ITO, Nashik V. Shri Ashok Haribhau Jadhav, Nashik

ITA 1335/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0879 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HITENDRA NINAWE
• Keywords: Business income; Principle of natural justice
• Section: 44AD; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1335/PN/2013 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD 1(3), NASHIK. . APPELLANT VS. SHRI ASHOK HARIBHAU JADHAV, HARISHCHANDRA NIVAS, ANANDWALLI, GANGAPUR ROAD, NASHIK 422 013. PAN : ABJPJ4297J . RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 05.11.2015 / DATE OF PRONOUNCEMENT: 10.11.2015 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINS T THE ORDER OF CIT(A)-I, NASHIK DATED 12.04.2013 RELATING TO ASSES SMENT YEAR 2009-10 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A)-I, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS .20,80,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK AS UNDISCLOSED IN COME. 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A)-I, NASHIK WAS JUSTIFIED IN NOT FORWARDING THE SUBMISSI ON MADE BY THE ASSESSEE BEFORE THE LD. CIT(A) AT THE APPEAL HEARING STAGES REGARDI NG CLAIMS THAT THE DETAILS/EVIDENCES OF THE SOURCES OF CASH DEPOSITS B EING OUT OF AGRICULTURAL INCOME FOR AO'S VIEWS, WHICH APPEARS TO BE VIOLATION OF RULE 4 6A. 2 ITA NO.1335/PN/2013` 3) THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A)-I, NASHIK MAY BE PLEASE BE CANCELLED AND THE ORDER OF ASSESSING OFFICER MAY PLEASE BE RESTORED. 4) THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY , AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCASION DEMANDS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E AN INDIVIDUAL IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR AND TRUCK PLYIN G. THE ASSESSEE HAS FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.2,06, 290/-, OUT OF WHICH RS.1,67,858/- IS IN RESPECT OF INCOME DECLARED @ 8% ON GROSS RECEIPTS OF RS.20,34,426/- UNDER SECTION 44AD OF THE ACT, RS.45 ,000/- IN RESPECT OF TRUCK PLYING UNDER SECTION 44AE OF THE ACT AND REST INCOM E FROM OTHER SOURCES. ON THE BASIS OF THE AIR INFORMATION, THE CASE WAS SELE CTED FOR SCRUTINY AND ADDITION WAS, INTER-ALIA , MADE AT RS.20,80,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT. 4. THE ACTION OF THE ASSESSING OFFICER WAS CHALLENG ED BY THE ASSESSEE IN APPEAL BEFORE THE CIT(A). THE CIT(A) DELETED THE A FORESAID ADDITION. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER :- 5.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. ON PERUSAL OF THE SAME, IT HAS BEEN OBSERVED THAT AN AMOUNT OF RS.20,80,000/- HAS BEEN DEPOSITED IN CASH IN BANK ACCOUNT WITH MAHANAGAR CO-OPERATIVE BANK, WHICH IS IN THE JOINT NAMES OF SMT. KESHARBAI I.E. THE MOTHER OF THE APPELLANT AND THE APPELLANT. THE A.O. HAS HELD THAT THE CASH DEPOSITED IN THE SAID JOINT BANK ACCOUNT IS UNDISCL OSED INCOME OF THE APPELLANT. THE A.O. HAS REJECTED THE CONTENTION OF THE APPELLANT T HAT THE CASH DEPOSITED WAS OUT OF SALE PROCEEDS OF AGRICULTURAL LANDS, AGRICULTURAL I NCOME AND GROSS BUSINESS RECEIPTS OF RS.26.35 LACS. THE CONTENTION OF THE APPELLANT A BOUT AGRICULTURAL INCOME FROM SALE OF GRAPES IS SUPPORTED BY THE 7/12 EXTRACTS OF THE AGRICULTURAL LAND BELONGING TO JADHAV FAMILY. FROM THE SAID 7/12 EXTRACTS, IT HAS BEEN NOTICED THAT THE APPELLANT HAS GROWN GRAPES OF 5 ACRES OF THE LAND SINCE LAST 7/8 YEARS. IT HAS ALSO BEEN NOTICED THAT IN NASHIK DISTRICT GRAPE IS CASH CROP AND AVERAGE AGRICULTURAL INCOME IS ABOUT RS. I LAC TO 1.60 LACS PER ACRE. IT IS ALS O KNOWN FACT THAT SEASON OF GRAPE SALE IS FEBRUARY TO APRIL AND PROCEEDS OF SALE ARE GENERALLY REALIZED IN FEBRUARY TO JUNE. IN VIEW OF THE ABOVE FACTS AND DISCUSSION THE SOURCE CLAIMED BY THE APPELLANT OF AGRICULTURAL INCOME AND SAVINGS OUT OF THE AGRIC ULTURAL INCOME HAS BEEN ACCEPTED. FURTHER, THE CLAIM OF THE APPELLANT THAT AN AMOUNT OF RS.3,50,000/-, HAS BEEN SOURCED OUT OF SALE PROCEEDS OF AGRICULTURAL L AND AT DEVERGAON GUT NO. 522 IS SUPPORTED BY COPY OF SALE DEED DATED 10/01/2005. FU RTHER THE A.O. HAS NOT CONSIDERED WITHDRAWALS FROM THE BANK ACCOUNT ON VAR IOUS DATES DURING THE YEAR UNDER APPEAL WHILE ARRIVING AT ALLEGED UNEXPLAINED CASH DEPOSITS IN THE BANK. THE APPELLANT HAS PREPARED AND FILED A TABULAR CHART EX PLAINING THE SOURCE OF CASH 3 ITA NO.1335/PN/2013` DEPOSIT IN THE BANK. THE SOURCE HAS BEEN EXPLAINED WITHOUT CONSIDERING THE GROSS BUSINESS RECEIPTS OF ABOUT RS.26 LACS FROM CONTRACT BUSINESS AND TRUCK PLYING BUSINESS, INCOME OF WHICH HAS BEEN DECLARED IN THE RETURN OF INCOME ON PRESUMPTIVE BASIS AS PER THE PROVISIONS OF SECTION 44AD AND 44A E OF THE ACT. THE APPELLANT'S CONTENTIONS ABOUT SOURCE OF CASH DEPOSITS IN BANK A RE FOUND TO BE REASONABLE/CORRECT AND HENCE ACCEPTED. THE A.O. HAS NOT BROUGHT ON RECORD ANY EVIDENCE THAT THE APPELLANT HAS EARNED ANY UNDISCLO SED INCOME FROM ANY DISCLOSED OR UNDISCLOSED BUSINESS. IN VIEW OF THE ABOVE FACTS AND DISCUSSION AND CONSIDERING THE TOTALITY OF THE FACTS, I AM OF THE CONSIDERED V IEW THAT THE A.O. IS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.20,80,000/- BY TREATING TH E CASH DEPOSITS IN BANK AS UNDISCLOSED INCOME. GROUND NO.1 IS ALLOWED. 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE ASSAILED THE ACTION OF THE CIT(A) AND CONTENDED THAT THE CIT(A) HAS TAKEN COGNIZANCE OF THE FACTS AND SUBMISSIONS OF THE ASSESSEE WITHOUT C ONFRONTING THE SAME TO THE ASSESSING OFFICER. SEVERAL FACTS HAVE BEEN TAKEN I NTO ACCOUNT WITHOUT VERIFICATION FROM THE ASSESSING OFFICER. NO REMAND REPORT HAS BEEN CALLED. THE ACTION OF THE CIT(A) HAS RESULTED IN DENIAL OF PRINCIPLE OF NATURAL JUSTICE TO THE REVENUE. 6. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE, ON THE OTHER HAND, JUSTIFIED THE ACTION OF THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE NO TICE FROM THE FINDINGS GIVEN BY THE CIT(A) THAT SEVERAL NEW FACTS AND CONT ENTIONS NOT PRESENT DURING ASSESSMENT PROCEEDINGS HAVE BEEN TAKEN INTO ACCOUNT WHILE GRANTING THE RELIEF TO THE ASSESSEE. FOR INSTANCE, AGRICULTURAL INCOME BASED 7/12 EXTRACTS AND ESTIMATING AGRICULTURAL CROPS AND OTHER SOURCES OF CASH DEPOSITS WERE ACCEPTED WITHOUT ANY VERIFICATION FROM THE ASSESSING OFFICER . THE ASSESSING OFFICER WAS NOT MADE PRIVY TO THE NEW FACTS AND CONTENTIONS OF THE ASSESSEE WITH REGARD TO SOURCE OF CASH DEPOSITS BEFORE THE CIT(A) . NEEDLESS TO SAY, SPIRIT OF RULE 46A OF THE INCOME TAX RULES, 1962 IS FOUNDED O N THE PRINCIPLE OF NATURAL JUSTICE, WHICH IN THE PRESENT CASE HAS NOT BEEN FUL FILLED BY THE CIT(A). ACCORDINGLY, WE CONSIDER IT APPROPRIATE TO SET-ASID E THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE-NOVO CONSIDERATION OF THE ENTIRE ISSUE AFRESH IN 4 ITA NO.1335/PN/2013` ACCORDANCE WITH LAW AFTER GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, WE SET-ASIDE THE MATTER TO BE DECIDED AFRESH. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 10 TH DAY OF NOVEMBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 10 TH NOVEMBER, 2015. & ' ()* +*( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE