Deepak P. matale, Nashik V. Income-tax Officer,

ITA 1261/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1622 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT DUA
• Keywords: Business income; Principle of natural justice
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM / ITA NO.1261/PN/2015 ! ' ' / ASSESSMENT YEAR : 2009-10 DEEPAK P. MATALE, SHIVPRABHA, ANAND NAGAR, KAMATHWADE, ITI DGP LINK ROAD, NASHIK 422 013 . / APPELLANT PAN: AHOPM7171M VS. THE INCOME TAX OFFICER, WARD 1(4), NASHIK . RESPONDENT / APPELLANT BY : SHRI KISHOR PHADKE / RESPONDENT BY : SHRI AMIT DUA DATE OF HEARING : 30.06.2016 / DATE OF PRONOUNCEMENT: 30.06.2016 # / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-I, NASHIK, DATED 11.08.2015 RELATING TO ASSESSMENT YEA R 2009-10 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE INCOM E-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1) THE LEARNED AO HAS ERRED IN TREATING CASH DEPOS ITS IN BANK AS SALES/TURNOVER WHICH IS AGAINST THE NATURAL JUSTICE WHICH MAY PLEASE BE DELETED. ITA NO.1261/PN/2015 2 2) THE AO HAS ERRED IN TREATING SALES OF SHARES IN INCOME FROM BUSINESS WHICH IS AGAINST NATURAL JUSTICE WHICH MAY PLEASE B E DELETED. 3) THE AO HAS ISSUED NOTICE U/S 271(1)(C) WHICH IS WRONG AND THERE IS NO CONCEALMENT OF INCOME WHICH MAY PLEASE BE DELETED. 4) I CRAVE LIBERTY TO ADD, ALTER, OR AMEND ANY GRO UND/GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. THE ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS AGAINST THE ESTIMATION OF INCOME IN ITS HANDS BY THE ASSESSING OFFICER WHICH, IN TURN, HAS BEEN CONFIRMED BY THE CIT(A). 4. BRIEFLY, IN THE FACTS OF THE CASE, THE CIT(A) BY INVOKING THE POWERS UNDER SECTION 263 OF THE ACT HAD SET-ASIDE THE ORIGINAL A SSESSMENT MADE IN THE CASE OF THE ASSESSEE WITH THE DIRECTIONS THAT THE ASSESS MENT SHOULD BE FRAMED AFRESH BY THE ASSESSING OFFICER AFTER PROPER ENQUIR IES ON ACCOUNT OF CASH DEPOSITS IN VARIOUS BANK ACCOUNTS. THE ASSESSEE WA S OPERATING FOUR BANK ACCOUNTS AND THE TOTAL CASH DEPOSITS IN THE SAID BA NK ACCOUNTS AMOUNTED TO RS.1,02,90,386/-. THE ASSESSING OFFICER PURSUANT T O THE DIRECTIONS OF THE COMMISSIONER OF INCOME TAX I, NASHIK ASKED THE AS SESSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS IN THE VARIOUS BANK ACC OUNTS. THE EXPLANATION OF THE ASSESSEE WAS CONSIDERED BY THE ASSESSING OFFICE R UNDER PARA 3.1 TO 3.4. THE ASSESSING OFFICER, HOWEVER, COMPUTED THE ADDITI ONAL INCOME IN THE HANDS OF THE ASSESSEE BY ADOPTING THE TOTAL RECEIPTS OF T HE BANK ACCOUNTS AND RECEIPTS FROM BUSINESS OF THE ASSESSEE. THE ASSESS ING OFFICER UNDER PARA 3.3 HAD COMPUTED THE EXCESS RECEIPTS IN THE HANDS OF TH E ASSESSEE AS UNDER :- TOTAL RECEIPTS IN ALL BANKS ACCOUNTS RS. 1,02,90,386/- LESS: OPENING BALANCE OF CASH RS.4,45,850/- CHEQUES CREDITED BUT DISHONORED RS.12,50, 000/- RS.16,95,850/- GROSS INCOME RS.85,94,536/- LESS: GROSS INCOME SHOWN IN RETURN OF INCOME RS.38 ,45,000/- EXCESS RECEIPTS RS.47,49,536/- 5. THE CIT(A) HAS ACCEPTED THE ADDITION MADE BY THE ASSESSING OFFICER, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.1261/PN/2015 3 6. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE BEFORE US POINTED OUT THAT IT HAD FILED A CASH BOOK FOR THE PERIOD 01 .04.2008 TO 31.03.2009 BEFORE THE ASSESSING OFFICER AND THE CIT(A) IN WHICH IT HA D TABULATED THE DETAILS OF DEPOSITS IN THE VARIOUS BANK ACCOUNTS AND ALSO THE WITHDRAWALS BY WAY OF CASH WITHDRAWALS AND/OR FOR EXPENSES. SOME OF THE DEPOS ITS IN THE BANK ACCOUNTS WERE ON ACCOUNT OF EARLIER CASH WITHDRAWALS MADE FR OM DIFFERENT BANK ACCOUNTS AND ON RECONCILIATION, TOTAL BUSINESS RECEIPTS WOUL D BE LESS THAN AS COMPUTED BY THE ASSESSING OFFICER AND CIT(A). THE LD. AUTHO RIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE SAID STATEMENT WHICH HAS BEEN FILED BY THE ASSESSEE HAS NOT BEEN CONSIDERED BY THE ASSESSING O FFICER AND THE CIT(A) BEFORE MAKING THE AFORESAID ADDITION. HE, IN THIS REGARD, POINTED OUT THAT THE PRINCIPLES OF NATURAL JUSTICE DEMAND THAT THE SAID EXERCISE CARRIED OUT BY THE ASSESSEE SHOULD BE VERIFIED BY THE ASSESSING OFFICE R BEFORE COMING TO THE CONCLUSION AS TO WHETHER THE ASSESSEE HAS RECEIVED ADDITIONAL RECEIPTS OR NOT. 7. ON VERIFICATION OF RECORD AND THE EVIDENCES FILE D BY THE ASSESSEE AND THE COPY OF CASH BOOK PLACED ON RECORD, I FIND THAT THE PRINCIPLES OF NATURAL JUSTICE DEMAND THAT THE EVIDENCE FILED BY THE ASSESSEE NEED TO BE LOOKED INTO BEFORE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER HAS ONLY CONSIDERED THE RECEIPTS AND HAS HELD THE A DDITIONAL RECEIPTS TO BE INCOME OF THE ASSESSEE AND HAS NOT EVEN GIVEN ANY D EDUCTION ON ACCOUNT OF EXPENSES AGAINST THE SAID RECEIPTS. IN VIEW THEREO F, THE ISSUE IS SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTIONS T O VERIFY THE CLAIM OF THE ASSESSEE AFTER GOING THROUGH THE CASH BOOK PREPARED BY THE ASSESSEE IN RESPECT OF ALL THE BANK ACCOUNTS MAINTAINED BY IT A ND AFTER VERIFYING THE CLAIM OF THE ASSESSEE VIS--VIS THE CASH WITHDRAWALS MADE BY HIM FROM THE RESPECTIVE BANK ACCOUNTS WHICH, IN TURN, HAVE BEEN DEPOSITED I N THE SAME OR ANY OTHER BANK ACCOUNT. THE ASSESSING OFFICER SHALL AFFORD R EASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE WHO, IN TURN, SHALL FURNISH THE NECESSARY DETAILS. THE ITA NO.1261/PN/2015 4 ASSESSING OFFICER SHALL ACCORDINGLY COMPUTE THE INC OME IN THE HANDS OF THE ASSESSEE IN ACCORDANCE WITH LAW. THE GROUNDS OF AP PEAL RAISED BY THE ASSESSEE ARE, THUS ALLOWED FOR STATISTICAL PURPOSES . 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2016. SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE, 2016 . ! #$%&'()(& / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ' ' # () THE CIT(A)-I, NASHIK; ' ' # THE CIT-I, NASHIK &'( ))*+, ' *+ , , - . // / DR SMC, ITAT, PUNE; (01 2 / GUARD FILE. #! / BY ORDER & ) // TRUE COPY // 345 )! *6 / SR. PRIVATE SECRETARY ' *+ , ITAT, PUNE