SAJID ABANI, BILASPUR,BILASPUR V. INCOME TAX OFFICER, WARD-2(1), BILASPUR, BILASPUR

ITA 101/RPR/2024

AI Insights

The case involves Sajid Abani, a businessman engaged in providing crane services, who appealed against the orders of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi. The appeals were related to the assessment years 2013-14, 2014-15, and 2016-17, concerning additions made under Sections 68 and 69A of the Income-tax Act, 1961, due to unexplained cash deposits in his bank account. The A.O. had initiated proceedings under Section 147 and issued notices under Section 148, leading to additions in the assessee's income. The CIT(Appeals) upheld these additions, which were contested in the tribunal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 36538 (ITAT-RAIPUR)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 01-10-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 20-03-2024
• Other Referred Cases: Manoj Aggarwal vs. DCIT, Rupal Jain vs. CIT, Praveen Garg vs. ITO, K.V. Mathew vs. ITO, CIT vs. Sarwan Kumar Sharma, Ravinder Kumar Vs ITO, Roshan Di Hatti v. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: S.R RAO
• Keywords: Business income; Unexplained cash credit; Bonafide belief; TDS
• Section: 147; 148; 68; 113; 69A; 194C; 101

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 99, 100 & 101/RPR/2024 Ǔनधा[रण वष[ / Assessment Years : 2013-14, 2014-15 & 2016-17 Sajid Abani C/40, Chandela Nagar, Near Bhatiya Petrol Pump, Gaurav Path, Bilaspur (C.G.)-495 001 (C.G.) PAN: AGSPA3784B .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-2(1), Bilaspur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri S.R Rao, Advocate Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 01.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 08.10.2024 2 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The captioned appeals filed by the assessee are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 24.01.2024, which in turn arises from the respective orders passed by the A.O under Sec. 147 r.w.s.144B of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.03.2022 for the assessment years 2013-14, 2014-15 and 2016-17. As common issues are involved in the captioned appeals, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. I shall first take up the appeal filed by the assessee in ITA No.99/RPR/2024 for assessment year 2013-14, wherein the assessee has assailed the impugned order on the following grounds of appeal: “1. In the facts and circumstances of the case and in law, the initiation of proceedings is illegal and without jurisdiction being made without fulfilling all the stipulated conditions under section 147 of the Income-tax Act, 1961 read with section 148, 151 of the Act, hence the assessment order passed on such illegal initiation is ex-facie illegal and non-est. 2. In the facts and circumstances of the case and in law, the assessment order passed u/s.143(3) r.w.s.147 and sec.144B of the Income-tax Act, 1961 without issuing notice u/s.143(2) of the Act is illegal and void ab initio. 3. In the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in dismissing appellant's appeal assailing addition of 3 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 Rs.13,72,200/- made u/s.68 of the Income-tax Act, 1961 treating it as made u/s.69A of the Act without considering facts of the case in their entirety. 4. The impugned order is bad in law and on facts. 5. The appellant reserves the right to add, alter, omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority.” 3. Succinctly stated, the assessee who is engaged in the business of providing crane service facilities, had filed his return of income for A.Y.2013-14 on 24.03.2014, declaring an income of Rs.3,30,790/-. 4. As per information, it was observed by the A.O that the assessee had during the subject year made cash deposits of Rs.15,27,000/- in his bank account. The A.O on a perusal of the return of income filed by the assessee, observed that there was a huge variation between the turnover declared in the return of income and cash deposits made in his bank account. Accordingly, the A.O holding a bonafide belief that the income of the assessee chargeable to tax had escaped assessment, initiated proceedings u/s.147 of the Act. Notice u/s.148 of the Act, dated 31.03.2021 was issued to the assessee. 5. During the course of the assessment proceedings, the A.O issued “Show Cause Notice” (SCN) to the assessee to put forth an explanation as to why the cash deposits of Rs.15,27,000/- may not be treated as unexplained cash credit u/s. 68 of the Act. In reply, the assessee filed an 4 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 explanation as regards the source of the subject cash deposits and produced supporting documentary evidence. It was stated by the assessee that he had during the subject year made cash deposits of Rs.13,72,000/- and not Rs.15,27,000/-. The A.O, observing that the amount of cash deposits of Rs.13,72,200/- remained unexplained by the assessee, thus, made an addition of the same u/s. 69A of the Act. Accordingly, the A.O vide his order passed u/s.144 r.w.s. 144B of the Act, dated 29.03.2022after making the aforesaid addition, determined the income of the assessee at Rs.17,02,990/-. 6. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “8. I have considered the order of AO, written submission of the appellant, in detail. The appellant had filed his original ITR but failed to e-verify the same. The same position exists for other two assessment years (Asstt. Years 2014-15 and 2016-17) in appeal. The case of the appellant was taken up u/s 147 in view of information of huge cash deposits from ADIT (Inv.). The appellant filed objection to reopening which was disposed of. The appellant filed ITR in response to notice u/s 148 and e-verified the same on 17.01.2022. The AO found that regarding cash deposits, the appellant stated that the same is from private parties and belongs to his & his wife's business income. The AO found that there was a huge variation between the turnover declared in the ITR and the total cash deposits in the bank account. The appellant contended that no books of account are required to be maintained as he filed the ITR under presumption basis and that the nature of business requires to deposit cash against crane service rendered to some parties. The addition in the final page of the assessment order is shown to be made u/s 69A only and not under section 68. Further, in the other assessment year order for A.Y. 2016-17, the 5 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 addition was made u/s 69A only and is hence, covered vide provisions of section 292B as the addition was in accordance with the intent and purpose as per act to bring undisclosed income to tax as here the turnover declared in the ITR did not match with the cash and credit entries in the bank account. When entries are not reflected even in Form-26AS and parties are not deducting TDS u/s 194C etc. the onus of appellant was heavier to be discharged in order to demonstrate and prove that the cash deposits were for crane hiring services, etc. and why the same were not declared in the ITR. No such reconciliation was filed by the appellant besides ledger confirmation and copy of ITR and relevant bank statements of such parties. 9. The onus was on the appellant to file the requisite details and evidences, which the appellant has failed to do so. The appellant has failed to submit any cogent document or even any indirect supporting material to enable AO to examine the veracity of said claim. The appellant has failed to discharge its primary onus of explaining and nature and source of cash deposits and in this regard, reliance is placed on rationale held in the cases of:- 1. Manoj Aggarwal vs. DCIT 113 ITD 377 (ITAT-Delhi) (2008) — where assessee not maintaining books of account, though Section 68 will not be applicable, yet cash deposit in bank should be explained by assessee u/s 69/69B — unless any clinching evidence, shows nature and source of money deposited in the bank account, same should be added as his unexplained income — yes 2. In the case of Rupal Jain vs. CIT, 152 taxmann.com 346 (SC) (2023), it was held that even if assessee had disclosed source of deposit but could not establish its nature thereof, the addition made was justified. 3. Praveen Garg vs. ITO 132 taxmann.com 142 (Delhi-ITAT) (2021) —Appellant failed to explain the source of cash deposits — CIT(A) justified in upholding entire cash deposits as unexplained u/s 69A. 4. K.V. Mathew vs. ITO 42 taxmann.com 571 (Kerala High Court) (2014) — Where the amount in SB account remained unexplained, addition u/s 69A was justified. 5. CIT vs. Sarwan Kumar Sharma 49 taxmann.com 101 (Gujarat) —Addition u/s 69A was confirmed in the absence of documentary proof that deposits is from business/ trading in clothes. 6 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 6. Ravinder Kumar Vs ITO [2020] 118 taxmann.com 166 (Delhi)/[2020] 273 Taxman 369 (Delhi) wherein it was held that where assessee had failed to produce any aerial to authenticate his contention that cash deposits in his account were on account of sales being made by him from Kirana business, tax authorities were justified in making addition of unexplained cash entries in bank account in hands of assessee. 7. Roshan Di Hatti v. CIT [1992] 2 SCC 378 (SC) wherein it was held that i the assessee fails to discharge the onus by producing cogent evidence and explanation, the AO would be justified in making the additions back into the income of the assessee. The appellant failed to furnish any cogent evidence or indirect evidence regarding justification for nature and source of cash deposits not declared in the turnover/ ITR. Hence, in view of above discussion, the order of the AO, holding amount of Rs.13,72,200/- added as unexplained money for taxing u/s 69A, cannot be interfered with. Hence, the addition is sustained. Thus, Ground Nos. 1 to 3 of the appellant are dismissed.” 7. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the tribunal. 8. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 9. Shri S.R. Rao, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold had assailed the validity of the jurisdiction that was assumed by the A.O for initiating proceedings u/s.147 of the Act, for the reason that the approval of the Pr. CIT-1, Raipur u/s. 151 of the Act was obtained through the Jt. CIT, Bilaspur who had no jurisdiction over 7 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 the case of the assessee. The Ld. AR after arguing for some time on the aforesaid aspect, had chosen not to carry the same any further. 10. Apropos the Ld. AR’s claim that no formation of a bonafide belief regarding escapement of income chargeable to tax can be gathered from a perusal of the “reasons to believe” on the basis of which proceedings u/s. 147 of the Act had been initiated in the case of the assessee, I am unable to persuade myself to concur with the same. As there was sufficient material before the A.O, i.e. cash deposits of Rs.15.27 lacs in the assessee’s bank account No.164010100112543 with Axis Bank, Branch: Bilaspur, which as per the A.O could not be held to have been sourced from the business receipts disclosed in his return of income for the subject year, to arrive at a bonafide belief about the escapement of the assessee’s income, therefore, no infirmity did emerge as regards the formation of bonafide belief on the part of the A.O for initiating proceedings u/s. 147 of the Act. As observed by the Hon’ble Apex Court in the case of Raymond Woollen Mills Ltd. Vs. Income-Tax Officer And Ors. (1999) 236 ITR 34 (SC), what is required for validly initiating proceedings u/s.147 of the Act is the availability of some material on the basis of which the department could reopen the case and the sufficiency and correctness of the said material is not a thing to be considered at the stage of reopening. Accordingly, in the backdrop of the judgment of the Hon’ble Apex Court in 8 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 Raymond Woolen Mills Ltd. (supra), the challenge thrown by the Ld. AR to the validity of the jurisdiction assumed by the A.O u/s 147 of the Act, being devoid and bereft of any merit is rejected. 11. Apropos the merits of the case, the Ld. AR submitted that the amount of cash deposits of Rs.15.27 lacs (supra) made in the subject bank account during the year under consideration formed part of the gross receipts of Rs.24 lacs of his business of crane hiring charge. The assessee had in his return of income disclosed income from “crane hiring charges” of Rs.24 lacs. As is discernible from the assessment order, the A.O had stated that the assessee’s bank account revealed receipt of payments from viz. (i) M/s. Prakash Industries; (ii) M/s. Adani Power Ltd; and (iii) Chhattisgarh Electricity Board. On being queried as to whether or not the assessee had received any part of the crane hiring charges from the aforementioned three parties, viz. (i) Prakash Industries; (ii) Adani Power Ltd; and (iii) Chhattisgarh Electricity Board, Ld. AR submitted that during the subject year no amount of crane hiring charges from the aforesaid parties was received by the assessee. It was the claim of the Ld. AR that the amount of Rs.24 lacs of crane hiring charges comprises of cash receipts for providing the said services from private parties. As the assessee had in his reply filed before the A.O, Page 27-29 of APB stated that he was in receipt of crane hiring charges/rent from three parties, viz. 9 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 (i) Prakash Industries; (ii) Adani Power Ltd; and (iii) Chhattisgarh Electricity Board, therefore, his claim of not having received any crane hiring charges from the aforementioned parties is proved to be correct. Also, it is incomprehensible that the said multinational concerns /government company would have made cash payments to the assessee for crane hiring charges. Although, the Ld. AR on 24.09.2024 was specifically directed to provide a breakup of the crane hiring charges of Rs.24 lacs (supra) that was disclosed by him in his return of income, and had been brought to tax under deeming provisions of Section 44AE of the Act, but I find that no such details despite specific directions had been placed on record. 12. Per contra, the Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 13. The Ld. AR on specifically being queried whether he wants to advance any other contention qua the issues involved in the present appeal, answered in negative. 14. I have given a thoughtful consideration to the contentions of the Ld. Authorized Representatives of both the parties. As the facts as had been canvassed by the Ld. AR before me neither emanates from the record nor has been filed before me any material which would support the same, 10 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 therefore, I am of a firm conviction that the matter in all fairness requires to be restored to the file of the A.O with a direction to verify the correctness of the aforesaid claim of the assessee. Needless to say, the A.O in the course of the set-aside proceedings shall afford a reasonable opportunity of being heard to the assessee. In case, the assessee is able to substantiate his claim before him based on supporting documentary evidence that the amount of cash deposits of Rs.15.27 lacs (supra) was in fact sourced out of the crane hiring charges of Rs.24 lacs which had already been subjected to tax as per the deeming provisions of Section 44AE of the Act, then the addition to the said extent shall stand vacated. Thus, the Grounds of appeal raised by the assessee are allowed for statistical purposes in terms of the aforesaid observations. 15. In the result, appeal of the assessee in ITA No.99/RPR/2024 for A.Y.2013-14 is allowed for statistical purposes in terms of the aforesaid observations. ITA Nos.100 & 101/RPR/2024 A.Y.2014-15 & 2016-17 16. As the facts and issues involved in the captioned appeals filed by the assessee remains the same as were there before me in the aforementioned appeal, i.e. ITA No.99/RPR/2024 for assessment year 2013-14, therefore, my order therein passed while disposing off the said appeal shall apply 11 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 mutatis-mutandis for disposing off the captioned appeals, i.e., ITA Nos. 100 & 101/RPR/2024 for A.Ys.2014-15 & 2016-17. In this case also, I, restore the matter to the file of the A.O with similar directions as were given by me in ITA No.99/RPR/2024 for A.Y.2013-14. 17. In the result, appeals of the assessee in ITA No.100 & 101/RPR/2024 for A.Y.2014-15 & 2016-17 are allowed for statistical purposes in terms of the aforesaid observations. 18. Resultantly, all the appeals of the assessee are allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 08th day of October, 2024 Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 08th October, 2024 *****SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, 12 Sajid Abani Vs. ITO-2(1), Bilaspur ITA Nos. 99 to 101/RPR/2024 // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "