ITO, CHITTORGARH V. Smt. Gurmeet Kaur W/o Sh. Amarjeet Singh Arora, CHITTORGARH

ITA 425/JODH/2013

• Counselvise Citation: 42523314 RSA 2013
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 15-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PA A
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 425/JODH/2013 (A.Y. 2005-06) THE I.T.O., VS. SMT. GURMEET KAUR, W/O SHRI WARD 1(1) AMARJEET SINGH ARORA, 292, CHITTORGARH. ADARSH COLONY, NEAR ASHAWARI MATAJI TEMPLE, NIMBAHEDA, CHITTORGARH. PAN NO. ABYPA7590A (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.A. JOSHI, D.R. ASSESSEE BY : SHRI SHYAM SINGHVI DATE OF HEARING : 10/12/2013. DATE OF PRONOUNCEMENT : 13/12/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 09.05.2013 OF LD. CIT(A), UDAIPUR. FOLLOWING GROUNDS HAVE BEE N RAISED IN THIS APPEAL. ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN:- 2 1. DELETING THE ADDITION OF RS. 10,33,329/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT WITH OUT APPRECIATING THE FACT THAT DURING THE COURSE OF SET ASIDE ASSES SMENT PROCEEDING THE ASSESSEE HAS FAILED TO PROVE THE GE NUINENESS OF THE TRANSACTIONS, THE IDENTITY AND CREDITWORTHINES S OF CREDITORS. 2. DECIDING THE ISSUE ON THE GROUND THAT HIS PREDEC ESSOR HAS DELETED THE ADDITION IGNORING THE FACT THAT THE HO N'BLE ITAT INSTEAD OF UPHOLDING THE LD. CIT(A)S ORDER, HAS RESTORED BACK THE MATTER TO ASSESSING OFFICER. 2. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT GRIE VANCE OF THE DEPARTMENT RELATES TO DELETION OF ADDITION OF RS. 10,33,329/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 3. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT TH E ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORT COMMISSION, HIRING INCOME FROM TRANSPORT BROKING AGENCY AND GUEST HOUSE IN NIMBAHERA. THE ASSESSEE F ILED THE RETURN OF INCOME ON 31/8/2005 DECLARING AN INCOME OF RS. 1,0 5,840/-. HOWEVER, THE ASSESSMENT WAS FRAMED AT AN INCOME OF RS. 14,39,950 /- U/S 143(3) OF THE I.T. ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A ), WHO VIDE ORDER DATED 19/9/2008 ALLOWED THE APPEAL, WHICH RESULTED DELETI ON OF ADDITION OF RS. 12,33,329/- MADE U/S 68 OF THE ACT AND RS. 1,00,000 /- AS UNEXPLAINED INCOME. 5. AGAINST THE SAID ORDER OF THE LD. CIT(A), THE DE PARTMENT PREFERRED AN APPEAL TO THE ITAT JODHPUR BENCH, WHEREIN THE ISSUE RELATED TO THE ADDITION OF 3 RS. 10,33,329/- WAS REMITTED BACK TO THE ASSESSING OFFICER TO VERIFY CORRECTNESS OF THE FACT AS CLAIMED BY THE ASSESSEE IN RESPECT OF CREDITS OF 12 PERSONS AFTER MAKING ENQUIRIES AS MAY BE CONSIDERED NECESSARY. THE ASSESSING OFFICER, HOWEVER, FOLLOWED THE ORDER OF H IS PREDECESSOR AND MADE THE ADDITION OF RS. 10,33,329/-. 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE THEN LD. CIT(A) HAD ARRIVED AT A CONCLUSION ON THE BASIS OF SUBMISSIONS AND ARGUMENTS BEFORE HIM AND AFTER VERI FICATION OF CASH BOOK, GIR(BILTIES), BANK STATEMENTS ETC. APPRECIATED THE FACTS IN THE FOLLOWING MANNERS. * THE APPELLANT IS IN TRANSPORT BUSINESS DOES NOT HAVE OWN FLEET OF VEHICLES AND THEREFORE VEHICLES ARE ARRANGED FROM OPEN MARKET. * MODUS OPERANDI TO RECORD TRANSACTION ARE AS PER SET PRACTICE PREVAILING IN THE MARKET I.E. FREIGHT PAYMENT TO B E MADE TO THE DRIVER ARE MADE EITHER TO PAY OR PAID. * IN CASE OF PAID GIR (BILTIES) THE APPELLANT IS P AID TOTAL FREIGHT AT THE TIME OF LOADING OF MATERIAL BUT DRIVERS ARE PAID A FTER RECEIVING CONFIRMATION OF UNLOADING. * THUS, PAYMENT RETAINED IN THE INTERVENING PERIOD IS ACCOUNTED FOR IN THE BOOKS AND DEPOSITED INTO THE BANK. * THIS MODUS OPENRANDI IS ADOPTED BY THE APPELLAN T YEAR AFTER YEAR AND THERE IS NO CHANGE IN THE ACCOUNTING POLICY. * THESE FACTS HAVE BEEN STATED BY HUSBAND OF THE A PPELLANT SHRI AMARJEET SINGH ARORA IN ASSESSMENT PROCEEDINGS. * THESE TRANSACTIONS HAVE BEEN FOUND VERIFIABLE FR OM GIR WITH CASH BOOK WITH BANK STATEMENT PRODUCED IN ASSESSMENT PR OCEEDINGS AND IN APPELLATE PROCEEDINGS. 4 * THE ASSESSING OFFICER CONSIDERED THE FACT OF DEP OSITS INTO THE BANK BUT DID NOT CONSIDER WITHDRAWAL MADE FROM THE ACCOUNT FOR PAYMENTS. AS AND WHEN AMOUNT RECEIVED BY THE APPEL LANT IS ENTERED IN THE BOOKS SIMILAR IS POSITION IN RESPECT OF PAYMEN T ALSO. * THERE IS NO MATERIAL WITH THE ASSESSING OFFICER TO STATE THAT THE ENTRY IN THE CASH BOOK PERTAINED CASH CREDITS ENTR IES. IT WAS FURTHER STATED THAT THE DRIVERS OR CONSIGNO RS COULD NOT BE PRODUCED AS THEY WERE NOT TRACEABLE BUT THE VERIFIC ATION OF ENTRIES OF CASH RECEIPTS HAVING THE NAME OF CONSIGNER IN CASH BOOK WITH GIR(BILTIES) WITH DEPOSITS INTO THE BANK ACCOUNT WAS DONE. IT WAS FUR THER STATED THAT EVERY INDIVIDUAL ENTRY OF RECEIPT OF AMOUNT FROM THE CONS IGNER TOWARDS FREIGHT CHARGES FOR THE DRIVERS IN CASH BOOK LINKED WITH GI R (BILTIES) WAS DEPOSITED INTO THE BANK ACCOUNT. THEREFORE, IT WAS EVIDENT TH AT THE CREDIT IN THE NAME OF 12 PERSONS IN THE CASH BOOKS WAS PURELY BUSINESS IN NATURE RELATED TO THE TRANSPORTATION OF MATERIAL ON PAID BILTY BASIS. IT WAS ALSO STATED THAT THE FREIGHT CHARGES RECEIVED FROM THE CONSIGNOR AT THE TIME OF LOADING THE MATERIAL WAS CREDITED IN CASH BOOK IN THE NAME OF DRIVER/ CONSIG NER HAD BEEN DEPOSITED INTO THE BANK AND THOSE WERE PAID TO THE DRIVERS ON CONFIRMATION OF UNLOADING AS PER SET PRACTICE PREVALENT IN THE TRANSPORT BROK ING BUSINESS. IT WAS CONTENDED THAT ONCE THE CREDITS IN THE NAME OF DRIVERS OR CONSIGNORS WERE PROVED AS BUSINESS TRANSACTIONS, IT MAY NOT BE TREATED DEPOSITS OR ADVANCES TO BE COVERED U/S 68 OF THE AC T. IT WAS FURTHER STATED THAT 5 IN CASE OF BUSINESS TRANSACTIONS, GENUINENESS OF TH E TRANSACTION WAS OF CREDIT ESSENCE AND IN THE PRESENT CASE, GENUINENESS OF TRA NSACTIONS WITH ALL THE 12 PERSONS HAD BEEN SUCCESSFULLY ESTABLISHED ON THE ON E HAND AND VERIFICATION OF CREDITS IN THE NAME OF 12 PERSONS WITH THE CASH BOO K AND GIR WITH BANK STATEMENT HAD BEEN CARRIED OUT. THEREFORE, THE ADDI TION MADE BY THE ASSESSING OFFICER BE DELETED. RELIANCE WAS PLACED O N THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. KAILASH CHANDRA DEEPAK KUMAR (2009) 317 ITR (ALL) 351. THE RELIANCE WAS AL SO PLACED ON THE FOLLOWING CASES MENTIONED AT PAGE 6 & 7 OF THE IMPUGNED ORDER :- I. (2002) 260 ITR 658 (RAJ) II. (2001) 114 TAXMAN 219 (DELHI). 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE DEPOSIT IN QUESTIONS WERE BUSINES S TRANSACTIONS AND THE PROVISIONS OF SECTION 68 OF THE ACT WERE NOT APPLIC ABLE, HE, THEREFORE, DELETED THE ADDITION OF RS. 10,33,329/-. NOW THE DEPARTMENT IS IN APPEAL. 8. THE LEARNED D.R. STRONGLY SUPPORTED THE ORDER O F THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT P ROVE GENUINENESS OF THE TRANSACTIONS AND THE SOURCE OF DEPOSIT. THEREFORE, THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER. 6 9. IN HIS RIVAL SUBMISSIONS, THE LEARNED COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND FURTHER SUBMITTED THAT IT WAS PURELY A BUSINESS TRANSACTION AND THE AMOUNT OF THE FREIGHT CHARGES RECEIVED FROM THE CONSIGNER WAS CREDITED IN THE NAM E OF THE DRIVERS AND WAS DEPOSITED IN THE BANK ACCOUNT. THE SAID ENTRY WAS L INKED WITH GIR (BILTIES) AND WAS PAID TO THE DRIVERS ON CONFIRMATION OF UNLO ADING. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESEN T CASE THE AMOUNT CREDITED IN THE NAME OF THE DRIVERS/CONSIGNORS WAS ON ACCOUN T OF FREIGHT CHARGES RECEIVED AND THE SAME AMOUNT WAS DEPOSITED IN THE B ANK ACCOUNT. LATER ON, THIS AMOUNT WAS PAID TO THE DRIVERS ON CONFIRMATION OF UNLOADING. THEREFORE, THE ENTRY MADE IN THE BOOKS OF ACCOUNT OF THE ASSES SEE WAS PURELY A BUSINESS TRANSACTION RELATED TO THE TRANSPORTATION OF MATERI AL ON PAID BILTY BASIS AND THE FREIGHT CHARGES RECEIVED FROM THE CONSIGNORS AT THE TIME OF LOADING OF THE MATERIAL WERE CREDITED IN THE CASH BOOK IN THE NAME OF DRIVER/CONSIGNOR, THE SAME AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT AND W AS PAID TO THE DRIVERS ONLY ON CONFIRMATION OF UNLOADING, AS SUCH, THE AMO UNT IN QUESTION CANNOT BE TREATED AS CASH CREDIT U/S 68 OF THE ACT SINCE IT W AS RELATED TO THE BUSINESS TRANSACTION AND THE ASSESSEE HAD NOT RECEIVED THE C ASH FROM HERSELF RATHER SHE WAS THE CUSTODIAN IN HER BUSINESS FOR THE AMOUN T RECEIVED FROM THE 7 CONSIGNORS, WHICH WAS TO BE PAID TO THE DRIVERS, WH O TRANSPORTED THE GOODS. THEREFORE, BY CONSIDERING THE TOTALITY OF THE FACTS AS NARRATED HEREINABOVE, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED I N DELETING THE IMPUGNED ADDITION. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. 11. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. (ORDER PRONOUNCED IN THE COURT ON 13/12/2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13/12/2013 RANJAN* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.