C.Mithalal , Hospet V. The Income Tax Officer Ward-1 , Hospet

ITA 123/BANG/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3031 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 22-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: V. SRINIVASAN
• Keywords: Principle of natural justice; Additional evidence; TDS
• Section: 143(3); 201; 69A

Judgement Text

ITA NO.123/BANG/2020 C. MITHALAL, HOSPET IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.123/BANG/2019 ASSESSMENT YEAR : 2015-16 C. MITHALAL PROP: PRIYANKA AGENCIES 5 TH CROSS DAM ROAD N.C. COLONY HOSPET 583 201 PAN NO : AEYPM3530M VS. THE ITO WARD-1 HOSPET APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN A.R. RESPONDENT BY : SHRI PRIYADARSHI MISHRA, D.R. DATE OF HEARING : 15.06.2021 DATE OF PRONOUNCEMENT : 18.06.2021 O R D E R PER GEORGE GEORGE K., JUDICIAL MEMBER: THIS APPEAL AT THE INSTANCE OF ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 14.12.2018. THE RELEVANT ASS ESSMENT YEAR 2015-16. 2. THE SOLITARY ISSUE RAISED IS WHETHER THE CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE A.O. U/S 69A OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT], AMOUNTING TO RS.1,6 9,57,000/-. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS. THE ASS ESSEE IS AN INDIVIDUAL HAVING INCOME FROM HOUSE PROPERTY, BUSIN ESS & PROFESSION ITA NO.123/BANG/2020 C. MITHALAL, HOSPET PAGE 2 OF 6 AND OTHER SOURCES. FOR THE ASSESSMENT YEAR 2015-16 , RETURN OF INCOME WAS FILED ON 16.12.2016, DECLARING TOTAL INC OME OF RS.9,76,060/-. THE ASSESSMENT WAS SELECTED FOR LIM ITED SCRUTINY TO EXPLAIN THE SOURCE OF CASH DEPOSIT AMOUNTING TO RS. 1,69,57,000/-. THE ASSESSEE SUBMITTED THAT CASH DEPOSITS ARE OUT O F TRANSPORT BUSINESS. THE SUBMISSION/REPLY OF THE ASSESSEE REA DS AS FOLLOWS: PRIYANKA AGENCIES IS A PROPRIETORSHIP CONCERN MITH ALAL C IS THE PROPRIETOR HAVING A C&F AGENCIES OF APPOLLO TYRES S UPPLY THE TYRES AND PRIYANKA AGENCY MAKE THE DISTRIBUTION IN AND AR OUND HOSPET. THE APPOLLO COMPANY PROVIDES COMMISSION ON THE SALES AN D ALSO PAY THE FREIGHT CHARGES FOR DELIVERING TO RETAIL OUTLETS. ALL THE TRANSACTIONS ARE PAID THROUGH BANKS AND TDS IS DEDUCTED ON THE SAME. DURING THE FY 2014-15, WE HAVE ALSO PURCHASED LORRIES TO TRANSPOR T CONTRACTORS AND INDUSTRIES ON TRIP BASIS. THE LORRIES USED TO GO T O THE MINE HEAD AND UNLOAD AT THE POINT SPECIFIED BY OUR CONTRACTEE AND OBTAIN ACKNOWLEDGEMENT SLIP AND LR COPIES THE SAME WAS SUR RENDERED ALONG WITH ACKNOWLEDGEMENT OF UNLOADING AT THE TIME OF TA KING THE PAYMENTS. NORMALLY THE PAYMENTS WERE MADE IN CASH ON TRIP BAS IS. THE CASH PAYMENTS ARE RECEIVED IN TRANSPORT BUSINESS AND I A LSO LIKE TO BRING TO YOUR KIND NOTICE THAT LORRY DRIVERS AND HELPERS ARE UNEDUCATED. THE SAME CASH WAS DEPOSITS IN THE BANK ACCOUNTS. SO OU R BANK ACCOUNTS ARE REFLECTED WITH CASH DEPOSITS. 4. THE A.O. NOTED THAT ASSESSEE DID NOT FILE SUPPOR TING DOCUMENTS TO EXPLAIN THE SOURCE OF CASH DEPOSIT. FURTHER, A. O. NOTED THAT IF CASH DEPOSITS ARE OUT OF TRANSPORT BUSINESS, THEY OUGHT TO BE CORRESPONDING WITHDRAWALS FROM BANK ACCOUNTS, WHICH ACCORDING TO THE A.O. WAS ABSENT IN THIS CASE. THE HEARING OF TH E CASE WAS POSTED TO 16.12.2017 DIRECTING THE ASSESSEE TO FURNISH THE NECESSARY DETAILS. SINCE ASSESSEE DID NOT FILE THE NECESSARY DETAILS E XPLAINING THE SOURCE OF CASH DEPOSIT, THE CASE WAS ADJOURNED TO 29.12.20 17. FOR HEARING ON 29.12.2017, THE ASSESSEE SOUGHT ADDITIONAL TIME TO FILE THE NECESSARY DETAILS. SINCE THE ASSESSMENT WAS GETTIN G TIME BARRED, THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 29.12.2017. THE A.O. MADE THE ENTIRE ADDITION OF C ASH DEPOSIT U/S 69A OF THE ACT AMOUNTING TO RS.1,69,57,000/-. ITA NO.123/BANG/2020 C. MITHALAL, HOSPET PAGE 3 OF 6 5. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE ASSES SEE FILED WRITTEN SUBMISSION AND SUPPORTING DOCUMENTS/EVIDENCE WITH R EGARD TO THE SOURCE OF CASH DEPOSIT. THE SUBMISSIONS OF THE ASS ESSEE ARE REPRODUCED AT PARA 4.2 OF THE IMPUGNED ORDER OF THE CIT(A). THE CIT(A) CALLED FOR A REMAND REPORT FROM THE A.O. TH E A.O. FILED HIS REMAND REPORT DATED 17.7.2018. ON RECEIPT OF THE R EMAND REPORT, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITH TH E FOLLOWING OBSERVATIONS AS PER PARA 4.4.1 OF HIS ORDER:- 4.4.1 THE APPELLANT HAS NEITHER PRODUCED ANY EVID ENCE OF OWNERSHIP OF VEHICLE (LORRIES) NOR THE RETURN OF IN COME FILED BY THE APPELLANT REFLECTS INCOME DECLARATION U/S 44AE OF T HE IT ACT 1961. FURTHER, THE EXPLANATION GIVEN BY THE APPELLANT IN RESPECT OF CASH TRANSPORTATION RECEIPTS AND THE CREDITS IN THE BANK ACCOUNTS IN CHAMRAJNAGAR BANGALORE ARE CONTRADICTORY AND DOES N OT PROVE THAT SUCH CREDITS WERE OUT OF TRANSPORTATION RECEIPTS. THE TRIP WISE DETAILS SUBMITTED BEFORE ME CANNOT BE VERIFIED AND CONFIRME D. IN ADDITION TO ABOVE, THE REMAND REPORT RECEIVED FROM THE ITO WARD 1 HOSPET HAS NOT ACCEPTED THE EXPLANATION OF THE APPELLANT AND REITE RATED THE ADDITIONS MADE U/S 69A. I AM IN AGREEMENT WITH THE OBSERVATI ONS OF THE ASSESSING OFFICER. IN LIGHT OF THE ABOVE THE ASSESSEE GROUND NOS.1, 2 & 3 ARE DISMISSED AND THE ADDITION IS SUSTAINED 6. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE H AS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LD. A.R. S UBMITTED THAT BOTH A.O. AND CIT(A) FAILED TO APPRECIATE THAT ASSESSEE IS THE OWNER OF 4 TRUCKS AND WAS DOING TRANSPORTATION BUSINESS. IT W AS SUBMITTED THAT CASH DEPOSITS IN THE BANK ACCOUNTS WERE MADE OUT OF TRANSPORT RECEIPTS. IT WAS STATED THAT ASSESSEE HAD DECLARED INCOME FROM TRANSPORT RECEIPTS U/S 44AE OF THE ACT. THE NECESS ARY EVIDENCE COULD NOT BE FURNISHED BEFORE THE A.O. DUE TO PAUCITY OF TIME GRANTED BY THE A.O. IT WAS STATED THAT THE A.O. FURNISHED THE REMAND REPORT WITHOUT VERIFYING THE ADDITIONAL EVIDENCE PRODUCED BEFORE THE CIT(A) AND WITHOUT PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE TO SUBSTANTIATE HIS CASE. IT WAS PRAYED THAT THE PRIN CIPLE OF NATURAL JUSTICE IS VIOLATED IN THIS CASE, THEREFORE FOR A P ROPER APPRECIATION OF ITA NO.123/BANG/2020 C. MITHALAL, HOSPET PAGE 4 OF 6 EVIDENCE, WHICH IS ON RECORD, MATTER MAY BE REMANDE D TO THE A.O. FOR DE-NOVO CONSIDERATION. 7. THE LD. D.R. SUPPORTED THE ORDER OF THE A.O. AND THE CIT(A). 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE INSTANT CASE ASSESSMENT WAS SELECTE D FOR LIMITED SCRUTINY FOR VERIFICATION OF CASH DEPOSITS MADE INT O SAVINGS BANK ACCOUNT NO.40042010073306 WITH THE SYNDICATE BANK. IT WAS SUBMITTED BEFORE THE A.O. THAT SOURCE OF CASH DEPOS ITS MADE INTO THE SAID BANK ACCOUNT ARE MAINLY OUT OF TRANSPORT BUSIN ESS RECEIPTS. IT WAS STATED THAT INCOME FROM TRANSPORT BUSINESS WAS DECLARED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 44AE OF T HE ACT AND SINCE NO REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED IN RES PECT OF THE SAID TRANSPORT BUSINESS, ASSESSEE HAD SOUGHT SOME MORE T IME TO FURNISH THE DETAILS CALLED FOR BY FILING A LETTER DATED 28. 12.2017. HOWEVER, THE A.O. CONCLUDED THE ASSESSMENT PROCEEDINGS ON 29 .12.2017 BY ADDING THE AGGREGATE CASH DEPOSIT OF RS.1,69,57,000 /- MADE INTO THE SAID BANK ACCOUNT ON VARIOUS DATES. 9. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE ADD ITIONS MADE U/S 69A OF THE ACT WAS MADE MERELY BECAUSE ASSESSEE COULD NOT FURNISH THE NECESSARY DETAILS AS REQUIRED BY THE A. O. BEFORE THE APPELLATE PROCEEDINGS, ASSESSEE HAD FILED ADDITIONA L EVIDENCE. THE SUMMARY OF MONTH-WISE TRANSPORT RECEIPTS RECONCILIN G WITH THE AMOUNTS DEPOSITED INTO THE BANK ACCOUNT AND THE TRI P-WISE DETAILS OF TRANSPORTATION WERE ALSO FURNISHED. THE CIT(A) CAL LED FOR A REMAND REPORT. THE A.O. SUBMITTED HIS REMAND REPORT DATED 17.7.2018 WITHOUT VERIFYING THE ADDITIONAL EVIDENCE PRODUCED AND WITHOUT GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE TO SUBSTANTIATE HIS CASE. THE A.O. HAS NOT GIVEN ANY ADVERSE FINDINGS AGAINST THE FRESH DETAILS AND EVIDENCE FURNISHED DURING THE APPELLATE PROCEEDINGS. ITA NO.123/BANG/2020 C. MITHALAL, HOSPET PAGE 5 OF 6 10. WE ARE OF THE VIEW THAT IN FACTS AND CIRCUMSTAN CES OF THE CASE THE ASSESSEE HAS NOT BEEN GIVEN A PROPER OPPORTUNIT Y TO EXPLAIN THE SOURCE OF CASH DEPOSIT. BEFORE THE A.O., THE ASSES SMENT PROCEEDINGS WERE GETTING TIME BARRED AND ONLY TWO HEARINGS WERE GIVEN TO THE ASSESSEE TO FURNISH THE NECESSARY DETAILS. BEFORE THE CIT(A), NECESSARY DETAILS EXPLAINING THE SOURCE OF CASH DEP OSITS WERE PLACED ON RECORD. THE CIT(A) CALLED FOR A REMAND REPORT F ROM THE A.O. THE A.O. FURNISHED THE REMAND REPORT WITHOUT CONSIDERIN G THE ADDITIONAL EVIDENCE PLACED BEFORE THE CIT(A). THE A.O. ALSO D ID NOT PROVIDE AN OPPORTUNITY OF HEARING TO THE ASSESSEE TO SUBSTANTI ATE HIS CASE. THEREFORE, GIVEN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE MATTER NEEDS TO BE CONSIDERED AFRESH BY THE A.O. THE A.O. SHALL CONSIDER THE EVIDENCE PLACED BY THE ASSESSEE BEFORE THE CIT( A) TO DETERMINE THE SOURCE OF CASH DEPOSIT, WHETHER IT IS GENUINE O R NOT. (THE A.O. SHALL ALSO EXAMINE WHETHER ASSESSEE HAS DISCLOSED A NY INCOME U/S 44AE OF THE ACT FOR THE RELEVANT PERIOD). THE A.O. SHALL AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL COOPERATE WITH THE REVENUE AND SHALL NOT SEEK UNNECESSARY ADJOURNMENT. IT IS ORDERED ACCORDINGLY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JUNE, 2021 SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER BANGALORE, DATED 18 TH JUNE, 2021. VG/SPS ITA NO.123/BANG/2020 C. MITHALAL, HOSPET PAGE 6 OF 6 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.