The Income Tax Officer, Ward-3(1) (4), Amreli V. Shri Dineshbhai Madhubhai Kabariya, Amreli

ITA 411/RJT/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6488 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 04-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: DM RINDANI
• Keywords: Business income; Corroborative evidences; Set aside
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AH MEDABAD] (BEFORE SHRI P. K. KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 411/RJT/2017 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER, WARD- 3(1)(4), AMRELI V/S SHRI DINESHBHAI MADHUBHAI KABARIYA, PROP. OF KHODIYAR SALES, MOHAN NAGAR, LATHI ROAD, AMRELI-365601 (APPELLANT) (RESPONDENT) PAN: AIDPK3690H APPELLANT BY : SHRI C. S. ANJARIA, SR. D .R. RESPONDENT BY : SHRI D.M. RINDANI, A.R. ( )/ ORDER DATE OF HEARING : 08 -05-201 8 DATE OF PRONOUNCEMENT : 14 -05-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-3, AHMEDABAD DATED 01.09.2017 PERTAINING TO A.Y. 2011- 12 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 411/ RJT/2017 . A.Y. 2011-1 2 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION AT RS.22,82,522/- BEING ADOPTED AS PEAK QUANTUM AGAINST THE ADDITION MADE OF RS.64,27,000/- . 2. ON THE FACTS OF THE CASE AND IN LAW, THE LD. C.I.T. (A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER OF THE A.O. 3. ANY OTHER GROUND THAT THE REVENUE MAY TAKE DURING T HE COURSE OF HEARING PROCEEDINGS. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C.I. T.(A) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FIL ED HIS RETURN OF INCOME ON 28.09.2011 DECLARING TOTAL OF FTS.4, 37,910/-VIDE A CKNOWLEDGMENT NO. 294582761280911. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. ACCORDINGLY, FIRST STATUTORY NOTICE U/S. 143( 2) OF INCOME TAX ACT, 1961 WAS ISSUED ON 16.08.2012 WHICH WAS SERVED UPON THE ASSESSEE ON 27.08.2012. THEREAFTER, NOTICE U/S. 142(1) OF THE INCOME TAX AC T, 1961 ALONG WITH DETAILED QUESTIONNAIRE WAS ISSUED ON 16.07.2013 WHICH WAS DU LY SERVED UPON THE ASSESSEE BY RPAD. IN RESPONSE THERETO, SHRI H.P. THAKER, ITP ON BEHAL F OF THE ASSESSEE FROM TIME TO TIME AND FURNISHED VARIOUS DETAILS CALLED FOR DU RING THE COURSE OF THE PROCEEDINGS WHICH ARE PLACED ON RECORD. THE CASE IS DISCUSSED WITH HIM. 3. THE ASSESSEE HAS DECLARED INCOME FROM TRADING OF CE MENT, OIL, AND GREASE ETC. WHICH IS VERIFIED WITH THE RELEVANT EVIDENCES PRODU CED DURING THE COURSE OF THE PROCEEDINGS. ITA NO. 411/ RJT/2017 . A.Y. 2011-1 2 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VER IFICATION OF ITS DETAILS, IT IS SEEN THAT AS PER THE AIR INFORMATION, IT IS SEEN THAT THE ASSESSEE HAS MADE THE CASH DEPOSITION OF RS.62,27,000/- IN KOTAK MAHIDNRA BANK LTD; AMRELI BRANCH. ON VERIFICATION OF BANK STATEMENT OF KOTAK MAHINDRA BANK LTD. IT IS SEEN THAT THE ASSESSEE MADE THE FOLLOWING DEPOSITIO NS IN BANK ACCOUNT WITH KOTAK MAHINDRA BANK LTD. AMRELI BRANCH: SR. N O. DATE AMOUNT NATURE OF DEPOSITION 1 . 16.04.2010 2,10,000/ - CASH 2. 20.04.2010 98.000/ - - DO - 3 . 21.04.2010 2,01,000/ - - DO - 4. 11.05.2010 500,000/ - - DO - 5. 11.05.2010 60,000/ - - DO - 6. 13.05.2010 1,00,000/ - - DO - 7. 22.05.2010 2,00,000/ - - DO - 8. 11.06.2010 5, 50,000/ - - DO - 9. 17.06.2010 3,96, 500/ - - DO - 10. 19.06.20 10 2,00,000/ - - DO - 11. 28.06.2010 3,00,000/ - - DO - 12. 08.07.2010 5,00,000/ - - DO - 13. 09.08.2010 2,28,500/ - - DO - 14. 03.09.2010 3,00,000/ - - DO - 15. 06.09.2010 2,00,000 / - TRF. FROM KARUBEN 16. 14.10.2010 5,10,000/ - CASH 17. 06.01.2011 4,00,000/ - - DO - ITA NO. 411/ RJT/2017 . A.Y. 2011-1 2 4 18. 01.02.2011 6,50,000/ - - DO - 19. 15.03.2011 91,000/ - - DO - 20. 17.03.2011 1,50,000 / - - DO 21. 23.03.2011 5,82,000 / - - DO - TOTAL 64,27,000/ - HOWEVER, ON VERIFICATION OF AUDITED BOOKS OF ACCOUN T'S OF THE ASSESSEE, IT IS SEEN THAT THE ABOVE SAID ACCOUNT IS NOT DISCLOSED I N HIS BOOKS OF ACCOUNTS. HENCE, THE ASSESSEE WAS GIVEN THE OPPORTUNITY BY IS SUING THE NOTICE DTD. 04.02.2014 U/S. 142(1) OF THE ACT TO STATE AS TO WH ETHER THE SAID DEPOSITIONS WERE MADE OUT OF HIS BUSINESS RECEIPTS OR NOT ON OR BEFORE 10.02.2014 AT 10:30 AM. CLEARLY STATING THAT IF HE WAS TO STATE THAT SU CH DEPOSITIONS ARE FROM BUSINESS RECEIPTS, THEN HE WAS ALSO REQUIRED TO FUR NISH THE COMPLETE SUPPORTING EVIDENCES AS WELL AS BOOKS OF ACCOUNTS TO PROVE THE SOURCE OF DEPOSITION AND IF HE FAILS TO DO SO, THE ENTIRE DEPOSITION WILL BE TR EATED AS UNEXPLAINED AND NON- BUSINESS RECEIPTS AND WILL BE ADDED TO HIS TOTAL IN COME. HOWEVER, THE ASSESSEE HAS NEITHER FURNISHED ANY DET AIL NOR FILED ANY WRITTEN SUBMISSION TILL DATE. HENCE, IT CAN BE INFERRED THA T THE ASSESSEE HAS NOTHING TO SAY IN THIS REGARD. CONSIDERING THE ABOVE NARRATED FACTS THAT THE ASSES SEE HAS NOT COMPLIED WITH THE ABOVE STATED NOTICE TILL DATE, IT CAN BE DEDUCE D THAT THE ASSESSEE HAS NOTHING TO SAY IN THIS REGARD AND HAS NO EVIDENCES TO STATE THAT SUCH DEPOSITIONS ARE FROM THE BUSINESS RECEIPTS. THEREFORE, THE SAID DEP OSITS CANNOT BE TREATED AS THE BUSINESS RECEIPTS/TURNOVER AS THERE IS NO REPLY AS WELL AS SUPPORTING EVIDENCES ITA NO. 411/ RJT/2017 . A.Y. 2011-1 2 5 ON THE SIDE OF THE ASSESSEE. FURTHER, THE SAID BANK ACCOUNT OF KOTAK MAHINDRA BANK LTD. IS NOT SHOWN BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS; THEREFORE, THERE IS NO SUFFICIENT GROUND TO BELIEVE THAT THE S AID DEPOSITIONS ARE FROM THE BUSINESS RECEIPTS. THERE MIGHT BE ANOTHER SOURCE FR OM WHICH SUCH CASH IS GENERATED BY THE ASSESSEE FOR SUCH DEPOSITION. AS T HE DEPOSITIONS ARE NOT BUSINESS RECEIPTS, THE ENTIRE AMOUNT NEEDS TO BE TR EATED AS INCOME AND NOT AS THE TURNOVER. THE ADDITION OF RS. 64,27,000/- BEING UNEXPLAINED DEPOSITION IN KOTAK MAHINDRA BANK LTD; AMRELI BRANCH, U/S. 69A IS MADE TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE APPELLA NT. 5. AS WE CAN SEE, THE APPELLANT IS MAINTAINING BANK AC COUNT WITH KOTAK MAHINDRA BANK, THERE IS NO DISPUTE REGARDING AFFAIRS OF THIS BANK ACCOUNT NOT BEING DISCLOSED AND APPELLANT HAS MADE SEVERAL WITHDRAWAL AND DEPOSITS HAS CONTAINED IN FACTS OF THE CASE ON THE BASIS OF THE BANK STATEMENT FILED BY THE APPELLANT. ASSESSEE CLAIMED PEAK CASH BALANCE. WHER E A SINGLE CREDIT OR NUMBER OF CREDITS APPEAR IN BOOKS IN ACCOUNT OF ANY PARTIC ULAR PERSON SIDE BY SIDE WITH NUMBER OF DEBITS WAS THAT THEY SHOULD ALL BE ARRANG ED IN SERIAL ORDER, THAT CREDIT FOLLOWING DEBIT ENTRY SHOULD BE TREATED AS REFERABL E TO LATTER TO EXTENT POSSIBLE AND THAT, NOT AGGREGATE AND IN THAT CASE PEAK OF CR EDIT SHOULD BE TREATED AS OWN EXPLAINED. 6. IN OUR CONSIDERED OPINION, THE LD. A.R. HAS PASSED DETAILED AND REASONED ORDER FOLLOWING JUDGMENT OF ALLAHABAD HIGH COURT 376 ITR 0534 AS WELL AS ORDER PASSED BY THE CO-ORDINATE BENCH IN THE MATTER OF IT O VS. MAHESHKUMAR ITA NO. 411/ RJT/2017 . A.Y. 2011-1 2 6 JAYANTILAL VORA (2004) 23 CCH 0083 RAJKOT TRIBUNAL. IN VIEW OF THE ABOVE DISCUSSION, WE ARE NOT INCLILNE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A). THEREFORE, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 14 - 05- 2018 SD/- SD/- (P. K. KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER RAJKOT: DATED 14 /05/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,RAJK OT