Shakeel Shafi, Kanpur V. Income Tax Officer-3(4) , Kanpur

ITA 598/LKW/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1671 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 12-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH, LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO S . 598 & 609/LKW/2012 ASSESSMENT YEAR S : 2008 - 09 AND 2009 - 10 SHAKEEL SHAFI 41/100, PARADE KANPUR V. ITO 3(4) KANPUR PAN: AUJPS8358N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 30.01.2013 DATE OF PRONOUNCEMENT: 31.01.2013 O R D E R THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER S OF THE LD. CIT(A) PERTAINING TO ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 ON COMMON GROUNDS. 2 . IN BOTH THE ASSESSMENT YEARS, THE ASSESSING OFFICER HAS MADE THE ADDITION OF EXCESS CASH DEPOSITS IN THE ASSESSEES OWN BANK ACCOUNT AND ALSO IN THE JOINT BANK ACCOUN T OPENED WITH HIS WIFE AFTER TREATING IT TO BE PEAK OF CASH DEPOSITS. ACCORDINGLY ADDITIONS OF ` 2,16,962/ - IN ASSESSMENT YEAR 2008 - 09 AND ` 2,20,160 IN ASSESSMENT YEAR 2009 - 10 WERE MADE, AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) BUT DID NOT FIND FAVOUR WITH HIM. 3 . NOW THE ASSESSEE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE ASSESSEE IS A SMALL TRADER ENGAGED IN THE BUSINESS OF RETAIL TRADING OF TORCH AND ELECTRICAL GOODS. HE OFFERED HIS INCOME UNDER SE CTION 44AF OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED : - 2 - : IN SHORT THE ACT'). THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT AND WHATEVER SALE PROCEEDS ARE RECEIVED, THE SAME WERE DEPOSITED IN HIS BANK ACCOUNT AND AT THE TIME OF PAYMENT TO THE CRE DITORS CASH WAS WITHDRAWN FROM THE BANK. THEREFORE, AT THE MOST THE TOTAL DEPOSITS IN THE BANK ACCOUNT CAN BE CONSIDERED TO BE THE TOTAL TURNOVER OF THE BUSINESS AND 5% OF THE TOTAL TURNOVER OF THE BUSINESS IS TO BE TREATED AS INCOME OF THE ASSESSEE. THE ASSESSEE HAS ALREADY DECLARED MORE THAN THAT AMOUNT AS HIS INCOME. THEREFORE, NO ADDITION ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT IS CALLED FOR. 4 . WITH RESPECT TO THE JOINT ACCOUNT, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE JOINT ACCOUNT WAS OPERATED BY HIS WIFE FOR HER OWN BUSINESS . THE ASSESSEE HAS NOT MADE ANY DEPOSIT IN THE JOINT ACCOUNT FOR HIS BUSINESS PURPOSE, T HEREFORE , THE DEPOSITS IN THE JOINT ACCOUNT CANNOT BE TAKEN INTO ACCOUNT WHILE COMPUTING THE INCOME OF THE ASSESSEE F OR H IS BUSINESS. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED THE STATEMENT OF INCOME ALONG WITH COPY OF RETURN IN ORDER TO ESTABLISH THAT FOR THE LAST SO MANY YEARS, HE HAS BEEN OFFERING HIS INCOME UNDER SECTION 44AF OF THE ACT. 5 . T HE LD. D.R., SHRI. ALOK MITRA, ON THE OTHER HAND, HAS PLACED HEAVY RELIANCE UPON THE ORDERS OF THE LOWER AUTHORITIES. HE HAS CONTENDED THAT BEFORE THE LOWER AUTHORITIES THE ASSESSEE COULD NOT PLACE ANY EVIDENCE TO ESTABLISH THAT THE DEPOSIT IN THE JOINT A CCOUNT WAS ONLY UTILIZED BY HIS WIFE AND NOT THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY CONSIDERED THE DEPOSIT IN THE JOINT ACCOUNT WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE LD. D.R. FURTHER CONTENDED THAT THOUGH THE ASSESSEE IS NOT REQUIRED TO MAINTAIN PROPER BOOKS OF ACCOUNT WHILE OFFERING AN INCOME UNDER SECTION 44AF OF THE ACT, BUT HE IS UNDER OBLIGATION TO EXPLAIN THE DEPOSITS MADE IN HIS BANK ACCOUNT AND IF HE IS FAILED TO DO SO, THE ASSESSING OFFICER IS WITHIN HIS RIGHT TO DETERMINE THE EXCESS CASH DEPOSITS AND TO MAKE ADDITION THEREOF. : - 3 - : 6 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, I FIND THAT THE ASSESSEE HAS DECLARED HIS INCOME IN ASSESSMENT YEAR 2008 - 09 AT ` 1,12,00 0 AND IN ASSESSMENT YEAR 2009 - 10 A T ` 1,50,500 UNDER SECTION 44AF OF THE ACT. I HAVE ALSO EXAMINED THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AND IF THE DEPOSITS IN THE ASSESSEES OWN BANK ACCOUNT ARE CONSIDERED TO BE THE TOTAL TURNOVER OF THE ASSESS EE, THE INCOME DECLARED UNDER SECTION 44AF OF THE ACT WOULD BE MORE THAN 5% OF THE TOTAL TURNOVER. THEREFORE, NO FURTHER ADDITION ON THE BASIS OF THE DEPOSITS IN THE BANK ACCOUNT IS CALLED FOR. 7 . SO FAR AS THE DEPOSIT IN THE JOINT ACCOUNT IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE HAS AGREED THAT THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. IF THE ASSESSEE IS ABLE TO PROVE THAT THE DEPOSIT IN THE JOINT ACCOUNT WAS TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER WHILE DETERMINING THE INCOME OF HIS WIFE FROM HER BUSINESS IN THE RELEVANT ASSESSMENT YEAR, THE SAME SHOULD NOT BE CONSIDERED AGAIN WHILE COMPUTING THE INCOME OF THE ASSESSEE. OTHERWISE, THE ASSESSING OFFICER MAY BE AT LIBERTY TO CONSIDER THE DEPOSITS IN THE J OINT ACCOUNT IN THE HANDS OF THE ASSESSEE IN ACCORDANCE WITH LAW, BUT WHILE DOING SO HE SHOULD KEEP IN MIND THAT THE INCOME DECLARED BY THE ASSESSEE SHOULD BE LESS THAN 5% OF THE TOTAL TURNOVER OF THE BUSINESS OF THE ASSESSEE. ACCORDINGLY, THE ADDITION S O F ` 1,35,052 IN ASSESSMENT YEAR 2008 - 09 AND ` 1,75,160 IN ASSESSMENT YEAR 2009 - 10 MADE ON ACCOUNT OF EXCESS DEPOSIT IN THE ASSESSEES OWN ACCOUNT ARE DELETED. 8 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.1.2013. S D/ - [ S UNIL KUMAR Y ADAV ] JUDICIAL MEMBER DATED: 31.1.2013 JJ: 3101 : - 4 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR