Shri Padmakar Sopan Kandarfale, Latur V. Income-tax Officer, Ward - 1, Latur

ITA 2389/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4713 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-10-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 12-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHABANA PARVEEN
• Keywords: Principle of natural justice
• Section: 147; 68; 69; 148; 144

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.2389/PUN/2017 / ASSESSMENT YEAR : 2012-13 SHRI PADMAKAR SOPAN KANDARFALE, 11, VIKAS NAGAR, BARSHI ROAD, LATUR 413 512. PAN : BWIPK2651J. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 1, LATUR. . / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI. REVENUE BY : MRS. SHABANA PARVEEN. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 2, AURANGABAD DT.28.08.201 7 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FROM OTHER SOURCES. AS PER THE AIR INFORMATION AVAILABLE TO THE AO, IT WAS NOTICED THAT ASSESSEE HAD DEPOSITED CASH OF RS.14,55,500/- IN HIS SAVINGS BANK ACCOUNT DURING THE FINANCIAL YEAR RELEVANT TO A.Y. 2012-13. IT WAS ALSO / DATE OF HEARING : 23.10.2018 / DATE OF PRONOUNCEMENT: 26.10.2018 2 ITA NO.2389/PUN/2017 OBSERVED THAT ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE SAID ASSESSMENT YEAR. THEREFORE, NOTICE U/S 148 OF THE ACT D T.15.12.2015 WAS ISSUED AND SERVED ON ASSESSEE ON 04.01.2016. THEREAFTER , THE CASE WAS TAKEN-UP FOR SCRUTINY AND SUBSEQUENTLY, ASSESSMENT WAS FRAM ED U/S 144 R.W.S. 147 OF THE ACT VIDE ORDER DT.19.12.2016 AND THE TOT AL INCOME WAS DETERMINED AT RS.12,05,840/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.28.08 .2017 (IN APPEAL NO.ABD/CIT(A)-2/EF/397/2016-17) DISMISSED THE APPEA L OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL O F THE ASSESSEE/APPELLANT THEREBY CONFIRMING THE ADDITION MADE BY THE A.O. OF RS. 10,42,500/ - UNDER S. 69A OF THE ACT BEING DEPOSITS INTO BANK ACCOUNTS. AS PER LAW THE ACTION OF THE LD. CIT(A) I S NOT SUSTAINABLE. IT BE QUASHED . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE SOURCES OF THE DEPOSITS INTO BANK ACCOUNT WERE CONV INCINGLY EXPLAINED. IT IS ANOTHER FACT THE SAME WERE NOT ACC EPTED BY A.O. BUT IT IS A FACT SUPPORTED BY LAW THAT ADDITION U/S 69A CANNOT BE MADE SIMPLY ON THE BASIS OF DEPOSITS MADE INTO BANK ACCOUNT ARE NOT MAINTAINED AND THE SOURCES OF SUCH DEPOSITS WER E EXPLAINED. THE ADDITION MADE BY THE A.O. AND SUSTAINED BY LD. CIT(A) BE DELETED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE ACTION TAKEN BY A. O. UNDER S. 147 AND CONFIRMED BY LD. CIT(A) IS NOT IN ACCORDANCE WITH THE PROVISIONS LAW. THE SUBSEQUENT ASSESSMENT THEREFORE, IS ILLEGAL, AND WITHOUT JURISDICTION. THE ASSESSMENT BE QUASHED . 3. SUBSEQUENTLY, ASSESSEE HAS RAISED ADDITIONS GROUNDS WHICH READS AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE AO IN AN EXPARTE ASSESSMENT U/S 144 R.W.S. 147 OF THE ACT WA S NOT JUSTIFIED IN MAKING ADDITION OF RS.10,42,500/- U/S 69A OF THE AC T THOUGH IN THE ORDER ITSELF THE AO HAS OBSERVED THAT OUT OF RS.10, 42,500/- SUBJECTED TO ADDITION THE DEPOSIT OF RS.7,72,500/- THE BALANCE W AS EXPLAINED EITHER TREATED AS CONTRA OR AGRICULTURAL INCOME. 3 ITA NO.2389/PUN/2017 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE ADDITION OF RS.2,70,000/- MADE U/S 69A HAS ALSO BEEN MADE WH EN AO SAYS DEPOSIT WAS MADE ON 23.12.2012 WHICH FALLS IN A.Y. 2013-14. THE ADDITION IS MADE WITHOUT APPLICATION OF MIND. IT I S REQUIRED TO BE DELETED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE ASSESSMENT MADE IS PERVERSE, WITHOUT APPLICATION OF MIND AND BREACHING PRINCIPLES OF NATURAL JUSTICE AS MENTIONE D IN THE FACTS OF THE CASE ABOVE, THE ASSESSMENT BE ANNULLED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD.CIT(A) ALSO DID NOT APPLY HIS MIND TOWARDS SUCH FACTUAL AN D LEGAL POSITION COMING OUT OF ASSESSMENT ORDER. THE ORDER OF LD.CIT (A) BE SET ASIDE. 4. WITH RESPECT TO THE ADDITIONAL GROUNDS RAISED, IT IS ASS ESSEES SUBMISSION THAT THE GROUNDS RAISED ARE PURE QUESTION O F LAW AND AS PER THE JUDGMENT OF HONBLE SUPREME COURT THE SAME CAN BE RAISED ANY TIME AND AT ANY STAGE OF APPEAL PROCEEDINGS. 5. WITH RESPECT TO ADDITIONAL GROUNDS, CONSIDERING THE SU BMISSIONS OF LD.A.R. AND AFTER HEARING THE LD.D.R. THE SAME WERE ADMITT ED FOR CONSIDERATION. 6. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAD DEPOSITED RS.14,55,500/- IN HIS SAVINGS BANK ACCOUNT WITH LATUR URBAN CO-OPERATIVE BANK LTD., LATUR. IT WAS ALSO NOTICED THAT ASSESSEE HAD NOT FILED THE RETURN OF INCOME. THE ASSESS EE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS, TO WHICH THE ASSESSEE INTE R-ALIA SUBMITTED THAT THE SOURCE OF DEPOSITS WERE OUT OF AGRICULTURAL INC OME AND SALE OF AGRICULTURAL LAND AND IN SUPPORT OF WHICH, HE SUBMITTED THE COPIES OF 7/12 EXTRACT. THE SUBMISSION OF THE ASSESSEE WAS NOT FO UND ACCEPTABLE TO THE AO. AO NOTED THAT APART FROM DEPOSITS IN LATUR URBAN CO- OPERATIVE BANK LTD., LATUR, ASSESSEE HAD ALSO DEPOSITED CASH OF 4 ITA NO.2389/PUN/2017 RS.6,73,000/- IN THE SAVINGS BANK ACCOUNT MAINTAINED WITH B ANK OF MAHARASHTRA. IN THE ABSENCE OF PROPER EXPLANATION ABO UT THE SOURCE OF CASH DEPOSITS, AO CONSIDERED THE CASH DEPOSITS OF RS.14,5 5,500/- IN LATUR URBAN CO-OPERATIVE BANK LTD., LATUR AND RS.6,73,00 0/- IN BANK OF MAHARASHTRA AS UNEXPLAINED MONEY U/S 69A OF THE A CT AND MADE ITS ADDITION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER : 7. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AS SESSEE AND I FIND THAT THEY PERTAIN TO THE PROVISIONS OF SECTION 68 A ND SECTION 69 OF THE ACT . T HE ASSESSEE HAS NOT CHALLENGED THE FINDING OF THE A SSESSING OFFICER THAT THE S U M O F RS.10 , 42,500/-, DEPOS I TED IN THE BANK ACCOUNTS BY THE ASSESSEE WAS UNEXPLAINED. HE HAS MERELY RELIED UPON A TECHNICAL GROUND THAT THE SAID ADDITION COULD NOT BE MAD E U/S. 69A BECAUSE NO BOOKS OF ACCOUNTS W ERE MAINTAINED BY THE ASSESSEE. T HE PLEA TAKEN BY THE ASSESSEE I S MISCONCEIVED AND MISTAKEN . SECTION 69 A OF THE ACT STATES THAT WHERE IN ANY FINANCIAL YEAR TH E ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY , BU L LION, J EWELLERY OR OTHER VALUABLE ARTICLE AND SUCH MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE IS NO T RECORDED IN THE BOOKS OF ACCOUNTS , IF ANY, MAINT A INED BY HIM FOR ANY SOURCE O F INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOU RC E O F ACQUISITION OF THE MONEY , BULLION, JEWELLERY OR OTHER VALUABLE ART I CLE O R T HE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY THEN T HE MONEY OR THE VALUE OF T HE BULLION, JEWEL LE RY OR OTHER ARTICLE WILL BE DEEMED TO BE TH E I NCOM E O F T HE ASSESSEE FOR SUCH FINANCIAL YEAR. A PLA I N READING OF THIS SECTION S HOWS T HA T IT I S NOT IMPERATIVE ON TH E PART OF THE ASSESSEE TO MA I NTA I N THE BOOKS OF ACCOU N TS . THE WORDS USED IN THE SECTION IS 'NOT RECORDED IN THE BOOKS OF ACCOUNTS, IF AN Y WHICH IMPLIES THAT THERE MAY OR MAY NOT BE A BOOK O F ACCOUNT I N E X ISTENCE FOR THE PURPOSE OF THIS SECTION. HENCE, THE CONTENTION RA ISED BY THE ASSESSEE THA T MAINTENANCE OF BOOKS OF ACCOUNTS IS A PREREQUISITE FOR IN V OK I NG THE SECTION DOE S NOT HAVE ANY REASONABLE BASIS. MAINTENANCE OF BOOKS OF ACCOUNTS I S A PREREQUISITE ONLY FOR THE PURPOSE OF SECTION 68 AND NOT FOR THE PURPOSES OF SECTION 69, SECTION 69A AND SECTION 69B . THIS IS FOR THE REASON THAT IN ALL THESE THREE SECTIONS, TH E WORDS 'IF ANY' FOLLOWS THE PHRASE 'BOOKS OF ACCOUNT'. READ TOGETHER, THE SENTENCE IMPLIES THAT THE OWNERSHIP OF MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING MAY NOT BE RECORDED IN SUCH BOOKS OF ACCOUNTS IF THEY EXIST . EXISTENCE OF BOOKS OF ACCOUNTS IS NOT A PREREQUISIT E FOR THE PURPOSE OF INVOKING THE PROVISIONS OF SECTION 69A . IN THE INSTANT CASE, THERE CANNOT BE ANY DOUBT ON THE FACT THAT THE ASSESSEE WAS THE OWNER OF THE MONEY DEPOSITED IN HIS BANK ACCOUNT AND INDEED THE ASSESS EE HAS ALSO NOT CONTENDED THE OWNERSHIP OF THE MONEY DEPOSITED IN T HE BANK ACCOUNTS . IN FACT , IN ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD TRIED T O EXPLAIN THE SOURCES OF THE MONEY DEPOSITED IN HIS BANK ACCO UNT. THE SECTION IS VERY CLEAR AND IT STATES THAT WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY IN THE OPINION OF THE ASSESSING OFFICER THEN THE MONEY SHALL BE DEEMED TO BE THE INCOME OF THE A SSESSEE FOR THE 5 ITA NO.2389/PUN/2017 RESPECTIVE FINANCIAL YEAR. HENCE, THERE CANNOT BE A NY DOUBT ON THE FACT THAT ONCE THE ASSESSEE IS ESTABLISHED TO BE THE OWN ER OF CERTAIN AMOUNT OF MONEY, THEN IT'S SOURCES HAVE TO BE EXPLAINED BY THE ASSESSEE TO THE SATISFACTION OF THE ASSESSING OFFICER AND IF THE EX PLANATION IS NOT FOUND TO BE SATISFACTORY , THEN THE SAME CAN BE TREATED AS THE INCOME OF THE ASSESSEE . THEREFORE, I HOLD THAT THE PROVISIONS OF SECTION 69 A HAVE BEEN RIGHTLY INVOKED IN THIS CASE AND THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED . GROUND NO.1 IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 8. BEFORE ME, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE IS AN AGRIC ULTURIST AND IN ADDITION, HE IS WORKING AS PEON IN LOCAL SCHOOL. HE SUBMITTED THAT ASSESSEES FAMILY IS HAVING AGRICULTURAL LAND OF ABOUT 5 ACR ES AND ON IT ASSESSEES FAMILY GROWS SOYABEAN, GRAMDAL AND MOONG AN D IN SUPPORT OF WHICH HE PLACED ON RECORD THE COPY OF 7/12 EXTRACTS. LD.A.R. FURTHER SUBMITTED THAT ASSESSEE TO PROVE THE SOURCE OF DEPOSIT S HAD SUBMITTED 7/12 EXTRACTS BUT THE SAME WERE NOT CONSIDERED BY TH E AO WHILE FRAMING THE ASSESSMENT. HE SUBMITTED THAT THOUGH ASSESSEE HA D MADE SUBMISSIONS BEFORE LD.CIT(A) THAT THE SOURCE OF DEPOSITS OF CASH TO BE OUT OF AGRICULTURAL INCOME BUT LD.CIT(A) HAS NOT GIVEN ANY FINDING ON THE SAME. ON THE ISSUE OF ADDITION MADE U/S 69A OF THE ACT, LD.A.R. SUBMITTED THAT SINCE ASSESSEE WAS NOT MAINTAINING ANY BO OKS OF ACCOUNTS, THE DEEMING PROVISIONS OF SEC.69A ARE NOT APPLICA BLE AND THEREFORE NO ADDITION COULD HAVE BEEN MADE U/S 69A OF TH E ACT AND FOR THIS PROPOSITION, HE RELIED ON THE DECISION IN THE CASE OF KE WAL G. BAJAJ VS. ACIT IN ITA NO.2182/BOM/1993 REPORTED IN (1999) 71 IT D 375. HE FURTHER RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI REPORTED IN (1982) 11 TAXMAN . 59 SUBMITTED THAT EVEN ADDITION U/S 69 OF THE ACT WAS NO T POSSIBLE BECAUSE ASSESSEE WAS NOT MAINTAINING CASH BOOK. HE FURTHER POINT ING TO THE 6 ITA NO.2389/PUN/2017 ORDER OF AO, SUBMITTED THAT THOUGH AO HAS ADMITTED THAT ASSESSEE HAD MADE CASH DEPOSITS OF RS.2,70,000/- ON 23.12.2012 AND WHICH DOES NOT FALL IN THE RELEVANT ASSESSMENT YEAR BUT STILL THE AMOUNT HAS BEEN CONSIDERED AS UNEXPLAINED MONEY. HE THEREFORE SUBMITTED THAT ASSESSEE BE GIVEN ONE MORE OPPORTUNITY TO PRESENT HIS CASE BEFOR E LD.CIT(A) AND EXPLAIN HIS STAND AND THEREFORE THE MATTER BE REMANDED BACK TO LD.CIT(A). HE FURTHER SUBMITTED THAT ASSESSEE WOULD CO-O PERATE BY FILING ALL THE REQUIRED DETAILS BEFORE THE LOWER AUTHORITIES. LD.D.R . ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT(A) AND OBJECTED TO THE P RAYER OF THE ASSESSEE TO REMAND BACK THE MATTER TO LD.CIT(A). SHE THEREFORE SUBMITTED THAT THE ORDER OF LD.CIT(A) BE CONFIRMED. 9. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITION MADE U/S 69A OF THE ACT. BEFORE ME, IT IS ASSESSEES SUBMISSION THAT BEFORE AO AND LD.CIT(A), ASSESSEE SUBMITTED THE SOURCE OF DEPOSITS T O BE OUT OF AGRICULTURAL INCOME AND FOR WHICH THE NECESSARY EVIDENCE W AS PLACED BEFORE THEM BUT THE SAME HAS NOT BEEN CONSIDERED BY L D.CIT(A). I FIND FORCE IN THE AFORESAID CONTENTION OF LD.A.R. IN VIEW OF THE FACT THAT THERE IS NO FINDING ON THE SAME. I FURTHER FIND THAT AO THOUGH IN THE ASSESSMENT ORDER WITH RESPECT TO CASH DEPOSITS OF RS.2,7 0,000/- MADE IN LATUR URBAN CO-OPERATIVE BANK, LATUR HAS STATED THAT THE DEPOSITS WERE MADE ON 23.12.2012 (WHICH IS THE PERIOD NOT FALLING UNDER RE LEVANT ASSESSMENT YEAR) BUT THE SAME HAS STILL BEEN ADDED AS U NEXPLAINED MONEY. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, I A M OF THE VIEW THAT THE ISSUE NEEDS TO BE RE-EXAMINED AT THE END OF LD.CIT(A). I THEREFORE, WITHOUT DECIDING THE ISSUE ON MERITS, RESTORE TH E ISSUE BACK TO 7 ITA NO.2389/PUN/2017 THE FILE OF LD.CIT(A) FOR HIM TO DECIDE THE ISSUE ON MERITS AFT ER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND IN ACCORD ANCE WITH LAW. NEEDLESS TO STATE THAT LD.CIT(A) SHALL GRANT ADEQUATE OPP ORTUNITY OF HEARING TO BOTH THE PARTIES. ASSESSEE IS ALSO DIRECTED T O CO-OPERATE WITH LD.CIT(A) BY PROMPTLY FURNISHING ALL THE REQUIRED DOCUMENTS AS CALLED FOR. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26 TH DAY OF OCTOBER, 2018. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 26 TH OCTOBER, 2018. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. THE CIT(A)-2, AURANGABAD. THE PR.CIT-2, AURANGABAD. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.