ITO, UDAIPUR V. Shri Suresh Kumar Khatik, UDAIPUR

ITA 20/JODH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7856 (ITAT-JODHPUR)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Keywords: Unexplained investment; Business income; Depreciation; Salary income; Principle of natural justice; Peak credit; Additional evidence; Non compliance
• Section: 133(6); 131; 144

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 20 /JODH/2014 (A.Y. 2 0 0 9 - 1 0 ) ITO, WARD - 1(1), UDAIPUR. VS. SHRI SURESH KUMAR KHATIK, S/O SHRI BHAGCHAD KHATIK, 3F - 14, HIRAN MAGRI, SECTOR - 5, UDAIPUR (RAJ.) (APPELLANT) PAN NO. AMMPK 0595 L (RESPONDENT) ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA. DEPARTMENT BY : SHRI JAI SINGH - D.R. DATE OF HEARING : 26 / 0 8 /201 4 . DATE OF PRONOUNCEMENT : 22 /0 9 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE D EPARTMENT AGAINST THE ORDER DATED 2 9/10 /2013 OF L D . CIT(A), UDAIPUR . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED : - 1. RESTRICTING THE ADDITION MADE AN ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT OF RS. 30,18,253/ - TO 2 RS. 1,50,153/ - AFTER CONSIDERING THE PEAK CREDIT IN SAVING BANK ACCOUNT WITHOUT CONSIDERING THE FACT THAT ASSES SEE HAS NOT EXPLAINED THE SOURCE OF HUGE AMOUNT DEPOSITED IN HIS SAVINGS ACCOUNTS. 1.1 RESTRICTING THE ADDITION BY ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE DESPITE THE FACT THAT NO COMPELLING CIRCUMSTANCES BEYOND CONTROL OF ASSESSEE TO FILL THE DETAILS BEFORE THE AO WERE EXISTING AND AO WAS ALSO NOT GIVEN OPPORTUNITY TO REBUT THE ADDITIONAL EVIDENCE THEREBY THE PROVISION OF RULE 46A(1) OF THE IT RULES. 2. DELETING THE ADDITION OF RS. 22,15,788/ - MADE BY THE AO AS UNDISCLOSED INCOME FROM BUSINESS TR ANSACTIONS APPEARING IN THE CURRENT ACCOUNT IN TWO BANKS TOTALING TO RS. 4.43 CRORE, MERELY ON THE SUBMISSION OF THE ASSESSEE THAT THE TRANSACTION IN THE CURRENT A/C WERE RELATED TO THE BUSINESS OF S H. ROOPLAL DAMOR PROP. M/S R.L. PET ROLEUM DESPITE THE FAC T THAT CURRENT BANK ACCOUNTS WERE OPENED BY AND WERE IN THE NAME OF SH. SURESH KHATIK AND THUS OWNED BY HIM AND DESPITE THE FACT THAT NO EVIDENCE WITH SUPPORTING WERE PRODUCED BEFORE THE AO ABOUT THE ALLEGED CLAIM OF BANK TRANSACTIONS OF SH. SURESH KHATIK BEING PROPERLY REFLECTED IN THE CASE OF SH. ROOP LA L DAMOR INSPITE OF SPECIFIC SHOW CAUSE BY THE AO. 2.1 IGNORING THE FACT THAT AS PER POWER OF ATTORNEY DATED 06.07.2007 SH. SURESH KUMAR KHATIK CAN OPEN AND OPERATE THE ACCOUNT ONLY IN THE NAME OF THE FIRM I.E. M/S R.L. PETROLEUM, WHEREAS THE ALLEGED CURRENT ACCOUNTS ARE IN THE NAME OF SH. SURESH KUMAR KHATIK. 2.2 DELETING THE ADDITION BY ACCEPTING THAT THE TRANSACTIONS MADE IN THE ALLEGED CURRENT ACCOUNTS ARE SHOWN IN THE BOOKS OF M/S R.L. PETROLEUM DESPITE THE FACT THAT NEITHER THE BOOKS OF ACCOUNTS OF M/S R.L. PETROLEUM WERE PRODUCED BEFORE THE AO DURING THE ASS ESSMENT PROCEEDINGS, NOR WERE PRODUCED BEFORE THE ID. CIT(A) AND THEN IN - TURN BEFORE THE AO, DURING APPELLATE PROCEEDINGS. 2.3 ADMITTING THE ADDITIONAL EVIDENCE IGNORING THE PROVISION OF RULE 46A(1) OF THE IT RULES WHEREBY THE ASSESSEE HAS FAILED TO PROVE ANY COMPELLING CIRCUMSTANCE AND THE ID. CIT(A) ALSO ERRED IN NOT GIVING 3 ANY OPPORTUNITY TO THE AO TO REBUT THE ADDITIONAL EVIDENCES. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 VIDE GROUND NO. 1 & 1.1 , THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE RELIEF ALLOWED TO THE ASSESSEE OUT OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPOSIT IN SAVING BANK ACCOUNT. 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 03/11/2009 DECLARING AN INCOME OF RS. 3,87,990/ - , WHICH WAS PROCESSED U/S. 143 (1) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) ON 19/09/ 2010. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY . THE ASSESSING OFFICER, FRAMED THE ASSESSMENT U/S. 144 OF THE ACT FOR THE REASON THAT THE CASE WAS GOING TO BE TIME BARRED AND THE ASSESSEE DID NOT FURNISH THE NECESSARY DETAILS, THE ASSESSING OFFICER M ADE THE ADDITION OF RS. 30,18,253/ - TREATING THE DEPOSITS IN THE SAVING BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED. THE ASSESSING OFFICER NOTICED THAT THERE WERE CASH DEPOSITS IN THE SAVING BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH PNB, CHETAK CIRCLE, UDAIPUR AND ICICI BANK , MADHU B AN, UDAIPUR . HE ALSO FOUND THAT THERE WERE REGULAR DEPOSITS AND WITHDRAWALS FROM THE CURRENT ACCOUNT WITH THE ABOVE TWO 4 BANKS. THE ASSESSEE EXPLAINED TO THE ASSESSING OFFICER THAT HE WAS EMPLOYEE WITH SHRI ROOP LAL DAMOR, WHO WAS PROPRIETOR OF M/S. R.L. PETROLEUM HAVING BUSINESS OF PETROLEUM PRODUCTS AND HAD GIVEN POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE ON 06/07/2007 , A CCORDING TO WHICH, THE ASSESSEE WAS ENTITLED FOR PURCHASE & SALE OF MATERIAL ON BEHALF OF THE OWNER OF THE PETROL PUMP. IT WAS STATED THAT THE TRANSACTIONS APPEARING IN THE RELEVANT BANK ACCOUNTS WERE ACTUALLY RELATED TO THE BUSINESS OF PETROL PUMP OF THE EMPLOYER . THE ASSESSING OFFICER, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSES SEE AND MADE THE ADDITION OF RS. 30,18,253/ - . 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: - THAT THE LEARNED ASSESSING OFFICER HAS NOT APPRECIATED THE TRUE AND CORRECT FACTS REGARDING DEPOSIT IN SAVING BANK ACCOUNT. HE HAS NOT CONSIDERED THE TRANSACTIONS RECORDED IN SB ACCOUNT ON DEBIT AS WELL AS CREDIT SIDE. HE HAS SIMPLY TOTALED THE TRANSACTIONS ON CREDIT SIDE IGNORING THE TRANSACTIONS ON DEBIT SIDE AND MADE THE ADDITION TREATING ALL DEPOSITS IN CREDIT SIDE AS UNEXPLAINED FROM UNDISCLOSED INCOME OF THE YEAR UNDER CONSIDERATION ON ASSUMPTIONS AND PRESUMPTIONS ONLY. 2.1 THAT THE LEARNED AO HAS NOT CONSIDERED THE ISSUE RELATED TO DEPOSIT IN SAVING BANK ACCOUNT WITH RELATION TO HIS OWN HOLDING ABOUT THE CO NDUCT OF BUSINESS BY THE ASSESSEE. IT IS AN ADMITTED FACTS THAT THE ASSESSEE HAS RECEIVED SALARY OF RS.2,75,000/ - DURING THE YEAR UNDER CONSIDERATION OUT OF WHICH RS.2,00,000/ - WERE SAVED BY HIM AND UTILIZED FOR DEPOSIT IN SUCH SAVING BANK ACCOUNT TIME TO TIME. SIMILARLY, IN ADDITION TO THE SALARY INCOME THE ASSESSEE HAD ALSO PLIED 3 TRUCKS THROUGHOUT THE YEAR AND THE INCOME 5 AND CASH SAVING FROM SUCH BUSINESS WERE ALSO DEPOSITED IN THE SAME BANK ACCOUNT. THE NET INCOME ONLY DECLARED AS PER SECTION 44 AE AND THE LD. AO HAS ASSESSED THE SAME AT RS.1,62,000/ - . THIS NET PROFIT IS AFTER ALLOWANCE OF NON CASH EXPENDITURE ALSO SUCH AS STATUTORY ALLOWANCE FOR DEPRECIATION. AS PER RECORDS THE ALLOWABLE DEPRECIATION WAS ALSO MORE THAN RS.3,60,000/ - . CONSIDERING THE AB OVE THE POSITION OF CASH PROFIT (PROFIT BEFORE DEPRECIATION) ASSESSED BY THE LD.AO WAS RS.5,22,000/ - . THIS PROFIT WAS ALSO DEPOSITED IN THE SAME SAVING BANK ACCOUNT FROM TIME TO TIME. HENCE IN ALL RS. 7,97,000/ - SHOULD HAVE BEEN CONSIDERED AS AVAILABLE FOR DEPOSIT IN BANK IN ADDITION TO OPENING CASH AVAILABILITY WITH THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. THE LD. AO TOTALLY IGNORED THE SAME BEFORE MAKING ARBITRARY ADDITION ON ACCOUNT DEPOSIT IN BANK. FURTHER THE WITHDRAWALS FROM BANK DURING THE YEAR UNDER CONSIDERATION WERE ALSO TOTALLY IGNORED BY THE LD. AO. THE WHOLE ARBITRARY ADDITION BASED ON SUCH A WRONG PRESUMPTION IS NOT JUSTIFIED IN THIS CASE AND IS TOTALLY AGAINST THE PRINCIPAL OF NATURAL JUSTICE. THE ABOVE SAID AMOUNT OF RS.7,97,000/ - (AVERA GE MONTHLY BASIS) SHOULD HAVE BEEN CONSIDERED AS UTILIZED FOR DEPOSIT BY THE ASSESSEE IN HIS SAVING BANK ACCOUNT, BUT THE LD. AO HAS NOT CONSIDERED THIS AMOUNT ALSO. 2.3 NOT ONLY THIS THE UNDISCLOSED INCOME ASSESSED BY THE LD. AO UNDER DIFFERENT HEAD WAS ALSO NOT CONSIDERED BEFORE TREATING THE DEPOSIT IN BANK ACCOUNT AS UNDISCLOSED. THE TELESCOPIC SET OFF, OF THE SAME ASSESSED INCOME SHOULD HAVE BEEN ALLOWED BEFORE TREATING THE DEPOSITS MADE BY THE ASSESSEE IN HIS SAVING BANK ACCOUNT AS UNEXPLAINED. 2.4 THE LD. A O HAS PRESUMED THAT THE BUSINESS TRANSACTIONS RELATED TO M/S. R.L. PETROLEUM WERE EXECUTED THROUGH CURRENT ACCOUNTS ONLY WHEREAS FROM RECORD IT APPEARS THAT SOME TIME THE BUSINESS TRANSACTION OF M/S. R.L. PETROLEUM WERE ALSO EXECUTED THROUGH SAVING BANK AC COUNT. 2.5 CONSIDERING THE ABOVE TRUE AND CORRECT FACTS OF THE CASE WHICH ARE REFLECTED FROM THE AVAILABLE MATERIAL ON THE RECORDS ITSELF, IT IS NOT JUSTIFIED THAT THE DEPOSIT IN SAVING BANK ACCOUNTS CAN BE TREATED AS UNEXPLAINED BY ANY MEANS OR FOR ANY COGE NT REASONS FOR THE SAME. CORRECTLY SPEAKING THE CASH DEPOSITS IN RELEVANT ACCOUNT WERE FROM THE DECLARED SOURCES ONLY. THE ADDITION MADE BY THE LEARNED AO WITHOUT INDEPENDENT ENQUIRY AND WITHOUT APPRECIATING THE TOTAL MATERIAL AVAILABLE ON RECORDS, WHICH I NCLUDED BOTH THE CURRENT ACCOUNTS AS WELL AS BOTH THE SAVING BANK ACCOUNT ALONGWITH THE EVIDENCES OF BUSINESS OF R.L. PETROLEUM, APPEARS TO BE ARBITRARY, CONTRARY TO 6 THE FACTS OF THE CASE AND NOT COMPUTED ACCORDING TO THE PRINCIPALS OF PEAK CREDIT IS NOT J USTIFIED AND HENCE DESERVES TO BE DELETED. WE REQUEST YOUR GOODSELF TO PLEASE DELETE THE SAME IN THE INTEREST OF EQUITY AND JUSTICE. (I) IN THIS RESPECT WE HAVE TO FURTHER SUBMIT THAT, FROM THE COPY OF PASS BOOK IT IS VERY CLEAR THAT THERE WERE CREDIT AS WELL AS DEBIT ENTRIES RELATED TO CASH DEPOSITED AND WITHDRAWN RESPECTIVELY FROM SUCH BANK ACCOUNT. THE EARLIER WITHDRAWAL SHOULD HAVE BEEN CONSIDERED AS SOURCE OF DEPOSIT IN SUBSEQUENT DATES FOR DETERMINATION OF UNDISCLOSED CASH DEPOSIT IF ANY. THE LD. AO FAILED TO COMPUTE THE CORRECT POSITION IN THE BEST JUDGMENT ASSESSMENT IN THIS RESPECT. (II) FURTHER, IN THIS RESPECT, WE HAVE TO SUBMIT THAT THE LD AO FAILED TO APPRECIATE THE FACTS THAT THE PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE OR TO THE LD.AO, CANN OT BE REGARDED AS THE BOOKS OF THE ASSESSEE I.E. A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS. HENCE, CREDIT SHOWN IN PASS BOOK WITHOUT A CORRESPONDING ENTRY IN BOOKS OF ACCOUNTS DOES NOT FALL WITHIN THE AMBIT OF SECTION 68/69. THE BOOKS OF ACCOUNTS HAVE TO BE THE BOOKS OF THE ASSESSEE HIMSELF AND NOT OF ANY OTHER ASSESSEE. KINDLY REFER CIT POONA V/S BHAI CHAND H GANDHI (1983) 141 ITR 67 (BOM). WHERE ACCOUNTS ARE NOT MAINTAINED, ADDITION MADE AS UNEXPLAINED INVESTMENT WOULD NOT BE SUSTAINABLE UNDER SECTION 69B ALSO. KINDLY REFER DR. PRAKASH TIWARI V/S CIT (1984) 148 ITR 474 (MP). IN THE PRESENT CASE THE LD. AO HAS NOT MENTIONED THE SECTION UNDER WHICH HE HAS ASSESSED THE INCOME TREATING THE DEPOSITS AS UNEXPLAINED AND OUT OF UNDISCLOSED SOURCE OF INCOME. THE ARBITRARY ADDITION WAS MADE JUST ON ASSUMPTIONS AND PRESUMPTIONS ONLY. THE OPINION OF THE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL AVAILABLE ON RECORD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION CIT V/S C. MOHANAKALA (2007) 291 ITR 278 (SC). (III) IN THE PRESENT CASE THERE WAS NEITHER BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE NOR REQUIRED TO BE MAINTAINED AS PER LAW. THE EXISTENCE OF BOOKS OF ACCOUNTS IS A CONDITION PRECEDENT FO R INVOKING THE POWER UNDER SECTION 68/69 AND DISCHARGING THE BURDEN IS A SUBSEQUENT CONDITION. HENCE NO ADDITION CAN BE MADE UNDER SECTION 68/69 ON ACCOUNT OF CASH CREDIT/BANK DEPOSIT IF NO BOOKS OF ACCOUNTS ARE MAINTAINED. KINDLY REFER ANAND RAM RAITANI V /S CIT (1997) 223 ITR 544 (GAU). THAT THE LD. AO FURTHER ERRED IN APPRECIATING THE POSITION OF LAW THAT BEFORE INVOKING THE POWER UNDER SECTION 68/69 OF THE ACT HE MUST 7 BE SATISFIED THAT THERE ARE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND THE CASH C REDIT/BANK DEPOSIT IS RECORDED IN THE SAID BOOKS OF ACCOUNTS. HENCE THE ARBITRARY ADDITION MADE BY THE LD.AO IS NOT JUSTIFIED IN THIS CASE AS THERE WERE NO BOOKS OF ACCOUNTS AT ALL AND THE SOURCES OF DEPOSITS WERE DULY EXPLAINABLE FROM THE CIRCUMSTANTIAL E VIDENCE AVAILABLE ON RECORD. THE ADDITION MADE ON THIS ACCOUNT DESERVES TO BE DELETED. WE REQUEST YOUR GOODSELF TO KINDLY DELETE THE SAME IN THE INTEREST OF EQUITY AND JUSTICE. (IV) ALTERNATIVELY, WITHOUT PREJUDICE TO ALL THE ABOVE SUBMISSION IN THIS RESPECT, WE HAVE TO FURTHER SUBMIT THAT THE LEARNED ASSESSING OFFICER HAS ERRED AT LAW AND IS NOT JUSTIFIED IN HOLDING ONLY PART OF DOCUMENT AS CORRECT AND OTHER PART INCORRECT OR UNTRUE. THAT THE LEARNED ASSESSING OFFICER IS ALSO NOT JUSTIFIED IN MAKING ADDITION WITHOUT CONSIDERING THE DEBIT AND CREDIT ENTRIES IN THE BANK ACCOUNTS EITHER IN SAVING BANK ACCOUNT OR IN CURRENT ACCOUNT BEFORE HOLDING THE TOTAL DEPOSITS THROUGHOUT THE YEAR ON DIFFERENT DATES IN BANK AS OUT OF UNDISCLOSED SOURCES AND THAT TOO ON WRONG C ALCULATION AS STATED HEREINABOVE. WITHOUT DIRECT EVIDENCE THE LD. ASSESSING OFFICER IS NOT EMPOWERED TO DRAW ANY PRESUMPTIONS AS TO THE EVIDENCE OF UNDISCLOSED INCOME. THE LD. AO HAS NOT CONSIDERED THE SUBJECTED BANK ACCOUNTS IN TOTO AND AT THE SAME TIME I GNORED THE PRINCIPLE OF PEAK DEPOSIT IN THE SAID ACCOUNTS (CONSOLIDATED POSITION OF CASH AVAILABILITY ON DIFFERENT DATES) BEFORE COMPUTING THE UNDISCLOSED INCOME ON THIS ACCOUNT IN THE ASSESSMENT. THE DATE WISE POSITION OF PEAK AMOUNT BALANCE IS ENCLOSED H EREWITH IN ANNEXURE 1 WHICH REFLECT THE CORRECT POSITION OF COMPUTATION OF UNDISCLOSED INCOME IF ANY INTRODUCED BY WAY OF CASH DEPOSITS IN THE YEAR UNDER CONSIDERATION BY THE ASSESSEE. FOR COMPUTATION OF PEAK