ITO 21(3)(3), MUMBAI V. MUSHIR Z. SHAIKH, MUMBAI

ITA 194/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83667 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI , BEFORE : SHRI R.C.SHARMA , A M & SHRI AMIT SHUKLA , J M ITA NO. 194 / MUM/20 11 ( ASSESSMENT YEAR : 200 6 - 0 7 ) ITO 21(3)(3), MUMBAI - 400051 VS. MUSHIR Z. SHAIKH, 1, FAZAL AND CO. MAQSOOD ESTATE, BEHIND KURLA BUS DEPOT, KURLA, MUMBAI - 400 070 PAN/GIR NO. : A KPPS 8004 D ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : SHRI MAURYA PRATAP /ASSESSEE BY : SHRI JAYANT R. BHATT DATE OF HEARING : 1 ST SEPT. 201 4 DATE OF PRONOUNCE MENT : 1 ST SEPT , 201 4 O R D E R PER R.C.SHARMA ( A .M.) : THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORDER CIT(A ) , DATED 27 - 10 - 2010 FOR ASSESSMENT YEAR 200 6 - 0 7 , IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3), WHEREIN FOLLOWING G ROUNDS HAVE BEEN TAKEN : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 18,95,000/ - MADE BY THE AO IN RESPECT OF CASH DEPOSITS IN BANK A/C, AS UNEXPLAINED CASH CREDITS U/S. 68 OF THE I.T. ACT, 1 961. (I) THE LD. CIT(A) HAS DELETED THIS ADDITION ON THE GROUND THAT 148 PROCEEDINGS WERE DROPPED BY THE AO FOR AY. 2005 - 06 ON SIMILAR ISSUE. BY DOING SO, THE CIT(A) HAS ERRED IN NOT REMANDING THE MATTER BACK TO THE AO AS THE PROCEEDINGS FOR EACH ASSESSME NT YEAR IS DISTINCT AND SEPARATE FROM THE OTHER ASSESSMENT YEAR AND THE ASSESSEES CONTENTION THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WAS OUT OF THE SALE PROCEEDS OF THE ASSESSEE NEEDS TO BE EXAMINED BY THE AO. 2. THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO. 194/11 2 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT AN AIR INFORMATION WAS RECEIVED BY THE AO TO THE EFFECT THAT ASSESSEE HAS DEPOSITE D RS. 18,95,000/ - IN HIS HSBC BANK. THE AO ASKED THE ASSESSEE TO PRODUCE THE DETAIL REGARDING SOURCE AND JUSTIFICATION FOR THESE CASH DEPOSITS. VARIOUS NOTICES WERE ISSUED BY THE A O ON 7 - 1 - 2008, 16 - 10 - 2008, 23 - 10 - 2008 & 7 - 11 - 2008 . THE AO NOTED THAT IN SPITE OF THESE OPPORTUNITIES WITH REGARD TO CALLING FOR EXPLANATION REGARDING CASH DEPOSITS, THE ASSESSEE HAS NOT PRODUCED A SINGLE PIECE OF INFORMATION. SIMPLY I T WAS SUBMITTED BY THE ASSESSEE THAT ASSESSEE WAS IN THE BUSINESS OF SALE AND PURCHASE OF MOTOR VEH ICLE SCRAP AND HE WAS NOT HAVING FINANCIAL YEARS BANK STATEMENT. ACCORDINGLY, THE CASH DEPOSIT IN THE BANK ACCOUNT WAS ADDED BY THE AO U/S. 68 OF THE ACT. IN APPEAL BEFORE THE CIT(A), THE CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATION : - 3.2 I HAVE CONSIDERED THE ARGUMENTS OF THE LD. AR. THOUGH IT IS A FACT THAT THE COMPLIANCE TO NOTICES COULD NOT BE MADE BY THE APPELLANT FOR THE AY 2006 - 07, BUT IN RESPECT OF THE CASH DEPOSITED IN THE HSBC BANK ACCOUNT, ON THE SAME AIR INFORMATION IN RES PECT OF AY 2005 - 06 WHERE EVEN HIGHER AMOUNT OF MORE THAN RS. 32 LACS WAS DEPOSITED IN THE SAME BANK ACCOUNT FOR AY 2005 - 06 AND THE AO AND CONSIDERING THE REPLY THE APPELLANT DATED 16 - 10 - 2009 AND EXAMINING THE RELEVANT DETAILS HAS COME TO THE CONCLUSION THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WAS OUT OF THE SALE/PURCHASE PROCEEDS OF THE SCRAP BUSINESS OF THE ASSESSEE AND NO ADDITION U/S. 68 WAS MADE AND THE AO HAS DROPPED PROCEEDING VIDE HIS ORDER DATED 29.10.2009. THE FACTS IN THIS YEAR ARE EXACTLY SIMILAR TO THE AY 2005 - 06 AND THE CASH DEPOSITED IN THIS YEAR IS MUCH LESS THAN THE CASH DEPOSITED IN AY 2005 - 06, HENCE, NO ADDITION CAN BE MADE THIS YEAR ALSO AND THE ADDITION MADE BY THE AO OF RS. 18,95,000/ - IS DELETED. 3 . WE HAVE CONSIDERED RIVAL CONTENTIONS , CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT ASSESSEE WAS UNABLE TO FURNISH ANY DOCUMENTARY EVIDENCE BEFORE THE AO WITH REGARD TO SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. THE AO HAS GIVEN ITA NO. 194/11 3 VARIOUS OPPORTUNI TIES TO THE ASSESSEE AS PER OBSERVATION IN PARA 3 OF HIS ORDER. THE CIT(A) HAS DELETED THE ADDITION MERELY BY OBSERVING THAT SIMILAR ADDITION MADE IN THE PR E CEDING ASSESSMENT YEAR 2005 - 06 HAS BEEN DROPPED BY THE AO. NO FINDING WITH REGARD TO SOURCE OF CASH DEPOSITS DURIN G THE YEAR UNDER CONSIDERATION WAS RECORDED BY THE CIT(A) . M ERELY BECAUSE THE SIMILAR ADDITION HAS BEEN DELETED BY THE AO IN THE PRECEDING YEAR, CANNOT BE MADE THE REASON IN DELETING THE ADDITION FOR THE YEAR UNDER CONSIDERATION WHEN EACH YE AR IS INDEPENDENT AND DIFFERENT MONEY HAS BEEN DEPOSITED DURING THE YEAR UNDER CONSIDERATION. THE ONUS IS ON THE ASSESSEE TO PROVE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. IT APPEARS THAT SINCE ASSESSEE WAS DOING THE BUSINESS OF SALE AND PURCHASE O F SCRAP OF MOTOR VEHICLE, THE AMOUNT WAS DEPOSITED OUT OF THE SALE PROCEEDS OF SCRAP BUT THE SAME IS REQUIRED TO BE EXPLAINED BEFORE THE AO. IT IS ALSO NOT THE CASE OF THE CIT(A) THAT HE HAS CALLED FOR ANY REMAND AND ON THAT BASIS HE HAS DELETED THE ADDITI ON. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND THE MATTER IS RESTORED BACK TO THE FILE OF THE AO WITH A DIRECTION TO THE ASSESSEE TO FURNISH SOURCE OF DEPOSITS OF CASH BEFORE THE AO AND AO IS TO DECIDE THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNITY T O THE ASSESSEE. 4 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01/09/ 201 4 . 2014 SD/ - SD/ - ( ) ( AMIT SHUKLA ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEM BER MUMBAI ; DATED 01/09 /2014 ITA NO. 194/11 4 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//