Awdeshkumar Jayanth Tripathi, Pune V. Income-tax Officer,

ITA 501/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1777 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D N PARAKH
• Assessee Lawyers: HARI KRISHAN
• Keywords: Unexplained investment; Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! # $% , & ' BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ( / ITA NO. 501/PN/2014 ) * +* / ASSESSMENT YEAR : 2010-11 AWDESHKUMAR JAYNATH TRIPATHI, B-5, SHIVAM RESIDENCY, KRISHNA NAGAR, OPP. SAI BABA MANDIR, AKURDI CHIKALI ROAD, CHINCHWAD, PUNE 411019 PAN : ADJPT3658H ....... / APPELLANT ) / V/S. INCOME TAX OFFICER, WARD 4, RATNAGIRI / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN REVENUE BY : SHRI D.N. PARAKH / DATE OF HEARING : 12-05-2016 / DATE OF PRONOUNCEMENT : 20-05-2016 , / ORDER PER VIKAS AWASTHY, JM : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 31-12- 2013 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IMPU GNING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 2 ITA NO. 501/PN/2014, A.Y. 2010-11 1. THE LEARNED CIT(A) HAS ERRED IN APPRECIATING THE E VIDENCE PRODUCED BEFORE HIM WITH REGARD TO AGRICULTURE INCOME AND ST ATEMENT OF AFFAIRS FOR CASH AVAILABLE AS CLOSING BALANCE OF THE PREVIOUS Y EAR. 2. THE LEARNED CIT(A) HAS ERRED IN NOT DECIDING THE MA TTER OF AGRICULTURE INCOME AND AVAILABILITY OF CASH WITH THE ASSESSEE O N MERITS BUT HAS RELIED ON THE GROUNDS SUBMITTED BY THE ASSESSING OF FICER. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OF THE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF THE APPELLANT . 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A SALARIED PERSON AND IS WORKING WITH PETROL P UMPS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEA R 2010-11 DECLARING TOTAL INCOME OF ` 2,50,430/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 25-08-2011. DURING THE COURSE OF SCRUTINY ASSESSMENT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS HAVING HUGE CASH DEPOSITS IN BANK ACCOUNT. THE ASSESSE E WAS ASKED TO EXPLAIN. HOWEVER, THE ASSESSEE COULD NOT FURNISH REASONS TO THE SATISFACTION OF ASSESSING OFFICER. HENCE, THE ASSESSING OFFICER MADE ADDITION OF ` 50,29,242/- U/S. 69A AS UNEXPLAINED INVESTMENT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29-01-2013, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). DURING THE FIRST APPELLATE PROCEEDINGS THE ASS ESSEE FILED CERTAIN DOCUMENTS IN SUPPORT OF HIS SUBMISSIONS AND EXPL AINING THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNT. THE COMMISS IONER OF INCOME TAX (APPEALS) SOUGHT REMAND REPORT FROM THE ASS ESSING OFFICER ON THE EXPLANATION/EVIDENCE FURNISHED BY THE ASSESSEE. ON THE BASIS OF REMAND REPORT THE COMMISSIONER OF INCOME TAX (APPEALS) DE LETED SUBSTANTIAL ADDITIONS AND SUSTAINED ADDITION ONLY ON FOLLOWING THREE COUNTS : 3 ITA NO. 501/PN/2014, A.Y. 2010-11 I. AGRICULTURE INCOME ` 1,40,000/-. II. OPENING BALANCE ` 2,37,805/-. III. UNEXPLAINED DEPOSITS IN THE BANK ` 4,50,000/-. STILL AGGRIEVED THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. SHRI HARI KRISHAN APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT IN THE APPEAL HE WOULD BE PRESSING TWO ADDITIONS SU STAINED BY THE COMMISSIONER OF INCOME TAX (APPEALS) I.E. OPENING BALANCE OF ` 2,37,805/- AND AGRICULTURAL INCOME OF ` 1,40,000/-. THE LD. AR CONTENDED THAT THE ASSESSEE IS HAVING GROSS SALARY INC OME OF ` 2,50,000/- PER ANNUM. THE ASSESSEE HAS FURNISHED THE DE TAILS BEFORE THE AUTHORITIES BELOW IN RESPECT OF OPENING BALANCE. SINCE , THE ASSESSEE IS A SALARIED PERSON HE HAS NOT PREPARED BALAN CE SHEET. HOWEVER, A CASH FLOW STATEMENT WAS FILED BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS) WHICH WAS ALSO MADE AVAILABLE TO THE A SSESSING OFFICER FOR COMMENTS DURING THE REMAND PROCEEDINGS. THE O PENING CASH WAS AVAILABLE WITH THE ASSESSEE FROM THE SALARY INCOM E RECEIVED DURING THE ASSESSMENT YEAR 2009-10. THE WIFE OF THE AS SESSEE IS ALSO HAVING INDEPENDENT INCOME AND IS AN INCOME TAX ASSESSEE. SHE IS ALSO CONTRIBUTING TOWARDS HOUSEHOLD EXPENSES. HOWEVER, THE A UTHORITIES BELOW DISBELIEVED THE CONTENTIONS OF THE ASSESSEE. 4.1 IN RESPECT OF AGRICULTURAL INCOME THE LD. AR CONTENDE D, THAT THE ASSESSEE IS HAVING ANCESTRAL AGRICULTURAL LAND MEASURING AB OUT 1 ACRE IN DISTT.-BHADOHI, UTTAR PRADESH. THE ASSESSEE HAD FILED R EVENUE RECORDS SHOWING THE OWNERSHIP OF LAND IN THE NAME OF ASSE SSEE. THE ASSESSEE IS HAVING AGRICULTURAL INCOME FROM SAID LAND. HOWEV ER, THE SAME WERE DISBELIEVED BY THE AUTHORITIES BELOW. THE LD. AR PRAYED FOR 4 ITA NO. 501/PN/2014, A.Y. 2010-11 SETTING ASIDE THE FINDINGS OF COMMISSIONER OF INCOME TAX (AP PEALS) ON BOTH THE ABOVE ISSUES AND ACCEPTING THE APPEAL OF THE ASSESSEE. 5. SHRI D.N. PARAKH REPRESENTING THE DEPARTMENT VEHEMEN TLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPE ALS) AND THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IN THE REM AND REPORT. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT MAINTAIN ED ANY REGULAR BOOKS OF ACCOUNT. ALTHOUGH, THE ASSESSEE HAS FILED HIS RET URN OF INCOME FOR THE ASSESSMENT YEAR 2009-10, BUT NO REGULAR ACCOUN TS WERE MAINTAINED BY THE ASSESSEE EVEN DURING THE PERIOD RELEVA NT TO ASSESSMENT YEAR 2009-10. THE STATEMENT OF ASSETS AND LIABILITIES FOR THE FINANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2 009-10 CANNOT BE RELIED UPON AS THE SAME WERE NOT PART OF RETURN OF IN COME FOR ASSESSMENT YEAR 2009-10. THEREFORE, THE CONTENTION OF T HE ASSESSEE THAT THE OPENING BALANCE IS OUT OF SALARY INCOME RECEIVED IN ASSESSMENT YEAR 2009-10 CANNOT BE ACCEPTED. 5.1 THE LD. DR SUBMITTED THAT AS FAR AS AGRICULTURAL INCOME IS CONCERNED THE ASSESSEE HAS NOT SHOWN ANY INCOME FROM AGRICULTURAL OPERATIONS IN HIS RETURN OF INCOME. THEREFORE, THE PLEA OF A GRICULTURAL INCOME IS AN AFTERTHOUGHT. HE FURTHER CONTENDED THAT TH E ASSESSEE HAS NOT FILED ANY COGENT EVIDENCE TO SHOW THAT THE ASSESSEE HAD EVER CARRIED OUT ANY AGRICULTURAL OPERATIONS ON THE LAND FROM WHERE TH E AGRICULTURAL INCOME IS PURPORTEDLY EARNED. THE LD. DR PRAYED FOR DISMIS SING THE APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO REFERRED TO REMAND REPORT AT PAGES 45 TO 52 OF THE PAPER BOOK. THE FIRST ISSUE RAISED BY THE LD. AR OF THE ASSESSE E IS WITH 5 ITA NO. 501/PN/2014, A.Y. 2010-11 REGARD TO DISALLOWANCE OF OPENING BALANCE ` 2,37,805/-. THE AUTHORITIES BELOW HAD DISALLOWED THE SAME ON THE GROUND THAT THE AS SESSEE HAS NOT MAINTAINED REGULAR BOOKS OF ACCOUNT FOR THE EARLIER ASSESS MENT YEARS AS WELL AS ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE HAS ONLY FURNISHED A STATEMENT OF ASSETS AND LIABILITIES WHICH CANNOT BE RELIED UPON TO DETERMINE THE OPENING BALANCE. WE CONCUR WITH T HE FINDINGS OF THE AUTHORITIES BELOW THAT OPENING CASH BALANCE CANNOT B E ASCERTAINED FROM THE STATEMENT OF ASSETS AND LIABILITIES. HOWEVER, IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS HAVING INCOME FROM S ALARY. THE ASSESSEE MUST BE HAVING SOME SAVINGS FROM SALARY INCOME. THE LD. AR OF THE ASSESSEE HAS ALSO DRAWN OUR ATTENTION TOWARDS T HE INCOME TAX RETURN OF THE WIFE OF THE ASSESSEE TO SHOW THAT THE WIFE OF THE ASSESSEE IS ALSO FILING RETURN OF INCOME AND IS CONTRIBUTING TOWARDS HO USE HOLD EXPENSES. THUS, KEEPING IN VIEW THE TOTALITY OF FACTS WE A RE OF THE CONSIDERED OPINION THAT THE ASSESSEE MUST HAVE SOME AC CUMULATED SAVINGS OVER THE PERIOD OF TIME. THE ENTIRE OPENING BALANC E CANNOT BE DISBELIEVED. TO MEET THE ENDS OF JUSTICE WE RESTRICT THE ADDITION ON ACCOUNT OF OPENING BALANCE TO ` 1,00,000/-. THUS, THE ASSESSEE GETS RELIEF OF ` 1,37,105/-. THE GROUND NO. 2 OF THE APPEAL BY ASSESSEE IS PARTLY ACCEPTED. 7. WITH REGARD TO THE ADDITION OF AGRICULTURAL INCOME TO TH E TUNE OF ` 1,40,000/-, THE CONTENTION OF THE ASSESSEE IS THAT THE AS SESSEE IS HAVING AGRICULTURAL INCOME FROM THE ANCESTRAL LAND SITUATED IN UTTAR PRADESH. THE ASSESSEE IS HAVING LAND LESS THAN 1 ACRE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS NOT DECLARED INCO ME FROM AGRICULTURAL OPERATIONS IN HIS RETURN OF INCOME. THE AUTH ORITIES BELOW HAVE GIVEN A CATEGORIC FINDING THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW FROM THE RECORDS THAT AGRICULTURAL OPERATIONS WAS C ARRIED OUT BY THE ASSESSEE ON THE LAND ALLEGEDLY OWNED BY HIM. THUS, IN VIEW OF THE 6 ITA NO. 501/PN/2014, A.Y. 2010-11 FACT THAT THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY COGENT EVIDENCE TO SUBSTANTIATE INCOME FROM AGRICULTURE COUPLED WITH THE FACT THAT THE ASSESSEE HAS NOT DISCLOSED AGRICULTURAL INCOME IN HIS RETUR N OF INCOME, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LD. AR O F THE ASSESSEE. ACCORDINGLY, GROUND NO. 1 RAISED IN THE APPEAL IS DISMISSED . NO OTHER GROUND WAS RAISED BY THE LD. AR OF THE ASSESSE E BEFORE US. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY AC CEPTED IN THE AFORESAID TERMS. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF MAY, 2016. SD/- SD/- (PRADIP KUMAR KEDIA) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 20 TH MAY, 2016 RK ,-#./0+. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. # # $ () / THE CIT(A), KOLHAPUR 4. # # $ / THE CIT-II, KOLHAPUR 5. '() *+ , # *+ , , ,-. , / DR, ITAT, B BENCH, PUNE. 6. )/0 12 / GUARD FILE. // ' // TRUE COPY// #3 / BY ORDER, 4 *. / PRIVATE SECRETARY, # *+ , / ITAT, PUNE