ACIT CIR-2, THANE V. LAXMINARAYAN HARIPRASAD VARMA, THANE

ITA 8/MUM/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6286 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 01-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K SINGH
• Assessee Lawyers: AJAY R SINGH
• Keywords: Additional evidence
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI V.DURGA R AO, JM ITA NO.8/MUM/2010 : ASST.YEAR 2005-2006 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 2 THANE. VS. SHRI LAXMINARAYAN HARIPRASAD VARMA B/15, MOTI NAGAR CHAWL AMBE MATA MANDIR ROAD BHAYANDER (WEST), DIST. THANE. PA NO.AHPPV6898M. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.SINGH RESPONDENT BY : SHRI AJAY R.SINGH O R D E R PER J.SUDHAKAR REDDY, AM : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) II, THANE DA TED 26.10.2009 FOR ASSESSMENT YEAR 2005-2006, ON THE FOLLOWING GROUNDS :- 1. THE LD.CIT(A) HAS ERRED IN ALLOWING CREDIT OF R S.12,00,000/- FOR ROLLING OVER OF FUNDS IN FAVOUR OF THE ASSESSEE . HOWEVER THE DECISION OF LD.CIT(A) IS BASED ON FACTS AND EVIDENC ES WHICH WERE NOT BEFORE THE ASSESSING OFFICER, THE LD.CIT(A) BEFORE CONSIDERING THE ADDITIONAL EVIDENCES PRODUCED BEFORE HIM, SHOULD HA VE REFERRED THE MATTER TO THE JURISDICTIONAL ASSESSING OFFICER FOR VERIFICATION. 2. THE LD.CIT(A) HAS ERRED IN NOT ALLOWING THE A.O . AN OPPORTUNITY BEFORE ADMITTANCE OF NEW EVIDENCES UNDE R RULE 4A(3) OF THE I.T.RULES. 3. THE LD.CIT(A) HAS ERRED IN COMING TO THE CONCLU SION THAT RS.12,00,000/- WITHDRAWN BY THE ASSESSEE ON VARIOUS DATES HAVE BEEN UTILIZED FOR REDEPOSIT ON SUBSEQUENT DATES, WHEN IT IS HELD BY THE LD.CIT(A) THAT THE ASSESSEE IS A CONTRACTOR AND HAV ING A MARGIN OF 8% PROFIT ON A TOTAL TURNOVER OF RS.21,50,000/-. TH EREFORE, THE SUBSEQUENT CASH DEPOSITS OF RS.16,50,000/- ARE FRES H DEPOSITS AND ASSESSEE CANNOT BE GIVEN THE BENEFIT OF ROLL OVER O F FUNDS. ITA NO.8/MUM/2010 SHRI LAXMINARAYAN HARIPRASAD VARMA. 2 4. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMI SSIONER OF INCOME-TAX (A)-II, THANE ON THE ABOVE GROUNDS BE SE T ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE ASSESSING OFFICER CRAVES LEAVE TO ADD, AMEND ALTER OR DELETE ANY GROUND OF A PPEAL OR ADD A NEW GROUND WHICH MAY BE FOUND NECESSARY. 2. THE ASSESSEE IS AN INDIVIDUAL. INFORMATION WAS R ECEIVED FROM THE TRANSACTIONS REPORTED IN ANNUAL INFORMATION RETURN FURNISHED U/S.285BA OF THE ACT THAT THE ASSESSEE HAS MADE DEPOSITS IN CASH IN HIS SAVING BANK ACCOUNT AGGREGATING TO RS.34,00,000. NOTICE U/S.142(1) WAS ISSUED AND T HE ASSESSEE WAS CALLED FOR TO FILE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005- 2006. THIS WAS DULY SERVED ON THE ASSESSEE ON 16.09.2007. AS THE ASSESSEE HAS NOT COMPLIED WITH THIS NOTICE, THE ASSESSING OFFICER TREATED THE TOTAL DEPOSITS IN THE SAVING BANK ACCOUNT AS UNEXPLAINED DEPOSITS AND COMPLETED THE ASSESSMENT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE A UTHORITY GRANTED RELIEF TO THE ASSESSEE BY OBSERVING THAT THE ASSESSEE IS A SMALL TIME LABOUR CONTRACTOR IN MIRA BHAYANDER AREA OF THANE DISTRICT AND DOING THE WORK OF EARTH FILLING, LEVELING ETC. HE HELD THAT THE ENTIRE AMOUNT WAS DEPOSITED IN HIS BANK ACCOUNT OBVIOUSLY CANNOT BE TREATED AS HIS INCOME. HE APPLIED SECTION 44AD A ND ESTIMATED THE INCOME AT 8%. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. THE L EARNED DEPARTMENTAL REPRESENTATIVE SHRI K.SINGH SUBMITTED THAT THE LEAR NED CIT(A) HAS NO BASIS WHATSOEVER TO COME TO A CONCLUSION THAT THE ASSESSE E IS A CONTRACTOR AND THE DEPOSITS IN QUESTION ARE HIS TURNOVER AS CONTRACTOR . HE SUBMITTED THAT THE ISSUE MAY BE SENT BACK TO THE FILE OF THE ASSESSING OFFICER F RESH ADJUDICATION. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI AJAY R.SINGH DID NOT DISPUTE THIS SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTIVE AND AGREED THAT T HE ISSUE SHOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDIC ATION. 3. IN VIEW OF THE RIVAL SUBMISSIONS AND THE AGREED POSITION, WE ARE OF THE CONSIDERED OPINION THAT IT WOULD BE JUST AND FAIR I F THE IMPUGNED ORDER IS SET ASIDE ITA NO.8/MUM/2010 SHRI LAXMINARAYAN HARIPRASAD VARMA. 3 AND THE MATTER IS RESTORED TO THE FILE OF THE ASSES SING OFFICER FOR FRESH ADJUDICATION, AS PER LAW. WE ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 24 TH DAY OF NOVEMBER, 2010. SD/- SD/- ( V.DURGA RAO ) ( J.SUDHAKAR REDDY ) JUDICIAL MEMBER ACCOUN TANT MEMBER MUMBAI : 24 TH NOVEMBER, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) II, THANE. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.