ITO, Kishangarh V. GIRDHAR GOPAL LAHOTI, Kishangarh

ITA 187/JPR/2011

• Counselvise Citation: 18723114 RSA 2011
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Keywords: Rule of consistency; Revised return
• Section: 69; 148

Judgement Text

1 ITA 187(2)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 187/JP/2011 ASSTT. YEAR : 2005-06. THE INCOME-TAX OFFICER, VS. SHRI GIRDHAR GOPAL LA HOTI, KISHANGARH. 16-B, VIRAT NAGAR, MADANGANJ, KISHANGARH. (APPELLANT) (RESPONDENT) C.O. NO. 43/JP/2011 ( ARISING OUT OF ITA NO. 187/JP/2011 ) ASSTT. YEAR : 2005-06. SHRI GIRDHAR GOPAL LAHOTI, VS. THE INCOME-TAX OFF ICER, MADANGANJ, KISHANGARH. KISHANGARH. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : NONE DATE OF HEARING : 25.08.2011 DATE OF PRONOUNCEMENT : 09.9.2011. ORDER DATED : 09/09/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AND CROSS OBJECTIO N BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. THE DEPARTMENT HAS TAKEN AS MANY AS 6 GROUNDS IN ITS APPEAL, HOWEVER, THEY RELATE TO ONE ISSUE I.E. RESTRICTING THE ADDITION OF RS. 2 0,29,000/- TO RS. 2,00,280/- MADE BY AO 2 UNDER SECTION 69 ON ACCOUNT OF UNEXPLAINED DEPOSIT IN SAVINGS BANK ACCOUNT BY APPLYING GROSS PROFIT RATE OF 10% AT THE END OF LD. CIT (A). 3. THE LD. D/R HAS STATED THAT THE TRIBUNAL IN THE CASE OF NAWAL KACHOLIYA FOR ASSESSMENT YEAR 2005-06 IN ITA NO. 1601/JP/2008 DAT ED 20.3.2009 HAVE TAKEN A DIFFERENT VIEW WHEREAS THE LD. CIT (A) HAS FOLLOWED VARIOUS OTHER DECISIONS OF TRIBUNAL DISCUSSED IN HIS ORDER. IT WAS ALSO SUBMITTED THAT ASSESSEE FAILED TO EXPLAIN THE DEPOSITS MADE IN HIS BANK ACCOUNT OPERATING IN IDBI BANK. H E HEAVILY RELIED UPON THE ORDER OF AO. 4. ON THE OTHER HAND, NONE APPEARED ON BEHALF OF TH E ASSESSEE. THE APPEAL IS BEING DISPOSED OFF AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A) AND SUBMISSIONS OF LD. D/R. 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). WE NOTED T HAT LD. CIT (A) AFTER CONSIDERING THE DETAILED SUBMISSIONS AND ALSO TAKING INTO CONSIDERA TION VARIOUS CASE LAWS INCLUDING THE VARIOUS DECISIONS OF JAIPUR BENCH OF THE TRIBUNAL A ND THE DECISION IN CASE OF SMT. ANITA CHAUDHARY DECIDED IN ITA NO. 733/JP/2009 DATED 7.5. 2010 WHEREIN BOTH OF US ARE THE PARTY, HELD THAT THE DEPOSITS MADE IN THE BANK ARE NOTHING BUT ARE DEPOSITS ON ACCOUNT OF TURNOVER OF THE ASSESSEE, THEREFORE, ENTIRE DEPOSIT S WERE TREATED AS TURNOVER OF THE ASSESSEE AND BY APPLYING GROSS PROFIT RATE OF 10% ALTERED TH E ADDITION TO RS. 2,02,900/-. ASSESSEE HAS SHOWN INCOME ON THESE RECEIPTS AS COMMISSION IN COME AT RS. 1,04,110/- AS HE HAS STATED THAT HE WAS PURCHASING THE GOODS ON BEHALF O F CUSTOMERS AND WERE SUPPLYING TO THEM AFTER TAKING AMOUNT FROM THE RESPECTIVE PARTIE S AND THE AMOUNT WAS GIVEN TO THE PARTY CONCERNED FROM WHOM THE MATERIAL WAS PURCHASE D. ACCORDINGLY THE ADJUSTMENT OF 3 RS. 1,04,110/- WAS MADE AND IN THIS WAY A TOTAL ADD ITION OF RS. 98,790/- WAS CONFIRMED BY LD. CIT (A). IDENTICAL FACTS WERE INVOLVED IN C ASE OF SMT. ANITA CHAUDHARY AND THE FINDING OF THE TRIBUNAL HAS BEEN REPRODUCED IN THE ORDER OF LD. CIT (A) AT PAGES 8 & 9 OF HIS ORDER. IN CASE OF SMT. ANITA CHAUDHARY ALSO, I DENTICAL FACTS WERE INVOLVED AS AO MADE ADDITION OF RS. 25,20,272/- ON ACCOUNT OF DEPO SITS IN THE BANK. THE LD. CIT (A) TREATED THE DEPOSITS AS TURNOVER AND APPLIED A GROS S PROFIT RATE OF 8.78%. HOWEVER, TRIBUNAL APPLIED A RATE OF 10% ON THE TOTAL DEPOSIT S CONFIRMING THE VIEW OF LD. CIT (A) THAT THESE DEPOSITS ARE NOTHING BUT TURNOVER OF THE ASSESSEE. THIS IS ALSO A MATTER OF FACT THAT THIS IS NOT THE CASE THAT ENTIRE DEPOSITS OF R S. 20 LACS OR ODD WERE REMAINED IN THE BANK. IT WAS THE TOTAL OF INCOMING IN BANK ACCOUNT . OUT-GOING HAS NOT BEEN TAKEN INTO CONSIDERATION BY AO NOR THERE WAS ANY ASSETS FOUND CREATED IN THE HANDS OF THE ASSESSEE OF RS. 20 LACS OR ODD. THEREFORE, IN OUR CONSIDERED VIEW THE LD. CIT (A) WAS RIGHT IN HOLDING THAT THIS IS NOTHING BUT TURNOVER OF THE AS SESSEE AND REASONABLE GROSS PROFIT RATE WAS LIABLE TO BE APPLIED ON THE TURNOVER. THE FIND INGS OF LD. CIT (A) HAVE BEEN RECORDED IN PARA 3.8 AT PAGE 9 OF HIS ORDER ARE AS UNDER :- 3.8. RESPECTFULLY FOLLOWING ABOVE MENTIONED DE CISIONS OF HONBLE ITAT, I HOLD THAT IT WILL BE REASONABLE TO ESTIMATE INCOME BY TREATING THE TOTAL DEPOSITS IN THE BANK ACCOUNT AS TURNOVER OF APPELLANT RATHER THAN TREATING THE ENTIRE DEPOSITS AS INCOME. THE APPELLANT HAS DECLARED INCOME OF RS. 1,10,785/- IN HIS REGULAR BO OKS. AS OBSERVED BY AO, DEPOSITS IN IDBI BANK ACCOUNT ARE CLAIMED TO BE IN RESPECT OF PURCHASES MADE BY VARIOUS PARTIES. EVEN THOUGH THIS CLAIM OF APPELLANT IS NOT VERIFIABLE, IT WILL BE REASONABLE TO TREAT THE DEPOSITS IN THIS BANK ACCOUNT AS UNDISCLOSED TURNOVER OF APPELLANT AND ES TIMATE INCOME IN RESPECT OF THE SAME. I THEREFORE DIRECT THAT TOTAL ADDITION IN RESPECT OF BANK 4 DEPOSITS IN IDBI ACCOUNT SHALL BE RESTRICTED TO RS. 2,02,900/- INSTEAD OF RS. 20,29,000/-. IT IS FURTHER OBSERVED THAT APPELLANT HAS DECLARED ADDITIONAL INCOME OF RS. 1,04,110/- IN THE REVISED RETURN FILE D BY HIM ON 06.05.2008. AO IS DIRECTED TO GIVE CREDIT OF RS. 1,04,110/-. TH US THE NET ADDITION TO THE INCOME WILL BE RS. 98,790/- (2,02,900 1,04,110). GROUND NO. 1 OF THE APPEAL IS THUS PARTLY ALLOWED. THESE FINDINGS REMAINED UNCONTROVERTED EXCEPT SAYIN G THAT ON SIMILAR FACTS IN THE CASE OF M/S. NAWAL KACHOLIYA DIFFERENT VIEW HAS BEEN TAKEN BY THE TRIBUNAL. THE TRIBUNAL HAS PASSED MANY ORDERS ON SIMILAR FACTS AND THEY HAVE B EEN MENTIONED IN THE ORDER OF LD. CIT (A). THE DECISION IN THE CASE OF SMT. ANITA CHAUDH ARY IS A DECISION OF LATER DATE IN WHICH VARIOUS EARLIER ORDERS HAS BEEN TAKEN INTO CONSIDER ATION AND THEN ONLY IT WAS HELD THAT THE DEPOSITS IN THE BANK ARE NOTHING BUT ARE ON ACCOUNT OF TURNOVER OF THE ASSESSEE. THEREFORE, IN VIEW OF RULE OF CONSISTENCY, WE HOLD THAT LATER DECISION OF THE TRIBUNAL CONSIDERED BY THE LD. CIT (A) WAS RIGHTLY CONSIDERE D. FOR THE SAKE OF FURTHER CLARIFICATION, THE DECISION IN THE CASE OF SMT. ANI TA CHAUDHARY HAS BEEN FOLLOWED IN VARIOUS OTHER CASES ALSO. IN VIEW OF THESE FACTS A ND CIRCUMSTANCES, WE CONFIRM THE ORDER OF LD. CIT (A) IN THIS RESPECT. 7. CROSS OBJECTION FILED BY ASSESSEE IS AGAINST UPH OLDING THE ISSUANCE OF NOTICE UNDER SECTION 148 AND MAKING THE ADDITION OF RS. 2, 14,309/- UNDER SECTION 41(1)(A) WHICH HAS BEEN CONFIRMED BY LD. CIT (A). 8. NO MATERIAL IS AVAILABLE ON RECORD TO CONTROVERT THE FINDING OF LD. CIT (A) WHO CONFIRMED THE REOPENING OF THE ASSESSMENT AND CONFI RMED THE ADDITION OF RS. 2,14,309/- UNDER SECTION 41(1)(A). THEREFORE, WE SEE NO REASO N TO INTERFERE WITH THE FINDINGS OF LD. CIT (A) IN THIS RESPECT. 5 9. IN THE RESULT, APPEAL OF THE DEPARTMENT AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 .9.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- THE ITO KISHANGARH. SHRI GIRDHAR GOPAL LAHOTI, MADANGANJ, KISHANGARH. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 187(2)/JP/2011) BY ORDER, AR ITAT JAIPUR.