Ekta Suresh Lakhani, Vasco V. Income Tax Officer, Ward - 2(4), Panaji

ITA 331/PAN/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0384 (ITAT-PANAJI)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2014-2015
• Appeal Filed On: 08-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER I.T.A. No.331/PAN/2018 Assessment Year: 2014-15 Ekta Suresh Lakhani, B-1, Sapana Enclave, 1 st Floor, Vaddem, Mormugao, Vasco-da-Gama – 403802. PAN: AIWPL0086F Vs. ITO, Ward-2(4), Pundalik Niwas Bldg., Panaji, Goa.. Appellant Respondent Date of Hearing 15.06.2022 Date of Pronouncement 16.06.2022 Assessee by None Department by Shri Mayur Kamble, Sr. DR ORDER PER C.M. GARG, JM: This appeal has been filed by the assessee against the order of the CIT(A)-2, Panaji, dated 11.06.2018 for assessment year 2014-15. 2. The sole effective ground raised by the assessee is that the learned CIT(A) failed to appreciate that the appellant has been receiving consignment sale proceed in cash which has been deposited in the bank and bank account has been duly incorporated in the books of account. Therefore, the observations of the CIT(A) that 2 ITA No.331/PAN/2018 Ekta Suresh Lakhani vs. ITO cash cannot be deposited since it is withdrawn earlier is not applicable to the facts of the present case. 3. When the appeal was taken up for hearing, it was informed by the Registry that notice for today’s hearing has been properly served on the assessee, but, neither the assessee nor the authorized representative appeared before the Bench nor any adjournment application has been filed. Since the notice for today’s hearing has been properly served on the assessee, therefore, we proceed to decide the appeal ex parte qua the assessee after hearing the arguments of the learned Sr. DR. 4. From the grounds as well as from the submissions of the assessee before the learned CIT(A), as has been reproduced in para 3.1 of the first appellate order, we notice that regarding cash deposit of Rs.2,49,632/-, it was contended by the assessee that the assessee has earned profit of Rs.3,45,547/- which has been accounted and duly offered to taxation in the return of income. It was also contended that the bank account is duly accounted for in the books of account which is also regarding the transactions relating to the consignment business of the assessee. It was also explained that the profit earned from the consignment business has been routed through the bank account of the assessee and it is part and parcel of profit earned by the assessee from the said business. It was also explained by the assessee before the learned CIT(A) that unless it is proved that deposit of cash of Rs.2,49,632/- is through some other source of income, the same cannot be added as unexplained cash deposit to the bank account of the assessee. In para 5.3 of the assessment order, the similar 3 ITA No.331/PAN/2018 Ekta Suresh Lakhani vs. ITO contention was raised before the Assessing Officer that the impugned amount of Rs.2,49,632/- was ploughed back by the assessee during the relevant financial period, but, the same was rejected by the Assessing Officer by observing that the assessee during the year has neither substantiated by supporting documents nor looked genuine considering the business carried out by the assessee. 5. The learned Sr. DR, supporting the assessment order as well as the first appellate order, submitted that the assessee failed to substantiate with supporting documents that the profit earned by the assessee from consignment business was ploughed back, therefore, the Assessing Officer was right in making addition in the hands of the assessee and the learned CIT(A) was also right in confirming the addition. 6. On careful consideration of above submissions, first of all, we may point out that undisputedly the assessee has filed the return of income declaring a total income of Rs.3,20,740/- for the present assessment year 2014-15. The impugned amount of Rs.2,49,632/- is lesser than the income shown by the assessee from consignment business. From para 3.2 of the first appellate order, it is also discernible that the learned CIT(A) has noted the factual position that the total credits in the bank account are to the tune of Rs.1,68,69,259/- and Rs.1,60,36,820/- is out of consignment sales and Rs.5,82,807 is out of recovery from debtors which was deposited to the bank account of the assessee. The figures of these two segments have been accepted by the 4 ITA No.331/PAN/2018 Ekta Suresh Lakhani vs. ITO authorities below and only an amount of Rs.2,49,632/- has been disputed by making addition in the hands of the assessee. From assessment order para 5.2 & 5.3 and in para 3.1 it is the consistent submission and explanation of the assessee regarding the impugned cash deposit of Rs.2,49,632/- that the profit earned from consignment business has been routed through the bank account of the assessee which is lesseer than the amount of profit earned by the assessee during the relevant financial period, therefore, the same cannot be taxed in the hands of the assessee. It was not an explanation of the assessee neither before the Assessing Officer nor before the learned CIT(A) that the impugned amount is out of withdrawals made by the assessee, but, the assessee is consistently submitting that the profit from consignment business has been offered to tax and when the assessee’s business receipts are deposited to the bank account which also include profit element, then, the small amount of Rs.2,49,632/- cannot be disputed and taxed in the hands of the assessee. In our humble understanding, if this amount of Rs.2,49,632/- which is lesser than the amount of profit shown by the assessee in the return of income is taxed, then, that would amount to double taxation in the hands of the assessee. Therefore, the explanation of the assessee being plausible is accepted that the impugned amount is nothing, but, the amount of profit earned from consignment business which was deposited to the bank account of the assessee inclusive of total deposit/receipts from consignment business. Therefore, the addition cannot be made in the hands of the assessee and, thus, we direct the Assessing Officer to delete the addition. 5 ITA No.331/PAN/2018 Ekta Suresh Lakhani vs. ITO 7. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 16 th June, 2022. Sd/- Sd/- (Girish Agrawal) (C.M. Garg) Accountant Member Judicial Member Dated:16.06.2022 dk Copy of the order forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. Pr. CIT 5. DR, ITAT, Panaji, Goa. 6. Guard File True Copy By Order Sr. Private Secretary, ITAT Panaji Bench, Panaji (On Tour)