Sh. Mukhtiar Singh, Phagwara V. The Income Tax Officer, Phagwara

ITA 333/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8758 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: PAVITAR SINGH
• Keywords: Unexplained cash credit; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.333(ASR)/2016 ASSESSMENT YEAR: 2008-09 SH. MUKHTIAR SINGH, 129-C, MODEL TOWN, PHAGWARA. PAN:AMSPS-6582M VS. INCOME TAX OFFICER, WARD-I, PHAGWARA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PAVITAR SINGH (CA.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR.) DATE OF HEARING: 20.01.2017 DATE OF PRONOUNCEMENT: 21.02.20 17 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), JALANDHAR, DATED 01.04.2016, FOR ASST. YEAR: 2008-0 9. 2. THE ASSESSEE HAD TAKEN VARIOUS GROUNDS OF APPEAL . GROUND NO.2 RELATES TO THE GRIEVANCE OF ASSESSEE WITH THE ACTIO N OF LD. CIT(A), BY WHICH HE HAD DECLINED TO ADMIT ADDITIONAL EVIDENC E WHICH WAS IN THE FORM OF COPY OF ACCOUNT OF M/S SAVITRI WOODS, HOSHI ARPUR. THE LD. AR SUBMITTED THAT M/S. SAVITRI WOODS, HOSHIARPUR HAD S ENT A PAYMENT OF RS.3,98,899/- VIDE DRAFT DATED 3.3.2008 ISSUED BY I NDIAN OVERSEAS BANK, HOSHIARPUR PAYABLE AT PHAGWARA. THE ABOVE DRAFT WA S GOT PREPARED BY ITA NO.33 3(ASR)/2016 ASST. YEAR: 2008-09 2 BANK AFTER CHARGING OF RS.1,101/- AS BANK CHARGES. HE SUBMITTED THAT THE LD. CIT(A) HAS GRAVELY ERRED IN SUSTAINING THE ADDITION ON THE GROUND THAT THE ASSESSEE HAD FAILED TO DEMONSTRATE THAT DR AFT WAS PREPARED BY M/S. SAVITRI WOODS, FROM INDIAN ONVERSEAS BANK, HOS HIARPUR WHEREAS THE FACT REMAINS THAT DRAFT WAS PREPARED AGAINST CH EQUE ISSUED BY M/S. SAVITRI WOODS. IN THIS RESPECT, OUR SPECIFIC ATTENT ION WAS INVITED TO THE COPY OF LETTER WRITTEN BY INDIAN OVERSEAS BANK. THE COPY OF CHEQUE ISSUED BY SAVITRI TRADERS ALONGWITH COPY OF BANK DR AFT WAS ALSO BROUGHT TO OUR NOTICE AND THEREFORE, IT WAS PLEADED THAT IT WAS A MATERIAL EVIDENCE AND WHICH LD. CIT(A) SHOULD HAVE ACCEPTED. THE LD. AR FURTHER SUBMITTED THAT AS REGARDS THE AM OUNT OF RS.3,97,080/- THE ASSESSEE HAD RECEIVED PAYMENT IN CASH ON ACCOUNT OF SALE OF POPULAR TREES TO M/S SHREE DEVA TRADERS, YAMUNANAGAR, AND COPY OF STATEMENT HAD ALREADY BEEN FILED BEFORE ASS ESSING OFFICER AND NEVER RAISED ANY OBJECTION DURING ORIGINAL ASSESSME NT PROCEEDINGS. REGARDING OTHER ADDITIONS SUSTAINED BY LD. CIT(A), THE LD. AR SUBMITTED THAT ASSESSEEE WAS AN AGRICULTURIST AND HIS ONLY SO URCE OF INCOME WAS AGRICULTURE AND THE REMAINING DEPOSITS WERE MADE OU T OF AGRICULTURAL PROCEEDS OF CURRENT YEAR INCOME AS WELL AS INCOME O F THE PREVIOUS YEARS. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT WA S PRAYED THAT THE ADDITIONS SUSTAINED BY LD. CIT(A) BE DELETED. ITA NO.33 3(ASR)/2016 ASST. YEAR: 2008-09 3 3. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT DURING ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE ADDITIONS ON ACCOUNT OF UNEXPLAINED CREDITS TO THE TUNE OF RS.17,44,886/- AND RS.2,50,000/- RES PECTIVELY. THE ASSESSING OFFICER HAD OBSERVED THAT ASSESSEE HAD MA DE DEPOSITS OF RS.49,60,844/- IN KOTAK MAHINDRA BANK OUT OF WHICH RS.40.70 LACS WAS DEPOSITED IN CASH AND THE REST WAS DEPOSITED THROUG H CHEQUS/DRAFTS. THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE TO EXPLA IN THE SAME. THE ASSESSEE SUBMITTED THAT HE HAD SOWN POPULAR SAPLING S IN AN AREA SPREAD ON ABOUT 13-14 ACRE IN THE YEAR 1999-2000 AND THE P AYMENTS DEPOSITED IN THE BANK REPRESENTED SALE OF POPOLAR TREES. THE ASSESSING OFFICER HELD THAT OUT OF TOTAL DEPOSITS OF RS.49,60,844/-, THE A SSESSEE WAS ABLE TO PROVE THE SOURCE OF DEPOSITS TO THE EXTENT OF RS.32 ,15,958/- AND THE REMAINING DEPOSITS IN THIS BANK ACCOUNT AMOUNTING RS.17,44,886/-, WERE UNEXPLAINED, THEREFORE, HE MADE THE ADDITION. 4. AS REGARDS OTHER ADDITION OF RS.2,50,000/-, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAD DEPOSITED CASH OF RS.6, 00,000/- IN HIS SAVING BANK ACCOUNT IN KOTAK MAHINDRA BANK. OUT OF HIS HE HELD RS.2,50,000/- TO BE UNEXPLAINED AND THEREFORE, HE M ADE THE ADDITION OF THE SAME. THE LD. CIT(A) AFTER OBTAINING REMAND REP ORT FROM ASSESSING OFFICER RESTRICTED THE ADDITION OF RS.17,44,886/- T O RS.11,18,281/- AND THE OTHER ADDITION OF RS.2,50,000 WAS UPHELD. WHIL E ALLOWING PART RELIEF TO THE ASSESSEE, THE LD. CIT(A) REJECTED THE EVIDEN CE WITH REGARD TO CREDIT ITA NO.33 3(ASR)/2016 ASST. YEAR: 2008-09 4 ENTRY OF RS.3,98,899/- ON ACCOUNT OF PAYMENT RECEIV ED FROM SAVITRI WOODS WHEREAS WE FIND THAT THE ASSESSEE HAD RECEIVE D PAYMENT THROUGH BANK DRAFT AS HAS BEEN EVIDENCED BY CERTIFICATE OF INDIAN OVERSEAS BANK DATED 07.11.2016. THIS FACT IS FURTHER PROVED FROM THE FACT THAT ASSESSEE HAD FILED A COPY OF DEMAND DRAFT FOR RS.3,98,899/- WHICH WAS MADE BY M/S. SAVITRI WOODS IN FAVOUR OF ASSESSEE BY ISSUING A CHEQUE NO.3,46,778/-, A COPY OF WHICH IS PLACED IN PAPER B OOK. THEREFORE, THE ACTION OF LD. CIT(A) IN NOT ACCEPTING THE SAID EVID ENCE IS NOT APPROPRIATE. SIMILARLY, WE FIND THAT THERE IS A COPY OF ACCOUNT OF M/S SH. DEVA TRADERS WHEREIN THE FIRM HAD SHOWN TO HAVE PAID AN AMOUNT OF RS.3,97,080/- IN CASH BETWEEN PERIOD 21.11.2007 TO 04.12.2007. THE LD. CIT(A) HAS HELD THAT ASSESSEE HAD FAILED TO PROVE T HE CASH OF RS.3,97,080/- CLAIMED TO HAVE BEEN PAID BY M/S SHRE E DEVA TRADERS, JAMUNANAGAR. THE LD. CIT(A) HAD HELD THAT ASSESSEE HAD NEITHER PRODUCED ANY DOCUMENTARY EVIDENCE NOR ANY PRODUCED ORIGINAL CONFIRMATION FROM THE PARTIES EVEN DURING APPELLATE PROCEEDINGS, WHEREAS THE ASSESSEE HAD CLAIMED TO HAVE FILED THE STATEMEN T OF SHREE DEVA TRADERS, JAMUNANAGAR ON 15.12.2010 BEFORE ASSESSING OFFICER FOR WHICH ASSESSEE CLAIMED THAT ASSESSING OFFICER HAD NOT RAI SED ANY OBJECTION. THEREFORE, WE DEEM IT APPROPRIATE TO REMIT THE ISSU E BACK TO THE OFFICE OF ASSESSING OFFICER WHO SHOULD EXAMINE THE TWO EVIDEN CES REGARDING ISSUE OF DEMAND DRAFT BY M/S SAVITRI WOODS AND FURTHER CA SH SHOWN TO HAVE BEEN RECEIVED FROM SHREE DEVA TRADERS. ITA NO.33 3(ASR)/2016 ASST. YEAR: 2008-09 5 5. AS REGARDS, THE DEPOSIT OF RS.2,50,000/-, WE FIN D THAT THE LD. ASSESSING OFFICER HAD ACCEPTED THE EXPLANATION WITH REGARD TO CASH IN HAND OF RS.3,50,000/- BUT THE EXPLANATION WITH REGA RD TO WITHDRAWALS FROM KRISHI CREDIT ACCOUNT WITH PNB HAS BEEN ACCEPT ED ONLY TO THE EXTENT OF RS.1,00,000/- AS THERE WERE WITHDRAWALS O F RS.1,00,000/- ONLY PRIOR TO THE DATE OF DEPOSIT. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE TOOK THE STAND THAT DEPOSITS WERE MADE OUT OF PAST SAVINGS WHICH THE LD. CIT(A) HAS HELD TO BE WITHOUT ANY BAS IS, THEREFORE, HE HAD CONFIRMED THE ADDITION. WE FIND THAT ASSESSEE BEING AN AGRICULTURIST, THE EXISTENCE OF CASH IN HAND FROM PAST SAVING CANNOT B E COMPLETELY RULED OUT, THEREFORE, WE DEEM IT APPROPRIATE TO SEND THIS ISSUE ALSO TO THE OFFICE OF ASSESSING OFFICER WHO SHOULD EXAMINE THE EXISTEN CE OF CASH IN HAND OUT OF PAST SAVINGS AFTER CONSIDERING THE QUANTUM O F AGRICULTURAL INCOME IN THE HANDS OF ASSESSEE FOR THE PREVIOUS YEARS. NE EDLESS TO SAY THAT ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 6. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.02. 2017 . SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:21.02.2017. /PK/ PS. ITA NO.33 3(ASR)/2016 ASST. YEAR: 2008-09 6 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER