Shri Hari Prasad Pandit, Bhilwara. V. ITO, WArd-3, Bhilwara

ITA 140/JODH/2018

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5426 (ITAT-JODHPUR)
• Duration Of Justice: 5 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 01-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Corroborative evidences; Set aside
• Section: 44AD; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 140/JODH/2018 Assessment Year: 2014-15 Sh. Hari Prasad Pandit, Vill. Khatwada (Bhigod), Tehsil-Madalgarh, Bhilwara PAN:AUQPP1158E (Appellant) Vs. Income Tax Officer, Ward-3, Bhilwara. (Respondent) Appellant by None Respondent by Sh. S.M. Joshi – JCIT-DR Date of Hearing 18.10.2023 Date of Pronouncement 09.11.2023 ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), Ajmer [in brevity the ‘CIT (A)’], order passed u/s 250(6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2014-15. The impugned order was emanated from the order of the ld. ITO, Ward – 3, Bhilwara [in brevity ‘the AO’] order passed u/s 143(3) of the Act. I.T.A. No.140/JODH/2018 Assessment Year: 2014-15 2 2. The assessee has taken the following grounds: “That under the facts of the circumstances of the case the Ld. CIT(A) has erred in:- (1) Restricting the amount of relief for addition towards unexplained credit to Rs.3,00,014/- instead of relief claimed by assessee of Rs.8,00,000/-. (2) Restricting relief made for addition u/sec. 44AD to Rs. 2,90,890/- instead of relief claim the assessee of Rs.5,56,327/- considering whole amount as sales wherein it is only commission on recharge. Since assessee being a seller of mobile recharge coupons. (3) Any other matter with prior approval of the Hon’ble Bench. 3. The brief facts of the case is that assessee is proprietor of M/s Gayatri Communication and M/s Gayatri Trading in which he dealt as an agent of Mobile Handset,sale of Sim Card and Mobile Recharge. The scrutiny was initiated by the ld. AO. The assessee was assessed for depositing cash in bank accounts and accordingly the ld. AO had taken the peak credit amount of Rs.8,00,000/- as unexplained income and calculated net profit on the total deposits in ICICI Bank, Bhilwara amount of Rs. 96,96,339/- on which the net profit was calculated @8% which works out to Rs.5,56,327/-. Both the amounts were added back with the total income of the assessee. Aggrieved assessee filed appeal before the CIT(A). After considering the submissions of the assessee, the Ld. CIT(A) had reduced the peak I.T.A. No.140/JODH/2018 Assessment Year: 2014-15 3 credit amount to Rs.3,00,014/- by allowing opening balance in bank amount of Rs.5,18,289/- and recalculated the net profit amount to Rs.2,65,437/-. The assessee made the grievance that assessee deposited the cash from sale of Sim card and declared the net profit @8% on sale of Mobiles amount of Rs.3,68,786/- which was works out amount to Rs.29,503/- and on the sale of recharge coupon, the assessee earned fixed commission amount to Rs.1,89,877/-. Accordingly, the total amount of Rs.2,19,380/- declared in the return of income u/s. 139(1). But the assessee’s submission was never be considered. Being dis-satisfied on the appeal order, the assessee filed an appeal before us. 4. While the appeal was called for, none was present on the behalf of the assessee. The adjournment petition was filed but without any supporting evidence and proper reason. Considering the issue, the adjournment petition is rejected. We proceed to dispose of the appeal ex-parte qua for assessee after hearing the ld. DR. 5. The ld. DR vehemently argued and relied on the order of the Revenue Authorities. 6. We heard the submission of the revenue and considered the documents available in the record and the submission of assessee. The assessee through ld. AR filed written submissions which are taken in record. The assessee had filed the I.T.A. No.140/JODH/2018 Assessment Year: 2014-15 4 return and declared his 3 bank accounts where amount was deposited by sale of recharge coupon, amount to Rs.93,27,553/-. The entire amount was deposited in ICICI Bank account no. 66705110334, ICICI Bank account no. 238 and Union Bank of India account no. 0024. The assessee filed the details, which is reproduced as below: - Name of Bank Purchases of Mobile Purchases of Recharge Coupon ICICI A/c No. 667051103334 Gayatri Communication (01.4.13 to 31.03.14) 368786.00 2928499.00 (3235758-307259 op. Balance) ICICI A/c No. 238 Gayatri Trading (27.08.13 to 31.03.14) -- 31,57,900.00 Union Bank A/c no. 0024 Gayatri Trading (30.12.13 to 31.03.2014) -- 30,90,000.00 Total 3,68,786 91,76,399.00 These payments are made for purchase of Mobiles from M/s. Pragati Telecom, Udaipur amount to Rs. 3,68,786.00 and Rs.91,73,399.00 for recharge coupons as an agent of M/s. Haxacom, Rajasthan (The A.O. has taken the total purchase chart above but has forget to deduct opening balances in bank accounts, detail as below and thus the difference arises). Thus the segment wise business income of assessee as disclosed is as under: Name of Bank Purchases of Mobile Purchases of Recharge Coupon I.T.A. No.140/JODH/2018 Assessment Year: 2014-15 5 Sale of Mobile phones 3,68,786.00 29,503.00 (Profit being declared at 8% of sales u/sec. 44AD) Sale of recharge coupons and others 93,27,553.00 1,89,877 (net commission being declared on recharge business by assessee) Total 96,96,339.00 2,19,380.00 6.1. In this respect, the assessee has submitted copies of computation and balance sheet from APB page no. 1 to 4. The copies of distributor agreement and billing systemAPB page no. 8 to 29, Analysis of ICICI Bank deposits APB page nos. 30 to 35, copy of cash book APB page nos. 36 to 45. The assessee has also submitted the copy of account of M/s. Pragati Telecome and M/s HexacomAPB page nos. 58 to 77. The entire cash deposited in the bank was transferred to these two parties from whom the assessee purchased mobile phone and the re-charged coupons and others. The assessee only sold mobile phone amount to Rs.3,68,786/- and the entire amount was deposited in ICICI Bank bearing account no. 0334 in the name of M/s Gayatri Communication. Accordingly, the assessee offered net profit @8% on sale amount of Rs.3,68,786/- which works out to Rs.29,503/-, which was offered to Tax in the returned income. As per the assessee, there is no undeclared bank account in his return of income and amount was duly declared and the tax was offered during filing of return u/s. 139(1), copy of return for assessment year 2014-15,APB page no.6. The ld. DR had not placed any contrary fact against the submissions of the I.T.A. No.140/JODH/2018 Assessment Year: 2014-15 6 assessee. We find that assessee declared the bank and cash in the return of income and the tax was offered tothe income earned by the assessee during the impugned assessment year. Accordingly, we set aside the appeal order and all the addition are duly quashed. In the result all the grounds of assessee is allowed. 7. In the result, the appeal of the assessee bearing no. ITA 140/JODH/2018 is allowed. Order pronounced in the open court on 09.11.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order