Income tax Officer Ward-1(2), RAIGARH(CG) V. Shri Sanjay Jadwani, RAIPUR (CG)

ITA 95/BIL/2012

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8933 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEETAL VERMA
• Keywords: Business income; Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.95/RPR/2012 ASSESSMENT YEAR : 2009-2010 INCOME TAX OFFICER, WARD - 1(2), RAIPUR VS. SHRI SANJAY JADWANI, SANJAY AUTOMOBILES, M.G.ROAD, RAIPUR PAN/GIR NO.ACTPJ 5650 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SMT SHEETAL VERMA, DR DATE OF HEARING : 09/01/ 2018 DATE OF PRONOUNCEMENT : 11 /01/ 2018 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE O RDER OF THE CIT(A)- RAIPUR, DATED 7.5.2012 FOR THE ASSESSMENT YEAR 2009- 2010. 2. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESSEE W HEN THE CASE WAS CALLED FOR HEARING. THEREFORE, WE PROCEED TO DECID E THE APPEAL OF THE REVENUE EXPARTE-QUA-RESPONDENT-ASSESSEE AFTER HEARING L D D.R. AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2 ITA NO.95/RPR/2012 ASSESSMENT YEAR : 2009-2010 3. GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDE R: 1. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,48, 799/- ON ACCOUNT OF UNACCOUNTED CASH SALES. 2. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.29,8 6,105/- MADE BY THE AO ON ACCOUNT OF PEAK CREDIT BALANCE OF UNDISCLOSE D BANK ACCOUNT WITH IDBI BANK. 3. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CAS E, THE CIT(A) WAS JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF I.T.RULES, 1962. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCO ME AS STOCKIEST OF HERO HONDA SPARE PARTS. THE ASSESSING OFFICER FOUND THAT THE ASSESSED HAS SHOWN GROSS PROFIT AND NET PROFIT AT RS.35,89,6 92/-(3.65%) AND RS.9,74,667/-(0.99%) AS AGAINST TOTAL SALES OF RS.9,8 3,47,730/- AS AGAINST GROSS PROFIT SHOWN AND NET PROFIT SHOWN OF RS.2 0,05,,873/-(2.86%) AND RS.6,72,267/-(0.96%) IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAS BEEN MAINTAINING TWO BANK ACCOUNTS I.E. WITH STATE BANK OF INDIA AND ID I BANK. HE OBSERVED THAT THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH ST ATE BANK OF INDIA IS MENTIONED IN THE BALANCE SHEET WHEREAS THE BANK ACCOUN T MAINTAINED WITH IDBI BANK IS MISSING. SINCE THE TOTAL CASH DEPOSITS IN BOT H THE BANK ACCOUNTS COMES TO RS.1,22,95,861/- AND THE ASSESSEE HAS NOT SUB MITTED ANY EXPLANATION REGARDING THE SAME, THE ASSESSING OFFICER TREATED 3 ITA NO.95/RPR/2012 ASSESSMENT YEAR : 2009-2010 RS.,1,22,95,861/- AS UNDISCLOSED CASH SALES OF THE ASSESSEE. T HE ASSESSING OFFICER ALSO CALCULATED THE GROSS PROFIT RATE AT 3.65% O F UNDISCLOSED CASH SALES AND ADDED RS.4,48,799/- TO THE INCOME OF THE ASSESSEE . THE ASSESSING OFFICER ADDED RS.29,86,105/- ON ACCOUNT OF PEAK CR EDIT BALANCE. 5. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE TH E CIT(A). BEFORE THE CIT(A), THE ASSESSEE EXPLAINED THAT THE CASH DEPOSITS AND WITHDRAWN WITH THE IDBI ACCOUNT COULD NOT BE FURNISHED TO THE ASSES SING OFFICER WITHIN THE TIME GIVEN BY HIM I.E.22.12.2011 AS THE ACCOUNT WA S NOT OPERATIONAL THE ASSESSEE FILED BANK STATEMENT OF IDBI BANK, CIVIL L INES, RAIPUR AND PERSONAL BALANCE SHEET OF THE ASSESSEE, EXPLANATION OF SOU RCE OF CASH DEPOSITS AND NATURE OF PAYMENT ENTRIES IN IDBI BANK ACCO UNT BEFORE THE CIT(A). 6. THE CIT(A) FORWARDED THE SUBMISSIONS OF THE ASSESSEE TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER SENT HIS REMAND REPORT, STATING AS UNDER: ON VERIFICATION, IT IS NOTICED THAT THE CASH DEPOSITS IN THE BANK ACCOUNT MAINTAINED WITH THE SBI HAS BEEN INCORPORATED I N THE BOOKS OF ACCOUNT. NOW THAT THE APPELLANT HAS FURNISHED THE COPY OF ACCOUN T OF HERO HONDA MOTORS LTD. IN THE PERSONAL CAPACITY AND OTHER D OCUMENTS IN SUPPORT OF THE PROFIT AND LOSS ACCOUNT FROM TRADING ACTI VITY CARRIED FROM IDBI BANK, WHEREBY THE APPELLANT HAS SHOWN ADDIT IONAL GROSS PROFIT OF RS.2,53,430/- THE SAME HAS BEEN VERIFIED WI TH THE DOCUMENTS 4 ITA NO.95/RPR/2012 ASSESSMENT YEAR : 2009-2010 AND IDBI BANK STATEMENT IN SUPPORT OF APPELLANTS CLA IM, THAT IT IS THEREFORE, REQUESTED TO DECIDE THIS ISSUE ON MERITS. 7. THE CIT(A) AFTER CONSIDERING THE REMAND REPORT AND THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION OBSERVING AS UNDER: IT IS SEEN THAT THE APPELLANT HAS CARRIED OUT HIS BUSIN ESS ACTIVITY IN M/S. SANJAY AUTOMOBILES AS STOCKIEST OF HERO HONDA AN D THAT DURING THE RELEVANT YEAR, HE HAS ALSO CARRIED OUT SOME PART OF HIS BUSINESS IN HIS INDIVIDUAL CAPACITY IN HIS PERSONAL SAVING ACCOUNT I.E. IDBI ACCOUNT. THE APPELLANT HAS PLACED BEFORE ME THE DETAILS OF TRANSACTIONS CARRIED OUT IN THE IDBI BANK ACCO UNT, HIS PERSONAL BALANCE SHEET, P&L ACCOUNT, BANK BOOK OF IDBI BANK ACCOUNT, HIS PERSONAL CASH BOOK AND INVOICES IN RESPECT OF TRADING BUSINESS. AS THE AO ACCEPTED THAT THE BANK ACCOU NT IN THE STATE BANK OF INDIA IS DULY REFLECTED IN THE AUD ITED BOOKS OF ACCOUNT AND THE TRANSACTIONS IN BANK ACCOUNT IN IDBI HAS AL SO BEEN EXPLAINED BY THE APPELLANT INASMUCH AS THE APPEL LANT HAD CARRIED OUT TRADING BUSINESS FROM THE SAVING BANK ACCOUNT IN IDBI, THE FACT REMAINS THAT BOTH THE BANK ACCOUNTS IN RE SPECT OF WHICH ADDITIONS WERE MADE BY THE AO STANDS EXPLAINED BY THE APPELLANT. EVEN IN THE REMAND REPORT, THE AO HAS NO T POINTED OUT ANY ADVERSE REMARK ON THE EXPLANATION PUTFORTH BY THE APPELLANT. THEREFORE, ACCORDING TO THE P&L ACCOUNT, OF THE ASSESSEE IN PERSONAL CAPACITY, THERE IS A CLEAR CUT ESCAPEMENT OF INCOME TO THE TUNE OF RS.2,55,430/-, WHICH HAS ALSO BEE N VERIFIED AND ACCEPTED BY THE AO. HENCE, THE ADDITION MADE BY THE AO ON PEAK CREDIT THEORY CANNOT BE SUSTAINED, WHEN THE TRANSACTION OF THE IDBI BANK ACCOUNT IS EXPLAINED BY THE APPELLANT AND HAS BEEN ACCEPTED BY THE AO. ACCORDINGLY, THE ADDITION OF RS.4,48,,799/- AND RS.29,86,105/- ARE RED UCED TO RS.2,55,430/-. THE APPELLANT IN ALL GETS RELIEF OF R S.4,48,799/- AND RS.27,30,,675/- (RS.29,86,105 RS.2,55,430/-). 8. LD D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 5 ITA NO.95/RPR/2012 ASSESSMENT YEAR : 2009-2010 9. AFTER CONSIDERING THE SUBMISSION OF LD D.R. AND PERU SING THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT NO SPECIFIC ERROR IN TH E ORDER OF THE CIT(A) COULD BE POINTED OUT BY LD D.R. THEREFORE, WE DO NO T FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS H EREBY CONFIRMED AND GROUNDS OF APPEAL OF THE REVENUE IS REJECTED. 10. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 11/01/2018. SD/- SD/- (N.S SAINI) ( PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIALMEMBER RAIPUR; DATED 11/01/2018 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, RAIPUR 1. THE APPELLANT : INCOME TAX OFFICER, WARD - 1(2), RAIPUR 2. THE RESPONDENT. SHRI SANJAY JADWANI, SANJAY AUTOMOBILES, M.G.ROAD, RAIPUR 3. THE CIT(A)-RAIPUR 4. PR.CIT- RAIPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//