Shivaji Dagadu Mote, Pune V. Income-tax Officer,

ITA 2054/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1798 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA RASTOGI
• Keywords: Business income

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM . / ITA NO.2054/PN/2013 / ASSESSMENT YEAR : 2007-08 SHRI SHIVAJI DAGADU MOTE, C-4/104, TOWNSHIP B BIGWAN, TAL. INDAPUR, DIST. PUNE PAN NO. AHLPM4864C . / APPELLANT V/S ITO, WARD - 5(4), PUNE . / RESPONDENT / ASSESSEE BY : SMT. DEEPA KHARE / RESPONDENT BY : MS. POOJA RASTOGI / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS) -III, PUNE DATED 23-1 0-2013 FOR THE ASSESSMENT YEAR 2007-08. 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE : THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 31-10-2007 DECLARING TOTAL INCOME OF RS.3,38,792/- AND AGRICULTURAL INCOME OF RS.2 LA KHS. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UND ER CASS AND ACCORDINGLY NOTICE U/S.143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 17-07-2008 AND 26-09-2008. DURING THE COURSE OF SCRUT INY / DATE OF HEARING :10.05.2016 / DATE OF PRONOUNCEMENT:27.05.2016 2 ITA NO.2054/PN/2013 ASSESSMENT THE AO INTER ALIA MADE ADDITION OF RS.22 LAKHS U/S.69A OF THE ACT ON ACCOUNT OF UNACCOUNTED CASH DEPOSITS IN T HE SAVINGS BANK ACCOUNT. THE SAVINGS BANK ACCOUNT WAS ALLEGEDLY NOT DISCLO SED BY THE ASSESSEE IN THE RETURN OF INCOME. AGGRIEVED B Y THE ASSESSMENT ORDER DATED 23-12-2009 THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A) CHALLENGING THE ADDITIONS MADE BY THE AO. THE CIT(A) REJECTED THE SUBMISSIONS OF THE ASSESSEE WITH REGA RD TO THE CASH DEPOSITS IN THE UNDISCLOSED SAVINGS BANK ACCOUNT OF THE ASSESSEE FROM THE CURRENT ACCOUNT. HOWEVER, THE CIT(A) GAVE THE BENEFIT OF TELESCOPING TO THE EXTENT OF RS.9,91,162/- AND C ONFIRMED THE ADDITION OF RS. 12,08,838/-. THE ASSESSEE IS NOW IN THE SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE FINDINGS OF THE CIT(A ) IN CONFIRMING THE ADDITION OF RS.12,08,838/- U/S.69A OF THE ACT. 3. SMT. DEEPA KHARE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD DEPOSITED CASH OF RS.22 LAKHS IN HIS SAVINGS BANK ACCOUNT AFTER WITHDRAWING THE SAME FROM THE CURRENT ACCOUNT OF PROPRIETORSHIP FIRM M/S. SAIKRUPA CONSTRUCTIONS. THE ASSESSEE WAS MAINTAINING BOTH THE ACCOUNTS IN THE SAME BANK, I.E. ORIENTAL BANK OF COMMERCE, DECCAN GYMKHAN, PUNE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE W AS MAINTAINING REGULAR BOOKS OF ACCOUNT, HOWEVER, DUE TO NON- COOPERATION FROM THE TAX CONSULTANT OF THE ASSESSEE, T HE ASSESSEE COULD NOT PRODUCE THE SAME BEFORE THE AO. AT THE TIME OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE AGREED TO THE AD DITION OF RS.22 LAKHS UNDER COMPELLING CIRCUMSTANCES. THE ASSESSEE HAD DEPOSITED THE AMOUNT IN HIS CURRENT ACCOUNT FROM BUSINES S RECEIPTS WHICH ARE DULY REFLECTED IN THE BOOKS OF ACCOUNT. THE A SSESSEE HAD PRODUCED BANK CERTIFICATE BEFORE THE CIT(A) TO SHOW THA T THE CASH WAS 3 ITA NO.2054/PN/2013 WITHDRAWN FROM THE CURRENT ACCOUNT AND WAS DEPOSITED IM MEDIATELY THEREAFTER IN THE SAVINGS BANK ACCOUNT. THE ASSESSEE H AD ESTABLISHED THE NEXUS BETWEEN THE WITHDRAWALS FROM THE C URRENT ACCOUNT AND DEPOSITS IN THE SAVINGS ACCOUNT. HOWEVER, THE CIT(A) HAS BRUSHED ASIDE THE CERTIFICATE ISSUED BY THE BANK AND HAS CONFIRMED THE ADDITION MERELY ON ASSUMPTIONS AND PRESUMP TIONS. THE LD. COUNSEL FURTHER SUBMITTED THAT IF AN OPPORTUNIT Y IS AFFORDED TO THE ASSESSEE, THE ASSESSEE WOULD BE ABLE TO SHOW FRO M THE RECORDS THAT CASH DEPOSITS MADE IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE WERE OUT OF BUSINESS RECEIPTS, AS WELL AS THE REASONS FOR DEPOSITING THE AMOUNT IN SAVINGS ACCOUNT. 4. MS. POOJA RASTOGI REPRESENTING THE DEPARTMENT VEHEM ENTLY SUPPORTED THE FINDINGS OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.12,08,838/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS U/S .69A OF THE ACT. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE SAVINGS ACCOUNT IN WHICH THE CASH WAS DEPOSITED BY THE ASSESSEE WAS NOT DISCLOSED BY THE ASSESSEE. THE CIT(A) HAS GIVEN A CATEGORIC FINDING THAT THE ASSESSEE WAS NOT ABLE TO GIVE PLAUSIBLE RE ASON FOR TRANSFER OF FUNDS FROM CURRENT ACCOUNT TO SAVINGS ACCOUN T THROUGH CASH WITHDRAWAL AND DEPOSITS RATHER THAN TRANSFER THROU GH BANKING CHANNEL. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER CONT ENDED THAT THE ASSESSEE HAD NOT PRODUCED BOOKS OF ACCOUNT EITHER BEFORE THE AO OR BEFORE THE CIT(A). DURING THE SCRUTINY ASSESSM ENT PROCEEDINGS THE ASSESSEE ADMITTED THE ADDITION OF RS.22 LA KHS ON ACCOUNT OF CASH DEPOSITS. THUS, THERE WAS NO OCCASION FO R THE AO TO MAKE FURTHER INVESTIGATION WITH REGARD TO CASH DEPOSITS AND TRACK THE SOURCE OF SUCH CASH. THE ASSESSEE HAD FILED AN AFFIDAVIT IN SUPPORT OF HIS CONTENTIONS. THE SAID AFFIDAVIT IS NOTHING BUT MERELY A S ELF- 4 ITA NO.2054/PN/2013 SERVING DOCUMENT WITHOUT SUPPORT OF ANY COGENT EVIDENC E. THE LD. DEPARTMENTAL REPRESENTATIVE PRAYED FOR UPHOLDING THE FINDIN GS OF THE CIT(A) AND DISMISSING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO PERUSED THE BANK CERTIFICATE PLACED ON RECORD AT PAGE 6 OF THE PAPER BOOK TO SHOW THE LINK BETWEEN THE WITHDRAWALS FROM THE CURRENT ACCOUNT AND DEPOSITS WITH THE SAVINGS ACCOUNT OF THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE H AD NOT DISCLOSED THE SAVINGS ACCOUNT IN WHICH CASH DEPOSITS WERE MADE BETWEEN 21-03-2007 TO 29-03-2007. THE CASH DEPOSITS IN PERSONAL SAVINGS BANK ACCOUNT OF THE ASSESSEE WERE ALLEGEDLY MAD E AFTER WITHDRAWING THE AMOUNT FROM CURRENT ACCOUNT OF THE PROP RIETORSHIP FIRM OF THE ASSESSEE M/S. SAIKRUPA CONSTRUCTIONS. THE A SSESSEE HAS ASSERTED THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT, HOWEVER, DUE TO NON-COOPERATION BY THE TAX CONSULTANT OF THE ASSESSEE, THE ASSESSEE COULD NOT PRODUCE THE BOOKS BE FORE THE AUTHORITIES BELOW. IN SUPPORT OF HIS SUBMISSIONS, THE ASSES SEE HAS PLACED ON RECORD BANK CERTIFICATE DATED 25-11-2011 TO E STABLISH LINK BETWEEN THE WITHDRAWALS AND THE DEPOSITS. WE FIND THAT THE CIT(A) AFTER CONSIDERING THE BANK CERTIFICATE HAS REJECTED THE C ONTENTIONS OF THE ASSESSEE ON THE GROUND THAT WITHDRAWALS ARE MADE B Y ASSESSEE TO HOODWINK THE TAX AUTHORITIES. THE ASSESSEE HAS MADE CA SH DEPOSITS IN THE SAVING BANK ACCOUNT FROM UNACCOUNTED MONEY. THE CASH WITHDRAWALS WERE MADE JUST TO GIVE A COLOUR OF GENUINENES S TO THE SOURCE OF SUCH UNACCOUNTED MONEY. THE CIT(A) HAS FURTHER RAISED DOUBT OVER THE TRANSACTION ON THE GROUND THAT THE AS SESSEE HAS NOT BEEN ABLE TO GIVE REASONS FOR SUCH WITHDRAWALS AND THE DEPOSITS. 5 ITA NO.2054/PN/2013 AFTER PERUSAL OF THE IMPUGNED ORDER, WE OBSERVE THAT THE CIT(A) HAS MADE SUCH OBSERVATIONS MERELY ON PRESUMPTIONS AND PROBABILITIES. 6. ONE OF THE REASONS GIVEN BY THE ASSESSEE FOR NOT EX PLAINING THE TRANSACTIONS AND NOT PRODUCING THE BOOKS OF ACCOUNT BE FORE THE AUTHORITIES BELOW IS THE NON-COOPERATION OF THE TAX CONSU LTANT OF THE ASSESSEE. THE LD. COUNSEL OF THE ASSESSEE HAS PRAYED FOR AN OPPORTUNITY TO EXPLAIN THE ENTIRE TRANSACTIONS. WE ARE OF THE CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE AN OPPO RTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO EXPLAIN THE TRANSACT IONS AS WELL AS PRODUCE THE BOOKS OF ACCOUNT/RELEVANT DOCUMENTS TO SU BSTANTIATE HIS SUBMISSIONS. WE, THEREFORE, REMIT THIS ISSUE BACK TO THE FILE OF AO FOR LIMITED PURPOSE OF VERIFICATION OF THE TRANSACTIONS AND TO ASCERTAIN THE GENUINENESS AND REASONABLENESS OF THE CASH TRANSAC TIONS. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE ALL DOCUMENTS AND R ECORDS IN SUPPORT THEREOF BEFORE THE AO. THE AO AFTER CONSIDERING THE SAME SHALL DECIDE THIS ISSUE AFRESH IN ACCORDANCE WITH LAW. THE FIN DINGS OF CIT(A) IN CONFIRMING THE ADDITION OF RS.12,08,838/- ARE SET AS IDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SE IN THE AFORESAID TERMS. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 27 TH DAY OF MAY, 2016 SD/- SD/- ( PRADIP KUMAR KEDIA ) ( VIKAS AWASTHY ) ACCOUNTANT MEMBER JUDICIAL MEMBER IQ.KS PUNE ; # DATED : 27 TH MAY, 2016. LRH'K 6 ITA NO.2054/PN/2013 '# $# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT (A) - I I I , PUNE 4. 5. 6. THE CIT-III, PUNE ' *, *, IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE