Gajendra Biyani, , Hingoli V. Income-tax Officer, Ward & TPS, Hingoli

ITA 350/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9868 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-01-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 15-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Principle of natural justice; Retraction
• Section: 133A

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.350/PUN/2018 / ASSESSMENT YEAR : 2014-15 GAJENDRA BIYANI, SHOP NO.47, SHOPPING COMPLEX, AKOLA, HINGOLI. PAN : ABKPB9405F . /APPELLANT VS. ITO, WARD & TPS, HINGOLI. . / RESPONDENT / APPELLANT BY : SHRI VIRAJ MEHTA & SHRI NILESH PATEL / RESPONDENT BY : SHRI M. K. VERMA / DATE OF HEARING : 14.02.2019 / DATE OF PRONOUNCEMENT: 03.04.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-1, AURANGABAD DATED 18.12.2017 FOR THE ASSESSMENT YEAR 2014-15. 2. THE EFFECTIVE GROUND RAISED BY THE ASSESSEE IS AS UNDER :- THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF LD. A.O. BY CONFIRMING ADDITION OF RS.21,00,000/- ON ACCOUNT OF UNEXPLAINED INCOME WHICH WAS DISCLOSED DURING COURSE OF SURVEY U/S 133A AND WAS LATER ON RETRACTED BY THE APPELLANT FOR WHICH ALSO SOURCE WAS EXPLAINED. HENCE, ADDITION OF RS.21,00,000/- AS UNEXPLAINED IS ERRONEOUS AND THEREFORE THE ADDITION SHOULD BE DELETED. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A PROPRIETARY CONCERN, NAMELY, M/S. GAJENDRA HARDWARE AND IS ENGAGED IN TRADING IN CEMENT, IRON STEEL & OTHER BUILDING MATERIAL. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.27,99,590/- AND AGRICULTURAL INCOME OF RS.1,64,572/-. THERE WAS A SURVEY ACTION U/S 133A ITA NO.350/PUN/2018 - 2 - OF THE ACT ON THE ASSESSEES BUSINESS PREMISES ON 09.01.2014. THE SURVEY ACTION RESULTED IN DISCOVERY OF UNEXPLAINED CASH DEPOSITS TO THE EXTENT OF RS.45,00,000/- IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE DECLARED THE SAME DURING THE SURVEY ACTION. DURING THE ASSESSMENT PROCEEDINGS, HOWEVER, THE ASSESSING OFFICER NOTICED THAT THE SAID AMOUNT WAS NOT DISCLOSED IN THE RETURN OF INCOME. THERE WAS AN OFFER OF DISCLOSED INCOME OF RS.24,00,000/- OUT OF TOTAL DISCLOSURE OF RS.45,00,000/-. THUS, THE ASSESSEE RETRACTED ON THE BALANCE AMOUNT OF RS.21,00,000/-. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAME SHOULD NOT BE ADDED TO THE RETURNED INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN RESPONSE, AS PER THE DISCUSSION GIVEN BY THE ASSESSING OFFICER IN PARA 4.1 TO 4.5 OF THE ASSESSMENT ORDER, THE ASSESSEE COULD NOT PROVIDE ANY PLAUSIBLE EXPLANATION FOR THE SOURCES FOR THE SUM OF RS.21,00,000/-. THE ASSESSING OFFICER ALSO HELD THAT THE RETRACTION WAS NOT BONA-FIDE. THE ASSESSING OFFICER, RELYING ON CERTAIN DECISIONS IN FAVOUR OF THE PROPOSITION, HELD THAT THE IMPUGNED AMOUNT SHOULD BE ADDED TO THE RETURN OF INCOME OF THE ASSESSEE. EVENTUALLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS.21,00,000/- IN THE HANDS OF THE ASSESSEE. 4. DURING THE FIRST APPELLATE PROCEEDINGS, THE CIT(A), AS PER DISCUSSION GIVEN IN PARA 5 OF HIS ORDER, SUSTAINED THE SAID ADDITION OF RS.21,00,000/- AS MADE BY THE ASSESSING OFFICER. FOR THE SAKE OF COMPLETENESS, THE SAID PARA 5 OF THE ORDER OF THE CIT(A) IS EXTRACTED HEREUNDER :- 5. IN THE PRESENT CASE, DURING THE COURSE OF SURVEY ACTION U/S 133A, IT WAS CLEARLY NOTICED THAT CASH DEPOSITS TO THE EXTENT OF RS.45,00,000/- COULD NOT BE EXPLAINED BY THE APPELLANT. ON BEING QUESTIONED, THE APPELLANT HAD VOLUNTARILY OFFERED THE SAME AS ADDITIONAL INCOME. NO EXPLANATION/OBJECTION HAD EVER BEEN RAISED AFTER THE DATE OF SURVEY TILL THE DATE OF FILING OF RETURN OF INCOME. FURTHER, THE APPELLANT COULD NOT PUT FORTH ANY SUPPORTING DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM. THE APPELLANT HAS PLACED RELIANCE ON THE DECISIONS OF HONBLE KERALA HIGH COURT IN THE CASE OF PAUL MATHEW & SONS VS. CIT (129 TAXMAN 416) AND HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. S. KHADER KHAN SON (214 CTR 589). HOWEVER SUBSEQUENT TO THESE DECISIONS, THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BACHITTAR SINGH VS. CIT (328 ITR 400) HELD THAT ADMISSION MADE DURING THE COURSE OF SURVEY WAS VALID AND COULD FORM THE BASIS OF ADDITION. ITA NO.350/PUN/2018 - 3 - .. IN VIEW OF THE ABOVE DECISIONS AND FACTS OF THE PRESENT CASE, I HOLD THAT THE ADDITION MADE BY THE A.O. WAS IN ACCORDANCE WITH THE LAW AND SAME HAS TO BE SUSTAINED. THE ADDITION OF RS.21,00,000/- MADE BY THE A.O. IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 5. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE ABOVE EXTRACTED GROUND. 6. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE FILED A WRITTEN SUBMISSION AND THE SAME IS EXTRACTED HEREUNDER :- BEFORE HON. ITAT, SMC BENCH. 14.02.2019. IN CASE OF SHRI RAJENDRA BIYANI. ITA NO.350/PN/2018. 1) CALCULATION OF IT DEPARTMENT DURING SURVEY ON 09.01.2014:- A) OP. CASH BALANCE AS ON 01.04.2013 - RS.22,75,840/- B) PROPERTY TRANSACTION OF AGRICULTURAL LAND - RS.18,54,975/- (37.5% OF RS.49,46,600/-) C) CASH DEPOSITS IN URBAN CO-OP. CREDIT SOCIETY BANK - RS.49,00,000/- DEFICIT CONSIDERED BY DEPARTMENT - RS.44,79,135/- NOTE:- 2) IT DEPARTMENT BY OVERSIGHT HAS NOT CONSIDERED CASH WITHDRAWALS MADE BY THE ASSESSEE BEFORE 09.01.2014. 3) ASSESSEE HAS RELIEF OF RS.21,00,000/- ONLY AS AGAINST DECLARATION OF RS.45,00,000/- MADE DURING SURVEY AS PER ABOVE ERRONEOUS CALCULATION. 4) CASH WITHDRAWALS OF RS.55,67,000/- WAS NOT CONSIDERED BY LOWER AUTHORITIES. 5) IT IS HUMBLY SUBMITTED THAT ASSESSEE HAS ALREADY OFFERED RS.24,00,000/- DURING THE ASSESSMENT AND THE SAME IS NOT UNDER LITIGATION. 6) COPY OF AGREEMENT FOR PURCHASE OF AGRICULTURE LAND IS ENCLOSED HEREWITH FOR WHICH CASH WAS WITHDRAWN. SD/- 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 8. ON HEARING BOTH THE PARTIES, I FIND THAT THE SUM OF RS.45,00,000/- WAS NOT ARRIVED AT BY THE REVENUE AUTHORITIES DURING THE SURVEY ACTION BY CONSIDERING ALL THE RELEVANT ENTRIES. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE OPENING CASH BALANCE AS ON 01.04.2013 OF RS.22,75,840/-, THE CASH DEPOSITS IN URBAN CO-OP. CREDIT SOCIETY BANK OF RS.49,00,000/- AND THE PROPERTY TRANSACTION OF AGRICULTURAL LAND OF RS.18,54,975/- ARE SHOWN IN THE SAID ACCOUNT OF THE ASSESSEE. THERE IS ALSO A SUBMISSION RELATING TO THE FACT THAT THE CASH WITHDRAWALS OF RS.55,67,000/- WHICH WAS NOT ITA NO.350/PUN/2018 - 4 - CONSIDERED BY THE REVENUE AUTHORITIES. FURTHER, IT IS PRAYER OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE CASH WITHDRAWALS MADE BEFORE 09.01.2014 WERE LEFT OUT BY OVERSIGHT BY THE ASSESSING OFFICER. THEREFORE, I AM OF THE OPINION THE MATTER SHOULD BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR WANT OF ONE MORE ROUND FOR ADJUDICATION OF THE ISSUE QUA THE ADDITION OF RS.21,00,000/- IN THE ASSESSMENT. THE ASSESSING OFFICER IS DIRECTED TO OFFER SUBSTANTIVE OPPORTUNITY TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRINCIPLES OF NATURAL JUSTICE AND EXAMINED ALL THE ARGUMENTS INCLUDING THE ARGUMENTS GIVEN AT NOTE NOS.2 TO 6 OF THE WRITTEN SUBMISSION (EXTRACTED ABOVE IN PARA 6 OF THIS ORDER). WITH THESE DIRECTIONS, THE ENTIRE ISSUE OF ADDITION OF RS.21,00,000/- STANDS REMANDED TO THE FILE OF THE ASSESSING OFFICER. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 03 RD DAY OF APRIL, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 03 RD APRIL, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, AURANGABAD; 4. THE CCIT, NASHIK; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE