The Income-tax Officer, Jalandhar V. Sh. Iqbal Singh S/o. Sh. Pritam Singh, VPO Authola, Jalandhar

ITA 20/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0657 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: DINESH SARNA
• Keywords: Business income; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.20(ASR)/2015 ASSESSMENT YEAR:2010-11 PAN:AWPSO0352Q INCOME TAX OFFICER, VS. SH. IQBAL SINGH, WARD IV(2), JALANDHAR. S/O SH. PRITAM SINGH VPO AUTHOLA, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANKER, DR RESPONDENT BY: SH. DINESH SARNA, DR DATE OF HEARING: 21/06/2016 DATE OF PRONOUNCEMENT: 23/06/2016 ORDER PER A.D. JAIN, JM; THIS IS THE REVENUES APPEAL FOR THE ASSESSMENT YEA R 2010-11 AGAINST THE ORDER DATED 15.10.2014, PASSED BY TH E LD. CIT(A), JALANDHAR, TAKING THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.6,35,18 1/- MADE ON ACCOUNT OF PROFITS ON SALE OF POTATOES BY APPLYING 10% NET PROFIT RATE OF TOTAL SALE PROCEEDS OF POTATOES AMOUNTING T O RS.63,51,815/. 1.1 THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE TH E FACTS THAT THE ASSESSEE HAS NOT FURNISHED J-FARM OF POTATOES MEANI NG THEREBY THAT HE HAS NOT SHOWN ANY POTATOES ON HIS AGRICULTU RE LAND. SALE BILLS FURNISHED FOR POTATOES REVEALED THAT TOTAL SA LE PROCEEDS OF POTATOES HAS BEEN SHOWN AT RS.63,51,815/- UNDER THE NAME AND STYLE OF M/S. IQBAL AGRICULTURE FARM, VPO AUTHOLA N EAR ADHI KHUI, 2 ITA NO.20(ASR)/2015 A.Y. 2010-11 DISTT. JALANDHAR WHICH MEANS THAT THE ASSESSEE HAS DONE TRADING IN POTATOES LIKE OTHER BUSINESSMAN/TRADER. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.56,47,9 42/- MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUN T U/S 69A OF THE INCOME-TAX ACT, 1961. 2.1. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE T HE FACTS THAT SALE PROCEEDS OF POTATOES TO EXTENT OF RS.63,51,816/- AS SHOWN BY THE ASSESSEE IS LESS THAN CASH DEPOSITS OF RS.1,19,99,1 23/-. THUS, THE DIFFERENTIAL AMOUNT OF RS.56,47,942/- (1,19,99,123 63,51,816) IS ASSESSEES OWN UNEXPLAINED MONEY. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE STATED TO BE ENGAGED IN THE BUSINESS OF TRADING OF MILK AND ALS O DERIVING INCOME FROM BANK INTEREST AND OTHER DEPOSITS, HAD FILED HIS RETURN O F INCOME AT RS.1,51,760/- PLUS AGRICULTURE INCOME OF RS.9,50,000/- FOR RATE P URPOSES. AS PER THE AO, THE ASSESSEE HAD MADE CASH DEPOSITS OF RS.1,19,99,1 23/- IN HIS BANK ACCOUNTS MAINTAINED WITH SBI, KAPURTHALA ROAD, JALANDHAR AND WITH OBC, JALANDHAR. DURING THE ASSESSMENT PROCEEDINGS, THE AO ENQUIRED ABOUT THE SOURCE OF CASH DEPOSITS IN THE AFORESAID BANK ACCOUNTS. IN RESPONS E, THE ASSESSEE SUBMITTED THAT HE WAS CULTIVATING ABOUT 100 ACRES OF AGRICULT URE LAND BELONGING TO HIM AND HIS FAMILY MEMBERS AND ALL THE DEPOSITS IN THE BANK WERE MADE OUT OF AGRICULTURE INCOME RECEIPTS. THE AO REJECTED THE EX PLANATION OF THE ASSESSEE AND HELD THAT THE ASSESSEE HAD DONE TRADING IN POTA TOES AND ADDED 10% OF THE SALE PROCEEDS OF POTATOES SHOWN BY THE ASSESSEE AT RS.63,51,815/-, I.E., RS.6,35,181/- TO THE RETURNED INCOME OF THE ASSESSE E. THE AO, THEREFORE, TREATED THE CASH DEPOSITS IN THE BANK TO THE EXTENT OF RS.63,51,815/- FROM THE 3 ITA NO.20(ASR)/2015 A.Y. 2010-11 SALE OF POTATOES OUT OF TOTAL DEPOSITS OF RS.1,19, 99,123/- AND THE REMAINING DEPOSITS OF RS.56,47,942/- HAD BEEN TREATED AS UNEX PLAINED. 3. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITIONS MADE BY THE A.O. 4. THE LD. DR SUBMITTED THAT THE LD.CIT(A HAS ERRED IN LAW IN DELETING THE ADDITION MADE ON ACCOUNT OF PROFIT ON SALE OF POTAT OES BY APPLYING 10% NET PROFIT RATE OF TOTAL SALE PROCEEDS OF POTATOES. HE FURTHER SUBMITTED THAT LD. CIT(A) HAS ALSO ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT U/S 69A OF THE ACT. T HE LD. DR REQUESTED THAT THE ORDER OF THE AO MAY BE RESTORED IN VIEW OF THE ABOVE SUBMISSIONS. 5. THE LD. COUNSEL FOR THE ASSESSEE, SH. DINESH SAR NA, ADVOCATE, ON THE OTHER HAND, RELIED ON THE IMPUGNED ORDER AND REITER ATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE ORDER OF THE LD. CIT(A). IT IS SEEN THAT THE LD. CIT(A) HAS PASSED A WELL REASONED AND ELABORATE ORD ER TAKING INTO CONSIDERATION ALL THE MATERIAL FACTS OF THE CASE. WE CONSIDER IT PROPER TO REPRODUCE THE RELEVANT FINDINGS GIVEN BY THE LD. CI T(A) IN HIS ORDER, FOR THE SAKE OF CONVENIENCE, AS UNDER. 6.5. I HAVE CONSIDERED THE OBSERVATIONS OF THE AO AS MAD E BY HIM IN THE ASSTT. ORDER AS WELL AS THE SUBMISSIONS FILED BY T HE AR OF THE ASSESSEE. THE PETITION FILED UNDER RULE 46A OF THE I.T. RULES , 1962 FOR THE ADMISSION OF ADDITIONAL EVIDENCE HAS ALSO BEEN CONSIDERED. I HAVE FURTHER CONSIDERED THE REMAND REPORT OF THE AO AS WELL AS THE COUNTER COMMENTS OF THE ASSESSEE THEREON. PETITION FOR ADMISSION OF ADDITI ONAL EVIDENCE ALONG WITH WRITTEN SUBMISSIONS MADE BY THE AR OF THE ASSESSEE WERE FORWARDED TO THE AO, IN RESPONSE TO WHICH THE AO GAVE HIS COMME NTS BUT NOT OFFERED ANY COMMENTS WITH REGARD TO ADDITIONAL EVIDENCE PRO DUCED BY THE LD. AR 4 ITA NO.20(ASR)/2015 A.Y. 2010-11 OF THE ASSESSEE. IT APPEARS THAT THE AO HAS NO OBJE CTION AGAINST ADMISSION OF ADDITIONAL EVIDENCE. IN THE ABSENCE OF ANY OBJEC TION FROM THE AO, ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE IS AD MITTED TO IMPART JUSTICE. 6.6. FROM THE PERUSAL OF MATERIAL ON RECORD, IT IS UNDISPUTED FACT THAT THE ASSESSEE IS AN AGRICULTURIST, CULTIVATING ABOUT 127 ACRE OF LAND AND ASSESSEE PROVED HIS LAND HOLDING BY PRODUCING LAND RECORD, FARD/JAMABANDI ETC., LEASE DEED AND CONFIRMATIONS. ASSESSING OFFICER IN THE ASSESSMENT ORDER STATED THAT THE ASSESSEE HAS N OT PRODUCED J FORM AS REGARD TO THE SALE OF POTATOES AND TREATED THE S ALE PROCEEDS OF POTATOES AMOUNTING TO RS.63,51,816/- AS BUSINESS INCOME OF T HE ASSESSEE FROM TRADING IN POTATOES AND BY APPLYING THE NET PROFIT @ 10% MADE AN ADDITION OF RS.6,35,181/-. I AM OF THE OPINION THAT THE AO H AS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THE ASSESSEE HAS D ONE ANY TRADING IN POTATOES. IN MY OPINION, THE ASSESSEE IS PURELY AN AGRICULTURIST AND THE AO HIMSELF IN HIS COMMENTS CALCULATED THE AGRICULTU RAL INCOME OF THE ASSESSEE AT RS.39,77,000/-. IN THESE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, I AM HAVING NO HESITATION IN DELETING THE ADD ITION OF RS.6,35,181/- MADE BY THE AO. ACCORDINGLY, ADDITION OF RS.6,35,18 1 MADE BY THE AO BY APPLYING 10% NET PROFIT ON SALE OF POTATOES IS DIR ECTED TO BE DELETED. 6.7. IT IS ALSO AN UNDISPUTED FACT THAT THE ASSESSE E HAS SOLD AGRICULTURAL PRODUCE AND EARNED INCOME FROM SAID SALE PROCEEDS P ART OF WHICH IS DIRECTLY DEPOSITED IN HIS BANK ACCOUNT FROM DIFFERE NT PARTS OF THE COUNTRY BY THE PURCHASERS WHICH IS QUITE EVIDENT FROM THE B ANK STATEMENT. IN HIS COMMENTS, THE AO HAS CALCULATED THE AGRICULTURAL IN COME OF THE ASSESSEE AND WORKED OUT CASH DEPOSITED BY HIM. THE LD. AR OF THE ASSESSEE IN HIS COUNTER COMMENTS POINTED OUT THE DISCREPANCY IN CA LCULATION OF CASH DEPOSIT CALCULATED BY THE AO WHEREIN THE AO ADDED A AND B, WHEREAS A IS TO BE REDUCED FROM B BECAUSE AS ON 01.04.2 009 OPENING BALANCE IN BANK WAS RS.16,73,646/-, WHICH AS ON 31.03.2010 WAS RS.3,15,040/-. THIS MEANS RS.13,58,606/- WAS ALSO AVAILABLE WITH A SSESSEE FOR MAKING BANK DEPOSITS. FROM THE CALCULATIONS MADE BY THE AO , IT IS CLEAR THAT THE TOTAL DEPOSIT IN BANK ACCOUNT WAS RS.35,43,930/-, W HEREAS THE ASSESSEE WAS HAVING RS.39,77,000/- AVAILABLE WITH HIM AND TH EREFORE, NO ADDITION WAS CALLED FOR. THERE ARE ALSO HUGE CASH WITHDRAWAL S FROM THE BANK WHICH HAVE ALSO NOT BEEN CONSIDERED BY THE AO AS THE EARL IER CASH WITHDRAWALS CAN AGAIN BE DEPOSITED. THE AO HAS NOT BROUGHT SUFF ICIENT MATERIAL ON RECORD TO JUSTIFY THE ADDITION MADE BY HIM WHEREAS THE ASSESSEE HAS PROVED HIS LAND HOLDING AND LAND HOLDING OF HIS FAM ILY MEMBERS BY BRINGING DOCUMENTARY EVIDENCE ON RECORD. THE AO HAS ALSO NOT BROUGHT ANYTHING ON RECORD WHICH WILL PROVE THAT THE ASSESS EE IS DOING ANY OTHER BUSINESS FROM WHICH HUGE CASH IS GENERATED. IN THES E FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM HAVING NO HESITATIO N IN DELETING THE 5 ITA NO.20(ASR)/2015 A.Y. 2010-11 ADDITION OF RS.56,47,942/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. ACCORDINGLY, ADDITION O F RS.56,47,942/- MADE BY THE AO IS, THEREFORE, DIRECTED TO BE DELETED. I N THE RESULT, GROUNDS NO. 2 & 3 OF APPEAL TAKEN BY THE ASSESSEE ARE ALLOWED. 6. THE ABOVE FINDINGS OF THE CIT(A) REMAIN UNDISPUT ED. WHEN NO MATERIAL WAS BROUGHT BY THE AO TO PROVE ANY TRADING IN POTAT OES HAVING BEEN DONE BY THE ASSESSEE AND ALSO NOTHING TO DISPROVE THE FACTU M OF THE ASSESSEE BEING AN AGRICULTURIST, ADMITTEDLY HAVING AGRICULTURAL INC OME OF RS.39,77,000/-, THE ADDITION OF RS.6,35,181/- WAS ENTIRELY UNCALLED FO R. THE SAME WAS CORRECTLY DELETED BY THE CIT(A). THE BANK STATEMENT SHOWED T HE DEPOSITS FROM DIFFERENT PARTS OF THE COUNTRY BY PURCHASERS OF AGRICULTURAL PRODUCE SOLD BY THE ASSESSEE. THIS IS ALSO UNCHALLENGED. THE CALCULATIO N OF CASH DEPOSITS, AS DONE BY THE AO WAS ALSO DISCREPANT. BESIDES, HUGE CASH W ITHDRAWALS MADE BY THE ASSESSEE WERE ALSO NOT CONSIDERED BY THE A.O. THE ADDITION MADE WAS, THUS, NOT AT ALL SUSTAINABLE AND IT HAS RIGHTLY BEEN DONE AWAY WITH. 7. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT TH E LD. CIT(A) HAS PASSED A WELL VERSED AND REASONED ORDER, WHICH DOES NOT REQU IRE ANY INTERFERENCE. THE SAME IS, ACCORDINGLY, UPHELD. HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN VIEW OF THE ABOVE, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD JUNE, 2016. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23/06/2016. /SKR/ COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE:SH.IQBAL SINGH, JALANDHAR. 6 ITA NO.20(ASR)/2015 A.Y. 2010-11 (2) THE ITO WARD-IV(2), (3) THE CIT(A), JLR (4) THE CIT, JLR (5) THE SR DR, I.T.A.T.