SACHIN H. DAWDA, THANE V. DCIT CIR 3, THANE

ITA 1558/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5037 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAVISH SOOD (JM) I.T.A. NO. 1558 /MUM/20 1 7 (ASSESSMENT YEAR 20 11 - 12 ) SACHIN H. DAWDA A - 48, KRANTI TOWER SECTOR - 9, SHREE NAGAR WAGLE ESTATE THANE(W) - 400 604. P AN : ABYPD6107A VS. DCIT CIRCLE - 3 ASHAR IT PARK 6 TH FLOOR ROAD NO. 16Z THANE ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI DINESH RASIKLAL SHAH DEPARTMENT BY S HRI NISHANT SOMAIYA DATE OF HEARING 4.10. 201 8 DATE OF PRONOUNCEMENT 10 . 10 . 201 8 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28 - 12 - 2016 PASSED BY LD CIT(A) - 2, THANE AND IT RELATES TO THE ASSESSMENT YEAR 2011 - 12. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDERED BY LD CIT(A) ON THE FOLLOWING ADDITIONS: - (A) ADDITION OF RS.8.00 LAKHS RELATING TO DIFFERENCE IN LOAN (B) ADDITION OF UNEXPLAINED BANK DEPOSITS RS.13,20,000/ - 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE DERIVES INCOME FROM PROFESSIONAL AND TECHNICAL SE RVICES. HE FILED HIS RETURN OF INCOME DECLARING NIL INCOME. THE SAME WAS TAKEN UP FOR SCRUTINY. THE FIRST ISSUE RELATES TO THE ADDITION OF RS.8.00 LAKHS. THE FACTS RELATING TO THE SAME ARE DISCUSSED IN BRIEF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE FILED DETAILS OF SECURED AND UNSECURED LOANS. THE ASSESSEE ALSO FURNISHED COPIES OF DEMAND PROMISSORY NOTES GIVEN FOR A PERSON NAMED SHRI K.R RAJA. THE ASSESSEE HAD GIVEN TWO PROMISSORY NOTES, ONE FOR RS.30.00 LAKHS AND ANOTHER ONE FOR RS. 19.40 LAKHS TO THE ABOVE NAMED PERSON. SINCE THE ASSESSEE SACHIN H. DAWDA 2 DID NOT FURNISH FURTHER DETAILS, THE AO ASSESSED THE AGGREGATE AMOUNT OF RS.49.40 LAKHS, REFERRED ABOVE, AS INCOME OF THE ASSESSEE RELATING TO UNEXPLAINED MONEY. 3. BEFORE LD CIT(A), THE ASSESS EE FURNISHED ALL THE DETAILS RELATING TO THE LOAN TAKEN FROM SHRI K.R RAJA. IT WAS SUBMITTED THAT THE ASSESSEES WIFE NAMED SMT. HEMA DAWDA HAS TAKEN A LOAN OF RS.22.00 LAKHS FROM SHRI K.R RAJA DURING THE FINANCIAL YEAR 2010 - 11 AND AS SECURITY TO THE SAME , THE ASSESSEE HAS GIVEN PROMISSORY NOTE FOR RS.30.00 LAKHS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD ALSO TAKEN A LOAN OF RS.19.40 LAKHS FROM SHRI K.R RAJA DURING THE FINANCIAL YEAR 2012 - 13 RELEVANT TO AY 2013 - 14, I.E., NOT DURING THE YEAR UNDER C ONSIDERATION AND HENCE ANOTHER PROMISSORY NOTE FOR RS.19.40 LAKHS WAS EXECUTED. 4. SINCE THE ASSESSEE HAS FURNISHED FRESH DETAILS, THE LD CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. DURING THE COURSE OF REMAND PROCEEDINGS, THE AO ISSUED NOTICE U/ S 133(6) OF THE ACT TO SHRI K.R RAJA. IN RESPONSE THERETO, THE ASSESSEE FURNISHED THE DETAILS OF LOAN OF RS.22.00 LAKHS AND RS.19.40 LAKHS GIVEN BY HIM. ACCORDINGLY THE AO EXPRESSED SATISFACTION TO THE LOAN OF RS.22.00 LAKHS AND RS.19.40 LAKHS. THE AO F URTHER REPORTED THAT THE ASSESSEE HAS NOT EXPLAINED THE DIFFERENCE OF RS.8.00 LAKHS (DIFFERENCE BETWEEN THE AMOUNT OF RS.30.00 LAKHS MENTIONED IN THE PROMISSORY NOTE AND RS.22.00 LAKHS CLAIMED TO HAVE BEEN ACTUALLY RECEIVED). ACCORDINGLY THE LD CIT(A) DEL ETED THE ADDITION TO THE EXTENT OF RS.41.40 LAKHS AND SUSTAINED THE ADDITION OF RS.8.00 LAKHS, REFERRED ABOVE, ON THE REASONING THAT THE ASSESSEE HAS NOT EXPLAINED THE SAME. 5. WE NOTICE THAT THE LOAN OF RS.22.00 LAKHS WAS OBTAINED BY ASSESSEES WIFE FROM SHRI K.R RAJA DURING THE YEAR UNDER CONSIDERATION. IT IS STATED THAT THE ASSESSEE HAS GIVEN PROMISSORY NOTE OF RS.30.00 LAKHS AS SECURITY TO THE LOAN TAKEN BY HIS WIFE. WE NOTICE THAT THE ASSESSING OFFICER HAS ACCEPTED THE GENUINENESS OF LOAN OF RS. 22.00 LAKHS, CONSIDERING THE CREDIT WORTHINESS OF SACHIN H. DAWDA 3 SHRI K.R RAJA. IT IS NOTICED BY AO THAT SHRI K.R RAJA IS WORKING AS SENIOR VICE PRESIDENT (FINANCE) IN RELIANCE INDUSTRIES LTD AND HIS INCOME LEVEL IS ALSO SUFFICIENT ENOUGH TO ADVANCE THE ABOVE SAID LOANS . EVEN THOUGH THE ASSESSEE CLAIMS THAT HIS WIFE HAS RECEIVED ONLY RS.22.00 LAKHS AS LOAN AND THE PROMISSORY NOTE WAS GIVEN BY HIM FOR AN AMOUNT OF RS.30.00 LAKHS, YET THE CREDITWORTHINESS OF THE LENDER JUSTIFIES THE LOAN AMOUNT OF RS.30.00 LAKHS. IN THIS VIEW OF THE MATTER THE ADDITION OF RS.8.00 LAKHS SUSTAINED BY LD CIT(A), IN OUR VIEW, IS NOT WARRANTED, SINCE THE IMPUGNED ADDITION OF RS.8.00 LAKHS, APPARENTLY, HAS BEEN MADE U/S 68 OF THE ACT. WE HAVE NOTICED THAT THE LOAN OF RS.22.00 LAKHS HAS BEEN TA KEN BY THE WIFE OF THE ASSESSEE. HENCE THE CAUSE OF ACTION, IF AT ALL WARRANTED, LIES IN THE HANDS OF THE WIFE OF THE ASSESSEE AND NOT IN THE HANDS OF THE ASSESSEE. IN THE INSTANT CASE, THERE IS NO EVIDENCE TO SHOW THAT THE AMOUNT OF RS.8.00 LAKHS WAS RE CEIVED EITHER BY THE ASSESSEE OR BY THE ASSESSEES WIFE. HENCE WE DO NOT FIND ANY JUSTIFICATION FOR SUSTAINING THE ADDITION OF RS.8.00 LAKHS IN THE HANDS OF THE ASSESSEE. ACCORDINGLY WE MODIFY THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AN DIRECT THE AO TO DELETE THE ADDITION OF RS.8.00 LAKHS, REFERRED ABOVE. 6. THE NEXT ISSUE RELATES TO THE UNEXPLAINED DEPOSIT OF RS.13.20 LAKHS MADE BY THE ASSESSEE INTO HIS BANK ACCOUNT. THE ASSESSEE EXPLAINED THE SOURCES OF THE ABOVE SAID DEPOSITS AS HIS PAST SAVING S OF RS.3.00 LAKHS AND MONEY INHERITED FROM HIS MOTHER ON HER DEATH OF RS.10.20 LAKHS. BOTH THE TAX AUTHORITIES DID NOT ACCEPT THE SAME AND HENCE THE ADDITION WAS MADE. 7. BEFORE US, THE ASSESSEE REITERATED THE VERY SAME SUBMISSIONS, WHILE THE LD D.R SUPPORTED THE ORDER PASSED BY LD CIT(A). THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS DECLARED SUFFICIENT INCOME IN THE EARLIER YEARS AND HENCE THE CLAIM OF SAVINGS MADE BY THE ASSESSEE SHOULD BE ACCEPTED. WE NOTICE FROM THE WRITTEN SUBMISSIONS THA T THE ASSESSEE HAS DECLARED TOTAL INCOME OF RS.9.56 LAKHS, RS.7.20 LAKHS AND RS.7.20 LAKHS RESPECTIVELY IN AY 2008 - 09 TO 2010 - 11. HENCE THE CLAIM OF SAVINGS OF RS.3.00 LAKHS FROM THE ABOVE SAID INCOME IS, IN OUR VIEW, REASONABLE. SACHIN H. DAWDA 4 8. WITH REGARD TO TH E CLAIM OF INHERITANCE OF RS.10.20 LAKHS FROM THE MOTHER OF THE ASSESSEE, WE NOTICE THAT THE ASSESSEE COULD NOT FURNISH ANY MATERIAL TO SUPPORT THE SAME. IT WAS SUBMITTED THAT THE MOTHER OF THE ASSESSEE HAS EXPIRED ON 04 - 02 - 2010 AND IT WAS CLAIMED THAT TH E MONEY SAVED BY HER WAS RECOVERED FROM HER ALMIRAH LATER. THE LD A.R SUBMITTED THAT THE INDIAN LADIES ARE IN THE HABIT OF SAVINGS PIN MONEY AND HENCE THE CLAIM OF THE ASSESSEE SHOULD BE ACCEPTED. 9. WE, HOWEVER, NOTICE THAT THE ASSESSEE HAS NOT BRO UGHT ANY MATERIAL ON RECORD TO SUPPORT HIS VIEW. AT THE SAME TIME, THE CLAIM OF THE ASSESSEE THAT HER MOTHER HAS SAVED MONEY DURING HER LIFE TIME CANNOT ALSO BE REJECTED ALTOGETHER. ACCORDINGLY WE ARE OF THE VIEW THAT THE SAVINGS THAT COULD HAVE BEEN MAD E BY HER MOTHER MAY BE ESTIMATED TO RESOLVE THIS ISSUE. ACCORDINGLY WE ARE OF THE VIEW THAT, IN THE FACTS OF THIS CASE, THE MONEY INHERITED FROM THE MOTHER OF THE ASSESSEE MAY BE ESTIMATED AT RS.5.00 LAKHS AND THE SAME CAN BE CONSIDERED AS SOURCE FOR THE DEPOSITS MADE BY THE ASSESSEE INTO HIS BANK ACCOUNTS. 10. ACCORDINGLY, OUT OF THE AGGREGATE AMOUNT OF DEPOSIT OF RS.13.20 LAKHS, THE SOURCES TO THE EXTENT OF RS.8.00 LAKHS, IN OUR VIEW, MAY BE CONSIDERED AS EXPLAINED. ACCORDINGLY WE SUSTAIN THE BALANC E ADDITION OF RS.5.20 LAKHS. WE ORDER ACCORDINGLY. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 10 . 10 .201 8 . SD/ - SD/ - (RAVISH SOOD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 10 / 10 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT SACHIN H. DAWDA 5 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. B Y ORDER, //TRUE COPY// ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMBAI