Sh. Rajiv Sharma, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 271/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0530 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: PADAM BAHL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.271(ASR)/2016 ASSESSMENT YEAR:2009-10 PAN: AZNPS9826N SH. RAJIV SHARMA, VS. INCOME TAX OFFICER, AMRITSAR. WARD-3(3), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL, CA RESPONDENT BY: SH. S.S. KANWAL, DR DATE OF HEARING: 12/07/2016 DATE OF PRONOUNCEMENT: /07/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2009-10, AGAINST THE ORDER DATED 14.03.2016, PASSED BY THE LD. CIT(A)-1, AMRITSAR. THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL: 1 THAT THE LD. CIT(A)-1, AMRITSAR, HAS GROSSLY ERR ED IN CONFIRMING THE ADDITION OF RS.2,67,000/- MADE BY TH E ITO, WARD 3(3), AMRITSAR, ON ACCOUNT OF ALLEGED CASH DEP OSITS REMAINING UNEXPLAINED. 2. THAT BOTH LD. CIT(A)-1, AMRITSAR AND ITO, WARD 3 (3), AMRITSAR HAVE FAILED TO APPRECIATE THAT ASSESSEE HA S EXPLAINED THE SOURCE OF THESE CASH DEPOSITS AS LIFE INSURANCE PREMIUM OF HIS CUSTOMERS. 3. THAT THE LD. CIT(A)-1, AMRITSAR, HAS GROSSLY ERR ED IN CONFIRMING THE ADDITION OF RS.1,835/- AND RS.10,838 /- MADE BY THE AO ON A TOTALLY WRONG PREMISE. ITA NO.271(ASR)/2016 A.Y. 2009-10 2 2. APROPOS GROUND NO.1, THE AO ASKED THE ASSESSEE T O EXPLAIN THE SOURCE OF DEPOSITS OF RS.13,77,200/- IN THE BANK AC COUNT OF THE ASSESSEE. RS.9,10,200/- WERE FOUND TO HAVE BEEN UTILIZED BY THE ASSESSEE TOWARDS MAKING DRAFTS AND PAYMENTS ON ACCOUNT OF INSURANCE PREMIUM OF VARIOUS PERSONS. FURTHER, LOAN OF RS.1,96,000/-, DE POSITED IN THE BANK AT RS.2,00,000/-, WAS FOUND TO HAVE BEEN ACCEPTED BY T HE ASSESSEE FROM AN AGRICULTURIST, NAMELY, SH. SUKHBIR SINGH. THE BALAN CE AMOUNT OF RS.2,67,000/- REMAINED TO BE EXPLAINED AND THE AO A DDED THIS AMOUNT TO THE INCOME OF THE ASSESSEE. THE LD. CIT(A) CONF IRMED THE ADDITION. 3. AS BEFORE THE AUTHORITIES BELOW, ON BEHALF OF TH E ASSESSEE, THE LD. COUNSEL HAS STATED THAT THE AMOUNT OF RS.2,67,000/- WAS RECEIVED BY THE ASSESSEE FROM HIS CUSTOMERS FOR ARRANGING DEMAND DR AFTS FROM THE ASSESSEES BANK ACCOUNT FOR ISSUING L.I.C POLICIES FROM RELEVANT COMPANIES AGAINST THE SAID DEMAND DRAFT. IT HAS BEE N CONTENDED THAT AS AVAILABLE FROM THE SUBMISSIONS FILED BEFORE THE LD. CIT(A), A COPY WHEREOF IS FILED ALONGWITH THE APPEAL BEFORE US, THE RECEI PT OF SUCH AMOUNT OF RS.2,67,000/- STANDS ADEQUATELY EXPLAINED, WHICH EX PLANATION HAS ILLEGALLY NOT BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(A). 4. THE LD. CIT(A), WHILE CONFIRMING THE ADDITION, I N THE LAST PARA AT PAGE-4 OF THE IMPUGNED ORDER HAS OBSERVED, AS FOLLO WS: AS ALREADY DISCUSSED, IT IS THE RESPONSIBILITY ON THE PART OF THE ASSESSEE TO PROVIDE PROOF/DOCUMENTS IN REGARD TO HI S CLAIM THAT THE SAID AMOUNT OF RS.2,67,000/- WAS COLLECTED TO ISSUE DEMAND DRAFTS IN THE NAME OF THE INSURANCE AGENCIES OR FOR SOME O THER REASONS. AS THE APPELLANT HAS NEITHER GAVE ANY EXPLANATION AT THE ASSESSMENT ITA NO.271(ASR)/2016 A.Y. 2009-10 3 STAGE, NOR HE HAS BEEN ABLE TO DO IT NOW AT APPELLA TE STAGE BEFORE ME. THE GROUNDS TAKEN IN THIS REGARD IS DISMISSED. 5. THE LD. DR HAS SUPPORTED THE IMPUGNED ORDER CONT ENDING THAT SINCE NO EXPLANATION REGARDING THE AMOUNT OF RS.2,6 7,000/- WAS OFFERED, THE ADDITION WAS RIGHTLY CONFIRMED BY THE LD. CIT(A ). 6. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE FIND THAT THE INCOME OF THE AS SESSEE WAS DERIVED BY WAY OF SALARY FROM ICICI PRUDENTIAL LIFE INSURANCE CO. LTD., AMRITSAR, FOR THE PERIOD FROM 01.04.2008 TO 16.08.2008 AND FROM R ELIANCE LIFE INSURANCE CO. LTD., AMRITSAR, FOR THE PERIOD FROM 1 6.08.2006 TO 31.03.2009. BEING A SALARIED PERSON, TO KEEP UP HIS PERFORMANCE AND SERVICE CAREER HE ARRANGES FUNDS FROM THE GENERAL PUBLIC, THE ASSESSEE ARRANGES DEMAND DRAFTS THROUGH HIS SAVINGS FUND ACC OUNT FOR SENDING TO DIFFERENCE INSURANCE COMPANIES AND AS SUCH, THE IN SURANCE POLICIES ARE ISSUED TO THE CONCERNED PERSONS. SO FAR AS REGARDS THE AMOUNT OF RS.2,67,000/-, IN THE WRITTEN SUBMISSIONS FILED BEF ORE THE LD. CIT (A), A COPY WHEREOF HAS BEEN PLACED ON FILE BEFORE THIS BE NCH, THE ASSESSEE GAVE THE FOLLOWING EXPLANATION: 3.1 THE ACTION OF THE ASSESSING OFFICER IS AGAINST FACTS. FIRST OF ALL, THE DETAILS OF THE AMOUNT RECEIVED F ROM THE CUSTOMERS AND OTHERS FOR ARRANGING DEMAND DRAFTS FROM APPELLANT'S BANK ACCO UNTS TO BE SENT TO THE DIFFERENT COMPANIES AND LIFE INSURANCE POLICIES ISS UED AGAINST THESE PREPARED DEMAND DRAFTS ARE SUBMITTED AS UNDER:- DATE AMOUNT NARRATION 19.02.2009 1,01,000 THE PAYMENT RECEIVED FROM SINT. VEENA RANI W/O. SHRI VINOD KUMAR, PLOT NO.3, NEW KISHANKOT, ISLAMABAD, AMRITSAR (PHONE NO.0183-2213534) WAS DEPOSITED IN APPELLANTS SF A/C.NO,518408, AND ITA NO.271(ASR)/2016 A.Y. 2009-10 4 D.D. WAS PREPARED AND SENT AGAINST THE RELIANCE LIFE POLICY NO. 13844979 ISSUED TO THE SAID PERSON. 24.09.2008 30,000 THE PAYMENT RECEIVED FROM SHRI PAWAN KUMAR C /O. RROKERS-REGAL INS. BROKER & RISK MANAGEMENT SERVICES PVT. LTD., 1ST FLOOR, R. S. TOWER, HALL BA ZAR, AMRITSAR(PHONE NO.0183-5002545) WAS DEPOSITED IN APPELLANTS SF A/C.NO.518408, AND D.D. WAS PREPARED AND SENT AGAINST THE AVIVA LIFE POLICY NO.LSP 1648913 ISSUED TO THE SAID PERSON. 25.09.2008 45,000 THE AMOUNT WAS DEPOSITED IN APPELLANTS SF A/C .NO.508205 ON 25.09.2008 AND THREE DDS, ISSUED FOR RS. 15000 EACH ON THE SAME DATE AGAINST WHICH THREE POLICIES WERE ISSUED IN THE NAMES OF FOLLOWI NG THREE PERSONS:- 1). DD NO. 127352-POLICY NO.LSPL 679457 OF AVIVA LIFE INSURANCE IN THE NAME OF SHARDA RANI C/O. REGAL INS. BROKER) PHONE NO.0181 -5002454). 2). DD NO. 127353- POLICY NO.LSP1655613 OF AVIVA LIFE INSURANCE IN THE NAME OF RAVI BALA, HNO637, JAPANI MILL, CHHEHARTA. 3). DD NO.127354- POLICY NO,LSP1647632 OF AVIVA LIFE INSURANCE IN THE NAME OF HARJIT SINGH C/O. REG AL INS. BROKER) PHONE NO.0183-5004525). 25.11.2008 35,000 THE PAYMENT RECEIVED FROM DR. RAJINDER SINGH,ST.NO.L2, PAWAN NAGAR, AMRITSAR WAS DEPOSITED IN APPELLANTS S.F.A/C.NO.508205, AND. D.D. WAS PREPARED AND SENT AGAINST THE ICICI PRUDENTIAL POLICY NO.067951363 ISSUED TO THE SAID PERSON (MOBILE NO.9814673264) 11.08.2008 50,0000 THE CHEQUE IS RECEIVED FROM HIMALAYA-ADVENT URE, DEEN DYAL UPADHIAYA MARKET, AMRITSAR. THEY ARE TRAVEL AGENTS AND ARRANGE TRAVEL PACKAGES ETC. THE APPELLANT HAD GIVEN AN ADVANCE OF RS.SQOOO TO ARRANGE THEIR TOUR PACKAGE TOR THREE PERSONS. DUE TO CHANGE IN PROGRAMME SCHEDULE, REFUND OF THE SAI D AMOUNT OF RS.SQOOO WAS TAKEN VIDE CHEQUE AFOR ESAID AND DEPOSITED IN APPELLANTS BANK ACCOUNT. FROM ABOVE, YOUR HONOUR CAN WELL JUDGE THAT ALL THE SE CASES OF THE DEPOSITS MADE IN THE BANK IN APPELLANT'S BANK ACCOU NTS ARE WELL EXPLAINED AS HAVING BEEN RECEIVED FROM DIFFERENT IN SURANCE POLICY HOLDERS FOR WHOM DEMAND DRAFTS WERE GOT ISSUED AND SENT TO INSURANCE COMPANIES. THE ABOVE FACTUAL POSITION IS WELL VERIFIABLE FROM THE SITE OF THESE INSURANCE COMPANIES. EVEN TH E ASSESSING ITA NO.271(ASR)/2016 A.Y. 2009-10 5 OFFICER NOWHERE DISBELIEVED THE MODUS OPERANDIE AND TRUTH OF APPELLANT'S SUBMISSIONS BUT INSPITE OF THE SAME HE ACCEPTED THE SAME IN PIECEMEAL. 7. THE ABOVE CHART SHOWS THAT INDEED, THE ASSESSEE HAS SUBMITTED THE EXPLANATION REGARDING THE AMOUNTS OF RS.1,01,00 0/-, RS.30,000/-, RS.45,000, RS.35,000 AND RS.50,000/- DEPOSITED ON 1 9.02.2009, 24.09.2008, 25.09.2008, 25.11.2008 AND 11.08.2008, RESPECTIVELY, IN HIS BANK ACCOUNT. THE EXPLANATION QUA IN ALL THESE AM OUNTS, BUT FOR THE AMOUNT OF RS.50,000/-, IS THAT THE DEMAND DRAFTS WE RE GOT PREPARED AGAINST SUCH AMOUNTS. SO FAR AS REGARDS THE AMOUNT OF RS.50,000/-, THE EXPLANATION OFFERED IS THAT THIS WAS AN ADVANCE GIV EN BY THE ASSESSEE TO HIS TRAVEL AGENT, WHICH AMOUNT WAS REFUNDED, SINCE THE PROPOSED TOUR DID NOT MATERIALIZE DUE TO CHANGE IN PROGRAMME SCHE DULE AND THE AMOUNT WAS DEPOSITED IN THE ASSESSEES BANK ACCOUNT . 8. FROM THE ABOVE, IT IS EVIDENT THAT THE ORDER OF THE LD. CIT(A) HAS BEEN PASSED WITHOUT CONSIDERING THE AFORESAID EXPLA NATION OFFERED BY THE ASSESSEE. IT IS NOTICED THAT THIS EXPLANATION WAS N OT MADE AVAILABLE BEFORE THE AO. THEREFORE, IN THE INTEREST OF JUSTIC E, I DEEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE FILE OF THE AO TO BE DEC IDED ON CONSIDERING THE ABOVE EXPLANATION OFFERED BY THE ASSESSEE. THE ASSE SSEE SHALL BE AFFORDED DUE OPPORTUNITY TO SUPPORT HIS CASE AND THE ASSESS EE SHALL COOPERATE WITH THE AO IN THE FRESH PROCEEDINGS. 9. REGARDING THE AMOUNT OF RS.1,835/- REPRESENTING AGENT COMMISSION, AS PER THE AO, AND THAT OF RS.10,838/-, ACCORDING TO THE AO, ITA NO.271(ASR)/2016 A.Y. 2009-10 6 REPRESENTING CASH ACCEPTED/DEPOSITED EXCESS, WHERE THE DEMAND DRAFTS PREPARED WERE LESS, THE ADDITIONS WERE MADE, SINCE NO EXPLANATION WAS OFFERED BY THE ASSESSEE. SINCE THE MATTER REGARDING ADDITION OF RS.2,67,000/- STANDS REMITTED TO THE FILE OF THE AO , AS ABOVE, THIS ISSUE SHALL ALSO BE DECIDED AFRESH BY THE AO ON AFFORDING OPPORTUNITY TO THE ASSESSEE AND THE ASSESSEE SHALL FILE HIS EXPLANATIO N IN THIS REGARD. ORDERED ACCORDINGLY. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/07/ 2 016. SD/- (A.D. JAIN) JUDICIAL MEMBER /SKR/ DATED: 18/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. RAJIV SHARMA, AMRITSAR 2. THE ITO WARD 3(3), AMRITSAR. 3. THE CIT(A), ASR 4. THE CIT, ASR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.