Pawan Kumar, Kaithal V. ITO, Kaithal

ITA 3/CHANDI/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0043 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 09-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 01-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: PERMIL GOYAL
• Keywords: Business income; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 3/CHD/2016 ASSESSMENT YEAR: 2011-12 SHRI PAWAN KUMAR, VS THE ITO, S/O SHRI NATHU RAM, WARD 4, KAITHAL. KAITHAL. PAN: AROPK7614B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PERMIL GOYAL RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 27.04.2016 DATE OF PRONOUNCEMENT : 02.05.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) KARNAL DATED 06.10.20 15 FOR ASSESSMENT YEAR 2011-12 CHALLENGING THE ADDITIO N OF RS. 12,02,000/- ON ACCOUNT OF UNEXPLAINED BANK DEPOSITS. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS SHOWN ESTIMATED INCOME FROM COMMISSION RECEIVED ON SALE AND PURCHASE OF POULTRY FEED. THE ASSESSEE SUBMITTED BEFORE ASSESSING OFFICER THAT HE DEALS IN TRADING OF POULTRY PRODUCTS, PARTICULARLY IN BROILE R AND ALL BUSINESS TRANSACTIONS ARE REFLECTED IN THE PNB ACCOUNT. NO BOOKS OF ACCOUNT ARE MAINTAINED. THE PURCHASES ARE ABOUT RS. 55 LACS AND GROSS PROFIT IS 2 ABOUT 8% THEREFORE, SALES WERE LESS THAN RS. 60 LAC S. AS REGARDS CASH DEPOSIT IN SB ACCOUNT, ASSESSEE SUBMIT TED THAT CASH DEPOSITED IN THE BANK DURING THE YEAR PER TAIN TO SALE PROCEEDS OF POULTRY BROILERS. IT WAS FURTH ER SUBMITTED THAT TOTAL CREDIT ENTRIES IN THE BANK ACC OUNT ARE RS. 71,98,110/- AND OUT OF WHICH, ENTRIES NOT RELATED TO BUSINESS AMOUNTS TO RS. 12,02,000/-. TH E ASSESSING OFFICER ACCEPTED THAT CASH DEPOSITS OF RS . 59,96,110/- REPRESENTED BUSINESS RECEIPTS OF THE ASSESSEE AND THUS, PROCEEDED TO APPLY NET PROFIT RA TE OF 8% TO THE SAID RECEIPTS AND COMPUTED BUSINESS INCOM E ACCORDINGLY. AS REGARDS AMOUNT OF RS. 12,02,000/- ASSESSING OFFICER ON ACCOUNT OF LACK OF ANY EXPLANA TION AND SOURCE OF THE BANK DEPOSIT TREATED THE SAID REC EIPTS AS ASSESSEE'S INCOME FROM UNDISCLOSED SOURCE RESULT ING IN AN ADDITION OF RS. 12,02,000/-. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS). SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSE SSEE BRIEFLY EXPLAINED THAT NO BOOKS OF ACCOUNT ARE MAINTAINED. IT WAS SUBMITTED THAT CASH DEPOSITED I N THE BANK DURING THE YEAR PERTAIN TO THE SALE PROCEEDS O F POULTRY BROILER EXCEPT OF RS. 12,02,000/-. IT WAS FURTHER SUBMITTED THAT CASH WAS WITHDRAWN FROM THE BANK ACCOUNT THAT GOODS ARE AVAILABLE AT THE LESSER RATE THEREFORE, CASH WAS RE-DEPOSITED. THE LD. CIT(APPE ALS) DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND DISMI SSED 3 THIS GROUND OF APPEAL OF THE ASSESSEE. HIS FINDING S IN PARA 4.1 TO 4.3 ARE REPRODUCED AS UNDER : 4.1 I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE SUBMISSIONS OF THE APPELLANT. AS OBVIOUS FROM THE F ACTS OF THE CASE, THE ASSESSING OFFICER TREATED RECEIPTS OF RS. 59,96 ,110/- AS BUSINESS RECEIPTS OF THE APPELLANT WHEREAS, AS REGARDS THE R EMAINING RECEIPTS OF RS. 12,02,000/-, THE AO TREATED THE SAM E AS APPELLANT'S INCOME FROM UNDISCLOSED SOURCES SINCE N O COGENT EXPLANATION COULD BE GIVEN BY THE APPELLANT TO SUBS TANTIATE THE SOURCE OF SAID DEPOSITS. DURING THE COURSE OF APPEL LATE PROCEEDINGS, THE APPELLANT STATED THAT THE RECEIPTS OF RS. 12,02,000/- IN HIS BANK ACCOUNT REPRESENTED CASH WITHDRAWN ON V ARIOUS DATES WHICH WAS REDEPOSITED IN HIS BANK ACCOUNT BECAUSE T HE PURPOSE FOR WHICH THE SAID AMOUNT WAS WITHDRAWN COULD NOT MATER IALIZE. ON A CAREFUL PERUSAL OF THE FACTS OF THE CASE TOGET HER WITH THE SUBMISSIONS OF THE APPELLANT FOLLOWING FACTS EMERGE :- A) THE APPELLANT STATED, DURING THE COURSE OF ASSES SMENT PROCEEDINGS THAT CASH RECEIPTS OF RS. 12,02,OOO/- D O NOT RELATE TO HIS BUSINESS. B) THE APPELLANT FAILED TO GIVE ANY DOCUMENTARY EVI DENCE RELATING TO THE SOURCE OF DEPOSITS OF RS. 12,02,OOO /-. C) THE APPELLANT DID NOT MAINTAIN BOOKS OF ACCOUNTS FOR THE PERIOD UNDER CONSIDERATION WHICH MAKES IT IMPOSSIBL E TO SUBSTANTIATE THE SOURCE OF CASH DEPOSITS OF RS. 1 2,02,OOO/- AS A RESULT OF WHICH THE AO TREATED THE SAME AS APPELL ANT'S INCOME FROM UNDISCLOSED SOURCES. D) DURING THE COURSE OF APPELLATE PROCEEDINGS THE A PPELLANT SUBMITTED THAT THE SAID AMOUNT WAS DEPOSITED AFTER WITHDRAWING CASH FROM HIS BANK ACCOUNT. AS PER THE APPELLANT, T HE CASH WAS WITHDRAWN FOR PURCHASES FROM DHURI, BUT SINCE T HE DEAL COULD NOT MATERIALIZE, THE SAME AMOUNT WAS REDEPOSITED. T HE APPELLANT HOWEVER FAILED TO GIVE ANY EVIDENCE TO SUBSTANTIATE ITS STATEMENT. 4 4.2 FURTHERMORE, ON A CAREFUL PERUSAL OF THE STA TEMENT OF CASH WITHDRAWN REDEPOSITED IN THE BANK ACCOUNT, IT IS OBSERVED THAT THERE IS A SIGNIFICANT GAP' BETWEEN THE DAYS OF CAS H WITHDRAWAL AND ITS REDEPOSIT IN THE BANK ACCOUNT. FOR INSTANCE, TH E SOURCE OF THE FOLLOWING CASH DEPOSITS MADE IN THE BANK ACCOUNT IS GIVEN IN THE FOLLOWING TABLE:- SR. NO. CASH DEPOSIT SOURCE OF CASH DEPOSITS 1 RS. 1,00,000/- ON 24.04.2010 CASH WITHDRAWN ON 08.04.2010 2 RS. 1,00,000/- ON 09.10.2010 CASH WITHDRAWN ON 29.09.2010 3 RS. 2,50,000/- ON 28.10.2010 CASH WITHDRAWN ON 23.09.2010 4 RS. 2,30,000/- ON 22.11.2010 CASH WITHDRAWN ON 01.11.2010 THE ABOVE TABLE MAKES IT AMPLY CLEAR THAT EVEN IF A PPELLANT'S EXPLANATION IS ACCEPTED, THE SIGNIFICANT GAP BETW EEN CASH WITHDRAWALS AND CASH DEPOSIT GOES TO PROVE THAT TH E APPELLANT'S EXPLANATION DOES NOT HAVE ANY FORCE AND IS THUS TO BE REJECTED. 4.3 HENCE, AFTER A CAREFUL CONSIDERATION OF THE FAC TS OF THE CASE, TOGETHER WITH THE SUBMISSION OF THE APPELLANT, I HO LD THAT THE A.O. RIGHTLY TREATED CASH DEPOSITS OF RS. 12,02,000/- AS APPELLANTS INCOME FROM UNDISCLOSED SOURCES SINCE THE APPELLANT COULD NOT GIVE ANY SATISFACTORY EXPLANATION REGARDING THE SOURCE O F THE SAID CASH DEPOSITS. 4. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. NO DETAILS OF SALE AND PURCHASES ARE ALSO MAINTAINED. THE ASSESSEE FILED RETURN OF INCOME ON ESTIMATE BASIS. THE 5 ASSESSEE ADMITTED BEFORE ASSESSING OFFICER THAT CAS H DEPOSITED IN THE BANK ACCOUNT PERTAIN TO SALE PROCE EDS OF POULTRY BROILERS AND OUT OF TOTAL CREDIT ENTRIES OF RS. 71,98,110/-, RS. 12,02,000/- WAS STATED TO BE N OT RELATED TO BUSINESS OF THE ASSESSEE. WHEN THE ASSE SSING OFFICER ASKED FOR THE SOURCE OF THE CASH DEPOSIT IN THE BANK ACCOUNT NOT RELATED TO THE BUSINESS, THE ASSES SEE DID NOT FILE ANY DOCUMENTARY EVIDENCE TO PROVE SOUR CE OF THE CASH DEPOSITED IN THE BANK ACCOUNT. SINCE THE ASSESSEE FAILED TO EXPLAIN SOURCE OF THE BANK DEPOS IT OF RS. 12,02,000/-, ASSESSING OFFICER TREATED THE SAME TO BE UNEXPLAINED BANK DEPOSITS. THESE FACTS CLEARLY PROVED THAT ASSESSEE HIMSELF ADMITTED BEFORE ASSESS ING OFFICER THAT OUT OF TOTAL DEPOSIT IN THE BANK ACCOU NT OF RS. 71,98,110/-, THE TRADING RECEIPTS ARE OF RS. 59,96,110/- ONLY. THE ASSESSEE CONTENDED BEFORE LD . CIT(APPEALS) THAT DEPOSIT IN THE BANK ACCOUNT ARE T HE WITHDRAWALS MADE IN CASH FROM THE SAME BANK ACCOUNT , HOWEVER, LD. CIT(APPEALS), ON EXAMINATION OF THE FA CTS FOUND THAT THERE IS NO CO-RELATION BETWEEN WITHDRAW AL FROM THE BANK ACCOUNT AND THE DEPOSITS IN THE BANK ACCOUNTS. NOW, THE ASSESSEE'S COUNSEL HAS TAKEN ANOTHER ARGUMENT THAT THESE ARE ALSO TRADING RECEIP TS. THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE AGAINST THE ADMISSION OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT THE AMOUNT IN QUESTION DID N OT RELATE TO THE BUSINESS OF THE ASSESSEE. IT IS WELL SETTLED LAW THAT ADMISSION IS A GOOD EVIDENCE AGAINST THE 6 MAKER. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO PROVE THAT HIS ADMISSION BEFORE THE AUTHORITIES BEL OW WAS INCORRECT OR UNTRUE. THE ASSESSEE DID NOT PRODU CE ANY EVIDENCE OF SOURCE OF THE BANK DEPOSIT AND NO C O- RELATION BETWEEN WITHDRAWALS FROM THE BANK ACCOUNT HAVE BEEN PROVED, THEREFORE, AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE ADDITION OF RS.12,02,000/- AGAINST THE ASSESSEE. EVEN IF THE CONTENTION OF THE ASSESSEE NOW IS THAT RS. 12,02,000/- IS ALSO RELATE D TO THE BUSINESS, BUT THE MEAGER PROFIT EARNED BY ASSES SEE AND SHOWN IN THE RETURN OF INCOME AT RS. 1,57,400/- AND THAT NO DETAILS OF PURCHASE AND SALES HAVE BEEN MAINTAINED WOULD CLEARLY PROVE THAT THE CONTENTION OF THE ASSESSEE IS AFTER THOUGHT AND WITHOUT SUBSTANTI ATED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. 5. CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE APPE AL OF THE ASSESSEE. SAME IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD MAY,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD