Joshi K.Manuel, Kottayam V. The ITO, Kottayam

ITA 31/COCH/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8608 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 10-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2015
• Court: TRIBUNAL
• Department Lawyers: SHANTHAM BOSE
• Assessee Lawyers: C B M WARRIER
• Keywords: Unexplained investment; Business income; Opportunity of being heard
• Section: 80C; 143(3); 153A; 69

Judgement Text

I.T.A. NOS.31-37/COCH/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE.K, JM I.TA. NOS. 31-37/COCH/2015 (ASST YEARS: 2006-07 TO 2012-13) JOSHI K. MANUEL, KARANKAL HOUSE, ELIKULAM(PO), POOVARANI, KOTTAYAM-686 577. THE INCOME TAX OFFICER, WARD-2, KOTTAYAM. (ASSESSEE -APPELLANT) VS (REVENUE-RESPONDENT) PAN NO. ALAPM 1621N ASSESSEE BY SHRI C.B.M. WARRIER, CA REVENUE BY SHRI SHANTHAM BOSE, CIT(DR) DATE OF HEARING 10/05/2016 DATE OF PRONOUNCEMENT 24/05/2016 ORDER PER BENCH: THESE APPEALS OF THE ASSESSEE ARISE FROM TH E ORDER OF THE LD. CIT(A)-IV, KOCHI DATED 30-09-2014 FOR THE ASSESSMENT YEARS 200 6-07-2012-13. 2. THE ASSESSEE HAS RAISED THE COMMON GROUNDS IN A LL THE APPEALS. HOWEVER, WE REPRODUCE THE GROUNDS RAISED IN THE ASSESSMENT Y EAR 2006-07IN I.T.A. NO.31/COCH/2015 AS UNDER: 1. THE APPELLANT HAD PRODUCED COPY OF MONEY LENDIN G LICENSE AND AGREEMENT FOR THE BUSINESS OF DEALING IN OLD VEHICL ES AND DAILY TRIPS TO BANGALORE AS EVIDENCE OF BUSINESS CARRIED OUT BY TH E APPELLANT IN ADDITION TO MEAT BUSINESS. THE DEPOSIT OF RS.30,30,000/- AS OU T OF THE VARIOUS BUSINESS CARRIED OUT BY THE APPELLANT. BUT CREDIT WAS GIVEN FOR RS.96,000/- ONLY BEING THE RETURNED INCOME INSTEAD OF THE GROSS RECEIPTS F ROM BUSINESS. 2. THE APPELLANT HAD RECEIVED RS.6,00,000 FROM HIS RELATIVES MR. K.M. THOMAS AND FR. K.M. JOSEPH BY BANK TRANSFER. I.T.A. NOS.31-37/COCH/2015 2 3. THE APPELLANTS RECEIPTS FROM VEHICLE BUSINESS A ND MONEY LENDING BUSINESS AMOUNTED TO RS.3,01,000/- AND RS.41,300 WERE TREATE D AS INCOME DEDUCTING THE EVIDENCES PRODUCED. THE ASSESSING OFFICER HAD F OUND OUT THAT THE APPELLANT HAD OTHER BUSINESS DURING THE FINANCIAL Y EAR 2006-07 PARA 6 OF ASSESSMENT ORDER FOR AY 2007-08. 4. THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE CONFIRMED IN THE APPELLATE ORDER WITHOUT CONSIDERING THE EVIDENCES P RODUCED. 5. OTHER GROUNDS AND EVIDENCES TO BE PRODUCED AT THE TIME OF HEARING MAY ALSO BE CONSIDERED. 3. THE EFFECTIVE GROUNDS OF APPEAL ARE GROUND NO S. 1, 2 & 3 WHICH ARE BEING DECIDED BY THIS ORDER. GROUND NOS. 4 & 5 ARE GENER AL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 4. AS REGARDS GROUND NO. 1, THE BRIEF FACTS OF THE CASE ARE THAT ON ENQUIRY WITH THE FEDERAL BANK, WHERE THE ASSESSEE MAINTAINED ACC OUNT RELEVANT TO THE ASSESSMENT YEARS 2006-07 TO 2012-13, IT WAS FOUND T HAT THE ASSESSEE HAS MADE SEVERAL CASH DEPOSITS DURING THIS PERIOD WHICH ARE DETAILED AS UNDER: ASSESSMENT YEAR CASH DEPOSITS IN FEDERAL BANK ACCOUNT/DHANALAKSHMI BANK (RS.) 2006-07 30,36,000/- 2007-08 76,56,000/- 2008-09 59,33,000/- 2009-10 1,37,66,500/- 2010-11 31,40,500/- 2011-12 36,37,505/- 2012-13 8,39,900/- I.T.A. NOS.31-37/COCH/2015 3 THE ASSESSING OFFICER ASKED FOR THE SOURCES OF THE CASH DEPOSITS, BUT DESPITE SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE , ASSESSING OFFICER FOUND THAT NO SATISFACTORY REPLY HAS BEEN GIVEN BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER HAS CONSIDERED THE ELEMENT OF INCOME AND TH E DEPOSITS WHICH WERE FOUND EXPLAINED, BUT FOR THE REMAINING UNEXPLAINED CASH DEPOSITS HAS INVOKED THE PROVISIONS OF SECTION 69 AND ADDED THE SAME TO THE TOTAL INCOME. THE OTHER ADDITIONS FOR THE UNCONFIRMED INVESTMENT, THE ADDIT IONS HAVE BEEN MADE U/S. 69 AND THE ASSESSMENT HAS BEEN CONCLUDED AT A TOTAL INCOME OF RS.39,72,300/- AS AGAINST THE INCOME RETURNED OF RS.96,000/-. 5. THE CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 6. AS REGARDS GROUND NO. 1, IT WAS HELD BY THE ASSESSING OFFICER WHICH IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: - 10. IN RESPONSE TO THIS THE ASSESSEES AUTHORISED REPRESENTATIVE APPEARED ON 12.03.2013 AND FILED EXPLANATION FOR THE CASH DE POSIT AND OTHER CREDITS. HE STATED THAT THE SOURCE OF CASH DEPOSIT REPRESENT S THE TOTAL TURNOVER OF HIS MEAT BUSINESS. HE ALSO STATED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF VEHICLES ON BEHALF OF T.P. VILSON, LEYMERIDIAN TOURS AND TRAVELS, COCHIN. HE ALSO STA TED THAT HE HAD AVAILED LOAN OF RS.2,00,000/- FROM MEENACHIL CO-OPERATIVE B ANK AND THE SAME WAS DEPOSITED IN HIS ACCOUNT. 11. REGARDING THE OTHER RECEIPTS, THE ASSESSEE STA TED THAT HE HAD RECEIVED RS.4,00,000/- AND RS.2,00,000/- FROM SHRI K.M. THOM AS AND FR. K.M. JOSEPH. HE ALSO CLAIMED TO HAVE RECEIVED CAR SALES RECEIPT TO THE TUNE OF I.T.A. NOS.31-37/COCH/2015 4 RS.3,01,000/- AND MONEY LENDING BUSINESS RECEIPTS O F RS.41,300/-. THE REPLY OF THE ASSESSEE WAS EXAMINED. 12. THE ASSESSEE IN HIS RETURN HAD SHOWN THE GROSS TURNOVER OF MEAT BUSINESS AT ONLY RS.9,60,000/-. HE FILED NET INCOME OF RS.96 ,000/- ESTIMATED AT 10% OF TURNOVER. THE ASSESSEE HAS NOT DECLARED ANY BUSINE SS OF PURCHASE AND SALE OF VEHICLES ON BEHALF OF T.P. VILSON. HE ALSO DID NOT DECLARE ANY BUSINESS, CONDUCTING DAILY TRIPS TO BANGALORE IN HIS RETURN. THE ASSESSEE ALSO DID NOT SHOW ANY BUSINESS OF CAR SALES OR MONEY LENDING BUS INESS. 13. IN THE ABOVE CIRCUMSTANCE, A LETTER WAS ISSUED TO THE ASSESSEE TO SHOW CAUSE WHY: A) HIS EXPLANATION FOR CASH DEPOSIT OF RS.30,30,0 00/- SHOULD NOT BE REJECTED AS THE TOTAL TURNOVER FOR THE MEAT BUSINESS WAS SHO WN ONLY AT RS.9,60,000/- AND NO OTHER BUSINESS WERE SHOWN BY HIM IN HIS RETU RN OF INCOME FILED. B) HE WAS ASKED TO MENTION THE DATE OF RECEIPT OF LOAN AMOUNTING TO RS.2,00,000/- FROM MEENACHIL CO-OPERATIVE BANK AND THE PURPOSE FOR WHICH IT WAS UTILIZED. C) FURNISH MODE OF RECEIPT OF RS.4 LAKHS AND RS.2 LAKHS FROM K.M. THOMAS AND FR. K.M. JOSEPH. D) HE WAS ALSO ASKED TO FURNISH DETAILS OF THE CA R SALES RECEIPT OF RS.3,01,000 WITH CONCRETE EVIDENCE. E) HE WAS ALSO ASKED TO SHOW CAUSE WHY HIS CLAIM OF RECEIPTS TO THE TUNE OF RS.,41,300/- BEING FROM MONEY LENDING BUSINESS SHOULD NOT BE REJECTED AS HE HAD NOT STATED ANY SUCH BUSINESS IN HIS RETUR N OF INCOME. 14. IN REPLY TO THIS, THE ASSESSEE FILED A REPLY DATED 21.3.2011 SUBMITTING THE FOLLOWING: 14.1 HE WAS ENGAGED IN WHOLESALE AND RETAIL BUSINES S. THE GROSS TURNOVER RETURNED WAS NOT CORRECT AS IT WAS MUCH HIGHER. TH E ASSESSEE WAS CONDUCTING DAILY TRIP TO BANGALORE AND THE AGREEMEN T FOR THE SAME WAS FILED EARLIER. HE ALSO STATED THAT SINCE MR. T.P. VILSON DIED ON 12.7.2008, CONFIRMATION FROM MRS. WILSON WHO IS NOW WORKING AB ROAD, WILL BE SUBMITTED SOON. I.T.A. NOS.31-37/COCH/2015 5 14.2 LOAN OF RS.2 LAKHS FROM MEENACHIL CO-OPERATIV E BANK WAS RECEIVED ON 5.8.2005 AND THE AMOUNT WAS UTILIZED FOR VEHICLE BU SINESS/MONEY LENDING BUSINESS. 14.3 CONFIRMATION FROM K.M. THOMAS AND FR. K.M. JOS EPH HAS NOT BEEN RECEIVED AND WILL BE SUBMITTED SOON. THE AMOUNTS W ERE RECEIVED THROUGH BANK TRANSFER. 14.4 RECEIPTS OF RS.3,01,000/- REPRESENTS GROSS REC EIPTS FROM VEHICLE SALES AND THE COMMISSION MAY BE ASSUMED AT 10% IN THE ABS ENCE OF EXACT DETAILS. 14.5 RECEIPTS OF RS.14,300/- ARE REPAYMENT OF LOAN IN MONEY LENDING BUSINESS AND INCOME MAY BE FIXED AT 15%. 15. THE REPLY OF THE ASSESSEE HAS BEEN EXAMINED IN DETAIL. 15.1 THE ASSESSEES SUBMISSION THAT THE TOTAL TURNO VER FROM MEAT BUSINESS WAS MUCH HIGHER THAN THE RS.9,60,000/- RETURNED CAN NOT BE ACCEPTED. IF THE TURNOVER WAS MUCH HIGHER, THE ASSESSEE SHOULD H AVE VOLUNTARILY SHOWN IT AT A HIGHER VALUE AND RETURNED A HIGHER INCOME. SI NCE THE ASSESSEE HAD RETURNED TURNOVER TO THE TUNE OF RS.9,60,000/- ONL Y AND NET INCOME AFTER ESTIMATED EXPENDITURE AT RS.96,000/- CREDIT FOR THE SAME CAN ONLY BE GIVEN AS AN EXPLANATION FOR THE CASH CREDITS OF RS.30,30, 000/-. 15.2 THE ASSESSEES CLAIM THAT HE WAS CONDUCTING D AILY TRIPS TO BANGALORE ALSO CANNOT BE ACCEPTED. THE ASSESSEE HAD RETURNED INCOME FROM MEAT BUSINESS AND AGRICULTURAL INCOME ONLY. WHEN THE AS SESSEE WAS ASKED VIDE THIS OFFICE LETTER DATED 22.8.2012 TO FURNISH THE V ARIOUS SOURCE OF INCOME, HE REPLIED VIDE LETTER DATED 12.10.2012 THAT HIS SOURC E IS FROM MEAT BUSINESS AND AGRICULTURAL INCOME. HE DID NOT MENTION ABOUT ANY SUCH BUSINESS OF PLYING BUS. HENCE, THIS EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED AND IS THEREFORE REJECTED. 15.3 THE ASSESSEE HAS STATED THAT THE LOAN OF RS.2 LAKHS FROM MEENACHIL CO- OPERATIVE BANK WAS RECEIVED ON 5.8.2005 AND THE SAM E WAS UTILIZED FOR VEHICLE BUSINESS/MONEY LENDING BUSINESS. VERIFICAT ION OF THE BANK ACCOUNT IN FEDERAL BANK REVEALS NO CASH DEPOSIT OF RS.2,00, 000/- IS MADE IN THAT ACCOUNT ON 5.8.2005 OR NEARBY DATE. THEREFORE, IT IS CLEAR THAT THIS LOAN FROM MEENACHIL CO-OPERATIVE BANK WAS NOT DEPOSITED IN HI S FEDERAL BANK ACCOUNT. THUS THE ASSESSEE HAS SATISFACTORILY EXPLA INED ONLY RS.96,000/- OUT OF THE CASH DEPOSIT OF RS.30,30,000/-. IN ABOVE CI RCUMSTANCE, THE AMOUNT OF RS. 29,34,000/- IS ASSESSED AS UNEXPLAINED INVES TMENT U/S. 69. I.T.A. NOS.31-37/COCH/2015 6 7. THE CIT(A) OBSERVED THAT THE ASSESSEE HAS HAR DLY FURNISHED ANY EVIDENCE SUBSTANTIATING HIS CLAIM FOR EXPLAINING THE SOURCE OF CASH DEPOSITS AT THE TIME OF APPEAL PROCEEDINGS AND THE ASSESSING OFFICER HAS GO NE INTO EACH AND EVERY DETAIL OF THE TRANSACTIONS AND HAS COMPARED WITH TH E EVIDENCES MADE AVAILABLE BEFORE HIM AND ACCORDINGLY, HE FOUND NO I NFIRMITY IN THE ORDER OF THE ASSESSING OFFICER AND CONFIRMED THE ADDITION SO MAD E BY THE ASSESSING OFFICER. 8. THE LD. COUNSEL FOR THE ASSESSEE MADE THE SUB MISSIONS FOR ALL THE YEARS STARTING FROM 2006-07 TO 2012-13 AS UNDER: THE APPELLANT IS ENGAGED IN THE RETAIL BUSINESS IN MEAT, BUS SERVICES TO BANGALORE, MONEY LENDING BUSINESS AND PETROL AND DI ESEL RETAIL OUTLET IN THE NAME, KARTHIKA FUELS. (A.Y. 2011-12). DURING THE P ERIOD OF TAMIL NADU GENERAL ASSEMBLY ELECTION ON 5-4-2011, THE VEHICLE IN WHICH THE ASSESSEE TRAVELING WAS INTERCEPTED AND CASH TO THE EXTENT OF RS.3,96,500/- WAS SEIZED BY THE STATE GOVERNMENT AUTHORITIES AND CASH WAS TA KEN OVER BY THE INCOME TAX DEPARTMENT. SUBSEQUENTLY, WARRANT OF AUTHORIZA TION U/S. 132A WAS INITIATED ON 09.04.2011. ASSESSMENT U/S. 153A IS C OMPLETED FOR THE AY 2006-07 TO 2011-12 AND ASSESSMENT U/S. 143(3) IS COMPLETED FOR THE A.Y. 2012-13. THE ASSESSEE IS HAVING AGRICULTURAL INCOME OVER AND ABOVE THE OTHER BUSINESS INCOME AND THE AGRICULTURAL INCOME IS DISCLOSED IN THE RETURN FILED BY THE APPELLANT. THE APPELLANT WAS MAINTAINING ACCOUNTS WITH FEDERAL BANK FOR THE A.YS. 2006- 07, 2007-08 AND 2008-09 AND FOR THE A.Y. 2009-10 AC COUNTS ARE MAINTAINED WITH DHANALAXMI BANK, AXIX BANK AND FEDERAL BANK AN D THE BANK ACCOUNTS ARE CONTINUING. FOR THE A.Y. 2011-12, THE APPELL ANT WAS MAKING ACCOUNT WITH FEDERAL BANK AND INDIAN OVERSEAS BANK FOR KART HIKA FUELS. AS PER THE ASSESSMENT ORDER, THE ADDITIONS ARE MADE IN THE FOLLOWING MANNER: I.T.A. NOS.31-37/COCH/2015 7 AY 2006-07: INCOME RETURNED RS.96,000/- DEPOSIT IN BANKS (PARA 15(3) OF THE A.O. RS.29,34,0 00/- AMOUNT RECEIVED FROM K.M. THOMAS AND FR. K.M. THOMAS: (4 LAKHS + 2 LAKHS) (PARA 16 OF A.O.) RS.6,00,000/- RECEIPTS FROM VEHICLE SALES (AS PER PARA 17 OF THE A.O.) RS.3,01,000/- REPAYMENT OF LOAN IN MONEY LENDING BUSINESS (PARA 18 OF THE A.O.) RS.41,300/- TOTAL INCOME AGRICULTURAL INCOME RS.39,72,300/- RS.90,000/- AY 2007-08: INCOME RETURNED RS.1,20,000/- DEPOSIT IN BANK (PARA 14(3) OF THE A.O.) RS.74,46,9 03/- 10% OF RECEIPTS FROM VEHICLE SALES (AS PER PARA 15 OF THE A.O.) RS.68,000/ - TOTAL INCOME AGRICULTURAL INCOME RS.76,34,903/- RS.1,30,000/- AY 2008-09: INCOME RETURNED RS.1,27,810/- DEPOSIT IN BANKS (PARA 14(3) OF THE A.O.) RS.57,43, 000/- 10% OF RECEIPTS FROM VEHICLE SALES (AS PER PARA 15 OF THE A.O.) RS.1,75,259/- REPAYMENT OF LOAN IN MONEY LENDING BUSINESS (PARA 16 OF THE A.O.) RS.3,82,677/- TOTAL INCOME AGRICULTURAL INCOME RS.64,28,746/- RS.4,30,000/- AY 2009 - 10: INCOME RETURNED RS.1,39,210/- DEPOSIT IN BANKS (PARA 15(3) OF THE A.O.) RS.1,36,1 6,500/- RECEIPT FROM PIONEER HOLIDAYS (PARA 16 OF THE A.O. ) RS.30,482/- RECEIPTS FROM VEHICLE SALES (AS PER PARA 17 OF THE A.O.) RS.6,43,283/- RECEIPTS FROM MONEY LENDING BUSINESS (PARA 18 OF THE A.O.) RS.3,58,793/- DEPOSIT IN AXIS BANK (PARA 19 OF THE A.O.) RS.4,61, 188/- I.T.A. NOS.31-37/COCH/2015 8 ADDITION BY REJECTION OF CLAIM U/S. 80C (PARA 21 OF A.O.) RS.10,794/ - TOTAL INCOME AGRICULTURAL INCOME RS.1,52,60,250/- RS.3,50,000/- AY 2010-11: INCOME RETURNED RS.2,63,510/- DEPOSIT IN BANKS (PARA 15(3) OF THE A.O.) RS.28,26, 500/- 10% OF RECEIPTS FROM VEHICLE SALE (PARA 16 OF THE A.O.) RS.28.000/- DEPOSIT IN DHANALAXMI BANK (PARA 17 OF THE A.O.) RS.14,44,237/- DEPOSIT IN FEDERAL BANK (PARA 18 OF THE A.O.) RS.1, 84,436/- ADDITION BY REJECTION OF CLAIM U/S. 80C (PARA 20 OF A.O.) RS.16,885/- TOTAL INCOME AGRICULTURAL INCOME RS.47,63,568/- RS.2,35,000/- (NOTE: AS PER ASSESSMENT ORDER, TOTAL INCOME ARRIVE D IS RS.47,91,568/-, BY MISTAKE IN TOTALLING) AY 2011-12: INCOME RETURNED RS.2,22,340/- DEPOSIT IN INDIAN OVERSEAS BANK, PANDALAM (PARA 13 OF THE A.O.) RS.33,82,007/- - CASH DEPOSIT IN FEDERAL BANK (PARA 16 OF THE A.O.) RS.6,83,000/- DEPOSIT IN FEDERAL BANK (PARA 17 OF THE A.O.) RS.3, 68,665/-- ADDITION BY REJECTION OF CLAIM U/S. 80C (PARA 18 OF THE A.O.) RS.24,240/- TOTAL INCOME AGRICULTURAL INCOME RS.46,80,252/- RS.4,80,000/- AY 2012-13: INCOME RETURNED RS.2,70,150/- SEIZED CASH (396,500 300,000) (PARA 11 OF THE A.O .) RS96,500/-- CASH DEPOSIT IN BANK (PARA 14 OF THE A.O.) RS.4,39, 175/- I.T.A. NOS.31-37/COCH/2015 9 DEPOSIT IN FEDERAL BANK (PARA 15 OF THE A.O.) RS.14,51,564/- ADDITION BY REJECTION OF CLAIM U/S. 80C (PARA 16 OF THE A.O.) RS.4,488/- TOTAL INCOME AGRICULTURAL INCOME RS.22,61,877/- RS.5,40,000/- THE ASSESSING OFFICER HAS CONSIDERED ALL THE DEPOSI TS IN THE BANKS AS THE INCOME OF THE APPELLANT. THE APPELLANT WAS IN THE PRACTICE OF DEPOSITING ALL THE MONEY COLLECTED FROM VARIOUS BUSINESSES TO THE BANK ACCOUNT AND THE EXPENSES FOR THE BUSINESSES ARE MET OUT OF WITHDRAW AL FROM THE SAME BANK ACCOUNT. THE APPELLANT HAS ENCLOSED CASH FLOW STATEMENT AND SUMMARY OF BANK TRANSACTION FOR ALL THE ASSESSMENT YEARS 2006-07 TO 2012-13 (PAPER BOOK PAGE NO. 1-14). FROM THE SUMMARY OF BANK TRANSACTION AN D CASH FLOW STATEMENT, IT CAN BE SEEN THAT ALL THE DEPOSITS AND WITHDRAWALS A RE IN CASH FOR MEETING THE EXPENDITURE AND NO AMOUNT IS ACCUMULATED. THE COPY OF THE BANK STATEMENT WITH FEDERAL BANK AND INDIAN OVERSEAS BAN K ARE ENCLOSED. (PAPER BOOK PAGE NO. 30 TO 113 AND 92 TO 108). THE APPELLANT WAS CARRYING ON THE RETAIL SALES OF PETROL AND DIESEL IN THE NAM E OF M/S. KARTHIKA FUELS AND WAS MAINTAINING ACCOUNT WITH INDIAN OVERSEAS BANK F OR THIS PURPOSE. THE AGREEMENT FOR RUNNING THE PETROL PUMP AND OTHER CON NECTED DOCUMENTS ARE ENCLOSED IN THE PAPER BOOK (PAGE NO. 17 TO 25). ALL THE DEPOSITS IN THE INDIAN OVERSEAS BANK ACCOUN T, WHICH ARE THE SALES PROCEEDS OF FUEL IN THE PETROL PUMP AND PAYMENTS AR E MADE TO BHARATH PETROLEUM LTD. FROM THE SAME BANK ACCOUNT. THE ASSE SSING OFFICER OVERLOOKED THIS ASPECT AND CONSIDERED ALL THE DEPOS ITS IN THE BANK ACCOUNT ARE THE UNEXPLAINED INCOME AND TOTAL OF THE DEPOSIT S IN THE BANK ACCOUNT IS ASSESSED AS INCOME. THE APPELLANT WAS RUNNING FEW BUSES TO BANGALORE ON THE BASIS OF AN AGREEMENT WITH MR. WILSON (COPY OF THE AGREEMENT IN PAGES 26 TO 28 AND ENGLISH TRANSLATION IN PAGE 29 OF THE PAPER BOOK AR E ENCLOSED). ALL THE RECEIPTS FROM THE BUS OPERATION ARE DEPOSITED IN TH E BANK ACCOUNT AND AMOUNTS ARE WITHDRAWN IN CASH FOR MEETING THE EXPEN DITURE. IN THIS CASE ALSO, THE ASSESSING OFFICER ASSESSED T HE ENTIRE DEPOSIT IN THE BANK ACCOUNT AS INCOME OF THE APPELLANT AND FOR MEETING EXPENDITURE WITHDRAWALS ARE MADE FROM THE BANK ACCOUNTS. I.T.A. NOS.31-37/COCH/2015 10 THE APPELLANT MAY SUBMIT THAT, THE ASSESSMENT IS GR OSSLY INCORRECT SINCE THE ENTIRE RECEIPTS ARE TREATED AS INCOME OF THE APPELL ANT. IN THE SUMMARY OF BANK TRANSACTION IN THE PAPER BOOK FOR EACH OF THE ASSESSMENT YEAR IT IS FOUND THAT CASH DEPOSITS ARE WITHDRAWN FOR MEETING THE EXPENDITURE OF BUSINESS. THE APPELLANT FAILED TO OFFER THE CORRECT INCOME FR OM THE VARIOUS BUSINESSES RUN BY HIM SUCH AS RETAIL TRADING IN MEAT, BUS SERV ICES, RUNNING PETROL PUMP AND MONEY LENDING. THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED ONLY NET INCOME FROM THE BUSINESS FOR THE PURPOSE OF ASS ESSMENT. IN THE ABSENCE OF BOOKS OF ACCOUNT THE NET INCOME MAY BE ESTIMATED ON THE BASIS OF DETAILS AVAILABLE FROM SIMILAR ASSESSEES WITH SIMILAR BUSI NESS. IN VIEW OF THE ABOVE, THE APPELLANT MAY SUBMIT THAT THE ASSESSMENT OF THE GROSS AMOUNT OF DEPOSITS MAY BE CANCELLED AND NET I NCOME FROM VARIOUS BUSINESSES MAY BE ESTIMATED REASONABLY AND HENCE, T HE ASSESSMENT MAY BE CANCELLED. 9. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. THE ASSESSEE IN THE PRESENT CASE IS STATED TO HAVE ENGAGED IN THE BUS SERVICES, RETAIL BUSINESS IN MEAT, MONEY LENDING BUSINESS AND PETROL AND DIESEL RETAIL OUTLET IN THE NAME OF M/S. KARTHIKA FUELS. THERE IS NO D ISPUTE TO THE FACT THAT THE ASSESSEE IS HAVING AGRICULTURAL INCOME OVER AND ABO VE THE INCOME OF OTHER BUSINESSES WHICH IN FACT HAS BEEN DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THE ASSESSEE MAINTAINED ACCOUNTS WITH FE DERAL BANK FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09 AND F OR THE ASSESSMENT YEAR 2009-10, THE ACCOUNTS ARE MAINTAINED WITH DHANALAXM I BANK, AXIS BANK AND FEDERAL BANK AND FOR THE ASSESSMENT YEAR 2011-12, T HE ASSESSEE HAD MAINTAINED I.T.A. NOS.31-37/COCH/2015 11 ACCOUNTS WITH FEDERAL BANK AND INDIAN OVERSEAS BANK FOR KART HIKA FUELS. THE ASSESSING OFFICER HAS MADE MANY ADDITIONS AS PER TH E DETAILS REPRODUCED HEREINABOVE. THE ASSESSING OFFICER HAS IN FACT CON SIDERED ALL THE DEPOSITS IN THE BANKS AS THE INCOME OF THE ASSESSEE. WHEREAS IT HAD BEEN STATED AND THE CASH FLOW STATEMENT HAS BEEN SUBMITTED WHICH IS A MATTER OF RECORD WITH BOTH THE AUTHORITIES BELOW THAT THE ASSESSEE WAS IN PRACTICE OF DEPOSITING ALL THE MONEY COLLECTED FROM VARIOUS BUSINESSES IN THE BANK ACCOU NT AND THE EXPENSES FOR THE BUSINESSES ARE ALSO MET OUT OF WITHDRAWALS FROM THE SAME BANK ACCOUNT. NO DEFECT IN THE CASH FLOW STATEMENT HAS BEEN POINTED OUT BY ANY OF THE AUTHORITIES BELOW. FROM THE SUMMARY OF BANK TRANSA CTIONS AND CASH FLOW STATEMENT, IT IS EVIDENT THAT THE WITHDRAWALS MADE IN CASH WERE FOR MEETING THE EXPENDITURE AND NO AMOUNT THEREFROM HAS BEEN ACCUMU LATED BY THE ASSESSEE. COPIES OF THE BANK ACCOUNTS ARE ON RECORD AND ARE A VAILABLE WITH BOTH THE AUTHORITIES BELOW. THE CONNECTED DOCUMENT FOR RUNN ING THE PETROL AND DIESEL RETAIL OUTLET IN THE NAME OF M/S. KARTHIKA FUELS WA S PLACED ON RECORD BY THE ASSESSEE AND WAS AVAILABLE BEFORE BOTH THE AUTHORIT IES BELOW. ALL THE DEPOSITS IN THE INDIAN OVERSEAS BANK ACCOUNT ARE THE SALE PR OCEEDS OF FUEL IN THE PETROL PUMP AND PAYMENTS FROM THE SAID ACCOUNT ARE MADE TO BHARAT PETROLEUM LTD. FROM THE SAME BANK ACCOUNT. THIS FACT WAS OVERLOOK ED BY THE ASSESSING OFFICER AS WELL AS BY THE LD. CIT(A) AND ACCORDINGLY, THE A SSESSING OFFICER CONSIDERED ALL THE DEPOSITS IN THE BANK ACCOUNT AS UNEXPLAINED INC OME WHICH ACTION OF THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT(A). I.T.A. NOS.31-37/COCH/2015 12 11. THE ASSESSEE WAS RUNNING FEW BUSES TO BANGALOR E ON THE BASIS OF AN AGREEMENT WITH MR. T.P. WILSON FOR WHICH THE COPY O F THE AGREEMENT IS AVAILABLE IN PB PG. NOS. 26-28 AND ENGLISH TRANSLATION IN PB PG. 29 WHERE ALL THE RECEIPTS OF THE BUS OPERATIONS WERE DEPOSITED IN THE BANK ACCOU NT AND WITHDRAWALS WERE MADE FOR MEETING OUT THE EXPENDITURE FOR THE SAID B US OPERATIONS. INSPITE OF THE FACT THAT THE SAID AGREEMENT WAS PLACED ON RECORD, THE ASSESSING OFFICER TREATED THE ENTIRE DEPOSITS IN THE BANK ACCOUNT AS THE INCOME OF THE ASSESSEE. 12. IN FACT THE ASSESSEE HAS NOT BEEN ABLE TO DEPIC T THE CORRECT INCOME OUT OF THE VARIOUS BUSINESSES CARRIED OUT BY HIM SUCH A S RETAIL TRADING IN MEAT, BUS SERVICES, RUNNING OF PETROL PUMP AND MONEY LENDING. THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE NET INCOME FROM THE BU SINESSES FOR THE PURPOSE OF ASSESSMENT AND IN THE ABSENCE OF BOOKS OF ACCOUNT M AINTAINED BY THE ASSESSEE, THE NET INCOME SHOULD HAVE BEEN ESTIMATED ON THE BASIS OF THE DETAILS AVAILABLE FROM SIMILAR ASSESSEES IN SIMILAR BUSINES SES. THIS ASPECT HAS NOT BEEN EXAMINED AND CORRECT ASSESSMENT HAS NOT BEEN MADE B Y THE ASSESSING OFFICER. IN THE INTEREST OF JUSTICE, WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO IS DIRECTED TO ESTIMATE THE CORRECT INC OME BY BRINGING ON RECORD THE NET PROFIT DECLARED IN THE CASE OF SIMILAR ASSE SSEES IN SIMILAR BUSINESSES OF RETAIL TRADING IN MEAT, BUS SERVICES, RUNNING OF PE TROL PUMP AND MONEY LENDING AND APPLY THE AVERAGE OF THE SAME TO VARIOUS BUSINE SSES CARRIED OUT BY THE I.T.A. NOS.31-37/COCH/2015 13 ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . ACCORDINGLY ISSUE IS ALLOWED FOR STATISTICAL PURPOSES 13. AS REGARDS GROUND NO. 2 IN I.T.A. NO.31/COCH /2015, THE BRIEF FACTS OF THE CASE AS PER THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW: 16. AS DISCUSSED IN PARA 14.3, THE ASSESSEE CLAIM ED THAT THE AMOUNT OF RS.4 LAKHS AND RS.2 LAKHS RECEIVED FROM K.M. THOMAS AND FR. K.M. THOMAS WERE BY BANK TRANSFER. VERIFICATION OF THE ASSESSEES BANK ACCOUNT IN FEDERAL BANK REVEALS THAT THESE TWO AMOUNT WERE ACTUALLY CASH RE CEIPTS BY MEANS OF ANY WAY BANKING. IN THE ABSENCE OF PROPER EXPLANATION B Y THE ASSESSEE AND CONFIRMATION FROM THESE PARTIES, THE AMOUNT OF RS.6 ,00,000/- IS ADDED AS UNEXPLAINED INVESTMENT U/S. 69. 14. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. THE LD. CIT(A) FOUND THE CLAIM OF THE ASSESSEE AS INCORRECT. 15. THE LD. AR HAS MADE THE SUBMISSIONS AS REPRO DUCED HEREINABOVE. 16. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. IT WAS ARGUED THAT THE ASSESSEE COULD NOT PROCURE INFO RMATION FROM MR. K.M. THOMAS AND FR. K.M. THOMAS. THE ASSESSING OFFICER ALSO HAS NOT CONDUCTED FURTHER ENQUIRIES INTO THE MATTER, EVEN THOUGH THE TRANSFER OF MONEY WAS THROUGH PROPER BANKING CHANNEL. THEREFORE, IT WILL BE IN TH E INTEREST OF JUSTICE TO SET ASIDE I.T.A. NOS.31-37/COCH/2015 14 THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO IS DIRECTED TO CONDUCT FURTHER ENQUIRIES INTO THE MATTER AND DECIDE THE ISSUE DE N OVO BUT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THUS GROUND NO. 2 IS ALLOWED FOR STATISTICAL PURPOSES. 18. AS REGARDS GROUND NO. 3 IN I.T.A. NO.31/CO CH/2015, THE BRIEF FACTS OF THE CASE AS PER THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW: 17. AS DISCUSSED IN PARA 14.4, RECEIPTS OF RS.3,01 ,000/- IS STATED BY THE ASSESSEE TO REPRESENT GROSS RECEIPTS FROM VEHICLE S ALES. THE ASSESSEE HAS AGREED TO ASSUME 10% OF THE ABOVE AMOUNT AS COMMISS ION RECEIVED AND ASSESS THE SAME. THE ASSESSEE HAD RETURNED SOURCE O F INCOME ONLY FROM MEAT BUSINESS AND AGRICULTURAL INCOME. EVEN WHEN SPECIF ICALLY ASKED ABOUT HIS SOURCE, THE ASSESSEE HAD REITERATED THE SAME VIDE H IS LETTER DATED 12.10.2012. IN THE CIRCUMSTANCE, THE ASSESSEES REQUEST TO TREA T 10% OF THE RECEIPTS AS HIS INCOME IS REJECTED AND THE ENTIRE AMOUNT OF RS.3,01 ,000/- IS ADDED AS UNEXPLAINED INVESTMENT U/S. 69. 18. AS DISCUSSED IN PARA 13.5, RECEIPTS OF RS.41,3 00/- STATED, BY THE ASSESSEE, TO REPRESENT REPAYMENTS OF LOAN MONEY LENDING BUSIN ESS. THE ASSESSEE HAS AGREED TO ASSURE 15% OF THE ABOVE AMOUNT AS COMMISS ION RECEIVED AND ASSESS THE SAME. AS DISCUSSED IN PARA 14.2, THE ASS ESSEE HAD RETURNED SOURCE OF INCOME ONLY FROM MEAT BUSINESS AND AGRICULTURAL INCOME. EVEN WHEN SPECIFICALLY ASKED ABOUT HIS SOURCE, THE ASSESSEE H AD REITERATED THE SAME VIDE HIS LETTER DATED 12.6.12. IN THE CIRCUMSTANCE , THE ASSESSEES REQUEST TO TREAT 15% OF THE RECEIPTS AS HIS INCOME IS REJECTED AND THE ENTIRE AMOUNT OF RS.41,300/- IS ADDED AS UNEXPLAINED INVESTMENT U/S. 69. 19. THE LD. CIT(A) CONFIRMED THE ACTION OF THE A SSESSING OFFICER WITH REGARD TO THE DEALING IN SECOND HAND MOTOR CARS AND THE MONEY LENDING BUSINESS. I.T.A. NOS.31-37/COCH/2015 15 20. THE LD. AR HAS MADE THE SUBMISSIONS AS REPR ODUCED HEREINABOVE. 21. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 22. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. AS REGARDS THE MONEY LENDING BUSINESS, WE HAVE ALREADY DECIDED THE ISSUE HEREINABOVE AND ACCORDINGLY, OUR ORDER WITH REGARD TO ADDITION OF RS.41,300/- SHALL BE IDENTICALLY APPLICABLE AND THEREFORE, THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES FOR DECIDING THE SAME DE NOVO IN THE LIGHT OF OUR DECISION HEREINABOVE. 23. REGARDING VEHICLE SALES, THE ASSESSEES SUBMI SSION IS THAT HE HAS ACTED AS COMMISSION AGENT. LD. DR HAS NOT REBUTTED THE SAM E. NO CONTROVERSIAL FACTS HAVE BEEN BROUGHT ON RECORD BY ANY OF THE AUTHORITI ES BELOW OR LD. DR. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO A PPLY NET PROFIT RATE APPLICABLE TO SIMILAR ASSESSEES IN SIMILAR BUSINESSES AFTER A FFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS GROUND NO. 3 IS A LLOWED FOR STATISTICAL PURPOSES. 24. SINCE THE ISSUES IN ALL OTHER APPEALS, I.E., I.T.A. NOS. 32 TO 37/COCH/2015 ARE IDENTICAL TO THE ISSUES AS DECIDED IN I.T.A. NO.31/ COCH/2015 HEREINABOVE, THEREFORE, OUR ORDER IN I.T.A. NO. 31/COCH/2015 IS IDENTICALLY APPLICABLE TO ALL I.T.A. NOS.31-37/COCH/2015 16 OTHER APPEALS IN I.T.A. NOS. 32 TO 37/COCH/2015 AND ACCORDINGLY, ALL GROUNDS IN ALL THE APPEALS ARE SET ASIDE TO THE FILE OF THE AS SESSING OFFICER TO DECIDE THE SAME DE NOVO, AS DIRECTED HEREINABOVE, BUT BY PROVI DING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 25. IN THE RESULT, ALL THE APPEALS OF THE ASSESS EE IN I.T.A. NOS. 31-37/COCH/2015 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 -05-2016 SD/- SD/- ( GEORGE GEORGE.K) (B P JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : COCHIN DATED: 24TH MAY, 2016 GJ COPY TO: 1. JOSHI K. MANUEL, KARANKAL HOUSE, ELIKULAM(PO), P OOVARANI, KOTTAYAM-686 577. 2. THE INCOME TAX OFFICER, WARD-2, KOTTAYAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. DR/ITAT, COCHIN 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN I.T.A. NOS.31-37/COCH/2015 17 1. DATE OF DICTATION : 10/05/2016 2.DATE ON WHICH THE TYPED DRAFT IS PLACED 10/05/2016 BEFORE THE DICTATING MEMBER OTHER MEMBER: 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . PS/PS: 10/05/2016 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER : 11 /05/2016 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. PS/PS : 18/05/2016 6. DATE ON WHICH THE FILE GOES TO BENCH CLERK: / 05/2016 7. DATE ON WHICH THE FILE GOES TO HEAD CLERK: 8. DATE ON WHICH THE FILE GOES TO ASSISTANT REGISTR AR 9. DATE OF DISPATCH OF THE ORDER: