M/s Razeullah Khan Samiullah Khan, Nagpur v. Income Tax Officer Ward 3(3), Nagpur

ITA 136/NAG/2013 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 13623914 RSA 2013
Assessee PAN ANTPK0729J
Bench Nagpur
Appeal Number ITA 136/NAG/2013
Duration Of Justice 2 year(s) 3 month(s) 20 day(s)
Appellant M/s Razeullah Khan Samiullah Khan, Nagpur
Respondent Income Tax Officer Ward 3(3), Nagpur
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 31-07-2015
Assessment Year 2009-2010
Appeal Filed On 10-04-2013
Judgment Text
1 ITA NO. 136/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH NAGPUR BEFORE SHRI MUKUL K. SHRAWAT JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER. I.T. A. NO.136/NAG/2013 ASSESSMENT YEAR : 2009 - 10. M/S RAZELLAH KHAN SAMIULLAH KHAN THE INCOME - TAX OFFICER C/O BOMBAY STEEL TRADERS V/S. WARD - 3(3) NAGPUR. PREETAM COMPLEX SMALL FACTORY AREA BAGADGANJ NAGPUR. PAN ANTPK0729J (APPELLANT) RESPONDENT. APPELLANT BY : SHRI ABHAY AGRAWAL. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 25 - 06 - 2015 DATE OF PRONOUNCEMENT : 31 ST JULY 2015. O R D E R PER SHRI MUKUL K. SHRAWAT J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM THE ORDER OF LEARNED CIT(APPEALS) - 19 MUMBAI (CAMP OFFICE NAGPUR) DATED 13 TH FEBRUARY 2013. THE GROUNDS RAISED ARE REPRODUCED BELOW : 1. CIT(A) ERRED IN CONFI RMING THE ORDER OF ASSESSING OFFICER. 2. CIT(A) ERRED IN NOT INVOKING PROVISION OF SECTION 44AF OF THE ACT. 2 ITA NO. 136/NAG/2013 3. CIT(A) ERRED IN CONFIRMING THE WORKING OF PEAK CREDIT IN THE BANK ACCOUNTS OF PNB & HDFC. 4. CIT(A) ERRED IN STATING THAT ASSESSEE HAS NOT FURNISHED ALL THE EVIDENCE PERTAINING TO THE CASE. 5. CIT(A) ERRED IN MAKING ADVERSE COMMENT AGAINST THE AUTHORIZED REPRESENTATIVE OF ASSESSEE AT PARA 4.3.3 AT PAGE NO. 10 OF THE ORDER. 6. THE CIT(A) PASSED THE COMMENTS WITHOUT HEARING AUTHORIZED REPRESENTATIVE WHICH WAS UNWARRANTED & UNCALLED FOR. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 28 - 10 - 2011 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS EARNING SALARY AND COMMISSION INCOME. A RETURN OF INCOME WAS FILED DECLARING INCOME OF ` .1 37 515/ - . AN INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO ` .20 46 808/ - IN PUNJAB NATIONAL BANK ACCOUNT. IN REPLY TO THE NOTICE THE ASSESSEE INFORMED THAT THE ACCOUNTS HAVE NOT BEEN MAINTAINED HOWEVER FURNISHED THE COPY OF THE BANK ACCOUNT OF PUNJAB NATIONAL BANK AND HDFC BANK. ON PERUSAL OF THOSE ACCOUNTS IT WAS FOUND BY THE ASSESSING OFFICER THAT THERE WERE HUGE DEPOSITS IN CASH IN THE SAID BANK ACCOUNTS. IN THE ABSENCE OF PROPER ACCOUNTS THE ASSESSIN G OFFICER HAS ISSUED A SHOW CAUSE NOTICE PROPOSING THE ADDITION OF PEAK CASH CREDIT IN THE BANK ACCOUNTS. THE ASSESSEES EXPLANATION WAS THAT HE WAS IN RETAIL TRADE OF PLASTIC SCRAP. THE SALE PROCEEDS WERE DEPOSITED IN THE BANK. IT WAS ALSO PLEADED THAT ON THE GROSS TURNOVER OF ` .30 21 808/ - THAT IS CASH DEPOSITED IN BOTH THE BANKS THE INCOME COULD BE DETERMINED AS PER THE PROVISIONS OF SECTION 44AF OF THE I.T. ACT. LATER ON THE ASSESSEE HAD CHANGED HIS EXPLANATION AND INFORMED THAT THE INCOME RECEIV ED WAS ONLY FROM SALARY AND COMMISSION. HE HAS INFORMED THAT THE CASH WAS DEPOSITED AND THE CHEQUES WERE ISSUED BY HIM AND FOR THIS ADJUSTMENT HE WAS GETTING ` .100/ - AS COMMISSION PER ` .25 000/ - . THE ARGUMENT OF THE ASSESSEE WAS THAT THE PEAK CREDIT SHOUL D NOT BE TAXED BECAUSE THE ASSESSEE HAS RECEIVED A SMALL PERCENTAGE OF COMMISSION. THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE WAS NOT CORRECTLY EXPLAINING THE FACTUAL POSITION. AFTER CONSIDERING THE NATURE OF DEPOSITS THE ASSESSING OFFICER HAS MADE FEW OBSERVATIONS AS UNDER : IN THE RETURN THE ASSESSEE HAS STATED THAT HE DERIVES INCOME FROM GENERAL COMMISSION AGENT (CODE 0301) AND AT PAGE 5 OF ITR 4 - NO 3 ITA NO. 136/NAG/2013 ACCOUNT CASE STATED THE GROSS RECEIPTS AT ` .1 42 700/ - GROSS PROFIT AT ` .1 42 700 EXPENS ES AT ` .35700/ - AND NET PROFIT AT ` .1 07 000/ - . ON THE BASIS OF THE DETAILS FURNISHED IN THE RETURN AND THE CASH DEPOSITS AND SUBSEQUENT WITHDRAWALS IN THE BANK ACCOUNT THE ASSESSEE WAS ASKED TO SHOW - CAUSE WHY PEAK CREDITS SHOULD NOT BE ADDED AS THE IN COME OF THE ASSESSEE. INSTEAD OF EXPLAINING THE DETAILS THE ASSESSEE CAME UP WITH THE STORY OF RETAIL TRADE OF PLASTIC SCRAP ROPE ETC. AND CLAIMED THAT THE COMMISSION INCOME IS NOTHING BUT INCOME DERIVED FROM TRADING OF GOODS AND THE GROSS TURNOVER OF ` .30 21 808/ - I.E. CASH DEPOSITED IN BOTH THE ACCOUNTS. IT IS THE ASSESSEE ON HIS OWN FILED THE RETURN STATING THAT HE DERIVES INCOME FROM COMMISSION WHICH FACT WAS REITERATED IN HIS ST ATEMENT DT. 24.10.2011. EVEN FOR A.YS. 2007 - 08 AND 2008 - 09 THE ASSESSEE HAS FILED THE RETURN DERIVING INCOME FROM GENERAL COMMISSION AGENT (CODE 0301). THE SUBSEQUENT STORY WOVEN BY THE ASSESSEE THAT HE DERIVES INCOME FROM PLASTIC SCRAP/ROPE ETC. AND T HE CASH DEPOSITED IN BOTH THE ACCOUNTS MAY BE TREATED AS GROSS TURNOVER AT ` .30 21 808/ - AND INCOME DETERMINED U/S 44AF IS FULL OF INCONSISTENCIES AND INHERENT CONTRADICTIONS AND IS NOTHING BUT AFTERTHOUGHT AND SELF - SERVING WHEN CORNERED BY ISSUE OF SHOW - CAUSE NOTICES. SUCH A CLAIM HAS NEVER BEEN MADE IN THE RETURN OF INCOME FILED ON 2.2.2010. THE ASSESSEE HAS NOT MENTIONED ANYWHERE IN THE RETURN THAT HIS CASE IS COVERED U/S 44AF. WITHOUT PREJUDICE TO WHAT IS STATED ABOVE EVEN IF THE CLAIM OF INCOME RETURNED U/S 44AF IS CONSIDERED THE 5% ON SO CALLED TURNOVER IS ` .1 51 090/ - WHEREAS THE ASSESSEE HAS CLAIMED GROSS PROFIT AT ` .1 42 700/ - AND NET PROFIT AT ` .107000/ - WHICH INCLUDES OTHER INCOME OF ` .40 245/ - AS PER PAGE 15 OF THE RETURN. FURT HER THE ASSESSEE HIMSELF HAS CONTRADICTED T HE SAME IN HIS STATEMENT AND HAS STATED THAT HE HAS NOT DONE ANY OTHER BUSINESS AND HIS SOURCE OF INCOME IS COMMISSION AND SALARY ONLY. THE MONEY DEPOSITED IN CASH IN THE BANK ACCOUNTS ARE ROUTED BACK TO THE PARTIES THROUGH CHEQUE AS PER THE NAME GIVEN BY THE AGENT. 2.1 FINALLY THE ASSESSING OFFICER HAS ALSO COMPUTED THE PEAK CASH IN PUNJAB NATIONAL OF ` .19 61 808/ - AND IN HDHD BANK OF ` .9 75 000/ - . AGAINST T HE SAID TWO ADDITIONS THE ASSESSEE HAS PREFERRED A N APPEAL. 4 ITA NO. 136/NAG/2013 3. WHEN THE MATTER WAS CARRIED BEFORE THE LEARNED CIT(APPEALS) IT WAS REITERATED THAT THE COMMISSION INCOME WAS TO BE TAXED. HOWEVER LEARNED CIT(APPEALS) HAS OPINED THAT THE ASSESSEE HAD CHANG ED HIS EXPLANATION TIME AND AGAIN AND HAD NOT COME WITH CLEAN HANDS THEREFORE AFTER DISCUSSING THE FEW CASE LAWS UPHELD THE ACTION OF THE ASSESSING OFFICER. 4. WITH THIS BRIEF BACKGROUND WE HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE APPELLANT LEAR NED A.R. MR. ABHAY AGRAWAL APPEARED AND FROM THE SIDE OF THE REVENUE LEARNED D.R. MR. NARENDRA KANE APPEARED. THE ONLY ARGUMENT BEFORE US FROM THE SIDE OF THE ASSESSEE WAS THAT AS PER PAGES 6 7&8 OF THE ASSESSMENT ORDER THERE WERE DETAILS OF DEPOSITS AND WITHDRAWALS MADE BY THE ASSESSEE IN THE ACCOUNT OF PUNJAB NATIONAL BANK. THE BALANCE COMPUTED WAS A RUNNING BALANCE HENCE THE IMPUGNED AMOUNT OF ` .19 54 808/ - WAS NOT THE PEAK CREDIT BUT THE HIGHEST RUNNING BALANCE IN THE BANK ACCOUNT. THEREFORE LEARNED A.R. HAS REQUESTED THAT AS FAR AS THE QUESTION OF ASSESSMENT OF PEAK CREDIT BALANCE IS CONCERNED THE SAME COULD BE TAXED IN THE HANDS OF THE ASSESSEE BUT THE CALCULATION OF PEAK CREDIT SHOULD BE CORRECTLY MADE BY THE ASSESSING OFFICER. 5. HAVING HEARD T HE SUBMISSIONS OF BOTH THE SIDES AND AFTER EXAMINING THE FACTS IN THE LIGHT OF THE DETAILS OF THE BANK DEPOSITS AS REPRODUCED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WE ARE OF THE VIEW THAT THERE IS SOME LOGICAL FORCE IN THE ARGUMENT OF THE LEARN ED A.R. THAT THERE WAS A WRONG BASIS OF COMPUTATION OF PEAK CREDIT IN BOTH THE BANK ACCOUNTS. IT APPEARS FROM THE DETAILS NOTED IN THE ASSESSMENT ORDER THAT THE CLOSING RUNNING BALANCE IN RESPECT OF BOTH THE BANK ACCOUNTS WAS CONSIDERED BY THE ASSESSING OF FICER AS THE HIGHEST PEAK CREDIT. THE ASSESSEE HAS TRIED TO DEMONSTRATE THAT IT WAS FACTUALLY INCORRECT. THUS IN THESE CIRCUMSTANCES NATURAL JUSTICE DEMANDS TO RESTORE THIS ISSUE BACK TO THE FILE OF THE 5 ITA NO. 136/NAG/2013 ASSESSING OFFICER TO BE DECIDED DENOVO AS PER LAW. RESULTANTLY THE GROUND RAISED BY THE ASSESSEE MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHR AWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR DATED: 31 ST JULY 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT NAGPUR. 5. THE D. R. ITAT NAGPUR. 6. GUARD FILE. BY ORDER TRUE COPY. ASSISTANT REGISTRAR ITAT NAGPUR WAKODE