Income Tax Appellate Tribunal - Amritsar
Arvinder Pal Singh, Jalandhar vs Department Of Income Tax on 27 February, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
AND SH. B.P. JAIN, ACCOUNTANT MEMBER
I.T.A. No. 304(Asr)/2013
Assessment year: 2009-10
PAN: ASYPS0389N
The Income Tax Officer, Vs. Sh. Arvinder Pal Singh,
Ward-III(1), Jalandhar 197-Defence Colony, Jalandhar
(Appellant) (Respondent)
Appellant by: Sh. Mahavir Singh, Sr. DR
Respondent by: Sh. Anand M. Chopra, CA
Date of hearing: 27.02.2014
Date of pronouncement: 28.02.2014
ORDER
PER BENCH
1. The Revenue has filed the present appeal against the impugned order dated 14.02.2013 passed by learned CIT(A), Jalandhar, for the assessment year 2009-10 on the following grounds:
i. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax-(Appeals) has erred in deleting the addition of Rs. 23,09,500/- made by the A.O. on account of unexplained cash deposits in the bank account of the assessee ignoring the fact that there were no withdrawal from assessee' bank account for the purpose of business expenses whereas assesses claimed that cash deposits representing business receipts.2
I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 ii. It is prayed that the order of the learned Commissioner of Income Tax(Appeals) be set-aside and that of the Assessing Officer be restored.
iii. The appellant requested for leave to add or amend or alter the ground of appeal before the appeal is heard and disposed of.
2. The facts narrated by the Revenue are that the assessee in the status of individual filed his return of income of Rs. 1,88,290/- on 30.03.2010 which was processed under Section 143(1) of the Income Tax Act, 1961 (in short "the Act") on 05.09.2010. The case of the assessee was selected for scrutiny by issuing a notice under Section 143(2) of the Act on 03.09.2010, which was served on 08.09.2010. The Assessing Officer issued a questionnaire along with the notice under Section 142(1) of the Act on 06.06.2011. In response to the same, the authorized representative appeared and furnished information. The Assessing Officer examined the details furnished by the assessee and was of the view that the assessee is doing business of 'Consultancy for overseas Visa" and has shown income under the head "Income from Business/Profession". The Assessing Officer received information through the 'Annual Information Return' filed by the Standard Chartered Bank that there were cash deposits in saving bank account of the assessee, during the year under consideration, at Rs. 16,32,000/-. The 3 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 assessee, vide questionnaire dated 06.06.2011, was asked to give the details of bank accounts being maintained by him and the sources of credit entries in these accounts. In response to the same, the assessee vide reply dated 17.10.2011, stated that besides saving bank account number 71510027082 with Standard Chartered Bank, he was also having a saving bank account with Punjab National Bank bearing account no. 1549000100127033 and a current account with Punjab and Sind Bank (A/c no. 2293 in the name of M/s Arora Enterprises). The assessee was again asked, vide order sheet entry dated 01.11.2011 to explain the sources of credit entries in the bank accounts maintained along with supporting evidence. He filed his reply on 03.11.2011, the relevant portion of which is being reproduced below:
"5. That the credit entries in S/B account represent the business receipts on which an estimated income of about Rs. 18000/- per month as earned, has been calculated. I am not maintaining the books of accounts but have declared the profit above than 5% on the gross receipts/Sale in accordance with the Sec. 44AF of the Income Tax Act. The nature of my business includes consultancy to the abroad going students on Education Visa or otherwise and the amount paid by them for meeting expenses relating to the requisite expenses for preparing the file as per the required formalities, is deposited in the bank and subsequently withdrawn for the purpose as and when needed."
3. On the same date i.e. 03.11.2011, vide order sheet entry, the assessee was asked to furnish the justification of business income shown 4 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 vis-à-vis deposits made in Standard Chartered Bank, Punjab National Bank and Punjab and Sind Bank and the proceedings were adjourned for 11.11.2011, which was again adjourned to 17.11.2011 at the request of the counsel of the assessee. On 17.11.2011, nobody attended the proceedings, thereafter, a detailed show-cause notice was issued to the assessee on 25.11.2011. The contents of the notice dated 25.11.2011, are reproduced as under:
"Kindly refer to the proceedings resting with the undersigned concerning your Income tax assessment for the assessment year 2009-10.
