Shri Dasharathbhai Hargovandas Patel, Mehsana V. The Income Tax Officer, Ward-2, Patan

ITA 2950/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9288 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Section: 69; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2950/AHD/2015 /BLOCK ASSTT. YEAR: 2006-2007 DASHARATHBHAI HARGOVANDAS PATEL 1/5/8, JIVAPURA, CHAR RASTA UNJHA 384 170. PAN : AQZPP 2854 N VS ITO, WARD-2 PATAN RANGE PATAN 384 265. %& / (APPELLANT) '( %& / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVETIA REVENUE BY : SHRI ALOK KUMAR, SR.DR / DATE OF HEARING : 18/01/2016 / DATE OF PRONOUNCEMENT: 09/03/2016 )*/ O R D E R THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE LD.CIT(A), GANDHINAGAR DATED 24.08.2015 PASSED FOR THE ASSTT.Y EAR 2006-07. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.FIRST APPELLATE AUTHORITY HAS ERRED IN CONFIRMING ADDITION OF RS.6, 87,300/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 69 OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO GOT AN I NFORMATION THAT THE ASSESSEE HAD MADE DEPOSIT OF RS.10,15,300/- IN HIS BANK ACCOUNT OF HDFC BANK LTD. HE REOPENED THE ASSESSMENT BY ISSUANCE O F NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. THE AO HAS CONFRONTED T HE ASSESSEE TO SHOW THE SOURCE OF INVESTMENT IN THE BANK. THE ASSESSEE HAS SUBMITTED THAT THE AMOUNTS DEPOSITED IN THE ACCOUNTS ARE THE SALES OF LOW QUALITY CATTLE FEE ITA NO.2950/AHD/2015 2 PURCHASED FROM NATIONAL AGRICULTURAL CO-OP. MARKETI NG FEDERATION OF INDIA LTD. (NACMFI FOR SHORT). HE ALSO POINTED THAT C ERTAIN AMOUNTS WERE DEPOSITED AFTER WITHDRAWALS FROM THE BANK. THE LD. AO TABULATED THE DETAILS IN THE ASSESSMENT ORDER EXHIBITING THE CASH DEPOSITS I N THE ACCOUNT AS WELL AS WITHDRAWALS MADE BY THE ASSESSEE. ACCORDING TO THE AO, THE DEPOSITS WERE OF RS.10,15,300/-. THE WITHDRAWALS ARE OF RS.3,28,000 /-. AFTER GIVING EFFECT OF THE WITHDRAWALS, THE LD.AO MADE ADDITION OF RS.6,87 ,300/-. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT NACMFI HAS SOLD GOODS OF LOW QUALITY FOR A SUM OF RS.3,87, 505/- TO THE ASSESSEE. THIS SALE WAS MADE ON 7.9.2005. THE ASSESSEE SOLD THESE GOODS AND DEPOSITED THE SALE CONSIDERATION IN THE ACCOUNTS. THE PAYMENT TO THE NACMFI WAS MADE THROUGH ACCOUNT PAYEE CHEQUE BEARING NO.099194 DATE D 6.9.2005 DRAWN ON HDFC BANK. THE COPY OF THE BANK STATEMENT HAS ALSO BEEN PLACED ON RECORD. A SUM OF RS.3,87,505/- WAS DEBITED FROM THE ACCOUNT OF THE ASSESSEE ON 6.9.2005 FOR ISSUANCE OF DD TO NACMFI. THE ASSES SEE HAS SHOWN SALE CONSIDERATION OF RS.4,30,500/-. THE DETAILS OF SAL E REGISTER HAS BEEN PLACED AT PAGE NO.8 OF THE PAPER BOOK. WHILE RECONCILING DEP OSITS MADE IN THE ACCOUNTS, THE ASSESSEE HAS CLAIMED SALES, SINCE HE COULD NOT PRODUCE EVIDENCE. THE LD.AO DID NOT GRANT ANY CREDIT ON THAT ACCOUNT. ON DUE CONSIDERATION OF THESE MATERIALS, WE ARE OF THE VIEW THAT PAYMENT TO NACMFI WAS MADE THROUGH ACCOUNT PAYEE CHEQUE. IT MEANS THAT THE AS SESSEE MUST HAVE PROCURED SOME CATTLE FEED FROM THIS ORGANISATION. THE CATTL E FEED HAVING VALUE OF RS.3,87,505/- CANNOT BE FOR SELF-CONSUMPTION. IT M UST HAVE BEEN SOLD BY THE ASSESSEE DURING THE YEAR. THEREFORE, POSSIBILITY O F DEPOSITS OUT OF SALE CONSIDERATION CANNOT BE RULED OUT. WE ALLOW GROUND S OF THE APPEAL PARTLY, AND DIRECT THE AO TO GIVE CREDIT OF RS.4,30,000/- ON AC COUNT OF SALES MADE BY THE ITA NO.2950/AHD/2015 3 ASSESSEE OUT OF THE PURCHASES FROM NACMFI. THE B ALANCE ADDITION IS CONFIRMED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 9 TH MARCH, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER