ITO 24(2)(3), MUMBAI V. RIZWAN RASHEED SHAIKH, MUMBAI

ITA 10/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83898 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAV
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 10/MUM/2013 (ASSESSMENT YEAR: 2008-09) INCOME TAX OFFICER-24(2)(3) VS. SHRI RIZWAN RASHEED SHAIKH PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA, MUMBAI 400051 PLOT NO. 20, GATE NO. 7, ROOM NO. 19, NCC MALWANI, ABDUL HAMID ROAD, MALAD (W) MUMBAI 400064 PAN - BIOPS1269L APPELLANT RESPONDENT APPELLANT BY: SHRI AKHILENDRA P. YADAV RESPONDENT BY: NONE DATE OF HEARING: 09.10.2014 DATE OF PRONOUNCEMENT: 09.10.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL IS FILED AT THE INSTANCE OF THE REVENUE AND IT PERTAINS TO AY 2008-09. 2. THE FOLLOWING GROUNDS WERE URGED BEFORE US: - I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.34, 96,450/- MADE BY THE AO ON ACCOUNT OF CASH DEPOSITED IN THE SAVIN G BANK ACCOUNT, DESPITE THE ASSESSEE FAILING TO SUBMIT CAS H SUMMARY, LINK WITH CHEQUES, NAMES OF PARTIES AND OTHER EVIDENCES. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE I N CONTRAVENTION TO RULE 46A, DESPITE THE ASSESSEE FAILING TO PRODUC E THE DOCUMENTS DURING THE ASSESSMENT PROCEEDINGS, WHEN THE AO GAVE HIM SEVERAL OPPORTUNITIES. 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. ASSESSEE IS A MOTOR INSURANCE ADVISOR. HE ACTS AS AN AGENT B ETWEEN THE VEHICLE OWNERS AND THE INSURANCE COMPANIES. IN RESPECT OF P REVIOUS YEAR RELEVANT TO AY 2008-09 ASSESSEE DECLARED TOTAL INCOME OF ` 49,612/-. THE CASE HAVING ITA NO. 10/MUM/2013 SHRI RIZWAN RASHEED SHAIKH 2 BEEN TAKEN UP FOR SCRUTINY, ASSESSEE WAS CALLED UPO N TO FURNISH DETAILS OF THE INCOME AND IN RESPONSE THERETO THE ASSESSEE SUB MITTED THAT HE COLLECTED CASH TOWARDS INSURANCE PREMIUM WHICH WAS DEPOSITED IN THE BANK AND CONSOLIDATED CHEQUES IN FAVOUR OF THE INSURANCE COM PANIES WERE ISSUED WITH THE LIST OF DETAILS AS PER REGISTER AND POLICIES WE RE CREATED ACCORDINGLY. IN THE PROCESS THE ASSESSEE EARNED COMMISSION FROM INS URANCE COMPANIES FOR BRINGING INSURANCE BUSINESS. THE INSURANCE COMPANIE S DEDUCTED TAX ON THE INSURANCE COMMISSION AND BASED ON THE TDS CERTIFICA TES ASSESSEE FILED ANNUAL INCOME TAX RETURN. 4. THE AO NOTICED, AS PER AIR INFORMATION, THAT THE AS SESSEE DEPOSITED CASH OF ` 34,96,450/- IN HIS SAVING BANK ACCOUNT WITH STATE B ANK OF INDIA, GOREGAON WEST BRANCH, MUMBAI. ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF CASH DEPOSITED IN THE SAVING BANK ACCOUNT. SINCE THE DETAILS CALLED FOR WERE NOT FURNISHED, THE AO ASSUMED THAT THE IMPUGNE D CASH DEPOSITS ARE REFERABLE TO INCOME OF THE ASSESSEE EARNED FROM UND ISCLOSED SOURCES AND ACCORDINGLY ADDED THE SAME TO THE TAXABLE INCOME. 5. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THA T, IN HIS CAPACITY AS AN AGENT, THE ASSESSEE RECEIVED INSURANCE PREMIU M AMOUNTS IN CASH FROM VARIOUS PARTIES AND THE SAME WAS DEPOSITED IN THE BANK AND CONSOLIDATED CHEQUES WERE ISSUED IN FAVOUR OF THE I NSURANCE COMPANIES WITH THE LIST OF DETAILS OF POLICIES AGAINST WHICH THE S AID AMOUNT WAS COLLECTED FROM VARIOUS INDIVIDUALS. THEREFORE, IT IS NOT A FI T CASE FOR MAKING ADDITION REFERABLE TO THE DEPOSITS MADE IN THE BANK. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) INVOKED RULE 46A(4) OF THE I.T. RULES, 1962 AND CAL LED UPON THE ASSESSEE TO FILE DETAILS SUCH AS PROOF OF RECEIPT OF CASH RECEI VED FROM CLIENTS DATE-WISE, VEHICLE NUMBER-WISE TO CO-RELATE THE BANK DEPOSITS WITH THE CHEQUES ISSUED TO INSURANCE COMPANIES. IN RESPONSE THERETO THE ASS ESSEE FURNISHED THE DETAILS ON 10.09.2012. ASSESSEE HAD ALSO FILED SUMM ARY OF MONTH-WISE CASH RECEIVED AND MONTH-WISE DEPOSITS MADE INTO THE BANK . SAMPLE COPIES OF THE COLLECTION SUMMARY SHEETS CONTAINING THE DETAILS OF THE REFERENCE NUMBER, MOTOR VEHICLE NUMBER, NAME OF THE INSURED AND THE P REMIUM COLLECTED WERE ITA NO. 10/MUM/2013 SHRI RIZWAN RASHEED SHAIKH 3 ALSO PLACED BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) EXAMINED THE MATERIAL AND ALSO RANDOMLY TEST CHECKED THE SUBMISS ION OF THE ASSESSEE WITH REFERENCE TO THE AMOUNT RECEIVED FROM VARIOUS PARTIES AND THE DEPOSITS MADE IN THE BANK ACCOUNT. ANALYSIS OF THE DETAILS S HOWED THAT THE ASSESSEE COLLECTED CASH FROM VARIOUS PARTIES TOWARDS INSURAN CE PREMIUM AND THE SAME WAS DEPOSITED IN THE BANK AND IN TURN ISSUED C HEQUES TO THE INSURANCE COMPANIES. HE ALSO OBSERVED THAT THE CASH COLLECTED WAS PROPERLY EXPLAINED WITH THE RECORD MAINTAINED IN THE FORM OF DAILY COLLECTION SUMMARY SHEETS. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE HE SET ASIDE THE ADDITION MADE BY THE AO. 7. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. THE LEAR NED D.R. SUBMITTED THAT THE CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A; IN HIS OPINION ADDITIONAL EVIDENCE SHOULD NOT HAVE BEEN ADMITTED SINCE THE ASSESSEE FAILED TO PRODUCE THE EVIDENCE DURING THE ASSESSMENT PROCEEDINGS DESPITE PROVIDING SEVERAL OPPORTUNITIES . HE FURTHER SUBMITTED THAT THE AO COULD HAVE BEEN GIVEN AN OPPORTUNITY TO CROSS CHECK THE DETAILS FURNISHED BEFORE THE CIT(A). 8. NONE APPEARED ON BEHALF OF THE ASSESSEE. IN FACT, N OTICES SENT TO THE ASSESSEE WERE RETURNED UNSERVED WITH THE POSTAL REM ARKS LEFT. HOWEVER, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE WE PROCEED TO DISPOSE OF THE APPEAL EXPARTE, QUA ASSESSEE. IT IS WELL SETTLED THAT THE POWERS OF THE LEARNED CIT(A) ARE COTERMINOUS WITH THAT OF THE AO AND HE CAN NOT ONLY EXAMINE THE EVIDENCE PLACED BEFORE THE AO BUT ALSO CALL FOR ADDITIONAL EVIDENCE AND HE CAN ALSO CROSS EXAMINE THE WITNESSE S AND HE IS ENTITLED TO EVEN ENHANCE THE ASSESSMENT. RULE 46A(4) OF THE I.T . RULES GIVES AMPLE POWERS TO THE LEARNED CIT(A) TO DIRECT THE ASSESSEE TO PRODUCE ANY DOCUMENT IN THE INTEREST OF SUBSTANTIAL JUSTICE. IN THE INST ANT CASE THE LEARNED CIT(A) WAS JUSTIFIED IN CALLING FOR CLIENT-WISE DETAILS TO CROSS VERIFY THE DATE OF RECEIPTS AND DATE OF DEPOSITS, ETC. SINCE IT GOES T O THE ROOT OF THE MATTER. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER PA SSED BY THE CIT(A) IN ADMITTING ADDITIONAL EVIDENCE. AT ANY RATE, THOUGH THE REVENUE PREFERRED APPEAL BEFORE US THE MATERIAL FILED BEFORE THE CIT( A) WAS NOT SHOWN TO BE ITA NO. 10/MUM/2013 SHRI RIZWAN RASHEED SHAIKH 4 INADEQUATE AND IT IS NOT THE CASE OF THE AO THAT TH E ASSESSEE HAD IN FACT CARRIED ON ANY ACTIVITY, OTHER THAN AS AN INSURANCE AGENT, SO AS TO EARN SUCH HUGE SUM OF MONEY. ON A CONSPECTUS OF THE MATTER WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAD CORRECTLY TAKEN INTO CONSIDE RATION THE ADDITIONAL EVIDENCE TO APPRECIATE THE FACTUAL MATRIX OF THE CA SE WHILE SETTING ASIDE THE ADDITION MADE BY THE AO. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE CIT(A). 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH OCTOBER, 2014. SD/- SD/- ( B.R. BASKARAN ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 9 TH OCTOBER, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 34, MUMBAI 4. THE CIT 24, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.