ITO, Ajmer V. SHRI SANJAY MATAI, Ajmer

ITA 312/JPR/2012

• Counselvise Citation: 31223114 RSA 2012
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence
• Section: 68; 154

Judgement Text

ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 312/JP/2012 ASSESSMENT YEAR: 2008-09 PAN : ALKPM 9533 D THE ITO VS. SHRI SANJAY MATAI WARD- 1 (2) PROP. M/S. METRO WINES AJMER MADAR GATE, AJMER (APPELLANT) (RESPONDENT) DEPARTMENT BY: MRS. NEENA JEPH ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) DATE OF HEARING: 08-12-2014 DATE OF PRONOUNCEMENT: 09 -01-2015 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), AJMER DATED 03-01-2012; FOLLOWING GROUNDS ARE RAISED: 1. ACCEPTING ADDITION/FRESH EVIDENCE UNDER RULE 46A WHEREAS THE CONDITION LAID DOWN UNDER SUB CLAUSES ( A),(B),(C) & (D) OF SUB RULE 46A OF I.T. RULES 1962 ARC NOT F ULFILLED. 2. ADMITTING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AS REQUIRED UNDER SUB RULE (2) OF RULE 46A OF I.T.A. RULE 1962, WITHOUT RECORDING IT WRITING THE REASO NS FOR ITS ADMISSION. ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 2 3. DELETING THE ADDITION MADE BY THE AO FOR RS. 5,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/ S 69A OF THE I.T. ACT 1961, CONTRARY TO THE DETAILED EXAMINATION MADE BY THE AO. 4. DELETING THE ADDITION OF RS. 5,14,400/- ON ACCOU NT OF UNEXPLAINED CREDIT U/S 68 OF THE I.T. ACT , 196 1 CONTRARY TO THE DETAILED EXAMINATION MADE BY THE AO. 5. DELETING THE ADDITION OF RS.75,000/- ON ACCOUNT OF UNEXPLAINED CREDIT U/S 68 OF THE I.T.ACT,I961 CONTR ARY TO THE DETAILED EXAMINATION MADE BY THE AO. 6. DELETING THE ADDITION OF RS. 5,14,400/ - & RS 75,000/- ON ACCOUNT OF CASH CREDIT U/S 68 CONTRAR Y TO THE DETAILED EXAMINATION MADE BY THE AO. 7. DELETING ADDITION OF RS.28,000/- ON ESTIMATED INCOME FROM GANPATI TRADING THROUGH THE ASSESSEE HA VE SHOP OF BHANG & OPIUM PRODUCT IN THE NAME OF GANPATI TRA DING. 8. DELETING THE ADDITION. OF RS. 2,21,000 / - ON A/ C OF CASH DEPOSIT IN SB A/C IN THE NAME OF METRO FILLING STATION WHEN THE ASSESSEE FAILED TO PROVE THE TRANSFER OF AMOUNT FROM ANOTHER CONCERN WITH COGENT EVIDENCE. 9. DELETING THE ADDITION OF RS. 95,400/- ON ACCOUNT OF RENT PAYMENT WHEN THE RECIPIENT IS THE EXISTING ASS ESSEE WHO DID NOT DECLARE THE RENT IN HIS RETURN AND THE ASSE SSEE FAILED TO PROVE THE ACTUAL PAYMENT OF RENT WITH COGENT EVIDEN CE. 2.1 NONE APPEARED FOR THE ASSESSE, HOWEVER WRITTEN SUBMISSIONS ARE FILED, CONSEQUENTLY THE APPEAL OF THE ASSESSEE IS DISPOSED OFF AFTER CONSIDERING THOSE WRITTEN SUBMISSIONS AND PERUSING THE MATERIAL S AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 3 2.2 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D EALS IN WINES AND ESSAR FILLING STATION IN THE NAME OF METRO FILLING STATIO N. THE BOOKS OF ACCOUNT ARE CLAIMED TO BE AUDITED U/S 44AB, ACCORDING TO AO DES PITE ENOUGH OPPORTUNITIES THE ASSESSEE DID NOT PRODUCE PHYSICAL BOOKS OF ACCOUNT OF ITS BUSINESS; THERE WERE VARIATIONS IN THE TDS CERTIFIC ATES, DISCREPANCIES IN THE BUILDING ACCOUNT AND UNEXPLAINED CASH CREDITS WERE NOT SATISFACTORILY EXPLAINED AND OTHER ISSUES WERE NOT PROPERLY REPLIE D. CONSEQUENTLY THE IMPUGNED ADDITIONS WERE MADE. 2.3 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHEREIN THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WAS FILED BEFO RE LD. CIT(A). IT MAY BE MENTIONED THAT DURING THE PENDENCY OF FIRST APPEAL, THE AO PASSED AN ORDER U/S 154 OF THE ACT ON 15-02-2011 RECTIFYING A SMALL MISTAKE IN RESPECT OF UNEXPLAINED CASH CREDIT WAS REDUCED FROM RS. 5,44,4 00/- TO RS. 5,14,400/-. THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE BY FOLLOWING OBSERVATIONS. 3.1 IN THIS CASE AO MADE VARIOUS ADDITIONS TO THE TOTAL INCOME ON THE GROUND THAT APPELLANT HAS NOT PRODUCE D THE BOOKS OF ACCOUNT DURING THE COURSE OF ASSESSMENT P ROCEEDINGS . APPELLANT FILED APPLICATION FOR FLING ADDITIONAL EV IDENCE UNDER RULE 46A ON 02-08-2011 IN WHICH IT AS REQUESTED THA T :- THE MAIN REASON FOR NOT PRODUCING THE BOOKS OF ACCOUNT OF CAPTIONED A IS MAINLY THAT THE ASSESSEE MAINTAINS RECORDS ON ELECTRONIC SYSTEM, COMPLETE CA SH BOOK, LEDGER AND OTHER RECORDS ARE DULY COMPUTERIZE D. AS ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 4 AND WHEN ANY DETAILS CALLED FOR BY AO, THE COPY OF THAT LEDGER ACCOUNT CASH BOOK PRINT ETC. WERE SUBMITTED BEFORE THE AO ON RECORDS. EVEN THE CD (ELECTRONIC RECORDS SYSTEM) WAS ALSO SUBMITTED AS RECORDS WHICH WAS NOT ACCEPTED BY AO. LOOKING TO HUGE AND BULKY PRINTING OF RECORDS THE PHYSICAL PAPER FORM OF RECO RDS COULD NOT BE PRODUCED BEFORE AO. SINCE COMPLETE BOOKS OF ACCOUNT ON SYSTEM WAS SUBJE CT TO AUDIT AND AUDIT REPORT COPY SUBMITTED BEFORE THE AO AND NO DEFECTS THEREIN FOUND. 3.2 FROM THE PERUSAL OF RECORDS, IT IS FOUND THAT R EQUIRED DETAILS WERE FURNISHED BY APPELLANT BEFORE AO IN TH E FORM OF PRINTOUT OF VARIOUS LEDGER ACCOUNTS. SINCE THE BOOK S OF ACCOUNT MAINTAINED ON COMPUTER AND ARE ALSO SUBJECT TO AUDI T, PHYSICAL PRINTOUTS WERE NOT PRODUCED. HOWEVER, DATA WAS FURN ISHED IN THE FORM OF CD. IN SUCH A SITUATION, AO IS NOT JUST IFIED TO DRAW ADVERSE INFERENCE MERELY ON THE GROUND THAT BOOKS W ERE NOT PRODUCED. I THEREFORE, HOLD THAT AO COMPLETED THE A SSESSMENT WITHOUT GIVING ADEQUATE OPPORTUNITY TO THE APPELLAN T TO FILE EVIDENCE AND THE APPELLANT WAS THEREFORE, ALLOWED T O FILE ADDITIONAL EVIDENCE UNDER RULE 46A. THEREAFTER THE ADDITIONAL EVIDENCE WAS FORWARDED TO THE AO CALLING FOR REMAND REPORT. ON THE BASIS OF REMAND REPORT AND AD DITIONAL EVIDENCE, THE LD. CIT(A) DELETED THE ADDITIONS. 2.4 AGGRIEVED, THE REVENUE IS BEFORE US. 2.5 APROPOS REVENUES FIRST GROUND CHALLENGING THE ADMISSION OF ADDITIONAL EVIDENCE, THE LD. DR CONTENDS THAT THE A DDITIONAL EVIDENCE HAS ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 5 BEEN ADMITTED BY THE LD. CIT(A) IN UTTER VIOLATION OF PROVISIONS OF RULE 46A (1) OF INCOME TAX RULES BY FOLLOWING REASONS. (I) ADMITTEDLY THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE DULY AUDITED. NO AUDITOR WILL PREPARE AND AUDI T REPORT WITHOUT PHYSICAL BOOKS. THEREFORE, BOOKS WER E DELIBERATELY NOT PRODUCED BY THE ASSESSEE BEFORE AO . (II) THE LD. CIT(A) HAS HELD THAT RELEVANT DETAILS WERE FILED BY ASSESSE BEFORE AO IN THE FORM OF CD WHICH DOES NOT FIND ANY REFERENCE IN THE AOS ORDER. (III) THE STATEMENT OF FACTS AND GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) DOES NOT REFE R TO FILING OF ANY CD IN THIS BEHALF. (IV) THE AO TIME AND AGAIN ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND RELEVANT DETAILS. THUS SUFFICIENT OPPORTUNITY WAS PROVIDED BY THE AO TO TH E ASSESSE, IN THESE CIRCUMSTANCE ADDITIONAL EVIDENCE OUGHT NOT HAVE BEEN ADMITTED. (V) THE LD. CIT(A) WITHOUT CONSIDERING THE RECORD PROPERLY HAS GIVEN THE SUMMARY FINDINGS THAT THERE IS NO REQUIREMENT FOR THE ASSESSEE TO PRODUCE PHYSICAL B OOKS WHEN RELEVANT CD IS PRODUCED. RELIANCE IS PLACED BY THE LD. DR IN THE CASE OF MAN ISH BUILDWELL, 245 CTR 397 (DEL.) HOLDING THAT FOR ADMISSION OF ADDITIONA L EVIDENCE, IT IS IMPERATIVE FOR LD. CIT(A) TO COMPLY WITH THE MANDAT ORY PROVISIONS OF RULE ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 6 46A(1). IN THIS CASE THE RULE HAS NOT BEEN DULY COM PLIED WITH, THE ADMISSION OF ADDITIONAL EVIDENCE IS NOT PROPER. IT IS PLEADED THAT THE ADMISSION OF ADDITIONAL EVIDENCE BEING CONTRARY TO THE STATUTORY PROVISIONS OF RULE 46A, THE ADMISSION THEREOF AND RELIEF GRANTED THEREON I S UNTENABLE. 2.6 WE HAVE HEARD THE LD. DR AND CONSIDERING THE M ATERIAL AVAILABLE ON RECORD, WRITTEN SUBMISSIONS AND DOCUMENTS FILED BY THE ASSESSEE, WE FIND MERIT IN THE ARGUMENTS OF THE LD. DR. THE LD. CIT(A ) HAS ADMITTED THE ADDITIONAL EVIDENCE ON FOLLOWING COUNTS. (I) ADEQUATE OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE. (II) ASSESSEE'S BOOKS OF ACCOUNT THOUGH AUDITED YET THERE WAS NO OBLIGATION TO PRODUCE PHYSICAL BOOKS AS LONG AS THE SAME WAS PRODUCED IN CD FORM. IN OUR CONSIDERED VIEW BOTH THE FINDINGS OF THE LD. CIT(A) ARE NOT TENABLE AND NOT BORN OUT FROM THE RECORD. THE FINDING THAT ADEQUATE OPPORTUNITY OF HEARING WAS NOT GIVEN TO THE ASSESSEE IS NOT CORREC T INASMUCH AS THE AO HAS REPEATEDLY ASKED TO PRODUCE THE RELEVANT RECORD. IT DOES NOT APPEAR LOGICALLY THAT PHYSICAL BOOKS OF ACCOUNT WHICH ARE DULY AUDIT ED COULD NOT BE PRODUCED BY THE ASSESSEE AND SAME COULD BE PRODUCED IN THE C D FORM. THERE IS NO PLEADING THAT BOOKS OF ACCOUNT WERE LOST OR DESTROY ED FROM THE ASSESSEE. IN OUR CONSIDERED VIEW, THE ADMISSION OF ADDITIONAL EV IDENCE DOES NOT CONFORM ITA NO. 312/JP/2012 THE ITO, WARD- 1 (2), AJMER VS. SHRI SANJAY MATAI 7 WITH RULE 46(A) AND THE OBSERVATIONS OF HON'BLE DEL HI HIGH COURT IN THE CASE OF MANISH BUILDWELL, 245 CTR 397 (SUPRA). IN C ONSIDERATION THEREOF, WE ARE INCLINED TO SET ASIDE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENC E IN ACCORDANCE WITH LAW AND THE OBSERVATIONS MADE ABOVE, AFTER GIVING OPPOR TUNITY OF BEING HEARD TO BOTH PARTIES AND AFTER VERIFICATION OF THE ASSESSME NT RECORD. SINCE WE HAVE RESTORED BACK THE MATTER TO THE FILE OF THE LD. CIT (A), THE GROUNDS RAISED THEREIN ARE NOT DECIDED ON MERITS. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 9-01-2015 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 9 TH JAN. 2015 *MISHRA COPY FORWARDED TO:- 1.THE ITO, WED 1 (2),AJMER 2. SHRI SANJAY MATAI, AJMER 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 312/JP/2012) AR ITAT, JAIPUR