Mr.Surinder Rana, Kurukshetra V. Income Tax Officer,

ITA 561/CHANDI/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5220 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Peak credit; Additional evidence
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 561/CHD/2015 ASSESSMEN T YEAR: 2011-12 SHRI SURINDER RANA, VS. THE ITO, # 2664/5, KURUKSHETRA. JHANSA ROAD, KURUKSHETRA. PAN NO. AIZPR2567A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI S.K.MITTAL, SR.DR DATE OF HEARING : 03.04.2017 DATE OF PRONOUNCEMENT : 05.04.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 26.03.2015 OF LD. CI T(APPEALS) ROHTAK PERTAINING TO 2011-12 ASSESSMENT YEARS ON THE FOLLOWING GROUNDS : 1. THAT THE LD. C1T(A) HAS ERRED IN LAW WHILE CONFIRMI NG THE ACTION OF THE LD. AO OF MAKING THE ADDITION OF RS. 46,31,200/- ON ACC OUNT OF CASH DEPOSITS IN THE AXIS BANK, KURUKSHETRA VIDE ASSESSMENT ORDER PA SSED U/S 144 OF THE INCOME TAX ACT, 1961WITHOUT APPRECIATION THE FACTS AND CIR CUMSTANCES OF THE CASE. THUS THE ADDITION OF RS. 46,31,200/- MAY PLEASE BE DELET ED. 2. THAT WE CRAVE TO ADD, ALTER, DELETE, MODIFY OR WITH DRAW ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE DECLARED AN INCOME OF RS. 2,57,460/-. THE SAID RETURN WAS SELECTED FOR S CRUTINY UNDER CASS AFTER ISSUING OF NOTICES UNDER SECTION 142(1) AND 143(2) OF INCOM E TAX ACT. HOWEVER, THE ASSESSEE ON THE DATES OF HEARING FIXED BY THE ASSES SING OFFICER, INITIALLY SOUGHT TIME AND AFTERWARDS FAILED TO APPEAR. THE ASSESSIN G OFFICER MADE AN ADDITION BY AN ORDER UNDER SECTION 144 OF THE ACT OF THE AMOUNT DEPOSITED IN THE BANK ACCOUNT MAINTAINED WITH AXIS BANK, KURUKSHETRA BY TREATING THE SAME AS 'INCOME FROM 2 OTHER SOURCES'. THE ASSESSEE WAS UNSUCCESSFUL BEFO RE THE CIT(APPEALS) ON THE ISSUE LEADING TO THE FILING OF THE PRESENT APPEAL. 3. THE LD. AR SUBMITTED THAT THE LD. CIT(APPEALS) O N FACTS HAS FAILED TO CONSIDER THE SPECIFIC PRAYER OF THE ASSESSEE. IT W AS HIS SUBMISSION THAT THE ASSESSEE HAS BEEN IN THIS LINE OF BUSINESS FOR THE LAST SEVERAL YEARS AND HAS ALSO BEEN RETURNING INCOME FROM COMMISSION ON SALE AND P URCHASE OF PROPERTY. IT WAS ARGUED THAT THE ASSESSEE HAD MADE THE FOLLOWING TWO SPECIFIC PRAYERS BEFORE THE CIT (APPEALS). (I) EITHER TO APPLY SECTION 44AE ON THE GROSS CASH DEPOSITS OF THE ASSESSEE, CONSIDERING THE DEPOSITS TO BE GROSS RECEIPTS, OR (II) EITHER TO FIND OUT THE PEAK DEPOSITS IN THE SAID BANK ACCOUNT, 3.1 THE CIT (APPEALS),IT WAS SUBMITTED, HAD NOT E VEN CARED TO ADDRESS THE PRAYERS AND SUSTAINED THE ADDITION MECHANICALLY. I T WAS ALSO HIS STATEMENT THAT THE ASSESSEE HAD WORKED OUT A PEAK CREDIT AND THE A SSESSING OFFICER MAY BE DIRECTED TO VERIFY THE CORRECTNESS OF THE SAME. AC CORDINGLY, IT WAS HIS PRAYER THAT THE MATTER MAY BE REMANDED GIVING THE ASSESSEE THE BENEFIT OF OPENING CASH IN HAND FOR WHICH PURPOSE, THE ASSESSEE WOULD PLACE ON RECORD EVIDENCES OF RETURNED INCOME IN THE EARLIER YEARS. THE BENEFIT OF THE INCOME RETURNED IN THE YEAR UNDER CONSIDERATION, IT WAS SUBMITTED, MAY ALS O BE DIRECTED TO BE GIVEN AS THE ASSESSEE IS A SMALL ASSESSEE AND IN THE ABSENCE OF ANY REFERENCE TO THESE SETTLED LEGAL PROPOSITIONS, THE ASSESSING OFFICER M AY NOT CONSIDER THE PRAYER MADE. 4. THE LD. DR SHRI S.K.MITTAL, APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT NOTHING HAS BEEN PLACED BY THE ASSESSEE IN SUPPORT OF THE CLAIM THAT HE WAS A PROPERTY DEALER. OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE AT THE ASSESSMENT STAGE, THE REMAND STAGE AND EVEN TODAY, NOTHING HAS BEEN PLACED BY THE ASSESSEE ON RECORD. THUS, IT WAS HIS SUBMISSION TH AT HE HAD NO OBJECTION IF FACTS ARE ENQUIRED INTO AND THE BENEFIT OF PEAK CREDIT, I F AVAILABLE UNDER LAW IS GIVEN. IN 3 REGARD TO THE APPLICABILITY OF RATE, IT WAS HIS SUB MISSION THAT IN THE ABSENCE OF ANY FACTS, SAME CANNOT BE APPLIED. 5. I HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. I FOUND THAT IN THE LIGHT OF THE SUBMISSION S OF THE PARTIES BEFORE THE BENCH, IT WOULD BE APPROPRIATE TO SET ASIDE THE IMPUGNED O RDER AND RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. THE RECORD SH OWS THAT THE ASSESSEE CLAIMED THAT HE WAS RUNNING THE BUSINESS OF PROPERTY DEALIN G FOR THE LAST SEVERAL YEARS. IT WAS STATED THAT THE ASSESSEE EARNED HIS INCOME/COMM ISSION ON SALE AND PURCHASE OF PROPERTY. IT HAS ALSO BEEN ARGUED BEFO RE THE CIT (APPEALS) AS FOUND RECORDED IN THE IMPUGNED ORDER THAT THE VERY NATURE OF ASSESSEE'S BUSINESS INVOLVED CASH WHERE IT IS ADVANCED BY THE PURCHASER AND WHEN THE DEAL MATERIALIZES, THE COMMISSION IS GIVEN TO THE ASSESS EE. FOR THE PURPOSE OF SAFETY, THE ASSESSEE CLAIMED TO DEPOSIT THE CASH IN HIS BAN K ACCOUNT. IT WAS STATED THE AMOUNT IS WITHDRAWN IN A VERY SHORT PERIOD. ACCORD INGLY, IT WAS CLAIMED THAT THE CASH DEPOSITED IN THE BANK ACCOUNT NEVER BELONGED T O THE ASSESSEE AS IT WAS FOR THE DEALS MADE BETWEEN THE PURCHASER AND THE SELLER THROUGH HIM. NO BOOKS OF ACCOUNT WERE CLAIMED TO BE MAINTAINED BY THE ASSESS EE. ACCORDINGLY, IN ORDER TO MAKE A FAIR AND PROPER ADJUDICATION, IT WAS HIS PRA YER THAT EITHER 44AE MAY BE APPLIED OR PEAK DEPOSIT BE ADDED. IT IS ALSO ARGUE D THAT NO FRESH ASSETS HAD BEEN ACQUIRED BY THE ASSESSEE FROM THE ALLEGED CASH DEPO SITS NOR HE HAS MADE ANY INVESTMENT IN THE FOLLOWING YEAR. THE CIT (APPEALS ), IT IS SEEN, HAS RELIED UPON THE REMAND REPORT WRONGLY TREATING COPY OF THE BANK STA TEMENT AS ADDITIONAL EVIDENCE IGNORING THE FACT THAT IT WAS ALREADY AVAILABLE WIT H THE ASSESSING OFFICER. ACCORDINGLY, SINCE THE ISSUES ARE REQUIRED TO BE FA CTUALLY ADDRESSED QUA THE PAST HISTORY, THE ASSESSEE IS DIRECTED TO PLACE COMPLETE AND FULL FACTS IN REGARD TO ITS ALLEGED CLAIM OF EARNING COMMISSION FROM PROPERTY B USINESS. THE ASSESSING OFFICER IS DIRECTED TO LOOK INTO THE PAST HISTORY O F THE ASSESSEE AND ACCEPT FRESH EVIDENCES, IF ANY PLACED BY THE ASSESSEE BEFORE HIM FOR CONSIDERATION AND 4 DECISION DE-NOVO GIVING BENEFIT OF THE RETURNED INC OME IN THE YEAR UNDER CONSIDERATION AND THE OPENING BALANCE IN REGARD TO THE WORKING OF PEAK CREDIT WHICH, IF NEED BE, MAY BE ESTIMATED IN ACCORDANCE W ITH LAW TAKING INTO CONSIDERATION THE PECULIAR FACTS AND CIRCUMSTANCES AND THE HISTORY OF THE ASSESSEE IN REGARD TO FILING OF ITS TAXABLE INCOME. NEEDLES S TO SAY THAT ASSESSEE SHALL BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED IN GOOD-FAITH TO THE ASSESSEE IS UTILIZED FULLY AND COMPLETELY AND IS NOT ABUSED. IT IS MADE CLEAR THAT IN THE EVENTUALITY O F ABUSE OF THE SAME, THE LD. CIT(APPEALS) WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL,2017. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED 5 TH APRIL,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.