Rabindra Nath Senapati, Rayagada V. ITO, Rayagada

ITA 313/CTK/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90814 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHOVAN KRISHNA SAHU
• Assessee Lawyers: P C SETHI
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK B ENCH, CUTTACK , . . , BEFORE SHRI SUNIL KUMAR YADAV, JM & SHRI B.P.JAIN, AM ./ ITA NO.313/CTK/2010 ( ! ! ! ! / ASSESSMENT YEAR :2005-06) SRI RABINDRA NATH SENAPATI, R.K.NAGAR, AT/PO: RAYAGADA, DISTRICT RAYAGADA. VS. ITO, RAYAGADA, WARD, RAYAGADA ' ./ # ./ PAN/GIR NO. : AHZPS 1717 L ( '$ / APPELLANT ) .. ( % &'$ / RESPONDENT ) ( * * * * /ASSESSEE BY : SHRI P.C.SETHI * * * * /REVENUE BY : SHRI SHOVAN KRISHNA SAHU + ( / DATE OF HEARING : 18 TH MAY, 2015 -.! ( / DATE OF PRONOUNCEMENT 21 ST MAY,2015 / / / / / O R D E R PER B.P.JAIN, AM: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER D ATED 21-3-2011 OF THE LD CIT (A), BERHAMPUR, FOR THE ASSESSMENT YEAR 2006 -07, INTER ALIA , ON THE FOLLOWING GROUNDS :- 1. THAT, THE ASSESSMENT ORDER PASSED BY THE LEARNE D ASSESSING OFFICER IS ILLEGAL, ARBITRARY AND CONTRARY ON EVIDE NCE ON RECORD AND THEREFORE, IS LIABLE TO BE QUASHED AND/OR ANNUL LED. 2. THAT, THE LEARNED CIT(A) HAS COMMITTED A SERIOUS ERROR IN NOT APPRECIATING THE FACTS THAT THE ADDITION OF RS.2,70 ,000/- AS UNEXPLAINED INVESTMENT IS NOT IN ACCORDANCE WITH DU E PROCEDURE OF LAW AS ENVISAGED U/S.69 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) AND FOR TH AT MATTER THE ADDITION IS NOT SUSTAINABLE IN THE EYES OF LAW. 3. THAT, THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACT IN ISSUING NOTICE U/S.143(2) OF THE ACT ON AN EXTRA NEOUS REASON AND FOR THAT MATTER THE ASSESSMENT ORDER ALONG WITH DEMAND NOTICE AND PENALTY NOTICE ARE LIABLE TO BE QUASHED AND/OR ANNULLED. ITA NO313 OF 2010 2 4. THAT, THE LEARNED ASSESSING OFFICER HAS ISSUED N OTICE U/S.143(2) OF THE ACT WITHOUT PROCESSING THE RETURN AND FOR THAT MATTER ASSESSMENT ORDER, DEMAND NOTICE AND PENALTY NOTICE ARE LIABLE TO BE QUASHED AND/OR ANNULLED. 5. THAT, THE LEARNED CIT(A) HAS COMMITTED A SERIOUS IN NOT APPRECIATING THE FACTUAL ASPECT OF THE CASH BALANCE AS APPEAR ON 01.04.2004 WHICH IS NOTHING BUT CLOSING BALANCE ON 31.03.2004 AND FOR THAT MATTER THE CONFORMATION OF THE ORDER BY THE LEARNED CIT(A) IS NOT IN ACCORDANCE WITH THE FA CTS AND CIRCUMSTANCES OF THE CASE AND SAME IS LIABLE TO BE DELETED. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE TRIED TO EXPLAIN THE SOURCE OF DEPOSIT OF CASH IN THE BANK ACCOUNT M AINTAINED AT I.O.B. RAYAGADA FROM OPENING CASH BALANCE OF RS.2,70,000/ - AND CASH WITHDRAWALS FROM THE BANK ACCOUNT DURING THAT PERIOD. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE BASIS OF THE CLAIM OF CASH BALANCE OF RS.2,70,000/- AS ON 1.4.2004. THE ASSESSEE EXPLAINED THAT THE SOURCE AS OUT OF RE NTS AND DRAWINGS FROM THE FIRMS IN WHICH HE WAS A PARTNER KEPT WITH HIM OVER THE YEARS. RENT RECEIPTS FOR THE YEAR 1980-81 TO 2004-05 WAS COMPUTED AT RS.2,74,790 /-, DRAWINGS FROM M/S.SOURA SENAPATI AND M/S.RAJU WINES WERE CLAIMED AT RS. 84,000/- AND RS.70,000/- RESPECTIVELY DURING THE PAST FEW YEARS. AGAIN, DRAWING OF SOURA SENAPATI, HUF FROM M/S.SOURA SENAPATI AND DRAWINGS SMT MEENATI SENAPATI, SPOUSE OF THE ASSESSEE FROM M/S DOORDARSHAN WERE DE CLARED AT RS.65,000/- AND RS. 1,15,000/- RESPECTIVELY. THUS, THE SOURCE FOR THE OPENING BALANCE OF RS.2,70,000/- - WAS EXPLAINED AS FROM PAST SAVINGS OF THE ASSESSEE, HIS SPOUSE AND THE HUF. DURING THE COURSE OF THE ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS ALSO REQUIRED TO FURNISH CASH FLOW STATEMENT FOR TH E FY.2003-04. THE ASSESSEE DID NOT FURNISH THE SAME. ON EXAMINATION OF THE EN TRIES OF THE BANK ACCOUNT, ITA NO313 OF 2010 3 CASH DEPOSIT OF RS. 10,74,000/- WAS FOUND IN THE BA NK ON 31.03.2004. THERE BEING NO ADEQUATE CASH WITHDRAWAL FROM THE BANK ACC OUNT TO EXPLAIN SUCH CASH DEPOSIT ON 31.3.2004, THE AO OPINED THAT THE CLAIM THAT, RS.2,70,000/- WAS OUT OF OPENING BALANCE IS NOT ACCEPTABLE. AGAIN, THE AO O BSERVED THAT WHEN THE ASSESSEE HAS BEEN IN HABIT OF KEEPING CASH IN BANK ACCOUNT R EGULARLY, THE CLAIM THAT, CASH AVAILABLE IN THE PAST YEARS WERE ALLOWED TO BE ACCU MULATED AND WAS KEPT AS CASH IS NOT AN ACCEPTABLE EXPLANATION. HENCE, THE EXPLANAT ION OF THE ASSESSEE AGAINST THE CASH DEPOSIT IN THE BANK ACCOUNT TO THE TUNE OF RS. 2,70,000/- WAS FOUND UNSATISFACTORY. IT WAS IN THIS BACKDROP THAT THE AS SESSING OFFICER TREATED RS.2,70,000/- AS INCOME OF THE ASSESSEE AS UNEXPLA INED INVESTMENT. 3. THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESS ING OFFICER. 4. THE LD COUNSEL FOR THE ASSESSEE ARGUED THAT THE SOURCE OF OPENING BALANCE OF RS.2,70,000/- IS FROM THE PAST SAVINGS O F THE ASSESSEE, HIS SPOUSE AND THE HUF. 5. ON THE OTHER HAND, THE LD D.R. RELIED UPON THE O RDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE HAS SUBMITTED THE EXPLANATION WITH REG ARD TO CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE AS FROM THE OPENING CA SH OF RS.2,70,000/- AS OUT OF RENTS AND DRAWINGS FROM THE FIRMS IN WHICH HE WA S A PARTNER KEPT WITH HIM OVER THE YEARS. THE ASSESSEE WAS REQUIRED TO FURNI SH THE CASH FLOW STATEMENT IN THE IMMEDIATE PRECEDING YEAR AND THE SAME WAS NO T PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD CIT(A). IT IS ALSO UNDISPUTED THAT THE ASSESSEE HAD DEPOSITED RS.10,74,000/- IN INDIAN OVE RSEAS BANK ON 31.3.2004 ITA NO313 OF 2010 4 AND IT HAS BEEN OBSERVED BY BOTH THE AUTHORITIES BE LOW THAT THERE WAS NO ADEQUATE CASH WITHDRAWAL FROM THE BANK TO EXPLAIN S UCH CASH DEPOSIT ON 31.3.2004 AND, ACCORDINGLY, THE CLAIM OF THE ASSES SEE FOR AVAILABILITY OF CASH OF RS.2,70,000/- OUT OF OPENING BALANCE IS DIFFICULT T O BE ACCEPTED ESPECIALLY WHEN THE ASSESSEE HAS BEEN IN HABIT OF KEEPING CASH IN B ANK ACCOUNT REGULARLY. IN THE CIRCUMSTANCES AND FACTS OF THE CASE AND IN THE ABSENCE OF ANY EVIDENCE ON RECORD, BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US, WITH REGARD TO AVAILABILITY OF CASH WE FIND NO INFIRMITY IN THE OR DER OF THE LD CIT(A), WHO HAS RIGHTLY CONFIRMED THE ACTION OF THE ASSESSING OFFIC ER. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, GROUND NOS.2 & 5 ON MERITS ARE D ISMISSED. 7. GROUND NOS.1 & 6 ARE GENERAL IN NATURE AND, THER EFORE, DO NOT REQUIRE ANY ADJUDICATION. 8. AS REGARDS GROUND NOS.3 & 4 ON LEGAL ISSUE, NO D OCUMENTARY EVIDENCE HAS BEEN PLACED ON RECORD BY THE LD COUNSEL FOR THE ASSESSEE WITH REGARD TO THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT AND, A CCORDINGLY, SAID GROUND NOS.3 & 4 ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 /05/2015. SD/- SD/- ( ) (SUNIL KUMAR YADAV) ( . . ) (B. P. JAIN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 21 /05/2015 1 B.K.PARIDA, SR PS ITA NO313 OF 2010 5 111111111 / / / / %( %( %( %( 3!( 3!( 3!( 3!( / COPY OF THE ORDER FORWARDED TO : / / / / / BY ORDER, 4 44 4 / 5 5 5 5 (ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. '$ / THE APPELLANT : SRI RABINDRA NATH SENAPATI, R.K.NAGAR, AT/PO: RAYAGADA, DISTRICT RAYAGADA. 2. %&'$ / THE RESPONDENT.: ITO RAYAGADA, WARD, RAYAGADA 3. 6 ( ) / THE CIT(A), BERHAMPUR 4. 6 / CIT ,BHUBANESWAR 5. 7 %( , / DR, ITAT, CUTTACK 6. 9 :+ / GUARD FILE. &( %( //TRUE COPY//