Smt Amita Puri, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 392/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8768 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 11-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: J S BHASIN
• Keywords: Business income; Opportunity of being heard; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NOS.392 & 393 (ASR)/2016 ASSESSMENT YEARS: 2009-10 & 2010-11 SMT. AMITA PURI, JALANDHAR. PAN: AIGPP-3150N VS. ITO, WARD 1(1), JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN (ADV.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR.) DATE OF HEARING: 20.01.2017 DATE OF PRONOUNCEMENT: 21.02.20 17 ORDER PER T. S. KAPOOR (AM): THESE ARE TWO APPEALS FILED BY ASSESSEE AGAINST THE CONSOLIDATED ORDER OF LD. CIT(A), JALANDHAR, DATED 24.05.2016, F OR ASST. YEAR:2009-10 & 2010-11. 2. IN ASST. YEAR: 2009-10, THE ASSESSEE VIDE GROUND NOS.1 TO 3 HAS TAKEN LEGAL GROUNDS, WHEREAS, GROUND NOS. 4 TO 6 RE LATES TO THE MERITS OF THE CASE. 3. IN ASST. YEAR: 2010-11, THE ASSESSEE HAS NOT TAK EN ANY LEGAL GROUND AND HAS TAKEN THE GROUNDS ONLY ON MERITS. ITA NO.39 2 & 393(ASR)/2016 ASST. YEARS: 2009-10 & 2010-11 2 4. AT THE OUTSET, THE LD. AR SUBMITTED THAT HE WILL NOT BE PRESSING GROUND NOS.1 TO 3 IN ASST. YEAR 2009-10, WHICH RELA TED TO THE LEGAL ISSUES AND ON MERITS OF THE CASE, THE LD. AR SUBMIT TED THAT DURING THE ASSESSMENT PROCEEDINGS IN ASST. YEAR 2009-10 THE AS SESSEE HAD DEPOSITED AN AMOUNT OF RS.18,27,220/- IN HER ACCOUN T WITH ICICI BANK WHICH THE LD. AO TREATED AS UNEXPLAINED AND AFTER W ORKING OUT THE PEAK AMOUNT MADE ADDITION OF RS.6,87,553/- AS PEAK CREDI T. IT WAS SUBMITTED THAT ASSESSING OFFICER FURTHER MADE AN ADDITION OF RS.29,023/- AS 5% PROFIT ON THE DEPOSITS MADE AFTER 24.11.2008. THE L D. AR SUBMITTED THAT THE ASSESSEE HAD CLAIMED BEFORE LD. CIT(A) THAT SHE WAS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF PIPES AND THE DEPO SITS AND WITHDRAWALS IN THE BANK ACCOUNT REPRESENTED SALE AND PURCHASES AND EXPENSES RELATED TO HER BUSINESS OF PIPES AND THEREFORE, IT WAS SUBMITTED THAT THE SAME MAY BE TREATED AS TURN OVER OF THE ASSESSEE AN D OFFERED NET PROFIT @ 5% ON SUCH TURN OVER AS PER THE PROVISIONS OF SEC.4 4AF. THE LD. AR FURTHER SUBMITTED THAT INSTEAD OF ACCEPTING THE FAC TS OF ASSESSEE, THE LD. CIT(A) UPHELD THE ADDITION MADE BY ASSESSING OFFICE R AS PEAK CREDIT, HOWEVER, HE ALLOWED AN AMOUNT OF RS.1,69,133/- WHIC H WAS OUTSTANDING AS OPENING BALANCE IN THE BANK ACCOUNT. IT WAS FURT HER SUBMITTED THAT LD. CIT(A) HAD FURTHER DELETED THE ADDITION OF RS.2 ,90,23/- WHICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF ASSUMING 5 % PROFITS ON DEPOSITS MADE AFTER 28.11.2004. ITA NO.39 2 & 393(ASR)/2016 ASST. YEARS: 2009-10 & 2010-11 3 5. REGARDING ASST. YEAR 2010-11, THE LD. AR SUBMITT ED THAT LD. CIT(A) HAD HIMSELF ACCEPTED THAT THE DEPOSITS IN TH E SAME BANK ACCOUNT HAS BEEN DECLARED BUSINESS PROFIT AFTER APPLYING NE T PROFIT OF 5% BUT HE DID NOT ACCEPT THE CONTENTIONS THAT ENTIRE DEPOSITS REPRESENTED THE TURN OVER OF THE ASSESSEE. THEREFORE, IT WAS ARGUED THAT THE DEPOSITS IN THE BANK ACCOUNT BE TREATED AS TURN OVER OF THE ASSESSE E WHICH WAS NOT DISCLOSED TO REVENUE AUTHORITIES. 6. THE LD. DR, ON THE OTHER HAND, HEAVILY PLACED HI S RELIANCE ON THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN ASST. YE AR: 2009-10, THE LD. CIT(A) UPHELD THE ADDITION MADE BY ASSESSING OFFICE R AFTER GIVING RELIEF IN RESPECT OF OPENING BALANCE IN HER BANK ACCOUNT. FURTHER IN ASST. YEAR 2010-11, THE LD. CIT(A) THOUG H ACCEPTED THAT THE DEPOSITS IN THE BANK ACCOUNT REPRESENTED THE R ECEIPTS FROM THE BUSINESS BUT HE DID NOT ACCEPT THE ENTIRE DEPOSITS AS TURNOVER OF THE ASSESSEE. THE ASSESSING OFFICER WHILE MAKING THE AD DITION IN ASST. YEAR: 2010-11 AS PEAK CREDIT HAS NOTED DOWN THE FOLLOWING SUBMISSIONS MADE BY ASSESSEE. (B) THAT THE AGGREGATE OF CREDITS, NET OF INTEREST OF RS.7,311/- IN TWO ACCOUNTS, I.E. RS.56,88,686/- WOULD THUS BE THE TOT AL TURNOVER OF THE ASSESSEE, AGAINST WHICH, THE SALE IN THE RETURN FIL ED BY THE ASSESSEE, WAS DECLARED AT RS.26,28,213/-. THUS, THE DIFFERENCE OF RS.30,60,473/- WOULD BE THE ADDITIONAL TURNOVER OF THE ASSESSEE. NOW WIT H THE TOTAL TURNOVER OF RS.56,88,686/- FROM THE TRADING OF PIPE FITTING IN HAND, THE ELEMENT OF PROFIT EMBEDDED THEREIN NEEDS TO THE REASONABLE WOR KED OUT. IN THE RETURN ITA NO.39 2 & 393(ASR)/2016 ASST. YEARS: 2009-10 & 2010-11 4 FILED, ON SALE OF RS.26,28,113/-, THE PROFIT DECLAR ED IS RS.1,31,843/-, WHICH COMES TO 5.01% OF THE SALES. IN THE GIVEN SIT UATION, SANS PROPER ACCOUNTS, THE NET PROFIT ON TOTAL TURNOVER COMES TO RS.2,85,004/-. REDUCED BY NET PROFIT OF RS.1,31,843/- SINCE DECLARED, THE ADDITIONAL NET PROFIT OF RS.1,53,161/- IS LIABLE TO TAX. ALSO THE INTEREST O F RS.7,311/- CREDITED IN TWO ACCOUNTS, IS LIABLE TO TAX. THUS THE TOTAL ADDI TIONAL INCOME, ON REVISITING THE ENTIRE WORKING, COMES TO RS.1,60,472 /-, WHICH THE ASSESSEE HEREBY OFFERS TO TAX. FROM THE ABOVE SUBMISSIONS MADE BY ASSESSING OFFIC ER, WE FIND THAT ASSESSEE HAD CLAIMED DEPOSITS IN THE BANK ACCO UNT AS BUSINESS TURNOVER ON WHICH TAX WAS OFFERED AS PER THE PROVIS IONS OF SEC.44AF. THIS FACT HAS ALSO BEEN NOTED BY LD. CIT(A) IN HIS ORDER AT PAGE NO.21 VIDE PARA -19 WHICH FOR THE SAKE OF COMPLETENESS IS REP RODUCED BELOW. 19. IN AY 10-11, THE ASSESSEE HERSELF HAS DECLARE D A BUSINESS PROFIT OF RS.1,38,848/- AND THIS AMOUNT IS REDUCED AS BEING A VAILABLE WITH ASSESSEE BY THE AO FROM PEAK CREDIT WORKED OUT WHIC H IS RIGHTLY DONE SO. IT CANT BE SAID THAT BY GIVING CREDIT TO THIS AMOU NT, THE AO HAS ACCEPTED THAT THE ASSESSEES CREDITS IN THE BANK ACCOUNT REP RESENTED BUSINESS INCOME. GROUND NO.1 & 3 ARE THUS DISMISSED. BOTH AUTHORITIES HAS NOTED THAT IN ASST. YEAR: 2010-11, THE ASSESSEE HAD DECLARED BUSINESS INCOME TO THE TUNE O F RS.13,1,843/- FROM BUSINESS OF PIPES. HOWEVER, FROM THE COPY OF C OMPUTATION OF INCOME OF ASSESSEE FOR ASST. YEAR: 2010-11, PLACED AT (PB- 2), WE FIND THAT ASSESSEE HAD NOT DECLARED BUSINESS INCOME AS NOTED DOWN BY THE AUTHORITIES AND THE ANY BUSINESS INCOME DECLARED BY ASSESSEE WAS RS.35,000/- FROM TUITION INCOME. FOR THE SAKE OF COMPLETENESS, WE HAVE MADE THE COPY OF COMPUTATION SHEET PLACED IN PAPER BOOK PAGE-2 AS PART OF THE ORDER. ITA NO.39 2 & 393(ASR)/2016 ASST. YEARS: 2009-10 & 2010-11 5 ITA NO.39 2 & 393(ASR)/2016 ASST. YEARS: 2009-10 & 2010-11 6 FROM THE ABOVE, WE FIND THAT THERE ARE CONTRADICTIO NS BETWEEN THE FACTS AS PER COMPUTATION SHEET & AS PER FACTS NOTED BY AUTHORITIES. THEREFORE, WE DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE BACK TO THE OFFICE OF ASSESSING OFFICER, WHO SHOULD DECIDE AFRE SH. KEEPING IN VIEW OF THESE FACTS, THE ASSESSING OFFICER WOULD ENQUIRE AB OUT THE FACTS AS NOTED BY THE AUTHORITIES IN ASST. YEAR: 2010-11 FROM THE INCOME TAX RETURN OF THE ASSESSEE. THE ASSESSING OFFICER SHOULD ALSO REE XAMINE THE CLAIM OF THE ASSESSEE THAT DEPOSITS AND WITHDRAWALS REPRESEN TED SALES AND PURCHASES. THE ASSESSEE WILL BE AT LIBERTY TO FILE ANY EVIDEN CE TO DEMONSTRATE THAT THE TRANSACTIONS WERE ON ACCOUNT OF SALE AND P URCHASES. NEEDLESS TO SAY THAT THE ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.02. 2017. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOU NTANT MEMBER DATED:21.02.2017. /PK/ PS. ITA NO.39 2 & 393(ASR)/2016 ASST. YEARS: 2009-10 & 2010-11 7 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER