Income Tax Appellate Tribunal - AhmedabadPiyushkumar Shankarbhai Chaudhary, ... vs Assessee on 25 February, 2014IN THE INCOME TAX APPELLATE TRIBUNAL
                    "D" BENCH, AHMEDABAD

 BEFORE SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER AND
         SHRI T.R. MEENA, ACCOUNTANT MEMBER

                        ITA No.2942/Ahd/2010
                            A.Y. 2005-06

     ITO, Ward-2 Mehsana               Vs Piyush Kumar
                                          Shankarbhai
                                          Chaudhary,
                                          C/o New Savinay
                                          Transport Co., Highway,
                                          Mehsana.
                                          PAN: AEOPC 2574B
              (Appellant)                      (Respondent)

                            CO No.334/Ahd/2010
                               A.Y. 2005-06

     Piyush Kumar                      Vs ITO, Ward-2 Mehsana
     Shankarbhai Chaudhary,
     C/o New Savinay
     Transport Co., Highway,
     Mehsana.
     PAN: AEOPC 2574B
              (Appellant)                      (Respondent)

               Revenue by        :   Shri K.C. Mathews,
                                     Sr.D.R.,
              Assessee(s) by :       Shri Anil Kshatriya

         सुनवाई कᳱ तारीख/ Date of Hearing     : 25/02/2014
         घोषणा कᳱ तारीख /Date of Pronouncement: 26/02/2014

                             आदेश/O R D E R

PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBERThis is an appeal filed by the Revenue and the Cross Objection has
been filed by the assessee emanating from the order of the ld.
CIT(Appeals), Gandhinagar, dated 26/08/2010 for A.Y. 2005-06. The
grounds raised by the Revenue are reproduced below:ITA No.2942/Ahd/2010 & CO No.334/Ahd/2010ITO, Ward-2 Mehsana Vs. Piyush Kumar Shankarbhai.For A.Y. 2005-06-2-"1. The learned CIT(Appeals) has erred in law and on facts in deleting the
      addition of Rs.15,72,000/- made on account of unexplained deposits.2. On the facts and circumstances of the case the learned CIT(A) ought to
      have upheld the order of the Assessing Officer."2.    An assessment order was made u/s.143(3) r.w.s 147 of theIT Act,
dated 22.12.2009, wherein the AO received an information from CIB
Wings, in respect of UTI Bank, stated to be a joint account with the
brother of the assessee, namely, Kamlesh Kumar Chaudhary, having
deposit to the tune of Rs.15,72,000/-. The AO had mentioned that at that
time the assessment of Sri Kamlesh Kumar Chaudhary was pending and
a show cause was issued to the assessee as to why the said amount be not
taxed on protective basis. The AO has also noted as under:"The above contention of the assessee is considered however, not found to be
      acceptable keeping in view the facts and circumstances of the case. At the
      outset, the assessee has not given any explanation regarding the deposits and
      also not furnished any corroborative evidences which can explain these
      deposits. Further, the argument of the assessee regarding the transaction
      carried out by his brother Shri Kamlesh Chaudhary is quite acceptable at this
      stage, however, it is also significant at this point of time that Shri Kamlesh
      Chaudhary is assessed with ITO, Ward-1, Mehsana and the assessment of his
      income for the relevant period is yet to be done. In view of this fact, it is
      essential to add these deposits in the case of assessee on protective basis.
      Accordingly, an amount of Rs.15,72,000/- is hereby added to the total income
      of the assessee on protective basis treating the same as un-explained. Penalty
      proceedingsu/s. 271(1)(c)of IT Act are initiated for furnishing inaccurate
      particulars of income which leads to concealment of his income."2.1   Thereupon an addition of Rs.15,72,000/- was made in the hands of
the assessee which was challenged before learned CIT(A).3.    While deleting the addition, learned CIT(A) had given certain
findings such as that the said bank account was owned by the elder
brother of the assessee. He has also mentioned that the transaction of the
said bank had duly been reflected in the return of income by theITA No.2942/Ahd/2010 & CO No.334/Ahd/2010ITO, Ward-2 Mehsana Vs. Piyush Kumar Shankarbhai.For A.Y. 2005-06-3-assessee's brother. On that basis, the impugned protective assessment
was quashed in the following manner:"I have considered the submission made by the appellant as well as the
      assessment order. It is seen that appellant had opened a joint account with his
      elder brother Shri Kamlesh Chaudhary in UTI Bank. The said account was
      already reflected in the return of income Kamlesh Chaudhary filed on
      29/12/2006 i.e. well before the first noticeu/s. 142(1)issued by the A.O. on
      13/11/2007 to the assessee. The appellant had specifically intimated to the
      A.O. that his elder brother Shri Kamlesh Chaudhrary is assessed with ITO,
      Wd.-1, Mehsana. Shri Kamlesh Chaudhary also filed confirmation to the
      effect that bank transactions in the said bank account with UTl Bank are
      already reflected in his return of income and he owned all the transactions
      and he had only operated this account. The closing balance as on 31/3/2005
      in the bank account is duly reflected in current assets in the balance sheet of
      Shri Kamlesh Chaudhary. Moreover, Shri Kamlesh Chaudhary was the first
      account holder of the said account. In above circumstances, it is very clear
      that assessee's elder brother Shri-Kamlesh Chaudhary has owned the bank
      account and has confirmed the same which has not been doubted by the A.O.
      The A.O.'s only reason for making addition is that assessment in the case of
      Shri Kamlesh Chaudhary is pending and so he is making the addition on
      protective basis. The said reasoning is not as per law because protective
      assessment is made only when there is reason to believe that the income under
      dispute may be belonging either of two persons, then only addition is made on
      protective basis in one of the case. In this particular case, assessee's elder
      brother has owned the account and stated that he has operated this account.
      This fact is not disputed by both of account holders. Moreover, Shri Kamlesh
      Chaudhary had filed the return of income well before the first notice was
      issued to the assessee on 13/11/2007 based on the AIR information about the
      said bank account. The said transactions has been claimed to have been
      reflected in the return of Shri Kamlesh Chaudhary. In above circumstances,
      there is no reason to make protective assessment in the case of assessee as
      due explanation was given by him to the A.O. about the actual facts of the
      case which was supported by evidences. Accordingly, the addition of
      Rs.15,72,000/- made in the assessee's case is deleted. However, the AO is at
      liberty to act as per law in the case of assessee's brother Shri Kamlesh
      Chaudhary's case who has owned the account."4.    With this brief background, we have heard both the sides. From
the side of the Revenue, learned Sr.D.R. Mr. K.C. Mathews has
supported the order of the AO, on the other hand from the side of the
appellant, learned AR, Mr. Anil Kshatriya has supported the order of
learned CIT(A). Learned AR has informed that on 19th of January, 2010 aITA No.2942/Ahd/2010 & CO No.334/Ahd/2010ITO, Ward-2 Mehsana Vs. Piyush Kumar Shankarbhai.For A.Y. 2005-06-4-notice was issued by ITO Ward-1, Mehsana to the elder brother of the
assessee, viz., Kamlesh Kumar Chaudhary along with reasons recorded
as well as a noticeu/s. 148of IT Act in respect of transaction of
Rs.15,72,000/- appeared in UTI Bank Ltd. also dated 19th of January,
2010. Thereafter, an assessment was madeu/s.143(3)r.w.s. 147 ofIT
Act, dated 12.11.2010 according to which the returned income of Sri
Kamlesh Kumar Chaudhary was accepted. Learned AR has, therefore,
pleaded that although the reasoning for reopening was very much in the
notice of the Income Tax Officer but after considering the explanation
and the return of income filed by the brother, the concerned ITO had
chosen to accept the returned income. Learned AR has then concluded
that once there was no substantive addition of impugned amount then
there ought not to be any question of protective assessment in the hands
of the assessee.4.1   Considering the totality of the facts and circumstances of the case
and the explanation offered before us, we are of the considered opinion
that the Revenue Department has examined the evidences in respect of
Sri Kamlesh Kumar Chaudhary and thereupon found them correct;
hence, made no addition in respect of impugned amount. Due to the said
reason, while deciding the appeal of the assessee, learned CIT(A) has
also noted all of those evidences and held that the said transaction being
reflected in the return of Sri Kamlesh Kumar Chaudhary and that return
was accepted by the Revenue Department; hence, the assessment of the
impugned amount protectively in the hands of the assessee did not
survive. We hereby confirm the findings of the First Appellate Authority
and dismiss this ground of the Revenue.ITA No.2942/Ahd/2010 & CO No.334/Ahd/2010ITO, Ward-2 Mehsana Vs. Piyush Kumar Shankarbhai.For A.Y. 2005-06-5-5.      As far as the CO of the assessee is concerned, the ground raised is
as under:"The ld. CIT(A) has failed to appreciate submission dated 18.08.2010 filed
        before him during the course of appellate proceedings whereby, in the
        opening paragraph 3 under the head "Regarding Order being Bad in law and
        without valid jurisdictions", elaborate submissions were made and the same
        has not been adjudicated as stated in ground No.1 above."6.      Learned AR, Mr. Anil Kshatriya has made a statement at bar that
the legal issue raised by the assessee as a Cross Objector does not survive
any more and no prejudice shall be caused, if the same is not pressed.7.      In view of above submission of the learned AR, the Cross
Objection of the assessee is hereby dismissed as not pressed.8.      In the result, the Revenue's Appeal & Assessee's Cross Objection
are hereby dismissed.Sd/-                                                 Sd/-
         (T.R. MEENA)                                     (MUKUL Kr. SHRAWAT)
     ACCOUNTANT MEMBER                                      JUDICIAL MEMBER
Ahmedabad; Dated 26/02/2014
Prabhat Kr. Kesarwani, Sr. P.S.
आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded            to :
1.    अपीलाथᱮ / The Appellant
2.    ᮧ᭜यथᱮ / The Respondent.
3.    संबंिधत आयकर आयुᲦ / Concerned CIT
4.    आयकर आयुᲦ(अपील) / The CIT(A)-III, Ahmedabad5.    िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद   / DR, ITAT, Ahmedabad6.    गाडᭅ फाईल / Guard file.आदेशानुसार/ BY ORDER,



                                                        उप/सहायक पंजीकार (Dy./Asstt.Registrar)
                                                आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad