ITO WD 22(2)-4, NAVI MUMBAI V. RAVI KUMAR RANJAN PANDAYAN, MUMBAI

ITA 2299/MUM/2011

• Counselvise Citation: 229919914 RSA 2011
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 09-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: SHRIRAM BAJAJ
• Keywords: Unexplained cash credit; Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, D, MUMBAI BEFORE SHRI G E VEERABHADRAPPA, PRESIDENT AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I T A NO: 2299/MUM/2011 (ASSESSMENT YEAR: 2007-08) INCOME TAX OFFICER 22(2)-4, MUMBAI APPELLANT VS RAVI KUMAR RANJAN PANDAYAN, MUMBAI RESPONDENT (PAN: ALZPP3150A) ASSESSEE BY: MR SHRIRAM BAJAJ REVENUE BY: MR C G K NAIR DATE OF HEARING: 11.06.2012 DATE OF PRONOUNCEMENT: 15.06.2012 O R D E R G E VEERABHADRAPPA, PRESIDENT: THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER DATED 31.01.2011 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) 33, MUMBAI, FOR THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL THE REVENUE IS DISPUTING THE DELE TION OF THE ADDITION OF ` 23,89,778/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF UNEXPLAINED CASH CREDIT / DEPOSITS IN THE ASSES SEES BANK ACCOUNT AND DELETION OF A DISALLOWANCE OF ` 2,21,550/- BEING 25% OF PURCHASES MADE. THE MAIN REASON FOR THE GRIEVANCE IS THAT THE LEARNED CIT(A), IN DELETING THE ABOVE DISALLOWANCES , HAS MAINLY GONE BY THE ADDITIONAL EVIDENCES, IN CONTRAVENTION OF PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962. ITA NO: 2299/MUM/2011 2 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE, WHO STRONGLY ARGUED ON THE BASIS OF THE GROUNDS OF APPEAL TAKEN BEFORE US. HE STRONGLY SUBMITTED THAT CERTAIN FRES H EVIDENCES WERE ADMITTED BY THE CIT(A) IN CONTRAVENTION OF THE SAID RULE 46A OF THE INCOME TAX RULES, 1962. THE LEARNED COUNSEL FOR TH E ASSESSEE, ON THE OTHER HAND, STRONGLY JUSTIFIED THE IMPUGNED ORD ER OF THE CIT(A) IN THE LIGHTS OF THE DISCUSSIONS THEREIN. 4. THE PROVISIONS OF RULE 46A OF THE INCOME TAX RUL ES, 1962, STATE THAT THE ASSESSEE SHALL NOT BE ENTITLED TO PR ODUCE BEFORE THE FIRST APPELLATE AUTHORITY, ANY EVIDENCE, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BE FORE THE ASSESSING OFFICER, EXCEPT WHERE THE ASSESSING OFFIC ER REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; O R WHERE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRO DUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER; OR WHERE THE ASSESSEE WAS PREVENTED BY SUF FICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVI DENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR WHERE THE ASSE SSING OFFICER HAS MADE AN ORDER APPEALED AGAINST WITHOUT GIVING S UFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE RELE VANT TO ANY GROUND OF APPEAL. UNDER SUB-RULE (3) THEREOF, THE CIT(A) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNLESS THE ASSESSING OFFICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY O N THE ADDITIONAL EVIDENCES PRODUCED. 5. IN THIS CASE BEFORE US, AT PARA 4.4 OF THE IMPUG NED ORDER, THE LEARNED CIT(A) HAS, APART FROM GOING THROUGH THE AS SESSMENT ITA NO: 2299/MUM/2011 3 RECORDS, DISCUSSED THE MATTER WITH THE ASSESSING OF FICER AS REGARDS THE BANK ACCOUNT. EVEN THE ASSESSING OFFICER HAS E XTRACTED THE CREDITS FROM THE BANK ACCOUNT, FROM THE STATEMENTS FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. WHAT ALL TH E CIT(A) HAS DONE IS THAT HE HAS APPRECIATED THE SAME EVIDENCE B Y GETTING INTO THE PEAK OF THOSE CREDITS. WE, THEREFORE, DO NOT AGREE WITH THE STAND OF THE REVENUE THAT CERTAIN FRESH EVIDENCES H AVE BEEN ADMITTED IN VIOLATION OF RULE 46A OF INCOME TAX RUL ES, 1962. BUT THE ASSESSING OFFICER HAS ALL ALONG BEEN MAINTAININ G A STAND THAT EACH CREDIT IN THE BANK ACCOUNT REQUIRES AN ADDITIO N WHEREAS THE CIT(A) HAS GONE BY THE PEAK OF THE AMOUNTS. FROM T HE DISCUSSIONS IN THE ORDER IT IS NOT CLEAR WHETHER THE CIT(A) HAS CORRECTLY WORKED OUT THE PEAK NOR THE ASSESSEE IS ABLE TO PRODUCE BE FORE US THE BANK ACCOUNT DETAILS, SO THAT WE COULD HAVE CONVINC ED ABOUT ITS CORRECTNESS. FOR THIS LIMITED PURPOSE WE RESTORE T HE FIRST ADDITION TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO VERIFY THE CORRECTNESS OF THE PEAK CREDIT. IN THE LIGHT OF TH IS DISCUSSION, WE HAVE IMPLIEDLY ACCEPTED IN PRINCIPLE THAT THE WHOLE TRANSACTIONS IN THE BANK ACCOUNT CANNOT BE SUBJECT TO A STRAIGHT AD DITION. AFTER ALL, WHAT COULD BE SUBJECT OF ADDITION IS THE PEAK AMOUN T, HAVING REGARD TO THE FACT THAT THERE ARE DEPOSITS AND WITHDRAWALS IN THE SAME BANK ACCOUNT. 6. AS REGARDS THE SECOND ADDITION, THE ASSESSING OF FICER HAS ONLY MADE AN ADHOC DISALLOWANCE ON THE GROUND THAT THE GENUINENESS OF THE TRANSACTION IS NOT VERIFIABLE. THE CIT(A), HOWEVER, GIVES A FINDING THAT THE ASSESSEE IS IN TH E BUSINESS OF ITA NO: 2299/MUM/2011 4 PURCHASE AND SALE OF GOLD AND SILVER AND THE ASSESS ING OFFICER SHOULD HAVE VERIFIED THE QUANTITIES OF TRANSACTION BEFORE MAKING ANY SUCH ADHOC DISALLOWANCE. SINCE THE DISALLOWANCE IT SELF IS NOT SUPPORTED BY ANY EVIDENCE OR MATERIAL, WE HAVE NO H ESITATION IN UPHOLDING ITS DELETION. 7. ACCORDINGLY THE APPEAL IS TO BE TREATED AS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE 2012. SD/- SD/- (SATBEER SINGH GODARA) (G E VEERABHADRAPPA) JUDICIAL MEMBER PRESIDENT MUMBAI, DATED 15 TH JUNE 2012 SALDANHA COPY TO: 1. RAVI KUMAR RANJAN PANDAYAN ARFA HOUSE, R C MARG, VASHI NAKA CHEMBUR, MUMBAI 400 074 2. ITO 22(2)-4, MUMBAI 3. CIT-22, MUMBAI 4. CIT(A)-33, MUMBAI 5. DR D BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI