SHRI Sanjay Kumar Tiwari, Khandwa V. THE ITO, Khandwa

ITA 285/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5679 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: V N DUBEY
• Section: 143(3); 68; 69; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI SANJAY KUMAR TIWARI, H.NO.11, RAMESHWAR NAGAR, KHANDWA .. ./ PAN: AFOPT0898L VS. ITO, KHANDWA / APPELLANT / RESPONDENT / APPELLANT BY SHRI V.N. DUBEY, ADV. / RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 22.09.2016 DATE OF PRONOUNCEMENT 28.10.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-22, CAMP O FFICE AT .. . / I.T.A. NO. 285/IND/2016 %' ' / ASSESSMENT YEAR: 2009-10 I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 2 OF 11 INDORE, [HEREINAFTER REFERRED TO AS THE CIT(A)] DAT ED 18.02.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-10 AS AGAINST APPEAL DECIDED IN ASSESSMENT ORDER PASSED U/S 143(3) OF T HE ACT DATED06.12.2013 OF ITO, KHANDWA [HEREINAFTER REFERR ED TO AS THE AO]. 2. THOUGH AS MANY AS FIVE GROUNDS OF APPEAL HAVE BEEN TAKEN, BUT IN SUM AND SUBSTANCE, THE GROUNDS RELATE TO CONFIRMING THE ADDITION OF RS. 15,64,400/- AS UNEXP LAINED CASH CREDIT U/S 68/69 OF THE INCOME-TAX ACT, 1961. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 30.03.2010 DECLA RING TOTAL INCOME OF RS. 2,83,420/- AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT, WHICH WAS REOPENED BY ISSUE OF NOT ICE U/S 148 DATED 10.12.2013. IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS. 29,05,200/- WITH UNION BANK OF INDIA, WHICH INCLUDED CASH DEPOSIT OF RS. 13 ,40,800 IN ANOTHER BANK ACCOUNT WITH BANK OF INDIA. THE TOTAL C ASH WITHDRAWALS FROM UNION BANK OF INDIA ARE CLAIMED AT R S. 50,55,757/-, WHICH WAS CLAIMED TO BE SOURCES OF ABOVE CASH I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 3 OF 11 DEPOSITS OF RS. 20,05,200/- THE AO APPARENTLY ACCEP TED THE SOURCE OF CASH DEPOSITS OF RS. 13,40,800/- DEPOSITE D IN BANK OF INDIA, BUT DID NOT ACCEPT THESE WITHDRAWALS TO BE HIS SOURCE OF DEPOSIT FOR RS. 15,54,400/- IN THE UNION BANK OF INDIA. THE AO ASSIGNED VARIOUS REASONS FOR NOT ACCEPTING THE C LAIM OF THE ASSESSEE. 4. AGGRIEVED WITH THE ORDER, THE ASSESSEE FILED THE APP EAL BEFORE THE LD. CIT(A). 5. THE LD. CIT(A) NOTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS AND COULD NOT GIVE THE DETAILS OF PAYMENT OF EXPENSES AGAINST CONTRACT REC EIPTS. THE CONTRACT RECEIPTS OF THE ASSESSEE WERE AT RS. 37,26, 839/- AGAINST WHICH THE RETURNED INCOME OF RS. 2,83,420/- HAS BEEN SHOWN. THEREFORE, APPROXIMATELY THE TOTAL EXPENSES O F RS. 34,43,419/- HAVE BEEN INCURRED. IF THE ASSESSEES C LAIM OF TOTAL WITHDRAWALS OF RS. 50,55,757/-,AND THE DEPOSITS OF RS. 29,05,200/- IS ACCEPTED, THEN THE BALANCE LEFT IS O NLY RS. 21,50,557/- FOR MAKING EXPENSES OF RS. 34,43,419/-, WHICH LEADS TO A SHORT FALL OF RS. 12,92,862/-. THOUGH TH E ASSESSEE I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 4 OF 11 HAS MENTIONED SOME PAYMENTS SEPARATELY TO VARIOUS P ARTIES WITHOUT ANY DETAILS, THE ABOVE APPROXIMATE ANALYSIS HAS BEEN MADE JUT TO ARRIVE AT AN ESTIMATION OF THE CASH AVA ILABLE WITH THE ASSESSEE FOR MAKING DEPOSIT. THE LD. CIT(A), TH EREFORE, OBSERVED THAT THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNTS OR ANY OTHER DETAILS, THE PATTERN OF DEPOS ITS AND PATTERN OF CONTRACT RECEIPTS AS ALSO DISCUSSED BY T HE AO TO ESTABLISH THAT THE CLAIM OF THE ASSESSEE IS NOT COR RECT. THE GENUINENESS OF CLAIM OF OPENING BALANCE HAS ALSO NO T BEEN ACCEPTED BY THE AO. THE AO HAS ALSO DISCUSSED THE DISCREPANCIES IN THE CASH BALANCE FILED BY THE ASSE SSEE AT PAGE 15 OF THE ASSESSMENT ORDER. THE PATTERN OF EXPENSES HAS ALSO BEEN DISCUSSED. THEREFORE, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 15,64,400/- CONSIDERING THE SAME A VERY REASONABLE ESTIMATE 6. AGGRIEVED WITH THE ORDER, THE ASSESSEE HAS FILED THE APPEAL BEFORE THIS TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE YEAR, THE ASSESSEE HAS COMPLETED WORK OF RS. I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 5 OF 11 37,26,839/- AND RAISED INVOICE/BILLS THEREOF TO M/S . BANCO CONSTRUCTION AND RECEIVED THE PAYMENT OF RS. 47,17, 549/- INCLUDING THE PAYMENT ON ACCOUNT OF PREVIOUS YEARS BALANCES FROM TIME TO TIME. COPY OF STATEMENT OF ACCOUNT WITH M/S. BANCO CONSTRUCTION ALONGWITH THE TDS CERTIFICATE WAS FILED. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PAY MENT RECEIVED FROM M/S. BANCO CONSTRUCTION WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH THE UNI ON BANK OF INDIA AND SAME WAS UTILIZED FOR THE WITHDRAWALS/P AYMENTS AS PER THE REQUIREMENT OF THE BUSINESS. COPY OF BAN K STATEMENT OF UNION BANK OF INDIA ACCOUNT WITH RELEVA NT DETAILS ARE FILED BEFORE THE AO. THE ASSESSEE HAS GIVEN A C ASH FLOW STATEMENT AS UNDER :- AMOUNT (RS.) OPENING BALANCE AS ON 01.04.2008 13,632.50 PAYMENT RECEIVED FROM M/S. BANCO CONSTRUCTION DURING THE YEAR TIME TO TIME 47,17,549.00 AMOUNT DEPOSITED BY ME TIME TO TIME DURING THE YEAR. 15,64,400.00 OTHER MISC. CREDITS 25,402.00 TOTAL 64,20,983.00 LESS: CASH WITHDRAWAL FROM THE BANK TIME TO TIME DURING THE YEAR 50,55,757.00 LESS: PAYMENT TO PARTIES/MISC. OTHER DEBITS 6,55,425.00 LESS: PAYMENT TO ANIL KUMAR & COMPANY I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 6 OF 11 8. FURTHER, THE ASSESSEE WAS HAVING ANOTHER BANK ACCOUNT MAINTAINED WITH BANK OF INDIA, KHANDWA. IN TH E AFORESAID BANK ACCOUNT, THE CREDIT IN THE BANK ACCO UNT REFLECTS THE AMOUNT DEPOSITED BY THE ASSESSEE TIME TO TIME (APART FROM TRANSFER FROM MY UBI ACCOUNT/OTHER CREDITS). T HE SAME WAS MAINLY UTILIZED FOR THE PURPOSE OF MAKING THE PA YMENT TO M/S. ANIL KUMAR & CO. ( OR ITS PARTNER MR. RUN KUMA R KAYAL), ONE OF MY/HIS BUSINESS ASSOCIATE (TIME TO TIME) AS ADVANCE AGAINST THE PURCHASE OF JCB MACHINE ( WHICH WAS TRANS FERRED IN NAME OF THE ASSESSEE ON 21.01.2011 ). COPY OF BA NK STATEMENT OF BANK OF INDIA/OTHER RELEVANT DOCUMENTS WERE SUBMITTED TO THE AO. THE NATURE OF DEPOSITS/WITHDRAWA L OF SAID BANK ACCOUNT IS SUMMARIZED AS UNDER :- OPENING BALANCE AS ON 01.04.2008 2,446 .00 ADD: CASH DEPOSITED DURING THE YEAR (TIME TO TIME) 13,40,800.00 OTHER CREDITS/RECEIPTS 10,23,500 LES: PAYMENT MADE TO M/S. ANIL KUMAR & CO./MR. ARUN KUMAR KAYAL 12,88,030 BALANCE AS ON 31.03.2009 62,615.00 13,50,645.00 2,836.00 I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 7 OF 11 9. DURING THE YEAR THERE IS WITHDRAWALS OF RS. 50,55,757.00 FROM AFORESAID BANK ACCOUNT OF UNION B ANK OF INDIA TIME TO TIME (MAINLY OUT OF BUSINESS PROCEEDS OF PAYMENTS/RECEIPTS FROM M/S. BANCO CONSTRUCTION) AS AGAINST THE DEPOSIT OF RS. 15,64,400/- IN THE BANK ACCOUNT WITH UBI AND DEPOSIT OF RS. 13,40,800 IN MY BANK ACCOUNT WITH BOI (TOTAL AMOUNT OF DEPOSIT IN BOTH BANK ACCOUNTS OF R S. 29,05,200.00 DURING THE YEAR TIME TO TIME). CASHBOO K (PREPARED BY THE ASSESSEE AS REQUIRED BY THE AO, ON THE BASIS OF DETAILS AVAILABLE WITH THE ASSESSEE ), REFLECTING THE CASH RECEIPTS/WITHDRAWALS/PAYMENTS/DEPOSITS ETC. WAS SUBMIT TED TO THE AO. 10. IT WAS FURTHER SUBMITTED THAT THE ADDITION U/S 68 CA N BE MADE IF THERE IS EXISTENCE OF BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE OR THERE IS CREDIT ENTRY IN THE BOO KS OF ACCOUNTS AND IN THE ABSENCE OF SATISFACTORY EXPLANA TION ABOUT THE NATURE OF SOURCE OF SOME CREDITORS. THEREFORE, PROVISIONS OF SECTION 68 ARE NOT ATTRACTED IN THE CASE AS THE ASS ESSEE WAS NOT HAVING ANY APPLICATION FOR MAINTENANCE OF BOOKS OF I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 8 OF 11 ACCOUNTS AS THE RETURN WAS FILED ON PRESUMPTIVE BASI S. FURTHER, THE REFERENCE TO SECTION 69 IS ALSO MIS-CO NSTRUED AS THE SAME IS ATTRACTED IN THE CASE OF THE ASSESSEE WH O HAS MADE INVESTMENT, WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. IT WAS CONTENDED THAT THE ASSESSEE WAS HAV ING SUFFICIENT CASH BALANCE AT ANY POINT DURING THE YEA R TO MATCH WITH THE DEPOSIT WITH THE SAME BANK. THE TOTAL AMOUNT DEPOSITED WITH THE SAID BANK AGGREGATE TO RS. 15,64, 400/- SUBSTANTIALLY LOWER THAN THE AMOUNT OF WITHDRAWAL OF RS. 55,55,757/- FROM THE SAID BANK ACCOUNT AND THE SAME CANNOT BE TREATED AS AN ISOLATION. 11. PER CONTRA, THE LD. SR.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CASH FLOW SUBMITTED ON THE BASIS OF CASH FLOW PREPARED BY THE ASSESSEE NOT RELIABLE, CANNOT B E ACCEPTED. THE LD. SR. DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE ASSESSEE HAS SHOWN CASH BALANCE AT RS. 2,50,000/-AS PER CASH BOOK IN THE RETURN OF INCOME, WHEREAS THE CASH BALANCE AS PER CASH BOOK IS FILED WITH CASH FLOW STATEMENT SH OWN AT RS. 17,00,869/-. THEREFORE, THE CASH BOOK PRODUCED BY THE I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 9 OF 11 ASSESSEE IS NOT RELIABLE. IT WAS FURTHER SUBMITTED T HAT THE ASSESSEE HAD MADE CASH EXPENDITURE OF RS. 26.74 LAK HS FOR HIS BUSINESS, OUT OF WHICH PAYMENT OF RS. 19.55 LAKHS HA S BEEN MADE IN CASH IN THE LAST FORTNIGHT OF THE FINANCIAL YEAR ENDING MARCH. THEREFORE, IF THE ASSESSEE HAS INCURRED A SU M OF RS. 7.1 LAKHS FOR ELEVEN MONTHS AND FIFTEEN DAYS AND HO W IT COULD BE POSSIBLE TO INCUR SUCH AMOUNT OF CASH RS. 17.19 LAKHS WITHIN A FORTNIGHT. FURTHER, THE ASSESSEE HAS SHOWN O PENING CASH BALANCE AT RS. 5,12,467/- AS PER CASH BOOK AS ON 1.4.2008 PLACED AT PAPER BOOK PAGE 75. HOWEVER, TH IS OPENING CASH BALANCE HAS NOT BEEN EXPLAINED. THEREFORE, THE CASH FLOW STATEMENT IS ALSO NOT SUPPORTED BY NECESSARY DETAIL S. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE ASSESSEE HAS COMPLETED A PROJECT WITH M/S. BANCO CONSTRUCTION DURING THE YEAR UNDER CONSIDERATION F OR THE BILL OF RS. 37,26,839/- HAVE BEEN RAISED DURING THE YEAR AND PAYMENT FOR CONTRACT WORK WAS RECEIVED AT RS. 47,17,5 49/-. THE ASSESSEE HAS CONTENDED THAT THE TOTAL WITHDRAWALS FROM I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 10 OF 11 THE BANK ACCOUNT MAINTAINED WITH UNION BANK OF INDIA ARE AT RS. 50,55,757/-, WHICH WERE UTILIZED AS AGAINST DEPO SIT OF RS. 15,64,400/- WITH THE UNION BANK OF INDIA ACCOUNT AND DEPOSIT OF RS. 13,40,800/- WITH BANK OF INDIA ACCOUNT TOTALL ING TO RS. 29,05,200/-. BESIDES THIS, THE ASSESSEE HAS MADE PA YMENT OF RS. 13.50 LAKHS TO ANIL KUMAR & COMPANY AND RS. 6.5 LAKHS TO OTHER MISC. DEBTORS. HOWEVER, WE FIND THAT THE A SSESSEE IS NOT MAINTAINING REGULAR BOOKS OF ACCOUNTS. THEREFOR E, THE OPENING CASH BALANCE SHOWN AT RS. 2,50,000/- WHEREAS OPENING CASH BALANCE OF CASH BOOKS COMES TO RS. 17, 869/- WITH RETURN, HENCE ,OPENING CASH BALANCE OF RS. 2,32 ,131/- IS NOT FOUND ACCEPTABLE. SIMILARLY, OPENING CASH BALAN CE OF RS. 5,12,467/- SHOWN IN THE CASH FLOW STATEMENT CANNOT B E TREATED AS EXPLAINED. IN VIEW OF THIS, THE OPENING C ASH BOOK AND OPENING BALANCE AT RS. 7,44,598/-( I.E. ( RS. 2 ,32,131 + 5,12,467 ) IS NOT SUPPORTED WITH THE DOCUMENTARY EVI DENCE. ALTHOUGH THE ASSESSEE IS NOT MAINTAIN BOOKS OF ACCO UNTS, HOWEVER, AT THE SAME TIME THE TOTAL OPENING BALANCE CANNOT BE IGNORED. THEREFORE, WE ARE OF THE CONSIDERED OPINIO N THAT AS I.T.A.NO. 285/IND/2016 A.Y.2009-10 SHRI SANJAY KUMAR TIWARI, KHANDWA PAGE 11 OF 11 AGAINST OPENING BALANCE CLAIMED BY THE ASSESSEE AT RS. 7,62,467/- ( RS. 2,50,000 + 5,12,467 ) OPENING BALA NCE AT RS. 5 LAKHS IS TREATED AS UNEXPLAINED. THEREFORE, ADDIT ION ON ACCOUNT OF CASH DEPOSIT TO THIS EXTENT OF RS. 5 LAK HS IS SUSTAINED AND BALANCE ADDITION OF RS. 10,64,400/- I S TREATED EXPLAINED OUT OF CASH WITHDRAWN FROM THE UNION BANK O F INDIA FROM TIME TO TIME DURING THE YEAR UNDER CONSIDERATI ON. ACCORDINGLY, THE ADDITION OF RS. 10,64,400/- IS DIR ECTED TO BE DELETED AND ADDITION OF RS. 5 LAKHS IS CONFIRMED. 13. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 28 TH OCTOBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 28 TH OCTOBER, 2016. CPU*