The ITO, Ward-6(1), Surat V. Shri Arvind Mansukhlal Mehta, Surat

ITA 2165/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94746 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KK SHAH
• Keywords: Unexplained investment; Transactions in derivatives; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO.2165/AHD/2012 (ASSESSMENT YEARS:2009-10) INCOME TAX OFFICER, WARD-6(1), ROOM NO.614, 6 TH FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT APPELLANT VS. SHRI ARVIND MANSUKHLAL MEHTA FLAT NO.302, ANAND APARTMENT, DALAGIYA MOHOLLO, MAHIDHARPURA, SURAT - 395005 RESPONDENT PAN: ABDPM3257F /BY APPELLANT : MS. SANYOGITA NAGPAL, SR. D.R. /BY RESPONDENT : SHRI K. K. SHAH, A.R. /DATE OF HEARING : 02.12.2015 /DATE OF PRONOUNCEMENT :04.12.2015 ORDER PER RAJESH KUMAR, A.M: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-IV, SURAT, DATED 25.06.2012 FOR A.Y. 2009-10 ON FOLLOWI NG GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.58,07,207/- MADE ON ACCOUNT OF UNACCOUNTED CREDIT ENTRIES IN THE UNDISCLOSED BANK ACCOUNT. 2 ITA NO.2165/ AHD/ 2012 (ITO VS. SHRI ARVIND MANSUK HLAL MEHTA), A.Y. 09-10 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HA S NOT APPRECIATED THE ACT OF THE A.O. AND IN THIS CASE THE DEPARTMENT WAS DETECTED THE UNDISCLOSED BANK ACCOUNT OF ASSESSEE AND A.O. WAS MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN UNDISCLOSED BANK ACCOUNT, FOR DELETING THE ADDITION MADE BY THE A.O. OF RS.58,07,207/-. 2. THE COMMON ISSUE RAISED IN BOTH THE GROUNDS IS A GAINST THE DELETION OF ADDITION OF RS.58,07,207/- BY THE CIT(A). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS ENGAGED IN THE BUSINESS OF TRADING IN DIAMONDS AND FILED HIS RETUR N OF INCOME ON 15.10.2009 DECLARING AN INCOME OF RS.2,46,127/- AND AGRICULTUR AL INCOME OF RS.1,68,750/-. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION. 3.1 THE LD. A.O. FRAMED THE ASSESSMENT U/S.143(3) O F THE ACT VIDE ORDER DATED 31.12.2011 BY MAKING AN ADDITION OF RS.58,07, 207/-. THE LD. A.O. AFTER CALLING FOR INFORMATION U/S.133(6) FOUND THAT THE ASSESSEE HAD A SAVINGS BANK ACCOUNT WITH ADARSH CO-OP. BANK LTD., SURAT, I N WHICH THERE WERE CASH DEPOSITS OF RS.37,73,000/- AND OTHER CREDITS B Y CLEARING AMOUNTING TO RS.20,32,149/-. ACCORDINGLY, THE LD. A.O. MADE ADD ITIONS ON ACCOUNT OF CASH DEPOSITS OF RS.37,73,000/- AND CREDITS/TRANSFER BY CLEARING OF RS.20,32,149/- STATING THE SAME TO BE UNEXPLAINED INVESTMENT U/S.6 9 OF THE ACT. THE LD. A.O. ALSO ADDED RS.2,058/- ON ACCOUNT OF INTEREST NOT DI SCLOSED BY THE ASSESSEE ON THE SAID BANK ACCOUNT. 4. THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER: 4. I HAVE GONE THROUGH THE FACTS OF THE CASE. THE ASSESSEE HAS SHOWN THAT RS.18,17,739/- WAS DUE FROM M/S. JAINAM SHARES AT THE END OF THE PRECEDING YEAR OUT OF WHICH MONEY WAS RECEIVED DURING THE YEAR BY CHEQUE AND DEPOSITED IN T HE BANK ACCOUNT AND SUBSEQUENTLY WITHDRAWN ON DIFFERENT DATES DUE TO WHICH THE CASH ON HAND OF RS.4,15,187/- AS ON 31.03.2008 INCREASED. THIS AVAILABLE CASH ON HAND IS CLAIMED AS DEPOSITED BACK IN THE BANK ACCOUNT. SIMILARLY, THE CHEQUE DEPOSITS HAVE BEEN EXPLAINED AS RECEIVED FROM M/S. JAINAM SHARES AND ALSO ON ACCOUNT OF LOANS, THE DETAILS OF WHICH WERE PROVIDED TO THE A.O. INSTEAD OF INVESTIGAT ING THE CLAIM, THE SAME WAS REJECTED MERELY ON THE GROUND THAT THE ASSESSEE HAS SUFFICIENT, RATHER HUGE, CASH BALANCE ON HAND AND DID NOT REQUIRE TO WITHDRAW MORE. IT HAS 3 ITA NO.2165/ AHD/ 2012 (ITO VS. SHRI ARVIND MANSUK HLAL MEHTA), A.Y. 09-10 NOT BEEN SHOWN BY THE A.O. THAT THE CASH WITHDRAWN FROM THE BANK HAD BEEN INVESTED / EXPENDED AND WAS NOT AVAILABLE FOR DEPOSIT WITH THE ASSESSEE ON THE RELEVANT DATES. I ALSO FAIL TO UNDERSTAND WHAT THE A.O. MEANS BY SAYING THAT THE ASSESSEE HAS NOT PROVED THE AVAILABILITY OF CASH ON HAND WITH SUPPORTING EVIDENCE ESPECIALLY WHEN CASH BOOKS WAS PRODUCED EVIDENCING THE SAME. ONCE THE SOURCE OF DEPOSITS IN THE ACCOUNT, IN A PARTICULAR YEAR, IS EXPLAINED, THE SAME CANNOT BE CONSIDERED AS INCOME OF THE YEAR UNLESS THE EXPLANATION IS SHOWN TO BE FAL SE ON THE BASIS OF ENQUIRY AND INVESTIGATION. WHAT CAN THEN BE ADDED IS ONLY THE INCOME ARISING FROM THE TRANSACTIONS IN THE ACCOUNTS IF THESE HAVE NOT BEEN OFF ERED. THE INCOME FROM THE TRANSACTIONS IN THE BANK ACCOUNT HAS BEEN SHOWN TO BE RS.2,33,486/- FROM F&O ACTIVITY WITH M/S. JAINAM SHARES. THIS INCOME ARR IVED BY THE ASSESSEE HAS NOT BEEN SHOWN TO BE INCORRECT; IT HAS ONLY BEEN DISBEL IEVED WITHOUT ANY INQUIRY OR INVESTIGATION. ADMITTEDLY THE INCOME FROM SUCH F & O ACTIVITY IN SHARES AND INTEREST IN THE ACCOUNT HAS NOT BEEN OFFERED TO TAX AND THEREFORE THE ADDITION TO THE EXTENT OF AGGREGATE OF THESE TWO INCOMES, I.E. RS.2,35,544/- IS REQUIRED TO BE RETAINED. THE ADDITION OF RS.2,35,544/- IS CONFIRMED. THE ASSESSEE GETS RELIEF ACCORDINGLY. 5. THE LD. D.R. RELIED HEAVILY ON THE ORDER OF A.O. AND SUBMITTED THAT THE BOOKS OF ACCOUNTS PRODUCED BEFORE THE A.O. CLEARLY SHOWED THAT THE ASSESSEE MADE WITHDRAWAL FROM THE BANK ACCOUNT WITHOUT UTILI ZING THE CASH IN HAND AVAILABLE WITH THE ASSESSEE IN THE CASH BOOK AND TH EREFORE, THE CASH IN HAND INCREASED TO RS.22,85,094/- ON 23.06.2008. BESIDE THE LD. D.R. SUBMITTED THAT THE ASSESSEE ALSO MADE INVESTMENTS AS CLAIMED BY THE ASSESSEE ON 31.03.2009 BY WAY OF AGRICULTURAL ADVANCE RS.13,51, 000/- ADVANCE MISCELLANEOUS DEPOSIT RS.4 LACS AND JAINAM SHARES C ON. P. LTD. 21,70,765/-. THE ASSESSEE ALSO DID NOT FURNISH THE COMPLETE ADDR ESS OF THE ABOVE WITH WHOM ASSESSEE ENTERED INTO VARIOUS TRANSACTIONS. 6. THE LD. A.R. OF THE ASSESSEE WHILE ARGUING THE C ASE BEFORE US RELIED ON THE ORDER OF CIT(A) BY SUBMITTING THAT ALL THE CASH TRANSACTIONS INTO THE BANK AND OTHER DEPOSITS WERE FULLY VOUCHED WITH THE CASH BOOK AND LEDGER WHICH WERE PRODUCED BEFORE THE A.O. THE CASH WITHDRAWN F ROM THE BANKS ON VARIOUS DATES WAS TO BE UTILIZED FOR THE PURPOSE OF PURCHASING LAND WHICH DID NOT MATERIALIZE AND THEREFORE, AT ONE POINT OF TIME , THE CASH ACCUMULATED TO RS.22,85,094/-. THE LD. A.R. FURTHER SUBMITTED THA T THE A.O. NEVER ASKED FOR THE ADDRESSES OF THE PARTIES TO WHOM THE ADVANCES W ERE PAID, WHICH WERE OUTSTANDING ON 31.03.2009. IT WAS ALSO SUBMITTED T HAT MONEY DUE FROM M/S. 4 ITA NO.2165/ AHD/ 2012 (ITO VS. SHRI ARVIND MANSUK HLAL MEHTA), A.Y. 09-10 JAINAM SHARES WERE RS.18,17,739/- AS ON 31.03.2008 WHICH WAS RECEIVED DURING THE YEAR AND CREDITED IN THE SAID BANK ACCOU NT BY WAY OF CLEARING. SO FAR AS THE ISSUE OF NON DISCLOSING THE BANK ACCOUNT IN THE RETURN OF INCOME AS STATED BY THE A.O. IS CONCERNED THE LD. COUNSEL SUB MITTED THAT TILL THE PREVIOUS YEAR ALL THE REQUIRED DETAILS WITH RESPECT TO THIS SAVINGS ACCOUNT WERE DULY DISCLOSED, SUCH AS, INTEREST INCOME ON TH IS ACCOUNT IN THE RETURN FILED IN THE PRECEDING PREVIOUS YEAR. HOWEVER, DUR ING THE CURRENT YEAR, THE INTEREST WAS INADVERTENTLY LEFT OUT FROM BEING INCL UDED IN THE RETURN OF INCOME. THUS, THE ALLEGATION OF THE A.O. THAT THE SAVINGS ACCOUNT WAS NOT SHOWN IN THE RETURN OF INCOME WAS ALSO HYPOTHETICAL AND UNFOUNDED AS THERE WAS NO REQUIREMENT OF SHOWING THE BANK ACCOUNT IN R ETURN OF INCOME. IN VIEW OF THESE FACTS, THE LD. COUNSEL SUBMITTED THAT THE ORDER OF CIT(A) BE UPHELD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD PRODUCED CAS H BOOK AND LEDGER SUPPORTING ALL THE ENTRIES OF CASH DEPOSITS AND CLE ARING CREDIT IN THE SAVINGS BANK ACCOUNT WITH ADARSH CO-OP. BANK LTD., SURAT. THE LD. A.O. MADE THE ADDITIONS OF RS.37,73,000/- DEPOSITED INTO BANK ON VARIOUS DATES BY CASH AND ALSO ADDED RS.20,32,149/-, WHICH WERE CREDITED IN T HE SAID BANK ACCOUNT ON THE GROUND THAT BOOKS OF ACCOUNTS OF THE ASSESSEE W ERE STAGE MANAGED WHEREAS ON OTHER HAND, THE LD. CIT(A) SPECIFICALLY OBSERVED THAT MONEY DUE FROM M/S. JAINAM SHARES AT THE END OF THE PRECEDING PREVIOUS YEAR WAS RS.18,17,739/- WHICH WERE RECEIVED DURING THE YEAR ON DIFFERENT DATES AND WITHDRAWN ON VARIOUS DATES. THE LD. CIT(A) ALSO NO TED THAT CHEQUE DEPOSITS HAD BEEN EXPLAINED AS RECEIVED FROM M/S. JAINAM SHA RES AND AGAINST LOANS RECEIVED. THE DETAILS THEREOF STANDS PROVIDED TO T HE A.O. AND THE A.O. INSTEAD OF INVESTIGATING THE SAME, REJECTED THE SUB MISSION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE MADE HUGE WITHDRAWAL O F CASH REPEATEDLY WHEN THE SAME WAS NOT REQUIRED. THE A.O. ALSO FAILED TO SHOW THAT MONEY WITHDRAWN FROM THE BANK WAS INVESTED /EXPENDED AND WAS NOT FACTUALLY 5 ITA NO.2165/ AHD/ 2012 (ITO VS. SHRI ARVIND MANSUK HLAL MEHTA), A.Y. 09-10 AVAILABLE ON THE VARIOUS DATES. WE ALSO NOTE THAT THE A.O. HAD FAILED TO UNDERSTAND THE FACTUAL POSITION WITH REGARD TO THE DEPOSITS INTO THE BANK ON VARIOUS DATES WHICH WERE EVIDENCED BY THE CASH BOOK PRODUCED BY THE ASSESSEE. WE ARE ALSO IN AGREEMENT WITH THE CIT(A) THAT ONCE THE SOURCE OF MONEY DEPOSITED IN THE BANK IS EXPLAINED BY THE ASS ESSEE, SAME CANNOT BE CONSIDERED AS INCOME OF THE ASSESSEE DURING THE YEA R UNLESS PROVED OTHERWISE ON THE BASIS OF ENQUIRY AND INVESTIGATION BY THE A. O. THE ASSESSEE HAS ALSO SHOWN RS.2,33,486/- AS INCOME FROM F & O ACTIVITY W ITH M/S. JAINAM SHARES RELATING FROM THE TRANSACTION MADE IN THE BANK WITH ADARSH CO-OP. BANK LTD., SURAT. ON THE BASIS OF THESE FACTS AND CIRCU MSTANCES, THERE IS NO REASON TO INTERFERE IN THE ORDER PASSED BY THE CIT(A) AND THEREFORE, WE DISMISS THE APPEAL BY THE REVENUE. THE A.O. IS DIRECTED ACCORD INGLY. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 04 TH DAY OF DECEMBER, 2015. SD/- SD/- (SHAILENDRA KUMAR YADAV) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 04/12/2015 TRUE COPY / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) , -./ 00'(1 '( 1 23& / DR, ITAT, AHMEDABAD 4 /56 78 / GUARD FILE. BY ORDER / 1 / 2 % '( 1 23&