Sh. Vijay Singh, Mathura V. I.T.O.-3(4), Mathura

ITA 244/AGR/2013

• Counselvise Citation: 24420314 RSA 2013
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 09-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: RAJENDRA SHARMA
• Keywords: Business income; Salary income; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 244/AGRA/2013 ASSTT. YEAR : 2008-09 SHRI VIJAY SINGH, VS. INCOME-TAX OFFICER, 1967-A, DAMPIER NAGAR, 3(4), MATHURA. MATHURA. (PAN: AQXPS 6802 P) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 03.09.2013 DATE OF PRONOUNCEMENT OF ORDER : 04.09.2013 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DATED 11.02.2013 FOR THE ASSESSMENT YEAR 2008- 09 ON THE FOLLOWING GROUNDS : 1. BECAUSE, THE AUTHORITIES BELOW HAD FALLEN IN ER ROR IN HOLDING THAT THE DEPOSITS IN AXIS BANK SAVINGS BANK ACCOUNT BELONGED' TO THE APPELLANT AND NOT TO M/S KISHAN SI NGH HUF AS EXPLAINED BEFORE THEM. 2. BECAUSE, THERE IS NO REBUTTAL TO THE FACT AS BRO UGHT ON RECORD THAT AS THE AGRICULTURAL OPERATIONS OF M/S KISHAN S INGH HUF WERE HANDLED BY THE APPELLANT THE SALE PROCEEDS OF THE A GRICULTURAL PRODUCE WAS CREDITED IN THE SAID BANK ACCOUNT HELD FOR AND ON BEHALF OF THE HUF. ITA NO. 244/AGRA/2013 2 3. BECAUSE, THE PROOF OF INCOME OF KISHAN SINGH HUF WERE DULY FILED BEFORE THE AUTHORITIES BELOW BY WAY OF I .T. ASSESSMENTS OF THE HUF. 4. BECAUSE, THE AUTHORITIES BELOW ERRED IN IGNORING THE PROOF OF INCOME OF HUF SUBMITTED BY THE ASSESSEE BY WAY OF C ERTIFICATE ISSUED BY TEHSILDAR ON 03.12.1998 AND 08.11.2010. 5. BECAUSE, THE ' AD' HAD BEEN ILLEGAL AND ARBITRAR Y IN NOT ACCEPTING THE CONTENTS OF THE AFFIDAVIT OF THE KART A SHRI BHAGAT SINGH VERMA WITHOUT PUTTING HIM TO PROCESS OF EXAMINATION AND WITHOUT PROVING THE CONTENTS TO BE FALSE. 6. BECAUSE, THE 'AD' ERRED IN TREATING THE CREDITS IN THE S/B A/C AS BUSINESS TURNOVER OF THE APPELLANT AND THEREBY A PPLYING THE PROVISIONS OF SECTION 44AF OF THE ACT. 7. BECAUSE, THE 'AD' ERRED IN HOLDING THAT .THE MAR GIN MONEY OF THE CAR (RS. 1,77,000/-) WAS UNDISCLOSED INCOME OF THE APPELLANT IGNORING THE CONFIRMATION BY M/S KISHAN SINGH HUF C ONFIRMING THE PAYMENT. 8. BECAUSE, THE CAR BELONGED TO THE HUF AND THE MAR GIN MONEY FOR PURCHASE THEREOF WAS ALSO PAID FROM THE FUNDS B ELONGING TO THE HUF AND HENCE NO ADDITION TOWARDS MARGIN MONEY OF T HE SAME WAS CALLED FOR. 9. BECAUSE, IN ANY VIEW THE MATTER THE ORDER PASSED BY THE ' AD' AND CIT(A) TO THE EXTENT MAKING AND CONFIRMING ADDI TION IS BAD ON FACTS AND IN LAW. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL ON 07.07.2008 DECL ARING INCOME OF RS.1,15,800/- UNDER THE HEAD SALARY, BEING DIRECTOR OF THE COMP ANY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT IN THE BA NK ACCOUNT OF THE ASSESSEE IN ITA NO. 244/AGRA/2013 3 AXIS BANK, THERE ARE VARIOUS ENTRIES OF CASH DEPOSI TS AND WITHDRAWALS, TOTAL OF WHICH HAS BEEN COMPUTED BY HIM AT RS.24,90,250/-. W ITH REGARD TO THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT, THE ASSESSEE HAS EXPLAINED THAT THIS AMOUNT PERTAINS TO M/S. KISHAN SINGH HUF FOR THE PERIOD 19 83-84 TO 1998-99 AND IT IS RELATED TO ITS AGRICULTURAL INCOME. AFTER EXAMINATI ON OF THE ASSESSEE ON OATH U/S. 131 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO SCRUTINIZING ALL THE DETAILS OF THE DEPOSITS OF CASH AMOUNT AND WITHDRAW ALS MADE IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH AXIS BANK, THE AO H ELD THAT THE DEPOSITS IN THE BANK ACCOUNT ARE NOT RELATED TO THE AGRICULTURAL IN COME OF HUF BECAUSE THE ACCOUNT MAINTAINED IS IN THE NAME OF ASSESSEE IN HI S INDIVIDUAL CAPACITY AND AT THE TIME OF OPENING OF THIS BANK ACCOUNT, NO DOCUMENTAR Y EVIDENCE HAS BEEN FURNISHED BEFORE THE BANK THAT THIS ACCOUNT WAS BEING OPENED BY THE HUF. AFTER CONSIDERING THE FACT THAT THERE ARE FREQUENT DEPOSITS AND WITHD RAWALS FROM THIS BANK ACCOUNT, THE AO HELD THAT NATURE OF DEPOSITS AND WITHDRAWALS FROM THIS ACCOUNT DO NOT SHOW THAT THESE DEPOSITS OR WITHDRAWALS ARE RELATED TO A GRICULTURAL INCOME. THE AO HAS ALSO DISCUSSED IN THE ASSESSMENT ORDER THAT DESPITE THE CLAIM OF ASSESSEE THAT THIS ACCOUNT BELONGS TO HUF IN WHICH HE IS NOT EVEN KART A, NO OTHER EVIDENCE HAS BEEN PRODUCED BY HIM TO ESTABLISH THAT THIS ACCOUNT WAS RELATED TO HUF. AN AFFIDAVIT WAS FILED FROM KARTA OF HUF SHRI BHAGAT SINGH WHO I S FATHER OF ASSESSEE CONFIRMING THAT THE BANK ACCOUNT UNDER DISPUTE RELA TED TO HUF, BUT ON POINTING OUT ITA NO. 244/AGRA/2013 4 THAT THIS AFFIDAVIT HAS BEEN MADE ON 15.10.2010 WHI LE THE ACCOUNT WAS OPENED IN APRIL, 2006, THE ASSESSEE HAS ONLY REPLIED THAT SIN CE OWNERSHIP OF THE BANK ACCOUNT IS CHALLENGED NOW, THEREFORE, THE AFFIDAVIT IS FILE D TO THAT EFFECT. THE AO, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE BANK ACCOUNT BELONGS TO HUF BECAUSE THE BANK ACCOUNT WAS OPENED IN THE NAME OF ASSESSEE IN HIS INDIVIDUAL CAPACITY, THEREFORE, THE DEPOSITS IN THE BANK ACCOU NT BELONG TO HIM IN INDIVIDUAL CAPACITY. THE AO COMPUTED TOTAL DEPOSITS IN THE BAN K ACCOUNT AT RS.24,90,250/- AND FURTHER HELD THAT THESE DEPOSITS HAVE BEEN MADE ON ACCOUNT OF HIS BUSINESS AND THEN CONSIDERING THIS AMOUNT AS TURNOVER OF BUSINES S OF THE ASSESSEE, THE AO COMPUTED BUSINESS PROFIT OF THE ASSESSEE AS PER PRO VISIONS OF SECTION 44AF BY APPLYING PROFIT RATE OF 5% AND COMPUTED PROFIT OF A SSESSEE AT RS.1,17,012/- AND THE SAME WAS ASSESSED AS INCOME FROM UNDISCLOSED SOURCE S. THE AO, AFTER CONSIDERING THE UNDISCLOSED BUSINESS PROFIT, ALSO FOUND THAT TH E ASSESSEE HAS PURCHASED A BOLERO JEEP FOR RS.5,77,000/- IN HIS INDIVIDUAL NAME AND O N PURCHASE OF THIS JEEP HE HAS SPENT RS.1,27,000/- AS MARGIN MONEY AND REGISTRATIO N AND INSURANCE EXPENSES OF RS.50,000/-. THE ASSESSEE EXPLAINED THAT THIS AMOUN T WAS TAKEN FROM M/S. KISHAN SINGH HUF OUT OF AGRICULTURAL INCOME. HOWEVER, THE PLEA OF THE ASSESSEE WAS NOT ACCEPTED AND THE AO ADDED RS.1,77,000/- AS UNDISCLO SED INCOME OF THE ASSESSEE. TOTAL INCOME WAS, THUS, COMPUTED AT RS.4,09,802/- A FTER ADDING THE ABOVE TWO ADDITIONS BY ACCEPTING THE SALARY INCOME AS PER RET URN AT RS.1,15,800/-. ITA NO. 244/AGRA/2013 5 3. THE ASSESSEE CHALLENGED BOTH THE ADDITIONS BEFOR E THE LD. CIT(A) AND SIMILAR SUBMISSIONS WERE REITERATED THAT THE BANK ACCOUNT M AINTAINED WITH AXIS BANK PERTAINED TO HUF AND ALL THE DEPOSITS WERE MADE OUT OF AGRICULTURAL INCOME OF HUF. IT WAS ALSO SUBMITTED THAT M/S. KISHAN SINGH H UF HAS APPROXIMATELY 75 ACRES OF LAND AND AGRICULTURAL INCOME HAS BEEN ACCE PTED IN PAST AND THE MATTER TRAVELED UPTO ITAT, AGRA IN THE CASE OF ITO VS. VIJ AY SINGH REPORTED IN 88 TTJ 632, IN WHICH IT WAS HELD BY THE FIRST APPELLATE AU THORITY THAT THE LAND WAS PURCHASED OUT OF FUNDS OF HUF IN THE NAME OF VARIOU S COPARCENERS, THEREFORE, INCOME SHOULD ALSO BE ASSESSED IN THE HANDS OF HUF. IT WAS ALSO POINTED OUT IN ASSESSMENT ORDER THAT THE AGRICULTURAL INCOME OF HU F HAS BEEN ACCEPTED SUPPORTED BY CERTIFICATE OF TEHSILDAR. THE LD. CIT(A), HOWEVE R, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT THE DEPOSITS MADE IN THE BANK ACCOUNT BELONG TO HIM ONLY AND IT WAS CORRECTLY TAKEN AS TURNOVER OF THE ASSESSEE FOR THE PURPOSE OF COMPUTING BUSINESS INCOME. THE ADDITION OF RS.1,17, 012/- WAS ACCORDINGLY MAINTAINED. HOWEVER, AS REGARDS THE INVESTMENT MADE IN BOLERO CAR, THE LD. CIT(A) IN PRINCIPLE CONFIRMED THE ADDITION BECAUSE THE CAR WAS PURCHASED IN THE INDIVIDUAL NAME OF ASSESSEE AND LOAN WAS ALSO TAKEN FROM FINANCER IN INDIVIDUAL CAPACITY. HOWEVER, THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED PROFIT OF RS.1,17,012/- WAS GIVEN SET OFF AND PART ADDITION W AS MAINTAINED IN A SUM OF ITA NO. 244/AGRA/2013 6 RS.59,988/- AS AGAINST RS.1,77,000/-. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY, PARTLY ALLOWED. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, THE LD. DR RE LIED UPON THE ORDERS OF THE AUTHORITIES BELOW . 5 . I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE OPENED THE BANK ACCOUNT IN HIS INDIVIDUAL CAPACITY AND MADE CERTAIN DEPOSITS AND WITHDRAWALS FROM THE BANK ACCOUNT MAINTAINED WITH AXIS BANK. NO EVIDENCE WAS PRODUCED THAT THE AFORESAID BANK ACCOUNT BELONGS TO HUF. THE REFORE, THE AUTHORITIES BELOW WERE JUSTIFIED IN HOLDING IN PRINCIPLE THAT T HE BANK ACCOUNT BELONGS TO ASSESSEE ONLY. THE AO AND THE LD. CIT(A), HOWEVER, ARE NOT JUSTIFIED IN TAKING THE TOTAL DEPOSITS AS TURNOVER OF THE ASSESSEE. THE AUTHORITIES BELOW SHOULD HAVE CONSIDERED THE CASE OF THE ASSESSEE AS UNEXPLA INED DEPOSITS MADE IN THE BANK ACCOUNT, BUT IT WAS NOT SO DONE BY THE AUTHORI TIES BELOW AND THE TRIBUNAL HAVING NO POWER OF ENHANCEMENT COULD NOT ENHANCE TH E ADDITION IN THIS REGARD. THE AUTHORITIES BELOW HAVE TAKEN TOTAL DEPO SITS IN THE BANK ACCOUNT AS TURNOVER OF THE ASSESSEE WITHOUT HAVING ANY EVIDENC E WITH THEM. THE AO HAS ITA NO. 244/AGRA/2013 7 ACCEPTED THE RETURNED INCOME OF ASSESSEE AT RS.1,15 ,800/- WHICH THE ASSESSEE DISCLOSED ON ACCOUNT OF INCOME FROM SALARY. NO EVID ENCE HAS BEEN BROUGHT ON RECORD AS TO HOW AND WHAT TYPE OF RETAIL BUSINESS W AS CARRIED OUT BY THE ASSESSEE IN ORDER TO APPLY SECTION 44AF OF THE IT A CT. SECTION 44AF IS SPECIAL PROVISION FOR COMPUTING BUSINESS PROFIT OF RETAIL B USINESS. THE AUTHORITIES BELOW MERELY PRESUMED THAT THE ASSESSEE HAS DONE SO ME RETAIL BUSINESS AND HAVE APPLIED THE PROVISIONS OF SECTION 44AF FOR THE PURPOSE OF COMPUTING THE UNDISCLOSED BUSINESS PROFIT BY APPLYING PROFIT RATE OF 5%. THE AUTHORITIES BELOW HAVE, HOWEVER, NOT BROUGHT ANY EVIDENCE OR MA TERIAL ON RECORD TO PROVE THAT THE ASSESSEE CONDUCTED ANY RETAIL BUSINESS TO EARN PROFIT. THE AUTHORITIES BELOW SHOULD HAVE CONSIDERED THE CASE OF ASSESSEE I N THE LIGHT OF PROVISIONS OF SECTION 68/69 OF THE IT ACT UNLESS THE ASSESSEE CLA IMED DEPOSITS AND WITHDRAWALS TO BE THE TURNOVER OF THE ASSESSEE. THE REFORE, WHOLE BASIS OF THE AUTHORITIES BELOW IN MAKING ADDITION OF RS.1,17,012 /- IS WITHOUT ANY BASIS AND THE ADDITION SHALL HAVE TO BE DELETED. I ACCORDINGL Y, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.1,1 7,012/-. 6. AS REGARDS THE ADDITION OF RS.1,77,000/- BEING T HE MARGIN MONEY INVESTED IN THE CAR IS CONCERNED, I AM OF THE VIEW, THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. THE ASSESSE E HAS FILED CONFIRMATION ITA NO. 244/AGRA/2013 8 FROM M/S. KISHAN SINGH HUF (PB-15) TO SHOW THAT THE HUF HAS ADVANCED THIS MONEY TO THE ASSESSEE FOR PURCHASE OF CAR IN H IS INDIVIDUAL NAME. THE CONFIRMATION OF THE HUF IS SUPPORTED BY THE ASSESSM ENT ORDER OF ASSESSMENT YEAR 1997-98 IN THE NAME OF HUF (PB-16) TO SHOW THA T THE AGRICULTURAL INCOME IN A SUM OF RS.9,46,556/- HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE CASE OF ASSESSEE ON ACCOUNT OF AGRICULTURAL INCOME. THE MATTER ALSO TRAVELED IN THE CASE OF ASSESSEE, VIJAY SINGH REPORTED IN 88 TT J 632, IN WHICH SEVERAL DEPARTMENTAL APPEALS HAVE BEEN DISMISSED CONFIRMING THE ORDER OF THE FIRST APPELLATE AUTHORITY IN WHICH THE AGRICULTURAL INCOM E WAS DIRECTED TO BE ASSESSED IN THE HANDS OF THE HUF ONLY THOUGH AGRICU LTURAL LAND WAS PURCHASED IN THE NAME OF INDIVIDUAL OUT OF FUNDS OF HUF. CONS IDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES AND THE MATERIAL ON RECORD, IT IS CLEAR THAT HUF HAS AGRICULTURAL INCOME SUBSTANTIALLY, THEREFORE, WOULD HAVE CAPACITY TO GIVE SMALL AMOUNT TO THE INDIVIDUAL ASSESSEE FOR INVESTMENT IN THE MARGIN MONEY FOR PURCHASE OF CAR. THE AUTHORITIES BELOW, THEREFORE, SHOULD HAVE EXAMINED THIS ISSUE IN DETAIL CONSIDERING THE AVAILABILITY OF AGR ICULTURAL INCOME WITH HUF. I ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF AO WITH DIRECTION T O RE-DECIDE THIS ISSUE IN THE LIGHT OF INCOME EARNED BY HUF IN SEVERAL YEARS. THE AO SHALL GIVE REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. THE ASSESSEE IS ITA NO. 244/AGRA/2013 9 DIRECTED TO PRODUCE ENTIRE EVIDENCES BEFORE THE AO FOR EXAMINATION AND CONSIDERATION. I MAKE IT CLEAR THAT THE CLAIM OF AS SESSEE THAT CAR BELONGS TO HUF HAS CORRECTLY BEEN TURNED DOWN BY THE AUTHORITI ES BELOW BECAUSE THE CAR WAS PURCHASED IN THE INDIVIDUAL NAME OF ASSESSEE AN D LOAN WAS ALSO OBTAINED IN THE NAME OF ASSESSEE INDIVIDUAL. WITH THESE FIND INGS, THIS ISSUE IS RESTORED BACK TO THE FILE OF AO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY