Uttam Marutirao Bankar, Pune V. Income-tax Officer,

ITA 1716/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1284 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Unexplained cash credit; Business income; Principle of natural justice; Additional evidence
• Section: 143(3); 131

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , , BEFORE MS. SUSHMA CHOWLA, J UDICIAL M EMBER . / ITA NO. 1 716 /PN/201 4 / ASSESSMENT YEAR : 200 9 - 1 0 UTTAM MARUTIRAO BANKAR , KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS 1 ST FLOOR, ALANKAR CINEMA BUILDING, NEAR RAILWAY STATION, NEAR RAILWAY STATION, PUNE 411001 . / APPELLANT PAN: ALEPB5576H VS. THE INCOME TAX OFFICER, WARD 3, AHMEDNAGAR . / RESPONDENT / APPELLANT BY : SHRI NILESH KHANDELWAL / RESPOND ENT BY : SHRI B.C. MALAKAR / DATE OF HEARING : 17 .07.2015 / DATE OF P RONOUNCEMENT: 12 .0 8 .2015 / ORDER PER SUSHMA CHOWLA, J M : PER SUSHMA CHOWLA, J M : TH I S APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - IT/TP , PUNE , DATED 1 2 . 0 6 .20 1 4 REL ATING TO ASSESSMENT YEAR 200 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOM E TAX ACT , 1961 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT , THE DISALLOWANCE / ADDITION OF RS.10 , 04 , 315/ - AS UNEXPLAINED CREDI TS & CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IS UNWARRANTED , UNJUSTIFIED, AND CONTRARY TO THE PROV I SIONS AND SCHEME OF THE ACT . IT BE HELD THAT NO SUCH DISALLOWANCE IS WARRANTED AND JUSTIFIED ON FACTS OF THE CASE. THE DISALLOWANCE SO MADE BE ITA NO . 1 716 /PN/20 1 4 UTTAM MARUTIRAO BANK AR 2 DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT . 2 . WITHOUT PREJUDICE TO THE GROUND NO. 1 ABOVE , ON FACT & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS & SCHEME OF LAW , IT BE HELD THAT , THE AUTHORITIES BELOW HAVE ERRED IN NOT AD MITTING THE EVIDENCES THAT , THE AUTHORITIES BELOW HAVE ERRED IN NOT AD MITTING THE EVIDENCES SUBMITTED BEFORE THEM IN TERMS OF PROVISIONS OF RULE 46A . IT BE HELD THAT THE ADDITIONAL EVIDENCES SHOULD HAVE BEEN ADMITTED IN THE CASE TO MEET THE ENDS OF JUSTICE. THE DISALLOWANCE MADE BY NOT ADMITTING THE EVIDENCES IS UNJUSTIF IED & THE SAME BE DELETED. JUST & PROPER RELIEF BE GRANTED TO THE APPELLANT ON THIS SCORE. 3 . THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND , MODIFY , RECTIFY , DELETE , RAISE ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS. 10,04,315/ - ON ACCOUNT OF UNEXPLAINED CREDIT. RS. 10,04,315/ - ON ACCOUNT OF UNEXPLAINED CREDIT. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,49,950/ - . THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF RUNNING OF RESTAURANT. AS PER AIR INFORMATION, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD DEPOSITED CASH OF RS. 25,32,130/ - IN SAVINGS BANK ACCOUNT WITH THE SANGAMNER MERCHANTS CO - OPERATIVE BANK LTD., SANGAMNER. THE ASSESSEE WAS ASKED TO EXPLAIN THE CASH DEPOSIT. IN REPLY, THE ASSESSEE EXPLAINED THAT RS. 6,16,815/ - WAS ON ACCOUNT OF THE BUSINESS RECEIPTS OF THE RESTAURANT, RS. 5,00,000/ - ON ACCOUNT OF CC ACCOUNT WITH SANGAMNER MERCHANT CO - OPE RATIVE BANK LTD. AND RS. 4,11,000/ - WAS ON ACCOUNT OF HAND LOAN RECEIVED FROM HIS FATHER OUT OF HIS AGRICULTURAL INCOME. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD EXPLAINED SOURCE TO THE EXTENT OF RS. 15,27, 815/ - OUT OF CASH DEPOSIT OF RS. 25,32,130/ - . THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF BALANCE AMOUNT OF RS. 10,04,315/ - , WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE AND HENCE, THE SAME WAS ADDED TO THE TOTAL INCOME. 5. DURING THE COURSE OF APPELLANT PROCEEDINGS, THE CLAIM OF THE ASSESSE E WAS THAT THE ASSESSING OFFICER HAD ACCEPTED ONLY SUM OF RS. 4,11,000/ - AS EXPLAINED THAT THE ASSESSING OFFICER HAD ACCEPTED ONLY SUM OF RS. 4,11,000/ - AS EXPLAINED OUT OF TOTAL AGRICULTURAL RECEIPTS OF THE FAMILY AT RS. 14,15,315/ - . THE ASSESSEE ITA NO . 1 716 /PN/20 1 4 UTTAM MARUTIRAO BANK AR 3 SUBMITTED 7/12 EXTRACT OF THE AGRICULTURAL LAND ADMEASURING APPROXIMATELY 5.33 ACRES HELD IN THE NAMES OF HIS PARENTS, WHICH HE CLAIMED THAT IT WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BUT THE SAME WAS IGNORED BY THE ASSESSING OFFICER. THE EXPLANATION OF THE ASSESSEE WAS THAT HIS FAMILY HAD EARNED RS.6,65,000/ - FROM SHARING OF W ATER RESOURCES AND RS. 9,35,000/ - FROM SALE PROCEEDS OF MILK AND RS.7,38,000/ - FROM SALE OF AGRICULTURAL PRODUCE. THE ASSESSEE FAIRLY ADMITTED THAT THE ASSESSING OFFICER HAD ACCEPTED HAND LOAN OF RS. 4,11,000/ - AS RECEIPT FROM HIS FATHER AND THE BALANCE ON ACCOUNT OF AGRICULTURAL INCOME AND PARTLY FUNDED OUT OF RESOURCES OF FAMILY WERE NOT ACCEPTED. THE CIT(A) FORWARDED THE EXPLANATION OF ASSESSEE TO THE ASSESSING OFFICER AND ALSO TO COMMENT ON THE ADMISSIBILITY OF ADDITIONAL EVIDENCE. THE ASSESSING OFFICE R IN THE REMAND PROCEEDINGS RECORDED STATEMENT ON OATH OF SIX PERSONS UNDER SECTION 131 OF THE ACT. HOWEVER, THE ASSESSING OFFICER OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. IN REPLY, THE ASSESSEE EXPLAINED THAT THE ASSESSING OFFICER HAD NOT ASKED FOR ANY OTHER EVIDENCE AND IN CASE THE SAME WAS REQUIRED , THEN HE WOULD HAVE FURNISHED THE SAME. THE ASSESSEE ALSO POINTED OUT THAT THE ASSESSING OFFICER HAD SUMMONED THE CONCERNED PARTIES, WHO IN TURN HAD CONFIRMED THAT RS.6,65,000/ - WAS INDEED PAID BY SIX PARTIES IN TERMS OF AGREEMENT FOR SHARING OF WATER RESOURCES. FURTHER, THE CHAIRMAN OF DOOD UTPADHAK SANSTHA HAD BEEN SUMMONED, WHO CONFIRMED THAT RS. 9,35,000/ - WAS INDEED PAID BY THE SAID SANSTHA TO THE ASSESSEE TOWARDS SUPPLY OF MILK DURING THE PERI OD. THE CIT(A) NOTED THAT THE ASSESSEE HAD ONLY FURNISHED EVIDENCE TO THE EXTENT OF RS. 15,27,815/ - OUT OF TOTAL DEPOSIT OF RS.25,32,130/ - AND IN THE ABSENCE OF ANY EVIDENCE FOR BALANCE CASH DEPOSIT OF RS. 10,04,315/ - , THE ADDITIONAL EVIDENCE FURNISHED BY T HE ASSESSEE WAS NOT ADMITTED AND IT WAS HELD THAT EXPLANATION OF THE ASSESSEE THAT THE SAME WAS MADE OUT OF AGRICULTURAL INCOME, SALE OF MILK AND WATER SHARING WAS AN AFTERTHOUGH T AND HENCE, WAS NOT CREDIBLE , T HE EXPLANATION OF THE ASSESSEE VIS - - VIS SOURC E OF CASH DEPOSIT , HENCE DISMISSED. ITA NO . 1 716 /PN/20 1 4 UTTAM MARUTIRAO BANK AR 4 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT NECESSARY EVIDENCE IN RESPECT OF MILK BUSINESS CARRIED OUT BY HIS FATHER AND ALSO THE AMOUNT RECEIVED FROM PARTIES ON SHARING OF WATER RESOURCES WERE VERIFIED BY THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS, BUT THE SAME WERE NOT ACCEPTED BY THE CIT(A). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER S OF AUTHORITIES BELOW. 9. ON HEARING THE RIVAL CONTENTIONS AND PERUS AL OF RECORD , T HE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE CASH DEPOSIT S MADE IN THE BANK ACCOUNT. THE TOTAL CASH DEPOSIT IN THE BANK ACCOUNT FOR THE YEAR UNDE R CONSIDERATION WAS AGGREGATING TO RS. 25,32,130/ - AS AGAINST WHICH, THE ASSESSING OFFICER ACCEPTED THE EXPLANATION OF THE ASSESSEE TO THE EXTENT OF RS. 15,27,815/ - AND THE BALANCE OF RS. 10,04,315/ - WAS HELD TO BE UNEXPLAINED. THE FIRST PLEA RAISED BY THE A SSESSEE IN THIS REGARD WAS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS , HE HAD CLAIMED THAT TOTAL AGRICULTURAL RECEIPTS OF THE FAMILY WERE OF RS. 14,15,315/ - OUT OF WHICH THE ASSESSING OFFICER ACCEPTED ONLY SUM OF RS.4,11,000/ - . THE ASSESSEE ALONG WIT H HIS FAMILY WAS HOLDING AGRICULTURAL LAND ADMEASURING APPROXIMATELY 5.33 ACRES AND THE SALE PROCEEDS OF THE AGRICULTURAL PRODUCE WAS CLAIMED TO BE AT RS. 7,38,000/ - . ANOTHER SOURCE OF RECEIPT WAS THE SHARING OF WATER RESOURCES WITH DIFFERENT PERSONS TOTAL ING RS. 6,65,000/ - AND ALSO RS.9,35,000/ - FROM SALE PROCEEDS OF MILK. THE ASSESSEE CLAIM S THAT IT HAD FURNISHED THE EXPLANATION BEFORE THE ASSESSING OFFICER , WAS NOT CONTROVERTED BY THE ASSESSING OFFICER NOR ANY FURTHER EXPLANATION WAS CALLED FOR AND ONLY HAND LOAN OF RS. 4,11,000/ - WAS ACCEPTED IN THE HANDS OF THE ASSESSEE AS AGAINST HIS EXPLANATION TO THE EXTENT OF RS.14,15,315/ - . BEFORE THE CIT(A), THE ASSESSEE FURNISHED ADDITIONAL EVIDENCE, WHICH IN TURN, WAS CONFRONTED TO THE ASSESSING ITA NO . 1 716 /PN/20 1 4 UTTAM MARUTIRAO BANK AR 5 OFFICER AND DURI NG THE REMAND PROCEEDINGS, THE ASSESSING OFFICER RECORDED THE STATEMENT OF VARIOUS PERSONS, WHO AGREED TO HAVE PAID AMOUNTS TOTALING RS. 6,65,000/ - ON ACCOUNT OF SHARING OF WATER AND ALSO ENQUIRIES WERE MADE FROM DOODH UTPADAK SANSHTA, WHICH CONFIRMED THAT THE ASSESSEE AND HIS FAMILY W ERE PAID RECEIPTS TOTALING RS. 9,35,000/ - AGAINST SALE OF MILK. THE ABOVE SAID EVIDENCE WAS CORRELATED BY THE ASSESSING OFFICER BUT WAS NOT ADMITTED BY THE CIT(A) BECAUSE AS PER HIM, THE ASSESSEE HAS NOT SATISFIED THE PROVISION S OF RULE 46A OF INCOME - TAX RULES, 1962 ( IN SHORT RULES) . THE SAID RULE LAYS DOWN THAT THE ASSESSEE CAN PRODUCE CERTAIN ADDITIONAL EVIDENCE BEFORE THE CIT(A), WHICH WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER, SUBJECT TO FULFILLMENT OF CONDITIONS LAID DOWN IN THE SAID RULE. ONE OF THE CONDITIONS IS WHERE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING ANY EVIDENCE BEFORE THE ASSESSING OFFICER , WHICH WAS RELEVANT TO ANY GROUND OF APPEAL OR WHERE THE ASSESSING OFFICER HAS MADE THE ORDER AP PEAL ED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE ANY EVIDENCE TO ANY GROUND OF APPEAL. THE CLAIM OF THE ASSESSEE BEFORE US WAS THAT IT HAD EXPLAINED THE SOURCE OF CASH DEPOSIT , AGAINST WHICH NO QUERY WAS RAISED BY THE ASSESSI NG OFFICER AND HENCE, IT WAS PREVENTED BY SUFFICIENT CAUSE IN NOT PRODUCING THE RELEVANT EVIDENCE BEFORE THE ASSESSING OFFICER. IT IS UNDISPUTED THAT THE EVIDENCE OF RECEIPTS IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF SALE OF MILK AND ALSO ON ACCOUNT OF S HARING OF WATER RESOURCES AND THE AGRICULTURAL INCOME OF HIS PARENTS IS AVAILABLE WITH THE ASSESSEE, WHICH HAS BEEN VERIFIED BY THE ASSESSING OFFICER, BY SUMMONING THE PERSONS UNDER SECTION 1 33 OF THE ACT, WHO IN TURN, HAVE ADMITTED THE SAME. IN VIEW OF A BOVE SAID EVIDENCE BEING PRODUCED BY THE ASSESSEE TH OUGH BEFORE THE CIT(A), WHICH IN TURN ESTABLISHES THE CASE OF THE ASSESSEE, THERE IS NO MERIT IN THE ORDER OF CIT(A) IN DENYING TO ADMIT THE SAID SO CALLED ADDITIONAL EVIDENCE. I FIND NO MERIT IN THE ORD ER OF CIT(A) IN THIS REGARD AND IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE THAT WHERE THE ASSESSEE HAD SUITABLY EXPLAINED THE SOURCE OF ITS RECEIPTS, WHICH IN ITA NO . 1 716 /PN/20 1 4 UTTAM MARUTIRAO BANK AR 6 TURN, WERE DEPOSITED IN CASH IN TH E BANK ACCOUNT, THERE IS NO MERIT IN REJECTING THE EXPLANATION OF THE ASSESSEE WITH R EGARD TO THE CASH DEPOSIT OF RS.10,04,315/ - . ACCEPTING THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A) AND IN VIEW OF THE VERIFICATION CARRIED OUT BY THE ASSESSING O FFICER IN REMAND PROCEEDINGS, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.10,04,315/ - . THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 1 0 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER P RONOUNCED ON THIS 12 TH DAY OF AUGUST , 201 5 . SD/ - ( SUSHMA CHOWLA ) / JUDICIAL MEMBER / PUNE ; DATED : 12 TH AUGUST , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - IT/TP , PUNE ; 4. / THE CIT - I , PUNE ; 5. , , - / DR S MC , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE