Shri Alkesh Kanubhai Patel, Bharuch V. The Income Tax Officer, Ward-1, Bharuch

ITA 2637/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2079 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 15-09-2015
• Court: TRIBUNAL

Judgement Text

ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 1 OF 7 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO. 2637/AHD/2015/SRT / A.Y.:2010-11 SHRI ALKESH KANUBHAI PATEL, 10, GOKUL NARAYAN ESTATE, OPP. SHREE RAM FLOUR MILL, SHAKTINATH, BHARUCH. PAN:ADHPP9743P VS. INCOME TAX OFFICER, WARD-1, BHARUCH. APPELLANT /RESPONDENT /ASSESSEE BY SHRI MUKUND BAKSHI, CA /REVENUE BY SHRI J. K. CHANDNANI, SR. D.R. / DATE OF HEARING: 08 .06.2018 /PRONOUNCEMENT ON 18 .06.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), 3, VADODARA (CIT(A) FOR SHORT) DATED 06.07.2015 FOR THE A.Y. 2010-11 WHICH IN TURN HAS ARISEN FROM THE ORDER DATED 18.03.2013 PASSED BY INCOME TAX OFFICER, WARD-1, BHARUCH (INSHORT THE AO)UNDER SECTION 144 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 2 OF 7 2. BY WAY OF GROUNDS NO.1 TO 2, RELATES TO UPHOLDING THE ADDITION OF RS.35,98,417/- BEING AMOUNT OF CASH DEPOSIT WITH ICICI BANK SAVING ACCOUNT AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT IGNORING THE FACT THAT BANK ACCOUNT OF THE APPELLANT HAD MADE SEVERAL WITHDRAWAL IN CASH AND VIDE BEST JUDGEMENT ASSESSMENT LEARNED AO OUGHT TO HAVE ALLOWED CREDIT OF SUCH WITHDRAWALS AND THAT ADDITION BASED ON PEAK THEORY ONLY OUGHT TO HAVE BEEN MADE. 3. BRIEFLY STATING THE FACTS OF THE CASE ARE THAT THE CASE WAS SELECTED UNDER CASS AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 29.08.2011. FURTHER NOTICE U/S. 142(1) OF THE ACT WAS ISSUED ON 23.08.2012. HOWEVER, THE ASSESSEE HAS NOT COMPLIED WITH ANY OF THE LETTER ISSUED NOR THE ASSESSEE HAS REPLIED TO THE PENALTY NOTICE ISSUED U/S. 271(1)(B) R.W.S. 274 OF THE ACT. THEREFORE, THE A.O. HAD NO OPTION BUT TO MAKE ASSESSMENT U/S. 144 OF THE ACT TO THE BEST OF HIS JUDGEMENT. THE AIR INFORMATION RECEIVED BY THE A.O. REFLECTED THE CASH DEPOSIT OF RS.15,40,690/- IN THE SAVING BANK ACCOUNT NO. 017801001184 WITH ICICI BANK. FURTHER, BANK ACCOUNT STATEMENT REVEALS THAT THERE ARE VARIOUS ENTRIES OF CASH DEPOSIT FROM 06.04.2009 TO 29.03.2010 ON VARIOUS DATES AMOUNTING TO RS.20,57,727/-. THE A.O. HAS PASSED EXPARTE ASSESSMENT ORDER , THEREFORE, THE ENTIRE CASH ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 3 OF 7 DEPOSIT AMOUNTING TO RS.35,98,629/- INCLUDING INTEREST OF RS.212/- WERE HELD TO BE AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT (A), WHEREIN, IT WAS CLAIMED THAT THE ASSESSEE IS A DIRECTOR OF DIVIJ DETERGENT AND CHEMICALS PVT. LTD. AND ALSO PARTNER IN DIVIJ ENTERPRISES WHICH ARE DOING DETERGENT AND MANUFACTURING BUSINESS AND OF AGENCY BUSINESS OF HINDUSTAN LEVER LTD. THE TURNOVER OF THE FIRM IS 5 TO 6 CRS. IT WAS CLAIMED THAT THE CASH WAS DEPOSITED ON BEHALF OF THE FIRM / COMPANY AND TRANSFERRED THE RESPECTIVE ACCOUNT OF THE FIRM AND COMPANY SOME CASH WITHDRAWALS FROM THE FIRM AND DEPOSIT TO THE KOTAK MAHENDRA BANK FOR PERSONAL LOAN AMOUNT OF DIVIJ ENTERPRISES. BY INTRODUCING CAPITAL, SOME CAPITAL AND REPAYMENT OF LOAN WAS ALSO MADE. HOWEVER, THE CIT (A) NOTED THAT THE ASSESSE HAS NOT COMPILED WITH NOTICES, HENCE, ORDER U/S. 144 OF THE ACT WAS PASSED. THE A. R. EXPLAINED THAT THE APPELLANT AND HIS WIFE ARE STAYING AT UAE AND THEREFORE, THEY WERE NOT ABLE TO COMPLY WITH SHOW CAUSE NOTICE AND NOTICES ISSUED NOR DID THEY SUBMIT THE DETAILS TO THE AO. THE CIT (A) FURTHER OBSERVED THAT THE CASH RECEIVED FROM CUSTOMER OF PARTNERSHIP FIRM AND COMPANY IS NOT SUPPORTED BY ANY EVIDENCE AND THEREFORE, THE SAME CANNOT BE ACCEPTABLE. SINCE, THE ASSESSEE HAS NO EXPLANATION OF THE TWO CASH DEPOSIT TOTALING TO RS.15,40,690/- AND RS.20,57,727/- ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 4 OF 7 RESPECTIVELY BY PRODUCING RELEVANT BOOKS OF ACCOUNT AND EVIDENCES, THEREFORE, THE ADDITION MADE BY THE A.O. U/S. 68 OF THE ACT WAS CAME TO BE CONFIRMED. 5. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THIS TRIBUNAL. AT THE OUTSET, THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE WAS OUT OF INDIA FROM 05.10.2010 TO 15.11.2015 AS PER DETAILED SUMMARY OF DEPARTURE AND ARRIVAL OF INDIA SHOWING THAT DURING THE INTERVENING PERIOD FILED. THE LEARNED COUNSEL ALSO FILED COPY OF PASSPORT IN SUPPORT OF HIS CLAIM. [PAPER BOOK PAGER 1 AND COPY OF PASSPORT AS PER PAPER BOOK 2 TO 18]. THEREFORE, IT WAS CONTENDED THAT THE ASSESSMENT WAS MADE U/S. 144 OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO FILED ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES IN THE FORM OF COPY OF BANK ACCOUNT WITH ICICI BANK , SUMMARY OF DEPOSITS AND WITHDRAWAL MADE IN THE ACCOUNTS, SUMMARY OF CASH DEPOSIT WITH BANK ACCOUNT AND CERTIFICATE FROM ICICI BANK CLARIFYING THE NATURE OF TRANSACTION. THE COPY OF PASSPORT OF THE ASSESSEE AND SUMMARY OF DATE OF DEPARTURE OF INDIA DURING THE PERIOD ALSO FILED. THE ASSESSEE HAS ALSO FILED SUMMARY OF BANK ACCOUNT WITH ICICI BANK SHOWING CASH DEPOSIT AND CASH WITHDRAWAL AND CASH OF REDEPOSIT IN TO THE SAID BANK ACCOUNT. THEREFORE, IT WAS CONTENDED THAT THESE ADDITIONAL EVIDENCES REQUIRED TO BE ADMITTED TO DECIDE THE ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 5 OF 7 ISSUE AND SO ARRIVE TO PEAK CREDIT IN RESPECT OF CASH DEPOSIT AND WITHDRAWALS AS REFLECTED IN THE BANK ACCOUNT. THE LEARNED COUNSEL SUBMITTED THAT THE ADDITIONAL EVIDENCE FILED UNDER RULE 29 OF THE TRIBUNAL RULES, 1963 ARE VERY ESSENTIAL, HENCE, THIS MAY PLEASE TO BE ADMITTED IN THE INTEREST OF REVENUE AS THE ASSESSMENT WAS PASSED U/S. 144 OF THE ACT . THE LEARNED COUNSEL HAD SUBMITTED THAT THE CIT (A) HAS NOT CONSIDERED THE PEAK CREDIT APPEARING THE BANK STATEMENT AS FILED BY THE ASSESSE. IN VIEW OF THIS FACT, IT WAS SUBMITTED THAT IN THE INTEREST OF JUSTICE, THE ISSUE MAY BE SET ASIDE TO THE FILE OF A.O. PER CONTRA, THE LEARNED SR. DR OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. HOWEVER, HE IS NOT SERIOUS IF THE ISSUE IS RESTORED TO FILE OF THE A.O. IN THE INTEREST OF JUSTICE. 6. WE HAVE HEARD RIVAL CONTENTION OF PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, WE ARE OF THE VIEW THAT THESE ADDITIONAL EVIDENCES ARE NECESSARY FOR PROPER APPRECIATION OF THE ISSUE UNDER APPEAL SUBSTANTIAL JUSTICE. SUCH EVIDENCE MAY ULTIMATELY TURN OUT TO THE BENEFIT OF EITHER TAX PAYER OR THE REVENUE. RELIANCE IS PLACED IN THE CASE OF CIT V. TEXT HUNDRED INDIA (P)LTD.[2011] 351 ITR 57 (DEL): 197 TAXMAN 128(DEL) : 51 DTR 241(DEL) WHEREIN IT WAS OBSERVED AS FOLLOWS: 13. THE AFORESAID CASE LAW CLEARLY LAYS DOWN A NEAT PRINCIPLE OF LAW THAT DISCRETION LIES WITH THE TRIBUNAL TO ADMIT ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 6 OF 7 ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE ONCE THE TRIBUNAL AFFIRMS THE OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDICATION OF THE MATTER. THIS CAN BE DONE EVEN WHEN APPLICATION IS FILED BY ONE OF THE PARTIES TO THE APPEAL AND IT NEED NOT TO BE A SUO MOTU ACTION OF THE TRIBUNAL. THE AFORESAID RULE IS MADE ENABLING THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE IN ITS DISCRETION IF THE TRIBUNAL HOLDS THE VIEW THAT SUCH ADDITIONAL EVIDENCE WOULD BE NECESSARY TO DO SUBSTANTIAL JUSTICE IN THE MATTER. IT IS WELL-SETTLED THAT THE PROCEDURE IS HANDMADE OF JUSTICE AND JUSTICE SHOULD NOT BE ALLOWED TO BE CHOKED ONLY BECAUSE OF SOME INADVERTENT ERROR OR OMISSION ON THE PART OF ONE OF THE PARTIES TO LEAD EVIDENCE AT THE APPROPRIATE STAGE. ONCE IT IS FOUND THAT THE PARTY INTENDING TO LEAD EVIDENCE BEFORE THE TRIBUNAL FOR THE FIRST TIME WAS PREVENTED BY SUFFICIENT CAUSE TO LEAD SUCH AN EVIDENCE AND THAT THIS EVIDENCE WOULD HAVE MATERIAL BEARING ON THE ISSUE WHICH NEEDS TO BE DECIDED BY THE TRIBUNAL AND ENDS OF JUSTICE DEMAND ADMISSION OF SUCH AN EVIDENCE, THE TRIBUNAL CAN PASS AN ORDER TO THAT EFFECT. IN VIEW OF THESE FACTS, WE ARE INCLINED TO ADMIT THE ADDITIONAL EVIDENCE. THEREFORE , THE A.O IS DIRECTED TO ADMIT THE ADDITIONAL EVIDENCE. IN VIEW OF THIS MATTER, THE ENTIRE ASSESSMENT IS SET-ASIDE TO THE FILE OF THE A.O. TO DECIDED AFRESH AND MAKE DENOVO ASSESSMENT. NEEDLESS TO SAY ALKESH K. PATEL WARD.1, BHARUCH/I.T.A. NO. 2637/AHD/2015/A.Y. 10-11 PAGE 7 OF 7 THAT THE CO.OPERATE IN PROCEEDINGS AND FILE NECESSARY EVIDENCES AS DEEM NECESSARY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE SET ASIDE FOR STATISTICAL PURPOSE. 8. ORDERED PRONOUNCED IN THE OPEN COURT ON 18-06-2018. SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A), 4. PR. CIT 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT BVC