Samar Singh Parihar, V. Income Tax Officer Ward- Satna, SATNA

ITA 6/JAB/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2158 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3); 142(1); 148

Judgement Text

I.T.A. NO. 06 /JAB/201 5 ASSESSMENT YEAR:2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, ACCOUNTANT MEMBER I.T.A. NO.06/JAB/2015 ASSESSMENT YEAR:2009-10 SHRI SAMAR SINGH PARIHAR, SMILIYA HOUSE, SINGHPUR, NAGOD, SATNA. PAN:AYUPP 4288 K VS. INCOME TAX OFFICER, WARD-SATNA. (APPELLANT) (RESPONDENT) O R D E R PER MANISH BORAD, A.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-II, JABALPUR DATED 28/11/2014 ARISING OUT OF THE ORDER U/S 143(3) OF THE ACT DATED 24/10/2013 RELATING TO ASSESSMENT YEAR 2009-1 0 FROMED BY INCOME TAX OFFICER, WARD-SATNA. THE SOLE GRIEVANCE OF THE ASSESSEE RAISED IN FIVE GROUND OF APPEAL REVOLVES ROUND THE ADDITION TOWARD S UNEXPLAINED CASH DEPOSIT IN BANK AT RS.89,35,000/- MADE BY THE ASSES SING OFFICER AND THEREAFTER CONFIRMED BY THE CIT(A). 2. BRIEFLY STATED, THE FACTS AS CULLED OUT FROM THE RECORD, ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN SUPERVISION WO RK. ON THE BASIS OF AIR INFORMATION AVAILABLE ON RECORD REFLECTING THE CASH DEPOSIT OF RS.89,35,000/- IN SAVINGS BANK ACCOUNT OF THE ASSES SEE, NOTICE U/S 148 WAS APPELLANT BY SHRI G. N. PUROHIT, SR. ADVOCATE SHRI ABHISHEK OSWAL, ADVOCATE RESPONDENT BY SHRI V. B. SARGAR, D. R. DATE OF HEARING 07/11/2017 DATE OF PRONOUNCEMENT 08/11/2017 I.T.A. NO. 06 /JAB/201 5 ASSESSMENT YEAR:2009-10 2 ISSUED ON 22/11/2012. NOTICE U/S 142(1) WITH QUEST IONNAIRE WAS ISSUED. INCOME TAX RETURN SHOWING INCOME OF RS.89,350/- FIL ED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE PLEADED THAT HE IS LOOKING AFTER SUPERVISION OF CONTRACT WORK OF SHRI KAILASH SINGH, A CONTRACTOR AT HOSANGABAD WHO HAD TAKEN A CONTRACT WORK OF PRADHAN MANTRI GRAM SADAK YOJANA OF PAWWAI, DISTRICT PANNA. THE ASSESSEE ALS O PLEADED THAT REGULAR CASH WITHDRAWAL FROM THE BANK ACCOUNT OF SHRI KAILA SH SINGH WAS UTILIZED FOR PURCHASING MATERIAL AND PAYMENT TO LABOURERS FO R CONTRACT WORK AND ASSESSEE IS NOT DOING ANY BUSINESS BUT IS MERELY A SUPERVISOR. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED BECAUSE OF THE NON ATTENDANCE OF SHRI KAILASH SINGH IN RESPONSE TO THE SUMMONS ISSUE D. HE ACCORDINGLY ADDED RS.89,35,000/- TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSIT AND ASSESSED THE INCOME AT RS.90,24,350/-. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) BUT FAILED TO SUCCEED ON THE ADDITION MADE U/S 69A OF THE ACT. NOW THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL. 3. LEARNED COUNSEL FOR THE ASSESSEE REFERRING TO TH E PAPER BOOK SUBMITTED THAT THERE WAS AGREEMENT BETWEEN THE ASSE SSEE AND SHRI KAILASH SINGH FOR THE NATURE OF WORK TO BE CARRIED OUT BY THE ASSESSEE. FURTHER IT WAS CONTENDED THAT THE IMPUGNED CASH DEP OSITS HAVE CLEAR NEXUS WITH WITHDRAWALS MADE BY THE ASSESSEE FROM THE BANK ACCOUNT OF SHRI KAILASH SINGH, CONTRACTOR AND THESE AMOUNTS WERE AP PLIED FOR THE BUSINESS PURPOSES AT THE INSTRUCTION OF SHRI KAILASH SINGH AND THERE IS NO ALEMENT OF INCOME EMBEDDED IN THE ALLEGED CASH DEPOSITED. 4. ON THE OTHER HAND LEARNED D.R. VEHEMENTLY ARGUED SUPPORTING THE ORDER OF THE CIT(A). I.T.A. NO. 06 /JAB/201 5 ASSESSMENT YEAR:2009-10 3 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. VARIOUS GROUNDS OF APPEAL RAISED BY THE ASSESSEE REVOLVE AROUND THE ISSUE OF ADDITION OF RS.89,35,000/- MADE BY THE ASSESSEE ON ACCOUNT OF ALLEGED CASH DEPOSIT IN THE BANK ACCOUNT . WE FIND THAT UNDISPUTEDLY ASSESSEE IS ASSOCIATED WITH SHRI KAILA SH SINGH, CONTRACTOR. REGULAR CASH WITHDRAWALS IN THE NAME OF THE ASSESSE E HAVE BEEN MADE DURING THE YEAR FROM THE BANK ACCOUNT OF KAILASH SI NGH. OUT OF THESE CASH WITHDRAWALS, MAJORITY OF THE AMOUNT HAS BEEN DEPOSI TED IN THE BANK ACCOUNT OF THE ASSESSEE AND HAS BEEN FURTHER WITHDR AWN ON REGULAR INTERVALS. IT IS TRUE THAT THE ASSESSEE HAD BEEN U NABLE TO CLEARLY DEMONSTRATE THAT THE ALLEGED CASH DEPOSIT DOES NOT HAVE ANY ELEMENT OF INCOME AND SIMILARLY REVENUE HAS ALSO BEEN UNABLE T O PROVE IT WITH EVIDENCE THAT THE ALLEGED CASH DEPOSIT IS THE INCOM E OF THE ASSESSEE BECAUSE THERE IS NO INVESTMENT AGAINST SUCH CASH DE POSITS. RATHER THE CASH HAS BEEN WITHDRAWN REGULARLY BUT ITS FURTHER S OURCE OF INVESTMENT OR APPLICATION IS NOT KNOWN. 5.1 WE ALSO FIND THAT THE SOURCE OF CASH DEPOSIT IN THE ALLEGED BANK ACCOUNT OF THE ASSESSEE IS OUT OF THE CASH WITHDRAW ALS FROM THE ACCOUNTS OF SHRI KAILASH SINGH. THE REVENUE HAS NOT DISPUTED T HE FACT THAT SHRI KAILASH SINGH IS A CONTRACTOR ENGAGED IN ROAD CONSTRUCTION AND IN THE YEAR UNDER APPEAL HE HAD BEEN AWARDED THE CONTRACT WORK OF PRA DHAN MANTRI GRAM SADAK YOJANA, DISTT. PANNA. PERUSAL OF THE CREDIT ENTRIES IN THE BANK ACCOUNT OF SHRI KAILALSH SINGH PLACED AT PAGES 8 TO 10 OF THE PAPER BOOK, REVEALS THAT REGULAR ACCOUNT PAYEE CHEQUES HAVE BEE N CREDITED IN THE BANK ACCOUNT OF SHRI KAILALSH SINGH WHICH ARE ON ACCOUNT OF CONTRACT /BUSINESS RECEIPTS FOR ROAD CONSTRUCTION. THIS PROVES THAT T HE CASH WITHDRAWAL BY THE ASSESSEE IS OUT OF THE BUSINESS RECEIPTS OF SHRI KA ILALSH SINGH. THESE BUSINESS RECEIPTS OF SHRI KAILALSH SINGH SHOWN IN T HE BANK STATEMENT ARE I.T.A. NO. 06 /JAB/201 5 ASSESSMENT YEAR:2009-10 4 TAXABLE ONLY TO THE EXTENT OF PROFIT EARNED FROM TH E ROAD CONSTRUCTION BUSINESS. TAKING THIS FACT AS THE BASIS, WE ASSUME THAT THE ALLEGED CASH DEPOSITS MADE BY THE ASSESSEE ARE ALSO THE PART OF BUSINESS/ CONTRACT RECEIPTS. CERTAINLY WHEN THE BUSINESS RECEIPTS ARE TOWARDS ROAD CONSTRUCTION BUSINESS ONLY THE PROFIT ELEMENT CAN B E SUBJECT TO TAX. 5.2 WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTA NCES OF THE CASE AS WELL AS IN THE GIVEN SITUATION WHEN BOTH THE PARTIE S ARE UNABLE TO PROVE THEIR STAND IN FULL, DEEM IT PROPER TO ESTIMATE NET PROFIT RATE @8% ON THE ALLEGED CASH DEPOSIT/BUSINESS RECEIPT OF RS.89,35,0 00/- IN ORDER TO MEET THE ENDS OF JUSTICE. WE ACCORDINGLY DO SO AND CONF IRM THE ADDITION AT RS.7,14,800/- AS AGAINST THE ADDITION OF RS.89,35,0 00/- MADE BY THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08/11/2 017 SD/. SD/. (PARTHA SARATHI CHAUDHURY) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:08/11/2017 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., ASST T. REGISTRAR