Ashok Kumar Banthia Vs DCIT (ITAT Jodhpur)
It is also an admitted fact that the affidavit filed by Shri Ashok Todi, which is at page No. 13 of the paper book who was director of M/s Lux Industries Ltd. had categorically admitted that on 19/04/2011, the assessee was carrying amount of Rs. 25.00 lacs in cash on behalf of the company from Delhi office to its head office at Kolkata. The said statement of Shri Ashok Todi, director of M/s Lux Industries Ltd. was never cross examined by the A.O.. Apart from this, the A.O. also did not collect any other material to show that the contents contained in the affidavit was not correct. The A.O., merely rejected the affidavit of Shri Ashok Todi who was director of M/s Lux Industries Ltd. without any plausible reason. The A.O. was not justified in rejecting the affidavit and other material in such a manner. Whereas the affidavit of Shri Ashok Todi was supported by the statement of Ashok Todi himself, the assessee, Shri Bhaskar Poddar and also supported by extract of cash book with certificate of C.A. which at page Nos. 67-73 of the paper book, calculation of VAT from the month of April, 2011 which is at page No. 65 of the paper book, extract of sales register for the month of April, 2011 which is at pages No. 56-61 of the paper book, challan of VAT, proof of payment of VAT which is at page No. 62 of the paper book and air tickets provided by Kolkata office which are at page Nos. 63 and 64 of the paper book. These entire bunch of documents go to prove that this cash was belonging to the company namely M/s Lux Industries Ltd. and the company had shown the said amount before the Sales Tax authorities and the Sales tax authorities had also accepted the sales belonging to M/s Lux Industries Ltd.. At this stage, we would like to draw support from the decision in the case of CIT Vs Anand Metal Corporation 273 ITR 262 (Mad) wherein it was categorically held that if the Sales tax authorities accept the sale belonging to a party then in that eventuality, the said findings of the Sales tax authorities are binding on the income tax authorities and the A.O., thus, in this way, the income tax authorities has not power to scrutinize the said documents again in respect of sales which have already accepted by the Sales tax authorities. As from the very beginning, it has been specifically stated by the assessee that M/s Lux Industries Ltd. had already shown this amount of sales at Rs. 25.00 lacs in their sales tax returns. Moreover, Shri Ashok Todi, director of M/s Lux Industries Ltd. has categorically mentioned that Mr.Bhaskar Poddar who has also got his statement recorded is a very junior staff and mainly looking after loading and unloading and some times preparation of invoices. It was submitted that sales are sometime recorded in draft sheets and the invoices are prepared at a later date against which VAT has also been paid and in this regard challan of payment of VAT has also been placed on record, which is at page No. 62 of the paper book which shows that the amount so carried by the assessee on behalf of the company was on account of sales collection regarding which required extracts of sales register for the period of April, 2011 has already been placed on record at page Nos. 56-61 of the paper book wherein the said amount has been shown received from the sales on account of Kolkata Knight Riders T-shirts and on that required VAT has also been paid. Thus, in this way, the assessee has successfully discharged the burden by disclosing source of cash amount by filing respective evidences which are available on the record in the paper book.
Even otherwise, the tax authorities are also required to tax the real owner and not the representative thereof and in this case, the real owner of the cash amount seized from the assessee belongs to M/s Lux Industries Ltd. and not to the assessee.
Although, the assessee had also filed an affidavit in support of his contention but he was never cross examined by the A.O. Therefore, the averments contained in duly sworn affidavit are to be accepted as a correct unless the same are rebutted by the evidence.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal has been filed by the assessee against the order passed by the ld. CIT(A)-IV, Jaipur dated 07/09/2019 for the A.Y. 2012-13 wherein following grounds have been taken by the assessee:
“1. That the order passed by the Assessing Authority and sustained by the Commissioner of Income Tax (Appeals) is illegal and against the law.
2. That the order is illegal in view of the fact that the Commissioner of Income Tax (Appeals) as well as the Assessing Authority fails to cross examine the deponent of the affidavits submitted before the Assessing Officer. In view of judgment of Hon’ble supreme Court delivered in the case of M/s Mehta Parekha & Co., the contents of the affidavit should have been accepted.
3. That the assessment completed in the hands of the assessee is not justified because the amount belongs to M/s Lux Industries Limited as admitted by the Director of the company. Therefore, the assessment is illegal.
4. That the statement of Mr. Bhaskar Poddar which was the basis of sustaining the addition, was no statement in the eye of law in view of the judgment of Hon’ble Rajasthan High Court.
5. That the order passed by the Commissioner of Income Tax (Appeals) is against judicial decorum and judicial discipline because the judgment having the character of binding nature and not followed by the Commissioner of Income Tax (Appeals).
6. That the charging of interest is illegal and against the law.”
2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic.
3. The brief facts of the case are that the assessee is an individual and derived income from commission received as agent of M/s Lux Industries Ltd., Kolkata which was shown under the head business income, besides petty interest received from banks. The assessee filed his return of income on 13/09/2012 declaring total income of Rs. 2,20,007/-. Subsequently, a search and seizure operation U/s 132 of the Income Tax Act, 1961 (in short the Act) was carried out on 19/04/2011 at New Delhi Airport, during search, an amount of Rs. 25.00 lacs were found and seized from the assessee. On being asked, the assessee filed a reply dated 04/10/2013 and stated that the cash amount of Rs. 25.00 lacs seized from the assessee does not belong to the assessee but belongs to the company M/s Lux Industries Limited, Kolkata which is an existing assessee, assessed to tax by DCIT, Circle-9, Kolkata and further that the assessee is connected with the said company and posted at Delhi as commission agent, therefore, the amount was carried for and on behalf of the company and he has nothing to do with the amount so seized from him. Thereafter the A.O. completed the assessment U/s 143(3) r.w.s. 153B(1)(b)/144A/154 of the Act determining the total income of the assessee at Rs. 27,20,010/-.
4. Being aggrieved by the order of the A.O., the assessee carried the matter before the ld. CIT(A), who after considering the submissions of parties and material placed on record, upheld the action taken by the A.O.. Against the said order of ld. CIT(A), the assessee has preferred the present appeal before the ITAT on the grounds mentioned above.
5. All the grounds of appeal are interrelated and interconnected but by way of this appeal, the assessee is basically aggrieved by the order of the ld. CIT(A) in confirming the action of the A.O. and submitted that the amount seized from the assessee does not belong to him but belonged to M/s Lux Industries Ltd.. In this regard, the ld AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the written submissions filed before the Bench and the same is reproduced below:
“That the assessee successfully discharges the burden by finding respective evidence is available on record in the paper book. The assessee submitted his affidavit stating that amount belongs to the Lux Industries Limited; also submitted affidavit of Director of Lux Industries Limited which too was also confirm in their response of summon. All this fact established that amount belong to Lux Industries Limited and with the Directory is also accepting that the amount belongs to company and not Ashok Banthia.
Furthermore in response to the query of Commissioner of Income Tax (Appeals) dated 25.05.2017 and 18.08.2017 also submitted the following paper book page 51 to 73
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