Asha Pramod Shah, Pune V. Income-tax Officer, Ward - 4(5), Pune

ITA 2264/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5164 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 28-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHEI
• Assessee Lawyers: PRAKASH BILLIMORIA
• Keywords: Principle of natural justice; Corroborative evidences
• Section: 40A(3)

Judgement Text

SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.2264/PUN/2017 / ASSESSMENT YEAR : 2006-07 MRS. ASHA PRAMOD SHAH, 51/2, SHAHTRI APARTMENTS, 4, MOLEDINA ROAD, PUNE 411 001 PAN : AWEPS2361L . /APPELLANT VS. ITO, WARD-4(5), PUNE . / RESPONDENT / APPELLANT BY : SHRI PRAKASH BILLIMORIA / RESPONDENT BY : SHRI SANJEEV GHEI / DATE OF HEARING : 04.10.2018 / DATE OF PRONOUNCEMENT: 05.10.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER O F CIT(A)-5, PUNE DATED 27-07-2017 FOR THE ASSESSMENT YEAR 2006-07. 2. GROUNDS RAISED BY THE ASSESSEE ARE EXTRACTED BELOW : 1. THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,72,431/- MADE BY ITO, WARD-4(5) WHILE PASSING THE ORDER. 2. THE LD. AO HAD WRONGLY ADDED RS.5,72,341/- I.E. 20% OF TOTAL CASH EXPENSES OF RS.28,62,154/- ON MERE PRESUMPTION THAT ALL EXPENSES ARE MADE IN CASH IN EXCESS OF RS.20,000/- IN CONTRA VENTION OF SEC.40A(3) THOUGH BOOKS OF ACCOUNTS WERE PRODUCED BEFORE HIM F OR VERIFICATION. 3. THE LD.CIT(A) ALSO IGNORED THE BOOKS OF ACCOUNTS & CONFIRMED THE ABOVE ADDITION OF RS.5,72,431/- INSPITE OF APPELLAN TS ARGUING TAHT THE ENTIRE CASH PAYMENTS OF RS.28,62,154/- ARE NOT AT A LL MADE IN CONTRAVENTION OF SEC.40A(3) OF I.T. ACT. 4. THE APPELLANT BEING SMALL TRADER IS UNABLE TO BE AR SUCH WRONG HARDSHIP & PRAYS FOR DELETION OF THE SAID RS.5,72,4 31/- TO HER INCOME. 5. THE APPELLANT CRAVES TO ADD, ALTER OR MODIFY ANY GROUNDS OF THE APPEAL. ITA NO.2264/PUN/2017 MRS. ASHA P. SHAH 2 3. BRIEFLY STATED RELEVANT FACTS INCLUDES THAT THE ASSESS EE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF SUPPLYING SAND AND STONES FOR BUILDING CONSTRUCTION WORK AND ALSO PROVIDING TRANSPORT SERVICES. ASSESSEE ALSO DERIVES INCOME FROM OTHER SOURCES. DURING THE IMPUGNED ASSESSMENT YEAR, ASSESSEE FILED THE RETURN OF INCOME ON 3 1-10-2006 DECLARING TOTAL INCOME OF RS.2,36,480/-. AO NOTICED THAT ASS ESSEE HAS SHOWN RECEIPTS FROM WORKS AND TRANSPORT AMOUNTING TO R S.42,41,980/- AND EXPENSES AMOUNTING TO RS.39,12,154/-. AO ALSO NOTICED THAT ASSESSEE CLAIMED TO HAVE PAID RS.28,62,154/- IN CASH AND RS.10,50,000/- THROUGH CHEQUES. HOWEVER, IN THE ABSENCE OF SUPPORTING EVIDENCES, THE AO PROCEEDED TO DISALLOW RS.5,72,4 31/- (BEING 20% OF RS.28,62,154/-) AS THE SAME ARE IN CONTRAVENT ION TO PROVISIONS OF SECTION 40A(3) OF THE ACT. AT THE END OF THE ASSESSMENT PROCEEDINGS, THE AO, CONSIDERING THE GP @25%, DETERMINED T HE INCOME OF THE ASSESSEE AT RS.15,39,580/-. 4. IN THE FIRST APPELLATE PROCEEDINGS, ASSESSEE MADE SUB MISSIONS BEFORE THE CIT(A). CIT(A) CALLED FOR A REMAND REPORT FROM TH E AO. AFTER CONSIDERING THE SUBMISSIONS, REMAND REPORT OF THE AO AND THE COUNTER COMMENTS OF THE ASSESSEE, THE CIT(A) CAME TO THE CONCLUS ION THAT GP RATE OF THE ASSESSEE SHOULD BE CONSIDERED AT 8% OF THE TURNOVER. CONTENTS OF PARA NO.4.7 OF THE ORDER OF CIT(A) ARE RELEVANT . COMING TO THE ADDITION OF RS.20% OF THE CASH PAYMENTS, THE CIT(A) SUS TAINED THE ADDITION OF RS.5,72,431/-. EVENTUALLY, THE APPEAL OF THE ASS ESSEE WAS PARTLY ALLOWED. 5. AGGRIEVED WITH THE CONFIRMATION OF ADDITION OF 20% ON CAS H PAYMENTS MADE BY THE CIT(A), THE ASSESSEE IS IN APPEAL B EFORE THE TRIBUNAL WITH THE GROUNDS EXTRACTED ABOVE. ITA NO.2264/PUN/2017 MRS. ASHA P. SHAH 3 6. BEFORE ME, AT THE OUTSET, SHRI PRAKASH BILLIMORIA, ON BEHA LF OF ASSESSEE SUBMITTED THAT THE INDIVIDUAL CASH PAYMENTS OF RS.28,62,154/- MADE BY THE ASSESSEE NEVER EXCEEDED THE LIMIT OF RS.20,000/- SPECIFIED IN THE PROVISIONS OF SECTION 40A(3) OF THE ACT. HE THEREFORE, REQUESTED THE BENCH TO REMAND THE ISSUE TO THE FILE OF AO FOR VERIFICATION OF THE SAME AND PASSING A SPEAKING ON THIS ISSUE. 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAV ILY ON THE ORDERS OF AO/CIT(A). 8. ON HEARING BOTH THE SIDES AND ON PERUSING THE ORDE RS OF AO AND THE CIT(A), I FIND THE AO/CIT(A) HAVE NOT ANALYSED THIS ASP ECT OF CASH PAYMENTS IF THEY HAVE EXCEEDED RS.20,000/- SPECIFIED UNDE R THE PROVISIONS OF SECTION 40A(3) OF THE ACT. THEREFORE, IN THE INTEREST OF ADMINISTRATION OF JUSTICE, I REMAND THE ISSUE TO THE FILE OF AO FOR VERIFICATION OF THE SAME AND PASSING A SPEAKING ORDER ON T HIS ISSUE. NEEDLESS TO MENTION, THE AO SHALL GIVE REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRIN CIPLES OF NATURAL JUSTICE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSE E ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 05 TH DAY OF OCTOBER, 2018. SD/- (D.KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 05 TH OCTOBER, 2018. SATISH ITA NO.2264/PUN/2017 MRS. ASHA P. SHAH 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A)-5, PUNE 4. / THE PR.CIT-4, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVA TE SECRETARY , / ITAT, PUNE