Vide questionnaire dated 06.06.2011, you were requested to furnish details of bank accounts, being maintained by you, along with sources of deposits made in these accounts, along with supported evidence. As per your replies filed on 17.10.2011 and 03.11.2011, you were maintaining following three bank accounts:-
i. Saving bank account number 1549000100127033 with Punjab National Bank, Defence Colony, Jalandhar. ii. Saving bank account no. 71510027082 with Standard Chartered Bank, Jalandhar.
iii. Current account 2293 in the name of M/s Arora Enterprises in Punjab and Sind Bank, G.T. Road.
It was further stated that credits in saving bank account represented business receipts on which income of Rs. 18,000/- per month has been earned and that in the absence of books of account, profit above 5% had been declared in accordance with section 44AF of the Income Tax Act. As per your return of income, income from business has been taken at Rs. 2,24,860/-.5
I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 Your reply vis-à-vis credit entries in bank accounts have been examined and it is noticed that most of the deposits in bank accounts are on account of cash and most of the withdrawals are for repayment of loan, payments at retail stores etc. These accounts, particular saving bank account with Standard Chartered Bank and Punjab National Bank, do not reflect any payments made for meeting the business expenses.
In view of the above observations, you are hereby requested to explain as to why the deposits in these bank accounts be not treated as your income from undisclosed sources.
For the above, your case is fixed for 02.12.2011 at 11:00 A.M. Notice u/s 142(a) is enclosed for compliance. Please note that in case of non- compliance or non-furnishing of information and supporting evidence, the assessment in your case would be completed on the basis of material available on record."
4. In compliance of the said notice, neither the assessee nor the authorized representative of the assessee appeared nor filed any application for adjournment which shows that the assessee is nothing to say in the matter and the Assessing Officer has given his findings in para nos. 3.4 to 3.7 and 4 to 6 at page nos. 3 to 7, which are reproduced as under:
"3.4 The assessee made cash deposits in his three bank accounts as under:
Sl. Name of the Bank Account Number Cash
No. deposits
1. Standard Chartered 71510027082 16,32,000/-
Bank
2. Punjab Nation Bank 1549000100127033 1,92,000/-
3. Punjab and Sind Bank 2293 4,85,500/-
6
I.T.A. No. 304(Asr)/2013
Assessment year: 2009-10
Total 23,09,500/-
3.5 The assessee has been time and again asked to furnish the
sources of these cash deposits, with supporting evidence. As per provisions of Section 69 of the Act, the onus to explain the sources of acquisition of amount deposited in his bank account is only him only. The reply furnished by the assessee is not supported by any evidence.
3.6 In the light of facts of the case, the following points emerge in the case.
The assessee owned and deposited cash of Rs. 23,09,500/- in his bank accounts with Standard Chartered Bank, Punjab National Bank and Punjab and Sind Bank. The onus to explain the sources of the said deposits has not been discharged by him. The only explanation furnished by the assessee regarding these deposits, as per his reply dated 03.11.2011, is that the credits represented his business receipts, on which estimated income of Rs. 2,24,860/- had been declared in the return of income filed. There were total deposits of Rs. 23,09,500/- in these accounts. The assessee has not substantiated that how his net income from these deposits comes to Rs. 2,24,860/- only.
The assessee had not maintained any books of account. Therefore, veracity of his income at Rs. 2,24,860/- cannot be made. A perusal of these accounts show that most of the deposits were in cash whereas withdrawals had been made for repayment of loans of ICICI Bank(housing loan), GE Money, payments made at different retail stores viz. Kapsons Fashion, Pyramid Mega Store, Meena Bazar, Woodland, Will Lifestyle and Newtons Arcade etc. Most of these payments were on account of his personal expenses and as per narration given against debit entries of these bank accounts, no expense relating to the business had been made through debit to these accounts. Even cash withdrawals from these accounts were not much, which could have been utilized for the business expenditure. Therefore, total credits in these accounts represent the income of the assessee.
The assessee was given amble opportunity to explain the sources of these deposits in his bank account. He has failed to attend the 7 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 office or furnish any explanation on 17.11.2011 and in response to show cause notice dated 25.11.2011, wherein he was specifically asked to explain as to why the deposits in the bank accounts be not treated as his income from undisclosed sources. His silence on the matter means his acceptance to the fact that he was having income from undisclosed sources, which had been deposited in his bank account.
In his earlier reply dated 01.11.2011, the assessee stated that he was in the business of giving consultations to the students for studies in abroad and in his reply dated 03.11.2011, he has claimed that his profit was above 5% of gross receipts in accordance of section 44AF of the Act. The case of the assessee, in view of business being carried out by him, is not covered by the provisions of Section 44AF which is applicable to the retails traders. Further, the nature of credits/debits in the bank account itself show that the credit entries in bank accounts were not his gross receipts of the year and hardly any debit was utilized for the business expenses. The assessee had not led any evidence to show that total receipts of his business had been credit in these bank accounts. Even if for arguments sake, it is admitted that the credits represented his gross receipts, there are no expenses relevant to the business, from these accounts which would have reduced his income from the receipts. The assessee has not declared the interest earned from his saving bank account in his return of income, which clearly shows his intention to hide the said bank accounts.
3.7 Considering the facts and circumstances of the case, discussion made above and the legal requirement, the unsubstantiated and unsatisfactory explanation of the assessee is hereby rejected. Therefore, it is held that the assessee has failed to explain the nature and sources of acquisition of cash aggregating to Rs. 23,09,500/-, deposited in his bank accounts and the explanation furnished by him is unsatisfactory. Accordingly, the sum of Rs. 23,09,500/- is held to be his unexplained investment and assessed as his income for the financial year 2008-09 relevant to the assessment year 20009-10.
The assessee has furnished inaccurate particulars of his income to the tune of Rs. 23,09,500/-. Therefore, penalty proceedings u/s 271(1)(c) of the Act are being initiated separately.8
I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10
4. Interest from Saving Bank Account During the year under consideration, the assessee earned interest on his saving bank accounts as under, which has not been declared in the return of income filed:-
Standard Chartered Bank 5380/-
Punjab National Bank 246/-
Total 5626/-
The interest from saving bank accounts is chargeable to tax and the assessee has failed to declare the same in his return of income. Accordingly, an addition of Rs. 5,626/- is made on this account.
The assessee has concealed particulars of his income to the tune of Rs. 5,626/- on this account. Therefore, penalty proceedings u/s 271(1)(c) of the Act are being initiated separate on this account.
5. Deduction u/s 80C In his return of income, the assessee has claimed deduction u/s 80C at Rs. 36,567/- which includes deduction on account of tuition fee of children at Rs. 14,120/-. The assessee was asked to furnish evidence in respect of the said claim. However, he has not filed any evidence in respect of tuition fee paid. The same is accordingly disallowed.
The assessee has furnished inaccurate particulars of his income to the tune of Rs. 14,120/-. Therefore, penalty proceedings u/s 271(1)(c) of the Act are being initiated separately on this account.
6. The assessee has failed to attend proceedings on 02.12.2011, in response to notice u/s 142(a) of the Act dated 25.11.2011. Therefore, penalty proceedings u/s 271(1)(b) of the Act are being initiated separately.9
I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 In view of above discussion, income of the assessee is computed as under:
Returned Income 1,88,290
Add:- Unexplained credits in bank accounts (Para3) 23,09,500
Interest from saving bank account (Para 4) 5,626
Disallowance of deduction u/s 80C (Para 5) 14,120
Total Assessed Income Rs. 25,17,536/-
Tax on above Rs. 6,60,262
Surcharge Rs. 66,026
Education Cess Rs. 21,786
Interest u/s 234A Rs. 44,886
Interest u/s 234B Rs. 2,46,873
Total tax payable Rs.10,39,836/-
Less:- Already charged u/s 143(1) Rs. 4,256/-
Balance tax payable Rs. 10,35,580/-
Penalty notice u/s 271(1)(c) of the Income Tax Act, 1961 has been separately issued, for concealing particulars of income, as discussed in para 3, 4 & 5.
Penalty notice u/s 271(1)(b) of the Income Tax Act, 1961 has been separately issued, for non-compliance, as discussed in para 6.
Assessed. Issue requisite documents to the assessee.
The Assessing Officer completed the assessment on 05.12.2011 under Section 143(3) of the Act.
5. Aggrieved with the assessment order dt. 05.12.2011, the assessee filed any appeal before the learned first appellate authority, who vide impugned order dated 14.02.2013, partly allowed the appeal filed by the 10 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 assessee. Now, the Revenue being aggrieved with the impugned order dated 14.02.2013 , filed the present appeal.
6. At the time or hearing, learned DR relied upon the order passed by the Assessing Officer and stated that the assessee remained non- cooperative before the Assessing Officer and filed the additional evidence before the learned first appellate authority which has wrongly been accepted by him. He requested that the order of the Assessing Officer may be upheld and the impugned order may be cancelled.
7. On the contrary, learned counsel for the assessee stated that the assessee in this case is engaged in the business of "Consultancy for Overseas Student Visa" of different countries specially student visa for different countries like U.K., Australia etc. In student visa cases student comes to the consultant for getting his/her student visa for study abroad. He had to pay admission fee & Registration fees of the college, Consultancy Charges, visa fee of the country concerned and other charges depending on the desired country and the documents required by the Visa Counsellor and then receive money from student in advance. The money is received in advance from the student to pay for college/university fees to the concerned consulate, purchase of Air Ticket 11 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 and fees for the consultancy. The assessee had maintained three books of account during the year under consideration, which was disclosed by the assessee to the Assessing Officer. Keeping in view the account of the assessee, one can easily come out with the opinion that cash is deposited and withdrawn from these account very often. Deposits of cash to these accounts are sourced from income of the assessee received from consultancy from student cash received from the spouse of the assessee, advance received from the student/clients for various expenses on their behalf. The assessee is a regular income tax assessee since 2003. He is having income from House property and Business. But unfortunately all these facts were not properly presented before learned Assessing Officer during the assessment proceedings and the counsel of the assessee did not appear before the learned Assessing Officer for the reason better known to him. Due to the negligence on the part of the assessee's counsel, the assessee had to suffer mental as well as physical harassment. Learned counsel for the assessee stated that due to the negligence of the counsel for the assessee, assessee should not have been suffered. He further stated that the assessee through his earlier counsel could not produce necessary evidence, as required by the Assessing Officer, but after changing the 12 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 counsel, the assessee filed his appeal before the learned first appellate authority and filed an application under Rule 46A of the Income Tax Rules, 1962. The learned first appellate authority after obtaining the comments from the Assessing Officer has admitted the additional evidence filed by the assessee and rightly deleted the addition in dispute. He has stated that the assessee has filed all documentary evidence before the learned first appellate authority as well as before this Bench for perusal. He requested that the impugned order passed by the learned first appellate authority may be upheld by dismissing the appeal filed by the Revenue.
8. We have heard both the parties and perused the relevant records available with us, especially the orders passed by the revenue authorities and the evidence filed by the assessee in the shape of paper book and our findings are as under:
8.1 We have examined the assessment order dated 05.12.2011 and we are of the view that the assessee filed his return of income on 30.03.2010 declaring an income of Rs. 1,88,290/- which was processed by the Assessing Officer under Section 143(1) of the Act on 05.09.2010.
The case of the assessee was selected for scrutiny by issuing a notice 13 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 under Section 143(2) of the Act on 03.09.2010 and detailed questionnaire along with the notice under Section 142(1) of the Act was also issued to him. In response to the same, Sh. Naresh Chawla, Advocate, attended the proceedings from time to time and furnished informations before the Assessing Officer. The assessee is doing business of 'Consultancy for overseas Visa" and has shown income under the head "Income from Business/Profession". The Assessing Officer, on the information, found that during the year under consideration there were cash deposits in saving bank account of the assessee, amounting to Rs. 16,32,000/-. The assessee, vide questionnaire dated 06.06.2011, was asked to give the details of bank accounts being maintained by him and the sources of credit entries in these accounts. The assessee himself disclosed before the Assessing Officer about the other bank accounts maintained by him. The Assessing Officer again asked the assessee, vide order sheet entry dated 01.11.2011 to explain the sources of credit entries in the bank accounts maintained along with supporting evidence. In response to this query, he filed his reply on 03.11.2011, the relevant portion of which is under:
"5. That the credit entries in S/B account represent the business receipts on which an estimated income of about Rs. 18000/- per month as earned, 14 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 has been calculated. I am not maintaining the books of accounts but have declared the profit above than 5% on the gross receipts/Sale in accordance with the Sec. 44AF of the Income Tax Act. The nature of my business includes consultancy to the abroad going students on Education Visa or otherwise and the amount paid by them for meeting expenses relating to the requisite expenses for preparing the file as per the required formalities, is deposited in the bank and subsequently withdrawn for the purpose as and when needed."
8.2 After giving the reply dated 03.11.2011, the Assessing Officer again asked the assessee to furnish the justification of business income shown in the aforesaid bank accounts and adjourned the proceedings many times but neither the assessee nor his authorized representative appeared. Lastly, the Assessing Officer completed the assessment due to the lack of evidence and non-cooperation by the assessee and made addition in dispute vide assessment order dated 05.12.2011 passed under Section 143(2) of the Act.
8.3 We are of the view that the Assessing Officer has not clearly written in his order that whether he has sent notice directly to the learned counsel for the assessee in the assessment proceedings or not. In the case of the assessee, Sh. Naresh Chawla, Advocate, remained non-cooperative in the assessment proceedings on behalf of the assessee. As per record, it has been mentioned that the Assessing Officer had issued a direct notice to the assessee informing that the assessee's counsel has not responding 15 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 to the proceedings and directed the assessee to appear in person or through his counsel. Whatever the informations furnished by the assessee, has been examined by the Assessing Officer and completed the assessment on the basis of informations and unfortunately the addition in dispute has been made by the Assessing Officer without any efforts to serve the assessee in the absence of his counsel. But the law has provided another opportunity to the assessee by filing the appeal against the assessment order by engaging another counsel Sh. Anand Chopra, CA, who thoroughly examined the case of the assessee and do needful in the case of the assessee by filing the application under Rule 46A of the Income Tax Rules, 1962, which the learned first appellate authority has accepted after adopting the prescribed procedure under the law and deleted the addition in dispute.
8.4 It is very much relevant that the assessee filed his evidence including copies of letter of offers to the students from Overseas Schools/Colleges, copy of income tax return of his wife. Smt. Parvinder Arora and list of students from whom advances were received and copy of cash accounts. All these documents have been filed by the assessee in the shape of additional evidence. Learned CIT(A) forwarded the same to 16 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 the Assessing Officer for his comments with the direction to make inquiry by calling the assessee's books of account and other materials in connection with the issue involved in the appeal and learned CIT(A) fixed the appeal on 21.11.2012 before him.
8.5 In compliance of the order of CIT(A) for getting the comments from the Assessing Officer and making the inquiry, the Assessing Officer sent a letter to the assessee on 16.11.2012 and asked many questions from the assessee and called various documentary evidence for substantiating the claim of the assessee. The same was filed by the assessee as per direction of the Assessing Officer. The Assessing Officer thoroughly examined the documentary evidence filed by the assessee on the issue in dispute and sent his report no. 6152 dated 21.01.2013. For the sake of convenience, the contents of the said report is reproduced below:
"A questionnaire dated 16.11.2012 was issued by me to the above noted assessee which was served on the assessee by hand as well as by post. The relevant queries raised are reproduced below sir:
In order to adjudge the admissibility and genuineness of the additional evidence, you are required to furnish the following information/documents:-
1. Evidence that you have paid the University/college fee of the concerned students from whom you have claimed to have received cash payments:17
I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10
2. Evidence that you had some affiliation with the University/college abroad to whom you had referred the students for studies.
3. Details of consultancy charges and fee received by you with relevant documents/vouchers.
4. Produce the students/parents of the students for their examination to establish that they have paid the requisite fee/consultancy charges to you with source of their funds utilized.
5. As is seen from the records, you have not complied with the opportunity allowed to you by the then A.O. fixing the hearings in your case on 17.11.2011 & 02.12.2011 and accordingly you failed to supply various information as required by the A.O. Reasons as to why you failed to avail of various opportunity allowed to you by the then A.O. to furnish necessary evidence. Also please explain as to why and as to who has prompted you to furnish additional evidence now before learned CIT(A) and who prevented you not to furnish the same during the course of the original assessment. Please clarify.
In reply to the said questionnaire, the assessee has furnished a written reply along with various documents. In brief the assessee's reply and the result of my enquiries made in this regard through inspector are discussed as under:-
1. It is contended that the assessee was acting as a consultant for visa abroad specifically student visa of Australian University. That as per the FEMA guideline only the person who is granted visa is eligible to made payment in foreign currency. That due to this restriction the assessee could not make draft in favour of the foreign University/college from his own account and hence the assessee asked the student to make DD in favour of concerned college directly or through FFMC.
2. The assessee had entered into agreement with various colleges of Australia for recommending studies to them and he has supplied copies of few such agreements. That the assessee was availing the services of Cambridge Education Service Pvt. Ltd. and right choice ready for the purpose. He has filed confirmation both the said concerns in this respect.18
I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 Inspector of this office was deputed to conduct enquiries in this regard and to records the statements of the authorized persons of the above noted concerns. The Inspector has submitted his report and has recorded the statements of the authorized persons of these to concerns wherein they have submitted that they were rendering services to the assessee for the above noted purposes.
3. The assessee has filed details of consultancy charges received from various students during the year under consideration. Copies of the receipts issued by the assessee in token of having received the consultancy charges have also been filed. Original receipts produced before me have also been examined.
4. The assessee had engaged some other counsel to represent his case before the A.O. but his case was not properly presented by the then counsel and that it was not known to the assessee that his case was not properly being handled by his previous counsel. The assessee has also filed an affidavit in this respect. That on receipt of the order of assessment, the assessee has engaged another professional fro representing his case. It is finally stated by the assessee that the procedures adopted by the assessee in the line of this business are adopted by all other business people of the same line and it was just negligence on the part of the assessee's counsel that the facts were not properly presented before that then A.O. The statement of the assessee was also recorded by me wherein he has furnished the details of his business activities. The details of cash in hand available with the assessee as on 1st date of the fin. Year 2008-09 has also been filed. In his statement the assessee, Sh. Arvinder Pal Singh had told that the students and other expenses made on behalf of various students although proper books of account were not maintained by the assessee. Original ledger was produced by him before me, copies of which are retained by me and placed in the assessment folder. From the receipt furnished by the assessee and the enquiries made by me through the inspector of this office as well as from the documents/ledger produced by the assessee before me, it appears that the previous counsel of the assessee has not presented the assessee's case 19 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 before the then A.O. in an appropriate manner. Accordingly, it is submitted that the appeal of the assessee may kindly be decided on merits.
The assessment records, wherein various documents supplied by the assessee statements recorded during the remand proceedings and fresh order sheet prepared in respect of the remand proceedings are placed, is submitted fro your kind perusal sir."
8.6 Learned first appellate authority examined the reports of the Assessing Officer and has given his findings in para nos. 10 to 12 at page nos. 11 to 13, the same are reproduced as under:
"10. I have carefully considered the written submissions, assessment order, reports of A.O. and material on records.
11. As far as the admission of addition evidence is concerned, it is clear from the assessment order and also the report of A.O. that during the assessment except for some explanation which were not entirely relevant, nothing was filed by the assessee. It has come out from the report of A.O. and is clear from the assessment order that the counsel of assessee who appeared before A.O. during assessment had not presented the case in a proper manner for which the assessee could not be penalized. Affidavit to this effect is also filed the assessee before A.O. during remand proceedings. There is no opposition from A.O. for admission of material evidences filed in the shape of additional evidence which are vital to the decision of the issues in hand. In view of this additional evidences are admitted under Rule 46(1)(b) of the I.T. Act.
12. I have also gone through the case records and find apart from filing various agreements with colleges from Australia recommending the students to them, the assessee was also availing the services of M/s Cambridge Education Society and Right Choice study for the purpose. The relevant documents are filed and are on records of A.O. The A.O. as per report has also conducted inquiries through the Inspector who recorded the statements of the authorized persons of these two concerns 20 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 who admitted to have provided their services to the assessee. Details of consultancy charges received and the receipts thereof were also filed. The statement of assessee was also recorded by the A.O. and a ledger account for advances taken was also produced before the A.O., though proper books of accounts were not maintained. It was also explained that in this line of business the modus operandi of various consultants is similar. Individual accounts of statement are also on records. As far as expenses incurred are concerned they were made in the next year and the details are filed. In view of the above, it is held that the business activity of assessee is found to be genuine and the advances received as evidenced by the examination of A.O. and the material on records can't be treated as income of assessee. Considering all the discussion as above, the addition of Rs. 23,09,500/- is hereby deleted. Ground No. 1 stands disposed off.
Ground no. 2 relates to denial of deduction of Rs. 14,120/- claimed under Section 80C of I.T. Act for non-furnished of evidence of payment of the tuition fees. It is seen that such evidence is still not furnished hence in absence of the same the deduction as claimed can't be allowed and the action of A.O. in disallowing the deduction under Section 80C of the I.T. Act for Rs. 14,120/- is upheld."
8.7 We have thoroughly gone through the written submission filed by the assessee as well as the documentary evidence filed by him before the learned first appellate authority along with the remand report of the Assessing Officer, reproduced above, and we are of the considered view that due to the negligence of the counsel, the assessee could not represent his case properly before the Assessing Officer and in the appellate proceedings, he has produced all the relevant documentary evidences which includes copies of letter of offers to the students from Overseas 21 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 Schools/Colleges, copy of income tax return of his wife Smt.. Parvinder Arora and list of students from whom advances were received and copy of cash accounts. The Assessing Officer made inquiries on the documents filed by the assessee and sent a report dated 21.01.2013 and has not raised any objection on the admission of additional evidence because he felt that the case of the assessee is very much genuine. Even a single objection has not been raised by the Assessing Officer on the version made by the assessee in his remand report dated 21.01.2013. Learned first appellate authority has also rightly appreciated the evidence filed by the assessee in the shape of additional evidence and deleted the addition in dispute by passing a well reasoned order on the basis of similar line of business. The Assessing Officer as well as the learned first appellate authority has held that the business activity of the assessee is found to be genuine. The learned first appellate authority was of the view that there is no evidence establishing the cash deposit in the bank accounts of the assessee as income of the assessee from undisclosed sources and deleted the addition in dispute.
8.8 Keeping in view the aforesaid facts and circumstances explained above, we are of the considered view that the learned first 22 I.T.A. No. 304(Asr)/2013 Assessment year: 2009-10 appellant authority has passed a well reasoned order on the basis of evidence produced by the assessee and thus, the same requires no interference. Accordingly, the appeal filed by the Revenue is dismissed and we uphold the impugned order dated 14.02.2013 passed by learned CIT(A), Jalandhar.
9. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 28th February, 2014 Sd/./- Sd/./-
(B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28th February, 2014 /RK/ Copy of the order forwarded to:
1. The Assessee: Sh. Arvinder Pal Singh, 197-Defence Colony, Jalandhar
2. Income Tax Officer, Ward-III(1), Jalandhar
3. The CIT(A),
4. The CIT,
5. The SR DR, I.T.A.T., True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.