Sh Pawan Katia Sons, Bathinda V. The Income-tax Officer, Bathinda

ITA 224/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7811 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-08-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Unexplained cash credit; Opportunity of being heard; Peak credit
• Section: 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 I.T.A NO. 224/(ASR)/2015 ASSESSMENT YEAR: 2011-12 PAN: AACHP1441G SH. PAWAN KATIA SONS C/O M/S LUXMI OIL MILLS, AMRIK SINGH ROAD, BATHINDA. VS. INCOME TAX OFFICER WARD 1 (1), BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA ( ADV.) RESPONDENT BY: SH. RAHUL DHAWAN (D. R.) DATE OF HEARING: 09.08.2017 DATE OF PRONOUNCEMENT: 20.09.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), BATHINDA DATED 12.03.2015 FOR ASST. YEAR: 2011-12. 2. THE ASSESSEE HAS TAKEN TWO GROUNDS OF APPEAL; HO WEVER, THE CRUX OF GROUNDS OF APPEAL IS THE ACTION OF LD. CIT(A) BY WHICH HE HAS SUSTAINED AN ADDITION OF RS.17,32,650/- AS PEAK CRE DIT UNDER SECTION 69 OF THE ACT FOR DEPOSITS OF CASH IN THE BANK ACCOUNT OF ASSESSEE. 3. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE DECLARED AN INCOME OF RS.17,5,290/-AS HUF IN THE NAME OF M/S PAWAN KATIA AND SONS. THE ASSESSING OFFICER ON THE BASIS OF AIR INFORMATION CONFRONTED THE ASSESSEE TO EXPLAIN CASH DEPOSITS ON VARIOUS ITA NO. 224(ASR)/2015 ASSESSMENT YEAR: 2011-12 2 DATES AMOUNTING TO RS.28,46,150/-. THE ASSESSEE SUB MITTED THAT CASH WAS DEPOSITED OUT OF CASH IN HAND AND ALSO FILED A SUMMARY OF CASH TRANSACTIONS WHICH THE ASSESSING OFFICER HAS MADE P ART OF HIS ORDER AT PAGE 3. THE ASSESSEE WAS REQUIRED TO GIVE NARRATION AGAINST EACH ENTRY STATING THE SOURCE OF DEPOSITS OF EACH AMOUNT. IN R EPLY THE ASSESSEE SUBMITTED THAT HE HAS ALREADY EXPLAINED BANK ENTRIE S, THEREAFTER THE CASE OF THE ASSESSEE WAS ADJOURNED AND THEREAFTER ASSESS EE DID NOT APPEAR BEFORE ASSESSING OFFICER. AFTER THAT THE ASSESSING OFFICER COMPLETED HIS ASSESSMENT BY MAKING ADDITION OF RS.28,46,150/- U/S 69 OF THE ACT. THE ASSESSING OFFICER FURTHER MADE AN ADDITION OF RS.20 ,50,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LD. C IT(A) AND SUBMITTED VARIOUS SUBMISSIONS. THE LD. CIT(A) ALLOWED PART RE LIEF TO THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH CREDITS TO THE EXTENT O F RS.20,50,000/-, HOWEVER WITH RESPECT TO CASH DEPOSITS, THE LD. CIT( A) UPHELD PEAK ADDITION TO THE EXTENT OF RS.17,32,650/-. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LD. AR SUBMITTED THAT ASSESS EE WAS A HUF AND HE WAS BEING ASSESSED AS INDIVIDUAL ALSO AND HIS WI FE WAS ALSO BEING ASSESSED TO TAX. THE LD. AR SUBMITTED THAT HIS WIFE IN HER INDIVIDUAL CAPACITY WAS HAVING CASH IN HAND TO THE EXTENT OF R S.3,14,501/- AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO P.B. PAGE 5 WHERE A COPY OF BALANCE SHEET AS ON 31.03.2010 WAS PLACED. THE LD. AR SUBMITTED THAT ITA NO. 224(ASR)/2015 ASSESSMENT YEAR: 2011-12 3 SIMILARLY ASSESSEE WAS HAVING AN AMOUNT OF RS.2,57, 893/- AS CASH IN HAND IN HIS INDIVIDUAL CAPACITY AND OUR ATTENTION W AS INVITED TO P.B. PAGE 4 WHERE A COPY OF BALANCE SHEET OF INDIVIDUAL WAS PLACED. THE LD. AR ALSO SUBMITTED THAT THE LD. CIT(A) SHOULD HAVE A LLOWED CREDIT FOR RS.50,000/- WHICH WAS OPENING BALANCE AND ALSO SHOU LD HAVE ALLOWED CREDIT FOR RETURN OF INCOME TO THE TUNE OF RS.1,75, 290/- 7. THE LD. DR ON THE OTHER HAND SUBMITTED THAT ASSE SSEE WAS NOT ABLE TO EXPLAIN THE CASH IN HAND AND LD. CIT(A) HAS ALREADY DEALT WITH THE CONTENTIONS OF ASSESSEE REGARDING AVAILABILITY OF CASH BALANCES IN THE HANDS OF HIS WIFE AND HIS INDIVIDUAL CAPACITY AND T HEREFORE HE HEAVILY PLACED HIS RELIANCE ON THE ORDERS OF AUTHORITIES BE LOW. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THOUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE MAIN ARGUMENT OF ASSESSEE IS WITH REGARD TO THE NON INCLUSION OF CASH IN HAND BELONGI NG TO HIS WIFE AND IN HIS INDIVIDUAL CAPACITY FOR THE PURPOSE OF CALCULAT ION OF PEAK CREDIT. THE LD. CIT(A) HAS NOT GIVEN CREDIT FOR THESE AMOUNTS A S THE ASSESSING OFFICER DURING REMAND PROCEEDINGS HAS HELD THAT THIS ARGUME NT WAS NOT TAKEN BEFORE LD. CIT(A). HOWEVER WE ARE OF THE OPINION TH AT EVEN IF THIS ARGUMENT WAS NOT TAKEN BEFORE LD. CIT(A), THE ASSES SING OFFICER SHOULD HAVE EXAMINED THE CLAIM OF ASSESSEE SO FAR AS REGAR DS THESE ITEMS WHICH THE ASSESSEE HAD CLAIMED TO HAVE UTILIZED FOR THE P URPOSE OF DEPOSITS IN BANK ACCOUNT. THEREFORE WE DEEM IT APPROPRIATE TO R EMIT THE ISSUE BACK TO THE ASSESSING OFFICER WHO SHOULD EXAMINE THE CLA IM OF ASSESSEE ITA NO. 224(ASR)/2015 ASSESSMENT YEAR: 2011-12 4 REGARDING UTILIZATION OF CASH BELONGING TO HIS INDI VIDUAL CAPACITY AND TO HIS WIFE FOR DEPOSITS IN THE BANK ACCOUNTS. WHILE F RAMING FRESH ASSESSMENT, THE ASSESSING OFFICER SHOULD ALSO ALLOW A REASONABLE CREDIT OUT OF SAVINGS FROM RETURNED INCOME AND FURTHER MOR E HE SHOULD ALSO ALLOW CREDIT FOR OPENING BALANCE OF RS.50,000/-AS T HE ASSESSEE HAD CLAIMED IN THE ASSESSMENT PROCEEDINGS ITSELF THAT I T WAS HAVING AN OPENING BALANCE OF RS.50,000/- WHICH IS APPARENT FR OM PAGE 3 OF ASSESSMENT ORDER. NEEDLESS TO SAY THAT ASSESSEE WIL L BE PROVIDED SUFFICIENT OPPORTUNITY TO BE HEARD. 9. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.09.2017 SD/- SD/- (N. K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20.09.2017. /GP/SR. 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