FAIYAZ ABUBAKER NAWAB, MUMBAI V. ITO 23(1)(1), MUMBAI

ITA 2008/MUM/2014

• Counselvise Citation: 200819914 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIALDR
• Keywords: Gift
• Section: 68

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI ,!' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.2008/MUM/2014 ASSESSMENT YEAR:2009-10 MR. FAIYAZ ABUBAKER NAWAB, A-2001, 20 TH FLOOR, LAKE FLORENCE TOWER, LAKE HOMES, OFF ADI SHANKARCHARYA MARG, POWAI, MUMBAI-400076 / VS. ITO,23(1)(1), AAYAKAR BHAVAN, M.K. MARG, NEW MARINE LINES, MUMBAI-400020 / ASSESSEE / REVENUE P.A. NO. AABPN2348F $%& / ASSESSEE BY NONE $%& / REVENUE BY SHRI A.K.DHONDIAL-DR / DATE OF HEARING 11/06/2015 & / DATE OF ORDER: 11/06/2015 &/ O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 06/11/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THIS APPEAL IS TIME BARRED BY 36 DAYS IN FILING BEF ORE THIS TRIBUNAL. THE ASSESSEE HAS FILED APPLICATION FOR C ONDONATION OF DELAY ON THE REASONS STATED THEREIN. ON CONSIDE RATION OF THE SAME, THE DELAY IS CONDONED. ITA NO.2008/MUM/2014 MR. FAIYAZ ABUBAKER NAWAB 2 2. DURING HEARING OF THIS APPEAL, NONE WAS PRESENT FOR THE ASSESSEE IN SPITE OF ISSUANCE OF RPAD NOTIC E TO THE ASSESSEE. THE ASSESSEE ALSO DID NOT MOVE ANY ADJOUR NMENT PETITION. IT SEEMS THAT THE ASSESSEE IS NOT INTERE STED TO PURSUE HIS APPEAL, THEREFORE, THIS APPEAL CANNOT BE KEPT PENDING INDEFINITELY FOR WANT OF PROSECUTION, CONSE QUENTLY, I HAVE NO OPTION BUT TO PROCEED EX-PARTY, QUA THE ASS ESSEE, AND TEND TO DISPOSE OFF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. HOWEVER, SHRI A.K.DHONDIAL, L D. DR WAS PRESENT FOR THE REVENUE. THE FIRST GROUND PERTAINS TO CONFIRMING THE ADDITION ON ACCOUNT OF COMMISSION IN COME AGGREGATING TO RS.1,17,732/-. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE IMPUGNED ORDER BY DEFENDING THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (AP PEALS). 2.1. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS CARRYING ON THE BUS INESS OF SELLING/MARKETING OF INSURANCE POLICIES OF M/S INDI A INFOLINE SERVICES LTD. AND HOLIDAY PACKAGES OF M/S HIGHLAND HOLIDAY HOMES PVT. LTD. THE ASSESSEE EARNED GROSS INCOME OF RS.17,55,138/-. THE ASSESSEE, DURING ASSESSMENT PROCEEDINGS, FURNISHED THE DETAILS, BOOKS OF ACCOUN TS LEDGER COPIES WITH RESPECT TO GROSS INCOME EARNED FROM M/S HIGHLAND HOMES PVT. LTD. AS PER THE CLAIM OF THE ASSESSEE, HE WAS PAYING SALARIES TO THE STAFF AND OTHER OFFIC E EXPENSES FOR MARKETING THE INSURANCE POLICIES, WHICH ARE SOL D, WITH LOTS OF PERSUASION AND FOLLOW UP WHICH IS NOT EXPECTED T O BE ITA NO.2008/MUM/2014 MR. FAIYAZ ABUBAKER NAWAB 3 COMPLETED WITHOUT THE SUPPORT STAFF/OTHER EXPENSES. THE ASSESSING OFFICER WORKED OUT THE COMMISSION AT RS.3,59,515/- AND FINALLY THE ADDITION OF RS.1,17,7 32/- (RS.75,000+42,732/-) WAS MADE TO THE TOTAL INCOME O F THE ASSESSEE. ON APPEAL, THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) AFFIRMED THE STAND TAKEN IN THE ASSESSMEN T ORDER, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEF ORE THIS TRIBUNAL. IF THE OBSERVATION MADE IN THE ASSESSMEN T ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, I FIND THAT BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE STAND OF THE ASSESSEE WAS THAT THE APPELLANT CANNOT BE HELD ACCO UNTABLE FOR THE EXPENSES, IF ANY, INFLATED BY INDIA INFOLIN E AND THE ASSESSEE IS NOT BENEFICIARY FOR SUCH AMOUNTS. I FI ND THAT, AS CLAIMED BY THE ASSESSEE, THE AMOUNT OF RS.19,78,537 /- WAS RECEIVED BY THE ASSESSEE FROM INDIA INFOLINE FOR WH ICH THE ASSESSEE FILED COPY OF FORM NO.26AS. THE STAND OF T HE REVENUE IS THAT IN FACT THE ASSESSEE RECEIVED COMMI SSION OF RS.3,59,515/- FROM HIGHLAND HOLIDAYS PVT. LTD AGAIN ST THE COMMISSION OF RS.3,16,783/-, SHOWN IN THE RETURN. TO PUT AN END TO THE LITIGATION, THE ADDITION IS REDUCED T O RS.50,000/- IN PLACE OF RS.1,17,732/-, SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, THIS GR OUND OF THE ASSESSEE IS PARTLY ALLOWED. 3. THE NEXT GROUND PERTAINS TO CONFIRMING THE ADDITION OF RS.2,16,000/- ON ACCOUNT OF UNEXPLAINED CASH ITA NO.2008/MUM/2014 MR. FAIYAZ ABUBAKER NAWAB 4 CREDIT U/S 68 OF THE ACT. THE CRUX OF ARGUMENT ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ADDITION SUSTAINED IN THE IMPUGNED ORDER. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DURIN G ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSI NG OFFICER THAT THE ASSESSEE WAS HAVING BANK ACCOUNT I N AXIS BANK WHEREIN THE AMOUNT OF RS.2,16,000/- WAS FOUND DEPOSITED ON VARIOUS DATES. SINCE, THE ACCOUNT WAS NOT DISCLOSED IN THE RETURN, THE ASSESSING OFFICER TREA TED THE AMOUNT AS AN UNEXPLAINED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. THE STAND OF THE ASSESSEE, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), WAS THAT HE W AS AT THE RELEVANT TIME WAS WORKING IN GOA AND THUS COULD NOT COLLECT THE STATEMENT DUE TO THE NATURE OF EMPLOYME NT OF THE ASSESSEE. THE ASSESSEE DID NOT FILE ANY COGENT MA TERIAL IN SUPPORT OF HIS CLAIM EVEN DURING REMAND REPORT. SI NCE THE ACCOUNT ITSELF WAS NOT MENTIONED IN THE RETURN FILE D BY THE ASSESSEE, THEREFORE, THE STAND TAKEN BY THE REVENUE AUTHORITIES IS UPHELD. THIS GROUND IS THEREFORE, D ISMISSED. 4. THE LAST GROUND PERTAINS TO CONFIRMING THE ADDI TION OF RS.1,99,478/-, BEING THE GIFT RECEIVED FROM MOTH ER AMOUNTING TO RS. 1,89,000/- AND THE BALANCE RS.10,4 78/- WAS CLAIMED TO BE FROM OWN SOURCES. THE LD. DR, DE FENDED THE ADDITION MADE IN THE ASSESSMENT ORDER WHICH WAS CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS). I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE THE LD. CO MMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE CLAIMED THAT THE ITA NO.2008/MUM/2014 MR. FAIYAZ ABUBAKER NAWAB 5 IMPUGNED AMOUNT WAS RECEIVED AS A GIFT FROM THE MOT HER OF THE ASSESSEE AND DUE TO HEAVY FINANCIAL BURDEN OF R EPAYING THE HOUSING LOAN, HE COULD NOT MANAGE THE BUSINESS AFFAIRS I A REQUIRED MANNER. THE MOTHER WAS CLAIMED TO BE HAV ING A RESIDENTIAL FLAT SITUATED IN VIKHROLI (WEST) HAVING RENTAL INCOME OF RS.8,000/- PER MONTH. AS THE MOTHER WAS STAYING WITH THE ASSESSEE, HAVING NO PERSONAL EXPENSES, THE ACCUMULATED RENTAL INCOME WAS GIVEN TO THE ASSESSE E AS A GIFT FROM TIME TO TIME. IN THE REMAND REPORT, THE LD. ASSESSING OFFICER CONTENDED THAT THE CREDITWORTHINE SS AND GENUINENESS OF THE TRANSACTION WAS NOT PROVED BY TH E ASSESSEE. HOWEVER, THERE IS NO REPORT BY THE ASSES SING OFFICER WITH RESPECT OF OWNING THE FLAT BY THE MOTH ER, THUS, THE CLAIM OF THE ASSESSEE SEEMS TO BE GENUINE. SIN CE, THE GIFT IS FROM THE MOTHER, THEREFORE, I FIND FORCE IN THE CONTENTION OF THE ASSESSEE, CONSEQUENTLY, THE ADDITION MADE ON TH IS COUNT IS DELETED. THE REMAINING AMOUNT OF RS.10,478/- IS A SMALL AMOUNT WHICH CAN EASILY BE AVAILABLE WITH THE ASSES SEE FROM HIS OWN SOURCES. THIS GROUND OF THE ASSESSEE IS AL LOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LEARNED DR AT THE CONCLUSION OF THE HEA RING ON 11 TH JUNE 2015. SD/- (JOGINDER SINGH) !' / JUDICIAL MEMBER MUMBAI; DATED : 11/06/2015 F{X~{T? P.S / ! ITA NO.2008/MUM/2014 MR. FAIYAZ ABUBAKER NAWAB 6 &$)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI