ACIT, V. Shri Bhagwandas Maheshwari,

ITA 45/JAB/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1039 (ITAT-JABALPUR)
• Duration Of Justice: 7 year(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2012
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Assessee Lawyers: A P SHRIVASTAVA; SA
• Keywords: Unexplained investment
• Section: 68; 6

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE (CAMP AT JABALPUR) BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 45/JAB/2012 A.Y.2007-08 ACIT CIRCLE KATNI :: APPELLANT VS BHAGWANDAS MAHESHWARI KATNI :: RESPONDENT APPELLANT BY SHRI ABHISHEK SHUKLA RESPONDENT BY SHRI A.P. SHRIVASTAVA AND SHRI SAPAN USRATHE DATE OF HEARING 13.09.2013 DATE OF PRONOUNCEMENT 28.10.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 28.11.2011 PASSED BY THE LEARNED CIT(A). THE FIRST GROUND 2 RELATES TO DELETION OF ADDITION BY THE LEARNED CIT( A) OF RS. 1,65,33,007/- MADE BY THE ASSESSING OFFICER AS UNEX PLAINED CASH CREDIT U/S 68 OF THE ACT. 2. WE HAVE HEARD SHRI ABHISHEK SHUKLA, LEARNED SENI OR DR AND SHRI A.P. SHRIVASTAVA, LEARNED COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SU PPORT TO THE ASSESSMENT ORDER AND CONSEQUENT ADDITION MADE U/S 6 8 BY THE LEARNED ASSESSING OFFICER. ON THE OTHER HAND, THE LEANED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DERIVES INCOME FROM TRANSPORT AND THE BUSI NESS OF FINANCIAL SERVICES. THE ASSESSEE DECLARED TAXABLE INCOME AT RS. 19,19,990/- IN ITS RETURN FILED ON 31 ST OCTOBER, 2007 WHICH WAS ACCOMPANIED BY AUDITED REPORT. IN RESPONSE TO NOTI CE AND QUESTIONNAIRE THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND PRODUCED BOOKS OF ACCOUNTS ALONG WITH VOUC HERS FOR VERIFICATION. THE BOOKS AND VOUCHERS WERE EXAMINED BY THE ASSESSING OFFICER. THE ASSESSEE CLAIMS THAT IT IS ENGAGED IN BUSINESS OF PARA-BANKING. THE ASSESSING OFFICER M ADE ADDITION OF RS.1,65,33,007/- AS UNEXPLAINED INVESTMENT U/S 6 8 OF THE ACT 3 ON THE PLEA THAT ONUS IS ON THE ASSESSEE TO ESTABLI SH NOT ONLY THE IDENTITY BUT ALSO THE GENUINENESS OF THE TRANSACTIO N. BEFORE THE LEARNED CIT(A) THE LEARNED COUNSEL FOR THE ASSESSEE FILED WRITTEN SUBMISSIONS BY EXPLAINING THAT NO SUMS ARE CREDITED IN THE BOOKS OF ACCOUNTS RATHER THESE ARE DEBITED AND THE ASSESSING OFFICER DID NOT EXAMINE THE CLAIM OF THE ASSESSEE I N PROPER PERSPECTIVE. BEFORE COMING TO ANY CONCLUSION, WE AR E REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER OF THE ORDER OF THE LEARNED CIT(A) :- THE AO WORKED OUT PEAK AT RS. 1,65,33,007/- THIS S UM ARE FIGURES OF CHEQUE WHICH WERE ISSUED IN THE LAST WEE K OF MARCH 2007 WHICH WERE CLEARED IN FIRST WEEK OF APRIL, 200 7. HAD THE AO GOT BANK RECONCILIATION DONE, THIS WOULD HAVE BEEN CLEARED AT THE TIME OF ASSESSMENT PROCEEDINGS ITSELF. THE APPELLAN T ENCLOSED COMPLETE DETAILS OF RS.1,65,33,007/- BANK WISE CLEA RED IN ARIL, 2007. 6. EARLIER, THE CASE WAS HEARD BY THE THEN ID. CIT (A) ON 22.2.2010. A REMAND REPORT WAS CALLED FOR FROM THE AO ON THE REPLY FILED BY THE APPELLANT AND DIRECTED TO VERIFY THE CREDITS. THE AO VERIFIED A LARGE NUMBER OF CREDITS AND SUBMI TTED THE REMAND REPORT ON 18.11.2010 AND 07.12.2010. IT WAS REPORTED THAT THE CREDITS WERE VERIFIABLE. 7. SUBSEQUENTLY, THE THEN ID. CIT (A) DESIRED FURTH ER VERIFICATION BY THE AO IN RESPECT OF CREDIT OF RS. 1.65 LACS APPEARING ON THE LAST DAY. ACCORDINGLY, THE AO VIDE HIS REPORT DATED 25.3.2011 HAS STATED THAT THE SAID CREDITS AR E VERIFIABLE. 8. SIMILAR ADDITIONS WERE MADE IN THE CASE OF SHRI DHRUV MAHESHWARI AND SHRI HEMANT SOMANI WHEREIN THE ID. CIT (A) DELETED THE SAME. DECISION: I HAVE PERUSED THE MATERIAL ON RECORD, SU BMISSIONS OF THE COUNSEL AND THE ASSESSMENT ORDER. THE AO IN THE REMAND REPORT WHEREIN HE WAS REMANDED TO VERIFY THE CASH CREDITS HAS REPORTED THAT THE SAME ARE VERIFIABLE. IT IS SEEN 4 THAT NO RECONCILIATION HAS BEEN CALLED FOR BY THE A O. I TEND TO AGREE WITH THE SUBMISSIONS OF THE ID. COUNSEL. THE CREDITS IN QUESTION WERE VERIFIED BY THE AO AND NO ADVERSE INF ERENCE DRAWN. SIMILAR ADDITIONS ON THE SAME ISSUES, WITH S IMILAR FACTS HAVE BEEN DELETED BY ORDER OF CIT (A) VIDE F. NO. J/CIT (A)-II/JBP/ITD/W/KATNI/13/09-10 DATED 27-052010 AND F.NO. J/CIT (A)-II/JBP/ACIT CIR./KATNI/125/09-10 DA TED 18- 06-2010. RESPECTFULLY FOLLOWING THE SAME, AND IN LI GHT OF THE FACTS THAT THE SOURCES OF CREDIT ENTRIES ARE FOUND VERIFIABLE, THE ADDITION OF RS.1,65,33,007/- U/S 68 IS THEREFORE, D ELETED. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER I.E . THE BASIS OF MAKING THE ADDITION U/S 68 OF THE ACT, CONCLUSION D RAWN IN THE IMPUGNED ORDER, ASSERTION MADE BY THE LEARNED RESPE CTIVE COUNSEL AND THE MATERIAL AVAILABLE ON RECORD ARE KE PT IN JUXTAPOSITION AND ANALYSED, WE FIND THAT THE ASSESS ING OFFICER WORKED OUT THE PEAK AT RS.1,65,33,007/- OF THE FIGU RES OF CHEQUE WHICH WERE ISSUED IN THE LAST WEEK OF MARCH, 2007 A ND CLEARED IN APRIL, 2007. THERE IS A FINDING AT PAGE 3 OF THE I MPUGNED ORDER THAT THE COMPLETE BANKWISE DETAILS WERE ENCLOSED BE FORE THE LEARNED CIT(A) BY THE ASSESSEE JUSTIFYING THAT THE CHEQUES WHICH WERE ISSUED IN MARCH, 2007 WERE CLEARED IN APRIL, 2 007. THE REMAND REPORT WAS ALSO SOUGHT BY THE OFFICE OF THE LEARNED CIT(A) WITH THE DIRECTION TO VERIFY THE CREDITS. IN TURN, THE ASSESSING OFFICER VERIFIED LARGE NUMBER OF CREDITS AND SUBMIT TED THE REMAND REPORT ON 18.11.2010 AND 7.12.2010 REPORTING THAT T HE CREDITS WERE VERIFIABLE. THE LEARNED CIT(A) HAS ALSO MENTIO NED ABOUT THE DECISION IN DHRUV MAHESHWARI AND HEMANT SOMANI ON I DENTICAL 5 FACTS WHEREIN THE ADDITIONS MADE WERE DELETED. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE EVEN BEF ORE US. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE CO NCLUSION DRAWN BY THE LEARNED CIT(A). 4. THE NEXT GROUND PERTAINS TO DELETING THE LUMPSU M DISALLOWANCE OUT OF TRANSPORT INCOME OF RS. 5 LACS. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ADDITION WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFEND ED THE IMPUGNED ORDER. FOR READY REFERENCE, WE ARE REPROD UCING HEREUNDER THE RELEVANT PORTION FROM THE CONCLUSION DRAWN IN THE IMPUGNED ORDER :- 9. THE NEXT GROUND OF APPEAL AGITATES THE DISALLOWANCE OF RS.5 LAKHS OUT OF TRANSPORT BUSINESS- IT IS CONTEND ED THAT THE AO FOR THE REASON GIVEN AT PAGE 2 PARA 1 IN HIS ORD ER, DISALLOWED RS.5,00,000/- OUT OF TRANSPORT INCOME ON AN ESTIMATED BASIS. ADDITION HAS BEEN MADE WITHOUT ANY BASIS. A COMPLETE AUDIT REPORT IN RESPECT OF TRANSPORT INC OME WAS FILED ALONG WITH THE RETURN OF INCOME. THE AO HAS N OT DISCUSSED THE REASONS OF SUCH ADDITION. IT IS ALSO SUBMITTED THAT IN EARLIER ASSESSMENT YEAR AN ATTEMPT WAS MADE TO MAKE SOME DISALLOWANCE OUT OF TRANSPORT EXPENSES HOWEVER, IT WAS ALLOWED BY THE HON'BLE ITAT, JABALP UR BENCH, JABALPUR. IT WAS REQUESTED TO DELETE THE ADD ITIONS. DECISION: THE AO CITING MINOR DISCREPANCIES IN VOUC HING IN TRANSPORT BUSINESS MADE THE ADDITION ON ESTIMATED B ASIS. THE AO HAS NEITHER POINTED OUT THE DISCREPANCIES NO R GIVEN ANY REASON AS TO HOW THEY WOULD AFFECT THE TRANSPOR TATION INCOME. THE ADDITION ON ACCOUNT OF TRANSPORTATION I NCOME, MADE IN AN ARBITRARY MANNER STANDS DELETED. IN RESULT THE APPEAL IS ALLOWED. 6 IF THE TOTALITY OF FACTS, REASONS FOR DISALLOWANCE MADE BY THE ASSESSING OFFICER, CONCLUSION DRAWN IN THE IMPUGNED ORDER AND SUBMISSIONS OF THE LEARNED RESPECTIVE COUNSEL ARE K EPT IN JUXTAPOSITION AND ANALYSED, WE NOTE THAT THE LUMP S UM DISALLOWANCE OF RS. 5 LACS WAS MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF TRANSPORT BUSINESS WITHOUT AS SIGNING ANY REASON, MORE SPECIFICALLY WHEN THE COMPLETE AUDIT R EPORT IN RESPECT OF TRANSPORT INCOME WAS FILED ALONG WITH TH E RETURN. IT IS NOTE WORTHY THAT THE ASSESSING OFFICER HAS NOT DESC RIBED ANY VALID REASON IN THE ASSESSMENT ORDER WHILE MAKING S UCH DISALLOWANCE. IDENTICALLY THE MATTER FOR EARLIER AS SESSMENT YEAR TRAVELLED TO THE TRIBUNAL AND SUCH DISALLOWANCE WAS DELETED. NO CONTRARY DECISION OR FACTS WAS BROUGHT TO OUR NOTIC E BY THE REVENUE IN SUPPORT OF ITS CLAIM. WE FURTHER NOTE F ROM THE ASSESSMENT ORDER THAT THE LEARNED ASSESSING OFFICER EVEN HAS NOT MADE ANY WHISPER ABOUT THE TRANSPORT INCOME OR THE REASON FOR MAKING SUCH DISALLOWANCE ON LUMP SUM BASIS. SUCH AD DITION CANNOT BE SUSTAINED. IN VIEW OF THESE FACTS, WE FIN D NO JUSTIFICATION TO INTERFERE WITH THE CONCLUSION DRAW N IN THE IMPUGNED ORDER ON THE ISSUE IN HAND. 7 FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED ON 28.10.2013. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 28.10.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYAS!