Somesh N. Kshirsagar, Solapur V. Pr. Commissioner of Income-tax, -6, Pune

ITA 729/PUN/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6004 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 20-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KISHOR
• Keywords: Reopening of assessment; Opportunity of being heard; Assessment record; Set aside
• Section: 143(3); 44AB; 13; 148; 263; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO S.727, 728 & 729 /PUN/201 8 / ASSESSMENT YEAR S : 20 10 - 11, 2011 - 12 & 2012 - 13 MR. SOMESH N. KSHIRSAGAR, KSHIRSAGAR NIWAS, PUNE HIGHWAY, MOHOL, SOLAPUR 413213 PAN : AMJPK7597H ....... / APPELLANT / V/S. PR. COMMISSIONER OF INCOME TAX, PUNE 6, PUNE / RESPONDENT ASSESSEE BY : SHRI PRATIK SANDBHOR REVENUE BY : SHRI B. KISHOR / DATE OF HEARING : 1 2 - 02 - 2020 / DATE OF PRONOUNCEMENT : 12 - 0 2 - 20 20 / ORDER PER GEORGE MATHAN, JM : THESE THREE APPEALS FILED BY THE ASSESSEE MR. SOMESH N. KSHIRSAGAR AGAINST THE ORDER S OF THE LD. PR. COMMISSIONER OF INCOME TAX - 6, PUNE PASSED U/S. 263 OF THE ACT DATED 20 - 03 - 2018 FOR THE ASSESSMENT YEARS 2010 - 11, 2011 - 12 AND 2012 - 13. 2 ITA NOS. 727 TO 729/PUN/2018, A.YS. 2010 - 11 TO 2012 - 13 2. AS THE ISSUE IN ALL THE THREE APPEALS ARE IDENTICAL, ALL THE THREE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. 3. SHRI PRATIK SANDBHOR REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI B. KISHOR REPRESENTED ON BEHALF OF THE REVENUE. 4. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE IS AN INDIVIDUAL AND HE WAS NOT FILING RETURN OF INCOME. IT WAS THE SUBMISSION THAT ON THE BASIS OF INFORMATION UNDER NON - FILER MONITORING SCHEME RECEIVED BY THE DEPARTMENT REGARDING CASH DEPOSIT IN BANK ACCOUNT , THE ASSESSING AUTHORITY ON THE BASIS OF INFORMATION AVAILABLE ISSUED NOTICE U/S. 148 OF THE ACT ON 03 - 03 - 2015. IT WAS THE SUBMISSION THAT THE RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U/S. 148 CAME BE FILED ON 26 - 05 - 2015 FOR ALL THE THREE ASSESSMENT YEARS. THE REASONS FOR THE REOPENING OF ASSESSMENT WAS THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF SUBSTANTIAL AMOUNTS BEING RS.14,80,000/ - FOR THE ASSESSMENT YEAR 2010 - 11, RS.21,28,600/ - FOR THE ASSESSMENT YEAR 2011 - 12 AND RS.75,64,000/ - FOR THE ASSESSMENT YEAR 2012 - 13 WITH SOLAPUR JANATA SAHAKARI BANK LTD., MOHOL BRANCH. THE AO HAD IN THE COURSE OF REOPENED ASSESSMENT QUESTIONED THE ASSESSEE WITH REGARD TO THE CASH DEPOSITS AND THE ASSESSEE HAD CATEGORICALLY STATED AND CONFIRMED THAT THE ASSESSEE WAS DERIVING INCOME FROM S ALARY FROM THE ASSESSEE FATHERS WHOLESALE AND RETAIL BUSINESS OF COUNTRY LIQUOR SHOP NAMELY SANJAY TRADERS AND N D KALAL COUNTRY LIQUOR SHOP. THE ASSESSEE HAD SPECIFICALLY MENTIONED THAT THE ASSESSEES FATHER WAS PHYSICALLY NOT SOUND TO LOOK AFTER THE EN TIRE BUSINESS ACTIVITIES AND THE ASSESSEE IS LOOKING AFTER FINANCIAL AND BUSINESS RELATED ACTIVITIES OF HIS FATHER AND THAT THE ASSESSEE S BANK ACCOUNT IS USED SOME TIMES FOR SUCH ACTIVITIES AND THE 3 ITA NOS. 727 TO 729/PUN/2018, A.YS. 2010 - 11 TO 2012 - 13 CASH DEPOSITS WERE MADE OUT OF BUSINESS TRANSACTIONS OF F ATHERS BUSINESS. IT WAS THE SUBMISSION THAT IN THE COURSE OF ASSESSMENT, THE BOOKS OF ACCOUNTS, DOCUMENTS AND BILLS IN RESPECT OF ASSESSEE FATHERS BUSINESS HAD BEEN PRODUCED AND IT WAS OBSERVED BY THE AO THAT THE ACCOUNTS OF ASSESSEE FATHERS BUSINESS W AS LIABLE FOR AUDIT U/S. 44AB OF THE ACT AND AUDIT REPORT WAS OBTAINED AND PLACED ON RECORDS. THE BOOKS OF ACCOUNTS, DOCUMENTS AND BANK STATEMENTS, PRODUCED HAD ALSO BEEN EXAMINED ON TEST CHECK BASIS. IT WAS THE SUBMISSION THAT AFTER EXAMINATION IT WAS F OUND THAT NO ADDITION ON ACCOUNT OF CASH DEPOSITS WITH SOLAPUR JANATA SAHAKARI BANK LTD., MOHOL BRANCH IN THE ASSESSEE BANK ACCOUNTS WAS REQUIRED TO BE ADDED AND NO ADDITION ON THAT COUNT WAS MADE. IT WAS THE SUBMISSION THAT HOWEVER CERTAIN ADDITION HAS B EEN MADE REPRESENTING THE AGRICULTURAL INCOME AS DISCLOSED BY THE ASSESSEE. IT WAS SUBMISSION THAT THE REOPENED THE ASSESSMENT CAME TO BE COMPLETED U/S. 143(3) R.W.S. 147 OF THE ACT ON 21 - 03 - 2016. IT WAS SUBMISSION THAT SUBSEQUENTLY A SHOW CAUSE - NOTICE C AME TO BE ISSUED U/S. 263 OF THE ACT ON 13 - 03 - 2018 ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE ORDER DATED 21 - 03 - 2016 FOR EACH OF THE ASSESSMENT YEAR SHOULD NOT BE REVISED BY INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. THE ASSESSEE WAS ASKED TO RE SPOND BY 20 - 03 - 2018. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE HAD RESPONDED VIDE LETTER DATED 20 - 03 - 2018 WHICH HAS BEEN EXTRACTED BY THE LD. PR. CIT IN PARA 3 OF HIS ORDER. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT IT WAS VERY SPECIFICALLY BROU GHT TO THE ATTENTION OF THE PR. CIT THAT THE ISSUES HAVE ALREADY BEEN EXAMINED IN DETAILED IN THE COURSE OF ORIGINAL ASSESSMENT PASSED U/S. 143(3) R.W.S. 147 OF THE ACT. THE SAID ACCOUNT WAS ALSO VERIFIED AT THE TIME OF ASSESSMENT. IT WAS THE SUBMISSION THAT AS C E RTAIN DISCREPANCIES HAVE BEEN NOTICED THE ASSESSEES FATHER HAD ALSO MADE 4 ITA NOS. 727 TO 729/PUN/2018, A.YS. 2010 - 11 TO 2012 - 13 DECLARATION OF CLOSING BANK BALANCES UNDER INCOME DECLARATION SCHEME IN RESPECT OF SAID BANK ACCOUNT AND IN THE SAID IDS DECLARATION 2016 IT WAS SPECIFICALLY MENTIONED THAT THE BANK ACCOUNT IN THE NAME OF ASSESSEE AT SOLAPUR JANATA SAHAKARI BANK LTD., MOHOL DIST. SOLAPUR BELONGED TO THE BUSINESS OF THE ASSESSEES FATHER AND THE ENTRIES IN THE SAID ACCOUNT WERE RECORDED IN THE ACCOUNTS OF THE ASSESSEES FATHER BUT CLOSING BAL ANCE OF ABOVE ACCOUNT WAS NOT SHOWN IN THE BALANCE SHEET OF ASSESSEES FATHER AND CONSEQUENTLY THE DISCLOSURE WAS BEING MADE TO CORRECT THE BALANCE SHEET POSITION OF ASSESSEES FATHER FOR THE ASSESSMENT YEARS 2010 - 11 TO 2013 - 14. IT WAS SUBMISSION THAT IN PARA 4 OF THE ORDER OF LD. PR. CIT HAD SPECIFICALLY RECORDED THAT THE CONTENTION OF THE ASSESSEE WAS THEREAFTER ACCEPTED BY THE AO. IT WAS THE SUBMISSION THAT THE LD. PR. CIT DID NOT CONSIDER THE EXPLANATIONS OF ASSESSEE AND ON PRESUMPTIONS HAS HELD THA T THE ASSESSMENT ORDERS DATED 21 - 03 - 2016 PASSED FOR ALL THE THREE ASSESSMENT YEARS WERE LIABLE TO BE SET ASIDE FOR REDOING THE SAME AFRESH. IT WAS THE SUBMISSION THAT THE ASSESSMENT ORDERS FOR ALL THE THREE ASSESSMENT YEARS PASSED ON 21 - 03 - 2016 WERE NOT E RRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE AND THE SAME WERE ALSO PASSED AFTER EXAMINING AND CONSIDERING THE EXPLANATIONS OF ASSESSEE IN RESPECT OF CASH DEPOSITS IN THE BANK ACCOUNT AND AN OPINION HAS BEEN FORMED BY THE AO IN RESPECT OF THE SAID CA SH DEPOSITS WITH COMPLETING THE ORIGINAL ASSESSMENT . CONSEQUENTLY, REVISION U/S. 263 OF THE ACT WAS NOT PERMISSIBLE. 5. IN REPLY, THE LD. DR SUBMITTED THAT THE PROVISIONS OF SUB - CLAUSE (A) OF THE SECOND EXPLANATION TO SECTION 263 APPLY. IT WAS THE SUBMISSION THAT THE ASSESSMENT ORDERS FOR ALL THE THREE ASSESSMENT YEARS HAVE BEEN PASSED ON 21 - 03 - 2016 PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATIONS WHICH 5 ITA NOS. 727 TO 729/PUN/2018, A.YS. 2010 - 11 TO 2012 - 13 SHOULD HAVE BEEN MADE. IT WAS THE SUBMISSION THAT THE FACT THAT AFTER THE ASSESSMENT THE ASSESSE ES FATHER HAS FILED THE IDS 2016 DISCLOSING THE CLOSING BALANCES IN THE SAID BANK ACCOUNTS CLEARLY SHOWS THAT THE AO HAS NOT DONE PROPER ENQUIRY IN RESPECT OF THE SAID CASH DEPOSITS. IT WAS THE SUBMISSION THAT THE LD. PR. CIT HAD RIGHTLY INVOKED HIS POWE R U/S. 263 TO SET ASIDE THE SAID ASSESSMENT ORDERS FOR ALL THE THREE ASSESSMENT YEARS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FOR THE PURPOSE OF BREVITY THE FINDINGS OF LD. PR. CIT IN PARAS 4 AND 5 OF HIS ORDER ARE EXTRACTED HERE - IN - BELOW : 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE ASSESSEE ON 20/03/2018. AS PER THE INFORMATION AVAILABLE ON RECORD, DURING THE YEAR UNDER CONSIDERATION TOTAL CASH DEPOSITS OF RS.14,80,000/ - WAS MADE BY THE ASSESSEE IN HIS SAVINGS BANK ACCOUNT NO.GLC 51/3065 MAINTAINED IN THE SOLAPUR JANATA SAHAKARI BANK LTD., MOHOL BRANCH. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF SAID CASH DEPOSITS. IT WAS EXPLAINED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT THAT, THE ACCOUNT WAS USED BY HIS FATHER FOR HI S BUSINESS NAMELY SANJAY TRADERS, MOHOL AND N. D. KSHIRSAGAR COUNTRY LIQUOR SHOP, TEMBHURNI, DUE TO HIS OLD AGE AND CASH DEPOSITS IN THE SAID ACCOUNT ARE MADE OUT OF BUSINESS TRANSACTIONS OF HIS FATHER'S BUSINESS. AS MENTIONED IN THE ASSESSMENT ORDER, THE BOOKS OF ACCOUNT OF THE FATHER'S BUSINESS WAS EXAMINED BY THE AO ON TEST CHECK BASIS. THE AO ALSO OBTAINED LEDGER EXTRACT OF THE SAID ACCOUNT IN THE BOOKS OF SANJAY TRADERS AND AUDIT REPORT IN FORM 3CB/CD OF THE BUSINESS OF ASSESSEE'S FATHER AND PLACED TH E SAME ON RECORD. THE CONTENTION OF THE ASSESSEE WAS THEREAFTER ACCEPTED BY THE ASSESSING OFFICER. ON SUBSEQUENT REVIEW OF THE ASSESSMENT RECORDS, IT WAS REVEALED THAT, NEITHER THE SAID BANK ACCOUNT (GLC 51 /306 5 ) NOR THE AMOUNT IS APPEARING IN THE BALANCE S HEET OF ANY BUSINESS FIRM OF HIS FATHER. AS CLAIMED BY THE ASSESSEE, IF THE AMOUNT WAS PAID OUT OF THE BUSINESS ACTIVITIES OF THE FIRM BELONGS TO HIS FATHER, THE SAME SHOULD HAVE BEEN REFLECTED IN THE ASSET SIDE OF BALANCE SHEET OF THE SAID FIRM. AS STATED EARLIER, THE ACCOUNT OR THE AMOUNT IS NOT REFLECTED IN THE BALANCE SHEET OF HIS FATHER, WHICH CLEARLY INDICATES THE TRANSACTIONS IN THE SAID BANK ACCOUNT WAS NOT CONSIDERED BY ASSESSEE'S FATHER WHILE FINALIZING HIS BOOKS OF ACCOUNT. THE CONTENTION OF THE ASSESSEE WAS THEREFORE FOUND TO BE INCORRECT. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT HAS TOTALLY IGNORED THIS ASPECT AND ACCEPTED THE ASSESSEE'S CONTENTION WITHOUT PROPER VERIFICATION OF DOCUMENTS / BOOKS OF ACCOUNTS AND WITHOUT APPLICATION OF MIND. THE PROVISIONS OF SEC.263 OF THE ACT WAS THEREFORE INVOKED TO REVISE THE ASSESSMENT ORDER FOR THE YEAR UNDER CONSIDERATION BY ISSUE OF A NOTICE DATED 22/02/2018 . IN RESPONSE TO WHICH, THE ASSESSEE VIDE HIS LETTER DATED 20/03/2018 INFORMED THAT, T HOUGH THE ACCOUNT IS IN THE NAME OF SHRI SOMESH NAGANATH KSH I RSUGAR, THE SAME BELONGS TO THE BUSINESS OF HIS FATHER SHRI NAGNATH DATTATRAYA KSHIRASUGNR. HE ALSO CONTENDED THAT, THE ENTRIES IN THIS SAVINGS ACCOUNT