Vishal Umed Mehta, CHENNAI V. ITO, CHENNAI

ITA 1246/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8059 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TIRPATHI IRS
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Unexplained investment; Opportunity of being heard

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO. 1246/MDS/2016 / ASSESSMENT YEAR : 2011-2012 SHRI. VISHAL UMED MEHTA, 31/26, KENT APARTMENTS, RITHERDON ROAD, VEPERY, CHENNAI 600 007. [PAN AADPM 2072R] VS. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION I (2) (I/C), CHENNAI 600 034 ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. V.S. JAYAKUMAR, ADVOCATE /RESPONDENT BY : SHRI. ASHISH TIRPATHI, IRS, JCIT. /DATE OF HEARING : 12-01-2017 ! /DATE OF PRONOUNCEMENT : 25-01-2017 % / O R D E R IN THIS APPEAL FILED BY THE ASSESSEE, IT AGGRIEVED ON AN ADDITION OF >2,79,408/- MADE BY THE LD. ASSESSING OFFICER AS UNEXPLAINED CASH DEPOSITS. 2. FACTS APROPOS ARE THAT ASSESSEE A NON-RESIDENT HAD FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR D ECLARING NIL INCOME. LD. ASSESSING OFFICER WAS OF THE OPINION TH AT ASSESSEE HAD ITA NO. 1246/MDS/2016 :- 2 -: MADE CASH DEPOSITS IN HIS BANK ACCOUNT DURING THE R ELEVANT PREVIOUS YEAR. ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE FOR SUCH DEPOSITS. FROM THE BALANCE SHEET FILED BY THE ASSESSEE ALONGW ITH ITS RETURN FOR ASSESSMENT YEAR 2010-2011, IT WAS NOTED BY THE LD. ASSESSING OFFICER THAT ASSESSEE HAD A CASH BALANCE OF >2,07,446/- AS ON 31.03.2010. HOWEVER, THE CASH DEPOSITS BY THE ASSESSEE IN THE B ANK ACCOUNT AS ON 03.06.2010 CAME TO >4,86,584/-. AS PER LD. ASSESSI NG OFFICER, ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR THE SHO RTFALL OF >2,79,408/-. AN ADDITION OF >2,79,410/- WAS MADE A S UNEXPLAINED INVESTMENTS AND ASSESSMENT WAS ACCORDINGLY COMPLET ED. 3. IN ITS APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) ARGUMENT OF THE ASSESSEE WAS THAT SHORTF ALL REPRESENTED CASH POOLED BY THE FAMILY MEMBERS OF THE ASSESSEE D EPOSITED IN ASSESSEES BANK ACCOUNT. CONTENTION OF THE ASSESSE E WAS THAT HE HAD GONE TO AUSTRALIA FOR HIGHER STUDIES, AND THE BUSIN ESS EARLIER CARRIED OUT IN HIS NAME WAS CONTINUED BY HIS FATHER WHO HA D POOLED SUCH AMOUNT AND DEPOSITED IN HIS ACCOUNT. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) DID NOT ACCEPT THIS CONTENTION . ACCORDING TO HIM, SUCH EXPLANATIONS COULD NOT BE ACCEPTED IN THE EYES OF LAW. HE CONFIRMED THE ADDITION. ITA NO. 1246/MDS/2016 :- 3 -: 4. NOW BEFORE ME, LD. AUTHORISED REPRESENTATIVE FILED AN AFFIDAVIT OF SHRI. UMED C. MEHTA FATHER OF THE ASSE SSEE. ACCORDING TO HIM, SHRI. UMED C. MEHTA HAD INFORMED THAT THE DIFF ERENCE REPRESENTED MONEY BELONGS TO MEMBERS OF HIS FAMILY. THUS ACCORDING TO HIM, ADDITION WAS UNFAIRLY DONE. 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. RELEVANT PART OF THE AFFIDAVIT FILED BY SHRI. UMED C. MEHTA IS REPRODUCED HEREUNDER:- MR.VISHAL UMED MEHTA IS ASSESSED TO INCOME TAX IN THE CAPACITY AS AN INDIVIDUAL. HE CARRIES ON BUSINESS O F ELECTRONICS & FUNDING HIS PAN NO. IS AADPM2072R. FOR THE ASSESSMENT Y4EAR 2011-12, THE RETURN OF INC OME WAS FILED ON 04/05/2012 ADMITTING NIL INCOME, AFTER ADJ USTMENT OF CURRENT YEAR'S LOSS. THE ASSESSING OFFICER, BASED O N THE INFORMATION OF AIR, NOTICED THAT A SUM OF RS.279,41 0/-.WAS DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT I WAS MAINTAINING HIS BANK ACCOUNT IN THE CAPACITY OF THE POWER OF ATTORNEY HOLDER, INCLUDING THE ACCOUNTS OF OTHER FAMILY MEMBERS AND CASH KEPT IN COMMON FOR ALL FAMILY MEMB ERS AS THEY WERE RESIDING ABROAD. DURING THE PERIOD MAY 20 10 TO JULY 2010, I WAS NOT KEEPING GOOD HEALTH, SUFFERING FROM FROZEN SHOULDER & SEVERE BACKACHE AND I HAD TO BE TREATED FOR AILMENT S IN MUMBAI, BY AN AYURVEDIC ORTHOPAEDIST AND WAS ASK ED TO TAKE COMPLETE REST & TREATMENT IN MY HOUSE BY MY DOCTORS. I WAS STAYING WITH MY DAUGHTER ANJU JITENDER KOTHARI, AT D-416, RAJ GARDEN, KANDIVALI WEST, MUMBAI 400 067. DURING THE SAID PERIOD, I NEEDED CASH FOR MEETING MY PERSONAL EXPE NSES. ON 03/06/2010, I REQUESTED OUR NEPHEW MR. PRAVEENCHAND NAHAR S/O SRI GOUTHAMCHAND NAHAR, RESIDING & CARRYING OUT BUSINESS AT HIRA MANSION, 20 GENERAL MUTHIA MUDALI STREET, SOWC ARPET, ITA NO. 1246/MDS/2016 :- 4 -: CHENNAI-600078 TO COLLECT CASH LYING IN MY SAFE & DEPOSIT CASH WHICH SUM, BELONGS TO ALL MEMBERS OF THE FAMILY( DE TAILS OF THE FAMILY MEMBERS ARE ATTACHED SEPARATELY), MR.S.GUNAB ALAN AN EMPLOYEE OF MR.PRAVEENCHAND NAHAR, ON INSTRUCTIONS FROM PRAVEENCHAND NAHAR .COLLECTED THE CASH AND DEPOSITE D THE SAME IN THE SAID ACCOUNT BEARING SB A/E. NO. 481125 363.IN THE INDIAN BANK, SOWCARPET, CHENNAI-600078. AS THERE WA S NO INTERNET BANKING FACILITY AVAILABLE TO THESE ACCOU NTS CASH WAS REMITTED TO MEET THE COMMITMENT . I HAD SUBMITTED BEFORE THE ASSESSING OFFICER, THE ABOVE SAID EXPLANATIONS. THE SAME WERE NOT FAVOURABLY CONSID ERED BY THE ASSESSING OFFICER AND IT MADE AN ADDITION IN THE IN COME TAX ASSESSMENT AND BROUGHT TO TAX A SUM OF 279,410/- UNDER THE HEAD INCOME FROM OTHER SORUCES. HOWEVER, THE LOSS RETURNED CONTINUED TO BE THE SAME DEPOSITS THE ADDITION MADE BY THE LD. ASSESSING OFFICER AS HE HAD NOT ALLOWED SET OFF OF THE SAME AGAINST THE INCOME FROM OTHER SOURCES. I FILED AN APPEAL BEFORE THE CIT(A) AND APPEARED ON 07/01/2016, .THE CIT(A) DID NOT GIVE ANY FURTHER HEARING BUT PR OCEEDED TO PASS THE ORDER CONFIRMING THE ORDER PASSED BY THE A SSESSING OFFICER. I MADE A SPECIFIC SUBMISSION BEFORE THE CI T(A) THAT I WAS NOT KEEPING GOOD HEALTH AND THAT I WOULD FILE FURTH ER INFORMATION IN THIS REGARD TO SUBSTANTIATE THE BONAFIDES OF THE CIRCUMSTANCES IN WHICH I WAS PLACED TO REQUEST OUR FAMILY FRIEND TO COLLECT THE CASH FROM OUR NEAR AND DEAR MEMBERS OF THE FAMILY A ND DEPOSIT IT IN THE BANK ACCOUNT OF THE APPELLANT. I SUBMIT THAT I HAVE GATHERED ALL THE INFORMATION I N THIS REGARD I WOULD WISH TO BRING ON RECORD THIS AVERMENT IN THIS AFFIDAVIT TO PROVE MY EXPLANATIONS ADDUCED BEFORE THE LOWER AUTH ORITIES. I AM PRAYING FOR THE INDULGENCE OF THIS HON'BLE BEN CH OF THE TRIBUNAL TO KINDLY GIVE ME AN OPPORTUNITY OF BEING HEARD AND TO DIRECT THE LOWER AUTHORITIES TO CONSIDER MY PLEA RE LATING TO THE CASH CREDIT IN QUESTION AND RENDER JUSTICE. CONSIDERING THE FACTS AND CIRCUMSTANCES EXPLAINED IN THE AFFIDAVIT AND ALSO THE FACT THAT ASSESSEE WAS A NON-RESIDENT DURI NG THE RELEVANT PERIOD, I AM OF THE OPINION THAT RULES OF JUSTICE W ILL BE MET IF ASSESSEE ITA NO. 1246/MDS/2016 :- 5 -: IS GIVEN ONE MORE OPPORTUNITY TO EXPLAIN THE SOURCE OF DEPOSITS IN BANK ACCOUNT. ACCORDING, I SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THE ISSUE BACK TO THE FILE OF THE LD. ASSESSI NG OFFICER FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 25TH DAY OF JANUARY , 2017, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:25TH JANUARY, 2017 KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF