BINOD KUMAR KAORIA, MUMBAI V. ITO WD 21(1)1), MUMBAI

ITA 1088/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1274 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Principle of natural justice
• Section: 143(3); 68

Judgement Text

1 1088/MUM/2013 B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.1088 /MUM/2013 ( / ASSESSMENT YEAR : 2009-10) SHRI BINOD KUMAR KANORIA, C/O J.J. MEHRA & CO., CHARTERED ACCOUNTANTS, 11, LAXMI BUILDING, 2 ND FLOOR, OFF. TURNER ROAD, BANDRA (WEST), MUMBAI 400 050. / V. INCOME TAX OFFICER WARD 21(1)(1), MUMBAI. ./ PAN : AABPK8295J ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY NONE REVENUE BY : SHRI SUMAN KUMAR, D.R. / DATE OF HEARING : 04-04-2017 / DATE OF PRONOUNCEMENT : 10-04-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 1088/MUM/2013, IS DIRECTED AGAINST THE APPELLATE OR DER DATED 26 TH NOVEMBER, 2012 PASSED BY LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-32, MUMBAI (HEREINAFTER CALLED THE CIT(A )), FOR THE ASSESSMENT YEAR 2009-10, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDER DA TED 28 TH DECEMBER, 2011 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143 (3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL , MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 2 1088/MUM/2013 1. THE LEARNED INCOME TAX OFFICER & THE LEARNED CIT(A) - 32 HAVE ERRED IN ADDING RS. 363500/- ON AC COUNT OF CASH DEPOSITS IN THE BANK. 2. YOUR APPELLANT HAS MADE CASH DEPOSITS OF RS.363500/- INTO HIS DENA BANK, VILE PARLE BRANCH A /C NO.013110008919. YOUR APPELLANT HAS RECEIVED DEPOSI TS FOR TRADING FROM VARIOUS PERSONS IN THE MONTH OF AP RIL 2008.THE AMOUNTS RECEIVED HAVE BEEN DEPOSITED IN TH E ABOVE BANK. A LIST OF NAMES AND ADDRESS OF THE PERS ONS ALONG WITH THEIR PAN NO & CONFIRMATION OF THE PERSO N WHO HAVE GIVEN THE DEPOSITS HAS BEEN SUBMITTED TO THE LEARNED INCOME-TAX OFFICER & THE LEARNED CIT(A)- 32 , HENCE THERE IS NO REASON TO TREAT THE SAME AS UNEXP LAINED IN THE HANDS OF YOUR APPELLANT. 3. THE EXPLANATIONS AND SUBMISSIONS WERE GIVEN TO T HE LEARNED INCOME TAX OFFICER. 4. YOUR APPELLANT REQUESTS YOUR HONOUR TO KINDLY DELETE THE ADDITIONS MADE BY THE LEARNED INCOME TAX OFFICER AND UP HELD BY THE LEARNED COMMISSIONER OF INCOME TAX. 3. AT THE OUTSET, WE HAVE NOTED THAT THIS APPEAL IS POSTED FOR HEARING SEVERAL TIMES SINCE OCTOBER, 2014 AND HAVE BEEN ADJOURNED FROM TIME TO TIME AT THE REQUEST OF THE ASSESSEE. NONE APPEARED ON BEHALF OF ASSESSEE WHEN THE APPEAL WAS CALLED FOR H EARING ON 4 TH APRIL 2017 NOR ANY APPLICATION FOR ADJOURNMENT WAS MOVED BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE PROCEED TO DECIDE THE APPEAL ON MERITS AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AV AILABLE ON RECORD AFTER HEARING LD. D.R. THE ASSESSEE HAD ALSO EARLI ER FILED PAPER BOOK CONTAINING 24 PAGES WHICH IS PLACED IN FILE. 4. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS ENGAGED IN THE BUSI NESS OF SHARE TRADING . DURING THE COURSE OF ASSESSMENT PROCEEDIN GS U/S 143(3) R.W.S. 143(2) OF 1961 ACT, THE A.O. NOTICED THAT TH E ASSESSEE HAD DEPOSITED CASH ON VARIOUS DATES IN HIS SAVINGS BANK ACCOUNT NO. 3 1088/MUM/2013 013110008919 WITH DENA BANK, VILE PARLE BRANCH. THE ASSESSEE WAS ASKED TO SUBMIT CASH BOOK ALONG WITH THE NARRATION FOR EACH ENTRY. THE ASSESSEE SUBMITTED CASH BOOK. ON PERUSAL OF THE CASH BOOK, THE A.O. OBSERVED THAT THE ASSESSEE HAD TAKEN CASH DEPO SIT FOR TRADING FROM 19 PERSONS FROM 10.4.2008 TO 30.4.2008 RANGING BETWEEN RS. 17,500/- TO RS. 20,000/-. THE A.O. REJECTED THE CON TENTION OF THE ASSESSEE THAT IT HAS RECEIVED TRADING DEPOSITS AS I T WAS FOUND BY THE AO THAT ASSESSEE IS GIVING CONFLICTING STATEMENTS AS SOME TIME THE ASSESSEE IS CLAIMING TO BE SUB-BROKER AND WHILE SOM E TIME THE ASSESSEE WAS CLAIMING THAT HE IS NOT SUB-BROKER BUT TRADER IN SHARES. HENCE, THE AO MADE ADDITION OF RS. 3,63,500/- RECEI VED AS CASH DEPOSITS BY TREATING THE SAID AMOUNT AS ASSESSEES UN-EXPLAINED INCOME U/S 68 OF THE ACT, VIDE ASSESSMENT ORDER DAT ED 28-12-2011 PASSED BY THE AO U/S. 143(3) OF 1961 ACT. 5. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-12-20 11 PASSED BY THE A.O. U/S 143(3) OF 1961 ACT, THE ASSESSEE FILED FIRST APPEAL BEFORE THE LD. CIT(A). 6. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED TH AT CONFIRMATIONS OF ALL THE 19 PERSONS ALONG WITH THEIR PAN AND ADDRESS ES FROM WHOM CASH DEPOISTS OF RS. 3,63,500/- WERE RECEIVED BY TH E ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT Y EAR , WERE DULY SUBMITTED BEFORE THE A.O. ON 23-12-2011 DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 143(2) OF 1961 ACT AN D THERE WAS NO REASON TO TREAT THE SAME AS UNEXPLAINED INCOME IN T HE HANDS OF THE ASSESSEE. THE LD. CIT(A) CONSIDERED THE SUBMISSION OF THE ASS ESSEE BUT DOUBTED THE GENUINENESS OF THESE CASH TRANSACTION AS COPY O F INCOME-TAX 4 1088/MUM/2013 RETURNS FILED BY SUCH LENDERS FILED WITH THE REVENU E WERE NOT ENCLOSED BY THE ASSESSEE . THE LD. CIT(A) ALSO DOUBTED THAT THE ASSESSEE WHO IS TRADING IN SHARES WILL RECEIVE SUCH CASH DEPOSITS F ROM PERSONS IN CASH AND NOT BY CHEQUE. THE LEARNED CIT(A) ALSO HELD THA T THESE DEPOSITS DO NOT INSPIRE CONFIDENCE AS NO INTEREST WAS PAID, NO SOURCES AS WELL REASONS OF REPAYMENT IN CASH OF THESE DEPOSITS WER E SATISFACTORILY EXPLAINED BY THE ASSESSEE. THE LD. CIT(A), THUS CON FIRMED THE ADDITION MADE BY THE A.O. AS THE ASSESSEE FAILED TO SATISFAC TORILY EXPLAIN THE NATURE AND SOURCE OF THESE CASH CREDIT ENTRIES TO THE TUNE OF RS. 3,63,500/- , VIDE APPELLATE ORDERS DATED 26-11-2012 PASSED BY LEARNED CIT(A). 7. AGGRIEVED BY THE APPELLATE ORDERS DATED 26-11-20 12 PASSED BY LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 8. NONE APPEAR BEFORE THE TRIBUNAL ON BEHALF OF THE ASSESSEE WHEN THE APPEAL WAS CALLED FOR HEARING. ON THE OTHER HAN D, THE LD. D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELLOW AND SUBMITTED THAT THE ASSESSEE HAS NOT PROVED GENUINENESS , CREDITWORTHIN ESS AND IDENTITIES OF THE LENDERS OF THESE CASH DEPOSITS. 9. WE HAVE HEARD LD. D.R. AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING PAPER BOOK FILED BY T HE ASSESSEE. WE HAVE OBSERVED THAT DURING THE YEAR UNDER CONSIDERAT ION THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF SHARE AND COMMODITY TRADING . THE ASSESSEE HAS CLAIMED LOSS ON SHARE TRADING INCLUDIN G F & O , WHILE CLAIMED PROFIT ON COMMODITY TRADING , IN THE RETURN OF INCOME FILED WITH THE REVENUE(REF PB/PAGE 23) .THE ASSESSEES AC COUNT ARE AUDITED U/S 44AB OF 1961 ACT AND TAX-AUDIT REPORT WAS OBTAI NED BY THE ASSESSEE FOR RELEVANT PREVIOUS YEAR (PB/PAGE 21-22) . THE ASSESSEE HAD RECEIVED CASH DEPOSITS OF RS. 3,63,500/- FROM 19 PE RSONS FROM 10.4.2008 TO 30.4.2008. THE CASH DEPOSIT IN EACH C ASE WAS CLAIMED TO BE BELOW RS. 20,000/- EACH AND THE SAID CASH WAS CLAIMED BY THE ASSESSEE TO HAVE BEEN DEPOSITED IN DENA BANK, WHICH IS DOUBTED BY 5 1088/MUM/2013 THE REVENUE AS TO GENUINENESS , CREDIT-WORTHINESS O F THE CREDITORS AS THE AMOUNTS WERE RECEIVED AS WELL REPAID IN CASH AN D NO INTEREST WAS ALSO PAID . HOWEVER, THE CONFIRMATIONS FROM THESE C REDITORS CARRYING NAME, ADDRESS AND PAN WERE FILED BUT COPIES OF TAX- RETURNS OF THESE CREDITORS WERE NOT FILED BY THE ASSESSEE. IN OUR CONSIDERED VIEW, ALL THESE CONFIRMATIONS FROM CREDITORS FILED BY THE ASS ESSEE NEED VERIFICATION BY THE AUTHORITIES BELOW SO AS TO ENSU RE THAT MANDATE OF SECTION 68 OF 1961 ACT WAS FULFILLED. IN THE FITNES S OF THE MATTER AND IN THE INTEREST OF JUSTICE, WE ARE INCLINED TO SET ASI DE AND RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR DE-NOVO DETER MINATION OF THE ISSUE ON MERITS AFTER EXAMINATION OF ALL THESE DETAILS SU BMITTED BY THE ASSESSEE. THE ASSESSEE IS DIRECTED TO PRODUCE ALL NECESSARY AND RELEVANT EVIDENCES AND EXPLANATIONS BEFORE THE A.O. TO SUBSTANTIATE ITS CLAIM IN ITS DEFENCE TO SATISFY MANDATE OF SECTION 68 OF 1961 ACT I.E. AS TO IDENTITY AND CREDITWORTHINESS OF CREDITORS AND G ENUINENESS OF CREDIT TRANSACTION , WHICH EVIDENCES AND EXPLANATIONS SUBM ITTED BY THE ASSESSEE SHALL BE ADMITTED BY THE AO IN THE INTERES T OF JUSTICE . NEEDLESS TO SAY THAT PROPER AND ADEQUATE OPPORTUNIT Y OF BEING HEARD SHALL BE PROVIDED BY THE A.O. TO THE ASSESSEE IN AC CORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LA W. WE ORDER ACCORDINGLY. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN ITA NO. 1088/MUM/2013 IS ALLOWED FOR STATISTICAL PURPOSES A S PER TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL, 2017. !' # $ 10-04-2017 SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER ! MUMBAI ; # DATED 10-04-2017 . ) . ./ R.K. R.K. R.K. R.K. , EX. SR. PS 6 1088/MUM/2013 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. * / CIT- CONCERNED, MUMBAI 5. +, ))-. , -. , ! / DR, ITAT, MUMBAI A BENCH 6. /0 / GUARD FILE. / BY ORDER, + ) //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI