The ITO, Ward-6(2), Ahmedabad V. Rajendra Kantilal Patel, Ahmedabad

ITA 584/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85572 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACC OUNTANT MEMBER ITO WARD-6(2) AHEMEDABAD (APPELLANT) VS RAJENDRA KANTILAL PATEL D-8, TARUNNAGAR, SECTOR- 3, MEMNAGAR, GURUKUL ROAD, AHMEDABAD PAN: AGXPP1538R (RESPONDENT) REVENUE BY: SMT. SONIA KUMAR, SR. D.R. ASSESSEE BY: NONE DATE OF HEARING : 29-01-2015 DATE OF PRONOUNCEMENT : 06-02-20 15 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY THE REVENUE AGAINST THE O RDER OF CIT(A)-XI, AHMEDABAD DATED 17-12-2010 FOR A.Y. 2006-07. ITA NO. 584/AHD/2011 ASSESSMENT YEAR 2006-07 I.T.A NO. 584/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. RAJENDRA KANTILAL PATEL 2 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THOUGH N OTICE OF HEARING WAS SERVED ON THE ASSESSEE. WE THEREFORE PROCEED T O DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MA TERIAL ON RECORD. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. 4. ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED I N THE BUSINESS OF RETAIL TRADE OF MILK AND HAS A PROVISION STORE. AS SESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2006-07 DECLARING TOTAL INCOME AT R S. 1,03,135/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE A SSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 24-04-2008 AND THE TOT AL INCOME WAS DETERMINED AT RS. 12,05,140/-. AGGRIEVED BY THE OR DER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DAT ED 17-12-2010 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY T HE AFORESAID ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 11,02,000/- MADE U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN BANK ACCOUNT. 5. AO ON THE BASIS OF AIR INFORMATION RECEIVED FROM IDBI BANK LTD NOTICED THAT ASSESSEE HAD DEPOSITED CASH OF RS. 11, 02,000/- IN HIS SAVING BANK ACCOUNT. THE ASSESSEE WAS ASKED TO EXPLAIN TH E SOURCE OF CASH DEPOSITS. AO NOTED THAT ASSESSEE DESPITE VARIOUS O PPORTUNITIES GRANTED, DID NOT FURNISH ANY BILLS OR VOUCHERS OR CORROBORAT IVE EVIDENCE TO PROVE THAT HE WAS ENGAGED IN RETAIL TRADING BUSINESS AND FURTH ER THE SUBMISSION OF THE ASSESSEE OF HAVING DEPOSITED THE CASH IN SAVING BANK ACCOUNT OUT OF THE BUSINESS OF MILK AND PROVISION ITEMS WAS NOT FO UND ACCEPTABLE TO THE AO AS HE NOTED THAT ASSESSEE HAD NOT ISSUED ANY CHE QUES FOR PURCHASE OF ITEMS THAT WERE SOLD BY ASSESSEE. HE THEREFORE CON SIDERED THE GROSS I.T.A NO. 584/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. RAJENDRA KANTILAL PATEL 3 DEPOSITS OF RS. 11,02,000/- IN THE BANK ACCOUNT AS UNEXPLAINED AND TO BE OUT OF UNACCOUNTED INCOME AND ADDED IT U/S. 68 OF T HE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A). LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE D ELETED THE ADDITION BY HOLDING AS UNDER:- 2.1.2 IN ADDITION TO ABOVE, THE AR FILED WRITTEN S UBMISSIONS. THE SUMMARY OF RELEVANT PARAS OF THE SAME ARE REPRO DUCED HEREUNDER:- THE MODES OPERANDI OF APPELLANTS DAIRY BUSINESS WAS AS UNDER:- -THE APPELLANT WAS COLLECTING MILK FROM FOUR VILLAG ES NAMELY RANMCHARDA, UNALI, NANDOI AND RANCHODPARA. AT AN A VERAGE HE WAS COLLECTING 200 TO 250 LITERS MILK IN ONE DAY DE PENDING UPON SEASON. THIS MILK WAS COLLECTED TWICE IN A DAY I.E . IN MORNING AND EVENING. THIS MILK WAS COLLECTION IN CANES OF 10 T O 20 LITERS EACH. -THE APPELLANT WAS SELLING THIS MILK AS BELOW:- (I) 50 TO 70 LITERS WAS SOLD IN RANCHARDA VILLAGE I N RETAIL WHERE HE WAS CARRYING GENERAL PROVISION STORE ALSO. (II) 50 TO 70 LITER MILK WAS DELIVERED HOUSE TO HOU SE THROUGH TWO/THREE PERSONS WHO WERE CHARGING MONEY BASED ON DELIVERY QUANTITY. (III) HE WAS ALSO SUPPLYING MILK TO SHIVAM DAI RY AT SOLA ROAD AND TANUJA DAIRY AT GURUKUL ROAD. THUS AT AN AVERAGE HE WAS SELLING MILK OF RS.3,000/ - DAILY INCLUDING LARGE ORDERS TO SUPPLY MILK IN FUNCTION. (IV) FURTHER HE WAS SELLING VARIOUS ITEMS IN H IS PROVISION STORES SITUATED AT RANCHAND AND AVERAGE TOTAL SALES WAS OF RS. 400/-. -THE APPELLANT IS BASICALLY FROM VILLAGE BACKGROUND DOES NOT HAVE ANY INFRASTRUCTURE OR UNDERSTANDING FOR MAINTAINING BILLS, VOUCHERS BUT WAS KEEPING RECORDS IN ROUGH SHEET WHICH WERE G IVEN TO ADVISOR FOR PREPARING AND FILING RETURN. HOWEVER, HIS INCOM E-TAX ADVISOR WHO WAS HAPPENED TO BE TAX CONSULTANT HAS PREPARED ROUG H ACCOUNTS AND FILED THE RETURN SHOWING NET PROFIT OF 8.33% ON GROSS SALES AGAINST 5% PROVIDED U/S. 44AF AT IT ACT WITHOUT MEN TIONING THE SAME ON RETURN OF INCOME. -THE ASSESSING OFFICER HAD ONLY TAKEN INTO ACCOUNT CASH DEPOSITED IN BANK BUT NOT CONSIDERED CASH WITHDRAWAL. THE APPELL ANT HAD I.T.A NO. 584/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. RAJENDRA KANTILAL PATEL 4 DEPOSITED CASH OF RS. 11,02,000/- BEING HIS INCOME FROM DAIRY AND RETAIL BUSINESS AND WITHDRAWN RS . 8,72,510/- TO MAKE PAYMENT TO MILK SUPPLIER AND PROVISION ITEMS. -FURTHER, A.O. WHILE MAKING ADDITION REJECTED THE E XPLANATION GIVEN BY THE APPELLANT REGARDING HIS BUSINESS STATING THA T ' ASSESSEE HAS NOT BROUGHT ANYTHING ON RECORD TO PROVE THAT THE AS SESSEE IS ENGAGED IN RETAIL TRADING BUSINESS'. THIS WAS NEVER ASKED FROM THE APPELLANT, OTHERWISE HE WOULD HAVE SUBMITTED FOLLOW ING TWO DOCUMENTS. (I) COPY OF CERTIFICATE FROM SARPANCH, RANC HARDA GRAM PANCHYAT CERTIFYING THAT THE APPELLANT CARRYING MIL K BUSINESS IN THE VILLAGE. (II) COPY OF LICENSE ISSUED BY KHETIWADI UTP ANNA BAZAR SAMITY REGARDING CARRYING OUT RETAIL BUSINESS OF PROVISION STORES. -IN SUBSEQUENT ASSESSMENT YEAR THE SUBMISSIONS WERE ACCEPTED BY THE A.O. WHILE FINALIZING THE ASSESSMENT U/S. 143(3 ) FOR A.Y. 2007- 08. 2.1.3 IN VIEW OF THE ABOVE FACTS, IT IS SUBMITTED B Y THE A. R. OF THE APPELLANT THAT THE ASSESSING OFFICER IS NOT JUSTIFI ED IN MAKING ADDITION. 2.2. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A. R. OF THE APPELLANT AND THE OBSERVATIONS OF THE ASSESSING OFF ICER IN THE ASSESSMENT ORDER. THE CONTENTIONS OF THE LEARNED A. R. ARE TENABLE AND SUBSTANTIATED. CONSIDERING THE FACTS OF THE CAS E AND NATURE OF THE BUSINESS OF THE APPELLANT, I AM INCLINED TO ACC EPT THE CONTENTIONS PUT FORTH BY THE AR OF THE APPELLANT. WHILE MAKING THE ADDITION, A.O HAS ONLY TAKEN INTO ACCOUNT THE CASH DEPOSITED OF R S. 11,02,000/- ON VARIOUS DATES BY THE APPELLANT IN HIS SB ACCOUNT. HOWEVER, HE TOTALLY IGNORED THE CASH WITHDRAWALS OF RS. 8,72,51 0 ON VARIOUS DATES FROM THE SAME BANK ACCOUNT. THEREFORE, I AM OF THE VIEW THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AD DITION ON THIS COUNT. THE ADDITION MADE BY THE A.O. IS DELETED. THIS GROU ND OF APPEAL IS ALLOWED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. BEFORE US, LD. DR SUPPORTED THE ORDER O F AO. I.T.A NO. 584/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. RAJENDRA KANTILAL PATEL 5 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT LD. CIT(A) WHILE GRANTING THE RELIEF HAS NOTED THAT AO HAS ONLY CONSIDERED THE CASH DEPOSITS MADE BY THE ASSESSEE I N HIS BANK BUT HAD NOT CONSIDERED THE CASH WITHDRAWALS MADE BY THE ASS ESSEE ON VARIOUS DATES. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATE RIAL ON RECORD TO CONTROVERT THE FINDINGS OF LD. CIT(A). IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A) AN D THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 06/02/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / , .