Smt. Mahdavi Bhausahaheb Mahale, Nashik V. Income-tax Officer,

ITA 279/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1926 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANTKUMAR C LEUVA
• Assessee Lawyers: V L JAIN
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.279/PN/2015 #& & / ASSESSMENT YEAR : 2009-10 SMT. MADHAVI BHAUSAHEB MAHALE, PLOT NO.1, MADHAVI MANSION, NEAR JAISHANKAR LAWN, TAKLI ROAD, DWARKA, NASHIK 422 011 PAN NO.ASTPM0770G . / APPELLANT V/S ITO, WARD-1(4), NASHIK . / RESPONDENT / ASSESSEE BY : SHRI V.L. JAIN / REVENUE BY : SHRI HEMANT KUMAR C. LEUVA / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 11-02-2015 OF THE CIT(A)-I, NASHIK RELATING TO ASSESSMENT YEAR 2009-10. 2. ADDITION OF RS.11,85,000/- U/S.68 OF THE I.T. ACT BY THE AO AND UPHELD BY THE CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL. / DATE OF HEARING :13.04.2016 / DATE OF PRONOUNCEMENT:29.04.2016 2 ITA NO.279/PN/2015 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS RUNNING A BEAUTY PARLOUR. SHE FILED HER RE TURN OF INCOME ON 26-03-2010 DECLARING TOTAL INCOME OF RS.2,69,340 /- AND AGRICULTURAL INCOME OF RS.53,750/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSE E HAS PURCHASED TWO IMMOVABLE PROPERTIES. THE FIRST PROPERTY W AS PURCHASED VIDE PURCHASE DEED DATED 09-04-2008 FOR RS.3 6 LAKHS WHEREIN HER SHARE WAS EXPLAINED TO THE EXTENT OF RS.5 LAK HS. THE AO ACCEPTED THE CONFIRMATION OF THE LOAN TAKEN FROM SHRI Y .J. THAKUR OF DHULE. THE COPY OF THE BANK ACCOUNT IN STATE B ANK OF INDIA, DHULE WAS FILED WHICH WAS VERIFIED AND ACCEPTED BY THE AO. 3.1 THE ASSESSEE PURCHASED THE SECOND PROPERTY ON 24 -12-2008 FOR A CONSIDERATION OF RS.24 LAKHS WHEREIN SHE HAS 50% SHA RE BEING RS.12 LAKHS. OUT OF THE ABOVE RS.12 LAKHS THE ASSES SEE HAS GIVEN RS. 4 LAKHS VIDE CHEQUE NO.981577 DATED 19-01-200 9. FURTHER, SHE ALSO CLAIMED TO HAVE GIVEN AN AMOUNT OF RS.6 LAKHS IN CASH. THE AO, THEREFORE, ASKED THE ASSESSEE TO EXPLA IN THE SOURCE OF PAYMENT OF RS.4 LAKHS AND RS.6 LAKHS. 4. IN RESPONSE TO THE QUERY RAISED BY THE AO REGARDIN G THE SOURCE OF RS.10 LAKHS THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNT. FROM THE CASH BOOK PRODUCED BEFORE HIM THE A O NOTED THAT THE ASSESSEE HAS INTRODUCED CASH ON VARIOUS DATE S, THE DETAILS OF WHICH ARE AS UNDER : DATE AMO UNT INTRODUCED 27 - 04 - 2008 RS.2,90,000/ - 25 - 05 - 2008 RS.3,00,000/ - 13 - 07 - 2008 RS,3,00,000. - 10 - 08 - 2008 RS.2,95,000/ - 3 ITA NO.279/PN/2015 5. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE ABOVE CASH INTRODUCED IN THE BOOKS OF ACCOUNT. IT WAS EXPLAINED ORALLY THAT THERE ARE SUNDRY DEBTORS/RECEIVABLES OF RS.1 1,95,000/- AS ON 31-03-2008. THE AO OBSERVED THAT IN THE CASH B OOK PRODUCED IN THE HEARING NO SUCH DETAILS WERE MENTIONED. IN ABSENCE OF PROPER EXPLANATION BY THE ASSESSEE AND CONSIDERING THE GROSS RECEIPTS FROM THE BEAUTY PARLOUR SHOWN AT RS.3,42, 270/- AND RS.4,97,960/- FOR F.YRS. 2007-08 AND 2008-09 RESPECTIV ELY THE AO HELD THAT THE PAYMENT OF SUCH HUGE AMOUNT CA NNOT REMAIN OUTSTANDING FOR A LONG PERIOD. SINCE THE BUSINESS IS VERY SMALL THERE IS NOT MUCH GENERATION OF CASH. THE AO, THER EFORE, DISBELIEVED THE INTRODUCTION OF CASH OF RS.11,85,000/- IN THE CASH BOOK AS RECEIPT FROM SUNDRY DEBTORS AND HELD THE SAME TO BE FROM UNDISCLOSED SOURCES. APPLYING THE PROVISIONS OF SECTION 6 8 OF THE I.T. ACT THE AO MADE ADDITION OF RS.11,85,000/- TO THE TOT AL INCOME OF THE ASSESSEE. 6. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT SHE HAD RE CEIVED BACK THE ADVANCES GIVEN TO VARIOUS PERSONS IN THE PAST THE DETAILS OF WHICH ARE AS UNDER : NAME OF THE PARTY AMOUNT RECEIVED BACK DATE OF RECEIPT 1)SHIVAJI BHATU DESALE, A/P. KASARE TAL. SAKRI, DIST. DHULE 3,00,000/ - 25 - 05 - 2008 2) RAVINDRA RAMCHANDRA DESALE A/P. KASARE TAL. SAKRI, DIST.DHULE 10,000/ - 2,90,000/- 06 - 04 - 2008 27-04-2008 3) RAJENDRA SITARAM HIRE, A/P. NAWANDNE, TAL. SAKRI DIST. DHULE 2,95,000/ - 10 - 08 - 2008 4) DILIP BHATU DESALE A/P. KASARE, TAL. SAKRI, DIST. DHULE 3,00,000/ - 13 - 07 - 2008 TOTAL CASH 11,95,000/ - 4 ITA NO.279/PN/2015 7. IT WAS SUBMITTED THAT ALTHOUGH THESE DETAILS WERE GIV EN TO THE AO, HOWEVER, HE HAS NOT CONSIDERED THE SAME PROPER LY. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT (A) CALLED FOR A REMAND REPORT FROM THE AO. HE DIRECTED HIM TO VER IFY THE GENUINENESS OF TRANSACTIONS BETWEEN THE ASSESSEE AND T HE ABOVE NAMED 4 PERSONS. THE AO IN HIS REMAND REPORT STATED T HAT SHE HAD RECORDED THE STATEMENTS OF THE ABOVE 4 PERSONS W HO APPEARED BEFORE HIM IN RESPONSE TO NOTICE U/S.131 OF THE I.T. ACT. HOWEVER, NONE OF THE ABOVE PERSONS COULD PRODUCE ANY EVIDENCE IN RESPECT OF THE TRANSACTIONS BETWEEN THEM AND THE ASSESSEE. NO NE OF THE ABOVE PERSONS COULD GIVE ANY SPECIFIC DETAILS OF THE CASH R ECEIVED BY THEM FROM THE ASSESSEE AS ADVANCE IN LIEU OF SALE OF TH EIR RESPECTIVE LANDS. NONE OF THE ABOVE PERSONS COULD GIVE S OURCE OF THE REPAYMENT OF THE ALLEGED ADVANCE TO THE ASSESSEE E XCEPT STATING THAT THE CASH WAS REPAID OUT OF THEIR AGRICULTURAL INCOME. 8. THE AO FURTHER REPORTED THAT THE SAUDA PAVATI AND BHARTA PAVATI FILED BY THE ASSESSEE SHOW THAT THE DOCUMENTATIO N HAS BEEN CONCOCTED TO PROVE THE RECEIPT OF RS.11,95,000/- FR OM THE ABOVE NAMED 4 PERSONS. THOSE SAUDA PAVATI AND BHART A PAVATI HAVE BEEN MADE ON SIMPLE PAPERS AND NOT ON STAMP PAPE RS. THESE ARE NOT NOTARISED OR REGISTERED. THE ASSESSEE A LSO FAILED TO PRODUCE ORIGINAL RECEIPTS FOR HAVING GIVEN ADVANCE IN CASH TO THE ABOVE 4 PERSONS. ALTHOUGH IT WAS SPECIFICALLY REQUESTED T O PRODUCE THE ORIGINAL DOCUMENTS THE ASSESSEE DID NOT PRODUCE THE SAME. IN VIEW OF THE ABOVE AND IN VIEW OF THE INABILITY OF THE ASSESS EE TO SATISFACTORILY EXPLAIN THE SOURCE OF RS.11,95,000/- THE CIT(A ) UPHELD THE ACTION OF THE AO. 5 ITA NO.279/PN/2015 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 10. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT THE ASSESSEE WAS REGULARLY FILING THE BALANCE SHEET AND THE REVENUE AUTHORITIES HAVE ACCEPTED THE SAME AND THAT T HE ADVANCE GIVEN IN EARLIER YEARS ARE NOT DOUBTED, THEREFORE, THE RET URN OF THE SAME ADVANCE CANNOT BE DOUBTED. HE SUBMITTED THAT TH E LOWER AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE VARIOUS S UBMISSIONS MADE FROM TIME TO TIME. HE ACCORDINGLY SUBMITTED THAT T HE ADDITION MADE BY THE AO AND UPHELD BY THE CIT(A) SHOULD BE DELETED. 11. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT DESPITE SUFFICIENT OPPORTUNITIES GIVEN BY THE AO DURING ASSESSMENT PROCEEDINGS AS WELL AS REMAND PROCEEDINGS TH E ASSESSEE WAS UNABLE TO EXPLAIN THE INTRODUCTION OF CASH O F RS.11,95,000/- TO THE SATISFACTION OF THE AO. THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE UPHELD. 12. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO MADE ADDIT ION OF RS.11,85,000/- U/S.68 OF THE I.T. ACT ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO EXPLAIN PROPERLY THE INTRODUCTION OF CASH ON VARIOUS DATES AMOUNTING TO RS.11,85,000/-. THE SUBMISS ION OF THE ASSESSEE BEFORE THE AO THAT IT HAD SUNDRY DEBTORS/RECEIVABLES OF RS.11,95,000/- AS ON 31-03-2008 FRO M WHOM THESE AMOUNTS WERE RECEIVED WAS DISBELIEVED BY THE AO ON 6 ITA NO.279/PN/2015 THE GROUND THAT IN THE CASH BOOK PRODUCED IN THE HEAR ING NO SUCH DETAILS WERE MENTIONED. WE FIND BEFORE CIT(A) THE ASSESSEE MADE A STATEMENT THAT IT HAD RECEIVED BACK ADVANCE OF RS.11 ,95,000/- FROM 4 PERSONS DETAILS OF WHICH ARE GIVEN IN THE PRECEDING PARAGRAPHS. WE FIND THE AO IN THE REMAND PROCEEDINGS RE CORDED THE STATEMENT OF THE ABOVE-MENTIONED 4 PERSONS AND CA ME TO THE CONCLUSION THAT THEY COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE IN RESPECT OF THE TRANSACTIONS BETWEEN THEM AND THE AS SESSEE. THEY COULD NOT GIVE ANY SPECIFIC DETAILS OF THE CASH RECEIVE D BY THEM FROM THE ASSESSEE AS ADVANCE IN LIEU OF SALE OF THEIR RESPECTIVE LANDS. ACCORDING TO THE AO IN THE REMAND P ROCEEDINGS THE 4 PERSONS COULD NOT GIVE THE SOURCE OF REPAYMENT OF THE ALLEGED ADVANCE TO THE ASSESSEE EXCEPT STATING THAT TH E CASH WAS REPAID OUT OF THEIR AGRICULTURAL INCOME. FURTHER, THEY DID N OT PRODUCE THE ORIGINAL SAUDA PAVATI AND BHARTA PAVATI AND THE DOCUMENTS ARE NEITHER NOTARISED NOR REGISTERED. 13. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESS EE THAT IN THE PRECEDING YEARS THE ADVANCES SHOWN AGAINST THE ABOVE PERSONS HAVE BEEN ACCEPTED BY THE REVENUE AUTHORITIES . THEREFORE, THE SAME COULD NOT HAVE BEEN DISBELIEVED DURING THIS YEAR. WE FIND SOME FORCE IN THE ABOVE ARGUMENTS OF THE LD COUNSEL FOR THE ASSESSEE. HOWEVER, THE ADVANCE GIVEN TO THE ABOVE PERSONS IN THE PRECEDING YEARS APPEARS TO HAVE NOT BE EN CONSIDERED BY THE LOWER AUTHORITIES. IT IS ALSO NOT UNDE RSTOOD AS TO WHY THE ASSESSEE DID NOT PRODUCE THE ORIGINAL SAUDA PAVATI AND BHARTA PAVATI DOCUMENTS BEFORE THE AO DESPITE SPECIFIC REQUISITION BY HIM. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE 7 ITA NO.279/PN/2015 ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE M ORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDEN CE TO THE SATISFACTION OF THE AO REGARDING THE INTRODUCTION OF CASH O F RS.11,85,000/-. THE AO SHALL DECIDE THE ISSUE AFRESH AS PE R FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29-04-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 29 TH APRIL, 2016. ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - I, NASHIK 4. 5. 6. THE CIT-I, NASHIK $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // TRUE COPY // // $ ' //TRUE /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE