Shri Rajaram Kumawat, Dewas V. Income Tax Officer, Dewas, Dewas

ITA 580/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1227 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-03-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 18-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C SELVAMANI
• Assessee Lawyers: S S DESH
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3)

Judgement Text

RAJARAM KUMAWAT ITA NO. 580/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.580/IND/2017 ASSESSMENT YEAR 2011-12 REVENUE BY SHRI K.C. SELVAMANI, SR.DR ASSESSEE BY SHRI S.S.DESHPANDE , CA DATE OF HEARING 19 .03 .2019 DATE OF PRONOUNCEMENT 22 .0 3 .2019 O R D E R PER MANISH BORAD. THE ABOVE CAPTIONED APPEAL IS FILED AT THE INSTANC E OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2011-12 AND IS DIRE CTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS) (IN SHORT LD.CIT(A)], UJJAIN DATED 29.05.2017 WHICH IS ARI SING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHOR T THE ACT) DATED 29.03.2014 FRAMED BY ITO, DEWAS. SH RI RAJARAM KUMAWAT, 192, BAWDIYA, DEWAS VS. INCOME TAX OFFICER, DEWAS ( APPELLANT ) (RESPONDENT ) PAN NO. ALTPK7982P RAJARAM KUMAWAT ITA NO. 580/IND/2017 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL; 1. THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDIT ION OF RS.58,30,000/- BEING THE CASH DEPOSITS IN THE BANK. 2. IT WAS PROVED BEFORE THE LOWER AUTHORITIES THAT THE AMOUNT DEPOSITED WERE OUT OF THE SALE PROCEEDS OF THE AGRICULTURE LA NDS OF THE ASSESSEE AND HIS WIFE AND WERE OUT OF THE FIXED DEPOSITS TAKEN. THE NECESSARY CERTIFICATES WERE FILED BEFORE THE LOWER AUTHORITIE S WHICH ARE NOT BEEN CONSIDERED. 3. THE ADDITION OF RS.58,30,000/- MAY PLEASE BE DEL ETED. 4. THE ASSESSMENT FRAMED IS ILLEGAL AND BAD IN LAW AND THE REOPENING OF THE ASSESSMENT IS BAD IN LAW. 5. THE ASSESSEE PRAYS TO ALTER, AMEND, ADD OR DELET E ANY OF THE GROUNDS OF APPEAL. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM S ALARY. RETURN OF INCOME FILED ON 8.10.2012 DECLARING INCOME OF RS.1, 20,000/-. CASE SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. ON VERIFICATION OF TH E AIR, LD. A.O NOTICED THAT CASH HAS BEEN DEPOSITED ON VARIOUS DAT ES IN THE SAVING BANK ACCOUNT TOTALING TO RS.58,30,000/-. ASSESSEE CONTENDED BEFORE LD. A.O THAT PART AMOUNTS RELATES TO PARTNER SHIP FIRM OF M/S. CHAMUNDA BEST TOOLS, AMOUNT RECEIVED FROM HIS WIFE ON MATURITY OF FIXED DEPOSITS. HOWEVER LD. A.O WAS NOT SATISFI ED WITH THE DETAILS AND EVIDENCE FILED BY THE ASSESSEE AND CONC LUDED THE RAJARAM KUMAWAT ITA NO. 580/IND/2017 3 ASSESSMENT BY MAKING ADDITION FOR UNEXPLAINED CREDI T OF RS.58,30,000/- AND ACCORDINGLY ASSESSED THE INCOME AT RS.59,50,000/-. 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) BUT FAILED TO SUCCEED. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 6. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REQUE STING FOR SETTING ASIDE THE ISSUES RAISED IN THIS APPEAL TO T HE FILE OF LD. CIT(A) FOR AFRESH ADJUDICATION SUBMITTED THAT LD. CIT(A) F AILED TO APPRECIATE THAT AMOUNT OF RS.6,30,000/- RELATED TO THE DEPOSITS MADE IN THE BUSINESS CONCERN FIRM M/S. CHAMUNDA BES T TOOLS, RS.27,00,000/- WAS THE AMOUNT WHICH HAD ITS SOURCE FROM FIXED DEPOSITS IN THE NAME OF HIS WIFE SMT. SHANTA BAI WH ICH WERE MATURED AND SIMILARLY RS.25,00,000/- WAS HAVING ITS NEXUS WITH FIXED DEPOSIT IN THE BANK IN THE NAME OF ASSESSEE. REFERENCE WAS ALSO MADE TO THE SALE DEEDS OF AGRICULTURAL AND IND USTRIAL SHED WHICH WERE SOLD BY THE ASSESSEE AND HIS WIFE AND TH E SALE CONSIDERATION WAS USED TO MAKE FIXED DEPOSITS. RAJARAM KUMAWAT ITA NO. 580/IND/2017 4 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED AND SUPPORTING THE ORDERS OF LD. CIT(A) ALSO SUBMITTED THAT IN THE ALLEGED SALE DEEDS OF AGRICULTURE LAND AND I NDUSTRIAL SHEDS CONSIDERATION HAVE BEEN RECEIVED BY ACCOUNT PAYEE C HEQUES EXCEPT FOR CASH OF RS.11,751/- RECEIVED IN CASH. LD. A.O ALSO SUBMITTED THAT NOTHING HAS BEEN PLACED ON RECORD TO PROVE THE SOURCE OF DEPOSITS, THEIR MATURITY, AMOUNT WITHDRAWN FROM THE BANK AND THE REASON FOR DEPOSITING CASH. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THOUGH THE ASSESSEE HAS RAISED F IVE GROUNDS OF APPEAL BUT THE SOLE GRIEVANCE RELATES TO THE UPHOLD ING THE ADDITION OF RS.58,30,000/- BY LD. CIT(A) CONFIRMING THE UNEX PLAINED CASH DEPOSIT ADDITION MADE BY LD. A.O FOR THE FOLLOWING AMOUNTS; DATE AMOUNT IN THE NAME OF 06.12.2010 3,50,000 M/S. CHAMUNDA BEST TOOLS 12.03.2011 2,80,000 - DO - 2010 - 11 11,50,000 SH.RAJARAM MATHURALAL KUMAWAT 2010 - 11 14,00,000 SMT. SHANTA BAI W/O RAJARAM 06.07.2010 13,50,000 RAJARAM MATHURALAL KUMAWAT 06.07.2010 13,00,000 SHANTABAI W/O RAJARAM TOTAL 58,30,000 RAJARAM KUMAWAT ITA NO. 580/IND/2017 5 9. THE ABOVE DETAILS OF CASH DEPOSITS CAME TO THE K NOWLEDGE OF THE LD. A.O ON THE BASIS OF ANNUAL INFORMATION REPO RT WHICH IS GENERATED ON THE BASIS OF PERMANENT ACCOUNT NUMBER OF THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE HAS NOWHERE DISPUTED THAT THE ALLEGED CASH DEPOSIT ENTRIES DOES NOT RELATES T O THE ASSESSEE. 10. WE OBSERVE THAT THE LD. CIT(A) CONFIRMED THE AD DITION OF RS.58,30,000/- OBSERVING AS FOLLOWS; 4.2 GROUND NO.2 & 3:- THROUGH THESE GROUNDS OF APPEAL THE APPELLANTS HAS CHALLENGED THE ADDITION OF RS.S8.30 ,OOO/- ON ACCOUNT OF CASH DEPOSIT IN SAVING BANK ACCOUNT. THE APPELLANT HAS DEPOSITED THE CASH IN THE SAVING BANK ACCOUNT AS UNDER :- DATE AMOUNT IN THE NAME OF 06.12.2010 3,50,000 M/S. CHAMUNDA BEST TOOLS 12.03.2011 2,80,000 - DO - 2010 - 11 11,50,000 SH.RAJARAM MATHURALAL KUMAWAT 2010 - 11 14,00,000 SMT. SHANTA BAI W/O RAJARAM 06.07.2010 13,50,000 RAJARAM MATHURALAL KUMAWAT 06.07.2010 13,00,000 SHANTABAI W/O RAJARAM TOTAL 58,30,000 M/S. CHAMUNDA BEST TOOLS: RS.3,50,000/- & RS.2,80, 000/- . IN RESPECT OF THE ABOVE DEPOSIT THE APPELLANT SUBMITTED THAT T HESE ARE THE BUSINESS TRANSACTIONS. WHILE GOING THROUGH THE BANK ACCOUNT OF THE M/S. CHAMUNDA BES T TOOLS. THE APPELLANT WAS DEPOSITING VERY NOMINAL AMOUNT RAJARAM KUMAWAT ITA NO. 580/IND/2017 6 IN THE BANK ACCOUNT ON THE EARLIER OCCASION. THE APPELLANT FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT:. NO DOCUMENTARY EVIDENCE IS FURNIS HED IN SUPPORT OF HIS CLAIM. IN SPITE OF MUCH OPPORTUNITY DURING THE ORIGINAL APPELLATE PROCEEDINGS AS WELL AS DURIN G THIS APPELLATE PROCEEDINGS THE APPELLANT FAILED TO ESTABLISH THE S OURCE OF CASH DEPOSIT. SH. RAJARAM MATHURALAL KUMAWAT & SMT. SHANTA BAI W/ O RAJARAM RS. 11,50,000/-, RS.14,00,000/-, RS.13,50,000/- & RS. 13,OO,OOO/-. THE APPELLANT SUBMITTED THAT THE SOURCE OF CASH DEPOSIT IS FROM SALE OF INDUSTRIAL LAND SOLD TO SHRI UMESH KURNAR BIRLA. T HE APPELLANT FURNISHED THE ALE DEED IN PORT OF HIS CLAIM. WHILE GOING THROUGH THE SALE DEEDS FURNISHED BY THE APPELLANT. IT IS ; FOUND THAT THE APPELLANT HAS RECEIVED SALE CONSIDERATION IN CHEQUE. NOWHERE THE APPELLANT IS IN RECEIPT OF THE SALE CONS IDERATION IN CASH THE APPELLANT REPEATEDLY FAILED TO PRODU CE THE SOUR OF CASH DEPOSIT. THEREFORE, THE ADDITION MADE BY THE AO AMOUNTING TO RS.58,30,000/- IS CONFIRMED. THE APPEAL ON THESE G ROUNDS IS DISMISSED. 11. LD. COUNSEL FOR THE ASSESSEE WHILE MAKING ARGUM ENT BEFORE US REFERRED TO THE FOLLOWING WRITTEN SUBMISSIONS PLACE D ON RECORD; ON THE BASIS OF AIR INFORMATION THIS CASE WAS SCRU TINIZED. THE LD. AO ASKED THE ASSESSEE TO EXPLAIN THE DEPOSITS IN THE B ANK. IT WAS SUBMITTED BEFORE THE LD. AO THAT THE CASH DEPOSIT AND FIXED D EPOSITS IN THE BANK ARE TAKEN FROM THE AMOUNTS RECEIVED ON THE SALE OF AGRICULTURE LAND IN THE NAME OF SMT. SHANTA BAI WIFE OF THE ASSESSEE ON 11.09.2008 AND 23.08.2005 (PG.14 AND PG 31 OF PB). IT WAS FURTHER SUBMITTED THAT HE RAJARAM KUMAWAT ITA NO. 580/IND/2017 7 ASSESSEE ALSO SOLD THE INDUSTRIAL SHED IN THE INDUS TRIAL ESTATE OF DEWAS ON 01.12.2008 FOR RS. 5,11,751/- WHICH WERE USED FO R THE DEPOSIT IN THE BANK THE ASSESSEE STOPPED HIS BUSINESS OF MANUFACTU RING BOXES IN THE YEAR 2008 AND THE RECOVERIES OF THIS BUSINESS WERE ALSO DEPOSITED IN THE BANK. WHILE FRAMING THE ASSESSMENT THE LD. AO DID NOT ACC EPT THE CONTENTION OF THE ASSESSEE AND MADE ADDITIONS OF RS. 58,30,000/- BEING DEPOSITS IN THE BANK IN THE NAME OF THE ASSESSEE AS ALSO IN THE NAME OF HIS WIFE AND THE PARTNERSHIP FIRM. THE LD. AO MADE THE ADDITIONS AS UNDER. RS.6,30,000/- DEPOSITS IN CHAMUNDA BEST TOOLS. RS. 27,00,000/- FIXED DEPOSITS IN THE NAME OF SHANTA BAI (WIFE) RS. 25,00,0001- FIXED DEPOSITS IN THE BANK IN THE NAME OF SELF. THE SALE DEEDS OF AGRICULTURE LANDS AND INDUSTRIAL SHEDS WERE FILED BEFORE THE LD. CIT(A). THE BANK CERTIFICATES WERE ALSO FIL ED SHOWING THE FIXED DEPOSITS MADE EARLIER AND THE WITHDRAWAL OF CASH ON THE EXPIRY OF TERM OF THE DEPOSITS OR PREMATURE CLOSURE. THESE PAPERS WER E NOT CONSIDERED BY THE LD. CIT(A) AND HE SIMPLY OBSERVED THAT IN THE S ALE DEED THE ASSESSEE RECEIVED THE CHEQUES AND NOWHERE THE CASH WAS RECEI VED. THE ASSESSEE HAS FAILED TO PRODUCE THE SOURCE OF CASH DEPOSITS A ND AS SUCH THE ADDITION IS CONFIRMED. RAJARAM KUMAWAT ITA NO. 580/IND/2017 8 ARGUMENTS: IT IS HUMBLY SUBMITTED THAT THE LOWER AUTHORITIES D ID NOT CONSIDER THE SALE DEEDS AND THE BANK CERTIFICATES FILED SHOWING THAT THE DEPOSITS IN THE BANK WERE OUT OF THE SALE PROCEEDS OF THE IMMOV ABLE PROPERTIES. THE ASSESSEE HAD ALSO TAKEN THE OVERDRAFT FACILITIES FR OM THE BANK ( PG 68 OF PB) AND WITHDRAWN CASH FROM THE BANK ON VARIOUS DAT ES WHICH WERE AVAILABLE FOR DEPOSITING IN THE BANK. THESE ASPECTS HAVE NOT BEEN CONSIDERED BY THE LD. CIT(A) WHEN ALL THE NECESSARY CERTIFICATES OF THE BANK WERE FILED BEFORE HIM. UNDER NO CIRCUMSTANCES THE FIXED DEPOSITS OFRS.27,00,000/- IN THE NAME OF WIFE SMT. SHANTA BAI RAJARAM CAN BE TAXED IN THE HANDS OF THE ASSESSEE WHEN SHE HAD AN INDEPENDENT SOURCE BY WAY OF SALE DEED OF AGRICULTURE LANDS IN HER NAME (PAGE 14 AND PAGE 28 OF PB) . IT IS FURTHER SUBMITTED THAT THE DEPOSITS OF RS. 6,30,000/- IN THE ACCOUNT OF CHAMUNDA BEST TOOLS WHICH IS A PARTNERSHIP CONCERN CANNOT BE TAXED IN THE HAND OF ASSESSEE. THE FIXED DEPOSITS IN THE NAM E OF ASSESSEE ARE FROM THE SALE PROCEEDS OF THE SHED OF MANOJ BOX PACKERS AND FROM THE REALIZATION OF ASSETS ON CLOSURE OF HIS BUSINESS. F URTHER THE AMOUNT FROM THE SALE OF THE AGRICULTURE LANDS OF THE WIFE WERE ALSO AVAILABLE FOR THE DEPOSITS IN THE BANK. RAJARAM KUMAWAT ITA NO. 580/IND/2017 9 12. FROM PERUSAL OF THE ABOVE WRITTEN SUBMISSIONS IT IS NOTEWORTHY THAT EFFORTS HAVE BEEN MADE BY THE LD. C OUNSEL FOR THE ASSESSEE TO PROVE THE NEXUS OF SALE CONSIDERATION R ECEIVED FROM SALE OF INDUSTRIAL LAND, AGRICULTURAL LAND, MATURITY OF FIXED DEPOSIT RECEIPTS. FROM PERUSAL OF THE SALE DEED PAGE 631 O F THE PAPER BOOK IT TRANSPIRES THAT FOR THE SALE OF INDUSTRIAL LAND AT PLOT NO.142, AB ROAD, DEWAS THE SALE CONSIDERATION IS SHOWN AT RS.5 ,11,751/- OUT OF WHICH RS.11,751/- HAVE BEEN RECEIVED IN CASH AND THE REMAINING AMOUNT IS BY ACCOUNT PAYEE CHEQUE. SIMILARLY FOR S ALE OF AGRICULTURAL LAND OWNED BY THE ASSESSEES WIFE THE SALE CONSIDERATION IS MENTIONED AT RS.29,39,500/- AND TH E TOTAL CONSIDERATION HAVE BEEN RECEIVED BY ACCOUNT PAYEE C HEQUE AND THERE IS NO MENTION OF ANY CASH AMOUNT RECEIVED BY THE ASSESSEE. SIMILARLY FOR THE FIXED DEPOSIT RECEIPTS IN THE NAM E OF THE ASSESSEES WIFE NECESSARY DETAILS WITH THE CASH FLO W STATEMENT HAS NOT BEEN PLACED TO SHOW THAT THE FIXED DEPOSITS WER E HELD IN THE NAME OF ASSESSEE/WIFE, WHEN THEY GOT MATURED, SALE CONSIDERATION HAVE BEEN REMITTED BACK TO THE BANK ACCOUNT AND THE CASH AMOUNT RAJARAM KUMAWAT ITA NO. 580/IND/2017 10 WITHDRAWN. THIS FACT ALSO NEEDS VERIFICATION THAT T HE SALE CONSIDERATION OF THE SALE OF PROPERTIES IN THE NAME OF ASSESSEE AND HIS WIFE AS CLAIMED BY THE LD. COUNSEL FOR THE ASSE SSEE WERE DEPOSITED IN THE BANK ACCOUNT WHICH APPARENTLY SEEM S TO BE DURING FINANCIAL YEAR 2008-09 AND AFTER THIS DEPOSITS, FIX ED DEPOSIT RECEIPTS WERE MADE BY THE ASSESSEE AND DURING THE Y EAR UNDER APPEAL THE FIXED DEPOSITS GOT MATURED/BEING EN-CASH ED. 13. IN OUR CONSIDERED OPINION LD. CIT(A) BEFORE COM ING TO THE FINDING HAS NOT EXAMINED VARIOUS FACTS OF THE CASE WHICH WERE PUT FORTH BY THE ASSESSEE DURING THE COURSE OF APPELLAT E PROCEEDINGS. IN THE INTEREST OF JUSTICE AND TO BE FAIR TO BOTH THE PARTIES WE ARE OF THE OPINION THAT THE ISSUES RAISED IN THE INSTANT APPEA L NEEDS TO BE SET ASIDE TO THE FILE OF LD. CIT(A) FOR DENOVO ADJUDICATION IN THE LIGHT OF OUR OBSERVATIONS MENTIONED IN THE PRECEDING PARAS A S WELL AS THE REMAND REPORT TO BE CALLED FROM THE ASSESSING OFFIC ER VERIFYING THE SUBMISSION MADE BY THE ASSESSEE. NEEDLESS TO MENTI ON THAT PROPER OPPORTUNITY OF BEING HEARD SHOULD BE PROVIDED TO TH E ASSESSEE FOR PRESENTING THE RECORDS. RAJARAM KUMAWAT ITA NO. 580/IND/2017 11 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.201 9. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 22 MARCH, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE