ITO 25(3)(2), MUMBAI V. DHIMANT A. SANGHAVI, MUMBAI

CO 123/MUM/2014

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0078 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 16-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI D MANMOHAN, VICE-PRESIDENT, & SHRI B R BASKARAN, AM ./ ITA NO.3483/MUM/2013 / ASSESSMENT YEAR 2009-10 SHRI DHIMANT ASHWIN SANGHAVI, 606/C, CHINTAMANI , SVP ROAD, OFF SHANKAR LANE, KANDIVALI (W) MUMBAI- 400 067 PAN AAFPS7194C VS. ITO 25(3)(2) MUMBAI (APPELLANT) (RESPONDENT) ./ C.O. NO. 123/MUM/2014 (ARISING OUT OF ITA NO.3483/MUM/2013 FOR AY 2009-10 ) ITO 25(3)(2) MUMBAI SHRI DHIMANT ASHWIN SANGHAVI MUMBAI- 400 067 (CROSS-OBJECTOR) (RESPONDENT) APPELLANT BY : MS. AARTI SATHE & SHRI KALPESH TURAL KAR CROSS-OBJECTOR BY: SHRI LOVE KUMAR !' / DATE OF HEARING :10.10.2014. #$ !' / DATE OF PRONOUNCEMENT : 10.10.2014 O R D E R PER B R BASKARAN , AM: THE APPEAL FILED BY THE ASSESSEE AND THE CROSS OBJE CTION FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER DATED 22-02-2013 PAS SED BY LD CIT(A)-35, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEAR 2009-10. IT NO.3483/MUM/2013 & CO 123/MUM/14 SHRI DHIMANT A SANGHAVI 2 2. THE CROSS OBJECTION FILED BY THE REVENUE IS BARR ED BY LIMITATION BY 352 DAYS. HOWEVER, THE REVENUE HAS NOT FILED ANY PETITION EXP LAINING THE REASONS FOR THE DELAY. THOUGH THE REGISTRY HAS SENT A DEFECT MEMO IN THIS REGARD, YET THE SAME HAS NOT BEEN RECTIFIED SO FAR. UNDER THESE CIRCUMSTANC ES, WE HAVE NO OTHER OPTION BUT TO DISMISS THE CROSS OBJECTION IN LIMINE, AS UNADMI TTED. 3. IN THE APPEAL FILED BY THE ASSESSEE, SIX GRO UNDS HAVE BEEN TAKEN. HOWEVER ALL OF THEM ARE DIRECTED AGAINST A SINGLE ISSUE, I.E., WITH REGARD TO THE VALIDITY OF ADDITIONS MADE U/S 68 OF THE ACT. 4. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN ENGINEERING TOOLS, HARDW ARES ETC. HE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 30-3-201 0 DECLARING A TOTAL INCOME OF RS.63,660/-. THE ASSESSING OFFICER NOTICED FROM AI R INFORMATION THAT THE ASSESSEE HAS DEPOSITED CASH AGGREGATING TO RS.2.64 CRORES IN PUNJAB NATIONAL BANK AND RS.1.16 CRORES IN GREATER BOMBAY CO-OP BANK LTD. L ATER IT WAS NOTICED THAT THE AGGREGATE AMOUNT OF DEPOSIT MADE IN THE CO-OP BANK LTD WAS RS.1.31 CRORES. WHEN QUESTIONED ABOUT THE SOURCES FOR THE ABOVE SAID DEP OSITS, THE ASSESSEE SUBMITTED HE HAS UNDERTAKEN A BUSINESS ACTIVITY, VIZ., HE WIL L RECEIVE CASH FROM PARTIES, DEPOSIT THE SAME IN HIS BANK ACCOUNT AND THEN ISSUE CHEQUES TO THEM FOR THE SAME AMOUNT. FOR THESE SERVICES, HE HAS COLLECTED COMMISSION @ 0 .30% TO 0.50%. THE ASSESSEE ALSO SUBMITTED THE NAMES AND ADDRESSES OF CERTAIN P ARTIES. THE AO NOTICED THAT THE BANK ACCOUNT MAINTAINED WITH PUNJAB NATIONAL BANK S TOOD IN THE JOINT NAMES OF THE ASSESSEE AND ANOTHER PERSON NAMED MR. PRANAVBHAI BI PINBHAI SHAH. THE BANK ACCOUNT MAINTAINED WITH GREATER MUMBAI CO-OP BANK S TOOD IN THE NAME OF ASSESSEES WIFE NAMED MRS. HETAL DIMANT SANGHAVI. HOWEVER, THE ASSESSEE TOOK THE RESPONSIBILITY FOR THE OPERATIONS CARRIED OUT I N BOTH THE BANKS. THE AO TOOK THE VIEW THAT THE ASSESSEE HAS HELPED THE VARIOUS PARTI ES TO CONVERT THEIR BLACK MONEY INTO WHITE. THE AO ALSO TOOK THE VIEW THAT THE SAI D PARTIES COULD NOT BE VERIFIED AT THAT STAGE. ACCORDINGLY, HE TREATED THE ENTIRE AMO UNT OF RS.3.95 CRORES, I.E., THE AGGREGATE AMOUNT OF DEPOSITS MADE IN BOTH THE BANK ACCOUNTS REFERRED ABOVE, AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND ASSES SED THE SAME ACCORDINGLY. IT NO.3483/MUM/2013 & CO 123/MUM/14 SHRI DHIMANT A SANGHAVI 3 5. THE AO ALSO NOTICED THAT THE ASSESSEE HAS M AINTAINED ANOTHER ACCOUNT WITH KARNATAKA BANK, WHEREIN THE AGGREGATE DEPOSITS MADE WAS FOUND TO BE RS.12.91 LAKHS AND THE AGGREGATE WITHDRAWALS MADE WAS RS.9,4 0,000/-. THE AO TREATED THE DIFFERENCE BETWEEN THE DEPOSITS AND WITHDRAWALS, VI Z., RS.3,51,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND ASSESSED THE SAME ACCORDINGLY. 6. IN THE APPELLATE PROCEEDINGS BEFORE LD CIT(A), THE ASSESSEE FURNISHED THE NAMES AND ADDRESSES OF THE PARTIES FROM WHOM, HE HA S CLAIMED TO HAVE RECEIVED FUNDS. HENCE, THE LD CIT(A) CALLED FOR A REMAND RE PORT FROM THE ASSESSING OFFICER. THOUGH THE ASSESSING OFFICER SENT A REMAND REPORT, IT WAS NOT COMPLETE AND IN THE MEAN TIME HE WAS TRANSFERRED. HENCE ANOTHER REMAND REPORT WAS SUBMITTED BY HIS SUCCESSOR, WHEREIN HE STATED THAT THE CONDITIONS PR ESCRIBED U/S 68 WAS NOT SATISFIED BY THE ASSESSEE. AFTER CONFRONTING THE REMAND REPO RT, THE LD CIT(A) CONFIRMED BOTH THE ADDITIONS MADE U/S 68 OF THE ACT. AGGRIEV ED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS PERTAINING TO THE PARTIES FROM WHOM THE FUNDS WERE RECEIVED. SHE FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO MADE ONE TO ON E RECONCILIATION LINKING THE DEPOSITS WITH THE CHEQUES ISSUED. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE COULD NOT PRODUCE THE CONCERNED PARTIES BE FORE THE ASSESSING OFFICER. IN THE REJOINDER, THE LD A.R SUBMITTED THAT THE ASSESS EE SHALL BE IN A POSITION TO PRODUCE ALL THE PARTIES, IF ONE MORE OPPORTUNITY IS GIVEN. IN SUPPORT OF THE SAME, THE LD A.R FURNISHED A LETTER DATED 09-10-2014 WRIT TEN BY THE ASSESSEE. IN THE SAID LETTER, THE ASSESSEE HAS UNDERTAKEN TO FULLY CO-OPE RATE WITH THE TAX AUTHORITIES AND ALSO AGREED TO PRODUCE ALL THE RELEVANT PARTIES WHO HAVE GIVEN CASH TO THE ASSESSEE AND TO WHOM CHEQUES WERE ISSUED. FURTHER THE ASSES SEE HAS ALSO AGREED TO FURNISH ALL OTHER DETAILS. UNDER THESE SET OF FACTS, WE AR E OF THE VIEW THAT, IN THE INTEREST OF NATURAL JUSTICE, THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO PROVE THE CASH DEPOSITS MADE INTO THE BANK ACCOUNTS. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THESE TWO ISSUES AND RESTORE THEM TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THEM AFRESH AFTER AFFORDIN G NECESSARY OPPORTUNITY OF BEING IT NO.3483/MUM/2013 & CO 123/MUM/14 SHRI DHIMANT A SANGHAVI 4 HEARD TO THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. HOWEVER, WE PREFER TO SET TIME FRAME FOR COMPLETION OF THE ASSESSMENT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO COM PLETE THE ASSESSMENT WITHIN THREE MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. THE ASSESSEE IS ALSO DIRECTED TO FULLY CO-OPERATE WITH THE ASSESSING OFFICER IN COMPLETING THE ASSESSMENT BY FURNISHING ALL THE DETAILS THAT MAY BE CALLED FOR AND BY PRODUCING THE PARTIES AS MAY BE REQUIRED BY THE ASSESSING OFFICER. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF OCTOBER, 2014. SD/- SD/- (D MANMOHAN) (B R BASKARA N) %& %& %& %& /VICE PRESIDENT ' ' ' ' '( '( '( '( /ACCOUNTANT MEMBER MUMBAI , DATED : 10 TH OCTOBER, 2014. SA COPY OF THE ORDER FORWARDED TO : 1. )* /THE APPELLANT. 2. )* / THE CROSS-OBJECTOR. 3. + ( ) / THE CIT(A), MUMBAI. 4. + / CIT 5. ,-. ! , , / DR, D BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// / / 0 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI