The Income Tax Officer, Ward-2 (2) (1), Rajkot V. Shri Rajesh Manaharbhai Dholakiya, Rajkot

ITA 89/RJT/2018

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9209 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Keywords: Additional evidence
• Section: 147; 148; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH VIRTUAL COURT] Before: Ms. Suchitra Kamble, Judicial Member And Shri Waseem Ahmed, Accountant Member The ITO, Ward-2(2)(1), Rajkot (Appellant) Vs Shri Rajesh Manharbhai Dholakiya, Panchvati-A, Complex, 2 nd Floor Manhar Plot, Street No. 4, Mangla Main Road, Rajkot PAN:AIPPD9149L (Respondent) Assessee by: None Revenue by: Shri Abhimanyu Singh Yadav, Sr. D.R. Date of hearing : 21-12-2023 Date of pronouncement : 10-01-2024 आदेश /ORDER PER : SUCHITRA KAMBLE, JUDICIAL MEMBER:- These two appeals filed are against the order dated 11- 01-2018 passed by CIT(A)-2, Rajkot for assessment year 2012- 13 & 2013-14. ITA Nos. 89 & 90/Rjt/2018 Assessment Years 2012-13 & 2013-14 I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 2 2. The grounds of appeal are as under:- ITA No. 89/Ahd/2018 A.Y. 2012-13 “1. The Ld. CIT(A)-2, Rajkot has erred in law and on facts in deleting the addition of Rs. 2,40,87,800/- and Rs. 64,305/- made by the Assessing Officer on account of cash deposits treated as unexplained income from undisclosed sources. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A)-2, Rajkot ought to have upheld the assessment order of the Assessing officer.” ITA No. 90/Ahd/2018 A.Y. 2013-14 “1. The Ld. CIT(A)-2, Rajkot has erred in law and on facts in deleting the addition of Rs. 2,18,33,273/- and Rs. 1,50,216/- made by the Assessing Officer on account of cash deposits treated as unexplained income from undisclosed sources. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A)-2, Rajkot ought to have upheld the assessment order of the Assessing officer.” 3. On inquiry by the DDIT Investigation, it was found that the assessee has deposited cash and cheques totaling to Rs. 2,40,87,800/- into bank account maintained with DBC Bank, Rajkot on various dates during the financial year 2011-12 and 2012-13. Consequently, the case was reopened u/s. 147 of the Income Tax Act, 1961 after recording the reasons for assessment year 2011-12 & 2012-13 and was served upon the I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 3 assessee. The assessee filed his return of income in response to notice u/s. 148 showing total income of Rs. 1,50,330/- on 21-08-2015 for assessment year 2012-13 and Rs. 1,65,150/- for assessment year 2013-14. The Assessing Officer observed that the assessee was an employee of Jay Nagnath Sales Corporation Proprietor Shri Ashish P. Bhadaliya and derived income of Rs. 97,500/- and also shown interest from saving bank account Rs. 170 and other income at Rs. 52,655/-. The details of bank account show that one contract was registered in the name of Shri Ashish Bhadaliya proprietor of Jay Nagnath Sales Corporation and therefore survey was carried out to verify the facts. During the survey, the statement of the assessee was recorded u/s. 131(IA) of the Act on 16-07-2013 in presence of Shri Ashish Bhadalia, proprietor of Jay Nagnath Sales Corporation and who had been proprietor of M/s. Jatin Nagam Traders. The assessee submitted that the said bank account was being used by Shri Ashish Bhadaliya which was admitted by Shri Ashih Bhadaliya during the recording of statement and suo moto disclosed Rs. 1,16,43922/- for financial year 2011-12 and 2012-13. The Assessing Officer after taking cognizance of the submissions of the assessee as well as the evidences made addition of Rs. 2,40,87,800/- as unexplained cash and cheque deposited into bank account and added to the total income on substantive basis as well as made addition of Rs. 64,305/- as unexplained cash and I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 4 cheque deposited into the bank account for assessment year 2012-13. For assessment year 2013-14, the Assessing Officer made addition of Rs. 2,18,33,273/- as unexplained cash and cheque deposited into bank account on substantive basis as well as Rs. 1,50,260/- as unexplained cash and cheque deposited into bank account. Both these additions for both the assessment years are on substantive basis. 4. Being aggrieved by the assessment orders, the assessee filed appeal before the ld. CIT(A). The CIT(A) allowed the appeal of the assessee for both the assessment years. 5. During the hearing, the matter was called out, none appeared on behalf of the assessee despite issuing notices. The service report in respect of assessee was filed by the ld. D.R. and the notice was duly served regarding the hearing before the Tribunal. Thus, the service is completed. It is found that the assessee through his A.R. Sonecha & Amlani, CA vide paper book dated 03-02-2023 filed written submissions before the ITAT in both the assessment years. Thus, we are proceeding on the basis of the said submissions as well as the paper book filed by the assessee before us 6. The ld. D.R. submitted that the CIT(A) erred in deleting the addition of Rs. 4,40,87,400/- and Rs. 64,305/- on I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 5 account of cash deposits treated as unexplained income from undisclosed source for assessment year 2012-13 and Rs. 2,18,33,273/- as well as Rs. 1,50,260/- on the same account for assessment year 2013-14 on substantive basis. The ld. D.R. submitted that in case of Shri Ashish Bhadaliya the appeal before the CIT(A) is pending and in his case the protective addition was made. The ld. D.R. also filed point wise summary on facts which is hereunder:- “1. 133A case (page 3 of AD) 2. Cash deposit of Rs. 2.4 & 2.18 crores in AYs 2012-13 & 2013-14 in account of Ashish Dholakiya. 3. In response to sec. 148 assessee filed return of income showing income of R. 50330/165150 respectively for both the years. 4. During assessment proceedings the assessee claimed that the amount belong to his employer Shri Ashish Bhadaliya who incidentally owned up the same during 133A proceedings. 5. During the course of AP the assessee filed affidavit of Shri Ashish Bhadaliya regarding deposit of cash and cheques but did not specified the amounts or the source which was not acceptable to the AO. 6. AO therefore issued 131(1) to Shri Ashish Bhadaliya which was returned by the postal authorities as unserved with the remarks left. I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 6 7. Therefore the assessee could not satisfactorily explain the cash deposit and the AO added the same on substantive basis. 8 CIT(A) deleted the same on the ground that as Shri Bhadaliya had owned up the amount it was not taxable in the hands of the assessee notwithstanding with the fact that the assessment of Shri Ashish Bhadaliya was finalized ex parte u/s 144. 9. At the time of deciding appeal the CIT should have instead of deleting the addition, retained the same on protective basis when he himself was the appellate authority with respect to Ashish Bhadaliya 10. Perusal of assessment order reveals that the cash was deposited in the bank account of the assessee for the 2 years as unde: 2012-13-DCB Bank A/c No. 04021900002899 Amount Rs. 2.4 crores 2013-14-DCB Bank A/c No. 04021900004763 Αmount Rs. 2.18 crores 11. On perusal of the assessment order of Shri Ashish Bhadaliya it is noted that orders for both the years were u/s 144 12. However, the additions of Rs. 33.72 lacs was made in respect of cash deposits/quantum sales of Rs. 2.4 crores in A/c Nos. 04021900005524 and 03021000000602 (page no. 2 of AO of Shri Ashish Bhadaliya) with DCB Bank Rajkot in the joint names of Shri Dholakiya and Shri Shailesh Chavda for AY 2012-13 at a NP of 14% 13. For AY 2013-14 an addition of Rs. 82.71 lacs was made on cash deposit/quantum sales of Rs. 4.03 crores at an NP of 20.49% (as admitted by the assessee during the course of Survey) in the same acnts as above. I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 7 14. As seen the cash deposits in the case of Shri Ashish Bhadaliya wherein different bank acnts as compared to the assesseses as described above 15. Before the CIT(A) Shri Ashish Bhadaliya has challenged the assessment stating that the disclosure made during the survey was made without any basis and had no relevance to the Income of the assessee. (page 20 of CIT(A) order)” 7. We have heard ld. D.R. and perused all the relevant materials available on record. It is pertinent to note before CIT(A) the assessee has filed the additional evidences stating therein that the said account is operated by Shri Ashish Bhadaliya who is the employer of the assessee and this tax application was in fact upon the Shri Ashish Bhadaliya as the same was admitted by Shri Ashish Bhadaliya during the survey. The assessee has submitted all the relevant evidences pointing out that the assessee is only a salaried employee of Jay Nagnath Sales Corporation. In fact, the remand report was also called by the CIT(A) wherein it was totally pointed out that these two accounts were operated by Shri Ashish Bhadaliya for his unaccounted trading transaction and made by proprietorship firm, Jay Nagnath Sales Corporation. But the Assessing Officer has not given the reasoning as to why the admission of the Shri Ashish Bhadaliya was not taken into account. The CIT(A) has taken cognizance of these evidences as regards the operation of these bank accounts and therefore I.T.A Nos. 89 & 90/Rjt/2018 A.Y. 2012-13 & 2013-14 Page No ITO vs. Shri Rajesh Manharbhai Dholakiya 8 deleted the substantive addition made in the hands of the assessee with seasoned order. There is nothing to interfere with the findings of the CIT(A). Both the assessment years are identical and hence the appeals filed by the Revenue are dismissed. 8. In the result, both the appeals filed by the Revenue are dismissed. Order pronounced in the open court on 10-01-2024 Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 10/01/2024 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot