DARSHAN VITTHAL KHEDEKAR ,MUMBAI V. NFAC, DELHI

ITA 2933/MUM/2024

AI Insights

The case involves an appeal by Dasharath Vitthal Khedekar against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which upheld the addition of Rs.1,40,48,200 as unexplained cash deposits in the assessee's bank account under section 69A read with section 115BBE of the Income-tax Act, 1961. The Assessing Officer had initially made this addition after observing that the cash deposits exceeded the reported turnover in the assessee's income tax return. The assessee contended that the turnover was reported incorrectly due to a mistake, and the actual turnover was higher, supported by previous years' assessments. The Tribunal, considering the circumstances and the assessee's arguments, decided to restore the matter to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471385 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 27-05-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: AJINKYA VAISHAMPAYAN
• Keywords: Business income; Unexplained investment
• Section: 143(3); 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 2933/MUM/2024 Assessment Year: 2017-18 Dasharath Vitthal Khedekar, Gala No. 889, APMC Fruit Market, Turbhe, Navi Mumbai-400705. Vs. National Faceless Appeal Centre Income Tax Officer, Ward 28(1)(3), 327, 3rd floor, Tower No. 6, Vashi Railway Station, Commercial Complex, Vashi, Navi Mumbai-400703. PAN NO. ANIPK 9257 A Appellant Respondent Assessee by : Mr. Ajinkya Vaishampayan Revenue by : Mr. R.R. Makwana, Sr. DR Date of Hearing : 15/10/2024 Date of pronouncement : 22/10/2024 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 30.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1] The learned CIT(A) erred in confirming the Rs.1,40,48,200/ the bank account on the ground that the assessee had failed to prove the sources of the said cash deposited and hence, the addition was rightly made by the A.O. 2] The learned his turnover figures to justify the cash deposit in the bank account and hence, the addition was rightly made by the learned A.O. 3] The learned CIT(A) erred in not appreciating that the cash deposite in the bank account was out of the regular sales made by the assessee and hence, there was no reason to make any addition of the said amount as an unexplained investment u/s 69A r.w.s. 115BBE of the Act. 4] The learned CIT(A) erred in not appreciating th of income filed by the assessee, the turnover was not correctly reported and the said mistake was corrected during the asst. proceedings and hence, there was no reason to hold that the assessee had failed to explain the sources of accordingly, the addition made may kindly be deleted. 5] The learned CIT(A) erred in not appreciating that the assessee had submitted various details to prove that the cash deposited in the bank account was out o made u/s 69A r.w.s. 115BBE is not justified and the same may kindly be deleted. 2. Briefly stated, facts of the case are that the assessee filed its return of income on 02.02.2018 declaring total income Rs.4,89,960/-. The return of income filed by the assessee was selected for scrutiny and statutory notices under the Income Act, 1961 (in short ‘the Act’) were issued and complied with. The Assessing Officer observed cash deposit of Rs.1,40,48,200/ bank account of the assessee maintained with Deccan Merchants Co-op. Bank Ltd. The Assessing Officer further noticed that in the return of income filed, the assessee had offered turnover of Rs.55,88,570/- for the year under consideration. As total c deposits being more than the turnover of the assessee, the Dasharath Vitthal Khedekar 1] The learned CIT(A) erred in confirming the addition of Rs.1,40,48,200/-u/s 69A r.w. 115BBE on account of cash deposited in the bank account on the ground that the assessee had failed to prove the sources of the said cash deposited and hence, the addition was rightly made by the A.O. The learned CIT(A) erred in holding that the assessee had concocted his turnover figures to justify the cash deposit in the bank account and hence, the addition was rightly made by the learned A.O. The learned CIT(A) erred in not appreciating that the cash deposite in the bank account was out of the regular sales made by the assessee and hence, there was no reason to make any addition of the said amount as an unexplained investment u/s 69A r.w.s. 115BBE of the The learned CIT(A) erred in not appreciating that in the original return of income filed by the assessee, the turnover was not correctly reported and the said mistake was corrected during the asst. proceedings and hence, there was no reason to hold that the assessee had failed to explain the sources of the cash deposited in the bank account and accordingly, the addition made may kindly be deleted. The learned CIT(A) erred in not appreciating that the assessee had submitted various details to prove that the cash deposited in the bank account was out of his regular cash sales and therefore, the addition made u/s 69A r.w.s. 115BBE is not justified and the same may kindly Briefly stated, facts of the case are that the assessee filed its return of income on 02.02.2018 declaring total income . The return of income filed by the assessee was selected for scrutiny and statutory notices under the Income Act, 1961 (in short ‘the Act’) were issued and complied with. The Assessing Officer observed cash deposit of Rs.1,40,48,200/ bank account of the assessee maintained with Deccan Merchants op. Bank Ltd. The Assessing Officer further noticed that in the return of income filed, the assessee had offered turnover of for the year under consideration. As total c deposits being more than the turnover of the assessee, the Dasharath Vitthal Khedekar 2 ITA No. 2933/MUM/2024 addition of u/s 69A r.w. 115BBE on account of cash deposited in the bank account on the ground that the assessee had failed to prove the sources of the said cash deposited and hence, the addition was CIT(A) erred in holding that the assessee had concocted his turnover figures to justify the cash deposit in the bank account and The learned CIT(A) erred in not appreciating that the cash deposited in the bank account was out of the regular sales made by the assessee and hence, there was no reason to make any addition of the said amount as an unexplained investment u/s 69A r.w.s. 115BBE of the at in the original return of income filed by the assessee, the turnover was not correctly reported and the said mistake was corrected during the asst. proceedings and hence, there was no reason to hold that the assessee had failed to the cash deposited in the bank account and The learned CIT(A) erred in not appreciating that the assessee had submitted various details to prove that the cash deposited in the bank f his regular cash sales and therefore, the addition made u/s 69A r.w.s. 115BBE is not justified and the same may kindly Briefly stated, facts of the case are that the assessee filed its return of income on 02.02.2018 declaring total income at . The return of income filed by the assessee was selected for scrutiny and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied with. The Assessing Officer observed cash deposit of Rs.1,40,48,200/- in the bank account of the assessee maintained with Deccan Merchants op. Bank Ltd. The Assessing Officer further noticed that in the return of income filed, the assessee had offered turnover of for the year under consideration. As total cash deposits being more than the turnover of the assessee, the Assessing Officer asked the assessee to produce books of accounts. On verification of the sale register total sale of Rs.1,69,31,409/ account submitted by the assessee turnover of Rs.2,65,15,554/ was recorded. The contention of the assessee were not accepted and the Assessing Officer held entire cash deposit of Rs.1,40,48,200/ as unexplained money in terms of section 69 accordingly in the assessment order passed u/s 143(3) of the Act on 19.11.2019, he made addition 3. On further appeal, the Ld. CIT(A) upheld the addition observing as under: “Aggrieved, assessee is in appeal. It is noted that assessee had offered turnover of Rs.55,88,870/ confronted with the cash deposits being more than the turnover shown in the ITR, assessee submitted that the turnover was wrongly shown in his ITR and cl actually Rs.2,65,15,554/ assessee is concocting figures upon being confronted with his cash deposits. Assessee has also submitted in written submissions that no books of accounts were being by him. The assessee has thus failed to produce any documentary evidence in support of his claim that the cash deposit has been made out of cash sales. Accordingly, grounds of appeal are hereby dismissed. As a result, the appeal is dismissed. 4. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. Dasharath Vitthal Khedekar Assessing Officer asked the assessee to produce books of accounts. On verification of the sale register, the Assessing Officer observed total sale of Rs.1,69,31,409/- only. But in the profit an account submitted by the assessee turnover of Rs.2,65,15,554/ . The contention of the assessee were not accepted and the Assessing Officer held entire cash deposit of Rs.1,40,48,200/ as unexplained money in terms of section 69A of the accordingly in the assessment order passed u/s 143(3) of the Act on made addition of Rs.1,40,48,200/-. On further appeal, the Ld. CIT(A) upheld the addition Aggrieved, assessee is in appeal. It is noted that in his ITR for the A.Y. under consideration, the assessee had offered turnover of Rs.55,88,870/ confronted with the cash deposits being more than the turnover shown in the ITR, assessee submitted that the turnover was wrongly shown in his ITR and claimed that his turnover was actually Rs.2,65,15,554/-. It is clear from the facts that the assessee is concocting figures upon being confronted with his cash deposits. Assessee has also submitted in written submissions that no books of accounts were being maintained by him. The assessee has thus failed to produce any documentary evidence in support of his claim that the cash deposit has been made out of cash sales. Accordingly, grounds of appeal are hereby dismissed. As a result, the appeal is dismissed.” Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. Dasharath Vitthal Khedekar 3 ITA No. 2933/MUM/2024 Assessing Officer asked the assessee to produce books of accounts. the Assessing Officer observed only. But in the profit and loss account submitted by the assessee turnover of Rs.2,65,15,554/- . The contention of the assessee were not accepted and the Assessing Officer held entire cash deposit of Rs.1,40,48,200/- of the Act and accordingly in the assessment order passed u/s 143(3) of the Act on On further appeal, the Ld. CIT(A) upheld the addition in his ITR for the A.Y. under consideration, the assessee had offered turnover of Rs.55,88,870/-. When confronted with the cash deposits being more than the turnover shown in the ITR, assessee submitted that the turnover was aimed that his turnover was . It is clear from the facts that the assessee is concocting figures upon being confronted with his cash deposits. Assessee has also submitted in written maintained by him. The assessee has thus failed to produce any documentary evidence in support of his claim that the cash Aggrieved, the assessee is in appeal before the Tribunal raising 5. We have heard rival submission of the parties and perused the relevant material on record. The Assessing Officer has made addition for the amount of Rs. account of the assessee as cash deposits f turnover of the assessee in the return of income was reported only Rs.55,88,870/-. The Assessing Officer also noted in the sales register also the total sales Before us, the Ld. counsel for the assessee submitted that the assessee was not much literate and he reported his entire turnover of Rs.2,65,15,554/- account but he mistaken Rs.55,88,870/- in the return of income filed. The Ld. counsel submitted that in the profit and loss account and the books of accounts produced during the course of the assessment proceedings, the turnover of Rs.2,65,15,554/ the period for revsing assessee could not revise the return of income. He submitted that mistake pertains mainly to the person who was looking after the filing of return of income. The Ld. co the assessee has shown turnover of more than Rs.2 crores in earlier assessment years which supports the case of the assessee that inadvertently lower turnover has been shown for the year under consideration. The Ld. counsel a file necessary documents indicating complaint person who had filed Dasharath Vitthal Khedekar We have heard rival submission of the parties and perused the relevant material on record. The Assessing Officer has made addition for the amount of Rs.1,40,48,200/- appearing in the bank the assessee as cash deposits for the reason that turnover of the assessee in the return of income was reported only . The Assessing Officer also noted in the sales register also the total sales of Rs.1,69,31,409/- were Before us, the Ld. counsel for the assessee submitted that the assessee was not much literate and he reported his entire turnover to the person who was maintaining books of account but he mistakenly only reported turnover of in the return of income filed. The Ld. counsel submitted that in the profit and loss account and the books of accounts produced during the course of the assessment proceedings, the turnover of Rs.2,65,15,554/- was recorded revsing the return of income had already expired assessee could not revise the return of income. He submitted that mainly to the person who was looking after the filing of return of income. The Ld. counsel before us submitted that the assessee has shown turnover of more than Rs.2 crores in earlier assessment years which supports the case of the assessee that inadvertently lower turnover has been shown for the year under consideration. The Ld. counsel also submitted that the assessee will documents indicating complaint filed against d return of income for the relevant year. The Ld. Dasharath Vitthal Khedekar 4 ITA No. 2933/MUM/2024 We have heard rival submission of the parties and perused the relevant material on record. The Assessing Officer has made appearing in the bank or the reason that turnover of the assessee in the return of income was reported only . The Assessing Officer also noted in the sales were only recorded. Before us, the Ld. counsel for the assessee submitted that the assessee was not much literate and he reported his entire turnover to the person who was maintaining books of ly only reported turnover of in the return of income filed. The Ld. counsel submitted that in the profit and loss account and the books of accounts produced during the course of the assessment recorded. But as already expired, the assessee could not revise the return of income. He submitted that mainly to the person who was looking after the unsel before us submitted that the assessee has shown turnover of more than Rs.2 crores in earlier assessment years which supports the case of the assessee that inadvertently lower turnover has been shown for the year under lso submitted that the assessee will filed against the return of income for the relevant year. The Ld. counsel submitted that if matter is restored back to the Assessing Officer, the assessee of more than Rs. 2 crores was shown in the return of income. In view of the facts and circumstances of the case appropriate to restore the issue back to the file of the Assessing Officer for providing one more opportunity to the assessee for justifying that turnover of the assessee was more than Rs. 2 crores in regular course of business and by mistake less amount was reported in the return of income. The grounds of appeal of the assessee are accordingly allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 22/10/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Dasharath Vitthal Khedekar counsel submitted that if matter is restored back to the Assessing ee would substantiate that in prior years turnover of more than Rs. 2 crores was shown in the return of income. In view of the facts and circumstances of the case appropriate to restore the issue back to the file of the Assessing oviding one more opportunity to the assessee for justifying that turnover of the assessee was more than Rs. 2 crores regular course of business and by mistake less amount was reported in the return of income. The grounds of appeal of the ccordingly allowed for statistical purposes. In the result, the appeal of the assessee is allowed for nounced in the open Court on 22/10/2024. - Sd/ (KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Dasharath Vitthal Khedekar 5 ITA No. 2933/MUM/2024 counsel submitted that if matter is restored back to the Assessing substantiate that in prior years turnover of more than Rs. 2 crores was shown in the return of income. In view of the facts and circumstances of the case, we feel it appropriate to restore the issue back to the file of the Assessing oviding one more opportunity to the assessee for justifying that turnover of the assessee was more than Rs. 2 crores regular course of business and by mistake less amount was reported in the return of income. The grounds of appeal of the ccordingly allowed for statistical purposes. In the result, the appeal of the assessee is allowed for /10/2024. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "