Sri. Ashok Desing Naik, Vijayapura V. Income-Tax officer-Ward-1 & TPS, Vijayapura

ITA 48/BANG/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2997 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 07-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALAKRISHNAN N
• Section: 48; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 48 /BANG/201 9 ASSESSMENT YEAR : 20 1 5 - 1 6 SHRI ASHOK DESING NAIK, CTS NAIK PETROLEUMS, NH-13, SOLAPUR ROAD, TIDAGUNDI, VIJAYAPUR 586 101. PAN: AGHPN6964B VS. THE INCOME TAX OFFICER, WARD 1, TPS VIJAYAPUR. APPELLANT RESPONDENT APPELLANT BY : SHRI RAJEEV C NULVI, ADVOCATE RESPONDENT BY : SHRI BALAKRISHNAN .N, ADDL. CIT (DR) DATE OF HEARING : 2 1 .0 2 .2019 DATE OF PRONOUNCEMENT : 27 .0 2 .2019 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT (A), BELAGAVI DATED 29.10.2018 FOR ASSESSME NT YEAR 2015-16. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE AUTHORITIES BELOW IS AGAINST TH E FACT AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER ERRED IN MAKING THE ADDITION ON ACCOUNT OF UNEXPLAI NED CASH DEPOSITS IN THE BANK ACCOUNT AMOUNTING TO RS.31,79,134/-, AS THE APPELLANT WAS HAVING SUFFICIENT SOURCE OF INCOME TO DEPOSIT THE S AME IN THE BANK ACCOUNT . 3. WITHOUT PREJUDICE TO THE ABOVE GROUND NO.2, ON T HE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER ER RED IN MAKING THE ADDITION OF RS.31,79,134/- U/S 69A, INSTEAD OF MAKI NG THE ADDITION OF G.P AT THE RATE OF 2.89% ON UNACCOUNTED CASH DEPOSI TS AMOUNTING TO RS.18,70,883/- (RS.4,09,92,430/- MINUS RS.3,91,21,5 47/-), WHICH IS THE ACTUAL UNEXPLAINED CASH DEPOSITS. THE G.P ON THE SA ME WORKS OUT TO RS.54,068/-. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HON'BLE CIT(A) ERRED IN SUSTAINING THE ADDITION MADE BY THE ASSESS ING OFFICER WITHOUT APPRECIATING THE FACT THAT UNACCOUNTED CASH DEPOSIT S EMANATES FROM THE BUSINESS SHOULD HAVE BEEN TAXED AT A G.P RATE O F 2.89%. ITA NO. 48/BANG/2019 PAGE 2 OF 5 5. FOR THESE AND OTHER REASONS WHICH MAY BE ADDUCED AT THE TIME OF HEARING, THIS HON'BLE BENCH IS REQUESTED TO DELETE THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSIT IN THE BANK OR PASS SUCH OTHER ORDER AS THIS HON'BLE BENCH MAY DEE M FIT. 6. THE APPELLANT CRAVES LEAVES, TO ADD, TO ALTER, T O AMEND AND TO DELETE ANY OTHER GROUNDS AT THE TIME OF HEARING. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS P ER THE ASSESSMENT ORDER, THE AO SAYS THAT THERE WERE CASH DEPOSIT IN BANK TO THE EXTENT OF RS. 4,23,00,681/- INCLUDING CASH DEPOSIT IN IDBI BANK, VIJAYAPUR OF RS. 1,94,56,681/- AND STATE BANK OF INDIA, KANNUR OF RS . 2,28,44,000/-. THEREAFTER HE SUBMITTED THAT THE AO HAS ALLOWED BEN EFIT TO THE ASSESSEE TO THE EXTENT OF SALES DISCLOSED BY THE ASSESSEE AS PE R VAT RETURNS TO THE EXTENT OF RS. 3,91,21,547/- AND MADE ADDITION IN RE SPECT OF EXCESS OF CASH DEPOSIT OVER SALES. HE SUBMITTED THAT THERE ARE TW O MISTAKES IN THE ORDER OF THE AO. HE SUBMITTED THAT THE FIRST MISTAKE IS THI S THAT THE ACTUAL CASH DEPOSIT BY THE ASSESSEE IN THE BANK ACCOUNT WITH ID BI BANK NOTED BY THE AO AT RS. 1,94,56,681/- IS INCORRECT. HE SUBMITTED THAT ASSESSEE HAS DEPOSITED ONLY RS. 1,81,48,430/- WITH IDBI AS AGAIN ST THE AMOUNT NOTED BY THE AO OF RS. 1,94,56,681/-. IN THIS REGARD, HE SU BMITTED THE COPY OF BANK STATEMENT OF IDBI BANK AND DATE WISE CHART OF CASH DEPOSIT IN IDBI BANK TOTAL OF RS. 1,81,48,430/-. 4. REGARDING THE SECOND MISTAKE HE SUBMITTED THAT I N ADDITION TO GRANTING BENEFIT OF SALES REPORTED BY THE ASSESSEE IN THE PR ESENT YEAR, THE AO SHOULD ALSO HAVE CONSIDERED THE OPENING CASH BALANCE. HE SUBMITTED THAT THE BALANCE SHEET OF THE ASSESSEE FOR THE PRECEDING YEA R I.E. YEAR ENDING AS ON 31.03.2014 IS AVAILABLE ON PAGE NO. 3 OF THE PAPER BOOK AND AS PER THE SAME, THERE IS CLOSING CASH BALANCE AS ON 31.03.201 4 OF RS. 38,58,600/-. AT THIS JUNCTURE, THE BENCH WANTED TO KNOW REGARDIN G THE CLOSING CASH BALANCE AS ON 31.03.2015. HE SUBMITTED A COPY OF B ALANCE SHEET AS ON 31.03.2015 AND POINTED OUT THAT AS PER THE SAME, TH E ASSESSEE HAS CLOSING CASH IN HAND OF RS. 13,00,087/- AS ON 31.03.2015. HE SUBMITTED THAT THE EXCESS OF OPENING CASH IN HAND AS ON 01.04.2014 RS. 38,58,600/- OVER CLOSING CASH IN HAND AS ON 31.03.2015 RS. 13,00,087 /- COMES TO RS. ITA NO. 48/BANG/2019 PAGE 3 OF 5 25,58,513/- AND IT SHOULD ALSO BE CONSIDERED AS CAS H AVAILABLE FOR DEPOSIT IN BANK ACCOUNT. HE SUBMITTED THAT IF BOTH THESE MIST AKES ARE TAKEN INTO ACCOUNT THEN NO ADDITION IS CALLED FOR ON THIS ACCO UNT. 5. AS AGAINST THIS THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. HE ALSO SUBMITTED THAT AS PER PARA 9 OF THE ASSESSMENT ORDER, THERE IS CASH DEPOSIT OF RS. 1,94,56,681/- WITH IDBI BANK AND THEREFORE, ASSESSEES CLAIM THAT DEPOSIT IN IDBI BANK IS ONLY RS. 1,81,48,430/- AS AGAINST AMOUNT OF SUCH CASH DEPOSIT NOTED BY THE AO IN PARA 9 OF THE ASSESSMENT ORDER OF RS. 1,94,56,681/- SHOULD NOT BE ACCEPTED. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THE DATE WISE DEPOSIT CHART IN THIS BANK IS AVAILABLE ON PAGES 5 TO 11 OF PAPER BOOK. WHEN THE SAME IS COMPARED WITH THE BANK STATEMENT SUBMITTED BY LD. AR OF ASSESSEE, IT IS FOUND THAT ON FOLLOWING 18 DATES TH ERE IS DEPOSIT IN BANK ACCOUNT BUT THESE DEPOSITS ARE NOT CASH DEPOSIT BUT TRANSFER OR CLEARING. DATE AMO UNT 1 02.04.2014 14,983 2 06.04.2014 37,000 3 24.05.2014 8,000 4 16.06.2014 6,000 5 26.06.2014 7,000 6 19.07.2014 12,564 7 09.09.2014 12,686 8 15.09.2014 12,686 9 29.09.2014 10,00,000 10 26.11.2014 3,500 11 06.12.2014 2,500 12 19.12.2014 8,785 13 26.12.2014 1,51,000 14 27.12.2014 4,500 15 16.01.2015 6,700 16 28.01.2015 10,057 17 12.02.2015 4,500 18 05.03.2015 5,790 13,08,251 ASSESSEE 1,81,48,430 ITA NO. 48/BANG/2019 PAGE 4 OF 5 AO 1,94,56,681 SBI 2,28,44,000 TOTAL CASH DEPOSIT 4,09,92,430 SALES 3,91,21,547 EXCESS CASH DEPOSIT 18,70,883 EXCESS OF OPENING CASH 25,58,513 7. THE TOTAL AMOUNT OF THESE CASH DEPOSIT IS RS. 13 ,08,251/-. WHEN THIS AMOUNT IS ADDED TO THE TOTAL CASH DEPOSIT AS PER AS SESSEE OF RS. 1,81,48,430/- THEN THE SAME TALLY WITH TOTAL CASH D EPOSIT AS PER AO RECORDED BY HIM IN PARA 9 OF THE ASSESSMENT ORDER OF RS. 1,9 4,56,681/-. IN VIEW OF THIS, I FEEL THAT THE TOTAL CASH DEPOSIT IN IDBI BA NK SHOULD BE CONSIDERED AT RS. 1,81,48,430/- AND NOT AT RS. 1,94,56,681/- AS S TATED BY THE AO IN PARA 9 OF THE ASSESSMENT ORDER. IF WE ADD THE TOTAL AMOUN T OF CASH DEPOSIT IN SBI OF RS. 2,28,44,000/-, THEN THE TOTAL CASH DEPOSIT C OMES TO RS. 4,09,92,430/- AS WORKED OUT BY THE ASSESSEE ON PAGE NO. 7 OF THE PAPER BOOK BEING WRITTEN STATEMENT. OUT OF THIS CASH DEPOSIT, THE A O HAS ACCEPTED THAT AN AMOUNT OF CASH DEPOSIT OF RS. 3,91,21,547/- STANDS EXPLAINED BEING THE AMOUNT OF SALE SHOWN BY THE ASSESSEE IN VAT RETURNS . IF WE REDUCE THIS AMOUNT OF ACCEPTED CASH DEPOSIT FROM TOTAL CASH DEP OSIT, BALANCE COMES TO RS. 18,70,883/- BEING EXCESS OF CASH DEPOSIT OVER C ASH SALES. NOW, WE CONSIDER EXCESS OF CASH IN HAND AS ON 31.03.2014 OF RS. 38,58,600/- OVER CLOSING CASH IN HAND AS ON 31.03.2015 OF RS. 13,00, 087/-, IT IS SEEN THAT THE SAID AMOUNT COMES TO RS. 25,58,513/- AS AGAINST EXC ESS CASH DEPOSIT OF RS. 18,70,883/- IN EXCESS OF SALES AS PER VAT RETUR NS. THEREFORE NO AMOUNT OF CASH DEPOSIT CAN BE ADDED AS UNEXPLAINED CASH DEPOSIT. I THEREFORE, DELETE THE ENTIRE ADDITION MADE BY THE A O ON THIS ACCOUNT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE ME NTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 27 TH FEBRUARY, 2019. /MS/ ITA NO. 48/BANG/2019 PAGE 5 OF 5 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGAL ORE.