Income Tax Officer, V. Shri Santosh Kumar,

ITA 168/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0329 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROUSHAN SR S C
• Assessee Lawyers: R R MITTAL
• Keywords: Business income; Additional evidence; Corroborative evidences
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 168/RAN/2014 (ASST. YEAR : 2009-10) ITO, WARD-3(1), RANCHI. VS. SHRI SANTOSH KUMAR, VIDYA NIWAS, 21, BHARAT PURI, PURULIA ROAD, RANCHI. PAN NO. ADLPK 7000 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.R. MITTAL FCA DEPARTMENT BY : SHRI DEEPAK ROUSHAN SR.SC DATE OF HEARING : 27/10/2015. DATE OF PRONOUNCEMENT : 27/10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RANCHI, DATED 07/02/2014. 2. THE FIRST GROUND OF APPEAL IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN RESTRICTING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER THE HEAD MINERAL HA NDLING EXPENSES. 3 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS 2 ITA NO. 168/RAN/2014 SHOWN INCOME FROM BUSINESS OF MINERAL HANDLING AT R S. 1,12,300/- WITHOUT ANY BASIS. THEREFORE, HE ESTIMATED THE INC OME OF THE ASSESSEE AT RS. 2 LAC. 5. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) OB SERVED THAT THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND THAT THE ASSESSING OFFICE R WITHOUT ANY ADVERSE REMARKS HAS MADE ADHOC ADDITION. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSING OF FICER WAS RIGHT IN CONCLUDING THAT THE TRUE PROFITS EARNED BY THE ASSE SSEE COULD NOT BE VERIFIED WITHOUT PROPER SUPPORTING EVIDENCE AND ACC ORDINGLY HE WAS JUSTIFIED IN ESTIMATING THE TAXABLE PROFITS OF THE ASSESSEE FOR THE YEAR. HOWEVER, THE ESTIMATE MADE IS SLIGHTLY ON HIGHER SI DE KEEPING IN MIND THE PAST RECORDS OF THE ASSESSEE. IT WOULD BE REAS ONABLE TO ADOPT NET PROFIT AT RS. 1,80,000/- AND ACCORDINGLY PARTLY ALL OWED THE APPEAL OF THE ASSESSEE. 6 . DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER O F THE ASSESSING OFFICER AND THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS). 7 . WE FIND THAT EXCEPT SUPPORTING THE ORDER OF THE A SSESSING OFFICER, NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE DEPAR TMENTAL REPRESENTATIVE TO SHOW THAT THE ESTIMATE OF INCOME OF THE ASSESSEE FROM MINERAL HANDLING CHARGES AT RS. 1,80,000/- WAS LOWER THAN THE ACTUAL INCOME RECEIVED BY THE ASSESSEE. IN ABSENCE OF THE SAME, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS CONFIRMED AND THE GRO UND OF APPEAL OF THE REVENUE IS DISMISSED. 8 . THE SECOND GROUND OF APPEAL OF THE REVENUE IS THA T COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RESTRICTING THE AD DITION MADE UNDER THE HEAD UNEXPLAINED CASH DEPOSITS IN SAVINGS ACCO UNT. 3 ITA NO. 168/RAN/2014 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORD ERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. 10 . FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE CASH DEPOSITS OF RS. 32, 17,481/- AND RS.1,50,000/- IN ICICI BANK ACCOUNT AND IN CANARA B ANK ACCOUNT AND THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE DEPOSITS IN CASH. DUE TO NON-COMPLIANCE OF THE ASSESSEE, THE ASSESSING OFFIC ER ADDED RS.33,67,481/- CREDITED IN BANK ACCOUNT TO THE TOTA L INCOME OF THE ASSESSEE. 11 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) O BSERVED THAT THE ASSESSEE DERIVED INCOME FROM BUSINESS OF MINERA L HANDLING INCLUDING THE HANDLING OF STONE CHIPS. THE ASSESSE E PICKS UP THE STONE CHIPS FROM THE CRUSHERS AND TRANSPORTS THE SAME TO THE SITE OF THE BUILDERS. THE TRANSPORTATION IS PAID BY THE BUILDE RS AND WHEN THE CHIPS ARE BEING LIFTED FROM THE CRUSHERS, THE PAYMENT HAS TO BE MADE BY THE ASSESSEE AND WHEN HE DELIVERS THE SAME THE AMOUNTS NEGOTIATED BY THE BUILDERS IS RECEIVED BACK AND DEPOSITED IN THE BANK ACCOUNT OF ICICI BANK AND CANARA BANK WHICH IS DISCLOSED IN HIS RETU RN OF INCOME. THE ASSESSING OFFICER HAS ERRED IN ADDING THE ENTIRE CR EDITS IN THE BANK ACCOUNT AND HAS IGNORED THE DEBITS INTO THE ACCOUNT . THE COMMISSIONER OF INCOME TAX (APPEALS), THEREFORE, TREATED THE ENT IRE CREDIT IN BANK ACCOUNT AS THE BUSINESS RECEIPTS FROM THE BUSINESS OF MINERAL HANDLING AND ESTIMATED THE INCOME AT 12% OF RS. 33,67,481/- BY TREATING THE DEPOSIT IN THE BANK ACCOUNT OF RS. 33,67,481/- AS T HE TURNOVER OF THE ASSESSEE. HE, THUS, ESTIMATED THE INCOME AT RS.4,0 4,098/- AND AFTER REDUCING RS. 1,80,000/- ALREADY CONFIRMED BY HIM, MADE ADDITION OF THE BALANCE AMOUNT OF RS. 2,24,098/- TO THE INCOME OF THE ASSESSEE. 12 DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED AND S UBMITTED THAT BEFORE THE ASSESSING OFFICER, NO DETAILS OR BA NK STATEMENTS WERE 4 ITA NO. 168/RAN/2014 SUBMITTED BY THE ASSESSEE. THE ENTIRE DETAILS AND BANK STATEMENTS WERE SUBMITTED BEFORE THE COMMISSIONER OF INCOME TA X (APPEALS), WHO WITHOUT CONFRONTING THE SAME TO THE ASSESSING OFFIC ER, ACCEPTED THE SAME AND RESTRICTED THE ADDITION TO RS. 2,24,098/- IN PLACE OF RS.33,67,481/-. HE, THEREFORE, PRAYED THAT ONE OPP ORTUNITY SHOULD BE ALLOWED TO THE ASSESSING OFFICER TO EXAMINE THE DET AILS AND DOCUMENTS WHICH WERE SUBMITTED BEFORE THE COMMISSIONER OF INC OME TAX (APPEALS). 13. WE FIND FORCE IN THE SUBMISSION OF THE DEPARTMENTAL REPRESENTATIVE. WE FIND THAT THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT. WE ALSO FIND FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) T HAT BEFORE ADMITTING THE ADDITIONAL EVIDENCE IN THE FORM OF BA NK STATEMENTS AND OTHER DOCUMENTS, THE COMMISSIONER OF INCOME TAX (AP PEALS) HAS NOT CONFRONTED THE SAME TO THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO ADJ UDICATE THE ISSUE AFRESH AFTER VERIFICATION AS PER LAW. THE ASSESSEE IS DIRECTED TO FILE ALL DETAILS AND DOCUMENTS ON WHICH IT WISHES TO RELY UP ON BEFORE THE ASSESSING OFFICER. THUS, THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 14 IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON TUESDAY, THE 27 TH DAY OF OCTOBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH OCTOBER, 2015. 5 ITA NO. 168/RAN/2014 VR/- COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RANCHI 6 ITA NO. 168/RAN/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 27/10/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28/10/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 28/10/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 28/10/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28/10/2015 SR.PS 6. DATE OF PRONOUNCEMENT 27/10/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 28/10/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER