ACIT, Circle-3(1), Asansol, Asansol V. Rabi Lochan Deogharia, Burdwan

ITA 848/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6158 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE CIT LD
• Assessee Lawyers: T VARKEY J M
• Section: 40A(3); 143(3); 133(6)

Judgement Text

1 ITA NO. 848/KOL/2017 RABI LOCHAN DEOGHARIA IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D, KOLKATA (BEFORE SHRI ABY. T. VARKEY, J.M. & DR.A.L.SAINI, A.M.) ITA NO. 848/KOL/2017 : A.Y : 2010-11 A.C.I.T, CIRCLE-3(1), ASANSOL VS RABI LOCHAN DEOGHARIA PAN: ACWPD 9881C (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI: ARINDAM BHATTACHARJEE, ADDL. CIT, LD.DR ASSESSEE BY : SHRI ARVIND AGARWAL, ADVOCATE, LD.AR DATE OF HEARING : 22-05-2018 DATE OF PRONOUNCEMENT :- 18-07-2018 ORDER PER DR. A.L. SAINI, A.M .: BY WAY OF THIS APPEAL, THE REVENUE HAS CHALLENGED THE CORRECTNESS OF THE ORDER DATED 27-02-2017, PASSED BY THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), ASANSOL, IN THE MATTER OF ASSESSMENT FRAMED U/S. 143(3) R.W.S 264 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2010-11. 2. THE GRIEVANCES RAISED BY THE REVENUE ARE AS FOLLOWS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS JUSTIFIED BY HOLDING THAT WITHDRAWAL OF CASH THROUGH BEARER CHEQUES FROM DIFFERENT BANK ACCOUNTS OF THE ASSESSEE BY DIFFERENT PERSONS ARE NOT A VIOLATION OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY, SUBSTITUTE, DELETE AND/ OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING. 2 ITA NO. 848/KOL/2017 RABI LOCHAN DEOGHARIA 3. THE BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE FILED HIS RETURN OF INCOME ON 07/10/2010 DISCLOSING A TOTAL INCOME TO THE TUNE OF RS.11,03,820/-. THE ASSESSEE WAS ENGAGED IN TRANSPORTING CONTRACT BUSINESS DURING THE YEAR UNDER APPEAL. THE ASSESSEE`S CASE WAS SELECTED FOR SCRUTINY U/S. 143(2) OF THE ACT. THE AO COMPLETED THE ASSESSMENT ON 17/01/2013 U/S. 143(3) OF THE ACT, AT ASSESSED INCOME TO THE TUNE OF RS. 96,24,510/- . 4. ON BEING AGGRIEVED BY SUCH ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT-(A), ASANSOL ON 19/02/2013 AND THEN SUBSEQUENTLY, WITHDREW THE SAID APPEAL FROM THE LD. CIT(A). THEREAFTER, THE ASSESSEE FILED REVISION PETITION U/S. 264 OF THE ACT BEFORE THE LD. CIT, ASANSOL ON 14/05/2013. THE LD. CIT, ASANSOL PASSED ORDER U/S. 264 OF THE ACT ON 04/09/2013 WITH DIRECTION TO THE AO TO VERIFY THE PAYMENTS MADE TO TRANSPORTERS IN CONTRAVENTION OF SECTION 40A(3) I.E THE AMOUNT PAID IN CASH IN VIOLATION OF PRESCRIBED LIMIT OF SECTION 40A(3) OF THE ACT. 5. WHILE GIVING APPEAL EFFECT TO THE ORDER PASSED BY THE LD. CIT U/S. 264 OF THE ACT, THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT TO UNITED BANK OF INDIA, BARAKAR BRANCH TO CONFIRM CERTAIN TRANSACTIONS BY WHICH THE ASSESSEE HAS WITHDRAWN CASH THROUGH VARIOUS PERSONS. THE ASSESSEE HAS ISSUED BEARER CHEQUES TO VARIOUS PERSONS FOR PAYMENT OF TRANSPORTATION CHARGES. THOSE PERSONS TO WHOM THE BEARER CHEQUES WERE ISSUED, THEY RETURNED THE CASH BACK TO ASSESSEE AND OUT OF CASH SO WITHDRAWN, THE ASSESSEE PAID TRANSPORTATION CHARGES TO THE RESPECTIVE VEHICLE HOLDERS. IN COMPLIANCE OF SAID NOTICE ISSUED U/S. 133(6) OF THE ACT, THE UNITED BANK OF INDIA, BARAKAR BRANCH FURNISHED INFORMATION. ON EXAMINATION OF THE INFORMATION RECEIVED FROM SAID UNITED BANK, BARAKAR BRANCH ON 19-01-2015, IT WAS REVEALED THAT AN AMOUNT OF RS.18,49,340/- WAS PAID BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUE 3 ITA NO. 848/KOL/2017 RABI LOCHAN DEOGHARIA AND THE SAME WAS ALREADY CONSIDERED DURING ASSESSMENT ORDER U/S. 143(3) OF THE ACT DATED 17/01/2013. THE AO FURTHER ISSUED A NOTICE U/S. 133(6) OF THE ACT TO INDIAN OVERSEAS BANK, ASANSOL BRANCH TO VERIFY THE TRANSACTION MADE BY THE ASSESSEE DURING THE ACCOUNTING PERIOD 2009-10. IN COMPLIANCE OF THE SAID NOTICE, INDIAN OVERSEAS BANK, ASANSOL BRANCH STATED AS FOLLOWS: WE HEREBY CONFIRMED THAT AS PER YOUR ENCLOSED SHEET OF THE TRANSACTION OF THE SAID ACCOUNT IS CORRECT AS PER OUR RECORD. TO VERIFY THE ABOVE, THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ON 21/01/2015 TO EXPLAIN THE TOTAL AMOUNT OF (RS.15,57,405 + RS. 69,63,283) = RS.85,20,688/-. THE ASSESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE, THEREFORE, THE AO MADE THE ADDITION OF RS.85,20,688/- U/S. 40A(3) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE. 6. AGGRIEVED BY THE STAND SO TAKEN BY THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT-A, WHO HAS DELETED THE ADDITION MADE BY THE AO. AGGRIEVED BY THE ORDER OF LD CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD. DR OF THE REVENUE DID NOT HAVE MUCH TO SAY, BUT NEVERTHELESS RELIED ON THE ORDER OF THE ASSESSING OFFICER. WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE HAS DEFENDED THE ORDER PASSED BY THE LD. CIT(A). 8. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT IN ORDER TO GAIN CONFIDENCE OF THE VEHICLE 4 ITA NO. 848/KOL/2017 RABI LOCHAN DEOGHARIA OWNERS THE ASSESSEE USED TO ISSUE BEARER CHEQUES AND THEY IN TURN, USED TO WITHDRAW THE MONEY AND USED TO HANDOVER THE SAID MONEY TO THE ASSESSEE. OUT OF CASH SO WITHDRAWN, THE ASSESSEE USED TO PAY TRANSPORTATION CHARGES, WHICH IS BELOW RS.20,000/- IN EACH CASE, AS EVIDENT FROM THE LEDGER ACCOUNT FILED BY THE COUNSEL FOR THE ASSESSEE, BEFORE THE BENCH. WE NOTE THAT ON PERUSAL OF THE REMAND REPORT, THE A.O HAS DEPUTED THE INSPECTOR FOR MAKING FIELD ENQUIRY WITH RESPECT TO THE CLAIM OF THE ASSESSEE THAT BEARER CHEQUES REPRESENTED CASH WITHDRAWAL FROM BANKS, THROUGH DIFFERENCE PERSONS, WHICH WERE DULY RECORDED IN THE CASH BOOK OF THE ASSESSEE AND THAT THEY DID NOT REPRESENT ANY PAYMENT DIRECTLY TO THE TRANSPORTERS AS CONSIDERED BY THE A.O. IN THE ASSESSMENT FRAMED IN RESPONSE TO THE SET ASIDE PROCEEDINGS U/S 264 OF THE ACT. OUT OF THE TOTAL 22 PARTIES, THE INSPECTOR DEPUTED BY THE A.O. FOR VERIFYING THE INFORMATION, COULD CONTACT AND ENQUIRE FROM 16 PARTIES WHO ADMITTED THAT THEY USED TO WITHDRAW CASH FROM THE BANK ON BEHALF OF THE ASSESSEE THROUGH BEARER CHEQUES. IT HAS BEEN CATEGORICALLY ADMITTED BY THESE 16 PEOPLE, AS CONFIRMED IN THE INSPECTOR'S REPORT, THAT THEY USED TO WITHDRAW THE CASH FROM THE BANK AND RETURN IT TO THE ASSESSEE. THE A.O.IN HIS REMAND REPORT HAS CONFIRMED THE SAID CONTENTION WHICH IS REPRODUCED BELOW: THE CLAIM OF THE ASSESSEE THAT THE CASH WITHDRAWAL THROUGH BEARER CHEQUES FROM HIS BANK A/C BY DIFFERENT PERSONS HAS DULY BEEN REFLECTED IN CASH BOOK FOR THE YEAR UNDER CONSIDERATION, HAS BEEN VERIFIED FROM CASH BOOK. THE ASSESSEE DURING THE COURSE OF HEARING PRODUCED THE CASH BOOK & BANK BOOK AND AFTER PERUSAL OF THE SAME IT HAS BEEN FOUND THAT IMPUGNED CASH WITHDRAWAL THROUGH BEARER CHEQUES HAVE DULY BE REFLECTED IN THE DEBIT SIDE OF ASSESSEES CASH BOOK FOR THE A. Y. 2010-11. 5 ITA NO. 848/KOL/2017 RABI LOCHAN DEOGHARIA IT IS ABUNDANTLY CLEAR FROM THE ABOVE REMAND REPORT THAT THE CONTENTION OF THE ASSESSEE THAT CASH WAS WITHDRAWN AND RECORDED IN THE CASH BOOK HAS ALSO BEEN CONFIRMED BY THE A.O. AFTER MAKING PROPER FIELD ENQUIRY. HOWEVER THE A.O. IN THE REMAND REPORT HAS REPORTED THAT FIVE PERSONS COULD NOT BE LOCATED BY THE INSPECTOR DURING FIELD ENQUIRY. MOREOVER, IT IS ALSO REPORTED THAT SHRI NARESH PANDEY HAD LEFT THE PLACE LONG TIME BACK THEREFORE HIS CONFIRMATION COULD NOT BE OBTAINED. IN HIS REJOINDER TO THE REMAND REPORT THE COUNSEL OF THE ASSESSEE HAS REITERATED THE FACT BEFORE LD CIT(A) THAT THE A.O HAS VERIFIED THE CASH BOOK AND HAS CONFIRMED THE CONTENTION OF THE ASSESSEE. AS REGARDS THE FIVE PERSONS WHO COULD NOT BE LOCATED IT HAS BEEN SUBMITTED BY THE COUNSEL THAT THE ISSUE RELATES TO FINANCIAL YEAR 2009-10 AND THE SPORT ENQUIRY WAS MADE BY THE INSPECTOR IN F.Y. 2015-16, HENCE IT IS QUITE POSSIBLE THAT SOME OF THESE PERSONS COULD HAVE RELOCATED TO SOME OTHER ADDRESS. WE NOTE THAT THE A.O. HAS VERIFIED THE CASH BOOK AND THE LEDGER ACCOUNTS OF THE ASSESSEE WITH RESPECT TO PAYMENTS MADE TO TRANSPORTERS. THE A.O. HAS NOT POINTED OUT FROM THE LEDGER ACCOUNTS ANY SPECIFIC INSTANCE OF VIOLATION OF SEC. 40A(3) I.E ANY PAYMENT EXCEEDING RS. 20,000/- MADE TO A TRANSPORTER. THE BOOKS OF ACCOUNTS HAVE BEEN AUDITED U/S 44AB OF THE ACT AND NO SUCH INSTANCE OF VIOLATION OF SECTION 40A(3) HAS BEEN REPORTED THEREIN. IT HAS BEEN CONFIRMED BY SIXTEEN PARTIES THAT CASH WITHDRAWN THROUGH BEARER CHEQUES WERE RETURNED TO THE ASSESSEE WHICH WAS DULY RECORDED IN THE CASH BOOK. THIS CONTENTION HAS BEEN VERIFIED AND CONFIRMED BY THE A.O. MOREOVER IT IS ALSO CONFIRMED THAT ONE PERSON HAD LEFT THE PLACE. THEREFORE, MERELY BECAUSE FIVE PARTIES COULD NOT BE LOCATED BY THE INSPECTOR ON SPOT ENQUIRY CONDUCTED ON 08/06/2015 AND 12/06/2015, ALMOST FIVE YEARS AFTER THE TRANSACTIONS TOOK PLACE, AN ADVERSE INFERENCE CANNOT BE DRAWN. MOREOVER CASH WITHDRAWN BY THESE FIVE PARTIES WERE ALSO DULY RECORDED IN THE CASH BOOK ON WHICH NO ADVERSE COMMENTS HAVE BEEN MADE IN THE REMAND REPORT. THAT BEING SO, WE DECLINE TO INTERFERE IN THE 6 ITA NO. 848/KOL/2017 RABI LOCHAN DEOGHARIA ORDER PASSED BY THE LD CIT(A), HIS ORDER ON THIS ISSUE IS HEREBY UPHELD AND GROUNDS OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-07-2018 SD/- SD/- ( ABY. T. VARKEY ) (A. L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18-07-2018 **PRADIP (SR.PS) COPY OF THE ORDER FORWARDED TO: 1. DEPARTMENT: THE ACIT, CIRCLE-3(1), ASANSOL, PARMAR BUILDING, 54 G.T ROAD (W), ASANSOL-713304. 2 ASSESSEE: SHRI RABI LOCHAN DEOGHARIA, VILL- SABANPUR, P.O SALANPUR, DIST; BURDWAN-713359. 3. THE CIT- 4. THE CIT(A)- 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, SR.PS, H.O.O, ITAT, KOLKATA