Income Tax Officer , GONDA V. Shri Jalaluddin Khan , GONDA

ITA 225/LKW/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78545 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: A P SINHA
• Keywords: Unexplained cash credit; Unexplained investment; Assessment record
• Section: 68; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 225/LKW/2013 ASSESSMENT YEAR: 2009 - 10 INCOME TAX OFFICER GONDA V. SHRI. JALALUDDIN KH AN 906, AWAS VIKAS COLONY GONDA PAN: AJBPJ2399H (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. ALOK MITRA, D.R. RESPONDENT BY: SHRI. A. P. SINHA, ADVOCATE DATE OF HEARING: 09 0 6 2014 DATE OF PRONOUNCEMENT: 18 0 6 2014 O R D E R PER SUNIL KUMAR YA DAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 . THAT THE ID. CIT(A) - II, LUCKNOW HAS ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN MERELY ACCEPTING THE ASSESSEE'S SUBMISSION WITHOUT EXAMINING THE SAME. 2 . THAT THE ID. CIT(A) - II, LUCKNOW HAS ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY NOT APPRECIATING THE FACTS EMERGING OUT FROM THE ASSESSMENT RECORDS AS THE AO ADDED CASH CR EDITS TOTALING TO R S. 13,98,400/ - IN THE TOTAL INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE LAW. 3 . THAT THE ID. CIT(A) - II, LUCKNOW HAS ACCEPTED THE SOURCE OF CASH CREDITS IN RESPECT OF 6 PERSONS WITHOUT VERIFYING THEIR IDENTITY, CREDIT WORTHINESS AND GENUINENESS, OF EACH T RANSACTIONS WITHOUT OBTAINING A REMAND REPORT FROM THE AO. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : 4 . THAT THE ORDER DATED 28.01.2013 PASSED BY THE ID. CIT(A) - II, LUCKNOW IN APPEAL NO. 18/112/ITO/GONDA/LKO/ 1 1 - 12 RELATING TO ASSESSMENT YEAR 2009 - 10 BEING ERRONEOUS IN LAW AND ON FACTS DESERVES TO BE CANCELLED AND ORDER OF THE A.O. DESERVES TO BE RESTORED. 2 . THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO INVOCATION OF PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') ON CASH DEPOSITS IN THE BANK ACC OUNT. 3 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME SHOWING TOTAL INCOME AT RS.4,08,670/ - . THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE ACT ON AN INCOME OF RS.18,07,070/ - HAVIN G NOTED THAT THE ASSESSEE HAS MADE DEPOSITS OF RS.13,98,400/ - IN HIS BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION. IT WAS EXPLAINED BY THE ASSESSEE THAT THE MONEY DEPOSITED IN THE BANK ACCOUNT BELONGED TO CLIENTS, BUT THE ASSESSING OFFICER WAS NOT CON VINCED WITH IT AND HE MADE ADDITION OF THE SAME HAVING INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT. 4 . BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS STATING THEREIN THAT THE ASSESSEE IS A MANAGER WITH RELIANCE LIFE INSURANCE AND THE BA NK ACCOUNT WAS USED BY HIS ADVISORS FOR DEPOSITING CASH OF THE CLIENTS FOR MAKING DRAFT OF PREMIUM FOR POLICIES OF RELIANCE LIFE INSURANCE. THE DETAILS OF PERSONS FROM WHO M CASH RECEIVED AS INSURANCE PREMIUM W ERE FILED AND THE ASSESSING OFFICER HAS COMPLE TED THE ASSESSMENT WITHOUT MAKING ENQUIRIES WITH THE PERSONS WHO GAVE THE MONEY, OR FROM THE INSURANCE COMPANY TO WHOM DRAFTS WERE PAID. THE LD. CIT(A) EXAMINED THE ISSUE IN DETAIL AND HAVING CONVINCED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE, OBSER VED THAT THE MONEY DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IN FACT BELONG TO HIS CLIENTS. THEREFORE, THE AMOUNTS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : DEPOSITED IN THE BANK ACCOUNT SHOULD NOT HAVE BEEN TREATED AS UNEXPLAINED INVESTMENT IN THE BANK ACCOUNT OF THE ASSESSEE. THE LD. CIT(A ) HAS ALSO OBSERVED THAT THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT FOR THIS BUSINESS. WHATEVER ENTRIES OF CASH DEPOSIT ARE FOUND, THEY WERE FROM BANK PASSBOOK/BANK STATEMENTS. THOUGH THE ASSESSING OFFICER HAS MADE ADDITION HAVING INVOKED THE PRO VISIONS OF SECTION 68 OF THE ACT AS UNEXPLAINED CASH CREDIT, BUT THE LD. CIT(A) HAS ALSO DELETED THE ADDITION HAVING OBSERVED THAT EVEN THE PROVISIONS OF SECTION 69 OF THE ACT CANNOT BE INVOKED. THE DETAILED DISCUSSIONS IN THIS REGARD WERE MADE BY THE LD. CIT(A) IN PARA 4(3)(I) TO 4(5) OF HIS ORDER. 5 . NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. 6 . THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, BESIDE S PLACING RELIANCE UPON THE ORD ER OF THE LD. CIT(A), HAS INVITED OUR ATTENTION TO THE JUDGMENT OF THE HON'BLE GAUHATI HIGH COURT IN THE CASE OF ANAND RAM RAITANI VS. CIT [1997] 223 ITR 544 AND THE ORDERS OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER, BARABANKI VS. KAMAL KUMAR MISHRA REPORTED IN 143 ITD 686 AND THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MR. NISAR K. HIRANI, MUMBAI VS. INCOME TAX OFFICER, MUMBAI IN ITA NO.6054/MUM/2013. COPY OF THE JUDGMENT OF THE HON'BLE GUAHATI HIGH COURT AND ORDERS OF THE TRIBUNAL ARE PLACED O N RECORD , WITH THE SUBMISSION THAT PROVISIONS OF SECTION 68 OF THE ACT COULD NOT BE INVOKED FOR THE DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE. FOR INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, MAINTENANCE OF BOOKS OF ACCOUNT OF THE ASSESSEE AR E NECESSARY. 7 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND THE JUDGMENT OF THE HON'BLE GAUHATI HIGH COURT REFERRED TO ABOVE AS WELL AS THE ORDERS OF THE TRIBUNAL IN THE AFORESAID CASES, WE FIND THAT FOR INVOKING PROVISIONS OF SECTION 68 OF THE ACT, MAINTENANCE OF BOOKS OF PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : ACCOUNT BY THE ASSESSEE ARE NECESSARY AND IN THE BANK PASSBOOK THERE SHOULD BE SOME ENTRIES OF UNEXPLAINED CASH CREDIT. IT HAS ALSO BEEN HELD BY THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER, BARABANKI VS. KAMAL KU MAR MISHRA (SUPRA) THAT PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE INVOKED FOR DEPOSIT IN THE BANK ACCOUNT, WHERE BOOKS OF ACCOUNT ARE NOT MENTAINTED . PROVISIONS OF SECTION 68 OF THE ACT CAN ONLY BE INVOKED WHEREIN THE SUM IS FOUND CREDITED IN THE BOOK S OF ACCOUNT OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE EXPRESSED NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND UNSATISFACTORY BY THE ASSESSING OFFICER. 8 . IN THE CASE OF INCOME TAX OFFICER, BARABANKI VS. KAMAL KUMAR MISHRA (SUPRA), THE ASSESSEE WAS ALSO AN ADVOCATE BY PROFESSION AND DID NOT MAINTAIN ANY BOOKS OF ACCOUNT FOR ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER NOTICED DEPO SITS IN THE PASSBOOK OF THE ASSESSEE ON DIFFERENT DATES. SIMILAR IS THE POSITION IN THE INSTANT CASE WHERE THE ASSESSEE IS AN ADVOCATE BY PROFESSION AND CASH DEPOSITS WERE NOTICED FROM THE PASSBOOK OF THE BANK ACCOUNT OF THE ASSESSEE . THEREFORE, THE IMPU GNED ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER, BARABANKI VS. KAMAL KUMAR MISHRA (SUPRA), IN WHICH WE HAVE TAKEN A VIEW THAT PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE INVOKED FOR THE CASH DEPOSITS IN THE B ANK ACCOUNT. SIMILAR WAS THE POSITION IN THE CASE OF MR. NISAR K. HIRANI, MUMBAI VS. INCOME TAX OFFICER (SUPRA). WE, THEREFORE, FOLLOWING THE AFORESAID CASES, ARE OF THE VIEW THAT PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE INVOKED IN THE INSTANT CASE. 9 . SO FAR AS INVOCATION OF PROVISIONS OF SECTION 69 OF THE ACT IS CONCERNED, THE LD. CIT(A) HAS ALSO GIVEN A CATEGORICAL FINDING THAT THE DEPOSITS IN THE BANK WERE ALSO DULY EXPLAINED BY THE ASSESSEE AND NO ADDITION IS CALLED FOR UNDER SECTION 69 OF THE AC T. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 10 . KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT ADDITION UNDER SECTION 68 OR 69 OF THE ACT CANNOT BE MADE FOR THE SAID CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. WE, THEREFORE, FIND NO INFIR MITY IN THE ORDER OF THE LD. CIT(A) WHO HAS PROPERLY ADJUDICATED THE ISSUE IN THE LIGHT OF THE RELEVANT PROVISIONS OF THE LAW. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A). 11 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN T HE OPEN COURT ON 18.6.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH JUNE , 2014 JJ: 1006 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )