The ITO, Ward-2(5), Baroda V. Shri Satishkumar Omprakash Pandey, Baroda

ITA 1756/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8313 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 15-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Keywords: Additional evidence; Corroborative evidences
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ITO, WARD - 1(2)(5), 1 ST FLOOR, AAYAKAR BHAVAN, RACE COURSE, BARODA (APPELLANT) VS SATISHKUMAR OMPRAKASH PANDEY, D 8 SAUJANYA SOCIETY, VADSAR G I DC ROAD, M A KARPURA, BARODA - 390010 PAN: ALRPP1205E (RESPONDENT) REVENUE BY : S H RI G.C. DAXINI , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 18 - 09 - 2 017 DATE OF PRONOUNCEMENT : 09 - 10 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2011 - 12 , AR IS ES FROM ORDER OF THE CIT(A) - 5, VADODARA DATED 05 - 02 - 2015 , IN PROCEEDINGS UNDER SECTION 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I T A NO . 1756 / A HD/20 15 A SSESSME NT YEAR 2011 - 12 I.T.A NO. 1756 /AHD/20 15 A.Y. 2011 - 12 PAGE NO ITO VS. SATISHKUMAR OMPRAKASH PANDEY 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF THE LD. CIT(A) IS PERVERSE ON FACTS & IN LAW IN SO FAR AS HE FAILED TO APPRECIATE THAT THERE WAS NO REASON FOR THE ASSESSEE NOT TO PRODUCE EVIDENCES BEFORE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDING AND THAT ACCEPTANCE OF FRESH EVIDENCE WAS WITHOUT JUSTIFICATION. 2. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE FINDINGS OF ASSESSING OFFICER IN REMAND REPORT THAT OUT OF 26 PERSONS ONLY 4 WERE PRODUCED AND ON THE BASIS OF THOSE 4 PERSONS NO RELIEF COULD HAVE BEEN GRANTED TO UNSUBSTANTIATED CLAIM IN RESPECT OF REMAINING 22 PERSONS. 3. THE LD. CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT EVEN THOSE 4 P ERSONS PRODUCED DURING REMAND PROCEEDINGS HAD NO MEANS TO MAKE DEPOSITS AS CLAIMED, AS THEY WERE COMPLETELY UNRELIABLE. 3. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 2,18,760/ - WAS FILED ON 16 TH SEPTEMBER, 2011. SUBSEQUENTLY, THE CASE WAS S ELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) ON 26 TH SEPTEMBER, 2012. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON VERIFICATION OF AIR INFORMATION, THE ASSESSING OFFICER HA D NOTICED THAT THERE WAS CASH DEPOSIT IN THE SAVING BANK ACCOUNT OF TH E ASSESSEE MAINTAINED W ITH UNITED BANK OF INDIA O LD PAD RA ROAD, BARODA. THE ASSESSING OFFICER HAS OBSERVED THAT THE CASH WAS DEPOSITED ON DIFFERENT DATES DURING THE PERIOD FROM 7 TH APRIL, 2010 TO 30 TH MARCH, 2011 AND TOTAL AMOUNT OF DEPOSIT WAS FOUND TO BE RS. 28,59,100/ - . IN SPITE OF PROVIDING OPPORTUNITIES D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS NOT MADE ANY COMPLIANCE TO SUBSTANTIATE THE IMPUGNED DEPOSIT FOUND IN THE AFORESAID BANK ACCOUNT OF THE ASSESSEE. CONSEQUENTLY, THE ASSES SMENT WAS COMPLETED U/S. 144 OF THE ACT BY MAKING ADDITION OF RS. 28,59,137/ - AS UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE. I.T.A NO. 1756 /AHD/20 15 A.Y. 2011 - 12 PAGE NO ITO VS. SATISHKUMAR OMPRAKASH PANDEY 3 THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSE E BY OBSERVING AS UNDER: - 4.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFICER. AT THE OUTSET, IT IS SEEN THAT THE APPELLANT DID NOT COOPERATE WITH THE ASSESSING OFFICER DURING THE ASSESSME NT PROCEEDINGS WHICH COMPELLED THE ASSESSING OFFICER TO PASS ORDER U/S 144. THE ASSESSING OFFICER H AS ALSO LEVIED PENALTY U/S 271(1 )(B) OF THE ACT AGAINST WHICH NO APPEAL IS FILED BY THE ASSESSEE. THUS, THE PASSING OF ORDER U/S 144 OF THE ACT IS FULLY JUST IFIED. IN APPEAL IT IS STATED THAT THE APPELLANT WAS TRANSFERRED TO SURAT AND, THEREFORE, COULD NOT FILE REQUISITE DETAILS BEFORE THE ASSESSING OFFICER. HE FILED ADDL. EVIDENCE BEFORE ME WHICH WERE FORWARDED TO THE ASSESSING OFFICER FOR VERIFICATION. THE A SSESSING OFFICER INITIATED ENQUIRY BUT IN UNPRODUCTIVE MANNER. HE MISDIRECTED HIMSELF AND STARTED PROBING THE FINANCIAL WORTH OF THE PERSONS WHO PAID CASH TO THE APPELLANT FOR PURCHASE OF POLICIES OF FUTURE GENERALI INDIA LIFE INSURANCE COMPANY LIMITED WIT H WHOM THE ASSESSEE IS EMPLOYED DURING THE YEAR UNDER CONSIDERATION AS AGENT. THOUGH, THE ASSESSING OFFICER ASKED THE ASSESSEE TO CO - RELATE THE DATES OF THE ALLEGED DEMAND DRAFTS/PAY ORDERS ISSUED BY THE UNITED BANK OF INDIA VIS - A - VIS THE AMOUNTS DEBITED F ROM HIS ACCOUNT, HE FAILED TO APPRECIATE THAT IN FACT EACH AND EVERY CASH DEPOSIT IN BANK IS FOLLOWED BY DEMAND DRAFT/PAY ORDER IN FAVOUR OF FUTURE GENERALI INDIA LIFE INSURANCE COMPANY LIMITED WHICH HAS ACKNOWLEDGED RECEIPTS OF THOSE DEMAND DRAFT/PAY ORDE RS ALONG WITH THE AGENT'S CODE NUMBER AND POLICY NUMBERS ISSUED TO THE PROSPECTIVE BUYERS. THE ASSESSING OFFICER HAD CALLED SEVERAL PERSONS AND EXAMINED THEM. NONE OF THEM HAS DENIED PAYMENT CASH TO THE APPELLANT FOR BUYING POLICIES OF FUTURE GENERALI INDI A LIFE INSURANCE. THUS, NO ADVERSE INFERENCE WAS DRAWN BY THE ASSESSING OFFICER EVEN DURING REMAND PROCEEDINGS ABOUT THE CONTENTION OF THE APPELLANT THAT THE SOURCE OF CASH DEPOSITS TO HIS ACCOUNT ARE THE PROSPECTIVE CLIENTS. THE ASSESSING OFFICER MAY HAVE DOUBTS ABOUT THE SOURCE OF CASH AVAILABLE WITH THE CLIENTS BUT THAT IS NOT THE SUBJECT MATTER OF APPEAL. IT IS ALSO FOUND THAT IN MOST OF THE CASES, THE PAY ORDERS/BANK DRAFTS ARE ISSUED BY THE BANK ON THE SAME DAY ON WHICH CASH IS DEPOSITED BY THE APPELL ANT. THUS, FROM THE DETAILED WRITTEN SUBMISSIONS OF THE AR, REMAND REPORT OF THE ASSESSING OFFICER, COPIES OF THE ACKNOWLEDGEMENTS ISSUED BY FUTURE GENERALI INDIA LIFE INSURANCE TO ITS CLIENTS, COPIES OF THE PAY ORDERS/BANK DRAFTS AND COPY OF THE BANK STAT EMENT OF THE APPELLANT, IT CLEARLY TRANSPIRES THAT THE CASH DEPOSITS OF IN HIS SAVINGS ACCOUNT NO.1454010002592 MAINTAINED WITH UNITED BANK OF INDIA, AMOUNTING TO RS.28,59,100/ - ARE FULLY EXPLAINED. IN VIEW OF THE DETAILED DISCUSSION ABOVE, THE ADDITION MA DE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, LD. DEPARTMENTAL REPRESENTATIVE HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DECIDING THE CASE ON THE GROUND THAT ALL THE CASH DEPOSITED IN THE SAVING ACCOUNT HAS BEEN FULLY EXPLAINED. HE FURTHER CONTENDED THAT THE ASSESSEE HAS EXPLAINED THE TRANSACTIONS IN RESPECT OF 4 PERSONS OUT OF THE 26 PERSONS BEFORE THE ASSESSING OFFICER , THEREFORE THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT ALL THE TRANSA CTIONS HAS BEEN FULLY EXPLAINED. I.T.A NO. 1756 /AHD/20 15 A.Y. 2011 - 12 PAGE NO ITO VS. SATISHKUMAR OMPRAKASH PANDEY 4 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. WE HAVE NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS OBSERVED A NUMBER OF CASH DEPOSITS FO R THE PERIOD 07.04.2010 TO 30 - 03 - 2011 ON DIFFERENT DATES AS ELABORATED AT PAGE 3 OF THE ASSESSMENT ORDER IN THE SAVING BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH THE UNITED BANK OF INDIA O LD PADRA ROAD BRACH, BARODA. IN SPITE OF PROVIDING NUMBER OF OPPO RTUNITI ES , THE ASSESSEE H AS FAILED TO MAKE COMPLIANCE BEFORE THE ASSESSING OFFICER, THEREFORE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S. 144 OF THE ACT AFTER MAKING ADDITION OF R S. 28,59,137/ - AS UNEXPLAINED CASH DEPOSITS. 6. DURING THE COUR SE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE EXPLAINED THAT HE IS A SALARIED PERSON EMPLOYED WITH THE FUTURE GENERALI INDIA LIFE INSURANCE CO. LTD. IT WAS FURTHER SUBMITTED BEFORE THE LD. CIT(A) THAT THERE WAS A N ORAL UNDERSTANDING BET WEEN THE ASSESSEE AND THE CUSTOM ERS OF HIS EMPLOYERS TO RECEIVE CASH AND PURCHASE LIFE INSURANCE POLICIES BY PAYING THE SAID AMOUNT THROUGH HIS AFORESAID SAVING BANK ACCOUNT. WE OBSERVED THAT THE EVIDENCES FILED BEFORE THE LD. CIT(A) WERE FORWARDED TO THE ASSESSING OFFICER FOR FURTHER VERIFICATION. THE ASSESSING OFFICER HAS REPORTED THAT HE HAS RECEIVED EXPLANATION ONLY IN RESPECT OF 6 PERSONS OUT OF THE 26 PERSONS IN THE LIST. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE CONSIDERED THAT THE LD. CIT( A) HAS NOT BROUGHT ON RECORD THE SPECIFIC SUPPORTING EVIDENCES/DETAILS TO SUBSTANTIATE TH E IMPUGNED CASH WAS RECEIVED FROM THE CLIENTS TOWARDS PURCHASE OF POLICIES OF FUTURE I.T.A NO. 1756 /AHD/20 15 A.Y. 2011 - 12 PAGE NO ITO VS. SATISHKUMAR OMPRAKASH PANDEY 5 GENERAL I INDIA LIFE INSURANCE COMPANY LTD. AFTER CONSIDERING THE ABOVE, WE OBSERV ED THAT THE ASSESSMENT IN HIS CASE WAS FINALIZED U/S. 144 AS THE ASSESSEE HAD NOT SUBMITTED THE REQUIRED SPECIFIC DETAILS BEFORE ASSESSING OFFICER IN RESPECT OF CASH DEPOSIT RECEIVED FROM THE CLIENTS FOR PURCHASE OF POLICIES AS STATED SUPRA IN THIS ORDER. THEREFORE, IN THE INTEREST OF JUSTICE, WE CONSIDERED IT WILL BE APPROPRIATE TO RESTORE THIS CASE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE MATTER RELATING TO SUBJECT MATTER OF THE APPEAL AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITIES TO THE ASS ESSEE . 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PR ONOUNCED IN THE OPEN C OURT ON 09 - 10 - 201 7 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOU NTANT MEMBER AHMEDABAD : DATED 09 /10 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,