SHRIMATI. SUDESH NARULA, FEROZPUR V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, AMRITSAR

ITA 620/ASR/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0803 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 09-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 144; 153A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 Sudesh Narula, Meghe Walian WaliGali, Guru Harsahai, Frozpur. [PAN: AACPN5730C] (Appellant) Vs. Dy. Commissioner of Income, Central Circle, Amritsar. (Respondent) Appellant by None Respondent by Sh. Rohit Mehra, CIT.DR Date of Hearing 25.08.2022 Date of Pronouncement 14.10.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeals)-5,Ludhiana, [in brevity the CIT(A)] bearing appeal No.65/IT/CIT(A)-5/LDH/2016-17, date of order 18.09.2018, the order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 2 2013-14.The impugned order is emanated from the order of the ld. Dy. Commissioner of Income Tax, Central Circle, Amritsar(in brevity the AO) order passed u/s 144r.w.s. 153Aof the Act date of order 22.03.2016. The assessee took the following grounds which are reproduced as under: “1. That the order passed by the Hon’ble CIT(A) dated 18.09.2018 is against the law and facts of the case. 2. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s 153A/144 of the Act is bad in law and against the facts and circumstances of the case and is not sustainable on various legal and factual grounds. 3. That in any case and in any view of the matter, additions made in the impugned order are beyond jurisdiction and illegal also for the reason that these could not have been made since no incriminating material has been found as a result of search warranting impugned addition. I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 3 4. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 28,35,000/- u/s 68 of the Act on account of credit in bank account without considering the submission of assessee and ignoring the principle of natural justice. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 2. Tersely, we advert the fact of the case is that a search was conducted in the premises of the assessee and accordingly assessee filed a return. The total cash was deposited in the bank amount of Rs.34,04,600/-. The assessee declared in the return the income amount of Rs.5,69,600/-. The balance amount of Rs.28,35,000/- (Rs.34,04,600/- (-) Rs.5,69,600/-) was added back with the total income of the assessee for unexplained deposit in bank account. The assessment was completed ex parte u/s 144 of the Act. The appellant filed an appeal before the ld. CIT(A) against the order of the ld. AO. I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 4 2.1 During the appeal proceedings the assessee filed the additional evidences under Rule 46A of the Income Tax Rule 1962 (in brevity Rule) and explained the deposit in the following manners. The extract of relevant paragraph from the appellate order is reproduced as under: Date Remarks 3,00,000.00 05.11.2012 Amount was received from Guru Harsahai foods, copy of ledger account enclosed herewith. 5,00,000.00 20.12.2012 Amount was received from Narula Foods Pvt. Ltd-Unit-2, copy of ledger account enclosed herewith. 11,00,000.00 31.01.2013 Amount was received from Guru Harsahai foods, copy of ledger account enclosed herewith. 6,00,000.00 20.03.2013 Amount was received from M/s Sat Kartarsolvex P. Ltd. 3,35,000.00 21.03.2013 Amount was received from Labha Ram 8s sons, which represent the agricultural receipt of assessee. Copy of statement is enclosed herewith. 3. The ld. CIT(A) considered the submission of the ld. AO and upheld the order of the assessing authority. Being aggrieved assessee filed an appeal before us. 4. During the appeal proceeding the assessee filed an application for adjournment. The matter was too old, so, the matter is taken up with the consent of the CIT DR for adjudication. We consider the submission of the revenue and the order of both the revenue authorities. The assessee was unable to produce the explanation before the assessing authority. The order was passed u/s 144 of the I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 5 Act. During the appeal proceeding the documents filed as an additional evidence Rule 46A of the Rule. The remand report was called for from the ld. AO. The main grievance of the ld. AO was that the assessee had not submitted the documents during assessment proceeding, so, no verification was allowed and the demand was sustained. 4.1 The ld. CIT(A) had put his findings which is the legal ground for challenging the application of section 153A of the Act. The observation of the ld. AO is extracted from appeal order page no. 9 para 3.1 is as follows: “3.1 Ground of Appeal No. 1:- Under this ground, the appellant has challenged the assessment order in a general way. The AO has duly given the basis for making the addition. In the starting paragraph of the assessment order (on first page), the AO has mentioned about the non-compliance by the assessee and notices issued u/s 144 on various occasions giving the lines on which the assessment was proposed to be made. Before passing the assessment order, the AO as per requirement of the law issued a show cause notice to the assessee, hence the order passed u/s 144 r.w.s. 153A is found as per law. Therefore, this ground of appeal is dismissed.” I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 6 4.2 Related to other grounds, the factual grounds are duly adjudicated by the ld. CIT(A). The assessee had explained the deposit of the amount in the bank account and the supporting evidence are also filed before the ld. CIT(A). Here, we are reproducing the observation of the ld. CIT(A) para 3.2 page 9 is reproduced as below: “3.2 “........................................................” “The facts of the case, the basis of addition made by the A.O. and the arguments of the AR during the appellate proceedings have been considered. The AR has submitted that the amounts of Rs. 3,00,000/- on 05.11.2012 & Rs.11.00.000/- on 31.01.2013 were received from M/s. Guru Harsahai Foods and Rs. 5.00.000/- on 20.12.2012 was received from M/s. Narula Foods Pvt. Ltd., Unit-ll, and Rs. 6,00,000/- on 20.03.2013 was received from M/s. SatkartarSolvexPvt. Ltd. Further, Rs. 3,35,000/- on 21.03.2013 received from M/s. Labha Ram & Sons represents agricultural receipt of the assessee. It is however seen that no document supporting the contention regarding credit entries received from different companies or nature of these credits receipts have been filed before the AO even during the remand proceedings, as informed by the AO vide her letter dated 31.08.2017. It is seen that the assessee remained non- cooperative during the assessment proceedings as well as I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 7 during the remand proceedings when another chance was given to get the documents verified before the AO. In the absence of satisfactory explanation about the nature of the credit entries and due to lack of supporting documents for explanation regarding the source of credit entries, the same are to be treated as unaccounted income of the assessee.” 5. The ld. CIT-DR vehemently argued and mentioned that the amount of Rs.3,35,000/- received from M/s Labha Ram and Sons is related to agricultural receipts of the assessee against which the assessee declared net agricultural income amount of Rs.2,39,852/-. But the assessee has not possession of any agricultural land during this financial year, only on the basis of lease deed the amount cannot be accepted. In other point the ld. CIT DR had not made any strong objection against the assessee’s plea during appeal proceeding. 6. After a thoughtful consideration, it is in our opinion that during the appeal proceeding appellant had elaborately explained the deposit in the bank account with the ledger account. The ld. CIT(A) has inherent power to verify the documents and adjudicate accordingly. By considering the legal maximaudialtrem partem the ld. CIT(A) also allowed the ld. AO the reasonable opportunity for his I.T.A. No.620/Asr/2018 Assessment Year: 2013-14 8 opinion about the submission of the assessee. The entries in the bank account are duly explained. The ld. CIT(A) had not made any adverse remarks in any of the deposit in bank account of the assessee. But at the end he had upheld the addition amount of Rs.28,35,000/- u/s 68 of the Act. We find no infirmity in the order of the ld. CIT(A). Accordingly, the addition made by the ld. AO Rs.28,35,000/- is quashed. 7. In the result, the appeal of the assessee bearing appeal ITA no. 620/Asr/2018 is allowed. Order pronounced in the open court on 14.10.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order