Shri Ravinder Kumar, KArnal V. ITO-Ward-3, Ambala

ITA 170/CHANDI/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6916 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2017-2018
• Appeal Filed On: 28-06-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA
• Keywords: Opportunity of being heard; Onus to prove
• Section: 37; 90; 43

Judgement Text

आयकर य कर , य य “ब ” , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH एन. के. सैन , य एवं सं"य #, य य$क स%&य BEFORE: SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICAL MEMBER आयकर अपील सं./ ITA No.170/Chd/2021 / Assessment Year : 2017-18 Ravinder Kumar M/s Ravinder Papita Store Shop No.32, Subzi Mandi, Karnal. ब म Income Tax Officer, Ward-3, Ambala. ./PAN NO: BCRPK3146H /Assessee by : Shri Dhruv Goel, CA / Revenue by : Shri Ashok Khanna, Addl. CIT ! /Date of Hearing : 23.11.2021 "#$% ! /Date of Pronouncement: 07.12.2021 202 1 (Hearing Through Video Conferencing) आदेश/Order Per Sanjay Garg, Judicial Member : The p r e s e nt a p p e a l h a s be e n f il e d by t he a s s e ss e e a g a i ns t t he o r de r o f t he C o mmi s s i o n e r o f I nc o me Ta x (A pp e a ls ), N a t io na l F a c e le s s A ppe a l C e n t re (N FA C ), De lh i , (i n s ho rt r e fe r re d to a s C I T(A ) d a t e d 1 7. 0 3. 2 0 21 re la t in g t o ITA No.170/Chd/2021 A.Y. 2017-18 Page 2 of 7 a s s e s s me nt y e a r 2 0 1 7 - 1 8, pa s s e d u /s 2 5 0 (6 ) o f t h e In c o me Ta x A c t , 1 96 1 ( h e r e i na f te r re fe r re d t o a s “ A c t ” ). 2. Th e a s s e s s e e in t h is a p p e a l h a s t a k e n f o ll o w i ng g r o u n d s : “1. That learned CIT A has erred on facts and in law in confirming the addition of Rs. 5,37,966/- by estimating sales turnover at Rs. 1,44,15,075/- instead of actual sales of Rs. 90,17,838/- and applying net profit rate of 8% on alleged turnover. 2. That learned CIT A has erred in law and facts in confirming the action of AO in taking total bank deposit at Rs. 1,44,15,075/- and adopting the same as sale turnover. 3. That learned C1TA has erred in law and facts in confirming the action of AO wherein additions are made without issue of any show cause notice under e Assessment proceedings. 4. `That the learned CIT A has erred in law and facts in completing the appellate proceedings without providing reasonable opportunity of being heard. 5. That Appellant craves leave to add, alter, amend or to substitute the above grounds of appeal either before or at the time of hearing of case.” 3. Th o u g h t h e R e g i s t r y ha s p o in t e d o u t t h a t t he a p pe a l is t ime ba r r e d b y 4 3 d a y s , h o w e v e r , i n v ie w o f t h e de cis io n o f t he H o n ' b le Su p re me C o u rt da t e d 23 . 0 9. 2 02 1 i n MA N o.6 6 5 o f 2 0 2 1 i n S MW ( C ) N o .3 o f 20 2 0 , t h e p e r i o d o f f i li ng a p pe a l du r in g t he C o v id - 1 9 P a nd e mi c is t o be e x c l u de d fo r t he pu r po s e o f c o u nt in g t he l i mit a t io n pe r io d . I n v ie w o f t h i s , t he a p pe a l i s t re a t e d a s f i le d w i t hi n t h e li mi t a t i on p e r i o d . ITA No.170/Chd/2021 A.Y. 2017-18 Page 3 of 7 4. N o w c o min g t o t he f a c t s o f t he ca s e , t he a s s e s s ee f i le d e - re t u r n o f i n c o me de c l a r in g t he in c o me o f R s .6 , 1 5 ,14 0 /- a s in c o me f r o m ‘ b u s i n e s s a nd p ro fe s s i o n ’ . Th is c a s e w as s e le c te d fo r l imi t e d s c ru t i ny t o e x a min e t h e s o u rc e o f t o t al c a s h d e p o s it s o f R s . 6 3. 4 3 l a c s i nt o t h e t w o b a n k acc o u n t s o f t he a s se s se e ma in t a i ne d i n I CI CI B a n k. Th e a s s e s s e e e x p la ine d t ha t th e t o t a l c a s h de p o s i t s w e re mu c h more i .e . R s . 1. 4 4 c ro re s a s a g a i ns t R s . 6 3, 4 3 l a c s p o i nt e d o u t by t he A O . Th e a s s e s s e e e x p l a i ne d t ha t t he a s s e s s e e w a s d oin g t he bu s i ne s s o f s a l e o f f r u i t s mo re s p e c if i c a l ly o f p a pa y a . I t w a s e x p la ine d t ha t th e a s se s se e u se d t o pu r c h a s e pa pa y a f ro m fa r me r s a nd t r a d e r s a nd s e l l t he s a me t o t h e lo c a l t r a d e r s of A mb a la , S h a hb a d , B a r a ra a nd o t he r ne a r b y a re a s . The a s s e s se e e nc lo s e d hi s ba n k a c c o u n t s t a t e me n t a n d g av e de t a i le d e x p l a na t io n o f t he c a s h d e p o s i t s a l o ng wi t h c a s h bo o k, e t c . . H o we v e r , t he Ld . A O e s t i ma t e d t h e i nc o me o f t he a s s e s se e @ 8 % o f t o t a l c a s h de po s i t e d in t he b a nk ac c o u nt a t R s .1 1 . 53 la c s . Th e A O f u r t he r no t e d t h a t t he a s se s se e ha s a ls o s ho w n p r o f it s @ 8 % o n t h e t o t a l t u r no v e r o f R s. 9 0. 1 7 la c s a t R s . 6 .1 5 l a c s . Th e A O a d d e d t he r e ma i n in g a mo u n t o f R s . 5. 3 7 l a c s i nt o t he i nc o me o f t he a s se s s e e . 5. Th e Ld .C I T(A ) c o n fi r me d t h e a d d it io n s o ma d e b y t he A O . ITA No.170/Chd/2021 A.Y. 2017-18 Page 4 of 7 6. B e f o re u s , t h e Ld .C o u n s e l f o r t he a s s e s s e e ha s s u b mi t t e d t ha t t he a s s e s s e e ha d g iv e n t he de t a i ls of c a s h de po s i t s a n d ha d a l s o e x pl a i ne d t ha t s o me o f t h e c ash de po s i te d w a s o u t o f t h e w i t hd r a w a l s ma d e b y t h e a ss e ss e e fr o m t he b a nk a c c o u n t . The Ld .C o u ns e l f o r t he a s s e ss e e in v i t e d o u r a t te nt i o n t o p a g e 3 o f t he P a pe r B o o k to s u b mit t ha t a d e t a il e d re p ly w a s fu r ni s h e d b y t h e a s se s s e e t o t he A O . A pe r u s a l o f t h e a fo re s a i d r e p l y d a te d 17 .1 2 .2 01 9 re ve a ls t h a t t he a s s e s se e h a d n o t o n l y f u r n is he d t he c o p y of ba n k a c c o u n t s t a t e me nt f o r th e f in a n c i a l ye a r u n de r c o n s i de r a t i o n bu t h a d a ls o g i ve n a c ha r t e x p la in in g t he de t a i ls o f t he c a s h d e p o s it e d w h i c h i nc lu d e d t he a mo u nt re ce i v e d f r o m s u p p li e r s a nd de b to r s a nd a ls o o u t o f t he c a s h wi t h d ra wn fr o m t he b a n k a pa r t fr o m o p e n i ng c a s h , e tc . The A O h a s a l s o me n t io ne d i n p a r a 4 o f t he a s se s sme n t ord e r t ha t t h e a s se s se e ha d a l s o fu r ni s h e d c a s h b o o k w ith t h e A O. Ho w e ve r , a pe r us a l o f t he a s se s s me nt o r de r re v e a l s t ha t t ho u g h t h e A O ha s me n t i o n e d i n p a r a 4 o f t he as s e s sme nt o r de r t h a t t he as s e s s e e h a s fi le d r e p l y a l o n g w i t h th e c a s h bo o k, h o w e v e r t he A O h a s no t d i sc u s s e d a s i ng le w o rd a b o u t t he re p l y a nd ca s h bo o k fi l e d by t h e a s s e s s e e . The A O s i mpl y t o o k t h e e n t i re de p o s i t s o f R s . 1 .4 4 c r o r e s as s a l e o f t he a s se s se e a n d e s t i ma t e d t he pr o f i t s @ 8 %, w he r e as , t he a s s e s se e h a d du l y e x p l a ine d t ha t h i s s a le t ur no v e r w as ITA No.170/Chd/2021 A.Y. 2017-18 Page 5 of 7 R s . 90 . 1 7 la c s a n d t ha t t h e r e ma i ni n g a mo u nt wa s d e po s i te d o u t o f t h e c a s h w i t h dr a w n f r o m t h e ba n k b y t he a s s es se e . Th e a s s e s s e e , in o u r v i e w , ha d g iv e n a fa ir p i c tu r e o f hi s a c c o u nt s t o t h e A O. Th e A O h a d i nf o r ma t i o n o nl y o f c a s h de po s i te d o f R s .6 3 . 43 l a c s , w he r e a s , t h e a s s e s se e ca me w i t h t he a c t u a l f i g u r e o f R s .1 . 4 4 c o r e s a n d e x p la i n e d a bo u t t he s o u rc e o f de p o s it s . H o w e v e r , t he A O by w a y o f a c r ypt ic o r de r br u s he d a s i d e t he a ll s u b mis s i o n s ma d e b y t he a s s e s se e w i t ho ut a n y d i s c u s s io n a n d s i mpl y ma d e t he imp u g ne d a d d i t i o n, w hi c h i n o u r v i e w , is no t s u s t a ina b l e in t he e ye s o f l a w . Th e Ld .C o u n s e l f o r t he a s s e s se e , in t h is re s pe c t , ha s re l ie d u p o n t he o r de r o f t he H o n ' b le Ju r is d ic t i o na l P u nj a b & H a ry a na H ig h C o u rt i n t h e ca s e o f C I T V s . Pa r n e e t a Go y a l, in c o me Ta x A pp e a l N o . 2 78 o f 2 0 1 0 da t e d 0 7 .0 2 .2 0 11 w he re in t h e H o n ' b l e H i g h C o u r t u n de r s o me w h a t s imi l a r c i r c u ms t a n c e s h a s u p he ld t he or d e r o f t he Tr i b u n a l s e t t i n g a s i de t he a d d it i o n ma d e b y th e A O of s o me w h a t s i mil a r n a t u r e . Th e re le v a n t pa r a o f t he or de r of t he H o n ' b le H i g h C o u r t ( s u p ra ) is r e p r o d u ce d he re u nd e r : “4. During hearing of this appeal, it was pleaded by the learned counsel for the assessee that each and every entry was duly explained to the Assessing Officer by giving its narration and complete cash book was produced. This factual matrix was not controverted by the Revenue. Even the assessee vide her letter dated 24 12.2007 explained her position. As far as the contention of the learned DR that the assessee made frequent ITA No.170/Chd/2021 A.Y. 2017-18 Page 6 of 7 withdrawals/ deposits in the respective accounts, we are of the view that there is no bar in depositing or withdrawing the amounts unless and until some foul play is brought on record. Even if, the argument of the assessee that the amounts were deposited/withdrawn, as the assessee wanted to purchase a residential property is not accepted, still there is no bar. Even in the impugned order, the stand of the assessee was not found convincing in the fight of the decision in the case of Sumiti Dayal, we are of the view that the ratio of preponderance of human probability is applicable to both sides. The paper book filed by the assessee (running into 59 pages) contains cash book for financial year 2004-05, bank statement of Indusfnd Bank Account No. 782245 and 782828, bank statement of Vijaya Bank, copy of books of account along with relevant entries, various replies filed by the assessee clearly shows that the assessee furnished the necessary details. As far as the plea of the learned DR that bulky information was filed by the assessee itself cannot be the basis of addition and for this proposition, we are fortified by the decision in the case of Narndra G. Goradia (HUF) Vs. CIT (234 ITR 571) (Bom). In the absence of any specific defect or rejection of books of account, the information/books of account filed by the assessee simply cannot be brushed aside. The additions seem to be on the basis of suspicion, conjecture and surmises, therefore, such additions cannot be sustained Our view is fortified by the decision from the Hon'ble Apex Court in the case of Lal Chand Bhagat Ambika Ram Vs. CIT (37 ITR 288) (SC), therefore, in the absence of any cogent reasoning and adverse material, such plea of the Revenue cannot be sustained. We are in agreement of the learned DR only to the extent that the assessee has to establish the nexus. Admittedly, the burden to prove the source of receipt is on the assessee but such an onus has been discharged by producing the relevant record. Under the aforesaid facts, we are of the view that when the The deposits made by the assessee were held to be genuine by the Tribunal after appraisal of bank statements of Indus Ind Bank and Vijaya Bank in which she had the account and also after perusal of copy of entries of withdrawals and deposits in the accounts being operated by her. Learned counsel for the Revenue could not show that the findings recorded by the Tribunal holding the cash deposits to be genuine were liable to be interfered with. In view of this, no substantial question of law arises for consideration by this Court. ITA No.170/Chd/2021 A.Y. 2017-18 Page 7 of 7 In view of the above, finding no merit in the appeal, the same is dismissed.” 7. Th e a b o v e o b s e r v a t io ns ma d e b y t he H o n' ble H ig h C o u r t a re d u l y a p p li c a b l e t o t he fa c t s a n d c i r c u ms t a n c e s o f t he c a s e in h a nd . I n v i e w o f t he a bo ve d i s c u s s i o n, t h e a d d i t io ns ma de b y t h e l ow e r a u t h o r i t ie s a r e he re b y o r de re d t o be de le te d . 8. I n t he re s u l t , t he a p pe a l o f t he a s se s s e e s ta nd s a ll o w e d . O r de r p r o n o u n c e d o n 2 0 2 1 . Sd/- Sd/- (N.K.SAINI) (SANJAY GARG) /VICE PRESIDENT ) %& / Judicial Member Dated: 07.12.2021 *रती* आदेश ' ( ) *े) / Copy of the order forwarded to : 1. +/ The Appellant 2. ', +/ The Respondent 3. आ र आ - / CIT 4. आ र आ - ( )/ The CIT(A) 5. ) . / ' 0 , आ र ! आ0 र , 123 /4/ DR, ITAT, CHANDIGARH 6. / 3 फ ई / Guard File आदेश स र/ By order, सह ंज र/ Assistant Registrar