Ses Ram S/o Sh. Bhikham Dass, Kullu V. ITO, Kullu

ITA 632/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6843 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTASR
• Assessee Lawyers: R R THAKUR ITP
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO/632/CHD/2017 ASSESSMENT YEAR : 2010-11 SHRI SES RAM, VS. THE ITO, S/O SHRI BHIKHAM DASS, KULLU (HP). VILLAGE BURWA, TEH-MANALI, DISTT. KULLU (HP). PAN NO. AVXPR1900J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.R.THAKUR, ITP RESPONDENT BY : SMT. CHANDER KANTA,SR.DR DATE OF HEARING : 11.07.2017 DATE OF PRONOUNCEMENT : 15.09.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 05.01.2017 OF LD.CIT (APPE ALS) PALAMPUR PERTAINING TO 2010-11 ASSESSMENT YEAR. 2. BOTH THE PARTIES HAVE BEEN HEARD. A PERUSAL OF THE ASSESSMENT ORDER AND THE IMPUGNED ORDER SHOWS THAT THE SCRUTINY ASSESSMENT ORDER U/S 143(3)/147 WAS PASSED CONSIDERING THE FACT THAT THER E WERE DEPOSITS OF RS. 43,00,500/- IN THE SAVING BANK ACCOUNT OF THE ASSE SSEE. THE ASSESSEE AS PER RECORD WAS ENGAGED IN THE BUSINESS OF APPLE TRADING. DEPOSITS WERE REQUIRED TO BE EXPLAINED. THE ASSESSEE CLA IMED OPENING CAPITAL OF RS. 2150500/- WHICH WAS ALSO REQUIRED TO BE EXPLAINED. THE FACTS AS BROUGHT OUT FROM THE ASSESSMENT ORDER ARE THAT THE ASSESSEE WAS FOUND TO HAVE NOT FILED ANY RETURN OF INCOME PRIOR TO THIS ASSESSMENT YEAR. THE ASSESSEE HAD FILED THE CAPITAL ACCOUNT FOR THE PERIOD END 31/03/2004. 31/03/2005, 31/03/2006, 31/03/ 2007, 31/03/2008 AND 31/03/2009. THE AO NOTED THAT ADDITI ONS FOR THE CAPITAL ACCOUNT AS AGRICULTURE INCOME WAS MADE BY T HE ASSESSEE IN ALL YEARS AS UNDER: ADVANCES FOR ORCHARDS PURCHASE: 1. CHANE RAM RS.300000/- 2. CHUNI LAL RS. 350000/- ITA 632/CHD/2017 A.Y. 2010-11 PAGE 2 OF 3 3. DAMBU RAM RS. 200000/- 4. MEGH NATH RS. 50000/- 5. ROSHANLAL RS.200000/- TOTAL RS. 2150500 2.1 THE ASSESSEE CLAIMED ADVANCES TO HAVE BEEN MADE T O THE FOLLOWING PARTIES : ADVANCES FOR ORCHARDS PURCHASE: 1 CHANE RAM RS.300000/- 2 CHUNI LAL RS. 350000/- 3 DAMBU RAM RS. 200000/- 4 MEGH NATH RS. 50000/- 5. ROSHANLAL RS.200000/- TOTAL RS. 2150500 2.2 THE ASSESSEE WAS REQUIRED TO JUSTIFY THE SAME. TH E AO NOTED THAT HE COULD NOT FILE ANY DOCUMENTARY EVIDENCES S UCH AS WITHDRAWALS FROM BANK ACCOUNT ETC. FROM WHICH HE HAS MADE THE A DVANCES. 2.3 THEREFORE, IT WAS HELD THAT THE ADVANCES MADE R EMAINED UNEXPLAINED TO THE TUNE OF RS. 7,00,500/- ( RS. 215 0500/- MINUS RS. 1450000/- AGRICULTURE INCOME FOR THE YEAR 2008-09) AND SAME WAS ADDED IN THE HANDS OF THE ASSESSEE. 3. THE ASSESSEE IN ITS CHALLENGE BEFORE THE CIT(A) WAS UN SUCCESSFUL LEADING TO THE FILING OF THE PRESENT APPEAL. 3.1 THE LD. AR REITERATED SUBMISSIONS BEFORE THE CIT(A), HOW EVER. IN THE ABSENCE OF ANY CLARITY ON WHICH FACT THE EXPLANATION W AS CONSIDERED AND FOUND NOT ACCEPTABLE IS NOT COMING OUT FROM THE RECO RD, RELIANCE WAS ULTIMATELY PLACED ON THE ARGUMENTS ADVANCED BEFORE THE CIT(A). THE LD. DR THOUGH RELIED UPON THE IMPUGNED ORDER, HOWEVER, ON QU ERY WAS ALSO UNABLE FROM THE ASSESSMENT ORDER TO SHOW WHAT PART OF THE EXPLANATION WAS FOUND TO BE UNEXPLAINABLE BY THE AO. IT IS SEEN THAT THE ASSESSEE WAS REQUIRED TO JUSTIFY THE ADVANCE OF RS. 21,50,500/- H OWEVER, ADDITION BY THE AO HAS BEEN MADE OF RS. 7,00,500/-. IT IS FOR THE AO TO SPELL OUT WHAT PART OF THE EXPLANATION WAS FOUND TO BE NOT BELIEVAB LE. IN THE ABSENCE OF THE SAME, THE GENERAL EXPLANATION OFFERED BEFORE LD. CIT(A) SHOULD HAVE BEEN ACCEPTED. IN THE ABSENCE OF ANY CLA RITY IN THE ASSESSMENT ORDER ITSELF, THE ADDITION BECOMES UNEXPLAINED A ND CONFUSING. IN THE CIRCUMSTANCES, THE LD. SR.DR REQUESTS THAT THE MATTER MAY BE REMANDED TO THE CIT(A) TO ADDRESS THE MAINTAINAB ILITY OF THE ADDITION. THE RECORD SHOWS THAT BEFORE THE CIT(A), IT IS SE EN THE ASSESSEE GAVE THE FOLLOWING EXPLANATION: THE ASSESSEE HAS FILED A COPY OF CAPITAL ACCOUNT FR OM 31-03-2004 TO 31-03-2009 SHOWING CLOSING BALANCE AT RS.21, 50, 500/- AS ON 3 1-3-2009. A PHOTO COPY OF THIS ITA 632/CHD/2017 A.Y. 2010-11 PAGE 3 OF 3 CAPITAL ACCOUNT ALONG WITH A STATEMENT OF SH. SES R AM RECORDED IS ENCLOSED HEREWITH. THE COPY OF CAPITAL ACCOUNT OF SHRI CHANE RAM, CHUNI LAL, DAMBU RAM, MEGH NATH, AND ROSHAN LAI IS ALSO ENCLOS ED HEREWITH. THESE COPIES OF ACCOUNTS SHOW THE OPENING BALANCE AS ON 1 -4-2009 IN THE ACCOUNT OF THESE PEOPLE AS PER WHICH ADDITION WAS MADE IN THE ASSESSMENT ORDER. IF WE GO TO THE COPY OF ACCOUNT OF THESE PEOPLE, IT IS SEEN THAT THE OPENING BALANCES SHOWN IN THEIR ACCOUNT HAVE BEEN ADDED BY THE LD. A SSESSING OFFICER IN THE INCOME OF THE APPELLANT. THE ABOVE SAID AMOUNTS COM E TO RS.11,00,000/- AND THE LD. ASSESSING OFFICER HAS ADMITTED THE AMOUNT OF CA SH IN HAND AS ON 1-4-2009 AT TOTAL AMOUNT AS ON 31-3-2009 WHICH COMES TO RS.2 1,50,500/- WHICH TALLY THE FIGURE IN THE COPY OF CAPITAL ACCOUNT OF THE AP PELLANT. PHOTO COPY OF REPLY TO INCOME TAX OFFICER IS ALSO SUBMITTED. IN VIEW OF THE ABOVE SUBMISSION IT IS SUBMITTED THA T THE LD. ASSESSING OFFICER HAS WRONGLY ADDED THE AMOUNT OF DEBTORS SHOWN AS OP ENING BALANCE IN THE BOOKS OF ACCOUNT IN THE INCOME OF APPELLANT. THIS A MOUNT WAS ADVANCED BY THE APPELLANT IN EARLIER YEAR TO THESE PERSONS WHIC H WAS SHOWN A OPENING BALANCE AT THE BEGINNING OF YEAR AS ON 1-04-2009. I T IS, THEREFORE, PRAYED THAT THE ADDITION OF RS.7,00,500/- MADE IN THE INCO ME OF THE APPELLANT MAY KINDLY BE DELETED. 3.2 ACCORDINGLY, IN THE ABSENCE OF ANY CLARITY IN THE ASSE SSMENT ORDER ITSELF WHICH WAS UNDER CHALLENGE BEFORE THE CIT(A), THE ISSUE IS RESTORED BACK TO THE FILE OF CIT(A) WITH A DIRECTION TO FIRST ADDRESS T HE FACTS AND THEN PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING BOTH THE PARTIES, IF NEED BE, A REASONABLE OPPORTUNITY OF BEING HEARD. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH SEPT.,2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.