NARGIS MAMDANI, MUMBAI V. ITO 20(2)(3), MUMBAI

ITA 2098/MUM/2010

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3092 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 08-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 15-03-2010
• Court: TRIBUNAL
• Department Lawyers: S S KUMARAN
• Assessee Lawyers: MRS AARTI VISSANJI
• Keywords: Unexplained cash credit; Peak credit
• Section: 143(3); 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.2098/MUM/2010 ASSESSMENT YEAR: 2005-06 & ITA NO.2097/MUM/2010 ASSESSMENT YEAR: 2006-07 NARGIS MAMDANI, B-706, AAKANSHA TOWER, PANCHMARG, YARI ROAD, ANDHERI (W), MUMBAI -400061 / VS. I.T.O. 2 0 (2)(3), MUMBAI- ( ASSESSEE ) ( REVENUE ) P.A. NO. AALPM3747R / ASSESSEE BY MRS.AARTI VISSANJI / REVENUE BY SHRI S. S. KUMARAN ( D R) ! ' # / DATE OF HEARING : 8/09/2015 ' # / DATE OF ORDER: 30/09/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE COMMON ORDER OF LD. COMMISSIONER OF INCOME TAX (APP EALS)- NARGIS MAMDANI 2 31, MUMBAI DATED 24.12.2009 FOR THE ASSESSMENT YEAR S 2005- 06 AND 2006-07, DECIDED AGAINST THE ASSESSMENT ORDE R PASSED BY THE ASSESSING OFFICER U/S 143(3) R. W.S 147 OF T HE ACT. FIRST, WE TAKE UP ITA NO.2098/MUM/2010: 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS WITH RESPECT TO ADDITION OF RS.25,13,900/- MADE BY THE ASSESSING OFFICER (HEREINAFTER CALLED AS AO) U/S. 68, BEING UNEXPLAINED CASH CREDIT AND UPHELD BY THE LEARNED COMMISSIONER OF INCOME TAX {HEREINAFTER CALLED AS L D. CIT(A)}. 3. THE BRIEF FACTS AS CULLED OUT FROM THE ASSESSMENT ORDER ARE THAT DURING THE YEAR ASSESSEE WAS IN THE BUSINE SS OF STITCHING & EMBROIDERY WORKS UNDER THE NAME AND STY LE OF M/S. MAMDANI CREATION. APART FROM THIS, THE ASSESSE E HAD ALSO SHOWN INCOME FROM CAPITAL GAIN, IN THE RETURN FILED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT AS PER AIR INFORMATION, THE ASSESSEE HAS DEPOS ITED THE FOLLOWING CASH IN HER SAVING BANKS ACCOUNT: (I) ORIENTAL BANK OF COMMERCE RS.13,38,900/- (II) DEVELOPMENT CREDIT BANK RS.11,75,000/- TOTAL RS.25,13900/- THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CAS H DEPOSITED INTO THE BANK. THE ASSESSEE EXPLAINED THA T CASH WAS DEPOSITED OUT OF UNSECURED LOANS TAKEN BY THE ASSES SEE FROM FRIENDS AND RELATIVES. THESE LOANS COULD NOT BE SUB STANTIATED NARGIS MAMDANI 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE REFORE, ENTIRE AMOUNT OF CASH DEPOSITED WAS ADDED U/S 68 BY THE AO. 4 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND MADE DETAILED SUBMISSIONS IN THE APPEAL. IT WAS SUBMITTED BY THE ASSESSEE THAT THERE WAS FACTUA L MISTAKE COMMITTED BY THE AO WHILE COMPUTING AGGREGATE AMOUN T OF CASH DEPOSITED INTO THE DEVELOPMENT CREDIT BANK. AS PER THE ASSESSEE, AMOUNT OF CASH DEPOSITED INTO BANK WAS ON LY FOR RS.2,31,000/-. THUS, ACCORDING TO THE ASSESSEE, TOT AL AMOUNT DEPOSITED BY THE ASSESSEE IN THE BANK ACCOUNT WAS R S. 15,69,900/-, AS AGAINST FIGURE OF RS. 25,13,900/- A DOPTED BY THE AO. HOWEVER, LD. CIT(A) UPHELD THE ORDER OF AO ON THE GROUND THAT ASSESSEE WAS NOT ABLE TO EXPLAIN AND SU BSTANTIATE THE SOURCE OF AMOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT. WITH RESPECT TO MISTAKE COMMITTED BY THE AO, BY NOT TAKING CORRECT FIGURES OF THE AMOUNT OF CASH DEPOSITED IN THE DEVELOPMENT CREDIT BANK, THE LD. CIT(A) DID NOT GIV E ANY FINDINGS. THUS, BEING AGGRIEVED, THE ASSESSEE HAS F ILED AN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSE E HAS SUBMITTED BEFORE THE BENCH THAT ASSESSEE IS NOT ABL E TO EXPLAIN SOURCE OF WHOLE OF THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. HOWEVER, AN ALTERNATE PLEA HAS BEEN TAKEN HERE BEFO RE THE TRIBUNAL, WHEREIN LD. COUNSEL HAS SUBMITTED THAT IF AT ALL SOME ADDITIONS HAVE TO BE MADE IN THIS REGARD, THE SAME CANNOT BE MADE IN EXCESS OF THE AMOUNT OF PEAK CRE DIT. IN NARGIS MAMDANI 4 OTHER WORDS THE ASSESSEE HAS SOUGHT THE BENEFIT OF TELESCOPING OF THE AMOUNT OF CASH WITHDRAWN FROM THE BANK ACCOU NT, TIME TO TIME DURING THE YEAR, AGAINST THE AMOUNT DEPOSIT ED THEREIN. IN SUPPORT OF THIS ARGUMENT, LD COUNSEL HAS PLACED WORKING SHEET SHOWING AMOUNT OF CASH DEPOSIT AND WITHDRAWN IN THE AFORESAID TWO BANKS ON VARIOUS DATES DURING THE YEA R UNDER CONCERN. ON THE BASIS OF THIS WORKING SHEET, THE LD COUNSEL SUBMITTED THAT PEAK CREDIT WAS TO THE TUNE OF RS.5, 44,900/- ONLY, AND THEREFORE, AMOUNT OF ADDITION UNDER THIS ACT, ON ACCOUNT OF CASH DEPOSITED INTO THE BANK ACCOUNT COU LD NOT HAVE EXCEEDED BEYOND THIS FIGURE. LD COUNSEL REQUES TED FOR AN OPPORTUNITY BEFORE THE AO TO EXPLAIN THE SOURCE PRO PERLY. ON THE OTHER HAND, LD. DR SUBMITTED THAT SINCE ASSESSE E HAS NOT BEEN ABLE TO EXPLAIN THE SOURCES OF AMOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT, ADDITION WAS CORRECTLY MADE BY THE AO AND WAS RIGHTLY UPHELD BY THE LD. CIT(A). WITH RESP ECT TO THE MISTAKE IN FIGURE ADOPTED BY THE AUTHORITIES BELOW; LD DR WAS FAIR ENOUGH TO SUBMIT THAT THIS ISSUE MAY BE SENT B ACK TO THE FILE OF THE AO TO EXAMINE THIS ASPECT. WITH RESPECT TO PEAK CREDIT ISSUE RAISED BY THE LD. COUNSEL, IT WAS SUBM ITTED BY THE LD DR THAT THE ASSESSEE CANNOT BE GRANTED THIS BENE FIT, AT THIS STAGE. BUT HE DID NOT HAVE SERIOUS OBJECTIONS IF TH IS ISSUE WAS ALSO SENT TO THE FILE OF THE AO. 6 . HAVING HEARD BOTH THE PARTIES AND HAVING GONE THR OUGH THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT T HIS ISSUE DESERVES TO BE RE-EXAMINED BY THE AO. IF THERE WAS A MISTAKE IN ADOPTING THE FIGURES, THE SAME SHOULD BE CORRECT ED. THE NARGIS MAMDANI 5 ASSESSEE SHALL EXTEND FULL COOPERATION TO THE AO IN GIVING COMPLETE FACTS AND FIGURES AND REQUISITE DOCUMENTAR Y EVIDENCES, AS MAY BE DIRECTED BY THE AO TIME TO TIM E. THE AO SHALL ALSO EXAMINE THE FRESH PLEA TAKEN BY THE ASSE SSEE WITH RESPECT TO PEAK CREDIT THEORY SUGGESTED BY THE LD. COUNSEL. THE AO SHALL GIVE BENEFIT OF SET OFF OF THE AMOUNT WITHDRAWN BY THE ASSESSEE FROM THE BANK ACCOUNT AGAINST THE AMOU NT OF CASH DEPOSITED THE BANK ACCOUNT, IN CASE THE AO IS NOT ABLE TO BRING ON RECORD ANY COGENT MATERIAL TO ESTABLISH TH AT AMOUNT OF CASH WITHDRAWN FROM THE BANK HAS BEEN UTILIZED S OMEWHERE ELSE. THE BENEFIT OF SET OFF OF THE CASH AMOUNTS WI THDRAWN FROM THE BANK ACCOUNTS SHALL NOT BE DENIED, MERELY ON TH E BASIS OF SURMISES AND CONJECTURES. THE AO IS DIRECTED TO ADO PT FAIR AND JUDICIOUS APPROACH WHILE REEXAMINING FACTS AND EVID ENCES OF THIS CASE. HE SHALL ALSO GIVE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL ALSO EXTEND REQUIS ITE COOPERATION TO THE AO, AS PER LAW. 7 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. NOW, WE TAKE UP ITA NO.2097/MUM/2010 8. THE ISSUE RAISED IN THIS CASE IS SIMILAR TO THE ON E INVOLVED IN ABOVE ITA NO.2098/MUM/2010, AND FOLLOWI NG THE AFORESAID ORDER, ISSUE INVOLVED IN THIS APPEAL IS A LSO SENT BACK TO THE AO ALONG WITH THE SAME DIRECTIONS AS HAS BEE N GIVEN IN OUR ORDER, ABOVE. NARGIS MAMDANI 6 9 . IN THE RESULT, BOTH OF THESE APPEALS OF THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2015. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER ! MUMBAI; & DATED : 30/09/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ( )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - ( ( ) / THE CIT, MUMBAI. 4. - - / CIT(A)- , MUMBAI 5. 01 2 +3 , - ( # 3 4 , ! / DR, ITAT, MUMBAI 6. 2 5 6 ! / GUARD FILE. / BY ORDER, , 0( + //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI