Anand Prakash Kothari, Ahmednagar V. Income-tax Officer,

ITA 1964/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7488 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 31-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Unexplained cash credit; Source of fund; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1964 /P U N/201 4 / ASSESSMENT YEAR : 20 0 8 - 09 ANAND PRAKASH KOTHARI, AT POST : BELAPUR, TAL : SHRIRAMPUR, AHMEDNAGAR 413709 PAN : AHRPK1664L ....... / APPELLANT / V/S. INCOME TAX OFFICER, WARD 4, AHMEDNAGAR / RESPONDENT ASSESSEE BY : S HRI HARI KRISHAN REVENUE BY : SHRI VIVEK AGGARWAL / DATE OF HEARING : 24 - 08 - 2017 / DATE OF PRONOUNCEMENT : 31 - 0 8 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - IT/TP, PUNE DATED 15 - 09 - 2014 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE FACTS AS EMANATING FROM RECORD ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF AUTO CONSULTANCY AND FINANCING. THE ASSESSEE FI LED HIS 2 ITA NO . 1964/PUN/2014, A.Y. 2008 - 09 RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 04 - 01 - 2010 DECLARING TOTAL INCOME OF RS.2,00,280/ - . THE ASSESSING OFFICER RECEIVED AIR INFORMATION THAT THE ASSESSEE HAS CASH DEPOSIT OF RS.42,10,000/ - IN HIS SAVING BANK ACCOUNT MAINTAINED WITH AXIS BANK, AHMEDNAGAR. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS , THE ASSESSEE FURNISHED COPY OF BANK STATEMENT. AS PER BANK STATEMENT THERE WERE TOTAL DEPOSITS OF RS.80,26,860/ - DURING FINANCIAL YEAR 2007 - 08. RS.69,63,110/ - WERE DEPOSITED BY WAY OF CHEQUES/DD AND RS.10,63,750/ - WERE DEPOSITED IN CASH. IN SO FAR AS CHEQUE AMOUNTS WERE CONCERNED THE ASSESSEE COULD SUBSTANTIATE FROM DOCUMENTS THAT RS.31,80,125/ - WERE RECEIVED FROM FINANCE COMPANIES VIZ. CHOLAMANDLAM DBS RS.4,16,967/ - , MAHINDR A & MAHINDRA FINANCIAL SER. LTD. RS.3,93,158/ - AND SHRIRAM TRANSPORT FINANCE COMPANY LTD. RS.23,70,000/ - . THE ASSESSEE COULD NOT FURNISH THE DETAILS OF BALANCE AMOUNT I.E. RS.37,82,985/ - . THE ASSESSING OFFICER ESTIMATED TRADING INCOME @ 5% ON UNEXPLAINED DEPOSITS AND MADE ADDITION OF RS.1,89,149/ - . WITH REGARD TO CASH DEPOSITS , THE ASSESSEE COULD NOT FURNISH ANY VALID EXPLANATION , T HEREFORE, THE ENTIRE AMOUNT OF RS.10,63,750/ - WAS ADDED IN TOTAL INCOME OF THE ASSESSEE. THERE WERE SOME OTHER MINOR ADDITI ONS ON ACCOUNT OF COMMISSION INCOME. TH E ASSESSING OFFICER MADE AGGREGATE ADDITION OF RS.15,43,750/ - IN THE INCOME RETURNED BY ASSESSEE . AGGRIEVED BY THE ASSESSMENT ORDER DATED 20 - 12 - 2010, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX ( APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF MINOR ADDITIONS BY ESTIMATING COMMISSION INCOME OF 2.5%. HOWEVER, IN RESPECT OF UNEXPLAINED CASH CREDIT RS.10,63,750/ - AND 5% ESTIMATION OF TRADING INCOME ON RS.37,82,985/ - I.E. RS.1,89,149/ - , THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING 3 ITA NO . 1964/PUN/2014, A.Y. 2008 - 09 OFFICER. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ADDITIONS SUSTAINED BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE HAS ALSO FILED APPLICATION FOR FURNISHING ADDITIONAL EVIDENCE S . 3 . SHRI HARI KRISHAN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A COMMISSION AGENT. THE ASSESSEE ARRANGES LOANS FOR THE CUSTOMERS FROM FINANCE COMPANIES FOR PURCHAS ING AUTOMOBILES. THE ASSESSEE ALSO EARNS COMMISSION ON SALE AND PURCHASE OF VEHICLES. THE ASSESSEE EARNS COMMISSION @ 2.5% FOR ARRANGING LOANS FROM FINANCERS. THE ASSESSEE EARNS COMMISSION OF 2% FROM FINANCERS AND .5% OF THE COMMISSION IS RE CEIVED FROM THE CUSTOMERS/BORROWERS. THE LD. AR CONTENDED THAT THE ADDITION HAS BEEN MADE BY ASSESSING OFFICER MERELY ON THE BASIS OF PROBABILITIES. THE ASSESSEE CAN SHOW FROM DOCUMENTARY EVIDENCE THAT THE ENTIRE AMOUNT DEPOSITED IN CASH IS NOT THE INCOME OF THE ASSESSEE. THE ASSESSEE EARNS COMMISSION/BROKERAGE FOR ARRANGING LOANS . THE FINANCE COMPANIES DO NOT DIRECTLY DEAL WITH THE CUSTOMERS/BORROWERS. THE CHEQUE IS ISSUED BY THE FINANCERS IN THE NAME OF ASSESSEE. THE ASSESSEE THEREAFTER DISBURS ES THE AMOUNT TO THE BORROWERS. THE ASSESSEE HAS LIAISON WITH VARIOUS FINANCING COMPANIES INCLUDING : (I) M/S. MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD. (AHMEDNAGAR), (II) M/S. SHRIRAM TRANSPORT FINANCE COMPANY LTD. (AHMEDNAGAR), (III) M/S. CHOLAMANDLAM DBS (AHMEDNAGAR), (IV) M/S. INDIA BULLS FINANCIAL SERVICES LTD. (AHMEDNAGAR) , AND (V) SHRI MAHAVEER CHAND JAIN PROPRIETOR M/S. MAHAVEER MOTORS (CHENNAI). 4 ITA NO . 1964/PUN/2014, A.Y. 2008 - 09 3 .1 THE LD. AR SUBMITTED THAT THE AMOUNT OF RS.10,63,750/ - DEPOSITED IN THE BANK ACCOUNT OF ASSESSE E IS NOT THE INCOME OF THE ASSESSEE, THE ASSESSEE EARNS COMMISSION ON THE LOAN TRANSACTIONS. THE LD. AR SUBMITTED THAT IF ENTIRE AMOUNT IS ADDED IT WOULD CAUSE PREJUDICE AND WOULD RESULT IN DOUBLE ADDITION. THE LD. AR SUBMITTED THAT THE ASSESSEE INTENDS TO FILE ADDITIONAL EVIDENCE TO SUBSTANTIATE THAT THE ASSESSEE WAS MERELY EARNING COMMISSION INCOME ON THE LOANS PROVIDED BY FINANCERS. 4 . ON THE OTHER HAND SHRI VIVEK AGGARWAL REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. 5 . W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . IN THE RETURN OF INCOME THE ADDITION HAS BEEN MADE ON VARIOUS COUNTS. HOWEVER, THE LD. AR OF THE ASSESSEE HAS RESTRICTED HIS SUBMISSIONS BEFORE US IN RESPECT OF TWO ADDITIONS ONLY I.E. : I . ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT RS.10,63,750/ - . II . ADD ITION ON ACCOUNT OF COMMISSION RS.1,89,149/ - . 6 . THE LD. AR HAS FILED AN APPLICATION FOR ADMITTING ADDITIONAL EVIDENCE. THE ADDITIONAL EVIDENCE FILED BY ASSESSEE INCLUDES AFFIDAVIT OF SHRI S. RAJESH, PROPRIETOR M/S. RAJESH FINANCE SOWCARPET, CHENNAI, AFF IDAVIT OF SMT. LEELA BAI, PROPRIETOR M/S. BALAJI MOTORS, PATALAM, CHENNAI, COPY OF LETTERS FROM REGIONAL TRANSPORT OFFICE, AHMEDNAGAR AND DETAILS OF LOANS PURPORTEDLY ARRANGED BY THE ASSESSEE FROM SHRI MAHAVEER CHAND JAIN. THE CONTENTION OF THE ASSESSEE I S THAT THE ADDITIONAL EVIDENCES ARE NECESSARY FOR PROPER ADJUDICATION OF THE CASE AS THEY WOULD EXPLAIN THE 5 ITA NO . 1964/PUN/2014, A.Y. 2008 - 09 SOURCE OF FUNDS IN THE BANK ACCOUNT OF ASSESSEE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF ADDITIONAL EVIDENCES FILED BY THE ASSESS EE , WITHOUT COMMENTING ON MERITS OF THE ADDITIONS , WE DEEM IT APPROPRIATE TO REMIT THIS FILE BACK TO ASSESSING OFFICER FOR CONSIDERATION OF ADDITIONAL DOCUMENTS PLACED ON RECORD BY THE ASSESSEE. THE ASSESSING OFFICER SHALL RE - EXAMINE BOTH THE ADDITIONS ME NTIONED ABOVE IN THE LIGHT OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. THE ASSESSING OFFICER SHALL ALSO GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE RE - EXAMINING THE ADDITIONS, IN ACCORDANCE WITH LAW. 7 . IN THE RESULT, THE APPEAL OF THE ASSESS EE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE IN THE AFORESAID TERMS. ORDER PRONOUNCED ON THURSDAY, THE 31 ST DAY OF AUGUST, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 31 ST AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - IT/TP, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE