Shri Maheshbhai J. Ramani, Surat V. The Income Tax Officer, Ward-9(3), Surat

ITA 1347/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1947 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 06-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SAPNESH SHETH

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.1347/AHD/2014/SRT / ASSESSMENT YEAR: 2008-09 SHRI MAHESHBHAI J. RAMANI, 27, ASHOKVATIKA SOCIETY, NR. SPINNING MILL, AT PUNA GAM, TA: CHORYASI, SURAT. [PAN: AGSPR 2523D] VS. INCOME TAX OFFICER, WARD-9(3), SURAT. ( ' / APPELLANT) ( #$' /RESPONDENT) / ASSESSEE BY : SHRI SAPNESH SHETH, C.A /REVENUE BY : SHRI DILEEP KUMAR, SR. D.R /DATE OF HEARING : 11-10-2018 / DATE OF PRONOUNCEMENT : 16-10-2018 / ORDER PER C.M.GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-V, SURAT (CIT (A) FOR SHORT) DATED 18.02.2014 FOR THE ASSESSMENT YEAR (A.Y) 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLLO WS: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN PARTLY CONFIRMING THE ACTION OF ASSESS ING OFFICER IN MAKING ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED C ASH DEPOSITS IN BANK BY SUSTAINING THE ADDITION TO THE EXTENT OF RS. 2 ITA NO.1347/AHD/2014/SRT (A.Y: 2008-09) SHRI MAHESHBHAI J. RAMANI 14,68,604/- AS AGAINST RS. 15,87,330/- MADE BY ASSE SSING OFFICER. 2. IT IS THEREFORE PRAYED THAT ABOVE ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME -TAX (APPEALS) MAY PLEASE BE DELETED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE L EARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN P ARTLY CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION ON A CCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK BY SUSTAINING THE ADDITION TO THE EXTENT OF RS. 14,68,604/- AS AGAINST RS. 15,87,330/- MADE BY ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE ABOVE ADDITION MADE B Y ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME-TAX (AP PEALS) MAY PLEASE BE DELETED. ALTERNATIVELY, THE LD. AR SUBMITTED THA T ENTIRE AMOUNT OF DEPOSIT CANNOT BE TREATED AS INCOME OF THE ASSESSEE BEING A LIC AGENT AS THE AMOUNT DEPOSITED TO THE BANK ACCOUNT REPRESE NTS CASH RECEIVED FROM VARIOUS PARTIES FOR MAKING PAYMENT OF LIC PREM IUM, CASH RECEIVED FORM ASHWIN L. RANGANI, PRESIDENT OF GAJANAD SOCIET Y, SAROLI FOR MAKING PAYMENT OF ELECTRICITY BILL OF SOCIETY AND CASH REC EIVED ON DISCOUNTING OF SELF CHEQUES AND OTHER CASH DEPOSITS THEREFORE, ENT IRE ADDITION MAY KINDLY BE DELETED OR MAXIMUM THE PEAK AMOUNT CAN BE TAXED IN THE HANDS OF THE ASSESSEE, WHICH WAS RS. 1,50,091/- AS ON 09.07.2007 THEREFORE, RELIEF MAY KINDLY BE GRANTED TO THE ASSESSEE. 3 ITA NO.1347/AHD/2014/SRT (A.Y: 2008-09) SHRI MAHESHBHAI J. RAMANI 4. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) SUBMITTED THAT IT IS A CLEAR CASE OF CASH DEPOSIT T O THE BANK ACCOUNT OF THE ASSESSEE AND THE ASSESSEE WAS UNABLE TO GIVE RELEVA NT EXPLANATION & FILE COGENT DETAILS IN SUPPORT OF HIS CONTENTION AS TO W HY SUCH HUGE ADDITION SHOULD NOT BE MADE AS SUFFICIENT TIME WAS NOT PROVI DED TO ASSESSEE. THEREFORE, THE AO WAS RIGHT IN MAKING ADDITION U/S. 69A OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND THE SAME WAS RIGHTLY UPHELD BY THE LD. CIT(A). HOWEVER, IN ALL FAIRNESS, HE DID NOT C ONTROVERT THE ALTERNATE PRAYER OF THE ASSESSEE AND SUBMITTED THAT IF IT IS FOUND JUST AND PROPER THEN, THE DEPARTMENT HAS NO SERIOUS OBJECTION IN TA KING PEAK AMOUNT OF DEPOSIT DURING THE YEAR FOR THE PURPOSE OF TAXATION . 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, IN A CASES WHERE THE ASSESSEE DEPOSITS CASH AMOUNT TO THE BANK ACCOUNT AND FAILED TO SUBMIT PROPER EXPLANATION TO SUBSTANTIATE THE AM OUNTS DEPOSITED BY HIM THEN, THE REVENUE AUTHORITIES HAVE VALID POWERS TO PICK UP THE ISSUE FOR TAXATION PURPOSES. AT THE SAME TIME, IT IS A W ELL-ACCEPTED PRINCIPLE OF TAX JURISPRUDENCE THAT IN SUCH CASES WHEN THE ASSES SEE IS REGULARLY DEPOSITING AND WITHDRAWING AMOUNTS TO THE ALLEGED B ANK ACCOUNT FOR THE PURPOSE OF HIS BUSINESS OR PROFESSION ACTIVITY THEN , ENTIRE AMOUNT OF DEPOSIT CANNOT BE TREATED AS INCOME IN THE HANDS OF THE ASSESSEE KEEPING ASIDE THE AMOUNTS OF WITHDRAWAL DURING THE YEAR. IN THE PRESENT CASE, ASSESSEE IS A LIC AGENT, WHO IS CLAIMING THAT HE RECEIVED CASH 4 ITA NO.1347/AHD/2014/SRT (A.Y: 2008-09) SHRI MAHESHBHAI J. RAMANI AMOUNTS AS PREMIUM FROM HIS CLIENTS AND HE DEPOSITE D THE SAME TO THE BANK ACCOUNT AND FURTHER MADE PAYMENT TO LIC ON THE INSTRUCTIONS OF HIS CLIENTS. FROM THE COPY OF BANK ACCOUNT AVAILABLE A T ASSESSEES PAPER BOOK PAGES 29 TO 33, IT IS ALSO CLEAR THAT THE ASSE SSEE IS DEPOSITING CASH AND ALSO MAKING PAYMENTS TO LIC AND OTHER ENTITIES. IN THIS SITUATION, THE ENTIRE CASH DEPOSITS CANNOT BE TREATED AS INCOME OF THE ASSESSEE AND ONLY PEAK AMOUNT CREDITED TO THE BANK OF THE ASSESS EE, WHICH WAS RS. 1,50,097/- AS ON 09.07.2007, CAN BE TREATED AS INCO ME IN THE HANDS OF THE ASSESSEE. THEREFORE, ALTERNATIVE PRAYER OF THE ASSESSEE IS ALLOWED AND AO IS DIRECTED TO MAKE THE ADDITION OF PEAK AMO UNT OF RS. 1,50,097/- TO THE RETURNED INCOME OF THE ASSESSEE ON ACCOUNT O F CASH DEPOSITS TO HIS BANK ACCOUNT. ACCORDINGLY, GROUNDS NO.1 & 2 OF THE ASSESSEE ARE PARTLY ALLOWED AND AO IS DIRECTED TO RE-COMPUTE THE ADDITI ON AND TAXABLE INCOME OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 6 TH OCTOBER, 2018. / SURAT ; DATED : 16 TH OCTOBER, 2018 EDN # & / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER