Shri. Jarnail Singh Ghotra, Nagpur V. Income Tax Officer Ward -5(3), Nagpur

ITA 5/NAG/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9616 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH DAWANT E
• Assessee Lawyers: J S BHATTI
• Keywords: Unexplained investment; Source of fund
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D. T. GARASIA, HONBLE JUDICIAL MEMBER I.T.A. NO .05 / NAG /1 1 ASSESSMENT YEAR: 2006 - 2007 SHRI JARNAIL SINGH GHOTRA, VS. INCOME TAX OFFICER, C/O T. S. RAWAL & CO., WARD - 5(3), E - 13 - 18, ANJUMAN COMPLAX, NAGPUR. SADAR, NAGPUR. PAN:AFHPG8160P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J. S. BHATTI, ADVOCATE RESPONDENT BY : SHRI RAMESH DAWANTE, SR. D. R. DAT E OF HEARING :01/10/2012 DATE OF PRONOUNCEMENT : 23/11/2012 ORDER PER P. K. BANSAL: THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF CIT(A) BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. THAT THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE BY NOT GRANTING RELIEF AMOUNTING TO RS.20,35,702/ - U/S 69 OF THE APPELLANT. 3. THAT THE LEARNED CIT(A) ERRED IN LAW AN D ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN ESTIMATING TURNOVER FROM TRUCKS AT RS.12,00,000/ - IGNORING THE PROVISIONS OF SECTION 44AE. 4. THAT THE LEARNED CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE APPELLANT HAS NOT AT TEMPTED TO EXPLAIN THE CASH CREDITS IN THE BANK ACCOUNT I.T.A. NO. 05/NAG/2011 2 WHEREAS HE HAS SUBMITTED THE NET WEALTH STATEMENT FOR THE YEAR ENDED 31/12/2003, 31/12/2004, 31/03/2005 AND 31/03/2006, WHEREAS IT HAS BEEN PROVED THAT THE ASSESSEE DID NOT CARRY ON ANY OTHER BUSINESS ACTIVITY, NOR HAS DERIVED INCOME FROM ANY OTHER SOURCES OF INCOME, NOR MADE ANY OTHER INVESTMENTS OTHER THAN EXPLAINED IN THE RETURN OF INCOME. 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN DECLARING INCOME OF RS.1,04,513/ - WAS FILED. THE ASSESSEE W AS OWNING TWO TRUCKS; ONE TRUCK THROUGHOUT THE YEAR WHILE THE OTHER ONE FOR THREE MONTHS , T HEREFORE, THE PROVISIONS OF SECTION 44AE WERE APPLICABLE IN THE CASE OF THE ASSESSEE. THE ASSESSING OFFICER EXAMINED THE BANK ACCOUNT OF THE ASSESSEE AND FOUND THE FOLLOWING : NAME OF THE BANK ACCOUNT NO. TOTAL CREDITS CREDIT IN CASH ------------------------- ----------------- ----------------- -------------------- 1. PUNJAB & SINDH BANK SB 479 RS.37,80,989/ - RS.23,72,300/ - 2. JOINT ACCOUNT WITH 15856 RS. 78,210/ - SURENDRA SINGH GHOTRA WITH PNB 3. PUNJAB NATIONAL BANK 01075881 RS. 89,000/ - 2.1 WHEN THE ASSESSING OFFICER ENQUIRED ABOUT THE SOURCE OF THE DEPOSIT, THE ASSESSEE SUBMITTED THAT HIS INCOME IS ESTIMATED AS PER THE PROVISIONS OF SECTION 44AE. THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. CERTAIN TRANSACTIONS WERE ON BEHALF OF HI S BROTHER SHRI BALVINDER SINGH AND CERTAIN OTHER ON BEHALF OF SHRI MALKIT SINGH. A SUM OF RS.3,50,000/ - RECEIVED ON 26 TH JULY, 2005 WAS ON ACCOUNT OF SALE OF TRUCK OF MALKIT SINGH AS HE LIVED IN ABROAD. THE AMOUNT HAS BEEN RECEIVED IN HIS ACCOUNT FROM UM ESH JAVADIA. IT WAS ALSO STATED THAT WITHDRAWAL HAS ALSO BEEN DEPOSITED. THE ASSESSING OFFICER TOOK THE VIEW THAT THE TOTAL CREDIT OF RS.3,70,809/ - IS DISPROPORTIONATE TO THE INCOME OF THE ASSESSEE. HE CONSIDERED A SUM OF RS.12,95,287/ - TO BE THE EXPLAI NED ONE WITH REFERENCE TO THE TURNOVER OF OPENING AND CLOSING BALANCE IN THE BANK ACCOUNT AND ADDED THE BALANCE AMOUNT OF RS.24,85,702/ - U/S 69 OF THE I.T. ACT. I.T.A. NO. 05/NAG/2011 3 3. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) ALLOWED A RELIEF OF RS.4,50,00 0/ - TO THE ASSESSEE AND CONFIRMED THE BALANCE ADDITION OF RS.20,35,000/ - BY OBSERVING AS UNDER: 3.2 I HAVE GIVEN CAREFUL CONSIDERATION TO THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. I ALSO FIND THAT THE APPELLANTS CONTENTION DURING THE COURSE OF APPEAL PROCEEDINGS THAT AN AMOUNT OF RS.37,80,989/ - IS THE TOTAL TURNOVER FROM TWO TRUCKS IS ITSELF NOT CONSISTENT WITH THE EXPLANATION OFFERED AT THE TIME OF ASSESSMENT. AN AMOUNT OF RS.3,50,000/ - WAS CLAIMED TO HAVE BEEN RECEIVED ON BEHALF OF MALKITSINGH AT THE TIME OF ASSESSMENT. I ALSO FIND THAT THE ASSESSING OFFICER HAS NOT SUPPORTED HIS CLAIM THAT THE RECEIPTS ARE OUT OF SOME OTHER BUSINESS CARRIED ON BY THE ASSESSEE. IN FACT, IN PARA 8 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS DISCUSSED CERTAIN WITHDRAWALS FROM THE BANK ACCOUNT AND STATED THAT THE PURPOSE OF THESE WITHDRAWALS IS NOT EXPLAINED WITH REFERENCE TO DOCUMENTARY EVIDENCE. THE ASSESSING OFFICER HAS ALSO DISBELIEVED THE PAYMENT TO CEAT LTD. BUT H AS NOT DISCUSSED WHY THIS IS RELEVANT OR SUPPORTS HIS CONTENTION THAT THE AMOUNTS IN THE BANK ACCOUNTS ARE UNEXPLAINED INVESTMENTS. LOOKING AT THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, I FIND THAT THE ASSESSING OFFICER HAS NOT ADEQUATELY SUBSTANTIATED HIS CONTENTION THAT ASSESSEE HAS OTHER SOURCES OF INCOME. ON THE OTHER HAND, AS FAR THE APPELLANT, OTHER THAN STATING THAT BOOKS ARE NOT REQUIRED TO BE MAINTAINED HAS MADE NO ATTEMPT TO EXPLAIN THE CASH CREDITS IN THE BANK ACCOUNT. I AM, THEREFORE, OF TH E CONSIDERED VIEW THAT A REASONABLE ESTIMATION OF GROSS TURNOVER WOULD REQUIRED TO BE EXCLUDED FROM THE ADDITION MADE BY THE ASSESSING OFFICER. THE TURNOVER OF THE ASSESSEE FROM RUNNING TWO TRUCKS, CONSIDERING GROSS INVESTMENT MADE, MAY BE TREATED AS EXPL AINED. APPELLANT THEREFORE, GETS A RELIEF OF RS.4,50,000/ - AND BALANCE AMOUNT OF RS.20,35,702/ - IS TO BE TREATED AS UNEXPLAINED U/S 69 OF THE I.T. ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THE ASSESSEE WAS HAVING TWO TRUCKS AND THE PROVISIONS OF SECTION 44AE ARE APPLICABLE IN THE CASE OF THE ASSESSEE. THE INCOME HAS TO BE ASSESSED ON PRESUMPTIVE BASIS IN VIEW OF THE PROVISIONS OF SECTION 44AE. THIS I S ALSO THE FACT THAT THE ASSESSEE HAS MADE T HE DEPOSITS. THE ONLY QUESTION ARISES WHETHER THE DEPOSIT MADE BY THE ASSESSEE ARE OUT OF THE TRADE RECEIPT WHICH THE ASSESSEE GOT BY PLYING OF TWO TRUCKS. THE ASSESSING OFFICER ESTIMATED THE GROSS TURNOVER AMOUNTING TO RS.12,95,287/ - WHILE THE CIT(A) AL LOWED THE FURTHER RELIEF I.T.A. NO. 05/NAG/2011 4 OF RS.4,50,000/ - . THE ONUS U/S 69 OF THE ACT IN RESPECT OF DEPOSIT MADE IN THE BANK, LIES ON THE ASSESSEE TO PROVE ITS NATURE AND SOURCE. THE ASSESSEE HAS TO GIVE THE EVIDENCE THAT THE RECEIPTS ARE OUT OF TRADE RECEIPT, WHICH THE ASSESSEE GOT OUT OF PLYING THE TRUCKS. THE ASSESSING OFFICER PRESUMED THAT THE ASSESSEE GOT THE OTHER RECEIPTS FROM OTHER SOURCE. THE ASSESSEE TO PROVE HIS CLAIM SUBMITTED BEFORE US THE NET WEALTH STATEMENT FROM ASSESSMENT YEAR 2003 - 204 TO ASSESSMENT YE AR 2006 - 2007 SO THAT IT CAN PROVE THAT INCREASE IN THE CAPITAL IS DULY SUPPORTED BY THE INCOME WHICH THE ASSESSEE HAS RETURNED. THIS EVIDENCE, IN OUR OPINION, IS A FRESH EVIDENCE AND HAS NOT BEEN FILED AND EXAMINED BY THE AUTHORITIES BELOW. THIS EVIDENCE IS A VITAL EVIDENCE, IN OUR OPINION, TO DECIDE THE ISSUE IN HAND. WE ACCORDINGLY, IN THE INTEREST OF JUSTICE AND FAIR PLAY IN THE MATTER, SET ASIDE THE ORDER OF CIT(A) AND RESTORE THIS ISSUE TO THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHALL RE - EXAMINE THE CASE OF THE ASSESSEE WHETHER ANY ADDITION CAN BE MADE U/S 69 OF THE ACT AFTER KEEPING IN VIEW THE ACCRETION IN THE CAPITAL AS PER THE NET WEALTH STATEMENT AS COMPARED TO THE EARLIER YEAR. IF ACCRETION IN THE CAPITAL IS DULY SU PPORTED BY THE INCOME, IN OUR OPINION, THE DEPOSITS IN THE BANK WILL REPRESENT RECEIPT FROM PLYING OF THE TRUCK DURING THE COURSE OF THE BUSINESS AND NO QUESTION OF MAKING ANY ADDITION U/S 69 WILL ARISE. THIS DISPOSES OF ALL THE THREE GROUNDS OF APPEAL. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ( O RDER PRONOUNCED IN THE OPEN COURT ON 23/11/2012 ) SD/. SD/. ( D. T. GARASIA ) ( P. K. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23/11/2012 * CL SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR