SUBHASH JAIN, MUMBAI V. ITO 22(2)(2), NAVI MUMBAI

ITA 178/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0677 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KIRIT SHETH LD
• Keywords: Gift; Additional evidence; Onus to prove
• Section: 143(3)

Judgement Text

ITA NO.178/M/2017 SUBHASH JAIN ASSESSMENT YEAR-2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO. 178/MUM/2017 ( ASSESSMENT YEAR: 2010-11) SUBHASH JAIN SURABHI JEWELLERS SHOP NO.9 PAREKH BUILDING N.R. ACHARYA MARG CHEMBUR MUMBAI 400 071 VS. INCOME TAX OFFICER 22(2)(2) VASHI IT OFFICE 4 TH FLOOR TOWER NO.6 VASHI NAVI MUMBAI PAN/GIR NO. AABPJ-3821-D ( APPELLANT ) : ( !' RESPONDENT ) A SSESSEE BY : KIRIT SHETH, LD. AR RE VENUE BY : NAVEEN GUPTA, LD. DR # $ DATE OF HEARING : 04/05/2017 %&' $ / DATE OF PRONOUNCEMENT : 12/05/2017 ITA NO.178/M/2017 SUBHASH JAIN ASSESSMENT YEAR-2010-11 2 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSME NT YEAR [AY] 2010- 11 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOM E TAX (APPEAL)-25, [CIT(A)], MUMBAI DATED 01/11/2016 BY RAISING FIVE G ROUNDS OF APPEAL. GROUND NO. 5 IS GENERAL IN NATURE. GROUND NO. 1 & 3 HAS NOT BEEN PRESSED BY LD. COUNSEL FOR THE ASSESSEE DURING PROC EEDINGS BEFORE US AND HENCE THE SAME ARE BEING DISMISSED AS NOT PRESSED. NOW, WE PROCEED TO DISPOSE-OFF GROUND NO. 2 & 4 WHICH ARE R ELATED WITH CONFIRMATION OF CERTAIN CASH CREDIT OF RS.71,05,742/- AND DIRECTION BY LD. CIT(A) TO INITIATE PENALTY PROCEEDINGS. 2. BRIEFLY STATED THE ASSESSEE, BEING RESIDENT IN DIVIDUAL ENGAGED IN THE BUSINESS OF MOBILES , WAS ASSESSED FOR IMPUGNED AY U/S 143(3) AT RS.1,76,01,400/- AFTER CERTAIN ADJUSTMENTS / DISALL OWANCES VIDE ASSESSING OFFICER [AO] ORDER DATED 20/03/2013 AS AG AINST RETURNED INCOME OF RS.9,43,400/- FILED BY ASSESSEE ON 01/07/ 2010. THE ISSUE UNDER DISPUTE IS RELATED WITH CASH DEPOSIT OF RS.89 .78 LACS IN ONE OF THE CURRENT ACCOUNT MAINTAINED BY THE ASSESSEE WITH SYNDICATE BANK . THE ASSESSEE ATTRIBUTED THE SAME AS RECEIPT OF LOANS WH ICH WERE ADVANCED BY THE ASSESSEE IN EARLIER YEARS. TO VERIFY THE SAM E, THE ASSESSEE WAS ASKED TO PRODUCE CAPITAL ACCOUNT AND BALANCE SHEET OF THE LAST TWO PRECEDING YEARS WHICH HE FAILED TO DO SO WHICH LED THE AO TO BELIEVE THAT THE ASSESSEE FAILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS ITA NO.178/M/2017 SUBHASH JAIN ASSESSMENT YEAR-2010-11 3 OF THESE CASH CREDITS AND ADDED THE SAME TO THE INC OME OF THE ASSESSEE. 3. THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUC CESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 01/11/2016 WHERE T HE ASSESSEE CONTENDED THAT CASH OF RS.9,62,258/- WAS DEPOSITED OUT OF OPENING CASH BALANCE OF RS10,29,556/- HELD BY THE ASSESSEE AND F URTHER THERE WAS A CASH WITHDRAWAL OF RS.42.25 LACS WHICH WAS RE-DEPOS ITED AND A SUM OF RS.28,80,742/- WAS RECEIVED FROM SURBHI JEWELERS PROP. BHANWARIBAI JAIN AGAINST LOAN ADVANCED BY ASSESSEE IN EARLIER YEARS. THE BALANCE AMOUNT OF RS.9.10 LACS WAS ATTRIBUTED TO GIFT RECEI VED BY THE ASSESSEE. THE ASSESSEE, DURING REMAND PROCEEDINGS , SUBMITTED BALANCE SHEET AND LOAN CONFIRMATION FROM ASSESSEES MOTHER BHANWARIBAI JAIN PROP. SURBHI JEWELLERS TO ESTABLISH REPAYMENT OF LOAN. HOWEVER, LD. CIT(A ) NOTED VARIOUS DISCREPANCIES IN ASSESSEES SUBMISSIO NS AND AFTER ANALYZING CASH TRANSACTION PATTERN OF THE ASSESSEE WAS NOT FULLY SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE. FINAL LY, AFTER APPRECIATING THE REMAND REPORT, SUBMISSIONS OF THE ASSESSEE AND MATERIAL ON RECORD, THE LD. CIT(A) PROVIDED RELIEF TO THE EXTENT OF RS. 18.72 LACS AGAINST OPENING CASH BALANCE FOR RS.9.62 LACS AND CASH GIFT OF RS.9.10 LACS RECEIVED BY THE ASSESSEE DURING THE YEAR AND CONFIR MED BALANCE ADDITION OF RS.71.06 LACS, AGAINST WHICH THE ASSESS EE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR], WHILE PLACING VARIOUS DOCUMENTS IN THE PAPER-BOOK, CONTENDED THAT THE ASSESSEE MADE CASH WITHDRAWALS OF MORE THAN RS.42 LACS FROM THE SAID A CCOUNT AND RE- ITA NO.178/M/2017 SUBHASH JAIN ASSESSMENT YEAR-2010-11 4 DEPOSITED THE SAME, THE BENEFIT OF WHICH HAS NOT BE EN GIVEN TO THE ASSESSEE AND THE SAME IS UNJUSTIFIED. THEREFORE, TH E ADDITIONS, IF ANY, WHICH ARE TO BE MADE, SHOULD BE TO THE EXTENT OF PE AK CASH DEFICIT ONLY AS PER THE BOOKS OF ACCOUNTS OF THE ASSESSEE. TO SU PPORT THE SAME, THE LD. AR PRODUCED BEFORE US PEAK CASH DEFICIT WORKING (CASH BOOK) FROM 01/04/2009 TO 31/03/2010. IT WAS FURTHER CONTENDED THAT THE ASSESSEE RECEIVED BACK LOAN OF RS.27.54 LACS ADVANCED BY HIM TO SURBHI JEWELERS PROP. BHANWARIBAI JAIN IN EARLIER YEARS, A DULY SIGNED CONFIRMATION OF ACCOUNTS OF WHICH WAS IN THE POSSESSION OF THE ASS ESSEE. THE LD. AR FAIRLY CONTENDED THAT AS THE ASSESSEE WAS IN POSSES SION OF SUFFICIENT EVIDENCES TO SUBSTANTIATE HIS CLAIM, HE MAY BE PROV IDED ANOTHER OPPORTUNITY TO DEMONSTRATE THE SAME BEFORE LD. AO. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE ASSESSEE MADE HEAVY DEPOSIT IN THE BANK ACCOUNT BUT STILL COULD NOT SUBSTANTIATE THE SAME DESPITE BEING PROVIDED WITH S EVERAL OPPORTUNITIES. THE ASSESSE ALSO FAILED TO PRODUCE ITS FINANCIAL ST ATEMENTS FOR THE PAST TWO YEARS AS PER THE REQUEST OF LD. AO WHICH CAST S ERIOUS DOUBT ON THE SUBMISSIONS MADE BY THE ASSESSEE. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED RELE VANT MATERIAL ON RECORD. THE ASSESSEE HAS PLACED CONFIRMATION OF ACCOUNT FROM SURBHI JEWELERS AND PEAK CASH DEFICIT WORKING IN THE PAPER-BOOK WHICH LEND, FEEBLE SUPPORT TO VARIOUS ARGUMENTS OF THE ASSESSEE . NO DOUBT, THE ONUS TO PROVE THE CASH CREDIT SQUARELY LIED ON THE ASSESSEE BUT HE HAS FAILED TO PROVE THE SAME CONCLUSIVELY. HOWEVER, SIN CE THE MATTER IS A FACTUAL ONE AND MATTER OF RECONCILIATION ONLY, IN T HE INTEREST OF JUSTICE, WE ITA NO.178/M/2017 SUBHASH JAIN ASSESSMENT YEAR-2010-11 5 SEE NO HARM IN PROVIDING ANOTHER OPPORTUNITY TO ASS ESSEE TO SUBSTANTIATE HIS CLAIM BEFORE LD. AO BY ADDUCING SU FFICIENT EVIDENCES IN THIS REGARD. THEREFORE, WE DEEM IT FIT TO RESTORE T HE MATTER BACK TO THE FILE OF LD. AO TO RE-APPRECIATE THE ADDITIONAL EVIDENCES IN THE FORM OF CONFIRMATION OF ACCOUNTS AND PEAK CASH DEFICIT W ORKING SUBMITTED BY THE ASSESSEE VIS--VIS HIS FINANCIAL STATEMENTS FOR THE LAST COUPLE OF YEARS. THE ASSESSEE IS ALSO DIRECTED TO SUBSTANTIAT E HIS CLAIM IN THIS REGARD BY PRODUCING NECESSARY DOCUMENTS / INFORMATI ON FORTHWITH FAILING WHICH THE LD. AO SHALL BE AT LIBERTY TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. RESULTANTLY, THE A SSESSEES GROUND OF APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 7. IN GROUND NO.4, THE ASSESSEE IS AGGRIEVED BY DIR ECTIONS GIVEN BY LD. CIT (A) FOR INITIATION OF PENALTY FOR VIOLATION OF SECTION 269SS / 269T. SINCE, THE PENALTY PROCEEDINGS ARE SEPARATE, THE SA ME MAY BE AGITATED BY THE ASSESSEE AT APPROPRIATE LEVEL AND OUR INTERF ERENCE, AT THIS STAGE IS NOT REQUIRED. THEREFORE, THE SAME IS DISMISSED. 8. IN NUTSHELL THE ASSESSEES APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2017. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER (# MUMBAI; DATED : 12.05.2017 SR.PS:- THIRUMALESH ITA NO.178/M/2017 SUBHASH JAIN ASSESSMENT YEAR-2010-11 6 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) / THE CIT(A) 4. ) / CIT CONCERNED 5. *+ !$, , ' (# / DR, ITAT, MUMBAI 6. +-. /# GUARD FILE ! / BY ORDER, ' !# $ (DY./ASSTT. REGISTRAR) (# / ITAT, MUMBAI