Ritesh Malviya, Khandwa V. ITO Ward 1, Khandwa, Khanrwa

ITA 268/Ind/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0940 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 18-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: THROUGH
• Keywords: Principle of natural justice; Set aside; Bogus
• Section: 143(3); 20

Judgement Text

SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 268/IND/2019 A.Y. 2015-16 SHRI RITESH KUMAR MALVIYA, KHANDWA PAN AWJPM0747K :: APPELLANT VS ITO, WARD-1, KHANDWA :: RESPONDENT ASSESSEE BY SHRI PAVAN VED , ADV. (THROUGH VIDEO CONFERENCING ) RESPONDENT BY SHRI ASHISH PORWAL, SR. DR DATE OF HEARING 28. 0 5 .20 20 DATE OF PRONOUNCEMENT 28 .05 .20 20 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT(A)-II, INDORE DATED 27.12.2018 PERTAINING TO AS SESSMENT YEAR 2015-16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. LD. CIT(A) ERRED IN CONFIRMING TAXING TOTAL INCOME U/S 115BBE OF RS.1,67,050/- 2. THE APPELLANT RESERVES RIGHT TO ADD OR AMEND THE GR OUNDS OF APPEAL 2. THE FACTS IN BRIEF ARE THAT THE CASE OF THE ASSE SSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 1 43(3) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT ) WAS FRAMED SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 2 VIDE ORDER DATED 22.12.2017 WHILE FRAMING THE ASSES SMENT. THE ASSESSING OFFICER MADE FOLLOWING OBSERVATIONS: 6. IT IS THEREFORE CLEAR THAT WHOLE EXERCISE FOR .S HOWING SUCH INCOME IN THE YEAR UNDER CONSIDERATION HAS BEEN MAD E TO EXPLAIN SOURCE OF CASH DEPOSITED IN SBN DURING DEMONETIZATI ON PERIOD. ON VERIFICATION OF THIS OFFICE RECORD IT IS NOTICED TH AT THE ASSESSEE HAS DEPOSITED CASH OF RS.26,81 ,000/- IN OLD NOTES (SBN ) IN HIS BANK ACCOUNT WITH BANK OF INDIA JAWAR BRANCH, AND PNB BR ANCH SANAWAD, DURING THE DEMONETIZATION PERIOD FROM 09-1 1-2016 TO 31-12-1016. THE ASSESSEE HAS FILED HIS REPLY ONLINE EXPLAINING THE SOURCE OF CASH SO DEPOSITED. ON VERIFICATION OF THE REPLY IT IS SEEN THAT THE ASSESSEE HAS CLAIMED THAT OUT OF TOTAL DEP OSIT, RS. 26,59,000/- WAS DEPOSITED OUT OF HIS PAST SAVINGS. IN THIS CONT EXT ONLY THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRU TINY UNDER CASS AS DISCUSSED ABOVE THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM FOR INCOME FROM MOTOR REVINDING CHARGES, AND VEHICLE CHARGES. THE ASSESSEE WAS THEREFORE REQUESTED TO SH OW CAUSE AS TO WHY THE INCOME WHICH COULD NOT BE SUBSTANTIATED BY HIM SHOULD NOT BE TREATED AS BOGUS INCOME OFFERED FOR E XPLAINING THE MONEY DEPOSITED DURING SUBMITTED HIS REPLY VIDE LET TER DATED 22.11.2017 WHICH REPRODUCED AS UNDER: SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 3 7. THE REPLY OF THE ASSESSEE HAS BEEN DULY CONSIDER ED, HOWEVER, THE SAME IS NOT FOUND TO BE CONVINCING. THE REPLY I S GENERAL IN NATURE IN WHICH HE HAS JUST REPEATED THAT WHATEVER INCOME SHOWN BY HIM IS CORRECT AND THE STATEMENT TAKEN BEHIND HI S BACK CANNOT BE RELIED ON. SUCH EXPLANATION ON BOGUS INCOME SHOW N FOR EXPLAINING THE SOURCE OF MONEY DEPOSITED DURING DEM ONETIZATION CANNOT BE ACCEPTED. SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 4 8. SINCE THE ASSESSEE HAS FAILED TO SUBSTANTIATE HI S INCOME TO THE ABOVE EXTENT. THE WHOLE EXERCISE FOR SHOWING SUCH I NCOME IN THE YEAR .UNDER CONSIDERATION IS TREATED AS DONE FOR EX PLAINING THE SOURCE OF CASH DEPOSITED DURING DEMONETIZATION PERI OD BY PAYING TAX AT LOWER RATE IN THE YEAR UNDER CONSIDERATION. IN VIEW OF THE DETAILED DISCUSSION MADE HEREIN ABOVE THE INCOME FR OM MOTOR REBINDING AND VEHICLE INCOME OF RS. 4,30,242/- SHOW N BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IS TAXED O N PROTECTIVE BASIS U/S 115BBE OF I.T. ACT. SINCE THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE INCOME DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE CREDIT FOR THE SAME FOR EXPLAINI NG THE MONEY DEPOSITED IR: DEMONETIZATION PERIOD IN THE A. Y. 2017-18, CANNOT BE ALLOWED. ACCORDINGLY, THE CLAIM OF PAST YEAR SAV ING TO THAT EXTENT MADE BY THE ASSESSEE SHALL BE ASSESSED ON SU BSTANTIVE BASIS IN A. Y. 2017-18 AND TAXED AT THE RATES PRESC RIBED U/S 115BBE OF THE I.T.ACT AS APPLICABLE FOR THE SAID ASST YEAR ., IN VIEW OF THE ABOVE, TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER- TOTAL INCOME AS PER RETURN- 8. SINCE THE ASSESSEE H AS FAILED TO SUBSTANTIATE HIS INCOME TO THE ABOVE EXTENT. THE WH OLE EXERCISE FOR SHOWING SUCH INCOME IN THE YEAR .UNDER CONSIDERATIO N IS TREATED AS DONE FOR EXPLAINING THE SOURCE OF CASH DEPOSITED DURING DEMONETIZATION PERIOD BY PAYING TAX AT LOWER RATE I N THE YEAR UNDER CONSIDERATION. IN VIEW OF THE DETAILED DISCUS SION MADE HEREIN ABOVE THE INCOME FROM MOTOR REBINDING AND VE HICLE INCOME OF RS. 4,30,242/- SHOWN BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IS TAXED ON PROTECTIVE BASIS U/S 115BBE OF I.T. ACT. SINCE THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE I NCOME DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE CREDIT FOR THE SAME FOR EXPLAINING THE MONEY DEPOSITED IR: DEMONETIZATION PERIOD IN THE A. Y. 2017-18, CANNOT BE ALLOWED. ACCORDINGLY, THE CLAIM OF PAST YEAR SAVING TO THAT EXTENT MADE BY THE ASSESSE E SHALL BE ASSESSED ON SUBSTANTIVE BASIS IN A. Y. 2017-18 AND TAXED AT THE RATES PRESCRIBED U/S 115BBE OF THE I.T.ACT AS APPLICABLE FOR THE SAID ASST YEAR, SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 5 IN VIEW OF THE ABOVE, TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER- TOTAL INCOME AS PER RETURN- RS. 4,30,242/ ASSESSED INCOME-(ON PROTECTIVE BASIS U/S 115BBE,/-) RS. 4,30,242/ AGRICULTURE INCOME RS. 1.33.402/- ASSESSED U/S 143(3) OF THE I.T.ACT. 1961 AS A TOTAL INCOME AT RS. 4,30,242/- ON PROTECTIVE BASIS U/S 11513BI-:, TAX & INTEREST CHARGEABLE IS AS PER ITNS 150. WHICH IS PART OF THIS ORDER. DEMAND NOTICE ISSUED. 3. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE LD. CIT(A), WHO DISMISSED THE APPEAL EX-PARTE . 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUN AL. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACTS IN RIGHT PERSP ECTIVE. HE SUBMITTED THAT THE LD. CIT(A) HAS NOT PASSED A SPEA KING ORDER ON THE IMPUGNED ADDITIONS. 6. LD. DEPARTMENTAL REPRESENTATIVE (DR) OPPOSED THE SE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORI TIES BELOW. 7. I HAVE HEARD THE RIVAL CONTENTIONS OF LD. CIT(A) HAS DISMISSED THE APPEAL BY OBSERVING AS UNDER: 2. THE CASE WAS FIXED/ADJOURNED FOR HEARING ON 15.10.2018, 26.10.2018 27.11.2018 & 27.12.2018. ON THE DATES OF HEARING, NEITHER ANYBODY ATTENDED NOR FILED ANY WRITTEN SUBMISSION. 2.1 IT SEEMS THAT THE APPELLANT IS NOT INTERESTED T O PURSUE ITS APPEAL. THEREFORE THIS APPEAL CANNOT BE KEPT PE NDING ADJUDICATION FOR INDEFINITE PERIOD. MERE FILING OF APPEAL IS NOT ENOUGH RATHER IT REQUIRES EFFECTIVE PROSECUTION ALSO. THE APPELLANT HAS ALSO NOT FILED ANY INFORMATION WI TH THIS SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 6 OFFICE. IN VIEW OF THESE FACTS, I AM OF THE CONSIDE RED VIEW THAT THE APPEAL OF THE APPELLANT IS LIABLE TO BE DI SMISSED. THIS VIEW IS SUPPORTED BY MANY JUDICIAL PRONOUNCEME NTS WHICH ARE AS UNDER :- (I) CIT VS. B. NO. BHATTACHARGEE 118 ITR 461 (II) ESTATE OF LATE TUKOJIRAO HOLKAR VS. CWT 223 I TR 480 (III) CIT VS. MULTIPLAN INDIA LTD. 38 ITD 320 (DEL) 2- HOWEVER, IN THE INTEREST OF NATURAL JUSTICE, I HAVE GONE THROUGH THE ASSESSMENT ORDER AND GROUNDS OF APPEAL. AFTER TAKING INTO ACCOUNT THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, GROUNDS OF APPEAL AT SR. NO.1 TO 3 OF GROUNDS OF APPEAL ARE HEREBY DISMISSED FOR THE REASONS THAT THE FACTS AND FINDINGS BROUGHT OUT BY THE AO IN THE ASSESSMENT ORDER-HAVE NOT BEEN CONTROVERTED BY THE APPELLANT. THEREFORE, THE AO HAS BEEN FOUND JUSTIFI ED IN MAKING THE VARIOUS ADDITIONS AS PER THE ASSESSMENT ORDER. THEREFORE, ALL THE GROUNDS OF APPEAL ARE DISMISSED. 8. FROM THE ABOVE IT IS CLEAR THAT THE LD. CIT(A) H AS NOT GIVEN ANY FINDING ON MERIT. I, THEREFORE, IN THE INTEREST OF PRINCIPLE OF NATURAL JUSTICE, SET ASIDE THE IMPUGNED ORDER AND R ESTORE THE GROUNDS OF APPEAL TO THE FILE OF LD. CIT(A) AND DEC IDE THE GROUND RAISED BY THE ASSESSEE ON MERITS IN A FRESH SPEAKIN G ORDER. 9. IN RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES ONLY. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28.05 .2020. SD/ - (KUL BHARAT) JUDICIAL MEMBER DATED : 28 .05.2020 PATEL/PS SMC RITESH KUMAR MALVIYA ITA NO.268 OF 2019 7 COPY TO: APPELLANT/RESPONDENT/PR.CIT(A)/PR.CIT/DR, INDORE