Shri Jitendra Laljibhai Tandel, Valsad V. The Income tax Officer,Ward-2, Valsad

ITA 842/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80417 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Section: 143(3); 6; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 842/AHD/2012 ASSESSMENT YEAR: 2008-09 JITENDRA LALJIBHAI TANDEL, SIDDHSHILA APARTMENT, GITASADAN ROAD, VALSAD-396001. PAN: AALPT1869M VS. THE INCOME TAX OFFICER, WARD-2, VALSAD. / APPELLANT / RESPONDENT REVE NUE BY : SHRI B.L. YADAV, SR. DR ASSESSEE(S) BY : SHRI RAJESH M. UPADHYAY, AR / DATE OF HEARING : 09/10/2014 / DATE OF PRONOUNCEMENT: 17/10/2014 (/ O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) VALSAD DATED 29.12. 2012. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. LD. ITO HAS ERRED IN LAW AND ON FACT TO ADD AN AMOUNT O F RS 11,59,000/- (AS AGAINST CORRECT FIGURE OF RS 10,59,00 0/- U/S. 68 OF THE I.T. ACT. COMMISSIONER OF INCOME TAX (APPE ALS) ALSO ERRED TO CONFIRM ITOS ACTION. 2. WITHOUT PREJUDICING GROUND NO. 1, PEAK OF CREDITS SHOULD HAVE BEEN WORKED OUT AND TO BE ADDED. 3. RECOVERY OF OUTSTANDING DEMAND IS PRAYED TO BE STAYED. ITA NO. 842/AHD/201 2 SHRI JITENDRA L. TANDEL, VALSAD . AY 2008-0 9 - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DERIVED INCOME FROM COMMISSION BY SELLING FISH. THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.07.2008, DECLARING TOTAL INCOM E AT RS 1,46,677/-. THE SAID RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE ACT WITHOUT ANY CHANGE TO THE INCOME RETURNED. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S. 143(3) OF THE ACT. WHILE COMPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT, THE ASSESSING OFF ICER MADE ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT U/S. 68 OF THE ACT AMOUNTING TO RS 11,59,000/- AND DETERMINED THE TOTAL INCOME AT RS 13,0 5,680/-. 4. ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX ( APPEALS), THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITT ED STATEMENT SHOWING FISHERMEN-WISE SALE OF FISH. HE ALSO FILED AFFIDAVIT S OF SUCH FISHERMEN, WHOSE FISH WAS SOLD ON COMMISSION. THE DAILY SALE PROCEEDS OF FISH ARE CREDITED IN THE CASH BOOK. WHEN CASH AGGREGATES SUBSTANTIALLY, IT IS DEPOSITED IN BANK. THE ASSESSEE WITHDRAWS NECESSARY AMOUNT FOR EXPENSES AND FOR MAKING PAYMENTS NEEDED BY FISHERMEN WHO ARE TO BE PAID AN AMOUN T TOWARDS THEIR FISH SALE AMOUNT. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ALSO FILED THE STATEMENT SHOWING WITHDRAWALS FROM BANK, AND SUC H WITHDRAWALS ARE CREDITED IN CASH BOOK AND PAYMENTS MADE THEREFROM TO FI SHERMEN, WHOSE MONEY, THE ASSESSEE CREDITED IN HIS CASH BOOK AFTER DED UCTING COMMISSION OF 5% FROM THIS AMOUNT, COMMISSION AMOUNT IS ALSO C REDITED SEPARATELY IN CASH BOOK. THE AUTHORIZED REPRESENTATIVE OF THE ASSE SSEE FILED COPY OF INDUSIND BANK ACCOUNT STATEMENT SHOWING THE AMOUNT DEPO SITED ON VARIOUS DATES ARE RECEIVED FROM FISHERMEN WHOSE FISH IS SOLD A ND WITHDRAWN FROM CASH BOOK, AND AMOUNT WITHDRAWN FOR MAKING PAYMENTS ARE ALSO IN THE NAME OF SPECIFIC FISHERMEN. THE AO HAS NO DISPUTE A BOUT THE WITHDRAWALS IN THE NAME OF FISHERMEN WHICH MAY ENABLE TO HOLD THAT AMOUNT DEPOSITED OF RS 10,59,000/- BUT BY MISTAKE THE AO SHOWN AT RS 11,5 9,000/- ARE FULLY EXPLAINED AND THEREFORE, THE SAME CANNOT BE ADDED U/S. 6 8 OF I.T. ACT, BECAUSE FISHERMEN HAVE FILED AFFIDAVITS AND CASH BOOK M AINTAINED BY THE ITA NO. 842/AHD/201 2 SHRI JITENDRA L. TANDEL, VALSAD . AY 2008-0 9 - 3 - ASSESSEE SHOWS THE NAMES OF THE RESPECTIVE FISHERME N. IT WAS THEREFORE PRAYED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ADDITION MADE BY THE ASSESSING OFFICER MAY BE DELETED. 5. AFTER GOING THROUGH THE WRITTEN SUBMISSION OF THE ASSESSEE, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER: I HAVE CONSIDERED THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AS WELL AS THE CONTENTION RAISED B Y THE AR OF THE APPELLANT IN THE WRITTEN SUBMISSION. I AGREE WITH THE AO THAT AS THE APPELLANT IS A COMMISSION AGENT, HE IS NOT SUPPOSED TO DEPOSIT THE SALE PROCEEDS IN HIS ACCOUNT ON BEHALF OF THE OTHER FISHERMEN. MOREOVER, OPENING OF A BANK ACCOUNT IN REMOTE AREAS IS NOT DIFFICULT, AS IT WAS BEFORE. IF THAT WAS THE CASE, THEN AS PE R ACCOUNTING PRINCIPLE, NO COMMISSION AGENT EVER TAKES SUCH RISK FOR ANY PERSON BY ENTERING THE ENTIRE SALE PROCEEDS IN HIS ACCOUNT FO R A MEAGRE COMMISSION. FURTHER, THE APPELLANT FAILED TO OFFER ANY SATISFACTORY EVIDENCE WHICH PROVES THAT THE MONEY DEPOSITED IN B ANK ACCOUNT IS BELONGING TO THE FISHERMEN. THEREFORE, THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT. THUS, THIS GR OUND OF APPEAL IS DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. I N THE INSTANT CASE, THE ASSESSEE HAS FILED HIS RETURN OF INCOME DISCLOSING TO TAL INCOME AT RS 1,46,676/- BEING DERIVED FROM BUSINESS OF SELLING FISH ON COMMISSION. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS MA INTAINING BANK ACCOUNT WITH INDUSIND BANK WHEREIN TOTAL DEPOSITS DURING THE YE AR UNDER CONSIDERATION ON VARIOUS DATES AMOUNTED TO RS 11,59,0 00/-. THE WITHDRAWAL ON VARIOUS DATES FROM THE SAID BANK ACCOUNT WAS RS 11 ,10,000/-. 7. BEFORE THE ASSESSING OFFICER, THE ASSESSEE EX PLAINED THE SOURCE OF DEPOSIT IN THE AFORESAID BANK ACCOUNT AS OU T OF SALE PROCEEDS OF FISH WHICH THE ASSESSEE UNDERTAKES ON BEHALF OF VARIO US FISHERMEN ON COMMISSION BASIS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COULD NOT GIVE FULL DETAILS OF FISHERMEN FOR WHOM HE SOLD F ISHES ON COMMISSION, RATE OF COMMISSION AND ALSO OBSERVED THAT THERE WERE D ISCREPANCIES IN THE ITA NO. 842/AHD/201 2 SHRI JITENDRA L. TANDEL, VALSAD . AY 2008-0 9 - 4 - CASH BOOK MAINTAINED BY THE ASSESSEE AND THE BANK STATEM ENT. THE ASSESSING OFFICER WAS OF THE VIEW THAT A COMMISSION AGENT WOULD NOT DEPOSIT SALE PROCEEDS IN HIS BANK ACCOUNT FOR MEAGRE COMMISSIO N. HE THEREFORE DISBELIEVING THE EXPLANATION OF THE ASSESSEE ADDED ENTIR E DEPOSIT OF RS 11,59,000/- AS INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. 8. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 9. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LOWER AUTHOR ITIES AND THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 10. WE FIND THAT THE EXPLANATION OF THE ASSESSEE TH AT THE DEPOSITS IN THE BANK ACCOUNT ON VARIOUS DATES WERE OUT OF SALE PR OCEEDS OF FISHES ON COMMISSION BASIS WAS NOT ACCEPTED BY THE REVENUE ON THE GROUND THAT IN THEIR OPINION, A COMMISSION AGENT WOULD NOT DEPOSIT SAL E PROCEEDS RECEIPT ON BEHALF OF OTHERS IN ITS OWN BANK ACCOUNT. WE DO N OT FIND ANY FORCE IN THIS OPINION OF THE LOWER AUTHORITIES. THERE IS NO LAW W HICH PROHIBITS A COMMISSION AGENT FROM DEPOSITING SALE PROCEEDS IN ITS O WN BANK ACCOUNT. WE FIND THAT IT IS NOT IN DISPUTE THAT THE BANK ACCOUNT IN QUESTION WAS A DISCLOSED BANK ACCOUNT WHICH WAS DISCLOSED BY THE ASSESS EE IN ITS REGULAR RETURN OF INCOME. FURTHER, EVEN WHEN THE VIEW OF T HE LOWER AUTHORITIES IS ACCEPTED, THEN ALSO WE FIND NO JUSTIFICATION IN MAKING ADDITION OF ENTIRE DEPOSIT DURING THE YEAR AS INCOME OF THE ASSESSEE BECA USE THERE WERE ALSO REGULAR WITHDRAWAL ON INTERVAL FROM THE SAID BANK ACC OUNT AND NO REASON COULD BE GIVEN BY THE REVENUE AS TO WHY SUBSEQUENT DEPOS ITS IN THE SAID BANK ACCOUNT COULD NOT HAVE BEEN MADE OUT OF EARLIER WI THDRAWAL FROM THE VERY SAME BANK ACCOUNT. WE FURTHER FIND THAT THE AS SESSEE HAS FILED AFFIDAVITS OF FOUR PERSONS BEFORE THE COMMISSIONER O F INCOME TAX (APPEALS), COPIES OF WHICH WERE ALSO FILED BEFORE US WHEREIN THO SE PERSONS HAVE ITA NO. 842/AHD/201 2 SHRI JITENDRA L. TANDEL, VALSAD . AY 2008-0 9 - 5 - SOLEMNLY AFFIRMED THAT THEY WERE ENGAGED IN FISHING BUSI NESS AND THEY SOLD THEIR FISHES THROUGH THE ASSESSEE AND THE ASSESSEE, A FTER DEDUCTING COMMISSION AT THE RATE OF 5% , PAID BALANCE AMOUNT TO THEM AS AND WHEN THEY NEEDED THE AMOUNT. WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT FOUND ANY DEFECT IN THE ABOVE AFFIDA VITS AND IN FACT THE COMMISSIONER OF INCOME TAX (APPEALS) IS FULLY SILENT IN RESPECT OF THESE AFFIDAVITS. IN OUR CONSIDERED VIEW, THE ORDER SO FAR I GNORING THE MATERIAL AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE WITHOUT GIVIN G ANY REASON AND WHEN SUCH EVIDENCES ARE RELEVANT, THEN SUCH AN ORDER CANNOT BE SUSTAINED. WE FURTHER FIND THAT THOUGH THE ASSESSING OFFICER HAS STATED IN THE ORDER OF ASSESSMENT THAT THERE WERE DISCREPANCIES IN THE CASH BOOK MAINTAINED BY THE ASSESSEE AND BANK STATEMENT BUT COULD NOT POINT OUT ANY SPECIFIC DISCREPANCIES IN THE ORDER OF ASSESSMENT. THUS, SUCH UNSUBSTANTIATED REMARK OF THE ASSESSING OFFICER CANNOT BE UPHELD. IN OUR CONSIDERED VIEW, AS SALE PROCEEDS ARE RECEIVED BY THE COMMISSION AGENT W HO SELLS GOODS ON BEHALF OF OTHERS, THERE IS NO ABNORMALITY IN HIS DEPOSI TING SUCH SALE PROCEEDS BY THE COMMISSION AGENT IN HIS BANK ACCOUNT. THUS, CO NSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ADDITION WAS MADE MERELY BY REJECTING A PLAUSIBLE EXPLANATION OF THE AS SESSEE. THEREFORE THE ADDITION WAS MADE OF RS 11,59,000/- CANNOT BE SUSTAINE D. WE, THEREFORE, DELETE THE ADDITION OF RS 11,59,000/- AND ALLOW THE A PPEAL OF THE ASSESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 17 TH OF OCTOBER, 2014 AT AHMEDABAD. SD/- SD/- ( KUL BHARAT ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 17/10/2014 GHANSHYAM MAURYA ITA NO. 842/AHD/201 2 SHRI JITENDRA L. TANDEL, VALSAD . AY 2008-0 9 - 6 - TRUE COPY ( ) *%$+, -,.$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A)-III, AHMEDABAD 5. $%& '' , , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. ( ' / BY ORDER, // !0 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD