PANNABEN N SHAH, MUMBAI V. ITO 21(1)(4), MUMBAI

ITA 2112/MUM/2014

• Counselvise Citation: 211219914 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G N MAKWANA
• Assessee Lawyers: MANOJ PANDIT
• Keywords: Unexplained cash credit; Business income; Additional evidence; Revised return
• Section: 68; 143(3); 133(6); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI G.S. PANNU , ACCOUNTANT MEMBER ITA NO . 2112 / MUM./ 2014 ( ASSESSMENT YEAR : 20 0 8 09 ) SMT. PANNABEN N. SHAH 8/9, WAMAN, NEAR PARLESHWAR MANDIR M.G. ROAD, VILLE PARLE EAST MUMBAI 400 057 PAN AOMPS6784D .. APPELLANT V/S INCOME TAX OFFICER WARD 2 1 (1)( 4 ) , MUMBAI .... RESPONDENT ASSESSEE BY : SHRI MANOJ PANDIT REVENUE BY : SHRI G.N. MAKWANA DATE OF HEARING 1 4 .0 7 .2015 DATE OF ORDER 29.07.2015 O R D E R PER G.S. PANNU , ACCOUNTANT MEMBER TH E PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED APPEAL ORDER DATED 30 TH JANUARY 2014 , PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 32 , MUMBAI, FOR THE ASSESSMENT YEAR 20 0 8 09 , WITH REFERENCE TO THE A SSESSMENT ORDER DATED 30 TH DECEMBER 2010 , PASSED IN TERMS OF SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) . THE REVISED GROUNDS OF APPEAL WHICH WERE ADMITTED, AS RAISED BY THE ASSESSEE ARE AS FOLLOWS: SMT. PANNABEN N. SHAH 2 ' GROUDS OF APPEAL (1) ON THE FA CTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING THE OBSERVATION OF AO THAT THERE WAS NO BUSINESS CARRIED ON BY THE ASSESSEE AND BASED ON THE ERRONEOUS OBSERVATION HAS MADE ADDITION OF RS.10,36,000/ - CASH SALES DEPOSITED IN BANK ACCOUNT U/S 68 OF THE INCOME TAX ACT 1961. (2) THE LEARNED CIT (A) HAS ERRED IN ACCEPTING THE CONTENTION OF THE AO IN HOLDING THAT RECTIFICATION IN RETURN OF INCOME TO REFLECT INCOME UNDER CORRECT HEAD IS REVISION OF RETURN AND IS VOID AB - INITIO SINCE ORIGINAL RETURN WAS BELATED RETURN. (3) THE LEARNED CIT (A) HAS ERRED IN ACCEPTING THE CONTENTION OF THE AO IN HOLDING THAT SECTION 44 AF OF THE INCOME TAX CAN'T BE INVOKED AT THE TIME OF ASSESSMENT IF THE SAME HAS NOT BEEN CLAIMED IN THE RETURN OF INCOME. (4) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED IN TREATING SALE PROCEEDS OF BUSINESS AS UNEXPLAINED CREDITS U/ S. 68 OF THE INCOME TAX ACT. WITHOUT PREJUDICE TO GROUND 1 TO 4 (5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN NOT EXCLUDING THE INCOME OF RS. 2,06,503/ - ALREADY OFFERED BY THE ASSESSEE IN RETURNED INCOME, RESULTING IN DOUBLE TAXATION OF THE SAID INCOME. THE APPEL LANT CRAVES LEAVE TO, ADD, ALTER TO, AMEND, AND / OR DELETE IN ALL THE FOREGOING GROUNDS OF APPEAL. 2. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING NET TAXABLE INCOME OF ` 1,56,78 2 . THE ASSESSEE , INTER ALIA, DECLARED ` 2,06,503, AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES BEING INCOME FROM PART TIME TRADING IN CLOTHS . THE ASSESSEE SUBMITTED REVISED COMPUTATION OF INCOME ON 23 RD SMT. PANNABEN N. SHAH 3 DECEMBER 2010, WHEREBY THE ASSESSEE CHANGED HIS STAND OF INCOME FROM PART T IME TRADING BEING INCOME FROM OTHER SOURCES TO BE CONSIDERED AS INCOME FROM BUSINESS AND REQUEST ING FOR APPLICATION OF SECTION 44AF OF THE ACT BEING PRESUMPTIVE TAX. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEPOSITED ` 10,36,000, IN AGGREGAT E IN CASH ON VARIOUS DATES IN SAVINGS BANK ACCOUNT IN COSMOS COOPERATIVE BANK LTD. ON BEING SHOW CAUSED, T HE ASSESSEE EXPLAINED THE CASH DEPOSIT S AS THE SALE PROCEEDS OF PART TIME TRADING IN CLOTHS. THE ASSESSEE SUBMITTED COPIES OF PURCHASE BILLS TO SUBSTANTIA TE PURCHASES MADE BY HER. ON VERIFICATION BY THE ASSESSING OFFICER, IT WAS OBSERVED THAT THE ASSESSEE HAD MADE PURCHASES FROM UNREGISTERED DEALERS BASED IN BHIWANDI BY CASH. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) O F THE ACT TO THE SUPPLIE RS BUT ALL THE NOTICES WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES WITH REMARKS NOT KNOWN OR INCOMPLETE ADDRESS . T HE ASSESSING OFFICER ALSO NOTICED THAT THE PURCHASE BILLS WE RE NOT HAVING COMPLETE ADDRESS, PHONE NUMBERS AND BST/CST NUMBERS. IT WAS ALSO OBSERVED BY THE ASSESSING OFFICER THAT PURCHASES WERE MADE FROM DIFFERENT PARTIES AND MOST OF THE BILLS HAVE SOME DESCRIPTION OF ARTICLES, RATE AND AMOUNT AND MOSTLY WITH THE SAME HAND WRITING. FURTHER, ON CONDUCTING FIELD ENQUIRIES BY THE ASSESSING OFFICER, IT WAS REVEALED THAT NO BUSINESS ACTIVITIES WERE CARRIED OUT FROM THE RESIDENCE OF THE ASSESSEE AS CLAIMED BY HER. ON SMT. PANNABEN N. SHAH 4 VERIFICATION OF T RADING AND PROFIT & LOSS ACCOUNT BY THE ASSESSING OFFICER, IT WAS NOTICED THAT THE ASSESSEE HAS SHOWN EXPENDITUR E OF ` 9,354, ON ACCOUNT OF OTHER EXPENSES AND ` 6,141, ON ACCOUNT OF CONVEYANCE AND NO OTHER EXPENSES LIKE SALARY AND WAGES, WRITING CHARGES, TELEPHONE, TRANSPORTATION, ETC., WAS DEBITED TO PROFIT & LOSS ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDING S, ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT, BILLS, VOUCHERS, ETC., FOR VERIFICATION WHICH WAS NOT PRODUCED. HOWEVER, IN THE ASSESSMENT PROCEEDINGS, ASSESSEE FILED A REVISED COMPUTATION OF INCOME ALONG WITH A REVISED RETURN OF INCOME AND SUBMITTE D THAT SHE HAD INADVERTENTLY SHOWN THE INCOME OF PART TIME TRADING IN CLOTHS UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM PROFESSION WHILE FILING THE ORIGINAL RETURN OF INCOME . THE ASSESSEE CLAIMED TO BE ASSESSED UNDER THE PROVISION OF SECTION 44AF OF THE ACT. THE ASSESSING OFFICER TREATED THE REVISED RETURN TO BE VOID AB INITIO AS PER SECTION 139(5) OF THE ACT, BECAUSE THE ORIGINAL RETURN OF INCOME WAS FILED BELATEDLY I.E., AFTER THE DUE DATE GIVEN UNDER SECTION 139(1) OF THE ACT. TH E ASSESSING OFFICER HELD THAT THERE WAS NO EVIDENCE OF THE ASSESSEE DOING ANY BUSINESS AND THAT THE CHANGED STAND WAS ONLY AN AFTERTHOUGHT. ON THE BASIS OF HIS VERIFICATION EXERCISE, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD FAILED TO ESTABLISH THAT ANY BUSINESS OF TRADING IN CLOTH WAS CARRIED OUT, AND TREATED ` 10,36,000, DEPOSITED SMT. PANNABEN N. SHAH 5 IN CASH IN COSMOS COOPERATIVE BANK LTD. AS AN UNEXPLAINED CASH CRE DIT UNDER SECTION 68 OF THE ACT . THE ASSESSEE, BEING AGGRIEVED BY THE SAID ORDER PASSED BY THE ASSESSI NG OFFICER, CARRIED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN BEFORE THE CIT(A), THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCE AGAINST WHICH THE CIT(A) CALLED FOR THE REMAND RE PORT FROM THE ASSESSING OFFICER OF WHICH THE SUMMARY OF REMAND REPOR T IS AS UNDER: DURING THE REMAND PROCEEDINGS THE AO ASKED THE ASSESSEE TO PRODUCE ALL THE PARTIES FROM WHOM MATERIAL WAS PURCHASED ALONG WITH THE EVIDENCES TO ESTABLISH GENUINITY OF PURCHASE OF MATERIAL. AO FURTHER ASKED APPELLANT TO PRODUCE THE BROKERS THROUGH WHOM MATERIAL WAS PURCHASED FOR THE EXAMINATION AND TO PROVE SOURCES OF FUNDS WHICH WERE UTILIZED FOR PURPOSE OF PURCHASING THE MATERIAL IN LIGHT OF THE FACT THAT THERE WAS ONLY RS. 1 ,750/ - BEING CASH WITHDRAWAL FROM THE SAVINGS BANK ACCOUNT IN CO SMOS BANK IN WHICH CASH OF RS.10,36,000/ WAS DEPOSITED. VIDE SUBMISSION DATED 28.10.2013, THE ASSESSEE SUBMITTED NAMES OF THE PARTIES TO WHOM CLOTHS WERE SOLD BUT AMOUNT WAS NOT MENTIONED. FURTHER THE ASSESSEE SUBMITT ED THAT BROKERS FROM WHOM MATERIALS WERE PURCHASED WERE SHRI SHASHIKANT D. VIRA AND SHRI SANDEEP HORAMBE. FURTHER THEIR ADDRESSES WERE ALSO GIVEN. THE AO OBSERVED THAT THE ASSESSEE DID NOT SUBMIT ANY PROOF TO ESTABLISH THE PAYMENT MADE TO THE BROKERS BUT SHE ACCEPTED THAT PAYMENT TO THE BR OKERS WERE MADE IN CASH. IT WAS ALSO SUBMITTED THAT T H E GOODS WERE D ELIVERED BY THE BROKERS OF THE PARTIES DIRECTLY AT HER ADDRESS AGAINST CASH PAYMENT AND SHE WAS NOT RESPONSIBLE FOR OTHER EXPENSES SUCH AS BROKERAGE, COMMISSION, OCTROI, MAJOORI ETC. SMT. PANNABEN N. SHAH 6 THE AO MENTIONED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE NAMES OF THE SUPPLIERS WERE SUBMITTED TO WHOM NOTICES U/ S. 133(6) WERE ISSUED AND THE SAME WERE RETURNED BACK WHICH EVIDENCED THAT THE SUPPLIERS WERE BOGUS. THE A.O. OBSERVED THAT IT WA S ONLY IN THE REMAND PROCEEDINGS THAT THE ASSESSEE ALL TOGETHER CAME OUT WITH THE FACT OF PURCHASE THROUGH BROKERS. IN SPITE OF BEING ASKED THE BROKERS WERE NEITHER PRODUCED BEFORE THE AO NOR ANY BILLS / INVOICES FROM THE BROKERS WERE FILED. ONLY CONFIRMAT ION OF SHRI SHASHIKANT VIRA WAS FILED WHICH WAS NEITHER ON THE LETTER PAD OF THE BROKER NOR PAN OF THE BROKER WAS EVIDENT. HE FURTHER MENTIONED THAT NAME OF THE BROKER IS NOT EVIDENT ON ANY OF THE PURCHASE BILLS. THE AO FURTHER SUBMITTED THAT IT WAS THE ASSESSEE'S SUBMISSION THAT THE PAYMENTS TO THE SAID BROKERS WERE MADE IN CASH, HOWEVER, NEITHER CASH BOOK ON RECORD FOR A.Y. 2008 - 09 NOR THE RELEVANT COSMOS CO - OPERATIVE BANK ACCOUNT DISCLOSED ANY PAYMENT MADE FOR PURCHASES / CASH WITHDRAWALS FOR MAKING TH E PAYMENT. AS PER THE SUMMARY OF THE BANK ACCOUNT SUBMITTED BY THE ASSESSEE THE APPLICATION OF CASH DEPOSITS IS SEEN TO HAVE BEEN M ADE FOR THE PURPOSE OF REPAYMENT OF BANK LOAN, SHARE PURCHASE , ETC. B Y WAY OF CHEQUE PAYMENTS. THUS THE TOTAL CHEQUES ISSUE D W ERE TO THE EXTENT OF ` 18 LAKHS LEAVING MEAGER BALANCES. ACCORDINGLY, IT IS CLEAR THAT ASSESSEE DID NOT HAVE ACCOUNTED FUND FOR PURPOSE OF PURCHASING CLOTHS AS CONTENDED. THE PAYMENTS TO SAID BROKERS FROM WHOM THE ASSESSEE IS CLAIMING TO HAVE EFFECTED P URCHASES WERE MADE FROM UNACCOUNTED SOURCES MAINTAINED OUT OF BOOKS AND THEREFORE, THE A.O. SUBMITTED THAT THE ADDITION MADE IN THE ASSESSMENT MAY BE SUSTAINED. 3. A COPY OF REMAND REPORT WAS GIVEN TO THE ASSESSEE BY THE CIT(A) AND THE ASSESSEE SUBMITTED AS UNDER: I. THE AO HIMSELF HAS ASSESSED AND ACCEPTED THE NATURE OF BUSINESS IN THE ASSESSMENT ORDER ON PAGE 1 & 2 OF THE ORDER. IT WAS SUBMITTED THAT THE APPELLANT HAD FILED COMPLETE DETAILS OF COMPU T ATION OF INCOME, TRADING SMT. PANNABEN N. SHAH 7 ACCOUNT, STATEMENT OF CAPITAL G AIN FOR A. Y . 2006 - 07 TO A .Y. 2008 - 09 ON 07.09.2010 TO THE AO. PERUSAL OF THE SAME REVEALED THAT T HE ASSESSEE WAS INVOLVED IN THE TRADING ACTIVITY AND APPELLANT ALSO REQUESTED TO COMPUTE HER INCOME U / S 44 A F OF THE ACT. II. RELYING ON THE DECISION OF HON'B 1E HIGH COURT IN THE MATTER OF DHAMPUR SUGAR MILLS LTD. VS. CIT(ALL) (90 ITR 236)(1973), THE APPELL A NT CONTENDED REGARDING CONTROVERSY BETWEEN REVISED RETURN AND CORRECTION OF THE RETURN. IT WAS SUBMITTED THAT THE APPELLANT HAD RECTIFIED RETURN IN TIME OR IN EXTENDED TIME AND' THEREFORE OBSERVATION OF THE AO IN HOLDING CORRECTED RETURN AS VOID AB INITIO WAS NOT PROPER. III. THE LD. AR ALSO CONTENDED THAT THE AO NEVER INTIMATED ABOUT THE ISSUANCE OF NOTICE TO THE PARTIES FROM WHOM THE GOODS WERE PURCHASED . AFTER INSPECTING RECORDS OF THE AO, THE AR OF THE APPELLANT SUBMITTED THAT LETTERS U / S. 133(6) WERE ISSUED TO 8 OUT OF 15 PARTIES FROM WHOM BROKERS HAVE PROCURED MATERIAL AND OUT OF 8 ONLY 4 LETTERS WERE RETURNED BACK BEFORE 30.12.2010 I.E. DATE OF PASS ING ASSESSMENT ORDER AND THEREFORE THE AO WAS WRONG IN HO LDING THAT ALL THE LETTERS HAD CAME BACK AND NO ADVERSE CON FIRMATION WAS MADE BY THE AO ABOUT THE REMAINING 11 PARTIES FROM WHOM BROKERS HAD SUPPLIED THE MATERIEL. IT WAS SUBMITTED THAT THIS IN TOTAL ITY CAN UTMOST BE PROPORTIONATELY PRESUMED THAT 1482 MTRS. OF PURCHASE TRANSACTIONS AGAINST THE TOTAL PURCHASE OF 5223 MTRS. WERE NOT CORRECT. HOWEVER, WHEN NO DEFECT WAS FOUND IN THE SALES MADE AND CONFIRMATIONS OF THE BROKERS WERE ALREADY AVAILABLE, NO ADVERSE VIEW SHOULD BE DRAWN. IV. IT WAS CONTENDED THAT THE CONFIRMATION OF THE BROKERS HAVE BEEN SUBMITTED AND DURING THE ASSESSMENT PROCEEDINGS LIST OF BUYERS ALONG WITH THEIR ADDRESSES WERE FURNISHED AS ALSO, CONFIRMATION FRO M BUYERS AND THE SAID FACT HAS NOT BEEN DISPUTED AND ONCE SALES A RE ACCEPTED CORRESPONDING PURCHASES CANNOT BE DENIED. V. IN RESPECT OF REVISING THE ORIGINAL DEFECTIVE RETURN IT WAS SUBMITTED THAT THIS WAS DONE ON BEING MADE TO UNDERSTAND THAT WHETHER THE INCOME FROM BUSINESS IS PART TIME OR FULL TIME THE SAME HAS TO BE SHOWN AS BUSINESS INCOME. SMT. PANNABEN N. SHAH 8 VI. IT WAS FURTHER SUBMITTED THAT WHERE THE AO CONSIDERS THAT THE RETURN OF INCOME FURNISHED BY THE APPELLANT IS DEFECTIVE, HE SHOULD INTIMATE THE DEFECT TO THE APPELLANT AND GIVE AN OPP ORTUNITY TO THE APPELLANT TO RECTIFY THE DEFECT WITHIN A PERIOD OF FIFTEEN DAYS FROM THE DATE OF SUCH INTIMATION OR WITHIN SUCH FURTHER PERIOD AS AO MAY ALLOW. IT WAS SUBMITTED THAT SUCH SUBMISSION OF THE APPELLANT HAS NOT BEEN OBJECTED BY THE AO. VII. A CCORDINGLY, IT WAS SUBMITTED THAT THE ADDITION SHOULD BE DELETED AND THE APPELLANT SHOULD BE HELD TO BE CARRIED ON BUSINESS AND ONCE THE INCOME HAS BEEN OFFERED U/S.44AF THE SAME SHALL BE ACCEPTED AND NO FURTHER ADDITION CAN BE MADE. VIII. ON WITHOUT PRE JUDICE BASIS, IT WAS SUBMITTED THAT INCOME FROM PART TIME TRADING ACTIVITY OF RS.2,06,503/ - SHOULD BE EXCLUDED WHILE COMPUTING THE INCOME, OTHERWISE THE SAME SHALL STAND TAXED D OUBLY. 4. THE CIT(A), AFTER CONSIDERING THE FACTS AND MATERIAL ON RECORD , DISMIS SED THE APPEAL OF THE ASSESSEE AND HAS GIVEN DETAILED REASONS THEREOF. THE CIT(A) HAS FINALLY CONCLUDED AS UNDER: I. TO XI . XII. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ACTIVITY OF TRADING IS NOT PROVEN. FURTHER FROM THE STATEMENT OF BANK ACCOUNT OF THE APPELLANT WHERE THE CASH DEPOSITS ARE MAJORLY SEEN ON OR AFTER 14.03.2008 AND UP TILL 26.03.2008 IT IS MORE THAN CLEAR THAT THE CASH DEPOSITS ARE NOT SALE PROCEEDS. IF THE ASSESSEE WAS INDULGING INTO TRADING ACTIVITY, SUCH CASH DEPOSITS SHOU LD HAVE BEEN SEEN REGULARLY WHICH IS NOT THE CASE. FURTHER THE A PPELLANT HAS NOT DEMONSTRATED OR SUBMITTED THAT SHE HAS BEEN MAINTAINING ANY OTHER BANK ACCOUNT WHICH COULD HAVE EVIDENCED DEPOSITS OF CASH IN THE MANNER EVIDENCING BUSINESS ACTIVITY OF THE AP PELLANT. FURTHER THE SO CALLED PURCHASES FOR TRADING, WHICH HAVE BEEN STATED TO BE HAVE BEEN MADE IN CASH, HAVE NOT BEEN EXPLAINED AS THERE IS NO DEMONSTRATION OF AVAILABILITY OF CASH AT ALL, WITH THE APPELLANT. THERE ARE NO WITHDRAWALS WHATSOEVER OF CASH FROM SUCH BANK ACCOUNT WHICH COULD HAVE BEEN SMT. PANNABEN N. SHAH 9 USED FOR THE PURPOSES OF PURCHASES OF CLOTH FOR TRADING. UNDER SUCH FACTS AND CIRCUMSTANCES, EVEN IF THE STORY OF THE APPELLANT IS GIVEN ANY CREDENCE ABOUT SHE BEING IN THE TRADING ACTIVITY OF THE CLOTH THEN TOO SHE DOES NOT HAVE ANY EXPLAINED SOURCES FOR PURCHASE S OF SUCH CLOTH FOR THE RESALE. UNDER ANY CIRCUMSTANCES, THE CASH DEPOSITED IN THE BANK ACCOUNT WOULD EITHER BE UNEX PLAINED CASH AVAILABLE WITH THE APPELLANT OR UNDISCLOSED SALE PROCEEDS OF CLOTH TOGETH ER WITH INVESTMENT IN UNEXPLAINED PURCHASES FROM WHATEVER MEANS. IN ANY SITUATION THE ENTIRE MONEY WHICH IS SEEN DEPOSITED IN CASH IN THE BANK ACCOUNT REMAINS UNEXPLAINED AND HAS TO BE TAXED, AS SUCH, IN TOTALITY. XIII. UNDER SUCH FACTS AND CIRCUMSTANCES OF THE CASE, THE CONTENTION OF THE ASSESSEE TO APPLY PROVISIONS OF SECTION 44F AND TAX HER ACCORDINGLY IS NOT FOUND TO BE ACCEPTABLE AS THE SOURCES OF PURCHASES ARE ALSO NOT EXPLAINED. XIV. THE APPELLANT HAS FURTHER CONTENDED REGARDING THE DOUBLE TAXATIO N OF RS.2,06,503/ - AND HAS REQUESTED TO EXCLUDE SUCH SUM FROM THE TOTAL INCOME. IN THIS REGARD, IT IS STATED THAT THE INCOME WHICH HAS BEEN SHOWN IN THE COMPUTATION OF INCOME AS F ROM TRADING ACTIVITY IS NOT BEEN FOUND TO BE FACTUALLY ACCEPTABLE AND ACCORDI NGLY THERE CANNOT BE ANY CREDIT GIVEN FOR ANY - DISCLOSED INCOME IN HER RETURN OF INCOME TOWARDS THE UNEXPLAINED CASH DEPOSIT IN THE APPELLANT'S BANK ACCOUNT. AS SUCH THERE IS NO DOUBLE TAXATION OF THE SAME AMOUN T IN THE HANDS OF THE ASSESSEE. XV. .. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED HIS SUBMISSIONS AS W ERE SUBMITTED BEFORE THE ASSESSING OFFICER AND THE CIT(A) AND STATED THAT THE CASH OF ` 10,36,000, DEPOSITED IN THE COSMOS COOPERATIVE BANK LTD., WAS RECEIVED FROM SALE PROCEEDS OF CLOTH M ATERIAL. HE ALSO SUBMITTED THAT THE A PPELLANT IS ENTITLED TO BE SMT. PANNABEN N. SHAH 10 ASSESSED UNDER THE PROVISIONS OF SECTION 44AF, ALTHOUGH THE SAME WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INCOME. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDERS OF T HE AUTHORITIES BELOW. 7. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT THE ASSESSEE HAS, DURING THE ASSESSMENT YEAR 2006 07, 2007 08 AND 2008 09, HAD CLAIMED INCOME FROM PART TIME TRADING UNDER THE HEAD INCOME FROM OTHER SOURCES . DURING THE INSTANT ASSESSMENT YEAR 2008 09, AGAIN THE ASSESSEE DECLARED INCOME FROM PART TIME TRADING UNDER THE HEAD INCOME FROM OTHER SOURCES IN HER ORIGINAL RETURN OF INCOME FILED WITH THE DEPARTMENT. WHEN THE ASSESSEE WAS S HOW CAUSED TO EXPLAIN THE SOURCES OF DEPOSIT OF CASH OF ` 10,36,000 IN THE BANK ACCOUNT , IT WAS EXPLAINED THAT THE SAME WAS OUT OF THE INCOME / PROCEEDS FROM THE BUSINESS OF TRADING OF CLOTH MATERIAL. HOWEVER, THE PLEA OF THE ASSESSEE THAT SHE WAS ENGAGED IN THE BUSINESS OF TRADING OF CLOTH HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER OR EVEN BY THE LEARNED CIT(A). IN MY OPINION, IT IS IMMATERIAL WHETHER THE INCOME CANVASSED BY THE ASSESSEE FROM TRADING IN CLOTH IS TO BE ASSESSED A S BUSINESS INCOME OR UND ER THE H E AD INCOME FROM OTHER SOURCES . WHAT IS GERMANE IS AS TO WHETHER ASSESSEE HAS BEEN ABLE TO ESTABLISH THE SMT. PANNABEN N. SHAH 11 NATURE AND SOURCE OF THE CASH DEPOSITS FOUND IN THE BANK ACCOUNT. QUITE CLEARLY, THE TRANSACTION OF PURCHASE AND SALE OF CLOTH MATERIAL HAVE N OT BEEN ESTABLISHED BY THE APPELLANT , HAVING REGARD TO THE DISCUSSION IN THE IMPUGNED ORDERS OF THE INCOME TAX AUTHORITY. THERE IS NO CONCRETE EVIDENCE ON RECORD WHICH ESTABLISHES THE EXISTENCE OF CLOTH TRADING ACTIVITY UNDERTAKEN BY THE ASSESSEE. IN ANY C ASE, THE MATERIAL FURNISHED BY THE ASSESSEE COULD NOT ESTABLISH THE NATURE AND SOURCE OF THE DEPOSITS IN THE BANK ACCOUNT, AND THE SAID AMOUNT IS RIGHTLY BROUGHT TO TAX AS UNEXPLAINED AMOUNTS. THUS, THE ISSUE RAISED IN GROUNDS NO.1 TO 4, IS DISMISSED. 8. THE ALTERNATIVE ISSUE RAISED IN GROUND NO.5, IS FOR GIVING CREDIT OF ` 2,06,503, ALREADY OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME . ON THIS ASPECT, I FIND MERIT IN THE PLEA OF THE ASSESSEE AND ACCORDINGLY THE ASSESSING OFFICER IS DIRECTED TO GIVE CREDIT FOR THE INCOME DECLARED IN THE RETURN OF INCOME, WHILE COMPUTING THE TOTAL INCOME. HENCE, G ROUND NO.5, IS ALLOWED. 9. IN THE RESULT, ASSESSEES APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 29.07.2015 SD/ - G.S. PANNU ACCOUNTANT MEMBER MUMBAI, DATED : 29.07.2015 SMT. PANNABEN N. SHAH 12 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI