Pradeep Kumar Moharana, Bhubaneswar V. ITO, Ward-5(2), Bhubaneswar

ITA 5/CTK/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8513 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 04-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH SHIVA NANDA
• Assessee Lawyers: P K MISHRA
• Keywords: Set aside
• Section: 201; 13

Judgement Text

P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO . 05 /CTK/20 18 ASSESSMENT YEAR : 201 4 - 15 SRI PRADEEP KUMAR MOHARANA, PLLOT NO.N - 6/86, IRC VILLAGE, NAYAPALI, BHUBANESWAR. VS. ITO, WARD 5(2), BHUBANESWAR. PAN/GIR NO. AJZPM 4806 G (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.MISHRA, AR REVENUE BY : SHRI SURESH SHIVA NANDA , DR DATE OF HEARING : 2 9 / 0 6 / 20 20 DATE OF PRONOUNCEMENT : 13 / 0 7 /20 20 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2 , BHUBANESWAR DATED 4.10.2017 FOR THE ASSESSMENT YEAR 2014 - 15 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN TREATING ALL THE CREDITS IN MY BANK ACCOUNTS AS DEPOSITS. 2. THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) TREATMENT OF RS.29,66, 956/ - (RS. 123,62,653 - RS.93,95,695) AS UNDISCLOSED TURNOVER OF MY BUSINESS IS NOT CORRECT AS IT INCLUDES CERTAIN CREDITS BY BANK NOT AMOUNTING TO MY INCOME/ TURNOVER. 3. THE ADDITION OF RS.4,35,496 AS UNDISCLOSED PROFIT AFTER APPLYING THE GROSS PROFIT MARGIN OF 14.70% IS ERRONEOUS AND NOT JUSTIFIED ITA NO.05/CTK/2018 ASSESSMENT YEAR : 2014 - 15 P A G E 2 | 5 CONSIDERING THE THEN PREVAILING CIRCUMSTANCES IN THE BUSINESS OF A USED VEHICLE DEALER AND THE PROFIT MARGIN FROM SIMILAR BUSINESS. 4. THE APPELLANT PRAYS THAT THE ADDITION OF RS.4,35,496 MADE ARISING OUT OF THE DIFFERENTIAL CREDITS OF RS.29,66,956 IN THE BANK ACCOUNTS BY TREATING IT AS UNDISCLOSED TURNOVER BE DELETED. 3. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER PICKED UP THE DIFFERENCE BETWEEN THE TOTAL DEPOSITS TO THE BANK ACCOUNT OF THE ASSESSEE AND GROSS RECEIPTS SHOWN BY THE ASSESSEE AS PER RETURN OF INCOME AND MADE ADDITION TREATING THE DIFFEREN TIAL AMOUNT OF UNDISCLOSED GROSS RECEIPTS OF RS.99,66,958/ - AND CALCULATED THE PROFIT AT RS.56,81,166/ - IN ADDITION TO THE RETURNED INCOME OF THE ASSESSEE. LD COUNSEL FURTHER EXPLAINED THAT DURING FIRST APPELLATE PROCEEDINGS, THE ASSESSEE COULD NOT EXPLAI N THE SOURCE OF DEPOSITS AND ONLY DISPUTED THE AMOUNT OF RS.29,66,956/ - CONSIDERING THE SAME AS UNDISCLOSED TURNOVER REDUCING THE ADDITION BY THE AO. LD COUNSEL SUBMITTED THAT THE LD CIT(A) HAS TREATED THE SAID AMOUNT OF RS.29,66,956/ - AS UNDISCLOSED TURN OVER OF THE ASSESSEE AND CALCULATED THE NET PROFIT @ 14.70% AS SHOWN BY THE ASSESSEE ON THE OTHER GROSS RECEIPTS AS PER BOOKS OF ACCOUNT. EXPLAINING THE ABOVE FACTS, LD COUNSEL SUBMITTED THAT NEITHER BEFORE THE AO NOR BEFORE THE LD CIT(A), THE ASSESSEE WA S ALLOWED TO EXPLAIN SOME AMOUNTS, WHICH WERE NOT THE ACTUAL TURNOVER OF THE ASSESSEE BUT THE SAME WERE RETURNED TO THE RESPECTIVE PARTIES WHEN THE ASSESSEE COULD NOT PROCURE OR MAKE AVAILABLE VEHICLES ON THEIR CHOICE AND ADVANCE AMOUNT GIVEN BY THESE PART IES WERE RETURNED TO ITA NO.05/CTK/2018 ASSESSMENT YEAR : 2014 - 15 P A G E 3 | 5 THE RESPECTIVE CUSTOMERS. LD COUNSEL ALSO SUBMITTED THAT FOR THE IMPUGNED AMOUNT OF RS.29,66,956/ - , THERE WAS AN AMOUNT OF ADVANCE OF RS.5,20,000/ - RECEIVED IN CASH ON 24.3.2013 AND REDEPOSITED ON 4.1.2014 OF RS.10,000/ - , INTEREST FR OM SAVING BANK OF RS.14,655/ - , LIC MATURITY OF RS.50,000/ - RECEIVED ON 8.6.2013, BANK REVERSAL ENTRIES OF RS.1,64,500/ - , SALE OF OLD/USED CARS OF RS.93,95,695/ - AND AMOUNT RECEIVED FOR CAR DENTING, ROAD TAX, INSURANCE, ETC OF RS.5,64,703/ - AND EXCEPT THE A MOUNT ON SALE OF OLD/USED CAR, OTHER AMOUNT IS CLEARLY EXPLAINABLE AND THUS, CANNOT BE TREATED AS UNDISCLOSED TURNOVER OF THE ASSESSEE FOR MAKING ANY ADDITION IN THE HANDS OF THE ASSESSEE AS NET PROFIT OF 14.70% . TO SUPPORT THIS CONTENTION, LD A.R. ALSO S UBMITTED COPY OF THE IMPUGNED BANK ACCOUNT AND CONTENDED THAT THIS STATEMENT WAS ALSO SUBMITTED BEFORE THE AUTHORITIES BELOW AND SAME WAS NOT CONSIDERED BY THEM IN RIGHT PERSPECTIVE. HE SUBMITTED THAT THE ASSESSMENT AND IMPUGNED ORDER WAS MADE IN A HASTY MANNER AND, THEREFORE, GREAT PREJUDICE HAS BEEN CAUSED TO THE ASSESSEE, WHO IS A SMALL SECOND HAND CAR BROKER/DEALER. 4. REPLYING TO ABOVE, LD DR STRONGLY SUPPORTED THE ASSESSMENT ORDER AND IMPUGNED ORDER AND SUBMITTED THAT THERE WAS A DIFFERENCE BETWEEN TURNOVER / GROSS RECEIPTS SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME AND GROSS RECEIPTS REFLECTED IN THE BANK STATEMENT OF THE ASSESSEE AND, THEREFORE, THE AO WAS RIGHT IN MAKING ADDITION AND LD CIT(A) WAS JUSTIFIED IN ITA NO.05/CTK/2018 ASSESSMENT YEAR : 2014 - 15 P A G E 4 | 5 CONFIRMING THE SAME BY TAKING A V ERY BALANCE AND JUSTIFIED APPROACH AND REDUCED THE ADDITION TO THE EXTENT OF RS.29,66,956/ - GRANTING HUGE RELIEF TO THE ASSESSEE. LD D.R. SUBMITTED THAT THERE IS NO SCOPE OF GRANTING ANY FURTHER RELIEF TO THE ASSESSEE. THEREFORE, THE APPEAL OF THE ASSESSEE M AY BE DISMISSED. HOWEVER, IN ALL FAIRNESS, HE SUBMITTED THAT FROM THE COPY OF BANK STATEMENT OF THE ASSESSEE, SOME AMOUNTS DO NOT FORM PART OF UNDISCLOSED TURNOVER OF THE ASSESSEE. THEREFORE, THE REVENUE HAS NO SERIOUS OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE AO FOR LIMITED PURPOSES FOR EXAMINATION AND VERIFICATION OF THE CONTENTION OF THE ASSESSEE. 5. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS AND ON PERUSAL OF BANK STATEMENT OF THE ASSESSEE, I OBSERVE THAT SOME AMOUNTS DO NOT FORM PART OF THE UNDISCLOSED TURNOVER OF THE ASSESSEE, WHICH HAS BEEN CONSIDERED BY THE AO. LD D.R. HAS AGREED TO THE SAME. IN VIEW OF ABOVE, I SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND RESTORE THE ISSUE TO THE FILE OF THE AO FOR LIMITED PURPOSES OF V ERIFICATION AND EXAMINATION OF THE BANK STATEMENTS. IF HE FINDS THAT SOME AMOUNTS DO NOT FORM UNDISCLOSED INCOME OF THE ASSESSEE, THEN, HE WILL CONSIDER THE SAME WHILE COMPUTING THE UNDISCLOSED INCOME OF THE ASSESSEE. WITH THESE DIRECTIONS, THE APPEAL IS RESTORED TO THE FILE OF THE AO. ITA NO.05/CTK/2018 ASSESSMENT YEAR : 2014 - 15 P A G E 5 | 5 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 13 / 0 7 /20 20 . SD/ - ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 13 / 0 7 /20 20 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : SRI PRADEEP KUMAR MOHARANA, PLLOT NO.N - 6/86, IRC VILLAGE, NAYAPALI, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 5(2), BHUBANESWAR. 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//