ITO, New Delhi v. Sh. Satya Narayan Singhal, New Delhi

ITA 2613/DEL/2012 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 261320114 RSA 2012
Assessee PAN AOJPS4574A
Bench Delhi
Appeal Number ITA 2613/DEL/2012
Duration Of Justice 3 year(s) 2 month(s)
Appellant ITO, New Delhi
Respondent Sh. Satya Narayan Singhal, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 31-07-2015
Date Of Final Hearing 20-05-2015
Next Hearing Date 20-05-2015
Assessment Year 2009-2010
Appeal Filed On 30-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI S. V. MEHROTRA ACCOUNTANT MEMBER AND SHRI A. T. VARKEY JUDICIAL MEMBER ITA NO. 2613/DEL/2012 ASST. YEAR 2009-2010 INCOME TAX OFFICER WARD-42(4) ROOM NO. 318 3 RD FLOOR MAYUR BHAWAN CONNAUGHT PLACE NEW DELHI 110 002 VS. SH. SATYA NARAYAN SINGHAL HOUSE NO. 84-A POCKET J&K DILSHAD GARDEN DELHI 110 095 (PAN: AOJPS4574A) (APPELLANT) (RESPONDENT) DATE OF HEARING 20-05-2015 DATE OF PRONOUNCEMENT 31-07-2015 O R D E R PER A. T. VARKEY JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 18.4.2012 PASSED BY THE LD. CIT(A)-XXX NEW DELHI PER TAINING TO ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN I TS APPEAL:- APPELLANT BY : SH BRR KUMAR SR DR RESPONDENT BY : SH DD BANSAL. FCA 2 ITA NO.2613/DEL/2012 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN; DELETING THE ADDITION OF RS. 21 52 800/- ON ACCOUNT O F UNEXPLAINED CASH DEPOSITS BY HOLDING THAT THE SAME REP RESENTS THE CASH RECEIVED BY THE ASSESSEE FROM HIS BROTHER FOR PLYING OF TRUCKS OWNED BY THE ASSESSEE INSPITE OF THE FACT THA T NO SUCH INCOME WAS SHOWN BY THE ASSESSEE IN HIS RETURNS OF INCOME FILED. THE APPELLANT CRAVES THE RIGHT TO ALTER AMEND ADD O R SUBSTITUTE THE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN DECLARING INCOME AT RS.170477/- WAS FILED ELECTRONICALLY ON 30 .07.2009. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS (AIR). THE ASSESSEE IS AN EMPLOYEE OF M/S GIR MOVERS PVT. LTD. AS PER THE AIR DATA THE ASSESSE E HAD DEPOSITED CASH AMOUNTING TO RS.21 52 800/- WITH HIS ICICI BANK LTD. ICICI BANK TOWERS CIBD LEVEL-1 WEST WING 1-11-25 STREET NO.1 BEG UMPET HYDERABAD 50016. DURING THE ASSESSMENT PROCEEDINGS THE ASSES SEE WAS ASKED TO FURNISH DETAILS AND SOURCES OF ALL CASH DEPOSITS. THE AO TAKES NOTE THAT IN THE INCOME-TAX RETURN FOR THE ASSESSMENT YEAR 2009- 10 THE ASSESSEE HAS NOT DECLARED ANY INCOME FROM ANY TRANSPORT BUSINESS SO THE ASSESSEE WAS ASKED TO EXPLAIN CASH AMOUNTING TO RS.21 52 8001- DEP OSITED IN HIS AFORESAID BANK ACCOUNT WITH ICICI BANK WITH SUPPORT ING DOCUMENTARY EVIDENCES. 3 ITA NO.2613/DEL/2012 3.1 AO NOTES THAT DESPITE SEVERAL OPPORTUNITIES GRAN TED TO HIM ASSESSEE FAILED TO APPEAR BEFORE HIM AND DID NOT FURNISH ANY DOCU MENTS TO PROVE THE SOURCE OF SAID DEPOSIT . HENCE AO TREATED THE CASH DE POSIT AMOUNTING TO RS. 21 52 800/- IN HIS BANK ACCOUNT MAINTAINED WITH ICIC I BANK LTD. HYDERABAD AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE IN COME TAX ACT 1961(HEREIN AFTER THE ACT) AND COMPLETED THE ASSESSM ENT VIDE HIS ORDER DATED 29.11.2011 PASSED U/S. 144 OF THE ACT. 4. AGAINST THE AFORESAID ORDER OF THE ASSESSING OFFI CER ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE HIS ORDER DAT ED 29.11.2011 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 21 52 800/-. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REI TERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE . HE FURTHER SUBMITTED THAT THE ASSESSEE DECLARED IN HIS RETURN ONL Y INCOME AT RS.1 70 477/- AND THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS (AIR). AS PER THE AIR DATA HE HAD DEPOSITED CASH AMOUNTING TO RS .21 52 800/- WITH HIS ICICI BANK HYDERABAD. DURING THE ASSESSMENT PROCE EDINGS THE ASSESSEE WAS ASKED TO FURNISH DETAILS AND SOURCES OF ALL CASH DEPOSITS. IN THE INCOME- 4 ITA NO.2613/DEL/2012 TAX RETURN FOR THE ASSESSMENT YEAR 2009-10 THE ASSE SSEE HAS NOT DECLARED ANY INCOME FROM BUSINESS OR PROFESSION OR ANY INCOM E FROM A TRUCK. VIDE SHOW CAUSE NOTICE DATED 14.10.2011 THE ASSESSEE WAS ASKED TO EXPLAIN CASH AMOUNTING TO RS.21 52 800/- DEPOSITED WITH HIS BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD HYDERABAD WITH SUPPORT ING DOCUMENTARY EVIDENCES AND ALSO TO SHOW CAUSE AS TO THE UNEXPLAI NED PORTION OF CASH DEPOSITS COULD NOT BE TREATED AS UNEXPLAINED CASH CRE DIT U/S.68 OF THE ACT. HOWEVER THE ASSESSEE DID NOT CARE TO ADDUCE ANY EVIDENCE TO SUBSTANTIATED HIS CLAIM TO EXPLAIN THE SOURCE OF HIS DEPOSIT IN T HE ICICI BANK. SINCE THE ASSESSEE DID NOT APPEAR NOR FILED ANY DOCUMENTS BEFORE THE AO THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT AND TREA TED THE CASH DEPOSIT AMOUNTING TO RS. 21 52 800/- WITH HIS BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. HYDERABAD AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. IN VIEW OF THE ABOVE LD. D.R. CONTENTED THAT THE ORDER OF TH E LD. CIT(A) BE REVERSED AND THE ORDER OF THE AO MAY BE UPHELD AND ALLOW THE A PPEAL OF THE REVENUE. 7. ON THE CONTRARY LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND DEFENDED THAT THE SAME AND DOES NOT WANT US TO INTERFERE IN THE SAME. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. BEFORE THE LD. CIT((A) ASSESSEE HAS CONCEDED THAT THE ADDITION OF RS. 21 52 800/- WAS 5 ITA NO.2613/DEL/2012 MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT BECAUSE HE COULD NOT FURNISH THE DOCUMENTS BEFORE T HE AO DESPITE RECEIPT OF NOTICE FROM HIM (AO). WE TAKE NOTE THAT THE ASS ESSEE BEFORE THE LD CIT(A) STATES THAT HE HAILS FROM A TRANSPORTER FAMI LY OF JIND HARYANA. AND HE OWNS 02 TRUCKS (BEARING REGISTRATION NOS. HR 38F 8207 AND HR 38F 8217) IN HIS NAME SINCE LONG. SINCE HIS INCOME FROM THESE TRUCKS ALONE WAS NOT SUFFICIENT TO TAKE CARE OF HIS FAMILY HE JOINE D A LARGE GOODS TRANSPORT COMPANY AS AN EMPLOYEE. HE HOLDS A RESPONSIBLE POSIT ION IN THE SAID COMPANY. IN VIEW OF HIS TOTAL PRE- OCCUPATION WITH HIS OFFICIAL DUTIES IT BECAME PRACTICALLY IMPOSSIBLE FOR HIM TO FIND TIME F OR MANAGING HIS OWN TRUCKS. MOREOVER DURING THE RELEVANT PERIOD HE WAS POSTED AT HYDERABAD. IN VIEW OF THESE CIRCUMSTANCES HE ENTRUSTED HIS ELDE R BROTHER SHRI HARI OM SINGHAL WHO ALSO IS IN TRANSPORT BUSINESS WITH TH E MANAGEMENT OF HIS TRUCKS. THIS ARRANGEMENT CONTINUED DURING THE ASSES SMENT YEAR 2009-10 WHICH IS UNDER CONSIDERATION BEFORE US. 8.1 HE HAS FURTHER SUBMITTED THAT HE OWNS A PLOT MEA SURING 450 SQ. METERS AT KWC KALAMBOLI NAVI MUMBAI. WITH A VIEW T O AUGMENT HIS INCOME HE ENTERED INTO AN AGREEMENT ON 30/3/2008 W ITH M/S SHRI DATTA GURU CONSTRUCTION A LOCAL CONTRACTOR FOR CONSTRUCT ING A GODOWN ON THE SAID PLOT. HE ALSO ISSUED A CHEQUE NO. 021063 DT. 30/3/200 8 FOR RS. L 50 000/- FROM HIS ICICI BANK ACCOUNT AS ADVANCE FOR THE WORK . UNDER THE SAID 6 ITA NO.2613/DEL/2012 CONTRACT THE CONTRACTOR WAS TO BE PAID A TOTAL AMO UNT OF RS. 21 25 000/- AND THE WORK WAS TO BE COMPLETED BY 15/8/2008. 8.2 IT WAS SUBMITTED THAT SINCE THE ASSESSEE'S ONLY SOURCE OF INCOME IS HIS SALARY AND HIS TRUCKS ARE OPERATED BY SHRI HARI OM SINGHAL HIS ELDER BROTHER THE ASSESSEE REQUESTED HIM TO HELP HIM OUT BY PROVIDING HIM THE REQUIRED FUNDS OUT OF HIS TRUCK RECEIPTS AND SINCE THE PROFIT FROM HIS TRUCKS WAS VERY LOW HE PROMISED THAT HE WILL REPAY THE AM OUNT OUT OF THE RENTAL INCOME OF THE GODOWN (AFTER THE GODOWN WAS CONSTRUCTE D AND ONCE THE GODOWN STARTS GETTING RENT). SINCE THE ASSESSEE'S F INANCIAL HARDSHIPS WERE KNOWN TO HIS BROTHER AND AS THE ELDER BROTHER HE WA NTED TO LEND A HAND TO THE ASSESSEE AND SO HE DEPOSITED CERTAIN SUMS AGGREGA TING RS.21.35 LACS ON VARIOUS DATES BETWEEN 15/4/2008 TO 09/3/2009 ( I.E. IN ASSESSMENT YEAR 2009-10) IN THE ASSESSEE'S BANK ACCOUNT WITH ICICI BANK OUT OF THE GROSS FREIGHT RECEIPTS OF HIS TRUCKS SO THAT THE ASSESSE E COULD MAKE TIMELY PAYMENTS TO THE GODOWN CONSTRUCTION CONTRACTOR. 8.3 THE LD CIT(A) HAS TAKEN NOTE OF TO THE FACT THAT IN ROAD TRANSPORT BUSINESS IT IS QUITE NORMAL FOR THE TRUCK OPERATOR S TO COLLECT FREIGHT IN CASH AS THE PARTIES ARE OFTEN UNKNOWN AND THE OPERATOR H AS TO DEFRAY HEAVY CASH EXPENSES TOWARDS COSTS OF DIESEL TOLL TAX TRU CK MAINTENANCE EXPENSES AND OTHER CASH EXPENSES OF DRIVERS CLEANERS ETC. IN TRANSIT. ALSO THE NET MARGIN OF THE TRUCK OWNER IS VERY SMALL. IT WAS SU BMITTED BEFORE THE LD 7 ITA NO.2613/DEL/2012 CIT(A) THAT PRECISELY DUE TO THIS PECULIARITY OF TRU CK BUSINESS THE PROVISIONS OF SECTION 44AE OF THE ACT HAVE BEEN ENA CTED TO PROVIDE FOR COMPUTATION OF TRUCK INCOME ON A PRESUMPTIVE BASIS (@ 3 500/- P.M. FOR EACH TRUCK) WITHOUT INSISTING ON MAINTENANCE OF AC COUNTS BY SMALL TRANSPORTERS (HAVING UP TO 10 TRUCKS). 8.4 IN SUPPORT OF THE AFORESAID SUBMISSIONS THE A SSESSEE HAS PRODUCED BEFORE THE LD CIT(A) THE SWORN AFFIDAVITS OF HIMSELF AND HIS BROTHER SHRI HARI OM SINGHAL. HE HAS ALSO SUBMITTED THE CASH FLOW SHEETS OF BOTH HIS TRUCKS FOR THE RELEVANT PERIOD AND COPY OF CONTRACT W ITH M/S DATTA GURU CONSTRUCTION FOR CONSTRUCTION OF THE GODOWN. HE HAS ALSO SUBMITTED THE COPIES OF THE REGISTRATION CERTIFICATE (RC) OF HIS TRUCKS INSURANCE PREMIUM RECEIPTS NATIONAL PERMITS ETC. OF THESE TRUCKS IN ORDER TO FURTHER CORROBORATE HIS SUBMISSIONS. 8.5 WE FIND THAT THE LD. CIT(A) HAS CAREFULLY ANALYZE D THE ASSESSEE'S SUBMISSIONS AND ALSO CAREFULLY EXAMINED THE AO'S COMM ENTS IN HIS REMAND REPORT DATED 6/3/2012. WE FIND THAT BEFORE THE LD CIT(A ) THE ASSESSEE COULD JUSTIFY HIS ABSENCE BEFORE THE AO DURING ASSESS MENT PROCEEDING WHICH RESULTED IN BEST JUDGMENT ASSESSMENT U/S 144 O F THE ACT. IT IS A WELL KNOWN FACT THAT IN GOODS TRANSPORT BUSINESS CASH DEA LINGS ARE INEVITABLE AND ARE GENERALLY NOT VERIFIABLE PARTICULARLY IN CASE OF SMALL TRANSPORTERS IN WHOSE CASE THERE EXISTS STATUTORY PROTECTION IN THE FORM OF THE 8 ITA NO.2613/DEL/2012 PROVISIONS OF SECTION 44AE WHICH PRESCRIBES TAXATI ON OF SUCH INCOME ON DEEMED BASIS WITHOUT HAVING TO MAINTAIN ANY BOOKS OF ACCOUNTS. SINCE THE ORDER IN QUESTION WAS PASSED U/S 144 WITHOUT GOING THROUGH THESE DOCUMENTS/SUBMISSIONS BEEN BEFORE HIM AT THE TIME OF PASSING THE ASSESSMENT ORDER THE AO HAVE MADE THE ADDITION. LD. C IT(A) FURTHER OBSERVED THAT ON PERUSAL OF THE ASSESSEE'S ICICI BAN K STATEMENT OF THE RELEVANT PERIOD REVEALS THAT HE HAS MADE ALL PAYMENTS TO THE CONTRACTOR BY ACCOUNT PAYEE CHEQUES BY UTILIZING THE FUNDS DEPOSITE D IN HIS ACCOUNT BY HIS BROTHER. THUS HE NOTES THAT THERE IS A COMPLE TE AND CLEAR NEXUS BETWEEN THE PAYMENTS MADE BY THE ASSESSEE TO THE CON TRACTOR ON THE ONE HAND; AND THE PAYMENTS RECEIVED BY THE ASSESSEE FROM HIS BROTHER ON THE OTHER IN THE PRESENT CASE. THE NECESSITY OF THE FUN DS IN THE PRESENT CASE HAS ALSO BEEN PROVED BEYOND ANY DOUBT. THE IDENTITY OF HIS BROTHER SHRI HARI OM SINGHAL IS ALSO BEYOND ANY DOUBT SINCE HE HIMSE LF IS A TAX PAYER. THE LD CIT(A) NOTES THAT GENUINENESS OF THE ARRANGEMENT CANNOT BE REASONABLY QUESTIONED AS THE SAME IS BETWEEN 2 REAL BROTHERS WHO BELONG TO THE SAME FAMILY. THE LD CIT(A) APPRECIATES THE DESIRE OF THE E LDER BROTHER TO HELP HIS YOUNGER BROTHER PARTICULARLY WHEN THE FUNDS WERE N EEDED FOR A GENUINE PURPOSE SO ACCORDING TO HIM IT CANNOT BE REASONABLY QUESTIONED. 8.6 WE FIND THAT LD. CTI(A) RELIED ON THE RATIO OF C ASES ANAND RAM RAITANI VS.CIT 223 ITR 544(GAU) AND CIT POONA VS. BHAI CHAND H. GANDHI 9 ITA NO.2613/DEL/2012 141 ITR 67 (BORN) FOR CONCLUDING THAT SINCE BOOKS O F ACCOUNTS ARE NOT MAINTAINED BY THE ASSESSEE THERE IS NO LEGAL SCOPE TO INVOKE PROVISIONS OF SECTION 68 AND AS SUCH ADDITION MADE ON SUCH PREMISE W AS RIGHTLY DELETED. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS WE DO NOT FIND ANY LEGAL INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). IN O UR VIEW THE SAME DOES NOT NEED ANY INTERFERENCE ON OUR PART HENCE WE UPH OLD THE SAME. THEREFORE THE ISSUE INVOLVED IN THE REVENUES APPE AL RAISED BY REVENUE IS DISMISSED. 10. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2015. SD/- SD/- (S. V. MEHROTRA) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/07/2015 TS COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI