SHRI DAYAL JASHNANI, Nagpur V. ITO,WARD-2(4), Nagpur

ITA 101/NAG/2013

• Counselvise Citation: 10123914 RSA 2013
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: K P DEWANI
• Keywords: Unexplained cash credit; Business income; Corroborative evidences; Assessment record
• Section: 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER ITA NO. 101 / NAG ./ 2013 ( ASSESSMENT YEAR : 20 0 6 - 07 ) SHRI DAYAL JASHNANI ADILPUR APARTMENT BEHIND K.K. NAGAR JARIPATKA, NAGPUR 440 014 APPELLANT V/S INCOME TAX OFFICER WARD - 2(4), NAGPUR .... RESPONDENT PERMANENT ACCOUNT NUMBER ADAPJ5614J ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI NARENDRA KANE / DATE OF HEARING 01.04.2015 / DATE OF ORDER 09.04.2015 O R D E R PER MUKUL K. SHRAWAT , J .M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM THE ORDER DATED 24 TH JANUARY 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS) - 16, MUMBAI, (CAMP AT NAGPU R). THE MAIN GROUND OF THE ASSESSEE IS IN RESPECT OF CONFIRMATION OF ADDITION OF ` 1,35,280, MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). SHRI DAYAL JASHNANI 2 2. FACTS IN BRIEF, AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER DATED 18 TH DECEMBER 20 08, PASSED UNDER SECTION 143(3) OF THE ACT WERE THAT, THE ASSESSEE, IN INDIVIDUAL CAPACITY, HAS SHOWN INCOME FROM PROPERTY BROKERAGE BUSINESS. IT WAS NOTICED BY THE ASSESSING OFFICER THAT THERE WAS CASH CREDIT IN HIS BANK ACCOUNT MAINTAINED WITH BANK OF MA HARASHTRA AS PER THE FOLLOWING DETAILS: - 14.2.2006 BY CASH ` 1,00,000 25.3.2006 BY CASH ` 30,000 TOTAL: - ` 1,20,000 IN ADDITION TO THE ABOVE TWO DEPOSITS, THERE WAS ALSO A CREDIT ENTRY OF ` 15,280, WHICH WAS ALSO ENQUIRED BY THE ASSESSING OFFICER. AS PER THE ASSESSING OFFICER, THERE WAS NO PROPER EXPLANATION, HENCE, THE TOTAL AMOUNT OF ` 1,35,280, WAS TAXED BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE EXPLANATION OF THE ASS ESSEE WAS REJECTED AS UNDER: - AS REGARDS THE CASH DEPOSITS OF ` 1,00,000/ - AND ` 20,000/ - IN THE BANK ACCOUNT, THE APPELLANT CLAIMS TO HAVE MADE THE SAME OUT OF CASH IN HAND AND THAT HE HAD SUFFICIENT CASH BALANCE IN HAND. THE APPELLANT HAS FILED COPY OF HIS BALANCE SHEET WHICH SHOWS CLOSING BALANCE AS ON 31/3/3005 AT ` 2,98,128/ - . HOWEVER MERE AVAILABILITY ON THE OPENING DAY OF THE YEAR IS NOT SUFFICIENT TO PROVE AVAILABILITY OF FUNDS ON THE DATE/S OF DEPOSIT IN THE BANK ACCOUNT, SINCE THERE COULD ALSO H AVE BEEN OUTGOINGS FROM THE OPENING CASH BALANCE. THE ASSESSING OFFICER HAD SHRI DAYAL JASHNANI 3 SPECIFICALLY VIDE LETTER DATED 08/12/2008, ASKED THE APPELLANT NOT ONLY TO EXPLAIN THE CASH CREDITS BUT ALSO TO PRODUCE CASH BOOK FOR VERIFICATION ON 12.12.2008. THE ORDER SHEET OF ASSESSMENT PROCEEDINGS SHOWS NONE ATTENDED ON THE DATE FIXED FOR HEARING, VIZ., 12/12/2008. THE ASSESSING OFFICERS DIRECTION WAS NOT COMPLIED WITH. EVEN IN APPEAL PROCEEDINGS THE APPELLANT HAS MERELY RELIED UPON HIS STATEMENT THAT HE HAD SUFFICIENT OPENI NG BALANCE WITHOUT SHOWING THE CASH FLOW OR PRODUCING THE CASH BOOK. AS SEEN FROM THE ASSESSMENT RECORDS, THE APPELLANT FILED SOME DETAILS OF MONTHLY GROSS RECEIPTS, BUT WITHOUT ANY SUPPORTING EVIDENCE. IN THESE CIRCUMSTANCES, WITHOUT A CASH FLOW / CASH BO OK TO PROVE THAT THE APPELLANT HAD SUFFICIENT CASH BALANCE IN HAND ON THE DATE/S OF DEPOSIT IN THE BANK, THE ASSESSING OFFICERS ACTION IN MAKING ADDITION OF THE AMOUNTS AS UNEXPLAINED CASH CREDITS IS CONFIRMED. AS REGARDS CREDIT ENTRY OF ` 15,680/ - , THE APPELLANT CLAIMS THE SAME TO BE PAYMENT OF AN INSURANCE CLAIM. HOWEVER NO SUPPORTING FOR THE SAME HAS BEEN FILED EITHER IN ASSM PROCEEDINGS (ALTHOUGH BEING SPECIFICALLY ASKED TO EXPLAIN THE ENTRY VIDE ASSESSING OFFICERS LETTER DATED 08/12/2008) OR EVEN IN APPEAL PROCEEDINGS. AN ASSESSEE IS REQUIRED TO SUPPORT HIS CLAIM BY WAY OF SUPPORTING EVIDENCE WHICH HAS NOT BEEN DONE. SINCE THE APPELLANT HAS NOT DISCHARGED THE PRIMARY ONUS CASE UPON HIM, THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. 4. FROM THE SIDE OF THE APPELLANT, SHRI K.P. DEWANI, APPEARED AND INFORMED THAT THE ASSESSEE WAS REGULARLY ASSESSED TO TAX, HENCE, MAINTAINING THE PROPER ACCOUNTS. HE HAS ALSO INFORMED THAT THE BALANCE SHEET WAS DRAWN AS ON 31 ST MARCH 2005, ACCORDING TO WHICH, THE RE WAS A CLOSING CASH IN HAND OF ` 2,98,128. LIKEWISE, IN THE BALANCE SHEET DRAWN AS ON 31 ST MARCH 2006, THERE WAS A CLOSING CASH IN HAND OF ` 3,90,946. FURTHER, HE HAS ALSO INFORMED THAT THE ASSESSEE WAS HAVING SUFFICIENT GROSS RECEIPTS DURING THE YEAR WH ICH COULD ALSO HAVE BEEN UTILIZED FOR THE IMPUGNED DEPOSITS IN THE BANK. RELIANCE WAS SHRI DAYAL JASHNANI 4 PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT V/S BHAICHAND H. GANDHI, 141 ITR 67 (BOM.). 5. FROM THE SIDE OF THE REVENUE, THE LEARNED DEPARTMENTAL REPRESE NTATIVE, SHRI NARENDRA KANE, APPEARED AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE HAS ALSO PLEADED THAT BEFORE THE REVENUE AUTHORITIES, THE ASSESSEES ATTITUDE WAS NON - COOPERATIVE. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS ALSO PLEADED THAT IN THE ABSENCE OF DAY - TO - DAY CASH BOOK, IT WAS NOT POSSIBLE FOR HIM TO JUSTIFY CASH DEPOSITS MADE IN THE SAID BANK ACCOUNT. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS ALSO ARGUED THAT THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN BHAICHAND H. GANDHI (SUPR A) IS DISTINGUISHABLE ON FACTS BECAUSE IN THE SAID CASE THE ASSESSEE WAS MAINTAINING DAY - TO - DAY BOOKS OF ACCOUNT. 6. HEARD BOTH THE SI D ES AT SOME LENGTH. THE SHORT COMPILATION FILED IS PERUSED IN THE LIGHT OF THE ORDERS OF THE REVENUE AUTHORITIES. THE SMALL ISSUE IS IN RESPECT OF DEPOSITS FOUND IN THE BANK ACCOUNT OF THE ASSESSEE. IN A SITUATION WHEN THE ASSESSEE IS ASSESSED TO TAX SINCE PAST TEN YEARS AND FURNISHED HIS BALANCE SHEET OF THE PREVIOUS ACCOUNT PERIOD ENDED ON 31 ST MARCH 2005, WHEREIN A CASH IN H AND OF ` 2,98,128, WAS AVAILABLE WITH THE ASSESSEE, IT IS WRONG TO PRESUME ON THE PART OF THE REVENUE AUTHORITIES THAT THE SAID CASH COULD NOT HAVE SHRI DAYAL JASHNANI 5 BEEN UTILIZED FOR THE IMPUGNED DEPOSITS IN THE BANK. IN ADDITION TO THIS AVAILABILITY OF CASH IN HAND, THE A SSESSEE HAS ALSO SHOWN GROSS RECEIPTS FOR THE YEAR UNDER CONSIDERATION OF ` 1,76,800, AND THE NET INCOME AS PER PROFIT & LOSS ACCOUNT OF ` 1,26,320. THUS, CONSIDERING THE OVER ALL CIRCUMSTANCES OF THE CASE, THE POSSIBILITY OF SOURCE OF DEPOSIT IN THE BANK COULD BE FROM AVAILABLE CASH IN HAND OR THE BUSINESS RECEIPTS. THIS CONTROVERSY CAN, THEREFORE, BE DECIDED ON APPRECIATING THE FACTS OF THIS CASE AS DISCUSSED ABOVE. AS FAR AS THE LEGAL POSITION, AS DECIDED IN THE CASE OF BHAICHAND H. GANDHI (SUPRA) IS CON CERNED, THE SAME IS NOT REQUIRED TO BE DISCUSSED BECAUSE ON MERITS OF THIS CASE, THE ADDITION IS HEREBY DELETED. RESULTANTLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 9 TH APRIL 2015. SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER NAGPUR , DATED : 9 TH APRIL 2015 SHRI DAYAL JASHNANI 6 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, NAGPUR CITY CONCERNED ; (5) THE DR, ITAT, NAGPUR ; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SS ISTANT REGISTRAR ITAT, NAGPUR