URMILA KRISHNA JAISWAL, THANE V. ITO WD 3, THANE

CO 81/MUM/2015

• Counselvise Citation: [2016] 119 COUNSELVISE.COM (IT) 3281 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: H M WAMARE
• Keywords: Unexplained cash credit; Cost of acquisition; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' F ' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 1060 /MUM/201 4 (ASSESSMENT YEAR: 2008 - 09 ) INCOME TAX OFFICER, WARD - 3 VS. SMT. URMILA K. JAISWAL PALGHAR VIDYUT NAGAR, MASOLI TALUKA - DAHANU, THANE PAN - AFXPJ6515K APPELLANT RESPONDENT CO NO. 81 /MUM/201 5 (ASSESSMENT YEAR: 2008 - 09 ) SMT. URMILA K. JAISWAL VS. INCOME TAX OFFICER, WARD - 3 VIDYUT NAGAR, MASOLI TALUKA - DAHANU, THANE PALGHAR PAN - AFXPJ6515K APPELLANT RESPONDENT ASSESSEE BY: SHRI H.M. WAMARE REVENUE BY: NONE DATE OF HEARING: 06 .04 .2016 DATE OF PRONOUNCEMENT: 06 .0 4 .2016 O R D E R PER JASON P. BOAZ, A.M . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - II , THANE DATED10.12.2013 FOR A.Y. 200 8 - 09 IN RESPECT OF THE ORDER OF ASSESSMENT PASSED UNDER SECTION 143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') WHEREIN THE ASSESSEE WAS ALLOWED PARTIAL R ELIEF. THE ASSESSEE HAS ALSO PREFERRED A CROSS OBJECTION AGAINST THE IMPUGNED ORDER OF THE CIT(A). BEING HEARD TOGETHER THE AFORESAID MATTERS ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER HEREUNDER: - REVENUES APPEAL IN ITA NO. 1060/MUM/2014 FOR A.Y. 2008 - 09 2 . THE GROUNDS RAISED IN REVENUES APPEAL ARE AS UNDER: - ITA 1060/MUM/2014 & CO 81/MUM/2014 SMT. URMILA K. JAISWAL 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE RELIEF OF RS.2,02,053/ - GIVEN BY THE HON'BLE CIT(A) ON ACCOUNT OF RECEIPT FROM DEBTORS IS ERRONEOUS BASED ONLY ON THE OPENING AND CLOSING BALANCE OF DEBTORS AND WITHOUT ANY VERIFICATION/ CONFIRMATION DESPITE CONTRADICTORY SUBMISSIONS ON THE ISSUE, BY THE ASSESSEE DURING ASSESSMENT AND APPELLATE PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) - II, THANE ERRED IN NOT APPRECIATING THE DIRECTION OF THE HON'BLE ITAT VIDE ITS ORDER DATED 18/01/2013 AND TREATING ONLY THE NET PROFIT OF RS.3,50,520/ - AS SUPPRESSED INCOME. THE ENTIRE UNRECORDED SALES OF RS.16,20,520/ - IS UNEXPLAINED IN COME OF THE ASSESSEE, THE SAME NOT BEING CORRELATED TO THE PURCHASES DECLARED IN THE BOOKS. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) - II, THANE, BE CANCELLED AND THAT OF THE A.O. BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 3 . AT THE OUTSET, IT WAS NOTICED THAT THE TWO ISSUES IN DISPUTE ARE ONLY IN RESPECT OF ` 14,72,053/ - (I.E. ` 12,70,000 + 2,02,053/ - ) THE TAX EFFECT OF WHICH IS MUCH BELOW THE MONETARY LIMIT OF ` 10 LAKHS. AS PER THE CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015, NEW MONETARY LIMITS HAVE BEEN LAID DOWN FOR FILING OF APPEALS BY THE DEPARTMENT, WHEREBY THE TAX EFFECT FOR FILING OF APPEAL BEFORE THE ITAT HAS BEEN PRESCRIBED AT ` 10 LAKHS. IN THE SAID CBDT CIRCULAR IT HAS BEEN SPECIFICAL LY CLARIFIED THAT THE SAID INST RUCTIONS WILL APPLY RETROSPECTIVELY TO ALL PENDING APPEALS. ACCORDINGLY, THIS APPEAL FILED BY REVENUE IS NOT MAINTAINABLE AND IS DISMISSED IN LIMINE . 4 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON 6 TH APRIL, 2016. ASSESSEES CO NO. 81/MUM/2015 FOR A.Y. 2008 - 09 5 . THE GROUNDS RAISED BY THE ASSESSEE IN THIS CROSS OBJECTION ARE AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) [CIT(A)] ERRED IN NOT ACCEPTING THE FACT THAT THE DEPOSIT OF RS.7,72,020 IN THE ASSESSEES BANK ACCOUNT WAS RECEIVED FROM SHRI KRISHNA JAISWAL AS REIMBURSEMENT OF PAYMENT MADE BY THE ASSESSEE ON HIS BEHALF TO M/S. AVA TRADERS, DESPITE THE CONFIRMATION AND OTHER DOCUMENTARY EVIDENCE SUBMITTED, AND THEREBY ITA 1060/MUM/2014 & CO 81/MUM/2014 SMT. URMILA K. JAISWAL 3 THE CIT(A) ERRED IN TREATING THE ENTIRE AMOUNT OF RS.12,70,000 PAID TO M/S. AVA TRADERS AS ASSESSEES PURCHASES AND ACCORDINGLY ERRED IN ADDING A PROFIT OF RS.3,50,520 ON THIS ACCOUNT TO THE ASSESSEES INCOME. THE ASSESSEE PRAYS THAT THE ABOVE ADDITION OF RS.3,50,520 TO THE ASSESSEES INCOME BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ADDING TO THE ASSESS EES INCOME RS.2,64,836 AS UNEXPLAINED CASH CREDIT. THE ASSESSEE PRAYS THAT THE ABOVE ADDITION OF RS.2,64,836 BE DELETED. 6 . AS MANY AS SIX OPPORTUNITIES OF HEARING WERE AFFORDED TO THE ASSESSEE, HOWEVER, NONE WAS PRESENT FOR THE ASSESSEE AT ANY OF THESE HE ARINGS. WHENEVER THE BENCH DID NOT FUNCTION, THE CASE WAS ADJOURNED AND THE DATE WAS INTIMATED THROUGH DISPLAY ON THE NOTICE BOARD. EVEN TODAY WHEN THE CASE WAS CALLED FOR HEARING, NONE WAS PRESENT FOR THE ASSESSEE, BUT THE LEARNED D.R. WAS PRESENT AND REA DY FOR REVENUE. IN THE CIRCUMSTANCES AS MENTIONED ABOVE, WE HAVE COME TO THE CONSIDERED OPINION THAT THE ASSESSEE IS NOT SERIOUS IN PURSUING THE CO FILED BY HER. IN THIS VIEW OF THE MATTER, WE PROCEED TO DISPOSE OFF THE CO WITH THE ASSISTANCE OF THE LEARNE D D.R. FOR REVENUE AND THE MATERIAL ON RECORD. 7.1 GROUND NO. 1 : IN THIS GROUND, THE ASSESSEE CONTENDS THAT THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE ASSESSEES EXPLANATION THAT THE DEPOSIT OF ` 7,72,020/ - IN THE ASSESSEES BANK ACCOUNT WAS RECEIVED FROM SHRI KRISHNA JAISWAL AS REIMBURSEMENT OF PAYMENT MADE BY THE ASSESSEE ON HIS BEHALF TO M/S. AVA TRADERS DESPITE CONFIRMATION, ETC. FILED AND THEREBY ERRED IN TREATING THE ENTIRE AMOUNT OF ` 12,70,0 00/ - PAID TO AVA TRADERS AS THE ASSESSEES PURCHASES AND IN TREATING THE PROFIT THEREON OF ` 3,50,520/ - AS THE ASSESSEES INCOME. IT WAS PRAYED THAT THE ABOVE ADDITION OF ` 3,50,520/ - BE DELETED FROM THE ASSESSEES INCOME. 7.2 GROUND NO. 2 : IN THIS GROUND, T HE ASSESSEE CONTENDS THAT THE LEARNED CIT(A) ERRED IN ADDING AN AMOUNT OF ` 2,64,836/ - TO THE ASSESSEES INCOME AS UNEXPLAINED CASH CREDIT. 8 . THE LEARNED CIT(A), AFTER CONSIDERING THE ASSESSEES SUBMISSIONS IN THE MATTER HELD AS UNDER AT PARAS 4 TO 4.3 OF THE IMPUGNED ORDER: - ITA 1060/MUM/2014 & CO 81/MUM/2014 SMT. URMILA K. JAISWAL 4 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD, SUBMISSION OF ID. A.R. AND ALSO THE ORDER OF ITAT, MUMBAI. I FIND THAT THERE WERE SUNDRY DEBTORS TO THE TUNE OF RS. 6,20,550/ - AS ON 31/03/2007 WHICH CLAIMED TO HAVE BEEN RECEIVED BY THE APPELLANT. IT IS ALSO NOTICED THAT THERE WERE SUNDRY DEBTORS TO THE TUNE OF RS. 4,18,497/ - AS ON 31/03/2008. THUS, THERE WAS A REDUCTION IN THE SUNDRY DEBTORS ONLY TO THE TUNE OF RS.2,02,053/ - . THEREFORE, NET GAIN IN THE RECEIPTS OF MONEY OUT OF DEBTOR S COULD NOT HAVE BEE N MORE THAN RS.2,02,053/ - . IN VIEW OF THESE FACTS DULY SUPPORTED BY THE BALANCE SHEET OF THE APPELLANT HERSELF, THUS, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT CAN BE GIVEN BENEFIT OF ADDITIONAL MONEY RECEIVED FROM THE DEBTORS TO T HE EXTENT OF RS.2,02,053/ - ONLY. 4.1 ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, IT IS NOTICED THAT THERE WAS A CREDIT BALANCE OF RS.4,95,770/ - IN THE NAME OF SHRI. KRISHNA JAISWAL AS ON 31.03.2007. THE APPELLANT HAS CLAIMED THAT SHE HAS MADE PAYMENTS TO THE TUNE OF RS.12,70,000/ - TO M/S. AVA TRADERS ON BEHALF OF HER HUSBAND AND HER HUSBAND HAS REPAID THE SAME BY CASH TO THE TUNE OF RS. 7,72,020/ - AFTER ADJUSTING HIS CREDIT BALANCE WITH HER. THIS CLAIM OF THE APPELLANT IS NOT ACCEPTABLE IN VIEW OF THE FACT THAT THE APPELLANT IS TRADING IN CHICKOO AND SHE HAS TRIED TO DIVERT THE PURCHASES MADE FROM M/S. AVA TRADERS TO HER HUSBAND IN ORDER TO AVOID INCIDENCE OF TAX IN HER HANDS. HAD THE TRANSACTIONS BEEN GENUINE, THEN THE APPELLANT'S HUSBAND, SHRI. KRISHN A JAISWAL SHOULD HAVE ALSO MADE PAYMENTS BY CHEQUE TO HER. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HERSELF HAS PURCHASED ADDITIONAL GOODS WORTH RS.12,70,000/ - FROM M/S. AVA TRADERS AND ALSO SOLD THE SAME. THE CASH DEPOSITED IN THE BANK AC COUNT ALSO CLEARLY INDICATE THAT THE APPELLANT HERSELF HAS CARRIED OUT THE SALE OF ADDITIONAL GOODS. 4.1.1 ON PERUSAL OF COPY OF ACCOUNTS OF M/S. AVA TRADERS IN THE BOOKS OF ACCOUNT OF APPELLANT, IT IS NOTICED THAT THE APPELLANT HAS MAINTAINED TWO ACCOUNTS OF M/S. AVA TRADERS AS 'AVA TRADERS A/C.' AND 'AVA TRADERS - I A/C.'. IN THE FIRST ACCOUNT, THE PURCHASES HAVE BEEN SHOWN AT RS.26,05,841/ - WHICH HAVE ALSO BEEN DULY DEBITED IN THE PROFIT & LOSS A/C. WITH MINOR ADJUSTMENT OF RS.5,5,94/ - RESULTING INTO SALES OF RS.33,25,100/ - . THE SECOND ACCOUNT OF 'AVA TRADERS - I' HAS BEEN DEBITED BY CHEQUE PAYMENTS TO THE EXTENT OF RS.12,70,000/ - AND CREDITED BY THE SAME SUMS SHOWN IN CASH. THIS ALSO GOES TO PROVE THAT THE APPELLANT HAS, IN FACT, MADE THE PAYMENT BY C HEQUE T O M/S. AVA TRADERS FOR PURCHASES OF GOODS TO THE EXTENT OF RS.12,70,000/ - ALSO. THE APPELLANT HAS NOT FILED ANY CONFIRMATION FROM SHRI. KRISHNA JAISWAL IN THIS REGARD AND ALSO EVIDENCES TO PROVE THAT SHRI. KRISHNA JAISWAL HAS DISCLOSED PROFIT ON SUCH PURCHASES. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD THAT THE PAYMENTS OF RS.12,70,000/ - MADE TO M/S. AVA TRADERS ON BEHALF OF APPELLANT'S HUSBAND, IN FACT, WERE THE PAYMENTS FOR ADDITIONAL PURCHASES OF RS.12,70,000 / - ON WHICH SALES HAVE NOT BEEN DISCLOSED TO AVOID REQUIREMENT OF TAX AUDIT U/S. 44AB IN ADDITION TO THE TAX. ITA 1060/MUM/2014 & CO 81/MUM/2014 SMT. URMILA K. JAISWAL 5 4.1.2 ON PERUSAL OF THE PROFIT & LOSS A/C., IT IS NOTICED THAT THE APPELLANT HAS DISCLOSED SALES OF RS.33,25,100/ - AGAINST THE PURCHASES OF RS.26, 11,435/ - . IT MAY ALSO BE NOTED THAT OPENING STOCK AND CLOSING STOCK WERE ALMOST THE ' SAME. THUS, IT IS CLEAR THAT THE SALES WERE 1.276 TIMES HIGHER THAN THE PURCHASE COST. CONSIDERING THE SAME RATIO, SALES IN RESPECT OF THE ADDITIONAL PURCHASES OF RS.12,70 ,000/ - WORKED OUT TO RS.16,20,520/ - . THUS, AFTER CONSIDERING THE SALES DULY RECORDED IN THE BOOKS OF ACCOUNT AT RS.33,25,100/ - AND ADDITIONAL SALES GENERATED AT RS.16,20,520/ - , THE TOTAL TURNOVER WORKS OUT TO RS.49,45,620/ - . AFTER CONSIDERING THE TOTAL TUR NOVER OF RS.49,45,620/ - , THE DEPOSITS IN THE BANK ACCOUNT STILL REMAINED UNEXPLAINED TO THE TUNE OF RS.4,66,889/ - (RS.54,12,509 - RS.49,45,620). AS I HAVE ALREADY OBSERVED THAT THE ADDITIONAL RECEIPTS FROM THE SUNDRY DEBTORS WERE TO THE TUNE OF RS.2,02,053 / - ONLY AND HENCE, AFTER CONSIDERING THE SAME, THE UNEXPLAINED DEPOSITS IN THE BANK A/C. REMAINED AT RS.2,64,836/ - (RS.4,66,889 - RS.2,02,053). THUS, I HOLD THAT THE APPELLANT HAS FAILED TO EXPLAIN SATISFACTORILY THE DEPOSITS IN THE BANK ACCOUNT TO THE TUN E OF RS.2,64,836/ - AND ACCORDINGLY, THE ADDITION TO THIS EXTENT IS CONFIRMED. 4.2 ON THE BASIS OF UNRECORDED PURCHASE OF RS.12,70,000/ - , SALES HAVE BEEN WORKED OUT AT RS.16,20,520/ - . THE PERUSAL OF THE PROFIT & LOSS A/C. REVEALS THAT THE APP ELLANT HAS CLAI MED VARIOUS EXPENSES ON ACCOUNT OF PACKING, WAGES, TELEPHONE, BANK CHARGES, INTEREST, SALARY, ETC. AND THERE IS NO EVIDENCE OF INCURRING ANY ADDITIONAL EXPENSES IN RESPECT OF THE UNRECORDED PURCHASES AND SALES AND HENCE, THE DIFFERENCE BETWEEN THE SALE PRI CE AND THE PURCHASE OF GOODS IS REQUIRED TO BE CONSIDERED AS NET PROFIT OF THE APPELLANT. ACCORDINGLY, THE NET PROFIT OF UNRECORDED PURCHASES AND SALES WORKS OUT TO RS.3,50,520/ - (RS.16,20,520 - RS.12,70,000). THUS, I AM OF THE CONSIDERED VIEW THAT AN ADDI TION OF RS.3,50,520/ - IS ALSO REQUIRED TO BE MADE ON ACCOUNT OF SUPPRESSION OF NET PROFIT. 4.3 IN VIEW OF THE ABOVE, THE ADDITIONS OF RS.2,64,836/ - AND RS. 3,50,520/ - , RESPECTIVELY, ARE SUSTAINED AS UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT AND ADDITIONAL NET PROFIT AS AGAINST THE TOTAL ADDITION MADE BY A.O. AT RS.20,87,409/ - . THE A.O. IS DIRECTED TO ALLOW THE CONSEQUENTIAL RELIEF. ACCORDINGLY, ALL THE GROUNDS OF APPEAL ARE DISPOSED OF. 9 . AFTER CONSIDERING THE SUBMISSIONS MADE BY THE LEARNED D.R. FOR REVENUE AND THE FINDINGS OF THE LEARNED CIT(A) ON THE TWO ISSUES RAISED IN THE CO (SUPRA), WE FIND THAT THE ASSESSEE HAS BEEN UNABLE TO BRING ON RECORD MATERIAL EVIDENCE TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A) IN THE IMPUGNED ORDER. IN THIS VIEW OF THE M ATTER WE DO NOT FIND ANY REASON TO DEVIATE FROM OR INTERFERE WITH THE FINDINGS AS RECORDED BY THE LEARNED ITA 1060/MUM/2014 & CO 81/MUM/2014 SMT. URMILA K. JAISWAL 6 CIT(A) IN THE IMPUGNED ORDER AND ACCORDINGLY CONFIRM THE SAME. CONSEQUENTLY, CROSS OBJECTIONS AT S. NOS. 1 & 2 ARE DISMISSED. 10 . IN THE RESULT, BOTH REVE NUES APPEAL AND THE ASSESSEES CROSS OBJECTIONS FOR A.Y. 2008 - 09 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH APRIL , 2016 . SD/ - S D/ - ( SANDEEP GOSAIN ) ( JASON P. BOAZ ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 6 TH APRIL , 2016 COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) - II , THANE 4 . THE CIT - III , THANE 5 . THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.