Shri Keshubhai G. Mandaliya (HUF), RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2(3), RAJKOT-GUJARAT

ITA 175/RJT/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5917 (ITAT-RAJKOT)
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI
• Assessee Lawyers: D R ADHIYA
• Section: 68; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA AND SHRI B.R. JAIN ITA NO. 175/RJT/2013 ASSTT. YEAR : 2005-06 PAN : AAHHN 4986 J SHRI KESHUBHAI G. MANDALIYA (HUF) VS. THE ITO 703, PANCHRATNA TOWER, OPP. PARIMAL SCHOOL WARD- 2 (3) KALAWAD ROAD, RAJKOT RAJKOT (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.R. ADHIYA RESPONDENT BY : DR. JAYANT B JHAVERI DATE OF HEARING : 10.01.2014. DATE OF PRONOUNCEMENT : 27.01.2014 ORDER DATE OF ORDER : /01/2014. PER B.R. JAIN, A.M. THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DAT ED 20-03-2013 OF DR. K. SRINIVAS REDDY LD. CIT (APPEALS)-I, RAJKOT RAISES THE FOLLO WING GROUNDS. 1. THE CIT(A) HAS ERRED IN LAW AND FACTS IN CONF IRMING THE ADDITION OF RS. 13,00,000/-. THE SAME NEEDS DELETION. 2. THE CIT(A) HAS ERRED IN LAW AND FACTS IN NOT AC CEPTING THE RECORDS OF THE RETURNS OF INCOME FILED BY THE FOR ASSESSMEN T YEARS 2003-04 AND 2004-05 AND HAS MADE ADDITION OF RS. 13,00,000/- ON ERRONEOUS AND IRRELEVANT BASE. THE SAME NEEDS DELETION. 3. THE CIT (A) HAS ERRED IN LAW AND FACTS IN NOT AC CEPTING THE FACTUAL POSITION THAT THE AMOUNT OF RS. 13,00,000/- WAS ALR EADY AVAILABLE WITH THE ASSESSEE EVER BEFORE ASSESSMENT YEARS 2003-04 AND 2 004-05 AND HAS MADE ADDITION OF RS. 13,00,000/- ON ERRONEOUS AND IRRELE VANT BASE. THE SAME NEEDS DELETION. 4. TAKING INTO CONSIDERATION, THE LEGAL, STATUTORY, FACTUAL AND ADMINISTRATIVE ASPECTS, NO ADDITION AMOUNTING TO RS . 13,00,000/- OUGHT TO HAVE BEEN MADE. THE ADDITION NEEDS DELETION 2 5. WITHOUT PREJUDICE, THE ASSESSMENT MADE IS BAD IN LAW AND DESERVES ANNULMENT. 6. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND R EASONABLE OPPORTUNITY HAS BEEN PROVIDED. THE ASSESSMENT NEEDS ANNULMENT. 7. THE APPELLANT CRAVES LEAVE TO ADD/ ALTER/ AMEND AND/ OR SUBSTITUTE ANY OR ALL GROUND OF APPEAL BEFORE THE ACTUAL HEARI NG TAKES PLACE. 2.1 BRIEFLY THE FACTS ARE THAT THE ASSESSEE RETURNE D THE INCOME OF RS. 43,815/-. CONSEQUENT TO PROCEEDINGS U/S 263 OF THE ACT, THE A O REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSIT OF RS. 13.00 LACS IN HIS BANK ACCOUNT. SINCE THIS DEPOSIT WAS NOT AT ALL EXAMINED BY THE EARLIER AO BEFORE COMPLE TING THE ASSESSMENT ORDER AND THE ASSESSEE FAILED TO PROVE THE SOURCE AND GENUINENESS OF THE TRANSACTIONS OF CASH SO DEPOSITED IN HIS BANK ACCOUNT, HE PROCEEDED TO MAKE ADDITION U/S 68 OF THE ACT AND COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 13,45, 660/-. 2.2 BEFORE THE LD. CIT(A), THE ASSESSEE'S COUNSEL E XPLAINED THAT THE SAID AMOUNT OF RS. 13.00 LACS WAS CASH AVAILABLE AND REFLECTED IN HIS ACCOUNTS FURNISHED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEARS 2003-04 AND 2004 -05 AND NO NEW DEPOSIT HAS BEEN BROUGHT INTO ACCOUNT IN THE YEAR UNDER CONSIDERATIO N. THE COPIES OF RETURNS OF INCOME FILED FOR BOTH THESE YEARS WERE ALSO FURNISHED. THE LD. CIT(A) THEREAFTER REQUIRED THE ASSESSING AUTHORITY TO VERIFY THE CLAIM. THE AO INF ORMED THAT THE CAPITAL ACCOUNT AND BALANCE SHEET WERE NOT FILED ALONGWITH THE RETURNS FURNISHED BY THE ASSESSEE ON 27-05- 2005 AND 11-02-2005 FOR BOTH THE ASSESSMENT YEARS 2 003-04 AND 2004-05. THE LD. CIT(A), THEREFORE, PLACING RELIANCE ON THE JUDGEMEN T BY THE HON'BLE APEX COURT IN THE CASE OF KALE KHAN MOHAMMAD HANIF VS. CIT (1963) 50 ITR 1 (SC) AND ROSHAN DI HATTI VS. CIT (1997) 107 ITR 938 (SC) HELD THAT THE ASSES SEE HAS NOT PROVED THE SOURCE OF CASH 3 BROUGHT INTO THE CASH BOOK, NEITHER BEFORE THE AO N OR BEFORE HIM. HE ACCORDINGLY UPHELD THE ADDITION. 2.3 BEFORE THE TRIBUNAL, THE ASSESSEE'S COUNSEL SHR I ADHIYA FURNISHED THE WRITTEN SUBMISSIONS, THE COPIES OF ACKNOWLEDGMENT FOR FILIN G RETURNS FOR BOTH THE YEARS I.E. ASSESSMENT YEARS 2003-04 AND 2004-05, CAPITAL ACCOU NT, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT AND CONTENDS THAT THE LD. CIT(A) HAS REJE CTED THE BONA FIDE CLAIM OF THE ASSESSEE WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND THUS HE HAS ERRED IN SUSTAINING THE ADDITION. 2.4 ON THE OTHER HAND, THE LD. DR CONTENDS THAT PER USAL OF ACKNOWLEDGEMENT IN FORM NO. 2D FILED VIDE RECEIPT NO. 008059 DATED 11-02-20 05 DOES NOT INDICATE ANY DOCUMENT ATTACHED WITH THE RETURN OF INCOME FILED BY THE ASS ESSEE. EVEN THE PROFIT AND LOSS ACCOUNT SUBMITTED IS ON THE SAME SHEET ON WHICH CAPITAL ACC OUNT AND BALANCE SHEET ARE LAID BEFORE THE TRIBUNAL WHEREAS ALL THESE THREE DOCUMENTS WERE NOT FOUND ON A SINGLE SHEET LAID BEFORE LD. CIT(A) AND THUS IT IS NOT CORRECT THAT THE ASSESSEE HAS FURNISHED IDENTICAL DOCUMENTS AS ARE CLAIMED TO HAVE BEEN LAID ALONGWIT H THE RETURN. THE CLAIM OF FILING THESE DOCUMENTS WITH THE RETURNS OF EARLIER YEARS I S NOT FOUND CORRECT AS NO SUCH DOCUMENTS ARE ATTACHED IN FACT WITH HIS RETURNS. UN DER THESE CIRCUMSTANCES, THE ASSESSEE'S CLAIM NEEDS TO BE REJECTED AND ORDERS OF THE AUTHOR ITIES BELOW ARE REQUIRED TO BE UPHELD. 2.5 IN THE REJOINDER, THE LD. COUNSEL FOR THE ASSE SSEE CONTENDS THAT THE PHOTOSTAT COPY OF THE ACKNOWLEDGMENT FOR THE ASSESSMENT YEAR 2004 -05 DOES NOT GIVE LEGIBLE PRINT. THE DOCUMENTS ATTACHED WITH THE RETURN AS IS BORNE OUT FROM THE ORIGINAL ACKNOWLEDGEMENT REVEAL THAT THE ASSESSEE HAD ATTACHED THE COMPUTA TION OF INCOME, COPY OF ACCOUNT, PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT, BALANCE SHEET. HE HAS LAID THE ORIGINAL 4 ACKNOWLEDGEMENT OF RETURN ON RECORD FOR PERUSAL BY THE BENCH SO THAT ASSESSEE'S BONA FIDE CLAIM IS ALLOWED, 2.6 WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIA L ON RECORD. THE ACKNOWLEDGMENT NO. 067864 DATED 27-01-2005 FOR FILING THE RETURN O F INCOME IN FORM NO. 2 D FOR ASSESSMENT YEAR 2003-04 REVEALS THE DOCUMENTS ATTAC HED WITH THE RETURN AS UNDER:- COMPUTATION OF INCOME, COPY OF A/C, P&L A/C, CAPI TAL A/C, BALANCE SHEET. ON THE ASSETS SIDE, THE BALANCE SHEET FOR THAT YEAR DISCLOSES THE RESERVES FOR ASSET AT RS. 13.00 LACS . THE ACKNOWLEDGEMENT FOR THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2004-05 IN FORM NO. 2 D VIDE ACKNOWLEDGEMENT NO.008 059 DATED 11-02-2005, THOUGH PHOTOSTAT COPY GIVES FADED PRINT WITH RESPECT TO TH E DOCUMENTS ATTACHED WITH RETURN YET THE ORIGINAL THEREOF LAID ON RECORD REVEALS FOLLOWI NG DOCUMENTS ATTACHED WITH THE RETURN OF INCOME FILED BY THE ASSESSEE. COMPUTATION OF INCOME, COPY OF A/C, P & L A/C , BALANCE SHEET. IN THE ASSETS SIDE OF THE BALANCE SHEET FOR THIS YE AR ALSO, THE ASSESSEE HAS DISCLOSED THE SAME AMOUNT OF RS. 13.00 LACS AS RESERVE FOR ASS ET. IT THUS IS EVIDENT THAT NO NEW ASSET HAS BEEN GENERATED IN THE YEAR UNDER CONSIDERATION . THE ASSESSEE IS FOUND TO HAVE BROUGHT FORWARD THE RESERVES FOR ASSET FROM FI NANCIAL YEAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04 TO ASSESSMENT YEAR 2004-05 AND DEPOSITED THE SAME IN HIS BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION, MERELY BECAUSE THE ASSESSING AUTHORITY REPORTED THAT NO SUCH DOCUMENTS WERE FOUND ATTACHED WITH THE RETURNS OF EARLIER YEARS CANNOT BE TAKEN AS CONCLUSIVE EVIDENCE TO DECIDE TH E ISSUE AGAINST THE ASSESSEE AS THE ASSESSEE HAD PLACED A RELIABLE EVIDENCE ON RECORD TO SHOW THAT SUCH DOCUMENTS IN FACT 5 WERE ATTACHED WITH RETURNS OF INCOME OF EARLIER YEA RS. ANY REMISSNESS ON THE PART OF THE MINISTERIAL STAFF IN THE OFFICE OF ASSESSING AUTHOR ITY IN NOT HANDLING THE RETURN OF INCOME AND ITS ANNEXURE PROPERLY, CANNOT BE TAKEN AS A SOL E BASIS FOR ACTING TO THE PREJUDICE OF THE ASSESSEE. IN THE PRESENT CASE IN APPEAL, THE ASSE SSEE HAD GIVEN A PLAUSIBLE EXPLANATION THAT THE CASH DEPOSITED IN HIS BANK ACCOUNT IS NOT A GENERATION OR INCOME OF THE YEAR UNDER CONSIDERATION BUT IS A BROUGHT FORWARD BALANC E. EVEN OTHERWISE, THERE IS NO CASH CREDIT APPEARING IN THE BOOKS OF ACCOUNT AND THE AM OUNT IS MERELY A DEPOSIT IN HIS BANK ACCOUNT FROM THE RESERVES FOR ASSET ACCOUNT TO BANK ACCOUNT. THIS CANNOT BE A CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT. WE THEREFORE, DO NOT FIND ANY JUSTIFICATION IN SUSTENANCE OF ADDITION OF RS. 13.0 0 LACS AS ASSESSEE'S INCOME U/S 68 OF THE ACT FOR THE YEAR UNDER CONSIDERATION. THE SAME IS , THEREFORE, DIRECTED TO BE DELETED. 3.0 IN THE RESULT, THE APPEAL BY THE ASSESSEE STAND S ALLOWED ORDER PRONOUNCED IN TERMS OF RULE 34(4) OF THE INC OME TAX APPELLATE TRIBUNAL RULES, 1963. SD/- SD/- (T.K. SHARMA) ( B. R. JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MISHRA COPY FORWARDED TO :- 1. SHRI KESHUBHAI G. MANDALIYA (HUF ), RAJKOT 2. THE ITO, WARD- 2 (3), RAJKOT BY ORDER 3. THE CIT (A) 4. THE CIT 5. THE D/R 6. GUARD FILE (ITA NO. 175/RJT/2013) TRUE COPY AR ITAT, RAJKOT.