The ITO, Ward-9(2), Surat V. Shri Hiteshbhai Motibhai Patel, Surat

ITA 2805/AHD/2009

• Counselvise Citation: 280520514 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 14-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained cash credit; Unexplained investment; Peak credit; Additional evidence; Corroborative evidences; Set aside
• Section: 133(6); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 2805/ AHD/2009 (ASSESSMENT YEAR 2006-07) ITO, WARD 9(2), SURAT VS. SHRI HITESHBHAI MOTIBHAI PATEL, 2D, ALOKIK SUMUL DAIRY RAOD, SURAT PAN/GIR NO. : AAFPP2816D (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI VINOD TANWANI, SR. DR RESPONDENT BY: SHRI RASESH SHAH, ADV. DATE OF HEARING: 28.02.2012 DATE OF PRONOUNCEMENT: 28.03.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF LD. CIT(A) V, SURAT DATED 09.07.2009 FOR THE ASSESSMENT YEAR 2 006-07. 2. THE GROUND RAISED BY THE REVENUE ARE AS UNDER: [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE ASSES SEE'S BANK ACCOUNT WITH HDFC BANK LTD. IS AN ACCOUNTED BANK AC COUNT,, WITHOUT APPRECIATING THE MATERIAL EVIDENCES BROUGHT IN BY THE A.O. TO SHOW THAT THE ASSESSEE FAILED TO DISCLOSE THE AC COUNT PARTICULARS TO THE DEPARTMENT AND ALSO PROVE IT TO BE THE SAME ONE AS MENTIONED BY HIM IN THE BALANCE SHEET DURING THE CO URSE OF ASSESSMENT BY FILING SUPPORTING EVIDENCES. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW AND WITHOUT PREJUDICE TO THE GROUND OF APPEAL MENTI ONED ABOVE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 10,98,936/- I.T.A.NO. 2805 /AHD/2009 2 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE PEA K UNEXPLAINED CREDITS IN THE SAID BANK ACCOUNT WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST ON H IM TO EXPLAIN THE CREDIT ENTRIES CONTAINED THEREIN. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD.CIT (A) HAS ERRED IN DELETING THE ADDITION O F RS. 2,51,102/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED PROFIT EARNED THROUGH UNACCOUNTED BANK ACCOUNT. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 3. REGARDING GROUND NO.1, BRIEF FACTS TILL THE ASSE SSMENT STAGE ARE NOTED BY LD. CIT(A) ON PAGES 1 & 2 OF HIS ORDER AND THE RELEVANT PORTION IS REPRODUCED BELOW: THE BRIEF FACTS RELATING TO THE ISSUE IS THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER ISSUED VAR IOUS NOTICES, AS CAN BE SEEN FROM THE DETAILS GIVEN AT PAGE NO. 2 OF THE ASSESSMENT ORDER. HOWEVER, IT HAD BEEN OBSERVED BY ASSESSING OFFICER THAT ASSESSEE HAS NOT COMPLIED WITH SAID NO TICES. HE FURTHER MENTIONED THAT INQUIRES WERE MADE WITH SUTEX CO-OPE RATIVE BANK LTD. & HDFC BANK LTD., AS NAME OF SAID BANKS WERE A PPEARING IN THE BALANCE SHEET OF ASSESSEE. HOWEVER, THE BANKS I NFORMED THAT THEY DO NOT HAVE ANY BANK ACCOUNT IN THE NAME OF AS SESSEE. HE FURTHER OBSERVED IN PARA NO. 3.2 OF THE ORDER THAT NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO M/S. INDIA INFOLINE LTD., MUMBAI CALLING FOR THE DETAILS OF THE BANK ACCOUNT, IN RESPONSE TO THE SAME THE DETAILS RELATING TO THE BANK ACCOUNT OF .ASSESSEE W AS FURNISHED BY THEM ON 29.12.08. THEREAFTER, ASSESSING OFFICER OBT AINED COPY OF BANK STATEMENT FROM HDFC BANK LTD. ON CAREFUL ANALY SIS OF SAID BANK STATEMENT HE STATED THAT ASSESSEE MADE INVESTM ENT OF RS. 3,96 LAKHS IN PURCHASE OF SHARES OF M/S. INDIA INFOLINE LTD. HE CONCLUDED THAT THE ABOVE BANK ACCOUNT REPRESENTS UN ACCOUNTED BANK ACCOUNT OF ASSESSEE. HE FURTHER STATED THAT AL THOUGH NUMBER OF OPPORTUNITIES WAS GIVEN TO THE ASSESSEE, HE DID NOT TURN UP. SUMMONS WAS ALSO ISSUED ON ASSESSEE, BUT THE SAME W AS SERVED ON HIS WIFE, AS ASSESSEE WAS NOT AVAILABLE AT HIS RESI DENCE AT THE TIME OF VISIT OF INSPECTOR. HE THEREAFTER OBSERVED THAT ASSESSEE HAS REMAINED SILENT, SO THAT DEPARTMENT CANNOT LOOK FOR HIS UNACCOUNTED INVESTMENT. ON THE BASIS OF THESE OBSER VATIONS HE CONCLUDED THAT BANK ACCOUNT OF HDFC, AS OBTAINED IN THE COURSE OF I.T.A.NO. 2805 /AHD/2009 3 ASSESSMENT PROCEEDING REPRESENTS UNACCOUNTED BANK A CCOUNT OF ASSESSEE. HE STATED THAT TOTAL CREDITS IN THE BANK ACCOUNT IS RS. 62,77,540/- & TOTAL DEBITS ARE OF RS. 62,29,184/-. HE THEREFORE MADE ADDITIONS OF RS. 10,98,936/- IN RESPECT OF THE PEAK BALANCE APPEARING IN SAID BANK ACCOUNT ON 24.05.05, AS UNEX PLAINED INVESTMENT U/S 69 OF THE ACT. 4. REGARDING 2 ND GROUND, THE FACTS ARE THAT THE A.O. MADE FURTHER ADDITION OF RS.2,51,102/- BEING 4% OF TOTAL CREDIT OF RS.62,77,540/- IN HDFC BANK ACCOUNT BY HOLDING THAT THIS IS THE TURNO VER OF THE ASSESSEE IN SHARE BUSINESS. ADDITION WAS MADE BY THE A.O. BY A PPLYING 4% PROFIT RATE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED BOTH THE M ATTERS IN APPEAL BEFORE LD. CIT(A). BOTH THE ADDITIONS WERE DELETED BY LD. CIT(A) AND NOW, THE REVENUE IS IN APPEAL BEFORE US. 6. IT IS SUBMITTED BY THE LD. D.R. THAT NO COMPLIAN CE WAS MADE BY THE ASSESSEE BEFORE THE A.O. AND EVEN THE PRIMARY ONUS WAS NOT DISCHARGED BY THE ASSESSEE AND THEREFORE, THERE IS VIOLATION O F RULE 46A BY LD. CIT(A). HE ALSO SUBMITTED THAT NO BASIS IS INDICAT ED BY LD. CIT(A) TO HOLD THAT BANK ACCOUNT IS DISCLOSED BANK ACCOUNT. HE FURTHER SUBMITTED THAT EITHER ORDER OF LD. CIT(A) SHOULD BE REVERSED AND THAT OF THE A.O. SHOULD BE RESTORED OR THE ISSUE MAY BE RESTORED BAC K TO THE FILE OF THE A.O. FOR A FRESH DECISION. 7. IN REPLY, IT WAS SUBMITTED BY LD. A.R. THAT THER E IS NO VIOLATION OF RULE 46A BECAUSE NO ADDITIONAL EVIDENCE WAS FILED B EFORE LD. CIT(A) EXCEPT AN AFFIDAVIT ABOUT LOSS OF BOOKS. HE FURTHE R SUBMITTED THAT ON PAGE 13 OF THE PAPER BOOK IS THE BALANCE SHEET AS ON 31. 03.2006, WHICH SHOWS THAT BALANCE WITH HDFC WAS OF RS.37,260.83. HE FUR THER SUBMITTED THAT COPY OF THE BANK STATEMENT WITH HDFC BANK IS AVAILA BLE ON PAGE 9 OF THE PAPER BOOK AS PER WHICH, THE BALANCE WITH BANK AS O N 31.03.2006 IS I.T.A.NO. 2805 /AHD/2009 4 RS.84,395.27. HE COULD NOT FILE A BANK RECONCILIAT ION STATEMENT ALSO TO SHOW THAT THE BANK ACCOUNT WITH HDFC BANK IS TALLYI NG WITH THE BALANCE DULY APPEARING IN THE BALANCE SHEET O THE ASSESSEE WHICH WAS FILED ALONG WITH THE RETURN OF INCOME. BUT HE SUBMITTED THAT ON PAGE 20 OF THE PAPER BOOK IS THE BALANCE SHEET OF THE ASSESSEE AS ON 31. 03.2005 AND IN THAT ALSO, THE BANK ACCOUNT WITH HDFC BANK IS APPEARING WITH THE BALANCE OF RS.37,890.86. HE DREW OUR ATTENTION TO PAGE 6 OF T HE PAPER BOOK WHICH CONTAINS BANK STATEMENT FORM THE MONTH OF APRIL 200 5 TO JULY 2005. HE POINTED OUT THAT THE OPENING BALANCE AT BANK AS ON 01.04.2005 IS RS.37,890.86, WHICH IS TALLYING WITH THE BALANCE SH EET OF THE ASSESSEE AS ON 31.03.2005 AS APPEARING ON PAGE 29 OF THE PAPER BOOK. HE STRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT THE 1 ST ISSUE HAD BEEN DECIDED BY LD. CIT(A) ON THIS BASIS THAT IT IS CLEARLY EVIDENT ON PERUSAL OF VARIOUS EVIDENCES WHI CH ARE ON RECORD OF THE A.O. THAT THE ASSESSEE WAS HAVING ONLY SHARE BROKER AGE INCOME IN THE PAST AND IN THE PRESENT YEAR ALSO AND, THEREFORE, T HERE IS NO JUSTIFICATION IN THE ACTION OF THE A.O. IN MAKING ADDITION OF THE PE AK BALANCE ON THE GROUND OF HDFC BANK ACCOUNT IS REPRESENTING UNDISCL OSED BANK ACCOUNT OF THE ASSESSEE. WE HAVE ALSO NOTED THAT THE BALAN CE WITH HDFC BANK IS DULY DECLARED BY THE ASSESSEE IN THE BALANCE SHEET AS ON 31.03.2005 FILED ALONG WITH THE RESPECTIVE RETURN OF INCOME. THE BA LANCE SO SHOWN IN THE BALANCE SHEET IS TALLYING WITH THE BALANCE APPEARIN G IN THE BANK STATEMENT OF HDFC BANK. THIS CLEARLY ESTABLISHES THAT THE BA NK ACCOUNT OF THE ASSESSEE WITH HDFC BANK IS DISCLOSED BANK ACCOUNT A ND, THEREFORE, NO ADDITION CAN BE MADE IN RESPECT OF THE BALANCE WITH THE BANK UNLESS THE A.O. ESTABLISHES THAT ANY CREDIT IN SUCH BANK ACCOU NT IS UNEXPLAINED I.T.A.NO. 2805 /AHD/2009 5 CREDIT. SINCE, THIS IS NOT DONE BY THE A.O., NO IN TERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). THE 2 ND ASPECT IS CONSEQUENTIAL BECAUSE IF THE BANK ACCOUNT IS A DISCLOSED BANK ACCOUNT, NO EXTRA INCOME CAN BE ASSESSED BY APPLYING ANY PERCENTAGE TO THE TURNOVER IN THE SAID BANK ACCOUNT. THEREFORE, ON THIS ASPECT ALSO, NO INTERF ERENCE IS CALLED FOR IN THE ORDER OF LD . CIT(A). 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 22/3 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26/3.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 28/3 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.28/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28/3/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER.