Pradeep Kumar Yadav, Varanasi V. ITO, Varanasi

ITA 116/ALLD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89813 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: UMESH PATHAK
• Assessee Lawyers: ARVIND SHUKLA
• Keywords: Business income; Peak credit; Tangible material
• Section: 80C; 147; 148; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI C. N. PRASAD, JUDICIAL MEMBER ITA NO. 116/ALLD/2014 ASSESSMENT YEARS: 2009-10 PRADEEM KUMAR YADAV D-35/100, JANGAMBARI, VARANASI PAN:ACGPY 6383 C VS. ITO WARD-2(1) VARANASI (APPELLANT) (RESPO NDENT) ASSESSEE BY : SHRI ARVIND SHUKLA REVENUE BY : SHRI UMESH PATHAK DATE OF HEARING : 21.04.2015 DATE OF PRONOUNCEMENT : 24.04.2015 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL BY THE ASSESSEE, AGAINST THE ORDER OF THE LD. CIT(A) VARANASI DATED 06.03.2014 FOR THE A.Y. 2009-10, THE GROUND OF THE APPEAL ARE REPRODUCED AS UNDER:- 1. BECAUSE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN DISMISSING THE APPEAL IN UTTER DISREGARDED TO THE FACTUAL AND LEGAL POSITION OF THE CASE. 2. BECAUSE THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) HAS FAILED TO APPRECIATE THAT THE ASSUMPTION OF JURISDI CTION SIMPLY ON THE BASIS OF EXISTENCE OF BANK ACCOUNT IS TOTALLY ILLEGAL AND UN JUSTIFIED BECAUSE THE MERE DEPOSIT IN BANK ACCOUNT DOES NOT GIVE RISE TO FORMA TION OF BELIEF OF ESCAPEMENT OF INCOME. 3. BECAUSE THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) HAS FAILED TO APPRECIATE THAT THE REASONS RECORDED FOR ASSUMPTION OF JURISDICTION U/S 147 WERE NEVER SUPPLIED TO THE ASSESSEE WHICH W AS IN UTTER VIOLATION TO THE SETTLED JUDICIAL NORMS AND A FATAL DEFECT WHICH MADE THE ORDER LIABLE TO BE QUASHED. 4. BECAUSE THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) HAS FAILED TO APPRECIATE THAT THE BANK DEPOSITS IN THE WHOLE YEAR WERE IN SMALL FIGURES WITH CORRESPONDING WITHDRAWALS SHOWING THE NATURE OF THE BUSINESS ITA NO. 116/ALLD/2014 ASSESSMENT YEARS: 2009-10 2 TRANSACTIONS AND THE TOTAL DEPOSITS WERE OF ONLY RS .10,01,300/- WHEREAS THE TURNOVER DISCLOSED WAS RS.15,16,120/- AND THUS THER E WAS NO BASIS TO PRESUME THAT THE BANK DEPOSITS WERE UNEXPLAINED. 5. BECAUSE THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) HAS ERRED IN MAKING INCORRECT AVERMENTS AND IGNORING VI TAL FACTS TO THE DETRIMENT OF THE ASSESSEE BY NOT APPRECIATING THE FACT THAT T HE BANK DEPOSITS IN SMALL AMOUNTS WERE OUT OF BUSINESS PROCEEDS. 6. BECAUSE THE HIGH PITCHED ASTRONOMICAL ASSESSMENT ORDER HAS BEEN FRAMED MORE WITH A THEORETICAL DISCUSSION WITHOUT P ROPER APPRECIATION OF ACTUAL FACTS AND PRESUMPTIONS HAVE BEEN DRAWN SIMPL Y ON CONJECTURES AND SURMISES TO THE ENTIRE EXCLUSION OF FACTS ON RECORD IGNORING THE DETAILED SUBMISSIONS BASED ON AUTHENTIC FACTS AND FIGURES. 7. BECAUSE THE DEDUCTION U/S 80C AMOUNTING TO RS.26 ,000/- HAS NOT BEEN ALLOWED WITHOUT ANY BASIS. 8. BECAUSE THE ORDER IS BAD IN LAW AS WELL AS ON FA CTS AND HENCE THE APPEAL DESERVED TO BE ALLOWED. 2. FROM THE ABOVE GROUNDS OF APPEAL THE LEGAL ISSUE THAT EMERGED RELATES TO THE VALIDITY OF THE DECISION OF THE AO IN INVOKING OF P ROVISIONS U/S 147 OF THE ACT. ASSESSEE ALSO AGGRIEVED AGAINST THE ADDITION OF RS. 3,08,046/- U/S 69 OF THE ACT AND FURTHER THE ASSESSEE PRAYS FOR GRANTING DEDUCTION O F RS.26,000/- U/S 80C OF THE ACT. 3. AT THE OUTSET, IN CONNECTION WITH THE LEGAL ISSU E ABOUT INVOKING THE PROVISION OF SECTION 147 OF THE ACT, LEARNED COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE IS ENGAGED IN RETAIL TRADING BUSINESS OF I RON AND FILED THE RETURN OF INCOME SOME OR RELIEF U/S 44AF OF THE ACT. ASSESSEE MAINTA INS SAVING BANK ACCOUNTS WITH THE ICICI BANK LTD AND SBI. THESE DETAILS WERE FURN ISHED ALONG WITH THE FINANCIAL STATEMENT IN THE SAID RETURN OF INCOME. THE ASSESSE E FILED THE RETURN OF INCOME ON 10.06.2009. SUBSEQUENTLY, BASED ON THE AIR INFORMAT ION RECEIVED BY THE ASSESSING OFFICER ABOUT CASH DEPOSITS IN THE SAID ACCOUNTED B ANK ACCOUNTS, THE AO ISSUED NOTICE U/S 148 R.W.S. 147 OF THE ACT ON 27.02.2012. EVENTUALLY, THE ASSESSING OFFICER MADE REASSESSMENT AND ANALYSED IMPUGNED BANK DEPOSI TS AND ARRIVED AT THE PEAK CREDIT BALANCE OF RS.3,08,046/-. THE SAID AMOUNT IS ADDED AS INCOME OF THE ASSESSEE U/S 69 OF THE ACT. ITA NO. 116/ALLD/2014 ASSESSMENT YEARS: 2009-10 3 4. IN THE FIRST APPELLATE PROCEEDINGS, ASSESSEE RAI SED THE ISSUE OF VALIDITY OF THE REASSESSMENT U/S 147/148 OF THE ACT. ASSESSEE SUBMI TTED THAT BASED ON THE AIR INFORMATION ABOUT ACCOUNTED BANK ACCOUNTS THE NOTIC E U/S 147/148 CANNOT BE ISSUED. IT IS ALSO RECORDED IN THE IMPUGNED ORDER T HAT THE REASONS FOR REOPENING WERE NOT FURNISHED TO THE ASSESSEE TILL DATE. ON CO NSIDERING THE ABOVE SUBMISSIONS OF THE ASSESSEE, LD. CIT(A) DISMISSED THE SUBMISSIO N OF THE ASSESSEE AND UPHELD THE VALIDITY OF THE REOPENING OF THE ASSESSMENT. AGGRIE VED WITH THE SAID DECISION OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAI SING THE VALIDITY OF THE REASSESSMENT VIDE GROUND NO. 3 OF APPEAL BEFORE US. 5. SHRI ARVIND SHUKLA LD. COUNSEL FOR THE ASSESSEE, BROUGHT OUR ATTENTION TO PAGE 9 OF THE PAPER BOOK AND SUBMITTED THAT THE SAM E CONSTITUTES THE COPY OF THE RETURN OF INCOME FILED BY THE ASSESSEE U/S 44AF OF THE ACT. HE ALSO BROUGHT OUR ATTENTION PAGE 11 AND MENTIONED THAT THE SAME RELAT ES TO THE DISCLOSURE OF THE IMPUGNED BANK ACCOUNTS, IN WHICH IMPUGNED CASH WAS DEPOSITED. FURTHER, LEARNED COUNSEL SUBMITTED WHEN THE ACCOUNTS ARE DISCLOSED, CASH DEPOSITS IN THE SAID ACCOUNT STANDS DISCLOSURE TOO. IN SUCH CIRCUMSTANCE S THERE IS NO SCOPE FOR ANY CONCEALMENT OF INCOME. FURTHER HE ALSO MENTIONED TH AT THE AO HAS NOT BROUGHT ANY INCRIMINATING MATERIAL TO SUGGEST THAT THE ASSESSEE IS NOT ENGAGED IN ABOUT REFERRED BUSINESS OF TRADING IN IRON. IN THAT CASE, THE CASH DEPOSITS RELATES TO THE BUSINESS INCOME OF THE ASSESSEE WHICH IS DISCLOSED TO THE DE PARTMENT. FURTHER, ALSO HE MENTIONED THAT AIR INFORMATION, WHICH IS DEBATABLE IN NATURE, DOES NOT GIVE AUTHORITY TO THE AO FOR CONDUCTING ROVING INQUIRIES U/S 147 OF THE ACT AND MAKE DEBATABLE ADDITIONS, WHICH MAY NOT BE SUSTAINABLE I N LAW. IN SUCH CIRCUMSTANCES, THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER U/S 147 IS BAD IN LAW. IT IS ALSO AN ADMITTED CASE THAT THE ASSESSING OFFICER FAILED TO PROVIDE THE REASONS FOR REOPENING AO TO THE ASSESSEE. 6. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED ON THE ORDER OF THE AO AND THE LD. CIT(A) [PARA 3] THAT WHICH RELATES TO REOPE NING U/S 148. 7. WE HAVE HEARD BOTH THE PARTIES ON THE LEGAL ISSU ES AND PERUSED THE ORDERS OF THE REVENUE ON THIS ISSUE. ADMITTEDLY AIR INFORMATI ON IS THE BASIS FOR ISSUE OF NOTICE U/S 147/148 OF THE ACT. AT THIS STAGE, ASSESSING OF FICER DO NOT HAVE ANY INFORMATION ITA NO. 116/ALLD/2014 ASSESSMENT YEARS: 2009-10 4 TO SUGGEST THAT ASSESSEE IS NOT ENGAGED IN ANY TRAD ING ACTIVITY IN IRON AND STEEL. IT IS THE FACT THAT THE ASSESSEE FILED THE RETURN OF INCO ME U/S 44AF OF THE ACT IN THE YEAR 10.06.2009 ALONG WITH THE PARTICULARS OF THE BANK A CCOUNTS WITH THE ICICI BANK LTD. AND SBI. THE AIR INFORMATION BASICALLY RELATES TO T HE SAID DISCLOSED BANK ACCOUNTS. ON THE ABOVE FACTS, WE FIND THE ISSUE OF NOTICE U/S 147 CANNOT BE HELD VALID. IT IS A SETTLED LEGAL PROPOSITION THAT THE ASSESSING OFFICE R CAN VALIDLY ASSUME JURISDICTION UNDER THE SAID SECTION BASED ON A TANGIBLE MATERIAL THAT WORKS AS A LIVE WIRE LEADING TO THE UNDERTAKING OF THE CONCEALED INCOME TO THE T AX. IN OUR OPINION, IN THE INSTANT CASE, THE AO HAS NOT MET THE ABOVE REQUIREMENTS OF LAW OR THE LEGAL PROPOSITIONS INFORCE. THEREFORE, WE ARE CONVINCED THAT THE NOTIC E ISSUED U/S 147/148 IS BAD-IN- LAW IN THIS CASE. ACCORDINGLY, GROUND NO. 1 TO 3 AR E DECIDED IN FAVOUR OF THE ASSESSEE. 8. CONSIDERING OUR OPINION ON LEGAL ISSUE, THE ADJU DICATION OF THE OTHER ISSUES RAISED IN THE GROUNDS NO. 4 TO 8, BECOMES ACADEMIC. ACCORDINGLY, THE SAID GROUNDS ARE DISMISSED ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF APRIL, 2015. SD/- SD/- (C. N. PRASAD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER ALLAHABAD, DATED: 24.04.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, ALLAHABAD THE CIT(A) CONCERNED, ALLAHABAD THE DR BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, ALLAHABAD.