Shri Dharam Prakash Awasthi, Lucknow V. Income Tax Officer, Lucknow

ITA 590/LKW/2012

• Counselvise Citation: 59023714 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: K R RASTOGI
• Keywords: Business income; Business expenditure; Principle of natural justice
• Section: 68; 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.590/LKW/2012 ASSESSMENT YEAR:2009 - 2010 SHRI DHARAM PRAKASH AWASTHI, 547/116, JALALPUR, PHATAK, LUCKNOW. PAN:AEZPA9590A VS. INCOME TAX OFFICER, RANGE - IV(1), LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. R. RASTOGI, C.A. RESPONDENT BY SHRI R. K. RAM, D.R. DATE OF HEARING 24/04/2014 DATE OF PRONOUNCEMENT 1 3 /05/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 07/09/2012 FOR ASSESSMENT YEAR 2009 - 2010. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LD. C.I.T. (APPEALS] - II, LUCKNOW ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.9,65,487/ - BEING CASH DEPOSITED IN THE BANK ON DIFFERENT DATES IN PEACE MEALS, WITHOUT APPRECIATING THAT CASH WAS DEPOSITED OUT OF CASH - IN - HAND AVAILABLE, BEING CASH WITHDRAWAL FROM THE SAME BANK / TRUCK RECEIVING OF THE YEAR AND SAVINGS OF THE EARLIER YEARS. 2. THE LD. C.I.T. (A) DID NOT APPRECIATE THAT APPELLANT IS AN OLD INCOME TAX ASSESSEE, REGULARLY FILING HIS RETURNS AND HAS ACCUMULATED BROUGHT FORWARD SAV INGS AS CASH IN 2 ADDITION TO THE CASH AVAILABLE FROM TRUCK BUSINESS AND OUT OF WITHDRAWALS FROM SAME BANK DURING THE YEAR. 3. THE LD. C.I.T. (A) FAILED TO APPRECIATE THE CASH AVAILABILITY AND ITS UTILIZATION DURING THE YEAR WHICH IS PROPERLY EXPLAINED IN T HE APPELLATE PROCEEDING. 4. THE LD. C.I.T. (A) ERRED ON FACTS AND IN LAW IN TREATING THE CASH DEPOSIT U/S 69 OF I. T. ACT INSTEAD OF ALLEGED INCORRECT ADDITION U/S 68 OF THE I.T. ACT MADE BY LD. A.O. WITHOUT PROVIDING ANY OPPORTUNITY TO HAVE ITS SAY ON TH E REASONS RELIED UPON BY HIM. 5. THE ADDITION CONFIRMED IS HIGHLY EXCESSIVE, CONTRARY TO THE FACTS, LAW AND PRINCIPLE OF NATURAL JUSTICE WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO HAVE ITS SAY ON THE REASONS RELIED UPON BY HIM. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE ASSESSEE HAD ONLY FIVE TRUCKS AND NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED. HE SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 44AE OF THE ACT, THE ASSESSEE HAS DECLARED INCOME OF RS.2,10,000/ - @RS .3,500/ - PER MONTH PER TRUCK AND, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS NOT JUSTIFIED. HE ALSO SUBMITTED A COPY OF EXTRACT OF BANK STATEMENT. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIE S BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT AS PER THE EXTRACT OF BANK STATEMENT SUBMITTED BY THE ASSESSEE FOR PRESENT YEAR, THE ASSESSEE IS SHOWING RECEIPT OF RS.18,76,345/ - IN COURSE OF BUSINESS OF PLYING OF TRUCKS. AGAINST THIS RECEIPT, THE ASSESSEE IS SHOWING THE FOLLOWING EXPENSE S IN THE SAID EXTRACT OF BANK STATEMENT: 3 ( A ) DIRECT EXPENSES INCURRED IN RELATION TO RS.2,96,796 B U SINESS ACTIVITIES OF PLYING OF COMMERCIAL VEHICLES (THROUGH ACCOUNT PAYEE CHEQUES ( B ) INSURANCE OF VEHICLES RELATING TO BUSINESS RS. 65,010 ( PAID THROUGH ACCOUNT PAYEE CHEQUE) ( C ) BANK CHARGES RS. 6,487 ( D ) CASH WITHDRAWAL FOR BUSINESS EXPENSES RS.6,98, 750 RS.10,67,043 NET EXCESS OF RECEIPT OVER EXPENSES RS.8,09,30 2 / - 5.1 THIS EXCESS OF RECEIPT OVER EXPENSES HAS BEEN UTILIZED BY THE ASSESSEE IN THE FORM OF REPAYMENT OF VARIOUS LOANS I.E. TRUCK LOAN, PERSONAL LOAN, CAR LOAN, TWO VEHICLE LOAN ETC. AND PAY MENT FOR LIC PREMIUM. 5.2 NOW IN THE LIGHT OF THESE FACTS, WE HAVE TO DECIDE THE ISSUE IN DISPUTE. ADMITTEDLY , AS PER THE PROVISIONS OF SECTION 44AE, THE INCOME IN RESPECT OF BUSINESS OF PLYING TRUCKS HAS TO BE ESTIMATED AS PER THE PROVISIONS OF THIS SEC TION IF THE NUMBER OF TRUCKS OWNED BY THE ASSESSEE IS 10 OR LESS. IN THE PRESENT CASE, THE ASSESSEE IS OWNING ONLY FIVE TRUCKS AND THEREFORE, THE PROVISION S OF THIS SECTION ARE APPLICABLE. AS PER THE SAME , THE INCOME DECLARED BY THE ASSESSEE IN RESPECT O F TRUCK PLYING BUSINESS IS ACCEPTABLE BUT IN THE PRESENT CASE , THE A.O. HAS ALSO ACCEPTED THE SAME AND ADDITION IS NOT MADE BY THE ASSESSING OFFICER ON THE BASIS THAT INCOME FROM TRUCK PLYING BUSINESS DECLARED BY THE ASSESSEE IS NOT ACCEPTABLE AND HE HAS N OT IN CREASED SUCH INCOME FROM THE BUSINESS OF TRUCK PLYING . HE HAS NOTED DOWN VARIOUS CASH DEPOSITS OF THE ASSESSEE IN THE BANK AND MADE ADDITION FOR THE SAME ON THE BASIS THAT THE ASSESSEE COULD NOT EXPLAIN SUCH CASH DEPOSIT. WHEN AS PER THE ASSESSEE ALSO , THE NET CASH SURPLUS IN TRUCK PLYING BUSINESS IS ONLY RS.2.10 LAC S BEING THE INCOME DECLARED BY THE ASSESSEE U/S 44AE THEN HOW THE ASSESSEE CAN UTILIZE MORE AMOUNT TOWARDS REPAYMENT OF 4 LOAN AND PAYMENT OF LIC PREMIUM ETC. THE CASE MAY BE DIFFERENT W HERE THE NET AMOUNT OF BUSINESS RECEIPTS ( BEING DEPOSITS IN BANK LESS CASH WITHDRAWAL FROM BANK FOR BUSINESS ) IS EQUAL TO OR LESS THAN THE INCOME DECLARED BY THE ASSESSEE OR IF THE ASSESSEE CAN SHOW AND ESTABLISH THAT EVEN IF THERE IS SOME EXTRA DEPOSIT I N BANK AS COMPARED TO THE INCOME DECLARED BY THE ASSESSEE, THE SAME WAS UTILIZED FOR BUSINESS EXPENSES AFTER THE END OF THE YEAR. BUT IN THE PRESENT CASE, AS PER THE FACTS BROUGHT ON RECORD BY THE ASSESSEE HIMSELF IN THE FORM OF EXTRACT OF BANK STATEMENT, IT IS SEEN THAT NET SURPLUS OF DEPOSIT IN BANK LESS WITHDRAWAL BY WAY OF ISSUE OF CHEQUE OR WITHDRAWAL OF CASH FOR BUSINESS EXPENSES IS RS.8,09,30 2 / - WHEREAS THE INCOME DECLARED BY THE ASSESSEE FROM THE TRUCK PLYING BUSINESS IS ONLY RS.2.10 LAC S . SUCH EX TRA NET CASH DEPOSITED IN BANK IS NOT SHOWN TO HAVE BEEN UTILIZED BY THE ASSESSEE AFTER THE END OF THE YEAR FOR BUSINESS EXPENSES OF THIS YEAR . IN FACT , AS PER THE SAME EXTRACT OF BANK STATEMENT SUBMITTED BY THE ASSESSEE, SUCH EXTRA NET CASH DEPOSIT IN BA NK HAS ALSO BEEN UTILIZED BY THE ASSESSEE FOR REPAYMENT OF VARIOUS LOANS AND PAYMENT OF LIC PREMIUM. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT SUCH NET CASH DEPOSITED IN BANK OF RS.8,09,301/ - LESS INCOME DECLARED BY THE ASSESSEE OF RS.2.10, BEING BALANCE RS. 5,99,30 2 / - HAS TO BE CONSIDERED AS UNEXPLAINED DEPOSIT IN BANK AND TO THIS EXTENT, THE ADDITION MADE BY THE ASSESSING OFFICER IS JUSTIFIED. WE, THEREFORE, UPHOLD THE ADDITION TO THIS EXTENT AND DELETE THE BALANCE ADDITION. VARIOUS JUDGME NTS CITED BY THE LEARNED AR OF THE ASSESSEE ARE NOT HELPFUL TO THE ASSESSEE IN THE FACTS OF THE PRESENT CASE BECAUSE IN THE FACTS OF THE PRESENT CASE, EXTRA CASH IN ADDITION TO INCOME DECLARED BY THE ASSESSEE FROM THE BUSINESS OF TRUCK PLYING HAS BEEN NOT ONLY DEPOSITED IN BANK BUT THE SAME WAS NOT WITHDRAWN FOR BUSINESS EXPENDITURE. IN FACT, SUCH EXTRA CASH WAS USED FOR REPAYMENT OF LOAN AND PAYMENT OF LIC PREMIUM. IF NO ADDITION IS MADE UNDER THESE 5 FACTS, THEN A PERSON RECEIVING SALARY OF RS. 5 LACS CAN D EPOSIT CASH OF RS. 50 LACS IN BANK AND CAN CLAIM THAT ONLY SALARY AS PER FORM 16 SHOULD BE TAXED AND NOT THE EXTRA CASH DEPOSITED IN BANK FOR WHICH NO EXPLANATION IS AVAILABLE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 /05/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR