ITO WD 21(2)(2), MUMBAI V. SURJITSINGH ATTARSINGH LAMBA, MUMBAI

ITA 8654/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79399 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 07-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 143(3); 142(1); 68; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI , BEFORE SHRI H.L.KARWA , PRESIDENT & SHRI B.R.BASKARAN, AM ITA NO. 8654 / MUM/20 1 0 ( ASSESSMENT YEAR : 200 7 - 0 8 ) ITO - 21(2)(2) , MUMBAI - 51 VS. SHRI SURJITSINGH ATTARSINGH LAMBA, NO.40, E - 3, BMC BLDG., RAWALI CAMP, GTB NAGAR, MUMBAI - 400 037 PAN/GIR NO. : A BDPL 2346 Q ( APPELLANT ) .. ( RESPONDENT ) SHRI PITAMBAR DAS , DR FOR REVENUE SHRI SURJITSINGH ATTARSINGH L AMBA - ASSESSEE PRESENT IN PERSON . DATE OF HEARING : 07/07/2014 DATE OF PRONOUNC EMENT : 09 / 07/ 2014 O R D E R PER B.R.BASKARAN ( A .M.) : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 9 - 9 - 2010 , PASSED BY LD CIT (A) - 32 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 200 7 - 0 8 . 2 . TH E REVENUE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN DELETING THE ADDITION OF RS. 15,83,150/ - MADE UNDER SECTION 68 OF THE ACT BY ADMITTING THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES . ITA NO.8654 /10 2 3 . SUCCINCT FACTS RELATE TO THE ABOVE SAID ISSUE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION UNDER THE NAME AND STYLE OF M/S RATAN TRANSPORT CO. HE FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME OF RS. 2,79,770/ - . THE RETURN W AS SELECTED FOR SCRUTINY AND A NOTICE U/S. 143(2) OF THE ACT DATED 18 - 9 - 2008 WAS SERVED UPON THE ASSESSEE. SINCE NOBODY ATTENDED ON THE DATE OF HEARING, THE ASSESSING OFFICER ISSUED A NOTICE U/S. 142(1) REQUIRING THE ASSESSEE TO APPEAR BEFORE HIM ALONG WITH CERTAIN DETAILS . SUBSEQUENTLY, THE AO GAVE ONE MORE OPPORTUNITY BY ISSUING ANOTHER NOTICE U/S. 142(1) OF THE ACT TO FILE DETAILS THAT WERE CALLED FOR IN THE EARLIER COMMUNICATIONS. THOUGH AN AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED ON THE DATE OF HEARING , YET HE SOUGHT ADJOURNMENT AND ACCORDINGLY THE CASE WAS ADJOURNED TO 31 - 8 - 2009 . SINCE THERE WAS NO COMPL IANCE ON THAT DATE, THE AO GAVE FINAL OPPORTUNITY , VIDE HIS LETTER DATED 6 - 11 - 2009 , WHEREIN HE CLEARLY MENTIONED THAT THE ASSESSMENT WILL BE COM PLETED EX - PARTE , IF THERE IS FAILURE TO COMPLY WITH THE REQUIREMENTS. HOWEVER, ON THAT DATE ALSO, THE ASSESSEE DID NOT APPEAR AND, HENCE, THE AO PROCEEDED TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT U/S. 144 OF THE ACT. AS PER AIR INFORMATION, TH E ASSESSEE HAD MADE CASH DEPOSIT S TO THE TUNE OF RS. 15,83,150/ - IN HIS BANK ACCOUNT MAINTAINED WITH M/S HDFC BANK LTD. THE AO ASSESSED THE SAME U/S. 68 OF THE ACT. 4 . IN THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT HE IS CARRYING ON THE TRANSPORT BUSINESS ALONE WITHOUT APPOINTING ANY SKILLED STAFF TO LOOK AFTER HIS MATTERS AND, HENCE, HE COULDNT PRODUCE THE DETAILS AND THE BOOKS OF ACCOUNTS BEFORE THE AO. THE SAID EXPLANATION OF THE ITA NO.8654 /10 3 ASSESSEE WAS FOUND TO BE REASONABLE BY THE LEARNED CIT(A) AND, H ENCE, HE PERMITTED THE ASSESSEE TO SUBMIT THE DETAILS OF LEDGER ACCOUNT AS AVAILABLE IN HIS BOOKS IN SUPPORT OF THE GROUNDS URGED BEFORE HIM. BEFORE THE LEARNED CIT(A) , THE ASSESSEE SUBMITTED THAT HE HAS BEEN RECEIVING THE TRANSPORT PROCEEDS IN THE FORM OF CHEQUES AS WELL AS IN THE FORM OF CASH . HE FURTHER SUBMITTED THAT THE CASH DEPOSIT S FOUND IN THE HDFC BANK ACCOUNT REPRESENTS THE TRANSPORT RECEIPTS RECEIVED BY HIM AND THEY HAVE BEEN DULY ACCOUNTED FOR IN THE CASH BOOK. IT WAS ALSO SUBMITTED THAT HE HAS RECEIVED TRANSPORT RECEIPTS TO THE EXTENT OF RS. 27.74 LAKHS , OUT OF WHICH A SUM OF RS. 17.33 LAKHS WAS RECEIVED BY WAY OF CA S H . IT WAS SUBMITTED THAT OUT OF THE ABOVE SAID CASH OF RS. 17.33 LAKHS, THE ASSESSEE HAS DEPOSITED A SUM OF RS. 15.83 LAKHS IN HIS BA NK ACCOUNT FROM TIME TO TIME AND THE SAID DEPOSITS HAVE BEEN DULY REFLECTED IN THE CASH BOOK ALSO. THE CIT(A) CONSIDERED THE CONTENTIONS OF THE ASSESSEE AND PERUSED THE BANK STATEMENT, CASH BOOK EXTRACT AND PROFIT AND LOSS ACCOUNT. ACCORDINGLY, LEARNED CIT (A) GAVE A FINDING THAT THE CASH DEPOSIT S MADE IN THE BANK ACCOUNT IS OUT OF THE FREIGHT CHARGES RECEIVED IN CASH AND THE SAID DEPOSITS HAVE DULY BEEN REFLECTED IN THE BOOKS OF ACCOUNT. HENCE, LEARNED CIT(A) HELD THAT THE ASSESSEE HAS PROVED THE SOURCE OF CASH DEPOSIT S FOUND IN THE BANK ACCOUNT AND ACCORDINGLY DELETED THE ADDITION OF RS. 15,83,150/ - . LEARNED CIT(A) ALSO EXPRESSED A VIEW THAT THE COPIES OF THE LEDGER EXTRACTS FILED BEFORE HIM DID NOT FALL IN THE CATEGORY OF ADDITIONAL EVIDENCE. 5 . BEING AGG RIEVED BY THE AFORESAID OBSERVATIONS OF THE LEARNED CIT(A), THE REVENUE IS IN APPEAL HERE BEFORE US. ITA NO.8654 /10 4 6 . BEFORE US, THE ASSESSEE APPEARED IN PERSON AND SUBMITTED THAT THE COUNSEL ENGAGED BY HIM HAS PASSED AWAY. HE FURTHER SUBMITTED THAT HE HAS FURNISHED ALL THE DETAILS BEFORE THE LEARNED CIT(A) AND THE FIRST APPELLATE AUTHORITY HAS GRANTED RELIEF AFTER DULY VERIFYING THOSE DOCUMENTS. 7 . PER CONTRA , LEARNED DR SUBMITTED THAT THE LEARNED CIT(A) HAS VIOLATED THE RULE 46A OF THE INCOME TAX RULES BY ADMITTIN G CERTAIN ADDITIONAL EVIDENCES WITHOUT CONFRONTING THE SAME WITH THE ASSESSING OFFICER. LEARNED DR, IN THIS REGARD PLACED RELIANCE ON THE FOLLOWING CASE LAWS AND SUBMITTED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE AO FOR CARRYING OUT NECE SSARY EXAMINATION : I) CIT VS. RANJIT KUMAR CHOUDHURY, [2007] 288 ITR 179 (GAU) ; II) ITO VS. RAJAN MANHAZI AYROORKAROT , [2012] 49 SOT 76 (MUM) 8 . WE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE RECORD. WE HAVE ALREADY NOTICED THAT THE ASSESSEE IS A TR ANSPORT OPERATOR AND HE HAS RECEIVED GROSS TRANSPORT RECEIPTS OF RS. 27.74 LAKHS DURING THE YEAR UNDER CONSIDERATION . FOR THE REASONS STATED BEFORE THE LEARNED CIT(A), THE ASSESSEE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER AND, HENCE, THE AO WAS CONSTRA INED TO PASS THE ASSESSMENT ORDER TO THE BEST OF HIS JUDGMENT U/S. 144 OF THE ACT. WHILE DOING SO, THE AO HAS ASSESSED THE AGGREGATE CASH DEPOSIT AMOUNT OF RS. 15,83,150/ - FOUND TO HAVE BEEN DEPOSITED IN THE HDFC BANK ACCOUNT. HOWEVER, ACCORDING TO THE ASSE SSEE THE SAID CASH DEPOSIT S FORM PART OF THE GROSS TRANSPORT RECEIPT S ITA NO.8654 /10 5 RECEIVED BY HIM AND FURTHER THE SAID DEPOSITS HAVE DULY BEEN RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY HIM. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAS FILED R ETURN OF INCOME DECLARING A TOTAL INCOME OF RS. 2,79,770/ - AND ACCORDING TO THE ASSESSEE THE SAME IS BASED UPON BOOKS OF ACCOUNT MAINTAINED BY HIM IN THE REGULAR COURSE. ACCORDING TO THE ASSESSEE THE RETURN OF INCOME FILED BY HIM IN THE IMMEDIATELY PRECEDIN G YEAR I.E. ASSESSMENT YEAR 2006 - 07 WAS ALSO SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT. WE NOTICE THAT THE AO APPEARS TO HAVE NOT TAKEN INTO ACCOUNT THE ASSESSMENT ORDER OF PRIOR YEAR WHILE COMPLETING THE PRESENT ASSESSM ENT TO THE BEST OF HIS JUDGMENT. IT IS A WELL SETTLED PROPOSITION THAT THE AO IN MAKING BEST JUDGMENT ASSESSMENT, SHOULD ARRIVE AT HIS CONCLUSION WITHOUT BIAS AND ON RATIONAL BASIS. H ENCE, WE FIND MERIT IN THE OBSERVATION OF THE LEARNED CIT(A) THAT THE AO, EVEN WHILE MAKING A BEST JUDGMENT ASSESSMENT, HAS TO APPLY HIS MIND ON THE BASIS OF OTHER MATERIAL AVAILABLE TO HIM INCLUDING EARLIER YEAR RETURNS. WE FURTHER NOTICE THAT THE ASSESSEE HAS FURNISHED ONLY LEDGER EXTRACTS OF BOOKS OF ACCOUNT REGULARLY MAINT AINED BY HIM IN ORDINARY COURSE IN ORDER TO SHOW THAT THE AMOUNT OF CASH DEPOSITS ARE DULY REFLECTED IN HIS BOOKS OF ACCOUNT. WE ALSO NOTICE THAT THE LEARNED CIT(A) HAS EXAMINED THOSE DOCUMENTS WITH THE BANK STATEMENT AND RECORDED A FINDING THAT THE CASH D EPOSIT S HAVE DULY BEEN RECORDED IN THE BOOKS OF ACCOUNT. UNDER THESE SET OF FACTS, IN OUR VIEW, IT WOULD BE AN EMPTY FORMALITY TO SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION , WHEN THE FIRST APPELLATE AUTHORITY HAS ALREADY REC ORDED A FINDING THAT THE DEPOSITS FOUND IN THE BOOKS OF ACCOUNT ITA NO.8654 /10 6 HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S. 68 OF THE ACT BY CONSIDE RING THE COPIES OF BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. UNDER THESE SET OF FACTS , IN OUR OPINION, IT CANNOT BE SAID THAT THE LEARNED CIT(A) HAS VIOLATED RULE 46A OF THE INCOME TAX RULES , SINCE THE FIRST APPELLATE AUTHORITY HAS CONSIDERED THE BOOKS OF ACCOUNT ONLY FOR GRANTING RELIEF TO THE ASSESSEE . 9 . RESULTANTLY , APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 /07/ 2014 . 09 /07/ 2014 SD/ - SD/ - ( ) ( H.L. KARWA ) ( ) ( B.R.BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED 09 / 07/ 2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBA I 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//