The ITO, 2(3), Bhopal V. Shri Mustkem Beg, Sehore

ITA 251/IND/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66780 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESH
• Keywords: Reopening of assessment; Income from undisclosed sources; Peak credit
• Section: 131; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARMA , AM ITA NO.251/IND/2012 A.Y.2008-09 INCOME TAX OFFICER 2(3) INDORE :: APPELLANT VS SHRI MUSTKEM BEG SEHORE PAN AFLPB 3993B :: RESPONDENT APPELLANT BY SHRI R.A. VERMA RESPONDENT BY SHRI S.S. DESHPANDE DATE OF HEARING 7.11.2012 DATE OF PRONOUNCEMENT 31.12.2012 O R D E R PER SHRI R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 17.2.2012 FOR THE A.. 2008 -09 IN THE MATTER OF ORDER PASSED U/S 148 READ WITH SECTION 14 3(3) OF THE ACT. 2 2. THE REVENUE IS AGGRIEVED WITH THE DELETION OF AD DITION OF RS. 34,52,000/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF UNDISCLOSED INCOM E FROM OTHER SOURCES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. IN THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OF FICER MADE ADDITIONS WITH REFERENCE TO VARIOUS AMOUNTS DEPOSIT ED IN THE BANK ACCOUNT WHICH DO NOT FIND PLACE IN REGULAR BAN K ACCOUNT AND BOOKS OF ACCOUNTS DISCLOSED TO THE DEPARTMENT. 4. BY THE IMPUGNED ORDER, THE CIT(A) DELETED THE EN TIRE ADDITION AFTER RECODING THE FOLLOWING FINDINGS :- 1.4 THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CO NSIDERED WITH REFERENCE TO THE FACTS OBTAINING FROM THE RECORD. R ECORD EVIDENCES THE FACT THAT THE APPELLANT DERIVES INCOME FROM HOU SE PROPERTY AND FROM ITS PROPRIETARY CONCERN M/S TATPAR GAS AGENCY, SEHORE. THE ACCOUNTS MAINTAINED IN RESPECT OF THE APPELLANT'S P ROPRIETARY BUSINESS WERE SUBJECTED TO STATUTORY AUDIT AND THE BANK ACCOUNTS RELATING TO BUSINESS, WERE INCORPORATED IN THE AUDI TED ACCOUNTS OF THE PROPRIETARY CONCERN. APART FROM THE ABOVE, THE APPE LLANT WAS ALSO CLAIMED TO HAVE BEEN MAINTAINING SB ACCOUNT IN BHOP AL NAGARIK SAHAKARI BANK, SHEESH MAHAL BRANCH AND PUNJAB NATIO NAL BANK MARVARI ROAD, BHOPAL, FOR THE LAST MANY YEARS WHERE IN THE PERSONAL SAVINGS AND RECEIPTS FROM SALE PROCEEDS OF ASSETS A ND SUMS INHERITED FROM THE APPELLANTS FATHER, WERE DEPOSITED. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THAT THE APPELLANT'S FATHER EXPIRED ON 3 06.04.2004 LEAVING BEHIND ASSETS IN THE SHAPE OF FD RS, SB ACCOUNT WITH PUNJAB NATIONAL BANK (CONSEQUENT UPON HIS DEAT H, THESE WERE NOMINATED IN THE NAME OF THE APPELLANT), RECOVERIES FROM DEBTORS, PLANT & MACHINERIES, JEEP, TRUCK AND OTHER ASSETS T ABULATED IN THE AUDITED BALANCE SHEET FOR THE A Y 2004-05 FILED BY APPELLANT'S FATHER LATE SHRI AZIM BEG. ALL THESE INCORPORATED IN THE A UDIT REPORT FILED ALONG WITH THE RETURN, FORMED PART OF THE DEPARTMEN TAL RECORDS. THE CASE RECORDS OF SHRI AZIM BEG, FATHER OF THE APPELL ANT, EVIDENCES THE FACT THAT HE WAS BEING ASSESSED FOR THE LAST SEVERA L YEARS BY DECLARING SIZABLE CONTRACT INCOME AND THE AFOREMENTIONED ASSE TS WERE EXPLAINED TO HAVE BEEN ACQUIRED FROM THE SAVINGS AN D EVIDENCES FROM THE AUDITED BALANCE SHEET AND REGISTERED WILL BEQUE ATHED IN FAVOUR OF THE APPELLANT. THE SALE PROCEEDS OF THE FIXED AS SETS I.E. JEEP, PLANT & MACHINERY AND TRUCK SOLD IN DIFFERENT INTERVALS, WERE SUBSTANTIATED BY THE RECEIPTS WHEREIN THE NAME OF THE PURCHASER, DATE AND AMOUNT WERE MENTIONED. THE COMPLETE ADDRESS OF THE PURCHAS ERS WAS ALSO MENTIONED IN THE SAID RECEIPTS AND IN THE EVENT OF ANY DOUBT OR DISPUTE, BEFORE HOLDING ANY ADVERSITY AGAINST THE A PPELLANT IN THIS REGARD, THE AO WAS SPECIFICALLY REQUESTED TO SUMMON THE CONCERNED PERSONS U/S 131 OF THE ACT AND EXAMINE THEM ON OATH . FOR PROPER ENLIGHTENMENT OF FACTS AND FOR ARRIVING AT RIGHT AN D REASONABLE CONCLUSIONS ON THE CRUX OF THE ISSUES, BEFORE ANY A DVERSITY WAS TO BE HELD AGAINST THE APPELLANT, IN MY CONSIDERED VIEW, IT WAS INCUMBENT UPON THE AO TO HAVE SUMMONED AND EXAMINED THE CONCE RNED PERSONS. THIS WAS NOT DONE AND NO JUSTIFICATION WAS ASSIGNED FOR NOT DOING SO. 1.5. IT IS SETTLED POSITION THAT AFFIDAVIT IS NOT A N ORDINARY PIECE OF PAPER WHICH COULD BE BRUSHED ASIDE ON SURMISES. IT IS A PIECE OF EVIDENCE WHICH HAS TO BE TAKEN INTO CONSIDERATION F OR ARRIVING AT A RIGHT FINDING. THE STATEMENT BY THE DEPONENT COULD BE HELD AS UNRELIABLE EITHER ON THE BASIS OF CROSS-EXAMINATION OF THE DEPONENT OR BY REFERENCE TO ANY OTHER MATERIAL EVIDENCE ON RECO RD, LEADING TO THE 4 INFERENCE THAT THE DEPOSITIONS MADE IN THE AFFIDAVI T ARE FALSE (SMT.GUNAVANTI BAI RATILAL V. CIT 146 ITR 140) (MP HC). IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, THE AFF IDAVIT FILED AND DEPOSITIONS MADE THEREUNDER HAD BEEN SIMPLY REJECTE D ONLY ON THE GROUND THAT NO DOCUMENTARY EVIDENCE HAD BEEN PRODUC ED IN SUPPORT OF SUCH DEPOSITIONS. THIS IS TOTALLY INCORRECT. IF THE DEPOSITIONS MADE IN THE AFFIDAVIT ARE NOT FOUND TO BE ACCEPTABLE, AS SUFFICIENT PROOF OF THE MATTER DEPOSED THEREIN, THE DEPONENT SHOULD BE CALLED UPON TO PRODUCE DOCUMENTARY EVIDENCE OR HE SHOULD HAVE BEE N CROSS- EXAMINED TO FMD OUT AS TO HOW THE ASSERTIONS MADE T HEREUNDER, WERE CORRECT, (1958) 33 ITR 786 (ALL. HC). THE SUPREME C OURT IN MEHTA PARIKH & CO. V. CIT 30 ITR 181 (SC) HELD THAT IF TH E DEPONENTS ARE NOT CROSS EXAMINED, THE A.O. CANNOT CHALLENGE THE C ORRECTNESS OF THE STATEMENTS MADE BY THE DEPONENTS IN THE AFFIDAVIT. IT IS ALSO SETTLED POSITION OF LAW THAT THE PERSON ALLEGING AGAINST TH E APPELLANT, IS THE AO AND, THEREFORE, THE BURDEN IS LEGALLY ON HIM TO PROVE THE SAID ALLEGATION. SINCE THIS WAS NOT DONE. ANY ADDITION O N THIS GROUND WILL BE LEGALLY INVALID. 1.6. IN FCI V. PF COMMISSIONER (1990) 1 - SEE - 68, 71 (SC) IT WAS HELD THAT: THE AUTHORITY EMPOWERED U/S 131 OF THE A CT SHOULD EXERCISE ALL HIS POWERS TO COLLECT ALL EVIDENCES AN D MATERIALS BEFORE COMING TO A PARTICULAR CONCLUSION. THAT IS THE LEGA L BURDEN AND DUTY CAST UPON THE AO, EXERCISING QUASI-JUDICIAL POWERS. IT WOULD BE FAILURE TO EXERCISE THE JURISDICTION PARTICULARLY W HEN A PARTY TO THE PROCEEDINGS REQUESTED FOR SUMMONING EVIDENCE FROM A PARTICULAR PERSON. IN THE CASE OF THE APPELLANT, UNDER CONSIDE RATION, THE ASSETS VIZ., JEEP, PLANT & MACHINERY AND TRUCK WERE SOLD A ND THE RECEIPTS OBTAINED FROM THE PURCHASERS, CONTAINING ALL RELEVA NT DETAILS, WERE FILED IN PROCEEDINGS BEFORE THE AO AND IN THE EVENT OF ANY DOUBT OR DISPUTE, BEFORE PROCEEDING AGAINST THE APPELLANT, T HE AO WAS REQUESTED FOR SUMMONING THOSE PARTIES AND EXAMINING THEM ON OATH 5 TO FIND TRUTH IN THE STATED FACTS. AS ALREADY STATE D, THIS WAS NOT DONE AND THE AO'S ACTION IN NOT DOING SO, IN MY CONSIDER ED VIEW, IS OPPOSED TO THE DECISION IN NATHURAM PREMCHAND V. CI T (1963) 49 ITR 561 WHEREIN IT WAS HELD THAT: INSPITE OF APPLICATION REQUESTING THE AO FOR SUMMONING THE CONCERNED PERSONS U/S 131 OF THE ACT, 1; THE AO HAD NOT EXERCISED HIS POWERS UNDER THIS SECT ION FOR ENFORCING ATTENDANCE OF THE \ WITNESS AND IN SUCH CIRCUMSTANCES, IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN FASTENING THE BLAME ON THE APPELLANT AND IN DISBELIEVING THE APPELLANT'S VERSION. 1.7. IN THE CASE OF THE APPELLANT, UNDER CONSIDERAT ION, ALL THE NEEDED DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE AFOREMENT IONED CLAIMS WERE FILED VIZ., IN TOKEN OF HAVING RECEIVED THE SA LE PROCEEDS OF THE ASSETS, DOCUMENTARY EVIDENCE IN THE FORM OF RECEIPT S FROM THE PURCHASERS, WHICH CONTAINED ALL RELEVANT DETAILS, W ERE FILED. THE PROPERTIES INHERITED FROM FATHER WERE SUBSTANTIATED ON THE STRENGTH OF REGISTERED WILL EXECUTED BY THE APPELLANT'S FATHER AND THE GENUINENESS OF THIS WILL, WAS NOT DISPROVED BY THE AO, BY BRINGING REBUTTAL EVIDENCE ON RECORD. THE APPELLANT'S FATHER WAS A MAN OF SUBSTANTIAL MEANS AND ALL HIS FINANCIAL WORTH WAS R EFLECTED IN THE AUDIT REPORT FILED ALONG WITH HIS RETURNS, FORMING PART OF THE DEPARTMENTAL RECORDS AND THE AO HAD NOT BROUGHT ANY EVIDENCE TO PROVE THE CONTRARY IN THIS REGARD. SALE PROCEEDS OF AGRICULTURAL LAND WERE SUBSTANTIATED BY THE SALE DEED WHICH WAS ALSO NOT PROVED BY THE AO AS FALSE. RECEIPT OF GAS COMPENSATION WAS CORROB ORATED BY THE SANCTION ORDER ISSUED BY THE CONCERNED GOVERNMENT A UTHORITY AND THERE WAS NO JUSTIFICATION NOT TO BELIEVE THIS DOCU MENTARY EVIDENCE. THE MATURITY VALUE OF THE FDRS, AMOUNTING TO RS.7,1 3,499/- AND RS. 1,19,678/- WAS SUBSTANTIATED ON THE STRENGTH OF REL EVANT DOCUMENTARY EVIDENCE AND IN THE EVENT OF ANY DOUBT OR DISPUTE, THE AO SHOULD HAVE CONDUCTED INDEPENDENT ENQUIRIES FROM THEL CONC ERNED BANK AUTHORITIES TO FIND OUT TRUTH IN THE STATED FACTS. THIS WAS NOT DONE AND 6 THE EVIDENCE SUBMITTED WAS SIMPLY IGNORED WITHOUT A SSIGNING JUSTIFICATION THEREFOR. THIS MATURITY VALUE WAS REF LECTED IN THE APPELLANT'S ACCOUNT WITH PUNJAB NATIONAL BANK AS ON 10.01.2005. NO EVIDENCE WHATSOEVER WAS BROUGHT BY THE AO ON RECORD TO DISPROVE THE GENUINENESS IN THE APPELLANT'S CLAIM OF WITHDRA WING RS.25,000/- AND RS.12,NO/- FROM THE PROPRIETARY CONCERN OF THE APPELLANT RESPECTIVELY IN A Y 2005-06 AND 2008-09. CREDIT BAL ANCE OF RS.63,941/- APPEARED IN AY 20004-05 I.E., BEFORE 01 .04.2004 AND THIS WAS EXPLAINED TO BE SAVINGS OUT OF AGRICULTURAL INC OME DERIVED FROM THE LAND OWNED BY THE APPELLANT. THIS CREDIT BALANC E APPEARING AS ON 01.04.2004 WAS WITHDRAWN FROM THE BANK AND THE SAME WAS AVAILABLE AS CASH. THE RECEIPTS INCORPORATED AND CONSIDERED I N THE CASH FLOW STATEMENTS WERE SUPPORTED BY EVIDENCE WHICH WERE OF CAPITAL NATURE AND THE MAXIMUM BALANCE APPEARED AS ON 25.05.2007 W AS RS. I 5,07,760/- WHICH WAS COVERED BY THE CASH AVAILABLE WITH THE APPELLANT ON THE RESPECTIVE DATES AS PER ENTRIES RE CORDED IN THE CASH BOOK. IT WAS EXPLAINED THAT THE APPELLANT HAD PREPA RED THE CASH BOOK WHEREIN THE ENTRIES IN THE BANK ACCOUNTS OF PUNJAB NATIONAL BANK AND KSHETRIIYA GRAMIN BANK WERE INCORPORATED AND TH E WITHDRAWALS SO MADE FROM ONE ACCOUNT WERE EXPLAINED TO HAVE BEE N DEPOSITED IN ANOTHER ACCOUNT OR LYING IN CASH. 1. 1.8. I HAVE CAREFULLY GONE THROUGH THE CASH BOOK AN D THE CASH. ROTATION STATEMENT PREPARED BY THE APPELLANT AND SU BMITTED BEFORE THE AO AND I FMD THAT THE APPELLANT HAD CONSIDERED AND INCORPORATED ALL BANK TRANSACTIONS FROM THE A Y 2006-07 TO THE E ND OF THE RELEVANT ASSESSMENT YEAR. THE AO HAD NOT POINTED OUT ANY DEF ECT OR DISCREPANCY IN THE CASH BOOK AND BANK TRANSACTIONS BUT HAD MADE THE IMPUGNED ADDITION, REPRESENTING VARIOUS DEPOSITS, A S INCOME FROM UNDISCLOSED SOURCES IN THE YEAR, UNDER CONSIDERATIO N, THAT TOO WITHOUT GIVING SET OFF FOR THE DEBIT ENTRIES. 1.9. EVEN ASSUMING WITHOUT ACCEPTING THAT ANY ADDIT ION ON THE ABOVE COUNT WAS WARRANTED, IT WAS ALTERNATIVELY SUBMITTED ON BEHALF OF THE 7 APPELLANT THAT THE AO WAS HIGHLY UNJUSTIFIED IN NOT ADOPTING THE PEAK CREDITS WHICH, IN THE CASE OF THE APPELLANT, DID NO T EXCEED RS.15,07,760/-. THIS ALTERNATIVE SUBMISSION WAS EXP LAINED TO BE WITHOUT PREJUDICE TO THE APPELLANT'S MAIN SUBMISSIO N THAT THE ENTIRE DEPOSITS WERE EXPLAINABLE FROM THE SUFFICIENT CASH AVAILABLE ON THE RESPECTIVE DATES AS PER THE ENTRIES REFLECTED IN TH E CASH BOOK AND CASH ROTATION CHART SUBMITTED BEFORE THE AO. 1.10. NO EVIDENCE WHATSOEVER WAS BROUGHT BY THE AO ON RECORD TO PROVE THAT THE WITHDRAWALS SO MADE FROM THE BANK WE RE UTILIZED FOR OTHER PURPOSES OR FOR INVESTMENTS. SINCE THE WITHDR AWALS MADE FROM BANK WERE NOT PROVED TO HAVE BEEN UTILIZED FOR OTHE R EXPENSES/INVESTMENTS, IN MY CONSIDERED VIEW, THE AP PELLANT WAS PERFECTLY JUSTIFIED IN CLAIMING THAT THE SAME WERE AVAILABLE FOR MAKING SUBSEQUENT DEPOSITS IN THE SAID BANK ACCOUNT S. THE RECYCLING OF SUCH FUND ABUNDANTLY ESTABLISHES THAT THE MAXIMU M BALANCE APPEARED IN THE BANK ACCOUNT, WAS AVAILABLE WITH TH E APPELLANT. THE CASH BOOK EVIDENCES THE FACT THAT THE DATE-WISE BAL ANCES WERE WORKED OUT AND THE WITHDRAWALS SO MADE WERE NOT PROVED TO HAVE BEEN UTILIZED IN ANY INVESTMENT AND AS SUCH THE SAME WER E AVAILABLE WITH THE APPELLANT FOR EXPLAINING THE IMPUGNED DEPOSITS. THE AO HAD NOT BROUGHT ANY EVIDENCE ON RECORD NOT TO GIVE CREDENCE TO THE CASH FLOW STATEMENT AND CASH ROTATION CHART SUBMITTED BY THE APPELLANT. THE AO OUGHT TO HAVE APPRECIATED THE FACT THAT THE APPELLA NT WAS THE OWNER OF THE FUNDS AND HENCE, IT WAS HE WHO KNOWS WHERE H IS MONEY HAS GONE AND NONE ELSE. WHEN THE OWNER OF THE FUNDS VIZ ., THE APPELLANT EXPLAINED THAT HIS MONEY HAD GONE IN TO SO AND SO A VENUES AND ROLLED OVER IN SUCH AND SUCH FASHION, THE AO COULD NOT BRU SH ASIDE THE SAME ONLY ON PRESUMPTIONS AND SUSPICIONS, WITHOUT PROVIN G FALSITY IN THE SAME. SUCH ACTION OF THE AO, IN MY CONSIDERED VIEW, WAS NOT LEGALLY PERMISSIBLE. 8 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEA L BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE ORDERS OF THE LOWER AUTHORITIES. WE HA VE PERUSED THE BANK ACCOUNT WITH REFERENCE TO WHICH THE ADDITI ON WAS MADE ON ACCOUNT OF DEPOSIT MADE THEREIN. THE ASSES SEE HAS EXPLAINED THE SAME THROUGH DETAILS FROM OTHER BANK ACCOUNT PERTAINING TO HIS FATHERS BUSINESS. THE CIT(A) HA S RECORDED A DETAILED FINDING TO THE EFFECT THAT THE ASSESSEE HA S EXPLAINED VARIOUS DEPOSITS IN THE BANK ACCOUNT AND THE ASSESS ING OFFICER HAS NOT BROUGHT ON RECORD ANY CONTRARY MATERIAL TO THIS EFFECT. WE FIND THAT WHILE RECORDING THE FINDING, THE CIT(A ) AT PARA 1.9 HAS DEALT WITH THE ALTERNATIVE CONTENTION OF THE AS SESSEE WHEREIN IT WAS REQUESTED THAT THE ADDITION SHOULD N OT EXCEED PEAK AMOUNT OF RS.15,07,760/- AS FOUND DEPOSITED IN THE BANK ACCOUNT. IN THIS REGARD THE LEARNED COUNSEL FOR T HE ASSESSEE INVITED OUR ATTENTION TO THE STATEMENT INDICATING T HE WORKING OF DEFICIT/PEAK FOR DEPOSIT IN THE BANK ACCOUNT, AS FILED BEFORE THE LOWER AUTHORITIES, TO INDICATE THAT PEAK WAS OF RS. 9 6,96,000/-. THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT AVAILABILITY OF CASH IN THE HANDS OF THE ASSESSEE OUT OF THE WITHDRAWALS FROM VARIOUS BANK A CCOUNTS AND REALISATION OF PROPERTY OF HIS FATHER WAS MUCH MORE THAN THE PEAK AMOUNT OF DEPOSIT IN THE BANK ACCOUNT. OU R ATTENTION WAS ALSO INVITED TO THE DETAILED FINDINGS RECORDED BY THE CIT(A) TO THIS EFFECT. WE FIND THAT THE CIT(A) HAS TAKEN S PECIAL NOTE OF REALISATION OF VARIOUS ASSETS OF THE FATHER AND THE AMOUNT AVAILABLE WITH THE ASSESSEE OUT OF SUCH PROCEEDS WH ICH WERE MUCH MORE THAN THE PEAK AMOUNT FOUND DEPOSITED IN T HE BANK ACCOUNT OF THE ASSESSEE. AS THE FINDINGS RECORDED BY THE CIT(A) ARE AS PER MATERIAL ON RECORD, NO INTERFERENCE IS R EQUIRED IN THE FINDINGS SO RECORDED BY CIT(A) RESULTING INTO DELET ION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. 7. AN ADDITIONAL GROUND HAS BEEN TAKEN BY THE REVEN UE TO THE EFFECT THAT THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THE REOPENING OF ASSESSMENT AS INVALID. HOWEVER, AS WE HAVE ALREA DY DECIDED 10 THE ISSUE ON MERIT, WE REFRAIN OURSELVES TO DEALT W ITH THE TECHNICAL ISSUE RAISED BY THE REVENUE AS AN ADDITIO NAL GROUND. 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.12.2012. SD SD (JOGINDER SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31.12.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/- 2627 11