Mohmadrafiq Malangbhai Dudhwala, Vadodara V. The Income Tax Officer, Ward-3(1)(3), Vadodara

ITA 2395/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4464 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 20-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: PF JAIN; BHARAT SHUKLA ARS
• Keywords: Corroborative evidences
• Section: 143(3); 147; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ./ITA NO. 2395/AHD/2016 ( / ASSESSMENT YEAR : 2009-10) SHRI MOHAMADRAFIZ MALANGBHAI DUDHWALA PROP. NEW RAZZ AUTOMOBILES OPP: CITY POLICE STATION PANIGATE, VADODARA / VS. THE ITO WARD-3(1)(30 VADODARA ./ ./ PAN/GIR NO. : ABQPD 5973 J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : S/SHRI P.F. JAIN & BHARAT SHUKLA ARS / RESPONDENT BY : SHRI G.C. DAXINI, SR.DR / DATE OF HEARING 08/05/2019 !'# / DATE OF PRONOUNCEMENT 31/05/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)2, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-2 /337/15-16 DATED 22/06/2016 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 22/01/2015 RELEVANT TO ASSESSMENT YEAR (AY) 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A)-II, VADODARA ERRED IN CONFIRMING AN ADDITION OF RS.383000/- ON ACCOUNT OF DIFFERENCE IN ITA NO.2375/AHD/2016 MOHAMEDRAFIQ MALANGBHAI DUDHWALA VS. ITO ASS T.YEAR 2009-10 - 2 - UNDISCLOSED INCOME. IT IS PRAYED TO CONSIDER THAT CASH RECEIPTS FOR RS.120000/- AS SALE CONSIDERATION OF SHOP AND DEAD STOCK AND RS.263000/- AS SALE PROCEEDS AND ASSESS THE SAME @5% U/S.44AF, THE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME BE DELETED FROM THE COMPUTATION OF TOTAL INCOME. 2. THE APPELLANT CRAVES LEAVE TO ADD/AMEND/ALTER O R DELETE ANY OF THE GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING O F APPEAL. THE ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CI T(A) ERRED IN CONFIRMING THE ADDITION OF RS. 3,83,300/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE A N INDIVIDUAL AND ENGAGED IN THE BUSINESS OF RETAIL TRADING OF AUTO RICKSHAW PARTS UNDER THE NAME OF M/S NEW RAAZ AUTOMOBILES. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION WAS SUBJECTED TO ASSESSMENT U/S 147 R .W.S. 143(3) OF THE ACT AS THE ASSESSEE DID NOT FILE THE RETURN AS PER THE PROVISION OF SECTION 139 OF THE ACT. THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE DID NOT DISCLOSE HIS ONE OF THE BANK ACCOUNT MAINTAINED WITH CENTRAL BANK OF INDIA IN HIS REGULAR BOOKS OF ACCOUNT. THEREFORE TH E AO DIRECTED THE ASSESSEE TO FURNISH THE BANK STATEMENT FOR THE F.Y. 2008-09 ALONG WITH THE EXPLANATION AND SUPPORTING EVIDENCE REGARDING T HE DEPOSITS AND WITHDRAWALS. IN RESPONSE, THE ASSESSEE FILED A COPY OF THE BANK STATEMENT AND EXPLAINED THAT THE DEPOSITS APPEARING IN THE BA NK STATEMENT WAS FROM THE TRADING RECEIPT. ITA NO.2375/AHD/2016 MOHAMEDRAFIQ MALANGBHAI DUDHWALA VS. ITO ASS T.YEAR 2009-10 - 3 - HOWEVER, THE AO DISAGREED WITH THE EXPLANATION OF T HE ASSESSEE AS NOTHING WAS PRODUCED IN SUPPORT OF THE CLAIM. THERE FORE THE AO DISREGARDED THE ASSESSEES CONTENTION THAT RS. 1,46 ,000/- WAS DEPOSITED OUT OF THE CASH SALE RECEIPT AND RS. 1,05,647/- WAS DEPOSITED THROUGH CHEQUES ON VARIOUS DATES OUT OF THE TRADING SALE. T HE AO ALSO REJECTED THE ASSESSEES REQUEST TO CONSIDER THE INCOME AS PER SE CTION 44AF OF THE ACT. THE ASSESSEE ALSO DID NOT SUBMIT ANY SUPPORTING EVI DENCE IN RESPECT OF RS. 2,37,000/- WHICH WAS DEPOSITED IN THE BANK ACCO UNT OF HIS WIFE. THE AO ON PERUSAL OF THE BANK STATEMENT OF WIFE OF THE ASSESSEE ALSO OBSERVED THAT THERE WAS CREDITED A SUM OF RS. 133/- AS INTEREST. THUS IN VIEW OF THE SAME, THE AO ADDED THE SUM OF RS. 4,88, 780/- TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT (A). THE ASSESSEE BEFORE THE LD. CIT (A) SUBMITTED THAT THE AMOUNT APPEARING IN THE CREDIT SIDE OF THE BANK ACCOUNT FOR RS. 97,7 58/- WAS REFUNDED AGAINST SHARE APPLICATION MONEY WHICH WAS EARLIER I NVESTED IN THE IPO OF THE COMPANY. THE ASSESSEE FURTHER SUBMITTED THAT THE CASH OF RS. 1,46,000/- AND RS. 2,37,000/- DEPOSITED IN OWN ACCOUNT AND HIS WIFE AC COUNT WAS BASICALLY THE SALE PROCEEDS OF THE SHOP OF RS. 90,000/-, SALE PROCEEDS OF THE SCRAP OF RS. 30,000/- AND BALANCE RS. 2,63,500/- WAS RECE IVED AGAINST THE SALE OF GOODS AND CASH RECEIVED FROM DEBTORS. ITA NO.2375/AHD/2016 MOHAMEDRAFIQ MALANGBHAI DUDHWALA VS. ITO ASS T.YEAR 2009-10 - 4 - HOWEVER, THE LD. CIT (A) OBSERVED THAT THE ASSESSEE DEPOSITED CASH RS. 1,46,000/- IN THE CENTRAL BANK ACCOUNT BETWEEN 01-0 5-2008 TO 02-06- 2008 WHILE THE CHEQUE OF RS. 97,758/- WAS CREDITED ON 09-09-2008. SIMILARLY, THE CASH OF RS. 2,00,000/- WAS DEPOSITE D IN HIS WIFE ACCOUNT BETWEEN 14-05-2008 TO 09-06-2008 AND RS. 37,500/- O N 25-06-2008. THUS THE TOTAL CASH DEPOSITED IN BOTH THE ACCOUNT W AS RS. 3,83,500/- ONLY. AS SUCH THE ASSESSEES CONTENTION THAT THE CASH WAS DEPOSITED FROM SALE PROCEEDS OF THE SHOP WAS NOT POSSIBLE AS THE SALE O F THE SHOP WAS EFFECTED ON 27-08-2008. SIMILARLY, THE CASH DEPOSITED AGAINS T THE SALE OF SCRAP WAS ALSO NOT POSSIBLE AS THE SHOP SOLD BY THE ASSES SEE ALONG WITH SCRAP WHICH WAS LYING IN THE SHOP. FURTHER, THE ASSESSEE DID NOT PROVIDE/SUBMIT ANY EVIDENCE IN RESPECT OF THE SALE OF SCRAP. THE LD. CIT (A) FURTHER OBSERVED THAT THE ASSESSEE AFTER DEPOSITING THE CASH UTILIZED THE SAME FOR PURCHASE OF SHARES THROU GH ANGEL BROKING AND ASHOKA STOCK BROKING LTD. THUS, THE LD. CIT (A) WAS OF THE VIEW THAT THE CASH GENERATED THROUGH THE SALE OF SHOP AND SCRAP WAS NOT DEPOSITED IN THE ACCOUNT. AS SUCH THE ASSESSEE WAS HAVING THE CASH TO THE EXTENT OF RS. 3 ,83,500/- AT THE TIME OF DEPOSITING THE SAME FOR WHICH THE ASSESSEE HAS NO E XPLANATION. THEREFORE THE LD. CIT (A) CONFIRMED THE ADDITION OF RS. 3,83, 500/- MADE BY THE AO U/S 69A OF THE ACT. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT (A), TH E ASSESSEE IS IN APPEAL BEFORE US. ITA NO.2375/AHD/2016 MOHAMEDRAFIQ MALANGBHAI DUDHWALA VS. ITO ASS T.YEAR 2009-10 - 5 - 4. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNI NG FROM PAGES 1 TO 54 AND SUBMITTED AS UNDER: 1. THE A.O. HAS MADE ADDITION OF RS.4,88,647/- COMPRIS ING TOTAL OF DEPOSIT SIDE OF BANK A/C. OF F.Y. 2008-09 RS.2,5 1,647/-. (PAGE NO.7 OF PAPER BOOK, RS.2,37,000/- IN THE BANK A/C. OF HIS WIFE REFER TO PAGE NOD.11 OF PAPER BOOK. RS.133/- BANK INTEREST IN THE BANK A/C. OF WIFE. 2. THERE IS CASH WITHDRAWAL OF RS.50,000/- ON 22/01/20 08 RELEVANT TO A.Y.2008-09 IN THE BANK ACCOUNT OF THE ASSESSEE (REFER TO PAGE NO.11 OF PAPER BOOK) OF MUMTAZBANU, WIFE OF AS SESSEE. 3. AMOUNT OF RS.97,758/- CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE WITH PAN OF PAYEE ON 08/09/2008 BEING RETU RN OF SHARE APPLICATION MONEY MADE ON 31/01/2008 DULY DEB ITED IN THE BANK ACCOUNT OF THE ASSESSEE VIDE CHEQUE NO.219 744 (REFER TO PAGE NO.9 OF PAPER BOOK) WHEREBY AMOUNT DEPOSITE D OF RS.94,500/- IS EXPLAINED. 4. CASH AMOUNT OF RS.59,000/- WITHDRAWN BY THE ASSESSE E ON 28/03/2008 AVAILABLE TO EXPLAIN CASH DEPOSIT IN F.Y . 2008-09. 5. WIFE OF THE ASSESSEE IS EDUCATED UPTO S.S.C. AS PER SCHOOL LEAVING CERTIFICATE AT PAGE NO.10 OF THE PAPER BOOK . 5. ON THE OTHER HAND, THE LD. DR VEHEMENTLY SUPP ORTED THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES TO ITA NO.2375/AHD/2016 MOHAMEDRAFIQ MALANGBHAI DUDHWALA VS. ITO ASS T.YEAR 2009-10 - 6 - THE CASH DEPOSITED BY THE ASSESSEE IN HIS SAVING BA NK ACCOUNT AS WELL AS IN THE SAVING BANK ACCOUNT OF HIS WIFE. THE BREAKUP OF THE CASH DEPOSITS STANDS AS UNDER: I. DEPOSIT OF CASH IN THE BANK ACCOUNT OF THE ASSESSEE RS. 1,46,000.00 II. DEPOSIT OF CASH IN THE BANK ACCOUNT OF THE ASSESSEE S WIFE RS. 2,37,500.00 REGARDING THE DEPOSIT OF CASH IN THE BANK ACCOUNT O F THE ASSESSEE FOR 1,46,000.00 WE NOTE THAT THE ASSESSEE HAS WITHDRAWN CASH OF 59,000.00 FROM HIS SAVING BANK ACCOUNT DATED 28-3- 2008 AS EVIDENT FROM THE BANK STATEMENT PLACED ON PAGE 9 OF THE PAP ER BOOK. THERE WAS NO INFORMATION AVAILABLE WHETHER THE ASSESSEE UTILI ZED SUCH CASH WITHDRAWAL FOR SOME OTHER PURPOSES. THEREFORE WE CA N SAFELY ASSUME THAT SUCH AMOUNT OF CASH OF 59,000 WAS AVAILABLE WITH THE ASSESSEE WHICH HAS BEEN UTILIZED IN THE DEPOSIT OF CASH IN HIS BAN K ACCOUNT AS DISCUSSED ABOVE. THUS IN OUR CONSIDERED VIEW, THE ASSESSEE IS ENTITLED TO RELIEF TO THE EXTENT OF 59,000 ONLY. REGARDING THE DEPOSIT OF CASH IN THE BANK ACCOUNT O F THE ASSESSEES WIFE, WE NOTE THAT THE SAME CANNOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNTIL AND UNLESS THE CASE OF THE ASSESSEE FALLS UND ER THE CHAPTER V OF THE ACT, I.E., CLUBBING OF INCOME. AS SUCH, WE FIND THA T THE PROVISIONS OF CHAPTER V WERE NOT INVOKED. THEREFORE WE DELETE THE ADDITION MADE BY ITA NO.2375/AHD/2016 MOHAMEDRAFIQ MALANGBHAI DUDHWALA VS. ITO ASS T.YEAR 2009-10 - 7 - THE AO WHICH WAS SUBSEQUENTLY CONFIRMED BY THE LEAR NED CIT-A. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 31/05/2019 SD/- SD/- (MS. MADHUMITA ROY) (WASEEM A HMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 31/05/2019 &.., .(.. / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-2, VADODARA 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, / ITAT, AHMEDABAD 1. DATE OF DICTATION 28.5.19 (WORD PROCESSED BY HON BLE AM IN HIS COMPUTER BY DRAGON) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.5.19 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.5.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.5.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER