Arvindbhai Maganbhai Patel, Mehsana V. The ITO, Ward-5, Palanpur

ITA 1684/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9965 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHYAM PRASAD
• Assessee Lawyers: A C SHAH
• Keywords: Business income; Additional evidence; Corroborative evidences; Set aside
• Section: 142(1); 133(6); 143(2); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ARVINDBHAI MAGANBHAI PATEL, 8, NEW VANDANA PARK SOCIETY, MADHI ASHRAM ROAD, VIJAPUR, DIST: MEHSANA PAN: ARFPP1167P (APPELLANT) VS THE ITO, WARD-5, PALANPUR (RESPONDENT) REVENUE BY: DR. SHYAM PRASAD, SR. D.R. ASSESSEE BY: SHRI A.C.SHAH, A.R. DATE OF HEARING : 07-06-2021 DATE OF PRONOUNCEMENT : 15-07-20 21 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2010-11, ARISES FRO M ORDER OF THE CIT(A), GANDHINAGAR, IN PROCEEDINGS UNDER SECTION 1 44 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) IN CONFIRMING THE ADDITION OF R S. 14,43,000/- BEING THE DEPOSITS MADE IN THE BANK ACCOUNT ON NON-COMPLIANCE S OF THE NOTICES. ITA NO. 1684/AHD/2019 ASSESSMENT YEAR 2010-11 I.T.A NO. 1684/AHD/2019 A.Y. 2010-11 PAGE NO ARVINDBHAI MAGANBHAI PATEL VS. ITO 2 3. THE FACT IN BRIEF IS THAT AS PER THE AIR INFORM ATION, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEPOSITED MOR E THAN RS. 10 LACS IN HIS BANK ACCOUNT MAINTAINED WITH KURKARWADA NAGRIK SAHA KARI BANK LTD., MEHSANA. SUBSEQUENTLY, THE NOTICE U/S. 148 WAS ISS UED ON 26 TH MARCH, 2017. IN RESPONSE, THE ASSESSEE HAD FILED RETURN OF INCOM E DECLARING TOTAL INCOME OF RS. 68,490/-. THEREAFTER, ASSESSING OFFICER HAS IS SUED NOTICES U/S. 143(2) AND 142(1) OF THE INCOME TAX ACT, 1961 ON 31 ST OCTOBER, 2017. THE ASSESSEE HAS NOT MADE COMPLIANCE TO THE ABOVE MENTI ONED NOTICES. THEREFORE, ASSESSING OFFICER HAS ISSUED SHOW CAUSE NOTICE U/S. 271(1)(B) ON 1 ST DECEMBER, 2017 FOR LEVYING PENALTY OF NOT MAKING C OMPLIANCE WITH THE NOTICE ISSUED. HOWEVER, THE ASSESSEE HAS NOT MADE ANY COMPLIANCE THEREFORE THE ASSESSING OFFICER HAS LEVIED PENALTY U/S. 271(1)(B) ON 18 TH DECEMBER, 2017 FOR NOT MAKING COMPLIANCE WITH THE N OTICES. IN VIEW OF NOT MAKING COMPLIANCES, THE ASSESSING OFFICER HAS F INALIZED THE ASSESSMENT U/S. 144 OF THE ACT. THE ASSESSING OFFICER STATE D THAT AS PER THE AIR INFORMATION THE ASSESSEE HAS DEPOSITED CASH OF RS. 14,43,000/- IN THE SAVING BANK ACCOUNT MAINTAINED WITH KURKARWADA NAGRIK SAH AKARI BANK LTD. STATEMENT OF BANK ACCOUNT WAS OBTAINED BY ISSUING O F THE LETTER U/S. 133(6) OF THE ACT FROM THE BANK. ON VERIFICATION OF THE B ANK STATEMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD DEPOSI TED CASH IN THE AFORESAID BANK ACCOUNT ON VARIOUS DATES TOTALING TO RS. 14,43 ,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS NOT MADE COMPLIANCE TO THE NOTICES AND NOT FURNISHED ANY EXPLANATION TO EX PLAIN THE SOURCE OF CASH DEPOSIT IN THE SAID BANK ACCOUNT. THEREFORE, THE A SSESSMENT WAS FINALIZED U/S. 144 OF THE ACT TREATING THE CASH DEPOSITED AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. I.T.A NO. 1684/AHD/2019 A.Y. 2010-11 PAGE NO ARVINDBHAI MAGANBHAI PATEL VS. ITO 3 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. T HE RELEVANT PART OF THE DECISION OF LD. CIT(A) IS REPRODUCED AS UNDER:- 5.1 THE APPELLANT HAD REQUESTED FOR ADMITTING THE ADDITIONAL EVIDENCES AND AFTER CALLING THE REMAND REPORT AND CONSIDERING THE REJOINDER TO THE REMAND REPORT, THEY HAVE BEEN ADMITTED AND EXAMINED INDEPENDENTLY. THE APPELLANT HAS CONTENDED THAT HE WAS BASICALLY AN AGRICULTURIST AND HAS BEEN ENGAGED IN GROWING OF CROPS AND SELLING TH E AGRICULTURAL PRODUCES IN THE MARKET. HE HAD CONTENDED THAT ALL THE CASH DEPOSITED IN THE KUKARW ADA NAGRIK SAHKARI BANK LTD. WAS OUT OF SALE OF AGRICULTURAL PRODUCE SUCH AS POTATO WHICH WAS GR OWN BY HIM. HE HAS ALSO CONTENDED THAT HE HAD BEEN ALSO TRADING IN POTATO SEEDS. THE COPY OF BANK STATEMENT REVEALED THAT THE APPELLANT HAD DEPOSITED THE CASH ON VARIOUS DATES AND MOSTLY IN M ULTIPLICATION OF LAKHS OF RUPEES AND SOME CASES, LESS THAN RS.1,00,000/- ON A SINGLE DATE. TH E APPELLANT HAD ALSO ANOTHER BANK ACCOUNT WITH STATE BANK OF INDIA OF VIJAPUR BRANCH WHEREIN ALSO CASH HAS BEEN DEPOSITED ON VARIOUS DATES BUT ALL WERE FOR THE AMOUNTS OF LESS THAN RS.1,00,000/- OR CAN BE SAID OF NOMINAL AMOUNTS. IN SUPPORT OF THE CONTENTIONS, THE APPELLANT AS FILED THE DETA ILS OF HOLDING OF AGRICULTURAL LAND AT VILLAGE LADOL, TAL, VIJAPUR. THE APPELLANT HAS FILED THE CO PIES OF PROFIT & LOSS ACCOUNT AND THE BALANCE- SHEETS AND ALSO THE COPIES OF ACCOUNTS OF THE AGRIC ULTURAL PRODUCE(POTATO) PURCHASED FROM S/SHRI HARDEV SINGH SANGHA AND BHUPENDER SINGH SANGHA. AS PER THE PROFIT & LOSS ACCOUNT, TOTAL SALES OF RS.19,42,095/- HAVE BEEN CREDITED AS AGAINST THE PURCHASES OF RS.19,80,850/-. THE OUTSTANDING BALANCE TO BE PAID TO THESE TWO PERSONS HAS BEEN SH OWN IN THE BALANCE-SHEET AT RS.12,77,062/- IN RESPECT OF SHRI BHUPENDER SINGH SANGHA AND OF RS.4, 87,325/- IN RESPECT OF SHRI HARDEV SINGH SANGHA. THUS, THE SALE PROCEEDS CLAIMED TO BE RECEI VED HAVE BEEN DEPOSITED IN THE BANK AND HAVE NOT BEEN USED FOR MAKING REGULAR PAYMENTS TO THESE TWO VENDORS. THE BALANCE-SHEET REFLECTED THE CASH BALANCE OF RS.3,46,208/- WHICH ALSO SHOWS THAT THE APPELLANT DID NOT MAKE THE PAYMENT TO THESE TWO VENDORS OUT OF AVAILABLE CASH ON HAND. DU RING THE COURSE OF REMAND REPORT PROCEEDINGS, THE A.O. HAS NOTED CERTAIN DISCREPANCIES IN THE CLO SING BALANCES OF THESE TWO VENDORS AND ALSO NOTED THE FAILURE OF THE APPELLANT TO FURNISH THE C OPIES OF BILLS OF PURCHASE OF AGRICULTURAL PRODUCE POTATO OR POTATO SEEDS), ADDRESSES OF THE PERSONS F ROM WHOM THE PURCHASES WERE MADE AND ALSO THE COPIES OF SALE BILLS FOR VERIFICATION OF ENTRIE S IN THE CASH BOOK AS WELL AS ALSO THE EVIDENCES FO R EXPENSES. THE A.O. HAS ALSO NOTED THAT THOUGH IT W AS THE CLAIM OF THE APPELLANT THAT HE WAS AN AGRICULTURIST BUT NO AGRICULTURAL INCOME HAD BEEN OFFERED IN THE RETURN OF INCOME FILED U/S 148 OF THE ACT. THOUGH THE COPY OF THIS REMAND REPORT WAS PROVIDED TO THE APPELLANT WHO, HOWEVER, SOUGHT FOR AN ADJOURNMENT OF HEARING AND TILL THE DATE OF PASSING OF THIS APPELLATE ORDER, HE DID NOT COME FORWARD WITH FURTHER EVIDENCES SUCH AS COPIES OF SALE BILLS, PURCHASE BILLS, FULL ADDRESSE S OF THE SELLING PARTIES, DETAILS OF EXPENSES SO INCURRED. HE HAS REPORTED THE HUGE STOCK OF POTATO /POTATO SEEDS BUT DID NOT CLAIM ANY RENT ON ACCOUNT OF GODOWN ETC. AND OWNERSHIP OF SUCH GODOWN WHICH OUGHT TO HAVE BEEN REFLECTED IN THE BALANCE-SHEET. THUS, CONSIDERING ALL THESE DEFECTS AND LACUNA, IT IS HELD THAT THE BOOKS OF ACCOUNTS WERE PREPARED AFTER RECEIPT OF THE ASSESSMENT ORDER AND WITHOUT ANY SUPPORTING EVIDENCES. THE APPELLANT DID NOT FILE THE COPY OF CASH BOOK AND AL SO HAS FAILED TO EXPLAIN THE SOURCES OF SUCH CASH WITH COPIES OF SALES BILLS, EVEN AT THE APPELLATE S TAGE. VIDE SUBMISSION DATED 21.06.2019, THE A.R. OF THE APPELLANT HAS SOUGHT TIME TILL THE FIRST WEE K OF AUGUST, 2019. THIS TIME IS ALSO LAPSED. FROM THE RECORDS, IT IS ALSO EVIDENT THAT EIGHT OPPORTUN ITIES HAVE BEEN AVAILED SO FAR BUT THE APPELLANT HAS FAILED TO COMPLY WITH THE LEGAL REQUIREMENT TO DECIDE HIS APPEAL. CONSIDERING THESE FACTS, THE ADDITION OF RS.14,43,000/- IS CONFIRMED. ACCORDINGL Y, ALL THE GROUNDS RAISED IN RELATION TO THIS ADDITION ARE DISMISSED. I.T.A NO. 1684/AHD/2019 A.Y. 2010-11 PAGE NO ARVINDBHAI MAGANBHAI PATEL VS. ITO 4 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE LD. COUNSEL HAS SUBMITTED THAT ASSESSING OFFICER PASSED ORDER U /S. 144. IT IS FURTHER SUBMITTED THAT ASSESSEE IS AN AGRICULTURALIST AND D URING THE COURSE OF ASSESSMENT HIS LEGAL CONSULTANT WAS NOT AVAILABLE A T HIS PLACE FOR A LONGER PERIOD THEREFORE THE ASSESSEE WAS NOT ABLE TO MAKE COMPLIANCE BEFORE THE ASSESSING OFFICER. IT IS ALSO CONTENDED THAT ASSES SEE WANTED TO SUBMIT ALL THE DETAILS AND EVIDENCES, SOURCE OF CASH DEPOSIT IN TH E SAVING BANK ACCOUNT BUT BECAUSE OF NON-AVAILABILITY OF HIS LEGAL ADVISOR, T HE NECESSARY COMPLIANCE COULD NOT BE MADE. THE LD. COUNSEL HAS SUBMITTED T HAT LD. CIT(A) HAS NOT GRANTED TIME TO PROVIDE THE VOLUMINOUS INFORMATION/ DETAILS IN ADDITION TO THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE. TH E LD. COUNSEL HAS REFERRED PARA 4.4 OF THE ORDER OF THE LD. CIT(A) WHEREIN REF ERRING THE QUERY RAISED IN THE REMAND REPORT OF THE ASSESSING OFFICER, THE ASS ESSEE HAS ASKED FOR ONE MORE OPPORTUNITY TO SUBMIT ALL THE RELEVANT PAPERS POINTED OUT BY THE ASSESSING OFFICER IN THE REMAND REPORT. HOWEVER, THE LD. CIT(A) HAS NOT SPECIFICALLY GRANTED ADDITIONAL TIME TO REPLY THE P OINTS RAISED IN THE REMAND REPORT. ON OTHER HAND, THE LD. DEPARTMENTAL REPRE SENTATIVE HAS SUBMITTED THAT IN SPITE OF GIVING A NUMBER OF OPPORTUNITIES T HE ASSESSEE HAS FAILED TO MAKE THE REQUIRED COMPLIANCE AND HE PLACED RELIANCE ON THE ORDER OF LD. CIT(A). 6. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. AS PER AIR INFORMATION THE ASSESSEE HAD MAINTAINED SAVING BANK ACCOUNT WITH KURKARWADA NAGRIK SAHAKARI BANK LTD. WHERE CASH OF RS. 14,43,500/- WAS DEPOSITED. DURING THE COURSE OF ASSESSMENT, THE A SSESSEE HAS FAILED TO MAKE COMPLIANCE TO THE NOTICES ISSUED BY THE ASSESSING O FFICER. THEREFORE, THE I.T.A NO. 1684/AHD/2019 A.Y. 2010-11 PAGE NO ARVINDBHAI MAGANBHAI PATEL VS. ITO 5 ASSESSING OFFICER HAS OBTAINED THE BANK STATEMENT O F THE SAVING BANK ACCOUNT OF THE ASSESSEE FROM THE BANK AND NOTICED C ASH OF RS. 14,43,000/- DEPOSITED ON DIFFERENT DATES IN THE SAVING BANK ACC OUNT OF THE ASSESSEE. ON ACCOUNT OF NON-COMPLIANCE THE ASSESSMENT WAS FINALI ZED EX-PARTE U/S. 144 OF THE I.T. ACT, 1961 AND THE ASSESSING OFFICER HAS T REATED THE CASH DEPOSITED AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT( A), THE ASSESSEE HAS FURNISHED ADDITIONAL EVIDENCES AND PLEADED THAT SAM E COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER SINCE THE TAX CONSULTA NT OF THE ASSESSEE WAS NOT AVAILABLE AT HIS PLACE FOR A LONGER PERIOD OF TIME. THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE. THE ASSESSEE EXPLAINED THAT HE WAS AN AGRICULTURIST AND MAIN SO URCE OF HIS INCOME WAS FROM AGRICULTURAL ACTIVITIES. IN THIS REGARD, THE ASSESSEE HAS FURNISHED RELEVANT COPIES OF SALE OF AGRICULTURAL PRODUCE AND EVIDENCES OF INCURRING EXPENDITURE PERTAINING TO AGRICULTURAL ACTIVITIES. HOWEVER, THE ASSESSING OFFICER HAS RAISED CLARIFICATION IN HIS REMAND REPO RT ON THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A). TO EXPLAIN THE QUERY RAISED BY THE ASSESSING OFFICER IN HIS REMAND REPORT AND TO FURNISH FURTHER EVIDENCES REQUIRED BY THE ASSESSING OFFICER IN THE REMAND REPORT, THE ASSESSEE HAS ASKED ADDITIONAL TIME FROM THE LD. CIT (A). WITHOUT INDICATING GIVING OF ANY MORE OPPORTUNITY TO THE ASSESSEE IN O RDER TO MAKE COMPLIANCE WITH THE FURTHER INFORMATION SOUGHT BY THE ASSESSIN G OFFICER, THE LD. CIT(A) HAS STATED IN HIS APPELLATE ORDER THAT EVEN AFTER G AP OF ONE MONTH THE ASSESSEE HAS NOT CLARIFIED THE POINTS RAISED BY THE ASSESSING OFFICER. ON PERUSAL OF THE ORDER OF THE LD. CIT(A) AND MATERIAL ON RECORD IT IS DISCERNED THAT NO SPECIFIC OPPORTUNITY WAS COMMUNICATED TO TH E ASSESSEE IN ORDER TO I.T.A NO. 1684/AHD/2019 A.Y. 2010-11 PAGE NO ARVINDBHAI MAGANBHAI PATEL VS. ITO 6 MAKE COMPLIANCE WITH THE FURTHER INFORMATION AND EV IDENCES SOUGHT BY THE ASSESSING OFFICER IN THE REMAND REPORT. IN LIGHT O F THE ABOVE FACT AND CIRCUMSTANCES IT WOULD SERVE THE END OF JUSTICE IF AN OPPORTUNITY IS PROVIDED TO THE ASSESSEE TO FURNISH THE ADDITIONAL INFORMATI ON AND EVIDENCES AS REQUIRED BY THE ASSESSING OFFICER IN THE REMAND REP ORT. NORMALLY, WHENEVER ANY IRREGULARITY CREPT IN THE PR OCEEDINGS THEN AFTER REMOVING THE IRREGULARITY PROCEEDINGS IS TO B E INITIATED FROM THAT STAGE BUT BY REMITTING THE ISSUE TO THE LD. FIRST APPELLA TE AUTHORITY WE WOULD BE MULTIPLYING THE LITIGATION BECAUSE THE LD. CIT(A) WOULD CALL FOR A REMAND REPORT FROM THE ASSESSING OFFICER AND PROCEEDINGS WOULD COMMENCE IN TWO STAGES, IN ORDER TO AVOID THAT SITUATION WE WOULD D EEM IT PROPER TO SET ASIDE THE ORDER TO THE ASSESSING OFFICER FOR DECIDING AFR ESH AFTER AFFORDING OPPORTUNITY TO FURNISH THE INFORMATION/EVIDENCES SO UGHT IN THE REMAND REPORT. IT IS NEEDLESS TO SAY THAT OBSERVATION MAD E BY US WILL NOT INJURE OR IMPAIR THE CASE OF THE ASSESSING OFFICER AND WILL N OT CAUSE ANY PREJUDICE TO THE DEFENCE EXPLANATION OF THE ASSESSEE. THEREFORE , THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15-07-2021 SD/- SD/- (MADHUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 15/07/2021 I.T.A NO. 1684/AHD/2019 A.Y. 2010-11 PAGE NO ARVINDBHAI MAGANBHAI PATEL VS. ITO 7 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,