M/s Bimla Devi, Pakur V. ITO, Sahibganj

ITA 46/RAN/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67345 (ITAT-RANCHI)
• Duration Of Justice: 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 22-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARSHWARDHAN PRASAD SR S C
• Assessee Lawyers: K M MISHA
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI CIRCUI T BENCH, RANCHI (BEFORE SHRI P.K.BANSAL, HONBLE A.M.& SHRI D,T. GA RASIA, HONBLE J.M .) I.T.A. NO. 46/RAN/2013 : ASSESSMENT YEAR 2007-08 M/S. BIMLA DEVI, PAKUR VS- ITO, WARD-III(4), SAHEBGANJ (APPLICANT) (RESPONDENT) APPLICA NT BY : SHRI K.M.MISHA, ADVOCATE RESPONDENT BY : HARSHWARDHAN PRASAD , SR.S.C. DATE OF CONCLUDING THE HEARING : 03.05.2013 DATE OF PRONOUNCING THE ORDER : 07.05.2013 ORDER PER BENCH : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), DHANBAD DATED 05.02.2013 FOR THE ASSESSMENT YEAR 20 07-08. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL FILED BY THE ASSESSEE RELATES TO THE ADDITION OF RS.15,56,608/- . 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE A SSESSEE FILED HIS RETURN ON 26.10.2007 AT AN INCOME OF RS.90,188/-. THE ASSESSMENT WAS COM PLETED UNDER SECTION 143(3) AT AN INCOME OF RS.16,46,796/- MAKING THE ADDITION IN RES PECT OF OPENING BALANCE OF CASH IN HAND. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) . THE CIT(A) NOTED THAT IN RESPECT OF SOURCE OF THE OPENING CASH IN HAND, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND MEASURING 9 BIGHA 7 KAT THA AND 7 DHOOR IN 1980, 16 KATTHA IN 1985 AND 19 KATTHA 7 DHOOR IN THE YEAR 1987 AND THE ASSESSEE WAS HAVING AGRICULTURAL INCOME @RS.1,20,000/- PER ANNUM. AS PER THE CERTIFI CATE ISSUED BY THE CIRCLE OFFICER IN THE ASSESSMENT YEAR 2009-10 AND FROM ASSESSMENT YEA R 1980-81, THE INCOME ABOUT RS.1,50,000/- PER ANNUM GOT ACCUMULATED OUT OF WHIC H OPENING CASH IN HAND WAS 2 GENERATED. THE CIT(A) WAS NOT SATISFIED WITH THE CO NTENTION OF THE ASSESSEE ESPECIALLY WHEN THE ASSESSEE WAS HAVING BANK ACCOUNT SINCE 198 7 THAT THE ASSESSEE COULD HAVE ACCUMULATED INCOME OVER A PERIOD OF 25 YEARS, OUT O F AGRICULTURAL INCOME TO THE TUNE OF RS.1,50,000/- IN THE YEAR 1980-81 ESPECIALLY WHEN T HE AGRICULTURAL LAND WAS PURCHASED BY THE ASSESSEE ONLY IN 1985 AND 1987. 4. BEFORE US, THE LD. A.R. REITERATED THE SUBMISSIO NS BEFORE THE CIT(A). ON A QUESTION FROM THE BENCH, THE A.R. STATED THAT THE A SSESSEE HAS FILED THE RETURN FOR THE ASSESSMENT YEAR 2007-08. FOR THE FIRST TIME, THE AS SESSEE WAS NOT HAVING TAXABLE INCOME FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS F ILED THE STATEMENT OF AFFAIRS FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. THE ACCOUNTS FOR THE YEAR 31 ST MARCH, 2007 WERE DULY AUDITED. THE LD. A.R. BEFORE US VEHE MENTLY CONTENDED THAT UNDER SECTION 68 ANY ADDITION CAN BE MADE, IF A SUM IS FOUND CRED ITED IN THE BOOKS OF THE ACCOUNT MAINTAINED BY THE ASSESSEE FOR THE PREVIOUS YEAR AN D THE ASSESSING OFFICER IS NOT SATISFIED WITH THE EXPLANATION ABOUT THE NATURE AND SOURCE FILED BY THE ASSESSEE, NO BOOKS OF ACCOUNTS WERE EXAMINED DURING THE COURSE OF THE ASSESSMENT. THE BALANCE-SHEET AND THE BANK PASSBOOKS ARE NOT THE BOOKS OF ACCOUNTS. R ELIANCE WAS PLACED ON THE DECISION OF THE BOMBAY HIGH COURT IN 256 ITR 20 AS WELL AS DELHI HIGH COURT IN 338 ITR 563. THE OPENING BALANCE OF CASH IN HAND RELATES TO THE EARLIER YEAR. IT WAS ONLY A BROUGHT FORWARD BALANCE. THE ASSESSEE STARTED THE BUSINESS IN THE ASSESSMENT YEAR 2006-07. THE ASSESSEE COULD NOT BE EXPECTED TO EARN SO MUCH PROF IT IN THE ASSESSMENT YEAR 2007-08. RELIANCE WAS ALSO PLACED IN THIS REGARD ON THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF ROSHAN DI HATI VS- CIT 107 ITR 938. RE LIANCE WAS ALSO PLACED ON THE DECISION OF THE DELHI HIGH COURT REPORTED IN 301 IT R 385 AND THAT OF RAJASTHAN HIGH COURT REPORTED IN 301 ITR 404 (RAJ.) IN WHICH IT WA S HELD THAT THE CREDIT APPEARED IN THE BOOKS OF ACCOUNTS ON THE FIRST DAY OF THE PREVIOUS YEAR WAS NOT TAXABLE INCOME OF THE ASSESSEE. THERE IS NO FINDING ON THE PART OF THE AS SESSING OFFICER THAT THE ASSESSEE HAD MADE THE INVESTMENT. THEREFORE, THE ADDITION CANNOT BE MADE. EVEN OTHERWISE ALSO, THERE 3 IS NO EVIDENCE ON RECORD THAT THE ASSESSEE HAS MADE INVESTMENT. RELIANCE WAS PLACED ON THE DECISION OF THE ORISSA HIGH COURT IN 276 ITR 54 9. THE LD. D.R., ON THE OTHER HAND, SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. EVEN IT WAS VEHEMENTLY SUBMITTED BY THE LD. D.R. THAT THE ASSESSEE HAS NOT FILED ANY WEALTH TAX RETURN. IF THE ASSESSEE WOULD HAVE CASH IN HAND AMOUNTING TO RS.16,06,608/-, WHICH IS MUCH MORE THAT RS.50,000/-, THE ASSESSEE WOULD HAVE FILED THE WEALTH TAX RETURN. 5. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE MATERIALS AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE CASE LAWS AS HAS BEEN RELIED ON BY THE LD. A.R. IT IS A FACT THAT DURING THE YEAR, THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNTS AS IS APPARENT FROM THE AUDIT REPORT FILED BY THE ASSESSE E UNDER SECTION 44AB OF THE INCOME TAX ACT IN WHICH AUDITOR HAS CLEARLY MENTIONED THAT THE ASSESSEE HAS MAINTAINED THE CASH BOOK, LEDGER PURCHASE REGISTER AND OTHER DOCUM ENTS RELATING TO INVENTORY. IT IS ALSO NOT DENIED BY THE LD. A.R. THAT THE ASSESSEE HAD MA DE THE INVESTMENT IN THE BUSINESS. THIS IS THE FIRST YEAR IN WHICH THE ASSESSEE HAD ST ARTED ITS BUSINESS AND WAS HAVING THE INCOME AND FILED THE INCOME-TAX RETURN ON THE FIRST DAY OF THE YEAR I.E. ON 1 ST APRIL, 2006. THE ASSESSEE HAS SHOWN CASH IN HAND AT RS.16,06,608 /-. THE EXPLANATION OF THE ASSESSEE WAS THAT THIS WAS CASH IN HAND IN THE HANDS OF THE ASSESSEE AS ON 31.03.2006. THE ASSESSEE HAS FILED THE BALANCE-SHEET FOR 31 ST MARCH, 2006 BUT DID NOT FILE ANY INCOME TAX RETURN DURING THAT YEAR IN THE BALANCE-SHEET AS FIL ED BY THE ASSESSEE. THE CAPITAL OF THE ASSESSEE HAD BEEN SHOWN AT RS.75,85,919/- AND AFTER THE ASSET SIDE SHOWN IN THE BALANCE- SHEET, IT IS APPARENT THAT THE ASSESSEE HAS THE TAX ABLE WEALTH AND THE CASH IN HAND SHOWN BY THE ASSESSEE IN THIS BALANCE-SHEET IS MUCH MORE THAN RS.50,000/- RS.16,06,608/- THE BASIC EXEMPTION LIMIT FOR WEALTH TAX WAS ONLY RS.15 LAKHS. HAD THE ASSESSEE WAS HAVING THE CASH IN HAND TO THE EXTENT OF RS.16,06,608/-, T HE ASSESSEE WOULD HAVE FILED THE WEALTH TAX RETURN. THE DECISIONS AS RELIED BY THE LD. A.R. RELATING TO THE BOOKS OF ACCOUNTS, IN OUR OPINION ARE NOT APPLICABLE AS THE AMOUNT HAS DU LY BEEN FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS ON 01.04.2006 AND PR IOR TO THAT THE ASSESSEE HAS NOT 4 MAINTAINED ANY BOOKS AS CONFESSED BY THE LD. A.R. E XCEPT THE COMPILATION OF THE BALANCE-SHEET FOR THE PURPOSE OF SUBMISSION BEFORE THE INCOME-TAX AUTHORITY AS ON 31.03.2006. THE DECISION OF THE DELHI HIGH COURT IN 301 ITR 385 AS WELL AS THAT OF RAJASTHAN HIGH COURT IN 301 ITR 401, IN OUR OPINION , WILL NOT ASSIST THE ASSESSEE AS THE ASSESSEE IN THIS CASE HIMSELF CONFESSED THAT HE STA RTED THE BUSINESS DURING THE YEAR ENDED 31.03.2006 BUT SINCE THE INCOME WAS NOT TAXABLE, TH EREFORE, NO RETURN FOR THE INCOME-TAX WAS FILED. THE ASSESSEE EXPLAINED THE SOURCE IN RES PECT OF CASH IN HAND THAT THE AMOUNT HAS BEEN ACCUMULATED OUT OF THE SAVINGS BEING MADE OUT OF AGRICULTURAL INCOME EARNED BY THE ASSESSEE. IT IS NOT DENIED BY THE REVENUE TH AT THE ASSESSEE WAS NOT HAVING THE AGRICULTURAL LAND. THE CIRCLE OFFICER HAS ALSO GIVE N A CERTIFICATE THAT IN THE ASSESSMENT YEAR 2009-10, THE ASSESSEE WAS HAVING AGRICULTURAL INCOME AT RS.1,20,000/-. KEEPING IN VIEW ALL THESE SURROUNDING CIRCUMSTANCES AND THE FA CT THAT THE ASSESSEE HAS NOT FILED THE WEALTH TAX RETURN FOR THE ASSESSMENT YEAR, WE ARE O F THE VIEW THAT THE ASSESSEE MUST BE HAVING SOME CASH IN HAND, OUT OF SAVINGS/CASH ACCUM ULATED OUT OF AGRICULTURAL INCOME OVER THE YEARS. SINCE IN THIS CASE, THERE IS NO DIR ECT EVIDENCE AVAILABLE WITH THE ASSESSEE EXCEPT THE COMPILATION OF THE BALANCE-SHEET AS ON 3 1.03.2006, IN OUR OPINION, IT WOULD BE REASONABLE TO ESTIMATE CASH IN HAND AS ON 31.03.200 8 AT RS.5 LAKHS. WE, THEREFORE, DELETE THE ADDITION OF RS.5 LAKHS AND SUSTAIN THE BALANCE ADDITION OF RS.11,06,608/-. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 7 TH MAY, 2013. SD/- SD/- [D.T.GARASIA] [P.K. BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7 TH MAY, 2013 5 COPY OF ORDER FORWARDED TO : 1. M/S. BIMLA DEVI, PAKUR 2. ITO, WARD-III(4), SAHEBGANJ 3. C.I.T.(A), 4. THE C.I.T., 5. THE D.R., I.T.A.T., TRUE COPY, BY ORDER, SR. PRIVATE SECRETARY (ON TOUR) ITAT, RANCHI [MST, SR.P S]