The Dy.Commissioner of Income-tax, Amritsar. V. Sh. Naveen Kumar, Amritsar.

ITA 219/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8886 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: ASHWANI GUPTA
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER [ I.T.A NO. 219(ASR)/2014 ASSESSMENT YEAR: 2001-02 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-II, AMRITSAR. VS. SH. NAVEEN KUMAR, H.NO.1376/14, MAST GARH, NIMAK MANDI, AMRITSAR. PAN:AAIPC7381A (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R.K. SHARDA (D R.) RESPONDENT BY: SH. ASHWANI GUPTA (CA.) DATE OF HEARING: 23.12. 2015 DATE OF PRONO UNCEMENT: 21.01.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A), DATED 23.01.2014 FOR ASST. YEAR 2001-02. 2. THE GROUNDS OF APPEAL TAKEN BY REVENUE ARE REPRO DUCED BELOW. (I) IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS .25,63,208/- MADE AT A REASONABLE RATE OF 5% OF BANK DEPOSITS IN THE HANDS OF THE ASSESSEE, WHILE REDUCING THE RATE TO A MEAGER 1% IN THE HANDS OF SH. BALDEV RAJ MADDAN, WHO OWNED UP THE BANK ACCOUN TS BY AFFIRMING THROUGH AN AFFIDAVIT AND IN WHOSE HANDS T HE ASSESSMENT HAS BEEN DONE ON SUBSTANTIVE BASIS. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS TO DELET E THE PROTECTIVE ADDITION MADE @ 5% WHILE REDUCING THE PROFIT RATE T O MEAGER 1% IN THE HANDS OF SH. BALDEV RAJ MADAAN WITHOUT ANY REAS ONABLE BASIS, THUS PREJUDICING THE INTERESTS OF REVENUE. ITA NO.219 (ASR)/2014 ASST. YEAR 2001-02 2 3. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 ON THE BASIS O F INFORMATION THAT THE ASSESSEE WAS MAKING LARGE SCALE TRADING OF FOOD GRAINS OUT SIDE THE BOOKS OF ACCOUNT. DURING THE ASSESSMENT PROCEEDING S ON THE BASIS OF EXAMINATION OF TRANSACTIONS IN THE BANK ACCOUNT OF ASSESSEE, THE ASSESSING OFFICER HELD THAT ASSESSEE HAD MADE SUBST ANTIAL PURCHASES AND SALES OF FOOD GRAINS AND THERE WERE TOTAL OF DE POSITS IN THE BANK ACCOUNT TO THE TUNE OF RS.2,79,97,797/-. THE ASSESS ING OFFICER OBSERVED THAT PEAK DEPOSIT IN THE BANK ACCOUNT WAS RS.25,63, 208/- AND THEREFORE, HE HELD THE SAME TO BE INVESTMENT IN THE BUSINESS OF ASSESSEE AND FURTHER HE APPLIED NET PROFIT RATE OF 5% ON TOT AL DEPOSITS OF RS.2,79,97,797/- AND, THEREFORE, HE SHOW CAUSED THE ASSESSEE FOR MAKING AN ADDITION OF RS.39,63,098/-. IN RESPONSE T HE ASSESSEE SUBMITTED AN AFFIDAVIT THAT THE BUSINESS ACTUALLY B ELONGED TO ONE SH. BALDEV RAJ MADAAN AND ALSO FILED ANOTHER AFFIDAVIT DULY SIGNED BY SH. BALDEV RAJ MADAAN WHEREIN HE OWNED SUCH BUSINESS. T HE ASSESSING OFFICER, THEREFORE, HELD THAT THE SUBSTANTIVE ADDIT ION WAS TO BE MADE IN THE HANDS OF SH. BALDEV RAJ MADAN BY ITO WARD-3(2), AMRITSAR BUT HE MADE ADDITION IN THE HANDS OF ASSESSEE ON PROTECTIV E BASIS TO PROTECT THE INTEREST OF REVENUE. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A) AND LEARNED CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE BY HOLDIN G AS UNDER: ITA NO.219 (ASR)/2014 ASST. YEAR 2001-02 3 6. I HAVE GONE THROUGH ASSESSEES SUBMISSION, ASSE SSMENT ORDER AND ASSESSMENT ORDER IN THE CASE OF SH. BALDEV RAJ MADAAN FOR ASSESSMENT YEAR 2001-02. APPELLATE ORDER DATED 22.0 1.2014 HAS BEEN PASSED IN THE CASE OF BALDEV RAJ MADAAN FOR AS SESSMENT YEAR 2001-02 CONFIRMING TRADING INCOME @ 1% ON ALL OF TH E 15 UNACCOUNTED ACCOUNT INCLUDING BANK ACCOUNTS IN THE NAME OF THE ASSESSEE. THE ADDITION ON ACCOUNT OF UNACCOUNTED TR ADING IN CONFIRMED IN THE HAND OF SH. BALDEV MADAAN@ 1% AND ADDITION MADE IN HAND OF ASSESSEE @5% IS DELETED. THE NET PR OFIT TAKEN @5% IS WITHOUT ANY BASIS AND AS HELD IN CASE OF BALDEV MADDAN, SAME IS TAKEN AT 1%. IN VIEW OF THE SAME PROTECTIVE ASSE SSMENT MADE IN HAND OF ASSESSEE WILL NOT SURVIVE. THE ADDITION OF RS.25,63,208/- IS BEING DELETED AS WELL AS SAME HAS ALREADY BEEN CONS IDERED IN THE HAND OF SH. BALDEV RAJ MADAAN, AS HE HAS ALREADY OW NED UP BANK ACCOUNTS IN THE NAME OF THE ASSESSEE. IN VIEW OF TH E ABOVE, PROTECTIVE ADDITION IS DELETED. 5. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LEARNED DR RELIED UPON THE OR DER OF ASSESSING OFFICER WHEREAS THE LEARNED AR SUBMITTED THAT SINCE THE SUBSTANTIVE ADDITION IN THE HANDS OF SH. BALDEV RAJ MADDAN WAS CONFIRMED BY LEARNED CIT(A) IN APPELLATE ORDER AND THEREFORE, TH E PROTECTIVE ASSESSMENT WAS TO BE DELETED. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN THE CASE OF BALDEV RAJ MADAAN FOR ASST. YEAR 2001-02, THE LEARNED CIT(A) HAS UPHE LD THE TRADING ADDITION ON ACCOUNT OF ALL 50 UNACCOUNTED BANK ACCO UNTS INCLUDING BANK ACCOUNT IN THE NAME OF ASSESSEE. SINCE THE SUB STANTIAL ADDITION HAD ATTAINED FINALITY THE PROTECTIVE ASSESSMENT MAD E IN THE HANDS OF THE ITA NO.219 (ASR)/2014 ASST. YEAR 2001-02 4 ASSESSEE WILL NOT SURVIVE. THE LEARNED CIT(A)S OR DER IN THIS RESPECT IS A REASONED ONE AND WE DO NOT FIND ANY INFIRMITY IN TH E SAME. 8. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED:21.01.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.