Shri Yadwinder Singh, Bathinda V. The Income-tax Officer, Bathinda

ITA 508/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8859 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: P N ARORA
• Keywords: Principle of natural justice
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.508(ASR)/2014 ASSESSMENT YEAR:2009-10 PAN: AUPS8672H SH. YADWINDER SINGH VS. INCOME TAX OFFICER, S.O SH. GURDIP SINGH, WARD-2(1), H/NO.65, C/O BRAR FINANCE, BATHINDA. BPO BURJ MEHMA, DISTT. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. P.N.ARORA, ADVOCATE RESPONDENT BY:SH. R.K. SHARDA, DR DATE OF HEARING:22/02/2016 DATE OF PRONOUNCEMENT: 24/02/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2009-10 AGAINST THE ORDER, DATED 20.05.2014, PASSED BY THE LD. CIT(A), BATHINDA. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. ONE THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 360000/- ON ACCOUNT OF UN-EXPLAINED SOURCE OF DEPOS IT IN THE BANK ACCOUNT WHEREAS THE ASSESSEE APPELLANT HAS DUL Y EXPLAINED THE SOURCE OF DEPOSIT AS SALE OF PROPERTY BEFORE THE ASSESSING OFFICER AS WELL AS DURING THE APPELLATE P ROCEEDINGS. AS SUCH, THE ADDITION OF RS. 360000/- BE DELETED. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN UPHOLDING THE ADDITION OF RS,.210000/- ON ACCOUNT O F UN- EXPLAINED SOURCE OF DEPOSIT IN THE BANK ACCOUNT WHE REAS THE ASSESSEE APPELLANT HAS DULY EXPLAINED THE SOURCE OF DEPOSIT AS AGRICULTURAL INCOME BEFORE THE ASSESSING OFFICER AS WELL AS ITA NO.508(ASR)/2014 ASSESSMENT YEAR : 2009-10 2 DURING THE APPELLATE PROCEEDINGS. AS SUCH, THE ADDI TION OF RS. 210000/- BE DELETED. 3. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN ENHANCING THE ASSESSMENT ON ACCOUNT OF UN-EXPLAINED SOURCE OF DEPOSIT IN THE BANK ACCOUNT AMOUNTING TO RS. 495 590/- WHEREAS THE ASSESSEE APPELLANT HAS DULY EXPLAINED T HE SOURCE OF DEPOSIT IN THE BANK DURING THE ASSESSMENT PROCEEDINGS AS WELL AS DURING THE APPELLATE PROCEED INGS. AS SUCH, ADDITION OF RS. 495590/- BE DELETED. 4. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN ENHANCING THE INCOME OF THE ASSESSEE APPELLANT BY R EJECTING THE EXPLANATION WHICH HAS ALREADY BEEN ACCEPTED BY THE AO IN RESPECT OF DEPOSITS IN THE BANK ACCOUNT. AS SUCH , ADDITION OF RS.495590/- BE DELETED. 5. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED, IN ENHANCING THE ASSESSMENT ON ACCOUNT OF UN-EXPLAINED SOURCE OF DEPOSIT IN THE BANK ACCOUNT AMOUNTING TO RS.4955 90/- WITHOUT PROVIDING SUFFICIENT, REASONABLE AND PROPER OPPORTUNITY TO THE ASSESSEE APPELLANT TO EXPLAIN HI S CASE. AS SUCH, ADDITION MADE BE DELETED. 6. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN REJECTING THE EXPLANATION FILED BY THE ASSESSEE APP ELLANT ON ACCOUNT OF VARIOUS DEPOSITS IN THE BANK ACCOUNT WIT HOUT APPRECIATING THAT THE ASSESSEE APPELLANT IS HAVING NO OTHER SOURCE OF INCOME EXCEPT FIXED SOURCES I.E. RENTAL A ND AGRICULTURAL INCOME. AS SUCH, ADDITION MADE ON ACCO UNT OF UN- EXPLAINED DEPOSITS IN THE BANK ACCOUNT BY REJECTING THE EXPLANATION IN SUMMARY MANNER BY PASSING NON SPEAKI NG ORDER IS AGAINST NATURAL JUSTICE AND LAW. AS SUCH, THE SAME BE DELETED. 2. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDIT IONAL GROUNDS: 1. THAT THE AO WAS NOT JUSTIFIED IN INVOKING THE P ROVISIONS OF SECTION 68 OF THE I.T. ACT, 1961, AND THEREBY MAKIN G ADDITION OF RS.5,70,000/-. 2. THAT THE AUTHORITIES BELOW DID NOT APPRECIATE TH AT THE PROVISIONS OF SECTION 68 ARE NOT AT ALL APPLICABLE IN THIS CASE ITA NO.508(ASR)/2014 ASSESSMENT YEAR : 2009-10 3 AS THE ASSESSEE ADMITTEDLY IS NOT MAINTAINING ANY B OOKS OF ACCOUNTS. AS SUCH, THE PROVISIONS OF SECTION 68 ARE NOT AT ALL APPLICABLE AND THE VERY BASIS ON WHICH THE ADDITION WAS MADE IS LIABLE TO BE DELETED. 3. THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE AR E LEGAL IN NATURE. ALL MATERIAL FACTS WITH REGARD THERETO ARE ON RECOR D AND NOTHING FURTHER REQUIRES TO BE CALLED FOR. ACCORDINGLY, THESE GROUN DS ARE ADMITTED. 4. APROPOS THE ADDITIONAL GROUNDS RAISED, THE LD. C OUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE TAXING AUTHORITIES HAVE ERRED IN NOT CONSIDERING THAT SECTION 68 OF THE I.T. ACT IS NOT ATTRACTED, SINCE THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT, F OR WHICH REASON, THE SAID SECTION IS NOT APPLICABLE TO THE ASSESSEES CA SE. IN THIS REGARD, RELIANCE HAS BEEN PLACED ON THE DECISION OF THE DEL HI BENCH OF THE TRIBUNAL, IN THE CASE OF ITO, WARD-1(5), FARIDABAD VS. SH. OM. PARKASH SHARMA, FARIDABAD, PASSED ON 31.05.2011 IN ITA NO. 2256/DEL/2009, FOR THE ASSESSMENT YEAR 2000-01, WHEREIN, IT HAS BE EN HELD, INTER-ALIA, AS FOLLOWS: 9. COMING TO THE MERITS OF THE CASE, UNDISPUTEDLY, THE ADDITION OF RS.913000/- WAS BASED ONLY ON SOME ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS FOUND NOT TO HAV E MAINTAINED ANY BOOKS OF ACCOUNT. NOW, AS CORRECTLY OBSERVED BY THE CIT(A), THE PASSBOOK/BANK STATEMENT SUPPLIED BY THE BANK TO THE ASSESSEE DOES NOT AMOUNT TO A BOOK OF ACCOUNT OF THE ASSESSE E. IT BEING ONLY A COPY OF CUSTOMERS ACCOUNT IN THE BOOKS MAINTAINE D BY THE BANK, A BANK DOES NOT ACT AS AN AGENT OF ITS CUSTOMER. IT ALSO CANNOT BE SAID THAT BANKER MAINTAINS A PASSBOOK UNDER THE INSTRUCT IONS OF THE ACCOUNT HOLDER. THE PROVISIONS OF SECTION 68 OF THE ACT, ARE THEREFORE, NOT ATTRACTED WHERE THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT. THE CIT(A) IN THIS REGARD, HAS RIGHTLY PLA CED RELIANCE ON CIT VS. BHAICHAND H. GANDHI, 141 ITR 67 (BOM.), SAMP AT AUTOMOBILE VS. ITO, 96 TTJ (D) 368, MS. MAYAWATI VS. DCIT, 113 TTJ 178 (DEL.) AND SHERATON APPARELS VS. ACIT, 356 ITR 20 (BOM.). IT IS ITA NO.508(ASR)/2014 ASSESSMENT YEAR : 2009-10 4 CORRECT THAT SINCE NO BOOKS OF ACCOUNT ARE MAINTAIN ED IN THE ORDINARY COURSE OF THE BUSINESS OF THE ASSESSEE, IN THE ABSE NCE OF ANY CORROBORATIVE EVIDENCE TO SUPPORT ACTION U/S 68 OF THE ACT, NO SUCH ADDITION IS TENABLE. 