The ITO, Ward-7(4), Ahmedabad V. Shri Yatin C. Davda, Ahmedabad

ITA 4074/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57064 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 18-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , . .!'#$, % & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.4074/AHD/2008 ( ( ) ( ) ( ) ( ) / / / / ASSESSMENT YEAR : 2005-06) THE ITO WARD-7(4) AHMEDABAD ( ( ( ( / VS. SHRI YATIN C.DAVDA PROP. ALPS INDUSTRIES 17, MANDAR BUNGALOWS NR.SURDHASA CIRCLE, THALTEJ AHMEDABAD * % ./+, ./ PAN/GIR NO. : AATPD 6249 B ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI SAMIR TEKRIWAL, SR. D.R. ./*- 1 0 / RESPONDENT BY : SHRI M.K. PATEL, ADV. (2 1 3% / / / / DATE OF HEARING : 31.1.2012 4') 1 3% / DATE OF PRONOUNCEMENT : 31.1.2012 5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XI, AHMEDABAD DATED 13/10/2008 PASSED FOR A.Y. 2005-06 AND THE GROUNDS RAISED ARE AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHMEDA BAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.5,00,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT . ITA NO.4074/AHD /2008 ITO VS. SHRI YATIN C.DAVDA ASST.YEAR 2005-06 - 2 - 2. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHMEDA BAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.2,36,044/- ON ACCOUNT OF TREATING THE AGRICULTUR AL INCOME AS INCOME FROM OTHER SOURCES. 3. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHMEDA BAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.11,61,311/- ON ACCOUNT OF UNEXPLAINED CASH DEPOS ITED IN THE BANK ACCOUNT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHMEDABAD OUGH T TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CO MMISSIONER OF INCOME TAX (A) XI, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. AT THE OUTSET, LD.SR.DR MR.SAMIR TEKRIWAL HAS ST RONGLY OBJECTED THE MANNER IN WHICH THE LD.CIT(A) HAS DECIDED ALL T HE GROUNDS WITHOUT PROVIDING AN OPPORTUNITY TO EXAMINE CERTAIN EVIDENC ES TO THE AO. AS PER THE ASSESSMENT ORDER PASSED U/S.143(3) DATED 31 .12.07 OF THE ACT IN RESPECT OF GROUND NO.1, THE OBSERVATION OF THE AO W AS AS UNDER:- 5.3. MOREOVER DURING THE COURSE OF VERIFICATIONS O F UNSECURED LOANS THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF CONTRA ACCOUNTS, CONFIRMATION LETTERS AND IDENTITY OF THE DEPOSITORS . HOWEVER THE ASSESSEE IS NOT ABLE TO FURNISH CONTRA ACCOUNT OF T HE NEW DEPOSITOR SHRI V.K. JALA (HUF) WHO HAS DEPOSITED RS.5,00,000/- ON DATE 09-04-04. HE IS ALSO NOT ABLE TO FURNISH CONFIRMATION LETTER, ID ENTITY OF THE DEPOSITOR OR TO PRODUCE THE DEPOSITOR PARTY FOR CROSS VERIFIC ATION. IN SPITE THE REPEATED INSTRUCTIONS AND FAIOURE TO PRODUCE THE DE POSITOR OR ANY EVIDENCES THE DEPOSIT AMOUNTING RS.5,00,000/- IS NO T EXPLAINED AND ITA NO.4074/AHD /2008 ITO VS. SHRI YATIN C.DAVDA ASST.YEAR 2005-06 - 3 - DOES NOT ESTABLISHED AS GENUINE DEPOSIT. THE SAME IS ADDED TO THE TOTAL INCOME. 2.1. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST A PPELLATE AUTHORITY, VIDE PARA 5.1, LD.CIT(A) HAS ENTERTAINED CERTAIN EV IDENCES AND DELETED THE ADDITION. APPARENTLY, THERE WAS A INFRINGEMENT OF RULE 46A OF IT RULES, 1962. 3. THIS RULE PRESCRIBES THAT IN GENERAL AN APPELLAN T IS NOT ENTITLED TO PRODUCE ANY FRESH EVIDENCE BEFORE THE FIRST APPELLA TE AUTHORITY OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF T HE ASSESSMENT PROCEEDINGS BEFORE THE A.O. HOWEVER, THE EXCEPTION IS THAT WHERE THE AO HAD REFUSED TO ADMIT EVIDENCE, OR THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE, THEN LD.CIT(A) IS EMPOWERED TO EN TERTAIN THOSE EVIDENCES. STILL VIDE SUB-RULE(2) OF RULE 46A OF I T RULES, A CONDITION IS PRESCRIBED THAT NO SUCH EVIDENCE SHALL BE ADMITTED UNLESS CIT(A) RECORDS IN WRITING THE REASON FOR ITS ADMISSION. FURTHER, VIDE SUB-RULE(3) IT IS PRESCRIBED THAT CIT(A) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE UNLESS THE AO HAS BEEN ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE OR TO CROSS-EXAMINE THE WITNESS. WE THERE FORE HOLD THAT THOSE CONFIRMATIONS AND OTHER EVIDENCES WHICH WERE NOT FU RNISHED BEFORE THE AO BUT THOSE WERE FURNISHED AND ENTERTAINED BY LD.C IT(A) SHOULD BE EXAMINED BY THE AO BY CALLING A REMAND REPORT AND T HEREAFTER SHOULD DECIDE AFRESH AS PER LAW. THIS GROUND OF THE REVEN UE IS, THEREFORE, TREATED AS ALLOWED ONLY FOR STATISTICAL PURPOSES. ITA NO.4074/AHD /2008 ITO VS. SHRI YATIN C.DAVDA ASST.YEAR 2005-06 - 4 - 4. APROPOS TO GROUND NO.2, VIDE PARA-7 CERTAIN ENQU IRIES WERE RAISED BY THE AO WHICH WERE NOT COMPLIED WITH AS IS EVIDEN T VIDE PARA-7; REPRODUCED BELOW:- 7. THE ASSESSEE HAS DECLARED AGRICULTURE INCOME OF RS.263044/-. HE WAS ASKED TO FILE DETAILS OF AGRICULTURE RIGHTS AND SALES BILLS OF AGRICULTURE PRODUCE ALONG WITH THE CLAIMS OF EXPENS ES. HE HAS FILED A COPY OF FORM NO.7/12 RECEIVED FROM TALUKA MAMLADAR OF BAVLA MENTIONING A LAND AT GANGAD VILLAGE PERTAINING TO A CCOUNT NO.509 BUT IT DOES NOT CERTIFY AND AGRICULTURAL ACTIVITY OR AN Y AGRICULTURE PRODUCED IN THE RELEVANT COLUMNS DURING THE FINANCIAL YEAR 2 004-05. THE ANOTHER FORM NO.7/12 MENTIONING THE ACCOUNT NO.569 JOINTLY WITH A/C NO.509 ALSO NOT CONTAINING ANY SUCH ANY AGRICULTURA L ACTIVITY AND ANY PRODUCE DURING THE FINANCIAL YEAR 2004-05. HENCE N O AGRICULTURAL INCOME IS PROVED. HENCE THERE IS NO AGRICULTURAL I NCOME DURING THE FINANCIAL YEAR 2004-05. IN THIS CIRCUMSTANCES THE AGRICULTURAL INCOME DECLARED AS TREATED AS INCOME FROM OTHER SOURCES NO T DECLARED IN RETURN OF INCOME. THE SAME ARE CHARGEABLE TO TAX AND AN A MOUNT OF RS.2,36,044/- IS ADDED TO THE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND INCLUDED IN THE TOTAL INCOME. 5. WHEN THE MATTER WAS CARRIED BEFORE THE CIT(A), T HE LD.CIT(A) HAS NOT DISCUSSED THE AREA OF AGRICULTURAL LAND AND THE DETAILS OF THE AGRICULTURAL PRODUCE, ETC. SO AS TO ARRIVE AT THE C ORRECT NET AGRICULTURAL INCOME EARNED BY THE ASSESSEE FOR THE YEAR UNDER CO NSIDERATION. WHILE DISPOSING THIS GROUND AS WELL THERE WAS INFRINGEMEN T OF RULE 46A OF IT RULES, THEREFORE THIS GROUND OF THE REVENUE IS ALSO RESTORED BACK FOR ITA NO.4074/AHD /2008 ITO VS. SHRI YATIN C.DAVDA ASST.YEAR 2005-06 - 5 - AFRESH ADJUDICATION BY CIT(A) WITH THE DIRECTION TO CONFRONT ALL THOSE EVIDENCES TO THE AO. THIS GROUND MAY ALSO BE TREAT ED AS ALLOWED BUT FOR STATISTICAL PURPOSES. 6. APROPOS TO GROUND NO.3, IT WAS OBSERVED BY THE AO THAT THE SEVERAL CREDITS IN UCO BANK WERE MADE IN CASH AND I N SPITE OF PROVIDING OPPORTUNITIES THE SOURCE OF DEPOSIT WAS NOT EXPLAIN ED. HOWEVER, LD.CIT(A) HAS HELD THAT THOSE WERE SALE PROCEEDS FR OM ALPS INDUSTRIES. IT IS NOT CLEAR THAT WHAT WAS THE AMOUNTS OF SALES DUR ING THAT PERIOD AND WHETHER THOSE WERE CASH SALES OR CREDIT SALES. IN ANY CASE, LD.CIT(A) HAS ENTERTAINED NEW EVIDENCES WITHOUT CONFRONTING THEM TO THE AO. FOR THIS GROUND AS WELL THERE WAS INFRINGEMENT OF RULE 46A O F IT RULES. WE THEREFORE RESTORE THIS GROUND BACK TO THE LD.CIT(A) TO DECIDE DE NOVO AS PER LAW AFTER PROVIDING SUFFICIENT OPPORTUNITY TO T HE AO. AT THIS JUNCTURE, LD.AR MR. M.K.PATEL HAS INFORMED THAT A F IGURE OF RS.5 LACS DATED 09/04/2004 CREDITED IN UCO BANK WAS IN FACT T HE AMOUNT OF DEPOSIT THROUGH CHEQUE RECEIVED FROM SHRI V.K. JALA (HUF). HE HAS THEREFORE STATED THAT IT WAS A DOUBLE ADDITION BECA USE THROUGH GROUND NO.1 THE REVENUE HAS CHALLENGED THIS VERY ADDITION. CONSIDERING THE SUBMISSION OF LD.AR, WE HEREBY DIRECT THAT IF THIS AMOUNT REPRESENTS THE AMOUNT RECEIVED FROM THE SAID CASH CREDITOR, THEN N ATURALLY THE ASSESSEE SHALL BE ENTITLED FOR THE CONSEQUENTIAL RELIEF SO A S TO TAX THE IMPUGNED AMOUNT ONLY ONCE IN THE HANDS OF THE ASSESSEE. WIT H THESE REMARKS, THIS GROUND AS WELL IS RESTORED TO THE FILE OF LD.CIT(A) FOR AFRESH ADJUDICATION, NEEDLESS TO SAY, AFTER PROVIDING A REASONABLE OPPOR TUNITY OF HEARING TO ITA NO.4074/AHD /2008 ITO VS. SHRI YATIN C.DAVDA ASST.YEAR 2005-06 - 6 - BOTH THE SIDES. THIS GROUND MAY BE TREATED AS ALLO WED BUT FOR STATISTICAL PURPOSES. 7. IN THE RESULT, REVENUES APPEAL IS ALLOWED BUT F OR STATISTICAL PURPOSES. SD/- SD/- ( . .!'#$ ) ( ) % ( A.K. GARODIA ) ( M UKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31 / 1 /2012 63..(, .(../ T.C. NAIR, SR. PS 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-XI, AHMEDABAD 5. 7 >> >/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..31.1.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31.1.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 31.1.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.1.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER