The ITO, Dewas v. Shri Ishwar Bairagi, Dewas

ITA 136/IND/2013 | 2008-2009
Pronouncement Date: 07-10-2013 | Result: Allowed

Appeal Details

RSA Number 13622714 RSA 2013
Assessee PAN AFBPB9778E
Bench Indore
Appeal Number ITA 136/IND/2013
Duration Of Justice 6 month(s) 24 day(s)
Appellant The ITO, Dewas
Respondent Shri Ishwar Bairagi, Dewas
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 07-10-2013
Assessment Year 2008-2009
Appeal Filed On 14-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARM A A.M. PAN NO. : AFBPB9778E I.T.A.NO. 136 /IND/201 3 A.Y. : 2008-09 ITO DEWAS VS. SHRI ISHWAR BAIRAGI 6 ANNAPURNA NAGAR DEWAS APPELLANT RESPONDENT APPELLANT BY : SHRI R.A.VERMA SR. DR RESPONDENT BY : SHRI S.S.DESHPANDE C. A. DATE OF HEARING : 01 . 10 .201 3 DATE OF PRONOUNCEMENT : 07 . 10 .201 3 O R D E R PER R. C. SHARMA A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 17.12.2012 FOR THE ASS ESSMENT YEAR 2008-09 IN THE MATTER OF ORDER PASSED U/S 143( 3) OF THE INCOME-TAX ACT 1961. 2. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE WAS C ARRYING ON -: 2: - 2 THE BUSINESS OF SALE AND PURCHASE OF STATIONERY DUR ING THE YEAR UNDER CONSIDERATION. AS PER AIR INFORMATION T HE ASSESSING OFFICER TOOK THE RETURN UNDER SCRUTINY. T HE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE TRA DING ACCOUNT PROFIT AND LOSS ACCOUNT BALANCE SHEET AND PRODUCE BOOKS OF ACCOUNT. THE ASSESSEE PRODUCED COMPUTERIZED BOOKS O F ACCOUNT WHEREIN DISCREPANCY WAS OBSERVED BY THE AS SESSING OFFICER. ACCORDINGLY HE REJECTED THE BOOKS OF ACCO UNT AND MADE ADDITION IN RESPECT OF VARIOUS CASH DEPOSITS I N THE BANK ACCOUNT. THE ASSESSING OFFICER ALSO DISALLOWED INTE REST CHARGED BY THE BANK ON THE PLEA THAT FUNDS WERE NOT UTILIZED FOR THE PURPOSE OF BUSINESS. 3. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE ASSESSEE WAS HAVING SUFFICIENT CASH AS PER CASH BOOK WHICH WAS UTILIZED FOR DEPOS IT IN THE BANK ACCOUNT ACCORDINGLY THE DEPOSIT IN THE BANK ACCOUNT WAS FULLY EXPLAINED. DISALLOWANCE OF INTEREST WAS A LSO DELETED BY OBSERVING THAT THE FUNDS WERE UTILIZED FOR THE P URPOSE OF BUSINESS. -: 3: - 3 4. IT WAS ARGUED BY THE LD. SENIOR DR THAT ON SO MANY INSTANCES THE ASSESSEE DID NOT PRODUCE THE DETAILS REQUIRED BY THE ASSESSING OFFICER. SO MANY OPPORTUNITIES WERE G IVEN BY THE ASSESSING OFFICER TO FURNISH THE DETAILS. AS PER LD . SENIOR DR VARIOUS DISCREPANCIES WERE NOTICED BY THE ASSESSING OFFICER IN THE BOOKS OF ACCOUNT. OUR ATTENTION WAS ALSO INVITE D TO THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER AS WE LL AS THE REMAND REPORT WHEREIN DISCREPANCIES IN THE BOOKS O F ACCOUNT WERE HIGHLIGHTED. AS PER LD. SENIOR DR THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE WITH RESPEC T TO HEAVY CASH DEPOSITED IN THE BANK ACCOUNT AS AGAINST THE T OTAL SALES SHOWN BY THE ASSESSEE AT RS. 5 91 543/- DURING THE ENTIRE YEAR. 5. ON THE OTHER HAND THE LD. AUTHORIZED REPRESENTATIV E SUPPORTED THE ORDER OF THE CIT(A) AND CONTENDED THA T THE ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE BOOKS OF ACCOUNT AND CIT(A) WAS JUSTIFIED IN DELETING THE A DDITION MADE ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT W HICH WAS AVAILABLE AS PER CASH BOOK FILED BEFORE THE ASSESSI NG OFFICER. -: 4: - 4 6. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. WE FOUND THAT DURING THE YEAR UNDER CONSID ERATION THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PURCHAS E AND SALE OF STATIONERY AND ALSO INCOME FROM PROPERTY DE ALING. DURING THE YEAR THE ASSESSEE HAD SHOWN TOTAL SALE OF RS. 5 91 543/-. NET BUSINESS INCOME OF RS. 2 76 092/- W AS OFFERED IN THE COMPUTATION OF INCOME. IT WAS ALSO STATED BY THE ASSESSEE THAT DURING THE YEAR UNDER CONSIDERATION HE WAS CARRYING ON BUSINESS OF STATIONERY AND ALSO HAVING COMMISSION INCOME FROM PROPERTY DEALING. SO FAR AS SALES OF RS . 5 91 543/- IN RESPECT OF STATIONERY BUSINESS WAS SHOWN THE AS SESSEE HAS OFFERED NET PROFIT OF RS. 532/- ( RS. 2 76 092 (-) 2 75 560). IN VIEW OF THE ASSESSEES CONTENTION THAT IT WAS CARRY ING ON RETAIL BUSINESS AND SECTION 44AF IS APPLICABLE THEREFORE NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNT UNDER THESE CIRCUMSTANCES THE ASSESSEE IS REQUIRED TO OFFER NE T INCOME OF 5 % ON THE SALES OF STATIONERY WHICH HE HAS NOT OF FERED AND OFFERED ONLY RS. 532/- IN SO FAR AS RS. 2 75 560/- WAS SHOWN AS COMMISSION RECEIPT FROM PROPERTY DEALING. -: 5: - 5 7. FROM THE RECORD WE FOUND THAT THE ASSESSING OFFICE R HAS MADE ADDITION OF RS. 14 74 000/- IN RESPECT OF CASH DEPOSITED IN SAVING BANK ACCOUNT NO. 476702021 IN I NDIAN BANK DEWAS BRANCH ON THE PLEA THAT AS PER CASH BO OK THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF DEPOSIT IN THE BANK ACCOUNT. BY THE IMPUGNED ORDER THE LD. CIT(A) DELE TED THE ADDITION BY OBSERVING THAT ALL ENTRIES OF THE CASH BOOK WERE AS PER CASH AVAILABLE IN THE HANDS IN THE CASH BOOK OF M/S. SHRI RAM STATIONERY AND PHOTOCOPIES A PROPRIETORY CONCE RN OF THE ASSESSEE. THE LD. CIT(A) FURTHER OBSERVED THAT DEPO SITS WERE MADE FROM WITHDRAWALS OUT OF REGULAR BOOKS OF ACCOU NT. SIMILARLY DEPOSIT OF CASH OF RS. 16 39 452/- IN TH E SAVING BANK ACCOUNT WITH NARMADA MALWA GRAMIN BANK DEWAS BRANCH WAS DELETED BY THE LD.CIT(A) BY OBSERVING T HAT THE ASSESSEE HAS EXPLAINED SOURCE OF DEPOSIT OUT OF CAS H IN HAND AS WELL AS MATURITY OF PROCEEDS OF FDR. AN ADDITION OF RS. 5 27 507/- WAS MADE BY THE ASSESSING OFFICER ON ACC OUNT OF CASH DEPOSITED IN THE SAVING BANK ACCOUNT WITH ORIE NTAL BANK OF COMMERCE DEWAS BRANCH. BY THE IMPUGNED ORDER T HE LD. CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE A SSESSEE HAS -: 6: - 6 DEPOSITED CASH AT RS. 5 LAKHS OUT OF CASH IN HAND A VAILABLE IN HIS BOOKS IN THE NAME OF SHRI ISHWAR BAIRAGI AND RS . 25 000/- IS CHEQUE OF INTEREST RECEIVED. 8. IT IS CLEAR FROM THE ORDER OF THE ASSESSING OFFICER THAT THE ADDITION FOR FOLLOWING AMOUNT WAS MADE ON ACCOU NT OF CASH DEPOSITED IN THE BANK ACCOUNT :- ACCOUNT NO. AMOUNT RS. BANK 476702021 14 74 000 INDIAN BANK 1404 25 56 994 NARMADA MALWA GRAMIN BANK 10000 16 39 452 - DO - DEWAS BRANCH 11502011008796 5 27 507 ORIENTAL BANK OF COMMERCE 9. HUGE CASH DEPOSIT OF RS. 61 97 953/- IN THE BANK ACCOUNT WAS EVEN THOUGH OUT OF CASH AVAILABLE AS PE R CASH BOOK BUT THE NATURE OF RESPECTIVE WITHDRAWALS AND DEPOSIT IN THE BANK WAS NOT EXPLAINED. AT THE VERY SAME TIME WE FOUND THAT DURING THE ENTIRE PERIOD THE ASSESSEE HAD SHO WN SALE OF RS. 5 91 543/- IN RESPECT OF STATIONERY BUSINESS. T O THE EXTENT OF SALES SHOWN IN THE BOOKS OF ACCOUNT WE CAN ACCE PT THE AVAILABILITY OF CASH OUT OF SALES HOWEVER BALANCE AMOUNT OF -: 7: - 7 CASH DEPOSITED IN THE ACCOUNT WAS NOT EXPLAINED WIT H RESPECT TO ITS SOURCE AND SUBSEQUENT DEPOSIT IN THE BANK AC COUNT. EVEN THOUGH AVAILABILITY OF CASH AS PER CASH BOOK W AS SHOWN BY THE ASSESSEE BUT THE REASON OF VARIOUS WITHDRAW ALS FROM BANK AND KEEPING HEAVY CASH IN HAND AND DEPOSIT OF CASH IN THE BANK SUBSEQUENTLY WAS NOT EXPLAINED. THE LD. CI T(A) HAS DELETED THE HUGE CASH DEPOSITED IN THE BANK ACCOUNT MERELY BY OBSERVING THAT CASH WAS AVAILABLE AS PER CASH BO OK. HOWEVER THE OBSERVATION OF THE ASSESSING OFFICER W ITH REGARD TO HEAVY DEPOSIT OF CASH IN THE BANK ACCOUNT IS VER Y MUCH RELEVANT WHICH AMOUNTS TO RS. 61 97 953/- AS AGAIN ST TOTAL SALES OF RS. 5 91 543/- SHOWN BY THE ASSESSEE IN HI S BOOKS OF ACCOUNT. DEPOSIT IN BANK ACCOUNT CAN REASONABLY BE TAKEN OUT OF SALES PROCEEDS. ACCORDINGLY WE MODIFY THE ORDER S OF LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO RES TRICT ADDITION BY COMPUTING INCOME AT 5 % OF THE CASH DEPOSITED IN THE BANK ACCOUNT. DEPOSIT IN THE BANK ACCOUNT THROUGH TRANSF ER ENTRY/CHEQUE IS TO BE IGNORED WHILE COMPUTING 5% ON THE CASH AMOUNT DEPOSITED IN THE BANK. WE DIRECT ACCORDINGLY . -: 8: - 8 10. SO FAR AS PAYMENT OF INTEREST OF RS. 76 000/- TO BA NK IS CONCERNED THE LOAN WAS TAKEN FOR THE PURPOSE OF BUSINESS ACCORDINGLY CIT(A) HAS CORRECTLY DELETED THE SAME. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :7 TH OCTOBER 2013. CPU* 3.4.7.10