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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश आदेश / ORDER आदेश आदेश
PER VIKAS AWASTHY, JM :
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-II, Pune dated 28-01-2014 for the assessment year 2003-04.
Briefly, the facts of the case as emanating from records are ; the assessee is engaged in trading and import of petroleum products. The assessee was involved in alleged adulteration of petroleum products, hence, a special investigation was carried out by various agencies
2 ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
including CBI, Special Investigation Team (SIT), Sales Tax Department,
Central Excise Department, etc. The information was received by the
Income-tax Department from CBI authorities that there were certain
cash deposits in bank accounts of assessee with ICICI Bank, Nariman
Point, Mumbai and Akola Urban Cooperative Bank Ltd., Kalbadevi
Branch, Mumbai. The assessee filed its return of income for the
impugned assessment year on 19-11-2003 declaring total income of
Rs.34,54,188/-. During the course of scrutiny assessment
proceedings, the assessee failed to produce any documentary evidence
explaining cash deposits to the tune of Rs.6,63,11,790/- in the bank
accounts. The assessee inter alia made addition of the aforesaid
amount as unexplained cash credits in the hands of the assessee.
Aggrieved by the additions made in assessment order dated 18-
03-2014 passed u/s.143(3), the assessee filed appeal before the CIT(A).
The CIT(A) partly accepted the appeal of assessee and deleted some of
the additions. However, the addition of Rs.6.63 crores on account of
unexplained cash credit was confirmed by the First Appellate
Authority. Now the assessee is in second appeal before the Tribunal
assailing the said addition vide Ground No.1 and the same reads as
under :
“1. On facts and circumstances prevailing in the case and as per provisions & scheme of the Act it be held that additions made by the Assessing Officer to the tune of Rs.6.63 crores treating the same as unexplained cash credit without properly appreciating the facts prevailing in the case and without properly considering the submission made by the appellant as well as the remand report called by the CIT from the Assessing Officer. The additions so made be deleted being uncalled for. Just and proper relief be granted on this score.”
3 ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
Shri R.G. Nahar appearing on behalf of the assessee submitted
at the outset that he is not pressing Ground No.2 raised in the appeal.
Ground No.3 is general in nature. The solitary issue for adjudication
before the Tribunal is with respect to addition of Rs.6.63 crores on
account of unexplained cash credits.
4.1 The ld. Authorized Representative submitted that the assessee is
engaged in sale of Kerosene oil and Napta in retail. The books of
assessee were seized by the Sales Tax Department for investigation by
various agencies, therefore, the assessee could not produce relevant
evidence regarding deposit of cash in the bank accounts. The ld.
Authorized Representative submitted that Rs.6.63 crores deposited in
the bank accounts represent ‘sale of products’ duly supported by cash
memos and has already been offered to tax. The Assessing Officer
wrongly made addition of the aforesaid amount as unexplained cash
credits without appreciating the fact that during the course of
assessment proceedings assessee could not produce the books,
vouchers and various other supporting documents due to the reason
beyond the control of assessee, since they were seized by the Sales Tax
authorities. The assessee had raised this plea before First Appellate
Authority and had specifically stated that these amounts are duly
reflected in the books of account and the books of assessee are duly
audited. The bank accounts are also reconciled. However, due to the
seizure of books, the assessee could not substantiate the amounts
deposited in the banks. The ld. Authorized Representative submitted
that in Paper Book No.2, the assessee has filed :
4 ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
(1) Summary of cash sales during the F.Y. 2001-02 relating to
A.Y. 2002-03 (page 23 of the paper book);
(2) Bank statement of Akola Urban Cooperative Bank Ltd. for
the period relevant to A.Y. 2002-03 (page Nos. 24 to 58 of the
paper book);
(3) Sales summary for the F.Y. 2002-03, i.e. relevant to A.Y.
2003-04 (pages 59 to 62 paper book);
(4) Statement under Bombay Sales Tax Act, 1959 (pages 81 to
84 of the paper book);
(5) Assessment order under Bombay Sales Tax Act, for the
period 01-04-2002 to 31-03-2003 (pages 85 to 89 of the paper
book).
The Ld. Authorized Representative pointed that the above
documents are fresh documents and were not produced before the
authorities below as they were seized by the Sales Tax authorities.
The documents are essential to explain the deposits made in Bank
accounts.
4.2 The ld. Authorized Representative submitted that remand report
was sought by the CIT(A) from the Assessing Officer. The remand
report is at page 34 of the Paper Book No.1 In remand report Para
No.4, the Assessing Officer has observed that “prima-facie this
amounts are deposits out of cash sales shown by the assessee”. Thus,
the Assessing Officer also admits that the deposits in Bank accounts
are on account of cash sales. The ld. Authorized Representative
further submitted that, in the past, similar transactions of cash sales
were made by the assessee and the same were accepted by the
5 ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
Department. In earlier years, the Department never raised any doubt
on cash sales of Kerosene to the retailers.
On the other hand, Shri Rajeev Kumar representing the
Department vehemently defended the order of CIT(A) in confirming the
addition. The ld. DR submitted that the assessee has indulged in
adulteration of Petroleum products. During scrutiny assessment
proceedings, inspite of several opportunities, assessee failed to show
any document substantiating deposits of Rs.6.63 crores in the bank
accounts from cash sales of Kerosene oil. Even in the proceedings
before the First Appellate Authority, assessee could not explain cash
deposits in the bank accounts with cogent evidences. The ld.
Departmental Representative vehemently opposed furnishing of fresh
documents before the Tribunal.
We have heard the submissions made by representatives of rival
sides and have perused the orders of authorities below. We have also
considered documents filed by the assessee for the first time before the
Tribunal at Sr.No.3,4,5,7, & 8 in Index of the Paper Book No.2. The
Department has not disputed that books of the assessee and various
other documents were seized for the purpose of investigation by
various investigating agencies viz., CBI, SIT, State Sales Tax
Department, etc. In the absence of books of account and various other
documents, assessee could not substantiate/explain cash deposits in
the bank accounts. Since books and documents of the assessee were
seized by investigating agencies it was beyond the control as assessee
to produce the same before Income Tax authorities. Taking into
consideration entirety of facts, we are of the considered opinion that a
6 ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
fair opportunity should be given to the assessee to explain cash
deposits. Therefore, we deem it appropriate to restore this issue back
to the file of Assessing Officer to consider the documents filed by the
assessee before the Tribunal in support of his contentions explaining
the cash deposits in the bank accounts and decide the issue denovo,
in accordance with law and principles of natural justice. Accordingly,
Ground of appeal No.1 is allowed for statistical purposes.
The ld. Authorized Representative has stated at the bar that he
is not pressing Ground No.2. The Ground No.2 of the appeal is
therefore, dismissed as not pressed.
The Ground No.3 is general in nature and hence, requires no
adjudication.
In the result, the appeal of assessee is partly allowed for
statistical purposes.
Order pronounced on Monday, the 31st day of December, 2018.
Sd/- Sd/- (D. KARUNAKARA RAO) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 31st December, 2018 Satish
7 ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. आयकर आयु� (अपील) / The CIT(A)-II, Pune 3. आयकर आयु� / The CIT Central, Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
//स�यािपत �ित // आदेशानुसार / BY ORDER,
// True Copy // Senior Private Secretary, आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune
ITA No. 939/PUN/2014 Progressive Petroleum Co. Ltd.,
Date 1. Draft dictated on 28-12-18 Sr.PS 2. Draft placed before author 31-12-18 Sr.PS 3. Draft proposed & placed before the AM second member 4. Draft discussed/approved by Second AM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.