SHRI DULA RAM MEENA, JAIPUR V. INCOME TAX OFFICER, WARD-6-1, JAIPUR

ITA 622/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7112 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 08-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANCHAL MEENA CIT DHK
• Keywords: Income from undisclosed sources; Source of fund; Set aside
• Section: 44AD; 131

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH VC B, JAIPUR JH JES'K LH- 'KEKZ] YS[KK LNL; ,O A H JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C. SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 622/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. SHRI DULA RAM MEENA 17, DURGA VIHAR, MALVIYA NAGAR, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 6(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AFWPM 4366 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : MS CHANCHAL MEENA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23.07.2020. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 25/08/2020. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 13.03.2018 OF LD. CIT (A) FOR THE ASSESSMENT YEAR 2014-15. THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CT (A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS. 23,64,200/- AS ALLEGED UNEXPLAINED BANK DEPOSITS. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJ USTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEAS E BE GRANTED BY DELETING THE SAID ADDITION OF RS. 23,64,200/-. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CT (A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS. 3,14,100/- ON ACCOUNT OF ALLEGED UN EXPLAINED BANK DEPOSITS. THE ACTION OF LD. CIT (A) IS ILLEGAL , UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 3,14,1 00/-. 2 ITA NO. 622/JP/2018 SHRI DULA RAM MEENA, JAIPUR. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CT (A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS. 6,01,000/- ON ACCOUNT OF ALLEGED UN EXPLAINED CASH RECEIPTS. THE ACTION OF LD. CIT (A) IS ILLEGAL , UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 6,01,0 00/-. 4. THE ASSESSEE CRAVES HIS RIGHT TO ADD, AMEND OR A LTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. GROUNDS NO. 1 & 2 ARE REGARDING ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT OF RS. 26,78,300/- IN THE BANK ACCOUNT . 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETU RN OF INCOME ON 27.03.2015 DECLARING TOTAL INCOME OF RS. 2,77,080/-. THE ASSES SEE HAS DECLARED THE INCOME FROM JOB WORK FROM JCB & TRACTOR UNDER THE PRESUMPTIVE P ROVISIONS OF SECTION 44AD OF THE IT ACT. DURING THE COURSE OF SCRUTINY ASSESSMEN T, THE AO NOTED THAT THE ASSESSEE HAS DEPOSITED CASH IN THE BANK ACCOUNT OF RS. 26,78,300/- WHICH REMAINS UNEXPLAINED. THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED UNDER SECTION 131 OF THE ACT IN RESPECT OF THE ASSESSEES EXPLANATION OF SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT. SINCE THE ASSESSEE WAS NOT MAINTAINING AN Y RECORD OF THE JOB CHARGES INCOME FROM HIRING OF JCB MACHINE AND TRACTOR TOTAL AMOUNTING TO RS. 26,78,300/-, THEREFORE, THE AO HAS TREATED THE SAID AMOUNT OF RS . 26,78,300/- AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE CHALLENGED THE A CTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE ASSESSEE HAS DECLARED THE INCOME FROM JOB CHARGES FROM HIRING OF JCB MACHINE AND TRACTOR TO THE TUNE OF RS. 23,64,200/- AND RS. 3,14,100/- RESPECTI VELY TOTAL AMOUNTING TO RS. 26,78,300/-. THUS THE ASSESSEE HAS EXPLAINED THE S OURCE OF DEPOSIT AS THE JOB 3 ITA NO. 622/JP/2018 SHRI DULA RAM MEENA, JAIPUR. CHARGES RECEIVED BY THE ASSESSEE ON WHICH THE ASSES SEE HAS DECLARED THE INCOME UNDER THE PROVISIONS OF SECTION 44AD. THE LD. A/R FURTHER SUBMITTED THAT APART FROM THE JOB CHARGES, THE ASSESSEE WAS ALSO HAVING OTHER SOURCE OF INCOME WHICH IS AS UNDER :- A. CASH GENERATED FROM AGRICULTURAL. B. CASH GENERATED FROM RENTING OUT HOUSE PROPERTY. C. CASH GENERATED FROM LEASING AND HIRING BUSINESS OF TRACTOR AND JCB D. CASH RECEIVED AS SALE CONSIDERATION AT THE TIME OF SALE OF LAND. E. CASH RECEIVED AS SALE CONSIDERATION AT THE TIME OF SALE OF SCORPIO. F. CASH WITHDRAWALS ON EARLIER OCCASIONS. THUS THE LD. A/R HAS SUBMITTED THAT WHEN THE ASSESS EE WAS HAVING THE SOURCE OF CASH MORE THAN WHAT IS DEPOSITED IN THE ACCOUNT, TH EN THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) IS NOT JUSTIFIED. THE AO HAS ACCEPTED THE INCOME DECLARED BY THE ASSESSEE ON ACCOUNT OF JOB CHARGES, HOWEVER THE DEPOSIT MADE IN THE BANK ACCOUNT WAS SEPARATELY ADDED. THUS THE LD . A/R HAS SUBMITTED THAT THE ADDITION MADE BY THE AO MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE ASSESSEE HAS NOT PRODUCED A SINGLE DOCUMENT OR EVEN THE DETAILS OF T HE RECEIPTS OF JOB CHARGES, THEREFORE, IN THE ABSENCE OF ANY DOCUMENTARY EVIDEN CE, THE SOURCE OF DEPOSIT MADE IN THE BANK ACCOUNT BEING JOB CHARGES CANNOT BE ACC EPTED. THE ASSESSEE HAS DELIBERATELY CONCEALED THE DETAILS AND INCOME OTHER WISE IT IS NOT PRACTICALLY POSSIBLE TO REMEMBER ALL THE TRANSACTIONS OF HIRING OF JCB A ND TRACTOR AND RECEIPTS ON 4 ITA NO. 622/JP/2018 SHRI DULA RAM MEENA, JAIPUR. ACCOUNT OF JOB CHARGES. THE LD. D/R HAS REFERRED T O THE ASSESSMENT ORDER AND SUBMITTED THAT THE AO HAS RECORDED THE STATEMENT OF THE ASSESSEE WHEREIN THE ASSESSEE HAS CLEARLY ACCEPTED THAT HE IS NOT MAINTA INING ANY RECORD THOUGH HE CLAIMED THAT A DIARY IS MAINTAINED BY HIM KEEPING T HE RECORD OF ALL THE RECEIPTS AND EXPENSES BUT THE SAME WAS NOT PRODUCED BY THE ASSES SEE EITHER BEFORE THE AO OR BEFORE THE LD. CIT (A) OR EVEN BEFORE THIS TRIBUNAL . THEREFORE, THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. SHE HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE HAS DECLARED THE INCOME UNDER THE PRESUMPTIVE PROVISIONS OF SECTION 44AD IN RESPECT O F JOB CHARGES RECEIVED BY THE ASSESSEE FROM HIRING OF JCB AND TRACTOR. THE AO HAS NOT DISPUTED THE FACT THAT THE ASSESSEE IS HAVING THE JCB MACHINE AND TRACTOR AND, THEREFORE, THE INCOME FROM HIRING OF THESE MACHINES CANNOT BE RULED OUT. THE A SSESSEE HAS DECLARED THE GROSS RECEIPTS FROM JCB AND TRACTOR AT RS. 26,78,300/- WH ICH IS THE AMOUNT FOUND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAS EXAMINED THE ASSESSEE AND R ECORDED HIS STATEMENT UNDER SECTION 131 OF THE IT ACT WHEREIN THE ASSESSEE HAS ACCEPTED THE FACT THAT HE IS NOT KEEPING ANY DOCUMENT OR ISSUING ANY BILL TO THE PAR TIES/CUSTOMERS FROM WHOM JOB CHARGES WERE RECEIVED BY THE ASSESSEE. IT IS ALSO CORRECT TO SAY THAT THE NUMBER OF TRANSACTIONS AND RECEIPTS ON ACCOUNT OF JOB CHARGES CANNOT BE REMEMBERED BY AN INDIVIDUAL IN THE ABSENCE OF ANY RECORD CONTAINING THE DETAILS OF ALL TRANSACTIONS. THE ASSESSEE THOUGH ACCEPTED THE FACT THAT HE IS MAINTA INING THE DIARY FOR THE PURPOSES 5 ITA NO. 622/JP/2018 SHRI DULA RAM MEENA, JAIPUR. OF RECORDING THE RECEIPTS ON ACCOUNT OF JOB CHARGES , HOWEVER, HE HAS NOT PRODUCED THE ALLEGED DIARY EITHER BEFORE THE AUTHORITIES BEL OW OR BEFORE US. THEREFORE IT APPEARS THAT THE ASSESSEE HAS DELIBERATELY CONCEALE D THE CORRECT FACTS REGARDING THE INCOME FROM JOB CHARGES. HOWEVER, THE ENTIRE DEPOSI T IN THE BANK ACCOUNT CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE WHEN THE AO HAS NOT DISTURBED THE INCOME OF THE ASSESSEE FROM JOB CHARGES. HENCE THE INCOME DECLARED BY THE ASSESSEE FROM JOB WORK ON HIRING OF JCB AND TRACTOR AS WELL AS OTHER INCOME BEING AGRICULTURAL INCOME ETC. AS CLAIMED BY THE ASSESSEE IS ALSO REQUIRED TO BE CONSIDERED WHILE TREATING THE CASH DEPOSIT MADE IN THE BANK AC COUNT AS UNEXPLAINED INCOME OF THE ASSESSEE. THEREFORE, IN THE FACTS AND CIRCUMST ANCES OF THE CASE, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO TO EXAMINE THE A VAILABILITY OF THE SOURCE OF CASH DEPOSIT MADE IN THE BANK ACCOUNT BY CONSIDERING ALL SOURCES OF INCOME OF THE ASSESSEE INCLUDING AGRICULTURAL INCOME, RENTAL INCO ME AND ANY RECEIPT ON SALE OF LAND, IF ANY. GROUND NO. 3 IS REGARDING ADDITION OF RS. 6,01,000/ - ON ACCOUNT OF UNEXPLAINED CASH RECEIPT . 6. THE AO HAS MADE THE ADDITION OF RS. 6,01,000/- B Y REJECTING THE EXPLANATION OF THE ASSESSEE THAT THE SAID AMOUNT WAS RECEIVED B Y THE ASSESSEE FROM ONE SHRI LALA RAM MEENA TO WHOM THE ASSESSEE HAS SOLD HIS VE HICLE, NAMELY, SCORPIO FOR A CONSIDERATION OF RS. 9,51,000/-. THE AO DECLINED TO ACCEPT THE SAID EXPLANATION ON THE GROUND THAT THE NOTICE ISSUED TO SHRI LALA RAM MEENA REMAINED UNSERVED. THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE AO. 6 ITA NO. 622/JP/2018 SHRI DULA RAM MEENA, JAIPUR. 7. BEFORE US, THE LD. A/R OF THE ASSESSEE, ON THE D IRECTION OF THE BENCH PRODUCED ALL THE DOCUMENTARY EVIDENCES REGARDING THE OWNERSH IP OF THE SCORPIO BY THE ASSESSEE, REPAYMENT OF THE LOAN OF HDFC BANK LTD. W HICH WAS AVAILED BY THE ASSESSEE TO FINANCE THE VEHICLE AND SUBSEQUENT SALE DOCUMENT OF THE SAID VEHICLE IN FAVOUR OF SHRI LALA RAM MEENA FOR A TOTAL CONSIDERA TION OF RS. 9,51,000/- OUT OF WHICH THE ASSESSEE RECEIVED RS. 6,01,000/- IN CASH DURING THE YEAR UNDER CONSIDERATION. THE LD. A/R HAS ALSO PRODUCED THE CO PIES OF SALE DOCUMENTS, CERTIFICATE OF THE BANK OF REPAYMENT OF LOAN AND DI SCHARGE OF HYPOTHECATION ON THE VEHICLE AS WELL AS TRANSFER OF THE SAID VEHICLE IN THE NAME OF SHRI LAL RAM MEENA. 8. ON THE OTHER HAND, THE LD. D/R HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 9. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSAL OF THE DOCUMENTARY EVIDENCES PRODUCED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE PURCHASED THE VEHICLE MAHINDRA SCORPIO FOR A TOTAL CONSIDERATION OF RS. 10,96,863/- ON 16.08.2012. THE SAID VEHICLE WAS SOLD BY THE ASS ESSEE TO ONE SHRI LALA RAM MEENA FOR A CONSIDERATION OF RS. 9,51,000/- AS EVID ENT FROM THE SALE DOCUMENT. FURTHER, THE LOAN TAKEN BY THE ASSESSEE FOR FINANCI NG OF THE VEHICLE AT THE TIME OF PURCHASE FROM HDFC BANK LTD. IS ALSO REPAID AS EVID ENT FROM THE NO OBJECTION CERTIFICATE FROM THE BANK WHEREBY THE HYPOTHECATION WAS REMOVED FROM THE VEHICLE. ACCORDINGLY WHEN THE ASSESSEE HAS PRODUCED ALL THES E DOCUMENTS WHICH SHOW THAT THE ASSESSEE SOLD HIS VEHICLE AND RECEIVED AN AMOUN T OF RS. 6,01,000/- IN CASH THEN THE SOURCE OF SAID CASH STAND EXPLAINED. ACCORDINGL Y THE ADDITION MADE BY THE AO ON THIS ACCOUNT IS DELETED. 7 ITA NO. 622/JP/2018 SHRI DULA RAM MEENA, JAIPUR. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25/08/20 20. SD/- SD/- ( JES'K LH- 'KEKZ ) ( FOT; IKY JKWO (RAMESH C. SHARMA ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 25/08/2020. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI DULA RAM MEENA, JAIPUR. 2. THE RESPONDENT THE ITO WARD 6(1), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 622/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR