PROGRESSIVE PETROLEUM CO. LTD.,JALGAON vs. DEPUTY COMMISSIONER OF INCOME-TAX,

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.

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.

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.,

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.

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.

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.

is not pressing Ground No.2. The Ground No.2 of the appeal is

therefore, dismissed as not pressed.

adjudication.

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.