Income Tax Officer, Ward -1, Karwar., Karwar V. Mohandas Rama Naik., Karwar

ITA 379/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88719 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Section: 44AD; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA N OS . 378 & 379 /PNJ/201 4 : (A.Y S - 2009 - 10 & 2010 - 11 ) INCOME TAX OFFICER, WARD - 1, KARWAR ( APPELLANT) VS MOHANDAS RAMA NAIK H.NO. 971, ASHRAM ROAD, KARWAR, UTTAR KANADA DIST. KARNATAKA (RESPONDENT) PAN : AEDPN6895H ASSESSEE BY : SMT. SHEETAL BORKAR, ADV. REVENUE BY : R. DURAI PANDIAN, LD. DR DATE OF HEARING : 22 / 01 /201 5 DATE OF ORDER : 22 / 01 /201 5 O R D E R PER P.K. BANSAL : 1. BOTH THESE APPEALS INVOLVING COMMON ISSUES HAVE BEEN FILED BY THE REVENUE AGAINST THE COMMON ORDER OF CIT( A), MYSORE DT. 17.6.2014 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THE LEARNED CIT(A) ERRED IN LAW AND FACTS IN DELETING THE INCOME OF THE ASSESSEE BROUGHT TO TAX AS THE CREDIT BY CASH IN HIS A/C. OF ICICI BANK AT KARWAR BRANCH FROM UNEXPL AINED INVESTMENT. 2. THE LEARNED CIT(A) ERRED IN ESTIMATING THE INCOME U/S 44AD OF THE IT ACT 1961 FOR AY 2009 - 10. ESTIMATING THE INCOME U/S.44AD TO ANY OTHER BUSINESS 8% OF GROSS RECEIPT IS APPLICABLE ONLY W.E.F 01.04.2011 I.E. FOR AY 2012 - 13 & ONWARDS. BEFORE AMENDMENT TO SECTION 44AD IN THE FINANCE ACT 2010 ONLY BUSINESS FROM CIVIL CONTRACTS OR SUPPLY OF LABOUR FOR CIVIL CONTRACT IS APPLICABLE U/S. 44AD. WHEREAS APPELLANT IS ENGAGED IN REAL ESTATE CONTRACT THE PROVISION OF ESTIMATING OF INCOME U/S 44AD IS NOT APPLICABLE FOR AY 2009 - 10. 2 ITA NOS. 378 & 379/PNJ/2014 (A.Y : 2009 - 10 & 2010 - 11) 2. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW. WE NOTED THAT IN THIS CASE THE AO NOTED THAT THE ASSESSEE HAS DEPOSITED CASH IN HIS BANK ACCOUNT NO. 10630500061 MAINTAINED WITH THE ICICI BANK, KARWAR DURING THE FINANCIAL YEAR PERTAINING TO A.Y 2009 - 10 AND 2010 - 11 AS UNDER : I. ASSESSMENT YEAR 2009 - 2010 : SL. NO. DATE OF DEPOSIT AMOUNT DEPOSITED (RS.) 1 30.3.2009 25,00,000 2 31.3.2009 1,25,000 3 31.3.2009 35,000 4 31.3.2009 5,00 ,000 5 31.3.2009 25,000 TOTAL 31,85,000 II. ASSESSMENT YEAR 2010 - 2011 : SL. NO. DATE OF DEPOSIT AMOUNT DEPOSITED (RS.) 1 30.3.2010 29,500 2 31.3.2010 7,00,000 TOTAL 7,29,500 3. THE ASSESSEE HAS DERIVED THE INCOME AS AN LIC AGENT. THE AO ASKED FOR THE SOURCE OF THE INVESTMENT AND IN THE ABSENCE OF THE SAME, THE AO MADE ADDITION OF RS. 31,85,000/ - IN THE A.Y 2009 - 10 AND RS. 7,29,500/ - IN THE A.Y 2010 - 11. WE NOTED THAT THE MATTER WENT BEFORE CIT(A) AND CIT(A) DIRECTED THE AO TO ESTIMATE THE ASSESSEES INCOME TO BE 8% OF THE TOTAL CASH DEPOSITED IN HIS ICICI BANK ACCOUNT U/S 44AD. IN OUR OPINION, THE PROVISIONS OF SEC. 44AD ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THE ASSESSEE IS NOT ENGAGED IN THE ELIGIBLE BUSINESS AS MENTIONED IN EXPLANATION (B) OF SEC. 44AD. THE ASSESSEE HAS DERIVED THE INCOME, AS RETURNED BY HIM AS PER THE ASSESSMENT ORDER, ONLY AS AN AGENT OF LIC. ONCE THE ASSESSEE HAS DEPOSITED THE CASH IN HIS BANK ACCOUNT, THE ONUS IS ON THE ASSESSEE TO PROVE THE SOURCE FROM WHERE THE AMOUNT HAS BEEN DEPOSITED IN HIS BANK ACCOUNT. THE ASSESSEE MIGHT HAVE ALSO WITHDRAWN THE AMOUNT FROM THE SAID BANK ACCOUNT DURING BOTH THE ASSESSMENT 3 ITA NOS. 378 & 379/PNJ/2014 (A.Y : 2009 - 10 & 2010 - 11) YEARS. WE, THEREFORE, IN THE INTEREST OF JU STICE AND FAIR PLAY TO BOTH THE PARTIES, SET ASIDE THE ORDER OF CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION THAT THE AO SHALL WORK OUT THE PEAK DEPOSIT AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE AND TO THE EXTENT THE AO FINDS THE PEAK DEPOSIT, THE ADDITION IS SUSTAINED. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE STAND ALLOWED FOR STATISTICAL PURPOSE. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2/01/2015 . S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 2 2 /01/ 201 5 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ,