SHRI RAVINDRA MANIKRAO METKAR , AMRAVATI V. INCOMKE TAX OFFICER WARD -3, AMRAVATI

ITA 374/NAG/2017

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8888 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 10-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Keywords: Business income; Set aside
• Section: 234B; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.374/NAG./2017 ( ASSESSMENT YEAR : 200708 ) SHRI RAVINDRA MANIKRAO METKAR 45, NEW PRABHAT COLONY NEAR SHANKAR NAGAR, AMRAVATI PAN AOQPM84978P APPELLANT V/S INCOME TAX OFFICER WARD3, AMRAVATI .... RESPONDENT ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI R.K. BARAL DATE OF HEARING 09.05.2018 DATE OF ORDER 10.05 .2018 O R D E R PER SHAMIM YAHYA, A.M. THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS AGA INST THE IMPUGNED ORDER DATED 3 RD JULY 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS)1, NAGPUR, RELEVANT TO THE A SSESSMENT YEAR 200708. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED B ELOW: 1. THE NOTICE ISSUED U/S 148 OF IT. ACT 1961 IS IL LEGAL, INVALID AND BAD IN LAW AND CONSEQUENT ASSESSMENT FRAMED THEREUP ON IS LIABLE TO BE CANCELLED. 2 SHRI RAVINDRA MANIKRAO METKAR 2. THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION AT RS.3,62,000/- MADE BY A.O. ON ACCOUNT OF CASH DEPOS IT IN BANK ACCOUNT OF ASSESSEE. 3. THE ADDITION MADE BY A.O. BY NOT ACCEPTING EXPLA NATION OF ASSESSEE WITH REGARD TO CASH DEPOSIT IN BANK ACCOUN T OF ASSESSEE AND CONFIRMED BY CIT(A) IS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW. 4. THE LEARNED A.O. AND CIT(A) OUGHT TO HAVE ACCEPT ED THE EXPLANATION OF ASSESSEE WITH REGARD TO DEPOSIT IN B ANK ACCOUNT OF ASSESSEE. 5. THE ASSESSEE DENIES LIABILITY TO BE ASSESSED TO INTEREST U/S 234A & 234B OF IT. ACT 1961. WITHOUT PREJUDICE THE INTEREST LEVIED U/S 234A AND 234B IS UNJUSTIFIED AND UNWARRANTED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF RUNNING TOUR AND TRAVEL AGENCY. RET URN OF INCOME WAS FILED ON 8 TH JANUARY 2008, DECLARING TOTAL INCOME OF ` 1,02,695 ALONG WITH AGRICULTURAL INCOME OF ` 82,000. AS PER INFORMATION RECEIVED BY THE ASSESSING OFFICER, CASH DEPOSITS OF ` 10,45,500 BEEN MADE IN ASSESSEE'S SAVING BANK ACCOUNT. THE ASSESSING OFFIC ER ISSUED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE, THE ASS ESSEE FILED RETURN OF INCOME ON 22 ND JULY 2010 WHICH IS THE SAME AS FILED ORIGINALLY ON 8 TH JANUARY 2008. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSEE HAS EXPLAINED THE SOURCE OF THESE CASH DEP OSITS STATING IT TO BE OUT OF HIS BUSINESS INCOME, AGRICULTURAL INCOME, AGRICULTURAL / POULTRY INCOME OF HIS WIFE AND FATHER. THE ASSESSIN G OFFICER HAS TREATED AMOUNT OF ` 3,62,000 AS UNEXPLAINED OUT OF THE ABOVE AND HAS ADDED TO ASSESSEES INCOME. THE ASSESSEE BEING AGGR IEVED BY THIS 3 SHRI RAVINDRA MANIKRAO METKAR ORDER OF THE ASSESSING OFFICER, FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED CIT(A) CONFIRMED THE ADDITION MADE BY T HE ASSESSING OFFICER. THE ASSESSEE BEING AGGRIEVED IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, THE LEARNED COUNSEL FOR ASSESSEE SUMMARIZ ED HIS SUBMISSIONS AS UNDER: A) THE ASSESSEE IS FROM AGRICULTURIST FAMILY COMPR ISING OF SELF, WIFE, MOTHER AND FATHER. ALL THE FAMILY MEMBERS ARE ENGAG ED IN ACTIVITY OF AGRICULTURE. ALL THE FAMILY MEMBERS ARE OPERATING O NLY ONE ACCOUNT WHICH IS IN THE NAME OF ASSESSEE. THE DEPOSIT IN BA NK ACCOUNT INCLUDES DEPOSITS OF ALL MEMBERS OF FAMILY OF ASSES SEE. DEPOSIT INCLUDES DEPOSITS OF AGRICULTURAL INCOME OF SELF AN D FAMILY MEMBERS, INCOME FROM POULTRY FARMING OF WIFE AND PROPRIETARY BUSINESS OF TOURS AND TRAVELS OF ASSESSEE. ASSESSEE HAS PRODUCED SALE BILLS OF AGRICULTURAL PRODUCE OF ALL THE FAMILY MEMBERS. THE EXTRACT OF 7/12 OF AGRICULTURAL HOLDING OF MEMBERS OF FAMILY IS GIVEN. (PAGE 5 TO 26). B) ASSESSEE HAS SUBMITTED CONFIRMATION FROM FATHER FOR DEPOSIT OF CASH IN BANK ACCOUNT OF ASSESSEE TO THE TUNE OF RS. 2,44,0007- (PAGE -27) AND CONFIRMATION OF WIFE OF ASSESSEE FOR DEPOS IT OF RS.2,47,000/- OUT OF AGRICULTURAL INCOME AND POULTRY FARM INCOME (PAGE 28). IN BOTH THE CONFIRMATIONS IT HAS BEEN STATED THAT THEY DO N OT HAVE INDEPENDENT BANK ACCOUNT AND DEPOSIT IS MADE IN BAN K ACCOUNT OF ASSESSEE WITH BANK OF INDIA INDICATING BANK ACCOUNT NO.967710100004127. THE CONFIRMATIONS WERE SUPPORTE D BY EXTRACT IN FORM 7/12. THE AFORESAID FACTS ARE UNDISPUTED FA CTS ON RECORD AND CORROBORATED BY LEGAL EVIDENCE ON RECORD. C) THE STATEMENT OF CASH DEPOSITED INTO BANK ACCOUN T ALONGWITH SUPPORTIVE EVIDENCE WAS PLACED BEFORE A.O. (PAGE - 4). THE CORROBORATIVE EVIDENCE SUBMITTED ALONGWITH AFORESAI D STATEMENT IS ALSO OBSERVED IN REMARK COLUMN. THE LEGAL EVIDENCE PLACED ON RECORD HAS NOT FOUND TO BE INCORRECT OR FALSE. THE ENTIRE CASH DEPOSIT IN BANK ACCOUNT STANDS EXPLAINED ON THE BASIS OF EXPLANATIO N ALONGWITH CORROBORATIVE EVIDENCE SUBMITTED IN THE ASSESSMENT PROCEEDINGS. 4 SHRI RAVINDRA MANIKRAO METKAR D) A.O. HAS ACCEPTED THE GROSS RECEIPT FROM TOURS A ND TRAVELS BUSINESS TO THE TUNE OF RS.3,10,0007-. THE AGRICULT URAL RECEIPT OF THE ASSESSEE AT RS. 2,47,9457-CANNOT BE DISPUTED CONSID ERING THE AGRICULTURAL HOLDING OF THE ASSESSEE AND EVIDENCE O F GROSS RECEIPT SUBMITTED BY ASSESSEE. A.O. HAS NOT CONSIDERED CRED IT FOR THE OPENING CASH AVAILABLE WITH THE VARIOUS FAMILY MEMBERS TO E XPLAIN THE DEPOSIT IN BANK ACCOUNT. THE REASONABLE OPENING BALANCE IF CONSIDERED ENTIRE DEPOSIT IN BANK ACCOUNT STANDS EXPLAINED AND NO ADD ITION IS SUSTAINABLE. E) ASSESSEE DERIVES INCOME FROM AGRICULTURE AND TOU RS AND TRAVELS. A.O. HAS NOT DISPUTED THE INCOME FROM TOURS AND TRA VELS AS SHOWN IN THE RETURN OF INCOME. F) ASSESSEE HAS NO FURTHER INDEPENDENT TAXABLE SOUR CE OF INCOME FROM WHICH DEPOSIT IN BANK ACCOUNT CAN BE MADE. ON ABOVE FACTUAL POSITION ADDITION MADE AS ASSESSABLE INCOME IN RESP ECT TO BANK DEPOSIT OF ALL THE FAMILY MEMBERS IS UNJUSTIFIED AN D UNSUSTAINABLE. G) EVIDENCE OF TOTAL LAND HOLDING BY ASSESSEE AND H IS FAMILY MEMBERS AND SALES OF AGRICULTURAL PRODUCE HAVE BEEN PLACED ON RECORD AND HAVE NOT BEEN DISPUTED IN APPELLATE AND ASSESSMENT PROCEEDINGS. H) FACT THAT INCOME OF FAMILY MEMBERS IS BEING DEPO SITED IN ONE BANK ACCOUNT AS FAMILY MEMBERS OF ASSESSEE WERE NOT HAVING INDEPENDENT BANK ACCOUNT HAS ALSO NOT BEEN DISPUTED . ASSESSEE HAS NOT CLAIMED INVESTMENT OUT OF DEPOSITS BELONGING TO ASSESSEE. GROSS RECEIPTS AT RS.3,10,0007- FROM BUSINESS OF TO UR AND TRAVEL HAVE ALSO NOT BEEN DISPUTED IN APPELLATE AND ASSESS MENT PROCEEDINGS. BUSINESS INCOME HAS BEEN ACCEPTED AS D ECLARED IN RETURN OF INCOME. I) NO CREDIT HAS BEEN GIVEN TO THE FACT ASSESSEE CO ULD HAVE REASONABLE SAVINGS OUT OF AGRICULTURAL INCOME AND B USINESS INCOME IN PREVIOUS YEARS. J) PROVISIONS OF SECTION 69 ARE NOT MANDATORY AND A RE DISCRETIONARY. RELIANCE FOR THIS PROPOSITION IS PLACED ON DECISION OF HON'BLE APEX COURT IN THE CASE OF P.K. NOORJAHAN REPORTED AT 237 ITR 570 (SC). 5. PERCONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5 SHRI RAVINDRA MANIKRAO METKAR 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND ON A PE RUSAL OF THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT IN THIS CASE THE ASSESSEE HAS GIVEN DETAIL BASIS OF DEPOSIT OF ` 10,45,500 IN THE BANK ACCOUNT. THE DETAILED SOURCE HAS BEEN CLAIMED TO BE OUT OF THE B USINESS INCOME AS WELL AS AGRICULTURAL INCOME OF THE ASSESSEE AND HIS FAMILY MEMBERS. DEPOSIT TO THE EXTENT OF ` 3,62,000 HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. IN THIS REGARD, THE LEARNED COUN SEL FOR ASSESSEE HAS GIVEN DETAILED SUBMISSIONS AS ABOVE. FURTHERMORE, WE NOTE THAT THE DETAILED SOURCE OF THE CASH DEPOSIT TRANSACTIONWIS E WAS ALSO SUBMITTED WHICH ARE PLACED AT PAGE4 OF THE PAPER B OOK. WE FURTHER FIND THAT THE ABOVE EXPLANATION COGENTLY PROVES THE ENTIRE SOURCE OF DEPOSITS. THE AUTHORITIES BELOW, IN OUR CONSIDERED OPINION, HAVE ERRED IN PARTY ACCEPTING THE SUBMISSIONS OF THE ASSESSEE AND PARTLY REJECTING THE SAME, HENCE, IN VIEW OF THE DETAILED SUBMISSION S, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) BY ALLO WING THE GROUNDS IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.05.2018 SD / RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 10.05.2018 6 SHRI RAVINDRA MANIKRAO METKAR COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. P.S./P.S.) ITAT, NAGPUR