Sh.Amrik Singh, Ropar V. The Income Tax Officer, Ropar

ITA 847/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6681 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO 847/CHD/2016 ASSESSMENT YEAR : 2011-12 SHRI AMRIK SINGH, VS. THE ITO, S/O SHRI GURNAM SINGH, WARD 22), VILLAGE KATLI, ROPAR. ROPAR. PAN NO. AXYPS4740G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 10.08.2017 DATE OF PRONOUNCEMENT : 30.10.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 26.04.2016 OF LD. CIT (APPE ALS)-I CHANDIGARH PERTAINING TO 2011-12 ASSESSMENT YEAR. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESS EE DECLARED INCOME OF RS. 1,96,540/- WHICH WAS SELECTED FOR SCRUTINY AFTER BEING P ROCESSED U/S 143(1) OF THE ACT. NOTICES WERE ISSUED U/S 143(2) AND 142(1 ) WHEREIN THE ASSESSEE WAS REQUIRED TO EXPLAIN THE DEPOSITS OF RS. 17,18 ,540/- MAINTAINED IN HIS SAVING BANK ACCOUNT WITH AXIS BANK. THE ASSESSEE, IN RESPONSE THERETO, GAVE THE FOLLOWING EXPLANATION : 'THAT THE ASSESSEE IS A DEVELOPMENT OFFICER IN SBI LIFE INSURANCE CO. LTD AND USED TO COLLECT FUNDS FROM THE CLIENTS WHO WANTED TO GET TH EMSELVES INSURED AND DEPOSITED IN HIS BANK ACCOUNT. LATELY THE LIFE INSURANCE PREMIU MS WERE DEPOSITED IN THEIR ACCOUNTS BY DEBITING THIS ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS JUST THE TEMPORARY HOLDER /CUSTODIAN OF THE MONEY FOR A FEW DAYS. INSTEAD O F KEEPING THE MONEY IN HAND OR AT HOUSE HE USED TO DEPOSIT THE SAME IN HIS SAVING BAN K ACCOUNT AND THE SAME WAS DEPOSITED WHEN THE PAPERS OF THE POLICY WERE READY. COPY OF THE DETAILED BANK ACCOUNT IS ATTACHED, WHICH SHOWS THAT THE SAME IS DEBITED. COMPANY DOES NOT ACCEPT CASH. EITHER THE CHEQUE/DRAFT SHOULD BE OF THE PERSON BEI NG INSURED OR THIS IS THE WAY THAT THE PERSON APPROACHING THEM FOR BUSINESS TAKES CASH FRO M THEM DEPOSITED IN THEIR ACCOUNT AND TRANSFERS THE SAME IN THE COMPANY'S NAME TO GET THE PERSON INSURED FROM WHOM THE MONEY WAS RECEIVED IN CASH '. 3. APART FROM THAT, FOLLOWING SUBMISSIONS WERE ALSO ADVANCED : MONEY RECEIVED AS CONTRIBUTIONS TOWARDS INSURANCE P REMIUM WAS FIRST DEPOSITED IN HIS BANK ACCOUNT AND SUBSEQUENTLY TRANSFERRED TO THE AC COUNTS OF MS. SUSHMA SIKKA A BRANCH AGENT AND SH. DEWAN CHAND, SECURITY GUARD OF THE B ANK. THE PAYMENT OF POLICY PREMIUMS OF THE CLIENTS WAS ALSO DEPOSITED THROUGH THESE PERSONS AND THROUGH THEIR BANK ACCOUNTS. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE USED ITA 847/CHD/2016 A.Y. 2011-12 PAGE 2 OF 3 TO TRANSFER THE AMOUNT FROM HIS BANK ACCOUNT TO THE BANK ACCOUNTS OF ABOVE PERSONS WHO IN TURN DEPOSITED THE PREMIUM AMOUNT WITH SBI L IFE INSURANCE. THE COUNSEL OF THE ASSESSEE FURNISHED THE DETAILS OF PREMIUMS PAID T HROUGH THE ASSESSEE ALONG WITH A COPY OF A LIST (UM CODE LIST) WHICH SHOWED THAT AN AMOUNT OF RS. RS. 27.34 LACS WAS PAID AS PREMIUM. OUT OF THIS AMOUNT, ABOUT 8.70 LA CS PREMIUMS WAS PAID DIRECTLY BY CLIENTS THROUGH CHEQUES, IT WAS FURTHER CLAIMED THA T OUT OF THE BALANCE AMOUNT, SOME WAS PAID THROUGH PAY ORDERS/DEMAND DRAFTS BY CLIENT S. AND THE BALANCE WAS PAID THROUGH THE ASSESSEE AS WELL AS THESE TWO PERSONS M ENTIONED ABOVE THROUGH THEIR BANK ACCOUNTS. 3.1 THE AO, AS PER THE DETAILS SET OUT IN PAGE 3 OF HIS O RDER CARRIED OUT A RECONCILIATION WITH THE STATEMENTS AND BANK ACCOUNT AND CONCLUDED THAT FOR THE SPECIFIC TEN DEPOSITS FROM 17.05.2010 TO 11.11.2010 TOTA LING TO RS. 4,26,800/- THE ASSESSEE COULD NOT ESTABLISH SOURCE OF CAS H DEPOSITS. THE MONEY, IT WAS NOTED BY HIM, HAS NEITHER BEEN TRANSFERRED TO STATE BANK OF INDIA, LIFE INSURANCE OR TO THE ACCOUNTS OF MRS. SUSHMA S IKKA OR SHRI DEWAN CHAND. THE SOURCE, IT WAS CONCLUDED, REMAINED UNEXPLAINED LEADING TO THE ADDITION OF THE SAID AMOUNT. THE ADDITION WAS SUSTAINED IN APPEAL BY THE CIT(A). 3.2 THE LD. AR, INVITING ATTENTION TO THE PAPER BOOK FILED, SUB MITTED THAT THESE DOCUMENTS AND WRITTEN SUBMISSIONS WERE AVAILABLE BE FORE THE CIT(A) AND THE AO. REFERRING TO PAGE 1 CONSISTING OF WRITTEN SUB MISSIONS BEFORE CIT(A), IT WAS SUBMITTED, THAT THE ASSESSEE WAS INSURANCE DEVELOPMENT & PROMOTION OFFICER IN STATE BANK OF INDIA LIFE INSURANCE COMP ANY IN TERMS OF THE REQUIREMENT OF HIS JOB. HE USED TO PERSUADE PEOPLE FROM VILLAGES AND SURROUNDING AREAS AND COLLECT THE PREMIUM IN CASH AND DE POSIT IT IN HIS SAVING BANK ACCOUNT AND HAD GIVEN THE FACILITY OF ISSUING DR AFTS IN FAVOUR OF INSURANCE COMPANY FREE OF CHARGES. THE AO, IT WAS SUBMITTED, HAS INC LUDED PART OF THE PREMIUM OF THE CLIENTS (CUSTOMERS OF STATE B ANK OF INDIA LIFE INSURANCE) THE MONEY DEPOSITED IN THE ACCOUNT WAS USED ONLY AS A C ONDUIT FOR THESE PAYMENTS. INVITING ATTENTION TO PAPER BOOK PAGES 6 TO 10 AND 11 TO 13, IT WAS HIS SUBMISSION THAT THE ASSESSEE HAD SUBMITTED THAT HE WAS HAVING TWO SEPARATE SAVING BANK ACCOUNTS IN AXIS BANK, VILLAGE KATLI, PO & TEHSIL ROPAR I.E. ACCOUNT NO. 909010040667132 AND 85010100101707 AND THE AMOUNTS, IT WAS SUBMITTED, ARE EXPLAINABLE FROM THESE TWO ACCOUNTS. IT WAS HIS SU BMISSION THAT THE TAX AUTHORITIES HAVE ONLY TAKEN INTO CONSIDERATION ONE SB ACCOUNT D ESPITE THE FACT THAT COPIES OF BOTH THE BANK STATEMENTS WERE MADE AVAILABLE TO THE AO AND THE CIT(A). IT WAS HIS SUBMISSION THAT IN THE FACTS OF THE PRESENT CASE , THE ASSESSEE COULD NOT BE REPRESENTED PROPERLY BEFORE THE TAX AUTHORITIES . IN THE CIRCUMSTANCES, IT WAS HIS PRAYER THAT SUBJECT TO VERIFICATION, RELIEF ALLOWABLE UNDER LAW MAY BE GRANTED AND IN THE ALTERNATE, THE MATTER MAY BE REMANDED TO THE A O. ITA 847/CHD/2016 A.Y. 2011-12 PAGE 3 OF 3 4. THE LD. SR.DR APPEARING ON BEHALF OF THE REVENUE, THOUGH PLACED RELIANCE ON THE ORDERS OF THE TAX AUTHORITIES, HOWEVER, HA D NO OBJECTION IF CORRECT FACTS ARE TAKEN INTO CONSIDERATION BEFORE ARRIVING AT A CONCLUSION BUT FOR THE SAID PURPOSES, IT WAS HIS SUBMISSION THAT THE MATT ER MAY BE REMANDED TO THE AO. 5. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. ON CONSIDERING THE SUBMISSIONS OF THE PARTIES BEFO RE THE BENCH AS HIGHLIGHTED HEREIN ABOVE, I AM OF THE VIEW THAT IT WOULD BE IN THE INTEREST OF SUBSTANTIAL JUSTICE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE FILE OF THE AO TO CONSIDER WHETHER THE AMOUNT OF R S. 4,26,800/- CAN BE SAID TO HAVE BEEN EXPLAINED WHEN BOTH THE BANK ACCOUNT S ARE TAKEN INTO CONSIDERATION. KEEPING IN MIND THE FACT THAT THE AMOUNTS WERE STATED TO BE DEPOSITS OF PREMIUMS AND SALARY ACCOUNT AND CASH DEPOSIT S RECEIVED BY WAY OF PAYMENT TO THE INSURER. THE AO, ACCORDINGLY, SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONAB LE OPPORTUNITY OF BEING HEARD. IT IS HOPED THAT THE ASSESSEE IN ITS OWN INT EREST MAKES FULL AND PROPER COMPLIANCE BEFORE THE SAID AUTHORITY AND THE OPPO RTUNITY SO PROVIDED IS NOT ABUSED AS IN THE EVENTUALITY OF ABUSE OF THE SAME, THE AO WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER ON THE BASIS OF MATERIAL AVAILABLE ON REC ORD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER,2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.