Smt. Sharda Devi Vyas, Indore V. The ITO, Indore

ITA 433/IND/2009

• Counselvise Citation: 43322714 RSA 2009
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 27-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: H P VERMA
• Keywords: Unexplained cash credit

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.433/IND/2009 A.Y.2006-07 SMT. SHARDA DEVI VYAS INDORE PAN AAOPV-0987H APPELLANT VS INCOME TAX OFFICER 4(2), INDORE RESPONDENT APPELLANT BY : SHRI H.P. VERMA AND SHRI ASHISH GOYAL RESPONDENT BY : SHRI P.K. MITRA O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE HAS MOVED THE PRESENT APPEAL AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 25.6.2009. 2. THE SHORT ISSUE BEFORE US RELATES TO ADDITION OF RS.17 LACS ON ACCOUNT OF UNEXPLAINED DEPOSIT IN THE BANK. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE, A LADY SENIOR CITIZEN , FILED HER 2 RETURN OF INCOME AT RS. 1,59,200/-. THE CASE WAS T AKEN INTO SCRUTINY. DURING THE COURSE OF ASSESSMENT, THE ASS ESSING OFFICER FOUND THAT THERE WAS CASH DEPOSIT OF RS. 3 LACS ON 5.8.2005 AND RS. 14 LACS ON 13.3.2006 IN THE BANK A CCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER ASKED THE SOUR CE OF FUND FROM THE ASSESSEE. THE ASSESSEE SUBMITTED THAT SHE WAS CARRYING ON RETAIL BUSINESS OF TRADING IN BOOKS HAV ING TURNOVER OF RS. 15,00,250/- WHEREON SHE HAS SHOWN GROSS PROF IT OF RS. 2,01,850/- AND NET PROFIT OF RS. 1,24,750/-. THE A SSESSEE WAS ASKED TO PRODUCE THE BOOKS, DETAILS OF PURCHASES MA DE AS WELL AS SALES IN ORDER TO SUBSTANTIATE THE TRADING OF BO OKS. THE ASSESSEE WAS ALSO REQUIRED TO EXPLAIN AS TO WHY SHE IS NOW CLAIMING TRADING OF BOOKS WHEREAS IN THE RETURN THE ASSESSEE SHE HAS CLAIMED PUBLISHING OF BOOKS AS HER BUSINESS . THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS CONSCI OUSLY TRIED TO MISLEAD BY DISTORTING THE FACTS AS DISCLOSED IN THE RETURN AND THAT SHE ALSO DID NOT DISCLOSE THE SOURCE FROM WHIC H SHE HAS DEPOSITED CASH OF RS. 17 LACS IN HER BANK ACCOUNT W ITH BANK OF RAJASTHAN, PATEL NAGAR BRANCH, INDORE. ACCORDINGLY , ADDITION 3 OF RS.17 LACS WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CREDIT. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE APPROACHED THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) WHEREIN IT WAS STATED THAT SHE WAS CA RRYING ON RETAIL TRADING IN BOOKS AND THE AMOUNT SO DEPOSITED WAS OUT OF THE SALE PROCEEDS OF THE BOOKS AND SHE HAD ALREADY DECLARED MORE THAN 5% PROFIT AS REQUIRED U/S 44AF OF THE ACT . IT WAS FURTHER SUBMITTED THAT SINCE THE TURNOVER OF THE AS SESSEE WAS BELOW RS. 40 LACS, SHE WAS NOT REQUIRED TO KEEP THE BOOKS OF ACCOUNTS IN TERMS OF THE PROVISIONS OF SECTION 44AF OF THE ACT. HOWEVER, BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ALSO FILED STATEMENT OF AFF AIRS WHEREIN IT WAS STATED THAT DURING THE YEAR RS. 17 LACS WAS INTRODUCED AS ADDITIONAL CAPITAL. THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) OBSERVED THAT NOWHERE THE ASSESSEE HAS CL AIMED THAT SHE IS FILING THE RETURN U/S 44AF OF THE ACT N OR THIS FACT WAS DISCLOSED BEFORE THE ASSESSING OFFICER. IN VIEW OF THE STATEMENT OF AFFAIRS FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX 4 (APPEALS), WHEREIN RS. 17 LACS WERE SHOWN AS ADDITI ONAL CAPITAL, THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) CONCLUDED THAT THE ASSESSEE WAS UNABLE TO EXPLAIN T HE SOURCE OF RS.17 LACS. ACCORDINGLY, THE ACTION OF THE ASSES SING OFFICER WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS OF LD. REPRESENTATIVES OF BOTH SIDES IN VIEW OF THE FACTS STATED ABOVE AND FIND THAT AS PER TRADING ACCOUNT FILED BEFORE T HE ASSESSING OFFICER, THE ASSESSEE HAS ALLEGED TO BE CARRYING ON BUSINESS OF RETAIL TRADING IN BOOKS. UNDER THE PROVISIONS OF S ECTION 44AF OF THE ACT, SHE IS NOT SUPPOSED TO KEEP THE BOOKS OF A CCOUNTS. THE ALLEGED DEPOSIT OF RS. 14 LACS IN THE BANK WAS CLAIMED TO BE OUT OF SALE PROCEEDS. HOWEVER, BEFORE THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS), AS PER THE ST ATEMENT OF AFFAIRS FILED BY THE ASSESSEE HERSELF, THERE WAS ADDITIONAL CAPITAL OF RS.17 LACS AS BROUGHT BY THE ASSESSEE IN HER BUSINESS. THUS, THERE APPEARS TO BE CLEAR CONTRADI CTION BETWEEN THE ASSERTION OF THE ASSESSEE THAT THE DEPO SIT IN THE 5 BANK ACCOUNT WAS OUT OF SALE PROCEEDS OF THE BOOKS WHEREAS AS PER THE STATEMENT OF AFFAIRS FILED BEFORE THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), WHICH HAS BEE N REPRODUCED BY HIM AT PAGE 6 OF HIS APPELLATE ORDER, THERE WAS INTRODUCTION OF RS. 17 LACS AS ADDITIONAL CAPITAL. THE ASSESSEE HAS ALSO SHOWN UTILIZATION OF HER CAPITAL MAINLY IN DEPOSITS AMOUNTING TO RS.14,25,000/- AS WELL AS CASH IN HAND RS. 14,25,463/-. WE ALSO OBSERVE THAT IN TERMS OF PROV ISIONS OF SECTION 44AF OF THE ACT, THE ASSESSEE CANNOT BE ASK ED TO PRODUCE THE BOOKS OF ACCOUNTS BUT AT THE VERY SAME TIME IF IT IS FOUND THAT HUGE CASH HAS BEEN DEPOSITED IN THE BANK , ATLEAST PRIMARY EVIDENCE OF RECEIPT OF SUCH AMOUNT OF CASH OUT OF SALE PROCEEDS IN THE TRADING ACCOUNT IS REQUIRED TO BE S HOWN. IT APPEARS THAT THE LOWER AUTHORITIES HAVE NOT CONSIDE RED THE ASSESSEES SUBMISSION REGARDING NON-MAINTENANCE OF BOOKS OF ACCOUNTS IN TERMS OF SECTION 44AF OF THE ACT AND DE POSIT OF CASH OUT OF SALE PROCEEDS WHICH IS REQUIRED TO BE E XAMINED AFRESH IN VIEW OF OUR ABOVE OBSERVATION. WE, THERE FORE, IN THE INTEREST OF JUSTICE, RESTORE THE MATTER BACK TO THE FILE OF THE 6 ASSESSING OFFICER FOR DECIDING AFRESH IN TERMS OF O UR ABOVE OBSERVATION. WE DIRECT ACCORDINGLY. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 6 TH APRIL, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH APRIL, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/-