The ITO, Ward-6(5), Ahmedabad V. Shri Govindbhai Bhavandas Patel, Ahmedabad

ITA 2097/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94293 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: P D SHAH
• Keywords: Presumptive income
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) I.T. A. NO.2097/AHD/2012 (ASSESSMEN T YEAR: 2009-2010) THE I.T.O., WARD-6(5), AHMEDABAD V/S SHRI GOVINDBHAI BHAVANDAS PATEL 215, SHREEJI APARTMENT, K.K. NAGAR CHAR RASTA, GHATLODIA, AHMEDABAD- 380061 (APPELLANT) (RESPONDENT) PAN: AOOPP6311H APPELLANT BY : SHRI NARENDRA SINGH, SR. D .R. RESPONDENT BY : SHRI P.D. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 19-08-201 5 DATE OF PRONOUNCEMENT : 28 -08-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-XI, AHMEDABAD DATED 12.07.2012 FOR A.Y. 2009-2010. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIVING INC OME FROM RETAIL BUSINESS. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2009-2 010 ON 17.12.2009 ITA NO 2097 /AHD/2012 . A.Y. 2009-2 010 2 DECLARING TOTAL INCOME OF RS. 1,59,041/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECT ION 143(3) R.W.S. 144 VIDE ORDER DATED 30.12.2011 AND THE TOTAL INCOME WA S DETERMINED AT RS. 38,35,040/-. AGGRIEVED BY THE ORDER OF A.O., ASSES SEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 12.07.2012 G RANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER O F LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWIN G EFFECTIVE GROUND:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS. 36,60,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT WHICH IS MORE THAN THE GROSS RECEIPTS, U/S. 68 OF THE I.T. A CT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT ASSESSEE WAS HAVING BANK ACCOUNT WITH IDBI BANK AND IN WHICH ASS ESSEE ON VARIOUS DATES HAD MADE CASH DEPOSITS AGGREGATING TO RS. 36, 60,000/- THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AND EXPLAIN THE TR ANSACTIONS. A.O NOTED THAT ASSESSEE FAILED TO FURNISH THE DETAILS AND IN THE A BSENCE OF SATISFACTORY EXPLANATION, A.O CONSIDERED THE TOTAL DEPOSITS OF R S. 36,60,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. AGGRIEVED BY TH E ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO D ECIDED THE APPEAL BY HOLDING AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS. I HA VE ALSO PERUSED VARIOUS CASE LAWS RELIED UPON BY THE APPELLANT. 'IT IS SEEN THAT APPE LLANT IS ENGAGED IN THE RETAIL BUSINESS OF GARMENTS. THIS FACT IS BORNE OUT FROM T HE RETURN FILED BY THE APPELLANT FOR A.Y. 2009-10. IN THE RETURN OF INCOME, APPELLANT HA S DECLARED AN INCOME OF RS.1,65,426/- WITH THE NARRATION OF 'PROFIT & GAINS OF BUSINESS U/S.44AF'. THE FACT OF RETAIL BUSINESS IS DULY ACKNOWLEDGED BY THE A.O. IN THE ASSESSMENT ORDER ALSO. AS PER THE PROVISIONS OF SECTION 44AF OF I.T. ACT, IT IS PRESUMED THAT APPELLANT EARNS NET PROFIT @ 5% IN RETAIL BUSINESS. AS PER THIS PRESUMP TION, TOTAL TURNOVER OF THE ITA NO 2097 /AHD/2012 . A.Y. 2009-2 010 3 APPELLANT WILL BE RS.33,08,500/- (165425 X 20). THI S WAY, THE FACTS AVAILABLE ON RECORD CLEARLY INDICATES THAT APPELLANT'S TOTAL TUR NOVER IN RETAIL BUSINESS OF GARMENTS IS RS.33,08,500/-. IT IS AN ESTABLISHED PRACTICE IN THE MARKER THAT SALE PROCEEDS IN RETAIL BUSINESS ARE GENERALLY RECEIVED IN CASH THIS WAY, APPELLANT'S EXPLANATION THAT CASH SALE PROCEEDS OF RS.33,08,500/- WAS DEPOSITED WITH BANK IS PLAUSIBLE AND I AM INCLINED TO AGREE WITH THIS CONTENTION OF THE APPEL LANT. PERUSAL OF S.B. ACCOUNT OF THE APPELLANT WITH IDBI BANK FURTHER REVEALS THAT APPEL LANT HAS ISSUED CHEQUES AGAINST CASH DEPOSITS FROM THIS ACCOUNT. THESE CHEQUES ARE PRIMA-FACILY ISSUED TO THE SUPPLIERS. IN THIS REGARD APPELLANT SUBMITTED THAT CASH DEPOSITS MADE IN BANK WERE OUT OF CASH SALE PROCEEDS, SINCE SUPPLIERS WERE INS ISTING PAYMENTS BY CHEQUE. THERE IS NOTHING ON RECORD TO INDICATE THAT THE APPELLANT HAS MADE SAVING OUT OF THESE CASH DEPOSITS. IN VIEW OF ABOVE FACTS I AM OF THE CONSID ERED VIEW THAT THE-APPELLANT HAS FILED A PLAUSIBLE EXPLANATION TO EXPLAIN THE SOURCE OF CASH DEPOSITS TO THE EXTENT OF RS.33,08,500/-. ACCORDINGLY, I AM INCLINED TO AGREE WITH THE CONTENTIONS OF THE APPELLANT. IN THIS REGARD, THE APPELLANT HAS RIGHTL Y PLACED RELIANCE ON THE CASE OF SHRI NARENDRASINGH LAKHUBHAI RANA, ITA NO.2768/AHD/ 2010 DTD.25-2-2011. IN THIS CASE., HON'BLE ITAT OBSERVED AS UNDER. '4. AFTER HEARING THE SUBMISSIONS OF THE BOTH THE S IDES, WE ARE OF THE VIEW THAT IN THE LIGHT OF THE PROVISIONS OF SECTION 44AE I.E. SPECIA L PROVISION FOR COMPUTING PROFITS AND GAINS OF BUSINESS OF PLYING THE GOODS CARRIAGES , THE ASSESSEE WAS NOT EXPECTED TO MAINTAIN REGULAR BOOKS OF ACCOUNTS. HOWEVER, HE IS EXPECTED TO DECLARE THE INCOME PER MONTH IN RESPECT OF THE VEHICLES OWNED BY HIM. IN THE PRESENT APPEAL THAT INCOME OF THE ASSESSEE WAS NOT DOUBTED BY THE REVENUE DEPA RTMENT. THE ONLY REASON WAS THAT ON THE BASIS OF CERTAIN INFORMATION IT WAS NOT ICED THAT THERE WAS A BANK ACCOUNT AND THE ASSESSEE HAD DEPOSITED THE IMPUGNED SUM OF RS.20,37,900/-. HOWEVER, THEREAFTER ON VERIFICATION, THE LEARNED CIT(A) HAS NOTICED THAT THE TOTAL GROSS- RECEIPTS FROM THE TRANSPORT BUSINESS WERE HIGHER TH AN THE SAID DEPOSITS. EVEN DURING THE REMAND PROCEEDINGS, THE SAID EXPLANATION OF THE ASSESSEE WAS NOT DOUBTED. EVEN BEFORE US, THE MONTHLY GROSS-RECEIPTS FROM TRANSPOR T BUSINESS HAVE BEEN PLACED ON RECORD WHICH WERE STATED TO BE CASH RECEIPTS EARNED THROUGH TRANSPORT BUSINESS. FROM THE SIDE OF THE ASSESSEE A DECISION OF THE ITA T, AHMEDABAD BENCH PRONOUNCED ITA NO 2097 /AHD/2012 . A.Y. 2009-2 010 4 IN THE CASE OF SHIVANI BUILDERS V/S. ITO 295 IR (AT ) 281 (AHMEDABAD) HAS ALSO BEEN CITED FOR THE PROPOSITION THAT IF THE ASSESSEE IS S HOWING HIGHER INCOME THAN THE PRESUMPTIVE INCOME, THEN THERE IS NO QUESTION OF FU RTHER ADDITION AND THE INCOME SO DECLARED DESERVES TO BE ACCEPTED. THUS, TOTALITY OF THE CIRCUMSTANCES WARRANTS TO ACCEPT THE VIEW TAKEN BY THE LEARNED CIT(A). THE RE VENUE'S GROUND IS ACCORDINGLY DISMISSED.' 4.3IN VIEW OF THE ABOVE FACTS, I AM INCLINED TO AGR EE WITH THE CONTENTIONS OF THE ID.A.R. ACCORDINGLY, I HOLD THAT APPELLANT HAS EXPL AINED SOURCE OF CASH DEPOSITS TO THE EXTENT OF RS.33,08,500/- AND THE APPELLANT WILL GET RELIEF TO THIS EXTENT. 4.4THE APPELLANT HAS ALSO GIVEN PLAUSIBLE EXPLANATI ON TO EXPLAIN THE SOURCE OF CASH DEPOSITS OF RS.3,51,500/- (36,60,000 -33,08,500). T HE APPELLANT HAS CONTENDED THAT AGRICULTURE INCOME TO THE EXTENT OF RS2,48,000/- HA S BEEN DECLARED BY IT IN ITS RETURN OF INCOME. THE AGRICULTURE INCOME IS ALSO RECEIVED IN CASH. PERUSAL OF THE STATEMENT OF INCOME FILED ALONG WITH INCOME-TAX RETURN REVEAL S THAT APPELLANT HAS DECLARED AGRICULTURE INCOME OF RS,2,48,135/-. THE AGRICULTUR E INCOME HAS BEEN DECLARED IN THE FORM OF INCOME FROM SALE OF CROP OF RS.1,65,685 /- AND INCOME FROM SALE OF MILK RS.82,450/-. SINCE, AGRICULTURE INCOME HAS BEEN DUL Y DECLARED BY THE APPELLANT IN THE RETURN OF INCOME, WHICH IS ACCEPTED BY THE A.O. ACC ORDINGLY, I DO NOT HAVE ANY HESITATION IN ACCEPTING THE SOURCE OF CASH DEPOSIT TO THE EXTENT OF RS.2,48,135/-. THE REMAINING CASH DEPOSIT IS SMALL AMOUNT OF .RS. 1,03 ,365/-. (3,51,500 - 2,48,135) THE APPELLANT SUBMITTED THAT SOURCE OF THIS CASH DEPOSI T IS PERSONAL SAVING. SINCE AMOUNT IS SMALL AND THE APPELLANT IS REGULARLY ASSESSED TO TAX ACCORDINGLY APPELLANT'S CONTENTION IS PLAUSIBLE AND I AM INCLINED TO AGREE WITH THIS CONTENTION OF THE APPELLANT. IN VIEW OF ABOVE I HOLD THAT THE EVIDENC ES AVAILABLE ON RECORD CLEARLY INDICATES THAT APPELLANT HAS DEPOSITED CASH OF RS.3 6,60,000/- IN HIS S.B. ACCOUNT FROM THE DECLARED SOURCES. ACCORDINGLY, ADDITION OF RS.36,60,000/-IS ORDERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 5. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US. ITA NO 2097 /AHD/2012 . A.Y. 2009-2 010 5 6. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. REITERATED THE SUBMISSION MADE BEFORE A.O AND LD. C IT(A) AND SUPPORTED THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION TO THE EXTENT OF DEPOSITS FROM BUSINESS AGGREGATE TO RS. 33,08,500/- HAS NOTED THA T CONSIDERING THE NATURE OF BUSINESS OF ASSESSEE, THE RECEIPTS OF SALE PROCE EDS BY ASSESSEE IN CASH AND THE SAME BEING DEPOSITED IN THE BANK ACCOUNT TO BE A PLAUSIBLE EXPLANATION. LD. CIT(A) HAS ALSO NOTED THAT ASSESSEE HAD ISSUED CHEQUES AGAINST THE CASH DEPOSITS AND CHEQUES WERE PRIMA FACIELY ISSUED TO T HE SUPPLIERS. WITH RESPECT TO THE EXPLANATION OF THE SOURCE OF DEPOSIT S OF RS. 2,48,135/- BEING FROM AGRICULTURAL INCOME WAS ALSO ACCEPTED BY LD. C IT(A) IN VIEW OF THE FACT THAT ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF R S. 2,48,000/- IN THE RETURN OF INCOME AND THE SAME WAS ALSO ACCEPTED BY THE A.O. THE EXPLANATION OF THE BALANCE PORTION OF CASH DEPOSITS OF RS. 1,03,365/- TO BE OUT OF ACCUMULATED SAVINGS WAS ALSO ACCEPTED BY LD. CIT(A) IN VIEW OF THE FACT THAT ASSESSEE WAS REGULARLY ASSESSED TO TAX. CONSIDERING THE TOTALITY OF THE FACTS AND IN VIEW OF ANY CONTRARY MATERIAL PLAC ED ON RECORD BY REVENUE AND FURTHER AS TO HOW THE DECISION RELIED UPON BY L D. CIT(A) WOULD NOT BE APPLICABLE TO THE PRESENT CASE, WE FIND NO REASON T O INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUND OF REVENUE IS DIS MISSED. ITA NO 2097 /AHD/2012 . A.Y. 2009-2 010 6 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28 - 08 - 2015. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD