ITO 13(3)(2), MUMBAI V. RAJESH P. GHATALIA (HUF), MUMBAI

ITA 2318/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2015 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-12-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 22-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 68; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, J UDICIAL MEMBER ./ I.T.A. NO. 2317 & 2318/MUM/2011 ( / ASSESSMENT YEAR : 2002 - 03 AND 2003 - 04 ) INCOME TAX OFFICER 13(3)(2), ROOM NO.428, 4 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 / VS. RAJESH P GHATALIA, - HUF, P ROF. NIMIT PETROLELUM, 107, SAHAKAR BHAVAN, 340/48, NARSI NATHA STREET, MASJIT BUNDER, MUMBAI - 400009 ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO. 2898 & 2899/MUM/2011 ( / ASSESSMENT YEAR : 2002 - 0 3 AND 2003 - 04 ) RAJESH P GHATALIA, - HUF, B - 1501, HIGHLAND PARK, LOKHANDWALA COMPLEX, ANDHERI (W), MUMBAI - 400053 / VS. INCOME TAX OFFICER 13(3)(2), ROOM NO.428, 4 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAAHRO554A / REVENUE BY : SHRI A K KARDAM / ASSESSEE BY BY : NONE / DATE OF HEARING : 17 .12. 2015 / DATE OF PRONOUNCEMENT : 17. 12. 2015 O R D E R PER B.R.BASKARAN,AM : THESE CROSS - APPEALS ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 24, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2002 - 03 AND ITA NO 2317 & 2318 / MUM/ 11 AND 2898 & 2899/M/11 2 2003 - 04. SINCE THE ISSUE S URGED I N THESE APPEALS ARE IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2 . NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH THE NOTICES OF HEARING WERE SENT ON MORE THAN ONE OCCAS ION. HENCE, WE PROCEED TO DISPOSE OF THE APPEALS EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3 . WE HEARD THE LD. DR AND PERUSED THE RECORD. THE ASSESSEE WAS RUNNING A BUSINESS UNDER THE NAME AND STYLE OF M/S NIMIT PETROLEUM IN HIS CAPACITY OF HUF . THE ASSESSEE FILED RETURN OF INCOME LAST FOR THE ASSESSMENT YEAR 1999 - 2000. THEREAFTER IT DID NOT FILE RETURNS OF INCOME. THE ADDITIONAL DIRECTOR OF INCOME TAX RECEIVED INFORMATION FROM THE CRIME BRANCH, MUMBAI POLICE THAT THE ASSESSEE AND SOME OTHER PE RSONS WERE INVOLVED IN ADULTERATION OF PETROLEUM PRODUCTS. IT WAS FURTHER NOTICED THAT THE ASSESSEE IS MAINTAINING A BANK ACCOUNT WITH CORPORATION BANK IN WHICH HUGE AMOUNT OF DEPOSITS WERE SEEN MADE. HENCE, THE AO REOPENED THE ASSESSMENT FOR BOTH THESE Y EARS BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT . SINCE THE ASSESSEE DID NOT RESPOND TO THE NOTICE S ISSUED , THE AO COMPLETED THE ASSESSMENT S OF BOTH THE YEARS BY ESTIMATING INCOME FROM BUSINESS AT RS.90000/ - PER YEAR AND ALSO BY ASSESSING THE AGGREGATE AMOUNT OF DEPOSITS MADE IN THE BANK ACCOUNT IN BOTH THE YEARS AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE AGGREGATED AMOUNT DEPOSITED BY THE ASSESSEE WAS RS.7 0 .40 LAKHS AND RS.42.47 LAKHS RESPECTIVELY FOR THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04 RES PECTIVELY. 4 . IN THE APPELLATE PROCEEDINGS, THE LD.CIT(A) NOTICED THAT THE ASSESSEE HAS BEEN EXONERATED FROM THE CHARGES OF ADULTERATION. THE ASSESSEE ALSO PLEADED BEFORE THE LD. CIT(A) THAT THE DEPOSITS MADE IN THE BANK ACCOUNT ITA NO 2317 & 2318 / MUM/ 11 AND 2898 & 2899/M/11 3 REPRESENTS SALE PROCEEDS AND THE PAYMENT S TOWARDS PURCHASES HAVE BEEN MADE BY WAY OF ACCOUNT PAYEE CHEQUES. HENCE, T HE LD. CIT(A) PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE IN BOTH THE YEARS AS UNDER : A) 10% OF AGGREGATING AMOUNT OF DEPOSITS AS UNEXPLAINED INVESTMENT; B) 5% OF THE AMOUNT OF DEPOSITS AS NET PROFIT; AND C) 2% OF THE AMOUNT OF DEPOSITS AS ADDITIONAL INCOME EARNED BY THE ASSESSEE. 5 . THE REVENUE IS IN APPEAL BEFORE US, CHALLENGING THE RELIEF GRANTED BY THE LD.CIT(A) AND THE ASSESSEE IS IN APPEAL BEFORE US CHA LLENGING THE INCOME ESTIMATED BY THE LD. CIT(A). 7 . HAVING HEARD THE LD. DR AND ALSO UP ON PERUSAL OF THE ORDER S PASSED BY THE LD. CIT(A), WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS TAKEN A JUDICIOUS VIEW OF THE MATTER S IN BOTH THE YEARS UNDER CONSIDERATIO N. ACCORDINGLY , WE ARE OF THE VIEW THAT THE ORDERS PASSED BY THE LD. CIT(A) DO NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, WE UPHOLD HIS ORDER S FOR BOTH THE YEARS UNDER CONSIDERATION. 8 . IN THE RESULT, THE APPEALS FILED BY THE REVENUE AND BY THE ASSESSE E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 17 TH ,DEC, 2015 . SD SD ( / SANDEEP GOSAIN) ( . . / B.R.BASKARAN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI ; DATED .. 17TH , DEC,2015 . . ./ SRL , SR. PS ITA NO 2317 & 2318 / MUM/ 11 AND 2898 & 2899/M/11 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI