Mahendra Kumar, Barmer V. ITO, , Barmer

ITA 590/JODH/2018

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9980 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S YADAV LD
• Assessee Lawyers: RAKSHA BIRLACALD ARS
• Keywords: Unexplained expenditure; Business income
• Section: 69C; 143(3); 69

Judgement Text

1 ITA NO.590/JODH/2018 SHRI MAHENDRA KUMAR ASSESSMENT YEAR: 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.590/JODH/2018 ( / ASSESSMENT YEAR: 2011-12) MAHENDRA KUMAR BAITU DIST., BARMER C/O. RAJENDRA JAIN ADVOCATE 106, AKSHAY DEEP COMPLEX 5TH B ROAD, SARDARPURA JODHPUR, RAJASTHAN-342 001. / VS. A CIT - CIRCLE - BARMER RAJASTHAN ./ ./PAN/GIR NO. BGZPK-1257-K ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI RAJENDRA JAIN (ADVOCATE) & MS. RAKSHA BIRLA (CA)LD.ARS. REVENUE BY : SHRI A.S. YADAV- LD. SR. DR / DATE OF HEARING : 05/11/2020 / DATE OF PRONOUNCEMENT : 21/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2011-12 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX-(APPEALS)-2, JODHPUR, [IN SHORT REFER RED TO AS 2 ITA NO.590/JODH/2018 SHRI MAHENDRA KUMAR ASSESSMENT YEAR: 2011-12 CIT(A)], APPEAL NO.19/2014-15 DATED 24/09/2018 ON FOLLOWING EFFECTIVE GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ID CIT (A) ERRED IN SUSTAINING ADDITION OF RS.14,81,066/- U/S 69 OF THE ACT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID CIT (A) ERRED IN CONFIRMING THE FINDING RECORDED BY THE ID AO. THE FINDING SO RECORDED BY AUTHORITY BELOW IS ERR ONEOUS, CONTRARY TO THE MATERIAL ON RECORD AND PERVERSE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ID CIT (A) ERRED IN NOT CONSIDERING THE EXPLANATION FURNISHED BY THE ASSESSEES WHICH ARE SUPPORTED FROM THE DOCUMENTARY EVIDENCES. AS EVIDENT, THE ASSESSEE IS AGGRIEVED BY CERTAIN AD DITION OF RS.14.81 LACS U/S. 69 OF THE ACT. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING WRITTEN SUBMI SSIONS AND DOCUMENTS PLACED IN THE PAPER BOOK. THE JUDICIAL PR ECEDENTS AS RELIED UPON DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 FACTS ON RECORD ARE THAT ASSESSEE BEING RESIDEN T INDIVIDUAL IS STATED TO BE ENGAGED IN THE BUSINESS OF RETAIL TRAD ING OF LIQUOR/ WINE AND SUPPLY OF WATER. IT WAS ASSESSED FOR THE YEAR U NDER CONSIDERATION U/S. 143(3) ON 07/03/2014, WHEREIN IT WAS SADDLED WITH AN ADDITION OF UNEXPLAINED EXPENDITURE U/S. 69 C FOR RS.14.81 LACS. ANOTHER ADDITION OF RS.2.28 LACS ON ACCOUNT O F UNACCOUNTED PURCHASE / SALE WAS ALSO MADE. 3.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT ASSESSEE DEPOSITED CASH IN TWO BANK ACCOUNTS AS PER FOLLOWIN G DETAILS:- 3 ITA NO.590/JODH/2018 SHRI MAHENDRA KUMAR ASSESSMENT YEAR: 2011-12 NO. BANK ACCOUNT NO. AMOUNT OF CASH DEPOSIT (RS.) 1. STATE BANK OF BIKANER & JAIPUR 61035787366 3506000 2. PUNJAB NATIONAL BANK 4065000100021900 5252000 TOTAL RS. 8758000 ACCORDINGLY, THE ASSESSEE WAS REQUIRED TO FURNISH T HE SOURCE OF CASH DEPOSIT. IT WAS ALSO NOTICED THAT THERE WAS DI SCREPANCY IN THE PURCHASE OF LIQUOR/WINE AS PER AUDIT REPORT VIS--V IS FORM NO.27D ISSUED BY TAX COLLECTORS/LIQUOR AND WINE SUPPLIERS AGAINST PURCHASE OF LIQUOR/WINE. THE ASSESSEE FAILED TO FURNISH SOUR CE OF CASH DEPOSIT AS WELL AS EXPLAIN THE DISCREPANCY IN THE AMOUNT OF PURCHASE. ACCORDINGLY, IT WAS OPINED BY LD. AO THAT THE ASSES SEE DID NOT RECORDED CORRECT PURCHASES AS WELL AS CASH DEPOSIT IN THE BANK ACCOUNT TO THE FOLLOWING EXTENT: - NO. PARTICULARS AS PER FORM NO.27D/BANK STATEMENT AS PER BOOKS OF ACCOUNT DISCREPANCY 1. PURCHASE OF WINE 7325747 5844681 1481066 2. CASH DEPOSIT 8758000 6687929 2070071 A CONCLUSION WAS ALSO DRAWN THAT UNACCOUNTED PURCHA SE OF RS.14.81 LACS LED TO CONCEALMENT OF CORRESPONDING C ASH SALE OF RS.20.70 LACS. SINCE THE ASSESSEE FAILED TO RECORD THE SOURCE OF RS.14.81 LACS, THE SAME WAS TO BE TREATED AS UNEXPL AINED EXPENDITURE U/S 69C LEADING TO EXCESS CASH DEPOSIT OF RS.20.70 LACS. THE LD. AO FURTHER ESTIMATED GROSS PROFIT O F 11.03% ON UNACCOUNTED CASH SALE OF RS.20.70 LACS WHICH LED TO ANOTHER ADDITION OF RS.2.28 LACS. THE RATE OF 11.03% WAS NO THING BUT THE 4 ITA NO.590/JODH/2018 SHRI MAHENDRA KUMAR ASSESSMENT YEAR: 2011-12 RATE WHICH WAS ALREADY REFLECTED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. 4. UPON FURTHER APPEAL, LD. CIT(A) CONFIRMED THE AD DITION OF UNEXPLAINED EXPENDITURE U/S 69C FOR RS.14.81 LACS S INCE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF PURCHASES. HOWEVER, ANOTHER ADDITION WAS DELETED SINCE THE ASSESSEE HAD SOLD WATER ALSO, THE PROCEEDS OF WHICH WAS DEPOSITED IN THE BA NK ACCOUNT. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. UPON DUE CONSIDERATION OF FACTUAL MATRIX AS ENUM ERATED IN THE PRECEDING PARAGRAPHS, IT IS QUITE EVIDENT THAT THER E WERE UNACCOUNTED PURCHASES TO THE EXTENT OF RS.14.81 LAC S. THERE WERE ALSO UNACCOUNTED / UNEXPLAINED CASH DEPOSITS WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE DOE S NOT HAVE ANY OTHER SOURCE OF INCOME. THEREFORE, IT COULD SAF ELY BE CONCLUDED THAT THE CASH DEPOSIT IN THE ACCOUNT WAS NOTHING BU T BUSINESS RECEIPTS WHICH WERE GENERATED OUT OF UNACCOUNTED PU RCHASES. HENCE, THE FACTS AND CIRCUMSTANCES OF THE CASE WOUL D MAKE IT A FIT CASE TO MAKE ESTIMATED ADDITIONS OF PROFIT AGAINST UNACCOUNTED SALES. KEEPING IN VIEW THE FACT THAT THE ASSESSEE R EFLECTED PROFIT OF 11.03% ON RECORDED PURCHASES, THE ESTIMATE ON UNACC OUNTED SALES WAS TO BE MADE ON HIGHER SIDE. WE ESTIMATE THE SAME @15% OF UNACCOUNTED CASH DEPOSIT OF RS.20,70,071/- WHICH CO MES TO RS.3,10,511/-. ACCORDINGLY, BALANCE ADDITION MADE U /S 69C SHALL STAND DELETED. 6. THE APPEAL STAND PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. 5 ITA NO.590/JODH/2018 SHRI MAHENDRA KUMAR ASSESSMENT YEAR: 2011-12 ORDER PRONOUNCED U/R 34(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SANDEEP GOSAIN) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/12/2020 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &'#( ) , ) , / DR, ITAT, JODHPUR 6. '+,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, JODHPUR.