Pramoda Kumar Bhuyan, Bhubaneswar V. Pr.CIT-1, Bhubaneswar

ITA 44/CTK/2022

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6587 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 11-10-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 10-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHITRASEN PARIDA
• Keywords: Unexplained investment; Salary income

Judgement Text

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK (THROUGH VIRTUAL HEARING) श्री जाजज माथन, न्याययक सदस्य एवं श्री राजेश क ु मार, ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER आयकर अऩीऱ सं/ITA No.44/C TK/2022 (ननधाारण वषा / Asses s m ent Year : 2017-2 018) Pramod Kumar Bhuyan Plot No.2110/4686 Rameswarpatna, Mausima Chhak, Bhubaneswar-751002 Vs Pr.CIT, Bhubaneswar-1 PAN No. :ABEPB 1191 Q (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri Chitrasen Parida, Advocate राजस्व की ओर से /Revenue by : Dr. Abani Kanta Nayak, CIT-DR स ु नवाई की तारीख / Date of Hearing : 12/10/2023 घोषणा की तारीख/Date of Pronouncement : 12/10/2023 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Bhubaneswar-1, dated 01.02.2022, passed in DIN & Letter No.ITBA/REV/F/REV5/2021-22/1039257956(1), for the assessment year 2017-2018. 2. It was submitted by the ld. AR that the original assessment in the case of the assessee was a limited scrutiny assessment on account of “Large cash deposits in the bank account(s) during the year”. It was also submitted that the original assessment came to be completed u/s.143(3) on 17.12.2019. It was the submission that the ld. Pr.CIT invoked his powers u/s.263 of the Act and issued show cause notice to the assessee in respect of two issues. It was the submission that the first issue was that during the course of assessment proceedings, it was found that there was ITA No.44/CTK/2022 2 cash deposit of Rs.58,58,484/- out of which the AO had made addition of Rs.20,68,000/- u/s.69 of the Act stating that the cash deposit in specified bank notes during the demonetization period are unexplained investment. Regarding the balance of Rs.37,90,484/-, the AO treated the same as assessee’s own trade receipt and estimated the net profit from such profit at 1%. It was the submission that the ld. Pr.CIT was of the view that the 1% was not required to be considered but the entire amount was liable to be treated as unexplained cash deposit of the assessee. It was further submitted that the second issue was in respect of the salary income from M/s Neelachal Filling Station and the assessee claimed that he was a partner but no salary and remuneration have been offered. It was the submission that in respect of the first issue, the ld. AO had already taken a view and had expressed his opinion and has brought to tax the income and estimated at 1%. It was the submission that in respect of second issue the AO could not have considered the issue insofar as it was a limited scrutiny and the issue of remuneration of salary from M/s Neelachal Filling Station was not an issue to which the ld. AO could have got into. It was the prayer that the order of the ld. Pr.CIT is liable to be quashed. In respect of first issue that the issue had already been considered and an opinion had already been formed by the AO and in respect of second issue there was a limited scrutiny and the AO could not have go beyond the such issue and in view of the decision of the Hon’ble Jurisdictional High Court in the case of Shark Mines & Minerals Pvt. Ltd., reported in [2023] 151 taxmann.com 71 (Orissa)[02-03-2023], in the case of ITA No.44/CTK/2022 3 limited scrutiny, ld. Pr.CIT could not treat the assessment order as erroneous on the issues which were not opened in the assessment proceedings. 3. In reply, ld.CIT-DR drew our attention to para 4.6 of the order of the AO, wherein the AO has categorically admitted that the assessee could not establish his claim with verifiable evidences such as books of accounts, return of income etc. from M/s Neelachal Filling Station, Chandikhol and, therefore, the AO’s treatment of Rs.37,90,484/- as the assessee’s own trade receipt was totally a wrong view. It was the submission that in respect of second issue in regard to the limited scrutiny and the salary and remuneration received from M/s Neelachal Filling Station, he relied upon the order of the ld. Pr.CIT. 4. We have considered the rival submissions. Admittedly, a perusal of the assessment order at para 4.6 clearly shows that the assessee has been unable to prove his partnership claim in respect of M/s Neelachal Filling Station. The assessee has also been unable to prove the source for Rs.37,90,484/- in his bank account. Thus, the action taken by the AO in estimating the income from such deposit is in fact, erroneous as the AO has not considered how this amount has been treated as income in the profit and loss account of the assessee, then obviously the same cannot be treated as receipt for estimation purposes. The AO has also failed to consider from where the assessee has received this money and for what purpose he has received it. In the absence of any explanation or proof, obviously it should have drawn the attention of the AO in regard to making the addition. Thus, it cannot be said that the AO has applied his mind or has formed his opinion on the issue. ITA No.44/CTK/2022 4 5. Coming to the second issue, admittedly, the AO himself has recorded that the assessee has been unable to prove his relationship with M/s Neelachal Filling Station. If this is so, the question of salary and the remuneration from the same being a partnerships firm, would not arise. In any case, the original assessment was a limited scrutiny and this was not before the AO in the limited scrutiny. This being so, in view of the principles laid down by the Hon’ble Jurisdictional High Court in the case of M/s Shark Mines & Minerals, referred to supra, the order of the ld. Pr.CIT on this issue stands set aside. The order of the ld. Pr.CIT on the first issue being the estimation of cash deposit in the bank account to the extent of Rs.22,65,000/- out of the total credits of Rs.37,90,484/- stands upheld. 6. In the result, appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 12/10/2023. Sd/- (राजेश क ु मार) (RAJESH KUMAR) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 12/10/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- Pramod Kumar Bhuyan Plot No.2110/4686 Rameswarpatna, Mausima Chhak, Bhubaneswar-751002 2. प्रत्यथी / The Respondent- Pr.CIT, Bhubaneswar-1 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यावऩत प्रयत //True Copy//