The ITO, Ward-1(2)(4), Baroda V. Shri Nilesh S. Talegaonkar, Baroda

ITA 342/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8368 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 16-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK
• Keywords: Additional evidence
• Section: 148; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND MS.MADHUMITA ROY, JUDICIAL MEMBER ./ ITA.NO.342/AHD/2015 / ASSTT. YEAR: 2009-10 ITO, WARD - 1(2)(4) BARODA. VS. SRI NILESH S. TALEGAONKAR PROP: UNITED INTERNATIONAL TOURS & TRVELS 105-GARDEN VIEW COMPLEX SAYAJIGANJ, BARODA 390005. PAN : ACKPT 2056 M ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI O.P. PATHAK, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 01/05/2018 / DATE OF PRONOUNCEMENT: 03/05/2018 +,/ O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST ORDER OF THE CIT(A)-6, AHMEDABAD DATED 21.1 0.2014 ARISING IN THE ASSESSMENT ORDER DATED 6.3.2013 PASSED BY THE ASSES SING OFFICER UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT CONCER NING ASSESSMENT YEAR 2008-09. 2. REVENUE IN ITS APPEAL HAS IMPUGNED ACTION OF THE CIT(A) IN GRANTING PART RELIEF TO THE ASSESSEE AGAINST ADDITION OF RS. 54,59,176/- MADE BY THE AO TOWARDS UNEXPLAINED CASH DEPOSITS. ITA NO.342/AHD/2015 2 3. BRIEFLY STATED, ASSESSEE IS ENGAGED IN THE BUSIN ESS OF TOURS AND TRAVELS, BOOKING TICKETS, VISA, PASSPORTS ETC. IN THE NAME A ND STYLE OF UNITED INTERNATIONAL TOURS AND TRAVELS. IN THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT THE ASSESSEE HAS MULTIPLE BANK ACCOUNTS WITH DIFFERENT BANKS WHOSE DETAILS ARE NOT INCORPORATED IN THE RETURN OF INCOM E. THE AO FOUND THAT CASH DEPOSITS HAVE BEEN MADE IN THESE BANK ACCOUNTS AGGR EGATING TO RS.54,59,176/- AS TABULATED IN THE ASSESSMENT ORDER . THE AO ACCORDINGLY HELD THE AFORESAID AMOUNT TO BE INCOME OF THE ASSES SEE FROM UNDISCLOSED SOURCE AND THUS ADDED TO THE TOTAL INCOME RETURNED BY THE ASSESSEE. 4. IN THE FIRST APPEAL, THE CIT(A) REVISITED FACTS PLACED BY THE ASSESSEE BEFORE HIM. AFTER TAKING COGNIZANCE OF THE REMAND R EPORT OBTAINED FROM THE AO IN THIS REGARD FOUND THAT AN AMOUNT OF RS.2,37,8 26/- PERTAINING TO A.Y.2009-10 REQUIRES TO BE CONFIRMED AND THUS GRAN TED RELIEF FOR THE BALANCE AMOUNT. 5. AGGRIEVED BY SUBSTANTIAL RELIEF GRANTED BY THE C IT(A), REVENUE HAS PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WHEN THE MATTER WAS CALLED FOR HEARING, NONE APP EARED FOR THE ASSESSEE. IT IS SEEN FROM THE RECORD THAT SEVERAL OPPORTUNITI ES WERE GRANTED TO THE ASSESSEE IN THE PAST WHERE EITHER ASSESSEE WAS NOT PRESENT OR ASSESSEE HAS SOUGHT ADJOURNMENT. THUS, IN THESE CIRCUMSTANCES, WE DO NOT CONSIDER IT NECESSARY TO GRANT FURTHER OPPORTUNITY TO THE ASSES SEE, AND ACCORDINGLY PROCEED EXPARTE QUA ASSESSEE-RESPONDENT FOR HEARING THE APPEAL. 7. THE LD.DR FOR THE REVENUE RELIED UPON THE ORDER OF THE AO AND SUBMITTED IN FURTHERANCE THAT THE ASSESSEE HAS FAIL ED TO APPEAR BEFORE THE AO, ITA NO.342/AHD/2015 3 AND THEREFORE, THERE WAS NO WARRANT FOR THE CIT(A) TO ADMIT ADDITIONAL EVIDENCE PLACED BY THE ASSESSEE BEFORE HIM, AND GRA NT HUGE RELIEF. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E ON BEHALF OF THE REVENUE AND ALSO PERUSED ASSESSMENT ORDER AND FIRST APPELLATE ORDER APPEALED AGAINST. THE SHORT QUESTION THAT ARISES FOR RECONS IDERATION IS WHETHER CASH DEPOSITS TO THE EXTENT OF RELIEF GRANTED BY THE CIT (A) CAN BE TREATED AS EXPLAINED IN THE FACTS AND CIRCUMSTANCES. IN THIS REGARD, WE NOTICE AT THE OUTSET THAT THE CIT(A) HAS CONFRONTED THE RELEVANT MATERIAL PLACED BEFORE HIM BY THE ASSESSEE TO THE AO, AND A REMAND REPORT WAS CALLED FOR, SEEKING COMMENTS OF THE AO IN THIS REGARD. AFTER TAKING CO GNIZANCE OF THE COMMENTS OBTAINED FROM THE AO, THE CIT(A) COMPARED INWARD RE CEIPT IN THE BANK ACCOUNT AS WELL AS PAYMENT MADE OUT OF THE BANK ACC OUNTS AND FOUND THAT ADDITION TO THE EXTENT OF RS.2,37,826/- IS ONLY SUS TAINABLE AND THE REMAINING AMOUNT STANDS EXPLAINED. SIMILAR EXERCISE WAS DONE FOR OTHER PRECEDING ASSESSMENT YEARS AS TABULATED IN THE ORDER OF THE C IT(A). RELEVANT OPERATIVE PART OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREI NUNDER: 3.3.1 1 HAVE CONSIDERED THE SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. THE ASSESSING OFFICER HAS PASSED AN ORDER U/S. 144 OF THE INCOME- TAX ACT FOR THE YEARS UNDER CONSIDERATIONS DURING THE APPELLANT PROCEEDIN GS, THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT HAS SUBMITTED EXPLA NATIONS/DETAILS FOR ALL THE CREDIT/DEBIT ENTRIES IN UNDISCLOSED BANK AC COUNTS WHICH WERE NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. THE SUBMISS IONS OF THE APPELLANT HAVE BEEN REMANDED TO THE ASSESSING OFFIC ER FOR ITS VERIFICATION AND COMMENTS. IT IS CORRECT THAT THE A PPELLANT HAS NOT DISCLOSED ALL THE BANK ACCOUNTS IN HIS BOOKS WHICH MEANS THAT THE CREDIT AND DEBIT ENTRIES WERE NOT FULLY EXPLAINED. HOWEVER, AS RELIED BY THE AUTHORIZED REPRESENTATIVE, HON'BLE ITAT, AHMEDA BAD IN CASE OF ITO VS. SHRI DINESH AJITBHAI JAIN (ITA NO. 2740/AHD /2012) HAS HELD THAT WHEN THE ASSESSEE HAS NOT DISCLOSED THE BANK A CCOUNT IN THE ITA NO.342/AHD/2015 4 BOOKS,, ALL THE CREDIT ENTRIES CANNOT BE CONSIDERED AS UNEXPLAINED. SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT, AHMEDABAD IN CASE OF BHAVESH SATABHAI PATEL PANDAV SOCIETY VS ITO WARD-2 , (ITA NO. 381/AHD/2013). 3.3.2. IN THE PRESENT CASE THE APPELLANT HAS NOT DI SCLOSED THE BANK .ACCOUNTS IN HIS BOOKS, HOWEVER, DURING THE APPELLA TE PROCEEDINGS THE APPELLANT HAS SUBMITTED COMPLETE DETAILS/EXPLANATIO NS FOR ALL THE CREDIT AS WELL AS DEBIT ENTRIES IN RESPECT OF ALL BANK ACC OUNTS MAINTAINED BY HIM. HE HAS ALSO SUBMITTED NATURE OF EACH TRANSACTI ON WITH THE NAMES OF STUDENTS ALONG WITH THE SUMMARY OF INCOME GENERA TED FOR THE EACH SUCH TRANSACTION AFTER RECORDING THE EXPENSES MADE OUT OF RECEIPTS. ALL THESE DETAILS ARE FURNISHED ASSESSMENT YEAR WISE AN D THE SAME WERE ALSO EXAMINED BY THE ASSESSING OFFICER DURING THE C OURSE OF REMAND PROCEEDING. CONSIDERING THE DETAILS SUBMITTED BY TH E APPELLANT FOR EACH CREDIT AND DEBIT ENTRIES FOR ALL THE YEARS AND THE FACT THAT THE ASSESSING OFFICER HAS NOT BEEN ABLE TO CONTROVERT THE SAME IN HIS REMAND REPORT, I AM OF THE CONSIDERED OPINION THAT THE TOTAL CREDIT IN THE UNDISCLOSED BANK ACCOUNT CANNOT BE TREATED AS INCOME OF THE APP ELLANT. AS MENTIONED IN PARA ABOVE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TOURS AND TRAVELS, BOOKING TICKETS, VISA, PASSPORTS ETC. IN THE NAME AND STYLE OF UNITED INTERNATIONAL TOURS AND TRAVELS. MO NEYS ARE RECEIVED FROM THE CUSTOMERS FOR SPECIFIC SERVICES AND THE SA ME ARE DEPOSITED IN HIS BANK ACCOUNTS. FROM THE SAME BANK ACCOUNTS, PAY MENTS ARE MADE TO AIRLINES FOR TICKETS WHICH IS NORMAL AND LOGICAL BECAUSE THE APPELLANT HIMSELF DOES HOT OWN ANY AIRLINE. HE IS A MERE, TRA VEL AGENT AND HAS TO CONTEND WITH THE MARGINAL COMMISSION PREVALENT IN T HIS LINE OF BUSINESS. SIMILARLY, HE RECEIVED PAYMENTS FOR VISA SERVICES FOR WHICH HE HAD TO INCUR SUBSTANTIAL EXPENDITURES. ACCORDINGLY, I AGREE WITH THE ARGUMENTS MADE BY THE AUTHORIZED REPRESENTATIVE THA T THE TOTAL CREDIT OF THE UNDISCLOSED BANK ACCOUNT CANNOT BE TREATED A S UNEXPLAINED INCOME AS SUCH BECAUSE ALL THE CREDITS IN THE UNDIS CLOSED BANK ACCOUNTS WERE OUT OF BUSINESS OF AIR/RAILWAY TICKET BOOKINGS AND THE PAYMENTS MADE BY THE APPELLANT FROM THE UNDISCLOSED BANK ACC OUNTS FOR PURCHASE OF AIR/RAILWAY TICKETS SHOULD BE ALLOWED AS DEDUCTI ON. ACCORDINGLY, I HEREBY RESTRICT THE ADDITION MADE BY THE ASSESSING OFFICER CONSIDERING THE INCOMES ALREADY DISCLOSED BY THE ASSESSEE IN TH E FOLLOWING MANNER AND BALANCE ADDITIONS MADE IN DIFFERENT ASSESSMENT YEARS ARE DIRECTED TO BE DELETED :- ITA NO.342/AHD/2015 5 ASST. YEAR TOTAL CREDIT IN UNDISCLOSED BANK A/C(RS.) PAYMENTS MADE FROM UNDISCLOSED ACCOUNTS (RS.) NET INCOME (RS.) INCOME ALREADY OFFERED IN ROI U/S 148 (RS.) ADDITIONS CONFIRMED BY ME (RS.) 2005-06 7,22,162/- 4,67,600/- 2,54,562/- 2,54,386/- 176/- 2006-07 29,62,828/- 27,71,614/- 1,17,982/- 0 1,17,982/- 2007-08 40,64,951/- 36,97,695/- 2,96,685/- 0 2,96,685/- 2008-09 47,29,879/- 43,14,157/- 3,06,761/- 1,06,838/- 1,99,923/ 2009-10 50,52,187/- 46,82,792/- 3,65,195/- 1,27,369/- 2,37,826/- TOTAL 1,75,32,00/- 1,59,33,858/- 13,41,185/- 4,88,593/- 8,52,592/- 9. A PERUSAL OF THE FINDINGS OF THE CIT(A) WOULD MA KE IT MANIFEST THAT THE CIT(A) HAS PROCEEDED TO REDUCE THE EXPENSES OUT OF RECEIPTS REPORTED IN THE BANK ACCOUNTS AND THE DIFFERENCE THEREIN WAS CONSID ERED AS NET INCOME OF THE ASSESSEE. THE CIT(A) THEREAFTER EXCLUDED THE INCOM E ALREADY DECLARED BY THE ASSESSEE FROM THE AFORESAID AMOUNT AND TREATED THE DIFFERENTIAL AMOUNT (RS.2,37,826/- RELEVANT TO THE ASSTT.YEAR 2009-10) AS UNDISCLOSED INCOME IN THE VARIOUS ASSESSMENT YEARS. WE DO NOT SEE ANY IN FIRMITY IN THE AFORESAID ACTION OF THE CIT(A). THE ACTION OF THE CIT(A) APP EARS RATIONALE AND REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, AND HAVING REGARD TO THE NATURE OF BUSINESS OF THE ASSESSEE. THE CIT(A) HAS OBTAINED REMAND REPORT ON THE EVIDENCE PLACED BEFORE IT, AND THUS NO SERIOUS PREJUDICE EXISTS AGAINST THE REVENUE. THE CIT(A) HAS ADMITTED THE ADDITIONAL EV IDENCES WHICH HE IS EMPOWERED TO DO FOR PROPER ADJUDICATION OF MATTER. IN THE CIRCUMSTANCES, WE ITA NO.342/AHD/2015 6 DO NOT SEE ANY ERROR WHICH REQUIRES OUR INTERFERENC E. WE THUS DECLINE TO INTERFERE. 10. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 03 MAY, 2018 AT AH MEDABAD. SD/- SD/- ( MS. MADHUMITA ROY ) JUDICIAL MEMBER ( PRADIP KUMAR KEDIA ) ACCOUNTANT MEMBER