Subhash Chandra Agarwal, Prop: M/s. Aman Trading, Bhubaneswar V. ITO, Ward-2(2), Bhubaneswar

ITA 105/CTK/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7259 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: T K AGARWALLA
• Keywords: Principle of natural justice
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 105 /CTK/201 8 ASSESSMENT YEAR : 20 09 - 2010 MR SUBHASH CHANDRA AGARWAL, PROP. M/S. AMAN TRADING, PLOT NO.405, HARSPRIYA LAKE VIEW APARTMENT, CHINTAMANISWAR TEMPLE, CUTTACK ROAD, BHUBANESWAR. VS. ITO, WARD - 2(2), BHUBANESWAR PAN/GIR NO. AEQPA 8869 P (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI T.K.AGARWALLA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 23 /0 7 / 2018 DATE OF PRONOUNCEMENT : 24 /0 7 / 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1, BHUBANESWAR DATED 11.12.2017 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. GROUND NOS.1 TO 6 READ AS UNDER: 1. THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AS WELL AS IN FACT BY PARTLY CONFIRMING THE ASSESSMENT ORDER DATED 14.03.2016 PASSED BY THE LEARNED ASSESSING OFFICER BEING AGAINST THE PRINCIPLES OF NATURAL JUSTICE, ARBITRARY, EXCESSIVE ERRONEOUS, CONTRARY TO FACTS AND BAD IN LAW. 2. THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW, BY NOT ADDRESSING THE SUBMISSIONS OF THE APPELLANT WHERE THE LEARNED ASSESSING OFFICER HAS COMPLETELY OVERLOOKED THE 2 ITA NO.105/CTK/2018 ASSESSMENT YEAR : 2009 - 2010 PERTINENT SUBMISSIONS BEFORE THE LEARNED ASSESSING OFFICER 13.10.2014, 29.01.2016 AND 02.03.2016. HENCE THE ORDER PASSED WITHOUT RECKONING WITH ALL OF THE GROUNDS OF APPEAL OF THE APPELLANT IS UN ILATERAL, ARBITRARY AND RULED OUT IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) AS WELL AS THE LEARNED ASSESSING OFFICER HAVE ERRED IN LAW AND IN FACT BY NOT ADDRESSING THE APPELLANT'S REPEA TED SUBMISSIONS ON THE LEGAL VALIDITY OF RE - OPENING OF THE CASE U/S 147. 4. THAT, LEARNED COMMISSIONER OF INCOME TAX (APPEAL) AS WELL AS THE LEARNED ASSESSING OFFICER ARE NOT JUSTIFIED BY NOT ADDRESSING THE OBJECTION OF ASSESSEE TO THE LEGALITY OF THE R EOPENING U/S 147 AS WELL AS LEGALITY OF NOTICE U/S 143(2). 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) IS NOT JUSTIFIED BY NOT DECLARING THE ASSESSMENT PROCEEDINGS INVALID WHERE THE EARLIER ASSESSMENT ORDER HAVE BEEN PASSED WITH COMPLETE DETAILS AND CURRENT ASSESSMENT ORDER IS BEING PASSED WITHOUT BRINGING ANY NEW ADDITIONAL FACTS TO THE RECORD. IN VIEW OF THE MATTER THE ASSESSMENT ORDER SO MADE IS LIABLE TO BE QUASHED. 6. THAT, WHETHER THE CURRENT REASSESSMENT PROCEEDING BEING MADE AND ORDER BE ING PASSED RELYING ON THE AVAILABLE RECORDS AT THE TIME OF PREVIOUS REASSESSMENT PROCEEDING, WITHOUT BRINGING ANY NEW FACTS TO THE RECORD IS A SIMPLE CASE OF 'CHANGE IN OPINION'. IN VIEW OF THE MATTER THE ASSESSMENT ORDER SO MADE IS LIABLE TO BE QUASHED. 3. LD A.R. OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE ABOVE GROUNDS OF APPEAL AND, THEREFORE, GROUND NOS.1 TO 6 ARE DISMISSED AS NOT PRESSED. 4. GROUND NO.7 OF APPEAL READS AS UNDER: 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND IN FACT BY CONFIRMING THE ADDITION TO THE TUNE OF RS. 2,00,000/ - ON ACCOUNT OF CREDIT TO THE SHARE CAPITAL ACCOUNT OF THE ASSESSEES BUSINESS MAKING THE ASSESSMENT ARBITRARY, ERRONEOUS, CONTRARY TO FACTS AND BAD IN LAW. 5 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT AS PER THE AUDITED ACCOUNTS , IT IS SEEN THAT THE ASSESSEE HAS SHOWN RS.12,67,000/ - IN THE BALANCE SHET AS CAPITAL INTRODUCED DURING FINANCIAL 3 ITA NO.105/CTK/2018 ASSESSMENT YEAR : 2009 - 2010 YEAR 2008 - 09 RELEVANT TO THE ASSESSMENT YEAR 2009 - 10. SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO SUBSTANTIATE HIS CLAIM WITH SUPPORTING DOCUMENTARY EVIDENCES. NO S UPPORTING DOCUMENTARY EVIDENCES WERE FURNISHED OR VERIFICATION AND, THEREFORE, THE ASSESSING OFFICER ADDED RS. 12,67,000/ - TO TH E INCOME OF THE ASSESSEE. 6 . ON APPEAL BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT AN AMOUNT OF RS.12,67,000/ - WAS SHOWN AS CAPITAL INTRODUCED DURING THE YEAR BY THE PROPRIETOR. SIMULTANEOUSLY, THERE IS ALSO DRAWING SHOWN BY THE PROPRIETOR OF RS.11,57 ,332/ - SHOWN IN THE BALANCE SHEET. IT WAS SUBMITTED THAT THE ASSESSEE FOLLOWS THE PRACTICE THAT WHENEVER ANY CASH IS COLLECTED FROM DEBTOR FOR SALE OF SIM CARD S OR RECHARGE VOUCHERS BY THE PROPRIETOR , IT IS NOTED THROUGH HIS PERSONAL CAPITAL ACCOUNT AND E NTERED IN CASH BOOK OF HIS PROPRIETARY CONCERN M/S. AMAN TRADING. THIS HAS BEEN DONE AS THE CASHIER AT THE SHOP NEEDS TO RECONCILE THE CASH BOOK EVERY TIME WHEREAS THE PROPRIETOR HIMSELF, MOVES IN THE MARKET AND VISIT SMALL DEALER AND COLLECT CASH FROM THEM AND SUBMIT THE CASH TO THE CASHIER TO BE RECORDED IN THE MAIN CASH BOOK OF THE FIRM. THIS PRACTICE IS ALSO FOLLOWED IN THE CASE WHERE ONE OR TWO STAFF ALSO COLLECTS CASH FROM PETTY DEALERS AN D SUBMIT CASH IN THE EVENING TO THE PROPRIETOR. THE SAME CASH WERE RECORDED IN THE NEXT WORKING DAYS IN THE CASH BOOK OF M/S. AMAN TRADING. HE SUBMITTED AUDITED BALANCE SHEET OF TWO PREVIOUS YEARS PRIOR TO THE CURRENT ASSESSMENT YEAR AND SUBMITTED THAT D URING THE ASSESSMENT 4 ITA NO.105/CTK/2018 ASSESSMENT YEAR : 2009 - 2010 YEAR 2008 - 09, WHICH IS ASSESSMENT YEAR IMMEDIATELY PRECEDING THE CURRENT YEAR, THE ASSESSEE HAS SHOWN DRAWINGS RS.7,32,529/ - . 7 . THE CIT(A) OBSERVED THAT THE ASSESSEE HAS SHOWN DRAWINGS OF RS.11,57,332/ - DURING THE RELEVANT PREVIOUS Y EAR AGAINST CREDIT OF RS.12,67,000/ - . THE BALANCE CAPITAL INTRODUCED OF RS.1,09,668/ - IS EXPLAINED TO BE OUT OF DRAWINGS OF RS.7,32,529/ - MADE DURING THE PRECEDING FINANCIAL YEAR 2007 - 08 RELEVANT TO ASSESSMENT YEAR 2008 - 09. HE OBSERVED THAT THE CLAIM OF THE ASSESSEE IS NOT FOUND FULLY SATISFACTORY AS BECAUSE IF ENTIRE DRAWINGS OF RS.11,57,332/ - WERE UTILISED AS CAPITAL INTRODUCTION THEN THE ASSESSEE WOULD BE LEFT WITH NO MONEY TO MEET THE DOMESTIC EXPENSES. HE HELD THAT KEEPING IN VIEW ALL THE RELEVANT F ACTORS, THE REQUIREMENT OF FAMILY EXPENDITURE OF THE ASSESSEE IS ESTIMATED AT RS.2,00,000/ - AND HENCE, THE CAPITAL INTRODUCTION TO THE EXTENT OF RS.9,57,332/ - OUT OF THE DRAWINGS OF THE CURRENT YEAR IS TREATED AS EXPLAINED. HE OBSERVED THAT EVEN IF IT IS ACCEPTED THAT THE CAPITAL INTRODUCTION TO THE EXTENT OF RS.1,09,668/ - HAS COME FROM THE DRAWINGS OF EARLIER YEAS, THERE IS NO SOURCE TO EXPLAIN THE AMOUNT OF RS.2,00,000/ - SPENT DURING THE CURRENT YEAR ON DOMESTIC EXPENSES. THEREFORE, HE SUSTAINED THE ADD ITION OF RS.2,00,000/ - . 8 . BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5 ITA NO.105/CTK/2018 ASSESSMENT YEAR : 2009 - 2010 9. LD A.R. OF THE ASSESSEE ARGUED AND SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAS NOT GIVEN ANY REASON IN THEIR ORDERS FOR NOT A CCEPTING THE PLAUSIBLE EXPLANATION OF THE ASSESSEE THAT DRAWINGS IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 2009 WAS RS.7,32,529/ - AND IN THE ASSESSMENT YEAR 2007 - 08 WAS RS.5,13,619/ - , WHICH WAS AVAILABLE WITH THE ASSESSEE FOR INTRODUCING CAPITAL DU RING THE YEAR. THEREFORE, THE ADDITION MADE CANNOT BE SUSTAINED IN LAW AND REQUIRES TO BE DELETED. 10. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES A ND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS SHOWN INTRODUCTION OF CAPITAL OF RS.12,67,000/ - DURING THE YEAR. THE ASSESSEE EXPLAINED THE SOURCE OF THE SAME AS DRAWINGS DURING THE YEAR OF RS.11,57,332/ - AND DRAWINGS MADE IN THE I MMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 09 OF RS.7,32,529/ - AND IN THE ASSESSMENT YEAR 2007 - 08 OF RS.5,13,619/ - . THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAS NOT GIVEN ANY REASON FOR NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE. THEY HAVE NOT BROUG HT ANY MATERIAL ON RECORD AFTER INVESTIGATION AND VERIFICATION THAT THE DRAWINGS MADE IN THE ASSESSMENT YEAR 2008 - 09 OF RS.7,32,529/ - AND IN ASSESSMENT YEAR 2007 - 08 OF RS.5,13,619/ - COULD NOT HAVE BEEN AVAILABLE WITH THE ASSESSEE FOR INTRODUCING CAPITAL OF RS.12,67,000/ - DURING THE YEAR UNDER APPEAL. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED OPINION, 6 ITA NO.105/CTK/2018 ASSESSMENT YEAR : 2009 - 2010 THE ASSESSING OFFICER AS WELL AS THE CIT(A) WERE NOT JUSTIFIED IN MAKING ADDITION OF RS.2,00,000/ - ON THE GROUND THAT IF THE ASSESSE ES EXPLANATION WAS ACCEPTED THAT THE DRAWINGS OF RS.11,57,332/ - WAS UTILISED TOWARDS INTRODUCTION OF CAPITAL DURING THE YEAR THEN HE WOULD BE LEFT WITH NO MONEY FOR HOUSEHOLD EXPENSES. THEREFORE, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE T HE ADDITION OF RS.2,00,000/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 24 /0 7 /2018. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 24 /0 7 /2018 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : MR SUBHASH CHANDRA AGARWAL, PROP. M/S. AMAN TRADING, PLOT NO.405, HARSPRIYA LAKE VIEW APARTMENT, CHINTAMANISWAR TEMPLE, CUTTACK ROAD, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD - 2(2), BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//