DILIP M. KEJRIWAL, MUMBAI V. ITO 14(2)(3), MUMBAI

ITA 1372/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9732 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 1372/MUM/2017 : A.Y : 2010 - 11 SHRI DILIP M. KEJRIWAL (PROP. M/S. PRIYA INTERNATIONAL) 413, COTTON EXCHANGE BUILDING, KALBADEVI ROAD, MUMBAI 400 002. PAN : AABPK9487E (APPELLANT) VS. ITO 14(2)(3), MUMBAI (RESPONDENT) APPELLANT BY : SHRI HARESH P. SHAH RESPONDENT BY : MS. N. HEMALATHA DATE OF HEARING : 24/07/2017 DATE OF PRONOUNCEMENT : 31 /07/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 29 , MUMBAI DATED 29.12.2016 , PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 25.3.2013 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE SOLITARY DISPUTE RAISED BY THE ASSESSEE IS WITH REGARD TO AN ADDITION OF RS.16,63,984/ - SUSTAINED BY THE CIT(A) IN TERMS 2 SHRI DILIP M. KEJRIWAL ITA NO. 1372/MUM/2017 OF SEC. 68 OF THE ACT. IN BRIEF, THE RE LEVANT FACTS ARE THAT THE APPELLANT IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF DEALING IN COPPER AND OTHER METALS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THERE WAS CASH DEPOSIT S OF RS.16,63,800/ - ON VARIOUS DATES IN ASSESSEES BANK ACCOUNT MAINTAINED WITH UNION BANK OF INDIA, KALBADEVI BRANCH, MUMBAI. ON BEING SHOW - CAUSED, ASSESSEE EXPLAINED THE SOURCE OF CASH DEPOSITS AS BEING OUT OF CASH OR CHEQUE WITHDRAWALS MADE FROM THE BA NK. THE EXPLANATION FURNISHED BY TH E ASSESSEE WAS NOT FOUND SATISFACTORY BY THE ASSESSING OFFICER AND HE ADDED A SUM OF RS. 16,63,984/ - AS UNEXPLAINED DEPOSITS/CREDITS U/S 68 OF THE ACT. NOTABLY, THE ASSESSING OFFICER ALSO NOTED THAT SIMILAR ADDITION WAS MADE IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 WHICH HAD SINCE BEEN UPHELD BY THE CIT(A) ALSO. IN THIS BACKGROUND, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO ALSO SUSTAINED THE ADDITION. PERTINENTLY, THE CIT(A) REFERRED T O THE DECISION OF HER PREDECESSOR FOR THE ASSESSMENT YEAR 2007 - 08 DATED 2.1.2017 IN THE CASE OF THE ASSESSEE WHILE UPHOLDING THE ADDITION. NOT BEING SATISFIED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3. BEFORE ME, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE EXPLANATIONS FURNISHED BY THE ASSESSEE HAVE BEEN UNJUSTLY REJECTED . IN TH IS CONTEXT, HE REFERRED TO THE T ABULATION SHOWING THE CASH DEPOSITS IN UNION BANK OF INDIA AND THE DETAILS OF PAYMENT S MADE FROM SUCH BANK . THE LEARNED REPRESENTATIVE ALSO DREW MY ATTENTION TO ANOTHER T ABULATION WHICH SHOWED CASH WITHDRAWALS AND DEPOSITS FROM 3 SHRI DILIP M. KEJRIWAL ITA NO. 1372/MUM/2017 ALL OTHER BANK ACCOUNTS MAINTAINED BY THE ASSESSEE AND ASSERTED THAT ON CONSIDERATION OF THE SAME, THE IMPUGNED DEPOSITS IN THE UNION BANK OF INDIA STAND ADEQUATELY EXPLAINED. IN ANY CASE, THE LEARNED REPRESENTATIVE SUBMITTED THAT ASSESSEE WOULD BE SATISFIED AT THE PRESENT STAGE IF THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR APPRECIATION OF THE RELEVANT MATERIAL CONSIDERING THAT IN ASSESSMENT YEAR 2007 - 08 ALSO, THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES HAS RESTORED THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. IN PARTICULAR, MY ATTENTION HAS BEEN DRAWN TO THE FOLLOWING DISCUSSION IN T HE ORDER OF THE TRIBUNAL DATED 2.1.2017 (SUPRA) : - 9. WE HAVE HEARD THE PARTIES ON THIS ISSUE. WE NOTICE THAT THE ASSESSEE HAS EXPLAINED THE SOURCES OF CASH DEPOSITS MADE INTO THE BANK ACCOUNT AS THE BOOK BALANCE AVAILABLE IN THE BOOKS OF ACCOUNTS. HE HAS ALSO SUBMITTED THAT THE BOOK BALANCE WAS CREATED BY WITHDRAWING FUNDS FROM THE BANK ACCOUNTS. WE NOTICE THAT THE AO HAS NOT EXAMINED THE EXPLANATIONS OF THE ASSESSEE VIS - A - VIS THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THA T THE IMPUGNED BANK ACCOUNT WAS MAINTAINED OUTSIDE THE BOOKS OF ACCOUNTS. ACCORDING TO THE ASSESSEE, THE EARLIER WITHDRAWALS MADE FROM THE BANK ACCOUNT WAS USED TO MAKE DEPOSITS SUBSEQUENTLY. ACCORDING TO THE ASSESSEE BOTH THE WITHDRAWALS AND DEPOSITS HAVE BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE TAX AUTHORITIES SHOULD NOT HAVE IGNORED THE BOOKS OF ACCOUNTS BEFORE DECIDING THIS ISSUE AGAINST THE ASSESSEE, PARTICULARLY IN V IEW OF THE FACT THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED BY THEM. 10. IN VIEW OF THE FOREGOING REASONS, WE ARE OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXAMINATION AT THE END OF THE AO BY DULY CONSIDERING THE BOOKS OF ACCOUNTS AND OTHER EX PLANATIONS FURNISHED BY THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD 4 SHRI DILIP M. KEJRIWAL ITA NO. 1372/MUM/2017 CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE SAME AFRESH IN THE LIGHT OF DISCUSSIONS MADE SUPRA . 4. ON THE OTHER H AND, THE LD. DR APPEARING FOR THE REVENUE DID NOT OPPOSE THE PLEA OF THE ASSESSEE FOR REMANDING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH IN THE LIGHT OF THE DECISION OF THE TRIBUNAL DATED 2.1.2017 (SUPRA). 5. I HAVE CAR EFULLY CONSIDERED THE RIVAL STANDS AND FIND THAT THE DECISION OF THE TRIBUNAL DATED 2.1.2017 (SUPRA) IN RELATION TO THE ASSESSMENT YEAR 2007 - 08 HAS BEEN RENDERED IN SOMEWHAT SIMILAR CIRCUMSTANCES. IN THE ASSESSMENT YEAR 2007 - 08 ALSO, THE PRIMARY DISPUTE R ELATED TO SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNT, WHICH IS SIMILAR TO THE DISPUTE IN THIS YEAR. IN ASSESSMENT YEAR 2007 - 08 ALSO, ONE OF THE PLEA RAISED BY THE ASSESSEE WAS THAT THE DEPOSITS WERE OUT OF FUNDS WITHDRAWN FROM OTHER BANK ACCOUNTS AN D ALSO AS PER THE CASH BALANCE AVAILABLE IN THE BOOKS OF ACCOUNT. THE EXPLANATION OF THE ASSESSEE REMAINS THE SAME IN THIS YEAR TOO. FURTHERMORE, IT IS ALSO CLEAR THAT THE ORDER S OF THE AUTHORITIES BELOW DO NOT BRING OUT ANY POSITIVE FINDING WITH RESPECT TO THE EXPLANATION FURNISHED BY THE ASSESSEE. BE THAT AS IT MAY, I DEEM IT FIT AND PROPER TO SET - ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO EXAMINE AFRESH THE EXPLANATION FURNISHED BY THE ASSESSEE KEEPING IN MIND THE DIRECTION S OF THE TRIBUNAL IN ORDER DATED 2.1.2017 (SUPRA) WHICH HAS BEEN RENDERED UNDER SIMILAR CIRCUMSTANCES. 5 SHRI DILIP M. KEJRIWAL ITA NO. 1372/MUM/2017 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 S T JULY, 2017. SD/ - ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 3 1 S T JULY, 2017 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, SMC BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI