Syed Abubaker Riyaz, Belagavi., Belgaum V. The Principal Commissioner of Income Tax, Belgaum., Belgaum

ITA 103/PAN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2028 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK G MU DNUR
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 103 /P A N/201 6 (ASST. YEAR : 20 11 - 1 2 ) SYED ABUBACKER RIYAZ, C/O M/S. S.M. STEELS, PATIL GALLI, BELAGAVI. VS. P CIT, BELAGAVI. PAN NO. AAP P R 3107 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK G. MUDNUR C A DEPARTMENT BY : SHRI R.N. SIDDAPPAJI - D R DATE OF HEARING : 28 / 0 7 /201 6 . DATE OF PRONOUNCEMENT : 28 / 0 7 /201 6 . O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX , BEL A GA VI , DATED 29 /0 3 /201 6 . 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT PRINCIPAL COMMISSIONER OF INCOME TAX, BELAGAVI ERRED IN INVOKING SECTION 263 OF THE ACT AGAINST THE ORDER PASSED BY THE JCIT UNDER SECTION 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2011 - 12 . 3 . WE H AVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INS TANT CASE, THE PRINCIPAL COMMISSIONER OF INCOME TAX FOUND THAT IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH UNION BANK OF INDIA, MAPUSA BRANCH, GOA BEARING ACCOUNT NO. 370102010200577 AND SAVINGS BANK ACCOUNT NO. 18291 MAINTAINED WITH AMANATH BANK LTD. , FORT ROAD, BELGAUM , THE ASSESSEE HAD MADE CASH DEPOSITS OF 85,30,546/ - . THE 2 ITA NO. 103/PAN/2016 ASSESSING OFFICER ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT IT WAS CARRYING ON SOME RETA I L TRADE THROUGH THE BANK ACCOUNTS , MADE ADDITION OF PEAK DEPOSITS OF 19,10,810/ - . ACCORDING TO THE PRINCIPAL COMMISSIONER OF INCOME TAX, THE ASSESSING OFFICER DID NOT EXAMINE WHETHER THE ASSESSEE CARRIED OUT RETAIL ACTIVITY AND WHETHER THE SUBMISSION OF THE ASSESSEE WAS CORRECT OR NOT. FURTHER, HE ALSO OBSERVED THAT THE ASSESSING OF FICER FAILED TO APPLY HIS MIND IN RESPECT OF APPLICATION OF SECTION 40A(3), 44AB ETC. THEREFORE, HE HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER I S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY, SET ASIDE THE MATTE R TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH ON MERITS AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 4 . BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE MADE THE SAME SUBMISSIONS AS WERE MADE BEFORE THE PRINCIPAL COMMISSIONER OF INCOME TAX AND ASSESSING OFFICER TH A T THE DEPOSITS IN THE BANK ACCOUNT RELATES TO RETAIL STEEL TRADING CARRIED ON BY THE ASSESSEE. WHEN ASKED BY THE BENCH TO PROVE D THE EVIDENCE FOR THE SAME, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE EX PRESSED HIS INABILITY TO DO SO. IN ABSENCE OF ANY EVIDENCE FILED B E FORE US BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE TO SHOW THAT IT WAS CARRYING ON RETA I L TRADING BUSINESS IN STEEL AND THE DEPOSIT IN BANK ACCOUNT REFLECTS, THE SALE PROCEEDS FROM T HIS TRADING BUSINESS, WE FIND NO INFIRMITY IN THE ORDER O F THE PRINCIPAL COMMISSIONER OF INCOME TAX ON THIS COUNT AND THE SAME IS CONFIRMED . WE WOULD LIKE TO STATE HERE THAT SIMILAR ISSUE HAD COME UP FOR CONSIDERING BEFORE THIS BENCH IN ASSESS EES OWN CASE IN ITA NO. 165/PNJ/2015 IN THE ASSESSMENT YEAR 2010 - 11 AND THE TRIBUNAL VIDE ITS ORDER DATED 05/08/2015, CONFIRMED THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX IN ASSESSING CASH DEPOSITS MADE IN BANK ACCOUNT OF 58,75,690/ - WHILE NO T ACCEPTING THE CLAIM OF THE ASSESSEE THAT THE DEPOSITS RELATED TO SALE PROCEEDS OF THE ASSESSEE FROM RETAIL BUSINESS IN STEEL, THEREFORE, THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX IS CONFIRMED FOR THIS REASON ALSO. 3 ITA NO. 103/PAN/2016 5. FURTHER, THE PRINCIPAL COMMISSIONER OF INCOME TAX OBSERVED THAT THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED 30 LAC FROM NRI BROTHER SHRI MOHAMMED ILYAS SYED AND THAT THE ASSESSING OFFICER ACCEPTED HIS CLAIM ONLY ON THE EVIDENCE OF BANK ACCOUNT OF THE CREDI TOR. THE PRINCIPAL COMMISSIONER OF INCOME TAX OBSERVED THAT FROM PERUSAL OF THE SAME, IT IS NOTICED THAT SIX CHEQUES OF 5 LAC EACH WERE ISSUED AND ALL OF THEM HAVE BEEN DEBITED IN HIS ACCOUNT ON 15/09 / 2010 . THE PRINCIPAL COMMISSIONER OF INCOME TAX OBSERVED THAT IT WAS STRANGE THAT THE NAME OF S.M. STEELS APPEARS AS THE BENEFICIARY IN RESPECT OF THESE TRANSACTIONS. HE OBSERVED TH A T WHEN THE BORROWER IS M/S. S.M. STEELS IN WHICH THE ASSESSEE IS PARTNER AND NOT THE ASSESSEE HIMSELF WHO CLAIMED TO HAVE TAKEN THIS LOAN FOR HOUSE CONSTRUCTION , T HE ASSESSING OFFICER HAS NOT EXAMINED THIS ASPECT OF THE MATTER. FURTHER, BEFORE THE LOANS WERE DEBITED , AN AMOUNT OF 30 LAC HAS BEEN CREDITED IN THIS ACCOUNT THROUGH RTGS FROM ANOTHER HDFC ACCOUNT. THE ASSESSING OFFICER HAS NOT EXAMINED THIS ASPECT BEFORE ACCEPTING THE LOAN TO BE GENUINE. THEREFORE, HE HELD THAT THE ORDER OF THE ASSESSING OFFICER IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 6 . BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE REFERRING TO PAGE NO. 31 OF THE PAPER BOOK WHEREIN A LETTER OF JCIT , RANGE - 1, BELGAUM DATED 27/11/2013 IS PLACED, SUBMITTED THAT THE ASSESSI NG OFFICER REQUIRED THE ASSESSEE TO GIVE DETAILS OF LOAN FROM AMANATH COOPERATIVE BANK OF 30 LAC . THE ASSESSEE FILED BEFORE THE ASSESSING OFFICER COPY OF THE BANK ACCOUNT OF AMANATH COOPERATIVE BANK, COPY OF WHICH IS PLACED AT PAGE NO. 34 OF THE PAPER B OOK. THE ASSESSING OFFICER AFTER VERIFYING THE TRANSACTIONS FROM THE BANK STATEMENT AND BEING SATISFIED , ACCEPTED THE LOAN OF 30 LAC. HE SUBMITTED THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE ASSESSING OFFICER, HE SIMPLY DOUBTED THE ORDER O F THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSING OFFICER HAS NOT EXAMINED THESE CHEQUES OF 5 L AC EACH ALL DEBITED ON 15/09/2010 IN THE ACCOUNT AND THAT THE AMOUNT HAS BEEN RECEIVED THROUGH RTGS FROM HDFC ACCOUNT . THE PRINCIPAL COMMISSIONER OF INCOME TAX AFTER MAKING 4 ITA NO. 103/PAN/2016 HIS OWN INVESTIGATION HAS BROUGHT NO MATERIAL TO SHOW THAT THE LOA N OF 30 L AC CLAIMED BY THE ASSESSEE FROM MR. MOHAMMED ILYAS SYED WAS NOT GENUINE. THEREFORE, HE WAS NOT JUSTIFIED IN HOLDING THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THIS GROUND. WE , THEREFO RE, SET ASIDE THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX ON THIS GROUND AND ALLOW THE APPEAL OF THE ASSESSEE . 7 . FURTHER , THE PRINCIPAL COMMISSIONER OF INCOME TAX OBSERVED THAT THE ASSESSEE HAS COMMENCED CONSTRUCTION OF RESIDENTIAL HOUSE AND DEBITED 14,46,165/ - IN HIS CAPITAL ACCOUNT. THERE WAS A LACK OF VERIFICATION AND NO APPLICATION OF MIND BY THE ASSESSING OFFICER, THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE R E VENUE . WE FIND FROM THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX THAT THOUGH THIS ISSUE WAS RAISED IN THE NOTICE UNDER SECTION 263 OF THE ACT ON 18/02/2015, BUT IN THE ORDER PASSED UNDER SECTION 263 OF THE ACT , T HE PRINCIPAL COMMISSIONER OF INCOME TAX HAS NOT GIVEN ANY FI N DING ON THIS ISSUE IN THE NOTICE ISSUED UNDER SECTION 263 OF THE ACT AND , THEREFORE, THIS ISSUE DOES NOT ARISE OUT OF THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 OF THE ACT, AND, HENCE, THE SAME IS DISMIS SED. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 28 TH DAY OF JU LY , 201 6 AT GOA. S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH JU LY , 201 6 . VR/ - 5 ITA NO. 103/PAN/2016 COPY TO: 1 . THE ASSESSEE : SYED ABUBACKER RIYAZ, C/O M/S. S.M. STEELS, PATIL GALLI, BELAGAVI. 2 . THE REVEN U E : P C I T , B E L A G A V I . 3 . THE CIT : JCIT , R A N G E - 1 , B E L G A U M . 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI