Shri Anil Masoun S/O Sh. Raj Kumar, Faridkot V. The Income Tax Office, Faridkot

ITA 216/ASR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9542 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Peak credit; Additional evidence
• Section: 44AD; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER ITA NO.216(ASR)/2015 ASSESSMENT YEAR:2011-12 PAN : AIGPM-6243B SH. ANIL MASOUN, VS. INCOME TAX OFFICER, S/O SH. RAJ KUMAR BHAG MAL SARAF WARD III(4), FAR IDKOT. 301, BLOCK-II, JATINDER MARG. FARIDKOT. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.P.N.ARORA, ADVOCATE RESPONDENT BY: SH. RAHUL DHAWAN, DR DATE OF HEARING: 26/09/2016 DATE OF PRONOUNCEMENT: 19/10/2016 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), BATHINDA, DATED 12.03.2015 FOR THE ASSESSME NT YEAR 2011-12. THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEAL. H OWEVER, THE CRUX OF GRIEVANCE OF THE ASSESSEE IS THE ACTION OF THE LD. CIT(A) BY WHICH HE HAS CONFIRMED THE ADDITION OF RS.31,63,354/-, WHICH TH E AO HAD MADE UNDER SECTION 69 OF THE INCOME TAX ACT (IN SHORT, THE ACT), 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ITA NO. 216/ASR/2015 A.Y. 2011-12 2 ASSESSEE WAS MAINTAINING TWO SAVINGS BANK ACCOUNT W ITH ICICI BANK AND AXIS BANK. THE AO OBSERVED THAT THE ASSESSEE HA D MADE CASH DEPOSITS AMOUNTING TO RS.49,92,900/- AND RS.23,05 ,200/- RESPECTIVELY IN THESE BANK ACCOUNTS. THE ASSESSEE WAS CONFRONTED AND THE ASSESSEE SUBMITTED THAT HE HAD CASH BALANCE OF RS.13,65,556 /- AS ON 31.03.2010. IT WAS SUBMITTED THAT MOST OF THE DEPOS ITS WERE MADE OUT OF CASH BALANCES AS ON 31.03.2010 AND OUT OF WITHDRAWA LS FROM THE BANK ACCOUNT. IT WAS FURTHER SUBMITTED THAT NO NEW CASH WAS DEPOSITED AND CASH DEPOSITED DURING THE YEAR WAS FULLY EXPLAINED AS THE ASSESSEE HAD BEEN FILING INCOME TAX RETURNS SINCE ASSESSMENT YEA R 2004-05. THE AO OBSERVED THAT THE TURNOVER OF THE ASSESSEE DECLARED BY HIM WAS ONLY OF RS.7,86,758/-, WHICH WAS QUITE LOW AS COMPARED TO CASH DEPOSITS MADE IN BOTH THE SAVING BANK ACCOUNTS AND THEREFORE, HE HELD THAT CASH DEPOSITS MADE IN BOTH THE SAVINGS BANK ACCOUNT HAD NO NEXUS WITH THAT OF GROSS RECEIPT OF BUSINESS AND THEREFORE, THE ASS ESSEE WAS ASKED TO FURNISH PURCHASE/SALE VOUCHERS AND EVIDENCE OF CAS H IN HAND AS ON 31.03.2010 AND 31.03.2011, DETAILS OF SUNDRY CREDIT ORS/DEBTORS AND DETAILS OF STOCK IN TRADE. THE AO HELD THAT DESPITE VARIOUS OPPORTUNITIES, THE ASSESSEE DID NOT SUBMIT THESE DETAILS AND THERE FORE, THE AO MADE AN ADDITION OF RS.31,47,900/- BEING PEAK CREDIT IN BOT H ACCOUNTS. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND MADE VARIOUS SUBMISSIONS, INCLUDING THE SUBMISSIONS MA DE BEFORE THE AO, ITA NO. 216/ASR/2015 A.Y. 2011-12 3 WHEREIN IT WAS SUBMITTED THAT HE HAD OPENING BALANC E AMOUNT OF RS.13,65,556/-. THE LD. CIT(A), HOWEVER, DID NOT CO NSIDER THE ARGUMENTS OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE FRESH EVIDENCE IN THE FORM OF CERTIFICATE FR OM AXIS BANK PLACED AT PB-48, WITH A VIEW TO PROVE THAT CERTAIN CHEQUES I SSUED IN THE NAME OF VARIOUS PERSONS WERE BEARER CHEQUES AGAINST WHICH T HE ASSESSEE HAD WITHDRAWN CASH THROUGH THESE PERSONS. THE LD. COUNS EL FURTHER INVITED OUR ATTENTION ATTENTION TO THE INCOME TAX RETURN FO R THE ASSESSMENT YEAR 2010-11 PLACED AT APB 20-31 , WHEREIN HE SUBMITTED THAT THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS.2,52,342/-. IT WAS ALSO SUBMITTED THAT THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNT A ND HE HAD FILED RETURN OF INCOME UNDER SECTION 44AD OF THE ACT, AS THE TURNOVER OF THE ASSESSEE WAS QUITE LOW. HE SUBMITTED THAT WHILE FIL ING THE RETURN OF INCOME, THE ASSESSEE HAD DECLARED THE AMOUNT OF CAS H BALANCE AVAILABLE AS ON 31.03.2010 AT RS.13,65,556/-, WHICH IS EVIDEN T FROM THE PART OF INCOME TAX RETURN AT PB-22. HE SUBMITTED THAT AS ON 31.03.2010, THE VALUE OF THE STOCK WAS TO THE TUNE OF RS.6,32,850/- . IT WAS SUBMITTED THAT THE AO AND THE LD. CIT(A) WERE NOT LEGALLY JUS TIFIED IN NOT ACCEPTING THE OPENING CASH IN HAND AS THE FACT WAS EVIDENCED BY THE INCOME TAX RETURNS FILED BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED ITA NO. 216/ASR/2015 A.Y. 2011-12 4 THAT IF THE CASH BALANCE DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AS ON 01.04.2010 ALONGWITH RETURNED INCOME FOR THE ASSESSMENT YEA 2010-11 ALONGWITH WITHDRAWALS FROM THE AXIS BANK T HROUGH BEARER CHEQUES IS CONSIDERED, ALL THE CASH DEPOSITS WILL B E EXPLAINED. 5. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT T HE AO AND THE LD. CIT(A) HAS ALREADY GIVEN RELIEF TO THE ASSESSEE BY TAKING PEAK AMOUNT OF CASH AFTER TAKING INTO ACCOUNT THE WITHDRAWALS FR OM THE BANK. IT WAS SUBMITTED THAT THE ASSESSEE HAS BEEN CLAIMING THAT THE ENTIRE AMOUNT OF CASH AMOUNTING TO RS.13,65,556/- WAS UTILIZED FOR MAKING DEPOSITS IN THE BANK. THEREFORE, HE ARGUED THAT THE LD. COUNSEL BE DIRECTED TO PRODUCE RETURN FOR THE SUCCEEDING YEAR TO EXPLAIN A S TO WHETHER THE OPENING CASH IN HAND OF RS.13,65,556/- GOT EXHAUSTE D IN THE YEAR UNDER CONSIDERATION, AS IT WAS TAKEN FOR THE SUCCEEDING Y EAR. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS AN ADMITTED FACT THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2010-11 UNDER SECTION 44AD OF THE ACT AND THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNT AS IS EVIDENT FROM THE COPY OF RET URN ITSELF, WHEREIN IN COL.6, THE ASSESSEE HAD GIVEN INFORMATION REGARDING AMOUNT OF SUNDRY CREDITORS/DEBTORS, STOCK IN TRADE AND CASH BALANCE . THE ABOVE SAID PART OF THE INCOME TAX RETURN IS PLACED AT APB-22, WHERE IN THE ASSESSEE HAD ITA NO. 216/ASR/2015 A.Y. 2011-12 5 DECLARED CASH BALANCE AT RS.13,65,556/-. THE AUTHO RITIES BELOW HAS NOT ACCEPTED THIS CASH BALANCE DECLARED BY THE ASSESSEE ON ACCOUNT OF THE FACT THAT HE HAD FILED RETURN OF INCOME PURELY ON E STIMATE BASIS, WHICH CANNOT BE CONSIDERED AS TRUE AND CORRECT STATE OF A FFAIRS. THE AUTHORITIES BELOW HELD THAT HIS CLAIM OF HAVING AN OPENING BAL ANCE OF RS/13,65,556/- OUT OF HIS ACCUMULATED SAVINGS OVER THE YEAS CANNOT BE TAKEN AS A RELIABLE FIGURE IN THE ABSENCE OF ANY DO CUMENTATION. HOWEVER, WE FIND THAT THE ASSESSEE DID DECLARE CASH IN HAND AT RS.13,65,556/- AND THE AO DID NOT FIND ANYTHING WRONG IN THE ASSESSMEN T YEAR 2010-11, AS THE CASE OF THE ASSESSEE WAS ACCEPTED IN ASSESSMENT YEAR 2010-11 AND NOTHING WAS BROUGHT TO THE NOTICE OF THE BENCH BY T HE LD. DR THAT THE RETURN FOR THE ASSESSMENT YEAR 2010-11 WAS NOT ACCE PTED. THEREFORE, NON-ACCEPTANCE OF THIS CASH IN HAND AS ON 01.04.201 0 IS NOT LEGALLY TENABLE. THE ARGUMENT OF THE AUTHORITIES BELOW THAT THE ASSESSEE DID NOT HAVE ANY EVIDENCE OF OPENING CASH IN HAND, IS NOT C ORRECT. COPY OF INCOME TAX RETURN DULY SHOWN CASH IN HAND ALONGWITH FIGURES OF SUNDRY CREDITORS/DEBTORS AND STOCK-IN-TRADE. THE ASSESSEE BEING A SMALL TRADER DID NOT MAINTAIN BOOKS OF ACCOUNT. AS PER THE PROVI SIONS OF SECTION 44AD, HE WAS NOT REQUIRED EVEN TO MAINTAIN BOOKS OF ACCOUNT AND AS PER COLUMNS OF INCOME TAX RETURN, HE HAD SUBMITTED THE REQUIRED INFORMATION. THEREFORE, THE ASSESSEE HAD COMPLETED HIS PART OF ONUS. SIMILARLY, WE FIND THAT THE ASSESSEES COUNSEL HAD FILED AN ADDITIONAL EVIDENCE IN THE FORM OF CERTIFICATE FROM AXIS BANK, WHEREIN CERTAIN ITA NO. 216/ASR/2015 A.Y. 2011-12 6 CHEQUES GIVEN TO SOME OTHER PERSONS HAVE BEEN CERTI FIED TO BE PAID IN CASH, WHICH THE AUTHORITIES BELOW HAS NOT TAKEN INT O ACCOUNT , WHILE WORKING OUT THE PEAK CREDIT. SIMILARLY, THE AUTHOR ITIES BELOW HAS NOT TAKEN INTO ACCOUNT THE RETURNED INCOME IN CALCULATI ON OF PEAK CREDIT. THE ARGUMENT OF THE LD. DR THAT HE SHOULD BE GIVEN A CO PY OF RETURN OF SUBSEQUENT YEAR TO SEE AS TO HOW THE ASSESSEE HAD D ECLARED CASH IN HAND IN THE SUBSEQUENT YEAR IS NOT JUSTIFIED AT ALL, AS THE AO IN THE SUBSEQUENT YEAR WILL ASSESS INCOME OF THE ASSESSEE FOR THAT Y EAR AND WILL ALWAYS EXAMINE THIS FACT AND FURTHER THE ARGUMENT OF THE L D. DR TO EXAMINE THE SUCCEEDING YEAR RETURN DOES NOT HAVE ANY BEARING ON THE ASSESSMENT IN THE PRESENT YEAR. THEREFORE, THIS ARGUMENT OF THE LD. DR IS REJECTED. HOWEVER, WE DEEM IT APPROPRIATE TO REMIT THE ISSUE BACK TO THE ASSESSING OFFICER FOR READJUDICATION AND ASSESSING OFFICER WI LL BE FREE TO EXAMINE THE PREVIOUS YEARS RETURNS AND RETURNS OF SUCCEEDIN G YEARS TO EXAMINE THE UTILIZATION OF OPENING CASH IN HAND. THE AO SH OULD EXAMINE THE CERTIFICATE OF AXIS BANK DECLARING CERTAIN WITHDRAW ALS THROUGH CASH TO CALCULATE THE CASH AVAILABLE THROUGH THESE WITHDRA WALS TO EXPLAIN DEPOSITS IN CASH. 7. NEEDLESS TO SAY, THE ASSESSEE WILL BE PROVIDED A DEQUATE AND SUFFICIENT OPPORTUNITY TO PRESENT HIS CASE. THE ASS ESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE A.O. IN THE FRESH PROCEEDINGS. ITA NO. 216/ASR/2015 A.Y. 2011-12 7 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/10 /2016. SD/- SD/- (N.K. CHOUDHRY) (T.S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER /SKR/ DATED: 19/10/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.