Roopa Ram Dudi, Kishangarh vs Department Of Income Tax

Jh vkj-ih-rksykuh] U;kf;d lnL; ,oa Jh Vh-vkj-ehuk] ys[kk lnL; ds le{k BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM

vk;dj vihy la-@ITA Nos. 45 & 46/JP/2013 fu/kZkj.k o"kZ@Assessment Year : 2005-06 & 2009-10

Income Tax Officer, cuke Roopa Ram Dudi, Kishangarh. Vs. 298, Indira Colony, Madanganj, Kishangarh.

LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AIEPD 6185 F vihykFkhZ@Appellant izR;FkhZ@Respondent

jktLo dh vksj ls@ Revenue by : Mrs. Neena Jeph (JCIT) fu/kZkfjrh dh vksj ls@ Assessee by : None (A.D. on record)

lquokbZ dh rkjh[k@ Date of Hearing : 25/03/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 17/04/2015

vkns'k@ ORDER

PER: T.R. MEENA, A.M.

These are the appeals filed by the Revenue against the order

dated 15/10/2012 and 22/10/2012 passed by the learned CIT(A), Ajmer

for A.Y. 2005-06 and 2009-10. The effective grounds of both the

appeals are as under:-

2 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

Ground of revenue's appeal ITA No. 45/JP/2013

"In view of the facts and circumstances of the case the ld. CIT(A) has erred in:-

1) restricting the addition of Rs. 19,70,525/- to Rs.

1,97,052/- made by A.O. on account of unexplained deposits in the saving bank account with IDBI by applying G.P. rate of 10% without considering the totality of facts and circumstances of the case and merely relying upon the earlier judgment of the jurisdictional ITAT;

2) treating the deposits made in the IDBI a/c as the turnover when the bank account is of the nature of Saving Bank Account;

3) treating the deposits made in the IDBI a/c as the turnover without establishing the nexus between the deposits and withdrawals viz a viz business transactions;

4) treating the deposits as turnover when the cash deposit in bank should be explained by assessee, otherwise it is unexplained income under sec. 69 or 69B as upheld by the Apex Court in the case of CIT Vs. K. Chinnathamban (SC) 292 ITR 682;

5) treating the deposits as turnover ignoring the argument of the A.O. given during the appeal proceedings that the assessee failed to produce the evidence of Marble business."

Ground of revenue's appeal ITA No. 46/JP/2013

"In view of the facts and circumstances of the case the ld. CIT(A) has erred in:-

1) restricting the addition of Rs. 38,84,090/- to Rs.

3,88,409/- made by A.O. on account of unexplained deposits in the saving bank account with PNB by 3 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

applying G.P. rate of 10% without considering the totality of facts and circumstances of the case and merely relying upon the earlier judgment of the jurisdictional ITAT;

2) treating the deposits made in the PNB a/c as the turnover when the bank account is of the nature of Saving Bank Account;

3) treating the deposits made in the PNB a/c as the turnover without establishing the nexus between the deposits and withdrawals viz a viz business transactions;

4) treating the deposits as turnover when the cash deposit in bank should be explained by assessee, otherwise it is unexplained income under sec. 69 or 69B as upheld by the Apex Court in the case of CIT Vs. K. Chinnathamban (SC) 292 ITR 682;

5) treating the deposits as turnover ignoring the argument of the A.O. given during the appeal proceedings that the assessee failed to produce the evidence of Marble business."

2. All the grounds of the revenue's appeals for both the assessment

years are revolving around restricting the addition of Rs. 19,70,525/- to

Rs. 1,97,052/- for A.Y. 2005-06 and Rs. 38,84,090/- to Rs. 3,88,409/-

for A.Y. 2009-10 made by the A.O. on account of unexplained deposits

in the savings bank account by applying G.P. rate of 10%. The Ld.

Assessing Officer observed that the assessee is having income from

trading of marble as well as income from other sources. The assessee

had filed its return of income on 20/03/2006 for A.Y. 2005-06 declaring 4 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

total income of Rs. 1,12,050/- and agricultural income of Rs. 45,830/-.

The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (in

short the Act) and order U/s 144 of the Act was completed on

28/12/2007 on total income of Rs. 20,18,525/- by the DCIT- Circle-1,

Ajmer as the compliance to notice U/s 142(1) of the Act was not made

by the assessee and addition of Rs. 19,70,525/- U/s 69A of the Act was

made by adding unexplained deposits made with the IDBI bank. The ld.

CIT(A), Ajmer vide their order No. 54/2008-09 dated 12/02/2009 had

observed that the appellant was an existing assessee with ITO,

Kishangarh and return for A.Y. 2005-06 was also filed by him in the

office of ITO, Kishangarh. Thus, only ITO, Kishangarh had jurisdiction

over the case. The assessment order dated 28/12/2007 passed by the

DCIT- Circle-1, Ajmer U/s 144 of the Act had declared null and void.

The ld. CIT(A), Ajmer has also directed to the ITO, Kishangarh to take

suitable action in respect of cash deposits in IDBI Bank by the assessee.

The assessee was maintaining same bank account with IDBI Bank and

huge cash was deposited and this bank account has not been declared

in the balance sheet for A.Y. 2005-06. It was found that these cash

deposited were her undisclosed source of income. The income to the

extent of Rs. 19,70,525/- has escaped assessment for A.Y. 2005-06.

5 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

Therefore, the Assessing Officer after recording the reasons U/s 147 of

the Act issued notice U/s 148 of the Act on 15/3/2011 but the assessee

had not responded in response to notice U/s 148 of the Act as well as

against 142(1) of the Act issued from time to time. Therefore, the ld

Assessing Officer again decided the case U/s 144 of the Act. The ld

Assessing Officer reproduced the notice issued U/s 142(1) of the Act on

page 2 and assessee asked to explain the source of cash deposited in

the bank account but the assessee had not furnished any reply in

writing with evidence. The ld Assessing Officer by considering the

decision of the Hon'ble Rajasthan High Court in the case of Pawan

Kumar Pareek Vs. ITO, Jodhpur he made addition of Rs. 19,70,525/- as

unexplained cash deposited in the bank account.

2.1 In A.Y. 2009-10 the assessee filed return on 25/03/2010

declaring total income of Rs. 2,38,000/- and agricultural income of Rs.

3,00,000/-. The case was scrutinized U/s 143(3) of the Act, accordingly,

notice issued by the Assessing Officer to assessee for furnishing details

but the assessee was non-cooperative during the whole proceedings,

therefore, ld Assessing Officer decided the case U/s 144 of the Act and

estimated the income. The assessee had deposited cash of Rs.

6 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

33,99,090/- in her savings bank account maintained with PNB,

Kishangarh. The assessee was given reasonable opportunity to explain

the deposits in cash as well as cheques deposited in the same bank

account but no reply was filed. Therefore, after considering the decision

of the Hon'ble Rajasthan High Court in the case of Pawan Kumar Pareek

Vs. ITO, Jodhpur, the whole cash and credit entries were treated

undisclosed income of the assessee. Therefore, he made addition U/s

69A of the Act at Rs. 36,84,090/- and addition U/s 68 of the Act at Rs. 2

lacs.

3. Being aggrieved by the order of the Assessing Officer, the

assessee carried the matter before the ld. CIT(A), who had allowed the

appeals partly by observing that this cash deposited in the bank account

pertained to marble business, therefore, he held that all deposits does

not part of the income. He also relied on various case laws mentioned

on page No. 6 of its order. He confirmed the addition to the extent of

10% of the above deposits i.e. Rs. 1,97,052/- (10% of Rs. 19,70,525/-)

for A.Y. 2005-06 and Rs. 3,88,409/- (10% of Rs. 38,84,090/-) for A.Y.

2009-10 treating the same as profit on trading turnover of business. As

the assessee has already shown the income from marble commission of 7 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

Rs. 1,54,000/- for A.Y. 2009-10, so the set off of above amount is given

and addition of balance amount of Rs. 2,34,409/- is upheld.

Accordingly, the addition to the extent of Rs. 1,97,052/- for A.Y. 2005-

06 and Rs. 2,34,409/- for A.Y. 2009-10 are upheld and balance deleted.

4. Now the Revenue is in appeal before us. The learned D.R.

vehemently supported that the assessee did not appear before the

Assessing Officer and has not filed any evidence to corroborate these

entries with the marble business. It is also not clear from the order of

the CIT(A) that estimated income disclosed by the assessee is including

the income generated through this bank account as this bank account

has not been disclosed. She supported the order of the Assessing

Officer and prayed to reverse the order of the ld. CIT(A). From the side

of the assessee, no one appeared even proper notice has been served

on him from time to time.

5. We have heard the rival contentions of both the parties and

perused the material available on record. It is undisputed fact that total

cash was deposited at Rs. 19,70,525/- in A.Y. 2005-06 and Rs.

38,84,090/- in A.T. 2009-10 in the bank accounts. The nature of bank

account was savings bank account with IDBI as well as with the PNB 8 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

Kishangarh as mentioned by the Assessing Officer in grounds of appeal.

The ld CIT(A) has considered the Coordinate Jodhpur ITAT Bench's

decision but the facts of the case referred by the ld CIT(A) has not been

coming out from the order that whether these cash deposited from

assessee's place of business or outside the place. It is revealed from the

order of the Ld. CIT(A) that the assessee has received this amount from

different stations i.e. Faridabad, Delhi, Trichy, Chindwara etc. It is a fact

that by collecting the evidence from the bank directly by the Assessing

Officer or having evidence with the assessee the nature of transaction

can be determined. The burden lies on the assessee to prove that these

entries are business purposes and this cash was sent by purchasers. It

is also not clear from the order of the ld CIT(A) that what action has

been taken by the Assessing Officer in subsequent year and preceding

year and whether any additions were made in that years also. The ld

CIT(A) has decided the case without calling remand report from the

Assessing Officer, which is against the principles of natural justice.

Therefore, in the interest of justice, we set aside this issue to this

Assessing Officer and the assessee is directed to appear before him and

produce all the evidences to judge the nature of transaction, so that

real income can be assessed.

9 ITA 45 & 46/JP/2013_ ITO Vs. Roopa Ram Dudi

6. In the result, both the revenue's appeals are allowed for

statistical purposes only.

Order pronounced in the open court on 17/04/2015.

Sd/- Sd/- ¼vkj-ih-rksykuh½ ¼Vh-vkj-ehuk½ (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 17th April, 2015

*Ranjan

vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- ITO, Kishangarh.

2. izR;FkhZ@ The Respondent- Roopa Ram Dudi, Kishangarh.

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr¼vihy½@The CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 45 & 46/JP/2013)

vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar