SH. VIJAY SINGH ,MATHURA vs. ITO-3(5), MATHURA

ITA 292/AGR/2017Status: DisposedITAT Agra12 February 2025AY 2008-093 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 24,90,250/- as unexplained cash deposits is not sustainable. The reasoning is that the very issue of profit rate addition on these cash deposits had been settled in the first round of appeal, where the addition of Rs. 1,17,012/- was deleted by a coordinate bench. The Tribunal found no reason to concur with the Revenue's stand that the entire cash deposit addition could be revived based on the same observations that led to the deletion of the profit element. The Tribunal accepted the assessee's ground for deletion of the impugned addition in its entirety. The operative direction is the deletion of the impugned addition. No issue was expressly left undecided.

What were the facts?

The assessee, Shri Vijay Singh, is in appeal against the order of the Commissioner of Income Tax (Appeals)-I, Agra, for Assessment Year 2008-09. This is the second round of litigation before the Tribunal. In the first round, the Assessing Officer had assessed cash deposits of Rs. 24,90,250/- as business turnover, applying a 5% GP rate, and also added Rs. 1.77 lacs for margin money investment in a car. The Tribunal, in the first round (ITA No. 44/Agr/2013), deleted the profit rate addition of Rs. 1,17,012/- and restored the 'car' issue to the Assessing Officer. In the consequential assessment, the Assessing Officer accepted the assessee's stand on the 'car' issue but, relying on the Tribunal's previous observations, added the entire cash deposits of Rs. 24.90 lacs as unexplained. This addition was upheld by the lower appellate authority, leading to the present appeal.

What were the issues?

1. Whether the addition of Rs. 24,90,250/- as unexplained cash deposits is sustainable in light of the deletion of the profit rate addition in the first round of appeal, turning on the principle of res judicata or consistency in assessment proceedings. Assessee's Contention: The assessee argues that since the profit rate addition on the same cash deposits was deleted in the first round of appeal, the entire addition of Rs. 24,90,250/- should also be deleted. The assessee relies on the principle of consistency and the fact that the issue of profit addition on these deposits has already been decided in their favour. Revenue's Contention: The Revenue contends that the Tribunal's earlier observations were harsh on the lower authorities regarding the assessment of cash deposits as business turnover. Therefore, the Tribunal should affirm the impugned addition of Rs. 24.90 lacs as made by the lower authorities, implying that the deletion in the first round pertained only to the profit element and not the principal sum if it remained unexplained.

Which sections of the Income-tax Act were involved?

Section 254,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AGRA

Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL

Hearing: 12.02.2025Pronounced: 12.02.2025

ORDER

PER SATBEER SINGH GODARA, JUDICIAL MEMBER:

This assessee’s appeal for assessment year 2008-09 arises against Commissioner of Income Tax (Appeals)-I, [in short, the “CIT(A)”], Agra’s in case No. 118/CIT(A)-I/Agra/ITO-3(5)/Mathura/2015-16 dated 27.03.2017, in proceedings under Section 254/143(3) of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’].

Heard both the parties at length. Case file perused.

It emerges during the course of hearing that this is the second round of litigation between the parties before the tribunal. Coming to the Shri Vijay Singh basic relevant facts, there is hardly any dispute between the parties that the learned Assessing Officer has framed assessment assessing the assessee’s cash deposits of Rs.24,90,250/- as his business turnover thereby applying GP rate of 5% thereupon followed by second addition amounting to Rs.1.77 lacs representing margin money investment in a car, respectively. The matter thereafter travelled up to the tribunal in assessee’s first round appeal wherein the learned co-ordinate bench deleted the profit rate addition of RS.1,17,012/- and restored the latter “car” issue back to the Assessing Officer.

It is in this factual backdrop that the learned Assessing Officer framed his consequential assessment on 27.03.2015 accepting the assessee’s stand qua the latter issue only. He however went by the tribunal’s observations to add the entire cash deposits of Rs.24. 90 lacs (supra) as unexplained which stand upheld in the lower appellate proceedings. This is what leaves the assessee aggrieved.

We have given our thoughtful consideration to the assessee’s and Revenue’s vehement argument reiterating their respective stands. The Revenue highlights the tribunal “earlier” first round detailed discussion in para 5 at page 6 & 7 that it had come very harsh on the lower authorities assessing the entire cash deposits as assesssee’s business turnover; and, therefore, we ought to affirm the impugned addition of Rs.24.90 lacs as is done by the lower authorities.

We find no reason to concur with the Revenue’s foregoing stand. This is for precise reason that once the very issue stood settled in first round wherein the impugned addition of Rs.1.17 lacs representing the profit rate stood deleted, we fail to understand how the very addition would be revived once merely based on same observations. We thus Shri Vijay Singh accept the assessee’s instant ground to delete the impugned addition in very terms.

This assessee’s appeal is allowed. Order pronounced in the open court on 12.02.2025

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