Kishorkumar Shridhar Dixit, Nashik V. Income-tax Officer,

ITA 107/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1544 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Unexplained cash credit; Recovery proceedings; Principle of natural justice; Condonation of delay
• Section: 131

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 107 /PN/201 5 / ASSESSME NT YEAR : 20 0 9 - 1 0 KISHORKUMAR SHRIDHAR DIXIT, UFADE BUNGALOW, SHIVAJI NAGAR, SHIVAJI NAGAR, PIMPALGAON(B), NIPHAD, NASHIK 422209 . / APPELLANT PAN: A ELPD1484N VS. THE INCOME TAX OFFICER , WARD - 1( 2 ) , NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 19 . 0 7 .201 6 / DATE OF PRONOUNCEMENT: 22 . 0 7 .201 6 / ORDER PER SUSHMA CHOWLA , J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , NASHIK , DATED 1 8 . 11 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 14 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEALS) - I, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.18,15,622/ - MADE BY THE AO ON ACCOUNT OF CONFIRMING THE ADDITION OF RS.18,15,622/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CR EDIT. ITA NO. 107 /PN/20 1 5 KISHORKUMAR SHRIDHAR DIXIT 2 2 . ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEALS) - I, NASHIK IS NOT JUSTIFIED IN HOLDING THAT INCOME TAX PARTICULARS OF THE WIFE OF THE APPELLANT AS CONCOCTED THAT INCOME TAX PARTICULARS OF THE WIFE OF THE APPELLANT AS CONCOCTED PARTICULARLY WHEN SHE IS REGULARLY ASS ESSED TO INCOME TAX. 3 . ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEALS) - I, NASHIK IS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT WAS NOT IN A FINANCIAL POSITION TO GIVE ADVANCES TO VARIOUS PERSONS WHEN TH E SAID ADVANCES WERE GIVEN FROM THE BANK ACCOUNTS OF THE APPELLANT AND MORE PARTICULARLY WHEN THE PARTIES HAVE CONFIRMED OF HAVING RECEIVED THE ADVANCES FROM THE APPELLANT AND REPAYMENT THEREOF TO THE APPELLANT. 4 . THE COMMISSIONER OF INCOME TAX, (APPEALS) - I, NASHIK WHILE CONFIRMING THE ADDITION MADE BY THE A.O. IS NOT JUSTIFIED IN RELYING ON THE STATEMENT OF THE APPELLANT RECORDED ON 18.01.2013 SUBSEQUENT TO THE ASSESSMENT ORDER APPELLANT RECORDED ON 18.01.2013 SUBSEQUENT TO THE ASSESSMENT ORDER DATED 26.11.2014 PARTICULARLY WHEN THE SAID STATEMENT WAS RECORDED IN DIFFERENT CONTEXT. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS. 18,15,622/ - MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE IS AN INDIVIDUAL AND PERFORMING RELIGIOUS CERONOMY, JYOTISHI BH ANDAR & RESALE OF HAAR POOJA MATERIAL . FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,93,777/ - . THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD MAINTA INED BANK ACCOUNTS WITH HDFC AND AXIS BANK JOINTLY WITH HIS WIFE. THE ASSESSEE WAS ASKED TO EXPLAIN THE CASH DEPOSIT OF RS.20,06,760/ - IN AXIS BANK ACCOUNT AND RS.25,65,030/ - IN HDFC BANK ACCOUNT. THE ASSESSEE HAD ALSO MADE OTHER DEPOSITS TOTALING RS.1,6 9,358/ - IN BOTH THE BANK ACCOUNTS. THE ASSESSEE CROSS VERIFIED THE BANK STATEMENTS AND CONSIDER ED THE WITHDRAWALS ONLY OF RS.12,76,667/ - IN AXIS BANK AND RS.7,40,691/ - IN HDFC BANK, WERE NOT CONSIDERED IN THE RETURN OF INCOME FILED BY THE ASSESSEE AND HIS WIFE. THE ASSESSEE HAD DECLARED RECEIPT OF RS. 5,25,580/ - AND THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE DIFFERENTIAL AMOUNT OF RS. 39,61,538/ - SHOULD NOT BE ADDED EXPLAIN AS TO WHY THE DIFFERENTIAL AMOUNT OF RS. 39,61,538/ - SHOULD NOT BE ADDED ITA NO. 107 /PN/20 1 5 KISHORKUMAR SHRIDHAR DIXIT 3 IN HIS HANDS AS INCOME FROM BUSINESS / PROFESSION. IN REPLY, THE ASSESSEE CLAIMED THAT PART OF THE DEPOSITS WAS ON ACCOUNT OF REIMBURSEMENT OF EXPENSES AND THE SAME WERE NOT CONSIDERED IN THE RETURN OF INCOME. THE ASSESSING OFFICER ALLOWED 10% OF THE SAID DEPOSITS AS EXPENDITURE OUT OF RS.20,17,358/ - AND THE BALANCE CASH DEPOSITS OF RS.18, 15,622/ - WAS ADDED AS INCOME OF THE ASSESSEE. 5. BEFORE THE CIT(A), THE ASSESSEE FILED WRITTEN SUBMISSIONS WHICH ARE REPRODUCED UNDER PARA 6 AT PAGES 2 TO 5 OF THE APPELLATE ORDER. THE ASSESSEE CLAIMED THAT IT HAD WITHDRAWN THE AMOUNTS ON DIFFERENT DATES FROM AXIS BANK AND HAD DEPOSITED THE SAME IN HDFC BANK AND VICE VERSA. THE CIT(A) NOTED THE STATEMENT OF ASSESSEE RECORDED BY THE ASSESSING OFFICER UNDER SECTION 131 OF THE ACT ON 18.01.2013 I.E. DURING THE COURSE OF REMAND PROCEEDINGS, WHEREIN HE STATED THAT HE HAS NO MOVABLE OR IMMOVABLE PROPERTY IN HIS NAME OR IN THE NAMES OF OTHER FAMILY MEMBERS. HE FURTHER POINTED OUT THAT ITP REPRESENTING HIM BEFORE THE LOWER AUTHORITIES, HA D MIS - HANDLED THE MATTER AND HAD NOT FURNISHED COMPLETE INFORMATION. HE FU RTHER POINTED OUT THAT SHRI SANTOSH BHASKAR JAMDHADE WAS GIVEN RS.80,000/ - FOR FILING THE APPEAL AGAINST THE ORDER OF ASSESSING OFFICER, WHICH WAS NOT DONE BY HIM, BUT HE GAVE A COPY OF CHALLAN DATED 02.02.2012 FOR RS.80,000/ - STATED TO BE PAID TO THE INCO ME TAX ELECTRONICALLY AND COPY OF THE REASSESSMENT ORDER DATED 29.03.2012 SHOWING DEMAND OF RS.30,204/ - WAS GIVEN BY HIM. THE ASSESSEE ASKED THE ASSESSING OFFICER TO TAKE NECESSARY ACTION IN THE MATTER. THE CIT(A) HOWEVER, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER HOLDING THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THE SOURCES OF CASH DEPOSITS AMOUNTING TO RS. 18,15,622/ - . 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO. 107 /PN/20 1 5 KISHORKUMAR SHRIDHAR DIXIT 4 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINT ED OUT THAT THE APPEAL BEFORE THE CIT(A) WAS FILED LATE BY 360 DAYS, AGAINST WHICH A LETTER OF CONDONATION OF DELAY IN FILING THE APPEAL WAS FILED AND THE DELAY WAS CONDONED BY THE CIT(A). ATTENTION WAS DRAWN TO THE PRAYER MADE BEFORE THE CIT(A) VIS - - VIS FACTUAL ASPECTS OF THE CASE, WHEREIN THE ITP REPRESENTING THE ASSESSEE MIS - GUIDED THE ASSESSEE. AFTER THE ASSESSMENT ORDER WAS PASSED, HE ALSO GAVE A COPY OF BOGUS REASSESSMENT ORDER TO THE ASSESSEE, WHICH WAS SHOWN TO BE PASSED ON 29.03.2012. FOR THE P URPOSE OF SAID REASSESSMENT AND FILING OF THE APPEAL, THE ASSESSEE CLAIMS THAT HE PAID RS.80,000/ - TO THE ITP AS DEMANDED BY HIM FOR PAYMENT OF REQUISITE FEES FOR FILING OF THE APPEAL AND REASSESSMENT APPLICATION, ETC. HOWEVER, THE SAID ITP GAVE THE ASSES SEE A FALSE CHALLAN OF PAYMENT OF TAX OF RS.80,000/ - INTO GOVERNMENT TREASURY. THEREAFTER, THE ASSESSING OFFICER ISSUED A LETTER SHOWING THE ARREARS OUTSTANDING AGAINST THE ASSESSEE AND ACTUAL FACTS OF THE ASSESSMENT CAME TO THE KNOWLEDGE OF THE ASSESSEE. THE ASSESSEE HAS REQUESTED ACCORDINGLY THAT THERE WAS DELAY OF APPROXIMATELY ONE YEAR IN FILING THE APPEAL BEFORE THE CIT(A) AND AN APPLICATION WAS MADE FOR CONDONATION OF THE SAME. THE ASSESSEE ALSO FILED AN EXPLANATION ABOUT THE SOURCES OF CASH ENTRIE S IN BOTH THE BANK ACCOUNTS. THE EXPLANATION FILED BY THE ASSESSEE IS PLACED AT PAGES 12 TO 21 OF THE PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY STRESSED THAT WHERE THE ITP HAS FAILED IN HIS CONDUCT, THE PRINCIPLES OF N ATURAL JUSTICE DEMANDS THAT THE MATTER SHOULD BE LOOKED INTO BY THE ASSESSING OFFICER IN ORDER TO ADJUDICATE THE ISSUE, AFTER CONSIDERING THE EVIDENCES AVAILABLE WITH THE ASSESSEE. ITA NO. 107 /PN/20 1 5 KISHORKUMAR SHRIDHAR DIXIT 5 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HA ND, STRONGLY OBJECTED TO THE SUBMISSIONS MADE BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND POINTED OUT THAT WHERE SUFFICIENT OPPORTUNITY HAS BEEN GIVEN BY THE ASSESSING OFFICER, THERE IS NO MERIT IN SETTING ASIDE THE ISSUE. 9. ON PERUSAL OF RECORD AND THE PAPER BOOK FILED BY THE ASSESSEE AND AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, THE ISSUE ARISING IN THE PRESENT APPEAL NEEDS TO BE CONSIDERED IN THE TOTALITY OF THE FACTS OF THE CASE. THE ASSESSEE IS AGGRIEVED BY THE ORD ERS OF AUTHORITIES BELOW IN MAKING AN ADDITION OF RS.18,15,622/ - ON ACCOUNT OF UNEXPLAINED CASH CREDITS. THE ASSESSEE WAS MAINTAINING TWO BANK ACCOUNTS; ONE WITH AXIS BANK AND SECOND ONE WITH HDFC BANK AND THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF CASH DEPOSITS IN THE SAID BANK ACCOUNTS. THE ASSESSEE CLAIMS THAT IT HAD COMPILED THE WHOLE INFORMATION, BUT THERE WAS MISHANDLING OF THE CASE BY THE ITP, WHO WAS REPRESENTING THE ASSESSEE BEFORE THE ASSESSING OFFICER. FURTHER, THE SAID ITP HAS ALSO HAND ED OVER REASSESSMENT ORDER PASSED IN THE CASE DATED 29.03.2012, COPY OF WHICH IS PLACED AT PAGES 3 AND 4 OF THE PAPER BOOK. HE ALSO GAVE A CHALLAN FOR RS.80,000/ - TO THE ASSESSEE CLAIMING THAT THE SAID AMOUNT WAS DEPOSITED IN THE TREASURY ON ASSESSEES BE HALF. HOWEVER, NO SUCH DEPOSIT WAS MADE BY THE SAID ITP. BOTH THE REASSESSMENT ORDER PASSED AND THE CHALLAN SO ISSUED WE RE BOGUS AND CONCOCTED BY THE ITP. THE ASSESSEE CLAIMED THAT AFTER HE RECEIVED THE NOTICE FOR PAYMENT OF DEMAND IN ARREARS , WHOLE FAC TS CAME TO HIS KNOWLEDGE. THESE FACTS WERE PUT BEFORE THE CIT(A) ALONG WITH AN APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL LATE BEFORE THE CIT(A). DURING THE COURSE OF RECOVERY PROCEEDINGS, STATEMENT OF ASSESSEE WAS RECORDED UNDER SECTION 1 31 OF THE ACT ON 18.01.2013, COPY OF ITA NO. 107 /PN/20 1 5 KISHORKUMAR SHRIDHAR DIXIT 6 WHICH IS PLACED AT PAGES 7 AND 8 OF THE PAPER BOOK, IN WHICH THE ASSESSEE EXPLAINED THE SEQUENCE OF EVENTS AND THE MISHANDLING BY ITP. THE ASSESSEE A LSO CLAIMS THAT IT HAD FILED THE EXPLANATION OF SOURCE OF CASH DEPOSI TS IN THE BANK ACCOUNTS, WHICH WERE MADE OUT OF WITHDRAWALS FROM ONE BANK ACCOUNT AND ITS DEPOSITS IN THE OTHER BANK ACCOUNT. THE COPY OF THE SAID EXPLANATION IS PLACED ON RECORD AT PAGES 13 TO 21 OF THE PAPER BOOK. THE CIT(A) THOUGH CONDONED THE DELAY I N FILING THE APPEAL LATE BY 360 DAYS, BUT DID NOT TAKE INTO CONSIDERATION THE EXPLANATION FILED BY THE ASSESSEE. ON THE ONE HAND, WHEN THE CIT(A) HAS ACCEPTED THE EXPLANATION OF ASSESSEE THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE ASSESSEE WAS PREVENTED FROM FILING THE APPEAL IN TIME BEFORE THE CIT(A), THE CIT(A) HELD THAT THERE WAS MERIT IN THE CLAIM OF ASSESSEE IN THIS REGARD AND THE DELAY WAS THUS, CONDONED . B UT SIMULTANEOUSLY, ON THE OTHER HAND, BECAUSE OF MISHANDLING BY THE IT P OF THE ASSESSEE BEFORE THE ASSESSING OFFICER, COMPLETE INFORMATION COULD NOT BE FILED. IN THIS REGARD, THE ASSESSEE HAS COMPILED THE DATA AND HAS PLACED IT ON RECORD BEFORE THE CIT(A), COPY OF WHICH IS ALSO PLACED ON RECORD IN THE PAPER BOOK FILED BEFOR E THE TRIBUNAL. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, ADMITTEDLY, THERE WAS MISHANDLING BY THE ITP BEFORE THE ASSESSING OFFICER. IN VIEW OF PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, IT IS NECESSARY THAT THE ASSESSEE SHOULD BE ALLOWED AN OPPORTUNITY TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNTS. THUS, THE MATTER IS REMANDED BACK TO THE FILE OF ASSESSING OFFICER TO CONSIDER THE EXPLANATION OF THE ASSESSEE IN THIS REGARD. THE ASSESSEE IS DIRECTED TO JUSTIFY HIS CLAIM WITH NECESSARY EVIDENCES AND THE ENTRIES IN THE RESPECTIVE BANK ACCOUNTS. THE ASSESSING OFFICER SHALL AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THE ISSUE AFTER CONSIDERING THE EXPLA NATION OF ASSESSEE AND IN ACCORDANCE WITH LAW. THE ITA NO. 107 /PN/20 1 5 KISHORKUMAR SHRIDHAR DIXIT 7 GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 1 0 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 22 ND DAY OF J U LY , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 22 ND JU LY , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDEN T; 2. / THE RESPONDEN T; 3. ( ) / THE CIT(A) - I , NASHIK ; 4. / THE CIT - 1 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE