THE ITO, 2(4), Bhopal V. SMT. MANJU RAJ, Bhopal

ITA 841/IND/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5712 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Unexplained cash credit; Peak credit
• Section: 142(1); 69

Judgement Text

ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIB UNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER .../ I.T.A. NO. 841/IND/2016 / ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER 2(4) BHOPAL :: / APPELLANT VS. SMT. MANJU RAJ BHOPAL PAN AIZPR 9785-N :: / RESPONDENT ! ' # $ / REVENUE BY SHRI MOHD. JAVED - DR %& ' # $ / ASSESSEE BY NONE ' ( ' &) DATE OF HEARING 20.3.2017 *+,- ' &) DATE OF PRONOUNCEMENT 2 1 .3.2017 / O R D E R PER SHRI C.M. GARG, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LEARNED CIT(A)-II, BHOPAL, DATED 26.5.2016 IN F IRST APPEAL NO. CIT(A)-BPL-227/2014-15 FOR THE ASSESSMENT YEAR 2011 -12. 2. THIS APPEAL WAS INITIALLY FIXED FOR HEARING ON 2 9.11.2016 FOR WHICH NOTICE OF HEARING WAS SENT TO THE ASSESSEE AT THE ADDRESS ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 2 GIVEN IN FORM NO. 36 BUT THE ASSESSEE REFUSED TO RE CEIVE THE NOTICE. THEREAFTER, THE CASE WAS AGAIN FIXED FOR HEARING ON 30.1.2017 BUT THE CASE WAS ADJOURNED TO 20.3.2017 FOR WHICH DATE THE NOTICE FOR HEARING WAS AGAIN SENT THROUGH ITO 2(4), BHOPAL, BU T THE SAME WAS RETURNED UNSERVED WITH THE REMARK NOT IN GULMOHAR, HENCE RETURNED. AT THE TIME OF HEARING, THERE WAS NEITHER ANY WRI TTEN SUBMISSION NOR ANY-BODY APPEARED BEFORE THE TRIBUN AL. THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT DR ) WAS HEARD. 2. THE ONLY GROUND TAKEN BY THE REVENUE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITIO N OF RS. 40,98,050/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF UNEXPLAINED DEPOSITS IN BANK ACCOUNT TO RS.3,00,000 /- THEREBY GRANTING RELIEF OF RS.37,98,050/- TO THE ASSESSEE H OLDING THAT ONLY PEAK CREDIT BALANCE OF RS.3,00,000/- SHOULD HAVE BE EN ADDED TO THE INCOME OF THE ASSESSEE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FURNISHER HER RETURN OF INCOME DECLARING TOTAL INCO ME OF RS. 2,26,000/-. THE CASE WAS SELECTED FOR SCRUTINY THRO UGH CASS. ACCORDINGLY NOTICE U/S 143(2) WAS ISSUED ON 10.9.20 12 WHICH WAS DULY SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 3 PROCEEDINGS NOTICES U/S 142(1) OF THE ACT HAVE BEEN ISSUED AT THE ADDRESSES AVAILABLE ON RECORD. ANOTHER NOTICE WAS A LSO SENT ON 6.3.2014 AT SHAHJAPUR PETROL PUMP FIXING THE DATE O F HEARING ON 10.3.2014 BUT NEITHER ANY COMPLIANCE WAS MADE BY TH E ASSESSEE NOR ANY-BODY ATTENDED THE ASSESSMENT PROCEEDINGS. 4. THE ASSESSING OFFICER RECEIVED AIR INFORMATION T O THE EFFECT THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO R S.40,98,050/- IN HER BANK ACCOUNT MAINTAINED WITH BANK OF INDIA, TT NAGAR BRANCH, BHOPAL. SINCE THE ASSESSEE DID NOT COMPLY WITH THE ABOVE NOTICES, THEREFORE, VIDE NOTICE U/S 142(1) OF THE A CT DATED 12.3.2014 THE ASSESSEE WAS SPECIFICALLY ASKED TO FURNISH SOUR CE OF CASH DEPOSITED IN THE BANK ACCOUNT ALONG WITH DOCUMENTAR Y EVIDENCE. THE ASSESSEE FURNISHED COPY OF BANK ACCOUNT ONLY. V IDE ORDER SHEET ENTRY DATED 24.3.2014 THE ASSESSEE WAS ASKED TO FUR NISH REPLY ON 26.3.2014 OF THE BALANCE QUERIES AS ALSO SOURCE AND NATURE OF THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. THE ASSESSEE DID NOT FURNISH THE REQUIRED INFORMATION BUT SOUGHT FOR ADJ OURNMENT AND AT THE REQUEST OF THE ASSESSEE THE ASSESSING OFFICER A GAIN FIXED THE CASE FOR HEARING ON 27.3.2014. ON THIS DATE ALSO NE ITHER THE ASSESSEE ATTENDED NOR ANY WRITTEN REPLY WAS FURNISH ED. IN THIS ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 4 SCENARIO, THE ASSESSING OFFICER WAS LEFT WITH NO OP TION BUT TO PRESUME THAT THE ASSESSEE HAS NO EXPLANATION TO OFF ER IN RESPECT OF THE SOURCE OF THE CASH DEPOSITED AS ALSO OTHER DEPO SITS IN HER BANK ACCOUNT. FROM THE ABOVE CONDUCT OF THE ASSESSEE, TH E ASSESSING OFFICER CAME TO THE CONCLUSION THAT IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO FURNISH DOCUMENTARY EVIDENCES IN RESPECT OF DEPOSITION OF CASH AMOUNTING TO RS.40,98,050/- IN HER BANK ACCOUN T, THEREFORE, THE AMOUNT OF RS. 40,98,050/- REMAIN UNEXPLAINED AS PER THE PROVISION OF SECTION 69 OF INCOME TAX ACT, 1961. THE ASSESSING OFFICER, THEREFORE, ADDED RS.40,98,050/- TO THE TOTAL INCOME OF THE ASSESSEE U/S 69 OF THE ACT. 5. BEING AGGRIEVED WITH THE ADDITION MADE BY THE AS SESSING OFFICER, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, RESTRICTED THE ADDITION TO RS.3,00,000/- WITH THE FOLLOWING OBSERVATIONS :- 7.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E WRITTEN SUBMISSIONS OF THE APPELLANT. WHILE THE AP PELLANT ARGUED FOR TOTAL DELETION OF THE ADDITION OF RS.40, 98,050/- ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 5 HE ALSO ALTERNATIVELY ARGUED THAT THE A.O. HAS ERRE D IN TAKING INTO ACCOUNT ONLY THE CASH DEPOSITS AND NOT CONSIDERING THE CASH WITHDRAWALS BEING MADE AT THE SAME TIME. HE SHOULD HAVE TAKEN THE CASH WITHDRAWAL S INTO ACCOUNT AND ONLY THE PEAK OF THE CASH CREDITS SHOULD HAVE BEEN BROUGHT TO TAX. IT IS SEEN THAT THE A.O. HAS TREATED THE ENTIRE REC EIPTS OF RS.1,41,57,362/- AS BUSINESS TURNOVER OF THE ASSESS EE AND ASSESSED N.P. @ 8% THEREON. HAVING INCLUDED THE CASH CREDITS OF RS.40,98,050 IN THE BUSINESS TURNOV ER, THERE WAS NO RATIONALE TO AGAIN ADD THE SUM TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT. THERE IS MERIT IN THE SUBMISSION OF THE ASSESSEE THAT IN VIEW OF THE FACTS OF THE CASE AND THE REPEATED CASH DEPOSIT S AND WITHDRAWALS MADE FROM THE BANK ACCOUNT, ONLY THE PE AK CREDIT BALANCE SHOULD HAVE BEEN ADDED TO THE INCOME OF THE ASSESSEE. ACCORDINGLY, THE PEAK CASH CREDIT OF RS.3,00,000/- (DEPOSITED ON 22.11.2010) IS DIRECTED TO BE ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 6 ADDED TO THE INCOME OF THE ASSESSEE. THE ADDITION O F RS.40,98,050 IS RESTRICTED TO RS.3,00,000/-. 6. AGAINST THE ABOVE ORDER OF THE LEARNED CIT(A), T HE REVENUE HAS COME UP BEFORE THE TRIBUNAL. 7. WHEN THE CASE WAS CALLED FOR HEARING, NEITHER TH E ASSESSEE NOR HER REPRESENTATIVE ATTENDED THE PROCEEDINGS AND THE RE WAS NO APPLICATION OR REQUEST FOR ADJOURNMENT. HOWEVER, ON PERUSAL OF APPEAL RECORD AND CIT(A) ORDER ALONG WITH THE ORDER OF THE ASSESSING OFFICER, WE FIND IT APPROPRIATE TO DECIDE THE APPEA L IN THE ABSENCE OF THE ASSESSEE AFTER HEARING THE ARGUMENTS OF THE LEA RNED DR. WE PROCEED ACCORDINGLY TO DECIDE THE APPEAL. 8. BEFORE US, THE LEARNED DR SUBMITTED THAT AS IS E VIDENT FROM THE ASSESSMENT ORDER, INSPITE OF PROVIDING ADEQUATE OPPORTUNITIES, THE ASSESSEE FAILED TO FURNISH SOURCE OF CASH OF RS . 40,98,050/- DEPOSITED IN THE BANK ACCOUNT ALONG WITH DOCUMENTAR Y EVIDENCE BEFORE THE ASSESSING OFFICER. IN SUCH A SITUATION, THE ASSESSING OFFICER HAD NO ALTERNATE BUT TO ADD RS. 40,98,050/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INCOME UNDER SECTION 69 OF THE ACT. THE LEARNED DR FURTHER SUBMITTED THAT EVEN BEFORE THE ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 7 LEARNED CIT(A), THE ASSESSEE FAILED TO SUBMIT ANY E VIDENCE IN SUPPORT OF DEPOSIT OF RS.40,98,050/- IN THE BANK AC COUNT AND AS SUCH THE LEARNED CIT(A) WAS TOTALLY UNJUSTIFIED IN RESTRICTED THE ADDITION TO RS. 3 LACS. THE LEARNED DR, THEREFORE, PRAYED THAT THE ORDER OF THE LEARNED CIT(A) DESERVES TO BE ANNULLED AND THAT OF THE ASSESSING OFFICER RESTORED. 9. FROM THE ORDER OF THE LEARNED CIT(A) IT IS OBSER VED THAT THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIED IN TAKING INTO ACCOUNT ONLY THE CASH DEPOSITS AND NOT CONSIDERING THE CASH WITHDRAW ALS MADE AT THE SAME TIME. THEN LEARNED COUNSEL FOR THE ASSESSE E, THEREFORE, SUBMITTED BEFORE THE FIRST APPELLATE AUTHORITY THAT ONLY THE PEAK CREDIT BALANCE SHOULD HAVE BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 10. ON CAREFUL CONSIDERATION OF THE ABOVE SUBMISSI ONS OF THE PARTIES IN THE WAKE OF THE FACTS OF THE CASE, WE AR E OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS MADE THE ADDITI ON ON ACCOUNT OF NET PROFIT RATE OF 8% OF ENTIRE RECEIPTS TREATING T HE SAME AS BUSINESS TURNOVER OF THE ASSESSEE WHICH INCLUDES THE IMPUGNED CASH ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 8 DEPOSITS/CREDITS OF RS.40,98,050/-. IN THIS FACTUAL SITUATION, WHEN THE CASH CREDITS/DEPOSITS HAVE BEEN TREATED AS TURN OVER OF THE ASSESSEE THEN THE ADDITION OF THE SAME AMOUNT WOULD AMOUNT TO DOUBLE ADDITION WHICH IS NOT PERMISSIBLE AS PER THE PROVISIONS OF THE ACT. WE FURTHER OBSERVE THAT THE LEARNED CIT(A) BY TAKING A JUSTIFIED AND CORRECT APPROACH, ADDED THE PEAK CASH CREDIT AMOUNT OF RS.3 LACS AS ON 22.11.2010 AND RESTRICTED THE AD DITION TO RS. 3 LACS. IN VIEW OF THE ABOVE, WE ARE INCLINED TO HOL D THAT THE AMOUNT OF CASH CREDITS WHICH HAVE ALREADY BEEN CONSIDERED AS TURNOVER OF THE ASSESSEE FOR CALCULATING NET PROFIT @ 8% OF THE TURNOVER THEN THE ADDITION OF THE SAME AMOUNT CANNOT BE HELD AS SUSTA INABLE AND THE LEARNED CIT(A) WHILE RESTRICTING THE ADDITION TO RS . 3 LACS, HAS RIGHTLY PICKED UP THE AMOUNT OF PEAK CASH CREDIT. I N VIEW OF THE ABOVE, WE ARE UNABLE TO SEE ANY VALID REASON TO INT ERFERE WITH THE ORDER OF THE LEARNED CIT(A) AND THERE IS NO AMBIGUI TY, PERVERSITY OR ANY OTHER REASON TO INTERFERE WITH THE SAME AND, HE NCE, WE UPHOLD THE SAME. THE SOLE GROUND OF THE REVENUE, BEING DE VOID OF MERIT, IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE ST ANDS DISMISSED. ITO VS. MANJU RAJ ITDA NO. 841/IND/2016 9 THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 21 ST MARCH, 2017. SD/- SD/- $) ! ! (O.P.MEENA) (C.M. GARG) ACCOUNTANT MEMBER J UDICIAL MEMBER MARCH 21 ST 2017. DN/