ITO, New Delhi V. Shri Jasbir Singh, Delhi

ITA 2068/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3738 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 15-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Charitable institution
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2068/DEL/2009 ASSESSMENT YEAR : 2005-06 INCOME-TAX OFFICER, WARD 35 (3), H BLOCK, VIKAS BHAWAN, NEW DELHI. VS. SHRI JASBIR SINGH, 71/3, EAST AZAD NAGAR, DELHI 110 051. PAN : AASPS 9868 E (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI B.K. GUPTA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 29 TH DECEMBER, 2008 FOR ASSESSMENT YEAR 2005-06. GROUN DS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.11,32, 000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS WHICH WAS INFO RMED THROUGH AIR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD. CIT (A) HAS ERRED IN ACCEPTING ASSESSEES PLEA THAT HIS CASE FALLS UNDER THE PROVISIONS OF SECTION 44AF OF THE IT ACT AND HE HAS DECLARED HIS INCOME AT RS.1,06,500/- WHICH IS HIGHE R THAN THE REQUIRED 5% OF CASH DEPOSITS AT RS.11,37,800/-, WHE REAS THE ASSESSEE HAS NOT APPLIED SECTION 44 AF OF THE IT AC T IN HIS RETURN OF INCOME AND SHOWED SALE OF ONLY RS.9,33,56 0/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD. CIT (A) HAS ERRED IN ACCEPTING ASSESSEES SUBMISSIONS T HAT THE ITA NO.2068/DEL/2009 2 CASH COLLECTION FROM THE CANTEEN AT VASANT VIHAR, D ELHI WERE DEPOSITED AT U.T.I/AXIS BANKS BRANCH AT RISHIKESH. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FORGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEA L. 2. THE ASSESSEE IS RUNNING A CANTEEN IN THE PREMISE S OF GURU HARKISHAN PUBLIC SCHOOL, VASANT VIHAR, DELHI. HE FILED RETUR N OF INCOME AT RS.1,06,500/- ON ESTIMATE BASIS AS ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT. FROM THE AIR, IT CAME TO THE NOTICE OF ASSESSING OFFICER THAT AN AGG REGATE SUM OF RS.11,37,920/- WAS DEPOSITED IN CASH IN THE BANK ACCOUNT NO.156010 100052094 WITH UTI BANK AT DEHRADUN ROAD, RISHIKESH (UTTARAKHAND). THE ASS ESSEE WAS EXAMINED ON THIS ISSUE AND IT WAS STATED BY THE ASSESSEE THAT H E WAS HAVING ONLY ONE SOURCE OF INCOME FROM CANTEEN SERVICES RUNNING AT THE AFOR EMENTIONED SCHOOL. IT WAS STATED THAT HE WAS MAKING REGULAR AND FREQUENT VISI T TO RISHIKESH. DUE TO THE FACT THAT IF THE CASH IS DEPOSITED IN OTHER BRANCHES OF THE BANK THEN CHARGES ARE MADE, THE CASH WAS MOSTLY DEPOSITED IN RISHIKESH BR ANCH. IT WAS STATED THAT THE BUSINESS OF CANTEEN IS A RETAIL SALE AND NET PROFIT OF MORE THAN 10% OF SALES HAS BEEN SHOWN AND U/S 44AF HE DOES NOT REQUIRE TO MAIN TAIN BOOKS OF ACCOUNT. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT SUCH SUBMISSIONS OF THE ASSESSEE AND HE ADDED A SUM OF RS.11,32,300/- TO THE RETURNE D INCOME OF THE ASSESSEE EXCLUDING A SUM OF RS.5,500/- WHICH WAS THE CASH DE POSITED AT BANKS VASANT KUNJ BRANCH. THE ASSESSEE AGITATED THE ADDITION MA DE BY THE ASSESSING OFFICER BEFORE THE CIT (A). 3. BEFORE THE CIT (A) IT WAS SUBMITTED THAT THE ASS ESSEE IS A DISCIPLE OF JODH MAHARAJ JI WHO WAS SETTLED AT RISHIKESH AND IS RUNN ING VARIOUS CHARITABLE INSTITUTIONS. THEREFORE, THE ASSESSEE WAS FREQUENT LY VISITING RISHIKESH AND FOR DOING CHARITABLE ACTIVITY IN THE ASHRAM OF JODH MAH ARAJ JI, HE USED TO MAKE PURCHASES ON BEHALF OF THOSE INSTITUTIONS AT DELHI AND HE WAS RECEIVING PAYMENTS EITHER IN ADVANCE FOR THESE PURCHASES AT RISHIKESH OR HE WAS BEING REIMBURSED FOR THE PURCHASES MADE AT DELHI. NECESSARY EVIDENC ES WERE SUBMITTED TO SUPPORT SUCH CONTENTION AND IT WAS SUBMITTED THAT T HE SAID WORK WAS BEING DONE ITA NO.2068/DEL/2009 3 BY THE ASSESSEE AS SEWA ONLY AND, HENCE, NO ADVERSE INFERENCE SHOULD BE DRAWN IN RESPECT OF CASH DEPOSIT IN THE RISHIKESH B RANCH AS THE ONLY BUSINESS OF THE ASSESSEE WAS RUNNING CANTEEN FROM WHERE SUFFIC IENT PROFIT WAS SHOWN. ACCEPTING THESE SUBMISSIONS AND RELYING UPON THE SU BMISSIONS OF THE ASSESSEE MADE BEFORE THE ASSESSING OFFICER AND AFTER EXAMINI NG ALL THESE FACTS LD. CIT (A) HAS COME TO THE CONCLUSION THAT ADDITION MADE IN TH E HANDS OF THE ASSESSEE WAS WRONG. THE RETURNED INCOME WAS SUFFICIENT TO COVER THE BUSINESS OF THE ASSESSEE OF RUNNING CANTEEN AS MORE THAN 5% NET PRO FIT HAS BEEN SHOWN. THUS, HE HAS DELETED THE ADDITION MADE BY THE ASSESSING O FFICER U/S 68 OF RS.11,32,300/-. THE REVENUE IS AGGRIEVED, HENCE, I N APPEAL. 4. NOTICE OF HEARING WAS SENT TO THE ASSESSEE, HOWE VER, NONE WAS PRESENT. LD. DR WAS ALSO REQUIRED TO EFFECT SERVICE OF NOTIC E ON THE ASSESSEE AND NO EVIDENCE WHATSOEVER HAS BEEN PRODUCED FOR THE SERVI CE OF NOTICE ON ASSESSEE. REFERENCE IN THIS REGARD CAN BE MADE TO THE ORDER S HEET ENTRIES DATED 21.12.09 AND 24.04.10 WHEREBY LD. DR WAS DIRECTED TO SERVE N OTICE ON ASSESSEE. HOWEVER, AS ALL THE FACTS ARE AVAILABLE ON RECORD, WE PROCEED TO DECIDE THE PRESENT APPEAL FILED BY THE REVENUE EX PARTE QUA TH E ASSESSEE. 5. LD. DR, RELYING ON THE ORDER OF ASSESSING OFFICE R PLEADED THAT ASSESSEE COULD NOT EXPLAIN THE DEPOSITS IN HIS BANK ACCOUNT AT RISHIKESH AND THE ASSESSING OFFICER HAS POINTED OUT THAT SALE PROCEED S OF CANTEEN BUSINESS COULD NOT BE DEPOSITED AT RISHIKESH BEING FAR AWAY FROM D ELHI, THEREFORE, THE ADDITION HAS WRONGLY BEEN DELETED BY THE CIT (A) AND HIS ORD ER SHOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. DR. WE HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CIT (A). RIGHT FROM THE BEGINNING IT IS THE CASE OF THE ASSE SSEE THAT HIS ONLY BUSINESS IS RUNNING CANTEEN IN THE AFOREMENTIONED SCHOOL. THE ASSESSING OFFICER HAS ALSO EXAMINED THE ASSESSEE AND HIS STATEMENT IS RECORDED . THE REASON FOR DEPOSITING CASH AT RISHIKESH HAS BEEN EXPLAINED BY THE ASSESSEE IN HIS ITA NO.2068/DEL/2009 4 STATEMENT. IT HAS BEEN EXPLAINED THAT THE ACCOUNT IN RISHIKESH WAS OPENED DUE TO THE FREQUENT VISIT OF THE ASSESSEE TO THE ASHRAM AND IT IS ALSO STATED THAT IF THE CASH IS DEPOSITED IN SOME OTHER BRANCH THE BANK WIL L CHARGE FOR THE SAME AND TO AVOID THOSE CHARGES THE CASH WAS DEPOSITED IN RISHI KESH BRANCH. THE ASSESSING OFFICER COULD NOT FIND ANY OTHER SOURCE O F INCOME OF THE ASSESSEE APART FROM THE RUNNING OF THE CANTEEN. THE ASSESSE E HAS PLACED EVIDENCE ON RECORD TO SHOW THAT HE WAS DISCIPLE OF JODH MAHARAJ JI WHO WAS RUNNING SEVERAL CHARITABLE ACTIVITIES IN THE SHAPE OF ASHRAM, HOSPI TALS AND SCHOOLS AND FOR THESE INSTITUTIONS THE ASSESSEE WAS REQUIRED TO MAKE SOME PURCHASES FROM DELHI. THE PROCEEDS OF CANTEEN SOMETIMES WERE UTILIZED AT DELH I FOR MAKING SUCH PURCHASES AND LATER ON THE ASSESSEE IS REIMBURSED THOSE PAYME NTS IN RISHIKESH AND THUS THERE WAS CASH DEPOSITS IN RISHIKESH. SIMILARLY, I T HAS BEEN EXPLAINED THAT ADVANCES WERE GIVEN AT RISHIKESH WHICH WERE DEPOSIT ED AT RISHIKESH AND PURCHASES ARE MADE AT DELHI FROM THE RECEIPTS OF CA NTEEN ACTIVITY. 7. IN THIS VIEW OF THE SITUATION, AS THERE IS NO O THER EVIDENCE ON RECORD TO PROVE THAT THE ASSESSEE WAS RUNNING ANY OTHER ACTIV ITY AND ALSO KEEPING IN MIND THE FACT THAT THE ASSESSEE WAS ACTUALLY RUNNING CAN TEEN IN THAT SCHOOL OUT OF WHICH THE AMOUNTS WERE RECEIVED, WE ARE OF THE VIEW THAT THE CONTENTION OF THE ASSESSEE THAT HE USED TO DEPOSIT CASH IN RISHIKESH CANNOT BE DISBELIEVED. THE ASSESSEE HAS SHOWN SUFFICIENT PROFITS WITH REGARD T O ITS ACTIVITY OF RUNNING CANTEEN AND HE UNDER LAW IS NOT REQUIRED TO MAINTAI N BOOKS OF ACCOUNT FOR SUCH ACTIVITY. THEREFORE, WE FIND NO INFIRMITY IN THE O RDER OF THE CIT (A) VIDE WHICH THE NECESSARY RELIEF HAS BEEN GIVEN TO THE ASSESSEE. W E UPHOLD HIS ORDER. 8. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.06.20 10. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 18.06.2010. ITA NO.2068/DEL/2009 5 DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES