ITO, Hospet V. Smt. Sharada Pampanna, Sandur

ITA 826/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1576 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 22-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69; 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 826/BANG/2010 (ASST. YEAR 2005-06) THE INCOME-TAX OFFICER, WARD-2, HOSPET. . APPELLANT VS. SMT. SHARADA PAMAPANNA, TEACHERS COLONY, SANDUR. . RESPONDENT APPELLANT BY : SHRI D PRABHAKAR REDDY, ADDL. CO MMISSIONER OF INCOME-TAX RESPONDENT BY : SHRI S.R KIRON, CHARTERED ACCOUN TANT O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVA NT ASSESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A) AT HUBLI DATED 31.03.2010. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 144 OF THE INCOME-TAX ACT, 1961. ITA NO.826/B/10 2 2. IN THE PRESENT CASE, AN AMOUNT OF RS.18,13,114/- WAS FOUND IN THE S.B ACCOUNT OF THE ASSESSEE. NOTICE WAS SERVED ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE DEPOSITS. AS NO EXPLANATION WAS FORTHCOMING FROM THE ASSESSEE, THE ASSESSING OFFICE R COMPLETED AN ASSESSMENT EX-PARTE U/S 144 AND TREATED THE SAID AM OUNT OF RS.18,13,114/- AS THE INCOME OF THE ASSESSEE U/S 69 OF THE INCOME-TAX ACT 1961. 3. IN FIRST APPEAL, THE CIT(A) FOUND THAT THE AMOUN TS WERE DIVERTED BY ASSESSEES HUSBAND, WHO IS A P.W.D CONTRACTOR. HE FOUND THAT THE DEPOSITS REFLECTED IN THE S.B ACCOUNT OF THE ASSESS EE, IN FACT BELONGED TO THE BUSINESS FUNDS OF THE ASSESSEES HUSBAND. T HERE WERE WITHDRAWALS FROM THE SAID S.B ACCOUNT JUST LIKE DEP OSITS. IN THE ABOVE CIRCUMSTANCES, THE CIT(A) HELD THAT THE ENTIRE AMOU NT CANNOT BE HELD AS INCOME IN THE HANDS OF THE ASSESSEE, BUT ONLY TH E PROFIT ATTRIBUTABLE TO THAT MUCH CONTRACT WORK ALONE COULD BE HELD AS INCOME LIABLE FOR TAX. ACCORDINGLY, HE DIRECTED THE ASSESSING AUTHOR ITY TO DETERMINE THE INCOME ESTIMATING NET PROFIT AT 8% ON THE GROSS REC EIPTS OF RS.24,48,114/-. 4. THE REVENUE IS AGGRIEVED AND, THEREFORE, THIS AP PEAL BEFORE US. ITA NO.826/B/10 3 5. WE HEARD SHRI D PRABHAKAR REDDY, THE LEARNED ADD L. COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENU E AND SHRI S.R KIRON, THE LEARNED CHARTERED ACCOUNTANT APPEARING F OR THE RESPONDENT ASSESSEE. 6. WE AGREE WITH THE CIT(A) THAT THERE IS NO PROBAB ILITY FOR THE ASSESSEE TO HAVE RAISED THAT MUCH FUNDS TO MAKE HUG E DEPOSITS IN HER S.B ACCOUNT AS ALLEGED BY THE ASSESSING OFFICER. A S THE CIRCUMSTANCES SPEAK, THOSE DEPOSITS REFLECTED IN TH E S.B ACCOUNT OF THE ASSESSEE IN FACT RELATED TO THE BUSINESS FUNDS OF T HE ASSESSEES HUSBAND, WHO WAS CARRYING ON HIS BUSINESS AS A P.W. D CONTRACTOR. WHEN THESE FACTS WERE BROUGHT OUT FROM THE RECORDS AND ON A REASONABLE APPRECIATION OF THOSE FACTS, THE CIT(A) IS JUSTIFIED IN TREATING THE CREDITS IN THE S.B ACCOUNT OF THE ASSE SSEE AS THE CONTRACT RECEIPTS OF ASSESSEES HUSBAND. WHEN THE AMOUNTS A RE THUS FUND AS GROSS COLLECTION, THE ENTIRE AMOUNT CANNOT BE TAXED . WHAT IS TO BE TAXED IS ONLY A REASONABLE ESTIMATE OF THE PROFIT A TTRIBUTABLE TO THOSE GROSS RECEIPTS. THE CIT(A) HAS ESTIMATED THE PROFI T AT 8 %. WE FIND IT IS REASONABLE. ITA NO.826/B/10 4 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE D O NOT FIND ANY GROUND TO INTERFERE IN THE ORDER PASSED BY THE CIT( A). THIS APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 8. IN RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY THE 31ST DAY OF JANUARY, 2011, AT BANGALORE. SD/- SD/- (P MADHAVI DEVI) (DR. O .K NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.