JIGNESH SURESHCHANDRA DESAI, MUMBAI V. ITO 32(2)(1), MUMBAI

ITA 1732/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9634 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Unexplained cash credit; Peak credit
• 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. 1732/MUM/2017 : A.Y : 2011 - 12 SHRI JIGNESH SURESHCHANDRA DESAI B - 501, MAHAVIR DARSHAN, LT ROAD, DAHISAR (E), MUMBAI 400 068 PAN : AACPD9842P (APPELLANT) VS. ITO 32(2)(1), MUMBAI (ERSTWHILE ITO - 25(1)(1)] (RESPONDENT) APPELLANT BY : SHRI BHUPENDRA SHAH RESPONDENT BY : MS. N. HEMALATHA DATE OF HEARING : 26/07/2017 DATE OF PRONOUNCEMENT : 22 /09/2017 O R D E R THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 44 , MUMBAI DATED 24.01.2017 , PERTAINING TO THE ASSESSMENT YEAR 2011 - 12 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 31.12.2013 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, ALTHOUGH ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY GRIEVANCE IS AGAINST THE ACTION OF THE CIT(A) IN 2 ITA NO. 1732/MUM/2017 SHRI JIGNESH SURESHCHANDRA DESAI SUSTAINING THE ADDITION OF RS.4,90,333/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS DERIVING INCOME FROM HOUSE PROPERTY, BROKERAGE INCOME AND INCOME UNDER THE HEAD OTHER SOURCES. IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE INSTANT ASSESSMENT YEAR, THE ASSESSING OFFICER REFERRED TO AN AIR INFORMATION SHOWING CASH DEPOSITS TOTALLING TO RS.15,73,800/ - MADE BY THE ASSESSEE IN THE SAVINGS BANK ACCOUNT MAINTAINED WITH NEW INDIA CO - OPERATIVE BANK LTD. ON BEING ASKED TO EXPLAIN, AS SESSEE POINTED OUT THAT HE IS MAINTAINING TWO SAVINGS BANK ACCOUNT; ONE WITH NEW INDIA CO - OPERATIVE BANK LTD. AND ANOTHER WITH DCB BANK . THE ASSESSEE SUBMITTED THAT THE CASH DEPOSITS WERE OUT OF AVAILABLE CASH IN HAND AND ALSO THE WITHDRAWALS MADE FROM TH E BANK ACCOUNTS. THE ASSESSING OFFICER, HOWEVER, MADE A PEAK CALCULATION OF THE DEPOSITS AND ADDED A SUM OF RS.4,90,333/ - TO THE RETURNED INCOME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. BEFORE THE CIT(A), ASSESSEE MADE DETAILED SUBMISSIONS, BOTH ON FACTS AND IN LAW, AND CONTENDED THAT THE ADDITION WAS NOT MAINTAINABLE. SUCH SUBMISSIONS OF THE ASSESSEE HAVE INDEED BEEN REPRODUCED BY THE CIT(A) IN PARA 4.2 OF HIS ORDER. THE CIT(A), HOWEVER, UPHELD THE ADDITION OF RS.4,90,333/ - MADE BY THE ASSESSING O FFICER , AS ACCORDING TO HIM , THE NATURE AND SOURCE OF THE CASH DEPOSITS HAVE NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE. AGAINST SUCH AN ACTION OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3 ITA NO. 1732/MUM/2017 SHRI JIGNESH SURESHCHANDRA DESAI 4. BEFORE ME, THE LEARNED REPRESENTAT IVE FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT BOTH THE LOWER AUTHORITIES HAVE NOT APPRECIATED THE FACTS IN THE PROPER PERSPECTIVE INASMUCH AS ASSESSEE WAS MAINTAINING A REGULAR CASH BOOK AND DURING THE ENTIRE YEAR HAD ENOUGH CASH BALANCE TO JUSTIFY THE DEPOSITS IN THE BANK ACCOUNT. THE LEARNED REPRESENTATIVE POINTED OUT THAT THE SAID ASPECT HAS NOT BEEN CONSIDERED AND THE EXPLANATION FURNISHED BY THE ASSESSEE HAS BEEN UNJUSTLY REJECTED BY THE LOWER AUTHORITIES . 5. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE CONTENDED THAT MERELY BECAUSE THERE WAS ADEQUATE CASH BALANCE IN THE CASH BOOK WOULD NOT JUSTIFY THE DEPOSITS AND, THEREFORE, THE ADDITION HAS BEEN RIGHTLY MADE BY THE LOWER AUTHORITIES ON THE BASIS O F THE PEAK CREDIT OF DEPOSITS. 6. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. HAVING PERUSED THE ORDERS OF THE AUTHORITIES BELOW, IT CLEARLY EMERGES THAT THE EXPLANATION OF THE ASSESSEE HAS BEEN COMPLETELY BRUSHED ASIDE WITHOUT ESTABLISHING ANY IN FIRMITY. NOTABLY, ASSESSEE HAS BEEN CONSISTENTLY ASSERTING THAT THE CASH DEPOSITS IN THE BANK ACCOUNT ARE OUT OF CASH IN HAND AVAILABLE, WHICH WAS JUSTIFIED WITH REFERENCE TO THE DAILY CASH BOOK MAINTAINED. THE CIT(A) HAS MADE A BLAND ASSERTION THAT THE CASH DEPOSITS ARE NOT FULLY EXPLAINED BY PERUSAL OF THE ENTRIES IN THE CASH BOOK, BUT THERE IS NO REASON POINTED OUT FOR NOT ACCEPTING THE ENTRIES MADE IN THE CASH BOOK. THEREFORE, CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIN D THAT THE ADDITION HAS BEEN MADE 4 ITA NO. 1732/MUM/2017 SHRI JIGNESH SURESHCHANDRA DESAI ON MERE SURMISES AND CONJECTURES, WHICH IS HEREBY DIRECTED TO BE DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 N D SEPTEMBER , 2017. SD/ - ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 2 2 N D SEPTEMBER , 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