The ITO, Ward-9(4), Ahmedabad V. Shri Amrishbhai H.Patel, Ahmedabad

ITA 3629/AHD/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0673 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: Depreciation; Salary income; Additional evidence; Set aside
• Section: 44AD; 40(b); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 3629/AHD/2015 (ASSESSMENT YEAR: 2011-12) THE INCOME-TAX OFFICER, WARD-2(2)(1), AHMEDABAD V/S SHRI AMRISHBHAI H. PATEL, 58, SHANKAR SOCIETY-1, NARANPURA, AHMEDABAD- 380013 (APPELLANT) (RESPONDENT) PAN: ALCPP 9045P APPELLANT BY : SHRI LALIT P. JAIN, SR. D .R. RESPONDENT BY : SHRI PRITESH SHAH ( )/ ORDER DATE OF HEARING : 04 -04-201 9 DATE OF PRONOUNCEMENT : 29 S-05-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-10, AHMEDABAD DATED 27.10.2015 PERTAINING TO A.Y. 2011-12 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 3629 /AHD/2015 . A.Y. 2011-1 2 2 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE DISALLOWANCE MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS U/S.68 OF T HE ACT AMOUNTING TO RS.68,14,880/-, WITHOUT PROPERLY APPRECIATING THE F ACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD; 2. THE LD.CIT(A) GAVE A GO-BY TO THE REQUIREMENTS O F RULE 46A, WITHOUT ADEQUATE REASONS; 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER; 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT; 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2. THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND CATERING. HE FILED HIS RETURN OF INCOME FOR ASS ESSMENT YEAR 2011-12 ON 26.11.2011 DECLARING TOTAL INCOME OF RS. 2,94,740/- WHICH COMPRISES OF INCOME FROM BUSINESS UNDER SECTIONS 44AD AND 44AE O F INCOME TAX ACT. AND DECLARED INCOME UNDER 44AD TO THE TUNE OF RS. 1 2,960/- AND DECLARED TRANSPORT INCOME UNDER SECTION 44AD OF RS.65,776/- AND INCOME FROM HEAVY VEHICLE UNDER SECTION 44AE TO THE TUNE OF RS. 60,00 0/- SO IT COMES TO RS.1,38,736/-. 3. APART FROM SALARY INCOME AMOUNTING TO RS. 1,56,000/ - TO TOTAL INCOME AMOUNTING TO RS.2,94,736/-. SINCE THE ASSESSEE HAS OPTED FOR PRESUMPTIVE TAX UNDER SECTION 44AE OF THE INCOME TAX ACT, THEREFORE , HE WAS NOT MAINTAINING BOOKS OF ACCOUNT AND ASSESSING OFFICER NOWHERE MENT IONED THAT ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNT. THE ASSESSEE WAS UNDER MENTAL PRESSURE DUE TO SOME DOMESTIC PROBLEM, THEREFORE, HE COULD NOT A PPEAR BEFORE THE LD. A.O. THEREFORE, IN THE ABSENCE OF ASSESSEE, LD. A.O. MAD E AN ADDITION OF UNEXPLAINED CASH DEPOSIT IN UNDISCLOSED BANK ACCOUNT TO THE TUN E OF RS. 68,14,880/-. ITA NO. 3629 /AHD/2015 . A.Y. 2011-1 2 3 4. AGAINST THE SAID ADDITION, ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A). 5. THEREAFTER, LD. CIT(A) SOUGHT REMAND REPORT FROM TH E ASSESSING OFFICER WHEREIN BEFORE THE LD. A.O., ASSESSEE REITERATED TH AT HE IS NOT MAINTAINING REGULAR BOOKS OF ACCOUNT AND DECLARED INCOME UNDER SECTION 44AD AND UNDER SECTION 44AE AND SAME INCOME WAS EARNED FROM THE SO CALLED NON DECLARED BANK ACCOUNT OF THE ASSESSEE. 6. APART FROM THAT, ASSESSEE ALSO FILED AN AFFIDAVIT S TATING THAT CASH DEPOSITS ARE OUT OF CASH WITHDRAWAL FROM THE BANK WHICH WAS NOT DECLARED BY THE ASSESSEE AS HE DECLARED HIS INCOME UNDER SECTION 44AD AND 44 AE AND LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE. 7. NOW REVENUE HAS COME BEFORE US BY WAY OF SECOND APP EAL. ASSESSEE IS A SMALL BUSINESSMAN AND ALSO HAVING SALARY INCOME AND DECLA RED HIS INCOME UNDER SECTION 44AD AND 44AE. 8. IN SECTION 44AD A SPECIAL PROVISION FOR COMPUTING P ROFIT AND GAINS OF BUSINESS ON PRESUMPTIVE BASIS ARE DESCRIBED: (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTIONS 28 TO 43C, IN THE CASE OF AN ELIGIBLE ASSESSEE ENGAGED IN AN ELIGIBLE BUSI NESS, A SUM EQUAL TO EIGHT PER CENT OF THE TOTAL TURNOVER OR GROSS RECEIPTS OF THE ASSE SSEE IN THE PREVIOUS YEAR ON ACCOUNT OF SUCH BUSINESS OR, AS THE CASE MAY BE, A SUM SUBSTITUTED BY THE FINANCE (NO. 2) ACT, 2009, W.E .F. 1-4-2011. PRIOR TO ITS SUBSTITUTION, SECTION 44AD, AS INSERTED BY THE FINA NCE ACT, 1994, W.E.F. 1-4-1994 AND LATER ON AMENDED BY THE FINANCE ACT, 1997, W.R.E.F. L-4-1994/W.E.F. 1-4-1997, INCOME-TAX (SECOND AMENDMENT) ACT, 1998, W.R.E.F. 1 -4-1997 AND FINANCE ACT, 1999, W.E.F. 1-4-1998, READ AS UNDER: '44AD. SPECIAL PROV ISION FOR COMPARING PROFITS AND GAINS OF BUSINESS OF CIVIL CONSTRUCTION, ETC.(1) N OTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTIONS 28 TO 43C, IN THE CA SE OF AN ASSESSEE ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION OR SUPPLY OF LABOUR FOR CIVIL CONSTRUCTION, A SUM EQUAL TO EIGHT PER CENT OF THE GROSS RECEIPTS PAID OR PAYABL E TO THE ASSESSEE IN THE PREVIOUS ITA NO. 3629 /AHD/2015 . A.Y. 2011-1 2 4 YEAR ON ACCOUNT OF SUCH BUSINESS OR, AS THE CASE MA Y BE, A SUM HIGHER THAN THE AFORESAID SUM AS DECLARED BY THE ASSESSEE IN HIS RE TURN OF INCOME, SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF SUCH BUSINESS CHARGEABL E TO TAX UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION': PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY IN CASE THE AFORESAID GROSS RECEIPTS PAID OR PAYABLE EXCEED AN AMOUNT OF FORTY LAKH RUPEES. (2) ANY DEDUCTION ALLOWABLE UNDER THE PROVISIONS OF SECTIONS 30 TO 38 SHALL, FOR THE PURPOSES OF SUB-SECTION (1), BE DEEMED TO HAVE BEEN ALREADY GIVEN FULL EFFECT TO AND NO FURTHER DEDUCTION UNDER THOSE SECTIONS SHALL BE ALLOWED : PROVIDED THAT WHERE THE ASSESSEE IS A FIRM, THE SAL ARY AND INTEREST PAID TO ITS PARTNERS SHALL BE DEDUCTED FROM THE INCOME COMPUTED UNDER SU B-SECTION (1) SUBJECT TO THE CONDITIONS AND LIMITS SPECIFIED IN CLAUSE (B) OF SE CTION 40. (3) THE WRITTEN DOWN VALUE OF ANY ASSET USED FOR TH E PURPOSE OF THE BUSINESS REFERRED TO IN SUB-SECTION (1) SHALL BE DEEMED TO HAVE BEEN CALCULATED AS IF THE ASSESSEE HAD CLAIMED AND HAD BEEN ACTUALLY ALLOWED THE DEDUCTION IN RESPECT OF THE DEPRECIATION FOR EACH OF THE RELEVANT ASSESSMENT YEARS. (4) THE PROVISIONS OF SECTIONS 44AA AND 44AB SHALL NOT APPLY IN SO FAR AS THEY RELATE TO THE BUSINESS REFERRED TO IN SUB-SECTION (1) AND IN COMPUTING THE MONETARY LIMITS UNDER THOSE SECTIONS, THE GROSS RECEIPTS OR, AS THE CASE MAY BE, THE INCOME FROM THE SAID BUSINESS SHALL BE EXCLUDED. (5) NOTHING CONTAINED IN THE FOREGOING PROVISIONS O F THIS SECTION SHALL APPLY, WHERE THE ASSESSEE CLAIMS AND PRODUCES EVIDENCE TO PROVE THAT THE PROFITS AND GAINS FROM THE AFORESAID BUSINESS DURING THE PREVIOUS YEAR REL EVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1997 OR ANY EAR LIER ASSESSMENT YEAR, ARE LOWER THAN THE PROFITS AND GAINS SPECIFIED IN SUB-SECTION (1), AND THEREUPON THE ASSESSING OFFICER SHALL PROCEED TO MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE AND DETERMINE THE SUM PAYABLE BY THE ASSES SEE ON THE BASIS OF ASSESSMENT MADE UNDER SUB-SECTION (3) OF SECTION 143. (6) NOTWITHSTANDING ANYTHING CONTAINED IN THE FOREG OING PROVISIONS OF THIS SECTION, AN ASSESSEE MAY CLAIM LOWER PROFITS AND GAINS THAN, THE PROFITS AND GAINS SPECIFIED IN SUB-SECTION (1), IF HE KEEPS AND MAINTAINS SUCH BOO KS OF ACCOUNT AND OTHER DOCUMENTS AS REQUIRED UNDER SUB-SECTION (2) OF SECT ION 44AA AND GETS HIS ACCOUNTS AUDITED AND FURNISHES A REPORT OF SUCH AUDIT AS REQ UIRED UNDER SECTION 44AB. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'CIVIL CONSTRUCTION INCLUDES (A) THE CONSTRUCTION OR REPAIR OF ANY BUILDING, BR IDGE, DAM OR OTHER STRUCTURE OR OF ANY CANAL OR ROAD; (B) THE EXECUTION OF ANY WORKS CONTRACT.' 14. SEE ALSO CIRCULAR NO. 737, DATED 23-2-1996 (A DMISSIBILITY OF DEDUCTION U/S 40(B) TO FIRMS). FOR DETAILS, SEE TAXMANN'S MASTER GUIDE TO INCOME-TAX ACT. 15. FOR RELEVANT CASE LAWS, SEE TAXMANN'S MASTER G UIDE TO INCOME-TAX ACT. HIGHER THAN THE AFORESAID SUM CLAIMED TO HAVE BEEN EARNED BY THE ELIGIBLE ASSESSEE, SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSI ON: ITA NO. 3629 /AHD/2015 . A.Y. 2011-1 2 5 9. AND IN SECTION 44AE A SPECIAL PROVISION HAVE BEEN M ADE FOR COMPUTING PROFIT AND GAINS OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES WHEREIN IT IS MENTIONED THAT: (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAI NED IN SECTIONS 28 TO 43C, IN THE CASE OF AN ASSESSEE, WHO OWNS NOT MORE THAN TEN GOODS CARRIAGES 25[AT ANY TIME DURING THE PREVIOUS YEAR] AND WHO IS ENGAGED I N THE BUSINESS OF PLYING, HIRING OR LEASING SUCH GOODS CARRIAGES, THE INCOME OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS O R PROFESSION' SHALL BE DEEMED26 TO BE THE AGGREGATE OF THE PROFITS AND GAI NS, FROM ALL THE GOODS CARRIAGES OWNED BY HIM IN THE PREVIOUS YEAR, COMPUT ED IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (2). 27[(2) FOR THE PURPOSE OF SUB-SECTION (1), THE PROF ITS AND GAINS FROM EACH GOODS CARRIAGE SHALL BE AN AMOUNT EQUAL TO SEVEN THOUSAND FIVE HUNDRED RUPEES FOR EVERY MONTH OR PART OF A MONTH DURING WHICH THE GOO DS CARRIAGE IS OWNED BY THE ASSESSEE IN THE PREVIOUS YEAR OR AN AMOUNT CLAIMED TO HAVE BEEN ACTUALLY EARNED FROM THE VEHICLE, WHICHEVER IS HIGHER.] 10. AND BEFORE THE LD. CIT(A), ASSESSEE HAS GIVEN DETAI LED WORKING OF HIS INCOME. 11. IN SUPPORT OF ITS CONTENTION, ASSESSEE CITED A JUDG MENT OF HONBLE GUJARAT HIGH COURT IN THE MATTER OF CIT VS. SHAILESH RASIKL AL MEHTA WHEREIN IT IS HELD: THERE BEING NO DISPUTE ABOUT THE AMOUNT OF RS.30 L AKHS HAVING BEEN WITHDRAWN IN CASH FROM THE BANK ACCOUNT OF THE ASSESSEE BY M WHO STATED THAT THE SAME WAS DEPOSITED WITH THE TRIBUNAL WAS JUSTIFIED IN CO MING TO THE CONCLUSION THAT THERE WAS NO QUESTION OF TREATING THE DEPOSIT IN QU ESTION AS UNEXPLAINED AND NO ADDITION WAS WARRANTED. 12. WHEN ASSESSEE DECLARED HIS INCOME U/S. 44AD AND U/S . 44AE HE IS NOT SUPPOSED TO MAINTAIN BOOKS OF ACCOUNT AND AS PER LA NGUAGE OF THE SECTION 8% OF THE TOTAL TURNOVER TO BE CHARGED. ITA NO. 3629 /AHD/2015 . A.Y. 2011-1 2 6 13. AS WE CAN SEE, THAT ASSESSEE HAS EXPLAINED THE DEPO SIT AND WITHDRAWAL WERE FOR THE BUSINESS PURPOSE ONLY. THEREFORE, IN OUR CONSID ERED OPINION, LD. CIT(A) HAS PASSED REASONED ORDER AND IN THESE CIRCUMSTANCE S, WE ALLOW THE APPEAL OF THE ASSESSEE. 14. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 29- 05- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 29 /05/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD