Sh. Dinesh Singla, Patiala V. ITO, W-1, Patiala

ITA 1439/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9918 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 08-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHIR
• Keywords: Set aside
• Section: 80C; 143(3); 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH SMC CHANDIGARH , ! BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 1439/CHD/2018 / ASSESSMENT YEAR : 2014-15 SHRI DINESH SINGLA, 18, DOCTORS ENCLAVE, OFFICERS COLONY, PATIALA. VS THE ITO, WARD 1, PATIALA. ./PAN NO. : ACJPS5123K /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI RAKESH CAJLA, ADVOCATE / REVENUE BY : SHRI A.K.DHIR, SR.DR ! ' # /DATE OF HEARING : 14.05.2019 $%&' # /DATE OF PRONOUNCEMENT : 30.05. 2019 '#/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE A SSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 16/08/2018 OF CIT(A) PATIALA PERTAINING TO 20 14-15 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X APPEAL (S) PATIALA IS BAD IN LAW AND AGAINST FACTS OF THE CASE. 2. THAT ON FACTS & CIRCUMSTANCES OF THE CASE THE LD. C IT (A) IS NOT JUSTIFIED IN TREATING THE CASH DEPOSITS IN BANK AS UNEXPLAINED MONEY. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (A), PATI ALA IS NOT JUSTIFIED IN CONFIRMING THE ADDITION, WITHOUT CONSIDERING THE AVERMENTS MADE TH E ASSESSEE . 4. THAT THE LD. COMMISSIONER OF INCOME TAX (A), PATIAL A IS NOT JUSTIFIED IN UPHOLDING THE SPECIAL RATE APPLIED U/S 115BBE OF THE INCOME TAX A CT, 1961. 5. THAT THE LD. COMMISSIONER OF INCOME TAX (A), PATIAL A IS ERRED IN NOT ALLOWING THE DEDUCTION U/S 80C OF THE INCOME TAX ACT. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR DELETE ANY OF THE GROUND (S) OF APPEAL BEFORE IT IS FINALLY HEARD. 2. THE ASSESSEE HAS ALSO RAISED THE ADDITIONAL GROU ND IN THE PRESENT PROCEEDINGS. THE LD. AR SUBMITTED THAT IT IS A LEGAL GROUND WHICH THE AS SESSEE BY OVERSIGHT FORGOT TO RAISE AT THE EARLIER STAGE. THE LD. SR.DR SUBMITTED THAT THE LE GAL GROUND MAY BE ADMITTED BUT THE ISSUE HAS TO BE REMANDED AS IN THE ABSENCE OF ANY FINDING BY THE CIT(A) HE WOULD NEED RECORDS ETC. THE GROUND RAISED IS REPRODUCED HEREUNDER FOR READY REF ERENCE : ITA 1439/CHD/2018 A.Y. 2014-15 PAGE 2 OF 3 THE LD. A.O. IS ERRED IN CONVERTING THE CASE FALLIN G UNDER 'LIMITED SCRUTINY' INTO 'A COMPLETE SCRUTINY CASE' WITHOUT GETTING THE APPROVA L FROM PR. CIT/CIT/PR. DIT/DIT. THE INSTRUCTIONS OF THE CBDT HAS NOT BEEN COMPLIED WITH . 3. A PERUSAL OF THE RECORD SHOWS THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WERE CHALLENGED IN APPEAL BEFORE T HE CIT(A). BEFORE THE SAID AUTHORITY THE ASSESSEE APPEARED IN PERSON. THE NATURE OF ASSESSEE S WORK IS NOT SET OUT IN THE ASSESSMENT ORDER. HOWEVER, BEFORE THE CIT(A) THE ASSESSEE IS CONSIDER ED TO BE RETURNING INCOME FROM BUSINESS AND PROFESSION. THE RELEVANT FACTS TAKEN INTO CONSI DERATION BY THE CIT(A) READ AS UNDER : 3.3 AS POINTED OUT SUPRA, THE CASE WAS SELECTED FOR SCRUTINY BASED ON HIGH TU RNOVER OF SECURITIES TRANSACTIONS THAT WERE NOT REFLECTED IN THE BOOKS. IN ADDITION, THE APPELLANT WAS SHOWING RETURNED INCOME FROM BUSINESS AND PROFESSIO N RELATING TO WHICH THE APPELLANT COULD NOT PRODUCE ANY INVOICES, DETAILS ETC AS TO WHICH B USINESS WAS BEING RUN. IN ADDITION, THE APPELLANT REFUSED TO FURNISH ANY DETAILS OF THE SEC URITIES BUSINESS / TRANSACTIONS HE CARRIED OUT THROUGH NSE AND BSE BROKER, VIKSON SECURITIES PVT. LTD. CHANDIGARH. THE RELEVANT PORTION OF THE ASSESSMENT ORDER MENTIONING THE ABOVE DETAIL S ARE REPRODUCED AS UNDER: THE ASSESSEE HAS SHOWN TO HAVE EARNED BUSINESS INCO ME TO THE TUNE OF RS. 3,27,311/- BUT HAS NOT SHOWN ANY SALES INVOICE, PUR CHASE INVOICES ETC. TO PROVE THE CARRYING OF ANY BUSINESS ACTIVITY AND HAS NOT BEEN ABLE TO CLARIFY THE NATURE OF BUSINESS WHICH HAS YIELDED A NET PROFIT RATE OF 41. 51% I.E. RS. 3,27,311/- AGAINST SALES OF RS. 7,95,400/-. IN OTHER WORDS, THE ASSESS EE HAS NOT BEEN ABLE TO PROVE THE EXITANCE OF SO CALLED BUSINESS AND THE NATURE OF BU SINESS CARRIED ON BY HIM DURING THE YEAR UNDER CONSIDERATION AND HE HAS NOT BEEN AB LE TO FURNISH ANY COGENT AND CORROBORATIVE DOCUMENTARY EVIDENCE TO ESTABLISH THE BUSINESS ACTIVITY. IT IS FURTHER NOTICED THAT THE ASSESSEE UNDERTOOK SECURITIES TRAN SACTIONS WITH M/S VIKSON SECURITIES PVT. LTD. AND THE SAME WERE NEVER MENTIO NED/DISCLOSED IN THE ITR. THE ASSESSEE REFUSED TO SUBMIT ANY INFORMATION IN THIS REGARD STATING THAT THE INFORMATION IS NOT AVAILABLE WITH HIM. HOWEVER, THE UNDERSIGNED GOT THE INFORMATION FROM THE BROKER WHO REPORTED A NET INCO ME OF RS. 7701/- AND THE SAME IS ADDED TO THE RETURN INCOME OF THE ASSESSEE. TO EXPLAIN THE POSITION FURTHER THE ASSESSEE HAS MA DE CERTAIN CASH DEPOSITS WITH VIJAY BANK AND HDFC BANK LTD. DURING THE YEAR UNDER SCRUTINY TOTALLING RS. 6,68,000/- FROM WHERE THE ASSESSEE HAS MADE INVESTM ENT IN SECURITIES. THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO JUSTIFY THE SO URCE OF SUCH CASH DEPOSITS FAILING WHICH THE SAME WILL BE TREATED AS UNEXPLAIN ED MONEY VIDE UNDERSIGNED SHOW CAUSE DATED 14.12.2016. HOWEVER, THE ASSESSEE FILED A GENERAL REPLY DATED 19.12.2016 AND COULD NOT SUBSTANTIATE THE SOURCE OF THE CASH DEPOSITS TO THE SATISFACTION OF THE UNDERSIGNED. HOWEVER, THE WHOLE OF THE CASH DEPOSITS ARE TREATED AS UNEXPLAINED MONEY OF THE ASSESSEE IN THE LIGHT OF FOLLOWING ALARMING FIGURES REGARDING UTILIZATION OF FUNDS/DESTINATION OF WITHDRAWALS FROM THE BANK ACCOUNT OF THE ASSESSEE AND IT SPEAKS OF THE STATUS OF ASSESSEE, HIS FINANCIAL CREDITWORTHINESS, HIS LIFE STYLE, HIS ACTUAL INCOME ETC. 4. CONSIDERING THE SUBMISSIONS ADVANCED ON BEHALF O F THE ASSESSEE, IT IS SEEN THAT THEY HAVE BEEN FOUND TO BE IN IGNORANCE OF FACTS AND LAW. THE FOLLOWING RELEVANT EXTRACT BRINGS OUT THE HANDICAP EXPERIENCE BY THE CIT(A) IN ARRIVING AT A CONCLUSION WHICH IS JUST AND FAIR : FROM THE ABOVE IT IS QUITE CLEAR THAT THE APPELLAN T DID NOT COOPERATE WITH THE LD. AO. FURTHER, THE APPELLANT HAS NOT ENGAGED ANY COUNSEL EITHER FOR ASSESSMENT OR APPELLATE ITA 1439/CHD/2018 A.Y. 2014-15 PAGE 3 OF 3 PROCEEDINGS; HIS KNOWLEDGE OF LAW AND FACTS APPEARS LIMITED IF ONE IS TO JUDGE FROM THE LONG-WINDED ARGUMENTATIVE GROUNDS OF APPEAL. THAT T HE APPELLANT DID NOT PROVIDE ANY DETAILS OF THE SECURITIES TRANSACTIONS AND THE LD A O HAD TO OBTAIN THE DETAILS FROM THE BROKER IS CLEAR FROM THE RECORD; THE SECURITIES BUS INESS AS HAS BEEN POINTED OUT WAS NEVER REFLECTED IN THE RETURN OF INCOME AND THE APPELLANT DID NOT / COULD NOT PROVIDE ANY DETAILS OF THE SECURITIES OR THE OTHER SO CALLED BUSINESS. THE LD AO HAS MENTIONED THAT THE ASSESSMENT HAS BEEN DONE U/S 143(3) OF THE ACT, THO UGH GIVEN THE FACTS ABOVE; THE ASSESSMENT IS MORE IN THE NATURE OF A BEST JUDGMENT C ASSESSMENT U/S 144 BASED ON MATERIAL ON RECORD COLLECTED BY THE LD. AO.. 5. ACCORDINGLY, WITHOUT ADDRESSING THE FURTHER SHOR TCOMINGS NOTICED IN THE REPRESENTATION ON BEHALF OF THE ASSESSEE IN THE INTERESTS OF SUBST ANTIAL JUSTICE, THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE CIT(A) AS ADMITTEDLY IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE APPEARING IN PERSON UNAWARE OF THE RELEVANT FACTS T O BE HIGHLIGHTED AND THE LEGALITIES INVOLVED COULD NOT EFFECTIVELY UTILISE THE STATUTORILY PROVI DED OPPORTUNITY OF THE RIGHT TO BE HEARD. TO SET RIGHT THIS DEFICIT THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW. MR .RAKESH CAJLA, APPEARING ON BEHALF THE ASSESSEE GAVE HIS ORAL UNDERTAKING THAT THE ASSESSE E SHALL NOT ABUSE THE TRUST REPOSED AND SHALL PARTICIPATE FULLY AND FAIRLY BEFORE THE CIT(A). IT IS MADE CLEAR THAT IN THE EVENTUALITY OF ABUSE OF THE TRUST REPOSED, THE CIT(A) WOULD BE AT LIBERTY T O PASS AN ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. SAID ORDER WAS PRONOUNCED IN T HE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.05.20 19. SD/- ( ) (DIVA SINGH) ! / JUDICIAL MEMBER