Jayasri S Shenoy, Mangaluru V. Deputy Commissioner of Income-tax, Circle-2(1), Mangaluru

ITA 2690/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4609 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK JHA
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Deemed to accrue or arise in india; Condonation of delay
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 2690 / BANG/201 7 ASSESSMENT YEAR : 20 09 - 10 SMT. JAYASRI S SHENOY, 803, DEV PLAZA, KADRI TEMPLE ROAD, MANGALORE 575 002. PAN: AFBPS3101E VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2 (1), MANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI R. CHANDRASHEKAR, ADVOCATE RESPONDENT BY : SHRI D.K. JHA, ADDL. CIT (DR) DATE OF HEARING : 22. 0 5 .2018 DATE OF PRONOUNCEMENT : 15. 0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT (A), MANGALURU DATED 15.06.2017 FOR ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE C.I.T. (APPEALS) IS AGAINST LAW , FACTS AND CIRCUMSTANCES OF THE CASE AND WEIGHT OF EVIDENCE. 2. THE LEARNED C.I.T. (APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS. 144508/- MADE TO THE RETURNED INCOME BY THE ASSESSI NG OFFICER. 3. THE LEARNED C.I.T. (APPEALS) OUGHT TO HAVE FOUND THAT THE PROVISIONS OF SECTION 69B OF THE I.T. ACT ARE NOT A PPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED C.I.T (APPEALS) ERRED IN SUSTAINING THE ADDITION TO COVER THE ALLEGED CASH SHORTAGE OF RS. 1,44,508/ -. 5. SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME O F HEARING. ITA NO.2690/BANG/2017 PAGE 2 OF 6 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THERE IS DELAY OF 113 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL A ND THE ASSESSEE HAS SUBMITTED AN APPLICATION FOR CONDONATION OF DELAY A LONG WITH AFFIDAVIT OF ASSESSEE. HE POINTED OUT THAT THIS IS THE EXPLANAT ION OF THE ASSESSEE THAT ORDER OF CIT(A), MANGALORE WAS RECEIVED BY THE HUSBAND OF THE ASSESSEE ON 21.06.2017 BUT THE SAID ORDER WAS MISPLACED. IN TH E MEANWHILE, THE ASSESSEE FELL ILL AND THEREAFTER, THE ASSESSEE SHIFTED HER R ESIDENCE TO A DIFFERENT PLACE IN MANGALORE AND IN THIS PROCESS, THE PAPERS WERE MISP LACED AND AFTERWARDS, WHEN THE ASSESSEE GOT THE PAPERS, THE APPEAL WAS GO T PREPARED AND AFTER OBTAINING THE DOCTOR CERTIFICATE FOR THE SAME, THE APPEAL WAS FILED. HE SUBMITTED THAT UNDER THESE FACTS, THE DELAY IN FILI NG THE APPEAL SHOULD BE CONDONED. THE LD. DR OF REVENUE STRONGLY OPPOSED T HE CONDONATION OF DELAY. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN VIEW OF THE FACTS NOTED ABOVE, WE FEEL THAT IN THE INTEREST OF JUSTICE, THE DELAY SHOULD BE CONDONED AND HENCE WE CONDONE THE DELAY AND ADMIT THE APPEAL. 5. REGARDING THE MERIT OF THE APPEAL IN RESPECT OF ADDITION OF RS. 2,56,077/- U/S. 69B OF IT ACT, IT WAS SUBMITTED THAT EXPLANATION WA S OFFERED BEFORE THE AO AS BEING NOTED BY HIM ON PAGES 6 AND 7 OF ASSESSMENT O RDER AND AS PER THE SAME, IT IS THE EXPLANATION OF THE ASSESSEE THAT TH E CASH DEFICIT IN CASH BOOK ON VARIOUS DATES HAS ARISEN BECAUSE OF THE MISTAKE OF THE ACCOUNTANT AND THEREFORE, NO ADDITION IS CALLED FOR. HE REITERATE D THE SAME CONTENTIONS BEFORE US. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FOR T HE SAKE OF READY REFERENCE, WE REPRODUCE THE WRITTEN SUBMISSIONS DATED 11.05.20 17 FILED BY ASSESSEE BEFORE CIT(A) AND REPRODUCED BY CIT(A) IN PARA 5.3 OF HIS ORDER AND WE ALSO REPRODUCE PARAS 5.4 AND 5.5 WHERE THE ISSUE HAS BEE N DECIDED BY CIT(A). THESE PARAS ARE AS UNDER. 5.3 WRITTEN SUBMISSIONS DATED 11-05-2017: THE APPEAL IS DIRECTED AGAINST THE ADDITION OF RS.2 ,56,077/- AS DEEMED INCOME U/S 69 B. ITA NO.2690/BANG/2017 PAGE 3 OF 6 I. IN APPLICABILITY OF SECTION 69 B THE APPELLANT HAD CREDITED THE FOLLOWING AMOUNTS TO MISCELLANEOUS RECEIPTS IN THE BOOKSMAINTAINED TO EXPLAIN AWAY THE SOURCES FOR BANK REMITTANCES. 15 - 10 - 2008 50,000 25 - 10 - 2008 150,000 15 - 11 - 2008 150,000 10 - 12 - 2008 150,000 19 - 12 - 2008 150,000 30 - 12 - 2008 150,000 09 - 01 - 2009 150,000 15 - 01 - 2009 150,000 24 - 01 - 2009 150,000 05 - 02 - 2009 150,000 05 - 03 - 2009 150,000 20 - 03 - 2009 54,000 17,04,000 IN THE ABSENCE OF PROPER EXPLANATION AS TO THE SOUR CE, THE SAME WAS OFFERED FOR TAXATION UNDER OTHER SOURCES. THE PART TIME ACCOUNTANT, WHO WAS WRITING THE BOOKS INSTEAD OF CREDITING THE FULL AMOUNT OF RS.17,04,000/- ON 07-1 0-2008, DISTRIBUTED THE CREDIT TO VARIOUS DAYS WHICH RESULTED IN THERE BEING A PEAK NEGATIVE CASH BALANCE OF RS.144508/- ON 13-10-2008. THERE WAS ALSO A NEGATIVE CASH BALANCE OF RS.1,11,569/- ON 13-03-2 009. THE ASSESSING OFFICER HAS ADDED UP BOTH THE NEGATIV E CASH BALANCES AND ASSESSEDRS.2,56,077/- AS DEEMED INCOME U/S 69 B. 69 B OF THE INCOME TAX ACT READS AS FOLLOWS : '69B WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS M ADE INVESTMENTS OR IS FOUND TO BE OWNER OF ANY BULLION, JEWELLERY OR O THER VALUABLE ARTICLE, AND THE (ASSESSING) OFFICER FINDS THAT THE AMOUNT E XPENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWE LLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THI S BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH E XCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEM ED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR'. THE APPELLANT HAD NOT MADE ANY INVESTMENT IN THE FI NANCIAL YEAR EXCEEDING THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT. THE ADDITION DISSERVES TO BE DELETED ON THE GROUND THAT SECTION 69 B HAS NO APPLICATION IN THE FACTS AND CIRCUMSTANCES O F THE CASE. ITA NO.2690/BANG/2017 PAGE 4 OF 6 2. AVAILABILITY OF FUNDS AS STATED, THE APPELLANT HAD ALREADY OFFERED FOR TA XATION RS. 17,04,000/- WHICH WAS CREDITED IN THE BOOKS ON VARI OUS DAYS BETWEEN OCTOBER 2008 AND MARCH 2009. IN ADDITION, THE APPEL LANT HAD TAKEN TEMPORARY LOANS AMOUNTING IN ALL TO RS.58,000/- FRO M FRIENDS WHICH WAS REPAID IN MARCH 2009. THE RECAST DAY BOOK IS MA RKED AS ANNEXURE B IN TERMS OF WHICH THERE WILL BE NO NEGAT IVE CASH BALANCE ON ANY DAY. IN THE RECAST BOOK, ENTIRE INCOME OF RS .17,04,000/- OFFERED FOR TAXATION UNDER OTHER SOURCES IS CREDITE D ON 06-102008. 3. PEAK DEFICIENCY WITHOUT PREJUDICE TO THE ABOVE TWO PRIMARY CONTENTI ONS, IT IS SUBMITTED THAT IN THE WORST CASE SCENARIO, ONLY THE PEAK NEGATIVE CASH BALANCE OF RS. 144508/- ON 13-10-2008 CAN BE BROUGH T TO TAX. ONCE RS.145000/- IS TAXED AND THE CASH BALANCE CARRIED F ORWARD, THERE WOULD BE NO NEGATIVE CASH BALANCE ON 13.03.2009 WHI CH CAN BE BROUGHT TO TAX UNDER ANY OF THE PROVISIONS OF THE A CT. THE RECAST CASH BOOK IS ATTACHED AS ANNEXURE-A. 5.4 THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMEN T ORDER WERE CONSIDERED CAREFULLY. THE AO DEALT WITH THE AP PELLANT'S REQUEST FOR SHIFTING THE DATES OF CREDIT IN THE CAS H BOOK AND TEMPORARY LOANS AMOUNTING TO RS.58,000/-WHICH WERE SUPPOSED TO BE OMITTED TO BE RECORDED IN THE CASH BOOK. THE AO PASSED A SPEAKING ORDER DEALING WITH ALL THE ISSUES RAISED B Y THE APPELLANT BEFORE HIM. THE SAME ARGUMENT WAS REITERATED BEFOR E ME. THERE IS NO MERIT IN THE ARGUMENTS OF THE APPELLANT. THE BOO KS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED TO GIVE TRUE AND FAIR VIE W OF THE STATE OF AFFAIRS. IT IS NOT OPEN TO THE APPELLANT TO DISCRED IT ITS OWN BOOKS OF ACCOUNTS MAINTAINED AND PRODUCED AS EVIDENCE FOR TH E PURPOSES OF ASSESSMENT. FURTHER THE ARGUMENT OF THE APPELLANT I S SELF SERVING IN NATURE, WITHOUT ANY EVIDENTIARY VALUE. 5.5 FROM THE CASH BOOK, THE AO WORKED OUT A MAXIMUM N EGATIVE CASH BALANCE OF RS.1,44,508/- ON 13-10-2008 AND ALS O A NEGATIVE CASH BALANCE OF RS. 1,11,569/-ON 13.3.2009. ACCORDINGLY THE AO MADE ADDITION OF RS.2,56,077/-. THE APPELLANT SUBMITTED THAT ONLY THE PEAK NEGATIVE CASH BALANCE OF RS.1,44,508/- ON 13-1 02008 CAN BE BROUGHT TO TAX. ONCE RS.1,45,000/- IS TAXED AND THE CASH BALANCE CARRIED FORWARD, THERE WOULD BE NO NEGATIVE CASH BALANCE ON 13.03.2009. I HAVE PERUSED THE RECAST CA SH BOOK SUBMITTED BY THE APPELLANT. THERE IS MERIT IN THE S UBMISSION OF THE APPELLANT. HENCE, I DIRECT THE AO TO DELETE THE ADDITION OF RS.1,11,569/-. THE ADDITION OF RS.1,44,508/- IS HER EBY SUSTAINED. 7. FROM THE ABOVE PARAS, IT IS SEEN THAT THIS IS TH E CLAIM OF THE ASSESSEE THAT INCOME OF RS. 17,04,000/- DECLARED BY ASSESSEE WAS REQUIRED TO BE CREDITED ON ITA NO.2690/BANG/2017 PAGE 5 OF 6 07.10.2008 BUT THE ACCOUNTANT HAS CREDITED THE SAME ON VARIOUS DATES FROM 15.10.2008 TO 20.03.2009 AND BECAUSE OF THIS REASON , THE DEFICIT IN CASH BOOK HAS ARISEN ON SEVERAL DATES. WE FIND THAT AS PER P ARA 5.5 OF THE ORDER OF CIT(A), FROM THE CASH BOOK, THE AO WORKED OUT A MAX IMUM NEGATIVE CASH BALANCE OF RS. 1,44,508/- ON 13.10.2008 AND ALSO A NEGATIVE CASH BALANCE OF RS. 1,11,569/- ON 13.03.2009 AND ACCORDINGLY, THE A O MADE ADDITION OF RS. 2,56,077/-. OUT OF THIS, LEARNED CIT (A) HAS ALREA DY DELETED THE SECOND ADDITION OF RS. 111,569/- AND BEFORE US, THE DISPUTE IS ONLY ABOUT THE FIRST ADDITION OF RS. 144,508/-. WE ALSO FIND THAT THE ACCOUNTANT OF THE ASSESSEE HAS CREDITED IN THE BOOKS RS. 50,000/- AS MISCELLANEOUS RECEIPTS ON 15. 10.2008 AND RS. 1,50,000/- AS MISCELLANEOUS RECEIPTS ON 25.10.2008 AND EVEN IF THESE TWO AMOUNTS ARE CREDITED IN THE BOOKS ON 13.10.2008 OR ANY DATE PRIOR TO THAT THEN THERE WILL BE NO NEGATIVE CASH BALANCE AS ON 13.10. 2008. THERE IS NO EVIDENCE REGARDING CREDIT OF THESE TWO AMOUNTS ON 15.10.2008 AND 25.10.2008 AND CONSIDERING THE FACTS OF THE PRESENT CASE IN ITS TO TALITY, IN OUR CONSIDERED OPINION, THE CREDIT OF THESE TWO AMOUNTS OF RS. 1,5 0,000/- AND ANOTHER RS. 50,000/- SHOULD BE ACCEPTED AS CREDITED ON 13.10.20 08 AND IN THE RESULT, THERE IS NO CASH DEFICIT ON 13.10.2008 AND AS A CONSEQUEN CE, THE ADDITION MADE BY THE AO IS NOT JUSTIFIED AND WE THEREFORE, DELETE TH E SAME. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 15 TH JUNE, 2018. /MS/ ITA NO.2690/BANG/2017 PAGE 6 OF 6 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.