Income Tax Appellate Tribunal - Jabalpur
Sanjay Kumar Jain, Chhindwara vs Income Tax Officer, Ward 2, Chhindwara on 4 June, 2024
ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019
Assessment Years: 2010-11 & 2011-12
Page 1 of 7
IN THE INCOME TAX APPELLATE TRIBUNAL
JABALPUR BENCH, JABALPUR
BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND
SHRI GAGAN GOYAL, ACCOUNTANT MEMBER
ITA No.7/JAB/2018
Assessment Year: 2010-11
Sanjay Kumar Jain, Income Tax Officer,
Prop. Girnar Oil Mills, Ward - 2,
Gandhi Ganj, Vs. Chhindwara (M.P.)
Chhindwara (M.P.)
[PAN - ADFPJ 9510 Q]
ITA No.33/JAB/2018
Assessment Year: 2010-11
Income Tax Officer -2, Sanjay Kumar Jain,
Chhindwara (M.P.). Prop. Girnar Oil Mills,
Vs. Gandhi Ganj,
Chhindwara (M.P.)
[PAN - ADFPJ 9510 Q]
ITA No.26/JAB/2019
Assessment Year: 2011-12
Sanjay Kumar Jain, Income Tax Officer,
Prop. Girnar Oil Mills, Ward - 2,
Gandhi Ganj, Chhindwara (M.P.)
Chhindwara (M.P.) Vs.
[PAN - ADFPJ 9510 Q]
(Appellant) (Respondent)
Assessee by Shri G.N. Purohit, Sr. Advocate & Uma, Advocate
Revenue by Shri Shiv Kumar, Sr. DR
Date of Hea ring 21.03.2024
Date of P ronounce ment 04.06.2024
ORDER
PER SUCHITRA KAMBLE, JUDICIAL MEMBER:
ITA No.7/JAB/2018 & 33/JAB/2018 are cross appeals filed by the Assessee
& Revenue against order dated 28.12.2017 passed by the CIT(A)-1, Jabalpur for the Assessment Year 2010-11 and ITA No.26/JAB/2019 is filed by the Assessee ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019 Assessment Years: 2010-11 & 2011-12 Page 2 of 7 against order dated 29.03.2019 passed by the CIT(A)-1, Jabalpur for the Assessment Year 2011-12.
2. Grounds of appeal are as under :-
ITA No.07/JAB/2018 for A.Y. 2010-11 (by Assessee)"1. The learned CIT(A) has erred in law and on facts of the case in upholding the validity of 148 notice. The notice issued by ACIT is without Jurisdiction same should be quashed and assessment should be annulled.
2. Without prejudice to the above ground the CIT(A) is not justified in confirming the addition of Rs.11,95,200/- as Income of the assessee. The transaction do not belong to the assessee the addition should be deleted
3. Without prejudice to the above ground the peak deposit for transactions in the name of assessee is only Rs.7,00,000/-, the addition should be reduced by Rs.3,00,000/-. The CIT(A) is not Justified in confirming addition of 10,00,000/-
4. The charging of net profit of 4% on the transections exorbitantly high and unjustified should be reduced reasonably."ITA No.33/JAB/2018 for A.Y. 2010-11 (By Revenue)
"1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in reducing the addition of Rs.1,93,39,000/- to Rs.11,95,200/- made by the AO treating the cash deposits made in the account of Shri Radheshyam Uikey as unexplained investment of the assessee, when it is clear that a part of cash deposits in the impugned bank account has been held by the CIT(A) to be belonging to the assessee (as highlighted in the appellate order), then the rest of the credit/deposits could not belong to the account holder, especially when detailed confessional statement had been given by the account holder. The Ld. CIT(A) has wrongly denied the authenticity of the statement of the account holder ignoring the fact that the transaction in the bank account lend credibility to the statement of the account holder."ITA No.26/JAB/2019 for A.Y. 2011-12 (By Assessee)
"1. The learned CIT(A) has erred in law and on facts of the case in confirming the addition of Rs.1,13,10,000/- for the total credits in the Indusind Bank Account of Radheyshyam Uike as belonging to the assessee. The addition should be quashed in toto.
ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019 Assessment Years: 2010-11 & 2011-12 Page 3 of 7
2. That there is no evidence on record to attribute the entire transactions in the bank account as belonging to the assessee. No addition can be made based on suspicion.
3. That the learned CIT(A) has applied Section 68 of the Income Tax Act to confirm the addition. The bank account of Radheyshyam Uike do not belong to the assessee, nor it is books of account of the assessee. Section 68 has no application to the facts of the case. The addition of Rs.1,13,10,000/- should be deleted."
4. Without prejudice to the above ground it is only the profit arising from the transaction that may be subject to tax, the entire turnover cannot be income of the assessee. The addition should be reduced reasonably."
3. Firstly, we are taking up Assessment Year 2010-11 in assessee's case being ITA No.7/JAB/2018. Notice under Section 148 of the Income Tax Act, 1961 in the name of the assessee was issued on 27.03.2015 by ACIT, Circle- Chhindwara. The same was served upon the assessee on 28.03.2015. In response to the said notice, the assessee submitted his copy of return which he has filed on 30.03.2011 for A.Y. 2010-11. The assessee asked for copy of reasons recorded for reopening the case which was given to him. Notice under Section 143(2) of the Act was issued on 14.09.2015. Notice under Section 142(1) of the Act along with questionnaire was issued on 06.01.2016. The assessee submitted reply on 21.03.2016. The Assessing Officer observed that from the perusal of return filed for A.Y. 2010-11, the assessee has shown income from house property at Rs.29,045/-, income from business/profession (Girnar oil Mill Wholesale Trading) at Rs.2,51,000/-, Sanjay Kumar Jain, Plying & Hiring of Goods Carriage under Section 44AE of the Act Rs.42,000/-. Therefore, total income from business declared was at Rs.2,93,000/- and the assessee has also shown Rs.3,393/- under the head "Other Sources of Income". As per the detailed report received from DIT (I&CI), Bhopal, the case was reopened on reasons that the Income Tax Department is in possession of information that a Savings Bank Account bearing no.0194-N88491-001 has been opened in the name of Shri Radheyshyam Uikey in IndusInd Bank, Chhindwara on 02.02.2010 and closed on 09.07.2010. During the Financial Year 2009-10 total cash of Rs.1,93,39,000/- was deposited on different dates in the said account and on the same date ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019 Assessment Years: 2010-11 & 2011-12 Page 4 of 7 payments were made to some parties. The Assessing Officer observed that the payments were made to Itarsi Oil and Flours Limited and these payments were made to the said Itarsi Oil and Flours Limited by M/s. Girnar Oil Mill. i.e. proprietary concern of the assessee. The Assessing Officer further noticed that the Company i.e. Itarsi Oil and Flours Limited admitted that vide letter dated 30.01.2016 that their company have entered into any transaction with Shri Radheyshyam Uikey and all the six receipts pertains to sale of Soya Refined Oil to M/s. Girnar Oil Mill. The statement of Radheyshyam Uikey wherein it is stated that he has no connection with above mentioned IndusInd Bank and has admitted that he worked for M/s Girnar Oil Mill, Chhindwara during the A.Y. 2009-10 and 2010-11 as Tanker Driver. For confirmation, he submitted copy of experience certificate issued by Shri Sanjay Jain, Proprietor of Girnar Oil Mill, Chhindwara. After taking cognizance of the records and the statement of Shri Radheyshyam Uikey, the Assessing Officer called upon the assessee to cross-examine all the concerned persons and on cross objection point the assessee intimated the Revenue Office that there is no question of cross objection of Principal Officer of Itarsi Oil and Flours Limited as well as there is no connection with Radheyshyam Uikey and the assessee has not availed of cross-examination. Therefore, the Assessing Officer made addition of Rs.1,93,39,000/-
4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
5. Ther Ld. AR submitted that the CIT(A) erred in upholding the validity of Section 148 notice as the said notice was issued by ACIT who is acting without any jurisdiction and the same should be quashed and the assessment should be annulled. The Ld. AR further submitted that the Assessing Officer ignored the fact that the assessee in the latest return of income for Assessment Year 2014-15 filed return of Rs.3,65,026/- and as per allocation of jurisdiction by CIT Jabalpur, the ACIT had no jurisdiction on the assessee's case. The Ld. AR further submitted that no prior approval was taken by the Assessing Officer and in fact there was no fresh material mentioned in the reasons recorded and satisfaction is a borrowed satisfaction.
ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019 Assessment Years: 2010-11 & 2011-12 Page 5 of 7
6. The Ld. DR in respect of ground no.1 categorically relied upon the Assessment Order as well as the order of the CIT(A) and further submitted that the Assessing Officer issued notice under Section 148 of the Act on 27.03.2015 and then the Assessing Officer has received a copy of report of ITO (I&C), Bhopal over Fax on 24.03.2015 which was duly placed on record. Thus, the Assessing Officer was having information in the possession at the time of issuing notice under Section 148 of the Act and the case was assigned to the ITO-2, Chhindwara vide order under Section 120 dated 09.12.2015 of the PCIT-1, Jabalpur. ITO-2 Chhindwara had issued notice under Section 148 for A.Y. 2011- 12 after obtaining approval of the PCIT-1 Jabalpur.
7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that from the perusal of reasons recorded which was submitted at page no.17 of the Paper Book field by the assessee, it categorically has given details as to why the Assessing Officer has reason to believe that income of Rs.1,15,55,000/- has escaped assessment and why notice under Section 148 of the Act needs to be issued. The reasons recorded were by DCIT Circle-Chhindwara on 27.03.2015 and in fact the assessee has given its reply dated 13.04.2015 under protest and filed the return as well. The reasons were not borrowed reasons and cannot be treated as borrowed satisfaction. As regards jurisdiction, the approval was rightly taken and DCIT has rightly issued the notice under Section 148 and, therefore, ground no.1 is dismissed.
8. As regards ground no.2, the Ld. AR submitted that the CIT(A) was not justified in confirming the addition of Rs.11,95,200/- as the transaction do not belong to the assessee. The Ld. AR submitted that out of 35 transactions, only 6 transactions in the name of the assessee cannot be said that the Bank Account is operated by the assessee. The Assessing Officer himself mentioned in the Assessment Order that all those deposits have been utilized for transferring funds to various Bank accounts through RTGS or drafts. Obviously, those are for purchases. The entire deposit can never be the income of the assessee. Assuming but not accepting that even if it is business carried on by any person, it is only the income earned that can be subjected to tax and not the gross turnover.
ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019 Assessment Years: 2010-11 & 2011-12 Page 6 of 7 The ld. AR further submitted that addition is solely based on statement of Radheyshyam Uikey and the transactions which was reflected was duly mentioned by the assessee and outside the books of accounts. The assessee has not received any goods or has purchased any goods. the Assessing Officer at no point of time has observed that the transaction is conducted without any received goods or without any purchases outside the books of account.
9. The Ld. DR relied upon the Assessment Order and the Order of the CIT(A).
10. We have heard both the parties and perused all the relevant material available on record. It is pertinent to mention that the assessee has been given opportunity to cross-examine Radheyshyam Uikey as well as the concerned parties that of Itarsi Oil and Flour Mill and Adishwar Oils and Fats Limited but the assessee has not availed the said opportunity. The observation of the CIT(A) that one Shri Dilip Marskole and Radheyshyam Uikey were working together for Shri Sanjay Jain, Proprietor, Girnar Oil has not been elaborated by the CIT(A). in fact, the CIT(A) has recorded that there is no dispute as relates to the fact that the Bank account in IndusInd Bank was in the name of Radheyshyam Uikey. There was no evidence as to whether the assessee was involved into the same or not. Merely on this statement the Assessing Officer has made the addition and in fact the evidences related to the assessee's account and the transactions mentioned in assessee's Bank account was not at all tallied with the transactions entered into in the account of Radheyshyam Uikey in IndusInd bank. The CIT(A) has given the estimation on the basis of earned net profit of 2.3% on sale and taken into account the incurred expenses other than purchase price and thus estimated the net profit at 4% on purchase price. But the very basis of the same about the amount reflected in the Bank statement of Radheyshyam Uikey whether actually pertains to the assessee or not has not been mentioned. Therefore, this addition and the estimation of addition done by the CIT(A) is not justified. Hence, ground no.2 is allowed.
11. As regards ground no.3, the same is alternate argument and hence it is dismissed. Thus, ITA No.7/JAB/2018 filed by the assessee for A.Y. 2010-11 is partly allowed.
ITA Nos.7 & 33/JAB/2018 & 26/JAB/2019 Assessment Years: 2010-11 & 2011-12 Page 7 of 7
12. As regards ITA No.33/JAB/2018 filed by the Revenue for A.Y. 2010-11, there is only one ground which is related to reducing the addition of Rs.1,93,39,000/- to Rs.11,95,200/-, the same is in consonance with ground no.2 of the assessee's appeal and hence the same is dismissed. Therefore, Revenue's Appeal being ITA No.33/JAB/2018 is dismissed.
13. As regards ITA No.26/JAB/2019 filed by the Assessee for A.Y. 2011-12, the observation given herein above in case of Bank operation related to Radheyshyam Uikey, we have categorically observed that the said account is not operated by the assessee and, therefore, addition will not sustain in this year as well. Hence, ITA No.26/JAB/2019 is allowed.
14. In the result, ITA No.7/JAB/2018 for A.Y. 2010-11 filed by the assessee is partly allowed, ITA No.33/JAB/2018 for A.Y. 2010-11 filed by the Revenue is dismissed and ITA No.26/JAB/2019 for A.Y. 2011-12 filed by the assessee is allowed.
Order pronounced in the open Court on this 4th June, 2024.
Sd/- Sd/-
(GAGAN GOYAL) (SUCHITRA KAMBLE)
Accountant Member Judicial Member
Jabalpur, the 4 th June, 2024
PBN/*
Copies to: (1) The appellant
(2) The respondent
(3) CIT
(4) CIT(A)
(5) Departmental Representative
(6) Guard File
By order
UE COPY
Assistant Registrar
Income Tax Appellate Tribunal
Jabalpur Bench, Jabalpur