Shri Girish Kumar Gaba, Khandwa V. THE ITO, Khandwa

ITA 280/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5857 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE; BHARAT JHAVAR
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 142(1); 69; 148

Judgement Text

GIRISH KUMAR GABA ITA NO. 280/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 280/IND/2016 A.Y.2009-10 GIRISH KUMAR GABA KHANDWA PAN ABTPG 7105Q ::: APPELLANT VS INCOME TAX OFFICER KHANDWA ::: RESPONDENT APPELLANT BY SHRI S.S.DESHPANDE & SHRI BHARAT JHAVAR RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 22.6.2016 DATE OF PRONOUNCEMENT 1 1 .7.2016 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 30.11.2015 OF THE LEARNED CIT(A)-II, INDO RE. 2. THE ONLY GROUND TAKEN BY THE ASSESSEE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADD ITION GIRISH KUMAR GABA ITA NO. 280/IND/2016 2 OF RS.18,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT U/S 69 OF T HE ACT. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSIN G OFFICER OBSERVED THAT THE ASSESSEE WAS HAVING A SAVING BANK ACCOUNT WITH AXIS BANK IN WHICH THERE WAS A DEPOSIT OF RS.20,90,070/- OUT OF WHICH AN AMOUNT OF RS.20,26,000/- WAS FOUND DEPOSITED ON 31.3.2009. THE ASSESSING OFFICER, THEREFORE, HELD THAT THE SAID AMOUN T WAS INVESTMENT/DEPOSIT IN THE BANK OUT OF UNEXPLAINED SOU RCE OF INCOME. ON APPEAL, THE LEARNED CIT(A) CONFIRMED TH E ACTION OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE ME, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALTHOUGH THE ASSESSEES TURNOVER WAS VER Y LESS BUT HE HAD TO RECOVER THE MONEY FROM MANY OF TH E DEBTORS AND ALSO THAT HE OWED MONEY OF THE CREDITORS AL SO. GIRISH KUMAR GABA ITA NO. 280/IND/2016 3 DURING THE YEAR, UNDER CONSIDERATION, THE ASSESSEE HAS RECOVERED MONEY FROM MANY OF THE DEBTORS AND DEPOSITE D THE CASH OUT OF THAT RECOVERED AMOUNT IN THE SAVINGS BAN K ACCOUNT WITH AXIS BANK. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THE FOLLOWING WRITTEN SUBMISSIONS :- APPELLANT HAS BEEN A REGULAR INCOME TAX ASSESSEE FOR LAST MORE THAN 20 YEARS. HE REGULARLY FILED HIS RETURN OF INCOME UP TO ASST YEAR 2007- 08. AFTER AY 2007-08 HIS TURNOVER SUDDENLY GOT DOW N SIGNIFICANTLY CONSEQUENT UPON WHICH, HIS TOTAL INCOME ALSO REMAI NED BELOW THE MAXIMUM AMOUNT NOT CHARGEABLE TO INCOME TAX. FOR T HE YEAR UNDER APPEAL ALSO, APPELLANTS TOTAL INCOME REMAINED BEL OW THE EXEMPTION LIMIT LIABLE FOR INCOME TAX AND HENCE HE DID NOT FILE HIS RETURN OF INCOME VOLUNTARILY U/S 139(1). LATER IN COMPLIANCE TO NOTICE U/S 148 OF THE I.T. ACT 1961, APPELLANT FILED HIS RETURN OF I NCOME ON 27/06/2014 SHOWING TOTAL INCOME OF RS. 1,11,440/- . (PB 1) ASST YEA R TURNOVER TOTAL INCOME (LOSS) EXEMPTI ON LIMIT 200 7-08 32,16,952 /- (3,28,539 /-) 1,00,000/ - 200 8-09 15,21,090 /- 76,461/- 1,10,000/ - 200 9-10 13,15,950 /- 1,11,440/ - 1,50,000/ - LD INCOME TAX OFFICER KHANDWA VIDE HIS NOTICE U/S 1 42(1) OF THE I.T.ACT 1961 DATED 16/04/2014, INTER ALIA ASKED APPELLANT TO GIVE THE DETAILS OF SOURCE AND EVIDENCE OF CASH DEPOSITS OF MORE THAN R S. 10.00 LAKH MADE BY THE APPELLANT IN HIS SAVING BANK ACCOUNT MAINTA INED WITH AXIS BANK KHANDWA. (PB 2-7 ) GIRISH KUMAR GABA ITA NO. 280/IND/2016 4 APPELLANT VIDE HIS REPLY DATED 27/06/2014 REPLIED THAT ALTHOUGH APPELLANTS TURNOVER WAS VERY LESS BUT HE HAD TO RE COVER THE MONEY FROM MANY OF THE DEBTORS AND ALSO THAT HE OWED MANY OF THE CREDITORS ALSO. DURING THE YEAR UNDER APPEAL, APPELLANT RECOVERED MONEY FROM MANY OF THE DEBTORS AND DEPOSITED THE CASH OUT OF THAT R ECOVERY FROM IN HIS NEWLY OPENED SAVING BANK ACCOUNT NO. 69901010000112 0 WITH AXIS BANK KHANDWA BRANCH. (PB 8-9) DISREGARDING THE FACT AND SUBMISSION MADE BY THE AP PELLANT, LD INCOME TAX OFFICER KHANDWA, ARBITRARILY ADDED THE ENTIRE CASH OF RS. 20,90,070/- DEPOSITED BY THE APPELLANT IN HIS SAVI NG ACCOUNT, MAINTAINED WITH AXIS BANK KHANDWA ALLEGING THE SAME AS UNEXPLAINED CASH CREDIT (U/S 69 ? OF THE INCOME TAX ACT 1961). THE LD ITO KHANDWA GAVE FOLLOWING REASONS (VIDE PARA 8 ON PAGE NO. 4 OF HIS ORDER ) TO JUSTIFY THE ADDITION MADE BY HIM, WHICH IS BEYOND LOGIC AND BASELESS: 1) EVEN IF, THE APPELLANTS INCOME FOR THE YEAR UNDER APPEAL WAS BELOW THE TAXABLE LIMIT, HE SHOULD HAVE FILED HIS R ETURN OF INCOME OR IF HE HAD STOPPED HIS BUSINESS ACTIVITIES APPELLANT SHOUL D HAVE INFORMED TO THE DEPARTMENT. 2) IF THE CASH, WHICH APPELLANT DEPOSITED IN HIS SAVI NG BANK ACCOUNT WITH AXIS BANK WAS RECOVERED BY THE APPELLANT FROM THE DEBTORS AS CLAIMED BY THE APPELLANT IN HIS WRITTEN SUBMISSION, APPELLANT SHOULD HAVE FILED THE LIST OF DEBTORS AND ALSO THEIR COPY OF ACCOUNTS IN THE BOOKS OF THE APPELLANT. HE ALSO MENTIONED THAT APPELLANT SHOULD HAVE FILED WITH EVIDENCE, THE DETAILS ABOUT WHEN DID APPELLANT REC OVER THE MONEY FROM THE DEBTORS AND WHAT WERE THE MODE OF RECOVERY. 3) APPELLANT DID NOT PRODUCE THE BOOKS, BILLS AND VOUC HERS FOR THE YEAR UNDER APPEAL AND ALSO FOR THE PREVIOUS YEARS F OR VERIFICATION, IN ABSENCE OF WHICH IT WAS NOT POSSIBLE FOR HIM TO VER IFY WHETHER THE SAID AMOUNT WAS RECOVERED FROM THE DEBTORS ONLY. 4) APPELLANT HAD TO PAY TO HIS CREDITORS ALSO THEN WHA T COME THAT INSTEAD OF PAYING THE CREDITORS, APPELLANT KEPT THE RECOVERY MADE BY HIM FROM HIS DEBTORS IN CASH AND DEPOSITED THE SAME AT THE END OF THE YEAR IN HIS SAVING BANK ACCOUNT. BASED ON THE ABOVE REASONS WHICH ARE BEYOND LOGI C, LD ITO KHANDWA REACHED TO THE CONCLUSION THAT APPELLANT DID NOT RE COVER ANY AMOUNT GIRISH KUMAR GABA ITA NO. 280/IND/2016 5 FROM HIS DEBTORS RATHER HE DEPOSITED THE CASH IN HI S SAVING BANK ACCOUNT FROM HIS ALLEGED INCOME FROM UNDISCLOSED S OURCES. FINALLY LD ITO KHANDWA WRONGLY ADDED THE ENTIRE DEPOSIT OF RS. 20,90,070/- INTO THE TOTAL INCOME OF THE APPELLANT TREATING THE SAME AS UNEXPLAINED CASH CREDIT (U/S 69? OF THE I.T.ACT 1961) AND MADE THE A SSESSMENT AT A HUGE AND ARBITRARY FIGURE OF RS. 22,01,510/- AS AGAINST THE INCOME OF RS. 1,11,440/- SHOWN BY THE APPELLANT. ENTIRE ADDITION OF RS. 20,90,070/- MADE BY THE LD I TO KHANDWA IS ARBITRARY AND NOT JUSTIFIED FOR THE REASON THAT N O WHERE IT IS MADE OBLIGATORY FOR AN ASSESSEE TO FILE HIS RETURN OF I NCOME EVEN IF INCOME IN THAT PARTICULAR YEAR IS BELOW THE EXEMPTED ( MAXIMU M INCOME NOT CHARGEABLE TO INCOME TAX) LIMIT AS PRESCRIBED UNDER THE I.T.ACT/RULES AS AGAINST THE VIEW EXPRESSED BY THE LD ITO IN HIS ASS ESSMENT ORDER. LD ITOS CONTENTION THAT, IF THAT DEPOSIT OF CASH W AS MADE OUT OF THE RECOVERY MADE FROM THE DEBTORS APPELLANT SHOULD HAV E FILED THE LIST OF DEBTORS AND ALSO THEIR COPY OF ACCOUNTS IN HIS BOOK S IS ALSO UNFOUNDED. LD ITO ISSUED ONLY ONE NOTICE U/S 142(1) (PB2-3) IN WHICH HE NEVER DEMANDED ANY SUCH LIST TO BE FILED BY THE APPELLANT AND ALSO ABOUT WHEN DID HE RECOVER THE MONEY FROM THE DEBTORS. APPELLAN T MAINTAINS REGULAR BOOKS OF ACCOUNTS AND ON THE BASIS OF THOSE BOOKS O NLY HE CALCULATED AND ELECTRONICALLY/ E- FILED HIS RETURN OF INCOME IN CO MPLIANCE TO NOTICE U/S 148 OF THE I.T. ACT 1961 (PB 10-18 ). IN THIS ELECTRONICALLY FILED E-RETURN EVERY ASSESSEE HAS TO GIVE FIGURES OF EVERY ITEM OF HIS TRADING/PROFIT & LOSS ACCOUNT AND ALSO OF THE BALANCE SHEET WHICH A PPELLANT ALSO FILED. IF LD ITO HAD ANY DOUBT HE SHOULD HAVE ASKED APPELL ANT TO FILE THE DETAILS OF DEBTORS AS GIVEN IN THE RETURN OF INCOME , BUT HE DID NOT DO SO AND PASSED THE ORDER IN A HURRY WITHIN 3 DAYS (ON 3 0/06/2014) FROM THE DATE WHEN APPELLANT FILED HIS RETURN OF INCOME I.E . ON 27/06/2014. AFTER FILING HIS RETURN OF INCOME, APPELLANT WAS NE VER GIVEN ANY OPPORTUNITY TO PRODUCE HIS BOOKS OF ACCOUNTS WHICH APPELLANT WOULD HAVE PRODUCED TO MAKE ANY CLARIFICATION IF AT ALL A NY REQUIRED BY THE LD ITO. THUS LD ITO DID NOT GIVE ANY REASONABLE OPPORT UNITY TO EXPLAIN THE FACTS RATHER MADE AN ARBITRARY ADDITION OF RS. 20,9 0.070/- WHICH IS BEYOND LOGIC AND NEEDS TO BE QUASHED. APPELLANT BORROWED LOAN FROM BANK OF INDIA KHANDW A (OUTSTANDING AS ON 31/03/09 RS. 23,62,328/-) (PB 19) . APPELLANT WAS DECLARED GIRISH KUMAR GABA ITA NO. 280/IND/2016 6 DEFAULTER IN PAYING INTEREST/ INSTALLMENT OF THAT LOAN AND THUS HIS ACCOUNT BECAME NPA (NON PERFORMING ASSETS ) FOR T HE BANK FOR WHICH BANK ISSUED NOTICES TO ATTACH AND SALE HIS HOUSE P ROPERTY WHICH HE HAD MORTGAGED WITH THE BANK AS A SECURITY TO ADJUST T HE LOAN OUTSTANDING AGAINST THE APPELLANT. APPELLANT WAS GIVEN AN OPPOR TUNITY BY THE BANK TO SETTLE HIS LOAN ACCOUNT BY DEPOSITING A SUM OF RS. 25.00 LAKH. HE WAS ASKED TO DEPOSIT RS. 3.00 LAKH BEFORE 28/09/08 AND REST OF THE AMOUNT OF RS. 22 LAKH WAS TO BE DEPOSITED BEFORE 18/12/08. A PPELLANT DEPOSITED THE INITIAL AMOUNT OF RS. 3.00 LAKH ON 27/09/08 AND FOR REST OF THE 22 LAKH HE WAS TRYING TO RECOVER FROM HIS DEBTORS .(PB 20-26) . APPELLANT DID NOT WANT TO DEPOSIT THE CASH IN INSTALLMENT IN HIS BANK OF INDIA LOAN ACCOUNT AS IF HE COULD NOT FULFILL THE CONDITION BE FORE THE DUE DATE HE WOULD LOOSE THAT MONEY TOO AND HENCE HE DEPOSITED T HE SAME BY OPENING ONE SAVING ACCOUNT WITH AXIX BANK IN WHICH HE DEPOS ITED THIS SUM OF RS 20,90,070/- IN CASH. LD ITO KHANDWA DID NOT ALLOW ANY OPPORTUNITY TO APPELLANT TO EXPLAIN HIS CASE AND MADE THE ARBITRAR Y ADDITION WHICH IS NOT JUSTIFIED. IN THE LIGHT OF THE ABOVE IT IS THEREFORE ONCE AGAI N REQUESTED THAT ENTIRE ADDITION OF RS. 20,90,070/- BE KINDLY ORDER TO BE D ELETED AND APPEAL BE KINDLY ALLOWED. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. AFTER HEARING BOTH THE SIDES, I AM OF THE VIEW THAT IN THE INTEREST OF JUSTICE AND EQUITY IT WOULD BE APPROPR IATE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REST ORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. I, THE REFORE, DIRECT THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO AF TER GIRISH KUMAR GABA ITA NO. 280/IND/2016 7 CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE AS ALSO THE BOOKS OF ACCOUNTS, AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLO WED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 11 TH JULY, 2016 SD/- (D.T. GARASIA) JUDICIAL MEMBER 11 TH JULY, 2016 DN/- GIRISH KUMAR GABA ITA NO. 280/IND/2016 8