THE DCIT, 3(1), Indore V. M/S MAYURI HEENA HERBALS PVT. LTD., Indore

ITSSA 240/IND/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2007 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIARPIT GAUR CAS
• Assessee Lawyers: RAJEEV VARSHNEY; R A VERMA DRS
• Keywords: Unexplained cash credit; Business income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER IT(SS)A NOS. 240/IND/2013 A.Y. 2009-10 DCIT-3(1), INDORE :: APPELLANT VS M/S. MAYURI HEENA HERBALS PVT. LTD., INDORE PAN AADCM 1833 H :: RESPONDENT ASSESSEE BY SHRI ANIL KAMAL GARG AND SHRIARPIT GAUR, CAS RESPONDENT BY SHRI RAJEEV VARSHNEY AND SHRI R.A. VERMA, DRS DATE OF HEARING 05.04.2016 DATE OF PRONOUNCEMENT 18.05.2016 O R D E R PER SHRI D.T.GARASIA, JM THE ABOVE APPEAL IS FILED BY THE REVENUE CHALLENGIN G THE ORDER OF LD. CIT(A)-I, INDORE FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.67,71,0 00/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN BA NK ACCOUNT (SS)240 OF 2013 MAYURI HEENA HERBALS 2 RELYING ON THE CASH BOOK PRODUCED BY THE ASSESSEE H OLDING THAT THE COMPANY HAS SHOWN RECEIPT OF CASH IN ITS REGULA R CASH BOOK WHICH WAS OUT OF SALE PROCEEDS WHEREAS THE AO HAD R EJECTED THE BOOKS OF ACCOUNT BEING NOT RELIABLE. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.67,71,0 00/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN BA NK ACCOUNT BECAUSE THE LD. CIT(A) HIMSELF HAS ADMITTED THE FIN DINGS OF THE AO THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE N OT RELIABLE. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.67,71,0 00/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN BA NK ACCOUNT BECAUSE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT EXPLAIN THE DEPOSITS WITH SUPPOR TING DOCUMENTS. 2. IT IS, THEREFORE PRAYED THAT THE ORDER OF THE CI T(A) MAY BE SET ASIDE AND THE ORDER OF THE AO MAY PLEASE BE RES TORED. FIRST GROUND RELATES TO DELETION OF THE ADDITION MA DE U/S. 68 ON ACCOUNT OF CASH DEPOSITS AMOUNTING TO RS.67,71,000/- IN UCO BANK BY THE ASSESSEE AS UNEXPLAINED CASH CREDITS. (SS)240 OF 2013 MAYURI HEENA HERBALS 3 THE BRIEF FACTS ARE THAT DURING THE COURSE OF THE A SSESSMENT PROCEEDINGS, THE AO NOTED FROM THE BANK STATEMENT O F THE ASSESSEE THAT IT HAD MADE CASH DEPOSITS AMOUNTING TO RS.67,71,000/-, ON DIFFERENT DATES, IN ITS BANK ACCOUNT WITH UCO BANK [A/C. NO.80500070596]. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSE E TO EXPLAIN THE SOURCES OF THE CASH DEPOSITS AND IN REPLY, THE ASSE SSEE SUBMITTED THAT SUCH CASH DEPOSITS WERE MADE BY THEM OUT OF THE CASH BAL ANCE AVAILABLE IN THEIR REGULAR CASH BOOK. HOWEVER, THE AO DID NOT FIND THE EXPLANATION AS SATISFACTORY AND MADE THE IMPUGNED ADDITIONS BY INV OKING THE PROVISIONS OF S. 68 OF THE ACT. THE RELEVANT FINDINGS OF THE ASSESSI NG OFFICER ARE RECORDED AT FOURTH PARA AT PAGE NO. 3 OF THE ASSESSMENT ORDER. MATTER CARRIED TO LEARNED CIT(A) AND THE LEARNED CI T(A), AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, DELETED THE ADDITION OF RS.67,71,000/- BY GIVING HIS FINDINGS AT PARA 9.4 & 9.5, AT PAGE NO. 8 & 9 OF HIS ORDER, WHICH READ AS UNDER: 9.4 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE APPELLANTS SUBMISSION. HAVING CONSIDERED BOTH, I D O NOT FIND ANY SUBSTANCE IN THE ARS CONTENTION ON LEGAL GROUND, AS I FIND THAT THE ORIGINAL RETURN WAS FILED ON 30. 09.2009 AND SEARCH WAS CONDUCTED ON 19.11.2009, HENCE IT CANNOT BE (SS)240 OF 2013 MAYURI HEENA HERBALS 4 SAID THAT THE PROCEEDINGS FOR ASSESSMENT YEAR UNDER CONSIDERATION GOT ABATED. IN THIS CONTEXT, MY VIEW ALSO GETS SUPPORT FROM THE DECISION OF SPECIAL BENCH IN THE C ASE OF ALL CARGO GLOBAL LOGISTICS LTD. HENCE IN MY CONSIDE RED VIEW, THE AO WAS WELL WITHIN HIS POWERS TO MAKE ADD ITIONS WITHOUT HAVING RECOURSE TO ANY SEIZED MATERIAL. 9.5 HOWEVER ON MERITS OF THE APPELLANTS CASE, I AM OF THE CONSIDERED VIEW THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE AFORESAID ADDITION TO THE INCOME OF THE APPELLANT, AS IT IS SEEN FROM THE REGULAR CASH BOOK OF THE APPELLANT COMPANY THAT ON EACH AND EVERY OCCASION O F MAKING CASH DEPOSIT, THE APPELLANT COMPANY WAS HAVI NG SUFFICIENT CASH BALANCE. THE APPELLANT COMPANY HAS SHOWN RECEIPT OF CASH IN ITS REGULAR CASH BOOK FROM CASH WITHDRAWALS FROM THE SAME BANK ACCOUNT AND AS ALSO FROM REALIZATION OF SALES PROCEEDS IN CASH, AS AGAINST S ALES AMOUNTING TO RS.8,61,14,581/- SHOWN IN THE AUDITED FINANCIAL STATEMENTS. THE WITHDRAWALS OF CASH FROM THE BANK ARE VERIFIABLE FROM THE BANK BOOK AND BANK STA TEMENT. FURTHER I FIND THAT IT IS NOT THE CASE OF THE AO TH AT EITHER THE APPELLANT HAD NOT WITHDRAWN THE CASH FROM ITS BANK ACCOUNTS OR THE CASH WITHDRAWN WERE NOT AVAILABLE F OR (SS)240 OF 2013 MAYURI HEENA HERBALS 5 MAKING REDEPOSITS. THEREFORE I AM OF THE CONSIDERED VIEW THAT THERE IS NO JUSTIFICATION IN THE A.O.S ACTION IN NOT ACCEPTING THE EXPLANATION OF THE APPELLANT AS REGAR D TO THE SOURCES OF CASH DEPOSITS IN BANKS. IN THIS REGARD, MY VIEW ALSO GETS SUPPORT FROM DECISION OF HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS. KULWANT RAI (2007) 291 ITR ( 36) (DEL) AND ALSO OF HONBLE KARNATAKA HIGH COURT IN T HE CASE OF S.R. VENKATA RATNAM VS. CIT (1981) 127 ITR 807 ( KAR). IN VIEW OF THE ABOVE DISCUSSIONS, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.67,71,000/- ON ACCOUNT OF CASH D EPOSITS IN UCO BANK. THUS, THIS GROUND OF APPEAL IS ACCORDI NGLY ADJUDICATED. THE LD. AR HAS MADE ORAL AS WELL AS WRITTEN SUBMISS ION AS UNDER: I) DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE COMPANY HAD MADE CASH DEPOSITS AMOUNTING TO RS.67,71,000/- WITH ITS BANK ACCOUNT MAINTAINED WIT H UCO BANK, NEW PALASIA BRANCH, INDORE, ON DIFFERENT DATE S. THE DETAILS OF THE CASH DEPOSITS MADE BY THE ASSESSEE COMPANY WITH THE ABOVE SAID BANK DURING THE RELEVAN T PREVIOUS YEAR IS GIVEN IN SEPARATE STATEMENT PLACED AT PAGE NO. 27 OF OUR PAPER BOOK. IT IS SUBMITTED THAT SUCH (SS)240 OF 2013 MAYURI HEENA HERBALS 6 STATEMENT HAS BEEN EXTRACTED FROM THE REGULAR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE COMPANY IN ITS COMPUTER SYSTEM BY USING TALLY SOFTWARE. II) IT IS FURTHER SUBMITTED THAT BESIDES MAKING CAS H DEPOSITS AMOUNTING TO RS.67,71,000/-, WITH UCO BANK , THE ASSESSEE HAD ALSO MADE CASH WITHDRAWALS AMOUNTING T O RS. 73,00,000/- FROM THE SAME BANK, DURING THE RELE VANT PREVIOUS YEAR. IN EVIDENCE OF SUCH FACTS, FOLLOWING DOCUMENTS ARE PLACED IN PAPER BOOK: (A) COPY OF BANK ACCOUNT IN THE BOOKS OF THE ASSESS EE COMPANY FOR THE RELEVANT PREVIOUS YEAR [PB PAGE NO. 28 TO 41] (B) COPY OF STATEMENT SHOWING CASH DEPOSITS AND CAS H WITHDRAWALS MADE BY THE ASSESSEE FROM ITS BANKS [PB PAGE NO. 42 & 43] III) IN SUM AND SUBSTANCE, THE ENTIRE CASH DEPOSITS MADE BY THE ASSESSEE COMPANY WITH ITS BANK ARE DULY RECORDED IN THE REGULAR CASH BOOK OF THE ASSESSEE COMPANY AND THE SOURCES OF SUCH DEPOSITS MADE IN TH E BANK ACCOUNT ARE EITHER FROM THE CASH WITHDRAWALS M ADE FROM THE SAME BANK AT RS.73,00,000/- OR CASH SALES MADE DURING THE YEAR. BESIDES, IN ORDER TO SUMMARIZE THE WHOLE ISSUE, A TRIAL-BALANCE SHOWING DETAILS OF TOTAL CASH (SS)240 OF 2013 MAYURI HEENA HERBALS 7 TRANSACTIONS MADE BY THE ASSESSEE COMPANY DURING THE RELEVANT PREVIOUS YEAR IS PLACED AT PAGE NO. 42 & 4 3 OF OUR PAPER BOOK. IV) IT IS SUBMITTED THAT THE CASH WITHDRAWALS MADE BY THE ASSESSEE COMPANY FROM THE SAME BANK ACCOUNT ARE VERIFIABLE FROM THE COPY OF BANK STATEMENT PLACED O N RECORD AND FURTHER, IT IS SUBMITTED THAT SUFFICIENT CASH B ALANCE WAS AVAILABLE WITH THE ASSESSEE COMPANY IN ITS REGULAR CASH BOOK ON EACH AND EVERY OCCASION FOR MAKING CASH DEP OSITS IN BANK ACCOUNT. IT IS FURTHER SUBMITTED THAT THE A SSESSEE HAS DERIVED TOTAL SALES RECEIPTS OF RS.8,61,14,581/ - WHICH IS ALSO GETTING REFLECTED IN ITS AUDITED FINANCIAL STA TEMENTS FOR THE RELEVANT PREVIOUS YEAR AND OUT OF SUCH SALES RE CEIPTS, RECEIPTS IN CASH HAVE BEEN UTILIZED IN MAKING THE I MPUGNED CASH DEPOSITS. THEREFORE, IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY DELETED T HE ADDITION OF RS.67,71,000/- MADE ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONS SO MADE BY THE LEARNED AO ON AC COUNT OF CASH DEPOSITS IN BANK, BEING OUT OF THE RECORDED AND AVAILABLE CASH WITH THE ASSESSEE, DESERVE TO BE DEL ETED IN TOTO. LD. DR HAS RELIED ON THE ORDER OF THE ASSESSING OF FICER. (SS)240 OF 2013 MAYURI HEENA HERBALS 8 WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED TH E MATERIAL AVAILABLE ON RECORD. LOOKING TO THE FACTS AND CIRCU MSTANCES, WE FIND FROM THE REGULAR CASH BOOK OF THE ASSESSEES COMPANY THAT ON EACH AND EVERY OCCASION OF MAKING CASH DEPOSIT, THE ASSESSEE WAS H AVING SUFFICIENT CASH BALANCE. THE ASSESSEE HAD SHOWN RECEIPT OF CASH IN ITS REGULAR CASH BOOK FROM CASH WITHDRAWALS FROM THE SAME BANK ACCOUNT AN D AS ALSO FROM REALIZATION OF SALES PROCEEDS IN CASH, AS AGAINST S ALES AMOUNTING TO RS.8,61,14,581/- SHOWN IN THE AUDITED FINANCIAL STA TEMENTS. THE WITHDRAWALS OF CASH FROM THE BANK ARE VERIFIABLE FROM THE BANK BOOK AND BANK STATEMENT. BESIDES MAKING CASH DEPOSITS AMOUNTING TO RS.67,71, 000/-, WITH UCO BANK, THE ASSESSEE HAD ALSO MADE CASH WITHDRAWALS AMOUNTI NG TO RS. 73,00,000/- FROM THE SAME BANK, DURING THE RELEVANT PREVIOUS YE AR. THEREFORE, WE DO NOT FIND ANY REASON IN THE A.O.S ACTION IN NOT ACCEPTI NG THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THE SOURCES OF CASH DEPOSIT S IN BANKS. FURTHER, THE RATIO TAKEN IN THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KULWANT RAI (2007) 291 ITR (36) (DEL) AND ALSO OF H ONBLE KARNATAKA HIGH COURT IN THE CASE OF S.R. VENKATA RATNAM VS. CIT (1 981) 127 ITR 807 (KAR) SUPPORTS THE CASE OF THE ASSESSEE. NO CONTRARY MATE RIAL HAS BEEN PRODUCED BEFORE US BY THE REVENUE TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A). THUS, WE CONFIRM THE FINDINGS OF THE LEARNED CIT(A) ON THIS ISSUE. THIS GROUND OF APPEAL OF THE DEPARTMENT IS DISMISSED. DEPARTMENTAL GROUND NO.2 (SS)240 OF 2013 MAYURI HEENA HERBALS 9 THIS GROUND OF APPEAL IS GENERAL IN NATURE AND, TH EREFORE, NO SEPARATE ADJUDICATION IS REQUIRED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18.5.201 6. SD/- SD/- (B.C. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18.5.2016 COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE