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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 40/JP/2019
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 40/JP/2019 fu/kZkj.k o"kZ@Assessment Years : 2009-10 cuke Shri Dinesh Ojha, The ITO Vs. B-63, Kirti Nagar, Tonk Road, Ward 6(4) Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAEPO 9604 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Mahendra Gargieya (Adv.) jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 19/04/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27/04/2022 vkns'k@ ORDER
PER: RATHOD KAMLESH JAYANTBHAI, AM
This appeal filed by the assessee is arising out of an order passed by the Commissioner of Income tax (Appeals), Ajmer dated 25-10-2018 for the assessment year 2009-2010.
The hearing of the appeal was concluded through audio-visual medium on account of Government guidelines on account of prevalent situation of Covid-19 Pandemic, both the parties have placed their written as well as oral arguments during this online hearing process.
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The appeal of the assessee was dismissed vide order dated 12.10.2020 observing that the assessee has already expired on 19.02.2019 after filling appeal however, till the date of passing the order the legal representative of the assessee has not been brought on record. Accordingly, the appeal of the assessee considered as not maintainable and was thus dismissed. The wife of the deceased assessee filed a Miscellaneous Application (MA) No. 07/JP/2021 dated 25.02.2021 stating that she had no information about the case and being the house wife she was not acquainted with the legal obligations for bringing on record the authorized representative, therefore in absence of any authorized representative, the appeal was dismissed on 12.10.2020. The said MA was considered vide order dated 19.04.2021 giving the assessee to chance to file the corrected Form 36 within 30 days. The registry informed that the assessee has complied the direction and thus the appeal is heard on merits.
In this appeal the assessee has raised following grounds;
“1. That the learned Appellate Authority was wrongly confirmed the amount of addition of Rs. 466563/- towards cash deposit in Bank A/c of Assessee, out of normal transaction of business trade. All of Amounts of Rs. 466563/ relates to old debtors realizations of opening debtors as on date 01/04/2008, Cash Deposits by own cash and advances received by debtors. 2. That while filling return claimed rebate u/s 80C of Rs. 55,000/- out of which receipts of of Rs. 32653/ submitted and not allowed by learned Appellate Authority in lake of no additional application placed front of at CIT/ITO under Rule 46A. Whereas has actually paid for payment and request to allow. 3. That the assesse declared business income u/s 44AD on sales 712752/ turnover which worked out to 22.93 greater than 8% under the said section, the
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same is confirmed by appellate authority CIT(Appeals), Ajmer and same had been deleted by appellate authority CIT(Appeals), Ajmer.”
Briefly stated, facts of the case are that as AIR information, it is gathered that the assessee has made Cash deposit in his saving bank account during the year under consideration. As such, the assessee has not filed return of income for the year under consideration, therefore, believing that income to the tune of Rs. 11,79,315/- has escaped the assessment, the case was reopened by invoking the provision of section 147 of the IT Act, 1961 after recording the reasons for doing so. In this case, notice u/s 148 was issued to the assessee on 15.03.2016. In response to the said notice, within the stipulated time, neither return of income was filed nor was any written submission filed. The case was then transferred u/s 127 of the I.T. Act to the undersigned on 14.06.2016 in compliance to the order passed by Worthy Pr.CIT-2, Jaipur vide order dated 10- 06-2016. Subsequently and due to change of incumbent, a notice U/s 142(1) along with a questionnaire was issued to the assessee on 01-07-2016, asking the assessee to file return of income along with requisite details on 13-07-2015. However, no response was received. Therefore, a notice u/s 142(1) along with final show cause notice was issued on 08-09-2016 fixing the case for hearing on 19-09-2016. In compliance thereto Shri Anand Agarwal, advocate and A/R of the assessee attended the proceedings from time to time and filed written reply.
During the year under consideration, the assessee was engaged in the retail trading business of dyes and chemicals and declared business income at Rs. 163490/- u/s 44AD. The assessee after claiming deduction under chapter VIA declared total income at Rs. 1,32,150/
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During the assessment proceeding the assessee vide order sheet entry dated 23-09-2016 asked to explain the source of the cash deposit and other relevant connected details by 30-09-2016. On 30.09.2016 none appeared. Thus, the assessee was issued by the final show cause notice by the AO which is extracted here in below :
“3.1 Cash deposits in Rs.11,79,315/ During the year under consideration, the assessee had deposited cash of Rs. 11,79,315/- in his Savings Bank account No. 61043846380 maintained with SBBJ, Durgapura Jaipur. The assessee, vide note sheet entry dated 23-09-2016, was asked to explain/furnish the following information on 30-09-2016: "(i) Nature of business of assessee and sources of income. (ii) Please furnish details of purchase/sale. From where the assesee purchases and where does he sell the same. (iii) Please explain the sources of cash deposits amounting to Rs.1179315/-in SBBJ Durgapura account and also in SBI account, Bajaj Nagar. Does the assessee deposits its sale proceeds in bank account, if yes where does he deposits. (iv) It is noticed that total turnover of assesee is Rs.6.85 lacs while the cash deposit is more than Rs. 12 lacs both accounts. (v) Please explain. Evidences of deduction under chapter VIA."
The assessing officer observed that on the hearing date (i.e. 30-09-2016) neither anyone attended nor was any written submission filed. Thereafter, a final show cause notice along with notice u/s 142(1) issued. The assessee filed his written reply in this regard which is reproduced as under: “Reply of the assessee in assessment
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"Nature of business of Assessee and source of funds: the nature of business is retail trading of all types of dyes and chemical used to dye cloth in sanganer. 2. Please furnish details of purchase/sale for where the assessee purchase & where does he sell the same: The assessee have purchases and sales locally in Jaipur in the relevant assessment year. 3. Please explain the source of cash deposits amounting Rs. 1179315 in SBBJ Durgapura account and also in SBI account of Bajaj Nagar. Does the assessee deposit the sale & purchases proceeds in Bank account, if yes where he deposits : the assessee deposits sale proceeds and make payments of purchase from any of both banks savings bank account No. 10125511680 at State Bank of India, A 38, Bajaj Nagar Branch and State bank of Bikaner and Jaipur, Durgapura, Tonk Road, Jaipur SB A/C No. 61043846380. The assessee purchase than it is deposited in the bank. Further he have to withdraw cash for domestic uses, if, if excess amount remains than it is also deposited in bank. 4. It is noted that total turnover of the assessee is 6.85 lacks while the cash deposit in more than Rs. 12 lakh in both bank account, please explain: the assessee deposits sale proceeds and make payments of purchases from any of both banks. Saving Bank Account No. 10125511680 at State Bank of India, A-38, Bajaj Nagar, Branch and State Bank of Bikaner and Jaipur. Durgapura, Tonk Road, Jaipur SB A/c No. 61043846380. The assessee purchases in cash, so he have to withdraw cash, if excess amount remains after purchase than it is deposited in the bank. Further, he has to withdraw cash form miscellaneous domestic uses, if excess amount remains than it is deposited in bank by the assessee. this is all as per books of account...."
After considering the written submission filed by the assessee, vide note sheet entry dated 15-11-2016, AO has made to note 'show cause note' in this regard which is reproduced as under:
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"On going through the material on record, it has been submitted that the sale and purchases were made locally in Jaipur and cash has been deposited in SBBJ Durgapura and SBI Bajaj Nagar only. However, on going through the bank account statement of SBBJ, Durgapura, it is seen that cash has been deposited from out of Jaipur such as Aspur, Sagwana, Alwar, Bharatpur, Phulera, and many other places. It leads to the conclusion that such cash deposit is not sale proceeds and excess cash at hand. You are therefore, requested to explain as to why such cash deposits should not be treated as undisclosed/unexplained income of the previous year 2008-09."
Against the above final show cause notice the ld. A/R of the assessee Sh. Anand Agarwal filed his written submission which is reproduced as under:
"the assessee sales dyes and chemicals shop at Sanganer, the goods handed to the buyer at shop, than the buyers carry the goods by himself to their destinations wherever, and it is not in control of the assessee. Sometimes regular and known buyers have shortage of funds, so they deposit the required payment from there place of destination. As the payments deposited by the buyers from out f Jaipur not by the assessee, it is self proved that all the bank transactions are only of trading business Shree Veer Dye Chem, as stated earlier that the assessee deposits sale proceeds and make payments of purchase from any of both banks savings Bank Accounts No. 10125511680 at SBI A-38, Bajaj Nagar Branch and SBBJ, Durgapura tonk road Jaipur SB Ac No. 61043846380. The assessee purchases in cash, so he have to withdraw cash, if excess amount remains after purchase that it is deposited in the bank. Further he has to withdraw cash for domestic uses, if excess amount remains than it is also deposited in bank. All outstation payments deposited by the buyers to whom goods sold by the assessee. So, there is no undisclosed income of the assessee."
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After recording the above submission of the assessee, the ld. AO was of the view that the same is not found tenable. Therefore, to examine the bank account statement and the places from where the cash is deposited throughout the year under consideration. The bank account statement maintained with SBBJ Durgapura is tabulated to have total of all the deposit made in the bank. Ongoing through the details of the said table of cash deposits, it is observed by the AO that the entire cash deposits have been made from out of Jaipur and from many different places/cities. The assessee has contradicted his own submission different occasion and in different submissions. The assessee had already submitted that he sells locally at Jaipur and also accepted that he deposits the sale proceeds at the SBBJ Durgapura and SBI Bajaj Nagar. However, it is not the case so from the above observation. Therefore, the submission of the assessee rejected.
Further, the assessee was also asked that the turnover shown by the assessee u/s 44AD at Rs. 6,85,340/- while the cash deposits in SBBJ account Durgapura is Rs. 11,79,315/-. In this regard, the assessee has submitted that he deposits the excess cash remained at his hand. However, the submission is factually wrong. It has already been established that in bank account with SBBJ Durgapura, entire cash deposit have been made from out of Jaipur and from various cities as mentioned above. Not a single penny is deposited at Jaipur branch. Therefore, the contention of the assessee that he deposits the excess cash at hand in his bank account is factually not correct and is thereby rejected.
In the light of the stated facts discussed the ld. AO was of the view that the entire cash deposits in bank account maintained with SBBJ Durgapura is unexplained income of the assessee and the assessee has failed to explain the
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sources of the same by submitting factually incorrect submissions. Therefore, entire cash deposits of Rs. 11,79,315/- is held as unexplained income of the assessee for the period under consideration and is added in the total income of the assessee.
Aggrieved from the said order of the assessing officer, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) has partly allowed the appeal of the assessee and his finding is as appearing in para 4,3 which reads as under; “4.3 I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen that in this case, return of income was filed by the appellant u/s 44AD declaring income of Rs. 1,63,490/- u/s 44AD. After claiming deduction under Chapter VI-A, total income was shown at Rs. 1,32,150/-. There were total cash deposits of Rs. 11,79,315/- in the bank account maintained with SBBJ, Durgapura, Jaipur. The total turnover declared by the appellant was Rs. 6,85,340/- on which VAT @4% (Rs. 27,412) was also claimed to have been collected. Thus, the total amount claimed to have been collected against the sales made during the year was Rs. 7,12,752/- whereas the total cash deposits are of Rs. 11,79,315/-. The appellant has filed a statement showing source of cash deposits as under: Old debtors realization Rs. 3,68,563/- Cash deposit by own cash Rs. 73,200/- Advance received from debtors Rs. 24,800/- Current years sales Rs. 7,12,752/
The appellant has not furnished any documentary evidences in respect of sources of cash deposit shown as old debtors realization (Rs. 3,68,563), cash deposit by own cash (Rs. 73,200) and advance. received from debtors (Rs.
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24,800). Therefore, it is held that source of cash deposits of Rs. 4,66,563/- (Rs. 3,68,563 + Rs. 73,200 + Rs. 24,800) remains unexplained. Hence, out of total addition of Rs. 11,79,3157- made by the AO, addition of Rs. 4,66,563/- is confirmed and remaining addition of Rs. 7,12,752/- is deleted.”
As the assessee not satisfied with the relief granted by the ld. CIT(A) has filed this appeal before us on the grounds stated in the earlier para. The assessee has mainly raised three grounds of appeal. However, at the time of hearing we have carefully perused all the grounds raised by the Assessee. We find that all the ground are related to the turnover vis a vis cash deposited in the bank account and the deduction claimed Chapter VIA which has not been allowed.
The ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; “Submission:
1.1. Existence of debtors established: At the outset it is submitted that the existence of trade debtors was already established and even admitted by the lower authorities below in as much as the assesse, admittedly while filing income tax return for AY 2008 09 and had also uploaded the Balance Sheet (PB 27) which shows the closing balance of the trade debtors of Rs. 8,34,211/. Thereafter, the assesse submitted detailed charts placed at I PB 1-3 and again a consolidate chart at II PB-111-119, giving complete details viz. name, date of cash deposit, name of the debtors who deposited the amount, the place from where deposit were made, etc. The law is well settled that the closing amount of cash creditors or the debtors will form part as opening balances in the immediately next year as in the case of
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CIT vs. Parmeshwar Bohra [2003] 131 Taxman 145 (Raj. HC) was held that Section 263 read with section 69 of the Income tax Act, 1961- Revision - Of orders prejudicial to interest of revenue - Assessment year 1993-94 - Subsequent to completion of assessment under section 143(3)/148 by Assessing Officer, Commissioner invoked section 263 and held that opening balance in assessee's capital account as on 1-4-1992 represented assessee's income from undisclosed sources and was liable to tax in assessment year 1993-94 in absence of any proof regarding its accommodation in earlier years - Tribunal that genuineness of said amount had already been adjudicated upon by assessing authority for appropriate financial year relevant to assessment year 1992-93 Tribunal quashed order of Commissioner passed under section 263 Whether there was any illegality in Tribunal's order - Held, no.
The authorities below also rightly did not disbelieve the availability of the opening balance of trade debtors of Rs. 8,34,211/-. Therefore, the very fact of making recovery/realization there from of a lessor amount of Rs. 3,68,563/- could and should not have been doubted, particularly when the authorities below did not make any inquiry and failed to bring any contradictory evidence to negative such claim and submission. Interestingly, the ld. CIT(A) himself has admitted the recovery of cash sales of current year (Rs. 7,12,752/-) made to the same parties common with the current year.
1.2 Old Debtors realisation of Rs. 3,68,563/-(II PB-111-119): On the same analogy of accepting current year sale, when old recovery is made against the outstanding amount of preceding years sales from the parties who are common in current year, there is no reason to doubt the claimed recovery.
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In absence of any adverse material on record disbelieving the realization of Rs. 3,68,563/-is against the provision of law and also against human probability. When the CIT(A) has accepted the figure of current cash sale realization of Rs. 7.12 of current year, all parties being common from whom the old realization was made should have also been accepted.
1.3 Advance received from debtors of Rs. 24,800/- (II PB 111-119): Similarly, the parties from whom advance is received in current year and they have been billed and accounted for next year i.e AY 10-11 in the month of April, hence there is no reason to disbelieve the availability of amount of advance when the parties are common to whom sale was also made in current year as well.
1.4 Cash deposit by own cash of Rs. 73,200/- (II PB- 111-119): The assesse has deposited cash of Rs. 73,200/- in his account during the year from his own saving. The ld. CIT(A) has erred in disallowing the same on account of not explaining the cash deposit transaction. The ld CIT(A) has not appreciated the fact that the assesse is earning income from business since long (year 2003) and also filing return of income where the amount of cash in hand at end of the year is declared along with the capital balance in the return of income. If we look at the capital balance, one can see that there is increase in the capital balance compared to the opening capital balance at beginning of the year i.e. from Rs.1,01,281/- to Rs. 1,59,992/-. The assesse has a good capital base and also has a habit of yearly savings accumulated from past years. The assesse lives in a joint family with his wife, two children and other family members where he is not the sole member who is responsible for the majority of the household expenses of the family. He has earned a net profit of Rs. 1,51,992/- in AY
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2008-09, Rs. 1,63,490/ in AY 2009-10 and has been consistently earning good amount of profit in past years which has certainly resulted into a savings in hand even after incurring all his household expenses. Hence, he must have saved much more then this meagre amount of Rs. 73,200/- in as much as even assuming net saving per year of Rs.50,000/-, for 5 years it will come to Rs. 2.50 Lakh. The assesse is in the habit of keeping majority of the cash in bank and withdraw the same as per his requirements. The same practise he continued in AY 2009-10 also where he deposited in bank the excess cash left over after incurring all the required expenses. Hence keeping in mind the aspect of human probability and surrounding circumstances, no addition was unwarranted on this account.
1.5 Supporting case law:
1.5.1 In case of RacmannSprings (P.) Ltd. Vs. DCIT [1995] 55 ITD 159 (Delhi ITAT) were it was held that:
"Section 68 of the Income-tax Act, 1961- Cash credits Assessment year 1981-82 - Assessee filed return showing loss for current year as well as brought-forward losses - Original assessment was made on 8-10-1984, but on remand, fresh assessment was made on 13-1-1992 - On having found that several drafts had been deposited in bank without mentioning names of parties in corresponding vouchers except name of stations like Calcutta, etc., in some cases, Assessing Officer observed in his original order that assessee was asked to give names and explain nature and source of those deposits but he had failed to do - Assessee filed a reconciliation statement of sundry debtors for a number of years which, inter alia, showed
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realisations for assessment years 1981-82 to 1984-85 - Assessing Officer in his subsequent order observed that while realisations in any of years 1982- 83 to 1984-85 did not exceed Rs. 5 lakhs, it was unlikely that in current year assessee suddenly had a realisation from sundry debtors amounting to Rs. 18,00,763 He, therefore, held that drafts deposited in bank accounts were actually undisclosed sales of assessee and, accordingly, treated same as assessee's income under section 68 - Whether Assessing Officer, having accepted figure of sundry debtors as on 30-6-1981 to 30-6-1985, could not find fault with figure of sundry debtors as on 30-6-1980 because then he should have enhanced figure of sundry debtors as on 30-5-1980 by Rs. 18,00,763 and adopted same in later years - Held, yes - Whether realisations from sundry debtors could be treated as cash credits under section 68- Held, no"
1.6 The human probability aspect assumes a greater significance in the context of sec 44AD that when the law itself provides immunity to the assesse from maintenance of books of account and assesse believing such statutory provision, chose not prepare account on day to day basis in regular course of business (which could otherwise have explained the source of each and every outgoing as also each and every receipt) then the only option left is to make an fair estimation keeping in mind the past history, later years and the other relevant material in the shape of a fair estimation but there also, the benefit of doubt, if any, must be given to the assesse only.
Where section 44AD applicable, Section 69 and 69A cannot be applied at all:
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On this aspect reliance is placed on the following decisions:
2.1.CIT-II vs Surinder Pal Anand (2010) 192 Taxman 264 ( HC of P&H) (DPB_ where it was held that: "Section 44AD of the Income-tax Act, 1961- Civil construction business - Assessment year 2005-06 - Whether once under special provision of section 44AD, exemption from maintenance of books of account has been provided and presumptive tax at rate of 8 per cent of gross receipt itself is basis for determining taxable income, assessee is not under any obligation to explain individual entry of cash deposit in bank unless such entry has no nexus with gross receipts - Held, yes*
2.2. Nandlal Popli Vs DCIT (2016) 71 Taxman.com 246 (Chandigarh Trib.) where it was held that: "Where profit declared by assessee under presumptive taxation as provided under section 44AD was accepted, Assessing Officer could not make separate addition by invoking provisions of section 69C"
2.3. ITO Ward 6(2) vs. Devi Singh Solanki [2006] 154 Taxman 155 (JP)(DPB_) where it was held that "Section 44AD, read with section 69, of the Income-tax Act, 1961 Civil construction business Assessment year 1995-96 Assessing Officer though assessed business income of assessee, a civil contractor, by applying section 44AD, yet at same time made addition under section 69 alleging that source of investments made in acquisition of assets/shown in balance sheet was not explained - Commissioner (Appeals) held that additions made under section 69 and others were erroneous and unjustified as assessee had explained source of investments - Assessee's case was that once income of civil construction business is
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estimated under section 44AD, there is no necessity to make separate additions on account of alleged investment inasmuch as the provisions of section 44AD have limited overriding effect over sections 28 to 43C- Whether assessee's case could not be accepted Held, yes - Whether, however, since department had not placed any material on record to rebut finding of Commissioner (Appeals), order passed by Commissioner (Appeals) deleting addition made by Assessing Officer was to be upheld - Held yes”
The ld. AR relying to the written submission further made the oral arguments at the time of hearing and have analyzed written submission before us. The ld. AR filed a detailed submission wherein he has filed a chart showing details in respect of realisation made from the old debtors in the year under consideration at page 1 to 3. As regard the fact that the debtors were outstanding in A. Y. 2008-09 being the just preceding year, he has filed copy of the ITR, Balance Sheet and Profit & loss account, summary of debtors for A. Y. 2008-09 and copy of Value added tax return filed by the assessee from page no. 2 to 33. He has submitted a bank statement from 34 to 43. The ld. AR of the assessee also filed the details in respect of advance received from debtors and copy of their ledger account were submitted. The assessee has also filed the sales register based on which ld. CIT(A) has already granted relief that extent.
On this issue the ld. AR of the assessee has also has relied upon the following judgement which we have considered while dealing with this appeal: • Commissioner of Income Tax-II vs. Surinder Pal Anand in ITA No. 156 of 2010 dated 29.06.2010 (Chan.)
16 ITA No. 40/JP/2019 Shri Dinesh Ojha vs. ITO, Ward 6(4), Jaipur • Recmann Springs (P.) Ltd. vs. Deputy Commissioner dated 2nd June, 1995 (Del.) • ACIT-5(1), Indore vs. M/s Sunderdeep Construction Pvt. Ltd., Indore in ITA No. 380/Ind/2017 dated 25.03.2021(Indore) • Shri Kokkarne Prabhakara, Hubli vs. ITO, Ward 3(2), Hubballi in ITA No. 1239/Bang/2019 dated 11/09/2020 (Bengaluru) • Nand Lal Popli, Shimla vs. DCIT, Central Circle-II, Chandigarh in ITA No. 1161/Chd/2013 dated 14.06.2016 (Chand.) • S.B. Steel Industries, Hyderabad vs. ITO, Ward 5(1), Hyderabad in ITA No. 264/Hyd/2011 dated 13.11.2013 (Hyderabad) • ITO, Ward-25(1), New Delhi vs. Shri Varun Kumar Saboo, Delhi in ITA No. 5588/Del/2011 dated 10.05.2013 (Delhi) • Kapil Dey, Kolkata vs. ITO, Ward-49(2), Kolkata in ITA No. 854,855 & 856/Kol/2010 dated 25.11.2011 (Kolk.) • Commissioner of Income-tax-II vs. Surinder Pal Anand in ITA No. 156 of 2010 dated 29.06.2010 (Chand.) • Nand La Popli vs. DCIT, Central Circle-II, Chandigarh in ITA Nos. 1161 & 1162 (CHD.) of 2013 dated 14.06.2016(Chand.)
Per contra the ld. DR heavily relied on the findings of the AO and stated that the assessee has not filed the return originally and has filed only on issue of notice u/s. 148 of the Act. He does the business in Jaipur and cash is deposited from various other branches or stations so the action of the AO is correct. There is no proof of cash received for old debtor realisation on submitted the entries in chart and thus relied upon the finding of the CIT(A).
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Now, to meet the end of justice, we confine ourselves to core of the controversy for the following amount not considered by the ld. CIT(A) and our observation on it;
“a) Old debtors realization amount of Rs. 3,68,563/- The ld. AR of the assessee submitted that the debtors was already established and even admitted by lower authorities below in as much as assessee while filling the return of income for A. Y. 2008-09 just preceding year under consideration. For this he filed the uploaded balance kept in the assessee paper book at page 27. The assessee has also shown page 6 of the paper being the return of income filed at column 3 a)(ii) the same amount of sundry debtor is reflected. Thus, there is no reason accept the version that the assessee has realised its old debtors and the AO should allow this version of the assessee and cash added to that as unexplained income is required to be deleted.
a) Cash deposit by own cash Rs. 73,200/-
The ld. AR Submitted that the assessee is already in business since 2003. The opening cash available with the assessee as per the balance filed at page 27 of paper book amounts to Rs. 11,485/- and the balance amount considering the size, nature and number of continuing business may be considered as fair and reasons and much amount of saving deposited in the bank cannot be considered as unexplained income. We have persuaded the arguments of the ld.AR of the assessee considering the smallness of the amount and considering that there is an opening balance is also available with the assessee the balance amount cannot be considered as unexplained income of the assessee and considering the facts and circumstances of the cash the holding of cash is required to be considered as genuine and thus the addition made is required to be deleted.
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b) Advance received from debtors, Rs. 24,800/-
The ld. AR of the assessee contended that the parties from whom advance is received in current year and they have been billed in the next year in the month of April hence there is no reasons to disbelieve and the assessee is already assessed to state tax the amount can be considered as income only when the bill is prepared and the goods are dispatched.
The assessee has filed a chart showing date, party wise cash deposit. Voucher type, narration, amount deposited, old debtors’ amount, self-deposited amount, advance received from debtors’ current year sales amount and thereby they have reconciled all the amount deposited in the bank account.”
We considered the contentions of the both the parties, considered the decision cited and relied upon and based on information and analyses of facts supported by evidence and argument we feel that the ld. CIT(A) has erred in not granting the relief to the assessee fully. Thus, based on the above discussion the ground no. 1 raised by the assessee is allowed.
The ground no. 2 raised by the assessee is that while filling the return of income he has claimed rebate under section 80C for an amount of Rs. 55,000/- out of which receipts of Rs. 32,653 submitted but while finalizing the assessment the same was not allowed. Even the ld. CIT(A) has dismissed this ground on technical issued and not decided on merits. The relevant observation of observed ld. CIT(A) is as under :
“I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen that disallowance was
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made by the AO as no documentary evidences in support of the claim made by the appellant under Chapter VI-A was filed. During the course of appellate proceedings, the appellant has not filed any application for admission of additional evidences under Rule 46A. I am of the considered view that the case of the appellant is not covered under any Clause of Rule 46A(1). Therefore, the additional evidences furnished by the appellant during the course of appellate proceedings are not admitted. Since, no evidence in support of the deduction claimed under Chapter VI-A was filed before the AO, therefore, the disallowance of the deduction claimed by the appellant under Chapter VI-A made by the AO is hereby confirmed.”
Before us the ld. AR of the assessee submitted as under:
“GOA-2: Addition of Rs. 55,000/- u/s 80C (chapter VI A). (CIT para 5 pg. 4&5.)
Facts and Submission: The assesse made claim of deduction of Rs. 55,000/- u/s 80C on ount payment ade towards tuition fees and LIC payment, out of which, he was able to produce supporting receipts only up to the extent of Rs. 32,653/- (Kindly refer at a glance chart at PB 46). Whereas the AO is completely silent on this aspect when submission was made, the Id CIT(A) also denied by merely saying that the assesse filed additional evidences in the shape of supporting receipts of LIC premium and tuition fees, but no application under Rule 46A for admission of additional evidence filed.
In this connection it is submitted that this is poor assesse who was not purely literate and was not aware of the complexity of the tax laws. The turnover itself shows that he was a petty businessman. Therefore, he was dependent upon the tax consultants and acted bonafidely upon whatever advise was given to him. The facts are not denied by the authorities below that genuine payments were
20 ITA No. 40/JP/2019 Shri Dinesh Ojha vs. ITO, Ward 6(4), Jaipur
made totalling to Rs. 32,653/- at least. Unfortunately, the assesse died of cardia arrest in the year 2019 and it is only her legal heir his wife Smt. Hinal Ojha who made her best efforts to collect the evidences, documents to put up her case before the lower authorities. The assesse otherwise not able to calm the entire Rs. 55,000/- even though paid because of the adverse circumstances. In any case, the assessee has paid such premium in the preceding and succeeding years the claimed deduction u/s 80C has also been allowed by the AO. When it is so, there is no reason for denial in the year in between the other years because allowance in the next year implies payment certainly made in this year.
Taking a sympathetic view on humanitarian ground, of the totality of the facts & circumstances, the ld. CIT(A) was not supposed to have taken such a technical view of the matter and once an evidence has been made available before him, which goes to root of the issue and strongly support the case of the assesse to make a claim u/s 80C, the ld. CITA) must have allowed the same and now the Hon'ble ITAT. Hence the assesse deserves to be allowed the deduction as claimed or alternatively at least to the extent of Rs. 32,653/-.”
Ongoing through the finding of the ld. CIT(A) it is apparent that he has on technical ground not considered claim of the assessee and even though the proof were filed before him partly.
Per contra the ld. DR submitted that the assessee has not submitted the full claim details and submitted part proof and even at the stage of CIT(A) and submitted that without evidence claim is not allowable.
Looking to the overfall fact and circumstance of the case it would be in the interest of justice this evidence be presented to the AO and ld.AO after considering the details and proof of the amount claimed may consider the issue
21 ITA No. 40/JP/2019 Shri Dinesh Ojha vs. ITO, Ward 6(4), Jaipur
of allowability of the deduction claimed under Chapter VIA. Thus, the grounds of appeal is technically allowed.
The ground no. 3 raised by the assessee is not pressed before us therefore, that ground no. 3 dismissed as not pressed.
In the result appeal of the assessee is partly allowed.
Order pronounced in the open court on 27/04/2022 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 27/04/2022 *Ganesh Kumar आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Shri Dinesh Ojha, Jaipur izR;FkhZ@ The Respondent- The ITO,Ward- 6(4), Jaipur. 2. 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA No. 40/JP/2019) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत