AURAG VYAS, Ajmer V. ITO, Kishangarh

ITA 419/JPR/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4897 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: G C JAIN
• Keywords: Unexplained investment; Business income

Judgement Text

1 ITA 419-09 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : JAIPUR. BEFORE SHRI B.R. JAIN AND SHRI KUL BHARAT ITA NO. 419/JP/20109 ASSESSMENT YEAR : 2005-06. SHRI ANURAG VYAS, VS. THE INCOME-TAX OFFICER, C/O AJAY SOMANI & CO., KISHANGARH. 28, ASHOK MARG, ANA SAGAR LINK ROAD, AJMER. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GC JAIN RESPONDENT BY : SHRI DC SHARMA DATE OF HEARING : 22.08.2013. DATE OF PRONOUNCEMENT : 22.08.2013. ORDER PER B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 16 .03.2009 OF LD. CIT (A), AJMER RAISES THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT (A), AJMER HAS ERRED IN CONFIRM ING HUGE ADDITIONS OF RS. 31,74,500/- (UNDER SECTION 69A). T HE ADDITIONS ARE BAD IN LAW AND THE FACTS OF THE CASE AND NEED TO BE DELETED. 2. THAT THE SECTION OF CASE UNDER SECTION 143(2) IS NOT IN ACCORDANCE WITH CBDT INSTRUCTION; SHOULD BE CONSTRUED AS VOID AB-INITIO. FURTHER, THE MATTER OF ASSESSMENT/VERIFICATION IS A GAINST THE CLEAR DIRECTION OF DEPARTMENT REGARDING THE TREATMENT OF A.I.R. INFORMATION. 2 2. BRIEFLY THE FACTS ARE THAT THE APPELLANT RETURNE D INCOME OF RS. 1,26,850/- FROM THE COMMISSION BUSINESS OF SUPPLY OF MARBLES. THE APPE LLANT HAS ALSO ATTACHED STATEMENT OF INCOME, BALANCE SHEET AND PROFIT & LOSS ACCOUNT WIT H THE RETURN OF INCOME FILED BY IT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER CALLED FOR THE BOOKS OF ACCOUNT, WHICH WERE PRODUCED AND DULY EXAMINED B Y HIM. THE ASSESSING OFFICER ON PERUSAL OF ASSESSEES SAVINGS BANK ACCOUNT NO. 0551 04000032522 IN IDBI DURING THE FINANCIAL YEAR 2004-05, FOUND THAT THE ASSESSEE HAS MADE CASH DEPOSITS IN THE ACCOUNT AGGREGATING TO RS. 33,63,539/-. WHEN THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF DEPOSIT, ASSESSEE GAVE EXPLANATION THAT THESE ARE T HE DEPOSITS MADE BY HIS OUT STATION CLIENTS FOR MAKING ONWARD PAYMENTS TO THE SUPPLIERS OF MARBLES FOR THE PURCHASES MADE THROUGH HIM. THE ASSESSING OFFICER BEING NOT SATI SFIED WITH THE EXPLANATION PROCEEDED TO MAKE ADDITION OF RS. 31,74,500/- ON ACCOUNT OF C ASH DEPOSITS IN THE SAID ACCOUNT. THE LD. CIT (A) CONFIRMED THE ADDITION. 3. THE LD. COUNSEL FOR THE ASSESSEE ASSAILING THE I MPUGNED ORDER CONTENDS THAT THE ASSESSING AUTHORITY HAS ACCEPTED THE EARNING OF INC OME FROM COMMISSION ON SUPPLY OF MARBLE THROUGH HIM TO THE OUT STATION PARTIES LOCAT ED AT DIFFERENT PLACES FROM WHOM THE CASH DEPOSITED BY THEM IN ASSESSEES BANK ACCOUNT W AS BROUGHT TO TAX BY THE ASSESSING AUTHORITY. THE AMOUNT DEPOSITED BY THE OUT STATION PARTIES WERE NOT ASSESSEES MONEY BUT MONEY RECEIVED AS A COMMISSION AGENT WHICH STOOD PA SSED ON TO THE SUPPLIERS OF MARBLE. THE AFORESAID FACTS WERE ALSO REITERATED BY THE ASS ESSEE IN HIS STATEMENT RECORDED ON 16.11.2007 BY THE ASSESSING AUTHORITY. THEREFORE, THERE IS THUS NO JUSTIFICATION IN MAKING THE ADDITION OF CASH DEPOSITS AS UNEXPLAINED INVEST MENT. RELIANCE HAS BEEN PLACED ON THE JUDGMENT DATED 9.11.2010 BY THE HON'BLE JURISDICTIO NAL HIGH COURT OF RAJASTHAN AT JAIPUR 3 BENCH, JAIPUR IN DBIT APPEAL NO. 289/2010 IN THE CA SE OF CIT VS. SMT. ANITA CHOUDHARY, COPY PLACED AT ASSESSEES PAPER BOOK PAGES 2 TO 6 A ND ALSO VARIOUS TRIBUNAL ORDERS ON SIMILAR ISSUE, COPY PLACED IN ASSESSEES PAPER BOOK PAGES 7 TO 27. 4. ON THE OTHER HAND, THE LD. D/R SUPPORTS THE FACT S AND FINDINGS REACHED BY THE AUTHORITIES BELOW. THE ASSESSEE DID NOT SPECIFY TH E NAMES AND ADDRESSES OF THE PERSONS WHO ARE HIS CLIENTS AND MADE DEPOSITS IN HIS BANK A CCOUNT FOR ONWARD TRANSMISSION TO THE SUPPLIERS OF MARBLE, IF ANY. THE ASSESSING OFFICER , THEREFORE, WAS JUSTIFIED IN TREATING THE SAID DEPOSITS AS ASSESSEES UNEXPLAINED INVESTMENT. 5. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. THE PERUSAL OF MATERIAL ON RECORD REVEALS THAT THERE IS NO DISPUTE TO THE PECU LIAR FACTS THAT THE DEPOSITS IN APPELLANTS BANK ACCOUNT ARE NOT MADE BY THE ASSESSEE HIMSELF B UT ARE THE DEPOSITS MADE AT OUT STATIONS BY DIFFERENT PERSONS. THE ASSESSEE HAD RET URNED COMMISSION INCOME FROM SUPPLY OF MARBLE AND EXPLAINED THAT SUCH COMMISSION WAS RE CEIVED ON THE AMOUNTS THAT ARE DEPOSITED IN HIS BANK ACCOUNT BY HIS CLIENTS. THE A SSESSING OFFICER HAD ADMITTED THE COMMISSION AS DECLARED BY THE ASSESSEE. SINCE THE MONEY DEPOSITED IN THE ACCOUNT OF THE ASSESSEE IS NOT A DEPOSIT BY HIM, AND IS AN AMOUNT HELD FOR OTHERS AND STOOD ALSO WITHDRAWN AND PAID TO THE CONCERNED SUPPLIERS, THE SAME COULD NOT BE TREATED AS UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT. THE LD. D/ R, HOWEVER, SOUGHT TO STATE THAT THE ASSESSING OFFICER MERELY ACCEPTED THE INCOME OF COM MISSION AT RS. 1,26,850/- AS THE APPELLANT RETURNED THE SAME IN THE RETURN VOLUNTARI LY FILED BY HIM. THAT WILL NOT SUBSTANTIATE HIS CASE. WE, HOWEVER, DO NOT FIND AN Y MERIT IN THIS PLEA OF THE REVENUE AS THE INCOME RETURNED BY THE ASSESSEE FROM COMMISSION HAS NOT BEEN ASSESSED ON PROTECTIVE BASIS BUT FIND THAT THE ASSESSMENT HAS BEEN COMPLET ED ON SUBSTANTIVE BASIS AFTER 4 CONSIDERING THE RECEIPTS OF RS. 194,797/- AGAINST W HICH INCIDENTAL EXPENSES TO BUSINESS HAVE BEEN DEFRAYED BY AN AMOUNT OF RS. 69,971/- SO AS TO ARRIVE AT THE INCOME OF RS. 1,24,824/- FROM THE BUSINESS INCOME RETURNED BY HIM . IN THE OVER ALL CONSPECTUS AND CONSIDERING THE PECULIAR FACT THAT THE ASSESSING OF FICER HAS ASSESSED HIM AS A COMMISSION AGENT AT AN INCOME DERIVED ON SUCH DEPOSITS, NO JUS TIFICATION IS FOUND IN SUSTENANCE OF THE ADDITION. WE, THEREFORE, DELETE THE ADDITION MADE UNDER SECTION 69A OF THE ACT AND ALLOW THE GROUND RAISED IN APPEAL BY THE ASSESSEE. 6. GROUND NO. 2 IN APPEAL HAS NOT BEEN PRESSED. THE SAME IS DISMISSED AS NOT PRESSED. 7. IN THE RESULT, APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.8.2013. SD/- SD/- ( KUL BHARAT ) ( B. R. JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 22/08/2013. D/- COPY FORWARDED TO :- SHRI ANURAG VYAS, AJMER. THE ITO KISHANGARH. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 419/JP/2009) BY ORDER, AR ITAT JAIPUR.