Shri Sanjeev Kumar S/o Shri Sushil Kumar, Pathankot V. The Income Tax Office, Pathankot

ITA 445/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0699 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 18-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: P N ARORA
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NOS. 445 TO 449(ASR)/2015 ASSESSMENT YEAR: 2006-07 TO 2010-11 SHRI SANJEEV KUMAR S/0 SHRI SUSHIL KUMAR, VISHNU NAGAR, LAMINI, PATHANKOT. PAN:BLGPK3147N VS. INCOME TAX OFFICER, WARD 6(3), PATHANKOT. (APPELLANT) (RESPONDENT) I.T.A NOS.440 & 442(ASR)/2015 ASSESSMENT YEAR: 2008-09 & 2010-11 INCOME TAX OFFICER, WARD 6(3), PATHANKOT. VS. SHRI SANJEEV KUMAR S/0 SHRI SUSHIL KUMAR, VISHNU NAGAR, LAMINI, PATHANKOT. PAN:BLGPK3147N (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA (ADV.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR ) DATE OF HEARING: 16.06.2016 DATE OF PRONO UNCEMENT: 17.06.2016 ORDER PER T. S. KAPOOR (AM): THIS IS A BUNCH OF SEVEN APPEALS OUT OF WHICH TWO A PPEALS ITA NO.440 & 442 (ASR)/2015 ARE FILED BY REVENUE WHEREA S REST OF THE APPEALS HAS BEEN FILED BY ASSESSEE. ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 2 2. THE APPEALS IN ITA NOS.440 & 442(ASR)/2015 HAS B EEN FILED BY REVENUE AGAINST THE SEPARATE ORDERS OF CIT(A) BOTH DATED 20.05.2015 AND REVENUE IS AGGRIEVED WITH THE RELIEF GIVEN BY LEARN ED CIT(A). 3. THE APPEALS IN ITA NOS.445 TO 449 HAS BEEN FILED BY ASSESSEE AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A) ALL D ATED 20.05.2015 AND ASSESSEE IS AGGRIEVED BY PART SUSTAINCE OF ADDITION WHICH THE ASSESSING OFFICER HAD MADE U/S 68 OF THE ACT. THE ASSESSEE HA S ALSO CHALLENGED THE REOPENING OF THE CASE U/S 147/148 OF THE ACT. 4. THE BRIEF FACTS OF THE CASES ARE THAT ASSESSING OFFICER HAD MADE ADDITIONS IN THESE YEARS ON THE BASIS OF DEPOSITS B Y ASSESSEE IN HIS BANK ACCOUNTS FOR WHICH THE LEARNED CIT(A) HAS ALLOWED P ART RELIEF. 5. AT THE TIME OF HEARING, THE LEARNED AR INVITED O UR ATTENTION TO THE ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE IN I TA NO. 445,446, 447 AND 449 (ASR)/2015. THE LEARNED AR SUBMITTED THAT I N THESE YEARS THE ASSESSEE HAS TAKEN ADDITIONAL GROUND THAT ASSESSING OFFICER HAD MADE ADDITION U/S 68 OF THE ACT WHEREAS THE FACT REMAINS THAT ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND THEREFORE , THE PROVISIONS OF SECTION 68 WERE NOT APPLICABLE AND IN VIEW OF VARIO US DECISIONS OF VARIOUS TRIBUNALS THE ASSESSING OFFICER WAS NOT JUSTIFIED I N MAKING ADDITION U/S 68 OF THE ACT. THE LEARNED AR SUBMITTED THAT SINCE ISSUE RAISED BY ASSESSEE IS A LEGAL ISSUE AND THEREFORE, IT CAN BE RAISED AT THIS STAGE ALSO ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 3 AND RELIANCE IN THIS RESPECT WAS PLACED ON THE CASE LAW OF NTPC VS. CIT, 229 TR 383 DECIDED BY HONBLE SUPREME 6. AS REGARDS THE APPEAL IN ITA NO.448(ASR)/2015 FO R ASST. YEAR 2009-10, THE LEARNED AR SUBMITTED THAT HE IS NOT PR ESSING THE SAME AS LEARNED CIT(A) HAD ALLOWED TOTAL RELIEF TO THE ASSE SSEE AND ASSESSEE HAS CHALLENGED ONLY THE REOPENING OF THE CASE WHICH HE SUBMITTED THAT HE WAS NOT PRESSING. IN VIEW OF THE ABOVE, IT WAS SUBM ITTED THAT APPEAL IN ITA 448(ASR)/2015 MAY BE DISMISSED AS NOT PRESSED. 7. THE LEARNED DR DID NOT RAISE ANY OBJECTION IN AD MITTING THE ADDITIONAL GROUND OF APPEAL AND MOREOVER WE FIND TH AT THE GROUND RAISED BY ASSESSEE IS A LEGAL GROUND AND HE IS ENTITLED TO RAISE AT THIS STAGE. THEREFORE, WE ADMITTED THE ADDITIONAL GROUND AND LE ARNED AR WAS DIRECTED TO PROCEED ON THE ARGUMENTS ON THE ADDITIO NAL GROUND. 8. THE LEARNED AR SUBMITTED THAT IT IS AN UNDISPUTE D FACT THAT ASSESSEE WAS NOT MAINTAINING THE BOOKS OF ACCOUNTS AS NO BOOKS OF ACCOUNTS WERE PRODUCED BEFORE ASSESSING OFFICER AND LEARNED CIT(A) AND THE LEARNED CIT(A AT PAGE 9 OF HIS ORDER HAS NOTED DOWN VIDE WRITTEN SUBMISSIONS OF THE ASSESSEE WHEREIN THE ASSESSEE HA D ARGUED THAT HE WAS NO ACCOUNT CASE AND FOLLOWING THE PROVISIONS OF SECTION 44AF, THE NET PROFIT WAS DECLARED WHICH WAS MORE THAN 5% OF SALES DECLARED BY ASSESSEE. IN THIS RESPECT, LEARNED AR INVITED OUR A TTENTION TO PAGE 9 OF LEARNED CIT(A)S ORDER IN ASST. YEAR 2006-07 AND FU RTHER SUBMITTED THAT ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 4 POSITION IN ALL THESE YEARS REMAINS THE SAME AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO LEARNED CIT(A) ORDER IN AS ST. YEAR 2007-08 AT PAGE 10 AND FOR ASST. YEAR 2008-09 WE WERE TAKEN TO LEARNED CIT(A)S ORDER AT PAGE 10 AND FOR 2010-11 WE WERE TAKEN TO P AGE 9. IN VIEW OF THE ABOVE FACTS, THE LEARNED AR SUBMITTED THAT IT IS AN UNDISPUTED FACT THAT ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND THEREFORE, THE ADDITION U/S 68 COULD NOT HAVE BEEN MADE. TO SUBSTA NTIATE THAT ASSESSING OFFICER HAD MADE ADDITION U/S 68 OF THE A CT, THE LEARNED AR TOOK US TO THE FINDINGS OF ASSESSING OFFICER AT PAG E 5 FOR ASST. YEAR 2006- 07. THE LEARNED AR SUBMITTED THAT IN ALL ASST. YEAR S THE ADDITION HAD BEEN MADE U/S 68 AND THEREFORE, RELYING UPON THE VA RIOUS CASE LAWS, THE LEARNED AR SUBMITTED THAT THE ADDITIONS WERE NOT WA RRANTED. RELIANCE IN THIS RESPECT WAS PLACED IN CASE LAWS OF DELHI BENCH OF ITAT IN THE CASE OF ITO, VS. SH. OAM PARKASH SHARMA, IN ITA NO.2256/DE/ 2009, FOR ASST. YEAR 2000-2001, SIMILARLY RELIANCE WAS PLACED ON TH E FOLLOWING CASE LAWS. (I) SH. AMRJEET SINGH VS. ITO, WARD-2(1), BATHINDA IN ITA NO.114(ASR)/2015. (II) SH. YADWINDER SINGH VS. ITO, WARD-2(1), BATHIN DA IN ITA NO.508(ASR)/2014. 9. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF AUTHORITIES BELOW IN RESPECT OF ASSESSEES APPEALS AND RELIED UPON THE ORDER OF ASSESSING OFFICER IN RESPECT OF REVENUES APPEALS. 10. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS AN UN DISPUTED FACT THAT ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 5 ASSESSEE WAS NOT MAINTAINING THE BOOKS OF ACCOUNTS AND HAD DECLARED ITS INCOME U/S 44AF OF THE ACT. THIS FACT HAS BEEN NOTE D BY LEARNED CIT(A) IN HIS ORDERS AT VARIOUS PAGES AS BROUGHT TO OUR NO TICE BY THE LEARNED AR. FURTHER WE FIND THAT ASSESSING OFFICER HAS MADE THE ADDITION U/S 68 OF THE ACT AND IN THIS RESPECT THE FINDINGS OF THE ASS ESSING OFFICER ARE IMPORTANT. THE LEARNED ASSESSING OFFICER AT PAGE 4 & 5 OF HIS ORDER FOR ASST. YEAR 2006-07 HAS REPRODUCED THE NOTICE ISSUED TO ASSESSEE WHEREIN HE HAS MENTIONED THAT HE PROPOSED TO MAKE ADDITION U/S 68 OF THE ACT. IN THE FINAL FINDINGS ALSO THE ASSESSING OFFICER HA S MADE ADDITION U/S 68 OF THE ACT. FOR THE SAKE OF CONVENIENCE THE FINDING S OF ASSESSING OFFICER AS CONTAINED IN ASST. YEAR 2006-07 ARE REPRODUCED B ELOW. 05. IN RESPONSE TO THE AFORESAID SHOW CAUSE NOTIC E THE ASSESSEE HAS TAKEN A PLEA THAT A COPY OF AIT/CIB INFORMATION HAS NOT BEEN PROVIDED TO HIM WHEREAS THE INFORMATION RELATING TO THIS CASH D EPOSITS OF RS.14,98,000/- WHICH FALLS UNDER THE STIPULATED MON ETARY LIMIT OF DEPOSITS HAVING MORE THAN RS.10 LACS AND THE SAME HAS BEEN D ULY INTIMATED TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S. THE ASSESSEE HAS FURTHER OBJECTED THE ISSUE AND SERVICE OF NOTICE U/ S. 148 OF THE IT. ACT. 1961 AND TOOK A PLEA THAT SAID NOTICE HAS NOT BEEN SERVED/DELIVERED TO THE ASSESSEE WHICH IS PATENTLY WRONG WHICH IS EVIDENT F ROM THE LETTER DATED 31-07-2012 IN WHICH THE ASSESSEES COUNSEL HAS CATE GORICALLY ADMITTED THE ACKNOWLEDGEMENT OF THE SAID NOTICE. HAD THE RETURN FILED VOLUNTARILY ON 27- 07-2012 AS CLAIMED BY THE ASSESSEE MAY BE TREATED A S A RETURN FILED WITHIN TIME IS NOT CORRECT AS THE SAME HAS BEEN FIL ED BELATED RETURN THAT HAS BEEN PROVIDED IN THE SECTION 139(4) OF THE I.T. ACT,1961. KEEPING IN VIEW THE ABOVE MENTIONED FACTS IT IS CRYSTAL CLEAR THAT THE ASSESSEE COULD NOT ESTABLISH THE SOURCE OF CASH DEPOSITS BY PRODUC ING CORROBORATIVE ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 6 EVIDENCES OF SALES & PURCHASE, SO, I HEREBY MAKE AN ADDITION OF RS.14,63,000/- I.E. CASH DEPOSITS OF RS.14,98,000/- LESS PROFIT SHOWN AT RS.34,912/- IN THE RETURN OF INCOME ON ACCOUNT OF C ASH DEPSOITS MADE IN HIS SAVING BANK ACCOUNT NO4410 MAINTAINED WITH THE UNION BANK OF INDIA, DALHOUSIE ROAD, PATHANKOR DURING THE RELEVANT FINAN CIAL YEAR UNDER SECTION 68 OF THE INCOME-TAX ACT 1961, BY TREATING THE AFORES AID CASH DEPOSITS AS UNEXPLAINED CASH DEPOSIT. I AM THUS SAT ISFIED THAT THE ASSESSEE HAS CONCEALED HIS TRUE PARTICULARS OF HIS INCOME, PENALTY PROCEEDINGS UNDER SECTION 271(1) (C) OF THE INCOME -TAX ACT 1961 ARE HEREBY INITIATED SEPARATELY FOR CONCEALING HIS TRUE PARTICULARS OF HIS INCOME BY ISSUING PENALTY NOTICE UNDER THE AFORESAID SECTI ON READ WITH SECTION 274 OF THE INCOME-TAX ACT 1961. SIMILARLY, FINDINGS HAS BEEN RECORDED BY ASSESSING OFFICER IN ALL THE YEARS. SINCE THE FACT THAT ASSESSEE WAS NOT MAINTAI NING BOOKS OF ACCOUNTS AND THAT ASSESSING OFFICER HAD MADE ADDITI ONS U/S 68 HAS BEEN ESTABLISHED, THEREFORE, WE HAVE TO DECIDED AS TO WH ETHER UNDER THESE CIRCUMSTANCES THE ADDITION COULD HAVE BEEN MADE OR NOT. THE HONBLE ITAT, DELHI BENCH, IN ITA NO.2256/DELH/2009 IN ITS ORDER DATED 13.05.2011 UNDER SIMILAR FACTS AND CIRCUMSTANCES HA S DISMISSED THE APPEAL FILED BY REVENUE BY HOLDING AS UNDER: 9. COMING TO THE MERITS OF THE CASE, UNDISPUTEDLY, THE ADDITION OF RS.913000 WAS BASED ONLY ON SOME ENTRIES IN THE BAN K ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS FOUND NOT TO HAVE MAINTA INED ANY BOOKS OF ACCOUNT. NOW, AS CORRECTLY OBSERVED BY THE CIT(A), THE PASSBOOK/BANK STATEMENT SUPPLIED BY THE BANK TO THE ASSESSEE DOES NOT AMOUNT TO A BOOK OF ACCOUNT OF THE ASSESSEE. IT BEING ONLY A COPY OF CUSTOMERS' ACCOUNT IN THE BOOKS MAINTAINED BY THE BANK, A BANK DOES NOT A CT AS AN AGENT OF ITS CUSTOMER. IT ALSO CANNOT BE SAID THAT BANKER MAINTA INS A PASSBOOK UNDER THE INSTRUCTIONS OF THE ACCOUNT HOLDER. THE P ROVISIONS OF SECTION ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 7 68 OF THE ACT ARE, THEREFORE, NOT ATTRACTED WHERE T HE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT. THE CIT(A), IN THIS REGA RD, HAS RIGHTLY PLACED RELIANCE ON 'CIT VS. BHAICHAND H. GANDHI', 141 I.T. R. 67(BOM.), SAMPAT AUTOMOBILE VS. ITO', 96 TTJ(D)368, 'MS. MAYAWATI VS . DCIT', 113 TTJ 178(DEL.) AND 'SHERATON APPARELS VS. ACIT', 256 I.T .R. 20(BOM.). IT IS CORRECT THAT SINCE NO BOOKS OF ACCOUNT ARE MAINTAIN ED IN THE ORDINARY COURSE OF THE BUSINESS OF THE ASSESSEE, IN THE ABSE NCE OF ANY CORROBORATIVE EVIDENCE TO SUPPORT ACTION U/S 68 OF THE ACT, NO SUCH ADDITION IS TENABLE. WE FURTHER FIND THAT IN THE CASE OF SH. YADWINDER S INGH VS. ITO, WARD- 2,(1), BATHINDA IN ITA 508/ASR/2015 PASSED BY HON BLE ITAT AMRITSAR BENCH, VIDE ITS ORDER DATED 24.02.2016 IS ALSO SIMI LAR. THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE VIDE PARA NO.6 TO 10 HAS HELD AS UNDER: 6. I HAVE HEARD THE PARTIES AND HAVE PERUSED TH E MATERIAL AVAILABLE ON RECORD. SECTION 68 OF THE I.T. ACT, READS AS FOLLOWS: SECTION 68: WHERE ANY SUM IS FOUND CREDITED IN THE BOOK OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATI SFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME- TAX AS THE INCOM E OF THE ASSESSEE OF THAT PREVIOUS YEAR. 7. SO SECTION 68 TALKS OF ANY SUM FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR. AS PER THIS SECTIO N, IF THE ASSESSEE OFFERS NO EXPLANATION, THE SECTION WOULD APPLY. BUT THIS EXPL ANATION HAS TO BE WITH REGARD TO ANY SUM FOUND CREDITED IN THE BOOKS. THIS IS AMP LY CLEAR FROM THE USE OF THE EXPRESSION ABOUT THE NATURE AND. SOURCE THEREOF (THEREOF BEING THE OPERATIVE WORD). THEN, IN CASE THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND BY THE AO TO BE SATISFACTORY, THE SECTION CAN BE INVOKED. T HIS EXPLANATION, OBVIOUSLY, HARKS BACK TO ANY SUM FOUND CREDITED IN THE BOOKS. THE WORDS THE SUM SO CREDITED AGAIN RELATE TO ANY SUN FOUND CREDITED I N THE BOOKS SO CREDITED, HERE BEING THE PREGNANT EXPRESSION. 8. THUS, A PLAIN READING OF THE SECTION ESTABLISHES THAT IT OPERATES ONLY WHERE BOOKS ARE MAINTAINED BY ASSESSEE AND A SUM IS FOUND CREDITED THEREIN. 9. NOW, IN THE PRESENT CASE, IT REMAINS UNDISPUTED THAT THE. ASSESSEE HAS NOT MAINTAINED ANY BOOKS DURING THE YEAR. THUS, THE PRO VISIONS OF SECTION 68 OF THE ACT ARE NOT AT ALL ATTRACTED AND THEY HAVE BEEN WRON GLY APPLIED BY THE AUTHORITIES BELOW. THIS POSITION HAS BEEN DULY RECOGNIZED IN S H. OM PARKASH SHARMA, FARIDABAD (SUPRA). NO CONTRARY DECISION HAS BEEN C ITED BEFORE THIS BENCH. ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 8 10. IN VIEW OF THE ABOVE, THE GRIEVANCE OF THE A SSESSEE BY WAY OF THE ADDITIONAL GROUNDS TAKEN IS JUSTIFIED AND IS ACCEPTED AS SUCH. DUE TO SUCH ACCEPTANCE, SINCE THE PROVISIONS OF SECTION 68 OF THE ACT ARE THEMSELV ES HELD TO BE NOT APPLICABLE AND MIS- APPLIED, NOTHING FURTHER REMAINS TO BE ADJUDIC ATED. 11. ACCORDINGLY, THE ORDER UNDER APPEAL IS REVERSED. THE ADDITION IS CANCELLED. FOLLOWING THE ABOVE JUDICIAL PRECEDENTS WE ALLOW TH E ADDITIONAL GROUNDS OF APPEALS RAISED BY ASSESSEE IN HIS FAVOUR AND HOL D THAT ADDITION U/S 68 WERE NOT WARRANTED AND THEREFORE, APPEALS FILED BY ASSESSEE IN ITA NO.445,446,447 &449 ARE ALLOWED WHEREAS ITA NO.448 IS DISMISSED AS NOT PRESSED. 11. AS REGARDS THE APPEALS FILED BY REVENUE IN ITA NOS.440 &442(ASR)/2015 THE SAME ARE ALSO DISMISSED AS INFRA CTUOUS AS WE HAVE HELD THAT IN ALL THESE YEARS ADDITION MADE BY ASSES SING OFFICER ITSELF WAS BAD AND AGAINST LAW. 12. IN VIEW OF THE ABOVE, THE APPEALS FILED BY T HE REVENUE ARE DISMISSED WHEREAS THE APPEALS FILED BY THE ASSESSEE IN ITA NO .445, 446, 447 &449(ASR)/2015 ARE ALLOWED AND APPEAL IN ITA NO.448 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED:17.06.2016. /PK/PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE ITA NOS.445 TO 449 (ASR)/2015 ASST. YEARS: 2 006-07 TO 2010-11 ITA NOS.440 & 442(ASR)/2015 ASST. YEAR: 2 008-09 & 2010-11 9 (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER