Mr Kothari Subhash Champalal, Chalisgaon v. CIT (A)-I, Aurangabad

ITA 1358/PUN/2005 | 1997-1998
Pronouncement Date: 11-04-2014 | Result: Allowed

Appeal Details

RSA Number 135824514 RSA 2005
Assessee PAN AKGPQ3506P
Bench Pune
Appeal Number ITA 1358/PUN/2005
Duration Of Justice 8 year(s) 10 month(s) 10 day(s)
Appellant Mr Kothari Subhash Champalal, Chalisgaon
Respondent CIT (A)-I, Aurangabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 11-04-2014
Date Of Final Hearing 12-10-2012
Next Hearing Date 12-10-2012
Assessment Year 1997-1998
Appeal Filed On 01-06-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 1358/PN/2005 (ASSESSMENT YEAR : 1997-98) MR. KOTHARI SUBHASH CHAMPALAL AT POST : UMBARKHED TAL : CHALISGAON DIST : JALGAON-424101 .. APPELLANT PAN NO.AKGPQ3506P VS. CIT(A)-I AURANGABAD .. RESPONDENT ASSESSEE BY : SHRI ABHAY AVCHAT REVENUE BY : SHRI P.L. PATHADE DATE OF HEARING : 09-04-2014 DATE OF PRONOUNCEMENT : 11-04-2014 ORDER PER R.K. PANDA AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 29-03-2005 OF THE CIT(A) AURANGABAD RELATING TO ASSESSMENT YEAR 1997-98. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE LD.CIT(A) ERRED IN CONFIRMING AN ADDITION O F RS.6 30 879/- MADE BY THE LD. AO WARD-2(2) JALGAON FOR A.Y.97-9 8 ON ACCOUNT OF UNEXPLAINED OPENING BALANCE OF CAPITAL. THE ADDITI ON BEING UNJUSTIFIED ON FACTS AND IN LAW MAY KINDLY BE DELETED. 2. THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THAT THE A SSESSMENT FOR IMMEDIATELY PRECEDING YEAR I.E. FOR A.Y. 1996-97 HAS COMPLETED IN COMPLIANCE TO ORDER U/S.263 ON 18-03-2005 IN WHICH CLOSING BALANCE IN CAPITAL ACCOUNT WAS CONFIRMED AT RS.6 30 879/- AND FO R THIS REASON ADDITION OF RS.6 30 879/- WAS NOT WARRANTED. 3. THIS APPEAL WAS FIRST DISMISSED BY THE TRIBUNAL FOR NON- APPEARANCE ON 27-11-2007 WHICH WAS SUBSEQUENTLY REC ALLED. AGAIN THE 2 APPEAL WAS DISMISSED FOR NON-APPEARANCE ON 12-12-20 12 WHICH WAS RECALLED VIDE M.A. NO.93/PN/2013 ORDER DATED 18-10- 2013. THEREFORE THIS IS A RECALLED MATTER. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE IN AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 19-03-1998 DECLAR ING TOTAL INCOME OF RS.55 530/-. DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE ASSESSEE PRODUCED BOOKS OF ACCOUNTS CONSISTING OF CASH BOOK LEDGER AND VARIOUS OTHER DETAILS AS CALLED FOR FROM TIME TO TIME BY TH E ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THAT THIS IS THE FIRST RETURN OF INCOME OF THE ASSESSEE. PRIOR TO THAT THE ASSESSEE WAS PAYING RS .1 400/- UNDER THE SCHEME U/S.115K. THE ASSESSING OFFICER WHILE VERIF YING THE BALANCE SHEET OF THE ASSESSEE NOTED THAT THE ASSESSEE HAS S HOWN CAPITAL OF RS.6 30 879/-. HOWEVER NO CAPITAL ACCOUNT WAS FIL ED. NO EARLIER CAPITAL ACCOUNTS WERE ALSO FILED ALONG WITH RETURN OF INCOM E. SINCE THE ASSESSEE HAD SHOWN THE CAPITAL ACCOUNT FOR THE FIRST TIME AN D THERE WERE NO DETAILS FILED TO EXPLAIN THE SOURCE OF CAPITAL OF RS.6 30 8 79/- THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBSTANTIATE WITH DOC UMENTARY PROOF FOR INTRODUCTION OF HUGE CAPITAL OF RS.6 30 879/-. THE ASSESSEE FILED AN EXPLANATION ALONG WITH TENTATIVE FORM OF CAPITAL AC COUNT FROM 01-04- 1990 TO 31-03-1996 TO SUBSTANTIATE CAPITAL OF RS.6 53 543/- AS ON 31-03- 1996. 4.1 HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT T HE SAID CASH FLOW STATEMENT. HE OBSERVED THAT THE ASSESSEE HAD MADE PAYMENT OF RS.1400/- UNDER THE SCHEME U/S.115K. HE HAS FILED THE FORMS FOR F.YRS. 93-94 94-95 AND 95-96. HE OBSERVED THAT THE ASSES SMENT FOR A.Y. 96-97 HAS BEEN REOPENED BY THE DEPARTMENT. REJECTING THE VARIOUS 3 EXPLANATIONS GIVEN BY THE ASSESSEE THE ASSESSING OF FICER HELD THAT THE CAPITAL SHOWN BY THE ASSESSEE AT RS.6 30 879/- AS N ON-GENUINE CREDIT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 4.2 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIN D THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR A.Y. 96-97 ON 17-07- 2001 DECLARING TOTAL INCOME OF RS.43 000/-. ON THE BASIS OF ASSESSMENT PROCEEDINGS FORA.Y.1997-98 IT WAS NOTED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED FOR WHICH NOTICE U/S.148 WAS ISSUED ON 03-08-99. T HEREAFTER THE ASSESSING OFFICER COMPLETED THE ASSESSMENT FOR A.Y. 1996-97 ON 30-07- 2001 DETERMINING THE TOTAL INCOME AT RS.1 04 000/-. SUBSEQUENTLY THE LD.CIT CALLED FOR THE RECORDS AND OBSERVED THAT THE ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) FOR A.Y. 1996-97 IS ER RONEOUS SINCE THE OPENING BALANCE OF THE CAPITAL ACCOUNT ON 01-04-199 6 SHOWN AT RS.6 53 543/- WHICH IS THE CLOSING BALANCE FOR A.Y. 1995-96 HAS NOT BEEN PROPERLY EXAMINED BY THE ASSESSING OFFICER. T HE RELEVANT DETAILS NOTED BY THE CIT IN HIS ORDER U/S.263 OF THE I.T. A CT ON 22-03-2004 READ AS UNDER : (II) AS PER INFORMATION FURNISHED BY THE ASSESSEE THE OP ENING BALANCE OF THE CAPITAL ACCOUNT ON 01-04-1996 IS SHOWN AT RS.6 53 543/- WHICH IS A CLOSING BALANCE FOR THE A.Y. 1995-96. (III) IN THE ASSESSMENT FOR A.Y. 1997-98 COMPLETED EARL IER TO THE ASSESSMENT FOR A.Y. 1996-97 THE A.O. HAD NOT ACCEPTED THE INTRODUCTION OF CAPITAL TO THE EXTENT OF RS.6 30 879/- AND ADDED THAT AMOUNT TO THE RETURNED INCOME OF A.Y. 1997-98 ON ACCOUNT OF UNEX PLAINED CAPITAL. 4 HOWEVER THE SAME A.O. WHILE COMPLETING THE ASSESSMENT F OR A.Y. 1996- 97 ACCEPTED THE OPENING CAPITAL OF RS.5 99 000/- FOR THE SAID ASSESSMENT YEAR. THUS ADDITION OF RS.6 30 879/- MADE ON ACCOUN T OF UNEXPLAINED CAPITAL FOR THE A.Y. 1997-98 IS INCLUSIVE OF CAPITAL AMOUNT OF RS.5 99 000/- SHOWN AS OPENING BALANCE IN CAPITAL ACCO UNT OF THE A.Y. 1996-97. BUT THE SAID OPENING BALANCE OF RS.5 99 000 /- IN CAPITAL ACCOUNT FOR THE A.Y. 1996-97 WAS NOT DISALLOWED AND A DDED ON ACCOUNT OF UNEXPLAINED CAPITAL BY THE A.O. FOR A.Y. 1996-97. THUS THE ORDER PASSED U/S.143(3) DATED 30-07-2001 FOR THE A.Y. 1996-9 7 IS ERRONEOUS IN SO FAR AS IT FAILED TO DISALLOW THE CLAIM OF OPENING C APITAL OF RS.5 99 000/- FOR THE SAID ASSESSMENT YEAR EVEN THOUGH IN THE ASSESSMENT F OR A.Y. 1997-98 (I.E. SUBSEQUENT YEAR) COMPLETED EARLIER U NEXPLAINED CAPITAL OF RS.6 30 879/- INCLUSIVE OF SUCH OPENING CAPITAL OF RS.5 99 000/- FOR A.Y. 1996-97 WAS ALLOWED AND ADDED. 5.1 HOWEVER FROM THE ASSESSMENT ORDER PASSED U/S.1 43(3) R.W.S. 263 OF THE I.T. ACT ORDER DATED 18-03-2005 FOR A.Y. 199 6-97 WE FIND THERE IS NO ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUN T OF OPENING CAPITAL OF RS.5 99 000/- AS ON 01-04-1995. IN OTHER WORDS THE ASSESSING OFFICER IN THE ORDER PASSED U/S.143(3) R.W.S. 263 HAS ACCE PTED THE OPENING CAPITAL OF RS.5 99 000/- AS ON 01-04-1995 AND THE C LOSING CAPITAL OF RS.6 53 543.26 AS ON 31-03-1996. ONCE THE CLOSING CAPITAL AS ON 31-03- 1996 TO THE TUNE OF RS.6 53 543/.26 IS ACCEPTED AS GENUINE THE SAME BECOMES HIS OPENING CAPITAL AS ON 01-04-1996. SINC E THE ASSESSING OFFICER DOES NOT DISPUTE THE OTHER FIGURES SUCH AS THE PROFIT DECLARED DURING THE YEAR AND INTEREST INCOME AS WELL AS THE DRAWINGS AND LIC PREMIUM AND SINCE THE NET CAPITAL AS ON 31-03-1997 IS SHOWN AT RS.6 30 879.36 AFTER CONSIDERING OPENING BALANCE O F RS.6 53 543.26 AS ON 01-04-1996 WE DO NOT FIND ANY JUSTIFICATION IN SUSTAINING THE ADDITION. 5.2 ADMITTEDLY THE ASSESSMENT ORDER PASSED U/S.143 (3)/263 ON 18-03- 2005 WAS NOT SUBMITTED TO THE CIT(A) WHO HAD PASSED THE ORDER ON 29- 03-2005. HOWEVER SINCE THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE CAPITAL SHOWN IN THE BALANCE SHEET AS ON 31-03-1996 IN THE ORDER PASSED 5 U/S.143(3)/263 FOR A.Y. 1996-97 THEREFORE WE FIND NO MERIT IN THE REQUEST OF THE LD. DEPARTMENTAL REPRESENTATIVE TO S ET-ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER SINCE THIS MATTER IS VERY OLD AND IT WILL NOT SERVE ANY PURPOSE. IN THIS VIEW OF THE MATTER WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO D ELETE THE ADDITION OF RS.6 30 879/-. WE HOLD AND DIRECT ACCORDINGLY. GR OUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 11-04-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PAND A) JUDICIAL MEMBER ACCOUN TANT MEMBER PUNE DATED: 11 TH APRIL 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE D.R A PUNE BENCH 4. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT PUNE BENCHES PUNE