5. ON THE OTHER HAND, ON THIS ISSUE, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER, CONTENDING THAT THE PROVISIONS OF SECTION 68 OF THE ACT HAVE RIGHTLY BEEN APPLIED. 6. I HAVE HEARD THE PARTIES AND HAVE PERUSED THE MA TERIAL AVAILABLE ON RECORD. SECTION 68 OF THE I.T. ACT, READS AS FOL LOWS: SECTION 68: WHERE ANY SUM IS FOUND CREDITED IN THE BOOK OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE [ASSESSING] OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME- TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 7. SO SECTION 68 TALKS OF ANY SUM FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR. AS PER THIS SECTION, IF THE ASSESSEE OFFERS NO EXPLANATION, THE SECTION WOULD A PPLY. BUT THIS EXPLANATION HAS TO BE WITH REGARD TO ANY SUM FOUND CREDITED IN THE BOOKS. THIS IS AMPLY CLEAR FROM THE USE OF THE EXP RESSION ABOUT THE NATURE AND SOURCE THEREOF (THEREOF BEING THE OPERATIVE WORD). THEN, IN CASE THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND BY THE AO TO BE SATISFACTORY, THE SECTION CAN BE INVOKED. THIS EXPL ANATION, OBVIOUSLY, HARKS BACK TO ANY SUM FOUND CREDITED IN THE BOOKS. THE WORDS THE SUM SO CREDITED AGAIN RELATE TO ANY SUM FOUND CREDITED IN THE BOOKS SO CREDITED, HERE BEING THE PREGNANT EXPRESSION. ITA NO.508(ASR)/2014 ASSESSMENT YEAR : 2009-10 5 8. THUS, A PLAIN READING OF THE SECTION ESTABLISHES THAT IT OPERATES ONLY WHERE BOOKS ARE MAINTAINED BY AN ASSESSEE AND A SUM IS FOUND CREDITED THEREIN. 9. NOW, IN THE PRESENT CASE, IT REMAINS UNDISPUTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS DURING THE YEAR. THUS, THE PROVISIONS OF SECTION 68 OF THE ACT ARE NOT AT ALL ATTRACTED AND THEY HAVE BEEN WRONGLY APPLIED BY THE AUTHORITIES BELOW. THIS POSITION HAS BEEN DULY RECOGNIZED IN SH. OM PARKASH SHARMA, FARIDABAD (SUPRA). NO C ONTRARY DECISION HAS BEEN CITED BEFORE THIS BENCH. 10. IN VIEW OF THE ABOVE, THE GRIEVANCE OF THE ASSE SSEE BY WAY OF THE ADDITIONAL GROUNDS TAKEN IS JUSTIFIED AND IS ACCEPT ED AS SUCH. DUE TO SUCH ACCEPTANCE, SINCE THE PROVISIONS OF SECTION 68 OF THE ACT ARE THEMSELVES HELD TO BE NOT APPLICABLE AND MIS-APPLIE D, NOTHING FURTHER REMAINS TO BE ADJUDICATED. 11. ACCORDINGLY, THE ORDER UNDER APPEAL IS REVERSED . THE ADDITION IS CANCELLED. 12. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/2 016 SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 24/02/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE: SH. YADWINDER SINGH VPO BURJ MEHMA , DISTT. BATHINDA 2. THE ITO, WARDS 2(1), BATHINDA. 3. THE CIT(A), BATHINDA 4. THE CIT, BATHINDA.5. THE SR. DR, ITAT, ASR.