CREDIT/DEPOSIT WE HAVE ESTIMATED THAT THE AVA ILABLE CASH BALANCE ON ACCOUNT OF SALARY INCOME WAS RECEIVED ON FIRST DAY OF EVERY MONTH AND THE AVAILABLE CASH OF TRUCK PLYING BUSINESS ON 15 TH OF EACH MONTH. HENCE AS PER LAW AFTER CONSIDERING ALL THE ABOVE FACTS AND POSITION OF LAW, THE COMPUTATION OF UNDISCLOSED INCOME OF RS. 30,18,253/ - ON THIS ACCOUNT BY THE LD. AO IS NOT CORRECT AND ACCORDINGLY THE ADDITION MADE BY HIM IS NOT JUSTIFIED. AT THE WORST, ACCOR DING TO LAW ONLY THE PEAK AMOUNT OF DEPOSIT (AFTER CONSIDERATION THE INCOME UNDER OTHER HEADS ALREADY ASSESSED 8 SEPARATELY) CAN BE CONSIDERED TO BE ASSESSED AS UNEXPLAINED IN THE HANDS OF ASSESSEE SUBJECT TO CONDITION THAT NO FURTHER ADDITION CAN BE MADE ON ESTIMATES UNDER THE HEAD INCOME FROM OTHER SOURCE. THE LD. AO COULD HAVE BEEN ESTIMATED THE TOTAL INCOME OF YEAR UNDER CONSIDERATION AT THIS EXTENT ONLY IF ALL DEPOSITS AS WELL AS WITHDRAWALS HAVE BEEN TREATED AS UNEXPLAINED BECAUSE AS PER SECTION 144, TH E ASSESSING OFFICER, AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE HAS GATHERED, IS UNDER AN OBLIGATION TO MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGMENT AND DETERMINE THE TAX PAYABLE BY THE ASSESSEE. BEST JUDGMENT AS SESSMENT SHOULD ACCORD WITH FAIR - PLAY AND JUSTICE. WHEN THE OFFICER MAKES ASSESSMENT TO THE BEST OF HIS JUDGMENT, HE MUST NOT ACT VINDICTIVELY OR CAPRICIOUSLY OR WITH A VIEW TO PUNISH THE ASSESSEE FOR NON COMPLIANCE. IT IS NOW WELL SETTLED THAT THE ASSESSI NG OFFICER WHILE MAKING A BEST JUDGMENT ASSESSMENT SHOULD MAKE AN INTELLIGENT WELL GROUNDED ESTIMATE. SUCH ESTIMATE MUST BE BASED ON A ADEQUATE AND RELEVANT MATERIAL. THE EXPRESSION TO THE BEST OF JUDGMENT MEANS ACCORDING TO RULES OF REASON AND JUSTICE, NO T ACCORDING TO PRIVATE OPINION, CONJECTURE OR SUSPICION. KINDLY REFER BALIAH (K) V CIT (1965) 56 ITR 182 (MYS). WE LIKE TO DRAW YOUR ATTENTION TOWARDS THE FACT THAT THE LD. AO HAS ASSESSED BUSINESS INCOME ON ESTIMATE IN THE HANDS OF THE ASSESSEE SEPARATEL Y WHICH WAS UNCALLED FOR CONSIDERING THE FACT THAT, IF THE PEAK CREDIT/DEPOSITS THROUGHOUT THE YEAR HAVE BEEN CONSIDERED AS UNDISCLOSED INCOME THEN NO OTHER INCOME IS REQUIRED TO BE ESTIMATED BECAUSE THE SEPARATE ASSESSMENT OF BUSINESS INCOME IS TANTAMOUNT TO DOUBLE TAXATION, ONCE UNDER THE HEAD BUSINESS INCOME AND SECONDLY TREATING THE SAME INCOME AS UNDISCLOSED CASH DEPOSITS IN BANKS. THE ASSESSEE ALSO FURNISHED CALCULATION OF PEAK UNEXPLAINED DEPOSITS WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A) AT PAGE NOS. 12 TO 17 OF THE IMPUGNED ORDER, FOR THE COST OF REPETITION , SAME IS NOT REPRODUCED HEREIN. 9 5. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT ONCE IT WAS THE CASE OF THE ASSESSING OFFICER THAT THE DEPOSITS BELONG ED TO THE ASSESSEE THEN THE BENEFIT OF PEAK CREDIT NEEDED TO BE ALLOWED. HE FURTHER OBSERVED THAT PEAK CREDIT PRINCIPLE IS APPLICABLE IN A CASE WHERE THERE ARE SEVERAL CREDIT AND DEBIT ENTRIES WHICH ARE FOUND IN ONE ACCOUNT THEN THE FUNDS OPERATED FROM SUCH ACCOUNT SHOULD HAVE BEE N TAKEN ONE, AND HENCE, TO AVOID MULTIPLE COUNTING OF SAME SUMS , ONLY HIGHEST OR PEAK OF THE AMOUNTS IN THAT ACCOUNT SHOULD BE TAKEN AS UNEXPLAINED INVESTMENT. THE LD. CIT(A) WORKED OUT THE ASSESSEES PEAK CREDIT AT RS. 1,50,153/ - ON 31/03/2009 . HE SUSTAINED THE ADDITION TO THAT EXTENT . NOW THE DEPARTMENT IS IN APPEAL AGAINST THE RELIEF ALLOWED BY THE LD. CIT(A) . 6 . LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE DEPOSITS WERE FOUND IN THE BANK ACCOUNT OF THE ASSESSEE FOR WHICH P ROPER EXPLANATION WAS NOT GIVEN. THEREFORE, THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND THE LD. C IT(A) WAS NOT JUSTIFIED IN DELETING THE SAME . 7 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY 10 SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) . IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAD NOT APPRECIATED THE TRUE AND CORRECT FACTS REGARDING THE DEPOSITS IN THE BANK ACCOUNT , H E HAD NOT CONSIDERED THE TRANSACTIONS REGARDING DEPOSITS IN SAVING BANK ACCOUNT ON DEBIT AS WELL AS CREDIT SI DE . IT WAS POINTED OUT THAT THE ASSESSING OFFICER SIMPLY TOTALED THE TRANSACTIONS ON CREDIT SIDE IGNORING THE TRANSACTIONS ON DEBIT SI D E AND MADE THE ADDITION BY TREATING ALL THE DEPOSITS IN CREDIT SIDE AS UNEXPLAINED FROM UNDISCLOSED INCOME OF THE YEAR UNDER CONSIDERATION . IT WAS FURTHER STATED THAT THE BANK PASSBOOK IS NOT A BOOKS OF ACCOUNT , THEREFORE, THE ADDITION MADE ON THE BASIS OF BANK PASSBOOK WAS NOT JUSTIFIED. ALTERNATIVELY, IT WAS STATED THAT AT THE WORST, ACCORDING TO LAW ONLY PEAK AMOUNT OF DEPOSIT (AFTER CONSIDERING THE INCOME UNDER OTHER HEADS ALREADY ASSESSED SEPARATELY) CAN BE CONSIDERED TO BE ASSESSED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE SUBJECT TO THE CONDITION THAT NO FURTHER ADDITION CAN BE MADE ON ESTIMATE UNDER THE HEAD I NCOME FROM OTHER SOURCES. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE TRANSACTION WAS RECORDED IN THE BANK ACCOUNT OF THE ASSESSEE AND THE ASSESSING OFFICER WAS NOT SATISFIED FROM 11 EXPLANATION GIVEN BY THE ASSESSEE WITH REGARD TO THE TRANSACTIONS IN BANK ACCOUNT , H OWEVER, THE ASSESSING OFFICER MADE THE ADDITION BY CONSIDERING THE DEPOSITS ON LY . HE DID NOT ALLOW ANY BENEFIT FOR THE ROTATION ENTRIES I.E. ENTRIES WHICH WERE ON ACCOUNT OF REDEPOSIT OF THE AMOUNT ALREADY WITHDRAWN FROM THE BANK . IN SUCH TYPE OF CASES, WHERE THERE ARE SEVERAL CREDIT AND DEBIT ENTR I ES FOR WHICH PROPER EXPLANATION IS NOT THERE THEN THE FUNDS OPERATED FROM SUCH ACCOUNT SHOULD BE TAKEN TO BE ONE AND TO AVOID MULTIPLE COUNTING OF THE SAME SUMS ONLY HIGHEST AMOUNT OR PEAK AMOUNT, IN THAT ACCOUNT SHOULD BE TAKEN AS UNEXPLAINED INVESTMENT PARTICULARLY WHEN THERE IS ROTATI ON OF THE AMOUNT I.E. AMOUNT WITHDRAWN IS RE - DEPOSITED. IN THE PRESENT CASE, THE LD. CIT(A) WORKED OUT THE PEAK AMOUNT AT RS. 1,50,153/ - AND THE SAME WAS SUSTAINED AS AN ADDITION IN THE HANDS OF THE ASSESSEE, THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 9 . THE NEXT ISSUE VIDE GROUND NO S . 2 TO 2.3 RELATES TO THE DELETION OF ADDITION OF RS. 22,15,788/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME FROM BUSINESS TRANSACTION . 10 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICED THAT THERE WERE 12 TRANSACTIONS AMOUNTING TO RS. 4,43,15,760/ - IN THE CURRENT BANK ACCOUNTS OF THE ASSESSEE . THE SAID AMOUNT WAS CONSI DERED AS TURNOVER OF BUSINESS OF THE ASSESSEE. THE ASSESSING OFFICER APPLIED THE NET PROFIT RATE OF 5% AND WORKED OUT TRADING PROFIT AT RS. 22,15, 788/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE . 11 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: - 1 AT THE VERY OUTSET WE HAVE TO SUBMIT THAT THE ESTIMATION OF INCOME ON THIS ACCOUNT BY THE LD. AO WAS UNCALLED AS THE INCOME WAS RELATED TO R.L. PETROLEUM AND SHRI ROOP LA L DAMOR HAS ALREADY DECLARED THE INCOME FROM SUCH BUSINESS IN HIS RETURN OF INCOME. THE ACCOUNTS OF R.L. PETROLEM WERE DULY AUDITED UNDER SECTION 44 AB OF IT ACT AND SHRI ROOP LA L DAMOR WAS PROP, OF SUCH BUSINESS AND HAS DULY DECLARED INCOME FR OM SUCH BUSINESS IN HIS OWN RETURN OF INCOME. THE TRANSACTION IN CURRENT/SAVING BANK ACCOUNT OF THE ASSESSEE SHRI SURESH KUMAR KHATIK WAS ONLY UNDER POWER OF ATTORNEY FOR SUCH PURPOSE GIVEN BY SHRI ROOP LAL DAMOR TO HIM IN THE INTEREST OF HIS BUSINESS EXPE DIENCY. HENCE THE WHOLE ADDITION MADE BY THE ID. AO IS ARBITRARY AND THE SAME IS NOT JUSTIFIED BECAUSE IT IS BASED ON ASSUMPTIONS AND PRESUMPTION IGNORING THE TRUE AND CORRECT FACTS OF THE CASE AS WELL AS MATERIAL AVAILABLE ON RECORDS. 2. THAT THE BUSINES S WAS OF SHRI ROOP LAL DAMOR AND TRANSACTIONS APPEARING IN THE CURRENT ACCOUNT WERE EXECUTED BY THE ASSESSEE FOR AND ON BEHALF OF SHRI ROOPLAL DAMOR ON THE BASIS OF POWER OF ATTORNEY EXECUTED BY THE EMPLOYER IN FAVOUR OF EMPLOYEE I.E. ASSESSEE. COPY OF POW ER OF ATTORNEY IS ENCLOSED HEREWITH FOR READY REFERENCE. 3. SHRI ROOPLAL DAMOR IS PROPRIETOR OF THE BUSINESS OF PETROL PUMP OF INDIAN OIL COMPANY AND THE BUSINESS IS CONDUCTED UNDER THE NAME AND STYLE OF M/S. R.L. PETROLEUM AT NH NO.8 NAYAGAON, BICHIWARA. THE DEALERSHIP HAS BEEN ALLOTTED BY INDIAN OIL PETROLEUM CORPORATION LIMITED TO SHRI ROOPLAL DAMOR TO RUN PETROL PUMP AT NH NO.8 13 NAYAGAON, BICHIWARA. THE LICENSE TO CONDUCT PETROLEUM BUSINESS ISSUED BY DISTRICT SUPPLY OFFICER WAS ALSO IN THE NAME OF SHRI ROOPLAL DAMOR ONLY. 4. THE POWER OF ATTORNEY CLEARLY SPEAKS THE TRUTH REGARDING THE OWNERSHIP OF BUSINESS AS WELL AS IN ORDER TO CONDUCT BUSINESS THE POWERS WERE GIVEN TO THE ASSESSEE BY THE OWNER. THE ASSESSEE HAS RECEIVED SALARY ONLY WHICH HAS BEEN DULY ASSESSED BY THE LEARNED AO UNDER THE HEAD SALARY. HENCE THE TRANSACTIONS RELATED TO BUSINESS THROUGH CURRENT ACCOUNT BY THE ASSESSEE UNDER AUTHORITY THROUGH POWER OF ATTORNEY CANNOT BE TREATED AS TRANSACTIONS OF THE OWNERSHIP OF THE ASSESSEE. SHRI ROOPLAL DAMOR HAS ISSUED SALARY CERTIFICATE TO THE ASSESSEE WHICH CLEARLY SPEAKS ABOUT THE FACT THAT HE HIMSELF WAS THE OWNER OF THE BUSINESS OF R.L. PETROLEUM AND HE HAS PAID SALARY OF RS.2,75,000/ - TO THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. THIS CERTIFICAT E WAS AVAILABLE BEFORE THE LEARNED AO IN ITS RECORDS DURING THE COURSE OF ASSESSMENT ALSO. FURTHER, SHRI ROOPLAL DAMOR HAS ALSO FILED HIS RETURN OF THE YEAR UNDER CONSIDERATION AND IN SUCH RETURN HE HAS DULY DECLARED INCOME FROM M/S. R.L. PETROLEUM. HE IS REGULAR ASSESSEE AT PAN NO. AEBPD2021F. THIS FACT WAS ALSO AVAILABLE ON RECORDS AT THE TIME OF EX - PARTE ASSESSMENT OF THE ASSESSEE IN WHICH THE INCOME HAS BEEN INCLUDED IN THE HANDS OF THE ASSESSEE BY THE LEARNED ASSESSING OFFICER. THE LD. AO HAS ISSUED NO TICE TO SHRI ROOPLAL DAMOR IN ORDER TO VERIFY THE CONTENTIONS OF THE ASSESSEE AND SHRI ROOPLAL DAMOR HAS NOT RESPONDED IN RESPONSE TO NOTICE UNDER SECTION 133(6) OF THE LD. AO. THEREAFTER AS PER LAW THE LD. AO HAS TO CONTINUE THE ENQUIRY BY ISSUE OF NOTICE UNDER SECTION 131 SO THAT THE CORRECT FACTS CAN BE BROUGHT TO RECORDS BEFORE FRAMING EX - PARTE ASSESSMENT. SIMILARLY WHATEVER FACTS COLLECTED THROUGH INDEPENDENT ENQUIRY SHOULD HAVE BEEN CONFRONTED WITH THE ASSESSEE. NOTHING HAS BEEN DONE IN THIS RESPECT B Y THE LD. AO BEFORE RESORTING TO EX - PARTE ASSESSMENT IN THIS CASE. HENCE THE ARBITRARY ADDITION CANNOT BE SUSTAINED IN THE HANDS OF ASSESSEE. AS PER THE PRINCIPAL OF NATURAL JUSTICE AND AS PER SETTLED LAW NO INCOME CAN BE ASSESSED TWICE I.E. IN THE HANDS O F DIFFERENT ASSESSEE AS THE SAME TANTAMOUNT TO THE DOUBLE TAXATION OF THE SAME INCOME. CONSIDERING THE TRUE AND CORRECT FACT THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED AND AS THE SAME IS CONTRARY TO THE REAL FACTS OF THE CASE HENCE DESERVES TO BE DELETED. WE REQUEST YOUR GOODSELF TO PLEASE DELETE THE SAME ON THIS GROUND ALONE IN THE INTEREST 14 OF EQUITY AND JUSTICE. 5. THE LD. AO HAS NOT APPRECIATED THE FACT THAT INCOME OF THIS BUSINESS WAS ALREADY DECLARED AND ASSESSED IN THE HANDS O F SHRI ROOPLAL DAMOR. THE SEPARATE CONSIDERATION OF THE SAME IN THE HANDS OF ASSESSEE TANTAMOUNT TO DOUBLE TAXATION OF SAME INCOME ONCE IN THE HANDS OF THE ASSESSEE AND SECONDLY ON THE HANDS OF ROOP LA L DAMOR. FURTHER, UNDER ANY CIRCUMSTANCES IF REQUIRES T O BE ASSESSED IN THE HANDS OF ASSESSEE EVEN THEN THE TELESCOPIC SET OFF OF THE SAME IS REQUIRED TO BE ALLOWED WHILE ASSESSING THE CASH DEPOSITS IN BANK AS UNEXPLAINED. THE LD. AO FAILED TO UNDERSTAND THE CORRECT FACTS AS WELL AS IN CALCULATION OF UNEXPLAIN ED CASH DEPOSITS IF ANY. THE ARBITRARY ADDITION MADE IS NOT JUSTIFIED ON THIS ACCOUNT ALSO. 6. ALTERNATIVELY, WITHOUT PREJUDICE TO THE ABOVE SUBMISSION ON THIS ACCOUNT EVEN THE ESTIMATES MADE BY THE LD. AO WERE ARBITRARY AND WITHOUT ANY PROPER BASE FOR THE SAME. IN THIS RESPECT WE HAVE TO SUBMIT THAT THE LEARNED AO HAS NOT MENTIONED IN THE ORDER ABOUT ANY OTHER BUSINESS OF THE ASSESSEE BUT SIMPLY STATED THAT THE AMOUNT DEPOSITED IN CURRENT ACCOUNT TO THE TUNE OF RS.4,43,15,760/ - AS TURNOVER OF BUSINESS AND HAS APPLIED ARBITRARY RATE OF NET PROFIT ON SUCH TURNOVER WITHOUT GIVING ANY ILLUSTRATION OF ANY COMPARATIVE CASE OF PETROL PUMP BUSINESS IN WHICH NET PROFIT TO THIS EXTENT WAS EVER ASSESSED. THE WITHDRAWALS APPEARING IN THE CURRENT ACCOUNT CLEARLY REFLEC TED THAT THE SAME WERE THROUGH CHEQUES IN FAVOUR OF BANK MENTIONED YOURSELF AGAINST WHICH THE BANK HAS ISSUED DEMAND DRAFT IN FAVOUR OF INDIAN OIL PETROLEUM CORPORATION. BANK CERTIFICATE IN THIS RESPECT IS ATTACHED HEREWITH. THIS GOES TO PROVE THAT THE WIT HDRAWALS WERE UTILIZED FOR PURCHASE OF PETROLEUM PRODUCTS BY R.L. PETROLEUM ONLY. BILLS ISSUED BY INDIAN OIL PETROLEUM CORPORATION AND ADJUSTMENT OF DEMAND DRAFTS AGAINST SUPPLIES ARE IN SUPPORT OF OUR CLAIM THAT THE DEPOSITS AND WITHDRAWALS WERE IN CONNEC TION WITH THE BUSINESS OF M/S. R.L.PETROLEUM. THE SALES WERE IN CASH ONLY AND LUMP SUM CASH WAS DEPOSITED IN CURRENT ACCOUNT FOR PURCHASE OF GOODS. UNDER THE ABOVE FACTS AND CIRCUMSTANCES THERE IS NO NEED TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE CON SIDERING THE CURRENT ACCOUNT OF THE ASSESSEE. THERE WAS NO BUSINESS CONDUCTED BY HIM. THE TRANSACTION IN CURRENT ACCOUNT FULLY SUPPORTS THE CLAIM OF ASSESSEE THAT SUCH TRANSACTIONS ARE RELATED TO THE BUSINESS OF SHRI ROOPLAL DAMOR 15 CONDUCTED UNDER THE NAME AND STYLE OF M/S. R.L. PETROLEUM. THE LEARNED AO HAS ERRED AT LAW AS WELL AS ON FACT IN DRAWING ARBITRARY INFERENCE THAT THE DEPOSITS IN THE BANK ACCOUNT WERE TRANSACTIONS OF BUSINESS OF THE ASSESSEE AND THE TOTAL DEPOSIT OF RS.4,43,15,760/ - IS TURNOVER OF THE ASSESSEE. THE LEARNED AO HAS IGNORED THE MATERIAL AVAILABLE ON RECORDS AND HAS NOT APPRECIATED THE SAME IN THEIR TRUE PERSPECTIVE BEFORE ARRIVING AT WRONG CONCLUSION REGARDING OWNERSHIP OF BUSINESS AND NATURE OF TRANSACTIONS IN CURRENT ACCOUNT. WE HAVE TO FURTHER SUBMIT THAT THE LEARNED AO HAS FURTHER ERRED IN APPLYING A VERY HIGH FLAT RATE OF NET PROFIT OF 5% ON TURNOVER IN THE PETROL PUMP BUSINESS WITHOUT MENTIONING ANY COMPARATIVE CASE IN THIS REGARD. IN THE COMPARATIVE CASES OF THE AREA THE NET PROFIT RATE DECLARED BY THEM AND ASSESSED BY THE DEPARTMENT WAS NOT MORE THAN 0.5% IN ANY OF THE CASE. THE RATE DEPENDS UPON THE PROPORTION OF SALE OF PETROL V/S DIESEL BUT IN ALL CUMULATIVE UNDER NO CIRCUMSTANCES THE PETROL PUMP OWNER CAN EARN MORE THAN 0 .5% OF THE TURNOVER. TRADING ACCOUNTS OF OTHER PETROL PUMP OWNERS FOR THE RELEVANT PERIOD ARE ENCLOSED HEREWITH FOR CONSIDERATION AT YOUR END WITH REGARDS TO THE RATE OF NET PROFIT IF ANY APPLIED IN THIS CASE. CONSIDERING THE OVERALL SUBMISSION, RECORDS, FACTS AND CIRCUMSTANCES OF THE CASE THE WHOLE ARBITRARY ADDITION MADE BY THE LEARNED AO IS WITHOUT PROPER BASE AND AGAINST THE PRINCIPAL OF NATURAL JUSTICE. THE ADDITION OF RS.22,15,788/ - IS NOT JUSTIFIABLE IN THIS CASE AND DESERVES TO BE DELETED. WE REQUE ST YOUR GOODSELF TO PLEASE DELETE THE ABOVE ADDITION ON THIS ACCOUNT MADE BY THE LD. AO IN THE INTEREST OF EQUITY AND JUSTICE . 12. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, WAS OF THE VIEW THAT FOLLOWING FACTS WERE RELEVANT FOR ADJUDICATION OF THIS GROUND: - 1. SHRI ROOPLAL DAMOR IS PROPRIETOR OF THE BUSINESS OF PETROL PUMP OF INDIAN OIL COMPANY AND THE BUSINESS IS CONDUCTED UNDER THE NAME AND STYLE OF M/S. R.L. PETROLEUM AT NH NO.8 NAYAGAON, BICHIWARA. THE DEALERSHIP HAS BEEN ALLOTTED BY INDIAN OIL PETROLEUM COR PORATION 16 LIMITED TO SHRI ROOPLAL DAMOR TO RUN PETROL PUMP AT NH NO.8 NAYAGAON, BICHIWARA. THE LICENSE TO CONDUCT PETROLEUM BUSINESS ISSUED BY DISTRICT SUPPLY OFFICER WAS ALSO IN THE NAME SHRI ROOPLAL DAMOR ONLY. 2. SHRI ROOPLAL DAMOR HAS ALSO FILED HIS RET URN OF THE YEAR UNDER CONSIDERATION AND IN SUCH RETURN HE HAS DULY DECLARED INCOME FROM M/S. R.L. PETROLEUM. HE IS REGULAR ASSESSEE AT PAN NO. AEBPD2021F. THIS FACT WAS ALSO AVAILABLE ON RECORDS AT THE TIME OF EX - PARTE ASSESSMENT OF THE ASSESSEE IN WHICH T HE INCOME HAS BEEN INCLUDED IN THE HANDS OF THE ASSESSEE BY THE LD. AO. 3. THAT THE BUSINESS WAS OF SHRI ROOP L AL DAMOR AND TRANSACTIONS APPEARING IN THE CURRENT ACCOUNT WERE EXECUTED BY THE ASSESSEE FOR AND ON BEHALF OF SHRI ROOPLAL DAMOR ON THE BASIS OF POWER OF ATTORNEY EXECUTED BY THE EMPLOYER IN FAVOUR OF EMPLOYEE I.E. ASSESSEE. COPY OF POWER OF ATTORNEY HAS BEEN SUBMITTED BY THE LD. AR. 4. THE INCOME WAS RELATED TO R.L.PETROLEUM AND SHRI ROOP LA L DAMOR WHO HAS ALREADY DECLARED THE INCOME FROM SUCH BUS INESS IN HIS RETURN OF INCOME. THE ACCOUNTS OF R.L.PETROLEM WERE DULY AUDITED UNDER SECTION 44 AB OF IT ACT AND SHRI ROOP LA L DAMOR WAS PROP, OF SUCH BUSINESS AND HAS DULY DECLARED INCOME FROM SUCH BUSINESS IN HIS OWN RETURN OF INCOME. THE TRANSACTION IN C URRENT/SAVING BANK ACCOUNT OF THE ASSESSEE SHRI SURESH KUMAR KHATIK WAS ONLY UNDER POWER OF ATTORNEY FOR SUCH PURPOSE GIVEN BY SHRI ROOP LAL DAMOR TO HIM IN THE INTEREST OF HIS BUSINESS EXPEDIENCY. 5. THE POWER OF ATTORNEY CLEARLY SPEAKS THE TRUTH REGARDIN G THE OWNERSHIP OF BUSINESS AS WELL AS IN ORDER TO CONDUCT BUSINESS THE POWERS WERE GIVEN TO THE ASSESSEE BY THE OWNER. THE ASSESSEE HAS RECEIVED SALARY ONLY WHICH HAS BEEN DULY ASSESSED BY THE LEARNED AO UNDER THE HEAD SALARY. HENCE THE TRANSACTIONS RELAT ED TO BUSINESS THROUGH CURRENT ACCOUNT BY THE ASSESSEE UNDER AUTHORITY THROUGH POWER OF ATTORNEY CANNOT BE TREATED AS TRANSACTIONS OF THE OWNERSHIP OF THE ASSESSEE. SHRI ROOP LAL DAMOR HAS ISSUED SALARY CERTIFICATE TO THE ASSESSEE WHICH CLEARLY SPEAKS ABOU T THE FACT THAT HE HIMSELF WAS THE OWNER OF THE BUSINESS OF R.L. PETROLEUM AND HE HAS PAID SALARY OF RS.2,75,000/ - TO THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. THIS CERTIFICATE WAS AVAILABLE BEFORE THE LEARNED AO IN ITS RECORDS DURING THE COURSE OF ASS ESSMENT ALSO. FURTHER, SHRI ROOPLAL DAMOR HAS ALSO FILED HIS RETURN OF THE YEAR UNDER CONSIDERATION AND IN SUCH RETURN HE 17 HAS DULY DECLARED INCOME FROM M/S. R.L. PETROLEUM. HE IS REGULAR ASSESSEE AT PAN NO. AEBPD2021F. THIS FACT WAS ALSO AVAILABLE ON RECOR DS AT THE TIME OF EX - PARTE ASSESSMENT OF THE ASSESSEE IN WHICH THE INCOME HAS BEEN INCLUDED IN THE HANDS OF THE ASSESSEE BY THE LEARNED ASSESSING OFFICER AS PER THE PRINCIPAL OF NATURAL JUSTICE AND SETTLED LAW NO INCOME CAN BE ASSESSED TWICE I.E. IN THE HA NDS OF DIFFERENT ASSESSEE AS THE SAME TANTAMOUNT TO THE DOUBLE TAXATION OF THE SAME INCOME. 13 THE LD. CIT(A) FURTHER OBSERVED THAT SHRI ROOP LAL DAMOR PROPRIETOR OF M/S. R.L. PETROLEUM HAD RECORDED THE PURCHASES, SALES & EXPENSES MADE THROUGH THE BANK ACCOUNT OF THE ASSESSEE AND NET PROFIT HAD BEEN DECLARED BY HIM. HE, THEREFORE, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 14 LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERAT ED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 09/12/2011. IT WAS FURTHER STATED THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE THAT THE TRANSACTIONS IN HIS ACCOUNT WERE RELATED TO BUSINESS OF SHRI ROOP LAL DAMOR AND HE WAS GETTING SALARY ONLY. THEREFORE, THE ADDITION WAS RIGHTY MADE BY THE ASSESSING OFFICER AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE IMPUGNED ADDITION . 15 IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED 18 THAT THE BUSINESS WAS OF SHRI ROOP LAL DAMOR AND THE TRANSACTIONS APPEARING IN THE CURRENT ACCOUNT WERE EXECUTED BY THE ASSESSEE FOR AND ON BEHALF OF SHRI ROOP LAL DAMOR ON THE BASIS OF POWER OF ATTORNEY EXECUTED BY THE EMPLOYER IN FAVOUR OF THE EMPLOYEE I.E. ASSESSEE . OUR ATTENTION WAS DRAWN TOWARDS PAGE NOS. 48 TO 50 OF THE ASSESSEES PAPER BOOK , WHICH IS COPY OF THE POWER OF ATTORNEY. IT WAS CONTENDED THAT THE POWER OF ATTORNEY CLEARLY SPEAKS THE TRUTH REGARDING OWNERSHIP OF THE BUSINESS AS WELL AS IN ORDER TO CONDUCT BUSINESS, THE POWER S WERE GIVEN TO THE ASSESSEE BY THE OWNER AND THAT THE ASSESSEE HAD RECEIVED SALARY WHICH HAD BEEN DULY ASSESSED BY THE ASSESSING OFFICER UNDER THE HEAD SALARY. HENCE, THE TRANSACTION RELATED TO BUSINESS THR OU GH POWER OF ATTORNEY COULD NOT HAVE BEEN TREATED AS TRANSACTIONS OF THE OWNERSHIP OF THE ASSESSEE . IT WAS FURTHER STATED THAT THE WITHDRAWALS APPEARING IN THE CURRENT ACCOUNT CLEARLY REVEALED THAT THE SAME WERE THROUGH CHEQUES IN FAVOUR OF THE BANK MENTIONED YOURSELF , AGAINST WHICH THE BANK HAD ISSUED DEMAND DRAFT IN FAVOUR OF INDIAN OIL PETROLEUM CORPORATIO N AND BANK CERTIFICATE IN THIS RESPECT WAS FILED BEFORE THE LD. CIT(A) WHICH CLEARLY SUPPORTED THE CLAIM THAT THE DEPOSITS AND WITHDRAW A LS WERE IN CONNECTION WITH BUSINESS OF M/S. R.L. PETROLEUM . THEREFORE, THE LD. CIT(A) RIGHTLY DELETED THE IMPUGNED ADDITION. 19 16 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE , IT IS NOTICED THAT THE ASSESSEE WAS ACTING ON BEHALF OF SHRI ROOP LAL DAMOR, WHO GAVE POWER OF ATTORNEY DATED 06/07/2007 TO THE ASSESSEE, COPY OF WHICH IS PLACED AT PAGE NOS. 48 TO 50 OF THE ASSESSEES PAPER BOOK , THE SAID POWER OF ATTORNEY WAS GIVEN TO RUN THE PETROL PUMP IN THE NAME OF SHRI ROOP LAL DAMOR . THE INCOME FROM THE SAID PETROL PUMP WAS OF SHRI ROOP LAL DAMOR , WHO IS ASSESSED TO INCOME TAX . IN THE PRESENT CASE, IF ASSESSING OFFICER WAS HAVING ANY DOUBT WITH REGARD TO CLAIM OF THE ASSESSEE THAT HE WAS ONLY A POWER OF ATTORNEY HOLDER FOR THE BUSINESS OF SHRI ROOP LAL DAMOR , THEN HE SHOULD NOT HAVE ASSESSED THE INCOME FROM THIS BUSINESS IN THE HANDS OF SHRI ROOP LAL D A MOR , WHO IS HAVING DEALERSHIP OF INDIAN OIL CORPORATION LTD. MOREOVER, THE PAYMENTS FROM CURRENT ACCOUNTS WERE MADE TO THE INDIAN OIL CORPORATION, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE BY CONSIDERING THE TRANSACTIONS IN THE CURRENT ACCOUNT ( OPERATED BY THE ASSESSEE ON BEHALF OF SHRI ROOP LAL DAMOR ) , AS THE TURNOVER OF THE ASSESSEE WAS NOT JUSTIFIED PARTICULARLY WHEN SHRI ROOP LAL DAMOR WAS A SSESSED TO INCOME TAX . THEREFORE, THE LD. CIT(A) RIGHTY DELETED THE 20 IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF PRESUMPTION . WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. 17 IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 22 ND SEPTEMBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND SEPTEMBER , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .