Shri.Madhukar Prabhu.B.V, Chickmagalur V. DCIT-Central Circle-2(3), Bangalore

ITA 1780/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7135 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SANDEEP GOEL A DDL
• Assessee Lawyers: S N ARAVINDA
• Keywords: Unexplained cash credit; Gift; Business income; Opportunity of being heard; Principle of natural justice; Peak credit
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S . 1778 TO 1781/BANG/2016 ASSESSMENT YEAR S : 2007 - 08 TO 2009 - 10 & 2011 - 12 SHRI MADHUKAR PRABHU B.V., VIJAYASHREE, M.G ROAD, CHIKMAGALUR. PAN: AISPP 7355B VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2 (3), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI S.N. ARAVINDA, ADVOCATE REVENUE BY : DR. SANDEEP GOEL, A DDL. CIT (DR) DATE OF HEARING : 19 .1 2 .2017 DATE OF PRONOUNCEMENT : 20 .1 2 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER; ALL THESE FOUR APPEALS ARE FILED BY THE ASSESSEE WH ICH ARE DIRECTED AGAINST FOUR SEPARATE ORDERS OF LD. CIT (A)-11, BANGALORE ALL DA TED 30.06.2016 FOR ASSESSMENT YEARS 2007-08 TO 2009-10 & 2011-12. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE IN EACH YEAR ARE AS UNDER. ASSESSMENT YEAR 2007-08:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) ORDER DATED 30.06.2016 FOR THE ASSESSMENT Y EAR 2007-08, IS NOT MAINTAINABLE IN LAW AND LIABLE TO BE SET ASIDE. 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, RS. 9,21,80 0/- ADDITIONS WAS MADE BY THE ASSESSING OFFICER IS AGAINST LAW AND LI ABLE TO BE DELETED. ITA NOS. 1778 TO 1781/BANG/2016 PAGE 2 OF 7 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THERE WAS NO UNEXPLAINED CREDIT AND THERE WAS NO CASH TRANSACTION THE ENTIRE TRANSACTION OF T HE APPELLANT. THE APPELLANT WAS DECLARED IN THE RETURNS. THEREFORE WI THOUT APPRECIATE THE FACTS OF THE CASE. THE ASSESSING AUTHORITY MADE ADDITIONS TOWARDS GIFT TO THE APPELLANT AS INCOME OF THE APPELLANT IS EXCESSIVE AND LIABLE TO BE DELETED. 4. ON THE FACTS IN THE CIRCUMSTANCE OF CASE. THE OR DER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE APPELLANT BROUG HT TO NOTICE OF THE ASSESSING AUTHORITY THAT, THE SOURCES INCOME AND DE POSIT DETAILS BUT WITHOUT CONSIDERING THE SAME. THE ASSESSING AUTHORI TY MADE ADDITIONS AND PASSED ORDER IS AGAINST THE LAW. 6. WITHOUT PREJUDICE, CONFIRMING THE LEVY OF TAX AN D LEVIED INTEREST AND PENALTY ARE EXCESSIVE AND ARBITRARY AND OUGHT TO HA VE BEEN DELETED SUBSTANTIALLY. 7. FOR SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING AND IT IS PRAYS THAT KINDLY MAY ALLOW THE APPEAL IN THE INTEREST OF JUSTICE AND EQUITY. ASSESSMENT YEAR 2008-09:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) DATED 30.06.2016 FOR THE ASSESSMENT YEAR 20 08-09 IS NOT MAINTAINABLE IN LAW AND LIABLE TO SET ASIDE. 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THERE IS NO UNEXPLAINED C ASH CREDITS IN THE HANDS OF THE APPELLANT. THUS, THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE EXCESSIVE AND LIABLE TO SET ASIDE. IN T HE INTEREST OF JUSTICE AND EQUITY. 3. ON THE FACTS AND IN THE OF THE CIRCUMSTANCE CASE . THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE ASSESSING AUTHORITY W ITHOUT CONSIDERING THE FACTS OF THE CASE AND NATURE OF THE BUSINESS TR ANSACTION OF THE APPELLANT AND ADDITIONS MADE WAS NOT CORRECT AND LI ABLE TO BE SET ASIDE. 4. ON THE FACTS AND IN THE CIRCUMSTANCE OF CASE. TH E CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE APPELLANT HAD EXPLAINED ALL THE SOURCE OF THE INCOME AND TRANSACTION DURING THE ASSESSMENT PR OCEEDINGS BEFORE ASSESSING OFFICER THUS, THE DISALLOWED THE CLAIM OF THE APPELLANT AND SAME WAS CONFIRMED BY THE CIT (A) IS EXCESSIVE AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE. HENCE BOTH ORDERS LI ABLE TO SET ASIDE. 5. ON THE FACTS AND IN THE OF THE CIRCUMSTANCE CASE . THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE ASSESSING AUTHORITY W ITHOUT PROVIDING THE ITA NOS. 1778 TO 1781/BANG/2016 PAGE 3 OF 7 OPPORTUNITY TO THE APPELLANT. THE ASSESSING AUTHORI TY PASSED ORDER IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 6. WITHOUT PREJUDICE, THE LEARNED CIT (APPEALS) ERR ED IN CONFIRMING THE ADDITIONS AND INTEREST ARE EXCESSIVE AND ARBITR ARY AND LIABLE TO BE DELETED SUBSTANTIALLY. IN THE INTEREST OF JUSTICE A ND EQUITY. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. ASSESSMENT YEAR 2009-10:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) DATED 30.06.2016 FOR THE ASSESSMENT YEAR 20 09-10, IS NOT MAINTAINABLE IN LAW AND LIABLE TO SET ASIDE. 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE ASSESSI NG AUTHORITY MADE ADDITIONS IS NOT CORRECT AND LIABLE TO SET ASIDE. I N THE INTEREST OF JUSTICE. 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT; THE ASSESSI NG AUTHORITY WAS WRONGLY UNDERSTOOD THAT, THE CIT (A) AND ORDER DATE D 25.03.2014. THE ADDITIONS OF RS. 9, 91,500/- ALLOWED WHICH IS N OT CORRECT. THUS, ADDITION MADE BY ASSESSING AUTHORITY IS NOT CORRECT AND LIABLE TO BE SET ASIDE. IN THE INTEREST OF JUSTICE 4. ON THE FACTS AND IN THE CIRCUMSTANCE OF CASE. TH E ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THERE IS NO UNE XPLAINED INCOME IN THE HANDS OF APPELLANT. HENCE THE ADDITIONS ARE LIA BLE TO BE DELETED. 6. WITHOUT PREJUDICE, CONFIRMING THE LEVY OF TAX AN D LEVIED INTEREST AND PENALTY ARE EXCESSIVE AND ARBITRARY AND OUGHT TO HA VE BEEN DELETED SUBSTANTIALLY. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. ASSESSMENT YEAR 2011-12:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) DATED 30.06.2016 FOR THE ASSESSMENT YEAR 20 11-12 IS NOT MAINTAINABLE IN LAW AND LIABLE TO BE SET ASIDE. 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THERE IS NO UNEXPLAINED INCOME IN THE HANDS OF THE APPELLANT AND ALL THE TR ANSACTION WAS EXPLAINED TO ASSESSING AUTHORITY, THESE ADDITION MA DE BY ASSESSING AUTHORITY OF RS.24,01,019/- IS UNCALCULATED AND LIA BLE TO DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE ITA NOS. 1778 TO 1781/BANG/2016 PAGE 4 OF 7 CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE ASSESSI NG AUTHORITY FAILS TO APPRECIATE THAT, THE NATURE OF BUSINESS OF THE APPE LLANT AND WITHOUT APPRECIATING THE TRANSACTION OF THE APPELLANT. THE ASSESSING AUTHORITY DISALLOWED CLAIM OF THE APPELLANT IS AGAINST LAW. T HUS, BOTH ORDERS ARE LIABLE TO BE SET ASIDE. 4. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE ASSESSI NG AUTHORITY FAILS TO APPRECIATE THE FACTS OF THE CASE AND ALL TRANSACTIO N OF THE APPELLANT WHICH WAS MADE THROUGH BANK ONLY. THUS, THE ADDITIO NS MADE BY THE ASSESSING OFFICER ARE EXCESSIVE AND IS LIABLE TO SE T ASIDE. 5. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE RELAYED JUDGMENT BY THE ASSESSING OFFICER WHICH IS NOT APPLICABLE IN THE FA CTS OF THE APPELLANT CASE. 6. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE . THE ORDER OF THE CIT (A) OUGHT TO HAVE APPRECIATED THAT, THE CIT (A) FAILS TO CONSIDER THAT, THE DISALLOWED CLAIM OF THE APPELLANT AND LEV IED THE TAX AND INTEREST UNDER SECTION 234A AND 234B OF INCOME TAX BY ASSESSING AUTHORITY AND THE SAME WAS CONFIRMED BY THE CIT (A) IS EXCESSIVE AND ARBITRARY AND LIABLE TO BE SET ASIDE. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT APAR T FROM OTHER WRITTEN SUBMISSIONS MADE BEFORE CIT(A), ONE MORE WRITTEN SU BMISSION WAS MADE BEFORE HIM BY WAY OF LETTER DATED 27.06.2016 WHICH IS REPRODUCED BY CIT(A) ON PAGE NO. 6 OF HIS ORDER. HE POINTED OUT THAT AS PE R THIS WRITTEN SUBMISSION, IT WAS SUBMITTED BY ASSESSEE THAT THE ADDITIONS HAVE B EEN MADE WITHOUT APPRECIATING THE TRUE FACTS AND CIRCUMSTANCES OF TH E CASE IN A ROUTINE MANNER WITHOUT EVEN PROPERLY LOOKING INTO THE STATEMENT OF SOURCES AND EXPLANATION GIVEN. HE ALSO POINTED OUT THAT IT WAS ALSO SUBMIT TED BEFORE CIT (A) THAT THE ASSESSEES HUF IS ALSO ASSESSED TO TAX AS WELL AS H IS WIFE IS ALSO ASSESSED TO TAX AND THEREFORE, FUNDS OF THE ASSESSEE, HIS HUF A ND HIS WIFE AND OTHER FAMILY MEMBERS SHOULD BE CONSIDERED BECAUSE ALL THE FUNDS ARE HANDLED BY THE ASSESSEE AND WHILE DOING SO, THE FUNDS GET MIXED UP BECAUSE OF THE FACT THAT DAY TO DAY ACCOUNTS CANNOT BE MAINTAINED BUT THE IS SUE WAS DECIDED BY CIT(A) BY WAY OF A CRYPTIC ORDER WITHOUT CONSIDERING ALL T HESE SUBMISSIONS AND THEREFORE, THE ADDITION MADE BY AO AND CONFIRMED BY CIT(A) SHOULD BE DELETED ITA NOS. 1778 TO 1781/BANG/2016 PAGE 5 OF 7 OR MATTER SHOULD BE RESTORED BACK TO CIT(A) FOR FRE SH DECISION BY WAY OF A SPEAKING AND REASONED ORDER. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT (A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST, I REPRODUCE THE WRITTEN SUBMISSIONS FILED BY ASSESSEE BEFORE CIT(A) AS PER LETTER DATED 27.06.2016 WHICH IS REPRODUCED BY CIT(A) ON PAGE NO. 6 OF HIS ORDER. THE SAME IS AS UNDER. MOST OF THE ADDITIONS ARE ON ACCOUNT OF BANK DEPOSI TS. ADDITIONS HAVE BEEN MADE MADE WITHOUT APPRECIATING THE TRUE FACTS AND CIRCUMSTANCES OF THE CASE IN A ROUTINE MA NNER WITHOUT EVEN PROPERLY LOOKING INTO THE STATEMENT OF SOURCES AND EXPLANATION GIVEN. MY HUF IS ALSO ASSESSED TO TAX, MY WIFE IS ALSO ASSESSED TO TAX. FUNDS OF MYSELF, MY HUF, MY W IFE AND OTHER FAMILY MEMBERS ARE HANDLED BY ME AND WHILE DO ING TRANSACTIONS FUNDS GET MIXED DUE TO THE FACTS THAT DAY TO DAY ACCOUNTS CANNOT BE MAINTAINED IN RESPECT OF ALL ABO VE. RECEIPTS AND PAYMENTS ACCOUNT HAVE ALSO BEEN FILED AND THE S AME HAVE NOT BEEN PROPERLY LOOKED INTO. ADDITIONS HAVE BEEN MADE JUST TO AVOID AUDIT OBJECT IONS AND SUSPICION OF HIGHER AUTHORITIES, THINKING THAT LET THIS ISSUE BE DECIDED IN APPEAL. THERE ARE PROPER SOURCES FOR EACH AND EVERY BANK DE POSIT. MOST OF THE DEPOSITS ARE OUT OF OPENING CASH BALANCE, WI THDRAWALS FROM BANK AND BUSINESS RECEIPTS. IN THIS CONNECTION I HAVE ALSO DRAW KIND ATTENTION THAT PEAK BALANCE IN THE ACCOUN T HAS TO BE CONSIDERED AND NOT ALL DEPOSITS. IF SOURCES ARE AVAILABLE FOR PEAK CREDITS NO ADDITION CAN HE MADE. FOR THE ASSESSMENT YEAR 2007-08, ADDITION OF RS.1,4 4,000/- DEPOSITED ON 26/08/2006,RS. 5,77,800/- DEPOSITED ON24/03/2007 AND RS.2,00,000/-TOWARDS GIFT FROM MY BROTHER HAVE BEEN ADDED TO THE INCOME DECLARED. THERE IS A MENTION OF RS. 3,00,000/- LOAN FROM MY FATHER, THIS HAS BEEN D ISCUSSED IN THE ASSESSMENT ORDER BUT WHEN EXPLAINED THAT THERE IS A PROPER SOURCE FOR THE SAME, NO ADDITION HAS BEEN MADE ON T HIS ACCOUNT. AS STATED IN MY GROUNDS OF APPEAL TWO DEPO SITS IN THE BANK ARE FOR THE PURPOSE OF ISSUING DEMAND DRAFTS H AVE BEEN ISSUED ON THEIR BEHALF. AS EXPLAINED IN MY GROUNDS OF APPEAL EVEN SUFFICIENT SOURCES ARE AVAILABLE WITH ME. GIFT OF RS. 2,00,000/- WAS MADE TO ME BY MY BROTHER WHO IS ASSE SSED TO TAX AND SUFFICIENT SOURCES WERE AVAILABLE WITH HIM. ITA NOS. 1778 TO 1781/BANG/2016 PAGE 6 OF 7 5. NOW, I REPRODUCE THE FINDING OF LD. CIT(A) AS AV AILABLE ON PAGE NO. 9 OF HIS ORDER. THE SAME IS AS UNDER. THUS, IT CAN BE SEEN FROM THE ASSESSMENT ORDER THAT THE EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HE HAS D ISCUSSED THAT EXPLANATION CANNOT BE ACCEPTED AS THE APPELLANT DID NOT FURNISH ANY DETAILS OF CHEQUE THROUGH WHICH THE LOAN WAS RECEIV ED NOR ANY DETAIL OF WITHDRAWAL OF CASH BY HIS FATHER AND DEPOSIT OF THE SAME IN THE APPELLANT'S ACCOUNT WAS FURNISHED. BY MISTAKE, HE H AS FORGOTTEN TO ADD WHILE COMPUTING THE TOTAL INCOME. THIS IS A MISTAKE APPARENT FROM RECORD AND CAN BE CORRECTED. THEREFORE, THE ARGUMEN T OF THE APPELLANT THAT IT WAS ACCEPTED BY THE ASSESSING OFF ICER IS NOT CORRECT. HENCE, AS DISCUSSED IN PREVIOUS PARAGRAPHS , THE ADDITION OF RS 2 LAKHS AS UNEXPLAINED GIFT IN THE HANDS OF A PPELLANT IS UPHELD . 6. FROM THE ABOVE REPRODUCTIONS FROM THE ORDER OF C IT(A), IT IS SEEN THAT THE LD. CIT(A) HAS DECIDED THE ISSUE BY WAY OF A CRYPTIC OR DER WITHOUT DEALING WITH THE VARIOUS SUBMISSIONS MADE BEFORE CIT(A). UNDER THES E FACTS, I FEEL IT PROPER TO RESTORE BACK THE ENTIRE MATTER TO THE FILE OF CIT(A ) FOR PASSING A SPEAKING AND REASONED ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. I ORDER ACCORDINGLY IN ALL THE FOUR YEARS B ECAUSE THE ISSUE INVOLVED IN ALL THE FOUR YEARS IS SAME AND THE ORDER PASSED BY THE CIT(A) IS ALSO IDENTICAL. IN VIEW OF THIS DECISION, NO ADJUDICATION ON MERIT IS CALLED FOR.. 7. IN THE RESULT, ALL THE FOUR APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH DECEMBER, 2017. /MS/ ITA NOS. 1778 TO 1781/BANG/2016 PAGE 7 OF 7 COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.