ITO 32(3)(3), MUMBAI V. SANGEETA RAJ NAIR, MUMBAI

ITA 1200/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9779 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 08-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: VAISHALI MEHTA
• Keywords: Income from undisclosed sources
• Section: 44AD; 143(3)

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C. N. PRASAD,JUDICIAL MEMBER ./I.T.A./1200/MUM/2016, /ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER-32(3)(3) ROOM NO.105, 1 ST FLOOR C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA EAST MUMBAI-400 051. VS. SMT. SANGEETA RAJ NAIR YASH COMMUNICATION, SHOP NO.1 AMI KAILASH BLDG., IC COLONY BORIVALI (W),MUMBAI-400 103. PAN:ADTPN 1654 K ( /APPELLANT) ( / RESPONDENT) / REVENUE BY: SHRI V. JUSTIN-CIT-DR /ASSESSEE BY: SMT. VAISHALI MEHTA / DATE OF HEARING: 15/03/2018 / DATE OF PRONOUNCEMENT: 21/03/2018 , / PER RAJENDRA A.M. - CHALLENGING THE ORDER ,DATED 11/01/2016 OF THE CIT( A)- 44,MUMBAI,THE ASSESSEE HAS FILED PRESENT APPEAL.THE ASSESSEE,AN INDIVIDUAL,ENGAGED I N THE BUSINESS OF SELLING RECHARGE- COUPENS OF MOBILE COMPANIES AND MAKING BILL PAYMENT OF MOBILE COMPANIES AND VARIOUS UTILITIES,FILED HER RETURN OF INCOME ON 21/01/2012 DECLARING TOTAL INCOME AT RS.5 LAKHS. THE ASSESSING OFFICER(AO)COMPLETED ASSESSMENT ON 11/3/2 014, U/S. 143(3) OF THE ACT,DETERMIN- ING HER INCOME AT RS.49.60 LAKHS. 2. THE FIRST GROUND OF APPEAL IS ABOUT DELETING THE AD DITION OF RS.41.38 LAKHS ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNT.DURING THE ASSESSMEN T PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS.41.38 L AKHS IN HER SAVINGS BANK ACCOUNT MAINTAINED BY ICICI BANK.HE DIRECTED HER TO EXPLAIN THE SOURCE OF CASH DEPOSIT AND TO SUBMIT THE BANK SUMMARY OF CASH BOOK FOR THE YEAR UNDER CO NSIDERATION. AS PER THE AO THE ASSESSEE DID NOT FILE ANY DETAIL TILL THE DATE OF PASSING OF THE ORDER.SO,HE HELD THE ENTIRE CASH DEPOSIT OF RS.41.38 LAKHS, AS REPORTED IN AIR INFORMATION, WAS TO BE TREATED AS INCOME FROM UNDISCLOSED SOURCES OF THE ASSESSEE.ACCORDINGLY,HE MADE AN ADDI TION OF THE SAID SUM TO HER INCOME. 2.1. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFE RRED AN APPEAL BEFORE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE AVAILABLE MA TERIAL,HE HELD THAT THE ASSESSEE HAD FILED HER RETURN AS PER THE PROVISIONS OF SECTION 44AD OF THE ACT,THAT SHE WAS ENGAGED IN THE BUSINESS OF SELLING RECHARGE-COUPONS OF MOBILE COMP ANIES AND BILL PAYMENT OF PUBLIC UTILITIES,THAT SHE WOULD RECEIVE COMMISSION FROM MO BILE COMMISSIONS AFTER SHE WOULD DEPOSIT 1200/M/16 SANGEETA RAJ NAIR 2 AMOUNT IN THE BANK ACCOUNTS OF THE MOBILE COMPANIES ,THAT SHE WOULD COLLECT CASH FROM PUBLIC AND WOULD DEPOSIT THE SAME IN HER BANK ACCOUNT, THA T IT WAS NOT UNUSUAL FOR THE ASSESSEE TO RECEIVE AMOUNT IN CASH FROM GENERAL PUBLIC, HAT THE RECHARGE OF MOBILE TALK-TIME WAS GENERALLY IN THE DENOMINATION OF RS.100-200 OR SIMI LAR SMALL AMOUNTS, THAT THE ASSESSEE WAS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AS SHE HA D FILED RETURN OF INCOME U/S. 44AD, THAT THE AO HAD NOT UNDERSTOOD THE BUSINESS MODEL OF THE ASSESSEE. REFERRING TO THE BANK STATEMENT OF THE ASSESSEE,HE OBSERVED THAT THERE WE RE NUMEROUS CASH DEPOSITS AS WELL AS CASH WITHDRAWALS IN THE BANK ACCOUNT MAINTAINED BY HER, THAT THERE WAS NO JUSTIFICATION FOR MAKING ADDITION.ACCORDINGLY,HE DELETED THE ADDITION. 2.2. BEFORE US,THE DEPARTMENTAL.REPRESNETATIVE(DR) RELIE D UPON THE ORDER OF THE AO AND THE AUTHORISED REPRESENTATIVE(AR) SUPPORTED THE ORDER O F THE FAA . 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD FILED RETURN OF INCOME AS PER SECTION 44AD OF THE ACT,THAT SHE WAS NOT REQUIRED TO MAINTAIN THE REGULAR BOOKS OF ACCOUNT,THAT SHE WAS COLLECTING MONEY FROM THE GENERAL PUBLIC FOR RECHARGING THE MOBILE TALK-TIME AND OTHE R UTILITIES, THAT SHE HAD FILED THE BANK SUMMARY AND CASH BOOK DURING THE ASSESSMENT PROCEED INGS, THAT THE FAA HAD PERUSED THE BANK STATEMENT AND HAS GIVEN A CATEGORICAL FINDING OF THE FACT THAT THE BANK ACCOUNT HAD NUMEROUS CASH DEPOSITS AS WELL AS CASH WITHDRAWALS. HE ALSO HELD THAT IT WAS NOT A FEATURE OF BANK ACCOUNT WHERE UNACCOUNTED MONEY WAS STASHED.TH EREFORE,WE AGREE WITH THE CONCLUSION OF THE FAA THAT AO HAD NOT UNDERSTOOD THE BUSINESS MODEL OF THE ASSESSEE.CONFIRMING HIS ORDER,WE DECIDE FIRST GROUND OF APPEAL AGAINST THE AO. 3. SECOND GROUND OF APPEAL IS ABOUT DELETING THE ADDIT ION OF RS.3.21 LAKHS UNDER THE HEAD COMMISSION INCOME.THE AO HELD THAT ASSESSEE HAD DEC LARED COMMISSION INCOME OF RS.3,21, 421/-RECEIVED FROM VODAFONE AND COSMIC & MATRIX, TH AT SHE HAD NOT DECLARED SAID COMMISSION INCOME IN HER RETURN. HE MADE THE ADDITI ON OF THE RS.3.21 LAKHS TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOUR CES. 3.1. IN THE APPELLATE PROCEEDINGS,THE FAA HELD THAT AO M ADE THE ADDITION WITHOUT ANY BASIS, THAT WHOLE BUSINESS OF ASSESSEE WAS BASED ON COMMI SSION FROM MOBILE PHONE COMPANIES THAT THE COMMISSION AMOUNT WAS PART OF TOTAL INCOME OF T HE ASSESSEE. THE DR AND THE AR RELIED UPON THE ORDER OF THE AO AND THE FAA RESPECTIVELY.I N OUR OPINION,THE FAA HAS RIGHTLY HELD THAT THERE WAS NO JUSTIFICATION FOR MAKING THE ADDI TION.THE ASSESSEE WAS RECEIVING COMMI - 1200/M/16 SANGEETA RAJ NAIR 3 SSION FROM MOBILE COMPANIES AND IT WAS SHOWN IN THE STATEMENT OF TOTAL INCOME. SO, UPHOLDING THE ORDER OF THE FAA,WE DECIDE SECOND GRO UND OF APPEAL AGAINST THE AO. AS A RESULT APPEAL FILED BY AO STANDS DISMISSED. ! '#$% &'() . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2018. 21 , 2018 SD/- SD/- ( . . / C.N.PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 21.03.2018. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.