Laxmidhar Jagadev, Puri V. ITO, Khurda Ward, Khurda

ITA 72/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7181 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: GOLAK BIHARI JENA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 72 /CTK/2016 ASSESSMENT YEAR : 2011 - 12 SRI LAXMIDHAR JAGDEV, S/O BHIKARI CHARAN MANGARAJ, AT/PO: BAKU, VIA: NIRAKHARPUR, PURI VS. ITO, KHURDA WARD, KHURDA PAN NO.AINPJ 8773 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI GOLAK BIHARI JENA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 07 /03 / 2017 DATE OF PRONOUNCEMENT : 07/03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR, DATED 10.11.2015 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER MA KING ADDITION OF RS.19,32,000/ - AS UNEXPLAINED DEPOSIT IN THE BANK. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS OF THE CASE 2 ITA NO. 72/CTK/2016 ASSESSMENT YEAR :2011 - 12 ARE THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT DISCLOSED ANY BANK AND CASH BALANCE IN THE RETURN FILED. HE OBSERVED THAT THE ASSESSEE IS MAINTAINING A SAVING BANK ACCOUNT NO.20440100002335 WITH BANK OF BARODA, NIRAKARPUR, KHURDA. ON EXAMI NATION OF THE SAID ACCOUNT, THE ASSESSING OFFICER FOUND THAT THERE WERE CASH DEPOSITS OF RS.41,15,000/ - ON SEVERAL DATES DURING THE YEAR. THE ASSESSEE SUBMITTED THAT THE ASSESSEE MANAGE HIS FIRST COUSINS FUEL STATION UNIT WHICH IS SITUATED IN HIS NATIVE VILLAGE. THE OWNER OF FUEL STATION IS SMT. ANUPAMA JAGDEV AND THE NAME OF THE FUEL UNIT IS M/S. BAJARANGI KISSAN SEVA KENDRA, SITUATED AT SARADHAPUR, BAKU. THE OWNER OF FUEL TANK, BEING A LADY AND STAYING MOSTLY OUT OF STATION, REQUESTED THE ASSESSEE TO MANAGE ALL THE RECEIPT AND PAYMENT OF THE FUEL STATION BETWEEN INDIAN OIL CORPORATION LTD. AND COLLECTION OF DAILY SALES. THE ASSESSEE COLLECTED THE AMOUNT OF COUNTER SALES AND DEPOSITED AT HIS OWN ACCOUNT BECAUSE AFTER TWO OR THREE DAYS THE SAID AMOUNT W AS SENT TO INDIAN OIL CORPORATION BY DRAFT FOR LIFTING OF CONSIGNMENT . THEREAFTER, THE ASSESSING OFFICER OBTAINED INFORMATION FROM SMT. SNUPAMA JAGDEV ON THE ABOVE CONTENTION OF THE ASSESSEE AND ALSO ASKED HER TO CONFIRM WHETHER THE SALE PROCEEDS OF HER P ETROL PUMP HAD BEEN DEPOSITED IN THE SAVING BANK ACCOUNT OF THE ASSESSEE AND WHETHER THE TRANSACTIONS IN THE SAID ACCOUNT WAS DISCLOSED IN HER ACCOUNTS. THE ASSESSEE WAS ALSO ASKED TO FURNISH CONFIRMATION FROM SMT. JAGDEV IN THIS REGARD AND ALSO FURNISH A COPY OF THE AGREEMENT BY VIRTUE OF WHICH THE SALE PROCEEDS OF THE PETROL PUMP OF SMT. JAGDEV WERE BEING DEPOSITED IN THE 3 ITA NO. 72/CTK/2016 ASSESSMENT YEAR :2011 - 12 ACCOUNT OF THE ASSESSEE. SMT. ANUPAMA JAGDEV CONFIRMED THAT THE SALE PROCEEDS OF HER PETROL PUMP BUSINESS WERE BEING D EPOSITED IN THE SAVING BANK ACCOUNT OF THE ASSESSEE IN BANK OF BARODA SINCE THE ASSESSEE WAS AUTHORIZED BY HER TO DO SO. HOWEVER, ON EXAMINATION OF THE AUDITED ACCOUNTS OF SMT. JAGDEV, THE ASSESSING OFFICER FOUND THAT SHE HAD MAINTAINED A C ASH C REDIT ACCOUNT AND THE CLOSI NG BALANCE IN THAT ACCOUNT WOULD HAVE BEEN DIFFERENT HAD THE SALE PROCEEDS OF HER BUSINESS BEEN DEPOSITED IN THAT ACCOUNT. HE FURTHER NOTED THAT IF THE SALE PROCEEDS OF THE FUEL BUSINESS OF SMT. JAGDEV WERE BEING DEPOSITED IN THE ACCOUNT OF THE ASSESSEE TH EN THE CLOSING BALANCE IN THAT ACCOUNT WOULD HAVE BEEN REFLECTED IN HER BALANCE SHEET. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AN AFFIDAVIT WAS FILED BY THE ASSESEE BEFORE THE ASSESSING OFFICER, WHEREIN, IT WAS STATED THAT USUALLY OUT OF THE SALE PR OCEEDS FROM FUEL UNIT, HE MAKE T HE PAYMENT TO THE OIL COMPANY. I .E. INDIAN OIL CORPORATION LTD. FURTHER HE WAS AUTH ORIZED BY THE OWNER OF THE UNIT TO OPERATE BANK ACCOUNT OF SMT. ANUPAMA JAGADEV BUT WITHDRAWAL POWER WAS KEPT WITH THE OWNER OF THE FUEL UNIT ' . THE ASSESSING OFFICER OBSERVED THAT THE AVERMENTS IN THE AFFIDAVIT WERE CONTRADICTORY AND HENCE, HE ISSUED A NOTICE TO THE ASSESSEE ASKING HIM TO EXPLAIN AS UNDER: 'IN THE AFFIDAVIT YOU HAVE AFFIRMED THAT YOU OPERATE (MAKE DEPOSIT) THE BANK ACCOUNT OF SMT. ANUPAMA JAGADEV (EMPHASIS SUPPLIED) BUT WITHDRAWAL POWER WAS KEPT WITH THE OWNER OF THE FUEL UNIT. THUS, IT CLE A RLY PROVES THAT THE DEPOSITS MADE IN YOUR S . B. ACC OUNT NO.20440100002335 WITH BANK OF BORADA BELONGS TO YOU. AFTER FILING OF THIS AFFIDAVIT YOUR EARLIER STATEMENT IN WHICH YOU HAVE CLAIMED THAT YOU COLLECT THE SALES PROCEEDS OF THE PETROL PUMP AND DEPOSIT THE SAME IN YOUR OWN S. B. ACCOUNT IN ABSENCE OF A NY BANK ACCOUNT OF 4 ITA NO. 72/CTK/2016 ASSESSMENT YEAR :2011 - 12 THE OWNER SMT. ANUPAMA JAGADEV STANDS ALTERED. THEREFORE, YOU ARE REQUESTED TO EXPLAIN WHY THE DEPOSITS IN YOUR S.B. ACCOUNT SHALL NOT BE TREATED AS UNEXPLAINED MONEY AND THE AMOUNT PAID TO OIL C OMP ANY SHALL NOT BE TREATED AS UNE XPLAINED MONEY AND THE AMOUNT PAID TO OIL COMPANY SHALL NOT BE TREATED AS LOAN ADVANCED TO SMT. ANUPAMA JAGADEV. SECON D LY, YOU ARE ALSO REQUESTED TO FURNISH COPY OF ANY AGREEMENT BETWEEN YOU AND SMT. ANUPAMA JAGADEV FOR CONDUCTING THE BUSINESS FOR HER. 4. THE AS SESSEE EXPRESSED HIS INABILITY COMPLY WITH THE TERMS OF THE AFORESAID NOTICE. THEREFORE, THE ASSESSING OFFICER ANALYSED THE TRANSACTION IN THE ASSESSEES BANK ACCOUNT WITH BANK OF BARODA AND CALCULATED THE UNEXPLAINED DEPOSIT GIVING CREDIT TO THE CASH WIT HDRAWALS FOR SUBSEQUENT CASH DEPOSIT. AS PER THE CALCULATION OF THE ASSESSING OFFICER, THE TOTAL UNEXPLAINED CASH DEPOSIT IN THE ACCOUNT WITH BANK OF BARODA AMOUNTED TO RS.19,32,000/ - AND THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. ON APPEA L, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: IN THE COURSE OF APPEAL HEARING, THE ASSESSEE'S A/R HAS REITERATED SAME ARGUMENT AS WAS MADE BEFORE THE AO. IT HAS BEEN CONTENDED THAT THE CAS H DEPOSITS CAME FROM THE SALE PROCEEDS OF THE FUEL BUSINESS OF SMT. ANUPAMA JAGDEV. I FIND THAT THE AO, IN THE COURSE OF ASSESSMENT PROCEEDING, HAD CONSIDERED ALL SUCH CONTENTIONS RAISED BY THE ASSESSEE AND WITH COGENT AND CONVINCING REASONS REJECTED THE SA ME. NO INFIRMITY OR INCONGRUENCE IS NOTICED IN THE REASONING GIVEN BY THE OFFICER IN THIS REGARD. I FULLY ENDORSED THE SAME. IT CANNOT BE ACCEPTED THAT THE SALE PROCEEDS OF THE BUSINESS OF SMT. ANUPAMA JAGDEV WAS BEING DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. SMT. JAGDEV HAD A CASH CREDIT ACCOUNT AND AS PER THE USUAL TERMS OF SUCH ACCOUNT WHICH IS NOTHING BUT A LOAN ACCOUNT, THE SALE PROCEEDS OF THE ACCOUNT HOLDER CANNOT BE DEPOSITED IN SOMEBODY ELSE'S ACCOUNT. USUALLY THE CASH CREDIT ACCOUNTS ARE SEC URED WITH HYPOTHECATION OF THE STOCK - IN - TRADE. GOING BY THE PRINCIPLE OF PREPONDERANCE OF PROBABILITY, THE CONTENTION OF THE ASSESSEE THAT THE CASH DEPOSITS IN HIS BANK ACCOUNT CAME FROM THE SALE PROCEEDS OF FUEL 5 ITA NO. 72/CTK/2016 ASSESSMENT YEAR :2011 - 12 BUSINESS OF SMT. ANUPAMA JAGDEV HAS TO BE R EJECTED BEING HIGHLY IMPROBABLE. IN THE CIRCUMSTANCES AND ON FACTS OF THE CASE, THE ADDITION MADE BY THE AO OF RS.1 9,32,000/ - IS CONFIRMED. 6. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND L D DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS ON RECORD, I FIND NO SPECIFIC ERROR IN THE ORDER OF THE CIT(A) COULD BE POINTED BY THE LD AUTHORISED REPRESENTATI VE OF THE ASSESSEE DURING THE COURSE OF HEARING. NO AGREEMENT WITH SMT. ANUPAMA JAGDEV WAS PRODUCED FOR CONDUCTING THE BUSINESS OF PETROL PUMP I.E. M/S. BAJARANGI KISSAN SEVA KENDRA, SITUATED AT SARADHAPUR, BAKU. I FIND THAT THE ASSESSING OFFICER AFTER C ONSIDERING THE SUBMISSION OF THE ASSESSEE AND EXAMINING THE EVIDENCE AND CONSIDERING THE FACTS OF THE CASE HAS MADE THE ADDITION OF RS.19,32,000/ - AS UNEXPLAINED DEPOSIT IN THE BANK OF THE ASSESSEE. NO MATERIAL HAS BEEN BROUGHT ON RECORD TO CONTROVERT THE FINDINGS OF THE ASSESSING OFFICER AND THE CIT (A). HENCE, I FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL F ILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 07/03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 07/03 /2017 B.K.PARIDA, SPS 6 ITA NO. 72/CTK/2016 ASSESSMENT YEAR :2011 - 12 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : BHIKARI CHARAN MANGARAJ, AT/PO: BAKU, VIA: NIRAKHARPUR, PURI 2. THE RESPONDENT. ITO, KHURDA WARD, KHURDA 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT , - 1, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//