Valjibhai Surjibhai Harsoda, Rajkot V. The Income Tax Officer, Ward-1 (1)(5), Rajkot, Rajkot

ITA 301/RJT/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3392 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAMITA KHURANA
• Assessee Lawyers: AJAY DHOLARIYA
• Keywords: Set aside
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY , JUDICIAL MEMBER ./ I.T.A. NO. 301 /RJT/2018 ( / ASSESSMENT YEAR 2008 - 09 ) SHRI VALJIBHAI S. HARSODA , RADHE SHYAM, OPP. PIR DARGA, KOTHARIYA GAM, KOTHARIYA ROAD, RAJKOT / VS. I.T.O. , WARD - 1( 1 ) (5 ) , RAJKOT . ./ ./ PAN/GIR NO. : A EQPH3581K ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI AJAY DHOLARIYA . A .R / RESPONDENT BY : MS NAMITA KHURANA , SR. D . R. / DATE OF HEARING 26 /02 /20 20 / DATE OF PRONOUNCEMENT 28 / 0 2 /20 20 / O R D E R PER BENCH : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 1 , RAJKOT [ LD. CIT(A) IN SHORT] DATED 20/06 /2018 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) R.W.S . 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER R EFERRED TO AS 'THE ACT') DATED 31/03/2016 RELEVANT TO THE ASSESSMENT YEAR (A . Y . ) 2008 - 09 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO. 301 /RJT / 20 18 A.Y.20 08 - 0 9 - 2 - BASED ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 1, RAJKOT [HEREINAFTER REFERRED TO AS 'THE CIT(A)'] ERRED IN UPHOLDING THE ASSESSMENT ORDER DATED 31ST MARCH 2016 ISSUED BY THE LEARNED INCOME TAX OFFICER ,WARD 2(3), RAJKOT (HEREINAFTER REFERRED TO AS 'THE AO') UNDER - SECTION 143(3) R.W.S.L47 OF THE INCOME - TAX ACT, 1961 ('THE ACT') IN RELATIORI TO THE ASSESSMENT YEAR 2008 - 09 IN THE CASE O F SHRI VALJIBHAI SURJIBHAI HARSODA (HEREINAFTER REFERRED TO AS 'YOUR APPELLANT')} ON CERTAIN GROUNDS. YOUR APPELLANT'S GROUNDS OF APPEAL AGAINST THE ORDER OF THE CIT(A) ARE SPECIFICALLY STATED BELOW: GROUND OF APPEAL NO.L: THE CIT (A) ERRED IN UPHOLD ING THE TREATMENT OF THE AO THAT MERE NON FILING OF INCOME TAX RETURN DOES NOT DISQUALIFY THE CASH BALANCE AT BEGINNING OF ANY YEAR WHEN PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF PRECEDING TWO PREVIOUS YEARS WERE PLACED ON RECORD BEFORE LEARNED ASSES SING OFFICER TO JUSTIFY OPENING CASH BALANCE. GROUND OF APPEAL NO.2: THE CIT (A) ERRED IN UPHOLDING THE TREATMENT OF THE AO THAT SINCE IN THE CAPTIONED ASSESSMENT YEAR, ASSESSEE EARNED AGRICULTURE INCOME OF RS 363641/ - IN CASH, THERE CANNOT BE NIL CR - I~!:. BALANCE IN THE BEGINNING HAVING REGARD TO 34 YEARS OF ENGAGEMENT INTO AGRICULTURE ACTIVITY COUPLED WITH FACTS OF IRRIGATED LAND HOLDING OF 9.82 ACRE. GROUND OF APPEAL NO.3 THE CIT(A) ERRED IN UPHOLDING THE TREATMENT OF THE ASSESSING OFFICER THAT ENOUGH OPPORTUNITY OF HEARING WAS GIVEN TO THE APPELLANT WITHOUT APPRECIATING THE FACT THAT THERE WAS NO SHOW CAUSE NOTICE ISSUED EITHER WRITTEN OR ORALLY IN RESPECT OF CAPTIONED ADDITION. YOUR APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR WITHDR AW THE GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THIS APPEAL. ITA NO. 301 /RJT / 20 18 A.Y.20 08 - 0 9 - 3 - 2. T HE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO FOR RS.3,63,641/ - ON ACCOUNT OF DEPOSIT OF CASH. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND CLAIMED TO BE ENGAGED IN THE ACTIVITY OF AGRICULTURE. THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS DEPOSITED CASH AND WITHDRAWN CASH FROM THE BANK ACC OUNT VIZ A VIZ HE HAS DECLARED THE INCOME IN THE YEAR UN DER CONSIDERATION AMOUNTING TO RS.3, 63 , 641.00 ONLY. ACCORDINGLY, THE AO AFTER CONSIDERING THE DEPOSITS , WITHDRAWAL FROM THE BANK IN CASH AND THE INCOME OF THE CURRENT YEAR HAS WORKED OUT THE PEAK BALA NC E OF CASH AMOUNTING TO RS. 5 , 12 ,359/ - AND PROPOSED TO TAX THE SAME AS UNEXPLAINED INCOME OF THE ASSESSEE . HOWEVER, THE ASSESSEE CLAIMED SUCH AMOUNT OF CASH BALANCE WAS AVAILABLE WITH HIM OUT OF THE OPENING CASH BALANCE OF RS. 8, 98 , 705 / - . BUT THE AO DISBE LIEVED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT HE HAS NOT FURNISHED ANY PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF THE EARLIER YEARS FOR VERIFICATION. ACCORDINGLY HE TREATED THE AMOUNT OF CASH OF RS. 5, 12 , 359 / - AS INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 4. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT HE HAS FURNISHED THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FOR THE IM MEDIATE PRECEDING PREVIOUS YEA R WHEREIN CASH BALANCE AS ON 31/03/2007 WAS SHOWN AT RS. 8, 98 , 705 / - . 4.1 THE ASSESSEE ALSO SUBMITTED THAT SUCH CASH BALANCE WAS ACCUMULATED OUT OF THE INCOME EARNED BY HIM IN THE LAST SEVERAL YEARS. THE ASSESSEE ALSO FURNISH ED THE DETAILS OF THE LAND HOLDING WHICH WAS USED FOR THE AGRICULTURAL ACTIVITIES. ITA NO. 301 /RJT / 20 18 A.Y.20 08 - 0 9 - 4 - 5. HOWEVER THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 1.2 EVEN THOUGH THE ASSESSEE HAS CLAI MED AGRICULTURE INCOME TO BE ONLY SOURCE OF INCOME AND CLAIMED OPENING BALANCE OF RS.8,98,705/ - IT IS SEEN THAT EVEN IN ASSESSMENT YEAR 2008 - 09 HIS RETURNED INCOME WAS ONLY ABOUT 3 LAKHS BEFORE DEDUCTIONS. FROM THIS MEAGER INCOME THE CLAIM OF ASSESSEE OF O PENING CASH IN HAND OF RS.8.98 LAKHS IS NOT REASONABLE. 1.3 I ALSO FIND THAT THE ASSESSING OFFICER HAS BEEN QUITE REASONABLE IN ASSESSING INCOME OF THE ASSESSEE. IT CAN BE SEEN THAT THE TOTAL CASH DEPOSITS OF THE ASSESSEE WERE RS.21,75,340/ - AND THE ASSES SING OFFICER HAS MADE AN ADDITION OF ONLY RS.5,12,359/ - TAKING PEAK OF DEPOSITS AND ALLOWING FURTHER DEDUCTION OF CURRENT SAVINGS. B EING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR BEFORE US FILE D A PAPER BOOK RUNNING FRO M PAGES 1 TO 26 AND DR E W OUR ATTENTION ON THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS ON 31 MARCH 2007 WHERE THE OPENING CASH BALANCE WAS SHOWN. 7. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTH ORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT CASE RELATES TO THE FACT WHETHER THERE WAS THE OPENING CASH BALANCE AVAILABLE WITH THE ASSESSEE AS ON 31 MARC H 2007. FROM THE PRECEDING DISCUSSION WE NOTE THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF THE PROFIT AND LOSS ACCOUNT AND THE BALANCE SHEET DEPICTING THE AMOUNT OF CASH AVAILABLE WITH HIM. NONE OF THE AUTHORITIES BELOW HAS POINTED OUT ANY DEFECT IN THE DETAILS FILED BY THE ASSESSEE. 8.1 SIMILARLY THE ASSESSEE WAS HOLDING THE LAND TO THE TUNE OF 9.8 ACRES WHICH WAS USED FOR AGRICULTURAL ACTIVITIES. THIS FACT WAS ALSO NOT DOUBTED BY THE ITA NO. 301 /RJT / 20 18 A.Y.20 08 - 0 9 - 5 - AUTHORITIES BELOW. AS SUCH THE LEARNED CIT (A) HAS REJECTED THE CONTE NTION OF THE ASSESSEE BY OBSERVING THAT THE JUSTIFICATION FURNISHED BY THE ASSESSEE IS NOT INCONSONANCE OF THE INCOME DECLARED BY THE ASSESSEE AT RS. 3 LACS FOR THE YEAR UNDER CONSIDERATION DESPITE THE FACT THAT IT WAS CLAIMED BY THE ASSESSEE THAT HE HAS BE EN ENGAGED IN THE AGRICULTURAL ACTIVITIES FOR THE LAST SEVERAL YEARS. THUS, IN THE GIVEN FACTS AND CIRCUMSTANCES, WE ARE NOT CONVINCED WITH THE FINDING OF THE LEARNED CIT (A). IN OUR CONSIDERED VIEW, THE CONTENTIONS OF THE ASSESSEE HAS NOT BEEN REJECTED BA SED ON ANY COGENT REASONS. ACCORDINGLY WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28 / 02 /20 20 - SD - - SD - ( MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DATED 28 /02 /20 20 MANISH