Manoj Hemnani, JODHPUR V. ITO, JODHPUR

ITA 570/JODH/2013

• Counselvise Citation: 57023314 RSA 2013
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Opportunity of being heard
• Section: 234B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NO. 570/JODH/2013 ASSESSMENT YEAR: 2008-09 PAN NO. ABBPH 6991 D MANOJ HEMNANI VS. THE I.T.O. A-59, DEFENCE COLONY, WARD-3(4) KAMLA NEHRU NAGAR, JODHPUR. JODHPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHAVEER JAIN. RESPONDENT BY : SHRI N.A. JOSHI, D.R. DATE OF HEARING : 24/04/2014 DATE OF PRONOUNCEMENT : 16/05/2014 ORDER PER N. K. SAINI: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 31/10/2013 OF LD. CIT(A), JODHPUR. FOLLOWING GROUNDS HAS BEEN RAISED IN THIS APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ASSESSMENT ORDER PASSED BY THE LD. ASSESSING OFFICE R WAS BAD IN LAW AND, THE LD. CIT(A) DID NOT JUSTIFY IN SUSTAINI NG THE SAME AND, THEREFORE, THE APPELLANT APPEALS FOR CANCELLATION O F THE ASSESSMENT ORDER. MORE SPECIFICALLY, THE APPELLANT APPEALS THA T AS THE NOTICE U/S 143(2) WAS SERVED ON A DATE WHICH FELL BEYOND T HE TIME LIMIT PRESCRIBED IN THE PROVISO TO SUB SECTION (2) OF SEC TION. 143, THE IMPUGNED ASSESSMENT ORDER WAS INVALID AND, THEREFOR E, THE LD. CIT(A) DID NOT JUSTIFY IN SUSTAINING THE SAME. 2 2. THAT WITHOUT ANY PREJUDICE TO THE GROUND NO. 1 ST OF THIS MEMORANDUM OF APPEAL, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE LD. CIT(A) DID NOT JUSTIFY IN SUSTAIN ING THE ADDITION AS MADE BY THE LD. ASSESSING OFFICER, TO THE EXTENT OF RS. 75,060/- BY TREATING CASH INTRODUCED IN THE FIRM AS PARTLY UNEX PLAINED INVESTMENT. THE APPELLANT APPEALS FOR DIRECTING THE LD. ASSESSING OFFICER FOR DELETING THE SUSTAINED AMOUNT OF ADDITI ON. 3. THAT THE LEARNED ASSESSING OFFICER DID NOT JUST IFY IN CHARGING INTEREST U/S 234A, 234B AND 234C OF THE I. T. ACT, 1961 4. THAT THE APPELLANT CRAVES OPPORTUNITY FOR FURNI SHING ANY OTHER GROUND/S OF APPEAL ON OR BEFORE THE DATE OF A PPEAL HEARING. 2. GROUND NO. 4 OF THE APPEAL IS GENERAL IN NATURE AND GROUND NO. 1 WAS NOT PRESSED. SO THESE GROUNDS DO NOT REQUIRE ANY AD JUDICATION ON OUR PART. 3. VIDE GROUND NO. 2, THE GRIEVANCE OF THE ASSESSE E RELATES TO SUSTENANCE OF ADDITION OF RS. 75,060/-. 4. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT TH E ASSESSEE FILED THE RETURN OF INCOME ON 31/11/2010 DECLARING AN INCOME OF RS. 2,37,821/-. SINCE THE RETURN WAS BARRED BY LIMITATION OF TIME AS THE SAME WAS TO BE FILED ON 31/7/2008, THEREFORE, TO REGULARISE THE RETURN, ACT ION U/S 147 OF THE I.T. ACT, 1961 (HEREAFTER REFERRED AS THE ACT) WAS TAKEN BY T HE ASSESSING OFFICER BY ISSUING NOTICE U/S 148 OF THE ACT. DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD INTRODUCED CASH OF RS. 2,12,500/- IN THE FIRM M/S KRISHNA. THE EXPLANATION OF THE ASSESSEE WAS THAT THE AMOUNT DEPOSITED WAS OUT OF T HE WITHDRAWALS MADE EARLIER. THE ASSESSING OFFICER, HOWEVER, ALLOWED TH E BENEFIT OF UNSECURED 3 LOANS OF RS. 30,000/- FROM THE TWO CASH CREDITS AS THEIR PAN WERE FURNISHED BEFORE HIM AND THE REMAINING AMOUNT OF RS. 1,82,500 /- WAS ADDED TO THE INCOME OF THE ASSESSEE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE DEPOSITED RS. 2,12,500/ - AS A PARTNER IN THE FIRM M/S KRISHNA AND THE SOURCE OF THAT DEPOSIT WAS RS. 1,70,500/- WITHDRAWN EARLIER FROM THE SAME FIRM AND CASH CREDIT OF RS. 4 3,500/- WERE FROM FOUR PERSONS NAMELY ANIL BACHHAWAT (RS. 15,000/-), MUKES H SHERA (RS. 7,000/-), AVINASH BARASA (RS. 6,500/-) AND ASHVINI KUMAR TOND ON (RS. 15,000/-). IT WAS FURTHER STATED THAT THERE WAS NO DISPUTE ABOUT THE FACTS OF WITHDRAWAL OF RS. 1,70,500/- FROM THE FIRM AND CASH CREDITS FROM SHRI ANIL BACHHAWAT AND SHRI ASHVINI KUMAR TONDON AND THAT THE ASSESSING OF FICER CONSIDERED THE CASH CREDITS FROM SHRI MUKESH SHERA AND SHRI AVINAS H BARASA AS NON- GENUINE FOR THE REASON THAT THEIR CONFIRMATIONS WER E NOT BEARING PANS. IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER WRONGL Y ASSUMED THAT TOTAL AMOUNT OF RS. 1,70,500/- WAS USED FOR THE ASSESSEE S VARIOUS NEEDS AND FOR DEPOSITING PETTY CASH AMOUNTS (TOTALLING TO RS. 27, 060/-) IN THE ASSESSEES BANK ACCOUNT. IT WAS SUBMITTED THAT THE ASSESSEES EXPLANATION BEFORE THE ASSESSING OFFICER THAT FOR HOUSEHOLD AND PERSONAL E XPENSES, HE WAS DEPENDENT ON HIS FATHER AND ELDER BROTHER, BUT THE ASSESSING OFFICER IGNORED THIS FACT AND MADE THE ADDITION OF RS. 1,82,500/-. 4 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE COULD NOT FURNISH THE PA N NUMBER OF SHRI MUKESH SHERA AND SHRI AVINASH BARASA FROM WHOM RS. 7,000/- AND RS. 6,500/- RESPECTIVELY WERE RECEIVED. THEREFORE, IT REMAINED UNPROVED AND THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDIT ION IN RESPECT OF THOSE CASH CREDITS. HE, FURTHER OBSERVED THAT THE ASSESSING OF FICER HAD NOT DOUBTED WITHDRAWAL FROM THE FIRM ITSELF AS HE HAD NOT REBUT TED THE SUBMISSION OF THE ASSESSEE, HOWEVER, HE TREATED THE AMOUNT OF RS. 1,7 0,500/- AS BEING WITHDRAWN FOR THE DAILY HOUSEHOLD NEEDS AND IN DEPO SITING PETTY CASH AMOUNT OF RS. 27,060/- IN THE BANK ACCOUNT. THE LD. CIT(A) OBSERVED THAT THE ACTION OF THE ASSESSING OFFICER WAS NOT FULLY JUSTIFIED IN CONSIDERING THE ENTIRE WITHDRAWALS FOR HOUSEHOLD EXPENSES WITHOUT RECORDIN G POSITIVE FINDING THAT THE ASSESSEE HAD INCURRED PARTICULAR AMOUNT ON EXPENDIT URE OR SPENT ON CONSUMPTION. HE FURTHER OBSERVED THAT THE ASSESSING OFFICER HAD NOT CONDUCTED ANY INQUIRY TO ESTABLISH THAT THE ASSESSE E HAD INCURRED AN AMOUNT OF RS. 1,43,440/- (RS. 1,70,500/- - RS. 27,060/- AS PETTY CASH DEPOSITS IN BANK), FOR HIS HOUSEHOLD EXPENSES OR HE WAS NOT DEP ENDENT UPON HIS FAMILY FOR THIS PURPOSE. THE ASSESSING OFFICER, HOWEVER, E STIMATED RS. 36,000/- TO BE SPENT TOWARDS HOUSEHOLD AND PERSONAL NEEDS. HE, THE REFORE, HELD THAT A SUM OF RS.1,07,440/- (RS. 1,70,500/- - RS. 36,000/- - R S. 27,060/-) WAS AVAILABLE WITH THE ASSESSEE FOR CASH INVESTMENT AND THAT THE ASSESSING OFFICER HAD TREATED LOAN OF RS. 30,000/- AS EXPLAINED AND THE B ALANCE AMOUNT OF RS. 75,060/- WAS TO BE TREATED AS UNEXPLAINED INVESTMEN T, ACCORDINGLY, THE 5 ADDITION TO THE EXTENT OF RS. 75,060/- WAS SUSTAINE D. NOW THE ASSESSEE IS IN APPEAL. 7. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE FURNISHED THE CONFIRMATION FROM SHRI MUKESH SHERA AND SHRI AV INASH BARASA FOR CASH CREDIT TO RS. 7,000/- AND RS. 6,500/- RESPECTIVELY, SHOWING THEIR IDENTITY AND CAPACITY TO ADVANCE SMALL AMOUNTS, THEREFORE, THERE WAS NO JUSTIFICATION IN SUSTAINING THE ADDITION OF RS. 13,500/-. IT WAS FUR THER SUBMITTED THAT THE ADDITION OF RS. 27,060/- WAS MADE WITHOUT ANY INQUI RY, WHICH WAS DEPOSITED ON DIFFERENT DATES BUT THE ASSESSING OFFICER AS WEL L AS THE LD. CIT(A) WRONGLY ASSUMED THAT THE SAID AMOUNT WAS DEPOSITED OUT OF W ITHDRAWAL OF RS. 1,70,500/- EVEN WHEN NO SUCH QUESTION WAS ASKED. TH EREFORE, THE SAID ADDITION SUSTAINED WAS NOT JUSTIFIED AND THERE WAS ALSO NO JUSTIFICATION FOR ESTIMATING THE HOUSEHOLD EXPENSES OF RS. 36,000/- P ARTICULARLY WHEN THE ASSESSEE REMAINED DEPENDENT ON HIS FATHER AND THE E LDER BROTHER. 8. IN HIS RIVAL SUBMISSIONS, THE LEARNED D.R. SUPPO RTED THE IMPUGNED ORDER OF THE LD. CIT(A). 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE FURNISHED THE CONFIRMATIO N FROM SHRI MUKESH SHERA AND SHRI AVINASH BARASA FROM WHOM CREDITS OF RS. 7, 000/- AND RS. 6,500/- WERE RECEIVED. THE CONTENTS OF THE SAID CONFIRMATIO NS SHOWING THE IDENTITY OF 6 CASH CREDITORS AND THEIR CAPACITY TO ADVANCE, WAS N OT DOUBTED. WE, THEREFORE, CONSIDERING THE SMALLNESS OF THE AMOUNT, ARE OF THE VIEW THAT THE ADDITION OF RS. 13,500/- SUSTAINED BY THE LD. CIT(A), WAS NOT J USTIFIED. IT IS ALSO NOTICED THAT THE LD. CIT(A) ESTIMATED THE HOUSEHOLD EXPENSE S OF THE ASSESSEE AT RS. 36,000/- WITHOUT REBUTTING THIS EXPLANATION OF THE ASSESSEE THAT HE WAS DEPENDANT UPON HIS FATHER SHRI RAJ KUMAR HEMNANI AN D ELDER BROTHER SHRI LALIT KUMAR HEMNANI, HE WAS HAVING SCARCITY OF FUND S AND WAS TRYING TO SETTLE IN THE BUSINESS, THEREFORE, THE ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES AMOUNTING TO RS. 36,000/- WAS ALSO NOT JUSTIFIED. A CCORDINGLY, THE SAME IS DELETED ALONGWITH ADDITION OF RS. 13,500/- SUSTAINE D BY THE LD. CIT(A) ON ACCOUNT OF CASH CREDITS. THE REMAINING ADDITION OF RS. 27,060/- RELATES TO THE DEPOSITS IN THE SAVINGS BANK ACCOUNT, THE CONTENTIO N OF THE LEANED COUNSEL FOR THE ASSESSEE WAS THAT THE ASSESSING OFFICER DID NOT ASK ANY QUESTION ABOUT THE SAID DEPOSITS, THEREFORE, NO EXPLANATION FOR TH E SAME WAS GIVEN. WE, THEREFORE, DEEM IT APPROPRIATE TO SET ASIDE THIS LI MITED ISSUE TO THE FILE OF THE ASSESSING OFFICER AND IF THE ASSESSEE IS IN A POSIT ION TO EXPLAIN THE SOURCE OF THE SAID DEPOSITS, THEN NO ADDITION IS CALLED FOR. ACCORDINGLY, THIS LIMITED ISSUE RELATING TO ADDITION OF RS. 27,060/- IS REMANDED TO THE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED AFTER PROVIDING DUE AND R EASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. THE NEXT ISSUE VIDE GROUND NO. 3 RELATES TO THE CHARGING OF INTEREST U/S 234A, 234B AND 234C OF THE ACT. AS REGARDS TO THIS ISSUE, IT WAS A COMMON 7 CONTENTION OF BOTH THE PARTIES THAT IT IS CONSEQUEN TIAL IN NATURE, WE, ORDER, ACCORDINGLY. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2014) . SD/- SD/- (HARI OM MARATHA) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH MAY, 2014 *RANJAN COPY FORWARDED TO: 1. APPELLANT- 2. RESPONDENT- 3. CIT(A) 4. CIT 5. D.R. BY ORDER ASSISTANT REGISTRAR ITAT, JODHPUR.