The DCITS.K.Circle, Himatnagar V. Shri Manojkumar Jayantilal Patel, Himatnagar

ITA 758/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60296 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-04-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 28-02-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.758/AHD/2008 ( ( ( ( ( / / / / ASSESSMENT YEAR : 2005-06) THE DEPUTY CIT SABARKANTHA CIRCLE HIMATNAGAR / VS. MANOJKUMAR JAYANTIAL PATEL B-3, HARIOM SOCIETY MAHAVIRNAGAR HIMATNAGAR DIST.SABARKANTHA ) #$ ./*+ ./ PAN/GIR NO. : AHKPP 3531 E ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / # / APPELLANT BY : SHRI SAMIR TEKRIWAL, SR.D.R. -.), 0 / # / RESPONDENT BY : -NONE- 1 0 '$ / / / / DATE OF HEARING : 23/04/12 23( 0 '$ / DATE OF PRONOUNCEMENT : 27/4/12 #4 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-X, AHMEDABAD DATED 11.12.2007 PASSED FOR A.Y. 2005-06 AND THE GROUNDS RAISED ARE AS FOLLOWS:- 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION IN RESPECT OF LOAN REPAYMENT OF RS.4,5 1,400/-. 2. THE LD.CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION IN RESPECT OF UNEXPLAINED CASH DEPOSIT S IN THE BANKS OF RS.25,50,000/-. ITA NO.758/AHD/ 2008 DY.CIT VS. MANOJKUMAR J.PTEL ASST.YEAR -2005-06 - 2 - 2. AT THE OUTSET, IT IS WORTH TO MENTION THAT IN TH E PAST WAY BACK IN THE YEAR 2010 ON NUMBER OF OCCASIONS SEVERAL NOTICES WE RE ISSUED THROUGH RP-AD AS WELL AS THROUGH REVENUE DEPARTMENT, BUT N O ONE HAS APPEARED ON BEHALF OF THE RESPONDENT-ASSESSEE. ONL Y ON 16.1.12, ASSESSEES COUNSEL SHRI S.N.DIVATIA APPEARED AND ON HIS REQUEST, THE CASE WAS ADJOURNED FOR 18/01/12, HOWEVER, THEREAFTE R AGAIN THIS APPEAL REMAINED UNREPRESENTED. TODAY, ON THE DATE OF HEA RING, I.E. ON 23.4.2012 AGAIN NO ONE HAS APPEARED. CONSIDERING T HE NON-COOPERATIVE CONDUCT OF THE RESPONDENT, WE HEREBY DECIDED TO PRO CEED EX-PARTE QUA THE ASSESSEE, AFTER HEARING LD.SR.DR MR. SAMIR TEKR IWAL. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 29/1 2/2006 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS SHOWING DIRECTOR S REMUNERATION AND AGRICULTURAL INCOME. IN RESPECT OF THE ABOVE TWO GROUNDS, IT WAS NOTED BY THE ASSESSING OFFICER THAT THERE WAS A LIABILITY OF RS.8,64,400/- AS ON 01/04/2004, HOWEVER, AT THE END OF THE FINANCIAL YE AR, I.E. AS ON 31.03.2005, THE LIABILITY HAS REDUCED TO RS.4,13,00 0/-. MEANING THEREBY, AS PER ASSESSING OFFICER, DURING THE YEAR UNDER CON SIDERATION, THE ASSESSEE HAD REPAID A SUM OF RS.4,51,400/-. IN THE ABSENCE OF PROOF OF REPAYMENT, AS ALSO THE SOURCE OF THE REPAYMENT, THE ASSESSING OFFICER HAS TAXED THE IMPUGNED REPAYMENT OF LOAN OF RS.4,51,400 /- IN THE HANDS OF THE ASSESSEE. ITA NO.758/AHD/ 2008 DY.CIT VS. MANOJKUMAR J.PTEL ASST.YEAR -2005-06 - 3 - 4. LIKEWISE, THERE WERE CERTAIN DEPOSITS IN THE BAN KS WHICH REMAINED UNSUBSTANTIATED, THEREFORE THE ASSESSING OFFICER HA S ASSESSED THE SAME IN ASSESSEES HAND AS FOLLOWS:- 5.3. REPLY OF THE ASSESSEE CONSIDERED. ASSESSEE H AD DEPOSITED CASH OF RS.10,00,000/- ON 29/11/2004 AND RS.12,50,000/- ON 8/12/2004, IN BANK OF BARODA. ASSESSEE HAD RECEIVED CHEQUE OF RS.20,0 0,000/- FROM AMRAPALI BUILDERS (I) LTD IN THE MONTH OF SEPTEMBER , 2004 DEPOSITED ON 24/9/2004 IN ORIENTAL BANK OF COMMERCE BY TRANSFER ENTRY. ON 25/9/2004, ASSESSEE HAS SELF WITHDRAWAL OF RS.20,00 ,000/- ON SAME DAY. ASSESSEES EXPLANATION CANNOT BE BELIEVED AS NO BUS INESSMAN WILL KEEP THE HUGE AMOUNT IN HIS RESIDENCE. THERE WAS A GAP OF 2 MONTHS OF WITHDRAWAL OF RS.20 LACS. ASSESSEE HAD DEPOSITED R S.22,50,000/- IN CASH IN BANKS. ASSESSEE HAD SHOWN WITHDRAWAL OF RS .20,00,000/- ON 25/09/2004 WHILE ASSESSEE HAD DEPOSITED OF RS.10,00 ,000/- AND RS.12,50,000/- BY CASH ON 29/11/2004 AND 08/12/2004 . SOURCE OF RS.2,50,000/- ARE UNEXPLAINED. ASSESSEE HAVE WITHD RAWAL OF ONLY RS.20,00,000/- WHILE CASH DEPOSIT HAS RS.22,50,000/ - SO ASSESSEE HAD DEPOSITED RS.22,25,000/- IN CASH OTHER THAN OF RS.2 0,00,000/- CASH WITHDRAWAL. ASSESSEE MIGHT HAVE USED THE WITHDRAWA L IN OTHER ACTIVITIES. SOURCE OF CASH DEPOSIT OF RS.22,50,000 /- ARE NOT EXPLAINED BY THE ASSESSEE AND HENCE RS.22,50,000/- IS ADDED TO T HE TOTAL INCOME AS UNEXPLAINED INVESTMENT. 5.4. .. 5.5. ASSESSEE REPLIED VIDE LETTER DTD. 28/12/2006 VIDE PARA.5 THAT OUT OF CASH WITHDRAWAL FROM THE BANK ACCOUNTS AND OUT O F CASH ON HAND. REPLY OF THE ASSESSEE IS CONSIDERED. ON VERIFICATI ON OF BANK STATEMENT OF ORIENTAL BANK OF COMMERCE, ASSESSEE HAD SHOWN CA SH WITHDRAWAL OF RS.1,70,000/- ON 13/4/2004 WHILE DEPOSITED IN THE M ONTH OF SEPTEMBER ON 25/9/2004. ASSESSEE HAD WITHDRAWAL RS.20,00,000 /- ON SOME DAY ASSESSEE HAD DEPOSITED CASH OF RS.3,00,000/- INSTEA D OF DEPOSITED RS.3,00,000/-. ASSESSEE COULD WITHDRAWAL TO THE EX TENT OF RS.17,00,000/- AFTER LAPSE OF ONLY 2 DAYS ASSESSEE HAD WITHDRAWAL RS.3,00,000/-. ASSESSEE COULD NOT EXPLAIN THE SOUR CE OF CASH DEPOSITED OF RS.3,00,000/- AFTER A LAPSE OF 5 MONTHS. AS ON 31/3/2004, THERE WAS CASH ON HAND OF RS.2,72,855/-. ASSESSEE COULD DEPO SIT FROM THE CASH IN HAND IN EARLIER PART OF THE YEAR INSTEAD OF DEPOSIT ING CASH IN BANK. ASSESSEE HAD KEPT MONEY AT HIS RESIDENCE. ASSESSEE COULD NOT EXPLAIN ITA NO.758/AHD/ 2008 DY.CIT VS. MANOJKUMAR J.PTEL ASST.YEAR -2005-06 - 4 - THE SOURCES OF CASH DEPOSITED IN BANKS, SATISFACTOR ILY. HENCE RS.3,00,000/- IS ADDED AS UNEXPLAINED INVESTMENT TO THE TOTAL INCOME. ISSUE PENALTY NOTICE U/S.271(1)(C) OF THE ACT FOR F URNISHING INACCURATE PARTICULARS OF INCOME. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, LD.CIT(A) HAS TAKEN A VIEW THAT THE REPAYMENT OF LO AN OF RS.4,51,400/- WAS TO BE SET OFF AGAINST THE CASH CREDITS ADDITION IN THE HANDS OF THE ASSESSEE. THERE WAS AN ADDITION U/S.68 OF THE I.T. ACT OF RS.5 LACS IN RESPECT OF AN UNEXPLAINED CREDIT IN THE NAME OF AMR APALI DEVELOPERS WHICH WAS DIRECTED BY LD.CIT(A) TO BE ADJUSTED AGAI NST THE IMPUGNED REPAYMENT OF LOAN AMOUNT. IN RESPECT OF THE OTHER ADDITION, RELIEF WAS GRANTED BY LD.CIT(A) AS FOLLOWS:- 10. I HAVE CONSIDERED THE SUBMISSIONS MADE I HAVE ALSO GONE THROUGH THE BANK STATEMENT AND CASH BOOK OF THE ASS ESSEE. IT IS NOTICED THAT AMOUNT OF RS.20,00,000/- WAS WITHDRAWN FROM ORIENTAL BANK OF COMMERCE ON 25/9/04 WHICH WAS ON A CCOUNT OF LOAN RECEIVED FROM AMRAPALI DEVELOPERS AND A FURTHE R AMOUNT OF RS.2,50,000/- WAS WITHDRAWN ON 1.10.2004 AND THE SA ME AMOUNT WAS ENTERED IN THE CASH BOOK AND WAS DEPOSITED WITH BANK OF BARODA ON 29.11.2004 AND 8/12/04. THE ADDITION HAS BEEN MADE MAINLY FOR THE REASON THAT ASSESSEE MIGHT HAVE USED THE WITHDRAWAL IN OTHER ACTIVITIES. SUCH A REASONING D OES NOT APPEAR TO BE JUSTIFIABLE BECAUSE THE DIFFERENCE IS HARDLY OF TWO MONTHS AND THE WITHDRAWAL HAD BEEN NOTED IN THE CASH BOOK. TH E OTHER ADDITION IS AGAIN OF DEPOSIT OF RS.3 LAKHS IN BANK ACCOUNT WITH ORIENTAL BANK OF COMMERCE. IT IS SEEN FROM THE CAS H BOOK THAT THE SAME DEPOSIT IS REGULARLY MENTIONED IN THE CASH BOO K AND IS OUT OF REGULAR CASH BALANCE. APART FROM THAT IT IS SEEN T HAT ADDITION OF RS.5 LAKHS U/S.68 AND ADDITION OF RS.1,95,375/- OUT OF CAPITAL ACCOUNT HAS NOT BEEN CHALLENGED. OUT OF THIS, AS S ET OFF OF ONLY RS.4,51,400/- HAS BEEN GIVEN. THUS, THE ASSESSEE I S EVEN OTHERWISE ABLE TO SUBSTANTIATE DEPOSIT WORTH RS.2,50,000/- WH ICH CAN BE SAID TO BE OUT OF THESE TWO ITEMS AND THE BALANCE IS OUT OF NORMAL CASH BALANCE. HOWEVER, THIS IS ONLY AN ALTERNATIVE PLEA BUT BASICALLY ITA NO.758/AHD/ 2008 DY.CIT VS. MANOJKUMAR J.PTEL ASST.YEAR -2005-06 - 5 - THE DEPOSIT IS CLEARLY NOTED IN THE CASH BOOK AND I S OUT OF NORMAL CASH IN HAND AND VARIOUS WITHDRAWALS. TO SUP UP, A DDITION OF RS.25,50,000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS I N BANK ACCOUNT IS DELETED. 6. THE LD.SR.DR MR.SAMIR TEKRIWAL HAS STATED THAT T HE LEARNED CIT(APPEALS) HAS EXAMINED CERTAIN NEW EVIDENCES AS ALSO THE CASH BOOK OF THE ASSESSEE WHICH WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. ACCORDING TO LD.SR.DR, THE LEARNED CIT(APPEALS) HAS NOT CALLED FOR ANY REMAND REPORT OR GRANTED ANY OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER AND AT THE BACK OF THE REVENUE DEPARTMENT C ERTAIN NEW EVIDENCES WERE ENTERTAINED BY LD.CIT(A). HE HAS THEREFORE PL EADED THAT THE MATTER DESERVES TO BE RESTORED BACK TO THE FILE OF THE ASS ESSING OFFICER WITH THE DIRECTION TO INVESTIGATE ALL THOSE EVIDENCES AND DE CIDE ACCORDINGLY AS PER LAW. 7. HAVING HERD THE SUBMISSIONS OF THE LD.SR.DR, WE ARE OF THE CONSIDERED VIEW THAT THERE WAS INFRINGEMENT OF PROV ISIONS OF RULE 46A OF THE I.T.ACT ON THE PART OF THE LEARNED CIT(APPEALS) . THE FACTUAL POSITION AS EMERGED FROM THE ASSESSMENT ORDER IS THAT THE AS SESSEE HAS AVOIDED TO PLACE THE COMPLETE RECORD AND THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. HAD THE ASSESSEE BEEN ABLE TO PRODUCE THE CASH BOOK THEN THE IMPUGNED AMOUNT WOULD NOT HAVE BEEN MADE BY THE ASS ESSING OFFICER AT THE STAGE OF THE ASSESSMENT ITSELF. NOW THE LEARNE D CIT(APPEALS) HAS ENTERTAINED THE CASH BOOK AND GRANTED RELIEF, THERE FORE IN THE FITNESS OF THE CIRCUMSTANCES, IT IS JUSTIFIABLE TO RESTORE THIS IS SUE BACK TO THE STAGE OF THE ASSESSING OFFICER, SO THAT AFTER NECESSARY INVESTIG ATION THE IMPUGNED ITA NO.758/AHD/ 2008 DY.CIT VS. MANOJKUMAR J.PTEL ASST.YEAR -2005-06 - 6 - ADDITIONS CAN BE RECONSIDERED. BEFORE WE CONCLUDE IT IS ALSO WORTH TO MENTION THAT FROM THE SIDE OF THE REVENUE A PAPER-B OOK HAS BEEN FURNISHED CONTAINING CERTAIN NOTICES ISSUED BY THE REVENUE DEPARTMENT TO THIS ASSESSEE. IT APPEARS THAT THOSE SHOW CAUSE NO TICES HAVE ALSO NOT BEEN ANSWERED PROPERLY. AS AGAINST THAT, THE LEARNED CI T(APPEALS) HAS REFERRED CERTAIN BANK STATEMENTS AND CASH BOOK OF T HE ASSESSEE AND ON THAT BASIS ALLOWED THE RELIEF TO THE ASSESSEE. BUT THE FACT REMAINED UNCONTROVERTED THAT THE REVENUE DEPARTMENT WAS NOT GRANTED OPPORTUNITY FOR CROSS-EXAMINATION. THEREFORE, FOR BOTH THE GRO UNDS, SINCE CERTAIN NEW EVIDENCES HAVE BEEN CONSIDERED BY LEARNED CIT(APPEA LS) WHICH WERE NOT BEFORE THE ASSESSING OFFICER AND, THEREFORE, WE HEREBY RESTORE THESE TWO GROUNDS FOR DE NOVO ADJUDICATION AS PER LAW BY THE ASSESSING OFFICER. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS T REATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. SD/- SD/- ( !' ) ( ) #$ ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27 / 04 /2012 5'.., .../ T.C. NAIR, SR. PS ITA NO.758/AHD/ 2008 DY.CIT VS. MANOJKUMAR J.PTEL ASST.YEAR -2005-06 - 7 - #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-X, AHMEDABAD 5. 6;< - , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. <= >1 / GUARD FILE. #4 #4 #4 #4 / BY ORDER, .6 - //TRUE COPY// ? ?? ?/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..23.4.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.4.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S27.4.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.4.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER