPRODUCED AS UNDER: - I.T.A NO S . 1025 &1026/AHD/2010 A.Y. 2006 - 07 PAG E NO IT O VS. L/H OF LATE SANJEEV OMNARAYAN SHRIVASTAV 3 THE SOURCE OF CREDITS DATED 20/6/2005, 23/6/2005, 23/7/2005, AND 22/8/2005 OF RS.1,00,000/ - ; RS.50,000/ - ; RS.2,00,000/ - ; AND RS.20,000/ - , RESPECTIVELY, WAS EXPLAINED TO BE WITHDRAWALS MADE FROM AN ANOTHER PROPRIETARY CONCERN ON DATES, VIZ. 25/5/2005, 25/5/2005, 2/7/2 005, AND 23/7/2005, RESPECTIVELY. THE GAP BETWEEN THE WITHDRAWALS AND THESE DEPOSITS WAS SUBSTANTIAL. NO EVIDENCE WAS ON RECORD TO CONNECT THESE TWO EVENTS CONCLUSIVELY. WHO WOULD KEEP THE SUBSTANTIAL AMOUNT IN HAND AFTER WITHDRAWAL, WITHOUT UTILIZING IT F OR ABOUT A MONTH AND DEPOSIT THE SAME IN OTHER PROPRIETARY CONCERN ? NOT ACCEPTABLE. THEREFORE, I CONFIRM A SUM OF RS.3,70,000/ - OUT OF ADDITION OF RS.10,45,000/ - MADE U/S.68. 4 . D URING THE COURSE OF APPELLATE PROCEEDINGS, THE LEARNED COUNSEL STATED THAT THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN SUSTAIN ING TH E ADDITION TO THE EXTENT OF RS.3,70,000 IN SPITE OF THE FACT THAT THE SUPPORTING DETAILS WAS PROVIDED BY THE ASSESSEE. ON THE OTHER HAND, LD. D.R. RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME TAX( A ). 5 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE FIND THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH CREDIT OF RS. 3,70,000/ - MAINLY FROM THE WITHDRAWAL MADE FROM OTHER PROPRIETARY CONCERNS OF THE ASSE SSEE. THE LD. COMMISSIONER OF INCOME TAX(A) HAS REJECTED THE EXPLANATION OF THE ASSESSEE STATING THAT THERE IS A SUBSTANTIAL GAP BETWEEN THE WITHDRAWAL AND DEPOSITS . WE HAVE OBSERVED THAT T HE SOURCE OF CREDITS ARE DATED 20/6/2005, 23/6/2005, 23/7/2005, AND 22/8/2005 OF RS.1,00,000/ - ;RS.50,000/ - ;RS.2,00,000/ - ANDRS.20,000/ - , RESPECTIVELY, AGAINST WHICH THE WITHDRAWALS MADE FROM AN ANOTHER PROPRIETARY CONCERN ON DATES, VIZ. 25/5/2005, 25/5/2005, 2/7/2005, AND I.T.A NO S . 1025 &1026/AHD/2010 A.Y. 2006 - 07 PAG E NO IT O VS. L/H OF LATE SANJEEV OMNARAYAN SHRIVASTAV 4 23/7/2005, RESPECTIVELY . WE FIND FROM THE ABOVE SUPPORTING DETAIL THAT MOST OF THE DEPOSITS ARE MADE WITHIN ONE MONTH O F WITHDRAW A LS. IT IS STATED IN THE O R DER OF THE LD.CIT(A) THAT ASSESS EE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT AND THE CASH BOOK WAS SHOWING COMPLETE FLOW OF FUND EXPLAINING SOURCE OF THE CREDITS. THE ASSESSEE HAS INTRODUCED THE CAPITAL BY MAKING WITHDRAWALS FROM CAPITAL BALANCES OF OTHER CONCERNS. THE RESPECTIVE CAPITAL ACCOUNTS DULY REFLECTED THE WITHDRAWALS AS PARTICULAR CAPITAL WAS SHOWN AS CREDITS.THE LD C I T (A) HAS ON ASSUMPT ION BASIS HELD THAT T HE GAP BETWEEN THE WITHDRAWALS AND THESE DEPOSITS WAS SUBSTANTIAL . WE FIND THAT THE LD CIT(A) HAS NOT PROVED THAT THE SUBMISSION AND THE EXPLANATION OF THE ASSESSEE IS INCORRECT. IN VIEW OF THESE FACTS AND FINDINGS, WE ARE NOT INCLINE D T O UPHOLD THE ADDITION SUSTAINED BY THE LD. CIT(A). 6 . THE OTHER GROUND OF APPEAL OF THE REVENUE VIDE IT A NO.1026/RJT/ DATED 2010 REGARDING CONFIRMING OF PENALTY U/S 271(1)(C) OF THE ACT BY THE LD.CIT(A) IS DISMISSED ON ACCOUNT OF NOT SUSTAINING THE I MPUGNED QUANTUM ADDITION AS MENTIONED SUPRA IN THIS ORDER. 7. IN THE RESULT, BOTH THE APPEAL S OF THE REVENUE ARE DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OUR T ON 23 - 11 - 201 6 SD/ - SD/ - (RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 23 /11 /2016 I.T.A NO S . 1025 &1026/AHD/2010 A.Y. 2006 - 07 PAG E NO IT O VS. L/H OF LATE SANJEEV OMNARAYAN SHRIVASTAV 5 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT