Sri.M.Vineesh, Calicut V. The ITO, Cochin

ITA 477/COCH/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96711 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 15-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-11-2014
• Court: TRIBUNAL
• Department Lawyers: V R GOPAKUMAR
• Assessee Lawyers: ROSIE ATHULYA JOSEPH
• Keywords: Opportunity of cross examination; Deemed to accrue or arise in india; Reasonable cause; Difference of opinion; Condonation of delay
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO.477/COCH/2014 ASSESSMENT YEAR : 2005-06 SHRI M.VINEESH, MEKKUNNATH HOUSE, RIVER VIEW, CHALAPPURAM P.O., CALICUT-673 002. [PAN:ALLPM 6363Q] VS. THE INCOME TAX OFFICER, WARD- 1(2), KOZHIKODE. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY MS. ROSIE ATHULYA JOSEPH, REVENUE BY SHRI V.R. GOPAKUMAR, SR. DR DATE OF HEARING 15/09/2015 DATE OF PRONOUNCEMENT 16/09/2015 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), KOZHIKODE DATED 09/01/2014 FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APP EALS) TO THE EXTENT OBJECTED HEREUNDER IS ABSOLUTELY ILLEGAL, ARBITRARY AND UNAUTHORIZED. 2. THE OFFICERS BELOW FAILED TO APPRECIATE THAT TH IS TRANSACTION IS IN FACT, TRANSACTION OF THE FIRM AND THAT RETURNS OF INCOME OF THE FIRM HAS NOT FILED DUE TO THE DIFFERENCE OF OPINION BETWEEN THE PARTNERS. IT IS I.T.A. NO.477/COCH/2014 2 PERTINENT TO NOTE THAT THE ENTIRE ACCOUNTS ARE BEIN G HANDLED BY THE APPELLANT IN HIS CAPACITY AS MANAGING PARTNER OF TH E FIRM. 3. THE AUTHORITY BELOW FAILED TO APPRECIATE THE C ONTENTION THAT HAD THE FIRM FILED ITS RETURN OF INCOME, THE CORRECT POSITI ON COULD HAVE BEEN EMERGED. 4. THE AUTHORITY BELOW WENT WRONG IN REJECTING TH E BALANCE SHEET AND P&L ACCOUNT DRAWN UP ON THE FIRM ON THE PREMISE THA T THE OTHER PARTNERS HAVE REJECTED THE SAID P&L ACCOUNT. IT IS SUBMITTED THAT NO OPPORTUNITY OF CROSS EXAMINATION OF THE OTHER PARTN ERS AFFORDED TO THE APPELLANT. THE DEBIT SIDE OF THE ACCOUNT HAS NOT BE EN CONSIDERED AS THE ENTIRE PAYMENTS WERE MADE TOWARDS THE CONDUCT OF BU SINESS. 5. THE AUTHORITY WENT WRONG IN RELYING ON THE STA TEMENTS OF THE OTHER PARTNERS ABOUT THE NON-REFLECTION OF SB ACCOUNT OF ANDHRA BANK IN THEIR ACCOUNT. IT IS PERTINENT TO NOTE THAT THE SAID SB ACCOUNT IS VERY CRUCIAL TO THE BUSINESS OF THE FIRM AND THAT THE CASH COLLE CTED FROM THE CUSTOMERS, REFERRED IN PARA 3 AND 4, ARE DEPOSITED BY THE SUB DEALER IN ANY OF THE THREE BANK ACCOUNTS, INCLUDING SB ACCOUN T AT ANDHRA BANK MAINTAINED BY THE SUB DEALERS. THUS THE AUTHORITY OUGHT TO HAVE VERIFIED THE VERACITY OF THE STATEMENTS MADE BY THE OTHER PARTNERS BEFORE DECIDING AGAINST THE APPELLANT. 3. THERE WAS A DELAY OF 44 DAYS IN FILING THE APPEA L BY THE ASSESSEE BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED A PETITION SEEKI NG CONDONATION OF DELAY AND ALSO HAS FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE DUE DATE. THE LD. AR SUBMITTED THAT THE ASSESSMENT WAS COMPLETED AND CONFIRMED TO THE EXTENT OBJECTED IN T HE APPEAL MEMORANDUM. THE LD. AR SUBMITTED THAT THE ORIGINALS OF THE IMPUGNED ORDER WAS SERVED ON 1.8.2014 AND THE APPEAL, THEREFORE, OUGHT TO HAVE BEEN FILED ON OR BEFORE 1.10.2014. THE LD. AR SUBMITTED THAT THE ASSESSEE WAS EMPLOYED AT LUCK NOW AND SO HE COULD NOT FILE THE APPEAL IN TIME WHICH RESULTED IN DELAY OF FILING TH E APPEAL. THE LD. AR SUBMITTED THAT I.T.A. NO.477/COCH/2014 3 THE DELAY WAS OCCASIONED DUE TO THE REASONS BEYOND THE CONTROL OF THE ASSESSEE AND THE ASSESSEE HAS A GOOD CASE TO SUCCEED IN APPEAL. THEREFORE, THE LD. AR PRAYED THAT THE TRIBUNAL MAY CONDONE THE DELAY OF 44 DAYS IN FILING THE APPEAL AS IT WOULD CAUSE IRREPARABLE INJURY, LOSS AND HARDSHIP TO THE ASSESSEE. ACCORDINGLY, THE LD. AR PLEADED THAT THE APPEAL MAY BE ACCEPTED AND ADJUDIC ATED. 4. THE LD. DR HAS NOT RAISED ANY SERIOUS OBJECT ION FOR CONDONATION OF DELAY IN FILING THE CROSS OBJECTION BY THE ASSESSEE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE RECORD. WE FIND THAT THERE EXISTS REASONABLE CAUSE FOR NOT FILING THE CROSS OB JECTION IN TIME AND THE REASONS ADVANCED BY THE ASSESSEE FOR THE DELAY IN FILING TH E CROSS OBJECTION ARE BONA FIDE. BEING SO, WE CONDONE THE DELAY IN FILING THE CROSS OBJECTION BY THE ASSESSEE AND ADMIT THE CROSS OBJECTION FOR ADJUDICATION. 6. THE BRIEF FACTS OF THE CASE ARE THAT AS PER AIR INFORMATION, THE ASSESSEE HAD MADE CASH DEPOSIT OF RS.20.56 LAKHS IN THE SAVING B ANK ACCOUNT WITH ANDHRA BANK, KALPETTA DURING THE FINANCIAL YEAR. THE ASSESSEE DID NOT FURNISH ANY DETAILS OF THE SAID CASH DEPOSIT. ACCORDINGLY, THE ASSESSEE WAS S HOW CAUSED AS TO WHY HIS ASSESSMENT SHOULD NOT BE COMPLETED U/S. 144 OF THE ACT. THE ASSESSEE VIDE LETTER DATED 29/09/2008 STATED THAT HE WAS ONE OF THE PART NERS OF THE FIRM M/S. CITY MOBIKES, KALPETTA AND THE AMOUNT OF RS.20.56 LAKHS WAS ENTIRELY THE BUSINESS I.T.A. NO.477/COCH/2014 4 TRANSACTION OF THE FIRM UNDERTAKEN THROUGH HIS SAVI NG BANK ACCOUNT WITH ANDHRA BANK. HE FURTHER STATED THAT THERE WAS DISPUTE AMO NGST PARTNERS AND THE RETURN OF INCOME OF THE FIRM COULD NOT BE FILED IN TIME. THE ASSESSEE FURNISHED A COPY OF THE PARTNERSHIP DEED OF THE FIRM M/S. CITY MOBIKES. IT WAS OBSERVED BY THE AO THAT SAVING BANK ACCOUNT OF THE FIRM HAS TO BE OPENED BY ALL THE PARTNERS, JOINTLY, AND OPERATED UPON BY JOINT SIGNATURE OF ANY ONE OF THE THREE PARTNERS AND FOURTH PARTNER, SHRI VINEESH, THE ASSESSEE. THE SAID SB ACCOUNT WA S NOT OPENED IN ACCORDANCE WITH THE PARTNERSHIP DEED. THE ASSESSEE WAS ASKED TO PRO DUCE EVIDENCE FOR THIS STATEMENT THAT THE TRANSACTIONS DONE THROUGH HIS SB ACCOUNT B ELONGED TO THE FIRM M/S. CITY MOBIKES AND THE SOURCE FOR THE SAME. NOTHING WAS F URNISHED BY THE ASSESSEE EXCEPT ONE RESOLUTION IN THE MEETING OF THE PARTNERS OF TH E FIRM. NO EVIDENCE WAS PRODUCED THAT THE RESOLUTION WAS PASSED BY THE PARTNERS OF T HE FIRM. NO EVIDENCE WAS PRODUCED THAT THE CASH DEPOSIT IN SB ACCOUNT OF THE ASSESSEE BELONGED TO THE FIRM, M/S. CITY MOBIKES THE SB ACCOUNT OF ANDHRA BANK WAS SHOWN ON THE ASSET SIDE OF THE BALANCE SHEET OF THE FIRM M/S. CITY MOBIKES WHICH WAS NOT E VEN SIGNED BY ANY OF THE PARTNERS. THE ASSESSING OFFICER ALSO ASKED THE FIRM M/S. CITY MOBIKES TO CONFIRM WHETHER THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET FURNISHED B Y THE ASSESSEE ARE THE REAL PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THE DISSOLVED F IRM. IT WAS CONFIRMED BY THE FIRM THAT THE SAID BANK ACCOUNT WITH ANDHRA BANK, KALPET TA DOES NOT BELONG TO THE FIRM AND THE TRANSACTIONS MADE IN THE SB ACCOUNT OF SHRI VINEESH ARE NOT REFLECTED IN THE ACCOUNTS OF THE FIRM M/S. CITY MOBIKES, KALPETTA. T HE ASSESSING OFFICER OBSERVED THAT THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT AS ON 3 1 ST MARCH, 2005 FURNISHED BY THE I.T.A. NO.477/COCH/2014 5 ASSESSEE DID NOT BELONG TO THE FIRM, M/S. CITY MOBI KES FOR THE YEAR ENDING 31-03- 2005. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER TREATED THE SAID SUM OF RS.20.56 LAKHS AS UNEXPLAIN ED INVESTMENT OF THE ASSESSEE AND AS DEEMED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. 7. BEFORE THE CIT(A), THE ASSESSEE MADE SUBMISSION WHICH WAS SENT TO THE ASSESSING OFFICER FOR REMAND REPORT WHICH WAS SUBMI TTED. THE CIT(A), AFTER CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFI CER AND THE SUBMISSION OF THE ASSESSEE, CONFIRMED THE ACTION OF THE ASSESSING OFF ICER. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TRANSACTIONS IN THE SAVING BANK ACCOUNT WITH ANDHRA BANK, KALPETTA BELONGED TO THE FIRM AND THE ASSESSEE HAS SUBMITTED PROFIT & LOSS ACCOUNT AND BALANCE SHEET BEFORE THE ASSESSING OFFICER AND THE CIT(A). THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSET SIDE OF THE BALANCE SHEET CONTAINED THE SAVING BANK ACCOUNT WIT H ANDHRA BANK. 9. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF BOTH THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE DISPUTED FACTS OF THE CASE ARE THAT AS PER CLAUSE ( 9) OF THE PARTNERSHIP DEED, THE BANK ACCOUNT SHOULD HAVE BEEN OPENED BY ALL THE PAR TNERS JOINTLY AND SHOULD HAVE BEEN OPERATED UPON BY ANY ONE OF THE THREE PARTNERS AND THE ASSESSEE. BUT THE I.T.A. NO.477/COCH/2014 6 SAME HAS NOT BEEN DONE AND BY OPENING THE SAID SAV ING BANK ACCOUNT IN HIS PERSONAL NAME, THE ASSESSEE HAS VIOLATED CLAUSE(9) OF THE PARTNERSHIP DEED. AS REGARDS DEPOSITS IN THE SAVING BANK ACCOUNT, THE AS SESSEE HAS NOT SUBMITTED ANY EXPLANATION FOR OPENING THE ACCOUNT TO THE SATISFAC TION OF ANY OF THE AUTHORITIES BELOW, EVEN BEFORE US, EXCEPT STATING THAT THE CASH DEPOSIT BELONGED TO THE FIRM, M/S. CITY MOBIKES. TO THAT EXTENT, NO SOURCE OF SU CH DEPOSIT WAS PLACED ON RECORD BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US. AS REGARDS WITHDRAWALS FROM THE SAID SAVING BANK ACCOUNT, THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION THAT THE WITHDRAWALS HAVE BEEN UTILIZED FOR THE PURPOSE OF EXPENDITURE OR PURCHASING ANY ASSET OR ANY OTHER PAYMENT MADE TO M/S. BENZ AUTO D ISTRIBUTORS AND OTHER FIRMS. THE ASSESSING OFFICER FOUND THAT THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET SUBMITTED BY THE ASSESSEE, SHRI VINEESH DOES NOT BE LONG TO THE FIRM, M/S. CITY MOBIKES AND THE SAID TRANSACTIONS HAVE NOT BEEN INC ORPORATED IN THE BOOKS OF ACCOUNTS OF THE FIRM, M/S. CITY MOBIKES. IN THE F ACTS AND CIRCUMSTANCE OF THE CASE, THE ASSESSEE HAS FAILED TO FURNISH ANY CONVINCING E VIDENCE EITHER BEFORE BOTH THE AUTHORITIES BELOW OR EVEN BEFORE US WITH REGARD TO CASH DEPOSIT IN HIS SAVING BANK ACCOUNT WITH ANDHRA BANK, KALPETTA. ACCORDINGLY, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS RIGHTLY CONFIRMED THE A CTION OF THE ASSESSING OFFICER AND ALL THE GROUNDS OF THE ASSESSEE ARE DISMISSED. I.T.A. NO.477/COCH/2014 7 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 16-09-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 16TH SEPTEMBER, 2015 GJ COPY TO: 1. SHRI M.VINEESH, MEKKUNNATH HOUSE, RIVER VIEW, CH ALAPPURAM P.O., CALICUT-673 002. 2. THE INCOME TAX OFFICER, WARD-1(2), KOZHIKODE. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), KOZHIKO DE. 4. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN