Rahim Mohammed Abdul, Trivandrum V. ACIT, Trivandrum

ITA 525/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64875 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-09-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VENI RAJ
• Assessee Lawyers: DALE P KURIEN
• Keywords: Depreciation; Reasonable cause

Judgement Text

1 ITA NO.525/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 525/COCH/2010 (ASSESSMENT YEAR 2007-08) RAHIM MOHAMMED ABDUL V THE A.C.I.T., CIR.1(2) NO.28, KANYA, VALIAYAVEEDU LANE TRIVANDRUM KAMALESWARAM, MANACAUD TRIVANDRUM 695 010 PAN : ACZPA8841L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DALE P KURIEN RESPONDENT BY : MS. VENI RAJ DATE OF HEARING : 09-08-2012 DATE OF PRONOUNCEMENT : 12-10-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM DATED 22 -06-2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THERE IS A DELAY OF 18 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNAL. THE TAXPAYER HAS FILED AN APPLICATION TO CONDONE THE DE LAY. ACCORDING TO THE LD.REPRESENTATIVE FOR THE TAXPAYER, THE TAXPAYER WE NT TO DUBAI IN CONNECTION WITH UNAVOIDABLE PERSONAL MATTER AND HE WAS ABLE TO FILE THE APPEAL ONLY AFTER HIS 2 ITA NO.525/COCH/2010 RETURN FROM DUBAI. THEREFORE, THE DELAY OF 18 DAYS OCCURRED IN FILING THE APPEAL. WE HEARD, MS. VENI RAJ, THE LD.DR ALSO. 3. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES , WE FIND THAT THE DELAY IN FILING THE APPEAL WAS DUE TO ABSENCE OF THE TAXPAYE R IN THE COUNTRY. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE RE WAS A REASONABLE CAUSE ON THE PART OF THE TAXPAYER IN NOT FILING THE APPEAL I N TIME. ACCORDINGLY, THE DELAY OF 18 DAYS IS CONDONED AND THE APPEAL IS ADMITTED. 4. NOW COMING TO THE MERIT OF THE APPEAL, THE FIRST GROUND OF APPEAL IS WITH REGARD TO DEPRECIATION. DURING THE COURSE OF HEARI NG, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT HE DID NOT WANT TO PRES S THIS GROUND OF APPEAL. THE LD.REPRESENTATIVE HAS ALSO MADE AN ENDORSEMENT TO T HIS EFFECT. ACCORDINGLY, THE GROUND RELATING TO DEPRECIATION IS DISMISSED AS NOT PRESSED. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF RS.4,47,000. ACCORDING TO THE LD.REPRESENTATIVE, THERE WAS A CAS H DEPOSIT OF RS.15.93 LAKHS IN THE SAVINGS BANK ACCOUNT MAINTAINED WITH JAMMU & KASH MIR BANK LTD, TRIVANDRUM BRANCH. THE CASH WAS DEPOSITED FROM THE AMOUNT WITHDRAWN FROM THE BUSINESS ACCOUNT MAINTAINED BY KANYA SPECTRUM, KA NYA WOMEN SHOPPE AND KANYA TIMES AND THE SAME AMOUNT WAS UTILIZED FOR DEP OSITING THE AMOUNT IN THE SAVINGS BANK ACCOUNT WITH JAMMU & KASHMIR BANK LTD, TR IVANDRUM BRANCH. THE LD.REPRESENTATIVE HAS ALSO SUBMITTED THAT THE TAXPA YER IS EARNING PROFIT REGULARLY IN THE BUSINESS AND HAD SUFFICIENT ACCUMULATED MONE Y FOR MAKING THE DEPOSIT. IN THE ARGUMENT NOTE, THE LD.REPRESENTATIVE TABULATED THE TOTAL TAXABLE INCOME FOR EARLIER ASSESSMENTS YEARS AND SUBMITTED THAT WHEN T HE TAXPAYER HAD SURPLUS 3 ITA NO.525/COCH/2010 FUNDS AS PROFIT OF THE EARLIER YEARS, THERE CANNOT BE ANY ADDITION WITH REGARD TO DEPOSIT OF RS.4.47 LAKHS IN THE BANK. WE HEARD THE L D.DR ALSO. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WAS AN ADDI TION OF RS.4.47 LAKHS WITH REGARD TO CASH DEPOSITED IN THE SAVINGS BANK ACCOUNT WITH JAMMU & KASHMIR BANK LTD, TRIVANDRUM BRANCH. THE CONTENTION OF THE TAXPAYER BEFORE THE LOWER AUTHORITIES WAS THAT RS.6 LAKHS WAS WITHDRAWN ON 30-0 6-2006 WHICH WAS USED FOR DEPOSITING FUNDS IN JAMMU & KASHMIR BANK LTD, TRIVAND RUM BRANCH. THE REVENUE AUTHORITIES FOUND THAT UPTO 30-06-2006 THE TAXPAYER H AD DEPOSITED CASH TO THE EXTENT OF RS.4.47 LAKHS. HOWEVER, THE FUNDS WERE WI THDRAWN ON 30-06-2006 FROM KANYA SPECTRUM, KANYA WOMEN SHOPPE AND KANYA TIMES TO THE EXTENT OF RS.6 LAKHS. THEREFORE, THE MONEY WITHDRAWN ON 30-06-2006 C ANNOT BE AVAILABLE WITH THE TAXPAYER FOR MAKING DEPOSIT IN JAMMU & KASHMIR BA NK LTD, TRIVANDRUM BRANCH BEFORE 30-06-2006. NOW THE TAXPAYER CONTENDS THAT THE TAXPAYER HAD SURPLUS FUNDS WHICH WERE FROM THE BUSINESS ACTIVITY AS PROFIT. THE CONTENTION OF THE TAXPAYER THAT THE TAXPAYER HAD SURPLUS INCOME I N THE EARLIER YEAR WAS NOT CONSIDERED BY THE LOWER AUTHORITIES. APPARENTLY TH IS CONTENTION WAS RAISED ONLY BEFORE THE TRIBUNAL. THEREFORE, THE LOWER AUTHORIT IES HAD NO OCCASION TO CONSIDER THE SAME. WHEN THE TAXPAYER SPECIFICALLY CLAIMS TH AT SUFFICIENT FUNDS WERE AVAILABLE AS ACCUMULATED PROFIT OF THE EARLIER YEAR S, IT HAS TO BE VERIFIED WHETHER SUCH FUNDS WERE REALLY AVAILABLE FOR MAKING THE DEPO SIT IN THE BANK. THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS TO VERIFY AND FIND OUT WHETHER THERE WAS AN ACCUMULATED PROFIT AS CLAIMED BY THE TAXPAYER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE WITH REGARD TO THE ADDITION OF RS.4.47 LAKHS AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. THE ASSESSING OFF ICER SHALL RE-EXAMINE THE ISSUE 4 ITA NO.525/COCH/2010 AFRESH IN THE LIGHT OF THE CONTENTIONS OF THE TAXPA YER AND FIND OUT WHETHER THERE WAS ANY ACCUMULATED PROFIT FOR MAKING DEPOSIT IN JAM MU & KASHMIR BANK LTD, TRIVANDRUM BRANCH AND THEREAFTER DECIDE THE ISSUE I N ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE TAXPAYER. 7. IN THE RESULT, THE APPEAL OF THE TAXPAYER IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH OCTOBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 12 TH OCTOBER, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH