SHRI VINAY DASHRATH GUPTA, MUMBAI V. INCOME TAX OFFICER 20(3)(4), MUMBAI

ITA 2240/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8809 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Assessee Lawyers: NAVIN KUMAR MISHRA
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 2240 / MUM . /2018 ( ASSESSMENT YEAR : 20 10 11 ) SHRI VINAY DASHRATH GUPTA B 309, TWIN TOWERS CHS MUNISH PARK, RAJMATA JIJABAI ROAD ANDHERI (EAST), MUMBAI 400 093 PAN ARAPG3159P . APPELLANT V/S INCOME TAX OFFICER WARD 20 ( 3 ) ( 4 ) , MUMBAI . RESPONDENT ASSESSEE BY : SHRI NAVINKUMAR MISHRA REVENUE BY : SHRI AJAY PRATAP SINGH DATE OF HEARING 26 .0 2 .2019 DATE OF ORDER 05.04.2019 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 6 TH FEBRUARY 2018, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 37, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010 11 (WRONGLY MENTIONED AS A.Y. 2011 12 IN THE CAUSE TITLE OF FIRST APPELLATE ORDER ). 2 SHRI VINAY DASHRATH GUPTA 2 . IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF RE OPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). HOWEVER, AT THE TIME OF HEARING, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT ON INSTRUCTIONS OF THE ASSESSEE HE DOES NOT WANT TO PRESS THIS GROUND. ACCORDINGLY, GROUND NO.1 IS DISMISSED AS NOT PRESSED. 3 . IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ADDITION OF ` 10,16,300 UNDER SECTION 68 OF THE ACT. 4 . BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDU AL. AS OBSERVED BY THE ASSESSING OFFICER, ASSESSEE DID NOT FILE ITS RETURN OF INCOME. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED INDICATING THAT THE ASSESSEE HAD DEPOSITED CASH OF MORE THAN ` 10 LAKH IN HIS BANK ACCOUNT, THE ASSESSING OFFICER RE OP ENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED HIS RETURN OF INCOME. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN THE SOURC E OF CASH DEPOSIT S IN THE BANK ACCOUNT. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAS UNDERTAKEN A CONTRACT WORK WHICH REQUIRED CASH PAYMEN T TO BE MADE TO DAILY LABOURERS. SINCE, THE ASSESSEE WAS HAVING A CURRENT ACCOUNT , HE OPENED A SAVING S BA NK ACCOUNT TO FACILITATE WITHDRAWAL OF CASH THROUGH 3 SHRI VINAY DASHRATH GUPTA ATM AND KEEP IT HANDY FOR MAKING PAYMENT TO LABOURER. IT WAS SUBMITTED , IN THE PROCESS CASH WAS WITHDRAWN FROM THE CURRENT ACCOUNT AND DEPOSITED IN THE SAVING S BANK ACCOUNT TO FACILITATE DAILY PAYMENT TO LABOURERS. THE ASSESSING OFFICER, HOWEVER, WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND HELD THAT THE CASH DEPOSIT MADE INTO THE SAVINGS BANK ACCOUNT AMOUNTING TO ` 10,16,300, IS IN THE NATURE OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF TH E ACT AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 5 . THOUGH, THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, LEARNED COMMISSIONER (APPEALS) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . THE LEARNED AUTHORISED RE PRESENTATIVE REITERATING THE SUBMISSIONS MADE BEFORE THE DEPARTMENTAL AUTHORITIES CONTENDED , TO MEET THE REQUIREMENT OF DAILY CASH PAYMENT TO BE MADE TO THE LABOURERS AND PURCHASE OF RAW MATERIALS, THE ASSESSEE USED TO WITHDRAW MONEY FROM THE CURRENT ACCOU NT AND DEPOSIT IN THE SAVINGS BANK ACCOUNT. THUS, HE SUBMITTED , THE CASH DEPOSITS MADE IN THE SAVING S BANK ACCOUNT ARE OUT OF CASH WITHDRAWALS MADE FROM THE CURRENT ACCOUNT. IN THIS CONTEXT, HE RELIED UPON THE COPY OF BANK BOOK AND CASH FLOW STATEMENT SUBM ITTED IN THE PAPER BOOK. 4 SHRI VINAY DASHRATH GUPTA 7 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROPERLY EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. THUS, HE SUBMI TTED , THE ADDITION MADE IS JUSTIFIED. 8 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY , IN THE RELEVANT PREVIOUS YEAR THE ASSESSEE HAS MADE CASH DEPOSITS INTO HIS SAVINGS BANK ACCOUNT. WHILE EXPLAINING THE SOURCE OF SUCH CASH DEPOSITS, THE ASSESSEE HAD SUBMITTED THAT SUCH DEPOSITS WERE MADE OUT OF CASH WITHDRAWALS FROM THE CURRENT ACCOUNT. THOUGH , NO SUBSTANTIVE EVIDENCE HAS BEEN SUBMITTED BY THE ASSESSEE TO CONCLUSIVELY CO RELATE WITHDRAWALS WITH THE DEPOSITS, HOWEVER IT IS OBSERVED , THE FACT THAT THE ASSESSEE HAS MADE SUFFICIENT CASH WITHDRAWALS FROM THE CURRENT ACCOUNT HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS). THIS FACT IS VERY MUCH EVIDENT FROM THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) IN PARA 5.3 OF HIS ORDER. THEREFORE, THE AVAILABILITY OF SUFFICIENT CASH AT THE HANDS OF THE ASSESSEE TO MAKE THE DEPOSITS IN THE SA VING BANK ACCOUNT CANNOT BE DOUBTED. MORE SO, WHEN THE DEPARTMENTAL AUTHORITIES HAVE NOT BEEN A BLE TO IDENTIFY THE UTILIZATION OF CASH WITHDRAWALS FROM THE CURREN T ACCOUNT IN ANY OTHER ASSETS / MODE OR MANNER. THAT BEING THE CASE, THE EXPLANATION OF THE ASS ESSEE 5 SHRI VINAY DASHRATH GUPTA THAT BEING A CONTRACTOR HE REQUIRED SUFFICIENT CASH AND THE UNUTILIZED CASH IS AGAIN RE DEPOSITED TO SAVING S BANK ACCOUNT CANNOT BE DISBELIEVED ON MERE PRESUMPTION AND SURMISES. THAT BEING THE CASE, SINCE ASSESSEES CONTENTION HAS NOT BEEN PROVED TO BE FALSE THROUGH PROPER REASONING AND SUPPORTING MATERIAL, THE ADDITION MADE UNDER SECTION 68 OF THE ACT CANNOT BE SUSTAINED. ACCORDINGLY, I DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. THIS GROUND IS ALLOWED. 9 . IN GROUND NO.3, THE ASSESSEE HAS CHALLE NGED DISALLOWANCE OF ` 1,77,218, OUT OF THE EXPENDITURE CLAIMED. 10 . BRIEF FACTS ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT AS AGAINST THE NET RECEIPT OF ` 19,24,352, THE ASSESSEE HAS DEBITED EXPENDITURE TO THE TUNE OF ` 17,72,186. AS ALLEGED BY THE ASSESSING OFFICER, WHEN HE CALLED UPON THE ASSESSEE TO FURNISH SUPPORTING EVIDENCE TO JUSTIFY THE EXPENDITURE CLAIMED THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE ANY EVIDENCE. THEREFORE, THE ASSESSING OFFICER DISALLOWED 10% OUT OF THE TOTAL EXPENDITURE CLAIMED WHICH WORKED OUT TO ` 1,77,218. 11 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE LEARNED COMMISSIONER (APPEALS), HOWEVER, THE ADDITION WAS SUSTAINED. 6 SHRI VINAY DASHRATH GUPTA 12 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUS ED MATERIAL ON RECORD. UNDISPUTEDLY, BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS FAILED TO FULLY JUSTIFY THE CLAIM OF EXPENDITURE WITH SUPPORTING EVIDENCE. THE AFORESAID FACTUAL POSITION REMAINS UNALTERED EVEN BEFORE ME. THAT BEING THE CASE, DISALLOWANC E OF 10% OUT OF THE EXPENDITURE CLAIMED DESERVES TO BE SUSTAINED. THIS GROUND IS DISMISSED. 13 . IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2019 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 05.04.2019 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 (SR. PRIVATE SECRETARY) ITAT, MUMBAI