Mr.Sanjeev Baburao Dhuli , Uttarkannada V. The Income Tax Officer Ward-2(3), Hubbali

ITA 59/BANG/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3417 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 07-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B S VIMALA
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT ITA NO. 59/BANG/2019 ASSESSMENT YEAR : 2015 - 16 SHRI SANJEEV BABURAO DHULI, # 05, NEAR FISH MARKET, YELLAPUR ROAD, HALIYAL 581 329. UTTARA KANNADA DISTRICT. PAN: AEPPD 8602N VS. THE INCOME TAX OFFICER, WARD 2(3), HUBBALLI. APP ELLANT RESPONDENT APP ELLANT BY : MS. B.S. VIMALA, CA RESPONDENT BY : SHRI RAJENDRA CHANDEKAR, JCIT DATE OF HEARING : 29 .01.2019 DATE OF PRONOUN CEMENT : 20 . 02 . 201 9 O R D E R THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 23.10.2018 OF THE CIT(APPEALS), HUBBALLI RELATING TO ASSESSMEN T YEAR 2015-16. 2. THE ASSESSEE IS AN INDIVIDUAL. HE CARRIES OUT C IVIL CONTRACT WORK AT HALIYAL. FOR THE AY 2015-16 HE FILED RETURN OF INC OME DECLARING TOTAL INCOME OF RS.5,40,130. THE AO DID NOT DISPUTE THE FACT THAT THE ASSESSEE CARRIED OUT GOVT. CIVIL CONTRACT WORKS OF THE VALUE OF RS.6,24,053 ON WHICH HE DECLARED 8% INCOME AMOUNTING TO RS.49,925. THE ASSESSEE ALSO UNDERTOOK PRIVATE CONTRACT WORKS WORTH RS.63,90,000 ON WHICH HE DECLARED ITA NO. 59/BANG/2019 PAGE 2 OF 4 8% AS HIS INCOME AMOUNTING TO RS.5,11,200. ALL THE DETAILS WERE FURNISHED BY THE ASSESSEE BEFORE THE AO AND THEY WERE VERIFIE D. 3. THE AO NOTICED THAT THE ASSESSEE HAD MADE DEPOSI TS IN HIS BANK ACCOUNT IN CASH. WHEN ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT, THE ASSESSEE ATTRIBUTED THE SAME TO T HE CONTRACT RECEIPTS WHICH WERE DEPOSITED AND WITHDRAWN AS PER THE REQUI REMENTS. THE AO, HOWEVER, REFUSED TO ACCEPT THE EXPLANATION OF THE A SSESSEE AND HE HELD THAT ONLY INCOME FROM EXECUTING THE CONTRACT WORKS CAN BE EXPLAINED AS SOURCE AND NOT THE GROSS CONTRACT RECEIPTS. THE AO , THEREAFTER, PROCEEDED TO WORK OUT THE PEAK CASH CREDIT AND MADE AN ADDITI ON OF RS.30,03,639 TO THE INCOME RETURNED BY THE ASSESSEE ON THE FOLLOWIN G BASIS:- THE PEAK CASH CREDIT AS WORKED OUT ABOVE IS RS. 52,50,000/-. OUT OF THIS CREDIT IS TO BE GIVEN AS U NDER THE ASSESSEE HAS JOINT AGRICULTURE LANDS WITH HIS B ROTHER FOR WHICH COPIES OF RECORD OF RIGHTS HAVE BEEN FURNISHE D. FURTHER, HE HAS PRODUCED AGRICULTURAL SALE BILLS AMOUNTING T O RS. 10,85,161/- WHICH HAS BEEN STATED TO HAVE BEEN DEPO SITED IN HIS BANK ACCOUNT. ANOTHER RECEIPT OF RS. 4,39,906/- STA TED TO HAVE BEEN RECEIVED FROM EID PARRY (INDIA) LIMITED, INDIA FOR SUPPLY OF SUGAR CANE HAS BEEN FURNISHED. AS THIS AMOUNT HAS B EEN CREDITED DIRECTLY BY THE COMPANY INTO THE BANK ACCOUNT OF HI S BROTHER SHRI. RAJU BABU DHULI NO CREDIT CAN BE GIVEN. A TOTAL OF RS. 10,85,161/- IS ALLOWED AS AGRICULTURAL INCOME FROM JOINT HOLDINGS WITH HIS BROTHER. II. THE ASSESSEE HAS STATED THAT HE HAS TAKEN UP S OME PRIVATE WORKS AMOUNTING TO RS. 63,9,000/-. DETAILS FOR THE SAME HAVE BEEN FURNISHED BY THE ASSESSEE. 8% OF THE SAME IS A LLOWED AS CONTRACT RECEIPTS FROM PRIVATE WORKS AMOUNTING TO R S. 5,11,200/- . THE ASSESSEE HAS ALSO STATED THAT HE HAS RECEIVED ADVANCES FROM PRIVATE CONTRACTS AMOUNTING TO RS. 6,50,000/- FOR W HICH EVIDENCES HAS BEEN FURNISHED. TOTALLY A SUM OF RS. 11,61,200/- IS ALLOWED AS CASH CREDITS. ITA NO. 59/BANG/2019 PAGE 3 OF 4 THE PEAK CASH CREDIT WORKED OUT IS RS. 52,50,000/ - AND DEDUCTION OF RS.22,46,361/- (11,61,200/- + 10,85,16 1/-) IS ALLOWED AND THE BALANCE OF RS. 30,03,639/- IS ADDED BACK AS UNEXPLAINED CASH CREDITS TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CONF IRMED THE ORDER OF AO. 5. I HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE, WHO SUBMITTED THAT THE SOURCE OF DEPOSIT IN THE BAN K ACCOUNT IS ATTRIBUTABLE TO RECEIPTS FROM EXECUTION OF CIVIL CONTRACTS. THE REVENUE AUTHORITIES WERE NOT JUSTIFIED IN IGNORING THE SAID SOURCE AVAILABLE TO ASSESSEE. THE SOURCE OF RECEIPTS FROM GOVT. AND PRIVATE CONTRACTS HAS BE EN ACCEPTED BY THE AO AND IN SUCH CIRCUMSTANCES THE ADDITION WAS MADE WIT HOUT ANY BASIS. 6. THE LD. DR RELIED ON THE ORDER OF CIT(APPEALS). 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AM O F THE VIEW THAT THE ADDITION MADE IN THE FACTS AND CIRCUMSTANCES OF THE CASE CANNOT BE SUSTAINED. THE ADMITTED POSITION IS THAT THE ASSES SEE EXECUTED GOVT. AND PRIVATE CONTRACTS WORTH RS.63,90,000 + RS.6,24,053 . THOUGH THE ASSESSEE HAS NOT FILED THE CASH FLOW STATEMENT REGA RDING RECEIPTS FROM EXECUTION OF CONTRACTS AND OUTFLOW OF CASH, YET THE FACT REMAINS THAT THE ASSESSEE HAD HUGE RECEIPTS FROM EXECUTION OF CONTRA CTS AND THE SUM DEPOSITED IN THE BANK ACCOUNT CAN BE EXPLAINED AS R ECEIPTS FROM THE CONTRACT BUSINESS. I AM OF THE VIEW THAT THE AO AN D THE CIT(APPEALS) WERE NOT JUSTIFIED IN GIVING CREDITS ONLY FOR THE PROFIT S EARNED FROM CONTRACT BUSINESS AT 8% OF THE RECEIPTS FROM CONTRACTS. I T HEREFORE DELETE THE ADDITION MADE BY THE AO AND ALLOW THE APPEAL OF THE ASSESSEE. ITA NO. 59/BANG/2019 PAGE 4 OF 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF FEBRUARY, 2019. SD/- ( N.V. VASUDEVAN ) VICE PRESIDENT BANGALORE, DATED, THE 20 TH FEBRUARY, 2019. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.