GEET JOSHI, Jaipur V. ITO, Kota

ITA 796/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1901 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Assessee Lawyers: D KUMAR
• Keywords: Unexplained investment; Presumptive income; Unexplained expenditure; Business income; Deemed to accrue or arise in india; Revised return
• Section: 44AD; 69C; 69; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 796/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 GEET JOSHI, P/O- M/S JOSHI MINERALS, 412, SHOPPING CENTRE, KOTA. CUKE VS. INCOME TAX OFFICER, WARD-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFFPJ 4818 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI D. KUMAR (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/10/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/10/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A), KOTA DATED 20/05/2016 FOR THE A.Y. 2007-08, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ASSESSING AUTHORITY HAS GROSSLY ERRED ON FACTS AND IN LAW IN MAKING ADDITION OF RS. 14,96,757/- UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 AND THE APPELLATE AUTHORITY HAS GROSSLY ERRED ON FACTS AND IN LAW IN SUSTAINING THE SAME. ITA 796/JP/2016_ GEET JOSHI VS ITO 2 2. THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE SUBMISSIONS OF THE APPELLANT AND TRANSACTIONS IN THE BANK ACCOUNT. 2. EARLIER THE ASSESSEES APPEAL HAS BEEN DISMISSED FOR WANT OF PROSECUTION VIDE ORDER DATED 08/02/2017. FOR RECALL ING OF THE ORDER OF THE ITAT, THE ASSESSEE HAS FILED M.A. NO. 99/JP/2017 AND VIDE ORDER DATED 18/08/2017, ORDER PASSED BY THE ITAT HAS BEEN RECALLED AND FIXED FOR HEARING ON MERIT. 3. THE LD. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AND WRITT EN SUBMISSIONS. IT IS VERY CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DISCLOSE THE CASH DEPOSITS IN THE BANK ACCOUNT SINCE THESE PERTAIN THE PERIOD IN F.Y. 2006-07 (A.Y. 2007-08). THE NOTICE WAS ISSUED U/S 148 ON 27-03-2014. THE REVISED RETURN WAS FILED I N RESPONSE TO THE NOTICE ON 13-05-2014 I.E. AFTER THE GAP OF ONE AND A HALF MONTHS. THUS IT WAS VERY CLEAR THAT THE ASSESSEE AF TER EXHAUSTING ALL EFFORTS TO ENSURE THAT IT DID NOT HAVE TO PAY T AX ON THE SAID UNDISCLOSED RECEIPTS, FINALLY RESORTED TO PROVISION S OF SECTION 44AF TO SAVE ITSELF FROM BEING TAXED ON THE ENTIRE UNDIS CLOSED RECEIPTS. THE BENEFIT OF PRESUMPTIVE TAXATION SCHEME CANNOT B E GIVEN UNDER SUCH CIRCUMSTANCES AND EVEN ON THE FACTS INVO LVED, THE ASSESSEE WAS NOT ENTITLED TO CLAIM SUCH BENEFIT BEC AUSE NONE OF ITA 796/JP/2016_ GEET JOSHI VS ITO 3 THE EXPLANATIONS GIVEN BY IT BEFORE THE AO IS CORRO BORATED BY ANY EVIDENCE. THE SCHEME OF SECTION 44 IS DESIGNED TO GIVE RELIEF TO SMALL TAXPAYERS ENGAGED IN THE FOLLOWING BUSINESSES. SECTION 44AD - CIVIL CONSTRUCTION SECTION 44AE - TRANSPORTERS SECTION 44AF - RETAIL TRADERS. IN THE ORIGINAL RETURN FILED ON 24-012008 ALSO, THE FORM USED WAS ITR 3 AND NO PROFIT OF BUSINESS WAS DECLARED. EVE N IF THE ASSESSEE HAD NO KNOWLEDGE OF THE PRESUMPTIVE TAX SCH EME AS IT HAS CLAIMED, IT SHOULD HAVE MENTIONED BUSINESS INCO ME. IN THE COMPUTATION, IT HAS GIVEN PROFIT U/S 44AF AND MENTI ONED PROFIT U/S 44AD. IN RESPONSE BEFORE THE AO, IT HAS MENTION ED ABOUT INCOME U/S 44AE (SEE ASSESSMENT ORDER ). THUS, ITS SUBMISSIONS ARE NEITHER BORNE OUT BY ANY EVIDENCES NOR FREE OF CONTRADICTIONS. GUJARAT HIGH COURT IN FAKIR MOHMED HAJI HASAN VS. CIT ON 10 AUGUST,2000 (247 ITR 290 GUJ.) HELD- THE SCHEME OF SECTIONS 69, 69A, 69B AND 69C OF TH E INCOME-TAX ACT, 1961, WOULD SHOW THAT IN CASES WHER E THE NATURE AND SOURCE OF INVESTMENTS MADE BY THE ASSESS EE OR THE NATURE AND SOURCE OF ACQUISITION OF MONEY, BULLION, ETC., OWNED BY THE ASSESSEE OR THE SOURCE OF EXPENDITURE INCURR ED BY THE ASSESSEE ARE NOT EXPLAINED AT ALL, OR NOT SATISFACT ORILY EXPLAINED, THEN, THE VALUE OF SUCH INVESTMENTS AND MONEY OR TH E VALUE OF ARTICLES NOT RECORDED IN THE BOOKS OF ACCOUNT OR TH E UNEXPLAINED EXPENDITURE MAY BE DEEMED TO BE THE INCOME OF SUCH ASSESSEE. IT FOLLOWS THAT THE MOMENT A SATISFACTORY EXPLANATI ON IS GIVEN ABOUT SUCH NATURE AND SOURCE BY THE ASSESSEE, THEN THE SOURCE WOULD STAND DISCLOSED AND WILL, THEREFORE, BE KNOWN AND THE INCOME WOULD BE TREATED UNDER THE APPROPRIATE HEAD OF INCOME ITA 796/JP/2016_ GEET JOSHI VS ITO 4 FOR ASSESSMENT AS PER THE PROVISIONS OF THE ACT. HO WEVER, WHEN THESE PROVISIONS APPLY BECAUSE NO SOURCE IS DISCLOS ED AT ALL ON THE BASIS OF WHICH THE INCOME CAN BE CLASSIFIED UND ER ONE OF THE HEADS OF INCOME UNDER SECTION 14 OF THE ACT, IT WOU LD NOT BE POSSIBLE TO CLASSIFY SUCH DEEMED INCOME UNDER ANY O F THESE HEADS INCLUDING INCOME FROM 'OTHER SOURCES' WHICH H AVE TO BE SOURCES KNOWN OR EXPLAINED. WHEN THE INCOME CANNOT BE SO CLASSIFIED UNDER ANY ONE OF THE HEADS OF INCOME UND ER SECTION 14, IT FOLLOWS THAT THE QUESTION OF GIVING ANY DEDU CTIONS UNDER THE PROVISIONS WHICH CORRESPOND TO SUCH HEADS OF IN COME WILL NOT ARISE. IF IT IS POSSIBLE TO PEG THE INCOME UNDE R ANY ONE OF THOSE HEADS BY VIRTUE OF A SATISFACTORY EXPLANATION BEING GIVEN, THEN THESE PROVISIONS OF SECTIONS 69, 69A, 69B AND 69C WILL NOT APPLY, IN WHICH EVENT, THE PROVISIONS REGARDING DED UCTIONS, ETC., APPLICABLE TO THE RELEVANT HEAD OF INCOME UNDER WHI CH SUCH INCOME FALLS WILL AUTOMATICALLY BE ATTRACTED. THUS IN THE LIGHT OF THE ABOVE AND IN THE ABSENCE O F ANY EVIDENCE TO SUPPORT ITS CLAIM, IT IS NOT POSSIBLE ON THE FAC TS INVOLVED IN THIS CASE TO ACCEPT ASSESSEE'S CLAIM OF INCOME DECLARED U/S 44AF, BEING NEITHER BONA FIDE NOR GENUINELY PROVED. THE A OS DECISION OF CONSIDERING THE DEPOSITS IN THE ASSESSEE'S BANK A CCOUNTS AS UNEXPLAINED AND ASSESSED U/S 69 IS HELD TO BE JUSTI FIED AND ACCORDINGLY THE ADDITION OF RS. 14,96,757/- IS CONFI RMED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD AR OF THE ASSESSEE HAS SUBMITTED AS UNDER: APPELLANT ASSESSEE HAS DONE THE BUSINESS OF PURCHAS E AND SALE OF KOTA STONE AND SAND STONE AT A VERY SMALL LEVEL AS A RET AILER. APPELLANT DEPOSITED THE AMOUNT IN THE BANK FOR THE PURPOSE OF MAKING PURCHASES TO FULFILL THE SUPPLY OF KOTA STONE AND SA ND STONE. FROM THE AMOUNT DEPOSITED IN BANK APPELLANT WITHDREW THE AMOU NT FOR MAKING PAYMENT FOR PURCHASES. THE GOODS SO PURCHASED WERE SOLD AND SALE ITA 796/JP/2016_ GEET JOSHI VS ITO 5 CONSIDERATION RECEIVED BY THE APPELLANT WAS DEPOSIT ED IN THE BANK ACCOUNT. SOME TIME THE PURCHASES DEPOSITED THE AMOU NT IN THE BANK ACCOUNT. THE A.O. HAS MADE ADDITIONS FOR THE TOTAL AMOUNT DEPOSITED IN THE BANK ACCOUNT WITHOUT TAKING INTO CONSIDERATION THAT SOURCE WAS FROM THE SALES OF THE GOODS FROM THE AMOUNT WITHDRA WN FROM THE BANK ACCOUNT. THE APPELLANT HAS DECLARED INCOME COMP UTED U/S. 44AF OF THE ACT ON THE TOTAL SALES CONSIDERATION RECEIVE D AND DEPOSITED IN THE BANK ACCOUNT. HUMBLE APPELLANT SUBMITS THAT FROM THE PERUSAL OF B ANK STATEMENT (PAGE 6 TO 10 OF PAPER BOOK) IT IS APPARENT THAT MON EY WITHDRAWN FOR MAKING PURCHASES AND SALES CONSIDERATION RECEIVED HA S BEEN DEPOSITED IN THE ACCOUNT. THE A.O. AND CIT APPEAL WERE NOT JUSTIFIED IN MAKING ADDITION OF WHOLE OF AMOUNT DEPOSITED IN BANK ACCOUNT RS. 14,96, 757/- AS UNEXPLAINED INVESTMENT WITHOUT TAKING INTO CONSIDERA TION THE EXPLANATION GIVEN BY THE APPELLANT. HUMBLE APPELLANT PRAYS THAT ADDITION MAY PLEASE BE DELETED. 5. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. IT IS NOTICED THAT THERE ARE TWO BANK ACCOUNTS OF THE ASSESSEE. THE ASSESSING OFFICER HAS TAKEN COGNIZANCE OF ONLY ONE HELD WITH THE PUNJAB NATIONAL BANK. THE LD AR PLEADED THAT THE ASSESSEE WAS TRADING IN CERTAIN GOO DS AND PROCEEDS WERE DEPOSITED IN THE BANK ACCOUNT AND THE CASH WAS WI THDRAWN TO ITA 796/JP/2016_ GEET JOSHI VS ITO 6 PURCHASE FURTHER GOODS FOR TRADING. IN ABSENCE OF F ULL DETAILS OF THE BANKING TRANSACTIONS OF BOTH THESE ACCOUNTS, IT IS NOT POSSIBLE TO ARRIVE AT A CONCLUSION REGARDING THE DETERMINATION OF THE INCOME OF THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE AND EQUITY, I RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO BE DE CIDED DE NOVO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH OCTOBER, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI GEET JOSHI, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-1, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 796/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR