ARMAN MAROOF KHAN, NAVI MUMBAI V. ITO 22(2)(1), NAVI MUMBAI

ITA 1992/MUM/2012

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5411 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAVLD
• Assessee Lawyers: PRATEEK JAIN LD AR
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 143(3)

Judgement Text

ITA NO.1992/MUM/2012 ARMAN MAROOF KHAN ASSESSMENT YEAR-2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO.1992/MUM/2012 ( ASSESSMENT YEAR:2007-08) ARMAN MAROOF KHAN 701, SEA WOOD GARDEN, A-WING SECTOR-17, PALM BEACH ROAD SANPADA, NAVI MUMBAI-400 705 VS. INCOME TAX OFFICER - 22(2)(1) 3 RD FLOOR, TOWER NO.6 VASHI RAILWAY STATION COMPLEX NAVI MUMBAI-400 705 !' # PAN/GIR NO.AKZPK-7745-D ( '$ APPELLANT ) : ( %'$ RESPONDENT ) REVENUE BY : RAJESH KUMAR YADAV,LD.DR ASSESSEE BY : PRATEEK JAIN, LD.AR &' DATE OF HEARING : 13/07/2018 ()*' / DATE OF PRONOUNCEMENT : 25 /07/2018 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [A Y] 2007-08 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-33 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-33/IT/1320/09-10 DATED 13/01/2011 QUA CONFIRMATION OF CERTAIN ADDITIONS. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER-22(2)(1) U/S 143(3) OF THE INCOME 2 ITA NO.1992/MUM/2012 ARMAN MAROOF KHAN ASSESSMENT YEAR-2007-08 TAX ACT, 1961 WHEREIN THE INCOME OF THE ASSESSEE WA S DETERMINED AT RS.26.99 LACS AS AGAINST RETUNED INCOME OF RS.2.21 LACS FILED BY THE ASSESSEE ON 11/01/2008. THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ENGAGED AS AIR CONDITIONING REPAIR CONTRACTOR & TRANSPORT COMM ISSION AGENT UNDER PROPRIETORSHIP CONCERN NAMELY SUPREME COOLING SERVICES. 2.1 THE REGISTRY HAS NOTED THAT THE APPEAL HAS BEEN FILED WITH A DELAY OF 371 DAYS. THE LD. AUHTORIZED REPRESENTATIVE FOR ASS ESSEE [AR], SHRI PRATEEK JAIN HAS PLEADED FOR CONDONATION OF THE SAME ON THE STRE NGTH OF CONDONATION PETITION DATED 26/03/2012 AS SUPPORTED BY ASSESSEES AFFIDAVIT DATED 24/03/2012. THE DELAY HAS BEEN ATTRIBUTED TO NEGLIGENCE OF THE REPRESENTING COUNSEL OF THE ASSESSEE NAMELY SHRI TARUN TRIPATHI IN FILING THE APPEAL IN TIME. IN SUPPORT, A LETTER FROM THE R EPRESENTING COUNSEL HAS ALSO BEEN PLACED ON RECORD WHEREIN THE COUNSEL HAS ATTRIBUTED THE DELAY TO BAD HEALTH CONDITIONS BEING FACED BY HIM. THE CONDO NATION HAS BEEN VEHEMENTLY OPPOSED BY LD. DEPARTMENTAL REPRESENTATI VE [DR], SHRI RAJESH KUMAR YADAV BY PLEADING THAT EACH DAYS DELAY WAS REQUIRED TO BE EXPLAINED AND THERE WAS NO SUFFICIENT CAUSE DEMONST RATED BY THE ASSESSEE IN THE CONDONATION PETITION. 2.2 AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT T HE EXPLANATION FURNISHED BY LD. AR BEFORE US , IN THIS REGARD, IS NOT VERY P LAUSIBLE EXPLANATION AND DO NOT CONVINCE US TO CONDONE THE HUGE DELAY. HOWEVER, KEEPING IN VIEW THE FACT THAT THE REPRESENTING COUNSEL WAS FACING ADVER SE MEDICAL CONDITIONS AND THE ASSESSEE WAS AN INDIVIDUAL ENGAGED AS SMALL CONTRACTOR AND 3 ITA NO.1992/MUM/2012 ARMAN MAROOF KHAN ASSESSMENT YEAR-2007-08 KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE, W E CONDONE THE SAME AND PROCEED TO DISPOSE-OFF THE APPEAL ON MERITS. 3.1 DURING ASSESSMENT PROCEEDINGS, PURSUANT TO CERT AIN ANNUAL INFORMATION RETURN [AIR], IT WAS NOTED THAT THE ASSESSEE DEPOSITED CASH OF RS.11.25 LACS IN AN ACCOUNT HELD WITH ORIENTAL BANK OF COMMERCE, CHEMBUR BRANCH. THE SAID ACCOUNT WAS NOT REFLECTED IN THE FINANCIAL STATEMENTS SUBMITTED BY THE ASSESSEE. THE STATEMENT OF THE ASSESSEE WAS RECORDED U/S 131, WHICH IS EXTRACTED ON PAGES 6 TO 9 OF THE QUANTUM ASSESSMENT ORDER, WHERE THE AFORESAID FACT WAS ADMI TTED BY THE ASSESSEE. THE SOURCE OF THE CASH DEPOSIT WAS ATTRIBUTED TO SA LES PROCEEDS OF THE HOUSE STATED TO BE SOLD BY THE ASSESSEE DURING IMPU GNED AY. UPON PERUSAL OF THE UNREGISTERED SALE AGREEMENT, IT WAS FOUND THAT THE HOUSE WAS SOLD FOR RS.8.67 LACS. HOWEVER, NO DOCUMENT TO SUPPORT THE PURCHASE PRICE COULD BE FILED BY THE ASSESSEE, WHICH RESULTE D INTO AN ADDITION OF RS.8.67 LACS AS SHORT TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE . THE BALANCE CASH DEPOSIT OF RS.2.58 LACS WAS TREATE D AS UNEXPLAINED CASH CREDIT U/S 68. 3.2 THE ASSESSEE, IN THE SIMILAR MANNER, COULD NOT SUBSTANTIATE THE CASH DEPOSIT OF RS.10.56 LACS & RS.66.98 LACS IN TWO ANO THER BANK ACCOUNTS HELD WITH ICICI BANK. THE SAME RESULTED INTO ADDITIONS OF RS.6.06 LACS & RS.7.40 LACS RESPECTIVELY, BEING PEAK OF THE CASH D EPOSITED IN THESE ACCOUNTS. FINALLY, THE INCOME WAS ASSESSED AT RS.26 .99 LACS AS AGAINST RETURNED INCOME OF RS.2.21 LACS. 4 ITA NO.1992/MUM/2012 ARMAN MAROOF KHAN ASSESSMENT YEAR-2007-08 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 13/01/2 011 WHEREIN THE STAND OF LD. AO GOT CONFIRMED. AGAINST THE SAME, THE ASSE SSEE IS IN FURTHER APPEAL BEFORE US. 5. THE LD. AR, DRAWING OUR ATTENTION TO THE DOCUMEN TS PLACED IN THE PAPER-BOOK CONTESTED THE ADDITIONS AS SUSTAINED BY FIRST APPEL LATE AUTHORITY. THE SAME HAS BEEN CONTROVERTED BY LD. DR BY SUBMITT ING THAT THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE TRANS ACTIONS AND THE LOWER AUTHORITIES WERE JUSTIFIED IN MAKING THE IMPUGNED A DDITIONS. 6. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. SO FAR AS THE COMPUTATION OF CA PITAL GAINS IS CONCERNED, WE FIND THAT APPARENTLY THE ASSESSEE HAS PURCHASED THE HOUSE UNDER QUESTION VIDE UNREGISTERED AGREEMENT DATED 07/04/19 95 FOR A CONSIDERATION OF RS.3.82 LACS. THE LD. FIRST APPELLATE AUTHORITY ACCEPTED THE SALE VALUE AS REFLECTED IN THE UNREGISTERED SALE AGREEMENT BUT DI D NOT RECOGNIZE THE UNREGISTERED PURCHASE DOCUMENT WHICH IS NOT JUSTIFI ED SINCE THE PROPERTY UNDER QUESTION MUST HAVE BEEN ACQUIRED BY THE ASSES SEE BY SOME MODE OF ACQUISITION. SINCE THE PURCHASE AGREEMENT WAS NOT B EFORE LD. AO, WE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF LD. AO FOR RECONSIDERATION OF THE SAME WITH A DIRECTION TO THE ASSESSEE TO FUR NISH REQUISITE DOCUMENTS IN THIS REGARD. THIS GROUND STAND ALLOWED FOR STATI STICAL PURPOSES. 7. SO FAR AS ISSUE OF CASH DEPOSIT IN THREE BANK AC COUNTS IS CONCERNED, WE FIND THAT THE ACCOUNT HELD WITH ORIENTAL BANK OF COMMERCE WAS NEVER 5 ITA NO.1992/MUM/2012 ARMAN MAROOF KHAN ASSESSMENT YEAR-2007-08 REFLECTED BY THE ASSESSEE IN FINANCIAL STATEMENTS W HEREAS HUGE CASH WAS DEPOSITED BY THE ASSESSEE IN OTHER TWO ACCOUNTS HEL D WITH ICICI BANK AS AGAINST MEAGER TURNOVER OF RS.8.88 LACS. THE COMPLE TE ONUS TO EXPLAIN THE SOURCE OF CASH LIES ON ASSESSEE. THE LD. AR HAS SUB MITTED THAT CASH HAS BEEN SOURCED FROM EARLIER WITHDRAWALS MADE FROM THE AFORESAID ACCOUNTS AS SUPPORTED BY THE CASH FLOW STATEMENTS . THEREFORE, ON FACTUAL MATRIX, WE REMIT THE ISSUE BACK TO THE FILE OF LD. AO TO VERIF Y THE SAME AND RE- ADJUDICATE THE ISSUE WITH A DIRECTION TO THE ASSESS EE TO SUBSTANTIATE THE CASH DEPOSITED BY HIM IN THE THREE BANK ACCOUNTS WI TH DOCUMENTARY EVIDENCES AND EXPLANATIONS. THESE GROUNDS STANDS AL LOWED FOR STATISTICAL PURPOSES. 8. RESULTANTLY, THE APPEAL STAND ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2018 SD/- SD/- (C.N.PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25.07.2018 SR.PS:-THIRUMALESH 6 ITA NO.1992/MUM/2012 ARMAN MAROOF KHAN ASSESSMENT YEAR-2007-08 ( COPY OF THE ORDER FORWARDED TO : 1. )*+,-. ( THE APPELLANT 2. 234-. 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