ITO 17(3)(2), MUMBAI V. HAJI RAFIQ NATHANI, MUMBAI

ITA 2207/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62702 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 16-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARFARAZ H NATHANI SON OF
• Assessee Lawyers: V V SHASTRI
• Keywords: Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI B. R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 2207/MUM/2011 ASSESSMENT YEAR 2006-07 ITO 17(3)(2), R. NO.611, 6 TH FLOOR, PIRAMAL CHAMBERS, JIJEEBHOY LANE, OPP. PAREL POST OFFICE, MUMBAI 400 012 VS. SHRI HAJI RAFIQ NATHANI 108/116, NOORANI PATEL BUILDING, 2 ND FLOOR, ROOM NO. 32, DIMTIMKAR ROAD, MUMBAI 400 008 PAN NO: AACPN 0189 K (APPELLANT) ( RESPONDENT) ASSESSEE BY : SHRI V. V. SHASTRI REVENUE BY : SHRI SARFARAZ H. NATHANI (SON OF ASSESSEE) DATE OF HEARING : 16-07-2012 DATE OF PRONOUNCEMENT: 18-07-2012 O R D E R PER RAJENDRA, A.M. CHALLENGING THE ORDER DTD. 20.12.2010 OF THE CIT (A )-29, MUMBAI, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING ASSESSEES CLAIM THOUGH THE EVIDE NCES SUBMITTED ARE NOT ADEQUATE TO SUPPORT THE GENUINENESS OF THE CREDITS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN TREATING THE DOUBTFUL TRANSACTION AS GENUI NE WITHOUT APPRECIATING THE FACTS OF THE CASE & WITHOUT TAKING INTO ACCOUNT THE RATIO LAID DOWN BY VARIOUS COURTS ON THE ISSUE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT( A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTO RED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2 ITA NO.2207/MUM/2011 SHRI HAJI RAFIQ NATHANI 2. RETURN OF INCOME IN THIS CASE WAS FILED ON 21-1- 2007 DECLARING AN INCOME OF RS.99,840/-, WHEREAS, ASSESSMENT WAS FINALISED ON 3 0.12.2008 BY THE ASSESSING OFFICER (AO) U/S.143 (3) OF THE INCOME-TAX ACT,1961(ACT) DE TERMINING TOTAL INCOME AT RS.35.16 LAKHS. 3. THE ASSESSEE, AN INDIVIDUAL, DERIVED INCOME FROM ACCOUNTS WRITING, FILING TAX RETURNS, INTEREST AND DIVIDEND. DURING THE ASSESSM ENT PROCEEDINGS AO FOUND THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS.34,16,877/- I N HIS SB A/C. NO 211 WITH MEMON CO- OP BANK LTD., NULL BAZAR BRANCH, MUMBAI. AO CONFRO NTED THE ASSESSEE WITH THIS INFORMATION AND ASKED HIM TO FURNISH THE SOURCE OF DEPOSITS ALONG WITH SUPPORTING EVIDENCE. HE FURTHER DIRECTED THE ASSESSEE TO EXPLAIN AS TO W HY THIS SUM OF MONEY SHOULD NOT BE TREATED AS HIS INCOME FOR THE YEAR UNDER CONSIDERAT ION AS PROVIDED U/S. 68 OF THE ACT. THE ASSESSEE VIDE HIS LETTER DATED 24-11-2008 SUBMITTED THAT THE SAID DEPOSITS HAD CORRESPONDING WITHDRAWALS FOR PAY ORDERS ALONG WITH BANK CHARGES. IT WAS FURTHER SUBMITTED THAT THE CASH DEPOSITED IN THE BANK A/C. HAD BEEN RECEIVED FROM V ARIOUS PARTIES ON DIFFERENT DATES FOR THE PURPOSE OF TAKING OUT PAY ORDERS ON THEIR BEHALF AS THEY ARE NOT WELL VERSED WITH THE BANKING PROCEDURES INVOLVED. THE ASSESSEE, VIDE LETTER DAT ED 24-12-2008 STATED THAT ALL THE PARTIES WERE ASSESSED TO TAX THAT ALL OF THEM HAD VALID PAN S, THAT THEY HAD CONFIRMED THAT THEY PAID CASH TO ASSESSEE, THAT THEY ALSO CONFIRMED THAT THE CASH AMOUNT RECEIVED WAS UTILISED BY THE ASSESSEE FOR BANK DRAFT PURPOSE ON THEIR BEHALF, TH AT THE CASH AMOUNT PAID BY THEM WHOLLY AND EXCLUSIVELY PAID OUT OF THEIR OPENING BALANCES OF CASH IN HAND AS ON 1-4-2005. AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD AO MAD E AN ADDITION AMOUNTING TO RS.34.16 LAKHS TO THE INCOME OF THE ASSESSEE. 4. ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELL ATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER HE HELD THAT THE AMOUNT IN QUESTION WAS RECEIVED FROM 19 PARTIES, TH AT IN EVERY CASE PAN WAS FURNISHED BY THE ASSESSEE, THAT IN ALL THE CASES CONFIRMATION FR OM THE PERSONS CONCERNED WAS ALSO FURNISHED, THAT COPIES OF ACKNOWLEDGEMENTS OF RETUR NS FOR THE AYS 2006-07 AND 2005-06 WERE ALSO FURNISHED, THAT COPIES OF CAPITAL ACCOUNT S AND BALANCE SHEET WERE SUBMITTED BY THE ASSESSEE, THAT THE CASH WAS USED FOR PURCHASING PAY ORDERS, THAT THE END USERS OF THE CASH WERE THE PARTIES WHO HAVE ADVANCED THE SAID CASH TO THE APPELLANT. HE FURTHER HELD THAT ALL 3 ITA NO.2207/MUM/2011 SHRI HAJI RAFIQ NATHANI THE THREE INGREDIENTS FOR INVOKING THE PROVISIONS O F SECTION 68 OF THE ACT WERE ABSENT IN THE CASE UNDER CONSIDERATION. HE HELD THAT ANYTHING HA D TO BE TAXED IT WAS TO BE TAXED IN THE HANDS OF THE PERSONS WHO HAVE ADVANCED THE SAID CAS H TO THE ASSESSEE FOR PURCHASING DRAFTS. FINALLY, HE HELD THAT THERE COULD NOT BE ANY ADDITI ON IN THE HANDS OF THE APPELLANT. 5. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) RELI ED UPON THE ORDER OF THE AO. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FAA HAD, REFERRING TO THE LETTER DATED 24.12.2008 OF THE ASSESSEE, HAD ARRIVE D AT A DEFINITE CONCLUSION THAT THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO NS HAD BEEN SUFFICIENTLY PROVED. THE ASSESSEE HAD FURNISHED THE PROOF THAT ALL THE PARTI ES WERE ASSESSED TO TAX AND HAD CONFIRMED THE FACT THAT CASH WAS GIVEN TO THE ASSESSEE TO PUR CHASE THE BANK DRAFT ON THEIR BEHALF. BESIDES THE CONFIRMATION LETTERS OF THE VARIOUS PAR TIES, THE ASSESSEE HAD ALSO FILED THE COPIES OF THE RECEIPTS ACKNOWLEDGING THE RECEIPT OF BANK D RAFT IN THEIR NAMES. THE AO HAS NOT NEGATED THESE FACTS. FAA ALSO FOUND THAT THERE WAS SUFFICIENT OPENING BALANCE ON 31.03.2005 BEING RS.4.14 LAKHS IN THE HANDS OF THE ASSESSEE. HE FOUND THAT THE ASSESSEE HAD RECEIVED FEES FOR FILING THE RETURNS OF INCOME AND SAME WAS OFFERED FOR TAX. IN ADDITION TO IT, HE FOUND THAT THERE WAS A CASH WITHDRAWAL ALSO FROM THE SAME ACCOUNT AMOUNTING TO RS.1.81 LAKHS. 6. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE C ASE WE ARE OF THE OPINION THAT THE ORDER PASSED BY THE FAA DOES NOT NEED ANY INTERFERE NCE. GROUND NOS. 1 TO 4 FILED BY THE AO ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE AO STANDS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JULY , 2012 SD/- (B. R. MITTAL) JUDICIAL MEMBER SD/- (RAJENDRA) ACCOUNTANT MEMBER MUMBAI, DATED :18 TH JULY, 2012 4 ITA NO.2207/MUM/2011 SHRI HAJI RAFIQ NATHANI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),XIV, MUMBA I 4. COMMISSIONER OF INCOME TAX, 14 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI