ITO, CHENNAI V. Sohail Sultanali Currimbhoy, CHENNAI

ITA 1282/CHNY/2013

• Counselvise Citation: 128221714 RSA 2013
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 07-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI JT
• Keywords: Unexplained investment; Peak credit
• Section: 143(3); 131; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , . . ! , ' !# $ [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1282/MDS/2013 / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER SALARY WARD VI(2) CHENNAI VS. SHRI SOHAIL SULTANALI CURRIMBHOY NO.H-3, III FLOOR TOUCHSTONE APARTMENTS 10, VASU STREET, KILPAUK CHENNAI 600 010 [PAN ADAPC 7058K ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI T.N.BETGIRI, JT.CIT / RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE / DATE OF HEARING : 06-05-2014 / DATE OF PRONOUNCEMENT : 08-05-2014 )!* / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2009-10 , IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCO ME-TAX(APPEALS)-VI CHENNAI, DATED 27.12.2012, PASSED IN APPEAL NO.199/ 11-12, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.1282/13 :- 2 -: 2. THE SOLE SUBSTANTIVE GRIEVANCE OF THE REVENUE/APPEL LANT IN THE PRESENT APPEAL IS THAT THE CIT(A) HAS WRONGLY R ESTRICTED IMPUGNED ADDITION OF UNEXPLAINED INVESTMENT U/S 69 TOTALL ING ` 31,92,565/- ( ` 29,31,591/- OF CASH DEPOSITS + ` 2,60,975/- AS CREDIT CARD PAYMENTS) TO ` 6,14,678/- MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 28.12.2011. 3. THE ASSESSEE; AN INDIVIDUAL, IS HAVING INCOME FR OM SALARY AND PROPERTY. ON 21.7.2009, HE HAD FILED HIS RETUR N DECLARING TOTAL INCOME OF ` 3,44,490/- WHICH WAS SUMMARILY PROCESSED. THROUG H CASS AND AIR INFORMATION, THE ASSESSING OFFICER CAM E TO KNOW ABOUT ASSESSEES SBI CREDIT CARD PAYMENTS OF ` 2,60,975/- AND CASH DEPOSITS OF ` 29,31,591/- IN HIS ICICI BANK ACCOUNT AT NUNGAMBAK KAM, CHENNAI. HE SOUGHT FOR THEIR DETAILS. THE ASSESS EE CLAIMED HIMSELF AS A FREELANCER PROVIDING CONSULTANCY AND VISA EX ECUTION FOR PEOPLE GOING ABROAD. HE SUBMITTED THAT THE CASH DEPOSITS WERE RECEIVED FROM VARIOUS PERSONS FOR HIS AFORESAID ACTIVITY AND THE CORRESPONDING CASH WITHDRAWALS REPRESENTED VISA EXPENSES. PER ASSESSI NG OFFICER, THE ASSESSEE HAD FAILED TO PRODUCE ANY DOCUMENTARY EVID ENCE IN SUPPORT THEREOF. HE ISSUED NOTICE U/S 131 TO ICICI BANK AUTHORITIES. THEY SENT HIM COPIES OF VOUCHERS PROCESSED FOR CASH PAID IN VARIOUS I.T.A.NO.1282/13 :- 3 -: BRANCHES OUT OF CHENNAI. THESE VOUCHERS HAD SHOWN CASH PAID TO ONE SHRI S. DHANASEKAR. THE ASSESSING OFFICER TRIED TO CONTACT HIM. BUT FAILED. THUS, HE INFERRED THAT THE SAID PERSON AS SISTING THE ASSESSEE HAD LEFT THE JOB. THE ASSESSING OFFICER SOUGHT FOR COPIES OF PAYEES CHALLANS. THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THEM. HE REITERATED THAT VARIOUS SUMS HAD BEEN WITHDRAWN FOR VISA PROCESSING ACTIVITIES. THE ASSESSEE ALSO REQUESTED THE ASSES SING OFFICER TO APPLY SECTION 44AE OF THE ACT AND TAX 5% OF THE TOTAL CAS H BY FOLLOWING PEAK CREDITS. THE ASSESSING OFFICER OBSERVED THAT THIS PROVISION WOULD APPLY TO THE PERSONS CARRYING ON BUSINESS OF PLYING, HIRI NG AND LEASING GOODS CARRIAGES AND NOT OWNING MORE THAN 10 VEHICLES. T HUS, HE MADE ADDITION OF ` 29,31,591/- AS UNEXPLAINED INVESTMENT U/S 69. S IMILARLY, HE ALSO MADE ANOTHER ADDITION OF ` 2,60,975/- (SUPRA) FOR LACK OF ANY DOCUMENTARY EVIDENCE OF MATCHING PAYMENTS. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. ALONGWI TH GROUNDS, HE PROVIDED DETAILS OF VISAS OBTAINED FOR VARIOUS CLIENTS, CORRESPONDING AMOUNTS WITHDRAWN, EXPENDITURE STATEM ENT ETC. IN LOWER APPELLATE ORDER, THE CIT(A) HOLDS THAT THE A SSESSEE IS RENDERING VISA SERVICES TO HIS CLIENTS WHO HAD TO WITHDRAW TH E MONEY FOR PAYING IT TO THE CONCERNED EMBASSIES. THEREAFTER, HE OBSE RVES THAT SECTION 44AE HAD WRONGLY BEEN INVOKED BY THE ASSESSING OF FICER INSTEAD OF I.T.A.NO.1282/13 :- 4 -: THE CORRECT PROVISION U/S 44AF. THEN THE CIT(A) PR OCEEDS TO EXAMINE CASH DEPOSITS AS WELL AS CREDIT CARD PAYMENTS IN QU ESTION. HE OBSERVES THAT OUT OF THE CASH DEPOSITS, A SUM OF ` 23,16,912/- STOOD WITHDRAWN LEAVING BEHIND A SUBSTANTIAL SURPLUS OF ` 6,14,678/-. THAT HAS BEEN ADDED AS INCOME FROM OTHER SOURCES. IN THIS MANNER, A SUM OF ` 25,77,887/- OUT OF ` 29,31,591/- ADDED BY THE ASSESSING OFFICER STANDS DELETED. THIS LEAVES THE REVENUE AGGRIEVED. 5. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. THE REVENUE ARGUES THAT AT THE TIME OF ACCEPTING AD DITIONAL DETAILS (SUPRA) ALONGWITH GROUNDS, THE CIT(A) DID NOT GRAN T ANY OPPORTUNITY OF REBUTTAL TO THE ASSESSING OFFICER. TECHNICALLY, THIS PLEA IS WELL JUSTIFIED. HOWEVER, THE FACT ALSO REMAINS THAT THE REVENUE HAS FAILED TO POINT OUT AS TO WHAT PREJUDICE HAS BEEN CAUSED T O ITS INTEREST. WE REITERATE THE TRITE PROPOSITION OF LAW THAT POWERS OF CIT(A) STAND CO- TERMINUS WITH THAT OF THE ASSESSING OFFICER. ONCE THE ASSESSEE HAS DEMONSTRATED IN LOWER APPELLATE PROCEEDINGS THE SOU RCE AS WELL AS APPLICATION OF THE CASH DEPOSITS IN HIS VISA PROCES SING BUSINESS, THE CIT(A) AFTER RECORDING DUE SATISFACTION HAS PROCEED ED TO RESTRICT THE IMPUGNED ADDITION. REGARDING ASSESSEES BUSINESS OF A VISA CONSULTANT, HE HAS RELIED UPON THE ASSESSING OFFICERS VIEW. T HERE IS NO DISPUTE I.T.A.NO.1282/13 :- 5 -: RAISED QUA APPLICABILITY OF SECTION 44AF. IN THES E CIRCUMSTANCES, WE DO NOT DEEM IT APPROPRIATE TO REMAND THE CASE ONLY ON A TECHNICAL PLEA IN ABSENCE OF ANY SUBSTANTIVE GRIEVANCE MADE OUT. THE REVENUES GROUNDS STAND REJECTED. 6. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 08 TH OF MAY, 2014, AT CHENNAI. SD/- SD/- ( . . . ) (DR. O.K. NARAYANAN) !!!!!'#$ / VICE-PRESIDENT ( . . ! ) (S. S. GODARA) % &' / JUDICIAL MEMBER (% / CHENNAI )& / DATED: 08 TH MAY, 2014 RD &*!! +,!-, / COPY TO: ! 1 . / APPELLANT ! 2. / RESPONDENT 3. ! .!/0 / CIT(A) 4. ! . / CIT 5. ,12! 3 / DR 6. 24!5 / GF