UMA MANDAL, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 282/JPR/2023

AI Insights

The case involves Uma Mandal, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the Income Tax Officer's (ITO) assessment of her income for the assessment year 2011-12. The ITO had reopened her case under section 147 read with section 143(3) of the Income Tax Act, following information that she had deposited a significant amount of cash in her bank account during the financial year 2010-11 without filing a return of income. The ITO assessed her income based on a 5% profit margin applied to the total deposits, treating it as business income. The CIT(A) upheld this assessment, leading to the present appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132361 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-08-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Agreed addition; Competent authority
• Section: 147; 148; 144; 142(1); 133(6); 143(2); 139(1)

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 282/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2011-12 Uma Mandal B 8, Marwa House Opposite Singhdwar, New Colony Jaipur cuke Vs. Income Tax Officer, Ward-5(2), Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: APSPM 2419 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Smt Monisha Chaudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 13/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 21/09/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 03/03/2023 [here in after referred to as ld. CIT(A)/(NFAC) ] for assessment year 2011-12 which in turn arise from the order dated 04.12.2018 passed under section 147 r.w.s 143(3) of the Income Tax Act, by the ITO, Ward 5 (2), Jaipur. 2. The assessee has marched this appeal on the following grounds:- 2 ITA No. 283/JP/2023 Uma Mandal vs. ITO “1. On the facts and circumstances of the case, the ld. CIT(Appeals) grossly erred in law and facts by approving the action of the Ld. AO of assessing the income of the assessee at Rs. 497652.00 rejecting the claim of the assessee that he earned only commission income at the rate of 0.25 percent and treating 5 percent of the deposits in her bank account as her income. It is hereby thus prayed for deleting the said additions. 2. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in law and facts by approving the action of Ld. AO of reopening the case of the assessee without assuming proper jurisdiction under the act. It is hereby thus prayed for quashing the notice under Section 148 as well as entire proceedings in pursuance thereof. 3. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in law and facts by approving the action of the Ld. A.O of holding that the assessee was running any business involving receipts of Rs. 9953036 ignoring the documentary evidence submitted by the assessee and even not rebutting then by way of a speaking order. This is most arbitary, unjust, untenable and bad in fact and in law and in the altenative excessive. It is hereby thus prayed for deleting the additions thus made. 4. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in law and facts by approving the action of the Ld. A.O of making the additions of Rs.472769.00 by totally relying on preceding A.Os order without appreciating the Individual facts of the case. Thus the order so passed is a result of borrowed satisfaction and without independent application of mind. It is thus prayed for deleting the said additions. 5. The appellant hereby craves leave to add, alter. amend or substitue one or more grounds of appeal as and when necessary. 3. Succinctly, the fact as culled out from the records is that in this case, an information was in possession that assessee has deposited at Rs. 4,50,000/- in cash in her account with the Urban Co-operative Bank Ltd. during the F.Y 2010-11, but no return of income was filed for A.Y 2011-12. Hence, notice u/s 148 was issued on 26.03.2018 after recording reasons 3 ITA No. 283/JP/2023 Uma Mandal vs. ITO and obtaining necessary approval from the competent authority which was served upon assessee through post. The assessee has not complied. Thereafter, notice u/s 142(1) was issued on 25.07.2018. The said notice was served on 30.7.2018. But assessee has not complied. Thereafter, a show cause letter u/s 144 was issued on 9.11.2018. The said show cause was served on 9.11.2018. 3.1 In compliance thereto, assessee filed return of income on 27.11.2018 declaring total income of Rs. 24,883 under the head ‘Business Income’ as commission income. Notice u/s 142(1), 143(2) and questionnaire were issued on 29.11.2018. A copy of reasons also supplied. 3.2 During the course of assessment proceedings, a notice u/s 133(6) was issued to bank for providing the bank statement, KYC form. In response thereto, the bank has filed copy of current bank account (No. 1120) statement with Fingrowth Co-operative Bank Ltd., Johari Bazar for the year under consideration alongwith KYC documents, a copy of VAT registration certificate dtd. 05.05.2008 with TIN 08481612574 in the name of M/s Jaipur Vision Prop. Smt. Uma Mandal was also attached. On perusal of this bank account statement shows that assessee has made total 4 ITA No. 283/JP/2023 Uma Mandal vs. ITO deposits/credits of Rs. 99,53,036/- including cash of Rs. 4,50,000/- on 16.03.2011 and Rs. 40,000 on 02.04.2010. Other credits are through cheques or clearing. The amount deposited is immediately withdrawn by cash/clearing either on same day or in couple of days leaving negligible balance. The assessee was asked through notice u/s 142(1) dated 29.11.2018 to furnish immediate source of cash deposit appearing in the bank account. Also asked to furnish complete particulars i.e. name & address of persons from credits were received in the form of cheques. In response thereto, the AR of the assessee has filed the same reply vide letter dated 30.11.2018. The ld. AO noted that the reply of the assessee is not acceptable due to the following reason:- a) The assessee's own case for AY 2010-11 was completed u/s 147/143(3) on 28.12.2017 wherein the then AO has made detailed discussion of modus-operendi of assessee's business and also made verification by way of recording statement of third party. After examination of details, the then AO has concluded that there was some business activities through the impugned account with the Fingrowth Co-operative Bank and held that deposits made by the assessee in bank account was treated as sales/turnover and estimated the net profit @ 5%. The ire AO also initiated the penalty u/s 271A & 2718 for non maintains of books of accounts and not get audited. b) Assessee has provided an ample opportunity to prove or furnish corroborative evidence in support of his contention, but he has failed to furnish the same. He has simply stated that assessee's bank account was utilized by someone. c) In this regard, assessee is required to lodge FIR with police authority but he has failed to do so. This shows that assessee is 5 ITA No. 283/JP/2023 Uma Mandal vs. ITO trying to substantiate his version without any corroborative evidence and assessee. In view of past history, the ld. AO considered it appropriate to apply net profit @ 5% on total deposits appearing in the bank account of Rs.99,53,036/- Accordingly, net profit works out to Rs.4,97,652/- and treated the same as concealed income earned from business. 4. Aggrieved from the order of the ld. AO. The assessee has preferred an appeal before ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC recorded in para 4 of his order and the same is reproduced herein below. “4. CIT's decision: All the grounds of appeal are clubbed together and decided together for the sake of convenience. The appellant is a proprietor of M/s. Jaipur Vision and the concern was engaged in issue of bogus bills to different parties on commission basis. It was submitted that the assessee charged 0.25% commission for this accommodation entries and disclosed the said commission in the return of income filed in response to notice u/s 148. As per the assessment order, the AO assessed the net profit of 5% at Rs.4,97,652/- and the profit was treated as assessee's income from business. During the appellate proceedings, the appellant submitted written submission wherein, it is submitted that the AO has wrongly made addition and as an alternative plea, stated that net profit at the rate of 0.5% may be applied. As per written submission, the appellant has submitted that the husband of the assessee in anticipation of some work and commission allowed one Mr.Sitaram Khandelwal to use her account. This account was opened by that person only taking assessee with him to bank. The assessee intimated the department about 6 ITA No. 283/JP/2023 Uma Mandal vs. ITO the details of said persons that were known to her but she was not aware of the present day whereabouts of said person. Further, the assessee was completely unaware and ignorant about the quantum and nature of transactions that were routed out through her account. Further, the appellant has also relied upon certain judicial decisions. I have perused the findings of the AO as per assessment order as well as written submissions filed by the appellant. It is seen that as per letter dated 30-11- 2018 submitted before the AO, the appellant herself has stated that entire credits were not treated as income of the appellant and 5% of the profit was estimated for AY 2010-11. As an alternative submission, it was stated that the appellant earned only 0.25% commission. Therefore, the reply dated 30-11-2018 of the appellant suggests that the addition at the rate of 5% itself is an agreed addition. If that is the case, it is not understood as to why the appellant is agitating the issue in appeal. The judicial decisions relied upon by the appellant are also different and distinguishable. The AO has rightly computed the net profit at the rate of 5% as has been done in the assessment year 2010-11. After considering all the facts and circumstances of the case under consideration, I am of the considered opinion that the AO has rightly computed the net profit at the rate of 5% of Rs.4,97,652/-. Therefore, the addition of Rs.4,97,652/- is confirmed. Accordingly, the grounds of appeal are dismissed.” 5. As the assessee did not find relief from the appeal so filed before the ld. CIT(A), the assessee prefer the present appeal on the grounds as set in para 2 above. In support of the grounds so raised by the assessee, neither she appeared in response to the seven opportunities granted nor filed any written submission. Therefore, bench feels that the assessee has nothing to say in the matter and the matter is decided based on the merits of the case and material available on record. 7 ITA No. 283/JP/2023 Uma Mandal vs. ITO 6. Per contra, the ld. DR relied upon the order of the lower authorities and submitted that the based on the detailed finding of the ld. CIT(A) and since the same is not controverted by filling any submission in the matter the appeal filed by the assessee is required to be dismissed. 7. We have perused the arguments of the assessee made before the lower authorities, gone through the orders of the lower authorities and heard the ld. DR representing the revenue. The bench noted that the assessee has deposited cash into the bank account and also made a turnover aggregating to Rs. 99,53,036/-, even though the assessee has not filed any return of income u/s. 139(1) of the Act. Based on the similar set of facts the case of the assessee was re-opened for A. Y. 2010-11. In that year the income was estimated @ 5 % and the ld. CIT(A) based on that decision affirmed the addition made by the ld. AO 5 %. The appeal of the assessee for that assessment year in ITA No. 466/JP/2019 for Assessment year 2010-11 was also dismissed and thus the income estimated by the lower authorities based on these finding does not require any modification in the year under consideration as the assessee has not controverted the findings of the lower authority and thus, on being consistent we do not find 8 ITA No. 283/JP/2023 Uma Mandal vs. ITO any infirmity in the order of the ld. CIT(A) and thus, the appeal of the assessee is dismissed. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 21/09/2023. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 21/09/2023 * Ganesh Kumar, PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Uma Mandal, Jaipur 2. izR;FkhZ@ The Respondent- Income Tax Officer, Ward 5(2), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 282/JP/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar