ITO, Nashik V. Shri Madhukar Dagdu Bodke, Nashik

ITA 1046/PUN/2012

• Counselvise Citation: 104624514 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GARIMA C HOUDHARY
• Assessee Lawyers: LALIT S SANGLE
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1046/PN/2012 (ASSESSMENT YEAR : 2003-04) INCOME TAX OFFICER, WARD 1(1), NASHIK. . APPELLANT VS. SHRI MADHUKAR DAGDU BODKE, BAHAR, KRISHNA RESIDENCY, P&T COLONY, OPP. C. P. OFFICE, SHARANPUR ROAD, NASHIK. PAN : AEJPB4701Q . RESPONDENT DEPARTMENT BY : SMT. GARIMA CHOUDHARY ASSESSEE BY : SHRI LALIT S. SANGLE DATE OF HEARING : 31-12-2013 DATE OF PRONOUNCEMENT : 27-01-2014 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, NASHIK DAT ED 15.03.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 31.12.2009 PAS SED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2003-04. 2. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE REVENU E IS WITH REGARD TO THE ACTION OF THE CIT(A) IN DELETING AN ADDITION OF RS. 11,26,889/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITA L INTRODUCED BY THE ASSESSEE IN A PARTNERSHIP FIRM. 3. IN BRIEF, THE FACTS ARE THAT ASSESSEE IS AN INDI VIDUAL ENGAGED IN THE BUSINESS OF CONSTRUCTION AND LAND DEVELOPMENT. THE ASSESSEE IS A PARTNER IN A FIRM M/S. IMMEDIATE CONSTRUCTIONS AND IS ALSO A P ROPRIETOR OF M/S. BODKE ITA NO.1046/PN/2012 A.Y. 2003-04 BUILDCON. THE ASSESSING OFFICER NOTICED THAT DURIN G THE YEAR UNDER CONSIDERATION, ASSESSEE HAD INTRODUCED CAPITAL OF R S.11,26,889/- IN THE FIRM I.E. M/S. IMMEDIATE CONSTRUCTIONS. THE ASSESSING O FFICER CONSIDERED THE SAID INTRODUCTION OF CAPITAL AS UNEXPLAINED AND ADDED TH E SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4. BEFORE THE CIT(A), ASSESSEE REFERRED TO THE AUDI TED ACCOUNTS OF THE PARTNERSHIP FIRM AND ALSO OF HIS PROPRIETARY CONCER N, M/S. BODKE BUILDCON AND ON THAT BASIS IT WAS POINTED OUT THAT THE SOURCE OF CAPITAL INTRODUCED IN THE PARTNERSHIP FIRM WAS DULY REFLECTED IN THE RESPECTI VE BOOKS OF ACCOUNT. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSIN G OFFICER WHICH WAS DULY FURNISHED BY THE ASSESSING OFFICER AFTER EXAMINING THE BOOKS OF ACCOUNT AND THE BANK ACCOUNT OF THE ASSESSEE. AFTER CONSIDERIN G THE RIVAL STANDS AND ALSO THE MATERIAL ON RECORD, THE CIT(A) HAS DELETED THE SAID ADDITION ON THE GROUND THAT THE SOURCE OF CAPITAL INTRODUCED BY THE ASSE SSEE AMOUNTING TO RS.11,26,889/- WAS DULY EXPLAINED. AGAINST SUCH AC TION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE HAS MAINLY POINTED OUT THAT THE MONEY WAS WITHDRAWN FROM THE BANK ACCO UNT BY THE ASSESSEE BY BEARER CHEQUES ISSUED IN THE NAMES OF THE EMPLOYEES AND THEREAFTER, THE AMOUNTS HAVE BEEN INTRODUCED AS CAPITAL IN CASH W ITH THE PARTNERSHIP FIRM. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO POINTE D OUT THAT INSTEAD OF MAKING CASH WITHDRAWALS AND INTRODUCING THE SAME IN THE PARTNERSHIP FIRM, THE ASSESSEE SHOULD HAVE MADE DIRECT PAYMENTS THROUGH T HE CHEQUES AND IN THE ABSENCE OF THE SAME, IT RAISED A DOUBT ON THE EXPLA NATION FURNISHED BY THE ASSESSEE. 6. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FOR THE RESPONDENT- ASSESSEE HAS SUPPORTED THE ORDER OF THE CIT(A) AND ALSO FURNISHED A PAPER ITA NO.1046/PN/2012 A.Y. 2003-04 BOOK WHEREIN IS PLACED THE MATERIAL CONSIDERED BY T HE CIT(A) AND ALSO A COPY OF THE REMAND REPORT OF THE ASSESSING OFFICER WHERE IN IT IS QUITE CLEARLY ACCEPTED THAT THE SOURCE OF CAPITAL INTRODUCTION IN THE PARTNERSHIP FIRM WAS OUT OF THE CASH, WITHDRAWN FROM THE BANK ACCOUNT MAINTA INED BY THE ASSESSEE. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE PRESENT CASE, THE CIT(A) HAS ARRIVED AT CERTAIN FACTUAL FIN DINGS WHICH, IN OUR VIEW, HAVE NOT BEEN ASSAILED BY THE REVENUE ON THE BASIS OF AN Y COGENT OR CREDIBLE MATERIAL. AS PER THE CIT(A), IT WAS AN UNDISPUTED POSITION AS PER THE CAPITAL ACCOUNT APPEARING IN THE AUDITED BOOKS OF ACCOUNT O F THE PROPRIETARY CONCERN AS IN ALSO THE ACCOUNT BOOKS OF PARTNERSHIP FIRM TH AT THE INTRODUCTION OF CAPITAL TO THE EXTENT OF RS.11,26,889/- WAS DULY REFLECTED. SECONDLY, THE CIT(A) HAS RECORDED A FINDING THAT THE DATES OF WITHDRAWAL FRO M THE PROPRIETARY CONCERN I.E. M/S. BODKE BUILDCON AND THE DATES OF INTRODUCT ION OF CAPITAL IN M/S. IMMEDIATE CONSTRUCTIONS TALLIED. THIRDLY, THE CIT( A) HAS NOTICED THAT THE CASH WITHDRAWN FROM THE BANK HAS NOT BEEN FOUND TO HAVE BEEN SPENT ANYWHERE OTHER THAN FOR INTRODUCTION OF CAPITAL IN THE FIRM M/S. IMMEDIATE CONSTRUCTIONS. ALL THE AFORESAID FACTUAL FINDINGS HAVE NOT BEEN NE GATED BY THE REVENUE AT ANY STAGE AND RATHER WE FIND THE SAME ARE ALSO NOT CONTRADICTED BY THE ASSESSING OFFICER IN THE REMAND REPORT SUBMITTED TO THE CIT(A). EVEN THE ARGUMENT OF THE REVENUE THAT ASSESSEE HAS WITHDRAWN CASH FROM THE BANK ACCOUNT OF M/S. BODKE BUILDCON BY ISSUING BEARER CH EQUES TO THE EMPLOYEES AND THE INTRODUCTION OF CAPITAL IN CASH WITH THE PA RTNERSHIP FIRM INSTEAD OF MAKING DIRECT PAYMENT, HAS ALSO BEEN APPROPRIATELY DEALT WITH BY THE CIT(A). THE CIT(A) HAS NOTICED THAT IT IS THE PRACTICE OF M OST OF THE BUSINESS CONCERNS TO WITHDRAW CASH BY ISSUING BEARER CHEQUES IN THE N AMES OF THE EMPLOYEES, WHO ACTUALLY VISIT THE BANK AND WITHDRAW THE CASH. IN-FACT, THERE IS NO PROHIBITION FOR INTRODUCTION OF CAPITAL IN CASH INT O A PARTNERSHIP FIRM FROM EXPLAINED SOURCES AND THEREFORE CONSIDERING THE FAC TUAL SITUATION FOUND BY THE CIT(A), WE FIND NO MISTAKE ON HIS PART IN DELETING THE IMPUGNED ADDITION. ITA NO.1046/PN/2012 A.Y. 2003-04 ACCORDINGLY, THE ORDER OF THE CIT(A) IS HEREBY AFFI RMED. THUS, REVENUE FAILS ON THIS ASPECT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 27 TH JANUARY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, NASHIK; 4) THE CIT-II, NASHIK; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE