ITO, Ward 1(3), Nashik V. Shri Homan Shaun Francis, Nashik

ITA 1651/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84900 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1651/PN/2013 (ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER, WARD 1(3), NASHIK. . APPELLANT VS. SHRI HOMAN SHAUN FRANCIS, 10, SETAVI APARTMENT, LAXMI NAGAR ROAD, COLLEGE ROAD, NASHIK. PAN : AAXPH0134M . RESPONDENT DEPARTMENT BY : MR. P. S. NAIK ASSESSEE BY : NONE DATE OF HEARING : 21-08-2014 DATE OF PRONOUNCEMENT : 26-08-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 07.06.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 21.12.2011 PASSED BY THE ASSESSING OFFICER U/S 144 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT/ASSESSEE INSPITE OF SERVICE OF NOTICE WH EREAS THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI P.S. NAIK APPEARE D ON BEHALF OF THE APPELLANT/REVENUE. IN THE ABSENCE OF ANY APPEARANC E BY THE ASSESSEE IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE INSP ITE OF SERVICE OF NOTICE, FOLLOWING RULE 25 OF THE APPELLATE TRIBUNAL, 1963, WE HAVE PROCEEDED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE RESPONDENT A FTER HEARING THE APPELLANT/REVENUE ON MERITS. ITA NO.1651/PN/2013 A.Y. : 2009-10 3. IN THIS APPEAL, THE TWO IMPUGNED GROUNDS OF APPE AL RAISED BY THE REVENUE ARE AS FOLLOWS :- 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN DELETING THE A DDITION OF RS.16,21,650/- DEPOSITED IN SAVING BANK A/C WITH HDFC BANK. 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.2,81,000/- INCURRED EXPENSES FOR USING CREDIT CARD HELD OF CIT I BANK. 4. BRIEFLY PUT THE RELEVANT FACTS ARE THAT ASSESSEE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF RUNNING A RESTAURANT IN HIS PROPRIETORY CONCERN AND IS ALSO A PARTNER IN PARTNERSHIP FIRM, M/S AQUARIUS ABRASIVES AND HORIZON MARKETING SERVICES. FOR THE YEAR UNDER CONSIDERATI ON, HE FILED A RETURN OF INCOME DECLARING TAXABLE INCOME OF RS.4,34,340/- AN D AGRICULTURAL INCOME AT RS.20,000/-. THE RETURN OF INCOME FILED BY THE ASS ESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT BY THE ASSESSING OFFICER. 5. HOWEVER, THE ASSESSING OFFICER HAS NOTED THAT TH E ASSESSEE DID NOT PUT IN THE REQUISITE APPEARANCES INSPITE OF SERVICE OF NOTICES AND THEREFORE HE PROCEEDED TO FINALIZE THE ASSESSMENT TO THE BEST OF HIS JUDGEMENT IN TERMS OF SECTION 144 OF THE ACT. THE TOTAL INCOME WAS ASSES SED AT RS.23,56,990/- WHICH, INTER-ALIA, INCLUDED THE TWO ADDITIONS IN DI SPUTE BEFORE US, NAMELY, UNEXPLAINED CASH DEPOSITS TOTALING TO RS.16,21,000/ - IN SAVING BANK A/C IN HDFC BANK; AND, UNEXPLAINED EXPENSES TOTALING TO RS .2,81,000/- INCURRED BY USING CREDIT CARD OF CITI BANK. BOTH THE ADDITIONS WERE DELETED BY THE CIT(A) AND ACCORDINGLY, THE REVENUE IS IN APPEAL BEFORE US CHALLENGING THE ACTION OF THE CIT(A). 6. AT THE TIME OF HEARING, THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE EXPLANATION OF THE ASSESSEE HAS BEEN ACCEPTED BY THE CIT(A) ON THE BASIS OF THE COMPUTERIZED CASH BOOK, LEDGER, BALANCE SHEET AND ITA NO.1651/PN/2013 A.Y. : 2009-10 TRIAL BALANCE PRODUCED BEFORE HIM. IT WAS CONTENDE D THAT THE ADDITIONS OUGHT TO HAVE BEEN DELETED ONLY AFTER DUE VERIFICATION BY THE ASSESSING OFFICER SINCE ASSESSEE DID NOT PRODUCE THE AFORESAID MATERIAL IN THE COURSE OF ASSESSMENT PROCEEDINGS. 7. WE HAVE CONSIDERED THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPEAL. OSTENSIBLY, IN THE COURSE OF ASSESSMENT PR OCEEDINGS, THE REQUISITE MATERIAL WAS NOT BEFORE THE ASSESSING OFFICER AND I T IS IN THIS BACKGROUND, THE ASSESSING OFFICER FOUND CASH DEPOSITS MADE IN THE H DFC BANK ACCOUNT AND EXPENSES INCURRED THROUGH CREDIT CARD AS BEING UNEX PLAINED. HOWEVER, WE FIND THAT IN THE COURSE OF APPELLATE PROCEEDINGS BE FORE THE CIT(A), ASSESSEE EXPLAINED THE REASONS FOR NON-PRODUCTION OF NECESSA RY DETAILS IN THE COURSE OF ASSESSMENT PROCEEDINGS. ASSESSEE ALSO FURNISHED RE QUISITE DETAILS IN THE SHAPE OF COMPUTERIZED CASH BOOK, LEDGER, BALANCE SH EET AND TRIAL BALANCE TO SHOW THE SOURCE OF CASH DEPOSITS IN HDFC BANK AND T HE PAYMENTS THROUGH CREDIT CARD LOANS. WE FIND THAT THE CIT(A) FORWARD ED THE REQUISITE MATERIAL TO THE ASSESSING OFFICER CALLING FOR A VERIFICATION RE PORT AND COMMENTS. THE CIT(A) HAS NOTED IN PARA 5.3 OF HIS ORDER THAT THE ASSESSING OFFICER RESPONDED BY FILING HIS COMMENTS BUT THE ASSESSING OFFICER DI D NOT VERIFY THE COMPUTERIZED CASH BOOK, LEDGER, BALANCE SHEET AND T RIAL BALANCE WITH THE HELP OF WHICH ASSESSEE HAS SOUGHT TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN HDFC BANK AND PAYMENT THROUGH CREDIT CARD LOAN. FURTHER , THE CIT(A) NOTED THAT SINCE THE ASSESSING OFFICER WAS ALLOWED AN OPPORTUN ITY TO VERIFY THE MATERIAL FURNISHED BY THE ASSESSEE AND SUCH OPPORTUNITY WAS NOT AVAILED BY HIM, HE HIMSELF PROCEEDED TO EXAMINE THE MATERIAL FURNISHED BY THE ASSESSEE. THE FINDINGS ARRIVED AT BY THE CIT(A) AFTER VERIFYING T HE MATERIAL FURNISHED BY THE ASSESSEE READ AS UNDER :- 5.4 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE RIVAL CONTENTIONS. ON PERUSAL OF THE SAME, IT HAS BEEN N OTICED THAT THE AO HAS MADE ADDITION OF RS.19,02,050/- BY PASSING EX-PARTE ASSESSMENT U/S 144 ITA NO.1651/PN/2013 A.Y. : 2009-10 OF THE ACT. IT IS SETTLED LAW THAT THE EX-PARTE A SSESSMENT U/S 144 SHOULD NOT BE USED AS PUNISHMENT TO ASSESSEE. THE ADDITION S MADE BY THE AO ARE TO BE BASED ON PROPER EVIDENCE AND REASONING WH ICH IS NOT FOUND IN THE CASE UNDER APPEAL. THE APPELLANT HAS PRODUCED C OMPUTERIZED BOOKS USING TALLY PACKAGE AND ALSO GENERATED TRIAL BALANC E, PROFIT & LOSS A/C AND BALANCE SHEET FROM THE SAME. IN VIEW OF THE F ACTS OF THE CASE, IT HAS BECOME NECESSARY FOR ME TO VERIFY THE COMPUTERIZED CASH BOOK AND LEDGER AND ALSO COMPUTERIZED BALANCE SHEET AND TRIAL BALAN CE AS AT 31/03/2009, GENERATED BY THE APPELLANT BY USING TALLY PACKAGE A S THE AO HAS NOT VERIFIED THE SAME INSPITE OF OPPORTUNITY GIVEN. ON PERUSAL OF THE ABOVE MENTIONED RECORD, IT HAS BEEN NOTICED THAT THE APPE LLANT HAS RAISED LOANS FROM VARIOUS FINANCIAL INSTITUTIONS. IT HAS ALSO B EEN NOTICED THAT THE HDFC BANK ACCOUNT NO.00641330003701 IN WHICH THE APPELLA NT HAS DEPOSITED CASH AMOUNTING TO RS.16,21,650/- AND CITY BANK CRED IT CARD LOAN ACCOUNT FROM WHICH THE APPELLANT HAS MADE PAYMENT OF RS.2,8 1,000/- HAVE BEEN CONSIDERED IN THE BOOKS OF ACCOUNT AND ARE APPEARIN G IN THE BALANCE SHEET AND TRIAL BALANCE AS AT 31/03/2009. THE LEDGER EXTR ACT OF THESE TWO ACCOUNTS HAVE BEEN FILED BY THE APPELLANT AND KEPT ON RECORD. IN VIEW OF THE ABOVE FACTS, THE SOURCE OF THE CASH DEPOSITS OF RS.16,21,650/- AND PAYMENT OF RS.2,81,000/- STOOD EXPLAINED. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, THE ADDI TIONS OF RS.16,21,650/- AND RS.2,81,000/- ARE DELETED. GROU ND NOS.1 & 3 ARE ALLOWED. 8. A PERUSAL OF THE AFORESAID FINDINGS OF THE CIT(A ) SHOW THAT THE SAME ARE QUITE JUSTIFIED. IN-FACT, IN THE COURSE OF HEARING BEFORE US, REVENUE HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL OR EVIDENCE S O AS TO NEGATE THE FINDINGS OF THE CIT(A). THE ONLY OBJECTION RAISED BEFORE US IS THAT THE CIT(A) OUGHT TO HAVE SUBJECTED THE MATERIAL FOR NECESSARY VERIFICATION BY THE ASSESSING OFFICER. IN-FACT, THE CIT(A) RECORDS THA T THE ASSESSING OFFICER WAS ALLOWED AN OPPORTUNITY TO VERIFY THE MATERIAL AND T HE ASSESSING OFFICER DID NOT AVAIL OF THE OPPORTUNITY TO DO SO. THE CIT(A) HAS NOTED IN PARA 5.2 AND 5.3 OF HIS ORDER THAT THE ASSESSING OFFICER DID FILE HIS C OMMENTS IN RESPONSE TO THE SUBMISSIONS OF THE ASSESSEE, SO HOWEVER, HE DID NOT TAKE THE OPPORTUNITY TO VERIFY THE MATERIAL FURNISHED BY THE ASSESSEE. IN THIS BACKGROUND, THE CIT(A) PROCEEDED TO VERIFY AND SATISFY HIMSELF WITH REGARD TO THE EXPLANATION FURNISHED BY THE ASSESSEE RELATING TO THE CASH DEPOSITS OF RS .16,21,650/- IN THE HDFC BANK AND THE PAYMENTS MADE TOWARDS EXPENSES FROM TH E CITI BANK CREDIT CARD LOAN ACCOUNT. IN THE BACKGROUND OF THE AFORES AID, WE FIND THAT THERE IS NO JUSTIFICATION IN THE PRESENT PLEA OF THE REVENUE ES PECIALLY WHEN THE CIT(A) DID ITA NO.1651/PN/2013 A.Y. : 2009-10 ALLOW THE ASSESSING OFFICER HAVING AN OPPORTUNITY T O VERIFY THE MATERIAL, WHICH HE CHOSE NOT TO DO DURING THE COURSE OF APPELLATE P ROCEEDINGS. FURTHERMORE, FACTUALLY SPEAKING ALSO, REVENUE HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL OR EVIDENCE TO REBUT THE FINDINGS OF THE C IT(A), WHICH WE HAVE EXTRACTED ABOVE. AS A RESULT, WE HEREBY AFFIRM THE FINDINGS OF THE CIT(A). 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 26 TH AUGUST, 2014. SUJEET 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 I.T.A.T., PUNE