SHRI ASHISH KACHOLA, Indore V. THE ITO-2(2), Indore

ITA 569/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5633 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 569/IND/2015 A.Y. : 2010-11. SHRI ASHISH KACHOLA, ITO, INDORE VS. 2(2), INDORE. APPELLANT RESPONDENT PAN NO. ANPRK3857H APPELLANTS BY : SHRI RAM GILDA, ADV. RESPONDENT BY : SHRI R.A.VERMA, DR O R D E R PER D.T.GARASIA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 30.04.2015 FOR THE ASS ESSMENT YEAR 2010-11. DATE OF HEARING : 29 .0 2 .2016 DATE OF PRONOUNCEMENT : 31 .0 3 .2016 SHRI ASHISH KACHOLA, INDORE VS. ITO, 2(2), INDORE I.T.A.NO. 569/IND/2015 A.Y. 2010-11 2 2 2. THE SHORT FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED THAT THE AS SESSEE IS MAINTAINING TWO BANK ACCOUNTS WITH STATE BANK OF IN DORE AND AXIS BANK AND AN AMOUNT OF RS. 18,02,000/- AND AN A MOUNT OF RS. 28,42,720/- WAS FOUND DEPOSITED IN CASH IN T HESE ACCOUNTS. THE AO CONCLUDED THAT THESE DEPOSITS ARE THE SALE PROCEEDS FROM THE BUSINESS REPRESENTING THE TURNOVE R OF THE ASSESSEES BUSINESS. THEREFORE, THE AO HAS LEVIED T HE PENALTY OF RS. 25,000/- U/S 271A OF THE INCOME-TAX ACT, 196 1, AND CIT(A) HAS CONFIRMED THE SAME. 3. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH E AO HAS VERIFIED THE BANK ACCOUNTS OF THE ASSESSEE A ND ON EXAMINATION OF THE BANK ACCOUNTS AND ASSESSEES WRI TTEN SUBMISSION PLACED ON RECORD, THE AO FOUND THAT PERU SAL OF BANK STATEMENT SHOWS THAT THERE ARE FREQUENT CASH D EPOSIT AND PRESUMED THAT THE CASH DEPOSIT PERTAINS TO THE BUSINESS DONE BY THE ASSESSEE. AS REGARD INVESTMENT ON ACCOU NT OF CASH INVESTED IN THE BUSINESS CONSIDERING THE PEAK AND A VAILABILITY OF THE CASH IN THE HANDS OF THE ASSESSEE COMES TO R S. SHRI ASHISH KACHOLA, INDORE VS. ITO, 2(2), INDORE I.T.A.NO. 569/IND/2015 A.Y. 2010-11 3 3 14,50,000/- WAS ESTIMATED. THE AO HAS ESTIMATED THE AMOUNT OF RS. 14.50 LAKHS IN THE HANDS OF THE ASSESSEE. TH E LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT TH E ASSESSEE HAS DEPOSITED THE AMOUNT IN STATE BANK OF INDORE AN D AXIS BANK, INDORE, BY WAY OF CASH DEPOSITS. THE ASSESSEE HAS TAKEN THE CONTENTION THAT THESE DEPOSITS WERE MADE BY HIS PARENTS, BUT THE ASSESSEE COULD NOT BRING ANY CONCRETE EVIDE NCE TO PROVE THAT THE ASSESSEES PARENTS HAVE DEPOSITED TH IS AMOUNT IN THE BANK. THE AO HAS ADDED THE CASH AMOUNT OF RS . 14,50,000/- FROM UNDISCLOSED SOURCES AND IT WAS ADD ED U/S 69 OF THE INCOME-TAX ACT, 1961. THE ASSESSEE HAS DE POSITED VARIOUS AMOUNTS IN THE BANK, BUT THE AO HAS ADDED T HE PEAK IN THE INVESTMENT IN THE BANK DEPOSITED U/S 69. THE REFORE, THE INCOME OF THE ASSESSEE IS ONLY RS. 14.50 LAKHS AND THE ASSESSEE HAS DECLARED RS. 1,05,500/-. THUS, THE TOT AL INCOME IS ONLY RS. 15,55,500/-. THEREFORE, THE ASSESSEE HA S NO REQUIREMENT TO MAINTAIN THE BOOKS OF ACCOUNT U/S 44 AB OF THE INCOME-TAX ACT, 1961. THEREFORE, THE PENALTY MAY BE DELETED. SHRI ASHISH KACHOLA, INDORE VS. ITO, 2(2), INDORE I.T.A.NO. 569/IND/2015 A.Y. 2010-11 4 4 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN THIS CASE THE ASSESSEE HAS NOT MAIN TAINING ANY BOOKS OF ACCOUNTS. THE ASSESSEE HAS DONE TRADING OF COMMODITIES IN MULTI COMMODITIES EXCHANGE THROUGH B ROKER M/S. ARIHANT FUTURE AND COMMODITY LIMITED. THE ASSE SSEE HAS SUFFERED A LOSS OF RS. 9,63,925/- AND THE LOSS WAS NOT ALLOWED TO THE ASSESSEE. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE AO FOUND THAT THERE WAS CREDIT IN THE BANK ACCOUNT MAINTAINED IN STATE BANK OF INDORE AND AXIS BANK, INDORE. THE TOTAL AMOUNT IN THIS CASH DEPOSIT EXCEE DS RS. 40 LAKHS, BUT ON VERIFICATION OF THE ACCOUNTS, THE AO HAS ASSESSED THE INCOME OF RS. 14.50 LAKHS IN THE BANK ACCOUNT A S UNDISCLOSED INCOME OF THE ASSESSEE U/S 69 OF THE AC T. THEREFORE, IN THE ASSESSEES BANK ACCOUNT, THE DEPO SITS ARE MORE THAN RS. 40 LAKHS, BUT THE AO HAS ADDED ONLY P EAK. WE FOUND THAT SIMILAR ISSUE HAD COME UP BEFORE DELHI T RIBUNAL IN THE CASE OF SANT CONSTRUCTION CO. VS. ITO, IN I.T.A .NO. 4417/DEL/1991 , WHEREIN IT IS HELD THAT UNDER SUB S ECTION (1) SHRI ASHISH KACHOLA, INDORE VS. ITO, 2(2), INDORE I.T.A.NO. 569/IND/2015 A.Y. 2010-11 5 5 OF SECTION 44AA, THE BOOKS OF ACCOUNTS HAVE BEEN PR ESCRIBED TO BE MAINTAINED BY THE PERSONS ON SPECIFIED PROFES SION. THE ASSESSEES CASE DOES NOT FALL U/S 44AA.UNDER SUB SE CTION (2) OF SECTION 44AA WHICH IS APPLICABLE TO THE CASE OF THE ASSESSEE, THE ASSESSEE WAS UNDER AN OBLIGATION TO MAINTAIN SU CH BOOKS OF ACCOUNT AS WOULD EN ABLE THE AO TO COMPUTE THE P ROFITS UNDER THE PROVISIONS OF INCOME-TAX ACT, 1961. WE HA VE PERUSED THE ASSESSMENT ORDER FOR THE YEAR UNDER APP EAL AND THE ORDER OF THE LD. CIT(A) AND WE FIND THAT ON INF ORMATION RECEIVED BY THE ASSESSING OFFICER, THE AO WAS ABLE TO COMPLETE THE ASSESSMENT UNDER THE PROVISIONS OF THE INCOME-T AX ACT, 1961. THE AO HAS NO DIFFICULTY FOR FRAMING THE ASSE SSMENT ORDER. WHEN THE ASSESSEE HAS NOT MAINTAINED ANY PRE SCRIBED BOOKS OF ACCOUNTS, HE HAS MAINTAINED SUCH RECORDS B Y WHICH THE AO CAN MAKE THE ASSESSMENT ORDER. THEREFORE, TH E PENALTY CANNOT BE LEVIED. IN THIS CASE, THE ASSESSEE HAS ON LY THE DEPOSITS IN THE BANK ACCOUNT AND THAT DEPOSIT WAS O NLY RS. 14.50 LAKHS, WHICH WAS ADDED U/S 69 OF THE ACT. THE REFORE, SHRI ASHISH KACHOLA, INDORE VS. ITO, 2(2), INDORE I.T.A.NO. 569/IND/2015 A.Y. 2010-11 6 6 THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUN TS. THEREFORE, IN OUR OPINION, THE PENALTY CANNOT BE LE VIED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 31 ST MARCH, 2016. CPU*