Shri Sunil Motiram Jagtap, Nashik V. ITO, Ward 1(3), Nashik

ITA 572/PUN/2013

• Counselvise Citation: 57224514 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Business income; Opportunity of being heard

Judgement Text

INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 572/PN/2013 (ASSESSMENT YEAR : 2009-10) SHRI SUNIL MOTIRAM JAGTAP, ROW HOUSE NO.3, RAMKUTIR ROW HOUSES, GOSAVI MALA, OLD SAYKHEDA ROAD, NASHIK .. APPELLANT PAN NO.AHFPJ6777R VS. ITO, WARD-1(3), NASHIK .. RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE DEPARTMENT BY : SHRI B.C. MALAKAR DATE OF HEARING : 16-10-2014 DATE OF PRONOUNCEMENT : 21-10-2014 ORDER PER R.S. PADVEKAR, JM : THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING TH E IMPUGNED ORDER OF THE LD.CIT(A)-I, NASHIK DATED 16-01-2013 F OR THE A.Y. 2009-10. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING TWO GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LOWER AUTHORITIES ERRED IN MAKING THE ADDI TIONS OF RS.36,04,000/- TO THE RETURNED INCOME OF THE APPELL ANT BY DISREGARDING THE SUBMISSION MADE BY THE APPELLANT I N THIS REGARD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LOWER AUTHORITIES ERRED IN DENYING THE ALT ERNATE PLEA RAISED BY THE APPELLANT OF TREATING THE CASH DEPOSI T AS TURNOVER AND RESTRICTING THE GROSS PROFIT AS INCOME OF THE A PPELLANT.' 2 2.1 THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS AN INDIVIDUAL. HE FILED THE RETURN OF INCOME FOR THE A.Y. 2009-10 ON 26-10-2010 DECLARING TOTAL INCOME OF RS. 1,54,900/-. THE ASSESSING OFFICER ISSUED NOTICE U/S.143(2) AS T HE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER HAS O BSERVED THAT THE ASSESSEE SOUGHT THE ADJOURNMENT AND NOBODY ATTENDED . THE ASSESSING OFFICER AGAIN ISSUED ANOTHER NOTICE. IN RESPONSE TO THAT ONE SHRI SHASHANK YEOLA ATTENDED AND HE STATED BEFO RE THE ASSESSING OFFICER THAT THE ASSESSEE HAD UNDERGONE A MINOR OPERATION AND THEREFORE COULD NOT COMPLY EARLIER. THE ASSESSING OFFICER SOUGHT THE EXPLANATION OF THE ASSESSEE IN R ESPECT OF CASH DEPOSIT IN THE TWO BANK ACCOUNTS MADE BY THE ASSESS EE. IT APPEARS THAT ASSESSEES CASE WAS ADJOURNED BY THE ASSESSING OFFICER ON 24- 10-2011. THE ASSESSEE ATTENDED ON 09-12-2011 AND H E WAS ALLOWED TIME TILL 13-12-2011. AS OBSERVED BY THE A SSESSING OFFICER, THERE WAS NO COMPLIANCE AT THE END OF THE ASSESSEE. HE, THEREFORE, COMPLETED THE ASSESSMENT EXPARATE U/S.144 OF THE AC T AND MADE ADDITION OF RS.36,04,000/- IN RESPECT OF CASH DEPOS ITS OF RS.15,14,000/- IN THE SAVINGS BANK ACCOUNT WITH NAS HIK ROAD DEOLALI VYAPARI BANK AND RS.20,19,000/- WITH JANKAL YAN COOPERATIVE BANK RESPECTIVELY. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS.75,000/- IN RESPECT OF THE DEDUCTION CLAIMED UND ER CHAPTER VIA OF THE ACT BY OBSERVING THAT NO EVIDENCE IN SUPPORT OF THE CLAIM WAS MADE. THE ASSESSING OFFICER MADE HIGH-PITCH ASSESS MENT BY DETERMINING TOTAL INCOME OF RS.38,33,900/- AS AGAIN ST RS.1,54,900/- DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY BY WAY OF APPEAL BUT WITHOUT SUCCESS. TH E ASSESSEE PLEADED BEFORE THE LD.CIT(A) THAT THE DEPOSITS WITH THE BANK 3 ACCOUNTS ARE BUSINESS RECEIPTS AND THE ENTIRE AMOUN T CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE PLEADED FOR ADOPTING THE PERCENTAGE SPECIFIED U/S.44AF OF THE A CT WHICH IS TO BE TREATED AS PROFIT ELEMENT. 4. THE LD.CIT(A) WAS NOT IMPRESSED WITH THE PLEA OF THE ASSESSEE AND HE REJECTED THE GROUND TAKEN BY THE ASSESSEE AN D CONFIRMED THE ADDITION. HE ALSO CONFIRMED ADDITION OF RS.75,000/ -. NOW BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFOR E US. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . THE LD. COUNSEL SUBMITS THAT THE ASSESSEE IS A SMALL DEALER AND WHEN THE ASSESSMENT PROCEEDINGS WERE GOING ON, THE ASSESSEE HAD UNDERGONE OPERATION. MOREOVER, HIS CASE WAS NOT PROPERLY REP RESENTED BEFORE THE ASSESSING OFFICER. THE LD. COUNSEL REFERRED TO THE PAPER BOOK, MORE PARTICULARLY, THE PAGE NO.8 WHICH IS A COPY OF THE BALANCE SHEET AND PAGE 9 WHICH IS A COPY OF THE PROFIT AND LOSS ACCOUNT. THE LD. COUNSEL SUBMITS THAT THE ASSESSEE HAS ALREADY D ECLARED THOSE BANK ACCOUNTS IN THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME. HE SUBMITS THAT THERE WAS NO PROPER REPRES ENTATION OF THE ASSESSEES CASE WHO IS A SMALL DEALER AND ASSESSEE MAY BE GIVEN OPPORTUNITY TO REPRESENT HIS CASE EXPLAINING THE DE POSITS. 6. WE HAVE ALSO HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE. WE FIND THAT BEFORE THE ASSESSING OFFICER ASSESSEE SOU GHT THE ADJOURNMENT ON TWO OCCASIONS. THE ASSESSEE ALSO SU BMITTED BEFORE THE ASSESSING OFFICER THAT HE HAS UNDERGONE SURGERY . THE LD.CIT(A) TOTALLY REJECTED THE PLEA OF THE ASSESSEE. IN OUR OPINION, BOTH THE AUTHORITIES BELOW HAVE NOT DONE JUSTICE WITH THE AS SESSEE. AS PER THE SUBMISSION MADE BY THE LD. COUNSEL AT BAR, ASSE SSEE HAD FILED THE BALANCE SHEET ALONG WITH THE RETURN OF INCOME W HICH WAS BEFORE 4 THE ASSESSING OFFICER WHEN THE ASSESSMENT WAS COMPL ETED. WE ALSO FIND THAT AS PER THE STATEMENT OF THE LD. COUNSEL B OTH THE BANK ACCOUNTS WERE REFLECTED IN THE BALANCE SHEET. ONCE THE ACCOUNTS ARE REFLECTED IN THE BALANCE SHEET, THEN HOW THE ASSESS ING OFFICER CAN MAKE THE ENTIRE ADDITION. IN OUR OPINION, THE ACTI ON OF THE ASSESSING OFFICER IS VERY MUCH HIGH-HANDED. MOREOVER, WE HAV E TO CONSIDER ANOTHER ASPECT THAT ASSESSEE SHOULD NOT SUFFER DUE TO THE INEFFICIENT REPRESENTATION OF HIS AUTHORISED REPRESENTATIVE. W E, THEREFORE, SET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THE MA TTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO D ECIDE THE MATTER DE NOVO. NEEDLESS TO SAY, THE ASSESSEE SHOULD BE GIVE N AN OPPORTUNITY OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL JUS TICE. THE ASSESSING OFFICER SHOULD CONSIDER THE EXPLANATION OF THE ASSE SSEE AND THEN TO FRAME THE ASSESSMENT. ACCORDINGLY, THE GROUNDS TAK EN BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2014. SD/- SD/- (G.S.PANNU) (R. S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMB ER PUNE DATED: 21 ST OCTOBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, NASHIK 4. CIT-I, NASHIK 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, ITAT, PUNE BENCHES, PUNE