ITO, Jaipur V. DAULAT SINGH, Jaipur

ITA 936/JPR/2012

• Counselvise Citation: 93623114 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Peak credit; Deemed to accrue or arise in india; Additional evidence
• Section: 142(1); 69; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 936/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE ITO WARD- 1 (4) JAIPUR CUKE VS. SHRI DAULAT SINGH 2781, SWARDA COMPLEX KHAZANE WALON KA RASTA JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AGBPS 3208 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH , JCIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (WRITTEN SUBMISSION ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24/02/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27 /03/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 29-10-2012 FOR THE ASSESSMEN T YEAR 2008-09 WHEREIN THE REVENUE RAISED FOLLOWING GROUND. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DEL ETING THE ADDITION OF RS. 21,76,000/- ON ACCOUNT OF CASH DEP OSIT, THE ASSESSEE COULD NOT ESTABLISH THAT THE CASH AMOUNT D EPOSITED IN HIS ACCOUNT WAS OUT OF CASH WITHDRAWALS, AS THER E WAS TIME ITA NO. 936/JP/2012 ITO WARD- 1 (4) JAIPUR VS. SHRI DAULAT SINGH. 2 LAG BETWEEN CASH WITHDRAWALS AND CASH DEPOSIT IN HI S BANK ACCOUNT. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF SEVERAL EARLIER NOTICES AND THE SERVICE OF NOTICE OF THIS HEARING. HOWEVER, WRITTEN SUBMISSIONS ARE FILED BY THE ASSESSEE ON RECORD. C ONSEQUENTLY WE ARE LEFT WITH NO ALTERNATIVE BUT TO DECIDE THE APPEAL ON MER ITS, AFTER CONSIDERING THE WRITTEN SUBMISSIONS , EX PARTE QUA THE ASSESSEE , AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON REC ORD. 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE'S CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICES U/S 143(2) OF THE ACT AND 142(1) WERE ISSUED. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SO URCE OF CASH DEPOSITS OF RS. 21,76,000/- IN HIS SAVING BANK ACCOUNT MAINT AINED WITH STATE BANK OF BIKANER AND JAIPUR. HOWEVER, THE ASSESSEE DID NO T RESPOND TO THE NOTICES AND THE AO FRAMED ASSESSMENT U/S 144 OF THE ACT HOLDING THIS AMOUNT TO BE THE DEEMED INCOME U/S 69 OF THE ACT. 3.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL. FROM THE ORDER OF THE LD. CIT(A), IT APPEARS THAT SOME NEW EVIDENCE W AS FILED WHICH WAS NOT PRODUCED BEFORE THE AO. HOWEVER, THERE IS NEITH ER ANY MENTION OF APPLICATION FOR ADDITIONAL EVIDENCE NOR FOR ADMISSI ON THEREOF IN LD. CIT(A)S ORDER HOWEVER THERE IS A REFERENCE OF THE REMAND REPORT FROM ITA NO. 936/JP/2012 ITO WARD- 1 (4) JAIPUR VS. SHRI DAULAT SINGH. 3 AO. IT MAY BE PERTINENT TO MENTION THAT THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO IN FRAMING THE EX-PARTE ASSESSMENT U/S 144 OF THE ACT DUE TO NON-COMPLIANCE ON THE PART OF THE ASSESSEE. HOWEVER ASSESSEE WORKING FURNISHED IN ABOVE MANNER WAS ACCEPTED BY T HE LD. CIT(A) WHICH GAVE NEGATIVE INVESTMENT. THE FINDINGS IN THI S BEHALF EMERGE FROM PAGE 5 OF THE LD. CIT(A)S ORDER AS UNDER:- REGARDING THE 2 ND AND 4 TH GROUNDS OF APPEAL WHICH ESSENTIALLY PERTAIN TO CASH DEPOSITS OF RS. 21,76,0 00/-, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD AN OPENING BALAN CE OF RS. 11,45,956/- WHICH HAS BEEN VERIFIED BY THE AO WHILE FURNISHING HIS REMAND REPORT. I HAVE CONSISTENTLY HELD THAT ADDITI ON IS REQUIRED TO BE MADE ON THE BASIS OF PEAK CASH AVAILABILITY IN S UCH CASES OF CASH DEPOSITS. IN THIS PARTICULAR CASE ON PERUSAL OF THE CASH FLOW STATEMENT IT IS SEEN THAT THERE IS NO NEGATIVE PEAK AND THEREFORE, THE CASH DEPOSITS IN THE BANK ACCOUNT ARE HELD TO BE EX PLAINED FROM THE WITHDRAWALS FROM THE BANK ACCOUNT OF THE ASSESSEE . REGARDING THE OBSERVATION OF THE AO THAT RS. 2,50,000/- ON ACCOUNT OF ADVANCE FOR SALE OF CAR W AS NOT EXPLAINED SINCE REGISTRATION CERTIFICATE OF THE CAR WAS NOT T RANSFERRED IT IS SEEN THAT THE IKRARNAMA DATED 16-04-2007 BETWEEN DA ULAT SINGH AND GOPAL JAT WAS FURNISHED BEFORE THE AO WHEREIN I T HAS BEEN MENTIONED THAT SHRI GOPAL JAT HAD ADVANCED RS. 2,50 ,000/- ON 16- 04-2007 TO THE APPELLANT FOR PURCHASE OF TATA INDIG O AS ADVANCED AGAINST THE TOTAL SALE PRICE OF RS. 3,15,000/-. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO REBUT THE IKRARNA MA BY WAY OF TAKING THE STATEMENT OF SHRI GOPAL JAT AND HAS MERE LY MENTIONED THAT SINCE THE RC WAS NOT TRANSFERRED THIS TRANSACT ION SHOULD NOT BE ACCEPTED. IT IS PERTINENT TO NOTE THAT IN THE IKRAR NAMA IT HAS BEEN MENTIONED THAT RS. 2,50,000/- WAS ADVANCED AGAINST THE PURCHASE OF CAR AND THE BALANCE AMOUNT WAS TO BE GIVEN WHEN THE CAR WAS PHYSICALLY TRANSFERRED TO GOPAL JAT. THIS WAS CLEAR LY NOT DONE DURING THIS FINANCIAL YEAR AS NO BALANCE WAS RECEIV ED ON THE SALE OF THIS CAR, SO IT IS NOT SURPRISING THAT RC WAS NOT T RANSFERRED AS THE ITA NO. 936/JP/2012 ITO WARD- 1 (4) JAIPUR VS. SHRI DAULAT SINGH. 4 ACTUAL SALE WAS NOT COMPLETED DURING THIS ASSESSMEN T YEAR. IN VIEW OF THE ABOVE DISCUSSION AND THE FACTS ON RECORD, TH E ADDITION OF RS. 21,76,000/- U/S 69 IS DELETED. 3.3 AGGRIEVED, THE REVENUE IS BEFORE US. 3.4 THE LD. DR VEHEMENTLY ARGUED THAT THE LD. CIT(A ) HAS FAILED TO APPRECIATE THAT THE ASSESSEE BY WAY OF A DESIGN DID NOT PRODUCE THE DOCUMENTS BEFORE THE AO AND ALLOWED THE ASSESSMENT TO BE FRAMED AS EX- PARTE. THUS THE ASSESSEE TOOK A CHANCE BEFORE THE L D. CIT(A) BY FILLING FRESH EVIDENCE IN A MANNER WHICH IS NOT AS PER STAT UTORY PROVISIONS. NEW EVIDENCE, PLEADINGS AND EXPLANATIONS HAVE BEEN GIVE N TO LD. CIT(A) WHICH OUGHT TO HAVE BEEN GIVE BEFORE THE AO. THE LD . CIT(A) HAS RELIED THEREON AND PASSED THE ORDER PROVIDING SUBSTANTIAL RELIEF WITHOUT COMPLYING WITH THE STATUTORY PROVISIONS U/R 46A AND PRINCIPLES OF NATURAL JUSTICE. THERE IS NEITHER ANY FINDING UNDER RULE 4 6A NOR THE FINDING AS TO HOW THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR NON-COMPLIANCE BEFORE THE AO. ON ONE HAND, THE LD. CIT(A) HOLD THA T ASSESSEE IS GUILTY ON ACCOUNT OF NON-COMPLIANCE AND ON THE OTHER HAND TH ERE IS NO FINDING THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN F ILING THE APPEAL. BESIDES THE LD. CIT(A) FAILED TO CONSIDER THAT THER E IS A LONG TIME GAP BETWEEN THE ALLEGED WITHDRAWALS FROM BANKS AND RE-D EPOSITS. THUS THE NEGATIVE PEAK IS NOTHING BUT FIGMENT OF IMAGINATION , SELF SERVING ITA NO. 936/JP/2012 ITO WARD- 1 (4) JAIPUR VS. SHRI DAULAT SINGH. 5 PRESENTATION AND AFTER THOUGHT. THEREFORE, THE ORDE R OF LD. CIT(A) IS UNSUSTAINABLE. 3.5 IN WRITTEN SUBMISSIONS, THE ASSESSEE HAS REITER ATED THE PEAK THEORY AND CLAIMED THAT THE AO HAS HIMSELF VERIFIED THE CA SH FLOW STATEMENT. THEREFORE, THE ORDER OF THE LD. CIT(A) MUST BE UPHE LD. IN WRITTEN SUBMISSION A STATEMENT SHOWING SOME CASH ENTRIES AR E PROVIDED ALONG WITH REMAND REPORT WHICH IN OUR VIEW IS BEREFT OF A NY SUPPORTING ARGUMENTS AND CORROBORATION. 3.6 WE HAVE HEARD THE LD. DR AND PERUSED THE MATERI ALS AVAILABLE ON RECORD. WE FIND MERIT IN THE ARGUMENTS OF THE LD. D R THAT LD. CIT(A) HAS PASSED THE ORDER, UPHOLDING THE ORDER ACTION OF EX- PARTE ASSESSMENT BY HOLDING THAT THE ASSESSEE IS GUILTY OF GROSS NON-CO MPLIANCE. THERE IS NOT A WORD ABOUT THE ASSESSEE BEING PREVENTED BY ANY RE ASONABLE CAUSE IN NOT FILING THE DOCUMENTS BEFORE THE AO AND BEING NON-CO OPERATIVE. BESIDES, THE LD. CIT(A) HAS GLOSSED OVER THE TIME LAG BETWE EN THE WITHDRAWAL AND DEPOSIT. IN OUR CONSIDERED VIEW, THE ORDER OF THE L D. CIT(A) SUFFERS FROM LATCHES AND INCONSISTENCIES. IN VIEW THEREOF, WE SE T ASIDE THE MATTER BACK TO THE LD. CIT(A) TO DECIDE THE APPEAL AFRESH. IF T HERE IS ANY APPLICATION FOR ADDITIONAL EVIDENCE, THE SAME SHOULD BE CONSIDE RED TO ENSURE AS TO WHETHER THE ASSESSEE WAS PREVENTED BY SUFFICIENT AN D TO PASS VALID AND ITA NO. 936/JP/2012 ITO WARD- 1 (4) JAIPUR VS. SHRI DAULAT SINGH. 6 TENABLE ORDER UNDER RULE 46A. THE APPEAL MUST BE DE CIDED AFTER GIVING THE REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH T HE PARTIES. THUS THIS APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. 4.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27/03/2015 . SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 /03/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 1 (4), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI DAULAT SINGH , JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), JAIPUR 4. VK;DJ VK;QDR@ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.936/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR