Ulhas Shantaram Ghosalkar, Ratnagiri V. Income-tax Officer,

ITA 231/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1605 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT DUA
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Additional evidence; Corroborative evidences; Tax effect; Revised return
• Section: 143(3); 68; 54

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 231 /PN/201 5 / ASSESSM ENT YEAR : 20 0 6 - 0 7 ULHAS SHANTARAM GHOSALKAR, H NO.1777, TIMES BHAVAN, MARUTI LANE, RATNAGIRI - 415612 . / APPELLANT PAN: A AVPG6572A VS. THE INCOME TAX OFFICER, WARD 1 , RATNAGIRI . / RESPONDENT . / ITA NO. 542 /PN/201 5 / ASSESSMENT YEAR : 20 0 6 - 0 7 THE INCOME TAX OFFICER, WARD 1, RATNAGIRI . / APPELLANT VS. ULHAS SHANTARAM GHOSALKAR, H NO.1777, TIMES BHAVAN, MARUTI LANE, RATNAGIRI - 415612 . / RESPONDEN T PAN: AAVPG6572A ASSESSEE BY : SHRI M.K. KULKARNI RE VENUE BY : SHRI AMIT DU A / DATE OF HEARING : 2 8 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 30 . 0 6 .201 6 ITA NO. 231 /PN/20 1 5 ITA NO. 542 /PN/201 5 2 / ORDER PER SUSHMA CHOWLA, J M : THE CROSS APPEAL S FILED BY THE ASSESSEE AND THE REVENUE ARE AGAINST ORDER OF CIT (A) - 1 & 2 , KOLHAPUR , DATED 2 5 . 0 4 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 6 - 0 7 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE CROSS APPEALS F ILED BY THE ASSESSEE AND THE REVENUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO. 231 /PN/201 5 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR [CIT(A) IN BRIEF ] ERRED IN CONFIRMING THE ADDITION OF RS.2, 00 ,000/ - BEING THE AMOUNT OF SALE PROCEEDS OF MACHINERY AS UNEXPLAINED MONEY U/S 69A MADE BY THE INCOME TAX OFFIC ER, WARD - 1, RATNAGIRI, (HEREINAFTER REFERRED TO AS THE 'IT O '). THE APPELLANT SUBMITS AS UNDER, WITHOUT PREJUDICE TO EACH OTHER: A . THE AMOUNT BEING A CREDIT TO THE CAPITAL ACCOUNT NO ADDITION CAN BE MADE OF SUCH A CREDIT TRANSACTION UNDER SECTION 69A IT BE ING NOT IN THE NATURE OF AN UNEXPLAINED INVESTMENT. B . THE SALE PROCEEDS BEING EQUAL TO THE COST THE IT O OUGHT NOT TO HAVE B . THE SALE PROCEEDS BEING EQUAL TO THE COST THE IT O OUGHT NOT TO HAVE TAXED THE AMOUNT ALTERNATIVELY AS SHORT TERM CAPITAL GAINS. C . THE SOURCE OF THE CREDIT HAVING BEEN FULLY EXPLAINED BY THE APPELLANT TH E AMOUNT IS NOT TAXABLE EVEN UNDER SECTION 68 AS UNEXPLAINED CREDIT. THE APPELLANT PRAYS THAT THE IT O BE DIRECTED TO DELETE THE ADDITION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF THE IT O TO THE EXTENT OF R S .7,32 , 427/ - REPRESENTING THE CASH BALANCE AS ON 31.03.2006 AS PER THE REVISED BALANCE SHEET U/S 69A WHICH IS MAINLY BUILT UP OUT OF AGRICULTURAL INCOME OF THE APPELLANT. OF THE APPELLANT. ITA NO. 231 /PN/20 1 5 ITA NO. 542 /PN/201 5 3 THE APPELLANT SUBMITS AS UNDER, WITHOUT PREJUDICE TO EACH OT HER: A . THE INCREASE IN CASH BALANCE HAVING BEEN DULY EXPLAINED BY THE APPELLANT, THE CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ADDITION OF THIS ASSET. B . THE CASH BALANCE HAVING BEEN DULY REFLECTED IN THE REVISED BALANCE SHEET PREPARED AS PER THE REVISED BOOKS OF ACCOUNTS (ON THE BASIS OF WHICH THE APPELLANT HAS FILED HIS REVISED RETURN DECLARING ADDITIONAL INCOME) THE SOURCE OF SUCH BALANCE THUS STANDS FULLY EXPLAINED BY THE LIABILITY SIDE OF THE BALANCE SHEET, NOT CALLING FOR FURTHER ADDITION BY THE IT O TREAT ING IT AS UNEXPLAINED CASH BALANCE U/S 69A. THE APPELLANT PRAYS THAT THE IT O BE DIRECTED TO DELETE THE ADDITION. 4. THE REVENUE IN ITA NO. 542 /PN/2015 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A), KOLHAPUR HAS ERRED IN DELETING THE ADDITION OF UNACCOUNTED INVESTMENT OF RS.40, 000 / - AND RS.2, 000 / - IN JOGALEKAR INVESTMENTS AND PPF, RESPECTIVELY, IN SPITE OF THE FACT THE ASSESSEE COULD NOT SUBMIT ANY SUPPORTING EVIDENCE REGARDING THE SOURCE OF SUCH INVE STMENTS. 2 - A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A), KOLHAPUR HAS ERRED IN DELETING THE ADDITION OF RS.6,49,526/ - IN RESPECT OF UNACCOUNTED CASH IN HAND BY ADMITTING ADDITIONAL EVIDENCE WITHOUT GIVING THE A O PROPER OPPORTUNITY TO SUBMIT HIS COMMENTS UNDER RULE 46A. PROPER OPPORTUNITY TO SUBMIT HIS COMMENTS UNDER RULE 46A. 2 - B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A), KOLHAPU R HAS ERRED IN DELETING THE ADDITION OF RS.6,49,526/ - IN RESPECT OF UNACCOUNTED CASH IN HAND AS THE ASSESSEE COULD NOT SUBMIT ANY MATCHING WITHDRAWALS FROM HIS BANK ACCOUNTS TO THE TUNE OF RS.6,49,526/ - AS THE ENTRIES RELIED UPON BY THE CIT(A), KOLHAPUR DO NOT MATCH WITH THE ACTUAL ENTRIES IN THE BANK ACCOUNT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A), KOLHAPUR HAS ERRED IN DELETING THE ADDI TION OF RS.3,85,918/ - IN RESPECT OF UNACCOUNTED BANK BALANCES AS THE BALANCES OF UNDISCLOSED BANK ACCOUNTS ARE CLEARLY ASSETS NOT DISCLOSED IN BALANCE SHEET. CLEARLY ASSETS NOT DISCLOSED IN BALANCE SHEET. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A), KOLHAPUR HAS ERRED IN DELETING THE AD DITION OF UNACCOUNTED CASH DEPOSITS OF R S.3,95, 182 / - IN JANATA SAH. BANK LTD. B Y ADMITTING ADDITIONAL EVIDENCE WITHOUT GIVING THE A O PROPER OPPORTUNITY TO SUBMIT HIS COMMENTS UNDER RULE 46A. 5. THE ASSESSEE HAS NOT PRESSED THE GROUND OF APPEAL RAISED AGAI NST THE ADDITION OF RS.2 LAKHS AND HENCE, THE SAME IS DISMISSED. ITA NO. 231 /PN/20 1 5 ITA NO. 542 /PN/201 5 4 6. THE SECOND ISSUE VIDE GROUND OF APPEAL NO.2 IS AGAINST THE ADDITION OF RS. 7,32,427/ - . THE ASSESSEE IN THIS REGARD HAD TRIED TO EXPLAIN CASH BALANCE AS ON 31.03.2006 BY WAY OF PLACING REV ISED BALANCE SHEET WHICH WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE CIT(A). THE ASSESSEE ALSO DECLARED INCOME FROM AGRICULTURE IN ADDITION OF RS. 7,32,427/ - . THE ASSESSEE WAS ASKED TO PRODUCE 7/12 EXTRACT OF AGRICULTURAL LAND AND ALSO THE COPIES OF SALE BILLS OF AGRICULTURAL PRODUCE AND THE COPIES OF BILLS OF EXPENDITURE INCURRED. HOWEVER, RELIANCE WAS PLACED ON THE EARLIER AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AND COMPLETE DETAILS IN THIS REGARD WERE NOT FILED. NO THIRD PARTY EVIDENCE CONF IRMING THE SALE OF AGRICULTURAL PRODUCE WAS PRODUCED. THE ASSESSING OFFICER IN THIS REGARD HELD THAT 20% OF THE AGRICULTURAL INCOME SHOWN I.E. RS.1,46,840/ - IS TO BE ADDED AS INCOME FROM UNDISCLOSED SOURCES. 7. THE CIT(A) ACCEPTED THE AGRICULTURAL INCO ME DECLARED BY THE ASSESSEE AT RS. 7,32,427/ - . WHILE EXPLAINING THE SOURCE OF CASH BALANCE AS ON 31.03.2006, AS PER THE REVISED BALANCE SHEET AT RS.13,81,953/ - , THE ASSESSEE CLAIMED THAT THE SAME WAS AS A RESULT OF AGRICULTURAL INCOME AND WITHDRAWAL FROM B ANK ACCOUNTS. THE CIT(A) VIDE PARAS 11 TO 14 CONSIDERED THE CLAIM OF ASSESSEE AND ACCEPTED THE SAME TO THE EXTENT OF WITHDRAWAL FROM VARIOUS BANK ACCOUNTS. HOWEVER, REGARDING CASH OF RS.7,32,427/ - BEING OUT OF AGRICULTURAL INCOME, THE CIT(A) HELD THAT TH ERE WAS NO EVIDENCE THAT THE AGRICULTURAL INCOME WAS AVAILABLE WITH THE ASSESSEE, HENCE, ADDITION TO THE EXTENT OF RS. 7,32,427/ - WAS SUSTAINED. 8. THE ASSESSEE IS AGGRIEVED BY THE AFORESAID FINDING OF CIT(A). ITA NO. 231 /PN/20 1 5 ITA NO. 542 /PN/201 5 5 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT ON THE ONE HAND, VIDE PARA 25 OF THE APPELLATE ORDER, THE CIT(A) ACCEPTS THE AGRICULTURAL INCOME, BUT ON THE OTHER HAND, THE CIT(A) VIDE PARA 14 DISREGARDS THE CONTENTION OF ASSESSEE THAT THE SAID CASH OF RS.7,32,427/ - WAS AVA ILABLE OUT OF AGRICULTURAL INCOME. 10. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE AGRICULTURAL INCOME HAS BEEN ACCEPTED IN THE HANDS OF ASSESSEE BY THE CIT(A), THEN IN THE ABSENCE OF ANY EV IDENCE FOUND TO THE CONTRA RY, THE SAID AMOUNT CANNOT BE SAID TO BE NOT AVAILABLE WITH THE ASSESSEE FOR INVESTMENT. ACCORDINGLY, I FIND NO MERIT IN THE ORDER OF CIT(A) IN THIS REGARD AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.7,32,427/ - . THE GROUNDS OF APPE AL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 10. THE REVENUE HAS ALSO FILED AN APPEAL AGAINST THE ORDER OF CIT(A) IN ALLOWING VARIOUS RELIEFS. THE TOTAL TAX EFFECT OF THE APPEAL FILED BY THE REVENUE IS LESS THAN RS.10 LAKHS. 11. THE LEARNED DEPAR TMENTAL REPRESENTATIVE FOR THE REVENUE IN THIS REGARD ACCEPTED THAT THE TAX EFFECT IN THE PRESENT APPEAL WAS BELOW RS.10 LAKHS . 12. IN VIEW OF THE CBDTS C IRCULAR NO.21/2015 DATED 10.12.2015 , THE LIMIT FOR FILING THE APPEALS BEFORE THE TRIBUNAL HAVE BEE N REVISED AND ONLY APPEALS WITH TAX EFFECT OF RS.10 LAKHS ARE TO BE FILED BEFORE THE TRIBUNAL. THIS ALSO APPLIES TO THE PENDING APPEALS BEFORE THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY CONCEDED THAT THE TAX EFFECT IN TH E PRESENT APPEAL IS LESS THAN RS.10 LAKHS AND HENCE THE SAME IS NOT ITA NO. 231 /PN/20 1 5 ITA NO. 542 /PN/201 5 6 MAINTAINABLE. IN VIEW THEREOF, THE APPEAL FILED BY THE REVENUE IS DISMISSED AS NOT BEING MAINTAINABLE. 1 3 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 & 2, KOLHAPUR ; 4. / THE CIT - I / II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECR ETARY , / ITAT, PUNE