The ITO, Ward-3(1), JAMNAGAR V. Shri Laxman G. Patel, JAMNAGAR

ITA 452/RJT/2012

• Counselvise Citation: 45224914 RSA 2012
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MA THEWS D R SREM
• Assessee Lawyers: CHETAN AGARWAL CA M

Judgement Text

0 I , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . A OR . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 4 52/RJT/2012 SR R / ASSESSMENT YEAR 200 8 - 09 THE INCOME - TAX OFFICER, WARD - 3 (1 ), JAMNAGAR. ( C / APPELLANT) SHRI LAXMAN G. PATEL GRAIN MARKET, KALAVAD, DIST. : JAMNAGAR. PAN : ACNPP0843K 2FC / RESPONDENT M / REVENUE BY SHRI K. C. MA THEWS, D R. SREM / ASSESSEE BY SHRI CHETAN AGARWAL , CA. M 0 / DATE OF HEARING 13 - 06 - 2013 M 0 / DATE OF PRONOUNCEMENT 21 - 0 6 - 2013 / ORDER . . A , OR / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 1 8 - 0 6 - 201 2 OF CIT (A), JAMNAGAR FOR THE ASSESSMENT YEAR 200 8 - 09. 2. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL . FOR THE ASSESSMENT YEAR UN DER APPEAL, HE FILED E RETUR N OF IN COME ON 08 - 03 - 2010 DECLARING TOTAL INCOME AT RS. 98,590 / - . AO FRAMED THE ASSESSMENT U/S.143(3) OF THE I.T. ACT, 1961 ON 2 7 - 12 - 2010 WHEREIN, HE MADE ADDITION OF RS. 12,31,000 / - BEING CASH DEPOSITED IN BANK ACCOUNT NO.624801510885 AND CASH OF RS.1,25,2 48/ - IN BANK ACCOUNT NO.015301515418 WITH ICICI BANK LTD. AND CASH OF RS.1,85,000/ - IN BANK ACCOUNT NO.521 WITH COM. CO. OP. BANK LTD. U/S.6 9A OF THE I.T. ACT, 1961 . THE REASONS FOR MAKING TOTAL ADDITION OF RS.15,41,248 (RS.12,31,000/ - + RS.1,25,248/ - + RS.1 ,85,000/ - ) CONTAINED IN PARA - 6 OF THE ASSESSMENT ORDER ARE THAT ASSESSEE FAILED TO DISCHARGE THE ONUS LIES UPON HER TO PROVE THE SOU RCE OF DEPOSIT . . 3. ON APPEAL BEFORE LD. CIT (A), ASSESSEE PLEADED THAT ALL THE DEPOSITS ARE UNACCOUNTED SALES OF THE ASSES SEE AND REQUESTED TO ESTIMATE REASONABLE ITA 452 - 201 2 2 INCOME ON SUCH UNACCOUNTED SALES. THE LD. CIT (A) ACCEPTED THIS CONTENTION AND DIRECTED THE AO TO APPLY PROFIT RATE OF 5% ON UNDISCLOSED SALES INSTEAD OF TREATING THE ENTIRE SALES AS UNEXPLAINED MONEY U/S.69A OF TH E I.T. ACT, 1961. AGGRIEVED WITH THE ORDER PASSED BY THE LD. CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS: - 1 . THE CIT (A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1541248/ - MADE BY AO U/S. 69A ON ACCOUNT O F UNEXPLAINED CASH DEPOSITS IN VARIOUS BANK ACCOUNTS AND REPLACING IT WITH GP ADDITION @8% OF SUCH UNEXPLAINED CASH DEPOSITS TREATING THE SAME AS HIS UNACCOUNTED SALES. 2 . THE CIT (A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE UNEXPLAINED CASH DEPOSITS IN VARIOUS BANK ACCOUNTS WERE IN FACT UNACCOUNTED SALES OF THE ASSESSEE WITHOUT ASSIGNING ANY REASON WHATSOEVER. 3 . THE CIT (A) ERRED IN LAW AND ON FACTS IN DIRECTING TO APPLY GP RATE @5% OF THE UNEXPLAINED DEPOSITS WITHOUT ANY SOUND BASE OR REASONING PARTICU LARLY WHEN THE ASSESSEE HIMSELF IS DISCLOSING GO AS HIGH AS 23.12% & NP AT 17.60% ON HIS ACCOUNTED SALES. 4 . AT THE TIME OF HEARING BEFORE US, ON BEHALF OF REVENUE, SHRI K. C. MATHEWS, DR APPEARED AND CONTENDED THAT IN THE IMPUGNED ORDER, THE LD. CIT (A) ER RED IN TREATING UNEXPLAINED CASH DEPOSIT AS UNACCOUNTED SALES WITHOUT BRINGING ANY MATERIAL ON RECORD. WITHOUT PREJUDICE TO THIS, HE SUBMITTED THAT GO RATE @5% ON UNEXPLAINED CASH DE POSITS APPLIED BY AO IS VERY LOW BECAUSE THE ASSESSEE HIMSELF DISCLOSED G P AS HIGH AS 23.12% AND NP AT 17.60% ON HIS ACCOUNTED SALES. AS AGAINST THIS, COUNSEL OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT (A). HE SUBMITTED THAT ASSESSEE IS A RETAIL TRADE. AS PER THE PROVISIONS CONTAINED IN SECTION 44AF OF THE I.T . ACT, 1961, WHERE AN ASSESSEE IS ENGAGED IN RETAIL TRADE IN ANY GOODS OR MERCHANDISE, A SUM EQUAL TO FIVE PER CENT OF TOTAL TURNOVER OF SUCH BUSINESS IS CHARGE ABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. HE SUBMITTED THAT VI EW TAKEN BY LD. CIT (A) IN THE IMPUGNED ORDER IS IN CONFORMITY WITH THIS SPIRIT OF SECTION 44AF OF THE I.T. ACT, 1961. THEREFORE, VIEW TAKEN BY LD. CIT (A) BE UPHELD. 5 . HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW . IN THESE THREE BANK ACCOUNTS, THERE ARE DEBIT AND CREDIT ENTRIES. THESE CREDIT AND DEBIT ENTRIES REFLECT THE SALES AND PURCHASES MADE BY ITA 452 - 201 2 3 THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNT. THE CLOSING BALANCE OF ALL THESE THREE BANK ACCOUNTS AS MENTIONED IN PA RA - 6 OF THE ASSESSMENT ORDER ARE RS.15,439/ - . SECTION 44AF OF THE I.T. ACT PRESCRIBES THE PROFIT RATE OF 5% ON TURNOVER OF RETAIL BUSINESS. IN THE IMPUGNED ORDER, THE LD. CIT (A) AFTER CONSIDERING THE CONSPICUOUS FACTS OF THE CASE AND PROVISION OF SEC.44 AF OF THE I.T. ACT, 1961 DIRECTED THE AO TO APPLY PROFIT RATE OF 5% ON UNDISCLOSED SALES INSTEAD OF TREATED THE SAME AS UNEXPLAINED MONEY, IN OUR OPINION IS FAIR AND REASONABLE. WE ARE THEREFORE OF THE VIEW THAT THE ORDER OF LD. CIT (A) NEEDS NO INTERFERE NCE. 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 7 . THIS O RDER PRONOUNCED IN O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . D. K. SRIVASTAVA ) ( 0 . . R / T. K. S HARMA) / ACCOUNTANT MEMBER S / JUDICIAL MEMBER / ORDER DATE 21 - 0 6 - 2013. /RAJKOT NVA/ - RJM M / COPY OF ORDER FORWARDED TO: - 1 . C / APPELLANT - THE INCOME - TAX OFFIC ER, WARD - 3 (1 ), JAMNAGAR. 2 . 2FC / RESPONDENT - SHRI LAXMAN G. PATEL, GRAIN MARKET, KALAVAD, DIST. : JAMNAGAR. 3 . I / CONCERNED CIT , JAMNAGAR. 4 . - / CIT (A) , JAMNAGAR. 5 . 2SSI , 0 I , / DR, ITAT, RAJKOT 6 . R / GUARD FILE. / BY ORDER TRUE COPY. SENIOR PRIVATE SECRETARY, ITAT, RAJKOT