Mahendra D. Uttekar, Pune V. Income-tax Officer, Ward - 13 (4), Pune

ITA 856/PUN/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9514 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-11-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 03-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SACHIN Y JAWALE
• Keywords: Unexplained expenditure; Salary income; Transactions in derivatives
• Section: 69C; 69A

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.856/PUN/2019 / ASSESSMENT YEAR : 2010-11 MAHENDRA D. UTTEKAR, RAMNAGAR, SURVEY NO.14, WARD NO.2, YERWADA, PUNE-411006. PAN : AARPU2120L . /APPELLANT VS. ITO, WARD-13(4), PUNE. . / RESPONDENT / APPELLANT BY : SHRI SUHAS BORA / RESPONDENT BY : SHRI SACHIN Y. JAWALE / DATE OF HEARING : 19.12.2019 / DATE OF PRONOUNCEMENT: 31.12.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-5, PUNE DATED 25.03.2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION MADE BY A.O. U/S 69A OF THE ACT WITHOUT ASSIGNING ANY VALID REASONS. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,00,000/- AGAINST THE CASH DEPOSITS MADE TO THE BANK ACCOUNT U/S 69A OF THE ACT WITHOUT CONSIDERING THE EXPLANATION OF THE APPELLANT THAT IT IS A RECYCLED AMOUNT WHICH IS BEING DEPOSITED AND WITHOUT TAKING INTO ACCOUNT THE INCOME DISCLOSED BY THE APPELLANT IN THE RETURN OF INCOME. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A SALARIED EMPLOYEE AND EARNED SALARY INCOME OF RS.1,31,740/- THIS YEAR. THE ITA NO.856/PUN/2019 - 2 - ASSESSEE ALSO EARNED RENTAL INCOME AMOUNTING TO RS.62,900/- PER YEAR. IT APPEARS THAT THE ASSESSEE ALSO ENTERED INTO A COMMODITIES TRANSACTION AND EARNED INCOME OF THE SAID TRANSACTION. WITH THIS BACKGROUND OF FACTS, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE CASH DEPOSITS OF RS.2,69,500/- IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT, AS PER DISCUSSION GIVEN IN PARA 3 AND ITS SUB-PARAGRAPHS OF THE ASSESSMENT ORDER AND MADE ADDITIONS. FOR THE SAKE OF COMPLETENESS THE RELEVANT PORTION OF PARA 3 OF THE ASSESSMENT ORDER IS EXTRACTED HEREUNDER :- 3. . A. THE ASSESSEE HAS ENTERED INTO COMMODITY TRANSACTIONS ON VARIOUS DATES DURING THE YEAR. HOWEVER, HE HAS NOT PRODUCED ANY DOCUMENT IN RESPECT OF THE SAME. ON PERUSAL OF HIS BANK STATEMENT, IT IS FOUND THAT THE ASSESSEE HAS RECEIVED AMOUNT OF RS. 1,31,740/- FROM COMMODITY MARKET. THE SAME IS TREATED AS PROFITS ARISING FROM COMMODITY TRANSACTIONS AND ADDED TO TOTAL INCOME. INITIATE PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME. B. THE ASSESSEE HAS DEPOSITED CASH OF RS. 269,500/- DURING THE YEAR INTO HIS BANK ACCOUNTS. HOWEVER, THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION FOR THE SAME. RS. 269,500/ - IS ADDED TO THE TOTAL INCOME U/S. 69C OF THE INCOME-TAX ACT, 1961 AS UNEXPLAINED MONEY. INITIATE PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME. C. THE ASSESSEE HAS RECEIVED INTEREST AMOUNT OF RS. 664/- IN HIS SAVING BANK ACCOUNT. HOWEVER, HE HAS NOT OFFERED THE SAME IN HIS INCOME-TAX RETURN. THE SAME IS ADDED TO THE TOTAL INCOME. INITIATE PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME. 4. THE CIT(A), AS PER DISCUSSION GIVEN IN PARA 10.1 AND 10.2 OF HIS ORDER, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS, THE SAID PARA 10.1 AND 10.2 OF THE CIT(A)S ORDER ARE EXTRACTED HEREUNDER :- 10.1 GROUND NO.3 IN THE GROUND OF APPEAL RELATES TO THE ADDITION U/S.69C ON ACCOUNT OF CASH DEPOSITED OF RS.269,500/- DURING THE YEAR INTO THE APPELLANT'S BANK A/C. THE ASSESSING OFFICER HAS TREATED THE SAME AS UNEXPLAINED MONEY AND ADDED IT U/S.69C OF THE I.T. ACT. IN HIS SUBMISSIONS BEFORE ME, THE AUTHORIZED REPRESENTATIVE HAS STATED THAT DURING THE YEAR ITA NO.856/PUN/2019 - 3 - UNDER CONSIDERATION, THE TOTAL INCOME OF RS. 1,60,100/- HAS BEEN FILED IN THE RETURN OF INCOME WHICH CONSISTS OF SALARY INCOME, RENTAL INCOME AND OTHER MISCELLANEOUS INCOME. AN AMOUNT OF RS. 1,01,000/- IS ALSO CLAIMED TO BE LOANS AND ADVANCES RECEIVED FROM FRIENDS AND RELATIVES. IT IS STATED THAT THE APPELLANT HAS DEPOSITED THE CASH OF RS.2,69,500/- ON DIFFERENT DATES IN HIS BANK OF INDIA SAVINGS A/C FROM THE ABOVE MENTIONED SOURCES. SUBSEQUENTLY, WITHDRAWAL HAVE BEEN MADE TO DEPOSIT CERTAIN AMOUNT INTO AXIS BANK. IT IS ALSO STATED THAT THE ASSESSING OFFICER HAS INCORRECTLY MADE THE ADDITION U/S.69C OF THE ACT WHICH REFERS TO UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE. HOWEVER, IN THE INSTANT CASE, THERE IS NO SUCH EXPENDITURE AND THE ADDITION, BEING WRONGLY MADE DESERVES TO BE DELETED. 10.2 ON GOING THROUGH THE ABOVE PLEA AS WELL AS THE RECEIPT AND PAYMENT A/C. AND THE BANK A/CS. IT IS SEEN THAT THE APPELLANT HAD RECEIVED TOTAL INCOME OF RS.1,64,847/- FROM THE SOURCES MENTIONED. EVEN, IF THE LOANS AND ADVANCES ARE NOT CONSIDERED, IT APPEARS THAT HE HAD ENOUGH MONEY TO BE DEPOSITED WHICH COULD EXPLAIN CERTAIN CASH CREDITS IN THE BANK A/CS. THE ASSESSING OFFICER WITHOUT CARRYING OUT ANY FURTHER INVESTIGATION HAS ADDED THE ENTIRE CASH CREDITED AS THE APPELLANT'S INCOME. ON THE OTHER HAND, THE APPELLANT ALSO IN THE COURSE OF PROCEEDINGS BEFORE ME HAS NOT BEEN ABLE TO SATISFACTORILY LINK THE WITHDRAWALS AND INCOME WITH THE CASH DEPOSITED IN HIS ACCOUNT. SINCE AS STATED ABOVE, HE HAS RECEIPTS OF RS.1,64,847/- FROM VARIOUS SOURCES, IT IS HELD THAT OUT OF THE TOTAL AMOUNT OF RS.2,69,500/-, A PART OF IT COULD BE EXPLAINED AS BEING SOURCED FROM ABOVE. AS NO COMPLETE EXPLANATION HAS BEEN OFFERED REGARDING THE TOTAL CASH DEPOSITS, EVEN GIVING THE BENEFIT OF INCOMES EXPLAINED, I HOLD THAT AN AMOUNT OF RS.1,00,000/- COULD NOT BE EXPLAINED BY THE APPELLANT, THE SAME DESERVES TO BE ADDED AS UNEXPLAINED MONEY U/S.69A OF THE I.T ACT, 1961. THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO GIVE RELIEF OF THE BALANCE AMOUNT. ACCORDINGLY, GROUND NO. 1, 2 AND 3 ARE PARTLY ALLOWED. 5. AGGRIEVED WITH THE SAME, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE ABOVE EXTRACTED GROUNDS. 6. BEFORE ME, AT THE OUTSET, WITHOUT GOING INTO THE MERITS, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SMALL TIME TAXPAYER AND THE ADDITION OF RS.1,00,000/- IS NOT APPROPRIATE GIVING ABOVE BACKGROUND OF THE FACTS OF THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT CONFIRMING OF AD- HOC DISALLOWANCE OF RS.50,000/- SHOULD BE MET THE ENDS OF JUSTICE. 7. ON HEARING BOTH THE SIDES AND APPRECIATING THE ABOVE FACTS, I AM OF THE OPINION THAT THE ADDITION OF RS.50,000/- ONLY SHOULD BE RESTRICTED ON ITA NO.856/PUN/2019 - 4 - AD-HOC BASIS IN PLACE OF RS.1,00,000/-. IN ANY CASE, CIT(A) OPTED FOR ADHOCISM ONLY. THE ASSESSING OFFICER IS ORDERED ACCORDINGLY. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 31 ST DAY OF DECEMBER, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 31 ST DECEMBER, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-5, PUNE; 4. THE PR. CIT-4, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE