Mr. Baljinder Singh, Fatehgarh Sahib V. ACIT, Mandi Gobindgarh

ITA 941/CHANDI/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4027 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: FERRY SOFAT
• Keywords: Business income
• Section: 69A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.941/CHD/2018 ASSESSMENT YEAR: 2011-12 MR. BALJINDER SINGH VS. THE ACIT V&PO SALANA DULLA SINGH WALA CIRCLE, MANDI THE. AMLOH, FATEHGARH SAHIB GOBINDGARH PUNJAB PUNJAB PAN NO. ALZPS8560M (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. FERRY SOFAT REVENUE BY : SMT. MEENAKSHI VOHRA, SR. DR DATE OF HEARING : 07/03/2019 DATE OF PRONOUNCEMENT : 07/03/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), PATIALA DT. 27/03/2018. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT THE ORDER OF LD. CIT(A) IS AGAINST THE FACT S OF THE CASE AND IS BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING AN ADDITION OF RS. 8.00 LAKHS U NDER SECTION 69A OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF DEPOSIT IN BANK ACCOUNT. 3. THAT THE LEARNED A.O. AS WELL AS LD. COMMISSIONE R (APPEALS) HAS ERRED IN MAKING A SEPARATE ADDITION OF RS. 8.00 LAKHS ON ACC OUNT OF CASH DEPOSIT IN BANK WITHOUT TELESCOPING THE SAME WITH ADDITIONS BY THE LD.A.O. OF RS. 8,41,080/- WHICH WAS FURTHER REVISED BY LD. CIT(A) FOR RS. 3,76,780/ -. 4. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN NOT STRIKING DOWN THE ADDITION MADE U/S 69 A, WHEN NO EXPENDITURE WAS IDENTIFIED OR EVEN MENTIONED AND BANK DEPOSITS WOUL D NOT BE HELD AS EXPENDITURE UNEXPLAINED. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL BEFORE THE SAME IS FINALLY HEARD AND DISPOSED OFF. FROM THE AFORESAID GROUNDS IT IS GATHERED THAT THE GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 69A OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS ACT) EVEN WHEN THE INCOME WAS ESTIMATED BY APPLYING THE NP RATE. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 26/09/2011 DECLARING AN INCOME OF RS. 16,35,190/ - ON THE TURNOVER OF RS. 3,09,53,380/-. 2 4. THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDINGS NOTICED THAT THE BOOKS OF ACCOUNTS MAINTAINED BY TH E ASSESSEE DID NOT REFLECT THE TRUE STATEMENT OF THE ASSESSEES AFFAIRS. HE RE JECTED THE BOOKS OF ACCOUNTS BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT AND DETERMINED THE BUSINESS INCOME BY APPLYING THE N.P RATE OF 8%. THE ASSESSING OFFICER ALSO MADE THE ADDITION OF RS. 8,00,000/- ON ACCOUNT OF DEPOSI TS IN BANK ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 69A OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO REDUCED THE ADDITION ON ACCOUNT OF ESTIMATION OF IN COME BY APPLYING THE N.P. RATE AND RESTRICTED THE SAME TO 6.5% OF THE TURNOVE R. HE ALSO UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH DE POSIT IN BANK ACCOUNT BY OBSERVING THAT THE ASSESSING OFFICER HAD EXAMINED F IVE DIFFERENT CASH DEPOSITS AND ARRIVED AT THE FINDINGS THAT THE SAME WAS NOT E XPLAINED OR LINKED TO THE BUSINESS. 6. NOW THE ASSESSEE IS IN APPEAL. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC TION 69A OF THE ACT WAS NOT JUSTIFIED WHEN THE INCOME WAS DETERMINED BY APPLYIN G THE N.P. RATE AND REJECTING THE BOOKS OF ACCOUNTS. THE RELIANCE WAS P LACED ON THE JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. AGGARWAL ENGINEERING COMPANY [2008] 302 ITR 246 (P&H). 8. IN HER RIVAL SUBMISSIONS THE LD. SR. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND REITERATED THE OBSERVATION MA DE BY THE LD. CIT(A). 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER DETERMINED THE INCOME OF THE ASSE SSEE BY REJECTING THE BOOKS OF ACCOUNTS, HE ALSO MADE THE ADDITION ON ACCOUNT O F CASH DEPOSITS IN BANK ACCOUNT. 3 ON A SIMILAR ISSUE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AGGARWAL ENGINEERING COMPANY(SUPRA) HELD AS UNDER: THAT THE COMMISSIONER (APPEALS ) AND THE TRIBUNAL WERE JUSTIFIED IN HOLDING THAT ONCE THE NET PROFIT RATE WAS APPLIED, NO FURTHER AD DITION WAS CALLED FOR IN RESPECT OF PURCHASES AND INTRODUCTION OF CASH IN THE FACTS AND CIRCUMSTANCES OF THE CASE. .. SO RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY TH E HONBLE JURISDICTIONAL HIGH COURT IN THE AFORESAID REFERRED TO CASE, THE A DDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A), IS DELETED . 10. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT ON 07/03/2019.) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 07/03/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR