ACIT, Range-III, Gwalior v. Shri Munna Lal Gupta, Dabra

ITA 294/AGR/2004 | 1999-2000
Pronouncement Date: 14-01-2011 | Result: Allowed

Appeal Details

RSA Number 29420314 RSA 2004
Bench Agra
Appeal Number ITA 294/AGR/2004
Duration Of Justice 6 year(s) 4 month(s) 21 day(s)
Appellant ACIT, Range-III, Gwalior
Respondent Shri Munna Lal Gupta, Dabra
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 14-01-2011
Date Of Final Hearing 27-12-2010
Next Hearing Date 27-12-2010
Assessment Year 1999-2000
Appeal Filed On 23-08-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO. 294/AGRA/2004 ASSTT. YEAR : 1999-2000 A.C.I.T. RANGE-III VS. SHRI MUNNA LAL GUPTA GWALIOR. PROP. NATHURAM MUNNALAL DABRA. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI A.K. SHARMA JR. D.R. FOR RESPONDENT : NONE ORDER PER P.K. BANSAL A.M. : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 13 TH MAY 2004 OF LEARNED CIT(A) TAKING THE FOLLOWING GROUNDS OF APP EAL : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN REDUCING THE NET PROFIT FROM 3% TO 1% ON TURNOVER O F BANK DEPOSITS/TRANSACTIONS IN BANK BY TREATING IT AS TURNOVER OF BUSINESS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN DELETING ADDITION ON ACCOUNT OF UNEXPLAINED CASH CR EDIT U/S. 68 FOR RS.26.12.652/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN ALLOWING PART OF THE INCOME AS AGRICULTURAL INCOME AS AGAINST THE INCOME TREATED BY A.O. AS INCOME FROM UNDISCLOSED SOURCES. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THO UGH THE NOTICE WAS SENT THROUGH REGISTERED A/D. THE CASE WAS ADJOURNED EARLIER ALSO FROM TIME TO TIME. NOBODY APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH NOTICES WERE SEN T AND SERVED THROUGH REGISTERED POST. WE THEREFORE DECIDED TO DISPOSE OF THIS APPEAL EXPART E AFTER HEARING THE LEARNED D.R. 2 3. THE BRIEF FACTS RELATING TO FIRST GROUND OF APPE AL ARE THAT WHILE COMPLETING THE ASSESSMENT OF ONE SHRI KISHORILAL VANSHKAR FOR ASSESSMENT YEAR 1999-2000 THE ASSESSING OFFICER VIDE HIS ORDER DATED 28.03.2002 HELD THAT THE INCOME OF SHRI VANSHKAR WAS ACTUALLY ASSESSABLE IN THE HANDS OF THE RESPONDENT SHRI MUNNALAL GUPTA ON SUBS TANTIVE BASIS AND IN THE HANDS OF SHRI VANSKAR ON PROTECTIVE BASIS AS SHRI KISHORILAL VAN SHKAR WAS THE BENAMIDAR OF THE ASSESSEE. THE LEARNED ASSESSING OFFICER IN THE ASSESSMENT ORDER O F SHRI KISHORI LAL VANSHKAR STATED THAT HE DEALT IN AGRICULTURAL PRODUCE IN THE NAME AND STYLE OF MAA PITAMBARA TRADING CO. DURING THE YEAR UNDER CONSIDERATION THE ASSESSING OFFICER FOU ND THAT TOTAL AMOUNT OF RS.69 17 596/- WAS DEPOSITED BY CHEQUE/DD DURING THE YEAR IN THE BANK ACCOUNT. IN ABSENCE OF ANY EXPLANATION REGARDING BANK ACCOUNT THE ASSESSING OFFICER TREAT ED THE TOTAL CREDITS APPEARING IN CASH/CLEARING/TRANSFER AMOUNTING TO RS.69 17 596/- AS BUSINESS TURNOVER OF SHRI VANSHKAR. SINCE SHRI VANSHKAR WAS HELD TO BE THE BENAMIDAR OF THE A SSESSEE THIS AMOUNT WAS TREATED AS THE BUSINESS TURNOVER OF THE ASSESSEE/RESPONDENT. THE A SSESSING OFFICER ESTIMATED THE NET PROFIT ON THIS TURNOVER @ 3% AT RS.2 07 528/- AND ADDED THE S AME TO THE TOTAL INCOME OF ASSESSEE U/S. 69 OF THE INCOME-TAX ACT TREATING IT TO BE THE UNDISCLOSE D INCOME OF THE ASSESSEE. THE LEARNED CIT(A) APPLYING THE NET PROFIT RATE OF 1% REDUCED THE TRA DING ADDITION FROM RS.2 07 528/- TO RS.69 175/- ON THE GROUND THAT IN ALL THE CASES BEL ONGING TO THE ASSESSEE-GROUP THE NET PROFIT HAS BEEN ADOPTED @ 1% OF THE TURNOVER. 4. THE LEARNED DR VEHEMENTLY RELIED ON THE ORDER OF THE ASSESSING OFFICER ESPECIALLY PARA 4 OF THE ORDER. 3 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS BY THE LEARNED DR. NONE IS PRESENT ON BEHALF OF THE ASSESSEE. WE NOTED THAT THE ASSESSING OFFICER HAS GIVEN A FINDING THAT IN THE BANK ACCOUNT OF THE ASSESSEE THE ASSESSEE HAS DEPOSITED A SUM WORTH RS. 69 17 596/- BY CHEQUE/DD DURING THE YEAR. THE ASSESSEE HAS NOT OFFERED ANY E XPLANATION REGARDING THE BANK ACCOUNT AND NOT FILED ANY TRADING AND PROFIT & LOSS ACCOUNT AND TH EREFORE THE WHOLE OF THE AMOUNT HAS TO BE TREATED TO BE THE TURNOVER OF THE BUSINESS OF ASSES SEE. IN ASSESSMENT YEAR 1987-88 THE NET PROFIT FROM GRAIN BUSINESS HAS BEEN DISCLOSED BY THE ASSES SEE @ 1.6%. EVEN THE ASSESSING OFFICER HAS ALSO BROUGHT ON RECORD COMPARABLE CASES OF THE SAME LOCALITY I.E. M/S. KALKA PRASAD SHIVHARE AND SH. HARIRAM SADHWANI IN WHICH THE NET PROFIT H AS BEEN DISCLOSED @4.42% AND 2.19% RESPECTIVELY AND ACCORDINGLY THE ASSESSING OFFICER HAS ESTIMATED THE NET PROFIT @ 3%. WHEN THE MATTER WENT BEFORE THE CIT(A) THE CIT(A) HAS REDUC ED THE NET PROFIT @ 1% BUT WITHOUT CONTRAVENING THE FINDING OF THE ASSESSING OFFICER T HAT THE ASSESSEE HAS DISCLOSED PROFIT IN THE ASSESSMENT YEAR 1987-88 @ 1.6% AND IN COMPARABLE CA SES THE NET PROFIT HAS BEEN RETURNED @ 4.42% AND 2.19%. THE LEARNED CIT(A) SIMPLY STATED T HAT HE HAD ADOPTED NET PROFIT RATE OF 1% IN OTHER CASES OF THIS GROUP. THEREFORE HE DIRECTED T HE ASSESSING OFFICER TO ESTIMATE THE NET PROFIT @ 1%. EXCEPT MENTIONING OTHER GROUP CASES NEITHER THE NAME OF THE CASE NOR THE ASSESSMENT YEAR WAS MENTIONED IN THE ORDER. IN OUR OPINION SU CH APPROACH OF THE CIT(A) IS NOT JUSTIFIED ESPECIALLY WHEN THE ASSESSING OFFICER HAS GIVEN COM PARABLE CASES AND THAT OF THE ASSESSEE ITSELF. THE ASSESSEE HIMSELF RETURNED THE NET PROFIT FOR TH E ASSESSMENT YEAR 1987-88 @ 1.6%. THEREFORE IN OUR OPINION THE NET PROFIT RATE OF 1.6% IS A RE ASONABLE RATE ESPECIALLY KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAS NOT GIVEN ANY REASON WHY THE PROFIT CANNOT BE DERIVED AT THIS RATE DURING THE YEAR UNDER CONSIDERATION. THE INSTANCE OF ASSESSEE S BUSINESS RELATING TO THE EARLIER YEAR IN OUR OPINION IS THE BEST COMPARATIVE INSTANCE WHICH CAN NOT BE IGNORED FOR ESTIMATING THE PROFIT. WE 4 ACCORDINGLY SET ASIDE THE ORDER OF LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO WORK OUT THE NET PROFIT @ 1.6% ON THE TURNOVER OF RS.69 17 5 96/- AND TREAT THE SAME TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE. THUS THE FIRST GROUND TAKE N BY THE REVENUE IS PARTLY ALLOWED. 6. THE FACTS RELATING TO SECOND GROUND OF APPEAL AR E THAT WHILE COMPLETING THE ASSESSMENT OF SHRI KISHORI LAL VANSHKAR FOR THE ASSESSMENT YEAR 1 999-2000 THE ASSESSING OFFICER FOUND FROM THE BANK ACCOUNT IN ORIENTAL BANK OF COMMERCE DABR A THAT THE PEAK AMOUNT OF DEPOSIT IN THE BANK ACCOUNT WAS RS.21 16 162/- ON 10.02.1999. HE A LSO FOUND THAT THE HIGHEST CREDIT BALANCE ON THAT DATE WAS RS.26 12 652/-. FOR WANT OF ANY EXPLA NATION WITH REGARD THERETO THE ASSESSING OFFICER TREATED THIS AMOUNT OF RS.26 12 652/- AS UN EXPLAINED CASH CREDITS AND ADDED IT TO THE TOTAL INCOME OF ASSESSEE U/S. 68 OF THE INCOME TAX ACT AS SHRI KISHORI LAL VANSHKAR WAS HELD TO BE THE BENAMIDAR OF THE ASSESSEE. THE LEARNED CIT(A) A FTER CONSIDERING THE DETAILS OF THE CREDITS ALONGWITH DD NUMBERS SUBMITTED BY ASSESSEE OBSERVE D THAT THESE AMOUNTS IN BANK WERE RECEIVED FROM DIFFERENT MANUFACTURERS FROM OUTSIDE GWALIOR WHO PURCHASED THEIR RAW MATERIALS THROUGH MAA PITAMBARA TRADING CO. HE THEREFORE DE LETED THE ADDITION OF RS.26 12 652/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS FURTHER OBSE RVING THAT THE AMOUNT IN QUESTION HAS ALREADY BEEN INCLUDED IN THE TURNOVER OF THE ASSESSEE AND T HEREFORE IT CANNOT BE AGAIN CONSIDERED AS UNEXPLAINED CASH CREDITS. 7. THE LEARNED DR RELIED ON THE ORDER OF THE ASSESS ING OFFICER. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE LEARNED DR A ND HAVE ALSO GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW. WE NOTED THE ASSESSING OFFICER WHILE MAKING ADDITION OF RS.26 12 682/- AS UNEXPLAINED INVESTMENT IN BUSINESS ON THE BASIS OF THE PEAK CREDIT BALANCE IN THE ORIENTAL BANK 5 ACCOUNT OF THE ASSESSEE HAS NOTED THAT THE ASSESSE E HAS DEPOSITED IN ORIENTAL BANK OF COMMERCE DABRA AN AMOUNT OF RS.21 16 162/- ON 18.02.1991. TH E ASSESSING OFFICER HAS ALSO FOUND THAT THE ASSESSEE HAS UTILIZED THIS AMOUNT FOR MAKING THE FD R. THE CIT(A) DELETED THE ADDITION ON THE BASIS THAT THESE AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE FROM THE CREDITOR WHO SENT THE MONEY IN ADVANCE FOR GETTING THE RAW MATERIAL ESPE CIALLY MUSTERED AND SOYA FROM APPELLANT. BUT IN OUR OPINION THE CIT(A) HAS NOT CONSIDERED HOW T HE FIXED DEPOSIT HAS BEEN GENERATED OF THIS AMOUNT. THE FIXED DEPOSIT IN OUR OPINION COULD N OT HAVE BEEN MADE EITHER OUT OF THE INTERNAL GENERATION OR OUT OF THE MONEY BORROWED OR OUT OF T HE SALE PROCEEDS OF ANY OF THE ASSETS. THE INCOME RETURNED BY THE ASSESSEE AND EVEN ESTIMATED @ 1.6% IN OUR OPINION CANNOT GENERATE THE AMOUNT WHICH IS SUFFICIENT TO PROVE THE SOURCE OF F DR. THIS ASPECT IN OUR OPINION HAS NOT BEEN LOOKED INTO BY THE CIT(A) WHILE DELETING THE ADDITI ON. BEFORE US ALSO SINCE THE ASSESSEE HAS NOT APPEARED IN ABSENCE OF FULL FACT WE FEEL IT APPRO PRIATE IN THE INTEREST OF JUSTICE TO RESTORE THIS ISSUE TO THE FILE OF THE CIT(A) AND DIRECT THE CIT( A) TO RE-EXAMINE THIS ISSUE AND GIVE A CLEAR CUT FINDING WHETHER THE ASSESSEE HAS MADE THE FDR OR HO W MUCH BALANCE HAS BEEN GENERATED IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE YEAR WHETH ER THIS BALANCE CAN SUFFICIENTLY BE CREATED OUT OF THE INCOME AS RETURNED OR ADDITION SUSTAINED BY US AFTER REDUCING THE DRAWINGS MADE BY THE ASSESSEE DURING THE YEAR. WE ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND ALLOW THE SECOND GROUND OF REVENUE FOR STATISTICAL PURPOS ES. 8. THE FACTS RELATING TO THIRD GROUND OF APPEAL ARE THAT THE ASSESSEE DECLARED AGRICULTURAL INCOME OF RS.1 53 235/- IN HIS RETURN OF INCOME FOR A.Y. 1999-2000. HOWEVER FOR WANT OF ANY EVIDENCE IN SUPPORT OF AGRICULTURAL INCOME SHOWN BY ASSESSEE THE ASSESSING OFFICER REJECTED THE CLAIM OF ASSESSEE AND TREATED THE ALLEGED AGRICULTU RAL INCOME OF RS.1 53 235/- AS INCOME EARNED 6 FROM UNDISCLOSED SOURCES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) HELD THAT IN PAST YEARS I.E. A.Y. 1994-95 THE AS SESSING OFFICER HIMSELF VIDE ASSESSMENT ORDER U/S. 143(3) AND IN A.Y. 1995-96 AND 1998-99 THE LD . CIT(A) VIDE ORDERS DATED 31.03.2004 AND 20.03.2002 RESPECTIVELY HAVE ACCEPTED THE PART OF T HE DECLARED AGRICULTURAL INCOME OF THE ASSESSEE. HE THEREFORE HELD THAT THIS YEAR ALSO T HE ASSESSEE WAS HAVING AGRICULTURAL INCOME. THUS KEEPING IN VIEW THE PAST HISTORY OF ASSESSEE ON THIS ISSUE THE LEARNED CIT(A) TREATED THE AMOUNT OF RS.75 000/- AS INCOME DERIVED FROM AGRI CULTURE AND CONSIDERED THE REMAINING AMOUNT OF RS.78 235/- AS INCOME FROM OTHER SOURCES. 9. THE LEARNED DR VEHEMENTLY RELIED UPON THE ORDER OF ASSESSING OFFICER. HAVING HEARD THE LD. DR AND CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW WE NOTED THAT THE LEARNED CIT(A) HAS RIGHTLY TREATED THE SUM OF RS.75 000/- AS AGRICULTU RAL INCOME EARNED BY ASSESSEE AND REMAINING SUM OF RS.78 235/- AS INCOME FROM OTHER SOURCES. FO R THIS THE LEARNED CIT(A) HAS TAKEN INTO ACCOUNT THE PAST RECORDS OF ASSESSEE WHERE IN ASSE SSMENT YEAR 1994-95 THE ASSESSING OFFICER AND IN 1995-96 & 1998-99 THE CIT(A) HAVE ACCEPTED PARTIAL CLAIM OF AGRICULTURAL INCOME MADE BY THE ASSESSEE. THE LEARNED DR HAS NOT BEEN ABLE T O REBUT THE REASONING GIVEN BY THE LEARNED CIT(A) FOR ACCEPTING THE CLAIM OF ASSESSEE IN PART IN THE YEAR UNDER CONSIDERATION. WE THEREFORE FIND NO REASON TO INTERFERE IN THE CONCLUSION REACH ED BY THE CIT(A) ON THIS COUNT. THE GROUND NO. 3 RAISED BY REVENUE IS THEREFORE REJECTED. IN THE RESULT THE APPEAL FILED BY REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.01.2011. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 TH JANUARY 2011 *AKS/- 7 COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT CONCERNED 5. DR ITAT AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY