Miteshbhai Vinodbhai Kothari, Dhari, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2(4), AMRELI

ITA 99/RJT/2014

• Counselvise Citation: 9924914 RSA 2014
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B D GARSAR
• Assessee Lawyers: DR ADHIA
• Keywords: Opportunity of being heard
• Section: 69; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO.99/RJT/2014 ASSESSMENT YEAR : 2008-09 MITESHBHAI VINODRAI KOTHARI, C/O. RAGHUNATH KALIDAS KOTHARI, MAIN BAZAR, DHARI, DIST. AMRELI PAN : AJPPK 8412 L ( / APPELLANT) THE INCOME TAX OFFICER, WARD-2(4), AMRELI / RESPONDENT / ASSESSEE BY SHRI D. R. ADHIA, AR / REVENUE BY SHRI B.D. GARSAR, SR. DR / DATE OF HEARING 12.06.2014 !'# / DATE OF PRONOUNCEMENT 19.06.2014 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 20.12.2013 OF LD. CIT(A)-IV, RAJKOT FOR THE ASSESSMENT YEAR 2008-09. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNER IN THE FIRM M/S. RAGUNATH KALIDAS KOTHARI, DHARI AND HE HAS ALSO INCOME FROM PROPERTY AND INCOME FROM OTHER SOURCES. FOR THE ASSESSMENT YEAR UNDER APPEAL HE FI LED RETURN OF INCOME ON 30.03.2007, DECLARING TOTAL INCOME AT RS.86,860/-. ASSESSEES CASE WAS SELECTED FOR SCRUTINY UNDER CASS (AIR) COMPULSORY AND A NOTICE U /S 143(2) WAS ISSUED ON 27.08.2009 WHICH WAS SERVED UPON THE ASSESSEE ON 31 .03.2009 BY RPAD. IN RESPONSE TO THE NOTICE U/S 142(1), THE AUTHORIZED R EPRESENTATIVE FOR THE ASSESSEE SHRI INDUBHAI ZINJUVADIA ATTENDED FROM TIME TO TIME AND FILED THE DETAILS AS CALLED FOR, WHICH INCLUDES THE BOOKS OF ACCOUNTS ALONGWITH VOUC HERS AND OTHER DOCUMENTS. ON VERIFICATION OF BOOKS OF ACCOUNTS, THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE HAS SHOWN CASH CREDIT OF RS.16,03,900/- IN HIS BOOK S OF ACCOUNTS WHICH HE RECEIVED FROM 23 PERSONS AS CAN BE SEEN AT PARAGRAPH 4.1 OF THE ASSESSMENT ORDER AND AN AMOUNT OF RS.3,19,700/- WAS ALSO WITHDRAWN FROM THE PERSONAL SAVINGS ACCOUNTS AND ALTOGETHER A TOTAL AMOUNT OF RS.19,23,600/- WAS DEP OSITED TO AXIS BANK, AMRELI A/C. NO.336010100043412 ON VARIOUS DATES. THEREFORE, THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT ON 19.1 1.2010 AT A TOTAL INCOME OF RS.4,06,560/-, MAKING ADDITION OF RS.3,19,700/- U/S 69 OF THE INCOME-TAX ACT FOR THE REASON GIVEN IN PARAGRAPH 5 OF THE ASSESSMENT ORDER WHICH READS AS UNDER:- 2 99-RJT-2014 - MITESHBHAI VINODRAI KOTHARI (SMC)- (143(3)) 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE ASSESSEE. ON VERIFICATION IT IS NOTICED THAT THE ASSESSEE HAS AC CEPTED CASH LOAN/DEPOSIT FROM FAMILY MEMBERS AND DEPOSITED TO AXIS BANK, AMRELI T O APPLY SHARE APPLICATION OF PUBLIC ISSUE. THE ASSESSEE HAS ACCEP TED RS.16,03,900/- FROM RELATIVES AS LOAN/DEPOSITS BY MADE OF TRANSACTION I N CASH. RS.3,19,700/- WAS WITHDRAWN FROM THE PERSONAL SAVING ACCOUNTS OF THE ASSESSEE. ON VERIFICATION OF THE BALANCE SHEET OF THE ASSESSEE IT IS NOTICED THAT THE CONNECTED BANK ACCOUNT OF THE ASSESSEE OF AXIS BANK, VIDE A/C NO.3 36010100043412 IS OUT OF BOOKS OF ASSESSEE AND IT IS NOT REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE IN WHICH THE CASH DEPOSITED OF RS.19,23,60 0/- HAS BEEN MADE. THIS IS THE BANK ACCOUNT HANDLED BY THE ASSESSEE. THE AS SESSEE HAS FILED HIS RETURN OF INCOME WITHOUT CONSIDERING THE ABOVE ACCO UNT, HENCE, THE UN- ACCOUNTED AMOUNT OF RS.3,19,700/- IS HEREBY ADDED T O THE TOTAL INCOME OF THE ASSESSEE U/S 69 OF THE I.T. ACT, 1961. FURTHER, I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HI S INCOME AND THEREBY CANCELED THE INCOME OF RS.3,19,700/- AND SHOWN THIS INCOME AND THIS DEFAULT OF THE ASSESSEE ATTRACTS A PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961. PENALTY U/S 271(1)(C) OF THE I.T. ACT FOR FURNISHING INACCU RATE PARTICULARS OF INCOME IS BEING INITIATED SEPARATELY. 3. ON APPEAL, IN THE IMPUGNED ORDER, LD. CIT(A) CON FIRMED THE ADDITION OF RS.3,19,700/- MADE BY THE ASSESSING OFFICER U/S 69 OF THE INCOME-TAX ACT. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSESSEE IS NOW I N APPEAL BEFORE THIS TRIBUNAL, ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CO NFIRMING ADDITION OF RS.3,19,700/- U/S 69. THE ADDITION NEEDS DELETION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THAT THE AMOUNT OF RS.3,19,700/- WAS ALREADY AVAILABLE WITH THE ASSESSEE AND WAS NOT LIABLE FOR ADDITION U/S 69 AS CONFIRMED. THE ADDITI ON NEEDS DELETION. 3. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY, FACTUAL AND ADMINISTRATIVE ASPECTS, NO ADDITION AMOUNTING TO RS.3,19,700/- OUG HT TO HAVE BEEN CONFIRMED. THE ADDITIONS NEED DELETION. 4. WITHOUT PREJUDICE, THE ASSESSMENT MADE IS BAD IN LAW AND DESERVES ANNULMENT. 5. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND REASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING ASSESSMENT ORDER. T HE ASSESSMENT NEEDS ANNULMENT. 6. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND REASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING APPEAL ORDER. THE A SSESSMENT NEEDS ANNULMENT. 7. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN D/OR SUBSTITUTE ANY OR ALL GROUND OF APPEAL BEFORE THE ACTUAL HEARING TAKE S PLACE. 4. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E, SHRI D.R. ADHIA, AR, APPEARED AND POINTED OUT THAT THE ASSESSEE RESIDES AT VILLAGE DHARI, DIST. AMRELI. HIS 3 99-RJT-2014 - MITESHBHAI VINODRAI KOTHARI (SMC)- (143(3)) RELATIVES AND FAMILY MEMBERS ARE AT DHARI AND USE T O MAKE APPLICATIONS FOR ALLOTMENT OF SHARES AND ALL THESE PERSONS ARE ALSO ASSESSED T O TAX. FOR MAKING APPLICATIONS FOR RS.50,000/- AND MORE IN PRIME ACCOUNTS WITH AXIS BA NK, AMRELI WAS OPENED BY THE ASSESSEE SO THAT DIRECT PAYMENT FOR SHARE APPLICATI ON MONEY CAN BE MADE THROUGH CHEQUE FROM AT. DHARI AS NO SUCH BANK FACILITIES AR E AVAILABLE FOR MAKING DIRECT APPLICATION FOR ALLOTMENT OF SHARES. THE LD. COUNSE L OF THE ASSESSEE FURTHER POINTED OUT THAT THE PRIME ACCOUNT OPENED WITH AXIS BANK BE ARING A/C. NO.336010100043412 IS MEANT ONLY FOR MAKING APPLICATIONS DIRECTLY FOR ALLOTMENT OF SHARES. NO OTHER BUSINESS TRANSACTIONS ARE THERE AND AFTER MAKING AP PLICATION FOR ALLOTMENT WHATEVER REFUND IS RECEIVED, THE ASSESSEE AND HIS RELATIVES USE TO DEPOSIT THE SAME IN THEIR BANK ACCOUNT MAINTAINED AT DHARI; THUS THE AXIS BAN K ACCOUNT REFERRED ABOVE IS BEING USED GENERALLY ONLY FOR CREDITING THE AMOUNT WITHDRAWN FROM THEIR BANK ACCOUNT AT DHARI AND TO DEPOSIT THE SAME AMOUNTS WITH THIS ACCOUNT I.E. 336010100043412. HE FURTHER SUBMITTED THAT THE IMPUGNED AMOUNT OF RS .3,19,700/- WAS WITHDRAWN FROM ASSESSEES DENA BANK AND AXIS BANK ACCOUNT AT DHARI AND DEPOSITED THE SAME IN PRIME ACCOUNT NO.336010100043412 ON VARIOUS DATES A S GIVEN BELOW:- I. RS. 91,000/- - DEPOSITED ON 03.11.2007 II. RS. 94,700/- - DEPOSITED ON 10.07.2007 III. RS.1,34,000/- - DEPOSITED ON 15.01.2008 RS.3,19,700/- - TOTAL THE LD. AR FURTHER SUBMITTED THAT THE AFORESAID AM OUNTS WERE ALREADY SHOWN IN THE BANK ACCOUNTS SHOWN BEFORE THE LD. AO AND AL SO IN THE BALANCE SHEET; THE SAME WAS DULY EXPLAINED AS UNDER:- 1. RS.91,000/- - WITHDRAWN BY THE ASSESSEE FROM HIS BANK ACCOUNTS MAINTAINED WITH DENA BANK, DHARI. THIS ACCOUNT IS A LREADY SHOWN IN THE BOOKS OF ACCOUNTS AND ALSO FILED WITH THE LD. A.O. ALONGWITH ALL OTHER ACCOUNTS. COPY OF BALANCE SHEET INDICATING BALANCE OF RS.2,206.48 TOGETHER WITH COPY OF BANK ACCOUNT ITSELF IS ENCLO SED HEREWITH. THIS AMOUNT WAS DEPOSITED ALONGWITH TOTAL DEPOSIT OF RS. 5,74,000/- WITH THE AXIS BANK ACCOUNT NO.336010100043412 ON 03.11.2007. THUS THIS AMOUNT STANDS EXPLAINED AND NEEDS DELETION. 2. RS.94,700/- - WITHDRAWN BY THE ASSESSEE FROM HIS BANK ACCOUNTS MAINTAINED WITH AXIS BANK, DHARI NO.31240. THIS ACC OUNT IS ALREADY SHOWN IN THE BOOKS OF ACCOUNTS AND ALSO FILED WITH THE LD . A.O. ALONGWITH ALL OTHER ACCOUNTS. COPY OF BALANCE SHEET INDICATING BALANCE OF RS.66,913/- TOGETHER WITH COPY OF BANK ACCOUNT ITSELF IS ENCLOSED HEREWI TH. THIS AMOUNT WAS DEPOSITED ALONGWITH TOTAL DEPOSIT OF RS.5,64,600/- WITH THE AXIS BANK ACCOUNT NO.336010100043412 ON 10.12.2007. THUS THIS AMOUNT STANDS EXPLAINED AND NEEDS DELETION. 4 99-RJT-2014 - MITESHBHAI VINODRAI KOTHARI (SMC)- (143(3)) 3. RS.1,34,000/- - WITHDRAWN BY THE ASSESSEE FROM H IS BANK ACCOUNT MAINTAINED WITH AXIS BANK, DHARI NO.31240. THIS ACC OUNT IS ALREADY SHOWN IN THE BOOKS OF ACCOUNTS AND ALSO FILED WITH THE LD . A.O. ALONGWITH ALL OTHER ACCOUNTS. COPY OF BALANCE SHEET INDICATING BALANCE OF RS.66,913/- TOGETHER WITH COPY OF BANK ACCOUNT ITSELF IS ENCLOSED HEREWI TH. THIS AMOUNT WAS DEPOSITED ALONGWITH TOTAL DEPOSIT OF RS.6,46,000/- WITH THE AXIS BANK ACCOUNT NO.336010100043412 ON 15.01.2008. THUS THIS AMOUNT STANDS EXPLAINED AND NEEDS DELETION. CONTINUING HIS ARGUMENT, LD. AR POINTED OUT THAT SI NCE ALL THE AFORESAID THREE TRANSACTIONS WERE ALREADY THERE IN THE BANK ACCOUNT S VIZ. DENA BANK & AXIS BANK AT DHARI AS ALSO THESE ACCOUNTS WERE ALREADY SHOWN IN THE BALANCE SHEET OF THE ASSESSEE FILED BEFORE LD. AO, THERE ARE NO NEW TRAN SACTIONS/DEPOSITS; THEREFORE, THE ADDITION OF RS.3,19,700/- MADE BY THE LD. AO U/S.69 OF THE INCOME-TAX ACT BE DELETED. 5. ON THE OTHER HAND, SHRI B.D. GARSAR, SR. DR, APP EARED FOR THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). HE PO INTED OUT THAT SINCE THE AMOUNT OF RS.3,19,700/- DEPOSITED IN THE BANK ACCOUNT NO. 336 010100043412 MAINTAINED WITH AXIS BANK, AMRELI WHICH WAS NOT REFLECTED IN THE BA LANCE SHEET OF THE ASSESSEE, THE LD. CIT(A) HAS RIGHTLY UPHELD THE DECISION OF ASSES SING OFFICER FOR MAKING THE ADDITION OF RS.3,19,700/- U/S 69 OF THE ACT. 6. HAVING HEARD BOTH THE SIDES, I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT TH E ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT ON 19.11.2010 BY MAKIN G ADDITION OF RS.3,19,700/- IN RESPECT OF DEPOSIT MADE IN BANK ACCOUNT NO. 3360101 00043412 MAINTAINED BY THE ASSESSEE WITH AXIS BANK, AMRELI AS THE SOURCE OF TH IS DEPOSIT WAS NOT PROVED BY THE ASSESSEE. IT IS ALSO PERTINENT TO NOTE THAT THE AF ORESAID ACCOUNT WITH AXIS BANK, AMRELI IS ALSO NOT REFLECTED IN THE ASSESSEES BALA NCE SHEET WHICH WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEES VERSION IS THAT THE AFORESAID BANK ACCOUNT NO.336010100043412 MAINTAINE D BY THE ASSESSEE WITH AXIS BANK, AMRELI DOES NOT HAVE ANY INCOME BUT THE AMOUN T REFLECTED IN THE AXIS BANK, AMRELI ACCOUNT IS THE AMOUNT COLLECTED FROM ASSESSE E AND FROM HIS VARIOUS FAMILY MEMBERS TO MAKE APPLICATIONS FOR SHARE INVESTMENT; AND ALL THESE TRANSACTIONS WERE DONE THROUGH HIS DISCLOSED BANK ACCOUNT AT DENA BAN K, DHARI AND AXIS BANK, DHARI, FOR WHICH HE HAD PRODUCED BEFORE ME THE COPY OF ST ATEMENT/PASSBOOK OF RESPECTIVE 5 99-RJT-2014 - MITESHBHAI VINODRAI KOTHARI (SMC)- (143(3)) BANK ACCOUNTS. UNDER THESE CONSPICUOUS FACTS AND C IRCUMSTANCES OF THE CASE, I SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) AND DIRECT T HE ASSESSING OFFICER TO CROSS- CHECK THE DETAILS WITH REGARD TO THE AMOUNT DEPOSIT ED IN ASSESSEES UNDISCLOSED BANK ACCOUNT AGAINST THE AMOUNT WITHDREW FROM HIS D ISCLOSED BANK ACCOUNTS, AND THEREAFTER RE-ADJUDICATE THIS ISSUE AFRESH IN ACCOR DANCE WITH THE LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 19.06.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- MITESHBHAI VINODRAI KOTHARI, C/O. RAG HUNATH KALIDAS KOTHARI, MAIN BAZAR, DHARI, DIST. AMRELI 2. / RESPONDENT- THE INCOME TAX OFFICER, WARD-2(4), A MRELI 3. ,0,1 * * 2 / CONCERNED CIT-III, RAJKOT 4. * * 2- / CIT (A)-IV, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT