The ITO, Ward-5(1), Baroda V. Shri Kamleshbhai M.Nagar, Baroda

ITA 280/AHD/2009

• Counselvise Citation: 28020514 RSA 2009
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 29-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: NONEWRITTEN SUBMISSION
• Keywords: Unexplained cash credit
• Section: 44AD; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. K. GARODIA AM) ITA NO.280/AHD/2009 A. Y.: 2005-06 THE INCOME TAX OFFICER, WARD 5 (1), RACE COURSE CIRCLE, BARODA VS SH. KAMLESHBHAI M. NAGAR, 22, JANKALYAN SOCIETY, AJWA ROAD, BARODA PA NO. ABHPN 4253C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI O. P. BATHEJA, DR RESPONDENT BY NONE(WRITTEN SUBMISSION) DATE OF HEARING: 20-09-2011 DATE OF PRONOUNCEMENT: 23-09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, BARODA DATED 27-11-2008, FOR ASSESSMENT YEAR 2005-06, ON THE FOL LOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) HAS GRAVELY ERRED IN DELETING THE AD DITION OF RS.16,50,890/- BEING THE CREDIT ENTRIES IN BANK ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATIN G THE FACT THAT ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT WAS MADE AS THE ASSESSEE COULD NOT PROVE ITS GENUINENESS WITH EVIDENCE AND THE AUTHENTICATED BOO KS OF ACCOUNTS OF CREDITOR. ITA NO.280/AHD/2009 ITO, WARD 5(1), BARODA VS SHRI KAMLESHBHAI M. NAGAR 2 2. THE AO MADE ADDITION OF RS.16,50,890/- BEING GR OSS DEPOSIT IN BANK TREATING AS UNEXPLAINED CASH CREDIT. THE AO DU RING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON VERIFICATION OF CO PIES OF THE BANK STATEMENT MADE AN ADDITION OF ALL THE CREDIT ENTRIE S IN THE BANK STATEMENT TREATING THE SAME AS UNEXPLAINED CASH CRE DITS. FURTHER, THE AO WROTE A LETTER FOR CONFIRMATION OF TDS AND PAYME NTS MADE TO GARRISON ENGINEERS AND RELIED UPON THE REPLY RECEIV ED FROM GARRISON ENGINEER (I) (AF) FOR MAKING THE ADDITION. THE AO M ADE ADDITION FROM BOTH THE ACCOUNTS VIZ. ACCOUNT NO.266 AND 293 WITH VIJAYA BANK STANDING IN THE NAMES OF M/S. ADITYA CONSTRUCTION A ND M/S. RACHNA CONSTRUCTION OF WHICH THE ASSESSEE IS PROPRIETOR. I T WAS SUBMITTED BEFORE THE LEARNED CIT(A) BY THE LEARNED COUNSEL F OR THE ASSESSEE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE B USINESS OF CONSTRUCTION ACTIVITIES AND HAS FILED ITS RETURN OF INCOME U/S 44AD OF THE IT ACT ON 07-12-2005 DECLARING A TOTAL INCOME O F RS.1,29,000/-. THE ASSESSEE ATTENDED WITH DETAILS FROM TIME TO TIM E AND OFFERED EXPLANATIONS. SHOW CAUSE NOTICE ISSUED BY THE AO WA S ALSO COMPLIED WITH AND THE DETAILS AS CALLED FOR WERE FU RNISHED BY THE ASSESSEE. HOWEVER, THE AO FINALIZED THE ASSESSMENT U/S 144 OF THE IT ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT AS REGARDS ADDITION OF RS.16,50,890/- ON ACCOUNT OF UN EXPLAINED CASH CREDIT BY TREATING THE ENTIRE AMOUNT OF DEPOSITS IN THE BANK ACCOUNT OF M/S. ADITYA CONSTRUCTION AND M/S. RACHNA CONSTRUCTI ON WAS NOT CORRECT IN AS MUCH AS DETAILED RECONCILIATION OF GR OSS RECEIPT OF M/S. ADITYA CONSTRUCTION AS WELL AS M/S. RACHNA CONSTRUC TION WERE PRODUCED BEFORE THE AO AT THE TIME OF ASSESSMENT PR OCEEDINGS AND THAT COPIES OF THE SAME WERE ALSO ENCLOSED THEREWIT H. THE AO ITA NO.280/AHD/2009 ITO, WARD 5(1), BARODA VS SHRI KAMLESHBHAI M. NAGAR 3 MISUNDERSTOOD THE FACTS AND PROCEEDED TO FINALIZE T HE ASSESSMENT PROCEEDING BY MAKING CERTAIN ADDITIONS WHICH WAS NO T WARRANTED AND BAD IN LAW. THE LEARNED COUNSEL FOR THE ASSESSEE AL SO ARGUED THAT AS REGARDS THE AMOUNT OF CREDITS IN BANK ACCOUNT NO.26 6 AND 293 WITH VIJAYA BANK IN THE NAMES OF M/S. RACHNA CONSTRUCTIO N AND M/S. ADITYA CONSTRUCTION, A STATEMENT SHOWING RECONCILIA TION OF CREDITS WITH TDS CERTIFICATES WITH AFORESAID ACCOUNTS AS WE LL AS CHEQUE DISCOUNT ACCOUNT WITH SHROFF HAVE ALSO BEEN PRODUCE D AND THAT ALL THE CREDIT ENTRIES WERE EXPLAINABLE AND COULD BE RECONC ILED. FURTHER, THE ASSESSEE PROCURED WORKS OF MILITARY AS WELL AS OF A IR FORCE AND THE TDS CERTIFICATES WERE FILED ALONG WITH THE RETURN O F INCOME WHICH REVEALS THAT THE SAME WERE RECEIVED FROM GARRISONS ENGINEERS (MILITARY) AND GARRISONS ENGINEERS (AIR FORCE) AND THAT THE DIFFERENCE BETWEEN THE AMOUNT OF RECEIPTS AS PER TDS CERTIFICA TES AND ACTUAL DEPOSITS IN BANK ACCOUNT WAS ON ACCOUNT OF SECURITY DEPOSITS RETAINED IN EARLIER YEAR RELEASED BY M/S. GARRISON S ENGINEERS. 3. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE DELETED THE ADDITION. HIS FINDINGS IN PARA 5.3 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER: 5.3 I HAVE GONE THROUGH THE FACTS OF THE CASE, ARGUMENTS OF THE APPELLANT AS ALSO THE OBSERVATION OF THE AO. IT IS SEEN THAT THE CREDIT ENTRIES ARE EXPLAINA BLE AND CAN BE RECONCILED. FURTHER THE APPELLANT UNDERTAKES WORKS OF MILITARY AS WELL AS AIR FORCE & THE TDS CERTIFICATES FILED ALONG-WITH THE RETURN OF INCOME REVEALED THAT THE SAME ARE RECEIVED FROM GARRISONS (MILITARY ) & GARRISONS (AIR FORCE) BUT THE AO HAS ONLY CALLED FO R CONFIRMATION FROM GARRISONS (AIR FORCE). FURTHER ON ITA NO.280/AHD/2009 ITO, WARD 5(1), BARODA VS SHRI KAMLESHBHAI M. NAGAR 4 VERIFICATION OF THE TDS CERTIFICATES IT APPEARS THA T CERTAIN ENTRIES CAN DIRECTLY BE VERIFIED AND RECONCILED WIT H THE BANK STATEMENT AND THE OTHERS FROM THE CHEQUE DISCO UNT STATEMENT ISSUED BY THE SHROFF. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THE AO IS DIRECTED TO DE LETE THE ADDITION MADE ON THIS COUNT. THIS GROUND OF APP EAL IS ALLOWED. 4. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND SUBMITTED THAT THE LEARNED CIT(A) PASSED NON-SPEAKING ORDER A ND NO REPLY WAS FILED BEFORE THE AO BY THE ASSESSEE TO EXPLAIN THE ABOVE DISCREPANCY. NONE APPEARED ON BEHALF OF THE ASSESSE E DESPITE SERVICE OF NOTICE. A/D CARD DULY SERVED UPON THE AS SESSEE IS AVAILABLE ON RECORD. THE ASSESSEE IS, THEREFORE, PR OCEEDED EX-PARTE. HOWEVER, WRITTEN SUBMISSION FILED BY THE ASSESSEE I S TAKEN INTO CONSIDERATION. 5. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE FINDINGS OF THE LEARNED CIT(A), WE DO NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL OF THE REVENUE. THE ASSESSEE SPEC IFICALLY EXPLAINED BEFORE THE LEARNED CIT(A) THAT DETAILED R ECONCILIATION OF GROSS RECEIPT WAS FILED BEFORE THE AO AT THE TIME O F ASSESSMENT PROCEEDINGS. IT WAS ALSO EXPLAINED THAT THE ASSESSE E PROCURED WORK OF MILITARY AS WELL AS AIR FORCE AND TDS CERTIFICAT ES HAVE BEEN FILED ALONG WITH RETURN OF INCOME TO SHOW THAT SAME HAVE BEEN RECEIVED FROM GARRISONS ENGINEERS (MILITARY) AND GARRISON EN GINEERS (AIR FORCE). THE LEARNED CIT(A) FOUND THAT DESPITE THE A SSESSEE WAS GETTING WORK FROM TWO CONCERNS AND TDS IS ALSO FILE D FOR TWO CONCERNS ALONG WITH RETURN OF INCOME, THE AO CALLED FOR CONFIRMATION FROM GARRISON ENGINEERS (AIR FORCE) ONLY. THE LEARN ED CIT(A) ON ITA NO.280/AHD/2009 ITO, WARD 5(1), BARODA VS SHRI KAMLESHBHAI M. NAGAR 5 PROPER VERIFICATION OF THE TDS CERTIFICATES AND BAN K STATEMENT CORRECTLY FOUND THAT THERE IS NO DIFFERENCE IN THE SAME. THE ORDER OF THE LEARNED CIT(A) IS THUS NOT NON-SPEAKING AS IS A RGUED BY THE LEARNED DR. THE LEARNED CIT(A) FOUND THAT SINCE THE CERTIFICATES HAVE BEEN FILED ALONG WITH RETURN OF INCOME, THERE WAS N O NECESSITY FOR THE AO TO ASK REPLY FROM THE ASSESSEE IN THIS REGARD. S INCE, FACTS HAVE BEEN VERIFIED BY THE LEARNED CIT(A) AND NO MATERIAL OR EVIDENCE IS PRODUCED BEFORE US BY THE LEARNED DR TO REBUT THE F INDINGS OF THE LEARNED CIT(A), WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). THERE IS NO INFIRMITY POINTED OUT IN THE ORDER OF THE LEARNED CIT(A). WE CONFIRM HIS ORDER A ND DISMISS BOTH THE GROUNDS OF APPEAL OF THE REVENUE. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- ITA NO.280/AHD/2009 ITO, WARD 5(1), BARODA VS SHRI KAMLESHBHAI M. NAGAR 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD