KIRTI PRATAPRAI DESAI, MUMBAI V. ITO 24(2)(2), MUMBAI

ITA 1655/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93030 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 23-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACCHIDANAND DUBEY
• Keywords: Business income
• Section: 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' I ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA , ACCOUNTANT MEMBER ITA NO. 1655/MUM/2011 (ASSESSMENT YEAR: 2006007 ) SHRI KIRTI PRATAPRAI DESAI VS. A C I T - 24(2)(2) 4, VINOD PREMJI PATEL CHAWL NO . 01, ORLUM TANK RD. MALAD (W), MUMBAI 400064 BANDRA KURLA COMPLEX MUMBAI PAN - AGPPD6438E APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI SACCHIDANAND DUBEY DATE OF HEARING: 23.06. 2015 DATE OF PRONOUNCEMENT: 23.06.2015 O R D E R PER SANJAY ARORA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) - 34, MUMBAI AND IT PERTAINS TO A.Y. 2006 - 07. 2. ADDITION OF ` 20,83,621/ - , MADE BY THE AO UNDER SECTION 68 OF THE ACT IS SUBJECT MATTER OF DISPUTE BEFORE US. 3. THOUGH NOTICES WERE SENT TO THE ASSESSEE FROM TIME TO TIME, NONE APPEARED ON BEHALF OF THE ASSESSEE. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL EXPARTE, QUA ASSESSEE. THE FACTS OF THE CASE REVOLVE IN A NARROW COMPASS. ASSESSEE IS EN GAGED IN RETAIL TRADE AND FOR THE YEAR UNDER CONSIDERATION HE DECLARED BUSINESS INCOME OF ` 55,341/ - AND INCOME FROM OTHER SOURCES AT ` 20,433/ - . THOUGH THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT, IT WAS LATER ON TAKEN UP FOR SCRUTINY BY ISSUIN G NOTICE UNDER SECTION 143(2) OF THE I.T. ACT, 1961. IT MAY BE NOTICED THAT , AS PER AIR DATA AVAILABLE WITH THE AO , ASSESSEES SAVING BANK ACCOUNT NO. 16865 CONTAINED A DEPOSIT OF ` 20,84,621/ - IN SARASWAT CO - OP. BANK LTD. (EARLIER KNOWN AS MANDVI CO - OP. BA NK LTD.). THEREFORE, THE CASE WAS SELECTED FOR SCRUTINY UNDER ITA NO. 1655/MUM/2011 SHRI KIRTI PRATAPRAI DESAI 2 CA SS AND THE ASSESSEE WAS CALLED UPON TO FURNISH THE NATURE AN D SOURCE OF THE DEPOSIT. NOTICE WAS ISSUED ON 24.10.2007 CALLING UPON THE ASSESSEE TO APPEAR IN PERSON ON 14.11.2007 AND THEREAFTER FIVE MORE OPPORTUNITIES WERE GIVEN BUT NONE APPEARED FOR THE ASSESSEE. UNDER THESE CIRCUMSTANCES THE AO PROCEEDED TO MAKE AN EXPARTE ASSESSMENT ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. IN THIS REGARD HE OBSERVED THAT THE BANK ACCOUNT WAS NOT DECLA RED EITHER IN THE RETURN OF INCOME OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HENCE HE HAS NO CHOICE EXCEPT TO HOLD THAT THE CASH DEPOSIT OF ` 20,84,621/ - IS LIABLE TO BE ADDED UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CASH DEPOSIT. ASSESSMENT WAS COMPLETED ACCORDINGLY. 4. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE CASH DEPOSITS IN THE SAVING BANK ACCOUNT ARE AGAINST THE SALES MADE BY THE ASSESSEE AND THE PAYMENTS MADE ARE FOR THE PURCHASES MADE FOR THAT BUSINESS ONLY AND HENCE THE ADDITI ON UNDER SECTION 68 OF THE ACT IS NOT MAINTAINABLE. HE FURTHER SUBMITTED THAT THE INCOME OF THE ASSESSEE WAS COMPUTED BY CONSIDERING ALL BANK ACCOUNTS OPERATED IN HIS NAME; PHOTOCOPY OF BANK STATEMENT/PASS BOOKS WERE SUBMITTED AT THE TIME OF ASSESSMENT PRO CEEDINGS ALONG WITH VARIOUS LOAN CONFIRMATIONS. IT WAS FURTHER SUBMITTED THAT SECTION 68 CANNOT BE INVOKED FOR THE ENTRIES IN THE BANK STATEMENT. BEFORE THE LEARNED CIT(A) IT WAS CONTENDED THAT THE BANK ACCOUNT WAS OPENED ONLY ON 4 TH APRIL, 2006 AND HENCE THE QUESTION OF ANY CASH DEPOSIT IN THE SAID ACCOUNT DURING F.Y. 2005 - 06 DOES NOT ARISE. COPY OF THE BANK ACCOUNT WAS SAID TO HAVE BEEN SUBMITTED BEFORE THE CIT(A) WHICH REFLECTED THE FIRST DEPOSIT OF ` 500/ - ON 4 TH APRIL, 2006. 5. THE LEARNED CIT(A) OBSERVED THAT AS PER THE AIR INFORMATION , DEPOSIT HAVING BEEN MADE IN CASH IN THE SB ACCOUNT NO. 16865 IN SARASWAT CO - OP. BANK LTD. AND ASSESSEE HAVING NOT PLACED ANY MATERIAL TO CONTRADICT THE FINDINGS OF THE AO, THE AO WAS JUSTIFIED IN MAKING THE ADDITION. 6. FURTHE R AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. NONE APPEARED FOR THE ASSESSEE. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE CIT(A) AS WELL AS THE AO. THE ONLY BASIS FOR MAKING THE IMPUGNED ADDITION IS THE AIR INFORMATION WHEREAS THE ASSESSEE, BEFORE THE LE ARNED CIT(A), SUBMITS THAT ITA NO. 1655/MUM/2011 SHRI KIRTI PRATAPRAI DESAI 3 THE SAID ACCOUNT WAS OPENED ONLY ON 4 TH APRIL, 2006. SINCE THE DATE OF OPENING OF THE BANK ACCOUNT GOES TO THE ROOT OF THE MATTER, WE CALLED UPON THE LEARNED D.R. TO FURNISH THE DETAILS IN THE POSSESSION OF THE AO. THE LEARNED D. R. COULD NOT FURNISH ANY MATERIAL. IN FACT BEFORE THE LEARNED CIT(A) THE ASSESSEE CATEGORICALLY SUBMITTED THAT THE ACCOUNT WAS OPENED ONLY ON 4 TH APRIL, 2006 AND WITHOUT BRINGING ON RECORD ANY MATERIAL TO CONTRADICT THE STATEMENT OF THE ASSESSEE HE MERELY PROCEEDED TO UPHO LD THE ADDITION ON THE GROUND THAT THE AO HAS GIVEN SUFFICIENT OPPORTUNITY AND THE ASSESSEE HAVING NOT AVAILED THOSE OPPORTUNITIES, THE INFORMATION IN THE POSSESSION OF THE AO CANNOT BE SAID TO BE WRONG OR IT PERTAINS TO SOME OTHER PERSON. 7. WE MAY STATE HERE THAT THE TRIBUNAL IS THE FINAL FACT FINDING AUTHORITY AND IT IS FOR THE PARTIES TO PRODUCE BEFORE US THE BASIS UPON WHICH AN ADDITION IS MADE. THE ONUS IS UPON THE REVENUE TO PROVE THAT THE ADDITION IS BASED ON COGENT MATERIAL WHICH , IN THE INSTANT C ASE , IS SUPPOSED TO BE THE AIR INFORMATION. SINCE THE SAID DOCUMENT IS NOT PLACED BEFORE US , IT IS DIFFICULT TO COME TO ANY CONCLUSION AS TO WHETHER THERE IS ANY OTHER BANK ACCOUNT IN THE NAME OF THE ASSESSEE DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESS MENT YEAR UNDER CONSIDERATION, HAVING A CREDIT OF ` 20,83,621/ - . IN THE INTEREST OF SUBSTANTIAL JUSTICE WE SET ASIDE THE MATTER TO THE FILE OF THE AO, WHO IS DIRECTED TO BRING ON RECORD THE INFORMATION AVAILABLE WITH HIM TO CONCLUSIVELY PROVE THAT THE DEPOS IT WAS MADE IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE THE ORDER PASSED BY THE LEARNED CIT(A) IS SET ASIDE AND THE AO IS DIRECTED TO RECONSIDER THE MAT T ER AFTER REANALYSING THE CLAIM OF THE ASSESSEE. 8. IN THE RESULT, A PPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2015. SD/ - SD/ - ( D. MANMOHAN ) (SANJAY ARORA) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 23 RD JUNE, 2015 ITA NO. 1655/MUM/2011 SHRI KIRTI PRATAPRAI DESAI 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 34 , MUMBAI 4. THE CIT 24 , MUMBAI CITY 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.