Beni Prasad Parmar, Shujalpur Mandi District Shajapur V. Assistant Commissioner of Income Tax- 2(1), Ujjain

ITA 608/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6227 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Assessee Lawyers: S K AGRAWAL
• Keywords: Principle of natural justice; Onus to prove; Set aside
• Section: 68; 148; 144

Judgement Text

[ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS.607 & 608/IND/2017 ASSESSMENT YEARS: 2010-11 & 2011-12 BEN I PRASAD PARMAR 57, AMBIKA BAZAR, SHUJALPUR MANDI DIST. SHAJAPUR (M.P.) / VS. CIT(A) UJJAIN ( APPELLANT ) ( REVENUE ) P.A. NO. AHWPP3708K APPELLANT BY SHRI S.K. AGRAWAL, A.R. RESPONDENT BY SHRI V.J. BORICHA, SR. D.R. DATE OF HEARING: 23.01.2019 DATE OF PRONOUNCEMENT: 24.01.2019 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE PERTAINING TO DIFFERENT ASSESSMENT YEARS I.E.2010-11 & 2011-12 AGAINS T TWO DIFFERENT ORDERS OF THE CIT(A), UJJAIN BOTH DATED [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 2 25.7.2017. SINCE THE FACTS AND GROUNDS ARE IDENTICAL, BOTH THE APPEALS WERE HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AN D BREVITY. 2. FIRST WE TAKE UP ITA NO.607/IND/2017 PERTAINING TO THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: THE LEARNED A.O. ERRED IN MAKING ADDITION OF RS.23 ,37,850/- ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNT. 3. THE FACTS GIVING RAISE TO PRESENT APPEAL ARE THAT A NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (HEREINAF TER CALLED AS THE ACT) WAS ISSUED. HOWEVER, NO ONE APPEAR ED DESPITE ISSUING OF NOTICE TO IMPOSE PENALTY U/S 271( 1)(B) OF THE ACT. THEREFORE, THE A.O. PROCEEDED TO MAKE ADDI TION ON THE BASIS OF AVAILABLE MATERIAL AND ASSESSED INCOME U/S 144 OF THE ACT OF RS.23,37,850/-. [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 3 4. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) DID NOT CONSIDER THE EXPLANATION AS OFFERED BY THE ASSESSEE AND THE APPEAL SO FILED WAS DISMISSED. NOW THE ASSESSEE IS IN APPEAL. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSING OFFICER HAD MADE ADDITION ON THE BASIS OF DEP OSIT OF CASH IN BANK ACCOUNT OF THE ASSESSEE. HE SUBMITTE D THAT BEFORE LD. CIT(A), IT WAS SUBMITTED THAT THE CASH DEPOSITS WERE THE ROTATION OF FUND FROM ONE BANK ACCO UNT TO THE OTHER. THE ASSESSEE HAS DRAWN OUR ATTENTION T O THE BANK STATEMENT OF THE ASSESSEE. 5. LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT T HE ASSESSEE SHOULD HAVE APPROACHED THE A.O. AND FILED THE REQUISITE DETAILS. LD. D.R. SUBMITTED THAT THE SOURCE OF DEPOSITS ARE NOT VERIFIABLE. [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. LD. CIT(A) HAD DISMISSED THE APPEAL BY OBSERVING AS UNDER: 5.1 GROUND NO.1:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ASSESSMENT OF INCOME AT RS.23,37,850 /- ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNT AND IMPOSITION OF PENALTY U /S 271(1)(B) OF THE I.T. THE APPELLANT IS RECEIVING SALARY FROM LIFE INSURANCE C ORPORATION AS DEVELOPMENT OFFICER. THE APPELLANT SUBMITTED THAT THE CASH DEP OSIT IS FROM THE ROTATIONAL FUND. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, REMAND PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS, THE APPELLANT HAS NOT FURNIS HED THE SOURCE OF CASH DEPOSIT IN THE APPELLANTS BANK ACCOUNT. THE APPELLANT HAS ALSO NOT FURNISHED THE PROOF THAT THE CASH DEPOSIT IS ROTATIONAL FUND. THE APPE LLANT HAS ALSO NOT FURNISHED THE PROOF OF RECEIPT OF CASH. THE APPELLANTS CASE CAN NOT BE CONSIDERED U/S 44 AD OF THE I.T. ACT AND TO ADOPT NET PROFIT OF CREDITS OF THAT PERIOD TO BE ADDED AND NOT THE WHOLE OF THE CREDIT IN BANK ACCOUNT OF THE APPE LLANT IS NOT ACCEPTABLE. THE APPELLANT FAILED TO ESTABLISH THAT THE CREDIT IN TH E BANK ACCOUNT IS FROM BUSINESS ACTIVITY. THE APPELLANT WAS EXPECTED TO FURNISH TH E SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT. HE WAS ALSO EXPECTED TO FURNISH THE COMPLETE NAMES AND ADDRESSES OF THE PERSONS FROM WHOM THE CASH HAS BEE N RECEIVED. THE APPELLANT COULD NOT ABLE TO EXPLAIN THE GENUINENESS OF THE TR ANSACTION. THE APPELLANT FAILED TO CLARIFY THE INTERNAL ENTRIES IN THE BANK ACCOUNT WITH SUFFICIENT PROOF. THE APPELLANT HAS NOT DISCHARGED ITS ONUS BY SUBMITTING THE SOURCE OF CASH DEPOSIT BEFORE THE A.O. AS WELL AS AT APPELLATE PROCEEDINGS . THE APPELLANT FAILED TO PROVE HIS CASE. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN THE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NAT URE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS CO ULD BE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWAYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXPAYER TO PROVE TH E GENUINENESS OF BORROWINGS OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACT S ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXPRESSION NATURE AND SOURCE HAS TO BE UNDER STOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFERRED. [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 5 IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUEST ION WHETHER THE ALLEGED CREDIT BY THE APPELLANT WAS A GENUINE TRANSACTION, THE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN O R THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE ASSESSING OFFICE R CAN DISBELIEVE THE ALLEGED CREDIT. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE CREDITS, THE ONUS SHIFTS UPON THE ASSESSING OFFICER AND AFTER VERIFIC ATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE ASSESSING OFFICER TO THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE B URDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF CREDITS IN THE BANK ACCOUNT. THE ADDITION MADE BY THE AO AMOUNTING TO RS.23,37,850/- IS CONFIRMED. THEREFORE, THE APPEAL ON THIS GROUND IS DISMISSED. THE IMPOSITION OF PENALTY IS CONSEQUENTIAL IN NATUR E AND THEREFORE, NO ADJUDICATION IS REQUIRED AT THIS STAGE. FROM THE ABOVE FINDING OF THE LD. CIT(A), IT IS EVI DENT THAT HE HAS NOT CONSIDERED THE EVIDENCES PLACED BEFORE HIM. THEREFORE, AFTER CONSIDERING THE TOTALITY OF TH E FACTS AND IN THE INTEREST OF PRINCIPLES OF NATURAL JUSTICE, WE DEEM IT PROPER TO AFFORD AN OPPORTUNITY TO THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE A.O. WE THEREFORE, SE T ASIDE THE IMPUGNED ORDER AND RESTORE THE ASSESSMENT TO THE FILE OF THE A.O. TO MAKE ASSESSMENT AFRESH AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. GROUND RAISED IN THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 6 7. NOW WE TAKE UP ASSESSEES APPEAL IN ITA NO.608/IND/2017 PERTAINING TO THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED SOLITARY GROUND THAT READS AS UNDER: THE LEARNED A.O. ERRED IN MAKING ADDITION OF RS.45 ,43,500/- ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNT. 8. THE FACTS AND CIRCUMSTANCES ARE IDENTICAL EXCEPT CHANGE OF FIGURE IN THIS YEAR. THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENTS AS WERE IN ITA NO.607/IND/2017. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. THE IDENTICAL ISSUE CAME UP BEFORE THIS TRIBUNAL IN ITA NO.607/IND/2017. THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES IN IT A NO.607/IND/2017 (SUPRA) WHEREIN, WE HAVE DECIDED THE ISSUE BY OBSERVING AS UNDER: [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 7 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD. CIT(A) HAD DISMISSED THE APPEAL BY OBSE RVING AS UNDER: 5.1 GROUND NO.1:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ASSESSMENT OF INCOME AT RS.23,37,850 /- ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNT AND IMPOSITION OF PENALTY U /S 271(1)(B) OF THE I.T. THE APPELLANT IS RECEIVING SALARY FROM LIFE INSURANCE C ORPORATION AS DEVELOPMENT OFFICER. THE APPELLANT SUBMITTED THAT THE CASH DEP OSIT IS FROM THE ROTATIONAL FUND. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, REMAND PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS, THE APPELLANT HAS NOT FURNIS HED THE SOURCE OF CASH DEPOSIT IN THE APPELLANTS BANK ACCOUNT. THE APPELLANT HAS ALSO NOT FURNISHED THE PROOF THAT THE CASH DEPOSIT IS ROTATIONAL FUND. THE APPE LLANT HAS ALSO NOT FURNISHED THE PROOF OF RECEIPT OF CASH. THE APPELLANTS CASE CAN NOT BE CONSIDERED U/S 44 AD OF THE I.T. ACT AND TO ADOPT NET PROFIT OF CREDITS OF THAT PERIOD TO BE ADDED AND NOT THE WHOLE OF THE CREDIT IN BANK ACCOUNT OF THE APPE LLANT IS NOT ACCEPTABLE. THE APPELLANT FAILED TO ESTABLISH THAT THE CREDIT IN TH E BANK ACCOUNT IS FROM BUSINESS ACTIVITY. THE APPELLANT WAS EXPECTED TO FURNISH TH E SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT. HE WAS ALSO EXPECTED TO FURNISH THE COMPLETE NAMES AND ADDRESSES OF THE PERSONS FROM WHOM THE CASH HAS BEE N RECEIVED. THE APPELLANT COULD NOT ABLE TO EXPLAIN THE GENUINENESS OF THE TR ANSACTION. THE APPELLANT FAILED TO CLARIFY THE INTERNAL ENTRIES IN THE BANK ACCOUNT WITH SUFFICIENT PROOF. THE APPELLANT HAS NOT DISCHARGED ITS ONUS BY SUBMITTING THE SOURCE OF CASH DEPOSIT BEFORE THE A.O. AS WELL AS AT APPELLATE PROCEEDINGS . THE APPELLANT FAILED TO PROVE HIS CASE. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN THE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NAT URE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS CO ULD BE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWAYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXPAYER TO PROVE TH E GENUINENESS OF BORROWINGS OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACT S ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXPRESSION NATURE AND SOURCE HAS TO BE UNDER STOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFERRED. IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUEST ION WHETHER THE ALLEGED CREDIT BY THE APPELLANT WAS A GENUINE TRANSACTION, THE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN O R THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE ASSESSING OFFICE R CAN DISBELIEVE THE ALLEGED CREDIT. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE CREDITS, THE ONUS SHIFTS UPON THE ASSESSING OFFICER AND AFTER VERIFIC ATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE ASSESSING OFFICER TO THE APPELLANT. [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 8 THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE B URDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF CREDITS IN THE BANK ACCOUNT. THE ADDITION MADE BY THE AO AMOUNTING TO RS.23,37,850/- IS CONFIRMED. THEREFORE, THE APPEAL ON THIS GROUND IS DISMISSED. THE IMPOSITION OF PENALTY IS CONSEQUENTIAL IN NATUR E AND THEREFORE, NO ADJUDICATION IS REQUIRED AT THIS STAGE. FROM THE ABOVE FINDING OF THE LD. CIT(A), IT IS EVI DENT THAT HE HAS NOT CONSIDERED THE EVIDENCES PLACED BEFORE HIM. THEREFORE, AFTER CONSIDERING THE TOTALITY OF THE FACTS AND IN THE INTEREST OF PRINCIPLES OF NATURAL JUSTICE, WE DEEM IT PROPER TO AFFORD AN OPPORTUNITY TO THE ASSESSEE TO REPRESENT ITS CASE B EFORE THE A.O. WE THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ASSESSMENT TO THE FILE OF THE A.O. TO MAKE ASSESSMENT AFRESH A FTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. GROUND RAI SED IN THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. FOR THE SAME REASONING, THE GROUND RAISED IN THIS APPEAL IS ALSO ALLOWED FOR STATISTICAL PURPOSES. THE ASSESSMENT IS RESTORED TO THE FILE OF THE A.O. FOR D ECIDING AFRESH. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 24 . 01.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 24/01/2019 VG/SPS [ITA 607 & 608/IND/2017] [BENI PRASAD PARMAR, SHAJAPUR] 9 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE