Shri Vinod Kumar Singh Kushwah, Indore V. THE ITO 3(3), Indore

ITA 1036/IND/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5726 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Opportunity of being heard; Peak credit
• Section: 148

Judgement Text

VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIB UNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER .../ I.T.A. NO. 1036/IND/2016 / ASSESSMENT YEAR: 2009-10 SHRI VINODKUMAR SINGH KUSHWAH INDORE PAN AEBPK 7108Q :: / APPELLANT VS INCOME TAX OFFICER 3(5) INDORE :: / RESPONDENT ! ' # $ / ASSESSEE BY SHRI RA M GILDA %& ' # $ / REVENUE BY SHRI MOHD. JAVED - DR ' ( ' !) DATE OF HEARING 15.3 .2017 *+,- ' !) DATE OF PRONOUNCEMENT 2 0 .3 .2017 / O R D E R PER SHRI C.M. GARG, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 1.8.201 6 IN FIRST APPEAL NO. IT-52/2014-15/23 FOR THE ASSESSMENT YEAR 2009-10. VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEEAPP ELLANT READ AS FOLLOWS :- 1. THAT THE ISSUANCE OF NOTICE UNDER SECTION 148 IS ILLEGAL, WRONG, WITHOUT AUTHORITY OF LAW AND JURISDICTI ON 2. THAT THE ASSESSMENT ORDER PASSED U/S 144/147 IS ILLEGAL, WRONG, WITHOUT AUTHORITY OF LAW AND JURISDICTION 3. THAT THE ADDITION MADE OF RS.13,22,100/- IS ILLE GAL, WRONG UNJUSTIFIED. 4. THAT THE LEARNED ASSESSING OFFICER IS ALSO ILLEG AL, WRONG AND UNJUSTIFIED IN TRADING THE AGRICULTURAL INCOME OF RS.2,65,000/- AS INCOME THE SOURCED. 3 . FIRST OF ALL, THE LEARNED COUNSEL FOR THE ASSESSEE DOES NOT WANT TO PRESS GROUND NOS. 1 AND 2. THEREFORE, THE SAME A RE DISMISSED AS NOT PRESSED. 4. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD OF T HE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER WITHOUT AFF ORDING PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE AND THE ADDITIONS OF RS. 13,22,100/- AND RS. 2,65,000/- HAV E BEEN MADE ON ILLEGAL, WRONG AND UNJUSTIFIED BASIS. THE LEARNED C OUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE CASE WAS TAKEN UP IN SCRUTINY VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 3 FOR VERIFICATION OF AIR INFORMATION REGARDING THE C ASH DEPOSIT OF RS.13,22,100/- INTO AXIX BANK ACCOUNT OF THE ASSESS EE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT THAT T HE ASSESSEE HAS NOT DEPOSITED CASH OF RS. 13,22,100/- ON A SINGLE D AY AND THE SAME HAS BEEN DEPOSITED IN THE FORM OF SMALL AMOUNTS OF CASH ON DIFFERENT DATES AND THE ASSESSEE ALSO WITHDREW CASH ON DIFFERENT DATES, WHICH IS APPARENT FROM THE PHOTOCOPY OF THE AXIS BANK ACCOUNT OF THE ASSESSEE. THE LEARNED COUNSEL FOR TH E ASSESSEE FURTHER POINTED OUT THAT THE OPENING BALANCE AS ON 1.4.2008 WAS RS. 41,416/- AND MAXIMUM BALANCE DURING THE YEAR WA S RS.2,54,215/- ON 11.9.2008 WHICH IS ALSO APPARENT F ROM THE COPY OF AXIS BANK ACCOUNT. THE LEARNED COUNSEL FOR THE ASSE SSEE VEHEMENTLY SUBMITTED THAT THE ASSESSEE HAS SHOWN AG RICULTURAL INCOME OF RS. 2,65,000/- AS THE ASSESSEE IS A HORTI CULTURIST AND THE ASSESSEE HAS TAKEN ON LEASE 44 BIGHAS OF AGRICULTUR AL LAND FROM DIFFERENT FARMERS AS PER THE COPIES OF THE AGREEMEN TS AND ON THIS LAND THE ASSESSEE USED TO PRODUCE ONLY QUALITY SEED S. THE LEARNED COUNSEL FOR THE ASSESSEE SPECIFICALLY DREW OUR ATTE NTION TOWARDS THE ASSESSEES PAPER BOOK PAGE 32 AND SUBMITTED THAT OU T OF TOTAL IMPUGNED CASH DEPOSITS, THERE WAS SALE PROCEED OF P OTATO SEEDS OF VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 4 RS.2,50,000/- TO KBA TRADERS AND THE PAYMENT WAS RE CEIVED BY THE ASSESSEE ON 11.9.2009 WHICH IS ALSO DISCERNIBLE FRO M THE COPY OF BANK ACCOUNT AND STATEMENT. THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER WRONGLY DISMIS SED THE CLAIM OF THE ASSESSEE PERTAINING TO EXEMPT AGRICULTURAL INCO ME AND TREATED THE SAME AS INCOME FROM OTHER SOURCES AMOUNTING TO RS.2,65,000/- 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, THE ALTERNATIVE ARGUMENT OF THE ASSESSEE IS THAT MAXIMUM BALANCE IN THE ACCOUNTS WA S ONLY RS.2,54,215/-. THEREFORE, PEAK ADDITION MAY BE TAKE N FOR TAXATION PURPOSES AND THE ADDITION OF RS.13,22,100/- CANNOT BE HELD JUSTIFIED AND SUSTAINABLE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE AMOUNT OF PEAK ADDITION I.E. RS.2,54,215/- IS LESSER THAN THE AMOUNT OF AGRICULT URAL INCOME SHOWN BY THE ASSESSEE AT RS.2,65,000/- WHICH WAS TR EATED BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES, DIS MISSING THE EXEMPTION CLAIMED BY THE ASSESSEE WHICH ALSO COVERS THIS PEAK AMOUNT. THEREFORE, NO ADDITION CAN BE MADE IN REGAR D TO THE CASH DEPOSITS MADE TO THE ASSESSEES BANK ACCOUNT. VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 5 6. REPLYING TO THE ABOVE, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ACTION OF THE ASSESSING OFFICER AS WELL AS THE FIRST APPELLATE AUTHORITY AN D SUBMITTED THAT THE ASSESSEE, BEING A SALARIED PERSON, DEPOSITED HU GE AMOUNTS IN HIS BANK ACCOUNT AND THERE WAS NO PLAUSIBLE AND ACC EPTABLE EXPLANATION IN THIS REGARD. THEREFORE, THE ASSESSIN G OFFICER WAS RIGHT IN MAKING THE ADDITION OF RS. 13,22,100/-. TH E LEARNED DR FURTHER SUBMITTED THAT SINCE THE ASSESSEE COULD NOT ESTABLISH THE FACT THAT HE HAS EARNED INCOME OF RS. 2,65,000/- OU T OF AGRICULTURAL ACTIVITIES UNDERTAKEN IN THE AGRICULTURAL LAND OF 4 4 BIGHAS TAKEN ON LEASE, THEREFORE, THE ASSESSING OFFICER WAS ALSO RI GHT IN TREATING THE SAME AS INCOME FROM OTHER SOURCES AND, THEREFORE, T HE LEARNED CIT(A) WAS QUITE JUSTIFIED IN UPHOLDING THE ASSESSM ENT ORDER. 7. PLACING REJOINDER TO THE ABOVE SUBMISSIONS, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF AT ALL T HE ASSESSEES CLAIM TOWARDS EXEMPT AGRICULTURAL INCOME IS DISMISSED AND THE INCOME OF RS. 2,65,000/- IS TREATED AS INCOME FROM OTHER SOUR CES, THEN IT ALSO COVERED THE MAXIMUM PEAK BALANCE OF RS. 2,54,215/- ON 11.9.2008 WHICH WAS THE RESULT OF DEPOSIT OF RS. 2,50,000/- R ECEIVED FROM KBA VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 6 TRADERS ON 11.9.2009 TOWARDS SALE OF POTATO SEEDS B Y THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN ANY CASE, THE ADDITION OF RS. 13,20,100/- CANNOT BE HELD AS S USTAINABLE ON ALL COUNTS AND, THEREFORE, THE SAME MAY KINDLY BE DELET ED. 8. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSI ONS, AT THE VERY OUTSET WE OBSERVE THAT THE ASSESSING OFFICER MADE T HE ADDITION OF RS.2,65,000/- BY TREATING THE AGRICULTURAL INCOME A S INCOME FROM OTHER SOURCES DISMISSING THE CLAIM OF EXEMPTION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE DID NOT FILE ALL DETAIL S AND EVIDENCE REGARDING THE SOURCE OF AGRICULTURAL INCOME. FROM T HE FIRST APPELLATE ORDER IT IS ALSO DISCERNIBLE THAT THE FIRST APPELLA TE AUTHORITY UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING TH AT THE ASSESSEE HAS AGRICULTURAL INCOME FROM LEASING OF 44 BIGHAS O F AGRICULTURAL LAND, WHICH IS FOUND TO BE UNSUPPORTED BY ANY EVIDE NCE. THEREFORE, IT CANNOT BE ACCEPTED THAT THE AMOUNT OF RS.2,65,00 0/- SHOWN AS AGRICULTURAL INCOME WAS EARNED FROM THE AGRICULTURA L ACTIVITIES AS AGRICULTURAL INCOME OF THE ASSESSEE. THE LEARNED CI T(A) FURTHER OBSERVED THAT THE ASSESSEE HAS HIS OWN LAND AND HAS ALSO TAKEN VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 7 AGRICULTURAL LAND ON LEASE FOR ONE YEAR WHICH WAS P ERTAINING TO THE ASSESSMENT YEAR 2008-09 AND NOT ASSESSMENT YEAR 200 9-10. WITH THESE OBSERVATIONS, THE LEARNED CIT(A) UPHELD THE A CTION OF THE ASSESSING OFFICER WHICH TREATED THE AGRICULTURAL IN COME AS INCOME FROM OTHER SOURCES. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS COPIES OF THE AFFIDAVITS OF THE OWNERS OF THE AGRICULTURAL LAND REGARDING EXTENSION OF LEASE DEED WHICH IS PLACED AT PAGES 21 TO 24 OF THE PAPER BOOK. EXCEPT THESE AFFIDAVITS, WHICH WERE NOT SUBMITTED DURING THE ASSESSMENT PROC EEDINGS, THERE IS NO EVIDENCE TO ESTABLISH THAT THE ASSESSEE TOOK 44 BIGHAS OF AGRICULTURAL LAND AND UNDERTOOK AGRICULTURAL ACTIVI TIES THEREON TO EARN EXEMPT AGRICULTURAL INCOME OF RS.2,65,000/-. W E ARE IN AGREEMENT WITH THE CONTENTION OF THE LEARNED DR THA T IF THERE WAS WRITTEN LEASE DEED FOR THE ASSESSMENT YEAR 2008-09 THEN THERE MUST BE EXTENSION OF LEASE BY WAY OF WRITTEN DOCUMENT ON LY AND IN THE ABSENCE OF THE SAME, ORAL EXTENSION OF LEASE ON THE BASIS OF SELF- SERVING AFTER-THOUGHT AFFIDAVITS, CANNOT BE ACCEPTE D AND THUS WE HAVE NO HESITATION TO HOLD THAT THE ASSESSING OFFIC ER WAS RIGHT IN VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 8 CONCLUDING THAT THE ASSESSEES CLAIM FOR EXEMPT AGR ICULTURAL INCOME IS NOT ACCEPTABLE AND THE ASSESSING OFFICER WAS RIG HT IN TREATING THE AMOUNT AS INCOME FROM OTHER SOURCES. 9. THE NEXT ISSUE POSED FOR ADJUDICATION IS THE ADD ITION OF RS.13,22,100/- WHICH WAS MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF CASH DEPOSITS BY THE ASSESSEE DURING THE FINANCIAL YEAR 2008-09 I.E. BETWEEN 1.4.2008 TO 31.3.2009. FROM TH E COPY OF BANK ACCOUNT PLACED AT PAPER BOOK PAGES 25 TO 31, WE ARE SATISFIED WITH THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSES SEE THAT THE IMPUGNED AMOUNT WAS NOT DEPOSITED ON SINGLE DAY AND THE SAME WAS DEPOSITED IN SMALL AMOUNTS DURING THE ENTIRE FI NANCIAL PERIOD AND THE MAXIMUM PEAK AMOUNT DURING THE YEAR WAS RS. 2,54,215/- ON 11.9.2008, WHICH WAS ENHANCED AFTER DEPOSIT OF R S. 2,50,000/- RECEIVED BY THE ASSESSEE FROM KBA TRADERS. WE ALSO OBSERVE THAT THE ASSESSEE NOT ONLY DEPOSITED VARIOUS SMALL AMOUN TS ON VARIOUS DATES BUT ALSO WITHDREW SMALL AMOUNTS THEREFROM. TH US, THE ADDITION MADE BY THE ASSESSING OFFICER AND UPHELD B Y THE LEARNED CIT(A) BY TAKING THE TOTAL AMOUNT OF DEPOSITS AND I GNORING THE VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 9 WITHDRAWALS AND PEAK AMOUNT, CANNOT BE HELD AS SUST AINABLE. IN OUR CONSIDERED VIEW, THE PEAK AMOUNT OF MAXIMUM BAL ANCE ON 11.9.2008, WHICH WAS RS. 2,54,215/-, CAN BE TAKEN F OR THE ADDITION ON ACCOUNT OF CASH DEPOSITS. THE TOTAL OF CASH DEP OSITS CANNOT BE TAKEN FOR MAKING THE ADDITION. AT THIS JUNCTURE, WE MAY ALSO POINT OUT THAT SINCE IN EARLIER PART OF THIS ORDER WE HAV E UPHELD THE CONCLUSION OF THE LEARNED CIT(A) WHICH CONFIRMED TH E ADDITION OF RS.2,65,000/- MADE BY THE ASSESSING OFFICER BY TREA TING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES, W HICH ALSO COVERED THE AMOUNT OF RS. 2,54,215/-, THEREFORE, NO FURTHER ADDITION ON ACCOUNT OF CASH DEPOSITS CAN BE HELD AS SUSTAINA BLE. 10. FINALLY, IN OUR HUMBLE UNDERSTANDING, WHEN THE AMOUNT OF PEAK CREDIT IS LESS THAN THE AMOUNT OF INCOME FROM OTHER SOURCES THEN NO FURTHER ADDITION IS REQUIRED TO BE MADE IN THIS REGARD AND, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFIC ER AND UPHELD BY THE LEARNED CIT(A) OF RS. 13,22,100/- IS WRONG, UNJ USTIFIED AND UNSUSTAINABLE AND, HENCE, WE DISMISS THE SAME AND T HE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION IN TOTO. VINOD KUMAR SINGH KUSHWAH ITA NO. 1036/IND/2016 10 11. ACCORDINGLY, GROUND NO. 3 OF THE ASSESSEES APP EAL IS ALLOWED AND GROUND NO. 4 OF THE ASSESSEES APPEAL IS DISMIS SED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20 TH MARCH, 2017. SD/- SD/- $) & & (O.P.MEENA) (C.M. GARG) ACCOUNTANT MEMBER J UDICIAL MEMBER MARCH 20 TH 2017. DN/