Shri Pachpute Rakeesh Kailas, Ahmednagar v. ITO, Pune

ITA 59/PUN/2009 | 2005-2006
Pronouncement Date: 24-09-2010 | Result: Allowed

Appeal Details

RSA Number 5924514 RSA 2009
Assessee PAN AMUPP1579Q
Bench Pune
Appeal Number ITA 59/PUN/2009
Duration Of Justice 1 year(s) 8 month(s) 10 day(s)
Appellant Shri Pachpute Rakeesh Kailas, Ahmednagar
Respondent ITO, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 24-09-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 24-09-2010
Assessment Year 2005-2006
Appeal Filed On 14-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRAKUMAR YADAV AND SHRI D. KARUN AKARA RAO ITA NO. 59/PN/09 (ASST. YEAR 2005-06) SHRI PACHPUTE RAKESH KAILAS AT. POST KASTI TAL. SHRIGONDA DIST. AHMEDNAGAR PAN NO. AMUPP1579Q .... APPELLANT VS. ITO CIB-2 PUNE . RESPONDENT APPELLANT BY : SHRI KADAM RESPONDENT BY : SMT. MANJU AJWANI ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E CIT(A)-I PUNE DATED 17/10/2008 FOR THE ASSESSMENT YEAR 2005-06 AND THE GROUNDS RAISED AND STATEMENT OF FACTS ARE AS FOLLOWS:- 1. IN THE CIRCUMSTANCES AND FACTS OF THE CASE THE CIT(APPEALS)-I PUNE WAS NOT JUSTIFIED IN CONFIRMING THE ORDER U/S. 143( 3) PASSED BY THE ITO (CIB)-2 PUNE HOLDING THAT THE DEPOSITS IN S.B. ACC OUNT NO. 14/00349 IN NAGAR URBAN BANK KASTI TAL. SHRIGONDA DIST. AHMED NAGAR ARE OF THE ASSESSEE AND ASSESSING THE PEAK OF DEPOSITS OF RS. 501971 IN THE HANDS OF ASSESSEE FOR A.Y 2005-06 TREATING IT AS UNEXPLAINED INVESTMENT. 2. THE CIT(APPEALS) WAS NOT JUSTIFIED IN NOT CONSID ERING THE DOCUMENTS I.E. BANKS CERTIFICATE DT. 3-6-2008 ALON GWITH LIST OF DDS PURCHASED OF PETROL DIESEL ETC. THESE DOCUMENTS WE RE PRODUCED AS AN ADDITIONAL EVIDENCE BEFORE THE HON CIT(A) WHO ADMI TTED THE SAME. 3. THE HON. CIT(APPEALS)-I PUNE HAS ERRED IN NOT C ONSIDERING THE AFFIDAVIT OF SHRI SURESH YADAV DESHMUKH PRODUCED DU RING THE APPELLATE STAGE IN WHICH HE HAS STATED THAT ALL THE TRANSACTIO NS OF DEPOSITS AND WITHDRAWALS ARE HIS BUSINESS TRANSACTIONS AND ARE D ULY RECORDED IN HIS REGULAR BOOKS OF ACCOUNTS WHICH WERE GOUT AUDITED A ND THAT THE BOOKS WERE PRODUCED BEFORE THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF THE APPELLANT AND FURTHE R STATED THAT RELEVANT ITA NO. 59/PN/09 A.Y 2005-06 PAGE 2 OF 5 PROCEEDINGS IN THE CASE OF THE APPELLANT AND FURTHE R STATED THAT RELEVANT ENTRIES WERE ALSO SHOWN TO THE A.O WHO HAS ADMITTED THE FACTS IN PARA 4 OF HIS ASSESSMENT ORDER. 4. THE HON. CIT(APPEALS) IS NOT CORRECT IN STATING IN PARA 4 OF THE APPELLATE ORDER THAT NO EVIDENCE IN THIS REGARD WAS SUBMITTED AT THE ASSESSMENT STAGE AND THAT EVEN AT APPELLATE STAGE T HE CASH BOOK OF PRAJAKTA FILLING STATION WAS NOT PRODUCED AS THE CA SH BOOK WAS PRODUCED AT THE ASSESSMENT STAGE WHICH WAS VERIFIED BY THE A .O. AND A BANKS CERTIFICATE LIST OF DDS PURCHASED FROM THE CONCERNE D SB ACCOUNT IN FAVOUR OF BHARAT PETROLIUM CORPN. FOR PRAJAKTA FILLING STA TION WAS PRODUCED BEFORE THE HON. CIT(APPEALS) AS AN ADDITIONAL EVIDE NCE. THE PAY-IN-SLIPS AND XEROX COPIES OF DDS WERE NOT REQUISITIONED BY T HE A.O THOUGH MENTIONED SO IN ASSESSMENT ORDER. THE HON ITAT PUNE BENCH PUNE IS REQUESTED TO VACA TE THE ASSESSMENT ORDER PASSED MENTIONED SO IN ASSESSMENT ORDER. STATEMENT OF FACTS THE APPELLANT IS AN AGRICULTURIST LOOKING AFTER AN CESTRAL AGRICULTURE LAND. THERE IS NO OTHER SOURCE OF INCOME DURING THE FINAN CIAL YEAR RELEVANT TO ASSESSMENT YEAR 2005-06. THE APPELLANT HAD OPENED A SPECIAL SAVING BANK ACCOUNT IN NAGAR URBAN BANK KASTI BY DEPOSITI NG RS. 10 000/- TO ACCOMMODATE HIS FRIEND SHRI SURESH MADHAV DESHMUKH PROP. PRAJAKTA FILLING STATION BELWANDI. SHRI DESHMUKH REQUESTED T O PURCHASE DDS FOR HIM IN FAVOUR OF BHARAT PETROLIUM LTD; FOR PURCHASE OF PETROL DIESEL ETC. FROM THE SAID ACCOUNT BY DEPOSITING SALE PROCEEDS O F PRAJAKTA FILLING STATION WHEN SHRI DESHMUKH WAS OUT OF STATION AS HE RESIDED AT PUNE. A NOTICE U/S. 142(1) FOR FILLING OF RETURN WAS THEREFO RE ISSUED BY THE A.O AND SERVED. ACCORDINGLY A RETURN OF INCOME DECLARING IN COME OF RS. 36000/- WAS FILED ON 19.09.2007. DURING THE COURSE OF ASSES SMENT PROCEEDINGS THE FACT WERE BROUGHT TO THE NOTICE OF A.O. THE A.O ALSO ISSUED SUMMONS TO SHRI SURESH DESHMUKH WHO CONFIRMED THE FACTS. TH E A.O ALSO VERIFIED THE BOOKS OF SHRI DEHSMUKH. THE A.O. HOWEVER FOUND THAT DEPOSITS IN S.B A/C ARE RS. 22841100/- AS AGAINST SALES OF PRAJ AKTA FILLING STATION AT RS. 41845841 AND THAT NO SEPARATE LEDGER OF THE APP ELLANT IS APPEARING IN THE BOOKS AND TAXED THE PEAK OF CASH DEPOSITED IN T HE S.B.A/C. IN THE HANDS OF ASSESSEE. THE A.O ERRED IN HOLDING THAT TH E CASH DEPOSITS IN THE S.B. A/C. ARE OWNED BY THE APPELLANT WHEN THE ENTIR E TRANSACTIONS ARE OWNED AND ACCOUNTED FOR IN THE BOOKS OF OTHER I.E. OF PRAJAKTA FILLING STATION. 2. RELEVANT FACTS AND THE EVENTS THAT LED TO THE CO NFIRMING THE ADDITIONS ARE NARRATED IN PARA 3.2 OF THE IMPUGNED ORDER. IT ALSO CON TAINS THE SUBMISSIONS OF THE ASSESSEE MADE VIDE LETTER DATED 22/09/2008. THE SAID PARA 3.2 READ AS FOLLOWS:- 3.2 THE ADDITIONAL EVIDENCE SUBMITTED BY THE APPE LLANT WAS FORWARDED TO THE ASSESSING OFFICER ALLOWING HIM AN OPPORTUNIT Y WITHIN THE MEANING OF RULE 46A(3) VIDE THIS OFFICE LETTER DATED 01-08-200 8. THE LEARNED ITA NO. 59/PN/09 A.Y 2005-06 PAGE 3 OF 5 ASSESSING OFFICER HAS SUBMITTED HIS COMMENTS VIDE L ETTER DATED 22-09- 2008 THE OPERATIVE PORTION OF WHICH IS REPRODUCED AS UNDER: IN THIS CASE AS PER INFORMATION RECEIVED FROM THE TRANSACTION REPORTED IN THE ANNUAL INFORMATION RETURN FILED U/S . 285BA OF THE I.T. ACT THE ASSESSEE HAS DEPOSITED CASH OF RS. 2 70 68 400/- IN HIS SAVING ACCOUNT IN NAGAR URBAN CO-OP. BANK LTD. AHMEDNAGAR. ON THE BASIS OF THE INFORMATION RECEIVED A NOTICE U/S. 142(1) WAS I SSUED TO THE ASSESSEE ON 29-08-2007 CALLING FOR RETURN OF INCOME FOR A.Y 2005-06. SHRI RAKESH KAILASH PACHPUTE HAS FILED RETURN OF INCOME ON 19-0 9-2007 DECLARING INCOME AT RS. 36 000/-. NOTICE U/S. 143(2) AND 142( 1) WAS DULY SERVED ON THE ASSESSEE. DURING THE ASSESSMENT PROCEEDING THE ASSESSEE STAT ED THAT HE IS AN AGRICULTURIST AND IS HAVING MAINLY AGRICULTURE INCOME DURING THE YEAR NOMINAL INCOME AS SUPERVISION CHARGES IS RECEIVED T O HIM. HE ALSO STATED THAT SHRI SURESH YADAV DESHMUKH PROP. OF PRAJAKTA F ILLING STATION IS HIS BEST FRIEND. SHRI DESHMUKH REQUESTED HIM TO OPERATE HIS BANK ACCOUNT WITH NAGAR URBAN CO-OP BANK LTD FOR PURCHASE OF DEM AND DRAFT. ACCORDINGLY THE SALE PROCEEDS AMOUNT WAS DEPOSITED IN BANK ACCOUNT AND DEMAND DRAFT WERE ISSUED IN THE NAME OF BHARAT PETR OLEUM CORPORATION LTD. THE ASSESSING OFFICER PASSED ORDER U/S. 143(3) OF T HE INCOME TAX ACT 1961 ON 31-12-2007. IN THE ASSESSMENT ORDER TH E A.O STATED THAT THE CASH BOOK OF PRAJAKTA FILLING STATION DOES NOT SHOW ANY ENTR Y OF PAYMENT MADE TO THE ASSESSEE FOR PURCHASE OF DEMAND DRAFT A ND THERE IS NO LEDGER ACCOUNT IN THE NAME OF THE ASSESSEE. THE AO ALSO ST ATED THAT THE ASSESSEE HAS FILED TO PRODUCE PAY IN SLIP FOR PURCH ASE OF DEMAND DRAFT OR COPIES OF DEMAND DRAFT. IN CIRCUMSTANCES THE AO HAS NOT ACCEPTED THAT THE CLAIM OF THE ASSESSEE THAT THE TRANSACTION RELA TE TO THE OTHER CONCERN. ACCORDINGLY AO HAS WORK OUT PEAK OF THE DEPOSIT OF RS. 5 01 971/- IN THE SAVING BANK ACCOUNT OF ASSESSEE AND TREATED AS UNEX PLAINED INVESTMENT AND BROUGHT TO THE TAX AS INCOME FROM OTHER SOURCES . THE ASSESSEE FILED APPEAL BEFORE CIT(A)-I PUNE AND SUBMITTED ADDITION AL EVIDENCE. IN THIS CONNECTION LETTER ISSUED TO THE ASSESSEE TO ATTEND OFFICE ON 27/08/2008 TO SUBSTANTIATE HIS SAY IN SUPPORT OF AD DITIONAL EVIDENCE PRODUCED BY HIM BEFORE CIT(A)-I PUNE. IN RESPONSE TO THE LETTER THE ASSESSEES REPRESENTATIVE SHRI. R.S. MANE ATTENDED AND SUBMITTED LETTER DATED 19/09/2008. HE STATED THAT THE AOS DID NOT CA LL THE COPIES OF PAY IN SLIP OR COPIES OF DEMAND DRAFT PURCHASED BY SHRI RA KESH PACHPUTE ON BEHALF OF PRAJAKTA FILLING STATION IN FAVOUR OF BHA RAT PETROLEUM CORPORATION LTD. HOWEVER THE AO IN HIS ORDER HAS MADE A MENTION THAT SUCH A INFORMATION WAS CALLED FOR BUT NOT PRODUCED. ON GOI NG THROUGH RECORDS IT APPEARS THAT NO SUCH INFORMATION WAS CALLED FOR. AS STATED ABOVE THE ASSESSEES REPRESENTATIVE ATTEN DED OFFICE AND STATED THAT THE SALE PROCEEDS OF PRAJAKTA FILLING S TATION WERE UTILIZED TO PURCHASE DEMAND DRAFTS. TO SUPPORT HIS CONNECTION H E WAS ASKED TO PRODUCE CASH BOOK OF PRAJAKTA FILLING STATION HOWEV ER HE SHOWED INABILITY SINCE IT IS NOT HIS CONCERN. IN ABSENCE OF SUCH VER IFICATION IT WILL BE DIFFICULT TO CONCLUDE THAT ON A PARTICULAR DAY THE SALE PROCE EDS OF PRAJAKTA FILLING STATION WERE SUFFICIENT FOR PURCHASING DEMAND DRAFT S. UNLESS THIS EXERCISE IS DONE NO FINAL CONCLUSION CAN BE DRAWN. ITA NO. 59/PN/09 A.Y 2005-06 PAGE 4 OF 5 3. DURING THE FIRST APPELLATE PROCEEDINGS THE CIT(A) CALLED FOR A REMAND REPORT FROM THE AO ON THE ABOVE SUBMISSIONS. AFTER CONS IDERING BOTH THE SIDES THE CIT(A) PASSED AN ORDER CONFIRMING THE ADDITION OF RS. 5 01 970/-. AGGRIEVED WITH THE SAME ASSESSEE IS IN APPEAL BEFORE US. 4. DURING THE PROCEEDINGS LD. COUNSEL FOR THE ASSESSEE IDENTIFIED THE REASONS FOR CONFIRMING THE ADDITION IE FAILURE TO PRODU CE THE PROPER AND COMPLETE CASH BOOK OF PRAJAKTA FILING STATION. IN THIS REGARD LD. COUNSEL PRAYED FOR SETTING ASIDE THE ISSUE TO THE FILES OF THE A.O FOR SUBMISSION OF THE CASH BOOK WHICH WAS ADMITTED TO BE SUBMITTED BEFORE US. LD. DR FOR THE REVENUE ARGUED STATING THAT SAME CONSTITUTES AN ADDITIONAL EVIDENC E WHICH CANNOT BE ENTERTAINED AT THIS POINT OF TIME OTHERWISE HE RELIED ON THE ORD ERS OF THE REVENUE. 5. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDER OF RE VENUE. WE HAVE ALSO GONE THROUGH PARA 4 OF THE IMPUGNED ORDER AND HAVE IDENTIFIED THE REASONS FOR CONFIRMING THE ADDITION IN VIEW OF THE IMPORTANCE OF THE SAME PARA 4 READS AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE APPELLANT AND PERUSED MATERIAL ON RECORD. IT IS THE CLAIM OF THE APPELLANT THAT SHRI SURESH YADAV DESHMUKH WAS PROPRIETOR OF PRAJAKTA FI LLING STATION AND HE ALLOWED SHRI DESHMUKH TO OPERATE HIS BANK ACCOUNT O N SALE PROCEEDS DEPOSITING IN HIS BACK ACCOUNT AND USED FOR MAKING DEMAND DRAFT BELONGING TO PRAJAKTA FILLING STATION. HOWEVER NO EVIDENCE IN THIS REGARD WAS SUBMITTED AT THE ASSESSMENT STAGE . EVEN AT APPELLATE STAGE WHEN SOME ADDITIONAL EVIDENCE IN THIS REGARD IS PRODUCED THE APPELLANT HAS FAILED TO PRODUCE THE CASH BOOK OF PRAJAKTA FIL LING STATION TO SUBSTANTIATE HIS CLAIM THAT THE MONEY DEPOSITED IN HIS BANK ACCOUNT BELONGS TO SHRI. SURESH YADAV DESHMUKH. IN VIEW OF THIS ON GIVEN FACTS IT IS HELD THAT THE LEARNED ASSESSING OFFICER IS JUSTIFIED IN DERIVING ADVERSE INFERENCE AND ADDING PEAK CREDIT ON DEPOSIT S IN HIS BANK ACCOUNT AT RS. 5 01 970/-. GROUNDS OF APPEAL NOS. 1 AND 2 ARE THEREFORE DISMISSED. 6. FROM THE ABOVE IT IS EVIDENT THAT THE ASSESSEE P RODUCED SOME ADDITIONAL EVIDENCES BUT NOT THE PROPER AND COMPLETE CASH BOOK TO ACCOUNT FOR TOTAL SALES OF RS 4.18 CRORES TO SUBSTANTIATE THE CLAIMS AND SUBM ISSIONS OF THE ASSESSEE. IN OUR CONSIDERED OPINION AND IN THE INTEREST OF JUSTICE AS WANTED BY THE ASSESSEE WE ARE OF THE OPINION THAT THE ASSESSEE MUST BE GIVE N ONE MORE CHANCE TO COME ITA NO. 59/PN/09 A.Y 2005-06 PAGE 5 OF 5 OUT OF THE DISCREPANCIES IDENTIFIED BY THE REVENUE. THE ASSESSEE IS DIRECTED TO EVIDENCE THAT THE DEPOSITS IN THE IMPUGNED BANK ACC OUNT IN QUESTION HAS THE SOURCE POINT IN THE SALE PROCEEDS OF THE PETROL BUNK O WNED BY THE PRAJAKA FILING STATION AND NOT OWN FUNDS OF THE ASSESSEE. IN OTHER WORDS HE HAS DEMONSTRATE THAT THE IMPUGNED BANK ACCOUNTS IS THE EXTENDED BAN K ACCOUNT OF THE PRAJAKA FILING STATION. ACCORDINGLY THE GROUNDS ARE SET ASI DE FOR DENOVO ADJUDICATION BY THE A.O. ASSESSEE IS FREE TO SUBMIT ANY KIND OF EVI DENCES TO SUBSTANTIATE CLAIMS OF THE ASSESSEE. ACCORDINGLY THE GROUNDS ARE SET ASIDE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 24 TH SEPTEMBER 2010. SD/- SD/- (SHAILENDRAKUMAR YADAV) (D.KARUNAKAR A RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 24 TH SEPTEMBER 2010 R COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ITO (CIB)-2 PUNE 3. CIT(A)-I PUNE 4. CIT-I PUNE 5. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE