Sri Prakash Bhandary, Bhubaneswar V. ITO, Ward-3(4), Bhubaneswar

ITA 65/CTK/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3773 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: PURNA CHANDRA MISHRA
• Keywords: Business income

Judgement Text

1 ITA NO.65/CTK/2017 ASSESSMENT YEAR :2012 - 2013 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 65/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 SHRI PRAKASH BANDARY, S - 3/9, BDA COMMERCIAL COMPLEX, BARAMUNDA, BHUBANESWAR. VS. ITO, WARD 3(4), BHUBANESWAR . PAN/GIR NO. AETPB 0155 Q (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PURNA CHANDRA MISHRA, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 14 /06 / 2017 DATE OF PRONOUNCEMENT : 16 /06 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR , DATED 17.11 .2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.23,77,750/ - U/S.69 OF THE ACT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEPOSITED CASH OF RS.21,57,595/ - IN HIS S.B ACCOUNT WITH STATE BANK OF INDI A, BHUBANESWAR. 2 ITA NO.65/CTK/2017 ASSESSMENT YEAR :2012 - 2013 ON EXAMINATION OF THE BANK ACCOUNT, HE FOUND THAT TOTAL DEPOSITS IN THIS ACCOUNT ARE OF RS.1,18,84,287/ - AND OUT OF THE SAME RS.85,91,692/ - PERTAINS TO CONTRA ENTRY TRANSACTIONS FROM A FIRM NAMELY M/S. SUGI MARKETING, WHERE THE ASSESSEE IS A PARTNER. THE ASSESSING OFFICER EXCLUDED THE CONTRA ENTRY AND HELD THAT BALANCE AMOUNT OF R S.35,92,595/ - WAS ASSESSEES UNDISCLOSED INCOME, WHICH INCLUDED CASH DEPOSIT OF RS.21,57,595/ - AND BALANCE AMOUNT OF RS.14,35,000/ - BY WAY OF CHEQUE DEPOSITS/TRAN SFER. THE ASSESSING OFFICER ON EXAMINATION OF ASSESSEES ACCOUNT WITH AXIS BANK, FOUND THAT THERE ARE TOTAL DEPOSITS OF RS. 3,20,971/ - , WHICH WAS ALSO HELD TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE. CONSIDERING THE TWO BANK ACCOUNTS, THE ASSESSING OFF ICER MADE ADDITION OF RS.39,13,566/ - . 4. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT IT DEALS IN SALE OF MIXED SOLVENT AND INDUSTRIAL SOLVENT AND TOTAL SALES AND PURCHASES DURING THE YEAR ARE SHOWN AT RS.26,47,668/ - AND RS.22,40,513/ - , RESPECTIVELY. ALL EVIDENCES AND PURCHASE INVOICES AND SALES MEMOS WERE SUBMITTED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT ACCEPT THE EXISTENCE OF THE BUSINESS ON THE GROUND THA T PAYMENTS WERE MADE MOSTLY TO KOLKATA PARTIES THROUGH NEFT/ RTGS/CHEQUES, ELECTRONIC TRANSFER AS EVIDENT FROM THE SAVING BANK ACCOUNT MAINTAINED IN STATE BANK OF INDIA AND AXIS BANK ACCOUNT. FURTHER, THE ASSESSING OFFICER DID NOT BELIEVE THE EXISTENCE OF BUSINESS, WHICH INVOLVED PURCHASES AND SALES OF 3 ITA NO.65/CTK/2017 ASSESSMENT YEAR :2012 - 2013 GOODS. THE WHOLESALE DEALERS FROM WHOM PURCHASES WERE MADE HAVE GIVEN CONFIRMATION LETTERS BY SPEED POST, WHICH WAS FILED BEFORE THE ASSESSING OFFICER. ALL THE CASH DEPOSITS WERE NOTHING BUT SALE PROCEEDS RECEIVED FROM OUTSIDE PARTIES AND BUSINESS COUNTER TOTALLING TO RS.21,57,595/ - AS AGAINST THE TOTAL SALES SHOWN IN THE PROFIT AND LOSS ACCOUNT OF RS.26,47,668/ - . 5. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS HELD THAT ON VERIFICATION OF CALCULATION, THE TOTAL DEPOSITS IN STATE BANK OF INDIA AND AXIS BANK ARE O F RS.1,35,38,945/ - . HE OBSERVED THAT THE CONTRA ENTRIES AS PER THE BANK STATEMENT ARE OF RS.1,06,40,000/ - FROM M/S. SUGI MARKETING OF RS.1,76,000/ - , FIXED DEPOSIT WITHDRAWAL OF RS.2,75,195/ - AND RECEIPT FROM PUSPANJALI MOHAPATRA OF RS.1,00,000/ - AGGREGAT ING TO RS.1,11,91,195/ - . THEREFORE, THE UNEXPLAINED DEPOSITS IN BANKS ARE OF RS.23,77,750/ - (RS.1,35,68,945 RS.1,11,91,195). THEREAFTER, THE CIT(A) OBSERVED THAT IT IS THE CONTENTION OF THE ASSESSEE THAT THE AFORESAID BALANCE DEPOSITS IN BANK OF RS.23,7 7,750/ - ARE DISCLOSED BY HIM IN THE SALE OF RS.26,47,668/ - CREDITED IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER REJECTED THIS EXPLANATION OF THE ASSESSEE IN THE ASSESSMENT ORDER. ACCORDING TO THE ASSESSING OFFICER, IF THE ASSESSEE WAS DOING THE BUSINESS OF TRADING IN SOLVENTS AND MAINTAINED BOOKS OF ACCOUNT THEN HE SHOULD HAVE FILED HIS RETURN OF INCOME IN ITR - 4 INSTEAD OF ITR 4S. ITR - 4S IS MEANT FOR DISCLOSURE OF BUSINESS PROFIT ON PRESUMPTIVE BASIS, WHEREAS ITR - 4 IS TO BE FILED WHEN 4 ITA NO.65/CTK/2017 ASSESSMENT YEAR :2012 - 2013 THE AS SESSEE MAINTAINS BOOKS OF ACCOUNT. IN ITR 4, THE PARTICULARS OF BALANCES SHEET AS WELL AS PROFIT AND LOSS ACCOUNT ARE TO BE FURNISHED. HE OBSERVED THAT I AGREE WITH THE ASSESSING OFFICER THAT HAD THE ASSESSEE FILED RETURN OF INCOME IN ITR - 4, HE WOULD H AVE BEEN IN A POSITION TO ESTABLISH THAT HE WAS DOING BUSINESS IN SOLVENT. FURTHER, THE CIT(A) OBSERVED THAT HE FOUND MERIT IN THE DECISION OF THE ASSESSING OFFICER THAT THE PLEA OF TRADING IN SOLVENTS WAS TAKEN WHEN THE CASE WAS REOPENED TO EXAM INE THE S OURCE OF CASH DEPOSIT IN STATE BANK OF INDIA AND AXIS BANK . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH NAME, ADDRESS AND BILLS OF THE PERSONS FROM WHOM PURCHASES AND TO WHOM THE SALE WERE MADE. THE ASSESSEE FURNISHED THESE DETAILS. THE ASSESSING OFFICER ISSU ED NOTICES U/S.133(6) OF THE ACT TO THE SAID SUPPLIERS AND SELLERS. ALL THESE NOTICES WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARKS INSUFFICIENT ADDRESS OR NOT KNOWN. THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE ASSESSI NG OFFICER. THE ASSESSEE TOOK THE PLEA THAT THE ADDRESSES OF THE SUPPLIERS AND THE SELLERS MIGHT HAVE BEEN CHANGED AND SUBMITTED NEW ADDRESSES. THE ASSESSING OFFICER SENT NOTICES AT NEW ADDRESSEES BUT NO REPLY WAS RECEIVED FROM THESE PARTIES. THEREFORE, IT WAS HELD THAT THE ASSESSEE HAS NO T ESTABLISHED THE TRADING ACTIVITY. THE CIT (A), THEREFORE, HELD THAT DEPOSITS OF RS.23,77,750/ - ARE NOT ON ACCOUNT OF BUSINESS RECEIPTS. THESE DEPOSITS ARE FROM UNDISCLOSED SOURCES AND HENCE, HE CONFIRMED THE ADDITIO N TO THE 5 ITA NO.65/CTK/2017 ASSESSMENT YEAR :2012 - 2013 EXTENT OF RS.23,77,750/ - AND ALLOWED RELIEF OF RS.15,35,816/ - TO THE ASSESSEE. 6. BEFORE ME, LD A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 7. LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. I FIND THAT NO POSITIVE MAT ERIAL COULD BE BROUGHT ON RECORD BEFORE ME BY LD A.R. OF THE ASSESSEE TO DEMONSTRATE THAT THE ASSESSEE WAS CARRYING ON BUSINESS OF SOLVENTS AND THAT THE DEPOSITS IN THE BANK ACCOUNTS OF RS.23,77,750/ - WAS OUT OF SALE PROCEEDS FROM THE SAID BUSINESS. THE A SSESSEE HAS FAILED TO DO SO BEFORE THE ASSESSING OFFICER AND CIT(A) ALSO. THEREFORE, I FIND NO GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 16 /06 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 16 /0 6 /2017 B.K.PARIDA, SPS 6 ITA NO.65/CTK/2017 ASSESSMENT YEAR :2012 - 2013 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SHRI PRAKASH BANDARY, S - 3/9, BDA COMMERCIAL COMPLEX, BARAMUNDA, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 3(4), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//