Income Tax Officer-4(4), Lucknow V. Shri Sanjeev Kumar Singh, Lucknow

ITA 769/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4388 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay
• Section: 44AD; 80C; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.769/LKW/2015 ASSESSMENT YEAR 2011-12 SHRI SANJEEV KUMAR SINGH, 1669,UTRATHIYA, RAIBAIRELLY ROAD, LUCKNOW PAN BOEPS 3720 Q VS INCOME TAX OFFICER 4(4), 5, ASHOK MARG, LUCKNOW-226001 CO NO. 04/LKW/2016 [IN ITA NO.769/LKW/2015] ASSESSMENT YEAR 2011-12 INCOME TAX OFFICER 4(4), 5, ASHOK MARG, LUCKNOW-226001 VS SHRI SANJEEV KUMAR SINGH, 1669, UTRATHIYA, RAIBAIRELLY ROAD, LUCKNOW PAN BOEPS 3720 Q (RESPONDENT) (APPELLANT) SHRI A.K. SINGH,CIT DR APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY 27 /0 4 /2015 DATE OF HEARING 26/07/2016 DATE OF PRONOUNCEMENT O R D E R PER MAHAVIR PRASAD, JM. THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS O BJECTION IS FILED BY THE ASSESSEE. SINCE, THE APPEAL AND THE CO WERE HEARD 2 TOGETHER, THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER. 2. DURING THE COURSE OF HEARING, OUR ATTENTION WAS INVITED TO THE FACT THAT THE CROSS OBJECTION WAS FILED LATE BY 34 DAYS FOR WHICH PETITION FOR CONDONATION OF DELAY IS FILED. 3. HAVING CAREFULLY PERUSED THE SAME, WE FIND THERE IS VALID REASON TO CONDONE THE DELAY. WE ACCORDINGLY, CONDONE THE D ELAY AND ADMIT IT FOR HEARING. ITA NO.769/LKW/2015 4. THIS APPEAL IS PREFERRED BY THE REVENUE ON THE F OLLOWING GROUND: 1. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.49,62,150/- ON ACCOUNT OF UNEXPLAINED CASH DEPOS IT IN THE BANK ACCOUNT IGNORING THE FACT THAT THE ASSE SSEE DID NOT PRODUCE ANY SUBSTANTIAL EVIDENCE IN SUPPORT OF THE CREDITWORTHINESS/GENUINENESS OF DEPOSITS SO MAD E. 5. THE BRIEF FACTS OF THE CASE ARE THAT AS PER TRAN SACTION DETAILS OF AN AIR INFORMATION UNDER CATEGORY CASH DEPOSIT AGGREGA TING TO TEN LAKH RUPEES OR MORE IN A YEAR IN ANY SAVING ACCOUNT, IT WAS UPLOADED BY DENA BANK THAT IN THE ASSESSEES SAVING BANK ACCOUNT DUR ING THE YEAR IN TOTAL CASH TRANSACTION OF RS.49,84,600/- TOOK PLACE. IN T HIS REGARD, ASSESSEE FURNISHED BANK STATEMENT OF A/C NO. 108910000033 BE ING MAINTAINED WITH DENA BANK WHICH CONFIRMS THE CASH DEPOSIT OF RS.49, 84,600/- DURING THE PERIOD FROM 01.04.2010 TO 31.03.2011. ON THE CONTRA RY, ON PERUSAL OF ITR, WE NOTED THAT THE ASSESSEE HAS SHOWN IN PART A-P&L AT POINT 51 ASSESSEE 3 HAS SHOWN GROSS RECEIPTS OF RS.9,20,450/- ONLY. THE SE FACTS LET TO CONCLUSION THAT THE ASSESSEE FAILED TO SUBMIT ANY S ATISFACTORY EXPLANATION WHATSOEVER WITH REGARD TO THE SOURCE OF AFOREMENTIO NED CASH DEPOSITS. ACCORDINGLY, ASSESSING OFFICER MADE THE ADDITION OF RS.49,84,600/- TO THE INCOME OF THE ASSESSEE. 6. AGAINST THE SAID ASSESSMENT ORDER, ASSESSEE PREF ERRED AN APPEAL BEFORE THE CIT(A) WHO HAS ALLOWED THE PART RELIEF T O THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: I HAVE GONE THROUGH THE SUBMISSION MADE BY THE LD. AR, THE ORDER OF THE ASSESSING OFFICER AND THE REPLIES SUBM ITTED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AN D I FIND THAT THE APPELLANT IN HIS VERY FIRST REPLY HAD ACCE PTED THE MISTAKES COMMITTED BY HIS COUNSEL AND HAD MADE REQU EST TO BE ASSESSED U/S 44AD. THE COPIES OF RETURNS FOR SUBSEQ UENT ASSESSMENT YEARS ALSO REFLECT PETTY CONTRACT RECEIP TS AND THUS, IT APPEARS THAT THIS PARTICULAR SAVING ACCOUNT SHOW ING THE RECEIPT OF RS.49,62,150/- WAS INADVERTENTLY OMITTED TO BE SHOWN. ACCORDINGLY, LOOKING TO THE CONSISTENT PATTE RN OF RECEIPTS IN THE SUBSEQUENT YEARDULY REFLECTED IN THE RETURN OF INCOME, THE EXPLANATION FURNISHED BY THE APPELLANT IS TREAT ED TO BE GENUINE. THE ADDITION OF RS.49,62,150/- CANNOT, THE REFORE, BE SUSTAINED AND THE SAME IS DIRECTED TO BE DELETED. T HE ASSESSING OFFICER HOWEVER IS DIRECTED TO ASSESS THE APPELLANT AT 8% OF THE TOTAL RECEIPTS OF RS.58,82,600/- WHICH COMES TO RS. 4,70,608. 7. LD. AR OF THE ASSESSEE BEFORE THE CIT(A) HAS REL IED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F MOTILAL PADAMPAL SUGAR MILLS CO. LTD. VS. STATE OF U.P. REPORTED IN 118 ITR 326 (SC) IN WHICH HONBLE SUPREME COURT HAS HELD AS UNDER: 'MOREOVER, IT MUST BE REMEMBERED THAT THERE IS NO PRESUMPTION THAT EVERY PERSON KNOWS THE LAW. IT IS OFTEN 4 SAID THAT EVERYONE IS PRESUMED TO KNOW THE LAW, BUT THAT IS NOT A CORRECT STATEMENT: THERE IS NO SUCH MAXIM KNO WN TO THE LAW. OVER A HUNDRED AND THIRTY YEARS AGO, MAULA J. POINTED OUT IN MARTINDALE THIS V. FALKNER [1846] 2 CB 706: 'THERE IS NO PRESUMPTION IN THIS COUNTRY THAT EVERY PERSON KNOWS THE LAW: IT WOULD BE CONTRARY TO COMMON SENSE AND REASON IF IT WERE SO.' SCRUTTON L). ALSO ONCE SAID: 'IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY LAW, AND NOT V ERY POSSIBLE TO KNOW ALL THE COMMON LAW. BUT IT WAS LOR D ATKPIPN WHO, AS IN SO MANY OTHER SPHERES, PUT THE P OINT IN ITS PROPER CONTEXT WHEN HE SAID IN EVANS V. BARTLAM 1937] AC 473: ' ...... THE FACT IS THAT THERE IS NOT AND NEVER HAS BEEN A PRESUMPTION THAT EVERYONE KNOWS THE LAW. 7.1 LD. AR OF THE ASSESSEE BEFORE THE CIT(A) HAS ALSO R ELIED UPON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. EETACHI AGENCIES (201) 248 ITR 525 (BOM) WHERE THE HONBLE HIGH COURT DISMISSED THE APPEAL OF THE DEPARTMENT BY MAKING TH E FOLLOWING OBSERVATIONS: 'ON AN EXAMINATION OF THE FACTS, THE TRIBUNAL FOUN D THAT THE ASSESSEE HAD ACTED UNDER A GENUINE BELIEF THAT SECTION 269T HAD NO APPLICATION TO DEPOSITS AND THAT IT ONL Y APPLIED TO LOANS AND, THEREFORE, THE TRIBUNAL ORDERED DELET ION OF PENALTY.' 8. LD. AR OF THE ASSESSEE STATED THAT THERE WERE MA NY MISTAKES IN ASSESSEE'S RETURN OF INCOME FILED FOR THE RELEVANT ASSESSMENT YEAR. THE FIRST MISTAKE IN HIS RETURN 'WAS THAT HIS INCOM E FROM CONTRACT WORK WAS NOT REFLECTED IN THE RETURN. DURING THE YE AR, HE WAS ALSO CARRYING ON CONTRACT WORK ON SMALL SCALE FROM WHICH HIS TOTAL RECEIPTS DURING THE RELEVANT ASSESSMENT YEAR WERE RS.49,62,1 50/-. FURTHER, HE WAS ALSO ENGAGED IN SALE OF MEDICINE ON RETAIL B ASIS DURING THE YEAR FROM WHICH MY SALES WERE RS.9,20,450/-. HIS I NCOME-TAX 5 COUNSEL SHOWED INCOME OF RS.1,60,000/- FROM HIS BUS INESS OF SALE OF MEDICINES IN THE RETURN OF INCOME INSTEAD OF APPLYI NG THE PROVISIONS OF SECTION 44AD OF THE INCOME-TAX ACT WHICH WAS APP LICABLE IN HIS CASE. HIS GROSS RECEIPTS FROM MEDICINES AND CONTRAC T BUSINESS WAS RS.58,82,600/-(49,62,150/-+9,20,450/-) AND HE WAS E LIGIBLE FOR COMPUTATION OF HIS INCOME U/S 44AD OF THE ACT AS HI S GROSS TURNOVER/RECEIPTS WERE LESS THAN RS.60,00,000/- DUR ING THE RELEVANT ASSESSMENT YEAR. 9. WE HAVE GONE THROUGH THE RELEVANT RECORDS AND VOL UMINOUS PAPER BOOK FILED BY THE ASSESSEE. WE FIND THAT THE C IT(A) HAS RIGHTLY ALLOWED THE RELIEF OF RS.49,62,150/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNT. TO SUM UP, IN OUR OPINION, THE LEARNED CIT(A) HAS GIVEN COGENT REASON FOR RESTRICTING THE ADDITION TO RS.49,62,150/-. WE THEREFORE DECLINE TO INTERFERE W ITH THE ORDER OF THE CIT(A). THEREFORE, WE DISMISS THE APPEAL OF THE DEPARTMENT. CO NO.04/LKW/2016 10. GROUND NO.1 OF THE CROSS OBJECTION IS FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE CIT(A). HENCE, NO SPECI FIC ADJUDICATION IS REQUIRED. 11. GROUND NO.2 RELATES TO THE DEDUCTION OF RS.1.00 LAKH U/S 80C OF THE ACT. 12. WE HAVE PERUSED THE ORDER OF THE LD. CIT(A), WE FIND THAT AS ASSESSEE REQUESTED TO ASSESSING OFFICER TO ALLOW HI S DEDUCTION U/S 6 80C OF THE ACT OF RS.1.00 LAKH, WHICH WAS INADVERTE NTLY LEFT OUT IN HIS ORIGINAL RETURN AND HE HAS ALSO FILED DOCUMENTARY E VIDENCE FOR CLAIM OF DEDUCTION U/S 80C OF THE ACT. 13. WE HAVE GONE THROUGH THE SUBMISSION MADE BY THE LD. AR OF THE ASSESSEE, GONE THROUGH THE RELEVANT RECORDS AND IMPUGNED ORDERS OF THE AUTHORITIES BELOW, WE AGREE THAT THE CLAIM OF RS.1.00 LAKH U/S 80C OF THE ACT WAS INADVERTENTLY LEFT. 14. IN THE COMBINED RESULT, APPEAL OF THE REVENUE S TAND DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- SD/- (P.K. BANSAL) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26/07/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REG ISTRAR