Binapani Tripathy, Puri V. ITO, Puri

ITA 290/CTK/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5372 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: B R PANDA
• Keywords: Business income; Reasonable cause; Corroborative evidences
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 2 90 / CTK /20 1 5 ( / ASSESSMENT YEAR : 20 09 - 20 1 0 ) SMT. BINAPANI TRIPATH Y, AT - GOPALPUR ROAD, CHAPURINGI GADASAHI, DIST - PURI VS. ITO PURI WARD, PURI ./ ./ PAN/GIR NO. : A CFPT 7888 N ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI B.R.PANDA , AR /REVENUE BY : SHRI D.K.PRADHAN , CITDR / DATE OF HEARING : 0 5 / 10 /201 7 / DATE OF PRONOUNCEMENT 11 / 10 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF CIT(A) - 2 , BHUBANESWAR , IN APPEAL REFERENCE NO. 0292 / 201 4 - 1 5 , DATED 31.03.2015 , PASSED U/S.143(3)/250 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 20 09 - 2010 , WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS : - (I) FOR THAT THE ORDERS OF THE FORUM S BELOW ARE EXCESSIVE, UNJUST AND IMPROPER AND ILLEGAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE INCOME REFERRED SHOULD HAVE BEEN ACCEPTED. (II) FOR THAT THE ENTIRE CASH DEPOSITS FOUND FROM THE BANK REPRESENTING THE TRANSACTIONS IF ANY CANNOT BE TREATED AS A PROFIT IN FACT OR INCOME TO BE ADDED IN THE INCOME FOR LEVY AND DETERMINATION OF TAX IN THE FACTS OF THE CASE. THEREFORE, THE ORDERS PASSED HAVE TO .BE QUASHED AND VACATED. (III) FOR THAT THE APPELLANT HAVING RELIED THE POINTS OF LAW DECIDE D BY THE JURISDICTIONAL APPELLATE TRIBUNAL IN THE CASE OF R.R. CARRYING CORPORATION , ITA NO.179/CTK/2009 WHEREIN THE HONTLE BENCH HAS RELIED THE JUDGMENT AND THE HON'BLE GUJURAT HIGH COURT AND HONTLE M.P. HIGH COURT IN THE CASE OF CR!' VRS. BALCHAND AJITK AR WHEREIN THE PROFIT WAS DETERMINED FROM THE UNEXPLAINED SALE AMOUNT DETECTED AND FOUND OUTSIDE THE BOOKS OF ACCOUNTS SO ACCORDINGLY PROFIT RATE SHOULD HAVE BEEN ADOPTED EVEN IF THE LD.CIT(A) HAD FOUND UNEXPLAINED BANK DEPOSIT WAS LIMITED TO RS.26,91,093/ - . THEREFORE THE ENTIRE AMOUNT OF RS.26,91,093/ - ITA NO. 290 /CTK/201 5 2 CANNOT BE ADDED AS THE INCOME OF THE APPELLANT. THEREFORE PROFIT RATE SHOULD HAVE BEEN ADOPTED. (IV) FOR THAT THE ORDER OF THE FORUMS BELOW ARE COMPLETELY WRONG AND ABSURD AND DETERMINED ILLEGALLY SHOULD NOT HAVE BEEN INFLATED THE INCOME BASING ON THE BANK DEPOSITS MADE BY THE APPELLANT WHICH CANNOT CONSTITUTE THE INCOME OF THE APPELLANT AND SUCH ADDITIONS ARE TO BE DELETED ENTIRELY AND ONLY THE RATE OF PROFIT IS TO BE ADOPTED IN THE FACTS OF THE CASE. ( V) FOR THAT THE LD.A.O. AS WELL AS THE FIRST APPELLATE AUTHORITY HAD MISCONSTRUED THE FACTS AND CIRCUMSTANCES OF THE CASE AND IT HAS NO BASIS TO HOLD THAT THE BANK DEPOSITS WHICH CONSTITUTED AUTOMATICALLY THE INCOME OF THE APPELLANT. THEREFORE, ADOPTION O F G.P.RATE SHOULD HAVE BEEN MADE HENCE THE ORDER PASSED IS LIABLE TO BE DELETED. (VI) FOR THAT THE INCOME RETURNED SHOULD HAVE BEEN ACCEPTED WITHOUT INFLATION AND OTHER GROUNDS WILL BE URGED AT THE TIME OF HEARING. 2 . B RIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN TRADING OF CEMENT/M.S.RODS AND ASBESTOS SHEETS AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 09 - 2010 ON 14.09.2009 WITH TOTAL INCOME OF RS. 2,01,266 / - AND THE RETURN OF INCOME WAS PROCESSED U/S.143(1) OF THE ACT AND SUB SEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY MANUALLY AND NOTICE U/S.143(2) & 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED. IN COMPLIANCE TO THE SAME, LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED INFORMATION ALONG WITH TAX AUDIT REPORT U/S.44 AB OF THE ACT . THE AO ON PERUSAL OF BALANCE SHEET FOUND THAT THE ASSESSEE HAS DISCLOSED THREE BANK ACCOUNTS AND THE AO ISSUED OFFICE COMMUNICATION U/S.133(6) OF THE ACT TO DIFFERENT BANKS. THE AO OBSERVED THAT THE ASSESSEE HAS MAINTAINED THREE BANK ACCOUNT S AND HAS OTHER BANK ACCOUNTS ARE NOT DISCLOSED IN THE BALANCE SHEET AND WHERE THE TOTAL CREDIT S AGGREGATED TO RS. 64,58,020/ - . THE ASSESSEES CONTENTION THAT THE ITA NO. 290 /CTK/201 5 3 AMOUNT IS ALREADY CONSIDERED IN THE BANK ACCOUNT AND THE AO HELD THE BANK ACCOUNTS TO THE EXTENT O F 8 BANK ACCOUNTS AS UNDISCLOSED AND DISCUSSED AT PAGE 3 OF THE ORDER AND EVEN AFTER PROVIDING OPPORTUNITY, NO EXPLANATIONS WERE RECEIVED AND FINALLY ASSESSED THE TOTAL INCOME OF RS. 79,03,790/ - AND PASSED THE ORDER U/S.143(3) OF THE ACT DATED 29.12.2011. 3 . AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A) . IN THE APPELLATE PROCEEDINGS THE LD. CIT(A) HAS CONSIDERED THE ARGUMENTS AND SUBMISSION S OF THE LD. AR AND FINDINGS OF THE AO. THE CIT(A) FURTHER DEALT ON THE GROUNDS INDEPEN DENTLY AND CALLED FOR THE REMAND REPORT FROM THE AO. THE LD. CIT(A) HAVING VERIFIED BANK STATEMENT AND SUBMISSIONS OF THE ASSESSEE HAS CONFIRMED THE SUSTENANCE OF ADDITION REFERRED AT PAGE 9 OF THE ORDER TO THE EXTENT OF RS.26,91,293/ - AND PARTLY ALLOWED T HE APPEAL OF THE ASSESSEE. 4 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5 . BEFORE US, LD. AR EXPLAINED THAT THE CIT(A) HAS ERRED IN SUSTAINING THE ADDITION TO THE EXTENT OF RS. 26,91,293/ - AS THE ASSESSEE HAS SUBSTANTIATED ITS CLAIM AND FILED THE COPY OF BANK ACCOUNTS WHERE TH E SAID AMOUNT WAS CONSIDERED. CONTRA, LD. DR RELIED ON THE ORDERS OF CIT(A). 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, LD. ARS CONTENTION T HAT THE CIT(A) HAS ERRED IN SUSTAINING THE ADDITION TO THE EXTENT OF RS. 26,91,293/ - IRRESPECTIVE OF FACT THAT THE ASSESSEE HAS SOURCE WHICH CAN BE EXPLAINED AND RECONCILIATION ITA NO. 290 /CTK/201 5 4 HAS TO BE MADE IN RESPECT OF THE SAID AMOUNTS. THE L D. AR DREW OUR ATTENTION TO THE PAGE 9 OF CIT(A)S ORDER WHERE IT WAS OBSERVED AS UNDER : - F) FROM THE ABOVE, AND SUBJECT TO THE DIRECTIONS ISSUED TO THE AO TO BE CARRIED OUT AND THE NECESSARY VERIFICATIONS (TO ARRIVE AT SATISFACTION) TO BE MADE, THE TOTAL DEPOSITS MADE BY THE APPELLA NT IN HER VARIOUS ACCOUNTS THAT MERIT ACTIVE AND SUBSTANTIVE CONSIDERATION ARE AS UNDER : - SL.NO. NAME OF THE BANK BANK ACCOUNT ACCOUNT OF TOTAL CREDIT (RS.) 1 INDIAN BANK 777739559 1,01,021 2 - DO - 754185551 6,60,485 3 - DO - 814095772 1,54,229 4 - DO - 82 8514369 1,00,000 5 - DO - 830212206 1,00,816 6 - DO - 777687497 3,29,613 7 PUNJAB NATIONAL BANK 28910001000036464 627 8 UNION BANK OF INDIA CREDITS IN A/C NO. (0094 UBI) DISCLOSED BY THE ASSESSEE 7,12,200 9 UNION BANK OF INDIA CREDITS IN A/C NO. OF UBI D ISCLOSED BY THE ASSESSEE LATER. 5,32,302 TOTAL 26,91,293 LD. AR FOCUSED ON 9 BANK ACCOUNTS AND DREW ATTENTION TO INDIAN BANK ACCOUNT WHERE TOTAL CREDIT IS TO THE EXTENT OF RS. 1,01,021/ - , WHICH LD. AR SUBMITTED THAT THE ASSESSEE HAS ACCEPTED THE ADDITI ON . ON THE SECOND BANK ACCOUNT OF INDIAN BANK ACCOUNT WHERE THE ADDITION MADE BY THE AO TO THE EXTENT OF RS. 6,60,485/ - . THE LD. AR DREW OUR ATTENTION AT PAGE 2 OF THE BANK ACCOUNT STATEMENT IN THE PAPER BOOK WHERE TOTAL CREDITS DURING THE FINANCIAL YEAR 2 008 - 09 IS TO THE EXTENT OF RS.3,85,978/ - WHEREAS ADDITION MADE BY THE REVENUE IS TO THE EXTENT OF RS. 6,60,485/ - . LD. DR COULD NOT EXPLAIN REASONS IN RESPECT OF MAKING ADDITION AND THE LD. AR EMPHASISED THAT THE AO MISTOOK THE DEBIT AMOUNT S AS CREDITS AND, T HEREFORE, MADE ADDITION. WE FOUND STRENGTH IN THE ARGUMENTS OF LD. AR. ACCORDINGLY, WE MODIFY THE ADDITION IN THIS BANK ACCOUNT TO THE EXTENT OF RS.3,85,978/ - . ITA NO. 290 /CTK/201 5 5 7 . IN RESPECT OF THIRD BANK ACCOUNT NO. 814095772 AT RS.1,84,429/ - AND FOURTH AT RS.1,00,000/ - A ND FIXED DEPOSIT AT RS. 1,18,513/ - . THE ASSESSEES CONTENTION THAT THESE ARE THE BUSINESS ASSETS. THE LD. AR COULD NOT SUBSTANTIATE THAT THESE ARE THE BUSINESS ASSETS AND, THEREFORE, ACCEPTED THE INCOME TO TH E EXTENT OF ABOVE THREE DEPOSIT , WHEREAS IN BANK ACCOUNT NO.6 WITH ACCOUNT NO. 777687497 IN THE NAME OF ASSESSEES HUSBAND MR. BIRA KISHORE TRIPATHY WHICH THE AO HAS TREATED THE CREDIT IN THE ACCOUNT RS.3,29,612/ - AS INCOME OF THE ASSESSEE. THE L D. AR SUBMITTED THAT ASSESSEES HUSBAND IS ALSO ASSESSED TO INCOME TAX AND HAS EXPLAINED IN THE INCOME TAX ASSESSMENT. WE FOUND THERE IS REASONABLE CAUSE EXPLAINED BY THE LD. AR OF THE ASSESSEE THAT THE SAID AMOUNT CANNOT BE TAXED IN THE CASE OF THE ASSESSEE AS THE ACCOUNT IS IN THE NAME OF HUSBAND OF THE ASSESSEE . FURTHER, LD. AR SUBMITTED THAT THIS AMOUNT CAN BE VERIFI ED FROM THE BANK ACCOUNT AND NATURE OF DEPOSITS BELONGS TO ASSESSEE OR ASSESSEES HUSBAND AND CONSIDERING THE APPARENT FACT S , WE DIRECT THE AO TO DELETE THE ADDITION OF RS. 3,29,612/ - AND THE AO SHALL MA KE ENQUIRY AND SATISFIED THE CLAIM THAT IF NOT EXPLAINED , THE ADDITION BE CONFIRMED IN THE HANDS OF ASSESSEES HUSBAND. 8 . IN RESPECT OF PUNJAB NATIONAL BANK THE ASSESSEE HAS ACCEPTED THE ADDITION. IN RESPECT OF UNION BANK OF INDIA, TOTAL ADDITION MADE BY THE AO AT RS. 7,12,200/ - . LD. AR DREW OUR ATTENTION TO JOINT BANK ACCOUNT STATEMENT OF THE ASSESSEE ALONG WITH THE HUSBAND. THE CONTENTION OF LD. AR THAT THIS IS A JOINT ACCOUNT AND CREDITS PERTAINS TO ASSESSEES HUSBAND AND SUPPORT ED WITH EVIDENCE . P RIMA FACIE, THE BANK ACCOUNT IS IN THE ITA NO. 290 /CTK/201 5 6 NAME OF HUSBAND OF THE ASSESSEE AND ASSESSEE AND AS ENVISAGED BY LD. AR THE CREDITS PERTAINS TO ASSESSEES HUSBAND THOUGH JOINT ACCOUNT IS MAINTAINED , WE ARE OF THE SUBSTANTIVE VIEW THAT THE CREDITS WHICH RELATES TO ASSESSEE HUSBAND HAS TO BE TAXED IN HIS HAND AND ASSESSEE CREDITS IF NOT EXPLAINED, SHALL BE TAXED AND ACCORDINGLY, WE REMIT THE DISPUTED ISSUE FOR LIMITED PURPOSE TO THE FILE OF AO WHO SHALL EXAMINE AND VERIFY AND PASS THE ORDER. IN RESPECT OF LAST DISPUTED ISSUE OF CRED ITS IN THE UNION BANK OF INDIA RS. 5,32,302/ - , THE LD. AR EXPLAINED THAT THIS AMOUNT PERTAINS TO BUSINESS INCOME BUT THERE IS NO PROOF WITH SUPPORTING EVIDENCE EXCEPT STATEMENT THAT THE ASSESSEE IS HAVING BUSINESS INCOME. WE ARE OF THE OPINION THAT THE ASS ESSEE COULD NOT SUBSTANTIATE WITH ANY CONCRETE PROOF WITH SOURCE EVEN BEFORE US AND A CCORDINGLY, WE CONFIRM THE ACTION OF CIT(A) ON THIS ADDITION . 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 11/10 / 201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 11/10 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / C OPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE . //TRUE COPY//