ITO, RAJSAMAND V. Shri Prakash Chand Lohar, RAJSAMAND

ITA 464/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78215 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 464/JODH/2013 (A.Y. 2009-10) ITO, WARD-2, VS. SHRI PRAKASH CHAN DRA LOHAR, RAJSAMAND. 17, NAYON-KA-PAVTIA, CHARBUJA ROAD, AMET, DISTRICT RAJSAMAND. PAN NO. ACQPL 9513 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 10/06/2014. DATE OF PRONOUNCEMENT : 25/07/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 10/07/2013 OF LD. CIT(A), UDAIPUR. THE ONLY GROUND RAISED IN THIS APPEAL READS AS UNDER:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12,46,586 /- MADE ON ACCOUNT OF UNEXPLAINED DEPOSIT IN SAVING BANK ACCOUNT WITHOUT APPRECIATING THE FACT 2 THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF CASH AMOUNTING TO RS. 12,46,585/- DEPOSITED IN UNDISCLOSED SAVING BAN K ACCOUNT. 2 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE F ILED THE RETURN OF INCOME ON 23/02/2010 DECLARING AN INCOME OF RS. 1,6 2,621/- WHICH WAS PROCESSED U/S 143 (1) OF THE I.T. ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT IN SHORT). LATER ON CASE WAS SELECTED FO R SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTICED THAT THE ASSESSEE HAS DEPOSITS IN SBBJ BANK AMOUNTING TO RS. 15,14,350/-. HE ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF SAID DE POSITS. THE ASSESSEE SUBMITTED THAT HE WAS SELLING GOODS ON COMMISSION B ASIS TO THE CONCERN M/S. AMBICA MARBLE, SAMDARI, DISTRICT BARMER, M/S. SHRINATH MARBLE, PAOTA, JODHPUR, M/S. MAJISA MARBLE, PALI AND MAJISA MARBLE BALOTRA. THE ASSESSING OFFICER ASKED THE INFORMATION FROM THE SA ID PARTIES U/S 133(6) OF THE ACT AND SINCE NO INFORMATION WAS RECEIVED, T HEREFORE, COMMISSION U/S 131(1)(D) OF THE ACT WAS ISSUED TO THE ITO, BAL OTRA. THE ASSESSING OFFICER DISCUSSED THE RESPONSE GIVEN BY THE VARIOUS PARTIES IN THE ASSESSMENT ORDER AT PAGES 3 TO 7, FOR THE COST OF R EPETITION, THE SAME IS NOT REPRODUCED HEREIN. THE ASSESSING OFFICER WAS N OT SATISFIED FROM THE SUBMISSIONS OF THE ASSESSEE AND MADE THE ADDITION O F RS. 12,46,585/-. 3 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER:- 1. THE APPELLANT IS A SMALL COMMISSION AGENT AND E ARN COMMISSION ON SALE OF MARBLE BLOCKS AND TILES TO VARIOUS PARTIES WHO APPROACH THE APPELLANT FOR PURCHASE OF ABOVE GOODS THE APPELLANT IS REGULAR INCOME TAX PAYER FROM A.Y. 2005-06 AND THE WHAT-EVER COMMISSIO N INCOME EARNED AND DECLARED IN THE RETURN HAS BEEN ACCEPTED BY THE DEPARTMENT IN ALL THE YEARS. 2. DURING THE YEAR UNDER CONSIDERATION, THE APPELLA NT FILED THE RETURN ON 23.02.2010 DECLARING-TOTAL INCOME OF RS.2,15,625 /- ON 23.02.2010 AND PAID THE DUE TAX ON 14.11.2009. 3. DURING THE YEAR, THE PARTIES BELONGING TO JODHPU R, SAMDADI ABD BALOTARA HAVE PURCHASED MARBLE SLABS/TILES THROUGH THE APPELLANT AND THE APPELLANT HAS EARNED COMMISSION ON SUCH SALE/PURCHA SE AND THE SAME HAS BEEN DECLARED IN THE RETURN FILED FOR THE ASSTT. YE AR 2009-10. THE INCOME- TAX OFFICER, WARD-2, RAJASMAND SELECTED THE CASE FO R SCRUTINY UNDER THE CASS. 4. DURING THE ASSESSMENT PROCEEDINGS, THE LD ITO RE QUIRED VARIOUS DETAILS VIDE QUERY LETTER ISSUED AND THE APPELLANT FILED TH E REQUIRED DETAILS INCLUDING THE BANK STATEMENTS. AS PER THE BANK STA TEMENTS, THERE WERE CERTAIN DEPOSITS IN THE BANK. WHEN THE ASSESSEE WAS REQUIRED TO EXPLAIN THE ENTRIES IN THE BANK STATEMENT, IT WAS INFORMED TO THE LD A.O. THAT THE DEPOSIT IS THE COST OF MARBLE PURCHASED BY THE OUTS IDE PARTIES THROUGH THE APPELLANT BECAUSE THESE PARTIES PURCHASED THE MARBL E ON CREDIT THROUGH THE APPELLANT AND THEREAFTER THE TOTAL COST OF THE MARBLE WAS DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT AT THEIR TOWN. TH E REPLIES FILED BEFORE THE A.O. IS ENCLOSED HEREWITH AS PART AND PARCEL OF THE SUBMISSION. 5. THE LD. ITO CONDUCTED ENQUIRIES IN SOME OF THE C ASES AND IT WAS FOUND THAT THE CONTENTION OF THE APPELLANT WAS CORRECT HO WEVER, IN SOME OF THE CASES, THE A O DID NOT ACCEPT THE CONTENTIONS OF TH E APPELLANT ON THE GROUND THAT THE PARTIES CONCERNED HAS REFUSED OF HA VING MADE ANY PURCHASE THROUGH THE APPELLANT AND OUT OF TOTAL DEP OSITS IN THE BANKS AMOUNTING TO RS.18,'18,860, THE AO TREATED THE FOLL OWING AMOUNT AS EXPLAINED AND THE BALANCE AMOUNT OF RS. 12.46,585 R S TREATED AS 4 UNDISCLOSED CASH DEPOSITED IN SBBJ BANK ACCOUNT AND ADDED THE SAME TO THE TOTAL INCOME OF THE APPELLANT AS UNDER: TOTAL DEPOSIT IN THREE BANK ACCOUNT RS. 18,18,86 0 LESS : 1. AMOUNT DEPOSITED BY THE PARTY AS DISCUSSE D RS. 2,94,200 IN THE ASSESSMENT ORDER. 2. RETURN INCOME DECLARED BY ASSESSEE ON ACCOUNT OF COMMISSION RS. 2,35,555 3. 0N ACCOUNT OF INTEREST RS. 0,42,520 RS. 2,78 ,075 RS. 05,72,275 BALANCE CASH DEPOSIT RS. 12,46,585 THE A.O. HAS TREATED THE ABOVE AMOUNT AS UNDISCLOSE D CASH AS ACCORDING TO HIM THE PARTIES WHO HAVE MADE THE DEPOSITS AS RESUL T OF PURCHASE OF MARBLE THROUGH THE APPELLANT HAS DENIED OF HAVING ANY TRAN SACTION WITH THE APPELLANT WHICH IS TOTALLY UNJUSTIFIED BECAUSE, 1ST LY, THE LT0 DID NOT PROVIDE ANY OPPORTUNITY TO CROSS EXAMINE THE PARTIES WHO HA VE REFUSED OF HAVING ANY TRANSACTION WITH THE APPELLANT SECONDLY, FROM T HE BANK STATEMENTS, IT MAY KINDLY BE SEEN THAT THE BANK HAS CHARGED INTERC ITY CHARGES ON EVERY DEPOSITS OUTSIDE THE CITY WHICH CLEARLY INDICATE TH AT THE DEPOSITS WERE MADE BY THE PARTIES AT THEIR TOWN . COPY OF BANK STATEME NT IS ENCLOSED FOR YOUR HONOUR'S KIND PERUSAL. 6. FURTHER, FROM THE BANK STATEMENT IT MAY ALSO BE SEEN THAT AS SOON AS THE DEPOSITS WERE MADE BY THE CONCERNED PARTIES, THE AP PELLANT HAS WITHDRAWN THE AMOUNT PAYABLE TO THE MARBLE OWNERS FROM WHOM T HE PURCHASE WERE MADE THROUGH THE APPELLANT AFTER THE NEXT TWO AND T HREE DAYS AND THE AMOUNT REMAINED WAS THE COMMISSION OF THE APPELLANT AND THE SAME HAS BEEN DECLARED IN THE RETURN. 7. FURTHER, THE A.0. HAS NOT BROUGHT ANY MATERIAL AND EVIDENCE ON RECORD TO ESTABLISH THAT THE APPELLANT IS DOING THE BUSINESS OF PURCHASE AND SALE OF MARBLE AND THE AMOUNT APPEARING DEPOSITED IN THE BA NK ACCOUNT OF THE APPELLANT IS THE SALE PROCEEDS OF MARBLE SLABS AND TILES CLAIMED TO HAVE EFFECTED BY THE APPELLANT. 8 WITHOUT PREJUDICE TO ABOVE, IT MAY BE SUBMITTED T HAT IF THE ABOVE SUBMISSION IS FOUND TO BE NOT ACCEPTABLE, THEN THE TOTAL DEPOSIT FOUND IN THE 5 BANK ACCOUNT AMOUNTING TO RS.18,18,860 MAY BE TREAT ED AS SALE PROCEEDS AND NET INCOME MAY BE DETERMINED BY APPLYING NET PR OFIT RATE OF 5% AS THE CASE OF THE APPELLANT IS COVERED BY THE PROVISIONS OF SECTION 44AF OF THE ACT BECAUSE OF THE FACT THE APPELLANT HAS NOT MAINTAINE D ANY BOOKS OF ACCOUNT AS HIS TOTAL TURNOVER IS MUCH BELOW HE LIMIT PROVID ED UNDER THE PROVISIONS OF SECTION 44AF OF THE ACT AND THE APPEAL MAY KINDLY B E DECIDED ACCORDINGLY. 9. RESPECTED SIR, THE APPELLANT DOES NOT HAVE ANY I MMOVEABLE PROPERTY INCLUDING LAND, BUILDING PLOT, RESIDENTIAL HOUSE IN HIS NAME AND SPOUSE APPELLANT DOES NOT HAVE ANY SHOP, GODOWN ON RENTAL BASIS ALSO THE APPELLANT IS HAVING JOINT FAMILY AND RESIDING WITH HIS PARENTS. HIS FAMILY BELONGS TO THE FARMER AND HAVING PARENTAL AGRICULTU RE INCOME. THE APPELLANT DOES NOT HAVE ANY INVESTMENT. APPELLANT H AS ALREADY SOLD THE CAR AND MOTORCYCLE DUE TO FINANCIAL CRISIS THE APPELLAN T HAS PURCHASED MOTORCYCLE IN A.Y. 2012-2013 ON FINANCE BASIS THE L IC POLICY OF APPELLANT ALREADY FORFEITED AFTER PAYMENT OF 1 ST INSTALLMENT. HOPE, THE ABOVE SUBMISSIONS WILL BE FOUND IN ORDER AND NECESSARY RELIEF AS REQUESTED MAYBE GRANTED TO THE APPELLANT' 4. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE DELETED THE ADDITION BY OBSERVING IN PARA 3.3 OF TH E IMPUGNED ORDER WHICH READS AS UNDER:- 3.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT ALONG WITH THE FINDINGS OF THE A O, GIVEN IN THE ASSESSMENT ORDER UNDER APPEAL. FROM THE ORDER OF THE AO. IT IS SEEN THAT THE APPELLANT IS WORKING AS AN AGENT BETWEEN THE PARTIES WHO IS COMING FOR PURCHASE OF MARBLE SL ABS AND TILES AND THE SMALL MARBLE TRADERS OF RAJASMAND AND HE IS EARNING COMMISSION INCOME FROM SUCH PURCHASES AND SALES OF MARBLE SLABS AND S UCH COMMISSION INCOME HAS BEEN DECLARED IN THE RETURN FILED. FROM THE SU BMISSION AS WELL AS FROM THE ASSESSMENT ORDER IT APPEARS THAT THE APPELLANT HAS ACTED NOT ONLY AS A COMMISSION AGENT BUT HE HAS ALSO HELPED THE PURCHAS ER TO PURCHASE THE MARBLE IN CREDIT AND LATER ON THE PURCHASER DEPOSIT ED THE ENTIRE AMOUNT OF PURCHASE IN THE BANK ACCOUNT OF THE APPELLANT AND O N CREDIT OF SUCH AMOUNT IN THE BANK, THE APPELLANT WITHDRAW THE SAME AND MA KE THE PAYMENTS TO THE 6 PARTIES FROM WHOM THE MARBLES WERE PURCHASED. THIS FACT HAS BEEN PROVED BY THE ENQUIRIES ITSELF CONDUCTED BY THE A.O. IN TH E CASE OF AMBICA MARBLE, SADARI AND M/S.MAJISA MARBLE BALOTRA. LN BOTH THE C ASES, BOTH THE PARTIES HAVE CONFIRMED THE PURCHASE OF MARBLE THROUGH THE A PPELLANT AND DEPOSIT OF THE PURCHASE PRICE IN THE ACCOUNT OF THE APPELLANT AND THE A.0. HAS ACCEPTED THE DEPOSIT AS GENUINE WHILE CALCULATING THE UNDISC LOSED CASH DEPOSIT IN THE BANK ACCOUNT OF THE APPELLANT. FURTHER, THE CONTEN TION OF THE APPELLANT THAT THE DEPOSITS MADE OUTSIDE THE DISTRICT OF RAJASMAND PERTAINS TO THE PURCHASE OF THE MARBLE BY THE PARTIES WHO PURCHASED THE MARB LE THROUGH THE APPELLANT IS VERIFIABLE FROM THE BANK STATEMENT AS OUT OF THE DEPOSITS MADE OUTSIDE THE CITY, THE BANK HAS CHARGED INTERCITY CHARGES OF RS. 25/- FOR EVERY DEPOSITS. SIMILARLY, THE CONTENTION OF THE APPELLANT THAT HE HAS WITHDRAWN THE AMOUNT AFTER TWO-THREE DAYS FROM ITS DEPOSIT IN HIS BANK A CCOUNT FOR MAKING THE PAYMENTS TO THE PARTIES FROM WHOM SUCH PURCHASES WE RE MADE THROUGH THE APPELLANT IS ALSO VERIFIABLE FROM THE BANK STATEMEN TS FILED WITH THE WRITTEN SUBMISSIONS , FOR EXAMPLE , THERE IS A DEPOSIT OF R S.40,000/- ON 09.08.09 AND THE ASSESSEE HAS WITHDRAWN AN AMOUNT OF RS.38,000/- ON THE SAME DATE. SIMILARLY, OUT OF THE AMOUNT OF RS.18,000/- DEPOSIT ED ON 26.08.2008, THE APPELLANT HAS WITHDRAWN SUM OF RS.15,000/- ON THE S AME DATE. LN BOTH THE TRANSACTION, THE BANK HAS CHARGED INTERCITY TRANSAC TION OF RS.25/- . FURTHER, THE LD. A 0 HAS NOT BROUGHT ANY MATERIAL O N RECORD TO SUGGEST THAT THE APPELLANT HAS ALSO DONE THE PURCHASE AND SALE O F MARBLE SLABS AND TILES AND THE DEPOSITS APPEARING IN THE BANK ACCOUNT OF T HE APPELLANT MENTIONED ABOVE IS THE SALE PROCEEDS OF SUCH MARBLES. IT IS ALSO NOT A CASE OF THE LD. AO THAT THE APPELLANT IS MAINTAINING GODOWN FOR KEEPIN G THE MARBLE SLABS/TILES AND HE HAS DONE THE BUSINESS FROM SUCH GODOWN/FACTO RY. THE APPELLANT IS BEING ASSESSED AS COMMISSION AGENT FROM THE ASSESSM ENT YEAR 2005-06 AND THERE IS NOTHING ON RECORD TO SUGGEST THAT THERE IS A CHANGE IN THE BUSINESS ACTIVITIES OF THE APPELLANT DURING THE YEAR UNDER A PPEAL AND THE APPELLANT HAS GOT DEPOSITED THE SALE PROCEEDS OUTSIDE THE CITY IN HIS BANK ACCOUNT THROUGH OTHER PERSONS. AFTER CONSIDERING ALL THE FACTS AND THE TOTALITY OF THE CASE AS DISCUSSED ABOVE, THE ADDITION MADE BY THE LD A.0 AMOUNTING TO RS.12, 46,585/- ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK ACCOUNT DESERVES TO BE DELETED AND I ORDER ACCORDINGLY. LN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED. 7 NOW THE DEPARTMENT IS IN APPEAL. 5. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 05/12/2011 WHILE THE LEARNED COUNSEL FOR THE ASSESS EE IN HIS RIVAL SUBMISSIONS, REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND STRONGLY SUPPORTED THE IMPUGNED ORDER. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS ACTING NOT ONLY AS A COMMISSION AGENT, BUT HE HAD ALSO HELPED THE PURCHA SER TO PURCHASE THE MARBLE ON CREDIT. LATER ON, THE PURCHASER DEPOSITE D THE ENTIRE AMOUNT OF PURCHASE IN THE BANK ACCOUNT OF THE ASSESSEE, OU T OF THE CREDIT BALANCE IN THE BANK ACCOUNT, THE ASSESSEE WITHDREW AND MADE THE PAYMENTS TO THE PARTIES FROM WHOM THE MARBLES WERE PURCHASED ON BEHALF OF THE 3 RD PARTIES. THE SAID FACT WAS PROVED ON THE ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER IN THE CASE OF M/S. AMBICA MARBLE , SADARI AND M/S. MAJISA MARBLE BALOTRA. IN THE PRESENT CASE, THE LD . CIT(A) CATEGORICALLY STATED THAT THE ASSESSING OFFICER HAD NOT BROUGHT A NY MATERIAL ON RECORD TO SUGGEST THAT THE ASSESSEE HAD ALSO DONE THE PURC HASE & SALE OF MARBLE 8 SLABS & TILES AND THE DEPOSITS APPEARING IN THE BAN K ACCOUNT OF THE ASSESSEE WERE THE SALE PROCEEDS OF SUCH MARBLE AND THAT IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE WAS MAINTAINING GODOWN, KEEPING THE MARBLE SLABS/TILES AND HE HAD DONE BUSI NESS FROM SUCH A GODOWN/FACTORY. THE ABOVE SAID OBSERVATION OF THE LD. CIT(A) HAD NOT BEEN REBUTTED, THEREFORE, THE DEPOSITS IN THE BANK ACCOUNT BY THE PARTIES ON WHOSE BEHALF THE ASSESSEE WAS ACTING AS AN AGENT , WERE NOT SALE PROCEEDS OF THE ASSESSEE AND OUT OF THOSE DEPOSITS, PAYMENTS WERE MADE TO THE PARTIES FROM WHOM THE MARBLE/TILES WERE PURC HASED BY THE PARTIES THROUGH THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED AND THE LD. CIT(A) RIGHTY DELETED THE SAME. WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CI T(A) ON THIS ISSUE. 7 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 25 TH JULY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH JULY, 2014. VR/- COPY TO: 9 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY, ITAT, JODHPUR.