The Income Tax Offcer, Ward-6(4), Ahmedabad V. Shri Vikram Mohanlal Rawal, Ahmedabad

ITA 3007/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8151 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 44AD; 143(3); 2; 69

Judgement Text

SMC-ITA NO. 3007/AHD/2015 ITO VS. SHRI VIKRAM MOHANLAL RAWAL ASSESSMENT YEAR: 2011-12 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NO. 3007/AHD/2015 ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER ............APPELLANT WARD 3(2)(10), AHMEDABAD VS. SHRI VIKRAM MOHANLAL RAWAL .......................RESPONDENT 19, AKSHAR BUNGALOWS, NEAR SMRUTI MANDIR, GHODASAR, AHMEDABAD - 380050 [PAN : ADAPR 1980 K] APPEARANCES BY: SANTOSH KARNANI FOR THE APPELLANT SUNIL TALATI FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 22.11.2017 DATE OF PRONOUNCING THE ORDER : 22.11.2017 D I C T A T E D O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF ORDER DATED 27.08.2015 PASSED BY THE CIT(A)-13, AHM EDABAD IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2011-12. 2. THE GRIEVANCES RAISED BY THE ASSESSING OFFICER A RE AS FOLLOWS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.44,02,687/- MADE U/S 69 OF THE ACT AND DIRECT ING TO TREAT THE CASH DEPOSITS IN BANK ACCOUNTS AS PAT OF THE TURNOVER AN D COMPUTE INCOME THEREON U/S 44AD OF THE ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY NOT APPRECIATING THE FACTS THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURC E OF THE CASH DEPOSITS WITH RELEVANT EVIDENCES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER. 3. THE SHORT ISSUE THAT I AM REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING TH E ADDITION OF RS.44,02,687/- MADE SMC-ITA NO. 3007/AHD/2015 ITO VS. SHRI VIKRAM MOHANLAL RAWAL ASSESSMENT YEAR: 2011-12 PAGE 2 OF 3 UNDER SECTION 69 OF THE ACT AND DIRECTING THE SAME TO BE TREATED AS PART OF THE TURNOVER AND COMPUTING INCOME THEREON UNDER SECTION 44AD OF THE ACT. 4. TO ADJUDICATE ON THIS ISSUE, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN CLOTHS AND AS THE TURNOVER IS LESS THAN RS.1 CRORE, THE ASSESSEE IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.15,75,187/- I N THE AXIS BANK, RELIEF ROAD BRANCH, AHMEDABAD AND RS.28,27,500/- IN THE DEVELOP MENT CREDIT BANK, RELIEF ROAD BRANCH, AHMEDABAD. THE ASSESSING OFFICER HAS TREATED THESE DEPOSITS AS UNEXPLAINED CASH CREDITS AND BROUGHT THE SAME TO TA X. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT (A) AND SUBMITTED THAT THESE DEPOSITS ARE OUT OF SALE PROCEEDS OF THE ASSESSEE A ND, AS SUCH, IT CANNOT BE BROUGHT TO TAX IN ENTIRETY AS UNEXPLAINED CREDITS. THE CONT ENTION OF THE ASSESSEE WAS THAT THESE AMOUNTS CAN ONLY BE TAXED UNDER SECTION 44AD OF THE ACT ON PRESUMPTIVE BASIS AS ASSESSEES TURNOVER. THE ASSESSEE ALSO F ILED EVIDENCES IN SUPPORT OF THE CONTENTION THAT THE DEPOSITS IN THESE TWO BANK ACCO UNTS ARE INDEED THE SALE PROCEEDS OF THE SAME BUSINESS CARRIED ON BY THE ASS ESSEE . THE LD. CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE AND NOTED THAT IT IS NOT REQUIRED TO FILE DETAILS RELATING TO PURCHASE AND SALES IF THE INCOME IS DET ERMINED AS PER PROVISIONS OF SECTION 44AD OF THE ACT, FOLLOWING THE JUDICIAL PRE CEDENT IN THE CASES OF CIT VS. SURINDER PAL ANAND, 192 TAXMAN 264 (P&H) AND ABHI D EVELOPERS VS. ITO, 12 SOT 444 (AHD) HOLDING THAT THE IMPUGNED ADDITIONS WERE UNSUSTAINABLE IN LAW. THE ASSESSING OFFICER IS AGGRIEVED BY THE RELIEF SO GRA NTED BY THE LD. CIT(A) AND IS IN APPEAL BEFORE US. 5. LEARNED DEPARTMENTAL REPRESENTATIVES CONTENTION IS THAT EVEN IN CASE OF A PERSON COVERED BY SECTION 44AD OF THE ACT, EVERY DE POSIT IN THE BANK ACCOUNTS CANNOT BE TREATED AS A PART OF THE TURNOVER. HE AL SO SUBMITS THAT NO DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER. THE LEARNE D DEPARTMENTAL REPRESENTATIVE THUS URGES ME TO REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THE FIGURES WITH RESPECT TO SALES W ITH THE HELP OF VAT AND SALES RETURNS OR ANY OTHER CORROBORATIVE EVIDENCES. 6. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUBMITS THAT SINCE THE ASSESSEE IS ENGAGED IN THE TEXTILE BUSINESS, THERE IS NO REQUIREMENT FOR FILING THE VAT AND SUCH LINKAGE OF SALES FIGURES WITH THE STAT UTORY RETURNS IS NOT POSSIBLE ON THE FACTS OF THIS CASE. HE ALSO SUBMITS THAT ALL T HE REQUISITE EVIDENCES WERE DULY PLACED BEFORE THE LEARNED CIT(A) AND THE LEARNED CI T(A) HAS CATEGORICALLY DEALT WITH SUCH EVIDENCES AT PAGE NO.9 OF THE IMPUGNED ORDER A ND EXPRESSED HIS SATISFACTION WITH THE SAME. IT IS ALSO POINTED OUT THAT THE ASS ESSING OFFICER, IN THE COURSE OF REMAND PROCEEDINGS, HAD AN OCCASION TO DEAL WITH TH ESE EVIDENCES AND NO ADVERSE COMMENTS WERE MADE BY HIM. LEARNED COUNSEL ALSO I NVITES MY ATTENTION TO THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR ASSESS MENT YEAR 2009-10 VIDE ITA SMC-ITA NO. 3007/AHD/2015 ITO VS. SHRI VIKRAM MOHANLAL RAWAL ASSESSMENT YEAR: 2011-12 PAGE 3 OF 3 NO.2981/AHD/2013 DATED 15.11.2016, WHEREIN AN IDENT ICAL ISSUE WAS REMITTED TO THE FILE OF THE ASSESSING OFFICER SINCE THE MATTER WAS DECIDED EX-PARTE IN THAT CASE AND, UPON THE MATTER BEING REMITTED, THE ASSESSING OFFIC ER HIMSELF HAS ACCEPTED THE PLEA THAT SUCH DEPOSITS ARE REQUIRED TO BE TREATED AS PA RT OF THE TURNOVER AND BROUGHT TO TAX UNDER SECTION 44AD OF THE ACT ACCORDINGLY. HE FURTHER SUBMITS THAT IN THE SUBSEQUENT YEAR NO SUCH ADDITIONS HAVE BEEN MADE. I AM THUS URGED TO UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DECLINE TO INTERFER E IN THE MATTER. 7. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 8. I FIND THAT THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE IS IN THE BUSINESS OF CLOTHING AND HIS TURNOVER IS LESS THAN RS.1 CRORES. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEES RETURN HAS BEEN FILED UNDER SECTION 44AD OF THE ACT AND THEREFORE THE ASSESSEE IS NOT REQUIRED TO BE MAINTAINED THE BOOKS OF ACCOUNTS. I HAVE NOTICED THAT THE CIT(A) HAS MADE A CATEGORICAL OBSERVATION WITH RESPECT TO HIS SATISFACTION WITH THE MATERIAL ON THE BASIS OF WHICH THE DEPOSIT S IN QUESTION CAN BE REASONABLY TREATED TO BE PART OF ASSESSEES TURNOVER. I HAVE A LSO NOTICED THAT THE ASSESSEE IS UNDISPUTEDLY CARRIED ON BONAFIDE BUSINESS AND APPRO PRIATE REGISTRATION, ETC. ARE OBTAINED WITH RESPECT TO THE SAME. THERE IS NO MAT ERIAL BROUGHT ON RECORD TO DISLODGE THE FINDINGS OF LEARNED CIT(A). IN VIEW O F THE ABOVE DISCUSSION AND BEARING IN MIND THE ENTIRETY OF THE CASE, I DEEM IT FIT AND PROPER TO UPHOLD THE WELL REASONED FINDINGS OF THE LEARNED CIT(A) AND DECLINE TO INTER FERE IN THE MATTER. 9. IN THE RESULT, THE APPEAL IS DISMISSED. DICTATED AND PRONOUNCED IN THE OPEN COURT TODAY ON THE 22 ND NOVEMBER, 2017. SD/- PRAMOD KUMAR (ACCOUNTANT M EMBER) AHMEDABAD, THE 22 ND DAY OF NOVEMBER, 2017 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD