J.Nageswar Rao, Berhampur V. ITO, Berhampur

ITA 76/CTK/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7565 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P K MISHRA
• Keywords: Business income; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.76 /CTK/2015 ASSESSMENT YEAR : 2009 - 2010 SHRI J.NAGESWAR ROA, PROP. MURTY WINES, OLD BUS STAND, BERHAMPUR VS. ITO, WARD - 2, BERHAMPUR CIRCLE, BERHAMPUR. PAN/GIR NO. ADPOR 3673 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.MISHRA, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 10 /11 / 2016 DATE OF PRONOUNCEMENT : 10 /11 / 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - BERHAMPUR , DATED 15.5.2014 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE APPEAL IS TIME BARRED BY 177 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION SUPPORTED BY AFFIDAVIT FOR CONDONING THE DELAY IN FILING TH E APPEAL. AFTER GOING THROUGH THE CONDONATION PETITION, I FIND THAT THE ASSESSEE HAD REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN THE STIPULATED TIME. LD D.R. DID NOT HAVE ANY OBJECTION FOR CONDONING THE DELAY. I, 2 ITA NO.76 /CTK/2015 ASSESSMENT YEAR :2009 - 2010 THEREFORE, CONDONE THE DELAY OF 17 7 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND ADMIT THE APPEAL FOR HEARING. 3. THE SOLE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN TREATING THE DEPOSIT OF RS.32,47,530/ - IN ICICI BANK AS UNEXPLAINED BUSINESS RECEIPTS AND ESTIMATING THE INCOME THEREON. 4 . I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEPOSITED TOTAL AMOUNT OF RS.59,98,490/ - IN HIS SAVING BANK A/C NO S . 027001001590 AND 0270011508917 IN ICICI BANK, BERHAMPUR. AS THE ASSESSEE HAS NOT DISCLOSED THESE BANK ACCOUNTS IN THE RETURN OF INCOME, THE ASSESSING OFFICER TREATED THE TOTAL DEPOSITS OF RS.59,98,490/ - AS THE GROSS SALES AND ESTIMATED THE INCOME THEREFROM @ 5.09% AND MADE AN ADDITION OF RS.3,05,323/ - TO THE INCOME OF THE ASSESSEE. 5 . ON APPEAL, LD CIT(A) OBSERVED THAT FROM THE REMAND REPORT OBTAINED FROM THE ASSESSING OFFICER, IT IS CLEAR THAT SOME DEPOSITS WERE MADE IN THE BANK ACCOUNT OF THE ASS ESSEE ON BEHALF OTHER TRADERS FOR GETTING DEMAND DRAFT S IN FAVOUR OF ORISSA STATE BEVERAGE CORPORATION (OSBC). THE ASSESSING OFFICER HAS VERIFIED RECEIPT BOOK OF OSBC AND THE DDS AND FOUND THAT THE ASSESSEES CONTENTION IS ACCEPTABLE IN RESPECT OF DEPOS IT OF RS.27,50,960/ - . THE ASSESSING OFFICER HAS MENTIONED THAT BALANCE DEPOSIT 3 ITA NO.76 /CTK/2015 ASSESSMENT YEAR :2009 - 2010 OF RS.32,47,530/ - REMAINS UNEXPLAINED. THEREFORE, THE LD CIT(A ) TREATED RS.32,47,530/ - AS UNEX PLAINED SALES AND ESTIMATED THEREON @ 5.09% AND SUSTAINED THE ADDITION OF R S.1,65 ,299/ - AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS.1,40,024/ - . FURTHER, THE LD CIT(A) ALSO OBSERVED THAT THE CLOSING BALANCE OF RS.9,05,573/ - IN THE SAID ACCOUNT WAS OUT OF DEPOSITS WHICH EITHER DID NOT BELONG TO THE ASSESSEE OR ARE OUT OF UNDISCLOS ED SALES WHICH HAVE BEEN BROUGHT TO TAX AND, ACCORDINGLY, DELETED THE SAME. 6 . BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEES ONLY SOURCE OF INCOME IS FROM SALE OF LIQUOR. HE SUBMITTED THAT THE DEPOSIT IN ICICI BANK WAS OUT OF SALES PROC EEDS OF THE ASSESSEE AND ALSO DEPOSITS FROM OTHER TRADERS FOR THE PURPOSES OF MAKING DDS AS THE EXC HANGE RATE CHARGED FOR PURCHASE OF D D S WAS MUCH LOWER IN ICICI BANK COMPARED TO OTHER BANKS. HE SUBMITTED THAT THE ASSESSING OFFICER HIMSELF HAS ACCEPTED T HAT OUT O F TOTAL DEPOSITS OF RS.59,98,490 / - , RS.27,50,960/ - WAS DEPOSITS MADE BY OTHER TRADERS FOR PURCHASE OF DDS. HE FURTHER OBSERVED THAT THE LD CIT(A) HAS ALSO GIVEN A FINDING THAT RS.9,05,573/ - AS CLOSING BALANCE IN THE SAID BANK ACCOUNT WAS OUT OF D EPOSITS BELONGING TO OTHER PERSONS AND HAS DELETED THE SAME. HE SUBMITTED THAT THE BALANCE DEPOSIT OF RS.32,47,530/ - IS OUT OF CASH SALES OF THE ASSESSEE AND IS DULY REFLECTED IN THE CASH BOOK OF THE ASSESSEE. THEREFORE, THE SOURCE OF DEPOSIT BEING SALE PROCEEDS OF LIQUOR OF THE ASSESSEE IS PROVED. IT IS ALSO NOT IN DISPUTE THAT THE ENTIRE DEPOSITS OF 4 ITA NO.76 /CTK/2015 ASSESSMENT YEAR :2009 - 2010 RS.32,47,530/ - WERE UTILIZED FOR THE PURPOSES OF PURCHASING DDS AS THE COMMISSION CHARGED BY ICICI BANK WAS MUCH LOWER COMPARED TO OTHER BANKS. THEREFORE , IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, NO ADDITION IS CALLED FOR. 7 . ON THE OTHER HAND, LD D.R. DID NOT MAKE ANY SERIOUS ARGUMENTS ON THE ABOVE SUBMISSIONS OF LD AR OF THE ASSESSEE. 8 . IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, I FIND T HAT THE ASSESSING OFFICER HAS HIMSELF ACCEPTED THAT RS.27,50,960/ - DEPOSITED IN ICICI BANK WAS DEPOSITS OF OTHER PERSONS FOR PURCHASE OF DDS. LD CI T (A) HAS ALSO GIVEN A FINDING OF FACT THAT RS.9,05,573/ - BEING THE CLOSING BALANCE IN THE SAID ACCOUNT ALSO THE DEPOSITS OF OTHER PERSONS AND THE MONEY DID NOT BELONG TO THE ASSESSEE AND HAS DELETED THE ADDITION. I FIND THAT FROM THE COPY OF THE CASH BOOK FILED THAT RS.32,47,530/ - WAS DEPOSITED OUT OF SALE PROCEEDS OF LIQUOR OF THE ASSESSEE OVER A PERIOD OF TIM E, WHICH WAS UTILSIED FOR PURCHASE OF DDS IN FAVOUR OF O S B C. THUS, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, NO ADDITION ON ACCOUNT OF INCOME CONSIDERING RS.32,47,539/ - AS UNEXPLAINED SALES PROCEEDS OF THE ASSESSEE IS WARRANTED. I, THEREFORE, DEL ETE THE ADDITION OF RS.1,65,299/ - AND ALLOW THE GROUND S OF APPEAL OF THE ASSESSEE. 5 ITA NO.76 /CTK/2015 ASSESSMENT YEAR :2009 - 2010 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 10 /11 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 10 /11 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : SHRI J.NAGESWAR ROA, PROP. MURTY WINES, OLD BUS STAND, BERHAMPUR 2. THE RESPONDENT. ITO, WARD - 2, BERHAMPUR CIRCLE, BERHAMPUR 3. THE CIT(A) , BERHAMPUR 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//