P Rahim Abdulla, Raigad V. Income tax Officer,

ITA 2757/PUN/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5934 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Income from undisclosed sources
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NO.2757/PUN/2016 / ASSESSMENT YEAR : 2010-11 P. RAHIM ABDULLA, MUMBAI PUNE HIGHWAY, TALUKA, KOLHAPUR-410203. PAN : AJLPK6873B ....... / APPELLANT / V/S. ITO, WARD-4, PANVEL. / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN REVENUE BY : SHRI ABDHESH KUMAR JHA / DATE OF HEARING : 23.01.2020 / DATE OF PRONOUNCEMENT : 28.01.2020 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)-2, THANE DATED 30.09.2016 FOR THE ASSESSMENT YEAR 2010-11. 2. BEFORE US, DEVIATING FROM THE ORIGINAL GROUNDS AND NOT PRESSING THE ADDITIONAL GROUND NO.1, LD. COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ADDITIONAL GROUND NO.2 IS THE RELEVANT GROUND AND THE SAME SHOULD BE ADJUDICATED FIRST IN VIEW OF THE APPLICABILITY OF THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (I) LTD., 331 ITR 236 (BOM.-HC). THE SAID ADDITIONAL GROUND NO.2 IS EXTRACTED HEREUNDER :- THE ADDITIONS OF RS.6,85,720/- MADE TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNSECURED LOAN FROM M/S. C.K. TRADERS AND RS.621/- ON ACCOUNT OF BANK 2 ITA NO.2757/PUN/2016 INTEREST RECEIVED BY THE ASSESSEE AND CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ARE UNSUSTAINABLE IN LAW, AS THE ADDITIONS OF RS.45,94,000/- MADE ON ACCOUNT OF THE GROUND FOR WHICH THE ASSESSMENT WAS RE-OPENED U/S 147 OF THE ACT HAVE BEEN ALREADY DELETED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 3. THE FACTS RELATING TO THE ABOVE EXTRACTED ADDITIONAL GROUND NO.2 INCLUDE THAT THE ASSESSING OFFICER MADE ADDITION OF RS.45,94,000/- ON ACCOUNT OF CASH DEPOSITS. THE DETAILS ARE GIVEN IN PARA 5 OF THE ASSESSMENT ORDER AND THE SAID PARA 5 OF THE ASSESSMENT ORDER IS EXTRACTED HEREUNDER :- 5. ON PERUSAL OF THE SAVING BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH PUNJAB NATIONAL BANK, KHOPOLI BRANCH BEARING NUMBER 231100 0100091220, CUSTOMER NUMBER DKW002224, MODE OF OPERATION : SELF, IT IS NOTICED THAT THERE WERE CASH DEPOSITS OF RS.32,44,000/- SOURCE OF WHICH WERE NOT EXPLAINED BY THE ASSESSEE. FURTHER THERE WAS A CREDIT OF RS.13,50,000/- ON 8/2/2010 SOURCE OF WHICH WAS ALSO NOT EXPLAINED BY THE ASSESSEE. THIS SAVING BANK ACCOUNT WAS NOT REFLECTED IN THE BALANCE SHEET OF M/S. SAGAR AUTO CENTRE, NOT CONSIDERED IN THE BUSINESS OF PETROL PUMP, IT CANNOT BE OUT OF SALE PROCEEDS ESPECIALLY WHEN THE PETROL PUMP IS LOCATED AT VALLITHODE, KELIYANTHARA, P.O. IRRITY, KANNUR, DISTRICT, KERALA AND CASH DEPOSITS WERE MADE AT KHOPOLI, MAHARASHTRA. FURTHER THE ASSESSEE IS A DEALER OF INDIAN OIL CORPORATION WHEREAS THE PAYMENTS WERE DEPOSITED IN THE ACCOUNT OF HINDUSTAN PETROLEUM CORPORATION, HENCE IT COULD NOT BE RELATED WITH THE BUSINESS OF PETROL PUMP. THESE CASH DEPOSITS AND CREDITS ARE THEREFORE CONSIDERED OUT OF UNACCOUNTED INCOME OF THE ASSESSEE AND ACCORDINGLY A TOTAL SUM OF RS.45,94,000/- IS ADDED TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1)(C) IS INITIATED FOR THE ASSESSEES THIS ACT OF CONCEALING PARTICULARS OF INCOME TO THE TUNE OF RS.45,94,000/-. 4. IN ADDITION, THE ASSESSING OFFICER MADE THE OTHER ADDITIONS ON ACCOUNT OF UNSECURED LOANS OF RS.6,85,720/- AND ON ACCOUNT OF BANK INTEREST OF RS.621/-. DETAILS AS GIVEN IN PARA 6 ONWARDS OF THE ASSESSMENT ORDER ARE GIVEN AS FOLLOWS :- 6. FURTHER ON THE ISSUE OF UNSECURED LOANS OF RS.6,85,720/- AS APPEARED IN BALANCE SHEET, IN ABSENCE OF ANY SUBMISSION BY THE ASSESSEE I HAVE NO OPTION TO ADD BACK THIS TOTAL AMOUNT OF RS.6,85,720/- AS ASSESSEES UNACCOUNTED INCOME. PENALTY PROCEEDINGS U/S.271(1)(C) IS INITIATED FOR THE ASSESSEES THIS ACT OF FURNISHING INACCURATE PARTICULARS OF INCOME TO EVADE THE TAXES. 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS NOTICED THAT ASSESSEE HAS NOT OFFERED THE INTEREST RECEIVED OF RS.621/- FROM SAVINGS ACCOUNT NO.2311000100091220 HELD AT PUNJAB NATIONAL BANK, KHOPOLI BRANCH. AS A RESULT THE AMOUNT OF RS.621/- ON ACCOUNT OF UNDISCLOSED INCOME IS ADDED TO THE 3 ITA NO.2757/PUN/2016 TOTAL INCOME OF THE ASSESSEE. PROCEEDINGS U/S.271(1)(C) ARE SEPARATELY INITIATED FOR CONCEALING PARTICULARS OF INCOME. 8. SUBJECT TO ABOVE REMARK THE TOTAL TAXABLE INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- TOTAL INCOME AS PER THE RETURN :- RS. 4,48,760/- ADDITION AS DISCUSSED IN PARA 5 RS. 45,94,000/- ADDITION AS DISCUSSED IN PARA 6 RS. 6,85,720/- ADDITION AS DISCUSSED IN PARA 7 RS. 621/- TOTAL INCOME ASSESSED U/S 143(3) RS. 57,29,101/- ROUNDED OFF TO RS. 57,29,100/- 5. REFERRING TO THE ABOVE ADDITIONAL GROUND NO.2, THE LD. COUNSEL FOR THE ASSESSEE FILED THE FOLLOWING WRITTEN SUBMISSION :- IT IS FURTHER SUBMITTED THAT ON THE ISSUE OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, BASED ON WHICH THE ASSESSMENT IN THIS CASE WAS RE-OPENED, THE LD. ASSESSING OFFICER HAS MADE TOTAL ADDITION OF RS.45,94,000/- AS PER PARA 5 OF THE ASSESSMENT ORDER. THIS AMOUNT CONSISTED OF CASH DEPOSITS OF RS.32,44,000/- AND CREDITS OF RS. 13,50,000/-. THE ASSESSEE HAS OBJECTED TO THE SAID TOTAL ADDITION OF RS.45,94,000/- BEFORE THE LD. COMMISSIONER OF INCOME (APPEALS). THE LD. COMMISSIONER OF INCOME (APPEALS) HAS DELETED THE SAID TOTAL ADDITION OF RS.45,94,000/- CONSISTING OF CASH DEPOSIT OF RS.32,44,000/- AND CREDITS OF RS.13,50,000/-, VIDE DISCUSSION IN PARA 6 TO PARA 7.1 OF HIS ORDER. IN PARA 6 OF ITS JUDGEMENT IN THE CASE OF THE HON'BLE PUNE BENCH OF THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF PRABHAKAR DAMODAR GAWANDE - ITA NOS. 2543, 2187 & 2545/PUN/2017 HAS HELD THAT IF NO ADDITION IS MADE OR THE ADDITION MADE ON THE GROUND FOR WHICH THE ASSESSMENT WAS RE-OPENED DOES NOT FINALLY PASSED THE SCRUTINY BY THE APPELLATE FORUMS, NO FURTHER ADDITION CAN BE MADE FOR INCOME WHICH COMES TO THE NOTICE OF THE LD. ASSESSING OFFICER DURING THE COURSE OF THE RE-ASSESSMENT PROCEEDINGS. IT HAS BEEN FURTHER HELD THAT ANY LAWFUL JURISDICTION. 'TO MAKE ADDITION ON ACCOUNT OF OTHER INCOMES COMING TO THE NOTICE OF THE AO DURING THE COURSE OF PROCEEDINGS U/S 147 CAN BE ACQUIRED ONLY ON THE FOUNDATION OF A VALIDLY ACQUIRED JURISDICTION ON LEGALLY SUSTAINABLE ITEMS OF PRABHAKAR D. GAWANDE A. YRS. 2008-09, 2013-14 & 2014-15 INCOME ESCAPING ASSESSMENT FORMING REASONS FOR ISSUING NOTICE U/S 148. IN OTHER WORDS, IF THE AO FAILS TO ACQUIRE A VALID JURISDICTION TO MAKE RE- ASSESSMENT ON THE BASIS OF HIS REASONS, THEN, HE IS ALSO DEBARRED FOR MAKING ADDITIONS FOR OTHER INCOMES CHARGEABLE TO TAX WHICH ESCAPED ASSESSMENT AND COME TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS U/S 147. THE HON'BLE BOMBAY HIGH COURT IN CIT VS. JET AIRWAYS (I) LTD. (2011) 331 ITR 236 (BOM) HAS HELD TO THIS EXTENT. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI HIGH COURT IN CIT VS. CHIEL COMMUNICATIONS INDIA PVT. LTD. (2013) 354 ITR 549 (DEL).' IN THE PRESENT CASE ALSO AS ALREADY DISCUSSED ABOVE THE ASSESSMENT WAS RE- OPENED FOR THE REASON THAT THE ASSESSEE HAS MADE HUGE CASH DEPOSITS IN HIS BANK ACCOUNT WHICH WAS NOT DISCLOSED THE DEPARTMENT. THE ADDITION 4 ITA NO.2757/PUN/2016 OF RS.45,94,000/- MADE ON THIS ACCOUNT HAS BEEN DELETED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ACCORDINGLY IN VIEW OF THE JUDGEMENT OF THE HON'BLE PUNE BENCH OF THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF PRABHAKAR DAMODAR GAWANDE - ITA NOS. 2543, 2187 & 2545/PUN/2017 FURTHER ADDITIONS OF RS.6,85,720/- AND RS.621/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOAN OF RS.6,85,720/- RECEIVED BY THE ASSESSEE FROM M/S C.K. TRADERS AND RS.621/- ON ACCOUNT OF BANK INTEREST RECEIVED BY THE ASSESSEE CANNOT SURVIVE. THE ASSESSEE THEREFORE IS TAKING THE FOLLOWING ADDITIONAL GROUND OF APPEAL. 6. FURTHER, REFERRING TO THE FACTS OF THE PRESENT CASE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE PRESENT CASE ALSO, THE ASSESSING OFFICER REASSESSED THE CASH DEPOSITS (SUPRA) ON THE INCOME OF THE ASSESSEE BY MAKING ADDITION OF RS.45,94,000/-. THE SAME WAS SUBSEQUENTLY DELETED FOLLOWING THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PRABHAKAR DAMODAR GAWANDE VS. ITO VIDE ITA NOS.2543, 2187 & 2545/PUN/2017 ORDER DATED 09.05.2019. 7. RELYING ON THE SAME, LD. COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ADDITIONS SINCE STANDS DELETED, THE OTHER ADDITIONS MADE BY THE ASSESSING OFFICER ARE UNSUSTAINABLE IN THE RE-ASSESSMENT PROCEEDINGS. 8. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE WRITTEN SUBMISSION FILED BEFORE US AND ALSO PERUSING THE DECISION OF THE TRIBUNAL IN THE CASE OF PRABHAKAR DAMODAR GAWANDE (SUPRA), WE FIND THAT THE FACTS OF THE PRESENT APPEAL ON THE TOUCHSTONE OF THE PRINCIPLE AS DISCUSSED HEREINABOVE. IT TURNS OUT THAT THE ONLY ADDITION MADE BY THE ASSESSING OFFICER AS PER THE RECORDED REASONS AND THE SAME STANDS DELETED. IN OTHER WORDS, ON THE CONCEALED INCOME, THE ASSESSING OFFICER DESIRED TO TAX ON THE REASONS RECORDED, IS NO LONGER THE CONCEALED INCOME. IN VIEW OF THE ABOVE REFERRED JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JET AIRWAYS (I) LTD. (SUPRA), WE 5 ITA NO.2757/PUN/2016 DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED OTHER ADDITIONS SINCE THE SOLE ADDITION MADE BY THE ASSESSING OFFICER NO LONGER IS SUSTAINABLE. THUS, THERE CAN BE NO QUESTION OF MAKING ANY OTHER ADDITION TO THE INCOME VALIDLY. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE OTHER ADDITIONS I.E. INTEREST AND UNSECURED LOANS ACCOUNTS. ACCORDINGLY, WE ORDER. IN VIEW OF THE ABOVE, THE ADJUDICATION OF OTHER GROUNDS/ADDITIONAL GROUNDS BECOMES AN ACADEMIC EXERCISE. RELEVANT GROUNDS ARE DISMISSED AS ACADEMIC. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 28 TH DAY OF JANUARY, 2020. SD/- SD/- (S. S. VISWANETHRA RAVI) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 28 TH JANUARY, 2020. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-2, THANE. 4. THE PR. CIT-2, THANE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.