Income Tax Appellate Tribunal - Chandigarh
Sh. Rajpal Singh, Mandi vs Ito, Mandi on 11 July, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH 'SMD', CHANDIGARH
BEFORE MS.DIVA SINGH, JUDICIAL MEMBER
AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.631/Chd/2017
(Assessment Year : 2009-10)
Shri Rajpal Singh, Vs. The Income Tax Officer,
Mandi. Ward Mandi.
PAN: ANDPS3266J
(Appellant) (Respondent)
Appellant by : Shri Tej Mohan Singh, Adv.
Respondent by : Shri Manjit Singh, Sr. DR
Date of hearing : 25.06.2018
Date of Pronouncement : 11.07.2018
O RDE R
PER ANNAPURNA GUPTA, A.M. :
Th i s a p p e a l h a s b e e n p r e f er r e d by t h e a s s es s e e ag a i n st t h e o r d e r o f L d. C o m m i s s i o ne r o f I n c o m e Ta x ( A p p e a l s ) , Palampur d a te d 27.1.2017 relating to a s s e ssm e n t year 2009-10.
2. Th e a s s e s s e e h as r a i s e d f o l l o wi n g g r o u n d s of a p p eal :
"1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in upholding the Assessing Officer's action of not considering the records presented before him, and estimating sales proceeds to the tune of Rs.50,00,000/-, applying NP ratio of 22.5% without any basis and making an addition of Rs.827440/-, which is arbitrary and unjustified .
2. That the Ld. Commissioner of Income Tax( Appeals) has further erred in upholding the Officer's contention as follows.
- Rs 751000/- and Rs 14,00,000/- addition on account of unsecured loan without considering the evidence placed before him, which is arbitrary and unjustified and need to be set aside.2 ITA No.631/Chd/2017
A.Y. 2009-10
3. That all the reasons mentioned in the order to make additions are based only on suspicion, conjectures and surmises and the same have been uphold by the Ld. CIT( Appeal) without any independent application of mind.
4. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the charging of interest under Section 234- B and C of the Act and other penalties which may not be chargeable in the facts of the case.
5. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.
6. The Appellant craves the leave to amend/add any grounds of appeal at the time of hearing."
3. G r o u n d N o. 1 w a s n o t p r e s se d b e fo r e u s . I n t h i s re g a rd t h e L d . c o u n s el f o r a s s e s s e e dr e w o u r a t t e n ti o n t o t h e s y n o p s i s o f i ts s u b m i s s i o ns p l a ce d b e f o r e u s w h er e i n i t w as c a t e g o r i ca l l y s t at e d t h at t he a s se s s e e pr a y e d n ot t o p r e ss the first ground of appeal regarding the arbitrary estimation o f i n c o m e b y t he A s s e s s i n g O f f i ce r f o r t h e f o l l o w i n g r e a s o n s :
"i) The unavailability of the old accountant in the absence of whom getting hold of the old accounts and records was not possible. (For your information, the assesse had filed income tax returns under section 44AD where the assesse was not required to maintain regular books of account.)
ii) Due to Bad health of the Assesse he cannot put in the desired efforts to arrange the required information and documents to support the first ground of appeal."
In view of the above, ground No.1 raised by the a s s e s s e e i s b e i n g d i s m i s s ed a s not p r e s s e d.
4. G r o u n d N o s .2 a n d 3 , i t w a s s ub m i t t e d , r el a t e to t h e c o m m o n i s su e of a d d i t i o n m a d e o n a c c o u n t of u n s e c u r e d l o a n s r e m ai n i n g u n - p r o v e d a m ou n t i n g t o Rs . 7 , 51 , 0 0 0 a nd Rs.14 lacs. Dr a w i n g o u r a t te n t i o n t o t h e f a c ts of t h e c a s e , 3 ITA No.631/Chd/2017 A.Y. 2009-10 a s e n u m e r at e d i n p a r a 5 . 1 o f t h e C I T( A p p e al s ) o rd e r , t h e L d. counsel for a ss e s s e e st a t e d th a t the said su m s were c r e d i t e d i n t h e ba n k a c c o u n t o f th e a s s e s s e e i n HD F C b a n k o n 4 . 2 . 2 00 9 ( R s. 1 4 l a c s) a n d i n P N B b an k o n 2 1 . 1 . 2 0 09 ( R s . 7 , 5 1 ,0 0 0 / - ) . Th e L d . c o u n se l f o r a ss e s s e e s t a t e d t ha t before t h e A s s es s i n g O f f i c er it had been contended that the same had been received from his son-in-law Sh.Gursev S i n g h a n d h i s fr i e n d S h . M ah a v ee r S i n g h r e s pe c ti v e l y , b u t t h e A s se s s i n g O ff i c e r m a d e t h e ad d i t i o n o f t h e sam e f o r t h e r e a s o n t ha t t h e y h a d r e m ai n e d un e x p l a i n ed b y t he a s s e s s ee a n d t h e s a m e w as u p h e l d b y t h e C I T( A p p e al s ) al so . Th e L d . c o u n s e l f or a s se s s e e i n t hi s r eg a r d s t a t ed t h a t a d e q u a te evidences to prove the i d en t i t y , g e n ui n en e s s a nd c r e d i t w o rt h i n e ss o f t h e d o n o r s h a d b e e n f i l e d b e f o r e t h e l o w e r a u t h o ri t i e s i n d i s c h a r g e o f th e o n u s o f t h e a s s e s s e e to e x p l a i n t h e a fo re s a i d c re d i t s i n t h e b a n k a c c o u nt . Th e L d . c o u n s e l f o r a s s es s e e s t a t e d t h a t t h e a f f i d a v i t s of b o t h t h e d o n o r s h a d b e e n f i l e d a n d d r e w o u r a t t e n t i on t o t h e s a m e p l a c e d a t P ap e r B o o k p a g e N os . 8 a n d 9 . Th e L d . c o u n s e l f or a s s e s s e e a l so s ta t e d t h a t c o p y of t h e b a n k s t a t em e n t o f t h e d o n o r s S h ri M ah a v e e r S i ng h f or R s . 7 , 5 1, 0 0 0 / - a n d S h ri G u r s e v S i n g h f o r R s . 1 4 l a cs h a d a l s o b e e n f i l e d . I t w a s a l s o p o i n t e d o u t th a t t h e a d d r e s s a nd P A N n u m b e r s o f t h e s a i d p e r s o n s h a d a l so b e e n f i l e d . Th e L d . c o u n s e l f or a s s e s s e e s t a t e d t h at t h e L d . CI T( A p p e a l s ) w i t h o u t a p pr e ci a t i n g t h e e v i d e n c e s f i l e d b e f o r e h er d i s m i s s e d t h e gr o u n d r a i s e d by the assessee by recording i n co r r e c t findings that the assessee had failed to s u b st a n t i a t e his e x p l a n a t i on 4 ITA No.631/Chd/2017 A.Y. 2009-10 r e g a r d i n g t h e n at u r e a n d s ou r c e o f t h e c r e di t s i n t h e b a nk a c c o u n t . Th e L d . c o u n s e l fo r a s s es s e e p r a ye d b e f or e u s t h at the m a t t er be restored back to the CI T( Ap p e a l s ) to a d j u d i c a te t h e i s s u e a f re s h i n t h e l i g ht o f t h e e v i d e n ce s f i l e d b y t h e a ss es s e e .
5. Th e L d . D R , o n t h e o t h e r h a n d , st a t e d t h a t a f a i r v i e w m a y b e t a k e n o n t h e i s s u e a n d re l i e d u po n t he or d e r o f t he authorities below.
6. W e h a v e h e a r d b o t h t h e p a rt i e s. W e ha v e al s o g o n e t h r o u g h t h e o r de r o f t h e CI T( A p p e a l s ) o n t he i s su e a t p a ra 5 . 3 a s u nd e r :
"5.3 I have considered the facts of the case and the written submissions of the appellant. The credit entries of Rs.14, 00,000/- and Rs.7, 51,000/- were found made in the bank account of the assessee with HDFC Bank and PNB respectively on 04.02.2009 and 21.01.2009. These entries were not included in the receipts from business stated by the assessee during assessment proceedings.
The assessee has not maintained any books of accounts in the regular course of business or in the regular course of the year. The AQ has not any where rejected the books of accounts as such u/s 145(3). The only books of accounts existing in the case of the assessee is his bank account statements. The said credits are found made in the bank a/c of the assessee. The contention of the assessee that once the AO had rejected the books of accounts, no further addition could be made u/s 68 of the Act on the basis of the same books of accounts is, therefore, not tenable.
The assessee failed to substantiate his explanation -regarding the nature and source of the credits in his bank account and discharge the onus cast upon him to explain the three ingredients of identity and credit worthiness of the creditors and the genuineness of transactions. The AO was thus justified to make an addition of Rs.21,50,000/- to the returned income of the assessee. Moreover, the addition made on a/c of estimate of net profit is Rs.11,25,000/- only while the unexplained cash credits are Rs. 21.50.000/-. The addition of Rs.21,50,000/- is upheld."5 ITA No.631/Chd/2017
A.Y. 2009-10 On going t h r o ug h the same, we find merit in t he c o n t e n t i on of th e Ld. counsel for assessee that the L d . CI T( A p p e a l s ) h a s a d j ud i c a t e d t h e i ss u e o f un e x p l a i n ed c a s h c r ed i t s wi th o u t d e al i n g wi th t h e e vi d e n c es f i l e d b y t h e a s s e s s e e . W e , t he r e f o r e , c o n s i d e r i t f i t t o re s t o r e t h e i s su e b a c k t o t h e fi l e o f t h e CI T( A p p e al s ) t o a d j u d i c a t e t h e s am e a f r e s h a f t e r c on si d e r i n g t h e e v i d en c e s f i l e d b y t h e a s s e s s e e and t h e r e a f t e r pa s s a s p e a k i n g or d e r . I t m a y b e a d d e d t h a t t h e a s s es s e e be g r a n t e d d u e o pp o r t u n i t y o f h e ar i n g i n t h i s regard.
I n v i e w o f t h e a b o v e , g r o un d of a p p e a l N o s .2 a n d 3 r a i s e d b y t h e as se s s e e a r e a l l o wed f o r s t at i s t i c a l p u r p o s e s .
7. Ground No.4 is c o n s e q u en t i a l and n e ed s no a d j u d i c a ti o n .
8. I n t h e r e s u l t , th e a p p ea l o f t he a s s e ss e e i s pa r t l y a l l o w e d f o r s ta t i s t i c a l p ur p o s e s.
O r d e r p r on o u n c ed i n t h e O p e n Cou r t .
Sd/- Sd/-
(DIVA SINGH) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 11 t h July, 2018
*Rati*
Copy to: s
1. The Appellant
2. The Respondent
3. The CIT(A)
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh
6 ITA No.631/Chd/2017
A.Y. 2009-10