Dunichand Khitri Raja , Bangalore V. Deputy Commissioner of Income Tax Circle-6(2)(1), Bangalore

ITA 1979/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4755 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 10-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B ENGALURU BEFORE S HRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER I TA NO. 1979 / BANG/2 0 1 7 (ASSESSMENT YEAR: 2012 - 13 ) SHRI DUNICHAND KHITRI RAJA, PROP. S.S.SWITCH GEARS, # 27/1, GURUKRUPA BLDG., BVK IYENGAR ROAD, BENGALURU - 560053. PAN:ADDPR 6538 G VS. APPELLANT DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 6 ( 2 1) (1) , BENGALURU. RESPONDENT APPELLANT BY : SHRI SUMAN LUNKAR, CA. RESPONDENT BY : DR. P.V.PR ADEEP KUMAR, ADDL.CIT(DR) DATE OF HEARING : 10/04 /2018 DATE OF PRONOUNCEMENT : 31 /05/2018 O R D E R PER I NTURI RAMA RAO, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEAL S) , [CIT(A)] BENGALURU - 6, BENGALURU , DATED 04/08/2017 FOR THE ASSESSMENT YEAR 201 2 - 13. 2. BRIEFLY, FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A PROPRIETOR OF M/S.S.S.SWTICHGEARS , WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING ELECTRIC AL GODS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 WAS FILED ON 12/09/2012 DECLARING INCOME OF RS.4,29,670/ - . AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS.58,55,810/ - VIDE ORDER DATED 27/03/2015 PASSED U /S 143(3) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. WHILE DOING SO, THE ASSESSING OFFICER (AO) MADE ADDITION ON ACCOUNT OF SUNDRY DEBTORS OF RS.47,25,139/ - AND UNSECURED LOANS OF RS.7,01,00/ - . AO DISBELIEVED THE EXPLAN ATION OFFERED BY THE ASSESSEE IN ITA NO.1979/BANG/2017 PAGE 2 OF 3 SUPPORT OF CASH DEPOSIT IN BANK ACCOUNT THAT THE AMOUNTS REPRESENT REALIZATION FROM SUNDRY DEBTORS. THUS, THE EXPLANATION WAS DISBELIEVED ON THE GROUND THAT TOTAL DEB T ORS WAS RS. 12,06,846/ - AND THE CLOSING DEBTORS WERE RS. 2,95,921/ - ONLY THE DIFFERENCE BETWEEN OPENING AND CLOSING DEBTOR WAS TREATED AS REALIZATION FROM DEBTORS AND THE BALANCE AMOUNT OF RS.47,25,139/ - IS ADDED BACK TO TOTAL INCOME AS UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNTS. AS REGARDS SUNDRY CREDITORS, AO MADE ADDITION ON ACCOUNT OF UN - RECONCILED DIFFERENCE BETWEEN SUNDRY CREDITORS RECEIVED AS PER BANK STATEMENT OF RS.42,50,000/ - AS AGAINST THE SUM OF RS.56,51,000/ - SHOWN BY THE ASSESSEE. 3. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A), WH O VIDE, IMPUGNED ORDER CONFIRMED THE ADDITION AS NO DOCUMENTARY EVIDENCE WAS FILED. 4. BEING AGGRIEVED, THE ASSESSEE IS BEFORE US IN THE PRESENT APPEAL RAIS ING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN MAKING AN ADDI TION OF RS. 54,26,139/ - TO THE INCOME OF THE APPELLANT AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS RED IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER. 2. THE LOWER AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE FACTS OF THE C ASE AND ACCOUNTING INVOLVED AND THUS HAVE ARRIVED AT A WRONG CONCLUSION IN RESPECT OF CREDIT ENTRIES IN BANK ACCOUNT. ON PROPER APPRECIATION OF THE FACTS OF THE CASE IT WOULD BE CLEAR THAT THERE IS NO UNEXPLAINED ENTRY OR EXCESS ENTRY IN BANK STATEMENT AND THAT ALL THE ENTRIES IN THE BANK ACCOUNT ARE REALIZED FROM SUNDRY DEBTORS AND BEING FULLY EXPLAINABLE, THE ADDITION OF RS. 54,26,139/ - AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE CIT(A) BEING ERRONEOUS BOTH ON LAW AND FACT IS TO BE DELETED . 3. THE LEARNED ASSESSING OFFICER HAS ERRED IN LEVYING INTEREST U/S. 234B OF THE ACT. THE APPELLANT DENIES THE LIABILITY TO PAY INTEREST. THE INTEREST BEING LEVIED ERRONEOUSLY HAS TO BE DELETED. 4. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ADDITIONS OF RS. 54,26,139/ - HAS MADE BY ASSESSING OFFICER BE DELETED AND INTEREST LEVIED BE ALSO DELETED. ITA NO.1979/BANG/2017 PAGE 3 OF 3 LEARNED AR OF THE ASSESSEE SUBMITTED THAT ENTIRE DEPOSITS SHOWN IN THE BANK ACCOUNTS ARE ADDED BY THE AO WHICH INCLUDES SALE PROCEEDS CREDITED TO P&L ACCOUNT. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHOR I TIES. 5. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ADDITIONS MADE BY THE AO ARE BASED ON UN - RECONCILED DIFFERENCE BETWEEN FINANCIAL STATEMENTS AND THE AMOUNTS REFLECTED IN THE STATEMENT OF BANK ACCOUNT. THE CONTENTION OF THE ASSESSEE THAT DEPOSITS IN BANK ACCOUNT PRESENT SALE PROCEEDS REQUIRES TO BE VERIFIED WITH REFERENCE TO BOOKS OF ACCOUNT. THEREFORE, WE REMIT THE ISSUE IN THE GROUNDS OF APPEAL TO THE FILE OF THE AO FOR VERIFICATION WHETHER DEPOSITS IN BANK ACCOUNTS ARE OUT OF SALES AND REALIZATION OF SUNDRY DEBTORS , LOANS RECEIVED FROM SUNDRY CREDITORS ETC. ACCORDINGL Y, WE REMIT THIS ISSUE TO THE FILE OF THE AO FOR DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2018 SD/ - SD/ - (SUNIL KUMAR YADAV) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 31/05/2018 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FIL E BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE