Sh. Vikrant Kanshal, Bathinda V. The Icnomet-ax Officer, Bathinda

ITA 367/ASR/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7784 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 04-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Recovery proceedings; Business income; Business expenditure; Peak credit; Onus to prove; Reassessment proceedings
• Section: 143(3); 147; 68

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. 367/ASR/2014 AS SESSMENT YEAR: 2008-09 VIKRANT KANSAL PROP. V.K. TELESERVICES, BATHINDA [PAN: AGVPK 6899E] VS. ITO WARD 1(3), BATHINDA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHWANI KALIA (C.A.) RESPONDENT BY: SMT. PARWINDER KAUR, CIT-DR DATE OF HEARING: 12.06.2018 DATE OF PRONOUNCEMENT: 12.07.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA (CI T (A)' FOR SHORT) DATED 26.03.2014, DISMISSING THE ASSESSEES APPEAL CONTES TING HIS ASSESSMENT U/S. 143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 ('THE ACT' H EREINAFTER) DATED 23.11.2011 FOR THE ASSESSMENT YEAR (AY) 2008-09. 2. OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE A SSESSEE, IT WAS SUBMITTED BY THE LD. COUNSEL, SHRI ASHWANI KALIA, CA, THAT TH E ASSESSEE WAS DURING THE RELEVANT YEAR WORKING AS A RECOVERY AGENT FOR ICICI BANK. ADVERTING TO TDS CERTIFICATES (AT PB PGS 12, 13), THE SAME, HE WOULD CONTINUE, EVIDENCE THE COMMISSION EARNED FROM THE SAID ACTIVITY AT A GROSS AMOUNT OF RS.13.61 LACS FOR THE ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 2 RELEVANT YEAR, AND WHICH FORMED THE BASIS FOR THE A SSESSEE RETURNING A BUSINESS INCOME OF RS.3,73,550 FOR THE YEAR ON 23.03.2011 IN RESPONSE TO NOTICE U/S. 148. THE BASIS OF THE SAID NOTICE WAS THE CASH DEPOSITS (AT RS.11,63,500) IN THE BANK ACCOUNT (WITH CENTURION BANK OF PUNJAB CBOP) OF O NE, MEENAKSHI MITTAL (MM), PROCEEDINGS U/S. 147 AGAINST WHOM WERE DROPPE D ACCEPTING HER EXPLANATION THAT THE SAID MONEY IN FACT BELONGED TO THE ASSESSE E, PROPRIETOR V.K. TELESERVICES, BATHINDA. HE THEN TOOK US TO HER AFFIDAVIT DATED 10 .12.2010 AVERRING THAT SHE WAS WORKING AS A COLLECTION AGENT FOR V.K. TELESERVICES , AND WHATEVER CASH WAS COLLECTED (FROM THE ICICI BANKS CUSTOMERS) WAS, FO R THE SAKE OF SECURITY, DEPOSITED IN HER BANK ACCOUNT (PB PG. 11). CONFIRMI NG AFFIDAVIT OF EVEN DATE WAS ALSO FURNISHED BY THE ASSESSEE, ALSO STATING THAT T HE SAID MONEY WAS SUBSEQUENTLY WITHDRAWN AND DEPOSITED WITH ICICI BANK (PB PG. 10) . HOWEVER, PROCEEDINGS U/S. 147 WERE INITIATED IN THE CASE OF THE ASSESSEE TO B RING THE SAID AMOUNT TO TAX IN HIS HANDS. HE WOULD THEN TAKE US THROUGH THE BANK ACCOU NT OF MM FOR THE PERIOD 01.04.2007 TO 31.03.2008 (PB PGS. 7-9), SEEKING TO EMPHASIZE THAT THE CASH DEPOSITED FROM TIME TO TIME WAS WITHDRAWN. THE SAID EXPLANATION, ACCEPTED IN THE CASE OF MM, WAS NOT ACCEPTED IN THE CASE OF THE ASS ESSEE. NOT ONLY THAT, RATHER THAN MAKING AN ADDITION FOR THE PEAK AMOUNT, THE ENTIRE AMOUNT OF CASH DEPOSITED WAS DEEMED AS THE ASSESSEES INCOME U/S. 68, LEADING TO THE IMPUGNED ADDITION. THE SAID SECTION WAS, FIRSTLY, NOT APPLICABLE IN-AS-MUC H AS THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. THE ADDITION IS LIABLE TO BE QUASHED ON THIS SCORE ITSELF. EVEN ON FACTS, NO ADDITION, IT WAS CONTENDED, IS CALLED FOR AS THERE IS NO BASIS TO DOUBT THE ASSESSEES EXPLANATION GIVEN THE FACT OF EARNING CO MMISSION INCOME FROM ICICI BANK FOR THE RELEVANT YEAR AT RS.13.61 LACS. ON BEI NG ASKED OF THE BASIS TO STATE THAT THE ASSESSEE WAS WORKING AS A RECOVERY AGENT (FOR I CICI BANK), AND THE INCOME EARNED FROM BANK WAS IN ITS RESPECT, HE WOULD ADDUC E A COPY OF THE STANDARD TERMS AND CONDITIONS (COPY ON RECORD) OF AN AGREEMENT PUR PORTEDLY ENTERED INTO BETWEEN ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 3 ICICI BANK AND THE ASSESSEE, WHEREIN IT IS PROVIDED THAT THE SERVICE PROVIDER SHALL DEVELOP AND ESTABLISH A ROBUST FRAMEWORK FOR DOCUME NTING AND TESTING BUSINESS CONTINUITY AND RECOVERY PROCEDURES IN RELATION TO T HE SERVICES (CL. 2(XI)). FURTHER, ON BEING ASKED THE BASIS FOR STATING THAT THE CASH DEPOSITED IN THE BANK ACCOUNT OF MM WAS THAT COLLECTED FROM THE BANKS CUSTOMERS, WH O WOULD IN FACT BE ISSUED RECEIPTS FOR THE SAME, FOR WHICH THE ASSESSEE WOULD BE SPECIFICALLY AUTHORIZED, HE WOULD SUBMIT THAT THE SAME WERE ENCLOSED ALONG WITH THE AFFIDAVIT OF MM. NO SPECIFIC REPLY WAS GIVEN BY HIM ON BEING ASKED ABOU T THE RATE OF COMMISSION ON LOAN RECOVERY. FURTHER, ON THE BENCH OBSERVING THAT EVEN A COMMISSION RATE AS HIGH AS 5% WOULD IMPLY A TOTAL CASH COLLECTION (LOAN REC OVERY) OF RS.272.20 LACS (I.E., RS.13.61 LACS X 100/5), HE WOULD STATE THAT THE ENT IRE COMMISSION WAS NOT ON LOAN RECOVERY, AND A PART THEREOF WAS ALSO ON THE RECALL OF VEHICLES, I.E., AS A COERCIVE MEASURE INITIATED TO ENABLE RECOVERY OF THE VEHICLE LOANS BY THE BANK. HE CONCLUDED BY STATING THAT, IN ANY CASE, THE ASSESSE E CANNOT BE DENIED THE TELESCOPING BENEFIT, SO THAT ONLY THE PEAK AMOUNT, AS AGAINST THE ENTIRE CREDIT IN THE BANK ACCOUNT, WAS LIABLE TO BE ADDED, EVEN AS HELD BY THE TRIBUNAL IN MANY A CASE. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) WOULD SUBM IT THAT THERE IS NOTHING AMISS IN THE REVENUE DROPPING THE REASSESSM ENT PROCEEDINGS IN THE CASE OF MM ON THE ASSESSEE OWNING THE CASH DEPOSITS IN HER HIS EMPLOYEES, BANK ACCOUNT. FURTHER, THAT DID NOT, HOWEVER, IMPLY THAT THE REVENUE WAS BOUND TO ACCEPT THE ASSESSEES EXPLANATION AS TO THE NATURE AND SOURCE OF THE SAID CASH DEPOSITS. IT WAS AGAIN WHOLLY WRONG TO SAY THAT THE ASSESSEE, RUNNING A BUSINESS, IS NOT MAINTAINING ANY BOOKS OF ACCOUNT, HAVING, IN FA CT, CLAIMED AND BEEN ALLOWED BUSINESS EXPENDITURE, INCLUDING SALARY TO EMPLOYEES , AT RS.9.87 LACS IN-AS-MUCH AS HE HAS RETURNED AN INCOME OF RS.3.74 LACS ONLY AS A GAINST A GROSS INCOME (RECEIPT) OF RS.13.61 LACS. THE ASSESSEES CASE, EVEN AS NOTE D BY THE REVENUE AUTHORITIES, IS COMPLETELY UNSUBSTANTIATED. ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 4 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 GROUND 1 OF THE APPEAL, CHALLENGING THE VALIDIT Y OF THE REASSESSMENT PROCEEDINGS, WAS NOT PRESSED DURING HEARING, WITH T HE LD. AR MAKING AN ENDORSEMENT TO THAT EFFECT ON THE APPEAL MEMO. 3.2 WE, NEXT, CONSIDER THE MERITS OF THE IMPUGNED A DDITION, SINCE SUSTAINED. EVEN AS OBSERVED BY THE BENCH DURING HEARING, IT IS WHOLLY INCORRECT TO SAY, AND WHICH FORMS THE BASIS OF THE ASSESSEES LEGAL STAND ASSUMED BEFORE US, THAT THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. H OW IS, THEN, THE CASH COLLECTED FROM (THE BANKS) CUSTOMERS ACCOUNTED FOR? THE LD. AUTHORIZED REPRESENTATIVE (AR) ON BEING QUERIED DURING HEARING AS TO IF THE C ASH DEPOSITED IN THE BANK ACCOUNT OF MM REPRESENTED THE ENTIRE CASH COLLECTED BY V.K. TELESERVICES AS RECOVERY FROM THE BANKS CUSTOMERS, WOULD CLARIFY I T TO BE NOT SO, THE BALANCE AND THE MAJOR PART, WAS EXPLAINED AS BEING DEPOSITED IN THE BANK ACCOUNT OF THE SAID PROPRIETARY FIRM. IN FACT, THIS FORMED THE BASIS OF HIS STATING ON MERITS, THAT THE AO HAVING ACCEPTED HIS EXPLANATION OF THE SOURCE OF THE CASH DEPOSITED IN HIS CASE, EFFECTING NO ADDITION ON THAT ACCOUNT, WAS NOT JUST IFIED IN NOT ACCEPTING THE SAID EXPLANATION QUA THAT DEPOSITED IN THE BANK ACCOUNT OF MM, AN EMPLO YEE. CLEARLY, THEREFORE, THE CASH COLLECTED STANDS PRESUMABLY DUL Y ACCOUNTED FOR AND REFLECTED IN THE ASSESSEES BOOKS OF ACCOUNT, WITH, AS POINTED O UT BY THE LD. DR, THE ASSESSEE CLAIMING BUSINESS EXPENSES AT AN AGGREGATE OF RS.9. 87 LACS, AGAIN IMPLYING MAINTAINING BOOKS OF ACCOUNT. THAT IS, THE ASSESSEE S ASSESSED BUSINESS INCOME OF RS.3.74 LACS IS ONLY AS THAT DISCLOSED PER HIS ACCO UNTS. WHY, AS NOTED IN THE IMPUGNED ORDER (PARA 2.5), THE ASSESSEES COUNSEL B EFORE THE LD. CIT(A), SHRI NARENDER GOEL, RAISED A SPECIFIC PLEA THAT THE NON- PRODUCTION OF BOOKS OF ACCOUNT BEFORE THE AO WAS ONLY FOR THE REASON THAT HE (AO) DID NOT ASK THE ASSESSEE TO DO ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 5 SO. WHICH ONLY MEANS THAT THE BOOKS OF ACCOUNT WERE MAINTAINED AND, FURTHER, BORE THE RELEVANT ENTRIES, EXPLAINING THE NATURE AND SOU RCE OF THE CASH UNDER REFERENCE. THE PLEA URGED WOULD BE OF NO RELEVANCE OR MEANING OTHERWISE? IN FACT, THE ASSESSEES STAND ALL THROUGH HAS BEEN THAT THE CASH DEPOSITED IN THE BANK ACCOUNT OF MM FORMS PART OF THAT COLLECTED FROM THE BANKS CUS TOMERS, PARKED IN HER ACCOUNT FOR SAFE DEPOSIT, AND DULY ACCOUNTED, EVEN AS THAT SO COLLECTED, DEPOSITED IN THE ASSESSEES BANK ACCOUNT, HAS NOT BEEN DOUBTED BY TH E AO. THE PLEA OF NON- MAINTENANCE OF BOOKS OF ACCOUNT IS THEREFORE ONLY A BOGEY. FURTHER, THE BOOKS OF ACCOUNT HAVING BEEN ADMITTEDLY NOT PRODUCED BEFORE THE AO, IT IS INCORRECT TO INFER, AS STATED, THAT THE BALANCE CASH COLLECTED FROM THE BANKS CUSTOMERS WAS DEPOSITED IN THE FIRMS BANK ACCOUNT, OR THAT AN EXPLANATION TO THAT EFFECT STANDS ACCEPTED BY THE AO. THERE IS NO REFERENCE THERETO IN THE ASSESS MENT ORDER, OR ANYTHING ON RECORD TO SUGGEST SUCH A CONTENTION, MUCH LESS ITS ACCEPTANCE. CONTINUING FURTHER, THE MONEY DEPOSITED IN THE BAN K ACCOUNT OF MM ADMITTEDLY BELONGING TO THE ASSESSEE, WHERE ITS SO URCE IS TRACED ON THE BASIS OF THE MATERIAL BROUGHT ON RECORD, TO THE COLLECTION F ROM THE BANKS CUSTOMERS, THE MONEY, THOUGH LYING WITH THE ASSESSEE AND REFLECTED IN HIS ACCOUNTS, IS HELD BY HIM UNDER TRUST. SUCH AMOUNTS, I.E., RECEIVED UNDER TRU ST, WHETHER LYING IN THE FORM OF CASH OR DEPOSITED IN BANK, ARE NORMALLY CREDITED TO AN APPROPRIATELY TITLED ACCOUNT, AS (SAY) MONEY RECEIVED UNDER TRUST OR COLLECTIO N FROM ICICI BANKS CUSTOMERS, ETC., INDICATING BOTH THE NATURE AND SO URCE OF THE RECEIPT (CREDIT). IN FACT, ALL THAT THE ASSESSEE WAS THEREFORE REQUIRED TO DO, ASSUMING A LACK OF PROPER OPPORTUNITY BY THE AO FOR THE SAME, WAS TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE LD. CIT(A), SHOWING THE CASH DEPOSITED IN THE B ANK ACCOUNT OF MM AS DULY REFLECTED THEREIN, AND WHICH WOULD AT ONCE EXPLAIN THE NATURE AND SOURCE OF THE SAID CASH. GIVEN THE ASSESSEES PLEA OF THE AMOUNTS BEIN G DULY ACCOUNTED FOR, WHICH WAS IN FACT WHAT THE AO REQUIRED THE ASSESSEE TO EX HIBIT, GIVING A SATISFACTORY ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 6 EXPLANATION AS TO ITS NATURE AND SOURCE, WE FIND NO THING AMISS IN THE INVOCATION OF SECTION 68 BY THE AO. FURTHER, EVEN ASSUMING THAT THE SAME (THE CASH UND ER REFERENCE), FOR SOME REASON, REMAINED TO BE ENTERED IN THE ASSESSEES BO OKS OF ACCOUNT, WHICH WERE NEVER PRODUCED OR EXAMINED, THE NATURE AND THE SOUR CE OF THE CASH WOULD YET BE REQUIRED TO BE SATISFACTORILY EXPLAINED BY THE ASSE SSEE U/S. 69A, SUBSTANTIATING HIS EXPLANATION OF THE SAME REPRESENTING COLLECTION FRO M THE BANKS CUSTOMERS, AND SUBSEQUENTLY DEPOSITED WITH THE BANK, WITH EVIDENCE . WE STATE SO AS THERE IS, ELSE, NO REASON FOR THE NON-PRODUCTION OF THE BOOKS OF AC COUNT; THE ASSESSEE, RATHER, BEFORE US GOING TO THE EXTENT OF TAKING A CONTRARY STAND, I.E., VIS-A-VIS THAT BEFORE THE REVENUE AUTHORITIES, OF THEIR NON MAINTENANCE. THAT IS, THE BOOKS OF ACCOUNT HAVING NOT BEEN PRODUCED AT ANY STAGE, IT MAY WELL BE AND WHICH APPEARS LIKELY, INASMUCH AS PRODUCTION OF ACCOUNTS WOULD HAVE RATHE R SETTLED THE MATTER, THAT THE RECEIPT OF THE IMPUGNED CASH IS NOT RECORDED THEREI N. THE SAME THOUGH WOULD NOT BE DETERMINATIVE OF THE MATTER AS, AS EXPLAINED, EI THER WAY, THE NATURE AND THE SOURCE OF THE CREDIT OR, AS THE CASE MAY BE, ACQUIS ITION OF MONEY, IS REQUIRED TO BE PROVED BY THE ASSESSEE TO THE AO, FURNISHING A SATI SFACTORY EXPLANATION IN ITS RESPECT. THE ASSESSEE ADMITTEDLY OWNING THE AMOUNTS UNDER REFERENCE, IT IS IMMATERIAL WHETHER THE ASSESSEES EXPLANATION WOULD QUALIFY AS ONE U/S. 68 OR U/S. 69A. THIS IN FACT IS PRECISELY WHAT THE HON'BLE HIG H COURT CLARIFIES IN NAMDEV ARORA V. CIT [2016] 389 ITR 434 (P&H), REFERENCE TO WHICH WAS M ADE BY THE BENCH DURING HEARING. IN THE FACTS OF THAT CASE AN ADDITION MADE AND SUSTAINED U/S. 69A, WAS CONFIRMED BY THE TRIBUNAL U/S. 68. ON THE ASSESSEE RAISING THE ISSUE OF LEGALITY OF SUCH AN ACTION BY THE TRIBUNAL, THE HON 'BLE JURISDICTIONAL HIGH COURT DISMISSED THE APPEAL, HOLDING AS FOLLOWS: HELD, DISMISSING THE APPEAL, THAT IT WAS THE ASSES SEE WHO CLAIMED TO HAVE RECEIVED THE AMOUNT AS A LOAN. THE BURDEN, THEREFORE, WAS ON HIM TO ESTABLISH THAT FACT. THE ASSESSEE HAD FAILED TO DISCHARGE THIS BURDEN. IT WAS IMPOSSIBLE TO BELIEVE THAT AN AMOUNT OF RS.30 LACS WAS ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 7 LENT AND ADVANCED BY DP TO THE ASSESSEE. THERE WERE SEVERAL FACTS AND CIRCUMSTANCES THAT ESTABLISHED THE INHERENT IMPROBABILITY OF THE ASSES SEES CASE OF A LOAN . THERE WAS NOT A SINGLE DOCUMENT EVIDENCING THE LOAN . THERE WAS NO EXPLANATION AS REGARDS THE ABSENCE OF ANY DOCUMENT EVIDENCING THE LOAN . THERE WAS NOTHING TO SUGGEST ANY SPECIAL RELATION SHIP BETWEEN THE PARTIES ON ACCOUNT WHEREOF SUCH A LARGE LOAN WOULD BE ADVANCED WITHOUT THE LENDER INSISTING UPON ANY DOCUMENT EVIDENCING IT. T HE LOANS ADMITTEDLY HAD NOT BEEN REPAID UP TO DATE. THERE WAS NO EXPLANATION FOR THAT EITHE R. THIS WAS MERELY A CASE OF A WRONG SECTION BEING MENTIONED IN THE ASSESSMENT ORDER AND IN THE ORDER OF THE COMMISSIONER (APPEALS) . ALL THE JURISDICTIONAL FACTS FOR INVOKING SECTION 68 EXISTED. THE ENQUIRIES MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS WERE NOT STATED TO BE UNDER ANY PARTICULAR PROVISION OF THE ACT. THE ENQUIRIES WERE MERELY FACTUAL RELATING TO THE SOURCE OF ACQUISITION OF THE MONEY. THE ASSESSEE HAD NOT BEEN PREJUDICED IN ANY MANNER WHATSOEVER ON ACCOUNT OF THE ASSESSING OFFICER HAVING MENTIONE D THE WRONG SECTION . THE ASSESSMENT WAS VALID. [EMPHASIS, OURS] THE LEGAL ASPECT IS IN FACT WELL-SETTLED, WITH THE FACTS OF THE INSTANT CASE ALSO, AS WE SHALL PRESENTLY SEE, BEING SIMILAR TO THAT BEFORE T HE HONBLE COURT, AND WHICH ALSO EXPLAINS THE EMPHASIS MADE BY US IN THE EXTRACTED P ART. SECTIONS 68, 69, 69A ET.AL. (I.E., ALONG WITH SECTIONS 69B TO 69D), ARE ALSO RU LES OF EVIDENCE, SO THAT WHERE THE ASSESSEE FAILS TO SATISFACTORILY PROVE THE CREDIT ( OR INVESTMENT, MONEY, EXPENDITURE, ETC.), THE SAME IS LIABLE TO BE DEEMED AS HIS INCOM E FOR THE RELEVANT YEAR, I.E., ON HIS FAILING TO SATISFACTORILY EXPLAIN THE NATURE AND SO URCE THEREOF. WHY, THE APEX COURT APPROVED AND CONFIRMED THE ADDITIONS QUA CASH CREDIT EVEN UNDER THE INCOME TAX ACT, 1922 WHICH DID NOT CONTAIN A PROVISION ANALOGO US TO S. 68, ETC., STATING THAT THE ONUS TO PROVE THE SOURCE OF MONEY FOUND TO BE RECEI VED BY THE ASSESSEE IS ON HIM, I.E., IS AN EVIDENCE OF INCOME, AND IT IS THEREFORE FOR HIM TO SHOW THAT THE SAME IS NOT IN THE NATURE OF INCOME, REBUTTING THE PRESUMPT ION WITH CREDIBLE EXPLANATION/ MATERIAL, PROVING THE GENUINENESS OF THE SAID CREDI T (REFER, INTER ALIA, GOVINDA RAJULU MUDALIAR V. CIT [1958] 34 ITR 807 (SC); SREELEKHA BANERJEE & OTHRS. V. CIT [1963] 49 ITR 112 (SC); KALEKHAN MOHAMMED HANIF V. CIT [1963] 50 ITR 1(SC) (AFFIRMING THE LANDMARK DECISION REPORTED AT [1958] 34 ITR 669 (MP)); CIT V. DURGA PRASAD MORE [1971] 82 ITR 540 (SC)). AS EXPLAINED IN CHUHARMAL V. CIT [1988] 172 ITR 250 (SC), THESE PROVISIONS ONLY SEE K TO PROVIDE STATUTORY ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 8 RECOGNITION TO THE PRINCIPLES OF COMMON LAW JURISPR UDENCE AS ENSHRINED IN THE EVIDENCE ACT. THOUGH THE MATTER IS PRINCIPALLY FACT UAL, SO THAT IT SHOULD NOT GIVE RISE TO ANY CONFUSION, THE USER OF ONE SECTION INST EAD OF ANOTHER, WHICH MAY HAPPEN AT TIMES, AND WHICH IS THE ASSESSEES GRIEVANCE, ST ANDS EXPLAINED BY THE HON'BLE HIGH COURTS TIME AND AGAIN, AS IN JAUHARIMAL GOEL [2005] 147 TAXMAN 448 (ALL), HOLDING THAT THE PROVISIONS ARE COGNATE AND COMPLIM ENTARY. WHERE THE AMOUNT IS CREDITED IN THE BOOKS, IT IS THE NATURE AND SOURCE THEREOF THAT IS TO BE EXPLAINED. WHERE NOT, IT IS THE FORM IN WHICH MANIFESTS ITSELF , VIZ. CASH, INVESTMENT, INVENTORY, BANK ACCOUNT, EXPENDITURE, ETC., THAT IS TO BE EXPL AINED. FURTHER, THE AOS ACTION IS TO BE EXAMINED WITH REFERENCE TO HIS POWER TO ACT I N THE MANNER HE DOES, I.E., TO DO WHAT HE HAS DONE, AND IF HE HAS THE REQUISITE POWER TO DO SO, IT IS IMMATERIAL IF THE SOURCE OF THAT POWER IS NOT MENTIONED OR MENTIONED INCORRECTLY. REFERENCE BY HIM TO A WRONG SECTION, OR EVEN NO REFERENCE TO ANY AT ALL, EVEN AS NOTED BY THE HON'BLE COURT IN NAMDEV ARORA (SUPRA), IN-AS-MUCH AS IN THAT CASE THE AO DID NOT REFER TO SECTION 68 WHILE SEEKING THE ASSESSEES EXPLANATION AS TO NATURE AND SOURCE OF RECEIPT OF MONEY, IS TO NO MOMENT. THE PRINCIPLE IS IN FACT WELL-SETTLED. REFERENCE IN THIS CONTEXT MAY BE MADE TO THE DECISION IN P.K.PALANISAMY VS. N. ARUMUGHAM & ANR. (ARISING OUT OF SLP (CIVIL) NO. 2308 OF 2009, DATE D JULY 23, 2009), WHEREIN THE HONBLE APEX COURT, AFTER REFERRING TO PRECEDEN TS, OBSERVED AS UNDER: IT IS A WELL SETTLED PRINCIPLE OF LAW THAT MENTION ING OF A WRONG PROVISION OR NON-MENTIONING OF A PROVISION DOES NOT INVALIDATE AN ORDER IF THE COURT AND/OR STATUTORY AUTHORITY HAD THE REQUISITE JURISDICTION THEREFOR. SIMILARLY, IN N. MANI V. SANGEETHA THEATRES & ORS . [(2004) 12 SCC 278], IT STATED AS UNDER: 9. IT IS WELL SETTLED THAT IF AN AUTHORITY HAS A PO WER UNDER THE LAW MERELY BECAUSE WHILE EXERCISING THAT POWER THE SOURCE OF POWER IS NOT SP ECIFICALLY REFERRED TO OR A REFERENCE IS MADE TO A WRONG PROVISION OF LAW, THAT BY ITSELF DO ES NOT VITIATE THE EXERCISE OF POWER SO LONG AS THE POWER DOES EXIST AND CAN BE TRACED TO A SOUR CE AVAILABLE IN LAW. ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 9 THE MATTER, FOR A STILL BETTER APPRECIATION, MAY BE LOOKED AT FROM ANOTHER ANGLE AS WELL. PROCEEDINGS UNDER THE ACT ARE NOT AD VERSARIAL IN NATURE, AND THE PURVIEW OF AN APPELLATE AUTHORITY, AS THE TRIBUNAL, IS THE CORRECT DETERMINATION OF THE ASSESSEES INCOME AND CONSEQUENTIAL TAX LIABILI TY ( CIT V. INDIAN EXPRESS (MADURAI) PVT. LTD. [1983] 140 ITR 705 (MAD); AHMEDABAD ELECTRICITY CO. LTD. V. CIT [1993] 199 ITR 351 (BOM-FB)), ON WHICH IT IS THERE FORE INCUMBENT TO ISSUE PROPER DIRECTIONS TO THE REVENUE AUTHORITIES ( KAPURCHAND SHRIMAL V. CIT [1981] 131 ITR 451 (SC)). EVEN RULES 11 AND 27 OF THE INCO ME TAX (APPELLATE TRIBUNAL) RULES, 1963 ARE NOT EXHAUSTIVE OF THE POWERS OF THE TRIBUNAL, AS EXPLAINED IN HUKUMCHAND MILLS LTD. V. CIT [1967] 63 ITR 232 (SC). THE ASSESSEE HAS PLACED SOME DECISIONS BY THE TRIB UNAL IN ITS COMPILATION, WHICH WAS, WITHOUT REFERRING TO THEM, STATED AS BEI NG IN SUPPORT OF THE LEGAL PROPOSITION BEING ADVANCED. WE HAVE NEVERTHELESS PE RUSED THE SAME. THE SAME STAND RENDERED RELYING ESSENTIALLY ON THE DECISION IN SHANTI DEVI V. CIT [1988] 171 ITR 532 (P&H). WE SAY SO AS IT IS NOBODYS CASE THA T THE BANK ACCOUNT OF AN ASSESSEE CONSTITUTES HIS BOOKS OF ACCOUNT, AS CLARI FIED IN CIT V. BHAICHAND H. GANDHI [1983] 141 ITR 67 (BOM), THE OTHER CASE PRINCIPALL Y RELIED UPON BY THE TRIBUNAL IN THESE ORDERS. THE ISSUE IN SHANTI DEVI (SUPRA), AS ITS READING SHOWS, WAS WHETHER THE BOOKS OF ACCOUNT OF AN ASSESSEE-FIR M COULD IN LAW BE CONSIDERED AS THE BOOKS OF ACCOUNT OF A PARTNER. A PARTNER, IT WAS EXPLAINED WITH REFERENCE TO THE DECISION IN CIT V. A.W. FIGGIES & CO. [1953] 24 ITR 405 (SC), TO BE A SEPARATE ASSESSABLE ENTITY. THE HON'BLE COURT, AFTER A REFER ENCE TO THE PROVISIONS OF SECTIONS 68 AND 69, BEING COGNATE, HELD THAT THE BOOKS OF AC COUNT REFERRED TO IN SECTION 68 ARE OF THE ASSESSEE AND NOT OF ANY OTHER (PARTNER). THE CREDIT (TO THE PARTNERS ACCOUNT) BEING IN THE BOOKS OF THE PARTNERSHIP FIRM , ADDITION QUA THE SAID SUM (CREDIT) COULD ONLY BE IN THE CASE OF THE FIRM. WE ARE UNABLE TO SEE AS TO HOW THE SAME SUPPORTS THE ASSESSEES CASE IN THE INSTANT AP PEAL. ON THE CONTRARY, WE HAVE, ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 10 WITH REFERENCE TO THE DECISIONS BY THE HON'BLE APEX COURT AND THE JURISDICTIONAL HIGH COURT, EXPLAINED THE MATTER AS WELL-SETTLED TO THE CONTRARY. 3.3 WE MAY NEXT EXAMINE THE ASSESSEES CASE ON MERI TS. THE ASSESSEE DID NOT FIND FAVOUR WITH THE REVENUE AS BOTH THE ASSESSING OFFICER AND THE LD. CIT(A) FOUND HIS CASE TO BE WHOLLY UNSUBSTANTIATED. WE CAN HARDLY DISAGREE. WHY, FIRSTLY, WERE THE ASSESSEES BOOKS OF ACCOUNT WHICH ARE IN FACT HIS EXPLANATION, NOT PRODUCED EITHER BEFORE THE AO IN THE ASSESSMENT PRO CEEDINGS, I.E., ON HIS OWN, OR EVEN SUBSEQUENTLY BEFORE THE LD. CIT(A)? NEITHER THE SOURCE (ORIGIN) OF THE CASH DEPOSITED IN THE MMS BANK ACCOUNT NOR ITS DESTINAT ION, STATED TO BE THE BANKS CUSTOMERS AND THE BANK RESPECTIVELY, IS EVIDENCED . THE RECEIPT OF CASH UNDER THE CIRCUMSTANCES CANNOT BUT BE WITHOUT ISSUE OF RECEIP T. IN FACT, PROPER AUTHORIZATION IS TO BE ISSUED FOR THE PURPOSE, SO AS TO SATISFY T HE CUSTOMERS THAT THE AMOUNT BEING TENDERED BY THEM IS TO A PERSON AUTHORIZED BY THE B ANK. NO SUCH RECEIPT OR AUTHORIZATION IN FAVOUR OF MM (OR EVEN THE ASSESSEE ) IS ON RECORD. THIS IS ALL THE MORE SURPRISING CONSIDERING THAT THE SAME ARE STATE D TO HAVE BEEN FURNISHED BEFORE THE REVENUE ALONG WITH THE AFFIDAVITS, WHICH HAVE B EEN BROUGHT ON RECORD. THEN, AGAIN, WHY IS NOT THE CASH DEPOSITED IN THE ASSESSE ES BANK ACCOUNT, BUT OF AN EMPLOYEE? WHY, THE CASH WOULD BE EQUALLY SAFE IF DE POSITED IN THE ASSESSEES BANK ACCOUNT! IN FACT, THE TDS CERTIFICATES DO NOT REFER TO THE INCOME ALLOWED BY THE BANK AS COMMISSION BUT AS PROFESSIONAL SERVICES , SO THAT EVEN THE NATURE OF THE JOB/S IS NOT PROVED. FURTHER, GIVEN THE NATURE OF T HE JOB, IT IS EXTREMELY UNLIKELY THAT A LADY WOULD BE ENGAGED FOR PURPOSE OF EFFECTING LO AN RECOVERY FROM DELINQUENT CUSTOMERS, I.E., CONSIDERING THE HOSTILE RESPONSE T HAT IS GENERALLY ENCOUNTERED OR ANTICIPATED WHILE SEEKING AND EFFECTING RECOVERY. W HY, AGAIN, WAS THE CASH NOT SIMILARLY PARKED IN THE BANK ACCOUNTS OF OTHER COLL ECTING AGENTS? THE CASH DEPOSITED, STATED TO BE FOR THE SAFE DEPOSIT OF THE COLLECTION FOR THE DAY, IS NOT ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 11 WITHDRAWN THE NEXT DAY. IN FACT, THIS IS A RARITY; THE WITHDRAWAL ON SEVERAL OCCASIONS BEING AFTER SEVERAL DAYS, EXTENDING UP TO 64 DAYS. WHY? RATHER, IT IS AGAIN EXTREMELY UNLIKELY THAT THE BANK HAS NOT ISSU ED DETAILED GUIDELINES IN THIS RESPECT, COVERING ALL THE ASPECTS AFORE-REFERRED, V IZ. ISSUE OF RECEIPTS ON COLLECTION OF MONEY; DEPOSIT IN BANK ACCOUNT, INCLUDING THE ID ENTITY OF THE BANK AND THAT OF THE ACCOUNT HOLDER; THE PERIODICITY OF THE WITHDRAW ALS (INCLUDING THE MANNER OF TRANSFER), ETC. THIS IS ALSO INFERABLE FROM CLAUSE 2(XI) OF THE STANDARD TERMS AND CONDITIONS AFORE-REFERRED. WHY, AGAIN, WERE THE AMO UNTS NOT DIRECTLY TRANSFERRED TO THE BANK ACCOUNT OF V.K. TELESERVICES OR ICICI BANK ITSELF. FURTHER, THE WITHDRAWALS REVEAL NO PATTERN, WITH THE ACCUMULATIO N EVEN AS THE DEPOSITS ARE AS LOW AS RS.5,000/-, EXTENDING UP TO RS.3 LACS (APPRO X.). THEN, IF THE SAME STAND, UPON WITHDRAWAL, DEPOSITED, AS STATED, WITH ICICI B ANK, THE DETAILS OF WITHDRAWAL AND DEPOSIT (WITH THE DEPOSITEE BANK) MUST AGREE, E VEN IF THE AMOUNT STANDS CHANGED DUE TO INCLUSION OF THE AMOUNT WITHDRAWN, L IKEWISE, FROM THE ASSESSEES BANK ACCOUNT. THE SAME IS NOT EXHIBITED AT ALL. THE RE IS NO CORROBORATIVE EVIDENCE ( QUA CASH TRANSACTIONS) FROM ICICI BANK. IT IS THEREFOR E NOT INCORRECT TO SAY THAT THE ASSESSEES CASE IS WHOLLY UNSUBSTANTIATED, COMPRISI NG OF BALD ASSERTIONS. THE LD. COUNSEL FOR THE ASSESSEE WAS AT THIS STAGE ENQUIRED IF THE ASSESSEE WOULD BE ABLE TO LEAD MATERIAL TO EVIDENCE HIS CASE , I.E., IF IT WERE TO BE SET ASIDE, CONSIDERING HIS PLEA OF HAVING BEEN UNABLE TO REPRE SENT HIS CASE PROPERLY ON ACCOUNT OF SERIOUS AILMENT OF HIS SON, WHO ULTIMATE LY EXPIRED (REFER ASSESSEES WRITTEN SUBMISSIONS TO THE LD. CIT(A), AT PB PGS. 5 -6). SHRI KALIA WOULD SHOW REFRAIN, STATING THAT IT WOULD NOT BE OF MUCH HELP AS THE ASSESSEES BUSINESS STANDS SINCE CLOSED. THE BURDEN TO PROVE THAT A CASE FOR B EING ALLOWED TELESCOPING BENEFIT IS MADE OUT IS ON THE ASSESSEE, EVEN AS EXPLAINED I N ANANTHARAM VEERASINGHAIAH & CO. V. CIT [1980] 123 ITR 457 (SC). NO SUCH CASE IS MA DE OUT THE MATTER BEING AGAIN FACTUAL. AS OBSERVED BY THE BENCH DURING HEAR ING, THERE IS NOTHING TO SHOW ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 12 THAT THE ASSESSEE IS INTO TRADING ACTIVITY, INVOLVI NG ROTATION OF FUNDS, IN WHICH CASE ONLY IN THE PRESENT CONTEXT, A TELESCOPING BENEFI T COULD BE GIVEN. THAT IS, THE PLEA FOR TELESCOPING BENEFIT IS AGAIN A BALD PLEA WITHOU T ANY BASIS IN FACTS. RATHER, IT CONTRADICTS THE ASSESSEES STAND OF THE CASH DEPOSI TED IN THE BANK ACCOUNT OF MM AS THAT COLLECTED FROM THE PRINCIPAL BANKS CUSTOME RS, I.E., AS ITS AGENT. THE PLEA OF PEAK CREDIT, THUS, IS A TACIT ADMISSION OF THE ASSE SSEE HAVING NO CASE ON MERITS. WE, HOWEVER, CONSIDERING THE TOTALITY OF FACTS, INCLUDI NG THE ASSESSEES INABILITY TO, FOR COMPELLING REASONS, NOT TO PLEAD HIS CASE WHICH I S PRINCIPALLY FACTUAL, LEADING TO NO PROPER REPRESENTATION BEFORE THE REVENUE, AS WEL L AS TO GIVE A QUIETUS TO THE MATTER, DEEM IT PROPER THAT THE ADDITION FOR THE UN EXPLAINED CREDITS OR, AS THE CASE MAY BE, CASH DEPOSITS BY HIM IN THE BANK ACCOUNT OF ONE OF HIS EMPLOYEES, BE RESTRICTED TO THE PEAK CREDIT IN THE SAID ACCOUNT, I.E., RS.2,88,713/-, ON 19.03.2008. THE AO SHALL CAUSE VERIFICATION OF THE SAME FOR ITS VERACITY. 3.4 WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 12, 2018 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER 5. HAVING PERUSED THE ORDER DATED 12.07.2018 PASSED BY THE HONBLE ACCOUNTANT MEMBER, ALTHOUGH PRINCIPALLY I AM IN AGR EEMENT WITH THE RESULT ON MERIT, HOWEVER, IN REFERENCE TO PARA NO.3.2 OF THE AFORESAID ORDER, IN WHICH THE APPLICABILITY OF SEC.68 TO THE CASE OF THE ASSESSEE HAS BEEN ELABORATELY DISCUSSED, I AM IN CONCURRENCE ONLY UPTO THE APPLICABILITY OF SE CTION 68 OF THE ACT ON MERIT. AS IT IS CLEARLY WRITTEN IN THE IMPUGNED ORDER PARA 2.5 THAT THE ASSESEES COUNSEL HAS RAISED A SPECIFIC PLEA THAT THE NON-PRO DUCTION OF BOOKS OF ACCOUNT ITA NO. 367/ASR/2014 (AY 2008-09) VIKRANT KANSAL PROP. V. K. TELESERVICES V ITO 13 BEFORE THE AO WAS ONLY BY THE REASON THAT THE AO DI D NOT ASK THE ASSESSEE TO DO SO. THIS OBSERVATION HAS NOT BEEN REFUTED BY THE AS SESSEE, WHICH GOES TO SHOW THAT THE BOOKS OF ACCOUNTS WERE DULY MAINTAINED, THEREFO RE I AM IN CONCURRENCE WITH MY LD. BROTHER THAT SECTION 68 OF THE ACT, STANDS RIGH TLY INVOKED BY THE ASSESSING OFFICER IN THE PRESENT CASE. HENCE, ONCE IT IS HELD THAT THE INVOCATION OF SEC.68 BY THE AO HAS RIGHTLY BEEN MADE THEN IN MY CONSIDERED OPINION NOTHING FURTHER REQUIRES TO BE TRAVELED TO AND THEREFORE, ON THE RE ASONS STATED ABOVE, I AM INCLINED TO ENDORSE THAT THE ASSESSEE WAS MAINTAINING THE BO OKS OF ACCOUNTS, HOWEVER, THE SAME HAVE NOT BEEN PRODUCED BEFORE THE ASSESSING OF FICER ON THE REASON AS SPECIFIED IN THE ORDER OF THE LD. CIT(A) THAT THE A SSESSEE DID NOT ASK TO DO SO. I FURTHER CONCURRED WITH THE CONCLUSION DRAWN BY THE HONBLE ACCOUNTANT MEMBER IN PARA NO.3.3. 6. IN THE RESULT, THE ASSESSEES APPEAL PARTLY ALLO WED. SD/- N.K. CHOUDHRY (JUDICIAL MEMBER) DATE: 12.07.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: VIKRANT KANSAL, PROP. V.K. T ELESERVICES, BATHINDA (2) THE RESPONDENT: ITO WARD 1(3), BATHINDA (3) THE CIT(APPEALS), BATHINDA (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER