The Income Tax Officer, Jalandhar V. Sh. Naginder Khera, Jalandhar

ITA 83/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8804 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Keywords: Business income; Search and seizure; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.83(ASR)/2016 ASSESSMENT YEARS: 2010-11 INCOME TAX OFFICER, WARD-3(3), JALANDHAR. VS. SH. NAGINDER KHERA, PROP. M/S. KHERA CLINIC, BASTI SHEIKH, JALANDHAR. PAN: AAWPK-1111E (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANKAR (D R.) RESPONDENT BY: SH. ANIL MIGLANI (ADV.) DATE OF HEARING: 17.01. 2017 DATE OF PRONOUNCEMENT: 20.01.2017 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORDER OF LD. C IT(A), JALANDHAR, DATED 19.11.215, FOR ASST. YEAR: 2010-11. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL. (I) THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON F ACTS OF THE CASE IN RESTRICTING THE ADDITION ON RS.48,70,200/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUN TS OF THE ASSESSEE TO RS.4,00,656/- BY TREATING THE DEPOSITS AS BUSINESS RECEIPT AND APPLYING 8% NP ON IT, WITHOUT APPRECIAT ING THE FACTS THAT THE ASSESSEE NEVER ACCEPTED DOING ANY BUSINESS. (II) THE CIT(A) HAS ERRED IN IGNORING THE FACT THA T THE ASSESSEE HAS NOT DISCLOSED THE TWO BANK ACCOUNTS, OR THE TIL E BUSINESS, IN THE RETURN OF INCOME. HENCE, THE CIT(A) HAS WRONGLY IGN ORED THE FACT THAT DEPOSITS OF RS.48,70,200/- WERE FROM UNEXPLAIN ED SOURCES AND THEREFORE TAXABLE U/S 69/69A OF THE I.T ACT, 1961. ITA NO.83 (ASR)/2016 ASST. YEAR: 2010-2011 2 (III) IT IS PRAYED THAT THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. (IV) THE APPELLANT REQUESTS FOR LEAVE TO ADD OR A MEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DI SPOSED OFF. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE DERIVES HIS INCOME AS MEDICAL PRACTITIONER. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS, THROUGH AIR INFORMATION, IT WAS NOTICED THAT ASSESSEE HAD MADE CASH DEPOSITS AMOUNTING TO RS.48,70,200/-. THE ASSESSEE WAS ASKED TO EXPLAIN SOURCES OF CASH DEPOSITS IN THE ABOVE BANK ACCOUNT S MAINTAINED BY HIM. THE ASSESSEE VIDE REPLY DATED 09.01.2013 AND SUBMITTED AS UNDER: 1. I AM DOING SMALL TYPE OF MEDICAL PRACTICE AT AL I MOHALLA, JALANDHAR. I HAVE NO OTHER PLACE OF BUSINESS OR GODOWN FOR STORING ANY K IND OF MATERIALS. ONLY MY TWO BANK ACCOUNTS NAMELY ACCOUNT NUMBER 16150100001689 IN THE FEDRAL BANK LIMITED, JALANDHAR AND ACCOUNT NUMBER 71510075362 I N STANDARD CHARTERED BANK, JALANDHAR HAVE BEEN USED BY ME FOR SMALL COMM ISSION EARRING @ 1% ON BANK TRANSFERS. 2. THAT I WAS APPROACHED BY THE BATHROOM TILES AGENT FROM GUJRAT. HE USED TO COLLECT CASH PAYMENTS FROM HIS PARTIES IN JALANDHAR BUT WAS AFRAID OF CARRYING C ASH TO GUJRAT. I HELPED HIM WITH MY TWO BANK ACCOUNTS FROM WHERE PAYMENTS WERE TRANS FERRED TO BATHROOM TILES DEALERS IN GUJRAT. HE GAVE ME A SMALL COMMISSI ON OF 1 % WHICH I HAVE SHOWN IN MY INCOME TAX RETURN. 3. THAT I WAS NEVER INTO THE BUSINESS OF ANY KIND OF SALE PURCHASE OF MAT ERIALS FROM GUJRAT OR ANYWHERE ELSE. 4. AS MENTIONED EARLIER I HAVE NO PLACE OF BUSINESS AND NO GODOWN. NEI THER I HAVE MADE ANY KIND OF SALE PURCHASE OF ANY KIND TO SEND PAYMENTS TO ANY PARTY AND DEALER. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED AS UNDER: THE BANK STATEMENT ARE SHOWING WITHDRAWALS TO GUJR AT PARTIES NAMELY M/S SENSO GRANITE PVT. LTD., M/S IRIS CERAMIC, M/S OMEG A GLAJID TILES, M/S KITCO ITA NO.83 (ASR)/2016 ASST. YEAR: 2010-2011 3 CERAMIC, M/S FOTON CERAMIC, M/S VETO CERAMIC ETC. T HESE ARE THE PARTIES TO WHOM THE AGENT HAS TRANSFERRED PAYMENTS. THE ASSESS EE HAS NOT DONE ANY PHYSICAL TRANSACTION WITH THESE PARTIES. THE ASSESSEE WAS REQUESTED TO INTIMATE THE COMPLETE NAMES AND ADDRESS WITH CONTACT NUMBERS OF THE BATHROOM DEALERS AT GUJRA T TO WHOM THE AMOUNT WAS TRANSFERRED FROM HIS BANK ACCOUNTS AS CLAI MED BY HIM. THE ASSESSEE SUBMITTED ON 25.02.2013 THAT THE CASH DEPOSIT S IN HIS BANK ACCOUNT WERE DEPOSITED THROUGH RAJU PATEL AND DOES NOT KN OW HIS POSTAL ADDRESS, CONTACT NUMBER AND PAN. THE ASSESSEE FURTHER SUBMITTED THAT HE DOES NOT KNOW THE CONTACT NUMBERS OF BATHR OOM DEALERS OF GUJRAT TO WHOM THE AMOUNTS WERE TRANSFERRED BY THE ABOVE NAMED AGENT. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPLY O F THE ASSESSEE, AND THEREFORE, TREATED THE DEPOSITS IN THE BANK AS INCOME OF THE ASSESSEE AND MADE ADDITION TO THAT EXTENT. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AND LD. CIT (A) DELETED THE ADDITION. 5. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT OUT OF CASH DEPOSITS IN THE BANKS A SIGNIFICANT AMOUNT HAS BEEN TRANSFERRED TO THE ACCOUNT OF SUPP LIERS OF TILES IN GUJRAT. THE LD. CIT(A) HAS ANALYZED THE BANK ACCOU NTS AND HAS MENTIONED THE PARTIES IN GUJRAT IN WHOSE ACCOUNTS THE PAYMENTS W ERE TRANSFERRED FROM THE BANK ACCOUNTS OF THE ASSESSEE. THE LD. CIT(A) HAS ITA NO.83 (ASR)/2016 ASST. YEAR: 2010-2011 4 MENTIONED THESE DETAILS AT PAGE 10 TO 13 OF HIS ORDER AND THEREF ORE, HE HAS RIGHTLY HELD THAT THE ENTIRE CASH DEPOSITS CANNOT BE TREATED A S INCOME OF THE ASSESSEE AS THE CASH DEPOSITS HAD BEEN IMMEDIATELY TRANSFERRED TO VARIOUS PARTIES DEALING IN BATHROOM TILES. HE FURTHER HELD THAT THE ASSESSEE CAN BE SAID TO BE DOING BUSINESS OF TRADING IN TILES IS CORRECT AND THEREFORE, HE HAS RIGHTLY HELD THAT INCOME OF THE A SSESSEE WAS LIABLE TO BE COMPUTED AS PER THE PROVISION OF SECTION OF 44AF OF THE ACT AND HAD RIGHTLY RESTRICTED THE DISALLOWANCE. IN VIEW OF THE AB OVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A), TH EREFORE, APPEAL FILED BY REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.01.2 017. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20.01.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER