Shri Syed Sadiq Hussain , Shidlaghatta V. The Income Tax Officer Ward- 1 , Chikkaballapur

ITA 2090/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7713 (ITAT-BANGALORE)
• Duration Of Justice: 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 26-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD
• Assessee Lawyers: LOKESH JAIN
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Opportunity of being heard
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B, SMC BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.2 090/BANG/2018 (ASST. YEAR - 2014-15) SHRI SYED SADIQ HUSSAIN, NO.117/1, WARD NO.04, CRESENT SCHOOL ROAD, FORT CHIKKABALLAPUR, SHIDLAGHATTA. . APPELLANT PAN ADMPH5321G. VS. THE INCOME-TAX OFFICER, WARD-1, CHIKKABALLAPUR. . RESPONDENT APPELLANT BY : SHRI LOKESH JAIN, C.A RESPONDENT BY : DR. SHANKAR PRASAD, ADDL. CIT DATE OF HEARING : 9-7-2018 DATE OF PRONOUNCEMENT : 13-7-2018 O R D E R PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) INTER ALIA ON FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ('CIT(A)') IS OPPOSED TO LAW, FACTS AND CIRCUMSTANC ES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE, WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY OF BEING HEARD. 3. THE ORDER IS PASSED AGAINST THE PRINCIPLE OF NAT URAL JUSTICE AND THUS LIABLE TO BE QUASHED. ITA NO.2090/B/18 2 4. THE LD.CIT(A) ERRED IN UPHOLDING THE ADDITION MA DE BY THE LEARNED AO, OF RS.12,14,040/- TOWARDS CASH DEPOSITE D IN BANK ACCOUNT WITHOUT APPRECIATING THAT THE APPELLANT HAD DULY DISCHARGED THE ONUS BY PROVING THE SOURCE OF CASH D EPOSIT IN THE BANK ACCOUNTS BY SUBMITTING DETAILS ABOUT HIS B USINESS OPERATIONS AND INCOMES, WHICH IS NOT DISPUTED, AND HENCE, THE ADDITION CONFIRMED OF RS.12,14,040/- IS WITHOUT ANY JUSTIFICATION AND LIABLE TO BE DELETED. 5. THE LD. AO, FURTHER, FAILED TO PAY HEED TO THE S UBMISSION OF CONFIRMATION LETTERS PERTAINING TO RECEIPT OF CASH LOANS FROM RELATIVES, BY THE APPELLANT AT THE TIME OF ASSESSME NT PROCEEDINGS. 6. THAT THE LD. A.O. COMPLETED THE ASSESSMENT IN AN ARBITRARY MANNER WRONGLY INVOKING SECTION 68 OF THE INCOME TA X ACT WHEREIN THE APPELLANT HAD OFFERED EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF AND THE LD. AD HAS FAILED TO REC ORD HIS DISSATISFACTION WHILE COMPLETING THE ASSESSMENT. 7. THE LD. CIT(A) FAILED TO ESCALATE THE FACT THAT THE TRANSACTION IS TO BE LOOKED FROM BUSINESSMEN POINT OF VIEW AND ALSO THAT NO FURTHER DOCUMENTS WERE CALLED FOR EITHER BY THE AO OR THE CIT(A) AND HENCE, HAVING OFFERED THE EXPLANATION ON BUSINESS RECEIPTS AND SUBMITTED THE CONFIRMATION LETTERS AND OTHER DOCUMENTS TO PROVE THE GENUINENESS OF LOANS OBTAINE D, THE SOURCES OF CASH DEPOSITED IN THE BANK ACCOUNT GETS EXPLAINED AND THUS, THE ADDITION CONFIRMED OF RS.12,14,040/- IS UNJUSTIFIED AND LIABLE TO BE DELETED. 8. THE ENTIRE DEPOSIT IS FULLY EXPLAINABLE AND IT I S PRAYED THAT THE CASH DEPOSIT IN THE BANK ACCOUNT IS FROM EXPLAINED SOURCE AND NO PART OF IT CAN BE TREATED AS 'UNEXPLAINABLE CASH CREDIT. 2. DURING THE COURSE OF HEARING, THE LD COUNS EL FOR THE ASSESSEE HAS CONTENDED THAT DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE AO HAS NOTED CERTAIN CASH DEPOSITS IN THE BANK PASS BOO K OF THE ASSESSEE. SINCE THE PASS BOOK IS NOT A PROPER BOOKS OF ACCOUNTS, TH E ENTRIES FOUND THEREIN CANNOT BE CALLED AS UNEXPLAINED CASH CREDIT IN THE BOOKS OF ACCOUNT IN ORDER TO ATTRACT THE PROVISIONS OF SEC. 68 OF THE INCOME- TAX ACT. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE UPON THE FOLLOWING O RDERS OF THE TRIBUNAL. ITA NO.2090/B/18 3 1) SHRI MANASI MAHENDRA PITKAR VS. ITO [2016] 73 T AXMANN.COM 68 (MUMBAI TRIB.) 2) SMT. MANJUSHREE VS. ITO IN ITA NO.374 /BANG/2017(BANG -TRIB.) 3) SMT. ASHA SURENDRA KUMAR VS. ITO IN I TA NO.343/BANG/2017 4) ITO VS. SHRI KAMAL KUMAR MISHRA IN IT A NO.398/LKW/2012 3. ON MERITS, THE LD COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT HE HAS FURNISHED THE DETAILS OF DEPOSITS WITH REGARD TO S OURCE OF DEPOSITS IN THE BANK. 4. THE LD DR ON THE OTHER HAND HAS PLACED R ELIANCE UPON THE PROVISION OF SEC. 292B OF THE ACT IN SUPPORT OF HIS CONTENTIO N THAT MERE MENTIONING OF WRONG SECTION FOR MAKING AN ADDITION DOES NOT IN VALIDATE THE ADDITIONS MADE, WHEREAS, THE ADDITION IS POSSIBLE UNDER DIFFE RENT SECTIONS. THE LD DR HOWEVER CONTENDED THAT IT MAY NOT BE UNEXPLAINED CA SH CREDIT BUT IT IS CERTAINLY UNEXPLAINED INVESTMENTS BY MAKING A DEPOS ITS IN THE BANK U/S 69 OF THE ACT. THEREFORE, THE ADDITION CANNOT BE DELE TED ONLY FOR THE SIMPLE REASON THAT THE ASSESSING OFFICER HAS MENTIONED SEC . 68 IN PLACE OF SEC. 69 OF THE ACT. IT WAS FURTHER CONTENDED THAT BEFORE T HE LOWER AUTHORITIES THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW AND JUDGMENT REFERRED TO BY THE ASSESSEES AR, IT IS NO TED THAT THE ASSESSEE IS A SILK MERCHANT AND IS EARNING INCOME BY TRADING OF S ILK. THOUGH THE ASSESSEE WAS ENGAGED IN THE COMMERCIAL ACTIVITIES BUT ACCORDING TO HIM, HE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS. DURING T HE COURSE OF HEARING, THE AO HAS NOTED THE SUBSTANTIAL DEPOSITS IN CASH I N ASSEESSEES BANK ACCOUNT. SINCE THE ASSESSEE COULD NOT FURNISH SOUR CE OF DEPOSITS, THE AO MADE ADDITION OF CASH DEPOSITS IN THE BANK ACCOUNT U/S 68 OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT SINCE HE DOES NO T MAINTAIN THE BOOKS OF ACCOUNTS, THE ENTRIES FOUND IN CASH BOOK CANNOT BE TREATED AS BOOKS OF ITA NO.2090/B/18 4 ACCOUNTS FOR MAKING ADDITION U/S 68 OF THE ACT. SI NCE THE ASSESSEE WAS DOING HIS OWN BUSINESS OF TRADING IN SILK, THE CONT ENTION OF ASSESSEE THAT HE HAS NOT MAINTAINED BOOKS OF ACCOUNT IS NOT ACCEPTAB LE 6. HE HAS TAKEN THE PLEA TO GET RID OF ADDITION MADE U/S 68 OF THE ACT FOR THE DEPOSIT IN THE BANK. FOR THE DEPOSITS IN THE BA NK, WE CAN UNDERSTAND THAT THE ADDITION MADE U/S 68 IS NOT SUSTAINABLE BUT TH E ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE ACT CAN BE MAD E FOR WHICH THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF SOU RCE OF DEPOSITS. DURING THE COURSE OF HEARING, THE LD COUNSEL HAS CONTENDED THAT HE HAS FILED THE EXPLANATION BEFORE THE AO REGARDING THE SOURCE OF DEPOSITS BUT IT WAS NOT EXAMINED BY THE AO AND HE MADE THE ADDITION. THE COPY OF THE LETTER FILED BEFORE THE AO IS PLACED BEFORE THE TRIBUNAL AND FRO M ITS PERUSAL, I FIND THAT WHATEVER EXPLANATION FURNISHED BY THE ASSESSEE WIT H REGARD TO SOURCE OF DEPOSITS, IT SHOULD HAVE BEEN EXAMINED BY THE AO BY MAKING NECESSARY ENQUIRES. I, THEREFORE, OF THE VIEW THAT THE MATTE R BE EXAMINED BY THE AO IN THE LIGHT OF THE EVIDENCE FILED BY THE ASSESSEE WITH REGARD TO SOURCE OF THE DEPOSITS. IF THE AO IS NOT CONVINCED WITH THE S OURCE OF DEPOSITS, THE ADDITION CAN BE MADE UNDER CORRECT PROVISION OF TH E ACT. ACCORDINGLY, I SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE M ATTER TO THE FILE OF THE AO WITH THE DIRECTION TO RE-ADJUDICATE THE ISSUE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2018 . SD/- (SUNIL KUMAR YADAV) JUDICIAL MEMBER BANGALORE DATED : 13/7/2018 VMS ITA NO.2090/B/18 5 COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRET ARY, ITAT, BANGALORE ITA NO.2090/B/18 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..