LATE SHRI JAMAL AHMED HAIDER, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 1937/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100916 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2014
• Court: TRIBUNAL
• Department Lawyers: NEELIMA V NADKARNI
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 1937/M/2014 (AY:2007 - 200 8 ) LATE SHRI JAMAL AHMED HAIDER (THROUGH HIS LEGAL HEIR SMT. NARGIS J.A. SHAIKH), SHOP NO.12, ABBA APARTMENT, OLD S.V. ROAD, JOGESHWARI (W), MUMBAI 400 102. / VS. ITO 19(3)(2), AAYAKAR BHAVAN, M.K. MARG, NEW MARINE LINES, MUMBAI 400 020. ./ PAN : AAIPS9269H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DHIRENDRA M. SHAH / RESPONDENT BY : MS. NEELIMA V. NADKARNI, DR / DATE OF HEARING : 07.7 .2015 / DATE OF PRONOUNCEMENT : 04. 9 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 21.3.2014 IS AGAINST THE ORDER OF THE CIT (A) - 18, MUMBAI DATED FOR THE AY 2007 - 2008 FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUND WHICH READS AS UNDER: THE HONBLE CIT (A) - 18, MUMBAI ERRED IN LAW AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN CONFIRMING AN ALLEGED ADDITION OF RS. 10,22,250/ - AS UNEXPLAINED CASH CREDIT U/S 68. THE ENTIRE ALLEGED ADDITION BE DELETED. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TAILORING WORKS AND FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 2,31,788/ - . AFTER SCRUTINY, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND T HE ASSESSED INCOME WAS DETERMINED AT RS. 11,83,540/ - . IN THE ASSESSMENT, AO MADE ADDITION OF RS. 10,22,250/ - U/S 68 OF THE ACT. THE BACKGROUND TO THIS ADDITION IS THAT DURING THE ASSESSMENT PROCEEDINGS, AO ANALYZED THE BANK ACCOUNTS OF THE ASSESSEE WITH ICICI BANK AND CENTRAL BANK OF INDIA AND NOTICED THE CASH DEPOSITS IN BOTH THE SAVINGS BANK (SB) ACCOUNTS. AO PROCEEDED TO ANALYSE THE SAID CASH DEPOSITS AND FOUND THE TOTAL CASH DEPOSITS IN BOTH THE ACCOUNTS WITH ICICI 2 AND CENTRAL BANK OF INDIA WORKS OUT TO RS. 17,26,300/ - IE RS. 16,36,000/ - IN ICICI BANK ACCOUNT AND RS. 90,000/ - WITH CENTRAL BANK OF INDIA ACCOUNT. AFTER TAKING INTO CONSIDERATION THE RECEIPT OF RS. 7,04,050/ - , THE BALANCE OF RS. 10,22,250/ - WAS ADDED U/S 68 OF THE ACT. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE FURNISHED SOME DETAILS OF THE BANK DEPOSITS, CASH FLOW STATEMENT AND A COPY OF THE CASH BOOK AND ATTEMPTED TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS . AFTER REMANDING THE SAID PAPERS TO THE AO AND OBTAINING THE REMAND REPORT, CIT (A) CONFIRMED THE ADDITION MADE BY THE AO. IN THE REMAND REPORT, AO MENTIONED THAT THE ASSESSEE DID NOT APPEAR BEFORE HIM DESPITE THE NOTICE BY SPEED POST. CONSIDERING THE ASSESSEES FAILURE TO DISCHARGE THE ONUS, AO RECOMMENDED FOR DISMISSING THE ADDITIONAL EVIDENCES FURNISHED BEFORE THE CIT (A). IN PARA 1.3 OF THE IMPUGNED ORDER, THE CIT (A) HELD THAT IN SUCH CIRCUMSTANCES, WHERE THE ASSESSEE FAILED TO DISCHARGE THE ONUS, THE ADDITION MADE BY THE AO IS REQUIRED TO BE CONFIRMED. BUT THE FACT IS THAT THE DETAILS FURNISHED BY THE ASSESSEE BEFORE THE CIT (A) WERE NOT EXAMINED ON MERITS. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUN D. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TOTAL CASH WITHDRAWALS AND OTHER AVAILABLE CASH BY VIRTUE OF AGRICULTURAL INCOME AND OTHE RS WORKS OUT TO RS. 18,68,067/ - . BUT THE CASH DEPOSITED INTO THE BANK ACCOUNTS IS LESS THAN THE ABOVE. LD COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE CASH CLOSING BALANCE IS RS. 1,59,767/ - . FURTHER, HE ALSO FILED A COPY OF THE BANK ACCOUNTS AND SUBMITTED THAT CONSIDERING THE AVAILABILITY OF EXCESS CASH, THERE IS NO NEED FOR MAK ING ADDITION. FURTHER ALSO, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS NOT THE CASE OF THE AO THAT THE CASH AVAILABLE WITH THE ASSESSEE WAS INVESTED ELSEWHERE OUTSIDE THE BANK ACCOUNTS. MERELY BECAUSE THE ASSESSEE COULD NOT APPEAR BEFORE THE REVENU E AUTHORITIES, SUCH HUGE ADDITION CANNOT BE MADE ON A SMALL BUSINESSMAN LIKE THE ASSESSEE WHO IS ENGAGED IN TAILORING WORKS. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF THE AO AND THE CIT (A) AND MENTIONED THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS AND THEREFORE, THE DECISION TAKEN BY THE REVENUE AUTHORITIES IS CORRECT. 3 6. ON HEARING BOTH THE PARTIES, I FIND THAT THIS IS A CASE WHERE THE ASSESSEE IS ENGAGED IN TAILORING BUSINESS AND HE HAS GOT ADEQUATE CASH BALANCE FO RM DIFFERENT STREAMS OF INCOME TO ACCOUNT FOR THE ABOVE CASH DEPOSITS. IT IS NOT THE REQUIREMENT OF THE LAW THAT ONE TO ONE CASH WITHDRAWAL AND CASH DEPOSIT SHOULD BE ESTABLISHED TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACC OUNTS. CONSIDERING THE SAM E, I AM OF THE OPINION THAT THE MATTER SHOULD BE REMANDED TO THE FILE OF THE CIT (A) FOR A SPEAKING ORDER REFERRING TO THE AVAILABILITY OF THE ADEQUATE CASH BALANCES. ASSESSEE IS ALSO DIRECTED TO MAKE A PROPER ATTENDANCE BEFORE THE LOWER AUTHORITIES IN TH E REMAND PROCEEDINGS. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN T HE OPEN COURT ON 4 TH SEPTEMBER, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 4 . 9 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI