Smt. K.N. Nandini, Bellary V. The Assistant Commissioner Of Income Tax, Central Circle- 2(1), Bangalore

ITA 291/BANG/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0968 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-03-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H N KHINCHA
• Keywords: Peak credit; Corroborative evidences
• Section: 234B; 153C; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER IT A NO S . 289 TO 292/BANG/2020 ASSESSMENT YEAR S : 2008 - 09 TO 2011 - 12 SMT. K.N. NANDINI, OPP. APMC YARD, DAM ROAD, HOSPET 583 201. BELLARY. PAN: ABCPN 5042Q VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : S HRI H.N. KHINCHA, CA RESPONDENT BY : SHRI PRADEEP KUMAR, C IT(D R) (ITAT ), BENGALURU. DATE OF HEARING : 06.07 .2021 DATE OF PRONOUNCEMENT : 12 .0 7 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE AGAINST THE SEP ARATE ORDERS, ALL DATED 31.12.2019 OF THE CIT(APPEALS)-11, BENGALURU FOR THE ASSESSMENT YEARS 2008-09 TO 2011-12. THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. THE GROUNDS OF APPEAL ARE COMMON IN NATURE FOR ALL THE YEARS WITH ONLY CHANGE IN THE FIGURES. THE GROUNDS FOR THE AY 2008-09 ARE AS FOLLOWS:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ORDER PASSED BY ASSESSING O FFICER. THE ORDER PASSED BY LEARNED ASSESSING OFFICER BEING BAD IN LAW AND ITA NOS.289 TO 292/BANG/2020 PAGE 2 OF 5 VOID-AB-INITIO WAS REQUIRED TO BE QUASHED IN TOTO I NSTEAD OF BEING CONFIRMED PARTIALLY. 2. IN ANY CASE, THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) HAS ERRED IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE APPLICATION OF SECTION 153C OF THE ACT LAC KED JURISDICTION. THE ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LAW ESPECIALLY IN THE ABSENCE OF SATISFACTION TO BE RECORDED BEFOR E THE ISSUE OF NOTICE U/S 153C OF THE ACT AND SUCH ORDER IS LIABLE TO BE QUASHED. 3. IN ANY CASE AND WITHOUT PREJUDICE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN P ARTIALLY CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFI CER. ON PROPER APPRECIATION OF FACTS AND THE LAW APPLICABLE , THE ADDITIONS MADE/CONFIRMED ARE WHOLLY ERRONEOUS AND ARE LIABLE TO BE DELETED. 4.1 THE LEARNED CIT(A) HAS ERRED IN NOT ADOPTING TH E PEAK THEORY WITH RESPECT TO ADDITION MADE ON THE BANK DE POSITS AND CONFIRMING 10% OF THE ADDITION MADE ON ACCOUNT OF T OTAL BANK DEPOSITS BY THE ASSESSING OFFICER. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW APPLICABLE, THE ADDITION SU STAINED BY THE CIT(A) IS ADHOC, WITHOUT ANY BASIS AND IS TO BE DEL ETED IN ENTIRETY. 4.2 THE LEARNED CIT(A) HAVING CONFIRMED 10% OF TOTA L ADDITIONS, ALSO ERRED IN HOLDING THAT OUT OF THE SO URCES EXPLAINED FOR BANK DEPOSITS, A SUM OF RS 3,90,40,000/- BEING ADVANCE RECEIVED FROM AYYAPPA MINERALS REMAINED UNEXPLAINED , NOT SUPPORTED WITH DOCUMENTARY EVIDENCE AND SAME IS TO BE ADDED TO THE INCOME OF THE APPELLANT. THE ADDITION MADE IS A LREADY SUBSUMED IN THE ADDITION SUSTAINED AND AMOUNTS TO D OUBLE ADDITION TO THE EXTENT OF 10% OF THE ADVANCES AND S UCH ADDITION IS LIABLE TO BE DELETED. 5. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE A DDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF URD PUR CHASES TO THE EXTENT OF 10% . ON PROPER APPRECIATION OF FACTS AND THE LAW APPLICABLE, THE ADDITION MADE BEING ADHOC, PURELY O N ESTIMATION BASIS IS TO BE DELETED IN ENTIRETY. ITA NOS.289 TO 292/BANG/2020 PAGE 3 OF 5 6. IN ANY CASE, THE ADDITIONS AS SUSTAINED IS ERRON EOUS AND EXCESSIVE. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST U/S. 234A, 234B & 234C. THE INTEREST HAVING LEVIED BEEN ERRONEOUSLY IS TO B E DELETED. 8. IN VIEW OF THE ABOVE AND ON THE GROUNDS TO BE AD DUCED AT THE TIME OF HEARING IT IS REQUESTED THAT THE IMPUGN ED ORDER PASSED BY THE ASSESSING OFFICER BE QUASHED OR ATLEAST THE ADDITION AS SUSTAINED/CONFIRMED BY THE CIT(A) BE DELETED, AND T HE INTEREST LEVIED BE ALSO DELETED. 3. THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZ URE OPERATION U/S 132 OF THE INCOME-TAX ACT, 1961 [THE ACT] WAS COND UCTED IN THE CASE OF SRI K. V. NAGARAJ AND OTHERS ON 25/10/2010. THE APPELLA NT KN NANDINI IS PROPRIETRIX IN M/S SWASTIK STEELS, A DEALER IN IRON ORE. THE APPELLANT FILED RETURN OF INCOME FOR AY 2008-09 ON 20/10/2008 DECLA RING A TOTAL INCOME OF RS. 5,76,700/-. NOTICE U/S 153C DATED 23/09/2011 WA S ISSUED AND SERVED ON THE APPELLANT. IN THE ASSESSMENT ORDER, AO MADE AN ADDITION OF RS. 1,04,56,712/- ON ACCOUNT OF UNREGISTERED PURCHASES. THE SAID PURCHASES WERE DISALLOWED U/S 37(1). THE AO ALSO MADE AN ADDI TION OF RS. 23,98,85,211/- AS UNDISCLOSED BANK CREDITS. IN THE FIRST ROUND OF APPEAL, THE CIT(APPEALS) CONFIRMED THE ORDER OF AO. THE TRIBUN AL VIDE ORDER DATED 27.7.2016 RESTORED THE ENTIRE MATTER BACK TO THE FI LE OF AO FOR FRESH DECISION. 4. WHILE PASSING THE ORDER GIVING EFFECT TO THE ITA T ORDER, THE AO COMPUTED THE INCOME FOR THESE ASSESSMENT YEARS AS F OLLOWS:- AY 2008-09 1. UNDISCLOSED INCOME AN ACCOUNT OF DISALLOWANCE OF URD PURCHASES 1,04,56,712 2. UNDISCLOSED BANK CREDITS 23,98,85,212 TOTAL : RS.25,03,41,924 ITA NOS.289 TO 292/BANG/2020 PAGE 4 OF 5 AY 2009-10 1. UNDISCLOSED INCOME AN ACCOUNT OF DISALLOWANCE OF URD PURCHASES 26,97,000 2. UNDISCLOSED BANK CREDITS 54,22,66,435 TOTAL : RS.54,49,63,435 AY 2010-11 1. CASH DEPOSIT 38,37,47,910 2. CHEQUE DEPOSIT 76,78,13,044 TOTAL : RS.115,15,60,954 AY 2011-12 1. UNDISCLOSED BANK DEPOSITS 7,42,28,122 5. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS), WHO SUSTAINED 10% OF THE ADDITIONS. 6. ON MERITS, THE CONTENTION OF THE LD. AR BEFORE U S IS THAT THE ASSESSEE HAS FURNISHED FULL DETAILS OF BANK ACCOUNT AND SOURCE OF DEPOSITS AND ALSO DETAILS OF SALES MADE BY THE ASSESSEE IN T HESE ASSESSMENT YEARS AND THE CIT(APPEALS) OUGHT TO HAVE DELETED THE ENTI RE ADDITION, INSTEAD OF SUSTAINING 10% OF THE ADDITION MADE BY THE AO. 7. THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHORI TIES. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN THESE CASES, IN OUR OPINION, THE ASSESSEE MUST P ROVE EACH DEPOSIT IN THE BANK ACCOUNTS SO AS TO EXPLAIN THE SOURCE AND NATUR E OF DEPOSIT. THE ITA NOS.289 TO 292/BANG/2020 PAGE 5 OF 5 ASSESSEE IS ALSO REQUIRED TO PROVE THE GENUINENESS OF THE UNREGISTERED PURCHASES WITH SUPPORTING EVIDENCES. WITHOUT EXAMI NING THE FACTS, THE CIT(APPEALS) SUSTAINED 10% OF THE ADDITION. THEREF ORE, IT IS APPROPRIATE TO REMIT THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE-EXAMINATION AND DE NOVO CONSIDERATION, WITH A DIRECTION TO THE ASSESSEE TO PROVE ALL THE UNREGISTERED PURCHASES AND DEPOSITS INTO BANK ACCOU NTS TO THE SATISFACTION OF THE AO. ORDERED ACCORDINGLY. 9. THE ASSESSEE ALSO RAISED A GROUND IN ALL THESE A SSESSMENT YEARS WITH REGARD TO RECORDING OF SATISFACTION BEFORE ISS UING THE NOTICE U/S. 153C OF THE ACT. AT THE TIME OF HEARING, NO ARGUMENTS W ERE ADVANCED BY THE LD. AR ON THIS ISSUE, HOWEVER, HE PRAYED THAT THE ISSUE MAY BE KEPT OPEN TO BE RAISED AT APPROPRIATE STAGE. WE CONCEDE TO THE REQUEST OF THE LD. AR AND ACCORDINGLY THIS ISSUE IS KEPT OPEN. 10. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JULY, 2021. SD/- SD/- ( N V VASUDEV AN ) ( CHANDRA POOJARI ) VICE PRESIDENT ACCOUNTANT ME MB ER BANGALORE, DATED, THE 12 TH JULY, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.