The ITO, Ward-3, Gandhinagar V. Shri Praful C.Majithia, Gandhinagar

ITA 509/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72818 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: CHHAJED
• Keywords: Corroborative evidences
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO.509/AHD/2013 A.Y. 2009-10 INCOME TAX OFFICER, WARD-3, GANDHINAGAR V/S. SHRI PRAFUL C. MAJITHIYA, 791/D, PANCHSHIL PARK, SECTOR NO.21, GANDHINAGAR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.C. MATHEWS, SR.D.R. ASSESSEE(S) BY : SHRI M.S. CHHAJED A.R. / DATE OF HEARING : 07/01/2013 / DATE OF PRONOUNCEMENT: 10/01/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(A), GANDHINAGAR, AHMEDABAD, DATED 12 .12.2012 AND THE ONLY GROUND RAISED IS REPRODUCED BELOW: THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION MADE BY THE AO AMOUNTING TO RS.26,26,0 00/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN UNDISCLOSED BANK A/C AT MUMBAI. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3), DATED 22.12.2011 WERE THA T THE ASSESSEE IS A TRANSPORT AGENT. AN INFORMATION WAS RECEIVED BY T HE AO THAT THE ASSESSEE HAD MAINTAINED A SAVING BANK ACCOUNT WITH AXIS BANK LTD., GANDHINAGAR BRANCH. IT WAS ALLEGED THAT THE A SSESSEE HAD NOT REFLECTED THE SAID BANK ACCOUNT IN HIS BOOKS OF ACC OUNT. ON VERIFICATION, IT WAS FOUND THAT FOR THE PERIOD FROM 01.04.2008 TO ITA NO.509/AHD/2013 THE ITO WARD-3 GANDHINAGAR VS. SHRI PRAFUL C. MAFIT HIYA A.Y. 2009- 10 - 2 - 31.03.2009 ALLEGEDLY THE ASSESSEE HAD DEPOSITED CAS H OF RS.52,57,032/-. THE ASSESSEE HAS EXPLAINED THAT THE SAID BANK ACCOUNT WAS MAINTAINED TO OBTAIN DO IN THE NAME O F VARIOUS PARTIES. HE HAS MENTIONED THAT THE TRANSACTION WITH THOSE PARTIES HAS DULY BEEN REFLECTED IN THE BOOKS OF ACCOUNT. HO WEVER, THE AO WAS NOT CONVINCED AND TAXED THAT AMOUNT IN THE HAND S OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 69 O F THE IT ACT. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE LEARNED CIT(A) AN EXPLANATION WAS OFFERED WHICH WAS FORWARDED TO THE AO AND A REMAND REPORT WAS FUR NISHED BY THE REVENUE DEPARTMENT, RELEVANT PORTION OF THE REPORT IS REPRODUCED BELOW: AS PER THE CIB INFORMATION POSTED, THERE IS MENTION OF RS.26,26,000/- ON 31/03/2009 FILED BY AXIS BANK, CU FFE PARADE BRANCH, COLABA, MUMBAI. CONSIDERING THE MAGNITUDE O F REVENUE INVOLVED ON THIS ISSUE, DURING THE COURSE OF RECOVE RY PROCEEDINGS, ENQUIRIES HAVE BEEN CONDUCTED WITH THE AXIS BANK AU THORITIES AT GANDHINAGAR, AND AT MUMBAI. THE AXIS BANK, GANDHINA GAR BRANCH HAD INFORMED THAT THE ASSESSEE HAD, DURING F.Y. 200 8-09, ONLY ONE ACCOUNT WITH THEM. THIS CUFFE PARADE BRANCH, WHICH WAS THE HEAD OFFICE OF AXIS BANK AT MUMBAI, HAD FILED THE INFORM ATION IN TXN. CODE-1. SHOWING TRANSACTION TOTAL OF 26,26,000/- ON 31.3.2009. FROM THE AIR-CIB INFORMATION, IT TRANSPIRES THAT THE INF ORMATION WAS FILED BY AXIS BANK, CUFFE PARADE BRANCH, MUMBAI, BEING TH EIR HEAD OFFICE, AND THE SAME TRANSACTIONS WAS REPORTED BY THEIR GAN DHINAGAR BRANCH IN TXN. CODE-181. THE AO HAD MADE THE OTHER ADDITIO N OF RS.26,26,000/-, WITHOUT DISCUSSING IT IN THE ASSESS MENT ORDER, THOUGH THIS AMOUNT WAS MENTIONED IN THE LETTER ISSUED TO T HE ASSESSEE. AS REGARDS THIS ADDITION, OR DOUBLE ADDITION, IT IS VE RIFIED THAT THE TRANSACTION TOTAL OF AXIS BANK IS RS.30,61,424/- AN D AFTER DEDUCTING THE ACCOUNT OPENING AMOUNT OF RS.5,000/-, TWO CHEQU E CLEARINGS OF RS.8,927/- ON 4/12/2008 AND RS.4,21,396/- ON 16/12/ 2008, AND INTEREST CREDITED OF RS.32/-, THE NET UNDISCLOSED CASH DEPOS ITS COMES TO RS.26,26,000/- IN AXIS BANK A/C. NO.448010100230179 , FOR THE PERIOD FROM 27.10.2008 TO 31.03.2009. THUS, ONCE TH E ENTIRE CASH ITA NO.509/AHD/2013 THE ITO WARD-3 GANDHINAGAR VS. SHRI PRAFUL C. MAFIT HIYA A.Y. 2009- 10 - 3 - DEPOSITS OF RS.26,31,032/- IS ADDED, THERE IS NO NE ED TO FURTHER ADD RS.26,26,000/- AS IT WOULD RESULT IN DOUBLE ADDITIO N. THE CONTENTION OF THE ASSESSEE IS FOUND CORRECT. IN VIEW OF THIS FACT , THE FURTHER ADDITION MADE OF RS.26,26,000/- APPEARS TO BE A DOUBLE ADDIT ION. 3.1 IT WAS FURTHER EXPLAINED BY THE ASSESSEE THAT, NORMALLY CUSTOMERS WHO HAVE TO MAKE PAYMENT FOR LIGNITE HAVE TO SEND DO & BANK DRAFT ALONG WITH TRANSPORTER. SO, CUSTOMERS GIVE CASH/CHEQUE PAYMENT TO THE APPELLANT, WHICH IN TURN APPELLANT DEPOSITS THE SAME IN HIS BANK ACCOUNT AND GET BANK DRAFTS IN FAVOUR OF GMDC FOR AND ON BEHALF OF HIS CUSTOMERS. 3.2 IT WAS ALSO EXPLAINED THAT THE TRANSACTION WITH THE AXIS BANK HAS DULY BEEN RECORDED IN THE PERSONAL BOOKS OF ACCOUNT OF THE ASSESSEE. IT WAS REITERATED THAT, APPELLANT ST ATED TO THE LEARNED AO THAT CASH WHICH HE HAS RECEIVED FROM HIS CUSTOME RS FOR MAKING DEMAND DRAFT IN FAVOUR OF GMDC DEPOSITED INTO THE S AVING ACCOUNT WITH AXIS BANK OF APPELLANT AND SAME HAS BE EN UTILIZED FOR PREPARATION OF BANK DRAFTS IN FAVOUR OF GMDC FO R HIS CUSTOMERS. APPELLANT HAS ALSO SUBMITTED COPIES OF D O COPIES BANK STATEMENTS OF AXIS BANK, CASH BOOK, BANK BOOK ACCOU NT ETC. FROM HIS PERSONAL BOOKS OF ACCOUNT TO THE LEARNED AO (CO PY ENCLOSED). APPELLANT HAS SUBMITTED COPY OF ACCOUNT FROM HIS BO OKS OF ACCOUNT OF CUSTOMERS ALONG WITH CONTRA ACCOUNTS OF THE CUSTOMERS. APPELLANT HAS DEPOSITED CASH RECEIVED FROM HIS CUST OMERS FOR OBTAINING DEMAND DRAFT FOR THEM IN FAVOUR OF GMDC F OR THEIR PURCHASES OF LIGNITE OF RS.26,26,000/-. THE CASH RE CEIVED BY THE APPELLANT FOR OBTAINING DEMAND DRAFT FOR PURCHASE O F LIGNITE RECEIVED FROM HIS CUSTOMERS HAD BEEN DEPOSITED IN H IS SAVING ACCOUNT NO.448010100230179 OF AXIS BANK LIMITED GAN DHINAGAR ITA NO.509/AHD/2013 THE ITO WARD-3 GANDHINAGAR VS. SHRI PRAFUL C. MAFIT HIYA A.Y. 2009- 10 - 4 - BRANCH. AGAINST ALL SUCH CASH APPELLANT HAS MADE DE MAND DRAFT IN FAVOUR OF GMDC FOR THE CUSTOMERS WHO HAD PURCHASED LIGNITE AND SEND ALONG WITH DO WITH THE TRUCKS. 3.3 LEARNED CIT(A) WAS CONVINCED WITH THOSE DETAILS AND THEREAFTER DELETED THE ADDITION IN THE FOLLOWING MA NNER: LOOKING TO THE LINE OF BUSINESS OF THE APPELLANT WH ICH IS TRANSPORTATION, THE FACT THAT THERE IS NO DOUBT THA T THE BANK ACCOUNT HAS INDEED BEEN USED TO MAKE DRAFT ORDERS IN FAVOUR OF GMDC, THE APPELLANT HAS TRANSPORTED LIGNITE FOR THE VERY CUST OMERS FOR WHOM DRAFTS HAVE BEEN MADE, THE CONFIRMATION HAS BEEN FI LED REGARDING THE CLAIM FROM THESE CUSTOMERS WITH THEIR IDENTITY, THE APPELLANT WAS NOT NEEDING SUCH HUGE QUANTITIES OF LIGNITE HIMSELF AS PER HIS KNOWN AFFAIRS; I AM OF THE CONSIDERED OPINION THAT THE EX PLANATION OF THE APPELLANT THAT THE BANK ACCOUNT HAS BEEN UTILIZED F OR MAKING DRAFTS FOR HIS REGULAR CUSTOMERS AS AN ADDED SERVICE IS CORREC T. I HAVE CONSIDERED AND APPLIED THE RATIOS OF THE DECISIONS OF HONBLE HIGH COURTS IN THE CASES; MOHAN B. SAMTANI V. COMMISSION ER OF INCOME- TAX, 199 ITR 370 (CAL.) AND SMT. PANNA DEVI CHOWDHA RY V. COMMISSIONER OF INCOME TAX, 208 ITR 849 (BOM) CITED BY THE APPELLANT, TO HOLD THE VIEW THAT WHEN THERE IS SUBS TANTIAL EVIDENCE GIVING THE REASON TO HOLD THAT THE MONEY DID NOT FU LLY BELONG TO THE APPELLANT, THE EVIDENCE HAS TO BE CONSIDERED TO REA CH AT A REASONABLE CONCLUSION. HOWEVER, I DO NOT AGREE WITH THE APPELLANT THAT HE HAS NOT CHARGED ANYTHING EXTRA FOR THE SERVICES. ON THE BASIS OF TH E NATURE OF BUSINESS CONDUCT AND HUMAN BEHAVIOUR, I DO NOT BELIEVE THAT THE SERVICES WERE PROVIDED IN LIEU OF THE TRANSPORTATION CHARGE ITSEL F. I ESTIMATE THAT THE APPELLANT HAS EARNED AROUND 2% FROM THE TRANSACTION S CARRIED OUT USING THE IMPUGNED BANK ACCOUNT. THE ADDITION IS TH EREFORE RESTRICTED TO AN ESTIMATED RS.60,000/- AND THE REST OF THE ADD ITION MADE BY THE AO ON THE BASIS OF MONEY FOUND DEPOSITED IN THE BAN K ACCOUNT IS DIRECTED TO BE DELETED. 4. FROM THE SIDE OF THE REVENUE, LEARNED DR, SHRI K.C. MATHEWS, SR.D.R. APPEARED AND ARGUED THAT THE ASSES SEE HAD ACTED AS A CONDUIT TO PREPARE BANK DRAFT ON BEHALF HIS CU STOMERS RUNNING BRICK-KLIN. THE BOOKS OF ACCOUNT WERE INCOMPLETE AN D THE SAID BANK ACCOUNT HAD NOT BEEN REFLECTED IN THE BOOKS. H OWEVER, HE HAS ITA NO.509/AHD/2013 THE ITO WARD-3 GANDHINAGAR VS. SHRI PRAFUL C. MAFIT HIYA A.Y. 2009- 10 - 5 - CLARIFIED THAT IT WAS CORRECT THAT AN AMOUNT OF RS. 26,31,032/- WAS FOUND DEPOSITED IN AXIS BANK AND THAT WAS THE CORRE CT AMOUNT WHICH OUGHT TO HAVE BEEN TAXED IN THE HANDS OF THE ASSESSEE. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTED THAT THE ASSESSEE HAS FURNISHED THE COPIES OF ACCOUNTS OF THOSE PARTIES WHO HAVE ENGAGED THIS ASSESSEE AS A T RANSPORT AGENT AND IN THOSE STATEMENT OF ACCOUNTS IT WAS ALSO NOTE D THE TRANSACTION OF THE DO ISSUED BY THE AXIS BANK. THE EXPLANATION OF THE ASSESSEE THAT BEING A TRANSPORT AGENT HE HAS PROVID ED AN EXTRA FACILITY TO HIS CUSTOMERS TO GET THE DO PREPARED ON THEIR BEHALF IN THE TRANSPORTATION OF THE COAL GMDC, THE ASSESSEE H AS DULY DISCLOSED THAT FACT TO THE AO AS PER THE EXPLANATIO N SUBMITTED. RELEVANT EXTRACT IS AS UNDER: 1. POINT NO.(A) NON INCLUSION OF ACCOUNT NO.4480101 00230179 OF AXIS BANK: SIR, I AM WORKING AS TRANSPORT AGENT. I AM PROVIDIN G TRANSPORT SERVICE TO MY CLIENT BY HIRING FROM OUTSIDE. MY BUSINESS NA ME IS MAITRY ROAD LINES. BESIDES ABOVE DURING THE YEAR I HAVE PROVIDED FACIL ITY TO MY CLIENT TO GOT THEIR DO IN THE NAME OF GMDC FROM MY SAVING A CCOUNT IN AXIS BANK. I HAVE GOT DO FROM MY SAVING ACCOUNT SO IT IS INC LUDED IN MY PERSONAL BALANCE SHEET, INSTEAD OF BALANCE SHEET OF MAITRY ROAD LINES I HAVE RECORDED ALL THE TRANSACTION OF AXIS BANK AC COUNT IS MY BOOKS OF ACCOUNT. I HEREBY ATTACHING COPY OF SAME FOR YOU R KIND REFERENCE. 6. WE HAVE ALSO NOTED THAT THE CONCERNED PARTIES H AVE ALSO AFFIRMED THE SAID TRANSACTION BY FURNISHING THEIR R ESPECTIVE STATEMENT OF ACCOUNT. UNDER THE TOTALITY OF THE FAC TS AND CIRCUMSTANCES AND THE CORROBORATIVE EVIDENCES, WE H EREBY AFFIRM ITA NO.509/AHD/2013 THE ITO WARD-3 GANDHINAGAR VS. SHRI PRAFUL C. MAFIT HIYA A.Y. 2009- 10 - 6 - THE FINDINGS OF THE LEARNED CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED /01/2014 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY TRUE COPY TRUE COPY TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD