Sh. Balwinder Singh, Hoshiarpur V. The Income-tax Officer, Dasuya

ITA 348/ASR/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1425 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 29-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GAUTAM DEB
• Assessee Lawyers: J K PASSI
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 348/(ASR)/2015 AS SESSMENT YEAR: 2009-10 BALWINDER SINGH, PROP. DEEP SATELLITE SYSTEM, TANDA URMAR, TEHSIL, DASUYA DISTT. HOSHIARPUR [PAN: ABSPS 5499Q] VS. INCOME TAX OFFICER, DASUYA, DISTT. HOSHIARPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J. K. PASSI (ADV.) RESPONDENT BY: SH. GAUTAM DEB (D.R.) DATE OF HEARING: 30.07.2018 DATE OF PRONOUNCEMENT: 10.09.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, JALANDHAR ( 'CIT(A)' FOR SHORT) DATED 05.06.2015, DISMISSING THE ASSESSEES APPEAL CONTES TING HIS ASSESSMENT UNDER SECTION 144 OF THE INCOME-TAX ACT, 1961 ('THE ACT' HEREINAFTER) DATED 19.12.2011 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THIS IS THE SECOND ROUND BEFORE THE TRIBUNAL; IT DISMISSING THE ASSESSEES APPEAL IN LIMINE FOR WANT OF PROSECUTION VIDE ORDER DATED 13/1/2016 (COPY ON RECORD), AND WHICH WAS SUBSEQUENTLY RECALLED (VIDE ORDER IN MA NO.31/ASR/2016, ITA NO. 348/ASR/2015 (AY 2009-10) BALWINDER SINGH V. ITO 2 DATED 9/9/2016) ON THE TRIBUNAL BEING SATISFIED WIT H THE EXPLANATION FOR THE NON- ATTENDANCE ON THE DATE OF HEARING. THE GROUNDS OF A PPEAL, HITHERTO ASSUMED, BEING ARGUMENTATIVE AND TARGETED AGAINST THE ASSESSMENT O RDER, WERE ALSO AMENDED ON BEING SO POINTED OUT BY THE TRIBUNAL VIDE ITS ORDER SHEET ENTRY DATED 18/4/2017. THE ISSUE INVOLVED IN THE INSTANT APPEAL, AS DISCERNED FROM THE READING OF THE ASSESSMENT ORDER; THE IMPUGNED ORDER; AS WELL AS TH E GROUNDS OF APPEAL, IS THE SUSTAINABILITY IN LAW, ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE, OF AN ADDITION IN THE SUM OF RS. 3,44,000, EFFECTED TO TH E ASSESSEES RETURNED INCOME OF RS. 1.50 LACS (ON 30/3/2010) U/S.69A OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE ASSESSEES BANK ACCOUNT WITH HDFC B ANK, TANDA (AT AN AGGREGATE OF RS.12,38,500 ) DURING THE RELEVANT PREVIOUS YEAR, I.E., THE FINA NCIAL YEAR 2008-09. 3. THE ASSESSEES, WHO REMAINED UNREPRESENTED AT TH E ASSESSMENT STAGE, RESULTING IN THE ADDITION FOR THE PEAK AMOUNT (OF THE BANK BALANCE, BEING COMPRISED ESSENTIALLY OF THE SAID CASH DEPOSITS) BY THE ASSESSING OFFICER (AO), CASE, THROUGHOUT, I.E., BEFORE THE FIRST APPELLATE AUTHORITY AS WELL AS BEFORE US, HAS BEEN THAT HE IS, SINCE THE YEAR 1992, IN THE BUSINE SS OF AUDIO AND VIDEO CASSETTES. AS HE PLANNED TO GO ABROAD (BELGIUM), FOR WHICH HE LEFT IN DECEMBER, 2008/JANUARY, 2009 (THE TWO MONTHS MENTIONED VARIOU SLY IN WRITTEN SUBMISSIONS), HE CLOSED HIS SAID BUSINESS DURING THE YEAR, DEPOSI TING THE SALE PROCEEDS OF THE STOCK, HANDING OVER THE SHOP TO HIS YOUNGER BROTHER , SHRI BHUPENDER SINGH, DOING INVERTOR BUSINESS, IN NOVEMBER, 2008. THE PEAK AMOU NT, IN FACT, WORKS TO RS.5,19,224/- , WHICH WAS THE SALE PROCEEDS OF THE STOCK. THE AO S WORKING IS IN FACT BASED ON TWO SUMS, I.E., RS. 1,44,000/-, DEPOS ITED ON 14/11/2008, AND RS. 2.0 LAKHS ON 15/11/2008. THE FORMER WAS FROM THE EARLIE R WITHDRAWALS, WHILE THAT FOR RS. 1.50 LAC WAS OUT OF RS. 2 LACS RECEIVED FROM A SINGER (GURWINDER BEPPE) ON THE RELEASE OF HIS CASSETTE DESI JATT, OF WHICH THE A SSESSEE WAS A DIRECTOR. ITA NO. 348/ASR/2015 (AY 2009-10) BALWINDER SINGH V. ITO 3 THE SAME DID NOT FIND FAVOUR WITH THE LD. CIT(A) AS THE ASSESSEES CASE WAS WHOLLY UNSUBSTANTIATED. WHY, THERE WAS NOTHING TO S HOW THAT THE ASSESSEE WAS, APART FROM BEING IN THE BUSINESS OF SATELLITE SERVI CES, ALSO ENGAGED IN THE BUSINESS OF AUDIO AND VIDEO CASSETTES, OF WHICH, THEREFORE, HE HELD STOCK, THE QUANTUM OF WHICH IS AGAIN UNPROVED. THE ASSESSEE DOING BUSINES S, HOWEVER, THE CONTENTION THAT THE WITHDRAWALS MADE FUNDED THE SUBSEQUENT CAS H DEPOSITS WITH BANK, APPEARED PLAUSIBLE AND, THEREFORE, ACCEPTABLE. ACCO RDINGLY, HE WORKED OUT THE PEAK AMOUNT AFRESH, TABULATED AT PARA 5.3 (6.3)(PAGES 13 -14 OF THE IMPUGNED ORDER), AT RS. 5,17,879/- (IN NOV. 08). ASSUMING DEPOSIT OF THE ENTIRE DECL ARED INCOME OF RS. 1.50 LAC IN BANK, THE UNEXPLAINED CASH DEPOSITED WO RKED TO RS. 3,67,879/-. ASSUMING, FURTHER, THE ASSESSEE TO HAVE AN OPENING STOCK OF RS. 23,879, WOULD LEAD TO AN UNEXPLAINED SUM OF RS. 3,44,000/-, FOR WHICH ADDITION HAD BEEN MADE. THE SAME WAS, ACCORDINGLY, CONFIRMED. AGGRIEVED, THE AS SESSEE IS IN SECOND APPEAL. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. OUR FIRST OBSERVATION IN THE MATTER IS THAT THE AS SESSEE BEING ABROAD (SINCE DECEMBER08 / JANUARY09) DID NOT PREVENT HIM FROM FILING THE APPEAL BEFORE THE FIRST APPELLATE AUTHORITY OR THE SECOND APPEAL AUTH ORITY, BOTH IN TIME, OR THE FILING OF LENGTHY SUBMISSIONS BEFORE THE FIRST APPELLATE AUTH ORITY, AS WELL AS THE AMENDED GROUNDS OF APPEAL BEFORE THE TRIBUNAL. WHY SHOULD IT THEN HAVE IMPEDED HIM FROM REPRESENTING IN THE ASSESSMENT PROCEEDINGS ? BE THAT AS IT MAY, OUR SECOND OBSERVATION IN THE M ATTER IS THAT THE ASSESSEE HAS, WITHOUT SUCCESSFULLY IMPUGNING THE FRAMING OF ASSESSMENT AS A BEST JUDGMENT ASSESSMENT BY THE AO, FURNISHED EXPLANATIONS IN THE APPELLATE PROCEEDINGS, WHICH WERE, THOUGH NOT INCORRECTLY IN THE OVERALL CONTEXT OF THE CASE, DULY CONSIDERED BY THE LD.CIT(A), FINDING THE ASSESSEES CASE TO BE, N EVERTHELESS, LARGELY UNSUBSTANTIATED. THE ASSESSEE HAS BEFORE US BEEN UN ABLE TO POINT OUT ANY INFIRMITY ITA NO. 348/ASR/2015 (AY 2009-10) BALWINDER SINGH V. ITO 4 IN THE IMPUGNED ORDER. THE ISSUE IN SUBSTANCE BEING EXPLAINING SATISFACTORILY THE NATURE AND SOURCE OF THE CASH DEPOSITS IN HIS BANK ACCOUNT, THE QUESTION, TO OUR MIND, IS NOT SO MUCH AS TO WHAT THE ASSESSEES BUSI NESS WHICH HE STATES OF HAVING CLOSED, WAS, BUT WHETHER THE STOCK, STATED TO BE SO LD, WAS EXISTENT AND, FURTHER, DISCLOSED. IF NOT, HOW COULD IT, EVEN ASSUMING IT T O BE THERE, BE SAID TO EXPLAIN THE SOURCE OF THE CASH, FINDING ITS WAY IN THE ASSESSEE S BANK ACCOUNT, WHEREAT IT WAS FOUND BY THE REVENUE? THIS IS, AS WHERE SO, AN ADDI TION, ALTERNATIVELY OR AS A COROLLARY, FOR UNEXPLAINED STOCK (FOR THAT AMOUNT) WOULD ENSUE. THE CASH OR, AS THE CASE MAY BE, STOCK, AS FOUND, IT MAY BE APPRECIATED , MAY NOT HAVE BEEN NECESSARILY GENERATED AT THE RELEVANT TIME, I.E., WHEREAT IT IS FOUND, BUT IS DEEMED, WHERE NOT SATISFACTORILY EXPLAINED AS TO THE NATURE AND SOURC E OF ITS ACQUISITION, OF THE YEAR DURING WHICH IT SURFACES AND IS FOUND BY THE REVENU E. THAT THE BUSINESS, WHICH BEFORE US IS STATED TO INCLUDE CD PLAYERS, TV AERIA LS, WATER FILTERS, ETC., IS COMPLETELY UNEVIDENCED, IS ANOTHER, EQUALLY RELEVAN T, ASPECT OF THE MATTER. THE ACCEPTANCE OF EXPLANATION OF CASH SALE OF STOCK ARI SES ONLY WHEN THE EXISTENCE OF THE STOCK WITH THE ASSESSEE IS ESTABLISHED, WHILE I N THE PRESENT CASE EVEN THE EXISTENCE OF THE STATED BUSINESS IS NOT SHOWN, MUCH LESS OF THE STOCK THEREOF; OF IT FURTHER BEING A DISCLOSED ASSET; ITS QUANTUM. AS S UCH, NOTHING TURNS ON THE EXPLANATION OF THE CASH BEING THE SALE PROCEEDS OF THE STOCK. THERE IS ALSO NOTHING TO SUGGEST OF THE STOCK REPRESENTING THE ASSESSEES DISCLOSED INCOME FOR THE EARLIER YEARS, WHICH IS CONSPICUOUS BY ITS ABSENCE AND, BES IDES, ONLY THAT IN EXCESS OF THAT WHICH COULD REASONABLY BE REGARDED AS EXPENDED FOR MAINTENANCE (OF SELF AND FAMILY AND ACQUISITION OF OTHER PERSONAL ASSETS), C OULD BE ATTRIBUTED TO THE BUSINESS ASSETS, INCLUDING STOCK-IN-TRADE. THE SUM OF RS. 2 LAC, STATED TO BE RECEIVED FROM A SINGER FOR RELEASE OF A CASSETTE IS, AGAIN, ONLY IN THE NATURE OF INCOME, OF WHICH ONLY A PART (RS.1.50 LACS), STANDS ADMITTEDLY DEPOS ITED IN THE BANK ACCOUNT ON 15/11/2008. THE EXPLANATION, THUS; THE ASSESSEE HAV ING BEEN ALLOWED FULL CREDIT FOR ITA NO. 348/ASR/2015 (AY 2009-10) BALWINDER SINGH V. ITO 5 THE ENTIRE INCOME DISCLOSED, TAKEN TO ITS LOGICAL C ONCLUSION, SHOULD RESULT IN, RATHER, AN ENHANCEMENT OF RS. 0.50 LACS NOT DEPOSITED IN TH E BANK. THE ASSESSEE HAS ALREADY BEEN ALLOWED A CREDIT FOR RS.1,73,879 ON ACCOUNT OF DISCLOSED INCOME (RS. 1.50 LACS) AND FOR SOME STOCK (RS. 0.24 LAC). WHILE STOCK TO THAT EXTENT IS UNDERSTANDABLE, IT IS INCOMPREHENSIB LE THAT THE ASSESSEE SHALL NOT HAVE WITHDRAWN ANY PART OF HIS INCOME FOR HIS PERSONAL O R FAMILY EXPENDITURE. WHY, HIS EXPENDITURE, ON ACCOUNT OF HIS SHIFTING ABROAD WOUL D, RATHER, ONLY STAND TO INCREASE. FURTHER, EVEN AS THE ASSESSEE HAS BEEN ALLOWED FULL CREDIT IN ITS RESPECT BY COMPUTING THE PEAK AMOUNT, IT IS IMMINENT THAT A GO OD PART OF THE WITHDRAWALS (FROM THE BANK), AT RS. 12.38 LACS FOR THE YEAR, IS , UPON WITHDRAWAL, EXPENDED. THE IMPROBABILITY OF THE CASH WITHDRAWN BEING REDEPOSIT ED, APART FROM BEING NOT IN CONFORMITY WITH THE NORMAL, GENERAL CONDUCT, GETS A CCENTUATED BY THE FACT THAT THE ASSESSEE WAS DURING THE RELEVANT YEAR IN THE PROCES S OF WINDING UP HIS BUSINESS, SO THAT THERE IS NO QUESTION OF CASH PURCHASES, WHICH GET RE-CIRCULATED THROUGH CASH SALES. IN FACT, IF THAT CHARACTERIZES THE ASSESSEE S TRADE, THERE WOULD BE, SIMILARLY, CASH WITHDRAWALS AND CASH DEPOSITS FOR THE PRECEDIN G YEARS AS WELL, OF WHICH THERE IS NOTHING TO SUGGEST. IN SHORT, THERE IS LITTLE SC OPE FOR ROTATION OF FUNDS, WHICH IS THE BASIS FOR THE PEAK AMOUNT FOR WHICH THE ADDITIO N STANDS MADE. BOTH THE NATURE AND THE SOURCE OF THE CASH ACQUISIT ION (IN THE IMPUGNED SUM), DEPOSITED IN HIS BANK ACCOUNT DURING THE YEAR , THEREFORE, REMAINS UNEXPLAINED. THE REVENUES STANCE HAS BEEN MOST REA SONABLE. WE, THEREFORE, FIND NO REASON FOR INTERFERENCE AND, ACCORDINGLY, CONFIR M THE IMPUGNED ORDER. THOUGH THE ASSESSEE HAS PLACED SOME DECISIONS RELATING TO BEST JUDGMENT ASSESSMENT IN HIS COMPILATION, EXPLAINING THE LAW IN THE MATTER, AND ON WHICH ASPECT/S THERE IS NO QUARREL, THE SAME ARE NOT RELEVANT INASMUCH AS OUR DECISION IS BASED/RESTS ON FACTS, WITH, AS AFORE-NOTED, THE REVENUE DISPLAYING UTMOST REASONABLENESS. WE CONSIDER IT PERTINENT TO ADVERT THERETO, EVEN AS NO REFERENCE T O THESE DECISIONS WAS MADE ITA NO. 348/ASR/2015 (AY 2009-10) BALWINDER SINGH V. ITO 6 DURING HEARING, OR THEIR RELEVANCE OTHERWISE CANVAS SED, INASMUCH AS BEING BY SUPERIOR COURTS, WE ARE OBLIGED TO CONSIDER THE SAM E, SO THAT THE SAME WERE PERUSED TO ASCERTAIN THEIR RELEVANCE IN THE FACTS AND CIRCU MSTANCES OF THE CASE. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 10, 2018 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 10.09.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: BALWINDER SINGH PROP. DEEP S ATELLITE SYSTEM, TANDA URMAR, TEHSIL, DASUYA DISTT. HOSH IARPUR (2) THE RESPONDENT: INCOME TAX OFFICER, DASUYA, DISTT. HOSHIARPUR (3) THE CIT(APPEALS)-1, JALANDHAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER